Q2 2024 Primo Water Corp Earnings Call

August 8, 2024

Good morning. My name is Lara and I'll be your conference operator today. At this time, I would like to welcome everyone to the Primo Water Corporation's second quarter 2024 earnings conference call. All lines have been placed on mute to prevent any background noise. Should you require operator assistance during the call, please press star zero.

Operator: At this time, I would like to welcome everyone to the Primo Water Corporation's 2nd quarter of 2024 earnings conference call. All lines have been placed in mute to prevent any background noise. Should you require operator assistance during the call, please press star zero.

Jon Kathol: I'll now turn the call over to Jon Kathol by S.

Jon Kathol: I'll now turn the call over to Jon Kathol, Vice President of Investor Relations.

Operator: I turn the call over to Jon Kathol, Vice President, Investor Relations. Welcome to Primo Water Corporation's second quarter 2024 earnings conference call. All participants are currently in listen-only mode.

Speaker: Pleasant investigation.

Jon Kathol: I'll now turn the call over to Jon Kathol, Vice President, Investor Relations.

Speaker: Welcome to Primo Water Corporation 2nd quarter 2024 earnings conference call. All participants are currently in listen-only mode. The call is being webcast live on Primo Water's website at Primo Water Corp.com and will be available there for playback.

Operator: Welcome to Primo Water Corporation's second quarter 2024 earnings conference call. All participants are currently in listen-only mode.

Jon Kathol: Jon Kathol, Vice President, Investor Relations Welcome to Primo Water Corporation's second quarter 2024 earnings conference call. All participants are currently in listen-only mode.

Jon Kathol: The call is being webcast live on Primo Water's website at primowatercorp.com and will be available there for playback. This conference call includes forward-looking statements regarding the company's future financial and operational performance. The anticipated benefits and strategic rationale of the Blue Triton transaction, including estimated synergies and capital expenditure rates, the ability of Primo Water to complete the transaction on terms agreed or at all, the expected timing of the completed transaction, receipt of regulatory court and stock exchange approvals, and other statements that are not historical facts.

Operator: Welcome to Primo Water Corporation's second quarter 2024 earnings conference call. All participants are currently in listen-only mode. The call is being webcast live on Primo Water's website at primowatercorp.com and will be available there for playback.

Operator: The call is being webcast live on Primo Water's website at primowatercorp.com and will be available there for playback. These statements should be considered in connection with cautionary statements and disclaimers contained in the safe harbor statements in this morning's earnings press release. The company's actual performance could differ materially from these statements. A reconciliation of any non-GAAP financial measures discussed during the call with the most comparable measures in accordance with GAAP when the data is capable of being estimated is included in the company's second quarter earnings announcement released earlier this morning or on the investor relations section of the company's website at PrimoWaterCorp.com. With that, I will now turn the call over to Robert.

Unnamed Speaker: The call is being webcast live on Primo Water's website at primowatercorp.com and will be available there for playback. This conference call includes forward-looking statements regarding the company's future financial and operational performance. The anticipated benefits and strategic rationale of the Blue Triton transaction, including estimated synergies and capital expenditure rates, the ability of Primo Water to complete the transaction on terms agreed or at all, the expected timing of the completed transaction, receipt of regulatory court and stock exchange approvals, and other statements that are not historical facts.

Speaker: This conference call contains forward-looking statements regarding the company's future financial and operational performance. The anticipated benefits and strategic rationale of the blue track transaction, including estimated synergies and capital expenditure rates. The ability of Primo Water to complete the transaction on terms agreed or at all. The expected timing of the completed transaction, receipt of regulatory, court, and stock exchange approvals, and other statements that are not historical facts. These statements should be considered in connection with cautionary statements and disclaimers contained in the safe harbor statements in this morning's earnings press release. And the company's annual report on Form 10-K and quarterly reports on Form 10-Q and other filings with securities regulators.

Unnamed Speaker: These statements should be considered in connection with cautionary statements and disclaimers contained in the safe harbor statements in this morning's earnings press release, and the company's annual report on Form 10-K and quarterly reports on Form 10-Q and other filings with securities regulators. The company's actual performance could differ materially from these statements, and the company undertakes no duty to update these forward-looking statements, except as expressly required by applicable law.

Operator: This conference call contains forward-looking statements regarding the company's future financial and operational performance.

Speaker Change: The Anticipated Benefits and Strategic Rationale of the Blue Triton Transaction, including Estimated Synergies and Capital Expenditure Rates.

Operator: the ability of Primo Water to complete the transaction on terms agreed or at all, the expected timing of the completed transaction, receipt of regulatory court and stock exchange approvals, and other statements that are not historical facts.

Jon Kathol: These statements should be considered in connection with cautionary statements and disclaimers contained in the Safe Harbor Statements in this morning's Earnings Press Release, and the company's annual report on Form 10-K and quarterly reports on Form 10-Q and other filings with securities regulators. The company's actual performance could differ materially from these statements, and the company undertakes no duty to update these forward-looking statements, except as expressly required by applicable law.

Operator: These statements should be considered in connection with cautionary statements and disclaimers contained in the Safe Harbor Statements in this morning's earnings press release, and the company's annual report on Form 10-K and quarterly reports on Form 10-Q and other filings with securities regulators.

Speaker: The company's actual performance could differ materially from these statements, and the company undertakes no duty to update these forward-looking statements, except as expressly required by applicable law.

Operator: The company's actual performance could differ materially from these statements, and the company undertakes no duty to update these forward-looking statements, except as expressly required by applicable law.

Speaker: A reconciliation of any non-GAAP financial measures discussed during the call with the most comparable measures in accordance with GAAP when the data is capable of being estimated is included in the company's second quarter earnings announcement, released earlier this morning, or on the investor relations section of the company's website at Primo Water Corp.com. In addition to slides accompanying today's webcast to assist you throughout our discussion, we have included a copy of the presentation in a supplemental earnings deck on our website.

Jon Kathol: A reconciliation of any non-GAAP financial measures discussed during the call with the most comparable measures in accordance with GAAP when the data is capable of being estimated is included in the company's second quarter earnings announcement released earlier this morning or on the investor relations section of the company's website at PrimoWaterCorp.com. In addition to slides accompanying today's webcast to assist you throughout our discussion, we have included a copy of the presentation in a supplemental earnings deck on our website.

Operator: A reconciliation of any non-GAAP financial measures discussed during the call with the most comparable measures in accordance with GAAP when the data is capable of being estimated is included in the company's second quarter earnings announcement.

Speaker Change: released earlier this morning, or on the investor relations section of the company's website at PrimoWaterCorp.com. In addition to slides accompanying today's webcast to assist you throughout our discussion, we have included a copy of the presentation in a supplemental earnings deck on our website.

Jon Kathol: I am accompanied by Robert Reepbroke, Primo Water's chief executive officer, and David Has, chief financial officer. As previously announced, we will not be taking live questions from analysts or investors during this call. Instead, the most pertinent questions have been selected and will be addressed by our management team during today's call. Today's scripted comments will focus on Primo Water's current standalone results from continuing operations. Questions and updates related to the proposed merger with Blue Triton Brands will be addressed in the moderated question-and-answer session on this call.

Jon Kathol: I am accompanied by Robert Rietbroek, Primo Water's Chief Executive Officer, and David Hass, Chief Financial Officer. As previously announced, we will not be taking live questions from analysts or investors during this call. Instead, the most pertinent questions have been selected and will be addressed by our management team during today's call. Today's scripted comments will focus on Primo Water's current standalone results from its continuing operation. Questions and updates related to the proposed merger with Blue Triton Brands will be addressed in the moderated question and answer session on this call. With that, I will now turn the call over to Robert.

Jon Kathol: I am accompanied by Robert Rietbroek, Primo Water's Chief Executive Officer, and David Hass, Chief Financial Officer. As previously announced, we will not be taking live questions from analysts or investors during this call. Instead, the most pertinent questions have been selected and will be addressed by our management team during today's call. Today's scripted comments will focus on Primo Water's current stand-alone results from its continuing operation. Questions and updates related to the proposed merger with Blue Triton Brands will be addressed in the moderated question and answer session on this call. With that, I will now turn the call over to Robert.

Speaker Change: I am accompanied by Robert Rietbroek, Primo Water's Chief Executive Officer, and David Hass, Chief Financial Officer.

Speaker Change: As previously announced, we will not be taking live questions from analysts or investors during this call. Instead, the most pertinent questions have been selected and will be addressed by our management team during today's call.

Operator: Today's scripted comments will focus on Primo Water's current stand-alone results from continuing operations. Questions and updates related to the proposed merger with Blue Triton Brands will be addressed in the moderated question and answer session on this call. With that, I will now turn the call over to Robert.

Robbert Rietbroek: With that, I will now turn the call over to Robert.

Robbert Rietbroek: Thank you, John, and good morning, everyone. Since the beginning of this year, our team embraces a new strategy that includes a relentless focus on customer-centric initiatives, must-win priorities, as well as a commercial and growth mindset leveraging our portfolio of hydration solutions. Our must wins are focused on delivering a superior customer experience, positioning ourselves as a partner of choice to retail partners and other key stakeholders at operational excellence.

Robert Rietbroek: Thank you, John, and good morning, everyone. Since the beginning of this year, our team has adopted a new strategy that includes a relentless focus on customer-centric initiatives, must-win priorities, as well as a commercial and growth mindset, leveraging our portfolio of hydration solutions. Our must-wins are focused on delivering a superior customer experience, positioning ourselves as a partner of choice to retail partners and other key stakeholders, and operational excellence. Our brand portfolio is driving sustainable growth, and results are strong.

Robert Rietbroek: Thank you, John, and good morning, everyone. Since the beginning of this year, our team has adopted a new strategy that includes a relentless focus on customer-centric initiatives, must-win priorities, as well as a commercial and growth mindset leveraging our portfolio of hydration solutions. Our must-wins are focused on delivering a superior customer experience, positioning ourselves as a partner of choice to retail partners and other key stakeholders, and operational excellence. Our brand portfolio is driving sustainable growth, and results are strong.

Robert: Since the beginning of this year, our team has adopted a new strategy that includes a relentless focus on customer-centric initiatives, must-win priorities, as well as a commercial and growth mindset, leveraging our portfolio of hydration solutions. Our must-wins are focused on delivering a superior customer experience, positioning ourselves as a partner of choice to retail partners and other key stakeholders, and operational excellence.

Robert: thank you john and good morning everyone

Robert: Since the beginning of this year, our team embraces a new strategy that includes a relentless focus on customer-centric initiatives, must-win priorities, as well as a commercial and growth mindset leveraging our portfolio of hydration solutions.

Robert: our must wins are focused on delivering a superior customer experience positioning ourselves as a partner of choice to retail partners and other key stakeholders and operational excellence

Robbert Rietbroek: Our brand portfolio is driving sustainable growth, and results are strong. Our second quarter results showed continued strength across the business and organization, with broad-based and balanced growth across channels. Strong progress against priorities, unit growth combined with pricing, enabling us to expand margins and generate a higher rate of free cash flow while delivering against sustainability targets. Total revenue of $485 million increased 7.6%, consisting of volume growth of 3.1% and pricing growth of 4.5%. Revenue gains were driven by organic growth of 6.6%, demonstrating the health of our consumer and category, as well as our strength across our brands and water solutions offerings in the current economic environment.

Robert: Our brand portfolio is driving sustainable growth, and results are strong. Strong progress against priorities, unit growth combined with pricing, enabling us to expand margins and generate a higher rate of free cash flow while delivering against sustainability targets. Total revenue of $485 million increased 7.6%, consisting of volume growth of 3.1% and pricing growth of 4.5%. Adjusted EBITDA was $113 million, up 15% versus the prior year and increasing at nearly twice the rate of revenue growth.

Robert: Our brand portfolio is driving sustainable growth and results are strong. Our second quarter results showed continued strength across the business and organization, with broad-based and balanced growth across channels.

Robert Rietbroek: Our second quarter results showed continued strength across the business and organization, with broad-based and balanced growth across channels. Strong progress against priorities, unit growth combined with pricing, enabling us to expand margins and generate a higher rate of free cash flow while delivering against sustainability targets. Total revenue of $485 million increased 7.6%, consisting of volume growth of 3.1% and pricing growth of 4.5%. Revenue gains were driven by organic growth of 6.6%, demonstrating the health of our consumer and category, as well as our strength across our brands and water solutions offerings in the current economic environment. Adjusted EBITDA was $113 million, up 15% versus the prior year, and increasing at nearly twice the rate of revenue growth. The resulting adjusted EBITDA margin was 23.3%, which gives us confidence in our full-year margin expansion.

Robert Rietbroek: Our second quarter results showed continued strength across the business and organization, with broad-based and balanced growth across channels. Strong progress against priorities, unit growth combined with pricing, enabling us to expand margins and generate a higher rate of free cash flow while delivering against sustainability targets. Total revenue of $485 million increased 7.6%, consisting of volume growth of 3.1% and pricing growth of 4.5%. Revenue gains were driven by organic growth of 6.6 percent, demonstrating the health of our consumer and category, as well as our strength across our brands and water solutions offerings in the current economic environment. Adjusted EBITDA was $113 million, up 15% versus the prior year, and increasing at nearly twice the rate of revenue growth. The resulting adjusted EBITDA margin was 23.3%, which gives us confidence in our full-year margin expansion.

Robert: Strong progress against priorities, unit growth combined with pricing, enabling us to expand margins and generate a higher rate of free cash flow while delivering against sustainability targets.

Robert: Total revenue of $485 million increased 7.6%, consisting of volume growth of 3.1% and pricing growth of 4.5%.

Speaker Change: revenue gains were driven by organic growth of six point six percent demonstrating the health of our consumer and category as well as our strength across our brands and water solutions offerings in the current economic environments

Robbert Rietbroek: Adjusted EBITDA was 113 million, up 15% versus the prior year, and increasing it nearly twice the rate of revenue growth. The resulting adjusted EBITDA margin was 23.3%, which gives us confidence in our full year margin expansion. Both revenue and adjusted EBITDA exceeded the high end of our guidance issued last quarter. David will discuss more of the details of the quarter in a moment, but the results are a direct reflection of our associates and their commitment to our customers.

Robert: Adjusted EBITDA was $113 million, up 15% versus the prior year, and increasing at nearly twice the rate of revenue growth.

Robert: the resulting adjusted ebitda margin was twenty-three point three percent which gives us confidence in our full year margin expansion

Robert: Both revenue and adjusted EBITDA exceeded the high end of our guidance issued last quarter. I would like to publicly recognize and thank them for embracing our must-win priorities and remaining frontline focused while staying dedicated to growing the business profitably. We continue to see growth potential as a pure play water company in the large, highly fragmented, and growing North American water category. High-quality drinking water has universal appeal and is a solution for all day parts and usage occasions.

Robert Rietbroek: Both revenue and adjusted EBITDA exceeded the high end of our guidance issued last quarter. David will discuss more of the details of the quarter in a moment, but the results are a direct reflection of our associates and their commitment to our customers. I would like to publicly recognize and thank them for embracing our must-win priorities and remaining frontline focused while staying dedicated to growing the business profitably. From a macroeconomic perspective, demand for our water solutions is strong, and consumers continue to prioritize healthier lifestyles and focus on hydration.

Robert: Both Revenue and Adjusted EBITDA exceeded the high end of our guidance issued last quarter.

Robert: David will discuss more of the details of the quarter in a moment, but the results are a direct reflection of our associates and their commitment to our customers.

Robbert Rietbroek: I would like to publicly recognize and thank them for embracing our must-win priorities and remaining frontline focused while staying dedicated to growing the business profitably. From a macroeconomic perspective, demand for our water solutions is strong, and consumers continue to prioritize healthier lifestyles and focus on hydration. We offer high quality drinking water solutions to meet the consumer demand; however, they choose to hydrate. We continue to see the growth potential as a pure-played water company in the large, highly fragmented, and growing North America water category. High quality drinking water has universal appeal, and is a solution for all day parts and usage occasions.

Robert: I would like to publicly recognize and thank them for embracing our must-win priorities and remaining frontline focused while staying dedicated to growing the business profitably.

Robert: From a macroeconomic perspective, demand for our water solutions is strong, and consumers continue to prioritize healthier lifestyles and focus on hydration.

Robert Rietbroek: We offer high-quality drinking water solutions to meet consumer demand, however they choose to hydrate. We continue to see growth potential as a pure play water company in the large, highly fragmented, and growing North American water category. High-quality drinking water has universal appeal and is a solution for all day parts and usage occasions.

Robert: We offer high quality drinking water solutions to meet the consumer demand, however they choose to hydrate. We continue to see the growth potential as a pure play water company in the large, highly fragmented, and growing North America water category.

Robert: High quality drinking water has universal appeal and is a solution for all dayparts and usage occasions.

Robbert Rietbroek: Our split between residential and commercial customer base remains approximately 50-50, ensuring a healthy balance of revenue sources. As a beverage company, compared to the broader beverage category, we are pleased that we continue to grow revenue in both volume and price. Furthermore, our current and future business opportunities benefit from additional tailwinds, including growing environmental concerns. Our extensive water resources ensure availability and are reinforced by our dedication to responsible water source stewardship.

Robert: Our split between the residential and commercial customer base remains approximately 50-50, ensuring a healthy balance of revenue sources. During the second quarter, we increased our Mountain Valley retail revenue by approximately 87% over the prior year. We are off to an impressive start with the launch of our convenient nine-pack, single-serve, 16-ounce aluminum bottles, which began selling in food stores throughout the country and to our WaterDirect customers in Q2.

Robert Rietbroek: Our split between the residential and commercial customer base remains approximately 50-50, ensuring a healthy balance of revenue sources. As a beverage company, compared to the broader beverage category, we are pleased that we continue to grow revenue in both volume and price. Furthermore, our current and future business opportunities benefit from additional tailwinds, including growing environmental concerns. Our extensive water resources ensure availability and are reinforced by our dedication to responsible water source stewardship. With that in mind, let us discuss the specific progress of each of our must-win priorities that I identified upon arriving earlier this year.

Robert: Our split between residential and commercial customer base remains approximately 50-50, ensuring a healthy balance of revenue sources.

Robert: As a beverage company, compared to the broader beverage category, we are pleased that we continue to grow revenue in both volume and price.

Robert: Furthermore, our current and future business opportunities benefit from additional tailwinds, including growing environmental concerns.

Robert: Our extensive water resources ensure availability and are reinforced by our dedication to responsible water source stewardship.

Robbert Rietbroek: With that, let us discuss the specific progress of each of our must-win priorities that I identified upon arriving earlier this year. The first must-win is to provide a superior customer experience with the goal to yield net organic growth and units or gallons consumed across our water portfolio. We are focused on acquiring and maintaining high-value customers and driving annual galling growth. Consumers can select our products from multiple price tiers, from a value price of 50 cents per gallon for water sold at a refill station, all the way up to our super premium mountain valley spring water delivered in multi-format glass, PET, and aluminum bottles direct to their door or sold at retail in various on-premise locations.

Speaker Change: With that, let us discuss the specific progress of each of our must-win priorities that I identified upon arriving earlier this year.

Robert Rietbroek: The first must-win is to provide a superior customer experience with the goal of yielding net organic growth and units, or gallons, consumed across our water portfolio. We are focused on acquiring and maintaining high-value customers and driving annual gallon growth. Consumers can select our products from multiple price tiers, from a value price of $0.50 per gallon for water sold at a refill station all the way up to our super premium Mountain Valley spring water delivered in multi-format glass, PET, and aluminum bottles direct to their door or sold at retail and at various on-premise locations.

Robert Rietbroek: The first must-win is to provide a superior customer experience with the goal of yielding net organic growth and units or gallons consumed across our water portfolio. We are focused on acquiring and maintaining high-value customers and driving annual gallon growth. Consumers can select our products from multiple price tiers, from a value price of $0.50 per gallon for water sold at a refill station all the way up to our super premium Mountain Valley spring water delivered in multi-format glass, PET, and aluminum bottles direct to their door or sold at retail at various on-premise locations.

Robert: The first must-win is to provide a superior customer experience, with the goal to yield net organic growth and units, or gallons, consumed across our water portfolio.

Robert: We are focused on acquiring and maintaining high-value customers and driving annual gallon growth.

Robert: consumers can select our products from multiple price tiers

Speaker Change: from a value price of fifty cents per gallon for water sold that a refil station

Robert: all the way up to our super-premium Mountain Valley Spring Water delivered in multi-format glass, PET, and aluminum bottles direct to their door or sold at retail and at various on-premise locations.

Robbert Rietbroek: Our increased focus on mountain valley, which I spoke about last quarter, continues to deliver impressive results. During the second quarter, we increased our mountain value retail revenue by approximately 87 percent over the prior year. We are off to an impressive start with the launch of our 15 ounce aluminum bottles, which began south food stores throughout the country and to our water direct customers in Q2. Mountain Valley is already a leading brand of spring water sold in a natural food channel, and we continue to see high levels of Mountain Valley demand for our five-gallon, two-and-a-half-gallon, retail and on-premise multi-serve and single-use products.

Robert Rietbroek: Our increased focus on Mountain Valley, which I spoke about last quarter, continues to deliver impressive results. During the second quarter, we increased our Mountain Valley retail revenue by approximately 87% over the prior year. We are off to an impressive start with the launch of our convenient, nine-pack, single-serve, 16-ounce aluminum bottles, which began selling in food stores throughout the country and to our WaterDirect customers in Q2. Mountain Valley is already a leading brand of spring water sold in a natural foods channel, and we continue to see high levels of demand for our five-gallon, two-and-a-half-gallon, retail, and on-premise, multi-serve, and single-use products.

Robert Rietbroek: Our increased focus on Mountain Valley, which I spoke about last quarter, continues to deliver impressive results. During the second quarter, we increased our Mountain Valley retail revenue by approximately 87% over the prior year. We are off to an impressive start with the launch of our convenient nine-pack, single-serve, 16-ounce aluminum bottles, which began selling in food stores throughout the country and to our WaterDirect customers in Q2. Mountain Valley is already a leading brand of spring water sold in a natural foods channel, and we continue to see high levels of demand for our five-gallon, two-and-a-half-gallon, retail and on-premise, multi-serve, and single-use products.

