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Issue Date: Vol. 52, No. 8, August 2012, Posted On: 8/15/2012

Primo Water Posts Record Q2 Sales, Net Loss Widens

Emily Jed
water deliver, pure water service, vending machine, office coffee service, office refreshments, Primo Water Corp., Flavorstation, Primo Water 2012 third quarter, filtered drinking water, self-service

WINSTON-SALEM, NC -- Primo Water Corp.'s third-quarter sales increased to a record $25 million, up from $20.7 million in same quarter last year. The 20.6% improvement reflected growth sales growth of Primo's three- and five-gallon bottled water and dispensers. Offsetting the strong revenue growth, however, was a loss that widened from last year on impairment charges.

Sales in Primo's dispenser segment surged 58% to $9.3 million in the recent quarter, up from $5.9 million a year earlier, due primarily to new locations that offer dispensers as well as growth at existing locations. Water dispenser sell-through to consumers grew 36.7% to 96,500 units.

Water segment sales for multi-gallon purified bottled water and self-serve filtered drinking water vending services increased 3.6% to $15.4 million from $14.8 million year over year.

The company's second-quarter net loss widened to $26.31 million, or $1.11 a share, during the recent quarter from $1.98 million or 10¢ per share in the year-ago period. The latest quarter's results include noncash impairment charges of $24.9 million related to its Omnifrio single-serve carbonated beverage technology.

Primo Water said sales of its Flavorstation home carbonated beverage-making system are progressing at a slower rate than originally expected; it plans to pursue potential licensing partnerships for the system, or the sale of certain Flavorstation assets and technologies.

Looking ahead to the third quarter, Primo forecasts a loss of 5¢ to 8¢ a share, and net sales of $26 million to $28 million.

The company also lowered its outlook for fiscal 2012. Primo Water now projects a loss of $1.37 to $1.44 a share and net sales in a range of $94 million to $100 million. Earlier, the company forecast a full-year loss of 17¢ to 20¢ per share and net sales between $118 million and $126 million.

For 2012, the company expects water sales to increase 12% to 17% and dispenser sales to grow 25% to 30%, compared with 2011. It expects to end 2012 with between 24,500 and 25,000 total locations.

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