Cooper-Standard Holdings Inc. (NYSE:CPS) Q1 2024 Earnings Call Transcript

Cooper-Standard Holdings Inc. (NYSE:CPS) Q1 2024 Earnings Call Transcript May 7, 2024

Cooper-Standard Holdings Inc. isn’t one of the 30 most popular stocks among hedge funds at the end of the third quarter (see the details here).

Operator: Good morning, ladies and gentlemen and welcome to the Cooper-Standard’s First Quarter 2024 Earnings Conference Call. During the presentation, all participants will be in a listen-only mode. Following company prepared comments, we will conduct a question-and-answer session. [Operator Instructions] As a reminder, this conference call is being recorded and the webcast will be available on the Cooper-Standard website for replay later today. I would now like to turn the call over to Roger Hendriksen, director of Investor Relations. Please go ahead.

Roger Hendriksen: Thanks, Chloe and good morning, everyone. We appreciate you taking the time to join our call today. The members of our leadership team, who will be speaking with you on call this morning are Jeff Edwards, Chairman and Chief Executive Officer and Jon Banas, Executive Vice President and Chief Financial Officer. Before we begin, I need to remind you that this presentation contains forward-looking statements. While they are made based on the current factual information, and certain assumptions and plans that management currently believes to be reasonable, these statements do involve risks and uncertainties. For more information on forward-looking statements, we ask that you refer to Slide 3 of this presentation and the company’s statements included in periodic filings with the Securities and Exchange Commission.

This presentation also contains non-GAAP financial measures. Reconciliations of the non-GAAP financial measures to their most directly-comparable GAAP measures are included in the appendix to the presentation. With those formalities out of the way, I’ll turn the call over to Jeff Edwards.

Jeffrey Edwards: Thanks, Roger and good morning, everyone. How are you doing? We appreciate the opportunity to review our first quarter results and provide an update on our business and the outlook going forward. So, to begin on Slide 5, I’d like to highlight some key first quarter data points that we believe are reflective of our continued strong commitment to operational excellence and our core company values. In terms of product quality, 97% of our customer scorecards were green in the quarter. For new program launches, our customer scorecards were 96%. So, we continue to achieve outstanding operational performance and this is allowing us to deliver exceptional value to our customers. In addition, the safety performance of our plants continues to be excellent as well.

During the first quarter, we had a total incident rate of 0.38 reportable incidents per 200,000 hours worked. That’s well below the world-class benchmark of 0.47. Leading this outstanding safety performance were the 39 plants that had a perfect safety record of zero incidents through the first three months of the year. I want to recognize the teams at these plants for their ongoing commitment and leadership as we continue to strive for our ultimate safety goal of zero incidents for the entire company. In terms of cost optimization, we had another solid quarter with our manufacturing and purchasing teams delivering $19 million of savings through lean initiatives and other cost saving programs. This improved efficiency combined with our enhanced commercial agreements, enabled us to improve our gross profit margin by a solid 300 basis points compared to the first quarter of last year.

While we have more work to do, we continue to make progress toward our profitability targets. Finally, we’re continuing to leverage world-class service, technical capabilities and our award winning innovations to win new business. During the first three months of 2024, we were awarded $66 million in net new business awards. Importantly, we continue to partner with our customers to design and develop new technologies for some of their most important new vehicle platforms, including ice, hybrid and battery electric vehicles. Turning to Slide 6. another indication of our customer relationships valued technology and world-class service are the product and service awards we frequently receive. We’re very pleased once again, to be named as a Supplier of the Year for General Motors, one of our top global customers and I think probably, one of the most coveted awards in our industry.

While the award was announced and presented during the first quarter, it’s an annual award that is reflective of our performance throughout the past year. This is the seventh consecutive year that we’ve received this prestigious GM award, and we look forward to continuing and expanding our relationship with them going forward. Slide 7, while providing our customers with world-class products, technology and service, that’s certainly what we do. Our commitment to doing business the right way with uncompromised honesty, transparency, integrity and maintaining a continual focus on being a good corporate citizen says even more about who we are. We’re pleased to announce that in just a few weeks, we will once again, be publishing our annual corporate responsibility report.

