Lamb Weston has ‘room’ for more debt, continues to make debt paydowns

By Devika Patel

Knoxville, Tenn., Oct. 4 – Lamb Weston Holdings, Inc. plans to keep making debt paydowns as required, but has “room” to take on more debt if needed as the company’s current 3.7x net debt to adjusted EBITDA ratio is still within its targeted leverage range of 3.5x to 4.5x.

“In terms of use of cash, we’ll continue to invest in the business,” senior vice president and chief financial officer Robert McNutt said on the company’s first quarter earnings conference call on Wednesday.

“We’re within the band of our debt service, our leverage target, but still have some room there and we’ll continue to make the required debt paydown,” he said.

Lamb Weston’s net debt to adjusted EBITDA ratio remained 3.7x at the end of the quarter, which is inside the company’s targeted range of 3.5x to 4x.

The company’s total debt at the end of the quarter was just over $2.4 billion, McNutt said, essentially flat when compared to the end of fiscal 2017.

Adjusted EBITDA increased 11% in the quarter to $191 million.

The company, a supplier of frozen potato products, is based in Kennewick, Wash.

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