PRMW Primo Water Corporation

 

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 7, 2024 ________________
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 8, 2024, Primo Water Corporation (the “Company”) issued a press release reporting financial results for the second quarter ended June 29, 2024. 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.

Item 8.01.

Other Events.

 

On August 7, 2024, the Company announced that the Board of Directors declared a dividend of US$0.09 per common share, payable in cash on September 5, 2024 to shareowners of record at the close of business on August 22, 2024.

 

Item 9.01.

Financial Statements and Exhibits.

 

(d) Exhibits

 

Exhibit No.	Description
99.1	Press Release of Primo Water Corporation, dated August 8, 2024 (furnished herewith).
104	Cover Page Interactive Data (embedded within the Inline XBRL document).

 

 

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 8, 2024	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 Second Quarter 2024 Results

Raises Full Year Outlook

 

•

Results exceeded high end of Q2 Revenue and Adjusted EBITDA outlook

•

Revenue of $485 million, increased 7.6%, including 6.6% contribution from organic growth

•

Gross margin of 65.6%, increased 110 bps, and net income increased to $13 million

•

Adjusted EBITDA of $113 million, increased 14.9%, and Adjusted EBITDA margin of 23.3%, increased 150 bps

•

Increases full-year 2024 Revenue and Adjusted EBITDA outlook

•

Increases full-year 2024 Adjusted Free Cash Flow outlook to between $180 million and $190 million, an increase of $5 million

 

TAMPA, FL – August 8, 2024 – Primo Water Corporation (NYSE: PRMW; TSX: PRMW) (the “Company” or “Primo Water”), a leading provider of sustainable drinking water solutions in North America, today announced its results for the second quarter ended June 29, 2024.

 

"We continue to execute well against our clear and focused strategy. As a result, we are delivering accelerated topline growth which is balanced and broad based. Our growth and productivity initiatives are enabling margin expansion and delivering strong earnings growth. Since the beginning of this year our team embraced a new strategy that includes a focus on customer-centric initiatives, must win priorities, as well as a commercial and growth mindset leveraging our portfolio of hydration solutions,” said Robbert Rietbroek, Chief Executive Officer.

 

“The focus on the "must-wins" of delivering exceptional customer service, being the water solutions partner of choice, and operational excellence is driving growth and creating value for our stakeholders. We remain focused on the front-line performance of our business to grow profitably as we prepare for the previously announced proposed merger with BlueTriton Brands. We believe the combination of these two companies and their expansive brand and product portfolios will position us to better serve our customers and to fulfill their hydration needs,” continued Mr. Rietbroek.

 

(Unless stated otherwise, all second quarter 2024 comparisons are relative to the second quarter of 2023; all information is in U.S. dollars. Non-GAAP reconciliations presented on the exhibits to this press release)

 

 

SECOND QUARTER HIGHLIGHTS - CONTINUING OPERATIONS

 

•

Revenue increased 7.6% to $485 million compared to $451 million driven by revenue growth consisting of 3.1% attributable to volume and 4.5% attributable to pricing. Contribution from organic growth was 6.6% for the quarter. Revenue growth by channel includes 7.4% in Water Direct / Water Exchange, 11.6% in Water Refill / Water Filtration and 86.6% in Other Water, which is primarily Mountain Valley Spring water sold at retail and on-premise.

 

•

Gross profit increased 9.4% to $318 million compared to $291 million. Gross margin increased 110 bps to 65.6% compared to 64.5%, driven by pricing, increased volume and operating efficiencies.

 

•

SG&A expenses increased 7.2% to $264 million compared to $247 million. The increase was driven by higher selling and operating costs including delivery commissions that supported volume and revenue growth.

 

•

Reported net income and net income per diluted share were $13 million and $0.08, respectively, compared to reported net income and net income per diluted share of $14 million and $0.09, respectively. Adjusted net income and adjusted net income per diluted share were $42 million and $0.26, respectively, compared to $31 million and $0.20, respectively.

 

•

Adjusted EBITDA increased 14.9% to $113 million compared to $98 million, driven by pricing initiatives, customer demand and effective expense management. Adjusted EBITDA margin was 23.3%, compared to 21.8%.

 

•

Net cash provided by operating activities of $101 million, less $40 million of capital expenditures and additions to intangible assets, resulted in $61 million of free cash flow, or $73 million of adjusted free cash flow (adjusting for the items set forth on Exhibit 6), compared to net cash provided by operating activities of $65 million and .adjusted free cash flow of $39 million in the prior year.

