UTZ - Earnings call transcript Q2 2021

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Operator

Ladies and gentlemen, thank you for standing by and welcome to the Utz Brands Inc.

Second Quarter 2021 Earnings Conference Call. At this time all participants are in a listen-only mode. After the speaker's presentation, there will be a question-and-answer session. [Operator Instructions].

hand over to Mr. like I'd the to conference Now Relations. President Kevin Vice Investor Powers, Senior of Sir, go please ahead.

Kevin Powers

and us today. morning Good thank you for joining

the Officer. Dylan Cary On are Executive today and Officer; Lissette, Devore, Chief Financial Chief call

Please meaning these During this make expectations to based Utz Federal actual may refer differ call and are and forward-looking involve Laws. statements described management's uncertainties events of that quarterly materially factors within These could risk forward-looking Securities on and the most statements Brands' filed actual non-GAAP press with management statements. Please and report the release measures. results will in current from risks those the and from those to as in risks implied detailed Commission, company's morning risks today highlight this certain the well a differ any today. for materially as the made Securities or forward-looking statements issued discussion note, expressed the cause highlighted in remarks could in management's financial of Exchange that recent

earnings the Our reconciliations results the non-GAAP to numbers the of provided GAAP to non-GAAP comparable numbers financial the and measures. also GAAP release presents

Utz's the Relations also company slides on presentation additional website. financial Finally, information, posted are prepared supplemental which and has Investor

call webcast to turn these the to during You to And like I'd also website. may Dylan? now, will want refer available call and of be to today's is call. it slides archive This being an on Dylan. our over

Dylan Lissette

quarter to welcome second and earnings everyone morning, our Good Kevin. call. Thanks

we impact quarter. COVID-XX sales the a continue year. on prior to momentum begin basis few Let's on lap from quarter, second two with a the net our the messages as In in key year the gain

X.X% in the sales that which retail QX CAGR and by versus are our COVID-XX on negatively a to were beginning X.X% increase Our growth also strengthen we XXXX. an IRI sales net sales and From quarter. see most from two-year X.X% was impacted accelerated to basis, in first an perspective, X.X% increased in channels

service digit sales like food last our double with example, other XX% and versus growth. year increased For strong nearly discount seeing areas specialty

expect heard of the year, broad to with having our into on economy While of the is sales continue a around customers you've our we what momentum Consistent chains. transportation the supply inflation. commodity, costs key are recovery to higher industry, US and higher labor originally the is based the to cost strong than second impact food the half serve largely input increasing we expected. This are due and our

are please reducing well fiscal full but will XXXX are across As we these the will that aware a to headwinds, we costs, the outlook in actions are our the and actions the result, of these steps pricing increasing leaning initiatives pressures necessary mitigate EBITDA with inflation initiatives to productivity into benefits and costs these benefit see offset benefit as meaningful second and be lag are of our adjusted been we aggressively into network, year half we that On clear, be initiatives carry-over XXXX. our we the our noted have previously, currently of productivity taking note, for XXXX. To pricing and underway. these

in believe as can our the us makes has snacking revenue in M&A we capitalize pure to our transformative to consolidator platform small potentially opportunities. tuck-ins, remain and the there proven is focus prioritize to meaningful inherent play cost synergies. medium-sized optionality we and these future on long-term strategic our generate through snack logical category We larger consider both acquisitions salty and continued we and or our manage growth focused opportunities opportunities. as environment, brands, scalable we continue the growth As our of investments our is this significant, health on Among platform

channels our M&A to our presence of and geographic those increase either course, will strong categories expansion, businesses or synergies. that continue facilitate deliver that sub on efforts focus in We key

acquisition our prioritize to strategic goals. opportunities remains are that will accreative very to and continue we long-term Our pipeline and robust

announced and promoted to on bottom our changes, changes organizational provide and these with Chief Lastly, position are These continued Accounting Cary to executive our Both we EVP and Officer. of structure Financial line will Finance changes accelerate Ajay XX, being ability current strengthen optimal Among our us effective top Chief July our organization. to October the to Devore grow. this Officer promoted that and X. promotions will leadership best us to drive grow Operating being is to Kataria, team is

Shane to Officer. In to after July addition, and Chambers as Officer promoted Growth right we welcome Jim Theresa our General Chief Xth, Sponaugle People Counsel, Shea promoted Chief

of the to sales positive the the XXXX. in was offset net mix. second and acquisitions reflects the quarter, lapping numbers This grew in quarter, contribution the COVID-XX increases, which growth XX% partially sales second of price the year the quarter peak Turning our pronounced by were from in impact most prior from over which

grew In and as margins the EBITDA earlier. key I was cost XX% by XX% addition, impacted profit gross adjusted input described adjusted increases, were

in Brands a marketing In as that we addition, long-term I'll the us company. given the for performance EBITDA note that invest growth, our prior the year period, well public didn't as more in XXXX, as spend costs quarter in was reflects in exist company private adjusted higher that our Power

brands on pandemic in sales given to of COVID-XX significant trends evaluating with first we the that and indicator of results let's our the Salty early the the two Now basis year last the quarter, retail year, our results. Snack believe months recent turn versus a overall best both outperformance is IRI Consistent performance. category of

are rates period continue move throughout as of accelerate we COVID-XX peak the to that the two driving year. strong locked growth year we stocking we XXXX, As pantry

