```markdown [PART I – FINANCIAL INFORMATION](index=4&type=section&id=Part%20I%20-%20Financial%20Information) [Item 1. Financial Statements](index=4&type=section&id=Item%201.%20Financial%20Statements) This section presents Utz Brands' unaudited consolidated financial statements, including balance sheets, operations, equity, and cash flows, with detailed notes [CONSOLIDATED BALANCE SHEETS](index=4&type=section&id=CONSOLIDATED%20BALANCE%20SHEETS) | Metric | July 3, 2022 (in thousands) | January 2, 2022 (in thousands) | | :----------------------------------- | :-------------------------- | :--------------------------- | | Total assets | $2,774,653 | $2,716,346 | | Total liabilities | $1,326,526 | $1,281,673 | | Total equity | $1,448,127 | $1,434,673 | | Cash and cash equivalents | $20,133 | $41,898 | | Accounts receivable, net | $152,061 | $131,388 | | Inventories | $99,545 | $79,517 | | Property, plant and equipment, net | $338,039 | $303,807 | | Goodwill | $915,490 | $915,438 | | Intangible assets, net | $1,120,154 | $1,142,509 | | Current portion of term debt | $14,255 | $11,414 | | Non-current portion of term debt and revolving credit facility | $877,066 | $830,548 | - Total assets increased by **$58.3 million**, from **$2.716 billion** as of **January 2, 2022**, to **$2.775 billion** as of **July 3, 2022**[17](index=17&type=chunk) - Cash and cash equivalents decreased by **$21.765 million**, from **$41.898 million** as of **January 2, 2022**, to **$20.133 million** as of **July 3, 2022**[17](index=17&type=chunk) [CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)](index=6&type=section&id=CONSOLIDATED%20STATEMENTS%20OF%20OPERATIONS%20AND%20COMPREHENSIVE%20INCOME%20(LOSS)) | Metric (in thousands) | 13 Weeks Ended July 3, 2022 | 13 Weeks Ended July 4, 2021 | 26 Weeks Ended July 3, 2022 | 26 Weeks Ended July 4, 2021 | | :------------------------------------------ | :-------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | | Net sales | $350,147 | $297,919 | $690,914 | $567,101 | | Cost of goods sold | $238,618 | $202,359 | $475,578 | $376,300 | | Gross profit | $111,529 | $95,560 | $215,336 | $190,801 | | Income (loss) from operations | $5,292 | $4,369 | $(17,195) | $13,668 | | Net income (loss) | $2,545 | $16,179 | $(29,353) | $(7,170) | | Net income (loss) attributable to controlling interest | $3,179 | $17,579 | $(14,391) | $(4,950) | | Basic EPS | $0.04 | $0.22 | $(0.18) | $(0.07) | | Diluted EPS | $0.04 | $0.21 | $(0.18) | $(0.07) | - Net sales increased by **17.5%** for the thirteen weeks ended **July 3, 2022**, to **$350.1 million**, and by **21.8%** for the twenty-six weeks ended **July 3, 2022**, to **$690.9 million**, compared to the respective prior year periods[22](index=22&type=chunk)[142](index=142&type=chunk)[152](index=152&type=chunk) - The Company reported a net loss of **$(29.353) million** for the twenty-six weeks ended **July 3, 2022**, a significant decrease from a net loss of **$(7.170) million** in the prior year period[22](index=22&type=chunk) [CONSOLIDATED STATEMENTS OF EQUITY](index=7&type=section&id=CONSOLIDATED%20STATEMENTS%20OF%20EQUITY) | Metric (in thousands) | Balance at January 2, 2022 | Balance at July 3, 2022 | | :-------------------------------- | :------------------------- | :---------------------- | | Total Stockholders' Equity | $679,705 | $701,284 | | Noncontrolling Interest | $754,968 | $746,843 | | Total Equity | $1,434,673 | $1,448,127 | | Accumulated Deficit | $(236,598) | $(259,593) | | Accumulated Other Comprehensive Income | $3,715 | $21,288 | - Total equity increased from **$1.435 billion** as of **January 2, 2022**, to **$1.448 billion** as of **July 3, 2022**[24](index=24&type=chunk) - Accumulated deficit increased from **$(236.598) million** to **$(259.593) million**, reflecting net losses during the period[24](index=24&type=chunk) [CONSOLIDATED STATEMENTS OF CASH FLOWS](index=9&type=section&id=CONSOLIDATED%20STATEMENTS%20OF%20CASH%20FLOWS) | Cash Flow Activity (in thousands) | 26 Weeks Ended July 3, 2022 | 26 Weeks Ended July 4, 2021 | | :-------------------------------- | :-------------------------- | :-------------------------- | | Net cash used in operating activities | $(26,268) | $(44) | | Net cash used in investing activities | $(47,251) | $(70,543) | | Net cash provided by financing activities | $51,754 | $50,501 | | Net decrease in cash and cash equivalents | $(21,765) | $(20,086) | | Cash and cash equivalents at end of period | $20,133 | $26,745 | - Net cash used in operating activities significantly increased to **$(26.268) million** for the twenty-six weeks ended **July 3, 2022**, compared to **$(0.044) million** in the prior year, primarily due to distributor buyouts and inventory build-up[28](index=28&type=chunk)[168](index=168&type=chunk) - Net cash provided by financing activities increased to **$51.754 million**, driven by increased line of credit borrowings, equipment loans, and proceeds from share issuance[28](index=28&type=chunk)[168](index=168&type=chunk) [NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS](index=10&type=section&id=NOTES%20TO%20THE%20CONSOLIDATED%20FINANCIAL%20STATEMENTS) [1. OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES](index=10&type=section&id=1.