Cooper-Standard shares plunge 20% after hiring Goldman Sachs for financial advice

The company recorded a net loss of $61.4 million in the first quarter, according to its earnings report last month. Its gross profit fell nearly 68% to $21.5 million on revenue of $613 million, down 8% year-over-year.

Cooper-Standard reported total debt of $1.03 billion, including $980 million in long-term debt, as of March 31.

The company had talked publicly about refinancing its capital structure for the past six months, equity research analyst Mike Ward said, and Tuesday’s announcement shouldn’t have come as a surprise to investors.

“It’s refinancing, every company does it,” said Ward, who covers the automotive sector for New York-based Benchmark Co. “There’s nothing unusual about that. They have plenty of cash.”

Cooper-Standard Chief Financial Officer Jon Banas said on the earnings call that the company’s earliest debt maturity is November 2023 on its Term B loan.

“The company is focused on extending the maturity date of a portion of the debt in our capital structure this year,” Banas said. “We are monitoring the markets and reviewing all refinancing options available to us.”

Meanwhile, the company – like the rest of the auto supply base – is looking to recoup losses from inflation and parts shortages. It accumulated $100 million in related losses, he said last November, when automakers had been less willing to share the pain of price increases. Since then, OEMs have generally been more willing to come to the table.

“Automakers have no interest in letting the supplier go bankrupt, because then the contracts go to court,” Ward said.

Cooper-Standard ranks 76th Automotive News list of the top 100 global suppliers with global sales to automakers of $2.4 billion in 2020.