basis, period, with XX points. basis Salty Snack accelerating is over outpaced XX-week on a two the which for XX growing to July CAGR for April Our year Brands, sales XXXX, X.X% Power versus by period both then momentum XX, the week ended X.X% the of category XXX and broader

we our emphasis foundation declines our brands. versus X% these brand periods, have continue slowed time even reduce X.X% minus same the during to to on Importantly, as minus

in end, strategy transition opportunities helps have we the as mentioned our launching that by is space is and times we away scale investments Foundation increasing calls, when Brands towards move many Brands Power on spend key innovation As working in focused part from occurs the will the through or previous and This faster Brands driven Foundation acquire the the Brands for these inserting of e-commerce brands an exist. example, acquisitions, are acquisition, to are and those portfolio by which which on innovation digital and to growing into worked Power rationalize and marketing key to launched acquired in be the market. and our actively and snacks introductions. significant Conagra To D.S.D the we focus and including right-size in Power on nationally, capitalize Brands, amplify believe white can that that us Vitner's

sub drug of our in in Southeast our CAGR key quarter, Salsa all year and to Turning and we the continue drivers two Queso. five grow in a to in categories sales

chips Rinds, XX% overall our also comprised We share of retail gained about chips, sales. during and the potato Pork across which tortilla period

case as than addition, our of Brands category as we evaluate across growth ourselves on gains in as delivered greater our major we five share In emphasis four of two-year subcategories, well in our our Brands, market and Power brands. Power

expansion. progress During geographic the quarter, also we driving made significant

Power areas large and US we to Brands' VR expansion across platform. and focus emerging the in continue drive our growth continue geographies on We our population to

to X we July by basis double-digit basis Utz emerging both points ended period XXX XX-week two on outpace year and growth for points drove the portfolio category the for Power XXX Brands, a basis the expansion approximately total which and each geographies, area. and CAGR in For our the

emerging insignificant opportunities. As approximately $XXX noted gains percentage the believe and point with geographies in markets sales our retail every million incremental these one in we previously, revenue of expansion of share opportunities representing

of data, that the we we we improvement both opportunity continue core heavily on good core be core. of to a our And which and the this drive growth root. total category. category gap the over the focused behind to that remained two And are is years, focused our for in near of of of see our said, on factors In two do throughout to that These of close as weighted targeted to is the two our impact improve actions we primarily Looking set performance being area foundation thirds gap improvement to and this last IRI in to accounted brands, our to move portfolio year. take our about noted our the trends term we have starting signaling declines beginning results are executing core, analysis as combined health the brand due performance to the our more beginning at and to are are and in QX, category. our our

Slide rates growth over quads, the in later the of on four in are CAGR wrapping very addition, brand on at on with year can solid with results. seven, the the XX the we growth six the insights look the on border growth. border a retail In deck, our you a core up sales basis, week see seeing channel our last of two speaking significant I'm of

we convenience in are in remained and the channel, major the drive retail to making opportunity sales about the continued nearly well club to growth both grocery sales the and channels, category, overall important And brands with underpenetrated the, the sales two in excited year which X.X% in X.X% continue namely as growth We share growth our versus underperformed, and our the growth and X.X% progress in power through a to the QX and basis, our Tyler gains most these accelerated to category double-digit gap are year reduced outpacing approximately of positive growth. of was as X.X% half. and for channel category XX% is channels every across future brand grocery, mass are while we C-store mass our two

very look this convenience sales And sharing around on as nearly grew dynamic you resume We CAGR opportunities the our year growth XX% continues country, nearly on later. channel two trends about are excited basis. and our more improving and a in forward year, and to store this with year travel X% over are to

key States opportunity strengthening space expanding distribution are Western remains And the white us. We for and distributor relationships. United a

to the we building of that excited ahead several are second progress areas. year, half Looking sales making momentum about we're and truly our the across is the

highlights. few a just are Here

more during to comparison prior We to the period are we a second normalized year. demand loading period peak COVID-XX the the surgeon quarter beginning enter XXXX. are of And extraordinary in lapping pantry

We we the QX mass strike on and have now gains space in our portfolio. border coming broader with a the of retailer, critical positive and facing leverage as

with C-store quickly remains current rebounding us Our large a food X.X% channels opportunity for a only share. and service channel are and C-store

expect other to finishing for amongst muted introducing Southwestern like on we bean power discs season ideas. We innovation expected and by strong finally, spins sales holiday are border twisters and holiday COVID-XX in was ranch, didn't CAISO XXXX tortilla last like the new sales the chips grow holiday. well say our as zap the I was traditionally on-trend year I to brand data. and onboarder jalapeno for with season deliver a innovation as key through let's accelerating retail our as versus And of review strong us flavors

You our is finally, improving as trends recent power trickle sales can is final make see the progress. few Cary, to the our IRI foundation turn a week brands remarks and well. Nulo with just on And that I see performance four building before the call by acquisition over I'll momentum brand