%20OPERATIONS%20AND%20SUMMARY%20OF%20SIGNIFICANT%20ACCOUNTING%20POLICIES) - The Company, through its subsidiary Utz Quality Foods, LLC, is a premier producer, marketer, and distributor of snack food products since **1921**, selling a full line of salty snack items across most regions of the United States[33](index=33&type=chunk) - The Company reclassified 'gain on disposal of property, plant and equipment, net' and 'gain on sale of routes, net' into a single line item 'gain on sale of assets' for simplified reporting, with no impact on total operating costs, earnings, or equity[32](index=32&type=chunk) - The Company recorded an expense of **$23.0 million** for the twenty-six weeks ended **July 3, 2022**, due to the buyout and termination of contracts with multiple third-party distributors, included in selling and distribution expense[53](index=53&type=chunk) [2. ACQUISITIONS](index=13&type=section&id=2.%20ACQUISITIONS) - On **February 8, 2021**, the Company acquired certain assets of the C.J. Vitner business for approximately **$25.2 million**, funded from cash-on-hand, allocating **$17.9 million** to goodwill[57](index=57&type=chunk) - On **June 7, 2021**, the Company acquired Festida Foods for approximately **$40.3 million**, funded partly by incremental financing, allocating **$11.6 million** to goodwill[58](index=58&type=chunk)[59](index=59&type=chunk) - On **December 6, 2021**, the Company acquired RW Garcia for approximately **$57.8 million**, funded partly by a line of credit draw and cash, allocating **$25.969 million** to goodwill[60](index=60&type=chunk)[61](index=61&type=chunk) [3. INVENTORIES](index=15&type=section&id=3.%20INVENTORIES) | Inventory Type (in thousands) | July 3, 2022 | January 2, 2022 | | :---------------------------- | :----------- | :-------------- | | Finished goods | $55,652 | $43,533 | | Raw materials | $36,613 | $29,428 | | Maintenance parts | $7,280 | $6,556 | | Total inventories | $99,545 | $79,517 | - Total inventories increased by **$20.028 million**, from **$79.517 million** as of **January 2, 2022**, to **$99.545 million** as of **July 3, 2022**[28](index=28&type=chunk)[62](index=62&type=chunk) [4. PROPERTY, PLANT AND EQUIPMENT, NET](index=16&type=section&id=4.%20PROPERTY,%20PLANT%20AND%20EQUIPMENT,%20NET) | PP&E Category (in thousands) | July 3, 2022 | January 2, 2022 | | :--------------------------- | :----------- | :-------------- | | Land | $29,160 | $25,886 | | Buildings | $103,140 | $98,664 | | Machinery and equipment | $216,030 | $214,319 | | Construction-in-progress | $62,008 | $13,745 | | Total PP&E, net | $338,039 | $303,807 | - Property, plant and equipment, net, increased by **$34.232 million**, from **$303.807 million** as of **January 2, 2022**, to **$338.039 million** as of **July 3, 2022**[63](index=63&type=chunk) - The Company purchased a new snack food manufacturing facility in Kings Mountain, North Carolina, for approximately **$38.4 million** on **April 28, 2022**[63](index=63&type=chunk) [5. GOODWILL AND INTANGIBLE ASSETS, NET](index=16&type=section&id=5.%20GOODWILL%20AND%20INTANGIBLE%20ASSETS,%20NET) | Intangible Asset (in thousands) | July 3, 2022 | January 2, 2022 | | :------------------------------ | :----------- | :-------------- | | Goodwill | $915,490 | $915,438 | | Amortizable assets, net | $677,877 | $698,820 | | Non-amortizable assets (Trade names, Route assets) | $442,277 | $443,689 | | Total Intangible assets, net | $1,120,154 | $1,142,509 | - Goodwill increased slightly by **$0.052 million** due to an RW Garcia acquisition adjustment, reaching **$915.490 million** as of **July 3, 2022**[65](index=65&type=chunk) - The Company recorded an impairment expense of **$2.0 million** related to the termination of master distribution rights during the first fiscal quarter of **2022**[66](index=66&type=chunk) [6. NOTES RECEIVABLE](index=17&type=section&id=6.