Filing identity and reporting period
This is Collier Creek Holdings’ unaudited Form 10-Q for the quarter ended March 31, 2020, not an operating-company filing for Utz Brands, Inc. Collier Creek was a blank-check company searching for a business combination, with a stated focus on consumer goods. Its results do not represent Utz’s operating performance.
Financial results and position
- Revenue and margins: No operating revenue was reported; Collier Creek stated it would not generate operating revenue until completing a business combination. Operating margins are not meaningful for this period.
- Profit: Net income was $177,794, versus $2,301,928 in Q1 2019. The 2020 result comprised $1,410,028 of trust-account investment income less $1,232,234 of general and administrative expense. Reported basic and diluted EPS was $0.03 for Class A and $(0.10) for Class B in Q1 2020, versus $0.06 and $(0.01), respectively, in Q1 2019.
- Cash flow: Net cash used in operating activities was $130, compared with $206,009 in Q1 2019. Cash at quarter-end was $585,123, down $130 from year-end 2019.
- Assets and liquidity: Total assets were $453.2 million, including $452.4 million in trust-account marketable securities. Current liabilities were $1.85 million, against current assets of $739,748; management reported a working-capital deficit of approximately $1.1 million.
- Debt and obligations: No Working Capital Loans were outstanding. Total liabilities were $17.3 million, including $15.45 million of deferred underwriting commissions and legal fees payable only upon a completed business combination, plus current liabilities. No off-balance-sheet arrangements were reported.
Changes versus the prior comparable period
Net income fell by approximately $2.1 million year over year, as trust-account investment income declined by about $1.1 million while general and administrative expense increased by about $1.1 million. Cash used in operations decreased substantially. Accrued expenses rose to $1.51 million from $444,337 at December 31, 2019; the filing does not attribute this increase to a specific cause in the supplied text.
Outlook, risks, and contingencies
- Collier Creek had until October 10, 2020 to complete a business combination; otherwise it was required to cease operations, redeem public shares, and proceed toward liquidation, subject to applicable requirements.
- Management concluded that the company’s liquidity position and the mandatory liquidation and dissolution raised substantial doubt about its ability to continue as a going concern.
- Management said COVID-19 could adversely affect the search for a target or a target’s business, but the specific impact was not determinable. The filing identifies travel, meeting, and transaction-timing constraints as potential risks.
- Forward purchase agreements contemplated $35 million of securities to be purchased concurrently with a business combination. The $15.45 million deferred underwriting commission and $50,000 deferred legal fee were contingent on completing one.
- The filing reported no legal proceedings and no material changes to previously disclosed risk factors other than the COVID-19 update.
Important facts to verify
- Confirm the requested issuer: the supplied filing is for Collier Creek Holdings, not Utz Brands, Inc.
- Verify whether a business combination was completed by the October 10, 2020 deadline and the resulting transaction terms, redemption level, and financing.
- Review the going-concern disclosure and available liquidity outside the trust account, including accrued expenses and contingent transaction costs.
- Reconcile the reported class-specific EPS and the shareholders’ equity table, which labels its 2020 ending balance “March 30” while the filing period ends March 31.