It covers a wide range of topics, including products, financial performance, corporate governance and environmental stewardship among others. We hope that you will take the opportunity to read through the report and provide any feedback you might have or you might like to share. Your input will be helpful to us as we strive toward our company purpose of creating sustainable solutions together. Now, let me turn the call over to Jon to review the financial details of the quarter.

Jonathan Banas: Thanks, Jeff and good morning, everyone. In the next few slides, I’ll provide some details on our financial results for the quarter and discuss our cash flows, liquidity and aspects of our balance sheet. Before I get into the financials, as you may have seen in our press release, effective from the beginning of this year, we changed our operating management structure and reporting segments to a product line basis rather than the former geographic basis. We believe the new structure will be more efficient and we expect it to help us increase value creation going forward. Jeff will talk more about this in a few minutes. Now, looking at the first quarter’s results. On Slide 9, we show a summary of our results for the first quarter of 2024 with comparisons to the same period last year.

First quarter 2024 sales were $676.4 million, a slight decrease of 0.9%, compared to the first quarter of 2023. The decrease was driven primarily by the divestiture of our technical rubber business in Europe during the third quarter of last year and a smaller divestiture of our stake in a joint venture in Asia. Excluding the impact of these divestitures, which represented $13 million of sales in the first quarter of 2023, net sales for the first quarter of last year would have been $669 million. On that basis, our sales for the first quarter of 2024 would have been up around 1% year-over-year, outpacing global automotive production. Gross profit for the first quarter was $61.6 million, or 9.1% of sales. This compares to a gross profit of $41.8 million, or 6.1% of sales in the first quarter of 2023.

Adjusted EBITDA in the quarter was $29.3 million, compared to $12.5 million in the first quarter of last year. The year-over-year improvement was driven primarily by favorable volume and mix, enhanced commercial agreements and lean savings achieved in manufacturing and supply chain, all partially offset by ongoing inflation headwinds in areas such as energy and labor costs, as well as the impact of unfavorable foreign exchange. On a U.S. GAAP basis, the net loss for the quarter was $31.7 million, compared to a net loss of $130.4 million in the first quarter of 2023. As you recall, our results for the first quarter of 2023 included a significant loss on refinancing and extinguishment of debt. Excluding this and other special items and the related tax impact from both periods, adjusted net loss for the first quarter of 2024 was $30.6 million or $1.75 per diluted share, compared to adjusted net loss of $46.2 million or $2.68 per diluted share in the first quarter of 2023.

Our capital expenditures in the first quarter totaled $16.8 million or 2.5% of sales, compared to $29.3 million or 4.3% of sales for the first quarter of last year. We continue to have discipline around capital investments, which remain primarily focused on customer launch readiness and maximizing returns on invested capital. Moving to slide 10. the charts on slide 10 provide additional insights and quantification of the key factors impacting our results for the quarter. For revenue, favorable volume and mix, including net customer price adjustments, increased sales by $8 million versus the first quarter of 2023. The impact from the technical rubber divestiture was $13 million in the quarter and foreign exchange mainly related to the Chinese RMB and the Euro, further reduced sales by a net $1 million versus the same period last year.

For adjusted EBITDA, lean initiatives in purchasing and manufacturing contributed $19 million year-over-year. Favorable volume mix and net price adjustments, as well as other cost recoveries drove a combined $15 million of profit improvement for the quarter. And material cost improvements were a further benefit of $1 million. These positive contributors were partially offset by general inflation, including energy, salaries and wages, transportation and other costs amounting to $9 million in the quarter and another $9 million of unfavorable foreign exchange, primarily related to the strengthening of the Mexican peso and the Polish zloty against the U.S. dollar. Moving to Slide 11. in terms of cash flow and liquidity, cash used in operating activities was approximately $14 million in the first quarter of 2024, as seasonal changes in working capital and the timing of compensation-related payments offset improved cash earnings.

