- Exceeds Revenue and delivers high-end of Adjusted EBITDA
guidance
- Increases Revenue 4% to $547
million (6% increase excluding impact of foreign
exchange)
- Declares quarterly dividend of $0.08 per common share, a 14% increase over last
year's rate
- Reaffirms full-year 2023 Revenue and Adjusted EBITDA
guidance
TAMPA,
Fla., May 4, 2023 /CNW/ - Primo Water
Corporation (NYSE: PRMW) (TSX: PRMW) (the "Company" or "Primo"),
a leading provider of sustainable drinking water solutions in
North America and Europe, today announced its results for the
first quarter ended April 1,
2023.
(Unless stated otherwise, all first quarter 2023 comparisons
are relative to the first quarter of 2022; all information is in
U.S. dollars. Non-GAAP reconciliations presented on the exhibits to
this press release)
FIRST QUARTER HIGHLIGHTS
- Revenue increased 4% to $547
million compared to $526
million (increased 6% excluding the impact of foreign
exchange), driven by revenue growth of 11% in Water Direct / Water
Exchange and 21% 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,
as well as foreign exchange headwinds.
- Reported net income and net income per diluted share were
$6 million and $0.04, respectively, compared to reported net
loss and net loss per diluted share of $7
million and $0.04,
respectively. Adjusted net income and adjusted net income per
diluted share were $15 million and
$0.09, respectively, compared to
$14 million and $0.09, respectively.
- Adjusted EBITDA increased 8% to $95
million and Adjusted EBITDA margin increased 70 bps to
17.4%.
- The Company reaffirms its full year 2023 revenue target of
between $2.30 billion and
$2.35 billion and reaffirms its full
year 2023 Adjusted EBITDA target of between $450 million and $470
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)
|
April 1,
2023
|
|
April 2,
2022
|
|
Y/Y
Change
|
Revenue, net
(1)
|
$
546.5
|
|
$ 526.1
|
|
4 %
|
Net income
(loss)
|
$
5.8
|
|
$
(6.7)
|
|
$ 12.5
|
Net income (loss) per
diluted share
|
$
0.04
|
|
$ (0.04)
|
|
$ 0.08
|
Adjusted net
income
|
$
14.9
|
|
$ 13.9
|
|
$
1.0
|
Adjusted net income per
diluted share
|
$
0.09
|
|
$ 0.09
|
|
$
—
|
Adjusted
EBITDA
|
$
94.9
|
|
$ 87.9
|
|
8 %
|
Adjusted EBITDA margin
%
|
17.4 %
|
|
16.7 %
|
|
70 bps
|
1Reported
revenue in Q1 2022 includes $26.6 million of revenues associated
with our North American single use bottled water retail business
and $2.8 million of revenues associated with our Russia business;
there is no revenue attributable to these businesses in Q1 2023, as
we exited these businesses before the first quarter of
2023.
|
|
"During the first quarter we once again delivered strong revenue
and earnings growth, driven by both pricing and increased customer
demand across our Water Your Way platform. Our customer base and
retention rates remained high as we continued to improve the
customer experience through higher service levels and investments
in the digital experience, customer satisfaction and operating
efficiencies. I am proud of the efforts of our team and their focus
on increasing revenue and profit while simultaneously improving the
customer experience," said Tom
Harrington, Chief Executive Officer.
"Our first quarter performance provides a solid foundation for
achieving our 2023 outlook of between $2.30
billion and $2.35 billion
dollars of revenue and Adjusted EBITDA of between
$450 million and $470 million dollars. We remain confident in our
2024 outlook for high single digit organic revenue growth and
Adjusted EBITDA approaching $530
million for 2024," said Mr. Harrington.