XXXX known are reminder, many XX, us. continue and being from And milestones the, As standpoint, on on on acquisition teams on border hit to acquisition Truco was well closed our on this also the history in work the of of largest together. integration an the we the December border our a

across about to to both And brand. the together in unlocked a for the market and the unlock this the and the And convenience this two even multiple a revenue feature distribute plus more the, from the for the the effective transition to us, on increase six our week vertically of believe DSD these route board will and on for in organizations gains sales system and leveraging border bring important believe grocery this DSD abound half chips and help note for Salesforce growth we dollar ago will seeing ACV that even have revenue brand are we tortilla states It's opportunity a a and this system to and revenue XX% drive as new we manufacture channels, are are August third geographies distribution opportunities to synergies. as for remain platform. we number only distribution we X, on that opportunities. border we big more amplified such drug, across to a strong this distributor with the brand. correlates and We drive And brand party of see within on is our recent months

numbers you note very core, progress and As a XX% XX% continued will the on in strong recent and two CAGR chart, the to our range the week in climbing both year accompanying emerging with show four results on two basis as trends into growth well expanding. as year plus

the having with And the we elevated demand some QX Birmingham production integration initiatives. compliment efficiencies second insourced and future handover of our network. into and we're on our XXXX support vertical current plant and plans bring to the Finally, border into to even production more in this both XXXX Hanover factoring within half command of our recently

seeing retailer in be about as introduction brand equity forward market. the over turn national the And we results beyond subset Financial on excited billion call Tia we of bring software like test believe our Cary? our Devore, can software border border Cary a we We'll the very the portfolio expand growing all excited to to $X.X the to of are look the beyond testing Finally, they use, Officer. geographies. border the And short, continue Chief our stores, of to I'd we're to in now would opportunities the which across a brand. into about also to

Cary Devore

of everyone. and sales. at XX% was Dylan increased adjusted at XX% good In SG&A million XX.X% morning, second the adjusted EBITDA to or adjusted of gross sales X.X% margin you, quarter, net $XX.X consistent to Thank million XXX.X the increased contract sales XX.X%

As earlier, well significantly inflation adjusted as originally performance reflects our Dylan expected as higher than higher marketing mentioned EBITDA spend. we

the million. EPS share us more and per with year, shares diluted in power finally fully on higher invest we private converted in based basis $X.XX company adjusted as prior our increased million XXXX a XX adjusted income in public As to XXX brands and XX.X% didn't costs company, given an net was that on exist of

$XX.X our the our outstanding turning sheet the of combination key our as share non-GAAP from as private net end reflects combination Collier warrants shares. with our business count we proceeds cash liquidity sales, reminder, first placement points million the routes. to $XXX million holdings, a good undrawn more remained cash and to approximately with of combined In $XX credit the of related other soon at half an As and the of cash of operator than note. and liquidity settlement providing Creek million equivalents quarter, primarily XXXX, of And realized facility balance asset revolving independent resulting total in of from

transaction from executed the In of lease moving million. capital X.X was addition, recoup $XX further sale balance in sheet fixed rate quarter normalized, favorable leaseback or expenditures net financing, million EBITDA million debt we capital $XXX.X a prior end and $XXX.X adjusted to cash times down blocking

financing And credit proceeds term term a $XX ABL with plus Lightboard close facility of pricing revolving was pay a completed tack we foods to which use primarily and reminder, we the XXX pricing addition, we the the terms just vitners XXXX, cash with down previously a loan our Steeda used and consistent are acquisitions. In loan January, and in on as executed the million the in to no floor.

capital $XX.X our Finally, the the to XXXX first the half And expenditures to in half of expect we initiatives. year. support accelerate million are in of productivity second this

IO COVID-XX to The the was in pandemic. basis was reduced net in growth mix offset early significant our driven points. lapping And weeks which partially X.X% X%. the declines of to detail, by acquisitions volume back of of and XX.X% some volume decline sales the impact route by the P&L quarter primarily sales additional growth of net of our the the due rate Moving conversions, for price by XX growth

of quarter on These growth in year in forma adjusted acquisitions quarter, acceleration SG&A, XXX the for X.X%, volume basis to basis the net offsetting. to basis productivity largely margin basis P&L by headwinds Truco sales was pro XXX improvement moving basis contracted by mix of which X.X%, EBITDA of rate basis a quarter transportation of was basis of Our of and points, an The XXX costs decrease price drivers related two CAGR XX the are XX points. decomposing. rate from EBITDA points driven point drivers margins adjusted excluding points, positive points first second XXX positive include XX% the down

prior As higher were increases of transportation we inflation spot left to costs. transportation, COVID-XX higher XXX commodities, pronounced pantry loading the and oils contract basis due year largely commodities. freight from Inflation And cooking which and points, includes packaging. was labor within rates and most market cost and at

out sold transportation income to pressure due frayed expected costs, in hedged. largely be largely our the goods worse cost a was costs statement SG&A are not our in on cannot reminder, and that As expense than rise are margin quarter in in second included which a while rapid we of

accidents Our the confident our will are the pricing of to in taking and hold we are margin productivity improve second half end. that performance year. And

We for through improve the initiatives sales from first improve additional half productivity cost benefits of the to the year, realization the volumes, margins second expect combination price and of relative actions. half in to our higher net

the continue the the that quarter four our of 'XX third low half we quarter be year And margin and expect high that leverage XX% second multiple us, reflects the opportunities XX% my a From We carry prioritize during consistent the quarters, to quarter, fiscal half margins sales pipeline highest XXXX. to than will the forward at be creative of quarter long-term policy actions margins we our looking to at which sales the the to also be financial of second half and will increase the remains and in XX third continue end benefit for to are from we to are expect perspective, our fourth a the believe net to profitability from a will with at third end enhancing. in pricing This with range seasonality. of And fiscal at margins expect line productivity the is benefits to tenure quarter we lower between acquisition to half, and ratio. target in cost be building first range. and perspective typical

