Utz Brands Reports Fourth Quarter and Full-Year 2020 Financial Results
Utz Brands reported strong fiscal fourth quarter results for 2020, with net sales reaching $246.3 million, up 22.1% year-over-year. The company achieved adjusted net income of $20.4 million, a significant increase from $0.5 million in Q4 2019. Full-year net sales totaled $964.3 million, a 25.5% increase, driven by robust performance in Power Brands and an additional week of sales from a 53-week fiscal year. Looking forward, Utz projects modest organic growth in 2021, estimating net sales consistent with 2020 levels and adjusted EBITDA between $180-$190 million.
- Net sales increased by 22.1% in Q4 2020 to $246.3 million.
- Full-year net sales rose 25.5% to $964.3 million.
- Adjusted net income surged to $20.4 million in Q4 2020 from $0.5 million in Q4 2019.
- Projected two-year CAGR of approximately 6% from 2020 to 2021, exceeding long-term growth expectations of 3-4%.
- The company reported a net loss of $13.6 million in Q4 2020, albeit an improvement from a $24 million loss in Q4 2019.
- Increased expenses related to acquisitions and marketing investments impacted profitability.
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 14-week fiscal fourth quarter and 53-week fiscal 2020 ended January 3, 2021.
“2020 was a transformational year for Utz. We began our new chapter as a publicly traded company, and we delivered double-digit retail sales growth, making Utz the #3 brand platform in U.S. Salty Snacks and one of the fastest growing salty snack platforms of scale. Growth was led by our Power Brands and we added three million more buyers during the year. Despite the challenges of the pandemic and the demanding environment for our team, we reacted quickly and put protocols in place to protect our associates and customers, which enabled us to deliver these strong results,” said Dylan Lissette, Chief Executive Officer of Utz. “Looking ahead, we remain excited about our opportunity for continued long-term profitable growth, as we actively deploy our value creation strategies for the benefit of our stockholders.”
Fourth Quarter and Full-Year 2020 Financial Highlights
(in $millions) |
|
14-weeks
|
|
13-weeks
|
|
%
|
|
53-weeks
|
|
52-weeks
|
|
%
|
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|
|
|
|
|
|
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|
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Net Sales |
|
$ |
246.3 |
|
|
$ |
201.8 |
|
|
22.1 |
% |
|
$ |
964.3 |
|
|
$ |
768.2 |
|
|
25.5 |
% |
Pro Forma Net Sales(2,3) |
|
268.6 |
|
|
251.5 |
|
|
6.8 |
% |
|
1,144.2 |
|
|
1,022.6 |
|
|
11.9 |
% |
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Gross Profit |
|
81.6 |
|
|
65.7 |
|
|
24.2 |
% |
|
332.7 |
|
|
253.8 |
|
|
31.1 |
% |
||||
Adjusted Gross Profit(3) |
|
90.5 |
|
|
71.0 |
|
|
27.5 |
% |
|
365.4 |
|
|
270.6 |
|
|
35.0 |
% |
||||
Adjusted Gross Profit Margin(3) |
|
36.7 |
% |
|
35.2 |
% |
|
155 bps |
|
37.9 |
% |
|
35.2 |
% |
|
267 bps |
||||||
|
|
|
|
|
|
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|
|
|
|
|
|
||||||||||
Net Loss |
|
(13.6) |
|
|
(24.0) |
|
|
nm |
|
(12.6) |
|
|
(13.4) |
|
|
nm |
||||||
Adjusted Net Income(3) |
|
20.4 |
|
|
0.5 |
|
|
nm |
|
62.2 |
|
|
16.8 |
|
|
nm |
||||||
Adjusted EBITDA(3) |
|
34.0 |
|
|
16.6 |
|
|
104.8 |
% |
|
133.9 |
|
|
86.5 |
|
|
54.8 |
% |
||||
Adjusted EBITDA Margin(3) |
|
13.8 |
% |
|
8.2 |
% |
|
555 bps |
|
13.9 |
% |
|
11.3 |
% |
|
263 bps |
(1) Combined predecessor period of December 30, 2019 through August 28, 2020 and successor period of August 29, 2020 through January 3, 2021. A reconciliation of the combined predecessor period can be found in the tables accompanying this release. |
(2) Assumes the Company owned Kennedy Endeavors, Kitchen Cooked, H.K. Anderson and Truco Enterprises on the first day of fiscal 2019. Pro forma net sales are on an estimated comparable 13-week and 52-week basis. |
(3) 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 and Full-Year 2020 Growth Highlights
For the 13-week period ended December 27, 2020, our retail sales as measured by IRI MULO-C increased
For the 13-week period ended December 27, 2020, Power Brands retail sales growth of
IRI Retail Sales YoY Growth Highlights(1)
|
|
Period Ended December 27, 2020 |
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Last 13-weeks |
|
Last 52-weeks |
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|
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Total Retail Sales YoY Growth |
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|
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|
|
|
|
Salty Snack Category |
|
|
|
|
|
|
|
|
|
Utz |
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|
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|
Power Brands |
|
|
|
|
Foundation Brands(2) |
|
(1.2)% |
|
|
|
|
|
|
|
Sales by Geography YoY Growth |
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|
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|
|
|
|
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|
Core |
|
|
|
|
|
|
|
|
|
Salty Snack Category |
|
|
|
|
Utz |
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|
|
|
|
|
|
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Expansion |
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|
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|
Salty Snack Category |
|
|
|
|
Utz |
|
|
|
|
|
|
|
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Emerging |
|
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Salty Snack Category |
|
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Utz |
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|
(1) Source: IRI Custom Panel, Total US MULO + C, 13-weeks and 52-weeks ended 12/27/2020; % 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. |
Fourth Quarter 2020 Financial Results
See description of Non-GAAP financial measures mentioned in this press release and reconciliations of GAAP measures to Non-GAAP adjusted measures in the tables that accompany this release.