OUTLOOK
Primo is targeting the following results from continuing
operations for the second quarter and full year 2023:
|
Q2 2023
Range
|
FY 2023
Range
|
($ in
millions)
|
Low
|
High
|
Low
|
High
|
Revenue
|
$575
|
$595
|
$2,300
|
$2,350
|
Adjusted
EBITDA
|
$113
|
$123
|
$450
|
$470
|
Cash Taxes
|
|
|
$20
|
$25
|
Interest
|
|
|
$70
|
$75
|
Cap-Ex
|
|
|
~ $200
|
FIRST QUARTER 2023 RESULTS CONFERENCE CALL
Primo will host a conference call, to be simultaneously webcast,
on Thursday, May 4, 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'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.
FIRST QUARTER GLOBAL PERFORMANCE
- Revenue increased 4% to $547
million compared to $526
million (increased by 6% excluding the impact of foreign
exchange). The increase was driven by revenue growth of 11% in
Water Direct / Water Exchange and 21% 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, as well as foreign exchange headwinds.
Revenue growth by channel is tabulated below:
|
For the Three Months
Ended
|
(in millions of U.S.
dollars)
|
April 1,
2023
|
|
April 2,
2022
|
|
Change
|
|
%
Change
|
Revenue, net
(2)
|
|
|
|
|
|
|
|
Water Direct/Water
Exchange
|
$
375.8
|
|
$ 337.3
|
|
$ 38.5
|
|
11 %
|
Water Refill/Water
Filtration
|
61.6
|
|
50.9
|
|
10.7
|
|
21 %
|
Other Water
|
27.2
|
|
50.4
|
|
(23.2)
|
|
(46) %
|
Water
Dispensers
|
12.8
|
|
14.2
|
|
(1.4)
|
|
(10) %
|
Other
|
69.1
|
|
73.3
|
|
(4.2)
|
|
(6) %
|
Revenue, net as
reported
|
$
546.5
|
|
$ 526.1
|
|
$ 20.4
|
|
4 %
|
Foreign exchange
impact
|
12.1
|
|
—
|
|
12.1
|
|
n/a
|
Revenue excluding
foreign exchange impact
|
$
558.6
|
|
$ 526.1
|
|
$ 32.5
|
|
6 %
|
2Reported
revenue in Q1 2022 includes $26.6 million of revenues associated
with our North American single use bottled water retail business
and $2.8 million of revenues associated with our Russia business;
there is no revenue attributable to these businesses in Q1 2023, as
we exited these businesses before the first quarter of
2023.
|
- Gross profit increased 10% to $328
million compared to $300
million. Gross margin increased 320 bps to 60.1% compared to
56.9%, driven by increased demand and pricing initiatives and the
exit from the single-use retail bottled water business in
North America, partially offset by
foreign exchange headwinds.
- SG&A expenses increased 9% to $304
million compared to $278
million. The increase was driven by higher selling and
operating costs that supported volume and revenue growth primarily
related to labor, fuel and freight cost increases.
- Reported net income and net income per diluted share were
$6 million and $0.04, respectively, compared to reported net
loss and net loss per diluted share of $7
million and $0.04,
respectively. Adjusted net income and adjusted net income per
diluted share were $15 million and
$0.09, respectfully, compared to the
prior year, at $14 million and
$0.09, respectively.
- Adjusted EBITDA increased 8% to $95
million compared to $88
million, driven primarily by pricing initiatives, consumer
demand across our customer base and effective expense management.
Adjusted EBITDA margin was 17.4% for the quarter.
- Net cash provided by operating activities of $34 million, less $56
million of capital expenditures and additions to intangible
assets, resulted in $(22) million of
free cash flow, or $(19) million of
adjusted free cash flow (adjusting for the items set forth on
Exhibit 7), compared to adjusted free cash flow of $(13) million in the prior year.
FIRST QUARTER REPORTING SEGMENT PERFORMANCE
During the second quarter of 2022, the Company realigned certain
of its businesses previously included in the Rest of World segment
(now renamed "Europe") between the Europe reporting segment and the Other
category. The Company's two reporting segments are now North America and Europe. Segment reporting results have been
recast to reflect these changes for all periods presented.
