þ | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
o | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
Delaware
|
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30-0278688
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(State of incorporation)
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|
(I.R.S. Employer Identification No.)
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Large accelerated filer
o
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Accelerated filer
o
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Non-accelerated filer
o
(Do not check if smaller reporting company)
|
Smaller reporting company
þ
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Page number
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PART 1. Financial Information
|
|
|
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Item 1.
Financial Statements (Unaudited)
|
3
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|
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3
|
|
|
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4
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|
|
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5
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|
|
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6
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7
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16
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|
|
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24
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|
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Item 4.
Controls and Procedures
|
25
|
|
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PART II. Other Information
|
|
|
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Item 1.
Legal Proceedings
|
26
|
|
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Item 1A.
Risk Factors
|
27
|
|
|
27
|
|
|
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Item 3.
Defaults Upon Senior Securities
|
27
|
|
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Item 4.
Mine Safety Disclosures
|
27
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|
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Item 5.
Other Information
|
27
|
|
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Item 6.
Exhibits
|
28
|
|
|
29
|
|
June 30,
|
December 31,
|
||||||
|
2013
|
2012
|
||||||
|
(unaudited)
|
|
||||||
ASSETS
|
|
|
||||||
Current assets:
|
|
|
||||||
Cash
|
$
|
221
|
$
|
234
|
||||
Accounts receivable, net
|
9,520
|
9,894
|
||||||
Inventories
|
6,653
|
7,572
|
||||||
Prepaid expenses and other current assets
|
1,269
|
812
|
||||||
Current assets of disposal group held for sale
|
1,116
|
3,041
|
||||||
Total current assets
|
18,779
|
21,553
|
||||||
|
||||||||
Bottles, net
|
3,970
|
3,838
|
||||||
Property and equipment, net
|
39,920
|
41,947
|
||||||
Intangible assets, net
|
11,618
|
12,477
|
||||||
Other assets
|
2,620
|
1,960
|
||||||
Total assets
|
$
|
76,907
|
$
|
81,775
|
||||
|
||||||||
LIABILITIES AND STOCKHOLDERS' EQUITY
|
||||||||
Current liabilities:
|
||||||||
Accounts payable
|
$
|
14,417
|
$
|
11,455
|
||||
Accrued expenses and other current liabilities
|
3,400
|
4,305
|
||||||
Current portion of capital leases and notes payable
|
16
|
15
|
||||||
Current liabilities of disposal group held for sale
|
727
|
2,784
|
||||||
Total current liabilities
|
18,560
|
18,559
|
||||||
|
||||||||
Long-term debt, capital leases and notes payable, net of current portion
|
18,979
|
21,251
|
||||||
Other long-term liabilities
|
317
|
352
|
||||||
Liabilities of disposal group held for sale, net of current portion
|
2,000
|
–
|
||||||
Total liabilities
|
39,856
|
40,162
|
||||||
|
||||||||
Commitments and contingencies
|
||||||||
|
||||||||
Stockholders' equity:
|
