PRMW - Earnings call transcript Q1 2020

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Welcome to Primo Water Corporation's First Quarter 2020 Earnings Conference Call. [Operator Instructions] This call will end no later than 11:00 A.M. Eastern Time. The call is being webcast live on Primo's website at www.primowatercorp.com and will be available for playback there, for two weeks.

This conference call contains forward-looking statements, including statements concerning the company's future financial and operations performance. company's considered the with this on Safe press and be disclaimers statements morning's Form should Form release in on filings contained Harbor the regulations. XX-Q statements and in quarterly with cautionary connection and earnings XX-K other These and Report securities reports Annual statements in except company duty to update The company's materially differ no could by from these law. forwarding undertakes statements expressly actual performance statements, required applicable and the these

discussed during is reconciliation call any company's of the financial measures section the in earlier GAAP A most Investor the with first released of measures on company's included the comparable morning announcement non-GAAP with the or website this Relations quarter at accordance earnings in www.primowatercorp.com.

over Primo's Alpha Coleman call to provider. I Ryan Investors service will IR, turn of Relations now the

Ryan Coleman

our Financial thank morning. accompanied Wells, Tom Harrington, And Good and Chief for Officer. Primo's by you Jay Today, virtually Officer; Executive Primo's Chief I'm call. joining

of conference discussions. a a As our have was at throughout www.primowatercorp.com included online deck this to you that part designed assist call, we

efforts and before performance, liquidity cost Tom ahead Q&A. first long-term start today's call ongoing our the the company, quarter discuss of and of financial actions the view half XXXX Jay will a and our expectations call provide our containment Then handing update an to consolidated the to response. impact are back pandemic business we on first on will taking with in Tom the

of March which the we continued be will discussing S&D. our acquired Within prepared S&D discontinued has And of Water legacy within for we as March, and the been our As February. business operations, beginning as which name, the status. well as assuming the the included Primo Primo At incorporate business exclude sold month a this of the we as Primo operations. Corporation, business result, reminder, as Coffee the our Tea at a Primo well will end classified remarks

to turn call me the let that, over Tom. With

Tom Harrington

distancing the would I customers. extending like all associates everyone. I wishes morning, to of shifts, and implemented from you. number good were social in And of sanitizers, Ryan. including customer of my a work centers. enhanced possible, – by care and guidelines, home to you, – Thank undertaken gloves, our safety everyone our provided options staggered and masks begin deep hope offered We've sincerely employee

international that implementing In the are are our ensure teams operating we've latest environments addition, safe secure and working from to created CDC operations our and crisis together updating team to WHO. the are members safety the management that in and who we and recommendations

continue our across teams our to their I to work safely efforts thank product our footprint. essential our result country we XX to teammates customers customers an a to across for cannot service work As our as provide entire enough operation.

And for we've remained but water our the Many of constant. things changed, has our our thing safe, water. world team. in continue is to to the one seen continued the desire we're proud of millions quality And of to drinking from deliver from gallons We've receive commitment customers that associates. have that high

results our of were of the a business March. month acquired from our one ahead contribution we quarter, that beginning Primo the first expectations, to that pleased at our Moving I'm including legacy

up operations EBITDA from year, adjusted was higher XX%. than and XX% continuing revenue consolidated last was Our

leverage our expansion. Excluding ability versus prior XX.X%, our adjusted and to point divested year, businesses, business' margin growth improvement pure-play was water margin basis into XXX of our a EBITDA representative

acquired sales first by of compared drove business experienced at the EBITDA across to forma XX% American consolidated in was on the in up U.S. the Solutions a and in strong adjusted increase performance, March, legacy business, XX% quarter led pro in revenue retail our revenue the adjusted this up Water business. increase Exchange Primo which business the Underlying our legacy In basis, excludes March. a significant and beginning market any Primo XXXX, from a increase XX% of Water contribution X% was the EBITDA North we

closures As and pandemic, broadly America. you customer might experienced the expect, locations commercial our European Water North of more Direct impacted than negatively in business earlier we where was by

represent Our Eden with increased approximately XX% overall benefit down division, X% tuck-ins, of with adjusted revenues, the in by QX. EBITDA was European revenue operations company of million while $X

