Call 888-776-0942 from 8 a.m. to 10 p.m. Eastern Time
The company reiterated its full-year adjusted EBITDA guidance and shared its multi-year growth algorithm
Tampa, Florida, November 4, 2021/PRNewswire/-Primo Water Corporation (NYSE: PRMW) (TSX: PRMW) ("Company" or "Primo") is North America And a leading supplier of sustainable drinking water solutions. Europe, today announced its third quarter results ending October 2, 2021.
(Unless otherwise noted, all comparisons for the third quarter of 2021 are relative to the third quarter of 2020; all information is in U.S. dollars.)
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(In millions of U.S. dollars, except per share amounts, percentages and basis points)
Diluted earnings per share
Adjusted net income per diluted share
"Our pure water model continues to drive higher demand for our products and services," said CEO Tom Harrington. "The operating performance in the third quarter was negatively affected by the increase in the number of employees affected by Covid, leading to inefficient routes and increased overtime and temporary wages. This was partly due to the higher revenue and fixed cost leverage experienced by our North American Water Direct business. The demand for offsetting increased significantly. We saw operational improvement at the end of the third quarter and continued until October, supporting our belief that this is the short-term impact of the virus. I am proud of the efforts our team has made in this challenging period. Satisfied with everyone’s continued commitment to safety and customer satisfaction."
"As our transformation as a pure water company and ESG leader continues to enter the next stage, we plan to exit the single-use plastic retail bottled water business in North America. Although this is only a small part of our overall business, exiting this category will Bringing higher profit margins and a more sustainable business. One-way, single-use plastic bottles are playing an increasing role in our landfills and waterways, prompting us to focus on more environmentally friendly 3 gallons and 5- Gallon recyclable bottle business," Mr. Harrington continued.
"We look forward to the Investor Day scheduled for November 17, when we will provide detailed information behind the high-single-digit organic revenue growth forecast, continue to implement high value-added businesses of US$40 to 60 million, and increase EBITDA margins by 40 to 60 Except for our one-time retail bottled water business plan to exit approximately 100 basis points of one-time gains and target annualized adjusted EBITDA of more than US$500 million by the end of 2024, the basis points per year," Harrington.
Primo's goal is to achieve the following results in the fourth quarter of 2021 and the continuous operation throughout the year:
2021 Third Quarter Results Conference Call
Primo Water Corporation will hold a conference call today (November 4, 2021) at 10 AM Eastern Time to discuss the third quarter results, which can be accessed by:
North America: (888) 664-6392 International: (416) 764-8659 Conference ID: 46080719
The Primo website https://www.primowatercorp.com will provide slide presentations and live audio webcasts. The earnings conference call will be recorded and archived for broadcast in the investor relations section of the website within two weeks after the event.
Third quarter global performance-continuing operations
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(One million U.S. dollars)
Income does not include foreign exchange effects
Reporting segment performance for the third quarter-continuing operations
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(One million U.S. dollars)
Income does not include foreign exchange effects
Rest of the world ("ROW")
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(One million U.S. dollars)
Income does not include foreign exchange effects
In the third quarter, the company repurchased approximately 1.8 million shares of common stock in accordance with its previously announced share repurchase plan of up to US$50 million in the company’s issued common stock, for a total of approximately US$29 million.
According to the plan, the company’s common stock can be repurchased on a regular basis through the facilities of the New York Stock Exchange on the open market or in privately negotiated transactions.
Primo Water Corporation is a leading pure water solution provider in North America and Europe, with annual revenue of approximately US$2 billion. Primo mainly operates under the recurring razor/razor revenue model. The shavers in Primo's revenue model are its industry-leading series of fashionable and innovative water dispensers, which are sold at various price points through retailers and online. The dispenser helps to increase the penetration rate in the home, thereby promoting repeated purchases of Primo razor products. Primo's razor products include Water Direct, Water Exchange and Water Refill. Through its Water Direct business, Primo provides customers with sustainable water replenishment solutions directly in its footprint in 22 countries, whether at home or in business. Through its water replacement and replenishment business, Primo provides pre-installed and reusable containers at more than 13,000 locations, and water replenishment devices at approximately 22,000 locations. Primo also provides water filtration devices in 22 countries/regions, representing the top five.
Primo's water solutions expand consumers' access to pure water, spring water, and mineral water to promote healthier and more sustainable lifestyles while reducing plastic waste and pollution. Primo is committed to its water management standards and proudly collaborates with the International Bottled Water Association (IBWA) and Watercoolers Europe (WE) in North America to ensure strict compliance with safety, quality, hygiene and regulatory standards. consumer rights Protection.
