I thinks the rest of the world does not share your view
S&P OUTLOOK: POSITIVE
Monday February 23, 5:10 pm Eastern Time
S&P revises ESC Medical Systems outlook
Press release provided by Standard & Poor's).
NEW YORK, Feb 23 - Standard & Poor's today revised its outlook on ESC Medical Systems, Ltd. to positive from stable, following the company's acquisition of Laser Industries Ltd.
[Nasdaq:LASRF - news] for stock.
ESC's single-'B'-plus corporate credit rating and single-'B'-minus subordinated debt rating were affirmed.
The speculative-grade ratings reflect challenges associated with rapid growth from a small base and competitive and technological risks.
The Yokneam, Israel-based company develops machines that employ laser and other light-based technologies to treat cosmetic and medical conditions.
The company's ability to provide a broad platform of products to physicians that treat cosmetic and dermatological problems is a competitive advantage.
The acquisition of Laser Industries, a leading manufacturer of cosmetic and surgical laser systems, provides ESC with additional technologies, a larger customer base, and greater competitive
strength.
Importantly, the acquisition increases ESC's leading global positions in its niche areas.
However, ESC will be greatly challenged to control and further grow operations that were only one-fourth its current size just one year ago.
Competition is strong, as several other companies have developed similar devices to treat the same conditions.
Moreover, ESC's narrow product portfolio and dependence on a few products make the company vulnerable to technological and market changes.
Importantly, funds from operations to lease-adjusted debt of about 25% and more than $125 million of cash on hand provide some financial flexibility.
OUTLOOK: POSITIVE
Continued new product development, successful integration of acquisitions, and maintenance of moderate financial policies could lead to a ratings upgrade. |
