Moody’s stabilizes Quantum Health view

Moody's Investors Service said it changed Quantum Health, Inc.'s outlook to stable from negative and affirmed Quantum's B3 corporate family rating, B3-PD probability of default rating and B3 ratings on the backed senior secured first-lien term loan, and the backed senior secured multicurrency revolving credit facility.

“The revision of the outlook to stable reflects a material reduction in Quantum's financial leverage and improved cash flows over the last year. Debt to EBITDA was eight times at Aug. 31, 2023, down from thirteen times a year ago and Moody's expects leverage to trend toward six times over the next 12 to 18 months. Deleveraging has been due to both strong top-line growth from new business wins and cost management, as wage inflation is down meaningfully, and SG&A growth has been minimal despite strong revenue growth,” the agency said in a press release.

Moody’s said it forecasts Quantum will post “close to breakeven free cash flow for the fiscal year ending February 2024 and moderate free cash flow in fiscal year 2025.”

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