Utz Brands (UTZ) Misses Q1 EPS by 1c, Revenues Miss

Utz Brands (NYSE: UTZ) reported Q1 EPS of $0.13, $0.01 worse than the analyst estimate of $0.14. Revenue for the quarter came in at $269.2 million versus the consensus estimate of $274.87 million.

“In the first quarter, we continued to execute against our value creation strategies to position the Company for long-term success,” said Dylan Lissette, Chief Executive Officer of Utz. “Even as we lapped significant out-performance versus the category in the early weeks of the COVID-19 pandemic last year, we are pleased with our Power Brands’ sales momentum and the continued growth in our Emerging and Expansion geographies. In addition, we successfully went live on our ERP implementation that will better enable our platform to scale, and we continued to make strategic acquisitions with our recently announced definitive agreement to acquire Festida Foods and our previously announced acquisition of Vitner’s, which closed on February 8, 2021. Looking ahead, we remain on track to deliver our targets for the full year.”

Fiscal Year 2021 Outlook

For the 52-week fiscal year ending January 2, 2022, the Company is reaffirming its full-year outlook previously provided on March 18, 2021. The Company’s full-year outlook excludes the impact of the pending acquisition of Festida Foods, which is expected to close in the second quarter of 2021.

• Net sales consistent with 2020 Pro Forma Net Sales of $1.16B(1) with modest organic sales growth year over year. The Company’s projected pro forma two-year CAGR for fiscal 2020 and 2021 of approximately 6% is above the Company’s long-term growth outlook of 3 – 4%.
• Adjusted EBITDA of $180 – $190 million(2) versus 2020 Further Adjusted EBITDA of $181 million(3), 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. This assumes fully diluted shares on an as-converted basis of approximately 142 million.

In addition to the risks and uncertainties identified under “Forward-Looking Statements,” the Company’s 2021 guidance is estimated based on the following assumptions, all unchanged versus the previous outlook unless noted below:

• Funded $25 million Vitner's acquisition in February 2021 with balance sheet cash
• Expecting 200 – 250 Independent Route (“IO”) conversions
• Core D&A of $25 – $27 million and now expect step-up D&A of $50 – $53 million (comprised of approximately 40% cost of goods sold and 60% SG&A expense)
• Capital expenditures of $30 – $40 million in order to drive productivity efforts
• Commodity inflation of approximately 4%
• Productivity of approximately 2% of cost of goods sold
• Cash interest expense of approximately $30 million(4)
• Effective cash tax rate of 23.0 - 25.0% (% of pre-tax book income)
• Net leverage ratio of approximately 3.5x by end of 2021(5)

For earnings history and earnings-related data on Utz Brands (UTZ) click here.

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