Core Insights - The company is experiencing growth in its category, driven by investments in A&C (Advertising & Promotion) and distribution, which are supported by supply chain productivity and capital expenditures [1] Group 1: Supply Chain Transformation - The supply chain transformation and capital expenditure cycle that began last year is expected to continue through 2025 [1] - The company is focused on enhancing its manufacturing network and is assessing its progress in comparison to other packaged food companies regarding supply chain efficiencies [1]

Financial Data and Key Metrics Changes - The company spent $100 million on capital expenditures (CapEx) last year and expects to spend a similar amount this year, indicating a significant investment cycle [5][6] - The company is guiding for EBITDA to grow at a mid-teens level year-over-year in the second half, which would represent nearly 200 basis points of year-over-year EBITDA margin expansion [45][46] - Net leverage ticked up to 4.1 times this quarter, but the company maintains its expectation for net leverage to approach three times by fiscal year-end [52] Business Line Data and Key Metrics Changes - Boulder Canyon has been a significant contributor to top-line sales, surpassing the initial target of $100 million and expected to reach closer to $200 million by year-end [18][23] - The productivity program is expected to normalize around 3% to 4% in the future, with current savings at 6% of cost of goods sold (COGS) [8][12] Market Data and Key Metrics Changes - Distribution gains in core markets have been around 10%, while expansion geographies have seen gains of approximately 18% [20] - The company has experienced both value and volume market share gains in core markets for the first time in several quarters [31][32] Company Strategy and Development Direction - The company is focused on supply chain transformation and capital investments to drive productivity and efficiency [4][5] - There is a commitment to maintain a strong brand presence and invest in marketing and innovation, with a target of reaching 3% to 4% of sales in advertising and consumer spending over time [48][50] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the salty snack category, noting that household penetration continues to grow, indicating consumer demand [38] - The competitive environment has been rational, with no unusual activity from competitors, which is seen as a positive for the company [36] Other Important Information - The company has been active in the M&A market but has slowed down due to a focus on debt paydown, with a high hurdle for any potential acquisitions [58][60] - The company is seeing improvements in the convenience store channel, which had previously been slower than desired [65] Q&A Session Summary Question: What drove the organic sales growth outlook increase? - The company raised its outlook for organic sales growth due to strong distribution gains and the performance of Boulder Canyon, expecting a good year despite a dynamic competitive environment [42][43] Question: What are the key drivers for EBITDA margin expansion in the second half? - Key drivers include productivity gains from CapEx investments and a discrete item related to the Grand Rapids facility closure, contributing to a strong EBITDA close for the year [45][46] Question: How is the company addressing the slower performance in the convenience channel? - The company acknowledges past assortment management choices that affected performance but is now seeing distribution gains and expects to be around flattish before the end of the year [65]

Core Insights - Utz Brands reported Q2 2025 GAAP revenue of $366.7 million, exceeding analyst expectations by $4.57 million, while Non-GAAP earnings per share were $0.17, missing estimates by $0.01 [1][2] - The company experienced a 2.9% year-over-year increase in GAAP revenue, driven by a 5.4% organic growth in branded salty snacks, which represent 88% of total sales [5][6] - Despite revenue growth, escalating costs constrained margins, leading to a significant 60.2% decline in net income compared to the previous year [2][7] Financial Performance - Non-GAAP EPS for Q2 2025 was $0.17, down 10.5% from $0.19 in Q2 2024 [2] - Adjusted EBITDA decreased by 2.0% to $48.7 million, while adjusted gross profit margin improved to 39.8%, up 2.2 percentage points year-over-year [2][7] - Selling, distribution, and administrative costs rose to $119.5 million, representing 32.6% of sales, up from 29.4% in Q2 2024 [7] Business Strategy - The company focuses on geographic expansion and investment in its "Power Four" product families, aiming to enhance operational efficiency and distribution [4][5] - Utz's retail sales increased by 3.3% in a category that saw a 1.5% decline, indicating strong consumer demand for its branded products [6] - The company is consolidating its supply network, closing a facility in Grand Rapids, Michigan, to drive productivity savings [8] Future Outlook - Management raised the organic net sales growth forecast for FY2025 to at least 2.5%, while adjusting the adjusted EBITDA growth guidance to a range of 7% to 10% [11] - The outlook for adjusted earnings per share was lowered to 7% to 10% growth due to increased capital expenditures and rising interest expenses [11] - The company aims to reduce its net leverage ratio to around 3 times by the end of FY2025, down from 4.1 times currently [12]

