Primo Water Corporation Announces Strong Second Quarter 2022 Results and Raises Full Year Guidance
Aug 11, 2022
Company issues third quarter guidance and raises full year revenue and Adjusted EBITDA guidance
(Unless stated otherwise, all second quarter 2022 comparisons are relative to the second quarter of 2021; all information is in
SECOND QUARTER HIGHLIGHTS
- Revenue increased 9% to
$571 million compared to$526 million (increased 16% excluding the exit of the single-use bottled water retail business inNorth America and the impact of foreign exchange). - Reported net loss and net loss per diluted share were
$23 million and$0.14 , respectively, compared to reported net loss and net loss per diluted share of$8 million and$0.05 , respectively. Adjusted net income and adjusted net income per diluted share were$33 million and$0.21 , respectively, compared to adjusted net income and adjusted net income per diluted share of$28 million and$0.17 , respectively. - Adjusted EBITDA increased 9% to
$108 million compared to$100 million and Adjusted EBITDA margin was maintained at 18.9% for the quarter. - Company increases full year 2022 revenue growth expectation to between 12% to 14%, adjusted for the exit of the single-use bottled water retail business in
North America , and increases full year 2022 Adjusted EBITDA outlook to between$415 million and$425 million .
For the Three Months Ended | ||||||
(in millions of | Y/Y Change | |||||
Revenue, net | $ 571.4 | $ 526.1 | 9 % | |||
Net loss | $ (22.5) | $ (8.3) | $ (14.2) | |||
Net loss per diluted share | $ (0.14) | $ (0.05) | $ (0.09) | |||
Adjusted net income | $ 33.3 | $ 27.5 | $ 5.8 | |||
Adjusted net income per diluted share | $ 0.21 | $ 0.17 | $ 0.04 | |||
Adjusted EBITDA | $ 108.0 | $ 99.5 | 9 % | |||
Adjusted EBITDA margin % | 18.9 % | 18.9 % | 0bps |
“I am very pleased with our revenue and adjusted EBITDA growth in the second quarter, accentuating a solid first-half performance that puts us on pace to exceed our previous full-year 2022 targets. Our results were driven by improved pricing, volume, and customer growth. Our pricing actions and operational performance give us the confidence to increase our 2022 outlook to 12% to 14% revenue growth (adjusted for the exit of the single-use bottled water retail business in
“We are pleased that Primo’s cash flow and balance sheet enable us to simultaneously return value to shareholders through regular quarterly dividends, as well as an opportunistic share repurchase program of
OUTLOOK
Primo is targeting the following results from continuing operations for the third quarter and full year 2022:
Q3 2022 | FY 2022 | |||
Range | Range | |||
($ in millions) | Low | High | Low | High |
Revenue | 12%1 | 14%1 | ||
Adjusted EBITDA | ||||
Cash Taxes | ~ | |||
Interest | ~ | |||
Cap-Ex | ~ |
1Adjusted for the exit of |
SECOND QUARTER 2022 RESULTS CONFERENCE CALL
Primo will host a conference call, to be simultaneously webcast, on
International: (416) 764-8659
Conference ID: 75198085
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.
