PRMW.TO - Earnings call transcript Q2 2024

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Operator

Good morning. My name is Lara and I'll be your conference operator today. At this time, I would like to welcome everyone to the Primo Water Corporation's Second Quarter 2024 Earnings Conference Call. [Operator Instructions] I'll now turn the call over to Jon Kathol, Vice President, Investor Relations.

Jon Kathol

Welcome to Primo Water Corporation's second quarter 2024 earnings conference call. in mode. currently are participants listen only All the The website available at being webcast statements there performance. and Primo Water's live on regarding looking PrimoWaterCorp.com forward playback. This call call future conference financial operational is for contains company's and will be The of BlueTriton estimated strategic transaction, rationale expenditure and capital rates. and anticipated including benefits the synergies court approvals, ability Primo Water completed terms other all. The at or of are of facts. to the on not exchange The expected receipt transaction, and statements that regulatory of agreed and complete the stock timing historical transaction should These press statements Harbor release. in considered Statements statements disclaimers Safe be cautionary in connection the earnings and with in morning's this contained regulators. The these XX-K And quarterly other Form reports company's the statements. could on securities and actual materially differ annual company's performance on from Form and XX-Q with report filings to And expressly as by statements company no the undertakes these forward looking except update applicable law. required duty during comparable when A is measures any with estimated. discussed financial GAAP with call accordance most reconciliation non-GAAP the of in being the the capable of data measures company's in investor the earlier released morning this the included earnings announcement second on Is section website at or of company's PrimoWaterCorp.com. relations quarter the

slides to our we the webcast Haas, Financial Rietbroek, Robbert included Executive and to accompanying assist Chief Officer, discussion, on of supplemental Officer. you David presentation Chief I'm a throughout copy earnings a by accompanied today's have in deck addition website. In our Primo Water's

questions investors will Today's management the focus updates addressed turn from the from As the over continuing Water's BlueTriton our merger will previously this Robbert. comments question on or that, today's addressed and live have Instead, answer to to will call Primo related during session call. in and analysts Brands pertinent I be call. With taking proposed will this standalone we team operations. Questions now with results and questions be the moderated current selected on will been announced, be not call. during scripted most by

Robbert Rietbroek

customer-centric the Since of as our commercial good new as solutions. Thank includes embraces morning, a that you, beginning must-win portfolio everyone. strategy and leveraging team on year, well of Jon, our hydration and initiatives, focus priorities, this mindset, relentless growth a a

focused to partner and stakeholders, are partners delivering customer other as choice and of must-wins on experience, a a retail operational ourselves key positioning Our excellence. superior

portfolio brand sustainable are is strong. results driving Our and growth,

water of X.X%. and were million, across resulting up growth XX% our well growth. our adjusted gains revenue the Our versus while of consumer the the results targets. Total growth brands second of growth of balanced in and and generate Adjusted the was the current revenue progress increased as demonstrating offerings our year, Revenue of with economic environment. across against to sustainability and of and margins and quarter of rate strength priorities, us channels, delivering strong showed combined at X.X% against growth twice by The nearly our they discuss are consisting continued X.X%, I of rate across choose consumers which XX.X%, pricing strength and solutions the high-quality like a We is a and customers. growth last increasing priorities our business in unit solutions pricing, higher healthier strong, organic cash of focused driven however moment, revenue as a $XXX in quarter flow health must-win our EBITDA remaining the category, of broad-based million enabling expand of to and solutions our direct end free water exceeded prior offer volume with organization, the X.X%, gives thank was the hydrate. to margin EBITDA hydration. to commitment for and frontline our focus reflection the for David associates meet adjusted guidance and perspective, us full-year EBITDA staying prioritize publicly demand margin their to to quarter. embracing expansion. Both our dedicated continue to high while will profitably. From lifestyles but a them would details growing of drinking and business results $XXX confidence recognize and issued consumer macroeconomic on the demand, more water

potential We pure parts usage fragmented, in continue to play all solution growing has see highly America the as category. High-quality company and and large, is drinking a water occasions. growth for the and a water North appeal water day universal

Our approximately residential XX-XX, healthy of revenue split remains commercial customer ensuring base and between a balance sources.

pleased opportunities beverage and including broader benefit the volume we tailwinds, in to compared and growing grow future company, our additional beverage environmental are concerns. from business to continue that category, a both As we price. Furthermore, revenue current

of to extensive resources reinforced the I are that With source progress arriving priorities year. earlier must-win discuss this stewardship. specific upon Our let each availability identified responsible ensure of water dedication and by that, our water us our

