Coyne Ratings Assigned By S&P; Coyne International Enterprises Corp.NEW YORK--(BUSINESS WIRE)--(S&P) NY -- Standard & Poor's CreditWire 6/12/98 -- Standard & Poor's today assigned ratings to Coyne International Enterprises Corp., doing business as Coyne Textile Services, as listed below. The outlook is stable. The ratings reflect Coyne Textile Services' high debt levels and the related overall weak financial profile. These factors are offset by the firm's leading niche positions in the highly fragmented textile rental services industry in the eastern U.S., environmental capabilities, and expertise in protective clothing. Also, the ratings benefit from an experienced management team and unused borrowing capacity under the company's bank credit facility. Coyne Textile Services provides textile rental products and laundering services from 40 locations to about 40,000 accounts in diversified industries. Textile rental products includes workplace uniforms and protective clothing, shop towels, and other reusable re·use tr.v. re·used, re·us·ing, re·us·es To use again, especially after salvaging or special treatment or processing. re·us absorbent absorbent /ab·sor·bent/ (-sor´bent) 1. able to take in, or suck up and incorporate. 2. a tissue structure involved in absorption. 3. a substance that absorbs or promotes absorption. system products, as well as treated mops and other dust-control products. Services and products are distributed through a route-based system composed of 18 industrial laundry Large institutions that require a constant flow of clean linen will often employ the services of an industrial laundry. Hospitals, prisons and hotels, for instance, will usually have their own laundry departments. plants and 21 sales and distribution terminals. The company has leading positions in the value-added niche markets A niche market also known as a target market is a focused, targetable portion (subset) of a market sector. By definition, then, a business that focuses on a niche market is addressing a need for a product or service that is not being addressed by mainstream providers. of protective garments Noun 1. protective garment - clothing that is intended to protect the wearer from injury apron - a garment of cloth or leather or plastic that is tied about the waist and worn to protect your clothing , heavy soil laundering for both uniforms and shop towels, and is a leading provider to the printing industry in the eastern region of the U.S. Coyne benefits from increasingly stringent environmental regulations that require uniforms to be cleaned at industrial laundries and continued outsourcing of non-essential functions by its customers. The firm's customer base is diverse, with the top 10 customers representing about 10% of the company's 1997 sales. Long-term contracts and a customer retention rate above the industry average provides for relatively stable revenues and cash flow. The overall financial profile is weak, with 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 total debt to 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 ) of 5.0 times (x), and EBITDA to interest of 2.1x. Financial measures are expected to improve, modestly due to continued operating efficiencies and cost controls. Operating margins Operating Margin A ratio used to measure a company's pricing strategy and operating efficiency. Calculated by: (before depreciation and amortization) are about 14%. Capital expenditures should be modest over the next several years, as the firm has made recent investments in plant capacity and wastewater treatment facilities to support its growth initiatives, which include an expanded sales force, possible acquisition opportunities, and additional service centers in contiguous areas. The rating anticipates that Coyne Textile Services will be acquisitive and will take advantage of consolidating trends in the textile rental industry. Financial flexibility for acquisitions is provided under a $10 million secured acquisition credit facility, which allows the firm to make acquisitions totaling $3.5 million per year. OUTLOOK: STABLE The outlook reflects Standard & Poor's expectation that Coyne Textile Services will maintain its leading regional market positions. The overall financial profile should modestly improve over the intermediate term.---CreditWire RATINGS ASSIGNED Coyne International Enterprises Corp. Corp credit rtg B+ $75 mil sr sub nts due 2008 B- CONTACT: Jayne M Ross, 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) 212-208-8942 For more information on criteria or subscriptions: http://www.ratings.standardpoor.com |
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