Net sales for the 14-week fourth quarter of 2020 increased
Pro Forma Net Sales increased
Gross profit increased
Selling and Administrative expenses were
Net loss was
Adjusted EBITDA increased
Balance Sheet and Cash Flow Highlights
Subsequent to the end of fiscal year 2020, on January 20, 2021, the Company placed a new
Capital expenditures totaled
Acquisition of VITNER’S®
On January 11, 2021, Utz announced that it entered into a definitive agreement with Snak-King Corp. to acquire certain assets of the C.J. Vitner business, a leading brand of salty snacks based in the Chicago, IL area. Utz closed on this transaction on February 8, 2021 and the purchase price of approximately
Fiscal Year 2021 Outlook
“We are encouraged with our start to 2021 with solid year-to-date retail sales growth through the end of February. While we will begin to lap strong results from the impact of COVID-19 in the prior year, our brands are well-positioned for long-term growth. Based on the significant increase in new buyers and higher repeat rates of purchase over the past twelve months, we believe that the COVID-19 impact on at-home eating occasions will have a lasting, beneficial impact to long-term demand trends. Our projected pro forma two-year CAGR for fiscal 2020 and 2021 of approximately
“From a cost and margin standpoint, our productivity efforts are on-target and set to double to
For the 52-week fiscal year ending January 2, 2022, the Company is providing the following guidance:
-
Net sales consistent with 2020 Pro Forma Net Sales of
$1.16B (1) with modest organic sales growth year over year. The Company’s projected pro forma two-year CAGR for fiscal 2020 and 2021 of approximately6% is well-above the Company’s long-term growth outlook of 3 –4% . -
Adjusted EBITDA of
$180 –$190 million (2) versus 2020 Further Adjusted EBITDA of$181 million (3), delivering a margin of approximately16% . -
Adjusted Earnings Per Share of
$0.70 –$0.75 , which excludes step-up depreciation & amortization (“D&A”), stock compensation expense, and non-recurring items. This assumes fully diluted shares on an as-converted basis of approximately 142 million.
In addition to the risks and uncertainties identified under “Forward-Looking Statements,” the Company’s 2021 guidance is estimated based on the following assumptions:
-
Funded
$25 million Vitner's acquisition in February 2021 with balance sheet cash - Expecting 200 – 250 Independent Route (“IO”) conversions
-
Core D&A of
$25 –$27 million and step-up D&A of$57 –$59 million , both comprised of approximately 2/3 cost of goods sold and 1/3 selling and administrative expense -
Capital expenditures of
$30 –$40 million -
Commodity inflation of approximately
4% -
Productivity of approximately
2% of cost of goods sold -
Cash interest expense of approximately
$30 million (4) -
Effective cash tax rate of 23.0 -
25.0% (% of pre-tax book income) - Net leverage ratio of approximately 3.5x by end of 2021(5)
Note: Pro Forma Net Sales, Adjusted EBITDA, Further Adjusted EBITDA, and Adjusted EPS are non-GAAP financial measures. See appendix for reconciliation of non-GAAP financial measures to most directly comparable GAAP measures. |
(1) 2020 Pro Forma Net Sales includes |
(2) Assumes |
(3) 2020 Further Adjusted EBITDA includes |
(4) Excludes amortization of deferred financing fees, interest expense related to loans to independent operators that we guarantee, and interest income. Includes |
(5) Includes unrealized cost synergies of approximately |
For the purpose of the Company’s fiscal 2021 outlook, the Company has assumed (i) the macroeconomic environment continues as it has for the last several months and (ii) there is no significant change on the Company from the impact of COVID-19.
With respect to projected fiscal year 2021 Adjusted EBITDA and Adjusted Earnings Per Share, 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 which are excluded from Adjusted Earnings per Share. We expect the variability of these items to have a potentially unpredictable, and potentially significant, impact on our future financial results.
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. Investors can also dial in over the phone by calling (833) 670-0764 from the North America and (343) 761-2595 internationally. 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 25, 2021, by dialing (800) 585-8367 from North America, or (416) 621-4642 from international locations, and entering confirmation code 7688957.
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 nearly 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 and internationally through grocery, mass merchant, club, convenience, drug and other channels. Based in Hanover, Pennsylvania, Utz operates fourteen facilities located in Pennsylvania, Alabama, Arizona, Illinois, Indiana, Louisiana, Washington, and Massachusetts. 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.
Forward-Looking Statements
This press release includes “forward-looking statements” within the meaning of the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995. Utz’s actual results may differ from its expectations, estimates and projections and consequently, you should not rely on these forward-looking statements as predictions of future events. Words such as “expect,” “estimate,” “project,” “budget,” “forecast,” “anticipate,” “intend,” “plan,” “may,” “will,” “could,” “should,” “believes,” “predicts,” “potential,” “continue,” and similar expressions are intended to identify such forward-looking statements. These forward-looking statements include, without limitation, Utz’s expectations with respect to future performance. These forward-looking statements involve significant risks and uncertainties that could cause the actual results to differ materially from the expected results. Most of these factors are outside Utz’s control and are difficult to predict. Factors that may cause such differences include, but are not limited to: the risk that the recently completed business combination with Collier Creek Holdings and other acquisitions recently completed by Utz (collectively, the “Business Combinations”) disrupt plans and operations; the ability to recognize the anticipated benefits of such Business Combination, 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 outcome of any legal proceedings that may be instituted against the Company following the consummation of such Business Combinations; changes in applicable law or regulations; costs related to the Business Combinations; 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 3, 2021 and other reports filed by the Company with the Commission. Some of these risks and uncertainties may in the future be amplified by the COVID-19 outbreak and there may be additional risks that Utz considers immaterial or which are unknown. It is not possible to predict or identify all such risks. Utz cautions that the foregoing list of factors is not exclusive. Utz cautions readers not to place undue reliance upon any forward-looking statements, which speak only as of the date made. Utz 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:
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.
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 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.
Utz uses the following non-GAAP financial measures in its financial communications, and in the future could use others:
- Pro Forma 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 and Administrative Expense
- Adjusted Selling and Administrative Expense as % of Net Sales
- Adjusted Net Income
- 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 Kennedy, Kitchen Cooked, H.K. Anderson and Truco Enterprises 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 Kennedy, Kitchen Cooked, H.K. Anderson and Truco Enterprises acquisitions.
Pro Forma Adjusted Gross Profit is defined as Adjusted Gross Profit including the historical Adjusted Gross Profit relating to the pre-acquisition periods of Kennedy, Kitchen Cooked, H.K. Anderson and Truco Enterprises acquisitions.
Adjusted Selling and Administrative Expense is defined as all Selling and Administrative expense excluding Depreciation and Amortization expense, a non cash item. In addition, Adjusted Selling 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 and Administrative Expense as a percentage of Net Sales as an additional measure for investors to evaluate our Adjusted Selling 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 acquisition of Kennedy Endeavors’, Kitchen Cooked, Inventure, Golden Flake and Truco Enterprises. In addition, Adjusted Net Income is also adjusted to exclude 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, and financing-related costs. Lastly, Adjusted Net Income normalizes the income tax provision to account for the above-mentioned adjustments.
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 Kennedy Endeavors, Kitchen Cooked, Collier Creek Holdings, H.K. Anderson and Truco Enterprises 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 Kennedy Endeavors, Kitchen Cooked, H.K. Anderson and Truco Enterprises 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.