 

		For the Three Months Ended
(USD $M except % or unless as otherwise noted)		June 29, 2024				July 1, 2023				Y/Y Change
Revenue, net		$	485.0			$	450.6				7.6	%
Net income from continuing operations		$	13.3			$	13.6			$	(0.3	)
Net income from continuing operations per diluted share		$	0.08			$	0.09			$	(0.01	)
Adjusted net income from continuing operations		$	41.8			$	31.2			$	10.6
Adjusted net income from continuing operations per diluted share		$	0.26			$	0.20			$	0.06
Adjusted EBITDA		$	112.9			$	98.3				14.9	%
Adjusted EBITDA margin %			23.3	%			21.8	%			150 bps

 

 

 

OUTLOOK

 

•

The Company is increasing its full year 2024 revenue target to between $1.87 billion and $1.89 billion and its full year 2024 Adjusted EBITDA target to between $420 million and $440 million. Full-year 2024 Adjusted Free Cash Flow from continuing operations is forecasted to be between $180 million and $190 million, an increase of $5 million.

 

•

Primo Water is targeting the following results from continuing operations for the third quarter and full year 2024:

 

	Q3 2024 Range		FY 2024 Range
($ in millions)	Low	High	Low	High
Revenue	$485	$495	$1,870	$1,890
Adjusted EBITDA	$115	$125	$420	$440
Cash Taxes			$35	$45
Cash Interest, Net			$25	$45
Cap-Ex			~ 7% of Revenue + $22.5M Strategic Investment
Adj. Free Cash Flow			$180	$190

 

SECOND QUARTER 2024 RESULTS CONFERENCE CALL

 

Primo Water will host a conference call, to be simultaneously webcast, on Thursday, August 8, 2024, at 10:00 a.m. Eastern Time. Considering the pending merger with BlueTriton Brands, Inc. (“BlueTriton”), the Q&A session following management’s prepared remarks will be moderated by our Investor Relations team. To ensure a smooth and orderly process, we will not be taking live questions from analysts or investors during this call. Instead, participants were previously invited to submit their questions in advance to investorrelations@primowater.com. The most pertinent questions will be selected and addressed by our management team during the call.

 

Details for the Earnings Conference Call:

 

Date: August 8, 2024

Time: 10:00 a.m. Eastern Time

North America: (888) 664-6392

International: (416) 764-8659

Conference ID: 57926036

Webcast Link: https://app.webinar.net/0YLdAr7m9o4

 

A slide presentation and live audio webcast will be available through Primo Water’s website at https://www.primowatercorp.com.

 

 

 

Replay Information:

The earnings conference call will be recorded and archived for playback on the investor relations section of Primo Water's website.

 

SECOND QUARTER PERFORMANCE - CONTINUING OPERATIONS

 

Revenue growth by channel is tabulated below:

 

		For the Three Months Ended
(in millions of U.S. dollars)		June 29, 2024				July 1, 2023				$ Change				% Change
Revenue, net
Water Direct/Water Exchange		$	368.2			$	342.9			$	25.3				7.4	%
Water Refill/Water Filtration			61.8				55.4				6.4				11.6	%
Other Water1			22.2				11.9				10.3				86.6	%
Water Dispensers			13.2				16.7				(3.5	)			(21.0	%)
Other			19.6				23.7				(4.1	)			(17.3	%)
Revenue, net as reported		$	485.0			$	450.6			$	34.4				7.6	%

 

1. Primarily Mountain Valley retail and on-premise revenue

 

QUARTERLY DIVIDEND

 

Primo Water announced that its Board of Directors declared a dividend of US$0.09 per share on common shares, payable in cash on September 5, 2024 to shareowners of record at the close of business on August 22, 2024.

 

 

SHARE REPURCHASE PROGRAM

 

The Company has paused its share repurchase program in light of the proposed merger with BlueTriton Brands. Prior to the announcement of the proposed merger, the Company had repurchased $6.8 million of its common shares in the second quarter.

 

 

ABOUT PRIMO WATER CORPORATION

 

Primo Water is a leading North America-focused pure-play water solutions provider that operates largely under a recurring revenue model in the large format water category (defined as 3 gallons or greater). This business strategy is commonly referred to as “razor-razorblade” because the initial sale of a product creates a base of users who frequently purchase complementary consumable products. The razor in Primo Water‘s revenue model is its industry leading line-up of innovative water dispensers, which are sold through approximately 11,350 retail locations and online at various price points. The dispensers help increase household and business penetration which drives recurring purchases of Primo Water‘s razorblade offering or water solutions. Primo Water‘s razorblade offering is comprised of Water Direct, Water Exchange, and Water Refill. Through its Water Direct business, Primo Water delivers sustainable hydration solutions direct to customers, whether at home or to businesses. Through its Water Exchange business, customers visit retail locations and purchase a pre-filled bottle of water. Once consumed, empty bottles are exchanged at our recycling center displays, which provide a ticket that offers a discount toward the purchase of a new bottle. Water Exchange is available in approximately 17,950 retail locations. Through its Water Refill business, customers refill empty bottles at approximately 23,500 self-service refill drinking water stations. Primo Water also offers water filtration units across North America.

