UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

___________________________________

FORM 10-Q

___________________________________

(Mark One)


☒			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended ~~June~~September 30, 2022


☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from __________ to __________.

Commission File Number: 001-36127

______________________________

COOPER-STANDARD HOLDINGS INC.

(Exact name of registrant as specified in its charter)

______________________________


Delaware						20-1945088
(State or other jurisdiction of incorporation or organization)						(I.R.S. Employer Identification No.)

40300 Traditions Drive

Northville, Michigan 48168

(Address of principal executive offices)

(Zip Code)

(248) 596-5900

(Registrant’s telephone number, including area code)

______________________________

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading Symbol(s)

Name of each exchange on which registered

Common Stock, par value $0.001 per share

CPS

New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or emerging growth company. See definitions of “large accelerated filer,” “accelerated filer,~~��~~” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.


Large accelerated filer	☐	Accelerated filer	☒
Non-accelerated filer	☐	Smaller reporting company	☒
		Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

As of ~~July 29,~~October 26, 2022, there were ~~17,106,178~~17,108,029 shares of the registrant’s common stock, $0.001 par value, outstanding.

COOPER-STANDARD HOLDINGS INC.

Form 10-Q

For the period ended ~~June~~September 30, 2022

PART I — FINANCIAL INFORMATION

Item 1. Financial Statements

COOPER-STANDARD HOLDINGS INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

(Dollar amounts in thousands except per share amounts)


		Three Months Ended June 30,				Six Months Ended June 30,					Three Months Ended September 30,				Nine Months Ended September 30,
		2022		2021		2022		2021			2022		2021		2022		2021
Sales	Sales	$	605,917	$	533,185	$	1,218,901	$	1,202,152	Sales	$	657,153	$	526,690	$	1,876,054	$	1,728,842
Cost of products sold	Cost of products sold	590,541		534,118		1,181,983		1,134,793		Cost of products sold	618,594		534,817		1,800,577		1,669,610
Gross profit (loss)	Gross profit (loss)	15,376		(933)		36,918		67,359		Gross profit (loss)	38,559		(8,127)		75,477		59,232
Selling, administration & engineering expenses	Selling, administration & engineering expenses	52,282		50,085		104,186		108,139		Selling, administration & engineering expenses	44,847		60,367		149,033		168,506
Loss (gain) on sale of business, net		—		195		—		(696)
Gain on sale of business, net										Gain on sale of business, net	—		—		—		(696)

Gain on sale of fixed assets, net	Gain on sale of fixed assets, net	(33,391)		—		(33,391)		—		Gain on sale of fixed assets, net	—		—		(33,391)		—
Amortization of intangibles	Amortization of intangibles	1,737		1,933		3,483		3,705		Amortization of intangibles	1,693		1,819		5,176		5,524
Restructuring charges	Restructuring charges	3,482		11,631		11,313		32,678		Restructuring charges	1,701		1,573		13,014		34,251

Impairment charges	Impairment charges	3		841		458		841		Impairment charges	379		1,006		837		1,847
Operating loss	Operating loss	(8,737)		(65,618)		(49,131)		(77,308)		Operating loss	(10,061)		(72,892)		(59,192)		(150,200)
Interest expense, net of interest income	Interest expense, net of interest income	(18,454)		(18,125)		(36,631)		(35,909)		Interest expense, net of interest income	(20,747)		(18,243)		(57,378)		(54,152)
Equity in (losses) earnings of affiliates	Equity in (losses) earnings of affiliates	(3,446)		393		(4,802)		1,179		Equity in (losses) earnings of affiliates	(3,391)		(1,114)		(8,193)		65

Other (expense) income, net		(1,509)		1,362		(2,720)		(3,727)
Other income (expense), net										Other income (expense), net	146		(494)		(2,574)		(4,221)
Loss before income taxes	Loss before income taxes	(32,146)		(81,988)		(93,284)		(115,765)		Loss before income taxes	(34,053)		(92,743)		(127,337)		(208,508)
Income tax expense (benefit)		2,005		(17,459)		2,657		(16,523)
Income tax (benefit) expense										Income tax (benefit) expense	(833)		32,121		1,824		15,598
Net loss	Net loss	(34,151)		(64,529)		(95,941)		(99,242)		Net loss	(33,220)		(124,864)		(129,161)		(224,106)
Net loss attributable to noncontrolling interests	Net loss attributable to noncontrolling interests	904		918		1,334		1,767		Net loss attributable to noncontrolling interests	534		1,691		1,868		3,458
Net loss attributable to Cooper-Standard Holdings Inc.	Net loss attributable to Cooper-Standard Holdings Inc.	$	(33,247)	$	(63,611)	$	(94,607)	$	(97,475)	Net loss attributable to Cooper-Standard Holdings Inc.	$	(32,686)	$	(123,173)	$	(127,293)	$	(220,648)

Loss per share:	Loss per share:									Loss per share:
Basic	Basic	$	(1.93)	$	(3.73)	$	(5.51)	$	(5.74)	Basic	$	(1.90)	$	(7.20)	$	(7.41)	$	(12.96)
Diluted	Diluted	$	(1.93)	$	(3.73)	$	(5.51)	$	(5.74)	Diluted	$	(1.90)	$	(7.20)	$	(7.41)	$	(12.96)

The accompanying notes are an integral part of these financial statements.

COOPER-STANDARD HOLDINGS INC.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS

(Unaudited)

(Dollar amounts in thousands)


		Three Months Ended June 30,				Six Months Ended June 30,					Three Months Ended September 30,				Nine Months Ended September 30,
		2022		2021		2022		2021			2022		2021		2022		2021
Net loss	Net loss	$	(34,151)	$	(64,529)	$	(95,941)	$	(99,242)	Net loss	$	(33,220)	$	(124,864)	$	(129,161)	$	(224,106)
Other comprehensive income (loss):	Other comprehensive income (loss):									Other comprehensive income (loss):
Currency translation adjustment	Currency translation adjustment	(17,084)		8,713		(8,719)		2,141		Currency translation adjustment	(18,960)		(6,215)		(27,679)		(4,074)
Benefit plan liabilities adjustment, net of tax	Benefit plan liabilities adjustment, net of tax	2,063		611		3,047		3,350		Benefit plan liabilities adjustment, net of tax	2,398		4,978		5,445		8,328
Fair value change of derivatives, net of tax	Fair value change of derivatives, net of tax	(1,023)		751		1,408		180		Fair value change of derivatives, net of tax	2,422		(2,132)		3,830		(1,952)
Other comprehensive (loss) income, net of tax	Other comprehensive (loss) income, net of tax	(16,044)		10,075		(4,264)		5,671		Other comprehensive (loss) income, net of tax	(14,140)		(3,369)		(18,404)		2,302
Comprehensive loss	Comprehensive loss	(50,195)		(54,454)		(100,205)		(93,571)		Comprehensive loss	(47,360)		(128,233)		(147,565)		(221,804)
Comprehensive loss attributable to noncontrolling interests	Comprehensive loss attributable to noncontrolling interests	627		727		1,068		1,828		Comprehensive loss attributable to noncontrolling interests	185		1,916		1,253		3,744
Comprehensive loss attributable to Cooper-Standard Holdings Inc.	Comprehensive loss attributable to Cooper-Standard Holdings Inc.	$	(49,568)	$	(53,727)	$	(99,137)	$	(91,743)	Comprehensive loss attributable to Cooper-Standard Holdings Inc.	$	(47,175)	$	(126,317)	$	(146,312)	$	(218,060)

The accompanying notes are an integral part of these financial statements.

COOPER-STANDARD HOLDINGS INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(Dollar amounts in thousands except share amounts)


		June 30, 2022		December 31, 2021			September 30, 2022		December 31, 2021
		(unaudited)					(unaudited)
Assets	Assets					Assets
Current assets:	Current assets:					Current assets:
Cash and cash equivalents	Cash and cash equivalents	$	250,458	$	248,010	Cash and cash equivalents	$	231,177	$	248,010
Accounts receivable, net	Accounts receivable, net	350,001		317,469		Accounts receivable, net	366,824		317,469
Tooling receivable, net	Tooling receivable, net	87,414		88,900		Tooling receivable, net	93,832		88,900
Inventories	Inventories	183,568		158,075		Inventories	195,003		158,075
Prepaid expenses	Prepaid expenses	30,360		26,313		Prepaid expenses	31,348		26,313
Income tax receivable and refundable credits	Income tax receivable and refundable credits	26,838		82,813		Income tax receivable and refundable credits	12,474		82,813
Other current assets	Other current assets	70,467		73,317		Other current assets	74,525		73,317

Total current assets	Total current assets	999,106		994,897		Total current assets	1,005,183		994,897
Property, plant and equipment, net	Property, plant and equipment, net	702,507		784,348		Property, plant and equipment, net	667,117		784,348
Operating lease right-of-use assets, net	Operating lease right-of-use assets, net	102,407		111,052		Operating lease right-of-use assets, net	95,803		111,052
Goodwill	Goodwill	142,213		142,282		Goodwill	141,958		142,282
Intangible assets, net	Intangible assets, net	51,015		60,375		Intangible assets, net	48,413		60,375

Other assets	Other assets	143,134		133,539		Other assets	143,727		133,539
Total assets	Total assets	$	2,140,382	$	2,226,493	Total assets	$	2,102,201	$	2,226,493

Liabilities and Equity	Liabilities and Equity					Liabilities and Equity
Current liabilities:	Current liabilities:					Current liabilities:
Debt payable within one year	Debt payable within one year	$	51,016	$	56,111	Debt payable within one year	$	48,890	$	56,111
Accounts payable	Accounts payable	357,327		348,133		Accounts payable	373,481		348,133
Payroll liabilities	Payroll liabilities	94,646		69,353		Payroll liabilities	94,712		69,353

Accrued liabilities	Accrued liabilities	121,416		101,466		Accrued liabilities	130,257		101,466
Current operating lease liabilities	Current operating lease liabilities	21,177		22,552		Current operating lease liabilities	20,172		22,552

Total current liabilities	Total current liabilities	645,582		597,615		Total current liabilities	667,512		597,615
Long-term debt	Long-term debt	979,227		980,604		Long-term debt	978,435		980,604
Pension benefits	Pension benefits	120,438		129,880		Pension benefits	113,521		129,880
Postretirement benefits other than pensions	Postretirement benefits other than pensions	42,525		43,498		Postretirement benefits other than pensions	40,960		43,498

Long-term operating lease liabilities	Long-term operating lease liabilities	84,940		92,760		Long-term operating lease liabilities	79,222		92,760
Other liabilities	Other liabilities	45,957		50,776		Other liabilities	47,289		50,776
Total liabilities	Total liabilities	1,918,669		1,895,133		Total liabilities	1,926,939		1,895,133

Equity:	Equity:					Equity:
Common stock, $0.001 par value, 190,000,000 shares authorized; 19,166,930 shares issued and 17,101,121 shares outstanding as of June 30, 2022, and 19,057,788 shares issued and 16,991,979 outstanding as of December 31, 2021		17		17
Common stock, $0.001 par value, 190,000,000 shares authorized; 19,173,838 shares issued and 17,108,029 shares outstanding as of September 30, 2022, and 19,057,788 shares issued and 16,991,979 outstanding as of December 31, 2021						Common stock, $0.001 par value, 190,000,000 shares authorized; 19,173,838 shares issued and 17,108,029 shares outstanding as of September 30, 2022, and 19,057,788 shares issued and 16,991,979 outstanding as of December 31, 2021	17		17
Additional paid-in capital	Additional paid-in capital	506,062		504,497		Additional paid-in capital	506,971		504,497
Retained (loss) earnings	Retained (loss) earnings	(69,054)		25,553		Retained (loss) earnings	(101,740)		25,553
Accumulated other comprehensive loss	Accumulated other comprehensive loss	(209,714)		(205,184)		Accumulated other comprehensive loss	(224,203)		(205,184)
Total Cooper-Standard Holdings Inc. equity	Total Cooper-Standard Holdings Inc. equity	227,311		324,883		Total Cooper-Standard Holdings Inc. equity	181,045		324,883
Noncontrolling interests	Noncontrolling interests	(5,598)		6,477		Noncontrolling interests	(5,783)		6,477
Total equity	Total equity	221,713		331,360		Total equity	175,262		331,360
Total liabilities and equity	Total liabilities and equity	$	2,140,382	$	2,226,493	Total liabilities and equity	$	2,102,201	$	2,226,493

The accompanying notes are an integral part of these financial statements.

COOPER-STANDARD HOLDINGS INC.

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

(Unaudited)

(Dollar amounts in thousands except share amounts)


		Total Equity																Total Equity
		Common Shares	Common Stock		Additional Paid-In Capital		Retained Earnings (Loss)		Accumulated Other Comprehensive Loss		Cooper-Standard Holdings Inc. Equity		Noncontrolling Interests		Total Equity			Common Shares	Common Stock		Additional Paid-In Capital		Retained Earnings (Loss)		Accumulated Other Comprehensive Loss		Cooper-Standard Holdings Inc. Equity		Noncontrolling Interests		Total Equity
Balance as of December 31, 2021	Balance as of December 31, 2021	16,991,979	$	17	$	504,497	$	25,553	$	(205,184)	$	324,883	$	6,477	$	331,360	Balance as of December 31, 2021	16,991,979	$	17	$	504,497	$	25,553	$	(205,184)	$	324,883	$	6,477	$	331,360

Share-based compensation, net	Share-based compensation, net	69,716	—		437		—		—		437		—		437		Share-based compensation, net	69,716	—		437		—		—		437		—		437

Deconsolidation of noncontrolling interest	Deconsolidation of noncontrolling interest	—	—		—		—		—		—		(11,007)		(11,007)		Deconsolidation of noncontrolling interest	—	—		—		—		—		—		(11,007)		(11,007)
Net loss	Net loss	—	—		—		(61,360)		—		(61,360)		(430)		(61,790)		Net loss	—	—		—		(61,360)		—		(61,360)		(430)		(61,790)
Other comprehensive income (loss)	Other comprehensive income (loss)	—	—		—		—		11,791		11,791		(11)		11,780		Other comprehensive income (loss)	—	—		—		—		11,791		11,791		(11)		11,780
Balance as of March 31, 2022	Balance as of March 31, 2022	17,061,695	$	17	$	504,934	$	(35,807)	$	(193,393)	$	275,751	$	(4,971)	$	270,780	Balance as of March 31, 2022	17,061,695	$	17	$	504,934	$	(35,807)	$	(193,393)	$	275,751	$	(4,971)	$	270,780

Share-based compensation, net	Share-based compensation, net	39,426	—		1,128		—		—		1,128		—		1,128		Share-based compensation, net	39,426	—		1,128		—		—		1,128		—		1,128

Net loss	Net loss	—	—		—		(33,247)		—		(33,247)		(904)		(34,151)		Net loss	—	—		—		(33,247)		—		(33,247)		(904)		(34,151)
Other comprehensive income (loss)	Other comprehensive income (loss)	—	—		—		—		(16,321)		(16,321)		277		(16,044)		Other comprehensive income (loss)	—	—		—		—		(16,321)		(16,321)		277		(16,044)
Balance as of June 30, 2022	Balance as of June 30, 2022	17,101,121	$	17	$	506,062	$	(69,054)	$	(209,714)	$	227,311	$	(5,598)	$	221,713	Balance as of June 30, 2022	17,101,121	$	17	$	506,062	$	(69,054)	$	(209,714)	$	227,311	$	(5,598)	$	221,713

Share-based compensation, net																	Share-based compensation, net	6,908	—		909		—		—		909		—		909

Net loss																	Net loss	—	—		—		(32,686)		—		(32,686)		(534)		(33,220)
Other comprehensive income (loss)																	Other comprehensive income (loss)	—	—		—		—		(14,489)		(14,489)		349		(14,140)
Balance as of September 30, 2022																	Balance as of September 30, 2022	17,108,029	$	17	$	506,971	$	(101,740)	$	(224,203)	$	181,045	$	(5,783)	$	175,262


		Total Equity																Total Equity
		Common Shares	Common Stock		Additional Paid-In Capital		Retained Earnings		Accumulated Other Comprehensive Loss		Cooper-Standard Holdings Inc. Equity		Noncontrolling Interests		Total Equity			Common Shares	Common Stock		Additional Paid-In Capital		Retained Earnings		Accumulated Other Comprehensive Loss		Cooper-Standard Holdings Inc. Equity		Noncontrolling Interests		Total Equity
Balance as of December 31, 2020	Balance as of December 31, 2020	16,897,085	$	17	$	498,719	$	350,270	$	(241,896)	$	607,110	$	17,001	$	624,111	Balance as of December 31, 2020	16,897,085	$	17	$	498,719	$	350,270	$	(241,896)	$	607,110	$	17,001	$	624,111

Share-based compensation, net	Share-based compensation, net	45,467	—		952		—		—		952		—		952		Share-based compensation, net	45,467	—		952		—		—		952		—		952

Net loss	Net loss	—	—		—		(33,864)		—		(33,864)		(849)		(34,713)		Net loss	—	—		—		(33,864)		—		(33,864)		(849)		(34,713)
Other comprehensive loss	Other comprehensive loss	—	—		—		—		(4,152)		(4,152)		(252)		(4,404)		Other comprehensive loss	—	—		—		—		(4,152)		(4,152)		(252)		(4,404)
Balance as of March 31, 2021	Balance as of March 31, 2021	16,942,552	$	17	$	499,671	$	316,406	$	(246,048)	$	570,046	$	15,900	$	585,946	Balance as of March 31, 2021	16,942,552	$	17	$	499,671	$	316,406	$	(246,048)	$	570,046	$	15,900	$	585,946

Share-based compensation, net	Share-based compensation, net	45,962	—		1,677		—		—		1,677		—		1,677		Share-based compensation, net	45,962	—		1,677		—		—		1,677		—		1,677

Net loss	Net loss	—	—		—		(63,611)		—		(63,611)		(918)		(64,529)		Net loss	—	—		—		(63,611)		—		(63,611)		(918)		(64,529)
Other comprehensive income	Other comprehensive income	—	—		—		—		9,884		9,884		191		10,075		Other comprehensive income	—	—		—		—		9,884		9,884		191		10,075
Balance as of June 30, 2021	Balance as of June 30, 2021	16,988,514	$	17	$	501,348	$	252,795	$	(236,164)	$	517,996	$	15,173	$	533,169	Balance as of June 30, 2021	16,988,514	$	17	$	501,348	$	252,795	$	(236,164)	$	517,996	$	15,173	$	533,169

Share-based compensation, net																	Share-based compensation, net	2,116	—		1,516		—		—		1,516		—		1,516

Net loss																	Net loss	—	—		—		(123,173)		—		(123,173)		(1,691)		(124,864)
Other comprehensive loss																	Other comprehensive loss	—	—		—		—		(3,144)		(3,144)		(225)		(3,369)
Balance as of September 30, 2021																	Balance as of September 30, 2021	16,990,630	$	17	$	502,864	$	129,622	$	(239,308)	$	393,195	$	13,257	$	406,452

The accompanying notes are an integral part of these financial statements.