Utz Brands, Inc. |
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CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS) |
||||||||
For the 14 weeks ended January 3, 2021 and 13 weeks ended December 29, 2019 |
||||||||
(In thousands, except share information) |
||||||||
|
Successor |
|
|
Predecessor |
||||
|
For the 14 weeks
|
|
|
For the 13 weeks
|
||||
Net sales |
$ |
246,276 |
|
|
|
$ |
201,756 |
|
Cost of goods sold |
164,672 |
|
|
|
136,140 |
|
||
Gross profit |
81,604 |
|
|
|
65,616 |
|
||
Selling and administrative expenses |
|
|
|
|
||||
Selling |
46,757 |
|
|
|
49,639 |
|
||
Administrative |
35,420 |
|
|
|
30,816 |
|
||
Total selling and administrative expenses |
82,177 |
|
|
|
80,455 |
|
||
Gain on sale of assets |
|
|
|
|
||||
Gain on disposal of property, plant and equipment |
104 |
|
|
|
223 |
|
||
Gain on sale of routes, net |
690 |
|
|
|
814 |
|
||
Total gain on sale of assets |
794 |
|
|
|
1,037 |
|
||
Income (loss) from operations |
221 |
|
|
|
(13,802) |
|
||
Other (expense) income |
|
|
|
|
||||
Interest expense |
(11,483) |
|
|
|
(10,374) |
|
||
Other income |
265 |
|
|
|
546 |
|
||
Other (expense) income, net |
(11,218) |
|
|
|
(9,828) |
|
||
Loss before taxes |
(10,997) |
|
|
|
(23,630) |
|
||
Income tax expense |
2,622 |
|
|
|
359 |
|
||
Net loss |
(13,619) |
|
|
|
(23,989) |
|
||
Net loss (income) attributable to noncontrolling interest |
5,651 |
|
|
|
(665) |
|
||
Net loss attributable to controlling interest |
(7,968) |
|
|
|
(24,654) |
|
||
Earnings per share of Class A Common Stock:
|
|
|
|
|
||||
Basic and Diluted |
$ |
(0.13) |
|
|
|
|
||
Weighted-average shares of Class A Common Stock outstanding |
|
|
|
|
||||
Basic and Diluted |
61,897,828 |
|
|
|
|
|||
Other comprehensive gain: |
|
|
|
|
||||
Change in fair value of interest rate swap |
$ |
672 |
|
|
|
$ |
1,408 |
|
Comprehensive loss |
$ |
(7,296) |
|
|
|
$ |
(23,246) |
|
Utz Brands, Inc. |
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CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS) |
|||||||||||||||||
For the fiscal periods ended January 3, 2021 and August 28, 2020, and years ended December 29, 2019 and December 30, 2018 |
|||||||||||||||||
(In thousands, except share information) |
|||||||||||||||||
|
Successor |
|
|
Predecessor |
|||||||||||||
|
From
|
|
|
From
|
|
|
Year Ended
|
|
Year Ended
|
||||||||
Net sales |
$ |
325,648 |
|
|
|
$ |
638,662 |
|
|
|
$ |
768,228 |
|
|
$ |
772,035 |
|
Cost of goods sold |
219,977 |
|
|
|
411,595 |
|
|
|
514,430 |
|
|
505,330 |
|
||||
Gross profit |
105,671 |
|
|
|
227,067 |
|
|
|
253,798 |
|
|
266,705 |
|
||||
Selling and administrative expenses |
|
|
|
|
|
|
|
|
|
||||||||
Selling |
63,616 |
|
|
|
131,579 |
|
|
|
163,589 |
|
|
183,374 |
|
||||
Administrative |
43,871 |
|
|
|
64,050 |
|
|
|
64,723 |
|
|
68,018 |
|
||||
Total selling and administrative expenses |
107,487 |
|
|
|
195,629 |
|
|
|
228,312 |
|
|
251,392 |
|
||||
Gain on sale of assets |
|
|
|
|
|
|
|
|
|
||||||||
Gain (loss) on disposal of property, plant and equipment |
109 |
|
|
|
79 |
|
|
|
6,028 |
|
|
(2,312) |
|
||||
Gain on sale of routes, net |
749 |
|
|
|
1,264 |
|
|
|
7,232 |
|
|
6,382 |
|
||||
Total gain on sale of assets |
858 |
|
|
|
1,343 |
|
|
|
13,260 |
|
|
4,070 |
|
||||
(Loss) income from operations |
(958) |
|
|
|
32,781 |
|
|
|
38,746 |
|
|
19,383 |
|
||||
Other (expense) income |
|
|
|
|
|
|
|
|
|
||||||||
Interest expense |
(13,301) |
|
|
|
(26,659) |
|
|
|
(48,388) |
|
|
(45,715) |
|
||||
Other (expense) income |
(2,058) |
|
|
|
1,271 |
|
|
|
(576) |
|
|
607 |
|
||||
Other (expense) income, net |
(15,359) |
|
|
|
(25,388) |
|
|
|
(48,964) |
|
|
(45,108) |
|
||||
(Loss) income before taxes |
(16,317) |
|
|
|
7,393 |
|
|
|
(10,218) |
|
|
(25,725) |
|
||||
Income tax (benefit) expense |
(267) |
|
|
|
3,973 |
|
|
|
3,146 |
|
|
1,919 |
|
||||
Net (loss) income |
(16,050) |
|
|
|
3,420 |
|
|
|
(13,364) |
|
|
(27,644) |
|
||||
Net loss (income) attributable to noncontrolling interest |
7,971 |
|
|
|
— |
|
|
|
(2,808) |
|
|
(2,856) |
|
||||
Net (loss) income attributable to controlling interest |
(8,079) |
|
|
|
3,420 |
|
|
|
(16,172) |
|
|
(30,500) |
|
||||
Earnings per share of Class A Common Stock: (in dollars) |
|
|
|
|
|
|
|
|
|
||||||||
Basic and Diluted |
$ |
(0.13) |
|
|
|
|
|
|
|
|
|
||||||
