American Color Graphics Outlk Revised to Pos by S&.Business Editors NEW YORK--(BUSINESS WIRE)--Standard &Poor's Feb. 17, 2000--Standard and Poor's today revised its outlook on American Color Graphics The ability to display graphic images in colors. Inc. to positive from stable. The single-'B'-plus corporate credit rating and single-'B'-minus subordinated debt Subordinated Debt A loan (or security) that ranks below other loans (or securities) with regard to claims on assets or earnings. Also known as "junior security" or "subordinated loan". rating for the company were affirmed af·firm v. af·firmed, af·firm·ing, af·firms v.tr. 1. To declare positively or firmly; maintain to be true. 2. To support or uphold the validity of; confirm. v.intr. . The outlook change is based on American Color Graphics' improved overall financial profile, reflecting both increased levels of cash flow and lower debt balances. Ratings reflect the company's still significant debt levels and competitive market conditions. In addition, with the printing of retail advertising inserts accounting for over 60% of sales, results are affected by changes in the retail advertising climate and in paper costs. These factors are tempered by American Color Graphics' solid position in several sectors of the commercial printing industry, including retail advertising inserts, comics, and digital imaging and pre-press services. In addition, flexibility is provided by availability under the company's revolving credit Revolving Credit A line of credit where the customer pays a commitment fee and is then allowed to use the funds when they are needed. It is usually used for operating purposes, fluctuating each month depending on the customers current cash flow needs. facility. Results have been aided in recent periods by increased print volumes and the benefits of ongoing productivity and cost-cutting programs. This has contributed to an increase in earnings before interest, taxes, depreciation, and amortization Earnings before interest, taxes, depreciation, and amortization (EBITDA) A financial measure defined as revenues less cost of goods sold and selling, general, and administrative expenses. (EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization) A metric used to show a company's profitability, but not its cash flow. EBITDA became popular in the 1980s to show the potential profitability of leveraged buyouts, but has become ). In addition, the company has used its free cash flow to reduce its debt levels. For the 12 months ended December 1999, EBITDA to interest was in the low 2 times (x) area, and debt to EBITDA was under 4x. OUTLOOK: POSITIVE Ratings could be raised if the company consistently maintains its credit measures at current levels, Standard &Poor's said. --- CreditWire |
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