As mentioned earlier, CapEx was around $17 million in the first quarter of 2024 resulting in a net free cash outflow of approximately $31 million. We ended the first quarter with a cash balance of approximately $114 million. Combined with $167 million of availability on our ABL, which remained undrawn, we had solid total liquidity of approximately $282 million as of March 31st, 2024. Regarding our credit facilities, we are pleased to announce that we just signed an extension on our ABL through May of 2029. The agreement and extended term ensures that we have the flexibility we need to continue executing our plans and initiatives to improve the financial strength of the company, drive profitable growth and enhance value over the long-term. Based on our current outlook and expectations for light vehicle production, our improving operating efficiencies, further cost reduction initiatives and the continuing benefit from enhanced commercial agreements with our customers, we expect to generate positive free cash flow for the full year.

And based on that outlook, our current total liquidity position, we believe we have sufficient resources to execute the business and pursue our growth objectives for the foreseeable future. Let me turn it back over to Jeff.

Jeffrey Edwards: Thanks, Jon. And over the next few minutes, I’d like to provide you with some insights into our change in operational management structure from a regional basis to a product line basis and how this change fits in the overall strategy, and how it will drive some significant cost improvements in our business. So, please turn to Slide 13. last year, our global leadership team outlined and refined four key strategic imperatives to accelerate growth and maximize the long-term value of our company. Through relentless focus on these imperatives and a lot of hard work, we are definitely making progress. But we know we have to be more aggressive, more agile, certainly more responsive to our markets and our customers if we’re going to get to the next level and achieve our long-term objectives.

The change to product-based management is intended to do just that. So, please turn to slide 14. The new structure, which was put in place effective January 1 is already providing key benefits, including establishing complete P&L ownership and accountability for each product line, optimizing allocation of human and capital resources, streamlining operations and engineering execution, and enabling us to more quickly deliver value-add innovations to our customers. In addition, the new structure will allow each product group to more fully develop and execute separate customized strategies suited to the needs of their specific markets. Turning to slide 15. in our sealing business, we’re certainly working from a position of strength as the global leader in the market.

We will look to expand our market share and competitive advantage through technology and customer service, enhancing customer relationships, as well as pursuing opportunistic market opportunities in support of our customers. We expect to improve profitability and return on asset by rightsizing costs within our operations while aligning capital investments with high-growth opportunities. Turning to slide 16. in our fluid business, we see greater opportunity for accelerated profitable growth given the highly-technical requirements for thermal management in hybrid and electric vehicles. As we bring some of our recently-announced innovation to market, we expect to significantly increase our average content per vehicle, as well as expand our total addressable market.

Patented innovations will also improve our competitive advantage and enable market share gains. We believe we can be competitive in building solid fluid handling business in China based on the proprietary technology enhancements we provide to electric vehicles. Turning to slide 17. finally, with new organization structure in place, our operations are already becoming more streamlined and more efficient. As automotive production levels have not rebounded as quickly as many had expected, it’s certainly an imperative that we do so. We’ve identified opportunities to further optimize costs by eliminating redundancies, automating processes and leveraging technology. Beginning later this quarter, we’ll be implementing a plan to reduce our salaried workforce globally.

The actions are expected to save between $20 million to $25 million in 2024 and between $40 million and $45 million on a full-year annualized basis next year. The anticipated savings are expected to provide a payback on related restructuring costs in six months. Further, we expect the savings will enable both operating segments to approach, if not achieve double-digit EBITDA margins as we exit 2025. As these initiatives were not contemplated when we developed our initial plan for the year, successful implementation and the related cost savings could represent an upside to our 2024 full-year guidance, certainly assuming industry production volumes hold at planned levels. As we typically do, we expect to provide a formal update on guidance in conjunction with our second quarter results.