 

 

Primo Water‘s water solutions expand consumer access to purified, spring, and mineral water to promote a healthier, more sustainable lifestyle while simultaneously reducing plastic waste and pollution. Primo Water is committed to its water stewardship standards and is proud to partner with the International Bottled Water Association (IBWA) in North America which ensures strict adherence to safety, quality, sanitation and regulatory standards for the benefit of consumer protection.

 

Primo Water is headquartered in Tampa, Florida (USA). For more information, visit www.primowatercorp.com.

 

Non-GAAP Measures

To supplement its reporting of financial measures determined in accordance with U.S. GAAP (generally accepted accounting principles), Primo Water utilizes certain non-GAAP financial measures. Primo Water utilizes organic revenue growth (which excludes the impact of acquisitions). Primo Water also utilizes Adjusted net income (loss), Adjusted net income (loss) per diluted share, Adjusted EBITDA and Adjusted EBITDA margin to separate the impact of certain items from the underlying business. Because Primo Water uses these adjusted financial results in the management of its business, management believes this supplemental information is useful to investors for their independent evaluation and understanding of Primo Water’s underlying business performance and the performance of its management. Additionally, Primo Water supplements its reporting of net cash provided by (used in) operating activities from continuing operations determined in accordance with GAAP by excluding additions to property, plant and equipment and additions to intangible assets to present free cash flow, and by excluding the additional items identified on the exhibits hereto to present adjusted free cash flow, which management believes provides useful information to investors in assessing our performance, comparing Primo Water’s performance to the performance of the Company’s peer group and assessing the Company’s ability to service debt and finance strategic opportunities, which include investing in Primo Water’s business, making strategic acquisitions, paying dividends, and strengthening the balance sheet. With respect to the Company’s expectations of its future performance, the Company’s reconciliations of Q3 2024 and full-year 2024 Adjusted EBITDA and 2024 adjusted free cash flow guidance are not available, as the Company is unable to quantify certain amounts to the degree of precision that would be required in the relevant GAAP measures without unreasonable effort. These items include restructuring costs and restructuring-related impairment charges, acquisition/divestiture related costs, gains or losses on the sale of businesses or other assets, and the income tax effects of these items and/or other income tax-related events. These items depend on highly variable factors and any such reconciliations would imply a degree of precision that would be confusing or misleading to investors. Primo Water expects the variability of these factors to have a significant, and potentially unpredictable, impact on the Company’s future GAAP financial results. The non-GAAP financial measures described above are in addition to, and not meant to be considered superior to, or a substitute for, Primo Water’s financial statements prepared in accordance with GAAP. In addition, the non-GAAP financial measures included in this earnings announcement reflect management's judgment of particular items, and may be different from, and therefore may not be comparable to, similarly titled measures reported by other companies.

 

 

Safe Harbor Statements

This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934 conveying management’s expectations as to the future based on plans, estimates and projections at the time Primo Water makes the statements. Forward-looking statements involve inherent risks and uncertainties and Primo Water cautions you that several important factors could cause actual results to differ materially from those contained in any such forward-looking statement. You can identify forward-looking statements by words such as "may," "will," "would," "should," "could," "expect," "aim," "anticipate," "believe," "estimate," "intend," "plan," "predict," "project," "seek," "potential," "opportunities," and other similar expressions and the negatives of such expressions. However, not all forward-looking statements contain these words. The forward-looking statements contained in this press release include, but are not limited to, statements regarding future financial and operating trends and results (including Primo Water’s outlook on Q3 and full-year 2024 revenue, Adjusted EBITDA and Adjusted Free Cash Flow), the transaction with BlueTriton, and related matters. The forward-looking statements are based on assumptions regarding management’s current plans and estimates. Management believes these assumptions to be reasonable, but there is no assurance that they will prove to be accurate.

