8-K
Utz Brands, Inc. (UTZ)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): March 3, 2022
Utz Brands, Inc.
(Exact name of registrant as specified in its charter)
| Delaware | 001-38686 | 85-2751850 |
|---|---|---|
| (State or other jurisdiction<br>of incorporation) | (Commission File Number) | (IRS Employer<br>Identification No.) |
900 High Street
Hanover, PA 17331
(Address of principal executive offices, including zip code)
Registrant’s telephone number, including area code: (717) 637-6644
N/A
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered |
|---|---|---|
| Class A Common Stock, par value $0.0001 per share | UTZ | New York Stock Exchange |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Item 2.02 Results of Operations and Financial Condition.
On March 3, 2022, Utz Brands, Inc. (the "Company") announced via press release the Company’s financial results for the fourth quarter and fiscal year ended January 2, 2022. A copy of the Company’s press release is attached hereto as Exhibit 99.1 to this Current Report on Form 8-K and is hereby incorporated by reference into this Item 2.02. The information and exhibit contained in this Item 2.02 is being furnished and shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934 as amended (the “Exchange Act”), nor shall it be incorporated by reference into any filing under the Securities Act of 1933, as amended (the “Securities Act”), except as shall be expressly set forth by specific reference in such filing.
Item 7.01 Regulation FD Disclosure
The Company will hold a conference call and webcast on March 3, 2022 (see information in the press release attached hereto as Exhibit 99.1 and under “News” of the Company’s website https://investors.utzsnacks.com). A copy of the slide materials to be discussed at the conference call and webcast is being furnished pursuant to Regulation FD as Exhibit 99.2 to this Current Report on Form 8-K and is hereby incorporated by reference into this Item 7.01. The information and exhibit contained in this Item 7.01 is being furnished and shall not be deemed “filed” for purposes of Section 18 of the Exchange Act, nor shall it be incorporated by reference into any filing under the Securities Act, except as shall be expressly set forth by specific reference in such filing.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits
| Exhibit No. | Description |
|---|---|
| 99.1 | Utz Press Release (datedMarchpressrelease-2021q4earning.htm3, 2022). |
| 99.2 | Presentation of Utz Brands, Inc. Q42021 Earnings CallMarch 3, 2022) |
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document). |
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
Utz Brands, Inc.
Dated: March 3, 2022
By: /s/ Ajay Kataria
Name: Ajay Kataria
Title: Executive Vice President, Chief Financial Officer
Document
Utz Brands Reports Fourth Quarter and Full-Year 2021 Financial Results
Hanover, PA – March 3, 2022 – Utz Brands, Inc. (NYSE: UTZ) (“Utz” or the “Company”), a leading U.S. manufacturer of branded salty snacks, today reported financial results for the Company’s fiscal fourth quarter and full-year ended January 2, 2022.
“2021 marked our first year as a public company, and I’m incredibly proud of our Utz team. In a challenging supply chain environment, we made the trade-off to ensure strong levels of service to our customers to meet the robust demand from our consumers while absorbing higher costs to do so. This decision impacted our profits in the short term but was the right decision to benefit and accelerate our long-term growth.” said Dylan Lissette, Chief Executive Officer of Utz.
Mr. Lissette continued, “Our fourth-quarter results reflect this trade-off with organic net sales growth accelerating meaningfully versus previous quarters, but earnings being impacted by higher than anticipated industry-wide supply chain costs. Importantly, we took significant pricing actions in 2021, as seen in our building net price realization improvements throughout each quarter, and this trend has continued through year-to-date 2022. These pricing actions, along with our productivity programs, give us confidence that we will be able to offset the continuing high inflation as we exit 2022 and into 2023.”
Fourth Quarter and Full-Year 2021 Financial Highlights
| (in $millions, except per share amounts) | 14-weeks Ended January 3, 2021 | 13-weeks Ended January 2, 2022 | % Change | 53-weeks Ended January 3, 2021(1) | 52-weeks Ended January 2, 2022 | % Change | ||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Net Sales | $ | 246.3 | $ | 300.9 | 22.2 | % | $ | 964.3 | $ | 1,180.7 | 22.4 | % | ||||
| Pro Forma Net Sales(1,2) | 275.5 | 300.9 | 9.2 | % | 1,173.4 | 1,184.3 | 0.9 | % | ||||||||
| Gross Profit | 81.6 | 90.5 | 10.9 | % | 332.7 | 383.9 | 15.4 | % | ||||||||
| Adjusted Gross Profit(2) | 90.5 | 103.3 | 14.1 | % | 365.4 | 424.9 | 16.3 | % | ||||||||
| Adjusted Gross Profit Margin(2) | 36.7 | % | 34.3 | % | (241) | bps | 37.9 | % | 36.0 | % | (191) | bps | ||||
| Net Income (Loss) | (87.5) | (16.2) | nm | (104.5) | 8.0 | nm | ||||||||||
| Earnings Per Share | nm | nm | nm | |||||||||||||
| Adjusted Net Income(2) | 25.5 | 16.0 | (37.3) | % | 68.8 | 77.5 | 12.6 | % | ||||||||
| Adjusted EBITDA(2) | 34.0 | 37.7 | 10.9 | % | 133.9 | 156.2 | 16.7 | % | ||||||||
| Adjusted EBITDA Margin(2) | 13.8 | % | 12.5 | % | (128) | bps | 13.9 | % | 13.2 | % | (66) | bps | ||||
| Diluted Earnings Per Share | nm | $ | (0.14) | nm | nm | $ | 0.22 | nm | ||||||||
| Adjusted Earnings Per Share(2) | nm | $ | 0.11 | nm | nm | $ | 0.54 | nm |
(1) Pro Forma Net Sales assumes the Company owned H.K. Anderson, Truco Enterprises, and Festida Foods on the first day of fiscal 2020, and that the Company owned Vitner’s on the first day of fiscal February 2020. Pro Forma Net Sales are on an estimated comparable 13-week basis.
(2) See description of Non-GAAP financial measures and reconciliations of GAAP measures to Non-GAAP adjusted measures in the tables that accompany this release.
Fourth Quarter Growth Highlights
For the 13-week period ended January 2, 2022, the Company’s retail sales as measured by IRI MULO-C increased 10.9% on a two-year CAGR basis versus the Salty Snack Category growth of 10.5% for the same period. The Company’s Power Brands’ retail sales increased 12.5% on a two-year CAGR basis and increased to 87% of the Company’s retail sales. Power Brands’ sales growth during the two-year period was led by Utz®, ON THE BORDER®, Zapp’s®, TORTIYAHS!®, Golden Flake® Pork Skins, Hawaiian®, and TGI Fridays®. Consistent with the Company’s expectations, the two-year CAGR retail sales of the Company’s Foundation Brands increased 1.6% reflecting the continued strategy to focus its resources on its Power Brands.
IRI Retail Sales Growth Summary(1)
| 52-Weeks Ended January 2, 2022 | ||||||||
|---|---|---|---|---|---|---|---|---|
| (in millions) | YoY Change | 2-Year CAGR | YoY Change | 2-Year CAGR | ||||
| Total Retail Sales Growth(1) | ||||||||
| Salty Snack Category | 12.7 | % | 10.5 | % | 6.8 | % | 8.1 | % |
| Utz | 11.7 | % | 10.9 | % | 1.7 | % | 8.3 | % |
| Power Brands | 13.5 | % | 12.5 | % | 3.0 | % | 9.9 | % |
| Foundation Brands(2) | 0.4 | % | 1.6 | % | (6.1) | % | (0.4) | % |
| Sales by Geography Growth(1) | ||||||||
| Core | ||||||||
| Salty Snack Category | 11.5 | % | 9.4 | % | 5.0 | % | 7.1 | % |
| Utz | 9.4 | % | 7.7 | % | (1.4) | % | 5.1 | % |
| Power Brands | 11.2 | % | 9.0 | % | (0.5) | % | 6.2 | % |
| Expansion | ||||||||
| 14.9 | % | |||||||
| Salty Snack Category | 12.6 | % | 11.1 | % | 7.9 | % | 8.9 | % |
| Utz | 14.5 | % | 14.5 | % | 3.8 | % | 11.8 | % |
| Power Brands | 16.7 | % | 17.5 | % | 6.0 | % | 14.9 | % |
| Emerging | ||||||||
| Salty Snack Category | 13.4 | % | 10.9 | % | 7.0 | % | 8.5 | % |
| Utz | 13.3 | % | 14.3 | % | 4.9 | % | 12.1 | % |
| Power Brands | 14.3 | % | 15.3 | % | 5.8 | % | 13.4 | % |
All values are in US Dollars.
(1) IRI Custom Panel, Total US MULO + C, on a pro forma basis.
(2) IRI does not include Partner Brands and Private Label retail sales.
Fiscal Year 2022 Outlook
For fiscal 2022, the Company expects continued strong, top-line momentum with total net sales growth of approximately 7-10%, and Organic Net Sales growth of approximately 4-6%, which is above its long-term growth algorithm of 3-4%. However, with cost inflation expected to continue and the Company investing to support its significant new customer growth, the Company expects fiscal 2022 Adjusted EBITDA to grow modestly versus fiscal 2021 Adjusted EBITDA of $156.2 million. The Company expects
stronger Adjusted EBITDA performance in the second half of fiscal 2022, and in fiscal 2023, as the benefits of the Company’s pricing actions and productivity programs continue to build.
Additionally, in fiscal year 2022, the Company expects capital expenditures in the range of $50 million to $60 million. The expected increase in capital expenditures, compared to fiscal 2021, is driven primarily by higher return productivity projects, in particular the expansion of Utz’s largest warehouse across its network located in Hanover, PA, which is expected to drive improved inventory management and reduce costs.
Finally, the company expects an effective tax rate of approximately 20% (normalized GAAP basis tax expense, which excludes one-time items) and net leverage at year-end fiscal 2022 to be consistent with year-end fiscal 2021.
With respect to projected fiscal year 2022 Adjusted EBITDA, a quantitative reconciliation is not available without unreasonable efforts due to the high variability, complexity, and low visibility with respect to certain items, which are excluded from Adjusted EBITDA. We expect the variability of these items to have a potentially unpredictable, and potentially significant, impact on our future financial results.
Fourth Quarter 2021 Financial Results
See the description of the Non-GAAP financial measures mentioned in this press release and reconciliations of the Non-GAAP adjusted measures to the GAAP measures in the tables that accompany this release. In addition, see the description of the periods representing the Predecessor and Successor periods in the Company's Form 10-K for the fiscal year ended, January 2, 2022.
Net sales in the 13-week fourth quarter of 2021 increased 22.2% to $300.9 million compared to $246.3 million in the 14-week fourth quarter of 2020. As a reminder, the Company’s fourth quarter 2020 results benefited from the impact of the 53rd week in fiscal year 2020 and estimates the “extra week” contributed approximately $16 million in net sales. Net sales in the fourth quarter on a comparable 13-week basis increased 30.6%.
The increase in net sales for the fourth quarter of 2021 was driven by acquisitions of +23.2% and Organic Net Sales growth of 7.4%. Organic Net Sales growth was driven by favorable price/mix of +6.0% and volume gains of 2.9%, partially offset by the Company’s continued shift to independent operators (“IO”) and the resulting increase in sales discounts associated with this that impacted net sales growth by (1.5%). Excluding the impact to net sales from the shift to independent operators, Organic Net Sales would have increased 8.9% versus last year.
Pro Forma Net Sales increased 9.2% on a comparable 13-week basis to $300.9 as compared to Pro Forma Net Sales of $275.5 million in the fourth quarter of 2020. The year-over-year Pro Forma Net Sales growth rate assumes the Company owned H.K. Anderson, Truco Enterprises, and Festida Foods on the first day of fiscal year 2020, and that the Company owned Vitner’s on the first day of fiscal February 2020.
Pro Forma Net Sales increased 7.9% on a two-year CAGR basis, which is an improvement from 6.4% in the third quarter. The fourth quarter Pro Forma Net Sales two-year CAGR assumes the Company owned Kennedy Endeavors, Kitchen Cooked, H.K. Anderson, Truco Enterprises, and Festida Foods on the first day of fiscal year 2019, and that the Company owned Vitner’s on the first day of fiscal February 2019.
Gross profit was $90.5 million, or 30.1% as a percentage of net sales. Adjusted Gross Profit increased 14.1% to $103.3 million, or 34.3% as a percentage of net sales, compared to Adjusted Gross Profit of $90.5 million, or 36.7% as a percentage of net sales, in the prior-year period. The decrease in Adjusted Gross Profit as a percentage of net sales was primarily driven by higher commodity, transportation, and
labor inflation, which are collectively the result of industry-wide supply chain challenges. Additionally, the Company estimates that the continued shift to independent operators impacted Adjusted Gross Margins by approximately 150 basis points, but with offsetting benefits in Selling, General, and Administrative (“SG&A”) expense. These headwinds were partially offset by higher net price realization, improved mix, and ongoing benefits from the Company’s productivity programs.
Net loss of $(16.2) million compared to a net loss of $(87.5) million in the prior-year period. Adjusted Net Income in the fourth quarter of 2021 decreased 37.3% to $16.0 million compared to Adjusted Net Income of $25.5 million in the prior-year period.
Adjusted EBITDA increased 10.9% to $37.7 million, or 12.5% as a percentage of net sales, for the 13-week fourth quarter of 2021, compared to Adjusted EBITDA of $34.0 million, or 13.8% as a percentage of net sales, in the 14-week fourth quarter of 2020. The Company estimates the “extra week” in fiscal year 2020 contributed approximately $3 million in Adjusted EBITDA. The decrease in Adjusted EBITDA margin was driven by the Adjusted Gross Profit as a percentage of sales performance as described above, partially offset by lower SG&A expenses as a percentage of sales versus the prior-year period.
