- Results exceeded high end of Q2 Revenue and Adjusted EBITDA
outlook
- Revenue of $485
million, increased 7.6%, including 6.6%
contribution from organic growth
- Gross margin of 65.6%, increased 110 bps, and net
income increased to $13
million
- Adjusted EBITDA of $113
million, increased 14.9%, and Adjusted EBITDA margin
of 23.3%, increased 150 bps
- Increases full-year 2024 Revenue and Adjusted EBITDA
outlook
- Increases full-year 2024 Adjusted Free Cash Flow outlook to
between $180 million and $190 million, an increase of $5 million
TAMPA,
Fla., Aug. 8, 2024 /CNW/ - Primo Water
Corporation (NYSE: PRMW) (TSX: PRMW) (the "Company" or "Primo
Water"), a leading provider of sustainable drinking water
solutions in North America, today
announced its results for the second quarter ended June 29, 2024.
"We continue to execute well against our clear and focused
strategy. As a result, we are delivering accelerated topline growth
which is balanced and broad based. Our growth and productivity
initiatives are enabling margin expansion and delivering strong
earnings growth. Since the beginning of this year our team embraced
a new strategy that includes a focus on customer-centric
initiatives, must win priorities, as well as a commercial and
growth mindset leveraging our portfolio of hydration solutions,"
said Robbert Rietbroek, Chief Executive Officer.
"The focus on the "must-wins" of delivering exceptional customer
service, being the water solutions partner of choice, and
operational excellence is driving growth and creating value for our
stakeholders. We remain focused on the front-line performance of
our business to grow profitably as we prepare for the previously
announced proposed merger with BlueTriton Brands. We believe
the combination of these two companies and their expansive brand
and product portfolios will position us to better serve our
customers and to fulfill their hydration needs," continued Mr.
Rietbroek.
(Unless stated otherwise, all second quarter 2024 comparisons
are relative to the second quarter of 2023; all information is in
U.S. dollars. Non-GAAP reconciliations presented on the exhibits to
this press release)
SECOND QUARTER HIGHLIGHTS - CONTINUING
OPERATIONS
- Revenue increased 7.6% to $485
million compared to $451
million driven by revenue growth consisting of 3.1%
attributable to volume and 4.5% attributable to pricing.
Contribution from organic growth was 6.6% for the quarter. Revenue
growth by channel includes 7.4% in Water Direct / Water Exchange,
11.6% in Water Refill / Water Filtration and 86.6% in Other Water,
which is primarily Mountain Valley Spring water sold at retail and
on-premise.
- Gross profit increased 9.4% to $318
million compared to $291
million. Gross margin increased 110 bps to 65.6% compared to
64.5%, driven by pricing, increased volume and operating
efficiencies.
- SG&A expenses increased 7.2% to $264
million compared to $247
million. The increase was driven by higher selling and
operating costs including delivery commissions that supported
volume and revenue growth.
- Reported net income and net income per diluted share were
$13 million and $0.08, respectively, compared to reported net
income and net income per diluted share of $14 million and $0.09, respectively. Adjusted net income and
adjusted net income per diluted share were $42 million and $0.26, respectively, compared to $31 million and $0.20, respectively.
- Adjusted EBITDA increased 14.9% to $113
million compared to $98
million, driven by pricing initiatives, customer demand and
effective expense management. Adjusted EBITDA margin was 23.3%,
compared to 21.8%.
- Net cash provided by operating activities of $101 million, less $40
million of capital expenditures and additions to intangible
assets, resulted in $61 million of
free cash flow, or $73 million of
adjusted free cash flow (adjusting for the items set forth on
Exhibit 6), compared to net cash provided by operating activities
of $65 million and .adjusted free
cash flow of $39 million in the prior
year.
|
For the Three Months
Ended
|
|
(USD $M except % or
unless as otherwise noted)
|
June 29,
2024
|
|
July 1,
2023
|
|
Y/Y
Change
|
|
Revenue, net
|
$
485.0
|
|
$
450.6
|
|
7.6 %
|
|
Net income from
continuing operations
|
$
13.3
|
|
$
13.6
|
|
$
(0.3)
|
|
Net income from
continuing operations per diluted share
|
$
0.08
|
|
$
0.09
|
|
$
(0.01)
|
|
Adjusted net income
from continuing operations
|
$
41.8
|
|
$
31.2
|
|
$
10.6
|
|
Adjusted net income
from continuing operations per diluted share
|
$
0.26
|
|
$
0.20
|
|
$
0.06
|
|
Adjusted
EBITDA
|
$
112.9
|
|
$
98.3
|
|
14.9 %
|
|
Adjusted EBITDA margin
%
|
23.3 %
|
|
21.8 %
|
|
150 bps
|
OUTLOOK
- The Company is increasing its full year 2024 revenue target to
between $1.87 billion and
$1.89 billion and its full year 2024
Adjusted EBITDA target to between $420
million and $440 million.
Full-year 2024 Adjusted Free Cash Flow from continuing operations
is forecasted to be between $180
million and $190 million, an
increase of $5 million.
- Primo Water is targeting the
following results from continuing operations for the third quarter
and full year 2024:
|
Q3 2024
Range
|
FY 2024
Range
|
|
($ in
millions)
|
Low
|
High
|
Low
|
High
|
|
Revenue
|
$485
|
$495
|
$1,870
|
$1,890
|
|
Adjusted
EBITDA
|
$115
|
$125
|
$420
|
$440
|
|
Cash Taxes
|
|
|
$35
|
$45
|
|
Cash Interest,
Net
|
|
|
$25
|
$45
|
|
Cap-Ex
|
|
|
~ 7% of Revenue +
$22.5M Strategic
Investment
|
|
Adj. Free Cash
Flow
|
|
|
$180
|
$190
|
SECOND QUARTER 2024 RESULTS CONFERENCE CALL
Primo Water will host a
conference call, to be simultaneously webcast, on Thursday, August 8, 2024, at 10:00 a.m. Eastern Time. Considering the pending
merger with BlueTriton Brands, Inc. ("BlueTriton"), the Q&A
session following management's prepared remarks will be moderated
by our Investor Relations team. To ensure a smooth and orderly
process, we will not be taking live questions from analysts or
investors during this call. Instead, participants were previously
invited to submit their questions in advance to
investorrelations@primowater.com. The most pertinent questions will
be selected and addressed by our management team during the call.
