Primo Water Corporation (“Primo”) (Nasdaq: PRMW) today reported
financial results for the third quarter ended September 30, 2018.
Third Quarter 2018 Business Highlights:
- Exchange net sales increased 5.3%
to $21.5 million
- Dispenser net sales increased 13.8%
to $11.9 million
- Continued acceleration of U.S.
Exchange same-store unit growth to 10.4%
- Strong sell-thru of dispenser
units; an increase of 10.6% to 187,000
(All comparisons above are with respect to the
third quarter ended September 30, 2017)
“We continue to execute our long-term strategic
plan, particularly our marketing efforts to grow household
penetration, which resulted in double digit growth in sell-thru of
dispenser units and the acceleration of same-store unit growth for
our exchange business,” commented Matt Sheehan, Primo Water’s
President and Chief Executive Officer. “We did encounter a
key insight in our refill business during the quarter that held our
results back, but we believe will help drive incremental,
sustainable and long-term growth. We remain confident in our
ability to build awareness, access and consumption of Primo’s water
solutions, as well as generate value for our shareholders.”
Third Quarter Results
Net sales decreased to $81.8 million from
$82.2 million for the prior year quarter, driven by a decrease
in Refill sales and volume, which was partially offset by growth in
Dispensers and Exchange. Refill net sales decreased 5.8% to $48.3
million from $51.3 million for the prior year quarter,
primarily the result of lower volumes partially offset by an
increase in price when compared to the third quarter of 2017.
Exchange net sales increased 5.3% to $21.5 million from $20.4
million for the prior year quarter, driven by an acceleration in
U.S. same-store unit growth to 10.4%. Dispensers segment net sales
increased 13.8% to $11.9 million from $10.5 million for the
prior year quarter, primarily due to consumer demand, or sell-thru,
which increased 10.6% to approximately 187,000 units for the third
quarter of 2018.
Gross margin percentage was 28.7% compared to
30.3% for the prior year quarter, primarily the result of a change
in sales mix, as dispensers made up a larger portion of overall
sales during the quarter. Selling, general and administrative
expenses (“SG&A”) were $7.4 million, or 9.0% as a percentage of
net sales, compared to $7.9 million, or 9.7% as a percentage of net
sales, for the prior year quarter. The decrease in SG&A was
primarily due to a decrease in non-cash, stock-based compensation
expense, partially offset by an increase in marketing and
advertising spending, which we believe will drive long-term
growth.
Interest expense decreased to $2.5 million for
the three months ended September 30, 2018 from $5.2 million for the
prior year quarter. The decrease was primarily due to the full
quarter impact of the refinancing of our outstanding indebtedness
in June 2018, which resulted in lower indebtedness and
significantly lower interest rates under the current credit
facility compared to the prior credit arrangements.
During the third quarter, we announced the plan
to move forward with one brand in Refill and discontinue the
Glacier brand. This will bring the Primo brand to all our Refill
locations in the next two years. The Glacier brand was obtained
through Primo’s December 2016 acquisition of Glacier Water. As a
result of the decision to discontinue the use of this brand, we
recorded non-cash impairment charges totaling $63.1 million during
the three months ended September 30, 2018 to reduce the carrying
value of the assets to the estimated fair value. During the
quarter, additional non-cash impairment charges totaling $4.6
million were recorded related to the reduction of the carrying
value of our ice assets held-for-sale to their estimated fair
value.
U.S. GAAP net loss was $58.2 million, or $1.45
per diluted share, compared to a net income of $4.9 million, or
$0.14 per diluted share for the prior year quarter. Adjusted net
income, a non-U.S. GAAP measure, was $7.5 million, or $0.18 per
diluted share, compared to adjusted net income of $6.4 million, or
$0.19 per diluted share, for the prior year quarter.
Adjusted EBITDA, a non-U.S. GAAP measure, was
$16.2 million compared to $18.0 million in the prior year quarter,
driven primarily by the decrease in sales and volume in the Refill
business, the implementation of an everyday instant redeemable
coupon promotion in Exchange, as well as a reduction in Dispenser
operating margins, primarily related to an unfavorable change in
product and customer sales mix, and, to a lesser extent, the impact
of tariffs imposed in the second quarter of 2018 on dispensers
imported from China.
