What changed in this filing

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Item 1. Business

2022-03-03 compared with 2021-03-18 · 92 added, 79 removed, 200 unchanged (46% of the section changed)

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Our Emerging geographies consist of Alaska, Arizona, California, Florida, Hawaii, Idaho, Indiana, Iowa, Kansas, Kentucky, Michigan, Minnesota, Missouri, Montana, Nebraska, Nevada, New Mexico, North Dakota, Oklahoma, Oregon, South Dakota, Texas, Utah, Wisconsin, and Wyoming (our “Emerging Geographies”).

We are a leading manufacturer, marketer, and distributor of high-quality, branded snacking products in the United States.

We produce a broad offering of salty snacks, including potato chips, pretzels, cheese snacks, veggie snacks, pork skins, pub/party mixes, and other snacks.

We are a leading United States manufacture of branded salty snacks.

We produce a broad offering of salty snacks, including potato chips, tortilla chips, pretzels, cheese snacks, pork skins, veggie snacks, pub/party mixes, and other snacks.

Our iconic portfolio of authentic, craft, and “better-for-you” (“BFY”) brands, which includes Utz, Zapp’s, ON THE BORDER, Golden Flake, Good Health and Boulder Canyon , among others, enjoys strong household penetration in the United States, where our products can be found in approximately half of U.S.

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We are the second-largest producer of branded salty snacks in our Core Geographies, based on retail sales and we have historically expanded our geographic reach and product portfolio organically and through acquisitions.

We believe our recent business combination with Collier Creek Holdings (“CCH”) and our enhanced access to capital as a public company best position us to realize our objective of becoming the fastest-growing pure-play branded snack platform of scale in the United States.

Going forward, we plan to accelerate organic revenue growth, expand margins, and leverage our competitively advantaged route-to-market and scalable operating platform to make periodic value-enhancing strategic acquisitions.

We believe our enhanced access to capital as a public company following our August 2020 business combination with Collier Creek Holdings (“CCH”) best positions us to realize our objective of becoming the fastest-growing pure-play branded snack platform of scale in the United States.

Our long-term goals to build greater shareholder value include delivering consistent organic revenue growth, expanding margins, and leveraging our competitively advantaged route-to-market and scalable operating platform to make periodic value-enhancing strategic acquisitions.

Our business benefits from multiple opportunities to deliver attractive long-term profitable growth.

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We believe each of these growth avenues represents a sizeable opportunity to expand our Net Sales.

In addition, we further anticipate expanding our margins through supply chain productivity, revenue management, a higher-margin product mix, and higher margins on incremental sales as we leverage our scalable existing platform.

In addition, we further anticipate expanding our margins over the long term through supply chain productivity, revenue management, a higher-margin product mix, and higher margins on incremental sales as we leverage our scalable existing platform.

We also maintain a highly-disciplined approach to M&A and have substantial experience sourcing, executing, and integrating value-enhancing acquisitions.

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The novel coronavirus, or COVID-19, outbreak began impacting consumption, distribution and production of our products in March 2020.

We are taking necessary preventive actions and implementing additional measures to protect our employees who are working on site.

We continue to experience higher demand for our products versus the prior year, and we are servicing that demand by increasing production and distribution activities.

We have taken necessary preventive actions and implemented additional measures to protect our employees that work on site.

We continue to experience higher demand for our products compared to historical volumes, and we are servicing that demand by increasing production and distribution activities.

Generally, producers of food products, including salty snacks, have been deemed “essential industries” by federal, state, and local governments and are exempt from certain COVID-19-related restrictions on business operations.

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Recent Acquisitions

On November 2, 2020, we completed the acquisition of certain assets from Conagra Brands, Inc.

related to the H.K.

Anderson business, a leading brand of peanut butter-filled pretzels for approximately $8 million.

The transaction enables us to jump-start our entry into the growing filled pretzel segment, leveraging the synergies of our salty snack platform.

On November 11, 2020, we entered into a stock purchase agreement to acquire all of the outstanding shares of common stock of Truco Holdco Inc.

(“Truco”), a leading seller of tortilla chips, salsa and queso sold under the ON THE BORDER® (“OTB”) brand for approximately $404.0 million.

In addition on November 11, 2020, the Company entered into an asset purchase agreement to acquire from OTB Acquisition, LLC certain intellectual property (“OTB IP”) for $79.0 million, including all rights to the OTB trademarks for use in the manufacture, sale and distribution of snack food products in the United States and certain other international markets.

