Concord Camera Sr Nts Rated 'B-' by S&P.NEW YORK--(BUSINESS WIRE)--Standard & Poor's CreditWire 7/28/98-- Standard & Poor's today assigned as·sign tr.v. as·signed, as·sign·ing, as·signs 1. To set apart for a particular purpose; designate: assigned a day for the inspection. 2. its single-'B'-minus rating to Concord Concord, cities, United States Concord (kŏng`kərd, kŏn`kôrd'). 1 city (1990 pop. 111,348), Contra Costa co., W central Calif.; settled c.1852, inc. 1906. Camera Corp.'s privately placed, Rule 144A Rule 144A A Securities & Exchange Commission rule modifying a two-year holding period requirement on privately placed securities to permit qualified institutional buyers to trade these positions among themselves. $15 million 11% senior notes due 2005. A single-'B' corporate credit rating also was assigned. The ratings outlook is stable. The ratings reflect the company's improving operating performance and moderate debt leverage, which partially offset the risks relating to relating to relate prep → concernant relating to relate prep → bezüglich +gen, mit Bezug auf +acc the company's limited customer and manufacturing diversity. Concord Camera is a manufacturer of low-priced cameras for the retail market and to major photography concerns. A significant portion of sales are single-use cameras, reflecting the company's decision to concentrate its efforts on a currently popular format. Geographic diversity is good, as about half of sales are international. However, operations are vertically integrated, with all of the company's manufacturing and assembly facilities located in China. This concentrated manufacturing strategy minimizes manufacturing costs, but profitability could be potentially volatile should production difficulties arise. Operating performance historically has been volatile, reflecting the company's former dependence on the price-sensitive retail distribution channel and the company's exposure to inventory and obsolescence ob·so·les·cent adj. 1. Being in the process of passing out of use or usefulness; becoming obsolete. 2. Biology Gradually disappearing; imperfectly or only slightly developed. risk. Sales to large mass merchants and drugstore chains have been flat over the past three years. Product development spending has been high in order to shift the business mix to somewhat more predictable original equipment manufacturing, which is performed on a contract basis. Concord Camera is starting to benefit from the trend of major photography companies outsourcing (1) Contracting with outside consultants, software houses or service bureaus to perform systems analysis, programming and datacenter operations. Contrast with insourcing. See netsourcing, ASP, SSP and facilities management. a portion of their production requirements of low-margin cameras to third parties. The company has only recently become profitable, due to improving operating efficiency and the shift in the customer mix to original equipment manufacturers. The three largest customers now account for the majority of sales, and volume under these contracts is sensitive to ultimate consumer demand. Pro forma As a matter of form or for the sake of form. Used to describe accounting, financial, and other statements or conclusions based upon assumed or anticipated facts. The phrase pro forma debt to operating cash flow Operating cash flow Earnings before depreciation minus taxes. Measures the cash generated from operations, not counting capital spending or working capital requirements. is modest at under 2.0 times. Free cash flow has been slightly negative over the past three years due to increasing product development costs and capital expenditure requirements. These expenses are expected to continue to increase as management develops new products and enhances its manufacturing capabilities, restricting free cash flow generation. Modest near-term flexibility is provided by moderate cash balances and nominal bank debt maturities over the next several years. OUTLOOK: STABLE The ratings are currently constrained con·strain tr.v. con·strained, con·strain·ing, con·strains 1. To compel by physical, moral, or circumstantial force; oblige: felt constrained to object. See Synonyms at force. 2. by the company's relatively small size and limited customer diversity. Longer-term consideration of an upgrade will depend upon the company's success in enhancing customer diversity, while continuing to improve operating performance and maintain moderate debt leverage. -- CreditWire
CONTACT: Hal F Diamond, New York (1) 212-208-1331
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