UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
(Mark One)
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the quarterly period ended
or
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the transition period from __________ to __________.
Commission File Number
(Exact name of registrant as specified in its charter)
(State or other jurisdiction of |
(I.R.S. Employer |
incorporation or organization) |
Identification Number) |
(Address of principal executive offices) (Zip Code)
(
(Registrant’s telephone number, including area code)
N/A
(Former name, former address and formal fiscal year, if changed since last report)
Securities registered pursuant to Section 12(b) of the Act:
Title of each class |
Trading Symbol(s) |
Name of each exchange on which registered |
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
☒ |
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Accelerated filer |
☐ |
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Non-accelerated filer |
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Smaller reporting company |
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Emerging growth company |
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If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No
As of October 28, 2022, the registrant had
Ranpak Holdings Corp.
Quarterly Report on Form 10-Q
For the Period Ended September 30, 2022
Table of Contents
PART I – FINANCIAL INFORMATION
Item 1. Financial Statements
Index to Unaudited Condensed Consolidated Financial Statements
Ranpak Holdings Corp.
Unaudited Condensed Consolidated Balance Sheets – September 30, 2022 and December 31, 2021
Notes to the Unaudited Condensed Consolidated Financial Statements
1
Ranpak Holdings Corp.
Unaudited Condensed Consolidated Statements of Operations
and Comprehensive Income (Loss)
(in millions, except share and per share data)
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Three Months Ended September 30, |
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Nine Months Ended September 30, |
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2022 |
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2021 |
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2022 |
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2021 |
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Paper revenue |
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$ |
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$ |
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$ |
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$ |
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Machine lease revenue |
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Other revenue |
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Net revenue |
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Cost of goods sold |
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Gross profit |
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Selling, general and administrative expenses |
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Depreciation and amortization expense |
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Other operating expense (income), net |
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( |
) |
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Income (loss) from operations |
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( |
) |
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( |
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Interest expense |
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Foreign currency gain |
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( |
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( |
) |
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( |
) |
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( |
) |
Other non-operating income, net |
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( |
) |
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( |
) |
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Loss before income tax benefit |
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( |
) |
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( |
) |
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( |
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( |
) |
Income tax benefit |
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( |
) |
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( |
) |
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( |
) |
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( |
) |
Net loss |
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$ |
( |
) |
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$ |
( |
) |
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$ |
( |
) |
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$ |
( |
) |
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Two-class method |
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Loss per share |
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Basic |
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$ |
( |
) |
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$ |
( |
) |
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$ |
( |
) |
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$ |
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Diluted |
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$ |
( |
) |
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$ |
( |
) |
|
$ |
( |
) |
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$ |
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|
Class A – earnings (loss) per share |
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Basic |
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$ |
( |
) |
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
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Diluted |
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
|
|
Class C – earnings (loss) per share |
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Basic |
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
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Diluted |
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
( |
) |
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$ |
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Weighted average number of shares outstanding – Class A and C |
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Basic |
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Diluted |
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Other comprehensive income (loss), before tax |
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Foreign currency translation adjustments |
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
( |
) |
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$ |
( |
) |
Interest rate swap adjustments |
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Cross-currency swap adjustments |
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Total other comprehensive loss, before tax |
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( |
) |
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( |
) |
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( |
) |
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( |
) |
Provision for income taxes related to other comprehensive loss |
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Total other comprehensive loss, net of tax |
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( |
) |
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( |
) |
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( |
) |
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( |
) |
Comprehensive loss, net of tax |
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$ |
( |
) |
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$ |
( |
) |
|
$ |
( |
) |
|
$ |
( |
) |
See notes to unaudited condensed consolidated financial statements.
2
Ranpak Holdings Corp.
Unaudited Condensed Consolidated Balance Sheets
(in millions, except share data)
|
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September 30, 2022 |
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December 31, 2021 |
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Assets |
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Current assets |
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Cash and cash equivalents |
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$ |
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$ |
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Accounts receivable, net |
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Inventories, net |
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Income tax receivable |
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Prepaid expenses and other current assets |
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Total current assets |
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Property, plant and equipment, net |
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Operating lease right-of-use assets, net |
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Goodwill |
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Intangible assets, net |
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Deferred tax assets |
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Other assets |
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Total assets |
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$ |
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$ |
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||
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Liabilities and Shareholders' Equity |
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Current liabilities |
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Accounts payable |
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$ |
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$ |
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||
Accrued liabilities and other |
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Current portion of long-term debt |
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Operating lease liabilities, current |
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Deferred machine fee revenue |
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Total current liabilities |
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Long-term debt |
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Deferred tax liabilities |
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Derivative instruments |
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Operating lease liabilities, non-current |
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Other liabilities |
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Total liabilities |
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Shareholders' equity |
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Class A common stock, $ |
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authorized at September 30, 2022 and December 31, 2021 |
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Shares issued and outstanding: |
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at September 30, 2022 and December 31, 2021, respectively |
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Class C common stock, $ |
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authorized at September 30, 2022 and December 31, 2021 |
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Shares issued and outstanding: |
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at September 30, 2022 and December 31, 2021 |
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Additional paid-in capital |
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Accumulated deficit |
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( |
) |
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( |
) |
Accumulated other comprehensive income (loss) |
|
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( |
) |
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Total shareholders' equity |
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Total liabilities and shareholders' equity |
|
$ |
|
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$ |
|
||
See notes to unaudited condensed consolidated financial statements.
3
Ranpak Holdings Corp.
Unaudited Condensed Consolidated Statements of Changes in Shareholders’ Equity
(in millions, except share data)
|
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Common Stock |
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Class A |
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Class C |
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Shares |
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Amount |
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Shares |
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Amount |
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Additional Paid-In Capital |
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Accumulated Earnings (Deficit) |
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Accumulated Other Comprehensive Income (Loss) |
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Total |
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||||||||
Balance at December 31, 2020 |
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$ |
- |
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$ |
- |
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|
$ |
|
|
$ |
( |
) |
|
$ |
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$ |
|
|||||
Stock-based awards vested and distributed |
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- |
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- |
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- |
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( |
) |
|
|
- |
|
|
|
- |
|
|
|
( |
) |
|
Issue Director shares |
|
|
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
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|
Amortization of restricted stock units |
|
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- |
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- |
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|
- |
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|
- |
|
|
|
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|
- |
|
|
|
- |
|
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||
Net income |
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|
- |
|
|
|
- |
|
|
|
- |
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- |
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|
- |
|
|
|
|
|
|
- |
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||
Other comprehensive loss |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
( |
) |
|
|
( |
) |
Balance at March 31, 2021 |
|
|
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|
$ |
- |
|
|
|
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|
$ |
- |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
|
|
$ |
|
|||||
Shareholder conversion of Class C to Class A |
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|
- |
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( |
) |
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- |
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- |
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- |
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- |
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- |
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May 2021 Equity Offering |
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- |
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- |
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- |
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- |
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- |
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|||
Stock-based awards vested and distributed |
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- |
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- |
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- |
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- |
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- |
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|
- |
|
|
|
- |
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Issue Director shares |
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- |
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- |
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- |
|
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- |
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|
|
- |
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- |
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- |
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|
Amortization of restricted stock units |
|
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- |
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- |
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|
- |
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- |
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- |
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- |
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||
Net loss |
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- |
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- |
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- |
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- |
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|
- |
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|
( |
) |
|
|
- |
|
|
|
( |
) |
Other comprehensive income |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
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|
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||
Balance at June 30, 2021 |
|
|
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|
$ |
- |
|
|
|
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|
$ |
- |
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|
$ |
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|
$ |
( |
) |
|
$ |
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|
$ |
|
|||||
Stock-based awards vested and distributed |
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- |
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- |
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- |
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|
- |
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- |
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|
|
- |
|
|
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- |
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|
Issue Director shares |
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|
- |
|
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|
- |
|
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- |
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- |
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- |
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- |
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- |
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|
Amortization of restricted stock units |
|
|
- |
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|
- |
|
|
|
- |
|
|
|
- |
|
|
|
|
|
|
- |
|
|
|
- |
|
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|
||
Net loss |
|
|
- |
|
|
|
- |
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|
|
- |
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|
|
- |
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|
|
- |
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|
|
( |
) |
|
|
- |
|
|
|
( |
) |
Other comprehensive loss |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
( |
) |
|
|
( |
) |
Balance at September 30, 2021 |
|
|
|
|
$ |
- |
|
|
|
|
|
$ |
- |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
|
|
$ |
|
|||||
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||||||||
Balance at December 31, 2021 |
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|
$ |
- |
|
|
|
|
|
$ |
- |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
|
|
$ |
|
|||||
Stock-based awards vested and distributed |
|
|
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
( |
) |
|
|
- |
|
|
|
- |
|
|
|
( |
) |
|
Issue Director shares |
|
|
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
Amortization of restricted stock units |
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|
- |
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|
- |
|
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|
- |
|
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|
- |
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|
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- |
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|
- |
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|
||
Net loss |
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|
- |
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|
- |
|
|
|
- |
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|
|
- |
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|
|
- |
|
|
|
( |
) |
|
|
- |
|
|
|
( |
) |
Other comprehensive income |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
|
|
|
|
||
Balance at March 31, 2022 |
|
|
|
|
$ |
- |
|
|
|
|
|
$ |
- |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
|
|
$ |
|
|||||
Stock-based awards vested and distributed |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
Issue Director shares |
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|
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
Amortization of restricted stock units |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
|
|
|
- |
|
|
|
- |
|
|
|
|
||
Net loss |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
( |
) |
|
|
- |
|
|
|
( |
) |
Other comprehensive loss |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
( |
) |
|
|
( |
) |
Balance at June 30, 2022 |
|
|
|
|
$ |
- |
|
|
|
|
|
$ |
- |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
|
||||
Stock-based awards vested and distributed |
|
|
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
Issue Director shares |
|
|
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
Amortization of restricted stock units |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
|
|
|
- |
|
|
|
- |
|
|
|
|
||
Net loss |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
( |
) |
|
|
- |
|
|
|
( |
) |
Other comprehensive loss |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
( |
) |
|
|
( |
) |
Balance at September 30, 2022 |
|
|
|
|
$ |
- |
|
|
|
|
|
$ |
- |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
|
||||
See notes to unaudited condensed consolidated financial statements.
4
Ranpak Holdings Corp.
Unaudited Condensed Consolidated Statements of Cash Flows
(in millions)
|
|
Nine Months Ended September 30, |
|
|||||
|
|
2022 |
|
|
2021 |
|
||
Cash Flows from Operating Activities |
|
|
|
|
|
|
||
Net loss |
|
$ |
( |
) |
|
$ |
( |
) |
Adjustments to reconcile net loss to net cash provided by (used in) operating activities: |
|
|
|
|
|
|
||
Depreciation and amortization |
|
|
|
|
|
|
||
Amortization of deferred financing costs |
|
|
|
|
|
|
||
Loss on disposal of fixed assets |
|
|
|
|
|
|
||
Deferred income taxes |
|
|
( |
) |
|
|
( |
) |
Amortization of initial value of interest rate swap |
|
|
( |
) |
|
|
( |
) |
Currency gain on foreign denominated debt and notes payable |
|
|
( |
) |
|
|
( |
) |
Amortization of restricted stock units |
|
|
|
|
|
|
||
Unrealized gain on investments in small private businesses |
|
|
( |
) |
|
|
|
|
Changes in operating assets and liabilities: |
|
|
|
|
|
|
||
(Increase) decrease in receivables, net |
|
|
( |
) |
|
|
( |
) |
(Increase) decrease in inventory |
|
|
( |
) |
|
|
( |
) |
(Increase) decrease in prepaid expenses and other assets |
|
|
( |
) |
|
|
( |
) |
Increase (decrease) in accounts payable |
|
|
( |
) |
|
|
|
|
Increase (decrease) in accrued liabilities |
|
|
( |
) |
|
|
|
|
Change in other assets and liabilities |
|
|
( |
) |
|
|
( |
) |
Net cash provided by (used in) operating activities |
|
|
( |
) |
|
|
|
|
|
|
|
|
|
|
|
||
Cash Flows from Investing Activities |
|
|
|
|
|
|
||
Capital expenditures: |
|
|
|
|
|
|
||
Converter equipment |
|
|
( |
) |
|
|
( |
) |
Other capital expenditures |
|
|
( |
) |
|
|
( |
) |
Total capital expenditures |
|
|
( |
) |
|
|
( |
) |
Cash paid for investments in small private businesses |
|
|
( |
) |
|
|
( |
) |
Cash inflow from settlement of net investment hedges |
|
|
|
|
|
|
||
Patent and trademark expenditures |
|
|
( |
) |
|
|
( |
) |
Net cash used in investing activities |
|
|
( |
) |
|
|
( |
) |
|
|
|
|
|
|
|
||
Cash Flows from Financing Activities |
|
|
|
|
|
|
||
Proceeds from equity offerings, gross |
|
|
|
|
|
|
||
Prepayments on term loan |
|
|
|
|
|
( |
) |
|
Transaction costs of equity offerings |
|
|
|
|
|
( |
) |
|
Principal payments on term loans |
|
|
( |
) |
|
|
( |
) |
Payments on finance lease liabilities |
|
|
( |
) |
|
|
( |
) |
Exit Payment |
|
|
|
|
|
( |
) |
|
Tax payments for withholdings on stock-based awards distributed |
|
|
( |
) |
|
|
|
|
Net cash provided by (used in) financing activities |
|
|
( |
) |
|
|
|
|
|
|
|
|
|
|
|
||
Effect of Exchange Rate Changes on Cash |
|
|
( |
) |
|
|
( |
) |
Net Increase (Decrease) in Cash and Cash Equivalents |
|
|
( |
) |
|
|
|
|
Cash and Cash Equivalents, beginning of period |
|
|
|
|
|
|
||
Cash and Cash Equivalents, end of period |
|
$ |
|
|
$ |
|
||
See notes to unaudited condensed consolidated financial statements.
5
Ranpak Holdings Corp.
Notes to Unaudited Condensed Consolidated Financial Statements
(in millions, except share and per share data)
Note 1 — Nature of Operations
Ranpak Holdings Corp. is a leading provider of environmentally sustainable, systems-based, product protection solutions for e-Commerce and industrial supply chains. Through proprietary protective packaging solutions (“PPS”) systems and paper consumables, the Company offers a full suite of protective packaging solutions. The Automated Solutions (“AS”) and Automated Paper Solutions (“APS”) (collectively, “Automation”) product lines provide end-of-line automation systems that solve distinct challenges facing end-users. The Company’s business is global, with a strong presence in the United States and Europe. Throughout this report, when we refer to “Ranpak,” the “Company,” “we,” “our,” or “us,” we are referring to Ranpak Holdings Corp. and all of our subsidiaries, except where the context indicates otherwise.
Note 2 — Basis of Presentation and Summary of Significant Accounting Policies
Unaudited Interim Financial Statements — These interim unaudited condensed consolidated financial statements should be read in conjunction with our audited consolidated financial statements and accompanying notes for each of the three years ended December 31, 2021, 2020, and 2019, which are included in our Annual Report on Form 10-K for the year ended December 31, 2021 (“2021 10-K”). The three months ended September 30, 2022 may be further referred to herein as the “third quarter of 2022.” The three months ended September 30, 2021 may be further referred to herein as the “third quarter of 2021.”
The accompanying unaudited interim condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) and with instructions to Form 10-Q and Rule 10-01 of the Securities and Exchange Commission (“SEC”) Regulation S-X as they apply to interim financial information. Accordingly, the unaudited interim condensed consolidated financial statements do not include all of the information and notes required by GAAP for complete financial statements, although we believe that the disclosures made are adequate to make the information not misleading.
The interim condensed consolidated financial statements are unaudited but, in our opinion, include all adjustments that are necessary for a fair statement of operations and financial position for the periods presented. The interim financial results are not necessarily indicative of results that may be expected for any other interim period or the fiscal year.
Use of Estimates — The preparation of condensed consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the condensed consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from these estimates and such differences could be material.
Foreign Currency — The nature of business activities involves the management of various financial and market risks, including those related to changes in foreign currency exchange rates. The functional currency of our operating subsidiaries outside the U.S. is the applicable local currency. For those operations, assets and liabilities are translated into U.S. dollars at period-end exchange rates and revenues and expenses are translated into U.S. dollars using average monthly exchange rates.
Investments in Small Private Businesses — In the third quarter of 2021, we paid consideration of $
In the third quarter of 2022, we invested an additional $
Recently Adopted Accounting Standards — We have adopted all applicable accounting standards and did not adopt any new accounting standards issued by the Financial Accounting Standards Board (“FASB”) in 2022.
6
Ranpak Holdings Corp.
Notes to Unaudited Condensed Consolidated Financial Statements
(in millions, except share and per share data)
Recently Issued Accounting Standards — As of September 30, 2022, it is not expected that the future adoption of any recently issued accounting pronouncements by the FASB will have a material impact on our financial position, results of operations or cash flows.
Note 3 — Supplemental Balance Sheet Data and Cash Flow Information
Cash and cash equivalents — Cash and cash equivalents include securities with original maturities of three months or less and cash in banks. In June 2021, we invested in a money market fund, which is classified as a cash equivalent because of its short-term, highly liquid nature that is readily convertible to cash. Unrealized gains or losses are included in other operating non-operating expense (income), net and were immaterial in all periods presented. The balance was approximately $
In May 2021, we completed a public offering of
Accounts Receivable, net — The components of accounts receivable, net were as follows:
|
|
September 30, 2022 |
|
|
December 31, 2021 |
|
||
Accounts receivable |
|
$ |
|
|
$ |
|
||
Allowance for doubtful accounts |
|
|
( |
) |
|
|
( |
) |
Accounts receivable, net |
|
$ |
|
|
$ |
|
||
At September 30, 2022 and December 31, 2021, no customer’s accounts receivable balances exceeded
Inventories, net — The components of inventories, net were as follows:
|
|
September 30, 2022 |
|
|
December 31, 2021 |
|
||
Raw materials |
|
$ |
|
|
$ |
|
||
Work-in-process |
|
|
|
|
|
|
||
Finished goods |
|
|
|
|
|
|
||
Total inventories |
|
|
|
|
|
|
||
Reserve for obsolescence |
|
|
( |
) |
|
|
( |
) |
Inventories, net |
|
$ |
|
|
$ |
|
||
Property, Plant and Equipment, net — The following table details our property, plant and equipment, net:
|
|
September 30, 2022 |
|
|
December 31, 2021 |
|
||
Land |
|
$ |
|
|
$ |
|
||
Buildings and improvements |
|
|
|
|
|
|
||
Machinery and equipment |
|
|
|
|
|
|
||
Computer and office equipment |
|
|
|
|
|
|
||
Converting machines |
|
|
|
|
|
|
||
Total property, plant, and equipment |
|
|
|
|
|
|
||
Accumulated depreciation |
|
|
( |
) |
|
|
( |
) |
Property, plant, and equipment, net |
|
$ |
|
|
$ |
|
||
Declining market conditions within our long-lived asset groups and the decline in our share price indicated that the carrying amount of our asset groups may not be recoverable. We performed an evaluation of our asset groups in the third quarter of 2022. The undiscounted cash flows expected to be generated from the use and eventual disposition of the asset groups were compared to the carrying values of the asset groups and it was determined that the carrying amounts of our asset groups were recoverable and not impaired. Refer to Notes 6 and 12 for further detail.
7
Ranpak Holdings Corp.
Notes to Unaudited Condensed Consolidated Financial Statements
(in millions, except share and per share data)
Depreciation expense recorded in cost of goods sold and depreciation and amortization in the unaudited condensed consolidated statements of operations and comprehensive income (loss) was as follows:
|
|
Three Months Ended September 30, |
|
|
Nine Months Ended September 30, |
|
||||||||||
Depreciation expense included in |
|
2022 |
|
|
2021 |
|
|
2022 |
|
|
2021 |
|
||||
Cost of goods sold |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Depreciation and amortization expense |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Total depreciation expense |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Accrued Liabilities and Other – The components of accrued liabilities and other were as follows:
|
|
September 30, 2022 |
|
|
December 31, 2021 |
|
||
Employee compensation |
|
$ |
|
|
$ |
|
||
Taxes |
|
|
|
|
|
|
||
Professional fees |
|
|
|
|
|
|
||
Bonus |
|
|
|
|
|
|
||
Interest |
|
|
|
|
|
|
||
Interest rate swap liability, current portion |
|
|
|
|
|
|
||
Other |
|
|
|
|
|
|
||
Accrued liabilities and other |
|
$ |
|
|
$ |
|
||
Supplemental Cash Flow Information — Supplemental cash flow information is as follows:
|
|
Three Months Ended September 30, |
|
|
Nine Months Ended September 30, |
|
||||||||||
|
|
2022 |
|
|
2021 |
|
|
2022 |
|
|
2021 |
|
||||
Supplemental cash flow information |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Interest paid |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Income taxes paid |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Non-cash investing activities |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Right-of-use assets obtained in exchange for lease liabilities |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Capital expenditures in accounts payable |
|
|
|
|
|
$ |
|
|
$ |
|
||||||
Note 4 — Segment and Geographic Information
In accordance with ASC 280, Segment Reporting (“ASC 280”), we determined we have
8
Ranpak Holdings Corp.