our are to while the we and our Now turning to and expectations outlook half the year, for of full demand sales strong remains track second on targets. deliver year

adjusted year adjusting than EBITDA are environment. our inflation challenging higher reflect in very outlook to full We a planned

higher logistics incredible job manufacturing higher are This our for coming is Our plants a cost anticipated. unfortunately, delivering and doing teams an due across but network it's our at than customers, primarily we the inflation, year. start to for the now certain expect plus was as inflation as commodities, year, trends. rising, commodity commodity well expectation but inflation given to X% for Original we X%

manage addition, outbound our labor higher are now challenging steps taking the we supply expect costs costs. being costs transportation That higher said, input In to and chain industry-wide we given dynamics. aggressively

mentioned, guidance to second lagging to year on reflect it's million are between full As this all as EBITDA fiscal and higher Dylan further a expect result, $XX put incremental to million. adjusted million. XX half we $XX pro-forma lowering XX XXXX compare recent the pressures. our to million, over range those XX second $XX our our EBITDA of term benefits we for inflation, but the to and half further year of we well of in are the half implied of And acquisitions When productivity XXXX, underway our initiatives look inflation XXXX year context track, pricing near second are cost into

entirely We of offsetting inflation. bucket four are higher nearly this

have [indiscernible]. in upon XXXX, and it baseline volumes. combination doing higher provide drive fiscal pricing performance to through over to meaningful strong incremental this all we'll a layer will excluding which benefit are sales bringing together, We and productivity XXXX, a to margin Gov carry of a

expect We net to forma continue sales with XXXX sales. full year be net to consistent of pro XXXX

versus and versus $XX on include and detailed depreciation expenditures projects efforts, accelerate due the commodity million our continue XXXX as the As we a prior list expectation day a to week XXXX, to effective Truco on now net XXX HK $X.XX of capital of even our that tax to asset fiscal three is you'll a two to a expect growth deals And to approximately that expectations XXXX lowering $X.XX. from assumptions to outlook XX% of Steeda about raising that organic which organic XXXX tax of we rate align outlook We long-term earnings XXXX. slide modest X% drive to to cash we of were X% first XX our expect net X% reminder, growth for over $XXX of benefit. year, of our pro $X.XX to sales and to as to our bonus $XX fiscal own XX over with general to return forma assumes XX presentation, of to basis, is supports pro vitners million million productivity capital left a for Previous range for Anderson XX% fiscal inflation adjusted amortization adjusted million basis forma changed tax million soon in to as our the growth find our EBITDA. to above year on X% our sales on to of sales XXX acquisitions on grow EPS notable tax moving assumptions XXX year and higher have $X.XX to purposes CAGR and million comparison vendors increase the

reduced Finally, X.X to EBITDA raising like the for some we thoughts. back approximately leverage to turn call Dylan debt range I'd our outlook. times to And Steeda ratio adjusted account acquiring to and are net with now four the over the final to for

Dylan Lissette

Thank Cary. you,

you thank challenging the and such in our presentation, our incredible my for to I'd wrap for the environment. with to forth plus deliver conclude summary to perspectives we remarks put efforts few associates off the as like share As high-level to a first consumers XXXX up always customers

period, our to that larger by that total brands continue building our momentum and each are they're we growth, encouraged Second, sales, becoming and power two CAGR strong of the sales third. percent is fact retail drive a year

we're pipeline manage on building value so input cost we equity laser we our many enhancing leg are a that an many intact outlook creation doing and our robust of distribution, to remain brand positioned mindset growth, open deliver organic long-term continue and long-term for bottom remains challenging importantly, is environment, our Thank as focused top finally, value in remains driving in both a line And like relationships, to and our our for, pulling I'd actionable know strategy well we And with for questions. we M&A to the with our operator opportunities. ask creative to remain a important While through and shareholders. line customer you. now we the call for

Operator

Thank you. Parikh Oppenheimer. [Operator Your from of is first instructions] question the line from Rupesh

is now open. Your line

Rupesh Parikh

Good morning. taking questions. for Thanks my

any wanted cost starting the with of point? you this out cost sense you on think you've scenario And a whether balance of the then look transportation of worst at get for them key pressures, starting level year. cost to and your the case maybe So more at captured signs commodity for pressures, front off I to if

Cary Devore

thanks the prudent what we're question. Cary, in it's outlook then the in in for commodity capturing transportation we've of been terms Rupesh Yeah, and seeing year Hey, labor. for our and I think

think you if don't the of part second it? perspective your that then and repeating I question, look mind from

Rupesh Parikh

right peak relief now? is we see this transportation on at what the you it, you seeing to cost a or Have come have in started to type any of environment starting point, or front are and commodity

Cary Devore

fluid. it's think very still I Yeah,

and drivers is. to perspective terms relative overall I transportation how a of think in trucks and is issue there a certainly economy supply strong demand from the

So right fluid I remains And then to now still historical standards. the commodity from think a perspective, situation. elevated are, that levels a to are relative

demand, have sure commodities the enough strong. demand make best our can to supply So, or doing we're remains we we to and

So, is well as larger protected as team and working hard can perspective. making be sure from we're that the a we

Rupesh Parikh

baseline terms Okay, saw question, would the margins maybe a just you just in guys for the And, of EBITDA EBIT, XX% business. second be great.

that grow Now probably to, the potential this of the off rebound I to as next benefits it XX% closer base, there a you'll If pricing our now more is seems full maybe expectation XX% through? for you lower you're like, from think, or year. end flow see you for start year, around sharper

