SEARCH NEWS:

 

Moody's May Cut Mikohn Gaming's Rating

The above rating actions are based on further declines in the company's financial performance and increasing concern regarding near-term liquidity. At this point, Mikohn's financial profile is weaker than it was when Moody's initially assigned the company a B2 senior implied rating in Aug. 2001. Prior to this rating action, Mikohn had a negative ratings outlook that was assigned on Oct. 3, 2001.

Debt/EBITDA is currently near 7.0 times (x), almost twice as large as the original pro forma estimate of 3.7x. Although the company may have enough cash on hand to make its next interest payment, if results do not improve materially in the near-term, leverage will increase, liquidity will deteriorate, and the company's ability to meet debt service obligations will be impaired. The rating actions also consider that while Mikohn recently announced the hiring of new President, and expects that new installations will help improve operating results, the company's limited product line will continue to make the company vulnerable to product delays and customer demand.

Mikohn's recent financial results have been hurt by delays in new game introductions. Moody's review will focus on actions the company is taking to avoid further product delays and improve near-term financial results and liquidity. Additionally, the review will help clarify Moody's understanding of recent management changes and the company's overall strategic direction.

Mikohn Gaming Corporation develops, manufactures and markets slot machine games and table games as well as tracking and accounting systems for gaming equipment. The company also manufactures and markets interior and exterior signage for casino operators and gaming machine manufacturers.

< Gaming News