- Will Detail Plans to Expand Power Brands Outside Core Geography
and Transform Supply Chain to Fuel Margin Improvements;
- Will Introduce New Three-Year Financial Targets; and
- Will Reaffirm Fiscal Year 2023 Outlook
Utz Brands, Inc. (NYSE: UTZ) (“Utz” or the “Company”), a leading
U.S. manufacturer of branded salty snacks, will host its 2023
Investor Day today at the New York Stock Exchange, beginning at
9:30 am ET.
“Utz has some of America’s favorite snack brands, and over the
past several years, we have simplified our portfolio and
fundamentally evolved the business through capacity, distribution
and capability investments,” said Howard Friedman, Chief Executive
Officer of Utz. “We have laid a solid foundation for growth and see
significant opportunities to increase value through geographic
expansion, supply chain transformation initiatives and other
productivity improvements. As the third largest Salty Snack
platform in the U.S., and the only one focused solely on Salty
Snacks, we have a compelling long-term growth opportunity, and we
believe we have the right team and strategy in place to continue to
win.”
Friedman continued, “As we look to the future, we will lean into
the strength of our Power Brands, which include Utz®, Zapp’s®,
Boulder Canyon®, and On The Border®, with increased marketing,
cross-category innovation and market expansion across the U.S. In
doing so, we expect our top-line growth to outpace the Salty Snack
category and our bottom-line growth to generate outsized
shareholder returns. We look forward to sharing more details around
our long-term value creation plans at our Investor Day today.”
Topics to be covered at the Investor Day include:
- Focused Portfolio Strategy: Utz has further focused its
brand portfolio that is diversified and clearly defined to meet
various consumer needs. The Company will be accelerating
investments in marketing and innovation to drive top-line growth
and achieve share gains in the attractive Salty Snack
category.
- Further Penetration of Expansion Geographies and Untapped
Channels and Customers: There is a significant distribution
opportunity outside the Company’s Core geography. Utz will outline
efforts to further expand its Power Brands in Expansion geographies
as well as efforts to hold share in its Core geographies.
- Supply Chain Transformation: The Company will detail
efforts to transform its supply chain into a more cost-efficient
and flexible system. As a result of continuous improvement projects
and network optimization initiatives, the Company expects to
deliver $135 million in cost savings1 over the next three years
while deploying capital efficiently to achieve these cost savings
and to provide capacity for growth, the details of which will be
discussed in the Company’s presentation.
- Leading Capabilities Utz has a dynamic, hybrid
go-to-market model, which achieves broad distribution across
channels and customers. The Company will be enhancing its
independent operator Direct Store Distribution system to further
improve execution and generate higher returns. Other organizational
capabilities will be further strengthened while driving out
costs.
- Improved Balance Sheet Flexibility. The Company will
lay-out its plans to accelerate cash generation and to maintain a
disciplined capital allocation approach which will reduce leverage.
Acquisitions will continue to be pursued opportunistically.
Reaffirms Fiscal Year 2023 Outlook
The Company today reaffirmed its previously issued full-year
fiscal 2023 financial outlook announced in its press release issued
on November 9, 2023:
- Net sales growth of 2% to 3% and Organic Net Sales growth of 3%
to 4%
- Adjusted EBITDA growth of 8% to 11%
- Net Leverage Ratio below 4.5x by year-end fiscal 2023
With respect to projected fiscal 2023 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.
New Three-Year Financial Targets
At today’s event, Utz plans to introduce the following
three-year financial targets:
- 4% to 5% Organic Net Sales growth (CAGR FY 2023 – FY 2026)
- ~16% Adjusted EBITDA margin in FY 2026
- Double digit annual Adjusted Earnings per Share growth (CAGR FY
2023 – FY 2026)
- Net Leverage Ratio of ~3X by year-end 2026
With respect to projected fiscal 2026 Adjusted EBITDA margin,
Adjusted Earnings per Share growth (CAGR FY 2023 – FY 2026) and Net
Leverage Ratio, 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 and Adjusted Earnings. We expect
the variability of these items to have a potentially unpredictable,
and potentially significant, impact on our future financial
results.