Notes to Unaudited Condensed Consolidated Financial Statements
(in millions, except share and per share data)
We attribute revenue and gross profit to individual countries based on the selling location. Our products are primarily sold from North America and Europe. As previously noted, segment gross profit includes certain depreciation and amortization expenses that are included in cost of goods sold.
|
|
Three Months Ended September 30, |
|
|
Nine Months Ended September 30, |
|
||||||||||
|
|
2022 |
|
|
2021 |
|
|
2022 |
|
|
2021 |
|
||||
Revenue |
|
|
|
|
|
|
|
|
|
|
|
|
||||
North America |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Europe/Asia |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Net revenue |
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Segment gross profit |
|
|
|
|
|
|
|
|
|
|
|
|
||||
North America |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Europe/Asia |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Gross profit |
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Expenses excluded from segment gross profit |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Selling, general and administrative expenses |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Depreciation and amortization expense |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Other operating expense (income), net |
|
|
|
|
|
( |
) |
|
|
|
|
|
|
|||
Interest expense |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Foreign currency gain |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
Other non-operating income, net |
|
|
( |
) |
|
|
|
|
|
( |
) |
|
|
|
||
Loss before income tax benefit |
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
( |
) |
Our customers are not concentrated in any specific geographic region. During the nine months ended September 30, 2022 and 2021, no customers exceeded
The following table presents our long-lived assets by geographic region:
|
|
September 30, 2022 |
|
|
December 31, 2021 |
|
||
North America |
|
$ |
|
|
$ |
|
||
Europe/Asia |
|
|
|
|
|
|
||
Total long-lived assets |
|
$ |
|
|
$ |
|
||
Note 5 — Revenue Recognition, Contracts with Customers
Revenue is recognized when control of the promised goods or services is transferred to customers in an amount that reflects the consideration expected to be received in exchange for those goods or services. Revenue for paper consumables is recognized based on shipping terms, which is the point in time the customer obtains control of the promised goods. Revenue for equipment sales is recognized based on an input method, based on percentage of completion of cost and effort incurred. Maintenance revenue is recognized straight-line on the basis that the level of effort is consistent over the term of the contract. Lease components within contracts with customers are recognized in accordance with ASC 842. Our contract durations are twelve months or less and lease revenues beyond twelve months are not estimable.
Sales, value-added, and other taxes collected from customers and remitted to governmental authorities are excluded from revenue.
Our paper consumables, automation equipment, and maintenance services are determined to be distinct performance obligations. Free on loan and leased equipment is typically identified as a separate lease component in scope of ASC 842. In association to the sale of automation equipment, we sell other goods and services, such as extended warranties, preventative maintenance services, spare parts and spare part packages, and consulting services.
We have forms of variable consideration present in our contracts with customers, including rebates and other discounts. We estimate variable consideration using either the expected value method or the most likely amount method. We include in the transaction price some or all of an amount of variable consideration estimated to the extent that it is probable that a significant reversal in the amount of cumulative revenue recognized will not occur when the uncertainty associated with the variable consideration is subsequently resolved.
9
Ranpak Holdings Corp.
Notes to Unaudited Condensed Consolidated Financial Statements
(in millions, except share and per share data)
The time between when a performance obligation is satisfied and when billing and payment occur is closely aligned and performance obligations do not extend beyond one year. As the transfer of control of our products results in an unconditional right to receive consideration, we did
Deferred revenue represents contractual amounts received from customers that exceed percentage of project completion that is in excess of costs incurred for automation equipment sales, as well as prepayments for machine fees. Customers prepay machine fees quarterly, which are deferred and then recognized as the performance obligations are satisfied over the next quarter.
|
|
Nine Months Ended September 30, |
|
|
|
|
2022 |
|
|
Beginning balance |
|
$ |
|
|
Deferral of revenue |
|
|
|
|
Recognition of revenue |
|
|
( |
) |
Ending balance |
|
$ |
|
|
In addition to the disaggregation of revenue between paper, machine lease, and other revenue, we also disaggregate our revenue by segment geography to assist in evaluating the nature, timing, and uncertainty of revenue and cash flows that may be impacted by economic factors:
|
|
Three Months Ended September 30, |
|
|
Nine Months Ended September 30, |
|
||||||||||
|
|
2022 |
|
|
2021 |
|
|
2022 |
|
|
2021 |
|
||||
ASC 606 |
|
|
|
|
|
|
|
|
|
|
|
|
||||
North America |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Europe/Asia |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Total paper and other revenue |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
ASC 842 |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Machine lease revenue |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Net revenue |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
North America consists of the United States, Canada and Mexico, among others; Europe/Asia consists of European, Asian (including China), Pacific Rim, South American and African countries, among others.
Note 6 — Goodwill, Long-Lived Assets, Intangible Assets and Impairment
Goodwill, Indefinite-Lived Intangible Assets and Impairment
Goodwill represents the excess of purchase price over the fair value of net assets acquired. Trademarks and trade names are accounted for as indefinite-lived intangible assets and, accordingly, are not subject to amortization. We review goodwill on a reporting unit basis and indefinite-lived assets for impairment annually on October 1st and on an interim basis whenever events or changes in circumstances indicate the carrying value of goodwill or indefinite-lived intangible assets may be impaired.
Declining market conditions within our reporting units and the decline in our share price triggered interim testing for impairment of goodwill and indefinite-lived intangible assets as of September 1, 2022. The test for goodwill used unobservable inputs that required significant judgement and were performed using a combination of the Discounted Cash Flow Method and the Guideline Public Company Method in order to determine fair value. The test for indefinite-lived intangible assets also used unobservable inputs that required significant judgement and were performed using the Relief from Royalty Method in order to determine fair value. Upon completion of the tests, we concluded that the fair value of our reporting units and indefinite-lived intangible assets exceeded their carrying values and were not impaired.
The following table shows our goodwill balances by operating segment that are aggregated into one reportable segment:
|
|
North America |
|
|
Europe |
|
|
Total |
|
|||
Balance at December 31, 2021 |
|
|
|
|
|
|
|
|
|
|||
Currency translation |
|
|
|
|
|
( |
) |
|
|
( |
) |
|
Balance at September 30, 2022 |
|
$ |
|
|
$ |
|
|
$ |
|
|||
10
Ranpak Holdings Corp.
Notes to Unaudited Condensed Consolidated Financial Statements
(in millions, except share and per share data)
Finite-Lived or Amortizable Intangible Assets, net
Finite-lived or amortizable intangible assets consist of patented and unpatented technology, customer/distributor relationships, and other intellectual property.
Impairment of Long-Lived Assets
We review our long-lived assets, including amortizable intangible assets; property, plant and equipment; and lease right-of-use assets for impairment whenever events or changes in circumstances indicate the carrying amount of an asset may not be recoverable. For long-lived assets, an impairment loss is indicated when the undiscounted cash flows estimated to be generated by the asset group are not sufficient to recover the unamortized balance of the asset group. If indicators exist, the loss is measured as the excess of carrying value over the asset group’s fair value, as determined based on discounted future cash flows, asset appraisal and market values of similar assets.
Declining market conditions within our long-lived asset groups and the decline in our share price indicated that the carrying amount of our asset groups may not be recoverable as of September 1, 2022. We performed an evaluation of our asset groups using unobservable inputs that required significant judgement and were performed using an undiscounted cash flow analysis. Upon completion of the evaluation, the undiscounted cash flows expected to be generated from the use and eventual disposition of the asset groups were compared to the carrying value of the asset groups and we concluded that the carrying amounts of our asset groups were recoverable and not impaired.
The following tables summarize our identifiable intangible assets, net with definite and indefinite useful lives:
|
|
September 30, 2022 |
|
|
December 31, 2021 |
|
||||||||||||||||||
|
|
Gross Carrying Amount |
|
|
Accumulated Amortization |
|
|
Net |
|
|
Gross Carrying Amount |
|
|
Accumulated Amortization |
|
|
Net |
|
||||||
Customer/distributor relationships |
|
$ |
|
|
$ |
( |
) |
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
|
||||
Patented/unpatented technology |
|
|
|
|
|
( |
) |
|
|
|
|
|
|
|
|
( |
) |
|
|
|
||||
Intellectual property |
|
|
|
|
|
( |
) |
|
|
|
|
|
|
|
|
( |
) |
|
|
|
||||
Total definite-lived intangible assets |
|
|
|
|
|
( |
) |
|
|
|
|
|
|
|
|
( |
) |
|
|
|
||||
Trademarks/tradenames with indefinite lives |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Identifiable intangible assets, net |
|
$ |
|
|
$ |
( |
) |
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
|
||||
The following table shows the remaining estimated amortization expense for our definite-lived intangible assets at September 30, 2022:
Year |
|
Amount |
|
|
2022 |
|
$ |
|
|
2023 |
|
|
|
|
2024 |
|
|
|
|
2025 |
|
|
|
|
2026 |
|
|
|
|
Thereafter |
|
|
|
|
|
|
$ |
|
|
Amortization expense was $
The following table shows the remaining weighted-average useful life of our definite lived intangible assets as of September 30, 2022:
|
|
Remaining Weighted-Average Useful Life |
||
|
|
September 30, 2022 |
|
December 31, 2021 |
Customer/distributor relationships |
|
|
||
Patented/unpatented technology |
|
|
||
Intellectual property |
|
|
||
Total identifiable assets, net with definite lives |
|
|
||
11
Ranpak Holdings Corp.
Notes to Unaudited Condensed Consolidated Financial Statements
(in millions, except share and per share data)
Note 7 — Long-Term Debt
Ranger Pledgor LLC, a Delaware limited liability company (“Holdings”), Ranger Packaging LLC, a Delaware limited liability company (the “U.S. Borrower”), and Ranpak B.V., a private limited liability company under the laws of the Netherlands (the “Dutch Borrower” and together with the U.S. Borrower, the “Borrowers”), entered into a First Lien Credit Agreement on June 3, 2019 that provided for senior secured credit facilities to, in part, (i) fund a business combination, (ii) repay and terminate the existing indebtedness of Rack Holdings, and (iii) pay all fees, premiums, expenses and other transaction costs incurred in connection with the foregoing. The aggregate principal amount of the senior secured credit facilities consists of a $
Long-term debt consisted of the following:
|
|
September 30, 2022 |
|
|
December 31, 2021 |
|
||
First Lien Dollar Term Facility |
|
$ |
|
|
$ |
|
||
First Lien Euro Term Facility |
|
|
|
|
|
|
||
Finance lease liabilities |
|
|
|
|
|
|
||
Deferred financing costs, net |
|
|
( |
) |
|
|
( |
) |
Total debt |
|
|
|
|
|
|
||
Less: current portion of long-term debt |
|
|
( |
) |
|
|
( |
) |
Less: current portion of finance lease liabilities |
|
|
( |
) |
|
|
( |
) |
Long-term debt |
|
$ |
|
|
$ |
|
||
Borrowings under the Facilities, at the Borrowers’ option, bear interest at either (1) an adjusted eurocurrency rate or (2) a base rate, in each case plus an applicable margin. The applicable margin is
The Revolving Facility includes borrowing capacity available for standby letters of credit of up to $
The Facilities will provide the Borrowers with the option to increase commitments under the Facilities in an aggregate amount not to exceed the greater of $
The obligations of (i) the U.S. Borrower under the Facilities and certain of its obligations under hedging arrangements and cash management arrangements are unconditionally guaranteed by Holdings and each existing and subsequently acquired or organized direct or indirect wholly-owned U.S. organized restricted subsidiary of Holdings (together with Holdings, the “U.S. Guarantors”) and (ii) the Dutch Borrower under the Facilities are unconditionally guaranteed by the U.S. Borrower, the U.S. Guarantors and each existing and subsequently acquired or organized direct or indirect wholly-owned Dutch organized restricted subsidiary of Holdings (the “Dutch Guarantors”, and together with the U.S. Guarantors, the “Guarantors”), in each case, other than certain excluded subsidiaries. The Facilities are secured by (i) a first priority pledge of the equity interests of the Borrowers and of each direct, wholly-owned restricted subsidiary of any Borrower or any Guarantor and (ii) a first priority security interest in substantially all of the assets of the Borrowers and the Guarantors (in each case, subject to customary exceptions), provided that obligations of the U.S. Borrower and U.S. Guarantors under the Facilities were not secured by assets of the Dutch Borrower or any Dutch Guarantor.
The Facilities impose restrictions that require the Company to comply with or maintain certain financial tests and ratios. Such agreements restrict our ability to, among other things: (i) declare dividends or redeem or repurchase capital stock, including with
12
Ranpak Holdings Corp.
Notes to Unaudited Condensed Consolidated Financial Statements
(in millions, except share and per share data)
respect to Class A common stock; (ii) prepay, redeem or purchase other debt; (iii) incur liens; (iv) make loans, guarantees, acquisitions and other investments; (v) incur additional indebtedness; (vi) engage in sale and leaseback transactions; (vii) amend or otherwise alter debt and other material agreements; (viii) engage in mergers, acquisitions and asset sales; (ix) engage in transactions with affiliates; and (x) enter into arrangements that would prohibit us from granting liens or restrict our ability to pay dividends, make loans or transfer assets among our subsidiaries. We were in compliance with all financial covenants as of September 30, 2022.
On February 14, 2020, the Borrowers, Holdings, certain other subsidiaries of Holdings, certain lenders party to Amendment No. 1 (as defined below) and Goldman Sachs Lending Partners LLC (the “Administrative Agent”) entered into the Amendment No. 1 to First Lien Credit Agreement (“Amendment No. 1”) to amend the First Lien Credit Agreement, dated as of June 3, 2019 among the Borrowers, Holdings, the lenders, the issuing banks and the Administrative Agent (as amended, restated, supplemented or otherwise modified from time to time, the “Credit Agreement”).
Among other things, the Amendment No. 1 amends the Credit Agreement such that (i) the requirement of the Borrowers to apply excess cash flow to mandatorily prepay term loans under the Credit Agreement commences with the fiscal year ending December 31, 2021 (instead of the fiscal year ending December 31, 2020) and (ii) the aggregate amount per fiscal year of capital stock of any parent company of the U.S. Borrower that is held by directors, officers, management, employees, independent contractors or consultants of the U.S. Borrower (or any parent company or subsidiary thereof) that the U.S. Borrower may repurchase, redeem, retire or otherwise acquire or retire for value has been increased to the greater of $
On July 1, 2020, we entered into a borrower assumption agreement (“Borrower Assumption Agreement”), which provided that, in the following order, (i) Rack Holdings Inc. merged with and into Ranger Packaging LLC, with Ranger Packaging LLC as the surviving entity of such merger and (ii) Ranger Packaging LLC merged with and into Ranpak Corp., with Ranpak Corp. as the surviving entity of such merger (clauses (i) and (ii) collectively, the “Reorganization”). Contemporaneously with the Reorganization, Ranger Packaging LLC, Ranpak Corp., Ranger Pledgor LLC, certain other subsidiaries of Ranger Pledgor LLC and Goldman Sachs Lending Partners LLC entered into the Borrower Assumption Agreement whereby, among other things, Ranpak Corp. assumed all obligations, liabilities and rights of Ranger Packaging LLC as the U.S. Borrower under the Facilities.
Under the First Lien Term Facility agreement, our lower leverage ratio at December 31, 2020 required us to pay our lenders an $
As a result of making the Exit Payment to our lenders, we became eligible to enter into the Permitted Exit Payment Amendment (as defined in the Credit Agreement) to the Credit Agreement which, among other things, would introduce additional exceptions to the negative covenant that restricts the ability of the Borrowers and their restricted subsidiaries from paying dividends and distributions or repurchasing capital stock. On July 28, 2021, the Permitted Exit Payment Amendment to the Credit Agreement became effective.
Note 8 — Derivative Instruments
We use derivatives as part of the normal business operations to manage our exposure to fluctuations in interest rates associated with variable interest rate debt and fluctuations in foreign currency translation associated with our global business presence. These derivatives can help decrease the volatility of cash flows affected by changes in interest rates and foreign currency exchange rates.
On January 31, 2019, the Company entered into a business combination contingent interest rate swap in a notional amount of $
On September 25, 2019, the Company amended the January 2019 Swap to extend its term to mature on June 1, 2023 and lower the rate to
Additionally, on September 25, 2019, we designated as cash flow hedges the Amended January 2019 Swap and the September 2019 Swap and applied hedge accounting. Interest rate swaps designated as cash flow hedges involve the receipt of variable amounts from
13
Ranpak Holdings Corp.
Notes to Unaudited Condensed Consolidated Financial Statements
(in millions, except share and per share data)
a counterparty in exchange for us making fixed-rate payments over the life of the contract agreements without exchange of the underlying notional amount. Changes in fair value are recorded in accumulated other comprehensive income and subsequently reclassified into interest expense in the same period during which the hedged transaction affects earnings.
On March 27, 2020, we entered into an interest rate swap that amended the Amended January 2019 Swap to a lower rate of
A summary of our interest rate swaps is as follows:
Interest Rate Swap Agreements |
|
Designation |
|
Maturity Date |
|
Rate |
|
Notional Value |
|
|
Debt Instrument Hedged |
|
Percentage of Debt Instrument Outstanding |
|
September 30, 2022 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
September 2019 Swap |
|
Cash flow hedge |
|
June 1, 2023 |
|
|
$ |
|
|
First Lien Dollar Term Facility |
|
|||
Second Amended January 2019 Swap |
|
Cash flow hedge |
|
June 1, 2024 |
|
|
|
|
|
First Lien Dollar Term Facility |
|
|||
|
|
|
|
|
|
|
|
$ |
|
|
|
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31, 2021 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
September 2019 Swap |
|
Cash flow hedge |
|
June 1, 2023 |
|
|
$ |
|
|
First Lien Dollar Term Facility |
|
|||
Second Amended January 2019 Swap |
|
Cash flow hedge |
|
June 1, 2024 |
|
|
|
|
|
First Lien Dollar Term Facility |
|
|||
|
|
|
|
|
|
|
|
$ |
|
|
|
|
||
The Second Amended January 2019 Swap contains an insignificant financing element that is amortized over the term of the hedging relationship.
As of September 30, 2022, we anticipate having to reclassify $
On September 1, 2021, we entered into a cross currency swap (the “September 2021 Swap”) to protect our net investment in a European subsidiary and hedge against the risk of adverse changes in the exchange rate of the Euro and U.S. dollar (“USD”). On September 1, 2021, we designated the September 2021 Swap as a net investment hedge.
In February 2022, we terminated the September 2021 Swap. The resulting cash inflow of approximately $
In April 2022, we terminated the February 2022 Swap, resulting in a cash inflow of approximately $
14
Ranpak Holdings Corp.
Notes to Unaudited Condensed Consolidated Financial Statements
(in millions, except share and per share data)
2022 Swap excluded from the assessment of effectiveness are amortized out of accumulated other comprehensive income and into interest expense over the life of the April 2022 Swap to maturity on June 1, 2024.