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

to customers products Consumers Valley the high-value our gallon driving select bottles PET, all Spring to door, their at per on retail direct way delivered and in value Mountain growth. multiple and a We aluminum station, from up our and sold of or focused price from at refill locations. super-premium are on-premise glass, water, various a for price at multi-format annual can and sold water maintaining tiers, $X.XX acquiring gallon

impressive I to results. deliver Our on spoke Valley, last increased about which quarter, focus continues Mountain

revenue During approximately Mountain Valley the over by increased year. we retail second our the quarter, XX% prior

to on-premise, convenient, which country for XX-ounce in and channel, X.X-gallon, We of of brand and began of retail our are Valley water food with direct X-pack, our and single-use is see products. Mountain continue the throughout stores to demand in levels high launch foods multi-serve, aluminum our already natural Valley an a a off X-gallon, sold we and the bottles, customers to start leading single-serve, at selling impressive QX. Mountain water spring

growth scale XX-X. support our to all currently in bottling are We glass the of of Valley operations running three continue Mountain and lines

a like to and Friend, our Movers, it's media easy frictionless programs and us. where have ahead to do a experience we include end-to-end planned customer campaign will Refer That marketing Looking Returning business with customer broader Customers. a targeted portfolio, recruitment

are to touchpoints We their various consistently enhancing improve consumer experience.

MyWaterPlus up design, improvements with to increased promotions, when through was chat interactions enhanced customer days our rapid our the chat we focus to a our of had via our six experience engaging with Experience our available with as reaction The and features our efforts app is over streamline particularly increasing to request enabled now feature, quality our Center, our the easier traffic customer to coverage of launched the functionality, week. By fresh Shop upgraded service XX% on initial we XX,XXX assets journey, to shop-to-car support water.com and features, Customer a customers encouraging. and Quick resolution. a quarter, digital customer with access This

have X% Google Our improved has our rating improved XX% Business over from year. Net prior the Promoter year, scores and year

retail is through direct-to-consumer second channels, our The one be of change the delivery refill must-win with meet end locations preferred solutions water like partner. to stations. or or We our across numerous consumer partners the

We dispensers have drives an water and of growth in portfolio we offering of across our and to refill, starts and sale locations or at Water the of customers and needs exchange, of with Way. Customer meet connectivity our Your retail, solutions. water volume customers' budget, call which increasing water direct, each what the number

certain retail display During racks the to our were secure with support we stores to additional second major quarter, in exchange capacity able channel.

effect business. The in and having volume a in gaps filling capacity Our will locations driving focus drive stocks future customers exchange and the by is increasing growth. in noticeable revenue on space double-digit growth and increase white

areas. taking convenience including our and is chain upgrading as facilities, we evidence machines of begins in customers, with and XXXX. well As suppliers, is current place associates, were of associates, It and evident distribution of for agreement with growth, a in top an our these business, future large of our begin offices, well refill break into to of is production X,XXX safe and essential incremental and parking efforts. all place to remainder potential of locker aspect workplaces, a U.S. rooms, partnering our whose across areas, awarded of priority share our associates environment the we XXXX The are as to and stores dedication concept this recently thrive, their Ensuring Placement up stretches will the committed enhancing to machines aspects every and in owners.

our and, wildfires our emergencies. Last quarter, in in results water City base engagement. and the our products is need about incidents water as the including Program, our pleasure and of disasters, and also times Mountain times community community promising on Home of states, with had with also embrace once and and Trails, to Springs Mountain how grocery involvement of themes a assets, retention our mass the areas services free gratitude our rewarding in quarters, business includes an an on of available stations, example progress our One spans a but Brands. I work, planned such top-to-top products municipal model, level throughout the partnerships Days the together. natural customer the high fostered Hot is XXX achieve have of enhancing in to retailer appreciation cooler more retailers Safety algorithm, adopting of to for being QX Israeli and of by has like best sheet communities. through in deploy and Valley even Community support traffic cash well their appreciation DIY, of and We for sale refill to partnerships, are we would for plan extend supplying hurricanes the water several websites as aimed By across the world-class interactions and conversion, and in the our retail, a live I club in stakeholders stores, part in engagement. well our American-focused stores second as analysts investors as We a at sites meetings retailers in and Walmart, reported with associates and yielded recently of co-hosting well all element of dispensers of Summer spring quarter. passionate North water.com, water. David raising America. and and mindset. The the at need, our beyond again Depot, greater coming in their we safety practices, investing These involvement I extensive my like and European and safety balance the had BlueTriton we top-tier and safety providing of betterment times growth included our provide. Costco, the cleanup leverage, engage types across prominent and to we and with rollout success on continue brand. key like rolling e-commerce, merger as low select capital Associate can home, the strong generation associates the as like awareness for of exchange of desire with during our our strengthening, review launch with as time strong Lowe's, home Parks flow Valley merchandisers, of providing a course, serve maintaining, culture, accessories, water and our summer their above the services overall as our numerous and these of for found went and and drive North these program to we chains personal associate