 

Factors that could cause actual results to differ materially from those described in this press release include, among others: Primo Water’s and BlueTriton’s ability to complete the pending combination transaction on the anticipated terms and schedule, including the ability to obtain regulatory approval; the risk that disruptions from the transaction will harm Primo Water’s business; Primo Water’s ability to compete successfully in the markets in which it operates; Primo Water’s ability to manage supply chain disruptions and cost increases related to inflation; fluctuations in commodity prices and Primo Water’s ability to pass on increased costs to its customers or hedge against such rising costs, and the impact of those increased prices on its volumes; Primo Water’s ability to maintain favorable arrangements and relationships with its suppliers; Primo Water’s ability to manage its operations successfully; currency fluctuations that adversely affect the exchange between currencies including the U.S. dollar and the Canadian dollar; the impact on Primo Water’s financial results from uncertainty in the financial markets and other adverse changes in general economic conditions, including inflation and interest rates; any disruption to production at Primo Water’s manufacturing facilities; Primo Water’s ability to maintain access to its water sources; the impact of climate change on Primo Water’s business; Primo Water’s ability to protect its intellectual property; the seasonal nature of Primo Water’s business and the effect of adverse weather conditions; the impact of national, regional and global events, including those of a political, economic, business and competitive nature, such as the Russia/Ukraine war or the Israel/Hamas war; the impact of a pandemic, such as COVID-19, related government actions and Primo Water’s strategy in response thereto on our business; Primo Water’s ability to fully realize the potential benefit of transactions or other strategic opportunities that it pursues; Primo Water’s ability to realize cost synergies of its acquisitions due to integration difficulties and other challenges; Primo Water’s exposure to intangible asset risk; Primo Water’s ability to meet its obligations under its debt agreements, and risks of further increases to its indebtedness; Primo Water’s ability to maintain compliance with the covenants and conditions under its debt agreements; fluctuations in interest rates, which could increase Primo Water’s borrowing costs; Primo Water’s ability to recruit, retain and integrate new management; the impact of increased labor costs on Primo Water’s business; Primo Water’s ability to renew its collective bargaining agreements from time to time on satisfactory terms; disruptions in Primo Water’s information systems; Primo Water’s ability to securely maintain its customers’ confidential or credit card information, or other private data relating to Primo Water’s employees or the Company; compliance with product health and safety standards; liability for injury or illness caused by the consumption of contaminated products; liability and damage to Primo Water’s reputation as a result of litigation or legal proceedings; changes in the legal and regulatory environment in which Primo Water operates; Primo Water’s ability to adequately address the challenges and risks associated with its operations and address difficulties in complying with laws and regulations including the U.S. Foreign Corrupt Practices Act and the U.K. Bribery Act of 2010; the impact on Primo Water’s tax obligations and effective tax rate arising from changes in local tax laws or countries adopting more aggressive interpretations of tax laws; Primo Water’s ability to maintain its quarterly dividend; and credit rating changes.

 

 

The foregoing list of factors is not exhaustive. Readers are cautioned not to place undue reliance on any forward-looking statements, which speak only as of the date hereof. Readers are urged to carefully review and consider the various disclosures, including but not limited to risk factors contained in Primo Water’s Annual Report on Form 10-K and its quarterly reports on Form 10-Q, as well as other filings with the securities commissions. Primo Water does not undertake to update or revise any of these statements considering new information or future events, except as expressly required by applicable law.

 

Website: www.primowatercorp.com

 

 

 

PRIMO WATER CORPORATION														EXHIBIT 1
CONSOLIDATED STATEMENTS OF OPERATIONS
(in millions of U.S. dollars, except share and per share amounts)
Unaudited
		For the Three Months Ended								For the Six Months Ended
		June 29, 2024				July 1, 2023				June 29, 2024				July 1, 2023
Revenue, net		$	485.0			$	450.6			$	937.0			$	863.1
Cost of sales			167.0				159.8				327.7				313.3
Gross profit			318.0				290.8				609.3				549.8
Selling, general and administrative expenses			264.4				246.6				513.8				481.2
Loss on disposal of property, plant and equipment, net			1.3				0.9				2.8				2.2
Acquisition and integration expenses			13.1				1.9				18.4				3.6
Gain on sale of property			—				—				(0.5	)			—
Operating income			39.2				41.4				74.8				62.8
Other expense, net			2.7				0.6				0.1				0.3
Interest expense, net			9.2				18.8				19.2				37.0
Income from continuing operations before income taxes			27.3				22.0				55.5				25.5
Income tax expense			14.0				8.4				23.5				8.7
Net income from continuing operations		$	13.3			$	13.6			$	32.0			$	16.8
Net income from discontinued operations, net of income taxes			2.7				7.7				9.0				10.3
Net income		$	16.0			$	21.3			$	41.0			$	27.1
Net income per common share
Basic:
Continuing operations		$	0.08			$	0.09			$	0.20			$	0.11
Discontinued operations		$	0.02			$	0.04			$	0.06			$	0.06
Net income		$	0.10			$	0.13			$	0.26			$	0.17
Diluted:
Continuing operations		$	0.08			$	0.09			$	0.20			$	0.11
Discontinued operations		$	0.02			$	0.04			$	0.05			$	0.06
Net income		$	0.10			$	0.13			$	0.25			$	0.17
Weighted-average common shares outstanding (in thousands)
Basic			160,112				159,196				159,843				159,465
Diluted			161,384				159,900				161,041				160,332

