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Fortrea hopes to cut debt ratio below 3x from 4.9x at the end of Q3
By Devika Patel
Knoxville, Tenn., Nov. 13 – Fortrea Holdings Inc. plans to get its net debt to trailing 12-months adjusted EBITDA leverage ratio between 2.5x and 3x over the medium-term from 4.9x as of Sept. 30.
Management is prioritizing net debt repayment until it reaches this target.
“Our near-term capital allocation priorities are first, infrastructure investments for timely exit of the transition services agreement; second, targeted therapeutic and technology investments to drive organic growth; and net debt repayment,” chief financial officer Jill McConnell said on the company’s third quarter ended Sept. 30 earnings conference call on Monday.
“Our target for net debt leverage ratio continues to be 2.5 to 3x over the medium term,” she said.
The company’s cash and cash equivalents were $107.5 million, and gross debt was $1,632,400,000 as of Sept. 30, 2023. Cash and cash equivalents were $112 million as of Dec. 31, 2022.
Long-term debt, less current position, was $1,572,400,000 as of Sept. 30. Current position of long-term debt as of Sept. 30 was $26.1 million.
Revenue for the third quarter was $776.4 million, compared to $762.3 million in the third quarter of 2022.
Adjusted EBITDA for the quarter was $70.5 million, a 33% decrease year-over-year, compared to adjusted EBITDA of $105.2 million in the prior year period. Year-to-date, adjusted EBITDA was $200.1 million, which decreased 32.2% year-over-year compared to adjusted EBITDA of $295.3 million for the same period last year.
Fortrea is a Durham, N.C.-based contract research organization providing comprehensive phase I through IV biopharmaceutical product and medical devices services.
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