Coffee Service

Primo Water reports earnings losses on sales gains for Q4, FY 2020

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March 3, 2021

Primo Water Corp. revenue increased 15% to $505 million compared to $440 million (increased by 9% excluding the impact of foreign exchange and the 53rd week) for the 2020 fourth quarter ended Jan. 2, 2021, according to an earnings release.

The increase is due primarily from the legacy Primo acquisition, increased demand for products and services from residential customers and a $19 million benefit from the 53rd week, partially offset by lower revenue from coffee services and the Water Direct commercial customer base.

Reported net loss and net loss per diluted share were $20 million and 12 cents, respectively, compared to reported net income and net income per diluted share of $2 million and 1 cent, respectively.

Adjusted net income and adjusted net income per diluted share were $23 million and 14 cents, respectively, compared to adjusted net income and adjusted net income per diluted share of $17 million and 13 cents, respectively.

The $505 million revenue beat analyst expectations by $16.03 million, while the Non-GAAP EPS of 14 cents beat expectation by 4 cents and the GAAP EPS of a 12-cent loss missed expectations by 16 cents, according to Seeking Alpha.

Shares traded Wednesday at $14.87 against a 52-week range of $6.25-$17.85.

"I am very pleased with our fourth quarter results, despite a difficult operating environment and increased lockdown measures in many of the geographies we serve," Tom Harrington, Primo Water CEO, said in the release. "We closed the year with another quarter of strong adjusted EBITDA and higher adjusted EBITDA margin, and we are carrying that momentum into 2021 as a more streamlined and profitable company with our pure-play water model."

North America revenue increased 24% to $385 million (increased by 18% excluding the impact of foreign exchange and the 53rd week) driven by the legacy Primo acquisition, increased demand for products and services from residential customers and a $19 million benefit from the 53rd week, partially offset by lower revenue from the water direct commercial customer base and coffee services.

North America operating income increased 58% to $38 million. Adjusted EBITDA increased 43% to $82 million (increased by 36% excluding the impact of the 53rd week), due primarily to the legacy Primo acquisition, improved operating leverage, synergy realization and a $4 million benefit from the 53rd week.

Full year global revenue increased 9% to $1.9 billion driven by the legacy Primo acquisition, increased demand for products and services from residential customers and the 53rd week, partially offset by lower revenue from the water direct commercial customer base and coffee services.

Full year reported net loss and net loss per diluted share were $157 million and $1.01, respectively, compared to reported net loss and net loss per diluted share of $11 million and 8 cents, respectively.

Full year adjusted net income and adjusted net income per diluted share were $86 million and $0.55, respectively, compared to adjusted net income and adjusted net income per diluted share of $59 million and $0.43, respectively.

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