Robert: Our increased focus on Mountain Valley, which I spoke about last quarter, continues to deliver impressive results.

Robert: During the second quarter, we increased our Mountain Valley retail revenue by approximately 87% over the prior year.

Robert: We are off to an impressive start with the launch of our convenient, nine-pack, single-serve, 16-ounce aluminum bottles, which began self-food stores throughout the country and to our Water Direct customers in Q2.

Robert: Mountain Valley is already a leading brand of spring water sold in a natural foods channel and we continue to see high levels of Mountain Valley demand for our five-gallon, two-and-a-half-gallon, retail and on-premise, multi-serve and single-use products.

Robbert Rietbroek: We continue to scale operations in support of the mountain valley growth and are currently running all three of our glass bottling lines 24/7. Looking ahead to our broader portfolio, we have planned customer recruitment marketing programs like Refer a Friend, Movers, and Returning Customers. That will include a targeted media campaign, any frictionless end-to-end customer experience where it's easy to do business with us. We are consistently enhancing various consumer touchpoints to improve their experience. This quarter, traffic to our digital assets was up 29 percent as we upgraded the Mywater Plus app with a fresh design, enhanced features, and launched improvements to our water.com quick-shop features to streamline the customer's shop-to-cart journey, particularly when engaging with our promotions, and enabled easier access to customer support through our chat feature now available six days a week.

Robert: We continue to scale operations in support of Mountain Valley growth and are currently running all three of our glass bottling lines 24-7. By increasing the coverage of our Customer Experience Center, we had over 30,000 interactions with customers via our chat functionality, with a focus on our quality of service and rapid request resolution. Our Google business rating has improved 8% year over year, and our net promoter scores have improved 12% from the prior year.

Robert Rietbroek: We continue to scale operations in support of Mountain Valley growth and are currently running all three of our glass bottling lines 24-7. Looking ahead to our broader portfolio, we have planned customer recruitment marketing programs like Refer a Friend, Movers, and Returning Customers that will include a targeted media campaign and a frictionless end-to-end customer experience where it's easy to do business with us. We are consistently enhancing various consumer touch points to improve their experience.

Robert Rietbroek: We continue to scale operations in support of Mountain Valley growth and are currently running all three of our glass bottling lines 24-7. Looking ahead to our broader portfolio, we have planned customer recruitment marketing programs like Refer a Friend, Movers, and Returning Customers. That will include a targeted media campaign and a frictionless end-to-end customer experience where it's easy to do business with us. We are consistently enhancing various consumer touch points to improve their experience.

Robert: We continue to scale operations in support of the Mountain Valley growth and are currently running all three of our glass bottling lines 24-7.

Robert: Looking ahead to our broader portfolio, we have planned customer recruitment marketing programs like Refer a Friend, Movers, and Returning Customers that will include a targeted media campaign and a frictionless end-to-end customer experience where it's easy to do business with us.

Robert: We are consistently enhancing various consumer touchpoints to improve their experience.

Robert Rietbroek: This quarter, traffic to our digital assets was up 29% as we upgraded the MyWaterPlus app with a fresh design and enhanced features, and launched improvements to our Water.com QuickShop features to streamline the customer's shop-to-car journey, particularly when engaging with our promotions, and enabled easier access to customer support through our chat feature, now available six days a week.

Robert Rietbroek: This quarter, traffic to our digital assets was up 29% as we upgraded the MyWaterPlus app with a fresh design, enhanced features, and launched improvements to our Water.com Quick Shop features to streamline the customer's shop-to-car journey, particularly when engaging with our promotions, and enabled easier access to customer support through our chat feature, now available six days a week.

Robert: This quarter, traffic to our digital assets was up 29%.

Robert: as we upgraded the MyWaterPlus app with a fresh design, enhanced features,

Robert: and launched improvements to our water.com quick shop features to streamline the customer's shop-to-car journey, particularly when engaging with our promotions.

Robert: and enabled easier access to customer support through our chat feature now available six days a week

Robbert Rietbroek: By increasing the coverage of our customer experience center, we had over 30,000 interactions with customers via our chat functionality, with the focus on our quality of service and rapid request resolution. The initial reaction to our increased customer experience efforts is encouraging. Our Google Business rating has improved 8 percent year over year, and our net promoter scores have improved 12 percent from the prior year.

Robert Rietbroek: By increasing the coverage of our Customer Experience Center, we had over 30,000 interactions with customers via our chat functionality, with a focus on our quality of service and rapid request resolution. The initial reaction to our increased customer experience efforts is encouraging. Our Google Business Rating has improved 8% year over year, and our Net Promoter Scores have improved 12% from the prior year. The second must-win is to be the preferred water solutions partner.

Robert: By increasing the coverage of our Customer Experience Center, we had over 30,000 interactions with customers via our chat functionality, with a focus on our quality of service and rapid request resolution.

Robert: the initial reaction to our increased customer experienceced efforts is encouraging our google business rating has approved eight percent year-over-year and our net promoter scores have improved twelve percent from the prior year

Robbert Rietbroek: The second must win is to be the preferred water solutions partner. We meet the end consumer across numerous channels like direct to consumer delivery or through one of our retail partners with our change locations or refill stations. We have an offering to meet each of our customer's needs and budget, or what we call water your way. Customer and volume growth starts with increasing the number of customers, customers, and locations in water direct, exchange, refill, and the sale of water dispensers at retail, which drives connectivity across our portfolio of water solutions. During the second quarter, we were able to secure additional display racks with certain major retail stores to support capacity in our change channel.

Robert: The second must win is to be the preferred water solutions partner.

Robert Rietbroek: We meet the end consumer across numerous channels, like direct-to-consumer delivery or through one of our retail partners with our exchange locations or refill stations. We have an offering to meet each of our customers' needs and budget, or what we call water your way. Customer and volume growth starts with increasing the number of customers and locations in Water Direct, Exchange, Refill and the sale of water dispensers at retail, which drives connectivity across our portfolio of water solutions.

Robert Rietbroek: We meet the end consumer across numerous channels, like direct-to-consumer delivery or through one of our retail partners with our exchange locations or refill stations. We have an offering to meet each of our customers' needs and budget, or what we call water your way. Customer and volume growth starts with increasing the number of customers and locations in WaterDirect, Exchange, Refill and the sale of water dispensers at retail, which drives connectivity across our portfolio of water solutions.

Robert: We meet the end consumer across numerous channels, like direct-to-consumer delivery or through one of our retail partners with our exchange locations or refill stations. We have an offering to meet each of our customers' needs and budget, or what we call Water Your Way.

Robert: We have an offering to meet each of our customers' needs and budget, or what we call water your way, and locations in WaterDirect, Exchange, Refill, and the sale of water dispensers at retail, which drives connectivity across our portfolio of water solutions. Placements of these machines will begin taking place during the remainder of 2024 and well into 2025.

Robert: Customer and volume growth starts with increasing the number of customers and locations in water direct, exchange, refill, and the sale of water dispensers at retail, which drives connectivity across our portfolio of water solutions.

Robert Rietbroek: During the second quarter, we were able to secure additional display racks with certain major retail stores to support capacity in our exchange channel. We are focused on filling white space gaps and increasing capacity, and the increase in customers and locations is having a noticeable effect by driving double-digit revenue growth in the exchange business. The increase in customers and locations will drive future volume growth. As evidence of this future growth, we were recently awarded an agreement to place up to 1,000 incremental refill machines with a large chain of convenience stores in the U.S. Placements of these machines will begin taking place in the remainder of 2024 and well into 2025.

Robert: During the second quarter, we were able to secure additional display racks with certain major retail stores to support capacity in our exchange channel.

Robbert Rietbroek: Our focus on filling white space gaps and increasing capacity and in stocks is having a noticeable effect by driving double-digit revenue growth in the exchange business. The increase in customers and locations will drive future volume growth. As evidence of this future growth, we were recently awarded an agreement to place up to 1,000 incremental refill machines with a large chain of convenience stores in the US. Placement of these machines will begin taking place in the remainder of 2024 and well into 2025.

Robert: Our focus on filling white space gaps and increasing capacity and in stocks is having a noticeable effect by driving double-digit revenue growth in the exchange business.

Robert: The increase in customers and locations will drive future volume growth.

Robert: As evidence of this future growth, we were recently awarded an agreement to place up to 1,000 incremental refill machines with a large chain of convenience stores in the U.S.

Robert: Placements of these machines will begin taking place in the remainder of 2024 and well into 2025.

Robbert Rietbroek: The concept of partnering stretches across all aspects of our business, including associates, suppliers, customers, and current and potential share owners. It begins with our associates whose dedication is evident in every aspect of their efforts. Ensuring a safe environment is our top priority and is essential for our associates to thrive. And we are committed to enhancing our workplaces, upgrading offices, locker rooms, break areas, and parking facilities, as well as production and distribution areas. Associate safety at work, as well as in the home, is being fostered to the Q2 launch of the 100 Days of Safety summer program.

Robert: The concept of partnership stretches across all aspects of our business, including associates, suppliers, customers, and current and potential share owners. It begins with our associates, whose dedication is evident in every aspect of their efforts, as well as in production and distribution areas, like the wildfires and hurricanes across several states as well as during municipal water emergencies. Last quarter, we also went above and beyond providing our products and services in times of need by investing our time in the betterment of our communities. We had the pleasure of co-hosting a community cleanup recently with the City of Hot Springs Parks and Trails, the home of our Mountain Valley branch.

Robert Rietbroek: The concept of partnership stretches across all aspects of our business, including associates, suppliers, customers, and current and potential share owners. It begins with our associates, whose dedication is evident in every aspect of their efforts. Ensuring a safe environment is our top priority and is essential for our associates to thrive, and we are committed to enhancing our workplaces, upgrading offices, locker rooms, break areas, and parking facilities, as well as production and distribution areas.

Speaker Change: the concept of partnering stretches across all aspects of our business including associates suppliers customers and current and potential share owners it begins with our associates whose dedication is evident in every aspect of their efforts

Robert: Ensuring a safe environment is our top priority and is essential for our associates to thrive and we are committed to enhancing our workplaces, upgrading offices, locker rooms, break areas, and parking facilities.

Robert Rietbroek: Associate Safety at Work, as well as in the home, is being fostered through the Q2 launch of the 100 Days of Safety Summer Program, aimed at raising awareness of summer safety best practices but also rewarding associates for adopting a safety mindset.

Robert: as well as production and distribution areas.

Robert: Associate Safety at Work, as well as in the home, is being fostered through the Q2 launch of the 100 Days of Safety Summer Program, aimed at raising awareness for summer safety best practices, but also rewarding associates for adopting a safety mindset.

Robbert Rietbroek: Aimed at raising awareness for summer safety best practices, but also rewarding associates for adopting a safety mindset. The program roll out has yielded promising results in reported incidents and overall associate retention and engagement. Community involvement is a key element of our culture, as our associates live in the areas we serve and are passionate about the products and services we provide. One example of our community involvement includes providing support in times of need, like supplying water in times of natural disasters, like the wildfires and hurricanes across several states, as well as during municipal water emergencies. Last quarter, we also went above and beyond providing our products and services in times of need by investing our time in the betterment of our communities.

Robert Rietbroek: The program rollout has yielded promising results in reported incidents and overall associate retention and engagement. Community involvement is a key element of our culture, as our associates live in the areas we serve and are passionate about the products and services we provide. One example of our community involvement includes providing support in times of need, like supplying water in times of natural disaster, like the wildfires and hurricanes across several states as well as during municipal water emergencies.

Speaker Change: the program rollout has yielded promising results in reported incidents and overall associated retention and engagements

Robert: Community involvement is a key element of our culture, as our associates live in the areas we serve and are passionate about the products and services we provide.

Robert: One example of our community involvement includes providing support in times of need, like supplying water in times of natural disasters, like the wildfires and hurricanes across several states, as well as during municipal water emergencies.

Robert Rietbroek: Last quarter, we also went above and beyond providing our products and services in times of need by investing our time in the betterment of our communities. We had the pleasure of co-hosting a community cleanup recently with the City of Hot Springs Parks and Trails, the home of our Mountain Valley branch.

Robert Rietbroek: Last quarter, we also went above and beyond providing our products and services in times of need by investing our time in the betterment of our community. We had the pleasure of co-hosting a community cleanup recently with the City of Hot Springs Parks and Trails, the home of our Mountain Valley brand. We embrace our partnerships, and our customer base spans all types of retail, including mass merchandisers, club stores, DIY, and e-commerce with top-tier retailers like Walmart, Costco, Home Depot, Lowe's, and prominent grocery chains throughout North America.

Robert: Last quarter, we also went above and beyond providing our products and services in times of need by investing our time in the betterment of our communities.

Robbert Rietbroek: We had the pleasure of co-hosting a community cleanup recently with the City of Hot Springs, Parks, and Trails, the home of our Mountain Valley brand. We embrace our partnerships, and our customer base spans across all types of retail, including mass merchandisers, club stores, DIY, and e-commerce, with top tier retailers like Walmart, Costco, Home Depot, Lowe's, and prominent grocery chains throughout North America. I continue to engage with these world-class retailers in top-to-top meetings and have found a strong desire on their part to drive more traffic to their stores and websites with our dispensers and water accessories such as the Rolling Water Cooler available on select retailer sites and water.com, exchange and refill stations, as well as Mountain Valley Spring Water.

Robert: we had the pleasure of co-hosting a community cleanup recently with the city of hot springs parks and trails the home of our mountain valley brand

Robert Rietbroek: We embrace our partnerships, and our customer base spans all types of retail, including mass merchandisers, club stores, DIY, and e-commerce with top-tier retailers like Walmart, Costco, Home Depot, Lowe's, and prominent grocery chains throughout North America. I continue to engage with these world-class retailers in top-to-top meetings, and I found a strong desire on their part to drive more traffic to their stores and websites with our dispensers and water accessories, such as the rolling water cooler available on select retailer sites and water.com, exchange and refill stations, as well as Mountain Valley spring water. David and I once again had numerous and extensive interactions with investors and analysts during the second quarter.

Robert: We embrace our partnerships.

Robert: and our customer base spans across all types of retail.

Robert: including mass merchandisers, club stores, DIY, and e-commerce with top-tier retailers like Walmart, Costco, Home Depot, Lowe's, and prominent grocery chains throughout North America.

Robert: I continue to engage with these world-class retailers in top-to-top meetings, and I found a strong desire on their part to drive more traffic to their stores and websites with our dispensers and water accessories, such as the rolling water cooler available on select retailer sites and water.com, exchange and refill stations, as well as Mountain Valley spring water. David and I once again had numerous and extensive interactions with investors and analysts during the second quarter.

Robert Rietbroek: I continue to engage with these world-class retailers in top-to-top meetings, and I found a strong desire on their part to drive more traffic to their stores and websites with our dispensers and water accessories, such as the rolling water cooler available on select retailer sites and water.com, exchange and refill stations, as well as Mountain Valley spring water. David and I once again had numerous and extensive interactions with investors and analysts during the second quarter.

Robert: I continue to engage with these world-class retailers in top-to-top meetings.

Robert: And I found a strong desire on their part to drive more traffic to their stores and websites with our dispensers and water accessories.

Robert: such as the rolling water cooler available on select retailer sites and water.com, exchange and refill stations, as well as Mountain Valley spring water.

Robbert Rietbroek: David and I once again had numerous and extensive interactions with investors and analysts in the second quarter. He themes included an appreciation for our North American focused business model, our growth algorithm, free cash flow generation and conversion, progress on the sale of the European and Israeli assets, an appreciation for our strong balance sheet and low leverage, how we plan to deploy capital in the coming quarters, and of course a review of our planned merger with Blue Triton Brands. I would like to extend my personal gratitude to our stakeholders for their high level of engagement. By maintaining, strengthening, and enhancing these partnerships we can achieve even greater success together.

Robert: David and I once again had numerous and extensive interactions with investors and analysts in the second quarter.

Robert: Key themes included an appreciation for our North American-focused business model, our growth algorithm, and free cash flow generation and conversion. I would like to extend my personal gratitude to our stakeholders for their high level of engagement. By maintaining, strengthening, and enhancing these partnerships, we can achieve even greater success together. The third must-win is operational excellence. During the second quarter, we began implementing six- and seven-day delivery schedules as we moved into our traditionally busy period of the summer.

Robert Rietbroek: Key themes included an appreciation for our North American-focused business model, our growth algorithm, free cash flow generation and conversion, progress on the sale of the European and Israeli assets, an appreciation for a strong balance sheet and low leverage, how we plan to deploy capital in the coming quarters, and, of course, a review of our planned merger with Blue Triton Brand. I would like to extend my personal gratitude to our stakeholders for their high level of engagement.

Robert: Key themes included an appreciation for our North American-focused business model, our growth algorithm, free cash flow generation and conversion.

Speaker Change: progress on the sale of the european and israeli assets and appreciation for our strong balance sheet and low leverage how we plan to deploy capital in the coming quarters and of course a review of our planned merger with blue triton brands

Robert: I would like to extend my personal gratitude to our stakeholders for their high level of engagement.

Robert Rietbroek: By maintaining, strengthening, and enhancing these partnerships, we can achieve even greater success together. The third must-win is operational excellence. Specifically, ensuring that we have an optimized organizational structure and operating systems to guarantee our associates' safety and well-being, deliver the highest quality product and service to our valued customers, and scale efficiently as we continue to grow. During the second quarter, we began implementing six- and seven-day delivery schedules as we moved into our traditionally busy period of the summer.

Robert: By maintaining, strengthening, and enhancing these partnerships, we can achieve even greater success together.

Robbert Rietbroek: The third must win is operational excellence, specifically ensuring that we have an optimized organizational structure and operating systems to guarantee our associate safety and well-being, deliver the highest quality product and service to our valued customers, and scale efficiently as we continue to grow. During the second quarter, we began implementing six and seven day delivery schedules as we moved into our traditionally busy period of the summer. We were able to increase our on time, inflow rate to 94% in our water direct channel for the second quarter with positive feedback from our exchange customers on the strength and holiday service support.

Robert: The third must win is operational excellence.

Robert: Specifically, ensuring that we have an optimized organizational structure and operating systems to guarantee our associates safety and well-being, deliver the highest quality product and service to our valued customers and scale efficiently as we continue to grow.

Robert: During the second quarter, we began implementing six- and seven-day delivery schedules as we moved into our traditionally busy period of the summer.

Robert Rietbroek: We were able to increase our on-time inflow rate to 94% in our water direct channel for the second quarter, with positive feedback from our exchange customers on the strengthened holiday service support. Our refill channel had machine uptime of 98%, an increase over last quarter, and our time to address service calls improved by one and a half days versus last quarter. Throughout our operations, we are driving integrated business processes. During the second quarter, we increased our revenue per route by 5% and units per route per day by 2%, an indication of improved asset utilization, route density, and positive volume and pricing improvements.

Robert: We were able to increase our on-time inflow rate to 94% in our water direct channel for the second quarter, with positive feedback from our exchange customers on the strengthened holiday service support. Throughout our operations, we are driving integrated business processes. The performances of the high-efficiency line installations are driving a reduction in water waste at the filler and can nearly double the output capacity of the bottling line, protecting the planet we inhabit.

Robert: We were able to increase our on-time inflow rate to 94% in our water direct channel for the second quarter with positive feedback from our exchange customers on the strengthened holiday service support.

Robbert Rietbroek: Our refill channel had machine uptime of 98%, an increase over last quarter, and our time to address service calls improved by one and a half days versus last quarter. Throughout our operations, we are driving integrated business processes. During the second quarter, we increased our revenue per out by 5%, and units per out per day by 2%, an indication of improved asset utilization, route density, and positive volume and pricing improvement makes. The same principles are now being employed in the optimization of our refill routes, enabling us to extract more value from our team of technicians and service providers.

Robert: Our refill channel had machine uptime of 98%, an increase over last quarter, and our time to address service calls improved by one and a half days versus last quarter.

Robert: Throughout our operations, we are driving integrated business processes.

Speaker Change: During the second quarter we increased our revenue per route by 5% and units per route per day by 2%, an indication of improved asset utilization, route density, and positive volume and pricing improvement mix.

Robert Rietbroek: The same principles are now being employed in the optimization of our refill route, enabling us to extract more value from our team of technicians and service providers. We remain focused on strategic capex investments that deliver high returns. The installation of the new high-efficiency production lines continues, and we brought our EFRA.Pennsylvania production line online during the quarter. The performances of the high-efficiency line installations are driving a reduction in water waste at the filler and can nearly double the output capacity of the bottling line.

Robert Rietbroek: The same principles are now being employed in the optimization of our refill route, enabling us to extract more value from our team of technicians and service providers. We remain focused on strategic capex investments that deliver high returns. The installation of the new high-efficiency production lines continues, and we brought our Effort Up! Pennsylvania production line online during the quarter.

Robert: The same principles are now being employed in the optimization of our refill routes, enabling us to extract more value from our team of technicians and service providers.

Robbert Rietbroek: We remain focused on strategic cat-backs investments that deliver high returns. The installation of the new high efficiency production lines continues, and we brought our effort up in Slovenia production line online during the quarter. The performances of the high efficiency line installations are driving the reduction of waterways at the filler and can nearly double the output capacity of the bottling line. We are utilizing advanced robotics to assist some of the more strenuous aspects of our plant and distribution functions. Ultimately, freeing up our associates to focus on the quality aspects of their roles. The team is on track to deliver the previously announced business optimization program that will enhance our productivity and lower our overall cost to serve while continuing to offer customers an exceptional experience.

Robert: We remain focused on strategic CapEx investments that deliver high returns. The installation of the new high-efficiency production lines continues. And we brought our EFRADA Pennsylvania production line online during the quarter.

Robert Rietbroek: The performances of the high-efficiency line installations are driving a reduction in water waste at the filler and can nearly double the output capacity of the bottling line. We are utilizing advanced robotics to assist some of the more strenuous aspects of our planning and distribution function, ultimately freeing up our associates to focus on the quality aspects of their roles. The team is on track to deliver the previously announced business optimization program that will enhance our productivity and lower our overall cost to serve while continuing to offer customers an exceptional experience.

