Cooper-Standard Automotive bonds and stock traded down this morning in odd lots after the auto products supplier lowered revenue and EBITDA guidance for 2021, in tandem with releasing 2Q21 earnings.

The USD 250m 13% senior secured notes due 2024 traded in odd lots today at 111.75 to yield 5.868%, compared to the last trade in size on 9 July at 113.625 to yield 4.389%, according to MarketAxess. The equity traded today at USD 12.83 per share and a market cap of USD 369.864m, down 15.62% from yesterday’s close. 

The company lowered 2021 sales guidance, to the USD 2.45bn to USD 2.6bn range, compared to previous guidance of USD 2.5bn to USD 2.7bn. Adjusted EBITDA guidance is now USD 75m to USD 105m compared to previous guidance of USD 180m to USD 200m. Capex guidance is USD 100m to USD 115m compared to previous guidance of USD 100m to USD 125m.

For the quarter, sales totaled USD 533.2m, compared to USD 669m in 1Q21 and USD 340.5m in 2Q20. Adjusted EBITDA totaled negative USD 14m, compared to positive USD 38.5m in 1Q21 and negative USD 93.8m in 2Q20. 

The company cited a negative impact of roughly USD 200m from semiconductor-related customer shutdowns. 

In the near term, the issuer still faces challenges with direct exposure to the semiconductor shortage plaguing the auto industry, as reported by Debtwire. The company’s free cash flow will stay at lower levels until OEM production recovers entirely and the chip shortage resolves. But OEMs are directing production to their higher-end and more profitable models, cushioning Cooper-Standard from a larger blow to free cash flow.

The company has significant exposure to the OEM market with roughly 83% of its 2020 sales coming from OEMs and 54% of 2020 total sales coming from its three largest customers: Ford Motor Company, General Motors Company and Fiat Chrysler Automobiles. The remainder of its 2020 sales were to Tier I and Tier II automotive suppliers, non-automotive customers, and replacement market distributors. 

As of 30 June, liquidity stood at USD 452.6m through USD 335.5m of cash and revolver availability. 

2021 Debtwire