Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Jul. 02, 2022 | Aug. 08, 2022 | |
Document Information [Line Items] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Jul. 02, 2022 | |
Document Transition Report | false | |
Entity File Number | 001-31410 | |
Entity Registrant Name | PRIMO WATER CORP | |
Entity Incorporation, State or Country Code | A6 | |
Entity Tax Identification Number | 98-0154711 | |
Entity Address, Address Line One | 1150 Assembly Dr. | |
Entity Address, Address Line Two | Suite 800 | |
Entity Address, City or Town | Tampa, | |
Entity Address, State or Province | FL | |
Entity Address, Postal Zip Code | 33607 | |
Entity Address, Country | US | |
City Area Code | 813 | |
Local Phone Number | 544-8515 | |
Title of 12(b) Security | Common Shares, no par value per share | |
Trading Symbol | PRMW | |
Security Exchange Name | NYSE | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding (in shares) | 161,245,316 | |
Entity Central Index Key | 0000884713 | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2022 | |
Document Fiscal Period Focus | Q2 | |
Amendment Flag | false | |
Former Address | ||
Document Information [Line Items] | ||
Entity Address, Address Line One | 4221 West Boy Scout Boulevard | |
Entity Address, Address Line Two | Suite 400 | |
Entity Address, City or Town | Tampa, | |
Entity Address, State or Province | FL | |
Entity Address, Postal Zip Code | 33607 | |
Entity Address, Country | US |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) shares in Thousands, $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jul. 02, 2022 | Jul. 03, 2021 | Jul. 02, 2022 | Jul. 03, 2021 | |
Income Statement [Abstract] | ||||
Revenue, net | $ 571.4 | $ 526.1 | $ 1,097.5 | $ 1,004.5 |
Cost of sales | 239.1 | 228.9 | 465.6 | 442.8 |
Gross profit | 332.3 | 297.2 | 631.9 | 561.7 |
Selling, general and administrative expenses | 291.6 | 259.9 | 569.9 | 507.9 |
Loss on disposal of property, plant and equipment, net | 0.1 | 3.3 | 1.8 | 5.4 |
Acquisition and integration expenses | 4.9 | 2.4 | 9.2 | 3.7 |
Impairment charges | 29.1 | 0 | 29.1 | 0 |
Operating income | 6.6 | 31.6 | 21.9 | 44.7 |
Other expense, net | 10.7 | 25.6 | 13.4 | 25.2 |
Interest expense, net | 17 | 17.7 | 33.9 | 36.7 |
Loss before income taxes | (21.1) | (11.7) | (25.4) | (17.2) |
Income tax expense (benefit) | 1.4 | (3.4) | 3.8 | 1.3 |
Net Loss | $ (22.5) | $ (8.3) | $ (29.2) | $ (18.5) |
Net loss per common share | ||||
Basic (in USD per share) | $ (0.14) | $ (0.05) | $ (0.18) | $ (0.11) |
Diluted (in USD per share) | $ (0.14) | $ (0.05) | $ (0.18) | $ (0.11) |
Weighted average common shares outstanding (in thousands) | ||||
Basic (in shares) | 161,149 | 161,561 | 161,038 | 161,097 |
Diluted (in shares) | 161,149 | 161,561 | 161,038 | 161,097 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Comprehensive Loss - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jul. 02, 2022 | Jul. 03, 2021 | Jul. 02, 2022 | Jul. 03, 2021 | |
Statement of Comprehensive Income [Abstract] | ||||
Net Loss | $ (22.5) | $ (8.3) | $ (29.2) | $ (18.5) |
Other comprehensive income: | ||||
Currency translation adjustment | 1.8 | 2 | 1.7 | 8.5 |
Comprehensive loss | $ (20.7) | $ (6.3) | $ (27.5) | $ (10) |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Millions | Jul. 02, 2022 | Jan. 01, 2022 |
Current assets | ||
Cash and cash equivalents | $ 98.5 | $ 128.4 |
Accounts receivable, net of allowance of $22.7 ($20.8 as of January 1, 2022) | 283.6 | 261.6 |
Inventories | 109.7 | 94.6 |
Prepaid expenses and other current assets | 63.5 | 25.2 |
Total current assets | 555.3 | 509.8 |
Property, plant and equipment, net | 678.6 | 718.1 |
Operating lease right-of-use-assets | 168.2 | 177.4 |
Goodwill | 1,285.6 | 1,321.4 |
Intangible assets, net | 912.2 | 969.8 |
Other long-term assets, net | 29.4 | 26.9 |
Total assets | 3,629.3 | 3,723.4 |
Current liabilities | ||
Short-term borrowings | 235.2 | 222.1 |
Current maturities of long-term debt | 17.1 | 17.7 |
Accounts payable and accrued liabilities | 430.2 | 437.7 |
Current operating lease obligations | 32.5 | 32.3 |
Total current liabilities | 715 | 709.8 |
Long-term debt | 1,274.5 | 1,321.1 |
Operating lease obligations | 139.4 | 148.7 |
Deferred tax liabilities | 157.9 | 158.8 |
Other long-term liabilities | 65.7 | 64.9 |
Total liabilities | 2,352.5 | 2,403.3 |
Shareholders' Equity | ||
Common shares, no par value - 161,209,111 (January 1, 2022 - 160,732,552) shares issued | 1,292.6 | 1,286.9 |
Additional paid-in-capital | 87.3 | 85.9 |
(Accumulated deficit) retained earnings | (35.7) | 16.4 |
Accumulated other comprehensive loss | (67.4) | (69.1) |
Total shareholders' equity | 1,276.8 | 1,320.1 |
Total liabilities and shareholders' equity | $ 3,629.3 | $ 3,723.4 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Millions | Jul. 02, 2022 | Jan. 01, 2022 |
Statement of Financial Position [Abstract] | ||
Accounts receivable, allowance | $ 22.7 | $ 20.8 |
Common shares, par value (in USD per share) | $ 0 | $ 0 |
Common shares, shares issued (in shares) | 161,209,111 | 160,732,552 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jul. 02, 2022 | Jul. 03, 2021 | Jul. 02, 2022 | Jul. 03, 2021 | |
Cash flows from operating activities: | ||||
Net Loss | $ (22.5) | $ (8.3) | $ (29.2) | $ (18.5) |
Adjustments to reconcile net loss to cash flows from operating activities of continuing operations: | ||||
Depreciation and amortization | 60.2 | 52 | 121.4 | 105.1 |
Amortization of financing fees | 0.8 | 0.9 | 1.7 | 1.7 |
Share-based compensation expense | 4.2 | 3.8 | 7.5 | 6.2 |
(Benefit) provision for deferred income taxes | (0.1) | (4.2) | 1.5 | (0.6) |
Loss on extinguishment of debt | 0 | 27.2 | 0 | 27.2 |
Gain on sale of business | 0 | 0 | (0.4) | 0 |
Impairment charges | 29.1 | 0 | 29.1 | 0 |
Loss on disposal of property, plant and equipment, net | 0.1 | 3.3 | 1.8 | 5.4 |
Other non-cash items | 11 | (1.2) | 13.1 | (1) |
Change in operating assets and liabilities, net of acquisitions: | ||||
Accounts receivable | (21.3) | (52.2) | (33.2) | (61.9) |
Inventories | (8) | (6.3) | (19.1) | (3.1) |
Prepaid expenses and other current assets | 1 | (2) | (5.2) | (4.2) |
Other assets | 0.7 | 0.2 | 0 | 0.3 |
Accounts payable and accrued liabilities and other liabilities | 11.5 | 46.4 | 1.3 | 31.7 |
Net cash provided by operating activities from continuing operations | 66.7 | 59.6 | 90.3 | 88.3 |
Cash flows from investing activities of continuing operations: | ||||
Acquisitions, net of cash received | (7.1) | (0.3) | (7.4) | (0.3) |
Additions to property, plant and equipment | (46.6) | (34.8) | (85.2) | (61.8) |
Additions to intangible assets | (2.4) | (1.8) | (4.9) | (4.1) |
Proceeds from sale of property, plant and equipment | 0.6 | 0.6 | 1 | 0.7 |
Other investing activities | (0.1) | 0 | 0.4 | 0 |
Net cash used in investing activities from continuing operations | (55.6) | (36.3) | (96.1) | (65.5) |
Cash flows from financing activities of continuing operations: | ||||
Payments of long-term debt | (5.2) | (753.6) | (9.7) | (757) |
Issuance of long-term debt | 0 | 750 | 0 | 750 |
Proceeds from short-term borrowings | 10 | 45 | 10 | 45 |
Payments on short-term borrowings | 0 | (10) | 0 | (10) |
Premiums and costs paid upon extinguishment of long-term debt | 0 | (20.6) | 0 | (20.6) |
Issuance of common shares | 0.4 | 14.7 | 1.6 | 15.7 |
Common shares repurchased and canceled | (0.2) | (13.2) | (2) | (16.3) |
Financing fees | 0 | (10.6) | 0 | (11.3) |
Dividends paid to common shareholders | (11.6) | (9.9) | (22.9) | (19.6) |
Payment of deferred consideration for acquisitions | 0 | (0.1) | (0.1) | (1.8) |
Other financing activities | 0.7 | (0.9) | 4.6 | 4.3 |
Net cash used in financing activities from continuing operations | (5.9) | (9.2) | (18.5) | (21.6) |
Cash flows from discontinued operations: | ||||
Operating activities of discontinued operations | 0 | (2.6) | 0 | (1.8) |
Investing activities of discontinued operations | 0 | 0 | 0 | 0 |
Financing activities of discontinued operations | 0 | 0 | 0 | 0 |
Net cash used in discontinued operations | 0 | (2.6) | 0 | (1.8) |
Effect of exchange rate changes on cash | (1) | 0.5 | (1.9) | (0.3) |
Net increase (decrease) in cash, cash equivalents and restricted cash | 4.2 | 12 | (26.2) | (0.9) |
Cash and cash equivalents and restricted cash, beginning of period | 98 | 102.2 | 128.4 | 115.1 |
Cash and cash equivalents and restricted cash, end of period | 102.2 | 114.2 | 102.2 | 114.2 |
Supplemental Non-cash Investing and Financing Activities: | ||||
Dividends payable issued through accounts payable and accrued liabilities | 0.2 | 0 | 0.4 | 0.1 |
Additions to property, plant and equipment through accounts payable and accrued liabilities and other liabilities | 13.4 | 11.9 | 23.8 | 19.4 |
Financing lease right-of-use assets obtained in exchange for lease obligations | 0.7 | 3.3 | 3.4 | 5.9 |
Operating lease right-of-use assets obtained in exchange for lease obligations | 10.3 | 11.5 | 15.8 | 18.2 |
Supplemental Disclosures of Cash Flow Information: | ||||
Cash paid for interest | 29.4 | 16.9 | 32.9 | 40.2 |
Cash paid for income taxes, net | 1.5 | 4.3 | 2.5 | 6.2 |
Cash and cash equivalents and restricted cash: | ||||
Cash and cash equivalents | 98.5 | 114.2 | 98.5 | 114.2 |
Cash included in prepaid expenses and other current assets | 3.7 | 0 | 3.7 | 0 |
Total | $ 102.2 | $ 114.2 | $ 102.2 | $ 114.2 |
Consolidated Statements of Equi
Consolidated Statements of Equity - USD ($) $ in Millions | Total | Equity Incentive Plan | Common Shares | Common Shares Equity Incentive Plan | Additional Paid-in-Capital | Additional Paid-in-Capital Equity Incentive Plan | (Accumulated Deficit) | Accumulated Other Comprehensive Loss |
Beginning Balance (in shares) at Jan. 02, 2021 | 160,406,000 | |||||||
Beginning Balance at Jan. 02, 2021 | $ 1,346.9 | $ 1,268 | $ 84.5 | $ 81.1 | $ (86.7) | |||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Net Loss | (18.5) | (18.5) | ||||||
Other comprehensive income, net of tax | 8.5 | 8.5 | ||||||
Common shares dividends | (19.5) | (19.5) | ||||||
Share-based compensation | 6.2 | 6.2 | ||||||
Common shares repurchased and canceled (in shares) | (982,000) | |||||||
Common shares repurchased and canceled | (16.3) | $ (9.6) | (6.7) | |||||
Common shares issued - Equity Incentive Plan (in shares) | 2,119,000 | |||||||
Common shares issued - Equity Incentive Plan | $ 17.8 | $ 28.3 | $ (10.5) | |||||
Common shares issued - Dividend Reinvestment Plan (in shares) | 1,000 | |||||||
Common shares issued - Employee Stock Purchase Plan (in shares) | 60,000 | |||||||
Common shares issued - Employee Stock Purchase Plan | 0.9 | $ 1 | (0.1) | |||||
Ending Balance (in shares) at Jul. 03, 2021 | 161,604,000 | |||||||
Ending Balance at Jul. 03, 2021 | 1,326 | $ 1,287.7 | 80.1 | 36.4 | (78.2) | |||
Beginning Balance (in shares) at Apr. 03, 2021 | 160,818,000 | |||||||
Beginning Balance at Apr. 03, 2021 | 1,336.7 | $ 1,274.2 | 81.6 | 61.1 | (80.2) | |||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Net Loss | (8.3) | (8.3) | ||||||
Other comprehensive income, net of tax | 2 | 2 | ||||||
Common shares dividends | (9.7) | (9.7) | ||||||
Share-based compensation | 3.8 | 3.8 | ||||||
Common shares repurchased and canceled (in shares) | (803,000) | |||||||
Common shares repurchased and canceled | (13.2) | $ (6.5) | (6.7) | |||||
Common shares issued - Equity Incentive Plan (in shares) | 1,554,000 | |||||||
Common shares issued - Equity Incentive Plan | 14.2 | $ 19.4 | (5.2) | |||||
Common shares issued - Dividend Reinvestment Plan (in shares) | 1,000 | |||||||
Common shares issued - Employee Stock Purchase Plan (in shares) | 34,000 | |||||||
Common shares issued - Employee Stock Purchase Plan | 0.5 | $ 0.6 | (0.1) | |||||
Ending Balance (in shares) at Jul. 03, 2021 | 161,604,000 | |||||||
Ending Balance at Jul. 03, 2021 | $ 1,326 | $ 1,287.7 | 80.1 | 36.4 | (78.2) | |||
Beginning Balance (in shares) at Jan. 01, 2022 | 160,732,552 | 160,732,000 | ||||||
Beginning Balance at Jan. 01, 2022 | $ 1,320.1 | $ 1,286.9 | 85.9 | 16.4 | (69.1) | |||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Net Loss | (29.2) | (29.2) | ||||||
Other comprehensive income, net of tax | 1.7 | 1.7 | ||||||
Common shares dividends | (22.9) | (22.9) | ||||||
Share-based compensation | 7.5 | 7.5 | ||||||
Common shares repurchased and canceled (in shares) | (135,000) | |||||||
Common shares repurchased and canceled | (2) | $ (2) | ||||||
Common shares issued - Equity Incentive Plan (in shares) | 552,000 | |||||||
Common shares issued - Equity Incentive Plan | 0.8 | $ 6.7 | (5.9) | |||||
Common shares issued - Dividend Reinvestment Plan (in shares) | 1,000 | |||||||
Common shares issued - Employee Stock Purchase Plan (in shares) | 59,000 | |||||||
Common shares issued - Employee Stock Purchase Plan | $ 0.8 | $ 1 | (0.2) | |||||
Ending Balance (in shares) at Jul. 02, 2022 | 161,209,111 | 161,209,000 | ||||||
Ending Balance at Jul. 02, 2022 | $ 1,276.8 | $ 1,292.6 | 87.3 | (35.7) | (67.4) | |||
Beginning Balance (in shares) at Apr. 02, 2022 | 161,075,000 | |||||||
Beginning Balance at Apr. 02, 2022 | 1,304.5 | $ 1,291.6 | 83.9 | (1.8) | (69.2) | |||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Net Loss | (22.5) | (22.5) | ||||||
Other comprehensive income, net of tax | 1.8 | 1.8 | ||||||
Common shares dividends | (11.4) | (11.4) | ||||||
Share-based compensation | 4.2 | 4.2 | ||||||
Common shares repurchased and canceled (in shares) | (21,000) | |||||||
Common shares repurchased and canceled | (0.2) | $ (0.2) | ||||||
Common shares issued - Equity Incentive Plan (in shares) | 120,000 | |||||||
Common shares issued - Equity Incentive Plan | $ 0 | $ 0.6 | $ (0.6) | |||||
Common shares issued - Dividend Reinvestment Plan (in shares) | 1,000 | |||||||
Common shares issued - Employee Stock Purchase Plan (in shares) | 34,000 | |||||||