Robert: The performances of the high-efficiency line installations are driving a reduction of water waste at the filler and can nearly double the output capacity of the bottling line.

Robert Rietbroek: We are utilizing advanced robotics to assist some of the more strenuous aspects of our planning and distribution function, ultimately freeing up our associates to focus on the quality aspects of their roles. The team is on track to deliver the previously announced business optimization program that will enhance our productivity and lower our overall cost to serve while continuing to offer customers an exceptional experience. We remain committed to the annual run rate savings of $20 million by year-end 2024, and David will speak to the achievements this quarter and the progress toward our full-year goals.

Robert: We are utilizing advanced robotics to assist some of the more strenuous aspects of our planned and distribution functions.

Robert: ultimately freeing up our associates to focus on the quality aspects of their roles.

Robert: The team is on track to deliver the previously announced business optimization program that will enhance our productivity and lower our overall cost to serve while continuing to offer customers an exceptional experience.

Robbert Rietbroek: Williams. We remain committed to the annual run rate savings of $20 million by year and 2024, and David will speak to the achievements this quarter and the progress to our full-year goals.

Robert Rietbroek: We remain committed to the annual run rate savings of $20 million by year-end 2024, and David will speak to the achievements this quarter and the progress to our full year goals. From a sustainability perspective, we strive to source and process responsibly to protect the planet we inhabit. We will continue to implement our environmental strategy that is focused on sourcing water responsibly, converting our fleets to more eco-friendly propane, reusing, refilling, and recycling of our plastic bottles, and increasing the use of glass and aluminum as part of our product offering. We carefully monitor our withdrawal rates, and we use less than 25% of the permitted withdrawal limits, ensuring the long-term viability of our 100 water sources, which include 26 of our own wells and

Robert: We remain committed to the annual run rate savings of $20 million by year-end 2024 and David will speak to the achievements this quarter and the progress to our full year goals.

Robbert Rietbroek: From a sustainability perspective, we strive to source and process responsibly to protect the planet we inhabit. We will continue to implement our environmental strategy that is focused on sourcing water responsibly, converting our fleets to more eco-friendly propane, reusing, refilling, and recycling of our plastic bottles, and increasing the use of glass and aluminum as part of our product offering. We carefully monitor our withdrawal rates, and we use less than 25% of the permitted withdrawal limits, ensuring the long-term viability of our 100 water sources, which include 26 of our own wells and springs.

Robert Rietbroek: From a sustainability perspective, we strive to source and process responsibly. To protect the planet we inhabit, we will continue to implement our environmental strategy that is focused on sourcing water responsibly, converting our fleets to more eco-friendly propane, reusing, refilling, and recycling of our plastic bottles, and increasing the use of glass and aluminum as part of our product offering. We carefully monitor our withdrawal rates, and we use less than 25% of the permitted withdrawal limits, ensuring the long-term viability of our 100 water sources, which include 26 of our own wells and springs.

Robert: From a sustainability perspective, we strive to source and process responsibly.

Robert: We will continue to implement our environmental strategy that is focused on sourcing water responsibly, converting our fleets to more eco-friendly propane, reusing, refilling, and recycling of our plastic bottles, and increasing the use of glass and aluminum as part of our product offering, ensuring the long-term viability of our 100 water sources. We will detail these results and improvements in our 2023 Sustainability Report, which will be released later this quarter. Before I turn the call over to David to review our financial results in greater detail and provide our third quarter and full year 2024 outlook,

Robert: to protect the planet we inhabit.

Robert: We will continue to implement our environmental strategy

Robert: that is focused on sourcing water responsibly converting our fleets to more eco-friendly propane

today.

Robert: reusing, refilling, and recycling of our plastic bottles and increasing the use of glass and aluminum as part of our product offering.

Speaker Change: We carefully monitor our withdrawal rates, and we use less than 25% of the permitted withdrawal limits.

Robert: ensuring the long-term viability of our 100 water sources, which include 26 of our own wells and springs.

Operator: At this time, I would like to welcome everyone to the Primo Water Corporations 2nd quarter of 2024 earnings conference call. All lines have been placed in mute to prevent any background noise. Should you require operator assistance during the call, please press star zero.

Robbert Rietbroek: We will detail these results and improvements in our 2023 Sustainability Report, which will be released later this quarter. We have a clear plan to deliver growth and profitability with a favorable balance of volume and pricing. Our unique combination of associates, assets, and resources is capable of delivering strong results that benefit all our stakeholders. We are well positioned for future success.

Robert Rietbroek: We will detail these results and improvements in our 2023 Sustainability Report, which will be released later this quarter. We have a clear plan to deliver growth and profitability with a favorable balance of volume and price. Our unique combination of associates, assets, and resources is capable of delivering strong results that benefit all our stakeholders. We are well positioned for future success. Before I turn the call over to David to review our financial results in greater detail and provide our third quarter and full year 2024 outlook, I would like to once again thank all our Primo Water associates for their support and contribution to the excellent performance of the business. With that, I will now turn the call over to David.

Robert Rietbroek: We will detail these results and improvements in our 2023 Sustainability Report, which will be released later this quarter. We have a clear plan to deliver growth and profitability with a favorable balance of volume and price. Our unique combination of associates, assets, and resources is capable of delivering strong results that benefit all our stakeholders. We are well positioned for future success. Before I turn the call over to David to review our financial results in greater detail and provide our third quarter and full year 2024 outlook, I would like once again to thank all our Primo Water associates for their support and contribution to the excellent performance of the business. With that, I will now turn the call over to David.

Jon Kathol: I'll now turn the call over to Jon Kathol by S. Pleasant Investigation.

Robert: We will detail these results and improvements in our 2023 Sustainability Report, which will be released later this quarter.

Jon Kathol: Welcome to Primo Water Corporation 2nd quarter 2024 earnings conference call. All participants are currently in listen only mode. The call is being webcast live on Primo Water's website at Primo Water Corp.com and will be available there for playback. This conference call contains forward looking statements regarding the company's future financial and operational performance. The anticipated benefits and strategic rationale of the blue track transaction, including estimated synergies and capital expenditure rates. The ability of Primo Water to complete the transaction on terms agreed or at all.

David: We have a clear plan to deliver growth and profitability with a favorable balance of volume and pricing.

David: Our unique combination of associates, assets, and resources are capable of delivering strong results that benefit all our stakeholders.

Robbert Rietbroek: Before I turn the call over to David to review our financial results in greater detail and provide our third quarter and full-year 2024 outlook, I would like to once again thank all our Primo Water associates for their support and contribution to the excellent performance of the business.

Robert: we are well positioned for future success before i turn the call over to david to review our financial results in greater detail and provide our third quarter and full year two thousand and twenty -four outlook

Jon Kathol: The expected timing of the completed transaction, receipt of regulatory court and stock exchange approvals, and other statements that are not historical facts. These statements should be considered in connection with cautionary statements and disclaimers contained in the safe harbor statements in this morning's earnings press release. And the company's annual report on form 10K and quarterly reports on form 10Q and other filings with securities regulators. The company's actual performance could differ materially from these statements and the company undertakes no duty to update these forward looking statements, except as expressly required by applicable law.

Speaker Change: I would like to once again thank all our Primo Water associates for their support and contribution to the excellent performance of the business. With that, I will now turn the call over to David.

David Hass: With that, I will now turn the call over to David. Thanks, Robert. As a reminder, at the end of 2023, we disposed of a significant portion of our international assets, and thus our financial results discussed today are for continuing operations only. We are not covering discontinued operations unless otherwise noted. The second quarter results of our continuing operations included revenue, increasing 7.6% to $485 million; adjusted EBITDA, increasing 15% to $113 million, with adjusted EBITDA margins of 23.3%. All metrics exceeded the high end of our most recent guidance. Within the 7.6% revenue growth, approximately 6.6, or approximately $29.8 million, came from organic growth activity, with the balance, 1%, or approximately $4.6 million, coming from inorganic or acquired sources.

David Hass: As a reminder, at the end of 2023, we disposed of a significant portion of our international assets. And thus, our financial results discussed today are for continuing operations only. We are not covering discontinued operations unless otherwise noted. The second quarter results of our continuing operations included revenue increasing 7.6% to $485 million, adjusted EBITDA increasing 15% to $113 million, and adjusted EBITDA margins of 23.3%. All metrics exceeded the high end of our most recent guidance.

David Hass: As a reminder, at the end of 2023, we disposed of a significant portion of our international assets. Thus, our financial results discussed today are for continuing operations only. We are not covering discontinued operations unless otherwise noted.

rroubber: thanks rroubber

Speaker Change: As a reminder, at the end of 2023, we disposed of a significant portion of our international assets.

David: And thus, our financial results discussed today are for continuing operations only. We are not covering discontinued operations unless otherwise noted.

David: We are not covering discontinued operations unless otherwise noted. Within the 7.6% revenue growth, approximately $6.6 or approximately $29.8 million came from organic growth activity, with the balance 1% or approximately $4.6 million coming from inorganic or acquired sources. Volume activity in the quarter was strong across all of our water solutions, indicating strength in our bulk-oriented offering, as well as the complementary nature of our different water channels. The other water channel, which is primarily the retail and on-premise portion of Mountain Valley Premium Spring Water, was up 87%.

Jon Kathol: A reconciliation of any non-gap financial measures discussed during the call with the most comparable measures in accordance with GAP when the data is capable of being estimated is included in the company's second quarter earnings announcement, released earlier this morning, or on the investor relations section of the company's website at Primo Water Corp.com.

David Hass: Within the 7.6% revenue growth, approximately $6.6 or approximately $29.8 million came from organic growth activity, with the balance 1% or approximately $4.6 million coming from inorganic or acquired sources. Primo Water's definition of inorganic contribution includes any acquired businesses that were closed less than 12 months ago. After 12 months, any acquired business becomes part of our normal contribution base. Separately, the 7.6% revenue growth, irrespective of organic or acquired means, can be split into approximately 3.1% related to volume activity and approximately 4.5% related to pricing activity.

David Hass: The second quarter results of our continuing operations included revenue increasing 7.6% to $485 million, adjusted EBITDA increasing 15% to $113 million, and adjusted EBITDA margins of 23.3%. All metrics exceeded the high end of our most recent guidance. Within the 7.6% revenue growth, approximately $6.6 or approximately $29.8 million came from organic growth activity, with the balance 1% or approximately $4.6 million coming from inorganic or acquired sources. Primo Water's definition of inorganic contribution includes any acquired businesses that were closed less than 12 months ago.

David: The second quarter results of our continuing operations included revenue increasing 7.6% to $485 million, adjusted EBITDA increasing 15% to $113 million, with adjusted EBITDA margins of 23.3%.

Jon Kathol: In addition to slides accompanying today's webcast to assist you throughout our discussion, we have included a copy of the presentation in a supplemental earnings deck on our website.

David: All metrics exceeded the high end of our most recent guidance.

Jon Kathol: I am accompanied by Robert Reepbroke, Primo Water's Chief Executive Officer, and David Has, Chief Financial Officer. As previously announced, we will not be taking live questions from analysts or investors during this call. Instead, the most pertinent questions have been selected and will be addressed by our management team during today's call. Today's scripted comments will focus on Primo Water's current standalone results from continuing operations. Questions and updates related to the proposed merger with Blue Triton brands will be addressed in the moderated question and answer session on this call.

Speaker Change: Within the 7.6% revenue growth, approximately 6.6%

David: or approximately 29.8 million dollars came from organic growth activity with the balance 1% or approximately 4.6 million dollars coming from inorganic or acquired sources.

David Hass: Primo Water's definition of inorganic contribution includes any acquired businesses that were closed less than 12 months ago. After 12 months, any acquired business becomes part of our normal contribution base.

David: premao water' definition of inorganic contribution includes any acquired businesses that were closed less than twelve months ago after twelve months any acquired business becomes part of our normal contribution base

David Hass: After 12 months, any acquired business becomes part of our normal contribution base. Separately, the 7.6% revenue growth, irrespective of organic or acquired means, can be split into approximately 3.1% related to volume activity and approximately 4.5% related to pricing activity. Volume contribution, in this case, comes from both new customer additions or additional gallons consumed from existing customers or additional retail traffic in our exchange or refill businesses where actual customer counts are not directly known.

Robbert Rietbroek: With that, I will now turn the call over to Robert.

David Hass: Chris. Separately, the 7.6% revenue growth, irrespective of organic or acquired means, can be split into approximately 3.1% related to volume activity and approximately 4.5% related to pricing activity. Volume contribution, in this case, comes from both new customer additions or additional gallons consumed from existing customers or additional retail traffic in our exchange or refill businesses where actual customer counts are not directly known. Volume activity in the corner was strong across all of our water solutions, indicating strengths in our bulk-oriented offering as well as the complimentary nature of our different water channels. We believe that volume across our water solutions will continue to be a primary indicator of business health versus overall customer counts.

Robbert Rietbroek: Thank you, John, and good morning, everyone. Since the beginning of this year, our team embraces a new strategy that includes a relentless focus on customer-centric initiatives, must win priorities, as well as a commercial and growth mindset leveraging our portfolio of hydration solutions. Our must wins are focused on delivering a superior customer experience, positioning ourselves as a partner of choice to retail partners, and other key stakeholders at operational excellence. Our brand portfolio is driving sustainable growth and results are strong.

David: Separately, the 7.6% revenue growth, irrespective of organic or acquired means, can be split into approximately 3.1% related to volume activity and approximately 4.5% related to pricing activity.

David Hass: Volume contribution in this case comes from both new customer additions or additional gallons consumed from existing customers or additional retail traffic in our exchange or refill businesses where actual customer counts are not directly known. Volume activity in the quarter was strong across all of our water solutions, indicating strength in our bulk-oriented offering, as well as the complementary nature of our different water channels. We believe that volume across our water solutions will continue to be a primary indicator of business health versus overall customer count. Once again, we have expanded our channel disclosure to break out the price and volume splits for each of the channels versus the prior year.

David: Volume contribution in this case comes from both new customer additions or additional gallons consumed from existing customers or additional retail traffic in our exchange or refill businesses where actual customer counts are not directly known.

David Hass: Volume activity in the quarter was strong across all of our water solutions, indicating strength in our bulk-oriented offering, as well as the complementary nature of our different water channels. We believe that volume across our water solutions will continue to be a primary indicator of business health versus overall customer count. Once again, we have expanded our channel disclosure to break out the price and volume splits for each of the channels versus the prior year.

Robbert Rietbroek: Our second quarter results showed continued strength across the business and organization, with broad-based and balanced growth across channels. Strong progress against priorities, unit growth combined with pricing, enabling us to expand margins and generate a higher rate of free cash flow while delivering against sustainability targets. Total revenue of $485 million increased 7.6%, consisting of volume growth of 3.1% and pricing growth of 4.5%. Revenue gains were driven by organic growth of 6.6%, demonstrating the health of our consumer and category, as well as our strength across our brands and water solutions offerings in the current economic environment.

David: Volume activity in the quarter was strong across all of our water solutions, indicating strength in our bulk-oriented offering, as well as the complementary nature of our different water channels.

David: We believe that volume across our water solutions will continue to be a primary indicator of business health versus overall customer counts.

David Hass: Once again, we have expanded our channel disclosure to break out the price and volume splits for each of the channels versus prior year. A table of the results is included with our supplemental earnings deck. You will notice that volume gains occurred across each of the water channels, and price improved except for the welcome price decline in water dispensers. Within our channels, we had strong revenue growth of 7% in water directing and exchange and a 12% increase in our water refill and filtration channel. The other water channel, which is primarily the retail and on-premise portion of Mountain Valley Premium Spring Water, was up 87%.

David: Once again, we have expanded our channel disclosure to break out the price and volume splits for each of the channels versus prior year. A table of the results is included with our supplemental earnings deck.

David Hass: A table of the results is included with our Supplemental Earnings Dex. You will notice that volume gains occurred across each of the water channels and prices improved, except for the welcome price decline in water dispensers. Within our channels, we had strong revenue growth of 7% in Water Directing and Exchange and a 12% increase in our Water Refill and Filtration channels. The other water channel, which is primarily the retail and on-premise portion of Mountain Valley Premium Spring Water, was up 87%.

David: You will notice that volume gains occurred across each of the water channels and price improved, except for the welcome price decline in water dispensers.

David: Within our channels we had strong revenue growth of 7% in water directing and exchange, and a 12% increase in our water refill and filtration channel.

David: The other water channel, which is primarily the retail and on-premise portion of Mountain Valley Premium Spring Water, was up 87%.

David Hass: The water dispenser business representing the sell-in of our units to the retailer declined 21%, driven by a decline of 16% from volume and expected lower wholesale prices as the tariff elimination works through our pricing architecture. On the heels of a very strong first quarter, through the first half of 2024, the water dispenser business is up 2%, driven by volume of approximately 15% and offset by pricing of negative 13%.

David Hass: The water dispenser business, representing the sell-in of our units to the retailer, declined 21 percent, driven by a decline of 16 percent in volume and expected lower wholesale prices as the tariff elimination works through our pricing architecture. On the heels of a very strong first quarter, through the first half of 2024, the water dispenser business is up 2%, driven by volume of approximately 15% and offset by pricing of negative 13%. The other channel decline is reflective of our remaining non-core office coffee services, which is not a point of emphasis in our current model.

David: The water dispenser business, representing the sell-in of our units to the retailer, declined 21 percent, driven by a 16 percent decline in volume and expected lower wholesale prices as the tariff elimination works through our pricing architecture.

David Hass: The water dispenser business, representing the sell-in of our units to the retailer, declined 21%, driven by a decline of 16% in volume and expected lower wholesale prices as the tariff elimination works through our pricing architecture. On the heels of a very strong first quarter, through the first half of 2024, the water dispenser business is up 2%, driven by volume of approximately 15%, and offset by pricing of negative 13%. The other channel decline is reflective of our remaining non-core office coffee services, which is not a point of emphasis in our current model.

David: The water dispenser business representing the sell-in of our units to the retailer.

David: declined 21 percent, driven by a decline of 16 percent from volume, and expected lower wholesale prices as the tariff elimination works through our pricing architecture.

Robbert Rietbroek: I would like to publicly recognize and thank them for embracing our must-win priorities and remaining frontline focused while staying dedicated to growing the business profitably. From a macroeconomic perspective, demand for our water solutions is strong, and consumers continue to prioritize healthier lifestyles and focus on hydration. We offer high quality drinking water solutions to meet the consumer demand, however they choose to hydrate. We continue to see the growth potential as a pure-played water company in the large, highly fragmented, and growing North America water category.

David: On the heels of a very strong first quarter, through the first half of 2024, the water dispenser business is up 2%, driven by volume of approximately 15% and offset by pricing of negative 13%. When we receive funds, we record them in the same manner as the original transaction, and our Automated Route Optimization, or ARO, tool continues to yield efficiencies. In the U.S., units per route per day increased approximately 2 percent compared to Q2 of 2023, and revenue per route increased more than 5 percent compared to Q2 of 2023.

David: On the heels of a very strong first quarter, through the first half of 2024, the water dispenser business is up 2%, driven by volume of approximately 15%, and offset by pricing of negative 13%.

David Hass: The other channel decline is reflective of our remaining non-core office coffee services, which is not a point of emphasis in our current model. Water dispenser sell through or those items sold from the retailer to the end customer was approximately 260,000 units in the quarter of approximately 4%. As a reminder, our business model includes two approaches of selling the water dispenser. The rental of the water dispenser to residential and commercial customers in our water direct business and the sale of water dispensers through our retail partners and online. Both approaches enable growth in water solutions and contribute to our predictable and recurring revenue growth.

David: The other channel decline is reflective of our remaining non-core office coffee services, which is not a point of emphasis in our current model.

David Hass: Water dispenser sell-through, or those items sold from the retailer to the end customer, was approximately 260,000 units in the quarter, up approximately 4%. As a reminder, our business model includes two ways of selling the water dispenser. The rental of the water dispenser to residential and commercial customers in our WaterDirect business and the sale of water dispensers through our retail partners and online.

David: Water dispensers sell-through, or those items sold from the retailer to the end customer, was approximately 260,000 units in the quarter, up approximately 4%.

Robbert Rietbroek: High quality drinking water has universal appeal, and is a solution for all day parts and usage occasions. Our split between residential and commercial customer base remains approximately 50-50, ensuring a healthy balance of revenue sources. As a beverage company, compared to the broader beverage category, we are pleased that we continue to grow revenue in both volume and price. Furthermore, our current and future business opportunities benefit from additional tailwinds, including growing environmental concerns. Our extensive water resources ensure availability and are reinforced by our dedication to responsible water source stewardship.

David: As a reminder, our business model includes two approaches of selling the water dispenser. The rental of the water dispenser to residential and commercial customers in our WaterDirect business and the sale of water dispensers through our retail partners and online.

David Hass: Both approaches enable growth in water solutions and contribute to our predictable and recurring revenue growth. We have been particularly focused on growth with our brick-and-mortar retail partners, where we have greater visibility into the connectivity to our water solutions and higher connectivity compared to e-commerce channels. As discussed in previous calls, our water dispenser category was previously under a 25% import tariff but was reclassified last year, and a refund process from the U.S. government was initiated. When we receive funds, we record them in the same manner as the original transaction. During Q2, we did not receive any refunds, reflecting the inconsistent nature of the government refund process.

David: Both approaches enable growth in water solutions and contribute to our predictable and recurring revenue growth.

David Hass: We have been particularly focused on growth with our brick-and-mortar retail partners, where we have greater visibility into the connectivity to our water solutions and higher connectivity compared to e-commerce channels.

David: We have been particularly focused on growth with our brick-and-mortar retail partners, where we have greater visibility into the connectivity to our water solutions and higher connectivity compared to e-commerce channels.