 

PRIMO WATER CORPORATION						EXHIBIT 2
CONSOLIDATED BALANCE SHEETS
(in millions of U.S. dollars, except share amounts)
Unaudited
		June 29, 2024				December 30, 2023
ASSETS
Current assets
Cash and cash equivalents		$	603.3			$	507.9
Accounts receivable, net of allowance of $13.2 ($12.7 as of December 30, 2023)			164.1				156.0
Inventories			47.3				47.3
Prepaid expenses and other current assets			22.9				26.0
Current assets of discontinued operations			81.9				128.7
Total current assets			919.5				865.9
Property, plant and equipment, net			549.1				556.5
Operating lease right-of-use-assets			147.5				136.0
Goodwill			1,009.0				1,004.6
Intangible assets, net			717.8				714.2
Other long-term assets, net			18.4				20.2
Long-term assets of discontinued operations			158.4				225.6
Total assets		$	3,519.7			$	3,523.0
LIABILITIES AND EQUITY
Current liabilities
Current maturities of long-term debt		$	14.6			$	14.2
Accounts payable and accrued liabilities			291.2				276.4
Current operating lease obligations			26.0				25.6
Current liabilities of discontinued operations			89.3				109.9
Total current liabilities			421.1				426.1
Long-term debt			1,250.3				1,270.8
Operating lease obligations			134.0				124.0
Deferred tax liabilities			141.5				144.2
Other long-term liabilities			84.6				64.4
Long-term liabilities of discontinued operations			33.8				52.2
Total liabilities			2,065.3				2,081.7
Equity
Common shares, no par value - 160,289,149 (December 30, 2023 - 159,480,638) shares issued			1,310.2				1,288.6
Additional paid-in capital			86.6				90.6
Retained earnings			170.6				167.2
Accumulated other comprehensive loss			(113.0	)			(105.1	)
Total Primo Water Corporation equity			1,454.4				1,441.3
Total liabilities and equity		$	3,519.7			$	3,523.0

 

 

 

PRIMO WATER CORPORATION														EXHIBIT 3
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in millions of U.S. dollars)
Unaudited
		For the Three Months Ended								For the Six Months Ended
		June 29, 2024				July 1, 2023				June 29, 2024				July 1, 2023
Cash flows from operating activities of continuing operations:
Net income		$	16.0			$	21.3			$	41.0			$	27.1
Net income from discontinued operations, net of income taxes			2.7			$	7.7				9.0				10.3
Net income from continuing operations		$	13.3			$	13.6				32.0				16.8
Adjustments to reconcile net income from continuing operations to cash flows from operating activities of continuing operations:
Depreciation and amortization			49.7				47.2				97.9				94.3
Amortization of financing fees			0.9				0.9				1.7				1.7
Share-based compensation expense			9.5				2.7				12.5				4.7
(Benefit) provision for deferred income taxes			(4.9	)			5.4				(3.0	)			6.5
Loss on disposal of property, plant and equipment, net			1.3				0.9				2.8				2.2
Gain on sale of property			—				—				(0.5	)			—
Other non-cash items			2.0				(1.2	)			(2.6	)			(3.2	)
Change in operating assets and liabilities, net of acquisitions:
Accounts receivable			3.3				(22.6	)			(2.7	)			(18.8	)
Inventories			(3.0	)			2.6				(1.8	)			4.7
Prepaid expenses and other current assets			3.9				4.2				0.5				1.9
Other assets			4.3				(0.4	)			3.8				(0.5	)
Accounts payable and accrued liabilities and other liabilities			21.0				11.9				24.1				(14.8	)
Net cash provided by operating activities of continuing operations			101.3				65.2				164.7				95.5
Cash flows from investing activities of continuing operations:
Acquisitions, net of cash received			(20.1	)			(15.6	)			(24.2	)			(23.0	)
Additions to property, plant and equipment			(37.3	)			(27.0	)			(74.9	)			(69.2	)
Additions to intangible assets			(3.0	)			(2.0	)			(5.3	)			(4.0	)
Proceeds from sale of property, plant and equipment			0.1				0.1				0.2				0.2
Proceeds from sale of property			—				—				1.0				—
Other investing activities			—				1.1				2.7				1.9
Net cash used in investing activities of continuing operations			(60.3	)			(43.4	)			(100.5	)			(94.1	)