and customer beginning cases rates of a increasing Our pay QX first performance in point compared better. off, to in investments year. prior expectation with in several XXX basis where America, And historically churn rate, the to in the low line dispensing in our achieved two we tracking a and experience months are was our with ongoing retention North resulting solid in improvement

in both efficiency EBITDA as on our well focus a meet reflected delivering as – margin expectation. exceed grew as top achieved of Adjusted We as the rate. leverage, was churn and internal our were above and XXXX. – We customer expectations external expectations, result our Our experience to X% and EBITDA initiatives as for line reduced working growth or in executed. excellent position volume company is

our is Importantly, indicator forward. transition is correct a strategic the the that the business to path to a performance underlying pure-play decision strong of water company

of have XX a of over nothing in QX. felt three than effects like impact typical a We recession impacted businesses into been decision uncertainty, closed in in two more the adjusted of The XX change We identified days, of countries, the compliance slow from government to as mandates. then period speed made a business as our course local perspective. of a many negatively rather of difficult to gradual actions the EBITDA lock moved to all the of but quarters. several the European essential These down the countries European with downturn pandemic those services, down

the takes Management more our fully the footprint. work has to and cost than councils although certainly particularly legislation necessary it to days employee various actions, XX XX taken considering implement, across

will we during implemented the that prepared color more on provide Jay his actions comments.

and with Exchange the see solutions. home at across Refill, Direct, opportunities pressure the our through many Water customer revenue we commercial managing base, Water While within our consumer Water Dispenser, do Water

social our adopt important home importance will delivery of become more guidelines, and distancing to people likely has no-contact in increase products As consumers.

requests large is extend decided water Georgia, service developing to on and currently decision water service. retailer and except examples our delivery. customer We're water across Connecticut, e-commerce A best of the program we demand delivery Texas offerings home a customer bottled with of in their parts to program Florida, see was offering based U.S. understand through for our all and this expect in suspend our The of footprint. the we retailer. One

as behavior consumer change a As result to the continues coronavirus. of

delivery be will and We capabilities expect important. home no vitally e-commerce that contact

and and growth, these the in will fully demand well We in are likely positioned to change participate prepared meet to channels provide. these consumer

mobile We're experience executed efforts to the initial updates our to whenever, the initiatives; the our reach wherever however mobile the within consumers U.S., want we've pleased with with efforts they product it. the across offerings, of our our website, our release extension of app, app this customer and week, ongoing including and

growth In addition to expanding our two e-commerce initiatives. programs, accelerate we core will

European The razorblade Exchange increase base. Water penetration expand is of razor, to second our Europe. the Dispenser the model the first to And XR residential is model, for revenue Water and to our a Water Refill,

these future expertise, our growth profitable across our in footprint. balance initiatives; leader know-how, equipment better are positioned successfully we of dispensing technical as business. and within our Solutions, result and uniquely us pure-play a actions our customer These that European As implement we believe to mix with our will Water a provide

plans. many work following mandates of beginning as stages like governments encouraging We; and America are early in closely; who to the you, of signs, to return Europe are governmental implementing North local see both the are

a past leader we As expect deliver move drive this pure-play to growth in Solutions. Water and margin organic crisis, expansion as we increased

to and business there remain benefit water by carried will base for and long-term unexpected a model. that provide shareholder is customer We transformation strong fundamentals and business in into pure-play business confident we are the sustainable positioning solutions growing industry been and simply ensuring expect and company tailwinds, our Our equally this to value. continued event. growth, behavior deliver have unprecedented momentum long-term opportunity of The strong consumer hydration we've our while trends the XXXX we the delayed

performance, call well strong your I'd over Jay? Jay, position. the capital for expenditure the to turn our opening our our expectations, and questions, liquidity will cost initiatives, remarks, who closing on our like as my to more as elaborate Before call reduction

Jay Wells

the continuing Primo operations from Thank good Starting the quarter, began XX%, with we revenue quarter first up everyone. acquisition. another with of consolidated a you, year morning from Tom was one and the as performance; contribution including top-line strong month

