New York,May 7--Standard & Poor's Ratings Services saidit lowered its long-term corporate credit and senior unsecured debt ratings on Atlanta, Ga.-based carpet manufacturer Interface Inc. IFSIA.O to 'B' from 'B+'.
At the same time, the subordinated debt rating was lowered to 'CCC+' from 'B-'. The mixed shelf registration rating was also lowered to a preliminary B/CCC+ from a preliminary B+/B-.
The outlook is negative. The company's total debt outstanding at Dec. 29, 2002, was about $445 million.
The downgrade follows continued weakness in the commercial sector and weaker than expected results for the first quarter ended March 2003, resulting in further volume declines and operating losses in several of Interface's business segments.
"Weaker than expected revenue and margin pressures across all business segments, particularly the commercial interiors and office furniture markets, have hurt operating results and further weakened credit measures," said Standard & Poor's credit analyst Susan Ding. "Interface continues to be highly dependent on the corporate sector, deriving about 65% of total revenues from this segment."
The lower sales volume and resulting unabsorbed overhead costs for the March 2003 quarter hurt margins and caused credit measures to deteriorate further from already weak levels. Complete ratings information is available to subscribers of RatingsDirect, Standard & Poor's Web-based credit analysis system, at www.ratingsdirect.com. All ratings affected by this rating action can be found on Standard & Poor's public Web site at www.standardandpoors.com; under Fixed Income in the left navigation bar, select Credit Ratings Actions.