Common shares issued - Employee Stock Purchase Plan | $ 0.4 | $ 0.6 | (0.2) | |||||
Ending Balance (in shares) at Jul. 02, 2022 | 161,209,111 | 161,209,000 | ||||||
Ending Balance at Jul. 02, 2022 | $ 1,276.8 | $ 1,292.6 | $ 87.3 | $ (35.7) | $ (67.4) |
Consolidated Statements of Eq_2
Consolidated Statements of Equity (Parenthetical) - $ / shares | 3 Months Ended | 6 Months Ended | ||
Jul. 02, 2022 | Jul. 03, 2021 | Jul. 02, 2022 | Jul. 03, 2021 | |
Statement of Stockholders' Equity [Abstract] | ||||
Dividends per common share (in USD per share) | $ 0.07 | $ 0.06 | $ 0.14 | $ 0.12 |
Business and Recent Accounting
Business and Recent Accounting Pronouncements | 6 Months Ended |
Jul. 02, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Business and Recent Accounting Pronouncements | Business and Recent Accounting Pronouncements Description of Business As used herein, “Primo,” “the Company,” “our Company,” “Primo Water Corporation,” “we,” “us,” or “our” refers to Primo Water Corporation, together with its consolidated subsidiaries. Primo is a leading provider of sustainable drinking water solutions in North America and Europe. Primo operates largely under a recurring razor/razorblade revenue model. The razor in Primo’s revenue model is its industry leading line-up of sleek and innovative water dispensers, which are sold through retailers and online at various price points. The dispensers help increase household penetration, which drives recurring purchases of Primo’s razorblade offering. Primo’s razorblade offering is comprised of Water Direct, Water Exchange, and Water Refill. Through its Water Direct business, Primo delivers sustainable hydration solutions across its 21-country footprint direct to the customer’s door, whether at home or to businesses. Through its Water Exchange and Water Refill businesses, Primo offers pre-filled and reusable containers at over 14,000 locations, water dispenser sales at approximately 9,000 locations and water refill units at approximately 24,000 locations, respectively. Primo also offers water filtration units across its 21-country footprint. Primo’s water solutions expand consumer access to purified, spring and mineral water to promote a healthier, more sustainable lifestyle while simultaneously reducing plastic waste and pollution. Primo is committed to its water stewardship standards and is proud to partner with the International Bottled Water Association in North America as well as with Watercoolers Europe, which ensure strict adherence to safety, quality, sanitation and regulatory standards for the benefit of consumer protection. Environmental stewardship is a part of who we are, and we have worked to progressively achieve carbon neutrality throughout our organization. Our European operations have maintained carbon neutrality for more than ten years , and our U.S. operations achieved carbon neutral certification in 2020 under the CarbonNeutral Protocol, an international standard administered by Natural Capital Partners. In 2021, the Company achieved carbon neutrality on a global basis. In late 2021, Primo announced its planned exit from the North American small-format retail water business. This business is relatively small and uses predominantly single-use plastic bottles. The exit from this category is estimated to reduce single-use retail water bottles from our production environment by more than 400 million, annually, while also improving overall margins. The exit was completed during the second quarter of 2022. During the second quarter of 2022, our Board of Directors approved the exit of our business in Russia. Accordingly, we classified the assets and liabilities of this business as held for sale (assets held for sale, net of impairment, of $10.3 million and liabilities held for sale of $6.3 million are included within prepaid expenses and other current assets and accounts payable and accrued liabilities, respectively, on the Consolidated Balance Sheet as of July 2, 2022), and recorded an impairment charge of $11.2 million to reduce the carrying value to the estimated fair value less costs to sell. Separately, we reviewed and realigned our reporting segments, as further described in "Changes in Presentation" below. The decision to exit our business in Russia and the realignment of segments resulted in a triggering event for goodwill and intangible assets with indefinite lives requiring quantitative assessments for the combined Eden business immediately before the realignment of segments and for the Eden Europe and Israel businesses upon realignment of segments. These assessments resulted in recording a goodwill impairment charge of $11.2 million due to a decrease in cash flows associated with the exit of our business in Russia and recording a trademark impairment charge of $6.7 million primarily due to a decrease in the royalty rate used in the quantitative analysis. These impairment charges, along with the impairment charge of $11.2 million to reduce the carrying value of the Russia business to its estimated fair value less costs to sell, resulted in total impairment charges of $29.1 million which are included within impairment charges on the Consolidated Statements of Operations for the three and six months ended July 2, 2022. All impairment charges are included in the Europe reporting segment. The exit of our business in Russia was completed on July 19, 2022. During the second quarter of 2022, our Board of Directors approved the sale of four of our properties. The sales are expected to be completed within the next year. Accordingly, we classified the land and buildings as held for sale (assets held for sale of $21.6 million are included within prepaid expenses and other current assets). Basis of Presentation The accompanying interim unaudited Consolidated Financial Statements have been prepared in accordance with the instructions to Form 10-Q and Article 10 of Regulation S-X and in accordance with U.S. generally accepted accounting principles (“GAAP”) for interim financial reporting. In the opinion of management, all adjustments (consisting of normal recurring adjustments) considered necessary for a fair statement of our results of operations for the interim periods reported and of our financial condition as of the date of the interim balance sheet have been included. The Consolidated Balance Sheet as of January 1, 2022 included herein was derived from the audited Consolidated Financial Statements included in our Annual Report on Form 10-K for the fiscal year ended January 1, 2022 (our “2021 Annual Report”). This Quarterly Report on Form 10-Q should be read in conjunction with the annual audited Consolidated Financial Statements and accompanying notes in our 2021 Annual Report. The accounting policies used in these interim Consolidated Financial Statements are consistent with those used in the annual Consolidated Financial Statements. The presentation of these interim Consolidated Financial Statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the Consolidated Financial Statements and accompanying notes. Changes in Presentation During the second quarter of 2022, we reviewed and realigned our reporting segments to reflect how the business will be managed and evaluated by the Chief Executive Officer, who is the Company’s chief operating decision maker. Following such review, certain of our businesses previously included in the Rest of World segment (now renamed "Europe") were realigned between the Europe reporting segment and the Other category. Our two reporting segments are as follows: North America (which includes our DS Services of America, Inc. (“DSS”), Aquaterra Corporation (“Aquaterra”), Mountain Valley Spring Company (“Mountain Valley”) and Legacy Primo businesses) and Europe (which includes the European business of Eden Springs Netherlands B.V. (“Eden Europe”), Decantae Mineral Water Limited (“Decantae”) and Fonthill Waters Ltd ("Fonthill") businesses). The Other category includes the Israel business of Eden ("Eden Israel"), Aimia Foods Limited (“Aimia”) and John Farrer & Company Limited (“Farrers”) businesses, as well as our corporate oversight function and other miscellaneous expenses. Segment reporting results have been recast to reflect these changes for all periods presented. COVID-19 Pandemic In response to the novel coronavirus (“COVID-19”) pandemic, certain government authorities have enacted programs which provide various economic stimulus measures, including several tax provisions. Among the business tax provisions is the deferral of certain payroll and other tax remittances to future years and wage subsidies as reimbursement for a portion of certain furloughed employees’ salaries. During the three and six months ended July 2, 2022, we received wage subsidies under these programs totaling nil and $0.3 million, respectively, compared to $0.8 million and $2.2 million, for the three and six months ended July 3, 2021, respectively. We review our eligibility for these programs for each qualifying period and account for such wage subsidies on an accrual basis when the conditions for eligibility are met. We have adopted an accounting policy to present wage subsidies as a reduction of selling, general and administrative (“SG&A”) expenses. In addition, deferred payroll and other taxes totaling $7.5 million were included in accounts payable and accrued liabilities on our Consolidated Balance Sheets as of July 2, 2022 and January 1, 2022. Significant Accounting Policies Included in Note 1 of our 2021 Annual Report is a summary of the Company’s significant accounting policies. Provided below is a summary of additional accounting policies that are significant to the financial results of the Company. Cost of sales We record costs associated with the manufacturing of our products in cost of sales. Shipping and handling costs incurred to store, prepare and move products between production facilities or from production facilities to branch locations or storage facilities are recorded in cost of sales. Shipping and handling costs incurred to deliver products from our branch locations to the end-user consumer of those products are recorded in SG&A expenses. All other costs incurred in the shipment of products from our production facilities to customer locations are reflected in cost of sales. Shipping and handling costs included in SG&A expenses were $137.3 million and $264.6 million for the three and six months ended July 2, 2022, respectively, and $118.6 million and $228.7 million for the three and six months ended July 3, 2021, respectively. Finished goods inventory costs include the cost of direct labor and materials and the applicable share of overhead expense chargeable to production. Goodwill Goodwill represents the excess purchase price of acquired businesses over the fair value of the net assets acquired. We test goodwill for impairment at least annually on the first day of the fourth quarter, based on our reporting unit carrying values, calculated as total assets less non-interest bearing liabilities, as of the end of the third quarter, or more frequently if we determine a triggering event has occurred during the year. During the second quarter of 2022, our Board of Directors approved the exit of our business in Russia and our reporting segments were realigned. In connection therewith, we identified a triggering event indicating possible impairment of goodwill and intangible assets, as further described below. We did not identify impairment of our property, plant and equipment, lease-related right-of-use assets, or long-lived assets except as noted above related to the Russia assets held for sale. The Company operates through four operating segments: North America, Europe, Eden Israel, and Aimia. The North America and Europe operating segments are reportable operating segments, and Eden Israel and Aimia are nonreportable operating segments within our Other category. We evaluate goodwill for impairment on a reporting unit basis, which is an operating segment or a level below an operating segment, referred to as a component. A component of an operating segment is a reporting unit if the component constitutes a business for which discrete financial information is available and management regularly reviews the operating results of that component. However, two or more components of an operating segment can be aggregated and deemed a single reporting unit if the components have similar economic characteristics. Our North America operating segment was determined to have three components: DSS, Mountain Valley, and Aquaterra. We have determined that DSS and Aquaterra have similar economic characteristics and have aggregated them as a single reporting unit for the purpose of testing goodwill for impairment (“DSSAqua”). Our Europe operating segment was determined to have three components: Eden Europe, Decantae, and Fonthill, none of which have similar economic characteristics. Our Aimia operating segment was determined to have two components: Aimia and Farrers, neither of which have similar economic characteristics. Our Eden Israel operating segment was determined to be a single component. We have thus determined our reporting units are DSSAqua, Mountain Valley, Eden Europe, Eden Israel, Aimia, Decantae, Farrers and Fonthill. Due to the triggering events identified above arising from the exit of the Russia business and the triggering event arising as a result of the realignment of segments, we were required to perform an impairment test. We elected to bypass the qualitative assessment and performed an interim quantitative impairment test as of May 10, 2022. The interim quantitative impairment test was performed both (1) on a pre-realignment basis on the combined Eden reporting unit (which, prior to realignment, included