%20NOTES%20RECEIVABLE) | Notes Receivable (in thousands) | July 3, 2022 | January 2, 2022 | | :------------------------------ | :----------- | :-------------- | | Notes receivable from IOs | $25,600 | $27,200 | | Other notes receivable | $200 | $200 | | Total notes receivable | $25,800 | $27,400 | - Notes receivable from independent operators (IOs) decreased from **$27.2 million** to **$25.6 million**, collateralized by the routes[68](index=68&type=chunk) [7. ACCRUED EXPENSES AND OTHER](index=18&type=section&id=7.%20ACCRUED%20EXPENSES%20AND%20OTHER) | Accrued Expense Category (in thousands) | July 3, 2022 | January 2, 2022 | | :-------------------------------------- | :----------- | :-------------- | | Total current accrued expenses and other | $65,819 | $71,280 | | Total non-current accrued expenses and other | $61,714 | $55,838 | | Tax Receivable Agreement liability (non-current) | $25,426 | $24,443 | - Current accrued expenses and other decreased by **$5.461 million**, while non-current accrued expenses and other increased by **$5.876 million**[70](index=70&type=chunk) [8. LONG-TERM DEBT](index=18&type=section&id=8.%20LONG-TERM%20DEBT) | Debt Type (in thousands) | July 3, 2022 | January 2, 2022 | | :----------------------- | :----------- | :-------------- | | Term loan B | $783,261 | $787,236 | | Equipment loans | $49,747 | $26,655 | | ABL facility | $65,824 | $36,000 | | Total long-term debt | $891,321 | $841,962 | | Current portion of term debt | $14,255 | $11,414 | | Non-current portion of term debt and revolving credit facility | $877,066 | $830,548 | | Note payable – IO notes | $24,736 | $24,822 | | Capital lease | $7,876 | $8,166 | | Total notes payable | $37,329 | $34,666 | - Total long-term debt increased by **$49.359 million** to **$891.321 million** as of **July 3, 2022**, primarily due to increased equipment loans and ABL facility draws[71](index=71&type=chunk)[77](index=77&type=chunk)[176](index=176&type=chunk) - Interest expense for the twenty-six weeks ended **July 3, 2022**, was **$19.830 million**, up from **$18.757 million** in the prior year, driven by additional equipment loan draws and higher interest rates[82](index=82&type=chunk)[159](index=159&type=chunk) [9. DERIVATIVE FINANCIAL INSTRUMENTS AND PURCHASE COMMITMENTS](index=20&type=section&id=9.%20DERIVATIVE%20FINANCIAL%20INSTRUMENTS%20AND%20PURCHASE%20COMMITMENTS) - The Company uses interest rate swap contracts to hedge against interest rate fluctuations, with a notional amount accreting to **$500 million** and maturing on **September 30, 2026**[83](index=83&type=chunk) - A gain on remeasurement of warrant liability of **$5.760 million** was recognized for the thirteen weeks ended **July 3, 2022**, and **$7.704 million** for the twenty-six weeks ended **July 3, 2022**[85](index=85&type=chunk)[110](index=110&type=chunk) - Outstanding purchase commitments for key ingredients totaled **$93.2 million** as of **July 3, 2022**, with recorded losses of **$1.0 million** for the twenty-six weeks ended **July 3, 2022**[86](index=86&type=chunk) [10. FAIR VALUE MEASUREMENTS](index=21&type=section&id=10.%20FAIR%20VALUE%20MEASUREMENTS) | Financial Instrument (in thousands) | July 3, 2022 (Level II) | January 2, 2022 (Level II) | | :---------------------------------- | :---------------------- | :------------------------- | | Interest rate swaps (assets) | $28,497 | $2,208 | | Commodity contracts (liabilities) | $1,510 | $54 | | Private placement warrants (liabilities) | $38,520 | $46,224 | | Debt (liabilities) | $891,321 | $841,962 | - The fair value of interest rate swaps (assets) significantly increased from **$2.208 million** to **$28.497 million**, while private placement warrants (liabilities) decreased from **$46.224 million** to **$38.520 million**[90](index=90&type=chunk) [11. CONTINGENCIES](index=22&type=section&id=11.%20CONTINGENCIES) - The Company settled a sales and use tax audit with the Commonwealth of Pennsylvania for **$0.9 million** on **January 7, 2022**[92](index=92&type=chunk) - The Company partially guarantees loans made to IOs by Cadence Bank (**$1.8 million** outstanding) and Bank of America (**$28.6 million** outstanding off-balance sheet), with a maximum guarantee of **25%** of the outstanding loan balance[93](index=93&type=chunk)[94](index=94&type=chunk) - Loans guaranteed to IOs by M&T Bank totaled **$4.1 million** as of **July 3, 2022**, included on the consolidated balance sheets[96](index=96&type=chunk) [12. ACCUMULATED OTHER COMPREHENSIVE INCOME](index=23&type=section&id=12.