Auto-parts store operator CSK Auto Corp. (NYSE:CAO) appears to be in need of tune up. The company’s performance is deteriorating, and it recently hired JPMorgan to help evaluate strategic alternatives, including an asset divestiture or outright sale or merger. Standard & Poor’s lowered CSK Auto Corp.’s credit rating to ‘B-’ from ‘B’ and said it has a negative outlook on the company. S&P anticipates CSK’s lease-adjusted debt to EBITDA ratio will increase to the mid-to-high 6x area in 2008 from 6.1x on Nov. 4, 2007, and from 5.4x at the end of 2006. The ratings agency added the Phoenix-based company will likely need to obtain more covenant amendments.
Atlantis Plastics Inc. (Nasdaq: ATPL) has retained Houlihan, Lokey, Howard & Zukin as its exclusive financial advisor to assist with the evaluation of strategic alternatives, including a possible sale of the Atlanta-based company. Atlantis does not expect to make any disclosure about the review of options unless and until its board has approved a definitive transaction. S&P has a default-prone ‘CCC-‘ corporate credit rating on the maker of custom films and molded plastic products. According to S&P, Atlantis hired an advisor because of difficulties in obtaining a credit facility waiver and amendments from lenders, given current difficult credit market and industry conditions.
Johnson Outdoors Inc. (Nasdaq: JOUT) is preparing to unmoor its Escape line of electric boats so it can focus on the growth of its paddle-sports segment, which the company views as having “the greatest potential for short- and long-term profitable growth.” The Racine, Wis.-based company said the pace of growth at its Escape product has been slower than anticipated. Johnson Outdoors has incurred a $1.3 million impairment charge related to inventory and fixed assets for the quarter ended Dec. 30. The supplier of outdoor recreation products also expects to record future impairment charges of approximately $200,000 for the Escape brand.
Selling is becoming addictive for Nabi Biopharmaceuticals (Nasdaq: NABI), the Rockville, Md.-based developer of nicotine-addiction treatments. The company sold its biologics strategic unit in December and has now authorized the exploration of a full range of strategic alternatives that could include the sale or merger of the company. Nabi Biopharmaceuticals hired Banc of America Securities LLC as financial advisor. Nabi Biopharmaceuticals has lost nearly 75 percent of its market capitalization since late 2005 and is now trading near its 52-week low.