Guardian Industries Resources LLC

Overview Key strengths Key risks Profitable U.S.-based global glass producer with a diverse geographic footprint and low-cost manufacturing base. Exposed to cyclical demand in automotive and construction end markets as well as fluctuating commodity and energy costs, resulting in moderate earnings volatility. Strong position as one of the world?s largest providers of high-value coated plastics to automotive original equipment manufacturers (OEMs). Subject to stiff price competition in its commodity glass markets, worsened by the company?s exposure to the current volatility in Eastern Europe. Strong overall EBITDA margins at 17%-18%.Owned by Koch Industries Inc., which is among the world?s largest privately held corporate groups with high diversity and well-performing businesses across a number of industries. Capital-intensive business with about $170 million

...We expect Guardian Industries Resources LLC to maintain strong credit metrics through 2023 and for the foreseeable future. We expect S&P Global Ratings-adjusted net debt to EBITDA of 0x and excess cash of over $500 million. The financial metrics result from conservative financial policies of the company and its parent Koch. Currently, the company operates with a $1 billion line of credit, which is not rated. As of Dec. 31, 2022, company has full availability on its line of credit and we do not forecast any material borrowing in the near term. Our base case assumes decline in repair and remodeling, as well as residential construction spending, in line with our forecast for a mild recession in several nations later this year. This will have a negative effect on demand volumes. In FY 2022, the company divested two manufacturing units, a float glass manufacturing facility in Russia and a glass fabrication facility in the U.S. As a result, we forecast Guardian glass demand volumes to decrease...

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