||||||||
Preferred stock, $0.001 par value - 10,000 shares authorized,
none issued and outstanding
|
–
|
–
|
||||||
Common stock, $0.001 par value - 70,000 shares authorized,
23,981 and 23,772 shares issued and outstanding at June 30, 2013 and December 31, 2012, respectively
|
24
|
24
|
||||||
Additional paid-in capital
|
272,946
|
272,336
|
||||||
Common stock warrants
|
8,420
|
8,420
|
||||||
Accumulated deficit
|
(243,997
|
)
|
(239,131
|
)
|
||||
Accumulated other comprehensive loss
|
(342
|
)
|
(36
|
)
|
||||
Total stockholders' equity
|
37,051
|
41,613
|
||||||
Total liabilities and stockholders' equity
|
$
|
76,907
|
$
|
81,775
|
|
Three months ended June 30,
|
Six months ended June 30,
|
||||||||||||||
|
2013
|
2012
|
2013
|
2012
|
||||||||||||
|
|
|
|
|
||||||||||||
Net sales
|
$
|
23,849
|
$
|
24,635
|
$
|
46,177
|
$
|
44,436
|
||||||||
Operating costs and expenses:
|
||||||||||||||||
Cost of sales
|
17,948
|
19,684
|
34,988
|
34,213
|
||||||||||||
Selling, general and administrative expenses
|
4,013
|
4,320
|
7,849
|
8,874
|
||||||||||||
Non-recurring and acquisition-related costs
|
81
|
369
|
94
|
395
|
||||||||||||
Depreciation and amortization
|
2,765
|
2,636
|
5,529
|
5,031
|
||||||||||||
Goodwill impairment
|
–
|
11,488
|
–
|
11,488
|
||||||||||||
Total operating costs and expenses
|
24,807
|
38,497
|
48,460
|
60,001
|
||||||||||||
Loss from operations
|
(958
|
)
|
(13,862
|
)
|
(2,283
|
)
|
(15,565
|
)
|
||||||||
Interest expense and other, net
|
1,178
|
1,273
|
2,222
|
2,177
|
||||||||||||
Loss from continuing operations before income taxes
|
(2,136
|
)
|
(15,135
|
)
|
(4,505
|
)
|
(17,742
|
)
|
||||||||
Income tax benefit
|
–
|
(1,487
|
)
|
–
|
(959
|
)
|
||||||||||
Loss from continuing operations
|
(2,136
|
)
|
(13,648
|
)
|
(4,505
|
)
|
(16,783
|
)
|
||||||||
Loss from discontinued operations
|
(136
|
)
|
(12,657
|
)
|
(360
|
)
|
(13,387
|
)
|
||||||||
Net loss
|
$
|
(2,272
|
)
|
$
|
(26,305
|
)
|
$
|
(4,865
|
)
|
$
|
(30,170
|
)
|
||||
|
||||||||||||||||
Basic and diluted loss per common share:
|
||||||||||||||||
Loss from continuing operations
|
$
|
(0.09
|
)
|
$
|
(0.58
|
)
|
$
|
(0.19
|
)
|
$
|
(0.71
|
)
|
||||
Loss from discontinued operations
|
(0.01
|
)
|
(0.53
|
)
|
(0.01
|
)
|
(0.56
|
)
|
||||||||
Net loss
|
$
|
(0.10
|
)
|
$
|
(1.11
|
)
|
$
|
(0.20
|
)
|
$
|
(1.27
|
)
|
||||
|
||||||||||||||||
Basic and diluted weighted average common shares outstanding
|
23,891
|
23,720
|
23,840
|
23,697
|
|
Three months ended
|
Six months ended
|
||||||||||||||
|
June 30,
|
June 30,
|
||||||||||||||
|
2013
|
2012
|
2013
|
2012
|
||||||||||||
|
|
|
|
|
||||||||||||
Net loss
|
$
|
(2,272
|
)
|
$
|
(26,305
|
)
|
$
|
(4,865
|
)
|
$
|
(30,170
|
)
|
||||
Other comprehensive loss:
|
||||||||||||||||
Foreign currency translation adjustments, net
|
(183
|
)
|
(557
|
)
|
(306
|
)
|
(93
|
)
|
||||||||
Comprehensive loss
|
$
|
(2,455
|
)
|
$
|
(26,862
|
)
|
$
|
(5,171
|
)
|
$
|
(30,263
|
)
|
|
Six months ended June 30,
|
|||||||
|
2013
|
2012
|
||||||
Cash flows from operating activities:
|
|
|
||||||
Net loss
|
$
|
(4,865
|
)
|
$
|
(30,170
|
)
|
||
Less: Loss from discontinued operations
|
(360
|
)
|
(13,387
|
)
|
||||
Loss from continuing operations
|
(4,505
|
)
|
(16,783
|
)
|
||||
Adjustments to reconcile net loss to net cash provided by operating activities:
|
||||||||
Depreciation and amortization
|
5,529
|
5,031
|
||||||
Stock-based compensation expense
|
623
|
787
|
||||||
Non-cash interest expense
|
610
|
1,435
|
||||||
Deferred income tax expense
|
–
|
(959
|
)
|
|||||
Bad debt expense
|
(54
|
)
|
(103
|
)
|
||||
Goodwill impairment
|
–
|
11,488
|
||||||
Other
|
129
|
(46
|
)
|
|||||
Changes in operating assets and liabilities:
|
||||||||
Accounts receivable
|
343
|
(1,639
|
)
|
|||||
Inventories
|
909
|
393
|
||||||
Prepaid expenses and other assets
|
(39
|
)