Balance Sheet and Cash Flow Highlights
•As of January 2, 2022:
◦Cash on hand of $41.9 million and $96.9 million was available under the Company’s revolving credit facility, providing liquidity of approximately $139 million.
◦Net debt of $817.8 million as of January 2, 2022, resulting in a Pro Forma Net Leverage ratio of 4.7x based on trailing twelve months Normalized Further Adjusted EBITDA of $175.5 million.
•For the 52-weeks ended January 2, 2022:
◦Cash flow from operations of $48.4 million.
◦Capital expenditures of $31.7 million.
Conference Call and Webcast Presentation
The Company will host a conference call to discuss these results today at 8:30 a.m. Eastern Time. Please visit the “Events & Presentations” section of Utz’s Investor Relations website at https://investors.utzsnacks.com/ to access the live listen-only webcast and presentation. Participants can also dial in over the phone by calling 1 (888) 510-2008. The Event Plus passcode is 1774171. The Company has also posted presentation slides and additional supplemental financial information, which are available now on Utz’s Investor Relations website.
A replay will be archived online and is also available telephonically approximately two hours after the call concludes through Thursday, March 10, 2022, by dialing 1-800-770-2030, and entering confirmation code 1774171.
About Utz Brands, Inc.
Utz Brands, Inc. (NYSE: UTZ) manufactures a diverse portfolio of savory snacks through popular brands including Utz®, ON THE BORDER® Chips & Dips, Golden Flake®, Zapp’s®, Good Health®, Boulder Canyon®, Hawaiian Brand®, and TORTIYAHS!®, among others.
After a century with strong family heritage, Utz continues to have a passion for exciting and delighting consumers with delicious snack foods made from top-quality ingredients. Utz’s products are distributed nationally through grocery, mass merchandisers, club, convenience, drug, and other channels. Based in
Hanover, Pennsylvania, Utz operates seventeen (17) facilities located in Alabama, Arizona, Illinois, Indiana, Louisiana, Massachusetts, Michigan, Nevada, North Carolina, Pennsylvania, and Washington. For more information, please visit www.utzsnacks.com or call 1‐800‐FOR‐SNAX.
Investors and others should note that Utz announces material financial information to its investors using its investor relations website (https://investors.utzsnacks.com/investors/default.aspx), SEC filings, press releases, public conference calls, and webcasts. Utz uses these channels, as well as social media, to communicate with our stockholders and the public about the Company, the Company’s products and other issues. It is possible that the information that Utz posts on social media could be deemed to be material information. Therefore, Utz encourages investors, the media, and others interested in the Company to review the information posted on the social media channels listed on Utz’s investor relations website.
Investor Contact
Kevin Powers
Utz Brands, Inc.
kpowers@utzsnacks.com
Media Contact
Kevin Brick
Utz Brands, Inc.
kbrick@utzsnacks.com
Forward-Looking Statements
This press release includes certain statements that are not historical facts but are “forward-looking statements” within the meaning of the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995, as amended. The forward-looking statements generally are accompanied by or include, without limitation, statements such as “will”, “expect”, “intends”, “goal” or other similar words, phrases or expressions. These forward-looking statements include the expected effects from the COVID-19 pandemic, future plans for Utz Brands, Inc. and its direct and indirect subsidiaries (“UBI”), the estimated or anticipated future results and benefits of the Company’s future plans and operations, future capital structure, future opportunities for UBI, and other statements that are not historical facts. These statements are based on the current expectations of the Company’s management and are not predictions of actual performance. These statements are subject to a number of risks and uncertainties and UBI’s business and actual results may differ materially. Factors that may cause such differences include, but are not limited to: the risk that the Company may not recognize the anticipated benefits of recently completed business combinations and acquisitions recently completed by the Company (collectively, the “Business Combinations”), which may be affected by, among other things, competition and the ability of the Company to grow and manage growth profitably and retain its key employees; the ability of UBI to close planned acquisitions; changes in applicable law or regulations; costs related to the Business Combinations and other planned acquisitions; the inability of the Company to maintain the listing of the Company’s Class A Common Stock on the New York Stock Exchange; the inability of the Company to develop and maintain effective internal controls; the risk that the Company’s gross profit margins may be adversely impacted by a variety of factors, including variations in raw materials pricing, retail customer requirements and mix, sales velocities and required promotional support; changes in consumers’ loyalty to the Company’s brands due to factors beyond the Company’s control; changes in demand for the Company’s products affected by changes in consumer preferences and tastes or if the Company is unable to innovate or market its products effectively; costs associated with building brand loyalty and interest in the Company’s products, which may be affected by the Company’s competitors’ actions that result in the Company’s products not suitably differentiated from the products of competitors; fluctuations in results of operations of the Company from quarter to quarter because of changes in promotional activities; the possibility that the Company may be adversely affected by other economic, business or competitive factors; and other risks and uncertainties set forth in the section entitled “Risk Factors” and “Forward-Looking Statements” in the Company’s Annual Report on Form 10-K filed with SEC for the fiscal year ended January 2, 2022 and other reports filed by the Company with the Commission. In addition, forward-looking statements provide the Company’s expectations, plans or forecasts of future events and views as of the date of this communication. Except as required by law, the Company undertakes no obligation to update such statements to reflect events or circumstances arising after such date, and cautions investors not to place undue reliance on any such forward-looking statements. These forward-looking statements should not be relied upon as representing the Company’s assessments as of any date subsequent to the date of this communication. The Company cautions investors not to place undue reliance upon any forward-looking statements, which speak only as of the date made. The Company does not undertake or accept any obligation or undertaking to release publicly any updates or revisions to any forward-looking statements to reflect any change in its expectations or any change in events, conditions or circumstances on which any such statement is based, except as otherwise required by law.
Non-GAAP Financial Measures and Other Key Measures:
Utz uses non-GAAP financial information and believes it is useful to investors as it provides additional information to facilitate comparisons of historical operating results, identify trends in our underlying operating results and provides additional insight and transparency on how we evaluate the business. We use non-GAAP financial measures to budget, make operating and strategic decisions, and evaluate our
performance. These non-GAAP financial measures do not represent financial performance in accordance with GAAP and may exclude items that are significant in understanding and assessing financial results. Therefore, these measures should not be considered in isolation or as an alternative to net income, cash flows from operations or other measures of profitability, liquidity or performance under GAAP. You should be aware that the presentation of these measures may not be comparable to similarly-titled measures used by other companies.
Management believes that non-GAAP financial measures should be considered as supplements to the GAAP reported measures, should not be considered replacements for, or superior to, the GAAP measures and may not be comparable to similarly named measures used by other companies. We believe that these non-GAAP measures of financial results provide useful information to investors regarding certain financial and business trends relating to the financial condition and results of operations of the Company to date and that the presentation of non-GAAP financial measures is useful to investors in the evaluation of our operating performance compared to other companies in the salty snack industry, as similar measures are commonly used by the companies in this industry. These non-GAAP financial measures are subject to inherent limitations as they reflect the exercise of judgments by management about which expense and income are excluded or included in determining these non-GAAP financial measures. The non-GAAP financial measures are not recognized in accordance with GAAP and should not be viewed as an alternative to GAAP measures of performance.
Utz uses the following non-GAAP financial measures in its financial communications, and in the future could use others:
•Pro Forma Net Sales
•Organic Net Sales
•Adjusted Gross Profit
•Adjusted Gross Profit as % of Net Sales (Adjusted Gross Profit Margin)
•Pro Forma Gross Profit
•Pro Forma Adjusted Gross Profit
•Adjusted Selling, General, and Administrative Expense
•Adjusted Selling, General and Administrative Expense as % of Net Sales
•Adjusted Net Income
•Adjusted Earnings Per Share
•EBITDA
•Adjusted EBITDA
•Adjusted EBITDA as % of Net Sales (Adjusted EBITDA Margin)
•Further Adjusted EBITDA
•Further Adjusted EBITDA as % of Pro Forma Net Sales (Further Adjusted EBITDA Margin)
•Normalized Further Adjusted EBITDA
Pro Forma Net Sales is defined as net sales including the historical net sales relating to the pre-acquisition periods of H.K. Anderson, Truco Enterprises, Vitner’s, and Festida Foods acquisitions, assuming that the Company acquired H.K. Anderson, Truco Enterprises, and Festida Foods on the first day of the applicable fiscal year, and that the Company owned Vitner’s on the first day of fiscal February of the applicable fiscal year.
Organic Net Sales is defined as net sales excluding the impact of acquisitions.
Adjusted Gross Profit represents Gross Profit excluding Depreciation and Amortization expense, a non-cash item. In addition, Adjusted Gross Profit excludes the impact of costs that fall within the categories of non-cash adjustments and non-recurring items such as those related to stock-based compensation,
hedging and purchase commitments adjustments, asset impairments, acquisition, and integration costs, business transformation initiatives, and financing-related costs. Adjusted Gross Profit is one of the key performance indicators that our management uses to evaluate operating performance. We also report Adjusted Gross Profit as a percentage of Net Sales as an additional measure for investors to evaluate our Adjusted Gross Profit margins on Net Sales.
Pro Forma Gross Profit is defined as Gross Profit including the historical Gross Profit relating to the pre-acquisition periods of H.K. Anderson, Truco Enterprises, Vitner’s, and Festida Foods acquisitions, assuming that the Company acquired H.K. Anderson, Truco Enterprises, and Festida Foods on the first day of the applicable fiscal year, and that the Company owned Vitner’s on the first day of fiscal February of the applicable fiscal year.
Pro Forma Adjusted Gross Profit is defined as Adjusted Gross Profit including the historical Adjusted Gross Profit relating to the pre-acquisition periods of H.K. Anderson, Truco Enterprises, Vitner’s, and Festida Foods acquisitions, assuming that the Company acquired H.K. Anderson, Truco Enterprises, and Festida Foods on the first day of the applicable fiscal year, and that the Company owned Vitner’s on the first day of fiscal February of the applicable fiscal year.
Adjusted Selling, General, and Administrative Expense is defined as all Selling, General, and Administrative expense excluding Depreciation and Amortization expense, a non- cash item. In addition, Adjusted Selling, General and Administrative Expenses exclude the impact of costs that fall within the categories of non-cash adjustments and non-recurring items such as those related to stock-based compensation, hedging and purchase commitments adjustments, asset impairments, acquisition and integration costs, business transformation initiatives, and financing-related costs. We also report Adjusted Selling, General and Administrative Expense as a percentage of Net Sales as an additional measure for investors to evaluate our Adjusted Selling, General, and Administrative margin on Net Sales.
Adjusted Net Income is defined as Net Income excluding the additional Depreciation and Amortization expense, a non-cash item, related to the Business Combination with Collier Creek Holdings and the acquisitions of Kennedy Endeavors, Kitchen Cooked, Inventure, Golden Flake, and Truco Enterprises. In addition, Adjusted Net Income is also adjusted to exclude deferred financing fees, interest income, and expense relating to IO loans and certain non-cash items, such as those related to stock-based compensation, hedging, and purchase commitments adjustments, asset impairments, acquisition and integration costs, business transformation initiatives, remeasurement of warrant liabilities and financing-related costs. Lastly, Adjusted Net Income normalizes the income tax provision to account for the above-mentioned adjustments.
Adjusted Earnings Per Share is defined as Adjusted Net Income (as defined, herein) divided by the weighted average shares outstanding for each period on a fully diluted basis, assuming the Private Placement Warrants are net settled and the Shares of Class V Common Stock held by Continuing Members is converted to Class A Common Stock.
EBITDA is defined as Net Income before Interest, Income Taxes, and Depreciation and Amortization.
Adjusted EBITDA is defined as EBITDA further adjusted to exclude certain non-cash items, such as stock-based compensation, hedging and purchase commitments adjustments, and asset impairments; acquisition and integration costs; business transformation initiatives; and financing-related costs. Adjusted EBITDA is one of the key performance indicators we use in evaluating our operating performance and in making financial, operating, and planning decisions. We believe Adjusted EBITDA is useful to the users of this release and financial information contained in the release in the evaluation of Utz’s operating performance compared to other companies in the salty snack industry, as similar measures are commonly used by companies in this industry. We have historically reported an Adjusted EBITDA metric to investors and banks for covenant compliance. We also provide in this release, Adjusted EBITDA as a percentage of Net Sales, as an additional measure for readers to evaluate our Adjusted EBITDA margins on Net Sales.
Further Adjusted EBITDA is defined as Adjusted EBITDA after giving effect to pre-acquisition Adjusted EBITDA of H.K. Anderson, Truco Enterprises, Vitner’s, and Festida Foods acquisitions. We also report Further Adjusted EBITDA as a percentage of Pro Forma Net Sales as an additional measure to evaluate our Further Adjusted EBITDA margins on Pro Forma Net Sales. This definition does not include adjustments for estimated unrealized cost synergies, estimated unrealized public company costs or trade spend normalization, as reflected in Normalized Further Adjusted EBITDA.
Normalized Further Adjusted EBITDA is defined as Further Adjusted EBITDA including adjustments for estimated unrealized cost synergies related to the acquisition of H.K. Anderson, Truco Enterprises, Vitner’s, and Festida Foods acquisitions. In addition, Normalized Further Adjusted EBITDA also adjusts for estimated unrealized public company costs, and a one-time trade spend normalization adjustment at the end of 2019.
