PRMW Jan 2016 Investor Presentation

8/20/2019 PRMW Jan 2016 Investor Presentation

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ICR Conference

January 12, 2016


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INVESTOR HIGHLIGHTS

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• Only Single Vendor Retail Solution

• Established Enviable Customer Base

• Well-Positioned for Industry & Consumer Trends

•Proven Executive Track Record

• Strong Growth Prospects w/ Operating Scale

• Strong Financial Trends


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ONLY SINGLE VENDOR RETAIL SOLUTION

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DISPENSERS EXCHANGE REFILL


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RECURRING REVENUE BUSINESS

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Sell 1 Appliance

Average of 35 Annual

Purchases

xchange

Refill Weekly Grocery Trips

RAZOR

Water Dispenser

RAZORBLADE

Water Exchange & Refill


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Home Centers

Membership

Warehouses

ass Merchants Grocery Stores Drug Stores Hardware Stores

Dispensers Exchange Refill

24,000+ Locations and Growing

ENVIABLE RETAIL CUSTOMER BASE

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Source: Company Information


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“14%declinein(soda)volumesince2004”*

“ManyscientistsbelievethatsodascontainingHFCSareamajorcontributortoepidemicsofobesityanddiabetes.”*

“Thesciencebaselinkingtheconsumptionofsugar -sweetened

beveragestotheriskofchronicdiseaseisclear.”*

FAVORABLE HEALTH TRENDS – SODA DECLINE

Heightened

negative focus

on obesity &

sugar

consumption

*Forbes (May 2015) – WhySodasAre(Probably)theNextCigarettes

**BusinessInsider(Nov.2015)– There’sanewBigTobacco…


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Source: Beverage Marketing Corporation

o Bottled water has increased its share of the beverage market from 11.8% (‘03) to 17.8% in ‘04

o Sales of bottled water in 2014 grew to $13 billion, a 6.1% increase from the prior year

o By 2016, bottled water is expected to overtake carbonated soft drinks as the #1 packaged beverage in

the United States

FAVORABLE HEALTH TRENDS – W TER SURP SSING CSD’S


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FAVORABLE ENVIRONMENTAL TRENDS: TAP WATER & RECYCLING

CONCERNS

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Source: International Bottled Water Association

• Municipal tap water quality concerns

o Municipal systems underinvested

•Taste preference; F

ilters ≠ Purified

Water

• Environmental & sustainability movements continue

o >70% of single serve bottles end up

landfills annually

o Continued challenges to reduce or even

ban single serve bottles gain

momentum

U S Geological Service identifies

“ mpaired Waters”

(definedasnotmeetingguidelinesforsustainablewaterquality)

in literally every state in the U S


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WATER NOW REPRESENTS 31.4% SHARE OF STOMACH

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Source: Beverage Marketing Corporation: Multiple Beverage Marketplace in the U.S.


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PROVEN EXECUTIVE TRACK RECORD

Billy Prim

Founder, Chairman & Chief Executive

Officer

Matt Sheehan

President & Chief Operating Officer

Mark Castaneda

Chief Financial Officer

Rick Belmont

Senior Vice President and General

Manager of Dispensers & Innovation

Jamila Granger

Vice President, General Counsel

David Hass

Vice President, Strategy, Financial

Planning & Analysis

Bob Heer

Vice President, General Manager of

Refill

David Mills

Vice President, Finance

Bob Travatello

Vice President, MIS

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EXECUTIVE POSITION RELEVANT WORK EXPERIENCE


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GROWTH STRATEGY

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Grow Household Penetration of Dispensers

Improve Connectivity

Increase Retail Outlets

Drive Unit Economics


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• Room temperature, cold, and hot options

• Top and bottom load, plus stainless steel

GROW HOUSEHOLD PENETRATION IN DISPENSERS

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STRONG & CONSISTENT DISPENSER: SELL-THRU TRENDS

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QUARTERLY DISPENSER SELL-THRU


•Q3 record sell-thru of 144,000 a 10% increase over 2014

• Average household consumes 35 five-gallon bottles per year


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IMPROVED CONNECTIVITY & MARKETING INVESTMENT

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Improved Communications

and Water Coupons in

Dispensers

Improved in StoreCommunication

Expanded reach throughsocial and digital

On your first purchase of

Primo Exchange Water

Save$

5

VALID 1/1/2014-6/30/2015

RETAILER: Wewillreimburseyouthefacevalueofthiscouponplus8¢handling providedyouandthe consumerhavecomplied

withthetermsofthisoffer. Invoicesprovingpurchasesof

sufficient stockto coverpresentedcouponsmustbe shownonrequest.Anyother applicationmay constitutef raud.

Couponvoidwhere prohibited, taxedor restricted.

Consumermustpayany salestax. Cashvalue.001¢.

Reproductionof thiscouponis expresslyprohibited.Mailto: PrimoWater,InmarDept.#51199,

OneFawcett Drive,Del Rio,TX78840

Get

Started

TodayUsetheseredeemablecouponstotry Primo

Water.