North
America
- Revenue increased 4% to $412
million driven by revenue growth of 12% in Water Direct /
Water Exchange, and 24% in Water Refill / Water Filtration driven
by increased demand for products and services from residential and
business customers, partially offset by the exit from our single
use bottled water retail business.
|
For the Three Months
Ended
|
(in millions of U.S.
dollars)
|
April 1,
2023
|
|
April 2,
2022
|
|
Change
|
|
%
Change
|
Revenue, net
(3)
|
|
|
|
|
|
|
|
Water Direct/Water
Exchange
|
$
312.4
|
|
$
278.3
|
|
$
34.1
|
|
12 %
|
Water Refill/Water
Filtration
|
52.2
|
|
42.2
|
|
10.0
|
|
24 %
|
Other Water
|
11.3
|
|
34.0
|
|
(22.7)
|
|
(67) %
|
Water
Dispensers
|
12.7
|
|
14.2
|
|
(1.5)
|
|
(11) %
|
Other
|
23.7
|
|
28.4
|
|
(4.7)
|
|
(17) %
|
Revenue, net as
reported
|
$
412.3
|
|
$
397.1
|
|
$
15.2
|
|
4 %
|
Foreign exchange
impact
|
1.1
|
|
—
|
|
1.1
|
|
n/a
|
Revenue excluding
foreign exchange impact
|
$
413.4
|
|
$
397.1
|
|
$
16.3
|
|
4 %
|
3Reported
revenue in Q1 2022 includes $26.6 million of revenues associated
with our North American single use bottled water retail business;
there is no revenue attributable to this business in Q1 2023, as we
exited this business before the first quarter of 2023.
|
Europe
- Revenue increased 8% to $69
million (increased 15% excluding the impact of foreign
exchange) driven by increased demand for products and services from
residential and business customers and pricing initiatives,
partially offset by the exit of our Russian operations and foreign
exchange headwinds.
|
For the Three Months
Ended
|
(in millions of U.S.
dollars)
|
April 1,
2023
|
|
April 2,
2022
|
|
Change
|
|
%
Change
|
Revenue, net
(4)
|
|
|
|
|
|
|
|
Water Direct/Water
Exchange
|
$
53.0
|
|
$
48.2
|
|
$
4.8
|
|
10 %
|
Water Refill/Water
Filtration
|
8.8
|
|
8.2
|
|
0.6
|
|
7 %
|
Other Water
|
0.2
|
|
0.4
|
|
(0.2)
|
|
(50) %
|
Water
Dispensers
|
0.1
|
|
—
|
|
0.1
|
|
— %
|
Other
|
7.3
|
|
7.5
|
|
(0.2)
|
|
(3) %
|
Revenue, net as
reported
|
$
69.4
|
|
$
64.3
|
|
$
5.1
|
|
8 %
|
Foreign exchange
impact
|
4.2
|
|
—
|
|
4.2
|
|
n/a
|
Revenue excluding
foreign exchange impact
|
$
73.6
|
|
$
64.3
|
|
$
9.3
|
|
15 %
|
4Reported
revenue in the three months ended Q1 2022 includes $2.8 million of
revenues associated with our Russia business; there is no revenue
attributable to this business in the three months ended Q1 2023, as
we exited this business before the first quarter of
2023.
|
QUARTERLY DIVIDEND
Primo Water also announced that
its Board of Directors declared a dividend of US$0.08 per share on common shares, payable in
cash on June 14, 2023 to shareowners
of record at the close of business on June
2, 2023.
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 10,000 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
machines. Primo Water also offers
water filtration units across its 21-country footprint.