COOPER-STANDARD HOLDINGS INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

(Dollar amounts in thousands)


		Six Months Ended June 30,					Nine Months Ended September 30,
		2022		2021			2022		2021
Operating Activities:	Operating Activities:					Operating Activities:
Net loss	Net loss	$	(95,941)	$	(99,242)	Net loss	$	(129,161)	$	(224,106)
Adjustments to reconcile net loss to net cash used in operating activities:	Adjustments to reconcile net loss to net cash used in operating activities:					Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation	Depreciation	60,062		65,267		Depreciation	88,997		99,497
Amortization of intangibles	Amortization of intangibles	3,483		3,705		Amortization of intangibles	5,176		5,524
Gain on sale of business, net	Gain on sale of business, net	—		(696)		Gain on sale of business, net	—		(696)

Gain on sale of fixed assets, net	Gain on sale of fixed assets, net	(33,391)		—		Gain on sale of fixed assets, net	(33,391)		—
Impairment charges	Impairment charges	458		841		Impairment charges	837		1,847
Share-based compensation expense	Share-based compensation expense	1,625		3,002		Share-based compensation expense	2,593		4,781
Equity in losses of affiliates, net of dividends related to earnings	Equity in losses of affiliates, net of dividends related to earnings	7,804		1,032		Equity in losses of affiliates, net of dividends related to earnings	11,195		2,146

Deferred income taxes	Deferred income taxes	(5,096)		(21,709)		Deferred income taxes	(5,478)		9,785
Other	Other	1,178		1,192		Other	2,383		2,219
Changes in operating assets and liabilities	Changes in operating assets and liabilities	59,583		(14,126)		Changes in operating assets and liabilities	46,489		(12,485)
Net cash used in operating activities	Net cash used in operating activities	(235)		(60,734)		Net cash used in operating activities	(10,360)		(111,488)
Investing activities:	Investing activities:					Investing activities:
Capital expenditures	Capital expenditures	(44,278)		(55,599)		Capital expenditures	(58,491)		(75,965)

Proceeds from sale of fixed assets	Proceeds from sale of fixed assets	52,633		3,000		Proceeds from sale of fixed assets	52,956		3,095
Other	Other	32		35		Other	167		35
Net cash provided by (used in) investing activities		8,387		(52,564)
Net cash used in investing activities						Net cash used in investing activities	(5,368)		(72,835)
Financing activities:	Financing activities:					Financing activities:

Principal payments on long-term debt	Principal payments on long-term debt	(2,536)		(2,895)		Principal payments on long-term debt	(3,786)		(4,227)
(Decrease) increase in short-term debt, net		(1,666)		14,811
Decrease in short-term debt, net						Decrease in short-term debt, net	(977)		(597)

Taxes withheld and paid on employees' share-based payment awards	Taxes withheld and paid on employees' share-based payment awards	(526)		(744)		Taxes withheld and paid on employees' share-based payment awards	(607)		(777)
Other	Other	651		532		Other	(688)		884
Net cash (used in) provided by financing activities		(4,077)		11,704
Net cash used in financing activities						Net cash used in financing activities	(6,058)		(4,717)
Effects of exchange rate changes on cash, cash equivalents and restricted cash	Effects of exchange rate changes on cash, cash equivalents and restricted cash	7,103		4,179		Effects of exchange rate changes on cash, cash equivalents and restricted cash	9,296		7,853
Changes in cash, cash equivalents and restricted cash	Changes in cash, cash equivalents and restricted cash	11,178		(97,415)		Changes in cash, cash equivalents and restricted cash	(12,490)		(181,187)

Cash, cash equivalents and restricted cash at beginning of period	Cash, cash equivalents and restricted cash at beginning of period	251,128		443,578		Cash, cash equivalents and restricted cash at beginning of period	251,128		443,578
Cash, cash equivalents and restricted cash at end of period	Cash, cash equivalents and restricted cash at end of period	$	262,306	$	346,163	Cash, cash equivalents and restricted cash at end of period	$	238,638	$	262,391

Reconciliation of cash, cash equivalents and restricted cash to the condensed consolidated balance sheet:	Reconciliation of cash, cash equivalents and restricted cash to the condensed consolidated balance sheet:					Reconciliation of cash, cash equivalents and restricted cash to the condensed consolidated balance sheet:
		Balance as of					Balance as of
		June 30, 2022		December 31, 2021			September 30, 2022		December 31, 2021
Cash and cash equivalents	Cash and cash equivalents	$	250,458	$	248,010	Cash and cash equivalents	$	231,177	$	248,010
Restricted cash included in other current assets	Restricted cash included in other current assets	9,893		961		Restricted cash included in other current assets	5,846		961
Restricted cash included in other assets	Restricted cash included in other assets	1,955		2,157		Restricted cash included in other assets	1,615		2,157
Total cash, cash equivalents and restricted cash	Total cash, cash equivalents and restricted cash	$	262,306	$	251,128	Total cash, cash equivalents and restricted cash	$	238,638	$	251,128

The accompanying notes are an integral part of these financial statements.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

(Dollar amounts in thousands except per share and share amounts)

1. Overview

Basis of Presentation

Cooper-Standard Holdings Inc. (together with its consolidated subsidiaries, the “Company” or “Cooper Standard”), through its wholly-owned subsidiary, Cooper-Standard Automotive Inc. (“CSA U.S.”), is a leading manufacturer of sealing, fuel and brake delivery, and fluid transfer systems. The Company’s products are primarily for use in passenger vehicles and light trucks that are manufactured by global automotive original equipment manufacturers (“OEMs”) and replacement markets. The Company conducts substantially all of its activities through its subsidiaries.

The accompanying unaudited condensed consolidated financial statements have been prepared pursuant to the rules and regulations of the U.S. Securities and Exchange Commission (the “SEC”) for interim financial information and should be read in conjunction with the consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2021 (the “2021 Annual Report”), as filed with the SEC. Accordingly, they do not include all of the information and footnotes required by accounting principles generally accepted in the United States (“U.S. GAAP”) for complete financial statements. These financial statements include all adjustments (consisting of normal, recurring adjustments) considered necessary for a fair presentation of the financial position and results of operations of the Company. The operating results for the interim period ended ~~June~~September 30, 2022 are not necessarily indicative of results for the full year. In preparing these financial statements, the Company has evaluated events and transactions for potential recognition or disclosure through the date the financial statements were issued.

2. Deconsolidation and Divestiture

2022 Joint Venture Deconsolidation

In the first quarter of 2022, a joint venture in the Asia Pacific region that was previously consolidated with a noncontrolling interest amended the governing document underlying the joint venture. The amendment to the agreement did not change the Company’s 51% ownership. However, as a result of the amendment and effective as of January 1, 2022, the joint venture was deconsolidated and accounted for as an investment under the equity method. The Company remeasured the retained investment using the income approach method and performed a discounted cash flow analysis of the projected free cash flows of the joint venture. As a result of the deconsolidation, during the ~~three~~nine months ended ~~March 31,~~September 30, 2022, the Company recorded a loss of $2,257, included in other income (expense), net in the condensed consolidated statements of operations.

2020 Divestiture

In the fourth quarter of 2019, management approved a plan to sell its European rubber fluid transfer and specialty sealing businesses, as well as its Indian operations. On July 1, 2020, the Company completed the divestiture to Mutares SE & Co. KGaA (“Mutares”). During the ~~three and six~~nine months ended ~~June~~September 30, 2021, the Company recorded subsequent adjustments resulting in a net gain of ~~$891 and $696, respectively.~~$696.

3. Revenue

Revenue is recognized for manufactured parts at a point in time, generally when products are shipped or delivered. The Company usually enters into agreements with customers to produce products at the beginning of a vehicle’s life. Blanket purchase orders received from customers and related documents generally establish the annual terms, including pricing, related to a vehicle model. Customers typically pay for parts based on customary business practices with payment terms generally between 30 and 90 days.

Revenue by customer group for the three months ended ~~June~~September 30, 2022 was as follows:


		North America		Europe		Asia Pacific		South America		Corporate, Eliminations and Other		Consolidated			North America		Europe		Asia Pacific		South America		Corporate, Eliminations and Other		Consolidated
Passenger and Light Duty	Passenger and Light Duty	$	323,532	$	120,693	$	85,338	$	26,256	$	—	$	555,819	Passenger and Light Duty	$	343,012	$	108,628	$	129,167	$	27,069	$	—	$	607,876
Commercial	Commercial	4,049		5,546		441		5		1,665		11,706		Commercial	4,132		4,957		326		4		1,725		11,144
Other	Other	4,106		48		—		—		34,238		38,392		Other	3,867		85		—		—		34,181		38,133
Revenue	Revenue	$	331,687	$	126,287	$	85,779	$	26,261	$	35,903	$	605,917	Revenue	$	351,011	$	113,670	$	129,493	$	27,073	$	35,906	$	657,153

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS-(Continued)

(Unaudited)

(Dollar amounts in thousands except per share and share amounts)

Revenue by customer group for the ~~six~~nine months ended ~~June~~September 30, 2022 was as follows:


		North America		Europe		Asia Pacific		South America		Corporate, Eliminations and Other		Consolidated			North America		Europe		Asia Pacific		South America		Corporate, Eliminations and Other		Consolidated
Passenger and Light Duty	Passenger and Light Duty	$	638,119	$	246,061	$	188,742	$	47,769	$	—	$	1,120,691	Passenger and Light Duty	$	981,131	$	354,689	$	317,909	$	74,838	$	—	$	1,728,567
Commercial	Commercial	7,723		11,469		788		11		3,322		23,313		Commercial	11,855		16,426		1,114		15		5,047		34,457
Other	Other	7,739		171		2		—		66,985		74,897		Other	11,606		256		2		—		101,166		113,030
Revenue	Revenue	$	653,581	$	257,701	$	189,532	$	47,780	$	70,307	$	1,218,901	Revenue	$	1,004,592	$	371,371	$	319,025	$	74,853	$	106,213	$	1,876,054

Revenue by customer group for the three months ended ~~June~~September 30, 2021 was as follows:


		North America		Europe		Asia Pacific		South America		Corporate, Eliminations and Other		Consolidated			North America		Europe		Asia Pacific		South America		Corporate, Eliminations and Other		Consolidated
Passenger and Light Duty	Passenger and Light Duty	$	240,111	$	126,972	$	102,950	$	14,145	$	—	$	484,178	Passenger and Light Duty	$	262,821	$	93,766	$	109,187	$	15,973	$	—	$	481,747
Commercial	Commercial	3,405		5,471		965		8		1,445		11,294		Commercial	3,341		4,773		337		8		1,333		9,792
Other	Other	4,009		178		—		—		33,526		37,713		Other	4,430		143		2		—		30,576		35,151
Revenue	Revenue	$	247,525	$	132,621	$	103,915	$	14,153	$	34,971	$	533,185	Revenue	$	270,592	$	98,682	$	109,526	$	15,981	$	31,909	$	526,690

Revenue by customer group for the ~~six~~nine months ended ~~June~~September 30, 2021 was as follows:


		North America		Europe		Asia Pacific		South America		Corporate, Eliminations and Other		Consolidated			North America		Europe		Asia Pacific		South America		Corporate, Eliminations and Other		Consolidated
Passenger and Light Duty	Passenger and Light Duty	$	571,724	$	286,753	$	215,991	$	29,624	$	—	$	1,104,092	Passenger and Light Duty	$	834,545	$	380,519	$	325,178	$	45,597	$	—	$	1,585,839
Commercial	Commercial	7,686		11,352		2,147		15		2,696		23,896		Commercial	11,027		16,125		2,484		23		4,029		33,688
Other	Other	7,151		292		2		—		66,719		74,164		Other	11,581		435		4		—		97,295		109,315
Revenue	Revenue	$	586,561	$	298,397	$	218,140	$	29,639	$	69,415	$	1,202,152	Revenue	$	857,153	$	397,079	$	327,666	$	45,620	$	101,324	$	1,728,842

The passenger and light duty customer group consists of sales to automotive OEMs and automotive suppliers, while the commercial customer group represents sales to OEMs of on- and off-highway commercial equipment and vehicles. The other customer group includes sales related to specialty and adjacent markets.

Substantially all of the Company’s revenues were generated from sealing, fuel and brake delivery and fluid transfer systems for use in passenger vehicles and light trucks manufactured by global OEMs.

A summary of the Company’s products is as follows:


Product Line						Description
Sealing Systems						Protect vehicle interiors from weather, dust and noise intrusion for improved driving experience; provide aesthetic and functional class-A exterior surface treatment
Fuel & Brake Delivery Systems						Sense, deliver and control fluids to fuel and brake systems
Fluid Transfer Systems						Sense, deliver and control fluids and vapors for optimal powertrain & HVAC operation

Revenue by product line for the three months ended ~~June~~September 30, 2022 was as follows:


		North America		Europe		Asia Pacific		South America		Corporate, Eliminations and Other		Consolidated			North America		Europe		Asia Pacific		South America		Corporate, Eliminations and Other		Consolidated
Sealing systems	Sealing systems	$	127,345	$	101,951	$	49,874	$	19,235	$	—	$	298,405	Sealing systems	$	133,347	$	91,078	$	85,309	$	21,654	$	—	$	331,388
Fuel and brake delivery systems	Fuel and brake delivery systems	107,614		21,638		20,481		4,814		—		154,547		Fuel and brake delivery systems	113,755		19,572		27,540		3,715		—		164,582
Fluid transfer systems	Fluid transfer systems	96,728		2,698		15,424		2,212		—		117,062		Fluid transfer systems	103,909		3,020		16,644		1,704		—		125,277
Other	Other	—		—		—		—		35,903		35,903		Other	—		—		—		—		35,906		35,906
Revenue	Revenue	$	331,687	$	126,287	$	85,779	$	26,261	$	35,903	$	605,917	Revenue	$	351,011	$	113,670	$	129,493	$	27,073	$	35,906	$	657,153

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS-(Continued)

(Unaudited)

(Dollar amounts in thousands except per share and share amounts)

Revenue by product line for the ~~six~~nine months ended ~~June~~September 30, 2022 was as follows:


		North America		Europe		Asia Pacific		South America		Corporate, Eliminations and Other		Consolidated			North America		Europe		Asia Pacific		South America		Corporate, Eliminations and Other		Consolidated
Sealing systems	Sealing systems	$	254,897	$	207,085	$	112,910	$	35,345	$	—	$	610,237	Sealing systems	$	388,244	$	298,163	$	198,219	$	56,999	$	—	$	941,625
Fuel and brake delivery systems	Fuel and brake delivery systems	210,335		44,676		44,228		8,375		—		307,614		Fuel and brake delivery systems	324,090		64,248		71,768		12,090		—		472,196
Fluid transfer systems	Fluid transfer systems	188,349		5,940		32,394		4,060		—		230,743		Fluid transfer systems	292,258		8,960		49,038		5,764		—		356,020
Other	Other	—		—		—		—		70,307		70,307		Other	—		—		—		—		106,213		106,213
Revenue	Revenue	$	653,581	$	257,701	$	189,532	$	47,780	$	70,307	$	1,218,901	Revenue	$	1,004,592	$	371,371	$	319,025	$	74,853	$	106,213	$	1,876,054

Revenue by product line for the three months ended ~~June~~September 30, 2021 was as follows:


		North America		Europe		Asia Pacific		South America		Corporate, Eliminations and Other		Consolidated			North America		Europe		Asia Pacific		South America		Corporate, Eliminations and Other		Consolidated
Sealing systems	Sealing systems	$	90,174	$	104,878	$	62,328	$	11,533	$	—	$	268,913	Sealing systems	$	102,636	$	75,824	$	69,872	$	12,114	$	—	$	260,446
Fuel and brake delivery systems	Fuel and brake delivery systems	82,389		23,991		25,166		2,148		—		133,694		Fuel and brake delivery systems	80,549		18,989		23,446		2,286		—		125,270
Fluid transfer systems	Fluid transfer systems	74,962		3,752		16,421		472		—		95,607		Fluid transfer systems	87,407		3,869		16,208		1,581		—		109,065
Other	Other	—		—		—		—		34,971		34,971		Other	—		—		—		—		31,909		31,909
Revenue	Revenue	$	247,525	$	132,621	$	103,915	$	14,153	$	34,971	$	533,185	Revenue	$	270,592	$	98,682	$	109,526	$	15,981	$	31,909	$	526,690

Revenue by product line for the ~~six~~nine months ended ~~June~~September 30, 2021 was as follows:


		North America		Europe		Asia Pacific		South America		Corporate, Eliminations and Other		Consolidated			North America		Europe		Asia Pacific		South America		Corporate, Eliminations and Other		Consolidated
Sealing systems	Sealing systems	$	211,349	$	234,239	$	132,001	$	22,807	$	—	$	600,396	Sealing systems	$	313,985	$	310,063	$	201,873	$	34,921	$	—	$	860,842
Fuel and brake delivery systems	Fuel and brake delivery systems	195,045		54,781		53,535		5,013		—		308,374		Fuel and brake delivery systems	275,594		73,770		76,981		7,299		—		433,644
Fluid transfer systems	Fluid transfer systems	180,167		9,377		32,604		1,819		—		223,967		Fluid transfer systems	267,574		13,246		48,812		3,400		—		333,032
Other	Other	—		—		—		—		69,415		69,415		Other	—		—		—		—		101,324		101,324
Revenue	Revenue	$	586,561	$	298,397	$	218,140	$	29,639	$	69,415	$	1,202,152	Revenue	$	857,153	$	397,079	$	327,666	$	45,620	$	101,324	$	1,728,842

Contract Estimates

The amount of revenue recognized is usually based on the purchase order price and adjusted for variable consideration, including pricing concessions. The Company accrues for pricing concessions by reducing revenue as products are shipped or delivered. The accruals are based on historical experience, anticipated performance and management’s best judgment. The Company also generally has ongoing adjustments to customer pricing arrangements based on the content and cost of its products. Such pricing accruals are adjusted as they are settled with customers. Customer returns, which are infrequent, are usually related to quality or shipment issues and are recorded as a reduction of revenue. The Company generally does not recognize significant return obligations due to their infrequent nature.

Contract Balances

The Company’s contract assets consist of unbilled amounts associated with variable pricing arrangements in the Asia Pacific region. Once pricing is finalized, contract assets are transferred to accounts receivable. As a result, the timing of revenue recognition and billings, as well as changes in foreign exchange rates, will impact contract assets on an ongoing basis. Contract assets were not materially impacted by any other factors during the ~~six~~nine months ended ~~June~~September 30, 2022.

The Company’s contract liabilities consist of advance payments received and due from customers. Net contract assets (liabilities) consisted of the following:


		June 30, 2022		December 31, 2021		Change			September 30, 2022		December 31, 2021		Change
Contract assets	Contract assets	$	3,454	$	—	$	3,454	Contract assets	$	3,690	$	—	$	3,690
Contract liabilities	Contract liabilities	(14)		(143)		129		Contract liabilities	(13)		(143)		130
Net contract assets (liabilities)	Net contract assets (liabilities)	$	3,440	$	(143)	$	3,583	Net contract assets (liabilities)	$	3,677	$	(143)	$	3,820

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS-(Continued)

(Unaudited)

(Dollar amounts in thousands except per share and share amounts)

Other

The Company, at times, enters into agreements that provide for lump sum payments to customers. These payment agreements are recorded as a reduction of revenue during the period the commitment is made. Amounts related to commitments of future payments to customers on the condensed consolidated balance sheets as of ~~June~~September 30, 2022 and December 31, 2021 were current liabilities of ~~$12,236~~$13,968 and $12,045, respectively, and long-term liabilities of ~~$6,485~~$5,733 and $7,214, respectively.

The Company provides assurance-type warranties to its customers. Such warranties provide customers with assurance that the related product will function as intended and complies with any agreed-upon specifications, and are recognized in costs of products sold.

4. Restructuring

On an ongoing basis, the Company evaluates its business and objectives to ensure that it is properly configured and sized based on changing market conditions. Accordingly, the Company has implemented several restructuring initiatives, including closure or consolidation of facilities throughout the world and the reorganization of its operating structure.

The Company’s restructuring charges consist of severance, retention and outplacement services, and severance-related postemployment benefits (collectively, “employee separation costs”), along with other related exit costs and asset impairments related to restructuring activities (collectively, “other exit costs”). Employee separation costs are recorded based on existing union and employee contracts, statutory requirements, completed negotiations and Company policy.

