Primo Water Corporation provides multi-gallon purified bottled water, self-serve filtered drinking water, and water dispensers through major retailers in the United States and Canada. Each of its multi-gallon water bottles can be sanitized and reused up to 40 times before being taken out of use, crushed and recycled, substantially reducing landfill waste compared to consumption of equivalent volumes of single-serve bottled water. As of December 31, 2013, its products and services were offered in each of the contiguous United States and in Canada at approximately 22,900 combined retail locations, including Lowe’s Home Improvement, Walmart, Kmart, Meijer, Kroger, Food Lion, H-E-B Grocery, Sobeys and Walgreens. The company provides major retailers throughout the United States and Canada with single-vendor solutions for Exchange and Refill services. Its Exchange solution offers retailers financial margins and the ability to optimize typically unused retail space with its displays. The company’s Refill solution provides filtered water through the installation and servicing of reverse osmosis water filtration systems in the back room of the retailer’s store location, which minimizes the usage of the customer’s retail space. The refill vending machine, which is accompanied by a sales display containing empty reusable bottles, is located within the retailer customer’s floor space. Segments The company’s segments include Primo Water (Water) and Primo Dispensers (Dispensers). The Water segment sales consist of the sale of multi-gallon purified bottled water (exchange services) and self-serve filtered drinking water vending service (refill services) offered through retailers in each of the contiguous United States and Canada. The Water services are offered through point of purchase display racks or self-serve filtered water vending displays and recycling centers that are located at major retailers in space that is often underutilized. The Dispensers segment sells water dispensers that are designed to dispense Primo and other dispenser-compatible bottled water. The Dispensers sales are primarily generated through major U.S. retailers and are sold primarily through a direct-import model. The company supports retail sell-through with domestic inventory. It designs, markets, and arranges for certification and inspection of water dispensers. Products Water: The company’s proprietary blend of mineral ingredients was developed with the assistance of consultants and several months of lab work and taste tests. The company’s Refill service consists of carbon filtration and a reverse osmosis water filtration system that provides filtered drinking water, which is periodically tested for quality. Water Bottles: The company sources three- and five-gallon water bottles from multiple independent vendors for use in its Exchange service. Each of its Primo water bottles includes a handle designed for easy transportation and lifting when installing the bottle onto or into one of its water dispensers. The company’s bottles also include a specially designed cap that prevents spills when carrying or installing. For its Refill service, the company offers empty reusable one-, two-, three- and five-gallon bottles for a sales display that accompany a refill vending machine, which are sourced from several manufacturers. Water Dispensers: The company sources and markets 2 lines of water dispensers, including approximately 29 models. Its dispensers are designed to dispense Primo and other dispenser-compatible bottled water. Intellectual Property and Trademarks The company owns 10 United States federal trademark registrations, including registrations for its Primo and Taste Perfection trademarks, its Primo logo and its distinctive four bubble design. The company also owns a pending application to register its Zero Waste. The United States design patents expire between May 2021 and April 2022 and, the Canadian industrial design registrations expire in May 2017. Regulation The company is required to comply with: federal laws, such as the U.S. Federal Food, Drug and Cosmetic Act, the Canadian Food and Drug Act and the U.S. Occupational Safety and Health Act; customs and foreign trade laws and regulations; state and provincial consumer protection laws; federal, state, provincial and local environmental, health and safety laws; laws governing equal employment opportunity and workplace activities; and various other federal, state, provincial and local statutes and regulations. Seasonality The company’s sales and operating income have been highest in the spring and summer, and lowest in the fall and winter. Its Exchange and Refill services, which enjoy higher margins than its sales of water dispensers, experience higher sales and operating income in the spring and summer. Competition The company’s primary competitor in its United States Exchange business is Nestlé. History Primo Water Corporation was founded in 2004.
primo water corp (PRMW:NASDAQ GM)
104 Cambridge Plaza Drive
Winston-Salem, NC 27104
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