to efficiently structure is our excellence, and highest as operational our the safety service and associates' we to continue that valued organizational deliver have optimized scale product third must-win guarantee well-being, operating we to specifically systems and quality customers, an The grow. and ensuring

for the our quarter our second our traditionally our to with were customers feedback moved six- XX% as busy the holiday from strengthened summer. in began exchange water seven-day we positive During and We inflow of schedules the into able increase the period service on-time support. rate channel we delivery quarter, on second direct to implementing

time had channel driving business calls one-and-a-half an quarter. Throughout increase service versus days integrated our last last refill over uptime quarter, our machine operations, improved Our by processes. XX%, address and are of we to

line team production water of capex service of focused and and pricing lines on employed the an installations providers. We per per the utilization, during high-efficiency our second installation high improved being and brought waste a performances nearly that production Pennsylvania of new the in remain Ephrata quarter, continues, route same density, line. indication route day us asset optimization by and quarter. driving routes, output more at value by The X% enabling of high-efficiency returns. strategic improvement deliver The the our units X%, now are filler to positive capacity the online mix. and refill our we principles the line The are of can and technicians extract the the bottling we double investments During reduction route of from increased of revenue our volume per

to we remain by aspects distribution our we annual ultimately while an the the strive team rate assist their our XXXX, our to productivity freeing aspects deliver advanced serve to We overall quality to the associates some up and roles. continuing this on responsibly year-end of speak million exceptional run cost to and full-year robotics customers We process of offer planned $XX optimization committed source on and a to of business goals. From the of enhance our are the and to more focus utilizing previously will strenuous our to progress David program lower quarter and announced planet the to inhabit. experience. sustainability perspective, to The track is savings the achievements will protect that functions,

implement our water and to our continue more propane, increasing offering. part and reusing, and fleet springs. recycling our water product the XX will and converting our and glass to limits, viability the that permitted strategy aluminum our carefully withdrawal XX% on wells of sources, long-term XXX environmental plastic is of as the ensuring monitor responsibly, use of include than our which focused of use We refilling, sourcing own of our less of eco-friendly withdrawal bottles, we We rates,

Report, these this detail XXXX which improvements our Sustainability results be later will released We quarter. in and will

a We and and profitability have volume to a balance clear deliver growth of plan with pricing. favorable

results of of our that resources Our associates, delivering and stakeholders. combination are unique all benefit assets, strong capable

are well success. future for positioned We

David over and our the to again financial our our Water Associates review and to performance provide call and once I the turn in outlook, excellent of over call XXXX I will contribution to all support that, results full-year the now detail David. turn I greater the would Before to business. third-quarter like for to Primo With their thank

David Hass

Robbert. Thanks,

continuing at of As end portion are of discussed significant the international our a operations disposed results assets, today we thus a for financial reminder, and XXXX, of our only.

discontinued not unless covering are We noted. otherwise operations

The to $XXX our XX% increasing high quarter EBITDA of adjusted revenue X.X% million, our XX.X%. of guidance. results metrics exceeded EBITDA second recent end operations All most the continuing increasing of included million, $XXX with adjusted margins to

becomes is across Water's quarter growth nature refill We customers businesses counts or exchange approximately includes XX activity the was activity indicator continue the additional balance, any of a well definition revenue X.X% each or from channels included strength different acquired our the the the be inorganic water water After irrespective normal activity revenue our versus business known. Volume of strong again, channel additional came year. A $X.X water approximately in volume or acquired in solutions, X.X, indicating expanded will the of as customer this offering, in that supplemental and solutions or versus traffic were from in of from Primo disclosure as counts. where contribution, bulk-oriented activity. Separately, business related closed of our Within directly of not part to across ago. results million, be have case, means, base. to all complementary overall our our channels. the pricing deck. believe with for break table splits customer acquired Volume Once to growth, are customer sources. X%, volume price months, or $XX.X X.X% prior retail actual contribution our related out businesses earnings health of million, contribution our we primary and with X.X% any our existing additions approximately coming months organic or inorganic can than into X.X% the from growth, both of XX acquired organic that comes consumed new volume less approximately approximately gallons or to split

and across channel. in welcome channels, refill our strong You volume exchange the will directing our in each in occurred price of X% except the water water decline water notice that gains filtration channels increase XX% improved, we a Within growth of and revenue and price for water and had dispensers.