Primo is headquartered in Tampa, Florida, USA. For more information, please visit www.primowatercorp.com.
To supplement its reporting of financial measures determined by GAAP, Primo uses certain non-GAAP financial measures. Primo excludes the impact of foreign exchange from GAAP revenue to separate its impact from Primo’s operating results. Primo uses adjusted net income (loss), adjusted diluted earnings per share (loss), adjusted EBITDA, and adjusted EBITDA margin to separate the impact of certain items from the underlying business. Since Primo uses these adjusted financial results in its business management, management believes that this supplementary information helps investors to independently evaluate and understand Primo's basic business performance and the performance of its management. In addition, Primo supplemented the GAAP-determined report on net cash provided by (used in) operating activities in continuing operations, excluding additional real estate, plant and equipment to provide free cash flow, and excluding items shown here Provide adjusted free cash flow, management believes that this is for investors to evaluate our performance, compare Primo’s performance with the performance of the company’s peer group, and evaluate the company’s ability to repay debt and financing strategic opportunities (including investing in Primo’s business ) Provides useful information to make strategic acquisitions, pay dividends, buy back common stock and strengthen the balance sheet. Regarding the company’s expectations of its performance, reconciliation of the company’s estimated adjusted EBITDA for the fourth quarter of 2021 and the full year of 2021 and the target adjusted EBITDA for 2024 is not available because the company cannot quantify the accuracy of certain amounts in the relevant GAAP measures There is no unreasonable effort. These items include taxes and fees, interest costs incurred when the company issues debts, and the costs of acquiring and/or selling businesses when the company executes such transactions, which may have a significant impact on our financial performance. These items depend on highly variable factors, and any such reconciliation implies a certain degree of accuracy, which can confuse or mislead investors. Primo expects that the variability of these factors will have a significant and possibly unpredictable impact on the company's future GAAP financial performance. The above-mentioned non-GAAP financial measures are supplements to Primo's GAAP financial statements and are not meant to be superior to or substitute for them. In addition, the non-GAAP financial indicators included in this earnings announcement reflect management's judgment on specific items, and may be different from similarly titled indicators reported by other companies, and therefore may not be comparable.
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 for the future based on Primo’s plans, estimates and forecasts at the time of formulation . Forward-looking statements involve inherent risks and uncertainties. Primo reminds you that several important factors may cause actual results to differ materially from the results contained in any such forward-looking statements. The forward-looking statements contained in this press release include, but are not limited to, statements related to future financial and operating trends and results (including Primo’s outlook for the fourth quarter and full-year 2021 revenue and adjusted EBITDA and Primo’s multi-year growth algorithm ), Primo plans to withdraw from its disposable bottled retail water business in North America, and related matters. Forward-looking statements are based on assumptions about management’s current plans and estimates. Management believes that these assumptions are reasonable, but cannot guarantee that they will prove to be accurate.
Factors that may cause actual results to differ materially from the results described in this press release include: the spread of COVID-19, related government actions, and Primo’s response to it’s impact on our business, financial conditions, and operational results; Primo’s The ability to compete successfully in the market in which it operates; commodity price fluctuations and Primo's ability to pass on increased costs to customers or hedge against such cost increases, and the impact of these price increases on its volume; Primo maintains favorable arrangements and relationships with its suppliers Primo’s ability to successfully manage its operations; currency fluctuations that adversely affect exchanges between currencies such as the U.S. dollar, British pound, euro, and Canadian dollar; financial market uncertainty and other adverse changes in general economic conditions affect Primo’s finances The impact of performance; any production interruption at Primo’s manufacturing facilities; Primo’s ability to maintain access to its water sources; Primo’s ability to protect its intellectual property rights; the impact of Primo’s business’s seasonal and severe weather conditions; the impact of national, regional, and global events, including Political, economic, commercial and competitive events; Primo can fully realize the potential benefits of the transaction or other strategic opportunities it pursues; Primo can realize the cost synergy of its acquisition due to integration difficulties and other challenges; Primo and traditional Primo acquisitions Related limited compensation rights; Primo’s intangible asset risk; Primo’s ability to fulfill its obligations under its debt agreement, and the risk of further increases in its debt; Primo’s ability to maintain compliance with the contract and conditions under its debt agreement; interest rate fluctuations, this May increase Primo’s borrowing costs; the huge debt incurred to fund Primo’s acquisition; Primo’s ability to recruit, retain, and integrate new management; Primo can renew its collective bargaining agreement on satisfactory terms; comply with the product Health and safety standards; liability for injuries or illnesses caused by the consumption of contaminated products; liability and damage to Primo’s reputation due to litigation or legal procedures; changes in the legal and regulatory environment in which Primo operates; Primo is able to adequately cope with them Challenges and risks related to international business, and resolve difficulties in complying with laws and regulations (including the US Foreign Corrupt Practices Act and the 2010 UK Bribery Act); due to changes in local tax laws or the country’s more active interpretation of tax laws The impact on Primo’s tax liability and effective tax rate; Primo information system is disrupted; Primo is able to securely maintain confidential or credit card information of its customers, or other private data related to Primo employees or the company; Primo’s ability to maintain quarterly dividends; or Credit rating changes.