The Company closed these acquisitions of Truco on December 14, 2020.

On February 8, 2021, we completed the acquisition of certain assets from Snak-King Corp related to the Vitner's business, a leading brand of snack foods in the Chicago metropolitan area, for $25 million, subject to customary purchase price adjustments.

The Vitner's assets included intellectual property and assets associated with the distribution network, which includes approximately 55 DSD routes.

On February 8, 2021, the Company closed on a definitive agreement with Snak-King Corp.

to acquire certain assets of the C.J.

Vitner's business, a leading brand of salty snacks in the Chicago, IL area.

The acquisition increases our distribution in the Chicago area and Midwest Region and expands our product offering.

The Company paid the aggregate cash purchase price of approximately $25 million which was funded from current cash-on-hand.

On May 11, 2021, the Company announced that its subsidiary, Utz Quality Foods, LLC (“UQF”) entered into a definitive agreement with Great Lakes Festida Holdings, Inc.

to acquire all assets including real estate located in Grand Rapids, Michigan related to the operations of Festida Foods ("Festida Foods acquisition" or "acquisition of Festida Foods"), a manufacturer of tortilla chips, corn chips, and pellet snacks, and the largest manufacturer of tortilla chips for the Company's ON THE BORDER® brand.

The Company closed this transaction on June 7, 2021 and the purchase price of approximately $40.3 million was funded in part from incremental financing on an existing term loan.

On November 2, 2021, the Company announced that its subsidiaries, entered into a definitive agreement to acquire R.W.

Garcia Holdings, LLC and its' wholly-owned subsidiary R.W.

Garcia Co., Inc.

("RW Garcia"), an artisan maker of high-quality organic tortilla chips, crackers, and corn chips ("RW Garcia acquisition").

At the closing of the transaction on December 6, 2021, the Company paid the purchase price of approximately $58.3 million which was funded in part from a draw on the Company's line of credit and cash on hand.

In addition to this acquisition on December 6, 2021, the Company closed on an acquisition of a manufacturing facility of which RW Garcia was a tenant.

The cost of the manufacturing facility was approximately $6.0 million.

Our business is managed and reported in one operating segment.

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As a result, we focus our investment spending and brand-building activities on Power Brands while managing Foundation Brands for cash flow generation to support investment in Power Brands and fund other corporate priorities.

Our Power Brands are comprised of Utz, ON THE BORDER, Good Health, Boulder Canyon, Zapp’s, Hawaiian, Golden Flake pork skins , TGIF, Herdez , and TORTIYAHS!.

Our flagship Utz brand generated retail sales in excess of $650 million in 2020, representing approximately 5.2% compound annual growth rate (“CAGR”) (2016-2020) and making it one of the 10 largest salty snack brands in the United States by retail sales.

Our Power Brands are comprised of Utz, ON THE BORDER, Good Health, Boulder Canyon, Zapp’s, Hawaiian, Golden Flake pork skins , TGIF , and TORTIYAHS!.

Our flagship Utz brand generated retail sales in excess of $670 million in 2021, representing approximately 5.5% compound annual growth rate (“CAGR”) (2017-2021) and making it one of the 10 largest salty snack brands in the United States by retail sales as of January 2, 2022.

Recognized for its iconic logo featuring the “Little Utz Girl” since the 1920s, the Utz brand currently utilizes the slogan “Family Crafted Flavor Since 1921”.

We sell a variety of salty snacks under the Utz brand, including potato chips, pretzels, cheese snacks, pub/party mixes, and others.

Our ON THE BORDER brand, which was acquired on December 14, 2020 as part of the acquisition of Truco, is a national brand of tortilla chips, salsa and queso.

OTB is the #3 tortilla chip brand in the tortilla chip sub-category.

Our ON THE BORDER brand ("OTB"), which was acquired on December 14, 2020 as part of the acquisition of Truco, is a national brand of tortilla chips, salsa and queso.

OTB is the #2 unflavored tortilla chip brand as of January 2, 2022.

Additionally, the acquisition of OTB strengthens our national geographic footprint in our Expansion Geographies and Emerging Geographies and enhances our presence in the Mass and Club retail channels.

Our Good Health and Boulder Canyon Power Brands anchor our position in the BFY segment of salty snacking, which has been a high-growth segment in recent years.

