Good morning, ladies and gentlemen and welcome to the Cooper-Standard Fourth Quarter and Full Year 2020 Earnings Conference Call. During the presentation, all participants will be in listen-only mode. Following company prepared comments, we will conduct a question-and-answer session. As a reminder, this conference call is being recorded and the webcast will be available for replay later today. I would now like to turn the call over to Roger Hendriksen, Director of Investor Relations.

Thank you, Kevin. And good morning, everyone. We appreciate your continued interest in Cooper-Standard and we thank you for taking your time to participate in our call this morning. The members of our leadership team who will be speaking with you on the 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 these statements are made based on current factual information and certain assumptions and plans that management currently believes to be reasonable, they 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.

Thanks, Roger. And good morning, everyone. We appreciate this opportunity to review our fourth quarter and full year 2020 results and provide an update on our outlook for 2020 and beyond. To begin, on Slide 5, I'd like to highlight some of the key data points that we believe are reflective of our continued strong commitment to driving sustained value for all of our stakeholders. First, we're very pleased that our continuing focus and discipline around environmental, social, and governance excellence is driving action and improved results. In 2020, we meaningfully improved 5 of 6 priority ratings and began tracking a new rating from IHS. We believe that the same focus and discipline is directly related to our operating performance, which was again strong during the fourth quarter. We continue to deliver world-class results in product quality, customer service, and employee safety. At the end of the quarter, 97% of our customer scorecards for product quality were green, and 98% were green for program launches. Even more importantly, we had a record year for safety performance. For the full year 2020, our safety incident rate was our best ever at just 0.32 per 200,000 hours worked, well below our world-class benchmark of 0.60. We're certainly proud of this outstanding result, and we're particularly pleased that 29 of our plants completed the year with a perfect safety record of zero reported incidents. From a financial perspective, our initiatives to improve margins and return on invested capital continue to drive the expected improvements in our results. During the fourth quarter, our manufacturing teams delivered $18 million in cost savings through lean initiatives and improved operating efficiencies. For the full year, manufacturing cost savings totaled $65 million, which is an outstanding result when you consider all the unusual challenges presented by increased health and safety protocols, lower production volumes, and customer shutdowns. The aggressive proactive actions we implemented to reduce administrative and overhead costs beginning in 2019 and throughout the year resulted in a $12 million reduction in SGA&E expense for the fourth quarter versus the same period last year. For the full year, the reduction in SGA&E expense was $43 million. Our global supply chain optimization initiative continues to deliver as expected, driving $7 million in savings during the fourth quarter and $33 million for the full year. Combined, these initiatives were a significant factor in achieving a 470 basis points improvement in our fourth quarter adjusted EBITDA margin, despite some significant one-time impacts that Jon will describe in a few minutes. Turning to Page 6, this slide provides details around the improving ESG ratings I mentioned. Our commitment and achievement in ESG is garnering prestigious recognition, including being named to Newsweek's list of America's Most Responsible Companies for the second consecutive year. But more important than the recognition is the actual positive impact we're having on the environment, in our communities, and on the overall health and sustainability of our company. Turning to Slide 7, we're continuing our aggressive actions to right-size the fixed cost overhead burden on our business and align it with our smaller revenue base. As a recap, in 2019, we closed 10 facilities, streamlined our global manufacturing structure, and significantly reduced SGA&E headcount. In 2020, we closed or exited 14 more underperforming facilities and initiated the closure of 1 more, which we expect to be completed in the first half of this year. We also continued with further right-sizing of our headcount and aggressive limits on discretionary spending in 2020. Combined, the actions we've taken in 2019 and 2020 reduced our total fixed costs in COGS and SGA&E by more than $80 million year-over-year, far exceeding the $50 million in savings that we'd committed to in early 2020. In summary, 2020 was a very challenging year, but our culture, focus, and discipline enabled us to manage through the crisis and the challenges and continue to execute well on our major strategic initiatives. Now, let me turn the call over to Jon.

