S&P trims Wahoo Fitness

S&P said it lowered its ratings on Wahoo Fitness Acquisition LLC to CCC- from CCC and its senior secured credit facilities to CCC from CCC+. The 2 recovery rating is unchanged, indicating substantial (70%-90%; rounded estimate: 70%) recovery in default.

“Wahoo's capital structure is unsustainable given its negative EBITDA and cash flow. We assess the company's liquidity as weak because its liquidity sources are insufficient to cover its cash needs over the next 12 months. Wahoo had minimal cash on hand and no availability under its revolver as of the end of 2022 after funding its quarterly interest and mandatory debt amortization payments,” the agency said in a statement.

The company's sales during the third quarter of fiscal year 2022 plummeted by 56% year over year and S&P said it projects they fell by an added 35% in the fourth quarter of 2022

The outlook is negative.

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