So, we want to thank our customers and all of our stakeholders for your continued confidence as we support and support as we work through these turbulent times in our industry. And we thank you all for joining the call today. This concludes our prepared remarks. So, let’s move into Q&A.

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Q&A Session

Operator: Thank you. [Operator Instructions] Our first question comes from the line of Michael Ward from Freedom Capital. Your line is now open.

Michael Ward: Thank you very much. Good morning, everyone. Jeff when you look at this, the actions you’re taking, it sounds like more details will come in the second quarter. but there’s a very quick payback. Is that because the nature of it is just salary headcount reductions?

Jeffrey Edwards: Yes. thanks. Good morning, Mike. I appreciate the question. Yes, that’s the fact. Obviously, a lot of changes within our company, but continued challenges within the industry, right and we’ve done a lot of things to realign with today’s reality. The new organization structure really has put the cost of running these businesses directly in the hands of those that are running it. So, the support infrastructure, say down the left-hand side of the chart certainly isn’t as required as it once was as we were building the organization. And so, we’re taking these measures to dramatically reduce our costs, make ourselves a lot more agile, make our decision-making what it needs to be to support our customers and frankly move us a lot closer to the double-digit EBITDA and double-digit ROIC objectives that we have to a point that we’ll be there next year with those particular objectives as certainly we exit 2025, that’s what we believe.

Michael Ward: And what percentages of your global-salaried headcount?

Jeffrey Edwards: We haven’t announced that detail, Mike.

Michael Ward: Okay.

Jeffrey Edwards: But it’s a substantial component of the total cost, I would tell you that. I just assume not get into the percentages.

Michael Ward: Yes. That’s fine.

Jeffrey Edwards: We’re talking about folks here. so, I’d just keep it simple as I’ve answered it.

Michael Ward: Yes, I got you. So, given your current year initial guidance of adjusted EBITDA of 180 to 210. Now, if all things being equal, we could be looking at somewhere in the 200 to 235 range is what you’re saying when you get this thing done this year?

Jeffrey Edwards: Yes. we’ll describe that to you like we always do as we exit the Q2.

Michael Ward: In 2Q.

Jeffrey Edwards: but yes, your range would be accurate as we sit here today. I guess, the biggest issue that everybody has, we’re not the lone ranger here obviously is what are the volumes going to be. I mean if we knew that then I can answer your question.

Michael Ward: Okay. And I assume the cash cost for that restructuring are in line with, it sounds like you’re looking at a $25 million charge and that’ll be the cash cost as well, but a pretty quick payback?

Jeffrey Edwards: Yes. actually, from a cash point of view, it will be a cash-flow positive even for 2024.

Michael Ward: Okay. Jon, on the FX, you mentioned Mexico and Poland, it seems like a pretty big hit on a relative basis as far as the impact. I mean, it took off almost a point and a half of margin. What were some of the circumstances there and is that continued in second quarter?

Jonathan Banas: Thanks for the question, Mike. The dynamic here is that we operate in various countries, where the local cost base isn’t tied with the revenue stream. So, for example, in Poland, we manufacture our products there locally, so the cost base is in zloty. However, the regional trading currency is the euro. So, we sell in the euro base, right. So, as the zloty would appreciate against the euro and or the U.S. dollars, our costs go up in relative terms and that’s really what’s driving it. Similar to the peso, whereas we manufacture in Mexico for certain of our shipments back into the U.S. — the revenue was tied to the U.S. Dollars versus the Peso. So, when you think about coming into last year, the peso was average in the quarter about $18.66, 18 pesos to the dollar.

It’s now down the average $16.97. So, as the peso continue to strengthen, again, our cost base rises relative to the selling currency. And similar on the zloty, Czech Koruna to a minor extent, in the RMB, I mentioned on the top line as well. So that’s really what’s going on. We do place hedges against our fixed costs, but you don’t hedge against 100% of that. So, it takes a little bit bite out of it, but not completely.

