Utz Brands, Inc. 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 2, 2023 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to (Exact name of registrant as specified in its charter) Delaware 001-38686 85-2751850 (State or other jurisdiction of incorporation) (Commission File N ...

Utz Brands, Inc. (NYSE:UTZ) Q4 2022 Earnings Conference Call March 2, 2023 8:30 AM ET Company Participants Kevin Powers – Senior Vice President-Investor Relations Howard Friedman – Chief Executive Officer Ajay Kataria – Executive Vice President and Chief Financial Officer Cary Devore – Executive Vice President and Chief Operating Officer Conference Call Participants Andrew Lazar – Barclays Michael Lavery – Piper Sandler Rupesh Parikh – Oppenheimer Peter Galbo – Bank of America Jason English – Goldman Sachs ...

Utz Brands, Inc. (NYSE:UTZ) Q3 2022 Earnings Conference Call November 10, 2022 8:30 AM ET Company Participants Kevin Powers - Head of Investor Relations Dylan Lissette - Chief Executive Officer Ajay Kataria - EVP & Chief Financial Officer Cary Devore - EVP & Chief Operating Officer Conference Call Participants Andrew Lazar - Barclays Jason English - Goldman Sachs Robert Moskow - Credit Suisse Michael Lavery - Piper Sandler Bill Chappell - Truist Securities Jim Salera - Stephens Peter Galbo - Bank of America ...

PART I – FINANCIAL INFORMATION [Item 1. Financial Statements](index=4&type=section&id=Item%201.%20Financial%20Statements) Presents Utz Brands, Inc.'s unaudited consolidated financial statements for Q3 2022 and 2021, including balance sheets, income, equity, and cash flows [Consolidated Balance Sheets](index=4&type=section&id=CONSOLIDATED%20BALANCE%20SHEETS) Summarizes the Company's financial position, detailing assets, liabilities, and equity as of October 2, 2022, and January 2, 2022 | ASSETS (in thousands) | October 2, 2022 | January 2, 2022 | | :---------------------- | :-------------- | :-------------- | | Total current assets | $347,154 | $277,904 | | Total non-current assets| $2,472,280 | $2,438,442 | | **Total assets** | **$2,819,434** | **$2,716,346** | | LIABILITIES AND EQUITY (in thousands) | October 2, 2022 | January 2, 2022 | | :---------------------- | :-------------- | :-------------- | | Total current liabilities | $206,807 | $188,020 | | Total non-current liabilities | $1,149,129 | $1,093,653 | | **Total liabilities** | **$1,355,936** | **$1,281,673** | | Total equity | $1,463,498 | $1,434,673 | | **Total liabilities and equity** | **$2,819,434** | **$2,716,346** | - Total assets increased by **$103.088 million (3.79%)** from January 2, 2022, to October 2, 2022, primarily driven by increases in current assets and property, plant and equipment, net[17](index=17&type=chunk) - Total liabilities increased by **$74.263 million (5.79%)** over the same period, mainly due to higher current and non-current term debt and revolving credit facility balances[17](index=17&type=chunk) [Consolidated Statements of Operations and Comprehensive Income](index=6&type=section&id=CONSOLIDATED%20STATEMENTS%20OF%20OPERATIONS%20AND%20COMPREHENSIVE%20INCOME) Details the Company's financial performance, including net sales, gross profit, and net income (loss) for the reported periods | (in thousands, except share information) | Thirteen weeks ended Oct 2, 2022 | Thirteen weeks ended Oct 3, 2021 | Thirty-nine weeks ended Oct 2, 2022 | Thirty-nine weeks ended Oct 3, 2021 | | :--------------------------------------- | :------------------------------- | :------------------------------- | :---------------------------------- | :---------------------------------- | | Net sales | $362,818 | $312,680 | $1,053,732 | $879,781 | | Gross profit | $118,273 | $102,627 | $333,609 | $293,428 | | Income (loss) from operations | $15,005 | $2,875 | $(2,190) | $16,543 | | Net income (loss) | $1,485 | $31,350 | $(27,868) | $24,180 | | Net (loss) income attributable to controlling interest | $(888) | $33,252 | $(15,279) | $28,302 | | Basic EPS | $(0.01) | $0.43 | $(0.19) | $0.36 | | Diluted EPS | $(0.01) | $0.40 | $(0.19) | $0.34 | - Net sales increased by **16.0%** for the thirteen weeks and **19.8%** for the thirty-nine weeks ended October 2, 2022, compared to the prior year periods, primarily due to favorable price/mix and acquisitions[22](index=22&type=chunk)[138](index=138&type=chunk)[148](index=148&type=chunk) - The Company reported a net loss attributable to controlling interest of **$(0.888) million** for the thirteen weeks and **$(15.279) million** for the thirty-nine weeks ended October 2, 2022, a significant decline from net income in the prior year periods, largely due to a loss on remeasurement of warrant liability and increased interest expense[22](index=22&type=chunk)[146](index=146&type=chunk)[155](index=155&type=chunk) [Consolidated Statements of Equity](index=7&type=section&id=CONSOLIDATED%20STATEMENTS%20OF%20EQUITY) Outlines changes in the Company's equity, including total stockholders' equity and noncontrolling interest | (in thousands) | Balance at January 2, 2022 | Balance at October 2, 2022 | | :------------- | :------------------------- | :------------------------- | | Total stockholders' equity | $679,705 | $709,164 | | Noncontrolling interest | $754,968 | $754,334 | | Total equity | $1,434,673 | $1,463,498 | - Total equity increased by **$28.825 