UTZ Brands (UTZ) Q2 2024 Prepared Remarks earnings summary

Executive summary

• Achieved 1.6% organic net sales growth in Q2 2024, led by branded volume and market share gains in salty snacks, with increased marketing support.

• Sixth consecutive quarter of year-over-year adjusted EBITDA margin expansion, with adjusted EBITDA up 10% and adjusted EPS up 46%.

• Continued execution of portfolio strategy, focusing on Power Brands and de-emphasizing lower-margin businesses.

• Divested manufacturing plants and brands to accelerate network optimization and improve cost structure.

• Productivity and cost savings enabled increased marketing investment and geographic expansion.

Financial highlights

• Q2 2024 organic net sales were $356.7M (+1.6% YoY); adjusted gross margin expanded by 260 basis points year-over-year to 37.6%.

• Adjusted EBITDA margin reached 14% in Q2, with adjusted EBITDA at $49.7 million (+10% YoY).

• Adjusted net income and EPS increased by 46.3% and 46.2%, respectively, to $0.19 per share.

• Net debt at quarter end was $747.5 million, or 3.8x trailing 12 months' normalized adjusted EBITDA.

• Productivity programs and cost savings offset higher supply chain costs and increased marketing spend.

Outlook and guidance

• Revised 2024 organic net sales growth guidance to approximately 3%, reflecting softer salty snack category trends.

• Reaffirmed adjusted EBITDA growth outlook of 5%-8% and raised adjusted EPS growth guidance to 28%-32%.

• Expect second-half net sales growth to accelerate due to easier comparisons and increased marketing investments.

• Capital investment outlook remains $80-$90 million, with net leverage expected at 3.6x by year-end.

• Effective normalized tax rate expected at 17% to 19%; net interest expense ~$47M.