Credit FAQ: Pathway Vet Alliance LLC And The Vet Practice Management Industry

This report does not constitute a rating action. Vet practice management companies are experiencing a variety of challenges as we progress through 2023, including higher interest expenses, rising labor expenses for both doctor and support staff payroll, high attrition rates, and softening demand as we exit the COVID-19 pandemic pet boom. While we expect labor inflation to slow throughout the rest of 2023 and into 2024, we anticipate elevated interest expense will continue to pressure cash flows throughout the industry , thus we recently affirmed our negative outlook on vet practice management company Pathway Vet Alliance LLC (B-/Negative/--) in September 2023, primarily based on a projected free cash flow deficit for 2023 that will likely continue into 2024, driven by

...December 5, 2023 This report does not constitute a rating action. Vet practice management companies are experiencing a variety of challenges as we progress through 2023, including higher interest expenses, rising labor expenses for both doctor and support staff payroll, high attrition rates, and softening demand as we exit the COVID-19 pandemic pet boom. While we expect labor inflation to slow throughout the rest of 2023 and into 2024, we anticipate elevated interest expense will continue to pressure cash flows throughout the industry , thus we recently affirmed our negative outlook on vet practice management company Pathway Vet Alliance LLC (B-/Negative/--) in September 2023, primarily based on a projected free cash flow deficit for 2023 that will likely continue into 2024, driven by a variety of internal and external challenges the company is facing. We view Pathway's creditworthiness as weaker than those of the other rated vet practice management companies, including Midwest Veterinary...

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