Ranpak (PACK) - 2025 Q2 - Quarterly Report

PART I – FINANCIAL INFORMATION This section presents Ranpak Holdings Corp.'s unaudited condensed consolidated financial information, including financial statements, management's discussion, and market risk disclosures Item 1. Condensed Consolidated Financial Statements (Unaudited) This section presents Ranpak Holdings Corp.'s unaudited condensed consolidated financial statements and accompanying notes Unaudited Condensed Consolidated Statements of Operations and Comprehensive Income (Loss) This section presents the company's unaudited statements of operations and comprehensive income (loss) for the specified periods | Metric | Three Months Ended June 30, 2025 (Millions) | Three Months Ended June 30, 2024 (Millions) | Change (Millions) | % Change | | :-------------------------------- | :---------------------------------------- | :---------------------------------------- | :---------------- | :------- | | Net Revenue | $92.3 | $86.4 | $5.9 | 6.8% | | Gross Profit | $28.9 | $31.7 | $(2.8) | (8.8)% | | Loss from Operations | $(9.7) | $(5.2) | $(4.5) | 86.5% | | Net (Loss) Income | $(7.5) | $5.5 | $(13.0) | (236.4)% | | Basic and Diluted (Loss) Income per Share | $(0.09) | $0.07 | $(0.16) | (228.6)% | | Metric | Six Months Ended June 30, 2025 (Millions) | Six Months Ended June 30, 2024 (Millions) | Change (Millions) | % Change | | :-------------------------------- | :-------------------------------------- | :-------------------------------------- | :---------------- | :------- | | Net Revenue | $183.5 | $171.7 | $11.8 | 6.9% | | Gross Profit | $59.8 | $64.0 | $(4.2) | (6.6)% | | Loss from Operations | $(17.7) | $(10.0) | $(7.7) | 77.0% | | Net (Loss) Income | $(18.4) | $(2.6) | $(15.8) | 607.7% | | Basic and Diluted (Loss) Income per Share | $(0.22) | $(0.03) | $(0.19) | 633.3% | Unaudited Condensed Consolidated Balance Sheets This section provides the company's unaudited balance sheet data for the specified periods | Metric | June 30, 2025 (Millions) | December 31, 2024 (Millions) | Change (Millions) | % Change | | :-------------------------- | :----------------------- | :--------------------------- | :---------------- | :------- | | Total Assets | $1,138.0 | $1,104.2 | $33.8 | 3.1% | | Total Current Assets | $151.9 | $151.2 | $0.7 | 0.5% | | Cash and Cash Equivalents | $49.2 | $76.1 | $(26.9) | (35.3)% | | Inventories | $38.1 | $21.7 | $16.4 | 75.6% | | Total Liabilities | $599.0 | $556.1 | $42.9 | 7.7% | | Total Shareholders' Equity | $539.0 | $548.1 | $(9.1) | (1.7)% | Unaudited Condensed Consolidated Statements of Changes in Shareholders' Equity This section details changes in shareholders' equity for the specified period | Item | Amount (Millions) | | :-------------------------------- | :---------------- | | Balance at December 31, 2024 | $548.1 | | Stock-based awards vested and distributed | $(1.2) | | Amortization of restricted stock units | $4.1 | | Initial vesting of common stock warrants | $6.0 | | Provision for common stock warrants | $1.8 | | Net loss | $(18.4) | | Other comprehensive loss | $(1.4) | | Balance at June 30, 2025 | $539.0 | Unaudited Condensed Consolidated Statements of Cash Flows This section outlines the company's cash flow activities for the specified periods | Activity | Six Months Ended June 30, 2025 (Millions) | Six Months Ended June 30, 2024 (Millions) | Change (Millions) | | :------------------------------------ | :---------------------------------------- | :---------------------------------------- | :---------------- | | Net cash (used in) provided by operating activities | $(4.9) | $24.8 | $(29.7) | | Net cash used in investing activities | $(19.8) | $(19.1) | $(0.7) | | Net cash used in financing activities | $(4.9) | $(1.6) | $(3.3) | | Effect of Exchange Rate Changes on Cash and Cash Equivalents | $2.7 | $(1.0) | $3.7 | | Net (Decrease) Increase in Cash and Cash Equivalents | $(26.9) | $3.1 | $(30.0) | | Cash and Cash Equivalents, end of period | $49.2 | $65.1 | $(15.9) | Notes to the Unaudited Condensed Consolidated Financial Statements This section provides detailed notes explaining the company's nature of operations, accounting policies, and specific financial data Note 1 — Nature of Operations This note describes Ranpak's business as a global provider of environmentally sustainable packaging