Research Update: Mannington Mills Inc. Downgraded To 'B' On Elevated Leverage; Outlook Stable

Financial results for U.S. flooring manufacturer Mannington Mills Inc. fell short of our expectations due to lower sales. This stems from softness in the residential housing market that higher interest rates exacerbated, partially offset by steady commercial market activity. We expect EBITDA will remain under pressure in the coming quarters with expected lower volumes in the residential segment, specifically in new home construction and repair and remodel segments, resulting in weak credit metrics. Therefore, we lowered the issuer credit rating on Mannington to 'B' from 'BB-'. At the same time, we lowered our issue-level rating on the company's $252 million term loan due 2026 to 'B' from 'BB-'. The stable outlook reflects our expectation that Mannington will generate moderate sales

...- Financial results for U.S. flooring manufacturer Mannington Mills Inc. fell short of our expectations due to lower sales. This stems from softness in the residential housing market that higher interest rates exacerbated, partially offset by steady commercial market activity. - We expect EBITDA will remain under pressure in the coming quarters with expected lower volumes in the residential segment, specifically in new home construction and repair and remodel segments, resulting in weak credit metrics. - Therefore, we lowered the issuer credit rating on Mannington to 'B' from '##-'. - At the same time, we lowered our issue-level rating on the company's $252 million term loan due 2026 to 'B' from '##-'. - The stable outlook reflects our expectation that Mannington will generate moderate sales in its commercial segment amid softness in the residential market so that the company's S&P Global Ratings-adjusted debt leverage remains 6x-7x over the next 12 months....

Research Update