Primo Brands Corporation

05/07/2026 | Press release | Distributed by Public on 05/07/2026 10:16

Quarterly Report for Quarter Ending March 31, 2026 (Form 10-Q)

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Objective
This Management's Discussion and Analysis of Financial Condition and Results of Operations is intended to further the reader's understanding of the condensed consolidated financial condition and results of operations of the Company. It should be read in conjunction with the financial statements included in this Quarterly Report on Form 10-Q ("Form 10-Q") and the Annual Report on Form 10-K for the fiscal year ended December 31, 2025 (the "2025 Annual Report"). These historical financial statements may not be indicative of our future performance. This discussion contains a number of forward-looking statements, all of which are based on our current expectations and could be affected by the uncertainties and risks referred to under "Risk Factors" in Part I, Item 1A. in our 2025 Annual Report. When used in this report, the terms "the Company," "our Company," "Primo Brands," "we," "us," or "our" refers to Primo Brands Corporation, together with its consolidated subsidiaries.
Overview
Primo Brands is a leading North American branded beverage company focused on healthy hydration, delivering responsibly sourced diversified offerings across products, formats, channels, price points, and consumer occasions, distributed in every U.S. state and Canada.
We have a comprehensive portfolio of highly recognizable and conveniently packaged branded water and beverages that reach consumers whenever, wherever, and however they hydrate through distribution across retail outlets, away from home such as hotels and hospitals, and hospitality and food service accounts, as well as direct delivery to homes and businesses. These brands include established "billion-dollar brands" Poland Spring® and Pure Life®, premium brands like Saratoga® and The Mountain Valley®, leading regional spring water offerings such as Arrowhead®, Deer Park®, Ice Mountain®, Ozarka®, and Zephyrhills®, purified water brands including Primo Water® and Sparkletts®, and flavored and enhanced beverages like Splash Refresher™ and AC+ION®. We also have an industry-leading line-up of innovative water dispensers, which create consumer connectivity through recurring water purchases. We operate a vertically integrated coast-to-coast network that distributes our brands to more than 200,000 retail outlets, as well as directly reaching customers and consumers through our Direct Delivery, Exchange and Refill offerings. Through Direct Delivery, we deliver responsibly sourced hydration solutions direct to home and business customers. Through our Exchange business, consumers can visit approximately 26,500 retail locations and purchase a pre-filled, multi-use bottle of water that can be exchanged after use for a discount on the next purchase. Through our Refill business, consumers have the option to refill empty multi-use bottles at over 23,500 self-service refill stations. We also offer water filtration units for home and business customers across North America. We are a leader in reusable beverage packaging, helping to reduce waste through its multi-serve bottles and innovative brand packaging portfolio, which includes recycled plastic, aluminum, and glass. We have a portfolio of over 80 springs and actively manage water resources to help assure a steady supply of quality, safe drinking water today and in the future. We also help conserve over 28,000 acres of land across the U.S. and Canada. We are proud to partner with the International Bottled Water Association ("IBWA") in North America, which supports strict adherence to safety, quality, sanitation, and regulatory standards for the benefit of consumer protection. We are committed to supporting the communities we serve, investing in local and national programs and delivering hydration solutions following natural disasters and other local community challenges. We employ more than 12,000 associates with dual headquarters in Tampa, Florida, and Stamford, Connecticut.
The Transaction
On November 8, 2024, Primo Brands consummated the transactions contemplated by the Arrangement Agreement and Plan of Merger (the transactions effecting the Arrangement Agreement, the "Transaction"), pursuant to which Primo Water Corporation ("Primo Water") and Triton Water Parent, Inc. ("BlueTriton") were combined, creating Primo Brands.
Trends and Factors Affecting Results of Operations
Evolving Customer Trends
We believe we are well-positioned to benefit from evolving consumer trends, as well as the continued acceleration of e-commerce. These favorable trends, combined with the broad appeal of our brands, provide us with a significant opportunity to drive the growth of our business.
•Ability to Increase Brand Awareness - Our ability to increase brand awareness has and will continue to contribute meaningfully to our performance. We focus on creating, capturing and retaining new demand by increasing our brand awareness while also increasing our value proposition to our customers. We aim to continue to increase our
brand awareness through continued local community engagement, national media campaigns, growing our social community and innovating our packaging to make our brands and products visually appealing and distinctive from other bottled water brands.
