S&P affirms Medical Depot

S&P said it affirmed its B- issuer credit rating on Medical Depot Holdings Inc.

The outlook remains negative.

In addition, the agency affirmed the B- issue-level rating on the company's secured debt. The recovery rating remains 3, indicating an expectation of average (50%-70%; rounded estimate: 55%) recovery for lenders in the event of payment default.

S&P also affirmed the CCC issue-level rating on the company's senior secured second-lien term loan. The recovery rating remains 6, indicating negligible (0%-10%; rounded estimate: 5%) recovery.

“The rating affirmation on Medical Depot reflects our belief that management will continue to offset gross margin pressure stemming from an unfavorable shift in customer mix and pricing pressure in certain product categories with various cost-cutting initiatives and price increases on certain products,” the agency said in a news release.

“We expect that these savings will result in relatively stable EBITDA margins, with 2018 adjusted EBITDA of about $70 million and debt leverage of about 9x, declining modestly in subsequent years on mid-single-digit revenue and EBITDA growth.”

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.