DEF: Utz Brands Reports Growth in Adjusted EBITDA Despite Net Sales Dip in 2024

Utz Brands saw a year of growth and strong performance in 2024, with a focus on strategic execution to drive shareholder value, despite a decrease in total net sales.

Summary

• Utz Brands' 2024 Annual Meeting of Stockholders will be held virtually on April 24, 2025.
• In fiscal year 2024, Utz Brands' total net sales decreased by 2.0% to $1,409.3 million, while Organic Net Sales increased by 1.3%.
• GAAP net income increased from $(40.0) million to $30.7 million, representing a 176.8% change.
• Adjusted EBITDA increased approximately 6.9% to $200.2 million.
• Utz finished the year as the 3rd largest U.S. salty snack platform for the 13-week period ended December 29, 2024.
• The company invested nearly $100 million in capital expenditures across its supply chain to unlock future cost savings and operating efficiencies.
• Utz disposed of five manufacturing facilities and two brands to accelerate network optimization, simplify execution, and enhance balance sheet flexibility.
• Stockholders are asked to vote on the election of four Class II directors, executive compensation, and the ratification of the selection of Grant Thornton LLP as the independent registered public accounting firm for the fiscal year ending December 28, 2025.
• The Board of Directors recommends voting FOR all nominees for Class II directors, FOR approval of executive compensation, and FOR ratification of the selection of Grant Thornton LLP.

Sentiment

Score: 7

Explanation: The document presents a mixed picture, with positive growth in Adjusted EBITDA and net income, but a slight decrease in net sales. The outlook is cautiously optimistic, with a focus on strategic execution. Overall, the sentiment is moderately positive.

Positives

• Adjusted EBITDA increased by 6.9% to $200.2 million.
• GAAP net income improved significantly, increasing by 176.8% to $30.7 million.
• The company is focused on productivity cost savings to expand margins and increase investments in brands.
• Utz is driving retail sales share increase nationally for total Utz and gaining volume share in both our Core and Expansion Geographies.
• Utz is investing nearly $100 million in capital expenditures across our supply chain, in an effort to unlock future cost savings and operating efficiencies.
• Utz is prioritizing its role as a valued member of the communities it serves, and recognizes the importance of an associate community where unique backgrounds and thoughts are shared to foster innovation and collaboration.
• Utz continues to advance its environmental stewardship efforts, evaluating and reducing water usage, greenhouse gas emissions, and energy consumption.

Negatives

• Total net sales decreased by 2.0% to $1,409.3 million in fiscal year 2024.
• Sales growth was more challenged than expected due to a difficult consumer demand environment.

Risks

• The document mentions a difficult consumer demand environment, which could pose a risk to future sales growth.
• The company's ability to achieve its 2026 targets is dependent on executing well on distribution growth opportunities and accelerating productivity cost savings.

Future Outlook

Utz is on a three-year journey to deliver against the 2026 targets introduced at its investor day in December 2023, with a focus on distribution growth and accelerated productivity cost savings.

Management Comments

• Howard Friedman, Chief Executive Officer, stated that 2024 was a year of growth and strong performance, with good execution against fundamental strategies.
• Howard Friedman is confident that the progress in 2024 has Utz well-positioned to deliver on its mission to become the fastest-growing pure-play U.S. salty snack company of scale.

Industry Context

Utz Brands is the 3rd largest U.S. salty snack platform, competing with major players in the consumer packaged goods industry.

Comparison to Industry Standards

• The document references a peer group of 11 publicly traded companies in the consumer products sector, primarily focused on food and beverage in North America.
• These companies include B&G Foods, Lancaster Colony Corporation, BellRing Brands, TreeHouse Foods, Calavo Growers, The Hain Celestial Group, Flowers Foods, The Simply Good Foods Company, J&J Snack Foods Corp., WK Kellogg Co., and John B. Sanfilippo & Son, Inc.
• The peer group median revenue was $1.8 billion and the median market capitalization was $1.9 billion as of the end of fiscal year 2024.

Management Changes

Related Party Transactions

• Utz paid Sageworth Trust $150,973 for fiduciary services in connection with the Utz Quality Foods, LLC. Profit Sharing/401(k) Plan during fiscal year 2024.
• One of Mr. Lissettes children, Michael Lissette, who has been employed by the Company since 2018, received annual compensation exceeding $120,000.

Stakeholder Impact

• The company's performance and strategic decisions impact shareholders, employees, customers, and communities.
• The focus on ESG initiatives demonstrates a commitment to environmental stewardship and social responsibility.

Next Steps

• Stockholders are encouraged to vote on the proposals outlined in the Proxy Statement.
• The company will continue to execute its strategic plan to achieve its 2026 targets.

Key Dates