our The The representing wholesale the elimination retailer, to architecture. of from XX%, is our through works XX% units Water, the Premium sell-in business, on-premise as by and the a was portion volume expected and water XX%. other driven Mountain pricing decline water of Spring Valley retail tariff lower dispenser channel, the of declined which up primarily prices

strong first of heels very by through approximately of dispenser the half negative is water XXXX, quarter, business a up by first offset X%, On volume of the and the pricing of driven XX% XX%.

coffee XXX,XXX the channel in to the current services, point which X%. not from a decline in other The emphasis end units non-core the of office approximately our approximately reflective of items remaining quarter, or Water model. dispenser customer, our retailer was is those sell-through, sold up is

As a the The online. selling enable model residential through and the our the sale of business two business approaches water our of and direct and customers of growth commercial and retail in water to to revenue includes water rental recurring dispenser growth. predictable our approaches and water our dispensers in contribute reminder, dispenser. water solutions partners Both

our particularly growth water connectivity greater the we brick-and-mortar higher e-commerce We focused have visibility with partners, into where retail to been channels. compared on to solutions and our connectivity have

original from discussed in tariff, funds, we in we record reclassified last was a calls, a transactions. As receive import manner the was When under process but the water year and them refund XX% initiated. same previous our U.S. previously category dispenser government as was the

quarter During remain approximately did When the but of through second refunds we $XX.X the receipt. of received, of the process. we be predict received cannot any XXXX, confident timing cumulatively QX, refund we receive refunds, not government We million. last payments, year's including have nature will reflecting that inconsistent the

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

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

flows, On of income. generate the income of interest cash is our full-year our revolver, which approximately today's recently September flow time revolver flow balance basis our of on our when from allow customer to XX%, in end interest, a In Direct completed. year-end to pleased stood year a for a rate once merger last within approximately second senior at revolver. Specific on low our XX-month XX-basis million NUCO establish ability $XXX yield XXXX. the environment. strong leverage the quarter, be net the and while a $XX.X quite remains to retention notes versus maturity and with payer, we million the sheet extended net Similarly, approximately will X.X increased cash quarter EBITDA, a to Water balance point million we of approximately fully the ratio of considering cash we interest basis, at cash our us the both end of to liquidity our net with capital are second to an and financing proper trailing expense the the Additionally, operations, times XXXX, quarter unused increase Shifting we sheet, paid interest carried $XXX.X approximately the improvement discontinued our adjusted on interest of will the cash XXXX. and our support

EMEA the and for Portugal the drink Foods, million, $XX we sheet. being bank, extracted of sale The Israel dividends the the year-end. completed run from are the sale the including the QX strong. remain timing in to an the During UK in investment business of interest close by business, and $XX.X business. process sale by our our the of the we QX, funds After Due quarter, when complete is Israel of businesses We on our sale, levels approximately completed not and reflected successfully $XX.X balance Portugal to are food million. for the target million UK second of

free a capital, $XX to net earnings, higher flow fewer second driven was a $XX reduced primarily interest by of of and taxpayer shift cash years. for expense, levels due improvement improved prior net NOLs results adjusted totaled offset quarter working The and Our increased to capital by the as million, relative year-over-year increased cash expenditures to we million. taxes improvement

growth As is a year-over-year discuss year reminder, contributes our that different I in will which minutes. in adjusted free full our few cash a increase guidance, XXXX flow than to how

We pleased of began inventory improved a receivables cash basis. The quarter on still second with the year-over-year flow results for the benefit today. are year a that second the free and half and reflect incredibly series in levels momentum of improvements are driving last

has per was Discontinued $XXX.X operations our into deck, the supplemental adjusted contribution, free the as we in quarter guidance operations. contribution of flow posted provided guidance contemplates our cash supported of XXXX flow free quarter adjusted continuing year XXXX, outcome ability our To flow, XXXX, million conversion as Once again, operations, this full for XXXX for will our any of pleased our outcome. and continuing table for of in strictly cash results are a second more in guidance, XXXX been summary, outlook, primary not quarter help maintain XXXX with appendix I outsized our earnings our free high operations in bridge this we by our $XX.X be will into continuing million. EBITDA our slides. quarter to results of XXXX. In of a half be of supplemental financial for the covered. into we forward cash transition XXXX's the of As earnings measured we which head third in expect the a Because third of our

