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Cambridge Industries Ratings Placed on Watch Negative by S&P

24 May 1999

Cambridge Industries Ratings Placed on Watch Negative by S&P

    NEW YORK, May 21 -- Standard & Poor's today placed its
single-'B'-plus corporate credit rating and single-'B'-minus subordinated debt
rating for Cambridge Industries, Inc. on CreditWatch with negative
implications.
    The CreditWatch placement reflects concerns over the company's strained
liquidity position and reduced financial flexibility.
    Cambridge manufactures exterior, functional/structural, and interior
plastic components for automobiles and light and heavy-duty trucks.  It has
grown rapidly during the past few years, partly through acquisitions.  As a
result of its rapid growth, Cambridge is highly leveraged.  At March 31, 1999
debt totaled $330 million.  The company has been experiencing profit and cash
flow pressures over the past few quarters and has had to amend its bank credit
agreement several times.  For the first quarter of 1999, the company reported
a net loss of $4.3 million.  The most recent amendment to the credit agreement
amended covenant requirements through March 31, 2000 and required Cambridge to
prepay $13.9 million of term loans.  As a result of negotiations with its
banks, Cambridge now faces higher interest costs on its outstanding debt but
has no significant additional debt repayment requirements this year.  As of
March 31, 1999 Cambridge had about $11.5 million of availability under its
bank lines.
    Standard & Poor's will meet with management to discuss the company's
current financial position and to assess prospects for improved operating
performance and cash generation.  If it appears that liquidity pressures will
continue over the near to intermediate term, ratings are likely to be lowered,
Standard & Poor's said. -- CreditWire