Cooper-Standard Holdings Inc.

cash balance of approximately $106 million. Combined with $149 million of availability on a revolving credit facility, which was undrawn at quarter end, we had solid total liquidity of approximately $255 million as of March 31st, 2023. Based on our current outlook and expectations for light vehicle production, commercial support in the way of sustainable pricing from our customers, and demand for our products, we believe our current cash on hand, expected cash generation, and access to flexible credit facilities will provide sufficient resources to support our ongoing operations. That concludes my prepared remarks, so let me turn it back over to Jeff.

Thanks, John. Over the next few minutes, I'd like to provide you with an update on some of our commercial initiatives that are intended to ensure that we will be adequately compensated for the value we offer our customers. I will also highlight some of our strategic initiatives that we believe are moving us forward to significant transformation as a company, significantly elevating our ability to deliver even further value that our customers need and are willing to pay for. Then I'll conclude with a few comments on our outlook for the remainder of the year. So please turn to slide 12. We're continuing to work collaboratively with all of our customers to recover incremental costs related to inflationary pressures and establish sustainable pricing that will enhance quality of earnings and value creation over the long term. During the quarter, we further limited our risk exposure from commodity and material costs by initiating index-based agreements with additional customers. As it relates to commodity volatility, We believe we are now better positioned than we've ever been before. As it relates to non-commodity inflation and sustainable pricing, we're continuing negotiations with all customers. Negotiations have been constructive and given the value that our products and services provide them, our customers have been very supportive. While negotiations are ongoing, we expect to achieve further positive outcomes that will drive improving financial results going forward. We have also been working with our customers to improve cash flow. As part of the progress to date, we've been able to implement more favorable terms on the trade receivables and on the repayment of customer-owned tooling. We're making solid progress and anticipate further good news in coming quarters as these agreements are implemented. Turning to slide 13. So part of what gives us confidence in our ongoing commercial discussions is the added value and expertise we provide our customers through the strategic integration of advanced digital tools in our engineering and design process. By using tools such as Design by Analysis, Virtual Validation, and our AI-based Formula Link tool for compound development, we significantly sped up our overall design process and we've reduced our engineering costs. These advancements have been critically important in the rapid industry transition to new energy vehicles. is we're now able to design and deliver highly complex systems and optimized technical solutions faster. We are winning new business as a result. In addition, we're increasingly being recognized by our customers as a valued technology partner in design, functionality, and sustainability. We've also invested in advanced proprietary digital tools to enhance manufacturing efficiency. Our Pulse OEE system, our wireless asset tracker, and LiveLine, which is our AI-based automated process control system, are a few examples. These are enabling us to reduce scrap, improve efficiency in our secondary operations, plan and conduct maintenance more effectively, and really improve our overall asset utilization. Combined with our suite of digital tools, we've been able to partially, as a partial driver of the reductions in our SG&A expense and fixed manufacturing costs over the past few years. But we believe there is even more opportunity ahead as we leverage these advanced tools and technical capabilities to grow and optimize our business. They're allowing us to expand into adjacent and complementary product lines, as we are now doing in our fluid business. And they're also enabling us to provide incremental value for our customers through more highly advanced, technically sophisticated products and services, which we believe will support more sustainable pricing moving forward. Consistent with our company mission, we believe that by becoming the first choice of the stakeholders we serve, in this case our customers, we will ultimately maximize our value creation opportunities. Turning to slide 14. As you know, each year we publish our corporate responsibility report to provide details on the way we are servicing various stakeholders. This year's report, which we have titled Creating Sustainable Solutions Together, will be available online within the next two weeks. The report will provide you with many insights regarding not only what we do, but who we are and the values that guide us as individuals and as a company every day. We highly recommend you check out the report. It will be certainly worth your time. Turning to slide 15, now I will conclude our prepared remarks this morning with a few thoughts on our outlook for the rest of 2023. First, I want to highlight that we fully expect to achieve significantly improved financial results in each of the remaining quarters of the year. Our initial plan and full year guidance anticipated that the first quarter would be the toughest given the expected timing of our commercial settlements. So that is consistent with our plan. Our financial results are very dependent upon industry production volumes and specifically the production volumes from our top customers and key platforms in each region. We continue to see a lot of change in industry production forecasts and customer production schedules, so that certainly makes planning a bit difficult. But our current outlook for production volume remains positive and anticipates continued modest year-over-year growth overall, driven primarily by increases in Europe and in North America. The outlook for inflation is a moderate headwind. We currently expect moderate inflationary pressures will continue through the remainder of the year and costs will remain at elevated levels. Recent reductions in global oil production and tight labor availability in certain markets may represent inflationary risks to our outlook if they continue. On the commercial side, We expect to successfully advance customer negotiations in the remainder of the year to further offset inflation and establish sustainable pricing in all of our segments. As we saw in the first quarter, however, the timing for closing any customer agreement is certainly more difficult to predict. Overall, our outlook for 2023 remains very positive. We will plan to give a more detailed update and formal guidance as we typically do in conjunction with our second quarter results. I want to thank our global team of employees for their continued dedication and their commitment to excellence and delivering value for our customers and all stakeholders. I also want to thank our customers for their continued trust, confidence, and support in managing through this challenging industry environment and for their increasing recognition of the value of our products, technologies, and services we provide them. I believe we are approaching an inflection point in the relatively near term as we benefit from improved volume and enhanced commercial agreements with sustainable price increases. Over the longer term, we believe we will drive increasing value by continuing to transform our products, our services, and our company with advanced digital tools and technology that meet and exceed the demands of today's mobility industry. This concludes our prepared remarks, so let's open the call for Q&A.

Thank you. Ladies and gentlemen, if you would like to ask a question, please press star followed by 1-1 on your telephone. If you are using a speakerphone, please pick up on the handset before entering your request. One moment, please, as we assemble the queue for questions. Our first question comes from Michael Ward of The Benchmark Company. Your line is now open.