solutions - Ranpak is a leading global provider of environmentally sustainable, systems-based, product protection and end-of-line automation solutions for e-commerce and industrial supply chains, offering proprietary protective packaging solutions (PPS) systems and paper consumables[24] Note 2 — Basis of Presentation and Summary of Significant Accounting Policies This note outlines the basis of financial statement presentation and summarizes the company's significant accounting policies - The company is evaluating the impact of recently issued Accounting Standards Updates (ASUs): ASU 2023-09 (Income Tax Disclosures) effective after Dec 15, 2024, and ASU 2024-03 (Expense Disaggregation Disclosures) effective after Dec 15, 2026[33][34][35] Note 3 — Supplemental Balance Sheet Data and Cash Flow Information This note provides additional details on specific balance sheet accounts and cash flow information | Metric | June 30, 2025 (Millions) | December 31, 2024 (Millions) | | :------------------------ | :----------------------- | :--------------------------- | | Accounts receivable | $45.8 | $44.4 | | Allowance for doubtful accounts | $(0.4) | $(0.5) | | Accounts receivable, net | $45.4 | $43.9 | | Metric | June 30, 2025 (Millions) | December 31, 2024 (Millions) | | :---------------- | :----------------------- | :--------------------------- | | Raw materials | $19.0 | $12.5 | | Work-in-process | $6.0 | $0.0 | | Finished goods | $13.1 | $9.2 | | Total Inventories | $38.1 | $21.7 | | Metric | June 30, 2025 (Millions) | December 31, 2024 (Millions) | | :-------------------------- | :----------------------- | :--------------------------- | | Total property, plant, and equipment | $347.4 | $315.9 | | Accumulated depreciation | $(202.2) | $(178.3) | | Property, plant, and equipment, net | $145.2 | $137.6 | Note 4 — Segment Information This note presents financial data broken down by the company's operating segments - The company operates in two reportable segments: North America and Europe/Asia, with segment profit or loss measured by EBITDA[42] | Segment | Three Months Ended June 30, 2025 (Millions) | Three Months Ended June 30, 2024 (Millions) | | :-------------- | :---------------------------------------- | :---------------------------------------- | | North America | $3.1 | $5.6 | | Europe/Asia | $12.5 | $23.7 | | Consolidated | $15.6 | $29.3 | | Segment | Six Months Ended June 30, 2025 (Millions) | Six Months Ended June 30, 2024 (Millions) | | :-------------- | :-------------------------------------- | :-------------------------------------- | | North America | $8.1 | $9.1 | | Europe/Asia | $17.2 | $35.6 | | Consolidated | $25.3 | $44.7 | Note 5 — Contracts with Customers This note provides information regarding the company's revenue recognition from customer contracts - One customer comprised 12.7% and 11.6% of total net revenue for the three and six months ended June 30, 2025, respectively[48] - On January 28, 2025, the Company entered into an equity agreement with a customer for the grant of non-voting common stock warrants, recording an asset of $6.0 million for immediately vested warrants[49][104] | Metric | June 30, 2025 (Millions) | December 31, 2024 (Millions) | | :----------------- | :----------------------- | :--------------------------- | | Contract Assets | $2.5 | $2.1 | | Contract Liabilities | $8.9 | $3.4 | Note 6 — Goodwill and Intangible Assets, net This note details the company's goodwill and intangible assets, net of accumulated amortization | Segment | June 30, 2025 (Millions) | December 31, 2024 (Millions) | | :-------------- | :----------------------- | :--------------------------- | | North America | $338.8 | $338.8 | | Europe/Asia | $118.2 | $104.9 | | Total | $457.0 | $443.7 | | Asset Type | Remaining Useful Life (Years) | Gross Carrying Amount (Millions) | Accumulated Amortization (Millions) | Net (Millions) | | :------------------------------ | :---------------------------- | :------------------------------- | :---------------------------------- | :------------- | | Customer/distributor relationships | 9 | $205.7 | $(83.2) | $122.5 | | Patented/unpatented technology | 5 | $171.8 | $(94.6) | $77.2 | | Intellectual property | 6 | $0.5 | $(0.3) | $0.2 | | Trademarks/tradenames (indefinite) | N/A | $106.2 | — | $106.2 | | Total | 8 (weighted-avg) | $484.2 | $(178.1) | $306.1 | Note 7 — Long-Term Debt This note provides information on the company's long-term debt obligations and related terms - The company entered into a First Lien Credit Agreement on December 19, 2024, comprising a $410.0 million Term Facility maturing in December 2031 and a $50.0 million Revolving Facility maturing in December 2029[55] - The interest rate for the Term Facility was 8.80% as of June 30, 2025, and 8.85% as of December 31, 2024[55][192] - As of June 30, 2025, there were no amounts outstanding under the Revolving Facility, with a net availability of $46.5 million after accounting for $3.5 million committed to outstanding letters of credit[57][61][193] | Metric | June 30, 2025 (Millions) | December 31, 2024 (Millions) | | :-------------------------- | :----------------------- | :--------------------------- | | Term Facility | $408.0 | $410.0 | | Finance lease liabilities | $3.4 | $4.3 | | Equipment financing | $0.9 | $1.4 | | Deferred financing costs, net | $(9.2) | $(9.3) | | Total debt | $403.1 | $406.4 | | Less: current portion | $(5.4) | $(5.6) | | Long-term debt | $397.7 | $400.8 | Note 8 — Derivative Instruments This note describes the company's use of derivative instruments to manage market risks - The company uses derivatives, primarily cross-currency swaps, to manage exposure to foreign currency rate fluctuations on USD-denominated debt and foreign currency translation[65] - Net investment hedges include the May 2025 Swap (notional $80.0 million for €80.0 million) and the January 2025 Swap (notional $80.0 million for €77.9 million), designated to protect foreign operations' value[66][67] - A variable-to-variable cross-currency swap (notional $50.0 million for €47.8 million) was entered on January 24, 2025, and designated as a fair value hedge to reduce foreign currency effects on the Dutch Borrower's term loan[69] | Classification | June 30, 2025 (Millions) | | :-------------------------------- | :----------------------- | | Accrued liabilities and other (fair value hedge) | $(0.5) | | Accrued liabilities and other (net investment hedges) | $(1.5) | | Derivative instruments (fair value hedge) | $(6.7) | | Derivative instruments (net investment hedges) | $(26.8) | Note 9 — Accumulated Other Comprehensive Loss This note provides a breakdown of the components of accumulated other comprehensive loss | Component | Gross Balance (Millions) | Tax Effect (Millions) | Net Balance (Millions) | | :-------------------------------- | :----------------------- | :-------------------- | :--------------------- | | Foreign currency translation | $(11.3) | $4.5 | $(6.8) | | Unrealized loss on cross currency fair value hedge | $(1.2) | $0.4 | $(0.8) | | Total | $(12.5) | $4.9 | $(7.6) | | Item | Six Months Ended June 30, 2025 (Millions) | | :-------------------------------- | :---------------------------------------- | | Beginning balance | $(6.2) | | Other comprehensive loss before reclassifications | $(8.4) | | Tax effects | $7.0 | | Ending balance | $(7.6) | Note 10 — Fair Value Measurement This note details the fair value measurements of financial instruments held by the company | Instrument | Carrying Amount (Millions) | Level 1 (Millions) | Level 2 (Millions) | Level 3 (Millions) | | :-------------------------------------- | :----------------------- | :----------------- | :----------------- | :----------------- | | Money market fund | $24.4 | $24.4 | — | — | | Current and long-term Term debt | $408.0 | — | $406.0 | — | | Cross currency swap agreement - Fair value hedge | $7.2 | — | $7.2 | — | | Cross-currency swap agreements - Net investment hedges | $28.3 | — | $28.3 | — | Note 11 — Income Taxes This note provides information on the company's income tax expense, effective tax rates, and related components | Period | 2025 | 2024 | | :-------------------------- | :----- | :----- | | Three Months Ended June 30, | 21.5% | 24.8% | | Six Months Ended June 30, | 22.2% | (13.3)% | - The fluctuation in the effective tax rate is primarily attributable to the impact of stock-based compensation windfall and shortfall, and state income taxes[83] Note 12 — Leases This note details the company's lease arrangements, including right-of-use assets and lease liabilities | Metric | June 30, 2025 (Millions) | December 31, 2024 (Millions) | | :------------------------ | :----------------------- | :--------------------------- | | Operating lease right-of-use assets, net | $24.0 | $20.9 | | Finance lease right of use assets, net | $3.3 | $4.1 | | Total lease assets | $27.3 | $25.0 | | Metric | June 30, 2025 (Millions) | December 31, 2024 (Millions) | | :------------------------ | :----------------------- | :--------------------------- | | Operating lease liabilities, current | $4.0 | $4.0 | | Operating lease liabilities, non-current | $24.2 | $20.8 | | Finance lease liabilities, current | $1.5 | $1.6 | | Finance lease liabilities, non-current | $1.9 | $2.7 | | Total lease liabilities | $31.6 | $29.1 | | Period | 2025 (Millions) | 2024 (Millions) | | :-------------------------- | :-------------- | :-------------- | | Three Months Ended June 30, | $1.9 | $1.7 | | Six Months Ended June 30, | $3.7 | $3.3 | Note 13 — Commitments and Contingencies This note discloses the company's commitments and potential contingent liabilities - The company is subject to legal proceedings but believes any future accruals would not materially affect financial condition, liquidity, or cash flows, with no amounts required for contingencies as of June 30, 2025[89][90] - Management believes the company is in material compliance with environmental laws and regulations and maintains insurance coverage, expecting no material adverse effect on future results[91][92][94] Note 14 — Stock-Based Compensation This note provides details on the company's stock-based compensation plans and related expenses | Period | 2025 (Millions) | 2024 (Millions) | | :-------------------------- | :-------------- | :-------------- | | Three Months Ended June 30, | $2.0 | $1.5 | | Six Months Ended June 30, | $4.1 | $2.8 | - Approximately 5.9 million shares remained for issuance under the Ranpak Holdings Corp. 2019 Omnibus Incentive Plan as of June 30, 2025[96] Note 15 — Earnings (Loss) per Share This note presents the calculation of basic and diluted earnings (loss) per share | Period | 2025 | 2024 | | :-------------------------- | :----- | :----- | | Three Months Ended June 30, | $(0.09) | $0.07 | | Six Months Ended June 30, | $(0.22) | $(0.03) | - 4.6 million shares (three months ended June 30, 2025) and 3.8 million shares (six months ended June 30, 2025) were excluded from diluted EPS calculation due to their anti-dilutive effect[101] Note 16 — Transactions with Related Parties This note discloses transactions between the company and its related parties - The company has a shared services agreement with One Madison Group LLC, an entity controlled by its CEO, for administrative and corporate services; total fees were not significant[102] Note 17 — Shareholders' Equity This note provides information on the components of shareholders' equity and related transactions - On July 30, 2025, the board authorized an extension of the Class A common stock repurchase program up to $50.0 million, with a 36-month expiration[103] - On January 28, 2025, Ranpak issued a warrant to an Amazon affiliate to acquire up to 18,716,456 Class A common shares at an exercise price of $6.8308 per share; 1,871,646 shares vested immediately[104] - The total fair value of the Amazon Warrant Shares on the grant date was $60.5 million, valued using a Black-Scholes model with a blended volatility of 50.00% and an expected term of 8 years[107] Note 18 — Strategic Investments This note details the company's strategic investments in other entities - During Q2 2025, an additional $2.5 million cash was invested in Pickle Robot Co., resulting in a $5.8 million unrealized gain; carrying value was $22.1 million as of June 30, 2025[110] - The carrying value of the investment in Creapaper GmbH was $4.9 million as of June 30, 2025, and $4.5 million as of Dec 31, 2024[111] Note 19 — Subsequent Events This note describes significant events that occurred after the balance sheet date - On July 4, 2025, the One Big Beautiful Bill Act (OBBBA) was enacted in the U.S., including permanent extension of certain Tax Cuts and Jobs Act provisions; the company is assessing its impact[112] Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations This section analyzes Ranpak's financial condition, operational results, key performance indicators, and liquidity Overview This section provides a general description of Ranpak's business and