 

Cash flows from financing activities of continuing operations:
Payments of long-term debt			(3.8	)			(2.8	)			(6.6	)			(6.0	)
Proceeds from short-term borrowings			—				43.0				—				104.0
Payments on short-term borrowings			—				(59.8	)			—				(93.0	)
Issuance of common shares			10.5				0.4				16.7				4.7
Common shares repurchased and canceled			(9.1	)			(2.5	)			(20.2	)			(21.8	)
Dividends paid to common shareholders			(14.4	)			(13.1	)			(29.2	)			(25.9	)
Payment of contingent consideration for acquisitions			(1.1	)			(0.2	)			(1.8	)			(1.0	)
Other financing activities			—				(2.5	)			—				(5.0	)
Net cash used in financing activities of continuing operations			(17.9	)			(37.5	)			(41.1	)			(44.0	)
Cash flows from discontinued operations:
Net cash provided by operating activities from discontinued operations			1.4				11.6				2.2				15.6
Net cash provided by (used in) investing activities from discontinued operations			64.7				(9.0	)			59.1				(19.8	)
Net cash provided by financing activities from discontinued operations			0.9				2.8				1.0				9.6
Net cash provided by discontinued operations			67.0				5.4				62.3				5.4
Effect of exchange rate changes on cash			0.1				0.6				(0.4	)			1.4
Net increase (decrease) in cash, cash equivalents and restricted cash			90.2				(9.7	)			85.0				(35.8	)
Cash and cash equivalents and restricted cash, beginning of period			525.3				96.5				530.5				122.6
Cash and cash equivalents and restricted cash, end of period		$	615.5			$	86.8			$	615.5			$	86.8
Cash and cash equivalents and restricted cash from discontinued operations, end of period			12.2				35.6				12.2				35.6
Cash and cash equivalents and restricted cash of continuing operations, end of period		$	603.3			$	51.2			$	603.3			$	51.2

 

 

 

 

PRIMO WATER CORPORATION										EXHIBIT 4
SEGMENT INFORMATION
(in millions of U.S. dollars, except percentage amounts)
Unaudited
		For the Three Months Ended June 29, 2024
		North America				Other				Total
Revenue, net
Water Direct/Water Exchange		$	368.2			$	—			$	368.2
Water Refill/Water Filtration			61.8				—				61.8
Other Water1			22.2				—				22.2
Water Dispensers			13.2				—				13.2
Other			19.4				0.2				19.6
Total		$	484.8			$	0.2			$	485.0
Gross profit		$	317.8			$	0.2			$	318.0
Gross margin %			65.6	%			100.0	%			65.6	%
Selling, general and administrative expenses		$	243.3			$	21.1			$	264.4
SG&A % of revenue2			50.2	%			NM				54.5	%
Operating income (loss)		$	72.9			$	(33.7	)		$	39.2
Depreciation and amortization		$	49.2			$	0.5			$	49.7
			For the Three Months Ended July 1, 2023
			North America				Other				Total
Revenue, net
Water Direct/Water Exchange		$	342.9			$	—			$	342.9
Water Refill/Water Filtration			55.4				—				55.4
Other Water1			11.9				—				11.9
Water Dispensers			16.7				—				16.7
Other			23.6				0.1				23.7
Total		$	450.5			$	0.1			$	450.6
Gross profit		$	290.7			$	0.1			$	290.8
Gross margin %			64.5	%			100.0	%			64.5	%
Selling, general and administrative expenses		$	231.0			$	15.6			$	246.6
SG&A % of revenue2			51.3	%			NM				54.7	%
Operating income (loss)		$	57.3			$	(15.9	)		$	41.4
Depreciation and amortization		$	46.8			$	0.4			$	47.2
_____________________________
1 Primarily Mountain Valley retail and on-premise revenue
2 "NM" defined as not meaningful

 

 