the Eden Europe and Eden Israel businesses), and (2) on a post-realignment basis, on the Eden Europe and Eden Israel reporting units separately. We determined the fair value of the reporting units being evaluated using a mix of the income approach (which is based on the discounted cash flows of the reporting unit) and the guideline public company approach. We weighted the income approach and the guideline public company approach at 50% each to determine the fair value of the reporting unit. We believe using a combination of these approaches provides a more accurate valuation because it incorporates the expected cash generation of the Company in addition to how a third-party market participant would value the reporting unit. As the business is assumed to continue in perpetuity, the discounted future cash flows include a terminal value. Critical assumptions used in our valuation of reporting units included the anticipated future cash flows, a weighted-average terminal growth rate of 1.5%, a discount rate of 9.0%, and the comparable company multiples. The anticipated future cash flows assumption reflects projected revenue growth rates, SG&A expenses and capital expenditures. The terminal growth rate assumption incorporated into the discounted cash flow calculation reflects our long-term view of the market and industry, projected changes in the sale of our products, pricing of such products and operating profit margins. The discount rate was determined using various factors and sensitive assumptions, including bond yields, size premiums and tax rates. This rate was based on the weighted average cost of capital a market participant would use if evaluating the reporting unit as an investment. The comparable company multiples were based on operating data from guideline publicly traded companies and provide an indication of how much a knowledgeable investor in the marketplace would be willing to pay for a company. These multiples were evaluated and adjusted based on specific characteristics of the reporting units relative to the selected guideline companies and applied to the reporting units' operating data to arrive at an indication of value. These assumptions are considered significant unobservable inputs and represent our best estimate of assumptions that market participants would use to determine the fair value of the respective reporting units. The key inputs into the discounted cash flow analysis were consistent with market data, where available, indicating that the assumptions used were in a reasonable range of observable market data. Based on the quantitative assessment including consideration of the sensitivity of the assumptions made and methods used to determine fair value, industry trends and other relevant factors, we determined that, (1) on a pre-realignment basis, goodwill was impaired for the combined Eden reporting unit and, as a result, we recognized an impairment charge of $11.2 million (which is included in impairment charges in the Consolidated Statement of Operations for the three and six months ended July 2, 2022), and (2) on a post-realignment basis, the estimated fair value of each of the Eden Europe and Eden Israel reporting units equaled their respective carrying values (therefore, no goodwill impairment charges were recorded for these two reporting units). The changes in the carrying amount of goodwill on a reporting segment basis for the six months ended July 2, 2022, are as follows: Reporting Segment North America Europe Other Total (in millions of U.S. dollars) Balance at January 1, 2022 Goodwill $ 994.1 $ 377.6 $ 53.8 $ 1,425.5 Accumulated impairment losses — (103.6) (0.5) (104.1) $ 994.1 $ 274.0 $ 53.3 $ 1,321.4 Goodwill acquired during the year 0.1 0.6 — 0.7 Measurement period adjustments 1.2 1.0 — 2.2 Impairment charges — (11.2) — (11.2) Segment realignment allocation — (63.3) 63.3 — Foreign exchange (0.4) (21.0) (6.1) (27.5) Balance at July 2, 2022 Goodwill 995.0 294.9 111.0 1,400.9 Accumulated impairment losses — (114.8) (0.5) (115.3) $ 995.0 $ 180.1 $ 110.5 $ 1,285.6 Intangible Assets Our intangible assets with indefinite lives relate to trademarks acquired in the acquisition of businesses, and there are no legal, regulatory, contractual, competitive, economic, or other factors that limit the useful life of these intangible assets. Our trademarks with indefinite lives are not amortized, but rather are tested for impairment at least annually or more frequently if we determine a triggering event has occurred during the year. As a result of the triggering events described above arising from the exit of our Russia business and realignment of segments, we also performed recoverability tests on the trademarks with an indefinite life acquired in the acquisition of Eden ("Eden Trademarks") as of May 10, 2022. We elected to bypass the qualitative assessment and performed an interim quantitative impairment test as of May 10, 2022 on the Eden Trademarks. The interim quantitative impairment test was performed for the Eden Trademarks, including the Eden Europe and Eden Israel trademarks, to identify any impairment immediately prior to the segment realignment. The interim quantitative impairment test was then performed for the trademarks with indefinite lives associated with the Eden Europe and Eden Israel businesses upon segment realignment. To determine the fair value of the trademarks being evaluated, we use a relief from royalty method of the income approach, which calculates a fair value royalty rate that is applied to revenue forecasts associated with the trademark. The resulting cash flows are discounted using a rate to reflect the risk of achieving the projected royalty savings attributable to the trademark. The assumptions used to estimate the fair value of the trademark are subjective and require significant management judgment, including estimated future revenues, the fair value royalty rate (which is estimated to be a reasonable market royalty charge that would be charged by a licensor of the trademarks) and the risk adjusted discount rate. Based on our impairment test, we determined that, (1) on a pre-realignment basis, the estimated fair value of the Eden Trademarks exceeded the carrying value by approximately 9.0% (therefore, no impairment charge was recorded for this trademark), and (2) on a post-realignment basis, the estimated fair value of the trademarks with indefinite lives associated with our Eden Israel business exceeded the carrying value by approximately 103.0% (therefore, no impairment charge was recorded for this trademark), and the trademarks with indefinite lives associated with our Eden Europe business were impaired and recognized an impairment charge of $6.7 million. The impairment charge is included in impairment charges in the Consolidated Statement of Operations for the three and six months ended July 2, 2022. The impairment charge is due primarily to the decrease in the royalty rate used in the quantitative assessment. Recently adopted accounting pronouncements Update ASU 2021-10- Government Assistance (Topic 832) In November 2021, the Financial Accounting Standards Board ("FASB") issued guidance that requires business entities to disclose information about certain government assistance they receive. The amendments in this Update are effective for all entities within their scope for financial statements issued for annual periods beginning after December 15, 2021. Early application of the amendments is permitted. An entity should apply the amendments in this Update either (1) prospectively to all transactions within the scope of the amendments that are reflected in financial statements at the date of initial application and new transactions that are entered into after the date of initial application or (2) retrospectively to those transactions. Adoption of the new standard did not result in additional disclosures within our unaudited Consolidated Financial Statements. Recently issued accounting pronouncements Update ASU 2020-04 – Reference Rate Reform (Topic 848) In March 2020, the FASB issued guidance which provides optional expedients and exceptions to account for contracts, hedging relationships and other transactions that reference LIBOR or any other reference rates expected to be discontinued because of reference rate reform. This guidance is effective as of March 12, 2020 through December 31, 2022 and may be applied prospectively to contract modifications made and hedging relationships entered into or evaluated on or before December 31, 2022. We are currently evaluating our contracts and do not expect a material impact at this time. We elected to apply the debt agreement expedient and therefore will account for debt agreement amendments as if the modification was not substantial and thus a continuation of the existing contract. Additional elections of expedients and exceptions provided under the guidance will be made when contract modifications in response to reference rate reform commence. Update ASU 2021-08- Business Combinations (Topic 805) In October 2021, the FASB issued guidance that requires entities to use principles in ASC 606 to recognize and measure contract assets and liabilities in revenue contracts acquired in a business combination rather than fair value. For public entities, this guidance is effective after December 15, 2022 for annual and interim periods. Early adoption is permitted, including adoption in an interim period. If early adopted, the amendments are applied retrospectively to all business combinations for which the acquisition date occurred during the fiscal year of adoption. We are currently assessing the impact of adoption of this standard on our Consolidated Financial Statements. |
Revenue
Revenue | 6 Months Ended |
Jul. 02, 2022 | |
Revenue from Contract with Customer [Abstract] | |
Revenue | Revenue Our principal sources of revenue are from bottled water delivery direct to consumers primarily in North America and Europe and from providing multi-gallon purified bottled water, self-service refill drinking water and water dispensers through retailers in North America. Revenue is recognized, net of sales returns, when a customer obtains control of promised goods or services in an amount that reflects the consideration we expect to receive in exchange for those goods or services. We measure revenue based on the consideration specified in the customer arrangement, and revenue is recognized when the performance obligations in the customer arrangement are satisfied. A performance obligation is a contractual promise to transfer a distinct service to the customer. The transaction price of a contract is allocated to each distinct performance obligation and recognized as revenue when the customer receives the benefit of the performance obligation. Customers typically receive the benefit of our services as they are performed. Substantially all our customer contracts require that we be compensated for services performed to date. This may be upon shipment of goods or upon delivery to the customer, depending on contractual terms. Shipping and handling costs paid by the customer to us are included in revenue and costs incurred by us for shipping and handling activities that are performed after a customer obtains control of the product are accounted for as fulfillment costs. In addition, we exclude from net revenue and cost of sales taxes assessed by governmental authorities on revenue-producing transactions. Although we occasionally accept returns of products from our customers, historically returns have not been material. Contract Estimates The nature of certain of our contracts give rise to variable consideration including cash discounts, volume-based rebates, point of sale promotions, and other promotional discounts to certain customers. For all promotional programs and discounts, we estimate the rebate or discount that will be granted to the customer and record an accrual upon invoicing. These estimated rebates or discounts are included in the transaction price of our contracts with customers as a reduction to net revenues and are included as accrued sales incentives in accounts payable and accrued liabilities in the Consolidated Balance Sheets. Accrued sales incentives were $8.2 million and $8.0 million on July 2, 2022 and January 1, 2022, respectively. We do not disclose the value of unsatisfied performance obligations for contracts (i) with an original expected length of one year or less or (ii) for which we recognize revenue at the amount in which it has the right to invoice as the product is delivered. Contract Balances Contract liabilities relate primarily to advances received from our customers before revenue is recognized. These amounts are recorded as deferred revenue and are included in accounts payable and accrued liabilities in the Consolidated Balance Sheets. The advances are expected to be earned as revenue within one year of receipt. Deferred revenues at July 2, 2022 and January 1, 2022 were $15.5 million and $12.6 million, respectively. The amount of revenue recognized in the three and six months ended July 2, 2022 that was included in the January 1, 2022 deferred revenue balance was $2.4 million and $11.0 million, respectively. The Company does not have any material contract assets as of July 2, 2022 and January 1, 2022. Disaggregated Revenue In general, our business segmentation is aligned according to the nature and economic characteristics of our products and customer relationships and provides meaningful disaggregation of each business segment’s results of operations. Further disaggregation of net revenue to external customers by geographic area based on customer location is as follows: For the Three Months Ended For the Six Months Ended (in millions of U.S. dollars) July 2, 2022 July 3, 2021 July 2, 2022 July 3, 2021 United States $ 419.8 $ 378.1 $ 801.6 $ 728.0 United Kingdom 33.4 38.2 74.8 74.9 Canada 17.1 18.6 32.5 34.5 All other countries 101.1 91.2 188.6 167.1 Total $ 571.4 $ 526.1 $ 1,097.5 $ 1,004.5 |
