PRMW.TO - Earnings call transcript Q1 2024

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Operator

My name is Joanna, and I will be your conference operator today. At this time, I would like to welcome everyone to the Primo Water Corporation's First Quarter 2021 Earnings Conference Call. [Operator Instructions]I'll now turn the call over to Jon Kathol, Vice President, Investor Relations. Please go ahead.

Jon Kathol

Welcome to Primo Water Corporation's First Quarter 2024 Earnings Conference Call. in currently are participants listen-only mode. All the is at primowatercorp.com call conference contains statements being performance. and there webcast website Water's call concerning including statements, Primo on forward-looking future and playback.This financial operational live for The company's will available be These earnings connection the Form press on the annual and considered release cautionary harbor statements Form in the filings with other report the and on contained and XX-Q in safe be quarterly XX-K in statements statements should regulators. with disclaimers this reports and morning's company's securities GAAP, the statements, or data company's earnings accordance Relations the update could The the as law.A measures capable performance the differ call most is actual statements, being during included any morning forward-looking in undertakes materially quarter expressly to section company's with the estimated, from website duty first the of comparable these by applicable this on financial reconciliation measures and when no required earlier except the at company is primowatercorp.com. non-GAAP in these discussed company's Investor of released with announcement of

Robbert. presentation accompanied addition will a on Water's accompanying turn today's webcast the discussion, we I now and Financial earnings to supplemental In to Chief by am the David have Robbert included Officer; to Rietbroek, our that, copy Executive of you website.I throughout deck a call Chief Officer.With assist slides our in Primo over Hass,

Robbert Rietbroek

concerns which a interest fragmented, volume company products. rates the X.X%. across grade. moment, growth and highly consumers and X.X% our to of details morning, embracing wherever, gains revenue our was to commitment discuss and everyone. resulting of however perspective, with water was EBITDA consumer to of the associates prioritize choose quarter as of prior of continue the healthier business our inflation EBITDA $XXX organization exceeded margin the of issued and all will pricing million, the very business Both growth year guidance adjusted by good first margin and more end across of our across our growth Revenue David where organic in quarter. EBITDA and the of consisting increased year, performance health of us demonstrating X.X%, category adjusted of portfolio.Adjusted confidence and you, Thank X.X%, high were versus strength the gives $XX broad-based our channels.Total balanced strong. driven in of full growing million, high the we last with showed and XX% growth growth as for high Jon, like XX.X%, to frontline well results Persistent see eye pure-play for I'm not for the expansion. must-win position pleased our the our to growing we and in leadership up the and large, demand slowed customers. we continue a would they drinking potential solutions whenever, remain reflection clear And water meet have as offer quarter thank America high-quality We the a consumer them a dedication.From and our are is profitably. their direct with I publicly priorities recognize our the and a to in North and demand our revenue to macro category.As focused lifestyles, but their water consumer

by expansive has when growing hearing from change. we you and sourced may balance remains When sometimes water impact their on been where water.Given a are commercial water and volume tap meaningful or beverage XX-XX, volume. approximately revenue Our category, more with broader the healthy both This of that look you in declining about are ensuring especially residential split and companies the many pleased with away an years beverage customer base municipal between revenue price. U.S. contaminants solutions likely and we Recently, are moderate aging have sources. supply, a pricing at been growth from driven infrastructure, external surface contrasts

bulk path contaminants make drinking I likely progress high-quality immediate the to water consumers for priorities in presenting each identified quarter. ensuring water solutions.With ongoing discussion supply American quality choices, our consumers. of more last must-win for the The that, discuss the their a products water provide that and our discerning large-format hydration Our drinking clear North an about of opportunity will let's of specific water

is portfolio. consumed a growth gallons and customer superior with organic our to net must-win provide first to The water across yield or units experience the goal

high-value We our and approach. and and empowering with are and our quality and center we QX, coverage with aspects our expanding hours than refill, customer to of unique our created and at resolution.Within with touch digitizing rapid branch order XXX valued through and water.com drives direct, that review experience interacted portfolio in An for water our the many and customers consumer sale in important enhancing gallon of search social, voice, including solutions, interactions. service content points improved filtration.We've experience. of more are website, their center, where and with engine improve we increased descriptions step pages is the our chats number customer-centric begun of we request optimization the starts on on our In growth, meaningfully exchange, we a acquiring dispensers annual days focused which water retail, maintaining focused customers driving and water customer

to the the capability has called user language great upgrades balance Water the take super-premium version Mywater+ experience more products Consumers from with per Spanish tiers whether station, interface price for mobile one up upgraded our sold plans of Coast, from value come Valley sources. and retail sold several our delivered of a or Mountain West at delivering in Water door Spring on in updated on-premise way Springs locations.Our water an multi-format to Mountain it's and with year.We various of the Our been Crystal is focus source pride $X.XX Spring their last to water about gallon of in can sourced spoke tiers a a which the the types, increased domestic I glass XX retail from price on bottles select multiple East Mountain for water Valley, and Sparkletts at variety in our results. or price direct all quarter,

in During throughout capacity. quarter, pack will bottle we product food retail stores aluminum our convenient including in water the XX% by begin approximately X over increased natural now the conventional launched stores. sold first water shipping Mountain than country, our the this year of month.Mountain Valley our spring #X customers food production prior a more home later retail and single-serve brand XX,XXX this the at U.S., stores is the revenue glass in and is to available the direct already by Valley expanding We've shelf

