Q1 2025 Primo Brands Corp Earnings Call

This conference call contains forward looking statements regarding the company's future financial results and operational trends estimated synergies impacts from economic factors. Our recent refinancing efforts and other matters. These statements should be considered in connection with cautionary statements and disclaimers contained in the safe Harbor statements in this mornings.

Earnings press release, and the company's quarterly report on Form 10-Q, and other filings with the SEC the.

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. 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 first quarter earnings announcement released earlier this morning and in the investor relations section of the company's website at ir.primogrands.com.

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.

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 first quarter earnings announcement released earlier this morning and in the Investor Relations section of the company's website at IR Dot Primo brand.

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Operator: 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.

In addition to slides accompanying today's webcast to assist you throughout our discussion. We have included a copy of the presentation and our supplemental earnings deck on our website.

Jon Kathol: I am accompanied by Robert Rietbroek, Primo Brand's Chief Executive Officer, and David Hass, Chief Financial Officer. To start their prepared remarks, Robert and David will discuss the first quarter performance of Primo Brands, as well as the outlook for the full year 2025.

Robert Rebroke: I am accompanied by Robert Rebroke, Primo brands, Chief Executive Officer, and David <unk>, Chief Financial Officer.

Speaker Change: To start their prepared remarks, Robert and David will discuss the first quarter performance of Primo brands as well as the outlook for the full year 2025 with that I will now turn the call over to Rob.

Robbert Rietbroek: With that, I will now turn the call over to Robert. Thank you, Jon, and good morning, everyone. We are pleased to report strong performance in the first quarter, highlighting consistent strength across our business and organization. During this period, we achieved balanced growth throughout our portfolio, primarily driven by increased volume. Our business is resilient and our growth underscores the expansion of the bottled water category and our success in capturing a greater share of the market while maintaining customer value. Our results are a testament to the strength of our team and our unwavering dedication to providing exceptional customer service as we progress through the early stages of our integration process.

Robert Rebroke: Thank you John and good morning, everyone.

Robert Rebroke: We're pleased to report strong performance in the first quarter, highlighting consistent strength across our business and organization.

Robert Rebroke: During this period, we achieved balanced growth throughout our portfolio, primarily driven by increased volume.

Robert Rebroke: Our business is resilient and our growth underscores the expansion of the bottled water category and our success in capturing a greater share of the market, while maintaining customer value.

Robert Rebroke: Our results are a testament to the strength of our team and our unwavering dedication to providing exceptional customer service as we progressed through the early stages of our integration process.

Robbert Rietbroek: Together we remain committed to our mission. to hydrate a healthy America. I will briefly touch on the high-level financial results on a comparable basis, which, as a reminder, compares the combined results of both legacy companies in the prior period against the results of Primo Brands in the current period. David will get into the more detailed aspects of the results for the quarter in his remarks. In the first quarter of 2025, we achieved comparable net sales of $1.61 billion, reflecting a 3% increase. This growth was driven by 2.8% volume increase in price or mix growth of 0.2%.

Robert Rebroke: Together, we remain committed to our mission.

Robert Rebroke: To hydrate healthy America.

Robert Rebroke: I will briefly touch on the high level financial results on a comparable basis, which as a reminder compares the combined results of both legacy companies and the prior period against the results of Primo brands in the current periods.

Robert Rebroke: David will get into more detailed aspects of the results for the quarter in his remarks.

David: In the first quarter of 2025, we achieved comparable net sales of $1 six 1 billion, reflecting a 3% increase.

David: This growth was driven by two 8% volume increase and price or mix growth of 0.2%.

Robbert Rietbroek: highlighting the sustained demand for our beverage solutions and the resilience of both our consumer base and the category. Organic growth contributed 2.6%, while inorganic growth added 0.4%. Importantly, we delivered sales growth across all core water solution offerings and channels, including direct delivery, grocery, club, mass, and away from home. When taking into account the leap day impact in Q1 2024, normalized comparable net sales growth was 4.2%. We achieved meaningful margin rate expansion by capitalizing on synergies, driving cost optimization, and enhancing organic operational efficiencies. all while maintaining our consumer value equation. Underscoring the strength and resilience of our business.

David: Highlighting the sustained demand for our beverage solutions and the resilience of both our consumer base and the category.

David: Organic growth contributed two 6% while inorganic growth added 0.4%.

David: Importantly, we delivered sales growth across all core water solution offerings and channels, including direct delivery grocery club mass and away from home.

David: When taking into account the leap day impact in Q1 2020 for normalized comparable net sales growth was four points 2%.

David: We achieved meaningful margin rate expansion by capitalizing on synergies driving cost optimization and enhancing organic operational efficiencies.

David: All while maintaining our consumer value equation.

David: Underscoring the strength and resilience of our business model.

Robbert Rietbroek: Comparable Adjusted EBITDA for the quarter rose to $342 million, a 12.1% increase compared to the prior year, growing at four times the rate of comparable net sales growth. This resulted in a comparable adjusted EBITDA margin of 21.2%, a significant improvement of 170 basis points over the prior year's margin of 19.5%. Our performance reflects multiple positive factors driving our results. Consumer demand remains resilience, reinforcing confidence in our offering. Our beverage portfolio is well-diversified across various price points, formats, and channels including retail, residential, commercial, and away from home. Notably, the price of our water solutions is increasing at a slower rate than municipal tap water costs in many parts of the country.

David: Comparable adjusted EBITDA for the quarter rose to $342 million, a 12.1% increase compared to the prior year growing at four times the rate of comparable net sales growth.

David: This resulted in a comparable adjusted EBITDA margin of 21, 2% a significant improvement of 170 basis points over the prior year's margin of 19, 5%.

David: Our performance reflects multiple positive factors driving our results.

David: Sumer demand remains resilient reinforcing confidence in our offerings.

David: Our beverage portfolio is well diversified across various price points formats and channels, including retail residential commercial and away from home.

David: Notably the price of our water solutions is increasingly slower rates than municipal tap water costs in many parts of the country.

Robbert Rietbroek: We continue to benefit from positive consumer trends, such as heightened focus on healthier lifestyle choices, which align with the health and wellness attributes of our product. Increasing concerns over water contaminants in tap water continue to drive demand for high-quality water solutions. In the first quarter this year, numerous communities were affected by boil alerts, weather events, and municipal water disruptions, highlighting vulnerabilities in municipal water systems. As a result, consumers are becoming more mindful of the need for emergency drinking water supplies, as well as a shift to bottled water products that Primo offers. And we remain strategically focused on U.S.-based manufacturing and distribution that provides us with a competitive advantage over competitors more impacted by tariffs.

David: We continue to benefit from positive consumer trends, such as heightened focus on healthier lifestyle choices, which align with the health and wellness attributes of our products.

David: Increasing concerns over water contaminants tap water continues to drive demand for high quality water solutions.

David: In the first quarter. This year numerous communities were affected by boil alerts weather events and municipal water disruptions highlighting vulnerabilities in municipal water systems.

David: As a result consumers are becoming more mindful of the need for emergency drinking water supplies as well as a shift to bottled water products of Primo offers.

David: And we remain strategically focused on U S based manufacturing and distribution that provides us with a competitive advantage over competitors more impacted by tariffs.

Robbert Rietbroek: Our first quarter results are a testament to the dedication and hard work of our associates, as well as our unwavering commitment to our customers and the execution of our must-win priorities, which were expanded and strengthened through the merger.

David: Our first quarter results are a testament to the dedication and hard work of our associates as well as our unwavering commitment to our customers and the execution of our must win priorities, which were expanded and strengthened through the merger.

Robbert Rietbroek: I would like to highlight a couple of examples of these critical priorities to Primo Brand. The first must-win priority is brand leadership. aimed at positioning our brands as the top choice for consumers by setting the benchmark for quality, innovation, and customer experience in the market. We are focused on expanding our leadership in the bottled water segment and grow functional, flavored, still, and sparkling premium branded water across different packaging formats and growth channels. In the first quarter, our brands took center stage with our premium brands continuing rapid growth and increased exposure. Saratoga, one of our premium water brands, was chosen as the official water of the Golden Globes, receiving prominent primetime exposure that reached millions of viewers.

David: I would like to highlight a couple of examples of these critical priorities to premium brands.

David: The first must win priority as brand leadership.

David: Aimed at positioning our brands is a tough choice for consumers by setting the benchmark for quality innovation and customer experience in the market.

David: We are focused on expanding our leadership in the bottled water segment and grow functional flavored still and sparkling premium branded water across different packaging formats and growth channels.

David: In the first quarter, our brands took center stage with our premium brands, continuing rapid growth and increased exposure.

David: Saratoga one of our premium water brands was chosen as the official water of the Golden Globes, receiving prominent primetime exposure that reached millions of viewers.

Robbert Rietbroek: Saratoga also achieved viral success when a social media influencer organically integrated the brand into his daily routine. This post generated over 1 billion views, with subsequent engagements prominently spotlighting the Saratoga brand. Another equally exciting instance involved Mountain Valley Water, which received organic endorsements from professional athletes. These instances underscore the strength of our brand's loyal following and positive sentiments achieved entirely through unaided, authentic moments. Earlier this quarter, Primo Brand's regional spring water and national purified water brands were announced as the official water of Major League Baseball. Through a 360-degree campaign, America's leading water brands, including Fulham Springs, Deer Park, Ozarka, Ice Mountain, Arrowhead, and Pure Life, will fuel baseball fandom with exclusive content, local activations, and community give-back moments from opening day to the World Series.

David: Saratoga also achieved viral success, when a social media influencer organically integrated the brand into his daily routine.

David: This post generated over 1 billion views with subsequent engagements prominently spotlighting the Saratoga brand.

David: Another equally exciting instance involves mountain valley water, which received organic endorsements from professional athletes.

David: These instances underscore the strength of our brands loyal following and positive sentiment achieved entirely through unaided authentic moments.

David: Earlier this quarter Primo brands regional spring water and national purified water brands were announced as the official water of major League baseball.

David: Through a 360 degree campaign America's leading water brands, including Bone Springs Deer Park, Zarqa Ice mountain Arrowhead and pure life will fuel baseball fans with exclusive content local activations and community give back moments from opening day to the world.

David: Aries.

Robbert Rietbroek: Our commitment to brand leadership continues to drive the expansion of our portfolio's reach across consumer occasions. Surcata data shows retail household penetration increased 110 basis points year-over-year in Q1. These gains reflect the success of our strategic focus on enhancing accessibility and consumer engagement across our office.

David: Our commitment to brand leadership continues to drive the expansion of our portfolio's reach across consumer occasions.

David: Sir Canada data shows retail household penetration increased 110 basis points year over year in Q1.

David: These gains reflect the success of our strategic focus on enhancing accessibility and consumer engagement across our offerings.

Robbert Rietbroek: The second must-win priority is net organic growth focused on expanding our customer and consumer base across in-store, in-home, and omni-channel platforms. This objective is driven by innovative offerings that enable consumers to hydrate anytime, anywhere, and in any way they choose. According to syndicated data, Primo Brands solidified its position as the largest branded player to grow its bottled water category dollar share, achieving a 30 basis point increase. With quarter one U.S. retail bottled water category growth of 2%, including 3% volume, We succeeded in growing our business organically. These results underscore the strength of our branded portfolio and reflect the sustained value we offer the consumer with the trends shifting away from sugar-sweetened beverages towards high-quality drinking water.

David: The second priority is net organic growth focused on expanding our customer and consumer base across in store in home and Omnichannel platforms.

David: This objective is driven by innovative offerings that enabled consumers to hydrate anytime anywhere and in any way they choose.

David: According to syndicated data Primo brand solidified its position as the largest branded player to grow it's bottled water category dollar share achieving a 30 basis point increase.

David: With quarter, one U S retail bottled water category growth of 2%, including 3% volume.

David: We succeeded in growing our business organically.

David: With these results underscore the strength of our branded portfolio and reflect the sustained value we offer to consumer with a trend shifting away from sugary sweetened beverages towards high quality drinking water.

