Juice Plus has experienced double digit sales declines in its fiscal year ending April 2022, reflecting declines in sales force and volumes.
Juice Plus continues to invest in IT systems, tools, training, and incentives to drive enrollment, but these investments have not halted the erosion of sales and earnings.
Moody’s is concerned that the company will face difficulty mitigating distributor, revenue and earnings declines because increased hybrid work arrangements create competition for sales consultants that desire work flexibility.
Moody’s projects negative $11 million of free cash flow in the fiscal year ended April 2023. Moody’s believes the cash balance may not be sufficient to fund the free cash flow burn, the $22.5 million of required annual term loan amortization, and repayment of the $7.5 million revolver if the facility is not extended.
The Moody’s press release:
Moody’s Investors Service (“Moody’s”) downgraded JP Intermediate B, LLC’s (dba as The Juice Plus Company, “Juice Plus”) Corporate Family Rating (“CFR”) to Caa1 from B3 and its Probability of Default Rating to Caa1-PD from B3-PD.
Moody’s also downgraded Juice Plus’ first lien senior secured revolving credit facility and term loan ratings to B3 from B2. The rating outlook is negative.
The rating downgrades reflect Moody’s expectation for debt-to-EBITDA (Moody’s adjusted) to