Primo'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 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 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 utilizes certain
non-GAAP financial measures. Primo excludes from GAAP revenue
the impact of foreign exchange to separate its impact from Primo's
results of operations. Primo 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
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's underlying business performance and the
performance of its management. Additionally, Primo
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'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'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 Q2 2023 and full year 2023 Adjusted
EBITDA and 2024 Adjusted EBITDA 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 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'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 makes
the statements. Forward-looking statements involve inherent risks
and uncertainties and Primo 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's outlook on second
quarter and full year 2023 revenue and Adjusted EBITDA and Primo'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's ability to
compete successfully in the markets in which it operates;
fluctuations in commodity prices and Primo'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's ability to maintain favorable arrangements and
relationships with its suppliers; Primo's ability to manage supply
chain disruptions and cost increases related to inflation; Primo'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'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's manufacturing
facilities; Primo's ability to maintain access to its water
sources; the impact of climate change on Primo's business; Primo's
ability to protect its intellectual property; the seasonal nature
of Primo'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 COVID-19, related government actions and Primo's strategy
in response thereto on our business; Primo's ability to fully
realize the potential benefit of transactions or other strategic
opportunities that it pursues; Primo's ability to realize cost
synergies of its acquisitions due to integration difficulties and
other challenges; Primo's exposure to intangible asset risk;
Primo's ability to meet its obligations under its debt agreements,
and risks of further increases to its indebtedness; Primo's ability
to maintain compliance with the covenants and conditions under its
debt agreements; fluctuations in interest rates, which could
increase Primo's borrowing costs; Primo's ability to recruit,
retain and integrate new management; Primo'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's reputation
as a result of litigation or legal proceedings; changes in the
legal and regulatory environment in which Primo operates; Primo'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'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's information
systems; Primo's ability to securely maintain its customers'
confidential or credit card information, or other private data
relating to Primo's employees or the Company; Primo'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'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
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
|
|
April 1,
2023
|
|
April 2,
2022
|
Revenue,
net
|
$
546.5
|
|
$
526.1
|
Cost of
sales
|
218.2
|
|
226.5
|
Gross
profit
|
328.3
|
|
299.6
|
Selling, general and
administrative expenses
|
303.5
|
|
278.3
|
Loss on disposal of
property, plant and equipment, net
|
1.3
|
|
1.7
|
Acquisition and
integration expenses
|
2.0
|
|
4.3
|
Operating
income
|
21.5
|
|
15.3
|
Other (income) expense,
net
|
(6.3)
|
|
2.7
|
Interest expense,
net
|
18.8
|
|
16.9
|
Income (loss) before
income taxes
|
9.0
|
|
(4.3)
|
Income tax
expense
|
3.2
|
|
2.4
|
Net income
(loss)
|
$
5.8
|
|
$
(6.7)
|
|
|
|
|
Net income (loss)
per common share
|
|
|
|
|
|
|
|
Basic
|
$
0.04
|
|
$
(0.04)
|
Diluted
|
$
0.04
|
|
$
(0.04)
|
|
|
|
|
Weighted average
common shares outstanding (in thousands)
|
|
|
|
Basic
|
159,726
|
|
160,928
|
Diluted
|
160,781
|
|
160,928
|
PRIMO WATER
CORPORATION
|
|
|
EXHIBIT
2
|
CONSOLIDATED BALANCE
SHEETS
|
|
|
|
(in millions of U.S.