Our Good Health and Boulder Canyon Power Brands anchor our position in the BFY category of salty snacking, which has been a high-growth category in recent years.

Good Health , which we acquired in 2014, is positioned as a positive way to snack because its products have cleaner ingredients and are certified non-GMO and gluten-free.

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(“Inventure Foods”) acquisition in 2017, offers a line of premium BFY potato chips, including those made with olive or avocado oils.

In the Natural channel, Boulder Canyon is the #2 potato chip brand while growing over 40% within the channel in 2020 and its “Canyon Cut” rippled avocado oil-based chip is the #1 selling potato chip item.

In the Natural channel, Boulder Canyon is the #2 potato chip brand while growing nearly 5% within the channel in 2021 and its “Canyon Cut” rippled avocado oil-based chip is the #1 selling potato chip item as of January 2, 2022.

Our Power Brands also include a number of our authentic craft brands including Zapp’s, Hawaiian , and Golden Flake pork skins.

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It evokes the feel of the Pacific islands, with exotic flavors like “Sweet Maui Onion,” “Luau BBQ,” “Mango Habanero,” and “Hulapeño.” Our Golden Flake brand, a part of Southern culture since 1923, has a full line of Southern-style pork skins with flavors like “Louisiana Hot Sauce” and “Sweet Heat Barbecue,” which offer great taste and crunch with low carbohydrates.

Our Foundation Brands include strong regional snacking brands, such as Golden Flake (excluding pork skins), Tim’s Cascade, Snyder of Berlin, “Dirty”, Kitchen Cooked, Bachman, and Jax as well as our partner and private label brands.

Our Foundation Brands include strong regional snacking brands, such as Golden Flake (excluding pork skins), Tim’s Cascade , Snyder of Berlin , “Dirty”, Herdez, Kitchen Cooked , Bachman , Jax and R.W.

Garcia as well as our partner and private label brands.

We have historically utilized the strong regional positions and relevance of our Foundation Brands to drive increased distribution for our Power Brands.

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Finally, given the importance of in-store presence, we have a dedicated graphics team that is able to quickly develop and implement new packaging designs, impactful point-of-sale materials, and retail-ready displays.

Recent innovations include exciting new flavors such as Zapp’s “Evil Eye,” building on the success of the extreme flavor sensation in Zapp’s “Voodoo” kettle chips;

Good Health “Creamy Onion & Chive Veggie Chips”;

Boulder Canyon “Thin & Crisp” potato chips cooked in avocado oil;

Utz Peanut Butter Filled Pretzels, flavored pretzels such as “Pumpernickel,” “Butter,” and “Everything”;

and Utz “Kettle Classics” with TGI Fridays “Cheddar & Bacon” flavor.

We have also introduced new product forms under the Good Health brand, including organic “Puffs” and “Fries,” as well as the TGI Friday’s brand, including “Party Sticks” shaped like French fries and “Pub Bites” shaped like chicken drumsticks.

Further, we continue to introduce new packaging format innovations highlighted by the convenient POURABLES Utz cheeseballs pouches that protect your fingers while letting you enjoy your favorite snack.

Utz innovation is gaining momentum, contributing more to growth and remains a key focus area.

Utz Peanut Butter Filled Pretzel Bites is proving to be a large and sustaining offering, with strong velocities and repeat rates.

In just over a year Utz Peanut Butter Filled Pretzel Bites became the #1 branded peanut butter filled pretzel barrel at retail.

On The Border Chips and Dips extended their famous Café Style tortilla chip with a “Lightly-Salted” offering, and launched two delicious new dips – “Jalapeno Ranch and Southwest Bean dip”.

“Zapp’s Thinz” is an exciting extension of Zapp's irresistible flavors such as Voodoo and Spicy Cajun to thin and crispy chips where 40% of consumers are exclusive to that form.

Similarly the Hawaiian brand with its island-inspired flavors like "Sweet Maui Onion" and "Luau Barbeque" launched a wavy textured chip called “Big Waves”.

Hot and spicy flavors remain a high growth and an area of future innovation.

Utz iconic Cheese Balls business got a new flavor with “Red Hot Cheddar”.

In the better for you space Utz continues to innovate.

“Good Health ABCs” is a fun new letter-shaped snack sure to engage more than just your taste buds.

Boulder Canyon known for better for you oils such as avocado oil launched Spicy Green Chili as its first "Boulder Batch" an exciting new series of limited time offerings.

