S&P drops Wallace Theater outlook to negative

Standard & Poor's said it revised its outlook on Wallace Theater Holdings Inc. to negative from stable while ratings on the company, including the B- corporate credit rating, were affirmed.

The agency said it rates Wallace on a consolidated basis with subsidiary Hollywood Theaters Inc.

"We are concerned about Wallace's narrowing liquidity in light of the recent softness in the U.S. box office and tough comparisons against 2009, especially in the summer and upcoming winter holiday seasons," noted credit analyst Jeanne Shoesmith.

The agency said that its B- rating reflects Wallace's high leverage, concentrated cash flow, thin EBITDA coverage of interest, minimal discretionary cash flow, and limited liquidity.

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