%20ACCUMULATED%20OTHER%20COMPREHENSIVE%20INCOME) | Metric (in thousands) | July 3, 2022 | January 2, 2022 | | :-------------------------------------- | :----------- | :-------------- | | Total accumulated other comprehensive income | $34,535 | $3,715 | | Balance attributable to controlling interest | $21,288 | $3,715 | | Unrealized gain on cash flow hedges (26 weeks) | $30,820 | $1,429 | - Total accumulated other comprehensive income increased significantly from **$3.7 million** as of **January 2, 2022**, to **$34.5 million** as of **July 3, 2022**, primarily due to unrealized gains from cash flow hedges[97](index=97&type=chunk) [13. SUPPLEMENTARY CASH FLOW INFORMATION](index=23&type=section&id=13.%20SUPPLEMENTARY%20CASH%20FLOW%20INFORMATION) | Metric (in thousands) | 26 Weeks Ended July 3, 2022 | 26 Weeks Ended July 4, 2021 | | :-------------------- | :-------------------------- | :-------------------------- | | Cash paid for interest | $18,515 | $17,391 | | Refunds related to income taxes | $4,562 | $182 | | Payments for income taxes | $2,475 | $3,116 | | Dividends accrued | $4,360 | $3,826 | - Cash paid for interest increased to **$18.515 million** for the twenty-six weeks ended **July 3, 2022**, from **$17.391 million** in the prior year[98](index=98&type=chunk) - Income tax refunds significantly increased to **$4.562 million**, while payments for income taxes decreased to **$2.475 million**[98](index=98&type=chunk) [14. INCOME TAXES](index=24&type=section&id=14.%20INCOME%20TAXES) | Metric | 13 Weeks Ended July 3, 2022 | 13 Weeks Ended July 4, 2021 | 26 Weeks Ended July 3, 2022 | 26 Weeks Ended July 4, 2021 | | :-------------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | | Income tax (benefit) expense (in millions) | $(2.9) | $0.4 | $(0.1) | $1.4 | | Effective tax rate | 894.8% | 2.5% | 0.3% | (24.8)% | | Effective tax rate (before discrete items) | 9.5% | N/A | (5.0)% | N/A | - The Company recorded an income tax benefit of **$(2.9) million** for the thirteen weeks and **$(0.1) million** for the twenty-six weeks ended **July 3, 2022**, compared to income tax expense in the prior year periods[100](index=100&type=chunk) - The effective tax rates were significantly impacted by the partnership structure of UBH, state taxes, warrant liabilities, and a discrete tax benefit of **$(2.4) million** for the thirteen weeks and **$(1.9) million** for the twenty-six weeks ended **July 3, 2022**, due to updated state nexus and apportionment estimates[100](index=100&type=chunk) [15. WARRANTS](index=25&type=section&id=15.%20WARRANTS) - As of **July 3, 2022**, there were **7,200,000** Private Placement Warrants outstanding, which are accounted for as derivative liabilities at fair value[107](index=107&type=chunk)[109](index=109&type=chunk) - The remeasurement of the warrant liability resulted in a gain of **$5.8 million** for the thirteen weeks and **$7.7 million** for the twenty-six weeks ended **July 3, 2022**[110](index=110&type=chunk) [16. BUSINESS RISK](index=26&type=section&id=16.%20BUSINESS%20RISK) - The Company continues to experience higher demand for its products and has increased production and distribution activities in response to the COVID-19 pandemic[111](index=111&type=chunk) - Significant inflationary pressures on input and supply chain costs have led the Company to implement pricing actions[111](index=111&type=chunk) [17. EQUITY](index=26&type=section&id=17.%20EQUITY) | Stock Class | Shares Authorized | Shares Issued and Outstanding (July 3, 2022) | Shares Issued and Outstanding (January 2, 2022) | | :-------------------------- | :---------------- | :------------------------------------------- | :-------------------------------------------- | | Class A Common Stock | 1,000,000,000 | 80,812,835 | 77,644,645 | | Class V Common Stock | 61,249,000 | 59,349,000 | 59,349,000 | - The number of Class A Common Stock shares issued and outstanding increased from **77,644,645** to **80,812,835** between **January 2, 2022**, and **July 3, 2022**[112](index=112&type=chunk) [18. EARNINGS (LOSS) PER SHARE](index=26&type=section&id=18.%20EARNINGS%20(LOSS)%20PER%20SHARE) | EPS Metric | 13 Weeks Ended July 3, 2022 | 13 Weeks Ended July 4, 2021 | 26 Weeks Ended July 3, 2022 | 26 Weeks Ended July 4, 2021 | | :------------------------------------------ | :-------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | | Basic EPS | $0.04 | $0.22 | $(0.18) | $(0.07) | | Diluted EPS | $0.04 | $0.21 | $(0.18) | $(0.07) | | Weighted average Class A Common Stock shares, basic | 80,171,174 | 76,500,488 | 79,371,789 | 76,213,746 | | Diluted weighted average shares (13 weeks) | 81,510,936 | 81,732,056 | N/A | N/A | | Anti-dilutive securities excluded (26 weeks) | N/A | N/A | 1,691,247 | 5,677,087 | - Basic and diluted EPS for the twenty-six weeks ended **July 3, 2022**, was **$(0.18)**, reflecting a net loss attributable to controlling interest of **$(14.391) million**[119](index=119&type=chunk) - Anti-dilutive securities, including warrants, RSUs, PSUs, and stock options, were excluded from the diluted EPS calculation for the twenty-six weeks ended **July 3, 2022**[119](index=119&type=chunk) [19. SUBSEQUENT EVENTS](index=29&type=section&id=19.