Management believes that the non-GAAP financial measures are meaningful to investors because they increase transparency and assists investors to understand and analyze our ongoing operational performance. The financial measures are shown as supplemental disclosures in this release because they are widely used by the investment community for analysis and comparative evaluation. They also provide additional metrics to evaluate the Company’s operations and, when considered with both the GAAP results and the reconciliation to the most comparable GAAP measures, provide a more complete understanding of the Company’s business than could be obtained absent this disclosure. The non-GAAP measures are not and should not be considered an alternative to the most comparable GAAP measures or any other figure calculated in accordance with GAAP, or as an indicator of operating performance. The Company’s calculation of the non-GAAP financial measures may differ from methods used by other companies. Management believes that the non-GAAP measures are important to have an understanding of the Company’s overall operating results in the periods presented. The non-GAAP financial measures are not recognized in accordance with GAAP and should not be viewed as an alternative to GAAP measures of performance. As new events or circumstances arise, these definitions could change. When the definitions change, we will provide the updated definitions and present the related non-GAAP historical results on a comparable basis.
(Tables to Follow)
Utz Brands, Inc.
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)
For the thirteen weeks ended January 2, 2022 and fourteen weeks ended January 3, 2021
(In thousands, except share information)
(Unaudited)
| Successor | ||||
|---|---|---|---|---|
| Thirteen weeks ended January 2, 2022 | Fourteen weeks ended January 3, 2021 | |||
| Net sales | $ | 300,932 | $ | 246,276 |
| Cost of goods sold | 210,451 | 164,672 | ||
| Gross profit | 90,481 | 81,604 | ||
| Selling, general and administrative expenses | ||||
| Selling | 60,200 | 46,757 | ||
| General and administrative | 36,157 | 35,420 | ||
| Total selling, general and administrative expenses | 96,357 | 82,177 | ||
| Gain on sale of assets | ||||
| Gain on disposal of property, plant and equipment, net | 169 | 104 | ||
| (Loss) gain on sale of routes, net | (270) | 690 | ||
| Total (loss) gain on sale of assets | (101) | 794 | ||
| (Loss) income from operations | (5,977) | 221 | ||
| Other income (expense) | ||||
| Interest expense | (8,225) | (11,483) | ||
| Other income | 1,335 | 265 | ||
| Gain (loss) on remeasurement of warrant liability | 2,520 | (73,843) | ||
| Other income (expense), net | (4,370) | (85,061) | ||
| Loss before income tax expense | (10,347) | (84,840) | ||
| Income tax expense | 5,835 | 2,622 | ||
| Net income (loss) | (16,182) | (87,462) | ||
| Net loss attributable to noncontrolling interest | 8,435 | 5,651 | ||
| Net loss attributable to controlling interest | $ | (7,747) | $ | (81,811) |
| Earnings per Class A Common stock: (in dollars) | ||||
| Basic | $ | (0.10) | $ | (1.32) |
| Weighted-average shares of Class A Common stock outstanding | ||||
| Basic | 77,571,190 | 61,897,828 | ||
| Other comprehensive loss: | ||||
| Change in value of interest rate swap | $ | 676 | $ | 672 |
| Comprehensive loss | $ | (7,071) | $ | (81,139) |
Utz Brands, Inc.
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)
For the year ended January 2, 2022, fiscal periods ended January 3, 2021 and August 28, 2020, and year ended December 29, 2019
(In thousands, except share information)
| Successor | Predecessor | |||||||
|---|---|---|---|---|---|---|---|---|
| For the year ended January 2, 2022 | From <br>August 29, 2020<br>through <br>January 3, 2021 | From <br>December 30, 2019<br>through <br>August 28, 2020 | For the year ended December 29, 2019 | |||||
| Net sales | $ | 1,180,713 | $ | 325,648 | $ | 638,662 | $ | 768,228 |
| Cost of goods sold | 796,804 | 219,977 | 411,595 | 514,430 | ||||
| Gross profit | 383,909 | 105,671 | 227,067 | 253,798 | ||||
| Selling, general and administrative expenses | ||||||||
| Selling | 249,352 | 63,616 | 131,579 | 163,589 | ||||
| General and administrative | 125,855 | 43,871 | 64,050 | 64,723 | ||||
| Total selling, general and administrative expenses | 375,207 | 107,487 | 195,629 | 228,312 | ||||
| Gain on sale of assets | ||||||||
| Gain on disposal of property, plant and equipment, net | 1,133 | 109 | 79 | 6,028 | ||||
| Gain on sale of routes, net | 731 | 749 | 1,264 | 7,232 | ||||
| Total gain on sale of assets | 1,864 | 858 | 1,343 | 13,260 | ||||
| Income (loss) from operations | 10,566 | (958) | 32,781 | 38,746 | ||||
| Other income (expense) | ||||||||
| Interest expense | (34,708) | (13,301) | (26,659) | (48,388) | ||||
| Other income (expense) | 3,551 | (2,058) | 1,271 | (576) | ||||
| Gain (loss) on remeasurement of warrant liability | 36,675 | (91,851) | — | — | ||||
| Other income (expense), net | 5,518 | (107,210) | (25,388) | (48,964) | ||||
| Income (loss) before income taxes | 16,084 | (108,168) | 7,393 | (10,218) | ||||
| Income tax expense (benefit) | 8,086 | (267) | 3,973 | 3,146 | ||||
| Net income (loss) | 7,998 | (107,901) | 3,420 | (13,364) | ||||
| Net loss (income) attributable to noncontrolling interest | 12,557 | 7,971 | — | (2,808) | ||||
| Net income (loss) attributable to controlling interest | $ | 20,555 | $ | (99,930) | $ | 3,420 | $ | (16,172) |
| Earnings per share of Class A Common Stock:<br><br>(in dollars) | ||||||||
| Basic | $ | 0.27 | $ | (1.64) | ||||
| Diluted | $ | 0.25 | $ | (1.64) | ||||
| Weighted-average shares of Class A Common Stock outstanding | ||||||||
| Basic | 76,677,981 | 61,085,943 | ||||||
| Diluted | 81,090,229 | 61,085,943 | ||||||
| Other comprehensive gain (loss): | ||||||||
| Change in fair value of interest rate swap | $ | 2,791 | $ | 924 | $ | (7,463) | $ | 1,408 |
| Comprehensive income (loss) | $ | 23,346 | $ | (99,006) | $ | (4,043) | $ | (14,764) |
Utz Brands, Inc.
CONSOLIDATED BALANCE SHEETS
January 2, 2022 and January 3, 2021
(In thousands)
| As of<br>January 2, 2022 | As of<br>January 3, 2021 | |||
|---|---|---|---|---|
| ASSETS | ||||
| Current Assets | ||||
| Cash and cash equivalents | $ | 41,898 | $ | 46,831 |
| Accounts receivable, less allowance of $1,391 and $239, respectively | 131,388 | 118,305 | ||
| Inventories | 79,517 | 59,810 | ||
| Prepaid expenses and other assets | 18,395 | 11,573 | ||
| Current portion of notes receivable | 6,706 | 7,666 | ||
| Total current assets | 277,904 | 244,185 | ||
| Non-current Assets | ||||
| Property, plant and equipment, net | 303,807 | 270,416 | ||
| Goodwill | 915,438 | 862,183 | ||
| Intangible assets, net | 1,142,509 | 1,171,709 | ||
| Non-current portion of notes receivable | 20,725 | 20,000 | ||
| Other assets | 55,963 | 15,671 | ||
| Total non-current assets | 2,438,442 | 2,339,979 | ||
| Total assets | $ | 2,716,346 | $ | 2,584,164 |
| LIABILITIES AND EQUITY | ||||
| Current Liabilities | ||||
| Current portion of term debt | $ | 11,414 | $ | 469 |
| Current portion of other notes payable | 9,957 | 9,018 | ||
| Accounts payable | 95,369 | 57,254 | ||
| Accrued expenses and other | 71,280 | 80,788 | ||
| Current portion of warrant liability | — | 52,580 | ||
| Total current liabilities | 188,020 | 200,109 | ||
| Non-current portion of term debt | 830,548 | 778,000 | ||
| Non-current portion of other notes payable | 24,709 | 24,564 | ||
| Non-current accrued expenses and other | 55,838 | 37,771 | ||
| Non-current warrant liability | 46,224 | 85,032 | ||
| Deferred tax liability | 136,334 | 73,786 | ||
| Total non-current liabilities | 1,093,653 | 999,153 | ||
| Total liabilities | 1,281,673 | 1,199,262 | ||
| Commitments and contingencies | ||||
| Equity | ||||
| Shares of Class A Common Stock, $0.0001 par value; 1,000,000,000 shares authorized; 77,570,422 and 71,094,714 shares issued and outstanding as of January 2, 2022 and January 3, 2021, respectively. | 8 | 7 | ||
| Shares of Class V Common Stock, $0.0001 par value; 61,249,000 shares authorized; 59,349,000 and 60,349,000 shares issued and outstanding as of January 2, 2022 and January 3, 2021, respectively. | 6 | 6 | ||
| Additional paid-in capital | 912,574 | 793,461 | ||
| Accumulated deficit | (236,598) | (241,490) | ||
| Accumulated other comprehensive income | 3,715 | 924 | ||
| Total stockholders' equity | 679,705 | 552,908 | ||
| Noncontrolling interest | 754,968 | 831,994 | ||
| Total equity | 1,434,673 | 1,384,902 | ||
| Total liabilities and equity | $ | 2,716,346 | $ | 2,584,164 |
Utz Brands, Inc.
CONSOLIDATED STATEMENTS OF CASH FLOWS
For the year ended January 2, 2022, fiscal periods ended January 3, 2021 and August 28, 2020, and year ended December 29, 2019
(In thousands)
| Successor | Predecessor | |||||||
|---|---|---|---|---|---|---|---|---|
| For the year ended January 2, 2022 | From <br>August 29, 2020 <br>through <br>January 3, 2021 | From <br>December 30, 2019 <br>through <br>August 28, 2020 | For the year ended December 29, 2019 | |||||
| Cash flows from operating activities | ||||||||
| Net income (loss) | $ | 7,998 | $ | (107,901) | $ | 3,420 | $ | (13,364) |
| Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: | ||||||||
| Impairment and other charges | — | — | — | 3,880 | ||||
| Depreciation and amortization | 80,725 | 20,688 | 24,055 | 29,290 | ||||
| Amortization of step-up of inventory | — | 5,795 | — | — | ||||
| (Gain) loss on remeasurement of warrant liability | (36,675) | 91,851 | — | — | ||||
| Gain on disposal of property and equipment | (1,133) | (109) | (79) | (6,028) | ||||
| Gain on sale of routes | (731) | (749) | (1,264) | (7,232) | ||||
| Stock based compensation | 12,961 | 6,790 | — | — | ||||
| Loss on debt extinguishment | — | 2,500 | — | 4,336 | ||||
| Deferred income taxes | 4,828 | (958) | 3,583 | 1,949 | ||||
| Amortization of deferred financing costs | 3,919 | (2,639) | 1,742 | 955 | ||||
| Changes in assets and liabilities: | 0 | |||||||
| Accounts receivable, net | (4,528) | 16,611 | (11,786) | 11,542 | ||||
| Inventories, net | (10,595) | 887 | (6,883) | 3,476 | ||||
| Prepaid expenses and other assets | (2,931) | (7,064) | (3,456) | (1,993) | ||||
| Accounts payable and accrued expenses and other | (5,451) | (26,634) | 21,295 | 1,181 | ||||
| Net cash provided by (used in) operating activities | 48,387 | (932) | 30,627 | 27,992 | ||||
| Cash flows from investing activities | ||||||||
| Acquisition of Utz Brands Holdings, LLC, net of cash acquired | — | (185,448) | — | — | ||||
| Acquisitions, net of cash acquired | (117,585) | (406,485) | (8,816) | (137,845) | ||||
| Purchases of property and equipment | (31,739) | (9,892) | (11,828) | (19,996) | ||||