Robbert Rietbroek: We successfully introduced the new six-count PET versions of our premium Mountain Valley and Saratoga spring waters into the mass channel. We believe this incremental distribution will enhance visibility, increase shelf presence, and drive sales growth as more consumers experience the value of a premium offering at an accessible price. We remain confident that our diversified offerings, iconic brands, and commitment to promoting healthy hydration will continue to drive consumer favorability in the current environment. Simultaneously, we remain focused on expanding and retaining our direct delivery, exchange, and refill customer base, as well as increasing the number of locations we serve.

David: We successfully introduced the new six count PTT versions of our premium Mountain Valley, and Saratoga spring waters into the mass channel.

David: We believe this incremental distribution will enhance visibility increased shelf presence and drive sales growth as more consumers experienced the value of a premium offering at an accessible price points.

David: We remain confident that our diversified offerings iconix brands and commitments, who promoting healthy hydration will continue to drive consumer favorability in the current environment.

David: Simultaneously, we remain focused on expanding and retaining our direct delivery exchange and refill customer base as well as increasing the number of locations we serve.

Robbert Rietbroek: This reflects our focus on optimizing weekend deliveries, adhering to delivery frequency, and accelerating product response time. We are also broadening our exchange offering within MAS and DIY channels to include regional spring water brands, creating incremental revenue opportunities while complementing our existing purified water offerings.

David: This reflects our focus on optimizing weekend deliveries adhering to delivery frequency and accelerating product response times.

David: We are also broadening our exchange offering within mass and DIY channels to include regional spring water brands, creating incremental revenue opportunities, while complementing our existing purified water offerings.

Robbert Rietbroek: The third must-win priority is to deliver a superior customer service experience aimed at delighting our customers by providing consistent, seamless experiences across every product, service, and support touchpoint, leaving a lasting positive impact. We continuously monitor our performance through key metrics such as Net Promoter Score, Trust Pilot, Google Ratings, and App Ratings, which provide valuable insights that enable us to make timely improvements. Our digital presence continues to evolve with integrated updates across our websites and mobile apps, yielding more prospect sessions and an increase in active, recurring users. Additionally, we've expanded our direct delivery service to include a broader brand portfolio for customers to enjoy.

David: The third must win priority is to deliver a superior customer service experience aimed at delighting, our customers by providing consistent seamless experiences across every product service and support touch points, leaving a lasting positive impact.

David: We continuously monitor our performance strategic metrics, such as net promoter score Trust pilot, Google ratings, and App ratings, which provide valuable insights that enable us to make timely improvements.

David: Our digital presence continues to evolve with integrated updates across our websites and mobile apps, yielding more prospect sessions and an increase in active recurring users.

David: Additionally, we've expanded our direct delivery service to include a broader brand portfolio for customers to enjoy.

Robbert Rietbroek: Customers from across our home and office delivery network can now choose from 5-gallon or K-spec spring water options from our established spring and purified 5-gallon Primo Water offering.

David: Customers from across our home and office delivery network can now choose from five gallon or key spec spring water options from our established spring and purified five gallon Primo water offering.

Robbert Rietbroek: The fourth must-win priority is operational excellence, focused on consistently delivering value to our customers and enhancing performance through efficiency improvements, strategic sourcing, and better returns on invested capital. Our teams have made significant advancements in demand forecasting tools, methodologies and outcomes, driving improved efficiencies and lowering costs by unit. By leveraging machine learning and analytics, we continue to refine demand forecasting, production planning, network optimization, and route design, all while enhancing the overall customer experience.

David: The fourth must win priorities operational excellence focused on consistently delivering value to our customers and enhancing performance through efficiency improvements strategic sourcing and better returns on invested capital.

David: Our teams have made significant advancements in demand forecasting tools methodologies and outcomes driving improved efficiencies and lowering costs by units.

David: By leveraging machine learning and analytics, we continue to refine demand forecasting production planning network optimization and route design, all while enhancing the overall customer experience.

Robbert Rietbroek: After the quarter ended, our Hawkins, Texas facility experienced damage from a tornado, which caused a disruption to our supply chain. I am proud of the way that the organization rose to the challenge. And while we've had some disruption to supply, we were back up and running in a few days and will be 100% operational by late June. Fortunately, no injuries occurred during this event, a testament to our team's prioritization of safety and resilience.

David: After the quarter ended our Hopkins, Texas facility experienced damage from a tornado.

David: Because of the disruption to our supply chain.

David: I'm proud of the way that the organization rose to the challenge.

David: We've had some disruption to supply we were back up and running in a few days and will be 100% operational by late June.

David: Fortunately no injuries occurred during this event a testament to our team's prioritization of safety and resilience.

Robbert Rietbroek: The fifth must-win priority is to be the first choice for stakeholders, where we earn our position as the first choice organization for our associates, communities, retailers, vendors, and investors. This goal is driven by our focus on delivering exceptional associate experiences, fostering sustainability, engaging meaningfully with communities, and nurturing strong, impactful stakeholder partnerships. We value our partnerships with leading retailers and grocery chains across North America, which provide opportunities for joint business planning to strengthen our presence, grow market share, and increase household penetration and volume. Recent top-level meetings and modular resets have yielded significant wins. Our retail partners have also recognized our dedication to partnership, with Walmart nominating Primo Brands as a finalist for the 2024 Supplier of the Year Award for our dispenser and exchange offer.

David: The fifth must win priority is to be the first choice for stakeholders, where we earn our position as a first choice organization for our associates communities retailers vendors and investors.

David: This call is driven by our focus on delivering exceptional associate experiences fostering sustainability engaging meaningfully with communities and nurturing strong impactful stakeholder partnerships.

David: We value our partnerships with leading retailers and grocery chains across North America, which provide opportunities for joint business planning to strengthen our presence grow market share and increase household penetration and volume.

David: Recent top level meetings and modular resets have yielded significant wins.

David: Our retail partners have also recognized our dedication to partnership with Walmart nominating Primo brands as a finalist for the 2020 for supplier of the year Award for our dispenser and exchange offerings.

Robbert Rietbroek: By fostering and sustaining these relationships, we position ourselves for long-term success. Simply said, if our retail partners win, we win. Our robust business model uniquely integrates our associates, assets, and resources, enabling us to deliver outcomes that benefit all our stakeholders. including associates, suppliers, customers, and both current and prospective stockholders.

David: By fostering a sustaining these relationships we position ourselves for long term success.

David: Simply said, if our retail partners when we win.

David: Our robust business model uniquely integrates our associates assets and resources, enabling us to deliver outcomes that benefit all our stakeholders, including associates suppliers customers and both current and perspective stockholders.

Robbert Rietbroek: At Primo Brands, we are dedicated to making healthy hydration more sustainable, responsible, and accessible for everyone, everywhere. This commitment is driven by four key pillars that guide how our business interacts with nature and people. Water stewardship, circular packaging, supporting people and communities, and greenhouse gas reduction.

Speaker Change: Primo brands, we are dedicated to making healthy hydration more sustainable responsible and accessible for everyone everywhere.

Speaker Change: This commitment is driven by four key pillars that guide, how our business interacts with nature and people water stewardship circular packaging supporting people and communities and greenhouse gas reduction we.

Robbert Rietbroek: We will share more detail when we release our inaugural 2024 sustainability report later this month.

Speaker Change: We will share more detail when we release our inaugural 2020 for sustainability report later this month.

Robbert Rietbroek: Earlier this month, we partnered with the Ocean Cleanup to support cleanup efforts in Los Angeles County and beyond, while also completing a project with the Cucamonga Valley Water District to remove contaminants from the groundwater. restoring water quality and increasing local water supply for long-term sustainability. We take immense pride in making a positive impact in the communities we serve.

Speaker Change: Earlier this month, we partnered with the Ocean cleanup to support cleanup efforts in Los Angeles County, and beyond while also completing a project with the Cucamonga Valley water district to remove contaminants from the groundwater.

Speaker Change: Restoring water quality and increasing local water supply for long term sustainability.

Speaker Change: We take immense pride in making a positive impact in the communities, we serve and respond to the la wildfires. Our team work directly with the California office of emergency services to supply more than 22000 cases of water to high grade those effective.

Robbert Rietbroek: In response to the LA wildfires, our team worked directly with the California Office of Emergency Services to supply more than 22,000 cases of water to hydrate those in We believe all aspects of our business are aligning for flawless integration execution, where we build the foundation for long-term growth by unifying the people, processes, policies, and platforms to maximize timely cost-synergy capture, as well as to capture revenue synergy. We believe the successful execution and delivery of these key initiatives will position us to achieve our 2025 financial guidance, which includes capturing $200 million in cost synergies opportunity as we ramp up through the balance of the year.

Speaker Change: We believe all aspects of our business are aligning for flawless integration execution, where we build the foundation for long term growth by unifying the people processes policies and platforms to maximize timely cost synergy capture as well as to capture revenue.

Speaker Change: Synergies.

Speaker Change: We believe the successful execution and delivery of these key initiatives will position us to achieve our 2025 financial guidance, which includes capturing $200 million in cost synergies opportunity as we ramp up through the balance of the year.

Robbert Rietbroek: We have already begun the initial stages of the Synergy Capture. In the first quarter, we focused on reducing redundant corporate headcount and driving efficiencies in the business and optimizing our SG&A structure. At the end of the first quarter, we executed the closure of eight facilities and continued the process of streamlining our work. Total cost synergy opportunities are still projected to reach $300 million by the end of 2026. As a reminder, this is $100 million higher and one year sooner than the estimate provided at the time of the deal announcement, with $200 million in 2025 and an incremental $100 million in 2026.

Speaker Change: We have already begun the initial stages of the synergy capture in the first quarter, we focused on reducing redundant corporate head count and driving efficiencies in the business and optimizing our G&A structure.

Speaker Change: At the end of the first quarter, we executed the closure of eight facilities and continue the process of streamlining our workforce.

Speaker Change: Total cost synergy opportunities are still projected to reach $300 million by the end of 2026. As a reminder, this is a $100 million higher than one year sooner than the estimate provided at the time of the deal announcements with $200 million in 2025 and an incremental.

Speaker Change: $100 million in 2026.

Robbert Rietbroek: From an overall perspective, we expect 2025 net sales to wrap through the year as new distribution and resets are implemented, as well as benefiting from the immediate implementation of product availability across the company's branch network. Cost management and maximizing synergies will remain priorities as we work through the year.

Speaker Change: From an overall perspective, we expect 2025 net sales to ramp through the year as new distribution and resets are implemented as well as benefiting from the immediate implementation of product availability across the Companys branch network.

Speaker Change: Cost management, and maximizing synergies will remain priorities as we work through the year and optimization.

Robbert Rietbroek: An optimization of our production and distribution network are keys to our longer-term success.

Speaker Change: Our production and distribution network are key to our longer term success.

Robbert Rietbroek: In recent weeks, tariffs have been a prominent topic in the headlines. Our exposure to potential tariffs is minimal and primarily concentrated in our dispenser business, which accounts for approximately 1% of our overall net sales. As a primarily U.S.-based, vertically integrated business, we are advantaged by our coast-to-coast manufacturing network, which seamlessly connects our people, customers, and consumers.

Speaker Change: In recent weeks tariffs have been a prominent topic in the headlines our exposure to potential tariffs is minimal.

Speaker Change: Primarily concentrated in our dispenser business, which accounts for approximately 1% of our overall net sales.

Speaker Change: As a primarily U S based vertically integrated business, we are advantaged by our coast to coast manufacturing network, which seamlessly connects our people customers and consumers further reinforcing our resilience and adaptability in this rapidly evolving landscape.

Robbert Rietbroek: further reinforcing our resilience and adaptability in this rapidly evolving landscape.

Robbert Rietbroek: Before I hand the call over to David, I want to express my gratitude to all our Primo Brands associates for their contributions to our business performance. Their dedication embodies the performance-oriented culture we are fostering, which is centered on exceptional customer service, a relentless focus on distribution, and a commitment to operational excellence and cost control.