Restructuring expense by segment for the three and ~~six~~nine months ended ~~June~~September 30, 2022 and 2021 was as follows:


		Three Months Ended June 30,				Six Months Ended June 30,					Three Months Ended September 30,				Nine Months Ended September 30,
		2022		2021		2022		2021			2022		2021		2022		2021
North America	North America	$	353	$	843	$	(86)	$	3,206	North America	$	(66)	$	307	$	(152)	$	3,513
Europe	Europe	1,704		9,774		10,135		26,171		Europe	1,383		1,113		11,518		27,284
Asia Pacific	Asia Pacific	1,152		614		999		983		Asia Pacific	319		282		1,318		1,265
South America	South America	69		400		105		1,987		South America	147		(129)		252		1,858
Total Automotive	Total Automotive	3,278		11,631		11,153		32,347		Total Automotive	1,783		1,573		12,936		33,920
Corporate and other	Corporate and other	204		—		160		331		Corporate and other	(82)		—		78		331
Total	Total	$	3,482	$	11,631	$	11,313	$	32,678	Total	$	1,701	$	1,573	$	13,014	$	34,251

Restructuring activity for the ~~six~~nine months ended ~~June~~September 30, 2022 was as follows:


		Employee Separation Costs		Other Exit Costs		Total			Employee Separation Costs		Other Exit Costs		Total
Balance as of December 31, 2021	Balance as of December 31, 2021	$	20,957	$	5,627	$	26,584	Balance as of December 31, 2021	$	20,957	$	5,627	$	26,584
Expense	Expense	7,150		4,163		11,313		Expense	8,654		4,360		13,014
Cash payments	Cash payments	(11,039)		(1,409)		(12,448)		Cash payments	(15,361)		(2,455)		(17,816)

Foreign exchange translation and other	Foreign exchange translation and other	(1,298)		67		(1,231)		Foreign exchange translation and other	(2,074)		(517)		(2,591)
Balance as of June 30, 2022		$	15,770	$	8,448	$	24,218
Balance as of September 30, 2022								Balance as of September 30, 2022	$	12,176	$	7,015	$	19,191

Other exit costs for the ~~six~~nine months ended ~~June~~September 30, 2022 included an immaterial gain on sale of fixed assets related to a closed facility in the Asia Pacific region.

5. Inventories

Inventories consist of the following:


		June 30, 2022		December 31, 2021			September 30, 2022		December 31, 2021
Finished goods	Finished goods	$	50,188	$	43,186	Finished goods	$	52,462	$	43,186
Work in process	Work in process	44,301		37,045		Work in process	47,136		37,045
Raw materials and supplies	Raw materials and supplies	89,079		77,844		Raw materials and supplies	95,405		77,844
		$	183,568	$	158,075		$	195,003	$	158,075

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS-(Continued)

(Unaudited)

(Dollar amounts in thousands except per share and share amounts)

6. Leases

The Company primarily has operating and finance leases for certain manufacturing facilities, corporate offices and certain equipment. Operating leases are included in operating lease right-of-use assets, current operating lease liabilities and long-term operating lease liabilities on the Company’s condensed consolidated balance sheets. Finance leases are included in property, plant and equipment, net, debt payable within one year, and long-term debt on the Company’s condensed consolidated balance sheets.

The components of lease expense were as follows:


		Three Months Ended June 30,				Six Months Ended June 30,					Three Months Ended September 30,				Nine Months Ended September 30,
		2022		2021		2022		2021			2022		2021		2022		2021
Operating lease expense	Operating lease expense	$	7,238	$	8,087	$	14,624	$	15,431	Operating lease expense	$	6,954	$	7,827	$	21,578	$	23,258
Short-term lease expense	Short-term lease expense	1,234		1,965		2,145		3,605		Short-term lease expense	1,413		1,719		3,558		5,324
Variable lease expense	Variable lease expense	178		181		466		429		Variable lease expense	326		191		792		620
Finance lease expense:	Finance lease expense:									Finance lease expense:
Amortization of right-of-use assets	Amortization of right-of-use assets	485		521		977		1,067		Amortization of right-of-use assets	523		519		1,500		1,586
Interest on lease liabilities	Interest on lease liabilities	330		372		662		738		Interest on lease liabilities	318		356		980		1,094
Total lease expense	Total lease expense	$	9,465	$	11,126	$	18,874	$	21,270	Total lease expense	$	9,534	$	10,612	$	28,408	$	31,882

Other information related to leases was as follows:


		Six Months Ended June 30,							Nine Months Ended September 30,
		2022			2021				2022			2021
Supplemental Cash Flows Information	Supplemental Cash Flows Information							Supplemental Cash Flows Information
Cash paid for amounts included in the measurement of lease liabilities:	Cash paid for amounts included in the measurement of lease liabilities:							Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows for operating leases	Operating cash flows for operating leases	$	15,037		$	16,953		Operating cash flows for operating leases	$	21,944		$	25,641
Operating cash flows for finance leases	Operating cash flows for finance leases	668			734			Operating cash flows for finance leases	988			1,093
Financing cash flows for finance leases	Financing cash flows for finance leases	1,038			1,195			Financing cash flows for finance leases	1,488			1,677
Non-cash right-of-use assets obtained in exchange for lease obligations:	Non-cash right-of-use assets obtained in exchange for lease obligations:							Non-cash right-of-use assets obtained in exchange for lease obligations:
Operating leases	Operating leases	9,958			7,355			Operating leases	11,012			14,968
Finance leases	Finance leases	113			572			Finance leases	128			606

Weighted Average Remaining Lease Term (in years)	Weighted Average Remaining Lease Term (in years)							Weighted Average Remaining Lease Term (in years)
Operating leases	Operating leases	7.4			7.7			Operating leases	7.4			7.6
Finance leases	Finance leases	9.3			10.1			Finance leases	9.1			9.9

Weighted Average Discount Rate	Weighted Average Discount Rate							Weighted Average Discount Rate
Operating leases	Operating leases	6.0		%	5.5		%	Operating leases	6.1		%	5.7		%
Finance leases	Finance leases	5.9		%	5.8		%	Finance leases	5.9		%	5.8		%

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS-(Continued)

(Unaudited)

(Dollar amounts in thousands except per share and share amounts)

Future minimum lease payments under non-cancellable leases as of ~~June~~September 30, 2022 were as follows:


Year	Year	Operating Leases		Finance Leases		Year	Operating Leases		Finance Leases
Remainder of 2022	Remainder of 2022	$	13,593	$	1,542	Remainder of 2022	$	6,567	$	756
2023	2023	24,820		3,118		2023	24,425		3,059
2024	2024	18,858		3,348		2024	18,619		3,250
2025	2025	15,322		3,396		2025	15,136		3,274
2026	2026	11,214		3,137		2026	11,060		3,033
Thereafter	Thereafter	49,149		17,025		Thereafter	48,714		16,396
Total future minimum lease payments	Total future minimum lease payments	132,956		31,566		Total future minimum lease payments	124,521		29,768
Less imputed interest	Less imputed interest	(26,839)		(7,663)		Less imputed interest	(25,127)		(7,015)
Total	Total	$	106,117	$	23,903	Total	$	99,394	$	22,753

Amounts recognized on the condensed consolidated balance sheets as of ~~June~~September 30, 2022 and December 31, 2021 were as follows:


		June 30, 2022		December 31, 2021			September 30, 2022		December 31, 2021
Operating Leases	Operating Leases					Operating Leases

Operating lease right-of-use assets, net	Operating lease right-of-use assets, net	$	102,407	$	111,052	Operating lease right-of-use assets, net	$	95,803	$	111,052
Current operating lease liabilities	Current operating lease liabilities	21,177		22,552		Current operating lease liabilities	20,172		22,552

Long-term operating lease liabilities	Long-term operating lease liabilities	84,940		92,760		Long-term operating lease liabilities	79,222		92,760

Finance Leases	Finance Leases					Finance Leases
Property, plant and equipment, net						Property, plant and equipment, net	22,260		25,690
Debt payable within one year	Debt payable within one year	2,134		2,153		Debt payable within one year	2,067		2,153
Long-term debt	Long-term debt	21,769		23,590		Long-term debt	20,686		23,590

As of ~~June 30, 2022 and December 31, 2021, assets recorded under finance leases, net of accumulated depreciation were $23,513 and $25,690, respectively. As of June~~September 30, 2022, the Company had ~~one~~additional leases, primarily for real estate, ~~lease~~ that had not yet commenced with undiscounted lease payments of approximately ~~$423.~~$3,163.

7. Property, Plant and Equipment

Property, plant and equipment consists of the following:


		June 30, 2022		December 31, 2021			September 30, 2022		December 31, 2021
Land and improvements	Land and improvements	$	42,608	$	44,495	Land and improvements	$	40,889	$	44,495
Buildings and improvements	Buildings and improvements	263,685		285,240		Buildings and improvements	253,181		285,240
Machinery and equipment	Machinery and equipment	1,231,726		1,269,330		Machinery and equipment	1,198,754		1,269,330
Construction in progress	Construction in progress	71,884		80,868		Construction in progress	79,252		80,868
		1,609,903		1,679,933			1,572,076		1,679,933
Accumulated depreciation	Accumulated depreciation	(907,396)		(895,585)		Accumulated depreciation	(904,959)		(895,585)
Property, plant and equipment, net	Property, plant and equipment, net	$	702,507	$	784,348	Property, plant and equipment, net	$	667,117	$	784,348

During the three and ~~six~~nine months ended ~~June~~September 30, 2022, the Company recorded impairment charges of $3$379 and ~~$458,~~$837, respectively, primarily due to idle assets in ~~Europe.~~Europe and North America. The fair value was determined using salvage value. During the three and ~~six~~nine months ended ~~June~~September 30, 2021, the Company recorded impairment charges of ~~$841 each period~~$1,006 and $1,847, respectively, due to idle assets, primarily in a certain ~~Europe location.~~North American and European locations. The fair value was determined using salvage value.

The deconsolidation of a joint venture during the three months ended March 31, 2022 included the removal of property, plant and equipment with gross carrying value of $29,590 and accumulated depreciation of $11,625, which is reflected in the balance sheet as of ~~June~~September 30, 2022.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS-(Continued)

(Unaudited)

(Dollar amounts in thousands except per share and share amounts)

In the first quarter of 2022, the Company closed on a sale-leaseback transaction related to one of its European facilities. The sale-leaseback was effective and control transferred to the Company on April 1, 2022. During the ~~three~~nine months ended ~~June~~September 30, 2022, the Company recorded a gain on the sale transaction of $33,391. The transaction included the removal of property, plant and equipment with a gross carrying value of $16,890 and accumulated depreciation of $4,013, which is reflected in the balance sheet as of ~~June~~September 30, 2022.

8. Goodwill and Intangible Assets

Goodwill

Changes in the carrying amount of goodwill by reporting unit for the ~~six~~nine months ended ~~June~~September 30, 2022 were as follows:


		North America		Industrial Specialty Group		Total			North America		Industrial Specialty Group		Total
Balance as of December 31, 2021	Balance as of December 31, 2021	$	128,246	$	14,036	$	142,282	Balance as of December 31, 2021	$	128,246	$	14,036	$	142,282

Foreign exchange translation	Foreign exchange translation	(69)		—		(69)		Foreign exchange translation	(324)		—		(324)
Balance as of June 30, 2022		$	128,177	$	14,036	$	142,213
Balance as of September 30, 2022								Balance as of September 30, 2022	$	127,922	$	14,036	$	141,958

Goodwill is tested for impairment by reporting unit annually or more frequently if events or circumstances indicate that an impairment may exist. There were no indicators of potential impairment during the ~~six~~nine months ended ~~June~~September 30, 2022.

Intangible Assets

Intangible assets and accumulated amortization balances as of ~~June~~September 30, 2022 and December 31, 2021 were as follows:


		Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount			Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount
Customer relationships	Customer relationships	$	152,827	$	(127,439)	$	25,388	Customer relationships	$	152,210	$	(128,099)	$	24,111
Other	Other	38,699		(13,072)		25,627		Other	37,662		(13,360)		24,302
Balance as of June 30, 2022		$	191,526	$	(140,511)	$	51,015
Balance as of September 30, 2022								Balance as of September 30, 2022	$	189,872	$	(141,459)	$	48,413

Customer relationships	Customer relationships	$	154,767	$	(126,626)	$	28,141	Customer relationships	$	154,767	$	(126,626)	$	28,141
Other	Other	44,955		(12,721)		32,234		Other	44,955		(12,721)		32,234
Balance as of December 31, 2021	Balance as of December 31, 2021	$	199,722	$	(139,347)	$	60,375	Balance as of December 31, 2021	$	199,722	$	(139,347)	$	60,375

The deconsolidation of a joint venture ~~during~~in the ~~three months ended March 31,~~first quarter of 2022 included the removal of intangible assets (primarily land use rights) with net carrying value of $5,258, which is reflected in the table above as of ~~June~~September 30, 2022.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS-(Continued)

(Unaudited)

(Dollar amounts in thousands except per share and share amounts)

9. Debt

A summary of outstanding debt as of ~~June~~September 30, 2022 and December 31, 2021 is as follows:


		June 30, 2022		December 31, 2021			September 30, 2022		December 31, 2021
Senior Notes	Senior Notes	$	396,901	$	396,544	Senior Notes	$	397,080	$	396,544
Senior Secured Notes	Senior Secured Notes	242,981		241,683		Senior Secured Notes	243,700		241,683
Term Loan	Term Loan	319,999		321,212		Term Loan	319,393		321,212

Finance leases	Finance leases	23,903		25,743		Finance leases	22,753		25,743
Other borrowings	Other borrowings	46,459		51,533		Other borrowings	44,399		51,533
Total debt	Total debt	1,030,243		1,036,715		Total debt	1,027,325		1,036,715
Less current portion	Less current portion	(51,016)		(56,111)		Less current portion	(48,890)		(56,111)
Total long-term debt	Total long-term debt	$	979,227	$	980,604	Total long-term debt	$	978,435	$	980,604

5.625% Senior Notes due 2026

In November 2016, the Company issued $400,000 aggregate principal amount of its 5.625% Senior Notes due 2026 (the “Senior Notes”). The Senior Notes mature on November 15, 2026. Interest on the Senior Notes is payable semi-annually in arrears in cash on May 15 and November 15 of each year.

Debt issuance costs related to the Senior Notes are amortized into interest expense over the term of the Senior Notes. As of ~~June~~September 30, 2022 and December 31, 2021, the Company had ~~$3,099~~$2,920 and $3,456 of unamortized debt issuance costs, respectively, related to the Senior Notes, which are presented as direct deductions from the principal balance in the condensed consolidated balance sheets.

13.0% Senior Secured Notes due 2024

In May 2020, the Company issued $250,000 aggregate principal amount of its 13.0% Senior Secured Notes due 2024 (the “Senior Secured Notes”). The Senior Secured Notes mature on June 1, 2024. Interest on the Senior Secured Notes is payable semi-annually in arrears in cash on June 1 and December 1 of each year. The Company may redeem all or part of the Senior Secured Notes prior to maturity at the prices (inclusive of any applicable premium) set forth in the indenture.

The Company paid approximately $6,431 of debt issuance costs in connection with the transaction. Additionally, the Senior Secured Notes were issued at a discount of $5,000. As of ~~June~~September 30, 2022 and December 31, 2021, the Company had ~~$3,856~~$3,452 and $4,594 of unamortized debt issuance costs, respectively, and ~~$3,163~~$2,848 and $3,723 of unamortized original issue discount, respectively, related to the Senior Secured Notes, which are presented as direct deductions from the principal balance in the condensed consolidated balance sheets. Both the debt issuance costs and the original issue discount are amortized into interest expense over the term of the Senior Secured Notes.

Term Loan Facility

In November 2016, the Company entered into Amendment No. 1 to its senior term loan facility (“Term Loan Facility”), which provides for loans in an aggregate principal amount of $340,000. On May 2, 2017, the Company entered into Amendment No. 2 to the Term Loan Facility to modify the interest rate. Subsequently, on March 6, 2018, the Company entered into Amendment No. 3 to the Term Loan Facility to further modify the interest rate. In accordance with this amendment, borrowings under the Term Loan Facility bear interest, at the Company’s option, at either (1) with respect to Eurodollar rate loans, the greater of the applicable Eurodollar rate and 0.75% plus 2.0% per annum, or (2) with respect to base rate loans, the base rate, (which is the highest of the then current federal funds rate plus 0.5%, the prime rate most recently announced by the administrative agent under the term loan, and the one-month Eurodollar rate plus 1.0%) plus 1.0% per annum. The Term Loan Facility matures on November 2, 2023, unless earlier terminated. The Company has retained Goldman Sachs & Co. LLC as its financial advisor to analyze, evaluate and help arrange a refinancing of the Term Loan Facility and possibly certain other debt instruments. The Company’s ability to continue as a going concern is contingent upon its ability to refinance its Term Loan Facility. The Company continues its discussions with certain investors with respect to potential refinancing alternatives. While discussions are ongoing, the Company has not reached an agreement with respect to such a transaction for refinancing its capital structure and there can be no assurances that such an agreement will be reached in the future.

As of ~~June~~September 30, 2022 and December 31, 2021, the Company had ~~$791~~$642 and $1,087 of unamortized debt issuance costs, respectively, and ~~$509~~$414 and $701 of unamortized original issue discount, respectively, related to the Term Loan Facility, which are presented as direct deductions from the principal balance in the condensed consolidated balance sheets. Both the debt issuance costs and the original issue discount are amortized into interest expense over the term of the Term Loan Facility.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS-(Continued)

(Unaudited)

(Dollar amounts in thousands except per share and share amounts)

ABL Facility

In November 2016, the Company entered into a Third Amended and Restated Loan Agreement of its ABL Facility, which provided an aggregate revolving loan availability of up to $210,000, subject to borrowing base availability. In March 2020, the Company entered into the First Amendment of the Third Amended and Restated Loan Agreement (“the Amendment”). As a result of the Amendment, the senior asset-based revolving credit facility (“ABL Facility”) maturity was extended to March

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS-(Continued)~~

~~(Unaudited)~~

~~(Dollar amounts in thousands except per share and share amounts)~~

2025 and the aggregate revolving loan availability was reduced to $180,000. The aggregate revolving loan availability includes a $100,000 letter of credit sub-facility and a $25,000 swing line sub-facility. The ABL Facility also provides for an uncommitted $100,000 incremental loan facility, for a potential total ABL Facility of $280,000, if requested by the borrowers under the ABL Facility and the lenders agree to fund such increase. No consent of any lender is required to effect any such increase, except for those participating in the increase.

As of ~~June~~September 30, 2022, there were no loans outstanding under the ABL Facility. The Company’s borrowing base was $180,000. Net of the greater of 10% of the borrowing base or $15,000 that cannot be borrowed without triggering the fixed charge coverage ratio maintenance covenant and ~~$5,753~~$6,310 of outstanding letters of credit, the Company effectively had ~~$156,247~~$155,690 available for borrowing under its ABL facility.

Any borrowings under the ABL Facility will mature, and the commitments of the lenders under the ABL Facility will terminate, on the earlier of March 24, 2025 or the date 91 days prior to the maturity date of the Term Loan Facility (or another fixed asset facility replacing the Term Loan Facility).

As of ~~June~~September 30, 2022 and December 31, 2021, the Company had ~~$659~~$597 and $782, respectively, of unamortized debt issuance costs related to the ABL Facility, which are presented in other assets in the condensed consolidated balance sheets.

Debt Covenants

The Company was in compliance with all covenants of the Senior Notes, Senior Secured Notes, Term Loan Facility and ABL Facility as of ~~June~~September 30, 2022.

Other

Other borrowings as of ~~June~~September 30, 2022 and December 31, 2021 reflect borrowings under local bank lines classified in debt payable within one year on the condensed consolidated balance sheet.