SECOND QUARTER GLOBAL PERFORMANCE
- Revenue increased 9% to
$571 million compared to$526 million (increased by 16% excluding the exit of the single-use bottled water retail business inNorth America and the impact of foreign exchange). The increase was driven by customer growth, increased demand across our customer base, price increases and the benefit from tuck-in acquisitions, partially offset by the exit from the single-use bottled water retail business inNorth America and foreign exchange headwinds. Revenue growth by channel is tabulated below:
For the Three Months Ended | ||||||||
(in millions of | Change | %Change | ||||||
Revenue, net | ||||||||
Water Direct/Water Exchange | $ 386.5 | $ 323.0 | $ 63.5 | 20 % | ||||
Water Refill/Water Filtration | 56.2 | 53.1 | 3.1 | 6 % | ||||
Other Water | 44.1 | 64.6 | (20.5) | -32 % | ||||
Water Dispensers | 18.5 | 17.6 | 0.9 | 5 % | ||||
Other | 66.1 | 67.8 | (1.7) | -3 % | ||||
Revenue, net as reported | $ 571.4 | $ 526.1 | $ 45.3 | 9 % | ||||
Less: Single-use retail bottled water business in | (14.4) | (36.5) | 22.1 | -61 % | ||||
Adjusted revenue | $ 557.0 | $ 489.6 | $ 67.4 | 14 % | ||||
Foreign exchange impact | 13.2 | – | 13.2 | n/a | ||||
Adjusted revenue excluding foreign | $ 570.2 | $ 489.6 | $ 80.6 | 16 % |
- Gross profit increased 12% to
$332 million compared to$297 million . Gross margin grew by 170 basis points to 58.2% compared to 56.5%, driven by price increases, Water Direct volume growth and the exit of the single-use retail bottled water business inNorth America , partially offset by foreign exchange headwinds. - SG&A expenses increased 12% to
$292 million compared to$260 million . The increase was driven by higher selling and operating costs supporting the volume and revenue growth of the business as well as general inflationary cost increases. - Reported net loss and net loss per diluted share were
$23 million and$0.14 , respectively, compared to reported net loss and net loss per diluted share of$8 million and$0.05 , respectively. Adjusted net income and adjusted net income per diluted share were$33 million and$0.21 , respectively, compared to adjusted net income and adjusted net income per diluted share of$28 million and$0.17 , respectively. - Adjusted EBITDA increased 9% to
$108 million compared to$100 million , driven primarily by price increases, increased demand for products and services across our customer base and the exit of the single-use bottled water retail business inNorth America . Adjusted EBITDA margin remained at 18.9% for the quarter. - Net cash provided by operating activities of
$67 million , less$49 million of capital expenditures and additions to intangible assets, resulted in$18 million of free cash flow, or$21 million of adjusted free cash flow (adjusting for the items set forth on Exhibit 7), compared to adjusted free cash flow of$26 million in the prior year.
SECOND QUARTER REPORTING SEGMENT PERFORMANCE
During the second quarter the Company realigned certain of its businesses previously included in the Rest of World segment (now renamed “Europe”) between the
- Revenue increased 10% to
$437 million (increased by 17% excluding the single-use bottled water retail business inNorth America ) driven by customer growth, price increases and increased demand for products and services from residential and business-to-business customers, partially offset by the exit from the single-use bottled water retail business in North America.
For the Three Months Ended | ||||||||
(in millions of | Change | %Change | ||||||
Revenue, net | ||||||||
Water Direct/Water Exchange | $ 321.1 | $ 264.9 | $ 56.2 | 21 % | ||||
Water Refill/Water Filtration | 47.3 | 45.1 | 2.2 | 5 % | ||||
Other Water | 22.2 | 42.2 | (20.0) | -47 % | ||||
Water Dispensers | 18.5 | 17.6 | 0.9 | 5 % | ||||
Other | 27.6 | 26.9 | 0.7 | 3 % | ||||
Revenue, net as reported | $ 436.7 | $ 396.7 | $ 40.0 | 10 % | ||||
Less: Single-use retail bottled water business in | (14.4) | (36.5) | 22.1 | -61 % | ||||
Adjusted revenue | $ 422.3 | $ 360.2 | $ 62.1 | 17 % | ||||
Foreign exchange impact | 0.7 | – | 0.7 | n/a | ||||
Adjusted revenue excluding foreign | $ 423.0 | $ 360.2 | $ 62.8 | 17 % |
- Revenue increased 9% to
$70 million (increased 22% excluding the impact of foreign exchange) driven by increased demand for our products and services from residential and business-to-business customers and tuck-in acquisitions, partially offset by foreign exchange impact.
