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Primo Water Posts Record Q2 Sales, Net Loss Widens

Posted On: 8/15/2012

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WINSTON-SALEM, NC -- Primo Water Corp.'s third-quarter sales increased to a record $25 million, up from $20.7 million in same quarter last year. The 20.6% improvement reflected growth sales growth of Primo's three- and five-gallon bottled water and dispensers. Offsetting the strong revenue growth, however, was a loss that widened from last year on impairment charges.

Sales in Primo's dispenser segment surged 58% to $9.3 million in the recent quarter, up from $5.9 million a year earlier, due primarily to new locations that offer dispensers as well as growth at existing locations. Water dispenser sell-through to consumers grew 36.7% to 96,500 units.

Water segment sales for multi-gallon purified bottled water and self-serve filtered drinking water vending services increased 3.6% to $15.4 million from $14.8 million year over year.

The company's second-quarter net loss widened to $26.31 million, or $1.11 a share, during the recent quarter from $1.98 million or 10¢ per share in the year-ago period. The latest quarter's results include noncash impairment charges of $24.9 million related to its Omnifrio single-serve carbonated beverage technology.

Primo Water said sales of its Flavorstation home carbonated beverage-making system are progressing at a slower rate than originally expected; it plans to pursue potential licensing partnerships for the system, or the sale of certain Flavorstation assets and technologies.

Looking ahead to the third quarter, Primo forecasts a loss of 5¢ to 8¢ a share, and net sales of $26 million to $28 million.

The company also lowered its outlook for fiscal 2012. Primo Water now projects a loss of $1.37 to $1.44 a share and net sales in a range of $94 million to $100 million. Earlier, the company forecast a full-year loss of 17¢ to 20¢ per share and net sales between $118 million and $126 million.

For 2012, the company expects water sales to increase 12% to 17% and dispenser sales to grow 25% to 30%, compared with 2011. It expects to end 2012 with between 24,500 and 25,000 total locations.