S&P drops Carmike view to negative

Standard & Poor's said it revised its outlook on Carmike Cinemas Inc. to negative from positive, based on a sharp drop in year-to-date EBITDA that has exceeded the declines experienced by other theater chains.

At the same time, the agency said it affirmed its existing ratings, including its B corporate credit and senior secured debt ratings and its CCC+ subordinated debt rating, on the company.

S&P said the rating reflects Carmike's high lease-adjusted leverage, weak discretionary cash flow, limited liquidity, less-modern theater circuit compared with key peers and the financial strain caused by the sharp drop in U.S. movie attendance in the first eight months of 2005.

These factors more than outweigh Carmike's decent geographic diversity and competitive positions in many of its smaller markets, the agency noted.

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