2018 Outlook
We now expect net sales for the full year 2018
to be in the range of $304.0 million to $308.0 million, and
adjusted EBITDA for the full year to be in the range of $54.0 to
$58.0 million, with the change in full-year adjusted EBITDA due to
our results for the third quarter, our short-term investments in
Refill to improve servicing and address machine downtime, and our
acceleration of marketing and promotional investments in Dispensers
and Exchange.
We do not provide guidance for the most directly
comparable GAAP measure to adjusted EBITDA, net income, and
similarly cannot provide a reconciliation between our forecasted
adjusted EBITDA and net income metrics without unreasonable effort
due to the unavailability of reliable estimates, which include
interest expense and non-recurring and acquisition-related costs.
These items, among others, are not within our control and may vary
greatly between periods and could significantly impact future
financial results.
Conference Call and Webcast
Primo will host a conference call with Matt
Sheehan, President and Chief Executive Officer, and David Mills,
Chief Financial Officer, to discuss its financial results at 4:30
p.m. ET today, November 6, 2018. The call will be broadcast live
over the Internet hosted at the Investor Relations section of Primo
Water's website at www.primowater.com, and will be archived online
through November 20, 2018. In addition, listeners may dial (866)
712-2329 in North America, and international listeners may dial
(253) 237-1244.
About Primo Water Corporation
Primo Water Corporation (Nasdaq: PRMW) is an
environmentally and ethically responsible company with a purpose of
inspiring healthier lives through better water. Primo is North
America's leading single source provider of water dispensers,
multi-gallon purified bottled water, and self-service refill
drinking water. Primo’s Dispensers, Exchange and Refill
products are available in over 45,000 retail locations and online
throughout the United States and Canada. For more information and
to learn more about Primo Water, please visit our website at
www.primowater.com.
Forward-Looking Statements
Certain statements contained herein are not
based on historical fact and are "forward-looking statements"
within the meaning of the applicable securities laws and
regulations. These statements include the Company’s financial
guidance; our belief that the insights discovered in our Refill
business in the third quarter will help drive incremental,
sustainable and long-term growth; statements regarding our plan to
move forward with one brand in Refill, discontinue the Glacier
brand, and to bring the Primo brand to all of our Refill locations
in the next two years; and our belief that an increase in marketing
and advertising spending will drive long-term growth. These
statements can otherwise be identified by the use of words such as
"anticipate," "believe," "could," "estimate," "expect," "feel,"
"forecast," "intend," "may," "plan," "potential," “predict,”
"project," “seek,” "should," "would,” “will,” and similar
expressions intended to identify forward-looking statements,
although not all forward-looking statements contain these
identifying words. Owing to the uncertainties inherent in
forward-looking statements, actual results could differ materially
from those stated herein. Factors that could cause actual results
to differ materially from those in the forward-looking statements
include, but are not limited to, the loss of major retail customers
of the Company or the reduction in volume or change in timing of
purchases by major retail customers; the consolidation of retail
customers and disruption of the retail business model; lower than
anticipated consumer and retailer acceptance of and demand for the
Company's products and services; difficulties realizing the
anticipated benefits and synergies from the Glacier Water
acquisition and managing our expanded operations following the
acquisition; the highly competitive environment in which we operate
and the entry of a competitor with greater resources into the
marketplace; competition and other business conditions in the water
and water dispenser industries in general; adverse changes in the
Company's relationships with its independent bottlers, distributors
and suppliers in its Exchange business; the loss of key Company
personnel; risks associated with the Company’s potential expansion
into international markets, particularly with China, that could be
harmful to our business and operations; recently imposed tariffs
that cover certain of our products, the potential for increases in
existing tariffs or new tariffs, which may materially adversely
affect our business, and other potential changes in international
trade relations implemented by the U.S. presidential
administration; the Company’s experiencing product liability,
product recall or higher than anticipated rates of sales returns
associated with product quality or safety issues; dependence on key
management information systems; the Company's inability to
efficiently expand operations and capacity to meet growth; the
Company's inability to develop, introduce and produce new product
offerings within the anticipated timeframe or at all; general
economic conditions; the possible adverse effects that decreased
discretionary consumer spending may have on the Company’s business;
changes in the regulatory framework governing the Company's
business; significant liabilities or costs associated with
litigation or other legal proceedings; the possibility that our
ability to use our net operating loss carryforwards in the United
States may be limited; the restrictions imposed upon our business
as a result of the restrictive covenants contained in our credit
agreements; the Company’s inability to comply with its covenants in
its credit facility; the possibility that we may fail to generate
sufficient cash flow to service our debt obligations; the negative
effects that global capital and credit market issues may have on
our liquidity; the costs of borrowing on our operations as well as
other risks described more fully in the Company's filings with the
Securities and Exchange Commission, including its Annual Report on
Form 10-K filed on March 7, 2018 and its subsequent filings under
the Securities Exchange Act of 1934. Forward-looking statements
reflect management's analysis as of the date of this press release.