million** from January 2, 2022, to October 2, 2022, primarily driven by an increase in additional paid-in capital and accumulated other comprehensive income, partially offset by an accumulated deficit[24](index=24&type=chunk) [Consolidated Statements of Cash Flows](index=9&type=section&id=CONSOLIDATED%20STATEMENTS%20OF%20CASH%20FLOWS) Presents the Company's cash inflows and outflows from operating, investing, and financing activities | (in thousands) | Thirty-nine weeks ended Oct 2, 2022 | Thirty-nine weeks ended Oct 3, 2021 | | :------------- | :---------------------------------- | :---------------------------------- | | Net cash provided by operating activities | $8,071 | $4,282 | | Net cash used in investing activities | $(52,940) | $(78,081) | | Net cash provided by financing activities | $54,776 | $52,929 | | Net increase (decrease) in cash and cash equivalents | $9,907 | $(20,870) | | Cash and cash equivalents at end of period | $51,805 | $25,961 | - Net cash provided by operating activities increased to **$8.071 million** for the thirty-nine weeks ended October 2, 2022, from $4.282 million in the prior year, driven by improved net working capital management, despite a larger cash outflow for inventory build[28](index=28&type=chunk)[165](index=165&type=chunk) - Net cash used in investing activities decreased to **$52.940 million** from $78.081 million, primarily due to lower acquisition spending in 2022 compared to 2021, offset by significant property and equipment purchases[28](index=28&type=chunk)[165](index=165&type=chunk) - Net cash provided by financing activities increased to **$54.776 million**, mainly from increased line of credit borrowings, equipment loans, and proceeds from share issuance, offsetting debt repayments and dividend payments[28](index=28&type=chunk)[165](index=165&type=chunk) [Notes to the Consolidated Financial Statements](index=10&type=section&id=NOTES%20TO%20THE%20CONSOLIDATED%20FINANCIAL%20STATEMENTS) Provides detailed explanations and disclosures supporting the consolidated financial statements [1. Operations and Summary of Significant Accounting Policies](index=10&type=section&id=1.OPERATIONS%20AND%20SUMMARY%20OF%20SIGNIFICANT%20ACCOUNTING%20POLICIES) Describes the Company's business operations and outlines the key accounting policies applied in preparing the financial statements - The Company, through its subsidiary Utz Quality Foods, LLC, is a premier producer, marketer, and distributor of salty snack products since 1921, selling a full line of items across most regions of the United States[33](index=33&type=chunk) - The Company adopted ASU No. 2020-04, Reference Rate Reform (Topic 848), in September 2022, modifying contracts from LIBOR to Term SOFR Screen Rate (SOFR) for its revolving credit facility, Term Loan B, and interest rate hedge, with no material impact on debt or hedge instruments[55](index=55&type=chunk) - The Company is evaluating ASU No. 2016-13, Financial Instruments-Credit Losses (Topic 326), effective for fiscal years beginning after December 15, 2022, which requires measuring impairment of financial instruments based on expected losses[56](index=56&type=chunk) [2. Acquisitions](index=13&type=section&id=2.%20ACQUISITIONS) Details the Company's acquisition activities, including purchase prices and their impact on financial reporting - In 2021, Utz Brands, Inc. completed three significant acquisitions: Vitner's (**$25.2 million**), Festida Foods (**$40.3 million**), and RW Garcia (**$57.9 million**)[57](index=57&type=chunk)[58](index=58&type=chunk)[59](index=59&type=chunk) - The RW Garcia acquisition included a manufacturing facility for an additional **$6.0 million**, and its purchase price allocation was not finalized as of October 2, 2022[59](index=59&type=chunk)[60](index=60&type=chunk) [3. Inventories](index=14&type=section&id=3.INVENTORIES) Provides a breakdown of the Company's inventory components and their valuation | (in thousands) | As of October 2, 2022 | As of January 2, 2022 | | :------------- | :-------------------- | :-------------------- | | Finished goods | $60,282 | $43,533 | | Raw materials | $39,457 | $29,428 | | Maintenance parts | $7,643 | $6,556 | | Total inventories | $107,382 | $79,517 | - Total inventories increased by **$27.865 million (35.04%)** from January 2, 2022, to October 2, 2022, primarily driven by increases in finished goods and raw materials[61](index=61&type=chunk) [4. Property, Plant and Equipment, Net](index=15&type=section&id=4.PROPERTY,%20PLANT%20AND%20EQUIPMENT,%20NET) Details the Company's fixed assets, including gross amounts, accumulated depreciation, and net book value | (in thousands) | As of October 2, 2022 | As of January 2, 2022 | | :------------- | :-------------------- | :-------------------- | | Total gross property, plant and equipment | $422,645 | $359,055 | | Less: accumulated depreciation | $(88,737) | $(55,248) | | Property, plant and equipment, net | $333,908 | $303,807 | - Net property, plant and equipment increased by **$30.101 million (9.91%)** from January 2, 2022, to October 2, 2022, largely due to the purchase of a new snack food manufacturing facility in Kings Mountain, North Carolina for **$38.4 million** in April 2022[62](index=62&type=chunk) - Depreciation expense for the thirty-nine weeks ended October 2, 2022, was **$37.1 million**, up from $31.8 million in the prior year period[63](index=63&type=chunk) - The Company recorded **$2.7 million** in impairment related to property and equipment damaged by a natural disaster and received **$3.9 million** in insurance proceeds for property damage and **$4.0 million** for business interruption insurance, reducing cost of goods sold[64](index=64&type=chunk) [5. Goodwill and Intangible Assets, Net](index=15&type=section&id=5.GOODWILL%20AND%20INTANGIBLE%20ASSETS,%20NET) Reports the Company's goodwill and intangible assets, including amortizable and non-amortizable categories | (in thousands) | As of October 2, 2022 | As of January 2, 2022 | | :------------- | :-------------------- | :-------------------- | | Goodwill | $915,295 | $915,438 | | Amortizable assets, net | $668,460 | $698,820 | | Not subject to amortization | $441,342 | $443,689 | | Intangible assets, net | $1,109,802 | $1,142,509 | - Goodwill remained relatively stable, with a slight adjustment of **$(0.143) million** related to the RW Garcia acquisition[65](index=65&type=chunk) - Intangible assets, net, decreased by **$32.707 million**, primarily due to accumulated amortization and a **$2.0 million** impairment expense related to the termination of master distribution rights in Q1 2022[66](index=66&type=chunk) - Amortization expense for intangibles was **$28.3 million** for the thirty-nine weeks ended October 2, 2022, compared to $27.3 million in the prior year period[67](index=67&type=chunk) [6. Notes Receivable](index=16&type=section&id=6.%20NOTES%20RECEIVABLE) Details the Company's notes receivable, primarily from independent operators (IOs) | (in thousands) | As of October 2, 2022 | As of January 2, 2022 | | :------------- | :-------------------- | :-------------------- | | Notes receivable from IOs | $23,300 | $27,200 | | Other notes receivable | $200 | $200 | | Total notes receivable | $23,500 | $27,400 | - Notes receivable from independent operators (IOs) decreased from **$27.2 million** to **$23.3 million**, reflecting the ongoing program to sell Company-managed DSD distribution routes to IOs[68](index=68&type=chunk) [7. Accrued Expenses and Other](index=17&type=section&id=7.%20ACCURRED%20EXPENSES%20AND%20OTHER) Provides a breakdown of current and non-current accrued expenses and other liabilities | (in thousands) | As of October 2, 2022 | As of January 2, 2022 | | :------------- | :-------------------- | :-------------------- | | Current accrued expenses and other | $76,447 | $71,280 | | Non-current accrued expenses and other | $64,687 | $55,838 | | Total accrued expenses and other | $141,134 | $127,118 | - Current accrued expenses increased by **$5.167 million**, driven by higher accrued compensation and benefits and accrued dividends and distributions, partially offset by a decrease in acquisition tax consideration and short-term interest rate hedge liability[69](index=69&type=chunk) - Non-current accrued expenses increased by **$8.849 million**, primarily due to higher right-of-use liability and Tax Receivable Agreement liability[69](index=69&type=chunk) [8. Long-Term Debt](index=17&type=section&id=8.LONG-TERM%20DEBT) Details the Company's long-term debt obligations, including term loans, equipment loans, and credit facilities | Debt (in thousands) | October 2, 2022 | January 2, 2022 | | :------------------ | :-------------- | :-------------- | | Term Loan B | $781,273 | $787,236 | | Equipment loans | $53,068 | $26,655 | | ABL facility | $76,390 | $36,000 | | Total long-term debt| $902,359 | $841,962 | | Long term portion of term debt and financing obligations | $887,270 | $830,548 | - Total long-term debt increased by **$60.397 million** from January 2, 2022, to October 2, 2022, primarily due to increased equipment loans and ABL facility borrowings[76](index=76&type=chunk) - The ABL facility credit limit was increased to **$175.0 million** and its interest rate benchmark was replaced from LIBOR to SOFR in September 2022[70](index=70&type=chunk) - Subsequent to October 2, 2022, the Company entered into an **$88.1 million** Real Estate Term Loan, secured by real estate assets, using part of the proceeds to pay off the ABL facility[75](index=75&type=chunk)[116](index=116&type=chunk) [9. Derivative Financial Instruments and Purchase Commitments](index=20&type=section&id=9.%20DERIVATIVE%20FINANCIAL%20INSTRUMENTS%20AND%20PURCHASE%20COMMITMENTS) Discusses the Company's use of derivative instruments for hedging and outlines significant purchase commitments - The Company uses interest rate swap contracts to hedge against interest rate fluctuations, with a notional amount of **$500 million** maturing on September 30, 2026, and the swap was amended in September 2022 to reflect the LIBOR to SOFR transition[84](index=84&type=chunk) | (in thousands) | Fair value of warrant liabilities | | :------------- | :-------------------------------- | | As of January 2, 2022 | $46,224 | | Gain on remeasurement | $(7,704) | | As of July 3, 2022 | $38,520 | | Loss on remeasurement | $3,672 | | As of October 2, 2022 | $42,192 | - Purchase commitments for key ingredients totaled **$65.7 million** as of October 2, 2022, used to economically hedge commodity input prices[86](index=86&type=chunk) [10. Fair Value Measurements](index=20&type=section&id=10.