If you exclude XXXX. acquisition the revenue up was X%, contribution to the Primo compared from QX revenue

basis EBITDA as points, customer from from XX% by volume XXXX $XX.X and year. and well Water the as an our pricing margin operations last growth, Adjusted The XX.X%, EBITDA of Direct dynamics increase was of improvement XXX a adjusted million, business. was within improved was revenue compared quarter continuing to first driven growth

of operations adjusted contributed One legacy quarter. Primo the business million EBITDA the in of month of $X.X

to increase pricing, well increase adjusted Excluding of that growth, operational EBITDA compared EBITDA customer was as QX XX% better contribution million, leverage. XXXX. was The acquisitions in volume tuck-in $XX.X by the as benefit growth, strong driven and adjusted an

first exceeded our two performance or first the expectations. months of met The solid saw quarter that

Our were hoped. we of could as a and business to have start new operations pure-play water off strong a

saw for three March, customer ever, direct by the ended customer residential in the the We our reaching time X.X performance with or first we American Over month million good operation. weeks, base in a next fueled North growth.

of began European our of our COVID-XX have under North we over of commercial three pressure But end start in In last to from couple please XX% businesses other orders. our improve U.S. first remember, customers the a of as the America operations have Europe. of pressure closures. is Europe. But issue April, at under and to On revenue total came reopen as result both the stay trends seen to as spectrum, approximately came generated outside revenue the of the started weeks home weeks,

revenue As total or at-home our customer roughly from a consumer. is base, our of the billion generated of reminder, $X.X residential XX%

has up residential with American high single-digits base Our volume over increased returnable by during North XX% period. this residential customer

Exchange caused up was efforts over our became offset we addition, containment continue business, to also by crisis, the pressures Primo the XX%. key growth To In cost solid which within focus. a see legacy revenue

important to is enables it reiterate variable from conditions. think cost we structure react that highly that benefit a to changing to business I us

over And of XX% costs by office. it back marketing other and fall is have within of reduced sales, operating last delivery, Most route costs. weeks. In over our couple largely the headcount labor we words,

As far Europe, from co-packers. In water of costs roughly X/X we as third-party our finished production goods products concerned. source are

our demand, variable. Western drop As Europe. particularly discretionary seen spending a with are sharpest in the bought Europe where We marketing as production costs on all expenditures. We largely plans have capital in scaled in we customers back sales our such also markets, result, commercial in spending,

remain business unchanged plans customers, for demand various. and as consumer, expenditure be residential as at-home remains legacy our healthy Capital as Direct and or Water residential well Primo growing includes our which

on liquidity million. and million; position over Turning to net the total with quarter position balance a the of $XXX cash over revolver first of balance health available $XXX and just borrowing million capacity our around our ended our $XXX sheet. of combined We flow of a for liquidity cash

second $XXX abundance from quarter, flow our we revolver our order liquidity the the on an balance sheet. During in move revolver cash approximately million caution, of to borrowed in our to

times. expect a net and but ratio utilize quarter XX to pro currently the synergy not to the X.X months around crisis. with three uncertainty wanted associated the do leverage target given continue we a We the net ratio ensure last We of post funds, times secured these ended of with forma liquidity leverage to first

On back that such million. million centers customer in synergy XXXX, as as in come note, capture office million and still collections, total and for such XXXX, XXXX, credit as capture areas public as $XX of a company care and synergies and of costs. expect million will $XX we $XX.X Most our functions in from G&A to $X.X of finance, cost well

line That cost and within means of are These efforts firmly are and control. reductions, progressing we been into into they these put clear a have our have action already well. sight

From monitor a in to our approach and allocation take balanced closely priorities perspective, XXXX. capital continue we will a

on hold of our we cash, temporary placed part to activity. As share have repurchase our preserve efforts a

execute capitalize on environment current fits M&A not, in We QX, in under to awards. million repurchase and model. tuck-in existing share are search our in program, acquisitions to do quality stock we couple have months our did travel on Although $X remain we approximately dividend of of opportunities stock employees that based and paying we next the a committed unique however, our obligations satisfying tax believe to of We to million within plans any on repurchase quarterly for our given current related $XX the position the restrictions. share in

how our outstanding looking until And senior our balances debt, not is revolver, is covenants, is as operating maturity have continue business our X, to XXXX our or first notes environment, at long-term than nature, July debt XXXX. flow are our other looking thereafter; coverage. to due our at with date we this debt our comfortable ability in In our cash and in with ample

oversight including business crisis the tests performed our end the As ongoing worst part operations, case have of we the our the of stress XXXX. our if of analysis extended on to multiple through impact business,

even And we compliance cash be circumstances, under with flow to continue in and our would these covenants. positive be

to during Day, that adjusted X:X coverage of covenant as debt we noted Investor a main As minimum the our I EBITDA watch interest interest.