In July 2022, we terminated the April 2022 Swap, resulting in a cash inflow of approximately $
The following table summarizes the total fair values of derivative assets and liabilities and the respective classification in the condensed consolidated balance sheets as of September 30, 2022 and December 31, 2021.
|
|
|
|
Assets (Liabilities) |
|
|||||
|
|
Balance Sheet Classification |
|
September 30, 2022 |
|
|
December 31, 2021 |
|
||
Interest Rate Swap Agreements |
|
|
|
|
|
|
|
|
||
Designated as cash flow hedges |
|
Accrued liabilities and other |
|
$ |
|
|
$ |
( |
) |
|
Designated as cash flow hedges |
|
Derivative instruments |
|
|
|
|
|
( |
) |
|
Designated as cash flow hedges |
|
Prepaid expenses and other current assets |
|
|
|
|
|
|
||
Designated as cash flow hedges |
|
Other assets |
|
|
|
|
|
|
||
|
|
|
|
$ |
|
|
$ |
( |
) |
|
|
|
|
|
|
|
|
|
|
||
Cross-Currency Swap Agreement |
|
|
|
|
|
|
|
|
||
Designated as net investment hedge |
|
Other assets |
|
$ |
|
|
$ |
|
||
|
|
|
|
$ |
|
|
$ |
|
||
The following table presents the effect of our derivative financial instruments on our unaudited condensed consolidated statements of operations. The income effects of our derivative activities are reflected in interest expense.
|
|
Three Months Ended September 30, |
|
|
Nine Months Ended September 30, |
|
||||||||||
|
|
2022 |
|
|
2021 |
|
|
2022 |
|
|
2021 |
|
||||
Total interest expense presented in the statement of operations |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Interest rate swap agreements designated as cash flow hedges |
|
|
( |
) |
|
|
|
|
|
|
|
|
|
|||
Cross-currency swap agreement designated as net investment hedge, amounts excluded from effectiveness testing |
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
( |
) |
Note 9 — Accumulated Other Comprehensive Income (Loss)
Accumulated other comprehensive income (loss) is a separate line within the unaudited condensed consolidated statements of equity that reports our cumulative income (loss) that has not been reported as part of net income (loss).
|
|
September 30, 2022 |
|
|||||||||
|
|
Gross Balance |
|
|
Tax Effect |
|
|
Net Balance |
|
|||
Foreign currency translation |
|
$ |
( |
) |
|
$ |
|
|
$ |
( |
) |
|
Unrealized gain (loss) on interest rate swaps |
|
|
|
|
|
( |
) |
|
|
|
||
Unrealized gain (loss) on cross-currency swap |
|
|
( |
) |
|
|
|
|
|
( |
) |
|
Realized gain (loss) on cross-currency swap |
|
|
|
|
|
( |
) |
|
|
|
||
Total |
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
( |
) |
|
|
December 31, 2021 |
|
|||||||||
|
|
Gross Balance |
|
|
Tax Effect |
|
|
Net Balance |
|
|||
Foreign currency translation |
|
$ |
|
|
$ |
|
|
$ |
|
|||
Unrealized gain (loss) on interest rate swaps |
|
|
( |
) |
|
|
|
|
|
( |
) |
|
Unrealized gain (loss) on cross-currency swap |
|
|
|
|
|
( |
) |
|
|
|
||
Total |
|
$ |
|
|
$ |
|
|
$ |
|
|||
15
Ranpak Holdings Corp.
Notes to Unaudited Condensed Consolidated Financial Statements
(in millions, except share and per share data)
The following table presents the changes in accumulated other comprehensive income (loss) by component:
|
|
Nine Months Ended September 30, 2022 |
|
|||||||||||||||||
|
|
Foreign currency translation |
|
|
Unrealized gain (loss) on interest rate swaps |
|
|
Unrealized gain (loss) on cross-currency swap |
|
|
Realized gain (loss) on cross-currency swap |
|
|
Total |
|
|||||
Beginning balance |
|
$ |
|
|
$ |
( |
) |
|
$ |
|
|
$ |
|
|
$ |
|
||||
Other comprehensive income (loss) before reclassifications |
|
|
( |
) |
|
|
|
|
|
( |
) |
|
|
|
|
|
( |
) |
||
Amounts reclassified from accumulated other comprehensive income (loss) |
|
|
|
|
|
( |
) |
|
|
( |
) |
|
|
|
|
|
( |
) |
||
Ending balance |
|
$ |
( |
) |
|
$ |
|
|
$ |
( |
) |
|
$ |
|
|
$ |
( |
) |
||
Note 10 — Fair Value Measurement
Financial instruments are required to be categorized within a valuation hierarchy based upon the lowest level of input that is significant to the fair value measurement. Assets and liabilities recorded at fair value are measured and classified in accordance with a three-tier fair value hierarchy based on the observability of the inputs available in the market used to measure fair value:
The carrying values of cash and cash equivalents (primarily consisting of bank deposits and a money market fund), accounts receivable and accounts payable approximate their fair values due to the short-term nature of these instruments as of September 30, 2022 and December 31, 2021.
The following table provides the carrying amounts, estimated fair values and the respective fair value measurements of our financial instruments as of September 30, 2022 and December 31, 2021:
|
|
|
|
|
Fair Value Measurements |
|
||||||||||
|
|
Carrying Amount |
|
|
Level 1 |
|
|
Level 2 |
|
|
Level 3 |
|
||||
September 30, 2022 |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Money market fund |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Current and long-term debt |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Interest rate swap agreements |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Cross-currency swap agreement |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
December 31, 2021 |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Money market fund |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Current and long-term debt |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Interest rate swap agreements |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Cross-currency swap agreement |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
The money market fund is valued at net asset value and is considered a Level 1 measurement. The money market fund's carrying value approximates its value fair due to the short-term nature of the investment.
The fair value of outstanding long-term debt is based on prices and other relevant information generated by market transactions involving identical or comparable debt instruments, which represents a Level 2 measurement. Derivative positions are classified within Level 2 of the valuation hierarchy as they are valued using quoted market prices for similar assets and liabilities in active markets.
16
Ranpak Holdings Corp.
Notes to Unaudited Condensed Consolidated Financial Statements
(in millions, except share and per share data)
Note 11 — Income Taxes
For each interim reporting period, we make an estimate of the effective tax rate we expect to be applicable for the full year for our operations. This estimated effective tax rate is used in providing for income taxes on a year-to-date basis.
|
|
Three Months Ended September 30, |
|
Nine Months Ended September 30, |
||||
|
|
2022 |
|
2021 |
|
2022 |
|
2021 |
Effective tax rate |
|
|
|
|
||||
The fluctuation in the effective tax rate over the periods presented above was primarily attributable to a jurisdictional mix of income between periods. The effective tax rate differs from the U.S. federal statutory rate due primarily to benefits derived from stock-based compensation, the U.S. foreign-derived intangible income deduction, tax credits available in the U.S., and income in foreign jurisdictions that are taxed at different rates than the U.S. statutory tax rate.
We are subject to taxation in the United States (federal, state, local) and foreign jurisdictions. As of September 30, 2022, tax years
Pursuant to ASC 740, Income Taxes (“ASC 740”), as of each balance sheet date, we assess our uncertain tax positions to determine whether factors underlying the sustainability assertion have changed. As of September 30, 2022, such factors have not changed and no additional adjustments are necessary.
Note 12 — Leases
We lease automobiles, machinery, equipment, warehouses, and office buildings. We account for these leases in accordance with ASC 842 by recording right-of-use assets and lease liabilities. The right-of-use asset represents our right to use underlying assets for the lease term and the lease liability represents our obligation to make lease payments under the leases. We determine if an arrangement is or contains a lease at contract inception and exercise judgment and apply certain assumptions when determining the discount rate, lease term, and lease payments. ASC 842 requires a lessee to record a lease liability based on the discounted unpaid lease payments using the interest rate implicit in the lease or, if the rate cannot be readily determined, the incremental borrowing rate. Generally, we do not have knowledge of the rate implicit in the lease and, therefore, we use the incremental borrowing rate for a lease. The lease term includes the non-cancelable period of the lease plus any additional periods covered by an option to extend that we are reasonably certain to exercise.
Operating leases and finance leases are included in the condensed consolidated balance sheets as follows:
|
|
Classification |
|
September 30, 2022 |
|
|
December 31, 2021 |
|
||
Lease assets |
|
|
|
|
|
|
|
|
||
Operating lease right-of-use assets, net |
|
Assets |
|
$ |
|
|
$ |
|
||
|
Property, plant, and equipment, net |
|
|
|
|
|
|
|||
Total lease assets |
|
|
|
$ |
|
|
$ |
|
||
Lease liabilities |
|
|
|
|
|
|
|
|
||
Operating lease liabilities, current |
|
Current liabilities |
|
$ |
|
|
$ |
|
||
Operating lease liabilities, non-current |
|
Non-current liabilities |
|
|
|
|
|
|
||
|
Current portion of long-term debt |
|
|
|
|
|
|
|||
|
Long-term debt |
|
|
|
|
|
|
|||
Total lease liabilities |
|
|
|
$ |
|
|
$ |
|
||
The components of lease costs, which are included in income from operations in our condensed consolidated statements of operations and comprehensive income (loss), were as follows:
17
Ranpak Holdings Corp.
Notes to Unaudited Condensed Consolidated Financial Statements
(in millions, except share and per share data)
|
|
Three Months Ended September 30, |
|
|
Nine Months Ended September 30, |
|
||||||||||
|
|
2022 |
|
|
2021 |
|
|
2022 |
|
|
2021 |
|
||||
Operating leases |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Operating lease costs |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Variable lease costs |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Total operating lease costs |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Finance leases |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Amortization of right-of-use asset |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Interest on finance lease liabilities |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Total finance lease costs |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Maturities of lease liabilities as of September 30, 2022 are as follows:
|
|
Operating |
|
|
Finance |
|
|
Total |
|
|||
2022 |
|
$ |
|
|
$ |
|
|
$ |
|
|||
2023 |
|
|
|
|
|
|
|
|
|
|||
2024 |
|
|
|
|
|
|
|
|
|
|||
2025 |
|
|
|
|
|
|
|
|
|
|||
2026 |
|
|
|
|
|
|
|
|
|
|||
2027 and Thereafter |
|
|
|
|
|
|
|
|
|
|||
Total lease payments |
|
|
|
|
|
|
|
|
|
|||
Less lease interest |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
Total lease liabilities |
|
$ |
|
|
$ |
|
|
$ |
|
|||
Additional information related to leases is presented as follows:
|
|
September 30, 2022 |
|
December 31, 2021 |
Operating leases |
|
|
|
|
Weighted average remaining lease term |
|
|
||
Weighted average discount rate |
|
|
||
Finance leases |
|
|
|
|
Weighted average remaining lease term |
|
|
||
Weighted average discount rate |
|
|
|
|
Three Months Ended September 30, |
|
|
Nine Months Ended September 30, |
|
||||||||||
|
|
2022 |
|
|
2021 |
|
|
2022 |
|
|
2021 |
|
||||
Cash paid for amounts included in the measurement of lease liabilities |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Operating cash flows from operating leases |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Operating cash flows from finance leases |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Financing cash flows from finance leases |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Total cash paid |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Leased assets obtained in exchange for new operating lease liabilities |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Leased assets obtained in exchange for new finance lease liabilities |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Right-of-use assets obtained in exchange for lease liabilities |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
As previously noted, our machine lease revenue is accounted for under ASC 842 and is recognized on a straight-line basis over the terms of the agreements with customers, which have durations of less than one year.
Note 13 — Commitments and Contingencies
Litigation
We are subject to legal proceedings and claims that arise in the ordinary course of our business. Management evaluates each claim and provides for potential loss when the claim is probable to be paid and reasonably estimable. While adverse decisions in certain of these litigation matters, claims and administrative proceedings could have a material effect on a particular period’s results of operations, subject to the uncertainties inherent in estimating future costs for contingent liabilities, management believes that any future accruals with respect to these currently known contingencies would not have a material effect on the financial condition,
18
Ranpak Holdings Corp.
Notes to Unaudited Condensed Consolidated Financial Statements
(in millions, except share and per share data)
liquidity or cash flows of the Company. There are no amounts required to be reflected in these unaudited interim condensed consolidated financial statements related to contingencies for the three and nine months ended September 30, 2022.
Environmental Matters
Our operations are subject to extensive and changing U.S. federal, state and local laws and regulations, as well as the laws of other countries that establish health and environmental quality standards. These standards, among others, relate to air and water pollutants and the management and disposal of hazardous substances and wastes. We are exposed to potential liability for personal injury or property damage caused by any release, spill, exposure or other accident involving such pollutants, substances or wastes. There are no amounts required to be reflected in these unaudited interim consolidated financial statements related to environmental contingencies.
Management believes the Company is in compliance, in all material respects, with environmental laws and regulations and maintains insurance coverage to mitigate exposure to environmental liabilities. Management does not believe any environmental matters will have a material adverse effect on the Company’s future consolidated results of operations, financial position or cash flows.
Guarantees
Note 14 — Stock-Based Compensation
We expense the fair value of grants of various stock-based compensation programs over the vesting period of the awards. Stock compensation expense is recorded in selling, general, and administrative expenses in the condensed consolidated statements of operations. Awards granted are recognized as compensation expense based on the grant date fair value, estimated in accordance with ASC 718, Compensation – Stock Compensation. The grant date fair value is the closing price of our stock on the grant date. Failure to satisfy the threshold service or performance conditions results in the forfeiture of shares. Forfeiture of share awards with service conditions or performance-based restrictions results in a reversal of previously recognized share-based compensation expense so long as the awards were probable of vesting. Stock compensation expense includes actual forfeitures incurred.
The table below summarizes certain data for our stock-based compensation plans:
|
|
Three Months Ended September 30, |
|
|
Nine Months Ended September 30, |
|
||||||||||
|
|
2022 |
|
|
2021 |
|
|
2022 |
|
|
2021 |
|
||||
Stock-based compensation expense |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Tax (expense) benefit for stock-based compensation |
|
|
( |
) |
|
|
|
|
|
|
|
|
|
|||
Stock-based compensation expense, net of tax |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
The Ranpak Holdings Corp. 2019 Omnibus Incentive Plan (the “2019 Plan”) rewards employees and other individuals to perform at their highest level and contribute significantly to the success of the Company. The 2019 Plan is an omnibus plan that may provide these incentives through grants of stock options, stock appreciation rights, restricted stock, restricted stock units (“RSU” or “RSUs”), performance awards, other cash-based awards and other stock-based awards to employees, directors, or consultants of the Company.
At the annual meeting in May 2021, shareholders approved an amendment to the 2019 Plan (the “Amended Plan”) that authorized an additional
2019 Plan |
|
Quantity |
|
|
Maximum allowed for issuance |
|
|
|
|
Awards granted |
|
|
( |
) |
Awards forfeited |
|
|
|
|
Available for future awards |
|
|
|
|
|
|
|
|
|
Awards vested |
|
|
|
|
19
Ranpak Holdings Corp.
Notes to Unaudited Condensed Consolidated Financial Statements
(in millions, except share and per share data)
Restricted Stock Units — RSUs represent a right to receive one share of our common stock that is both nontransferable and forfeitable unless and until certain conditions are satisfied. Typically, RSUs vest ratably over a
Performance-Based Restricted Stock Units — Performance-based restricted stock units (“PRSU” or “PRSUs”) represent a right to receive, to the extent vested and earned, one share of our common stock. Our PRSUs generally follow two forms. One form of PRSU vests over a three-year period with the number of the awards to be earned determined at the end of the initial one-year performance period, based upon attainment of specific business performance goals during such initial one-year performance period. If certain minimum performance levels are not attained in the initial one-year performance period, the awards will be automatically forfeited before vesting. The awards are variable in that PRSUs earned could range from
In connection with the shareholders approving the Amended Plan, certain executive officers and key employees received a special long-term incentive PRSU award (the “2021 LTIP PRSUs”). The 2021 LTIP PRSUs are generally eligible to be earned based on performance against pre-established performance metrics during our 2023, 2024 and 2025 fiscal years. One-third of the 2021 LTIP PRSUs are eligible to be earned and vest on each of January 1, 2024, January 1, 2025, and January 1, 2026 based on the achievement of performance goals during the one-year period immediately preceding the vesting date (each such one-year period, a “2021 LTIP PRSU Measurement Period”), subject to continued employment on each such vesting date. The number of PRSUs eligible to be earned in respect of each such 2021 LTIP PRSU Measurement Period will be equal to one-third of the target number of PRSUs multiplied by a percentage that corresponds to the level of achievement of our performance goals. The awards are variable in that the PRSUs earned could range from
The fair value of our PRSUs is determined on the grant date. Compensation cost for these awards is recognized based on the probability of achievement of the performance-based conditions.
Activity of our RSUs and PRSUs is as follows:
|
|
RSUs |
|
|
PRSUs |
|
||||||||||
|
|
Quantity |
|
|
Weighted Average Grant Date Fair Value |
|
|
Quantity |
|
|
Weighted Average Grant Date Fair Value |
|
||||
Restricted at December 31, 2021 |
|
|
|
|
$ |
|
|
|
|
|
$ |
|
||||
Granted |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Vested |
|
|
( |
) |
|
|
|
|
|
( |
) |
|
|
|
||
Forfeited |
|
|
( |
) |
|
|
|
|
|
( |
) |
|
|
|
||
Outstanding at September 30, 2022 |
|
|
|
|
$ |
|
|
|
|
|
$ |
|
||||
Director Stock Units — Members of the Company’s Board of Directors (“Director(s)”) may elect to receive their quarterly retainer fees in the form of Class A common shares that are covered by an active shelf registration statement. The retainers are paid quarterly, in arrears in the form of cash or stock at the Director’s election, and vest upon issuance. These shares are priced at the closing price of the last business day of the calendar quarter. Additionally, Directors are granted an annual award of RSUs of $
Director Stock Units |
|
Quantity |
|
|
Weighted Average Grant Date Fair Value |
|
||
Balance at December 31, 2021 |
|
|
|
|
$ |
|
||
Granted |
|
|
|
|
|
|
||
Vested |
|
|
( |
) |
|
|
|
|
Balance at September 30, 2022 |
|
|
|
|
$ |
|
||
20
Ranpak Holdings Corp.
Notes to Unaudited Condensed Consolidated Financial Statements
(in millions, except share and per share data)
Note 15 — Earnings (Loss) per Share
Basic earnings (loss) per share (“EPS”) is computed by dividing net income (loss) available to common stockholders by the weighted-average number of shares of common stock outstanding during the period, excluding the effects of any potentially dilutive securities. Diluted EPS gives effect to the potential dilution, if any, that could occur if securities or other contracts to issue common stock were exercised or converted into common stock, using the more dilutive of the two-class method or if-converted method. Diluted EPS excludes potential shares of common stock if their effect is anti-dilutive. If there is a net loss in any period, basic and diluted EPS are computed in the same manner.
The two-class method determines net income (loss) per common share for each class of common stock and participating securities according to dividends declared or accumulated and participation rights in undistributed earnings. The two-class method requires income available to common shareholders for the period to be allocated between different classes of common stock and participating securities based upon their respective rights to receive dividends as if all income for the period had been distributed. We apply the two-class method for EPS when computing net income (loss) per Class A and Class C common shares.
As of September 30, 2022, we have not issued any instruments that are considered to be participating securities.
|
|
Three Months Ended September 30, |
|
|
Nine Months Ended September 30, |
|
||||||||||
|
|
2022 |
|
|
2021 |
|
|
2022 |
|
|
2021 |
|
||||
Numerator: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Net loss |
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
( |
) |
Net loss attributable to common stockholders for basic and diluted EPS |
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
( |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Denominator: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Basic weighted average common shares outstanding |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Dilutive effect of assumed vesting of RSUs and PRSUs |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Dilutive effect of Class A and Class C earnout shares |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Diluted weighted average common shares outstanding |
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Loss per share attributable to common stockholders |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Basic |
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
|
|
Diluted |
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Two-class method: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Class A Common Stock |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Basic weighted average common shares outstanding |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Dilutive effect of assumed vesting of RSUs and PRSUs |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Dilutive effect of Class A earnout shares |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Diluted weighted average common shares outstanding |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Proportionate share of net loss |
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
( |
) |
Class A – basic earnings (loss) per share |
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
|
|
Class A – diluted earnings (loss) per share |
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Class C Common Stock |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Basic weighted average common shares outstanding |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Dilutive effect of assumed vesting of RSUs and PRSUs |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
Dilutive effect of Class C earnout shares |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Diluted weighted average common shares outstanding |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Proportionate share of net loss |
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
|
|
Class C – basic earnings (loss) per share |
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
|
|
Class C – diluted earnings (loss) per share |
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
|
|
The dilutive effect of
|
|
Three Months Ended September 30, |
|
|
Nine Months Ended September 30, |
|
||||||||||
|
|
2022 |
|
|
2021 |
|
|
2022 |
|
|
2021 |
|
||||
RSUs and PRSUs |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Total antidilutive securities |
|
|
|
|
|
|
|
|
|
|
|
|
||||
21
Ranpak Holdings Corp.
Notes to Unaudited Condensed Consolidated Financial Statements
(in millions, except share and per share data)
Note 16 — Transactions with Related Parties
On June 3, 2019, upon the closing of Ranpak’s business combination with One Madison Corporation, Ranpak entered into a shared services agreement (the “Shared Services Agreement”) with One Madison Group LLC (the “Sponsor”), pursuant to which the Sponsor may provide, or cause to be provided, certain services to Ranpak. The Shared Services Agreement provides for a broad array of potential services, including administrative and “back office” or corporate-type services and requires Ranpak to indemnify the Sponsor in connection with the services provided by the Sponsor to Ranpak. Total fees under the agreement were $
Note 17 — Shareholders' Equity
On July 26, 2022, the Directors authorized a general share repurchase program of the Company’s Class A common stock of up to $
22
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
Cautionary Note Regarding Forward-Looking Statements
This Quarterly Report on Form 10-Q contains “forward-looking statements” within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Statements that are not historical facts are forward-looking statements. Our forward-looking statements include, but are not limited to, statements regarding our or our management team’s expectations, hopes, beliefs, intentions or strategies regarding the future. In addition, any statements that refer to estimates, projections, forecasts or other characterizations of future events or circumstances, including any underlying assumptions, are forward-looking statements. The words “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “forecast,” “intend,” “may,” “might,” “plan,” “possible,” “potential,” “predict,” “project,” “should,” “would” and similar expressions may identify forward-looking statements, but the absence of these words does not mean that a statement is not forward-looking.