The Company does not undertake to revise these statements to
reflect subsequent developments, other than in its regular,
quarterly earnings releases or as otherwise required by applicable
securities laws.
Use of Non-U.S. GAAP Financial Measures
To supplement its financial statements, the
Company provides investors with information related to adjusted
EBITDA and adjusted net income, which are not financial measures
calculated in accordance with generally accepted accounting
principles in the United States (“U.S. GAAP”). Adjusted EBITDA is
calculated as net (loss) income before depreciation and
amortization; interest expense, net; income tax (benefit)
provision; non-cash change in fair value of warrant liability;
non-cash, stock-based compensation expense; non-recurring and
acquisition-related costs; and impairment charges and other.
Adjusted net income is defined as net (loss) income less income tax
(benefit) provision; change in fair value of warrant liability;
non-cash, stock-based compensation expense; non-recurring and
acquisition-related costs; impairment charges and other; and debt
refinancing costs. The Company believes these non-U.S. GAAP
financial measures provide useful information to management,
investors and financial analysts regarding certain financial and
business trends relating to the Company’s financial condition and
results of operations. Management uses these non-U.S. GAAP
financial measures to compare the Company's performance to that of
prior periods for trend analyses and planning purposes. These
non-U.S. GAAP financial measures are also presented to the
Company’s Board of Directors and adjusted EBITDA is used in its
credit agreements.
Non-U.S. GAAP measures should not be considered
a substitute for, or superior to, financial measures calculated in
accordance with U.S. GAAP. These non-U.S. GAAP measures exclude
significant expenses that are required by U.S. GAAP to be recorded
in the Company's financial statements and are subject to inherent
limitations.
FINANCIAL TABLES TO FOLLOW
Primo Water Corporation |
Condensed Consolidated Statements of Operations |
(Unaudited; in thousands, except per share
amounts) |
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
Nine Months Ended |
|
|
September 30, |
|
September 30, |
|
|
2018 |
|
2017 |
|
2018 |
|
2017 |
|
|
|
|
|
|
|
|
|
Net sales |
|
$ |
81,770 |
|
|
$ |
82,207 |
|
|
$ |
231,231 |
|
|
$ |
217,762 |
|
Operating costs and
expenses: |
|
|
|
|
|
|
|
|
Cost of
sales |
|
|
58,312 |
|
|
|
57,273 |
|
|
|
164,462 |
|
|
|
154,166 |
|
Selling,
general and administrative expenses |
|
|
7,369 |
|
|
|
7,939 |
|
|
|
26,169 |
|
|
|
26,703 |
|
Non-recurring and acquisition-related costs |
|
|
139 |
|
|
|
158 |
|
|
|
626 |
|
|
|
7,583 |
|
Depreciation and amortization |
|
|
6,194 |
|
|
|
6,358 |
|
|
|
18,365 |
|
|
|
19,571 |
|
Impairment charges and other |
|
|
67,940 |
|
|
|
(72 |
) |
|
|
68,184 |
|
|
|
(90 |
) |
Total
