S&P revises ADMI outlook to negative

S&P said it revised its outlook for ADMI Corp. (Aspen Group) to negative from stable and affirmed its ratings, including the B- senior secured debt ratings.

“The outlook revision reflects increased risks around our base case forecast. The cyber incident that occurred in April of this year will have a larger impact on Admi's financial results in 2023 than we had previously expected. We now anticipate the incident will lower the company's revenue and EBITDA by about $120 million and $110 million, respectively, compared with previous estimates of about $90 million and $60 million, respectively. This reflects additional revenue loss from the temporary shutdown of its Aspen Dental operating systems, payments made to doctors in affected offices, and a provision for bad debt,” S&P said in a press release.

The agency warned it expects Admi’s &P Global Ratings-adjusted leverage will climb above 15x this year, before retreating to the 9x-10x range in 2024 and for the company to report negative free operating cash flow of about $170 million to $190 million in 2023 before reaching about break-even in 2024.

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