Utz Brands, Inc. Third Quarter 2025 Earnings Presentation October 30, 2025 Disclaimer Forward-LookingStatements 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 "may," "can," "should," "will," "estimate," "plan," "project," "forecast," " ...

Group 1: Company Overview - UTZ Brands, Inc. (NYSE:UTZ) is a company that markets, manufactures, and distributes a variety of branded snacks, including pretzels, potato chips, veggie snacks, cheese snacks, and pork skins. Its brand portfolio includes Utz, Golden Flake, Zapp's, Good Health, Hawaiian, and Boulder Canyon [4]. Group 2: Analyst Ratings and Price Targets - RBC Capital analyst Nik Modi has reiterated a Buy rating on UTZ Brands, setting a price target of $20 as of October 28 [1]. - Conversely, UBS analyst Peter Grom assigned a Hold rating on October 20, with a price target of $13.50, citing the company's unchanged guidance for fiscal year 2025 and expectations for modest EBITDA margin expansion and organic sales growth [2]. Group 3: Market Performance and Sentiment - Despite exhibiting favorable performance trends that surpass the overall salty snacks domain, concerns about the sustainability of UTZ's top-line growth persist, particularly due to ongoing macroeconomic and category pressures [3]. - These concerns have contributed to a decline in the stock's performance, leading to underperformance compared to the broader market and its peers since early August [3].

Financial Data and Key Metrics Changes - The company reported a net sales growth of 3.4%, with branded salty snacks organic net sales growth of 5.8% [6][19] - Adjusted EBITDA increased by 11.7%, and adjusted earnings per share rose by 9.5% [20] - Adjusted gross profit margin expanded by 20 basis points, with adjusted EBITDA margin expanding by 120 basis points to 16% [20][21] Business Line Data and Key Metrics Changes - Branded salty snacks now represent 89% of total net sales, marking the seventh consecutive quarter of growth in this category [6][19] - The Power4 brands achieved a retail sales increase of 7.1%, driven by 4.4% volume gains [7] - Non-branded and non-salty snacks experienced a decline in organic net sales of 13.1% due to a strategic decision to right-size the partner brand portfolio [19] Market Data and Key Metrics Changes - California, the largest salty snack market in the U.S., has a retail sales figure of $4.1 billion, with the company currently holding a 1.9% market share [5] - Expansion markets saw a total company retail sales growth of 9.2%, significantly outpacing the salty snack category decline of 0.3% [9] - The average market share in expansion markets is 3%, compared to 6.6% in core markets, indicating substantial growth opportunities [10] Company Strategy and Development Direction - The acquisition of Insignia International's direct store delivery assets is a key part of the company's westward expansion strategy, particularly in California [4][5] - The company is focused on enhancing its branded salty snacks business and expanding its geographic footprint [34] - Continued investment in marketing and productivity initiatives is expected to drive long-term growth and margin expansion [20][34] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to outperform the category over the medium and long term, supported by strong brand performance and market share gains [17][34] - The company updated its 2025 outlook, now expecting organic net sales growth of approximately 3%, up from a previous expectation of 2.5% [27] - Management highlighted the importance of free cash flow generation and plans to optimize capital expenditures in 2026 [30][31] Other Important Information - The company plans to eliminate all artificial colors from its product portfolio by 2027, aligning with consumer preferences for cleaner ingredients [16] - Cash provided by operations for the year-to-date period was $47.3 million, with capital expenditures of $89.2 million [25][26] - The net leverage ratio at the end of the third quarter was 3.9 times trailing twelve months normalized adjusted EBITDA [26] Q&A Session Summary Question: What are the expectations for organic net sales growth in 2025? - The company now expects organic net sales growth of approximately 3%, reflecting year-to-date outperformance [27] Question: How is the company addressing supply chain challenges? - Management noted that supply chain inflation has largely normalized and that productivity initiatives are in place to offset costs [21][22] Question: What are the plans for capital expenditures in 2026? - Capital expenditures are expected to decrease significantly from $100 million in 2025 to a preliminary range of $60 to $70 million in 2026 [30][31]

