HANOVER, PA. — Utz Brands, Inc. achieved strong sales results during its first quarter as a public company as its portfolio of potato chips, pretzels, popcorn and more outpaced category growth in measured retail channels.
The company posted a loss of $7.3 million for the third quarter ended Sept. 27, which compared with net income of $10.3 million in the year-ago period. The loss was driven by transaction-related expenses from the combination of Collier Creek Holdings, a special purpose acquisition company, and Utz Quality Foods LLC that closed Aug. 28 and introduced Utz Brands, Inc. as a publicly listed company.
Adjusted net income of $17.9 million compared with $8.5 million in the prior year, driven by higher net sales and higher margins. Adjusted EBITDA increased 40% to $38.2 million, driven by higher net sales and higher adjusted gross profit margins, partially offset by higher adjusted selling and administrative expense.
Net sales increased 24% to $248 million from $199.6 million.
The increase in net sales was driven in part by the acquisitions of the Conagra Brands’ direct-store delivery snacks and Kitchen Cooked businesses, as well as strong growth of the company’s Utz, Zapp’s, Tortiyahs! and Golden Flake Pork Skins brands. The results were partially offset by the company’s ongoing shift to independent operators and the resulting increase in sales discounts.
The company’s retail sales measured in multi-outlet channels increased nearly 13% in the 13-week period and outpaced the total salty snack category growth of 8.7%, according to data from Information Resources, Inc. Utz Brands experienced continued softness in foodservice and the convenience channel due to the pandemic.
“We are pleased to report strong financial results for our first quarter as a public company,” said Dylan Lissette, chief executive officer of Utz Brands. “Our strong portfolio of brands, competitively-advantaged manufacturing and distribution network, and strong execution helped us improve our market positions in key channels, geographies, product sub-categories, and in total. A special thank you to our dedicated associates, all of whom have helped the company perform so well during this difficult time with COVID-19. Our growth opportunities are multi-faceted, and our results for our third quarter demonstrate our commitment to be the fastest-growing, pure-play branded salty snack company of scale in the US.”
For the full year, management is expecting net sales growth of 10% to 11% versus 2019 pro forma net sales of $865.5 million, including a 53rd week in the current year. Adjusted EBITDA is projected to be in the range of $129 million to $132 million, including the impact of the extra week.