Utz Brands, Inc. 10-Q

Item 1. FINANCIAL STATEMENTS Utz Brands, Inc. CONSOLIDATED BALANCE SHEETS March 30, 2025 and December 29, 2024 (In thousands, except share information) As of March 30, 2025 As of December 29, 2024 (Unaudited) ASSETS Current Assets Cash and cash equivalents $ 62,748 $ 56,138 Accounts receivable, less allowance of $ 3,267 and $ 3,267 , respectively 134,998 119,867 Inventories 107,576 101,362 Prepaid expenses and other assets 34,694 35,269 Current portion of notes receivable 4,339 4,622 Total current assets 344,355 317,258 Non-current Assets Property, plant and equipment, net 374,956 345,210 Goodwill 870,695 870,695 Intangible assets, net 989,834 996,510 Non-current portion of notes receivable 9,114 9,192 Other assets 190,113 189,547 Total non-current assets 2,434,712 2,411,154 Total assets $ 2,779,067 $ 2,728,412 LIABILITIES AND EQUITY Current Liabilities Current portion of term debt $ 17,712 $ 16,097 Current portion of other notes payable 6,788 6,917 Accounts payable 157,473 150,927 Accrued expenses and other 57,480 78,281 Current portion of warrant liability 22,032 33,048 Total current liabilities 261,485 285,270 Non-current portion of term debt and revolving credit facility 830,480 752,484 Non-current portion of other notes payable 14,805 14,985 Non-current accrued expenses and other 170,870 164,185 Deferred tax liability 123,805 123,744 Total non-current liabilities 1,139,960 1,055,398 Total liabilities 1,401,445 1,340,668 Commitments and Contingencies Equity Shares of Class A Common Stock, $ 0.0001 par value; 1,000,000,000 shares authorized; 86,061,753 and 83,537,542 shares issued and outstanding as of March 30, 2025 and December 29, 2024, respectively 8 8 Shares of Class V Common Stock, $ 0.0001 par value; 61,249,000 shares authorized; 55,349,000 and 57,349,000 shares issued and outstanding as of March 30, 2025 and December 29, 2024, respectively 6 6 Additional paid-in capital 1,014,569 988,510 Accumulated deficit ( 303,663 ) ( 304,663 ) Accumulated other comprehensive income 14,678 18,590 Total stockholders' equity 725,598 702,451 Noncontrolling interest 652,024 685,293 Total equity 1,377,622 1,387,744 Total liabilities and equity $ 2,779,067 $ 2,728,412 The accompanying notes are an integral part of these consolidated financial statements. 1 Utz Brands, Inc. CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS) For the thirteen weeks ended March 30, 2025 and March 31, 2024 (In thousands, except share information) (Unaudited) (in thousands) Thirteen weeks ended March 30, 2025 Thirteen weeks ended March 31, 2024 Net sales $ 352,084 $ 346,523 Cost of goods sold 233,854 226,950 Gross profit 118,230 119,573 Selling, distribution, and administrative expenses Selling and distribution 77,265 73,666 Administrative 35,949 35,782 Total selling, distribution, and administrative expenses 113,214 109,448 Gain (loss) on sale of assets, net 660 ( 470 ) Income from operations 5,676 9,655 Other (expense) income, net Gain on sale of business — 44,015 Interest expense ( 11,470 ) ( 13,831 ) Loss on debt extinguishment ( 531 ) — Other income 362 910 Gain (loss) on remeasurement of warrant liability 11,016 ( 11,808 ) Other (expense) income, net ( 623 ) 19,286 Income before taxes 5,053 28,941 Income tax (benefit) expense ( 625 ) 26,544 Net income 5,678 2,397 Net loss (income) attributable to noncontrolling interest 1,824 ( 6,387 ) Net income (loss) attributable to controlling interest $ 7,502 $ ( 3,990 ) Income (loss) per Class A Common stock: (in dollars) Basic $ 0.09 $ ( 0.05 ) Diluted $ 0.09 $ ( 0.05 ) Weighted-average shares of Class A Common stock outstanding Basic 85,721,393 81,389,465 Diluted 87,535,340 81,389,465 Net income $ 5,678 $ 2,397 Other comprehensive (loss) income: Change in fair value of interest rate swap ( 6,452 ) 4,659 Comprehensive (loss) income ( 774 ) 7,056 Net comprehensive loss (income) attributable to noncontrolling interest 4,364 ( 8,352 ) Net comprehensive income (loss) attributable to controlling interest $ 3,590 $ ( 1,296 ) The accompanying notes are an integral part of these consolidated financial statements. 2 Utz Brands, Inc. CONSOLIDATED STATEMENTS OF EQUITY For the thirteen weeks ended March 30, 2025 and March 31, 2024 (In thousands, except share information) (Unaudited) Class A Common Stock Class V Common Stock Additional Paid-in Capital Accumulated Deficit Accumulated Other Comprehensive Income Total Stockholders' Equity Non-controlling Interest Total Equity Shares Amount Shares Amount Balance at December 31, 2023 81,187,977 $ 8 59,349,000 $ 6 $ 944,573 $ ( 298,049 ) $ 22,958 $ 669,496 $ 714,187 $ 1,383,683 Share-based compensation 218,850 — — 3,913 — — 3,913 — 3,913 Payments of tax withholding requirements for employee stock awards — — ( 1,397 ) — — ( 1,397 ) — ( 1,397 ) Deferred tax impact from divestiture — — 3,003 — — 3,003 2,135 5,138 Net (loss) income — — — ( 3,990 ) — ( 3,990 ) 6,387 2,397 Cash dividends declared — — — ( 4,803 ) — ( 4,803 ) — ( 4,803 ) Distribution to noncontrolling interest — — — — — — ( 3,502 ) ( 3,502 ) Tax distribution — — — — — — — — Other comprehensive income — — — — 2,694 2,694 1,965 4,659 Balance at March 31, 2024 81,406,827 $ 8 59,349,000 $ 6 $ 950,092 $ ( 306,842 ) $ 25,652 $ 668,916 $ 721,172 $ 1,390,088 Balance at December 29, 2024 83,537,542 $ 8 57,349,000 $ 6 $ 988,510 $ ( 304,663 ) $ 18,590 $ 702,451 $ 685,293 $ 1,387,744 Share-based compensation 524,211 — — 4,328 — — 4,328 — 4,328 Class V to Class A Exchange 2,000,000 — ( 2,000,000 ) — 23,899 — — 23,899 ( 23,899 ) — Payments of tax withholding requirements for employee stock awards — — ( 2,168 ) — — ( 2,168 ) — ( 2,168 ) Net income (loss) — — — 7,502 — 7,502 ( 1,824 ) 5,678 Cash dividends declared — — — ( 5,555 ) — ( 5,555 ) — ( 5,555 ) Special excess cash dividend declared — — — ( 947 ) — ( 947 ) — ( 947 ) Distribution to noncontrolling interest — — — — — — ( 3,376 ) ( 3,376 ) Tax distribution — — — — — — ( 1,630 ) ( 1,630 ) Other comprehensive loss — — — — ( 3,912 ) ( 3,912 ) ( 2,540 ) ( 6,452 ) Balance at March 30, 2025 86,061,753 $ 8 55,349,000 $ 6 $ 1,014,569 $ ( 303,663 ) $ 14,678 $ 725,598 $ 652,024 $ 1,377,622 The accompanying notes are an integral part of these consolidated financial statements. 3 Utz Brands, Inc. CONSOLIDATED STATEMENTS OF CASH FLOWS For the thirteen weeks ended March 30, 2025 and March 31, 2024 (In thousands) (Unaudited) Thirteen weeks ended March 30, 2025 Thirteen weeks ended March 31, 2024 Cash flows from operating activities Net income $ 5,678 $ 2,397 Adjustments to reconcile net income to net cash used in operating activities: Depreciation and amortization 18,745 18,302 Gain on sale of business — ( 44,015 ) (Gain) loss on remeasurement of warrant liability ( 11,016 ) 11,808 (Gain) loss on sale of assets ( 660 ) 470 Loss on debt extinguishment 531 — Share-based compensation 4,328 3,913 Deferred taxes 61 6,159 Deferred financing costs 349 1,760 Changes in assets and liabilities: Accounts receivable, net ( 15,131 ) ( 8,578 ) Inventories ( 6,214 ) ( 6,190 ) Prepaid expenses and other assets ( 7,112 ) ( 6,503 ) Accounts payable and accrued expenses and other ( 9,777 ) 11,412 Net cash used in operating activities ( 20,218 ) ( 9,065 ) Cash flows from investing activities Purchases of property and equipment ( 38,795 ) ( 13,630 ) Proceeds from sale of property and equipment 756 6,006 Proceeds from sale of business — 167,500 Proceeds from sale of routes 4,989 7,199 Proceeds from the sale of IO notes 472 855 Notes receivable ( 8,156 ) ( 9,919 ) Net cash (used in) provided by investing activities ( 40,734 ) 158,011 Cash flows from financing activities Borrowings on line of credit 85,000 37,000 Repayments on line of credit ( 35,160 ) ( 37,119 ) Borrowings on term debt and notes payable 38,470 9,798 Repayments on term debt and notes payable ( 7,951 ) ( 154,239 ) Payment of debt issuance cost ( 1,730 ) — Payments of tax withholding requirements for employee stock awards ( 2,168 ) ( 1,397 ) Dividends paid ( 5,401 ) ( 4,625 ) Distribution to noncontrolling interest ( 3,498 ) ( 3,383 ) Net cash provided by (used in) financing activities 67,562 ( 153,965 ) Net increase (decrease) in cash and cash equivalents 6,610 ( 5,019 ) Cash and cash equivalents at beginning of period 56,138 52,023 Cash and cash equivalents at end of period $ 62,748 $ 47,004 The accompanying notes are an integral part of these consolidated financial statements. 4 Utz Brands, Inc. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) 1. OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation – The accompanying consolidated financial statements comprise the financial statements of Utz Brands, Inc. ("UBI") and its wholly owned subsidiaries (collectively, the “Company”). The consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America ("U.S. GAAP") for interim financial statements and pursuant to the accounting and disclosure rules and regulations of the U.S. Securities and Exchange Commission (the "SEC"). They do not include all information and notes required by U.S. GAAP for annual financial statements. However, except as disclosed herein, there have been no material changes in the information disclosed in the Notes to Consolidated Financial Statements included in the Company’s financial statements for the year ended December 29, 2024. The balance sheet as of December 29, 2024 has been derived from the audited consolidated financial statements as of and for the year ended December 29, 2024. In the opinion of management, such financial information reflects all normal and recurring adjustments necessary for a fair presentation of the financial position and the results of operations for such interim periods in accordance with U.S. GAAP. Operating results for the interim period are not necessarily indicative of the results that may be expected for any future period or for the full year. The consolidated interim financial statements, including the Company's significant accounting policies, should be read in conjunction with the audited financial statements and notes thereto for the year ended December 29, 2024. All intercompany transactions and balances have been eliminated in consolidation. Revenue Recognition – The Company’s revenues primarily consist of the sale of salty snack items to customers, including supermarkets, mass merchants, club stores, dollar and discount stores, convenience stores, independent grocery stores, drug stores, food service, vending, military and other channels. The Company sells its products in most regions of the United States primarily through its direct-store delivery ("DSD") network, direct-to-warehouse shipments and third-party distributors. These revenue contracts generally have a single performance obligation. Revenue, which includes shipping and handling charges billed to the customer, is reported net of variable