Details for the Earnings Conference Call:
Date: August 8, 2024
Time: 10:00 a.m. Eastern Time
North America: (888) 664-6392
International: (416) 764-8659
Conference ID: 57926036
Webcast Link: https://app.webinar.net/0YLdAr7m9o4
A slide presentation and live
audio webcast will be available through Primo Water's website at
https://www.primowatercorp.com.
Replay Information:
The earnings conference call will be recorded and archived for
playback on the investor relations section of Primo Water's website.
SECOND QUARTER PERFORMANCE - CONTINUING
OPERATIONS
Revenue growth by channel is tabulated below:
|
For the Three Months
Ended
|
|
(in millions of U.S.
dollars)
|
June 29,
2024
|
|
July 1,
2023
|
|
$
Change
|
|
%
Change
|
|
Revenue, net
|
|
|
|
|
|
|
|
|
Water Direct/Water
Exchange
|
$
368.2
|
|
$
342.9
|
|
$
25.3
|
|
7.4 %
|
|
Water Refill/Water
Filtration
|
61.8
|
|
55.4
|
|
6.4
|
|
11.6 %
|
|
Other
Water1
|
22.2
|
|
11.9
|
|
10.3
|
|
86.6 %
|
|
Water
Dispensers
|
13.2
|
|
16.7
|
|
(3.5)
|
|
(21.0 %)
|
|
Other
|
19.6
|
|
23.7
|
|
(4.1)
|
|
(17.3 %)
|
|
Revenue, net as
reported
|
$
485.0
|
|
$
450.6
|
|
$
34.4
|
|
7.6 %
|
|
1
|
Primarily
Mountain Valley retail and on-premise revenue
|
QUARTERLY DIVIDEND
Primo Water announced that its
Board of Directors declared a dividend of US$0.09 per share on common shares, payable in
cash on September 5, 2024 to shareowners of record at the
close of business on August 22, 2024.
SHARE REPURCHASE PROGRAM
The Company has paused its share repurchase program in light of
the proposed merger with BlueTriton Brands. Prior to the
announcement of the proposed merger, the Company had repurchased
$6.8 million of its common shares in
the second quarter.
ABOUT PRIMO WATER CORPORATION
Primo Water is a leading
North America-focused pure-play
water solutions provider that operates largely under a recurring
revenue model in the large format water category (defined as 3
gallons or greater). This business strategy is commonly referred to
as "razor-razorblade" because the initial sale of a product creates
a base of users who frequently purchase complementary consumable
products. The razor in Primo Water's
revenue model is its industry leading line-up of innovative water
dispensers, which are sold through approximately 11,350 retail
locations and online at various price points. The dispensers help
increase household and business penetration which drives recurring
purchases of Primo Water's
razorblade offering or water solutions. Primo Water's razorblade offering is comprised
of Water Direct, Water Exchange, and Water Refill. Through its
Water Direct business, Primo Water
delivers sustainable hydration solutions direct to customers,
whether at home or to businesses. Through its Water Exchange
business, customers visit retail locations and purchase a
pre-filled bottle of water. Once consumed, empty bottles are
exchanged at our recycling center displays, which provide a ticket
that offers a discount toward the purchase of a new bottle. Water
Exchange is available in approximately 17,950 retail locations.
Through its Water Refill business, customers refill empty bottles
at approximately 23,500 self-service refill drinking water
stations. Primo Water also offers
water filtration units across North
America.
Primo Water's water solutions
expand consumer access to purified, spring, and mineral water to
promote a healthier, more sustainable lifestyle while
simultaneously reducing plastic waste and pollution. Primo Water is committed to its water
stewardship standards and is proud to partner with the
International Bottled Water Association (IBWA) in North America which ensures strict adherence
to safety, quality, sanitation and regulatory standards for the
benefit of consumer protection.
Primo Water is headquartered in
Tampa, Florida (USA). For more
information, visit www.primowatercorp.com.
Non-GAAP Measures
To supplement its reporting of financial measures determined in
accordance with U.S. GAAP (generally accepted accounting
principles), Primo Water utilizes
certain non-GAAP financial measures. Primo Water utilizes organic revenue growth
(which excludes the impact of acquisitions). Primo Water also utilizes Adjusted net income
(loss), Adjusted net income (loss) per diluted share, Adjusted
EBITDA and Adjusted EBITDA margin to separate the impact of certain
items from the underlying business. Because Primo Water uses
these adjusted financial results in the management of its business,
management believes this supplemental information is useful to
investors for their independent evaluation and understanding of
Primo Water's underlying business
performance and the performance of its management.
Additionally, Primo Water
supplements its reporting of net cash provided by (used in)
operating activities from continuing operations determined in
accordance with GAAP by excluding additions to property, plant and
equipment and additions to intangible assets to present free cash
flow, and by excluding the additional items identified on the
exhibits hereto to present adjusted free cash flow, which
management believes provides useful information to investors in
assessing our performance, comparing Primo
Water's performance to the performance of the Company's peer
group and assessing the Company's ability to service debt and
finance strategic opportunities, which include investing in
Primo Water's business, making
strategic acquisitions, paying dividends, and strengthening the
balance sheet. With respect to the Company's expectations of its
future performance, the Company's reconciliations of Q3 2024 and
full-year 2024 Adjusted EBITDA and 2024 adjusted free cash flow
guidance are not available, as the Company is unable to quantify
certain amounts to the degree of precision that would be required
in the relevant GAAP measures without unreasonable effort. These
items include restructuring costs and restructuring-related
impairment charges, acquisition/divestiture related costs, gains or
losses on the sale of businesses or other assets, and the income
tax effects of these items and/or other income tax-related events.