dollars, except share amounts)
|
|
|
|
Unaudited
|
|
|
|
|
|
|
April 1,
2023
|
|
December 31,
2022
|
ASSETS
|
|
|
|
Current
assets
|
|
|
|
Cash and cash
equivalents
|
$
96.5
|
|
$
122.6
|
Accounts receivable,
net of allowance of $21.1 ($20.6 as of December
31,2022)
|
263.3
|
|
258.6
|
Inventories
|
104.3
|
|
112.1
|
Prepaid expenses and
other current assets
|
52.1
|
|
44.7
|
Total current
assets
|
516.2
|
|
538.0
|
Property, plant and
equipment, net
|
723.4
|
|
714.4
|
Operating lease
right-of-use-assets
|
194.0
|
|
198.6
|
Goodwill
|
1,297.8
|
|
1,293.0
|
Intangible assets,
net
|
887.9
|
|
894.7
|
Other long-term assets,
net
|
27.3
|
|
28.3
|
Total
assets
|
$
3,646.6
|
|
$
3,667.0
|
LIABILITIES AND
EQUITY
|
|
|
|
Current
liabilities
|
|
|
|
Short-term
borrowings
|
$
245.9
|
|
$
212.3
|
Current maturities of
long-term debt
|
16.8
|
|
17.5
|
Accounts payable and
accrued liabilities
|
391.6
|
|
425.1
|
Current operating lease
obligations
|
34.4
|
|
35.7
|
Total current
liabilities
|
688.7
|
|
690.6
|
Long-term
debt
|
1,292.2
|
|
1,283.8
|
Operating lease
obligations
|
170.6
|
|
174.5
|
Deferred tax
liabilities
|
171.5
|
|
170.0
|
Other long-term
liabilities
|
67.1
|
|
65.2
|
Total
liabilities
|
2,390.1
|
|
2,384.1
|
Shareholders'
Equity
|
|
|
|
Common shares, no par
value 159,260,862 - (December 31, 2022 -
159,752,299) shares issued
|
1,283.3
|
|
1,283.2
|
Additional
paid-in-capital
|
86.2
|
|
91.3
|
Accumulated
deficit
|
(24.2)
|
|
(9.4)
|
Accumulated other
comprehensive loss
|
(88.8)
|
|
(82.2)
|
Total shareholders'
equity
|
1,256.5
|
|
1,282.9
|
Total liabilities
and shareholders' equity
|
$
3,646.6
|
|
$
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
|
|
April 1,
2023
|
|
April 2,
2022
|
|
|
|
|
Cash flows from
operating activities:
|
|
|
|
Net income
(loss)
|
$
5.8
|
|
$
(6.7)
|
Adjustments to
reconcile net income (loss) to cash flows from operating
activities:
|
|
|
|
Depreciation and
amortization
|
62.4
|
|
61.2
|
Amortization of
financing fees
|
0.8
|
|
0.9
|
Share-based
compensation expense
|
2.3
|
|
3.3
|
Provision for deferred
income taxes
|
0.8
|
|
1.6
|
Gain on sale of
business
|
—
|
|
(0.4)
|
Loss on disposal of
property, plant and equipment, net
|
1.3
|
|
1.7
|
Other non-cash
items
|
(6.7)
|
|
2.1
|
Change in operating
assets and liabilities, net of acquisitions:
|
|
|
|
Accounts
receivable
|
(2.9)
|
|
(11.9)
|
Inventories
|
2.1
|
|
(11.1)
|
Prepaid expenses and
other current assets
|
(4.9)
|
|
(6.2)
|
Other
assets
|
(0.1)
|
|
(0.7)
|
Accounts payable and
accrued liabilities and other liabilities
|
(26.6)
|
|
(10.2)
|
Net cash provided by
operating activities
|
34.3
|
|
23.6
|
Cash flows from
investing activities:
|
|
|
|
Acquisitions, net of
cash received
|
(7.5)
|
|
(0.3)
|
Additions to property,
plant and equipment
|
(53.7)
|
|
(38.6)
|
Additions to
intangible assets
|
(2.7)
|
|
(2.5)
|
Proceeds from sale of
property, plant and equipment
|
0.2
|
|
0.4
|
Other investing
activities
|
2.2
|
|
0.5
|
Net cash used in
investing activities
|
(61.5)
|
|
(40.5)
|
|
|
|
|
Cash flows from
financing activities:
|
|
|
|
Payments of long-term
debt
|
(5.0)
|
|
(4.5)
|
Proceeds from
short-term borrowings
|
61.0
|
|
—
|
Payments on short-term
borrowings
|
(33.2)
|
|
—
|
Issuance of common
shares
|
4.3
|
|
1.2
|
Common shares
repurchased and canceled
|
(19.3)
|
|
(1.8)
|
Dividends paid to
common shareholders
|
(12.8)
|
|
(11.3)
|
Payment of deferred
consideration for acquisitions
|
(0.8)
|
|
(0.1)
|
Other financing
activities
|
6.1
|
|
3.9
|
Net cash provided by
(used in) financing activities
|
0.3
|
|
(12.6)
|
Effect of exchange
rate changes on cash
|
0.8
|
|
(0.9)
|
Net decrease in
cash, cash equivalents and restricted cash
|
(26.1)
|
|
(30.4)
|
Cash and cash
equivalents and restricted cash, beginning of period
|
122.6
|
|
128.4
|
Cash and cash
equivalents and restricted cash, end of period
|
$
96.5
|
|
$
98.0
|
PRIMO WATER
CORPORATION
|
|
|
|
|
|
|
|
EXHIBIT
4
|
SEGMENT
INFORMATION
|
|
|
|
|
|
|
|
|
(in millions of U.S.