operating costs and expenses |
|
|
139,954 |
|
|
|
71,656 |
|
|
|
277,806 |
|
|
|
207,933 |
|
(Loss)
income from operations |
|
|
(58,184 |
) |
|
|
10,551 |
|
|
|
(46,575 |
) |
|
|
9,829 |
|
Interest
expense, net |
|
|
2,465 |
|
|
|
5,153 |
|
|
|
18,909 |
|
|
|
15,177 |
|
Change
in fair value of warrant liability |
|
|
– |
|
|
|
– |
|
|
|
– |
|
|
|
3,220 |
|
(Loss)
income before income taxes |
|
|
(60,649 |
) |
|
|
5,398 |
|
|
|
(65,484 |
) |
|
|
(8,568 |
) |
Income
tax (benefit) provision |
|
|
(2,411 |
) |
|
|
451 |
|
|
|
(8,907 |
) |
|
|
823 |
|
Net
(loss) income |
|
$ |
(58,238 |
) |
|
$ |
4,947 |
|
|
$ |
(56,577 |
) |
|
$ |
(9,391 |
) |
|
|
|
|
|
|
|
|
|
(Loss) earnings per
common share: |
|
|
|
|
|
|
|
|
Basic |
|
$ |
(1.45 |
) |
|
$ |
0.15 |
|
|
$ |
(1.55 |
) |
|
$ |
(0.28 |
) |
Diluted |
|
$ |
(1.45 |
) |
|
$ |
0.14 |
|
|
$ |
(1.55 |
) |
|
$ |
(0.28 |
) |
|
|
|
|
|
|
|
|
|
Weighted average
shares used in computing |
|
|
|
|
|
|
|
|
(loss)
earnings per share: |
|
|
|
|
|
|
|
|
Basic |
|
|
40,072 |
|
|
|
33,525 |
|
|
|
36,410 |
|
|
|
33,086 |
|
Diluted |
|
|
40,072 |
|
|
|
34,653 |
|
|
|
36,410 |
|
|
|
33,086 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Primo Water Corporation |
Segment Information |
(Unaudited; in thousands) |
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
Nine Months Ended |
|
|
September 30, |
|
September 30, |
|
|
2018 |
|
2017 |
|
2018 |
|
2017 |
Segment net sales: |
|
|
|
|
|
|
|
|
Refill |
|
$ |
48,330 |
|
|
$ |
51,287 |
|
|
$ |
134,542 |
|
|
$ |
131,814 |
|
Exchange |
|
|
21,513 |
|
|
|
20,435 |
|
|
|
59,777 |
|
|
|
55,301 |
|
Dispensers |
|
|
11,927 |
|
|
|
10,485 |
|
|
|
36,912 |
|
|
|
30,647 |
|
Total net sales |
|
$ |
81,770 |
|
|
$ |
82,207 |
|
|
$ |
231,231 |
|
|
$ |
217,762 |
|
|
|
|
|
|
|
|
|
|
Segment (loss) income
from operations: |
|
|
|
|
|
|
|
|
Refill |
|
$ |
14,565 |
|
|
$ |
15,413 |
|
|
$ |
40,043 |
|
|
$ |
35,619 |
|
Exchange |
|
|
6,274 |
|
|
|
6,039 |
|
|
|
17,567 |
|
|
|
16,572 |
|
Dispensers |
|
|
323 |
|
|
|
970 |
|
|
|
2,309 |
|
|
|
2,657 |
|
Corporate |
|
|
(5,073 |
) |
|
|
(5,427 |
) |
|
|
(19,319 |
) |
|
|
(17,955 |
) |
Non-recurring and acquisition-related costs |
|
|
(139 |
) |
|
|
(158 |
) |
|
|
(626 |
) |
|
|
(7,583 |
) |
Depreciation and amortization |
|
|
(6,194 |
) |
|
|
(6,358 |
) |
|
|
(18,365 |
) |
|
|
(19,571 |
) |
Impairment charges and other |
|
|
(67,940 |
) |
|
|
72 |
|
|
|
(68,184 |
) |
|
|
90 |
|
|
|
$ |
(58,184 |
) |
|
$ |
10,551 |
|
|
$ |
(46,575 |
) |
|
$ |
9,829 |
|
|
|
|
|
|
|
|
|
|
Primo Water Corporation |
Condensed Consolidated Balance Sheets |
(In thousands, except par value data) |
|
|
|
|
|
|
|
September 30, |
|
December 31, |
|
|
2018 |
|
2017 |
|
|
(Unaudited) |
|
|
ASSETS |
|
|
|
|
Current assets: |
|
|
|
|
Cash and cash
equivalents |
|
$ |
5,630 |
|
|
$ |
5,586 |
|
Accounts
receivable, net |
|
|
23,503 |
|
|
|
18,015 |
|
Inventories |
|
|
9,602 |
|
|
|
6,178 |
|
Prepaid
