Moody's downgrades Gibson Brands, Inc.'s CFR to B3; outlook is negative

Gibson Brands, Inc.: Update to credit analysis following outlook change to stable - Credit Opinion – 2024/02/20 – US$ 250.00 – ...Gibson Brands, Inc.'s (Gibson, B3 stable) credit profile reflects the company's strong brand awareness and competitive position within the niche guitar market and reputation for quality guitars, product innovation, geographic diversification and omnichannel distribution network. Gibson's customer base consists of music enthusiasts and professional artists who are loyal and show demand resilience through economic cycles. However, we believe that customers could defer higher-priced purchases should the state of the consumer weaken. The credit profile is constrained by demand risk given the discretionary nature of musical instrument products whose demand is highly sensitive to consumer spending, inflationary pressures, and economic slowdowns. High, but improving leverage, small scale with annual revenue of approximately $430 million, a narrow product portfolio and consumer concentration also elevate credit risk. Gibson is improving profitability in fiscal 2024 following a challenging 2023...

Moody's affirms Gibson's B3 CFR, outlook changed to stable from negative - Rating Action – 2024/02/12 – US$ 180.00 – ...MOODY'S CREDIT RATINGS, ASSESSMENTS, OTHER OPINIONS, AND PUBLICATIONS ARE NOT INTENDED FOR USE BY RETAIL INVESTORS AND IT WOULD BE RECKLESS AND INAPPROPRIATE FOR RETAIL INVESTORS TO USE MOODY'S CREDIT RATINGS, ASSESSMENTS, OTHER OPINIONS OR PUBLICATIONS WHEN MAKING AN INVESTMENT DECISION. IF IN DOUBT YOU SHOULD CONTACT YOUR FINANCIAL OR OTHER PROFESSIONAL ADVISER. ALL INFORMATION CONTAINED HEREIN IS PROTECTED BY LAW, INCLUDING BUT NOT LIMITED TO, COPYRIGHT LAW, AND NONE OF SUCH INFORMATION MAY BE COPIED OR OTHERWISE REPRODUCED, REPACKAGED, FURTHER TRANSMITTED, TRANSFERRED, DISSEMINATED, REDISTRIBUTED OR RESOLD, OR STORED FOR SUBSEQUENT USE FOR ANY SUCH PURPOSE, IN WHOLE OR IN PART, IN ANY FORM OR MANNER OR BY ANY MEANS WHATSOEVER, BY ANY PERSON WITHOUT MOODY'S PRIOR WRITTEN CONSENT. MOODY'S CREDIT RATINGS, ASSESSMENTS, OTHER OPINIONS AND PUBLICATIONS ARE NOT INTENDED FOR USE BY ANY PERSON AS A BENCHMARK AS THAT TERM IS DEFINED FOR REGULATORY PURPOSES AND MUST NOT BE USED IN ANY WAY THAT...

Gibson Brands, Inc.: Update to credit analysis following downgrade of CFR to B3 - Credit Opinion – 2023/02/06 – US$ 250.00 – ...Gibson Brands, Inc.'s credit profile ("Gibson" B3 negative) reflects strong brand awareness and reputation for quality guitars, product innovation, geographic diversification and omnichannel distribution network. The credit profile is constrained by the discretionary nature of musical instruments whose demand is highly sensitive to consumer spending, inflationary pressures, and economic slowdowns. High leverage, small scale with annual revenue of approximately $400 million, narrow product portfolio and customer concentration also elevate credit risk. Leverage is high with debt/EBITDA of 5.7x for the last twelve months ending September 30, 2022 on a Moody's adjusted basis. We anticipate that leverage will increase further to 7x over the next 12 months, as the company's profitability will remain constrained amid currency pressures and higher costs. Gibson's adequate liquidity is supported by availability on its recently upsized $75 million asset-based lending revolver expiring in December...