consideration and consideration payable to customers, including applicable discounts, returns, allowances, trade promotion, consumer coupon redemption, unsaleable product and other costs, some of which are recorded in Selling and distribution in the Consolidated Statements of Operations and Comprehensive Income (Loss). Amounts billed and due from customers are classified as accounts receivables and require payment on a short-term basis and, therefore, the Company does not have any significant financing components. The Company recognizes revenue when (or as) performance obligations are satisfied by transferring control of the goods to customers. Control is transferred upon delivery of the goods to the customer. Shipping and/or handling costs that occur before the customer obtains control of the goods are deemed to be fulfillment activities and are accounted for as fulfillment costs. Applicable shipping and handling costs are included in customer billing and are recorded as revenue as the products’ control is transferred to customers. The Company assesses the goods promised in customer purchase orders and identifies a performance obligation for each promise to transfer a good that is distinct. The Company offers various forms of trade promotions, and the methodologies for determining these promotions are dependent on local customer pricing and promotional practices, which range from contractually fixed percentage price reductions to provisions based on actual occurrence or performance. The Company’s promotional activities are conducted either through retail trade or directly with consumers and include activities such as in-store displays and events, feature price discounts, consumer coupons and loyalty programs. The costs of these activities are recognized at the time the related revenue is recorded, which normally precedes the actual cash expenditure. The recognition of these costs therefore requires management judgment regarding the volume of promotional offers that will be redeemed by either the retail trade customer or consumer. These estimates are made using various techniques including historical data on performance of similar promotional programs. The Company has reserves in place of $ 12.9 million as of March 30, 2025, which included adjustments taken by customers of $ 12.0 million that were awaiting final processing as of such date, and had reserves of $ 20.8 million as of December 29, 2024, which include adjustments taken by customers of $ 9.3 million that were awaiting final processing as of such date. Differences between estimated expense and actual redemptions are recognized as a change in management estimate as actual redemptions are incurred. 5 Recently Issued Accounting Standards – In November 2024, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2024-03, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures , to improve financial reporting by requiring that public business entities disclose additional information about specific expense categories in the notes to the financial statements at interim and annual reporting periods. The ASU is effective for annual reporting periods beginning after December 15, 2026 and interim reporting periods beginning after December 15, 2027, with early adoption permitted. The amendments can be applied either prospectively or retrospectively. The Company is currently evaluating the ASU to determine its impact on the Company's Consolidated Statements of Operations and Comprehensive Income (Loss). In December 2023, the FASB issued ASU 2023-09, Income Taxes: Improvements to Income Tax Disclosures, to amend existing income tax disclosure guidance, primarily requiring more detailed disclosures for income taxes paid and the effective tax rate reconciliation. ASU 2023-09 is effective for annual reporting periods beginning after December 15, 2024, with early adoption permitted, and can be applied on either a prospective or retroactive basis. The Company is currently evaluating this ASU to determine its impact on the Company's income tax disclosures. 2. DIVESTITURES On February 5, 2024, the Company sold certain assets and brands to affiliates of Our Home™, an operating company of Better-for-You brands (“Our Home”). Under the agreement, affiliates of Our Home purchased the Good Health and R.W. Garcia brands, the Lincolnton, NC and Lititz, PA manufacturing facilities and certain related assets and assumed the Company’s Las Vegas, NV facility lease and manufacturing operations (the "Good Health and R.W. Garcia Sale") for $ 167.5 million, subject to customary adjustments. The following table summarizes the net assets and liabilities included in the Good Health and R.W. Garcia Sale on February 5, 2024: (in thousands) Property, plant, and equipment, net $ 27,483 Goodwill 44,600 Intangible assets, net 44,327 Net working capital adjustments 7,075 Net assets sold $ 123,485 The Company recognized a gain on the Good Health and R.W. Garcia Sale of $ 44.0 million. The gain on the Good Health and R.W. Garcia Sale is recognized as Gain on sale of business in the Consolidated Statements of Operations and Comprehensive Income (Loss) for the thirteen weeks ended March 31, 2024. On April 22, 2024, the Company sold to Our Home its Berlin, PA and Fitchburg, MA manufacturing facilities and certain related assets (the “Manufacturing Facilities Sale”). The Company and Our Home are operating under transition services agreements related to each of the Good Health and R.W. Garcia Sale and the Manufacturing Facilities Sale, which are scheduled to expire during the first half of 2025. In addition, the parties will operate under reciprocal co-manufacturing agreements pursuant to which Our Home will co-manufacture certain of the Company's products and the Company will co-manufacture certain Good Health products. Certain Good Health products will continue to be distributed and sold on the Company's DSD network for Our Home pursuant to a distribution agreement. The Company received approximately $ 18.7 million in advance from Our Home for certain terms under these agreements, which the Company will recognize through income from operations over the terms of the transition services and co-manufacturing agreements. 