...March 30, 2020 TORONTO (S&P Global Ratings) March 30, 2020--S&P Global Ratings said today that dental support organizations (DSOs) are facing an unprecedented level of disruption from the COVID-19 pandemic, which we expect to cause severe declines in patient volumes. Our current base-case expectation is that the epidemic peaks in the June to August timeframe, suggesting a sustained period of severe revenue contraction for dental service providers. DSOs rely on volume to take advantage of economies of scale. Given the American Dental Association's (ADA's) recent recommendation that dentists postpone elective procedures, coupled with government measures that aim to restrict mobility to slow virus spread, we expect patient visits will decline dramatically, as most rated DSOs offer general dentistry services that can often be safely postponed. Therefore, the ability to manage costs and maintain sufficient liquidity becomes very important. For most DSOs, major costs include dentist compensation,...
