S&P drops HealthTronics outlook to negative

Standard & Poor's said it revised its rating outlook for HealthTronics Inc. to negative from stable and affirmed its BB- corporate credit rating on the company.

The outlook revision reflects S&P's concerns about HealthTronics' 8% decline in core urology service revenues and 6% decline in revenues from continuing operations in 2006 from 2005 and the company's planned expansion into new urology procedures, the agency said.

The rating on HealthTronics reflects the company's narrow business focus, vulnerability to third-party reimbursement rates and significant minority interest payments, S&P said, adding that the rating also reflects the company's mature lithotripsy operations, which have been experiencing declining volumes and its acquisition-based growth strategy.

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