Michael Ward: Is that something you can recover or do you just adjust with price going forward?

Jonathan Banas: Certain of our commercial arrangements have FX components to them as far as indices in recovery, but not all of them. So, we’ll never be able to recover 100% of that.

Michael Ward: Okay.

Jonathan Banas: but we’re going back to our customers as these things exacerbate or continue to stay elevated to reengage in conversations.

Michael Ward: And just one last thing, Jeff, you kind of alluded to it. but it sounds like there’s a — with the industry trying to push and accelerate production of hybrids. I think, you used to provide some sort of a content walk between ice vehicles, hybrids and all electric. What type of content are we looking at with as a push on these hybrids, particularly, I guess, for the fluid side of it relative to ice and what you’re over the next say 12 months to 18 months?

Jeffrey Edwards: Yes, it’s a good question, Mike. So, if we use ice as the baseline to your question and if we would go from an ice vehicle to a hybrid vehicle, meaning our customers would and then we would be supplying the fluid handling for that particular hybrid, it would almost double our content per vehicle.

Michael Ward: So, hybrids 2x of ice and then BEV is even higher than that?

Jeffrey Edwards: We actually — the EV would be about 20% — 20% to 30% higher is the number we’ve used with you in the past.

Michael Ward: Okay. Higher relative to ice or hybrid? You deal with hybrid then.

Jeffrey Edwards: Ice, yes. So, hybrid is definitely the higher content per vehicle solution for Cooper-Standard. and so, the fact that we’re talking about more hybrids out there, that’s good news for us.

Michael Ward: Very good. Thank you.

Jeffrey Edwards: Okay.

Operator: Our next question comes from the line of Kirk Ludtke from Imperial Capital. Your line is open.

Kirk Ludtke: Good morning, Jeff, Jon, Roger. Appreciate the call. Just with respect to the March quarter, were there any commercial settlements from prior periods in there?

Jeffrey Edwards: No, Kirk. I think we’re — as we talked in the last call, we detailed all that for you. Look, as we get into ’24 and beyond, there’s always commercial conversations going on. So, we’ll have settlements each quarter and there always is. But nothing to the magnitude of what we’ve talked to you about last year. So, I would say, let’s just call it business as usual in ’24 as it relates to pricing.

Kirk Ludtke: Got it, perfect. I appreciate it. And then with respect to the — you mentioned that there’s — you see some upside to the earlier ’24 guidance. Are you still using the same production estimates that you gave us last quarter?

Jeffrey Edwards: Yes. the volumes that we talked about are unchanged. As you know, the first quarter was a bit challenging as it got started from a volume point of view. But then, we saw some recovery in February and March was I guess what we were hoping March would be is how I would describe it. So, a little bit of a slow start, but a strong March helped the overall number. And then our comments related to the rest of the year, we typically take a shot at that after the second quarter. We have a little bit better view of quarter three and four at that point. and then we’ll adjust anything for you at that stage is how we’ve done it for a decade. So, we’ll continue to do it that way.

Kirk Ludtke: Got it. Thank you. With respect to the geographic reporting, were you EBITDA positive in all the regions again this quarter?

Jeffrey Edwards: Yes.

Kirk Ludtke: Great. And then lastly, on the new business, it appears to be ramping. Are you — can you provide the percentage of your first quarter revenues that were generated from electric, hybrid or both vehicles?

Jeffrey Edwards: Yes. I don’t have that in front of me, Kirk, at this point. I mean, we certainly can provide it. I’m sure Roger can get back to you with that.

Kirk Ludtke: Okay. Is it meaningful?

Jeffrey Edwards: I think we continue to progress well as we manage what that future is. I mean, it certainly has been moving around on us, but we haven’t seen a whole lot of our core business cannibalized, if I could say it that way. So, that’s good. And as we have been told by our customers that certain EVs are being pushed out as much as two years on some new business that we already have been awarded. That wasn’t a significant hit to us, just because we hadn’t spent a bunch of money yet. And so, we’re just on hold there. And in the meantime, we’ll continue to run what we already run longer. So, that’s probably going to be a bit of a benefit too from an asset point of view. So, I guess there’s put and takes. but overall, I’m not complaining.

