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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION |
|
Washington, D.C. 20549 |
|
________________
FORM 8-K
________________ |
CURRENT REPORT
Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported):
August 10, 2023
________________ |
Primo Water
Corporation
(Exact name of registrant as specified in its charter)
________________ |
|
|
|
Ontario
(State or other jurisdiction
of incorporation) |
001-31410
(Commission
File Number) |
98-0154711
(IRS Employer
Identification No.) |
|
|
|
1150 Assembly Dr.
Suite 800
Tampa, Florida, United States
(Address of Principal Executive Offices) |
33607
(Zip Code) |
|
|
|
Registrant’s telephone number, including area
code: (813) 544-8515
________________ |
Check the appropriate box below if the Form 8-K filing is intended
to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
☐ Written
communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐ Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐ Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐ Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Securities registered pursuant to Section 12(b) of the Act: |
Title of each class |
Trading
Symbol(s) |
Name of each exchange
on which registered |
Common shares without nominal or par value |
PRMW |
New York Stock Exchange |
|
PRMW |
Toronto Stock Exchange |
Indicate by check mark whether the registrant is an emerging growth
company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange
Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ☐
If an emerging growth company, indicate
by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial
accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐ |
|
|
|
|
|
| Item 2.02. | Results of Operations and Financial Condition. |
On
August 10, 2023, Primo Water Corporation (the “Company”) issued a press release reporting financial results for the second
quarter ended July 1, 2023. A copy of the press release is furnished herewith under the Securities Exchange Act of 1934, as amended,
as Exhibit 99.1 to this Form 8-K and is incorporated by reference into this Item 2.02 as if fully set forth herein.
On
August 10, 2023, the Company announced that the Board of Directors authorized a new $50 million share repurchase program. The Company
intends to manage this program opportunistically and make repurchases from time to time when management believes market conditions are
favorable.
The
Company also announced that the Board of Directors declared a dividend of US$0.08 per common share, payable in cash on September 7, 2023
to shareowners of record at the close of business on August 24, 2023.
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits
SIGNATURES
Pursuant to the requirements of the Securities
Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
|
Primo Water Corporation |
|
(Registrant) |
August 10, 2023 |
|
|
|
By: |
/s/ Marni Morgan Poe |
|
|
Marni Morgan Poe |
|
|
Chief Legal Officer and Secretary |
Exhibit 99.1
CONTACT:
Jon Kathol
Vice President, Investor Relations
Tel:813-544-8515
investorrelations@primowater.com
PRIMO WATER ANNOUNCES STRONG
SECOND QUARTER 2023 RESULTS AND INCREASES ANNUAL GUIDANCE
| • | Delivered high end of Q2 Revenue and high end of Adjusted
EBITDA guidance |
| • | Increased Revenue 4% to $593.3 million |
| • | Declares quarterly dividend of $0.08 per common share,
a 14% increase over last year's dividend |
| • | Authorizes new $50 million share repurchase program |
| • | Increases full-year 2023 Revenue, Adjusted EBITDA and
Adjusted Free Cash Flow Guidance |
TAMPA, FL - August 10, 2023 - Primo
Water Corporation (NYSE: PRMW; TSX: PRMW) (the “Company” or “Primo Water”), a leading provider of sustainable
drinking water solutions in North America and Europe, today announced its results for the second quarter ended July 1, 2023.
(Unless stated otherwise, all second quarter 2023
comparisons are relative to the second quarter of 2022; all information is in U.S. dollars. Non-GAAP reconciliations presented on the
exhibits to this press release)
SECOND QUARTER
HIGHLIGHTS
| • | Revenue increased 4% to $593 million compared
to $571 million driven by revenue growth of 7% in Water Direct / Water Exchange and 18% in Water Refill / Water Filtration, partially
offset by the exit from our North America single use bottled water retail business and the exit from our business in Russia. |
| • | Reported net income and net income per diluted
share were $21 million and $0.13, respectively, compared to reported net loss and net loss per diluted share of $23 million
and $0.14, respectively. Adjusted net income and adjusted net income per diluted share were $39 million and $0.24, respectively,
compared to $33 million and $0.21, respectively. Gross margin increased 390 bps to 62.1% compared to 58.2%. |
| • | Adjusted EBITDA increased 13% to $122 million
and Adjusted EBITDA margin increased 160 bps to 20.5%. |
| • | The Company increases its full year 2023 revenue
target to between $2.32 billion and $2.36 billion and increases its full year 2023 Adjusted EBITDA to between $460 million and $480
million. Full year Adjusted Free Cash Flow is forecasted to be approximately $150 million, an increase of $10 million. |
| • | The Company
reaffirms its 2024 outlook for high single-digit organic revenue growth and 2024 Adjusted EBITDA approaching $530 million. |
| |
For the Three Months Ended |
(in millions of U.S. dollars, except per share amounts, percentages and bps) | |
July 1, 2023 | |
July 2, 2022 | |
Y/Y Change |
Revenue, net (1) | |
$ | 593.3 | | |
$ | 571.4 | | |
| 4 | % |
Net income (loss) | |
$ | 21.3 | | |
$ | (22.5 | ) | |
$ | 43.8 | |
Net income (loss) per diluted share | |
$ | 0.13 | | |
$ | (0.14 | ) | |
$ | 0.27 | |
Adjusted net income | |
$ | 38.8 | | |
$ | 33.3 | | |
$ | 5.5 | |
Adjusted net income per diluted share | |
$ | 0.24 | | |
$ | 0.21 | | |
$ | 0.03 | |
Adjusted EBITDA | |
$ | 121.6 | | |
$ | 108.0 | | |
| 13 | % |
Adjusted EBITDA margin % | |
| 20.5 | % | |
| 18.9 | % | |
| 160 bps | |
1Reported revenue in Q2
2022 includes $14.4 million of revenues associated with our North American single use bottled water retail business and $3.7 million of
revenues associated with our Russia business; there is no revenue attributable to these businesses in Q2 2023, as we exited these businesses
in 2022.
“We once again delivered strong revenue
and earnings growth, driven by improved route density, network efficiencies and optimization, the benefits of our investments and pricing.
I am proud of the efforts of our team and their focus on improving the customer experience,” said Tom Harrington, Chief Executive
Officer.