•Product Innovation and Expansion - We see significant potential to grow our sales in underpenetrated, high-growth segments of the bottled water category, such as sparkling, flavored and enhanced waters, by leveraging the brand equity of our existing brands to develop new and innovative beverage offerings. Through the flexible production capabilities of our existing infrastructure and our extensive distribution and retail relationships, we believe we will be able to quickly develop, produce and commercialize new products. We intend to continue investing in innovations within our product portfolio, as well as the development and introduction of new products.
•E-commerce - Given the trend towards growth of sales through e-commerce websites and mobile commerce applications, including through subscription services and other direct-to-consumer businesses, the consumer is leveraging multiple methods of engagement including the digital marketplace.
Consolidation in the Retail Industry
Our industry has been affected by the trend toward consolidation in the retail channel. Many of our retail customers have consolidated in recent years, and this consolidation trend may continue. As a result, our retail customers may seek lower pricing and demand increased marketing or promotional expenditures from us. Large retailers are also increasingly using their distribution networks and economies of scale to introduce and develop private-label brands, such as those carried by supermarket chains, convenience store chains, drug store chains, mass merchants and club warehouses. See Item 1A. "Risk Factors - Risks Related to our Customers, Suppliers and Associates" in our 2025 Annual Report.
General Economic Conditions and Other Factors
Our operations and supplier relationships expose us to risks associated with disruptions to global supply chains and tariffs, which are likely to continue to create challenging conditions for our business through increased costs, lower consumer spending, volatility in financial markets and other impacts. In addition, the ongoing conflict in Iran and broader geopolitical instability in the Middle East may further disrupt global supply chains, increase energy and raw material costs, and contribute to market volatility. While we have taken steps to minimize these impacts, global supply chain disruption may deteriorate, which could adversely affect our business, financial condition, results of operations and cash flows.
The markets in which we operate are subject to seasonal variations. Our water sales are generally higher during the warmer months and our purchases of raw materials and related accounts payable fluctuate based upon the demand for our products. This seasonality causes our working capital needs to fluctuate throughout the year.
We conduct operations in Canada and are subject to currency exchange risks to the extent that our costs are denominated in currencies other than those in which we earn revenues. As our financial statements are denominated in U.S. dollars, fluctuations in currency exchange rates between the U.S. dollar and the Canadian dollar have had, and will continue to have, an impact on our results of operations.
Ingredient and packaging costs represent a significant portion of our cost of sales. These costs are subject to global and regional commodity price trends. Our most significant commodities are polyethylene terephthalate ("PET") resin, glass, aluminum, high-density polyethylene ("HDPE") and low-density polyethylene ("LDPE"). We attempt to manage our exposure to fluctuations in ingredient and packaging costs by entering into fixed price commitments for a portion of our ingredient and packaging requirements and implementing price increases as needed.
Non-GAAP Financial Measures
We present certain non-GAAP measures in this Quarterly Report, including Adjusted EBITDA and measures derived therefrom, which are not required by, or presented in accordance with, U.S. GAAP. We define Adjusted EBITDA as net income (loss) before interest and financing expense, net, provision for (benefit from) income taxes, and depreciation and amortization, further adjusted for acquisition, integration and restructuring expenses, stock-based compensation costs, impairment charges, unrealized loss (gain) on foreign exchange and commodity forwards, loss on disposal of property, plant and equipment, net, loss on modification and extinguishment of debt, management fees, purchase accounting adjustments, and other adjustments, net. This is an important metric that management uses as an analytical indicator to evaluate our performance, allocate resources, and measure leverage. We believe that Adjusted EBITDA is a useful metric for management, investors, and analysts because it excludes certain items that can vary widely across different industries or among companies within the same industry, and it removes the impact of items that we do not believe are indicative of our core operating performance. These differences can result in considerable variability in the relative costs of productive assets
and the depreciation and amortization expense among companies, and we believe these adjustments allow for consistent comparison of our operating results over time and relative to our peers.
We use Adjusted EBITDA to supplement U.S. GAAP measures of performance in evaluating the effectiveness of our business strategies, and to establish annual budgets and forecasts. We also use Adjusted EBITDA as a target for short-term incentive compensation for management.