Weighted-average shares of Class A Common Stock outstanding |
|
|
|
|
|
|
|
|
|
||||||||
Basic and Diluted |
61,085,943 |
|
|
|
|
|
|
|
|
|
|||||||
Other comprehensive gain (loss): |
|
|
|
|
|
|
|
|
|
||||||||
Change in fair value of interest rate swap |
$ |
924 |
|
|
|
$ |
(7,463) |
|
|
|
$ |
1,408 |
|
|
$ |
— |
|
Comprehensive (loss) income |
$ |
(7,155) |
|
|
|
$ |
(4,043) |
|
|
|
$ |
(14,764) |
|
|
$ |
(30,500) |
|
Utz Brands, Inc. |
||||||||
CONSOLIDATED BALANCE SHEETS |
||||||||
January 3, 2021 and December 29, 2019 |
||||||||
(In thousands) |
||||||||
|
Successor |
|
|
Predecessor |
||||
|
As of
|
|
|
As of
|
||||
ASSETS |
|
|
|
|
||||
Current Assets |
|
|
|
|
||||
Cash and cash equivalents |
$ |
46,831 |
|
|
|
$ |
15,053 |
|
Accounts receivable, less allowance of |
118,305 |
|
|
|
106,816 |
|
||
Inventories, net |
59,810 |
|
|
|
50,894 |
|
||
Prepaid expenses and other assets |
11,573 |
|
|
|
4,563 |
|
||
Current portion of notes receivable |
7,666 |
|
|
|
6,754 |
|
||
Total current assets |
244,185 |
|
|
|
184,080 |
|
||
Non-current Assets |
|
|
|
|
||||
Property, plant and equipment, net |
270,416 |
|
|
|
171,717 |
|
||
Goodwill |
862,183 |
|
|
|
202,407 |
|
||
Intangible assets, net |
1,171,709 |
|
|
|
184,014 |
|
||
Non-current portion of notes receivable |
20,000 |
|
|
|
28,636 |
|
||
Other assets |
15,671 |
|
|
|
7,693 |
|
||
Total non-current assets |
2,339,979 |
|
|
|
594,467 |
|
||
Total assets |
$ |
2,584,164 |
|
|
|
$ |
778,547 |
|
LIABILITIES AND EQUITY (DEFICIT) |
|
|
|
|
||||
Current Liabilities |
|
|
|
|
||||
Current portion of term debt |
$ |
469 |
|
|
|
$ |
6,299 |
|
Current portion of other notes payable |
9,018 |
|
|
|
7,984 |
|
||
Accounts payable |
57,254 |
|
|
|
49,028 |
|
||
Accrued expenses and other |
80,788 |
|
|
|
44,206 |
|
||
Total current liabilities |
147,529 |
|
|
|
107,517 |
|
||
Non-current portion of term debt |
778,000 |
|
|
|
633,826 |
|
||
Non-current portion of other notes payable |
24,564 |
|
|
|
31,800 |
|
||
Non-current accrued expenses and other |
37,771 |
|
|
|
19,633 |
|
||
Deferred tax liability |
73,786 |
|
|
|
19,123 |
|
||
Total non-current liabilities |
914,121 |
|
|
|
704,382 |
|
||
Total liabilities |
1,061,650 |
|
|
|
811,899 |
|
||
Commitments and contingencies |
|
|
|
|
||||
Equity (Deficit) |
|
|
|
|
||||
Members' equity (deficit) |
|
|
|
(27,446) |
|
|||
Shares of Class A Common Stock (Successor), |
7 |
|
|
|
|
|||
Shares of Class V Common Stock (Successor), |
6 |
|
|
|
|
|||
Additional paid-in capital (Successor) |
623,729 |
|
|
|
|
|||
Accumulated deficit (Successor) |
(22,401) |
|
|
|
|
|||
Accumulated other comprehensive income |
924 |
|
|
|
1,408 |
|
||
Total stockholders' equity and members' equity (deficit) |
602,265 |
|
|
|
(26,038) |
|
||
Noncontrolling interest |
920,249 |
|
|
|
(7,314) |
|
||
Total equity (deficit) |
1,522,514 |
|
|
|
(33,352) |
|
||
Total liabilities and equity (deficit) |
$ |
2,584,164 |
|
|
|
$ |
778,547 |
|
Utz Brands, Inc. |
||||||||||||||||
CONSOLIDATED STATEMENTS OF CASH FLOWS |
||||||||||||||||
For the fiscal periods ended January 3, 2021 and August 28, 2020, and years ended December 29, 2019 and December 30, 2018 |
||||||||||||||||
(In thousands) |
||||||||||||||||
|
Successor |
|
|
Predecessor |
|
Predecessor |
||||||||||
|
From
|
|
|
From
|
|
For the year
|
|
For the year
|
||||||||
Cash flows from operating activities |
|
|
|
|
|
|
|
|
||||||||
Net (loss) income |
$ |
(16,050) |
|
|
|
$ |
3,420 |
|
|
$ |
(13,364) |
|
|
$ |
(27,644) |
|
Adjustments to reconcile net (loss) income to net cash (used in) provided by operating activities: |
|
|
|
|
|
|
|
|
||||||||
Impairment and other charges |
— |
|
|
|
— |
|
|
3,880 |
|
|
2,900 |
|
||||
Depreciation and amortization |
20,688 |
|
|
|
24,055 |
|
|
29,290 |
|
|
30,358 |
|
||||
Amortization of step-up of inventory |
5,795 |
|
|
|
— |
|
|
— |
|
|
— |
|
||||
(Gain) loss on disposal of property and equipment |
(109) |
|
|
|
(79) |
|
|
(6,028) |
|
|
2,312 |
|
||||
Gain on sale of routes |
(749) |
|
|
|
(1,264) |
|
|
(7,232) |
|
|
(6,382) |
|
||||
Stock based compensation |
6,790 |
|
|
|
— |
|
|
— |
|
|
— |
|
||||
Loss on debt extinguishment |
2,500 |
|
|
|
— |
|
|
4,336 |
|
|
— |
|
||||
Deferred income taxes |
(958) |
|
|
|
3,583 |
|
|
1,949 |
|
|
900 |
|
||||
Deferred financing costs |
