Primo Water Corp., a provider of multi-gallon purified bottled water, self-serve filtered drinking water and water dispensers sold through major retailers throughout the U.S. and Canada, today announced financial results for the second quarter ended June 30, 2011.
Business highlights include:
- 1,300 installations during the second quarter, resulting in 15,900 locations for the Water segment;
- Record second quarter sales increased over 70 percent to $20.7 million compared to the prior year;
- Completed branding initiative for appliances, with all appliances to be marketed under the "Primo" brand;
- Introduced Primo "Flavor Station™" line of carbonating appliances with related CO2 and flavors for 2011 holiday season distribution;
- Announced Primo Flavor Station 100 that will retail for less than $100 and Flavor Station 500 that will retail for less than $300;
- Announced direct to consumer marketing campaign to sell Primo flavor stations and water dispensers;
- Added chief marketing officer to the executive management team to support entry into the carbonated beverage category.
Primo continued its retail rollout strategy with 1,300 locations installed in the second quarter of 2011, for a total of 3,300 installations year-to-date, or an increase of 26 percent from the number of locations at the end of 2010. Most of the locations added in the quarter were in the large mass merchant and office channels of trade. The company believes the office channel represents a significant opportunity, particularly in light of the planned rollout of the company's new commercial combination coffee and water dispenser appliance in the fourth quarter of 2011. Water services were offered in the U.S. and Canada at approximately 15,900 retail locations as of June 30, 2011.
"We are extremely pleased with our ability to execute on our location growth plan, which we believe will lead to long-term revenue growth," commented Billy D. Prim, Primo Water's president and chief executive officer in a prepared statement. "Our team continues to make Primo's industry leading water and appliances conveniently accessible to consumers where they shop."
The company also installed its first "Primo Pure Ice" locations during the quarter. The company plans to test approximately 100 locations in 2011 with a major retail customer. The launch of "Primo Pure Ice" provides the company with a complementary product to offer the consumer and allows it to further leverage its distribution capabilities and retail customer base for incremental sales over the long-term. The ice product is not expected to have a material impact on the company's results in 2011.
Total net sales increased 70 percent to $20.7 million from $12.2 million in the second quarter of 2010. This increase was primarily due to significant growth in the company's water segment.
Water segment net sales for the second quarter of 2011 increased 115 percent to $14.8 million compared to $6.9 million in the second quarter of 2010. Sales from the water segment consist of sales of multi-gallon purified bottled water (exchange services) and self-serve filtered drinking water vending services (refill services). The sales improvement was primarily due to the acquisition of the refill business in November 2010 and a 23 percent increase in sales of exchange services. Exchange services same-store unit sales increased 2.5 percent in the second quarter of 2011 compared to the same period last year.
The company's water dispenser sales for the second quarter of 2011 increased 11 percent to $5.9 million compared to $5.3 million in the second quarter of 2010. The increase was due primarily to dispenser unit sales growth of 7 percent to end consumers at retail for the second quarter of 2011 compared to 2010.