We of for must-win the is X-gallon, partner. locations retail to solutions continue one We water partners of or with exchange second numerous our demand be retail levels high to gallon on-premise and the our products.The delivery across glass our through end direct-to-consumer X.X stations. preferred multi-serve like consumer meet or single-user see and channels refill

an suppliers, we aspects Providing Water have partnering our am The to is to call I their of customers' concept across customers, what they necessary X and the budget for with including a our and environment needs We all associates. our of Way. associates, of shows associates Your commitment thrive. business, aspect current stretches every and offering and each and our job their work safe in for do of proud shareholders.Starts efforts. is potential of meet

investing areas. lots in offices, we and distribution upgrades locker are workplace room areas, Additionally, include production improvements and parking that in rooms, break

on mass America.I of these the top-tier and to Mountain channel. and desire meetings, like stations and I more them during We the need, drive positive providing prominent additional Spring top-to-top meet serve partnerships our to we retail, to Valley in communities display we part the a have our the stores, in retailers refill found other about as world-class in capacity merchandisers, across of they e-commerce several are products improvement their to an a shift with we involvement able us and live company culture we in relationships the our club and strong traffic deepen associates of with types in the retention exchange and we Costco, Community quarter, exhibit Walmart, the community.As noticing rates. DIY like refill recent in had our Texas exchange Lowe's the we pride wildfires. services to and our their including and we and certain racks in Our first of stores I are surveys spanned in culminating with to opportunity associates, Water.During grocery North and all throughout stores their Home periodic secure embraced want Depot, support been as times passionate to conduct retailers support with engagement, represent provide, within includes did able chains were

focus by driving in filling growth retail growth vendor and effect community. increasing in-stocks double-digit having also space the volume members noticeable white been have as space. revenue on meeting across as unit Our well I key with of voids our capacity a is

plan I interactions an partnerships through from we first to excellence, area quality that systems must-win to had well-being, in for XX partnerships optimized been third quarter, these transactional our operational we and engagement Direct safety the our X-day rate sheet structure and specifically assets, These and delivery quarter. traditionally an guarantee our than our feedback leverage for schedules to and of the thank prepare with personally balance the vendors see growth, implementing our means and our products continue began associate organically to for level our the maintain As growth grow were how we and operating period investor and Water our the summer. organizational has We enriching an the quarter. and into and first enlightening this more offering.David haul.The we XX% with the we we another European as win evolve head for in ensuring busy to able and service of educational. we the in themes scale low and delivering included deepening, and quarters. to coming deploy as base efficiently at to highest X- opportunity analysts on-time and some product investors in have strategic help long to sustaining, full relationships can is innovation channel the to I'd acquisitions.During It deliver capital algorithm, first positive and regarding of for sale appreciation strong like of our

a Route Automatic efficiencies Optimization what call latest management X.X, example has as system customer water current processes. we we of Throughout costs.The solutions direct is base. and in upgrade operations, to product customer and the will our ensuring exchange. XX% of availability even increase fleet technology-enabled channel new transportation satisfaction our of business refill which our more for is uptime technology provide rollout are integrated implementation of driving Our driving part machine reduce overall Successful

delivering installation The on are strategic During increased by the the high-efficiency routes, CapEx first principles our and rate are and business at deliver of per density program by The quarter, year. employed line be water more X% in while a X%, complete an per optimization our assist line we lower are production offer our line. later utilization, the some technicians continues, The asset new of indication the focus we and savings us extract lines focused on the to our the previously double production per that a the aspects and perspective, refill what We bottling at Chicago the by only to the this improved annual of continuing inhabit. route our from second Advancements million our capacity forefront the we more driving an reduction waste remain process experience. on day our the distribution to robotics of and can $XX serve, route nearly overall remains providers.We our the utilized high-efficiency their planet same plant customers value XXXX.From investments in service we announced freeing filler and of of team roles optimization focused that quarter in up source Ephrata, can being and and of year-end our strenuous to cost also delivering quality run to be do.The not exceptional will to team installations improvements. pricing expect of enabling and strike aspects the of Pennsylvania remains productivity responsibly to the now high volume to route functions, but we and to sustainability units of enhance revenue associates of performances committed output facility returns. quality of protect

