Krystal Biotech Inc (KRYS)

Interest coverage

		Mar 31, 2024	Dec 31, 2023	Sep 30, 2023	Jun 30, 2023	Mar 31, 2023	Dec 31, 2022	Sep 30, 2022	Jun 30, 2022	Mar 31, 2022	Dec 31, 2021	Sep 30, 2021	Jun 30, 2021	Mar 31, 2021	Dec 31, 2020	Sep 30, 2020	Jun 30, 2020	Mar 31, 2020	Dec 31, 2019	Sep 30, 2019	Jun 30, 2019
Earnings before interest and tax (EBIT) (ttm)	US$ in thousands	-67,587	-109,726	-147,635	-153,093	-143,798	-145,197	-132,302	-116,503	-104,143	-68,274	-56,818	-50,846	-41,407	-33,000	-28,734	-24,396	-23,332	-22,080	-18,898	-16,005
Interest expense (ttm)	US$ in thousands	25,000	50,000	25,000	25,000	25,000	0	0	0	0	1,492	1,492	1,492	1,492	0	0	0	542	1,125	1,342	1,515
Interest coverage		-2.70	-2.19	-5.91	-6.12	-5.75	—	—	—	—	-45.76	-38.08	-34.08	-27.75	—	—	—	-43.05	-19.63	-14.08	-10.56

March 31, 2024 calculation

Interest coverage = EBIT (ttm) ÷ Interest expense (ttm)
= $-67,587K ÷ $25,000K
= -2.70

The interest coverage ratio for Krystal Biotech Inc over the periods presented indicates a concerning trend of declining ability to cover its interest expenses with its earnings before interest and taxes (EBIT). The negative values of the interest coverage ratio suggest that the company's EBIT was insufficient to cover its interest expenses during these periods.

The magnitude of the negative interest coverage ratios indicates significant financial distress as the company's earnings are unable to meet its interest obligations. This could be a warning sign for potential creditors and investors as it may indicate a higher risk of default on debt payments.

It is essential for Krystal Biotech Inc to improve its interest coverage ratio by either increasing its EBIT through higher revenues or reducing its interest expenses through debt restructuring or refinancing. Continued negative interest coverage ratios could signal ongoing financial instability and the need for strategic actions to address the company's financial health.