Financial Data and Key Metrics Changes - EBITDA was roughly flat in the first half of the year, with a projected growth of 8.5% for the full year, implying high teens growth in the second half [6][19] - EPS guidance was revised from 10-15% growth to 7-10% growth, with a midpoint impact of about 3 cents due to increased interest expense and accelerated depreciation [19][20] Business Line Data and Key Metrics Changes - Significant growth was observed in potato chips, while tortilla chips and pretzels were below trend, with specific brands performing variably [23][26] - Boulder Canyon brand is expected to continue strong growth, with distribution gains across both core and expansion markets [71][72] Market Data and Key Metrics Changes - Distribution gains were noted across all 30 expansion geographies, with strong retailer support from national chains [33][34] - The convenience store channel is showing improvement, with expectations to reach flattish performance by year-end [65] Company Strategy and Development Direction - The company is focused on westward expansion and infrastructure investments to support distribution gains [11][35] - Marketing strategies include increased spending in retail media and social media to support geographic expansion and brand introduction [91][92] Management's Comments on Operating Environment and Future Outlook - Management remains confident in achieving productivity savings and margin expansion, with a positive outlook for the second half of the year [9][56] - The company believes the category will continue to grow, driven by household penetration and repeat purchases [107][109] Other Important Information - The company is nearing the end of its manufacturing optimization efforts, with significant productivity improvements already realized [85][87] - CapEx spending is expected to peak in 2025, with a focus on automation and efficiency improvements [21][88] Q&A Session Summary Question: What gives confidence in the EBITDA growth outlook despite flat performance in the first half? - Management cited investments in infrastructure and productivity savings as key drivers for expected growth in the second half [7][9] Question: Can you clarify the changes in EPS guidance? - EPS growth was revised down due to increased interest expenses and accelerated depreciation from higher CapEx spending [19][20] Question: What is driving the strong top-line results? - The company attributed growth to distribution gains, improved volume and value share in core markets, and investments in westward expansion [10][11] Question: How is the company addressing the performance of tortilla chips and pretzels? - Management noted that tortilla chips faced promotional overlaps, while pretzel performance varied by brand, with some brands performing well [26][27] Question: What is the outlook for the convenience store channel? - The company expects the convenience store channel to improve and reach flattish performance by year-end, supported by better product assortment [65] Question: How is the company managing supply chain and manufacturing efficiency? - The company has made significant strides in optimizing manufacturing and is now focusing on automation and efficiency improvements [85][87] Question: What is the long-term outlook for category growth? - Management remains bullish on long-term category growth, citing strong household penetration and repeat purchases as positive indicators [107][109] Question: How is the company addressing consumer interest in protein products? - The company is exploring opportunities in the protein segment while ensuring that products meet consumer taste preferences [111][112]

Financial Performance - Net Sales grew by 2.9% to $366.7 million in 2Q'25[15, 67] - Branded Salty Snacks Net Sales increased by 5.4%[15, 22, 68] - Adjusted EBITDA decreased by 2.0% to $48.7 million[15, 20, 66, 67] - Adjusted EPS decreased by 10.5% to $0.17[15, 20, 66, 67] - Adjusted Gross Profit increased by 9.0% to $146.1 million, with a margin of 39.8% of Net Sales, a 220 bps expansion[15, 67, 68, 99] Market Share and Volume Growth - The company achieved its 8th consecutive quarter of volume share growth in the Salty Snacks Category[15] - The company holds a 5.7% volume share and a 4.3% dollar share in the Salty Snacking category[29] - Retail volume for Power Four Brands increased by 6.3%, leading to a 5.7% increase in retail sales dollars[31] Strategic Initiatives - The company is optimizing its manufacturing network by closing the Grand Rapids plant, reducing the footprint to 7 primary plants[16] - The company anticipates approximately 6% productivity savings in 2025 as part of its supply chain transformation[18] - The company is updating its FY25 outlook, expecting Organic Net Sales to grow by 2.5% or better and Adjusted EBITDA to increase by 7% to 10%[15, 93]

