Research Update: Guardian Industries Resources LLC Downgraded To 'A-' On Expectation Of Low Earnings; Outlook Stable

Glass and auto trim parts maker Guardian Industries Resources LLC is likely to experience a 20% decline in 2020 revenues from 2019 levels, with EBITDA declining about 35% because of the coronavirus-led recession. In addition, S&P Global Ratings expects EBITDA margins to decline to about 10% after experiencing additional declines in 2018 and 2019 due to regional economic weaknesses, commodity price volatility, and tariff impacts. We expect debt leverage to reach 2x by the end of 2020 before recovering to its historical 1x-1.5x range in 2021. We are lowering our issuer credit rating on Guardian to 'A-' from 'A' to reflect higher debt leverage and its weaker earnings generation profile. The outlook is stable, reflecting our expectation that debt leverage

...- Glass and auto trim parts maker Guardian Industries Resources LLC is likely to experience a 20% decline in 2020 revenues from 2019 levels, with EBITDA declining about 35% because of the coronavirus-led recession. - In addition, S&P Global Ratings expects EBITDA margins to decline to about 10% after experiencing additional declines in 2018 and 2019 due to regional economic weaknesses, commodity price volatility, and tariff impacts. - We expect debt leverage to reach 2x by the end of 2020 before recovering to its historical 1x-1.5x range in 2021. - We are lowering our issuer credit rating on Guardian to 'A-' from 'A' to reflect higher debt leverage and its weaker earnings generation profile. - The outlook is stable, reflecting our expectation that debt leverage is unlikely to deteriorate beyond 2x and is likely to improve to prerecession levels within the next Year....

Research Update