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New York, November 23, 2022 — Moody’s Investors Service (“Moody’s”) has completed a periodic review of the ratings -and other ratings that are associated with the same analytical units for the rated entity(entities) listed below.
The review was conducted through a portfolio review discussion held on 16 November 2022 in which Moody’s reassessed the appropriateness of the ratings in the context of the relevant principal methodology(ies), recent developments, and a comparison of the financial and operating profile to similarly rated peers. A possible outcome from periodic reviews is a referral of a rating to a rating committee.
This publication does not announce a credit rating action and is not an indication of whether or not a credit rating action is likely in the near future. Credit ratings and outlook/review status cannot be changed in a portfolio review and hence are not impacted by this announcement.
Key Rating Considerations
The principal methodology used for the rated entities listed below was Consumer Durables published in September 2021. Please see the Rating Methodologies page on https://ratings.moodys.com for a copy of this methodology.
Key rating considerations on a forward-looking basis may include but are not limited to the following summarized below.
Consumer Durables
Scale: Scale is an indicator of the overall depth of a company’s business and its success in attracting a variety of customers. Larger companies may be able to achieve greater economies of scale and be better positioned to leverage fixed costs and the advertising spend to promote consumer awareness of brands and products. Size may also be an indicator for a consumer durable company’s resilience to changes in product demand and its clout with suppliers and customers. Broad scale will likely reduce a company’s exposure to business disruption caused by a problem with a single plant. Total sales are an indicator of scale.
Business Profile: The business profile of a consumer durables company is considered because it greatly influences its ability to generate sustainable earnings and operating cash flows. Core aspects of a consumer durables company’s business profile are its competitive position and brand strength. A company’s competitive position includes its stability of cash flows, overall market position, product and geographic diversity, barriers to entry, and cost structure characteristics.
Profitability: Profitability matters because it is needed to generate sustainable cash flow and maintain a competitive position. Profitability on a long-term multi-year basis helps companies attract capital and make ongoing investments in research and development to maintain a technological edge. The EBIT margin is an indicator of profitability.
Leverage and Coverage: Leverage and coverage measures provide important indications of a company’s financial flexibility and long-term viability. Measures of leverage and coverage include Debt/ EBITDA, Retained Cash Flow/ Net Debt and EBIT/ Interest Expense.
Financial Policy: Management and board tolerance for financial risk is considered because it directly affects leverage levels, credit quality, and the risk of adverse changes in financing and capital structure. Considerations include a company’s public commitments in this area, its track record for adhering to commitments, and our views on the company’s ability to achieve its targets. Financial risk tolerance serves as a guidepost to investment and capital allocation.
Other Rating Considerations: Other considerations may include but are not limited to financial controls and the quality of financial reporting; corporate legal structure; the quality and experience of management; assessments of corporate governance as well as environmental and social considerations; exposure to uncertain licensing regimes; and possible government interference in some countries. Regulatory, litigation, liquidity, technology, and reputational risk as well as changes to consumer and business spending patterns, competitor strategies and macroeconomic trends also affect ratings.
19th Holdings Golf, LLC
ACCO Brands Corporation
AHF Parent Holding, Inc.
Astro One Acquisition Corporation
CB Poly US Holdings, Inc.
CD&R Smokey Buyer, Inc.
Champ Acquisition Corporation
Compass Group Diversified Holdings LLC
Conair Holdings LLC
Fender Musical Instruments Corporation
FXI Holdings, Inc.
Gibson Brands, Inc.
Griffon Corporation
Hayward Industries, Inc.
Hillman Group Inc. (The)
Instant Brands Holdings Inc.
KNB Holdings Corporation
Lakeshore Learning Materials, LLC
Latham Pool Products, Inc.
Libbey Glass LLC
Lifetime Brands, Inc.
PlayPower, Inc.
Recess Holdings, Inc.
Samsonite International S.A.
Serta Simmons Bedding, LLC
Solis IV B.V.
SP PF Buyer LLC
Spectrum Brands, Inc.
SRAM, LLC
SVP-Singer Holdings Inc
SWF Holdings I Corp.
TGP Holdings III LLC
Topgolf Callaway Brands Corp.
Varsity Brands Holding Co., Inc.
Vista Outdoor Inc.
Wahoo Fitness Acquisition L.L.C.
Weber-Stephen Products LLC
The principal methodology used for the rated entities listed below was Business and Consumer Services published in November 2021. Please see the Rating Methodologies page on https://ratings.moodys.com for a copy of this methodology.
Key rating considerations on a forward-looking basis may include but are not limited to the following summarized below.
Business and Consumer Services
Scale: Scale is considered because larger scale can be an indicator of a company’s ability to influence business trends and pricing within its service segments and to support a stable or growing market position. Scale also can be an indicator of greater resilience to changes in demand, geographic diversity, cost absorption, R&D capabilities and of greater bargaining strength with customers, labor, and vendors. Revenue is an indicator of scale.