Company Performance - Utz Brands reported quarterly earnings of $0.17 per share, missing the Zacks Consensus Estimate of $0.19 per share, and down from $0.19 per share a year ago, representing an earnings surprise of -10.53% [1] - The company posted revenues of $366.7 million for the quarter ended June 2025, surpassing the Zacks Consensus Estimate by 1.91%, compared to year-ago revenues of $356.19 million [2] - Over the last four quarters, Utz Brands has surpassed consensus EPS estimates just once and topped consensus revenue estimates two times [2] Stock Performance - Utz Brands shares have lost about 11.1% since the beginning of the year, while the S&P 500 has gained 8.2% [3] - The current Zacks Rank for Utz Brands is 3 (Hold), indicating that the shares are expected to perform in line with the market in the near future [6] Future Outlook - The current consensus EPS estimate for the coming quarter is $0.25 on revenues of $370.1 million, and for the current fiscal year, it is $0.85 on revenues of $1.43 billion [7] - The outlook for the industry can significantly impact the stock's performance, with the Food - Miscellaneous industry currently in the bottom 28% of over 250 Zacks industries [8]

[Part I - Financial Information](index=5&type=section&id=Part%20I%20-%20Financial%20Information) [Financial Statements](index=5&type=section&id=Item%201.%20Financial%20Statements) This section presents Utz Brands, Inc.'s unaudited consolidated financial statements, including Balance Sheets, Statements of Operations, Equity, and Cash Flows, with detailed notes [Consolidated Balance Sheets](index=5&type=section&id=Consolidated%20Balance%20Sheets) Total assets increased to **$2,837.3 million** by June 29, 2025, driven by inventories and PPE, while total liabilities rose to **$1,459.4 million** due to debt, and total equity slightly decreased Consolidated Balance Sheet Summary (in millions) | Account | June 29, 2025 (Unaudited) | December 29, 2024 | | :--- | :--- | :--- | | **Total Current Assets** | $390.5 | $317.3 | | **Total Non-current Assets** | $2,446.8 | $2,411.1 | | **Total Assets** | **$2,837.3** | **$2,728.4** | | **Total Current Liabilities** | $303.3 | $285.3 | | **Total Non-current Liabilities** | $1,156.1 | $1,055.4 | | **Total Liabilities** | **$1,459.4** | **$1,340.7** | | **Total Equity** | **$1,377.9** | **$1,387.7** | [Consolidated Statements of Operations and Comprehensive Income (Loss)](index=6&type=section&id=Consolidated%20Statements%20of%20Operations%20and%20Comprehensive%20Income%20(Loss)) Q2 2025 net sales increased to **$366.7 million**, but income from operations significantly decreased to **$6.4 million**, and net income fell to **$10.1 million**, resulting in diluted EPS of **$0.12** Q2 and YTD Performance Comparison (in millions, except per share data) | Metric | Q2 2025 | Q2 2024 | YTD 2025 | YTD 2024 | | :--- | :--- | :--- | :--- | :--- | | **Net Sales** | $366.7 | $356.2 | $718.8 | $702.7 | | **Gross Profit** | $126.8 | $124.7 | $245.0 | $244.3 | | **Income from Operations** | $6.4 | $22.5 | $12.1 | $32.2 | | **Net Income** | $10.1 | $25.4 | $15.8 | $27.8 | | **Diluted EPS** | $0.12 | $0.23 | $0.21 | $0.19 | [Consolidated Statements of Cash Flows](index=9&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) For H1 2025, net cash used in operations was **$3.9 million**, investing activities used **$71.3 million** (a shift from prior year's divestiture proceeds), and financing activities provided **$73.7 million** from debt Cash Flow Summary for Twenty-six Weeks Ended (in millions) | Cash Flow Activity | June 29, 2025 | June 30, 2024 | | :--- | :--- | :--- | | **Net cash used in operating activities** | $(3.9) | $(0.2) | | **Net cash (used in) provided by investing activities** | $(71.3) | $141.0 | | **Net cash provided by (used in) financing activities** | $73.7 | $(126.2) | | **Net (decrease) increase in cash** | $(1.5) | $14.6 | [Notes to the Consolidated Financial Statements](index=10&type=section&id=Notes%20to%20the%20Consolidated%20Financial%20Statements) Notes detail accounting policies, divestitures, and debt, including the **$167.5 million** 2024 brand sale, 2025 Term Loan B refinancing, and changes in warrant liabilities - On February 5, 2024, the Company sold the Good Health and R.W. Garcia brands and related assets for **$167.5 million**, recognizing a gain of **$44.0 million**[31](index=31&type=chunk)[32](index=32&type=chunk) - On January 29, 2025, the Company refinanced its **$630.3 million** Term Loan B, reducing the interest rate spread over SOFR from **2.75% to 2.50%** and extending the maturity to **2032**[40](index=40&type=chunk) - The fair value of the warrant liability decreased from **$33.0 million** at year-end 2024 to **$9.5 million** as of June 29, 2025, resulting in a gain on remeasurement of **$23.5 million** for the twenty-six week period[18](index=18&type=chunk)[44](index=44&type=chunk) - The company operates as a single reportable segment: the manufacturing, distribution, marketing, and sale of snack food products[62](index=62&type=chunk) [Management's Discussion and Analysis (MD&A)](index=22&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses Q2 and H1 2025 financial results, highlighting **2.9%** Q2 net sales growth driven by volume/mix, impacted profitability due to increased investments, and reconciliation of non-GAAP measures like Adjusted EBITDA [Results of Operations](index=25&type=section&id=Results%20of%20Operations) Q2 2025 net sales grew **2.9%** to **$366.7 million** driven by volume/mix, while gross profit increased to **$126.8 million**, but operating income declined due to a **14.2%** rise in selling, distribution, and administrative expenses Q2 2025 vs Q2 2024 Key Metrics (in millions) | Metric | Q2 2025 | Q2 2024 | Change | Change % | | :--- | :--- | :--- | :--- | :--- | | **Net Sales** | $366.7 | $356.2 | +$10.5 | +2.9% | | **Gross Profit** | $126.8 | $124.7 | +$2.1 | +1.7% | | **Selling, Dist. & Admin. Exp.