Utz Brands, Inc. (NYSE: UTZ) and its affiliated entities (“Utz”
or the “Company”), a leading U.S. manufacturer of branded salty
snacks, today announced several network optimization initiatives
that are expected to support long-term volume growth and reduce
costs. These initiatives are expected to:
- Simplify the Company’s existing plant network and streamline
its operating structure by consolidating volume into a smaller
number of facilities, which is expected to lower costs and improve
margins;
- Strengthen the Company’s relationship with a key
co-manufacturing partner that will support the optimization of the
Company’s network;
- Create incremental capacity in the Company’s warehousing
network to support future growth, drive efficiency, and strengthen
customer service; and
- Monetize assets that are not strategic to the Company’s
long-term footprint.
These actions are expected to create a more efficient and
flexible network to support the Company’s growth and better serve
its customers. As part of these efforts, Utz has:
- Divested the Company’s manufacturing plant and all related
assets in Bluffton, Indiana (the “Bluffton Plant”);
- Announced that the Company’s lowest-volume manufacturing plant
in Hanover, Pennsylvania (the “Carlisle Street Plant”) will cease
operations in the first quarter of 2024;
- Signed a built-to-suit agreement for a new, ~650,000 square
foot leased distribution center located in Hanover, Pennsylvania
(the “Northeast Logistics Center”), expected to open in the first
quarter of 2025; and
- Decided to list for sale (i) its Louisiana manufacturing plant,
which was impacted by Hurricane Ida in 2021 and has remained idle
since sustaining irreparable damage, and (ii) its Alabama plant,
which was closed in June 2023.
Following these actions, the Company will have 13 active plants,
which includes the manufacturing facility in Kings Mountain, North
Carolina (the “Kings Mountain Plant”), purchased in April 2022. The
sale and closures are expected to drive increased net sales
averages in its remaining plants. The volume from these closed
facilities is expected to be absorbed by the remaining plant
network and should reduce fixed overhead and drive efficiencies in
manufacturing conversion costs.
The Bluffton Plant, which makes products associated with the
TGIF® brand as well as certain of the Company’s kettle chip brands,
was sold to Super-Pufft Snacks USA, Inc. and its affiliated
entities (“Super-Pufft”), an existing co-manufacturing partner.
Super-Pufft received real estate and manufacturing assets in the
transaction, and in return, the Company entered a newly established
co-manufacturing relationship with Super-Pufft, under which
Super-Pufft will manufacture certain TGIF® products under favorable
terms. Over time, the Company expects to shift production of these
products into Utz owned and operated manufacturing facilities.
The Carlisle Street Plant is the Company’s oldest plant and
served as a kettle chip manufacturing plant, producing the
Company’s Utz®, Grandma Utz®, and Zapp’s® brands. With the
Company’s expansion of its kettle manufacturing capacity across its
network, including future kettle production planned for the Kings
Mountain Plant, Utz expects to efficiently absorb the volume
produced by the Carlisle Street Plant. The Company expects to stop
production at the Carlisle Street Plant in the first quarter of
2024, after which it plans to explore asset monetization options.
No job loss will occur due to the Carlisle Plant closure.
The leased Northeast Logistics Center, which the Company expects
to occupy in the first quarter of 2025, will create incremental
warehouse capacity to support long-term growth. As the Company has
grown sales volume in excess of the salty snack category over the
last four years,1 it has outgrown its existing warehouse network
infrastructure in Hanover, Pennsylvania, through which it delivers
a majority of the Company’s volume. The Northeast Logistics Center
building will be adjacent to the Company’s High Street and Kindig
Lane facilities, driving cost and inventory efficiencies across the
Hanover distribution campus. It will improve inventory management
by managing items in one single location and will facilitate
customers’ ability to order multiple brands on a single order,
streamlining transaction flow and improving customer service. The
more optimized warehouse footprint will enable investment in
automation and the implementation of a best-in-class warehouse
management technology system.
The Company does not expect material future cash or capital
expenditures in connection with the initiatives outlined
herein.