Acquisitions
Acquisitions | 6 Months Ended |
Jul. 02, 2022 | |
Business Combination and Asset Acquisition [Abstract] | |
Acquisitions | Acquisitions SipWell Acquisition On December 30, 2021, Eden Springs Netherlands B.V., a wholly-owned subsidiary of the Company ("Eden"), completed the acquisition of Sip-Well NV, the leading distributor of water solutions in Belgium (the "SipWell Acquisition"). The total cash consideration paid by Eden in the SipWell Acquisition was $53.1 million, subject to adjustments for any non-permitted leakage since a locked box date. The SipWell Acquisition was funded through a combination of incremental borrowings under the Company’s Revolving Credit Facility and cash on hand. The SipWell Acquisition strengthens the Company's presence in Western and Central Europe. The Company has accounted for this transaction as a business combination which requires that assets acquired and liabilities assumed be measured at their acquisition date fair values. A preliminary allocation of the total cash consideration paid of $53.1 million has been made to the major categories of assets acquired and liabilities assumed based on management's estimates of their fair values as of the acquisition date. The excess of the purchase price over the aggregate fair values was recorded as goodwill. The table below presents the preliminary total cash consideration allocation of the estimated acquisition date fair values of the assets acquired and liabilities assumed: (in millions of U.S. dollars) Originally Reported Measurement Period Adjustments Acquired Value Cash and cash equivalents $ 6.8 $ — $ 6.8 Accounts receivable 1.3 0.4 1.7 Inventory 0.1 — 0.1 Prepaid expenses and other current assets 0.2 — 0.2 Property, plant and equipment 21.7 (3.0) 18.7 Operating lease right-of-use-assets 0.4 1.1 1.5 Goodwill 38.1 (0.4) 37.7 Intangible assets 20.0 — 20.0 Current maturities of long-term debt (1.6) 0.8 (0.8) Accounts payable and accrued liabilities (9.9) — (9.9) Current operating lease obligations (0.4) (0.3) (0.7) Long-term debt (17.7) 2.2 (15.5) Operating lease obligations — (0.8) (0.8) Deferred tax liabilities (5.9) — (5.9) Total $ 53.1 $ — $ 53.1 Measurement period adjustments recorded during the six months ended July 2, 2022 include an adjustment to accounts receivable based on a review of the fair value and adjustments to operating and financing lease right-of-use assets and obligations based on a review of acquired leases. The measurement period adjustments did not have a material effect on our results of operations in prior periods. |
Share-based Compensation
Share-based Compensation | 6 Months Ended |
Jul. 02, 2022 | |
Share-Based Payment Arrangement [Abstract] | |
Share-based Compensation | Share-based CompensationIn the second quarter of 2022, we granted 76,480 common shares with an aggregate grant date fair value of approximately $1.2 million to the non-management members of our Board of Directors under the Amended and Restated Primo Water Corporation Equity Incentive Plan. The common shares were issued in consideration of the directors’ annual board retainer fee and are fully vested upon issuance. |
Income Taxes
Income Taxes | 6 Months Ended |
Jul. 02, 2022 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes Income tax expense was $1.4 million on pre-tax loss of $21.1 million for the three months ended July 2, 2022, as compared to income tax benefit of $3.4 million on pre-tax loss of $11.7 million in the comparable prior year period. Income tax expense was $3.8 million on pre-tax loss of $25.4 million for the six months ended July 2, 2022, as compared to income tax expense of $1.3 million on pre-tax loss of $17.2 million in the comparable prior year period. The effective income tax rates for the three and six months ended July 2, 2022 were (6.6)% and (15.0)%, respectively, compared to 29.1% and (7.6)% in the comparable prior year periods. The effective tax rate for the three and six months ended July 2, 2022 varied from the effective tax rate in the comparable prior year period due primarily to impairment charges incurred in the second quarter of 2022 for which minimal tax benefit is recognized and increased earnings in taxable jurisdictions. The effective tax rate for the three and six months ended July 2, 2022 varied from the statutory tax rate primarily due to impairment charges incurred in the second quarter of 2022 for which minimal tax benefit is recognized, losses in tax jurisdictions for which no tax benefit is recognized due to existing valuation allowances, and income in tax jurisdictions with tax rates lower than the Canadian statutory tax rate. |
Common Shares and Net Loss per
Common Shares and Net Loss per Common Share | 6 Months Ended |
Jul. 02, 2022 | |
Earnings Per Share [Abstract] | |
Common Shares and Net Loss per Common Share | Common Shares and Net Loss per Common Share Common Shares On May 4, 2021, our Board of Directors approved a share repurchase program for up to $50.0 million of our outstanding common shares over a 12-month period commencing on May 10, 2021. We did not repurchase any outstanding common shares under the plan during the second quarter of 2022 and the program has now expired. In total, we repurchased 2,646,831 common shares for $43.5 million under this share repurchase program which were subsequently canceled. Net Loss per Common Share Basic net loss per common share is calculated by dividing net loss by the weighted average number of common shares outstanding during the periods presented. Diluted net loss per common share is calculated by dividing net loss by the weighted average number of common shares outstanding adjusted to include the effect, if dilutive, of the exercise of in-the-money stock options, performance-based RSUs, and time-based RSUs during the periods presented. The components of weighted average basic and diluted shares outstanding are below: For the Three Months Ended For the Six Months Ended July 2, 2022 July 3, 2021 July 2, 2022 July 3, 2021 Weighted average common shares outstanding - basic 161,149 161,561 161,038 161,097 Dilutive effect of Stock Options — — — — Dilutive effect of Performance-based RSUs — — — — Dilutive effect of Time-based RSUs — — — — Weighted average common shares outstanding - diluted 161,149 161,561 161,038 161,097 The following table summarizes anti-dilutive securities excluded from the computation of diluted net loss per common share for the periods indicated: For the Three Months Ended For the Six Months Ended (in thousands) July 2, 2022 July 3, 2021 July 2, 2022 July 3, 2021 Stock Options 4,617 5,719 4,617 5,719 Performance-based RSUs 1 1,191 836 1,191 836 Time-based RSUs 2 841 481 841 481 ______________________ 1 Performance-based RSUs represent the number of shares expected to be issued based primarily on the estimated achievement of performance targets for these awards. 2 Time-based RSUs represent the number of shares expected to be issued based on known employee retention information. |
Segment Reporting
Segment Reporting | 6 Months Ended |
Jul. 02, 2022 | |
Segment Reporting [Abstract] | |
Segment Reporting | Segment Reporting Our broad portfolio of products includes bottled water, water dispensers, self-service refill drinking water, filtration units, premium spring, sparkling and flavored water, mineral water, and coffee. During the second quarter of 2022, we reviewed and realigned our reporting segments to reflect how the business will be managed and results will be evaluated. Following such review, certain of our businesses previously included in the Rest of World segment were realigned between the Europe reporting segment and the Other category. Our two reporting segments are as follows: North America (which includes our DSS, Aquaterra, Mountain Valley and Legacy Primo businesses) and Europe (which includes our Eden Europe, Decantae and Fonthill businesses). The Other category includes our Eden Israel, Aimia and Farrers businesses, as well as our corporate oversight function and other miscellaneous expenses. Segment reporting results have been recast to reflect these changes for all periods presented. (in millions of U.S. dollars) North America Europe Other Eliminations Total For the Three Months Ended July 2, 2022 Revenue, net $ 436.7 $ 69.9 $ 64.8 $ — $ 571.4 Depreciation and amortization 44.3 10.1 5.8 — 60.2 Operating income (loss) 48.3 (29.1) (12.6) — 6.6 Additions to property, plant and equipment 35.7 6.9 4.0 — 46.6 For the Six Months Ended July 2, 2022 Revenue, net $ 833.8 $ 134.2 $ 129.5 $ — $ 1,097.5 Depreciation and amortization 89.6 19.9 11.9 — 121.4 Operating income (loss) 76.6 (32.7) (22.0) — 21.9 Additions to property, plant and equipment 62.3 13.1 9.8 — 85.2 (in millions of U.S. dollars) North America Europe Other Eliminations Total For the Three Months Ended July 3, 2021 Revenue, net 1 $ 396.7 $ 64.3 $ 65.4 $ (0.3) $ 526.1 Depreciation and amortization 36.5 9.9 5.6 — 52.0 Operating income (loss) 40.1 (1.6) (6.9) — 31.6 Additions to property, plant and equipment 24.1 6.3 4.4 — 34.8 For the Six Months Ended July 3, 2021 Revenue, net 1 $ 762.2 $ 119.9 $ 123.3 $ (0.9) $ 1,004.5 Depreciation and amortization 74.3 19.6 11.2 — 105.1 Operating income (loss) 66.2 (5.0) (16.5) — 44.7 Additions to property, plant and equipment 44.3 11.3 6.2 — 61.8 ______________________ 1 Intersegment revenue between the Other category and the Europe reporting segment was $0.3 million for three months ended July 3, 2021 and $0.9 million for the six months ended July 3, 2021 . Revenues by channel by reporting segment were as follows: For the Three Months Ended July 2, 2022 (in millions of U.S. dollars) North America Europe Other Eliminations Total Revenue, net Water Direct/Water Exchange $ 321.1 $ 53.7 $ 11.7 $ — $ 386.5 Water Refill/Water Filtration 47.3 8.2 0.7 — 56.2 Other Water 22.2 0.4 21.5 — 44.1 Water Dispensers 18.5 — — — 18.5 Other 27.6 7.6 30.9 — 66.1 Total $ 436.7 $ 69.9 $ 64.8 $ — $ 571.4 For the Six Months Ended July 2, 2022 (in millions of U.S. dollars) North America Europe Other Eliminations Total Revenue, net Water Direct/Water Exchange $ 599.4 $ 101.9 $ 22.5 $ — $ 723.8 Water Refill/Water Filtration 89.5 16.4 1.2 — 107.1 Other Water 56.2 0.8 37.5 — 94.5 Water Dispensers 32.7 — — — 32.7 Other 56.0 15.1 68.3 — 139.4 Total $ 833.8 $ 134.2 $ 129.5 $ — $ 1,097.5 For the Three Months Ended July 3, 2021 (in millions of U.S. dollars) North America Europe Other Eliminations 1 Total Revenue, net Water Direct/Water Exchange $ 264.9 $ 47.7 $ 10.4 $ — $ 323.0 Water Refill/Water Filtration 45.1 7.8 0.2 — 53.1 Other Water 42.2 0.4 22.0 — 64.6 Water Dispensers 17.6 — — — 17.6 Other 26.9 8.4 32.8 (0.3) 67.8 Total $ 396.7 $ 64.3 $ 65.4 $ (0.3) $ 526.1 For the Six Months Ended July 3, 2021 (in millions of U.S. dollars) North America Europe Other Eliminations 1 Total Revenue, net Water Direct/Water Exchange $ 503.7 $ 88.0 $ 18.9 $ — $ 610.6 Water Refill/Water Filtration 90.2 15.7 0.2 — 106.1 Other Water 83.1 0.6 37.2 — 120.9 Water Dispensers 32.6 — — — 32.6 Other 52.6 15.6 67.0 (0.9) 134.3 Total $ 762.2 $ 119.9 $ 123.3 $ (0.9) $ 1,004.5 ______________________ 1 Intersegment revenue between the Other category and the Europe reporting segment was $0.3 million for three months ended July 3, 2021 and $0.9 million for the six months ended July 3, 2021 . |
Inventories
Inventories | 6 Months Ended |
Jul. 02, 2022 | |
Inventory Disclosure [Abstract] | |
Inventories | Inventories The following table summarizes inventories as of July 2, 2022 and January 1, 2022: (in millions of U.S. dollars) July 2, 2022 January 1, 2022 Raw materials $ 64.7 $ 56.7 Finished goods 31.0 27.0 Resale items 11.9 9.1 Other 2.1 1.8 Total $ 109.7 $ 94.6 |
Accumulated Other Comprehensive
Accumulated Other Comprehensive (Loss) Income | 6 Months Ended |
Jul. 02, 2022 | |
Equity [Abstract] | |
Accumulated Other Comprehensive (Loss) Income | Accumulated Other Comprehensive (Loss) Income Changes in accumulated other comprehensive (loss) income (“AOCI”) by component for the three and six months ended July 2, 2022 and July 3, 2021 were as follows: (in millions of U.S. dollars) 1 Pension Currency Total Beginning balance April 2, 2022 $ (1.7) $ (67.5) $ (69.2) OCI before reclassifications — 1.8 1.8 Amounts reclassified from AOCI — — — Net current-period OCI — 1.8 1.8 Ending balance July 2, 2022 $ (1.7) $ (65.7) $ (67.4) Beginning balance January 1, 2022 $ (1.7) $ (67.4) $ (69.1) OCI before reclassifications — 1.7 1.7 Amounts reclassified from AOCI — — — Net current-period OCI — 1.7 1.7 Ending balance July 2, 2022 $ (1.7) $ (65.7) $ (67.4) Beginning balance April 3, 2021 $ (1.1) $ (79.1) $ (80.2) OCI before reclassifications — 2.0 2.0 Amounts reclassified from AOCI — — — Net current-period OCI — 2.0 2.0 Ending Balance July 3, 2021 $ (1.1) $ (77.1) $ (78.2) Beginning balance January 2, 2021 $ (1.1) $ (85.6) $ (86.7) OCI before reclassifications — 8.5 8.5 Amounts reclassified from AOCI — — — Net current-period OCI — 8.5 8.5 Ending Balance July 3, 2021 $ (1.1) $ (77.1) $ (78.2) ______________________ 1 All amounts are net of tax. Amounts in parentheses indicate debits. There were no amounts reclassified from AOCI for the three and six months ended July 2, 2022 and July 3, 2021, respectively. |
Commitments and Contingencies
Commitments and Contingencies | 6 Months Ended |