** | $119.5 | $104.6 | +$14.9 | +14.2% | | **Income from Operations** | $6.4 | $22.5 | -$16.1 | -71.6% | - The **2.9%** increase in Q2 net sales was primarily driven by a **3.9%** benefit from favorable volume/mix, offset by a **1.0%** reduction from lower net price realization[91](index=91&type=chunk) - For the first half of 2025, Branded Salty Snacks net sales increased by **5.2%**, led by Boulder Canyon, while Non-Branded & Non-Salty Snacks net sales decreased by **9.9%**[100](index=100&type=chunk) [Non-GAAP Financial Measures](index=28&type=section&id=Non-GAAP%20Financial%20Measures) The company uses non-GAAP measures like Adjusted EBITDA, which was **$48.7 million** (**13.3%** of net sales) for Q2 2025 and **$93.8 million** for H1 2025, with adjustments including depreciation, amortization, and share-based compensation Reconciliation of Net Income to Adjusted EBITDA (in millions) | Line Item | Q2 2025 | Q2 2024 | YTD 2025 | YTD 2024 | | :--- | :--- | :--- | :--- | :--- | | **Net Income** | $10.1 | $25.4 | $15.8 | $27.8 | | **EBITDA** | $39.1 | $51.8 | $73.9 | $112.0 | | **Adjusted EBITDA** | **$48.7** | **$49.7** | **$93.8** | **$93.1** | | **Adjusted EBITDA as % of Net Sales** | 13.3% | 14.0% | 13.0% | 13.2% | [Liquidity and Capital Resources](index=29&type=section&id=Liquidity%20and%20Capital%20Resources) Liquidity is sourced from operations, credit facilities, and term loans, with **$3.9 million** cash used in operations, **$71.3 million** used in investing, and **$73.7 million** provided by financing activities in H1 2025 - Net cash used in operating activities was **$3.9 million** for the first half of 2025, compared to **$0.2 million** in the prior year period, driven by increases in accounts receivable and inventories[123](index=123&type=chunk) - Net cash provided by financing activities was **$73.7 million** in H1 2025, a reversal from **$126.2 million** used in H1 2024, which included debt paydown from divestiture proceeds[125](index=125&type=chunk) - As of June 29, 2025, **$116.3 million** was available for borrowing under the ABL facility[118](index=118&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=31&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company reports no material changes to its market risk exposures since the December 29, 2024, Annual Report on Form 10-K filing - There have been no material changes to the company's market risk exposures since the last Annual Report on Form 10-K[129](index=129&type=chunk) [Controls and Procedures](index=32&type=section&id=Item%204.%20Controls%20and%20Procedures) Management, including the CEO and CFO, concluded that disclosure controls and procedures were effective as of June 29, 2025, with no material changes to internal control over financial reporting - The CEO and CFO concluded that disclosure controls and procedures are effective at a level of reasonable assurance as of June 29, 2025[130](index=130&type=chunk) - No material changes to internal control over financial reporting occurred during the quarter[131](index=131&type=chunk) [Part II - Other Information](index=32&type=section&id=Part%20II%20-%20Other%20Information) [Legal Proceedings](index=32&type=section&id=Item%201.%20Legal%20Proceedings) The company reports no material legal proceedings beyond ordinary routine litigation incidental to its business - The company reports no pending material legal proceedings[132](index=132&type=chunk) [Risk Factors](index=32&type=section&id=Item%201A.%20Risk%20Factors) No material changes to the company's risk factors have occurred since the December 29, 2024, Annual Report on Form 10-K filing - No material changes to risk factors have occurred since the last annual report filing[133](index=133&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=32&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company reported no unregistered sales of equity securities or use of proceeds during the period - None reported[134](index=134&type=chunk) [Exhibits](index=33&type=section&id=Item%206.%20Exhibits) This section lists exhibits filed with the Form 10-Q, including CEO and CFO certifications and XBRL data files - Exhibits filed include CEO and CFO certifications (Rule 13a-14 and Section 906) and Inline XBRL documents[141](index=141&type=chunk)