%20SUBSEQUENT%20EVENTS) - The Company reviewed events subsequent to the balance sheet date and found no events requiring recognition or disclosure[121](index=121&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=29&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section provides management's perspective on the Company's financial condition and results of operations, highlighting key developments, trends, and significant items affecting comparability [Overview](index=29&type=section&id=Overview) - Utz Brands, Inc. is a leading U.S. manufacturer of branded salty snacks, with a portfolio of iconic brands and a national distribution network, founded in **1921**[124](index=124&type=chunk) - The Company is the second-largest producer of branded salty snacks in its core geographies based on **2021** retail sales[124](index=124&type=chunk) [Key Developments and Trends](index=30&type=section&id=Key%20Developments%20and%20Trends) - The U.S. salty snacks category is attractive and growing, with retail sales increasing at approximately a **7.1%** compound annual growth rate from **2018** through **2021**[126](index=126&type=chunk) - For the thirteen weeks ended **July 3, 2022**, U.S. retail sales for salty snacks increased by **14.8%**, and the Company's retail sales increased by **16.0%** year-over-year[127](index=127&type=chunk) - The Company's weighted average interest rate for the twenty-six weeks ended **July 3, 2022**, was **4.1%**, up from **3.7%** in the prior year, with **$849.1 million** in variable rate indebtedness[131](index=131&type=chunk)[132](index=132&type=chunk) [Recent Developments and Significant Items Affecting Comparability](index=31&type=section&id=Recent%20Developments%20and%20Significant%20Items%20Affecting%20Comparability) - The Company completed three acquisitions in **2021**: Vitner's (**$25.2 million**), Festida Foods (**$40.3 million**), and RW Garcia (**$57.8 million**), expanding its product offering and distribution[134](index=134&type=chunk)[135](index=135&type=chunk)[136](index=136&type=chunk) - The Company expects gross input cost inflation (commodities, labor, transportation) to be in the **mid to high-teens** in fiscal **2022**, which it aims to offset through efficiencies and price increases[137](index=137&type=chunk) - The mix of Independent Operators (IOs) in the DSD distribution network increased to approximately **91%** as of **July 3, 2022**, from **83%** as of **July 4, 2021**, with substantially all remaining conversions anticipated by the end of fiscal year **2022**[139](index=139&type=chunk) [Results of Operations](index=33&type=section&id=Results%20of%20Operations) | Metric (in millions) | 13 Weeks Ended July 3, 2022 | 13 Weeks Ended July 4, 2021 | 26 Weeks Ended July 3, 2022 | 26 Weeks Ended July 4, 2021 | | :------------------------------------------ | :-------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | | Net sales | $350.1 | $297.9 | $690.9 | $567.1 | | Gross profit | $111.5 | $95.6 | $215.3 | $190.8 | | Gross profit margin | 31.9% | 32.1% | 31.2% | 33.6% | | Selling, distribution, and administrative expenses | $107.6 | $93.5 | $234.3 | $180.1 | | Income (loss) from operations | $5.3 | $4.4 | $(17.2) | $13.7 | | Net income (loss) | $2.5 | $16.2 | $(29.4) | $(7.2) | | Adjusted EBITDA | $42.2 | $35.7 | $78.7 | $73.7 | | Adjusted EBITDA as a % of Net Sales | 12.1% | 12.0% | 11.4% | 13.0% | - Net sales increased by **17.5%** (13 weeks) and **21.8%** (26 weeks) year-over-year, primarily due to favorable price/mix (**13.0%** and **11.3%** respectively) and acquisitions[142](index=142&type=chunk)[152](index=152&type=chunk) - Gross profit margin declined to **31.9%** (13 weeks) and **31.2%** (26 weeks) due to commodity and wage inflation, and higher depreciation, partially offset by pricing and productivity actions[147](index=147&type=chunk)[156](index=156&type=chunk) - Selling, distribution, and administrative expenses increased by **$54.1 million** for the twenty-six weeks ended **July 3, 2022**, largely due to **$23.0 million** in distributor buyout costs and higher delivery costs[157](index=157&type=chunk) [Liquidity and Capital Resources](index=37&type=section&id=Liquidity%20and%20Capital%20Resources) | Cash Flow Activity (in thousands) | 26 Weeks Ended July 3, 2022 | 26 Weeks Ended July 4, 2021 | | :-------------------------------- | :-------------------------- | :-------------------------- | | Net cash used in operating activities | $(26,268) | $(44) | | Net cash used in investing activities | $(47,251) | $(70,543) | | Net cash provided by financing activities | $51,754 | $50,501 | | Net decrease in cash and cash equivalents | $(21,765) | $(20,086) | | Cash and cash equivalents at end of period | $20,133 | $26,745 | - Net cash used in operating activities increased significantly to **$(26.3) million** for the twenty-six weeks ended **July 3, 2022**, primarily due to **$20.2 million** in distributor buyout payments and increased inventory[168](index=168&type=chunk) - Net cash provided by financing activities was **$51.8 million**, driven by a **$29.8 million** increase in the line of credit, **$28.9 million** in equipment loan borrowings, and **$28.0 million** from share issuance[168](index=168&type=chunk) - As of **July 3, 2022**, **$65.8 million** was outstanding under the ABL facility, with **$82.8 million** available for borrowing[170](index=170&type=chunk) [Off-Balance Sheet Arrangements](index=41&type=section&id=Off-Balance%20Sheet%20Arrangements) - The Company had **$93.2 million** in outstanding purchase commitments for key ingredients as of **July 3, 2022**, and recorded **$1.0 million** in purchase commitment losses for the twenty-six weeks ended **July 3, 2022**[182](index=182&type=chunk) - The Company partially guarantees IO loans from Cadence Bank (**$1.8 million** outstanding) and Bank of America (**$28.6 million** outstanding), which are off-balance sheet arrangements[183](index=183&type=chunk)[184](index=184&type=chunk) [New Accounting Pronouncements](index=42&type=section&id=New%20Accounting%20Pronouncements) - The Company is evaluating the impact of ASU No. **2020-04** (Reference Rate Reform) and ASU No. **2016-13** (Credit Losses) on its financial statements, with the latter effective in **2023**[55](index=55&type=chunk)[56](index=56&type=chunk) [Application of Critical Accounting Policies and Estimates](index=42&type=section&id=Application%20of%20Critical%20Accounting%20Policies%20and%20Estimates) - Revenue recognition involves significant management judgment for variable consideration, including discounts, returns, and trade promotions, with reserves of **$33.0 million** as of **July 3, 2022**[50](index=50&type=chunk)[190](index=190&type=chunk) - The Company tests goodwill and indefinite-lived intangible assets for impairment at least annually, with no quantitative impairment test deemed necessary through **July 3, 2022**, based on qualitative assessment[194](index=194&type=chunk)[197](index=197&type=chunk) - Income tax accounting requires estimates for current and deferred tax assets/liabilities, with a valuation allowance recorded against certain deferred tax assets due to uncertainty of future realization[101](index=101&type=chunk)[198](index=198&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=45&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) This section refers to the Company's Annual Report on Form 10-K for detailed market risk disclosures, noting no material changes since **January 2, 2022** - The Company's exposures to market risk have not materially changed since **January 2, 2022**, as detailed in its Annual Report on Form **10-K**[204](index=204&type=chunk) [Item 4. Controls and Procedures](index=45&type=section&id=Item%204.%20Controls%20and%20Procedures) This section confirms the effectiveness of the Company's disclosure controls and procedures and reports no material changes in internal control over financial reporting - The Chief Executive Officer and Chief Financial Officer concluded that the Company's disclosure controls and procedures are effective at a level of reasonable assurance as of **July 3, 2022**[205](index=205&type=chunk) - There were no material changes in the Company's internal control over financial reporting during the most recent fiscal quarter[206](index=206&type=chunk) [PART II – OTHER INFORMATION](index=45&type=section&id=Part%20II%20-%20Other%20Information) [Item 1. Legal Proceedings](index=45&type=section&id=Item%201.%20Legal%20Proceedings) This section states that the Company is involved in routine litigation but does not expect any currently pending legal proceedings to have a material adverse effect on its business or financial condition - The Company is involved in litigation incidental to its business, but management does not believe any currently pending legal proceeding will have a material adverse effect on its financial condition, results of operations, or cash flows[207](index=207&type=chunk) [Item 1A. Risk Factors](index=46&type=section&id=Item%201A.