David Hass: As discussed in previous calls, our water dispenser category was previously under a 25% import tariff but was reclassified last year, and a refund process from the US government was initiated. When we received funds, we record them in the same manner as the original transactions. During Q2, we did not receive any refunds, reflecting the inconsistent nature of the government refund process. When including last year's payments, cumulatively through the second quarter of 2024, we have received approximately $10.8 million. We remain confident that refunds will be received, but we cannot predict the timing of receipt. As we look further into the operational metrics and as Robert mentioned earlier, our commitment to improving the customer experience continues to result in improved on-time info or OTIF rates.

David: as discussed in previous calls our water dispencer category was previously under a twenty five percent import tariffs but was reclassified last year and a refund process from the u s government was initiated when we receiveved funds we record them in the same manner as the original transactions

Robbert Rietbroek: With that, let us discuss the specific progress of each of our must-win priorities that I identified upon arriving earlier this year. The first must-win is to provide a superior customer experience with the goal to yield net organic growth and units or gallons consumed across our water portfolio. We are focused on acquiring and maintaining high-value customers and driving annual galling growth. Consumers can select our products from multiple price tiers, from a value price of 50 cents per gallon for water sold at a refill station, all the way up to our super premium mountain valley spring water delivered in multi-format glass, PET and aluminum bottles direct to their door or sold at retail in various on-premise locations.

David: During Q2, we did not receive any refunds reflecting the inconsistent nature of the government refund process.

David Hass: When including last year's payments, cumulatively, through the second quarter of 2024, we have received approximately $10.8 million. We remain confident that refunds will be received, but we cannot predict the timing of receipts. As we look further into the operational metrics, and as Robert mentioned earlier, our commitment to improving the customer experience continues to result in improved on-time, in-full, or OTIF rates. The ability to serve our customers in the most efficient manner possible is a critical driver of both our short and long-term profitability, and our Automated Route Optimization, or ARO, tool continues to yield efficiencies.

Speaker Change: when including last year's payments cumulatively through the second quarter of twothousand and twenty four we have received approximately ten point eight million dollars we remain confident that refunds will be received but we cannot predict the timing of reseipt

David: As we look further into the operational metrics, and as Robert mentioned earlier, our commitment to improving the customer experience continues to result in improved on-time, in-full, or OTIF rates, the ability to serve our customers in the most efficient manner,

David Hass: The ability to serve our customers in the most efficient manner possible is a critical driver of both our short and long-term profitability, and our automated route optimization or ARO tool continues to yield efficiencies. In the US, units per route per day increased approximately 2% compared to Q2 of 2023, and revenue per route increased more than 5% compared to Q2 of 2023. Our scale and leverage continued to improve as we service more customers with higher volume per route. Additionally, water direct customer attention increased to approximately 86% and increased versus the end of last year and the second quarter of 2023.

David: possible is a critical driver of both our short and long-term profitability

Robbert Rietbroek: Our increased focus on mountain valley, which I spoke about last quarter, continues to deliver impressive results. During the second quarter, we increased our mountain value retail revenue by approximately 87 percent over the prior year. We are off to an impressive start with the launch of our 15 ounce aluminum bottles, which began south food stores throughout the country and to our water direct customers in Q2. Mountain valley is already a leading brand of spring water sold in a natural food channel, and we continue to see high levels of mountain valley demand for our five gallon, two and a half gallon, retail and on-premise multi-serve and single-use products.

David: and our Automated Route Optimization, or ARO, tool continues to yield efficiencies.

David Hass: In the U.S., units per route per day increased approximately 2 percent compared to Q2 of 2023, and revenue per route increased more than 5 percent compared to Q2 of 2023. Additionally, WaterDirect customer retention increased to approximately 86%, an increase versus the end of last year and the second quarter of 2023.

David: In the U.S., units per route per day increased approximately 2% compared to Q2 of 2023, and revenue per route increased more than 5% compared to Q2 of 2023.

David: our scale and leverage continued to improve as we service more customers with higher volume per oute

Speaker Change: additionally water direct customer attention increased to approximately eighty six percent and increase verse the end of last year and the second quarter of two thousand and twenty three

David Hass: Shifting to our balance sheet and cash flows, the net leverage ratio at the end of the second quarter on a trailing 12 month basis stood at approximately 1.6 times our adjusted EBITDA, a 50 basis point improvement from year end 2023. Similarly, our liquidity remains strong, with approximately $603 million of cash on the balance sheet, approximately $615.5 million when considering the cash within our discontinued operations and a fully unused cash flow revolver. Specific to our cash flow revolver, we recently extended the maturity of our revolver to September 2026, which will allow us time to establish the proper capital support financing for Newco once the merger is completed.

David Hass: Moving to our balance sheet and cash flow, our net leverage ratio at the end of the second quarter on a trailing 12-month basis stood at approximately 1.6 times our adjusted EBITDA, a 50 basis point improvement from year-end 2023. Similarly, our liquidity remains strong with approximately $603 million of cash on the balance sheet, approximately $615.5 million when considering the cash within our discontinued operations and a fully unused cash flow revolver. Specific to our cash flow revolver, we recently extended the maturity of our revolver to September 2026, which will allow us time to establish the proper capital support financing for NUCCO once the merger is completed.

David: Shifting to our balance sheet and cash flows.

David: Our net leverage ratio at the end of the second quarter on a trailing 12-month basis stood at approximately 1.6 times our adjusted EBITDA, a 50 basis point improvement from year-end 2023.

Robbert Rietbroek: We continue to scale operations in support of the mountain valley growth and are currently running all three of our glass bottling lines 24-7. Looking ahead to our broader portfolio, we have planned customer recruitment marketing programs like refer a friend, movers, and returning customers. That will include a targeted media campaign, any frictionless end-to-end customer experience where it's easy to do business with us. We are consistently enhancing various consumer touchpoints to improve their experience.

David: Similarly, our liquidity remains strong with approximately $603 million of cash on the balance sheet. We remain on target to complete the sale of the businesses in Israel and the U.K. by year-end. The Israeli process is being run by an investment bank, and interest levels are strong.

David: Similarly, our liquidity remains strong with approximately 603 million dollars of cash on the balance sheet.

David Hass: Approximately $615.5 million when considering the cash within our discontinued operations and a fully unused cash flow revolver. Specific to our cash flow revolver, we recently extended the maturity of our revolver to September 2026, which will allow us time to establish the proper capital support financing for NUCCO once the merger is completed. In the quarter, we paid approximately $21.4 million in interest, net of interest income. On a full-year basis, while we will be a net interest expense payer, we are quite pleased with both the low interest rate carried on our senior notes and our ability to generate interest income in today's yield environment.

David: approximately $615.5 million when considering the cash within our discontinued operations and a fully unused cash flow revolver.

David: specific to our cash flow revolver we recently extended the maturity of our revolver to september two thousand and twenty six

Robbert Rietbroek: This quarter, traffic to our digital assets was up 29 percent as we upgraded the Mywater Plus app with a fresh design, enhanced features, and launched improvements to our water.com quick-shop features to streamline the customer's shop to cart journey, particularly when engaging with our promotions, and enabled easier access to customer support through our chat feature now available six days a week. By increasing the coverage of our customer experience center, we had over 30,000 interactions with customers via our chat functionality with the focus on our quality of service and rapid request resolution. The initial reaction to our increased customer experience efforts is encouraging. Our Google business rating has improved 8 percent year over year and our net promoter scores have improved 12 percent from the prior year.

David: which will allow us time to establish the proper capital support financing for NUCCO once the merger is completed.

David Hass: In the quarter, we paid approximately $21.4 million of interest, net of interest income. On a full year basis, while we will be a net interest expense payer, we are quite pleased with both the low interest rate carried on our senior notes and our ability to generate interest income in today's yield environment. During the second quarter, we completed the sale of AMIA Foods, our UK food and drink business, for $75.5 million, approximately $91 million when including dividends extracted from the business.

David Hass: In the quarter, we paid approximately $21.4 million in interest, net of interest income. On a full-year basis, while we will be a net interest expense payer, we are quite pleased with both the low interest rate carried on our senior notes and our ability to generate interest income in today's yield environment. During the second quarter, we completed the sale of EMEA Foods, our UK food and drink business, for $75.5 million, approximately $91 million when including dividends extracted from the business.

David: In the quarter, we paid approximately $21.4 million of interest, net of interest income.

David: On a full-year basis, while we will be a net interest expense payer, we are quite pleased with both the low interest rate carried on our senior notes and our ability to generate interest income in today's yield environment.

David Hass: During the second quarter, we completed the sale of EMEA Foods, our UK food and drink business, for $75.5 million, approximately $91 million when including dividends extracted from the business. After the close of Q2, we successfully completed the sale of our Portugal business for $19.2 million. Due to the timing of the Portugal sale, the funds are not reflected in our Q2 balance sheet. However, we remain on target to complete the sale of the businesses in Israel and the U.K. by year-end. The Israel process is being run by an investment bank, and interest levels are strong.

David: During the second quarter, we completed the sale of EMEA Foods, our UK food and drink business, for $75.5 million, approximately $91 million when including dividends extracted from the business.

David Hass: After the close of Q2, we successfully completed the sale of our Portugal business for $19.2 million.

David Hass: After the close of Q2, we successfully completed the sale of our Portugal business for $19.2 million. Due to the timing of the Portugal sale, the funds are not reflected in our Q2 balance sheet. We remain on target to complete the sale of the businesses in Israel and the UK by year-end. The Israel process is being run by an investment bank, and interest levels are strong.

David: After the close of Q2, we successfully completed the sale of our Portugal business for $19.2 million.

David: Due to the timing of the Portugal sale, the funds are not reflected in our Q2 balance sheet.

Robbert Rietbroek: The second must win is to be the preferred water solutions partner. We meet the end consumer across numerous channels like direct to consumer delivery or through one of our retail partners with our change locations or refill stations. We have an offering to meet each of our customer's needs and budget or what we call water your way. Customer and volume growth starts with increasing the number of customers Customers, and locations in water direct, exchange, refill, and the sale of water dispensers at retail, which drives connectivity across our portfolio of water solutions.

David: We remain on target to complete the sale of the businesses in Israel and the UK by year-end. The Israel process is being run by an investment bank and interest levels are strong.

David Hass: Our adjusted free cash flow results for the second quarter totaled $73 million, a year-over-year improvement of $34 million. The improvement was primarily driven by increased earnings, reduced net interest expense, and improved working capital, offset by increased levels of capital expenditures and higher cash taxes due to fewer NOLs as we shift to a net taxpayer relative to prior years. As a reminder, our increase in year-over-year adjusted free cash flow is different than how that growth contributes to our full year 2024 guidance, which I will discuss in a few minutes.

David: Our adjusted free cash flow results for the second quarter totaled $73 million.

David Hass: Rietbroek. Rietbroek was primarily driven by increased earnings, reduced net interest expense, and improved working capital, offset by increased levels of capital expenditures and higher cash taxes due to fewer NOLs as we shift to a net taxpayer relative to prior years. As a reminder, our increase in year-over-year adjusted free cash flow is different than how that growth contributes to our full year 2024 guidance, which we'll discuss in a few minutes. We are incredibly pleased with the free cash flow momentum on a year-over-year basis. The results for the second quarter reflect a series of receivables improvements and improved inventory levels that began in the second half of last year and are still driving benefit today.

David: A year-over-year improvement of $34 million.

David: The improvement was primarily driven by increased earnings.

Speaker Change: reduced net interest expense and improved working capital offset by increased levels of capital expenditures and higher cash taxes due to fewer NOLs as we shift to a net taxpayer relative to prior years.

Robbert Rietbroek: During the second quarter, we were able to secure additional display racks with certain major retail stores to support capacity in our change channel. Our focus on filling white space gaps and increasing capacity and in stocks is having a noticeable effect by driving double digit revenue growth in the exchange business. The increase in customers and locations will drive future volume growth. As evidence of this future growth, we were recently awarded an agreement to place up to 1,000 incremental refill machines with a large chain of convenience stores in the US.

David: As a reminder, our increase in year-over-year adjusted free cash flow is different than how that growth contributes to our full year 2024 guidance, which I will discuss in a few minutes.

David Hass: We are incredibly pleased with the free cash flow momentum on a year-over-year basis. The results for the second quarter reflect a series of receivables improvements and improved inventory levels that began in the second half of last year and are still driving benefits today.

David: We are incredibly pleased with the free cash flow momentum on a year-over-year basis. The results for the second quarter reflect a series of receivables improvements and improved inventory levels that began in the second half of last year and are still driving benefit today.

David Hass: As supported in our supplemental earnings deck in the third quarter of 2023, we posted adjusted free cash flow of $92.7 million in our continuing operations, which was the primary contribution for our full year 2023 results of $157.8 million. Because of this outsized contribution, as we head into the third quarter of 2024, we expect a more measured outcome per quarter in our free cash flow for the second half of 2024. In summary, we are pleased with our ability to maintain a high conversion of our adjusted EBITDA into free cash flow. In our 2024 guidance, we contemplate this outcome.

David Hass: As supported in our Supplemental Earnings Debt, in the third quarter of 2023, we posted adjusted free cash flow of $92.7 million in our continuing operations, which was the primary contribution for our full year 2023 results of $157.8 million. Because of this outsized contribution, as we head into the third quarter of 2024, we expect a more measured outcome per quarter in our free cash flow for the second half of 2024. In summary, we are pleased with our ability to maintain a high conversion of our adjusted EBITDA into free cash flow, and our 2024 guidance contemplates this outcome. Once again, as I transition into our 2024 outlook, any forward guidance will strictly be for continuing operations. Discontinued operations will not be covered.

David Hass: As supported in our Supplemental Earnings Deck, in the third quarter of 2023, we posted adjusted free cash flow of $92.7 million in our continuing operations, which was the primary contribution for our full year 2023 results of $157.8 million. Because of this outsized contribution, as we head into the third quarter of 2024, we expect a more measured outcome per quarter in our free cash flow for the second half of 2024. In summary, we are pleased with our ability to maintain a high conversion of our adjusted EBITDA into free cash flow, and our 2024 guidance contemplates this outcome. Once again, as I transition into our 2024 outlook, any forward guidance will strictly be for continuing operations. Discontinued operations will not be covered.

Robbert Rietbroek: Placement of these machines will begin taking place in the remainder of 2024 and well into 2025. The concept of partnering stretches across all aspects of our business, including associates, suppliers, customers, and current and potential share owners. It begins with our associates whose dedication is evident in every aspect of their efforts. Ensuring a safe environment is our top priority and is essential for our associates to thrive. And we are committed to enhancing our workplaces, upgrading offices, locker rooms, break areas, and parking facilities, as well as production and distribution areas.

David: As supported in our Supplemental Earnings Debt, in the third quarter of 2023, we posted adjusted free cash flow of $92.7 million.

David: in our continuing operations, which was the primary contribution for our full year 2023 results of $157.8 million.

David: Because of this outsized contribution, as we head into the third quarter of 2024, we expect a more measured outcome per quarter in our free cash flow for the second half of 2024. Similarly, we are increasing our full-year 2024 adjusted EBITDA to be between $420 million and $440 million with an implied adjusted EBITDA margin of 22.9% at the midpoint. Full-year 2024 cash taxes are expected to be approximately $35 million to $45 million, a $5 million increase at the midpoint, driven by an $18 million increase in the midpoint of adjusted EBITDA since our initial guidance on February 22nd.

David: Because of this outsized contribution, as we head into the third quarter of 2024, we expect a more measured outcome per quarter in our free cash flow for the second half of 2024.

David: In summary, we are pleased with our ability to maintain a high conversion of our adjusted EBITDA into free cash flow, and our 2024 guidance contemplates this outcome.

David Hass: Once again, as I transition into our 2024 outlook, any forward guidance will strictly be for continuing operations.

Speaker Change: once again as i transition into our two thousand and twenty four outlook any forward guidance will strictly be for continuing operations discontinued operations will not be covered

David Hass: Discontinued operations will not be covered. To help bridge our 2024 guidance, a table of 2023 financial results for continuing operations by quarter has been provided in the appendix of our supplemental earnings slides. We are forecasting third quarter revenue guidance to be between $485 million and $495 million. We expect Q3 adjusted EBITDA to be between $115 million and $125 million, with an implied adjusted EBITDA margin of 24.5% at the midpoint. The 24.5% adjusted EBITDA margin represents a 70 basis point improvement from the year-go period. For the full year 2020 forecast of continuing operations, we are increasing our revenue projection to be between $1.87 billion and $1.89 billion, with revenue growth at the midpoint of 6.1%.

David Hass: To help bridge our 2024 guidance, a table of 2023's financial results for continuing operations by quarter has been provided in the appendix of our supplemental earnings slide. We are forecasting third quarter revenue guidance to be between $485 million and $495 million. We expect Q3 adjusted EBITDA to be between $115 million and $125 million, with an implied adjusted EBITDA margin of 24.5% at the midpoint. The 24.5% adjusted EBITDA margin represents a 70 basis point improvement from the year-ago period.

Robbert Rietbroek: Associate safety at work, as well as in the home, is being fostered to the Q2 launch of the 100 days of safety summer program. Aimed at raising awareness for summer safety best practices, but also rewarding associates for adopting a safety mindset. The program roll out as yielded promising results in reported incidents and overall associate retention and engagement. Community involvement is a key element of our culture, as our associates live in the areas we serve and are passionate about the products and services we provide.

David: To help bridge our 2024 guidance, a table of 2023's financial results for continuing operations by quarter has been provided in the appendix of our supplemental earnings slides.

David: We are forecasting third quarter revenue guidance to be between $485 million and $495 million.

David: we expect q three adjusted ebitda to be between one hundred and fifteen million and one hundred twenty five million dollars with an implied adjusted ebita margin of twenty four point five percent at the midpoint

Robbert Rietbroek: One example of our community involvement includes providing support in times of need, like supplying water in times of natural disasters, like the wildfires and hurricanes across several states, as well as during municipal water emergencies. Last quarter, we also went above and beyond providing our products and services in times of need by investing our time in the betterment of our communities. We had the pleasure of co-hosting a community cleanup recently with the city of hot springs, parks, and trails, the home of our mountain valley brand.

David: The 24.5% adjusted EBITDA margin represents a 70 basis point improvement from the year-ago period.

David Hass: For the full year 2024 forecast of continuing operations, we are increasing our revenue projection to be between $1.87 billion and $1.89 billion, with revenue growth at the midpoint of 6.1 percent. Similarly, we are increasing our full year 2024 adjusted EBITDA projection to be between $420 million and $440 million, with an implied adjusted EBITDA margin of 22.9% at the midpoint. The increase in guidance contemplates both the benefit from the strong start in the first half of the year, as well as some balance of your benefit from our business optimization program. During Q1, we discussed cost-reduction activities of approximately $2 million.

David: For the full year 2024 forecast of continuing operations, we are increasing our revenue projection to be between $1.87 billion and $1.89 billion, with revenue growth at the midpoint of 6.1 percent.

David Hass: Similarly, we are increasing our full year 2024 adjusted EBITDA to be between $420 million and $440 million, with an implied adjusted EBITDA margin of 22.9% at the midpoint. The increase in guidance contemplates both the benefit from the strong start in the first half of the year, as well as some balance of your benefit from our business optimization program. During Q1, we discussed cost reduction activities of approximately $2 million. And during Q2, we took action on another $2 million, bringing the total to $4 million that will be achieved within 2024. This is reflected in our adjusted EBITDA guidance increase.

David: Similarly, we are increasing our full year 2024 adjusted EBITDA to be between $420 million and $440 million, with an implied adjusted EBITDA margin of 22.9% at the midpoint.

Robbert Rietbroek: We embrace our partnerships and our customer base spans across all types of retail, including mass merchandisers, club stores, DIY, and e-commerce with top tier retailers like Walmart, Costco, Home Depot, Lowe's, and prominent grocery chains throughout North America. I continue to engage with these world-class retailers in top-to-top meetings and have found a strong desire on their part to drive more traffic to their stores and websites with our dispensers and water accessories such as the Rolling Water Cooler available on select retailer sites and water.com, exchange and refill stations, as well as mountain valley spring water.

David: The increase in guidance contemplates both the benefit from the strong start in the first half of the year, as well as some balance of your benefit from our business optimization program.

David: During Q1, we discussed cost reduction activities of approximately $2 million, and during Q2, we took action on another $2 million, bringing the total to $4 million that will be achieved within 2024.

David Hass: And during Q2, we took action on another $2 million, bringing the total to $4 million that will be achieved within 2024. This is reflected in our Adjusted EBITDA guidance increase. These savings will annualize out to approximately $8 million on a 2025 run rate basis toward our $20 million goal. We are maintaining the forecast for the 2024 CapEx guidance of approximately 7% of our revenue guidance range, plus an incremental $22.5 million of strategic CapEx.

David Hass: And during Q2, we took action on another $2 million, bringing the total to $4 million that will be achieved within 2024. This is reflected in our adjusted EBITDA guidance increase. These savings will annualize out to approximately $8 million on a 2025 run rate basis toward our $20 million goal. We are maintaining the forecast for the 2024 CapEx guidance of approximately 7% of our revenue guidance range, plus an incremental $22.5 million of strategic CapEx.

David Hass: These savings will annualize out to approximately $8 million on a 2025 run rate basis toward our $20 million goal. We are maintaining the forecast of the 2024 CAPEX guidance of approximately 7% of our revenue guidance range, plus an incremental $22.5 million of strategic CAPEX. Full year 2024 cash taxes are expected to be approximately $35 million to $45 million, a $5 million increase at the midpoint driven by an $18 million increase in the midpoint of adjusted EBITDA since our initial guidance on February 22. The cash tax guidance includes utilization of US net operating losses or NOLs of which we have approximately $46 million available for use in 2024.

David: This is reflected in our Adjusted EBITDA guidance increase. These savings will annualize out to approximately $8 million on a 2025 run rate basis toward our $20 million goal.

David: We are maintaining the forecast of the 2024 CapEx guidance of approximately 7% of our revenue guidance range, plus an incremental $22.5 million of strategic CapEx.

Robbert Rietbroek: David and I once again had numerous and extensive interactions with investors and analysts in the second quarter. He themes included an appreciation for our North American focused business model, our growth algorithm, free cash flow generation and conversion, progress on the sale of the European and Israeli assets, an appreciation for our strong balance sheet and low leverage, how we plan to deploy capital in the coming quarters and of course a review of our planned merger with Blue Triton Brands. I would like to extend my personal gratitude to our stakeholders for their high level of engagement. By maintaining, strengthening and enhancing these partnerships we can achieve even greater success together.