6 3. INVENTORIES Inventories consisted of the following: (in thousands) As of March 30, 2025 As of December 29, 2024 Finished goods $ 70,493 $ 66,976 Raw materials 29,558 27,081 Maintenance parts 7,525 7,305 Total inventories $ 107,576 $ 101,362 4. PROPERTY, PLANT AND EQUIPMENT, NET Property, plant and equipment, net, consisted of the following: (in thousands) As of March 30, 2025 As of December 29, 2024 Land $ 25,769 $ 25,861 Buildings 134,237 113,227 Machinery and equipment 264,883 215,529 Land improvements 2,688 2,655 Building improvements 2,791 2,791 Construction-in-progress 76,101 107,425 506,469 467,488 Less: accumulated depreciation ( 131,513 ) ( 122,278 ) Property, plant and equipment, net $ 374,956 $ 345,210 Depreciation expense was $ 9.4 million and $ 8.7 million for the thirteen weeks ended March 30, 2025 and March 31, 2024, respectively. Depreciation expense is included in Cost of goods sold and Selling, distribution, and administrative expenses in the Consolidated Statements of Operations and Comprehensive Income (Loss). 7 5. GOODWILL AND INTANGIBLE ASSETS, NET A roll-forward of goodwill is as follows: (in thousands) Balance as of December 29, 2024 $ 870,695 Balance as of March 30, 2025 $ 870,695 Intangible assets, net, consisted of the following: (in thousands) As of March 30, 2025 As of December 29, 2024 Subject to amortization: Distributor/customer relationships $ 647,712 $ 647,712 Trademarks 59,920 59,920 Amortizable assets, gross 707,632 707,632 Accumulated amortization ( 160,895 ) ( 151,878 ) Amortizable assets, net 546,737 555,754 Not subject to amortization: Trade names 428,733 428,733 Route assets 14,364 12,023 Intangible assets, net $ 989,834 $ 996,510 Amortization of distributor/customer relationships, technology and trade names amounted to $ 9.0 million and $ 9.2 million for the thirteen weeks ended March 30, 2025 and March 31, 2024, respectively. The expense related to the amortization of intangibles is included in administrative expenses in Selling, general and administrative expenses in the Consolidated Statements of Operations and Comprehensive Income (Loss). 6. NOTES RECEIVABLE Contracts are executed between the Company and its independent operators (“IOs”) for the sale of product distribution routes, including notes in favor of the Company, in certain cases. The notes bear interest at rates ranging from 5.00 % to 10.55 % with terms ranging generally from one to ten years . The notes receivable balances due from IOs at March 30, 2025 and December 29, 2024 totaled $ 13.4 million and $ 13.8 million, respectively, and are collateralized by the routes for which the loans are made. The Company also sold certain notes to Bank of America and two other banks. The Company has a corresponding notes payable related to the sale of IOs notes receivables. See Note 10. Contingencies. 7. ACCRUED EXPENSES AND OTHER Current accrued expenses and other consisted of the following: (in thousands) As of March 30, 2025 As of December 29, 2024 Accrued compensation and benefits $ 7,728 $ 24,303 Operating right of use liability 17,951 17,341 Insurance liabilities 7,132 6,762 Accrued freight and manufacturing related costs 2,844 3,947 Accrued dividends and distributions 11,203 8,594 Accrued interest 3,450 11,086 Deferred transition services and other fees (a) 167 2,002 Other accrued expenses 7,005 4,246 Total accrued expenses and other $ 57,480 $ 78,281 8 (a) See Note 2. Divestitures , for further discussion. Non-current accrued expenses and other consisted of the following: (in thousands) As of March 30, 2025 As of December 29, 2024 Operating right of use liability $ 139,237 $ 132,995 Tax Receivable Agreement liability 24,419 24,272 Supplemental retirement and salary continuation plans 6,904 6,918 Long-term portion of an interest rate hedge liability 310 — Total accrued expenses and other $ 170,870 $ 164,185 8. TERM DEBT, REVOLVING CREDIT FACILITY AND OTHER NOTES PAYABLE Term Debt and Revolving Credit Facility On January 29, 2025, the Company amended its Term Loan B to refinance in full all of the $ 630.3 million outstanding term loans thereunder, reduce the interest rate from the Secured Overnight Financing Rate (“SOFR”) plus the applicable rate of 2.75 % to SOFR plus the applicable rate of 2.50 % and extend the maturity date from January 20, 2028 to January 29, 2032, as well as to make certain other changes. Other material terms of the Term Loan B remain unchanged. The Company recorded a loss on debt extinguishment of $ 0.5 million related to the refinancing of its Term Loan B in its Consolidated Statements of Operations and Comprehensive Income (Loss) for the thirteen weeks ended March 30, 2025. Term debt and revolving credit facilities consisted of the following: Debt (in thousands) Original Principal Balance Maturity Date As of March 30, 2025 As of December 29, 2024 Term Loan B $ 795,000 January-32 $ 630,335 $ 630,335 Real Estate Term Loan (1) $ 88,140 October-32 58,978 59,626 Equipment loans (2) $ 144,837 114,799 83,530 ABL facility October-27 50,009 168 Net impact of debt issuance costs and original issue discount ( 5,929 ) ( 5,078 ) Total long-term debt 848,192 768,581 Less: current portion ( 17,712 ) ( 16,097 ) Long term portion of term debt and financing obligations $ 830,480 $ 752,484 (1) Loan by City National Bank which is secured by a majority of the real estate assets of the Company ("Real Estate Term Loan"). (2) Equipment loans have varying maturities from June 2026 to April 2030. 9 Other Notes Payable and Finance Leases Amounts outstanding under notes payable and finance leases consisted of the following: (in thousands) As of March 30, 2025 As of December 29, 2024 Note payable – IO notes $ 12,069 $ 12,095 Finance lease obligations 9,524 9,707 Other — 100 Total notes payable 21,593 21,902 Less: current portion ( 6,788 ) ( 6,917 ) Long term portion of notes payable $ 14,805 $ 14,985 Interest Expense Interest expense consisted of the following: (in thousands) Thirteen weeks ended March 30, 2025 Thirteen weeks ended March 31, 2024 Company’s long-term debt $ 10,889 $ 11,782 Amortization of deferred financing fees 349 1,760 IO loans 232 289 Total interest $ 11,470 $ 13,831 9. DERIVATIVE FINANCIAL INSTRUMENTS, PURCHASE COMMITMENTS, WARRANTS AND FAIR VALUE Derivative Financial Instruments The Company uses interest rate swaps to manage its interest rate exposure on its Term Loan B and its Real Estate Term Loan. The interest rate swaps are recorded in the Company’s Consolidated Balance Sheets at fair value. See Note 8. Term Debt, Revolving Credit Facility, and Other Notes Payable . Warrant Liabilities As of each of March 30, 2025 and December 29, 2024, there were 7,200,000 private placement warrants (“Warrants”) outstanding, which are accounted for as derivative liabilities pursuant to ASC 815-40. The Warrants have a term of five years and expire in August 2025. A reconciliation of the changes in the warrant liability during the thirteen weeks ended March 30, 2025 is as follows: (in thousands) Fair value of warrant liabilities as of December 29, 2024 $ 33,048 Gain on remeasurement of warrant liability ( 11,016 ) Fair value of warrant liabilities as of March 30, 2025 $ 22,032 10 Purchase Commitments The Company has outstanding purchase commitments for specific quantities at fixed prices for certain key ingredients to economically hedge commodity input prices. These purchase commitments totaled $ 91.0 million as of March 30, 2025 and $ 61.1 million as of December 29, 2024. The Company accrues for losses on firm purchase commitments in a loss position at the end of each reporting period to the extent that there is an active observable market. The Company has recorded purchase commitment gains totaling $ 0.6 million and $ 0.8 million for the thirteen weeks ended March 30, 2025 and March 31, 2024, respectively. Fair Value The following table presents the Company’s financial assets and liabilities measured at fair value on a recurring basis based upon the level within the fair value hierarchy in which the fair value measurements fall, as of March 30, 2025: (in thousands) Level 1 Level 2 Level 3 Total Assets: Cash and cash equivalents $ 62,748 $ — $ — $ 62,748 Commodity contracts — 1,131 — 1,131 Interest rate swaps — 18,240 — 18,240 Total assets $ 62,748 $ 19,371 $ — $ 82,119 Liabilities: Commodity contracts $ — $ 221 $ — $ 221 Interest rate swaps — 310 — 310 Warrants — 22,032 — 22,032 Debt — 848,192 — 848,192 Total liabilities $ — $ 870,755 $ — $ 870,755 The following table presents the Company’s financial assets and liabilities measured at fair value on a recurring basis based upon the level within the fair value hierarchy in which the fair value measurements fall, as of December 29, 2024: (in thousands) Level 1 Level 2 Level 3 Total Assets: Cash and cash equivalents $ 56,138 $ — $ — $ 56,138 Commodity contracts — 89 — 89 Interest rate swaps — 25,043 — 25,043 Total assets $ 56,138 $ 25,132 $ — $ 81,270 Liabilities: Commodity contracts $ — $ 1,434 $ — $ 1,434 Warrants — 33,048 — 33,048 Debt — 768,581 — 768,581 Total liabilities $ — $ 803,063 $ — $ 803,063 10. CONTINGENCIES Litigation Matters While the Company is involved in litigation and other matters incidental to the conduct of its business, the results of such matters, in the opinion of management, are not likely to be material to the Company’s financial condition, results of operations or cash flows. Guarantees The Company partially guarantees loans made to IOs by Bank of America for the purchase of routes. The outstanding balance of loans guaranteed that were issued by Bank of America was $ 63.5 million and $ 63.5 million at March 30, 2025 and December 29, 2024, respectively, which loans are accounted for as off balance sheet arrangements. As discussed in Note 6. 