%20Risk%20Factors) This section refers to the risk factors detailed in the Company's Annual Report on Form 10-K, confirming that no material changes have occurred since its filing - There have been no material changes to the Company's risk factors since the filing of its Annual Report on Form **10-K** on **March 3, 2022**[208](index=208&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=46&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) This section reports that there were no unregistered sales of equity securities or use of proceeds during the period - There were no unregistered sales of equity securities or use of proceeds to report[209](index=209&type=chunk) [Item 3. Defaults Upon Senior Securities](index=46&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) This section indicates that there were no defaults upon senior securities during the reporting period - There were no defaults upon senior securities to report[210](index=210&type=chunk) [Item 4. Mine Safety Disclosures](index=46&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This section states that there are no mine safety disclosures required for the Company - There are no mine safety disclosures to report[211](index=211&type=chunk) [Item 5. Other Information](index=46&type=section&id=Item%205.%20Other%20Information) This section indicates that there is no other information to report - There is no other information to report[212](index=212&type=chunk) [Item 6. Exhibits](index=46&type=section&id=Item%206.%20Exhibits) This section lists the exhibits furnished as part of the report, including organizational documents, incentive plans, certifications, and XBRL taxonomy documents - The report includes various exhibits such as the Certificate of Incorporation, Bylaws, **2020** Omnibus Equity Incentive Plan, CEO/CFO certifications, and Inline XBRL documents[215](index=215&type=chunk) [Signatures](index=46&type=section&id=Signatures) This section contains the official signatures, confirming the due authorization and filing of the report - The report was duly signed on **August 11, 2022**, by Ajay Kataria, Executive Vice President, Chief Financial Officer of Utz Brands, Inc[219](index=219&type=chunk) ```

Financial Data and Key Metrics Changes - The company reported record first quarter net sales of nearly $341 million, representing a 26.6% increase year-over-year, with organic net sales growth of 20.7% [9][48] - Adjusted gross profit grew 11%, while adjusted EBITDA declined 4% due to supply chain cost increases [25][50] - Adjusted EBITDA margins contracted to 10.7% of sales, impacted by higher input costs and a 130 basis point effect from route conversions [50][61] Business Line Data and Key Metrics Changes - Power brand sales increased 20.1%, outperforming the salty snacks category growth of 13.4% [30] - The two largest brands, Utz and ON THE BORDER, grew 22% and 35% respectively, with ON THE BORDER showing strong growth driven by distribution and pricing strategies [30][106] - Potato chip growth was nearly double the category growth, while tortilla chip growth was led by ON THE BORDER, growing nearly three times the category growth [32] Market Data and Key Metrics Changes - The company gained market share in the salty snacks category, with retail sales over the last 52 weeks reaching $1.45 billion [14][11] - The private label threat in the salty snacks category has declined, with private label dollar share decreasing for the last 16 12-week periods [12][116] - The company is under-distributed compared to larger peers, indicating significant growth opportunities across the U.S. [13][14] Company Strategy and Development Direction - The company is focused on enhancing margins through pricing actions and productivity initiatives, with expectations of mid-to-high teens percentage gross input cost inflation for fiscal 2022 [15][24] - Strategic investments in infrastructure and technology are aimed at supporting profitable growth and improving operational flexibility [21][20] - The company plans to continue expanding distribution in underpenetrated markets and optimizing its product mix to enhance margins over time [29][39] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the resilience of the salty snacks category, noting strong consumer demand and better-than-expected price elasticity [10][9] - The company raised its net sales outlook for the year, expecting total net sales to increase by 10% to 13% and organic net sales to grow by 8% to 10% [23][71] - Management acknowledged the challenges posed by inflation and supply chain issues but remains optimistic about