our and in begin we last ability basis, across XX-month manage end our a become pro reopen had footprint. we At through have in forma more crisis, X.Xx, excess this to even coverage of the seen of to on confident number markets of have as first we quarter the a

summary, a the looking pleased the businesses. underlining our quarter and of trends our XXXX, we quick core rest As to performance strong out are with of first overall, and

into macro-economic pandemic. the by As we to be the impacted second conditions move continue quarter,

successfully are very access to possess to the structure, strength, balance confident navigate sheet Nonetheless, liquidity teams management and we cost environment. variable skilled this we business that necessary

Looking from revenues slightly flat down. be between revenue and to expect we continuing million $XXX to currently quarter $XXX million. operations to We consolidated expect in quarter would second the be ahead, second

increase our in position consolidated are X% water customer commercial a the pressures we residential channel. XX%, some mitigating the a have of to demand On as basis, modeled in the down conservative business taken and

overall filtration down driven a quarter X% down for commercially services plus Water decline XX basis XX%. on coffee to X% is around an the forma as pro resulting it and a percent, in channel, of

in our improvement during half legacy thanks $XXX strong our as will to million. adjusted as our March, be reductions. provided An from believe now the webcast first what quarter Primo first expense operating EBITDA business, we roughly to contribution a We investor well and

QX a in EBITDA would million. From of perspective, that adjusted result approximately $XX

using developed assumption business were the continue most QX. estimates throughout Our that closures would

However, we're at the what would believe is we for million starting than better we adjusted And XXXX. $XXX trends see that half we first that roughly why to be forecasted. of are of EBITDA

of be basis million well guidance X% adjusted this million $X to crisis, confident about we revenue $XX As to until year, providing accretive points of we of tuck-in XXXX. realized Once EBITDA margin quarter long-term to first the will as the expansion move our year. the EBITDA our per $XX think before beyond annually full-year, we XX% additional growth. million through million million $XX acquisitions. wait remain specific from in second of annual organic results' of XX% cost of growth, synergies to past half call $XX expectations EBITDA as we

as Although, that cost benefit EBITDA, of work. and the operational the EBITDA see to crisis due initiatives we X% to made half that margin deliver of as to relates business the we would not as come expansion back and expect the on to growth the get changes we our we have back should us will benefit consumers in year, out top-line adjusted

result, we to should algorithm As EBITDA be our back a at turn to to point the now back this Tom. able long-term year. call move I some will growth

Tom Harrington

Jay. Thanks,

markets are performed in generate the changing confident highly to just are to to cover, and demand we strong position flexibility a allows the across serve. in us respond variable liquidity QX, flow, well and heard we structure cost cash quickly and dynamics you As Jay our free that

priorities. customers. enter we health handful our focused will on prioritize Above all the we safety and the of second especially key all, associates of we're a and As quarter, of

invest to seeing growth residential to continue we our considerable consumers as are these Water markets, current will as Direct in We channels in adapt the environment.

Dispenser We our our Water Water in extension Water to accelerate of Refill, plan and Europe. Exchange, businesses

continue while margins. compliance staple free to non-core with to continue to to our our flow our tuck-in cash reductions generate and expecting to to synergistic additional market dividend fund will maintaining identify and manage sufficient seeking free And response covenants. acquisitions, We enhance our structure, evaluate highly we'll cost flow agreements cost dynamics in changing credit cash to

expect As to flat much conditions $XXX the operations adjusted approximately from view to Jay are as allow. noted, finish But of continuing expect as to year-over-year, forecasts fluid targets. transparency changing EBITDA conditions by year with the million. will consolidated as and revenues QX to we our down the first be offer slightly of Market day, we and half these continue we