Business Profile: The business profile of a company is considered because it greatly influences its ability to generate sustainable earnings and operating cash flows. The business and consumer service industry comprises a vast array of business models encompassing a multitude of identifiable customer bases worldwide. We consider the underlying demand characteristics of a company’s service offerings and their relative breadth, strength, and endurance of demand. Companies that have established a long history of strong demand for a diverse range of service offerings that are critical to customer needs generally entail lower risk compared to those that offer a single line of service which have less importance for customer needs or have a limited history of success.
Profitability: Profits matter because they are necessary to maintain a business’s competitive position, including sufficient reinvestment in marketing, research, facilities, and human capital. Sustained high profitability is generally a strong indicator of substantial competitive advantages, particularly if combined with evidence of a stable or rising market share. EBITA Margin is an indicator of profitability.
Leverage and Coverage: Leverage and coverage measures are indicators of a company’s financial flexibility and long-term viability, including its ability to adapt to changes in the economic and business environment within the segments in which it operates. Indicators of leverage and coverage include ratios such as: Debt / EBITDA, EBITA / Interest Expense, and Retained Cash Flow/ Net Debt.
Financial Policy: Management and board tolerance for financial risk is a consideration because it directly affects debt levels, credit quality, and the risk of adverse changes in financing and capital structure. Our assessment of financial policies includes the perceived tolerance of a company’s governing board and management for financial risk and the future direction for the company’s capital structure. Considerations include a company’s public commitments in this area, its track record for adhering to commitments, and our views on the ability for the company to achieve its targets. Financial risk tolerance serves as a guidepost to investment and capital allocation.
Other Rating Considerations: Other considerations may include but are not limited to financial controls and the quality of financial reporting; corporate legal structure; the quality and experience of management; assessments of corporate governance as well as environmental and social considerations; exposure to uncertain licensing regimes; and possible government interference in some countries. Regulatory, litigation, liquidity, technology, and reputational risk as well as changes to consumer and business spending patterns, competitor strategies and macroeconomic trends also affect ratings.
Topgolf International, Inc.
The principal methodology used for the rated entities listed below was Distribution & Supply Chain Services Industry published in June 2018. Please see the Rating Methodologies page on https://ratings.moodys.com for a copy of this methodology.
Key rating considerations on a forward-looking basis may include but are not limited to the following summarized below.
Distribution & Supply Chain Services Industry
Scale: Larger scale can be an indicator of a company’s ability to influence business trends and pricing within its service segments and to support a stable or growing market position. Scale also can be an indicator of greater resilience to changes in demand, geographic diversity, cost absorption, R&D capabilities and greater bargaining strength with customers, labor, and vendors. Scale is measured using total reported revenue and adjusted EBITA.
Business Profile: We consider the underlying demand characteristics of a company’s service offerings and its relative breadth, strength, and durability of demand.
Profitability and Efficiency: Profitable returns matter because they are necessary to maintain a business’ competitive position, including sufficient reinvestment in operations, marketing, research, facilities, and human capital. Sustained high profitability is generally a strong indicator of substantial competitive advantages, particularly if combined with evidence of a stable or rising market share. For issuers in the supply chain sector, working capital management matters, especially when considering the typically low operating margins that necessitate maintaining strong liquidity and low cash conversion cycles. The Operating margin and Return on Invested Capital are indicators of profitability and efficiency.
Leverage and Coverage: Leverage and coverage measures are indicators of a company’s financial flexibility and long-term viability, including their ability to adapt to changes in economic and business environment in the segments in which they operate. Among others, ratios such as Debt/ EBITDA, EBITA/ Interest Expense, and Retained Cash Flow/ Debt are indicators of leverage and coverage.
Financial Policy: We consider management and board tolerance for financial risk as it directly affects debt levels, credit quality and the risk of adverse changes in financing and capital structure. We assess the issuer’s desired capital structure or targeted credit profile, history of prior actions and adherence to its commitments. Attention is paid to management’s operating performance and use of cash flow through different phases of economic and industry cycles. Also of interest is the way in which management responds to key events, such as changes in the credit markets and liquidity environment, legal actions, competitive challenges, and regulatory pressures. Management’s appetite for M&A activity is assessed, with a focus on the type of transactions and funding decisions.
Other Factors: Other factors may include, but are not limited to, our assessment of the quality of management, corporate governance, financial controls, liquidity management, event risk, and seasonality.
BCPE Empire Topco, Inc.
Edward Don & Company, LLC
TMK Hawk Parent, Corp.
This announcement applies only to Rated Entities with EU rated, UK rated, EU endorsed and UK endorsed ratings. Rated Entities, with Non EU rated, non UK rated, non EU endorsed and non UK endorsed ratings may be referenced herein to the extent necessary, if they are part of the same analytical unit.
Please see the Issuer page on https://ratings.moodys.com for each of the ratings covered, most updated credit rating action, rating history, and Credit Rating action Press Release including the rating rationale and factors that could lead to a rating upgrade or downgrade.
This publication does not announce a credit rating action.
For any credit ratings referenced in this publication, please see the issuer/deal page on https://ratings.moodys.com
for the most updated credit rating action information and rating history.
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