These items depend on highly variable factors and any such
reconciliations would imply a degree of precision that would be
confusing or misleading to investors. Primo
Water expects the variability of these factors to have a
significant, and potentially unpredictable, impact on the Company's
future GAAP financial results. The non-GAAP financial measures
described above are in addition to, and not meant to be considered
superior to, or a substitute for, Primo
Water's financial statements prepared in accordance with
GAAP. In addition, the non-GAAP financial measures included in this
earnings announcement reflect management's judgment of particular
items, and may be different from, and therefore may not be
comparable to, similarly titled measures reported by other
companies.
Safe Harbor Statements
This press release contains forward-looking statements within
the meaning of Section 27A of the Securities Act of 1933 and
Section 21E of the Securities Exchange Act of 1934 conveying
management's expectations as to the future based on plans,
estimates and projections at the time Primo
Water makes the statements. Forward-looking statements
involve inherent risks and uncertainties and Primo Water cautions you that several important
factors could cause actual results to differ materially from those
contained in any such forward-looking statement. You can identify
forward-looking statements by words such as "may," "will," "would,"
"should," "could," "expect," "aim," "anticipate," "believe,"
"estimate," "intend," "plan," "predict," "project," "seek,"
"potential," "opportunities," and other similar expressions and the
negatives of such expressions. However, not all
forward-looking statements contain these words. The
forward-looking statements contained in this press release include,
but are not limited to, statements regarding future financial and
operating trends and results (including Primo Water's outlook on Q3 and full-year 2024
revenue, Adjusted EBITDA and Adjusted Free Cash Flow), the
transaction with BlueTriton, and related matters. The
forward-looking statements are based on assumptions regarding
management's current plans and estimates. Management believes these
assumptions to be reasonable, but there is no assurance that they
will prove to be accurate.
Factors that could cause actual results to differ materially
from those described in this press release include, among others:
Primo Water's and BlueTriton's
ability to complete the pending combination transaction on the
anticipated terms and schedule, including the ability to obtain
regulatory approval; the risk that disruptions from the transaction
will harm Primo Water's business;
Primo Water's ability to compete
successfully in the markets in which it operates; Primo Water's ability to manage supply chain
disruptions and cost increases related to inflation; fluctuations
in commodity prices and Primo
Water's ability to pass on increased costs to its customers
or hedge against such rising costs, and the impact of those
increased prices on its volumes; Primo
Water's ability to maintain favorable arrangements and
relationships with its suppliers; Primo
Water's ability to manage its operations successfully;
currency fluctuations that adversely affect the exchange between
currencies including the U.S. dollar and the Canadian dollar; the
impact on Primo Water's financial
results from uncertainty in the financial markets and other adverse
changes in general economic conditions, including inflation and
interest rates; any disruption to production at Primo Water's
manufacturing facilities; Primo
Water's ability to maintain access to its water sources; the
impact of climate change on Primo
Water's business; Primo
Water's ability to protect its intellectual property; the
seasonal nature of Primo Water's
business and the effect of adverse weather conditions; the impact
of national, regional and global events, including those of a
political, economic, business and competitive nature, such as the
Russia/Ukraine war or the Israel/Hamas war; the impact of a pandemic,
such as COVID-19, related government actions and Primo Water's strategy in response thereto on
our business; Primo Water's ability
to fully realize the potential benefit of transactions or other
strategic opportunities that it pursues; Primo Water's ability to realize cost synergies
of its acquisitions due to integration difficulties and other
challenges; Primo Water's exposure
to intangible asset risk; Primo
Water's ability to meet its obligations under its debt
agreements, and risks of further increases to its indebtedness;
Primo Water's ability to maintain
compliance with the covenants and conditions under its debt
agreements; fluctuations in interest rates, which could increase
Primo Water's borrowing costs;
Primo Water's ability to recruit,
retain and integrate new management; the impact of increased labor
costs on Primo Water's business;
Primo Water's ability to renew its
collective bargaining agreements from time to time on satisfactory
terms; disruptions in Primo Water's
information systems; Primo Water's
ability to securely maintain its customers' confidential or credit
card information, or other private data relating to Primo Water's employees or the Company;
compliance with product health and safety standards; liability for
injury or illness caused by the consumption of contaminated
products; liability and damage to Primo
Water's reputation as a result of litigation or legal
proceedings; changes in the legal and regulatory environment in
which Primo Water operates;
Primo Water's ability to adequately
address the challenges and risks associated with its operations and
address difficulties in complying with laws and regulations
including the U.S. Foreign Corrupt Practices Act and the U.K.
Bribery Act of 2010; the impact on Primo
Water's tax obligations and effective tax rate arising from
changes in local tax laws or countries adopting more aggressive
interpretations of tax laws; Primo
Water's ability to maintain its quarterly dividend; and
credit rating changes.
The foregoing list of factors is not exhaustive. Readers are
cautioned not to place undue reliance on any forward-looking
statements, which speak only as of the date hereof. Readers are
urged to carefully review and consider the various disclosures,
including but not limited to risk factors contained in Primo Water's Annual Report on Form 10-K and its
quarterly reports on Form 10-Q, as well as other filings with the
securities commissions. Primo Water
does not undertake to update or revise any of these statements
considering new information or future events, except as expressly
required by applicable law.