operational scope - Ranpak is a leading global provider of environmentally sustainable, systems-based, product protection and end-of-line automation solutions for e-commerce and industrial supply chains[121] - R Squared Robotics, a division of Ranpak, utilizes three-dimensional computer vision and artificial intelligence technologies to improve end-of-line packaging and logistics[121] - As of June 30, 2025, the company had an installed base of approximately 145.0 thousand Protective Packaging Solutions (PPS) systems[122] - Net revenue for the six months ended June 30, 2025, was $183.5 million, compared to $171.7 million for the same period in 2024[122] Key Performance Indicators and Other Factors Affecting Performance This section discusses the primary metrics and external factors influencing the company's financial performance | Product Line | June 30, 2025 (Thousands) | June 30, 2024 (Thousands) | Change (Thousands) | % Change | | :----------- | :------------------------ | :------------------------ | :----------------- | :------- | | Cushioning | 34.6 | 34.9 | (0.3) | (0.9)% | | Void-Fill | 87.9 | 83.9 | 4.0 | 4.8% | | Wrapping | 22.5 | 22.4 | 0.1 | 0.4% | | Total | 145.0 | 141.2 | 3.8 | 2.7% | - Paper is the largest input cost, subject to significant fluctuations due to inflation, supply and demand, and energy prices, potentially impacting gross margin[124][125] - The company is exposed to currency translation and transaction risks, primarily with the Euro, affecting comparability of results and cash flows, with some exposure hedged by cross-currency swaps[126][127][128] - Continued inflationary pressures in 2025 have adversely impacted end-users and net revenue, with price increases partially offsetting higher costs[128] - Approximately 37% of 2024 net revenue was from e-commerce, leading to seasonal trends with highest net revenue in Q4 and slowest in Q1[130] Non-GAAP Measures This section defines and explains the non-GAAP financial measures used by the company - EBITDA is calculated as net income (loss) adjusted for income taxes, interest expense, and depreciation and amortization[132] - Adjusted EBITDA (AEBITDA) further adjusts EBITDA by excluding stock-based compensation expense, foreign currency (gain) loss, and other income and expense items[133] - Constant currency change measures the year-over-year impact of foreign currency movements by translating current year results at prior period average exchange rates[134][135] - Non-GAAP measures have limitations as analytical tools and should not be considered in isolation or as substitutes for GAAP measures[136][138] Consolidated Results of Operations (Comparison of Second Quarter of 2025 to Second Quarter of 2024) This section compares the consolidated financial performance for the second quarter of 2025 against 2024 | Metric | 2025 (Millions) | 2024 (Millions) | $ Change | % Change | Constant Currency % Change | | :---------- | :-------------- | :-------------- | :------- | :------- | :------------------------- | | Net Revenue | $92.3 | $86.4 | $5.9 | 6.8% | 3.8% | | Product Line | 2025 (Millions) | 2024 (Millions) | $ Change | % Change | Constant Currency % Change | | :----------- | :-------------- | :-------------- | :------- | :------- | :------------------------- | | Cushioning | $36.8 | $35.0 | $1.8 | 5.1% | 0.9% | | Void-Fill | $41.1 | $37.7 | $3.4 | 9.0% | 7.4% | | Wrapping | $7.3 | $8.4 | $(1.1) | (13.1)% | (17.9)% | | Other | $7.1 | $5.3 | $1.8 | 34.0% | 32.1% | - Cost of sales increased by $8.7 million, or 15.9% (13.0% at constant currency), to $63.4 million, primarily due to increased volume (4.6%) and production costs (8.4%)[146][147] - Net loss was $(7.5) million in Q2 2025, a decrease of $(13.0) million compared to net income of $5.5 million in Q2 2024[142] | Metric | 2025 (Millions) | 2024 (Millions) | $ Change | % Change | Constant Currency % Change | | :------- | :-------------- | :-------------- | :------- | :------- | :------------------------- | | EBITDA | $15.6 | $29.3 | $(13.7) | (46.8)% | (48.8)% | | AEBITDA | $16.5 | $19.6 | $(3.1) | (15.8)% | (18.4)% | Segment Results of Operations - Second Quarter of 2025 and Second Quarter of 2024 This section analyzes segment-level operational results for the second quarter of 2025 compared to 2024 - North America net revenue increased by $4.6 million (12.2%) to $42.3 million, driven by volume increase (14.8%) and automated box sizing equipment sales (3.9%)[156] - Europe/Asia net revenue increased by $1.3 million (2.7%) to $50.0 million (decreased 2.7% on a constant currency basis), driven by foreign currency fluctuations (5.4%)[157] | Segment | 2025 (Millions) | 2024 (Millions) | $ Change | % Change | | :-------------- | :-------------- | :-------------- | :------- | :------- | | North America | $3.1 | $5.6 | $(2.5) | (44.6)% | | Europe/Asia | $12.5 | $23.7 | $(11.2) | (47.3)% | - North America EBITDA decrease was primarily due to increased foreign currency loss ($8.7 million) and production/fulfillment costs ($6.0 million), partially offset by increased net revenue ($4.6 million) and non-operating income ($8.4 million)[159] - Europe/Asia EBITDA decrease was primarily due to a $20.4 million decrease in non-operating income (no reoccurrence of $16.1 million litigation proceeds from 2024) and increased intersegment royalties ($4.3 million)[160] Consolidated Results of Operations (Comparison of Six Months Ended June 30, 2025 to Six Months Ended June 30, 2024) This section compares the consolidated financial performance for the six months ended June 30, 2025, against 2024 | Metric | 2025 (Millions) | 2024 (Millions) | $ Change | % Change | Constant Currency % Change | | :---------- | :-------------- | :-------------- | :------- | :------- | :------------------------- | | Net Revenue | $183.5 | $171.7 | $11.8 | 6.9% | 6.3% | | Product Line | 2025 (Millions) | 2024 (Millions) | $ Change | % Change | Constant Currency % Change | | :----------- | :-------------- | :-------------- | :------- | :------- | :------------------------- | | Cushioning | $72.0 | $72.3 | $(0.3) | (0.4)% | (1.4)% | | Void-Fill | $81.4 | $70.8 | $10.6 | 15.0% | 14.8% | | Wrapping | $16.7 | $17.0 | $(0.3) | (1.8)% | (2.4)% | | Other | $13.4 | $11.6 | $1.8 | 15.5% | 14.7% | - Cost of sales increased by $16.0 million, or 14.9% (14.2% at constant currency), to $123.7 million, primarily due to increased volume (7.6%) and production costs (11.7%)[166] - Net loss was $(18.4) million in the six months ended June 30, 2025, compared to a net loss of $(2.6) million in the prior year, an increase of $(15.8) million[162] | Metric | 2025 (Millions) | 2024 (Millions) | $ Change | % Change | Constant Currency % Change | | :------- | :-------------- | :-------------- | :------- | :------- | :------------------------- | | EBITDA | $25.3 | $44.7 | $(19.4) | (43.4)% | (44.3)% | | AEBITDA | $33.8 | $38.8 | $(5.0) | (12.9)% | (13.4)% | Segment Results of Operations - Six Months Ended June 30, 2025 and Six Months Ended June 30, 2024 This section analyzes segment-level operational results for the six months ended June 30, 2025, compared to 2024 - North America net revenue increased by $15.3 million (22.0%) to $84.9 million, driven by volume increase (28.3%) and automated box sizing equipment sales (3.6%)[176] - Europe/Asia net revenue decreased by $3.5 million (3.4%, or 4.4% on a constant currency basis) to $98.6 million, primarily due to decreases across product lines and a 3.0% decrease in price/mix[177][178] | Segment | 2025 (Millions) | 2024 (Millions) | $ Change | % Change | | :-------------- | :-------------- | :-------------- | :------- | :------- | | North America | $8.1 | $9.1 | $(1.0) | (11.0)% | | Europe/Asia | $17.2 | $35.6 | $(18.4) | (51.7)% | - North America EBITDA decrease was primarily due to increased foreign currency loss ($6.5 million), IT maintenance costs ($1.5 million), and non-manufacturing employee compensation ($1.3 million), partially offset by increased non-operating income ($9.8 million)[180] - Europe/Asia EBITDA decrease was primarily due to a $22.0 million decrease in non-operating income (no reoccurrence of $16.1 million litigation proceeds from 2024) and increased intersegment royalties ($5.9 million)[181] Reconciliation of U.S. GAAP to Non-GAAP Measures This section provides a reconciliation of GAAP financial measures to non-GAAP measures like EBITDA and Adjusted EBITDA | Metric | Three Months Ended June 30, 2025 (Millions) | Three Months Ended June 30, 2024 (Millions) | $ Change | % Change | | :-------------------------------- | :---------------------------------------- | :---------------------------------------- | :------- | :------- | | Net (loss) income | $(7.5) | $5.5 | $(13.0) | (236.4)% | | Depreciation and amortization expense | $16.8 | $16.7 | $0.1 | 0.6% | | Interest expense | $8.3 | $5.3 | $3.0 | 56.6% | | Income tax (benefit) expense | $(2.0) | $1.8 | $(3.8) | (211.1)% | | EBITDA | $15.6 | $29.3 | $(13.7) | (46.8)% | | Adjustments (e.g., FX, M&A, stock-based comp, strategic investments) | $0.9 | $(9.7) | $10.6 | NM | | AEBITDA | $16.5 | $19.6 | $(3.1) | (15.8)% | | Metric | Six Months Ended June 30, 2025 (Millions) | Six Months Ended June 30, 2024 (Millions) | $ Change | % Change | | :-------------------------------- | :-------------------------------------- | :-------------------------------------- | :------- | :------- | | Net loss | $(18.4) | $(2.6) | $(15.8) | (607.7)% | | Depreciation and amortization expense | $31.9 | $35.5 | $(3.6) | (10.1)% | | Interest expense | $17.0 | $11.5 | $5.5 | 47.8% | | Income tax (benefit) expense | $(5.2) | $0.3 | $(5.5) | NM | | EBITDA | $25.3 | $44.7 | $(19.4) | (43.4)% | | Adjustments (e.g., FX, M&A, stock-based comp, strategic investments) | $8.5 | $(5.9) | $14.4 | NM | | AEBITDA | $33.8 | $38.8 | $(5.0) | (12.9)% | Liquidity and Capital Resources This section discusses the company's ability to generate and manage cash flows to meet its financial obligations - As of June 30, 2025, the company had $49.2 million in cash and cash equivalents, along with borrowing capacity under its revolving credit facilities, deemed sufficient for current requirements[187] - Total debt (excluding deferred financing costs) was $412.3 million as of June 30, 2025, with $5.4 million classified as short-term; no amounts were outstanding under the $50.0 million revolving credit facility[191][193] - Net cash used in operating activities was $4.9 million for the six months ended June 30, 2025, a significant decrease from $24.8 million provided in the prior year, primarily due to increased net loss and working capital changes[196][197] - Net cash used in investing activities was $19.8 million for the six months ended June 30, 2025, reflecting purchases of converter equipment, machinery, and strategic investments[198] - Net cash used in financing activities was $4.9 million for the six months ended June 30, 2025, primarily for term loan principal payments, finance lease liabilities, and tax payments for stock-based awards[199] Critical Accounting Policies and Estimates This section outlines the accounting policies and estimates that require significant judgment and are crucial to the company's financial reporting - All significant accounting policies, including critical accounting policies and estimates, are disclosed in the company's 2024 10-K and in Note 2 of the unaudited condensed consolidated financial statements[202] Recently Issued and Adopted Accounting Pronouncements This section provides information on new accounting standards that have been issued or adopted by the company - For details on recently issued and adopted accounting pronouncements, refer to Note 2 — Basis of Presentation and Summary of Significant Accounting Policies[203] Item 3. Quantitative and Qualitative Disclosures About Market Risk This section details Ranpak's exposure to market risks, specifically interest rate risk, foreign currency exchange rate risk, and commodity price risk, and outlines strategies to mitigate these exposures Interest Rate Risk This section discusses the company's exposure to interest rate fluctuations and their potential financial impact - The company is exposed to interest rate risk, affecting interest income on cash and interest expense on floating-rate debt under its Facilities[204] - A hypothetical 100 basis point increase or decrease in applicable base interest rates would result in a $2.0 million impact on cash interest expense for the six months ended June 30, 2025[204] Foreign Currency Exchange Rate Risk This section details the company's exposure to foreign currency exchange rate fluctuations and mitigation strategies - The company is exposed to foreign currency exchange risk related to transactions and subsidiary balances denominated in currencies other than USD, primarily the Euro[206][208] - Mitigation strategies include naturally hedging by matching transaction currencies, maintaining credit access in principal currencies, and using cross-currency swaps[207] - For the six