For the Three Months Ended | ||||||||
(in millions of | Change | %Change | ||||||
Revenue, net | ||||||||
Water Direct/Water Exchange | $ 53.7 | $ 47.7 | $ 6.0 | 13 % | ||||
Water Refill/Water Filtration | 8.2 | 7.8 | 0.4 | 5 % | ||||
Other Water | 0.4 | 0.4 | – | 0 % | ||||
Water Dispensers | – | – | – | – | ||||
Other | 7.6 | 8.4 | (0.8) | -10 % | ||||
Revenue, net as reported | $ 69.9 | $ 64.3 | $ 5.6 | 9 % | ||||
Foreign exchange impact | 8.6 | – | 8.6 | n/a | ||||
Revenue excluding foreign exchange impact | $ 78.5 | $ 64.3 | $ 14.2 | 22 % |
ABOUT
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
Primo is headquartered in
Non-GAAP Measures
To supplement its reporting of financial measures determined in accordance with
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 related to the amount of shares that may be repurchased under the share repurchase program, future financial and operating trends and results (including Primo’s outlook on third quarter and full year 2022 revenue and Adjusted EBITDA and Primo’s multi-year growth algorithm), 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: the impact of the spread of COVID-19, related government actions and Primo’s strategy in response thereto on our business, 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 its operations successfully; currency fluctuations that adversely affect the exchange between currencies including the
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
EXHIBIT 1 | |||||||
CONSOLIDATED STATEMENTS OF OPERATIONS | |||||||
(in millions of | |||||||
Unaudited | |||||||
For the Three Months Ended | For the Six Months Ended | ||||||
Revenue, net | $ 571.4 | $ 526.1 | $ 1,097.5 | $ 1,004.5 | |||
Cost of sales | 239.1 | 228.9 | 465.6 | 442.8 | |||
Gross profit | 332.3 | 297.2 | 631.9 | 561.7 | |||
Selling, general and administrative expenses | 291.6 | 259.9 | 569.9 | 507.9 | |||
Loss on disposal of property, plant and equipment, net | 0.1 | 3.3 | 1.8 | 5.4 | |||
Acquisition and integration expenses | 4.9 | 2.4 | 9.2 | 3.7 | |||
Impairment charges | 29.1 | — | 29.1 | — | |||
Operating income | 6.6 | 31.6 | 21.9 | 44.7 | |||
Other expense, net | 10.7 | 25.6 | 13.4 | 25.2 | |||
Interest expense, net | 17.0 | 17.7 | 33.9 | 36.7 | |||
Loss before income taxes | (21.1) | (11.7) | (25.4) | (17.2) | |||
Income tax expense (benefit) | 1.4 | (3.4) | 3.8 | 1.3 | |||
Net Loss | $ (22.5) | $ (8.3) | $ (29.2) | $ (18.5) | |||
Net loss per common share | |||||||
Basic | $ (0.14) | $ (0.05) | $ (0.18) | $ (0.11) | |||
Diluted | $ (0.14) | $ (0.05) | $ (0.18) | $ (0.11) | |||
Weighted average common shares outstanding (in thousands) | |||||||
Basic | 161,149 | 161,561 | 161,038 | 161,097 | |||
Diluted | 161,149 | 161,561 | 161,038 | 161,097 | |||
EXHIBIT 2 | |||
CONSOLIDATED BALANCE SHEETS | |||
(in millions of | |||
Unaudited | |||
ASSETS | |||
Current assets | |||
Cash and cash equivalents | $ 98.5 | $ 128.4 | |
Accounts receivable, net of allowance of | 283.6 | 261.6 | |
Inventories | 109.7 | 94.6 | |
Prepaid expenses and other current assets | 63.5 | 25.2 | |
Total current assets | 555.3 | 509.8 | |
Property, plant and equipment, net | 678.6 | 718.1 | |
Operating lease right-of-use-assets | 168.2 | 177.4 | |
1,285.6 | 1,321.4 | ||
