American Tire Distributors (ATD) booked a sharp year-over-year gain in EBITDA and revenue in 2Q21, building on the company’s earnings momentum, according to two sources familiar with the matter.  

The issuer’s adjusted EBITDA for the three-month period ended 3 July jumped to USD 86.1m, compared to USD 64.2m in 2Q20, the sources said. The boost was driven by overall growth in the automotive industry as more people returned to work and began traveling, sources added.  

Quarterly gross margin also improved on the back of price inflation in the auto space, which the company expects to maintain going forward. 

Revenue for the quarter rose 26% year-over-year to USD 1.437bn, bolstered by volume and pricing increases.  

As of 3 July, leverage shook out to 5.75x based on USD 278m of LTM adjusted EBITDA and USD 1.6bn of total debt. The cash balance during the same period totaled USD 29m.  

ATD also executed a USD 0.9m sale leaseback of USD 0.9m in the quarter, said one of the sources.  

During today’s earnings call, the company provided updated credit metrics in which leverage trended lower as EBITDA in the month improved. At 31 July, the company’s leverage totaled 5.57x through USD 287m of LTM adjusted EBITDA, one of the sources added.  

ATD’s USD 795m Libor+750bps term loan due 2024 is quoted today at 100/100.5, in line with recent levels, according to one of the sources. The USD 150m Libor+600bps FILO exit term loan due 2023 is quoted today at 99.7/100.2, in line with recent levels. ATD’s reorganized equity is quoted today at 60/62. 

Messages left with American Tire were not returned.

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