Primo Water Corporation Announces Full Year and Fourth Quarter 2022 Results; Increases Quarterly Dividend Again

(Unless stated otherwise, all fourth quarter 2022 comparisons are relative to the fourth quarter of 2021 and all fiscal year 2022 comparisons are relative to fiscal year 2021; all information is in U.S. dollars. Non-GAAP reconciliations presented on the exhibits to this press release. Q4 and fiscal year 2022 period ended December 31, 2022, Q4 and fiscal year 2021 period ended January 2, 2022).  

FISCAL 2022 HIGHLIGHTS  

"Fiscal year 2022 was another successful year for our pure-play water company. We continued to execute our differentiated Water Your Way platform, by delivering strong revenue and adjusted EBITDA growth. Our investment thesis is attractive with a portfolio of leading water solutions across multiple channels and geographies, strong customer demand, and a compelling financial profile. The continued investment in our digital platforms, increased dispenser sell-through driving connectivity of dispensers to our water solutions, and continued optimization of our route-based operations provides a strong foundation to achieve our long-term growth targets," said Tom Harrington, Primo's Chief Executive Officer. 

"As a result, we are confident in our 2023 revenue outlook of between $2.3 billion and $2.35 billion, and Adjusted EBITDA outlook of between $450 million and $470 million," said Mr. Harrington. 

"In recognition of our 2022 results, strong financial position, and confidence in the future of Primo, our Board of Directors authorized a quarterly dividend of $0.08 per common share, which represents a 14 percent increase over previous quarterly dividends and marks the 2nd consecutive year the Board has increased the quarterly dividend per share by $0.01," continued Mr. Harrington. 

OUTLOOK 

Primo is targeting the following results from continuing operations for the first quarter and full year 2023: 

FOURTH QUARTER AND 2022 RESULTS CONFERENCE CALL  

Primo will host a conference call, to be simultaneously webcast, on Thursday, February 23, 2023, at 10:00 a.m. Eastern Time. A question-and-answer session will follow management's presentation. To participate, please call the following numbers:  

North America: (888) 664-6392International: (416) 764-8659Conference ID: 80388633This is a live, listen-only dial-in telephone line. 

A live audio webcast and slide presentation will be available through the Company's investor relations section of the website at www.primowatercorp.com. The webcast will be recorded and archived for playback on the investor relations section of the website for two weeks following the event. 

FISCAL YEAR GLOBAL PERFORMANCE  

FOURTH QUARTER GLOBAL PERFORMANCE – CONTINUING OPERATIONS 

FOURTH QUARTER REPORTING SEGMENT PERFORMANCE  

North America 

Europe 

SHARE REPURCHASE PROGRAMDuring 2022, the Company repurchased approximately 1.8 million shares of common stock for approximately $24 million under its share repurchase program. 

QUARTERLY DIVIDENDThe Company announced that its Board of Directors declared a dividend of $0.08 per common share. The dividend is payable in cash on March 27, 2023, to shareowners of record at the close of business on March 10, 2023. 

ABOUT PRIMO WATER CORPORATION 

Primo is a leading pure-play water solutions provider in North America and Europe and generates approximately $2.2 billion in annual revenue. Primo operates largely under a recurring revenue model in the large format water category (defined as 3 gallons or greater). This business strategy is commonly referred to as "razor-razorblade" because the initial sale of a product creates a base of users who frequently purchase complementary consumable products. The razor in Primo's revenue model is its industry leading line-up of innovative water dispensers, which are sold through approximately 10,000 retail locations and online at various price points. The dispensers help increase household and business penetration which drives recurring purchases of Primo's razorblade offering or water solutions. Primo's razorblade offering is comprised of Water Direct, Water Exchange, and Water Refill. Through its Water Direct business, Primo delivers sustainable hydration solutions across its 21-country footprint direct to customers, whether at home or to businesses. Through its Water Exchange business, customers visit retail locations and purchase a pre-filled bottle of water. Once consumed, empty bottles are exchanged at our recycling center displays, which provide a ticket that offers a discount toward the purchase of a new bottle. Water Exchange is available in approximately 17,500 retail locations. Through its Water Refill business, customers refill empty bottles at approximately 23,500 self-service refill drinking water machines. Primo also offers water filtration units across its 21-country footprint. 

Primo's water solutions expand consumer access to purified, spring, and mineral water to promote a healthier, more sustainable lifestyle while simultaneously reducing plastic waste and pollution. Primo is committed to its water stewardship standards and is proud to partner with the International Bottled Water Association (IBWA) in North America as well as with Watercoolers Europe (WE), which ensure strict adherence to safety, quality, sanitation and regulatory standards for the benefit of consumer protection. 

Primo is headquartered in Tampa, Florida (USA). For more information, visit www.primowatercorp.com. 