[Performance Highlights](index=1&type=section&id=Performance%20Highlights) Utz Brands reported strong Q2 2025 performance with nearly 3% organic net sales growth, driven by a **5.4%** increase in its **Branded Salty Snacks** portfolio. The company raised its full-year **Organic Net Sales** growth guidance to **2.5%** or better and tightened its **Adjusted EBITDA** growth forecast to **7-10%**. However, it lowered its **Adjusted EPS** growth guidance to **7-10%** due to higher interest and depreciation expenses from accelerated capital investments in its manufacturing network Q2 2025 Key Metrics Summary | Metric | Value | Change vs. Q2 2024 | | :--- | :--- | :--- | | Net Sales | $366.7 million | +2.9% | | Organic Net Sales | +2.9% | - | | Branded Salty Snacks Organic Net Sales | +5.4% | - | | Adjusted Gross Profit Margin | - | +220 bps | | Net Income | $10.1 million | -60.2% | | Adjusted Net Income | $23.6 million | -14.2% | | Adjusted EBITDA | $48.7 million | -2.0% | | Diluted EPS | $0.12 | -47.8% | | Adjusted EPS | $0.17 | -10.5% | * CEO Howard Friedman highlighted accelerating growth in the **Branded Salty Snacks** portfolio, value and volume share gains in both Core and Expansion Geographies, and significant **Adjusted Gross Profit Margin** expansion due to proactive cost management[4](index=4&type=chunk) * CFO Bill Kelley announced an increase in the **2025 Organic Net Sales** outlook, a tightening of the **Adjusted EBITDA** growth range, and a reduction in **Adjusted EPS** guidance. The lower EPS forecast is attributed to higher interest and depreciation/amortization from accelerated capex investments aimed at **long-term growth**[4](index=4&type=chunk) [Second Quarter 2025 Financial Results](index=3&type=section&id=Second%20Quarter%202025%20Financial%20Results) In Q2 2025, **Net Sales** rose **2.9%** to **$366.7 million**, driven by a **3.9%** favorable volume/mix contribution, while net price realization was slightly negative. **Branded Salty Snacks** sales grew **5.4%**, outperforming the overall category. Despite a **220bps** expansion in **Adjusted Gross Profit Margin** from **productivity savings**, higher **Selling, Distribution, and Administrative (SD&A) Expenses** to support growth led to a **60.2%** decrease in **Net Income** to **$10.1 million** and a **2.0%** decline in **Adjusted EBITDA** to **$48.7 million** * **Net Sales growth of 2.9%** was driven by a **3.9%** positive volume/mix contribution, partially offset by a (**1.0%**) decline in net price realization. **Branded Salty Snacks Organic Net Sales**, representing **88%** of total sales, increased **5.4%**[6](index=6&type=chunk) * The company's **Branded Salty Snacks** retail sales grew **3.3%** while the overall Salty Snack category declined **1.5%**. Retail volumes increased **4.3%** versus a **1.5%** category decline, leading to **volume share gains**[6](index=6&type=chunk) * **Adjusted Gross Profit Margin** expanded by **220bps** to **39.8%** due to **productivity savings**. However, **Adjusted SD&A Expenses** increased to **26.5%** of **Net Sales** from **23.7%** in the prior year, driven by investments in geographic expansion and growth initiatives[6](index=6&type=chunk)[7](index=7&type=chunk) * The decline in profitability, with **Net Income** down **60.2%** and **Adjusted EBITDA** down **2.0%**, was primarily caused by the increase in **SD&A Expenses**, higher depreciation and amortization, and higher interest expense, which more than offset the gross margin expansion[8](index=8&type=chunk)[9](index=9&type=chunk) [Balance Sheet and Cash Flow Highlights](index=3&type=section&id=Balance%20Sheet%20and%20Cash%20Flow%20Highlights) As of June 29, 2025, Utz maintained **Total Liquidity** of **$170.9 million**, with **Net Debt** at **$826.3 million**, resulting in a **Net Leverage Ratio** of **4.1x**. For the first half of the year, **Cash Flow from Operations** was **($3.9 million)**, reflecting seasonal working capital needs. The company invested **$65.7 million** in **Capital Expenditures** and paid **$20.1 million** in **Dividends & Distributions Paid** Financial Position and Cash Flow (as of June 29, 2025) | Metric | Value | | :--- | :--- | | **Balance Sheet** | | | Total Liquidity | $170.9 million | | Cash on Hand | $54.6 million | | Revolver Availability | $116.3 million | | Net Debt | $826.3 million | | Net Leverage Ratio | 4.1x | | **Cash Flow (YTD)** | | | Cash Flow from Operations | ($3.9 million) | | Capital Expenditures | $65.7 million | | Dividends & Distributions Paid | $20.1 million | [Business and Strategic Updates](index=5&type=section&id=Business%20and%20Strategic%20Updates) [Supply Chain Transformation Plan Update](index=5&type=section&id=Supply%20Chain%20Transformation%20Plan%20Update) Utz is advancing its supply chain transformation by consolidating its manufacturing footprint from eight to seven primary plants with the planned closure of its Grand Rapids, Michigan facility. This strategic move, expected to be completed by early 2026, aims to enhance operational efficiency, leverage fixed costs through higher volume at larger facilities, and support continued geographic expansion. The company anticipates **cost savings** from this initiative in the **second half of 2025** * The company is closing its Grand Rapids, Michigan manufacturing facility, consolidating its primary plant footprint from eight to seven[12](index=12&type=chunk) * This action is expected to generate **cost savings in H2 2025**, contributing to the previously stated goal of approximately **6% productivity savings** for the fiscal year[13](index=13&type=chunk) * The consolidation is designed to shift volume to larger, more efficient facilities, improve fixed cost leverage, and enhance automation capabilities to support **long-term growth**[14](index=14&type=chunk) [Fiscal Year 2025 