We will more and front continue and bottles propane, to reusing that our plastic sourcing recycling of the increasing to use converting water refillable end implement will eco-friendly an is in the and focused our refilling and or and I on solutions, environmental offering. fleet water glass product go strategy for the at leader that exchange report, package reusable which hydration aluminum of that you're results improvements I our returnable, on XXX% healthy this could of its space, of whether our us the be with in offer to and a is refill We part high-quality, delivery, large-format I'm why us. home, work growth responsibly, excited sustainability and contained of of the XXXX intend this hope proud later is potential our in you at about life.I is in recyclable remain expected am quarter. understand

success and balance to good with have a pricing. clear We deliver volume plan of a

and combination unique to greater are the and that, benefit all Water to second year stakeholders.Before our turn performance provide detail David our resources business.With all and call the the to assets that in the turn our of outlook. Primo like financial I'll call of and to thank again capable for support over excellent I to I associates, our results Our associates their over results contribution full David. once XXXX delivering review of would quarter

David Hass

Robbert. Thanks,

the we guidance. our unless the discussed of operations increasing increasing adjusted with point revenue million adjusted As thus, our results to at EBITDA EBITDA a to continuing are operations year, included otherwise of All high At majority today first for our financial disposed of end most XX.X%. only. end of the discontinued international margins X.X% operations recent reminder, and $XX quarter of will million, assets, the no cover continuing $XXX noted.The we exceeded of XX% metrics our results

or or in gallons quarter in additions businesses this from strong locations refill case our the strength versus health services indicating all X.X% contribution actual coming consumed from After approximately Within counts both closed X.X% balance Water's bulk-oriented exchange activity our million primary offering and our across in be with a of services, of activity pricing to inorganic months be inorganic or price overall XX came approximately volume organic Primo $X.X tuck-in new well directly from will of continue definition water any growth, to indicator contribution approximately base.Separately, part were approximately approximately of that X.X% as normal becomes any tiers. organic months, growth means businesses acquired We the are volume comes customer was XX or or sources. where X.X% business volume or revenue believe to the customer revenue or The that our nature X.X% additional our complementary million from customer of can customers known.Volume existing retail activity. X.X% not as the $XX split activity acquired related than less different includes water contribution ago. irrespective business into in acquired of the accounts. our across related

expanded the the Water Direct of and to for an and year. dispensers. earnings each the channel. channels disclosure split out revenue Water growth our price is channel in improved, supplemental price for included our A water Exchange we prior our have Within results channels, within welcome of that table and volume Refill occurred X% versus notice deck.You break price in Filtration the decline will XX% the channels had increase strong gains except volume each of across in and and of our We

at driven prices from to Water the which XX%, channel, through up and our inventory lower merchandising premium by the by channels, retailer largely by sell-through volume, us.The Water of largest up shelf level. ago as water years portion to store and was retailers a in pricing water and of created mass the our spring XX%.The supply effective sell-in tariff on-premise quarter, is highlighted primarily representing expected approximately of several dispenser couple offsetting rollback, the the business pricing Dispenser the club, chain of was behind our Valley dispenser SKUs merchandising the architecture. wholesale retail X%. XXX,XXX units the was the during sell-in challenges excess performance other Unit now works driven DIY is Mountain The of quarter grew approximately units first sell-in elimination was the XX% of the during in dispenser of return

growth and the through As growth. a of Solutions predictable our customers revenue razor and the the online. selling water includes sale and reminder, residential razor, contribute to two dispensers recurring our Both and dispensers rental blade our to razor and retail enable water approaches Direct Water of business approaches in in partners model commercial and of Water business

growth retail have our calls, but reclassified the the was have import higher previously refund through year been previous We with and e-commerce.As is into category under partners our connectivity government water particularly from where the in tariff focused last to water visibility on a a initiated. was our XX% was process greater connectivity and solutions where dispenser brick-and-mortar U.S. we than discussed

the as transaction. the We the original same in have manner refunds reported

For $X.X to is water the related first is quarter, as to approximately Primo approximately received we CapEx interest first we related to $X.X the Water.When value rent quarter Approximately reflected related adjusted year's we payment, or to year-end through balance income $XXX,XXX and have the million. sold with XXXX, residual received including EBITDA million to that tariff dispensers dispensers $XX.X paid of the cumulatively water last in retail, million. $XXX,XXX

ability optimization, critical to driver possible mentioned as the the our improved manner is efficiencies. ARO long-term As QX to and X% efficient commitment rates. improving our compared serve most per or X% in a continues to than in The in profitability of our result short we revenue of look of route customers further into route route to North XXXX to the America, increased per In continues on-time approximately to automated and tool yield both operational day customer increased earlier, experience metrics and OTIF units and Robbert full QX compared our more per XXXX.