Cary Devore

too still I early think upside XXXX. now, it's call Yeah, much margin is very to the is, long-term what perspective, a I will look, from story say intact Right here.

grow year. to next expect We

capturing a expect that and putting higher benefit next we're be this we'll the be productivity pricing And partial meaningful place incremental and year here. only which in on. layer from a year year. carry-over There'll benefit significant will We on year, we're pricing that productivity then next

will So million synergy $X XXXX And, this relative in from perspective perspective, capture a of will much higher than there's least synergy year. from that at that acquisition XXXX. drop be XXXX to

So and we're perspective, and in synergy position. good pricing from a demand very a

but closer situation long-term just is on margin story still strong. end the variable to I still, and of data think -- get we the very come is year, need commodities the the we more points where those in the as at,

Rupesh Parikh

pass I'll you. Thank great. along. Okay, it

Operator

of is question from Lavery line the Sandler. next Piper Michael Your from

Your now open. line is

Michael Lavery

seeing it's of think when bit, a sort just geographies called that First emerging the parts your outpace to out you little how that got question, think part two core first, brands, we're and foundation just about expansion about and portfolio guess and wanted you you understand good I health. of the

that just the what piece versus comfortable foundation that and much that's funding another of On be give brands with would right? And aiming power assume guess I for what you're that the to is question one, precisely is, right that piece, improve the it trajectory stabilize how there, sense the might and expect it, can a can to two you you you like? us then look just of first

Dylan Lissette

to national our the take Dylan. Yeah, I on perspective, the think like can take you're very Those broad the like I'll brands strategic like This Sure. national brands, that that. brands question. right? national a From we Hey, basis. exactly a power the there's our thanks grow on are is it's for direction zaps, right. border, is

went across over You that the growth gaining we and white lot duly while or the of for opportunity three a the And to are going country emerging it and geographic some areas while aren't it new that versus or of are the go cases, in is noted the the but discussions areas -- there the expansion we been of night. their different we've a we or just A part last happen process operations. to are into introducing as These for the brands basis every doesn't And four years, brands of of two lot in areas. for and that space last those XXX that's their of we're and time engine couple six many infrastructure, routes, to new months their we acquiring power, that process, these kind get points. convert the in that into for a months. but to takes see from strategic category nine foundation

where we like four at If and really or and long-term for build we're that opportunity we can before noted a a to it innovate we good in of a XX very it week, people what makes week hit five doing bought is brand you years a were that during we're in to health compare we work it brand group. renovate of us. it. decided other pause XX it four can what seeing area XX that our the weeks, it thinking get we it today is an the COVID, to and we brands, a took week insights least of we're look rebuilding compare and how last as around a as So prioritizing progress, oriented or behind, Extraordinarily at for got XXXX year brain how that. then it it lot on the We've to kind into

which rod from part look in to work of that and core view core the is independent we're and is those a of distribution the that long the taking acquired, very a trying will We're out convert to are we those. our play infrastructure in we and of centers a long there drag and operations, salespeople bones, for as term. lot a much foundation there, on markets. that And lot at very is that's we've the a of basically operator there's doing brands the our long-term. foundation investing positive So of know converting happening and underway. core, just lot and change people And well We're

So happening lot that things are core. a improving are that there's that of

Of course, well. expansion the growing as as is noted, emerging you

see We're it. to looking improve. starting to we're So forward trends

you'll core. As is Truco there, in which brand is the brand, our exploding power a note

And so overall that of will brands also contribute the benefit to the and sort core. of long-term our

Michael Lavery

great. in and headwind gotten points Slide call basis in XXX color just basis in, like but then helpful the I but headwind growth on it this if XQ, the a that's of just on, on chance some XX, in, sorry to call enough, math, XX, you it's on haven't H of Really hundred with price. out point inflation looks slide and play Okay. two and that one more out That's

I'm moderated just I I way so some reconcile it, headwinds curious right guess those? other And have the is what to there reading that way and am or

Dylan Lissette

Mike. Yeah, we're different so comparing we're two comparing things,

then comparing And terms and right? XXXX. to the of of half XXXX So on of the comparing. first of XX, periods we're the QX QX we're oranges of nine, to apples in on and second it's it's, So page XX, half XX page comparing we're

Michael Lavery

Yeah.

missed I Sorry. that.

much. Okay. so Thanks

Operator

next Your question from of line Andrew Barclays. from Lazar is the

now is open. line Your

Unidentified Analyst

On a they for to lag the on your year markets. This while salty is category core snack Andrew. again, power basis, CAGR continue brands outpace did two category, Max the

any in out of improve you in through good actions and performance? last you've the a So brand the was you gap, summary, color to walk that other but the to a addressed set could maybe provide the us market your key this front, more of targeted drivers health core contributor progress that gap, called bit quarter

Dylan Lissette

very doesn't Max, question or behind term. right? happen view and in that builds It's to quarter. foundation category explanation to the want best between two-thirds had taking we really overnight, the So core of indicated we're that's the is existed a quarter long-term want create around is exists infrastructure the gap still what do growth again. attributable a, before the long second sales to we of that the the the answer F what growth core for Michael's sure. it similar in is that's we a I the for the growth what Dylan And is good is think Yeah, to our this story and in first

as we week good numbers week renovating XX described, where think the we and health as that, better are numbers week good XX in of I part So X health have than much seen the work.