10. Fair Value Measurements and Financial Instruments

Fair Value Measurements

Fair value is defined as an exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. As such, fair value is a market-based measurement that should be determined based upon assumptions that market participants would use in pricing an asset or liability. As a basis for considering such assumptions, a three-tier fair value hierarchy is utilized, which prioritizes the inputs used in measuring fair value as follows:


Level 1:			Observable inputs such as quoted prices in active markets;
Level 2:			Inputs, other than quoted prices in active markets, that are observable either directly or indirectly; and
Level 3:			Unobservable inputs in which there is little or no market data, which require the reporting entity to develop its own assumptions.

Items Measured at Fair Value on a Recurring Basis

Estimates of the fair value of foreign currency derivative instruments are determined using exchange traded prices and rates. The Company also considers the risk of non-performance in the estimation of fair value and includes an adjustment for non-performance risk in the measure of fair value of derivative instruments. In certain instances where market data is not available, the Company uses management judgment to develop assumptions that are used to determine fair value. Fair value measurements and the fair value hierarchy level for the Company’s assets and liabilities measured or disclosed at fair value on a recurring basis as of ~~June~~September 30, 2022 and December 31, 2021 were as follows:


		June 30, 2022		December 31, 2021		Input		September 30, 2022		December 31, 2021		Input
Forward foreign exchange contracts - other current assets	Forward foreign exchange contracts - other current assets	$	1,380	$	647	Level 2	Forward foreign exchange contracts - other current assets	$	3,624	$	647	Level 2
Forward foreign exchange contracts - accrued liabilities	Forward foreign exchange contracts - accrued liabilities	(923)		(1,535)		Level 2	Forward foreign exchange contracts - accrued liabilities	(487)		(1,535)		Level 2

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS-(Continued)

(Unaudited)

(Dollar amounts in thousands except per share and share amounts)

Items Measured at Fair Value on a Nonrecurring Basis

In addition to items that are measured at fair value on a recurring basis, the Company measures certain assets and liabilities at fair value on a nonrecurring basis, which are not included in the table above. As these nonrecurring fair value measurements are generally determined using unobservable inputs, these fair value measurements are classified within Level 3 of the fair value hierarchy. For further information on assets and liabilities measured at fair value on a nonrecurring basis see Note 2. “Deconsolidation and Divestiture” and Note 7. “Property, Plant and Equipment.”

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS-(Continued)~~

~~(Unaudited)~~

~~(Dollar amounts in thousands except per share and share amounts)~~

Items Not Carried at Fair Value

Fair values of the Company’s Senior Notes, Senior Secured Notes and Term Loan Facility were as follows:


		June 30, 2022		December 31, 2021			September 30, 2022		December 31, 2021
Aggregate fair value	Aggregate fair value	$	717,271	$	899,909	Aggregate fair value	$	719,807	$	899,909
Aggregate carrying value (1)	Aggregate carrying value (1)	971,300		973,000		Aggregate carrying value (1)	970,450		973,000

(1) Excludes unamortized debt issuance costs and unamortized original issue discount.

Fair values were based on quoted market prices and are classified within Level 1 of the fair value hierarchy.

Derivative Instruments and Hedging Activities

The Company is exposed to fluctuations in foreign currency exchange rates, interest rates and commodity prices. The Company enters into derivative instruments primarily to hedge portions of its forecasted foreign currency denominated cash flows and designates these derivative instruments as cash flow hedges in order to qualify for hedge accounting.

The Company formally documents its hedge relationships, including the identification of the hedging instruments and the hedged items, as well as its risk management objectives and strategies for undertaking the cash flow hedges. The Company also formally assesses whether a cash flow hedge is highly effective in offsetting changes in the cash flows of the hedged item. Derivatives are recorded at fair value in other current assets, other assets, accrued liabilities and other long-term liabilities. For a cash flow hedge, the change in fair value of the derivative is recorded in accumulated other comprehensive income (loss) (“AOCI”) in the condensed consolidated balance sheet, to the extent that the hedges are effective, and reclassified into earnings when the underlying hedged transaction is realized. The realized gains and losses are recorded on the same line as the hedged transaction in the condensed consolidated statements of operations.

The Company is exposed to credit risk in the event of nonperformance by its counterparties on its derivative financial instruments. The Company mitigates this credit risk exposure by entering into agreements directly with major financial institutions with high credit standards that are expected to fully satisfy their obligations under the contracts.

Cash Flow Hedges

Forward Foreign Exchange Contracts - The Company uses forward contracts to mitigate the potential volatility to earnings and cash flows arising from changes in currency exchange rates that impact the Company’s foreign currency transactions. The principal currencies hedged by the Company include various European currencies, the Canadian Dollar, and the Mexican Peso. As of ~~June~~September 30, 2022 and December 31, 2021, the notional amount of these contracts was ~~$59,626~~$155,054 and $136,103, respectively, and consisted of hedges of transactions up to December ~~2022.~~2023.

Pretax amounts related to the Company’s cash flow hedges that were recognized in other comprehensive income (loss) (“OCI”) were as follows:

Gain (Loss) Recognized in OCI
Three Months Ended June 30, Six Months Ended June 30,
2022 2021 2022 2021
Forward foreign exchange contracts $ (515) $ 1,190 $ 1,896 $ 642


	Gain (Loss) Recognized in OCI
	Three Months Ended September 30,				Nine Months Ended September 30,
	2022		2021		2022		2021
Forward foreign exchange contracts	$	3,168	$	(1,606)	$	5,064	$	(964)

Pretax amounts related to the Company’s cash flow hedges that were reclassified from AOCI and recognized in cost of products sold were as follows:

Gain (Loss) Reclassified from AOCI to Income
Three Months Ended June 30, Six Months Ended June 30,
2022 2021 2022 2021
Forward foreign exchange contracts $ 519 $ 349 $ 562 $ 537


	Gain (Loss) Reclassified from AOCI to Income
	Three Months Ended September 30,				Nine Months Ended September 30,
	2022		2021		2022		2021
Forward foreign exchange contracts	$	486	$	508	$	1,048	$	1,045

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS-(Continued)

(Unaudited)

(Dollar amounts in thousands except per share and share amounts)

11. Accounts Receivable Factoring

As a part of its working capital management, the Company sells certain receivables through a single third-party financial institution (the “Factor”) in a pan-European program. The amount sold varies each month based on the amount of underlying receivables and cash flow needs of the Company. These are permitted transactions under the Company’s credit agreements governing the ABL Facility and Term Loan Facility and the indentures governing the Senior Notes and Senior Secured Notes. The European factoring facility, which was renewed in March 2020, allows the Company to factor up to €120 million of its Euro-denominated accounts receivable, accelerating access to cash and reducing credit risk. The factoring facility expires in December 2023.

Costs incurred on the sale of receivables are recorded in other expense, net in the condensed consolidated statements of operations. The sale of receivables under this contract is considered an off-balance sheet arrangement to the Company and is accounted for as a true sale and is excluded from accounts receivable in the condensed consolidated balance sheet. Amounts outstanding under receivable transfer agreements entered into by various locations as of the period end were as follows:

June 30, 2022 December 31, 2021
Off-balance sheet arrangements $ 59,017 $ 52,743


	September 30, 2022		December 31, 2021
Off-balance sheet arrangements	$	49,155	$	52,743

Accounts receivable factored and related costs throughout the period were as follows:


		Off-Balance Sheet Arrangements								Off-Balance Sheet Arrangements
		Three Months Ended June 30,				Six Months Ended June 30,					Three Months Ended September 30,		Nine Months Ended September 30,
		2022		2021		2022		2021					2022		2021		2022		2021
Accounts receivable factored	Accounts receivable factored	$	90,332	$	100,046	$	172,882	$	217,317			Accounts receivable factored	$	89,263	$	68,897	$	262,145	$	286,214
Costs	Costs	114		150		239		304				Costs	156		117		395		421

As of ~~June~~September 30, 2022 and December 31, 2021, cash collections on behalf of the Factor that have yet to be remitted were ~~$5,282~~$5,216 and $673, respectively, and are reflected in other current assets as restricted cash in the condensed consolidated balance sheet.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS-(Continued)

(Unaudited)

(Dollar amounts in thousands except per share and share amounts)

12. Pension and Postretirement Benefits Other Than Pensions

The components of net periodic benefit (income) cost for the Company’s defined benefit plans and other postretirement benefit plans were as follows:


		Pension Benefits									Pension Benefits
		Three Months Ended June 30,									Three Months Ended September 30,
		2022				2021					2022				2021
		U.S.		Non-U.S.		U.S.		Non-U.S.			U.S.		Non-U.S.		U.S.		Non-U.S.
Service cost	Service cost	$	193	$	692	$	223	$	913	Service cost	$	193	$	658	$	223	$	878
Interest cost	Interest cost	1,766		716		1,629		660		Interest cost	1,766		690		1,629		659
Expected return on plan assets	Expected return on plan assets	(2,323)		(252)		(3,564)		(344)		Expected return on plan assets	(2,323)		(247)		(3,564)		(335)
Amortization of prior service cost and actuarial loss	Amortization of prior service cost and actuarial loss	222		396		418		933		Amortization of prior service cost and actuarial loss	222		376		418		509
Other	Other	—		—		—		125		Other	—		—		—		—
Net periodic benefit (income) cost	Net periodic benefit (income) cost	$	(142)	$	1,552	$	(1,294)	$	2,287	Net periodic benefit (income) cost	$	(142)	$	1,477	$	(1,294)	$	1,711
		Pension Benefits									Pension Benefits
		Six Months Ended June 30,									Nine Months Ended September 30,
		2022				2021					2022				2021
		U.S.		Non-U.S.		U.S.		Non-U.S.			U.S.		Non-U.S.		U.S.		Non-U.S.
Service cost	Service cost	$	386	$	1,413	$	446	$	1,827	Service cost	$	579	$	2,071	$	669	$	2,705
Interest cost	Interest cost	3,532		1,449		3,258		1,308		Interest cost	5,298		2,139		4,887		1,967
Expected return on plan assets	Expected return on plan assets	(4,646)		(506)		(7,128)		(678)		Expected return on plan assets	(6,969)		(753)		(10,692)		(1,013)
Amortization of prior service cost and actuarial loss	Amortization of prior service cost and actuarial loss	444		811		836		1,865		Amortization of prior service cost and actuarial loss	666		1,187		1,254		2,374
Other	Other	—		—		—		125		Other	—		—		—		125

Net periodic benefit (income) cost	Net periodic benefit (income) cost	$	(284)	$	3,167	$	(2,588)	$	4,447	Net periodic benefit (income) cost	$	(426)	$	4,644	$	(3,882)	$	6,158


		Other Postretirement Benefits									Other Postretirement Benefits
		Three Months Ended June 30,									Three Months Ended September 30,
		2022				2021					2022				2021
		U.S.		Non-U.S.		U.S.		Non-U.S.			U.S.		Non-U.S.		U.S.		Non-U.S.
Service cost	Service cost	$	22	$	57	$	26	$	93	Service cost	$	22	$	56	$	26	$	91
Interest cost	Interest cost	140		167		133		183		Interest cost	140		163		133		178
Amortization of prior service credit and actuarial (gain) loss	Amortization of prior service credit and actuarial (gain) loss	(394)		42		(349)		196		Amortization of prior service credit and actuarial (gain) loss	(394)		41		(349)		191

Net periodic benefit (income) cost	Net periodic benefit (income) cost	$	(232)	$	266	$	(190)	$	472	Net periodic benefit (income) cost	$	(232)	$	260	$	(190)	$	460
		Other Postretirement Benefits									Other Postretirement Benefits
		Six Months Ended June 30,									Nine Months Ended September 30,
		2022				2021					2022				2021
		U.S.		Non-U.S.		U.S.		Non-U.S.			U.S.		Non-U.S.		U.S.		Non-U.S.
Service cost	Service cost	$	44	$	115	$	52	$	183	Service cost	$	66	$	171	$	78	$	274
Interest cost	Interest cost	280		335		266		360		Interest cost	420		498		399		538
Amortization of prior service credit and actuarial (gain) loss	Amortization of prior service credit and actuarial (gain) loss	(788)		84		(698)		386		Amortization of prior service credit and actuarial (gain) loss	(1,182)		125		(1,047)		577

Net periodic benefit (income) cost	Net periodic benefit (income) cost	$	(464)	$	534	$	(380)	$	929	Net periodic benefit (income) cost	$	(696)	$	794	$	(570)	$	1,389

The service cost component of net periodic benefit (income) cost is included in cost of products sold and selling, administrative and engineering expenses in the condensed consolidated statements of operations. All other components of net periodic benefit (income) cost are included in other income (expense), net in the condensed consolidated statements of operations for all periods presented.

On October 11, 2022, the Company’s Board of Directors approved a resolution to merge certain of the Company’s U.S. defined benefit pension plans, and terminate the resulting merged plan (“U.S. Pension Plan”) effective December 31, 2022. The

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS-(Continued)

(Unaudited)

(Dollar amounts in thousands except per share and share amounts)

termination of the U.S. Pension Plan is expected to take twelve to eighteen months to complete. As part of the termination process, the Company expects to settle benefit obligations under the U.S. Pension Plan through a combination of lump sum payments to eligible plan participants and the purchase of a group annuity contract, under which future benefit obligations and administration will be transferred to a third-party insurance company. Such settlements will be funded primarily from plan assets. Ultimate settlement of benefit obligations is dependent upon the participants’ elections. As of September 30, 2022 and December 31, 2021, the U.S. Pension Plan was overfunded under U.S. generally accepted accounting principles by $31,307 and $29,804, respectively.

13. Other Income (Expense), Net

The components of other income (expense), net were as follows:


		Three Months Ended June 30,				Six Months Ended June 30,					Three Months Ended September 30,				Nine Months Ended September 30,
		2022		2021		2022		2021			2022		2021		2022		2021
Deconsolidation of joint venture (1)	Deconsolidation of joint venture (1)	$	—	$	—	$	(2,257)	$	—	Deconsolidation of joint venture (1)	$	—	$	—	$	(2,257)	$	—
Foreign currency (losses) gains		(1,136)		1,114		344		(4,150)
Components of net periodic (cost) benefit income other than service cost		(480)		(20)		(995)		100
Foreign currency gains (losses)										Foreign currency gains (losses)	649		(1,396)		993		(5,546)
Components of net periodic benefit (cost) income other than service cost										Components of net periodic benefit (cost) income other than service cost	(434)		531		(1,429)		631
Factoring costs	Factoring costs	(114)		(150)		(239)		(304)		Factoring costs	(156)		(117)		(395)		(421)
Miscellaneous income	Miscellaneous income	221		418		427		627		Miscellaneous income	87		488		514		1,115
Other (expense) income, net		$	(1,509)	$	1,362	$	(2,720)	$	(3,727)
Other income (expense), net										Other income (expense), net	$	146	$	(494)	$	(2,574)	$	(4,221)

(1)Loss attributable to deconsolidation of a joint venture in the Asia Pacific region, which required adjustment to fair value.

14. Income Taxes

The Company determines its effective tax rate each quarter based upon its estimated annual effective tax rate. The Company records the tax impact of certain unusual or infrequently occurring items, including changes in judgment about valuation allowances and effects of changes in tax laws or rates, in the interim period in which they occur. In addition, jurisdictions with a projected loss for the year where no tax benefit can be recognized are excluded from the estimated annual effective tax rate.

Income tax (benefit) expense, ~~(benefit),~~ loss before income taxes and the corresponding effective tax rate for the three and ~~six~~nine months ended ~~June~~September 30, 2022 and 2021 were as follows:


		Three Months Ended June 30,						Six Months Ended June 30,							Three Months Ended September 30,						Nine Months Ended September 30,
		2022			2021			2022			2021				2022			2021			2022			2021
Income tax expense (benefit)		$	2,005		$	(17,459)		$	2,657		$	(16,523)
Income tax (benefit) expense														Income tax (benefit) expense	$	(833)		$	32,121		$	1,824		$	15,598
Loss before income taxes	Loss before income taxes	(32,146)			(81,988)			(93,284)			(115,765)			Loss before income taxes	(34,053)			(92,743)			(127,337)			(208,508)
Effective tax rate	Effective tax rate	(6)		%	21		%	(3)		%	14		%	Effective tax rate	2		%	(35)		%	(1)		%	(7)		%

The effective tax rate for the three and ~~six~~nine months ended ~~June~~September 30, 2022 varied from the effective tax rate for the three and ~~six~~nine months ended ~~June~~September 30, 2021 primarily due to the initial recognition of valuation allowances in the U.S., resulting in tax expense of $31,740 and $13,278 recorded in the three and nine months ended September 30, 2021, respectively, the geographic mix of pre-tax losses, and the inability to record a benefit for pre-tax losses in the U.S. and certain foreign jurisdictions due to valuation ~~allowances,~~allowances. Additionally the three and nine months ended September 30, 2022 were impacted by discrete tax impacts of the gain on ~~sale~~sale-leaseback transaction in Europe, ~~and other~~ tax reserve changes, ~~during the three~~ and ~~six months ended June 30, 2022.~~other permanent items.

The income tax rate for the three and ~~six~~nine months ended ~~June~~September 30, 2022 and 2021 varied from the U.S. statutory rate primarily due to the inability to record a tax benefit for pre-tax losses in the U.S. and certain foreign jurisdictions, tax credits, the impact of income taxes on foreign earnings taxed at rates varying from the U.S. statutory rate, and other permanent items. Additionally, the income tax rate for the three and nine months ended September 30, 2021 varied from the U.S. statutory rate as a result of the initial recognition of valuation allowances in the U.S.

During the ~~three~~nine months ended ~~June~~September 30, 2022, the Company received ~~$51,396~~$54,273 in cash payments from the United States Internal Revenue Service for tax refunds related to net operating loss carrybacks.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS-(Continued)

(Unaudited)

(Dollar amounts in thousands except per share and share amounts)

The Company’s current and future provision for income taxes is impacted by changes in valuation allowances in the U.S. and certain foreign jurisdictions. The Company’s future provision for income taxes will include no tax benefit with respect to losses incurred and, except for certain jurisdictions, no tax expense with respect to income generated in these countries until the respective valuation allowances are eliminated. Accordingly, income taxes are impacted by changes in valuation allowances and the mix of earnings among jurisdictions. The Company evaluates the realizability of its deferred tax assets on a quarterly basis. In completing this evaluation, the Company considers all available evidence in order to determine, based on the weight of the evidence, if a valuation allowance for its deferred tax assets is necessary. Such evidence includes historical results, future reversals of existing taxable temporary differences and expectations for future taxable income (exclusive of the reversal of temporary differences and carryforwards), as well as the implementation of feasible and prudent tax planning strategies. If, based on the weight of the evidence, it is more likely than not that all or a portion of the Company’s deferred tax assets will not be realized, a valuation allowance is recorded. If operating results improve or decline on a continual basis in a particular jurisdiction, the Company’s decision regarding the need for a valuation allowance could change, resulting in either the initial recognition or reversal of a valuation allowance in that jurisdiction, which could have a significant impact on income tax

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS-(Continued)~~

~~(Unaudited)~~

~~(Dollar amounts in thousands except per share and share amounts)~~

expense in the period recognized and subsequent periods. In determining the provision for income taxes for financial statement purposes, the Company makes certain estimates and judgments, which affect its evaluation of the carrying value of its deferred tax assets, as well as its calculation of certain tax liabilities.

Inflation Reduction Action of 2022

On August 16, 2022, the U.S. enacted the Inflation Reduction Action of 2022, which, among other things, implements a 15% minimum tax on financial statement income of certain large corporations, a 1% excise tax on net stock repurchases and several tax incentives to promote clean energy. Based on its current analysis of the provisions, the Company does not believe this legislation will have a material impact on its consolidated financial statements, but the Company is continuing to evaluate the implications.

