8-K: Utz Brands Announces CFO Transition, Chief Customer Officer Retirement, Reaffirms 2025 Outlook, and Releases Preliminary Q1 2025 Results

Utz Brands announces a CFO transition, Chief Customer Officer retirement, reaffirms its fiscal year 2025 outlook, and releases preliminary first quarter 2025 results.

Summary

• Utz Brands announced that William J. Kelley Jr. will be appointed as Executive Vice President, Chief Financial Officer and Principal Accounting Officer, effective May 1, 2025.
• Ajay Kataria, the current CFO, will step down on May 1, 2025, and will assist with the transition through May 31, 2025.
• Mark Schreiber, Executive Vice President, Sales & Chief Customer Officer, will retire effective May 31, 2025, and will remain in a transition role through the end of June.
• Jeremy Stuart, currently Senior Vice President, Large Format, will assume the position of Executive Vice President, Sales and Chief Customer Officer, effective May 31, 2025.
• Utz is reaffirming its fiscal year 2025 outlook provided on February 20, 2025.
• The company expects net sales to increase between 1.5% and 1.7% versus the prior year period for the first quarter of 2025.
• Organic net sales are expected to increase between 2.8% and 3.0% versus the prior year period for the first quarter of 2025.
• Net income is projected to be between $4 million and $6 million for the first quarter of 2025.
• Adjusted EBITDA is expected to be between $44 million and $46 million for the first quarter of 2025.
• Diluted earnings per share are projected to be between $0.08 and $0.10 for the first quarter of 2025.
• Adjusted earnings per share are expected to be between $0.14 and $0.16 for the first quarter of 2025.
• For fiscal year 2025, Utz continues to expect organic net sales growth of low-single digits, adjusted EBITDA growth of 6% to 10%, and adjusted earnings per share growth of 10% to 15%.

Sentiment

Score: 7

Explanation: The document presents a mix of positive and neutral news, including executive appointments, reaffirmation of financial outlook, and preliminary Q1 results. The sentiment is moderately positive due to the reaffirmed outlook and new executive appointments.

Positives

• Utz is reaffirming its fiscal year 2025 outlook, projecting low-single-digit organic net sales growth and 6% to 10% adjusted EBITDA growth.
• Preliminary Q1 2025 results indicate net sales growth of 1.5% to 1.7% and organic net sales growth of 2.8% to 3.0%.

Negatives

• The company's non-branded and non-salty snacks category experienced a significant sales decline in 2024, with a 27.4% decrease for the full year.

Risks

• The preliminary first quarter 2025 financial results are based upon the Company's estimates and are subject to completion of the Company's financial closing procedures and review by the Company's independent registered public accounting firm.
• The company faces risks associated with executive leadership transition.
• The company operates in an industry with high levels of competition and consolidation.

Future Outlook

Utz reaffirms its fiscal year 2025 outlook, expecting low-single-digit organic net sales growth, 6% to 10% adjusted EBITDA growth, and 10% to 15% adjusted earnings per share growth.

Management Comments

• Howard Friedman, Chief Executive Officer of Utz, expressed excitement about William Kelley joining the team and gratitude to Ajay Kataria for his leadership.
• William Kelley stated he has long admired the Utz brand and is thrilled to be joining the team.
• Ajay Kataria said he is incredibly proud of all that has been accomplished during his time at Utz.
• Howard Friedman stated that Mark Schreiber has been a true champion of the Utz brand and a driving force behind their commercial success.
• Howard Friedman added that Jeremy Stuart's deep understanding of the customer landscape and operational focus make him the ideal leader to build on Mark's legacy.

Industry Context

The announcement reflects ongoing executive transitions and strategic realignments within the consumer packaged goods industry, particularly in the salty snacks sector, as companies adapt to changing market dynamics and consumer preferences.

Comparison to Industry Standards

• Utz's expected organic net sales growth in the low-single digits is comparable to the growth targets of other established snack food companies like PepsiCo's Frito-Lay division and Campbell Soup Company's Snacks division.
• The projected adjusted EBITDA margin expansion of approximately 100bps aligns with industry efforts to improve profitability through productivity cost savings and product mix optimization, similar to initiatives undertaken by companies like Mondelez International and Hershey.
• The planned capital expenditures of $90 to $100 million, focused on increasing manufacturing network capacity and delivering accelerated productivity savings, are in line with investments made by competitors like Kellogg Company and General Mills to modernize their supply chains and enhance operational efficiency.

Management Changes

Stakeholder Impact

• Shareholders can expect continued focus on growth and value creation with the executive leadership changes and reaffirmed financial outlook.
• Employees may experience changes in leadership and potential shifts in strategic direction.
• Customers can anticipate continued innovation and focus on customer partnerships with the new Chief Customer Officer.
• Suppliers and creditors can expect Utz to maintain its financial stability and continue investing in its manufacturing network.

Next Steps

• William J. Kelley Jr. will assume the role of CFO on May 1, 2025.
• Ajay Kataria will assist with the transition until May 31, 2025.
• Jeremy Stuart will become the Executive Vice President, Sales and Chief Customer Officer on May 31, 2025.
• Utz will report its full first quarter 2025 financial results on May 1, 2025.

Key Dates

Keywords

Utz Brands, CFO, Chief Financial Officer, Chief Customer Officer, Financial Results, Fiscal Year 2025 Outlook, Executive Appointment, Retirement, Net Sales, EBITDA