David: Before I hand, the call over to David I want to express my gratitude to all our Primo brands associates for their contributions to our business performance.

David: Their dedication and bodies the performance oriented culture, we are fostering which is centered on exceptional customer service a relentless focus on distribution and a commitment to operational excellence and cost control.

David Hass: With that, I will now turn the call over to David. Thanks, Robert. We are excited to complete our first full quarter as Primo Brands, and I would like to thank our associates for their efforts and relentless drive to focus on cost control and synergy capture as we lay the foundation for current and future success. Today, we'll discuss the first quarter results for 2025, comment on the progress of our integration, and the macro events impacting the company while reaffirming our guidance. As you may recall, Blue Triton Brands was the accounting acquirer of records for the merged company.

David: With that I will now turn the call over to David. Thanks, Robert were excited to complete our first full quarter as premium brands and I would like to thank our associates for their efforts and relentless drive to focus on cost control and synergy capture as we lay the foundation for current and future success.

David: Today, we will discuss the first quarter results for 2025 comment on the progress of our integration and the macro events impacting the company, while reaffirming our guidance.

David: As you May recall that we tried and brands as the accounting acquirer of record for the merged company. The GAAP financial comparisons in this morning's press release reflect the 2025 results of the new premium brands versus 'twenty 'twenty four results of the base legacy Blue trading only.

David Hass: The GAAP financial comparisons in this morning's press release reflect the 2025 results of the new Primo Brands versus 2024 results of the base legacy Blue Triton owners. This is a typical GAAP reporting outcome of a merger transaction which can lead to growth metrics that are not comparable. To assist with more apples-to-apples comparisons, we will be primarily discussing two sets of results, the first being our comparable results, which incorporate a combination of both legacy organizations while adjusting for the exited Eastern Canadian operations for both years 2024 and 2025. Additionally, we will refer to normalized comparable results, which will account for the extra day in 2024 from the lead year.

David: This is a typical GAAP reporting outcome of a merger transaction, which can lead to growth metrics that are not comparable.

David: To assist with more apples to apples comparisons we will be primarily discussing two sets of results. The first being our comparable results, which incorporates a combination of both legacy organizations, while adjusting for the exited eastern Canadian operations for both years 2020.

David: In 2025.

David: Additionally, we will refer to normalized comparable results, which will account for the extra day in 2024 from the leap year.

David Hass: For your convenience, we have included a number of reconciliations to the GAAP metrics in the appendix section of the Supplemental Earnings Deck located on our website at ir.primobrands.com. Turning to our first quarter results for Primo Brands, comparable net sales increased 3% to $1.610 billion, and comparable adjusted EBITDA increased 12.1% to $341.5 million, with comparable adjusted EBITDA margins of 21.2%. Within the comparable 3% net sales growth, approximately 2.6, or approximately $40.5 million, came from organic growth activity, with the balance, 0.4%, or approximately $6.8 million, coming from inorganic or acquired sources. As a reminder, Primogram's definition of inorganic contribution includes any acquired businesses that were closed less than 12 months ago.

David: For your convenience we have included a number of reconciliations to the GAAP metrics in the appendix section of the supplemental earnings deck located on our website at IR Dot Primo brand Dot com.

David: Turning to our first quarter results for premium brands comparable net sales increased 3% to 1610 or $1 billion.

David: And comparable adjusted EBITDA increased 12, 1% to $341 5 million.

David: Comparable adjusted EBITDA margin of 21, 2%.

David: Within the comparable 3% net sales growth of approximately $2 six or approximately $45 million came from organic growth activity with the balance 0.4% or approximately $6 8 million coming from in the organic or acquired.

David: As a reminder, premium brands definition of inorganic contribution include any acquired businesses that were closed less than 12 months ago.

David Hass: After 12 months, any acquired business becomes part of our normal contribution basis. Separately, the comparable net sales increase for the quarter was driven by a 2.8% increase in volume and a 0.2% increase in price or mix. As a reminder, volume for Primo Brands is defined as taste goods equivalents, which are measured as 12 liters. The strength of the quarter was driven by strong performance across all core water categories. When taking into account the leap day impact by removing the extra selling day from 2024 results, our normalized comparable net sales growth would have increased from 3.0% to 4.2%.

David: After 12 months and the acquired business becomes part of our normal contribution basis.

David: Separately the comparable net sales increased for the quarter was driven by a two 8% increase in volume and a 0.2% increase in price or mix.

David: As a reminder, our volume for premium brands as defined as case goods equivalents, which are measured as 12 leaders the.

David: The strength of the quarter was driven by strong performance across all core water categories, when taking into account the leap day impact by removing the extra selling day from 2024 results are normalized comparable net sales growth would have increased from 3.0% to four 2%.

David Hass: Without getting into the granular detail of the extra selling day, it can be approximately He assumed that the ratio between volume and price, or mix, would hold for the 4.2% normalized comparable growth rate, making the volume contribution in the quarter more impressive. Volume improvements span a series of wins across brand offerings, increased points of distribution, channels of trade, and product mix. We believe we remain a strong beneficiary of current health and wellness trends, and our product price point diversity continues to deliver strong volume. We saw improved growth in our mass channel, as well as our emerging other channel that showcased growth in various natural foods retailers with our premium brands that continue to thrive.

David: Without getting into the granular detail of the extra selling day it can be approximately.

David: We assumed that the ratio between volume and price or mix would hold for the four 2% normalized comparable growth rate, making the volume contribution in the quarter more impressive.

David: Volume improvements spans a series of wins across brand offerings increased points of distribution channels of trade and product mix. We believe we remain a strong beneficiary of current health and wellness trends and our product price points diversity continues to deliver strong volume.

David: We saw improved growth in our mass channel as well as our emerging other channel that showcase growth in various natural foods retailers with our premium brands that continue to thrive.

David Hass: While not disclosed, our refill and exchange businesses continued with their high single digit growth to complement our direct delivery business. And we continue to deliver impressive growth results within our premium water category with 49% net sales growth, primarily from volume-based. Digging a bit further into our synergy capture in the first quarter, approximately $20 million of our adjusted EBITDA results can be attributed to cost reductions or efficiencies gained as a result of the merger. This is a great start in helping deliver our estimated total $200 million in-year synergy opportunity in 2025. Our estimated cost-energy opportunity will continue to build as we move through 2025.

David: While not disclosed our refill and exchange businesses continued with their high single digit growth to complement our direct delivery business and we continued to deliver impressive growth results within our premium water category with 49% net sales growth primarily from volume based increases.

David: Digging a bit further into our synergy capture in the first quarter approximately $20 million of our adjusted EBITDA results can be attributed to cost reductions or efficiencies gained as a result of the merger.

David: This is a great start and helping deliver our estimated total $200 million in year synergy opportunity in 2025.

David: Our estimated cost synergy opportunity, we will continue to build as we move through 2025 in the first quarter. The savings were attributed to actions across SG&A reductions.

David Hass: In the first quarter, the savings were attributed to actions across SG&A reductions, IT savings, and production or in-field branch operation consolidation. As we progress, both our SG&A and operations buckets will increase significantly, as well as our procurement initiatives. We remain committed to driving an efficient cost structure both at the corporate or shared service team level, as well as large cost drivers that we plan to streamline in our field-based organization by removing duplicative infrastructure.

David: Savings and production were infield branch operation consolidation as.

David: As we progressed, both our SG&A and operations buckets will increase significantly as well as our procurement initiatives, we remain committed to driving an efficient cost structure, both at the corporate or shared service team level as well as large cost drivers that we plan to streamline in our field based.

David: <unk> by removing duplicative infrastructure.

David Hass: Now let's shift to our balance sheet and At the end of the first quarter, debt capital, growth of deferred financing costs, and discounts totaled approximately $5.2 billion. The credit agreement, amended in February as part of a series of debt transactions, includes a $750 million revolving credit This facility remains undrawn at the end of the first quarter, providing us with approximately $611 million of available liquidity, after accounting for standby letters of credit totaling approximately $139 million. Our liquidity remains strong, with approximately $449 million of unrestricted cash on the balance sheet. $453 million when considering cash that is restricted or within our discontinued operation.

David: Now, let's shift to our balance sheet and cash flows at the end of the first quarter that capital growth of deferred financing costs and discounts totaled approximately $5 2 billion.

The credit agreement amended in February as part of a series of debt transaction includes a $750 million revolving credit facility. This facility remains undrawn at the end of the first quarter, providing us with approximately $611 million of available liquidity.

David: Even after accounting for standby letters of credit totaling approximately $139 million.

David: Our liquidity remains strong with approximately $449 million of unrestricted cash on the balance sheet $453 million when considering cash that is restricted or within our discontinued operations when combined with $611 million of availability under our revolver.

David Hass: When combined with $611 million of availability under our revolving credit facility, as mentioned earlier, this brings our total liquidity to approximately $1.1 billion. Additional opportunistic liquidity was generated by the sale of our Eastern Canadian property, totaling approximately $46 million that is reflected in our Q1 cash balance, and the recent completion of the sale of our UK business, which closed in April for approximately $9 million. With the sale of the UK business, Israel remains as the last legacy Primo Water international asset to be divested. The Israel divestiture remains under regulatory review by the Competition Authority and we expect to complete the sale shortly following the completion of that regulatory review.

David: The credit facility as mentioned earlier this brings our total liquidity to approximately $1 1 billion.

David: Additional opportunistic liquidity was generated by the sale of our eastern Canadian property totaling approximately $46 million that is reflected in our Q1 cash balance.

David: And the recent completion of the sale of our UK business, which closed in April for approximately $9 million.

David: With the sale of the UK business, Israel remain as the last legacy Primo water international assets to be divested Israel divestiture remains under regulatory review by the competition authority and we expect to complete the sale. Shortly following the completion of that regulatory review.

David Hass: Proceeds are expected to further strengthen our overall cash and liquidity position. Moving to cash generated from the business, in the first quarter, Primo Brands generated $38.8 million of cash flow from operations. When accounting for significant items, including, but not limited to, our integration and merger activities, our cash flow from operations would have totaled $121.4 million. Additionally, we invested $66.7 million in capital expenditures, excluding integration capital. This resulted in adjusted free cash flow of $54.7 million. When compared to the prior year, on a combined basis, this resulted in adjusted free cash flow growth of $49.9 million.

David: These are expected to further strengthen our overall cash and liquidity position.

David: Moving to cash generated from the business in the first quarter Primo brands generated $38 $8 million of cash flow from operations, when accounting for significant items, including but not limited to our integration and merger activities. Our cash flow from operations would have totaled 121 4 million.

David: Additionally, we invested $66 7 million in capital expenditures.

David: <unk> integration Capex.

David: This resulted in adjusted free cash flow.

David: $54 7 million when compared to the prior year on a combined basis. This resulted in adjusted free cash flow growth of $49 9 million.

David Hass: The key metric that we track closely is our conversion of adjusted free cash flow to adjusted EBITDA. On a trailing 12-month basis, our adjusted free cash flow totaled $694.8 million, yielding a conversion ratio of $5.8 billion.

David: A key metric that we track closely as our conversion of adjusted free cash flow to adjusted EBITDA on a trailing 12 month basis, our adjusted free cash flow totaled $694 8 million, yielding a conversion ratio of 50%.

David Hass: We are reaffirming our net sales guidance of between 3% to 5% growth on a comparable basis. Clearly, there is uncertainty in the economy and consumer spending activities, in addition to the ongoing ambiguity and volatility of the global tariff environment. We believe as a domestic provider of high quality water solutions, we can serve our retail partners and consumers with great value and opportunities to support their health and wellness journey. Each quarter will be a bit unique as we navigate our integration activities, and we continue to see 2025 building into the 3 to 5 percent comparable net sales guidance, largely balanced between volume and price or mix.