The forward-looking statements contained in this Quarterly Report on Form 10-Q are based on our current expectations and beliefs concerning future developments and their potential effects on us taking into account information currently available to us. There can be no assurance that future developments affecting us will be those that we have anticipated. These forward-looking statements involve a number of risks, uncertainties (some of which are beyond our control) or other assumptions that may cause actual results or performance to be materially different from those expressed or implied by these forward-looking statements. These risks include, but are not limited to:
Should one or more of these risks or uncertainties materialize, they could cause our actual results to differ materially from the forward-looking statements. We are not undertaking any obligation to update or revise any forward-looking statements whether as a result of new information, future events or otherwise. You should not take any statement regarding past trends or activities as a representation that the trends or activities will continue in the future. Accordingly, you should not put undue reliance on these statements.
Management’s Discussion and Analysis of Financial Condition and Results of Operations
The following discussion and analysis is intended to help the reader understand our business, financial condition, results of operations, liquidity and capital resources. You should read this discussion in conjunction with the sections entitled “Risk Factors” and “Forward-Looking Statements,” and our financial statements and related notes included in this Quarterly Report on Form 10-Q as well as the section entitled, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” of Ranpak included in our 2021 10-K, filed with the SEC on February 28, 2022. Capitalized terms used and not defined herein have the meanings disclosed elsewhere in the Quarterly Report on Form 10-Q.
The following discussion contains forward-looking statements that reflect future plans, estimates, beliefs and expected performance. The forward-looking statements are dependent upon events, risks and uncertainties that may be outside of the Company's control. The Company’s actual results could differ materially from those discussed in these forward-looking statements. Factors that could cause or contribute to such differences include, but are not limited to, those identified below and those discussed in the sections titled “Risk
23
Factors” and “Cautionary Note Regarding Forward-Looking Statements” included elsewhere in this Quarterly Report on Form 10-Q.
Overview
Ranpak is a leading provider of environmentally sustainable, systems-based, product protection solutions for e-commerce and industrial supply chains. Since inception in 1972, we have delivered high quality protective packaging solutions, while maintaining commitment to environmental sustainability. We assemble our PPS systems and provide the PPS systems and paper consumables to customers, which include direct end-users and our network of exclusive paper packaging solution distributors, who in turn place the systems with and sell paper to commercial and industrial users for the conversion of paper into packaging materials. We operate manufacturing facilities in the United States and Europe. For our Automation product lines, we currently have dedicated facilities in Virginia and the Netherlands. R Squared Robotics, a division of Ranpak, uses three-dimensional computer vision and artificial intelligence technologies to improve end-of-line packaging and logistics functions. We are currently building one facility in the Netherlands, with dedicated space for Automation functions, and renovating or building two facilities in the United States, one of which will be primarily dedicated to Automation functions. We also maintain sales and administrative offices in Brazil, France, China, Japan, and Singapore. We are a global business that generated approximately 64.9% of our 2021 net revenue outside of the United States.
As of September 30, 2022, we had an installed base of approximately 138.6 thousand PPS systems serving a diverse set of distributors and end-users. We generated net revenue of $247.1 million and $274.8 million in the nine months ended September 30, 2022 and 2021, respectively.
Effect of Currency Fluctuations. As a result of the geographic diversity of our operations, we are exposed to the effects of currency translation, which has affected the comparability of our results of operations between the periods presented in this report and may affect the comparability of our results of operations in future periods. Currency transaction exposure results when we generate net revenue in one currency at one time and incur expenses in another currency at another time, or when we realize gain or loss on intercompany transfers. While we seek to limit currency transaction exposure by matching the currencies in which we incur sales and expenses, we may not always be able to do so.
In addition, we are subject to currency translation exposure because the operations of our subsidiaries are measured in their functional currency which is the currency of the primary economic environment in which the subsidiary operates. Any currency balances that are denominated in currencies other than the functional currency of the subsidiary are re-measured into the functional currency, with the resulting gain or loss recorded in the foreign currency (gains) losses line-item in our Unaudited Condensed Consolidated Statements of Operations. In turn, subsidiary income statement balances that are denominated in currencies other than USD are translated into USD, our functional currency, in consolidation using the average exchange rate in effect during each fiscal month during the period, with any related gain or loss recorded as foreign currency translation adjustments in other comprehensive income (loss). The assets and liabilities of subsidiaries that use functional currencies other than the USD are translated into USD in consolidation using period end exchange rates, with the effects of foreign currency translation adjustments included in accumulated other comprehensive income.
We previously hedged some of our exposure to foreign currency translation with cross-currency swaps and may consider entering into such agreements in future periods. Significant currency fluctuations could impact the comparability of results between periods, while such fluctuations coupled with material mismatches in net revenue and expenses could also adversely impact our cash flows. See “Qualitative and Quantitative Disclosures About Market Risk.”
Seasonality. Approximately 33.8% of our net revenue in 2021, either directly or to distributors, was destined for end-users in the e-commerce sectors, whose businesses frequently follow traditional retail seasonal trends, including a concentration of sales in the holiday period in the fourth quarter. Our results tend to follow similar patterns, with the highest net revenue typically recorded in our fourth fiscal quarter and the slowest sales in our first fiscal quarter of each fiscal year. We expect this seasonality to continue in the future and, as a result, our results of operations between fiscal quarters in a given year may not be directly comparable.
Impact of the COVID-19 Pandemic. The COVID-19 pandemic has resulted in changes in market and economic conditions around the world. We believe that these impacts are not unique to us and that our industry competitors have been impacted in a similar fashion. We are deemed an essential business under the Memorandum on Identification of Essential Critical Infrastructure Workers During COVID-19 Response issued by the United States Cybersecurity and Infrastructure Security Agency and pursuant to state decisions in states where our domestic production and distribution facilities are located. We continue to operate our production and distribution facilities, both domestically and internationally, albeit subject to measures designed to promote a safe operating environment. While we have experienced limited delays in receiving certain supplies we use to assemble our packaging systems, to date, these measures have not materially impacted the cost of producing and distributing our products, the cost and availability of raw
24
materials and components, and we have encountered minimal disruption in our ability to fulfill customer orders. We continue to monitor our liquidity position closely and have extended payment terms to certain of our customers when necessary. While we do not currently expect COVID-19 to have a material impact on our business, results of operations, financial condition or liquidity, at the time of this filing, we cannot predict the extent to which we will ultimately be impacted due to the uncertain nature and duration of the COVID-19 pandemic. See “Risk Factors” in the 2021 10-K. We will continue to evaluate the nature and extent of the impact to our business, results of operations, financial condition, and cash flows.
Key Performance Indicators and Other Factors Affecting Performance
We use the following key performance indicators and monitor the following other factors to analyze our business performance, determine financial forecasts, and help develop long-term strategic plans.
PPS Systems Base — We closely track the number of PPS systems installed with end-users as it is a leading indicator of underlying business trends and near-term and ongoing net sales expectations. Our installed base of PPS systems also drives our capital expenditure budgets. The following table presents our installed base of PPS systems by product line as of September 30, 2022 and 2021:
|
|
September 30, 2022 |
|
|
September 30, 2021 |
|
|
Change |
|
|
% Change |
|
||||
PPS Systems |
|
(in thousands) |
|
|
|
|
||||||||||
Cushioning machines |
|
|
35.4 |
|
|
|
34.9 |
|
|
|
0.5 |
|
|
|
1.4 |
|
Void-Fill machines |
|
|
81.2 |
|
|
|
75.1 |
|
|
|
6.1 |
|
|
|
8.1 |
|
Wrapping machines |
|
|
22.0 |
|
|
|
19.2 |
|
|
|
2.8 |
|
|
|
14.6 |
|
Total |
|
|
138.6 |
|
|
|
129.2 |
|
|
|
9.4 |
|
|
|
7.3 |
|
Paper and Other Costs. Paper is a key component of our cost of goods sold and paper costs can fluctuate significantly between periods. We purchase both 100% virgin and 100% recycled paper, as well as blends, from various suppliers for conversion into the paper consumables we sell. The cost of paper supplies is our largest input cost, and we historically have negotiated supply and pricing arrangements with most of our paper suppliers annually, with a view towards mitigating fluctuations in paper cost. Nevertheless, as paper is a commodity, its price on the open market, and in turn the prices we negotiate with suppliers at a given point in time, can fluctuate significantly, and is affected by several factors outside of our control, including supply and demand and the cost of other commodities that are used in the manufacture of paper, including wood, energy and chemicals. The market for our solutions is competitive and it may be difficult to pass on increases in paper prices to our customers immediately, or at all, which has in the past, and could in the future, adversely affect our operating results. In 2021 and 2022, global inflation and other macroeconomic factors, including COVID-19 and the conflict in Ukraine, have contributed to the increases in the cost of paper. Further, the conflict in Ukraine has caused certain headwinds, including (i) increased energy costs, particularly in Europe; (ii) shipping variabilities due to truck driver shortages; (iii) increased pricing for paper products as a result of decreased availability of paper products previously sourced from Russian paper mills; and (iv) increased shipping times for paper products sourced from Russian paper mills. In the third quarter of 2022, we eliminated the last of our paper products sourced from Russia. We are beginning to see stabilization of inflationary conditions regarding paper in North America, however, inflationary pricing conditions in Europe remain unsteady, primarily due to the volatility in energy markets. Where we can, we will look to pass these increased market costs on to our customers to mitigate the impact of these costs. We are unable to predict our ability to pass these costs on to our customers and how much of these increases we will be able to pass on to our customers. As such, we expect some pressure on our gross margin in the medium term relative to our historical margin profile.
Results of Operations
The following tables set forth our results of operations for the three and nine months ended September 30, 2022 and 2021 with line items presented in millions of dollars.
Our condensed consolidated financial statements are prepared in accordance with GAAP. We have, however, also presented below Earnings Before Interest, Taxes, Depreciation and Amortization (“EBITDA”) and adjusted EBITDA (“AEBITDA”), which are non-GAAP financial measures. We have included EBITDA and AEBITDA because they are key measures used by our management and Board of Directors to understand and evaluate our operating performance and trends, to prepare and approve our annual budget and to develop short- and long-term operational plans. In particular, the exclusion of certain expenses in calculating EBITDA and AEBITDA can provide a useful measure for period-to-period comparisons of our primary business operations. Adjusting AEBITDA for comparability for constant currency also assists in this comparison as it allows a better insight into the performance of our businesses that operate in currencies other than our reporting currency. Before consolidation, our Europe/Asia financial data is derived in Euros. To calculate the adjustment that we apply to present AEBITDA on a constant currency basis, we multiply this Euro-derived data by 1.15 to reflect an exchange rate of 1 Euro to 1.15 USD, which we believe is a reasonable exchange rate to use to give a
25
stable depiction of the business without currency fluctuations between periods, to calculate Europe/Asia data in constant currency USD. An exchange rate of 1.15 approximates the average exchange rate of the Euro to USD over the past five years. We also present non-GAAP constant currency net revenue and derive it in the same manner. We believe that EBITDA and AEBITDA provide useful information to investors and others in understanding and evaluating the Company’s operating results in the same manner as our management and Board of Directors.
However, EBITDA and AEBITDA have limitations as analytical tools, and you should not consider them in isolation or as substitutes for analysis of our results as reported under GAAP. In particular, EBITDA and AEBITDA should not be viewed as substitutes for, or superior to, net income (loss) prepared in accordance with GAAP as a measure of profitability or liquidity. Some of these limitations are:
EBITDA — EBITDA is a non-GAAP financial measure that we calculate as net income (loss), adjusted to exclude: benefit from (provision for) income taxes; interest expense; and depreciation and amortization.
AEBITDA — AEBITDA is a non-GAAP financial measure that we present on a constant currency basis and calculate as net income (loss), adjusted to exclude: benefit from (provision for) income taxes; interest expense; depreciation and amortization; stock-based compensation expense; and, in certain periods, certain other income and expense items; as further adjusted to reflect the performance of the business on a constant currency basis.
In addition, in our discussion below, we include certain other unaudited, non-GAAP constant currency data for the three and nine months ended September 30, 2022 and 2021. This data is based on our historical financial statements included elsewhere in this Quarterly Report on Form 10-Q, adjusted (where applicable) to reflect a constant currency presentation between periods for the convenience of readers. We reconcile this data to our GAAP data for the same period under “Presentation and Reconciliation of GAAP to Non-GAAP Measures” for the three and nine months ended September 30, 2022 and 2021.
26
Comparison of Third Quarter of 2022 to Third Quarter of 2021
|
|
Three Months Ended September 30, |
|
|||||||||||||
|
|
2022 |
|
|
% Net revenue |
|
|
2021 |
|
|
% Net revenue |
|
||||
Net revenue |
|
$ |
77.8 |
|
|
― |
|
|
$ |
97.1 |
|
|
― |
|
||
Cost of goods sold |
|
|
53.4 |
|
|
|
68.6 |
|
|
|
59.1 |
|
|
|
60.9 |
|
Gross profit |
|
|
24.4 |
|
|
|
31.4 |
|
|
|
38.0 |
|
|
|
39.1 |
|
Selling, general and administrative expenses |
|
|
26.8 |
|
|
|
34.4 |
|
|
|
27.1 |
|
|
|
27.9 |
|
Depreciation and amortization expense |
|
|
7.8 |
|
|
|
10.0 |
|
|
|
8.7 |
|
|
|
9.0 |
|
Other operating expense (income), net |
|
|
1.5 |
|
|
|
1.9 |
|
|
|
(0.1 |
) |
|
|
(0.1 |
) |
Income (loss) from operations |
|
|
(11.7 |
) |
|
|
(15.0 |
) |
|
|
2.3 |
|
|
|
2.4 |
|
Interest expense |
|
|
5.3 |
|
|
|
6.8 |
|
|
|
5.5 |
|
|
|
5.7 |
|
Foreign currency gain |
|
|
(1.2 |
) |
|
|
(1.5 |
) |
|
|
(1.5 |
) |
|
|
(1.5 |
) |
Other non-operating income, net |
|
|
(4.0 |
) |
|
|
(5.1 |
) |
|
|
- |
|
|
|
- |
|
Loss before income tax benefit |
|
|
(11.8 |
) |
|
|
(15.2 |
) |
|
|
(1.7 |
) |
|
|
(1.8 |
) |
Income tax benefit |
|
|
(3.1 |
) |
|
|
(4.0 |
) |
|
|
(0.3 |
) |
|
|
(0.3 |
) |
Net loss |
|
$ |
(8.7 |
) |
|
|
(11.2 |
) |
|
$ |
(1.4 |
) |
|
|
(1.4 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Non-GAAP |
|
|
|
|
|
|
|
|
|
|
|
|
||||
EBITDA |
|
$ |
9.6 |
|
|
|
|
|
$ |
22.3 |
|
|
|
|
||
AEBITDA (Constant Currency) |
|
$ |
16.6 |
|
|
|
|
|
$ |
28.5 |
|
|
|
|
||
Net Revenue
The following tables and the discussion that follows compare our net revenue by geographic region and by product line for the third quarter of 2022 and 2021 on a GAAP basis and on a non-GAAP constant currency basis as described above and in the discussion below. See also “Presentation and Reconciliation of GAAP to Non-GAAP Measures” for further detail:
|
|
Three Months Ended September 30, |
|
|||||||||||||
|
|
2022 |
|
|
% Net revenue |
|
|
2021 |
|
|
% Net revenue |
|
||||
North America |
|
$ |
33.4 |
|
|
|
42.9 |
|
|
$ |
37.3 |
|
|
|
38.4 |
|
Europe/Asia |
|
|
44.4 |
|
|
|
57.1 |
|
|
|
59.8 |
|
|
|
61.6 |
|
Net revenue |
|
$ |
77.8 |
|
|
|
100.0 |
|
|
$ |
97.1 |
|
|
|
100.0 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Cushioning machines |
|
$ |
33.4 |
|
|
|
42.9 |
|
|
$ |
40.9 |
|
|
|
42.1 |
|
Void-Fill machines |
|
|
31.3 |
|
|
|
40.2 |
|
|
|
39.5 |
|
|
|
40.7 |
|
Wrapping machines |
|
|
9.6 |
|
|
|
12.3 |
|
|
|
12.6 |
|
|
|
13.0 |
|
Other |
|
|
3.5 |
|
|
|
4.6 |
|
|
|
4.1 |
|
|
|
4.2 |
|
Net revenue |
|
$ |
77.8 |
|
|
|
100.0 |
|
|
$ |
97.1 |
|
|
|
100.0 |
|
|
|
Non-GAAP Constant Currency |
|
|||||||||||||||||||||
|
|
Three Months Ended September 30, |
|
|||||||||||||||||||||
|
|
2022 |
|
|
% Net revenue |
|
|
2021 |
|
|
% Net revenue |
|
|
$ Change |
|
|
% Change |
|
||||||
North America |
|
$ |
33.4 |
|
|
|
39.7 |
|
|
$ |
37.3 |
|
|
|
39.0 |
|
|
$ |
(3.9 |
) |
|
|
(10.5 |
) |
Europe/Asia |
|
|
50.7 |
|
|
|
60.3 |
|
|
|
58.3 |
|
|
|
61.0 |
|
|
|
(7.6 |
) |
|
|
(13.0 |
) |
Net revenue |
|
$ |
84.1 |
|
|
|
100.0 |
|
|
$ |
95.6 |
|
|
|
100.0 |
|
|
$ |
(11.5 |
) |
|
|
(12.0 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Cushioning machines |
|
$ |
36.6 |
|
|
|
43.5 |
|
|
$ |
40.2 |
|
|
|
42.1 |
|
|
$ |
(3.6 |
) |
|
|
(9.0 |
) |
Void-Fill machines |
|
|
33.5 |
|
|
|
39.8 |
|
|
|
39.1 |
|
|
|
40.9 |
|
|
|
(5.6 |
) |
|
|
(14.3 |
) |
Wrapping machines |
|
|
9.9 |
|
|
|
11.8 |
|
|
|
12.5 |
|
|
|
13.1 |
|
|
|
(2.6 |
) |
|
|
(20.8 |
) |
Other |
|
|
4.1 |
|
|
|
4.9 |
|
|
|
3.8 |
|
|
|
3.9 |
|
|
|
0.3 |
|
|
|
7.9 |
|
Net revenue |
|
$ |
84.1 |
|
|
|
100.0 |
|
|
$ |
95.6 |
|
|
|
100.0 |
|
|
$ |
(11.5 |
) |
|
|
(12.0 |
) |
27
Net revenue for the third quarter of 2022 was $77.8 million compared to net revenue of $97.1 million in the third quarter of 2021, a decrease of $19.3 million or 19.9% year over year. Net revenue was negatively impacted by decreases in cushioning, void-fill, and wrapping. In addition to currency headwinds, which contributed 7.6 points of pressure, revenue from all product categories was negatively affected by lower economic activity; lower e-Commerce use due to the opening up of economies; the impact inflationary pressures are having on consumer and corporate budgets; and tightening inventory management in response to uncertainties in the European economic environment. The impact of the Omicron variant of COVID-19 that previously limited customer visits has waned through the third quarter of 2022. Cushioning decreased $7.5 million, or 18.3%, to $33.4 million from $40.9 million; void-fill decreased $8.2 million, or 20.8%, to $31.3 million from $39.5 million; wrapping decreased $3.0 million, or 23.8%, to $9.6 million from $12.6 million; and other sales decreased $0.6 million, or 14.6%, to $3.5 million from $4.1 million for the third quarter of 2022 compared to the third quarter of 2021. Other net revenue includes automated box sizing equipment and non-paper revenue from packaging systems installed in the field, such as systems accessories. The decrease in net revenue is quantified by a decrease in the volume of sales of our paper consumable products of approximately 26.8 percentage points (“pp”), partially offset by a 14.4 pp increase in the price or mix of our paper consumable products, and an increase of 0.3 pp in sales of automated box sizing equipment.
Net revenue in North America for the third quarter of 2022 totaled $33.4 million compared to net revenue in North America of $37.3 million in the third quarter of 2021. The decrease of $3.9 million, or 10.5%, was primarily attributable to decreases in wrapping and void-fill sales, partially offset by increases in cushioning sales.
