Cooper-Standard Holdings Inc. (CPS) - Q1 2026 10-Q Summary
Business Context and Reporting Period
This report covers the quarterly period ended March 31, 2026. Cooper-Standard Holdings Inc. is a leading manufacturer of sealing systems and fluid handling systems for passenger vehicles and light trucks, serving global automotive OEMs. The company operates through two primary reportable segments: Sealing Systems and Fluid Handling Systems.
Key Financial Metrics
| Metric | Q1 2026 | Q1 2025 |
|---|---|---|
| Sales | $686.4 million | $667.1 million |
| Gross Profit | $82.4 million (12.0% margin) | $77.2 million (11.6% margin) |
| Operating Income | $24.1 million | $22.3 million |
| Net Loss | $(33.3) million | $1.6 million (Net Income) |
| Adjusted EBITDA | $51.0 million | $58.7 million |
| Cash and Equivalents | $118.5 million | $148.4 million (Q1 2025) |
| Total Debt | $1,144.2 million | $1,104.6 million (Dec 31, 2025) |
| ABL Availability | $167.3 million | N/A |
Material Changes vs. Prior Period
- Revenue Growth: Sales increased 2.9% year-over-year, driven primarily by favorable foreign exchange impacts ($24.0 million), partially offset by unfavorable volume and mix ($4.7 million).
- Net Loss: The company reported a net loss of $33.3 million compared to net income of $1.6 million in Q1 2025. This reversal was primarily due to a $24.2 million loss on refinancing and extinguishment of debt and the absence of $10.0 million in royalty settlement income recognized in the prior year.
- Restructuring: Restructuring charges increased to $4.6 million from $2.1 million, driven by higher employee severance and exit costs in the Fluid Handling Systems segment.
- Debt Refinancing: On March 4, 2026, the company completed a major refinancing, issuing $1.1 billion in 9.250% Senior Secured First Lien Notes due 2031 to redeem existing First Lien, Third Lien, and 2026 Senior Notes. This extended maturities and reduced cash interest requirements.
- Cash Flow: Net cash used in operating activities was $69.2 million, compared to $14.9 million in the prior year, impacted by higher interest payments and working capital changes.
Outlook, Risks, and Management Commentary
- Capital Expenditures: Management anticipates total capital expenditures of approximately $55 million to $65 million for the full year 2026.
- Industry Outlook: Global light vehicle production is forecast to decline approximately 2% in 2026 compared to 2025. The outlook is clouded by geopolitical risks (Middle East conflicts), rising oil prices, and trade policy uncertainties.
- Liquidity: The company maintains a strong liquidity position with $118.5 million in cash and $167.3 million available under its Asset-Based Lending (ABL) facility. Management believes current resources are sufficient to meet obligations for the foreseeable future.
- Risks: Key risks include supply chain disruptions, raw material inflation, foreign currency fluctuations, and the potential impact of the ongoing IRS dispute regarding 2015-2018 tax filings (potential exposure estimated at less than $10 million).
Investor Verification Checklist
- Debt Structure: Verify the terms and covenants of the new $1.1 billion Senior Secured First Lien Notes issued in March 2026.
- Refinancing Costs: Confirm the total fees and redemption premiums ($35.3 million) and the timing of remaining payments ($6.4 million recorded in accounts payable).
- Working Capital: Review the increase in customer tooling receivables and inventory levels impacting operating cash flow.
- Tax Dispute: Monitor the status of the IRS dispute regarding foreign-based company sales income for tax years 2015-2018.
- Production Volumes: Track global light vehicle production trends, particularly in North America and Europe, to assess future revenue drivers.