Research Update: LifeScan Global Corp. Outlook Revised To Stable From Negative On Improved Results; Ratings Affirmed; Debt Rated

LifeScan Global Corp.'s operating performance in the first half of 2021 has exceeded our expectations as it benefitted from its restructuring program and volume stabilization in its major markets. However, we believe the company's core blood glucose monitoring (BGM) franchise will continue to experience sales erosion in the coming years, which is why we believe the company's investment in its continuous glucose monitor (CGM) offering is critical for its long-term growth prospects. We project the proposed refinancing transaction, which reduces the annual debt amortization to only $8 million from about $100 million, will free up a significant amount of internally generated cash flow for CGM-related expenses. The transaction will enhance the company's liquidity and financial flexibility while only modestly increasing

...- LifeScan Global Corp.'s operating performance in the first half of 2021 has exceeded our expectations as it benefitted from its restructuring program and volume stabilization in its major markets. - However, we believe the company's core blood glucose monitoring (BGM) franchise will continue to experience sales erosion in the coming years, which is why we believe the company's investment in its continuous glucose monitor (CGM) offering is critical for its long-term growth prospects. - We project the proposed refinancing transaction, which reduces the annual debt amortization to only $8 million from about $100 million, will free up a significant amount of internally generated cash flow for CGM-related expenses. The transaction will enhance the company's liquidity and financial flexibility while only modestly increasing leverage to 4.5x-5.5x. - We revised the outlook to stable from negative and affirmed our 'B' issuer credit ratings on LifeScan Global Corp. In addition, we assigned our...

Research Update