“Our
second quarter performance gives us confidence to increase our 2023 outlook to between $2.32 billion and $2.36 billion of revenue and
Adjusted EBITDA to between $460 million and $480 million. Full year Adjusted Free Cash Flow is now forecasted to increase to approximately
$150 million, an increase of $10 million. We are also reaffirming our 2024 outlook for high single digit organic revenue growth and Adjusted
EBITDA approaching $530 million,” said Mr. Harrington.
OUTLOOK
Primo Water is targeting the following results from
continuing operations for the third quarter and full year 2023:
|
Q3 2023 Range |
FY 2023 Range |
($ in millions) |
Low |
High |
Low |
High |
Revenue |
$612 |
$632 |
$2,320 |
$2,360 |
Adjusted EBITDA |
$129 |
$139 |
$460 |
$480 |
Cash Taxes |
|
|
~ $25 |
Interest |
|
|
$70 |
$75 |
Cap-Ex |
|
|
~ $200 |
Adj. Free Cash Flow |
|
|
~ $150 |
SECOND QUARTER 2023
RESULTS CONFERENCE CALL
Primo Water will host a conference call, to
be simultaneously webcast, on Thursday, August 10, 2023, at 10:00 a.m. Eastern Time. A question-and-answer
session will follow management's presentation. To participate, please call the following numbers:
North America: (888) 664-6392
International: (416) 764-8659
Conference ID: 73605034
This is a live, listen-only dial-in telephone
line.
A slide presentation and live
audio webcast will be available through Primo Water’s website at https://www.primowatercorp.com.
The earnings conference call will be recorded and archived for playback on the investor relations section of the website for a period
of two weeks following the event.
SECOND QUARTER GLOBAL
PERFORMANCE
| • | Revenue increased 4% to $593 million
compared to $571 million. The increase was driven by revenue growth of 7% in Water Direct / Water Exchange and 18% in Water Refill
/ Water Filtration, due primarily to pricing initiatives and increased
demand for products and services from residential and business customers, partially offset by the exits from our North America single
use bottled water retail business and our business in Russia in the prior year. Revenue growth by channel is tabulated below: |
| |
For the Three Months Ended |
(in millions of U.S. dollars) | |
July 1, 2023 | |
July 2, 2022 | |
Change | |
% Change |
Revenue, net (2) | |
| | | |
| | | |
| | | |
| | |
Water Direct/Water Exchange | |
$ | 414.1 | | |
$ | 386.5 | | |
$ | 27.6 | | |
| 7 | % |
Water Refill/Water Filtration | |
| 66.1 | | |
| 56.2 | | |
$ | 9.9 | | |
| 18 | % |
Other Water | |
| 31.9 | | |
| 44.1 | | |
$ | (12.2 | ) | |
| (28 | )% |
Water Dispensers | |
| 17.1 | | |
| 18.5 | | |
$ | (1.4 | ) | |
| (8 | )% |
Other | |
| 64.1 | | |
| 66.1 | | |
$ | (2.0 | ) | |
| (3 | )% |
Revenue, net as reported | |
$ | 593.3 | | |
$ | 571.4 | | |
$ | 21.9 | | |
| 4 | % |
Foreign exchange impact | |
| 2.4 | | |
| — | | |
$ | 2.4 | | |
| n/a | |
Revenue excluding foreign exchange impact | |
$ | 595.7 | | |
$ | 571.4 | | |
$ | 24.3 | | |
| 4 | % |
2Reported revenue in Q2
2022 includes $14.4 million of revenues associated with our North American single use bottled water retail business and $3.7 million of
revenues associated with our Russia business; there is no revenue attributable to these businesses in Q2 2023, as we exited these businesses
in 2022.
| • | Gross profit increased 11% to $368 million compared
to $332 million. Gross margin increased 390 bps to 62.1% compared to 58.2%, driven by pricing initiatives, increased demand, and the exit
from the single-use retail bottled water business in North America. |
| • | SG&A expenses increased 9% to $318 million
compared to $292 million. The increase was driven by higher selling and operating costs that supported volume and revenue growth related
primarily to labor costs increases and an increase in professional fees. |
| • | Reported net income and net
income per diluted share were $21 million and $0.13, respectively,
compared to reported net loss and net loss per diluted share of $23 million and $0.14, respectively. Adjusted net income and adjusted
net income per diluted share were $39 million and $0.24, respectively, compared to $33 million and $0.21 in the prior year. |
| • | Adjusted EBITDA increased 13% to $122 million
compared to $108 million, driven primarily by pricing initiatives, customer demand and effective expense management. Adjusted EBITDA
margin was 20.5% for the quarter, compared to 18.9%. |
| • | Net
cash provided by operating activities of $77 million, less $39 million of capital expenditures and additions to intangible assets,
resulted in $38 million of free cash flow, or $41 million of adjusted free cash flow (adjusting for the items set forth on Exhibit
7), compared to adjusted free cash flow of $21 million in the prior year. |
SECOND QUARTER REPORTING
SEGMENT PERFORMANCE
North America
| • | Revenue increased
3% to $451 million driven by revenue growth of 7% in Water Direct / Water Exchange, and 17% in Water Refill / Water Filtration driven
by pricing initiatives, partially offset by the exit from our single use bottled water retail business.
|
| |
For the Three Months Ended |
(in millions of U.S. dollars) | |
July 1, 2023 | |
July 2, 2022 | |
Change | |
% Change |
Revenue, net (3) | |
| | | |
| | | |
| | | |
| | |
Water Direct/Water Exchange | |
$ | 342.9 | | |
$ | 321.1 | | |
$ | 21.8 | | |
| 7 | % |
Water Refill/Water Filtration | |
| 55.4 | | |
| 47.3 | | |
$ | 8.1 | | |
| 17 | % |
Other Water | |
| 11.9 | | |
| 22.2 | | |
$ | (10.3 | ) | |
| (46 | )% |
Water Dispensers | |
| 16.7 | | |
| 18.5 | | |
$ | (1.8 | ) | |
| (10 | )% |
Other | |
| 23.6 | | |
| 27.6 | | |
$ | (4.0 | ) | |
| (14 | )% |
Revenue, net as reported | |
$ | 450.5 | | |
$ | 436.7 | | |
$ | 13.8 | | |
| 3 | % |
Foreign exchange impact | |
| 0.9 | | |
| — | | |
$ | 0.9 | | |
| n/a | |
Revenue excluding foreign exchange impact | |
$ | 451.4 | | |
$ | 436.7 | | |
$ | 14.7 | | |
| 3 | % |
3Reported revenue in Q2 2022 includes
$14.4 million of revenues associated with our North American single use bottled water retail business; there is no revenue attributable
to this business in Q2 2023, as we exited this business in the second quarter of 2022.