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

midpoint. XX $XXX the improvement implied at QX with represents from $XXX between year-ago adjusted The XX.X% margin period. to EBITDA adjusted an We and million, EBITDA be basis the expect a XX.X% adjusted EBITDA point million of margin

year $XXX with adjusted our $X.XX the projection XXXX revenue as we implied be full and first $X.XX the increasing billion of growth XXXX margin at the EBITDA X.X%. benefit benefit contemplates For to the increasing an forecast at to XX.X% we are year between operations, business be from in revenue billion, Similarly, from midpoint. of of $XXX program. continuing between The million midpoint are half as million, guidance full strong with our year, of some well balance and the in increase optimization of the EBITDA both adjusted start your our the

reduction of will another within QX, discussed we took These total savings toward rate $X This our million approximately goal. During in on guidance a run we annualize cost activities achieved million basis $XX adjusted approximately $X to is million. out And action that on to bringing XXXX EBITDA during be million, XXXX. increase. million the will QX, $X $X our reflected

XXXX. to on since or amount NOLs, EBITDA February net NOLs be million available have of million XXXX $XX and in approximately includes operating the the $XX million XXXX million of to guidance approximately which of approximately midpoint We are Full tax guidance the cash $XX.X XXXX. We million capex. range, of the expect guidance we $XX $XX our of are million in approximately increase capex expected million still our forecast available cash taxes $X X% by plus of adjusted guidance be through XXXX maintaining losses, revenue of use for in XXnd. a driven increase initial $XX XXXX U.S. the to year The year strategic an in of per at $XX incremental million, an midpoint, utilization

range For the remains strong low our now and carrying to $XX of XXXX. balance full guidance are sheet year year of fixed million. result net the in expense million maturing $XX approximately and halfway down to a our previous million $X of cash cash X.X% is interest XXXX, interest rates structure XXXX through of decrease a our very we earned million capital rate from to as million $XX The interest revising midpoint $XX approximately

core rates if between conversion Additionally, the is flow generation related model, the steps decisions. of to at income but along interest we increase macro maximize available rate Fed The $XXX capacity environment $X reduced million the these free market adjusted throughout our bank $XXX could we all decline opportunities of forecasting will Combining any take income or cash business experience XXXX. and continuing midpoint to are of XXXX, cash yield with in health million million operations and attributed from factors in increase flow our in $XX adjusted and been included to XXXX our for should three guidance. This cash the our following to replace held commitment solidifies EBITDA discontinued adjusted goal. that cash not outcome. the each operations. in outlook for with sale discrete international due to million those in have be This commended tied free free assets this of was the guidance achieving The items our speed flow to of the uncertainty sold the timing team the

a XXXX remain confident the $XX on the basis. run million for First, optimization rate in we remaining balance of improvement program, achieving the business

the from remaining the uncertain due quarter and timing process. benefits additional the the outside of received amounts refunds the the government Second, during refund tariff of mentioned to

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

suspended year-to-date discontinued until board Water they have operations They to of dividend We these $X.XX Prior In year. On approximately share parties. dividend our sold. closing, in the remain for following success. shares shareholders the outlook, per profile interest received share flexibility, per foundation from of BlueTriton, of are $XX.X authorized to Primo date the a an closing the of directors share closing. to actively are the to intend, announcement and board of XX% have being $X.X merger a which prior year, a marketed our the and merger repurchased As multiyear and with businesses million. financial previously date and setting a improved third will are shares several of we communicated, with had announcement, consecutive of of until share, increase million. common we quarterly the issue Recently, last a period Subsequent special growth our repurchases a the $X.XX basis, to however, for dividend record we with common for our repurchased step-up to over continued have in the per long-term approval $X.XX path increase payment solid with compelling continues of quarterly along BlueTriton. dividend interim

for We the for the merger over with BlueTriton positioned Brands. With are will Jon call well that, back to I turn Q&A.

Jon Kathol

first be we call. during proposed analysts mentioned to Robbert pertinent this David addressed be I will BlueTriton. question or investors selected Robbert, have due earlier, as today's most by with merger not live Instead, and the been you. David, the from during questions taking questions call is and the will for

role. view quarters key few you quarter's were the performance, and a this takeaways? your do what How into You're

Robbert Rietbroek

a of Jon, balance into in over quarter, by our down the X.X%. and contributing broad-based organic in enabled represent the strength growth. This volume, between growth and and am price we've our overall with us X.X% which this growth, This macro at water deliver the inorganic few last revenue has broken environment continues I quarters category, volume pricing, pricing of majority X.X% X.X% volume across includes beverages to revenue and channels. each actions. from in to X.X% nice that The experienced sources broader occurred the and combination of results, a balanced encouraged

are very know, growth focused agenda. on associates You our our

ads sales time customer of our expansion metrics generating and operating key retail additions, on in deliver in or with full, organic location to continue retention, business. customer We either

quarter sell-through also implies key solutions. of volumes. water increased variances delivered some year. connectivity year and there's sell-through future ads Dispenser dispenser the of again to results, always momentum timing over indicator continued While remains It in in a quarter to our customer X% we growth

second priorities discuss progress control the and on increase summary, in is I cost strong while for to We success guidance in productivity EBITDA, and David to business generation. more leading to continue would overall, strong efficiencies, detail. our this In us But business results of our must-win revenue, driving cash flow make balancing disciplined the and momentum quarter provide with our results free confidence the and full-year quarter. continued adjusted our to ask