Outlook](index=5&type=section&id=Fiscal%20Year%202025%20Outlook) Utz updated its fiscal 2025 outlook, raising expectations for top-line growth while lowering the forecast for earnings per share. The company now anticipates **Organic Net Sales** growth of **2.5%** or better and **Adjusted EBITDA** growth of **7%** to **10%**. However, **Adjusted EPS** growth is now projected at **7%** to **10%**, down from **10%** to **15%**, due to higher interest expense and depreciation from accelerated capital investments Updated Fiscal Year 2025 Guidance | Metric | Previous Outlook | Updated Outlook | | :--- | :--- | :--- | | Organic Net Sales Growth | Low-single digits | 2.5% or better | | Adjusted EBITDA Growth | 6% to 10% | 7% to 10% | | Adjusted EPS Growth | 10% to 15% | 7% to 10% | Updated FY 2025 Key Assumptions | Metric | Previous Expectation | Updated Expectation | | :--- | :--- | :--- | | Interest Expense | ~$43 million | ~$46 million | | Capital Expenditures | $90 - $100 million | ~$100 million | | Net Leverage Ratio | - | Approaching 3x at year-end | [Consolidated Financial Statements](index=15&type=section&id=Consolidated%20Financial%20Statements) [Consolidated Statements of Operations](index=15&type=section&id=Consolidated%20Statements%20of%20Operations) For the second quarter ended June 29, 2025, Utz reported **Net Sales** of **$366.7 million**, an increase from **$356.2 million** in the prior-year period. However, higher operating expenses led to a significant drop in **Income from Operations** to **$6.4 million** from **$22.5 million**. **Net Income** for the quarter was **$10.1 million**, down from **$25.4 million** year-over-year. For the 26-week period, **Net Sales** grew to **$718.8 million**, while **Net Income** decreased to **$15.8 million** from **$27.8 million** Consolidated Statements of Operations (Q2) | (In millions) | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | Net sales | $366.7 | $356.2 | | Gross profit | $126.8 | $124.7 | | Income from operations | $6.4 | $22.5 | | Net income | $10.1 | $25.4 | | Diluted EPS | $0.12 | $0.23 | Consolidated Statements of Operations (YTD) | (In millions) | 26 Weeks 2025 | 26 Weeks 2024 | | :--- | :--- | :--- | | Net sales | $718.8 | $702.7 | | Gross profit | $245.0 | $244.3 | | Income from operations | $12.1 | $32.2 | | Net income | $15.8 | $27.8 | | Diluted EPS | $0.21 | $0.19 | [Consolidated Balance Sheets](index=17&type=section&id=Consolidated%20Balance%20Sheets) As of June 29, 2025, Utz's **Total Assets** stood at **$2.84 billion**, an increase from **$2.73 billion** at the end of fiscal 2024. The growth was primarily in current assets like accounts receivable and inventories, and non-current assets like property, plant, and equipment. **Total Liabilities** rose to **$1.46 billion** from **$1.34 billion**, mainly due to an increase in non-current debt. **Total Equity** remained relatively stable at **$1.38 billion** Consolidated Balance Sheet Highlights | (In millions) | June 29, 2025 | Dec 29, 2024 | | :--- | :--- | :--- | | **Assets** | | | | Cash and cash equivalents | $54.6 | $56.1 | | Total current assets | $390.5 | $317.3 | | Total assets | $2,837.3 | $2,728.4 | | **Liabilities & Equity** | | | | Total current liabilities | $303.3 | $285.3 | | Total liabilities | $1,459.4 | $1,340.7 | | Total equity | $1,377.9 | $1,387.7 | [Consolidated Statements of Cash Flows](index=18&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) For the 26 weeks ended June 29, 2025, the company experienced a net cash usage of **$3.9 million** in **Operating Activities**, driven by increases in accounts receivable and inventory. **Net Cash Used in Investing Activities** was **$71.3 million**, primarily due to **$65.7 million** in property and equipment purchases. **Net Cash Provided by Financing Activities** was **$73.7 million**, resulting from net borrowings on credit facilities. Overall, cash and cash equivalents decreased by **$1.5 million** to **$54.6 million** Consolidated Statement of Cash Flows (YTD) | (In millions) | 26 Weeks 2025 | 26 Weeks 2024 | | :--- | :--- | :--- | | Net cash used in operating activities | ($3.9) | ($0.2) | | Net cash (used in) provided by investing activities | ($71.3) | $141.0 | | Net cash provided by (used in) financing activities | $73.7 | ($126.2) | | **Net (decrease) increase in cash** | **($1.5)** | **$14.6** | | **Cash and cash equivalents at end of period** | **$54.6** | **$66.6** | [Reconciliation of Non-GAAP Financial Measures](index=19&type=section&id=Reconciliation%20of%20Non-GAAP%20Financial%20Measures) [Net Sales and Organic Net Sales](index=19&type=section&id=Net%20Sales%20and%20Organic%20Net%20Sales) For Q2 2025, reported **Net Sales** and **Organic Net Sales** both grew by **2.9%** year-over-year. This growth was entirely driven by the **Branded Salty Snacks** segment, which increased **5.4%**, while the Non-Branded & Non-Salty Snacks segment declined by **11.8%**. The growth in **Branded Salty Snacks** was primarily due to a **6.9%** increase in volume/mix, partially offset by a **1.5%** decrease in pricing Q2 2025 Net Sales Growth Drivers | (% change vs. prior year) | Branded Salty Snacks | Non-Branded & Non-Salty Snacks | Total | | :--- | :--- | :--- | :--- | | Volume/mix | 6.9% | (13.4)% | 3.9% | | Pricing | (1.5)% | 