Adjusted EBITDA should be considered in addition to, and not as a substitute for or superior to, financial measures calculated in accordance with U.S. GAAP. It is not a measurement of our financial performance under U.S. GAAP and should not be considered as an alternative to net income (loss) or any other performance measures derived in accordance with U.S. GAAP and may not be comparable to other similarly titled measures of other businesses. This non-GAAP metric does not necessarily indicate whether cash flow will be sufficient or available to meet our cash requirements and may not be indicative of our historical operating results, nor are such measures meant to be predictive of our future results. In the future, we may incur expenses similar to the adjustments noted herein to calculate Adjusted EBITDA. However, the magnitude of such adjustments for the periods presented herein is not necessarily indicative of the magnitude of such adjustments in future periods. Our presentation of Adjusted EBITDA should not be construed as an inference that future results will be unaffected by unusual or non-recurring items.
Adjusted EBITDA has limitations as an analytical tool, and you should not consider this measure in isolation or as a substitute for analysis of our operating results as reported under U.S. GAAP. Some of these limitations include that:
•Adjusted EBITDA does not reflect our cash expenditures, or future requirements, for capital expenditures or contractual commitments;
•Adjusted EBITDA does not reflect changes in, or cash requirements for, our working capital needs;
•Adjusted EBITDA does not reflect the significant interest expense, or the cash requirements necessary, to service interest on our indebtedness;
•although depreciation and amortization are non-cash charges, the assets being depreciated and amortized will often have to be replaced in the future, and not all of these measures reflect cash requirements for such replacements;
•non-cash compensation is a key element of our long-term executive incentive compensation package, although we exclude it as an expense when evaluating our ongoing operating performance for a particular period;
•the fact that other companies in our industry may calculate these measures differently than we do, which limits its usefulness as a comparative measure; and
•this measure does not reflect the impact of certain cash charges resulting from matters we consider not to be indicative of our ongoing operations.
Furthermore, we compensate for the limitations described above by relying primarily on our U.S. GAAP results and using Adjusted EBITDA only for supplemental purposes.
The following table reconciles net income, the most directly comparable U.S. GAAP measure, to Adjusted EBITDA for the periods presented:
Three Months Ended March 31,
($ in millions) 2026 2025
Net income from continuing operations $ 27.3 $ 34.7
Interest and financing expense, net 78.3 82.1
Provision for income taxes 13.5 17.7
Depreciation and amortization 141.0 128.6
EBITDA
$ 260.1 $ 263.1
Acquisition, integration and restructuring expenses1,2
41.2 39.8
Stock-based compensation costs 9.9 12.0
Unrealized (gain) loss on foreign exchange and commodity forwards, net (28.5) 0.2
Loss on disposal of property, plant and equipment, net 1.9 1.5
Loss on modification and extinguishment of debt 17.7 18.6
Purchase accounting adjustments - 1.2
Other adjustments, net 3.7 5.1
Adjusted EBITDA $ 306.0 $ 341.5
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1 Amounts include labor-related costs.
2 Amounts include the integration-related costs recorded within Cost of sales as disclosed in Note - 8 - "Acquisition, integration and restructuring expenses".
Three Months Ended March 31, 2026 Compared to the Three Months Ended March 31, 2025
Consolidated Results
The following table sets forth our consolidated statements of operations data for the periods indicated:
Three Months Ended March 31,
($ in millions) 2026 % of Net Sales 2025 % of Net Sales $ Variance % Change
Net sales $ 1,626.1 100.0 % $ 1,613.7 100.0 % $ 12.4 0.8 %
Cost of sales 1,161.2 71.4 % 1,092.7 67.7 % 68.5 6.3 %
Gross profit 464.9 28.6 % 521.0 32.3 % (56.1) (10.8) %
Selling, general and administrative expenses 336.7 20.7 % 327.8 20.3 % 8.9 2.7 %
Acquisition, integration and restructuring expenses 20.8 1.3 % 39.8 2.5 % (19.0) (47.7) %
Other operating (income) expense, net (30.6) (1.9) % 0.2 - % (30.8) NM
Operating income 138.0 8.5 % 153.2 9.5 % (15.2) (9.9) %
Other expense, net 1.2 0.1 % 0.1 - % 1.1 NM
Loss on modification and extinguishment of debt 17.7 1.1 % 18.6 1.2 % (0.9) (4.8) %
Interest and financing expense, net 78.3 4.8 % 82.1 5.1 % (3.8) (4.6) %
Income from continuing operations before income taxes 40.8 2.5 % 52.4 3.2 % (11.6) (22.1) %
Provision for income taxes 13.5 0.8 % 17.7 1.1 % (4.2) (23.7) %
Net income from continuing operations $ 27.3 1.7 % $ 34.7 2.2 % $ (7.4) (21.3) %
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NM is defined as not meaningful.