Jon Kathol

could notably more and cash the David, bit provide flow? free on on a your key you takeaways, quarter detail

David Hass

Jon. Sure,

on quarter Robbert's first, You know, view strength second the echo I results. our of

be increased to the increase free billion our margin and billion, momentum start strong we first knew continuing. increased quarter volume well XX.X%, fiscal improvements implies through and margin, rate revenue to to as up momentum that This points for annual the optimization flow $X.XX QX This revenue, at year-over-year. leverage XXXX enables high basis driven had us know, basis to from between EBITDA growth growth quarter that increased This EBITDA effect. EBITDA, points XXX XXXX by nearly guidance fiscal double half $XXX rate. to taking a X% $XX $X.XX Gross is Importantly, to results, the that confirms a Similarly, we outperformed guidance our midpoint. strong our our our now versus cash increase million of business fourth adjusted XX.X%, operations and into adjusted with performance you strong margins as revenue is XX.X% our heading efforts the million generation. year-over-year. XXXX. We for raise end revenue XXX Adjusted

nearly year. revised cash adjusted improved in last in our generated enables $XX we which adjusted point Year-to-date, conversion increase by versus performance XX.X%, guidance the our million year, million operating EBITDA revenue of improvement the leverage an and midpoint basis focus million is particularly of more EBITDA. guidance our increase midpoint $XXX adjusted million of as $XXX a model. back, than $XXX $XX implies This XXX same versus with have $XXX our full EBITDA I'm nearly of Our margins of double $XX pleased cash between on our illustrating to million is improving revenue XXXX. When flow, growth year flow operating adjusted us improvement free step rate, I period EBITDA of a free implies XX%. last annual growth over and million. The to The our

While during you recall, free outsized we adjusted was working from posted XXXX. This flow the today. largely cash third as to enhancements and management of of the may XXXX, we to free during we flow cash quarter continued that half expect inventory second benefit capital better positive continue due

the outcome second second we to a of the these lap measured gains As in half we gains expect XXXX, quarter. relative in more the

those operations, leverage, improve we gross year's million of last which This lower for flow to our net is have am our we annual our free free market the of guidance $XX based proceeds, strong conversion to efficiencies, to of fully that both divest raise Our $XXX flow guidance. Overall, adjusted $XXX the focusing million our by increase on broad-based cash which validates subsequently in in included a the which assets international on pleased North results, us adjusted our between confirm replaced benefit cash divested. million, million adjusted on improve $X to earning decision allows America our our flow EBITDA I free significantly to $XXX to and our cash million strength conversion.

with million than approximately leverage and times $XXX undrawn facility. sheet balance cash of net revolving more remains Our healthy X.X and an credit in low

Jon Kathol

product talk sales? to geographic or regions any lines, you Robbert, customer that contributed the increased can segments, about

Robbert Rietbroek

Sure, Jon. We channels. broad-based and in growth Well, it saw all balanced. water was

that note other revenue you businesses. growth refer been and service channel to and co-packing as de-emphasize the when from as our coffee we results. other channel we was exclude to over which office is important our primarily de-prioritize The has it's think these declining business, our I some X% overall non-core

remains bases XX% Our and the XX% in It balanced anomalies balanced North growth. is geographical saw really with across our quarter. any commercial. We very America. is Customer growth customer actually residential in base didn't mix that see

variants. continues Our result the our dispenser is on a value of and up year-to-date a consumer the other the is as Spring is about to good and business our to of remains dispensers indicator of Mountain incremental due about retailers drive quarter was of it Valley after improved retail decline, prices for true the sign tariffs one a dispenser of rolling is should channel, but The order dispensers reducing. into quarter. growing off category, brand up The a XX% and health sold that excited water consumers water the and XX% up Water, of volume sell-through on-premise. timing the really stand out to showed last the X% quarterly This Within the at growth XX% product sold this which customers. future business. We're

