Cooper-Standard’s F-150 Ramp Delays, Cost Recovery Contradictions Emerge in Q2 Earnings Call

Date of Call: Aug 6, 2026

Financials Results

• Revenue: $721.3M, up 2.2% YOY
• EPS: $0.13 loss per share adjusted, compared to $0.06 per share income YOY

Guidance:

• Adjusted EBITDA guidance midpoint unchanged at $105M for full-year 2026.
• Capital spending slightly increased to reflect incremental investments for new business launches.
• Restructuring expense increased as initiatives are accelerated.
• Net interest expense decreased due to refinancing terms.
• Expect positive free cash flow generation for the full year.
• Confident in achieving full-year plan for sales and profitability despite Q2 headwinds.
• On track to achieve longer-term strategic financial targets for growth, margins, and return on capital.

Business Commentary:

Operational Performance and Safety Metrics:

• Cooper-Standard achieved a 99% green customer scorecard for product quality and service, and 97% green for new program launches, indicating strong operational performance.
• The company reported a total incident rate of 0.17 reportable incidents per 200,000 hours worked, with 44 plants maintaining a perfect safety record, reflecting excellent safety performance.
• The strong safety record and operational performance were attributed to the focus and efforts of the global team and the implementation of safety and operational initiatives.

Cost Optimization and Financial Performance:

• Cooper-Standard's manufacturing and purchasing teams delivered $15 million in savings through lean initiatives and cost-saving programs in the second quarter.
• The company reported a free cash flow of $16 million, a $40 million improvement over the second quarter of the previous year.
• Cost optimization efforts were critical in managing hyperinflationary pressures, while financial performance was supported by favorable foreign exchange and operational efficiencies.

New Business Awards and Growth Strategy:

• Cooper-Standard received $118 million in net new business awards in the second quarter, contributing to a total of $246 million for the first half of the year.
• The company is positioned to achieve its full-year goal of over $400 million in new business awards for 2026.
• Growth is driven by the company's reputation for quality components, consistent delivery, and collaborative design and development capabilities.

Strategic Financial Targets and Margin Expansion:

• Cooper-Standard's gross profit margins increased by 160 basis points over the past two years, despite reduced production volumes.
• The company is confident in further margin expansion in 2026 and beyond, driven by new program launches with enhanced variable contribution margins and successful cost management.
• Margin expansion is supported by strategic execution, cost optimization, and enhanced commercial agreements with customers.

Sentiment Analysis:

Overall Tone: Positive

• Jeff Edwards: 'we’re increasingly confident that we’ll be able to execute our plans and achieve our longer-term strategic financial targets.' John Banas: 'we remain confident in our ability to recover or mitigate the vast majority of these impacts.' Edwards: 'we’re on track to achieve our full year plan for sales and profitability.'

Q&A:

• Question from Michael Ward (Citi): When you talk about these conquest awards, is that unique to the Fluid business where you can pick it up that quickly?
  Response: Yes, it is unique to Fluid due to critical components, technology, and execution, allowing quick wins when competitors have issues.

• Question from Michael Ward (Citi): Confirm your second half outlook based on your guidance and what it suggests.
  Response: Adjusted EBITDA margins expected to be 12%+ in H2; recoveries, operational savings, and commercial negotiations will drive improved EBITDA and cash flow.

• Question from Doug Carson (Bank of America): Help me think about the recoveries needed to hit EBITDA guidance given negative volume and mix.
  Response: Recoveries from material cost pass-through (oil price increases), commercial negotiations, and ongoing cost initiatives will offset headwinds; Q3 will look different from Q2 as planned.

• Question from Andres (Stifel Financial): Break out the net new awards between EVs and hybrids and comment on market trends.
  Response: Approximately 50/50 split between EVs and hybrids; both offer increased content per vehicle, driven by global consumer preferences, albeit slower adoption than expected.

• Question from Andres (Stifel Financial): Update on F-150 and back half revenue expectations.
  Response: Strong start in July but no uptick in Q4 releases seen; forecast remains conservative without confirmed volume increases.

