Shares of Primo Water Corp. (PRMW) declined almost 22 percent in extended trade on Tuesday after the provider of purified bottled water and water dispensers reported a second-quarter loss that widened from last year on impairment charges that offset strong revenue growth.
The company also forecast financial results for the third quarter below analysts' estimates and lowered its outlook for fiscal 2012.
Primo Water also said that as the Flavorstation business was progressing at slower rate than expected, it will pursue strategic alternatives including potential Flavorstation appliance brand licensing partnerships or the sale of certain Flavorstation appliance assets.
Sales in the Dispenser segment for the quarter surged 58 percent to $9.3 million, due primarily to new locations that offer dispensers as well as sell-thru growth at existing locations. Water dispenser units sell-thru to consumers grew 36.7 percent to 96,500.
Water segment sales rose 3.6 percent to $15.4 million. Sales in the Water segment consist of sales of multi-gallon purified bottled water and self-serve filtered drinking water vending services.
Gross margin for the quarter decreased to 17.5 percent from 27.1 percent in the year-ago period.
North Carolina-based Primo Water's second-quarter net loss widened to $26.31 million or $1.11 per share from $1.98 million or $0.10 per share in the year-ago period.
The latest quarter's results include non-cash impairment charges of $24.9 million related to goodwill and Omnifrio technology.
Adjusted net loss widened to $686 thousand or $0.03 per share from $259 thousand or $0.01 per share in the same period last year.
On average, two analysts polled by Thomson Reuters expected the company to report loss of $0.04 per share for the quarter. Analysts' estimates typically exclude special items.
However, total net sales grew 21 percent to $24.96 million from $20.70 million in the year-ago period, reflecting growth in both water and dispenser sales. Analysts had a consensus revenue estimate of $24.46 million.
Looking ahead to the third quarter, Primo Water forecasts loss of loss of $0.05 to $0.08 per share, adjusted loss of $0.02 to $0.04 per share, and net sales of $26.0 million to $28.0 million. Analysts expect the company to earn $0.03 per share on revenues of $34.01 million.
For fiscal 2012, Primo Water now forecasts loss of $1.37 to $1.44 per share, adjusted loss of $0.14 to $0.18 per share, and net sales in a range of $94.0 million to $100.0 million.
Earlier, the company forecast full-year loss of $0.17 to $0.20 per share, adjusted earnings of $0.03 to $0.08 per share, and net sales in a range of $118.0 million to $126.0 million.
Analysts expect the company to report loss of $0.02 per share on revenues of $116.11 million.
PRMW closed Tuesday's regular session at $1.46, down $0.01 or 0.68 percent on a volume of 373,655 shares. In after-hours, the stock further declined $0.32 or 21.92 percent to $1.14.
For comments and feedback: editorial@rttnews.com