Marketing, Advertising, and Consumer Engagement

Our marketing strategy is centered around our strong brand equities, new product innovation capabilities, and the consistently high quality of our products.

Our marketing strategy remains focused on driving stronger consumer pull for and building brand equity of our Power Brands.

We conduct marketing efforts through three principal sets of activities:

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and (iii) trade promotions to support features, displays and other merchandising of our products by our customers.

We have historically relied more heavily on sponsorships, trade promotions, and in-store merchandising as our primary forms of consumer engagement.

In fiscal 2020, we spent approximately $11.1 million related to consumer marketing and advertising expenses.

Going forward, consistent with our value creation strategies, we intend to meaningfully increase our investments in direct consumer marketing and advertising focused on our Power Brands as well as reallocate our current mix of media spending toward activities we believe will generate the highest return on investment.

We believe these strategies will have a meaningfully positive impact on our brands and help drive long-term Net Sales growth.

Historically we have relied more heavily on sponsorships, trade promotions, and in-store merchandising for consumer engagement, however, we are making shifts of spending into more consumer awareness and brand building advertising.

In fiscal 2021, we spent approximately $11.8 million r elated to consumer marketing and advertising expenses.

We expanded our marketing capabilities and have seen significant increases in key conversion funnel metrics – brand awareness, consideration and loyalty.

Going forward, consistent with our value creation strategies, we intend to meaningfully increase our investments in digital and social consumer marketing and advertising focused on our Power Brands as well as reallocate our current mix of media spending toward activities with the highest return on investment.

We will continue to expand our investments in digital and social media, including as part of our strategy to grow our eCommerce and retailer marketing investments.

We believe these marketing strategies will drive long term Net Sales growth by increasing brand equity, supporting geographic expansion and reducing the pressures of pricing.

Digital and Social Media .

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In mid-2019, we appointed a VP of Digital Marketing and eCommerce to focus on expanding and integrating our e-commerce and social media platforms.

These efforts have resulted in significant increases in household reach, expanded community sizes, and increased social media engagement in 2020.

These efforts have resulted in significant increases in household reach, expanded community sizes, and increased social media engagement in 2020 and 2021.

We expect to continue to expand our investments in digital and social media in the future, including as part of our strategy to grow our eCommerce marketing investments.

In fiscal 2020, our top 10 customers, all of which are retailers, represented approximately 37% of our invoiced sales, and no customer accounted for more than 11% of our invoiced sales in fiscal 2020.

We historically have benefited from long-term relationships with our key customers, having a sales relationship for more than 20 years on average across our top 15 retail customers.

Our strong brand equities, enhanced innovation, and increased consumer marketing spend should enable us to continue to expand distribution of our products both within existing customers and in under-penetrated retail channels.

In 2020, we estimate that approximately 19% of our customers sold only one of our Power Brands and no customers sold all of our Power Brands.

In fiscal year 2021, our top 10 customers, all of which are retailers, represented approximately 40% of our invoiced sales, and no customer accounted for more than 15% of our invoiced sales in fiscal year 2021.

We have historically benefited from long-term relationships with our key customers, having a sales relationship for more than 20 years on average across our top 15 retail customers.

Our strong brand equities, enhanced innovation, and optimized consumer marketing spend should enable us to continue to expand distribution of our products both within existing customers and in under-penetrated retail channels.

We believe there is an opportunity to expand our distribution in mass merchants and convenience stores, where our retail sales as a percentage of the salty snack category are lower than in other channels such as grocery or club stores.

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Our products also compete with private label or retailer-branded salty snacks.

However, private label represented only approximately 5% of category retail sales in 2020, which was flat compared to its share of retail sales in 2013.

However, private label represented only approximately 5% of category retail sales in 2021, which was about flat compared to its share of retail sales in 2016.

Historically, the salty snacks category has benefited from favorable competitive dynamics, including low private label penetration and category leaders who compete primarily via marketing and innovation.

Importantly, we are the #2 brand platform in our Core Geographies representing 9% of total salty snacks category retail sales.

Importantly, as of January 2, 2022, we are the #2 brand platform in our Core Geographies representing nearly 9% of total salty snacks category retail sales.

As of January 2, 2022 in our Core Geographies, we have the #1 position in pork skins with 24% of sub-category retail sales and the #2 positions in potato chips, pretzels and cheese snacks with 14%, 20% and 9% of sub-category retail sales, respectively.