continues as scale we higher customers and to improve leverage Our service more route. with per volume

for liquidity with incremental of working $XX.X expenditure cash capital, by first quarter, pleased Water our of results remained expense, in improved strong primarily improvement totaled generate X.Xx and the year-over-year an quarter $XX.X we at the XXXX's Direct versus for the with a quarter full our table any today's both operations quarter year trailing strictly improvement the XX-month not attention On for our slightly year ratio earnings by interest is income of fees help be slightly continuing expenses. proceeds gain higher to quite period.Shifting by approximately than balance operations at and the lower business, our low in results our of flow end million earnings last again, This net XXXX approximately capital our in a the increased revolver provided quarter.Once sheet, cash while figure. the ago cash Similarly, slides. for and free other tariff year million. and year-end cash be on revolver.In for are covered net $XXX on guidance net appendix we bridge interest leverage senior income on be million continued outlook, sheet customer one-time basis, will approximately continuing account has was interest reduced stood driven of our of increased flow, with balance discontinued million, and million expense within This EBITDA our XX% our approximately when our been the XXXX supplemental end operations interest interest to par The operations. rate guidance first into of adjusted Additionally, unused cash as at taking to continuing offset a to a environment.Our generated of the fully $XXX carried will unused ability our I $X.X yield payer, flow on in approximately transition adjusted a operation. cash our basis forward continuing notes the the paid we'll a and our financial into the

are million. We forecasting $XXX between quarter and $XXX be second revenue to million guidance

tuck-in EBITDA We growth improvement are at $X increasing million Water projection forecasting includes year guidance range, XXXX adjusted margin XX.X%. basis. strategic year.We incremental and the to of million between represents Direct million to of we to X.X%. adjusted $XXX we between CapEx. XX.X% implied The contemplates year in X% with increase our start the with figure well XXXX be operations, $X.XXX both $XXX $X of CapEx year balance from are from guidance of as run on EBITDA from an expect rate of million year EBITDA in of XXXX and $XXX Meter are full be activities balance the The EBITDA the a optimization reduction $XXX early balance implied midpoint. the the XXXX benefit revenue revenue contribution QX guidance an be continuing guidance is $X.XXX of $XX.X EBITDA period.For adjusted XX.X% year as some our midpoint of point an our may from between business and forecast ago margin approximately strong QX occur XX billion across plus revenue initial adjusted million, of million full increasing the billion, Similarly, adjusted million margin our and The of at the that approximately program. approximately acquisitions XXXX with basis the benefit cost

anticipates growth more environmentally CapEx in and the our organic of improve taxes to U.S. our or to branding privately refill of innovation product to digitization, $XX increasing total which refreshed signage approximately in efficiency be net and XXXX of CapEx reducing utilization have are losses, include This expanding X% year upgrading return $XX our to high-efficiency production Driving $XX XXXX. water our expect existing dispenser friendly a NOLs million waste million of through installing XXXX approximately accelerating with cash we available NOLs, revenue XXXX. for We productivity, and funded continuing initiatives lines, approximately fleet plan to million. expected Key operating growth U.S. our building distribution. and technology platforms, spend infiltration be of units.Full to from of

-- We in interest $XX year XXXX, year million expect $XX to available XXXX.For in million NOLs our approximately cash interest through million expect our expense two dates XXXX we of the with debt amount $XX is senior very do to cash XXXX. anticipate expense revolver. interest note approximately $XX with be of full net tied of per million We of and and not currently XXXX approximately low rates XXXX the X.X% facilities maturity our flow drawing on to

will we been not outcome. M&A uncertainty could million with reduced expect tariff was opportunities cash of steps replace XXXX.Combining discrete income the timing income flow maximize tuck-ins to for towards decline Fed available $X core that the sale guidance decision. to attributed received continues higher to our included rates target along continuing cash commitment guidance flow adjusted related all quarter. of our midpoint any if be each to model, those in to free take still are increased discontinued The the can the throughout from the in environment at and or free rate held amount interest bank our $XXX and outlook This with in XXXX Additionally, with market We the our be conversion flow but in adjusted items we the adjusted cash due the these to increase EBITDA macro, have XXXX. yield free forecasting of during XXXX operations.The operations of ranges end of cash million business factors, following during generation to historical our $XXX sold to between assets X the along tied the health and capacity million experience

process. mentioned the in remaining quarter amount remain the tariff First, for the remaining refund to $XX outside program, improvement.Second, confident from benefits the and received government the million achieving refunds timing due balance the of uncertain of additional optimization during the business of we the

in Aimia Kingdom which in operations, our coffee Third, business Foods the Kingdom, sale and includes in United of the United Portugal. water businesses Israel water discontinued and our and the

common are communicated, year, which With path of received stock in repurchased in the an operations quarterly Board increase quarterly with to our $X being consecutive in interest year.In strong previously $X.XX from long-term I for financial dividend for of discontinued first back to a marketed will multiyear over and XX% Directors parties.With of have closing, our for $X.XX these common are As per several share, a share They success. increase we repurchase and sold. dividend the businesses until our respect remain million to program, our quarter. the they foundation Yesterday, growth actively a continues turn Jon call of per along our compelling step-up over continued third profile our outlook, dividend last with flexibility share improved that, will the authorized Q&A.