Europe
| • | Revenue increased 12% to
$78 million (increased 9% excluding the impact of foreign exchange)
driven by pricing initiatives, increased demand for products and services from residential and business customers, and favorable impact
of foreign exchange rates, partially offset by the exit from our business in Russia. |
| |
For the Three Months Ended |
(in millions of U.S. dollars) | |
July 1, 2023 | |
July 2, 2022 | |
Change | |
% Change |
Revenue, net (4) | |
| | | |
| | | |
| | | |
| | |
Water Direct/Water Exchange | |
$ | 60.2 | | |
$ | 53.7 | | |
$ | 6.5 | | |
| 12 | % |
Water Refill/Water Filtration | |
| 9.9 | | |
| 8.2 | | |
$ | 1.7 | | |
| 21 | % |
Other Water | |
| 0.3 | | |
| 0.4 | | |
$ | (0.1 | ) | |
| (25 | )% |
Water Dispensers | |
| 0.4 | | |
| — | | |
$ | 0.4 | | |
| 100 | % |
Other | |
| 7.2 | | |
| 7.6 | | |
$ | (0.4 | ) | |
| (5 | )% |
Revenue, net as reported | |
$ | 78.0 | | |
$ | 69.9 | | |
$ | 8.1 | | |
| 12 | % |
Foreign exchange impact | |
| (1.9 | ) | |
| — | | |
$ | (1.9 | ) | |
| n/a | |
Revenue excluding foreign exchange impact | |
$ | 76.1 | | |
$ | 69.9 | | |
$ | 6.2 | | |
| 9 | % |
4Reported revenue in the three months ended
Q2 2022 includes $3.7 million of revenues associated with our Russia business; there is no revenue attributable to this business in the
three months ended Q2 2023, as we exited this business in the third quarter of 2022.
QUARTERLY DIVIDEND
Primo Water announced that its Board of Directors
declared a dividend of US$0.08 per share on common shares, payable in cash on September 7, 2023 to shareowners of record at the close
of business on August 24, 2023.
SHARE
REPURCHASE PROGRAM
Primo Water also announced that its Board of Directors authorized
a new $50 million share repurchase program, which replaces the previously authorized share repurchase program that expires on August 14,
2023. Under the program, the Company’s common shares may be repurchased periodically in open market or privately negotiated transactions
through the facilities of the NYSE.
The actual timing, manner, number, and value of shares repurchased
under the program will be determined by management at its discretion and will depend on a number of factors, including the market price
of Primo Water’s common shares, general market and economic conditions, applicable law and other requirements, and other business
considerations, provided however that the price per common share will not exceed the market price as at the date of acquisition (plus
reasonable brokerage fees and commissions) in accordance with applicable securities laws and exchange rules.
ABOUT PRIMO
WATER CORPORATION
Primo Water is a leading pure-play water solutions
provider in North America and Europe and generated approximately $2.2 billion in annual revenue in 2022. Primo Water 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 10,300 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 across its 21-country footprint 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 17,500 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 its 21-country footprint.
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 as well as with Watercoolers Europe (WE), which ensure 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 excludes from GAAP revenue the impact of foreign exchange to separate its impact from Primo Water’s results of operations.
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 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 2023 and full year 2023 Adjusted EBITDA, 2024 Adjusted EBITDA, 2024
organic revenue growth and 2023 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 taxes,
interest costs that would occur if the Company issued debt, and costs to acquire and/or sell a business if the Company executed such transactions,
which could significantly affect our financial results. 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. 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 third quarter and full year 2023 revenue and Adjusted EBITDA and Primo Water’s outlook for 2024),
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: financial condition and results of operations; Primo Water’s
ability to compete successfully in the markets in which it operates; 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
supply chain disruptions and cost increases related to inflation; Primo Water’s ability to manage its operations successfully; currency
fluctuations that adversely affect the exchange between currencies including the U.S. dollar, the British pound sterling, the Euro 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; 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; Primo Water’s ability to renew its collective bargaining agreements from
