Moody’s views US Radiology negatively

Moody's Investors Service said it revised US Radiology Specialists, Inc.'s (USRS) outlook to negative from stable. The agency also affirmed the company's B3 corporate family rating, B3-PD probability of default rating and B3 ratings on the company's first-lien credit facility consisting of a term loan and revolver.

“The outlook revision to negative reflects Moody's expectation of weaker earnings in the next few quarters due to lower than budgeted per unit revenues, increased labor costs and other one-off expenses. These operating challenges, along with the increased debt load from the company's acquisition of South Jersey Radiology in December 2021, have increased the company's financial leverage. USRS' debt to EBITDA (on Moody's adjusted basis) increased from approximately 6.1x at the end of 2021 to approximately 6.8 times as of June 30, 2022,” the agency said in a press release.

Moody’s said it estimates USRS’ will hover in the low-to-mid 7x range in the next 12-18 months.

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