Simply Good pays $21 million term loan, draws $25 million on revolver

By Devika Patel

Knoxville, Tenn., April 6 – Simply Good Foods Co. has paid down $21 million of term loans year to date and recently drew down $25 million under its $75 million revolving credit facility.

The company’s management says it is on track to reach a net leverage ratio of less than 3.7x by the end of fiscal 2020.

“Moving on to the balance sheet and cash flow, year to date we’ve paid down $21 million of term loans and at quarter end the outstanding term loan balance was $635.5 million,” chief financial officer Todd Cunfer said on the company’s second quarter ended Feb. 29 earnings conference call on Monday.

“Given our cash balance and the outstanding term loan balance at the end of the second quarter, we are well on track to achieving our trailing 12-month net debt to adjusted EBITDA target of less than 3.7x by fiscal year-end 2020,” Cunfer said.

The company drew down on its revolver in March and now has a strong liquidity position with about $80 million in cash.

“Given the unpredictable nature of the Covid-19 crisis, in March the company began to increase finished goods inventory of some of its high-velocity products.

“In conjunction with this, as well as for other working capital and general corporate purposes, the company drew down $25 million of the $75 million available under its revolving credit facility.

“The company believes it is in a strong liquidity position and at the end of March, the company’s estimated cash balance was about $80 million,” Cunfer said.

Simply Good is a Denver-based developer, marketer and seller of nutritional foods and snacking products.

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