Thanks, Jeff. And good morning, everyone. In the next few slides, I will provide some additional detail on our quarterly and full year financial results and put some context around some of the key items that impacted our earnings and run rate. On Slide 9, we show a summary of our results for the fourth quarter and full year 2020 with comparisons to the prior year. Fourth quarter 2020 sales were $696.9 million, down 4% versus the fourth quarter of 2019. Excluding the impact of the recent divestiture of our business in India and certain operations in Europe, sales were up approximately 3% year-over-year. Improvement was the result of positive volume and mix in Asia and Europe, as well as favorable exchange rates. These were partially offset by reduced volumes in North America, particularly on a key light truck platform, as well as customer price adjustments, which included the impact of a number of commercial negotiations getting settled earlier than planned. That is in the fourth quarter of 2020 rather than in early 2021. Adjusted EBITDA for the fourth quarter 2020 increased to $57 million or 8.2% of sales, compared to $25.7 million or 3.5% of sales in the fourth quarter of 2019. The year-over-year improvement was driven by favorable volume and mix in Europe and Asia, as well as the significant increase in operating efficiency and the cost savings that Jeff talked about, including lower SGA&E costs and savings generated by supply chain optimization and restructuring initiatives. These positive factors were partially offset by unfavorable North American volumes and mix, higher accruals for incentive compensation, typical economics in general inflation, and customer pricing adjustments. On a US GAAP basis, we incurred a net loss of $27.2 million in the fourth quarter. This included restructuring expenses and certain non-cash asset impairments. Excluding these and other smaller items, we had adjusted net income of $3.3 million or $0.19 per diluted share for the fourth quarter of 2020, compared to an adjusted net loss of $22.3 million or $1.32 per diluted share in the fourth quarter of 2019. For the full year 2020, our sales totaled $2.38 billion, a decrease of 23.6% versus 2019. The main driver of the decline was clearly the COVID-related production shutdown that impacted our industry broadly in the first half of the year. The July 1st, 2020 divestiture of our India business and certain European operations also contributed to the year-over-year change, as did the prior year divestiture of our anti-vibration systems business. Adjusted EBITDA for the year came in at $35.7 million, compared to $201.6 million in 2019. Again, the key driver was the COVID-related industry shutdown in the first half, as well as unfavorable volume and mix, customer price adjustments, general inflation, and higher incentive compensation accruals. These significant negatives could only be partially offset by improved operating efficiency and the other cost-saving and lean initiatives we have been executing. Full year GAAP net loss was $267.6 million, which included restructuring charges, non-cash asset impairments, and other special or non-operating items. Adjusted for the net impact of these items, we incurred a net loss for the year of $141.4 million or $8.36 per diluted share. From a CapEx perspective, we ended the year at $91.8 million or 3.9% of sales. This compared favorably to a CapEx of $164.5 million or 5.3% of sales in 2019.

Thanks, Jon. Before concluding our discussion this morning, I want to share a few thoughts regarding our near-term and longer-term outlook for the global light vehicle market and for Cooper-Standard specifically. Moving to Slide 14. Our strong cadence for new program launches continues in 2021. The vehicle programs you see on the slide represent some of the most important launches of the year, but are still a small portion of the total 157 launches planned for the year. We're very pleased to have more of our innovations move into production. In 2021, 30 of our planned launches include our recent innovations. Importantly, 25 of the planned launches are on electric vehicles. Turning to Slide 15, on Slide 15, we provide a list of our planned top 10 vehicle programs for 2021. The vehicle images and names reflect the lead vehicle on each key platform. We're proud of the continued strong mix of our top programs, which maintains a heavy weighting on trucks and SUVs. The strong mix provides us with maximum opportunity to increase product content per vehicle and sales over time. Combined, these top platforms represent approximately 45% to 50% of our planned 2021 revenue. Our top platform is once again the Ford F-Series pickup truck, given its strong planned production volume, as well as our high average content per vehicle. On an unweighted basis, our CPV across these top 10 platforms is expected to be approximately $150 this year.

Moving to Slide 10. The charts on Slide 10 quantify the significant drivers of the year-over-year changes in our sales and adjusted EBITDA for the fourth quarter. For sales, the impact of divestitures was a negative $52 million. On the positive side, net volume and mix, including typical customer price adjustments, boosted sales by $7 million, while foreign exchange, mainly from the euro and RMB, contributed a positive $16 million. For adjusted EBITDA, our ongoing efforts in lean manufacturing and operational efficiency drove $18 million in cost savings for the quarter. Lower SGA&E added $12 million and savings from restructuring and supply chain initiatives added $10 million and $7 million, respectively. These improvements were partially offset by $7 million of unfavorable volume, mix and price adjustments, as well as a net $9 million from wage increases, economics, and incentive compensation accruals. Moving to Slide 11, for the full year, COVID-related shutdowns reduced our sales by $496 million. Divestitures further reduced sales by $180 million, and unfavorable volume, mix, and customer price accounted for a $55 million of the year-over-year change.

Okay. Thanks, everybody for the questions and the engagement on the call. As I said earlier, we appreciate your continuing interest in Cooper-Standard. And should additional calls come up or additional questions come up, please feel free to reach out to me directly, and we will address those as promptly as we can. We look forward to speaking with you again and again, thank you for joining the call.