The following table sets forth our consolidated Net sales by water type:
Three Months Ended March 31,
($ in millions) 2026 2025 $ Variance % Change
Regional spring water $ 801.2 $ 794.1 $ 7.1 0.9 %
Purified water 511.2 514.4 (3.2) (0.6) %
Premium water 105.5 73.9 31.6 42.8 %
Other water 30.5 34.8 (4.3) (12.4) %
Other 177.7 196.5 (18.8) (9.6) %
Total Net sales $ 1,626.1 $ 1,613.7 $ 12.4 0.8 %
Net Sales
During the three months ended March 31, 2026, net sales were $1,626.1 million, an increase of $12.4 million, or 0.8%, as compared to the three months ended March 31, 2025, primarily due to an increase in sales attributable to our premium brands of $31.6 million, partially offset by a decrease of $11.1 million related to the divested coffee business.
Cost of Sales
Cost of sales consists primarily of manufacturing, shipping and logistics, storage and handling, personnel costs and allocated facilities and overhead costs associated with products sold. Manufacturing costs consist primarily of raw materials, packaging costs and labor and utilities to convert raw materials into finished products.
During the three months ended March 31, 2026, cost of sales were $1,161.2 million, an increase of $68.5 million, or 6.3%, as compared to the three months ended March 31, 2025, primarily due to increased transportation related costs of $24.2 million, non-recurring integration related costs incurred in the current year period of $20.4 million, and increased depreciation and amortization of $11.4 million, partially offset by a decrease of $10.8 million related to the divested coffee business.
Gross Profit and Gross Margin
During the three months ended March 31, 2026, gross profit was $464.9 million, a decrease of $56.1 million, or 10.8%, as compared to the three months ended March 31, 2025, and gross margin as a percentage of net sales was 28.6%, as compared to 32.3% during the three months ended March 31, 2025, primarily driven by the factors discussed above.
Selling, General and Administrative Expenses
Costs recorded in selling, general and administrative expenses include product marketing and advertising expenses, selling costs, including commissions, information technology ("IT") and all other costs associated with corporate functions, oversight and support.
During the three months ended March 31, 2026, selling, general and administrative expenses were $336.7 million, which remained relatively consistent with an increase of $8.9 million, or 2.7%, as compared to the three months ended March 31, 2025.
Acquisition, Integration and Restructuring Expenses
Transaction costs include those associated with the Transaction, including subsequent costs directly related to its consummation. Other acquisition expenses include costs associated with our acquisitions, as well as costs incurred in connection with potential acquisitions. Integration and restructuring expenses mainly include costs incurred to achieve post-Transaction synergies, information technology implementation costs, and costs incurred in connection with business optimization, among others.
During the three months ended March 31, 2026, acquisition, integration and restructuring expenses were $20.8 million, a decrease of $19.0 million, as compared to the three months ended March 31, 2025, primarily due to lower integration costs incurred during the current year period compared to the prior year period as integration efforts begin to wind down as well as net restructuring gains in the current year period driven primarily by gains associated with the sale of facilities compared to net restructuring costs in the prior year period primarily driven by facility charges.
Other Operating (Income) Expense, Net
Other operating (income) expense, net, includes primarily unrealized foreign exchange (gains) losses, unrealized mark-to-market adjustments for commodity forwards and other infrequent income or charges.
During the three months ended March 31, 2026, other operating income, net was $30.6 million, compared to other operating expense, net during the three months ended March 31, 2025 of $0.2 million. This change is primarily due to unrealized gains on commodity forwards of $31.1 million during the current year period compared to unrealized gains of $1.1 million during the prior year period.
Other Expense, Net
Other Expense, net, includes primarily amortization of forward points and unrealized mark-to-market adjustments for foreign exchange forward contracts as well as other infrequent non-operating income or charges.
Other expense, net during the three months ended March 31, 2026 was $1.2 million, which remained relatively consistent with an increase of $1.1 million, as compared to the three months ended March 31, 2025.
Loss on Modification and Extinguishment of Debt
During the three months ended March 31, 2026, the loss on modification and extinguishment of debt was $17.7 million related to the refinancing of the Company's then-existing Term Loans (as defined below), compared to $18.6 million during the three months ended March 31, 2025 related to the debt refinancing consummated in the prior year period.
