S&P revises CFS view to stable

S&P said it revised its outlook for CFS Brands LLC to stable from negative and affirmed the B- ratings on the company and its first-lien credit facilities. The facilities’ 3 recovery rating is unchanged.

“While CFS experienced sequential improvement from its sales decline of over 30% in the second quarter of 2020, the company did not demonstrate positive revenue growth until the second quarter of 2021. However, demand in the second and third quarters of 2021 greatly improved, and the company is now on track to deliver pre-pandemic growth. This is also supported by acquisitions that were made in late 2020 that will continue to complement the company's current business offering,” S&P said in a press release.

The agency said it expects CFS to deliver positive free operating cash flow of about $20 million-$30 million over the next 12 months, with support from strong earnings from operations.

The outlook indicates a forecast for positive FOCF and that CFS will lower its leverage to the high-6x area over the next 12 months, S&P said.

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