Net revenue in Europe/Asia for the third quarter of 2022 totaled $44.4 million compared to net revenue in Europe/Asia of $59.8 million in the third quarter of 2021. The decrease of $15.4 million, or 25.8%, was driven by lower cushioning, void-fill, and wrapping sales as well as currency headwinds. Constant currency net revenue in Europe/Asia was $50.7 million for the third quarter of 2022, a $7.6 million, or 13.0%, decrease from constant currency net revenue of $58.3 million for the third quarter of 2021.
Cost of Goods Sold
Cost of goods sold for the third quarter of 2022 totaled $53.4 million, a decrease of $5.7 million, or 9.6%, compared to $59.1 million in the third quarter of 2021. The change was primarily due to lower sales volumes and a decrease in depreciation of $1.5 million over the prior year. Additionally, currency rate fluctuations accounted for approximately 8.6% of the decrease over prior year. We continued to experience increased manufacturing input costs during the third quarter of 2022, primarily driven by increases in the price of paper in North America and Europe. This resulted in our implementation of additional pricing actions in the third quarter of 2022.
Selling, General and Administrative Expenses (“SG&A”)
SG&A for the third quarter of 2022 was $26.8 million, a decrease of $0.3 million, or 1.1%, from $27.1 million in the third quarter of 2021. The change in SG&A was primarily due to decreased headcount and associated compensation. Additionally, currency rate fluctuations accounted for approximately 4.8% of the decrease over prior year.
Depreciation and Amortization
Depreciation and amortization expenses for the third quarter of 2022 were $7.8 million, a decrease of $0.9 million, or 10.3%, from $8.7 million in the third quarter of 2021 primarily due to a decrease in depreciation of computer software. Additionally, currency rate fluctuations accounted for approximately 4.6% of the decrease over prior year.
Other Operating Expense (Income), Net
Other operating expense, net for the third quarter of 2022 was $1.5 million, a change of $1.6 million from income of $0.1 million in the third quarter of 2021. The change in other operating expense (income), net was primarily due to an increase in research and development costs.
Interest Expense
Interest expense for the third quarter of 2022 was $5.3 million, a decrease of $0.2 million, or 3.6%, from $5.5 million in the third quarter of 2021. The change was due to a decrease in debt in the third quarter of 2022 compared to the third quarter of 2021. Additionally, currency rate fluctuations accounted for approximately 1.8% of the decrease over prior year.
Foreign Currency Gain
Foreign currency gain for the third quarter of 2022 was $1.2 million, a change of $0.3 million, or 20.0%, from foreign currency gain of $1.5 million in the third quarter of 2021 due to the volatility in Euro exchange rates compared to USD.
28
Other Non-Operating Expense (Income), Net
Other non-operating income, net for the third quarter of 2022 was $3.9 million and represents the unrealized gain on our investment in a small private business. Other non-operating income, net was not material for the third quarter of 2021.
Income Tax Benefit
Income tax benefit for the third quarter of 2022 was $3.1 million, or an effective tax rate of 26.8%. Income tax benefit was $0.3 million in the third quarter of 2021, or an effective tax rate of 16.1%. The fluctuation in the effective tax rate between periods was primarily attributable to a jurisdictional mix of income. The effective tax rate differs from the U.S. federal statutory rate due primarily to benefits derived from stock-based compensation, the U.S. foreign derived intangible income deduction, tax credits available in the U.S., and income in foreign jurisdictions that are taxed at different rates than the U.S. statutory tax rate.
Net Loss
Net loss for the third quarter of 2022 increased $7.3 million to $8.7 million from a net loss of $1.4 million in the third quarter of 2021. The change was due to the reasons discussed above.
EBITDA and AEBITDA
EBITDA for the third quarter of 2022 was $9.6 million, a decrease of $12.7 million, or 57.0%, compared to $22.3 million in the third quarter of 2021. Adjusting for one-time costs, AEBITDA for the third quarter of 2022 and 2021 totaled $16.6 million and $28.5 million, respectively, a decrease of $11.9 million, or 41.8%.
Comparison of Nine Months Ended September 30, 2022 to Nine Months Ended September 30, 2021
|
|
Nine Months Ended September 30, |
|
|||||||||||||
|
|
2022 |
|
|
% Net revenue |
|
|
2021 |
|
|
% Net revenue |
|
||||
Net revenue |
|
$ |
247.1 |
|
|
― |
|
|
$ |
274.8 |
|
|
― |
|
||
Cost of goods sold |
|
|
169.8 |
|
|
|
68.7 |
|
|
|
164.8 |
|
|
|
60.0 |
|
Gross profit |
|
|
77.3 |
|
|
|
31.3 |
|
|
|
110.0 |
|
|
|
40.0 |
|
Selling, general and administrative expenses |
|
|
86.8 |
|
|
|
35.1 |
|
|
|
70.8 |
|
|
|
25.8 |
|
Depreciation and amortization expense |
|
|
24.0 |
|
|
|
9.7 |
|
|
|
26.1 |
|
|
|
9.5 |
|
Other operating expense, net |
|
|
3.4 |
|
|
|
1.4 |
|
|
|
2.0 |
|
|
|
0.7 |
|
Income (loss) from operations |
|
|
(36.9 |
) |
|
|
(14.9 |
) |
|
|
11.1 |
|
|
|
4.0 |
|
Interest expense |
|
|
15.2 |
|
|
|
6.2 |
|
|
|
17.1 |
|
|
|
6.2 |
|
Foreign currency gain |
|
|
(4.1 |
) |
|
|
(1.7 |
) |
|
|
(3.9 |
) |
|
|
(1.4 |
) |
Other non-operating income, net |
|
|
(4.0 |
) |
|
|
(1.6 |
) |
|
|
- |
|
|
|
- |
|
Loss before income tax benefit |
|
|
(44.0 |
) |
|
|
(17.8 |
) |
|
|
(2.1 |
) |
|
|
(0.8 |
) |
Income tax benefit |
|
|
(9.9 |
) |
|
|
(4.0 |
) |
|
|
(1.8 |
) |
|
|
(0.7 |
) |
Net loss |
|
$ |
(34.1 |
) |
|
|
(13.8 |
) |
|
$ |
(0.3 |
) |
|
|
(0.1 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Non-GAAP |
|
|
|
|
|
|
|
|
|
|
|
|
||||
EBITDA |
|
$ |
23.9 |
|
|
|
|
|
$ |
69.4 |
|
|
|
|
||
AEBITDA (Constant Currency) |
|
$ |
53.9 |
|
|
|
|
|
$ |
82.1 |
|
|
|
|
||
Net Revenue
The following tables and the discussion that follows compare our net revenue by geographic region and by product line for the nine months ended September 30, 2022 and 2021 on a GAAP basis and on a non-GAAP constant currency basis as described above and in the discussion below. See also “Presentation and Reconciliation of GAAP to Non-GAAP Measures” for further detail:
|
|
Nine Months Ended September 30, |
|
|||||||||||||
|
|
2022 |
|
|
% Net revenue |
|
|
2021 |
|
|
% Net revenue |
|
||||
North America |
|
$ |
98.6 |
|
|
|
39.9 |
|
|
$ |
101.1 |
|
|
|
36.8 |
|
Europe/Asia |
|
|
148.5 |
|
|
|
60.1 |
|
|
|
173.7 |
|
|
|
63.2 |
|
Net revenue |
|
$ |
247.1 |
|
|
|
100.0 |
|
|
$ |
274.8 |
|
|
|
100.0 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Cushioning machines |
|
$ |
107.2 |
|
|
|
43.4 |
|
|
$ |
118.9 |
|
|
|
43.3 |
|
Void-Fill machines |
|
|
97.4 |
|
|
|
39.4 |
|
|
|
109.3 |
|
|
|
39.8 |
|
Wrapping machines |
|
|
30.8 |
|
|
|
12.5 |
|
|
|
36.3 |
|
|
|
13.2 |
|
Other |
|
|
11.7 |
|
|
|
4.7 |
|
|
|
10.3 |
|
|
|
3.7 |
|
Net revenue |
|
$ |
247.1 |
|
|
|
100.0 |
|
|
$ |
274.8 |
|
|
|
100.0 |
|
29
|
|
Non-GAAP Constant Currency |
|
|||||||||||||||||||||
|
|
Nine Months Ended September 30, |
|
|||||||||||||||||||||
|
|
2022 |
|
|
% Net revenue |
|
|
2021 |
|
|
% Net revenue |
|
|
$ Change |
|
|
% Change |
|
||||||
North America |
|
$ |
98.6 |
|
|
|
38.1 |
|
|
$ |
101.1 |
|
|
|
37.7 |
|
|
$ |
(2.5 |
) |
|
|
(2.5 |
) |
Europe/Asia |
|
|
160.4 |
|
|
|
61.9 |
|
|
|
167.0 |
|
|
|
62.3 |
|
|
|
(6.6 |
) |
|
|
(4.0 |
) |
Net revenue |
|
$ |
259.0 |
|
|
|
100.0 |
|
|
$ |
268.1 |
|
|
|
100.0 |
|
|
$ |
(9.1 |
) |
|
|
(3.4 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Cushioning machines |
|
$ |
113.2 |
|
|
|
43.7 |
|
|
$ |
115.5 |
|
|
|
43.1 |
|
|
$ |
(2.3 |
) |
|
|
(2.0 |
) |
Void-Fill machines |
|
|
101.4 |
|
|
|
39.2 |
|
|
|
107.0 |
|
|
|
39.9 |
|
|
|
(5.6 |
) |
|
|
(5.2 |
) |
Wrapping machines |
|
|
31.5 |
|
|
|
12.2 |
|
|
|
35.7 |
|
|
|
13.3 |
|
|
|
(4.2 |
) |
|
|
(11.8 |
) |
Other |
|
|
12.9 |
|
|
|
4.9 |
|
|
|
9.9 |
|
|
|
3.7 |
|
|
|
3.0 |
|
|
|
30.3 |
|
Net revenue |
|
$ |
259.0 |
|
|
|
100.0 |
|
|
$ |
268.1 |
|
|
|
100.0 |
|
|
$ |
(9.1 |
) |
|
|
(3.4 |
) |
Net revenue for the nine months ended September 30, 2022 was $247.1 million compared to net revenue of $274.8 million in the nine months ended September 30, 2021, a decrease of $27.7 million or 10.1%. Net revenue was negatively impacted by currency headwinds, as well as decreases in cushioning, void-fill, wrapping, slightly offset by an increase in other sales. Revenue from all product categories was negatively affected by lower economic activity; lower e-Commerce use due to the opening up of economies; the impact inflationary pressures are having on consumer and corporate budgets; and tightening inventory management in response to uncertainties in the European economic environment. In addition to currency headwinds, revenue from all product categories was negatively affected by our global transition to a new cloud-based ERP system, particularly in the first quarter of 2022. The ERP system transition created certain obstacles that affected operations, including scheduled downtime for cutting over to the new ERP system; processing and shipping inefficiencies associated with using a new ERP system; and, while transitioning to the new ERP system, the delay of pricing increases to help offset input cost pressures. Additionally, the impact of the Omicron variant of COVID-19 limited customer visits in the first quarter of 2022; however, this impact waned during the second and third quarters of 2022. Cushioning decreased $11.7 million, or 9.8%, to $107.2 million from $118.9 million; void-fill decreased $11.9 million, or 10.9%, to $97.4 million from $109.3 million; wrapping decreased $5.5 million, or 15.2%, to $30.8 million from $36.3 million; and other sales increased $1.4 million, or 13.6%, to $11.7 million from $10.3 million, for the nine months ended September 30, 2022 compared to the nine months ended September 30, 2021. The decrease in net revenue is quantified by a decrease in the volume of sales of our paper consumable products of approximately 21.7 pp, offset by a 17.0 pp increase in the price or mix of our paper consumable products, and an increase of 1.2 pp in sales of automated box sizing equipment. Constant currency net revenue was $259.0 million for the nine months ended September 30, 2022, a $9.1 million, or 3.4%, decrease from constant currency net revenue of $268.1 million for the nine months ended September 30, 2021.
Net revenue in North America for the nine months ended September 30, 2022 totaled $98.6 million compared to net revenue in North America of $101.1 million in the nine months ended September 30, 2021. The decrease of $2.5 million, or 2.5%, was primarily attributable to a decrease in void-fill, wrapping, and other sales, partially offset by an increase in cushioning sales.
Net revenue in Europe/Asia for the nine months ended September 30, 2022 totaled $148.5 million compared to net revenue in Europe/Asia of $173.7 million in the nine months ended September 30, 2021. The decrease of $25.2 million, or 14.5%, was driven by lower cushioning, void-fill, and wrapping sales as well as currency headwinds. Constant currency net revenue in Europe/Asia was $160.4 million for the nine months ended September 30, 2022, a $6.6 million, or 4.0%, decrease from constant currency net revenue of $167.0 million for the nine months ended September 30, 2021.
Cost of Goods Sold
Cost of goods sold for the nine months ended September 30, 2022 totaled $169.8 million, an increase of $5.0 million, or 3.0%, compared to $164.8 million in the nine months ended September 30, 2021. The change was primarily due to increased paper costs and an increase in depreciation of $0.4 million over the prior year, partially offset by an approximate 7.5% decrease due to currency rate fluctuations over prior year. We experienced increased manufacturing input costs in 2022, primarily driven by increased paper costs compared to 2021. As previously noted, we implemented additional pricing actions in the third quarter of 2022.
SG&A
SG&A for the nine months ended September 30, 2022 was $86.8 million, an increase of $16.0 million, or 22.6%, from $70.8 million in the nine months ended September 30, 2021. The change in SG&A was largely due to increases in stock compensation expense from the 2021 LTIP PRSUs, increased headcount and associated compensation and ERP system implementation costs, partially offset by an approximate 5.4% decrease due to currency rate fluctuations over prior year. As previously noted, our lower volumes and continued pressure on margins led to headcount reductions and deferral of certain initiatives later in 2022.
30
Depreciation and Amortization
Depreciation and amortization expenses for the nine months ended September 30, 2022 were $24.0 million, a decrease of $2.1 million, or 8.0%, from $26.1 million in the nine months ended September 30, 2021, primarily due to a decrease in depreciation of computer software. Additionally, currency rate fluctuations accounted for approximately 3.1% of the decrease over prior year.
Other Operating Expense, Net
Other operating expense, net, for the nine months ended September 30, 2022 was $3.4 million, an increase of $1.4 million, or 70.0%, from $2.0 million in the nine months ended September 30, 2021. The change in other operating expense (income), net was largely driven by increases in research and development costs in 2022, partially offset by an approximate 5.0% decrease due to currency rate fluctuations over prior year.
Interest Expense
Interest expense for the nine months ended September 30, 2022 was $15.2 million, a decrease of $1.9 million, or 11.1%, from $17.1 million in the nine months ended September 30, 2021. The change was due to a decrease in debt during the nine months ended September 30, 2022 compared to the nine months ended September 30, 2021. Additionally, currency rate fluctuations accounted for approximately 1.8% of the decrease over prior year.
Foreign Currency Gain
Foreign currency gain for the nine months ended September 30, 2022 was $4.1 million, a change of $0.2 million, or 5.1%, from foreign currency gain of $3.9 million in the nine months ended September 30, 2021 due to the volatility in Euro exchange rates compared to USD.
Other Non-Operating Expense (Income), Net
Other non-operating income, net for the nine months ended September 30, 2022 was $3.9 million and represents the unrealized gain on our investment in a small private business. Other non-operating income, net was not material for the nine months ended September 30, 2021.
Income Tax Benefit
Income tax benefit for the nine months ended September 30, 2022 was $9.9 million, or an effective tax rate of 22.6%. Income tax benefit was $1.8 million in the nine months ended September 30, 2021, or an effective tax rate of 89.1%. The fluctuation in the effective tax rate between periods was primarily attributable to a jurisdictional mix of income. The effective tax rate differs from the U.S. federal statutory rate due primarily to benefits derived from stock-based compensation, the U.S. foreign derived intangible income deduction, tax credits available in the U.S., and income in foreign jurisdictions that are taxed at different rates than the U.S. statutory tax rate.
Net Loss
Net loss for the nine months ended September 30, 2022 increased $33.8 million to $34.1 million from net loss of $0.3 million in the nine months ended September 30, 2021. The change was due to the reasons discussed above.
EBITDA and AEBITDA
EBITDA for the nine months ended September 30, 2022 was $23.9 million, a decrease of $45.5 million, or 65.6%, from $69.4 million in the nine months ended September 30, 2021. Adjusting for one-time costs, AEBITDA for the nine months ended September 30, 2022 and 2021 totaled $53.9 million and $82.1 million, respectively, a decrease of $28.2 million, or 34.3%.
Presentation and Reconciliation of GAAP to Non-GAAP Measures
As noted above, we believe that in order to better understand the performance of the Company, providing non-GAAP financial measures to users of our financial information is helpful. We believe presentation of these non-GAAP measures is useful because they are many of the key measures that allow management to evaluate more effectively our operating performance and compare the results of our operations from period to period and against peers without regard to financing methods or capital structure. Management does not consider these non-GAAP measures in isolation or as an alternative to similar financial measures determined in accordance with GAAP. The computations of EBITDA and AEBITDA may not be comparable to other similarly titled measures of other companies. These non-GAAP financial measures should not be considered as alternatives to, or more meaningful than, measures of financial performance as determined in accordance with GAAP or as indicators of operating performance.