time to time on satisfactory terms; 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 international 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; 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; Primo Water’s ability to maintain its quarterly dividend;
or 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 |
| |
|
July 1, 2023 |
| |
|
July 2, 2022 |
| |
|
July 1, 2023 |
| |
|
July 2, 2022 |
|
Revenue, net | |
$ | 593.3 | | |
$ | 571.4 | | |
$ | 1,139.8 | | |
$ | 1,097.5 | |
Cost of sales | |
| 225.0 | | |
| 239.1 | | |
| 443.2 | | |
| 465.6 | |
Gross profit | |
| 368.3 | | |
| 332.3 | | |
| 696.6 | | |
| 631.9 | |
Selling, general and administrative expenses | |
| 317.7 | | |
| 291.6 | | |
| 621.2 | | |
| 569.9 | |
Loss on disposal of property, plant and equipment, net | |
| 1.2 | | |
| 0.1 | | |
| 2.5 | | |
| 1.8 | |
Acquisition and integration expenses | |
| 1.8 | | |
| 4.9 | | |
| 3.8 | | |
| 9.2 | |
Impairment charges | |
| — | | |
| 29.1 | | |
| — | | |
| 29.1 | |
Operating income | |
| 47.6 | | |
| 6.6 | | |
| 69.1 | | |
| 21.9 | |
Other (income) expense, net | |
| (4.5 | ) | |
| 10.7 | | |
| (10.8 | ) | |
| 13.4 | |
Interest expense, net | |
| 19.8 | | |
| 17.0 | | |
| 38.6 | | |
| 33.9 | |
Income (loss) before income taxes | |
| 32.3 | | |
| (21.1 | ) | |
| 41.3 | | |
| (25.4 | ) |
Income tax expense | |
| 11.0 | | |
| 1.4 | | |
| 14.2 | | |
| 3.8 | |
Net income (loss) | |
$ | 21.3 | | |
$ | (22.5 | ) | |
$ | 27.1 | | |
$ | (29.2 | ) |
| |
| | | |
| | | |
| | | |
| | |
Net income (loss) per common share | |
| | | |
| | | |
| | | |
| | |
| |
| | | |
| | | |
| | | |
| | |
Basic | |
$ | 0.13 | | |
$ | (0.14 | ) | |
$ | 0.17 | | |
$ | (0.18 | ) |
Diluted | |
$ | 0.13 | | |
$ | (0.14 | ) | |
$ | 0.17 | | |
$ | (0.18 | ) |
| |
| | | |
| | | |
| | | |
| | |
Weighted average common shares outstanding (in thousands) | |
| | | |
| | | |
| | | |
| | |
Basic | |
| 159,196 | | |
| 161,149 | | |
| 159,465 | | |
| 161,038 | |
Diluted | |
| 159,900 | | |
| 161,149 | | |
| 160,332 | | |
| 161,038 | |
| |
| | | |
| | | |
| | | |
| | |
| |
| | | |
| | | |
| | | |
| | |
PRIMO WATER CORPORATION | |
| |
EXHIBIT 2 |
CONSOLIDATED BALANCE SHEETS | |
| |
|
(in millions of U.S. dollars, except share amounts) | |
| |
|
Unaudited | |
| |
|
| |
| |
|
| |
July 1, 2023 | |
December 31, 2022 |
ASSETS | |
| | | |
| | |
Current assets | |
| | | |
| | |
Cash and cash equivalents | |
$ | 86.8 | | |
$ | 122.6 | |
Accounts receivable, net of allowance of $22.1 ($20.6 as of December 31,2022) | |
| 293.2 | | |
| 258.6 | |
Inventories | |
| 105.7 | | |
| 112.1 | |
Prepaid expenses and other current assets | |
| 51.5 | | |
| 44.7 | |
Total current assets | |
| 537.2 | | |
| 538.0 | |
Property, plant and equipment, net | |
| 712.8 | | |
| 714.4 | |
Operating lease right-of-use-assets | |
| 197.3 | | |
| 198.6 | |
Goodwill | |
| 1,300.2 | | |
| 1,293.0 | |
Intangible assets, net | |
| 886.2 | | |
| 894.7 | |
Other long-term assets, net | |
| 25.4 | | |
| 28.3 | |
Total assets | |
$ | 3,659.1 | | |
$ | 3,667.0 | |
LIABILITIES AND EQUITY | |
| | | |
| | |
Current liabilities | |
| | | |
| | |
Short-term borrowings | |
$ | 231.0 | | |
$ | 212.3 | |
Current maturities of long-term debt | |
| 16.5 | | |
| 17.5 | |
Accounts payable and accrued liabilities | |
| 407.0 | | |
| 425.1 | |
Current operating lease obligations | |
| 36.2 | | |
| 35.7 | |
Total current liabilities | |
| 690.7 | | |
| 690.6 | |
Long-term debt | |
| 1,289.9 | | |
| 1,283.8 | |
Operating lease obligations | |
| 172.1 | | |
| 174.5 | |
Deferred tax liabilities | |
| 177.4 | | |
| 170.0 | |
Other long-term liabilities | |
| 63.2 | | |
| 65.2 | |
Total liabilities | |
| 2,393.3 | | |
| 2,384.1 | |
Equity | |
| | | |
| | |
Common shares, no par value 159,240,481- (December 31, 2022 - 159,752,299) shares issued | |
| 1,283.1 | | |
| 1,283.2 | |
Additional paid-in-capital | |
| 88.4 | | |
| 91.3 | |
Accumulated deficit | |
| (16.9 | ) | |
| (9.4 | ) |
Accumulated other comprehensive loss | |
| (88.8 | ) | |
| (82.2 | ) |
Total Primo Water Corporation equity | |
| 1,265.8 | | |
| 1,282.9 | |
Total liabilities and equity | |
$ | 3,659.1 | | |
$ | 3,667.0 | |
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 |
| |
|
July 1, 2023 |
| |
|
July 2, 2022 |
| |
|
July 1, 2023 |
| |
|
July 2, 2022 |
|
| |
| |
| |
| |
|
Cash flows from operating activities: | |
| | | |
| | | |
| | | |
| | |
Net income (loss) | |
$ | 21.3 | | |
$ | (22.5 | ) | |
$ | 27.1 | | |
$ | (29.2 | ) |
Adjustments to reconcile net income (loss) to cash flows from operating activities: | |
| | | |
| | | |
| | | |
| | |
Depreciation and amortization | |
| 62.9 | | |
| 60.2 | | |
| 125.3 | | |
| 121.4 | |
Amortization of financing fees | |
| 0.9 | | |
| 0.8 | | |
| 1.7 | | |
| 1.7 | |
Share-based compensation expense | |