11 Notes Receivable , the Company also sold notes receivable on its books to Bank of America during fiscal years 2024 and 2025, which the Company partially guarantees. The outstanding balance of notes purchased by Bank of America at March 30, 2025 and December 29, 2024 was $ 10.1 million and $ 11.7 million, respectively. Due to the structure of the transactions, the sale did not qualify for sale accounting treatment, and as such the Company records the notes payable obligation owed by the IOs to the financial institution on its Consolidated Balance Sheets; the corresponding notes receivable also remain in the Company’s Consolidated Balance Sheets. The maximum amount of future payments the Company could be required to make under these guarantees equates to 25 % of the outstanding loan balance on the first day of each calendar year plus 25 % of the amount of any new loans issued during such calendar year. Additionally, the Company guarantees loans for the purchase of routes made by two other banks. The outstanding balance of these loans was $ 1.3 million and $ 1.5 million at March 30, 2025 and December 29, 2024, respectively, of which $ 1.1 million and $ 1.3 million was included in the Company's Consolidated Balance Sheets at March 30, 2025 and December 29, 2024, respectively. The maximum amount of future payments the Company could be required to make under these guarantees equates to 25 % of the outstanding loan balance. All of the above IO loans are collateralized by the routes for which the loans are made. Accordingly, the Company has the ability to recover substantially all of the outstanding loan value upon default. 11. SUPPLEMENTARY CASH FLOW INFORMATION (in thousands) Thirteen weeks ended March 30, 2025 Thirteen weeks ended March 31, 2024 Cash paid for interest $ 18,097 $ 24,424 Refunds related to income taxes $ 39 $ 22 Payments for income taxes $ 1,168 $ 15 Finance lease additions $ 570 $ 1,763 Operating lease additions $ 11,434 $ 3,049 The Company presents the gain on the sale of disposals of property and equipment, and the gain on the sale of routes within (Loss) gain on sale of assets within the Consolidated Statements of Operations and Comprehensive Income (Loss) and Consolidated Statement of Cash Flows. 12. INCOME TAXES The Company is subject to federal and state income taxes with respect to our allocable share of any taxable income or loss of Utz Brands Holdings. LLC, an affiliate of the Company (“UBH”), as well as any standalone income or loss that UBI generates. UBH is treated as a partnership for federal income tax purposes, and for most applicable state and local income tax purposes, and generally does not pay income taxes in most jurisdictions. Instead, UBH taxable income or loss is passed through to its members, including UBI. Despite its partnership treatment, UBH is liable for income taxes in those states that do not recognize its pass-through status and for certain of its subsidiaries that are not taxed as pass-through entities. The Company has acquired various domestic entities taxed as corporations, which are now wholly owned by us or our subsidiaries. Where required or allowed, these subsidiaries also file and pay taxes as a consolidated group for federal and state income tax purposes. The Company anticipates this structure to remain in existence for the foreseeable future. The Company recorded income tax benefit of $ 0.6 million and expense of $ 26.5 million for the thirteen weeks ended March 30, 2025 and March 31, 2024, respectively. The effective tax rates for the thirteen weeks ended March 30, 2025 and March 31, 2024 were ( 12.4 )% and 91.7 %, respectively. The Company’s effective tax rates differ from the federal statutory rate of 21% primarily because UBH, which is a partnership, is not taxed at the entity level, and is required to allocate some of its taxable results to the holders of noncontrolling interests ("Noncontrolling Interest Holders"), as well as state taxes and the fair value impact of warrant liabilities. The Company’s effective tax rate for the thirteen weeks ended March 30, 2025 was 29.4 % before consideration of any discrete items. During the thirteen weeks ended March 30, 2025, the effective tax rate was impacted by statutory state tax rate changes, which resulted in a discrete tax expense of $ 1.1 million. The Company regularly evaluates valuation allowances established for deferred tax assets (“DTAs”) for which future realization is uncertain. The Company assessed the available positive and negative evidence to estimate whether future taxable income would be generated to permit the use of existing DTAs. As of March 30, 2025, a significant piece of objective negative 12 evidence evaluated was the twelve-quarter cumulative loss before taxes. Such objective evidence limits the ability to consider other subjective evidence, such as projections for future growth. The Company determined that there is uncertainty regarding the utilization of certain DTAs such as the investment in UBH, federal operating losses subject to annual limitations due to “change in ownership” provisions, and state net operating losses where the Company does not expect to continue to have nexus. Therefore, a valuation allowance has been recorded against the DTAs for which it is more likely than not they will not be realized. The Company has DTAs related to its investment in UBH that are expected to be realized in the ordinary course of operations or generate future net operating losses for which a portion will have an indefinite carryforward period. Additionally, the Company has deferred tax liabilities (“DTLs”) related to its investment in UBH that will not reverse in the ordinary