Gibson Brands, Inc.: Update to credit analysis - Credit Opinion – 2022/07/01 – US$ 250.00 – ...Gibson Brands, Inc.'s (Gibson; B2 stable) credit profile benefits from its well-recognized brands, diversified distribution channels, sizeable global market share and good operating performance. The company is navigating the pandemic well, especially strong demand for guitars, offset by the pressures on supply chain and higher costs in an inflationary environment. While leverage remains elevated as a result of debt funded dividend distribution during the third quarter of 2022 (ending 12/31/2021), we anticipate credit metrics to improve over the next 12-18 months. Moody's-adjusted debt/EBITDA was 5.9x and EBIT/interest expense was 2x as of the last twelve months ending December 31, 2021. We expect Gibson to maintain good liquidity, although free cash flow generation will be modest as the company rebuilds healthy inventory levels. The credit profile is constrained by the company's high leverage, small size in terms of revenue, customer concentration, aggressive financial policy and increased...

Gibson Brands, Inc. (New): Summary of new issuer credit profile - Credit Opinion – 2021/06/24 – US$ 250.00 – ...[1] Pro forma for the proposed refinancing transaction All figures and ratios are calculated using Moody's estimates and standard adjustments. Moody's Forecasts (f) or Projections (proj.) are Moody's opinion and do not represent the views of the issuer. Periods are Financial Year-End unless indicated. LTM = Last Twelve Months. Source: Moody's Financial MetricsTM, Moody's Estimates...

Gibson Brands, Inc. (New): Gibson Brands, Inc.s upsize to term loan is credit negative, ratings not affected - Issuer Comment – 2021/06/24 – US$ 200.00 – ...Gibson Brands, Inc.'s (Gibson) upsize to its proposed term loan offering to $300 million from $250 million is credit negative because it will increase leverage to fund a higher shareholder distribution. However, the upsize has no impact on the company's ratings and stable outlook. On June 14, we assigned Gibson a B2 Corporate Family Rating and a B2 rating on its senior secured term loan due 2028. "Although the upsizing of the term loan increases pro forma debt/EBITDA to 5.6x from 4.7x, and our debt/EBITDA projection for 2021 to 5.2x from 4.4x, the ratings are not affected because these leverage metrics remain below our 6.0x downgrade factor," stated Keith Foley, a Senior Vice President at Moody's. The incremental portion of the term loan will be used to increase the dividend portion of Gibson's debt financing by $30 million bringing the total planned dividend to $255 million from the originally planned $225 million. The remaining $20 million from the upsize will be added to the balance...

Moody's assigns B2 CFR to Gibson Brands, Inc. (New), B2 to new term loan; outlook is stable - Rating Action – 2021/06/14 – US$ 180.00 – ...MOODY'S CREDIT RATINGS, ASSESSMENTS, OTHER OPINIONS, AND PUBLICATIONS ARE NOT INTENDED FOR USE BY RETAIL INVESTORS AND IT WOULD BE RECKLESS AND INAPPROPRIATE FOR RETAIL INVESTORS TO USE MOODY'S CREDIT RATINGS, ASSESSMENTS, OTHER OPINIONS OR PUBLICATIONS WHEN MAKING AN INVESTMENT DECISION. IF IN DOUBT YOU SHOULD CONTACT YOUR FINANCIAL OR OTHER PROFESSIONAL ADVISER. ALL INFORMATION CONTAINED HEREIN IS PROTECTED BY LAW, INCLUDING BUT NOT LIMITED TO, COPYRIGHT LAW, AND NONE OF SUCH INFORMATION MAY BE COPIED OR OTHERWISE REPRODUCED, REPACKAGED, FURTHER TRANSMITTED, TRANSFERRED, DISSEMINATED, REDISTRIBUTED OR RESOLD, OR STORED FOR SUBSEQUENT USE FOR ANY SUCH PURPOSE, IN WHOLE OR IN PART, IN ANY FORM OR MANNER OR BY ANY MEANS WHATSOEVER, BY ANY PERSON WITHOUT MOODY'S PRIOR WRITTEN CONSENT. MOODY'S CREDIT RATINGS, ASSESSMENTS, OTHER OPINIONS AND PUBLICATIONS ARE NOT INTENDED FOR USE BY ANY PERSON AS A BENCHMARK AS THAT TERM IS DEFINED FOR REGULATORY PURPOSES AND MUST NOT BE USED IN ANY WAY THAT...