15. Net Loss Per Share Attributable to Cooper-Standard Holdings Inc.

Basic net loss per share attributable to Cooper-Standard Holdings Inc. was computed by dividing net loss attributable to Cooper-Standard Holdings Inc. by the weighted average number of shares of common stock outstanding during the period. Diluted net loss per share attributable to Cooper-Standard Holdings Inc. was computed using the treasury stock method by dividing diluted net loss available to Cooper-Standard Holdings Inc. by the weighted average number of shares of common stock outstanding, including the dilutive effect of common stock equivalents, using the average share price during the period.

Information used to compute basic and diluted net loss per share attributable to Cooper-Standard Holdings Inc. was as follows:


		Three Months Ended June 30,				Six Months Ended June 30,					Three Months Ended September 30,				Nine Months Ended September 30,
		2022		2021		2022		2021			2022		2021		2022		2021

Net loss available to Cooper-Standard Holdings Inc. common stockholders	Net loss available to Cooper-Standard Holdings Inc. common stockholders	$	(33,247)	$	(63,611)	$	(94,607)	$	(97,475)	Net loss available to Cooper-Standard Holdings Inc. common stockholders	$	(32,686)	$	(123,173)	$	(127,293)	$	(220,648)

Basic weighted average shares of common stock outstanding	Basic weighted average shares of common stock outstanding	17,189,128		17,031,113		17,162,915		16,991,372		Basic weighted average shares of common stock outstanding	17,218,165		17,097,766		17,181,534		17,027,226
Dilutive effect of common stock equivalents	Dilutive effect of common stock equivalents	—		—		—		—		Dilutive effect of common stock equivalents	—		—		—		—
Diluted weighted average shares of common stock outstanding	Diluted weighted average shares of common stock outstanding	17,189,128		17,031,113		17,162,915		16,991,372		Diluted weighted average shares of common stock outstanding	17,218,165		17,097,766		17,181,534		17,027,226

Basic net loss per share attributable to Cooper-Standard Holdings Inc.	Basic net loss per share attributable to Cooper-Standard Holdings Inc.	$	(1.93)	$	(3.73)	$	(5.51)	$	(5.74)	Basic net loss per share attributable to Cooper-Standard Holdings Inc.	$	(1.90)	$	(7.20)	$	(7.41)	$	(12.96)

Diluted net loss per share attributable to Cooper-Standard Holdings Inc.	Diluted net loss per share attributable to Cooper-Standard Holdings Inc.	$	(1.93)	$	(3.73)	$	(5.51)	$	(5.74)	Diluted net loss per share attributable to Cooper-Standard Holdings Inc.	$	(1.90)	$	(7.20)	$	(7.41)	$	(12.96)

Securities excluded from the calculation of diluted loss per share were approximately ~~26,000~~52,000 and ~~164,000~~169,000 for the three months ended ~~June~~September 30, 2022 and 2021, respectively, and ~~67,000~~52,000 and ~~172,000~~159,000 for the ~~six~~nine months ended ~~June~~September 30, 2022 and 2021, respectively, because the inclusion of such securities in the calculation would have been anti-dilutive.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS-(Continued)

(Unaudited)

(Dollar amounts in thousands except per share and share amounts)

16. Accumulated Other Comprehensive Loss

Changes in accumulated other comprehensive loss by component, net of related tax, were as follows:


		Three Months Ended June 30,						Six Months Ended June 30,							Three Months Ended September 30,						Nine Months Ended September 30,
		2022			2021			2022			2021				2022			2021			2022			2021
Foreign currency translation adjustment	Foreign currency translation adjustment													Foreign currency translation adjustment
Balance at beginning of period	Balance at beginning of period	$	(130,375)		$	(142,899)		$	(138,751)		$	(136,579)		Balance at beginning of period	$	(147,736)		$	(134,377)		$	(138,751)		$	(136,579)
Other comprehensive (loss) income before reclassifications		(17,361)		(1)	8,522		(1)	(8,691)		(1)	2,202		(1)
Other comprehensive loss before reclassifications														Other comprehensive loss before reclassifications	(19,309)		(1)	(6,134)		(1)	(28,000)		(1)	(3,932)		(1)
Amounts reclassified from accumulated other comprehensive loss	Amounts reclassified from accumulated other comprehensive loss	—			—			(294)			—			Amounts reclassified from accumulated other comprehensive loss	—			144			(294)			144
Balance at end of period	Balance at end of period	$	(147,736)		$	(134,377)		$	(147,736)		$	(134,377)		Balance at end of period	$	(167,045)		$	(140,367)		$	(167,045)		$	(140,367)
Benefit plan liabilities	Benefit plan liabilities													Benefit plan liabilities
Balance at beginning of period	Balance at beginning of period	$	(64,319)		$	(103,340)		$	(65,303)		$	(106,079)		Balance at beginning of period	$	(62,256)		$	(102,729)		$	(65,303)		$	(106,079)
Other comprehensive income (loss) before reclassifications		1,831		(2)	(602)		(2)	2,538		(2)	1,041		(2)
Other comprehensive income (loss) before reclassifications (net of tax expense (benefit) of $70, $27, $(174), and $(250), respectively)														Other comprehensive income (loss) before reclassifications (net of tax expense (benefit) of $70, $27, $(174), and $(250), respectively)	2,227			4,119			4,765			5,160
Amounts reclassified from accumulated other comprehensive loss	Amounts reclassified from accumulated other comprehensive loss	232		(3)	1,213		(4)	509		(5)	2,309		(6)	Amounts reclassified from accumulated other comprehensive loss	171		(2)	859		(3)	680		(4)	3,168		(5)
Balance at end of period	Balance at end of period	$	(62,256)		$	(102,729)		$	(62,256)		$	(102,729)		Balance at end of period	$	(59,858)		$	(97,751)		$	(59,858)		$	(97,751)
Fair value change of derivatives	Fair value change of derivatives													Fair value change of derivatives
Balance at beginning of period	Balance at beginning of period	$	1,301		$	191		$	(1,130)		$	762		Balance at beginning of period	$	278		$	942		$	(1,130)		$	762
Other comprehensive (loss) income before reclassifications		(657)		(7)	1,008		(7)	1,815		(7)	576		(7)
Amounts reclassified from accumulated other comprehensive loss		(366)		(8)	(257)		(8)	(407)		(8)	(396)		(8)
Other comprehensive income (loss) before reclassifications (net of tax expense of $419, $154, $500, and $220, respectively)														Other comprehensive income (loss) before reclassifications (net of tax expense of $419, $154, $500, and $220, respectively)	2,749			(1,760)			4,564			(1,184)
Amounts reclassified from accumulated other comprehensive loss (net of tax expense of $159, $136, $314, and $277, respectively)														Amounts reclassified from accumulated other comprehensive loss (net of tax expense of $159, $136, $314, and $277, respectively)	(327)			(372)			(734)			(768)
Balance at end of period	Balance at end of period	$	278		$	942		$	278		$	942		Balance at end of period	$	2,700		$	(1,190)		$	2,700		$	(1,190)
Accumulated other comprehensive loss, ending balance	Accumulated other comprehensive loss, ending balance	$	(209,714)		$	(236,164)		$	(209,714)		$	(236,164)		Accumulated other comprehensive loss, ending balance	$	(224,203)		$	(239,308)		$	(224,203)		$	(239,308)

(1)Includes other comprehensive (loss) income related to intra-entity foreign currency balances that are of a long-term investment nature of ~~$(12,877)~~$(24,098) and ~~$7,668~~$(9,265) for the three months ended ~~June~~September 30, 2022 and 2021, respectively, and ~~$(4,235)~~$(28,333) and ~~$3,279~~$(5,986) for the ~~six~~nine months ended ~~June~~September 30, 2022 and 2021, respectively.

(2)~~Net~~Includes the effect of the amortization of actuarial losses of $138, and amortization of prior service cost of $37, net of tax ~~benefit~~ of ~~$(63) and $(32) for the three months ended June 30, 2022 and 2021, respectively, and $(244) and $(277) for the six months ended June 30, 2022 and 2021, respectively.~~$4.

(3)Includes the effect of the amortization of actuarial losses of ~~$192, and~~$664, amortization of prior service cost of ~~$44,~~$41, and impact of curtailment of $193, net of tax of ~~$4.~~$39.

(4)Includes the effect of the amortization of actuarial losses of ~~$1,128,~~$562, and amortization of prior service cost of ~~$63, and impact of curtailment of $117,~~$130, net of tax of ~~$95.~~$12.

(5)Includes the effect of the amortization of actuarial losses of ~~$424, and~~$2,916, amortization of prior service cost of ~~$93, net of tax of $8.~~

~~(6)Includes the effect of the amortization of actuarial losses of $2,252, amortization of prior service cost of $128,~~$169, and impact of curtailment of ~~$117,~~$310, net of tax of ~~$188.~~$227.

~~(7)Net of tax expense of $142 and $182 for the three months ended June 30, 2022 and 2021, respectively, and $81 and $66 for the six months ended June 30, 2022 and 2021, respectively.~~

~~(8)Net of tax expense of $153 and $92 for the three months ended June 30, 2022 and 2021, respectively, and $155 and $141 for the six months ended June 30, 2022 and 2021, respectively.~~

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS-(Continued)

(Unaudited)

(Dollar amounts in thousands except per share and share amounts)

17. Common Stock

Share Repurchase Program

In June 2018, the Company’s Board of Directors approved a common stock repurchase program (the “2018 Program”) authorizing the Company to repurchase, in the aggregate, up to $150,000 of its outstanding common stock. Under the 2018 Program, repurchases may be made on the open market, through private transactions, accelerated share repurchases, round lot or block transactions on the New York Stock Exchange or otherwise, as determined by management and in accordance with prevailing market conditions and federal securities laws and regulations. The Company expects to fund any future repurchases from cash on hand and future cash flows from operations. The Company is not obligated to acquire a particular amount of securities, and the 2018 Program may be discontinued at any time at the Company’s discretion. The 2018 Program became effective in November 2018. As of ~~June~~September 30, 2022, the Company had approximately $98,720 of repurchase authorization remaining under the 2018 Program. The Company did not make any repurchases under the 2018 Program during the ~~six~~nine months ended ~~June~~September 30, 2022 or 2021.

18. Share-Based Compensation

The Company’s long-term incentive plans allow for the grant of various types of share-based awards to key employees and directors of the Company and its affiliates. The Company generally awards grants on an annual basis.

In February 2022, the Company granted Restricted Stock Units (“RSUs”) and Performance Units (“PUs”). The number of PUs that will vest depends on the Company’s achievement of target performance goals related to the Company’s return on invested capital (“ROIC”) and total shareholder return, which may range from 0% to 200% of the target award amount. The PUs tied to total shareholder return cliff vest at the end of a ~~three year~~three-year performance period. The PUs tied to ROIC cliff vest one year after the end of their individual performance periods. The RSUs vest ratably over three years.

Share-based compensation expense was as follows:


		Three Months Ended June 30,				Six Months Ended June 30,					Three Months Ended September 30,				Nine Months Ended September 30,
		2022		2021		2022		2021			2022		2021		2022		2021
PUs	PUs	$	242	$	(645)	$	312	$	(306)	PUs	$	203	$	357	$	515	$	51
RSUs	RSUs	497		885		621		2,131		RSUs	476		873		1,097		3,004
Stock options	Stock options	302		584		692		1,177		Stock options	289		549		981		1,726
Total	Total	$	1,041	$	824	$	1,625	$	3,002	Total	$	968	$	1,779	$	2,593	$	4,781

19. Commitments and Contingencies

The Company is periodically involved in claims, litigation and various legal matters that arise in the ordinary course of business. The Company accrues for litigation exposure when it is probable that future costs will be incurred and such costs can be reasonably estimated. Any resulting adjustments, which could be material, are recorded in the period the adjustments are identified. As of ~~June~~September 30, 2022, the Company does not believe that there is a reasonable possibility that any material loss exceeding the amounts already recognized for claims, litigation and various legal matters, if any, has been incurred. However, the ultimate resolutions of these proceedings and matters are inherently unpredictable. As such, the Company’s financial condition, results of operations or cash flows could be adversely affected in any particular period by the unfavorable resolution of one or more of these proceedings or matters.

In addition, the Company conducts and monitors environmental investigations and remedial actions at certain locations. As of ~~June~~September 30, 2022 and December 31, 2021, the Company had approximately ~~$12,490~~$10,780 and $9,965, respectively, reserved in accrued liabilities and other liabilities on the condensed consolidated balance sheets on an undiscounted basis. While the Company’s costs to defend and settle known claims arising under environmental laws have not been material in the past and are not currently estimated to have a material adverse effect on the Company’s financial condition, such costs may be material to the Company’s financial statements in the future.

20. Segment Reporting

The Company’s automotive business is organized in the following reportable segments: North America, Europe, Asia Pacific and South America. All other business activities are reported in Corporate, eliminations and other. The Company’s principal products within each of the reportable segments are sealing, fuel and brake delivery, and fluid transfer systems.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS-(Continued)

(Unaudited)

(Dollar amounts in thousands except per share and share amounts)

The Company uses Segment adjusted EBITDA as the measure of earnings to assess the performance of each segment and determine the resources to be allocated to the segments. The results of each segment include certain allocations for general, administrative and other shared costs. Segment adjusted EBITDA may not be comparable to similarly titled measures reported by other companies.

Certain financial information on the Company’s reportable segments was as follows:


		Three Months Ended June 30,													Three Months Ended September 30,
		2022						2021							2022						2021
		External Sales		Intersegment Sales		Adjusted EBITDA		External Sales		Intersegment Sales		Adjusted EBITDA			External Sales		Intersegment Sales		Adjusted EBITDA		External Sales		Intersegment Sales		Adjusted EBITDA
North America	North America	$	331,687	$	2,747	$	15,441	$	247,525	$	2,140	$	756	North America	$	351,011	$	3,223	$	19,401	$	270,592	$	2,711	$	8,817
Europe	Europe	126,287		1,541		(15,316)		132,621		2,836		(14,391)		Europe	113,670		2,142		(10,905)		98,682		1,903		(25,112)
Asia Pacific	Asia Pacific	85,779		908		(7,799)		103,915		858		(2,302)		Asia Pacific	129,493		1,065		7,523		109,526		306		(14,274)
South America	South America	26,261		—		(1,298)		14,153		3		(726)		South America	27,073		11		766		15,981		—		(3,422)
Total Automotive	Total Automotive	570,014		5,196		(8,972)		498,214		5,837		(16,663)		Total Automotive	621,247		6,441		16,785		494,781		4,920		(33,991)
Corporate, eliminations and other	Corporate, eliminations and other	35,903		(5,196)		(1,402)		34,971		(5,837)		1,937		Corporate, eliminations and other	35,906		(6,441)		3,720		31,909		(4,920)		132
Consolidated	Consolidated	$	605,917	$	—	$	(10,374)	$	533,185	$	—	$	(14,726)	Consolidated	$	657,153	$	—	$	20,505	$	526,690	$	—	$	(33,859)

		Six Months Ended June 30,													Nine Months Ended September 30,
		2022						2021							2022						2021
		External Sales		Intersegment Sales		Adjusted EBITDA		External Sales		Intersegment Sales		Adjusted EBITDA			External Sales		Intersegment Sales		Adjusted EBITDA		External Sales		Intersegment Sales		Adjusted EBITDA
North America	North America	$	653,581	$	6,277	$	32,937	$	586,561	$	4,773	$	41,989	North America	$	1,004,592	$	9,500	$	52,338	$	857,153	$	7,484	$	50,806
Europe	Europe	257,701		3,910		(29,973)		298,397		5,815		(15,880)		Europe	371,371		6,052		(40,878)		397,079		7,718		(40,992)
Asia Pacific	Asia Pacific	189,532		1,533		(8,541)		218,140		1,488		1,250		Asia Pacific	319,025		2,598		(1,018)		327,666		1,794		(13,024)
South America	South America	47,780		5		(1,707)		29,639		15		(3,334)		South America	74,853		16		(941)		45,620		15		(6,756)
Total Automotive	Total Automotive	1,148,594		11,725		(7,284)		1,132,737		12,091		24,025		Total Automotive	1,769,841		18,166		9,501		1,627,518		17,011		(9,966)
Corporate, eliminations and other	Corporate, eliminations and other	70,307		(11,725)		(2,945)		69,415		(12,091)		(211)		Corporate, eliminations and other	106,213		(18,166)		775		101,324		(17,011)		(79)
Consolidated	Consolidated	$	1,218,901	$	—	$	(10,229)	$	1,202,152	$	—	$	23,814	Consolidated	$	1,876,054	$	—	$	10,276	$	1,728,842	$	—	$	(10,045)


		Three Months Ended June 30,				Six Months Ended June 30,					Three Months Ended September 30,				Nine Months Ended September 30,
		2022		2021		2022		2021			2022		2021		2022		2021
Adjusted EBITDA	Adjusted EBITDA	$	(10,374)	$	(14,726)	$	(10,229)	$	23,814	Adjusted EBITDA	$	20,505	$	(33,859)	$	10,276	$	(10,045)
Restructuring charges	Restructuring charges	(3,482)		(11,631)		(11,313)		(32,678)		Restructuring charges	(1,701)		(1,573)		(13,014)		(34,251)
Deconsolidation of joint venture	Deconsolidation of joint venture	—		—		(2,257)		—		Deconsolidation of joint venture	—		—		(2,257)		—
Impairment charges	Impairment charges	(3)		(841)		(458)		(841)		Impairment charges	(379)		(1,006)		(837)		(1,847)
(Loss) gain on sale of business, net	(Loss) gain on sale of business, net	—		(195)		—		696		(Loss) gain on sale of business, net	—		—		—		696
Gain on sale of fixed assets, net	Gain on sale of fixed assets, net	33,391		—		33,391		—		Gain on sale of fixed assets, net	—		—		33,391		—
Lease termination costs	Lease termination costs	—		(108)		—		(108)		Lease termination costs	—		(322)		—		(430)
Indirect tax adjustments		(908)		—		(908)		—
Indirect tax and customs adjustments										Indirect tax and customs adjustments	(569)		—		(1,477)		—

EBITDA	EBITDA	$	18,624	$	(27,501)	$	8,226	$	(9,117)	EBITDA	$	17,856	$	(36,760)	$	26,082	$	(45,877)
Income tax expense	Income tax expense	(2,005)		17,459		(2,657)		16,523		Income tax expense	833		(32,121)		(1,824)		(15,598)
Interest expense, net of interest income	Interest expense, net of interest income	(18,454)		(18,125)		(36,631)		(35,909)		Interest expense, net of interest income	(20,747)		(18,243)		(57,378)		(54,152)
Depreciation and amortization	Depreciation and amortization	(31,412)		(35,444)		(63,545)		(68,972)		Depreciation and amortization	(30,628)		(36,049)		(94,173)		(105,021)
Net loss attributable to Cooper-Standard Holdings Inc.	Net loss attributable to Cooper-Standard Holdings Inc.	$	(33,247)	$	(63,611)	$	(94,607)	$	(97,475)	Net loss attributable to Cooper-Standard Holdings Inc.	$	(32,686)	$	(123,173)	$	(127,293)	$	(220,648)

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS-(Continued)

(Unaudited)

(Dollar amounts in thousands except per share and share amounts)


		June 30, 2022		December 31, 2021			September 30, 2022		December 31, 2021
Segment assets:	Segment assets:					Segment assets:
North America	North America	$	897,898	$	885,517	North America	$	900,990	$	885,517
Europe	Europe	395,273		372,097		Europe	364,208		372,097
Asia Pacific	Asia Pacific	445,606		510,524		Asia Pacific	437,627		510,524
South America	South America	76,679		61,479		South America	78,142		61,479
Total Automotive	Total Automotive	1,815,456		1,829,617		Total Automotive	1,780,967		1,829,617
Corporate, eliminations and other	Corporate, eliminations and other	324,926		396,876		Corporate, eliminations and other	321,234		396,876
Consolidated	Consolidated	$	2,140,382	$	2,226,493	Consolidated	$	2,102,201	$	2,226,493

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

This management’s discussion and analysis of financial condition and results of operations is intended to assist in understanding and assessing the trends and significant changes in our results of operations and financial condition. Our historical results may not indicate, and should not be relied upon as an indication of, our future performance. Our forward-looking statements reflect our current views about future events, are based on assumptions and are subject to known and unknown risks and uncertainties that could cause actual results to differ materially from those contemplated by these statements. See “Forward-Looking Statements” below for a discussion of risks associated with reliance on forward-looking statements. Factors that may cause differences between actual results and those contemplated by forward-looking statements include, but are not limited to, those discussed below and in our Annual Report on Form 10-K for the fiscal year ended December 31, 2021 filed with the U.S. Securities and Exchange Commission (“2021 Annual Report”), including Item 1A. “Risk Factors.” The following should be read in conjunction with our 2021 Annual Report and the other information included herein. Our discussion of trends and conditions supplements and updates such discussion included in our 2021 Annual Report. References in this quarterly report on Form 10-Q (the “Report”) to “we,” “our,” or the “Company” refer to Cooper-Standard Holdings Inc., together with its consolidated subsidiaries.