|
(1,514
|
)
|
||||
Accounts payable
|
3,077
|
3,575
|
||||||
Accrued expenses and other liabilities
|
(877
|
)
|
(360
|
)
|
||||
Net cash provided by operating activities
|
5,745
|
1,305
|
||||||
|
||||||||
Cash flows from investing activities:
|
||||||||
Purchases of property and equipment
|
(1,930
|
)
|
(1,849
|
)
|
||||
Purchases of bottles, net of disposals
|
(1,327
|
)
|
(59
|
)
|
||||
Proceeds from the sale of property and equipment
|
2
|
17
|
||||||
Additions to and acquisitions of intangible assets
|
(38
|
)
|
(507
|
)
|
||||
Net cash used in investing activities
|
(3,293
|
)
|
(2,398
|
)
|
||||
|
||||||||
Cash flows from financing activities:
|
||||||||
Borrowings under revolving credit facilities
|
42,368
|
10,148
|
||||||
Payments under revolving credit facilities
|
(47,493
|
)
|
(19,978
|
)
|
||||
Borrowings under Comvest Term loans
|
3,000
|
15,150
|
||||||
Note payable and capital lease payments
|
(8
|
)
|
(7
|
)
|
||||
Debt issuance costs
|
(546
|
)
|
(2,036
|
)
|
||||
Proceeds from sale of common stock, net of issuance costs
|
–
|
(180
|
)
|
|||||
Stock option and employee stock purchase activity, net
|
16
|
15
|
||||||
Net cash (used in) provided by financing activities
|
(2,663
|
)
|
3,112
|
|||||
|
||||||||
Net (decrease) increase in cash
|
(211
|
)
|
2,019
|
|||||
Cash, beginning of year
|
234
|
751
|
||||||
Effect of exchange rate changes on cash
|
(35
|
)
|
(12
|
)
|
||||
Cash provided by (used in) discontinued operations from:
|
||||||||
Operating activities
|
233
|
(1,614
|
)
|
|||||
Investing activities
|
–
|
(261
|
)
|
|||||
Cash provided by (used in) discontinued operations
|
233
|
(1,875
|
)
|
|||||
Cash, end of period
|
$
|
221
|
$
|
883
|
1. | Description of Business and Significant Accounting Policies |
2. | Discontinued Operations |
|
June 30, 2013
|
December 31, 2012
|
||||||
Current assets of disposal group held for sale
|
|
|||||||
Accounts receivable, net
|
$
|
32
|
$
|
–
|
||||
Inventories
|
1,084
|
2,794
|
||||||
Prepaid expenses and other current assets
|
–
|
247
|
||||||
|
$
|
1,116
|
$
|
3,041
|
||||
|
||||||||
Current liabilities of disposal group held for sale
|
||||||||
Accounts payable
|
23
|
146
|
||||||
Deferred income
|
431
|
–
|
||||||
Accrued expenses and other current liabilities
|
273
|
2,638
|
||||||
|
$
|
727
|
$
|
2,784
|
||||
|
||||||||
Liabilities of disposal group held for sale, net of current portion
|
||||||||
Other long-term liabilities
|
2,000
|
–
|
||||||
|
$
|
2,000
|
$
|
–
|
|
Three months ended June 30,
|
Six months ended June 30,
|
||||||||||||||
|
2013
|
2012
|
2013
|
2012
|
||||||||||||
|
|
|
|
|
||||||||||||
Net sales
|
$
|
155
|
$
|
326
|
$
|
2,004
|
$
|
307
|
||||||||
Operating costs and expenses:
|
||||||||||||||||
Cost of sales
|
180
|
911
|
2,144
|
1,033
|
||||||||||||
Selling, general and administrative
|
111
|
357
|
220
|
774
|
||||||||||||
Other operating income
|
–
|
(2,000
|
)
|
–
|
(2,000
|
)
|
||||||||||
Depreciation and amortization
|
–
|
270
|
–
|
442
|
||||||||||||
Goodwill and developed technology impairment
|
–
|
13,445
|
–
|
13,445
|
||||||||||||
Total operating costs and expenses
|
291
|
12,983
|
2,364
|
13,694
|
||||||||||||
Loss from discontinued operations
|
$
|
(136
|
)
|
$
|
(12,657
|
)
|
$
|
(360
|
)
|
$
|
(13,387
|
)
|
3. | Debt, Capital Leases and Notes Payable |
|
June 30,
|
December 31,
|
||||||
|
2013
|
2012
|
||||||
|
|
|
||||||
Senior revolving credit facility
|
$
|
1,952
|
$
|
7,077
|
||||
Comvest Term loans, net of discount
|
17,006
|
14,145
|
||||||
Notes payable and capital leases
|
37
|
44
|
||||||
|
18,995
|
21,266
|
||||||
Less current portion
|
(16
|
)
|
(15
|
)
|
||||
Long-term debt, notes payable and capital leases, net of current portion
|
$
|
18,979
|
$
|
21,251
|
4. | Stock-Based Compensation |
5. | Commitments and Contingencies |
6. | Income Taxes |