Website: www.primowatercorp.com
|
PRIMO WATER
CORPORATION
|
|
|
|
|
|
|
EXHIBIT
1
|
|
CONSOLIDATED
STATEMENTS OF OPERATIONS
|
|
|
|
|
|
|
|
|
(in millions of U.S.
dollars, except share and per share amounts)
|
|
|
|
|
|
Unaudited
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Three Months
Ended
|
|
For the Six Months
Ended
|
|
June 29,
2024
|
|
July 1,
2023
|
|
June 29,
2024
|
|
July 1,
2023
|
|
Revenue,
net
|
$
485.0
|
|
$
450.6
|
|
$
937.0
|
|
$
863.1
|
|
Cost of
sales
|
167.0
|
|
159.8
|
|
327.7
|
|
313.3
|
|
Gross
profit
|
318.0
|
|
290.8
|
|
609.3
|
|
549.8
|
|
Selling, general and
administrative expenses
|
264.4
|
|
246.6
|
|
513.8
|
|
481.2
|
|
Loss on disposal of
property, plant and equipment, net
|
1.3
|
|
0.9
|
|
2.8
|
|
2.2
|
|
Acquisition and
integration expenses
|
13.1
|
|
1.9
|
|
18.4
|
|
3.6
|
|
Gain on sale of
property
|
—
|
|
—
|
|
(0.5)
|
|
—
|
|
Operating
income
|
39.2
|
|
41.4
|
|
74.8
|
|
62.8
|
|
Other expense,
net
|
2.7
|
|
0.6
|
|
0.1
|
|
0.3
|
|
Interest expense,
net
|
9.2
|
|
18.8
|
|
19.2
|
|
37.0
|
|
Income from
continuing operations before income taxes
|
27.3
|
|
22.0
|
|
55.5
|
|
25.5
|
|
Income tax
expense
|
14.0
|
|
8.4
|
|
23.5
|
|
8.7
|
|
Net income from
continuing operations
|
$
13.3
|
|
$
13.6
|
|
$
32.0
|
|
$
16.8
|
|
Net income from
discontinued operations, net of income taxes
|
2.7
|
|
7.7
|
|
9.0
|
|
10.3
|
|
Net
income
|
$
16.0
|
|
$
21.3
|
|
$
41.0
|
|
$
27.1
|
|
|
|
|
|
|
|
|
|
Net income per
common share
|
|
|
|
|
|
|
|
|
Basic:
|
|
|
|
|
|
|
|
|
Continuing
operations
|
$
0.08
|
|
$
0.09
|
|
$
0.20
|
|
$
0.11
|
|
Discontinued
operations
|
$
0.02
|
|
$
0.04
|
|
$
0.06
|
|
$
0.06
|
|
Net income
|
$
0.10
|
|
$
0.13
|
|
$
0.26
|
|
$
0.17
|
|
Diluted:
|
|
|
|
|
|
|
|
|
Continuing
operations
|
$
0.08
|
|
$
0.09
|
|
$
0.20
|
|
$
0.11
|
|
Discontinued
operations
|
$
0.02
|
|
$
0.04
|
|
$
0.05
|
|
$
0.06
|
|
Net income
|
$
0.10
|
|
$
0.13
|
|
$
0.25
|
|
$
0.17
|
|
|
|
|
|
|
|
|
|
Weighted-average
common shares outstanding (in thousands)
|
|
|
|
|
|
|
|
|
Basic
|
160,112
|
|
159,196
|
|
159,843
|
|
159,465
|
|
Diluted
|
161,384
|
|
159,900
|
|
161,041
|
|
160,332
|
|
|
|
|
|
|
|
|
|
PRIMO WATER
CORPORATION
|
|
|
EXHIBIT
2
|
|
CONSOLIDATED BALANCE
SHEETS
|
|
|
|
|
(in millions of U.S.
dollars, except share amounts)
|
|
|
|
|
Unaudited
|
|
|
|
|
|
|
|
|
June 29,
2024
|
|
December 30,
2023
|
|
ASSETS
|
|
|
|
|
Current
assets
|
|
|
|
|
Cash and cash
equivalents
|
$
603.3
|
|
$
507.9
|
|
Accounts receivable,
net of allowance of $13.2 ($12.7 as of December 30,
2023)
|
164.1
|
|
156.0
|
|
Inventories
|
47.3
|
|
47.3
|
|
Prepaid expenses and
other current assets
|
22.9
|
|
26.0
|
|
Current assets of
discontinued operations
|
81.9
|
|
128.7
|
|
Total current
assets
|
919.5
|
|
865.9
|
|
Property, plant and
equipment, net
|
549.1
|
|
556.5
|
|
Operating lease
right-of-use-assets
|
147.5
|
|
136.0
|
|
Goodwill
|
1,009.0
|
|
1,004.6
|
|
Intangible assets,
net
|
717.8
|
|
714.2
|
|
Other long-term assets,
net
|
18.4
|
|
20.2
|
|
Long-term assets of
discontinued operations
|
158.4
|
|
225.6
|
|
Total
assets
|
$
3,519.7
|
|
$
3,523.0
|
|
LIABILITIES AND
EQUITY
|
|
|
|
|
Current
liabilities
|
|
|
|
|
Current maturities of
long-term debt
|
$
14.6
|
|
$
14.2
|
|
Accounts payable and
accrued liabilities
|
291.2
|
|
276.4
|
|
Current operating lease
obligations
|
26.0
|
|
25.6
|
|
Current liabilities of
discontinued operations
|
89.3
|
|
109.9
|
|
Total current
liabilities
|
421.1
|
|
426.1
|
|
Long-term
debt
|
1,250.3
|
|
1,270.8
|
|
Operating lease
obligations
|
134.0
|
|
124.0
|
|
Deferred tax
liabilities
|
141.5
|
|
144.2
|
|
Other long-term
liabilities
|
84.6
|
|
64.4
|
|
Long-term liabilities
of discontinued operations
|
33.8
|
|
52.2
|
|
Total
liabilities
|
2,065.3
|
|
2,081.7
|
|
Equity
|
|
|
|
|
Common shares, no par
value - 160,289,149 (December 30, 2023 - 159,480,638) shares
issued
|
1,310.2
|
|
1,288.6
|
|
Additional paid-in
capital
|
86.6
|
|
90.6
|
|
Retained
earnings
|
170.6
|
|
167.2
|
|
Accumulated other
comprehensive loss
|
(113.0)
|
|
(105.1)
|
|
Total Primo Water
Corporation equity
|
1,454.4
|
|
1,441.3
|
|
Total liabilities
and equity
|
$
3,519.7
|
|
$
3,523.0
|
|
PRIMO WATER
CORPORATION
|
|
|
|
|
|
|
EXHIBIT
3
|
|
CONSOLIDATED
STATEMENTS OF CASH FLOWS
|
|
|
|
|
|
|
|
|
(in millions of U.S.
