utz-20220403

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q


☒			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
			For the quarterly period ended April 3, 2022
			OR
☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to

Utz Brands, Inc.

(Exact name of registrant as specified in its charter)

Delaware

001-38686

85-2751850

(State or other jurisdiction
of incorporation)

(Commission File Number)

(IRS Employer
Identification No.)

900 High Street

Hanover, PA 17331

(Address of principal executive offices, including zip code)

Registrant’s telephone number, including area code: (717) 637-6644

N/A

(Former name or former address, if changed since last report)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading Symbol(s)

Name of each exchange on which registered

Class A Common Stock, par value $0.0001 per share

UTZ

New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ⌧ No ◻

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ⌧ No ◻

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company," and "emerging growth company" in Rule 12b-2 of the Exchange Act.



Large accelerated filer	☒	Accelerated filer	☐
Non-accelerated filer	☐	Smaller reporting company	☐
Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ⌧

As of May 11, 2022, 80,728,900 Class A Common Stock, par value $0.0001 per share, and 59,349,000 Class V Common Stock, par value $0.0001 per share, were issued and outstanding.

INTRODUCTORY NOTE

On August 28, 2020 (the "Closing Date"), Utz Brands, Inc. (formerly Collier Creek Holdings) ("the Company"), consummated a business combination (the "Business Combination") with Utz Brands Holdings, LLC ("UBH") pursuant to the terms of the Business Combination Agreement, dated as of June 5, 2020 (the "Business Combination Agreement"), entered into by and among the Company, UBH, and Series U of UM Partners, LLC ("Series U") and Series R of UM Partners, LLC ("Series R" and together with Series U, the "Continuing Members"). Additional information about the Business Combination can be found in our Annual Report on Form 10-K for the year ended January 2, 2022.

Throughout this Quarterly Report on Form 10-Q, unless otherwise noted "the Company", "we", "us", "our", "UBI" and "Utz" refer to Utz Brands, Inc. and its consolidated subsidiaries.

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q contains "forward-looking statements" within the meaning of the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995. These forward-looking statements relate to expectations for future financial performance, business strategies or expectations for the Company’s business. Specifically, forward-looking statements may include statements relating to:

•The financial position, capital structure, indebtedness, business strategy and plans and objectives of management for future operations

•The benefits of the Business Combination and subsequent acquisitions, dispositions and similar transactions;

•The future performance of, and anticipated financial impact on, the Company;

•Expansion plans and opportunities; and

•Other statements preceded by, followed by or that include the words "may," "can," "should," "will," "estimate," "plan," "project," "forecast," "intend," "expect," "anticipate," "believe," "seek," "target" or similar expressions.

These forward-looking statements are based on information available as of the date of this Quarterly Report on Form 10-Q and the Company management’s current expectations, forecasts and assumptions, and involve a number of judgments, known and unknown risks and uncertainties and other factors, many of which are outside the control of the Company and its directors, officers and affiliates. Accordingly, forward-looking statements should not be relied upon as representing the Company’s views as of any subsequent date. The Company does not undertake any obligation to update, add or to otherwise correct any forward-looking statements contained herein to reflect events or circumstances after the date they were made, whether as a result of new information, future events, inaccuracies that become apparent after the date hereof or otherwise, except as may be required under applicable securities laws.

As a result of a number of known and unknown risks and uncertainties, the Company’s results or performance may be materially different from those expressed or implied by these forward-looking statements. Some factors that could cause actual results to differ are described under Part I, Item 1A "Risk Factors" in our Annual Report on Form 10-K for the year ended January 2, 2022. There have been no material changes to our risk factors since the filing of the Form 10-K.