7. | Fair Value Measurements |
• | Level 1 — quoted prices in active markets for identical assets and liabilities. |
• | Level 2 — observable inputs other than quoted prices in active markets for identical assets and liabilities. |
• | Level 3 — unobservable inputs in which there is little or no market data available, which require the reporting entity to develop its own assumptions. |
8. | Segments |
|
Three months ended June 30,
|
Six months ended June 30,
|
||||||||||||||
|
2013
|
2012
|
2013
|
2012
|
||||||||||||
Segment net sales
|
|
|
|
|
||||||||||||
Water
|
$
|
16,232
|
$
|
15,386
|
$
|
31,142
|
$
|
30,360
|
||||||||
Dispensers
|
7,617
|
9,249
|
15,035
|
14,076
|
||||||||||||
|
$
|
23,849
|
$
|
24,635
|
$
|
46,177
|
$
|
44,436
|
||||||||
|
||||||||||||||||
Segment income (loss) from operations
|
||||||||||||||||
Water
|
$
|
4,620
|
$
|
3,778
|
$
|
8,573
|
$
|
7,778
|
||||||||
Dispensers
|
90
|
(299
|
)
|
254
|
(781
|
)
|
||||||||||
Corporate
|
(2,822
|
)
|
(2,848
|
)
|
(5,487
|
)
|
(5,648
|
)
|
||||||||
Non-recurring and acquisition-related costs
|
(81
|
)
|
(369
|
)
|
(94
|
)
|
(395
|
)
|
||||||||
Depreciation and amortization
|
(2,765
|
)
|
(2,636
|
)
|
(5,529
|
)
|
(5,031
|
)
|
||||||||
Goodwill impairment
|
–
|
(11,488
|
)
|
–
|
(11,488
|
)
|
||||||||||
|
$
|
(958
|
)
|
$
|
(13,862
|
)
|
$
|
(2,283
|
)
|
$
|
(15,565
|
)
|
||||
|
||||||||||||||||
Depreciation and amortization expense:
|
||||||||||||||||
Water
|
$
|
2,440
|
$
|
2,248
|
$
|
4,868
|
$
|
4,393
|
||||||||
Dispensers
|
146
|
212
|
297
|
319
|
||||||||||||
Corporate
|
179
|
176
|
364
|
319
|
||||||||||||
|
$
|
2,765
|
$
|
2,636
|
$
|
5,529
|
$
|
5,031
|
||||||||
|
||||||||||||||||
Capital expenditures:
|
||||||||||||||||
Water
|
$
|
3,086
|
$
|
1,380
|
||||||||||||
Dispensers
|
62
|
516
|
||||||||||||||
Corporate
|
109
|
12
|
||||||||||||||
|
$
|
3,257
|
$
|
1,908
|
|
At June 30,
|
At December 31,
|
||||||
Identifiable assets:
|
2013
|
2012
|
||||||
Water
|
$
|
62,225
|
$
|
65,483
|
||||
Dispensers
|
9,090
|
9,490
|
||||||
Corporate
|
4,476
|
3,761
|
||||||
Assets of disposal group held for sale
|
1,116
|
3,041
|
||||||
|
$
|
76,907
|
$
|
81,775
|
|
Three months ended June 30,
|
Six months ended June 30,
|
||||||||||||||
|
2013
|
2012
|
2013
|
2012
|
||||||||||||
Consolidated statements of operations data:
|
|
|
|
|
||||||||||||
Net sales
|
$
|
23,849
|
$
|
24,635
|
$
|
46,177
|
$
|
44,436
|
||||||||
Operating costs and expenses:
|
||||||||||||||||
Cost of sales
|
17,948
|
19,684
|
34,988
|
34,213
|
||||||||||||
Selling, general and administrative expenses
|
4,013
|
4,320
|
7,849
|
8,874
|
||||||||||||
Non-recurring and acquisition-related costs
|
81
|
369
|
94
|
395
|
||||||||||||
Depreciation and amortization
|
2,765
|
2,636
|
5,529
|
5,031
|
||||||||||||
Goodwill impairment
|
–
|
11,488
|
–
|
11,488
|
||||||||||||
Total operating costs and expenses
|
24,807
|
38,497
|
48,460
|
60,001
|
||||||||||||
Loss from operations
|
(958
|
)
|
(13,862
|
)
|
(2,283
|
)
|
(15,565
|
)
|
||||||||
Interest expense and other, net
|
1,178
|
1,273
|
2,222
|
2,177
|
||||||||||||
Loss from continuing operations before income taxes
|
(2,136
|
)
|
(15,135
|
)
|
(4,505
|
)
|
(17,742
|
)
|
||||||||
Income tax benefit
|
–
|
(1,487
|
)
|
–
|
(959
|
)
|
||||||||||
Loss from continuing operations
|
(2,136
|
)
|
(13,648
|
)
|
(4,505
|
)
|
(16,783
|
)
|
||||||||
Loss from discontinued operations
|
(136
|
)
|
(12,657
|
)
|
(360
|
)
|
(13,387
|
)
|
||||||||
Net loss
|
$
|
(2,272
|
)
|
$
|
(26,305
|
)
|
$
|
(4,865
|
)
|
$
|
(30,170
|
)
|
|
Three months ended June 30,
|
Six months ended June 30,
|
||||||||||||||
|
2013
|
2012
|
2013
|
2012
|
||||||||||||
Consolidated statements of operations data:
|
|
|
|
|
||||||||||||
Net sales
|
100.0
|
%
|
100.0
|
%
|
100.0
|
%
|
100.0
|
%
|
||||||||
Operating costs and expenses:
|
||||||||||||||||