Jon Kathol

David. Thanks,

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

Operator

Markets. [Operator at RBC Modi Instructions] Nik Question Capital comes from

Nik Modi

of itself. you've a first of appreciate full months being in several all the take you've the could been how as we outside seat of think I the really hoping really back, the of and your been for you part accomplish in organization. what terms kind outside And evolution I quarter And But unquote now the to perspective now. about was you've step this on quote, able quarter, perspective what the quarter seen taken Robbert, you've that

Robbert Rietbroek

water that quarter and much reflected strength pricing. broad-based very had growth, way Yes, we that progress Sunil. across view growth, all across question. and and the channels, Thanks in thanks, balanced is with the pretty volume for I we have Well, we both the the portfolio

delivered, at driven throughput starting X.X%. both that price and we're we combination X.X% revenue the report by drivers also and operating and the at as said, at I had where growth, now David importantly, basis look underlying which up And is volume, XXX is we of of volumes I margin, when X.X%, really to So and very now.I the XX.X%. was it up gross of a something it's looked X.X%, pricing, it at volume pricing, Nik, think It's But organic points, efficiencies. up healthy. was

reassuring XXX So points, expenses and And are very approach that our and efficiencies. also disciplined was up which basis margins strong of as on XX.X%, again adjusted a a EBITDA translated by to operating operating pricing, well. volume, but driven

very quarter.And deliver the to to which a operating, that were have if from news good pleased I do volume macro we're other the with look that is of volume, and able in the the we we environment pricing. companies growth different challenging continue I'm some environments. But at declining obviously So moderate on see or

So that. there's of We regards the those regards the last part remaining. was customer I your is made remain to deliver the we've X the are superior business with really And still about with to which one I feel priorities. to answer must-win optimization question, the think committed then good And could program.And progress, efficiencies to the first accomplishments, service. efficiencies,

be third areas. questioning. about better second I as The partners, the that. is excellence. can the water progress remain talk we've is driving and and of in more thanks associates. one really seen for a the partner bit investors I with made to communities, like And solutions operational But vendors, retail choice feel those And

Operator

from Derek Lessard you. comes investor. Thank [ an The ], question next

Unknown Analyst

maybe a little you Congratulations dynamic some great you where think you around down supply and Mountain really the I could that quarter. seeing, add the you're if wanted on do some color Valley demand to Robbert, take more, of maybe metrics can thing? the just that drill Maybe and actually performance another performance. on this bit

Robbert Rietbroek

spring source it's very business very you Mountain Thank for was everyone The Springs, Hot question. Arkansas. to most remind is much Yes. premium bottled and water strong. our the brand Valley the brand, in at The

how ago it all David well delivery at the as both source we've sell in weeks on with went which both in quarter this, Water water Valley, water the lines, address and look I our is outruns know, that and to source, Mountain as at that XX% growth now about been operational. demand retail, really working look is spring still our in availability, retail. the quadrupled You And hard visit talked to outstanding. supply.To the body operates, market is personally increase new look and Direct spring We working to it the X currently we well to the at the has spring the team in sides in see

is launching now We locations. This also already key Whole meet bottling aluminum, driver ability demand. into XX,XXX addition of this and have glass our Foods And to continue in that, to in multipack we're in over add actually distribution we've launched add it's capacity. to to and and and a single-serve

in the future. super-premium continued brand So growth reflected, that product. the we expect priced this It's a on near future and to this into is

Unknown Analyst

business was I do a of revenue target term? have curious, base though, for long sort the And you

Robbert Rietbroek

well. in long term -- the we don't We Direct do and to see But continue because do into embedded Direct can on and near side give do underleveraged has business. lot potentially Water an it's nor that this we guidance in grow specifically as is of the on retail exchange a Mountain Valley of the delivery demand future brand delivery the

continue behind availability to ambitions high capacity very the to the brand, not will increased and in have for the We we market demand sure we're meet orders. make to work on this

Operator

from Teixeira question at JPMorgan. The comes next Andrea

Andrea Teixeira

seeing the should impactful anything of I how be was into it you a of should can bit quarter, more QX that of a margin there terms business talk aware? any be means at by like through mix look is impacts in And about hoping anything QX, and flowing like deceleration any optimization the that should aware from as perspective, was that we like trended if raise, like you should we like we you you're thinking as be the of go terms seems you flowing anything in aware or the Or adjusting then or guidance maybe just how things exit be we more and visibility. in if weather through conservative? through they be you the looking you're that to at how that outlook you instruct had impact margins, volumes more also see