Jul. 02, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies We are subject to various claims and legal proceedings with respect to matters such as governmental regulations and other actions arising out of the normal course of business. Management believes that the resolution of these matters will not have a material adverse effect on our financial position, results of operations, or cash flow. We had $58.6 million in standby letters of credit outstanding as of July 2, 2022 ( $59.4 million as of January 1, 2022). Guarantees After the sale of our legacy carbonated soft drink and juice business in January 2018, we have continued to provide contractual payment guarantees to two third-party lessors of certain real property used in these businesses. The leases were conveyed to the buyer as part of the sale, but our guarantee was not released by the landlord. The two lease agreements mature in 2027 and 2028. The maximum potential amount of undiscounted future payments under the guarantee is approximately $15.0 million as of July 2, 2022, which was calculated based on the minimum lease payments of the leases over the remaining term of the agreements. The sale documents require the buyer to pay all p ost-closing obligations under these conveyed leases, and to reimburse us if the landlord calls on a guarantee. The buyer has also agreed to a covenant to negotiate with the landlords for a release of our guarantees. We currently do not believe it is probable we would be required to perform under any of these guarantees or any of the underlying obligations. |
Fair Value Measurements
Fair Value Measurements | 6 Months Ended |
Jul. 02, 2022 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | Fair Value Measurements FASB Accounting Standards Codification Topic 820, Fair Value Measurements and Disclosures defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants at the measurement date. Additionally, the inputs used to measure fair value are prioritized based on a three-level hierarchy. This hierarchy requires entities to maximize the use of observable inputs and minimize the use of unobservable inputs. The three levels of inputs used to measure fair value are as follows: • Level 1—Quoted prices in active markets for identical assets or liabilities. • Level 2—Observable inputs other than quoted prices included in Level 1, such as quoted prices for similar assets and liabilities in active markets; quoted prices for identical or similar assets and liabilities in markets that are not active; or other inputs that are observable or can be corroborated by observable market data. • Level 3—Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. This includes certain pricing models, discounted cash flow methodologies and similar techniques that use significant unobservable inputs. Fair Value of Financial Instruments The carrying amounts reflected in the Consolidated Balance Sheets for cash and cash equivalents, receivables, payables, short-term borrowings, and long-term debt approximate their respective fair values, except as otherwise indicated. The carrying values and estimated fair values of our significant outstanding debt as of July 2, 2022 and January 1, 2022 were as follows: July 2, 2022 January 1, 2022 (in millions of U.S. dollars) Carrying Fair Carrying Fair 3.875% senior notes due in 2028 1, 2 $ 464.3 $ 376.4 $ 502.7 $ 516.2 4.375% senior notes due in 2029 1,2 740.7 606.4 740.0 735.8 Total $ 1,205.0 $ 982.8 $ 1,242.7 $ 1,252.0 ______________________ 1 The fair values were based on the trading levels and bid/offer prices observed by a market participant and are considered Level 2 financial instruments. 2 Carrying value of our significant outstanding debt is net of unamortized debt issuance costs as of July 2, 2022 and January 1, 2022. Non-Financial Assets Measured at Fair Value on a Non-Recurring Basis In addition to assets and liabilities that are measured at fair value on a recurring basis, we are also required to measure certain items at fair value on a non-recurring basis. These assets can include goodwill, intangible assets, property, plant and equipment, lease-related right-of-use assets, and long-lived assets that have been reduced to fair value when they are held for sale. If certain triggering events occur, or if an annual impairment test is required, we would evaluate these non-financial assets for impairment. If an impairment were to occur, the asset would be recorded at the estimated fair value, using primarily Level 2 or unobservable Level 3 inputs. During the second quarter of 2022, the assets held for sale of our business in Russia were measured at the lower of carrying value or fair value less costs to sell as discussed in more detail in Note 1 - Business and Recent Accounting Pronouncements. The Company's measurement of fair value less costs to sell was based on the total consideration expected to be received by the Company as outlined in the disposition agreement which is a Level 2 input. |
Subsequent Events
Subsequent Events | 6 Months Ended |
Jul. 02, 2022 | |
Subsequent Events [Abstract] | |
Subsequent Events | Subsequent Events On August 9, 2022, our Board of Directors declared a dividend of $0.07 per share on common shares, payable in cash on September 7, 2022, to shareowners of record at the close of business on August 24, 2022. On August 9, 2022, our Board of Directors approved a share repurchase program for up to $100.0 million of our outstanding common shares over a 12-month period commencing on August 15, 2022. On July 21, 2022, we entered into an agreement for the sale of one of our properties. The aggregate estimated consideration is $54.0 million. The closing of the transaction is subject to satisfaction of customary conditions. The agreement includes a provision for the potential leaseback of the property. We are currently assessing the impact of the transaction on our Consolidated Financial Statements. On July 19, 2022, we completed the sale of our Russia business. During the second quarter of 2022, in connection with the decision to exit the Russia business, the assets and liabilities were classified as held for sale and an asset impairment charge was recorded. Refer to Note 1 - Business and Recent Accounting Pronouncements for additional details. We are currently assessing the impact of the sale on our Consolidated Financial Statements. |
Business and Recent Accountin_2
Business and Recent Accounting Pronouncements - (Policies) | 6 Months Ended |
Jul. 02, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | Basis of Presentation The accompanying interim unaudited Consolidated Financial Statements have been prepared in accordance with the instructions to Form 10-Q and Article 10 of Regulation S-X and in accordance with U.S. generally accepted accounting principles (“GAAP”) for interim financial reporting. In the opinion of management, all adjustments (consisting of normal recurring adjustments) considered necessary for a fair statement of our results of operations for the interim periods reported and of our financial condition as of the date of the interim balance sheet have been included. The Consolidated Balance Sheet as of January 1, 2022 included herein was derived from the audited Consolidated Financial Statements included in our Annual Report on Form 10-K for the fiscal year ended January 1, 2022 (our “2021 Annual Report”). This Quarterly Report on Form 10-Q should be read in conjunction with the annual audited Consolidated Financial Statements and accompanying notes in our 2021 Annual Report. The accounting policies used in these interim Consolidated Financial Statements are consistent with those used in the annual Consolidated Financial Statements. |
Cost of sales | Cost of salesWe record costs associated with the manufacturing of our products in cost of sales. Shipping and handling costs incurred to store, prepare and move products between production facilities or from production facilities to branch locations or storage facilities are recorded in cost of sales. Shipping and handling costs incurred to deliver products from our branch locations to the end-user consumer of those products are recorded in SG&A expenses. All other costs incurred in the shipment of products from our production facilities to customer locations are reflected in cost of sales. Shipping and handling costs included in SG&A expenses were $137.3 million and $264.6 million for the three and six months ended July 2, 2022, respectively, and $118.6 million and $228.7 million for the three and six months ended July 3, 2021, respectively. Finished goods inventory costs include the cost of direct labor and materials and the applicable share of overhead expense chargeable to production. |
Goodwill | Goodwill Goodwill represents the excess purchase price of acquired businesses over the fair value of the net assets acquired. We test goodwill for impairment at least annually on the first day of the fourth quarter, based on our reporting unit carrying values, calculated as total assets less non-interest bearing liabilities, as of the end of the third quarter, or more frequently if we determine a triggering event has occurred during the year. During the second quarter of 2022, our Board of Directors approved the exit of our business in Russia and our reporting segments were realigned. In connection therewith, we identified a triggering event indicating possible impairment of goodwill and intangible assets, as further described below. We did not identify impairment of our property, plant and equipment, lease-related right-of-use assets, or long-lived assets except as noted above related to the Russia assets held for sale. The Company operates through four operating segments: North America, Europe, Eden Israel, and Aimia. The North America and Europe operating segments are reportable operating segments, and Eden Israel and Aimia are nonreportable operating segments within our Other category. We evaluate goodwill for impairment on a reporting unit basis, which is an operating segment or a level below an operating segment, referred to as a component. A component of an operating segment is a reporting unit if the component constitutes a business for which discrete financial information is available and management regularly reviews the operating results of that component. However, two or more components of an operating segment can be aggregated and deemed a single reporting unit if the components have similar economic characteristics. Our North America operating segment was determined to have three components: DSS, Mountain Valley, and Aquaterra. We have determined that DSS and Aquaterra have similar economic characteristics and have aggregated them as a single reporting unit for the purpose of testing goodwill for impairment (“DSSAqua”). Our Europe operating segment was determined to have three components: Eden Europe, Decantae, and Fonthill, none of which have similar economic characteristics. Our Aimia operating segment was determined to have two components: Aimia and Farrers, neither of which have similar economic characteristics. Our Eden Israel operating segment was determined to be a single component. We have thus determined our reporting units are DSSAqua, Mountain Valley, Eden Europe, Eden Israel, Aimia, Decantae, Farrers and Fonthill. Due to the triggering events identified above arising from the exit of the Russia business and the triggering event arising as a result of the realignment of segments, we were required to perform an impairment test. We elected to bypass the qualitative assessment and performed an interim quantitative impairment test as of May 10, 2022. The interim quantitative impairment test was performed both (1) on a pre-realignment basis on the combined Eden reporting unit (which, prior to realignment, included the Eden Europe and Eden Israel businesses), and (2) on a post-realignment basis, on the Eden Europe and Eden Israel reporting units separately. We determined the fair value of the reporting units being evaluated using a mix of the income approach (which is based on the discounted cash flows of the reporting unit) and the guideline public company approach. We weighted the income approach and the guideline public company approach at 50% each to determine the fair value of the reporting unit. We believe using a combination of these approaches provides a more accurate valuation because it incorporates the expected cash generation of the Company in addition to how a third-party market participant would value the reporting unit. As the business is assumed to continue in perpetuity, the discounted future cash flows include a terminal value. Critical assumptions used in our valuation of reporting units included the anticipated future cash flows, a weighted-average terminal growth rate of 1.5%, a discount rate of 9.0%, and the comparable company multiples. The anticipated future cash flows assumption reflects projected revenue growth rates, SG&A expenses and capital expenditures. The terminal growth rate assumption incorporated into the discounted cash flow calculation reflects our long-term view of the market and industry, projected changes in the sale of our products, pricing of such products and operating profit margins. The discount rate was determined using various factors and sensitive assumptions, including bond yields, size premiums and tax rates. This rate was based on the weighted average cost of capital a market participant would use if evaluating the reporting unit as an investment. The comparable company multiples were based on operating data from guideline publicly traded companies and provide an indication of how much a knowledgeable investor in the marketplace would be willing to pay for a company. These multiples were evaluated and adjusted based on specific characteristics of the reporting units relative to the selected guideline companies and applied to the reporting units' operating data to arrive at an indication of value. These assumptions are considered significant unobservable inputs and represent our best estimate of assumptions that market participants would use to determine the fair value of the respective reporting units. The key inputs into the discounted cash flow analysis were consistent with market data, where available, indicating that the assumptions used were in a reasonable range of observable market data. |