David: We are reaffirming our net sales guidance of between 3% to 5% growth on a comparable basis clearly there is uncertainty in the economy and consumer spending activities. In addition to the ongoing ambiguity and volatility of the global tariff environment.

David: We believe as a domestic provider of high quality water solutions, we can serve our retail partners and consumers with great value and opportunity to support their health and wellness journeys each.

David: Each quarter will be a bit unique as we navigate our integration activities and we continue to see 2025 building into the 3% to 5% comparable net sales guidance largely balanced between volume and price or mix.

David Hass: While many companies in today's environment are stepping back to review and adjust their cost structures and drive efficiency. Primo Brands remains in a strong position to quickly extract and leverage the benefits of our mergers. We began to immediately deploy our integration playbook at the time of our merger to remove duplicative costs and seek a leaner cost This also allows us to review all aspects of the businesses we are combining without a lot of risks to our offerings as we're largely driving efficiency and streamlining into a single company operating We will continue to prioritize executing our costs and synergy capture in 2025 to drive our profitability and leverage a single production and operations footprint.

David: While many companies in today's environment are stepping back to review and adjust their cost structures and drive efficiencies.

David: Premium brands remain in a strong position to quickly extract and leverage the benefits of our merger.

David: We began to immediately deploy our integration playbook at the time of our merger to remove duplicative costs and seek a leaner cost structure.

David: This also allows us to review all aspects of the businesses. We are combining without a lot of risks to our offerings as we are largely driving efficiency and streamlining into a single company operating structure.

David: We will continue to prioritize executing our cost synergy capture in 2025 to drive our profitability and leverage a single production and operations footprint.

David Hass: Separately, the tariff environment remains escalated compared to prior periods. Our dispenser business remains the primary area of the business impacted by the current tariff environment. This part of our business represents approximately 1% of our annual net sales. We are exploring opportunities with our retail partners to invest in promotional activity to continue our product leadership and ensure it leads to continued water consumption across our large-format retail offerings like Exchange and Refill. These promotional activities are intended to help alleviate any stalls in our supply chain or weeks of on-hand inventory with our retail partners. We are actively working with our retail and online partners to effectively navigate the ongoing environment.

David: Separately, the tariff environment remaining escalated compared to prior periods, our dispenser business remains the primary area of the business impacted by the current tariff environment. This part of our business represents approximately 1% of our annual net sales guidance we are exploring.

David: Flooring opportunities with our retail partners to invest in promotional activity to continue our product leadership.

David: And ensure it leads to continued water consumption across our large format retail offerings like exchange and refill.

David: These promotional activities are intended to help alleviate any installs in our supply chain or weeks of on hand inventory with our retail partners.

David: We are actively working with our retail and online partners to effectively navigate the ongoing environment.

David Hass: As a reminder, the dispenser business has negligible impact on our adjusted EBITDA and free cash flow. As mentioned previously, we remain on track to achieve our in-year and total synergy capsule. We continue to anticipate our full year 2025 Adjusted EBITDA range to be between $1.6 and $1.628 billion, with an implied Adjusted EBITDA margin of approximately 23.1% at the mid-term. Our Adjusted EBITDA guidance includes the capture of $200 million in cost-synergy opportunity in 2025. As previously mentioned, the first quarter's synergy capture represented a strong start to our in-year estimated opportunity. Moving on to capital expenditures, we are maintaining a forecasted run rate growth and maintenance capex budget of approximately 4% of comparable net sale.

David: As a reminder, the dispenser business is negligible impact on our adjusted EBITDA and free cash flow.

David: As mentioned previously we remain on track to achieve our in year in total synergy capture we continue to anticipate our full year 2025, adjusted EBITDA range to be between one six and $1 628 billion with an implied adjusted EBITDA margin of approximately 23, 1% at the midpoint.

David: Our adjusted EBITDA guidance includes the capture of $200 million and cost synergy opportunity in 2025 as previously mentioned the first quarter's synergy capture represented a strong start to our in year estimated opportunity.

David: Moving on to capital expenditures, we are maintaining a forecasted run rate growth and maintenance capex budget of approximately 4% of comparable net sales.

David Hass: plus integration-related CapEx of approximately $200 million in 2025 and $50 million in 2026. The significant integration and volume shifts of the business into a single network and operating system requires some spending in key categories. These include one-time integration CapEx within IT to assist the transition of Primo Water ERP into the legacy Blue Triton systems, water production, and capacity expansion. Additional Large Format Blow Molding Equipment, as well as other Fleet and Cooler Asset Standardization. We believe this will allow future year growth to efficiently move through our vertically integrated and scaled production and distribution.

David: Plus integration related capex of approximately $200 million in 2025 and $50 million in 2026.

David: The significant integration and volume shifts of the business into a single network and operating system requires some spending in key categories.

David: These include onetime integration capex within our key to assist the transition of Primo water ERP and different legacy charging systems water production and capacity expansion additional large format blow molding equipment as well as other fleet and cooler asset standardization.

David: We believe this will allow future year growth to efficiently move through our vertically integrated and scaled production and distribution system our base Capex.

David Hass: are based CapEx. then included $66.7 million Spending in the first quarter, representing approximately 4.1% of our first quarter comparable net sales. Additionally, our integration CapEx was a minimal $2.8 million in the first quarter. We expect our integration-related CapEx to rent sequentially. Related to the Hawkins tornado Robert mentioned earlier, we will have an insurance claim that will fully cover the repair costs to the facility, less the standard policy deductible. We will also have access to business interruption reimbursement that we'll have more details on as the second quarter progresses, and we'll discuss in future quarters as relevant.

David: <unk> included $66 $7 million.

David: <unk> spending in the first quarter, representing approximately four 1% of our first quarter comparable net sales.

David: Additionally, our integration Capex was a minimal $2 8 million in the first quarter, we expect our integration related capex to ramp sequentially.

David: Related to the Hawkins tornado Robert mentioned earlier, we will have an insurance claim that will fully cover the repair costs. So the facility less the standard policy deductible.

David: We will also have access to business interruption reimbursements that will have more details on as the second quarter progresses, and we will discuss in future quarters as relevant the.

David Hass: The impact of the tornado will be felt across April, May, and a portion of June in the southern region as various production lines are brought back into service as the structural areas of the facility are stabilized and repaired. This notably impacts our Ozarka branch. We expect that capital expenditure costs could approach approximately $50 million as the damage to the building structure was significant, but thankfully very limited impact to the actual production equipment. While there might be some slight timing mismatch of capital outflow to fund repairs versus inbound insurance reimbursements, we will track and provide clarity across 2025 and 2026 for these expenses.

David: The impact of the tornado will be felt across April may and a portion of June in the southern region at various production lines are brought back into service as the structural areas of the facility are stabilized and repair this notably impacts our Ozark our brands.

David: We expect the capital expenditure costs could approach approximately $50 million is the damage to the building structure was significant but thankfully very limited impact to the actual production equipment.

David: While there might be some slight timing mismatch of capital outflow to fund repairs versus inbound insurance reimbursements, we will track and provide clarity across 2025 and 2026 for these expenses.

David Hass: Combining these factors with the poor health and cash generation capacity of our business model, we maintain our guidance for the adjusted free cash flow between $790 million and $810 million for 2025. This forecast assumes adding back acquisition and integration. In-year integration only. and now repairs for Hawkins impacted by the tornado, as well as the benefit of after-tasks in your Synergy team.

David: Combining these factors with the poor health and cash generation capacity of our business model, we maintained our guidance for the adjusted free cash flow of between $790 million and $810 million for 2025.

David: This forecast assumes adding back acquisition and integration costs in year integration only capex and now repairs for Hawkins impacted by the tornado as well as the benefit of after tax in your synergy capture.

David Hass: Last week, our board of directors authorized another quarterly dividend of $0.10 per share of Class A common stock, which represents an 11% increase over last year's quarterly dividend rate at Primo Water. In March, our largest shareholder, One Rock Capital, completed a secondary offering of Primo Brands shares. Interest levels in the offering were extremely high and oversubscribed.

David: Last week, our board of directors authorized another quarterly dividend of <unk> 10 per share of class a common stock, which represents an 11% increase over last year's quarterly dividend rate at Primo water.

David: In March our largest shareholder one rock capital completed a secondary offering of Primo brand shares interest levels and the offering were extremely high and oversubscribed the board and management recognize an opportunity to utilize our cash balance to repurchase 4 million shares in connection with the offering for approximately one <unk>.

David Hass: The board and management recognized an opportunity to utilize our cash balance to repurchase four million shares in connection with the offering for approximately $114 million. Future share purchases remain at the discretion of the company on an opportunistic basis.

David: Third $14 million.

David: Future share repurchases remained at the discretion of the company on an opportunistic basis in.

David Hass: In summary, we believe our strong cash flow, available liquidity, improving debt situation, and positive growth outlook are setting up Primo Brands for future success. Our focus in 2025 is about network optimization, cost consolidation, unlocking free cash flow, and adjusted EBITDA.

David: In summary, we believe our strong cash flow available liquidity, improving that situation and positive growth outlook are setting a creamer brands for future success. Our focus in 2025 is about network optimization cost consolidation unlocking free cash flow and adjusted EBITDA with that I will turn the call back over.

Robbert Rietbroek: With that, I will turn the call back over to Robert for any final thoughts. Thanks, David. Looking ahead, we're focused on driving top line growth across our portfolio. Primo Brands is focusing on several key growth areas. First, as a leading branded beverage company with owned or leased water sources and a US-focused customer base, Primo Brands is capitalizing on the growing demand for healthy hydration options. Second, we are striving to enhance brand leadership through meaningful innovation, activation, and partnerships that continue to drive household penetration growth. Third, our expanding services, including direct delivery, exchange programs, and refill stations are redefining convenience for our customers.

David: To Robert for any final thoughts thanks, David.

David: Looking ahead, we're focused on driving topline growth across our portfolio.

David: Primo brands is focusing on several key growth areas.

David: First as a leading branded beverage company was owned or leased water sources and a U S focused customer base premium brands is capitalizing on the growing demand for healthy hydration options.

David: Second we are striving to enhance brand leadership through meaningful innovation activation and partnerships that continue to drive household penetration growth.

David: Third.

David: Our expanding services, including direct delivery exchange programs and refill stations are redefining convenience for our customers.

Robbert Rietbroek: Fourth, by improving operational efficiency, asset utilization, scale, 24-7 manufacturing, channel expansion, and customer service, Primo Brands aims to drive growth and create value. Lastly, Primo Brands is leveraging its extensive distribution network to expand into high-growth and under-penetrated channels such as lodging, casinos, restaurants, schools, hospitals, and convenience stores. Looking ahead, I'm optimistic and confident in our ability to deliver value for stockholders and remain excited about the future of Primo Brands Corporation. Our strong foundation and dedicated team position us well to continue delivering strong results and driving innovation and distribution across our portfolio. We remain focused on enhancing customer experiences, optimizing our network, controlling costs, and leveraging our strength to achieve sustained growth.

David: Fourth by improving operational efficiency asset utilization scale $24, seven manufacturing channel expansion and customer service Primo brands aims to drive growth and create value.

David: Lastly, Primo brands is leveraging its extensive distribution network to expand into high growth in underpenetrated channels, such as lodging casinos restaurants schools hospitals and convenient source.

David: Looking ahead, I'm optimistic and confident in our ability to deliver value for stockholders and remain excited about the future of Primo brands Corporation.

David: Our strong foundation and dedicated team position us well to continue delivering strong results and driving innovation and distribution across our portfolio.

Speaker Change: We remain focused on enhancing customer experiences optimizing our network controlling costs and leveraging our strength to achieve sustained growth with that I will turn the call back to John to take us through Q&A.

Jon Kathol: With that, I will turn the call back to Jon to take us through Q&A. Thanks, Robert. To ensure we can address as many of your questions as possible, please limit your inquiries to one question and one follow-up. If you have additional questions, feel free to rejoin the queue and we will answer as many as time permits.