With the acquisition of OTB, as of December 14, 2020, we hold the #3 branded position with Tortillas, with a 4% share.

As of January 2, 2022, we hold the #3 company position with Tortillas, with a 4% share, primarily driven by OTB.

We believe we have a strong and defensible position in our Core Geographies with a significant opportunity to enhance our national position by expanding sales in Expansion Geographies (where we represent 4.5% of category retail sales) and Emerging Geographies (where we represent 2.4% of category retail sales).

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All of our core ingredients are purchased according to rigorous standards to assure food quality and safety.

Our principal ingredients are generally available from multiple suppliers and we do not source any of our top 10 inputs under any single-source arrangements.

As such, we believe that we can make satisfactory alternative arrangements in the event of an interruption of supply from our vendors.

No single category of raw material purchases represented more than 13% of our Cost of Goods Sold in fiscal 2020.

Our principal ingredients are generally available from multiple suppliers, but became more difficult to source beginning in 2021 due to ongoing supply chain constraints.

We do not source any of our top 10 inputs under any single-source arrangements.

As such, we have been able to make satisfactory alternative arrangements in the event of this interruption of supply from our vendors.

No single category of raw material purchases represented more than 15% of our Cost of Goods Sold in fiscal year 2021.

In addition to raw materials, we source energy and liquid fuels for our manufacturing facilities and in-house distribution assets.

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To provide greater visibility, we typically look to enter into pricing arrangements covering a meaningful portion of our forecast purchases over the next 3 to 18 months.

As of March 2, 2021, we believe we have entered into pricing arrangements covering over 75% of our budgeted raw material needs in fiscal 2021.

As of February 24, 2022, we believe we have entered into pricing arrangements covering over 45% of our budgeted raw material needs in fiscal year 2022.

Manufacturing.

We manufacture our products primarily through 17 company-operated manufacturing facilities across the United States.

These include four legacy Utz facilities and ten facilities that were added over the last ten years from acquisitions (for more details see Item 2 “Properties” in this Annual Report on Form 10-K for more details).

These include four legacy Utz facilities and thirteen facilities that were added over the last ten years from acquisitions (for more details see Item 2 “Properties” in this Annual Report on Form 10-K for more details).

Our facilities had capacity to produce approximately 450 million pounds of salty snacks annually in 2021 based on management’s estimate of available capacity, excluding weekly sanitation, over a seven-day work schedule, providing us with significant available capacity to accommodate increased sales.

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Our manufacturing facilities are well-maintained, and we have a program to ensure appropriate maintenance capital expenditures are undertaken.

We also utilize several co-manufacturers for certain products.

We also utilize several co-manufacturers for certain products, with the most significant being our OTB branded tortilla chips as well as branded salsa and queso.

Distribution.

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Direct-Store-Delivery:

We believe we are one of only three scale U.S.

We believe we are one of only four scale U.S.

salty snack providers with extensive DSD capabilities.

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Our DSD system is utilized by both large and small customers, and we believe it provides us a competitive advantage in expanding distribution, increasing shelf space, executing in-store merchandising activities, and ensuring products are fresh and available wherever consumers shop.

Our DSD network included over 1,600 individual routes reaching over 75,000 retail stores in 2020.

Our DSD network included approximately 1,850 individual routes reaching over 80,000 retail stores in 2021.

Our DSD routes are managed by a combination of approximately 1,625 IOs, covering approximately 88% of our routes, and approximately 225 RSPs, covering approximately 12% of our routes as of January 2, 2022.

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We believe this transition benefits us by creating motivated independent owner-operators and a more variable cost structure for our company.

We expect to substantially complete our ongoing transition from RSPs toward IOs by the second quarter of fiscal year 2022 (See “ Management’s Discussion and Analysis of Financial Condition and Results of Operations of Utz Brands Holdings — Recent Developments and Significant Items Affecting Comparability — Independent Operator Conversions ” for more details).

We expect to substantially complete our ongoing transition from RSPs toward IOs during the fiscal year 2022 (See “ Management’s Discussion and Analysis of Financial Condition and Results of Operations of Utz Brands Holdings — Recent Developments and Significant Items Affecting Comparability — Independent Operator Conversions ” for more details).

Third Party Distributors:

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Our direct-to-consumer shipments are delivered from our central warehouse facility to consumers using FedEx, UPS, or other third-party carriers.