Intangible Assets | Intangible Assets Our intangible assets with indefinite lives relate to trademarks acquired in the acquisition of businesses, and there are no legal, regulatory, contractual, competitive, economic, or other factors that limit the useful life of these intangible assets. Our trademarks with indefinite lives are not amortized, but rather are tested for impairment at least annually or more frequently if we determine a triggering event has occurred during the year. As a result of the triggering events described above arising from the exit of our Russia business and realignment of segments, we also performed recoverability tests on the trademarks with an indefinite life acquired in the acquisition of Eden ("Eden Trademarks") as of May 10, 2022. We elected to bypass the qualitative assessment and performed an interim quantitative impairment test as of May 10, 2022 on the Eden Trademarks. The interim quantitative impairment test was performed for the Eden Trademarks, including the Eden Europe and Eden Israel trademarks, to identify any impairment immediately prior to the segment realignment. The interim quantitative impairment test was then performed for the trademarks with indefinite lives associated with the Eden Europe and Eden Israel businesses upon segment realignment. |
Recently adopted accounting pronouncements and Recently issued accounting pronouncements | Recently adopted accounting pronouncements Update ASU 2021-10- Government Assistance (Topic 832) In November 2021, the Financial Accounting Standards Board ("FASB") issued guidance that requires business entities to disclose information about certain government assistance they receive. The amendments in this Update are effective for all entities within their scope for financial statements issued for annual periods beginning after December 15, 2021. Early application of the amendments is permitted. An entity should apply the amendments in this Update either (1) prospectively to all transactions within the scope of the amendments that are reflected in financial statements at the date of initial application and new transactions that are entered into after the date of initial application or (2) retrospectively to those transactions. Adoption of the new standard did not result in additional disclosures within our unaudited Consolidated Financial Statements. Recently issued accounting pronouncements Update ASU 2020-04 – Reference Rate Reform (Topic 848) In March 2020, the FASB issued guidance which provides optional expedients and exceptions to account for contracts, hedging relationships and other transactions that reference LIBOR or any other reference rates expected to be discontinued because of reference rate reform. This guidance is effective as of March 12, 2020 through December 31, 2022 and may be applied prospectively to contract modifications made and hedging relationships entered into or evaluated on or before December 31, 2022. We are currently evaluating our contracts and do not expect a material impact at this time. We elected to apply the debt agreement expedient and therefore will account for debt agreement amendments as if the modification was not substantial and thus a continuation of the existing contract. Additional elections of expedients and exceptions provided under the guidance will be made when contract modifications in response to reference rate reform commence. Update ASU 2021-08- Business Combinations (Topic 805) In October 2021, the FASB issued guidance that requires entities to use principles in ASC 606 to recognize and measure contract assets and liabilities in revenue contracts acquired in a business combination rather than fair value. For public entities, this guidance is effective after December 15, 2022 for annual and interim periods. Early adoption is permitted, including adoption in an interim period. If early adopted, the amendments are applied retrospectively to all business combinations for which the acquisition date occurred during the fiscal year of adoption. We are currently assessing the impact of adoption of this standard on our Consolidated Financial Statements. |
Revenue | Revenue is recognized, net of sales returns, when a customer obtains control of promised goods or services in an amount that reflects the consideration we expect to receive in exchange for those goods or services. We measure revenue based on the consideration specified in the customer arrangement, and revenue is recognized when the performance obligations in the customer arrangement are satisfied. A performance obligation is a contractual promise to transfer a distinct service to the customer. The transaction price of a contract is allocated to each distinct performance obligation and recognized as revenue when the customer receives the benefit of the performance obligation. Customers typically receive the benefit of our services as they are performed. Substantially all our customer contracts require that we be compensated for services performed to date. This may be upon shipment of goods or upon delivery to the customer, depending on contractual terms. Shipping and handling costs paid by the customer to us are included in revenue and costs incurred by us for shipping and handling activities that are performed after a customer obtains control of the product are accounted for as fulfillment costs. In addition, we exclude from net revenue and cost of sales taxes assessed by governmental authorities on revenue-producing transactions. Although we occasionally accept returns of products from our customers, historically returns have not been material. |
Business and Recent Accountin_3
Business and Recent Accounting Pronouncements - (Tables) | 6 Months Ended |
Jul. 02, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Schedule of Goodwill by Segment | The changes in the carrying amount of goodwill on a reporting segment basis for the six months ended July 2, 2022, are as follows: Reporting Segment North America Europe Other Total (in millions of U.S. dollars) Balance at January 1, 2022 Goodwill $ 994.1 $ 377.6 $ 53.8 $ 1,425.5 Accumulated impairment losses — (103.6) (0.5) (104.1) $ 994.1 $ 274.0 $ 53.3 $ 1,321.4 Goodwill acquired during the year 0.1 0.6 — 0.7 Measurement period adjustments 1.2 1.0 — 2.2 Impairment charges — (11.2) — (11.2) Segment realignment allocation — (63.3) 63.3 — Foreign exchange (0.4) (21.0) (6.1) (27.5) Balance at July 2, 2022 Goodwill 995.0 294.9 111.0 1,400.9 Accumulated impairment losses — (114.8) (0.5) (115.3) $ 995.0 $ 180.1 $ 110.5 $ 1,285.6 |
Revenue - (Tables)
Revenue - (Tables) | 6 Months Ended |
Jul. 02, 2022 | |
Revenue from Contract with Customer [Abstract] | |
Disaggregation of Revenue by Geographic Area | Further disaggregation of net revenue to external customers by geographic area based on customer location is as follows: For the Three Months Ended For the Six Months Ended (in millions of U.S. dollars) July 2, 2022 July 3, 2021 July 2, 2022 July 3, 2021 United States $ 419.8 $ 378.1 $ 801.6 $ 728.0 United Kingdom 33.4 38.2 74.8 74.9 Canada 17.1 18.6 32.5 34.5 All other countries 101.1 91.2 188.6 167.1 Total $ 571.4 $ 526.1 $ 1,097.5 $ 1,004.5 |
Acquisitions - (Tables)
Acquisitions - (Tables) | 6 Months Ended |
Jul. 02, 2022 | |
Business Combination and Asset Acquisition [Abstract] | |
Allocation of Purchase Price to Fair Value of Assets Acquired and Liabilities Assumed | The table below presents the preliminary total cash consideration allocation of the estimated acquisition date fair values of the assets acquired and liabilities assumed: (in millions of U.S. dollars) Originally Reported Measurement Period Adjustments Acquired Value Cash and cash equivalents $ 6.8 $ — $ 6.8 Accounts receivable 1.3 0.4 1.7 Inventory 0.1 — 0.1 Prepaid expenses and other current assets 0.2 — 0.2 Property, plant and equipment 21.7 (3.0) 18.7 Operating lease right-of-use-assets 0.4 1.1 1.5 Goodwill 38.1 (0.4) 37.7 Intangible assets 20.0 — 20.0 Current maturities of long-term debt (1.6) 0.8 (0.8) Accounts payable and accrued liabilities (9.9) — (9.9) Current operating lease obligations (0.4) (0.3) (0.7) Long-term debt (17.7) 2.2 (15.5) Operating lease obligations — (0.8) (0.8) Deferred tax liabilities (5.9) — (5.9) Total $ 53.1 $ — $ 53.1 |
Common Shares and Net Loss pe_2
Common Shares and Net Loss per Common Share - (Tables) | 6 Months Ended |
Jul. 02, 2022 | |
Earnings Per Share [Abstract] | |
Reconciliation of Numerator and Denominators of Basic and Diluted Net Income (Loss) Per Common Share | The components of weighted average basic and diluted shares outstanding are below: For the Three Months Ended For the Six Months Ended July 2, 2022 July 3, 2021 July 2, 2022 July 3, 2021 Weighted average common shares outstanding - basic 161,149 161,561 161,038 161,097 Dilutive effect of Stock Options — — — — Dilutive effect of Performance-based RSUs — — — — Dilutive effect of Time-based RSUs — — — — Weighted average common shares outstanding - diluted 161,149 161,561 161,038 161,097 |
Summary of the Anti-dilutive Securities Excluded from the Computation of Diluted Net Income (Loss) Per Common Share | The following table summarizes anti-dilutive securities excluded from the computation of diluted net loss per common share for the periods indicated: For the Three Months Ended For the Six Months Ended (in thousands) July 2, 2022 July 3, 2021 July 2, 2022 July 3, 2021 Stock Options 4,617 5,719 4,617 5,719 Performance-based RSUs 1 1,191 836 1,191 836 Time-based RSUs 2 841 481 841 481 ______________________ 1 Performance-based RSUs represent the number of shares expected to be issued based primarily on the estimated achievement of performance targets for these awards. 2 Time-based RSUs represent the number of shares expected to be issued based on known employee retention information. |
Segment Reporting - (Tables)
Segment Reporting - (Tables) | 6 Months Ended |
Jul. 02, 2022 | |
Segment Reporting [Abstract] | |
Segment Reporting Information by Operating Segment | (in millions of U.S. dollars) North America Europe Other Eliminations Total For the Three Months Ended July 2, 2022 Revenue, net $ 436.7 $ 69.9 $ 64.8 $ — $ 571.4 Depreciation and amortization 44.3 10.1 5.8 — 60.2 Operating income (loss) 48.3 (29.1) (12.6) — 6.6 Additions to property, plant and equipment 35.7 6.9 4.0 — 46.6 For the Six Months Ended July 2, 2022 Revenue, net $ 833.8 $ 134.2 $ 129.5 $ — $ 1,097.5 Depreciation and amortization 89.6 19.9 11.9 — 121.4 Operating income (loss) 76.6 (32.7) (22.0) — 21.9 Additions to property, plant and equipment 62.3 13.1 9.8 — 85.2 (in millions of U.S. dollars) North America Europe Other Eliminations Total For the Three Months Ended July 3, 2021 Revenue, net 1 $ 396.7 $ 64.3 $ 65.4 $ (0.3) $ 526.1 Depreciation and amortization 36.5 9.9 5.6 — 52.0 Operating income (loss) 40.1 (1.6) (6.9) — 31.6 Additions to property, plant and equipment 24.1 6.3 4.4 — 34.8 For the Six Months Ended July 3, 2021 Revenue, net 1 $ 762.2 $ 119.9 $ 123.3 $ (0.9) $ 1,004.5 Depreciation and amortization 74.3 19.6 11.2 — 105.1 Operating income (loss) 66.2 (5.0) (16.5) — 44.7 Additions to property, plant and equipment 44.3 11.3 6.2 — 61.8 ______________________ 1 Intersegment revenue between the Other category and the Europe reporting segment was $0.3 million for three months ended July 3, 2021 and $0.9 million for the six months ended July 3, 2021 . |
Revenues by Channel Reporting Segment | Revenues by channel by reporting segment were as follows: For the Three Months Ended July 2, 2022 (in millions of U.S. dollars) North America Europe Other Eliminations Total Revenue, net Water Direct/Water Exchange $ 321.1 $ 53.7 $ 11.7 $ — $ 386.5 Water Refill/Water Filtration 47.3 8.2 0.7 — 56.2 Other Water 22.2 0.4 21.5 — 44.1 Water Dispensers 18.5 — — — 18.5 Other 27.6 7.6 30.9 — 66.1 Total $ 436.7 $ 69.9 $ 64.8 $ — $ 571.4 For the Six Months Ended July 2, 2022 (in millions of U.S. dollars) North America Europe Other Eliminations Total Revenue, net Water Direct/Water Exchange $ 599.4 $ 101.9 $ 22.5 $ — $ 723.8 Water Refill/Water Filtration 89.5 16.4 1.2 — 107.1 Other Water 56.2 0.8 37.5 — 94.5 Water Dispensers 32.7 — — — 32.7 Other 56.0 15.1 68.3 — 139.4 Total $ 833.8 $ 134.2 $ 129.5 $ — $ 1,097.5 For the Three Months Ended July 3, 2021 (in millions of U.S. dollars) North America Europe Other Eliminations 1 Total Revenue, net Water Direct/Water Exchange $ 264.9 $ 47.7 $ 10.4 $ — $ 323.0 Water Refill/Water Filtration 45.1 7.8 0.2 — 53.1 Other Water 42.2 0.4 22.0 — 64.6 Water Dispensers 17.6 — — — 17.6 Other 26.9 8.4 32.8 (0.3) 67.8 Total $ 396.7 $ 64.3 $ 65.4 $ (0.3) $ 526.1 For the Six Months Ended July 3, 2021 (in millions of U.S. dollars) North America Europe Other Eliminations 1 Total Revenue, net Water Direct/Water Exchange $ 503.7 $ 88.0 $ 18.9 $ — $ 610.6 Water Refill/Water Filtration 90.2 15.7 0.2 — 106.1 Other Water 83.1 0.6 37.2 — 120.9 Water Dispensers 32.6 — — — 32.6 Other 52.6 15.6 67.0 (0.9) 134.3 Total $ 762.2 $ 119.9 $ 123.3 $ (0.9) $ 1,004.5 ______________________ 1 Intersegment revenue between the Other category and the Europe reporting segment was $0.3 million for three months ended July 3, 2021 and $0.9 million for the six months ended July 3, 2021 . |
Inventories - (Tables)
Inventories - (Tables) | 6 Months Ended |
Jul. 02, 2022 | |
Inventory Disclosure [Abstract] | |
Summary of Inventories | The following table summarizes inventories as of July 2, 2022 and January 1, 2022: (in millions of U.S. dollars) July 2, 2022 January 1, 2022 Raw materials $ 64.7 $ 56.7 Finished goods 31.0 27.0 Resale items 11.9 9.1 Other 2.1 1.8 Total $ 109.7 $ 94.6 |