%20FAIR%20VALUE%20MEASUREMENTS) Provides information on the fair value of financial instruments, categorized by valuation inputs | (in thousands) | October 2, 2022 (Total) | January 2, 2022 (Total) | | :------------- | :---------------------- | :---------------------- | | Assets: | | | | Cash and cash equivalents | $51,805 | $41,898 | | Interest rate swaps | $48,135 | $2,208 | | Total assets | $99,940 | $44,106 | | Liabilities: | | | | Commodity contracts | $558 | $54 | | Private placement warrants | $42,192 | $46,224 | | Debt | $902,359 | $841,962 | | Total liabilities | $945,109 | $892,840 | - The fair value of interest rate swaps significantly increased from **$2.208 million** (asset) to **$48.135 million** (asset) from January 2, 2022, to October 2, 2022, reflecting market changes[90](index=90&type=chunk) - Private placement warrant liabilities decreased from **$46.224 million** to **$42.192 million** over the same period[90](index=90&type=chunk) [11. Contingencies](index=21&type=section&id=11.%20CONTINGENCIES) Discloses potential liabilities arising from legal matters and guarantees related to independent operators - The Company is involved in various litigation matters, but management does not expect them to have a material adverse effect on financial condition or results of operations[91](index=91&type=chunk) - The Company partially guarantees loans made to Independent Operators (IOs) by Cadence Bank and Bank of America for route purchases, with outstanding guaranteed balances of **$1.6 million** and **$31.4 million**, respectively, as of October 2, 2022[93](index=93&type=chunk)[94](index=94&type=chunk) - Loans guaranteed by M&T Bank for IO route purchases totaled **$3.8 million** as of October 2, 2022, and are included in the Company's Consolidated Balance Sheets[95](index=95&type=chunk) [12. Accumulated Other Comprehensive Income](index=22&type=section&id=12.%20ACCUMULATED%20OTHER%20COMPREHENSIVE%20INCOME) Reports the components of accumulated other comprehensive income, including unrealized gains and losses | (in thousands) | Balance as of January 2, 2022 | Balance as of October 2, 2022 | | :------------- | :---------------------------- | :---------------------------- | | Total accumulated other comprehensive income | $3,715 | $54,190 | | Less balance attributable to noncontrolling interest | N/A | $21,570 | | Balance attributable to controlling interest | N/A | $32,620 | - Total accumulated other comprehensive income increased significantly from **$3.7 million** to **$54.2 million** from January 2, 2022, to October 2, 2022, solely due to unrealized gains from derivative financial instruments accounted for as cash flow hedges[96](index=96&type=chunk) [13. Supplementary Cash Flow Information](index=23&type=section&id=13.%20SUPPLEMENTARY%20CASH%20FLOW%20INFORMATION) Provides additional details on cash flows, including cash paid for interest and income taxes | (in thousands) | Thirty-nine weeks ended Oct 2, 2022 | Thirty-nine weeks ended Oct 3, 2021 | | :------------- | :---------------------------------- | :---------------------------------- | | Cash paid for interest | $29,682 | $23,519 | | Refunds related to income taxes | $4,630 | $182 |\ | Payments for income taxes | $5,463 | $3,332 | - Cash paid for interest increased by **$6.163 million** for the thirty-nine weeks ended October 2, 2022, compared to the prior year, reflecting higher debt levels and rising interest rates[97](index=97&type=chunk) [14. Income Taxes](index=23&type=section&id=14.%20INCOME%20TAXES) Details the Company's income tax expense or benefit, effective tax rates, and deferred tax assets and liabilities | (in millions) | Thirteen weeks ended Oct 2, 2022 | Thirteen weeks ended Oct 3, 2021 | Thirty-nine weeks ended Oct 2, 2022 | Thirty-nine weeks ended Oct 3, 2021 | | :------------ | :------------------------------- | :------------------------------- | :---------------------------------- | :---------------------------------- | | Income tax (benefit) expense | $(1.6) | $0.8 | $(1.7) | $2.3 | - The Company recorded an income tax benefit of **$(1.6) million** for the thirteen weeks and **$(1.7) million** for the thirty-nine weeks ended October 2, 2022, compared to income tax expense in the prior year periods[99](index=99&type=chunk) - Effective tax rates were **1450.0%** and **5.7%** for the thirteen and thirty-nine weeks ended October 2, 2022, respectively, significantly impacted by the partnership structure of UBH, state taxes, and warrant liabilities[99](index=99&type=chunk) - A valuation allowance has been recorded against certain deferred tax assets due to uncertainty regarding future realization, particularly concerning net operating losses and deductible book/tax differences[100](index=100&type=chunk) [15. Warrants](index=24&type=section&id=15.%20WARRANTS) Provides information on outstanding warrants and the impact of their remeasurement on financial results - As of October 2, 2022, there were **7,200,000** Private Placement Warrants outstanding, which are accounted for as derivative liabilities[106](index=106&type=chunk)[108](index=108&type=chunk) - The remeasurement of warrant liability resulted in a loss of **$(3.7) million** for the thirteen weeks ended October 2, 2022, compared to a gain of **$36.3 million** in the prior year period[109](index=109&type=chunk) [16. Equity](index=25&type=section&id=16.