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Cooper-Standard shares plunge 20% after hiring Goldman Sachs for financial advice

The company posted a net loss of $61.4 million in the first quarter, according to its earnings report last month. Its gross profit plummeted nearly 68 percent to $21.5 million on revenue of $613 million, which was down 8 percent year over year.

Cooper-Standard reported total debt of $1.03 billion, $980 million of which is long-term debt, as of March 31.

The company had been talking publicly about refinancing its capital structure for the past six months, said equity research analyst Mike Ward, and Tuesday’s announcement should not have been a surprise to investors.

“It’s refinancing, every company does this,” said Ward, who covers the automotive sector for New York City-based Benchmark Co. “There’s nothing unusual about this. They have plenty of liquidity.”

Cooper-Standard CFO Jon Banas said in the earnings call that the company’s nearest debt maturity is November 2023 on its Term Loan B.

“The company is focused on extending the maturity date of some of the debt in our capital structure this year,” Banas said. “We are monitoring the markets and are considering all refinancing options available to us.”

Meanwhile, the company – like the rest of the auto supply base – is looking to recoup losses related to inflation and parts shortages. It racked up $100 million in related losses, it said last November, when automakers had been less willing to share the pain with price increases. Since then, OEMs have generally been more willing to come to the table.

“The vehicle manufacturers have no interest in letting the supplier go bankrupt, because then the contracts go to the court,” Ward said.

Cooper-Standard ranks No. 76 on the Automotive News list of the top 100 global suppliers with worldwide sales to automakers of $2.4 billion in 2020.

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