Table of Contents

			Page
Part I - Financial Information
Item 1. Financial Statements
CONSOLIDATED BALANCE SHEETS			1
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS			2
CONSOLIDATED STATEMENTS OF EQUITY (DEFICIT)			3
CONSOLIDATED STATEMENTS OF CASH FLOWS			4
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS			5
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations			21
Item 3. Quantitative and Qualitative Disclosures About Market Risk			34
Item 4. Controls and Procedures			34

Part II - Other Information
Item 1. Legal Proceedings			34
Item 1A. Risk Factors			35
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds			35
Item 3. Defaults Upon Senior Securities			35
Item 4. Mine Safety Disclosures			35
Item 5. Other Information			35
Item 6. Exhibits			35
Signatures			36

PART I – FINANCIAL INFORMATION

Item 1. FINANCIAL STATEMENTS

Utz Brands, Inc.

CONSOLIDATED BALANCE SHEETS

April 3, 2022 and January 2, 2022

(In thousands)


	As of April 3, 2022		As of January 2, 2022
	(Unaudited)
ASSETS
Current Assets
Cash and cash equivalents	$	14,899	$	41,898
Accounts receivable, less allowance of $1,302 and $1,391, respectively	148,432		131,388
Inventories	93,778		79,517
Prepaid expenses and other assets	17,042		18,395
Current portion of notes receivable	6,401		6,706
Total current assets	280,552		277,904
Non-current Assets
Property, plant and equipment, net	298,656		303,807
Goodwill	915,490		915,438
Intangible assets, net	1,130,208		1,142,509
Non-current portion of notes receivable	19,614		20,725
Other assets	78,505		55,963
Total non-current assets	2,442,473		2,438,442
Total assets	$	2,723,025	$	2,716,346
LIABILITIES AND EQUITY
Current Liabilities
Current portion of term debt	$	11,414	$	11,414
Current portion of other notes payable	13,057		9,957
Accounts payable	104,967		95,369
Accrued expenses and other	53,356		71,280
Total current liabilities	182,794		188,020
Non-current portion of term debt and revolving credit facility	852,722		830,548
Non-current portion of other notes payable	23,129		24,709
Non-current accrued expenses and other	56,109		55,838
Non-current warrant liability	44,280		46,224
Deferred tax liability	136,837		136,334
Total non-current liabilities	1,113,077		1,093,653
Total liabilities	1,295,871		1,281,673
Commitments and Contingencies
Equity
Shares of Class A Common Stock, $0.0001 par value; 1,000,000,000 shares authorized; 78,597,175 and 77,644,645 shares issued and outstanding as of April 3, 2022 and January 2, 2022, respectively.	8		8
Shares of Class V Common Stock, $0.0001 par value; 61,249,000 shares authorized; 59,349,000 shares issued and outstanding as of April 3, 2022 and January 2, 2022.	6		6
Additional paid-in capital	909,144		912,574
Accumulated deficit	(254,168)		(236,598)
Accumulated other comprehensive income	19,558		3,715
Total stockholders' equity	674,548		679,705
Noncontrolling interest	752,606		754,968
Total equity	1,427,154		1,434,673
Total liabilities and equity	$	2,723,025	$	2,716,346

The accompanying notes are an integral part of these consolidated financial statements.

Utz Brands, Inc.

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

For the thirteen weeks ended April 3, 2022 and April 4, 2021

(In thousands, except share information)

(Unaudited)


	Thirteen weeks ended April 3, 2022		Thirteen weeks ended April 4, 2021
Net sales	$	340,767	$	269,182
Cost of goods sold	236,960		173,941
Gross profit	103,807		95,241

Selling, distribution, and administrative expenses
Selling and distribution	88,110		56,728
Administrative	38,551		29,933
Total selling, distribution, and administrative expenses	126,661		86,661

Gain on sale of assets, net	367		719

(Loss) income from operations	(22,487)		9,299

Other (expense) income
Interest expense	(9,103)		(10,861)
Other income	520		718
Gain (loss) on remeasurement of warrant liability	1,944		(21,501)
Other (expense) income, net	(6,639)		(31,644)

Loss before taxes	(29,126)		(22,345)
Income tax expense	2,772		1,004
Net loss	(31,898)		(23,349)

SEC Form 10-Q filed by Utz Brands Inc