| Purchases of intangibles | (1,757) | (79,013) | (650) | — | ||||
| Proceeds from sale of property and equipment | 3,033 | 1,344 | 615 | 12,059 | ||||
| Proceeds from sale of routes | 14,186 | 2,082 | 2,774 | 3,008 | ||||
| Proceeds from the sale of IO notes | 11,762 | — | — | 33,204 | ||||
| Notes receivable, net | (13,998) | (4,470) | (3,611) | (6,312) | ||||
| Net cash used in investing activities | (136,098) | (681,882) | (21,516) | (115,882) | ||||
| Cash flows from financing activities | ||||||||
| Borrowings on term debt and notes payable | 861,139 | 370,000 | 2,650 | 121,250 | ||||
| Repayments on term debt and notes payable | (795,488) | (239,989) | (6,686) | (135,141) | ||||
| Payment of debt issuance cost | (9,210) | — | — | — | ||||
| Contribution from member and noncontrolling interest | — | — | — | 123,908 | ||||
| Exercised warrants | 57,232 | 124,495 | — | — | ||||
| Dividends paid | (11,908) | (2,968) | — | — | ||||
| Distributions to members | — | — | (6,415) | (11,461) | ||||
| Distribution to noncontrolling interest | (18,987) | (9,565) | — | (2,527) | ||||
| Net cash provided by (used in) financing activities | 82,778 | 241,973 | (10,451) | 96,029 | ||||
| Net (decrease) increase in cash and cash equivalents | (4,933) | (440,841) | (1,340) | 8,139 | ||||
| Cash and cash equivalents at beginning of period | 46,831 | 487,672 | 15,053 | 6,914 | ||||
| Cash and cash equivalents at end of period | $ | 41,898 | $ | 46,831 | $ | 13,713 | $ | 15,053 |
Reconciliation of Non-GAAP Financial Measures to Reported Financial Measures
Net Sales and Pro Forma Net Sales
| 14-Weeks Ended | 1-Week Ended | 13-Weeks Ended | 53-Weeks Ended | 1-Week Ended | 52-Weeks Ended | |||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| (Successor) | (Successor) | (Successor) | (Combined Successor and Predecessor) | (Successor) | (Combined Successor and Predecessor) | |||||||
| (dollars in millions) | January 3, 2021 | January 3, 2021 | December 27, 2020 | January 3, 2021 | January 3, 2021 | December 27, 2020 | ||||||
| Net Sales | $ | 246.3 | $ | 15.9 | $ | 230.4 | $ | 964.3 | $ | 15.9 | $ | 948.4 |
| 13-Weeks Ended | 52-Weeks Ended | |||||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | ||||
| January 2, 2022 | December 27, 2020 | January 2, 2022 | December 27, 2020 | |||||||||
| (dollars in millions) | (Successor) | (Successor) | (Successor) | (Combined Successor and Predecessor) | ||||||||
| Net Sales | $ | 300.9 | $ | 230.4 | $ | 1,180.7 | $ | 948.4 | ||||
| H.K. Anderson Pre-Acquisition Net Sales | — | 1.1 | — | 8.0 | ||||||||
| Vitner's Pre-Acquisition Net Sales | — | 4.9 | — | 20.0 | ||||||||
| Truco Enterprises Pre-Acquisition Net Sales | — | 37.1 | — | 187.7 | ||||||||
| Festida Foods Pre-Acquisition Net Sales | — | 2.0 | 3.6 | 9.3 | ||||||||
| Pro Forma Net Sales | $ | 300.9 | $ | 275.5 | $ | 1,184.3 | $ | 1,173.4 |
Organic Net Sales Growth
| Three Months Ended | ||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| January 2, 2022 | January 3, 2021 | % Change | ||||||||||||||||
| (dollars in millions) | Net Sales as Reported | Impact of Acquisitions | Organic Net Sales | Net Sales as Reported | Impact of Acquisitions | Impact of 53rd Week | Organic Net Sales | Net Sales as Reported | Organic Net Sales | |||||||||
| Total Net Sales | $ | 300.9 | $ | 53.7 | $ | 247.2 | $ | 246.3 | $ | 21.6 | $ | 15.9 | $ | 208.8 | 22.2 | % | 7.4 | % |
| Full-Year Ended | ||||||||||||||||||
| January 2, 2022 | January 3, 2021 | % Change | ||||||||||||||||
| (dollars in millions) | Net Sales as Reported | Impact of Acquisitions | Organic Net Sales | Net Sales as Reported | Impact of Acquisitions | Impact of 53rd Week | Organic Net Sales | Net Sales as Reported | Organic Net Sales | |||||||||
| Total Net Sales | $ | 1,180.7 | $ | 226.4 | $ | 954.3 | $ | 964.3 | $ | 108.4 | $ | 15.9 | $ | 840.0 | 22.4 | % | 0.6 | % |
Gross Profit, Adjusted Gross Profit, Pro Forma Gross Profit and Pro Forma Adjusted Gross Profit
| 14-Weeks Ended | 1-Week Ended | 13-Weeks Ended | 53-Weeks Ended | 1-Week Ended | 52-Weeks Ended | |||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| (Successor) | (Successor) | (Successor) | (Combined Successor and Predecessor) | (Successor) | (Combined Successor and Predecessor) | |||||||||||||
| (dollars in millions) | January 3, 2021 | January 3, 2021 | December 27, 2020 | January 3, 2021 | January 3, 2021 | December 27, 2020 | ||||||||||||
| Gross Profit | $ | 81.6 | $ | 4.9 | $ | 76.7 | $ | 332.7 | $ | 4.9 | $ | 327.8 | ||||||
| Depreciation and Amortization | 7.5 | — | 7.5 | 31.3 | — | 31.3 | ||||||||||||
| Non-Cash, non-recurring adjustments | 1.4 | — | 1.4 | 1.4 | — | 1.4 | ||||||||||||
| Adjusted Gross Profit | $ | 90.5 | $ | 4.9 | $ | 85.6 | $ | 365.4 | $ | 4.9 | $ | 360.5 | ||||||
| Adjusted Gross Profit as a % of Net Sales | 36.7 | % | 30.8 | % | 37.2 | % | 37.9 | % | 30.8 | % | 38.0 | % | ||||||
| 13-Weeks Ended | 52-Weeks Ended | |||||||||||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | ||||||
| January 2, 2022 | December 27, 2020 | January 2, 2022 | December 27, 2020 | |||||||||||||||
| (dollars in millions) | (Successor) | (Successor) | (Successor) | (Combined Successor and Predecessor) | ||||||||||||||
| Gross Profit | $ | 90.5 | $ | 76.7 | $ | 383.9 | $ | 327.8 | ||||||||||
| Depreciation and Amortization | 9.6 | 7.5 | 35.0 | 31.3 | ||||||||||||||
| Non-Cash, non-recurring adjustments | 3.2 | 1.4 | 6.0 | 1.4 | ||||||||||||||
| Adjusted Gross Profit | 103.3 | 85.6 | 424.9 | 360.5 | ||||||||||||||
| Adjusted Gross Profit as a % of Net Sales | 34.3 | % | 37.2 | % | 36.0 | % | 38.0 | % | ||||||||||
| Depreciation and Amortization - COGS | (9.6) | (7.5) | (35.0) | (31.3) | ||||||||||||||
| H.K. Anderson Pre-Acquisition Gross Profit | — | 0.1 | — | 1.1 | ||||||||||||||
| Vitner's Pre-Acquisition Gross Profit | — | 2.4 | — | 9.7 | ||||||||||||||
| Truco Enterprises Pre-Acquisition Gross Profit | — | 14.1 | — | 74.5 | ||||||||||||||
| Festida Foods Pre-Acquisition Gross Profit | — | 1.7 | 2.7 | 6.6 | ||||||||||||||
| Pro Forma Gross Profit | 93.7 | 96.4 | 392.6 | 421.1 | ||||||||||||||
| Depreciation and Amortization - COGS | 9.6 | 7.5 | 35.0 | 31.3 | ||||||||||||||
| Festida Pre-Acquisition D&A | — | 0.5 | 0.9 | 2.0 | ||||||||||||||
| Depreciation and Amortization - Total | 9.6 | 8.0 | 35.9 | 33.3 | ||||||||||||||
| Pro Forma Adjusted Gross Profit | $ | 103.3 | $ | 104.4 | $ | 428.5 | $ | 454.4 | ||||||||||
| Pro Forma Adjusted Gross Profit as a % of Pro Forma Net Sales | 34.3 | % | 37.9 | % | 36.2 | % | 38.7 | % |
Adjusted Selling, General and Administrative Expense
| 14-Weeks Ended | 1-Week Ended | 13-Weeks Ended | 53-Weeks Ended | 1-Week Ended | 52-Weeks Ended | |||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| (Successor) | (Successor) | (Successor) | (Combined Successor and Predecessor) | (Successor) | (Combined Successor and Predecessor) | |||||||
| (dollars in millions) | January 3, 2021 | January 3, 2021 | December 27, 2020 | January 3, 2021 | January 3, 2021 | December 27, 2020 | ||||||
| Selling, General and Administrative Expense - Including Depreciation and Amortization | $ | 82.2 | $ | 1.8 | $ | 80.4 | $ | 303.1 | $ | 1.8 | $ | 301.3 |
| Depreciation and Amortization in SG&A Expense | (7.7) | — | (7.7) | (19.2) | — | (19.2) | ||||||
| Non-Cash, and/or Non-recurring Adjustments | (17.6) | — | (17.6) | (50.5) | — | (50.5) | ||||||
| Adjusted Selling, General and Administrative Expense | $ | 56.9 | $ | 1.8 | $ | 55.1 | $ | 233.4 | $ | 1.8 | $ | 231.6 |
| 13-Weeks Ended | 52-Weeks Ended | |||||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| January 2, 2022 | December 27, 2020 | January 2, 2022 | December 27, 2020 | |||||||||
| (dollars in millions) | (Successor) | (Successor) | (Successor) | (Combined Successor and Predecessor) | ||||||||
| Selling, General and Administrative Expense - Including Depreciation and Amortization | $ | 96.4 | $ | 80.4 | $ | 375.2 | $ | 301.3 | ||||
| Depreciation and Amortization in SG&A Expense | (11.6) | (7.7) | (45.5) | (19.2) | ||||||||
| Non-Cash, and/or Non-recurring Adjustments | (18.6) | (17.6) | (57.9) | (50.5) | ||||||||
| Adjusted Selling, General and Administrative Expense | 66.2 | 55.1 | 271.8 | 231.6 | ||||||||
| Adjusted Selling, General and Administrative Expense as a % of Net Sales | 22.0 | % | 23.9 | % | 23.0 | % | 24.4 | % | ||||
| Vitner's Pre-Acquisition SG&A Expense | — | 2.0 | — | 7.8 | ||||||||
| Truco Enterprises Pre-Acquisition SG&A Expense | — | 5.1 | — | 29.3 | ||||||||
| Festida Foods Pre-Acquisition SG&A Expense | — | 1.0 | 1.5 | 3.5 | ||||||||
| Pro Forma Adjusted SG&A Expense | $ | 66.2 | $ | 63.2 | $ | 273.3 | $ | 272.2 | ||||
| Pro Forma Adjusted Selling, General and Administrative Expense as % of Pro Forma Net Sales | 22.0 | % | 22.9 | % | 23.1 | % | 23.2 | % |
Adjusted Net Income
| 13-Weeks Ended | 14-Weeks Ended | 52-Weeks Ended | 53-Weeks Ended | |||||
|---|---|---|---|---|---|---|---|---|
| January 2, 2022 | January 3, 2021 | January 2, 2022 | January 3, 2021 | |||||
| (dollars in millions, except per share data) | (Successor) | (Successor) | (Successor) | (Combined Successor and Predecessor) | ||||
| Net Income (Loss) | $ | (16.2) | $ | (87.5) | $ | 8.0 | $ | (104.5) |
| Deferred Financing Fees | 0.4 | 4.7 | 1.1 | 6.6 | ||||
| Depreciation and Amortization | 21.4 | 15.2 | 80.7 | 50.5 | ||||
| Non-Acquisition Related Depreciation and Amortization | (8.7) | (8.2) | (29.7) | (27.4) | ||||
| Acquisition Step-Up Depreciation and Amortization: | 12.7 | 7.0 | 51.0 | 23.1 | ||||
| Certain Non-Cash Adjustments | 2.7 | 4.9 | 11.6 | 3.2 | ||||
| Acquisition and Integration | 7.9 | 8.6 | 27.0 | 40.0 | ||||
| Business Transformation Initiatives | 10.8 | 5.3 | 24.5 | 8.8 | ||||
| Financing-Related Costs | — | 0.1 | 0.7 | 2.7 | ||||
| (Gain) Loss on Remeasurement of Warrant Liability | (2.5) | 73.9 | (36.7) | 91.8 | ||||
| Other Non-Cash and/or Non-Recurring Adjustments | 18.9 | 92.8 | 27.1 | 146.5 | ||||
| Income Tax-Rate Adjustment(1) | 0.2 | 8.5 | (9.7) | (2.9) | ||||
| Adjusted Net Income | $ | 16.0 | $ | 25.5 | $ | 77.5 | $ | 68.8 |
| Basic Shares Outstanding on an As-Converted Basis | 136.9 | 136.9 | ||||||
| Fully Diluted Shares on an As-Converted Basis | 142.4 | 142.4 | ||||||
| Adjusted Earnings Per Share | $ | 0.11 | $ | 0.54 |
(1) Income Tax Rate Adjustment calculated as Income (Loss) before taxes plus (i) Acquisition, Step-Up Depreciation and Amortization and (ii) Other Non-Cash and/or Non-Recurring Adjustments, multiplied by an effective cash tax rate, minus the actual tax provision recorded in the Consolidated Statement of Operations and Comprehensive Income (Loss). The effective cash tax rate includes corporate income tax payments plus non-resident withholding and tax distributions, which are considered equivalent to tax.