course of business and will only reverse when UBH is sold or liquidated. The Company has no intention of disposing of or liquidating UBH and therefore has not considered the indefinite lived DTL as a source of income to offset other DTAs. In weighing positive and negative evidence, both objective and subjective, including its twelve-quarter cumulative loss, the Company has recorded a valuation allowance against its DTAs related to net operating losses and deductible book/tax differences and recorded a DTL primarily related to the book over tax basis in the investment in UBH that will not reverse in the ordinary course of business. The Company considered that an indefinite lived DTL may be considered as a source of taxable income for an indefinite lived DTA; however, given our indefinite lived DTL will only reverse upon sale or liquidation, the Company determined that it was more appropriate to record a valuation allowance against a portion of its DTAs. The amount of DTAs considered realizable, however, could be adjusted if estimates of future taxable income during the carryforward period are reduced or increased or if objective negative evidence in the form of cumulative losses is no longer present and additional weight is given to subjective evidence such as projections for growth. As of March 30, 2025, tax years 2021 through 2025 remain open and subject to examination by the Internal Revenue Service and the majority of the states where the Company has nexus, and tax years 2020 through 2025 remain open and subject to examination in selected states that have a four-year statute of limitations. Upon audit, tax authorities may challenge all or part of a tax position. A tax position successfully challenged by a taxing authority could result in an adjustment to our provision for income taxes in the period in which a final determination is made. The Company did not maintain any unrecognized tax benefits as of March 30, 2025 or December 29, 2024. See Note 14. Equity for a discussion on distribution requirements to UBH members regarding income taxes on their flow-through income. Tax receivable agreement liability Pursuant to an election under section 754 of the Code, the Company obtained an increase in its share of the tax basis in the net assets of UBH when it was deemed to purchase units of UBH from a third party then holding common and preferred interests of noncontrolling interests and purchased units of UBH from noncontrolling interests in our business combination in 2020. Following the 2020 business combination, the Noncontrolling Interest Holders have the option to exchange common limited liability company units of UBH ("Common Company Units") along with the forfeiture of a corresponding number of shares of Class V Common Stock for corresponding number of shares of Class A Common Stock. The Company intends to treat any such exchanges as direct purchases for U.S. federal income tax purposes, which is expected to further increase its share of the tax basis in the net assets of UBH. The increases in tax basis may reduce the amounts the Company would otherwise pay in the future to various tax authorities. They may also decrease gains (or increase losses) on future dispositions of certain capital assets to the extent tax basis is allocated to those capital assets. The Company entered into the Tax Receivable Agreement in connection with our business combination in 2020 (the “Tax Receivable Agreement” or “TRA”), which provides for the payment by the Company to Noncontrolling Interest Holders of 85% of the amount of any tax benefits realized as a result of (i) increases in the share of the tax basis in the net assets of UBH resulting from the business combination and any future exchanges by Noncontrolling Interest Holders of shares of Class V Common Stock for shares of Class A Common Stock; (ii) tax basis increases attributable to payments made under the TRA; and (iii) tax amortization deductions attributable to the acquisition of Kennedy Endeavors and the election to treat the transaction as an asset deal for tax purposes. The rights of each party under the TRA other than the Company are assignable, subject to certain restrictions. The timing and amount of aggregate payments due under the TRA may vary based on a number of factors, including the timing and amount of taxable income generated by the Company each year, as well as the tax rate then applicable, among other factors. As of March 30, 2025 and December 29, 2024, the Company had a liability of $ 24.5 million and $ 24.4 million, respectively, related to its projected obligations under the TRA, which is reflected as current and non-current accrued expenses in the Consolidated Balance Sheets. 