Cost of sales
|
75.3
|
79.9
|
75.8
|
77.0
|
||||||||||||
Selling, general and administrative expenses
|
16.8
|
17.5
|
17.0
|
20.0
|
||||||||||||
Non-recurring and acquisition-related costs
|
0.3
|
1.5
|
0.2
|
0.9
|
||||||||||||
Depreciation and amortization
|
11.6
|
10.7
|
11.9
|
11.3
|
||||||||||||
Goodwill and other impairment
|
–
|
46.7
|
–
|
25.8
|
||||||||||||
Total operating costs and expenses
|
104.0
|
156.3
|
104.9
|
135.0
|
||||||||||||
Loss from operations
|
(4.0
|
)
|
(56.3
|
)
|
(4.9
|
)
|
(35.0
|
)
|
||||||||
Interest expense and other, net
|
5.0
|
5.1
|
4.9
|
4.9
|
||||||||||||
Loss from continuing operations before income taxes
|
(9.0
|
)
|
(61.4
|
)
|
(9.8
|
)
|
(39.9
|
)
|
||||||||
Income tax provision
|
–
|
(6.0
|
)
|
–
|
(2.1
|
)
|
||||||||||
Loss from continuing operations
|
(9.0
|
)
|
(55.4
|
)
|
(9.8
|
)
|
(37.8
|
)
|
||||||||
Loss from discontinued operations
|
(0.5
|
)
|
(51.4
|
)
|
(0.7
|
)
|
(30.1
|
)
|
||||||||
Net loss
|
(9.5
|
)
|
(106.8
|
)
|
(10.5
|
)
|
(67.9
|
)
|
|
Three months ended June 30,
|
Six months ended June 30,
|
||||||||||||||
|
2013
|
2012
|
2013
|
2012
|
||||||||||||
Segment net sales
|
|
|
|
|
||||||||||||
Water
|
$
|
16,232
|
$
|
15,386
|
$
|
31,142
|
$
|
30,360
|
||||||||
Dispensers
|
7,617
|
9,249
|
15,035
|
14,076
|
||||||||||||
Total net sales
|
$
|
23,849
|
$
|
24,635
|
$
|
46,177
|
$
|
44,436
|
||||||||
|
||||||||||||||||
Segment income (loss) from operations
|
||||||||||||||||
Water
|
$
|
4,620
|
$
|
3,778
|
$
|
8,573
|
$
|
7,778
|
||||||||
Dispensers
|
90
|
(299
|
)
|
254
|
(781
|
)
|
||||||||||
Corporate
|
(2,822
|
)
|
(2,848
|
)
|
(5,487
|
)
|
(5,648
|
)
|
||||||||
Non-recurring and acquisition-related costs
|
(81
|
)
|
(369
|
)
|
(94
|
)
|
(395
|
)
|
||||||||
Depreciation and amortization
|
(2,765
|
)
|
(2,636
|
)
|
(5,529
|
)
|
(5,031
|
)
|
||||||||
Goodwill impairment
|
–
|
(11,488
|
)
|
–
|
(11,488
|
)
|
||||||||||
Loss from operations
|
$
|
(958
|
)
|
$
|
(13,862
|
)
|
$
|
(2,283
|
)
|
$
|
(15,565
|
)
|
|
Six months ended June 30,
|
|||||||
|
2013
|
2012
|
||||||
Net cash provided by operating activities
|
$
|
5.7
|
$
|
1.3
|
||||
Net cash used in investing activities
|
$
|
(3.3
|
)
|
$
|
(2.4
|
)
|
||
Net cash (used in) provided by financing activities
|
$
|
(2.7
|
)
|
$
|
3.1
|
|
Three months ended
|
Six months ended
|
||||||||||||||
|
June 30,
|
June 30,
|
||||||||||||||
|
2013
|
2012
|
2013
|
2012
|
||||||||||||
Loss from continuing operations
|
$
|
(2,136
|
)
|
$
|
(13,648
|
)
|
$
|
(4,505
|
)
|
$
|
(16,783
|
)
|
||||
Depreciation and amortization
|
2,765
|
2,636
|
5,529
|
5,031
|
||||||||||||
Interest expense and other, net
|
1,178
|
1,273
|
2,222
|
2,177
|
||||||||||||
Income tax benefit
|
–
|
(1,487
|
)
|
–
|
(959
|
)
|
||||||||||
EBITDA
|
1,807
|
(11,226
|
)
|
3,246
|
(10,534
|
)
|
||||||||||
Goodwill impairment
|
–
|
11,488
|
–
|
11,488
|
||||||||||||
Non-cash, stock-based compensation expense
|
298
|
376
|
623
|
787
|
||||||||||||
Non-recurring and acquisition-related costs
|
81
|
369
|
94
|
395
|
||||||||||||
Loss on disposal of assets and other
|
122
|
291
|
238
|
360
|
||||||||||||
Adjusted EBITDA
|
$
|
2,308
|
$
|
1,298
|
$
|
4,201
|
$
|
2,496
|
Period
|
Total Number of Shares and Units Purchased
(1)
|
Average
Price Paid
Per Share and Unit
($)
|
Total Number of Shares Purchased as Part of a Publicly Announced Program
|
Approximate Dollar Value of Shares that May Yet be Purchased under
the Program
|
||||||||||||
April 1, 2013 through April 30, 2013
|
–
|
$
|
–
|
–
|
–
|
|||||||||||
May 1, 2013 through May 31, 2013
|
1,346
|
$
|
1.53
|
–
|
–
|
|||||||||||
June 1, 2013 through June 30, 2013
|
–
|
$
|
–
|
–
|
–
|
|||||||||||
Total shares purchased for the three months ended June 30, 2013
|
1,346
|
(1) | Represents shares of common stock withheld for income tax purposes in connection with the vesting of shares of restricted stock and restricted stock units issued to certain employees. |
