Research Update: Weber Inc. Downgraded To 'CCC+'; Ratings Placed On CreditWatch Negative On Liquidity Pressure

U.S.-based Weber Inc. announced in a pre-earnings release on July 25, 2022, that sales and EBITDA for its third quarter (ended June 30) will be significantly weaker than prior estimates and withdrew guidance for fiscal 2022. We revised our fiscal 2022 forecast for Weber downward and believe the company may violate its springing first-lien leverage covenant in its first quarter of fiscal 2023, typically its peak working capital season, absent a waiver or amendment. As a result of our expectation for minimal EBITDA and cash flow, we view Weber's capital structure as unsustainable. We lowered all of our ratings on Weber, including our issuer credit rating to 'CCC+' from 'B', and placed them on CreditWatch with negative implications. The CreditWatch

...- U.S.-based Weber Inc. announced in a pre-earnings release on July 25, 2022, that sales and EBITDA for its third quarter (ended June 30) will be significantly weaker than prior estimates and withdrew guidance for fiscal 2022. - We revised our fiscal 2022 forecast for Weber downward and believe the company may violate its springing first-lien leverage covenant in its first quarter of fiscal 2023, typically its peak working capital season, absent a waiver or amendment. As a result of our expectation for minimal EBITDA and cash flow, we view Weber's capital structure as unsustainable. - We lowered all of our ratings on Weber, including our issuer credit rating to '###+' from 'B', and placed them on CreditWatch with negative implications. - The CreditWatch reflects the potential for a downgrade if the company cannot improve liquidity, including through covenant relief, additional capital, and stabilized operating performance....

Research Update