Interest and Financing Expense, Net
Interest and financing expense, net, primarily relates to interest expense on our debt and finance leases, revolver commitment fees and costs associated with our debt, partially offset by interest income earned on cash and cash equivalents, including restricted cash.
During the three months ended March 31, 2026, interest and financing expense, net, was $78.3 million, which remained relatively consistent with a decrease of $3.8 million, or 4.6%, as compared to the three months ended March 31, 2025.
Provision for Income Taxes
Income tax expense was $13.5 million for the three months ended March 31, 2026 compared to $17.7 million for the three months ended March 31, 2025. The effective tax rate was 33.1% for the three months ended March 31, 2026 compared to 33.8% for the three months ended March 31, 2025.
The effective tax rate for the three months ended March 31, 2026 decreased from the effective tax rate for the three months ended March 31, 2025 due primarily to a decrease in permanent differences for which we have not recognized a tax benefit. The effective tax rate for the three months ended March 31, 2025 differs from the U.S. statutory rate primarily due to permanent differences for which we have not recognized a tax benefit and losses in tax jurisdictions with existing valuation allowances.
Liquidity and Capital Resources
Historically, we have funded our operations, capital expenditures and acquisitions through a combination of cash generated from operating activities and debt financing, including our Term Loans and senior notes, consistent with our capital structure strategy in prior years.
Our principal liquidity requirements are for working capital and general corporate purposes, including capital expenditures and debt service, dividends and acquisitions. We have historically funded our operations and acquisitions primarily through cash provided by operating activities and debt financing.
We believe that a combination of cash generated from operating activities, and undrawn availability under the revolving credit facility which provides for revolving loans, swing line loans, and standby letters of credit in an aggregate amount of up to $750.0 million and will mature in February 2030 (the "Revolving Credit Facility") will provide sufficient liquidity to support our working capital needs, planned growth and capital expenditure needs, service the ongoing principal and interest payments on our indebtedness, and support our other funding and investment requirements for the next 12 months and for the foreseeable future. However, we do not expect to generate sufficient cash from operations to repay at maturity the entirety of the then-outstanding balances of our debt. As a result, we will be dependent upon our ability to refinance such indebtedness or access the credit markets or source additional equity investments to repay the outstanding balances of our indebtedness. Failure to raise significant amounts of funding to repay these obligations or to refinance our indebtedness on beneficial terms at maturity would adversely affect our financial condition. We may also require additional capital in the future to pursue attractive acquisition opportunities in our industry. In addition, our ability to service our indebtedness and to fund our other liquidity requirements will depend on our ability to generate and access cash in the future, which is subject to general economic, financial, contractual, competitive, legislative, regulatory and other factors, some of which are beyond our control, as well as the other factors described in Part I, Item 1A. "Risk Factors" in our 2025 Annual Report.
As of March 31, 2026, we had $288.2 million of cash on hand (of which $0.3 million is restricted). We had access to $750.0 million of revolving loan commitments (excluding $163.9 million of outstanding letters of credit) under the Revolving Credit Facility. We, or our affiliates, may from time to time seek to repurchase or retire outstanding debt through cash purchases and/or exchanges for equity securities, in open market purchases, privately negotiated transactions, tender offers or otherwise. Any future repurchases or exchanges, if any, will depend on prevailing market conditions, our liquidity, contractual restrictions, and other factors. The amounts involved may be material.
Description of Certain Indebtedness
Term Loans
On March 31, 2026, Primo Brands entered into an amendment (the "Fifth Amendment"), which amended that certain First Lien Credit Agreement, dated as of March 31, 2021 (as amended prior to the effectiveness of the Fifth Amendment, the "Existing Credit Agreement," and as further amended by the Fifth Amendment, the "Amended Credit Agreement" and such term loans thereunder, the "Term Loans"), by and among the Company, as the parent borrower, Triton Water Holdings, Inc. and Primo Water Holdings Inc., as borrowers (collectively, together with the Company, the "Borrowers"), the other guarantors party thereto, Morgan Stanley Senior Funding, Inc., as term loan administrative agent and collateral agent, and the other lenders party thereto.
The Fifth Amendment amended the Existing Credit Agreement to, among other things, refinance our then-existing Term Loans (maturing in March 2028) with a new senior secured first lien term loan facility (the "Refinancing Term Facility") resulting in Term Loans in an aggregate principal amount of $3,090.0 million and to make related changes to effect such refinancing. The Refinancing Term Facility will mature in March 2031 and will amortize in equal quarterly installments in an amount equal to 1.00% per annum of the principal amount. The proceeds of the Refinancing Term Facility were used to repay
and refinance the existing Term Loans outstanding under the Existing Credit Agreement and to pay fees, commissions, costs, expenses, and other amounts related thereto.
