Ranpak (PACK)2024-08-01 13:26Financial Performance - The company generated net revenue of $171.7 million for the six months ended June 30, 2024, compared to $163.1 million for the same period in 2023, representing a year-over-year increase of approximately 4.0%[77] - Net revenue for Q2 2024 was $86.4 million, an increase of $4.5 million or 5.5% from $81.9 million in Q2 2023[90] - Net revenue for the six months ended June 30, 2024, was $171.7 million, an increase of $8.6 million or 5.3% compared to $163.1 million in the same period of 2023[104] - Constant currency net revenue was $178.1 million for the six months ended June 30, 2024, a 5.1% increase from $169.4 million in the same period of 2023[104] - North America net revenue for Q2 2024 was $37.7 million, up $5.5 million or 17.1% from $32.2 million in Q2 2023[91] - North America net revenue increased by $6.3 million or 10.0% to $69.6 million, while Europe/Asia net revenue rose by $2.3 million or 2.3% to $102.1 million[105] Profitability Metrics - Gross profit for Q2 2024 was $31.7 million, up $1.5 million or 5.0% compared to $30.2 million in Q2 2023[88] - EBITDA for Q2 2024 was $29.3 million, an increase of $8.5 million or 40.9% from $20.8 million in Q2 2023[101] - EBITDA for the six months ended June 30, 2024, was $44.7 million, an increase of $16.4 million or 58.0% compared to $28.3 million in the same period of 2023[115] - Net income for Q2 2024 was $5.5 million, an increase of $7.6 million from a net loss of $2.1 million in Q2 2023[100] - Net loss decreased to $2.6 million for the six months ended June 30, 2024, from a net loss of $14.5 million in the same period of 2023, a change of $11.9 million[114] Expenses and Costs - SG&A expenses increased to $27.3 million, a rise of $11.0 million or 67.5% from $16.3 million in Q2 2023, primarily due to increased stock-based compensation[93] - Selling, general and administrative expenses increased by $11.7 million or 26.9% to $55.2 million, primarily due to a rise in stock-based compensation[107] - Cost of goods sold for Q2 2024 was $54.7 million, an increase of $3.0 million or 5.8% from $51.7 million in Q2 2023[92] - Cost of goods sold for the six months ended June 30, 2024, totaled $107.7 million, an increase of $2.3 million or 2.2%, with a decrease in cost of goods sold as a percentage of net sales to 62.7% from 64.6%[106] Cash Flow and Liquidity - Net cash provided by operating activities was $24.8 million for the six months ended June 30, 2024, compared to $16.6 million for the same period in 2023, reflecting a significant improvement[126] - Net cash used in investing activities was $19.1 million for the six months ended June 30, 2024, which included a $4.8 million investment in Pickle, compared to $25.2 million in the same period of 2023[127] - Net cash used in financing activities was $1.6 million for the six months ended June 30, 2024, up from $0.7 million in the same period of 2023, indicating increased financial obligations[128] - The company had $65.1 million in cash and cash equivalents as of June 30, 2024, up from $62.0 million at the end of 2023[120] - Total debt as of June 30, 2024, was $401.7 million, a slight decrease from $407.4 million at the end of 2023[122] Market and Operational Insights - The installed base of Protective Packaging Solutions (PPS) systems increased to approximately 141.2 thousand as of June 30, 2024, up from 140.7 thousand in the previous year, reflecting a growth of 0.4%[78] - The installed base of cushioning machines slightly decreased by 0.3% from 35.0 thousand in June 2023 to 34.9 thousand in June 2024[78] - Approximately 30% of the company's net revenue in 2023 was derived from e-commerce sectors, indicating a strong seasonal trend with higher sales typically recorded in the fourth quarter[82] - The company operates manufacturing facilities in the United States and Europe, with about 59% of its 2023 net revenue generated outside the United States[76] - The company utilizes three-dimensional computer vision and artificial intelligence technologies through its R Squared Robotics division to enhance packaging and logistics functions[76] Economic and External Factors - The company experienced inflationary pressures in 2024, which adversely impacted end-users and resulted in increased costs, although some of these costs were mitigated by price increases[81] - The company anticipates continued pressure on gross margins in the medium term relative to historical performance due to rising input costs and competitive market conditions[79] - The company is exposed to currency translation risks due to its global operations, which may affect the comparability of financial results between periods[79] - Foreign currency gain for the six months ended June 30, 2024, was $1.3 million, a change of $2.2 million or 244.4% from a loss of $0.9 million in the same period of 2023[111] - Foreign currency loss decreased by $0.6 million or 85.7% to $0.1 million in Q2 2024, reflecting reduced volatility in Euro exchange rates[97] Shareholder and Capital Management - The company has authorized a share repurchase program of up to $50.0 million, with no repurchases executed to date[124] - The company expects capital expenditures to increase as it continues to grow its business and expand its manufacturing footprint[121] - The interest rate for the First Lien Dollar Term Facility was 9.18% as of June 30, 2024, down from 9.44% at the end of 2023[122] - The company has $43.8 million available under its revolving credit facility after accounting for outstanding letters of credit[122] Asset Management - There were no indicators of impairment for goodwill or long-lived assets as of June 30, 2024, suggesting stable asset valuations[133] - The company continues to monitor for indicators of impairment in its reporting units and long-lived assets[133] - The company has various contractual obligations and commercial commitments recorded as liabilities, with no significant changes reported[129] - There were no off-balance sheet arrangements as of June 30, 2024[130]