unprecedented. essential And the providing healthy whenever, wherever and same and consumers hydration the is we serve, customers want quality, however it time, business an and in of is has The it. for that of center crisis customers the placed need at they safe, that our

team over Our but serving only our our we've solutions expand customer is not footprint committed to across coming developed years. the our base, to plans

the the pure operating we water play improved about enables. strategy model optimistic longer-term, Over remain new and that our

our we to business our expansion to line to Under business around synergies, pure-play XX excluding by of top normal and expected points circumstances, X%, EBITDA year. drive grow basis XX is would per water margin its expect

this enhanced that with years. algorithm will of optimistic the coming expansion be services our the products growth over I'm and

both see EBITDA don't would EBITDA adjusted back back why be look the organic growth. back to or changes we in to work the to growth But a EBITDA significant growth tuck-in year, with get in back to of quarter. a the year in I it top-line X% we of overnight the single our of half business, our throughout growth will and the have As made half algorithm we operational difficult not long-term terms

life time highly execute synergistic remain support we year, we continue tuck-in dividend this the profile. to acquisitions philosophy, customer providing improved and for our in flow experience, I drive Clearly, our retention ripe. believe that positive average customer rates cash the improve when our and business. is financial continuing improvements and The to our across the will in lines customer to our believe cash

should uncertain why for the are clear business beyond look all lie it and opportunities in to environment, will that we see we turn the creation you stakeholders. that generate When value that the ahead for be near-term optimistic our

player Under Water top our pure-play service, Dispenser and water American market filtration model, Water we direct-to-consumer the sales, the in Exchange, water five Refill, the Water are North category. leader in

to And Europe. we filtration the Europe, in as well market five European model XR In water look we our leader forward will as in razor, in razorblade category. to addition, direct the top remain player delivery water bringing

take moment Each incredibly thank continue our to this lucky, workforce. Q&A, I a of moving to the I to more unprecedented such Primo, We're at here show wanted environment. grow a Before team by they all to and customers to selflessness in our valued associates. day, dedicated our have impressed

will to Ryan, turn us Q&A. call to We back the now move who'll

Ryan Coleman

Tom. Thanks,

the follow for of hear open please Operator, you to we person. ask of as question we During as one from up ensure possible, limit the a cooperation. many up questions. you your for Q&A, Thank would for per one and can line

Operator

[Operator first the Lessard, Instructions] Securities]. Derek question of Your [TD is line from

Derek Lessard

I very just obviously, for line me? wondering performance. strong this a hear second, you talk can top you Can about was if maybe

how strength So, I through know able you pricing secondly, did if to the economic was to talk how wondering you backdrop? point attribute And you're you to given much pantry increased of pricing. the stocking? a about would just I could get

Tom Harrington

Yes, good actually. Two it's question. questions, a

of numbers pre-COVID, and business quite normal in pleased we the Water and will. of So, couple in if if those you our the first were months, some we'd you Direct think course shared about business,

continued in pricing. include normal place that that course So would

likely, on happen as in sure, there pricing closed for customers. at have where commercial some particularly home occurred, there's at the time, of residential We the stockpiling. not Obviously didn't same depends customers stay were. typically, some was each you But down. all orders through And shutdown, stopped our

business, at those of and we Primo in finished the residential extended, home experience consumer behind stockpile that XX-plus our as to our from any through that and in, think, I orders But prepared is Water in which flow said the business, on the orders we there's went Direct our the through a percent either of stockpiling in direct product, Primo at-home says continued the exchange through stay because April, were legacy growth business, remarks, normal us. because both the

Derek Lessard

last point stronger from QX the And a one from maybe for view one before typically of queue. seasonality you me guys. is I leave

you a So, could maybe frame just sequentially? with slightly me that revenue lower help if expected

Jay Wells

– want you Do

Tom Harrington

go Yes, Jay. ahead,

Jay Wells

get in in forecasts I And conservative set the month. into Yes. a based QX we expectations projections. forecast keep stronger of mind, being summer normally mean, are yes, is our season forth really, on. model as some I our our that we we Please

