Cooper's Hawk Intermediate Holding LLC

Overview Key strengths Key risks Above-average sales volumes due to recurring customer visits driven by its wine club subscription model. Very small operator in the intensely competitive, fragmented casual dining restaurant industry. Differentiated offering and menu variety appeals to a wide customer base. Elevated commodity and labor costs put pressure on earnings. Highly leveraged capital structure and aggressive financial policy due to financial-sponsor ownership. Cooper?s Hawk Intermediate Holding LLC?s operating performance continues to recover from the pandemic as restaurant staff becomes more available, allowing higher dining room capacity to handle rising customer traffic. We expect the company?s credit metrics to improve this year as sales volumes grow, driving better operating leverage that contributes to double-digit percentage EBITDA growth. Still, the

...Weak credit protection metrics leave limited room to absorb performance downturns. Cooper's Hawk Intermediate Holding LLC's operating performance continues to recover from the pandemic as restaurant staff becomes more available, allowing higher dining room capacity to handle rising customer traffic. We expect the company's credit metrics to improve this year as sales volumes grow, driving better operating leverage that contributes to double-digit percentage EBITDA growth. Still, the company's S&P Global Ratings'-adjusted leverage will likely remain elevated in the high-8x area and EBITDA interest coverage will remain below 2x. Moreover, our cash flow forecast assumes Cooper's will have a cash deficit as it invests heavily in new unit growth, leaving debt levels...

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