...September 12, 2019 - Port Washington, N.Y.-based Medical Depot Holdings Inc. has underperformed our expectation due to continued margin pressure, operational challenges, and inefficiencies with its supply chain, logistics, and inventory management. - The persistent cash flow deficits have led the company to draw on its revolver and monetize its accounts receivable. - Adjusted leverage is now above 12x, and we expect liquidity rapidly tightening absent a near-term turnaround in performance. - We are lowering our issuer credit rating on Medical Depot to '###' from 'B-'. - We are also lowering our issue-level rating on the company's revolver and first-lien term loan to '###' from 'B-', and the issue-level rating on the second-lien debt to '##' from '###'. - The negative outlook reflects our base case for continued cash flow deficits, leading to a liquidity crisis within the next year. Absent a material, unexpected turnaround in performance, we think the risk of a restructuring or distressed...