dollars, except percentage amounts)
|
|
|
|
|
|
|
Unaudited
|
|
|
|
|
|
|
|
|
|
|
For the Three Months
Ended April 1, 2023
|
|
|
North
America
|
|
Europe
|
|
Other
|
|
Total
|
Revenue,
net
|
|
|
|
|
|
|
|
|
Water Direct/Water
Exchange
|
|
$
312.4
|
|
$
53.0
|
|
$
10.4
|
|
$
375.8
|
Water Refill/Water
Filtration
|
|
52.2
|
|
8.8
|
|
0.6
|
|
61.6
|
Other Water
|
|
11.3
|
|
0.2
|
|
15.7
|
|
27.2
|
Water
Dispensers
|
|
12.7
|
|
0.1
|
|
—
|
|
12.8
|
Other
|
|
23.7
|
|
7.3
|
|
38.1
|
|
69.1
|
Total
|
|
$
412.3
|
|
$
69.4
|
|
$
64.8
|
|
$
546.5
|
|
|
|
|
|
|
|
|
|
Gross profit
|
|
$
258.8
|
|
$
47.5
|
|
$
22.0
|
|
$
328.3
|
Gross margin
%
|
|
62.8 %
|
|
68.4 %
|
|
34.0 %
|
|
60.1 %
|
Selling, general and
administrative expenses
|
|
$
221.1
|
|
$
44.3
|
|
$
38.1
|
|
$
303.5
|
SG&A % of
revenue
|
|
53.6 %
|
|
63.8 %
|
|
58.8 %
|
|
55.5 %
|
Operating income
(loss)
|
|
$
34.7
|
|
$
2.9
|
|
$
(16.1)
|
|
$
21.5
|
Depreciation and
amortization
|
|
$
46.8
|
|
$
9.6
|
|
$
6.0
|
|
$
62.4
|
|
|
|
|
|
|
|
|
|
|
|
For the Three Months
Ended April 2, 2022
|
|
|
North
America
|
|
Europe
|
|
Other
|
|
Total
|
Revenue,
net
|
|
|
|
|
|
|
|
|
Water Direct/Water
Exchange
|
|
$
278.3
|
|
$
48.2
|
|
$
10.8
|
|
$
337.3
|
Water Refill/Water
Filtration
|
|
42.2
|
|
8.2
|
|
0.5
|
|
50.9
|
Other Water
|
|
34.0
|
|
0.4
|
|
16.0
|
|
50.4
|
Water
Dispensers
|
|
14.2
|
|
—
|
|
—
|
|
14.2
|
Other
|
|
28.4
|
|
7.5
|
|
37.4
|
|
73.3
|
Total
|
|
$
397.1
|
|
$
64.3
|
|
$
64.7
|
|
$
526.1
|
|
|
|
|
|
|
|
|
|
Gross profit
|
|
$
232.0
|
|
$
43.8
|
|
$
23.8
|
|
$
299.6
|
Gross margin
%
|
|
58.4 %
|
|
68.1 %
|
|
36.8 %
|
|
56.9 %
|
Selling, general and
administrative expenses
|
|
$
199.7
|
|
$
46.2
|
|
$
32.4
|
|
$
278.3
|
SG&A % of
revenue
|
|
50.3 %
|
|
71.9 %
|
|
50.1 %
|
|
52.9 %
|
Operating income
(loss)
|
|
$
28.3
|
|
$
(3.6)
|
|
$
(9.4)
|
|
$
15.3
|
Depreciation and
amortization
|
|
$
45.3
|
|
$
9.8
|
|
$
6.1
|
|
$
61.2
|
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 April 1, 2023
|
|
North
America
|
|
Europe
|
|
Other
|
|
|
Primo
|
Change in
revenue
|
$
15.2
|
|
$
5.1
|
|
$
0.1
|
|
|
$
20.4
|
Impact of foreign
exchange (a)
|
1.1
|
|
4.2
|
|
6.8
|
|
|
12.1
|
Change excluding
foreign exchange
|
$
16.3
|
|
$
9.3
|
|
$
6.9
|
|
|
$
32.5
|
Percentage change in
revenue
|
3.8 %
|
|
7.9 %
|
|
