Utz Brands(US:UTZ)2024-10-31 11:09Financial Performance - For the thirteen weeks ended September 29, 2024, net sales were $365.5 million, a decrease of 1.8% compared to $371.9 million for the same period in 2023[57]. - The company reported a net income of $0.8 million for the thirteen weeks ended September 29, 2024, compared to a net income of $16.2 million for the same period in 2023, reflecting a significant decline[57]. - Net sales for the thirty-nine weeks ended September 29, 2024, were $1,068.2 million, a decrease of $17.9 million or 1.6% compared to $1,086.1 million for the same period in 2023[62]. - Net income for the thirteen weeks ended September 29, 2024, was $0.8 million, a decrease from $16.2 million for the same period in 2023[69]. - The company achieved a net income as a percentage of net sales of 0.2% for the thirteen weeks ended September 29, 2024, down from 4.4% in the prior year[69]. Gross Profit and Margins - Gross profit for the thirteen weeks ended September 29, 2024, was $131.0 million, representing a gross margin of 35.9%, an increase from $119.3 million and a gross margin of 32.1% in the prior year[57]. - Gross profit increased to $131.0 million for the thirteen weeks ended September 29, 2024, with a gross profit margin of 35.8%, up from 32.1% in the prior year[59]. - Gross profit for the thirty-nine weeks ended September 29, 2024, was $375.4 million, with a gross profit margin of 35.1%, up from 31.4% in the prior year[63]. Expenses - Selling, distribution, and administrative expenses rose to $110.0 million, an increase of $4.5 million or 4.3% compared to $105.5 million in the same period last year[60]. - Selling, distribution, and administrative expenses decreased to $324.1 million for the thirty-nine weeks ended September 29, 2024, a decrease of $2.0 million or 0.6% compared to $326.0 million in the prior year[63]. - The company incurred $8.1 million in business transformation initiatives for the thirteen weeks ended September 29, 2024, compared to $6.1 million in the prior year[71]. Debt and Financing - As of September 29, 2024, variable rate indebtedness was $713.3 million, down from $851.9 million at December 31, 2023, primarily due to a $141.0 million payment related to divestitures[51]. - The weighted average interest rate for the thirty-nine weeks ended September 29, 2024, was 5.7%, a slight decrease from 5.8% during the same period in 2023[51]. - Net cash used in financing activities was $155.2 million for the thirty-nine weeks ended September 29, 2024, primarily due to debt paydowns, compared to $24.5 million in the prior year[81]. - The company recorded a loss on debt extinguishment of $1.3 million related to the refinancing of its Term Loan B for the thirty-nine weeks ended September 29, 2024[74]. - As of September 29, 2024, $22.7 million was outstanding under the ABL facility, with $158.8 million available for borrowing[75]. Market and Operational Insights - The company operates 8 primary manufacturing facilities across the United States and distributes products through approximately 2,450 direct-store delivery routes[48]. - The U.S. salty snacks category is valued at $39 billion, with the company being the second-largest producer in its core geographies based on 2023 retail sales[49]. - The company experienced a 1.3% decrease in retail sales for salty snacks over the thirteen weeks ended September 29, 2024, compared to the prior year[49]. - Power Brands represented 79% of volume for the thirteen weeks ended September 29, 2024, with a volume increase of approximately 4%[58]. Other Financial Metrics - Other income increased to $2.3 million for the thirty-nine weeks ended September 29, 2024, compared to a loss of $26.1 million in the same period last year[65]. - Income tax expense for the thirty-nine weeks ended September 29, 2024, was $25.4 million, compared to a benefit of $(13.4) million in the prior year[66]. - Adjusted EBITDA for the thirty-nine weeks ended September 29, 2024, was $147.1 million, compared to $137.8 million for the same period in 2023, reflecting a year-over-year increase of 9.6%[69]. Compliance and Risk - The company remains in compliance with its financial covenants as of September 29, 2024[82]. - Market risk exposures have not changed materially since the filing of the Annual Report on Form 10-K for the year ended December 31, 2023[83]. - The Annual Report on Form 10-K was filed on February 29, 2024[83]. - For detailed quantitative and qualitative disclosures about market risk, refer to Item 7A of the Annual Report[83].