Moody's: Heckler outlook stable

Moody's Investors Service said it affirmed Heckler & Koch GmbH's B2 corporate family rating, B1 probability-of-default rating and B2 (LGD4, 65%) senior unsecured note rating and changed the outlook to stable from negative.

"The affirmation of [the company's] ratings reflects the company's achievement in turning around its revenues, profitability and cash generation back to levels more in line with the requirements of the B2 rating category," Christian Hendker, Moody's analyst, said in a written statement.

"This achievement is the result of internal efficiency improvements and as importantly the strategic shift away from the company's historical reliance on a few large and highly profitable orders toward a higher number of small orders, which again improved capacity utilization to a level close to net income breakeven," Hendker added.

The outlook reflects improved credit metrics, with a debt-to-EBITDA ratio to 6 times in 2007 from 6.8 times at end of 2006, and free cash flow generation close to break even levels in the past 12 months.

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