%20EQUITY) Details the Company's equity structure, including Class A and Class V Common Stock shares outstanding | (shares) | As of October 2, 2022 | As of January 2, 2022 | | :------- | :-------------------- | :-------------------- | | Class A Common Stock issued and outstanding | 80,812,835 | 77,644,645 |\ | Class V Common Stock issued and outstanding | 59,349,000 | 59,349,000 | - The number of Class A Common Stock shares issued and outstanding increased by **3,168,190 shares** from January 2, 2022, to October 2, 2022[110](index=110&type=chunk) - Class V Common Stock shares remained constant at **59,349,000**, held by Continuing Members and exchangeable for Class A Common Stock[111](index=111&type=chunk) [17. Earnings (Loss) Per Share](index=25&type=section&id=17.%20EARNINGS%20(LOSS)%20PER%20SHARE) Reports basic and diluted earnings (loss) per share for Class A Common Stock | (in dollars) | Thirteen weeks ended Oct 2, 2022 | Thirty-nine weeks ended Oct 2, 2022 | | :----------- | :------------------------------- | :---------------------------------- | | Basic EPS | $(0.01) | $(0.19) | | Diluted EPS | $(0.01) | $(0.19) | | (in dollars) | Thirteen weeks ended Oct 3, 2021 | Thirty-nine weeks ended Oct 3, 2021 | | :----------- | :------------------------------- | :---------------------------------- | | Basic EPS | $0.43 | $0.36 | | Diluted EPS | $0.40 | $0.34 | - Basic and diluted EPS for Class A Common Stock were **$(0.01)** and **$(0.19)** for the thirteen and thirty-nine weeks ended October 2, 2022, respectively, indicating a loss per share compared to positive EPS in the prior year periods[114](index=114&type=chunk)[115](index=115&type=chunk) - Anti-dilutive securities, including warrants, RSUs, and PSUs, totaling **2,337,218** for the thirteen weeks and **1,887,507** for the thirty-nine weeks ended October 2, 2022, were excluded from diluted EPS calculations due to the Company's net loss[114](index=114&type=chunk) [18. Subsequent Events](index=27&type=section&id=18.%20SUBSEQUENT%20EVENTS) Discloses significant events that occurred after the balance sheet date but before the financial statements were issued - On October 12, 2022, the Company secured an **$88.1 million** Real Estate Term Loan, collateralized by real estate assets, with a ten-year maturity and annual principal amortization of approximately **$3.5 million**[116](index=116&type=chunk) - Proceeds from the Real Estate Term Loan were used to pay off the ABL facility, and an interest rate swap was entered into to fix the effective interest rate at approximately **6%**[116](index=116&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=28&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses Utz Brands, Inc.'s Q3 2022 financial condition and operations, including developments, acquisitions, costs, and non-GAAP metrics [Overview](index=28&type=section&id=Overview) Provides a general introduction to Utz Brands, Inc.'s business, market position, and product portfolio - Utz Brands, Inc. is a leading U.S. manufacturer of branded salty snacks, founded in 1921, with a portfolio including Utz®, ON THE BORDER®, Zapp's®, and others, distributed nationally[119](index=119&type=chunk) - The Company is the second-largest producer of branded salty snacks in its core geographies based on 2021 retail sales[119](index=119&type=chunk) [Key Developments and Trends](index=28&type=section&id=Key%20Developments%20and%20Trends) Highlights significant industry trends, operational developments, and their potential impact on the Company's performance - The U.S. salty snacks category is attractive and growing, with retail sales increasing approximately **15.4%** over the 52 weeks ended October 2, 2022, benefiting from resilient consumer demand and favorable competitive dynamics[121](index=121&type=chunk)[122](index=122&type=chunk) - The Company's operating costs, including raw materials, labor, and distribution, are managed through cost-saving initiatives, sourcing, hedging, and pricing actions, with gross input cost inflation expected to be in the **mid to high-teens** in fiscal year 2022[124](index=124&type=chunk)[133](index=133&type=chunk) - The weighted average interest rate for the thirty-nine weeks ended October 2, 2022, was **4.3%**, up from 3.5% in the prior year, with the Company using interest rate swaps to manage exposure to variable rates and transitioning from LIBOR to SOFR[127](index=127&type=chunk)[128](index=128&type=chunk) - The COVID-19 pandemic led to increased demand for at-home dining, which the Company effectively serviced by increasing production and distribution, gaining new and repeat customers[129](index=129&type=chunk) [Recent Developments and Significant Items Affecting Comparability](index=30&type=section&id=Recent%20Developments%20and%20Significant%20Items%20Affecting%20Comparability) Discusses recent acquisitions, rising costs, and strategic initiatives impacting the comparability of financial results - Utz Brands completed three acquisitions in 2021: Vitner's (**$25.2 million**), Festida Foods (**$40.3 million**), and RW Garcia (**$57.9 million** plus **$6.0 million** for a manufacturing facility), expanding its product offering and distribution[130](index=130&type=chunk)[131](index=131&type=chunk)[132](index=132&type=chunk) - The