Intangible assets, net | 912.2 | 969.8 | |
Other long-term assets, net | 29.4 | 26.9 | |
Total assets | $ 3,629.3 | $ 3,723.4 | |
LIABILITIES AND EQUITY | |||
Current liabilities | |||
Short-term borrowings | $ 235.2 | $ 222.1 | |
Current maturities of long-term debt | 17.1 | 17.7 | |
Accounts payable and accrued liabilities | 430.2 | 437.7 | |
Current operating lease obligations | 32.5 | 32.3 | |
Total current liabilities | 715.0 | 709.8 | |
Long-term debt | 1,274.5 | 1,321.1 | |
Operating lease obligations | 139.4 | 148.7 | |
Deferred tax liabilities | 157.9 | 158.8 | |
Other long-term liabilities | 65.7 | 64.9 | |
Total liabilities | 2,352.5 | 2,403.3 | |
Shareholders’ Equity | |||
Common shares, no par value -161,209,111 ( | 1,292.6 | 1,286.9 | |
Additional paid-in-capital | 87.3 | 85.9 | |
(Accumulated deficit) retained earnings | (35.7) | 16.4 | |
Accumulated other comprehensive loss | (67.4) | (69.1) | |
Total shareholders’ equity | 1,276.8 | 1,320.1 | |
Total liabilities and shareholders’ equity | $ 3,629.3 | $ 3,723.4 |
EXHIBIT 3 | |||||||
CONSOLIDATED STATEMENTS OF CASH FLOWS | |||||||
(in millions of | |||||||
Unaudited | |||||||
For the Three Months Ended | For the Six Months Ended | ||||||
Cash flows from operating activities: | |||||||
Net Loss | $ (22.5) | $ (8.3) | $ (29.2) | $ (18.5) | |||
Adjustments to reconcile net loss to cash flows from operating activities of continuing operations: | |||||||
Depreciation and amortization | 60.2 | 52.0 | 121.4 | 105.1 | |||
Amortization of financing fees | 0.8 | 0.9 | 1.7 | 1.7 | |||
Share-based compensation expense | 4.2 | 3.8 | 7.5 | 6.2 | |||
(Benefit) provision for deferred income taxes | (0.1) | (4.2) | 1.5 | (0.6) | |||
Gain on sale of business | — | — | (0.4) | — | |||
Loss on extinguishment of debt | — | 27.2 | — | 27.2 | |||
Impairment charges | 29.1 | — | 29.1 | — | |||
Loss on disposal of property, plant and equipment, net | 0.1 | 3.3 | 1.8 | 5.4 | |||
Other non-cash items | 11.0 | (1.2) | 13.1 | (1.0) | |||
Change in operating assets and liabilities, net of acquisitions: | |||||||
Accounts receivable | (21.3) | (52.2) | (33.2) | (61.9) | |||
Inventories | (8.0) | (6.3) | (19.1) | (3.1) | |||
Prepaid expenses and other current assets | 1.0 | (2.0) | (5.2) | (4.2) | |||
Other assets | 0.7 | 0.2 | — | 0.3 | |||
Accounts payable and accrued liabilities and other liabilities | 11.5 | 46.4 | 1.3 | 31.7 | |||
Net cash provided by operating activities from continuing operations | 66.7 | 59.6 | 90.3 | 88.3 | |||
Cash flows from investing activities of continuing operations: | |||||||
Acquisitions, net of cash received | (7.1) | (0.3) | (7.4) | (0.3) | |||
Additions to property, plant and equipment | (46.6) | (34.8) | (85.2) | (61.8) | |||
Additions to intangible assets | (2.4) | (1.8) | (4.9) | (4.1) | |||
Proceeds from sale of property, plant and equipment | 0.6 | 0.6 | 1.0 | 0.7 | |||
Other investing activities | (0.1) | — | 0.4 | — | |||
Net cash used in investing activities from continuing operations | (55.6) | (36.3) | (96.1) | (65.5) | |||
Cash flows from financing activities of continuing operations: | |||||||
Payments of long-term debt | (5.2) | (753.6) | (9.7) | (757.0) | |||
Issuance of long-term debt | — | 750.0 | — | 750.0 | |||