Executive Overview

Our Business

We design, manufacture and sell sealing, fuel and brake delivery, and fluid transfer systems for use primarily in passenger vehicles and light trucks manufactured by global automotive original equipment manufacturers (“OEMs”). We are primarily a “Tier 1” supplier, with approximately 83% of our sales in 2021 made directly to major OEMs. We operate our automotive business along the following reportable segments: North America, Europe, Asia Pacific and South America. All other business activities are reported in Corporate, eliminations and other.

Recent Trends and Conditions

General Economic Conditions and Outlook

The global automotive industry is susceptible to uncertain economic conditions that could adversely impact new vehicle demand and production. Business conditions may vary significantly from period to period or region to region. In ~~2020, the COVID-19 pandemic created an unusually high degree of economic disruption and uncertainty globally which adversely impacted automotive production. In~~ 2021, global automotive production was ~~again~~ negatively impacted by lingering impacts of the COVID-19 pandemic and broad supply chain challenges stemming, in part, from a sharp rebound in overall industrial demand. In 2022, rising inflation, interest rates and continuing supply chain challenges are contributing to global economic uncertainty. In addition, recent pandemic related restrictions imposed in certain large population centers in China, the threat of additional lockdowns, and continuing military actions in Eastern Europe are having broad negative impacts on key sectors of the global economy.

In North America, U.S. consumer confidence has trended downward since the second quarter of 2021. Key drivers of the decline are significant inflation, continuing supply chain disruptions and rising interest rates. Geopolitical tensions and ~~persistent concerns over new variants of COVID-19~~uncertainty surrounding the upcoming mid-term elections in the United States are also important factors. However, ~~the U.S. economy is seeing some benefits from near all-time~~ low unemployment rates, ~~and~~ rising ~~wages. In addition, current and future~~wages, continued government spending ~~authorized by recently passed infrastructure legislation~~ and private spending related to pent-up consumer demand continue to support economic growth. Economists at the International Monetary Fund (IMF) are expecting the economies of the United States, Canada and Mexico to grow by ~~2.3~~1.6 percent, ~~3.4~~3.3 percent and ~~2.4~~2.1 percent, respectively, in ~~2022.~~2022 with growth expectations moderating to 1.0 percent, 1.3 percent and 1.2 percent, respectively, in 2023.

In Europe, the war in Ukraine, ~~and~~ related sanctions imposed on Russia and infrastructure disruptions are having a dramatic impact on energy prices and energy security. This is translating into lower output and higher inflation for most Eurozone countries. Supply chain disruptions have also hurt certain industries including the automobile sector, with the war and sanctions hindering the production of key input materials. ~~The easing~~With the European Central Bank having ended stimulative asset purchases and aggressively raising policy interest rates to stem inflation, economic growth is expected to moderate in the fourth quarter of ~~COVID-19 restrictions, tighter labor markets, pent-up spending and European Union fiscal policy changes should continue to sustain activity and support some growth in~~ 2022. Economists at the IMF are currently expecting the economy in the Eurozone region to grow by approximately ~~2.6~~3.1 percent for the ~~year.~~full year 2022 but just 0.5 percent in 2023.

In the Asia Pacific region, the combination of more transmissible variants and the strict zero-COVID strategy in China has led to repeated mobility restrictions and localized lockdowns that have weighed on economic activity and private consumption. ~~Recent lockdowns in key Chinese manufacturing and trading hubs such as Shenzhen and Shanghai compounded supply disruptions elsewhere in the region and beyond during the second quarter of 2022.~~ Moreover, real estate investment in China, once a key driver of economic growth, has slowed significantly. ~~As Chinese exports surged in June~~However, higher infrastructure investment and government spending are expected to support growth for the remainder of 2022 ~~following the end of the most recent round of COVID-related lockdowns, the Chinese government reaffirmed a GDP growth target of “around of~~

~~5.5 percent” for 2022, implying that further stimulus measures may be implemented to sustain economic growth.~~and into 2023. Economists at the IMF are expecting the Chinese economy to grow ~~3.3~~4.3 percent ~~for the year.~~in 2022, with expected growth moderating to just 2.6 percent in 2023.

In South America, the Brazilian economy continues to expand amid fiscal support and the lessening impact of the COVID-19 pandemic. Increasing exports of goods and services have provided strong support and the unemployment rate remains low. ~~Tighter monetary policy, inflation~~Certain fiscal interventions such as recently enacted tax cuts and ~~political uncertainty ahead of~~fuel subsidies have provided stimulative support

to the ~~October 2022 general elections are likely to temper investment and economic growth~~Brazilian economy in the second half of 2022 but may expire following the ~~year.~~runoff presidential elections in late October. This would likely result in slower economic growth rates going forward. Economists at the IMF are now estimating the Brazilian economy will grow 2.9 percent for the full year 2022, with growth moderating to just ~~1.7~~0.7 percent in ~~2022.~~2023. We remain cautious for the economic outlook in this market given the long history of political instability and economic volatility in the region.

Raw Materials

Our business is susceptible to inflationary pressures with respect to raw materials which may place operational and profitability burdens on the entire supply chain. Costs related to raw materials, such as steel, aluminum, and oil-derived commodities, continue to be volatile, which led to significant increases in these costs in 2021. Current global events continue to add further price pressure and uncertainty to raw material costs for 2022. In addition, we continue to see significant inflationary pressure on wages, energy, transportation and other general costs. As such, we will continue to work on an ongoing basis with our customers and suppliers to mitigate both inflationary pressures and our material-related cost exposures through a combination of expanded index-based agreements and other commercial enhancements.

Production Levels

Our business is directly affected by the automotive vehicle production rates in North America, Europe, Asia Pacific and South America which have been adversely affected by a series of events in recent years. Beginning in the first quarter of 2020, we experienced production shutdowns related to the COVID-19 pandemic. Beginning in the first quarter of 2021, OEM production volumes were disrupted by the global shortage of ~~semiconductors.~~semiconductors, but have improved sequentially quarter over quarter. In 2022, disruptions stemming from the Russia-Ukraine crisis and lockdowns in key Chinese manufacturing and trading hubs such as Shenzhen and Shanghai have further exacerbated supply chain disruptions and vehicle production levels. We continue to collaborate closely with our customers to minimize production inefficiencies while supporting their needs.

Light vehicle production in certain regions for the three and ~~six~~nine months ended ~~June~~September 30, 2022 and 2021 was as follows:


		Three Months Ended June 30,			Six Months Ended June 30,				Three Months Ended September 30,			Nine Months Ended September 30,
(In millions of units)	(In millions of units)	2022(1)	2021(1)	% Change	2022(1)	2021(1)	% Change	(In millions of units)	2022(1)	2021(1)	% Change	2022(1)	2021(1)	% Change
North America	North America	3.6	3.2	11.7%	7.1	6.8	4.7%	North America	3.7	3.0	24.2%	10.8	9.8	10.6%
Europe	Europe	3.9	4.1	(4.9)%	7.8	8.9	(11.8)%	Europe	3.6	3.0	20.3%	11.5	11.9	(3.3)%
Asia Pacific	Asia Pacific	10.0	10.3	(2.6)%	21.3	21.4	(0.2)%	Asia Pacific	12.5	9.6	29.9%	34.1	31.0	9.9%
Greater China	Greater China	5.5	5.8	(5.9)%	11.7	11.6	0.6%	Greater China	7.2	5.5	31.2%	19.0	17.1	10.9%
South America	South America	0.7	0.6	12.9%	1.3	1.3	(0.5)%	South America	0.8	0.6	33.4%	2.1	1.9	10.0%

(1)Production data based on S&P Global (formerly IHS Markit), ~~July~~October 2022.

In all regions, production volumes were impacted by the global shortage of semiconductors which began in the first quarter of 2021 and deteriorated thereafter throughout the year. Production stoppages related to semiconductor and other supply chain shortages continued into 2022, but have improved sequentially quarter over quarter. In Europe, vehicle production in the ~~six~~nine months ended ~~June~~September 30, 2022 was negatively impacted by additional supply chain issues related to the Russia-Ukraine crisis. ~~In China, vehicle production in the three months ended June 30, 2022 was negatively impacted by the COVID-19 related shutdowns.~~

Results of Operations


		Three Months Ended June 30,						Six Months Ended June 30,							Three Months Ended September 30,						Nine Months Ended September 30,
		2022		2021		Change		2022		2021		Change			2022		2021		Change		2022		2021		Change
		(dollar amounts in thousands)													(dollar amounts in thousands)
Sales	Sales	$	605,917	$	533,185	$	72,732	$	1,218,901	$	1,202,152	$	16,749	Sales	$	657,153	$	526,690	$	130,463	$	1,876,054	$	1,728,842	$	147,212
Cost of products sold	Cost of products sold	590,541		534,118		56,423		1,181,983		1,134,793		47,190		Cost of products sold	618,594		534,817		83,777		1,800,577		1,669,610		130,967
Gross profit (loss)	Gross profit (loss)	15,376		(933)		16,309		36,918		67,359		(30,441)		Gross profit (loss)	38,559		(8,127)		46,686		75,477		59,232		16,245
Selling, administration & engineering expenses	Selling, administration & engineering expenses	52,282		50,085		2,197		104,186		108,139		(3,953)		Selling, administration & engineering expenses	44,847		60,367		(15,520)		149,033		168,506		(19,473)
Loss (gain) on sale of business, net		—		195		(195)		—		(696)		696
Gain on sale of business, net														Gain on sale of business, net	—		—		—		—		(696)		696
Gain on sale of fixed assets, net	Gain on sale of fixed assets, net	(33,391)		—		(33,391)		(33,391)		—		(33,391)		Gain on sale of fixed assets, net	—		—		—		(33,391)		—		(33,391)
Amortization of intangibles	Amortization of intangibles	1,737		1,933		(196)		3,483		3,705		(222)		Amortization of intangibles	1,693		1,819		(126)		5,176		5,524		(348)
Restructuring charges	Restructuring charges	3,482		11,631		(8,149)		11,313		32,678		(21,365)		Restructuring charges	1,701		1,573		128		13,014		34,251		(21,237)

Impairment charges	Impairment charges	3		841		(838)		458		841		(383)		Impairment charges	379		1,006		(627)		837		1,847		(1,010)
Operating loss	Operating loss	(8,737)		(65,618)		56,881		(49,131)		(77,308)		28,177		Operating loss	(10,061)		(72,892)		62,831		(59,192)		(150,200)		91,008
Interest expense, net of interest income	Interest expense, net of interest income	(18,454)		(18,125)		(329)		(36,631)		(35,909)		(722)		Interest expense, net of interest income	(20,747)		(18,243)		(2,504)		(57,378)		(54,152)		(3,226)
Equity in (losses) earnings of affiliates	Equity in (losses) earnings of affiliates	(3,446)		393		(3,839)		(4,802)		1,179		(5,981)		Equity in (losses) earnings of affiliates	(3,391)		(1,114)		(2,277)		(8,193)		65		(8,258)
Other (expense) income, net		(1,509)		1,362		(2,871)		(2,720)		(3,727)		1,007
Other income (expense), net														Other income (expense), net	146		(494)		640		(2,574)		(4,221)		1,647
Loss before income taxes	Loss before income taxes	(32,146)		(81,988)		49,842		(93,284)		(115,765)		22,481		Loss before income taxes	(34,053)		(92,743)		58,690		(127,337)		(208,508)		81,171
Income tax expense (benefit)		2,005		(17,459)		19,464		2,657		(16,523)		19,180
Income tax (benefit) expense														Income tax (benefit) expense	(833)		32,121		(32,954)		1,824		15,598		(13,774)
Net loss	Net loss	(34,151)		(64,529)		30,378		(95,941)		(99,242)		3,301		Net loss	(33,220)		(124,864)		91,644		(129,161)		(224,106)		94,945
Net loss attributable to noncontrolling interests	Net loss attributable to noncontrolling interests	904		918		(14)		1,334		1,767		(433)		Net loss attributable to noncontrolling interests	534		1,691		(1,157)		1,868		3,458		(1,590)
Net loss attributable to Cooper-Standard Holdings Inc.	Net loss attributable to Cooper-Standard Holdings Inc.	$	(33,247)	$	(63,611)	$	30,364	$	(94,607)	$	(97,475)	$	2,868	Net loss attributable to Cooper-Standard Holdings Inc.	$	(32,686)	$	(123,173)	$	90,487	$	(127,293)	$	(220,648)	$	93,355

Three Months Ended ~~June~~September 30, 2022 Compared with Three Months Ended ~~June~~September 30, 2021

Sales


	Three Months Ended September 30,						Variance Due To:
	2022		2021		Change		Volume / Mix*		Foreign Exchange		Deconsolidation
	(dollar amounts in thousands)
Total sales	$	657,153	$	526,690	$	130,463	$	168,724	$	(32,114)	$	(6,147)

* Net of customer price adjustments, including recoveries

Sales for the three months ended ~~June~~September 30, 2022 increased ~~13.6%~~24.8%, compared to the three months ended ~~June~~September 30, 2021. The increase in sales was driven by volume and mix (higher net vehicle production volume due to the impact of lessening semiconductor supply issues in the current ~~year partially offset by the impact of COVID-19 related shutdowns in China and the Ukraine conflict in Europe~~year) and net customer price adjustments including recovery of cost ~~increases).~~increases. This was partially offset by the negative impact of foreign exchange, and the deconsolidation of a joint venture in the Asia Pacific region. See Note 2. “Deconsolidation and Divestiture” to the unaudited condensed consolidated financial statements included in Part I, Item 1 of this Report for additional information.

Three Months Ended June 30, Variance Due To:
2022 2021 Change Volume / Mix* Foreign Exchange Deconsolidation
(dollar amounts in thousands)
Total sales $ 605,917 $ 533,185 $ 72,732 $ 101,878 $ (22,603) $ (6,543)

* Net of customer price adjustments, including recoveries

Gross Profit


		Three Months Ended June 30,								Variance Due To:							Three Months Ended September 30,								Variance Due To:
		2022			2021			Change		Volume / Mix*		Foreign Exchange		Cost Increases/(Decreases)**			2022			2021			Change		Volume / Mix*		Foreign Exchange		Cost Increases/(Decreases)**
		(dollar amounts in thousands)															(dollar amounts in thousands)
Cost of products sold	Cost of products sold	$	590,541		$	534,118		$	56,423	$	46,920	$	(20,619)	$	30,122	Cost of products sold	$	618,594		$	534,817		$	83,777	$	100,132	$	(30,584)	$	14,229
Gross profit	Gross profit	15,376			(933)			16,309		54,958		(1,984)		(36,665)		Gross profit	38,559			(8,127)			46,686		68,592		(1,530)		(20,376)
Gross profit percentage of sales	Gross profit percentage of sales	2.5		%	(0.2)		%									Gross profit percentage of sales	5.9		%	(1.5)		%

* Net of customer price adjustments, including recoveries

** Net of deconsolidation

Cost of products sold is primarily comprised of material, labor, manufacturing overhead, freight, depreciation, warranty costs and other direct operating expenses. The Company’s material cost of products sold was approximately ~~50%~~52% and ~~45%~~47% of total cost of products sold for the three months ended ~~June~~September 30, 2022 and 2021, respectively. The change in cost of products sold was impacted by higher volume and mix, commodity inflation, higher ~~compensation related costs, higher~~ labor and overhead costs due to inconsistent volume production schedules, higher compensation related costs, and higher energy and transportation costs. These costs were partially offset by foreign exchange, manufacturing efficiencies, purchasing lean ~~and manufacturing efficiencies,~~savings, restructuring savings and the deconsolidation of a joint venture in the Asia Pacific region.

Gross profit for the three months ended ~~June~~September 30, 2022 increased ~~$16.3~~$46.7 million, compared to the three months ended ~~June~~September 30, 2021. The change was driven by volume and mix, net customer price adjustments including recovery of cost increases, manufacturing efficiencies, ~~and~~ purchasing lean savings and restructuring savings, partially offset by commodity and wage inflation, higher compensation related costs, higher energy and transportation costs and foreign exchange.

Selling, Administration and Engineering Expense. Selling, administration and engineering expense includes administrative expenses as well as product engineering and design and development costs. Selling, administration and engineering expense for the three months ended ~~June~~September 30, 2022 was ~~8.6%~~6.8% of sales compared to ~~9.4%~~11.5% for the three months ended ~~June~~September 30, 2021. The decrease was primarily due to ~~lower compensation costs due to~~the non-recurrence of a prior year credit loss, salaried headcount initiative savings and foreign exchange partially offset by higher compensation related costs.

~~Loss on Sale of Business, Net~~. The loss on sale of business of $0.2 million for the three months ended June 30, 2021 related to the net effect of our 2020 divestitures. See Note 2. “Deconsolidation and Divestiture” to the unaudited condensed consolidated financial statements included in Part 1, Item 1 of this Report for additional information.

~~Gain on Sale of Fixed Assets, Net.~~ ~~The gain on sale of fixed assets for the three months ended June 30, 2022 was attributable to the gain on the sale-leaseback of a European facility of $33.4 million.~~

Amortization of Intangibles. Intangible amortization for the three months ended ~~June~~September 30, 2022 was comparable to the three months ended ~~June~~September 30, 2021.

Restructuring. Restructuring charges for the three months ended ~~June~~September 30, 2022 ~~decreased $8.1 million compared~~was comparable to the three months ended ~~June~~September 30, 2021. ~~The decrease was primarily driven by lower restructuring charges in Europe.~~

Impairment Charges. Non-cash impairment charges for the three months ended ~~June~~September 30, 2022 decreased ~~$0.8~~$0.6 million compared to the three months ended September 30, 2021, primarily due to impairments in Europe in the prior year period.

Interest Expense, Net. Net interest expense for the three months ended ~~June~~September 30, 2022 ~~was comparable to the three months ended June 30, 2021.~~

~~Other Expense, Net.~~ ~~Other expense, net, for the three months ended June 30, 2022 decreased $2.9~~increased $2.5 million compared to the three months ended ~~June~~September 30, 2021, primarily due to an increase in interest rates on variable rate debt.

Other Income, Net. Other income, net, for the three months ended September 30, 2022 increased $0.6 million compared to the three months ended September 30, 2021, primarily due to the ~~unfavorable~~favorable impact of foreign exchange.