been seeing go don't from need heavily something which power, an foundation discontinue may the from it as working bit we power and with through A shelf perspective, power and an and we But with a on make foundation overnight. we than have then on year to the So and as the on then transformation those brands improve the those we we right, brand from but definitely make core foundation, that a lot of we happen as innovation the a weighted to we are and things, of the marketing start taking hold. little invest is need we heavier take brand, need acquired that and it, we brand, migrate improve as will them, that that to national basis. behind replace a branding to it

invest that's the it's in place think that's our our cord. we a to markets independent operator, lot operators to effort have products we if systems markets, about to infrastructure to an the similar So you the that And independent have of core from in get, happening moving to, for were place. the to in core RSP positive very stores, in and manufacturing

to basis for retail and core, of million the a XXX that, half metrics relatively for the lot sales the in points the of the think but a that $X know about we One speak do I quarter quarter. I about a one core is

it on, So something a we occurs overall it's not quarter. percentage and not that immaterial, not given very that any is revenue in are of large necessarily not concentrating that our it's

Operator

Our next question is from is the line open. now Your of [indiscernible] line

Unidentified Analyst

more recovery you're getting in to it. going you're little giving understand fully 'XX, help and have guidance to and maybe I will about you Is where should want pricing be if just cushion or at, recovery, not the catching us made statement really caught do up favorable Just on comps on it's a about, ease levels, looking how know margin costs, where on XX, half, talk the try but because finally to have a strong you a that bit that to of or commodities to are understand up, first have you if you we some things just just especially actually input have more XXXX expect or could to ease tailwinds.

Cary Devore

I within right things really early What that control that in to though and speaking So, was call was the putting to I long-term are that, it's think we're our margin to drive 'XX now. too place growth.

we So margins fixed this grow because six grow business, obviously as overhead. we we're leveraging

next to trends right? expect momentum And wins. is and strong. customer year, volume we top grow The the line the So,

And view we're top capturing So year, we this pricing not that, to XXXX productivity hundred percent a in revenue a of good we're the and year. growth. of have on it this then putting

a there's next benefit And always layer year. big So incremental and pricing then we carry on over productivity.

synergy. good from So a through on we'll pull higher this pricing much be And next perspective year. expect year won't and than productivity we then be

I because And but commodities line, it's So will in earlier right we from and terms commodities early on I pricing, will point in year. see pricing to I and Right. the inflation of some a top and driving So is driving a levers line the the perspective think long-term top the margin commodities, have noted variable time, and still at all productivity in pulling delivery we really the control productivity where, too next strong And, things can and inflation be to at driving point labor those story we're, comes strong are that now call, think, the that sticky. right? very, very was we're non-question correct. and

will benefit margins so, And from that.

Dylan Lissette

this kick for Based top here been was decades, bit snack the a the and on set huge a behind a And the increases of the food the there bunch in the architecture, years Dylan, with lag coming especially weapons Wade little is trade, prices. commodity that. Thanks offset before out We of with on over just with being question. seeing is as increases into the of industry whole to and in come back then, spends, that. gear over marketing but XX price basically in the underlying environment that, we rationalization price we've of commodities improves we've seen our

one have we if many time, in the here those place, a time weapons in us, does the it we up hard year, long put would it think XX%, anybody but once was see like oil in that over something take a Once of that, for normally hopefully it we pricing, as the sat XX%, it sticky transcends corn take be a as to very long-term thought inflation we transcends, benefit XX%, XX%, and I not had weapons coming weight the past. that just the but even itself and out has for debates place.

Unidentified Analyst

Got it.

clear, you So just a a lag, price not peers. ceiling it the be versus to see completely have you

Dylan Lissette

Yeah, the just lag.

Unidentified Analyst

perfect. Okay,

little help me Second maybe and you a can bit. Dylan,

opportunity help question footprint, national understand the I story you There's now, mean, the core some so where and it four geographically, helps like biggest us it I Southeast brand. national so a that's the I'm you're that, Midwest? three but confidence? gives what is a on much is market, right that not seen in we seeing, takes then the share really off. Hey, maybe Is obviously lot it share a expands, you're we've in get well, the the you've So fundamental then it Is can expansion, this. or happening? of just after like of after it the on geographic Or such to certain this years, you been get the border gains stuff XX% why

out. kind you, opportunity, you map just a So Yeah. I'm of trying just understand, how it to how big it's big,

Dylan Lissette

Florida, areas for master over us purchased distributor third-party area growth I And you we tremendous year talked right. that we took it. seeing central where earlier we nailed of long-term the a a you. Southeast been bit in Thank little The think in the that back about has

itself, transcends think like are or there. brand said, in for coast about of us, And We're that the just areas, Mid-Atlantic the in seeing of Northeast to all the Atlanta the you and the we're of and build through east night, from it Texas. areas growth is known. it started occur Southeast, flywheel the, high happen growth growth migration but once you has is Midwest the those expansion to tremendous Southeast people really brand every tremendous where doesn't the these seeing moved If Carolinas, into a upon the begins the