PNR0832013-11-12

RETAILER: Wewillreimburseyou thefacevalue of thiscouponplus8¢hand lingprovidedyou andtheconsumer havecompliedwitht hetermsof thisoffer.Invoicesproving purchasesof sufficient stockto coverpresentedcouponsmust beshownonrequest. Anyotherapplicationmay constitutefraud.Couponvoidwhereprohibited,taxedorrestricted. Consumermust payanysalest ax.Cashvalue.001¢.Reproductionof thiscouponisexpresslyprohibited.Mailt o:PrimoWater,InmarDept.# 51199,OneFawcett Drive,DelRio,TX78840

5 GallonRefillof PrimoWater

$1 OFFVALID 1/1/2014-6/30/2015

RETAILER: Wewillreimburseyou thefacevalue of thiscouponplus8¢hand lingprovidedyou andtheconsumer havecompliedwiththe termsof thisoffer.Invoicesprovingpurchasesof sufficient stockto coverpresentedcouponsmust beshownonrequest. Anyotherapplicationmay constitutefraud.Couponvoidwhereprohibited,taxedorrestricted. Consumermust payanysales tax.Cashvalue.001¢.Reproductionof thiscouponisexpresslyprohibited.Mailt o:PrimoWater,InmarDept.# 51199,OneFawcett Drive,DelRio, TX78840

5 GallonRefillof PrimoWater

$1 OFFVALID 1/1/2014-6/30/2015

Tyler Ayers

Vice President, Marketing


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STRONG EXCHANGE SELL-THRU TRENDS

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QUARTERLY U.S. EXCHANGE SELL-THRU



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-

5 000

10 000

15 000

20 000

25 000

30 000

35 000

40 000

45 000

50 000

55 000

60 000

RUNWAY FOR RETAIL EXPANSION TO 50K LOCATIONS

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Source: Company Information.

18,400Water Locations

Convenient

Availability

50k – 60k

Large Market Opportunity: 200,000+ Locations

in the U.S. and Canada

Remaining

Opportunity w/

Existing Relationships

New Channels

New Retailers


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IMPROVED UNIT ECONOMICS: GROSS MARGIN

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Leverages Company Service

Technicians in dense markets

Improved service, brand presence andenhanced Gross Margins

Selective deployment remains in the

U.S. and Canada

R

L

Transition of a majority of the U.S. Bottling

and Distribution Services to one primarydistributor (DS Services)

Improved distribution costs, delivery

frequency and proximity to retail clients.

Reduced market completion

Improved Gross Margins through lower

bottle and material costs due to volumeincreases

Improved Gross Margins due to Distribution

cost decreases based on volume and

contract anniversaryE

H

N

G

E

DISTRIBUTION EFFICIENCIES

SERVICING AND SOURCING EFFICIENCIES

Improved empty bottle sourcing and

logistics to improve Gross Margins

Developed new equipment withimprovement in overall cost increasing

Return On Investment


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FINANCIAL RESULTS


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STRONG Q3 RESULTS

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Source: Company SEC Filings. Adjusted SG&A and Adjusted EBITDA are non-GAAP measures.

Revenue growth of 28% to $33.9 million, exceeding

expectations

Sell-thru of dispensers increased 10%

Strong growth at retail with U.S. exchange same-store unit

growth of 11.6%

Sales growth and operating efficiency propelled adjusted

EBITDA growth of over 31% to $5.2 million, exceeding

expectations.

Raised outlook for the remainder of 2015


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STRONG YTD RESULTS

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Source: Company SEC Filings. Adjusted SG&A and Adjusted EBITDA are non-GAAP measures and exclude primarily non-cash stock compensation expense.

Revenue was $95.5 million, an increase of 24.4% over 2014

Water segment net revenue increased 29.7% to $67.2 million

U.S. exchange same-store unit growth of 9.5%

Dispenser sell-thru of 394K, up 6.8% over 2014

Adjusted EBITDA increased 37.8% to $13.3 million

Earnings from continuing operations of $0.07 per diluted

share compared to a loss of $(0.41) in 2014


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FINANCIAL MOMENTUM & SCALE

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NET REVENUE ADJ SG&A % of NET REVENUE

ADJUSTED EBITDA

(All 's in 000's)



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• Total debt of $21.3 million down from $24.3 million at Dec 31, 2014

• Total debt to adjusted EBITDA improved to 1.29x in 2015 from 2.40x in

2014

• Operating cash flow of $10.0 million for the first nine months of 2015

• Free cash flow for the $4.5 million for the first nine months of 2015

Summary Balance Sheet September 30, 2015

Current assets $21,263 Current liabilities $17,561

Capital assets 36,260 Long-term liabilities 23,600

Other assets 9,155 Stockholders’ equity 25,517

Total assets $66,678 Total liabilities and equity $66,678

SOLID BALANCE SHEET AND CASH FLOW

Source: Company SEC Filings.


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SOLID LONG-TERM PERFORMANCE TARGETS

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REVENUE GROWTH

ADJ. SG&A

% OF NET REVENUE

ADJ. EBITDA MARGIN

FINANCIAL METRIC 2014 5 YEAR TARGETS

GROSS MARGIN

% OF NET REVENUE

16.6% 7% - 15%

14.0% 10% - 12%

9.9% 15% - 20%

26.2% 25% - 35%

2013

(0.3%)

15.1%

25.0%

12.2%

Q315

28.4%

12.6%

28.1%


15.5%


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INVESTOR SUMMARY

• Only Single Vendor Retail Solution

• Established Enviable Customer Base

• Well-Positioned for Industry & Consumer

Trends

•Proven Executive Track Record

• Strong Growth Prospects w/ Operating

Scale

•

Strong Financial Trends

Documents

PRMW Jan 2016 Investor Presentation