Depreciation & Amortization
| 13-Weeks Ended | 14-Weeks Ended | 52-Weeks Ended | 53-Weeks Ended | |||||
|---|---|---|---|---|---|---|---|---|
| January 2, 2022 | January 3, 2021 | January 2, 2022 | January 3, 2021 | |||||
| (dollars in millions) | (Successor) | (Successor) | (Successor) | (Combined Successor and Predecessor) | ||||
| Core D&A - Non-Acquisition-related included in Gross Profit | $ | 6.4 | $ | 2.8 | $ | 19.5 | $ | 16.9 |
| Step-Up D&A - Transaction-related included in Gross Profit | 3.4 | 4.7 | 15.7 | 14.4 | ||||
| Depreciation & Amortization - included in Gross Profit | 9.8 | 7.5 | 35.2 | 31.3 | ||||
| Core D&A - Non-Acquisition-related included in SG&A Expense | 2.3 | 5.4 | 10.2 | 10.6 | ||||
| Step-Up D&A - Transaction-related included in SG&A Expense | 9.3 | 2.3 | 35.3 | 8.6 | ||||
| Depreciation & Amortization - included in SG&A Expense | 11.6 | 7.7 | 45.5 | 19.2 | ||||
| Depreciation & Amortization - Total | $ | 21.4 | $ | 15.2 | $ | 80.7 | $ | 50.5 |
| Core Depreciation and Amortization | $ | 8.7 | $ | 8.2 | $ | 29.7 | $ | 27.5 |
| Step-Up Depreciation and Amortization | 12.7 | 7.0 | 51.0 | 23.0 | ||||
| Total Depreciation and Amortization | $ | 21.4 | $ | 15.2 | $ | 80.7 | $ | 50.5 |
EBITDA and Adjusted EBITDA
| 14-Weeks Ended | 1-Week Ended | 13-Weeks Ended | 53-Weeks Ended | 1-Week Ended | 52-Weeks Ended | |||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| (Successor) | (Successor) | (Successor) | (Combined Successor and Predecessor) | (Successor) | (Combined Successor and Predecessor) | |||||||||||||
| (dollars in millions) | January 3, 2021 | January 3, 2021 | December 27, 2020 | January 3, 2021 | January 3, 2021 | December 27, 2020 | ||||||||||||
| Net (Loss) Income | $ | (87.5) | $ | 3.1 | $ | (90.6) | $ | (104.5) | $ | 3.1 | $ | (107.6) | ||||||
| Plus non-GAAP adjustments: | ||||||||||||||||||
| Income Tax (Benefit) or Expense | 2.7 | — | 2.7 | 3.7 | — | 3.7 | ||||||||||||
| Depreciation and Amortization | 15.2 | — | 15.2 | 50.5 | — | 50.5 | ||||||||||||
| Interest Expense, Net | 11.5 | — | 11.5 | 40.0 | — | 40.0 | ||||||||||||
| Interest Income (IO loans)(1) | (0.7) | — | (0.7) | (2.4) | — | (2.4) | ||||||||||||
| EBITDA | (58.8) | 3.1 | (61.9) | (12.7) | 3.1 | (15.8) | ||||||||||||
| Certain Non-Cash Adjustments(2) | 4.9 | — | 4.9 | 3.2 | — | 3.2 | ||||||||||||
| Acquisition and Integration(3) | 8.6 | — | 8.6 | 40.0 | — | 40.0 | ||||||||||||
| Business Transformation Initiatives(4) | 5.3 | — | 5.3 | 8.8 | — | 8.8 | ||||||||||||
| Financing-Related Costs(5) | 0.1 | — | 0.1 | 2.7 | — | 2.7 | ||||||||||||
| Loss on Remeasurement of Warrant Liabilities(6) | 73.9 | — | 73.9 | 91.9 | — | 91.9 | ||||||||||||
| Adjusted EBITDA | $ | 34.0 | $ | 3.1 | $ | 30.9 | $ | 133.9 | $ | 3.1 | $ | 130.8 | ||||||
| Adjusted EBITDA as a % of Net Sales | 13.8 | % | 19.5 | % | 13.4 | % | 13.9 | % | 19.5 | % | 13.8 | % | ||||||
| EBITDA, Adjusted EBITDA and Further Adjusted EBITDA | 13-Weeks Ended | 52-Weeks Ended | ||||||||||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | ||||||
| January 2, 2022 | December 27, 2020 | January 2, 2022 | December 27, 2020 | |||||||||||||||
| (dollars in millions) | (Successor) | (Successor) | (Successor) | (Combined Successor and Predecessor) | ||||||||||||||
| Net Income (Loss) | $ | (16.2) | $ | (90.6) | $ | 8.0 | $ | (107.6) | ||||||||||
| Plus non-GAAP adjustments: | ||||||||||||||||||
| Income Tax (Benefit) or Expense | 5.8 | 2.7 | 8.1 | 3.7 | ||||||||||||||
| Depreciation and Amortization | 21.4 | 15.2 | 80.7 | 50.5 | ||||||||||||||
| Interest Expense, Net | 8.2 | 11.5 | 34.7 | 40.0 | ||||||||||||||
| Interest Income (IO loans)(1) | (0.4) | (0.7) | (2.4) | (2.4) | ||||||||||||||
| EBITDA | 18.8 | (61.9) | 129.1 | (15.8) | ||||||||||||||
| Certain Non-Cash Adjustments(2) | 2.7 | 4.9 | 11.6 | 3.2 | ||||||||||||||
| Acquisition and Integration(3) | 7.9 | 8.6 | 27.0 | 40.0 | ||||||||||||||
| Business Transformation Initiatives(4) | 10.8 | 5.3 | 24.5 | 8.8 | ||||||||||||||
| Financing-Related Costs(5) | — | 0.1 | 0.7 | 2.7 | ||||||||||||||
| (Gain) Loss on Remeasurement of Warrant Liabilities(6) | (2.5) | 73.9 | (36.7) | 91.9 | ||||||||||||||
| Adjusted EBITDA | 37.7 | 30.9 | 156.2 | 130.8 | ||||||||||||||
| Adjusted EBITDA as a % of Net Sales | 12.5 | % | 13.4 | % | 13.2 | % | 13.8 | % | ||||||||||
| HKA Pre-Acquisition Adjusted EBITDA(7) | — | 0.1 | — | 1.1 | ||||||||||||||
| Vitner's Pre-Acquisition Adjusted EBITDA(7) | — | 0.4 | — | 2.0 | ||||||||||||||
| Truco Pre-Acquisition Adjusted EBITDA(7) | — | 8.8 | — | 47.5 | ||||||||||||||
| Festida Pre-Acquisition Adjusted EBITDA(7) | — | 1.3 | 2.6 | 5.9 | ||||||||||||||
| RW Pre-Acquisition Adjusted EBITDA(7) | 1.1 | 1.3 | 5.4 | 5.4 | ||||||||||||||
| Further Adjusted EBITDA | $ | 38.8 | $ | 42.8 | $ | 164.2 | $ | 192.7 | ||||||||||
| Further Adjusted EBITDA as % of Pro Forma Net Sales | 12.9 | % | 15.5 | % | 13.9 | % | 16.4 | % |
(1)Interest Income from IO Loans refers to Interest Income that we earn from IO notes receivable that have resulted from our initiatives to transition from RSP distribution to IO distribution. (“Business Transformation Initiatives”). There is a Notes Payable recorded that mirrors the IO notes receivable, and the interest expense associated with the Notes Payable is part of the Interest Expense, Net adjustment.
(2)Certain Non-Cash Adjustments are comprised primarily of the following:
Incentive programs – Utz Quality Foods, LLC, our wholly-owned subsidiary, established the 2018 Long-Term Incentive Plan (the “2018 LTIP”) for employees in February 2018. The Company recorded income of $3.0 million for the Predecessor period from December 30, 2019 to August 28, 2020. The income was the result of the conversion rate of the 2018 LTIP Phantom Units into the 2020 LTIP RSUs. Expenses incurred for the 2018 LTIP are non-operational in nature and are expected to decline upon the vesting of the remaining phantom units from fiscal year 2018 and fiscal year 2019 at the end of fiscal year 2021. The phantom units under the 2018 LTIP were converted into the 2020 LTIP RSUs as part of the Business Combination. Additionally, the Company incurred $13.0 million and $10.6 million of share-based compensation for the Successor period from August 29, 2020 to January 3, 2021 and for fiscal 2021, respectively.
Purchase Commitments and Other Adjustments – We have purchased commitments for specific quantities at fixed prices for certain of our products’ key ingredients. To facilitate comparisons of our underlying operating results, this adjustment was made to remove the volatility of purchase commitment related unrealized gains and losses.
Asset Impairments and Write-Offs — There were no adjustments for impairments recorded in 2021 or 2020.
(3)Pre-Acquisition Adjusted EBITDA- This adjustment represents the adjusted EBITDA of acquired companies prior to the acquisition date.
(4)Adjustment for Acquisition and Integration Costs – This is primarily comprised of the following: (i) consulting, transaction services, and legal fees incurred for acquisitions and certain potential acquisitions; (ii) integration and restructuring costs related to recently completed acquisitions; and (iii) costs associated with reclaiming distribution rights from distributors. In 2021, acquisition related costs included $9.5 million of expense related to reclaiming distribution rights through purchases and terminations, in addition to $7.1 million of expense for the three acquired entities and the evaluation of other potential acquisition targets. Additionally in 2021, we incurred $10.2 million of expenses related to restructuring and integration costs related to recent acquisitions. In 2020, the majority of charges are related to costs incurred for the Business Combination, the HK Anderson acquisition, and the Truco acquisition, and related integration expenditures where we incurred costs of $40.0 million.
(5)Business Transformation Initiatives – This adjustment is related to consultancy, professional, and legal fees incurred for specific initiatives and structural changes to the business that do not reflect the cost of normal business operations. In addition, certain pre-Business Combination Rice/Lissette family-related costs incurred but not part of normal business operations, and gains realized from the sale of distribution rights to IOs and the subsequent disposal of trucks, offset by severance costs associated with the elimination of RSP positions, fall into this category. Additionally, in 2021, we incurred certain one-time costs of $3.3 million associated with the damage of a manufacturing facility, net of expected proceeds from insurance policies, and one-time expenses as a result of COVID-19 of $1.9 million. In 2021, total net cost was $24.5 million compared to $8.8 million net cost for 2020. The increase in fiscal 2021 costs is primarily a result of increased IO conversions, enhancements in our supply chain capabilities and costs associated with our transition of IT systems, including a new ERP.
(6)Financing-Related Costs – These costs include adjustments for various items related to raising debt and preferred equity capital. In 2021, we incurred $0.7 million of expense compared to fiscal 2020 of $2.7 million. In 2020 we incurred $2.5 million of expenses related to a prepayment penalty for the pay-down of debt.
(7)(Gain) or loss related to the changes in the remeasurement of warrant liabilities are not expected to be settled in cash, and when exercised would result in a cash inflow to the Company with the Warrants converting to Class A Common Stock with the liability being extinguished and the fair value of the Warrants at the time of exercise being recorded as an increase to equity.
(8)Pre-Acquisition Adjusted EBITDA- This adjustment represents the adjusted EBITDA of acquired companies prior to the acquisition date.
Normalized Further Adjusted EBITDA
| FY 2020 | FY 2021 | |||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| (Predecessor) | (Combined Successor and Predecessor) | (Successor) | (Combined Successor and Predecessor) | (Successor) | ||||||||||||||||
| (dollars in millions) | Q1 | Q2 | Q3 | Q4 | FY 2020 | Q1 | Q2 | Q3 | Q4 | FY 2021 | ||||||||||
| Further Adjusted EBITDA | $ | 40.8 | $ | 51.5 | $ | 53.6 | $ | 41.4 | $ | 187.3 | $ | 41.0 | $ | 38.1 | $ | 46.3 | $ | 38.8 | $ | 164.2 |
| Acquisition Synergies(1) | 2.9 | 2.6 | 2.6 | 2.0 | 10.1 | 3.1 | 3.1 | 2.6 | 2.5 | 11.3 | ||||||||||
| Public Company Costs(2) | (0.8) | (0.7) | (0.6) | — | (2.1) | — | — | — | — | — | ||||||||||
| Normalized Further Adjusted EBITDA | $ | 42.9 | $ | 53.4 | $ | 55.6 | $ | 43.4 | $ | 195.3 | $ | 44.1 | $ | 41.2 | $ | 48.9 | $ | 41.3 | $ | 175.5 |
(1) Represents identified integration-related cost savings expected to be realized from the elimination of certain procurement, manufacturing, and logistics as well as selling, general and administrative expenses in connection with the acquisition of Kennedy Endeavors, Kitchen Cooked, Truco Enterprises, Vitner’s, Festida Foods and R.W. Garcia.
(2) Represents estimated incremental costs of operating as a public company following the closing of the business combination, including exchange listing and other fees; audit and compliance costs; investor relations costs; additional D&O insurance premium; legal expenses associated with public filings and other items; and cash compensation for the Board of Directors.
Net Debt and Leverage Ratio
| (dollars in millions) | As of January 2, 2022 | |
|---|---|---|
| Term Loan | $ | 787.2 |
| Line of Credit | 36.0 | |
| Capital Leases(1) | 34.8 | |
| Deferred Purchase Price | 1.7 | |
| Gross Debt(2) | 859.7 | |
| Cash and Cash Equivalents | 41.9 | |
| Total Net Debt | $ | 817.8 |
| Last 52-Weeks Normalized Further Adjusted EBITDA | $ | 175.5 |
| Net Leverage Ratio | 4.7x |
(1) Capital Leases include equipment term loans and excludes the impact of step-up accounting.
