Utz Brands(US:UTZ)2025-10-30 10:38Sales Performance - As of September 28, 2025, approximately 50% of U.S. households have Utz's products, with retail sales for salty snacks decreasing by 0.2% while Utz's retail sales increased by 4.8% for the thirteen weeks ended September 28, 2025[82][86]. - The company experienced retail volume and retail sales growth of 3.0% and 4.8%, respectively, in Expansion Geographies for the thirteen weeks ended September 28, 2025[84]. - Net sales for the thirteen weeks ended September 28, 2025, were $377.8 million, representing a 3.4% increase from $365.5 million in the same period of 2024[104]. - For the thirty-nine weeks ended September 28, 2025, net sales were $1,096.6 million, a 2.7% increase from $1,068.2 million in the same period of 2024[112]. - Branded Salty Snacks accounted for 89% of net sales for the thirteen weeks ended September 28, 2025, with a 5.8% increase in sales, while Non-Branded & Non-Salty Snacks saw a 13.1% decrease[105]. Financial Performance - The company reported a net loss of $20.2 million for the thirteen weeks ended September 28, 2025, compared to a net income of $0.8 million in the prior year[103]. - Income tax expense for the thirteen weeks ended September 28, 2025, was $13.4 million, significantly higher than $0.2 million in the same period of 2024[111]. - The company experienced a decrease in other loss, net, to $10.1 million for the thirteen weeks ended September 28, 2025, down from $18.5 million in the prior year[110]. - Adjusted EBITDA for the thirty-nine weeks ended September 28, 2025, was $154.1 million, representing an increase from $147.1 million in the prior year[123]. - The gross profit margin for the thirty-nine weeks ended September 28, 2025, was 33.9%, down from 35.1% in the prior year, attributed to increased investments for capacity expansion[114]. Cost Management - The company utilizes buying-forward strategies to manage commodity costs, locking in prices for key materials between three and 18 months in advance[98]. - Selling, distribution, and administrative expenses increased by 11.9% to $123.1 million for the thirteen weeks ended September 28, 2025, primarily due to higher costs associated with growth and geographic expansion[108]. - The company incurred $4.6 million in share-based compensation expense for the thirteen weeks ended September 28, 2025, slightly down from $4.7 million in the same period of 2024[124]. Manufacturing and Expansion - The company plans to consolidate its manufacturing footprint from eight to seven facilities, closing the Grand Rapids, Michigan facility, to generate cost savings and enhance efficiency[82][94]. - The company acquired Insignia International's DSD distribution assets in October 2025, accelerating its expansion in California, which has a $4.1 billion retail sales market for salty snacks[96]. - Boulder Canyon brand saw a growth of 199.0% for the thirty-nine weeks ended September 28, 2025, driven by new product innovations[97]. Debt and Financing - As of September 28, 2025, the company had $708.7 million in variable rate indebtedness, with a weighted average interest rate of 4.9%, down from 5.7% in the prior year[89]. - The company recorded a loss on debt extinguishment of $0.5 million related to the refinancing of its Term Loan B for the thirty-nine weeks ended September 28, 2025[132]. - As of September 28, 2025, $20.7 million was outstanding under the asset-based lending facility, with $140.0 million available for borrowing[134]. - Net cash provided by financing activities was $49.5 million for the thirty-nine weeks ended September 28, 2025, contrasting with a net cash outflow of $155.2 million in the prior year[141]. Market and Regulatory Environment - The U.S. salty snack category is valued at $41 billion, within the broader $147 billion U.S. snack food market as of September 28, 2025[85]. - The company recorded a charge to deferred taxes due to the One Big Beautiful Bill Act, impacting its consolidated financial statements[90]. - The company plans to remove Food, Drug & Cosmetic colors from its product portfolio by the end of 2027, which may affect net sales and market share[97]. - The company's market risk exposures have not changed materially since the filing of the Annual Report on Form 10-K for the year ended December 29, 2024[145]. - Quantitative and qualitative disclosures about market risk can be found in Item 7A of the Annual Report on Form 10-K[145].