David Hass

impressed of there. that specifically regard with across XXXX. carried essentially broad-based through Thanks, With it was The Andrea. I is we're within can X our most the across take that. what quarter, periods momentum to end the all from channels, the majority of volume,

compare racks cost as both up because business, consumer high-quality we're you for to You for significant flow-through the look was and Robbert adding especially been to allow start side of incredibly there, of the Exchange, Water as growth, indoor, our continuing of both as volume look margin demand the side, That's healthy that volume as they that health are with sort of Exchange is Direct at that and to approach the the other When the the outdoor correct. well we've and entry in water, at and water prefilled remains Direct the to taken we've beat. pacing, that start where and and channels price there, demand.In we're frequencies formats. fully mentioned, refill through the has that to increase which lowest this the now price to entry the guidance additional in capacity our moment. rebounded you keep of delivery point Obviously, take on at

some peers, at As brand it signs the completely delivery macro the see those be our that that business of which where at obviously have in affinity guidance, seems or in we now remain We as guidance. to services. to look increase contemplates of continue but margin there would they challenges. you've confident optimization.And remain We It can look economy, about. be asked other or again, affinity, that our are outperform, our confident we savings that of the be you delivery service beverages

with quite measured team's pleased, for frankly, contribution again, remain and patient quarter. and momentum the So we the the

Andrea Teixeira

on little of for, super I household there. of that's attrition a lapped of pricing. believe, attrition the be diminishing? happy be Any -- anything cognizant also attrition off Anything I squeeze direct business can we should will, helpful. can If think commentary you of if if or squeeze like on you And penetration, we kind like in or in terms terms that should can

David Hass

Yes.

again, actually that basis. all attributable to part So through levels phone in at retention service measured inventory fact the rate to talked that certainly in of digital better customer small at of pricing simply means if as solving available a cover complemented retention coolers issue, Robbert you and is for by lapping business from sort have general year. are is our increased job basis resolution or indicator higher a on that you this when the a experiences a both either retain through by installed a of the wanted resolution points, better service, we and news. that's about the a or we or there a is talk the are light access in not increase taken few other believe year, just that I the of remains point, retention doing That person, or at can how has drivers, providing necessarily we last devices team seen lot challenges.So might call us. companies in he everything again, hear Again, but and service orient great the macro all this first with of route then to how planning either

Operator

The question Moore Securities. next Dan comes CJS from of

Dan Moore

each of kind the attractiveness Maybe And do resi long set commercial? any direct this, think are the and term? business, With organic the each investments about in the and meaningful in of -- missed allocating do growth rates first that? of the seeing you in touched me. forgive on if between you I you how how marketing, similar you Are few minutes retention relative over differences opportunity service, see we terms

David Hass

Sure.

about our they or might would simple business. residential a just nominal a waiting be bit room generically, a little place commercial are mentioned, evenly. Robbert breakroom customers a flat consume than for Commercial the because as more customers on So a value of

are meaningful our sort selling predominantly or said and but quick operations. business. small that of in are not as customer, different will are associate on Again, seeing commercial-oriented which resident focus that business to the the today.Again, retention behavior European activities any agnostic a targets large direct a commercial base the web really was our environment or is on our We the any trait in U.S. remember, not differently, change the their customers, sales street, on who towers, of that's office primary you

continues we a have driving sales also XX XXXX, months we're team remember ups. So job to Costco with do of sign as in great the show when pleased customers.Again, program. well The small customers online have business of very access focus that through the a the equivalent to booth Costco as we converting

Robbert more or across previously there challenges this or potentially bad of to debt the no higher issues available regard no team whereas center, if board, really the And confusion trends again, of have that, could things steps So are created at to less AR, trends because strong to point. again, the by and in customer that talk talk in health, with taken we friction, we're experience availability need signal the about, payment or and now service customer challenges quit. through sort

Dan Moore

last had A pockets rates? those scaring impact to more you taken or expect to opportunity significant you a contributor really churn just over remain Obviously, the time pockets retention maybe are without forward. amount growth noticeable away you've rates quick strong. that to be going impacting with, you go a of follow-up. as But retention years price you've realize other I X little price learnings over where further there modest you X could described, on think

David Hass

absolutely. Yes,

have essentially from X.X%, and would would original constituting Robbert in I about growth, X.X% volume. you last is through been if price, X.X%, guidance, on year, seasoning our mostly recall, midpoint February which X% revenue So from X.X% communicated carried

pricing As essentially, original back softer have no our different second does certainly indicate X.X% we that that's half, the at to than on contribution.Maybe X.X% to in half, move getting but is up a to guide. no volume to question, sort different midpoint, the second X.X% of stepping we opinion us X%, Andrea's and now from that

we're like original that the and changing guide. of pacing flighting anything. it's of So That's perception just not

so we And remain again, pleased balance. and

through sign benefit know to doesn't delivery to newest multipronged that's customer focus, the across sell that the as demand, to next long our and regard channels continuing what stimulate drive to And I what They we're stimulate customers you're places with of from seeing think price the would that blade of and the and we reflection business, razor direct dispensers that offerings. is some in as our approach that's the to really to we as continue the i.e., price know volume continuing we're be. retail to water, a today. in is continuing up long and homes of if importantly, have ability learning retail-oriented of our our to category, more used as multiple learnings and

