Cooper-Standard’s debt and equity dipped after the auto supplier reported weak 3Q21 earnings and reduced full-year guidance for 2021 after market close yesterday (3 November). 

The company starkly lowered its outlook for 2021 EBITDA to negative USD 10m – negative USD 25m,  from previous expectations of positive USD 75m–USD 105m. Revenue is now expected to come in at USD 2.3bn–USD 2.34bn for the year, from previous estimates of USD 2.45bn–USD 2.6bn. 

Cooper-Standard’s USD 400m 5.625% senior unsecured notes due 2026 fell to 76.75 to yield 11.911% today, from 80.25 to yield 10.82% yesterday before the earnings report, according to MarketAxess.

The borrower’s USD 323m Libor+ 200bps term loan due 2023 is quoted today in the 90.5/92.5 context, compared to trades yesterday at 92.575/94.375, added a trader.

The company’s equity, meanwhile, caved 10.6% to USD 24.77 and a USD 470.6m market cap from yesterday’s close.

For the quarter ended 30 September, revenue totaled USD 526.7m, compared to USD 683.2m for the same period last year. Adjusted EBITDA shook out to negative USD 33.9m, down from positive USD 64.1m in 3Q20. 

Cooper-Standard’s earnings fumbled due in part to the chip shortage and other factors such as supply chain constraints, higher commodity costs, rising wages, general inflation and labor availability.

Based on the company’s new estimates, Cooper-Standard could burn USD 280m–USD 300m of cash in 2021 taking the negative EBITDA estimates less USD 100m of capex, USD 40m–USD 45m of cash restructuring costs, USD 70m of interest expense, USD 50m of working capital charges and USD 10m of cash taxes. 

Based on previous expectations, Cooper-Standard was projected to have a cash outflow of USD 170m–USD 220m this year, as reported.

As of 30 September, liquidity totaled USD 380.2m through USD 253.3m of cash and USD 126.9m of revolver availability. 

2021 Debtwire