Investor Webcast Details
The presentation will be broadcast online at
https://investors.utzsnacks.com on December 15, 2023 from 9:30am to
12:00pm Eastern Time. Click on https://app.webinar.net/azvOL6X0qM4
to access the event. An on-demand replay of the presentations will
be available starting at approximately 3:00PM Eastern Time on
Friday, December 15th, 2023.
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®, 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 has multiple manufacturing facilities located
across the U.S. to serve our growing customer base. 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),
U.S. Securities and Exchange Commission 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 Company
information. 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.
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
Utz Brands, Inc. (“the Company”), including plans related
transformation of the Company’s supply chain, the Company’s
geographic expansion, the Company’s product offerings and product
mix, the Company’s ESG priorities, the Company’s cost savings plans
and the Company’s logistics optimization efforts; the estimated or
anticipated future results and benefits of the Company’s plans and
operations; future capital structure; future opportunities for the
Company; the effects of inflation or supply chain disruptions;
statements regarding the Company’s project balance sheet and
liabilities, including net leverage; 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’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, including
changes in consumer spending due to factors such as increasing
household debt; 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,
particularly in the Company’s Expansion geographies; costs
associated with building brand loyalty and interest in the
Company’s products, which may be affected by actions by the
Company’s competitors’ that result in the Company’s products not
suitably differentiated from the products of their competitors;
consolidation of key suppliers to the Company; inability of the
Company to adopt efficiencies into its manufacturing processes,
including automation and labor optimization, its network, including
through plant consolidation and lowest landed cost for shipping its
products, or its logistics operation; 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; 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; 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 1, 2023, 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.
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 press release includes certain financial measures not
presented in accordance with GAAP, including, but not limited to,
Organic Net Sales, Adjusted Gross Profit, Adjusted SD&A,
EBITDA, Adjusted EBITDA, Normalized Adjusted EBITDA, Adjusted
EBITDA Margin, Adjusted Net Income, and Adjusted Earnings Per
Share, and certain ratios and other metrics derived therefrom.
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
the Company’s investor day 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.
With respect to projected fiscal 2026 Adjusted EBITDA margin,
Adjusted Earnings per Share growth (CAGR FY 2023 – FY 2026) and Net
Leverage Ratio, 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 and Adjusted Earnings. We expect
the variability of these items to have a potentially unpredictable,
and potentially significant, impact on our future financial
results.
Utz uses the following non-GAAP financial measures in its
financial communications, and in the future could use others:
- Organic Net Sales
- Adjusted Gross Profit
- Adjusted Gross Profit as % of Net Sales (Adjusted Gross Profit
Margin)
- Adjusted Selling, Distribution, and Administrative Expense
- Adjusted Selling, Distribution, 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)
- Normalized Adjusted EBITDA
- Net Leverage Ratio
Organic Net Sales is defined
as net sales excluding the impact of acquisitions and excluding the
impact of IO route conversions.
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.
Adjusted Selling, Distribution, and
Administrative Expense is defined as all Selling,
Distribution, and Administrative expense excluding Depreciation and
Amortization expense, a non- cash item. In addition, Adjusted
Selling, Distribution, 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, Distribution, and Administrative
Expense as a percentage of Net Sales as an additional measure for
investors to evaluate our Adjusted Selling, Distribution, 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, Truco
Enterprises, R.W. Garcia and Festida. 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.
Normalized Adjusted EBITDA
is defined as Adjusted EBITDA after giving effect to
pre-acquisition Adjusted EBITDA of the Festida Foods and R.W.
Garcia acquisitions, and the buyout of Clem and J&D Snacks.
Net Leverage Ratio is
defined as Normalized Adjusted EBITDA divided by Net Debt. Net Debt
is defined as Gross Debt less Cash and Cash Equivalents.
Management believes that the non-GAAP financial measures are
meaningful to investors because they increase transparency and
assist 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.
1 Cost savings is measured assuming production levels and costs
consistent with the Company’s forecasts.
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version on businesswire.com: https://www.businesswire.com/news/home/20231215258523/en/
Utz Brands, Inc. Contact:
Investors Kevin Powers kpowers@utzsnacks.com
Media Kevin Brick kbrick@utzsnacks.com
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