David Hass: Full-year 2024 cash taxes are expected to be approximately $35 million to $45 million, a $5 million increase at the midpoint, driven by an $18 million increase in the midpoint of adjusted EBITDA since our initial guidance on February 22nd. The cash tax guidance includes utilization of U.S. net operating losses, or NOLs, of which we have approximately $46 million available for use in 2024. We still expect the amount of NOLs available to be approximately $16 million in 2025 and $10 million per year in 2026 through 2029.

David Hass: Full year 2024 cash taxes are expected to be approximately $35 million to $45 million, a $5 million increase at the midpoint, driven by an $18 million increase in the midpoint of adjusted EBITDA since our initial guidance on February 22nd. The cash tax guidance includes utilization of U.S. net operating losses, or NOLs, of which we have approximately $46 million available for use in 2024. We still expect the amount of NOLs available to be approximately $16 million in 2025 and $10 million per year in 2026 through 2029.

David: Full year 2024 cash taxes are expected to be approximately $35 million to $45 million.

David: a $5 million increase at the midpoint.

David: driven by an $18 million increase in the midpoint of adjusted EBITDA since our initial guidance on February 22nd.

David: The cash tax guidance includes utilization of U.S. net operating losses, or NOLs.

David: of which we have approximately 46 million available for use in 2024. We still expect the amount of NOLs available to be approximately 16 million in 2025 and 10 million per year in 2026 through 2029.

David Hass: We still expect the amount of NOLs available to be approximately $16 million in 2025 and $10 million per year in 2026 through 2029. For full year 2024, we are revising the midpoint of our net cash interest expense guidance down $5 million from a previous range of approximately $30 million to $50 million to now $25 million to $45 million. The decrease is a result of cash interest earned halfway through the year as our balance sheet remains strong and our fixed rate capital structure carrying very low interest rates of approximately 4.2% in 2028 and 2029. Additionally, we will take steps to maximize the interest income yield throughout 2024, but could experience reduced income opportunities if market available rates decline related to any macro Fed or bank rate environment decisions.

David Hass: For full year 2024, we are revising the midpoint of our net cash interest expense guidance down $5 million from a previous range of approximately $30 million to $50 million to now $25 million to $45 million. The decrease is a result of cash interest earned halfway through the year as our balance sheet remains strong and our fixed rate capital structure carrying very low interest rates of approximately 4.2% maturing in 2028 and 2029.

Robbert Rietbroek: The third must win is operational excellence, specifically ensuring that we have an optimized organizational structure and operating systems to guarantee our associate safety and well being deliver the highest quality product and service to our valued customers and scale efficiently as we continue to grow. During the second quarter we began implementing six and seven day delivery schedules as we moved into our traditionally busy period of the summer. We were able to increase our on time, inflow rate to 94% in our water direct channel for the second quarter with positive feedback from our exchange customers on the strength and holiday service support.

David: For full year 2024, we are revising the midpoint of our net cash interest expense guidance down $5 million from a previous range of approximately $30 million to $50 million to now $25 million to $45 million.

David: The decrease is a result of cash interest earned halfway through the year, as our balance sheet remains strong and our fixed rate capital structure carrying very low interest rates of approximately 4.2% maturing in 2028 and 2029.

David Hass: Additionally, we will take steps to maximize the interest income yield throughout 2024 but could experience reduced income opportunities if market available rates decline related to any macro Fed or bank rate environment decisions. Combining all of these factors, along with the core health and cash generation capacity of our business model, we are forecasting adjusted free cash flow from continuing operations of between $180 million and $190 million in 2024. The $5 million increase at the midpoint is attributed to the free cash flow conversion of the $10 million increase in our adjusted EBITDA guidance.

David: Additionally, we will take steps to maximize the interest income yield throughout 2024, but could experience reduced income opportunities if market-available rates decline related to any macro-fed or bank-rate environment decisions.

Robbert Rietbroek: Our refill channel had machine uptime of 98%, an increase over last quarter and our time to address service calls improved by one and a half days versus last quarter. Throughout our operations, we are driving integrated business processes. During the second quarter we increased our revenue per out by 5%, and units per out per day by 2%, an indication of improved asset utilization, route density and positive volume and pricing improvement makes. The same principles are now being employed in the optimization of our refill routes, enabling us to extract more value from our team of technicians and service providers.

David Hass: Combining all of these factors, along with the core health and cash generation capacity of our business model, we are forecasting adjusted pre cash flow from continuing operations of between $180 million and $120 million in 2024. The $5 million increase at the midpoint is attributed to the free cash flow conversion of the $10 million increase in our adjusted EBITDA guidance. This outlook solidifies our commitment to replace the adjusted free cash flow that was tied to the international assets sold and those held for sale in our discontinued operations. This team should be commended for the speed of achieving this goal.

David: Combining all of these factors, along with the core health and cash generation capacity of our business model, we are forecasting adjusted free cash flow from continuing operations of between $180 million and $190 million in 2024. Recently, our board of directors authorized a quarterly dividend of nine cents per common share, a 13% increase over last year, which continues our path to a multi-year dividend step-up with an increase in our quarterly dividend per share of one cent for the third consecutive year.

David: Combining all of these factors along with the core health and cash generation capacity of our business model, we are forecasting adjusted free cash flow from continuing operations of between $180 million and $190 million in 2024.

David: The $5 million increase at the midpoint is attributed to the free cash flow conversion of the $10 million increase in our Adjusted EBITDA Guidance.

David Hass: This outlook solidifies our commitment to replace the adjusted free cash flow that was tied to the international assets sold and those held for sale in our discontinued operations. This team should be commended for the speed of achieving this score.

David: This outlook solidifies our commitment to replace the adjusted free cash flow that was tied to the international assets sold and those held for sale in our discontinued operations.

David: This team should be commended for the speed of achieving this goal.

David Hass: The following three items have not been included in our 2024 guidance due to the uncertainty in timing with each discrete outcome. First, for the remaining balance of the Business Optimization Program, we remain confident in achieving the $20 million improvement on a 2025 run rate basis. Second, the remaining benefits from the additional tariff refunds outside of the amounts mentioned and received during the quarter due to the uncertain timing of the government refund process.

David Hass: The following three items have not been included in our 2024 guidance due to the uncertainty in timing with each discrete outcome. First, for the remaining balance of the business optimization program, we remain confident in achieving the $20 million improvement on a 2025 run rate basis. Second, the remaining benefits from the additional tariff refunds outside of the amount mentioned and received during the quarter, due to the uncertain timing of the government refund process.

David: The following three items have not been included in our 2024 guidance due to the uncertainty in timing with each discreet outcome. First, for the remaining balance of the Business Optimization Program, we remain confident in achieving the $20 million improvement

David Hass: Third, the sale of discontinued operations, which includes our water business in Israel and our water and coffee business in the United Kingdom. As previously communicated, these businesses will remain in discontinued operations until they are sold. They are actively being marketed, and they have received interest from several parties. Prior to the announcement of the merger with Blue Triton, we had repurchased shares for $6.8 million. On a year-to-date basis, we have repurchased shares for $15.9 million.

David: on a 2025 run rate basis. Second, the remaining benefits from the additional tariff refunds outside of the amounts mentioned and received during the quarter due to the uncertain timing of the government refund process.

David Hass: Justice. Third, the sale of discontinued operations, which includes our Water business in Israel and our Water and Coffee business in the United Kingdom. As previously communicated, these businesses will remain in discontinued operations until they are sold. They are actively being marketed and have received interest from several parties. Prior to the announcement of the merger with Blue Triton, we had repurchased shares of $6.8 million. On a year-to-date basis, we have repurchased shares of $15.9 million. Subsequent to the announcement, we have suspended share repurchases for the interim period until closing.

Robbert Rietbroek: Ultimately, freeing up our associates to focus on the quality aspects of their roles. The team is on track to deliver the previously announced business optimization program that will enhance our productivity and lower our overall cost to serve while continuing to offer customers an exceptional experience. Williams. We remain committed to the annual run rate savings of $20 million by year and 2024, and David will speak to the achievements this quarter and the progress to our full-year goals.

David: third the sale of discontinued operations which includes our water business in israel

David: and our water and coffee business in the United Kingdom. As previously communicated, these businesses will remain in discontinued operations until they are sold. They are actively being marketed and have received interest from several parties.

David: Prior to the announcement of the merger with Blue Triton, we had repurchased shares of 6.8 million dollars. On a year-to-date basis, we have repurchased shares of 15.9 million dollars.

David Hass: Subsequent to the announcement, we have suspended share repurchases for the interim period until closing. We intend, however, to issue a special dividend of approximately $0.82 per common share to Primo Water shareholders following board approval and the setting of the record date and payment date prior to the closing of the merger with Blue Triton. Recently, our board of directors authorized a quarterly dividend of nine cents per common share, a 13% increase over last year, which continues our path to a multi-year dividend step-up with an increase in our quarterly dividend per share of one cent for the third consecutive year.

David: Subsequent to the announcement, we have suspended share repurchases for the interim period until closing. We intend, however, to issue a special dividend of approximately 82 cents per common share to Primo Water shareholders following board approval.

David Hass: We intend, however, to issue a special dividend of approximately 82 cents per common share to Primo Water shareholders following Board approval and setting of the record date and payment date prior to the closing of the merger with Blue Triton. Recently, our Board of Directors authorized a quarterly dividend of $0.9 per common share, a 13% increase over last year, which continues our path to the multi-year dividend step-up with an increase in our quarterly dividend for share of $1.00 for the third consecutive year.

Robbert Rietbroek: From a sustainability perspective, we strive to source and process responsibly to protect the planet we inhabit. We will continue to implement our environmental strategy that is focused on sourcing water responsibly, converting our fleets to more eco-friendly propane, reusing, refilling, and recycling of our plastic bottles, and increasing the use of glass and aluminum as part of our product offering. We carefully monitor our withdrawal rates and we use less and 25% of the permitted withdrawal limits ensuring the long-term viability of our 100 water sources, which include 26 of our own wells and springs.

David: and setting of the record date and payment date prior to the closing of the merger with Blue Triton.

David: Recently, our Board of Directors authorized a quarterly dividend of nine cents per common share.

David: a 13% increase over last year.

David: which continues our path to the multiyear dividend step up

David: with an increase in our quarterly dividend per share of one cent for the third consecutive year.

David Hass: In closing, our improved financial profile and flexibility, along with a compelling long-term growth outlook, are a solid foundation for continued success. We are well positioned for the merger with Blue Triton Brands.

Speaker Change: In closing, our improved financial profile and flexibility, along with a compelling long-term growth outlook, are a solid foundation for continued success. We are well positioned for the merger with Blue Triton Brands. With that, I will turn the call back over to Jon for Q&A.

Robbert Rietbroek: We will detail these results and improvements in our 2023 Sustainability Report, which will be released later this quarter. We have a clear plan to deliver growth and profitability with a favorable balance of volume and pricing. Our unique combination of associates, assets, and resources are capable of delivering strong results that benefit all our stakeholders. We are well positioned for future success.

Jon Kathol: With that, I will turn the call back over to John for Q&A. Thanks, David.

Jon Kathol: Thanks, David. As I mentioned earlier, we will not be taking live questions from analysts or investors during this call due to the proposed merger with Blue Triton. Instead, the most pertinent questions have been selected and will be addressed by Robert and David during today's call. Robert, the first question is for you. You're a few quarters into your role. How do you view this quarter's performance and what were the key takeaways?

Jon Kathol: As I mentioned earlier, we will not be taking live questions from analysts or investors during this call due to the proposed merger with Blue Triton. Instead, the most pertinent questions have been selected and will be addressed by Robert and David during today's call. Robert, the first question is for you. You're a few quarters into your role.

Speaker Change: Thanks, David. As I mentioned earlier, we will not be taking live questions from analysts or investors during this call due to the proposed merger with Blue Triton. Instead, the most pertinent questions have been selected and will be addressed by Robert and David during today's call.

Speaker Change: Robert, the first question is for you. You're a few quarters into your role. How do you view this quarter's performance and what were the key takeaways?

Robbert Rietbroek: How do you view this quarter's performance, and what were the key takeaways? Thanks, John. In this macro-environment and in the broader beverages category, I have encouraged by our balanced and broad-based results, which includes a combination of volume pricing, and strength across each of our water channels. This has enabled us to deliver the 7.6% overall revenue growth, broken down into 3.1% volume and 4.5% price growth. This continues to represent a nice balance that we've experienced over the last few quarters between volume and pricing actions. The majority of revenue growth occurred from organic sources at 6.6% in the quarter, with inorganic contributing 1.0%.

Robbert Rietbroek: Before I turn the call over to David to review our financial results in greater detail and provide our third quarter and full-year 2024 outlook, I would like to once again thank all our primo water associates for their support and contribution to the excellent performance of the business.

Robert Rietbroek: Sean, in this macro environment and in the broader beverages category, I'm encouraged by our balanced and broad-based results, which include a combination of volume, pricing, and strength across each of our water channels. This has enabled us to deliver 7.6% overall revenue growth, broken down into 3.1% volume and 4.5% price growth. This continues to represent a nice balance that we've experienced over the last few quarters between volume and pricing action. The majority of revenue growth occurred from organic sources at 6.6% in the quarter, with inorganic contributing 1.0%.

Robert Rietbroek: Thank you very much, Sean. In this macro environment and in the broader beverages category, I'm encouraged by our balanced and broad-based results, which include a combination of volume, pricing, and strength across each of our water channels. This has enabled us to deliver 7.6% overall revenue growth, broken down into 3.1% volume and 4.5% price growth. This continues to represent a nice balance that we've experienced over the last few quarters between volume and pricing action. The majority of revenue growth occurred from organic sources at 6.6% in the quarter, with inorganic contributing 1.0%.

David: Thanks, John . In this macro environment and in the broader beverages category, I'm encouraged by our balanced and broad-based results.

David: which includes a combination of volume, pricing, and strength across each of our water channels. This continues to represent the nice balance that we've experienced over the last few quarters between volume and pricing action. We continue to deliver on key operating metrics of on time and full customer retention and generating organic sales additions, either through customer ads or location expansion in our retail business. We again delivered sell-through growth of 4% year over year.

David: which includes a combination of volume, pricing, and strength across each of our water channels.

David: this has enabled us to deliver the seven point six percent overall revenue growth broken down into three point one percent volume and four point five price growth

David Hass: With that, I will now turn the call over to David. Thanks Robert.

David Hass: As a reminder, at the end of 2023, we disposed of a significant portion of our international assets, and thus our financial results discussed today are for continuing operations only. We are not covering discontinued operations unless otherwise noted. The second quarter results of our continuing operations included revenue, increasing 7.6% to $485 million, adjusted EBITDA, increasing 15% to $113 million, with adjusted EBITDA margins of 23.3%. All metrics exceeded the high end of our most recent guidance.

David: This continues to represent a nice balance that we've experienced over the last few quarters between volume and pricing actions.

David: The majority of revenue growth occurred from organic sources at 6.6% in the quarter, with inorganic contributing 1.0%.

David Hass: Our associates are very focused on our growth agenda. We continue to deliver our key operating metrics of on time, in full customer retention and generating organic sales divisions, either with customer ads or location expansion in our retail business. While there's always some timing variance is quarter to quarter in dispenser results, we again deliver itself through growth of 4%. Year over year. The expensive self-through remains a key indicator of the connectivity to our water solutions. It also implies contained momentum in future customer ads and increased volume.

Robert Rietbroek: You know, our associates are very focused on our groupages. We continue to deliver on key operating metrics of on time and full customer retention and generating organic sales additions, either with customer ads or location expansion in our retail business. Well, there are always some timing variances quarter to quarter in dispenser results. However, we again delivered sell-through growth of 4% year over year. Dispenser sell-through remains a key indicator of connectivity to our water solution.

Robert Rietbroek: You know, our associates are very focused on our growth agenda. We continue to deliver on key operating metrics of on time and full customer retention and generating organic sales additions, either with customer ads or location expansion in our retail business. Well, there are always some timing variances quarter to quarter in dispenser results. However, we again delivered sell-through growth of 4% year over year. Dispenser sell-through remains a key indicator of connectivity to our water solution.

David: You know, our associates are very focused on our growth agenda.

David: We continue to deliver on key operating metrics of on-time, in-full, customer retention, and generating organic sales additions, either with customer ads or location expansion in our retail business.

Speaker Change: Well, there's always some timing variances quarter to quarter in dispenser results.

David Hass: Within the 7.6% revenue growth, approximately 6.6, or approximately $29.8 million, came from organic growth activity with the balance, 1%, or approximately $4.6 million, coming from inorganic or acquired sources. Primo Water's definition of inorganic contribution includes any acquired businesses that were closed less than 12 months ago. After 12 months, any acquired business becomes part of our normal contribution base. Chris. Separately, the 7.6% revenue growth, irrespective of organic or acquired means, can be split into approximately 3.1% related to volume activity and approximately 4.5% related to pricing activity.

David: we again delivered selfll-through growth of four percent year-over-year the spense sellthrough remains a key indicator of the connectivity to our water solutions and also implies contained momentum in future customer ads and increased volumes

David: Dispenser sell-through remains a key indicator of the connectivity to our water solution. In summary, our strong second quarter results and continued business momentum provide us with the confidence to increase our full year guidance for revenue, adjusted EBITDA, and free cash flow generation.

Robert Rietbroek: It also implies continued momentum in future customer ads and increased volume. We continue to make progress on business efficiencies, and I would ask David to discuss this in more detail. But overall, balancing the success of our must-win priorities and disciplined cost control while driving productivity is leading to our strong results in the quarter. In summary, our strong second quarter results and continued business momentum provide us with the confidence to increase our full year guidance for revenue, adjusted EBITDA, and free cash flow generation.

David: We continue to make progress on business efficiencies.

Speaker Change: and i would ask david to discuss us in more detail but overall balancing the success of our mustestwin priorities and disciplined cost control while driving productivity is leading to our strong results in the quarter

David Hass: In summary, our strong second quarter results and continued business momentum provide us with the confidence to increase our full year guidance for revenue, adjusted EBITDA, and free cash flow generation. David, could you provide a bit more detail on the quarter and keep takeaways notably on your free cash flow? Sure, Jon, thanks. First, I echo Robbert's view on the strength of our second quarter results. Importantly, we outperformed the high end of our Q2 guidance for revenue, adjusted EBITDA, margin, and free cash flow generation. This strong performance enables us to increase our annual revenue guidance between $1.87 billion and $1.89 billion, a $10 million increase raise at the midpoint.

David: in summary our strong second quarter results and continued business momentum providide us with the confidence to increase our full year guidance for revenue adjusted ebitda and free cash flow generation

David Hass: David, could you provide a bit more detail on the quarter and key takeaways, notably on your free cash flow?

David Hass: David, could you provide a bit more detail on the quarter and key takeaways, notably on your pre-cash flow?

David: David, could you provide a bit more detail on the quarter and key takeaways, notably on your free cash flow?

David Hass: Sure, John. Thanks. You know, first, I echo Robert's view on the strength of our second quarter results. Importantly, we outperformed the high end of our Q2 guidance for revenue, adjusted EBITDA, margin, and free cash flow generation. This strong performance enables us to increase our annual revenue guidance to be between $1.87 billion and $1.89 billion, a $10 million increase at the midpoint. This now implies a 6% revenue growth rate versus fiscal 2023.

David Hass: Volume contribution, in this case comes from both new customer additions or additional gallons consumed from existing customers or additional retail traffic in our exchange or refill businesses where actual customer counts are not directly known. Volume activity in the corner was strong across all of our water solutions, indicating strengths in our bulk oriented offering as well as the complimentary nature of our different water channels. We believe that volume across our water solutions will continue to be a primary indicator of business health versus overall customer counts.

David: Sure John , thanks. You know, first I echo Robert's view on the strength of our second quarter results.

David: importantly we outperformed the high end of our q two guidance for revenue adjusted ebitda margin and free cash flow generation this strong performance enables us

David: to increase our annual revenue guidance to be between $1.87 billion and $1.89 billion. You know, a $10 million increase raise at the midpoint. This now implies a 6% revenue growth rate versus fiscal 2023.

David Hass: This now implies a 6% revenue growth rate versus Fiscal 2023. We knew heading into 2024 that we had strong momentum from our fourth quarter results. And our strong first half start to fiscal 2024 confirms that that momentum is continuing. Gross margins for the quarter increased 110 basis points to 65.6%. With improvements driven by volume leverage through our operations, as well as our business optimization efforts taking effect. Similarly, adjusted EBITDA increased 14.9% to $113 million year-over-year. This is nearly double the revenue growth rate. Adjusted EBITDA margins increased to 23.3%, up 150 basis points year-over-year. Our improved operating performance enables us to increase our annual adjusted EBITDA guidance by $10 million to between $420 and $440 million.

David Hass: We knew heading into 2024 that we had strong momentum from our fourth-quarter results, and our strong first half start to fiscal 2024 confirms that momentum is continuing. Gross margin for the quarter increased 110 basis points to 65.6%, with improvements driven by volume leverage through our operations, as well as our business optimization efforts taking effect. Similarly, adjusted EBITDA increased 14.9% to $113 million year-over-year. This is nearly double the revenue growth rate.

David: We knew heading into 2024 that we had strong momentum from our fourth-quarter results, and our strong first-half start to fiscal 2024 confirms that that momentum is continuing.

David Hass: Once again, we have expanded our channel disclosure to break out the price and volume splits for each of the channels versus prior year. A table of the results is included with our supplemental earnings deck. You will notice that volume gains occurred across each of the water channels and price improved except for the welcome price decline in water dispensers. Within our channels, we had strong revenue growth of 7% in water directing and exchange and a 12% increase in our water refill and filtration channel.