Financial Performance - Net Sales increased by 3.4% to $377.8 million compared to $365.5 million in the prior year period[5] - Organic Net Sales growth was 3.4%, with Branded Salty Snacks Organic Net Sales growth at 5.8%[5] - Adjusted Net Income increased by 13.2% to $33.5 million, while Net Income decreased to $(20.2) million[8] - Adjusted EBITDA increased by 11.7% to $60.3 million, representing 16.0% of Net Sales[9] - Gross Profit Margin declined by 220bps to 33.6%, but Adjusted Gross Profit Margin expanded by 210bps to 41.1%[6] - Net sales for the thirteen weeks ended September 28, 2025, were $377.8 million, an increase from $365.5 million for the same period in 2024, representing a growth of approximately 6.3%[43] - Gross profit for the thirteen weeks ended September 28, 2025, was $126.9 million, down from $131.0 million in the prior year, indicating a decrease of about 3.1%[43] - The company reported a net loss of $20.2 million for the thirteen weeks ended September 28, 2025, compared to a net income of $0.8 million in the same period of 2024[43] - The company reported a net loss of $4.4 million for the thirty-nine weeks ended September 28, 2025, compared to a net income of $28.6 million for the same period in 2024[46] - The comprehensive loss for the thirteen weeks ended September 28, 2025, was $22.7 million, compared to a comprehensive loss of $14.7 million in the prior year[43] Expenses and Costs - Selling, Distribution, and Administrative Expenses increased to $123.1 million, or 32.6% of Net Sales[7] - Total selling, distribution, and administrative expenses increased to $123.1 million from $110.0 million, reflecting a rise of approximately 11.9%[43] - The company experienced a significant increase in depreciation and amortization expenses, rising to $60.4 million from $53.4 million year-over-year[49] - Adjusted Selling, Distribution, and Administrative Expense for the 13 weeks ended September 28, 2025, was $93.8 million, or 24.8% of Net Sales, compared to $88.7 million and 24.3% in 2024[54] - Business transformation initiatives resulted in costs of $20.1 million for the thirteen weeks ended September 28, 2025, compared to $8.1 million for the same period in 2024[61] - The company incurred $34.6 million in business transformation costs for the thirty-nine weeks ended September 28, 2025, compared to $18.4 million in the prior year[61] Liquidity and Debt - Total liquidity as of September 28, 2025, was $197.7 million, with net debt of $807.9 million and a Net Leverage Ratio of 3.9x[13] - Total current assets increased to $333.4 million as of September 28, 2025, up from $317.3 million as of December 29, 2024[48] - Total liabilities rose to $1,414.5 million as of September 28, 2025, compared to $1,340.7 million as of December 29, 2024[48] - Cash and cash equivalents at the end of the period were $57.7 million, a slight increase from $56.1 million at the beginning of the period[49] - Total net debt as of September 28, 2025, was $807.9 million, with a net leverage ratio of 3.9x based on trailing twelve months Normalized Adjusted EBITDA[63] - Gross debt amounted to $865.6 million, which includes term loans, real estate loans, and equipment loans[63] Future Outlook - The company raised its 2025 Organic Net Sales growth outlook to approximately 3% from a prior expectation of 2.5%[16] - The company expects Adjusted EBITDA growth of 7% to 10% and Adjusted Earnings Per Share growth of 7% to 10% for fiscal year 2025[20] Shareholder Information - The weighted-average shares of Class A Common stock outstanding increased to 86,958,867 from 82,445,064 year-over-year[43] - The weighted-average shares of Class A Common stock outstanding increased to 86,266,184 from 81,763,848[46] - Adjusted Earnings Per Share for the 13 weeks ended September 28, 2025, was $0.23, reflecting a 9.5% increase from $0.21 in 2024[55] Adjustments and Impairments - The adjustment related to purchase commitments and other adjustments was an expense of $2.7 million for the thirteen weeks ended September 28, 2025, compared to $1.5 million for the same period in 2024[61] - Acquisitions and divestitures incurred expenses of $10.0 million for the thirteen weeks ended September 28, 2025, up from $2.8 million in the prior year[61] - The company recorded an impairment charge of $0.6 million during the 39 weeks ended September 28, 2025[60] Performance Metrics - Adjusted EBITDA is a key performance indicator used to evaluate operating performance, and it is calculated by excluding certain non-cash adjustments and other cash adjustment items[37] - Normalized Adjusted EBITDA for FY 2025 was $207.2 million, slightly up from $200.2 million in FY 2024[62] - EBITDA for the 13 weeks ended September 28, 2025, was $23.8 million, a decrease of 22.0% from $30.5 million in 2024[58] - Adjusted EBITDA for the 13 weeks ended September 28, 2025, was $60.3 million, an increase of 11.7% from $54.0 million in 2024[58]