1.6% | (1.0)% | | **Organic Net Sales Growth** | **5.4%** | **(11.8)%** | **2.9%** | [Gross Profit and Adjusted Gross Profit](index=19&type=section&id=Gross%20Profit%20and%20Adjusted%20Gross%20Profit) In Q2 2025, GAAP **Gross Profit** was **$126.8 million** (**34.6%** margin), a slight decrease in margin from the prior year. However, after adjusting for depreciation, amortization, and other items, **Adjusted Gross Profit** increased to **$146.1 million**. This resulted in an **Adjusted Gross Profit Margin** of **39.8%**, a significant expansion of **220bps** compared to **37.6%** in Q2 2024 Gross Profit Reconciliation (Q2) | (In millions) | Q2 2025 | Q2 2024 | | :--- | :--- | :--- | | Gross Profit | $126.8 | $124.7 | | *as a % of Net Sales* | *34.6%* | *35.0%* | | Adjustments | $19.3 | $9.3 | | **Adjusted Gross Profit** | **$146.1** | **$134.0** | | ***as a % of Net Sales*** | ***39.8%*** | ***37.6%*** | [Adjusted Net Income and Adjusted EPS](index=20&type=section&id=Adjusted%20Net%20Income%20and%20Adjusted%20EPS) For Q2 2025, after excluding items such as acquisition-related amortization, business transformation costs, and the gain on remeasurement of warrant liability, **Adjusted Net Income** was **$23.6 million**, a **14.2%** decrease from **$27.5 million** in the prior year. Consequently, **Adjusted Earnings Per Share (EPS)** fell **10.5%** to **$0.17** from **$0.19** in Q2 2024 Adjusted Net Income & EPS Reconciliation (Q2) | (In millions, except per share) | Q2 2025 | Q2 2024 | % Change | | :--- | :--- | :--- | :--- | | Net Income | $10.1 | $25.4 | (60.2)% | | Total Adjustments | $13.5 | $2.1 | - | | **Adjusted Net Income** | **$23.6** | **$27.5** | **(14.2)%** | | **Adjusted EPS** | **$0.17** | **$0.19** | **(10.5)%** | [EBITDA and Adjusted EBITDA](index=21&type=section&id=EBITDA%20and%20Adjusted%20EBITDA) In Q2 2025, **Net Income** of **$10.1 million** reconciled to an **Adjusted EBITDA** of **$48.7 million**. This represented a **2.0%** decrease from the **$49.7 million Adjusted EBITDA** in Q2 2024. The **Adjusted EBITDA Margin** contracted by **70 bps** to **13.3%** of **Net Sales**, down from **14.0%** in the prior-year period Adjusted EBITDA Reconciliation (Q2) | (In millions) | Q2 2025 | Q2 2024 | % Change | | :--- | :--- | :--- | :--- | | Net Income | $10.1 | $25.4 | (60.2)% | | D&A, Interest, Taxes & Other | $29.0 | $26.4 | - | | EBITDA | $39.1 | $51.8 | (24.5)% | | Other Adjustments | $9.6 | ($2.1) | - | | **Adjusted EBITDA** | **$48.7** | **$49.7** | **(2.0)%** | | ***Adjusted EBITDA Margin*** | ***13.3%*** | ***14.0%*** | ***(70) bps*** | [Net Debt and Leverage Ratio](index=22&type=section&id=Net%20Debt%20and%20Leverage%20Ratio) As of June 29, 2025, the company's **Gross Debt** was **$880.9 million**. After subtracting **$54.6 million** in cash and cash equivalents, total **Net Debt** stood at **$826.3 million**. Based on a trailing twelve-month **Normalized Adjusted EBITDA** of **$200.9 million**, the **Net Leverage Ratio** was calculated to be **4.1x** Net Debt and Leverage Calculation (as of June 29, 2025) | (In millions) | Value | | :--- | :--- | | Gross Debt | $880.9 | | Less: Cash and Cash Equivalents | $54.6 | | **Total Net Debt** | **$826.3** | | Last 52-Weeks Normalized Adjusted EBITDA | $200.9 | | **Net Leverage Ratio** | **4.1x** | [Appendix](index=6&type=section&id=Appendix) [Non-GAAP Financial Measures Definitions](index=10&type=section&id=Non-GAAP%20Financial%20Measures%20Definitions) This section defines the non-GAAP financial measures used by Utz, such as **Organic Net Sales**, **Adjusted Gross Profit**, **Adjusted EBITDA**, and **Adjusted EPS**. Management believes these metrics provide useful supplemental information to investors by facilitating historical comparisons and offering insight into underlying operational trends, though they should not be considered replacements for GAAP measures * The company uses non-GAAP financial measures to budget, make strategic decisions, and evaluate performance, believing they provide additional transparency for investors[29](index=29&type=chunk) * Key defined measures include **Organic Net Sales** (excluding acquisitions/divestitures), **Adjusted Gross Profit** (excluding D&A and other items), **Adjusted Net Income** (excluding D&A, financing costs, and other adjustments), and **Adjusted EBITDA** (EBITDA adjusted for non-cash and other specific items)[31](index=31&type=chunk)[33](index=33&type=chunk)[35](index=35&type=chunk)[37](index=37&type=chunk) [Other Defined Terms](index=14&type=section&id=Other%20Defined%20Terms) This section provides definitions for key product categories to clarify sales performance discussions. "Branded Salty Snacks" includes the company's core owned brands, while "Non-Branded & Non-Salty Snacks" encompasses partner brands, private label, and items like dips and salsas * Defines "Branded Salty Snacks" as comprising the "Power Four Brands" (Utz®, On The Border®, Zapp's®, Boulder Canyon®) and other owned brands like Golden Flake® and TORTIYAHS!