S&P lowers PCA ratings

Standard & Poor's said it lowered its corporate credit rating on PCA LLC, an operator of portrait photography studios, to CCC- from CCC. At the same time, the ratings on the company's senior secured second-lien notes and its senior unsecured debt were lowered to C from CC.

The outlook is negative.

S&P said the downgrade reflects the company's recent announcement that both its CEO and its CFO have resigned. Although the CEO intends to remain with the company until a successor is found, the resignations take place at a critical juncture for PCA, the company having experienced deteriorating operating performance, reduced profitability and strained liquidity. The company's recent results raise doubt about its ability to continue as a going concern.

S&P said the ratings on PCA reflect profitability pressures, high leverage, the significant seasonality of its business and its small cash flow base.

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