S&P cuts Radio Systems outlook to negative

Standard & Poor's said it revised its outlook on Radio Systems Corp. to negative from stable.

At the same time, the agency said it affirmed all of the ratings on the company, including the B corporate credit rating.

"The outlook revision reflects the company's significantly reduced sales and EBITDA levels during the fourth quarter ending Dec. 31, and the prospects for continued weak sales performance due to declining macroeconomic conditions," said S&P credit analyst Jerry Phelan.

"Although Radio Systems has recently implemented cost-cutting efforts targeted at improving performance, the agency said it believes sales will continue to be challenged in a weak retail and economic environment, given the discretionary nature of the company's products," he continued.

The ratings on Radio Systems reflect its narrow business focus and discretionary products, exposure to technology risk, a highly competitive operating environment, recent performance decline, some customer concentration, and risks related to outsourcing substantially all of its manufacturing to third parties, the agency added.

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