LTM reveals alex rodriguez revenuesdeclined 2.3% texas rangers badge retells to $13.5 billion compared to fiscal 2007 revenues which ended Feb.2, 2008. However, LTM operating EBIT margin decreased 90 basis points to 3.9%during the same period due to a contraction in gross margin as a result of pricereductions taken to stimulate sales and increased sales of lower margin productsand the deleveraging of selling, general and administrative (SG&A) expenses infiscal 2008. Nevertheless, TOY generated positive free cash flow of $162 millionfor the LTM period as a result of solid working capital management. In addition, the company has adequate liquidity supported by $470 million ofcash as of May 2, 2009 and availability of $1.1 billion under its $2 billioncredit facility expiring July 2010.
TOY recently amended the credit facility toextend the maturity date of a portion of the revolver to May 21, 2012 baseball tickets . Theamended agreement includes a $516.5 million tranche that will expire on July 21,2010 and a $1.526 billion tranche that will expire on May 21, 2012 texas rangers badges . Fitchanticipates the company will resolve its refinancing needs for $800 million ofCMBS maturing in 2010 walker texas rangers . Given the weaker operating results, TOY's leverage ratio remains high with LTMadjusted debt/EBITDAR of 6.9 times (x) compared to 6.3x in fiscal 2008 and LTMEBITDAR coverage of interest and rent of 1.5x compared to 1.6x during the sameperiod texas rangers badge . Fitch anticipates sales will continue to be pressured in the near termgiven the current challenging operating environment. However, the company'scontinued implementation of its juvenile strategy, including rolling out moreToys 'R' Us and Babies 'R' Us side by side stores and remodeling the existingstore base to improve the shopping experience, as well as its cost controlefforts will help operating margins to remain steady.
This, combined with lowerdebt, should lead to credit metrics remaining around the current levels michael young autograph . Of concern is the strong competition in the toy retailing business texas rangers badges . TOY competeswith a number of retailers, including other toy retailers, discounters, andcatalog and internet businesses walker texas rangers . Fitch expects price competition will continueto be intense this holiday season as retailers seek to drive traffic into thestores . The ratings of the various classes of debt listed above reflect their respectiverecovery prospects. Fitch's recovery analysis assumes an enterprise value of$3.3 billion in a distressed scenario.
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