®[39](index=39&type=chunk) * Defines "Non-Branded & Non-Salty Snacks" to include partner brands, private label, co-manufacturing, and Utz-branded non-salty products[40](index=40&type=chunk) [Forward-Looking Statements](index=6&type=section&id=Forward-Looking%20Statements) This section contains the standard "safe harbor" disclosure, cautioning investors that the press release includes forward-looking statements concerning future plans, financial outlooks, and operational strategies. It clarifies that these statements are based on current management expectations and are subject to numerous risks and uncertainties that could cause actual results to differ materially * The report's statements regarding the fiscal 2025 outlook, supply chain transformation, and future growth are identified as forward-looking[23](index=23&type=chunk) * A comprehensive list of potential risks is provided, including industry competition, consumer preferences, supply chain disruptions, inflation, and regulatory changes, among others[25](index=25&type=chunk) * The company states it does not undertake any obligation to publicly update or revise any forward-looking statements[26](index=26&type=chunk)

Core Viewpoint - Wall Street anticipates flat earnings for Utz Brands in the upcoming quarter, with a consensus EPS estimate of $0.19 per share, unchanged from the previous year, and revenues expected to rise by 1% to $359.84 million [1][3]. Earnings Expectations - The stock price may increase if actual earnings exceed expectations in the earnings report scheduled for July 31, while a miss could lead to a decline [2]. - The consensus EPS estimate has been revised 1.35% higher in the last 30 days, indicating a slight positive sentiment among analysts [4]. Earnings Surprise Prediction - The Zacks Earnings ESP model suggests that the Most Accurate Estimate for Utz Brands is lower than the consensus estimate, resulting in an Earnings ESP of -2.70%, indicating a bearish outlook [12]. - The company holds a Zacks Rank of 3, which complicates predictions of an earnings beat [12]. Historical Performance - In the last reported quarter, Utz Brands met the consensus EPS estimate of $0.16, resulting in no surprise [13]. - Over the past four quarters, the company has beaten consensus EPS estimates twice [14]. Industry Comparison - Kraft Heinz, another player in the food industry, is expected to report earnings of $0.64 per share, reflecting an 18% year-over-year decline, with revenues projected at $6.27 billion, down 3.2% [18][19]. - Kraft Heinz has a positive Earnings ESP of +0.31% and has consistently beaten consensus EPS estimates in the last four quarters [20].

Summary of UTZ Brands (UTZ) FY Conference Call - June 10, 2025 Industry Overview - The discussion primarily revolves around the salty snacks category, which has historically seen growth rates of 3% to 4% with a recent slowdown in price contributions due to inflationary pressures [3][4][6]. - The category is experiencing a shift in consumer behavior, with increased household penetration indicating a long-term opportunity for growth [4][5]. Core Insights and Arguments - **Growth Strategy**: The company emphasizes that it is not solely reliant on the salty snacks category for growth, indicating a diversified approach to business development [2][3]. - **Consumer Trends**: There is a notable shift in how consumers define value, with some prioritizing different oil bases or absolute price points. Growth is observed in both high-end retailers and discount stores [9][10]. - **Innovation and Marketing**: The company is focusing on marketing, innovation, and communication as key drivers for growth. New product launches, such as lemonade potato chips and Mike's Hot Honey cheese balls, are part of this strategy [10][28]. - **Competitive Landscape**: Competition remains stable, with private label products seeing a modest increase of about 1%. The company believes its marketing and innovation-led approach will continue to differentiate it in the market [12][13][16]. Financial Performance and Projections - **Sales Growth Targets**: The company reaffirms its long-term targets of 4% to 5% organic sales growth CAGR and double-digit adjusted EPS growth CAGR. For 2025, it expects low single-digit organic sales growth and 6% to 10% adjusted EBITDA growth [55][56]. - **Productivity Improvements**: The company has achieved significant productivity improvements, with a target of 6% in cost of goods sold for the current year. This is supported by operational efficiencies from consolidating distribution centers [57][59][60]. Additional Important Points - **Expansion Markets**: Approximately 44% of the business is now in expansion markets, with a focus on increasing market share and distribution gains. The company has seen growth in 25 out of 30 states tracked [41][42]. - **Marketing Investments**: The company is increasing its marketing spend to build brand awareness and drive consumer engagement, resulting in a 120 basis point increase in household penetration [48][49]. - **GLP-1 Impact**: Currently, the company has not observed significant impacts from GLP-1 medications on consumer behavior, but it remains vigilant to adapt to any emerging trends [50][51]. - **M&A Strategy**: While the company is open to M&A opportunities, it prioritizes organic growth and remains disciplined in its approach to acquisitions [64][70]. This summary encapsulates the key points discussed during the conference call, highlighting the company's strategic focus, market dynamics, and financial outlook.