Medical Depot Holdings Inc. Issuer Credit Rating Affirmed; Outlook Remains Negative

Global durable medical equipment (DME) manufacturer Medical Depot Holdings Inc. (also known as Drive DeVilbiss Healthcare) has successfully implemented certain cost-cutting initiatives and price increases on some products, resulting in improving operating performance and liquidity. We are affirming the 'B-' issuer credit rating. However, the outlook remains negative. We continue to believe the company faces challenges to maintain EBITDA margins resulting from an ongoing unfavorable shift in customer and channel mix, as well as greater pricing pressure in certain product categories. Should management's efforts to offset pressures with tighter selling, general, and administrative (SG&A) spending and optimization of its pricing strategy across the portfolio prove insufficient to sustain improvement in profitability, a lower rating could occur. NEW YORK (S&P Global

...+ Global durable medical equipment (DME) manufacturer Medical Depot Holdings Inc. (also known as Drive DeVilbiss Healthcare) has successfully implemented certain cost-cutting initiatives and price increases on some products, resulting in improving operating performance and liquidity. + We are affirming the 'B-' issuer credit rating. However, the outlook remains negative. + We continue to believe the company faces challenges to maintain EBITDA margins resulting from an ongoing unfavorable shift in customer and channel mix, as well as greater pricing pressure in certain product categories. + Should management's efforts to offset pressures with tighter selling, general, and administrative (SG&A) spending and optimization of its pricing strategy across the portfolio prove insufficient to sustain improvement in profitability, a lower rating could occur. NEW YORK (S&P Global Ratings) Sept. 21, 2018--S&P Global Ratings today affirmed its 'B-' issuer credit rating on Medical Depot Holdings Inc....

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