Accumulated Other Comprehensi_2
Accumulated Other Comprehensive (Loss) Income - (Tables) | 6 Months Ended |
Jul. 02, 2022 | |
Equity [Abstract] | |
Changes in Accumulated Other Comprehensive (Loss) Income by Component | Changes in accumulated other comprehensive (loss) income (“AOCI”) by component for the three and six months ended July 2, 2022 and July 3, 2021 were as follows: (in millions of U.S. dollars) 1 Pension Currency Total Beginning balance April 2, 2022 $ (1.7) $ (67.5) $ (69.2) OCI before reclassifications — 1.8 1.8 Amounts reclassified from AOCI — — — Net current-period OCI — 1.8 1.8 Ending balance July 2, 2022 $ (1.7) $ (65.7) $ (67.4) Beginning balance January 1, 2022 $ (1.7) $ (67.4) $ (69.1) OCI before reclassifications — 1.7 1.7 Amounts reclassified from AOCI — — — Net current-period OCI — 1.7 1.7 Ending balance July 2, 2022 $ (1.7) $ (65.7) $ (67.4) Beginning balance April 3, 2021 $ (1.1) $ (79.1) $ (80.2) OCI before reclassifications — 2.0 2.0 Amounts reclassified from AOCI — — — Net current-period OCI — 2.0 2.0 Ending Balance July 3, 2021 $ (1.1) $ (77.1) $ (78.2) Beginning balance January 2, 2021 $ (1.1) $ (85.6) $ (86.7) OCI before reclassifications — 8.5 8.5 Amounts reclassified from AOCI — — — Net current-period OCI — 8.5 8.5 Ending Balance July 3, 2021 $ (1.1) $ (77.1) $ (78.2) ______________________ 1 All amounts are net of tax. Amounts in parentheses indicate debits. |
Fair Value Measurements - (Tabl
Fair Value Measurements - (Tables) | 6 Months Ended |
Jul. 02, 2022 | |
Fair Value Disclosures [Abstract] | |
Carrying Value and Estimated Fair Values of Outstanding Debt | The carrying values and estimated fair values of our significant outstanding debt as of July 2, 2022 and January 1, 2022 were as follows: July 2, 2022 January 1, 2022 (in millions of U.S. dollars) Carrying Fair Carrying Fair 3.875% senior notes due in 2028 1, 2 $ 464.3 $ 376.4 $ 502.7 $ 516.2 4.375% senior notes due in 2029 1,2 740.7 606.4 740.0 735.8 Total $ 1,205.0 $ 982.8 $ 1,242.7 $ 1,252.0 ______________________ 1 The fair values were based on the trading levels and bid/offer prices observed by a market participant and are considered Level 2 financial instruments. 2 Carrying value of our significant outstanding debt is net of unamortized debt issuance costs as of July 2, 2022 and January 1, 2022. |
Business and Recent Accountin_4
Business and Recent Accounting Pronouncements - Additional Information (Details) | 3 Months Ended | 6 Months Ended | ||||
May 10, 2022 USD ($) | Jul. 02, 2022 USD ($) segment location property country reporting_unit bottle | Jul. 03, 2021 USD ($) | Jul. 02, 2022 USD ($) segment_component location country segment | Jul. 03, 2021 USD ($) | Jan. 01, 2022 USD ($) | |
Business And Basis Of Presentation [Line Items] | ||||||
Estimated reduction of single-use retail water bottle production (more than) | bottle | 400,000,000 | |||||
Goodwill impairment | $ 11,200,000 | |||||
Impairment charges | $ 29,100,000 | $ 0 | 29,100,000 | $ 0 | ||
Number of properties, approved to sell | property | 4 | |||||
Accounts payable and accrued liabilities | $ 430,200,000 | $ 430,200,000 | $ 437,700,000 | |||
Number of operating segments | segment | 4 | |||||
Disposal Group, Held-for-sale, Not Discontinued Operations | Approved Sale of Multiple Properties | ||||||
Business And Basis Of Presentation [Line Items] | ||||||
Assets held for sale, land and buildings | 21,600,000 | $ 21,600,000 | ||||
Eden | Trademarks | ||||||
Business And Basis Of Presentation [Line Items] | ||||||
Goodwill impairment | $ 0 | |||||
Percentage of fair value of reporting unit in excess of carrying value | 9% | |||||
Eden Europe and Eden Israel | ||||||
Business And Basis Of Presentation [Line Items] | ||||||
Goodwill impairment | $ 0 | |||||
Number of reporting units | reporting_unit | 2 | |||||
Eden Israel | Trademarks | ||||||
Business And Basis Of Presentation [Line Items] | ||||||
Goodwill impairment | $ 0 | |||||
Percentage of fair value of reporting unit in excess of carrying value | 103% | |||||
Guideline Public Company Approach | ||||||
Business And Basis Of Presentation [Line Items] | ||||||
Reporting unit, measurement input | 0.50 | 0.50 | ||||
Valuation, Income Approach | ||||||
Business And Basis Of Presentation [Line Items] | ||||||
Reporting unit, measurement input | 0.50 | 0.50 | ||||
Aimia | ||||||
Business And Basis Of Presentation [Line Items] | ||||||
Goodwill impairment | $ 0 | |||||
Number of segment components | segment_component | 2 | |||||
North America Segment and Europe Segment | ||||||
Business And Basis Of Presentation [Line Items] | ||||||
Number of reporting segments | segment | 2 | |||||
North America | ||||||
Business And Basis Of Presentation [Line Items] | ||||||
Goodwill impairment | $ 0 | |||||
Number of segment components | segment_component | 3 | |||||
Europe | ||||||
Business And Basis Of Presentation [Line Items] | ||||||
Goodwill impairment | $ 11,200,000 | |||||
Number of segment components | segment_component | 3 | |||||
Europe | Weighted Average Terminal Growth Rate | Eden | ||||||
Business And Basis Of Presentation [Line Items] | ||||||
Reporting unit, measurement input | 0.015 | 0.015 | ||||
Europe | Discount Rate | Eden | ||||||
Business And Basis Of Presentation [Line Items] | ||||||
Reporting unit, measurement input | 0.090 | 0.090 | ||||
COVID-19 | ||||||
Business And Basis Of Presentation [Line Items] | ||||||
Wage subsidies received | $ 0 | 800,000 | $ 300,000 | 2,200,000 | ||
Accounts payable and accrued liabilities | 7,500,000 | $ 7,500,000 | $ 7,500,000 | |||
Europe | Minimum | ||||||
Business And Basis Of Presentation [Line Items] | ||||||
Number of years carbon neutrality maintained (more than) | 10 years | |||||
Russia | Europe | Disposal Group, Held-for-sale, Not Discontinued Operations | Exiting Of Operations In Russia | ||||||
Business And Basis Of Presentation [Line Items] | ||||||
Assets held for sale, net | 10,300,000 | $ 10,300,000 | ||||
Liabilities held for sale | 6,300,000 | 6,300,000 | ||||
Impairment charge, reduce carrying value to estimated fair value | 11,200,000 | 11,200,000 | ||||
Goodwill impairment | 11,200,000 | 11,200,000 | ||||
Impairment charges | 29,100,000 | 29,100,000 | ||||
Russia | Europe | Trademarks | Disposal Group, Held-for-sale, Not Discontinued Operations | Exiting Of Operations In Russia | ||||||
Business And Basis Of Presentation [Line Items] | ||||||
Indefinite-lived intangible asset impairment | 6,700,000 | 6,700,000 | ||||
Russia | Europe | Eden | Disposal Group, Held-for-sale, Not Discontinued Operations | Exiting Of Operations In Russia | ||||||
Business And Basis Of Presentation [Line Items] | ||||||
Goodwill impairment | 11,200,000 | 11,200,000 | ||||
Russia | Europe | Eden Europe | Trademarks | Disposal Group, Held-for-sale, Not Discontinued Operations | Exiting Of Operations In Russia | ||||||
Business And Basis Of Presentation [Line Items] | ||||||
Indefinite-lived intangible asset impairment | $ 6,700,000 | $ 6,700,000 | ||||
Water Direct | ||||||
Business And Basis Of Presentation [Line Items] | ||||||
Number of countries, country footprint | country | 21 | 21 | ||||
Water Exchange and Water Refill | Minimum | ||||||
Business And Basis Of Presentation [Line Items] | ||||||
Number of locations | location | 14,000 | 14,000 | ||||
Water Dispensers | ||||||
Business And Basis Of Presentation [Line Items] | ||||||
Number of locations | location | 9,000 | 9,000 | ||||
Water Refill | ||||||
Business And Basis Of Presentation [Line Items] | ||||||
Number of locations | location | 24,000 | 24,000 | ||||
Water Filtration | ||||||
Business And Basis Of Presentation [Line Items] | ||||||
Number of countries, country footprint | country | 21 | 21 | ||||
Shipping and Handling | Selling, General and Administrative Expenses | ||||||
Business And Basis Of Presentation [Line Items] | ||||||
Shipping and handling costs | $ 137,300,000 | $ 118,600,000 | $ 264,600,000 | $ 228,700,000 |
Business and Recent Accountin_5
Business and Recent Accounting Pronouncements - Changes Carrying Value of Goodwill (Details) $ in Millions | 6 Months Ended |
Jul. 02, 2022 USD ($) | |
Goodwill [Roll Forward] | |
Goodwill gross, beginning balance | $ 1,425.5 |
Accumulated impairment losses, beginning balance | (104.1) |
Goodwill, beginning balance | 1,321.4 |
Goodwill acquired during the year | 0.7 |
Measurement period adjustments | 2.2 |
Impairment charges | (11.2) |
Segment realignment allocation | 0 |
Foreign exchange | (27.5) |
Goodwill gross, ending balance | 1,400.9 |
Accumulated impairment losses, ending balance | (115.3) |
Goodwill, ending balance | 1,285.6 |
Other | |
Goodwill [Roll Forward] | |
Goodwill gross, beginning balance | 53.8 |
Accumulated impairment losses, beginning balance | (0.5) |
Goodwill, beginning balance | 53.3 |
Goodwill acquired during the year | 0 |
Measurement period adjustments | 0 |
Impairment charges | 0 |
Segment realignment allocation | 63.3 |
Foreign exchange | (6.1) |
Goodwill gross, ending balance | 111 |
Accumulated impairment losses, ending balance | (0.5) |
Goodwill, ending balance | 110.5 |
North America | |
Goodwill [Roll Forward] | |
Goodwill gross, beginning balance | 994.1 |
Accumulated impairment losses, beginning balance | 0 |
Goodwill, beginning balance | 994.1 |
Goodwill acquired during the year | 0.1 |
Measurement period adjustments | 1.2 |
Impairment charges | 0 |
Segment realignment allocation | 0 |
Foreign exchange | (0.4) |
Goodwill gross, ending balance | 995 |
Accumulated impairment losses, ending balance | 0 |
Goodwill, ending balance | 995 |
Europe | |
Goodwill [Roll Forward] | |
Goodwill gross, beginning balance | 377.6 |
Accumulated impairment losses, beginning balance | (103.6) |
Goodwill, beginning balance | 274 |
Goodwill acquired during the year | 0.6 |
Measurement period adjustments | 1 |
Impairment charges | (11.2) |
Segment realignment allocation | (63.3) |
Foreign exchange | (21) |
Goodwill gross, ending balance | 294.9 |
Accumulated impairment losses, ending balance | (114.8) |
Goodwill, ending balance | $ 180.1 |
Revenue - Additional Informatio
Revenue - Additional Information (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | |
Jul. 02, 2022 | Jul. 02, 2022 | Jan. 01, 2022 | |
Revenue from Contract with Customer [Abstract] | |||
Accrued sales incentives | $ 8.2 | $ 8.2 | $ 8 |
Deferred revenue | 15.5 | 15.5 | $ 12.6 |
Revenue recognized | $ 2.4 | $ 11 |
Revenue - Schedule of Revenue t
Revenue - Schedule of Revenue to External Customers (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jul. 02, 2022 | Jul. 03, 2021 | Jul. 02, 2022 | Jul. 03, 2021 | |
Disaggregation of Revenue [Line Items] | ||||
Total | $ 571.4 | $ 526.1 | $ 1,097.5 | $ 1,004.5 |
United States | ||||
Disaggregation of Revenue [Line Items] | ||||
Total | 419.8 | 378.1 | 801.6 | 728 |
United Kingdom | ||||
Disaggregation of Revenue [Line Items] | ||||
Total | 33.4 | 38.2 | 74.8 | 74.9 |
Canada | ||||
Disaggregation of Revenue [Line Items] | ||||
Total | 17.1 | 18.6 | 32.5 | 34.5 |
All other countries | ||||
Disaggregation of Revenue [Line Items] | ||||
Total | $ 101.1 | $ 91.2 | $ 188.6 | $ 167.1 |
Acquisitions - Additional Infor
Acquisitions - Additional Information (Details) $ in Millions | Dec. 30, 2021 USD ($) |
Sip-Well NV Acquisition | Eden Springs Netherlands B.V. | |
Business Acquisition [Line Items] | |
Cash consideration paid | $ 53.1 |
Acquisitions - Purchase Price A
Acquisitions - Purchase Price Allocation (Details) - USD ($) $ in Millions | 6 Months Ended | |||
Jul. 02, 2022 | Jul. 02, 2022 | Jan. 01, 2022 | Dec. 30, 2021 | |
Business Acquisition [Line Items] | ||||
Goodwill | $ 1,285.6 | $ 1,285.6 | $ 1,321.4 | |
Measurement period adjustments | 2.2 | |||
Sip-Well NV Acquisition | Eden Springs Netherlands B.V. | ||||
Business Acquisition [Line Items] | ||||
Cash and cash equivalents | 6.8 | 6.8 | $ 6.8 | |
Measurement Period Adjustments, Cash and cash equivalents | 0 | |||
Accounts receivable | 1.7 | 1.7 | 1.3 | |
Measurement Period Adjustments, Accounts receivable | 0.4 | |||
Inventory | 0.1 | 0.1 | 0.1 | |
Measurement Period Adjustments, Inventory | 0 | |||
Prepaid expenses and other current assets | 0.2 | 0.2 | 0.2 | |
Measurement Period Adjustments, Prepaid expenses and other current assets | 0 | |||
Property, plant and equipment | 18.7 | 18.7 | 21.7 | |
Measurement Period Adjustments, Property, plant and equipment | (3) | |||
Operating lease right-of-use-assets | 1.5 | 1.5 | 0.4 | |
Measurement Period Adjustments, Operating lease right-of-use assets | 1.1 | |||
Goodwill | 37.7 | 37.7 | 38.1 | |
Measurement period adjustments | (0.4) | |||
Intangible assets | 20 | 20 | 20 | |
Measurement Period Adjustments, Intangible assets | 0 | |||
Current maturities of long-term debt | (0.8) | (0.8) | (1.6) | |
Measurement Period Adjustments, Current maturities of long-term debt | 0.8 | |||
Accounts payable and accrued liabilities | (9.9) | (9.9) | (9.9) | |
Measurement Period Adjustments, Accounts payable and accrued liabilities | 0 | |||
Current operating lease obligations | (0.7) | (0.7) | (0.4) | |
Measurement Period Adjustments, Current operating lease obligations | (0.3) | |||
Long-term debt | (15.5) | (15.5) | (17.7) | |
Measurement Period Adjustments, Long-term debt | 2.2 | |||
Operating lease obligations | (0.8) | (0.8) | 0 | |
Measurement Period Adjustments, Operating lease obligations | (0.8) | |||
Deferred tax liabilities | (5.9) | (5.9) | (5.9) | |
Measurement Period Adjustments, Deferred tax liabilities | 0 | |||
Total | $ 53.1 | 53.1 | $ 53.1 | |
Measurement Period Adjustments, Total | $ 0 |
Share-based Compensation - Addi
Share-based Compensation - Additional Information (Details) - Amended and Restated Equity Plan - Common Shares shares in Thousands, $ in Millions | 3 Months Ended |
