Moody’s changes Gibson outlook to stable

Moody’s Investors Service said it changed its outlook for Gibson Brands, Inc. to stable from negative and affirmed its B3 ratings on the company and the Caa1 rating on its senior secured first-lien loan due August 2028.

“The outlook change to stable reflects Gibson's lower leverage and improved free cash flow and liquidity. Despite lower consumer demand and flat revenue expected in the fiscal year ended March 2024, Gibson's earnings are benefitting from lower logistics costs and manufacturing efficiencies. Free cash flow has been consistently positive over the past five quarters and the ABL revolver maturing in September 2027 (unrated) remains undrawn,” Moody’s said in a press release.

The agency said it forecasts Gibson’s debt-to-EBITDA leverage to narrow to 5.7x at the end of fiscal 2024 ending in March compared to more than 7x in fiscal 2023 ending March 2023.

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