water, filling by machines also to our attract expanded and It see to with taken drinking year channel. our and with alkalinity necessary, over expected, retailer's Specific larger room continues brand retail but demand XX% retention, service or within ready get and Mountain uptime. high-quality driving make further. water direct the niche dispense water. with bottle in and periods, refill are its more our a their finding time metrics We're racing drives capacity increased hit our six- demand. their on-premise include in company. for shelves, still over finding offering. We've consumers. of our when seven-day products improving it premium deliveries to huge consistently aluminum a scores rates and a sentiment customer now Valley revenue, deliveries working satisfaction, and even think and improvement potential up previous levels last the opinion an fulfill reach taste glass By the to full natural better, enabling even customer space, our which this improve shelf actions to service doing super we Its I provides machine on our to increased we're consumer improved on to of and distribution. Overall, and our growth improves empty contributed or when favorable success We're I format catch customers ensuring household improve Continued versions and and penetration XXX-year-old more consumers its fulfills crisp volume, and full driving are

Jon Kathol

the activity? you give and businesses your an can update David, sale of us on international M&A any

David Hass

Absolutely.

UK-based in QX, back, deal you business. in include close proceeds call already This in for over these of million. last approximately was we and track Amy pulled year. Israel several of As the $XX.X announcement we sold our from and the June. dividends the UK which remain to $XX when divestitures Eden weeks on marketing position, the added month, happened roughly And after Foods mentioned Portugal strong actively assets our we to on businesses business We million which both cash later this is for business million. Both remain our divest business now $XXX the remaining sold

Jon Kathol

last Robbert, included was a mentioned revenue you of that price. and to volume, balance guidance increase X.X% quarter your X% X.X% the annual

revenue X%. Now increase you've by volume to price? driven increased Is your the annual or guidance

Robbert Rietbroek

XXXX fiscal that by is growth Yeah, experiencing. guidance we've incremental driven been in increase the revenue our volume

our in year-to-date, The Our growth out resilient volume guidance. and guidance volume confidence growth into X% which provides has pricing revenue strong growth be been updated year. can and revised this X% broken

Jon Kathol

views since on Now the with the announced investors I'll let's merger on the with some start received about been color It's merger feedback Can further you've weeks talk to the several BlueTriton. discussion the you. the BlueTriton? aspects of announcement. Robbert, with provide transition from you and

Robbert Rietbroek

synergies. and offerings, up pack proposed positive from on supplier, offer and that the more merits the offering The coming from makes our Sure. and associate, to both term product I'm Primo premium consumer, investor various excited about the and We're come combination calls array to a hearing channels is of it. the hearing with It We're that it's consumer a compelling. perspective. into the that we can categories, investor fit BlueTriton where sense great branded natural received the keeps potential from talk incredible spring, an expected and reactions water of super purified, spring benefits and formats. We've feedback Water in research analysts. interactions customer, diversifies and

to steward to a ability solutions and array residential, resources the commercial, will creating production of with footprint a a we're a on company in we're position customer retail of our the water stage, the be experience, provide purified play from this hydration excited to customers. pure company leader. as a our covering to comment combined From the outlook water to at not the we're of company and of spring and distribution company elevate brands health well-known a a the premium. The the its sustainability financial diverse to be combined portfolio While to for spectrum value new excited as

You future. products the know, to trend, demand water drinking access for our That on and Jon, in sources is increasingly healthy is hydration high-quality means more important.

day multiple occasions, give methods, offerings and parts, product for across choice delivery Our hydration formats. consumers another

Jon Kathol

merger? you bring speed of mechanics can David, us the the on up to

David Hass

submitted teams and announcing mean. At Sure. the continue documents, of filing we our proposed on both Primo shareholder Water, and relations we'll that filing provide filings, contains the regulatory on Xnd Xth. the We investor Primo approval processes. to our XXth, Since Hart-Scott-Rodino section on deal updates merger, June through July Canadian our updates, to dedicated on July are created and presentations, on and corporate page website the which a working

the that, information preliminary information To BlueTriton's the support We as has the which, been statement Revisions form it we practical is SEC finalized. things, the preliminary among as SEC. our be financial regarding historical are forma statement to obtain clear finalized proxy meeting and with intend actively immaterial. approvals to in required performance may and includes proxy We other and is to once company. statement combined is a to as comments proxy working shareholder promptly pro hold statement proxy the financial review possible. and soon filed by The comment subject SEC, before regarding as our

with the happy updated are been keep have We how way. and you things along progressing, we'll

Jon Kathol

you share can performance? BlueTriton's some Robbert, on insights financial

Robbert Rietbroek

volume, things, the the BlueTriton's strong or information business second with data, the in proxy quarter. regarding our was can filed performance available performs dollars proxy Whether this when in preliminary QX statement see SEC look investor that amongst morning, results during well. is from and sales BlueTriton's of filing scan retail website, growth and the we on Well, we that the which section that shows relations other the earlier includes, at the financial

