Moody's confirms Carmike Cinemas

Moody's Investors Service said it concluded its review for downgrade and confirmed Carmike Cinemas, Inc.'s B2 corporate family rating, B3 probability-of-default rating and B1 senior secured bank credit facility (LGD2, 29%).

The outlook is now stable.

The agency said the confirmation is based on Carmike's completion of the restatement process and filing of all its financial statements and on the company's recent bank amendment, which reduces the risk of noncompliance with bank financial covenants.

Carmike's B2 corporate family rating reflects a debt to EBITDA ratio of roughly 6.5x, the company's sensitivity to product from movie studios, lack of scale and a weak industry growth profile, as well as lingering concerns over financial reporting.

The company's dominant position in its targeted smaller markets and strong concession margins, coupled with Moody's expectations for a return to modestly positive free cash flow from operations in 2007, support the rating.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.