Primo Water Corporation (NASDAQ:PRMW) Q2 2020 Earnings Conference Call - Final Transcript

Aug 06, 2020 • 10:00 am ET


Primo Water Corporation (NASDAQ:PRMW) Q2 2020 Earnings Conference Call - Final Transcript


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Jay Wells

some point this year.

I will now turn the call back to Tom.

Tom Harrington

Thanks, Jay. As you just heard Jay cover, our consolidated results are holding up well, and we're very comfortable with our rightsized operating footprint and cost structure as well as where we are from a liquidity position. As we enter the back half of the year, we're staying focused on a handful of key priorities. Above all, we will prioritize the health and safety of all our associates and customers. We continuously strive to improve the customer experience, and we'll continue to invest, from order placement to final delivery. In North America, we will continue to invest in our Water Direct, Water Refill, and Water Dispenser markets as we're seeing considerable growth in these channels as consumers adapt to the current environment.

In Europe, we plan to accelerate our Water Refill, Water Exchange, Water Dispenser businesses, and online marketing capabilities to diversify our customer base and capture growing demand. We will continue to evaluate our cost structure to identify opportunities for additional spending reductions and ensure that we are judicious when determining when to begin to put cost back into the business. And lastly, we will continue to manage our free cash flow and expect to generate sufficient free cash flow to fund our staple dividend and highly synergistic tuck-in acquisitions, while maintaining compliance with our credit agreement and covenants.

As Jay noted, we expect our consolidated Q3 revenue to be down between 8% to 12% on a pro forma basis and for adjusted EBITDA to be roughly flat on a pro forma basis. This crisis is making forecasting a more dynamic and fluid process than usual, but we're focusing on the things we can control and positioning our business to both withstand the crisis as well as find new ways to capitalize on changing consumer trends and demand.

Therefore, our long-term growth algorithm remains unchanged. In addition, we continue to expect to return to EBITDA growth before the end of the year and believe we will remain cash flow positive this year after providing cash to support our dividend and execute highly synergistic tuck-in acquisitions when the time is right.

Before moving to Q&A, I want to take a moment to thank all of our associates for their commitment to Primo and to our customers. I'm very grateful to lead an organization with such a dedicated workforce. I'll now turn the call back to Ryan to move us to Q&A.

Ryan Coleman

Thanks, Tom. [Operator Instructions]. Thank you for your cooperation. Operator, please open up the line for questions.