John: Thanks, Robert to ensure we can address as many of your questions as possible. Please limit your inquiries to one question and one follow up if you have additional questions feel free to rejoin the queue and we will answer as many as time permits operator. Please open the line for questions.

Operator: Operator, please open the line for questions.

Operator: Thank you.

Thank you ladies and gentlemen, we will now begin the question and answer session should you have a question. Please press star followed by one on your Touchtone phone, you'll hear pump that you had has been raised.

Operator: Ladies and gentlemen, we will now begin the question and answer session. Should you have a question, please press star followed by one on your touch tone phone. You will hear a prompt that your hand has been raised. If you would like to remove your hand from the polling process, please press star followed by two. If you're using a speakerphone, please lift the handset before pressing any keys. One moment for your first question.

John: To remove your plan from the polling process. Please press star followed by two.

John: If youre using a speaker phone please lift the handset before pressing any keys one.

John: One moment for your first question.

Jon Andersen: Your first question comes from Jon Andersen with William Blair. Please go ahead. Good morning, everybody. Thanks for the question. I'd like to start by asking about the performance of your premium brands. Saratoga, and Mountain Valley. And also, if you could provide a little bit more color around the strong growth in the quarter, I think you mentioned nearly 50% growth, and your plans for those brands going forward and performance expectations. Thanks. Yeah, thanks, Jon. I'm very pleased with the performance of Mountain Valley and Saratoga, and you're right. The quarter delivered 49% sales growth for those two brands, and that was primarily driven by volume-based increases.

Speaker Change: Your first question comes from Jon Andersen with William Blair. Please go ahead.

Jon Andersen: Good morning, everybody. Thanks for the question.

Jon Andersen: I'd like to start by asking about the performance of your premium brands.

Speaker Change: Saratoga and Mountain Valley.

Speaker Change: And also if you could provide a little bit more color around the strong growth in the quarter. I think you mentioned nearly 50% growth and your plans for those brands going forward and performance expectations.

Speaker Change: Okay.

John: Yes, Thanks John.

John: I'm very pleased with the performance of <unk>.

John: Mountain Valley, Ed Saratoga, and Youre right the quarter delivered 49% sales growth for those two brands and that was primarily driven by volume based increases.

Robbert Rietbroek: Now, Mountain Valley grew just under 42%, 41.8% in the quarter, and actually passed $50 million in Q1 net sales. That obviously is a combination of wholesale pricing and direct-to-customer pricing. And Saratoga grew 68.6% of the past 20 million quarter one net sales. You know, both of these brands are now available for our direct delivery customers. And we launched PET for both brands into Walmart. So that's a brand new distribution in the largest retailer in the U.S. with a six-pack execution for both brands. So we're very excited about that new distribution. From a brand standpoint, Saratoga had a really big quarter.

John: Well Mountain Valley grew just under 42% 41, 8% in the quarter and actually passed $50 million in Q1 net sales that obviously is a combination of wholesale pricing and direct to customer pricing.

John: Saratoga grew 68, 6% of the past 20 million quarter, one net sales.

John: Both of these brands are now available for our direct delivery customers and we launched pega for both brands into Walmart, So thats a brand new distribution in the largest retailer in the U S with a six pack execution for both brands. So we're very excited about that new distribute.

John: And from a brand standpoint.

Speaker Change: Eric Toga had a really big quarter it was the.

Robbert Rietbroek: It was the official Water of the Golden Globes, and we had a strong presence at the event and around the event. And we also had a viral moment with an influencer who had over 1 billion views. So Saratoga may very well be the hottest brand in America right now. Now, the future of Saratoga will really be all about continued gaining distribution with a very strong focus on not only on retail, but away from home. We really believe the brand has a role to play in restaurants and nightclubs and other away from home channels. And Mountain Valley, you know, just to recap, we had added additional spring capacity in 2023-24.

Speaker Change: Official water of the Golden Globe, and we had a strong presence at the event and around these events and we also had a firewall moment with an influencer who had over 1 billion views. So Saratoga may very well be the hottest brand in America right now.

Speaker Change: Now.

Speaker Change: The future Saratoga will really be all about continued gaining distribution and with a very strong focus on not only in retail but away from home. We really believe the brand has a role to play in our restaurants and nightclubs and other away from home channels.

Speaker Change: And Mountain Valley, just to recap we had added additional sprint capacity in $2023 24, we added glass bottling capacity and we expanded our.

Robbert Rietbroek: We added glass bottling capacity, and we expanded our inventory of glass bottles. And that brand continues to go very well. And I'm happy to say that tonight, we are going to be present at the Academy of Country Music Awards in Dallas at the official Water of this evening's event. So very pleased. Forty-nine percent net sales growth combined. Great quarter with great plans ahead. It's terrific.

Speaker Change: Our inventory of glass bottles and that brand continues to go very well.

Speaker Change: And I'm happy to say that Tonight, we are going to be present at the academy of country Music Awards in Dallas as the official water of this evening's event. So very pleased 49% net sales growth combined.

Speaker Change: Great quarter with Great plans ahead.

Speaker Change: That's terrific.

Robbert Rietbroek: On the viral moment... I'm assuming, I think it was Taylor Hall, I've seen it myself several times. That was not something that was sponsored, that was just kind of organic. Correct, yeah, Ashton Hall is his name, he's a fitness influencer from Miami and he created that all by himself and obviously we have a good relationship with Mr. Hall but it was completely organic and it just means that the brand is set up for success. Absolutely.

Speaker Change: Zero moment.

Speaker Change: I'm, assuming I think.

Speaker Change: It was Taylor Hall I've seen it myself several times that was not something that was sponsored that was just kind of organic.

Speaker Change: Correct, Yes, Ashley Hall is named Lisa fitness Influencer from Miami and he created at all by himself and obviously we have.

Speaker Change: We have a good relationship with Mr Hall, but it wasn't it was completely organic.

Speaker Change: It just means that the brand is set up for success.

Robbert Rietbroek: Second question, the follow up is about just EBITDA. There's so many kind of puts and takes as you kind of integrate post merger, you know, EBITDA came in above consensus expectations, our expectation. I'm wondering if maybe you could parse out, you know, the main elements of the BEAT, you know, relative to maybe your internal plan and relative to consensus expectations. Thank you. Yeah, you know, EBITDA was $341.5 million, up 12.1%, as we reported, and margins were very strong at 21.2%, up 170 basis points per share. And it was mostly driven through volume growth, customer demand, and effective cost control.

Speaker Change: Absolutely second question. The follow up is about just EBITDA. There's so many kind of puts and takes as you kind of integrate.

Speaker Change: Post merger.

Speaker Change: EBITDA came in above.

Speaker Change: Consensus expectations, our expectation I'm wondering if maybe you could.

Speaker Change: Parse out.

Speaker Change: The main elements of the beat.

Speaker Change: Relative to maybe your internal plan relative to consensus expectations. Thank you.

Speaker Change: Yes.

Speaker Change: EBITDA was three.

Speaker Change: <unk> $341 5 million up 12, 1% as we reported in margins were very strong at 21, 2% up 170 basis points per share got it was mostly driven through volume growth customer demand and effective cost control, but let me pass to David to give some more color.

David Hass: But let me pass it to David to give some more color.

David Hass: Yeah, thanks, Jon, for the question. So the $20 million of integration capture would have been right on plan. And that built where March, we exited the quarter with some strength there of where we were pulling costs out of the business. And as we've said before, so that would leave obviously, the primary increase to sort of the quarter in the base business.

David: Yes, Thanks, John for the question, so the $20 million of integration capture would've been right on plan.

Speaker Change: <unk> built were March we exited the quarter with some strength there of where we were pulling cost out of the business and as we've said before so that would leave obviously the primary increase to sort of the quarter and the base business and as we've said before this is really putting two businesses together.

David Hass: And as we've said before, you know, this is really putting two businesses together, where in many cities, a lot of the operational infrastructure, production infrastructure, in some cases, stares at each other, and would be inefficient in a separate company format. And so for the base business to be ahead of plan is very helpful, where the efficiencies and leveraging the infrastructure was working in the independent separate companies before we started integrating them. And so that's where I would say the primary benefit in the quarter was, again, we remain very pleased with where we are on the synergy capture in the quarter.

Speaker Change: In many cities a lot of the operational infrastructure production infrastructure in some cases staring at each other and would be inefficient and a separate company format and so for US the base business to be ahead of plan is very helpful, where the efficiencies and leveraging the infrastructure was working in the independent separate companies.

Speaker Change: Before we started integrating them and so that's where I would say the primary benefit in the quarter was and again, we remain very pleased with where we are on the synergy capture in the quarter and that will continue to build throughout the year, but as mentioned that $20 million really gets at a very impressive sort of annualized outcome and toward.

David Hass: And that will continue to build throughout the year. But as mentioned, that $20 million really gets at a very impressive sort of annualized outcome in towards the $300 million total capture. Great. Thanks so much. Good luck.

Speaker Change: The 300 million total captured.

Speaker Change: Great. Thanks, so much good luck.

Nick Modi: Your next question comes from Nick Modi with RBC Capital Markets. Please go ahead. Good morning everyone. Excuse me. Just a quick clarification, Robert, in your prepared remarks you were talking about shelf recess, distribution gain. So it seemed that you were inferring the top line will accelerate as the year progresses. Just so you can clarify that. And then the question I wanted to ask is just around price mix. I mean, obviously the top line was very strong, heavily volume driven. I'm getting a lot of questions about, you know, like what's going on with price mix? Why was it, you know, barely up?

Nik Modi: Your next question comes from Nik Modi with RBC capital markets. Please go ahead.

Nik Modi: Yes, good morning, everyone excuse me.

Speaker Change: Just a quick clarification Robert in your prepared remarks you.

Nik Modi: Were talking about shelf resets distribution gains.

Speaker Change: Is that where I'm sorry.

Speaker Change: Hotline will accelerate as the year progresses. So if you can clarify that.

Speaker Change: And the question I wanted to ask was just around price mix I mean, obviously the top line was very strong I believe volume driven.

Speaker Change: And a lot of questions about what's going on with <unk>.

Nick Modi: You know, so maybe you can give some context around, you know, what you're seeing in a competitive environment. Are there any noise or timing issues that caused the price mix to be almost flat?

Speaker Change: Barely up so maybe you can give some context around what you are seeing the competitive environment are there any noise or timing issues that caused the price must be almost flat.

Robbert Rietbroek: Yeah, Nick, I'll start with the second part if that's okay with you. Thanks for the question. So let's talk about price mix for a second. So the, you know, the quarter was primarily driven by volume and there was very little pricing in the quarter because we really wanted to retain the right consumer value equation and remain competitive in this macro environment where we know that consumers are challenged. That actually allowed us to continue to contribute to the growth of the category. So if you look at Cercana, the category grew 2% in dollar scans, 2.1, and 3% in volume, 3.4 actually specifically, for the first quarter.

Nick: Yes, Nick I'll start with the second part if that's okay with you. Thanks for the question.

Speaker Change: <unk>.

Speaker Change: So let's talk about price mix for a second so the.

Speaker Change: The quarter was primarily driven by volume and there was very little pricing in the quarter, because we really wanted to retain the right consumer value equation and remain competitive in this macro environment, where we know that consumers are challenged.

Speaker Change: That actually allowed us to continue to contribute to the growth.

Speaker Change: The category. So if you look at circa.

Speaker Change: The category grew 2% in dollars scans to one and 3% in volume three four actually specifically for the first quarter.

Robbert Rietbroek: Our scans were up 3.8% in dollars. So, you know, we expanded market share by 30 basis points, and we were the only large branded beverage company that actually was able to grow share in the quarter as a result of that. So we feel very good about the balance of a mix in pricing this first quarter, also because we were able to expand our EBITDA margin without good pricing due to cost control, synergy delivery, and just very disciplined spending.

Speaker Change: Our scans were up three 8% in dollars. So we expanded market share by 30 basis points and we were the only large branded beverage company that actually was able to grow share in the quarter. As a result of that so we feel very good about the balance of.