months ended June 30, 2025, 54% ($98.6 million) of net revenue was non-USD denominated; a 10% change in the Euro's value would impact net revenue by approximately $9.9 million[208] Commodity Price Risk This section addresses the company's exposure to commodity price fluctuations, particularly paper prices - The business is significantly impacted by paper price fluctuations, its largest input cost, with global inflation potentially leading to increased volatility[209] - The company aims to obtain competitive prices and allow operating results to reflect market movements, but its ability to pass on price increases to customers may be limited[209] Item 4. Controls and Procedures This section addresses the evaluation of Ranpak's disclosure controls and procedures, acknowledging material weaknesses in internal control over financial reporting, outlining remediation plans, and confirming the fair presentation of financial statements despite these weaknesses Evaluation of Disclosure Controls and Procedures This section describes the evaluation of the effectiveness of the company's disclosure controls and procedures - As of June 30, 2025, disclosure controls and procedures were not effective due to material weaknesses in internal control over financial reporting, as described in the 2024 10-K[211] - Despite material weaknesses, management concluded that consolidated financial statements fairly present the financial position, results of operations, and cash flows for the periods presented[212] Remediation Plans This section outlines the company's plans to address identified material weaknesses in internal control over financial reporting - The company continues to implement a remediation plan to address material weaknesses, with an expectation to remediate certain weaknesses by the end of calendar year 2025[213][214] - Remediation requires controls to operate effectively for a sufficient period, and delays or changes to timing may occur, with mitigating controls being put in place[214] Changes in Internal Control Over Financial Reporting This section reports any changes in internal control over financial reporting during the period - The company reviewed control design and began remediation activities in response to material weaknesses, with no other material changes in internal control over financial reporting during the quarter ended June 30, 2025[216] PART II – OTHER INFORMATION This section covers legal proceedings, risk factors, equity sales, defaults, exhibits, and other disclosures Item 1. Legal Proceedings This section states that there are no legal proceedings to report - No legal proceedings are reported for the period[217] Item 1A. Risk Factors This section refers to the company's Annual Report on Form 10-K for a comprehensive discussion of risk factors - Information about risk factors is contained in Item 1A of the 2024 10-K[218] Item 2. Unregistered Sales of Equity Securities and Use of Proceeds This section indicates that there were no unregistered sales of equity securities or use of proceeds to report - No unregistered sales of equity securities or use of proceeds are reported[219] Item 3. Defaults Upon Senior Securities This section states that there were no defaults upon senior securities - No defaults upon senior securities are reported[220] Item 4. Mine Safety Disclosures This section indicates that mine safety disclosures are not applicable to the company - Mine safety disclosures are not applicable[220] Item 5. Other Information This section states that there is no other information to report - No other information is reported[221] Item 6. Exhibits This section lists the exhibits filed as part of the Quarterly Report on Form 10-Q, including corporate documents, warrant agreements, employment agreements, certifications, and XBRL financial information - Key exhibits include Certificate of Incorporation, Bylaws, Warrant to Purchase Common Stock with Amazon.com NV Investment Holdings LLC, Separation Agreements, Employment Agreement, CEO/CFO Certifications, and XBRL financial information[222] Signatures This section contains the required signatures for the Quarterly Report on Form 10-Q, certifying its submission on behalf of Ranpak Holdings Corp - The report was signed by William Drew, Executive Vice President and Chief Financial Officer, on August 5, 2025[226]