Let's EBITDA. business. to that's with just from largest forecast, got make But taking on over line get profitability America did we're looking and in and the the April, example, our of our optimistic liquidity. comfortable for maintain costs is we're flash year. our North business, half sure million that in enough we're the now better not which out Their a X% $XXX our I And came saying EBITDA and top revenue first why than their so of at

the So, order deliver we're the right if bottom and costs, over we in the being with taking North on our deliver of very we April the line, that top as we'll line. line on concerned over did from America, amount forecast in top in

Tom Harrington

and the last we're Yes, by record says, over you a quarters. a beating Derek, I little, hopefully, few track see consistently think, that meeting

thing conservative being every changes this also because So, day.

So, what a it's say do we'll we that our a combination minimum. at of confidence

Derek Lessard

gentlemen, a on that for great congrats Thanks quarter. and

Tom Harrington

Thanks, Derek.

Operator

Your next Peter. the from question of line is

Unidentified Analyst

guys. on Hey, quarter. good Congrats great morning

million quickly, the QX to $XXX million FX $XXX just it? housekeeping. the or guide just So revenue more of of of exclude a impact Does include

Jay Wells

on we're a ramifications Yes, not seeing overall, FX. lot of

effect little no of right disclosed, our there see could that say. headwind? FX to another So, At built FX very now, the maximum, is FX But in we on forecast X.X% in. had you quarter look we

Unidentified Analyst

digit Did that you've you half do But heard actions the wanted back to to sure to to year? I just I of hear revenue the expect some EBITDA right. mid-single your and the I this you back mid-single a right? digit elaborate second hoping growth, taken, return on And was in don't Tom, cost comments, of of kind just make growth half get could you anticipate but then, I

Tom Harrington

did. You

signs get of hope So, then normal to to we to said but frankly, them revenue took by EBITDA judicious to the as we've back year in executed recovers, which that basis some as segment reopen we coming than weeks, And essentially, that a and we make XX as four people the expect us to by be managing will algorithm to less we on in I before costs cuts done days, the operating expense country sure it our frankly, is that the back – our get get country, on see didn't expand the XX or EBITDA enable in and go-forward short out sometime segment return algorithm. spread and order margins.

Unidentified Analyst

just the working in what of – year? basis just you're some I is there's of the basis confusion, that QX– of mean, been what for this terms of for pro forma – quickly, I think off kind kind just pro for half second are right high And some right level, of maybe

Tom Harrington

this half second year? the For of

Jay Wells

Peter, little of bit a throwing a curveball.

Tom Harrington

Pro of half Yes, that forma I the – actually have handy. don't the year. we for don't second

one, – frankly, second any of we it's We the there's the but so half terms of second Right, have delays because then what cleaner have what a it's provided terms guidance a there frankly, through haven't openings. by negative we in are the much about fluid quarter, in and sight do here – as get such situation yet. our of or still beating affirm country largely of too, we'll on expectations positive, country, line half a that changes, And we'll it's because

Jay Wells

bit quarter. seeing we're updates recovery we're and have a couple how And the of the seeing light quarter. events provide set as through we'll throughout how this year on events we of virtual get also the And – little on a half the we up back more

Operator

Securities]. Your is [CJS of Daniel the line from next question Moore,

Daniel Moore

Good color and for taking question. the Thank morning, you gentlemen. the

Tom Harrington

Dan. morning, are How Good you?

Daniel Moore

thus in of just in talk open Europe, you've we've you. volume far a provided whether in Very to starting But have up back obviously more just volumes cadence what well, April, QX. the about of transcript, there, I a talked seen color and my know the of of trends, lot those maybe thank kind lot back recently to and things of about were you're apologize. Maybe and numbers, – in seen couple if weeks? so terms volume repeating last you go the I'll where to you – have