		For the Six Months Ended June 29, 2024
		North America				Other				Total
Revenue, net
Water Direct/Water Exchange		$	707.6			$	—			$	707.6
Water Refill/Water Filtration			119.8				—				119.8
Other Water1			39.9				—				39.9
Water Dispensers			30.0				—				30.0
Other			39.1				0.6				39.7
Total		$	936.4			$	0.6			$	937.0
Gross profit		$	608.9			$	0.4			$	609.3
Gross Margin %			65.0	%			66.7	%			65.0	%
Selling, general and administrative expenses		$	481.4			$	32.4			$	513.8
SG&A % of revenue2			51.4	%			NM				54.8	%
Operating income (loss)		$	124.3			$	(49.5	)		$	74.8
Depreciation and amortization		$	97.0			$	0.9			$	97.9
			For the Six Months Ended July 1, 2023
			North America				Other				Total
Revenue, net
Water Direct/Water Exchange		$	655.3			$	—			$	655.3
Water Refill/Water Filtration			107.6				—				107.6
Other Water1			23.2				—				23.2
Water Dispensers			29.4				—				29.4
Other			47.3				0.3				47.6
Total		$	862.8			$	0.3			$	863.1
Gross profit		$	549.5			$	0.3			$	549.8
Gross margin %			63.7	%			100.0	%			63.7	%
Selling, general and administrative expenses		$	452.1			$	29.1			$	481.2
SG&A % of revenue2			52.4	%			NM				55.8	%
Operating income (loss)		$	92.0			$	(29.2	)		$	62.8
Depreciation and amortization		$	93.6			$	0.7			$	94.3
_____________________________
1 Primarily Mountain Valley retail and on-premise revenue
2 "NM" defined as not meaningful

 

 

 

 

PRIMO WATER CORPORATION														EXHIBIT 5
SUPPLEMENTARY INFORMATION - NON-GAAP - EARNINGS BEFORE INTEREST, TAXES, DEPRECIATION & AMORTIZATION
(EBITDA)
(in millions of U.S. dollars, except percentage amounts)
Unaudited
		For the Three Months Ended								For the Six Months Ended
		June 29, 2024				July 1, 2023				June 29, 2024				July 1, 2023
Net income from continuing operations		$	13.3			$	13.6			$	32.0			$	16.8
Interest expense, net			9.2				18.8				19.2				37.0
Income tax expense			14.0				8.4				23.5				8.7
Depreciation and amortization			49.7				47.2				97.9				94.3
EBITDA		$	86.2			$	88.0			$	172.6			$	156.8
Acquisition and integration costs (a)			13.1				1.9				18.4				3.6
Share-based compensation costs (b)			9.5				2.7				12.5				4.7
Foreign exchange and other losses, net (c)			2.7				0.3				0.8				0.1
Loss on disposal of property, plant and equipment, net (d)			1.3				0.9				2.8				2.2
Gain on sale of property (e)			—				—				(0.5	)			—
Other adjustments, net (f)			0.1				4.5				0.2				6.5
Adjusted EBITDA		$	112.9			$	98.3			$	206.8			$	173.9
Revenue, net		$	485.0			$	450.6			$	937.0			$	863.1
Adjusted EBITDA margin %			23.3	%			21.8	%			22.1	%			20.1	%

 

 

 

 

				For the Three Months Ended								For the Six Months Ended
		Location in Consolidated Statements of Operations		June 29, 2024				July 1, 2023				June 29, 2024				July 1, 2023
				(Unaudited)								(Unaudited)
(a) Acquisition and integration costs		Acquisition and integration expenses		$	13.1			$	1.9			$	18.4			$	3.6
(b) Share-based compensation costs		Selling, general and administrative expenses			9.5				2.7				12.5				4.7
(c) Foreign exchange and other gains, net		Other expense, net			2.7				0.3				0.8				0.1
(d) Loss on disposal of property, plant and equipment, net		Loss on disposal of property, plant and equipment, net			1.3				0.9				2.8				2.2
(e) Gain on sale of property		Gain on sale of property			—				—				(0.5	)			—
(f) Other adjustments, net		Other expense, net			—				(0.4	)			(0.7	)			(0.6	)
		Selling, general and administrative expenses			0.1				4.9				0.9				7.1

 

 

 

 

 