Sales Performance - As of September 28, 2025, approximately 50% of U.S. households have Utz's products, with retail sales for salty snacks decreasing by 0.2% while Utz's retail sales increased by 4.8% for the thirteen weeks ended September 28, 2025[82][86]. - The company experienced retail volume and retail sales growth of 3.0% and 4.8%, respectively, in Expansion Geographies for the thirteen weeks ended September 28, 2025[84]. - Net sales for the thirteen weeks ended September 28, 2025, were $377.8 million, representing a 3.4% increase from $365.5 million in the same period of 2024[104]. - For the thirty-nine weeks ended September 28, 2025, net sales were $1,096.6 million, a 2.7% increase from $1,068.2 million in the same period of 2024[112]. - Branded Salty Snacks accounted for 89% of net sales for the thirteen weeks ended September 28, 2025, with a 5.8% increase in sales, while Non-Branded & Non-Salty Snacks saw a 13.1% decrease[105]. Financial Performance - The company reported a net loss of $20.2 million for the thirteen weeks ended September 28, 2025, compared to a net income of $0.8 million in the prior year[103]. - Income tax expense for the thirteen weeks ended September 28, 2025, was $13.4 million, significantly higher than $0.2 million in the same period of 2024[111]. - The company experienced a decrease in other loss, net, to $10.1 million for the thirteen weeks ended September 28, 2025, down from $18.5 million in the prior year[110]. - Adjusted EBITDA for the thirty-nine weeks ended September 28, 2025, was $154.1 million, representing an increase from $147.1 million in the prior year[123]. - The gross profit margin for the thirty-nine weeks ended September 28, 2025, was 33.9%, down from 35.1% in the prior year, attributed to increased investments for capacity expansion[114]. Cost Management - The company utilizes buying-forward strategies to manage commodity costs, locking in prices for key materials between three and 18 months in advance[98]. - Selling, distribution, and administrative expenses increased by 11.9% to $123.1 million for the thirteen weeks ended September 28, 2025, primarily due to higher costs associated with growth and geographic expansion[108]. - The company incurred $4.6 million in share-based compensation expense for the thirteen weeks ended September 28, 2025, slightly down from $4.7 million in the same period of 2024[124]. Manufacturing and Expansion - The company plans to consolidate its manufacturing footprint from eight to seven facilities, closing the Grand Rapids, Michigan facility, to generate cost savings and enhance efficiency[82][94]. - The company acquired Insignia International's DSD distribution assets in October 2025, accelerating its expansion in California, which has a $4.1 billion retail sales market for salty snacks[96]. - Boulder Canyon brand saw a growth of 199.0% for the thirty-nine weeks ended September 28, 2025, driven by new product innovations[97]. Debt and Financing - As of September 28, 2025, the company had $708.7 million in variable rate indebtedness, with a weighted average interest rate of 4.9%, down from 5.7% in the prior year[89]. - The company recorded a loss on debt extinguishment of $0.5 million related to the refinancing of its Term Loan B for the thirty-nine weeks ended September 28, 2025[132]. - As of September 28, 2025, $20.7 million was outstanding under the asset-based lending facility, with $140.0 million available for borrowing[134]. - Net cash provided by financing activities was $49.5 million for the thirty-nine weeks ended September 28, 2025, contrasting with a net cash outflow of $155.2 million in the prior year[141]. Market and Regulatory Environment - The U.S. salty snack category is valued at $41 billion, within the broader $147 billion U.S. snack food market as of September 28, 2025[85]. - The company recorded a charge to deferred taxes due to the One Big Beautiful Bill Act, impacting its consolidated financial statements[90]. - The company plans to remove Food, Drug & Cosmetic colors from its product portfolio by the end of 2027, which may affect net sales and market share[97]. - The company's market risk exposures have not changed materially since the filing of the Annual Report on Form 10-K for the year ended December 29, 2024[145]. - Quantitative and qualitative disclosures about market risk can be found in Item 7A of the Annual Report on Form 10-K[145].

Core Insights - Utz Brands, Inc. reported a 3.4% increase in net sales for the third fiscal quarter, reaching $377.8 million [1] - Total organic net sales also rose by 3.4%, with branded salty snacks organic net sales increasing by 5.8% [1] - The gross profit margin experienced a decline of 220 basis points [1]

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Company Overview - Utz Brands, Inc. (NYSE:UTZ) produces and markets a variety of salty snacks, including chips, tortilla chips, potato chips, pretzels, popcorn, and party mixes [2]. Market Sentiment - Jim Cramer highlighted that owning Utz Brands is challenging due to the competitive nature of the snack industry, but he believes the stock is undervalued and should not be sold at its current low price [1]. - Baron Small Cap Fund decided to sell its position in Utz Brands, citing slower-than-expected sales and earnings growth, increased competition, and weaker consumer spending as key factors [2]. Investment Perspective - Despite acknowledging the potential of Utz Brands as an investment, Baron Small Cap Fund suggests that certain AI stocks present greater upside potential and lower downside risk compared to Utz [2].

Core Insights - Utz Brands, Inc. is a leading U.S. manufacturer of branded salty snacks with over a century of experience [1] - The company will showcase its newest flavor launches and product innovations at the 2025 National Association of Convenience Stores (NACS) Show [1] - The NACS Show will take place from October 15–17, 2025, at McCormick Place Convention Center in Chicago, IL, and will gather convenience and fuel retailing professionals for networking, education, and product discovery [1]

Core Viewpoint - Utz Brands, Inc. is committed to evolving its product offerings by removing certified Food, Drug and Cosmetic colors from its portfolio, reflecting a dedication to quality and transparency in response to changing consumer preferences and regulatory initiatives [1] Company Commitment - The company has a long-standing history since 1921 of prioritizing quality and simple, trusted ingredients in its snacks [1] - Utz Brands emphasizes its adaptability to consumer tastes and regulatory changes while maintaining its core values [1]