dollars)
|
|
|
|
|
|
|
|
|
Unaudited
|
|
|
|
|
|
|
|
|
For the Three Months
Ended
|
|
For the Six Months
Ended
|
|
June 29,
2024
|
|
July 1,
2023
|
|
June 29,
2024
|
|
July 1,
2023
|
|
|
|
|
|
|
|
|
|
Cash flows from
operating activities of continuing operations:
|
|
|
|
|
|
|
|
|
Net income
|
$
16.0
|
|
$
21.3
|
|
$
41.0
|
|
$
27.1
|
|
Net income from
discontinued operations, net of income taxes
|
2.7
|
|
$
7.7
|
|
9.0
|
|
10.3
|
|
Net income from
continuing operations
|
$
13.3
|
|
$
3.6
|
|
32.0
|
|
16.8
|
|
Adjustments to
reconcile net income from continuing operations to cash flows from
operating activities of continuing
operations:
|
|
|
|
|
|
|
|
|
Depreciation and
amortization
|
49.7
|
|
47.2
|
|
97.9
|
|
94.3
|
|
Amortization of
financing fees
|
0.9
|
|
0.9
|
|
1.7
|
|
1.7
|
|
Share-based
compensation expense
|
9.5
|
|
2.7
|
|
12.5
|
|
4.7
|
|
(Benefit) provision for
deferred income taxes
|
(4.9)
|
|
5.4
|
|
(3.0)
|
|
6.5
|
|
Loss on disposal of
property, plant and equipment, net
|
1.3
|
|
0.9
|
|
2.8
|
|
2.2
|
|
Gain on sale of
property
|
—
|
|
—
|
|
(0.5)
|
|
—
|
|
Other non-cash
items
|
2.0
|
|
(1.2)
|
|
(2.6)
|
|
(3.2)
|
|
Change in operating
assets and liabilities, net of acquisitions:
|
|
|
|
|
|
|
|
|
Accounts
receivable
|
3.3
|
|
(22.6)
|
|
(2.7)
|
|
(18.8)
|
|
Inventories
|
(3.0)
|
|
2.6
|
|
(1.8)
|
|
4.7
|
|
Prepaid expenses and
other current assets
|
3.9
|
|
4.2
|
|
0.5
|
|
1.9
|
|
Other
assets
|
4.3
|
|
(0.4)
|
|
3.8
|
|
(0.5)
|
|
Accounts payable and
accrued liabilities and other liabilities
|
21.0
|
|
11.9
|
|
24.1
|
|
(14.8)
|
|
Net cash provided by
operating activities of continuing operations
|
101.3
|
|
65.2
|
|
164.7
|
|
95.5
|
|
Cash flows from
investing activities of continuing operations:
|
|
|
|
|
|
|
|
|
Acquisitions, net of
cash received
|
(20.1)
|
|
(15.6)
|
|
(24.2)
|
|
(23.0)
|
|
Additions to property,
plant and equipment
|
(37.3)
|
|
(27.0)
|
|
(74.9)
|
|
(69.2)
|
|
Additions to
intangible assets
|
(3.0)
|
|
(2.0)
|
|
(5.3)
|
|
(4.0)
|
|
Proceeds from sale of
property, plant and equipment
|
0.1
|
|
0.1
|
|
0.2
|
|
0.2
|
|
Proceeds from sale of
property
|
—
|
|
—
|
|
1.0
|
|
—
|
|
Other investing
activities
|
—
|
|
1.1
|
|
2.7
|
|
1.9
|
|
Net cash used in
investing activities of continuing operations
|
(60.3)
|
|
(43.4)
|
|
(100.5)
|
|
(94.1)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash flows from
financing activities of continuing operations:
|
|
|
|
|
|
|
|
|
Payments of long-term
debt
|
(3.8)
|
|
(2.8)
|
|
(6.6)
|
|
(6.0)
|
|
Proceeds from
short-term borrowings
|
—
|
|
43.0
|
|
—
|
|
104.0
|
|
Payments on short-term
borrowings
|
—
|
|
(59.8)
|
|
—
|
|
(93.0)
|
|
Issuance of common
shares
|
10.5
|
|
0.4
|
|
16.7
|
|
4.7
|
|
Common shares
repurchased and canceled
|
(9.1)
|
|
(2.5)
|
|
(20.2)
|
|
(21.8)
|
|
Dividends paid to
common shareholders
|
(14.4)
|
|
(13.1)
|
|
(29.2)
|
|
(25.9)
|
|
Payment of contingent
consideration for acquisitions
|
(1.1)
|
|
(0.2)
|
|
(1.8)
|
|
(1.0)
|
|
Other financing
activities
|
—
|
|
(2.5)
|
|
—
|
|
(5.0)
|
|
Net cash used in
financing activities of continuing operations
|
(17.9)
|
|
(37.5)
|
|
(41.1)
|
|
(44.0)
|
|
Cash flows from
discontinued operations:
|
|
|
|
|
|
|
|
|
Net cash provided by
operating activities from discontinued operations
|
1.4
|
|
11.6
|
|
2.2
|
|
15.6
|
|
Net cash provided by
(used in) investing activities from discontinued
operations
|
64.7
|
|
(9.0)
|
|
59.1
|
|
(19.8)
|
|
Net cash provided by
financing activities from discontinued operations
|
0.9
|
|
2.8
|
|
1.0
|
|
9.6
|
|
Net cash provided by
discontinued operations
|
67.0
|
|
5.4
|
|
62.3
|
|
5.4
|
|
Effect of exchange
rate changes on cash
|
0.1
|
|
0.6
|
|
(0.4)
|
|
1.4
|
|
Net increase
(decrease) in cash, cash equivalents and restricted
cash
|
90.2
|
|
(9.7)
|
|
85.0
|
|
(35.8)
|
|
Cash and cash
equivalents and restricted cash, beginning of period
|
525.3
|
|
96.5
|
|
530.5
|
|
122.6
|
|
Cash and cash
equivalents and restricted cash, end of period
|
$
615.5
|
|
$
86.8
|
|
$
615.5
|
|
$
86.8
|
|
Cash and cash
equivalents and restricted cash from discontinued operations, end
of period
|
12.2
|
|
35.6
|
|
12.2
|
|
35.6
|
|
Cash and cash
equivalents and restricted cash of continuing operations, end of
period
|
$
603.3
|
|
$
51.2
|
|
$
603.3
|
|
$
51.2
|
|
PRIMO WATER
CORPORATION
|
|
|
|
|
|
EXHIBIT
4
|
|
SEGMENT
INFORMATION
|
|
|
|
|
|
|
|
(in millions of U.S.