Speaker Change: Mix and pricing as first quarter also because we were able to expand our EBITDA margin without that pricing due to cost control synergy delivery and just very disciplined spending.

Robbert Rietbroek: Now, when I look at the shelf resets, so we have very broad distribution. We're available in about 200,000 retail outlets. We have over 3 million points of distribution, and we're adding over 5% incremental points of distribution in the April through August reset across the trade. And I want to just point out a few very big ones. The big ones that we are focused on are massing grocery. We have additional distribution on Mountain Valley and Saratoga coming through, and also Regional Spring and Pure Life as the brands continue to grow. We are also focused on adding Regional Spring water to our exchange racks.

Speaker Change: Now when I look at the shelf resets. So we have very broad distribution were available in about 200000 retail outlets, we have over 3 million points of distribution and we're adding over 5% incremental points of distribution in the April through August reset across the tray.

Speaker Change: And I wanted to just point out a few very big ones. The big ones that we are focused on our mass and grocery.

Speaker Change: We have additional distribution on a.

Speaker Change: Mountain Valley in Saratoga coming through and also regional spring and pure life as the as the brands continue to grow. We are also focused on adding regional spring water to our exchange <unk> that is going to be a slow build but we are currently in testing in a number of Walmart stores, where we have added a spread right next.

Robbert Rietbroek: That is going to be a slow build, but we are currently in testing in a number of Walmart stores where we have added a spring right next to Primo Water in the exchange racks. So not a replacement, but an addition. Now, for the balance of the year, obviously, we have sales forecast at 3% to 5% organic, and we continue to build a platform for sustainable growth. We work with retailers to share in-store and earn new points of distribution. You have to earn that, and we are earning that. We want to improve our customer touchpoints to enable frictionless customer experience.

Speaker Change: To Primo water and the exchange rates and not a replacement book, but in addition.

Speaker Change: For the balance of the year.

Obviously.

Speaker Change: We have sales forecast at 3% to 5% organic.

Speaker Change: And we continue to build a platform for sustainable.

Speaker Change: Growth, we work with retailers to make sure our in store and earn new points of distribution you have to earn that and we are running that.

Speaker Change: We want to improve our customer touch points to enable frictionless customer experience. So with regards to the mix of volume and price what I would say is that.

Robbert Rietbroek: So with regards to the mix of volume and price, what I would say is that we will have quarters where we will be higher in pricing, and some quarters will be higher in volume. And we will be obviously looking at the balance of the year.

Speaker Change: We will have.

Speaker Change: Cortisol rule will be higher pricing.

Speaker Change: Some quarters will be higher in volume and.

Speaker Change: And we will be.

Speaker Change: We see.

David Hass: But let me pass it to David to talk a bit about price mix. Thanks, Nick. So, at this point, you know, in the quarter, any of the pricing contributions would have just been natural, independent business decisions coming into the quarter, especially if it was in the retailer environment. Sometimes those conversations take longer. So, you can expect some price mix contribution as we look in things like last mile, where we have direct delivery to our customer base in the commercial or residential space. You can see or expect some harmonization that will take place in sort of balance of your activities.

Speaker Change: Looking at the balance of the year, but let me pass it to David to talk a bit about price mix.

David: Thanks, Nik so at this point in the quarter.

David: Any of the pricing contributions would have just been natural independent business decisions coming into the quarter, especially if it was in the retailer environment, sometimes those conversations take longer. So you can expect some price mix contribution as we look in things like last mile.

David: Where we have direct delivery to our customer base in the commercial and residential space you can see.

David: We expect some harmonization that will take place in sort of a balance of your activities. So again I think our goal for the year was a balanced approach of about 50 50 in volume versus price mix each quarter will be slightly unique.

David Hass: So, again, I think our goal for the year was a balanced approach of about 50-50 in volume versus price mix. Each quarter will be slightly unique, but we will begin in the outer portions of the year to sort of harmonize that pricing in last mile, which may contribute a little bit more in those particular quarters. While we might be and remain mindful of what happens in retail, where the consumer might continue to expect sort of a value equation. Great. Thanks.

David: We will begin in the outer portions of the year, just sort of harmonize that pricing and last mile which may contribute a little bit more in those particular quarters, while we might be and remain mindful of what happens in retail.

David: Where the consumer might continue to expect sort of a value equation.

Nick Modi: I'll pass it on.

Speaker Change: Great. Thanks, I'll pass it on.

Andrea Teixeira: Your next question comes from Andrea Teixeira with J.P. Morgan. Please go ahead. Thank you. Good morning.

Speaker Change: Your next question comes from Andrea Teixeira with Jpmorgan. Please go ahead.

Andrea Teixeira: Thank you good morning.

Andrea Teixeira: I was hoping if you can comment on the bridge from the soft organic growth in the quarter at 3% to the midpoint of your range at 4% for the year for both the retail business and the HOD. I understand there has been some shifts in promotions for Poland Springs at some retailers and some closed branches and routes as part of your synergies. I understand that is part of obviously delivering the $20 million and $200 million for the full year. So is there any, and you just, Robert, you just spoke to that right now, even revenue synergies in some of the racks.

Andrea Teixeira: I was hoping if you can comment on the bridge from the softer organic growth in the quarter and 3% at the midpoint of your range at four for the year for both the retailer business into H O D. I understand there has been some shift same promotions for Palm Springs is that some retailers and some closed branches and routes.

Andrea Teixeira: That's part of your synergies I understand that's part of obviously delivering.

Andrea Teixeira: The 20 million and she'll kind of for the full year. So is there any and you just but you just spoke to that right now even revenue synergies with some of the racks I've seen myself and some other exchanges like bond spring as opposed to the Primo.

Andrea Teixeira: I have seen myself in some of the exchanges like Poland Springs as opposed to the Primo and seeing that and opportunities.

Speaker Change: And seeing that and an opportunity to solve was hoping to see if there are any anomalies that you want to point out that gives you the confidence to to basically reiterated the guidance today. Thank you.

Robbert Rietbroek: So I was hoping to see if there are any anomalies that you want to point out that gives you the confidence to basically reiterate the guidance today. Thank you. Yeah, good morning, Andrea. Thank you for the question. So the normalized organic net sales growth, as we correct for leap year, which had the extra day last year, is 4.2% for the quarter. So that sits right in the middle of the three to five guidance. And what gives me a lot of confidence to your earlier point, and you called it out correctly, is that last year, Easter promotions fell in the last week of March, and they were pushed into April this year.

Andrea Teixeira: Yes.

Speaker Change: Yes, good morning, and thank you for the question.

Andrea Teixeira: So the.

Speaker Change: Normalized.

Speaker Change: Organic net sales growth as we correct for leap year, which had the extra day last year is four 2% for the quarter. So that fits right in the middle of the three to five guidance and what gives me a lot of confidence to your earlier point and you called out correctly is that.

Speaker Change: Last year Easter promotions fell in the last week of March and they were pushed into April this year and those are particularly big events for our bone spring, Brian Brendon in North East So with the correction of leap here were at four two and that doesn't even include that overlap. So that gives me a lot of confidence.

Robbert Rietbroek: And those are particularly big events for our Poland Spring brand in the Northeast. So with the correction of leap year, we're at 4.2. And that doesn't even include that overlap. So that gives me a lot of confidence. With regards to the additional revenue synergy plans, you know, obviously, now offering Mountain Valley and Saratoga on our direct to customer delivery trucks. And we are in testing in adding regional spring water to the exchange racks in over 10 Walmart stores, with obviously a plan to expand that if it's successful, we believe it is successful. So that's those are some examples of revenue synergies that will start to come into the sales.

Speaker Change: With regards to.

Speaker Change: The additional revenue synergy plans, we are obviously now offering mountain valley in Saratoga on our direct to customer delivery trucks, and we are in testing and adding regional spring water to the exchange rates in over 10, Walmart stores with obviously.

Speaker Change: <unk> plans to expand that if it's successful we believe it is successful.

So that's those are some examples of revenue synergies that will start to.

Speaker Change: Coming to the sales.

Robbert Rietbroek: The bigger part is the distribution build that we're going to see this year. That is a critical component of our growth plan, the additional more than 5% points of distribution across mass and grocery that we're getting. That's helpful.

Speaker Change: The bigger part is the distribution builds that were going to see this year that is critical.

Speaker Change: Critical component of our growth plan, the additional more than 5% points of distribution across mass and grocery that we're getting.

Andrea Teixeira: One of the things that obviously, Robert, I mean, to investors, I mean, your guidance does not, was contemplated in the leap year, and it's not, it's not correcting to that. I'm just want to make sure that that extra day is not going to come back by the end of the year, one.

Speaker Change: That's helpful. One of the things that obviously are Robert timing to.

Speaker Change: I mean your guidance does not contemplate in the leap year and it's not it's not correcting to that I'm just wanted to make sure that gets that that extra day, it's not going to come back by the end of the year.

Andrea Teixeira: And then another follow-up is when you think about your portfolio, right, and think about purified against, in this scenario, against spring water, can you comment on pure life, if you've seen any kind of weakness as consumers at that entry-level price point are feeling the pinch, or you're seeing across the board a similar performance on the entry-level against, like, higher-level with pull and spring, and of course, we also saw the continued growth in the premium. But I would say, like, more entry-level against private label, how you feel about those vis-a-vis your offering and private label. Yeah, Andre, our Purify business did very well this quarter.

Speaker Change: One and then another follow up is when you think about your portfolio right and think about pure fight against that.

Speaker Change: This scenario I guess sprinkle water can you comment on pure life.

Speaker Change: <unk>.

Speaker Change: Any kind of weakness that consumers that that entry level price point.

Speaker Change: Are feeling the pinch or youre seeing across the board a similar performance on the entry level I guess like hi.

Speaker Change: Hi, Paul its spring and of course, we all saw the container to put all the premium, but I would say like more entry level against private label, how you feel about those.

Speaker Change: Ah, you're offering and private label.

Speaker Change: Galbraith, our purified business did very well this quarter was up three 5% of net sales. That's a combination of obviously primo water branded primo water and pure life.

Robbert Rietbroek: It was up 3.5% in net sales. That's a combination of, obviously, Primo Water, the brand of Primo Water and Pure Life. We are really focused on maintaining competitive pricing on Pure Life to offer the consumer the right value equation. That means that we are carefully monitoring competitive pricing and making sure that for the balance of year, we will have the right amount of display and feature promotions on this business in partnership with our key grocers and key mass channels. When you look at Pure Life, it is truly our branded proposition that will allow us to continue to grow, share in the Purified segment.

Speaker Change: We are really focused on maintaining competitive pricing on pure lives to offer the consumer the right value equation.

Speaker Change: That means that we are carefully monitoring competitive pricing and making sure that for the balance of the year. We will have the right amount of display feature promotions on this business in partnership with our.

Speaker Change: Key grocers in key mass channels.

Speaker Change: When you look at pure life. It is truly a branded proposition that will allow us to continue to grow share in.

Speaker Change: In the purified segments.

Robbert Rietbroek: We're also offering Pure Life in exchange in quite a few stores and we will be evaluating the strength of that brand across those channels as well. But we actually are very confident in the strength of our purified business and continue to see growth there. Thank you.

Speaker Change: We're also.

Speaker Change: <unk> pure life and exchange in quite a few stores and we will be evaluating.

Speaker Change: The strength of that brand across those channels as well.

Speaker Change: We actually are very confident in the strength of our purified business and continued to see growth there.

Thank you and just a clarification on the on the leap year. So your guidance is.

Andrea Teixeira: And just a clarification on the leap year. So your guidance embeds the leap year. So in other words, you're not going to just say, OK, we didn't read the four, we read the three. But with the leap year effect, it will be adjusted to round up to four. I'm assuming that's, you know, that's not the case. That's great Andrea. Okay, perfect. Thank you very much.

Speaker Change: <unk> so in other words youre not getting onshore since say, okay. We did unveil this far out.