Jul. 02, 2022 USD ($) shares | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Grants in period (in shares) | shares | 76,480 |
Grants in period, fair value | $ | $ 1.2 |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jul. 02, 2022 | Jul. 03, 2021 | Jul. 02, 2022 | Jul. 03, 2021 | |
Income Tax Disclosure [Abstract] | ||||
Income tax expense (benefit) | $ 1.4 | $ (3.4) | $ 3.8 | $ 1.3 |
Pre-tax loss from continuing operations | $ 21.1 | $ 11.7 | $ 25.4 | $ 17.2 |
Effective income tax rates | (6.60%) | 29.10% | (15.00%) | (7.60%) |
Common Shares and Net Loss pe_3
Common Shares and Net Loss per Common Share - Additional Information (Details) - USD ($) | 3 Months Ended | 6 Months Ended | 14 Months Ended | ||||
May 10, 2021 | Jul. 02, 2022 | Jul. 03, 2021 | Jul. 02, 2022 | Jul. 03, 2021 | Jul. 02, 2022 | May 04, 2021 | |
Equity, Class of Treasury Stock [Line Items] | |||||||
Common shares repurchased and canceled | $ 200,000 | $ 13,200,000 | $ 2,000,000 | $ 16,300,000 | |||
Repurchase Plan | |||||||
Equity, Class of Treasury Stock [Line Items] | |||||||
Share repurchase program, authorized amount (up to) | $ 50,000,000 | ||||||
Share repurchase program, period in force | 12 months | ||||||
Common shares repurchased and cancelled (in shares) | 0 | 2,646,831 | |||||
Common shares repurchased and canceled | $ 43,500,000 |
Common Shares and Net Loss pe_4
Common Shares and Net Loss per Common Share - Reconciliation (Details) - shares shares in Thousands | 3 Months Ended | 6 Months Ended | ||
Jul. 02, 2022 | Jul. 03, 2021 | Jul. 02, 2022 | Jul. 03, 2021 | |
Earnings Per Share, Diluted, by Common Class, Including Two Class Method [Line Items] | ||||
Weighted average common shares outstanding - basic (in shares) | 161,149 | 161,561 | 161,038 | 161,097 |
Weighted average common shares outstanding - diluted (in shares) | 161,149 | 161,561 | 161,038 | 161,097 |
Performance-based RSUs | ||||
Earnings Per Share, Diluted, by Common Class, Including Two Class Method [Line Items] | ||||
Dilutive effect (in shares) | 0 | 0 | 0 | 0 |
Time-based RSUs 2 | ||||
Earnings Per Share, Diluted, by Common Class, Including Two Class Method [Line Items] | ||||
Dilutive effect (in shares) | 0 | 0 | 0 | 0 |
Stock Options | ||||
Earnings Per Share, Diluted, by Common Class, Including Two Class Method [Line Items] | ||||
Dilutive effect (in shares) | 0 | 0 | 0 | 0 |
Common Shares and Net Loss pe_5
Common Shares and Net Loss per Common Share - Anti-dilutive Securities Excluded from the Computation (Details) - shares shares in Thousands | 3 Months Ended | 6 Months Ended | ||
Jul. 02, 2022 | Jul. 03, 2021 | Jul. 02, 2022 | Jul. 03, 2021 | |
Stock Options | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Anti-dilutive securities excluded from the computation of diluted income (loss) per common share (in shares) | 4,617 | 5,719 | 4,617 | 5,719 |
Performance-based RSUs | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Anti-dilutive securities excluded from the computation of diluted income (loss) per common share (in shares) | 1,191 | 836 | 1,191 | 836 |
Time-based RSUs 2 | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Anti-dilutive securities excluded from the computation of diluted income (loss) per common share (in shares) | 841 | 481 | 841 | 481 |
Segment Reporting - Additional
Segment Reporting - Additional Information (Details) | 3 Months Ended |
Jul. 02, 2022 segment | |
North America Segment and Europe Segment | |
Segment Reporting Information [Line Items] | |
Number of reporting segments | 2 |
Segment Reporting - Information
Segment Reporting - Information by Operating Segment (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jul. 02, 2022 | Jul. 03, 2021 | Jul. 02, 2022 | Jul. 03, 2021 | |
Segment Reporting Information [Line Items] | ||||
Revenue, net | $ 571.4 | $ 526.1 | $ 1,097.5 | $ 1,004.5 |
Depreciation and amortization | 60.2 | 52 | 121.4 | 105.1 |
Operating income (loss) | 6.6 | 31.6 | 21.9 | 44.7 |
Additions to property, plant and equipment | 46.6 | 34.8 | 85.2 | 61.8 |
Other | ||||
Segment Reporting Information [Line Items] | ||||
Revenue, net | 64.8 | 65.4 | 129.5 | 123.3 |
Depreciation and amortization | 5.8 | 5.6 | 11.9 | 11.2 |
Operating income (loss) | (12.6) | (6.9) | (22) | (16.5) |
Additions to property, plant and equipment | 4 | 4.4 | 9.8 | 6.2 |
Eliminations | ||||
Segment Reporting Information [Line Items] | ||||
Revenue, net | 0 | (0.3) | 0 | (0.9) |
Depreciation and amortization | 0 | 0 | 0 | 0 |
Operating income (loss) | 0 | 0 | 0 | 0 |
Additions to property, plant and equipment | 0 | 0 | 0 | 0 |
Eliminations | All Other Products to Europe | ||||
Segment Reporting Information [Line Items] | ||||
Revenue, net | 0.3 | 0.9 | ||
North America | Operating Segments | ||||
Segment Reporting Information [Line Items] | ||||
Revenue, net | 436.7 | 396.7 | 833.8 | 762.2 |
Depreciation and amortization | 44.3 | 36.5 | 89.6 | 74.3 |
Operating income (loss) | 48.3 | 40.1 | 76.6 | 66.2 |
Additions to property, plant and equipment | 35.7 | 24.1 | 62.3 | 44.3 |
Europe | Operating Segments | ||||
Segment Reporting Information [Line Items] | ||||
Revenue, net | 69.9 | 64.3 | 134.2 | 119.9 |
Depreciation and amortization | 10.1 | 9.9 | 19.9 | 19.6 |
Operating income (loss) | (29.1) | (1.6) | (32.7) | (5) |
Additions to property, plant and equipment | $ 6.9 | $ 6.3 | $ 13.1 | $ 11.3 |
Segment Reporting - Revenues by
Segment Reporting - Revenues by Channel Reporting Segment (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jul. 02, 2022 | Jul. 03, 2021 | Jul. 02, 2022 | Jul. 03, 2021 | |
Segment Reporting Information [Line Items] | ||||
Total | $ 571.4 | $ 526.1 | $ 1,097.5 | $ 1,004.5 |
Water Direct/Water Exchange | ||||
Segment Reporting Information [Line Items] | ||||
Total | 386.5 | 323 | 723.8 | 610.6 |
Water Refill/Water Filtration | ||||
Segment Reporting Information [Line Items] | ||||
Total | 56.2 | 53.1 | 107.1 | 106.1 |
Other Water | ||||
Segment Reporting Information [Line Items] | ||||
Total | 44.1 | 64.6 | 94.5 | 120.9 |
Water Dispensers | ||||
Segment Reporting Information [Line Items] | ||||
Total | 18.5 | 17.6 | 32.7 | 32.6 |
Other | ||||
Segment Reporting Information [Line Items] | ||||
Total | 66.1 | 67.8 | 139.4 | 134.3 |
Other | ||||
Segment Reporting Information [Line Items] | ||||
Total | 64.8 | 65.4 | 129.5 | 123.3 |
Other | Water Direct/Water Exchange | ||||
Segment Reporting Information [Line Items] | ||||
Total | 11.7 | 10.4 | 22.5 | 18.9 |
Other | Water Refill/Water Filtration | ||||
Segment Reporting Information [Line Items] | ||||
Total | 0.7 | 0.2 | 1.2 | 0.2 |
Other | Other Water | ||||
Segment Reporting Information [Line Items] | ||||
Total | 21.5 | 22 | 37.5 | 37.2 |
Other | Water Dispensers | ||||
Segment Reporting Information [Line Items] | ||||
Total | 0 | 0 | 0 | 0 |
Other | Other | ||||
Segment Reporting Information [Line Items] | ||||
Total | 30.9 | 32.8 | 68.3 | 67 |
Eliminations | ||||
Segment Reporting Information [Line Items] | ||||
Total | 0 | (0.3) | 0 | (0.9) |
Eliminations | Water Direct/Water Exchange | ||||
Segment Reporting Information [Line Items] | ||||
Total | 0 | 0 | 0 | 0 |
Eliminations | Water Refill/Water Filtration | ||||
Segment Reporting Information [Line Items] | ||||
Total | 0 | 0 | 0 | 0 |
Eliminations | Other Water | ||||
Segment Reporting Information [Line Items] | ||||
Total | 0 | 0 | 0 | 0 |
Eliminations | Water Dispensers | ||||
Segment Reporting Information [Line Items] | ||||
Total | 0 | 0 | 0 | 0 |
Eliminations | Other | ||||
Segment Reporting Information [Line Items] | ||||
Total | 0 | (0.3) | 0 | (0.9) |
Eliminations | All Other Products to Europe | ||||
Segment Reporting Information [Line Items] | ||||
Total | 0.3 | 0.9 | ||
North America | Operating Segments | ||||
Segment Reporting Information [Line Items] | ||||
Total | 436.7 | 396.7 | 833.8 | 762.2 |
North America | Operating Segments | Water Direct/Water Exchange | ||||
Segment Reporting Information [Line Items] | ||||
Total | 321.1 | 264.9 | 599.4 | 503.7 |
North America | Operating Segments | Water Refill/Water Filtration | ||||
Segment Reporting Information [Line Items] | ||||
Total | 47.3 | 45.1 | 89.5 | 90.2 |
North America | Operating Segments | Other Water | ||||
Segment Reporting Information [Line Items] | ||||
Total | 22.2 | 42.2 | 56.2 | 83.1 |
North America | Operating Segments | Water Dispensers | ||||
Segment Reporting Information [Line Items] | ||||
Total | 18.5 | 17.6 | 32.7 | 32.6 |
North America | Operating Segments | Other | ||||
Segment Reporting Information [Line Items] | ||||
Total | 27.6 | 26.9 | 56 | 52.6 |
Europe | Operating Segments | ||||
Segment Reporting Information [Line Items] | ||||
Total | 69.9 | 64.3 | 134.2 | 119.9 |
Europe | Operating Segments | Water Direct/Water Exchange | ||||
Segment Reporting Information [Line Items] | ||||
Total | 53.7 | 47.7 | 101.9 | 88 |
Europe | Operating Segments | Water Refill/Water Filtration | ||||
Segment Reporting Information [Line Items] | ||||
Total | 8.2 | 7.8 | 16.4 | 15.7 |
Europe | Operating Segments | Other Water | ||||
Segment Reporting Information [Line Items] | ||||
Total | 0.4 | 0.4 | 0.8 | 0.6 |
Europe | Operating Segments | Water Dispensers | ||||
Segment Reporting Information [Line Items] | ||||
Total | 0 | 0 | 0 | 0 |
Europe | Operating Segments | Other | ||||
Segment Reporting Information [Line Items] | ||||
Total | $ 7.6 | $ 8.4 | $ 15.1 | $ 15.6 |
Inventories - Summary of Invent
Inventories - Summary of Inventories (Details) - USD ($) $ in Millions | Jul. 02, 2022 | Jan. 01, 2022 |
Inventory Disclosure [Abstract] | ||
Raw materials | $ 64.7 | $ 56.7 |
Finished goods | 31 | 27 |
Resale items | 11.9 | 9.1 |
Other | 2.1 | 1.8 |
Total | $ 109.7 | $ 94.6 |
Accumulated Other Comprehensi_3
Accumulated Other Comprehensive (Loss) Income - Changes by Component (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jul. 02, 2022 | Jul. 03, 2021 | Jul. 02, 2022 | Jul. 03, 2021 | |
AOCI Attributable to Parent | ||||
Beginning Balance | $ 1,304.5 | $ 1,336.7 | $ 1,320.1 | $ 1,346.9 |
OCI before reclassifications | 1.8 | 2 | 1.7 | 8.5 |
Amounts reclassified from AOCI | 0 | 0 | 0 | 0 |
Net current-period OCI | 1.8 | 2 | 1.7 | 8.5 |
Ending Balance | 1,276.8 | 1,326 | 1,276.8 | 1,326 |
Pension Benefit Plan Items | ||||
AOCI Attributable to Parent | ||||
Beginning Balance | (1.7) | (1.1) | (1.7) | (1.1) |
OCI before reclassifications | 0 | 0 | 0 | 0 |
Amounts reclassified from AOCI | 0 | 0 | 0 | 0 |
Net current-period OCI | 0 | 0 | 0 | 0 |
Ending Balance | (1.7) | (1.1) | (1.7) | (1.1) |
Currency Translation Adjustment Items | ||||
AOCI Attributable to Parent | ||||
Beginning Balance | (67.5) | (79.1) | (67.4) | (85.6) |
OCI before reclassifications | 1.8 | 2 | 1.7 | 8.5 |
Amounts reclassified from AOCI | 0 | 0 | 0 | 0 |
Net current-period OCI | 1.8 | 2 | 1.7 | 8.5 |
Ending Balance | (65.7) | (77.1) | (65.7) | (77.1) |
Total | ||||
AOCI Attributable to Parent | ||||
Beginning Balance | (69.2) | (80.2) | (69.1) | (86.7) |
Ending Balance | $ (67.4) | $ (78.2) | $ (67.4) | $ (78.2) |
Commitments and Contingencies -
Commitments and Contingencies - Additional Information (Details) $ in Millions | Jul. 02, 2022 USD ($) segment | Jan. 01, 2022 USD ($) |
Operating Leased Assets [Line Items] | ||
Number of third-party lessors | segment | 2 | |
Maximum potential amount of undiscounted future payments under the guarantee | $ 15 | |
ABL facility | ||
Operating Leased Assets [Line Items] | ||
Standby letters of credit outstanding | $ 58.6 | $ 59.4 |
Fair Value Measurements - Carry
Fair Value Measurements - Carrying Value and Estimated Fair Values of Outstanding Debt (Details) - USD ($) $ in Millions | Jul. 02, 2022 | Jan. 01, 2022 |
Estimate of Fair Value, Fair Value Disclosure | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair Value | $ 982.8 | $ 1,252 |
Senior Notes | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Carrying Value | 1,205 | 1,242.7 |
3.875% senior notes due in 2028 | Estimate of Fair Value, Fair Value Disclosure | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair Value | $ 376.4 | 516.2 |
3.875% senior notes due in 2028 | Senior Notes | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Interest rate on notes | 3.875% | |
Carrying Value | $ 464.3 | 502.7 |
4.375% senior notes due in 2029 | Estimate of Fair Value, Fair Value Disclosure | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair Value | $ 606.4 | 735.8 |
4.375% senior notes due in 2029 | Senior Notes | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Interest rate on notes | 4.375% | |
Carrying Value | $ 740.7 | $ 740 |
Subsequent Events - Additional
Subsequent Events - Additional Information (Details) | 3 Months Ended | 6 Months Ended | ||||||
Aug. 09, 2022 USD ($) $ / shares | Jul. 21, 2022 USD ($) property | May 10, 2021 | Jul. 02, 2022 $ / shares | Jul. 03, 2021 $ / shares | Jul. 02, 2022 $ / shares | Jul. 03, 2021 $ / shares | May 04, 2021 USD ($) | |
Subsequent Event [Line Items] | ||||||||
Dividends declared per share (in USD per share) | $ / shares | $ 0.07 | $ 0.06 | $ 0.14 | $ 0.12 | ||||
Repurchase Plan | ||||||||
Subsequent Event [Line Items] | ||||||||
Share repurchase program, authorized amount (up to) | $ 50,000,000 | |||||||
Share repurchase program, period in force | 12 months | |||||||
Subsequent Event | ||||||||
Subsequent Event [Line Items] | ||||||||
Dividends declared per share (in USD per share) | $ / shares | $ 0.07 | |||||||
Number of properties, agreed to sell | property | 1 | |||||||
Aggregate estimated consideration, potential sale of property | $ 54,000,000 | |||||||
Subsequent Event | Repurchase Plan | ||||||||
Subsequent Event [Line Items] | ||||||||
Share repurchase program, authorized amount (up to) | $ 100,000,000 | |||||||
Share repurchase program, period in force | 12 years |