| 3.0 | | |
| 4.2 | | |
| 5.3 | | |
| 7.5 | |
Provision (benefit) for deferred income taxes | |
| 5.6 | | |
| (0.1 | ) | |
| 6.4 | | |
| 1.5 | |
Impairment charges | |
| — | | |
| 29.1 | | |
| — | | |
| 29.1 | |
Loss on disposal of property, plant and equipment, net | |
| 1.2 | | |
| 0.1 | | |
| 2.5 | | |
| 1.8 | |
Other non-cash items | |
| (5.3 | ) | |
| 11.0 | | |
| (12.0 | ) | |
| 12.7 | |
Change in operating assets and liabilities, net of acquisitions: | |
| | | |
| | | |
| | | |
| | |
Accounts receivable | |
| (30.6 | ) | |
| (21.3 | ) | |
| (33.5 | ) | |
| (33.2 | ) |
Inventories | |
| (2.6 | ) | |
| (8.0 | ) | |
| (0.5 | ) | |
| (19.1 | ) |
Prepaid expenses and other current assets | |
| 4.1 | | |
| 1.0 | | |
| (0.8 | ) | |
| (5.2 | ) |
Other assets | |
| (0.2 | ) | |
| 0.7 | | |
| (0.3 | ) | |
| — | |
Accounts payable and accrued liabilities and other liabilities | |
| 16.5 | | |
| 11.5 | | |
| (10.1 | ) | |
| 1.3 | |
Net cash provided by operating activities | |
| 76.8 | | |
| 66.7 | | |
| 111.1 | | |
| 90.3 | |
Cash flows from investing activities: | |
| | | |
| | | |
| | | |
| | |
Acquisitions, net of cash received | |
| (15.6 | ) | |
| (7.1 | ) | |
| (23.1 | ) | |
| (7.4 | ) |
Additions to property, plant and equipment | |
| (36.0 | ) | |
| (46.6 | ) | |
| (89.7 | ) | |
| (85.2 | ) |
Additions to intangible assets | |
| (2.7 | ) | |
| (2.4 | ) | |
| (5.4 | ) | |
| (4.9 | ) |
Proceeds from sale of property, plant and equipment | |
| 0.3 | | |
| 0.6 | | |
| 0.5 | | |
| 1.0 | |
Proceeds from sale of business, net of cash sold | |
| 0.5 | | |
| — | | |
| 0.5 | | |
| — | |
Other investing activities | |
| 1.1 | | |
| (0.1 | ) | |
| 3.3 | | |
| 0.4 | |
Net cash used in investing activities | |
| (52.4 | ) | |
| (55.6 | ) | |
| (113.9 | ) | |
| (96.1 | ) |
| |
| | | |
| | | |
| | | |
| | |
Cash flows from financing activities: | |
| | | |
| | | |
| | | |
| | |
Payments of long-term debt | |
| (4.8 | ) | |
| (5.2 | ) | |
| (9.8 | ) | |
| (9.7 | ) |
Proceeds from short-term borrowings | |
| 43.0 | | |
| 10.0 | | |
| 104.0 | | |
| 10.0 | |
Payments on short-term borrowings | |
| (59.8 | ) | |
| — | | |
| (93.0 | ) | |
| — | |
Issuance of common shares | |
| 0.4 | | |
| 0.4 | | |
| 4.7 | | |
| 1.6 | |
Common shares repurchased and canceled | |
| (2.5 | ) | |
| (0.2 | ) | |
| (21.8 | ) | |
| (2.0 | ) |
Dividends paid to common shareholders | |
| (13.1 | ) | |
| (11.6 | ) | |
| (25.9 | ) | |
| (22.9 | ) |
Payment of deferred consideration for acquisitions | |
| (0.2 | ) | |
| — | | |
| (1.0 | ) | |
| (0.1 | ) |
Other financing activities | |
| 2.3 | | |
| 0.7 | | |
| 8.4 | | |
| 4.6 | |
Net cash used in financing activities | |
| (34.7 | ) | |
| (5.9 | ) | |
| (34.4 | ) | |
| (18.5 | ) |
Effect of exchange rate changes on cash | |
| 0.6 | | |
| (1.0 | ) | |
| 1.4 | | |
| (1.9 | ) |
Net (decrease) increase in cash, cash equivalents and restricted cash | |
| (9.7 | ) | |
| 4.2 | | |
| (35.8 | ) | |
| (26.2 | ) |
Cash and cash equivalents and restricted cash, beginning of period | |
| 96.5 | | |
| 98.0 | | |
| 122.6 | | |
| 128.4 | |
Cash and cash equivalents and restricted cash, end of period | |
$ | 86.8 | | |
$ | 102.2 | | |
$ | 86.8 | | |
$ | 102.2 | |
| |
| | | |
| | | |
| | | |
| | |
Cash and cash equivalents and restricted cash: | |
| | | |
| | | |
| | | |
| | |
Cash and cash equivalents | |
$ | 86.8 | | |
$ | 98.5 | | |
$ | 86.8 | | |
$ | 98.5 | |
Cash included in prepaid expenses and other current assets | |
| — | | |
| 3.7 | | |
| — | | |
| 3.7 | |
Total | |
$ | 86.8 | | |
$ | 102.2 | | |
$ | 86.8 | | |
$ | 102.2 | |
PRIMO WATER CORPORATION |
| |
EXHIBIT 4 |
SEGMENT INFORMATION | |
| |
| |
| |
|
(in millions of U.S. dollars, except percentage amounts) |
| |
|
Unaudited | |
| |
| |
| |
|
| |
For the Three Months Ended July 1, 2023 |
| |
North America | |
Europe | |
Other | |
Total |
Revenue, net | |
| | | |
| | | |
| | | |
| | |
Water Direct/Water Exchange | |
$ | 342.9 | | |
$ | 60.2 | | |
$ | 11.0 | | |
$ | 414.1 | |
Water Refill/Water Filtration | |
| 55.4 | | |
| 9.9 | | |
| 0.8 | | |
| 66.1 | |
Other Water | |
| 11.9 | | |
| 0.3 | | |
| 19.7 | | |
| 31.9 | |
Water Dispensers | |
| 16.7 | | |
| 0.4 | | |
| — | | |
| 17.1 | |
Other | |
| 23.6 | | |
| 7.2 | | |
| 33.3 | | |
| 64.1 | |
Total | |
$ | 450.5 | | |
$ | 78.0 | | |
$ | 64.8 | | |
$ | 593.3 | |
| |
| | | |
| | | |
| | | |
| | |
Gross profit | |
$ | 290.7 | | |
$ | 53.4 | | |
$ | 24.2 | | |
$ | 368.3 | |
Gross margin % | |
| 64.5 | % | |
| 68.5 | % | |
| 37.3 | % | |
| 62.1 | % |
Selling, general and administrative expenses | |
$ | 231.0 | | |
$ | 46.0 | | |
$ | 40.7 | | |
$ | 317.7 | |
SG&A % of revenue | |
| 51.3 | % | |
| 59.0 | % | |
| 62.8 | % | |
| 53.5 | % |
Operating income (loss) | |
$ | 57.3 | | |
$ | 7.1 | | |
