RealTruck Inc.?s financial performance has been strained by weaker organic sales volumes, higher restructuring charges, and elevated capital expenditure (capex), leading to greater-than-expected negative free operating cash flow (FOCF) in 2024 and tightening liquidity. Therefore, we revised our outlook to negative from stable and affirmed the 'B-' issuer credit rating. The negative outlook reflects the possibility that we could downgrade RealTruck over the next 12 months if EBITDA margins do not recover, combined with continued investment in working capital and elevated capex, causing negative FOCF on a sustained basis and a further drain on the company?s liquidity. The company?s EBITDA margins have been weaker over the past several quarters because of lower organic sales volumes and increased restructuring related to