(2,639) |
|
|
|
1,742 |
|
|
955 |
|
|
2,355 |
|
||||
Changes in assets and liabilities: |
|
|
|
|
|
|
|
|
||||||||
Accounts receivable, net |
16,611 |
|
|
|
(11,786) |
|
|
11,542 |
|
|
(76) |
|
||||
Inventories, net |
887 |
|
|
|
(6,883) |
|
|
3,476 |
|
|
2,926 |
|
||||
Prepaid expenses and other assets |
(7,064) |
|
|
|
(3,456) |
|
|
(1,993) |
|
|
583 |
|
||||
Accounts payable and accrued expenses and other |
(26,634) |
|
|
|
21,295 |
|
|
1,181 |
|
|
7,515 |
|
||||
Net cash (used in) provided by operating activities |
(932) |
|
|
|
30,627 |
|
|
27,992 |
|
|
15,747 |
|
||||
Cash flows from investing activities |
|
|
|
|
|
|
|
|
||||||||
Acquisition of Utz Brands Holdings, LLC, net of cash acquired |
(185,448) |
|
|
|
— |
|
|
— |
|
|
— |
|
||||
Acquisitions, net of cash acquired |
(406,485) |
|
|
|
(8,816) |
|
|
(137,845) |
|
|
— |
|
||||
Purchases of property and equipment |
(9,892) |
|
|
|
(11,828) |
|
|
(19,996) |
|
|
(13,038) |
|
||||
Purchases of intangibles |
(79,013) |
|
|
|
(650) |
|
|
— |
|
|
— |
|
||||
Proceeds on sale of property and equipment |
1,344 |
|
|
|
615 |
|
|
12,059 |
|
|
4,740 |
|
||||
Proceeds from sale of routes |
2,082 |
|
|
|
2,774 |
|
|
3,008 |
|
|
4,326 |
|
||||
Proceeds on the sale of IO notes |
— |
|
|
|
— |
|
|
33,204 |
|
|
— |
|
||||
Notes receivable, net |
(4,470) |
|
|
|
(3,611) |
|
|
(6,312) |
|
|
1,803 |
|
||||
Net cash used in investing activities |
(681,882) |
|
|
|
(21,516) |
|
|
(115,882) |
|
|
(2,169) |
|
||||
Cash flows from financing activities |
|
|
|
|
|
|
|
|
||||||||
Borrowings on term debt and notes payable |
370,000 |
|
|
|
2,650 |
|
|
121,250 |
|
|
1,356 |
|
||||
Repayments on term debt and notes payable |
(239,989) |
|
|
|
(6,686) |
|
|
(135,141) |
|
|
(5,611) |
|
||||
Contribution from member and noncontrolling interest |
— |
|
|
|
— |
|
|
123,908 |
|
|
— |
|
||||
Exercised warrants |
124,495 |
|
|
|
— |
|
|
— |
|
|
— |
|
||||
Dividends paid |
(2,968) |
|
|
|
— |
|
|
— |
|
|
— |
|
||||
Distributions to members |
— |
|
|
|
(6,415) |
|
|
(11,461) |
|
|
(10,161) |
|
||||
Distribution to noncontrolling interest |
(9,565) |
|
|
|
— |
|
|
(2,527) |
|
|
(1,950) |
|
||||
Net cash provided by (used in) financing activities |
241,973 |
|
|
|
(10,451) |
|
|
96,029 |
|
|
(16,366) |
|
||||
Net (decrease) increase in cash and cash equivalents |
(440,841) |
|
|
|
(1,340) |
|
|
8,139 |
|
|
(2,788) |
|
||||
Cash and cash equivalents at beginning of period |
487,672 |
|
|
|
15,053 |
|
|
6,914 |
|
|
9,702 |
|
||||
Cash and cash equivalents at end of period |
46,831 |
|
|
|
13,713 |
|
|
15,053 |
|
|
6,914 |
|
Reconciliation of Non-GAAP Financial Measures to Reported Financial Measures
Net Sales and Pro Forma Net Sales
|
|
14-Wks
|
|
1-Wk
|
|
13-Wks
|
|
13-Wks
|
|
|
53-Wks
|
|
1-Wk
|
|
52-Wks
|
|
52-Wks
|
||||||||||||||||
(dollars in millions) |
|
1/3/21 |
|
1/3/21 |
|
12/27/20 |
|
12/29/19 |
|
|
1/3/21 |
|
1/3/21 |
|
12/27/20 |
|
12/29/19 |
||||||||||||||||
Net Sales |
|
$ |
246.3 |
|
|
$ |
15.9 |
|
|
$ |
230.4 |
|
|
$ |
201.8 |
|
|
|
$ |
964.3 |
|
|
$ |
15.9 |
|
|
$ |
948.4 |
|
|
$ |
768.2 |
|
Conagra DSD Snacks (Kennedy) Pre-Acquisition Net Sales |
|
|
|
|
|
— |
|
|
8.2 |
|
|
|
|
|
|
|
— |
|
|
88.8 |
|
||||||||||||
Kitchen Cooked Pre-Acquisition Net Sales |
|
|
|
|
|
— |
|
|
2.2 |
|
|
|
|
|
|
|
— |
|
|
8.5 |
|
||||||||||||
HKA Pre-Acquisition Net Sales |
|
|
|
|
|
1.1 |
|
|
3.1 |
|
|
|
|
|
|
|
8.0 |
|
|
10.9 |
|
||||||||||||
Truco Pre-Acquisition Net Sales |
|
|
|
|
|
37.1 |
|
|
36.2 |
|
|
|
|
|
|
|
187.8 |
|
|
146.2 |
|
||||||||||||
Pro Forma Net Sales |
|
|
|
|
|
$ |
268.6 |
|
|
$ |
251.5 |
|
|
|
|
|
|
|
$ |
1,144.2 |
|
|
$ |
1,022.6 |
|
||||||||
Gross Profit, Adjusted Gross Profit and PF Adj Gross Profit
|
|
14-Wks
|
|
1-Wk
|
|
13-Wks
|
|
13-Wks
|
|
|
53-Wks
|
|
1-Wk
|
|
52-Wks
|
|
52-Wks
|
||||||||||||||||
(dollars in millions) |
|
1/3/21 |
|
1/3/21 |
|
12/27/20 |
|
12/29/19 |
|
|
1/3/21 |
|
1/3/21 |
|
12/27/20 |
|
12/29/19 |
||||||||||||||||
Gross Profit |
|
$ |
81.6 |
|
|
$ |
4.9 |
|
|
$ |
76.7 |
|
|
$ |
65.7 |
|
|
|
$ |
332.7 |
|
|
$ |
4.9 |
|
|
$ |
327.8 |
|
|
$ |
253.8 |
|
Depreciation and Amortization |
|
7.5 |
|
|
— |
|
|
7.5 |
|
|
5.3 |
|
|
|
31.3 |
|
|
— |
|
|
31.3 |
|
|
16.8 |
|
||||||||
Non-Cash, non-recurring adjustments |
|
1.4 |
|
|
— |
|
|
1.4 |
|
|
— |
|