$ | (16.8 | ) | |
$ | 47.6 | |
Depreciation and amortization | |
$ | 46.8 | | |
$ | 10.2 | | |
$ | 5.9 | | |
$ | 62.9 | |
| |
| | | |
| | | |
| | | |
| | |
| |
| For the Three Months Ended July 2, 2022 |
| |
| North America | | |
| Europe | | |
| Other | | |
| Total | |
Revenue, net | |
| | | |
| | | |
| | | |
| | |
Water Direct/Water Exchange | |
$ | 321.1 | | |
$ | 53.7 | | |
$ | 11.7 | | |
$ | 386.5 | |
Water Refill/Water Filtration | |
| 47.3 | | |
| 8.2 | | |
| 0.7 | | |
| 56.2 | |
Other Water | |
| 22.2 | | |
| 0.4 | | |
| 21.5 | | |
| 44.1 | |
Water Dispensers | |
| 18.5 | | |
| — | | |
| — | | |
| 18.5 | |
Other | |
| 27.6 | | |
| 7.6 | | |
| 30.9 | | |
| 66.1 | |
Total | |
$ | 436.7 | | |
$ | 69.9 | | |
$ | 64.8 | | |
$ | 571.4 | |
| |
| | | |
| | | |
| | | |
| | |
Gross profit | |
$ | 260.4 | | |
$ | 46.8 | | |
$ | 25.1 | | |
$ | 332.3 | |
Gross margin % | |
| 59.6 | % | |
| 67.0 | % | |
| 38.7 | % | |
| 58.2 | % |
Selling, general and administrative expenses | |
$ | 208.6 | | |
$ | 45.9 | | |
$ | 37.1 | | |
$ | 291.6 | |
SG&A % of revenue | |
| 47.8 | % | |
| 65.7 | % | |
| 57.3 | % | |
| 51.0 | % |
Operating income (loss) | |
$ | 48.3 | | |
$ | (29.1 | ) | |
$ | (12.6 | ) | |
$ | 6.6 | |
Depreciation and amortization | |
$ | 44.3 | | |
$ | 10.1 | | |
$ | 5.8 | | |
$ | 60.2 | |
| |
| | | |
| | | |
| | | |
| | |
| |
| For the Six Months Ended July 1, 2023 |
| |
| North America | | |
| Europe | | |
| Other | | |
| Total | |
Revenue, net | |
| | | |
| | | |
| | | |
| | |
Water Direct/Water Exchange | |
$ | 655.3 | | |
$ | 113.2 | | |
$ | 21.4 | | |
$ | 789.9 | |
Water Refill/Water Filtration | |
| 107.6 | | |
| 18.7 | | |
| 1.4 | | |
| 127.7 | |
Other Water | |
| 23.2 | | |
| 0.5 | | |
| 35.4 | | |
| 59.1 | |
Water Dispensers | |
| 29.4 | | |
| 0.5 | | |
| — | | |
| 29.9 | |
Other |
|
47.3 |
|
14.5 |
|
71.4 |
|
133.2 |
Total |
|
$ 862.8 |
|
$ 147.4 |
|
$ 129.6 |
|
$ 1,139.8 |
|
|
|
|
|
|
|
|
|
Gross profit |
|
$ 549.5 |
|
$ 100.9 |
|
$ 46.2 |
|
$ 696.6 |
Gross Margin % |
|
63.7 % |
|
68.5 % |
|
35.6 % |
|
61.1 % |
Selling, general and administrative expenses |
|
$ 452.1 |
|
$ 90.3 |
|
$ 78.8 |
|
$ 621.2 |
SG&A % of Revenue |
|
52.4 % |
|
61.3 % |
|
60.8 % |
|
54.5 % |
Operating income (loss) |
|
$ 92.0 |
|
$ 10.0 |
|
$ (32.9) |
|
$ 69.1 |
Depreciation and amortization |
|
$ 93.6 |
|
$ 19.8 |
|
$ 11.9 |
|
$ 125.3 |
|
|
|
|
|
|
|
|
|
|
|
For the Six Months Ended July 2, 2022 |
|
|
North America |
|
Europe |
|
Other |
|
Total |
Revenue, net |
|
|
|
|
|
|
|
|
Water Direct/Water Exchange |
|
$ 599.4 |
|
$ 101.9 |
|
$ 22.5 |
|
$ 723.8 |
Water Refill/Water Filtration |
|
89.5 |
|
16.4 |
|
1.2 |
|
107.1 |
Other Water |
|
56.2 |
|
0.8 |
|
37.5 |
|
94.5 |
Water Dispensers |
|
32.7 |
|
- |
|
- |
|
32.7 |
Other |
|
56.0 |
|
15.1 |
|
68.3 |
|
139.4 |
Total |
|
$ 833.8 |
|
$ 134.2 |
|
$ 129.5 |
|
$ 1,097.5 |
|
|
|
|
|
|
|
|
|
Gross profit |
|
$ 492.4 |
|
$ 90.6 |
|
$ 48.9 |
|
$ 631.9 |
Gross margin % |
|
59.1 % |
|
67.5 % |
|
37.8 % |
|
57.6 % |
Selling, general and administrative expenses |
|
$ 408.3 |
|
$ 92.1 |
|
$ 69.5 |
|
$ 569.9 |
SG&A % of revenue |
|
49.0 % |
|
68.6 % |
|
53.7 % |
|
51.9 % |
Operating income (loss) |
|
$ 76.6 |
|
$ (32.7) |
|
$ (22.0) |
|
$ 21.9 |
Depreciation and amortization |
|
$ 89.6 |
|
$ 19.9 |
|
$ 11.9 |
|
$ 121.4
|
PRIMO WATER CORPORATION | |
| |
| |
| |
EXHIBIT 5 |
SUPPLEMENTARY INFORMATION - NON-GAAP - ANALYSIS OF REVENUE AND GROSS PROFIT BY REPORTING SEGMENT | |
| |
|
(in millions of U.S. dollars, except percentage amounts) | |
| |
| |
|
Unaudited | |
| |
| |
| |
|
| |
| |
| |
| |
|
| |
For the Three Months Ended July 1, 2023 |
| |
North America | |
Europe | |
Other | |
Primo |
Change in revenue | |
$ | 13.8 | | |
$ | 8.1 | | |
$ | — | | |
$ | 21.9 | |
Impact of foreign exchange (a) | |
| 0.9 | | |
| (1.9 | ) | |
| 3.4 | | |
| 2.4 | |
Change excluding foreign exchange | |
$ | 14.7 | | |
$ | 6.2 | | |
$ | 3.4 | | |
$ | 24.3 | |
Percentage change in revenue | |
| 3.2 | % | |
| 11.6 | % | |
| — | % | |
| 3.8 | % |
Percentage change in revenue excluding foreign exchange | |
| 3.4 | % | |
| 8.9 | % | |
| 5.2 | % | |
| 4.3 | % |
| |
| | | |
| | | |
| | | |
| | |
| |
| For the Six Months Ended July 1, 2023 |
| |
| North America | | |
| Europe | | |
| Other | | |
| Primo | |
Change in revenue | |
$ | 29.0 | | |
$ | 13.2 | | |
$ | 0.1 | | |
$ | 42.3 | |
Impact of foreign exchange (a) | |
| 2.0 | | |
| 2.3 | | |
| 10.2 | | |
| 14.5 | |
Change excluding foreign exchange | |
$ | 31.0 | | |
$ | 15.5 | | |
$ | 10.3 | | |
$ | 56.8 | |
Percentage change in revenue | |
| 3.5 | % | |
| 9.8 | % | |
| 0.1 | % | |
| 3.9 | % |
Percentage change in revenue excluding foreign exchange | |
| 3.7 | % | |
| 11.5 | % | |
| 8.0 | % | |
| 5.2 | % |
| |
| | | |
| | | |
| | | |
| | |
| |