Exhibit
Number
|
Description
|
|
|
|
|
3.1
|
Sixth Amended and Restated Certificate of Incorporation of Primo Water Corporation (incorporated by reference to Exhibit 3.1 to Amendment No. 2 to the Registrant's Registration Statement on Form S-1/A (File No. 333-173554) filed on May 31, 2011)
|
|
3.2
|
Amended and Restated Bylaws of Primo Water Corporation (incorporated by reference to Exhibit 3.1 to the Company's Form 8-K filed November 16, 2010)
|
|
10.1
|
Primo Water Corporation Value Creation Plan
(incorporated by reference to Exhibit 10.1 to the Company's Form 8-K filed June 14, 2013)
|
|
Primo Water Corporation 2013 Annual Incentive Plan (filed herewith)
|
||
10.3
|
Employment Agreement, dated June 10, 2013, by and between Primo Water Corporation and Matthew T. Sheehan
(incorporated by reference to Exhibit 10.2 to the Company's Form 8-K filed June 14, 2013)
|
|
10.4
|
Amended and Restated Employment Agreement, dated June 10, 2013, by and between Primo Water Corporation and Billy D. Prim
(incorporated by reference to Exhibit 10.3 to the Company's Form 8-K filed June 14, 2013)
|
|
10.5
|
Amended and Restated Employment Agreement, dated June 10, 2013, by and between Primo Water Corporation and Mark Castaneda
(incorporated by reference to Exhibit 10.4 to the Company's Form 8-K filed June 14, 2013)
|
|
10.6
|
Second Amendment to Credit and Security Agreement dated as of June 14, 2013 by and among the Company, certain subsidiaries of the Company party thereto and Comvest Capital II, L.P. (incorporated by reference to Exhibit 10.1 to the Company's Form 8-K filed June 19, 2013)
|
|
10.7
|
Add-On Term Note dated as of June 14, 2013 by and among the Company, certain subsidiaries of the Company party thereto and Comvest Capital II, L.P. (incorporated by reference to Exhibit 10.2 to the Company's Form 8-K filed June 19, 2013)
|
|
10.8
|
Amended and Restated Closing Date Term Note dated as of June 14, 2013 by and among the Company, certain subsidiaries of the Company party thereto and Comvest Capital II, L.P. (incorporated by reference to Exhibit 10.3 to the Company's Form 8-K filed June 19, 2013)
|
|
Certification of Periodic Report by Chief Executive Officer pursuant to Rule 13a-14(a)/15d-14a and pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (filed herewith)
|
||
Certification of Periodic Report by Chief Financial Officer pursuant to Rule 13a-14(a)/15d-14a and pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (filed herewith)
|
||
Certification of Periodic Report by Chief Executive Officer and Chief Financial Officer pursuant to U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (filed herewith)
|
||
101.INS**
|
XBRL Instance Document
(1, 2)
|
|
101.SCH**
|
XBRL Taxonomy Extension Schema Document
(1, 2)
|
|
101.CAL**
|
XBRL Taxonomy Extension Calculation Linkbase Document
(1, 2)
|
|
101.DEF**
|
XBRL Taxonomy Extension Definition Linkbase Document
(1, 2)
|
|
101.LAB**
|
XBRL Taxonomy Extension Label Linkbase Document
(1, 2)
|
|
101.PRE**
|
XBRL Taxonomy Extension Presentation Linkbase Document
(1, 2)
|
|
PRIMO WATER CORPORATION
|
|
|
(Registrant)
|
|
|
|
|
Date: August 14, 2013
|
By:
|
/s/ Billy D. Prim
|
|
|
Billy D. Prim
|
|
|
Chairman and Chief Executive Officer
|
|
|
|
Date: August 14, 2013
|
By:
|
/s/ Mark Castaneda
|
|
|
Mark Castaneda
|
|
|
Chief Financial Officer
|
· | Award issuance to employees selected to participate in the Plan is based on Company, team and employee specific performance. The amount and form of a participant's award, if any, and the performance conditions applicable to the award will be recommended by the CEO and finally determined and approved by Compensation Committee in its sole discretion. |