Non-GAAP MeasuresTo supplement its reporting of financial measures determined in accordance with U.S. GAAP (Generally Accepted Accounting Principles), Primo utilizes certain non-GAAP financial measures. Primo excludes from GAAP revenue the impact of foreign exchange to separate its impact from Primo's results of operations. Primo also utilizes Adjusted net income (loss), Adjusted net income (loss) per diluted share, Adjusted EBITDA and Adjusted EBITDA margin to separate the impact of certain items from the underlying business. Because Primo uses these adjusted financial results in the management of its business, management believes this supplemental information is useful to investors for their independent evaluation and understanding of Primo's underlying business performance and the performance of its management. Additionally, Primo supplements its reporting of net cash provided by (used in) operating activities from continuing operations determined in accordance with GAAP by excluding additions to property, plant and equipment and additions to intangible assets to present free cash flow, and by excluding the items identified on the exhibits hereto to present adjusted free cash flow, which management believes provides useful information to investors in assessing our performance, comparing Primo's performance to the performance of the Company's peer group and assessing the Company's ability to service debt and finance strategic opportunities, which include investing in Primo's business, making strategic acquisitions, paying dividends, and strengthening the balance sheet. With respect to the Company's expectations of its future performance, the Company's reconciliations of Q1 2023 and full year 2023 Adjusted EBITDA are not available, as the Company is unable to quantify certain amounts to the degree of precision that would be required in the relevant GAAP measures without unreasonable effort. These items include taxes, interest costs that would occur if the Company issued debt, and costs to acquire and/or sell a business if the Company executed such transactions, which could significantly affect our financial results. These items depend on highly variable factors and any such reconciliations would imply a degree of precision that would be confusing or misleading to investors. Primo expects the variability of these factors to have a significant, and potentially unpredictable, impact on the Company's future GAAP financial results. The non-GAAP financial measures described above are in addition to, and not meant to be considered superior to, or a substitute for, Primo's financial statements prepared in accordance with GAAP. In addition, the non-GAAP financial measures included in this earnings announcement reflect management's judgment of particular items, and may be different from, and therefore may not be comparable to, similarly titled measures reported by other companies. 

Safe Harbor StatementsThis press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934 conveying management's expectations as to the future based on plans, estimates and projections at the time Primo makes the statements. Forward-looking statements involve inherent risks and uncertainties and Primo cautions you that several important factors could cause actual results to differ materially from those contained in any such forward-looking statement. The forward-looking statements contained in this press release include, but are not limited to, statements regarding future financial and operating trends and results (including Primo's outlook on first quarter and full year 2023 revenue and Adjusted EBITDA and Primo's multi-year growth algorithm), and related matters. The forward-looking statements are based on assumptions regarding management's current plans and estimates. Management believes these assumptions to be reasonable, but there is no assurance that they will prove to be accurate. 

Factors that could cause actual results to differ materially from those described in this press release include, among others: Primo's ability to compete successfully in the markets in which it operates; Primo's ability to manage supply chain disruptions and cost increases related to inflation; fluctuations in commodity prices and Primo's ability to pass on increased costs to its customers or hedge against such rising costs, and the impact of those increased prices on its volumes; Primo's ability to maintain favorable arrangements and relationships with its suppliers; Primo's ability to manage its operations successfully; currency fluctuations that adversely affect the exchange between currencies including the U.S. dollar, the British pound sterling, the Euro and the Canadian dollar; the impact on Primo's financial results from uncertainty in the financial markets and other adverse changes in general economic conditions, including inflation and interest rates; any disruption to production at Primo's manufacturing facilities; Primo's ability to maintain access to its water sources; the impact of climate change on Primo's business; Primo's ability to protect its intellectual property; the seasonal nature of Primo's business and the effect of adverse weather conditions; the impact of national, regional and global events, including those of a political, economic, business and competitive nature; the impact of COVID-19, related government actions and Primo's strategy in response thereto on our business; Primo's ability to fully realize the potential benefit of transactions or other strategic opportunities that it pursues; Primo's ability to realize cost synergies of its acquisitions due to integration difficulties and other challenges; Primo's exposure to intangible asset risk; Primo's ability to meet its obligations under its debt agreements, and risks of further increases to its indebtedness; Primo's ability to maintain compliance with the covenants and conditions under its debt agreements; fluctuations in interest rates, which could increase Primo's borrowing costs; Primo's ability to recruit, retain and integrate new management; Primo's ability to manage increased labor costs; Primo's ability to renew its collective bargaining agreements from time to time on satisfactory terms; disruptions in Primo's information systems; Primo's ability to securely maintain its customers' confidential or credit card information, or other private data relating to Primo's employees or the Company; compliance with product health and safety standards; liability for injury or illness caused by the consumption of contaminated products; liability and damage to Primo's reputation as a result of litigation or legal proceedings; changes in the legal and regulatory environment in which Primo operates; Primo's ability to adequately address the challenges and risks associated with its international operations and address difficulties in complying with laws and regulations including the U.S. Foreign Corrupt Practices Act and the U.K. Bribery Act of 2010; the impact on Primo's tax obligations and effective tax rate arising from changes in local tax laws or countries adopting more aggressive interpretations of tax laws; Primo's ability to maintain its quarterly dividend; or credit rating changes. 

The foregoing list of factors is not exhaustive. Readers are cautioned not to place undue reliance on any forward-looking statements, which speak only as of the date hereof. Readers are urged to carefully review and consider the various disclosures, including but not limited to risk factors contained in Primo's Annual Report on Form 10-K and its quarterly reports on Form 10-Q, as well as other filings with the securities commissions. Primo does not undertake to update or revise any of these statements considering new information or future events, except as expressly required by applicable law.  

Website: www.primowatercorp.com  

CONTACT:  Jon Kathol, Vice President, Investor Relations, Tel:813-544-8515, Questo indirizzo email è protetto dagli spambots. È necessario abilitare JavaScript per vederlo.  

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