31
The following tables and related notes reconcile certain non-GAAP measures, including the non-GAAP constant currency measures, to GAAP information presented in this Quarterly Report on Form 10-Q for the three and nine months ended September 30, 2022 and 2021:
|
|
Three Months Ended September 30, |
|
|
|
|
|
|
|
|||||||
|
|
2022 |
|
|
2021 |
|
|
$ Change |
|
|
% Change |
|
||||
Net revenue |
|
$ |
77.8 |
|
|
$ |
97.1 |
|
|
$ |
(19.3 |
) |
|
|
(19.9 |
) |
Cost of goods sold |
|
|
53.4 |
|
|
|
59.1 |
|
|
|
(5.7 |
) |
|
|
(9.6 |
) |
Gross profit |
|
|
24.4 |
|
|
|
38.0 |
|
|
|
(13.6 |
) |
|
|
(35.8 |
) |
Selling, general and administrative expenses |
|
|
26.8 |
|
|
|
27.1 |
|
|
|
(0.3 |
) |
|
|
(1.1 |
) |
Depreciation and amortization expense |
|
|
7.8 |
|
|
|
8.7 |
|
|
|
(0.9 |
) |
|
|
(10.3 |
) |
Other operating expense (income), net |
|
|
1.5 |
|
|
|
(0.1 |
) |
|
|
1.6 |
|
|
|
(1,600.0 |
) |
Income (loss) from operations |
|
|
(11.7 |
) |
|
|
2.3 |
|
|
|
(14.0 |
) |
|
|
(608.7 |
) |
Interest expense |
|
|
5.3 |
|
|
|
5.5 |
|
|
|
(0.2 |
) |
|
|
(3.6 |
) |
Foreign currency gain |
|
|
(1.2 |
) |
|
|
(1.5 |
) |
|
|
0.3 |
|
|
|
(20.0 |
) |
Other non-operating income, net |
|
|
(4.0 |
) |
|
|
- |
|
|
|
(4.0 |
) |
|
― |
|
|
Loss before income tax benefit |
|
|
(11.8 |
) |
|
|
(1.7 |
) |
|
|
(10.1 |
) |
|
|
594.1 |
|
Income tax benefit |
|
|
(3.1 |
) |
|
|
(0.3 |
) |
|
|
(2.8 |
) |
|
|
933.3 |
|
Net loss |
|
|
(8.7 |
) |
|
|
(1.4 |
) |
|
|
(7.3 |
) |
|
|
521.4 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Depreciation and amortization expense – COS |
|
|
8.3 |
|
|
|
9.8 |
|
|
|
(1.5 |
) |
|
|
(15.3 |
) |
Depreciation and amortization expense – D&A |
|
|
7.8 |
|
|
|
8.7 |
|
|
|
(0.9 |
) |
|
|
(10.3 |
) |
Interest expense |
|
|
5.3 |
|
|
|
5.5 |
|
|
|
(0.2 |
) |
|
|
(3.6 |
) |
Income tax benefit |
|
|
(3.1 |
) |
|
|
(0.3 |
) |
|
|
(2.8 |
) |
|
|
933.3 |
|
EBITDA(1) |
|
|
9.6 |
|
|
|
22.3 |
|
|
|
(12.7 |
) |
|
|
(57.0 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Adjustments(2): |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Unrealized gain translation |
|
|
(1.3 |
) |
|
|
(1.6 |
) |
|
|
0.3 |
|
|
|
(18.8 |
) |
Non-cash impairment losses |
|
|
0.3 |
|
|
|
0.3 |
|
|
|
- |
|
|
|
- |
|
M&A, restructuring, severance |
|
|
0.1 |
|
|
|
0.1 |
|
|
|
- |
|
|
|
- |
|
Amortization of restricted stock units |
|
|
6.7 |
|
|
|
6.9 |
|
|
|
(0.2 |
) |
|
|
(2.9 |
) |
Amortization of cloud-based software implementation costs(3) |
|
|
0.7 |
|
|
|
- |
|
|
|
0.7 |
|
|
― |
|
|
Cloud-based software implementation costs |
|
|
1.7 |
|
|
|
- |
|
|
|
1.7 |
|
|
― |
|
|
Unrealized gain on investment in small private business |
|
|
(3.9 |
) |
|
|
- |
|
|
|
(3.9 |
) |
|
― |
|
|
Other adjustments |
|
|
0.8 |
|
|
|
0.9 |
|
|
|
(0.1 |
) |
|
|
(11.1 |
) |
Constant currency |
|
|
1.9 |
|
|
|
(0.4 |
) |
|
|
2.3 |
|
|
|
(575.0 |
) |
Constant Currency AEBITDA(1) |
|
$ |
16.6 |
|
|
$ |
28.5 |
|
|
$ |
(11.9 |
) |
|
|
(41.8 |
) |
32
|
|
Nine Months Ended September 30, |
|
|
|
|
|
|
|
|||||||
|
|
2022 |
|
|
2021 |
|
|
$ Change |
|
|
% Change |
|
||||
Net revenue |
|
$ |
247.1 |
|
|
$ |
274.8 |
|
|
$ |
(27.7 |
) |
|
|
(10.1 |
) |
Cost of goods sold |
|
|
169.8 |
|
|
|
164.8 |
|
|
|
5.0 |
|
|
|
3.0 |
|
Gross profit |
|
|
77.3 |
|
|
|
110.0 |
|
|
|
(32.7 |
) |
|
|
(29.7 |
) |
Selling, general and administrative expenses |
|
|
86.8 |
|
|
|
70.8 |
|
|
|
16.0 |
|
|
|
22.6 |
|
Depreciation and amortization expense |
|
|
24.0 |
|
|
|
26.1 |
|
|
|
(2.1 |
) |
|
|
(8.0 |
) |
Other operating expense, net |
|
|
3.4 |
|
|
|
2.0 |
|
|
|
1.4 |
|
|
|
70.0 |
|
Income (loss) from operations |
|
|
(36.9 |
) |
|
|
11.1 |
|
|
|
(48.0 |
) |
|
|
(432.4 |
) |
Interest expense |
|
|
15.2 |
|
|
|
17.1 |
|
|
|
(1.9 |
) |
|
|
(11.1 |
) |
Foreign currency gain |
|
|
(4.1 |
) |
|
|
(3.9 |
) |
|
|
(0.2 |
) |
|
|
5.1 |
|
Other non-operating income, net |
|
|
(4.0 |
) |
|
|
- |
|
|
|
(4.0 |
) |
|
― |
|
|
Loss before income tax benefit |
|
|
(44.0 |
) |
|
|
(2.1 |
) |
|
|
(41.9 |
) |
|
|
1,995.2 |
|
Income tax benefit |
|
|
(9.9 |
) |
|
|
(1.8 |
) |
|
|
(8.1 |
) |
|
|
450.0 |
|
Net loss |
|
|
(34.1 |
) |
|
|
(0.3 |
) |
|
|
(33.8 |
) |
|
|
11,266.7 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Depreciation and amortization expense – COS |
|
|
28.7 |
|
|
|
28.3 |
|
|
|
0.4 |
|
|
|
1.4 |
|
Depreciation and amortization expense – D&A |
|
|
24.0 |
|
|
|
26.1 |
|
|
|
(2.1 |
) |
|
|
(8.0 |
) |
Interest expense |
|
|
15.2 |
|
|
|
17.1 |
|
|
|
(1.9 |
) |
|
|
(11.1 |
) |
Income tax benefit |
|
|
(9.9 |
) |
|
|
(1.8 |
) |
|
|
(8.1 |
) |
|
|
450.0 |
|
EBITDA(1) |
|
|
23.9 |
|
|
|
69.4 |
|
|
|
(45.5 |
) |
|
|
(65.6 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Adjustments(2): |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Unrealized gain translation |
|
|
(4.2 |
) |
|
|
(4.2 |
) |
|
|
- |
|
|
|
- |
|
Non-cash impairment losses |
|
|
0.5 |
|
|
|
1.0 |
|
|
|
(0.5 |
) |
|
|
(50.0 |
) |
M&A, restructuring, severance |
|
|
1.7 |
|
|
|
0.4 |
|
|
|
1.3 |
|
|
|
325.0 |
|
Amortization of restricted stock units |
|
|
20.8 |
|
|
|
14.3 |
|
|
|
6.5 |
|
|
|
45.5 |
|
Amortization of cloud-based software implementation costs(3) |
|
|
2.1 |
|
|
|
- |
|
|
|
2.1 |
|
|
― |
|
|
Cloud-based software implementation costs |
|
|
6.5 |
|
|
|
- |
|
|
|
6.5 |
|
|
― |
|
|
Unrealized gain on investment in small private business |
|
|
(3.9 |
) |
|
|
- |
|
|
|
(3.9 |
) |
|
― |
|
|
Other adjustments |
|
|
3.3 |
|
|
|
3.3 |
|
|
|
- |
|
|
|
- |
|
Constant currency |
|
|
3.2 |
|
|
|
(2.1 |
) |
|
|
5.3 |
|
|
|
(252.4 |
) |
Constant Currency AEBITDA(1) |
|
$ |
53.9 |
|
|
$ |
82.1 |
|
|
$ |
(28.2 |
) |
|
|
(34.3 |
) |
(see subsequent footnotes)
(1) Reconciliations of EBITDA and AEBITDA for each period presented are to net (loss) income, the nearest GAAP equivalent.
(2) Adjustments are related to non-cash unusual or infrequent costs such as: effects of non-cash foreign currency remeasurement or adjustment; impairment of returned machines; costs associated with the evaluation of acquisitions; costs associated with executive severance; costs associated with restructuring actions such as plant rationalization or realignment, reorganization, and reductions in force; costs associated with the implementation of the global ERP system; and other items deemed by management to be unusual, infrequent, or non-recurring.
(3) Represents amortization of capitalized costs related to the implementation of the global ERP system, which are included in SG&A.
Liquidity and Capital Resources
Liquidity describes the ability of a company to generate sufficient cash flows to meet the cash requirements of its business operations, including working capital needs, capital expenditures, debt service, acquisitions, other commitments and contractual obligations. We evaluate liquidity in terms of cash flows from operations and other sources and the sufficiency of such cash flows to fund our operating, investing and financing activities.
We believe that our cash balances together with borrowing capacity under the revolving portion of the Facilities will provide us with sufficient resources to cover our current requirements. Our main liquidity needs relate to capital expenditures and expenses for the production and maintenance of PPS systems placed at end-user facilities, working capital, including the purchase of paper raw materials, and payments of principal and interest on our outstanding debt. We expect our capital expenditures to increase as we continue to grow our business, expand our manufacturing footprint, and upgrade our existing systems and facilities. We continue to evaluate our inventory requirements and adjust according to our volume forecasts. Our future capital requirements and the adequacy of available funds will depend on many factors, and if we are unable to obtain needed additional funds, we may have to reduce our operating costs or incur additional debt, which could impair our growth prospects and/or otherwise negatively impact our business. Further, volatility in the equity and credit markets resulting from the COVID-19 pandemic, the conflict in Ukraine, or other macroeconomic factors could make obtaining new equity or debt financing more difficult or expensive.
33
We had $61.3 million in cash and cash equivalents as of September 30, 2022 and $103.9 million as of December 31, 2021. We sold approximately 5.3 million shares of Class A common stock in the May 2021 Equity Offering for net proceeds of $103.4 million. We used $70.0 million of proceeds from the May 2021 Equity Offering to invest in a money market fund to generate short-term cash returns. Additionally, we prepaid $20.9 million of principal on the First Lien Dollar Term Facility in the June 2021 Prepayment.
Including finance lease liabilities and excluding deferred financing costs, we had $384.7 million in debt, $2.0 million of which was classified as short-term, as of September 30, 2022, compared to $406.5 million in debt, $2.2 million of which was classified as short-term, as of December 31, 2021. At September 30, 2022, we did not have amounts outstanding under our $45.0 million revolving credit facility, and we had no borrowings under such facility through November 1, 2022.
Share Repurchase Program
On July 26, 2022, the Directors authorized a general share repurchase program of our Class A common stock of up to $50.0 million, with a 36-month expiration. These Class A common stock repurchases may occur in transactions that may include, without limitation, tender offers, open market purchases, accelerated share repurchases, negotiated block purchases, and transactions effected through plans under Rule 10b5-1 of the Securities Exchange Act of 1934. The timing and actual amount of shares repurchased will depend on a variety of different factors and may be modified, suspended or terminated at any time at the discretion of the Directors.
Debt Profile
The material terms of the Facilities are summarized in Note 7, “Long-Term Debt” to the unaudited condensed consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q.
In June 2019, Holdings, the U.S. Borrower, and the Dutch Borrower entered into the Facilities. The First Lien Term Facility matures in 2026 and the Revolving Facility matures in 2024. As of September 30, 2022 and December 31, 2021, no amounts were outstanding under the Revolving Facility.
Borrowings under the Facilities, at the Borrowers’ option, bear interest at either (i) an adjusted eurocurrency rate or (ii) a base rate, in each case plus an applicable margin. The applicable margin is 3.75% with respect to eurocurrency borrowings and base rate borrowings as of September 30, 2022 and December 31, 2021, (in each case, assuming a first lien net leverage ratio of less than 5.00:1.00), subject to a leverage-based step-up to an applicable margin equal to 4.00% for eurocurrency borrowings. Global interest rates have risen meaningfully in 2022 and we expect interest on our Facilities to increase.
The Revolving Facility includes borrowing capacity available for standby letters of credit of up to $5.0 million. Any issuance of letters of credit will reduce the amount available under the Revolving Facility. As of September 30, 2022, we had $1.8 million committed to outstanding letters of credit, leaving net availability under the Revolving Facility at $43.2 million.
The Facilities will provide the Borrowers with the option to increase commitments under the Facilities in an aggregate amount not to exceed the greater of $95.0 million and 100% of trailing-twelve months Consolidated EBITDA (as defined in the definitive documentation with respect to the Facilities), plus any voluntary prepayments of the debt financing (and, in the case of the Revolving Facility, to the extent such voluntary prepayments are accompanied by permanent commitment reductions under the Revolving Facility), plus unlimited amounts subject to the relevant net leverage ratio tests and certain other conditions.
The obligations of (i) the U.S. Borrower under the Facilities and certain of its obligations under hedging arrangements and cash management arrangements are unconditionally guaranteed by Holdings and the Guarantors, in each case, other than certain excluded subsidiaries. The Facilities are secured by (i) a first priority pledge of the equity interests of the Borrowers and of each direct, wholly-owned restricted subsidiary of any Borrower or any Guarantor and (ii) a first priority security interest in substantially all of the assets of the Borrowers and the Guarantors (in each case, subject to customary exceptions), provided that obligations of the U.S. Borrower and U.S. Guarantors under the Facilities were not secured by assets of the Dutch Borrower or any Dutch Guarantor.
The Facilities impose restrictions that require the Company to comply with or maintain certain financial tests and ratios. Such agreements restrict our ability to, among other things: (i) declare dividends or redeem or repurchase capital stock, including with respect to Class A common stock; (ii) prepay, redeem or purchase other debt; (iii) incur liens; (iv) make loans, guarantees, acquisitions and other investments; (v) incur additional indebtedness; (vi) engage in sale and leaseback transactions; (vii) amend or otherwise alter debt and other material agreements; (viii) engage in mergers, acquisitions and asset sales; (ix) engage in transactions with affiliates; and (x) enter into arrangements that would prohibit us from granting liens or restrict our ability to pay dividends, make loans or transfer assets among our subsidiaries.
34
Amendment to First Lien Credit Facilities
On February 14, 2020, the U.S. Borrower, the Dutch Borrower, Holdings, certain other subsidiaries of Holdings, certain lenders party to Amendment No. 1 and the Administrative Agent entered into Amendment No. 1.
Among other things, the Amendment No. 1 amends the Facilities such that (x) the requirement of the Borrowers to apply a percentage of excess cash flow to mandatorily prepay term loans under the Facilities commences with the fiscal year ending December 31, 2021 (instead of the fiscal year ending December 31, 2020) and (y) the aggregate amount per fiscal year of capital stock of any parent company of the U.S. Borrower that is held by directors, officers, management, employees, independent contractors or consultants of the U.S. Borrower (or any parent company or subsidiary thereof) that the U.S. Borrower may repurchase, redeem, retire or otherwise acquire or retire for value has been increased to the greater of $10.0 million and 10% of Consolidated AEBITDA (as defined in the Facilities) (increased from the greater of $7.0 million and 7% of Consolidated AEBITDA) as of the last day of the most recently ended quarter for which financial statements have been delivered.
Borrower Assumption Agreement
On July 1, 2020, contemporaneously with the Reorganization, Ranger Packaging LLC, Ranpak Corp., Ranger Pledgor LLC, certain other subsidiaries of Ranger Pledgor LLC and Goldman Sachs Lending Partners LLC entered into the Borrower Assumption Agreement whereby, among other things, Ranpak Corp. assumed all obligations, liabilities and rights of Ranger Packaging LLC as the U.S. Borrower under the Facilities.
Permitted Exit Payment
Additionally, as a result of making the Exit Payment to our lenders, we became eligible to enter into the Permitted Exit Payment Amendment (as defined in the Credit Agreement) to the Credit Agreement which, among other things, would introduce additional exceptions to the negative covenant that restricts the ability of the Borrowers and their restricted subsidiaries from paying dividends and distributions or repurchasing capital stock. On July 28, 2021, the Permitted Exit Payment Amendment to the Credit Agreement became effective.
Cash Flows
The following table sets forth our summary cash flow information for the periods indicated:
|
|
Nine Months Ended September 30, |
|
|||||
|
|
2022 |
|
|
2021 |
|
||
Net cash provided by (used in) operating activities |
|
$ |
(9.5 |
) |
|
$ |
40.8 |
|
Net cash used in investing activities |
|
|
(27.1 |
) |
|
|
(50.7 |
) |
Net cash provided by (used in) financing activities |
|
|
(4.3 |
) |
|
|
72.6 |
|
Effect of Exchange Rate Changes on Cash |
|
|
(1.7 |
) |
|
|
(0.8 |
) |
Net Increase (Decrease) in Cash and Cash Equivalents |
|
|
(42.6 |
) |
|
|
61.9 |
|
Cash and Cash Equivalents, beginning of period |
|
|
103.9 |
|
|
|
48.5 |
|
Cash and Cash Equivalents, end of period |
|
$ |
61.3 |
|
|
$ |
110.4 |
|
Cash Flows Provided by (Used in) Operating Activities
Net cash used in operating activities was $9.5 million in the nine months ended September 30, 2022. Cash provided by operating activities was $40.8 million in the nine months ended September 30, 2021. The changes in operating cash flows are largely due to the decreases in cash earnings due to increased input costs, increased SG&A, currency headwinds, investments in working capital, and the unrealized gain on our investment in a small private business.
Cash Flows Used in Investing Activities
Net cash used in investing activities was $27.1 million in the nine months ended September 30, 2022 and reflects cash received in termination of our cross-currency swaps, cash used for production of converter equipment and the renovation of our global headquarters in Concord, Ohio, and an investment in a small private business. Cash used in investing activities was $50.7 million in the nine months ended September 30, 2021 and reflects cash used for production of converter equipment, technology infrastructure improvements, and our investments in small private businesses.
Cash Flows Provided by (Used in) Financing Activities
Net cash used in financing activities was $4.3 million in the nine months ended September 30, 2022 and reflects debt repayments, payments on finance lease liabilities, and tax payments for withholdings on stock compensation. Net cash provided by financing
35
activities was $72.6 million in the nine months ended September 30, 2021 and reflects the May 2021 Equity Offering net proceeds of $103.4 million, offset by the June 2021 Prepayment of $20.9 million, and the $8.2 million Exit Payment.
Contractual Obligations and Other Commitments
We lease production and administrative facilities as well as automobiles, machinery and equipment. We have various contractual obligations and commercial commitments that are recorded as liabilities in our condensed consolidated financial statements. Other items, such as purchase obligations and other executory contracts, are not recognized as liabilities, but are required to be disclosed. There have been no significant changes outside the ordinary course of business to our “Contractual Obligations” table in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” of the 2021 10-K.
Off-Balance Sheet Arrangements
We did not have any off-balance sheet arrangements as of September 30, 2022.
Critical Accounting Policies
Our unaudited condensed consolidated financial statements have been prepared in conformity with GAAP, which requires management to make estimates and assumptions that affect the reported amount of assets and liabilities at the date of our financial statements and the reported amounts of revenues and expenses during the reporting period. While we do not believe that the reported amounts would be materially different, application of these policies involves the exercise of judgment and the use of assumptions as to future uncertainties and, as a result, actual results could differ from these estimates. We evaluate our estimates and judgments on an ongoing basis. We base our estimates on experience and various other assumptions that we believe are reasonable under the circumstances. All of our significant accounting policies, including certain critical accounting policies and estimates, are disclosed in our 2021 10-K.
Impairment of Goodwill, Indefinite-Lived Intangible Assets, and Long-Lived Assets
We periodically review goodwill and indefinite-lived intangible assets for possible impairment whenever there is evidence that events or changes in circumstances indicate that the carrying value of our goodwill reporting units or identifiable indefinite-lived intangible assets may be less than their fair values. Additionally, we review our long-lived asset groups whenever there is evidence that events or changes in circumstances indicate the carrying value of our asset groups may not be recoverable. If events or circumstances exist, including a continuation of current market conditions, that indicate that the carrying value of our goodwill reporting units or identifiable indefinite-lived intangible assets may be less than their fair values, or the carrying amount of our long lived-asset groups may no longer be recoverable, we may recognize a non-cash impairment of goodwill, identifiable indefinite-lived intangible assets, or long-lived asset groups, which could have a material adverse effect on our consolidated financial condition or results of operations in future periods. For additional information on our accounting principles with respect to goodwill, identifiable indefinite-lived intangible assets, and long-lived assets, please see “Management Discussion & Analysis – Critical Accounting Policies” in our 2021 10-K.
As previously noted, declining market conditions and the decline in our share price triggered interim testing for impairment as of September 1, 2022. The test for goodwill used unobservable inputs that required significant judgement and were performed using a combination of the Discounted Cash Flow Method and the Guideline Public Company Method in order to determine fair value. The test for indefinite-lived intangible assets also used unobservable inputs that required significant judgement and were performed using the Relief from Royalty Method in order to determine fair value. The evaluation of our asset groups used unobservable inputs that required significant judgement and were performed using an undiscounted cash flow analysis. Upon completion of these tests, we concluded that each area was not impaired. However, the test for one of our goodwill reporting units that encompasses our business in Europe indicated that fair value of the reporting unit was close to approximating carrying value.
The unobservable inputs that required significant judgment include estimates and assumptions affected by conditions specific to our businesses, economic conditions related to the industries in which we operate, and conditions in the global economy. Changes in these estimates and assumptions, especially considering the volatility in European markets in 2022, may result in an impairment charge for the goodwill reporting unit that encompasses our business in Europe. The assumptions that have the most significant effect on the fair values of our goodwill reporting units derived using the Discounted Cash Flow Method are (i) the expected long-term growth rate of our reporting units’ cash flows and (i) the weighted average cost of capital (“WACC”) for each reporting unit. A hypothetical decrease in the expected long-term growth rate by approximately 92 basis points would have resulted in a charge in the reporting unit that encompasses our business in Europe. Separately, a hypothetical increase in the WACC by approximately 74 basis points would have resulted in a charge in the reporting unit that encompasses our business in Europe.
36
We believe that our estimates and assumptions are reasonable but are subject to change from period to period. Actual results of operations and other factors may differ from the estimates used and it is possible that differences could be significant. A change in the estimates we use could result in a decline in the estimated fair values derived as of the September 1, 2022 interim testing. If we fail an impairment test, any non-cash impairment charge may have an adverse effect on our results of operations and financial condition. We will continue to monitor events and circumstances for indicators of impairment in our reporting units, indefinite-lived intangible assets, and asset groups.
Recently Issued and Adopted Accounting Pronouncements
For recently issued and adopted accounting pronouncements, see Note 2, “Basis of Presentation and Summary of Significant Accounting Policies” to the unaudited condensed consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q.
