Company: UTZ
Filing Date: 2025-07-31
Form Type: 10-Q
Source: 0001739566-25-000153
Chunk: 65

Company: Utz Brands, Inc.
Filing Date: 2025-07-31
Form: 10-Q
Item: Part I, Item 8
Chunk 65
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 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 $3.2 million and $3.8 million for the thirteen and twenty-six weeks ended June 29, 2025, respectively. Comparably, the Company recorded income tax benefit of $1.3 million and expense of $25.2 million for the thirteen and twenty-six weeks ended June 30, 2024, respectively. The effective tax rates for the thirteen and twenty-six weeks ended June 29, 2025 were (46.4)% and (31.7)%, respectively. Comparably, the effective tax rates for the thirteen and twenty-six weeks ended June 30, 2024 were (5.4)% and 47.5%, 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 rates for the thirteen and twenty-six weeks ended June 29, 2025 are 62.2% and 43.8%, respectively before consideration of any discrete items. During the thirteen and twenty-six weeks ended June 29, 2025, the effective tax rate was impacted by statutory state tax rate changes, which resulted in a discrete tax benefit of $0.3 million and expense of $0.8 million, respectively.

13

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 DT