pH Beauty Holdings III, Inc.: Update to credit analysis

pH Beauty Holdings III, Inc.: Update following upgrade to Caa1 - Credit Opinion – 2023/09/26 – US$ 250.00 – ...pH Beauty's credit profile (Caa1 stable) reflects the company's small scale, improved but still weak credit metrics including high debt-to-EBITDA leverage at 7.8x for the 12 months ending June 30, 2023, and refinancing risk. We expect pH Beauty's debt-to-EBITDA to decline to below 7.0x in the next 12-18 months as the company continues to introduce new products, expand its distribution channels, and grow its international business. We view the company's risk of a debt restructuring over the next year has declined with the rebound in earnings and improved liquidity with the revolver paydown and extension providing the company with some leeway to execute its growth initiatives. Nevertheless, refinancing risk remains elevated and the cost of addressing the 2025 and 2026 maturities could raise cash interest and contribute to negative free cash flow that is not manageable at current earnings levels. Further earnings improvement or an equity injection may thus be necessary to avoid a distressed...

Moody's upgrades pH Beauty's CFR to Caa1; outlook is stable - Rating Action – 2023/09/13 – US$ 180.00 – ...MOODY'S CREDIT RATINGS, ASSESSMENTS, OTHER OPINIONS, AND PUBLICATIONS ARE NOT INTENDED FOR USE BY RETAIL INVESTORS AND IT WOULD BE RECKLESS AND INAPPROPRIATE FOR RETAIL INVESTORS TO USE MOODY'S CREDIT RATINGS, ASSESSMENTS, OTHER OPINIONS OR PUBLICATIONS WHEN MAKING AN INVESTMENT DECISION. IF IN DOUBT YOU SHOULD CONTACT YOUR FINANCIAL OR OTHER PROFESSIONAL ADVISER. ALL INFORMATION CONTAINED HEREIN IS PROTECTED BY LAW, INCLUDING BUT NOT LIMITED TO, COPYRIGHT LAW, AND NONE OF SUCH INFORMATION MAY BE COPIED OR OTHERWISE REPRODUCED, REPACKAGED, FURTHER TRANSMITTED, TRANSFERRED, DISSEMINATED, REDISTRIBUTED OR RESOLD, OR STORED FOR SUBSEQUENT USE FOR ANY SUCH PURPOSE, IN WHOLE OR IN PART, IN ANY FORM OR MANNER OR BY ANY MEANS WHATSOEVER, BY ANY PERSON WITHOUT MOODY'S PRIOR WRITTEN CONSENT. MOODY'S CREDIT RATINGS, ASSESSMENTS, OTHER OPINIONS AND PUBLICATIONS ARE NOT INTENDED FOR USE BY ANY PERSON AS A BENCHMARK AS THAT TERM IS DEFINED FOR REGULATORY PURPOSES AND MUST NOT BE USED IN ANY WAY THAT...

pH Beauty Holdings III, Inc.: Update following downgrade to Caa2 - Credit Opinion – 2022/09/14 – US$ 250.00 – ...pH Beauty's credit profile (Caa2 negative) reflects the company's small scale and weak credit metrics including a very high debt-to-EBITDA leverage at above 15x and over $30 million negative free cash flow for the twelve months ending June 30, 2022. Earnings erosion in the last 18 months is contributing to the high leverage as a result of supply chain disruptions and heightened freight costs, with free cash flow additionally weakened by building inventory. pH Beauty does not have its own manufacturing facilities and imports the majority of its products from China. Although demand for beauty products is expected to remain solid as consumers increase outdoor activities, we view pH Beauty's products as more discretionary than other beauty categories such as skincare and color cosmetics. Consumers are more likely to cut spending on beauty tools/accessories such as makeup brushes, as well as spending on sunless tanning products and bath accessories in an economic downturn. Moreover, the cosmetic...

Moody's downgrades pH Beauty's CFR to Caa2; outlook is negative - Rating Action – 2022/09/12 – US$ 180.00 – ...MOODY'S CREDIT RATINGS, ASSESSMENTS, OTHER OPINIONS, AND PUBLICATIONS ARE NOT INTENDED FOR USE BY RETAIL INVESTORS AND IT WOULD BE RECKLESS AND INAPPROPRIATE FOR RETAIL INVESTORS TO USE MOODY'S CREDIT RATINGS, ASSESSMENTS, OTHER OPINIONS OR PUBLICATIONS WHEN MAKING AN INVESTMENT DECISION. IF IN DOUBT YOU SHOULD CONTACT YOUR FINANCIAL OR OTHER PROFESSIONAL ADVISER. ALL INFORMATION CONTAINED HEREIN IS PROTECTED BY LAW, INCLUDING BUT NOT LIMITED TO, COPYRIGHT LAW, AND NONE OF SUCH INFORMATION MAY BE COPIED OR OTHERWISE REPRODUCED, REPACKAGED, FURTHER TRANSMITTED, TRANSFERRED, DISSEMINATED, REDISTRIBUTED OR RESOLD, OR STORED FOR SUBSEQUENT USE FOR ANY SUCH PURPOSE, IN WHOLE OR IN PART, IN ANY FORM OR MANNER OR BY ANY MEANS WHATSOEVER, BY ANY PERSON WITHOUT MOODY'S PRIOR WRITTEN CONSENT. MOODY'S CREDIT RATINGS, ASSESSMENTS, OTHER OPINIONS AND PUBLICATIONS ARE NOT INTENDED FOR USE BY ANY PERSON AS A BENCHMARK AS THAT TERM IS DEFINED FOR REGULATORY PURPOSES AND MUST NOT BE USED IN ANY WAY THAT...

