Citing Integra’s “slow progress in growing revenue and reducing leverage," Moody's Investors Service on Monday lowered its outlook of the service provider from positive to stable.
Moody’s, a credit rating business in New York, said Integra will not meet Moody’s prior expectation of leverage falling by the end of the year. Moody’s said it previously anticipated Integra would achieve “modest" growth in EBITDA (earnings before interest, taxes, depreciation and amortization).
“However, revenues have been approximately flat over the past several quarters and Moody's expects this to persist for the next several quarters," the credit rating business said.
But Moody’s said it anticipates Integra will maintain decent liquidity over the next year with an undrawn $60 million revolver and $33 million of cash on hand as of March 31, 2014. Integra listed net debt of $769.9 million as of March 31, 2014.
Based in Portland, Ore., Integra provides fiber-based networking, communications and technology solutions to enterprises, SMBs, government agencies, and carriers.
Moody's said it could upgrade Integra's ratings if the company generates consistent growth in revenues and positive free cash flow while its debt to EBITDA ratio approaches four times.
In the first quarter of 2014, Integra posted revenues of $143.5 million, a 2 percent decrease from $146.4 million in the fourth quarter of 2013. Most of Integra’s revenue comes from enterprise and wholesale customers, according to its first-quarter earnings materials.
Responding to Moody's, Integra said it does not provide forward-looking financial guidance but characterized its financial profile as "strong."