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Ranpak (PACK) - 2021 Q1 - Quarterly Report

Part I – Financial Information Condensed Consolidated Financial Statements (Unaudited) Ranpak achieved a net income of $6.3 million in Q1 2021, reversing a prior-year loss, driven by a 38.3% increase in net revenue to $87.7 million Condensed Consolidated Statements of Operations (Q1 2021 vs Q1 2020) | Metric | Three Months Ended March 31, 2021 (Millions USD) | Three Months Ended March 31, 2020 (Millions USD) | | :--- | :--- | :--- | | Net revenue | $87.7 million | $63.4 million | | Gross profit | $36.3 million | $26.8 million | | Income (loss) from operations | $7.7 million | ($0.6) million | | Net income (loss) | $6.3 million | ($3.6) million | | Basic EPS | $0.09 | ($0.05) | | Diluted EPS | $0.08 | ($0.05) | Condensed Consolidated Balance Sheet Highlights | Metric | March 31, 2021 (Millions USD) | December 31, 2020 (Millions USD) | | :--- | :--- | :--- | | Cash and cash equivalents | $40.5 million | $48.5 million | | Total current assets | $108.8 million | $107.2 million | | Goodwill | $453.6 million | $458.4 million | | Total assets | $1,126.1 million | $1,133.5 million | | Total current liabilities | $55.4 million | $57.5 million | | Long-term debt | $427.0 million | $432.7 million | | Total liabilities | $602.3 million | $610.6 million | | Total shareholders' equity | $523.8 million | $522.9 million | Condensed Consolidated Statements of Cash Flows (Q1 2021 vs Q1 2020) | Cash Flow Activity | Three Months Ended March 31, 2021 (Millions USD) | Three Months Ended March 31, 2020 (Millions USD) | | :--- | :--- | :--- | | Net cash provided by operating activities | $12.5 million | $11.6 million | | Net cash used in investing activities | ($11.2) million | ($10.5) million | | Net cash used in financing activities | ($8.8) million | ($0.4) million | | Net (Decrease) Increase in Cash | ($8.0) million | $0.5 million | | Cash and Cash Equivalents, end of period | $40.5 million | $20.2 million | - The company adopted ASC 842, Leases, on January 1, 2021, using the modified retrospective method, resulting in the recognition of right-of-use assets and lease liabilities on the balance sheet for the first time2931 Management's Discussion and Analysis of Financial Condition and Results of Operations Strong Q1 2021 performance, with 38.3% revenue growth driven by e-commerce demand and a 12.9% increase in the installed packaging system base, led to a 54.7% rise in constant currency Adjusted EBITDA - The installed base of protective packaging systems grew by 12.9% year-over-year, reaching 120.7 thousand units as of March 31, 2021, with the largest growth in Void-fill (13.5%) and Wrapping (31.7%) machines146 - The COVID-19 pandemic positively impacted demand from e-commerce end-users, though social distancing measures delayed some new packaging system installations144 Net Revenue by Geography (GAAP) | Region | Q1 2021 Revenue (Millions USD) | Q1 2020 Revenue (Millions USD) | % Change | | :--- | :--- | :--- | :--- | | North America | $28.1 million | $27.1 million | +3.7% | | Europe/Asia | $59.6 million | $36.3 million | +64.2% | | Total | $87.7 million | $63.4 million | +38.3% | Non-GAAP Constant Currency AEBITDA Reconciliation | Metric | Three Months Ended March 31, 2021 (Millions USD) | Three Months Ended March 31, 2020 (Millions USD) | % Change | | :--- | :--- | :--- | :--- | | Net income (loss) (GAAP) | $6.3 million | ($3.6) million | N/A | | Constant currency net income (loss) | $6.1 million | ($3.6) million | N/A | | Constant currency EBITDA | $28.5 million | $15.5 million | +83.9% | | Constant currency AEBITDA | $28.0 million | $18.1 million | +54.7% | - The company paid an $8.2 million "Exit Payment" to its lenders in Q1 2021, as required by its credit agreement due to achieving a lower leverage ratio at year-end 2020187195 Quantitative and Qualitative Disclosures About Market Risk The company faces interest rate, foreign currency, and commodity price risks, with significant foreign currency exposure as 70.4% of Q1 2021 revenue was non-USD denominated, primarily in Euro - A hypothetical 100 basis point change in interest rates would have impacted cash interest expense by $1.1 million for Q1 2021, a risk managed with interest rate swaps201 - The company has significant foreign currency exchange risk, with 70.4% of Q1 2021 net revenue denominated in non-U.S. dollar currencies, mainly the Euro, where a 10% fluctuation would change reported net revenue by about $6.0 million204 - The company does not currently hedge its foreign exchange transaction or translation exposure but may consider it in the future203 Controls and Procedures Management concluded that disclosure controls and procedures were effective as of March 31, 2021, with no material changes to internal control over financial reporting during the quarter - Management concluded that the company's disclosure controls and procedures were effective as of March 31, 2021207 - No material changes to the company's internal control over financial reporting occurred during the first quarter of 2021208 Part II – Other Information Legal Proceedings The company reported no legal proceedings during the period - None209 Risk Factors No material changes to risk factors were reported from those disclosed in the 2020 Annual Report on Form 10-K - There are no material changes in risk factors from those disclosed in the 2020 10-K210 Unregistered Sales of Equity Securities and Use of Proceeds The company reported no unregistered sales of equity securities or use of proceeds during the period - None211 Defaults Upon Senior Securities The company reported no defaults upon senior securities - None211 Mine Safety Disclosures This item is not applicable to the company - Not applicable212 Other Information The company reported no other information - None213 Exhibits This section lists exhibits filed with the Form 10-Q, including corporate documents and CEO/CFO certifications - The exhibits filed with this report include CEO and CFO certifications pursuant to Sections 302 and 906 of the Sarbanes-Oxley Act, and Inline XBRL documents215