|
|
1.4 |
|
|
— |
|
|
1.4 |
|
|
— |
|
||||||||
Adjusted Gross Profit |
|
$ |
90.5 |
|
|
$ |
4.9 |
|
|
85.6 |
|
|
71.0 |
|
|
|
$ |
365.4 |
|
|
$ |
4.9 |
|
|
360.5 |
|
|
270.6 |
|
||||
Adjusted Gross Profit as a % of Net Sales |
|
36.7 |
% |
|
30.8 |
% |
|
37.2 |
% |
|
35.2 |
% |
|
|
37.9 |
% |
|
30.8 |
% |
|
38.0 |
% |
|
35.2 |
% |
||||||||
Depreciation and Amortization - COGS |
|
|
|
|
|
(7.5) |
|
|
(5.3) |
|
|
|
|
|
|
|
(31.3) |
|
|
(16.8) |
|
||||||||||||
Conagra DSD Snacks (Kennedy) Pre-Acquisition Gross Profit |
|
|
|
|
|
— |
|
|
2.3 |
|
|
|
|
|
|
|
— |
|
|
28.0 |
|
||||||||||||
Kitchen Cooked Pre-Acquisition Gross Profit |
|
|
|
|
|
— |
|
|
1.3 |
|
|
|
|
|
|
|
— |
|
|
5.2 |
|
||||||||||||
HKA Pre-Acquisition Gross Profit |
|
|
|
|
|
0.1 |
|
|
0.5 |
|
|
|
|
|
|
|
1.1 |
|
|
1.6 |
|
||||||||||||
Truco Pre-Acquisition Gross Profit |
|
|
|
|
|
14.5 |
|
|
15.0 |
|
|
|
|
|
|
|
76.9 |
|
|
58.8 |
|
||||||||||||
Pro Forma Gross Profit |
|
|
|
|
|
92.7 |
|
|
84.8 |
|
|
|
|
|
|
|
407.2 |
|
|
347.4 |
|
||||||||||||
Depreciation and Amortization |
|
|
|
|
|
7.5 |
|
|
5.3 |
|
|
|
|
|
|
|
31.3 |
|
|
16.8 |
|
||||||||||||
Conagra DSD Snacks (Kennedy) Pre-Acquisition D&A |
|
|
|
|
|
— |
|
|
0.5 |
|
|
|
|
|
|
|
— |
|
|
2.0 |
|
||||||||||||
HKA Pre-Acquisition D&A |
|
|
|
|
|
— |
|
|
— |
|
|
|
|
|
|
|
— |
|
|
— |
|
||||||||||||
Truco Pre-Acquisition D&A |
|
|
|
|
|
— |
|
|
— |
|
|
|
|
|
|
|
— |
|
|
— |
|
||||||||||||
Depreciation and Amortization - Total |
|
|
|
|
|
7.5 |
|
|
5.8 |
|
|
|
|
|
|
|
31.3 |
|
|
18.8 |
|
||||||||||||
Pro Forma Adjusted Gross Profit |
|
|
|
|
|
$ |
100.2 |
|
|
$ |
90.6 |
|
|
|
|
|
|
|
$ |
438.5 |
|
|
$ |
366.2 |
|
||||||||
Pro Forma Adjusted Gross Profit as a % of Pro Forma Net Sales |
|
|
|
|
|
37.3 |
% |
|
36.0 |
% |
|
|
|
|
|
|
38.3 |
% |
|
35.8 |
% |
Adjusted Selling & Admin Expense
|
|
14-Wks
|
|
1-Wk
|
|
13-Wks
|
|
13-Wks
|
|
|
53-Wks
|
|
1-Wk
|
|
52-Wks
|
|
52-Wks
|
||||||||||||||
(dollars in millions) |
|
1/3/21 |
|
1/3/21 |
|
12/27/20 |
|
12/29/19 |
|
|
1/3/21 |
|
1/3/21 |
|
12/27/20 |
|
12/29/19 |
||||||||||||||
Selling and Administrative Expense -Selling and Admin Expense - Incl Depreciation and Amortization |
|
$ |
82.2 |
|
|
$ |
1.8 |
|
|
$ |
80.4 |
|
$ |
80.5 |
|
|
$ |
303.1 |
|
|
$ |
1.8 |
|
|
$ |
301.3 |
|
$ |
228.3 |
||
Depreciation and Amortization in Selling and Administrative Expense |
|
(7.7) |
|
|
— |
|
|
(7.7) |
|
(3.4) |
|
|
(19.2) |
|
|
— |
|
|
(19.2) |
|
(12.5) |
||||||||||
Non-Cash, and/or Non-recurring Adjustments |
|
(17.6) |
|
|
— |
|
|
(17.6) |
|
(20.1) |
|
|
(50.5) |
|
|
— |
|
|
(50.5) |
|
(34.2) |
||||||||||
Adjusted Selling and Administrative Expense |
|
$ |
56.9 |
|
|
$ |
1.8 |
|
|
55.1 |
|
57.0 |
|
|
$ |
233.4 |
|
|
$ |
1.8 |
|
|
231.6 |
|
181.6 |
||||||
Conagra DSD Snacks (Kennedy) Pre-Acquistion D&A |
|
|
|
|
|
— |
|
2.3 |
|
|
|
|
|
|
— |
|
21.2 |
||||||||||||||
Kitchen Cooked Pre-Acquisition D&A |
|
|
|
|
|
— |
|
1.6 |
|
|
|
|
|
|
— |
|
5.5 |
||||||||||||||
HKA Pre-Acquisition Selling & Admin Expense |
|
|
|
|
|
— |
|
— |
|
|
|
|
|
|
— |
|
— |
||||||||||||||
Truco Pre-Acquisition Selling & Admin Expense |
|
|
|
|
|
5.3 |
|
7.6 |
|
|
|
|
|
|
30.2 |
|
30.5 |
||||||||||||||
Pro Forma Adjusted Selling and Administrative Expense |
|
|
|
|
|
$ |
60.4 |
|
$ |
68.5 |
|
|
|
|
|
|
$ |
261.8 |
|
$ |
238.8 |
||||||||||
Pro Forma Adjusted Selling and Administrative Expense as % of Pro Forma Net Sales |
|
|
|
|
|
22.5 |
% |
|
27.2 |
% |
|
|
|
|
|
|
|
|
|
||||||||||||
Adjusted Net Income
|
|
14-Wks
|
|
13-Wks
|
|
|
53-Wks
|
|
52-Wks
|
||||||||
(dollars in millions) |
|
1/3/21 |
|
12/29/19 |
|
|
1/3/21 |
|
12/29/19 |
||||||||
Net (Loss) Income |
|
$ |
(13.6) |
|
|
$ |
(24.0) |
|
|
|
$ |
(12.6) |
|
|
$ |
(13.4) |
|
|
|
|
|
|
|
|
|
|
|
||||||||
Depreciation and Amortization |
|
15.2 |
|
|
8.7 |
|
|
|
50.5 |
|
|
29.3 |
|
||||
Non-Acquisition Related Depreciation and Amortization |
|
(8.2) |
|
|
(6.3) |
|
|
|
(27.5) |
|
|
(20.7) |
|
||||
Acquisition Step-Up Depreciation and Amortization: |
|
7.0 |
|
|
2.4 |
|
|
|
23.0 |
|
|
8.6 |
|
||||
|
|
|
|
|
|
|
|
|
|
||||||||
Certain Non-Cash Adjustments |
|
4.9 |
|
|
7.5 |
|
|
|
3.2 |
|
|
9.4 |
|
||||
Acquisition and Integration |
|
8.6 |
|
|
5.5 |
|
|
|
40.0 |
|
|
3.3 |
|
||||
Business and Transformation Initiatives |
|
5.3 |
|
|
4.3 |
|
|
|
8.8 |
