Real Good Food Company, Inc. (NASDAQ:RGF), a Delaware-incorporated food products company, has amended its credit agreement, increasing its borrowing capacity. This move was detailed in a recent 8-K filing with the U.S. Securities and Exchange Commission.
On Thursday, the company's subsidiary, Real Good Foods, LLC, entered into an amendment of its existing credit facility with PMC Financial Services Group, LLC. The amendment, dated August 8, 2024, increases the revolving credit facility from $42 million to $46 million. Similarly, the amount available for overadvance loans has been raised to $46 million. Other terms of the credit agreement remain consistent with the prior amendment.
The increased financial flexibility provided by the amendment could support Real Good Food Company's operational and strategic initiatives. The company, known for its food and kindred products, operates under the SIC code 2000 and maintains its headquarters in Cherry Hill, New Jersey.
In other recent news, The Real Good Food Company, Inc. has expanded its distribution in 4,000 Walmart (NYSE:WMT) stores nationwide with the launch of its new Seasoned Chicken Breast Chunks. The product offers higher protein and lower carbohydrate content compared to leading brands, and is free from gluten and grains. This is part of the company's broader strategy to grow its Frozen Proteins portfolio. Concurrently, the company is grappling with a compliance issue with the Nasdaq Stock Market LLC for not filing its Quarterly Report on Form 10-Q for the quarter ended March 31, 2024, on time.
Real Good Foods has until June 18, 2024, and October 16, 2024, to submit plans to regain compliance for these respective issues. Despite these challenges, the company continues to provide nutritious food options with a range of low-sugar, low-carbohydrate, and high-protein products.
InvestingPro Insights
As Real Good Food Company, Inc. (NASDAQ:RGF) seeks to expand its financial capacity, a closer look at the company's financial health through InvestingPro data reveals a challenging picture. With a market capitalization of just $14.93 million and a negative P/E ratio of -0.73, the company's valuation reflects significant investor skepticism. This is further underscored by a gross profit margin of 16.8% over the last twelve months as of Q3 2023, which, while positive, is relatively low for the industry, indicating potential inefficiencies or competitive pressures.
The company's revenue has seen an uptick, growing by 18.88% over the last twelve months as of Q3 2023, yet this has not translated into bottom-line profitability. The negative operating income margin of -25.27% during the same period suggests that despite growing sales, the company is struggling to manage its expenses effectively.
InvestingPro Tips highlight several concerns for investors considering RGF. The company operates with a significant debt burden and may have trouble making interest payments on its debt, as indicated by the recent credit agreement amendment. Moreover, analysts have revised their earnings downwards for the upcoming period, and the stock has experienced high price volatility, with a price total return of -89.19% over the last year, signaling a lack of confidence from the market.
For those looking for a deeper dive into Real Good Food Company's financials and future outlook, InvestingPro offers additional tips and metrics to help investors make more informed decisions. There are currently 18 more InvestingPro Tips available for RGF, which can be accessed through the InvestingPro platform.
Despite the challenges, it's worth noting that the company's liquid assets exceed its short-term obligations, providing some cushion against immediate financial strain. As RGF navigates a competitive food industry, investors should weigh the potential of its strategic initiatives against the backdrop of its financial metrics and market performance.
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