Income Tax Expense. Income tax ~~expense~~benefit for the three months ended ~~June~~September 30, 2022 was ~~$2.0~~$0.8 million on losses before income taxes of ~~$32.1~~$34.1 million compared to an income tax ~~benefit~~expense of ~~$17.5~~$32.1 million on losses before income taxes of ~~$82.0~~$92.7 million for the three months ended ~~June~~September 30, 2021. The effective tax rate for the three months ended ~~June~~September 30, 2022 differed from the effective tax rate for the three months ended ~~June~~September 30, 2021 primarily due to the geographic mix of pre-tax losses, the inability to record a tax benefit for pre-tax losses in the U.S. and certain foreign jurisdictions due to valuation allowances, ~~discrete tax impacts on the gain on sale transaction in Europe,~~ and other ~~tax reserve changes~~permanent items during the three-month period ended ~~June~~September 30, 2022. Additionally, a discrete expense of $31.7 million for the initial recognition of valuation allowance against net deferred tax assets in the U.S. was recorded in the three months ended September 30, 2021.

~~Six~~Nine Months Ended ~~June~~September 30, 2022 Compared with ~~Six~~Nine Months Ended ~~June~~September 30, 2021

Sales

Sales for the ~~six~~nine months ended ~~June~~September 30, 2022 increased ~~1.4%~~8.5%, compared to the ~~six~~nine months ended ~~June~~September 30, 2021. The increase in sales was driven by volume and mix (higher net vehicle production volume due to the impact of lessening semiconductor supply issues in the current year partially offset by the impact of COVID-19 in China and the Ukraine conflict in ~~Europe~~Europe) and net customer price adjustments including recovery of cost ~~increases).~~increases. This was partially offset by foreign exchange, and the deconsolidation of a joint venture in the Asia Pacific region. See Note 2. “Deconsolidation and Divestiture” to the unaudited condensed consolidated financial statements included in Part I, Item 1 of this Report for additional information.

Six Months Ended June 30, Variance Due To:
2022 2021 Change Volume / Mix* Foreign Exchange Deconsolidation
(dollar amounts in thousands)
Total sales $ 1,218,901 $ 1,202,152 $ 16,749 $ 64,424 $ (32,662) $ (15,013)


	Nine Months Ended September 30,						Variance Due To:
	2022		2021		Change		Volume / Mix*		Foreign Exchange		Deconsolidation
	(dollar amounts in thousands)
Total sales	$	1,876,054	$	1,728,842	$	147,212	$	233,148	$	(64,776)	$	(21,160)

* Net of customer price adjustments, including recoveries

Gross Profit


		Six Months Ended June 30,								Variance Due To:							Nine Months Ended September 30,								Variance Due To:
		2022			2021			Change		Volume / Mix*		Foreign Exchange		Cost Increases / (Decreases)**			2022			2021			Change		Volume / Mix*		Foreign Exchange		Cost Increases / (Decreases)**
		(dollar amounts in thousands)															(dollar amounts in thousands)
Cost of products sold	Cost of products sold	$	1,181,983		$	1,134,793		$	47,190	$	13,588	$	(28,035)	$	61,637	Cost of products sold	$	1,800,577		$	1,669,610		$	130,967	$	113,720	$	(58,619)	$	75,866
Gross profit	Gross profit	36,918			67,359			(30,441)		50,836		(4,627)		(76,650)		Gross profit	75,477			59,232			16,245		119,428		(6,157)		(97,026)
Gross profit percentage of sales	Gross profit percentage of sales	3.0		%	5.6		%									Gross profit percentage of sales	4.0		%	3.4		%

* Net of customer price adjustments, including recoveries

** Net of deconsolidation

Cost of products sold is primarily comprised of material, labor, manufacturing overhead, freight, depreciation, warranty costs and other direct operating expenses. The Company’s material cost of products sold was approximately ~~50%~~51% and 47% of total cost of products sold for the ~~six~~nine months ended ~~June~~September 30, 2022 and 2021, respectively. The change in the cost of products sold was impacted by ~~commodity inflation,~~ higher volume and mix, ~~higher compensation related costs,~~commodity inflation, increased labor and overhead costs due to inconsistent volume production schedules, higher compensation related costs and higher energy and transportation costs. These costs were partially offset by foreign exchange, manufacturing efficiencies, purchasing lean ~~and manufacturing efficiencies,~~savings, restructuring savings and the deconsolidation of a joint venture in the Asia Pacific region.

Gross profit for the ~~six~~nine months ended ~~June~~September 30, 2022 ~~decreased 45.2%~~increased 27.4%, compared to the ~~six~~nine months ended ~~June~~September 30, 2021. The change was driven by ~~commodity~~volume and ~~wage inflation~~mix net of customer price reductions including recovery of cost increases, manufacturing efficiencies, purchasing lean savings and ~~the non-recurrence of prior year COVID-19 government incentives.~~restructuring savings. These items were partially offset by ~~volume~~commodity and ~~mix, net favorable operational performance, lower variable employee~~wage inflation, higher compensation ~~expenses, purchasing lean savings, restructuring savings,~~related costs and the ~~prior year divestiture~~negative impact of ~~our European rubber fluid transfer and specialty sealing businesses and Indian operations.~~foreign exchange.

Selling, Administration and Engineering Expense. Selling, administration and engineering expense includes administrative expenses as well as product engineering and design and development costs. Sales, administration and engineering expense for the ~~six~~nine months ended ~~June~~September 30, 2022 was ~~8.5%~~7.9% of sales compared to ~~9.0%~~9.7% for the ~~six~~nine months ended ~~June~~September 30, 2021. The decrease was primarily due tothe non-recurrence of a prior year credit loss, salaried headcount initiative savings, customer recovery of engineering expense, and foreign exchange, partially offset by higher compensation related costs.

~~Loss (Gain)~~Gain on Sale of Business, Net. The gain on sale of business, net of $0.7 million for the ~~six~~nine months ended ~~June~~September 30, 2021 related to the net effect of our 2020 divestitures.

Gain on Sale of Fixed Assets, Net. The gain on sale of fixed assets for the ~~six~~nine months ended ~~June~~September 30, 2022 was attributable to the gain on the sale-leaseback of a European facility of $33.4 million.

Amortization of Intangibles. Intangible amortization for the ~~six~~nine months ended ~~June~~September 30, 2022 was comparable to the ~~six~~nine months ended ~~June~~September 30, 2021.

Restructuring. Restructuring charges for the ~~six~~nine months ended ~~June~~September 30, 2022 decreased ~~$21.4~~$21.2 million compared to the ~~six~~nine months ended ~~June~~September 30, 2021. The decrease was primarily driven by lower restructuring charges in Europe.

Impairment Charges. Impairment charges for the ~~six~~nine months ended ~~June~~September 30, 2022 decreased ~~$0.4~~$1.0 million, as compared to the ~~six~~nine months ended ~~June~~September 30, 2021. The decrease was driven by lower impairment charges in Europe in the current year period.

Interest Expense, Net. Net interest expense for the ~~six~~nine months ended ~~June~~September 30, 2022 ~~was relatively consistent with~~increased $3.2 million compared to the ~~prior year period.~~nine months ended September 30, 2022, primarily due to an increase in interest rates on variable rate debt.

Other Expense, Net. Other expense for the ~~six~~nine months ended ~~June~~September 30, 2022 decreased ~~$1.0~~$1.6 million compared to the ~~six~~nine months ended ~~June~~September 30, 2021, primarily due to favorable foreign currency, offset by a loss on deconsolidation.

Income Tax Expense (Benefit). Income tax expense for the ~~six~~nine months ended ~~June~~September 30, 2022 was ~~$2.7~~$1.8 million on losses before income taxes of ~~$93.3~~$127.3 million compared to income tax ~~benefit~~expense of ~~$16.5~~$15.6 million on losses before income taxes of ~~$115.8~~$208.5 million for the ~~six~~nine months ended ~~June~~September 30, 2021. The effective tax rate for the ~~six~~nine months ended ~~June~~September 30, 2022 differed primarily from the effective tax rate for the ~~six~~nine months ended ~~June~~September 30, 2021 due to the geographic mix of pre-tax losses, the inability to record a tax benefit for pre-tax losses in the U.S. and certain foreign jurisdictions due to valuation allowances, discrete tax impacts of the gain on sale transaction in Europe, ~~and~~ other tax reserve changes, and other permanent items during the ~~six-month period~~nine months ended ~~June~~September 30, 2022. Additionally, a discrete expense of $13.3 million for the initial recognition of valuation allowance against net deferred tax assets in the U.S. was recorded in the nine months ended September 30, 2021.

Segment Results of Operations

Our business is organized into the following reportable segments: North America, Europe, Asia Pacific and South America. All other business activities are reported in Corporate, eliminations and other. The Company uses Segment adjusted EBITDA as the measure of earnings to assess the performance of each segment and determine the resources to be allocated to the segments. We have defined adjusted EBITDA as net income before interest, taxes, depreciation, amortization, restructuring expense, and special items.

The following tables present sales and segment adjusted EBITDA for each of the reportable segments.

Three Months Ended ~~June~~September 30, 2022 Compared with Three Months Ended ~~June~~September 30, 2021

Sales


		Three Months Ended June 30,						Variance Due To:							Three Months Ended September 30,						Variance Due To:
		2022		2021		Change		Volume/ Mix*		Foreign Exchange		Deconsolidation			2022		2021		Change		Volume/ Mix*		Foreign Exchange		Deconsolidation
		(dollar amounts in thousands)													(dollar amounts in thousands)
Sales to external customers	Sales to external customers													Sales to external customers
North America	North America	$	331,687	$	247,525	$	84,162	$	85,220	$	(1,058)	$	—	North America	$	351,011	$	270,592	$	80,419	$	80,840	$	(421)	$	—
Europe	Europe	126,287		132,621		(6,334)		10,499		(16,833)		—		Europe	113,670		98,682		14,988		34,726		(19,738)		—
Asia Pacific	Asia Pacific	85,779		103,915		(18,136)		(6,741)		(4,852)		(6,543)		Asia Pacific	129,493		109,526		19,967		35,932		(9,818)		(6,147)
South America	South America	26,261		14,153		12,108		10,319		1,789		—		South America	27,073		15,981		11,092		11,129		(37)		—
Total Automotive	Total Automotive	570,014		498,214		71,800		99,297		(20,954)		(6,543)		Total Automotive	621,247		494,781		126,466		162,627		(30,014)		(6,147)
Corporate, eliminations and other	Corporate, eliminations and other	35,903		34,971		932		2,581		(1,649)		—		Corporate, eliminations and other	35,906		31,909		3,997		6,097		(2,100)		—
Consolidated	Consolidated	$	605,917	$	533,185	$	72,732	$	101,878	$	(22,603)	$	(6,543)	Consolidated	$	657,153	$	526,690	$	130,463	$	168,724	$	(32,114)	$	(6,147)

* Net of customer price adjustments, including recoveries

•Volume and mix, net of customer price adjustments including recoveries, was driven by vehicle production volume increases due to the lessening impact of semiconductor-related supply ~~issues, partially offset by the impact of COVID-19 shutdowns in China and the Ukraine conflict in Europe.~~issues.

•The impact of foreign currency exchange was primarily related to the Euro, Chinese Renminbi and Korean ~~Won and Brazilian Real.~~Won.

Segment adjusted EBITDA


		Three Months Ended June 30,						Variance Due To:						Three Months Ended September 30,								Variance Due To:
		2022		2021		Change		Volume/ Mix*		Foreign Exchange		Cost (Increases)/ Decreases**				2022		2021		Change			Volume/ Mix*		Foreign Exchange		Cost (Increases)/ Decreases**
		(dollar amounts in thousands)												(dollar amounts in thousands)
Segment adjusted EBITDA	Segment adjusted EBITDA														Segment adjusted EBITDA
North America	North America	$	15,441	$	756	$	14,685	$	34,180	$	(723)	$	(18,772)		North America	$	19,401	$	8,817	$	10,584		$	29,273	$	(1,355)	$	(17,334)
Europe	Europe	(15,316)		(14,391)		(925)		11,328		2,096		(14,349)			Europe	(10,905)		(25,112)		14,207			16,942		1,205		(3,940)
Asia Pacific	Asia Pacific	(7,799)		(2,302)		(5,497)		3,862		(2,688)		(6,671)			Asia Pacific	7,523		(14,274)		21,797			10,612		(10)		11,195
South America	South America	(1,298)		(726)		(572)		2,967		(2,297)		(1,242)			South America	766		(3,422)		4,188			2,750		1,060		378
Total Automotive	Total Automotive	(8,972)		(16,663)		7,691		52,337		(3,612)		(41,034)			Total Automotive	16,785		(33,991)		50,776			59,577		900		(9,701)
Corporate, eliminations and other	Corporate, eliminations and other	(1,402)		1,937		(3,339)		2,621		(124)		(5,836)			Corporate, eliminations and other	3,720		132		3,588			9,015		28		(5,455)
Consolidated adjusted EBITDA	Consolidated adjusted EBITDA	$	(10,374)	$	(14,726)	$	4,352	$	54,958	$	(3,736)	$	(46,870)		Consolidated adjusted EBITDA	$	20,505	$	(33,859)	$	54,364		$	68,592	$	928	$	(15,156)

* Net of customer price adjustments, including recoveries

** Net of deconsolidation

•Volume and mix, net of customer price adjustments including recoveries, was driven by vehicle production volume increases due to a lessening impact on customer production schedules for ~~semi-conductor-related~~semiconductor-related supply issues in the current year ~~period partially offset by the impact of COVID-19 shutdowns in China and the Ukraine conflict in Europe.~~period.

•The impact of foreign currency exchange was primarily related to the Euro ~~Chinese Renminbi, Korean Won~~ and Brazilian ~~Real.~~Real, partially offset by the Mexican Peso.

•The Cost (Increases) / Decreases category above includes:

◦Commodity cost and inflationary economics;

◦Manufacturing efficiencies and purchasing savings through lean initiatives;

◦Increased compensation-related expenses; and

◦Decreased costs related to ongoing salaried headcount initiatives and restructuring savings.

~~Six~~Nine Months Ended ~~June~~September 30, 2022 Compared with ~~Six~~Nine Months Ended ~~June~~September 30, 2021

Sales


		Six Months Ended June 30,						Variance Due To:							Nine Months Ended September 30,						Variance Due To:
		2022		2021		Change		Volume/ Mix*		Foreign Exchange		Deconsolidation			2022		2021		Change		Volume/ Mix*		Foreign Exchange		Deconsolidation
		(dollar amounts in thousands)													(dollar amounts in thousands)
Sales to external customers	Sales to external customers													Sales to external customers
North America	North America	$	653,581	$	586,561	$	67,020	$	68,396	$	(1,376)	$	—	North America	$	1,004,592	$	857,153	$	147,439	$	149,236	$	(1,797)	$	—
Europe	Europe	257,701		298,397		(40,696)		(14,121)		(26,575)		—		Europe	371,371		397,079		(25,708)		20,605		(46,313)		—
Asia Pacific	Asia Pacific	189,532		218,140		(28,608)		(8,535)		(5,060)		(15,013)		Asia Pacific	319,025		327,666		(8,641)		27,397		(14,878)		(21,160)
South America	South America	47,780		29,639		18,141		15,228		2,913		—		South America	74,853		45,620		29,233		26,357		2,876		—
Total Automotive	Total Automotive	1,148,594		1,132,737		15,857		60,968		(30,098)		(15,013)		Total Automotive	1,769,841		1,627,518		142,323		223,595		(60,112)		(21,160)
Corporate, eliminations and other	Corporate, eliminations and other	70,307		69,415		892		3,456		(2,564)		—		Corporate, eliminations and other	106,213		101,324		4,889		9,553		(4,664)		—
Consolidated	Consolidated	$	1,218,901	$	1,202,152	$	16,749	$	64,424	$	(32,662)	$	(15,013)	Consolidated	$	1,876,054	$	1,728,842	$	147,212	$	233,148	$	(64,776)	$	(21,160)

* Net of customer price adjustments, including recoveries

current year period partially offset by the impact of COVID-19 shutdowns in China and the Ukraine conflict in Europe.

•The impact of foreign currency exchange was primarily related to the Euro, Chinese Renminbi and Korean ~~Won and Brazilian Real.~~Won.

Segment adjusted EBITDA


		Six Months Ended June 30,						Variance Due To:						Nine Months Ended September 30,								Variance Due To:
		2022		2021		Change		Volume/ Mix*		Foreign Exchange		Cost (Increases)/ Decreases**				2022		2021		Change			Volume/ Mix*		Foreign Exchange		Cost (Increases)/ Decreases**
		(dollar amounts in thousands)												(dollar amounts in thousands)
Segment adjusted EBITDA	Segment adjusted EBITDA														Segment adjusted EBITDA
North America	North America	$	32,937	$	41,989	$	(9,052)	$	27,170	$	(502)	$	(35,720)		North America	$	52,338	$	50,806	$	1,532		$	56,443	$	(1,857)	$	(53,054)
Europe	Europe	(29,973)		(15,880)		(14,093)		8,260		2,340		(24,693)			Europe	(40,878)		(40,992)		114			25,202		3,545		(28,633)
Asia Pacific	Asia Pacific	(8,541)		1,250		(9,791)		4,019		(2,589)		(11,221)			Asia Pacific	(1,018)		(13,024)		12,006			14,631		(2,599)		(26)
South America	South America	(1,707)		(3,334)		1,627		4,529		1,121		(4,023)			South America	(941)		(6,756)		5,815			7,279		2,181		(3,645)
Total Automotive	Total Automotive	(7,284)		24,025		(31,309)		43,978		370		(75,657)			Total Automotive	9,501		(9,966)		19,467			103,555		1,270		(85,358)
Corporate, eliminations and other	Corporate, eliminations and other	(2,945)		(211)		(2,734)		6,858		347		(9,939)			Corporate, eliminations and other	775		(79)		854			15,873		375		(15,394)
Consolidated adjusted EBITDA	Consolidated adjusted EBITDA	$	(10,229)	$	23,814	$	(34,043)	$	50,836	$	717	$	(85,596)		Consolidated adjusted EBITDA	$	10,276	$	(10,045)	$	20,321		$	119,428	$	1,645	$	(100,752)

* Net of customer price adjustments, including recoveries

** Net of deconsolidation

•Volume and mix, net of customer price adjustments including recoveries, was driven by vehicle production volume increases due to a lessening impact on vehicle manufacturers of the ~~semi-conductor~~semiconductor related supply issues partially offset by the impact of COVID-19 shutdowns in China and the Ukraine conflict in Europe.

•The impact of foreign currency exchange was primarily related to the Euro and Brazilian Real partially offset by the Mexican Peso, Chinese Renminbi and Korean ~~Won and Brazilian Real.~~Won.

•The Cost (Increases) / Decreases category above includes:

◦Commodity cost and inflationary economics;

◦Manufacturing efficiencies and purchasing savings through lean initiatives;

◦Increased compensation-related expenses; and

◦Decreased costs related to ongoing salaried headcount initiatives and restructuring savings.

Liquidity and Capital Resources

Short and Long-Term Liquidity Considerations and Risks

~~We intend~~The sources to fund our ongoing working capital, capital expenditures, debt service and other funding requirements ~~through~~are a combination of cash flows from operations, cash on hand, borrowings under our senior asset-based revolving credit facility (“ABL Facility”) and receivables factoring. The Company utilizes intercompany loans and equity contributions to fund its worldwide operations. There may be country-specific regulations which may restrict or result in increased costs in the repatriation of these funds. See Note 9. “Debt” to the unaudited condensed consolidated financial statements included in Part I, Item 1 of this Report for additional information.