The above list of factors is not exhaustive. Readers are cautioned not to rely excessively on any forward-looking statements, which are only effective as of the date of publication of this article. Readers are urged to carefully review and consider various disclosures, including but not limited to the risk factors contained in the Primo 10-K annual report and 10-Q quarterly report, as well as other documents submitted to the Securities Commission. In consideration of new information or future events, Primo does not undertake to update or modify any of these statements unless expressly required by applicable law.
(In millions of U.S. dollars, except for shares and per share amounts)
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End of nine months
Sales, general and administrative expenses
Disposal of loss of real property, plant and equipment, net
Goodwill and intangible asset impairment charges
Income (loss) from continuing operations before income tax
Net income (loss) from continuing operations
Net (loss) income from discontinued operations, net of income tax
Net income (loss) per common share
Weighted average issued common shares (in thousands)
(In millions of U.S. dollars, excluding the amount of shares)
Accounts receivable, net of reserves of USD 21.0 (USD 20.7 as of January 2, 2021)
Prepaid expenses and other liquid assets
Real estate, plant and equipment, net
The current maturity date of long-term debt
Accounts payable and accrued liabilities
Ordinary shares, no par value-160,135,328 (January 2, 2021-160,406,464) shares issued
Total liabilities and shareholders' equity
Consolidated cash flow statement
(One million U.S. dollars)
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Cash flow from continuing operations:
Net (loss) income from discontinued operations, net of income tax
Net income (loss) from continuing operations
Adjust the net income (loss) from continuing operations and the cash flow from operating activities:
Deferred income tax reserve (income)
(Gain) loss on sale of business
Debt settlement losses
Goodwill and intangible asset impairment charges
Disposal of loss of real property, plant and equipment, net
Changes in operating assets and liabilities, net of acquisitions:
Prepaid expenses and other liquid assets
Accounts payable and accrued liabilities and other liabilities
Net cash provided by continuing operations from operating activities
Cash flow from continuing business investment activities:
Acquisition, net of cash received
Increase real estate, plant and equipment
Proceeds from the sale of property, plant and equipment
Net cash used for investment activities in continuing operations
Cash flow from continuing operations financing activities:
Premiums and costs paid when eliminating long-term debt
Common stock repurchase and cancellation
Dividends paid to ordinary shareholders
Payment of deferred consideration for acquisition
Net cash used in financing activities from continuing operations
Cash flow from discontinued operations:
Operational activities of discontinued business
Investment activities of discontinued business
Financing activities for discontinued businesses
Net cash provided by discontinued operating activities (used in)
Effect of exchange rate changes on cash
Net increase (decrease) in cash, cash equivalents and restricted cash
Cash and cash equivalents and restricted cash, beginning of period
Cash and cash equivalents and restricted cash, period-end
(In millions of U.S. dollars, excluding percentage amounts)
Three months ending October 2, 2021
Selling, general and administrative expenses (a)
SG&A as a percentage of revenue
Three months ended September 26, 2020
Selling, general and administrative expenses (a)
SG&A as a percentage of revenue
Nine months ending October 2, 2021
Selling, general and administrative expenses (a)
SG&A revenue percentage
Nine months ended September 26, 2020
Selling, general and administrative expenses (a)
SG&A as a percentage of revenue
(a) We revised the allocation of information technology costs from all other categories to our reporting divisions in North America and the rest of the world to reflect how the CEO, as our chief operating decision maker, measures the performance of our divisions. As a result of this change, the previous sales, general, and administrative ("SG&A") expenses have been recalculated. The SG&A expenses of the North American reporting segment have increased by $600,000, and the SG&A expenses of the reporting segment in the rest of the world have increased by $1.7 million. Reduce SG&A expenses by $2.3 million in all other categories for the three months ended September 26, 2020. The SG&A expenses for the nine months ended September 26, 2020 have been recalculated to increase the SG&A expenses of our North American reporting department by USD 1.6 million, and the SG&A expenses of our reporting department in the rest of the world by USD 5.1 million. SG&A expenses were reduced by US$6.7 million. Operating income (loss) for our North American and Rest of the World reporting divisions and all other categories (if applicable) reflect the above adjustments for the three and nine months ended September 26, 2020.