E-Commerce represented approximately 7% of our retail sales in fiscal 2020 and is an accelerating part of our business, with the channel having grown by more than approximately 125% as compared to 2019.

E-Commerce represented approximately 7% of our retail sales in fiscal 2021 and is an accelerating part of our business, with the channel having grown significantly since 2019.

Food Safety and Quality.

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We believe company success depends on our ability to attract, develop, and retain key personnel whose skills, experience and industry knowledge benefit our operations and performance.

The Company’s Board, Board committees, and management oversee various employee initiatives including compensation and benefits programs, succession planning, and leadership development and diversity and inclusion.

The Company’s Board, Board committees, and management oversee various associate initiatives including compensation and benefits programs, succession planning, leadership development, diversity and inclusion.

Utz aims to both attract and retain a qualified workforce through an inclusive and accessible recruiting process and online platform, as well as by offering competitive wages, benefits, and training opportunities.

We also support and develop our employees through company-wide training and development programs intended to build and strengthen employees’ leadership and professional skills.

We also support and develop our associates through company-wide training and development programs intended to build and strengthen associates’ leadership and professional skills.

Diversity, Equity and Inclusion

Utz wants to ensure that we have a workplace where every associate feels valued.

It’s vital for us to ensure dignity and respect in the workplace by embracing diverse perspectives and backgrounds for all associates.

Diverse teams drive better performance and greater innovation.

To further develop our diversity, equity and inclusion strategy, Utz has partnered with a nationally recognized consulting firm to aid in the development of a comprehensive strategy to ensure we are continuing to foster a work environment that values all people.

Utz recognizes that it’s vital for our performance as a world class company to ensure dignity and respect in the workplace for all associates.

By continuing to embrace the diverse perspectives and backgrounds of our associates, we will ensure that we have a workplace where every associate feels that they are valued and that they can contribute not only to our success, but theirs as well.

To ensure we are continuing to foster a work environment that values all people, Utz has partnered with a nationally recognized consulting firm to aid in the development of a comprehensive diversity, equity, and inclusion strategy.

Efforts will include recruiting, training, and leadership development focus area.

Health and Safety

The safety of our team members is a top priority.

We strive to provide a safe working environment, and have policies, procedures, and training programs to ensure employees and associates understand and meet safety guidelines.

We strive to provide a safe working environment by having policies, procedures, and training programs in place to ensure associates understand and meet safety guidelines.

Utz and our associates are dedicated to providing a safe environment by continuously improving our Safety Culture and Performance through commitment, investment, and training.

• Employee engagement:

• Associate engagement:

Leading indicators are used to both encourage and measure regular safety related activities throughout the organization

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Our benefits package includes:

• Comprehensive health insurance coverage to employees working 30 hours or more each week;

• Comprehensive health insurance coverage to associates working 30 hours or more each week;

• Parental leave to all new parents for birth, adoption or foster placement;

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• Employee Stock Purchase Plan;

• Wellness and disease management programs, health advocacy partner, and employee assistance programs;

• Wellness and disease management programs, health advocacy partner, and associates assistance programs;

• Tuition reimbursement program;

• 401(k) plan with generous company match and profit sharing.

As of January 3, 2021, we employed 3,083 full-time employees and 266 part-time employees.

Over the last several years, we have meaningfully reduced our number of full time employees and our selling, general & administrative expenses through our business transformation initiatives, particularly our DSD shift from RSPs to IOs and the associated restructuring of our sales management and corporate organization structure (see “— Supply Chain — Distribution” and “ Management’s Discussion and Analysis of Financial Condition and Results of Operations of Utz Brands Holdings — Recent Developments and Significant Items Affecting Comparability —Independent Operator Conversions ” for more information).

We expect the ongoing shift from RSPs toward IOs to be substantially completed by the second quarter of fiscal year 2022.

Additionally, we historically have reduced employee count and operating expenses in relation to integration initiatives associated with our recent acquisitions.

Employee Headcount

As of January 2, 2022, we employed 3,469 full-time associates and 272 part-time associates.

Over the last several years, we have meaningfully reduced our number of full time associates and our selling, general and administrative expenses through our business transformation initiatives, particularly our DSD shift from RSPs to IOs and the associated restructuring of our sales management and corporate organization structure (see “— Supply Chain — Distribution” and “ Management’s Discussion and Analysis of Financial Condition and Results of Operations of Utz Brands Holdings — Recent Developments and Significant Items Affecting Comparability —Independent Operator Conversions ” for more information).

