Primo Water Corporation, a leading provider of sustainable drinking water solutions in North America and Europe, announced its results for the second quarter ending July 2, 2022.
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 in North 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.
Tom Harrington, Primo's chief executive officer, stated in the announcement, "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 North America) and adjusted EBITDA to between $415 million and $425 million dollars, despite a challenging Euro devaluation, unprecedented inflationary environment and the exit of our business in Russia. As we continue to transform and reshape Primo, we are a fundamentally stronger business than ever before. Our strategy is working as evidenced by our first half 2022 performance and we remain confident in our ability to achieve our long-term 2024 outlook of high single-digit organic revenue growth with adjusted EBITDA approaching $525 million dollars.
"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 $100 million dollars, while at the same time continuing to invest in internal and external opportunities that will further strengthen our operations and drive long-term growth," added Harrington.
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 in North America and the impact of foreign exchange). The increase was driven by customer growth, increased demand across customer base, price increases and the benefit from tuck-in acquisitions, partially offset by the exit from the single-use bottled water retail business in North America and foreign exchange headwinds.
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 in North 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 customer base and the exit of the single-use bottled water retail business in North America. Adjusted EBITDA margin remained at 18.9% for the quarter.
Second-quarter reporting segment performance
North America
Revenue increased 10% to $437 million (increased by 17% excluding the single-use bottled water retail business in North 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.
(Unless stated otherwise, all second quarter 2022 comparisons are relative to the second quarter of 2021; all information is in U.S. dollars.) Find the full report here.