(2) Excludes amounts related to guarantees on IO loans which are collateralized by routes. We have the ability to recover substantially all of the outstanding loan value in the event of a default scenario, which is uncommon.
draftutzbrandsincq42021e
℠ Utz Brands, Inc. Q4 & Full-Year 2021 Earnings Presentation March 3, 2022 1
℠ Disclaimer 2 Forward-Looking Statements Certain statements made herein are not historical facts but are “forward-looking statements” within the meaning of the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995, as amended. The forward-looking statements generally are accompanied by or include, without limitation, statements such as “will”, “expect”, “intends”, “goal” or other similar words, phrases or expressions. These forward-looking statements include the expected effects from the COVID-19 pandemic, future plans for the Company, the estimated or anticipated future results and benefits of the Company’s future plans and operations, future capital structure, future opportunities for the Company, and other statements that are not historical facts. These statements are based on the current expectations of the Company’s management and are not predictions of actual performance. These statements are subject to a number of risks and uncertainties and the Company’s business and actual results may differ materially. Factors that may cause such differences include, but are not limited to: the risk that the Company may not recognize the anticipated benefits of recently completed business combinations and other acquisitions recently completed by the Company (collectively, the “Business Combinations”), which may be affected by, among other things, competition and the ability of the Company to grow and manage growth profitably and retain its key employees; the ability of the Company to close planned acquisitions; changes in applicable law or regulations; costs related to the Business Combinations and other planned acquisitions; the inability of the Company to maintain the listing of the Company’s Class A Common Stock on the New York Stock Exchange; the inability of the Company to develop and maintain effective internal controls; the risk that the Company’s gross profit margins may be adversely impacted by a variety of factors, including variations in raw materials pricing, retail customer requirements and mix, sales velocities and required promotional support; changes in consumers’ loyalty to the Company’s brands due to factors beyond the Company’s control; changes in demand for the Company’s products affected by changes in consumer preferences and tastes or if the Company is unable to innovate or market its products effectively; costs associated with building brand loyalty and interest in the Company’s products, which may be affected by the Company’s competitors’ actions that result in the Company’s products not suitably differentiated from the products of competitors; fluctuations in results of operations of the Company from quarter to quarter because of changes in promotional activities; the possibility that the Company may be adversely affected by other economic, business or competitive factors; and other risks and uncertainties set forth in the section entitled “Risk Factors” and “Forward-Looking Statements” in the Company’s Annual Report on Form 10-K filed with the U.S. Securities and Exchange Commission (the “Commission”) for the fiscal year ended January 2, 2022, as amended, and other reports filed by the Company with the Commission. In addition, forward-looking statements provide the Company’s expectations, plans or forecasts of future events and views as of the date of this communication. Except as required by law, the Company undertakes no obligation to update such statements to reflect events or circumstances arising after such date and cautions investors not to place undue reliance on any such forward-looking statements. These forward-looking statements should not be relied upon as representing the Company’s assessments as of any date subsequent to the date of this communication. The Company cautions investors not to place undue reliance upon any forward-looking statements, which speak only as of the date made. The Company does not undertake or accept any obligation or undertaking to release publicly any updates or revisions to any forward-looking statements to reflect any change in its expectations or any change in events, conditions or circumstances on which any such statement is based, except as otherwise required by law. Non-GAAP Financial Measures This presentation includes certain financial measures not presented in accordance with U.S. generally accepted accounting principles (“GAAP”) including, but not limited to, Pro Forma Net Sales, Organic Net Sales, Adjusted Gross Profit, Pro Forma Adjusted Gross Profit, Adjusted SG&A, EBITDA, Adjusted EBITDA, Further Adjusted EBITDA, Normalized Further Adjusted EBITDA, Adjusted Net Income, Adjusted Earnings Per Share, and Free Cash Flow, and certain ratios and other metrics derived there from. These non-GAAP financial measures do not represent financial performance in accordance with GAAP and may exclude items that are significant in understanding and assessing financial results. Therefore, these measures should not be considered in isolation or as an alternative to net income, cash flows from operations or other measures of profitability, liquidity or performance under GAAP. You should be aware that the presentation of these measures may not be comparable to similarly-titled measures used by other companies. Reconciliations of these non-GAAP measures to the most directly comparable GAAP measures are set forth in the appendix to this presentation. We believe (i) these non-GAAP measures of financial results provide useful information to management and investors regarding certain financial and business trends relating to the financial condition and results of operations of the Company to date; and (ii) that the use of these non-GAAP financial measures provides an additional tool for investors to use in evaluating ongoing operating results and trends in comparing financial measures with other similar companies, many of which present similar non-GAAP financial measures to investors. These non-GAAP financial measures are subject to inherent limitations as they reflect the exercise of judgments by management about which expense and income are excluded or included in determining these non-GAAP financial measures. The non-GAAP financial measures are not recognized in accordance with GAAP and should not be viewed as an alternative to GAAP measures of performance.
Business Overview Dylan Lissette, Chief Executive Officer 3
℠ 4 Delivering on Our Value Creation Strategies in 2021 (1) Source: IRI Custom Panel, Total US MULO + C, 52-weeks ended 1/2/2022; % YoY Growth compared to the comparable period in the prior year on a pro forma basis. (2) IRI does not include Partner Brands and Private Label retail sales. Delivered target of ~2% productivity and completed a new company wide ERP implementation with minimal business disruption Executed multiple rounds of inflation-justified pricing actions and the contribution to net sales increased to 6% in 4Q’21 with benefits building into fiscal 2022 Converted ~200 DSD company- owned route to Independent Operator routes (now at 88 % IO, 12% RSP) and remain on track to substantially complete the conversion in 1H’22 Driving a more advantaged mix of sales as Power Brands increased to 87% of IRI retail sales(1,2) Reduce Costs and Enhance Margins Delivered IRI retail sales 2-Year CAGR of 8.3% and became the 3rd largest Salty Snacks platform in the U.S.(1) Drove 2-Year gains in market share across key sub-categories, channels and geographies: • Sub-categories: Potato Chips, Tortilla Chips and Pork Rinds • Channels: Grocery and C-Store • Geographies: Expansion and Emerging Increasing investments in logistics and manufacturing infrastructure to support geographic expansion, new strategic customer wins, and Core geography growth in 2022 Leveraging acquisitions of third-party distributors of the Utz brands to expand Power Brand presence in key growth markets and accelerate sales Closed three value-enhancing acquisitions: Vitner’s, Festida Foods and R.W. Garcia Delivering expected cost and revenue synergies of 2020 & 2021 acquisitions and integration of each remains on track Leveraging Festida and R.W. Garcia tortilla production to both increase supply and strategically in-source production of ON THE BORDER® tortilla chips and scaling up rapidly to meet continued increases in demand Announced the acquisitions of Clem Snack and J&D Snacks in February 2022 which will better enable Utz to expand and grow its expansive portfolio of brands in the Core geographies of the New York Metro and Long Island markets Reinvest to Accelerate Revenue Growth Continue Strategic Acquisitions
℠ 5 246.3 300.9 4Q’20 4Q’21 +22% Net Sales(1) Adj. Gross Profit (% margin) Adj. EBITDA (% margin) ($ in M) ($ in M) ($ in M) 90.5 103.3 4Q’20 4Q’21 +14% 34.0 37.7 4Q’214Q’20 +11% 36.7% 34.3% 12.5% Organic Net Sales growth accelerated to 7.4% in 4Q’21 from 1.0% in 3Q’21 – Excluding the impact from IO route conversion Organic Net Sales increased 8.9% – Highest Organic Net Sales growth quarter of the year and strong finish to 2021 Gross margin primarily impacted by industry-wide higher inflation and higher costs to serve customers – Incurring higher supply and transportation related costs to maintain in-stocks and serve customers – Pricing actions continue to be implemented with the benefits building momentum – Estimate IO conversions adversely impacted Adjusted Gross Margin by approximately 150 bps with offsetting benefits in SG&A Note: Fiscal 2020 was a 53-week year and the Company estimates the extra week benefited 4Q’20 Net Sales and Adjusted EBITDA by $16M and $3M, respectively Summary of Fourth Quarter 2021 Results Note: Organic Net Sales, Adjusted Gross Profit, and Adjusted EBITDA, are Non-GAAP financial measures. See appendix for reconciliation of Non-GAAP financial measures to most directly comparable GAAP measures. (1) Year-over-year Q4’21 Pro Forma Net Sales increased 9.2% 13.8%
℠ Retail Sales Growth Rates Accelerating 6 Retail Sales 2-Year CAGR Rolling 12-Week Trend Source: IRI, Total US MULO + C. trend on a pro forma basis. Total Utz portfolio growth continues to accelerate and share gains are building momentum 6.4% 6.4% 6.4% 7.1% 7.8% 7.9% 8.0% 8.4% 9.1% 10.0% 10.6% 10.7% 11.3% 5.6% 6.0% 5.8% 6.3% 7.1% 7.6% 8.6% 9.7% 10.1% 10.6% 10.8% 11.6% 12.9% 7.2% 7.6% 7.4% 7.9% 8.7% 9.2% 10.2% 11.5% 11.7% 12.2% 12.5% 13.5% 14.9% -2.5% -2.3% -2.5% -2.1% -1.5% -1.3% -0.3% -0.2% 1.1% 1.0% 1.0% 1.1% 1.8% 12-Weeks Ending 3-21-21 12-Weeks Ending 4-18-21 12-Weeks Ending 5-16-21 12-Weeks Ending 6-13-21 12-Weeks Ending 7-11-21 12-Weeks Ending 8-8-21 12-Weeks Ending 9-5-21 12-Weeks Ending 10-3-21 12-Weeks Ending 10-31-21 12-Weeks Ending 11-28-21 12-Weeks Ending 12-26-21 12-Weeks Ending 1-23-22 12-Weeks Ending 2-20-22 Utz Foundation Brands Utz Power Brands Total Salty Snacks Utz Brands (Total)
℠ (1) Source: IRI Custom Panel, Total US MULO + C, 13-weeks ended 1/2/2022; % YoY Growth compared to the comparable period in the prior year on a pro forma basis and excludes R.W. Garcia. (2) IRI does not include Partner Brands and Private Label retail sales. 7 Pork Skins Chips/Cheese Other(2) • Partner Brands • Private Label Gaining Power Brand Share Over Last Two Years Power Brands Retail Sales Change(1) (13-Weeks Ended 1/2/22) Foundation Brands Retail Sales Change(1)(2) (13-Weeks Ended 1/2/22) Power Brands Foundation Brands YoY Growth 12.5% 2-Year CAGR 12.7% 13.5% 10.5% Total Salty Snacks Utz Power Brands 1.6% YoY Growth 2-Year CAGR 10.5% 12.7% 1.0% Total Salty Snacks Utz Foundation Brands Power brands are 87% of our portfolio, an increase of ~250bps from two years ago Foundation Brand performance reflects the continued shift in focus to Power Brands, and performance is improving
℠ 8 Source: IRI, Total US MULO + C. on a pro forma basis. Two-Year Growth Across Major Sub-Categories Sub-Category Retail Sales 2-Year CAGR (13-Weeks Ended 1/2/22) 10.9% Total Salty Snacks Potato Chips 10.4% Pork Rinds Cheese Snacks Tortilla Chips Pretzels 10.5% 10.1% 12.5% 21.2% 8.8% 10.6% 10.1% 7.4% 19.2% 10.5% 4.5% 14.2% 4.8% 8.6% 3.6% 4.1% 13-Weeks Ended 1/2/22 YoY % Change Sub-Category Utz Brands 10.5% 12.1% 14.0% 7.8% 8.5% (3.7%) 17.2% 9.8% 16.7% 17.4% 2.5% (3.1%) (4.9%) 22.0% Utz Brands 37% 20% 12% 9% 5% 3% 2% 13-Weeks Ended 1/2/22 Approximate % of Retail Sales 17.7% QuesoSalsa 5.6% 52.2% 17.5% Total Sub-Category Power Brands Power Brands two-year share gains across four of five tracked sub-categories Double-digit two-year CAGR’s in potato chips, tortilla chips, pretzels, salsa and queso
℠ Robust Growth for ON THE BORDER® In All Geographies 9 ON THE BORDER® Retail Sales 2-Year CAGR Rolling 12-Week Trend Source: IRI, Total US MULO + C. trend Leveraging the Utz sales platform to drive strong double-digit sales growth Unlocking additional manufacturing capacity and supply through our Festida and R.W. Garcia acquisitions to help support robust ON THE BORDER® growth 8.6% 10.1% 12.9% 14.0% 15.3% 18.0% 18.8% 22.9% 26.7% 31.8% 31.3% 30.2% 29.8% 35.4% 9.6% 11.2% 12.1% 12.6% 14.5% 15.0% 16.9% 19.3% 23.5% 24.4% 23.4% 23.3% 27.7% 3.4% 4.6% 6.0% 6.9% 8.7% 11.1% 12.4% 13.7% 14.4% 16.7% 17.8% 17.0% 15.8% 18.9% 5.0% 6.5% 8.1% 9.0% 10.5% 12.9% 13.9% 15.7% 17.2% 20.4% 21.2% 20.3% 19.4% 23.1% 5.7% 6.3% 6.9% 6.8% 6.8% 7.3% 8.6% 9.7% 10.0% 10.0% 10.8% 12WE 02- 21-21 12WE 03- 21-21 12WE 04- 18-21 12WE 05- 16-21 12WE 06- 13-21 12WE 07- 11-21 12WE 08- 08-21 12WE 09- 05-21 12WE 10- 03-21 12WE 10- 31-21 12WE 11- 28-21 12WE 12- 26-21 12WE 01- 23-22 12WE 02- 20-22 Utz Emerging Utz Core Utz Expansion Utz Total US Tortilla Subcat (MuloC)
℠ 10 Source: IRI, Total US MULO + C. on a pro forma basis. Positive Momentum Led by Power Brands Across All Geographies Geographic Channel Retail Sales 2-Year CAGR (13-Weeks Ended 1/2/22) ExpansionTotal US Core Emerging 10.5% 10.9% 12.5% 9.4% 7.7% 9.0% 11.1% 14.5% 17.5% 10.9% 14.3% 15.3% 13-Weeks Ended 1/2/22 YoY % Change Total Salty Snacks Utz Brands 12.7% 11.5% 12.6% 13.4% 11.7% 9.4% 14.5% 13.3% Expansion and Emerging continue to outperform with two-year total Utz growth rates outpacing the Category by ~340bps and Power Brands growing significantly faster Core momentum improving with two-year growth rates increasing from 2.9% in Q2’21 to 5.7% in Q3’21 to 7.7% in 4Q’21 Total Salty Snacks Power Brands Total Salty Snacks Utz Brands 25% 23% 48% 48% 23% 26% 13-Weeks Ended 1/2/22 Approximate % of Retail Sales
℠ 11 Source: IRI, Total US MULO + C. on a pro forma basis. Strong Growth Across All Channels Retail Channel Retail Sales 2-Year CAGR (13-Weeks Ended 1/2/22) Grocery C-Store 12.5% MassMULO + C Club 10.5% 10.8%10.9% 10.4% 13.4% 15.7% 13.3% 10.4% 20.3% 9.0% 9.2% 5.9% 4.7% 6.7% 13-weeks ended 1/2/22 YoY % Change Total Salty Snacks Utz Brands 12.7% 8.4% 15.9% 24.6% 15.9% 11.7% 12.6% 12.9% 5.0% 10.3% Total Salty Snacks Power Brands One and two-year share gains in the Grocery Channel Double-digit one and two-year growth in both the Grocery and Mass Channels Total Salty Snacks Utz Brands 43% 6% 20% 51% 9% 14% 13-Weeks Ended 1/2/22 Approximate % of Retail Sales 23% 19%
℠ Optimizing Consumer Marketing Investments 12 Significant shift from sports sponsorships and planning a ~40% increase vs. 2021 in working media spend focused on more targeted awareness building media Continued expansion of insights and brand investments to create stronger consumer pull of Utz Power Brands with a focus on Utz®, ON THE BORDER®, and Zapp’s® Launched 100 Years for Utz $100k Giveaway to grow first party audience data Enhancing Utz website (utzsnacks.com) and brand website platforms in 2Q’22 to improve brand storytelling and direct-to-consumer experience Refreshed visual identity of Utz Potato Chips underway to elevate brand assets and at-shelf appetite appeal with Utz Pretzels and Utz Cheese to follow
℠ 13 Looking Ahead to Fiscal 2022 Well-positioned for strong Organic Net Sales growth – Utz retail sales and pricing momentum are off to a strong start with a 16.9% year- over-year sales increase for the 8-week period through February 20, 2022, coupled with an approximately 200bps improvement on Price per Volume vs. 4Q’21(1) Delivering significant customer wins beyond our Core geographies Implementing pricing actions and driving productivity initiatives, with momentum building, to help offset inflation Optimizing portfolio through SKU and brand rationalization Shifting marketing spend towards higher working media social/digital spend Focused on acquisition integration and delivering synergy targets Source: IRI, Total US MULO + C. on a pro forma basis.