Kirk Ludtke: Awesome. I appreciate it. Thank you very much.

Jeffrey Edwards: Okay.

Jonathan Banas: Thanks, Kirk.

Operator: Our next question comes from the line of Ben Briggs from Sonic Financial, Inc. Please go ahead.

Ben Briggs: Good morning, guys. Thank you for taking the questions. So, I just want to touch on top-line revenue growth for a minute. I know that on a GAAP basis this quarter, your revenue was down, let’s call it 1% year-over-year. but there was a little bit of noise in there. And if you call it on a — call it like a same customer revenue line, you guys were actually up a little bit. Can you give me a little bit more clarity on what the trajectory of, call it, that same customer revenue should look like and what the drivers are going to be? Is it going to be pricing? Is it going to be more new business wins? Or is it going to be a combination of both?

Jeffrey Edwards: Yes, this is Jeff. So, I think what Jon went through with you was, we had a couple transactions. So, we sold a couple of businesses that resulted in a bit of a top-line down. But when you compare apples-to-apples and you look at the industry of automotive versus our automotive revenue, we were actually up for the quarter slightly. And so, I think as we look without getting into any more details about second through fourth quarter this year, I think that is what we think is going to continue to be like. So, I would say our business plan is pretty much spot on at this stage. I wouldn’t think the numbers are going to drift much differently as we go through second, third and fourth quarter. I mean obviously, each month changes a bit. but overall, we still expect to outgrow the markets that we serve in automotive. I think that’s the key point.

Ben Briggs: Okay. That’s helpful. Thank you. So, since your revenue is outgrowing the markets that you serve, is it fair to say that you’re winning market share?

Jeffrey Edwards: Yes. I think that’s what we’re saying and we with the announcement here around sealing and fluid handling going forward given the innovation we have and given the customers’ excitement about it and what I just talked to the previous caller about in terms of content per vehicle going up especially in our fluid business, we expect to continue to gain share.

Ben Briggs: Great. That’s helpful. Moving on to gross margins, you guys are obviously up, call it, 300 basis points on a year-over-year basis, down a little bit. but let’s call it close to flat sequentially. Do you guys see gross margin hitting the double digits, call it 10% plus, during the current fiscal year or is that something that we should think about more 2025 and beyond?

Jeffrey Edwards: This is Jeff. The answer is yes. And then I was pretty clear about what I think 25% is going to be. So, we should be back to double-digit EBITDA and ROIC as a company as we exit ’25.

Ben Briggs: All right, great. That’s very helpful. And then last thing from me is I know that your June on the third liens, the June interest payment, you guys elected to pay cash there. When do you need to formally elect whether your December interest payments will be cash or PIK?

Jonathan Banas: Hey, Ben. this is Jon. We have to elect that six months in advance. So really, by June 1st, essentially, we’ll be making that election on both the first lien and the third-lien loans.

Ben Briggs: Okay. Thanks very much. I appreciate you guys taking the questions.

Jonathan Banas: All right. Thanks, Ben.

Operator: Our next question comes from the line of Brian DiRubbio from Baird. Please go ahead.

Brian DiRubbio: Good morning, gentlemen. A couple of questions for you. Just, Jon, are you going to put out recast the segment results with the new segment structure in place?

Jonathan Banas: Yes. when we issue our 10-Q later today, Brian, you’re going to see the segment results for not only this first quarter of this year, but also 2023. And then each subsequent quarter, we’ll put in the historical frame of reference for you on those. We’re going to obviously get to once we get to the 10-k, there’ll be a full three years in there. We’ll go all the way back to 2022, just because of the comparative rules from SEC standpoint. So, you’ll see those coming as we publish our upcoming financials.

Brian DiRubbio: Got it. Excuse me. And then — Sorry, go ahead.

