Tuesday May 20th, 2014 - 10:30AM
Primo Water Corporation has announced that its net sales increased 5.4% to $23.5 million for its first quarter ended March 31, from $22.3 million for the first quarter of 2013. The improvement in net sales was due to increased sales for water and dispensers of $1 million and $0.2 million, respectively.
Water segment net sales increased 6.6% to $15.9 million for the first quarter compared to $14.9 million for the first quarter of 2013. Sales in the water segment consist of the sale of multi-gallon purified bottled water ("exchange") and self-service refill water service ("refill"). The increase in water net sales was primarily due to a 10% increase for U.S. exchange sales driven by same-store unit growth of 12.1% for U.S. exchange compared to the first quarter of 2013. In addition, refill net sales improved 3% due primarily to strong bottle sales.
The increase in dispenser segment net sales is due primarily to the timing of shipments to retailers as they replenished inventory associated with consumer sell-thru. Dispenser unit sell-thru to end consumers increased 3.9% to approximately 112,000 for the first quarter of 2014.
Adjusted EBITDA increased 41.8% to $2.7 million from $1.9 million for the first quarter of 2013 driven by the net sales and gross margin improvements. The GAAP net loss from continuing operations for the first quarter of 2014 was $3.6 million compared to $2.4 million per share for the first quarter of the prior year, due primarily to $1.8 million in non-recurring costs associated with the DS Waters Agreement, including a $0.6 million non-cash expense related to the common stock warrants issued to DS Waters.
"We are pleased with our first quarter results with strong same-store sales growth and gross margin expansion driven by lower supply chain costs in our U.S. Exchange business," commented Billy Prim, Primo Water's CEO. "We continue to see strength in the trend of consumers adding water dispensers to their homes and choosing to purchase Primo Water at our customers' retail locations. We believe these trends will lead to continued top-line growth which should drive even stronger adjusted EBITDA improvements as we leverage our cost structure."