dollars, except percentage amounts)
|
|
|
|
|
|
Unaudited
|
|
|
|
|
|
|
|
|
For the Three Months
Ended June 29, 2024
|
|
|
North
America
|
|
Other
|
|
Total
|
|
Revenue,
net
|
|
|
|
|
|
|
|
Water Direct/Water
Exchange
|
|
$
368.2
|
|
$
—
|
|
$
368.2
|
|
Water Refill/Water
Filtration
|
|
61.8
|
|
—
|
|
61.8
|
|
Other
Water1
|
|
22.2
|
|
—
|
|
22.2
|
|
Water
Dispensers
|
|
13.2
|
|
—
|
|
13.2
|
|
Other
|
|
19.4
|
|
0.2
|
|
19.6
|
|
Total
|
|
$
484.8
|
|
$
0.2
|
|
$
485.0
|
|
|
|
|
|
|
|
|
Gross profit
|
|
$
317.8
|
|
$
0.2
|
|
$
318.0
|
|
Gross margin
%
|
|
65.6 %
|
|
100.0 %
|
|
65.6 %
|
|
Selling, general and
administrative expenses
|
|
$
243.3
|
|
$
21.1
|
|
$
264.4
|
|
SG&A % of
revenue2
|
|
50.2 %
|
|
NM
|
|
54.5 %
|
|
Operating income
(loss)
|
|
$
72.9
|
|
$
(33.7)
|
|
$
39.2
|
|
Depreciation and
amortization
|
|
$
49.2
|
|
$
0.5
|
|
$
49.7
|
|
|
|
|
|
|
|
|
|
For the Three Months
Ended July 1, 2023
|
|
|
North
America
|
|
Other
|
|
Total
|
|
Revenue,
net
|
|
|
|
|
|
|
|
Water Direct/Water
Exchange
|
|
$
342.9
|
|
$
—
|
|
$
342.9
|
|
Water Refill/Water
Filtration
|
|
55.4
|
|
—
|
|
55.4
|
|
Other
Water1
|
|
11.9
|
|
—
|
|
11.9
|
|
Water
Dispensers
|
|
16.7
|
|
—
|
|
16.7
|
|
Other
|
|
23.6
|
|
0.1
|
|
23.7
|
|
Total
|
|
$
450.5
|
|
$
0.1
|
|
$
450.6
|
|
|
|
|
|
|
|
|
Gross profit
|
|
$
290.7
|
|
$
0.1
|
|
$
290.8
|
|
Gross margin
%
|
|
64.5 %
|
|
100.0 %
|
|
64.5 %
|
|
Selling, general and
administrative expenses
|
|
$
231.0
|
|
$
15.6
|
|
$
246.6
|
|
SG&A % of
revenue2
|
|
51.3 %
|
|
NM
|
|
54.7 %
|
|
Operating income
(loss)
|
|
$
57.3
|
|
$
(15.9)
|
|
$
41.4
|
|
Depreciation and
amortization
|
|
$
46.8
|
|
$
0.4
|
|
$
47.2
|
|
____________________________
|
|
|
|
|
|
|
|
1 Primarily
Mountain Valley retail and on-premise revenue
|
|
2 "NM"
defined as not meaningful
|
|
|
For the Six Months
Ended June 29, 2024
|
|
|
North
America
|
|
Other
|
|
Total
|
|
Revenue,
net
|
|
|
|
|
|
|
|
Water Direct/Water
Exchange
|
|
$
707.6
|
|
$
—
|
|
$
707.6
|
|
Water Refill/Water
Filtration
|
|
119.8
|
|
—
|
|
119.8
|
|
Other
Water1
|
|
39.9
|
|
—
|
|
39.9
|
|
Water
Dispensers
|
|
30.0
|
|
—
|
|
30.0
|
|
Other
|
|
39.1
|
|
0.6
|
|
39.7
|
|
Total
|
|
$
936.4
|
|
$
0.6
|
|
$
937.0
|
|
|
|
|
|
|
|
|
Gross profit
|
|
$
608.9
|
|
$
0.4
|
|
$
609.3
|
|
Gross Margin
%
|
|
65.0 %
|
|
66.7 %
|
|
65.0 %
|
|
Selling, general and
administrative expenses
|
|
$
481.4
|
|
$
32.4
|
|
$
513.8
|
|
SG&A % of
revenue2
|
|
51.4 %
|
|
NM
|
|
54.8 %
|
|
Operating income
(loss)
|
|
$
124.3
|
|
$
(49.5)
|
|
$
74.8
|
|
Depreciation and
amortization
|
|
$
97.0
|
|
$
0.9
|
|
$
97.9
|
|
|
|
|
|
|
|
|
|
For the Six Months
Ended July 1, 2023
|
|
|
North
America
|
|
Other
|
|
Total
|
|
Revenue,
net
|
|
|
|
|
|
|
|
Water Direct/Water
Exchange
|
|
$
655.3
|
|
$
—
|
|
$
655.3
|
|
Water Refill/Water
Filtration
|
|
107.6
|
|
—
|
|
107.6
|
|
Other
Water1
|
|
23.2
|
|
—
|
|
23.2
|
|
Water
Dispensers
|
|
29.4
|
|
—
|
|
29.4
|
|
Other
|
|
47.3
|
|
0.3
|
|
47.6
|
|
Total
|
|
$
862.8
|
|
$
0.3
|
|
$
863.1
|
|
|
|
|
|
|
|
|
Gross profit
|
|
$
549.5
|
|
$
0.3
|
|
$
549.8
|
|
Gross margin
%
|
|
63.7 %
|
|
100.0 %
|
|
63.7 %
|
|
Selling, general and
administrative expenses
|
|
$
452.1
|
|
$
29.1
|
|
$
481.2
|
|
SG&A % of
revenue2
|
|
52.4 %
|
|
NM
|
|
55.8 %
|
|
Operating income
(loss)
|
|
$
92.0
|
|
$
(29.2)
|
|
$
62.8
|
|
Depreciation and
amortization
|
|
$
93.6
|
|
$
0.7
|
|
$
94.3
|
|
____________________________
|
|
|
|
|
|
|
|
1 Primarily
Mountain Valley retail and on-premise revenue
|
|
2 "NM"
defined as not meaningful
|
|
PRIMO WATER
CORPORATION
|
|
|
|
|
|
|
EXHIBIT
5
|
|
SUPPLEMENTARY
INFORMATION - NON-GAAP - EARNINGS BEFORE INTEREST,
TAXES, DEPRECIATION & AMORTIZATION
|
|
|
|
|
|
(EBITDA)
|
|
|
|
|
|
|
|
|
(in millions of U.S.