Jonathan Banas: No, I was just going to point out that you also see the previous years in the press release that we issued last night as well. So, you get the historical Q1 of last year.

Brian DiRubbio: Yes, that I got it. So, just got to rewrite my model now.

Jonathan Banas: Yes.

Brian DiRubbio: Just fine. So, just on the PIK versus cash pay, I guess my question for you on that is, if you were — if you would have cash paid your coupons this year, would you still be free cash flow positive?

Jonathan Banas: Well, I gave you the general that we expect to be free cash flow positive. We don’t get into the details of what the magnitude of that is. We don’t give free cash flow guidance. So, we’ll — I’ll just leave it at that. We’re continuing to work towards obviously not having to elect that. We only have it for the rest of this year through the Q4 payment. and then that rolls off in ’25 forward. But clearly, the goal is to not add to the quantum of debt and be able to straight pay all that. So, I won’t give you the adjusted pro forma guidance on that. but we’ll just leave it at that.

Brian DiRubbio: Fair enough. Is it your expectations that you still like to do a global refi next year?

Jonathan Banas: That’s our current thinking. Of course, that all depends on the production environment, the interest rate environment and the like. But certainly, with our trajectory, what we’re thinking about in terms of continued improvements in the cost base of the business, improvements in free cash flow that that Jeff and I have been talking about here today, we think that sets us up very well to be in the market next year, but a lot of factors go into that.

Brian DiRubbio: Got it. And then final question is just on raw materials. Natural rubber and butadiene prices have been trending upward. Are we — are those mostly on a lag basis in terms of your pricing resets?

Jonathan Banas: Yes, Brian, it’s Jon again. Typically, they’re on a quarter or perhaps a two-quarter lag, same thing with our steel and aluminum buys as well. Typically, you see a quarter or two there. So, we are seeing what you described on the rubber side, but also on the steel — cold rolled steel side, we’re seeing some headwinds. When we came into 2024, we thought we’d have a slight tailwind. but now, that’s kind of been mitigated by recent commodity trends and we’re back to kind of a flat commodity environment overall for the year. That’s our current outlook.

Brian DiRubbio: Got it. And final one from me. Could you remind me what your — the cost recovery payments were last year in aggregate?

Jonathan Banas: Are you talking about the cost we were able to take out of the business?

Brian DiRubbio: No, no. What the OE sort of compensated you for the prior year inflation pressures?

Jeffrey Edwards: This is Jeff. We haven’t revealed that and we’ll keep that to ourselves, I guess, from a pricing point of view. We feel like we have done a really good job. Our customers have certainly stood up and supported Cooper-Standard’s requests. We’ve talked about the impact at the end of last year. You can see the impact that that’s had during the first quarter. Obviously, our bullish comments today about what we think ’24 could be and certainly ’25. And clearly, we’ve got our own lifting to still do. This isn’t about just how much money did we negotiate in price increases. Frankly, most of it is — it reflects the cost increases that the business went through. But I think we’re in a good position to be successful. We’re in a good position to return ourselves to the level of profitability that we need to be and to generate the type of cash we need to be generating in order to provide our customers with the consistent ongoing support we’ve always done.

and certainly, continuing to improve for our shareholder base is a part of that whole equation as well. So, we’ll keep the amount to ourselves at this stage.

Brian DiRubbio: Fair enough. Still had to ask. Appreciate the color. Thank you.

Jeffrey Edwards: Thanks, Brian.

Operator: It appears that there are no more questions. I would now like to turn the call over back to Mr. Roger Hendriksen. Please go ahead.

Roger Hendriksen: Okay. Thanks, everybody for joining the call. We appreciate your questions and the engagement. Please feel free to reach out to me directly if there are other questions that we didn’t cover or we’d like to address in more detail. Thanks, again. This concludes our call.

Operator: Ladies and gentlemen, this concludes today’s conference call for today. Thank you for your participation. you may now disconnect.