expenses and other current assets |
|
|
4,477 |
|
|
|
3,409 |
|
Total current
assets |
|
|
43,212 |
|
|
|
33,188 |
|
|
|
|
|
|
Bottles, net |
|
|
4,611 |
|
|
|
4,877 |
|
Property
and equipment, net |
|
|
92,607 |
|
|
|
100,692 |
|
Intangible assets, net |
|
|
80,028 |
|
|
|
144,555 |
|
Goodwill |
|
|
92,069 |
|
|
|
92,934 |
|
Investment in Glacier securities ($0 and $3,881 available-for-sale,
at fair value |
|
|
|
|
at September 30, 2018 and December 31, 2017, respectively) |
|
|
– |
|
|
|
6,510 |
|
Other assets |
|
|
667 |
|
|
|
997 |
|
Assets
held-for-sale at fair value |
|
|
5,288 |
|
|
|
– |
|
Total assets |
|
$ |
318,482 |
|
|
$ |
383,753 |
|
|
|
|
|
|
LIABILITIES AND
STOCKHOLDERS' EQUITY |
|
|
|
|
Current
liabilities: |
|
|
|
|
Accounts
payable |
|
$ |
27,290 |
|
|
$ |
18,698 |
|
Accrued
expenses and other current liabilities |
|
|
7,663 |
|
|
|
9,878 |
|
Current
portion of long-term debt and capital leases |
|
|
11,088 |
|
|
|
3,473 |
|
Total
current liabilities |
|
|
46,041 |
|
|
|
32,049 |
|
|
|
|
|
|
Long-term debt and capital leases, net of current portion and debt
issuance costs |
|
|
178,196 |
|
|
|
269,793 |
|
Deferred
tax liability, net |
|
|
– |
|
|
|
8,455 |
|
Other
long-term liabilities |
|
|
806 |
|
|
|
1,985 |
|
Liabilities held-for-sale at fair value |
|
|
1,438 |
|
|
|
– |
|
Total
liabilities |
|
|
226,481 |
|
|
|
312,282 |
|
|
|
|
|
|
Commitments and contingencies |
|
|
|
|
|
|
|
|
|
Stockholders’
equity: |
|
|
|
|
Preferred
stock, $0.001 par value - 10,000 shares authorized, |
|
|
|
|
none
issued and outstanding |
|
|
– |
|
|
|
– |
|
Common
stock, $0.001 par value - 70,000 shares authorized, |
|
|
|
|
38,527
and 30,084 shares issued and outstanding |
|
|
|
|
at
September 30, 2018 and December 31, 2017, respectively |
|
|
39 |
|
|
|
30 |
|
Additional paid-in capital |
|
|
423,402 |
|
|
|
345,963 |
|
Accumulated deficit |
|
|
(330,329 |
) |
|
|
(273,752 |
) |
Accumulated other comprehensive loss |
|
|
(1,111 |
) |
|
|
(770 |
) |
Total stockholders’
equity |
|
|
92,001 |
|
|
|
71,471 |
|
Total liabilities and
stockholders’ equity |
|
$ |
318,482 |
|
|
$ |
383,753 |
|
|
|
|
|
|
Primo Water Corporation |
Condensed Consolidated Statements of Cash Flows |
(Unaudited; in thousands) |
|
|
|
|
|
Nine Months Ended September 30, |
|
2018 |
|
2017 |
Cash
flows from operating activities: |
|
|
|
Net loss |
$ |
(56,577 |
) |
|
$ |
(9,391 |
) |
Adjustments to reconcile net loss to net cash |
|
|
|
provided
by operating activities: |
|
|
|
Depreciation and amortization |
|
18,365 |
|
|
|
19,571 |
|
Impairment charges and other |
|
68,184 |
|
|
|
(90 |
) |
Stock-based compensation expense |
|
2,710 |
|
|
|
4,611 |
|
Non-cash
interest expense (income) |
|
2,547 |
|
|
|
(51 |
) |
Change in
fair value of warrant liability |
|
– |
|
|
|
3,220 |
|
Bad debt
expense |
|
170 |
|
|
|
180 |
|
Deferred
income tax (benefit) expense |
|
(8,907 |
) |
|
|
823 |
|
Realized
foreign currency exchange loss and other, net |