long-term growth prospects [63][70] Other Important Information - The company has made significant acquisitions to strengthen its brand portfolio and support demand, with a focus on integrating these acquisitions effectively [54][56] - Cash flow used in operations was impacted by working capital and acquisition-related expenses, with liquidity at approximately $96 million [53][52] - The company is committed to reducing leverage and improving free cash flow conversion, targeting a net leverage ratio closer to its long-term goal by the end of fiscal 2023 [55][56] Q&A Session Summary Question: Guidance on organic revenue growth and pricing - Management raised organic revenue growth guidance from 4%-6% to 8%-10%, anticipating lower volumes in the second half due to SKU rationalization and market dynamics [88][92] Question: Performance of ON THE BORDER brand - ON THE BORDER brand experienced 35% growth, driven by distribution velocity and pricing, with expectations for continued strong double-digit growth [103][106] Question: Impact of private label competition - Private label share in the salty snacks category is low at 4.6% and has been declining, with management confident in maintaining pricing power against private label products [116][118] Question: Free cash flow outlook - The company expects to generate $30 million to $40 million in free cash flow for the year, excluding acquisition-related expenses [122][124] Question: Input cost inflation details - Significant inflation is observed in cooking oils, wheat flour, and packaging, with the company about 80% covered for the remainder of 2022 [128][130]

OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Utz Brands, Inc. (Exact name of registrant as specified in its charter) UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended April 3, 2022 Delaware 001-38686 85-2751850 (State or other jurisdiction of incorporation) (Commission File N ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended January 2, 2022 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission file number: 001-38686 Utz Brands, Inc. (Exact name of registrant as specified in its charter) (State or other jurisdiction of incorporation) Delaware 85-2751850 ...

Utz Brands, Inc. (NYSE:UTZ) Q4 2021 Earnings Conference Call March 3, 2022 8:30 AM ET Company Participants Kevin Powers - IR Ajay Kataria - CFO Dylan Lissette - CEO Cary Devore - COO Conference Call Participants Andrew Lazar - Barclays Peter Galbo - Bank of America Michael Lavery - Piper Sandler Ben Bienvenu - Stephens Robert Moskow - Credit Suisse Stephen Lang - Truist Securities Operator Good morning and welcome to the Utz Brands Inc Fourth Quarter 2021 Earnings Conference Call. Kevin Powers, Head of Inv ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended October 3, 2021 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Utz Brands, Inc. (Exact name of registrant as specified in its charter) (Former name or former address, if changed since last report) Securities registered pursuant ...

Utz Brands, Inc. (NYSE:UTZ) Q3 2021 Earnings Conference Call November 11, 2021 8:30 AM ET Company Participants Kevin Powers - Head of Investor Relations Dylan Lissette - Chief Executive Officer Ajay Kataria - Chief Financial Officer Cary Devore - Chief Operating Officer Conference Call Participants Andrew Lazar - Barclays Erica Eiler - Oppenheimer Michael Lavery - Piper Sandler Jason English - Goldman Sachs Bill Chappell - Truist Securities Ben Bienvenu - Stephens Operator Thank you for standing by. My name ...

Utz Brands, Inc. (NYSE:UTZ) Q2 2021 Earnings Conference Call August 12, 2021 8:30 AM ET Company Participants Kevin Powers - Head of IR Dylan Lissette - CEO Cary Devore - CFO Conference Call Participants Rupesh Parikh - Oppenheimer Michael Lavery - Piper Sandler Abigail Lake - Citigroup Robert Moskow - Credit Suisse Operator Ladies and gentlemen, thank you for standing by and welcome to the Utz Brands Inc. Second Quarter 2021 Earnings Conference Call. At this time all participants are in a listen-only mode. ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended July 4, 2021 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Utz Brands, Inc. (Exact name of registrant as specified in its charter) Delaware 001-38686 85-2751850 (State or other jurisdiction of incorporation) (Commission File Nu ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended April 4, 2021 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Utz Brands, Inc. (Exact name of registrant as specified in its charter) | | | (State or other jurisdiction of incorporation) (Commission File Number) (IRS Employer Ide ...