We expect the ongoing shift from RSPs toward IOs to be substantially completed during fiscal year 2022.

Additionally, we historically have reduced associate count and operating expenses in relation to integration initiatives associated with our recent acquisitions.

Sustainability

We recognize the importance of Environment, Social and Governance issues for all stakeholders.

As a newly public company, we are in the early stages of building our ESG framework and strategy and are using leading ESG and sustainability frameworks and guiding principles, such as the Sustainability Accounting Standards Board (SASB) and the U.N.

We recognize the importance of Environmental, Social and Governance ("ESG") issues for all stakeholders.

As a newly public company, we are in the early stages of building our ESG strategy and are using leading ESG and sustainability frameworks and guiding principles, such as the Sustainability Accounting Standards Board (SASB), the Task Force on Climate-related Financial Disclosures (TCFD) and the U.N.

Sustainable Development Goals (SDGs), as well as stakeholder engagement to inform our ESG program.

Cross-functional working groups and an ESG committee has been formed that has clear reporting to the executive team and the board.

We recognize our responsibility to uphold the Company’s founding values which, for more than 100 years, have centered on working ethically, responsibly, and with integrity.

We also look for ways to make a positive difference at work and in our communities.

By collaborating with stakeholders, including team members, business partners, suppliers, and customers, we are working to become a more sustainable company.

In fiscal year 2022 we plan to release a summary of our preliminary ESG efforts aligned to industry-recognized ESG standards.

Cross-functional working groups and an ESG committee comprised of subject matter experts across Utz’s operations, including but not limited to, facilities management, packaging and shipping, health and safety, human resources, customer advocacy, and legal and corporate governance functions have been formed that report to the executive team and the Board.

We recognize our responsibility to uphold the Company’s founding values, which for more than 100 years, have centered on working ethically, responsibly, and with integrity to benefit all of our stakeholders.

We consistently look for ways to make a positive difference for our employees, customers and in the communities in which we operate.

By collaborating with stakeholders, including associates, consumers, business partners, suppliers, stockholders and customers, we are taking the necessary steps to become a more sustainable company.

Intellectual Property

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trademark registrations, which protect certain rights in the following brands:

Utz, ON THE BORDER, Zapp’s, Golden Flake, Good Health, Boulder Canyon, Hawaiian, TORTIYAHS!, Tim’s Cascade, Snyder of Berlin, “Dirty”, Kitchen Cooked, Bachman , Jax , and On the Border, among others.

Utz, ON THE BORDER, Zapp’s, Golden Flake, Good Health, Boulder Canyon, Hawaiian, TORTIYAHS!, Tim’s Cascade, Snyder of Berlin, “Dirty”, Kitchen Cooked, Bachman , Jax , and R.W.

Garcia , among others.

We also recently unveiled a modernization of our well known Little Utz Girl, and procured a trademark registration for her.

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We believe the protection of our intellectual property, particularly our trademarks, trade dress, trade secrets, copyrights and domain names, is important to our success.

We aggressively protect our intellectual property rights by, among other methods, relying on a combination of watch services and enforcement under intellectual property laws through the domain name dispute resolution system.

For example in 2020, we were engaged in litigation against Dirty South BBQ Co., LLC in the Eastern District of Pennsylvania, in light of Dirty South BBQ Co., LLC’s use of certain DIRTY designations in connection with the advertising, marketing, offering for sale, and sale of pork skins and food seasonings.

This matter was then transferred to the Eastern District of Tennessee in September 2020 before both parties stipulated to the dismissal of the litigation in October 2020.

In addition, from time to time, we may be subject to legal proceedings and claims in the ordinary course of business.

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however, licensing revenues from these arrangements represent less than 1% of fiscal year 2021 Net Sales and are not material to our business or growth strategy.

Finally, we have historically engaged in certain cross-marketing and/or promotional activities with third parties, including Major League Baseball, thereby increasing the visibility of our brands.

Finally, we have historically engaged in certain cross-marketing and/or promotional activities with third parties, thereby increasing the visibility of our brands.

Although the demand for our products is relatively stable throughout the year as compared to other consumer goods, we have experienced in the past, and expect to continue to experience, seasonal fluctuations in our retail sales as a result of consumer and customer spending patterns.

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1. Business