Speaker Change: The three but with the with the leap year in fact, it will be adjusted to round up to four I'm, assuming that's you know that's not the case.

Andrew: That's correct Andrew.

Andrea Teixeira: I'll pass it on and congrats.

Speaker Change: Okay perfect. Thank you very much I'll pass it on and congrats.

Andrew: Okay.

Andrea Teixeira: Your next question comes from Derek Lessard with TD Cowen. Please go ahead. Yeah, good morning, everybody. And congrats on another strong quarter. Robert, I just wanted to maybe hit you up on your prepared remarks where you said you expected the 2025 net sales to ramp up through the year as new distribution and resets are implemented. Can you just maybe add some color around that? Yeah, we obviously have already discussed the impact of the shift of Easter into the second quarter. So that was an overlap opportunity that benefits Q2, but took a bit of momentum away from the first quarter because of the Easter in March last year, Easter in April this year.

Speaker Change: Your next question comes from Derek Lessard with TD Cowen. Please go ahead.

Derek Lessard: Yes, good morning, everybody.

Speaker Change: On another strong quarter.

Speaker Change: Robert I just wanted to maybe hit you up on your prepared remarks, where you said you expected.

Speaker Change: 2025, net sales to ramp up through the year as new distribution in the resets are implemented can you just maybe add some color around that.

Speaker Change: Yes, we obviously have already discussed the impact of the shift of Easter into the second quarter. So.

Speaker Change: That was a.

Speaker Change: And overlap opportunity that benefits Q2, but took a bit of.

Speaker Change: Moment momentum away from the first quarter because of the Easter in March last year Easter in April this year.

Derek Lessard: With the balance of the year, it will be a combination of, one, incremental exchange distribution. We are already up for sharego, and we have great plans to expand our exchange business. Two, price promotions and feature display activity on our both regional spring water. and Purified Business. And three, there will be benefits from incremental distribution. As I said, over 5% of total distribution points incremental. We were 3 million in the base, and we're going to add 5% to those points of distribution. And that's a combination of K-SPAC on Purified on Spring, and then 6-PAC on Saratoga and Mountain Valley.

Speaker Change: With the balance of the year it will be a combination of one <unk>.

Speaker Change: Incremental exchange distribution, we are already up for sure go and we have great plans to expand our exchange business too.

Speaker Change: Price promotions of feature and display activity on <unk>.

Speaker Change: Both regional spring water.

Speaker Change: And purified business and three there will be benefits from incremental distribution.

As I've said over 5% of total distribution points incremental we were three 3 million in the base and we're going to add 5% to those points of distribution and that's a combination of.

Speaker Change: Case back on purified on spring.

Speaker Change: And then six back on.

Speaker Change: Saratoga Mountain Valley.

Derek Lessard: In that combination, together with the focus on customer acquisition in the direct-to-customer channel and the customer retention plans through improved customer service, improvements in our apps and water.com website, and a relentless focus on customer service through the call center and delivery, we build the balance of the year. Okay, so I guess then my follow up question to that, it sounds like given that, that accelerating sales growth, and then I think, David, you mentioned that the base business is ahead of plan. I'm just curious how you square away that with keeping your guidance flat. Yeah, Derek.

Speaker Change: That combination.

Speaker Change: And together with the <unk>.

Speaker Change: Focus on customer acquisition, and the direct to customer channel and the customer retention plans true.

Speaker Change: Improved customer service improvements and our apps and wanted us com website.

Speaker Change: And our relentless focus on customer service call center and delivery.

Speaker Change: We built the balance of the year.

Speaker Change: Okay.

Speaker Change: So I guess my follow up question to that it sounds like given that that accelerating sales growth and then I think David you mentioned that the base business is ahead of plan.

Speaker Change: I'm just curious how you square away.

Speaker Change: That works with keeping with keeping your guidance flat.

Robbert Rietbroek: So part of it is just obviously we're sitting in a macro environment that changes by the minute. But what we also are looking at is this dispenser business under the tariff, and I made prepared remarks on that. We're not worried about its velocity with consumer, but we might want to work with retail partners in promotional activities as a lot of other electronic or imported products are if you just walk an average Walmart these days. So we are looking to accelerate promotional activities with our retail partners that allow, again, remember, we make revenue when we sell the dispenser into the channel, but we want to help our retail partners move velocity off their shelves.

Speaker Change: Yes, Derrick so part of it is just obviously, we're sitting in a macro environment that changes by the minute.

Speaker Change: But what we also are looking at is this dispenser business under the tariff and I made prepared remarks on that we're not worried about this velocity with the consumer but we want to work with retail partners and promotional activities as a lot of other electronic or imported products are if you just walk in average wall.

Speaker Change: These days.

Speaker Change: So we are looking to accelerate promotional activities with our retail partners that allow again remember we make revenue when we sell the dispenser into the channel, but we want to help our retail partners new velocity off their shelves and when that occurs that accelerates our exchange business. It has ripple effects into our refill business.

Derek Lessard: And when that occurs, that accelerates our exchange business. It has ripple effects into our retail business and sort of ancillary halo effects into our direct delivery business. And so part of that might just be a reserve to sort of really look at where we might need to lean in in certain cases to the business. And if that's the case, that actually helps set us up for strong momentum as we head into 26, or if obviously the tariff environment changes, which it seems to have done multiple times in the last month. Okay, thank you.

Speaker Change: And sort of ancillary halo effects into our direct delivery business and so part of that might just be a reserve to sort of really look at where we might need to lean in in certain cases to the business.

Speaker Change: And if that's the case that actually helps set us up for strong momentum as we head into 'twenty six or if obviously the tariff environment changes, which it seems to have done multiple times in the last month.

Speaker Change: Okay. Thank you that's helpful.

Derek Lessard: That's all.

Daniel Moore: Your next question comes from Daniel Moore at CJS Securities. Please go ahead.

Daniel Moore: Your next question comes from Daniel Moore CJS Securities. Please go ahead.

Daniel Moore: Good morning, Robert. Morning, David. Thanks for taking the questions. I wanted to just maybe pull on the string of cadence of revenue growth year over year, you know, particularly starting with Q2. On the one hand, you have the Easter timing benefit that you called out on the other temporary disruptions at Hawkins. So your comments seem to imply faster growth in Q2, but just wanted to clarify that. kind of cadence for the balance. Yeah, Dan. So, Q1 would have traditionally, like Q4, been sort of our shoulder seasons, if you will, with Q2 and Q3 being a larger contribution of both standalone companies and, obviously, the combined business.

Speaker Change: Good morning, Robert Good morning, David Thanks for taking the questions.

Speaker Change: Wanted to just maybe pull on the string of the cadence of revenue growth year over year.

Speaker Change: Particularly starting with Q2 on the one hand, you have the Easter timing benefit that you called out on the other temporary disruptions at Hawkins so.

Speaker Change: Your comments seem to imply faster growth in Q2, but just wanted to clarify that and then you know kind.

Speaker Change: Cadence for the balance of the year.

Dan: Yes, Dan.

Dan: Q1 would have traditionally like Q4 been sort of our shoulder seasons. If you will with Q2 and three being a larger contribution of both standalone companies and obviously the combined business.

Robbert Rietbroek: So, as we ramp into Q2 and Q3, you should see sort of some nice growth there. Again, we're sticking with annual guide here. Obviously, the macro environment in our original position is to keep that at an annual level as we work through and make sure we have efficiencies on our synergy capture. And so, again, the business will build as you go into Q2 and Q3. And, you know, even though Q4, from a weighting standpoint, is lower than Q2 and Q3, that's really where we expect a lot of the harmonization of pricing and other builds on our synergy capture to take place that allows that any efficiencies and price mix to sort of flow through the P&L very efficiently.

Dan: So as we ramp into Q2 and three you should see some nice growth. There again, we're sticking with annual guide here, obviously, the macro environment and our original position as to.

Dan: To keep that at an annual level as we work through and make sure we have timing and efficiencies on our synergy capture.

Dan: And so again the business will build as you go into Q2, and three and even though Q4 from a weighting standpoint is lower than Q2, and three that's really where we would expect a lot of the harmonization of pricing and other builds on our synergy capture to take place that allows that any efficiencies in price mix.

Dan: To sort of flow through the P&L very efficiently. So I think that's kind of the best sort of providing from that standpoint on cadence.

Robbert Rietbroek: So, I think that's kind of the best we're sort of providing from that standpoint on cadence.

Daniel Moore: Now that's helpful. And, you know, obviously we can build it that free cash flow and, you know, kind of right on target with adjusted free cash flow. Just wondering, you know, over the next couple of quarters where you see leverage kind of peaking out and maybe talk to the balance or the cadence of. as we look out of the next. again. Sure. So certainly, you know, when we spoke at it yesterday, we provided some guidance. We'd like to take about a half a turn out of leverage. That contemplated, you know, the anticipation of maybe One Rock doing a deal, which we obviously executed in March.

Dan: That's helpful.

Dan: And you know obviously, we can build that.

Dan: Free cash flow and kind of right on target with adjusted free cash flow.

Dan: Just wondering if over the next couple of quarters, where you see leverage kind of peaking out.

Dan: And maybe talk to the balance or the cadence of potential acceleration or acceleration of deleveraging.

Dan: As we look out over the next 2468 quarters. Thanks again sure.

Dan: Certainly when we spoke at Investor Day, we provided some guidance, we'd like to take about a half a turn out of leverage.

Dan: That contemplated.

Dan: The anticipation of maybe one rock.

Dan: Doing a deal, which we obviously executed in March.

David Hass: And so, again, we have ample confidence in our ability to pull about a half a turn out of the business. We spent about $114 million of cash. As you can expect, our adjusted free cash flow builds throughout the year. And that's really a case of those middle two quarters being a high contribution to overall, you know, sort of cash build in the company. And so, again, when we look at it, Q1 was right on pace for CapEx spend. Actually, Q1's adjusted free cash flow would have been a little higher, but we did the debt refinancing, which actually accelerated some interest costs.

Dan: So again, we have ample confidence in our ability to pull about a half a turn out of the business. We spent about $114 million of cash.

Dan: As you can expect our adjusted free cash flow builds throughout the year.

Dan: That's really a case of the middle two quarters being a high contribution to overall.

Dan: Sort of cash build in the company.

Dan: And so again when we look at it Q1 was right on pace for Capex spend action.

Dan: Actually Q1's, adjusted free cash flow would have been a little higher but we did the debt refinancing, which actually accelerated some interest costs.

David Hass: That won't occur now in Q2. So you'll start to see that flighting sort of normalize out. But again, we remain very confident in where that builds toward the $800 million in our guide midpoint for that. And, again, expecting our CapEx to sort of be as planned. Very good.

Dan: That won't occur now in Q2, and so you'll start to see that flattening sort of normalize out but again, we remain very confident in where that builds towards the $800 million in our guide midpoint for that and again expecting our capex to sort of be as planned.

Dan: Very good I appreciate the color.

Daniel Moore: Appreciate the call.

Andrew Strelzick: Your next question comes from Andrew Strelzick with BMO. Please go ahead. Hey, good morning. Thanks for taking the questions.

Speaker Change: Your next question comes from Andrew <unk> with BMO. Please go ahead.

Andrew: Hey, good morning, Thanks for taking my questions.

Andrew Strelzick: My first one I wanted to ask about the the HRD business or the non retail business, and how you think about the durability of that business in a tighter consumer spending environment, we obviously don't get a lot of visibility in the investment community to that piece of the business. So just would be great to hear what you're seeing in that channel. If you have any color on, you know, retention or churn or anything like that would be super helpful. Yeah, thanks, Andrew. So, a couple of aspects that we're really excited about is, first, our website efficiency, as expected, is improving because, obviously, we are not having dollars compete necessarily for eyeballs on different sites.

Andrew: My first one I wanted to ask you about the <unk> business or the non retail business and how you think about the durability of that business in a tighter consumer spending environment. We obviously you don't get a lot of visibility.