0.2 %
|
|
|
3.9 %
|
Percentage change in
revenue excluding foreign exchange
|
4.1 %
|
|
14.5 %
|
|
10.7 %
|
|
|
6.2 %
|
|
|
|
|
|
|
|
|
|
|
For the Three Months
Ended April 1, 2023
|
|
North
America
|
|
Europe
|
|
Other
|
|
|
Primo
|
Change in gross
profit
|
$
26.8
|
|
$
3.7
|
|
$
(1.8)
|
|
|
$
28.7
|
Impact of foreign
exchange (a)
|
0.7
|
|
2.7
|
|
2.2
|
|
|
5.6
|
Change excluding
foreign exchange
|
$
27.5
|
|
$
6.4
|
|
$
0.4
|
|
|
$
34.3
|
Percentage change in
gross profit
|
11.6 %
|
|
8.4 %
|
|
(7.6) %
|
|
|
9.6 %
|
Percentage change in
gross profit excluding foreign exchange
|
11.9 %
|
|
14.6 %
|
|
1.7 %
|
|
|
11.4 %
|
|
|
|
|
|
|
|
|
|
(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
|
|
|
EXHIBIT
6
|
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
|
|
April 1,
2023
|
|
April 2,
2022
|
|
|
|
|
Net income
(loss)
|
$
5.8
|
|
$
(6.7)
|
Interest expense,
net
|
18.8
|
|
16.9
|
Income tax
expense
|
3.2
|
|
2.4
|
Depreciation and
amortization
|
62.4
|
|
61.2
|
EBITDA
|
$
90.2
|
|
$
73.8
|
|
|
|
|
Acquisition and
integration costs (a)
|
2.0
|
|
4.3
|
Share-based
compensation costs (b)
|
2.3
|
|
3.3
|
Foreign exchange and
other (gains) losses, net (c)
|
(5.9)
|
|
3.9
|
Loss on disposal of
property, plant and equipment, net (d)
|
1.3
|
|
1.7
|
Other adjustments, net
(e)
|
5.0
|
|
0.9
|
Adjusted
EBITDA
|
$
94.9
|
|
$
87.9
|
|
|
|
|
Revenue,
net
|
$
546.5
|
|
$
526.1
|
Adjusted EBITDA
margin %
|
17.4 %
|
|
16.7 %
|
|
|
For the Three Months
Ended
|
|
Location in
Consolidated
Statements of Operations
|
April 1,
2023
|
|
April 2,
2022
|
|
|
(Unaudited)
|
(a) Acquisition and
integration costs
|
Acquisition and
integration expenses
|
$
2.0
|
|
$
4.3
|
(b) Share-based
compensation costs
|
Selling, general and
administrative expenses
|
2.3
|
|
3.3
|
(c) Foreign exchange
and other (gains) losses, net
|
Other (income) expense,
net
|
(5.9)
|
|
3.9
|
(d) Loss on disposal of
property, plant and equipment, net
|
Loss on disposal of
property, plant and equipment, net
|
1.3
|
|
1.7
|
(e) Other adjustments,
net
|
Other (income) expense,
net
|
(0.4)
|
|
(1.3)
|
|
Selling, general and
administrative expenses
|
5.4
|
|
2.2
|
PRIMO WATER
CORPORATION
|
|
|
EXHIBIT
7
|
SUPPLEMENTARY
INFORMATION - NON-GAAP - FREE CASH FLOW AND ADJUSTED FREE CASH
FLOW
|
(in millions of U.S.
