Vyaire Medical Inc.

Overview Key strengths Key risks Ongoing equity contributions from the company?s sponsor, Apax Partners LLC, partially alleviates liquidity pressures. Elevated S&P Global Ratings-adjusted leverage. Good geographic and product diversity. Negative free operating cash flow (FOCF) through 2025. Weak profitability resulting from the highly competitive nature of the respiratory equipment market and the company?s high fixed costs. Limited liquidity with significant upcoming debt maturities and large cash deficits. Through the first two quarters of fiscal 2023 (ended March 31, 2023), the company?s revenue declined 12.4% to approximately $306 million compared with about $349 million in the first two quarters of fiscal 2022. The continuous sales decline primarily reflects the reduction in demand for ventilators after the COVID-19-driven spike in fiscal 2020

...We expect Vyaire's top line will remain pressured through fiscal 2023. Through the first two quarters of fiscal 2023 (ended March 31, 2023), the company's revenue declined 12.4% to approximately $306 million compared with about $349 million in the first two quarters of fiscal 2022. The continuous sales decline primarily reflects the reduction in demand for ventilators after the COVID-19-driven spike in fiscal 2020 and 2021. We project that low demand for ventilators, which represent approximately 25% of the company's sales, will continue throughout fiscal 2023, with a modest recovery towards the end of the year. In addition, Vyaire continues to face supply chain disruptions that hurt its largest segment, respiratory consumables, which represented about 50% of the company's sales in the first half of the year. Sales in this segment declined approximately 13%. We believe that after the trough in the first quarter of fiscal 2023, the company's sales will partially recover throughout the year...

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