Utz Brands(UTZ) - 2026 Q2 - Quarterly Report

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