Primo Brands (PRMB) Q3 2024 earnings summary

Executive summary

• Q3 2024 revenue grew 8.8% year-over-year to $511.4 million, driven by 5% volume and 3.8% pricing growth, with organic growth at 7.4%.

• Adjusted EBITDA rose 11.4% to $125 million (24.4% margin), exceeding guidance, and net income reached $38 million.

• Shareholders approved the merger with BlueTriton Brands, expected to close November 8, 2024, forming Primo Brands Corporation trading as PRMB.

• Special dividend of $0.82 per share declared in connection with the BlueTriton Transaction.

• Enhanced customer service through upgraded app, expanded call center, and improved ratings.

Financial highlights

• Water Direct/Exchange revenue up 8% to $384.8 million; Water Refill/Filtration up 7.1% to $66.4 million; Other Water up 102.2% to $27.5 million.

• Adjusted free cash flow for Q3 was $60 million, down year-over-year due to prior one-time AR collection benefits and higher cash taxes.

• Net leverage ratio improved to 1.5x Adjusted EBITDA, with liquidity of $667 million.

• Gross profit for the nine months was $940.1 million (64.9% of revenue), up from $853.1 million (64.0%) year-over-year.

• SG&A expenses rose to $776.1 million (53.6% of revenue) from $726.0 million (54.5%) year-over-year.

Outlook and guidance

• Confident in achieving full-year guidance for revenue, Adjusted EBITDA, and Adjusted Free Cash Flow.

• BlueTriton Transaction expected to close on or about November 8, 2024, with financial outlook for Primo Brands to be communicated in early 2025.

• Integration expected to deliver at least $200 million in cost synergies within three years.

• Management expects continued strong cash flow and sufficient liquidity to fund operations, capital expenditures, dividends, and debt service.