UTZ Brands (UTZ) Q3 2024 Prepared Remarks earnings summary

Executive summary

• Achieved organic net sales growth of 1.9% in Q3 2024, led by branded volume growth and increased marketing and distribution investments.

• Adjusted EBITDA increased 3.6% to $54 million, marking the seventh consecutive quarter of margin expansion driven by productivity gains.

• Gained volume share in the salty snack category for the fifth consecutive quarter, maintaining disciplined pricing.

• Reaffirmed full-year 2024 financial outlook for organic net sales, adjusted EBITDA, adjusted EPS, and net leverage ratio.

• Divestitures impacted reported net sales by -3.6%.

Financial highlights

• Organic net sales increased to $365.5 million; adjusted EBITDA rose 3.6% to $54 million; adjusted EPS grew 23.5% to $0.21.

• Adjusted gross margin expanded by 270 basis points to 39.0%; adjusted EBITDA margin improved by 80bps to 14.8%.

• Adjusted net income increased 20.3% year-over-year to $29.6 million.

• Net cash from operations for the first 39 weeks was $52 million; capital expenditures totaled $60.9 million.

• Net debt at quarter-end was $731.5 million; net leverage ratio improved to 3.7x trailing 12 months adjusted EBITDA.

Outlook and guidance

• Reaffirmed FY2024 guidance: organic net sales growth of 2–2.5%, adjusted EBITDA growth of 5–8%, and adjusted EPS growth of 28–32%.

• Capital expenditures for 2024 expected between $80–$90 million; net leverage ratio targeted at ~3.6x by year-end.

• Expects effective tax rate of 17–19% and interest expense of ~$47 million.

• Net sales outlook includes a ~$45 million reduction from divested brands.