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 14%-15%. Capital-intensive business with about $170 million annual capital expenditure (capex) for manufacturing maintenance and repairs. Owned by Koch Industries Inc., which is among the world?s largest privately held corporate groups with

...We expect Guardian Industries Resources LLC will maintain strong credit metrics through 2024 and for the foreseeable future. We expect S&P Global Ratings-adjusted net debt to EBITDA of 0x with excess cash of over $350 million. The financial metrics result from conservative financial policies by the company and its parent Koch, and lower debt than most other building materials producers. Currently, the company operates with a $1 billion line of credit, which is unrated. As of Dec 31, 2023, company has full availability on its line of credit. Therefore, we do not forecast any material increases in borrowing in the near term. Our base case assumes flat to low-single-digit percent growth in repair and remodeling, and residential construction spending, which will have a positive effect on demand volumes. We expect some volume growth in SRG business due to a modest increase in demand, with roughly flat unit prices, and our expectations for regional GDP growth, vehicle sales, and U.S. nonresidential...

Full Report