On February 22, 2024, Primo Water Corp (PRMW, Financial) released its 8-K filing, detailing its financial results for the full year and fourth quarter of 2023. The company, a leading provider of sustainable drinking water solutions in North America, has demonstrated a strong performance, exceeding the midpoint of its guidance for revenue, adjusted EBITDA, and adjusted free cash flow.
Primo Water is a pure-play water provider, offering products and services such as water delivery, exchange, refill/filtration, and water dispensers in 21 countries, primarily in North America and Europe. The company's business model initiates customer relationships with the sale of water dispensers, followed by recurring revenue through water direct and exchange services. With 75% of its revenue and all profits originating from North America, Primo Water's European operations are yet to be profitable.
CEO Robbert Rietbroek expressed satisfaction with the company's service to customers and financial results for shareholders. The company's outlook for the first quarter of 2024 anticipates revenue between $435 million and $445 million, with adjusted EBITDA between $85 million and $91 million. The full-year 2024 outlook is even more promising, with revenue forecasted between $1.84 billion and $1.88 billion, and adjusted EBITDA between $402 million and $422 million. These forecasts reflect the successful execution of the sale of a significant portion of Primo Water's international businesses, with the proceeds intended for growth initiatives, leverage reduction, and shareholder returns.
Primo Water's fiscal 2023 highlights from continuing operations include a net revenue increase to $1,771.8 million, up 5% from the previous year. The net income from continuing operations rose to $63.8 million, and the adjusted EBITDA increased by 11% to $380.7 million, with an adjusted EBITDA margin of 21.5%. The company's performance in the fourth quarter also remained strong, with an 8% increase in revenue to $438.7 million, although net income from continuing operations saw a decrease.
The company's balance sheet reflects a strategic focus on its North American operations, with the divestiture of international segments enhancing its financial position. Primo Water's share repurchase program, which was increased to $75 million, underscores its commitment to delivering shareholder value.
Primo Water's Board of Directors declared a dividend of US$0.09 per share, demonstrating confidence in the company's cash flow and financial health. The company's share repurchase activity in 2023, amounting to approximately $21 million, further reflects its commitment to shareholder returns.
As Primo Water looks ahead to 2024, the company is poised to capitalize on its strong market position in North America. With a clear strategic focus and robust financial health, Primo Water is well-equipped to navigate the challenges and opportunities of the non-alcoholic beverages industry.
Explore the complete 8-K earnings release (here) from Primo Water Corp for further details.
