Narrowly focused as a provider of toxicology laboratory services; Significant exposure to reimbursement risk from both commercial payers and Medicare; Scale player with a leading market position in a fragmented, niche industry. Following a Medicare rate increase and continued strong volume growth, leverage is expected to decline from about 9.5x in 2016 to under 6x in 2017; Free cash flow is expected to be modestly positive in 2017. S&P Global Ratings' negative outlook on Nashville, Tenn.-based Aegis Toxicology Sciences Corp. reflects the underlying uncertainty regarding Aegis' projected cash flow, notwithstanding the recent increase to Medicare rates. Our 2017 base-case projections include Aegis sustaining leverage near 6x, generating EBITDA margins 500 basis points (bps) lower than 2015 levels (though about 1000