|
338 |
|
|
|
(11 |
) |
Changes
in operating assets and liabilities: |
|
|
|
Accounts
receivable |
|
(5,724 |
) |
|
|
(8,480 |
) |
Inventories |
|
(3,431 |
) |
|
|
(351 |
) |
Prepaid
expenses and other current assets |
|
(618 |
) |
|
|
(956 |
) |
Accounts
payable |
|
6,523 |
|
|
|
7,611 |
|
Accrued
expenses and other current liabilities |
|
(796 |
) |
|
|
(6,036 |
) |
Net cash
provided by operating activities |
|
22,784 |
|
|
|
10,650 |
|
|
|
|
|
Cash flows from
investing activities: |
|
|
|
Purchases
of property and equipment |
|
(14,200 |
) |
|
|
(13,434 |
) |
Purchases
of bottles, net of disposals |
|
(1,596 |
) |
|
|
(2,120 |
) |
Proceeds
from the sale of property and equipment |
|
227 |
|
|
|
167 |
|
Proceeds
from redemption of investment in Glacier securities |
|
6,277 |
|
|
|
– |
|
Additions
to intangible assets and other |
|
(975 |
) |
|
|
(113 |
) |
Net cash used in
investing activities |
|
(10,267 |
) |
|
|
(15,500 |
) |
|
|
|
|
Cash
flows from financing activities: |
|
|
|
Borrowings under Revolving Credit Facility |
|
15,000 |
|
|
|
– |
|
Payments
under Revolving Credit Facility |
|
(15,000 |
) |
|
|
– |
|
Borrowings under prior Revolving Credit Facility |
|
14,000 |
|
|
|
2,500 |
|
Payments
under prior Revolving Credit Facility |
|
(14,000 |
) |
|
|
(2,500 |
) |
Borrowings under Term loan |
|
190,000 |
|
|
|
– |
|
Payments
under Term loan |
|
(2,375 |
) |
|
|
– |
|
Payments
under prior Term loan |
|
(184,140 |
) |
|
|
(1,395 |
) |
Payments
upon redemption of Junior Subordinated Debentures |
|
(87,629 |
) |
|
|
– |
|
Proceeds
from common stock issuance, net of costs |
|
70,791 |
|
|
|
– |
|
Proceeds
from warrant exercises, net |
|
12,150 |
|
|
|
– |
|
Capital
lease payments |
|
(1,190 |
) |
|
|
(1,712 |
) |
Bank
overdraft |
|
1,023 |
|
|
|
– |
|
Stock
option and employee stock purchase activity and other, net |
|
(9,424 |
) |
|
|
(3,088 |
) |
Debt
issuance costs and other |
|
(1,671 |
) |
|
|
(261 |
) |
Net cash used in
financing activities |
|
(12,465 |
) |
|
|
(6,456 |
) |
Effect of exchange rate
changes on cash and cash equivalents |
|
(8 |
) |
|
|
(30 |
) |
Net increase (decrease)
in cash and cash equivalents |
|
44 |
|
|
|
(11,336 |
) |
Cash and cash
equivalents, beginning of year |
|
5,586 |
|
|
|
15,586 |
|
Cash and cash
equivalents, end of period |
$ |
5,630 |
|
|
$ |
4,250 |
|
|
|
|
|
Primo Water Corporation |
Non-GAAP EBITDA and Adjusted EBITDA
Reconciliation |
(Unaudited; in thousands) |
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
Nine Months Ended |
|
|
September 30, |
|
September 30, |
|
|
2018 |
|
2017 |
|
2018 |
|
2017 |
Net (loss) income |
|
$ |
(58,238 |
) |
|
$ |
4,947 |
|
$ |
(56,577 |
) |
|
$ |
(9,391 |
) |
Depreciation and amortization |
|
|
6,194 |
|
|
|
6,358 |
|
|
18,365 |
|
|
|
19,571 |
|
Interest
expense, net |
|
|
2,465 |
|
|
|
5,153 |
|
|
18,909 |
|
|
|
15,177 |
|
Income
tax (benefit) provision |
|
|
(2,411 |
) |
|
|
451 |