Proceeds from short-term borrowings | 10.0 | 45.0 | 10.0 | 45.0 | |||
Payments on short-term borrowings | — | (10.0) | — | (10.0) | |||
Premiums and costs paid upon extinguishment of long-term debt | — | (20.6) | — | (20.6) | |||
Issuance of common shares | 0.4 | 14.7 | 1.6 | 15.7 | |||
Common shares repurchased and canceled | (0.2) | (13.2) | (2.0) | (16.3) | |||
Financing fees | — | (10.6) | — | (11.3) | |||
Dividends paid to common shareholders | (11.6) | (9.9) | (22.9) | (19.6) | |||
Payment of deferred consideration for acquisitions | — | (0.1) | (0.1) | (1.8) | |||
Other financing activities | 0.7 | (0.9) | 4.6 | 4.3 | |||
Net cash used in financing activities from continuing operations | (5.9) | (9.2) | (18.5) | (21.6) | |||
Cash flows from discontinued operations: | |||||||
Operating activities of discontinued operations | — | (2.6) | — | (1.8) | |||
Investing activities of discontinued operations | — | — | — | — | |||
Financing activities of discontinued operations | — | — | — | — | |||
Net cash used in discontinued operations | — | (2.6) | — | (1.8) | |||
Effect of exchange rate changes on cash | (1.0) | 0.5 | (1.9) | (0.3) | |||
Net increase (decrease) in cash, cash equivalents and restricted cash | 4.2 | 12.0 | (26.2) | (0.9) | |||
Cash and cash equivalents and restricted cash, beginning of period | 98.0 | 102.2 | 128.4 | 115.1 | |||
Cash and cash equivalents and restricted cash, end of period | $ 102.2 | $ 114.2 | $ 102.2 | $ 114.2 | |||
Cash and cash equivalents and restricted cash: | |||||||
Cash and cash equivalents | $ 98.5 | $ 114.2 | $ 98.5 | $ 114.2 | |||
Cash included in prepaid expenses and other current assets | 3.7 | — | 3.7 | — | |||
Total | $ 102.2 | $ 114.2 | $ 102.2 | $ 114.2 | |||
EXHIBIT 4 | |||||||||||
SEGMENT INFORMATION | |||||||||||
(in millions of | |||||||||||
Unaudited | |||||||||||
For the Three Months Ended | |||||||||||
Other | Eliminations | Total | |||||||||
Revenue, net | |||||||||||
Water Direct/Water Exchange | $ 321.1 | $ 53.7 | $ 11.7 | $ — | $ 386.5 | ||||||
Water Refill/Water Filtration | 47.3 | 8.2 | 0.7 | — | 56.2 | ||||||
Other Water | 22.2 | 0.4 | 21.5 | — | 44.1 | ||||||
Water Dispensers | 18.5 | — | — | — | 18.5 | ||||||
Other | 27.6 | 7.6 | 30.9 | — | 66.1 | ||||||
Total | $ 436.7 | $ 69.9 | $ 64.8 | $ — | $ 571.4 | ||||||
Gross profit | $ 260.4 | $ 46.8 | $ 25.1 | $ — | $ 332.3 | ||||||
Gross margin % | 59.6 % | 67.0 % | 38.7 % | — % | 58.2 % | ||||||
Selling, general and administrative | $ 208.6 | $ 45.9 | $ 37.1 | $ — | $ 291.6 | ||||||
SG&A % of revenue | 47.8 % | 65.7 % | 57.3 % | — % | 51.0 % | ||||||
Operating income (loss) | $ 48.3 | $ (29.1) | $ (12.6) | $ — | $ 6.6 | ||||||
Depreciation and amortization | $ 44.3 | $ 10.1 | $ 5.8 | $ — | $ 60.2 | ||||||
For the Three Months Ended | |||||||||||
Other | Eliminations | Total | |||||||||
Revenue, net | |||||||||||
Water Direct/Water Exchange | $ 264.9 | $ 47.7 | $ 10.4 | $ — | $ 323.0 | ||||||
Water Refill/Water Filtration | 45.1 | 7.8 | 0.2 | — | 53.1 | ||||||
Other Water | 42.2 | 0.4 | 22.0 | — | 64.6 | ||||||
Water Dispensers | 17.6 | — | — | — | 17.6 | ||||||
Other | 26.9 | 8.4 | 32.8 | (0.3) | 67.8 | ||||||
Total | $ 396.7 | $ 64.3 | $ 65.4 | $ (0.3) | $ 526.1 | ||||||
