Tear Sheet: Cardinal Parent Inc. (d/b/a Zywave)

The company increased its revenue by about 4% year over year in fiscal year 2023, primarily due to increased bookings and incremental gains from Strategic Insurance Software acquisition, which it acquired in June 2022. In December 2022, Zywave laid off about 15% of its staff, which helped it improve its S&P Global Ratings-adjusted EBITDA margin to the mid-20% area in fiscal year 2023 from about 10% in fiscal year 2022. Despite its improved EBITDA generation, the company generated an S&P Global Ratings-adjusted FOCF deficit of about $30 million because its high interest expense continued to weigh on its cash generation. Zywave paid about $85 million in interest expense in fiscal year 2023 (about a 34% increase relative to fiscal year

...June 7, 2024 Management's cost-cutting initiatives will help Zywave improve its profitability, though we still project it will generate negative free operating cash flow (FOCF) in fiscal year 2024. The company increased its revenue by about 4% year over year in fiscal year 2023, primarily due to increased bookings and incremental gains from Strategic Insurance Software acquisition, which it acquired in June 2022. In December 2022, Zywave laid off about 15% of its staff, which helped it improve its S&P Global Ratings-adjusted EBITDA margin to the mid-20% area in fiscal year 2023 from about 10% in fiscal year 2022. Despite its improved EBITDA generation, the company generated an S&P Global Ratings-adjusted FOCF deficit of about $30 million because its high interest expense continued to weigh on its cash generation. Zywave paid about $85 million in interest expense in fiscal year 2023 (about a 34% increase relative to fiscal year 2022), primarily due to its increased debt and higher interest...

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