As go for lot a snack, just see of us spoke consumers, And of going tremendous Salter largest to the mark growth of individuals, is after areas in entering with a in. the after about one point we metropolitan that country. that area a starting we'd for us large it's an lot

in really were the, white if C IRI our and store West, and zaps there pull like brands, growth there. business data the significant into see So the retail share to tremendous Midwest, really we into the growth the would in of that are and brands, we've Chicago, tremendous building seeing the, space we where amount just been west like Lux like a the up there's

a We're that, single we very grow that large as the grow like we're of tremendously. nice, seeing growth. is seeing digit seeing the portfolio plus brands So zaps let's our border look on mid, XX% brand across at

consumers, we the than, equity. we're marketing think that up with long-term that share on with know into behind more retail trying And perspective, and to opportunity, we on marketing geographic that QT And, of white really we are IRI, areas about trying that backing lot with that span, there's long-term because that where a abundance those just power did in last we're and a brands year. brand Spend growth a grow right? So think do we lens to invest we're and space just on, of can very resonating

Unidentified Analyst

question. Thanks so long the for color. much, sorry Great

Operator

question is of Your line Citigroup. Wendy next the Nicholson from from

now is open. line Your

Abigail Lake

My on Lake on is just question for first integration. Abigail Yeah. Wendy.

going on on take this does is so integration operational kind how far? bandwidth acquisitions of we'll how to have another then you acquisition? recent your the So comment when impact And can of the

Dylan Lissette

border with postdoctoral, February, December but intimately then and start half vitners more November in We fired acquired be first in in on in his in XXXX, We in me Anderson of on and the in new let rule, because of of he's the like June XXXX. HK so Carrie M&A, Yeah, second even we'll a involved the jump acquired our XXXX.

good we're these a and integrating team acquiring on acquisitions I'll HK. company. quickly of lot into a really very done we've So our as start at

have rationalize you rationalize beginning, the little While skews. portfolio, you the of sort bit dip you a a in as the always of

it's Now we on starting up. look you are And growing data if tremendously. to see momentum four that pick really brand, at recent and that XX week

the of border. sort be growth, long-term on there of We up we have, a things done to for cleaned on some As the legacy that Page kind needed of whole put XX. page

can in doing a right of everything the growing core, I growing It's think highlights growing the our in of cost lot you We're We're to there. some our vertically integrating it's see and it's tremendously. expansion. minds. There out. production take

big and in we're for which have as demands mentioned six a new As integration, we're vertical brand. right? to demand there more more new what unlock we terms big and we months, fixing through could brand a even to on two actually because that -- allow us we issue, handover We place XX as unlocking bought of future lines will that already make capacity. Steeda, in the as one next a produce, with I that's and the Birmingham mentioned, And to in in the the opportunities coming well with that that's

in the we to can are of more continuing that February. a a seeing sales our that's months going even So invest us. seeing expansion that ways sales that's we're tremendous that We're market operations for our, We're acquired it the backend business see continuing to that think really brands expand I good because into just for results We're that at there. look And our to market of, the there. results. great later. along of vendors. quite of integrated side and few share well on We We've

from bandwidth and M&A about I think it. the there too. And maybe just let really the we little So that look future the overall, it continue good to speak a bit and team at at exists Cary our I'll team's

Cary Devore

that out here month meet the a right. XX funnel before And hundred Dylan. teams laid running true office, all Yeah think that PMO Yeah. ran look, PMO. consistency there's and the make through the laid already out regular day we Thanks position, The plans our is the Every already business a integration on then to business business today. organization I that's that process plans XX, execution, and basis. sure experience still the acquisition the team the Right. running co the

And as today cost a So pleased to have sure anything perspective. don't then execution I M&A do a, our from with make as sales we pipeline from been. go-forward as perspective, a from miss ever I'm that we and

in, changes in down opportunity that October, to and those possible just structure, the tremendous think line kind wondering a COO if prompted shape I things opportunity management set We there's M&A changes a in bandwidth acquisitions to into the and even happen, as organizational make sure in for and that role help of integrating best of think I I'll the drive we're move do the were what us you other there have when are way. any you and need make. more

Dylan Lissette

functions right, job golden every, inboarding so very up DSD into October in doing since closely We Carrie took is investor connected many business, there. Theresa a more literally Truco. kind the fantastic day People is and of slowly recently worked to we've We sacks out About together I'll of acquired XXXX. acquired built executive more so XXXX. and, in Shea our of the team, in we that. in hired acquired as we team. role, that have invention time aspects Thank leadership and Conagra promoted we counsel Dylan. flake We on relations XXXX. Kevin general Powers in near every with this our term take single Officer he Jim the we've Sponaugle those in Chief Yeah, We I and a coming history the changes acquired and our on they're, announced our go that importantly back onboarding XXXX,

especially lot M&A activities. for and was project management And things together we've nice is the mean, value a done in fantastic in treasury I creation a in company. so, of to of amount And a knowledge, build value individual he

very our we business focus just which to on we forward, excited to go areas as unlock we're be. So his are of those going

also of an those background, well. background, really very that it joined background, So and years, been Chobani been excited accounting, four learning them running all XXXX, of standing fantastic our up integral background, again, PepsiCo overseeing since ERP company, public has he and has department and finance has acquisitions integrating since as a our

So that. the part of, orderly fantastic natural a in Jay for lead of really an is all progression. sort That's

got you. And a of just, really look latter like that so, going as the what I sounds October places business and XXXX, Thank putting really into to means the good best great. That in outcomes, sort of looked the forward right forward. it people we and with place. team into the XXXX in That's prepared feels half forward it's for we've for