Gross profit | $ 225.6 | $ 44.2 | $ 27.4 | $ — | $ 297.2 | ||||||
Gross margin % | 56.9 % | 68.7 % | 41.9 % | — % | 56.5 % | ||||||
Selling, general and administrative | $ 180.6 | $ 46.0 | $ 33.3 | $ — | $ 259.9 | ||||||
SG&A % of revenue | 45.5 % | 71.5 % | 50.9 % | — % | 49.4 % | ||||||
Operating income (loss) | $ 40.1 | $ (1.6) | $ (6.9) | $ — | $ 31.6 | ||||||
Depreciation and amortization | $ 36.5 | $ 9.9 | $ 5.6 | $ — | $ 52.0 | ||||||
For the Six Months Ended | |||||||||||
Other | Eliminations | Total | |||||||||
Revenue, net | |||||||||||
Water Direct/Water Exchange | $ 599.4 | $ 101.9 | $ 22.5 | $ — | $ 723.8 | ||||||
Water Refill/Water Filtration | 89.5 | 16.4 | 1.2 | — | 107.1 | ||||||
Other Water | 56.2 | 0.8 | 37.5 | — | 94.5 | ||||||
Water Dispensers | 32.7 | — | — | — | 32.7 | ||||||
Other | 56.0 | 15.1 | 68.3 | — | 139.4 | ||||||
Total | $ 833.8 | $ 134.2 | $ 129.5 | $ — | $ 1,097.5 | ||||||
Gross profit | $ 492.4 | $ 90.6 | $ 48.9 | $ — | $ 631.9 | ||||||
Gross Margin % | 59.1 % | 67.5 % | 37.8 % | — % | 57.6 % | ||||||
Selling, general and administrative expenses | $ 408.3 | $ 92.1 | $ 69.5 | $ — | $ 569.9 | ||||||
SG&A % of Revenue | 49.0 % | 68.6 % | 53.7 % | — % | 51.9 % | ||||||
Operating income (loss) | $ 76.6 | $ (32.7) | $ (22.0) | $ — | $ 21.9 | ||||||
Depreciation and amortization | $ 89.6 | $ 19.9 | $ 11.9 | $ — | $ 121.4 | ||||||
For the Six Months Ended | |||||||||||
Other | Eliminations | Total | |||||||||
Revenue, net | |||||||||||
Water Direct/Water Exchange | $ 503.7 | $ 88.0 | $ 18.9 | $ — | $ 610.6 | ||||||
Water Refill/Water Filtration | 90.2 | 15.7 | 0.2 | — | 106.1 | ||||||
Other Water | 83.1 | 0.6 | 37.2 | — | 120.9 | ||||||
Water Dispensers | 32.6 | — | — | — | 32.6 | ||||||
Other | 52.6 | 15.6 | 67.0 | (0.9) | 134.3 | ||||||
Total | $ 762.2 | $ 119.9 | $ 123.3 | $ (0.9) | $ 1,004.5 | ||||||
Gross profit | $ 430.1 | $ 82.2 | $ 49.4 | $ — | $ 561.7 | ||||||
Gross Margin % | 56.4 % | 68.6 % | 40.1 % | — % | 55.9 % | ||||||
Selling, general and administrative expenses | $ 356.4 | $ 87.1 | $ 64.4 | $ — | $ 507.9 | ||||||
SG&A % of Revenue | 46.8 % | 72.6 % | 52.2 % | — % | 50.6 % | ||||||
Operating income (loss) | $ 66.2 | $ (5.0) | $ (16.5) | $ — | $ 44.7 | ||||||
Depreciation and amortization | $ 74.3 | $ 19.6 | $ 11.2 | $ — | $ 105.1 | ||||||
EXHIBIT 5 | ||||||||||
SUPPLEMENTARY INFORMATION – NON-GAAP – ANALYSIS OF REVENUE AND GROSS PROFIT BY REPORTING SEGMENT | ||||||||||
(in millions of | ||||||||||
Unaudited | ||||||||||
For the Three Months Ended | ||||||||||
Other | Eliminations | Primo | ||||||||
Change in revenue | $ 40.0 | $ 5.6 | $ (0.6) | $ 0.3 | $ 45.3 | |||||
Impact of foreign exchange (a) | $ 0.7 | $ 8.6 | $ 3.9 | $ — | $ 13.2 | |||||
Change excluding foreign exchange | $ 40.7 | $ 14.2 | $ 3.3 | $ 0.3 | $ 58.5 | |||||
Percentage change in revenue | 10.1 % | 8.7 % | (0.9) % | (100.0) % | 8.6 % | |||||
Percentage change in revenue excluding foreign exchange | 10.3 % | 22.1 % | 5.0 % | (100.0) % | 11.1 % | |||||
For the Six Months Ended | ||||||||||
Other | Eliminations | Primo | ||||||||
Change in revenue | $ 71.6 | $ 14.3 | $ 6.2 | $ 0.9 | $ 93.0 | |||||
Impact of foreign exchange (a) | $ 0.7 | $ 13.1 | $ 4.0 | $ — | $ 17.8 | |||||