David: gross margin forthe quarter increased one hundred and ten basis points to sixty five point six percent with improvements driven by volume leverage through our operations as well as our business optimization efforts taking effect

David: with improvements driven by volume leverage through our operations, as well as our business optimization efforts taking effect. The midpoint of $430 million implies adjusted EBITDA growth of nearly $50 million over last year, an improvement of nearly 13%. This is more than double our revenue growth rate, illustrating the operating leverage in our model. The midpoint of our revised revenue and adjusted EBITDA guidance implies full-year margins of 22.9%.

David: Similarly, adjusted EBITDA increased 14.9% to $113 million year-over-year. This is nearly double the revenue growth rate.

David Hass: Justin EBITOM margins increased to 23.3%, up 150 basis points year over year. Our improved operating performance enables us to increase our annual adjusted EBITDA guidance by $10 million to between $420 and $440 million. The midpoint of $430 million implies adjusted EBITDA growth of nearly $50 million over last year, an improvement of nearly 13%. This is more than double our revenue growth rate, illustrating the operating leverage in our model. The midpoint of our revised revenue and adjusted EBITDA guidance implies full-year margins of 22.9%.

David Hass: Just the EBITDA margins increased to 23.3%, up 150 basis points year over year. Our improved operating performance enables us to increase our annual adjusted EBITDA guidance by $10 million to between $420 and $440 million. The midpoint of $430 million implies adjusted EBITDA growth of nearly $50 million over last year, an improvement of nearly 13%. This is more than double our revenue growth rate, illustrating the operating leverage in our model. The midpoint of our revised revenue and adjusted EBITDA guidance implies full-year margins of 22.9%.

David: Adjusted EBITDA margins increased to 23.3%, up 150 basis points year-over-year. Our improved operating performance enables us to increase our annual adjusted EBITDA guidance by $10 million to between $420 and $440 million.

David Hass: The other water channel, which is primarily the retail and on-premise portion of mountain valley premium spring water, was up 87%. The water dispenser business representing the sell-in of our units to the retailer declined 21% driven by a decline of 16% from volume and expected lower wholesale prices as the tariff elimination works through our pricing architecture. On the heels of a very strong first quarter, through the first half of 2024, the water dispenser business is up 2% driven by volume of approximately 15% and offset by pricing of negative 13%.

David Hass: The midpoint of $430 million implies adjusted EBITDA growth of nearly $50 million over last year, an improvement of nearly 13%. This is more than double our revenue growth rate, illustrating the operating leverage in our model. The midpoint of our revised revenue and adjusted EBITDA guidance implies full-year margins of 22.9%. 140 basis point improvement versus 2023. When I step back, I'm particularly pleased with our focus on improving free cash flow as a conversion of our EBITDA. Year to date, we have generated $102 million in adjusted free cash flow, which is a $73 million increase versus the same period last year.

David: The midpoint of $430 million implies adjusted EBITDA growth of nearly $50 million over last year, an improvement of nearly 13%. This is more than double our revenue growth rate, illustrating the operating leverage in our model.

David: The midpoint of our revised revenue and adjusted EBITDA guidance implies full year margins of 22.9%, a 140 basis point improvement versus 2023.

David Hass: 140 basis point improvement versus 2023. When I step back, I'm particularly pleased with our focus on improving free cash flow as a conversion of our EBITDA. Year to date, we have generated $102 million in adjusted free cash flow, which is a $73 million increase versus the same period last year. (Inaudible) While we expect continued positive free cash flow during the second half of 2024, as you may recall, we posted outsized adjusted free cash flow during the third quarter of 2023.

David Hass: 140 basis point improvement versus 2023. When I step back, I'm particularly pleased with our focus on improving free cash flow as a conversion of our EBITDA. Year to date, we have generated $102 million in adjusted free cash flow, which is a $73 million increase versus the same period last year. While we expect continued positive free cash flow during the second half of 2024, as you may recall, we posted outsized adjusted free cash flow during the third quarter of 2023.

David: When I step back, I'm particularly pleased with our focus on improving free cash flow as a conversion of our EBITDA. Year-to-date, we have generated $102 million in adjusted free cash flow, which is a $73 million increase versus the same period last year.

David Hass: The other channel decline is reflective of our remaining non-core office coffee services which is not a point of emphasis in our current model. Water dispenser sell through or those items sold from the retailer to the end customer was approximately 260,000 units in the quarter of approximately 4%. As a reminder, our business model includes two approaches of selling the water dispenser. The rental of the water dispenser to residential and commercial customers in our water direct business and the sale of water dispensers through our retail partners and online.

David Hass: While we expect continued positive free cash flow during the second half of 2024, as you may recall, we posted outside adjusted free cash flow during the third quarter of 2023. This was largely due to working capital enhancements and better inventory management that we continue to benefit from today. As we lap these gains in the second half of 2024, we expect a more measured outcome relative to the gains in the second quarter. Our broad-based earning strength allows us to raise our annual guidance on adjusted free cash flow by 5 million dollars to between 180 million to 190 million dollars, which is based on a strong conversion of our 10 million dollar increase in our adjusted EBITDA guides.

David: While we expect continued positive free cash flow during the second half of 2024, as you may recall, we posted outsized adjusted free cash flow during the third quarter of 2023.

David Hass: This was largely due to working capital enhancements and better inventory management that we continue to benefit from today. As we lap these gains in the second half of 2024, we expect a more measured outcome relative to the gains in the second quarter. Our broad-based earning strength allows us to raise our annual guidance on adjusted free cash flow by $5 million to between $180 million and $190 million, which is based on a strong conversion of our $10 million increase in our adjusted EBITDA guidance.

Speaker Change: This was largely due to working capital enhancements and better inventory management that we continue to benefit from today. As we lap these gains in the second half of 2024, we expect a more measured outcome relative to the gains in the second quarter.

David: Our broad-based earning strength allows us to raise our annual guidance on adjusted free cash flow by $5 million to between $180 million to $190 million, which is based on a strong conversion of our $10 million increase in our adjusted EBITDA guidance.

David Hass: Both approaches enable growth in water solutions and contribute to our predictable and recurring revenue growth. We have been particularly focused on growth with our brick and mortar retail partners where we have greater visibility into the connectivity to our water solutions and higher connectivity compared to e-commerce channels. As discussed in previous calls, our water dispenser category was previously under a 25% import tariff but was reclassified last year and a refund process from the US government was initiated.

David Hass: Overall, I am pleased to confirm that we have fully replaced the adjusted free cash flow of last year's results, which included the benefit of both our international operations, which we subsequently divested. This validates our decision to divest those assets for 575 million dollars in gross proceeds, focusing on the North America market to improve our efficiencies, lower our net leverage, and significantly improve our free cash flow conversion.

David Hass: Overall, I am pleased to confirm that we have fully replaced the adjusted free cash flow of last year's results, which included the benefit of both our international operations, which we subsequently divested. This validates our decision and vision to divest those assets for $575 million in gross proceeds, focusing on the North America market to improve our efficiencies, lower our net leverage, and significantly improve our free cash flow conversion. Our balance sheet remains healthy, with low net leverage of approximately 1.6 times and more than $600 million in cash and an undrawn revolving credit facility.

David: Overall, I am pleased to confirm that we have fully replaced the adjusted free cash flow of last year's results, which included the benefit of both our international operations, which we subsequently divested. This validates our decision.

David: decision to divest those assets for 575 million dollars in gross proceeds.

David Hass: When we received funds, we record them in the same manner as the original transactions. During Q2, we did not receive any refunds reflecting the inconsistent nature of the government refund process. When including last year's payments, cumulatively through the second quarter of 2024, we have received approximately $10.8 million. We remain confident that refunds will be received but we cannot predict the timing of receipt. As we look further into the operational metrics and as Robert mentioned earlier, our commitment to improving the customer experience continues to result in improved on-time info or OTIF rates.

David: focusing on the North America market to improve our efficiencies.

David Hass: Our balance sheet remains healthy with low net leverage of approximately 1.6 times, and more than 600 million dollars in cash and an undrawn revolving credit facility.

David: lower our net leverage and significantly improve our free cash flow conversion. Our balance sheet remains healthy with low net leverage of approximately 1.6 times and more than $600 million in cash and an undrawn revolving credit facility.

Robbert Rietbroek: Thanks, David. Robert, can you talk about any product lines, customer segments, or geographic regions that contributed to the increased sales? Sure, Jon. Well, it was broad-based and balanced. We saw growth in all water channels. I think it's important to note that our overall revenue growth was over 9% when you exclude the other channel from our results. The channel we refer to as other is primarily our non-core office coffee service, and some co-packing business, which has been declining as we deemphasize and deprioritize these businesses. Our customer base actually remains very balanced with a mix that is 50% residential and 50% commercial.

Operator: Thanks, David. Robert, can you talk about any product lines, customer segments, or geographic regions that contributed to the increased sales?

Jon Kathol: Thanks, David. Robert, can you talk about any product lines, customer segments, or geographic regions that contributed to the increased sales?

Operator: Thanks David. Robert, can you talk about any product lines, customer segments, or geographic regions that contributed to the increased sales?

Robert Rietbroek: Well, it was broad-based and balanced. We saw growth in all water channels. I think it's important to note that our overall revenue growth was over 9% when you exclude the other channel from our results. The channel we refer to as OTHER is primarily our non-core office coffee service and some co-packing business, which has been declining as we de-emphasize and de-prioritize these businesses.

Robert Rietbroek: Well, it was broad-based and balanced. We saw growth in the All-Water Channel. I think it's important to note that our overall revenue growth was over 9% when you exclude the other channel from our results. The channel we refer to as OTHER is primarily our non-core office coffee service and some co-packing business, which has been declining as we de-emphasize and de-prioritize these businesses.

Robert: Sure, John . Well, it was broad-based and balanced. We saw growth in all water channels. I think it's important to note that our overall revenue growth was over 9% when you exclude the other channel from our results.

David Hass: The ability to serve our customers in the most efficient manner possible is a critical driver of both our short and long-term profitability and our automated route optimization or ARO tool continues to yield efficiencies. In the US, units per route per day increased approximately 2% compared to Q2 of 2023 and revenue per route increased more than 5% compared to Q2 of 2023. Our scale and leverage continued to improve as we service more customers with higher volume per route. Additionally, water direct customer attention increased to approximately 86% and increased versus the end of last year and the second quarter of 2023.

Speaker Change: The channel we refer to as OTHER is primarily our non-core office coffee service.

Speaker Change: and some co-packing business which has been declining as we de-emphasize and de-prioritize these businesses.

Robert Rietbroek: You know, our customer base actually remains very balanced with a mix that is 50% residential and 50% commercial. Our customer base saw growth in the quarter. We didn't see any geographical anomalies in our growth.

Robert: You know, our customer base actually remains very balanced with mix that is 50% residential and 50% commercial.

Robbert Rietbroek: Customer bases saw growth in the quarter. We didn't see any geographical anomalies in our growth. It really is balanced across North America. Our dispenser business saw a quarterly decline, but remains up 15% year-to-date on the volume of dispensers sold into the retailers due to order timing variance. The dispenser sell through is about 4% and is the true indicator of the health of the business. We're excited about the improved consumer value of our dispensers as a result of the tariffs rolling off and prices reducing. This should drive incremental consumers to the category, which is a good sign for the growth of future water customers.

Robert: Customer basis saw growth in the quarter. We didn't see any geographical anomalies in our growth. It really is balanced across North America.

Robert Rietbroek: It really is balanced across North America. Our dispenser business showed a quarterly decline but remains up 15% year-to-date on the volume of dispensers sold into retailers due to order timing variants. The dispenser sell-through was up 4% and is a true indicator of the health of the business. We're excited about the improved consumer value of our dispensers as a result of the tariffs rolling off and prices reducing. This should drive incremental consumers to the category, which is a good sign for the growth of future water customers.

Robert: Our dispenser business showed a quarterly decline, but remains up 15% year-to-date on the volume of dispensers sold into the retailers due to order timing variants. The dispenser sell-through is up 4% and is a true indicator of the health of the business.

Robert: We're excited about the improved consumer value of our dispensers as a result of the tariffs rolling off and prices reducing. Within our Otter Water Channel, it was up 87% this quarter after growing 57% last quarter. It continues to attract more consumers and fulfills a super-premium niche with its glass and now aluminum bottle offers.

David Hass: Shifting to our balance sheet and cash flows are net leverage ratio at the end of the second quarter on a trailing 12 month basis stood at approximately 1.6 times our adjusted EBITDA, a 50 basis point improvement from year end 2023. Similarly, our liquidity remains strong with approximately $603 million of cash on the balance sheet, approximately $615.5 million when considering the cash within our discontinued operations and a fully unused cash flow revolver.

Robert: We're excited about the improved consumer value of our dispensers as a result of the tariffs rolling off and prices reducing.

Robert: This should drive incremental consumers to the category, which is a good sign for the growth of future water customers.

Robbert Rietbroek: The one product and brand that continues to really stand out is Mountain Valley Spring Water, sold at retail and on-premise. Within our other water channel, it was up 87% this quarter after growing 57% last quarter. Continued success in the larger format versions of Mountain Valley also contributed to growth within our water direct channel. It continues to attract more consumers and fulfills a super premium niche with its class and now aluminum bottle offering. We've expanded our capacity over the last year, and we're still racing to catch up with consumer and customer demand. It's natural alkalinity and crisp taste make it a huge hit with consumers.

Robert Rietbroek: The one product and brand that continues to really stand out is Mountain Valley Springwater, sold at retail and on-premises. Within our Otter Water Channel, it was up 87% this quarter after growing 57% last quarter. Continued success in the larger format versions of Mountain Valley also contributes to growth within our WaterDirect channel.

Robert Rietbroek: The one product and brand that continues to really stand out is Mountain Valley Springwater, sold at retail and on-premise. Within our Otter Water Channel, it was up 87% this quarter after growing 57% last quarter. Continued success in the larger format versions of Mountain Valley also contributes to growth within our Water Direct channel.

Robert: the one product and brand that continues to really stand out is mountain valley springwater so that retail and on-premise

Robert: Within our honor water channel, it was up 87% this quarter after growing 57% last quarter.

Robert: Continued success in the larger format versions of Mountain Valley also contributes to growth within our water direct channel.

David Hass: Specific to our cash flow revolver, we recently extended the maturity of our revolver to September 2026, which will allow us time to establish the proper capital support financing for Newco once the merger is completed. In the quarter, we paid approximately $21.4 million of interest net of interest income. On a full year basis, while we will be a net interest expense payer, we are quite pleased with both the low interest rate carried on our senior notes and our ability to generate interest income in today's yield environment.

Robert Rietbroek: It continues to attract more consumers and fulfills a super premium niche with its glass and now aluminum bottle offering. We've expanded our capacity over the last year, and we're still racing to catch up with consumer and customer demand. Its natural alkalinity and crisp taste make it a huge hit with consumers.

Robert Rietbroek: It continues to attract more consumers and fulfills a super-premium niche with its glass and now aluminum bottle offers. We've expanded our capacity over the last year, and we're still racing to catch up with consumer and customer demand. Its natural alkalinity and crisp taste make it a huge hit with consumers.

Robert: It continues to attract more consumers and fulfills a super-premium niche with its glass and now aluminum bottle offering.

Robert: We've expanded our capacity over the last year and we're still racing to catch up with consumer and customer demand.

Robert: Its natural alkalinity and crisp taste make it a huge hit with consumers. We're enabling this 150-year-old brand to reach its full potential by driving household penetration and retail and on-premise distribution.

Robbert Rietbroek: We're enabling this 150-year-old brand to reach its full potential by driving household penetration and retail and on-premise distribution.

Robert Rietbroek: We're enabling this 150-year-old brand to reach its full potential by driving household penetration and retail and on-premise distribution. Now, overall, I think our improved service levels are driving increased volume, retention, and even sentiment scores are 94% on time at full rates or an improvement over previous periods, which drives increased revenue, improves customer satisfaction, and provides a more favorable opinion of our company. By ensuring our customers get their deliveries when expected, consistently finding our products on the retailer's shelves, or finding our machines working and ready to dispense water, we fulfill their demand for high-quality drinking water. Specific actions taken to improve our service metrics include six- and seven-day deliveries when necessary, filling empty shelf space, and improving refill machine uptime. We're doing better, but I see room to improve even further.

Robbert Rietbroek: Now overall, I think our improved service levels are driving increased volume, retention, and even sentiment scores are 94% on time in full rates or improvement over previous periods, which drives increased revenue, improves customer satisfaction, and provides a more favorable opinion of our company. By ensuring our customers get their deliveries when expected, consistently finding our products on the retailer shelves, or finding our machines working and ready to dispense water, we fulfill their demand for high quality drinking water. Specific actions taken to improve our service metrics include six and seven day deliveries when necessary, filling empty shelf space, and improving refill machine uptime.

David Hass: During the second quarter, we completed the sale of AMIA foods, our UK food and drink business, for $75.5 million, approximately $91 million when including dividends extracted from the business. After the close of Q2, we successfully completed the sale of our Portugal business for $19.2 million. Rietbroek. Rietbroek was primarily driven by increased earnings, reduced net interest expense, and improved working capital, offset by increased levels of capital expenditures, and higher cash taxes due to fewer NOLs as we shift to a net taxpayer relative to prior years.

Robert: Now overall, I think our improved service levels are driving increased volume, retention, and even sentiment scores.

Robert: Our 94% on time in full rates are an improvement over previous periods, which drives increased revenue, improves customer satisfaction, and provides a more favorable opinion of our company.

Robert: By ensuring our customers get their deliveries when expected, consistently finding our products on the retailer's shelves, or finding our machines working and ready to dispense water, we fulfill their demand for high-quality drinking water.

Robert: Specific actions taken to improve our service metrics include six and seven day deliveries when necessary, filling empty shelf space and improving refill machine uptime. We're doing better but I see room to improve even further.

Robbert Rietbroek: We're doing better, but I see room to improve even further.

David Hass: Thanks, Robert. David, can you give us an update on the sale of your international businesses and any M&A activity? Absolutely.

Jon Kathol: Thanks, Robert. David, can you give us an update on the sale of your international businesses and any M&A activity?

David: Thanks, Robert. David, can you give us an update on the sale of your international businesses and any M&A activity?

David Hass: Absolutely. As we mentioned on our deal announcement call several weeks ago... We sold the UK-based AMIA Foods business in June. This was for roughly $91 million in proceeds when you include dividends pulled from the business, and last month, which happened after our close of Q2, we sold the Portugal business for approximately $19.2 million. Both divestitures added to our already strong cash position, which is now over $600 million. We remain actively marketing the remaining assets in both Israel and the Eden UK business and remain on track to divest these businesses later this year.

Robert: Absolutely. As we mentioned on our deal announcement call several weeks ago... Both divestitures added to our already strong cash position, which is now over $600 million.

David Hass: Absolutely. As we mentioned on our deal announcement call several weeks ago, we sold the UK-based AMIA Foods business in June. This was for roughly $91 million in proceeds when you include dividends pulled from the business. And last month, which happened after our, you know, close of Q2, we sold the Portugal business for approximately $19.2 million. Both divestitures added to our already strong cash position, which is now over $600 million. We remain actively marketing the remaining assets in both Israel and the Eden UK business and remain on track to divest these businesses later this year.

David Hass: As we mentioned on our deal announcement call several weeks back, we sold the UK-based Ania Foods business in June. This was for roughly $91 million in proceeds when you include dividends pulled from the business. And last month, which happened after our close of Q2, we sold the Portugal business for approximately $19.2 million. Both the vestitures added to our already strong cash position, which is now over $600 million.

Robert: Absolutely. As we mentioned on our deal announcement call several weeks back, we sold the UK-based AMIA Foods business in June .

David Hass: As a reminder, our increase in year-over-year adjusted free cash flow is different than how that growth contributes to our full year 2024 guidance which we'll discuss in a few minutes. We are incredibly pleased with the free cash flow momentum on a year-over-year basis. The results for the second quarter reflect a series of receivables improvements and improved inventory levels that began in the second half of last year and are still driving benefit today.

Speaker Change: This was for roughly 91 million dollars in proceeds when you include dividends pulled from the business.

Robert: And last month, which happened after our, you know, close of Q2, we sold the Portugal business for approximately $19.2 million.

Robert: Both divestitures added to our already strong cash position which is now over 600 million dollars. We remain actively marketing the remaining assets in both Israel and the Eden UK business and remain on track to divest these businesses later this year.

David Hass: We remain actively marketing the remaining assets in both Israel and the Eden UK business, and remain on track to invest in these businesses later this year.

Robbert Rietbroek: Robert, you mentioned last quarter that your annual revenue guidance of a 5.5% increase included 1.5% to 2% volume, and the balance was price. Now you've increased your annual revenue guidance to 6%. Is the increase driven by volume or price? Yeah, the increase in our fiscal 2024 revenue guidance is driven by incremental volume growth that we've been experiencing. Our volume growth has been strong and resilient year to date, which provides confidence in our updated revenue guidance. The revised guidance can be broken out into 3% volume growth and 3% pricing growth this year.

Robert Rietbroek: Robert, you mentioned last quarter that your annual revenue guidance of a 5.5% increase included 1.5% to 2% volume, and the balance was price. Now you've increased your annual revenue guidance to six percent. Is the increase driven by volume or price?

Robert: Robert, you mentioned last quarter that your annual revenue guidance of a 5.5% increase included 1.5% to 2% volume and the balance was price. Now you've increased your annual revenue guidance to 6%. Is the increase driven by volume or price?

Robert Rietbroek: Yeah, the increase in our fiscal 2024 revenue guidance is driven by the incremental volume growth that we've been experiencing. Our volume growth has been strong and resilient year to date, which provides confidence in our updated revenue guidance. The revised guidance can be broken out into 3% volume growth and 3% pricing growth.

Robert Rietbroek: Yeah, the increase in our fiscal 2024 revenue guidance is driven by incremental volume growth that we've been experiencing. Volume growth has been strong and resilient year-to-date, which provides confidence in our updated revenue guidance. The revised guidance can be broken out into 3% volume growth and 3% pricing growth.

Speaker Change: Yeah, the increase in our fiscal 2024 revenue guidance is driven by incremental volume growth that we've been experiencing.