PRIMO WATER CORPORATION						EXHIBIT 6
SUPPLEMENTARY INFORMATION - NON-GAAP - FREE CASH FLOW AND ADJUSTED FREE CASH FLOW
(in millions of U.S. dollars)
Unaudited
		For the Three Months Ended
		June 29, 2024				July 1, 2023
Net cash provided by operating activities of continuing operations		$	101.3			$	65.2
Less:  Additions to property, plant, and equipment			(37.3	)			(27.0	)
Less:  Additions to intangible assets			(3.0	)			(2.0	)
Free Cash Flow		$	61.0			$	36.2
Acquisition and integration cash costs			11.5				1.3
Cash costs related to additions to property, plant and equipment for integration of acquired entities			0.3				0.1
COVID-19 related refunds			(0.8	)			—
Cash taxes paid for property sales			1.3				0.8
Tariffs refunds related to property, plant, and equipment			—				1.0
Adjusted Free Cash Flow		$	73.3			$	39.4
			For the Six Months Ended
			June 29, 2024				July 1, 2023
Net cash provided by operating activities of continuing operations		$	164.7			$	95.5
Less:  Additions to property, plant, and equipment			(74.9	)			(69.2	)
Less:  Additions to intangible assets			(5.3	)			(4.0	)
Free Cash Flow		$	84.5			$	22.3
Acquisition and integration cash costs			13.9				3.8
Cash costs related to additions to property, plant and equipment for integration of acquired entities			0.7				0.1
COVID-19 related refunds			(0.8	)			—
Cash taxes paid for property sales			1.3				0.8
Tariffs refunds related to property, plant, and equipment			2.1				1.4
Adjusted Free Cash Flow		$	101.7			$	28.4

 

 

 

PRIMO WATER CORPORATION														EXHIBIT 7
SUPPLEMENTARY INFORMATION-NON-GAAP-ADJUSTED NET INCOME AND ADJUSTED EPS
(in millions of U.S. dollars, except share amounts)
Unaudited
		For the Three Months Ended								For the Six Months Ended
		June 29, 2024				July 1, 2023				June 29, 2024				July 1, 2023
Net income from continuing operations		$	13.3			$	13.6			$	32.0			$	16.8
Adjustments:
Amortization expense of customer lists			7.1				7.4				14.2				14.7
Acquisition and integration costs			13.1				1.9				18.4				3.6
Share-based compensation costs			9.5				2.7				12.5				4.7
Foreign exchange and other losses, net			2.7				0.3				0.8				0.1
Gain on sale of property			—				—				(0.5	)			—
Other adjustments, net			0.1				4.5				0.2				6.5
Tax impact of adjustments1			(4.0	)			0.8				(5.3	)			(4.0	)
Adjusted net income		$	41.8			$	31.2			$	72.3			$	42.4
Earnings Per Share (as reported)
Net income from continuing operations		$	13.3			$	13.6			$	32.0			$	16.8
Basic EPS		$	0.08			$	0.09			$	0.20			$	0.11
Diluted EPS		$	0.08			$	0.09			$	0.20			$	0.11
Weighted average common shares outstanding (in thousands)
Basic			160,112				159,196				159,843				159,465
Diluted			161,384				159,900				161,041				160,332
Adjusted Earnings Per Share (Non-GAAP)
Adjusted net income from continuing operations (Non-GAAP)		$	41.8			$	31.2			$	72.3			$	42.4
Adjusted diluted EPS (Non-GAAP)		$	0.26			$	0.20			$	0.45			$	0.26
Weighted average common shares outstanding (in thousands)
Basic			160,112				159,196				159,843				159,465
Diluted weighted average common shares outstanding (in thousands) (Non-GAAP)2			161,384				159,900				161,041				160,332
1 The tax effect for adjusted net income is based upon an analysis of the statutory tax treatment and the applicable tax rate for the jurisdiction in which the pre-tax adjusting items incurred and for which realization of the resulting tax benefit (if any) is expected. A reduced or 0% tax rate is applied to jurisdictions where we do not expect to realize a tax benefit due to a history of operating losses or other factors resulting in a valuation allowance related to deferred tax assets.
2 For the periods presented, the non-GAAP diluted weighted average common shares outstanding equaled the reported diluted weighted average common shares outstanding.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

16

v3.24.2.u1

Cover	Aug. 07, 2024
Cover [Abstract]
Document Type	8-K
Amendment Flag	false
Document Period End Date	Aug. 07, 2024
Entity File Number	001-31410
Entity Registrant Name	Primo Water Corporation
Entity Central Index Key	0000884713
Entity Tax Identification Number	98-0154711
Entity Incorporation, State or Country Code	A6
Entity Address, Address Line One	1150 Assembly Dr.
Entity Address, Address Line Two	Suite 800
Entity Address, City or Town	Tampa
Entity Address, State or Province	FL
Entity Address, Country	US
Entity Address, Postal Zip Code	33607
City Area Code	813
Local Phone Number	544-8515
Written Communications	false
Soliciting Material	false
Pre-commencement Tender Offer	false
Pre-commencement Issuer Tender Offer	false
Title of 12(b) Security	Common shares without nominal or par value
Trading Symbol	PRMW
Security Exchange Name	NYSE
Entity Emerging Growth Company	false

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