The interest rate applicable to borrowings under the Refinancing Term Facility will be, at our option, either (1) the base rate (which is the highest of (x) the overnight federal funds rate, plus 0.50%, (y) the prime rate on such day, and (z) the one-month Secured Overnight Financing Rate ("SOFR") published on such date, plus 1.00%), plus an applicable margin, or (2) one-, three- or six-month SOFR, plus an applicable margin. The applicable margin for SOFR loans under the Refinancing Term Facility will be 2.75%. The Refinancing Term Facility is subject to a SOFR floor of 0.50%.
Immediately prior to the Fifth Amendment, the outstanding balance of the then existing Term Loans was $3,067.6 million. The Fifth Amendment refinanced this balance into $3,090.0 million of Term Loans, representing a net principal increase of $22.4 million.
In connection with the Fifth Amendment, we assessed the refinancing on a lender-by-lender basis which was accounted for as a combination of debt modification and extinguishment. We recorded an unamortized debt discount of $15.5 million and unamortized debt issuance costs of $2.8 million which, along with the existing unamortized debt discount and debt issuance costs, are being amortized over the remaining term using the effective interest method. The write-off of unamortized debt issuance costs and unamortized debt discount, together with fees expensed in connection with the modification, resulted in a loss of $17.7 million, recorded in Loss on modification and extinguishment of debt in the Condensed Consolidated Statements of Operations for the three months ended March 31, 2026.
As of March 31, 2026 and December 31, 2025, unamortized debt issuance costs and discount related to the Term Loans were $52.1 million and $39.4 million, respectively.
There have been no material changes to the description or terms of our other indebtedness included in the 'Description of Certain Indebtedness' section of our 2025 Annual Report.
Debt Covenants
The Term Loans contain customary negative covenants including, but not limited to, restrictions on the ability of the Company and its restricted subsidiaries to merge and consolidate with other companies, incur indebtedness, grant liens or security interests on assets, pay dividends or make other restricted payments, optionally prepay or modify terms of certain junior indebtedness, sell or otherwise transfer certain assets, or enter into transactions with affiliates (in each case subject to permitted exceptions).
The Revolving Credit Facility contains customary covenants, including, but not limited to, restrictions on our ability and the ability of our subsidiaries to merge and consolidate with other companies, incur indebtedness, grant liens or security interests on assets, make acquisitions, loans, advances, or investments, pay dividends or make other restricted payments, sell or otherwise transfer assets, optionally prepay or modify terms of certain junior indebtedness, enter into transactions with affiliates, or change our line of business (in each case subject to permitted exceptions). The Revolving Credit Facility requires the maintenance of (i) a first lien net leverage ratio of less than or equal to 5.00 to 1.00, with no step-downs, and a 0.50 to 1.00 step-up for any four fiscal quarter period in which a material acquisition is consummated, and (ii) a minimum interest coverage ratio of 2.00 to 1.00 at the end of each fiscal quarter.
Under the indentures governing the Company's outstanding senior notes, the Company is subject to a number of covenants, including covenants that limit the Company and certain of its subsidiaries' ability, subject to certain exceptions and qualifications, to, among other things, (i) incur additional debt or issue certain preferred stock, (ii) pay dividends, redeem stock, or make other distributions, (iii) make other restricted payments or investments, (iv) create liens on assets, (v) transfer or sell assets, (vi) create restrictions on payment of dividends or other amounts by the Company to the Company's restricted subsidiaries, (vii) engage in mergers or consolidations, (viii) engage in certain transactions with affiliates, and (ix) designate the Company's subsidiaries as unrestricted subsidiaries. The covenants are substantially similar across each series of the Company's senior notes. Many of the covenants contained in the indentures will not be applicable, and the guarantees of certain senior notes will be released, during any period when the notes have an investment grade rating.
The Company was in compliance with all covenants under the agreements governing its indebtedness as of March 31, 2026.
Credit Ratings
Our objective is to maintain credit ratings that provide us with ready access to global capital and credit markets at favorable interest rates.