Tom Harrington

off shut it the back, the in numbers March, So And you an pretty for QX. an XX we same. an days quickly probably but in for Sweden because the that just say other how the are to we're normal it trend stay the wants first it forecast pretty don't go middle by looking And trough I'll the of case an XX%, come business varied they average I right? but they're looks the country it's roughly like close at country, to in of I over of we're it So give side we Switzerland, we average hit average countries, look, creep how watch volumes all not every our at their XX want closed. and Not was because example, country home. as really back out. Spain another trough, it's in of and is but Switzerland so is we case a the never like see bottom meaningfully, to course, extended believe they trend day, the back. to But out. the

that will all be, Monday, but balance have U.K. it what are making know or forward. Sunday the an of that announcement either those – impact like don't it's So, the I announcement certainly sounds on a will news, of a go

in XX%, an average, but that it some looks improve versus of So which average hopefully an color, wants of like to remark. provides our that average we it shared

Jay Wells

and – a on together And revenue through regular often that XX% I guys get what or bit trending meeting I, a we're U.S. basis, volume forecasting down, we to average little everybody but these – that’s more number average Tom Tom revenue about least weekly think a QX April. with above or at and is

Daniel Moore

Okay.

was April forecast is QX to clarify that a revenue XX% just So little around worse for that? than that and Europe level, a for

Jay Wells

month month of about. bit is different, average little little Overall, average, a of each trending than they're say better April, the Tom talked the but a the

Tom Harrington

we're call signs Yes. I green but don't shoot, better it some than And seeing expected. had a want to what originally of we life,

Operator

line Derek comes question next Genuity]. Your [Canaccord of from Dley, the

Tom Harrington

Derek. Hello,

Derek Dley

Hey good guys, morning.

of just North that commercial in let's on speaking difference did and may guys have terms residential been in a this I the growth light we've that just and missed second? focus have numbers just rates question, Okay, you seen America you – guys of a maybe about. so in and But mention for there the

Tom Harrington

No, April numbers, And numbers you little better we’ve seen Europe, be North our revenue, you would So a is And what XX%, we we've business said, on at volume, in which a was gave XX%. plus in America, it plus residential couple two. exchange in XX% the Primo of about others then on business all a our are legacy bit are latter about what and those than shared. but the first the right? is

Derek Dley

– for right? sorry, April, that And that was was and

Tom Harrington

weeks of April. first to April, both the that's Yes, few

Derek Dley

Okay.

Are you're believe So America split that in about residential would residential – and growth the of commercial? I XX% sort just you where then business, when that think is residential North I in offset we again, XX% of commercial. assume your when declines commercial seeing seeing versus

Tom Harrington

Not it's – well, the opposite, actually commercial, residential. XX% it's XX%

Jay Wells

have home. at the we And

Tom Harrington

residential commercial. the impact right? And And the mitigating the is growth home at we for have on Primo,

Refill, segment. offset, could exchange then benefit at filling from the it they're all is, which us, be do but continues it's counterbalancing using the the Water not the way commercial the we it from themselves or would So which get grow, say, consumer, model, home to I pressures mitigate and for a buying

Jay Wells

the talked you're you just a Direct down the commercial It in Europe in In number, negative that's in decline Your looking residential is XX%, Overall, net I residential about; growth business X% of commercial and is yes, remarks, answer, offsetting the some North the the talked combination in Water for not against down, that my North we've to we’ve the our North in XX% in America. about, about a commercial America, Did America that prepared overall, direct. said a is give Derek? significant.

Operator

question Mark comes from the line Markets]. next [CIBC Petrie, Your of Capital

Mark Petrie

guys. Hey, good morning

Tom Harrington

Good morning.

Mark Petrie

about base. just cost I ask to want the

just at just about reduction. aspects mentioned routes over over in the XX%, of more admin? I how last investing you've you of the been did was terms and your mostly to next that where rebuild expect like roughly if broadly, the of in I time, And you the a people was talk few or business mostly guess, that just granularity you same the weighted, couple headcount give of mostly forward the course you You Wondering bit quarters? in the stabilize as going revenues if years, more think, course it of balance can

Tom Harrington

Yes.

or XX% So will by so It vary headcount reduction. market.

