Research Update: Vyaire Medical Inc. 'CCC+' Rating Affirmed On Expectations For Improved Liquidity; Outlook Negative

Vyaire Medical Inc.'s performance in fiscal 2020 significantly exceeded our expectations, primarily driven by elevated demand for ventilators during the COVID-19 pandemic. At the same time, a late order cancellation from the U.S. Department of Health and Human Services (DHHS) resulted in material working capital outflows and depleted liquidity. The company's liquidity position is constrained, but we expect it will receive the order cancellation reimbursement from DHHS in 2021. We believe that will strengthen liquidity and enable Vyaire to proceed with its restructuring plan to improve profitability and cash flow generation. We are affirming our 'CCC+' issuer credit rating on Vyaire. The outlook remains negative. The negative outlook reflects the near-term risk that absent a timely DHHS payment, the company

...- Vyaire Medical Inc.'s performance in fiscal 2020 significantly exceeded our expectations, primarily driven by elevated demand for ventilators during the COVID-19 pandemic. - At the same time, a late order cancellation from the U.S. Department of Health and Human Services (DHHS) resulted in material working capital outflows and depleted liquidity. - The company's liquidity position is constrained, but we expect it will receive the order cancellation reimbursement from DHHS in 2021. We believe that will strengthen liquidity and enable Vyaire to proceed with its restructuring plan to improve profitability and cash flow generation. - We are affirming our '###+' issuer credit rating on Vyaire. The outlook remains negative. - The negative outlook reflects the near-term risk that absent a timely DHHS payment, the company may not have sufficient liquidity to meet its needs in 2021. It also reflects longer-term risks to our base case that Vyaire will improve profitability and reduce cash flow...

Research Update