|
|
5.1 |
|
||||
Financing-Related Costs |
|
0.1 |
|
|
4.5 |
|
|
|
2.7 |
|
|
4.7 |
|
||||
Other Non-Cash and/or Non-Recurring Adjustments |
|
18.9 |
|
|
21.8 |
|
|
|
54.7 |
|
|
22.5 |
|
||||
|
|
|
|
|
|
|
|
|
|
||||||||
Income Tax-Rate Adjustment |
|
8.1 |
|
|
0.3 |
|
|
|
(2.9) |
|
|
(0.9) |
|
||||
|
|
|
|
|
|
|
|
|
|
||||||||
Adjusted Net Income |
|
$ |
20.4 |
|
|
$ |
0.5 |
|
|
|
$ |
62.2 |
|
|
$ |
16.8 |
|
(1) |
Income Tax Rate Adjustment calculated as (Loss) Income 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 of approximately |
Depreciation & Amortization
|
|
14-Wks
|
|
13-Wks
|
|
|
53-Wks
|
|
52-Wks
|
||||||||
(dollars in millions) |
|
1/3/21 |
|
12/29/19 |
|
|
1/3/21 |
|
12/29/19 |
||||||||
Core D&A - Non-Acquisition-related included in Gross Profit |
|
$ |
2.8 |
|
|
$ |
4.5 |
|
|
|
$ |
16.9 |
|
|
$ |
13.5 |
|
Step-Up D&A - Transaction-related included in Gross Profit |
|
4.7 |
|
|
0.8 |
|
|
|
14.4 |
|
|
3.3 |
|
||||
Depreciation & Amortization - included in Gross Profit |
|
7.5 |
|
|
5.3 |
|
|
|
31.3 |
|
|
16.8 |
|
||||
|
|
|
|
|
|
|
|
|
|
||||||||
Core D&A - Non-Acquisition-related included in Selling and Admin Expense |
|
5.4 |
|
1.8 |
|
|
10.6 |
|
7.3 |
||||||||
Step-Up D&A - Transaction-related included in Selling and Admin Expense |
|
2.3 |
|
|
1.6 |
|
|
|
8.6 |
|
|
5.2 |
|
||||
Depreciation & Amortization - included in Selling and Admin Expense |
|
7.7 |
|
|
3.4 |
|
|
|
19.2 |
|
|
12.5 |
|
||||
|
|
|
|
|
|
|
|
|
|
||||||||
Depreciation & Amortization - Total |
|
$ |
15.2 |
|
|
$ |
8.7 |
|
|
|
$ |
50.5 |
|
|
$ |
29.3 |
|
|
|
|
|
|
|
|
|
|
|
||||||||
Core D&A |
|
$ |
8.2 |
|
|
$ |
6.3 |
|
|
|
$ |
27.5 |
|
|
$ |
20.8 |
|
Step-Up D&A |
|
7.0 |
|
2.4 |
|
|
23.0 |
|
8.5 |
||||||||
Total D&A |
|
$ |
15.2 |
|
|
$ |
8.7 |
|
|
|
$ |
50.5 |
|
|
$ |
29.3 |
|
EBITDA, Adjusted EBITDA and Further Adjusted EBITDA
|
|
14-Wks
|
|
1-Wk
|
|
13-Wks
|
|
13-Wks
|
|
|
53-Wks
|
|
1-Wk
|
|
52-Wks
|
|
52-Wks
|
||||||||
(dollars in millions) |
|
1/3/21 |
|
1/3/21 |
|
12/27/20 |
|
12/29/19 |
|
|
1/3/21 |
|
1/3/21 |
|
12/27/20 |
|
12/29/19 |
||||||||
Net (Loss) Income |
|
$ |
(13.6) |
|
$ |
3.1 |
|
$ |
(16.8) |
|
$ |
(24.0) |
|
|
$ |
(12.6) |
|
$ |
3.1 |
|
$ |
(15.7) |
|
$ |
(13.4) |
Plus non-GAAP adjustments: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Income Tax Expense |
|
2.7 |
|
— |
|
2.7 |
|
0.4 |
|
|
3.7 |
|
— |
|
3.7 |
|
3.2 |
||||||||
Depreciation and Amortization |
|
15.2 |
|
— |
|
15.2 |
|
8.7 |
|
|
50.5 |
|
— |
|
50.5 |
|
29.3 |
||||||||
Interest Expense, Net |
|
11.5 |
|
— |
|
11.5 |
|
10.4 |
|
|
39.9 |
|
— |
|
39.9 |
|
48.3 |
||||||||
Interest Income (IO loans)(1) |
|
(0.7) |
|
— |
|
(0.7) |
|
(0.7) |
|
|
(2.3) |
|
— |
|
(2.3) |
|
(3.4) |
||||||||
EBITDA |
|
15.1 |
|
3.1 |
|
11.9 |
|
(5.2) |
|
|
79.2 |
|
3.1 |
|
76.1 |
|
64.0 |
||||||||
Certain Non-Cash Adjustments(2) |
|
4.9 |
|
— |
|
4.9 |
|
7.5 |
|
|
3.2 |
|
— |
|
3.2 |
|
9.4 |
||||||||
Acquisition and Integration(3) |
|
8.6 |
|
— |
|
8.6 |
|
5.5 |
|
|
40.0 |
|
— |
|
40.0 |
|
3.3 |
||||||||
Business Transformation Initiatives(4) |
|
5.3 |
|
— |
|
5.3 |
|
4.3 |
|
|
8.8 |
|
— |
|
8.8 |
|
5.1 |
||||||||
Financing-Related Costs(5) |
|
0.1 |
|
— |
|
0.1 |
|
4.5 |
|
|
2.7 |
|
— |
|
2.7 |
|
4.7 |
||||||||
Adjusted EBITDA |
|
$ |
34.0 |
|
$ |
3.1 |
|
30.8 |
|
16.6 |
|
|
$ |
133.9 |
|
$ |
3.1 |
|
130.8 |
|
86.5 |
||||
Adjusted EBITDA as a % of Net Sales |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Conagra DSD Snacks (Kennedy) Pre-Acquisition EBITDA(6) |
|
|
|
|
|
— |
|
0.7 |
|
|
|
|
|
|
— |
|
9.9 |
||||||||
Kitchen Cooked Pre-Acquisition Adjusted EBITDA(6) |
|
|
|
|
|
— |
|
0.2 |
|
|
|
|
|
|
— |
|
0.5 |
||||||||
HKA Pre-Acquisition Adjusted EBITDA(6) |
|
|
|
|
|
0.1 |
|
0.5 |
|
|
|
|
|
|
1.1 |
|
1.6 |
||||||||
Truco Pre-Acquisition Adjusted EBITDA(6) |
|
|
|
|
|
8.8 |
|
8.6 |
|
|
|
|
|
|
47.5 |
|
31.1 |
||||||||
Further Adjusted EBITDA |
|
|
|
|
|
$ |
39.7 |
|
$ |
26.6 |
|
|
|
|
|
|
$ |
179.4 |
|
$ |
129.6 |
||||
Further Adjusted EBITDA as % of Pro Forma Net Sales |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(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 |
|||
|
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 gains and losses. For the year ended January 3, 2021, we recorded a benefit of |
|||
|