37
Item 3. Quantitative and Qualitative Disclosures About Market Risk
Interest Rate Risk
Changes in interest rates affect the amount of interest income we earn on cash, cash equivalents and short-term investments and the amount of interest expense we pay on borrowings under the floating rate portions of our Facilities. A hypothetical 100 basis point increase or decrease in the applicable base interest rates under our Facilities would have resulted in a $5.9 million impact on our cash interest expense for the nine months ended September 30, 2022. We use interest rate swap agreements to manage this exposure.
In March 2020, we entered into the Second Amended January 2019 Swap, which amended the Amended January 2019 Swap to a lower rate of 2.1% and extend its maturity to June 1, 2024. In July 2020, we entered into the Borrower Assumption Agreement, which details the Reorganization and the assumption of obligations, liabilities and rights under the Facilities. In July 2021, we entered into the Permitted Exit Payment to the Credit Agreement, which, among other things, would introduce additional exceptions to the negative covenant that restricts the ability of the Borrowers and their restricted subsidiaries from paying dividends and distributions or repurchasing capital stock. Refer to Note 7, “Long-Term Debt” and Note 8, “Derivative Instruments” to the condensed consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q for additional information.
On July 27, 2017, the United Kingdom’s Financial Conduct Authority announced that it intends to stop persuading or compelling banks to submit LIBOR rates after 2021. It is expected that most, if not all, banks currently reporting information to set LIBOR will stop doing so at such time, which could either cause LIBOR publication to stop immediately or cause LIBOR’s regulator to announce the discontinuation of its publication (and, during any such transition period, LIBOR may perform differently than in the past).
On November 30, 2020, ICE Benchmark Administration (“IBA”), the administrator of LIBOR, with the support of the United States Federal Reserve and the United Kingdom’s Financial Conduct Authority, announced plans to consult on ceasing publication of USD LIBOR on December 31, 2021 for only the one week and two month USD LIBOR tenors, and on June 30, 2023 for all other USD LIBOR tenors. While this announcement extends the transition period to June 2023, the United States Federal Reserve concurrently issued a statement advising banks to stop new USD LIBOR issuances by the end of 2021.
These reforms may also result in new methods of calculating LIBOR to be established, or alternative reference rates to be established. For example, in the U.S., a group convened by the Federal Reserve Board and the Federal Reserve Bank of New York, called the Alternative Reference Rate Committee (“ARRC”) and comprised of a diverse set of private sector entities, has identified the Secured Overnight Financing Rate (“SOFR”) as its preferred alternative rate for the U.S. LIBOR and the Federal Reserve Bank of New York has begun publishing SOFR daily, and central banks in several other jurisdictions have also announced plans for alternative reference rates for other currencies. Our existing indebtedness and interest rate swaps are based on one-month and three-month USD LIBOR tenors, which will transition in June 2023, therefore, these reforms are not applicable at this time. However, the potential consequences of these changes cannot be fully predicted and could have an adverse impact on our interest payment obligations under the Facilities and related interest rate swaps.
There were no other changes to our debt and interest rate swap agreements from those disclosed in the 2021 10-K.
Foreign Currency Exchange Rate Risk
We are exposed to foreign currency exchange risk related to our transactions and subsidiaries’ balances that are denominated in currencies other than USD, our functional currency. See “Effect of Currency Fluctuations” in Item 2 previously for more information about our foreign currency exchange rate exposure. We seek to naturally hedge our foreign exchange transaction exposure by matching the transaction currencies for our cash inflows and outflows and maintaining access to credit in the principal currencies in which we conduct business. We previously hedged some of our exposure to foreign currency translation with cross-currency swaps. Refer to Note 8, “Derivative Instruments” to the condensed consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q for additional information.
For the nine months ended September 30, 2022, net revenue denominated in currencies other than USD amounted to $147.4 million or 59.7% of our net revenue for the period. Substantially all of this amount was denominated in Euro. A 10% increase or decrease in the value of the Euro to the USD would have caused our reported net revenue for the nine months ended September 30, 2022 to increase or decrease by approximately $14.9 million.
Commodity Price Risk
While our business is significantly impacted by price fluctuations related to the purchase, production and sale of paper products, we are typically not directly exposed to market price fluctuations in paper purchase or sale prices as we historically have negotiated prices with suppliers on an annual basis and negotiate prices with distributors reflecting competitive market terms. Our strategy has generally been to obtain competitive prices for our products and services and allow operating results to reflect market price
38
movements dictated by supply and demand. However, due to global inflation and other macroeconomic factors, including COVID-19 and the conflict in Ukraine, we may be subject to significantly more commodity price volatility than we have historically experienced.
Item 4. Controls and Procedures
Evaluation of Disclosure Controls and Procedures
Disclosure controls and procedures are controls and other procedures that are designed to ensure that information required to be disclosed in our reports filed or submitted under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed in company reports filed or submitted under the Exchange Act is accumulated and communicated to management, including our CEO and CFO, to allow timely decisions regarding required disclosure.
As required by Rules 13a-15 and 15d-15 under the Exchange Act, our management, with the participation of the CEO and CFO, evaluated the effectiveness of our disclosure controls and procedures as of September 30, 2022. Based on this evaluation of our disclosure controls and procedures, our management, with the participation of the CEO and CFO, concluded that our disclosure controls and procedures were effective as of September 30, 2022.
Changes in Internal Control Over Financial Reporting
In the first quarter of 2022, we implemented a new ERP system globally across our Company that will be used to better manage our business and summarize our operating results. This ERP system implementation affects multiple financial reporting functions, including accounts receivable, fixed assets, project accounting, accounts payable, and general ledger applications. As a result of this ERP system implementation, we revised certain existing internal controls, processes, and procedures. While we do not believe this ERP system implementation will have an adverse effect on our internal control over financial reporting, there are inherent risks in implementing an ERP system. Accordingly, we will continue to evaluate the design and operating effectiveness of these controls.
Other than this ERP system implementation, there were no changes during the third quarter of 2022 in our internal control over financial reporting that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
PART II – OTHER INFORMATION
Item 1. Legal Proceedings
None.
Item 1A. Risk Factors
Information about our risk factors is contained in Item 1A of the 2021 10-K as supplemented by Item 1A of our Quarterly Report on Form 10-Q for the period ended March 31, 2022.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
None.
Item 3. Defaults Upon Senior Securities
None.
Item 4. Mine Safety Disclosures
Not applicable.
Item 5. Other Information
None.
39
Item 6. Exhibits
Exhibit No. |
|
Description |
|
|
|
3.1 |
|
|
|
|
|
3.2 |
|
|
|
|
|
4.1 |
|
|
|
|
|
31.1* |
|
|
|
|
|
31.2* |
|
|
|
|
|
32* |
|
|
|
|
|
101.INS |
|
Inline XBRL Instance Document – the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document |
|
|
|
101.SCH |
|
Inline XBRL Taxonomy Extension Schema Document |
|
|
|
101.CAL |
|
Inline XBRL Taxonomy Extension Calculation Linkbase Document |
|
|
|
101.DEF |
|
Inline XBRL Taxonomy Extension Calculation Linkbase Document |
|
|
|
101.LAB |
|
Inline XBRL Taxonomy Extension Label Linkbase Document |
|
|
|
101.PRE |
|
Inline XBRL Taxonomy Extension Presentation Linkbase Document |
|
|
|
104* |
|
Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101) |
* Filed herewith
40
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
|
|
|
Ranpak Holdings Corp. |
|
|
|
|
|
|
Date: |
November 1, 2022 |
|
By: |
/s/ William Drew |
|
|
|
|
William Drew |
|
|
|
|
Senior Vice President and Chief Financial Officer |
41
Exhibit 31.1
CERTIFICATION BY CHIEF EXECUTIVE OFFICER
PURSUANT TO SECURITIES EXCHANGE ACT RULE 13A-14(a),
AS ADOPTED PURSUANT TO SECTION 302 OF THE SARBANES OXLEY ACT OF 2002
I, Omar M. Asali, certify that:
5. The company’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the company’s auditors and the audit committee of the company’s board of directors (or persons performing the equivalent functions):
|
Date: |
|
November 1, 2022 |
|
|
|
|
|
By: |
|
/s/ Omar M. Asali |
|
|
|
Omar M. Asali |
|
|
|
Chairman and Chief Executive Officer |
Exhibit 31.2
CERTIFICATION BY CHIEF FINANCIAL OFFICER
PURSUANT TO SECURITIES EXCHANGE ACT RULE 13A-14(a),
AS ADOPTED PURSUANT TO SECTION 302 OF THE SARBANES OXLEY ACT OF 2002
I, William Drew, certify that:
|
Date: |
|
November 1, 2022 |
|
|
|
|
|
By: |
|
/s/ William Drew |
|
|
|
William Drew |
|
|
|
Senior Vice President and Chief Financial Officer |
Exhibit 32
CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO SECTION 906 OF
THE SARBANES-OXLEY ACT OF 2002
The certification set forth below is being submitted in connection with Ranpak Holdings Corp.’s Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2022 (the “Report”) for the purpose of complying with Rule 13a-14(b) or Rule 15d-14(b) of the Securities Exchange Act of 1934 (the “Exchange Act”) and Section 1350 of Chapter 63 of Title 18 of the United States Code.
Omar M. Asali, the Chairman and Chief Executive Officer and William Drew, the Senior Vice President and Chief Financial Officer of Ranpak Holdings Corp. (the “Company”), each certifies that, to the best of such officer’s knowledge, that:
|
Date: |
|
November 1, 2022 |
|
|
|
|
|
By: |
|
/s/ Omar M. Asali |
|
|
|
Omar M. Asali |
|
|
|
Chairman and Chief Executive Officer |
|
|
|
|
|
By: |
|
/s/ William Drew |
|
|
|
William Drew |
|
|
|
Senior Vice President and Chief Financial Officer |
Unaudited Condensed Consolidated Statements of Operations and Comprehensive Income (Loss) - USD ($) $ in Millions |
3 Months Ended | 9 Months Ended | ||
|---|---|---|---|---|
Sep. 30, 2022 |
Sep. 30, 2021 |
Sep. 30, 2022 |
Sep. 30, 2021 |
|
| Net revenue | $ 77.8 | $ 97.1 | $ 247.1 | $ 274.8 |
| Cost of goods sold | 53.4 | 59.1 | 169.8 | 164.8 |
| Gross profit | 24.4 | 38.0 | 77.3 | 110.0 |
| Selling, general and administrative expenses | 26.8 | 27.1 | 86.8 | 70.8 |
| Depreciation and amortization expense | 7.8 | 8.7 | 24.0 | 26.1 |
| Other operating expense (income), net | 1.5 | (0.1) | 3.4 | 2.0 |
| Income (loss) from operations | (11.7) | 2.3 | (36.9) | 11.1 |
| Interest expense | 5.3 | 5.5 | 15.2 | 17.1 |
| Foreign currency gain | (1.2) | (1.5) | (4.1) | (3.9) |
| Other non-operating expense, net | (4.0) | 0.0 | (4.0) | 0.0 |
| Income (loss) before income tax benefit | (11.8) | (1.7) | (44.0) | (2.1) |
| Income tax benefit | (3.1) | (0.3) | (9.9) | (1.8) |
| Net income (loss) | $ (8.7) | $ (1.4) | $ (34.1) | $ (0.3) |
| Earnings Per Share [Abstract] | ||||
| Basic | $ (0.11) | $ (0.02) | $ (0.42) | $ 0 |
| Diluted | $ (0.11) | $ (0.02) | $ (0.42) | $ 0 |
| Weighted average number of shares outstanding - Class A and C | ||||
| Basic | 81,979,986 | 81,396,832 | 81,833,718 | 77,579,205 |
| Diluted | 81,979,986 | 81,396,832 | 81,833,718 | 77,579,205 |
| Other comprehensive income (loss), before tax | ||||
| Foreign currency translation adjustments | $ (9.8) | $ (4.9) | $ (24.3) | $ (11.1) |
| Interest rate swap adjustments | 3.3 | 0.8 | 14.1 | 4.0 |
| Cross currency swap adjustments | 2.7 | 1.4 | 7.0 | 1.4 |
| Total other comprehensive loss, before tax | (3.8) | (2.7) | (3.2) | (5.7) |
| Provision for income taxes related to other comprehensive loss | 1.5 | 0.5 | 5.2 | 1.3 |
| Total other comprehensive loss, net of tax | (5.3) | (3.2) | (8.4) | (7.0) |
| Comprehensive loss, net of tax | (14.0) | (4.6) | (42.5) | (7.3) |
| Class A | ||||
| Net income (loss) | $ (8.4) | $ (1.3) | $ (32.9) | $ (0.3) |
| Earnings Per Share [Abstract] | ||||
| Basic | $ (0.11) | $ (0.02) | $ (0.42) | $ 0 |
| Diluted | $ (0.11) | $ (0.02) | $ (0.42) | $ 0 |
| Weighted average number of shares outstanding - Class A and C | ||||
| Basic | 79,058,887 | 78,475,733 | 78,912,619 | 73,512,399 |
| Diluted | 79,058,887 | 78,475,733 | 78,912,619 | 73,512,399 |
| Class C | ||||
| Net income (loss) | $ (0.3) | $ (0.1) | $ (1.2) | $ 0.0 |
| Earnings Per Share [Abstract] | ||||
| Basic | $ (0.10) | $ (0.03) | $ (0.41) | $ 0 |
| Diluted | $ (0.10) | $ (0.03) | $ (0.41) | $ 0 |
| Weighted average number of shares outstanding - Class A and C | ||||
| Basic | 2,921,099 | 2,921,099 | 2,921,099 | 4,066,806 |
| Diluted | 2,921,099 | 2,921,099 | 2,921,099 | 4,066,806 |
| Paper revenue | ||||
| Revenue | $ 62.6 | $ 81.2 | $ 199.0 | $ 229.5 |
| Machine lease revenue | ||||
| Revenue | 11.7 | 11.8 | 36.4 | 35.0 |
| Other revenue | ||||
| Revenue | $ 3.5 | $ 4.1 | $ 11.7 | $ 10.3 |
Unaudited Condensed Consolidated Balance Sheets - Parenthetical - $ / shares |
Sep. 30, 2022 |
Jun. 30, 2022 |
Mar. 31, 2022 |
Dec. 31, 2021 |
Sep. 30, 2021 |
Jun. 30, 2021 |
Mar. 31, 2021 |
Dec. 31, 2020 |
|---|---|---|---|---|---|---|---|---|
| Class A | ||||||||
| Common stock, par value (USD per share) | $ 0.0001 | $ 0.0001 | ||||||
| Common stock, shares authorized (shares) | 200,000,000 | 200,000,000 | ||||||
| Common stock, shares issued (shares) | 79,064,041 | 78,482,024 | ||||||
| Common stock, shares outstanding (shares) | 79,064,041 | 79,039,192 | 79,006,238 | 78,482,024 | 78,475,824 | 78,469,923 | 69,343,361 | 69,005,059 |
| Class C | ||||||||
| Common stock, par value (USD per share) | $ 0.0001 | $ 0.0001 | ||||||
| Common stock, shares authorized (shares) | 200,000,000 | 200,000,000 | ||||||
| Common stock, shares issued (shares) | 2,921,099 | 2,921,099 | ||||||
| Common stock, shares outstanding (shares) | 2,921,099 | 2,921,099 | 2,921,099 | 2,921,099 | 2,921,099 | 2,921,099 | 6,511,293 | 6,511,293 |
Nature of Operations |
9 Months Ended |
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Sep. 30, 2022 | |
| Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
| Nature of Operations | Note 1 — Nature of Operations Ranpak Holdings Corp. is a leading provider of environmentally sustainable, systems-based, product protection solutions for e-Commerce and industrial supply chains. Through proprietary protective packaging solutions (“PPS”) systems and paper consumables, the Company offers a full suite of protective packaging solutions. The Automated Solutions (“AS”) and Automated Paper Solutions (“APS”) (collectively, “Automation”) product lines provide end-of-line automation systems that solve distinct challenges facing end-users. The Company’s business is global, with a strong presence in the United States and Europe. Throughout this report, when we refer to “Ranpak,” the “Company,” “we,” “our,” or “us,” we are referring to Ranpak Holdings Corp. and all of our subsidiaries, except where the context indicates otherwise. |
Basis of Presentation and Summary of Significant Accounting Policies |
9 Months Ended |
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Sep. 30, 2022 | |
| Accounting Policies [Abstract] | |
| Basis of Presentation and Summary of Significant Accounting Policies | Note 2 — Basis of Presentation and Summary of Significant Accounting Policies Unaudited Interim Financial Statements — These interim unaudited condensed consolidated financial statements should be read in conjunction with our audited consolidated financial statements and accompanying notes for each of the three years ended December 31, 2021, 2020, and 2019, which are included in our Annual Report on Form 10-K for the year ended December 31, 2021 (“2021 10-K”). The three months ended September 30, 2022 may be further referred to herein as the “third quarter of 2022.” The three months ended September 30, 2021 may be further referred to herein as the “third quarter of 2021.” The accompanying unaudited interim condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) and with instructions to Form 10-Q and Rule 10-01 of the Securities and Exchange Commission (“SEC”) Regulation S-X as they apply to interim financial information. Accordingly, the unaudited interim condensed consolidated financial statements do not include all of the information and notes required by GAAP for complete financial statements, although we believe that the disclosures made are adequate to make the information not misleading. The interim condensed consolidated financial statements are unaudited but, in our opinion, include all adjustments that are necessary for a fair statement of operations and financial position for the periods presented. The interim financial results are not necessarily indicative of results that may be expected for any other interim period or the fiscal year. Principles of Consolidation — The unaudited interim condensed consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries prepared in conformity with GAAP. All intercompany balances and transactions have been eliminated in consolidation and certain immaterial prior year amounts have been reclassified consistent with current year presentation. All amounts are in millions, except share and per share amounts and are approximate due to rounding. Use of Estimates — The preparation of condensed consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the condensed consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from these estimates and such differences could be material. Foreign Currency — The nature of business activities involves the management of various financial and market risks, including those related to changes in foreign currency exchange rates. The functional currency of our operating subsidiaries outside the U.S. is the applicable local currency. For those operations, assets and liabilities are translated into U.S. dollars at period-end exchange rates and revenues and expenses are translated into U.S. dollars using average monthly exchange rates. Investments in Small Private Businesses — In the third quarter of 2021, we paid consideration of $9.2 million in exchange for minority ownership interests in two small private businesses. We do not have power to direct the activities of these businesses and do not have significant economic exposure related to these investments. These investments do not require consolidation and are immaterial to our condensed consolidated financial statements. In the third quarter of 2022, we invested an additional $2.1 million in one of the small private businesses. Further, we adjusted the carrying value of our initial investment in the small private business due to an observable price change for a similar or identical investment, a Level 2 fair value measurement. This resulted in an unrealized gain of $3.9 million, which is recorded in other non-operating expense (income), net in the condensed consolidated financial statements. The adjusted value of our investment in this small private business continues to be immaterial to our condensed consolidated financial statements. Recently Adopted Accounting Standards — We have adopted all applicable accounting standards and did not adopt any new accounting standards issued by the Financial Accounting Standards Board (“FASB”) in 2022. Recently Issued Accounting Standards — As of September 30, 2022, it is not expected that the future adoption of any recently issued accounting pronouncements by the FASB will have a material impact on our financial position, results of operations or cash flows. |
Supplemental Balance Sheet Data and Cash Flow Information |
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| Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Supplemental Balance Sheet Data and Cash Flow Information | Note 3 — Supplemental Balance Sheet Data and Cash Flow Information Cash and cash equivalents — Cash and cash equivalents include securities with original maturities of three months or less and cash in banks. In June 2021, we invested in a money market fund, which is classified as a cash equivalent because of its short-term, highly liquid nature that is readily convertible to cash. Unrealized gains or losses are included in other operating non-operating expense (income), net and were immaterial in all periods presented. The balance was approximately $35.1 million and $70.0 million at September 30, 2022 and December 31, 2021, respectively. The fair value of money market funds is considered Level 1 in the fair value hierarchy because they are securities traded in active markets. Refer to Note 10, “Fair Value Measurement” for further detail. In May 2021, we completed a public offering of 4.5 million shares of Class A common stock. Additionally, the underwriters completed the exercise of an allotment option to sell an additional 0.8 million shares (the public offering and the allotment option collectively referred to as the “May 2021 Equity Offering”). Cash proceeds received in the May 2021 Equity Offering, net of underwriting fees, commissions, and transaction expenses, were $103.4 million. We used some of the proceeds to invest in a money market fund to generate short-term cash returns. Additionally, we prepaid $20.9 million of principal on the First Lien Dollar Term Facility in the June 2021 Prepayment (herein defined). Refer to Note 7, “Long-Term Debt” for further detail. Accounts Receivable, net — The components of accounts receivable, net were as follows:
At September 30, 2022 and December 31, 2021, no customer’s accounts receivable balances exceeded 10.0% of our accounts receivable balance. Inventories, net — The components of inventories, net were as follows:
Property, Plant and Equipment, net — The following table details our property, plant and equipment, net:
Declining market conditions within our long-lived asset groups and the decline in our share price indicated that the carrying amount of our asset groups may not be recoverable. We performed an evaluation of our asset groups in the third quarter of 2022. The undiscounted cash flows expected to be generated from the use and eventual disposition of the asset groups were compared to the carrying values of the asset groups and it was determined that the carrying amounts of our asset groups were recoverable and not impaired. Refer to Notes 6 and 12 for further detail. Depreciation expense recorded in cost of goods sold and depreciation and amortization in the unaudited condensed consolidated statements of operations and comprehensive income (loss) was as follows:
Accrued Liabilities and Other – The components of accrued liabilities and other were as follows:
Supplemental Cash Flow Information — Supplemental cash flow information is as follows:
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Segment and Geographic Information |
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| Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Segment and Geographic Information | Note 4 — Segment and Geographic Information In accordance with ASC 280, Segment Reporting (“ASC 280”), we determined we have two operating segments which are aggregated into one reportable segment, Ranpak. The chief operating decision maker assesses the Company’s performance and allocates resources based on the Company’s consolidated financial information. The aggregation of the two operating segments is based on the Company’s determination that, per ASC 280, the operating segments have similar economic characteristics, and are similar in all of the following areas: the nature of products and services, the nature of production processes, the type or class of customer for their products or services, and the methods used to distribute their products or provide their services. In addition, the operating segments were aggregated for purposes of determining whether segments meet the quantitative threshold for separate reporting. We attribute revenue and gross profit to individual countries based on the selling location. Our products are primarily sold from North America and Europe. As previously noted, segment gross profit includes certain depreciation and amortization expenses that are included in cost of goods sold.