dollars, except percentage amounts)
|
|
|
|
|
|
|
|
Unaudited
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Three Months
Ended
|
|
For the Six Months
Ended
|
|
June 29,
2024
|
|
July 1,
2023
|
|
June 29,
2024
|
|
July 1,
2023
|
|
|
|
|
|
|
|
|
|
Net income from
continuing operations
|
$
13.3
|
|
$
13.6
|
|
$
32.0
|
|
$
16.8
|
|
Interest expense,
net
|
9.2
|
|
18.8
|
|
19.2
|
|
37.0
|
|
Income tax
expense
|
14.0
|
|
8.4
|
|
23.5
|
|
8.7
|
|
Depreciation and
amortization
|
49.7
|
|
47.2
|
|
97.9
|
|
94.3
|
|
EBITDA
|
$
86.2
|
|
$
88.0
|
|
$
172.6
|
|
$
156.8
|
|
|
|
|
|
|
|
|
|
Acquisition and
integration costs (a)
|
13.1
|
|
1.9
|
|
18.4
|
|
3.6
|
|
Share-based
compensation costs (b)
|
9.5
|
|
2.7
|
|
12.5
|
|
4.7
|
|
Foreign exchange and
other losses, net (c)
|
2.7
|
|
0.3
|
|
0.8
|
|
0.1
|
|
Loss on disposal of
property, plant and equipment, net (d)
|
1.3
|
|
0.9
|
|
2.8
|
|
2.2
|
|
Gain on sale of
property (e)
|
—
|
|
—
|
|
(0.5)
|
|
—
|
|
Other adjustments, net
(f)
|
0.1
|
|
4.5
|
|
0.2
|
|
6.5
|
|
Adjusted
EBITDA
|
$
112.9
|
|
$
98.3
|
|
$
206.8
|
|
$
173.9
|
|
|
|
|
|
|
|
|
|
Revenue,
net
|
$
485.0
|
|
$
450.6
|
|
$
937.0
|
|
$
863.1
|
|
Adjusted EBITDA
margin %
|
23.3 %
|
|
21.8 %
|
|
22.1 %
|
|
20.1 %
|
|
|
|
For the Three Months
Ended
|
|
For the Six Months
Ended
|
|
Location in
Consolidated
Statements of Operations
|
|
June 29,
2024
|
|
July 1,
2023
|
|
June 29,
2024
|
|
July 1,
2023
|
|
|
|
(Unaudited)
|
|
(Unaudited)
|
|
(a) Acquisition and
integration costs
|
Acquisition and
integration expenses
|
|
$
13.1
|
|
$
1.9
|
|
$
18.4
|
|
$
3.6
|
|
(b) Share-based
compensation costs
|
Selling, general and
administrative expenses
|
|
9.5
|
|
2.7
|
|
12.5
|
|
4.7
|
|
(c) Foreign exchange
and other gains, net
|
Other expense,
net
|
|
2.7
|
|
0.3
|
|
0.8
|
|
0.1
|
|
(d) Loss on disposal of
property, plant and equipment, net
|
Loss on disposal of
property, plant and equipment, net
|
|
1.3
|
|
0.9
|
|
2.8
|
|
2.2
|
|
(e) Gain on sale of
property
|
Gain on sale of
property
|
|
—
|
|
—
|
|
(0.5)
|
|
—
|
|
(f) Other adjustments,
net
|
Other expense,
net
|
|
—
|
|
(0.4)
|
|
(0.7)
|
|
(0.6)
|
|
Selling, general and
administrative expenses
|
|
0.1
|
|
4.9
|
|
0.9
|
|
7.1
|
|
PRIMO WATER
CORPORATION
|
|
|
|
EXHIBIT
6
|
|
SUPPLEMENTARY
INFORMATION - NON-GAAP - FREE CASH FLOW AND ADJUSTED FREE CASH
FLOW
|
|
(in millions of U.S.