| For the Three Months Ended July 1, 2023 |
| |
| North America | | |
| Europe | | |
| Other | | |
| Primo | |
Change in gross profit | |
$ | 30.3 | | |
$ | 6.6 | | |
$ | (0.9 | ) | |
$ | 36.0 | |
Impact of foreign exchange (a) | |
| 0.5 | | |
| (1.4 | ) | |
| 1.8 | | |
| 0.9 | |
Change excluding foreign exchange | |
$ | 30.8 | | |
$ | 5.2 | | |
$ | 0.9 | | |
$ | 36.9 | |
Percentage change in gross profit | |
| 11.6 | % | |
| 14.1 | % | |
| (3.6 | )% | |
| 10.8 | % |
Percentage change in gross profit excluding foreign exchange | |
| 11.8 | % | |
| 11.1 | % | |
| 3.6 | % | |
| 11.1 | % |
| |
| | | |
| | | |
| | | |
| | |
| |
| For the Six Months Ended July 1, 2023 |
| |
| North America | | |
| Europe | | |
| Other | | |
| Primo | |
Change in gross profit | |
$ | 57.1 | | |
$ | 10.3 | | |
$ | (2.7 | ) | |
$ | 64.7 | |
Impact of foreign exchange (a) | |
| 1.2 | | |
| 1.3 | | |
| 4.0 | | |
| 6.5 | |
Change excluding foreign exchange | |
$ | 58.3 | | |
$ | 11.6 | | |
$ | 1.3 | | |
$ | 71.2 | |
Percentage change in gross profit | |
| 11.6 | % | |
| 11.4 | % | |
| (5.5 | )% | |
| 10.2 | % |
Percentage change in gross profit excluding foreign exchange | |
| 11.8 | % | |
| 12.8 | % | |
| 2.7 | % | |
| 11.3 | % |
| |
| | | |
| | | |
| | | |
| | |
(a) Impact of foreign exchange is the difference between the current period revenue and gross profit translated utilizing the current period average foreign exchange rates less the current period revenue and gross profit translated utilizing the prior period average foreign exchange rates. |
PRIMO WATER CORPORATION | |
| |
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EXHIBIT 6 |
SUPPLEMENTARY INFORMATION - NON-GAAP - EARNINGS BEFORE INTEREST, TAXES, DEPRECIATION & AMORTIZATION | |
|
(EBITDA) | |
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| |
|
(in millions of U.S. dollars, except percentage amounts) |
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Unaudited | |
| |
| |
| |
|
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|
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For the Three Months Ended | |
For the Six Months Ended |
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|
July 1, 2023 |
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|
July 2, 2022 |
| |
|
July 1, 2023 |
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|
July 2, 2022 |
|
| |
| |
| |
| |
|
Net income (loss) | |
$ | 21.3 | | |
$ | (22.5 | ) | |
$ | 27.1 | | |
$ | (29.2 | ) |
Interest expense, net | |
| 19.8 | | |
| 17.0 | | |
| 38.6 | | |
| 33.9 | |
Income tax expense | |
| 11.0 | | |
| 1.4 | | |
| 14.2 | | |
| 3.8 | |
Depreciation and amortization | |
| 62.9 | | |
| 60.2 | | |
| 125.3 | | |
| 121.4 | |
EBITDA | |
$ | 115.0 | | |
$ | 56.1 | | |
$ | 205.2 | | |
$ | 129.9 | |
| |
| | | |
| | | |
| | | |
| | |
Acquisition and integration costs (a) | |
| 1.8 | | |
| 4.9 | | |
| 3.8 | | |
| 9.2 | |
Share-based compensation costs (b) | |
| 3.0 | | |
| 4.2 | | |
| 5.3 | | |
| 7.5 | |
Impairment charges (c) | |
| — | | |
| 29.1 | | |
| — | | |
| 29.1 | |
Foreign exchange and other (gains) losses, net (d) | |
| (5.0 | ) | |
| 11.5 | | |
| (10.9 | ) | |
| 15.4 | |
Loss on disposal of property, plant and equipment, net (e) | |
| 1.2 | | |
| 0.1 | | |
| 2.5 | | |
| 1.8 | |
Other adjustments, net (f) | |
| 5.6 | | |
| 2.1 | | |
| 10.6 | | |
| 3.0 | |
Adjusted EBITDA | |
$ | 121.6 | | |
$ | 108.0 | | |
$ | 216.5 | | |
$ | 195.9 | |
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| | | |
| | | |
| | | |
| | |
Revenue, net | |
$ | 593.3 | | |
$ | 571.4 | | |
$ | 1,139.8 | | |
$ | 1,097.5 | |
Adjusted EBITDA margin % | |
| 20.5 | % | |
| 18.9 | % | |
| 19.0 | % | |
| 17.8 | % |
| |
| |
For the Three Months Ended | |
For the Six Months Ended |
| |
Location in Consolidated Statements of Operations | |
July 1, 2023 | |
July 2, 2022 | |
July 1, 2023 | |
July 2, 2022 |
| |
| |
(Unaudited) | |
(Unaudited) |
(a) Acquisition and integration costs | |
Acquisition and integration expenses | |
$ | 1.8 | | |
$ | 4.9 | | |
$ | 3.8 | | |
$ | 9.2 | |
(b) Share-based compensation costs | |
Selling, general and administrative expenses | |
| 3.0 | | |
| 4.2 | | |
| 5.3 | | |
| 7.5 | |
(c) Impairment charges | |
Impairment charges | |
| — | | |
| 29.1 | | |
| — | | |
| 29.1 | |
(d) Foreign exchange and other (gains) losses, net | |
Other (income) expense, net | |
| (5.0 | ) | |
| 11.5 | | |
| (10.9 | ) | |
| 15.4 | |
(e) Loss on disposal of property, plant and equipment, net | |
Loss on disposal of property, plant and equipment, net | |
| 1.2 | | |
| 0.1 | | |
| 2.5 | | |
| 1.8 | |
(f) Other adjustments, net | |
Other (income) expense, net | |
| (0.3 | ) | |
| (0.4 | ) | |
| (0.7 | ) | |
| (1.7 | ) |
| |
Selling, general and administrative expenses | |
| 5.9 | | |
| 2.5 | | |