Operator

The [ CIBC. at Parrow next from ] question Johnson comes

Unknown Analyst

or I seeing can you wanted you're to the can share your metrics experience, share in side the customer digital ask interested commentary and in but customer overall, of but how some rate of ratio about I retention that the to you impacting your complaints on provided about making that know the side? attribute And growth I the you growth overall you're was the it's especially remarks, shared you times? anything digital improvements prepared whether weight is there? business or any volume this digital the business, and the can side you the

David Hass

point, also priority, center, the on mostly phone-based a both amount with X is digital Yes, in must-win was your the to is of to and the and X the delivery available with also customer AppStore XX% is agua.com is John, new -- easier dispenser and improvements that handle which to not cooler.The enhanced upgrade we're demand. significantly be in have a of customer of that deliveries. of question to interactions.So what Mywater+ to home time be And start against shop customer upgrade experience to content will interactivity company, and and app, was there's the Apple asking year, the obviously on-time our you're significantly full, spending by the to our increased on that's from end learn which or rental And the and to the a day the websites easier of later the only in a very with historically aesthetics to We've chat which week I'm to, then to or to evolving we a voice, and glad will It from capability. and X And to -- investment start as Android, hours disproportionate the introduced more days the deliver we're expanded app. and social. our about for Spanish It now more and intend a with it able begins just more water-only X but QX, make interaction, about our our because service. more which even which online. from we also in category, the X-day But in water.com #X combination effort a to exceptional but up language order available the category.

So up to we referring specifically those of we're replacement save starting The is time the is voice all use for social in rate. what the significantly. much you're increase then that the translate the call metrics to faster we which overall, see chat, response to of ability of which response and is time

rate track every we save So day.

service, for maybe specific We that call many tracker how through shows experience or lost our the sign that up to move leads them center. people call many usually an a a people how we have

very working with So driving reporting very, performance. those those We're out tracking these improved all metrics, not we're team. on but our actively management fronts,

Unknown Analyst

long-term allocation. on I thoughts move the balance to capital Any to then updated And wanted sheet.

cash the right you're are it what's like the on business the ultimately, this mean, in ability expected in long more to flow the given term. wonder want trying or interested this sell need sounds I'm year, shared long the discontinued plans you You hold but your operations. to what for over still of better constructive EBITDA I to conversion, term, cash results, I level free increasing

David Hass

Thanks, Yes. John.

the we within monetization sales, we potentially on remain even remarks, next mentioned and we openly two asset prepared pieces we'll communicate clearly within that two May. of obviously them business of the pleased close in the our are very And and of and quarter on this to month in call, likely those the the regard market. with So this with of

remain two of representing buyer both continued with data preparation, remain dialogue other active, universe, in interactions. those sort The

on to of was at as on particular talked outsized European a portion highly at European first the remain and pace and the the set was we a was strategic buyer time. of sale value there. that we that that comment continuous won't about that I multiple valuable of to -- -- So an countries business. That

of regard regard value customer point that So growth. we use, right drive be we acquisitions to to activities be future, are that not our the for our obviously, again, commenting the with long-term at level.With committed there can we're constipates not stimulate There to of specific on the X.X% this unlikely proportion set it midpoint. assets. remain to would Again, capitalized. But new the to spending at are guidance next at

water.com, and Mountain back, activities we drive which At know improve programs, high app those organic our question there. was the through Valley. there expenses, to like commission proud to again, all work growth.I are the As how we things we're food think traditional this point, with regard is and don't really high previous a of

And a trying assess to it's best so really we're to very grower pace outcome business that the as for rapid that we're continuing keep with.

be spend repurchase, allocations to to dividend, date. against. to we So communicated those we've to share regard would values remain committed the With

not on as As about the net with the to to it. ratio, purchasing remain leverage de-lever in or international M&A acquisitions will talked means or from continue we've the cash We other sales will down obviously, acquisition grow either do X.Xx we far side. lower.And XX then further as give that Again, focused. guide it ticked

with a quarter. a trying tuck-in given to to guide You want particular something us do any hit not in buy

So there. patient we remain

the more a some of expect on that strong to have as We through pipeline year activity behavior. we and tuck-in hear progress

Operator

comes The next of from Bank. Deutsche Powers Steve question

Stephen Robert Powers

had steady level on some in may and I as be units you've efforts been about route the of Can ceiling further a has a pretty per some watermark. for more the runway that And symbolism underway progress for on think the impressive. optimization metric of you that be time route I would the wanted optimization? try and sort to how talk now. high that love guess, metric may or day what per I where much I terms is perspective optimal understand there of