pH Beauty Holdings III, Inc.: Update following change in outlook to stable from negative - Credit Opinion – 2021/05/05 – US$ 250.00 – ...pH Beauty's credit profile (Caa1 stable) reflects the company's high financial leverage with adjusted debt/EBITDA of 7.8x for the twelve months ended September 30, 2020, small scale, and event risk related to majority ownership by a financial sponsor. The cosmetic accessories, facial skin care, and tanning solution industries are also highly competitive, and demand for these products is vulnerable to weakness in household income, retailers' shelf space allocation and marketing support. pH Beauty faces steep competition from branded product companies that are significantly larger, more diverse, financially stronger, and which have much greater investment capacity. These factors are partially balanced by the expectation that the company will generate positive free cash flow. The company's credit profile is also supported by pH Beauty's adequate liquidity and our expectation that distribution gains and product development will help support earnings growth over the next 12 to 18 months....

Moody's affirms pH Beauty's Caa1 CFR, changes outlook to stable from negative - Rating Action – 2021/04/30 – US$ 180.00 – ...MOODY'S CREDIT RATINGS, ASSESSMENTS, OTHER OPINIONS, AND PUBLICATIONS ARE NOT INTENDED FOR USE BY RETAIL INVESTORS AND IT WOULD BE RECKLESS AND INAPPROPRIATE FOR RETAIL INVESTORS TO USE MOODY'S CREDIT RATINGS, ASSESSMENTS, OTHER OPINIONS OR PUBLICATIONS WHEN MAKING AN INVESTMENT DECISION. IF IN DOUBT YOU SHOULD CONTACT YOUR FINANCIAL OR OTHER PROFESSIONAL ADVISER. ALL INFORMATION CONTAINED HEREIN IS PROTECTED BY LAW, INCLUDING BUT NOT LIMITED TO, COPYRIGHT LAW, AND NONE OF SUCH INFORMATION MAY BE COPIED OR OTHERWISE REPRODUCED, REPACKAGED, FURTHER TRANSMITTED, TRANSFERRED, DISSEMINATED, REDISTRIBUTED OR RESOLD, OR STORED FOR SUBSEQUENT USE FOR ANY SUCH PURPOSE, IN WHOLE OR IN PART, IN ANY FORM OR MANNER OR BY ANY MEANS WHATSOEVER, BY ANY PERSON WITHOUT MOODY'S PRIOR WRITTEN CONSENT. MOODY'S CREDIT RATINGS, ASSESSMENTS, OTHER OPINIONS AND PUBLICATIONS ARE NOT INTENDED FOR USE BY ANY PERSON AS A BENCHMARK AS THAT TERM IS DEFINED FOR REGULATORY PURPOSES AND MUST NOT BE USED IN ANY WAY THAT...

pH Beauty Holdings III, Inc.: Update on Discussion of Key Credit Factors - Credit Opinion – 2020/04/29 – US$ 250.00 – ...LTM Period is September 2019 The Projected credit metrics are based on a range of EBITDA declines, but there is significant uncertainty regarding the effect of the coronavirus on earnings performance. Source: Moody's Financial MetricsTM, Moody's Projections...

Moody's downgrades pH Beauty's CFR to Caa1; outlook negative - Rating Action – 2020/04/09 – US$ 180.00 – ...ASSESSMENTS, OTHER OPINIONS AND PUBLICATIONS ARE NOT INTENDED FOR USE BY ANY PERSON AS A BENCHMARK AS THAT TERM IS DEFINED FOR REGULATORY PURPOSES AND MUST NOT BE USED IN ANY WAY THAT COULD RESULT IN THEM BEING CONSIDERED A BENCHMARK. All information contained herein is obtained by MOODY'S from sources believed by it to be accurate and reliable. Because of the possibility of human or mechanical error as well as other factors, however, all information contained herein is provided "AS IS" without warranty of any kind. MOODY'S adopts all necessary measures so that the information it uses in assigning a credit rating is of sufficient quality and from sources MOODY'S considers to be reliable including, when appropriate, independent third-party sources. However, MOODY'S is not an auditor and cannot in every instance independently verify or validate information received in the rating process or in preparing its Publications. To the extent permitted by law, MOODY'S and its directors, officers,...

pH Beauty Holdings III, Inc.: Update on Discussion of Key Credit Factors - Credit Opinion – 2019/09/30 – US$ 250.00 – ...Following the acquisition of Paris Presents in 2018 the value of ph Beauty's fixed assets were increased to fair market value. This increased the depreciation expense, which distorts the EBIT margin and EBIT to interest ratio. Thus, we estimate EBITDA margin at about 15% and EBITDA to interest at 1.1x for the LTM ended June 30, 2019. All figures and ratios are calculated using Moody's estimates and standard adjustments. Moody's Forward View is Moody's opinion and does not represent the views of the issuer. Periods are Financial Year-End unless indicated. LTM = Last Twelve Months. Source: Moody's Financial MetricsTM, Moody's estimates...