14 Financial Performance Ajay Kataria, Chief Financial Officer
℠ Fourth Quarter 2021 Financial Results Summary 15 Note: Pro Forma Net Sales, Adjusted SG&A, Adjusted Gross Profit, Adjusted EBITDA, Adjusted Net Income and Adjusted EPS are Non-GAAP financial measures. See appendix for reconciliation of Non-GAAP financial measures to most directly comparable GAAP measures. (1) Q4 2020 results benefited from the impact of the 53rd week. The company estimates the “extra week” contributed approximately $16M in Net Sales and $3M in Adjusted EBITDA. (2) Adjusted EBITDA includes miscellaneous non-operating expenses and other non-operating income such as certain royalties and income from sale of manufacturing byproducts. 14-weeks Ended January 3, 2021(1)In $millions, except per share amounts Net Sales Adj. SG&A % of net sales 246.3 56.9 23.1% Adj. Gross Profit % of net sales 90.5 36.7% YoY Change Adj. EBITDA(2) % of net sales Adj. Net Income Pro Forma Net Sales 34.0 13.8% 25.5 300.9 66.2 22.0% 103.3 34.3% 37.7 12.5% 16.0 +22.2% +16.3% (110bps) +14.1% (241bps) +9.2% +10.9% (128bps) (37.3%) Adj. EPS nm $0.11 nm 275.5 300.9 13-weeks Ended January 2, 2022 4Q’20 4Q’21
℠ Full-Year 2021 Financial Results Summary 16 In $millions, except per share amounts Net Sales Adj. SG&A % of net sales 964.3 233.4 24.2% Adj. Gross Profit % of net sales 365.4 37.9% YoY Change Adj. EBITDA(2) % of net sales Adj. Net Income Pro Forma Net Sales 133.9 13.9% 68.8 1,180.7 271.8 23.0% 424.9 36.0% 156.2 13.2% 77.5 +22.4% +16.5% (120bps) +16.3% (191bps) +0.9% +16.7% (66bps) 12.6% Adj. EPS nm $0.54 nm 1,173.4 1,184.3 Note: Pro Forma Net Sales, Adjusted SG&A, Adjusted Gross Profit, Adjusted EBITDA, Adjusted Net Income and Adjusted EPS are Non-GAAP financial measures. See appendix for reconciliation of Non-GAAP financial measures to most directly comparable GAAP measures. (1) FY 2020 results benefited from the impact of the 53rd week. The company estimates the “extra week” contributed approximately $16M in Net Sales and $3M in Adjusted EBITDA. (2) Adjusted EBITDA includes miscellaneous non-operating expenses and other non-operating income such as certain royalties and income from sale of manufacturing byproducts. 53-weeks Ended January 3, 2021(1) 52-weeks Ended January 2, 2022 FY’20 FY’21
℠ Good Liquidity and No Significant Debt Maturities Until 2028 17 Good Liquidity ~$139M liquidity as of 1/2/22 (Fiscal YE ‘2021) – $41.9M Cash + $96.9M available on ABL 1% principal amortization on term loan annually ~5x interest coverage Well-Priced Credit Structure Term Loan B priced at L+300bps with no floor – Includes $500M nominal interest rate swap through 9/30/26 (swap rate of 1.39%) Most capital leases priced under 4% fixed Focused on De-Leveraging Net debt of $817.8M as of January 2, 2022 Pro Forma Net Leverage ratio of 4.7x based on LTM Normalized Further Adjusted EBITDA of $175.5M(1) Long-term net leverage target of 3x – 4x Debt Maturities ($M) as of 1/2/22(2) 1) Net Leverage Ratio is a Non-GAAP financial measures. See appendix for reconciliation of Non-GAAP financial measures to most directly comparable GAAP measures. NLR based on Normalized Further Adjusted EBITDA. 2) Maturities represent Term Loan B and ABL and excludes capital leases of $34.8M and deferred purchase price of $1.7M. 161 500 287 2021 2022 2023 2024 2025 20272026 2028 787 ABL Term Loan B (fixed) Covenant-lite Debt Structure No financial maintenance covenants on Term Loan B ABL springing covenant FCCR 1.0x required minimum – only triggered if excess availability (as defined) is less than the greater of 10% of the line cap (as defined) and $10M FCCR ~3x provides substantial EBITDA headroom above 1.0x covenant Term Loan B (floating)
℠ 18 4Q’21 Net Sales Bridge 4Q’21 Net Sales YoY Growth Decomposition (2)(1) Growth driven by acquisitions and Organic Net Sales growth of 7.4% (+8.9% excluding IO discounts) Price/mix improvement ramping up and building momentum as we exit 4Q'21 Volume growth positive post COVID-19 overlap despite continued supply disruptions Pro Forma Net Sales 2-year CAGR of 7.9% in 4Q’21 and 6.2% in full year 53rd WeekIO Discounts 4Q21 Actual Acquisitions 22.2% 6.0% Price/Mix 2.9% -8.4% 4Q21 13-Week -1.5% Volume 23.2% 30.6% (1) Acquisitions include partial period results of Truco Enterprises from 12/14/2020 to 1/2/2022; H.K. Anderson from 11/2/2020 to 1/2/2022; Vitner’s from 2/8/2021 to 1/2/2022; Festida 6/7/2021 to 1/2/2022; and RW Garcia 12/6/2021 to 1/2/2022 (2) Estimated impact due to conversion of employee-serviced DSD routes to independent operator-serviced routes.
℠ 4Q’20 13-Week -0.5% 3.7% Price/Mix Inflation 0.2% SG&A (ex- Transportation) Productivity 0.3% Volume -6.8%1.2% 4Q’21Acquisitions 12.5% 4Q’20 Actual 0.6% 53rd Week 13.8% 13.3% 19 4Q’21 Adjusted EBITDA Margin Bridge 4Q’21 Adjusted EBITDA Margin Decomposition Note: Adjusted EBITDA Margin is a Non-GAAP financial measure. See appendix for reconciliation of Non-GAAP financial measures to most directly comparable GAAP measures. Favorable price/mix as benefits from pricing actions continue to build Momentum increasing on productivity initiatives Volume up slightly despite continued supply chain disruptions Higher gross input cost inflation which includes commodities, transportation and labor
℠ 20 Price Actions Continue to Help Offset Rising Inflation Gross Input Cost Inflation % vs. 2020 Price/Mix Contribution as a % of Net Sales 2Q’21 2.3% 4Q’211Q’21 3Q’21 4.2% 1.9% 6.0% Pricing actions are building to help offset rising inflation 1H’21 2H’21 Mid-Single- Digit % Mid-Teens % Pricing actions accelerated in the third and fourth quarters but continue to lag rising gross input cost inflation Exited the year with a price/mix contribution as a % of Net Sales above 6% Additional pricing actions taken mid-February 2022 with further actions planned throughout the year help offset anticipated inflation in fiscal 2022 (Gross input cost inflation defined as commodities, labor and transportation) (Excludes benefits from productivity)
℠ 21 Fiscal 2022 Outlook Expect to build on our sales momentum exiting 2021 and deliver strong Organic Net Sales growth in 2022 Anticipate modest Adjusted EBITDA growth as benefits from our pricing and productivity actions offset input cost inflation, while we continue to make investments to support key customer growth and geographic expansion for our advantaged portfolio of snacking brands Fiscal 2021 Results Fiscal 2022 Outlook Net Sales Adjusted EBITDA $1,180.7M $156.2M +7% to 10% Total growth +4% to 6% Organic growth Modest growth Fiscal 2022 Outlook versus 2021 Actual Results : Additional Assumptions: Capital expenditures of $50M to $60M Effective tax rate of approximately 20%(1) Net leverage consistent with fiscal 2021 Low-double-digit % gross input cost inflation which includes commodities, labor, and transportation (1) Normalized GAAP basis tax expense, which excludes one-time items. Note: Adjusted EBITDA Margin is a Non-GAAP financial measure. See appendix for reconciliation of Non-GAAP financial measures to most directly comparable GAAP measures.