| 11.3 | | |
| 4.7 | |
PRIMO WATER CORPORATION | |
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EXHIBIT 7 |
SUPPLEMENTARY INFORMATION - NON-GAAP - FREE CASH FLOW AND ADJUSTED FREE CASH FLOW |
(in millions of U.S. dollars) | |
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|
Unaudited | |
| |
|
| |
| |
|
| |
For the Three Months Ended |
| |
July 1, 2023 | |
July 2, 2022 |
| |
| |
|
Net cash provided by operating activities | |
$ | 76.8 | | |
$ | 66.7 | |
Less: Additions to property, plant, and equipment | |
| (36.0 | ) | |
| (46.6 | ) |
Less: Additions to intangible assets | |
| (2.7 | ) | |
| (2.4 | ) |
Free Cash Flow | |
$ | 38.1 | | |
$ | 17.7 | |
| |
| | | |
| | |
Acquisition and integration cash costs | |
| 1.4 | | |
| 3.1 | |
Cash costs related to additions to property, plant and equipment for integration of acquired entities | |
| 0.1 | | |
| — | |
Cash taxes paid for property sales | |
| 0.8 | | |
| — | |
Tariffs refunds related to property, plant, and equipment | |
| 1.0 | | |
| — | |
Adjusted Free Cash Flow | |
$ | 41.4 | | |
$ | 20.8 | |
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| | |
| |
| For the Six Months Ended |
| |
| July 1, 2023 | | |
| July 2, 2022 | |
| |
| | | |
| | |
Net cash provided by operating activities | |
$ | 111.1 | | |
$ | 90.3 | |
Less: Additions to property, plant, and equipment | |
| (89.7 | ) | |
| (85.2 | ) |
Less: Additions to intangible assets | |
| (5.4 | ) | |
| (4.9 | ) |
Free Cash Flow | |
$ | 16.0 | | |
$ | 0.2 | |
| |
| | | |
| | |
Acquisition and integration cash costs | |
| 4.0 | | |
| 8.1 | |
Cash costs related to additions to property, plant and equipment for integration of acquired entities | |
| 0.2 | | |
| — | |
Cash taxes paid for property sales | |
| 0.8 | | |
| — | |
Tariffs refunds related to property, plant, and equipment | |
| 1.4 | | |
| — | |
Adjusted Free Cash Flow | |
$ | 22.4 | | |
$ | 8.3 | |
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| | | |
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PRIMO WATER CORPORATION | |
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EXHIBIT 8 |
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 |
| |
July 1, 2023 | |
July 2, 2022 | |
July 1, 2023 | |
July 2, 2022 |
Net income (loss) (as reported) | |
$ | 21.3 | | |
$ | (22.5 | ) | |
$ | 27.1 | | |
$ | (29.2 | ) |
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| | | |
| | | |
| | | |
| | |
Adjustments: | |
| | | |
| | | |
| | | |
| | |
Amortization expense of customer lists | |
| 11.2 | | |
| 12.1 | | |
| 22.5 | | |
| 25.0 | |
Acquisition and integration costs | |
| 1.8 | | |
| 4.9 | | |
| 3.8 | | |
| 9.2 | |
Share-based compensation costs | |
| 3.0 | | |
| 4.2 | | |
| 5.3 | | |
| 7.5 | |
Impairment charges | |
| — | | |
| 29.1 | | |
| — | | |
| 29.1 | |
Foreign exchange and other (gains) losses, net | |
| (5.0 | ) | |
| 11.5 | | |
| (10.9 | ) | |
| 15.4 | |
Other adjustments, net | |
| 5.6 | | |
| 2.1 | | |
| 10.6 | | |
| 3.0 | |
Tax impact of adjustments (a) | |
| 0.9 | | |
| (8.1 | ) | |
| (4.7 | ) | |
| (12.8 | ) |
Adjusted net income | |
$ | 38.8 | | |
$ | 33.3 | | |
$ | 53.7 | | |
$ | 47.2 | |
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| | | |
| | | |
| | | |
| | |
Earnings Per Share (as reported) | |
| | | |
| | | |
| | | |
| | |
Net income (loss) | |
$ | 21.3 | | |
$ | (22.5 | ) | |
$ | 27.1 | | |
$ | (29.2 | ) |
| |
| | | |
| | | |
| | | |
| | |
Basic EPS | |
$ | 0.13 | | |
$ | (0.14 | ) | |
$ | 0.17 | | |
$ | (0.18 | ) |
Diluted EPS | |
$ | 0.13 | | |
$ | (0.14 | ) | |
$ | 0.17 | | |
$ | (0.18 | ) |
| |
| | | |
| | | |
| | | |
| | |
Weighted average common shares outstanding (in thousands) | |
| | | |
| | | |
| | | |
| | |
Basic | |
| 159,196 | | |
| 161,149 | | |
| 159,465 | | |
| 161,038 | |
Diluted | |
| 159,900 | | |
| 161,149 | | |
| 160,332 | | |
| 161,038 | |
| |
| | | |
| | | |
| | | |
| | |
Adjusted Earnings Per Share (Non-GAAP) | |
| | | |
| | | |
| | | |
| | |
Adjusted net income (Non-GAAP) | |
$ | 38.8 | | |
$ | 33.3 | | |
$ | 53.7 | | |
$ | 47.2 | |
Adjusted diluted EPS (Non-GAAP) | |
$ | 0.24 | | |
$ | 0.21 | | |
$ | 0.33 | | |
$ | 0.29 | |
Diluted weighted average common shares outstanding (in thousands) (Non-GAAP) (b) | |
| 159,900 | | |
| 161,894 | | |
| 160,332 | | |
| 161,934 | |
| |
| | | |
| | | |
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(a) 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. |
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(b) Includes the impact of dilutive securities of 745 and 896 for the three and six months ended July 2, 2022. These dilutive securities were excluded from GAAP diluted weighted average common shares outstanding due to net loss reported in the period. |
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