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Simply Good Foods Co (NASDAQ:SMPL), a leader in the food and kindred products sector with a market capitalization of $3.84 billion, has successfully amended its credit agreement to secure lower interest rates, as revealed in a recent SEC filing.
According to InvestingPro analysis, the company currently appears fairly valued and maintains a "GREAT" overall financial health score. The Denver-based company, known for manufacturing nutritional foods and snacks, entered into a Repricing Amendment on January 31, 2025, which modifies the terms of its existing Credit Agreement from July 7, 2017.
The amendment brings down the applicable rate for the company’s Initial Term Loans. For SOFR-based Initial Term Loans, the rate has been reduced from 2.50% to 2.00%, and for ABR-based Initial Term Loans, the rate has been cut from 1.50% to 1.00%. Additionally, the amendment eliminates the credit spread adjustment previously applicable to any SOFR loan. InvestingPro data shows the company operates with a moderate level of debt, maintaining a healthy debt-to-equity ratio of 0.22.
This strategic financial move also resets the six-month period during which a prepayment premium is due in the event of a prepayment associated with a Repricing Transaction (JO:TCPJ) as defined in the Credit Agreement.
The Simply Good Foods Co, which operates under the IRS number 821038121 and has its fiscal year-end on August 26, is positioned to benefit from the reduced interest rates, which could potentially lower the cost of its debt and improve its financial flexibility. The company’s strong liquidity position is evident in its impressive current ratio of 4.23, with InvestingPro data confirming that liquid assets significantly exceed short-term obligations.
With last twelve months EBITDA of $258.13 million, the company demonstrates solid operational performance. Get access to the comprehensive Pro Research Report and 7 additional ProTips for deeper insights into SMPL’s financial health.
The adjustment in the lending terms underscores Simply Good Foods Co’s proactive approach to managing its financial obligations and reflects the company’s commitment to maintaining a strong balance sheet. The information disclosed in the SEC filing is based on the company’s most recent material definitive agreement and does not include speculative insights or broader industry trends.
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