As of March 31, 2026, our credit ratings were as follows:
Credit Ratings
Moody's Standard and Poor's
Corporate / Family B1 BB-
Senior Secured Ba3 BB
Senior Unsecured B3 B
Outlook Positive Neutral
Any downgrade of our credit ratings by either Moody's or Standard and Poor's could increase our future borrowing costs or impair our ability to access the capital markets on terms commercially acceptable to us or at all.
Foreign Exchange Forward Contracts
We use foreign exchange forward contracts to manage the foreign exchange risk associated with the principal balance of our €441.9 million 3.875% Senior Secured Notes due October 31, 2028 and €8.1 million non-tendered 3.875% Senior Notes (collectively, the 'Euro Notes'). Forward contracts are agreements to buy or sell a quantity of a currency at a predetermined future date, and at a predetermined rate or price and are traded over-the-counter.
As part of the Transaction, we acquired foreign exchange forward contracts with a combined notional amount of €450.0 million and a maturity date of October 31, 2025 (the "2024 FX Forwards").
On August 6, 2025, we net settled the 2024 FX Forwards and simultaneously entered into new foreign exchange contracts with a combined notional amount of €450.0 million ($516.7 million at exchange rates in effect on March 31, 2026) and a maturity date of November 1, 2027 to hedge the foreign exchange risk associated with the Euro Notes.
Interest Rate Swaps
During the year ended December 31, 2025, we entered into two float-to-fixed interest rate swaps with notional amounts of $250.0 million each, maturing December 31, 2026 and December 31, 2027, respectively, to hedge the variable interest rate risk associated with $500.0 million of Term Loans principal.
Issuer Purchases of Equity Securities
Share Repurchase Program
On August 6, 2025, our Board of Directors approved a share repurchase program of $250.0 million of our outstanding Class A common stock (the "Share Repurchase Program"). On November 9, 2025, the Board of Directors approved an increase of $50.0 million to the Share Repurchase Program, bringing the total authorization under the program to $300.0 million worth of our outstanding Class A common stock. Repurchases under the Share Repurchase Program may be made from time to time at the discretion of management through open market purchases, block trades, accelerated or other structured share repurchase programs, privately negotiated transactions, Rule 10b5-1 plans or other means. The manner, timing, pricing and amount of any transactions will be subject to the discretion of management and may be based upon market conditions, regulatory requirements and alternative opportunities that we may have for the use or investment of capital.
During the three months ended March 31, 2026, we repurchased 1,539,175 shares of our Class A common stock for an aggregate purchase price of approximately $29.0 million through open market transactions under the Share Repurchase Program. As of March 31, 2026, the Company had $78.3 million of authorization remaining under the Share Repurchase Program.
Repurchased shares were subsequently retired. Please refer to the table in Part II, Item 2 of this Quarterly Report.
We are unable to predict the number of shares of Class A common stock that ultimately will be repurchased under the current Share Repurchase Program, or the aggregate dollar amount of shares of Class A common stock to be purchased in future periods. We may discontinue purchases at any time, subject to compliance with applicable regulatory requirements.
Share Repurchases
On March 10, 2025, we entered into an underwriting agreement (the "Underwriting Agreement") with Triton Water Parent Holdings, LP and its affiliates (the "Sponsor Stockholder") and Morgan Stanley & Co. LLC and BofA Securities, Inc., as representatives of the several underwriters named therein (collectively, the "Underwriters"), in connection with the underwritten secondary offering by the Sponsor Stockholder of 51,750,000 shares of our Class A common stock, which included the full exercise by the Underwriters of their option to purchase up to 6,750,000 additional shares of Class A common stock, at an offering price of $29.50 per share (the "March Offering"). The March Offering closed on March 12, 2025. The Sponsor Stockholder received all of the net proceeds from the March Offering. No shares were sold by us. Following the March Offering, we were no longer considered a controlled company.
Pursuant to the Underwriting Agreement, we agreed to purchase 4,000,000 shares of our Class A common stock for approximately $114.1 million from the Underwriters at a price per share equal to the price paid by the Underwriters to the Sponsor Stockholder in the March Offering (the "March Share Repurchase"). We funded the March Share Repurchase with cash on hand and the repurchased shares of Class A common stock are no longer outstanding.
Tax Withholding
During the three months ended March 31, 2026 and 2025, 191,390 and 164,738 shares of our Class A common stock were withheld from delivery to our employees to satisfy their tax obligations related to the vesting of equity-based awards. Please refer to Part II, Item 2 of this Quarterly Report.