Company faces rising commodity, fuel, freight, and labor costs, with gross input cost inflation expected in the **mid to high-teens** for fiscal year 2022, which it aims to offset through pricing actions and efficiency improvements[133](index=133&type=chunk) - The multi-year strategy to convert Company-owned DSD routes to the Independent Operator (IO) model is ongoing, with the IO/RSP mix at approximately **91%** and **9%** respectively as of October 2, 2022, expected to be substantially complete by mid-fiscal year 2023[135](index=135&type=chunk) [Results of Operations](index=32&type=section&id=Results%20of%20Operations) Analyzes the Company's financial performance, including net sales, gross profit, expenses, and net income (loss) | (in thousands) | Thirteen weeks ended Oct 2, 2022 | Thirteen weeks ended Oct 3, 2021 | Thirty-nine weeks ended Oct 2, 2022 | Thirty-nine weeks ended Oct 3, 2021 | | :------------- | :------------------------------- | :------------------------------- | :---------------------------------- | :---------------------------------- | | Net sales | $362,818 | $312,680 | $1,053,732 | $879,781 | | Gross profit | $118,273 | $102,627 | $333,609 | $293,428 | | Gross profit margin | 32.6% | 32.8% | 31.7% | 33.4% | | Selling, distribution, and administrative expenses | $102,445 | $98,709 | $336,718 | $278,850 | | Income (loss) from operations | $15,005 | $2,875 | $(2,190) | $16,543 | | Net income (loss) | $1,485 | $31,350 | $(27,868) | $24,180 | - Net sales increased by **16.0%** (thirteen weeks) and **19.8%** (thirty-nine weeks) year-over-year, driven by favorable price/mix (**14.7%** and **12.5%** respectively) and acquisitions, despite a **2.1%** volume decline in the thirteen-week period due to SKU rationalization[138](index=138&type=chunk)[148](index=148&type=chunk) - Gross profit margin declined to **32.6%** (thirteen weeks) and **31.7%** (thirty-nine weeks) from 32.8% and 33.4% respectively, primarily due to commodity and wage inflation, and higher depreciation, partially offset by pricing and productivity actions[143](index=143&type=chunk)[152](index=152&type=chunk) - Selling, distribution, and administrative expenses increased by **3.8%** (thirteen weeks) and **20.8%** (thirty-nine weeks), with the latter including **$23.0 million** for distributor buyouts and **$2.6 million** for other contract termination expenses[144](index=144&type=chunk)[153](index=153&type=chunk) - The Company reported a net loss for both the thirteen and thirty-nine weeks ended October 2, 2022, largely due to a loss on remeasurement of warrant liability and increased interest expense[146](index=146&type=chunk)[155](index=155&type=chunk) [Non-GAAP Financial Measures](index=35&type=section&id=Non-GAAP%20Financial%20Measures) Reconciles non-GAAP financial measures like EBITDA and Adjusted EBITDA to their most directly comparable GAAP measures - The Company uses non-GAAP financial measures like EBITDA and Adjusted EBITDA to evaluate operating performance, facilitate historical comparisons, identify trends, and inform strategic decisions[157](index=157&type=chunk)[160](index=160&type=chunk) | (dollars in millions) | Thirteen weeks ended Oct 2, 2022 | Thirteen weeks ended Oct 3, 2021 | Thirty-nine weeks ended Oct 2, 2022 | Thirty-nine weeks ended Oct 3, 2021 | | :-------------------- | :------------------------------- | :------------------------------- | :---------------------------------- | :---------------------------------- | | Net income (loss) | $1.5 | $31.4 | $(27.9) | $24.2 | | EBITDA | $32.9 | $60.0 | $66.9 | $110.3 | | Adjusted EBITDA | $47.7 | $44.8 | $126.4 | $118.5 | | Adjusted EBITDA as a % of Net Sales | 13.1 % | 14.3 % | 12.0 % | 13.5 % | - Adjusted EBITDA increased to **$47.7 million** for the thirteen weeks and **$126.4 million** for the thirty-nine weeks ended October 2, 2022, compared to $44.8 million and $118.5 million in the prior year periods, respectively[161](index=161&type=chunk) - Adjustments to EBITDA include non-cash items (share-based compensation, warrant liability remeasurement), acquisition and integration costs (**$40.8 million** for 39 weeks), business transformation initiatives (**$13.3 million** for 39 weeks), and financing-related costs[159](index=159&type=chunk)[161](index=161&type=chunk)[162](index=162&type=chunk)[164](index=164&type=chunk) [Liquidity and Capital Resources](index=37&type=section&id=Liquidity%20and%20Capital%20Resources) Assesses the Company's ability to generate and manage cash, including sources and uses of funds | (in thousands) | Thirty-nine weeks ended Oct 2, 2022 | Thirty-nine weeks ended Oct 3, 2021 | | :------------- | :---------------------------------- | :---------------------------------- | | Net cash provided by operating activities | $8,071 | $4,282 | | Net cash used in investing activities | $(52,940) | $(78,081) |\ | Net cash provided by financing activities | $54,776 | $52,929 | - Cash and cash equivalents increased by **$9.9 million** to **$51.8 million** as of October 2, 2022, compared to January 2, 2022[165](index=165&type=chunk) - Net cash provided by operating activities improved to **$8.1 million**, driven by better working capital management, while net cash used in investing activities decreased due to lower acquisition spending[165](index=165&type=chunk) - Financing