· | Company performance is based on the Company's achievement of $13,550,000 in Adjusted EBITDA in 2013 ("Target Adjusted EBITDA"). |
· | The size of the Annual Bonus Pool available to eligible participants shall be based on the percentage of the Company's achievement of the Target Adjusted EBITDA: |
Percentage of
Target Adjusted
EBITDA
achieved:
|
Percent of
Annual
Bonus
Pool
Available
|
Size of Annual Bonus Pool
|
|||
80%
|
50%
|
$
|
500,000
|
||
85%
|
60%
|
$
|
600,000
|
||
90%
|
70%
|
$
|
700,000
|
||
95%
|
80%
|
$
|
800,000
|
||
100%
|
100%
|
$
|
1,000,000
|
||
105%
|
120%
|
$
|
1,200,000
|
||
110%
|
150%
|
$
|
1,500,000
|
||
115%
|
200%
|
$
|
2,000,000
|
||
120%
|
250%
|
$
|
2,500,000
|
· | The Compensation Committee may increase or decrease the Annual Bonus Pool in its sole discretion. |
· | Awards under the Plan may be made in cash, restricted stock/restricted stock units and/or options, or any combination thereof, in the sole discretion of the Compensation Committee. Any awards paid in restricted stock/restricted stock units and/or options ("equity awards") will be granted pursuant to the Company's 2010 Omnibus Long-Term Incentive Plan (the "Omnibus Plan"), and may be subject to other terms and conditions, as described below. |
· | Awards will be calculated after year-end financial results are known, generally after completion of the audited financial statements. Adjusted EBITDA shall have the same meaning as set forth in the Company's then current credit agreement. |
· | All awards are dependent on the Company being in compliance (including via waiver) with all applicable loan agreements, as such may be amended. |
· | The Compensation Committee shall review and approve equity awards at its first meeting following the calculation of the award. |
· | Equity awards shall be subject to the terms of the Omnibus Plan and the terms of an award agreement between the Company and the participant. |
· | Equity awards may be subject to additional conditions or vesting requirements, including continued periods of service beyond the performance period, in the sole discretion of the Compensation Committee. It is anticipated that equity awards would vest over three (3) years. |
· | All equity awards made under this Plan shall be valued for such purpose at the closing price on the trading day prior to the award date. Options will be valued using a Black-Scholes model, consistent with the Company's accounting practices. |
· | A participant who leaves the Company voluntarily, is dismissed for Cause (as defined in the Omnibus Plan), or is otherwise terminated by the Company at any time prior to payment shall forfeit all rights to his/her current-year award. |
|
· | A participant who separates employment because of death, Disability, retirement in good standing or Change in Control (Disability and Change in Control have the same meanings as set forth in the Omnibus Plan) shall remain eligible for a current-year award, at the sole discretion of the Compensation Committee. In the event of a participant's termination in connection with a Change in Control or retirement from the Company in good standing prior to the end of a fiscal year, the Compensation Committee shall have discretion to award the participant a full or pro-rata share of his or her current-year award. In the case of a participant's death, any payments shall be made to the participant's estate. |
· | Upon any separation as described above, any and all awards for the current year shall be at the sole discretion of the Compensation Committee |
· | Treatment upon separation of employment of any equity awards granted as a result of participation in the Plan shall be subject to the terms of the Omnibus Plan and the applicable award agreement. |
· | All full-time exempt employees of the Company shall be eligible to be selected by the Compensation Committee to participate in the Plan. |