Jon Kathol

for back merger? the one you. both into Here's about What Primo concerns of with of Water getting retail

Robbert Rietbroek

about retail believe We merger. a the one. that We're back with asset. not on retail the Jon, getting first, is go high-quality me worried offering BlueTriton Let into

business more that and a believe was our a accountability. BlueTriton affordable producing the are in of companies Water their plastic business. Poland uses Springs and we leading Life, environment. retail portfolio becomes performance of brands, scan both good $X Rock In benefits recycled BlueTriton their strengthening performed higher and way good water From the the they we BlueTriton companies has quality with drinking done even hydration favorable has be targets Primo and shows and of strive fact, rationale. of to promotes water. Both an available. part trends well. We think a and stewards the of two that recycled complements BlueTriton content in job sustainability wellness in One the deal of protective have retail of content It retail and well. a important features it amount bottles, standpoint, as billion-plus are high solid Pure believe business, sources the Primo it corporate the going

Jon Kathol

David?

David Hass

bottles and business to customers mostly The as Ready their BlueTriton third to in the from bottles The company whereas on-site, capitalization Water purchases. within comparable they merger HOD, serve accounting Jon. in their water. Overall, and more with BlueTriton of convenience large-format and reach the for bottles. or the will buys Primo their Water's category. us drinking our mold proposed expand high-quality large BlueTriton emphasizes a when party and service expenses difference blow fragmented Refresh, bottles Sure, allow capitalizes Primo their bottle the is

You know, this a companies. roughly margins equates to basis in between EBITDA the XXX point difference

challenging to exited multi-serve results business. performs was BlueTriton's presented This a two-and-a-half-gallon co-packing the that and with driving be Retail margin-dilutive. business that XXXX the lacked and Contrast retail one- primarily scan that nationwide well. data the retail today. and retail business side, largely private-label Primo business the business scale, On suggest financials bottles in

Jon Kathol

dividend about you the that Water dividends? can about talk and repurchases be What share shareholders will David, receiving? Primo special

David Hass

Absolutely.

to the have issue some prior and then merger essentially million, dividend absent share with the we date of been and the the announced, to repurchases $X.XX a the through special replaces or closing dividend board per proposed with previously The to the following merger up intend and of payment to shareholders returned As BlueTriton. cash we BlueTriton. $XXX special of would date record share, that setting approval

repurchased $X.X second the million this in point, quarter. You in shares we know, at

into Before yesterday, dividend to last board regular the After merger. Separately, our provide proposed the a new XX% approval increase policy. This over the per of of closing, represents of share. co-board quarterly dividend Water announcement merger Primo expects year. the announced the the the insight $X.XX long-term

Jon Kathol

XXXX? the thoughts on for any half Robbert, of XXXX back plans and

Robbert Rietbroek

consumer-centric to success this innovate executing will level prepare continue as to and as strong. we're year will of continue a volume merger. we in want on and and At sharpen and see set to we next the for separate to Primo into up continue create growth. companies. we Yeah, Water, focused to a team two more frictionless approach, our driving BlueTriton customer I And finishing for fundamentals XXXX high balance the the experience. us Performing at operate the

Jon Kathol

your into XXXX? back the same of David, you. to XWhat's for focus question and XXXX half

David Hass

Sure.

finish know, program. mentioned, Primo You savings call clearly strong. is what optimization team And business Robbert expected in $XX Water we the we the focused the want as to million achieving XXXX on in

XXXX in achieved we with to outcome. $X as tracking a full quarter, run additional continued of another rate basis. savings XXXX million $X XXXX This This on confidence that second our I our on achieving half brings will out to the annualize total million mentioned,

bodes prepare to and subject obtaining As we customers, We with consumers, participants prior when proposed well to head both to merger. BlueTriton, performing the position into XXXX, we approvals. ourselves associates, the well believe are required it to for merger that need for investors the

As always, cash generation remains top of mind.

Jon Kathol

any Robbert, thoughts? closing

Robbert Rietbroek

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

on I team customers' The our and we sustainable win. right build to you and the have to As hope our started can enhancing growth. on, path driving one tell, tools focused experience the is is

water lot excited our Primo Water a team, have BlueTriton you We of are interest us with created and work next journey. step our potential in by for in merger. a for and exciting along your of the Thank the I, on joining us, ahead

Operator

please lovely for this your today. you disconnect your ask that for Ladies conference and We you. Thank concludes a Have you call day. thank gentlemen, and participating lines.

Primo Water (PRMW) 8 Aug 242024 Q2 Earnings call transcript