S&P lowers Congoleum rating
The rating actions reflect expectations that earnings and cash flow levels in the intermediate term will not be sufficient to restore credit measures to levels appropriate for the former ratings.
According to Standard and Poor¿s, the company's cost reduction efforts and new product introductions are unlikely to outweigh continued weakness in the manufactured housing industry, disappointing sales performance in a significant territory following transition to a new distributor, and the effects of the sluggish economy.
Congoleum is aggressively financed, with a modest equity base and debt to capital of about 80%. The company currently has adequate liquidity, has cut back on capital spending, and is not expected to repurchase shares in the near term.