Gibson Brands Inc. announced the company was aware that Standard and Poor’s might downgrade Gibson Brands a notch because the company “has not locked down the refinancing of the bonds.”

“Gibson also realized that our asset-based lender has not changed the 12-month rolling earnings covenant to compensate for a bad April through June quarter and subsequent supply constraint issues in the quarter ended December 2017. Instead, they are choosing to give waivers every month.”

According to chairman and CEO Henry Juszkiewicz, Gibson’ third-quarter results showed an “improvement in net profitability after taxes of just short of $10 million this recently reported quarter, compared to the quarter last year. This reflects two successive quarters of improvement in profitability, and a net profit after interest and taxes. We were able to pay down of $20 million of debt during this period. We continue to be confident in accomplishing our refinancing and expect continuing improvement in operating results. We fully expect our ratings to improve once we announce our refinancing, which is in process.”

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