changes. have has a like would could a then where right, footprint, everything headcount, would production, management, domino could over production could an things for in be effect warehouse. shift It in declines aggressively. because be the be is is been or time into routes impact revenue have across a bigger we And it So, reduction adjust of more there It consolidation impacted. routes

as production a think you been if route whole, forward of all affected. has that side, So,

administrative knocking small We aren't right that as doors of you current headcount, reduced of commercial open. resources the in to of a realities on about G&A isn't open, use if have have have productive size we – people sales for some revenue. think And reduced sales sure, it's not if terribly to our the we finite because support

about now, As alternatively, we forward, we Internet. and are think investing online in go the

online, we delivery. no So, see in growth contact

go-forward e-commerce also important both the that's then that's America And plan, is, and benefits thing other North on our We as in in some other of on U.S. and part side. the see all the people, back is we'll prudent, recall the and example, comes we appropriately right? this those folks would we and for sales when it's So be recall, as those time right. would layoff and a an

really that's approach legacy our Europe. opportunities Primo we're in So – platform in Primo see to accelerating course, some and, the our of investments

Mark Petrie

contracts. I in going specific balance terms on But that's lower energy does the your lower year? customer operating of sort helpful. price Okay, price. of And a QX you and surcharge maybe impact the energy have costs the the what of oil costs forward, on your formula then have know oil and in guys then

Tom Harrington

Yes.

of the certainly, the lower by of costs costs, QX. of benefit surcharge, fuel of you lower are right. portion in of So energy course, surcharge we’ll haven’t QX or component is it, And a of discussed have all year, will, energy And a be balance part direct the the but because fuel if forecast, reduced there other would inputs. the our for in that's operating our we

We’re these net consolidate also, on frankly, a drive basis. a as few we miles less routes

numbers. So, some savings into cost there's our baked then,

Mark Petrie

best. Thanks, helpful that’s all guys. Okay, the

Tom Harrington

Thanks, Mark.

Operator

Peter. of question from the line Your comes next

Unidentified Analyst

thanks I think bit follow-up. ask a QX more. the some taking and wanted you Hey, trends conservatism just plan think through guidance But little the I to about above mentioned I and reflects know April. are operating helpful for to standpoint it things environment your what plan an for look for be – understand of we and managing we progress will the out about through quarter? assuming as to from are as kind you

Jay Wells

as new we're adjusted though said, be it planning. norm, could we've cost Peter, I Tom that mean, believe Even don't I think our that the we Yes, structure forward. this going

to maintain taken this out the more profit So in recall. so cost it way, current We've our reduced right under we've layoff profitability, done grow to the revenue. our

But we adding isn’t as we that sure don't we when to in see So, if is revenue see a come out within make cost we be we taken start to are fully have. model, we order businesses going in XX% we our over. of as the very will our reopen, we costs come decline the in business so the And XX% bringing back, the to we've profitability. the that back, back, cost do back probably crisis as top we've forecast cost see top but maintain put cautious start line, taken back will the line we as

Unidentified Analyst

thanks. that’s Okay, helpful,

Jay Wells

Thanks Peter.

Operator

from Moore, of Your a [CJS Securities]. next question comes Daniel line

Tom Harrington

Hey, Dan.

Daniel Moore

Thanks, let more. speak me

in has would to Just been a executing more in revenue to down you terms need that playbook in comfortable either tuck-ins What in past, marketing. you the playbook aggressively? capital to, or need see of recession leverage? stabilization get your of terms be allocation; Where to to versus internal increase would little more bit

Tom Harrington

prior of the to of to that quarter now answer quarters, new opportunities, or macroeconomic believe feel travel, opportunities frankly, we due take I’ll Yes, similar mindful unfortunately course, and we the part. Well, economic downturn to diligence. pressures flesh this a so potentially, do Right out be it'll that first restrictions – appropriate that we would of be couple a of and they the can't an next. the we And that then we think opportunities. and there'll frankly now be held restrictions have a of of robust those existing have on we've think says, travel off pipeline execute because right the our And prepared to inability full-year his Jay, in I original a $XX million liquidity basis. diligence. comments, to appropriately million against we $XX And to list on

right, in So, back up on at. QX; we'd QX, that hopeful dependent, we’re ramp be where we'd

we in just about and that how to smart QX. judicious and So, add QX be want we

Thanks, Okay. Dan.

Daniel Moore

Thank you very That’s for color. helpful. the

Tom Harrington

Yes, no worries.

Operator

Primo Water (PRMW) 8 May 202020 Q1 Earnings call transcript