Novi, Michigan - Cooper Standard Holdings Inc. reported increased sales and net income for the third quarter of 2014.
The firm’s sales increased to $781 million for the third quarter, compared to $764.1 in 2013. Net income also increased to $22.7 million from $20.6 million in the previous year.
For the nine-month period, sales stood at about $2.48 billion, up from about $2.3 billion in 2013. Net income, however, dropped to $55.6 million from $68.7 million in 2013.
“Our net income on a year to date basis was affected by $18.9 million of a one-time loss in connection with our debt extinguishment in the second quarter of 2014,” chief financial officer Allen Campbell said during a conference call discussing the firm’s financial results.
Sales increased in all regions except for Brazil, which fell to $40 million from $43 million in 2013, Cooper Standard said. For the nine-month period, sales fell to $121 million from $139 million.
Chairman and CEO Jeffrey Edwards said on the call that the firm experienced five weeks of down time on a significant automotive platform from one of the firm’s largest customers in Brazil.
“Overall the global economy is struggling to gain momentum which is mostly attributed to downturns in Brazil and Europe,” Edwards said. “For the year IHS has reduced its forecast in Brazil by 4.3 percent and has also reduced its 2015-21 forecast in Brazil by 347,000 vehicles annually. Our customers in Brazil have significantly reduced their production volume.”
Cooper Standard entered 2014 with a cash balance of $184.4 million and through nine months the firm’s balance sits at $244.9 million. According to the firm’s presentation, Cooper Standard gained $44.9 million from the proceeds of the sale of its Thermal and Emissions business.
“From a long-term perspective, we had an excellent and productive quarter executing our profitable growth strategy,” Edwards said. “We had notable additions in Asia and we completed the sale of our Thermal and Emissions business as part of our decision to focus on four core product lines.”
Worldwide developments on schedule
Edwards said the firm’s facility in Serbia remains on schedule to begin production and that it added fluid transfer systems capacity in Spain. Sales in Europe improved to $265 million from $258 million in 2013, and to $879 million from $806 million for the nine-month period.
North America represented the biggest portion of Cooper Standard’s sales at $413 million, up from $409 million in 2013. For the nine-month period sales improved to about $1.3 billion, from about $1.2 billion.
Asia-Pacific remains one of Cooper Standard’s most active regions. Its sales increased for the quarter to $62 million from $54 million in 2013 and up to $178 million for the nine-month period from $160 million in 2013.
The firm reached an agreement to become a 95 percent owner of its joint venture with Huayu Automotive Systems Co.—Huayu-Cooper Standard Sealing Systems Co. Ltd. Edwards said the acquisition will give the firm an additional nine manufacturing facilities and two technical centers in China, bringing its total Chinese manufacturing presence for sealing and trim to 12 facilities.
Cooper Standard also is forming a joint venture with Inoac Corp. of Japan to expand the reach of its fluid transfer systems products. The deal is expected to close in the third quarter, with Cooper Standard owning 51 percent of the new firm—Cooper Standard Inoac Pte. Ltd.
Edwards said the firm anticipates both of these transactions to be completed in the first quarter 2015.
Finally, the firm recently opened its Asia-Pacific Technical Center in Shanghai and two developments in India—recently opening another sealing and trim facility in Bawal with a second in Sanand on target to open in early 2015
“Growing our presence, especially in China, is essential to our profitable growth strategy given that China alone will produce a third of the world’s vehicles by 2020,” Edwards said.