Change excluding foreign exchange | $ 72.3 | $ 27.4 | $ 10.2 | $ 0.9 | $ 110.8 | |||||
Percentage change in revenue | 9.4 % | 11.9 % | 5.0 % | (100.0) % | 9.3 % | |||||
Percentage change in revenue excluding foreign exchange | 9.5 % | 22.9 % | 8.3 % | (100.0) % | 11.0 % | |||||
For the Three Months Ended | ||||||||||
Other | Eliminations | Primo | ||||||||
Change in gross profit | $ 34.8 | $ 2.6 | $ (2.3) | $ — | $ 35.1 | |||||
Impact of foreign exchange (a) | $ 0.4 | $ 5.9 | $ 0.7 | $ — | $ 7.0 | |||||
Change excluding foreign exchange | $ 35.2 | $ 8.5 | $ (1.6) | $ — | $ 42.1 | |||||
Percentage change in gross profit | 15.4 % | 5.9 % | (8.4) % | — % | 11.8 % | |||||
Percentage change in gross profit excluding foreign exchange | 15.6 % | 19.2 % | (5.8) % | — % | 14.2 % | |||||
For the Six Months Ended | ||||||||||
Other | Eliminations | Primo | ||||||||
Change in gross profit | $ 62.3 | $ 8.4 | $ (0.5) | $ — | $ 70.2 | |||||
Impact of foreign exchange (a) | $ 0.4 | $ 9.2 | $ 0.2 | $ — | $ 9.8 | |||||
Change excluding foreign exchange | $ 62.7 | $ 17.6 | $ (0.3) | $ — | $ 80.0 | |||||
Percentage change in gross profit | 14.5 % | 10.2 % | (1.0) % | — % | 12.5 % | |||||
Percentage change in gross profit excluding foreign exchange | 14.6 % | 21.4 % | (0.6) % | — % | 14.2 % | |||||
(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. |
EXHIBIT 6 | |||||||
SUPPLEMENTARY INFORMATION – NON-GAAP – EARNINGS BEFORE INTEREST, TAXES, DEPRECIATION & AMORTIZATION | |||||||
(EBITDA) | |||||||
(in millions of | |||||||
Unaudited | |||||||
For the Three Months Ended | For the Six Months Ended | ||||||
Net Loss | $ (22.5) | $ (8.3) | $ (29.2) | $ (18.5) | |||
Interest expense, net | 17.0 | 17.7 | 33.9 | 36.7 | |||
Income tax expense (benefit) | 1.4 | (3.4) | 3.8 | 1.3 | |||
Depreciation and amortization | 60.2 | 52.0 | 121.4 | 105.1 | |||
EBITDA | $ 56.1 | $ 58.0 | $ 129.9 | $ 124.6 | |||
Acquisition and integration costs (a) | 4.9 | 2.4 | 9.2 | 3.7 | |||
Share-based compensation costs (b) | 4.2 | 3.8 | 7.5 | 6.2 | |||
COVID-19 costs (c) | — | 0.5 | — | 1.2 | |||
Impairment charges (d) | 29.1 | — | 29.1 | — | |||
Foreign exchange and other losses (gains), net (e) | 11.5 | (1.0) | 15.4 | (1.1) | |||
Loss on disposal of property, plant and equipment, net (f) | 0.1 | 3.3 | 1.8 | 5.4 | |||
Loss on extinguishment of long-term debt (g) | — | 27.2 | — | 27.2 | |||
Other adjustments, net (h) | 2.1 | 5.3 | 3.0 | 8.5 | |||
Adjusted EBITDA | $ 108.0 | $ 99.5 | $ 195.9 | $ 175.7 | |||
Revenue, net | $ 571.4 | $ 526.1 | $ 1,097.5 | $ 1,004.5 | |||
Adjusted EBITDA margin % | 18.9 % | 18.9 % | 17.8 % | 17.5 % | |||
For the Three Months | For the Six Months Ended | |||||||
Location in Consolidated | ||||||||
(Unaudited) | (Unaudited) | |||||||
(a) Acquisition and integration costs | Acquisition and integration | $ 4.9 | $ 2.4 | $ 9.2 | $ 3.7 | |||
(b) Share-based compensation costs | Selling, general and | 4.2 | 3.8 | 7.5 | 6.2 | |||
(c) COVID-19 costs | Selling, general and | — | 0.5 | — | 1.2 | |||
(d) Impairment charges | Impairment charges | 29.1 | — | 29.1 | — | |||
(e) Foreign exchange and other | Other expense, net | 11.5 | (1.0) | 15.4 | (1.1) | |||
(f) Loss on disposal of property, | Loss on disposal of property, | 0.1 | 3.3 | 1.8 | 5.4 | |||