· | The Compensation Committee may make a determination with respect to an employee's eligibility or ineligibility to participate in the Plan at any time without prior notice. |
· | Nothing contained in this Plan shall give any employee the right to be retained in the employment of the Company or effect the right of the Company to relocate, change positions, or dismiss any employee. |
· | The Compensation Committee reserves the right, in its sole discretion, to make adjustments to the Plan or to individual awards when it believes the integrity, purpose and fairness of the Plan would be better served. Any decisions of the Compensation Committee shall be conclusive and binding on all parties. |
· | It is intended that the Plan be ongoing, however, it may be necessary for the Board to amend or terminate the Plan at any time without prior notification. |
· | This Plan will be in effect for the 2013 calendar year. |
· | To the extent applicable, this Plan shall be interpreted in accordance with Section 409A of the Internal Revenue Code of 1986, as amended ("Section 409A"). Notwithstanding any provision of this Plan to the contrary, in the event that the Company determines in good faith that any compensation or benefits payable under this Plan may not be either exempt from or compliant with Section 409A, the Company shall adopt such amendments to this Plan or adopt other policies or procedures (including amendments, policies and procedures with retroactive effect), or take any other commercially reasonable actions necessary or appropriate (i) to preserve the intended tax treatment of the compensation and benefits payable hereunder, to preserve the economic benefits of such compensation and benefits, and/or to avoid less favorable accounting or tax consequences for the Company and/or (ii) to exempt the compensation and benefits payable hereunder from Section 409A or to comply with the requirements of Section 409A and thereby avoid the application of penalty taxes thereunder; provided , however , that this provision does not, and shall not be construed so as to, create any obligation on the part of the Company to adopt any such amendments, policies or procedures or to take any other such actions or to indemnify any participant for any failure to do so. |
· | The Company shall have the authority, duty, and power to withhold from any award under this Plan the amount of any applicable federal, state, and local tax required to be withheld by the Company pursuant to any applicable laws or regulations. |
Signature:
|
/s/ Billy D. Prim
|
1.
|
I have reviewed this Quarterly Report on Form 10-Q of Primo Water Corporation
;
|
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
c) | Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
d) | Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and |
5. | The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions): |
a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and |
b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. |
/s/ Billy D. Prim
|
|
Billy D. Prim
|
|
Chairman and Chief Executive Officer
|
|
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
c) | Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
d) | Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and |
5. | The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions): |
a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and |
b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. |
/s/ Mark Castaneda
|
|
Mark Castaneda
|
|
Chief Financial Officer
|
|
(1) | The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and |
(2) | The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
/s/ Billy D. Prim
|
|
/s/ Mark Castaneda
|
Billy D. Prim
|
|
Mark Castaneda
|
Chairman and Chief Executive Officer
|
|
Chief Financial Officer
|
August 14, 2013
|
|
August 14, 2013
|