Andrew: <unk> and the investment community that that piece of the business. So just would be great to hear what you're seeing in that channel. If you have any color on retention or churn or anything like that.

Andrew: Would be super helpful.

Speaker Change: Yes, thanks, Andrew So a couple of aspects that we're really excited about his first or.

Speaker Change: Our website efficiency as expected is improving because obviously we are not.

Speaker Change: Not having dollars compete necessarily for eyeballs on different sites.

Robbert Rietbroek: We are going through consolidation of web platforms, apps, and, obviously, as Robert mentioned, we've started our waves of branch consolidation. The team remains in a good spot with regard to gross additions or the attractiveness of people coming to the category. On a net basis from customer accounts, we remain in a good position. We understand, obviously, perception of the macro environment. We've really not seen any sort of slippage. We have, I can't remember the exact basis point, but an increase slightly in retention as the combined businesses come together. So, we feel like it's in really good shape, and as Robert mentioned, the premium side of the business is not just growing because of retail.

Speaker Change: We are going through consolidation of web platforms apps and obviously as Robert mentioned, we have started our ways of branch consolidation.

Speaker Change: The team remains in a good spot with regard to gross additions or the attractiveness of people coming to the category.

Speaker Change: On a net basis from customer accounts, we remain in a good position.

Speaker Change: We understand obviously perception of the macro environment, we've really not seen any sort of slippage we have.

Speaker Change: I can't remember the exact basis point, but an increased slightly in retention as the combined businesses come together. So we feel like it's in really good shape and as Robert mentioned.

Speaker Change: On the premium side of the business is not just growing because of retail the off route Mountain Valley distribution. There. It continues to thrive. So we look again its a very good opportunity and we're just beginning the spring brand consolidation, where legacy Primo water customers will have access to case.

David Hass: The off-route Mountain Valley distribution there, it continues to thrive. So, we look like, again, it's a very good opportunity, and we're just beginning the spring brand consolidation where legacy Primo Water customers will have access to cases and large format bottles of more popular regional springs that would have been a part of the Blue Trident system. So, again, we feel that the efficiencies that the exchange density provides to that route truck as well as the customer density that's just beginning because of the branch consolidation is really a great start to the year.

Speaker Change: <unk> and large format bottles of more popular regional springs that would've been a part of the blue tracking system. So again, we feel that the efficiencies that the exchange density provides to that Ralph truck as well as the customer density. That's just beginning because of the branch consolidation is really a great start to the year.

Speaker Change: Yeah.

David Hass: Okay, that's helpful. And then just wanted to clarify quickly, on the tornado, is there any impact built into the guidance from that or because of the business disruption insurance, there's no, that's kind of just a neutral event as you think about the guidance? Yeah, so from an EBITDA perspective, the business interruption will be sort of offset. Again, timing may not be perfect there, but we're working through with that as we are able to quantify those impacts for the insurance provider. From a net sales perspective, it's really, you know, we've been able to pull product from other areas.

Speaker Change: Okay. That's that's helpful. And then just wanted to clarify quickly.

Speaker Change: On the tornado is there any impact built into the guidance from that or because of the business disruption insurance Theres no. That's kind of just a neutral event as you think about the guidance.

Speaker Change: Yes, so from an EBITDA perspective, the business interruption will be sort of offset again timing may not be perfect. There, but we're working through with that as we are able to quantify those impacts for the insurance provider from a net sales perspective, it's really we've been able to pull product from other areas. This is a very large factory for us.

Andrew Strelzick: This is a very large factory for us, so it's really more of a timing issue of the net sales of that particular product. Thankfully, the channel was nicely filled with product, and this is, you know, basically just slightly deferring, but thankfully a lot of that within the quarter, if that makes sense. Yep, that does. Thank you very much.

Speaker Change: So it's really more of a timing issue.

Speaker Change: Net sales of that particular product thankfully the channel was nicely filled with product and this is basically just slightly differing.

Speaker Change: But thankfully a lot of that within the quarter if that makes sense.

Speaker Change: Yes that does thank you very much.

Steve Powers: Your next question comes from Steve Powers with Deutsche Bank. Please go ahead. Great. Thank you very much. Good morning.

Steve Powers: Your next question comes from Steve Powers with Deutsche Bank. Please go ahead.

Steve Powers: Great. Thank you very much good morning.

Steve Powers: Building on, I guess, your answer to the first question that just preceded me, you talked about retention rates actually kind of holding up or ticking up through the first part of the integration, which is good to hear. I guess, more broadly, can you comment on what you've seen in the overall kind of menu of service levels you track, what you're hearing in terms of we're seeing in terms of customer satisfaction, just the level of marketplace disruption or lack thereof from the integration would be helpful. Sure. Thanks, Steve, for the question. So, yes, in general, we've spent time as businesses looking at factors like on-time and full, in-stock rates, our NPS scores, our customer satisfaction.

Speaker Change: Building on I guess your answers to the.

Steve Powers: First question just preceded me.

Speaker Change: You talked about retention rates actually kind of holding up or ticking up.

Speaker Change: The first part of the integration, which is good to hear I guess more broadly can you comment on what you're seeing in.

Speaker Change: The overall kind a menu of service levels you track.

Speaker Change: What youre hearing in terms of if we're seeing in terms of customer satisfaction just the level of.

Speaker Change: Marketplace disruption or lack thereof from the integration would be helpful.

Steve Powers: Sure. Thanks, Steve for the question. So yes in general we have spent time as businesses looking at factors like on time in full in stock rates, our NPS scores.

Steve Powers: Our customer satisfaction, we've actually built out a pretty extensive kpis dashboard for internal discussion that over the next coming quarters like we did at legacy Primo water will start to reveal some of those when it's best on the backside of conversion or consolidation, but in the quarter.

David Hass: We've actually built out a pretty extensive KPI dashboard for internal discussion that over the next coming quarters, like we did at Legacy Primo Water, we'll start to reveal some of those, when it's best on the backside of conversion or consolidation. But in the quarter, you know, our last mile, which would be our direct delivery business, had OTIP rates grow by several basis points. Our refill uptime, which really isn't impacted by the consolidation, remains at sort of its all-time levels. Customer retention, as I mentioned, was up a few basis points on a year-over-year basis. And as can be expected, when you go through consolidation, we are experiencing some call volumes, of which our call center prepares for, and that's why we do these branch consolidation in waves.

Steve Powers: Our last.

Steve Powers: Black model, which would be our direct delivery business had owed tip rates grow by several basis points, a refill uptime, which really isn't impacted by the consolidation remains its sort of its all time levels custom.

Steve Powers: Customer retention as I mentioned was up a few basis points on a year over year basis and as can be expected. When you go through consolidation we are experiencing some call volumes.

Steve Powers: Of which our call center prepares for and that's why we do these branch consolidation in waves.

David Hass: And we're looking to address concerns or questions about, hey, why is this product available now? Or why did my date potentially change from my original, very regular schedule? But those are sort of growing pains, as we will experience going through the consolidation.

Steve Powers: We're looking to address concerns or questions about hey, why is this product available now or or or why did my date potentially changed from my original very regular schedule, but those are sort of growing pains as we will experience going through the consolidation, but please look for us to release more of those kpis in coming quarters, but from a perspective of.

David Hass: But please look for us to release more of those KPIs in coming quarters. But from a perspective of how we deliver, how we make product, all those are trending in a positive direction as we look to consolidate production and last mile delivery. Yeah, okay, very good.

Steve Powers: How we deliver how we make product all of those are trending in a positive direction as we look to consolidate production and last mile deliveries.

Steve Powers: Okay very good and then on.

David Hass: And then on the synergy capture, so the 180 or so that remains for balance of year, can you talk a little bit more about sort of the expected cadence in achieving that and sort of the curve relative to kind of a straight $60 million a quarter? I presume it's going to ramp a bit, but just a little bit more color on that curve would be helpful. Thank you. Yeah, yeah. So again, we exited March a little stronger within about 50% of the actual quarters capture came in the month of March. And so when you look at that $20 million, knowing that about a third of that really contributed to a large portion, a third of the time contributed to over half of the dollars, that ramps now well over $80 million on an annualized basis.

Steve Powers: On the on the synergy capture.

Steve Powers: The 180, or so that remains for balance of year.

Steve Powers: You can you can.

Steve Powers: Can you talk a little bit more about sort of the expected cadence in.

Steve Powers: And achieving that.

Steve Powers: The curve relative to kind of a straight $60 million a quarter just the role I presume, it's going to ramp a bit, but just a little bit more color on that curve would be helpful. Thank you.

Steve Powers: Yes, yes, so again, we exited March a little stronger within about 50% of the actual quarter's capture came in the month of March and so when you look at that $20 million.

Steve Powers: Knowing that about a third of that really contributed to a large portion of third of the time contributed to over half of the dollars that ramps now well over $80 million on an annualized basis and so we really as we go through the next quarter and as we get slightly into Q3, we really will be at the execution of the tactic.

David Hass: And so we really, as we go through the next quarter, and as we get slightly into Q3, we really will be at the execution of the tactical decisions to get the full year value. It's just now letting that annualize out. And then as we head into 26, again, that's where the balance of decisions will be made to sort of annualize out into 2026's total, or excuse me, the cumulative total of $300 million. So as we've said at the beginning, this is a Q that was on pace. It was a Q that sort of provides sort of $80 plus million on an annualized basis.

Steve Powers: Decisions to get the full year value, it's just now letting that annualize out.

Steve Powers: And then as we head into 'twenty six again that for the balance of decisions will be made to sort of annualize out into 2026, it's total or excuse me the cumulative total of $300 million. So as we've said at the beginning this is a queue that was on pace.

Steve Powers: Q that sort of provides sort of 80 plus million dollars on an annualized basis.

David Hass: Next quarter will be a significant contributor to helping us get toward an annualized level that helps us achieve our end year. And then it starts to have incremental decisions in the back half of the year, which again, get us both to the 200 for the total, as well as annualize out to sort of get to about 220 to 250 for that 300 value with the rest coming in calendar 26. Understood. Okay, that's very helpful. Thank you.

Steve Powers: Next quarter will be a significant contributor to helping us get towards an annualized level that helps us achieve our in year.

Steve Powers: And then it starts to have incremental decisions in the back half of the year, which again gives us both to the 200 for the total.

Steve Powers: As well as the annualize out to sort of get to about 220 to 250 for that 300 value with the rest coming in calendar 'twenty six.

Steve Powers: Understood. Okay. That's very helpful. Thank you.

Steve Powers: Thank you.

Operator: There are no further questions at this time.

Robert Rebroke: There are no further questions at this time I'd like to turn the call back over to Robert Great broke for closing remarks.

Robbert Rietbroek: I'd like to turn the call back over to Robbert Rietbroek for closing remarks. Thank you for joining today's call and for your continued interest in Primo Brands. I'm proud of the progress we've made in shaping the future of our company. Across the organization, our team has been steadfast in delivering exceptional customer service, streamlining operations, identifying new opportunities, and unlocking synergies to drive long-term success.

Robert Rebroke: Thank you for joining today's call and for your continued interest in Primo brands I am proud of the progress we've made in shaping the future of our company across the organization. Our team has been steadfast and delivering exceptional customer service streamlining operations identifying new opportunities.

Robert Rebroke: <unk> and unlocking synergies to drive long term success on behalf of our board leadership team and associates I sincerely. Thank you for your trust and support as we work together to achieve our goals and create value for all stakeholders.

Robbert Rietbroek: On behalf of our board, leadership team, and associates, I sincerely thank you for your trust and support as we work together to achieve our goals and create value for all stakeholders.

Operator: Ladies and gentlemen, this concludes today's conference call. Thank you for your participation. You may now disconnect.

Robert Rebroke: Ladies and gentlemen, this concludes today's conference call. Thank you for your participation you may now disconnect.

Robert Rebroke: Okay.

Robert Rebroke: Okay.

Robert Rebroke: [music].

Robert Rebroke: Sure.

Robert Rebroke: [music].