American Pad & Paper of Delaware S&POutlook Now Stable.NEW YORK--(BUSINESS WIRE)--Standard & Poor's CreditWire 9/17/97-- Standard & Poor's today 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. its 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". ratings on American Pad & Paper Co. of Delaware Inc. However, the outlook was revised to stable from positive. The outlook revision reflects company results well below expectations. Near-term improvement is expected to be tempered by lower sales to key customers who are reducing inventory, as well as weak demand and competitive pricing for envelopes. Ratings for American Pad & Paper reflect limited product and customer diversity, an aggressive growth-via-acquisition strategy, and a weak financial profile. American Pad & Paper converts paper into envelopes, writing pads, folders, and printer paper. Sales and earnings are expected to return to normal levels following completion of customers' inventory corrections over the next several months. However, increasing emphasis on a small number of key national accounts (including office superstores This is a list of superstores by country. Multi-national
A ratio used to measure a company's pricing strategy and operating efficiency. Calculated by: , which average 10%-15%. Promotional and seasonal pricing also causes margins to vary somewhat. The company continues to be acquisitive, using proceeds from a 1996 equity issue and asset sales to finance two sizable siz·a·ble also size·a·ble adj. Of considerable size; fairly large. siz  a·ble·ness n. acquisitions
over the last 18 months. Though debt levels were reduced, debt to
capital remains aggressive, at near 80%, and is not likely to decline
significantly in view of the company's acquisition strategy.
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. should cover interest expense 1.7 times (x) to 2.0x in the near term, improving as sales and earnings recover. OUTLOOK: STABLE Significant inventory reductions by large customers, and the inability to quickly pass along higher uncoated free sheet costs, will pressure earnings this year. Going forward, sales levels should normalize normalize to convert a set of data by, for example, converting them to logarithms or reciprocals so that their previous non-normal distribution is converted to a normal one. , with gradual, modest improvement in operating margins given the company's fairly low cost structure and increasing economies of scale, Standard & Poor's said.---CreditWire CONTACT: Cynthia Werneth, New York New York, state, United States New York, Middle Atlantic state of the United States. It is bordered by Vermont, Massachusetts, Connecticut, and the Atlantic Ocean (E), New Jersey and Pennsylvania (S), Lakes Erie and Ontario and the Canadian province of (1) 212-208-1707 For more information on criteria or subscriptions: http://www.ratings.standardpoor.com |
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