S&P downgrades ICON

Standard & Poor's said it lowered ICON Health & Fitness Inc.'s corporate credit rating to B from B+, along with its issue-level rating on the company's senior secured notes by one notch to B- from B.

The recovery rating on this debt remains 5, indicating 10% to 30% expected default recovery.

All of the ratings also were placed on CreditWatch with negative implications.

The downgrades reflect the continued decline in the company's operating performance through the first half of fiscal 2013 that have resulted in credit measures deteriorating to levels that are no longer in line with the previous B+ corporate credit rating, S&P said.

The weakening of credit measures and cash flow resulted from a 34% year-over-year decline in EBITDA and a 213 basis-point decline in EBITDA margin in the first half of the fiscal year, despite nearly flat revenue in the period, the agency said.

The decline in EBITDA in the period was driven in part by lower sales of higher margin products and higher selling expenses, S&P added.

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