Moody's upgrades Schuff

Moody's Investors Service said it upgraded the ratings of Schuff International Inc., including the senior implied rating to Caa1 from Caa2, the $81 million 10.5% senior notes due 2008 to Caa1 from Caa2 and the senior unsecured issuer rating to Caa2 from Caa3.

Moody's said the upgrade is based upon the company's improved financial performance in fiscal 2004, including strong revenue growth, margin expansion, cash flow generation, and debt reduction. The change in the outlook to positive reflects the company's improved coverage levels for 2004 and Moody's expectation that Schuff will be successful in replacing some of its large contracts as they roll-off in 2005.

The ratings may improve, Moody's said, if the company continues to report positive cash flow generation, debt balances continue to decline, and coverage ratios (EBITDA to interest for 2004 was 2.1 times) remain around 2.0 times, which is strong for the rating category.

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