Dividend Payments
On February 18, 2026, the Board of Directors declared a dividend of $0.12 per share on our outstanding Class A common stock, payable in cash on March 23, 2026 to stockholders of record at the close of business on March 6, 2026.
On April 28, 2026, the Board of Directors declared a dividend of $0.12 per share on our outstanding Class A common stock of the Company, payable in cash on June 15, 2026 to stockholders of record at the close of business on June 4, 2026.
Cash Flows
The following table sets forth a summary of our cash flows for the periods indicated (in millions) as reported in our Condensed Consolidated Statements of Cash Flows in the accompanying Condensed Consolidated Financial Statements:
Three Months Ended March 31,
($ in millions) 2026 2025
Net cash provided by operating activities of continuing operations $ 103.8 $ 38.8
Net cash used in investing activities of continuing operations (111.0) (23.2)
Net cash used in financing activities of continuing operations (81.0) (180.8)
Cash flows from discontinued operations:
Net cash provided by operating activities from discontinued operations - 2.9
Net cash used in investing activities from discontinued operations - (8.0)
Net cash provided by financing activities from discontinued operations - 2.4
Effect of exchange rates on cash, cash equivalents and restricted cash (0.5) 0.5
Net decrease in cash, cash equivalents and restricted cash $ (88.7) $ (167.4)
Cash and cash equivalents and restricted cash, beginning of period 376.9 620.7
Cash and cash equivalents and restricted cash, end of period $ 288.2 $ 453.3
Cash and cash equivalents and restricted cash of discontinued operations, end of period - 3.6
Cash and cash equivalents and restricted cash of continuing operations, end of period $ 288.2 $ 449.7
Three Months Ended March 31, 2026 Compared to the Three Months Ended March 31, 2025
Net cash provided by operating activities of continuing operations was $103.8 million for the three months ended March 31, 2026 as compared to $38.8 million for the three months ended March 31, 2025. The $65.0 million increase was due primarily to an increase in cash provided by trade payables and accrued liabilities of $138.0 million and inventories of $19.9 million, partially offset by lower earnings, excluding non-cash charges, of $13.3 million and an increase in cash used by prepaid and other current and non current assets of $27.9 million and trade receivables of $51.7 million.
Net cash used in investing activities of continuing operations was $111.0 million for the three months ended March 31, 2026, compared to $23.2 million for the three months ended March 31, 2025. The increase of $87.8 million is primarily due to increased additions to property, plant and equipment and intangible assets of $48.6 million, acquisitions of $10.9 million in the current year, and $45.6 million of proceeds received from the sale of the production facility in Ontario, Canada in prior year not recurring in the current year, partially offset by $16.5 million of proceeds received from the sale of facilities within held for sale.
Net cash used in financing activities of continuing operations for the three months ended March 31, 2026 was $81.0 million, compared to $180.8 million for the three months ended March 31, 2025. The $99.8 million decrease was due primarily to a decrease in Class A common stock repurchased and cancelled of $87.0 million as a result of the share repurchases made in conjunction with the March Offering of $114.1 million in the prior year not recurring in the current year, partially offset by share repurchases made under the Share Repurchase Program of $29.0 million in the current year.
Off-Balance Sheet Arrangements
We do not have any relationships with unconsolidated entities or financial partnerships, such as entities often referred to as "structured finance or special purpose entities," which would have been established for the purpose of facilitating off-balance sheet arrangements or other contractually narrow or limited purposes.
Critical Accounting Policies and Estimates
Our critical accounting policies require management to make estimates and assumptions that affect the reported amounts in the Condensed Consolidated Financial Statements and the accompanying notes. These estimates are based on historical experience, the advice of external experts or on other assumptions management believes to be reasonable. Where actual amounts differ from estimates, revisions are included in the results for the period in which actual amounts become known. Historically, differences between estimates and actual amounts have not had a significant impact on our Condensed Consolidated Financial Statements.
Critical accounting policies and estimates used to prepare the Condensed Consolidated Financial Statements are discussed with the Audit Committee of our Board of Directors as they are implemented and on an annual basis.
We have no material changes to our Critical Accounting Policies and Estimates disclosure as filed in our 2025 Annual Report.
Recently Issued Accounting Pronouncements
Refer to Note 2 - "Summary of Significant Accounting Policies" in the Condensed Consolidated Financial Statements included in this Quarterly Report for a summary of recently adopted and recently issued accounting standards and their related effects or anticipated effects on our consolidated results of operations and financial condition.
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