Cooper-Standard Automotive Announces Second Quarter 2006 Results
NOVI, Mich., Aug. 14, 2006 -- Cooper-Standard Holdings Inc., the parent of Cooper-Standard Automotive Inc., today announced its second quarter 2006 financial results. Results for the period reflect the first full quarter results in our consolidated numbers of ITT Industries' automotive Fluid Handling Systems (FHS) division. The Company reported sales of $592.5 million and net income of $20.1 million. The Company is a leading global manufacturer of body sealing, fluid handling, and noise, vibration, and harshness (NVH) control parts for the automotive industry.
A summary of the unaudited financial results for the quarter follows:
$Millions Qtr-2 Qtr-2 YTD YTD
2005 2006 2005 2006
Net Sales $489.1 $592.5 $959.3 $1,132.9
Earnings Before Taxes $8.8 $22.0 $8.2 $29.9
Net Income $7.7 $20.1 $7.2 $25.5
Sales in the second quarter 2006 were 21 percent higher than the same period in 2005, and year to date sales were 18 percent higher than the previous year, with both increases primarily due to the inclusion of FHS sales. Net income was $20.1 million, up $12.4 million from 2005, which was attributable to operational performance in addition to the inclusion of FHS. Year to date net income was $25.5 million, up $18.3 million over 2005. Second quarter 2006 interest expense was $22.6 million compared to 2005 interest expense of $16.5 million due to the incremental new debt associated with the acquisition and slightly higher interest rates.
"The second quarter continued to build upon the success of the first quarter," said Jim McElya, president and CEO. "Cooper-Standard delivered a $21.2 million quarterly improvement in Adjusted EBITDA, our fourth straight quarter of year over year improvement. Choosing the right acquisition, and then successfully integrating it, is a core competency of ours, and we are very pleased with the pace of bringing FHS into the fold. In spite of challenging conditions within the industry we are confident the company is poised for future growth."
Highlights of the Second Quarter 2006
Significant number of product launches: Cooper-Standard successfully launched products for the following vehicles during the second quarter of 2006:
* Alfa Romeo (Spider)
* DaimlerChrysler (Chrysler Pacifica, Jeep Compass, and
Mercedes M-Class)
* Ford (Ford Mustang, Land Rover Sport, and Volvo S80)
* General Motors (Chevrolet Avalanche and Saturn Aura)
* Nissan (Nissan Versa/Tiida and Kangoo)
* PSA (C-4 MPV, Expert, Jumpy, and Scudo)
NISCO Joint Venture launch:
* Acura RDX
Incremental new business awards: During the second quarter of 2006 the Company was awarded incremental annualized net new business of over $64.7 million, of which 40 percent was from customers other than the traditional "Big Three," bringing the year to date total net new business to $94.3 million.
Awards and recognitions: In recognition of excellence in various aspects of its operations, Cooper-Standard received the following industry awards:
* Global Six Sigma Summit Award for "Best Achievement for Design For
Six Sigma"
* Nissan's Quality Master Certificate and Zero Defect Certificate
(Torreon, Mexico facility)
* Automotive Component Holdings-Supplier Advanced Quality Planning Team-
Winner's Circle status
* Techpoint's Advanced Manufacturing Mira Award-Finalist
NISCO Joint Venture award:
* Ford's Silver World Excellence Award
Adjusted EBITDA Reconciliation
EBITDA during the second quarter of 2006 increased $25.6 million to $79.2 million, and for the six months ended June 30th EBITDA increased $45.0 million to $139.8 million, compared to the same periods in 2005. After accounting for adjustments relating to restructuring, inventory fair value write up, and foreign exchange, Adjusted EBITDA for the second quarter in 2006 increased $21.2 million to $77.7 million, and for the six months ended June 30, 2006 rose $32.7 million to $142.7 million, compared to the same periods in 2005.
Three Months Ended Six Months Ended
June 30, June 30,
2005 2006 2005 2006
Net income $7.7 $20.1 $7.2 $25.6
Provision for income taxes 1.1 1.9 1.0 4.3
Interest expense, net of
interest income 16.7 21.9 32.9 42.2
EBIT 25.5 43.9 41.1 72.1
Depreciation and amortization 28.1 35.3 53.7 67.7
EBITDA $53.6 $79.2 $94.8 $139.8
Restructuring 0.2 3.7 0.4 5.9
Foreign exchange loss (gain)(1) 1.8 (5.2) 4.1 (5.1)
Inventory write-up(2) - - 9.8 2.1
Tooling write-up(3) 0.9 - 0.9 -
Adjusted EBITDA $56.5 $77.7 $110.0 $142.7
(1) Unrealized foreign exchanges loss (gain) on indebtedness related to
the 2004 acquisition of Cooper-Standard Automotive.
(2) A write-up of inventory to fair value related to acquisitions.
(3) Purchase accounting adjustment related to the 2004 acquisition of
Cooper-Standard Automotive.
"Management uses Adjusted EBITDA as a measure of performance and to demonstrate compliance with certain debt covenants. The Adjusted EBITDA may vary slightly from the amount used in calculating covenant compliance due to the classification of joint venture equity earnings. EBITDA should not be construed as income from operations or net income, as determined by generally accepted accounting principles. Other companies may report EBITDA differently.
For further information, refer to Cooper-Standard's quarterly report on Form 10-Q filed with the Securities and Exchange Commission and posted on the company's Web site at: http://www.cooperstandard.com/
About Cooper-Standard Automotive
Cooper-Standard Automotive Inc., headquartered in Novi, Mich., specializes in the manufacture and marketing of systems and components for the global automotive industry. Products include body sealing systems, fluid handling systems, and NVH control systems. Cooper-Standard Automotive Inc. employs more than 16,000 across 61 facilities in 14 countries. For more information, visit the company's Web site at: http://www.cooperstandard.com/.
Cooper-Standard is a privately-held portfolio company of The Cypress Group and Goldman Sachs Capital Partners Funds.
The Cypress Group is a private equity investment firm managing more than $3.5 billion of capital. Cypress has an extensive track record of making growth-oriented investments in targeted industry sectors and building equity value alongside proven management teams.
The GS Capital Partners Funds are part of Goldman Sachs' Principal Investment Area in the Merchant Banking Division. Goldman Sachs is one of the oldest and largest investment banking firms and is also a global leader in private corporate equity and mezzanine investing. Goldman Sachs' Principal Investment Area has formed 12 investment vehicles aggregating over $36 billion of capital to date.