|
|
(8,907 |
) |
|
|
823 |
|
EBITDA |
|
|
(51,990 |
) |
|
|
16,909 |
|
|
(28,210 |
) |
|
|
26,180 |
|
Change in
fair value of warrant liability |
|
|
– |
|
|
|
– |
|
|
– |
|
|
|
3,220 |
|
Non-cash,
stock-based compensation expense |
|
|
31 |
|
|
|
933 |
|
|
2,710 |
|
|
|
4,611 |
|
Non-recurring and acquisition-related costs (1) |
|
|
139 |
|
|
|
158 |
|
|
626 |
|
|
|
7,583 |
|
Impairment charges and other |
|
|
68,044 |
|
|
|
25 |
|
|
68,444 |
|
|
|
174 |
|
Adjusted
EBITDA |
|
$ |
16,224 |
|
|
$ |
18,025 |
|
$ |
43,570 |
|
|
$ |
41,768 |
|
|
|
|
|
|
|
|
|
|
Primo Water Corporation |
Non-GAAP Adjusted Net Income |
(Unaudited; in thousands, except per share
amounts) |
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
Nine Months Ended |
|
|
September 30, |
|
September 30, |
|
|
2018 |
|
2017 |
|
2018 |
|
2017 |
|
|
|
|
|
|
|
|
|
Net (loss) income |
|
$ |
(58,238 |
) |
|
$ |
4,947 |
|
|
$ |
(56,577 |
) |
|
$ |
(9,391 |
) |
Income
tax (benefit) provision |
|
|
(2,411 |
) |
|
|
451 |
|
|
|
(8,907 |
) |
|
|
823 |
|
(Loss)
income before income taxes |
|
|
(60,649 |
) |
|
|
5,398 |
|
|
|
(65,484 |
) |
|
|
(8,568 |
) |
Change in
fair value of warrant liability |
|
|
– |
|
|
|
– |
|
|
|
– |
|
|
|
3,220 |
|
Non-cash,
stock-based compensation expense |
|
|
31 |
|
|
|
933 |
|
|
|
2,710 |
|
|
|
4,611 |
|
Non-recurring and acquisition-related costs (1) |
|
|
139 |
|
|
|
158 |
|
|
|
626 |
|
|
|
7,583 |
|
Impairment charges and other |
|
|
67,940 |
|
|
|
(72 |
) |
|
|
68,184 |
|
|
|
(90 |
) |
Debt
refinancing costs |
|
|
– |
|
|
|
– |
|
|
|
6,864 |
|
|
|
– |
|
Adjusted net
income |
|
$ |
7,461 |
|
|
$ |
6,417 |
|
|
$ |
12,900 |
|
|
$ |
6,756 |
|
|
|
|
|
|
|
|
|
|
Adjusted earnings per
share: |
|
|
|
|
|
|
|
|
Basic |
|
$ |
0.19 |
|
|
$ |
0.19 |
|
|
$ |
0.35 |
|
|
$ |
0.20 |
|
Diluted |
|
$ |
0.18 |
|
|
$ |
0.19 |
|
|
$ |
0.34 |
|
|
$ |
0.20 |
|
|
|
|
|
|
|
|
|
|
Weighted
average shares used in computing adjusted earnings per share: |
|
|
|
|
|
|
|
Basic |
|
|
40,072 |
|
|
|
33,525 |
|
|
|
36,410 |
|
|
|
33,086 |
|
Diluted |
|
|
41,084 |
|
|
|
34,653 |
|
|
|
37,605 |
|
|
|
34,420 |
|
|
|
|
|
|
|
|
|
|
(1) In the “Non-recurring and acquisition-related costs” line
item, we exclude certain expense items resulting from acquisitions
and other charges which we believe are non-recurring, infrequent,
and/or unusual in nature. These charges generally include (i)
expenses related to our acquisition of Glacier Water Services, Inc.
in December 2016; (ii) non-recurring expenses associated with our
strategic alliance agreement with DS Services of America, Inc. and
related business transformation; (iii) legal settlements of a
non-recurring nature and (iv) other non-recurring income and
expenses associated with severance and restructuring costs.
Contact:Primo Water CorporationDavid Mills,
Chief Financial Officer(336) 331-4000
ICR Inc.Katie Turner(646) 277-1228
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