Fitness Company Can't Compete Bally Total Fitness' 9 7/8% notes of '07 traded down eight points hitting 72 late in the week. One trader says the drop was due to a disappointing earnings report as it faces an increasingly competitive environment.
Drug Maker Drops
aaiPharma Inc., a pharmaceutical company, saw its 11% notes of '10 fall by up to nine points on the week after an announcement earlier in the week that its Board of Directors had become aware of unusual sales in two of the company's product lines during the second half of 2003. The company also withdrew its revenue and sales guidance for the first quarter and for all of 2004. The company will face an investigation by outside directors and a law firm, and might have to re-state financial results for 2003.
Bill Reed, analyst at Moody's Investors Service, says that, based on the press release, Moody's has put the company under review for possible downgrade. It currently rates the company B2. Standard & Poor's also revised its opinion on aaiPharma from stable to negative.
Furniture Maker Looks Off Shore
O'Sullivan Industries, a manufacturer of ready to assemble office furniture, saw its 13 3/8 % notes of '09 drop eight points on the week to trade around 65 cents on the dollar. According to one trader, there has been discussion of some of the production being moved off shore. Martin Kounitz, analyst at Standard and Poor's, states that the company faces very stiff competition, especially from Asian countries including Thailand and Malaysia, adding that a lot of shares went to Asian manufacturers. Standard & Poor's rates the company single-B minus, with a negative outlook.