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Jan 03, 2021
Utz Q4 2020 Earnings Report
Reported a net sales growth and built a foundation for continued long-term growth.
Key Takeaways
Utz Brands reported a transformational year with double-digit retail sales growth, becoming the #3 brand platform in U.S. Salty Snacks. The company delivered strong results despite pandemic challenges, led by Power Brands and the addition of three million new buyers.
Net sales increased by 22.1% to $246.3 million compared to the fourth quarter of 2019.
Pro Forma Net Sales increased 6.8% on a comparable 13-week basis to $268.6 million versus $251.5 million for the fourth quarter of 2019.
Adjusted EBITDA increased to $34.0 million, or 13.8% of net sales, compared to $16.6 million, or 8.2% of net sales, in the fourth quarter of 2019.
Net loss was $(13.6) million for the 14-week fourth quarter of 2020, compared to a net loss of $(24.0) million for the 13-week fourth quarter of 2019.
Forward Guidance
The Company provided guidance for the 52-week fiscal year ending January 2, 2022, with net sales consistent with 2020 Pro Forma Net Sales of $1.16B and Adjusted EBITDA of $180 – $190 million.
Positive Outlook
- Net sales consistent with 2020 Pro Forma Net Sales of $1.16B with modest organic sales growth year over year.
- Projected pro forma two-year CAGR for fiscal 2020 and 2021 of approximately 6% is well-above the Company’s long-term growth outlook of 3 – 4%.
- Adjusted EBITDA of $180 – $190 million versus 2020 Further Adjusted EBITDA of $181 million, delivering a margin of approximately 16%.
- Adjusted Earnings Per Share of $0.70 – $0.75, which excludes step-up depreciation & amortization (“D&A”), stock compensation expense, and non-recurring items.
- Net leverage ratio of approximately 3.5x by end of 2021
Challenges Ahead
- Expecting 200 – 250 Independent Route (“IO”) conversions
- Commodity inflation of approximately 4%
- Effective cash tax rate of 23.0 - 25.0% (% of pre-tax book income)
Historical Earnings Impact
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Avg. Return Before/After Earnings
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