Company: CPS
Filing Date: 2025-05-02
Form Type: 10-Q
Source: 0001320461-25-000087
Chunk: 93

Company: Cooper-Standard Holdings Inc.
Filing Date: 2025-05-02
Form: 10-Q
Item: Part I, Item 8
Chunk 93
---
2025 increased $12.5 million compared to the three months ended March 31, 2024. The increase was primarily driven by $10.0 million of income recognized in connection with certain royalty settlements, as well as the favorable impact of foreign currency exchange.

Income Tax Expense. Income tax expense for the three months ended March 31, 2025 was $2.7 million on earnings before income taxes of $4.3 million compared to an income tax expense of $4.1 million on losses before income taxes of $27.2 million for the three months ended March 31, 2024. The effective tax rate for the three months ended March 31, 2025 differed from the effective tax rate for the three months ended March 31, 2024 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 and other permanent items.

Segment Results of Operations

Our business is organized in two reportable automotive segments: Sealing Systems and Fluid Handling Systems. 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 March 31, 2025 Compared with Three Months Ended March 31, 2024 

Sales

Three Months Ended March 31,Variance Due To:20252024ChangeVolume/Mix*Foreign Exchange(Dollar amounts in thousands)Sales to external customersSealing systems$344,311 $351,279 $(6,968)$3,767 $(10,735)Fluid handling systems303,998 305,515 (1,517)2,840 (4,357)Total for reportable segments$648,309 $656,794 $(8,485)$6,607 $(15,092)

* Net of customer price adjustments, including recoveries.

Sealing systems. The variance in volume and mix, including customer price adjustments, was driven by higher customer volumes. The unfavorable foreign currency exchange impact was driven by a $3.7 million impact of the Brazilian Real, a $3.6