• Question from Wolf Joffe (EVR Research): If global auto production is flat in 2027, how much could Cooper-Standard production grow given past net new awards?
  Response: Growth would trend year-over-year based on launch schedules; margin expansion expected even on flat revenue, targeting strategic financial goals.

• Question from Wolf Joffe (EVR Research): Provide granularity on margin expansion in a flat environment.
  Response: Expanded margins 160 bps over two years; expect continued expansion driven by higher variable contribution margins and cost control.

• Question from Wolf Joffe (EVR Research): Are competitive benefits in Fluid enough to signal high end of full-year guidance?
  Response: Uncertain due to Middle East situation; focus remains on executing plans and recovering costs.

Contradiction Point 1

Material Cost Recovery and Financial Outlook

Contradiction on the timing and impact of material cost recoveries.

Doug Carson (Bank of America) - Doug Carson (Bank of America)

2026Q2: A major price increase went into effect July 1st, allowing the company to recover the difference... This recovery mechanism, outlined in commercial agreements, is now being tested and is working. - Jeff Edwards(CEO)

What type and magnitude of recoveries are needed to reach the EBITDA guidance for the second half, and where do they come from (duties, tariffs, general inflation)? - Andres Loret de Mola (Stifel)

2026Q1: Higher oil prices are not yet a significant Q1 headwind but are expected to create a headwind in Q2, with recoveries following sequentially. - Jeff Edwards(CEO)

Contradiction Point 2

The F-150 Program Ramp

Contradiction on the expected volume impact for the F-150 program in H2.

Andres (Stifel Financial, on for Nathan Jones) - Andres (Stifel Financial, on for Nathan Jones)

2026Q2: The company had hoped for a ~20% second-half increase versus the first half, but this has not materialized in the latest customer releases. The company only includes volume in the forecast if it is reflected in official customer releases. - Jeff Edwards(CEO)

What's the update on the F-150 program ramp's impact on second-half revenue? - Kirk Ludtke (Imperial Capital)

2026Q1: Volumes are currently on plan for Q2. The company's business plan accounts for some quarterly variability. Edwards is optimistic for the second half of the year. - Jeff Edwards(CEO)

Contradiction Point 3

F-150 Program Ramp and Revenue Impact

Expectations for the F-150 production increase and its revenue contribution have shifted.

Andres (Stifel Financial, on for Nathan Jones) - Andres (Stifel Financial, on for Nathan Jones)

2026Q2: The company started July strong with additional F-150 production. However, the current sales forecast for the second half does not assume a significant year-over-year volume increase. - Jeff Edwards(CEO)

What's the update on the F-150 program ramp and its impact on H2 revenue? - Michael Ward (Citigroup Inc.)

2025Q4: Some additional production capacity (linespeed, shift) is being discussed; if the forecasted increase materializes, it could add significant content. - Jeffrey Edwards(CEO)

Contradiction Point 4

Second-half Revenue and EBITDA Margin Guidance

The confidence and drivers for achieving specific financial targets appear to have changed.

Doug Carson (Bank of America) - Doug Carson (Bank of America)

2026Q2: The path to achieving EBITDA guidance is based on several key factors... The Q3 outlook is expected to look significantly different from Q2 due to these recovering headwinds, as previously highlighted. - Jeff Edwards(CEO)

What types and magnitude of recoveries (duties, tariffs, inflation) are needed to meet the second-half EBITDA guidance? - Kirk Ludtke (Imperial Capital, LLC)

2025Q4: The company has already identified well above 90% of these savings for 2026, indicating high confidence. - Jonathan Banas(CFO)

Contradiction Point 5

Outlook for Growth in a Flat Volume Environment

Contradiction on company's growth trajectory if global auto production is flat.

Wolf Joffe (EVR Research) - Wolf Joffe (EVR Research)

2026Q2: If global sales are flat, the company's growth would trend year-over-year based on the individual launch schedules of its awarded business. - Roger Hendriksen(Director of Investor Relations)

How much could the company's production grow in 2027 if global auto production is flat, considering past net new awards? - Nathan Jones (Stifel, Nicolaus & Company, Incorporated)

2025Q3: Believes the trajectory from 2025 to 2030 is pretty linear, even considering faster Chinese OEM ramps. - Jeffrey Edwards(CEO)