In its full-year/fourth-quarter earnings report, Cooper Tire & Rubber Co. reported decreased sales and unit volume compared to last year’s quarterly report. However, the company has “improved our product mix through a continued focus on high value-add tires, forged ahead into the original equipment (OE) space with Mercedes-Benz as a key customer, and delivered a strong cadence of compelling new products,” according to President and CEO Brad Hughes.

Cooper reported 2019 net sales at $2.75 billion, compared with $2.81 billion the prior year. Net sales decreased 2.6% to $750 million, according to the report.

Full-year 2019 unit volume decreased 3.9% compared to 2018; and fourth-quarter unit volume decreased 2.6% compared to the fourth quarter of 2018, the report says.

“Cooper has made a great deal of progress on the strategic initiatives we outlined at our May 2018 Investor Day,” Hughes said. “With a focus on the consumer, we have continued to execute a physical and e-commerce retail expansion effort that now has Cooper products available in the top five tire retailers in the U.S.

“To enhance the competitiveness of our global manufacturing footprint, we shifted production from our Melksham facility to other lower-cost plants, acquired full ownership of our Mexico facility to further develop the full potential of the plant, and opened a new truck and bus radial tire (TBR) joint venture plant in Asia,” Hughes continued. “In addition, we have enhanced our TBR tire business by launching the Cooper brand, which won key OE fitments with Blue Bird school buses. Cooper is also building out a digital marketing capability and increasing brand awareness through a new advertising campaign.

“We are optimistic about 2020 as our business model remains strong and our strategic initiatives continue to gain momentum,” said Hughes.

According to the report, full-year 2020 expectations include:

• A modest global unit volume increase compared to 2019, including in the U.S.
• Operating profit margin that improves during the year, with the second half better than the first half, and the full year exceeding 2019.
• An effective tax rate, excluding significant discrete items, of approximately 25%.
• Capital expenditures that will range between $260 and $280 million. This includes investments in Serbia and Mexico.

The report says management anticipates first-half 2020 operating profit margin to be impacted by typical seasonality and certain unique items which are included in the full-year outlook:

• Approximately $10 million of restructuring charges related to the transition at the company’s Mexico manufacturing facility, which will occur primarily in the first quarter of 2020.
• Higher manufacturing costs in Latin America, Europe and Asia related to both market conditions and the company’s footprint actions.
• Higher SG&A expenses, including the impact of the timing of advertising spend.

Expectations do not include tariff rate changes or additional tariffs that continue to be considered but have not yet been imposed. The outlook for 2020 also does not include the impact of the coronavirus, Cooper says.