Speaker Change: Our volume growth has been strong and resilient year-to-date, which provides confidence in our updated revenue guidance. The revised guidance can be broken out into 3% volume growth and 3% pricing growth this year.

Robert: This provides confidence in our updated revenue guidance.

David Hass: Once again, as I transition into our 2024 outlook, any forward guidance will strictly be for continuing operations. Discontinued operations will not be covered. To help bridge our 2024 guidance, a table of 2023 financial results for continuing operations by quarter has been provided in the appendix of our supplemental earnings slides. We are forecasting third quarter revenue guidance to be between $485 million and $495 million. We expect Q3 adjusted EBITDA to be between $115 million and $125 million, with an implied adjusted EBITDA margin of 24.5% at the midpoint.

Jon Kathol: Now let's transition the discussion to talk about the aspects of the merger with Blue Triton. Robert, I'll start with you. It's been several weeks since the announcement. Can you provide some color on the feedback you receive from investors and further views on the announced merger with Blue Triton? Sure, I'm excited to talk about it. The term that keeps coming up is compelling. We're hearing that it's a natural fifth and makes sense from a customer, consumer, associate, supplier, and investor perspective. It diversifies the product offering of both Prima Water and Blue Triton into more channels and categories, where we can offer the consumer an incredible array of branded offerings, purified spring and super premium spring water, and various fact-forms. Davis.

Jon Kathol: Now, let's transition the discussion to talk about the aspects of the merger with Blue Triton. Robert, I'll start with you. It's been several weeks since the announcement. Can you provide some color on the feedback you've received from investors and further views on the announced merger with Blue Triton?

Speaker Change: Now let's transition the discussion to talk about the aspects of the merger with Blue Triton. Robbert, I'll start with you. It's been several weeks since the announcement. Can you provide some color on the feedback you've received from investors and further views on the announced merger with Blue Triton?

Robert Rietbroek: Sure, I'm excited to talk about it. The term that keeps coming up is compelling.

Robert: Sure, I'm excited to talk about it. The term that keeps coming up is compelling.

Robert Rietbroek: Sure, I'm excited to talk about it. The term that keeps coming up is compelling.

Robert: Sure, I'm excited to talk about it. The term that keeps coming up is compelling. We're hearing that it's a natural fit and makes sense from a customer, consumer, associate, supplier, and investor perspective.

Robert Rietbroek: We're hearing that it's a natural fit and makes sense from a customer, consumer, associate, supplier, and investor perspective. It diversifies the product offering of both Primo Water and Blue Triton into more channels and categories where we can offer the consumer an incredible array of branded offerings, purified, spring, and super premium spring water in various packed formats. We've received great feedback from investor calls and interactions with our research analysts. We're hearing positive reactions to the proposed combination on the merits and the potential benefits that come from the expected synergy.

Robert: We're hearing that it's a natural fit and makes sense from a customer, consumer, associate, supplier, and investor perspective. While we're not in a position to comment on the financial outlook of the new company at this stage, we're excited to be creating a pure play health hydration company with a portfolio of well-known brands covering the spectrum from purified to spring and value to premium. The Combined Company will be a steward of its water resources as a sustainability leader. You know, Jon, healthy hydration is on trend, and access to high-quality drinking water sources is increasingly important. That means there will be more demand for our products in the future.

Speaker Change: it diversifies the product to offering of both preimo water and who tries into more channels and categories where we can offer the consumer an incredible array of branded offerings purified spring and superpremium spring water in various fact formats

David Hass: The 24.5% adjusted EBITDA margin represents a 70 basis point improvement from the year-go period. For the full year 2020 forecast of continuing operations, we are increasing our revenue projection to be between $1.87 billion and $1.89 billion with revenue growth at the midpoint of 6.1%. Similarly, we are increasing our full year 2024 adjusted EBITDA to be between $420 million and $440 million with an implied adjusted EBITDA margin of 22.9% at the midpoint.

Robbert Rietbroek: We've received great feedback from investor calls and interactions with our research analysts. We're hearing positive reactions to the proposed combination on the merits and the potential benefits that come from the expected synergies.

Jon Kathol: We've received great feedback from investor calls and interactions with our research analysts.

Speaker Change: We're hearing positive reactions to the proposed combination on the merits and the potential benefits that come from the expected synergies.

David Hass: While we're not in the position to comment on the financial outlook of the new company at this stage, we're excited to be creating a pure play, health, hydration company with a portfolio of well-known brands covering the spectrum from purified to spring and value to premium. The combined company will be a steward of its water resources as a sustainability leader. From our production and distribution footprint to our ability as a combined company to elevate the customer experience, we're excited to provide a diverse array of water solutions for the residential, the commercial, and the retail customers. Jon, healthy hydration is on trend, and access to high-quality drinking water sources is increasingly important.

Robert Rietbroek: While we're not in the positions to comment on the financial outlook of the new company at this stage, we're excited to be creating a pure play health hydration company with a portfolio of well-known brands covering the spectrum from purifying to spring and value to premium. The Combined Company will be a steward of its water resources as a sustainability leader. From our production and distribution footprint to our ability as a combined company to elevate the customer experience, we're excited to provide a diverse array of water solutions for residential, commercial, and retail customers.

Robert Rietbroek: While we're not in a position to comment on the financial outlook of the new company at this stage, we're excited to be creating a pure play health hydration company with a portfolio of well-known brands covering the spectrum from purified to spring and value to premium. The Combined Company will be a steward of its water resources as a sustainability leader. From a production and distribution footprint to our ability as a combined company to elevate the customer experience, we're excited to provide a diverse array of water solutions for residential, commercial, and retail customers.

Robert: While we're not in a position to comment on the financial outlook of the new company at this stage, we're excited to be creating a pure play health hydration company with a portfolio of well-known brands covering the spectrum from purified to spring and value to premium.

David Hass: The increase in guidance contemplates both the benefit from the strong start in the first half of the year, as well as some balance of your benefit from our business optimization program. During Q1, we discussed cost reduction activities of approximately $2 million. And during Q2, we took action on another $2 million, bringing the total to $4 million that will be achieved within 2024. This is reflected in our adjusted EBITDA guidance increase. These savings will annualize out to approximately $8 million on a 2025 run rate basis toward our $20 million goal.

Robert: The combined company will be a steward of its water resources as a sustainability leader.

Speaker Change: from our production and distribution footprintts to our ability as a combined company to elevate the customer experience we're excited to provide a diverse array of water solutions for the residential commercial and the retail customers

Robert Rietbroek: You know, Jon, healthy hydration is on trend, and access to high-quality drinking water sources is increasingly important. That means more demand for our products in the future, and our product offering will give consumers another choice for hydration across multiple occasions, day parts, delivery methods, and formats.

Robert: You know, Jon, healthy hydration is on trend and access to high-quality drinking water sources is increasingly important. That means more demand for our products in the future.

Robbert Rietbroek: That means more demand for our products in the future. Our product offerings give consumers another choice for hydration across multiple occasions, day parts, delivery methods, and formats.

Speaker Change: Our product offerings give consumers another choice for hydration, across multiple occasions, day parts, delivery methods, and formats.

David Hass: We are maintaining the forecast of the 2024 CAPEX guidance of approximately 7% of our revenue guidance range plus an incremental $22.5 million of strategic CAPEX. Full year 2024 cash taxes are expected to be approximately $35 million to $45 million, a $5 million increase at the midpoint driven by an $18 million increase in the midpoint of adjusted EBITDA since our initial guidance on February 22. The cash tax guidance includes utilization of US net operating losses or NOLs of which we have approximately $46 million available for use in 2024.

David Hass: David, can you bring us up to speed on the mechanics of the merger? Sure. Since announcing the deal on June 17th, both teams are working on the regulatory and pre-moved shareholder approval processes. At Primal Water, we created a page on the Investor Relations section of our corporate website dedicated to the proposed merger, which contains documents, filings, presentations, and updates, and will continue to provide updates through that mean. We submitted our heart Scott Radino filing on July 2nd, and our Canadian filing on July 9th. We are actively working to obtain our required approvals as promptly as possible.

David Hass: David, can you bring us up to speed on the mechanics of the merger?

Jon Kathol: David, can you bring us up to speed on the mechanics of the merger?

David Hass: Sure, since announcing the deal on June 17th... Both teams are working on the regulatory and Primo shareholder approval processes. At Primo Water, we created a page on the investor relations section of our corporate website dedicated to the proposed merger, which contains documents, filings, presentations, and updates. And we'll continue to provide updates through that means.

Robert: yeah

Jon Kathol: Sure. Since announcing the deal on June 17th, both teams are working on the regulatory and Primo shareholder approval processes.

Robert: Both teams are working on the regulatory and Primo shareholder approval processes. We intend to hold our shareholder meeting as soon as possible once we clear SEC comments and the proxy statement is finalized.

Robert: At Primo Water, we created a page on the investor relations section of our corporate website dedicated to the proposed merger, which contains documents, filings, presentations, and updates, and we'll continue to provide updates through that mean.

David Hass: We submitted our Hart-Scott-Rodino filing on July 2nd and our Canadian filing on July 9th. We are actively working to obtain our required approvals as promptly as possible. To support that, a preliminary proxy statement has been filed with the SEC, which among other things includes information regarding Blue Triton's historical financial performance and pro forma financial information regarding the combined company. The proxy statement is in preliminary form and subject to review and comment by the SEC.

David Hass: We submitted our heart, Scott Radino, filing on July 2nd and our Canadian filing on July 9th. We are actively working to obtain our required approvals as promptly as possible. To support that, a preliminary proxy statement has been filed with the SEC, which, among other things, includes information regarding Blue Triton's historical financial performance and pro forma financial information regarding the combined company. The proxy statement is in preliminary form and subject to review and comment by the SEC.

Speaker Change: We submitted our Hart-Scott-Rodino filing on July 2nd and our Canadian filing on July 9th. We are actively working to obtain our required approvals as promptly as possible.

David Hass: To support that, a preliminary proxy statement has been filed with the SEC, which, among other things, includes information regarding Blue Triton's historical financial performance and pro forma financial information regarding the combined company. The proxy statement is in preliminary form and subject to review and comment by the SEC. Revisions to the proxy statement before it is finalized may be material. We intend to hold our shareholder meeting as soon as practical once we clear SEC comments and the proxy statement is finalized. We are happy with how things have been progressing, and we'll keep you updated along the way.

Robert: To support that, a preliminary proxy statement has been filed with the SEC, which, among other things, includes information regarding Blue Triton's historical financial performance and pro forma financial information regarding the combined company.

Robert: The proxy statement is in preliminary form and subject to review and comment by the SEC. Revisions to the proxy statement before it is finalized may be immaterial. We intend to hold our shareholder meeting as soon as practical once we clear SEC comments and the proxy statement is finalized.

David Hass: Revisions to the proxy statement before it is finalized may be material. We intend to hold our shareholder meeting as soon as possible once we clear SEC comments and the proxy statement is finalized. We are happy with how things have been progressing, and we'll keep you updated along the way.

David Hass: Revisions to the proxy statement before it is finalized may be immaterial. We intend to hold our shareholder meeting as soon as possible once we clear SEC comments and the proxy statement is finalized. We are happy with how things have been progressing, and we'll keep you updated along the way.

Jon Kathol: We are happy with how things have been progressing and, you know, we'll keep you updated along the way.

Robbert Rietbroek: Robert, can you share some insights on Blue Triton's financial performance? Well, the preliminary proxy statements that was filed with the SEC earlier this morning and that is available on the Investor Relations section of our website includes, amongst other things, information regarding Blue Triton's financial performance during the second quarter. Whether from the results in the proxy filing or when we look at the Q2 retail scan data, which shows growth in sales dollars and strong volume, we can see that blue track and that business perform well.

Robert Rietbroek: Robert, can you share some insights on Blue Triton's financial performance?

Robert: Robert, can you share some insights on Blue Triton's financial performance?

David Hass: Additionally, we will take steps to maximize the interest income yield throughout 2024, but could experience reduced income opportunities if market available rates decline related to any macro fed or bank rate environment decisions. Combining all of these factors along with the core health and cash generation capacity of our business model, we are forecasting adjusted pre cash flow from continuing operations of between $180 million and $120 million in 2024. The $5 million increase at the midpoint is attributed to the free cash flow conversion of the $10 million increase in our adjusted EBITDA guidance.

Operator: Well, the preliminary proxy statement that was filed with the SEC earlier this morning and that is available on the investor relations section of our website includes, amongst other things, information regarding Blue Trident's financial performance during the second quarter. Whether from the results in the proxy filing or when we look at the Q2 retail scan data, which shows growth in sales dollars and strong volume.

Robert Rietbroek: Well, the preliminary proxy statement that was filed with the SEC earlier this morning and that is available on the investor relations section of our website includes, amongst other things, information regarding Blue Trident's financial performance during the second quarter. Whether from the results in the proxy filing or when we look at the Q2 retail scan data, which shows growth in sales dollars and strong volume. We can see that Blue Triton's business is performing well.

Operator: Well, the preliminary proxy statement that was filed with the SEC earlier this morning, and that is available on the investor relations section of our website, includes, amongst other things, information regarding Blue Triton's financial performance.

Operator: during the second quarter

Operator: weather from the results in the proxy filing or when we look at the q two retail scanddata which shows growth in sales dollars and strong volume

Operator: We can see that Blue Triton's business performs well.

Speaker: Here's one for both of you. What about concerns of Primo Water getting back into retail with the merger?

Jon Kathol: Here's one for both of you. What about concerns about Primo Water getting back into retail with the merger?

Speaker Change: Here's one for both of you. What about concerns of Primo Water getting back into retail with the merger?

Robbert Rietbroek: But let me go first, Jon, on that one. We believe the blue track and retail offering is a high quality asset, but we're not worried about getting back into retail with the merger. In fact, it was an important part of the deal right now. Blue Triton has a solid retail business, and we think it complements our Primo portfolio well. It features two one billion dollar plus brands, Poland Springs and Pure Life, and the retail scan performance of Blue Triton shows that they have performed well. We believe that one rock is done a good job strengthening the retail business of Blue Triton and producing favorable trends in the business.

Robert Rietbroek: But let me go first, John, on that one. We believe the Blue Triton retail offering is a high-quality asset. We're not worried about getting back into retail with the merger. In fact, it was an important part of the deal rationale. Blue Triton has a solid retail business, and we think it complements our Primo portfolio well. It features two $1 billion plus brands: Fallen Springs and Pure Life.

Operator: But let me go first, John , on that one. We believe the Blue Triton retail offering is high-quality assets, and we're not worried about getting back into retail with the merger.

Speaker Change: In fact, it was an important part of the deal rationale. Blue Triton has a solid retail business and we think it complements our Primo portfolio well. It features two $1 billion plus brands.

David Hass: The following three items have not been included in our 2024 guidance due to the uncertainty in timing with each discrete outcome. First, for the remaining balance of the business optimization program, we remain confident in achieving the $20 million improvement on a 2025 run rate basis. Second, the remaining benefits from the additional tariff refunds outside of the amount mentioned and received during the quarter due to the uncertain timing of the government refund process.

Operator: Fallen Springs, and Pure Life. Blue Triton uses a high amount of recycled content in their bottles. Primo Water promotes the hydration and wellness benefits of drinking quality water.

Robert Rietbroek: And the retail scan performance of Blue Triton shows that they have performed well. And we believe that One Rock has done a good job strengthening the retail business of Blue Triton and producing favorable trends in the business. From a sustainability standpoint, we believe both companies are leading the way in corporate accountability. Blue Triton uses a high amount of recycled content in its bottles. The target is going even higher as recycled plastic content becomes more affordable and available. Primo Water promotes the hydration and wellness benefits of drinking quality water. Both companies are protective of their water sources and strive to be good stewards of the environment.

Robert Rietbroek: And the retail scan performance of Blue Triton shows that they have performed well. And we believe that One Rock has done a good job strengthening the retail business of Blue Triton and producing favorable trends in the business. From a sustainability standpoint, we believe both companies are leading the way in corporate accountability. Blue Triton uses a high amount of recycled content in its bottles. The target's going even higher as recycled plastic content becomes more affordable and available. Primo Water promotes the hydration and wellness benefits of drinking quality water. Both companies are protective of their water sources and strive to be good stewards of the environment.

Speaker Change: Bowling Springs and Pure Life

Speaker Change: And the retail scan performance of Blue Triton shows that they have performed well. And we believe that One Rock has done a good job strengthening the retail business of Blue Triton and producing favorable trends in the business.

Robbert Rietbroek: From a sustainability standpoint, we believe both companies are leading the way in corporate accountability. Blue Triton uses a high amount of recycled content in their bottles, with targets going even higher as recycled plastic content becomes more affordable and available. Primo Water promotes the hydration and wellness benefits of drinking quality water. Both companies are protective of their water sources and strive to be good stewards of the environment.

David Hass: Justice. Third, the sale of discontinued operations, which includes our Water Business in Israel and our Water and Coffee Business in the United Kingdom. As previously communicated, these businesses will remain in discontinued operations until they are sold. They are actively being marketed and have received interest from several parties. Prior to the announcement of the merger with Blue Triton, we had repurchased shares of $6.8 million. On a year-to-day basis, we have repurchased shares of $15.9 million.

Operator: From a sustainability standpoint, we believe both companies are leading the way in corporate accountability. Blue Triton uses a high amount of recycled content in their bottles.

Operator: with targets going even higher as recycled plastic content becomes more affordable and available. Primo Water promotes the hydration and wellness benefits of drinking quality water. Both companies are protective of their water sources and strive to be good stewards of the environment.

David Hass: David?

David Hass: Sure, Jon. The blue Triton Ready Refresh or HD business within their company emphasizes convenience and service in the large and fragmented category. The proposed merger will expand our reach and allow us to serve more customers with high quality drinking water.

David Hass: Sure, John. The Blue Triton Ready Refresh or HOD business within their company emphasizes convenience and service in the large and fragmented category. The proposed merger will expand our reach and allow us to serve more customers with high-quality drinking water. Overall, Blue Triton is mostly comparable to Primo Water when accounting for the difference in the capitalization of bottles. Blue Triton expenses their bottles as they blowmold their large format bottles on site, whereas Primo Water buys their bottles from a third party and capitalizes on the bottle purchase.

Operator: David

Speaker Change: Sure, John . You know, the Blue Triton Ready Refresh, or HOD, business within their company emphasizes convenience and service in the large and fragmented category.

David Hass: Subsequent to the announcement, we have suspended share repurchases for the interim period until closing. We intend, however, to issue a special dividend of approximately 82 cents per common share to Primo Water shareholders following Board approval and setting of the record date and payment date prior to the closing of the merger with Blue Triton. Recently, our Board of Directors authorized a quarterly dividend of $0.9 per common share, a 13% increase over last year, which continues our path to the multi-year dividend step-up with an increase in our quarterly dividend for share of $1.00 for the third consecutive year. In closing, our improved financial profile and flexibility, along with a compelling long-term growth outlook, are a solid foundation for continued success. We are well positioned for the merger with Blue Triton brands.

Speaker Change: The proposed merger will expand our reach and allow us to serve more customers with high-quality drinking water.

David Hass: Overall, Blue Triton is morally comparable to Primo Waters when accounting for the difference in the capitalization of bottles. Blue Triton expenses their bottles as they blow mold, their large format bottles on site, whereas Primo Water buys their bottles from a third party and capitalizes the bottle purchases. This roughly equates to a 200 basis point difference in EBITOM margins between the companies.

Operator: Overall, Blue Triton is mostly comparable to Primo Water's when accounting for the difference in the capitalization of bottles. On the retail side, the business that Primo exited in 2022 was primarily one and two and a half gallon multi-serve bottles and largely a private label co-packing business. Contrast that with Blue Triton's retail business today. Retail scan data results suggest that the retail business performs well

Speaker Change: Overall, Blue Triton is mostly comparable to Primo Waters when accounting for the difference in the capitalization of bottles. Blue Triton expenses their bottles as they blow mold their large format bottles on-site, whereas Primo Water buys their bottles from a third party and capitalizes the bottle purchases.

David Hass: You know, this roughly equates to a 200 basis point difference in EBITDA margins between the companies. On the retail side, the business that Primo exited in 2022 was primarily one and two and a half gallon multi-serve bottles and largely a private label co-packing business. This presented challenging financials and lacked nationwide scale, driving the business to be margin diluted. Contrast that with Blue Triton's retail business today. The retail scan data results suggest that the retail business performs well.

David Hass: You know, this roughly equates to a 200 basis point difference in EBITDA margins between the companies. On the retail side, the business that Primo exited in 2022 was primarily one and two and a half gallon multi-serve bottles and largely a private label co-packing business. This presented challenging financials and lacked nationwide scale, driving the business to be margin dilutive. Contrast that with Blue Triton's retail business today. The retail scan data results suggest that the retail business performs well.

Speaker Change: You know, this roughly equates to a 200 basis point difference in EBITDA margins between the companies.

David Hass: On the retail side, the business that Primo exited in 2022 was primarily one- and two-and-a-half-gallon multi-serve bottles and largely a private label co-packing business. This presented challenging financials and lacked nationwide scale, driving the business to be margin diluted. Contrast that with Blue Triton's retail business today. Retail scan data results suggest that the retail business performs well.

Operator: On the retail side, the business that Primo exited in 2022 was primarily one- and two-and-a-half-gallon multi-serve bottles and largely a private-label co-packing business.

Operator: This presented challenging financials and lacked nationwide scale, driving the business to be margin dilutive. Contrast that with Blue Triton's retail business today. Retail scan data results suggest that the retail business performs well.

Jon Kathol: With that, I will turn the call back over to John for Q&A. Thanks, David.

David Hass: David, can you talk about the special dividend that Primo Water shareholders will be receiving?

David: David, can you talk about the special dividend that Primo Water shareholders will be receiving? What about share repurchases and dividends?

David Hass: David, can you talk about the special dividend that Primo Water shareholders will be receiving? What about share repurchases and dividends?

David: David, can you talk about the special dividend that Primo Water shareholders will be receiving? What about share repurchases and dividends?

David Hass: What about share repurchases and dividends? Absolutely.