℠ 22 Confident in Our Long-term Margin Opportunity Pricing actions to provide higher long-term baseline that will compound the benefits of volume and distribution growth Productivity programs on track to achieve 3% to 4% of COGS goal by 2023, with improving future benefits Improving manufacturing and logistics capabilities to increase throughput and drive efficiencies Acquisitions enabling increased scale of manufacturing capabilities to efficiently support strong Power Brands demand Buyouts of distribution rights and infrastructure from third-party distributors driving improved customer service and growth in key markets Recent investments in technology infrastructure to unlock insights, drive margin enhancing initiatives, and enable faster integration of acquisitions Augmenting leadership team with new talent in critical areas to enhance value creation
Appendix 23
℠ Reconciliation of Non-GAAP Financial Measures to Reported Financial Measures 24 Net Sales and Pro Forma Net Sales - One Week Adjustment 14-Weeks Ended 1-Week Ended 13-Weeks Ended 53-Weeks Ended 1-Week Ended 52-Weeks Ended (Successor) (Successor) (Successor) (Combined Successor and Predecessor) (Successor) (Combined Successor and Predecessor) (dollars in millions) January 3, 2021 January 3, 2021 December 27, 2020 January 3, 2021 January 3, 2021 December 27, 2020 Net Sales $ 246.3 $ 15.9 $ 230.4 $ 964.3 $ 15.9 $ 948.4 Net Sales and Pro Forma Net Sales (dollars in millions) January 2, 2022 December 27, 2020 January 2, 2022 December 27, 2020 Net Sales $ 300.9 $ 230.4 $ 1,180.7 $ 948.4 H.K. Anderson Pre-Acquisition Net Sales - 1.1 - 8.0 Vitner's Pre-Acquisition Net Sales - 4.9 - 20.0 Truco Enterprises Pre-Acquisition Net Sales - 37.1 - 187.7 Festida Foods Pre-Acquisition Net Sales - 2.0 3.6 9.3 Pro Forma Net Sales $ 300.9 $ 275.5 $ 1,184.3 $ 1,173.4 13-Weeks Ended 52-Weeks Ended
℠ Reconciliation of Non-GAAP Financial Measures to Reported Financial Measures 25 14-Weeks Ended 1-Week Ended 13-Weeks Ended 53-Weeks Ended 1-Week Ended 52-Weeks Ended (Successor) (Successor) (Successor) (Combined Successor and Predecessor) (Successor) (Combined Successor and Predecessor) (dollars in millions) January 3, 2021 January 3, 2021 December 27, 2020 January 3, 2021 January 3, 2021 December 27, 2020 Gross Profit $ 81.6 $ 4.9 $ 76.7 $ 332.7 $ 4.9 $ 327.8 Depreciation and Amortization 7.5 - 7.5 31.3 - 31.3 Non-Cash, non-recurring adjustments 1.4 - 1.4 1.4 - 1.4 Adjusted Gross Profit $ 90.5 $ 4.9 $ 85.6 $ 365.4 $ 4.9 $ 360.5 Adjusted Gross Profit as a % of Net Sales 36.7% 30.8% 37.2% 37.9% 30.8% 38.0% Gross Profit, Adjusted Gross Profit and PF Adj Gross Profit - One Week Adjustment Organic Net Sales (dollars in millions) Net Sales as Reported Impact of Acquisitions Organic Net Sales Net Sales as Reported Impact of Acquisitions Impact of 53rd Week Organic Net Sales Net Sales as Reported Organic Net Sales Total Net Sales $ 300.9 $ 53.7 $ 247.2 $ 246.3 $ 21.6 $ 15.9 $ 208.8 22.2 % 7.4 % (dollars in millions) Net Sales as Reported Impact of Acquisitions Organic Net Sales Net Sales as Reported Impact of Acquisitions Impact of 53rd Week Organic Net Sales Net Sales as Reported Organic Net Sales Total Net Sales $ 1,180.7 $ 226.4 $ 954.3 $ 964.3 $ 108.4 $ 15.9 $ 840.0 22.4 % 0.6 % % Change % ChangeJanuary 2, 2022 Three Months Ended January 2, 2022 January 2, 2022 Full-Year Ended January 2, 2022
℠ Reconciliation of Non-GAAP Financial Measures to Reported Financial Measures 26 Gross Profit, Adjusted Gross Profit and PF Adj Gross Profit (dollars in millions) January 2, 2022 December 27, 2020 January 2, 2022 December 27, 2020 Gross Profit $ 90.5 $ 76.7 $ 383.9 $ 327.8 Depreciation and Amortization 9.6 7.5 35.0 31.3 Non-Cash, non-recurring adjustments 3.2 1.4 6.0 1.4 Adjusted Gross Profit 103.3 85.6 424.9 360.5 Adjusted Gross Profit as a % of Net Sales 34.3% 37.2% 36.0% 38.0% Depreciation and Amortization - COGS (9.6) (7.5) (35.0) (31.3) H.K. Anderson Pre-Acquisition Gross Profit - 0.1 - 1.1 Vitner's Pre-Acquisition Gross Profit - 2.4 - 9.7 Truco Enterprises Pre-Acquisition Gross Profit - 14.1 - 74.5 Festida Foods Pre-Acquisition Gross Profit - 1.7 2.7 6.6 Pro Forma Gross Profit 93.7 96.4 392.6 421.1 Depreciation and Amortization - COGS 9.6 7.5 35.0 31.3 Festida Pre-Acquisition D&A - 0.5 0.9 2.0 Depreciation and Amortization - Total 9.6 8.0 35.9 33.3 Pro Forma Adjusted Gross Profit $ 103.3 $ 104.4 $ 428.5 $ 454.4 Pro Forma Adjusted Gross Profit as a % of Pro Forma Net Sales 34.3% 37.9% 36.2% 38.7% 13-Weeks Ended 52-Weeks Ended
℠ 27 Reconciliation of Non-GAAP Financial Measures to Reported Financial Measures 14-Weeks Ended 1-Week Ended 13-Weeks Ended 53-Weeks Ended 1-Week Ended 52-Weeks Ended (Successor) (Successor) (Successor) (Combined Successor and Predecessor) (Successor) (Combined Successor and Predecessor) (dollars in millions) January 3, 2021 January 3, 2021 December 27, 2020 January 3, 2021 January 3, 2021 December 27, 2020 Selling, General and Administrative Expense - Including Depreciation and Amortization $ 82.2 $ 1.8 $ 80.4 $ 303.1 $ 1.8 $ 301.3 Depreciation and Amortization in SG&A Expense (7.7) - (7.7) (19.2) - (19.2) Non-Cash, and/or Non-recurring Adjustments (17.6) - (17.6) (50.5) - (50.5) Adjusted Selling, General and Administrative Expense $ 56.9 $ 1.8 $ 55.1 $ 233.4 $ 1.8 $ 231.6 Adjusted Selling, General and Administrative Expense - One Week Adjustment Adjusted Selling, General and Administrative Expense (dollars in millions) January 2, 2022 December 27, 2020 January 2, 2022 December 27, 2020 Selling, General and Administrative Expense - Including Depreciation and Amortization $ 96.4 $ 80.4 $ 375.2 $ 301.3 Depreciation and Amortization in SG&A Expense (11.6) (7.7) (45.5) (19.2) Non-Cash, and/or Non-recurring Adjustments (18.6) (17.6) (57.9) (50.5) Adjusted Selling, General and Administrative Expense 66.2 55.1 271.8 231.6 Adjusted Selling, General and Administrative Expense as a % of Net Sales 22.0 % 23.9 % 23.0 % 24.4 % Vitner's Pre-Acquisition SG&A Expense - 2.0 - 7.8 Truco Enterprises Pre-Acquisition SG&A Expense - 5.1 - 29.3 Festida Foods Pre-Acquisition SG&A Expense - 1.0 1.5 3.5 Pro Forma Adjusted SG&A Expense $ 66.2 $ 63.2 $ 273.3 $ 272.2 Pro Forma Adjusted Selling, General and Administrative Expense as % of Pro Forma Net Sales 22.0 % 22.9 % 23.1 % 23.2 % 13-Weeks Ended 52-Weeks Ended
℠ 28 Reconciliation of Non-GAAP Financial Measures to Reported Financial Measures (dollars in millions) January 2, 2022 December 27, 2020 January 2, 2022 December 27, 2020 Core D&A - Non-Acquisition-related included in Gross Profit $ 6.4 $ 2.8 $ 19.5 $ 16.9 Step-Up D&A - Transaction-related included in Gross Profit 3.4 4.7 15.7 14.4 Depreciation & Amortization - included in Gross Profit 9.8 7.5 35.2 31.3 Core D&A - Non-Acquisition-related included in SG&A Expense 2.3 5.4 10.2 10.6 Step-Up D&A - Transaction-related included in SG&A Expense 9.3 2.3 35.3 8.6 Depreciation & Amortization - included in SG&A Expense 11.6 7.7 45.5 19.2 Depreciation & Amortization - Total $ 21.4 $ 15.2 $ 80.7 $ 50.5 Core Depreciation and Amortization $ 8.7 $ 8.2 $ 29.7 $ 27.5 Step-Up Depreciation and Amortization 12.7 7.0 51.0 23.0 Total Depreciation and Amortization $ 21.4 $ 15.2 $ 80.7 $ 50.5 13-Weeks Ended 52-Weeks Ended Depreciation and Amortization Expense
℠ 29 Reconciliation of Non-GAAP Financial Measures to Reported Financial Measures (1) Income Tax Rate Adjustment calculated as Income (Loss) before taxes plus (i) Acquisition, Step-Up Depreciation and Amortization and (ii) Other Non-Cash and/or Non-Recurring Adjustments, multiplied by an effective cash tax rate, minus the actual tax provision recorded in the Consolidated Statement of Operations and Comprehensive Income (Loss). The effective cash tax rate includes corporate income tax payments plus non-resident withholding and tax distributions, which are considered equivalent to tax. Adjusted Net Income 13-Weeks Ended 14-Weeks Ended 52-Weeks Ended 53-Weeks Ended January 2, 2022 January 3, 2021 January 2, 2022 January 3, 2021 (dollars in millions, except per share data) (Successor) (Successor) (Successor) (Combined Successor and Predecessor) Net Income (Loss) $ (16.2) $ (87.5) $ 8.0 $ (104.5) Deferred Financing Fees 0.4 4.7 1.1 6.6 Depreciation and Amortization 21.4 15.2 80.7 50.5 Non-Acquisition Related Depreciation and Amortization (8.7) (8.2) (29.7) (27.4) Acquisition Step-Up Depreciation and Amortization: 12.7 7.0 51.0 23.1 Certain Non-Cash Adjustments 2.7 4.9 11.6 3.2 Acquisition and Integration 7.9 8.6 22.6 40.0 Business Transformation Initiatives 10.8 5.3 28.9 8.8 Financing-Related Costs - 0.1 0.7 2.7 (Gain) Loss on Remeasurement of Warrant Liability (2.5) 73.9 (36.7) 91.8 Other Non-Cash and/or Non-Recurring Adjustments 18.9 92.8 27.1 146.5 Income Tax-Rate Adjustment(1) 0.2 8.5 (9.7) (2.9) Adjusted Net Income $ 16.0 $ 25.5 $ 77.5 $ 68.8 Basic Shares Outstanding on an As-Converted Basis 136.9 136.9 Fully Diluted Shares on an As-Converted Basis 142.4 142.4 Adjusted Earnings Per Share $ 0.11 $ 0.54
℠ 30 Reconciliation of Non-GAAP Financial Measures to Reported Financial Measures See footnotes in Utz’s Q4 earnings press release dated March 3, 2022. 14-Weeks Ended 1-Week Ended 13-Weeks Ended 53-Weeks Ended 1-Week Ended 52-Weeks Ended (Successor) (Successor) (Successor) (Combined Successor and Predecessor) (Successor) (Combined Successor and Predecessor) (dollars in millions) January 3, 2021 January 3, 2021 December 27, 2020 January 3, 2021 January 3, 2021 December 27, 2020 Net (Loss) Income $ (87.5) $ 3.1 $ (90.6) $ (104.5) $ 3.1 $ (107.6) Plus non-GAAP adjustments: Income Tax (Benefit) or Expense 2.7 - 2.7 3.7 - 3.7 Depreciation and Amortization 15.2 - 15.2 50.5 - 50.5 Interest Expense, Net 11.5 - 11.5 40.0 - 40.0 Interest Income (IO loans)(1) (0.7) - (0.7) (2.4) - (2.4) EBITDA (58.8) 3.1 (61.9) (12.7) 3.1 (15.8) Certain Non-Cash Adjustments(2) 4.9 - 4.9 3.2 - 3.2 Acquisition and Integration(3) 8.6 - 8.6 40.0 - 40.0 Business Transformation Initiatives(4) 5.3 - 5.3 8.8 - 8.8 Financing-Related Costs(5) 0.1 - 0.1 2.7 - 2.7 Loss on Remeasurement of Warrant Liabilities(6) 73.9 - 73.9 91.9 - 91.9 Adjusted EBITDA 34.0 3.1 30.9 133.9 3.1 130.8 Adjusted EBITDA as a % of Net Sales 13.8% 19.5% 13.4% 13.9% 19.5% 13.8% EBITDA and Adjusted EBITDA - One Week Adjustment
℠ 31 Reconciliation of Non-GAAP Financial Measures to Reported Financial Measures See footnotes in Utz’s Q4 earnings press release dated March 3, 2022 EBITDA, Adjusted EBITDA and Further Adjusted EBITDA (dollars in millions) January 2, 2022 December 27, 2020 January 2, 2022 December 27, 2020 Net (Loss) Income $ (16.2) $ (90.6) $ 8.0 $ (107.6) Plus non-GAAP adjustments: Income Tax (Benefit) or Expense 5.8 2.7 8.1 3.7 Depreciation and Amortization 21.4 15.2 80.7 50.5 Interest Expense, Net 8.2 11.5 34.7 40.0 Interest Income (IO loans)(1) (0.4) (0.7) (2.4) (2.4) EBITDA 18.8 (61.9) 129.1 (15.8) Certain Non-Cash Adjustments(2) 2.7 4.9 11.6 3.2 Acquisition and Integration(3) 7.9 8.6 27.0 40.0 Business Transformation Initiatives(4) 10.8 5.3 24.5 8.8 Financing-Related Costs(5) - 0.1 0.7 2.7 (Gain) Loss on Remeasurement of Warrant Liabilities(6) (2.5) 73.9 (36.7) 91.9 Adjusted EBITDA 37.7 30.9 156.2 130.8 Adjusted EBITDA as a % of Net Sales 12.5% 13.4% 13.2% 13.8% H.K. Anderson Pre-Acquisition Adjusted EBITDA(7) - 0.1 - 1.1 Vitner's Pre-Acquisition Adjusted EBITDA(7) - 0.4 - 2.0 Truco Enterprises Pre-Acquisition Adjusted EBITDA(7) - 8.8 - 47.5 Festida Foods Pre-Acquisition Adjusted EBITDA(7) - 1.3 2.6 5.9 R.W. Garcia Pre-Acquisition Adjusted EBITDA(7) 1.1 1.3 5.4 5.4 Further Adjusted EBITDA $ 38.8 $ 42.8 $ 164.2 $ 192.7 Further Adjusted EBITDA as % of Pro Forma Net Sales 12.9% 15.5% 13.9% 16.4% 13-Weeks Ended 52-Weeks Ended
℠ 32 Reconciliation of Non-GAAP Financial Measures to Reported Financial Measures (dollars in millions) Q1 Q2 Q3 Q4 FY 2020 Q1 Q2 Q3 Q4 FY 2021 Further Adjusted EBITDA $ 40.8 $ 51.5 $ 53.6 $ 41.4 $ 187.3 $ 41.0 $ 38.1 46.3 $ 38.8 $ 164.2 Acquisition Synergies(1) 2.9 2.6 2.6 2.0 10.1 3.1 3.1 2.6 2.5 11.3 Public Company Costs(2) (0.8) (0.7) (0.6) - (2.1) - - - - - Normalized Further Adjusted EBITDA $ 42.9 $ 53.4 $ 55.6 $ 43.4 $ 195.3 $ 44.1 $ 41.2 $ 48.9 $ 41.3 $ 175.5 FY 2020 FY 2021 Further and Normalized Further Adjusted EBITDA (1) Represents identified integration-related cost savings expected to be realized from the elimination of certain procurement, manufacturing, and logistics as well as selling, general and administrative expenses in connection with the acquisition of Kennedy Endeavors, Kitchen Cooked, Truco Enterprises, Vitner’s, Festida Foods and R.W. Garcia. (2) Represents estimated incremental costs of operating as a public company following the closing of the business combination, including exchange listing and other fees; audit and compliance costs; investor relations costs; additional D&O insurance premium; legal expenses associated with public filings and other items; and cash compensation for the Board of Directors. (3) Capital Leases include equipment term loans and excludes the impact of step-up accounting. (4) Excludes amounts related to guarantees on IO loans which are collateralized by routes. We have the ability to recover substantially all of the outstanding loan value in the event of a default scenario, which is uncommon. Net Debt and Net Leverage Ratio (dollars in millions) As of January 2, 2022 Term Loan $ 787.2 Line of Credit 36.0 Capital Leases(3) 34.8 Deferred Purchase Price 1.7 Gross Debt(4) 859.7 Cash and Cash Equivalents 41.9 Total Net Debt $ 817.8 Last 52-Weeks Normalized Further Adjusted EBITDA $ 175.5 Net Leverage Ratio 4.7x