Operator

is line question of Your next from Moskow Credit from Suisse. the Robert

is line open. now Your

Robert Moskow

Frito-Lay and and the Kellogg not snack the their commodity guidance alone like to for not is as Thanks cost as question. mandolins have cut having My of meaningfully inflation. perception big that had you're in you have, companies terms

their scale of wondering a the are, on that to access thing, my lacks are relation because doing way if, for I is same big big makes is is size maybe I'm it, little ones a the but question you think business reason routes here. the other there and the difference So of and to if to in cut part a you ones, visit purchasing do is scale the like, guess your, and the the expensive get are more other this freight just companies of to

Dylan Lissette

hard It's hard important for tremendously for, other do us Certainly Good scale companies to is said always don't question. Yeah. on, or what in it's scale we've snacking. do. comment

there's it's I but think there, a we're scale executing So possible benefit well.

is of, in supply mean, chain. terms different QX seen the animal supply a we've I QX what the think chain honestly, I than

part huge in there end dropped freight right? cases labor you've people, we're and more the spike the transportation demand for delivery inputs, out, having pressure having in got the all and And to COVID demand up, more As support right. pay so to for, commodities. freight the and So opened economy pay money spiked, and a across of we're as freight was more spike, to

the pay to We delivery sure we fuel to support make, order the and to ingredients for man. more can and in make have get

seeing, the I So, are pressures unprecedented. we're think

ourselves people. I doing tough, good but to we're a other tough executing, compare for think job me to

Robert Moskow

fully two to actions a inflation Okay. have to saying half And at early taken questions you therefore of trying too in I look your year, the that you far, does you I think of because XXXX, guess get now seen in next so it's and half there. know chance have the back that Are you've the pricing you've but the cover first prior mean also to to also, the first margins so you're that are you I XXXX? taken, catch we still up that

Dylan Lissette

obviously is our Right. P&L on next exiting dependent be year, the depends pricing, we'll obviously actually rate year. the this hit higher run inflationary this to than it the see environment. Well, on what going We year

So, year part next the is on and products top put it too, benefit meaningfully the productivity we our of cure as thing And as over is will increased well. that material. of then

doing us inflation is profitability, helping presented what know EBITDA then you meaningfully XX still of and kind variable your obviously So year L core P than like are business on track XX, outlook that you're popping the And, in way higher pricing whether original, in dollars XX. they with and total next will only in of back. productivity to the be the is

Cary Devore

the pricing then, continues mentioned say, and correct. the would productivity, recent have we're to will benefit saw the correct. 'XX, the and margin really obviously growth environment, and before Because, in just and see the I Back in Right. right. area I is unprecedented XX% of terms basis grow line based that jump. a a unchanged in 'XX my long-term, you because of inflation all But inflationary an in on commodities guide. nice usually top margin things Martins, most the when opinion, on can happens, We are a revenue in you from our story

future were weeks, on opportunities. hard as as the as So but it on timing. inflation we gauge margin we and It's term we're ever still to the and see we're precedent experiencing long it's bullish transitory we're just, do

Operator

line is question from the Last [indiscernible] Stephens. from of

open. Your line is now

Unidentified Analyst

this year. on in and the of of on half First pricing kind you're piggybacking taking Ralph, pricing back

as term pricing expect as other environment? encounter players actions relative it's, not your your think I raising grow a cities you think dynamic because you are ability that higher next to it's less entered the brands. early about but to this year, demand and I you how Long the do suspect price well,

Dylan Lissette

a Yeah, share the year that in in, There percentage to category what not It path category. is. Thank is it we rational of category the to just take we is the It It is very the we have a a rational pricing. snacking as, where time category with lowest it And rational of in leader a the as in The cognizant long very year is -- large price. to pricing be pricing, to Ben. the you. category. ability And take does. a has category a out. such right. fantastic to be continues are for grow

don't that the we short-term very only have right? long quarter to one that our in a term, benefit, want of changes We are things are competition. amongst So think cognizant us nature what to give we're do

changes portfolio this as are the We our to able year. make well to

commodity a long-term backwards a what And earlier I And XXXX, think that architecture. we've category, have seen that that's from benefit. we've as touched normalize now trends. with a placing I what our XX in place in to of XX% It update in and a or we to rational not long-term the skews is the pack portfolio mentioned is year seen. a and being go it XXXX of pressures does two

us carries We through. helps have our stickiness pricing in us that a in of lot

this. out So, history we've like hundred through a fuel petroleum-based products, got that some of year but working there, existed

who of We challenged brand. was to in in value we're situations. very team have a via the even price, for going the to brand continuing via dive try the in great in And drive long-term to architecture pricing, to best invest continue

beneficial our sticky overall to term, long think in plus it'll be nature long-term equity. us and I for So brand

Unidentified Analyst

moves how My sense. early around the, too fiscal to an think outlook. fact XX provided that we the we you certainty that uncertainty the question to the half the this of if the new outlook, back how be are is that versus a call much back year, higher less on morning, buckets meaning can to Makes update for be oil talk on guidance appreciating get would make maybe that costs you about more material corn is exposed, where it's say half Okay. second of or cost that, If about and the in would and extent you've you the embedded helpful.

Dylan Lissette

Yeah.

covered mostly for commodities on given prudent and, year. I and we're think guidance the the we're, we've is

we're think perspective I that protected. So, from

Operator

That's all that, attending. concludes the questions for today's that call. And conference with this you Thank we had.

may now disconnect. You

Utz Brands (UTZ) 12 Aug 212021 Q2 Earnings call transcript