Moody's lowers LaserShip

Moody's Investors Service said it downgraded its LaserShip, Inc. ratings, including its corporate family rating to Caa1 from B3, the probability of default rating to Caa1-PD from B3-PD, the company's first-lien credit facilities to B3 from B2 and the second-lien credit facility to Caa3 from Caa2.

“The downgrade reflects Moody's expectation for LaserShip's financial leverage to remain very high and liquidity to remain weak through 2023. LaserShip's significant increase in network capacity last year allowed the company to operate successfully during a critical 2022 peak holiday season. However, package volumes were lower than anticipated in the back half of 2022 resulting in weaker-than-expected earnings for the full year.

“Further, Moody's expects subdued consumer spending will impact package volumes in 2023 although total volumes are expected to increase moderately as LaserShip expands its network and services in newer geographic regions and adds new customers. Moody's believes that softer volume growth and increased interest costs will constrain LaserShip's ability to meaningfully improve operating leverage and result in negative free cash flow in 2023,” the agency said in a press release.

The outlook is negative.

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