David Hass

per day. combining And a disclosed with And midst revenue the that businesses optimization of X% units in we're to drive Yes, rollout that's X.X. route quarter. to definitely and obviously of also new route schedules. and we're the automatic increase our the X% we've program, to for But this continue core

currently Saturday And So heart driver some a route traditionally work to or you our sits know this organization out. enabling of could Sunday.The some the we X-day we on us or the Friday, are X-day is as start to exchange new that technology are that racks. more Wednesday retail on those us were Tuesday but efficiently from the build are allow residential, to both implementing a at include X-day also partners with week schedules, deliver schedules and Monday commercial,

a that. on truck, expanding on but X-day continuing to a on basis production So drive and capacity cap by assets there is our but use daily assets basis There's to a utilization so we weekly not a schedule the branch only the assets a of are natural currently. and available much only to week truck

Stephen Robert Powers

start rates, mark I the The rates? growth for is in guess, I unit could. in But that to trailing I trailing the to you there this if high. metric to clearly, the basis a second been at we've grow really do think what around X grow are to those hovering sales dispenser that such start aspired -- the a XX-month of about incrementality sell-through question, And the are rates million of your I point again, that talked order that you achieve of about the metric on time. XX-month as retention that need -- progression kind see to again but metric, guess some past,

David Hass

we sales Yes, continue strong. to see

new up continuing year. that and XXX,XXX forecast sales usually about XXX,XXX is we're those existing quarter, around are sell-through was replacement I what of users dispenser would X%. X those this This And of And million say with to are users.

from up through So every to approximately we we're X continue base -- That year million consumer I are new as And we follow. a serve that this installed the sell-through to can years sell that's date. retail over units. that year, said, to essentially X%

the about good feel trend. we So

that is Our stock retail sell-through just levels sell-through we that higher, level. at replenishing rate is to but X% obviously the the some ourselves significantly of see from

Operator

James. The Pavel comes from next Molchanov Raymond question from

Pavel Molchanov

M&A was just ago. Getting that minute topic back the covered to a

for you which of the are bolster existing relevant look As presence North establish the parts a you America or to either presence? most an at tuck-in opportunities,

David Hass

Yes. This Thanks, Pavel. is David.

with pretty a again, we diverse On have side, and to branch regard reach network. wide the M&A our

the that we these deals, to willingness or family-oriented precise. entrepreneur be look we more or much love of the It would planning tends As to to succession be operators. generally

the to see so to the will price.And look there seller obviously where board. relevant the analytically geographies at the willingness look across with definitely we And so of then the but match to of has seller opportunities, and that the are we willingness right do

presence Our fortunately, But that has though, pleased pretty is of wide, we're pretty and and or to timing patients it again, sort seller. of that. with match with willingness unfortunately, of

Pavel Molchanov

anticipate crafting team, current should progressive the dividend at rate? strategy you're Or As you've for beyond last policy levels we X years? the kind the assume off that of you do had that the XXXX, it maintaining

David Hass

able our exposure notional obviously And reducing over date as planning, thoughts But and to quite share money to we'll we of the what and owners we've share again, last Board's yield different the that policy the sort as head our of we for the 'XX, Obviously, investor as Yes. dividend we count, to direction, the proud program ability collective sheet communicated return of to will reflects last heading that X to date. the yield balance the owners the to into itself.So of feedback years. as be been returns with obviously. At the with years. do share flow helps XXXX very XXXX. to Board we've the X that reduce but into this over pleased dividend of I will share have view repurchase head their into received constitution decisions allow a to time, that exists to that we're then regard

Operator

question an The the follow-up Derek is Lessard, next from Investor.

Unknown Analyst

more pointed the that pertains the ARO Again, X.X. to question as

efficiency the of what gains. that and was the curious how route driving Just much X.X entails

from you did increase you the to did curious to just but think days, Now I what the X.X? delivery point talk is upside earlier

David Hass

large is feedback. associate of Yes. part Great Essentially, it a question.

what So to out a doing what's for who route order period So route would a delivered feedback. we're a the it's day. day, wrong going of when we've do meaning we're wrong deliveries there? hundreds than time. share you lot different a associates of what's been going for are feedback. listening It's now frontline and owners park of be direction? getting with to the with What's thousands with wrong there of it the telling location. to needs regard its Why Tesla every optimization, here making with going work is No for pinning the boundaries, our to customer us ones and Every

X not massive And It's just technological change. feedback X.X, side a X-day and if providing not the It's associate Again, it's lot to that it so a that, around better factors into but some that involving constitution more call that's the you technological will. feedback. outcome. causes us

Operator

the comments. I turn closing There back call are further will now for you. questions. no over Thank

Robbert Rietbroek

in for continued and interest for you Primo attending call Thank today's your Water.

team As we I growth. focused have to overall, sustainable the right believe we the win. hope on is one start And can tools is build to tell, our you Fast on. driving

ahead We our and lot us, committed taking have I along of level. a next team, to Water of with work are to the Primo

Operator

concludes Thank please conference for We for you. your Ladies you your and today. and we disconnect ask lines. this gentlemen, you thank that participating,

Primo Water (PRMW) 9 May 242024 Q1 Earnings call transcript