dollars)
|
|
|
|
Unaudited
|
|
|
|
|
|
|
|
|
For the Three Months
Ended
|
|
April 1,
2023
|
|
April 2,
2022
|
|
|
|
|
Net cash provided by
operating activities
|
$
34.3
|
|
$
23.6
|
Less: Additions
to property, plant, and equipment
|
(53.7)
|
|
(38.6)
|
Less: Additions
to intangible assets
|
(2.7)
|
|
(2.5)
|
Free Cash
Flow
|
$
(22.1)
|
|
$
(17.5)
|
|
|
|
|
Acquisition and
integration cash costs
|
2.6
|
|
5.0
|
Cash costs related to
additions to property, plant and equipment for
integration of acquired entities
|
0.1
|
|
—
|
Tariffs refunds related
to property, plant, and equipment
|
0.4
|
|
—
|
Adjusted Free Cash
Flow
|
$
(19.0)
|
|
$
(12.5)
|
PRIMO WATER
CORPORATION
|
|
|
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
|
|
April 1,
2023
|
|
April 2,
2022
|
Net income (loss)
(as reported)
|
$
5.8
|
|
$
(6.7)
|
|
|
|
|
Adjustments:
|
|
|
|
Amortization expense of
customer lists
|
11.3
|
|
12.9
|
Acquisition and
integration costs
|
2.0
|
|
4.3
|
Share-based
compensation costs
|
2.3
|
|
3.3
|
Foreign exchange and
other (gains) losses, net
|
(5.9)
|
|
3.9
|
Other adjustments,
net
|
5.0
|
|
0.9
|
Tax impact of
adjustments (a)
|
(5.6)
|
|
(4.7)
|
Adjusted net
income
|
$
14.9
|
|
$
13.9
|
|
|
|
|
Earnings Per Share
(as reported)
|
|
|
|
Net income
(loss)
|
$
5.8
|
|
$
(6.7)
|
|
|
|
|
Basic EPS
|
$
0.04
|
|
$
(0.04)
|
Diluted EPS
|
$
0.04
|
|
$
(0.04)
|
|
|
|
|
Weighted average
common shares outstanding (in thousands)
|
|
|
|
Basic
|
159,726
|
|
160,928
|
Diluted
|
160,781
|
|
160,928
|
|
|
|
|
Adjusted Earnings
Per Share (Non-GAAP)
|
|
|
|
Adjusted net income
(Non-GAAP)
|
$
14.9
|
|
$
13.9
|
Adjusted diluted EPS
(Non-GAAP)
|
$
0.09
|
|
$
0.09
|
Diluted weighted
average common shares outstanding (in thousands) (Non-
GAAP) (b)
|
160,781
|
|
162,005
|
|
|
|
|
(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.
|
|
|
|
|
(b) Includes the
impact of dilutive securities of 1,077 for the three months ended
April 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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SOURCE Primo Water Corporation