Supplementary Information-Non-GAAP-Analysis of Revenue and Gross Profit by Reporting Segment
(In millions of U.S. dollars, excluding percentage amounts)
Three months ending October 2, 2021
The impact of foreign exchange (1)
Percentage change in income excluding foreign exchange
Nine months ending October 2, 2021
The impact of foreign exchange (1)
Percentage change in income excluding foreign exchange
Three months ending October 2, 2021
The impact of foreign exchange (1)
Percentage change in gross profit
Percentage change in gross profit excluding foreign exchange
Nine months ending October 2, 2021
The impact of foreign exchange (1)
Percentage change in gross profit
Percentage change in gross profit excluding foreign exchange
(a) The exchange effect is the difference between the current income and the gross profit converted using the average exchange rate of the current period minus the current income and the gross profit converted using the average exchange rate of the previous period.
Supplementary Information-Non-GAAP-Earnings Before Interest, Taxes, Depreciation and Amortization
(In millions of U.S. dollars, excluding percentage amounts)
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End of nine months
Net income (loss) from continuing operations
Acquisition and integration costs (a)
Goodwill and intangible asset impairment expenses (d)
Foreign exchange and other losses (gains), net (e)
Disposal of loss of real property, plant and equipment, net (f)
Long-term debt settlement loss (g)
Proceeds from sale of business (h)
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Position in the consolidated operation report
(a) Acquisition and integration costs
Sales, general and administrative expenses
Sales, general and administrative expenses
(d) Goodwill and intangible assets impairment charges
Goodwill and provision for impairment of intangible assets
(e) Foreign exchange and other losses (gains), net
(f) Disposal of loss of real property, plant and equipment, net
Disposal of loss of real property, plant and equipment, net
(g) Long-term debt settlement losses
(h) Proceeds from sale of business
Sales, general and administrative expenses
Supplementary Information-Non-GAAP-Free Cash Flow and Adjusted Free Cash Flow
(One million U.S. dollars)
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Net cash provided by continuing operations from operating activities
Less: increase real estate, plant and equipment
Acquisition and integration cash costs
Deferred payroll tax related cash costs-government plan
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Net cash provided by continuing operations from operating activities
Less: increase real estate, plant and equipment
Acquisition and integration cash costs
Transaction cash cost paid on behalf of the acquired party
Deferred payroll tax related cash costs-government plan
Supplementary information-Non-GAAP adjusted net income and adjusted earnings per share
(In millions of U.S. dollars, excluding the amount of shares)
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End of nine months
Net income (loss) from continuing operations (as reported)
Amortization of customer list
Goodwill and intangible asset impairment charges
Foreign exchange and other (gain) losses, net
Long-term debt settlement losses
Proceeds from sale of business
Tax impact of adjustment (a)
Adjusted net income from continuing operations
Earnings per share (as reported)
Net income (loss) from continuing operations
Weighted average issued common shares (in thousands)
Adjusted earnings per share (non-GAAP)
Adjusted net income from continuing operations (Non-GAAP)
Diluted weighted average common shares issued (in thousands) (non-GAAP) (b)
(a) The tax impact of adjusted net income is expected based on the analysis of the statutory tax treatment and applicable tax rate of the jurisdiction where the pre-tax adjustment items and the resulting tax benefits (if any) are realized. Due to the history of operating losses or other factors that lead to valuation allowances related to deferred tax assets, we do not expect the reduced tax rate or 0% tax rate to be applied to jurisdictions that will not achieve tax incentives.
(b) The GAAP diluted weighted average issued common stock was used during the three months ended October 2, 2021 and September 26, 2020. The nine months ending October 2, 2021 and September 26, 2020 include the impact of 1,734 and 1,280 diluted securities, respectively. Due to the net losses from continuing operations reported during these periods, these diluted securities are not included in the GAAP diluted weighted average outstanding common stock.
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