We continue to actively preserve cash and enhance liquidity, including decreasing our capital expenditures and improving working capital. Based on those actions and current projections of OEM customer production, we believe that our cash flows from operations, cash on hand, borrowings under our ABL Facility and receivables factoring will enable us to meet our ongoing working capital, capital expenditures and debt service requirements for the next twelve months, despite the challenges presented by the COVID-19 pandemic and supply chain issues facing the industry.expenditures. We continuously monitor and forecast our liquidity situation, take the necessary actions to preserve our liquidity and evaluate other financial alternatives that may be available to us should the need arise. Our ability to fund our working capital needs, debt payments and other obligations, and to comply with the financial covenants, including borrowing base limitations, under our ABL Facility, depend on our future operating performance and cash flows and many factors outside of our control, including the costs of raw materials, the state of the overall automotive industry and financial and economic conditions, including the continued impact of COVID-19, and other factors. Based on those actions and current projections of OEM customer production, we believe that our cash flows from operations, cash on hand, borrowings under our ABL Facility and receivables factoring will enable us to meet our ongoing working capital requirements and capital expenditures for the next twelve months, despite the challenges presented by the COVID-19 pandemic and supply chain issues facing the industry. Our ability to meet our debt service requirements for the next twelve months is contingent upon our ability to refinance our Term Loan Facility.

Our Term Loan Facility matures on November 2, 2023. The Company has retained Goldman Sachs & Co. LLC as its financial advisor to analyze, evaluate and help arrange a refinancing of the Term Loan Facility and possibly certain other debt instruments. To the extent the Company is not able to refinance its Term Loan Facility prior to the issuance of the financial statements for the year ended December 31, 2022, our independent auditors may issue an audit opinion including an explanatory paragraph that indicates there is substantial doubt about our ability to continue as a going concern. The inclusion of such an explanatory paragraph in the report of our independent auditors would breach a covenant under our Term Loan Facility which, unless cured, would constitute an event of default thereunder. Such an event of default would cause a cross-default or cross-acceleration of other indebtedness. In such a case, the Company would not expect that it would have sufficient liquidity to repay all of its outstanding indebtedness at such time. The Company continues its discussions with certain investors with respect to potential refinancing alternatives. While discussions are ongoing, the Company has not reached an agreement with respect to such a transaction for refinancing its capital structure and there can be no ~~assurance~~assurances that ~~the Company~~such an agreement will be ~~able to refinance its Term Loan Facility on acceptable terms or at all prior to~~reached in the issuance of the financial statements for the year ended December 31, 2022, the Company believes its actions to improve financial performance, to maintain liquidity and current discussions with certain investors will enable the Company to refinance its Term Loan Facility.future.

Cash Flows

Operating Activities. Net cash used in operations was ~~$0.2~~$10.4 million for the ~~six~~nine months ended ~~June~~September 30, 2022, compared to net cash used in operations of ~~$60.7~~$111.5 million for the ~~six~~nine months ended ~~June~~September 30, 2021. The net change was primarily due to improved operating results and the receipt of ~~$51.4~~$54.3 million in cash payments from the United States Internal Revenue Service for tax refunds related to net operating loss carrybacks.

Investing Activities. Net cash ~~provided by~~used in investing activities was ~~$8.4~~$5.4 million for the ~~six~~nine months ended ~~June~~September 30, 2022, compared to net cash used in investing activities of ~~$52.6~~$72.8 million for the ~~six~~nine months ended ~~June~~September 30, 2021. The change was primarily related to proceeds of $50.0 million related to the sale-leaseback of a certain European facility which were received in the ~~six~~nine months ended ~~June~~September 30, 2022 along with reduced capital spending in 2022. We expect to continue initiatives to reduce overall capital spending and anticipate that we will spend approximately ~~$85~~$80 - ~~$95~~$90 million on capital expenditures in 2022.

Financing Activities. Net cash used in financing activities totaled ~~$4.1~~$6.1 million for the ~~six~~nine months ended ~~June~~September 30, 2022, compared to net cash provided by financing activities of ~~$11.7~~$4.7 million for the ~~six~~nine months ended ~~June~~September 30, 2021. The outflow in 2022 ~~primarily related to principal payments on debt, while~~was relatively consistent with the ~~inflow~~outflow in ~~2021 was primarily due to an increase in short-term debt.~~2021.

Share Repurchase Program

In June 2018, our Board of Directors approved a common stock repurchase program (the “2018 Program”) authorizing us to repurchase, in the aggregate, up to $150.0 million of our outstanding common stock. Under the 2018 Program, repurchases may be made on the open market, through private transactions, accelerated share repurchases, round lot or block transactions on the New York Stock Exchange or otherwise, as determined by us and in accordance with prevailing market conditions and federal securities laws and regulations. We expect to fund any future repurchases from cash on hand and future cash flows from operations. The specific timing and amount of any future repurchase will vary based on market and business conditions, changes in tax laws (including the Inflation Reduction Act) and other factors. We are not obligated to acquire a particular amount of securities, and the 2018 Program may be discontinued at any time at our discretion. As of ~~June~~September 30, 2022, we had approximately $98.7 million of repurchase authorization remaining under the 2018 Program. We did not make any repurchases under the 2018 Program during the ~~six~~nine months ended ~~June~~September 30, 2022 or 2021.

Non-GAAP Financial Measures

In evaluating our business, management considers EBITDA and Adjusted EBITDA to be key indicators of our operating performance. Our management also uses EBITDA and Adjusted EBITDA:

•because similar measures are utilized in the calculation of the financial covenants and ratios contained in our financing arrangements;

•in developing our internal budgets and forecasts;

•as a significant factor in evaluating our management for compensation purposes;

•in evaluating potential acquisitions;

•in comparing our current operating results with corresponding historical periods and with the operational performance of other companies in our industry; and

•in presentations to the members of our board of directors to enable our board of directors to have the same measurement basis of operating performance as is used by management in their assessments of performance and in forecasting and budgeting for our company.

In addition, we believe EBITDA and Adjusted EBITDA and similar measures are widely used by investors, securities analysts and other interested parties in evaluating our performance. We define Adjusted EBITDA as net income (loss) plus income tax expense (benefit), interest expense, net of interest income, depreciation and amortization or EBITDA, as adjusted

for items that management does not consider to be reflective of our core operating performance. These adjustments include, but are not limited to, restructuring costs, impairment charges, non-cash fair value adjustments and acquisition-related costs.

EBITDA and Adjusted EBITDA are not financial measurements recognized under U.S. GAAP, and when analyzing our operating performance, investors should use EBITDA and Adjusted EBITDA as a supplement to, and not as alternatives for, net income (loss), operating income, or any other performance measure derived in accordance with U.S. GAAP, nor as an alternative to cash flow from operating activities as a measure of our liquidity. EBITDA and Adjusted EBITDA have limitations as analytical tools, and they should not be considered in isolation or as substitutes for analysis of our results of operations as reported under U.S. GAAP. These limitations include:

•they do not reflect our cash expenditures or future requirements for capital expenditure or contractual commitments;

•they do not reflect changes in, or cash requirements for, our working capital needs;

•they do not reflect interest expense or cash requirements necessary to service interest or principal payments under our ABL Facility, Term Loan Facility, Senior Notes and Senior Secured Notes;

•they do not reflect certain tax payments that may represent a reduction in cash available to us;

•although depreciation and amortization are non-cash charges, the assets being depreciated or amortized may have to be replaced in the future, and EBITDA and Adjusted EBITDA do not reflect cash requirements for such replacements; and

•other companies, including companies in our industry, may calculate these measures differently and, as the number of differences in the way companies calculate these measures increases, the degree of their usefulness as a comparative measure correspondingly decreases.

In addition, in evaluating Adjusted EBITDA, it should be noted that in the future, we may incur expenses similar to the adjustments in the below presentation. Our presentation of Adjusted EBITDA should not be construed as an inference that our future results will be unaffected by special items.

The following table provides a reconciliation of EBITDA and Adjusted EBITDA from net loss, which is the most comparable financial measure in accordance with U.S. GAAP:


		Three Months Ended June 30,				Six Months Ended June 30,					Three Months Ended September 30,				Nine Months Ended September 30,
		2022		2021		2022		2021			2022		2021		2022		2021
		(dollar amounts in thousands)									(dollar amounts in thousands)
Net loss attributable to Cooper-Standard Holdings Inc.	Net loss attributable to Cooper-Standard Holdings Inc.	$	(33,247)	$	(63,611)	$	(94,607)	$	(97,475)	Net loss attributable to Cooper-Standard Holdings Inc.	$	(32,686)	$	(123,173)	$	(127,293)	$	(220,648)
Income tax expense (benefit)		2,005		(17,459)		2,657		(16,523)
Income tax (benefit) expense										Income tax (benefit) expense	(833)		32,121		1,824		15,598
Interest expense, net of interest income	Interest expense, net of interest income	18,454		18,125		36,631		35,909		Interest expense, net of interest income	20,747		18,243		57,378		54,152
Depreciation and amortization	Depreciation and amortization	31,412		35,444		63,545		68,972		Depreciation and amortization	30,628		36,049		94,173		105,021
EBITDA	EBITDA	$	18,624	$	(27,501)	$	8,226	$	(9,117)	EBITDA	$	17,856	$	(36,760)	$	26,082	$	(45,877)
Restructuring charges	Restructuring charges	3,482		11,631		11,313		32,678		Restructuring charges	1,701		1,573		13,014		34,251
Deconsolidation of joint venture (1)	Deconsolidation of joint venture (1)	—		—		2,257		—		Deconsolidation of joint venture (1)	—		—		2,257		—
Impairment charges (2)	Impairment charges (2)	3		841		458		841		Impairment charges (2)	379		1,006		837		1,847
Loss (gain) on sale of business, net (3)	Loss (gain) on sale of business, net (3)	—		195		—		(696)		Loss (gain) on sale of business, net (3)	—		—		—		(696)
Gain on sale of fixed assets, net (4)	Gain on sale of fixed assets, net (4)	(33,391)		—		(33,391)		—		Gain on sale of fixed assets, net (4)	—		—		(33,391)		—
Lease termination costs (5)	Lease termination costs (5)	—		108		—		108		Lease termination costs (5)	—		322		—		430

Indirect tax adjustments (6)		908		—		908		—
Indirect tax and customs adjustments (6)										Indirect tax and customs adjustments (6)	569		—		1,477		—

Adjusted EBITDA	Adjusted EBITDA	$	(10,374)	$	(14,726)	$	(10,229)	$	23,814	Adjusted EBITDA	$	20,505	$	(33,859)	$	10,276	$	(10,045)

(1)Loss attributable to deconsolidation of a joint venture in the Asia Pacific region, which required adjustment to fair value.

(2)Non-cash impairment charges in 2022 and 2021 related to idle assets in Europe.

(3)During 2021, we recorded subsequent adjustments to the net gain on sale of business, which related to the 2020 divestiture of our European rubber fluid transfer and specialty sealing businesses, as well as its Indian operations.

(4)In the first quarter of 2022, the Company signed a sale-leaseback agreement on one of its European facilities, and a gain was recognized in the second quarter of 2022.

(5)Lease termination costs no longer recorded as restructuring charges in accordance with ASC 842.

(6)Impact of prior period indirect tax and customs adjustments.

Contingencies and Environmental Matters

The information concerning contingencies, including environmental contingencies and the amount currently held in reserve for environmental matters, contained in Note 19. “Commitments and Contingencies” to the unaudited condensed consolidated financial statements included in Part I, Item 1 of this Report, is incorporated herein by reference.

Critical Accounting Estimates

There have been no significant changes in our critical accounting estimates during the ~~six~~nine months ended ~~June~~September 30, 2022.

Forward-Looking Statements

This quarterly report on Form 10-Q includes “forward-looking statements” within the meaning of U.S. federal securities laws, and we intend that such forward-looking statements be subject to the safe harbor created thereby. Our use of words “estimate,” “expect,” “anticipate,” “project,” “plan,” “intend,” “believe,” “outlook”, “guidance”, “forecast,” or future or conditional verbs, such as “will,” “should,” “could,” “would,” or “may,” and variations of such words or similar expressions are intended to identify forward-looking statements. All forward-looking statements are based upon our current expectations and various assumptions. Our expectations, beliefs, and projections are expressed in good faith and we believe there is a reasonable basis for them. However, we cannot assure you that these expectations, beliefs and projections will be achieved. Forward-looking statements are not guarantees of future performance and are subject to significant risks and uncertainties that may cause actual results or achievements to be materially different from the future results or achievements expressed or implied by the forward-looking statements. Among other items, such factors may include: Volatility or decline of the Company’s stock price, or absence of stock price appreciation; impacts, including commodity cost increases and disruptions related to the war in Ukraine and the current COVID-related lockdowns in China; our ability to offset the adverse impact of higher commodity and other costs through negotiations with our customers; the impact, and expected continued impact, of the COVID-19 outbreak on our financial condition and results of operations; significant risks to our liquidity presented by the COVID-19 pandemic risk; prolonged or material contractions in automotive sales and production volumes; our inability to realize sales represented by awarded business; escalating pricing pressures; loss of large customers or significant platforms; our ability to successfully compete in the automotive parts industry; availability and increasing volatility in costs of manufactured components and raw materials; disruption in our supply base; competitive threats and commercial risks associated with our diversification strategy through our Advanced Technology Group; possible variability of our working capital requirements; risks associated with our international operations, including changes in laws, regulations, and policies governing the terms of foreign trade such as increased trade restrictions and tariffs; foreign currency exchange rate fluctuations; our ability to control the operations of our joint ventures for our sole benefit; our substantial amount of indebtedness and variable rates of interest; our ability to obtain adequate financing sources in the future; operating and financial restrictions imposed on us under our debt instruments; the underfunding of our pension plans; significant changes in discount rates and the actual return on pension assets; effectiveness of continuous improvement programs and other cost savings plans; manufacturing facility closings or consolidation; our ability to execute new program launches; our ability to meet customers’ needs for new and improved products; the possibility that our acquisitions and divestitures may not be successful; product liability, warranty and recall claims brought against us; laws and regulations, including environmental, health and safety laws and regulations; legal and regulatory proceedings, claims or investigations against us; work stoppages or other labor disruptions; the ability of our intellectual property to withstand legal challenges; cyber-attacks, data privacy concerns, other disruptions in, or the inability to implement upgrades to, our information technology systems; the possible volatility of our annual effective tax rate; the possibility of a failure to maintain effective controls and procedures; the possibility of future impairment charges to our goodwill and long-lived assets; our ability to identify, attract, develop and retain a skilled, engaged and diverse workforce; our ability to procure insurance at reasonable rates; and our dependence on our subsidiaries for cash to satisfy our obligations.

You should not place undue reliance on these forward-looking statements. Our forward-looking statements speak only as of the date of this quarterly report on Form 10-Q, and we undertake no obligation to publicly update or otherwise revise any forward-looking statement, whether as a result of new information, future events or otherwise, except where we are expressly required to do so by law.

This quarterly report on Form 10-Q also contains estimates and other information that is based on industry publications, surveys, and forecasts. This information involves a number of assumptions and limitations, and we have not independently verified the accuracy or completeness of the information.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

There have been no material changes to the quantitative and qualitative information about the Company’s market risk from those previously disclosed in the Company’s 2021 Annual Report.

Item 4. Controls and Procedures

Evaluation of Disclosure Controls and Procedures

The Company has evaluated, under the supervision and with the participation of the Company’s management, including the Company’s Chief Executive Officer and Chief Financial Officer, the effectiveness of the Company’s disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended) as of the end of the period covered by this Report. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within the Company have been detected. Based on that evaluation, the Company’s Chief Executive Officer along with the Chief Financial Officer have concluded that the Company’s disclosure controls and procedures were effective at a reasonable assurance level as of the end of the period covered by this Report.

Changes in Internal Control over Financial Reporting

There have been no changes in the Company’s internal control over financial reporting during the quarter ended ~~June~~September 30, 2022 that have materially affected, or are reasonably likely to affect, the Company’s internal control over financial reporting.

PART II — OTHER INFORMATION

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

The Company is authorized to purchase, in the aggregate, up to $150 million of our outstanding common stock under our common stock repurchase program, which was effective in November 2018. As of ~~June~~September 30, 2022, we had approximately $98.7 million of repurchase authorization remaining under our common stock share repurchase program as discussed in Part I, Item 2, “Management’s Discussion and Analysis of Financial Condition and Results of Operations - Liquidity and Capital Resources - Share Repurchase Program,” and Note 17. “Common Stock” to the unaudited condensed consolidated financial statements included in Part I, Item 1 of this Report.

A summary of our shares of common stock repurchased during the three months ended ~~June~~September 30, 2022 is shown below:

Period
Total Number of Shares Purchased(1)
Average Price Paid per Share Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs Approximate Dollar Value of Shares that May Yet be Purchased Under the Program (in millions)
April 1, 2022 through April 30, 2022 706 $ 6.48 — $ 98.7
May 1, 2022 through May 31, 2022 833 5.18 — 98.7
June 1, 2022 through June 30, 2022 471 5.60 — 98.7
Total 2,010 —


Period	Total Number of Shares Purchased(1)	Average Price Paid per Share		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs	Approximate Dollar Value of Shares that May Yet be Purchased Under the Program (in millions)
July 1, 2022 through July 31, 2022	2,152	$	4.90	—	$	98.7
August 1, 2022 through August 31, 2022	255	10.96		—	98.7
September 1, 2022 through September 30, 2022	—	—		—	98.7
Total	2,407			—

(1)Represents shares repurchased by the Company to satisfy employee tax withholding requirements due upon the vesting of restricted stock awards.

Item 6. Exhibits



Exhibit No.						Description of Exhibit

10.1*†						Form of 2022 Cooper-Standard Holdings Inc. 2021 Omnibus Incentive Plan Restricted Stock Unit Award Agreement (cash or stock-settled award) (interim awards).

31.1*						Certification of Principal Executive Officer Pursuant to Exchange Act Rule 13a-14(a)/15d-14(a) (Section 302 of the Sarbanes-Oxley Act of 2002).

31.2*						Certification of Principal Financial Officer Pursuant to Exchange Act Rule 13a-14(a)/15d-14(a) (Section 302 of the Sarbanes-Oxley Act of 2002).

32**						Certification Pursuant to 18 U.S.C. Section 1350, As Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

101.INS***						Inline XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document

101.SCH***						Inline XBRL Taxonomy Extension Schema Document

101.CAL***						Inline XBRL Taxonomy Extension Calculation Linkbase Document

101.DEF***						Inline XBRL Taxonomy Extension Definition Linkbase Document

101.LAB***						Inline XBRL Taxonomy Label Linkbase Document

101.PRE***						Inline XBRL Taxonomy Extension Presentation Linkbase Document

104***						Cover Page Interactive Data File, formatted in Inline XBRL


*			Filed with this Report.
**			Furnished with this Report.
***			Submitted electronically with this Report in accordance with the provisions of Regulation S-T.
†			Management contract or compensatory plan or arrangement.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

COOPER-STANDARD HOLDINGS INC.

~~August 5,~~November 2, 2022

/S/ JONATHAN P. BANAS

Date

Jonathan P. Banas
Chief Financial Officer
(Principal Financial Officer and Duly Authorized Officer)



		Page

	PART I. FINANCIAL INFORMATION

Item 1.	Financial Statements (unaudited)
	Condensed Consolidated Statements of Operations	3
	Condensed Consolidated Statements of Comprehensive Loss	4
	Condensed Consolidated Balance Sheets	5
	Condensed Consolidated Statements of Changes in Equity	6
	Condensed Consolidated Statements of Cash Flows	7
	Notes to Condensed Consolidated Financial Statements	8
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	26
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	37
Item 4.	Controls and Procedures	38

	PART II. OTHER INFORMATION


Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	39

Item 6.	Exhibits	40
SIGNATURES		41