Asset Impairments and Write-Offs — There were no adjustments for impairments recorded in 2020. However, we did record impairments on certain trade name intangible brand assets in fiscal year 2019 totaling |
|||
(3) |
Adjustment for Acquisition and Integration Costs – This is comprised of consulting, transaction services, and legal fees incurred for acquisitions and certain potential 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 |
|||
(4) |
Business Transformation Initiatives Adjustment – 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 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. In 2020, total net cost was |
|||
(5) |
Financing-Related Costs – These costs include adjustments for various items related to raising debt and preferred equity capital. In fiscal 2020, we incurred |
|||
(6) |
Pre-Acquisition Adjusted EBITDA- This adjustment represents the adjusted EBITDA of acquired companies prior to the acquisition date. |
Net Sales and Pro Forma Net Sales
|
|
FY 2019 |
|
|
FY 2020 |
|
|
||||||||||||||||||
(dollars in millions) |
|
Q4 |
|
|
Q1 |
|
Q2 |
|
Q3 |
|
Q4 |
|
FY 2020 |
||||||||||||
Net Sales - 53 Weeks |
|
$ |
201.8 |
|
|
|
$ |
228.0 |
|
|
$ |
242.0 |
|
|
$ |
248.0 |
|
|
$ |
246.3 |
|
|
$ |
964.3 |
|
53rd Week |
|
— |
|
|
|
— |
|
|
— |
|
|
— |
|
|
(15.9) |
|
|
(15.9) |
|
||||||
Net Sales - 52 Weeks |
|
$ |
201.8 |
|
|
|
$ |
228.0 |
|
|
$ |
242.0 |
|
|
$ |
248.0 |
|
|
$ |
230.4 |
|
|
$ |
948.4 |
|
Conagra DSD Snacks (Kennedy) Pre-Acquisition Net Sales |
|
8.2 |
|
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
||||||
Kitchen Cooked Pre-Acquisition Net Sales |
|
2.2 |
|
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
||||||
HKA Pre-Acquisition Net Sales |
|
3.1 |
|
|
|
2.3 |
|
|
2.1 |
|
|
2.5 |
|
|
1.1 |
|
|
8.0 |
|
||||||
Truco Pre-Acquisition Net Sales |
|
36.2 |
|
|
|
42.4 |
|
|
59.1 |
|
|
49.2 |
|
|
37.1 |
|
|
187.8 |
|
||||||
Pro Forma Net Sales |
|
$ |
251.5 |
|
|
|
$ |
272.7 |
|
|
$ |
303.2 |
|
|
$ |
299.7 |
|
|
$ |
268.6 |
|
|
$ |
1,144.2 |
|
Normalized / Further Adjusted EBITDA
|
|
FY 2019 |
|
|
FY 2020 |
|
|
||||||||||||||||||
(dollars in millions) |
|
Q4 |
|
|
Q1 |
|
Q2 |
|
Q3 |
|
Q4 |
|
FY 2020 |
||||||||||||
Further Adjusted EBITDA |
|
$ |
26.6 |
|
|
|
$ |
39.8 |
|
|
$ |
48.9 |
|
|
$ |
51.0 |
|
|
$ |
39.7 |
|
|
$ |
179.4 |
|
Trade Spend Normalization(1) |
|
6.3 |
|
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
||||||
Acquisition Synergies(2) |
|
3.0 |
|
|
|
2.9 |
|
|
2.6 |
|
|
2.0 |
|
|
1.5 |
|
|
9.0 |
|
||||||
Public Company Costs(3) |
|
(0.8) |
|
|
|
(0.8) |
|
|
(0.7) |
|
|
(0.6) |
|
|
— |
|
|
(2.0) |
|
||||||
Normalized Further Adjusted EBITDA |
|
$ |
35.1 |
|
|
|
$ |
41.9 |
|
|
$ |
50.8 |
|
|
$ |
52.4 |
|
|
$ |
41.2 |
|
|
$ |
186.4 |
|
Normalized / Further Adjusted EBITDA as % of Pro Forma Net Sales |
|
14.0 |
% |
|
|
15.4 |
% |
|
16.8 |
% |
|
17.5 |
% |
|
15.3 |
% |
|
16.3 |
% |
(1) |
Reflects implementation in fiscal 2019 of a new system that enabled the Company to refine period-end estimates for trade spend reserves. This resulted in a one- time true-up charge of the trade spend reserve in fiscal 2019. The Company does not expect similar material true-ups to recur in future periods. |
|||
(2) |
Represents identified integration-related cost savings expected to be realized from the elimination of certain procurement, manufacturing, and logistics as well as selling and administrative expenses in connection with the acquisition of Conagra Snacks, Kitchen Cooked and Truco Enterprises. |
|||
(3) |
Represents estimated incremental costs of operating as a public company following 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) |
|
2020 Pro Forma(3) |
||
Term Loan |
|
$ |
720.0 |
|
Capital Leases(1) |
|
8.1 |
|
|
Deferred Purchase Price |
|
1.5 |
|
|
Gross Debt(2) |
|
729.6 |
||
Cash Excluding Warrant Cash |
|
(37.9) |
|
|
Total Net Debt |
|
$ |
691.7 |
|
|
|
|
||
52-Weeks Normalized Further Adjusted EBITDA |
|
$ |
186.4 |
|
|
|
|
||
Net Leverage Ratio |
|
3.7x |
(1) |
Capital Leases exclude 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. |
|||
(3) |
Represents Net Debt calculation pro forma for refinancing closed on January 20, 2021. 2020 pro forma leverage calculation based on normalized further adjusted EBITDA for 52-week period. |
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