dollars)
|
|
|
|
|
|
Unaudited
|
|
|
|
|
|
|
|
|
|
|
|
For the Three Months
Ended
|
|
|
June 29,
2024
|
|
July 1,
2023
|
|
|
|
|
|
|
Net cash provided by
operating activities of continuing operations
|
|
$
101.3
|
|
$
65.2
|
|
Less: Additions
to property, plant, and equipment
|
|
(37.3)
|
|
(27.0)
|
|
Less: Additions
to intangible assets
|
|
(3.0)
|
|
(2.0)
|
|
Free Cash
Flow
|
|
$
61.0
|
|
$
36.2
|
|
|
|
|
|
|
Acquisition and
integration cash costs
|
|
11.5
|
|
1.3
|
|
Cash costs related to
additions to property, plant and equipment for integration of
acquired entities
|
|
0.3
|
|
0.1
|
|
COVID-19 related
refunds
|
|
(0.8)
|
|
—
|
|
Cash taxes paid for
property sales
|
|
1.3
|
|
0.8
|
|
Tariffs refunds related
to property, plant, and equipment
|
|
—
|
|
1.0
|
|
Adjusted Free Cash
Flow
|
|
$
73.3
|
|
$
39.4
|
|
|
|
|
|
|
|
For the Six Months
Ended
|
|
|
June 29,
2024
|
|
July 1,
2023
|
|
|
|
|
|
|
Net cash provided by
operating activities of continuing operations
|
|
$
164.7
|
|
$
95.5
|
|
Less: Additions
to property, plant, and equipment
|
|
(74.9)
|
|
(69.2)
|
|
Less: Additions
to intangible assets
|
|
(5.3)
|
|
(4.0)
|
|
Free Cash
Flow
|
|
$
84.5
|
|
$
22.3
|
|
|
|
|
|
|
Acquisition and
integration cash costs
|
|
13.9
|
|
3.8
|
|
Cash costs related to
additions to property, plant and equipment for integration of
acquired entities
|
|
0.7
|
|
0.1
|
|
COVID-19 related
refunds
|
|
(0.8)
|
|
—
|
|
Cash taxes paid for
property sales
|
|
1.3
|
|
0.8
|
|
Tariffs refunds related
to property, plant, and equipment
|
|
2.1
|
|
1.4
|
|
Adjusted Free Cash
Flow
|
|
$
101.7
|
|
$
28.4
|
|
|
|
|
|
|
PRIMO WATER
CORPORATION
|
|
|
|
|
|
|
EXHIBIT
7
|
|
SUPPLEMENTARY
INFORMATION-NON-GAAP-ADJUSTED NET INCOME AND ADJUSTED
EPS
|
|
|
|
(in millions of U.S.
dollars, except share amounts)
|
|
|
|
|
|
|
|
|
Unaudited
|
|
|
|
|
|
|
|
|
For the Three Months
Ended
|
|
For the Six Months
Ended
|
|
June 29,
2024
|
|
July 1,
2023
|
|
June 29,
2024
|
|
July 1,
2023
|
|
Net income from
continuing operations
|
$
13.3
|
|
$
13.6
|
|
$
32.0
|
|
$
16.8
|
|
|
|
|
|
|
|
|
|
Adjustments:
|
|
|
|
|
|
|
|
|
Amortization expense of
customer lists
|
7.1
|
|
7.4
|
|
14.2
|
|
14.7
|
|
Acquisition and
integration costs
|
13.1
|
|
1.9
|
|
18.4
|
|
3.6
|
|
Share-based
compensation costs
|
9.5
|
|
2.7
|
|
12.5
|
|
4.7
|
|
Foreign exchange and
other losses, net
|
2.7
|
|
0.3
|
|
0.8
|
|
0.1
|
|
Gain on sale of
property
|
—
|
|
—
|
|
(0.5)
|
|
—
|
|
Other adjustments,
net
|
0.1
|
|
4.5
|
|
0.2
|
|
6.5
|
|
Tax impact of
adjustments1
|
(4.0)
|
|
0.8
|
|
(5.3)
|
|
(4.0)
|
|
Adjusted net
income
|
$
41.8
|
|
$
31.2
|
|
$
72.3
|
|
$
42.4
|
|
|
|
|
|
|
|
|
|
Earnings Per Share
(as reported)
|
|
|
|
|
|
|
|
|
Net income from
continuing operations
|
$
13.3
|
|
$
13.6
|
|
$
32.0
|
|
$
16.8
|
|
|
|
|
|
|
|
|
|
Basic EPS
|
$
0.08
|
|
$
0.09
|
|
$
0.20
|
|
$
0.11
|
|
Diluted EPS
|
$
0.08
|
|
$
0.09
|
|
$
0.20
|
|
$
0.11
|
|
|
|
|
|
|
|
|
|
Weighted average
common shares outstanding (in thousands)
|
|
|
|
|
|
|
|
|
Basic
|
160,112
|
|
159,196
|
|
159,843
|
|
159,465
|
|
Diluted
|
161,384
|
|
159,900
|
|
161,041
|
|
160,332
|
|
|
|
|
|
|
|
|
|
Adjusted Earnings
Per Share (Non-GAAP)
|
|
|
|
|
|
|
|
|
Adjusted net income
from continuing operations (Non-GAAP)
|
$
41.8
|
|
$
31.2
|
|
$
72.3
|
|
$
42.4
|
|
Adjusted diluted EPS
(Non-GAAP)
|
$
0.26
|
|
$
0.20
|
|
$
0.45
|
|
$
0.26
|
|
|
|
|
|
|
|
|
|
Weighted average
common shares outstanding (in thousands)
|
|
|
|
|
|
|
|
|
Basic
|
160,112
|
|
159,196
|
|
159,843
|
|
159,465
|
|
Diluted weighted
average common shares outstanding (in thousands)
(Non-GAAP)2
|
161,384
|
|
159,900
|
|
161,041
|
|
160,332
|
|
1 The tax
effect for adjusted net income is based upon an analysis of the
statutory tax treatment and the applicable tax rate for the
jurisdiction in which the pre-tax adjusting items incurred and for
which realization of the resulting tax benefit (if any) is
expected. A reduced or 0% tax rate is applied to jurisdictions
where we do not expect to realize a tax benefit due to a history of
operating losses or other factors resulting in a valuation
allowance related to deferred tax assets.
|
|
2 For the
periods presented, the non-GAAP diluted weighted average common
shares outstanding equaled the reported diluted weighted average
common shares outstanding.
|
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SOURCE Primo Water Corporation