activities provided **$54.8 million** in cash, primarily from increased ABL facility borrowings, equipment loans, and share issuance proceeds[165](index=165&type=chunk) - The ABL facility's credit limit was increased to **$175.0 million** and its interest rate benchmark transitioned from LIBOR to SOFR in September 2022[167](index=167&type=chunk) [Application of Critical Accounting Policies and Estimates](index=41&type=section&id=Application%20of%20Critical%20Accounting%20Policies%20and%20Estimates) Explains the significant judgments and estimates made by management in applying key accounting policies - The Company's financial statements are prepared under U.S. GAAP, requiring significant management judgments and estimates for areas such as revenue recognition, inventory valuations, useful lives of fixed assets, goodwill and intangible asset impairments, and income taxes[186](index=186&type=chunk) - Revenue recognition involves estimating variable consideration like discounts, returns, and trade promotions, with estimates based on historical data and adjusted as actual redemptions occur[187](index=187&type=chunk)[189](index=189&type=chunk) - Goodwill and indefinite-lived intangible assets are tested for impairment at least annually, with the Company determining no significant impact affecting fair value through October 2, 2022, thus not requiring a quantitative impairment test[193](index=193&type=chunk)[196](index=196&type=chunk) - Income taxes are accounted for using the asset and liability method, with deferred tax assets subject to a valuation allowance when future realization is uncertain, particularly due to cumulative losses[197](index=197&type=chunk)[100](index=100&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=44&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) Refers to the Annual Report on Form 10-K for 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[202](index=202&type=chunk) [Item 4. Controls and Procedures](index=45&type=section&id=Item%204.%20Controls%20and%20Procedures) Confirms effective disclosure controls and procedures as of October 2, 2022, with no material changes in internal control - The Chief Executive Officer and Chief Financial Officer concluded that the Company's disclosure controls and procedures were effective at a level of reasonable assurance as of October 2, 2022[203](index=203&type=chunk) - There were no material changes in the Company's internal control over financial reporting during the most recent fiscal quarter[204](index=204&type=chunk) PART II – OTHER INFORMATION [Item 1. Legal Proceedings](index=45&type=section&id=Item%201.%20Legal%20Proceedings) Management believes current legal proceedings will not materially adversely affect the Company's financial condition, operations, or cash flows - Management does not believe any currently pending legal proceedings will have a material adverse effect on the Company's business, prospects, financial condition, cash flows, or results of operations[205](index=205&type=chunk) [Item 1A. Risk Factors](index=45&type=section&id=Item%201A.%20Risk%20Factors) Refers to the Annual Report on Form 10-K for risk factors, noting no material changes since March 3, 2022 - There have been no material changes to the Company's risk factors since the filing of the Annual Report on Form 10-K on March 3, 2022[206](index=206&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=45&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) No unregistered sales of equity securities or use of proceeds to report for the period - No unregistered sales of equity securities or use of proceeds to report[207](index=207&type=chunk) [Item 3. Defaults Upon Senior Securities](index=45&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) No defaults upon senior securities to report for the period - No defaults upon senior securities to report[208](index=208&type=chunk) [Item 4. Mine Safety Disclosures](index=45&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) No mine safety disclosures to report for the period - No mine safety disclosures to report[209](index=209&type=chunk) [Item 5. Other Information](index=45&type=section&id=Item%205.%20Other%20Information) No other information to report for the period - No other information to report[210](index=210&type=chunk) [Item 6. Exhibits](index=45&type=section&id=Item%206.%20Exhibits) Lists all exhibits furnished with the report, including organizational documents, credit agreement amendments, and certifications - The exhibit index includes organizational documents (Certificate of Domestication, Certificate of Incorporation, Bylaws), amendments to credit agreements (ABL Credit Agreement, First Lien Credit Agreement), an offer letter, and certifications from the CEO and CFO[213](index=213&type=chunk)[214](index=214&type=chunk)

Utz Brands, Inc. (NYSE:UTZ) Q2 2022 Earnings Conference Call August 11, 2022 8:30 AM ET Company Participants Kevin Powers - Senior Vice President, Investor Relations Dylan Lissette - Chief Executive Officer Ajay Kataria - Executive Vice President and Chief Financial Officer Cary Devore - Executive Vice President and Chief Operating Officer Conference Call Participants Jason English - Goldman Sachs Bill Chappell - Truist Securities Peter Galbo - Bank of America Robert Moskow - Credit Suisse Rupesh Parikh - O ...