These initiatives demonstrate the Company’s ongoing dedication
to optimizing its supply chain. The Company will discuss this and
more at our Investor Day in New York City on December 15, 2023.
About Utz Brands, Inc.
Utz Brands, Inc. (NYSE: UTZ) manufactures a diverse portfolio of
savory snacks through popular brands including Utz®, On The Border®
Chips & Dips, Golden Flake®, Zapp’s®, Good Health®, Boulder
Canyon®, Hawaiian Brand®, and TORTIYAHS!®, among others.
After a century with strong family heritage, Utz continues to
have a passion for exciting and delighting consumers with delicious
snack foods made from top-quality ingredients. Utz’s products are
distributed nationally through grocery, mass merchandisers, club,
convenience, drug, and other channels. Based in Hanover,
Pennsylvania, Utz has multiple manufacturing facilities located
across the U.S. to serve its growing customer base. For more
information, please visit www.utzsnacks.com or call
1‐800‐FOR‐SNAX.
Investors and others should note that Utz announces material
financial information to its investors using its investor relations
website (investors.utzsnacks.com), Securities and Exchange
Commission (“SEC” or “Commission”) filings, press releases, public
conference calls, and webcasts. Utz uses these channels, as well as
social media, to communicate with our stockholders and the public
about the Company, the Company’s products, and other issues. It is
possible that the information that Utz posts on social media could
be deemed to be material information. Therefore, Utz encourages
investors, the media, and others interested in the Company to
review the information posted on the social media channels listed
on Utz’s investor relations website.
Forward-Looking Statements
This press release includes certain statements made herein that
are not historical facts but are “forward-looking statements”
within the meaning of the “safe harbor” provisions of the Private
Securities Litigation Reform Act of 1995, as amended. The
forward-looking statements generally are accompanied by or include,
without limitation, statements such as “will,” “expect,” “intends,”
“goal” or other similar words, phrases or expressions. These
forward-looking statements include future plans for the Company,
the estimated or anticipated future results and benefits of the
Company’s future plans and operations, future opportunities for the
Company, the ability of the Company to support volume growth and
reduce costs through its strategic initiatives to optimize its
supply chain, the effect of the Company’s sale, closure and
consolidation of certain manufacturing facilities, the transition
of production of certain products to Company owned and operated
manufacturing facilities, the performance and success of the
Company’s co-manufacturing partnerships and manufacturing
facilities, the expected timing and operation of the Northeast
Logistics Center and other statements that are not historical
facts. These statements are based on the current expectations of
the Company’s management and are not predictions of actual
performance. These statements are subject to a number of risks and
uncertainties, and the Company’s business and actual results may
differ materially. Factors that may cause such differences include,
but are not limited to the risks and uncertainties set forth in the
section entitled “Risk Factors” and “Forward-Looking Statements” in
the Company’s Annual Report on Form 10-K filed with the Commission,
for the fiscal year ended January 1, 2023, the Company’s Quarterly
Reports on Form 10-Q filed with the Commission for the quarters
ended April 2, 2023 and July 2, 2023, and other reports filed by
the Company with the Commission. In addition, forward-looking
statements provide the Company’s expectations, plans, or forecasts
of future events and views as of the date of this communication.
These forward-looking statements should not be relied upon as
representing the Company’s assessments as of any date subsequent to
the date of this communication. The Company cautions investors not
to place undue reliance upon any forward-looking statements, which
speak only as of the date made. The Company does not undertake or
accept any obligation or undertaking to release publicly any
updates or revisions to any forward-looking statements to reflect
any change in its expectations or any change in events, conditions,
or circumstances on which any such statement is based, except as
otherwise required by law.
__________________________ 1 Reflects retail sales volume growth
for the last 52 weeks ending September 10, 2023, compared to the
same period in 2019, per Circana.
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Investors Utz Brands, Inc. Kevin
Powers kpowers@utzsnacks.com
Media Utz Brands, Inc. Kevin Brick
kbrick@utzsnacks.com
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