David Hass: Absolutely. As we previously announced, we intend to issue a special dividend of up to $133 million, or 82 cents per share, following board approval and the setting of the record date and payment date prior to the closing of the proposed merger with Blue Trident. The special dividend essentially replaces the cash and then some that would have been returned to shareholders through shareware purchases absent the merger with Blue Triangle. At this point, we repurchased $6.8 million in shares in the second quarter before the announcement of the proposed merger.

David Hass: Absolutely. As we previously announced, we intend to issue a special dividend of up to $133 million, or $0.82 per share, following board approval and the setting of the record date and payment date prior to the closing of the proposed merger with Blue Triton. The special dividend essentially replaces the cash and then some that would have been returned to shareholders through shareware purchases absent the merger with Blue Triangle. At this point, we repurchased $6.8 million in shares in the second quarter before the announcement of the proposed merger.

David Hass: As we previously announced, we intend to issue a special dividend of up to $133 million or 82 cents per share following board approval and the setting of the record date and payment date prior to the closing of the proposed merger with Blue Triton. The special dividend essentially replaces the cash and then some that would have been returned to shareholders through share repurchases absent the merger with Blue Triton. At this point, we repurchased $6.8 million in shares in the second quarter before the announcement of the proposed merger.

Robbert Rietbroek: Robert, the first question is for you. You're a few quarters into your role. How do you view this quarter's performance and what were the key takeaways? Thanks, John. In this macro-environment and in the broader beverages category, I have encouraged by our balanced and broad-based results, which includes a combination of volume pricing, and strength across each of our water channels. This has enabled us to deliver the 7.6% overall revenue growth, broken down into 3.1% volume, and 4.5% price growth.

David: Absolutely. As we previously announced, we intend to issue a special dividend of up to $133 million, or $0.82 per share, following board approval and the setting of the record date and payment date prior to the closing of the proposed merger with Blue Triton.

Speaker Change: The special dividend essentially replaces the cash and then some that would have been returned to shareholders through shareware purchases, absent the merger with Blue Triangle.

David: At this point, we repurchased $6.8 million in shares in the second quarter before the announcement of the proposed merger. Separately, yesterday, the Primo Water board announced the approval of our regular quarterly dividend of $0.09 per share. This represents a 13% increase over last year. After the merger closing, the new co-board expects to provide insight into the long-term dividend policy.

David: At this point, we repurchased $6.8 million in shares in the second quarter before the announcement of the proposed merger.

David Hass: Separately, yesterday, the Primo Water board announced the approval of our regular quarterly dividend of nine cents per share. This represents a 13 percent increase over last year.

David Hass: Separately, yesterday, the Primo Water board announced the approval of our regular quarterly dividend of $0.09 per share. This represents a 13% increase over last year. After the merger closing, the new co-board expects to provide insight into the long-term dividend policy.

Robbert Rietbroek: This continues to represent a nice balance that we've experienced over the last few quarters between volume and pricing actions. The majority of revenue growth occurred from organic sources at 6.6% in the quarter, with inorganic contributing 1.0%. Our associates are very focused on our growth agenda. We continue to deliver our key operating metrics of on time in full customer retention and generating organic sales divisions, either with customer ads or location expansion in our retail business.

David: Separately, yesterday the Primo Water board announced the approval of our regular quarterly dividend of nine cents per share. This represents a 13% increase over last year.

David Hass: After the merger closing, the new co-board expects to provide insight into long-term dividend policy.

David: After the merger closing, the new co-board expects to provide insight into long-term dividend policy.

Robert: Robert, any thoughts on the back half of 2024 and plans for 2025?

Robert Rietbroek: Robert, any thoughts on the back half of 2024 and plans for 2025?

Speaker Change: Robert, any thoughts on the back half of 2024 and plans for 2025?

Robert Rietbroek: Yeah, we and Blue Triton continue to operate as two separate companies. At Primo Water, we're focused on finishing 2024 strong, and we will continue to sharpen our consumer-centric approach, driving volume growth. I want to see the team continue to innovate and create a more frictionless customer experience. Performing at a high level and executing the fundamentals will set us up for success in the balance of this year and into next as we prepare for the merger.

Robert Rietbroek: Yeah, we and Blue Triton continue to operate as two separate companies. At Primo Water, we're focused on finishing 2024 strong, and we will continue to sharpen our consumer-centric approach to driving volume growth. I want to see the team continue to innovate and create a more frictionless customer experience. Performing at a high level and executing the fundamentals will set us up for success in the balance of this year and into next as we prepare for the merger.

Speaker Change: Yeah, we and Blue Triton continue to operate as two separate companies.

David Hass: David, same question to you. What's your focus for the back half of 2024 and into 2025?

Speaker Change: At Primo Water, we're focused on finishing 2024 strong, and we will continue to sharpen our consumer-centric approach, driving volume growth. I want to see the team continue to innovate and to create a more frictionless customer experience.

Robbert Rietbroek: While there's always some timing variance is quarter to quarter in dispenser results, we again deliver itself through growth of 4%. Year over year. The expensive self-through remains a key indicator of the connectivity to our water solutions. It also implies contained momentum in future customer ads and increased volume.

David Hass: I want to see the team continue to innovate and to create a more frictionless customer experience. The performing at a high level and executing the fundamentals will set us up for success in the balance of this year and into next as we prepare for the merger.

Robert: The performing at a high level and executing the fundamentals will set us up for success in the balance of this year and into next as we prepare for the merger.

Robbert Rietbroek: James. We continue to make progress on business efficiencies, and I would ask David to discuss this in more detail. But overall, balancing the success of our must win priorities and discipline cost control while driving productivity is leading to our strong results in the quarter. In summary, our strong second quarter results and continued business momentum provide us with the confidence to increase our full year guidance for revenue, adjusted EBITDA and free cash flow generation.

David Hass: David, same question to you. What's your focus for the back half of 2024 and into 2025? Sure, as Robert mentioned, clearly we want to finish 2024 strong, and the Primo Water team is focused on achieving the expected $20 million in savings and what we call the Business Optimization Program. This quarter, as I mentioned, we achieved additional savings in the second half of 2024 that will annualize out to another $4 million on a 2025 basis. This brings our total 2025 tracking to $8 million, with continued confidence on achieving our full run rate outcome.

Robert: David, same question to you. What's your focus for the back half of 2024 and into 2025?

David Hass: Sure, you know, as Robert mentioned, clearly we want to finish 2024 strong, and the Primo Water team is focused on achieving the expected $20 million in savings in what we call the business optimization program. This quarter, as I mentioned, we achieved additional savings in the second half of 2024 that will annualize out to another $4 million on a 2025 basis. This brings our total 2025 tracking to $8 million with continued confidence in achieving our full run rate outcome.

David Hass: Sure. As Robert mentioned, clearly, we want to finish 2024 strong, and the Primo Water team is focused on achieving the expected $20 million in savings in what we call the business optimization program. This quarter, as I mentioned, we achieved additional savings in the second half of 2024 that will annualize out to another $4 million on the 2025 base. This brings our total 2025 tracking to $8 million with continued confidence in achieving our full run rate outcome.

Robert: Sure, you know, as Robert mentioned, clearly we want to finish 2024 strong, and the Primo Water team is focused on achieving the expected $20 million in savings in what we call the business optimization program.

Robert: This quarter, as I mentioned, we achieved additional savings in the second half of 2024 that will annualize out to another $4 million on a 2025 basis.

David Hass: David, could you provide a bit more detail on the quarter and keep takeaways notably on your free cash flow? Sure, Jon, thanks. First, I echo Robbert's view on the strength of our second quarter results. Importantly, we outperformed the high end of our Q2 guidance for revenue, adjusted EBITDA, margin and free cash flow generation. This strong performance enables us to increase our annual revenue guidance between $1.87 billion and $1.89 billion, a $10 million increase raise at the midpoint.

Speaker Change: This brings our total 2025 tracking to $8 million with continued confidence on achieving our full run rate outcome.

David Hass: As we head into 2025, we need to position ourselves to prepare for the proposed merger with Blue Trison, subject to obtaining the required approvals. We believe that it bodes well for customers, consumers, associates, and investors when both participants are performing well prior to the merger. As always, cash generation remains top of mind.

David Hass: As we head into 2025, we need to position ourselves to prepare for the proposed merger with Blue Triton, subject to obtaining the required approvals. We believe that it bodes well for customers, consumers, associates, and investors when both parties are performing well prior to the merger. As always, cash generation remains top of mind.

Speaker Change: As we head into 2025, we need to position ourselves to prepare for the proposed merger with Blue Triton.

Speaker Change: subject to obtaining the required approvals. We believe that it bodes well for customers, consumers, associates, and investors when both participants are performing well prior to the merger. As always, cash generation remains top of mind.

Robbert Rietbroek: Robert, any closing thoughts? Thank you for attending today's call and for your continued interest in Primo Water. As I hope you can tell, our team is focused on enhancing our customers' experience and driving sustainable growth. The path started is the right one to build on, and we have the tools to win. We have a lot of work ahead of us, and I, along with our team, are excited for the potential created by Blue Trison merger.

Robert Rietbroek: Robert, any closing thoughts?

David Hass: This now implies a 6% revenue growth rate versus fiscal 2023. We knew heading into 2024 that we had strong momentum from our fourth quarter results. And our strong first half start to fiscal 2024 confirms that that momentum is continuing. Gross margins for the quarter increased 110 basis points to 65.6%. With improvements driven by volume leverage through our operations, as well as our business optimization efforts, taking effect. Similarly, adjusted EBITDA increased 14.9% to $113 million year-over-year.

Robert: Robert, any closing thoughts?

Robert Rietbroek: Thank you for attending today's call and for your continued interest in

Robert Rietbroek: Thank you for attending today's call and for your continued interest in Primo Water. As I hope you can tell, our team is focused on enhancing our customers' experience and driving sustainable growth. The path we have started is the right one to build on, and we have the tools to win. We have a lot of work ahead of us, and I, along with our team, are excited for the potential.

Speaker Change: Thank you for attending today's call and for your continued interest in Primo Water.

Speaker Change: As I hope you can tell, our team is focused on enhancing our customers' experience and driving sustainable growth.

Robert: The path started is the right one to build on, and we have the tools to win.

Robert: We have a lot of work ahead of us, and I, along with our team, are excited about the potential created by a blue triton merger. Thank you for your interest in Primo Water and joining us on the next step on our exciting water journey.

Robert: We have a lot of work ahead of us, and I, along with our team, are excited for the potential created by a blue triton merger. Thank you for your interest in Primo Water and joining us in the next step on our exciting water journey.

Speaker: Thank you for your interest in Primo Water and joining us in the next step on our exciting water journey.

Speaker: Thank you, sir.

Operator: Ladies and gentlemen, this concludes your conference call for today. We thank you for participating and ask that you please disconnect your line. Have a lovely day. ¶ ¶

David Hass: This is nearly double the revenue growth rate. Adjusted EBITDA margins increased to 23.3%, up 150 basis points year-over-year. Our improved operating performance enables us to increase our annual adjusted EBITDA guidance by $10 million to between $420 and $440 million. The midpoint of $430 million implies adjusted EBITDA growth of nearly $50 million over last year, an improvement of nearly 13%. This is more than double our revenue growth rate, illustrating the operating leverage in our model.

Speaker Change: Thank you sir. Ladies and gentlemen this concludes your conference call for today. We thank you for participating and ask that you please disconnect your line.

Robert: Have a lovely day.

David Hass: The midpoint of our revised revenue and adjusted EBITDA guidance implies full-year margins of 22.9%. 140 basis point improvement versus 2023. When I step back, I'm particularly pleased with our focus on improving free cash flow as a conversion of our EBITDA. Year to date, we have generated $102 million in adjusted free cash flow, which is a $73 million increase versus the same period last year. While we expect continued positive free cash flow during the second half of 2024, as you may recall, we posted outside adjusted free cash flow during the third quarter of 2023.

David Hass: This was largely due to working capital enhancements and better inventory management that we continue to benefit from today. As we lap these gains in the second half of 2024, we expect a more measured outcome relative to the gains in the second quarter. Our broad-based earning strength allows us to raise our annual guidance on adjusted free cash flow by 5 million dollars to between 180 million to 190 million dollars, which is based on a strong conversion of our 10 million dollar increase in our adjusted EBITDA guides.

Speaker Change: SONG LYRICS

Robbert Rietbroek: Robert, can you talk about any product lines, customer segments, or geographic regions that contributed to the increased sales? Sure, Jon. Well, it was broad-based and balanced. We saw growth in all water channels. I think it's important to note that our overall revenue growth was over 9% when you exclude the other channel from our results. The channel we refer to as other is primarily our non-core office coffee service, and some co-packing business, which has been declining as we deemphasize and deprioritize these businesses.

Robbert Rietbroek: Our customer base actually remains very balanced with mix that is 50% residential and 50% commercial. Customer bases saw growth in the quarter. We didn't see any geographical anomalies in our growth. It really is balanced across North America. Our dispenser business so to quarterly decline, but remains up 15% year-to-date on the volume of dispensers sold into the retailers due to order timing variance. The dispenser sell through is about 4% and is the true indicator of the health of the business.

Robbert Rietbroek: We're excited about the improved consumer value of our dispensers as a result of the tariffs rolling off and prices reducing. This should drive incremental consumers to the category, which is a good sign for the growth of future water customers.

Robbert Rietbroek: The one product and brand that continues to really stand out is Mountain Valley spring water, sold at retail and on-premise. Within our other water channel, it was up 87% this quarter after growing 57% last quarter. Continued success in the larger format versions of Mountain Valley also contributed to growth within our water direct channel. It continues to attract more consumers and fulfills a super premium niche with its class and now aluminum bottle offering.

Robbert Rietbroek: We've expanded our capacity over the last year and we're still racing to catch up with consumer and customer demand. It's natural alkalinity and crisp taste make it a huge hit with consumers. We're enabling this 150 year-old brand to reach its full potential by driving household penetration and retail and on-premise distribution.

Robbert Rietbroek: Now overall, I think our improved service levels are driving increased volume, retention and even sentiment scores are 94% on time in full rates or improvement over previous periods, which drives increased revenue, improves customer satisfaction and provides a more favorable opinion of our company. By ensuring our customers get their deliveries when expected, consistently finding our products on the retailer shelves or finding our machines working and ready to dispense water, we fulfill their demand for high quality drinking water. Specific actions taken to improve our service metrics include six and seven day deliveries when necessary, filling empty shelf space and improving refill machine uptime. We're doing better, but I see room to improve even further.

Jon Kathol: Thanks, Robert.

David Hass: David, can you give us an update on the sale of your international businesses and any M&A activity? Absolutely. As we mentioned on our deal announcement call several weeks back, we sold the UK-based Ania Foods business in June. This was for roughly $91 million in proceeds when you include dividends pulled from the business. And last month, which happened after our close of Q2, we sold the Portugal business for approximately $19.2 million. Both the vestitures added to our already strong cash position, which is now over $600 million.

Robbert Rietbroek: We remain actively marketing the remaining assets in both Israel and the Eden UK business, and remain on track to invest these businesses later this year. Robert, you mentioned last quarter that your annual revenue guidance of a 5.5% increase included 1.5% to 2% volume, and the balance was price. Now you've increased your annual revenue guidance to 6%. Is the increase driven by volume or price? Yeah, the increase in our fiscal 2024 revenue guidance is driven by incremental volume growth that we've been experiencing. Our volume growth has been strong and resilient year to date, which provides confidence in our updated revenue guidance. The revised guidance can be broken out into 3% volume growth and 3% pricing growth this year.

Jon Kathol: Now let's transition the discussion to talk about the aspects of the merger with Blue Triton.

Robbert Rietbroek: Robert, I'll start with you. It's been several weeks since the announcement. Can you provide some color on the feedback you receive from investors and further views on the announced merger with Blue Triton? Sure, I'm excited to talk about it. The term that keeps coming up is compelling. We're hearing that it's a natural fifth and makes sense from a customer, consumer, associate, supplier, and investor perspective. It diversifies the product offering of both prima water and Blue Triton into more channels and categories, where we can offer the consumer an incredible array of branded offerings, purified spring and super premium spring water and various fact-forms.

Robbert Rietbroek: Davis. We've received great feedback from investor calls and interactions with our research analysts. We're hearing positive reactions to the proposed combination on the merits and the potential benefits that come from the expected synergies. While we're not in the position to comment on the financial outlook of the new company at this stage, we're excited to be creating a pure play, health, hydration company with a portfolio of well-known brands covering the spectrum from purified to spring and value to premium.

Robbert Rietbroek: The combined company will be a steward of its water resources as a sustainability leader. From our production and distribution footprint to our ability as a combined company to elevate the customer experience, we're excited to provide a diverse array of water solutions for the residential, the commercial, and the retail customers. Jon, healthy hydration is on trend and access to high-quality drinking water sources is increasingly important. That means more demand for our products in the future.

Robbert Rietbroek: Our product offerings give consumers another choice for hydration across multiple occasions, day parts, delivery methods, and formats. David, can you bring us up to speed on the mechanics of the merger? Sure. Since announcing the deal on June 17th, both teams are working on the regulatory and pre-moved shareholder approval processes. At Primal Water, we created a page on the Investor Relations section of our corporate website dedicated to the proposed merger which contains documents, filings, presentations, and updates, and will continue to provide updates through that mean.

Robbert Rietbroek: We submitted our heart Scott Radino filing on July 2nd and our Canadian filing on July 9th. We are actively working to obtain our required approvals as promptly as possible. To support that, a preliminary proxy statement has been filed with the SEC which among other things includes information regarding Blue Triton's historical financial performance and pro forma financial information regarding the combined company. The proxy statement is in preliminary form and subject to review and comment by the SEC revisions to the proxy statement before it is finalized may be material.

David Hass: We intend to hold our shareholder meeting as soon as practical once we clear SEC comments and the proxy statement is finalized. We are happy with how things have been progressing and we'll keep you updated along the way. Robert, can you share some insights on Blue Triton's financial performance? Well, the preliminary proxy statements that was filed with the SEC earlier this morning and that is available on the Investor Relations section of our website includes amongst other things information regarding Blue Triton's financial performance during the second quarter.

David Hass: Whether from the results in the proxy filing or when we look at the Q2 retail scan data which shows growth in sales dollars and strong volume We can see that blue track and that business perform well.

Jon Kathol: Here's one for both of you.

Robbert Rietbroek: What about concerns of Primo Water getting back into retail with the merger? But let me go first, Jon, on that one. We believe the blue track and retail offering is a high quality assets, but we're not worried about getting back into retail with the merger. In fact, it was an important part of the deal right now. Blue Triton has a solid retail business and we think it complements our Primo portfolio well.

Robbert Rietbroek: It features two one billion dollar plus brand, Poland Springs and Pure Life, and the retail scan performance of blue Triton shows that they have performed well. We believe that one rock is done a good job strengthening the retail business of blue Triton and producing favorable trends in the business. From a sustainability standpoint, we believe both companies are leading the way in corporate accountability. Blue Triton uses a high amount of recycled content in their bottles, with targets going even higher as recycled plastic content becomes more affordable and available. Primo Water promotes the hydration and wellness benefits of drinking quality water. Both companies are protective of their water sources and strive to be good stewards of the environment.

David Hass: David? Sure, Jon. The blue Triton ready refresh or HD business within their company emphasizes convenience and service in the large and fragmented category. The proposed merger will expand our reach and allow us to serve more customers with high quality drinking water. Overall, blue Triton is morally comparable to Primo waters when accounting for the difference in the capitalization of bottles. Blue Triton expenses their bottles as they blow mold, their large format bottles on site, whereas Primo water buys their bottles from a third party and capitalizes the bottle purchases.

David Hass: This roughly equates to a 200 basis point difference in EBITOM margins between the companies. On the retail side, the business that Primo exited in 2022 was primarily one and two-and-a-half gallon multi-serve bottles and largely a private label co-packing business. This presented challenging financials and lacked nationwide scale driving the business to be margin diluted. Contrast that with Blue Triton's retail business today. Retail scan data results suggest that the retail business performs well.

David Hass: David, can you talk about the special dividend that Primo water shareholders will be receiving? What about share repurchases and dividends? Absolutely.

David Hass: Separately, yesterday, the Primo water board announced the approval of our regular quarterly dividend of nine cents per share. This represents a 13 percent increase over last year. After the merger closing, the new co-bored expects to provide insight into long-term dividend policy.

Robbert Rietbroek: Robbert, any thoughts on the back half of 2024 and plans for 2025? Yeah, we and Blue Trison continue to operate as two separate companies. At Primo Water, we're focused on finishing 2024 strong, and we will continue to sharpen our consumer centric approach driving volume growth. I want to see the team continue to innovate and to create a more frictionless customer experience. The performing at a high level and executing the fundamentals will set us up for success in the balance of this year and into next as we prepare for the merger.

David Hass: David, same question to you. What's your focus for the back half of 2024 and into 2025? Sure, as Robert mentioned, clearly we want to finish 2024 strong, and the Primo Water team is focused on achieving the expected $20 million in savings and what we call the business optimization program. This quarter, as I mentioned, we achieved additional savings in the second half of 2024 that will annualize out to another $4 million on a 2025 basis.

David Hass: This brings our total 2025 tracking to $8 million with continued confidence on achieving our full run rate outcome. As we head into 2025, we need to position ourselves to prepare for the proposed merger with Blue Trison subject to obtaining the required approvals. We believe that it bodes well for customers, consumers, associates and investors when both participants are performing well prior to the merger. As always, cash generation remains top of mind.

Robbert Rietbroek: Robert, any closing thoughts? Thank you for attending today's call and for your continued interest in Primo Water. As I hope you can tell, our team is focused on enhancing our customers experience and driving sustainable growth. The path started is the right one to build on and we have the tools to win. We have a lot of work ahead of us and I along with our team are excited for the potential created by Blue Trison merger. Thank you for your interest in Primo Water and joining us in the next step on our exciting water journey. Thank you, sir.

Operator: Ladies and gentlemen, this concludes your conference call for today. We thank you for participating and ask that you please disconnect your line. Have a lovely day. [inaudible]

Q2 2024 Primo Water Corp Earnings Call

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