```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]

Market Overview - The U.S. salty snacks category is valued at $31 billion, with a compound annual growth rate (CAGR) of approximately 7.1% from 2017 to 2021, and retail sales increased by 13.4% for the thirteen weeks ended April 3, 2022 [119][120]. - The company's retail sales grew by 18.1% during the same period, outperforming the overall market [120]. Acquisitions and Growth - The company completed several acquisitions, including the purchase of Vitner's for approximately $25.2 million, Festida Foods for about $40.3 million, and RW Garcia for approximately $57.8 million [127][128][129]. - Net sales for the thirteen weeks ended April 3, 2022, were $340.8 million, an increase of $71.6 million or 26.6% compared to $269.2 million for the same period in 2021, driven by acquisitions and a favorable price/mix of 9.4% [135]. - Organic net sales increased by 20.7% for the thirteen weeks ended April 3, 2022, excluding the impacts of acquisitions and increased IO discounts [136]. Financial Performance - Gross profit for the thirteen weeks ended April 3, 2022, was $103.8 million, up from $95.2 million in the prior year, with a gross profit margin of 30.5% compared to 35.4% in 2021 [139][140]. - Selling, distribution, and administrative expenses rose to $126.7 million, a 46.2% increase from $86.7 million in the prior year, primarily due to acquisition and integration costs [141]. - Net loss for the thirteen weeks ended April 3, 2022, was $31.9 million, compared to a net loss of $23.3 million for the same period in 2021 [147]. - Adjusted EBITDA for the thirteen weeks ended April 3, 2022, was $36.5 million, representing 10.7% of net sales, down from $37.9 million or 14.1% in the prior year [147]. Cost and Inflation - The company expects gross input cost inflation to be in the mid-teens for fiscal 2022, an increase from previous expectations of low-teens [130]. - The company has experienced rising costs related to fuel, freight rates, and labor, negatively impacting profitability [130]. Debt and Financing - The weighted average interest rate for the company’s debt was 3.9% for the thirteen weeks ended April 3, 2022, up from 3.7% in the prior year [124]. - The company had $841.2 million in variable rate indebtedness as of April 3, 2022, with interest rate hedges covering $500 million of debt [125]. - The company entered into a Bridge Credit Agreement for $490.0 million to finance the acquisition of Truco and IP Purchase, with an outstanding balance of $370.0 million as of January 3, 2021 [154]. - The company raised $720 million in Term Loan B, bearing interest at LIBOR plus 3.00%, and extended the maturity to January 20, 2028 [155]. - Total long-term debt was reported at $864.1 million as of April 3, 2022, compared to $841.9 million as of January 2, 2022 [158]. Cash Flow and Operating Activities - Net cash used in operating activities was $36.0 million for the thirteen weeks ended April 3, 2022, compared to $13.2 million in the same period in 2021, largely due to distributor buyouts [150]. - The consolidated cash balance, including cash equivalents, was $14.9 million as of April 3, 2022, a decrease of $27.0 million from January 2, 2022 [150]. Route and Distribution Management - The conversion of company-owned routes to independent operator (IO) models has resulted in a mix of approximately 89% IOs and 11% route sales professionals (RSPs) as of April 3, 2022 [132]. - The company anticipates completing the conversion of remaining routes by the end of fiscal year 2022, which will reduce selling and administrative costs [132]. - The company purchases and sells distribution routes as part of maintaining its DSD network, recording gains/losses based on the difference between sale price and asset carrying value [172]. Tax and Accounting - The company follows ASC 740 for income tax accounting, recognizing current tax liabilities and deferred tax assets based on temporary differences, with no unrecognized tax benefits reported as of April 3, 2022 [181]. - Business combinations are evaluated to determine if they should be accounted for as a business combination or asset acquisition, requiring significant judgment in the application of the screen test [182]. - The acquisition method is used for accounting acquired businesses, with assets and liabilities recorded at estimated fair values at the acquisition date, and excess purchase price recorded as goodwill [183]. Goodwill and Intangible Assets - Goodwill and indefinite-lived intangible assets are not amortized but are tested for impairment at least annually, with no significant impairment identified for the snack food operations as of April 3, 2022 [178]. - The company has early adopted Accounting Standards Update 2017-04, simplifying the test for goodwill impairment, recording impairment charges based on the excess of a reporting unit's carrying amount over fair value [176]. - Finite-lived intangible assets are amortized over their estimated useful lives and tested for impairment only when indicators are present [174].

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 ...