13 13. SEGMENT DATA The Company operates in one reportable segment: the manufacturing, distribution, marketing and sale of snack food products. The Company defines reporting segments as components of an organization for which discrete financial information is available and operating results are evaluated on a regular basis by the chief operating decision maker ("CODM”) in order to assess performance and allocate resources. The CODM is the Chief Executive Officer of the Company. Characteristics of the organization which were relied upon in making the determination that the Company operates in one reportable segment include the similar nature of all of the products that the Company sells, the functional alignment of the Company’s organizational structure, and the reports that are regularly reviewed by the CODM for the purpose of assessing performance and allocating resources. The CODM uses segment income/loss to evaluate income generated from the segment in deciding whether to reinvest profits into the segment or alternatives such as for acquisitions or to pay dividends, and to monitor budget versus actual results. Thirteen weeks ended March 30, 2025 Thirteen weeks ended March 31, 2024 Net sales $ 352,084 $ 346,523 Materials 159,587 159,343 Conversion costs (a) 45,132 47,325 Other cost of goods sold (b) 29,135 20,282 Gross profit 118,230 119,573 Delivery (c) 23,525 21,849 Marketing (d) 4,565 3,501 Selling expenses (e) 49,175 48,316 Administrative expenses (f) 35,949 35,782 Total selling, distribution, and administrative expenses 113,214 109,448 Gain (loss) on sale of assets, net 660 ( 470 ) Income from operations 5,676 9,655 Gain on sale of business — 44,015 Interest expense ( 11,470 ) ( 13,831 ) Loss on debt extinguishment ( 531 ) — Other income 362 910 Gain (loss) on remeasurement of warrant liability 11,016 ( 11,808 ) Other (expenses) income, net ( 623 ) 19,286 Income before income taxes 5,053 28,941 Income tax expense (benefit) ( 625 ) 26,544 Net income $ 5,678 $ 2,397 (a) Conversion costs include direct labor, indirect labor, and overhead expenses. (b) Other cost of goods sold consists of logistics and other charges. (c) Delivery charges related to amounts to ship to distribution centers, end customers, and transfer costs between facilities. (d) Marketing expenses include customer marketing through traditional media, digital and eCommerce, social media, sponsorships, and other costs such as agency costs, and market research. (e) Selling expenses include people costs, selling operations, co-op advertising and other customer expenses, broker fees, royalties, and other selling related costs. (f) Administrative expenses include administrative people costs, administrative operations, taxes, fees, and other administrative costs, offset by reimbursements from the transaction services agreements described in Note 2. Divestitures . 14 14. EQUITY In January 2025, the Noncontrolling Interest Holders exchanged 2,000,000 UBH units together with the surrender and cancellation of the same number of shares of Class V Common Stock for an equal number of shares of Class A Common Stock. The Company did not receive any proceeds as a result of this exchange. 15. EARNINGS PER SHARE Basic earnings per share is based on the weighted average number of shares of Class A Common Stock issued and outstanding during the periods. Diluted earnings per share is based on the weighted average number of shares of Class A Common Stock issued and outstanding and the effect of all dilutive common stock equivalents and potentially dilutive share-based awards outstanding during the periods. The following table reconciles the numerators and denominators used in the computations of both basic and diluted (loss) income per share: (in thousands, except share data) Thirteen weeks ended March 30, 2025 Thirteen weeks ended March 31, 2024 Numerator: Net income (loss) attributable to common stockholders $ 7,502 $ ( 3,990 ) Denominator: Weighted average Class A Common Stock shares, basic 85,721,393 81,389,465 Dilutive securities included in diluted earnings per share calculation: Warrants 1,204,562 — RSUs 392,877 — PSUs 215,687 — Stock options 821 — Total dilutive weighted average shares 87,535,340 81,389,465 Basic income (loss) per share $ 0.09 $ ( 0.05 ) Diluted income (loss) per share $ 0.09 $ ( 0.05 ) Weighted average Class V Common Stock not subject to earnings per share calculation 55,656,692 59,349,000 Net (loss) income attributable to noncontrolling interest $ ( 1,824 ) $ 6,387 The diluted earnings per share computation excludes the effect of certain Warrants, restricted stock units ("RSUs"), performance stock units ("PSUs") and stock options granted to directors and management that convert to Class A Common Stock upon vesting or being exercised, as their inclusion would have been anti-dilutive. Anti-dilutive securities excluded from diluted income per share calculation are as follows: Thirteen weeks ended March 30, 2025 Thirteen weeks ended March 31, 2024 Warrants — 2,548,053 RSUs 400,612 417,011 PSUs 411,990 263,975 Stock options 633,007 33,670 Shares of the Company’s Class V Common Stock do not participate in earnings of the Company and, therefore, are not participating securities. The PSUs and RSUs were not considered participating securities despite the holders of these stock-based compensation awards being entitled to participate in dividends declared on Class A Common Stock, if and when declared, on a one -to-one per-share basis, because the dividends are only payable upon full vesting of the awards, and as such, the dividend is forfeitable. As of March 30, 2025 and December 29, 2024, the Continuing Members held all 55,349,000 and 15 57,349,000 shares of Class V Common Stock issued and outstanding, respectively, and also held an equal number of units of UBH, which comprise the noncontrolling interest. 16. SUBSEQUENT EVENTS The Company performed a review of events subsequent to the balance sheet date through the date the financial statements were issued and determined that there were no such events requiring recognition or disclosure in the financial statements. 16