(g) Loss on extinguishment of | Other expense, net | — | 27.2 | — | 27.2 | |||
(h) Other adjustments, net | Other expense, net | (0.4) | (0.2) | (1.7) | (0.5) | |||
Selling, general and | 2.5 | 5.5 | 4.7 | 9.0 |
EXHIBIT 7 | |||
SUPPLEMENTARY INFORMATION – NON-GAAP – FREE CASH FLOW AND ADJUSTED FREE CASH FLOW | |||
(in millions of | |||
Unaudited | |||
For the Three Months Ended | |||
Net cash provided by operating activities from continuing operations | $ 66.7 | $ 59.6 | |
Less: Additions to property, plant, and equipment | (46.6) | (34.8) | |
Less: Additions to intangible assets (a) | (2.4) | (1.8) | |
Free Cash Flow | $ 17.7 | $ 23.0 | |
Acquisition and integration cash costs | 3.1 | 2.4 | |
COVID-19 related cash costs | — | 0.5 | |
Deferred payroll tax related cash costs – government programs | — | 0.5 | |
Adjusted Free Cash Flow | $ 20.8 | $ 26.4 | |
For the Six Months Ended | |||
Net cash provided by operating activities from continuing operations | $ 90.3 | $ 88.3 | |
Less: Additions to property, plant, and equipment | (85.2) | (61.8) | |
Less: Additions to intangible assets (a) | (4.9) | (4.1) | |
Free Cash Flow | $ 0.2 | $ 22.4 | |
Acquisition and integration cash costs | 8.1 | 7.3 | |
COVID-19 related cash costs | — | 1.5 | |
Deferred payroll tax related cash costs – government programs | — | 0.9 | |
Adjusted Free Cash Flow | $ 8.3 | $ 32.1 | |
a) Prior period has been recast to include additions to intangible assets | |||
| EXHIBIT 8 | ||||||
SUPPLEMENTARY INFORMATION-NON-GAAP-ADJUSTED NET INCOME AND ADJUSTED EPS | |||||||
(in millions of | |||||||
Unaudited | |||||||
For the Three Months Ended | For the Six Months Ended | ||||||
Net loss (as reported) | $ (22.5) | $ (8.3) | $ (29.2) | $ (18.5) | |||
Adjustments: | |||||||
Amortization expense of customer lists | 12.1 | 12.5 | 25.0 | 24.7 | |||
Acquisition and integration costs | 4.9 | 2.4 | 9.2 | 3.7 | |||
Share-based compensation costs | 4.2 | 3.8 | 7.5 | 6.2 | |||
COVID-19 costs | — | 0.5 | — | 1.2 | |||
Impairment charges | 29.1 | — | 29.1 | — | |||
Foreign exchange and other losses (gains), net | 11.5 | (1.0) | 15.4 | (1.1) | |||
Loss on extinguishment of long-term debt | — | 27.2 | — | 27.2 | |||
Other adjustments, net | 2.1 | 5.3 | 3.0 | 8.5 | |||
Tax impact of adjustments (a) | (8.1) | (14.9) | (12.8) | (15.1) | |||
Adjusted net income | $ 33.3 | $ 27.5 | $ 47.2 | $ 36.8 | |||
Earnings Per Share (as reported) | |||||||
Net loss | $ (22.5) | $ (8.3) | $ (29.2) | $ (18.5) | |||
Basic EPS | $ (0.14) | $ (0.05) | $ (0.18) | $ (0.11) | |||
Diluted EPS | $ (0.14) | $ (0.05) | $ (0.18) | $ (0.11) | |||
Weighted average common shares outstanding (in thousands) | |||||||
Basic | 161,149 | 161,561 | 161,038 | 161,097 | |||
Diluted | 161,149 | 161,561 | 161,038 | 161,097 | |||
Adjusted Earnings Per Share (Non-GAAP) | |||||||
Adjusted net income (Non-GAAP) | $ 33.3 | $ 27.5 | $ 47.2 | $ 36.8 | |||
Adjusted diluted EPS (Non-GAAP) | $ 0.21 | $ 0.17 | $ 0.29 | $ 0.23 | |||
Diluted weighted average common shares outstanding (in thousands) (Non-GAAP) (b) | 161,894 | 163,097 | 161,934 | 162,819 |
(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 745 and 896 for the three and six months ended |
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