Lamb Weston leverage rises to 2.6x; execs draw on revolver for capex

By Devika Patel

Knoxville, Tenn., April 5 – Lamb Weston Holdings, Inc. had its net debt to adjusted EBITDA leverage ratio rise to 2.6x at the end of the third quarter from 2.4x at the end of the second quarter.

Net debt increased as well, since the company drew on its revolver to fund working capital and capital expenditures, but despite this, along with dwindling cash and higher levels of current long-term debt and financing obligations, the company’s top financial executive believes the balance sheet is strong.

“Our balance sheet remains strong,” chief financial officer Bernadette Madarieta said on the company’s third quarter ended Feb. 25 earnings conference call on Thursday.

“We ended the quarter with a net debt leverage ratio of 2.6x adjusted EBITDA, up from 2.4x at the end of the fiscal second quarter.

“Our net debt increased about $270 million to $3.8 billion as we drew on our revolver to largely finance increased working capital needs during the ERP system transition as well as increased capital expenditures.

“We continue to have ample liquidity, including more than $900 million available under our revolving credit facilities,” she said.

Cash and cash equivalents were $62.3 million as of Feb. 25, 2024, compared to $304.8 million as of May 28, 2023.

Long-term debt and financing obligations, excluding current portion, were $3,175,100,000 as of Feb. 25, 2024, compared to $3,248,400,000 as of May 28, 2023.

Current portion of long-term debt and financing obligations was $139.1 million as of Feb. 25, 2024, compared to $55.3 million as of May 28, 2023.

Lamb Weston is an Eagle, Idaho-based supplier of frozen potato, sweet potato, appetizer and vegetable products to restaurants and retailers.

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