Our customers are not concentrated in any specific geographic region. During the nine months ended September 30, 2022 and 2021, no customers exceeded 10% of net revenue. The following table presents our long-lived assets by geographic region:
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| Revenue Recognition, Contracts with Customers | Note 5 — Revenue Recognition, Contracts with Customers Revenue is recognized when control of the promised goods or services is transferred to customers in an amount that reflects the consideration expected to be received in exchange for those goods or services. Revenue for paper consumables is recognized based on shipping terms, which is the point in time the customer obtains control of the promised goods. Revenue for equipment sales is recognized based on an input method, based on percentage of completion of cost and effort incurred. Maintenance revenue is recognized straight-line on the basis that the level of effort is consistent over the term of the contract. Lease components within contracts with customers are recognized in accordance with ASC 842. Our contract durations are twelve months or less and lease revenues beyond twelve months are not estimable. Sales, value-added, and other taxes collected from customers and remitted to governmental authorities are excluded from revenue. Our paper consumables, automation equipment, and maintenance services are determined to be distinct performance obligations. Free on loan and leased equipment is typically identified as a separate lease component in scope of ASC 842. In association to the sale of automation equipment, we sell other goods and services, such as extended warranties, preventative maintenance services, spare parts and spare part packages, and consulting services. We have forms of variable consideration present in our contracts with customers, including rebates and other discounts. We estimate variable consideration using either the expected value method or the most likely amount method. We include in the transaction price some or all of an amount of variable consideration estimated to the extent that it is probable that a significant reversal in the amount of cumulative revenue recognized will not occur when the uncertainty associated with the variable consideration is subsequently resolved. The time between when a performance obligation is satisfied and when billing and payment occur is closely aligned and performance obligations do not extend beyond one year. As the transfer of control of our products results in an unconditional right to receive consideration, we did not record contract assets as of September 30, 2022 and December 31, 2021. Deferred revenue represents contractual amounts received from customers that exceed percentage of project completion that is in excess of costs incurred for automation equipment sales, as well as prepayments for machine fees. Customers prepay machine fees quarterly, which are deferred and then recognized as the performance obligations are satisfied over the next quarter. Our enforceable contractual obligations have durations of less than one year and are included in current liabilities on the unaudited condensed consolidated balance sheets. Changes in deferred revenue were as follows:
In addition to the disaggregation of revenue between paper, machine lease, and other revenue, we also disaggregate our revenue by segment geography to assist in evaluating the nature, timing, and uncertainty of revenue and cash flows that may be impacted by economic factors:
North America consists of the United States, Canada and Mexico, among others; Europe/Asia consists of European, Asian (including China), Pacific Rim, South American and African countries, among others. |
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Goodwill, Long-Lived Assets, Intangible Assets and Impairment |
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| Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Goodwill, Long-Lived and Intangible Assets, Net | Note 6 — Goodwill, Long-Lived Assets, Intangible Assets and Impairment Goodwill, Indefinite-Lived Intangible Assets and Impairment Goodwill represents the excess of purchase price over the fair value of net assets acquired. Trademarks and trade names are accounted for as indefinite-lived intangible assets and, accordingly, are not subject to amortization. We review goodwill on a reporting unit basis and indefinite-lived assets for impairment annually on October 1st and on an interim basis whenever events or changes in circumstances indicate the carrying value of goodwill or indefinite-lived intangible assets may be impaired. Declining market conditions within our reporting units and the decline in our share price triggered interim testing for impairment of goodwill and indefinite-lived intangible assets as of September 1, 2022. The test for goodwill used unobservable inputs that required significant judgement and were performed using a combination of the Discounted Cash Flow Method and the Guideline Public Company Method in order to determine fair value. The test for indefinite-lived intangible assets also used unobservable inputs that required significant judgement and were performed using the Relief from Royalty Method in order to determine fair value. Upon completion of the tests, we concluded that the fair value of our reporting units and indefinite-lived intangible assets exceeded their carrying values and were not impaired. The following table shows our goodwill balances by operating segment that are aggregated into one reportable segment:
Finite-Lived or Amortizable Intangible Assets, net Finite-lived or amortizable intangible assets consist of patented and unpatented technology, customer/distributor relationships, and other intellectual property. Impairment of Long-Lived Assets We review our long-lived assets, including amortizable intangible assets; property, plant and equipment; and lease right-of-use assets for impairment whenever events or changes in circumstances indicate the carrying amount of an asset may not be recoverable. For long-lived assets, an impairment loss is indicated when the undiscounted cash flows estimated to be generated by the asset group are not sufficient to recover the unamortized balance of the asset group. If indicators exist, the loss is measured as the excess of carrying value over the asset group’s fair value, as determined based on discounted future cash flows, asset appraisal and market values of similar assets. Declining market conditions within our long-lived asset groups and the decline in our share price indicated that the carrying amount of our asset groups may not be recoverable as of September 1, 2022. We performed an evaluation of our asset groups using unobservable inputs that required significant judgement and were performed using an undiscounted cash flow analysis. Upon completion of the evaluation, the undiscounted cash flows expected to be generated from the use and eventual disposition of the asset groups were compared to the carrying value of the asset groups and we concluded that the carrying amounts of our asset groups were recoverable and not impaired. The following tables summarize our identifiable intangible assets, net with definite and indefinite useful lives:
The following table shows the remaining estimated amortization expense for our definite-lived intangible assets at September 30, 2022:
Amortization expense was $7.1 million and $7.3 million in the third quarter of 2022 and 2021, respectively. Amortization expense was $21.7 million and $22.0 million in the nine months ended September 30, 2022 and 2021, respectively. The following table shows the remaining weighted-average useful life of our definite lived intangible assets as of September 30, 2022:
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Long-Term Debt |
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| Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Long-Term Debt | Note 7 — Long-Term Debt Ranger Pledgor LLC, a Delaware limited liability company (“Holdings”), Ranger Packaging LLC, a Delaware limited liability company (the “U.S. Borrower”), and Ranpak B.V., a private limited liability company under the laws of the Netherlands (the “Dutch Borrower” and together with the U.S. Borrower, the “Borrowers”), entered into a First Lien Credit Agreement on June 3, 2019 that provided for senior secured credit facilities to, in part, (i) fund a business combination, (ii) repay and terminate the existing indebtedness of Rack Holdings, and (iii) pay all fees, premiums, expenses and other transaction costs incurred in connection with the foregoing. The aggregate principal amount of the senior secured credit facilities consists of a $378.2 million dollar-denominated first lien term facility (the “First Lien Dollar Term Facility”), a €140.0 million ($152.6 million equivalent) euro-denominated first lien term facility (the “First Lien Euro Term Facility” and, together with the First Lien Dollar Term Facility, the “First Lien Term Facility”) and a $45.0 million revolving facility (the “Revolving Facility” and together with the First Lien Term Facility, the “Facilities”). The First Lien Term Facility matures in 2026 and the Revolving Facility matures in 2024. In June 2021, we prepaid $20.9 million of principal on the First Lien Dollar Term Facility (the “June 2021 Prepayment”). As of September 30, 2022 and December 31, 2021, no amounts were outstanding under the Revolving Facility. Long-term debt consisted of the following:
Borrowings under the Facilities, at the Borrowers’ option, bear interest at either (1) an adjusted eurocurrency rate or (2) a base rate, in each case plus an applicable margin. The applicable margin is 3.75% with respect to eurocurrency borrowings, assuming a first lien net leverage ratio of less than 5.00:1.00, subject to a leverage-based step-up to an applicable margin equal to 400 basis points for eurocurrency borrowings. The interest rate for the First Lien Dollar Term Facility as of September 30, 2022 and December 31, 2021 was 6.32% and 3.85%, respectively. The interest rate for the First Lien Euro Term Facility as of September 30, 2022 and December 31, 2021 was 3.95% and 3.75%, respectively. The Revolving Facility includes borrowing capacity available for standby letters of credit of up to $5.0 million. Any issuance of letters of credit will reduce the amount available under the Revolving Facility. As of September 30, 2022, we had $1.8 million committed to outstanding letters of credit, leaving net availability under the Revolving Facility at $43.2 million. The Facilities will provide the Borrowers with the option to increase commitments under the Facilities in an aggregate amount not to exceed the greater of $95.0 million and 100% of trailing-twelve months Consolidated EBITDA (as defined in the definitive documentation with respect to the Facilities), plus any voluntary prepayments of the debt financing (and, in the case of the Revolving Facility, to the extent such voluntary prepayments are accompanied by permanent commitment reductions under the Revolving Facility), plus unlimited amounts subject to the relevant net leverage ratio tests and certain other conditions. The obligations of (i) the U.S. Borrower under the Facilities and certain of its obligations under hedging arrangements and cash management arrangements are unconditionally guaranteed by Holdings and each existing and subsequently acquired or organized direct or indirect wholly-owned U.S. organized restricted subsidiary of Holdings (together with Holdings, the “U.S. Guarantors”) and (ii) the Dutch Borrower under the Facilities are unconditionally guaranteed by the U.S. Borrower, the U.S. Guarantors and each existing and subsequently acquired or organized direct or indirect wholly-owned Dutch organized restricted subsidiary of Holdings (the “Dutch Guarantors”, and together with the U.S. Guarantors, the “Guarantors”), in each case, other than certain excluded subsidiaries. The Facilities are secured by (i) a first priority pledge of the equity interests of the Borrowers and of each direct, wholly-owned restricted subsidiary of any Borrower or any Guarantor and (ii) a first priority security interest in substantially all of the assets of the Borrowers and the Guarantors (in each case, subject to customary exceptions), provided that obligations of the U.S. Borrower and U.S. Guarantors under the Facilities were not secured by assets of the Dutch Borrower or any Dutch Guarantor. The Facilities impose restrictions that require the Company to comply with or maintain certain financial tests and ratios. Such agreements restrict our ability to, among other things: (i) declare dividends or redeem or repurchase capital stock, including with respect to Class A common stock; (ii) prepay, redeem or purchase other debt; (iii) incur liens; (iv) make loans, guarantees, acquisitions and other investments; (v) incur additional indebtedness; (vi) engage in sale and leaseback transactions; (vii) amend or otherwise alter debt and other material agreements; (viii) engage in mergers, acquisitions and asset sales; (ix) engage in transactions with affiliates; and (x) enter into arrangements that would prohibit us from granting liens or restrict our ability to pay dividends, make loans or transfer assets among our subsidiaries. We were in compliance with all financial covenants as of September 30, 2022. On February 14, 2020, the Borrowers, Holdings, certain other subsidiaries of Holdings, certain lenders party to Amendment No. 1 (as defined below) and Goldman Sachs Lending Partners LLC (the “Administrative Agent”) entered into the Amendment No. 1 to First Lien Credit Agreement (“Amendment No. 1”) to amend the First Lien Credit Agreement, dated as of June 3, 2019 among the Borrowers, Holdings, the lenders, the issuing banks and the Administrative Agent (as amended, restated, supplemented or otherwise modified from time to time, the “Credit Agreement”). Among other things, the Amendment No. 1 amends the Credit Agreement such that (i) the requirement of the Borrowers to apply excess cash flow to mandatorily prepay term loans under the Credit Agreement commences with the fiscal year ending December 31, 2021 (instead of the fiscal year ending December 31, 2020) and (ii) the aggregate amount per fiscal year of capital stock of any parent company of the U.S. Borrower that is held by directors, officers, management, employees, independent contractors or consultants of the U.S. Borrower (or any parent company or subsidiary thereof) that the U.S. Borrower may repurchase, redeem, retire or otherwise acquire or retire for value has been increased to the greater of $10.0 million and 10% of Consolidated Adjusted EBITDA (as defined in the Credit Agreement) (increased from the greater of $7.0 million and 7% of Consolidated Adjusted EBITDA) as of the last day of the most recently ended four fiscal quarter period for which financial statements have been delivered. On July 1, 2020, we entered into a borrower assumption agreement (“Borrower Assumption Agreement”), which provided that, in the following order, (i) Rack Holdings Inc. merged with and into Ranger Packaging LLC, with Ranger Packaging LLC as the surviving entity of such merger and (ii) Ranger Packaging LLC merged with and into Ranpak Corp., with Ranpak Corp. as the surviving entity of such merger (clauses (i) and (ii) collectively, the “Reorganization”). Contemporaneously with the Reorganization, Ranger Packaging LLC, Ranpak Corp., Ranger Pledgor LLC, certain other subsidiaries of Ranger Pledgor LLC and Goldman Sachs Lending Partners LLC entered into the Borrower Assumption Agreement whereby, among other things, Ranpak Corp. assumed all obligations, liabilities and rights of Ranger Packaging LLC as the U.S. Borrower under the Facilities. Under the First Lien Term Facility agreement, our lower leverage ratio at December 31, 2020 required us to pay our lenders an $8.2 million exit payment (the “Exit Payment”), which was paid in the first quarter of 2021. As a result of making the Exit Payment to our lenders, we became eligible to enter into the Permitted Exit Payment Amendment (as defined in the Credit Agreement) to the Credit Agreement which, among other things, would introduce additional exceptions to the negative covenant that restricts the ability of the Borrowers and their restricted subsidiaries from paying dividends and distributions or repurchasing capital stock. On July 28, 2021, the Permitted Exit Payment Amendment to the Credit Agreement became effective. |
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Derivative Instruments |
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| Derivative Instruments and Hedging Activities Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Derivative Instruments | Note 8 — Derivative Instruments We use derivatives as part of the normal business operations to manage our exposure to fluctuations in interest rates associated with variable interest rate debt and fluctuations in foreign currency translation associated with our global business presence. These derivatives can help decrease the volatility of cash flows affected by changes in interest rates and foreign currency exchange rates. On January 31, 2019, the Company entered into a business combination contingent interest rate swap in a notional amount of $200.0 million (the “January 2019 Swap”) to hedge part of the floating interest rate exposure under the First Lien Dollar Term Facility. The January 2019 Swap became effective on June 3, 2019 and would have terminated on June 3, 2022. The January 2019 Swap economically converts a portion of the variable rate debt to fixed rate debt. The Company receives floating interest payments monthly based on one-month LIBOR and pays a fixed rate of 2.56% to the counterparty. Prior to September 25, 2019, the Company did not apply hedge accounting to the January 2019 Swap. Changes in fair value were recorded to interest expense. On September 25, 2019, the Company amended the January 2019 Swap to extend its term to mature on June 1, 2023 and lower the rate to 2.31% (the “Amended January 2019 Swap”). We concurrently entered into an incremental $50.0 million notional swap at 1.5% and maturing on June 1, 2023 (the “September 2019 Swap”). Additionally, on September 25, 2019, we designated as cash flow hedges the Amended January 2019 Swap and the September 2019 Swap and applied hedge accounting. Interest rate swaps designated as cash flow hedges involve the receipt of variable amounts from a counterparty in exchange for us making fixed-rate payments over the life of the contract agreements without exchange of the underlying notional amount. Changes in fair value are recorded in accumulated other comprehensive income and subsequently reclassified into interest expense in the same period during which the hedged transaction affects earnings. On March 27, 2020, we entered into an interest rate swap that amended the Amended January 2019 Swap to a lower rate of 2.1% and extended the maturity to June 1, 2024 (the “Second Amended January 2019 Swap”). We designated the Second Amended January 2019 Swap as a cash flow hedge and applied hedge accounting. A summary of our interest rate swaps is as follows:
The Second Amended January 2019 Swap contains an insignificant financing element that is amortized over the term of the hedging relationship. As of September 30, 2022, we anticipate having to reclassify $5.4 million from accumulated other comprehensive income into earnings during the next twelve months to offset the variability of the hedged items during this period. On September 1, 2021, we entered into a cross currency swap (the “September 2021 Swap”) to protect our net investment in a European subsidiary and hedge against the risk of adverse changes in the exchange rate of the Euro and U.S. dollar (“USD”). On September 1, 2021, we designated the September 2021 Swap as a net investment hedge. The September 2021 Swap involves the receipt of fixed-rate amounts from a counterparty in exchange for us making fixed-rate payments over the life of the contract without exchange of the underlying notional amounts. At a spot exchange rate of 1.1835, we converted notional amounts of approximately $80.0 million at 5.84% for €67.6 million at 5.02%. The change in fair value of the September 2021 Swap is recorded in currency translation in other comprehensive income (loss) and accumulated other comprehensive income (loss). Components of the September 2021 Swap excluded from the assessment of effectiveness are amortized out of accumulated other comprehensive income (loss) and into interest expense over the life of the September 2021 Swap to maturity on June 1, 2024. In February 2022, we terminated the September 2021 Swap. The resulting cash inflow of approximately $2.1 million is recorded within other comprehensive income. We simultaneously entered into another cross-currency swap (the “February 2022 Swap”) and designated it as a net investment hedge. The February 2022 Swap involves the receipt of fixed-rate amounts from a counterparty in exchange for us making fixed-rate payments over the life of the contract without exchange of the underlying notional amounts. At a spot exchange rate of 1.1345, we converted notional amounts of approximately $80.0 million at 5.84% for €70.5 million at 4.37%. The change in fair value of the February 2022 Swap is recorded in currency translation in other comprehensive income (loss) and accumulated other comprehensive income. Components of the February 2022 Swap excluded from the assessment of effectiveness are amortized out of accumulated other comprehensive income and into interest expense over the life of the February 2022 Swap to maturity on June 1, 2024. In April 2022, we terminated the February 2022 Swap, resulting in a cash inflow of approximately $2.8 million. We simultaneously entered into another cross-currency swap (the “April 2022 Swap”) and designated it as a net investment hedge. The April 2022 Swap involves the receipt of fixed-rate amounts from a counterparty in exchange for us making fixed-rate payments over the life of the contract without exchange of the underlying notional amounts. At a spot exchange rate of 1.0827, we converted notional amounts of approximately $80.0 million at 5.84% for €73.9 million at 3.93%. The change in fair value of the April 2022 Swap is recorded in currency translation in other comprehensive income (loss) and accumulated other comprehensive income. Components of the April 2022 Swap excluded from the assessment of effectiveness are amortized out of accumulated other comprehensive income and into interest expense over the life of the April 2022 Swap to maturity on June 1, 2024. In July 2022, we terminated the April 2022 Swap, resulting in a cash inflow of approximately $5.1 million. The following table summarizes the total fair values of derivative assets and liabilities and the respective classification in the condensed consolidated balance sheets as of September 30, 2022 and December 31, 2021. The net amount of derivatives can be reconciled to the tabular disclosure of fair value in Note 10, “Fair Value Measurement”:
The following table presents the effect of our derivative financial instruments on our unaudited condensed consolidated statements of operations. The income effects of our derivative activities are reflected in interest expense.
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| Equity [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Accumulated Other Comprehensive Income (Loss) | Note 9 — Accumulated Other Comprehensive Income (Loss) Accumulated other comprehensive income (loss) is a separate line within the unaudited condensed consolidated statements of equity that reports our cumulative income (loss) that has not been reported as part of net income (loss). The components of accumulated other comprehensive income (loss) at September 30, 2022 and December 31, 2021 were as follows:
The following table presents the changes in accumulated other comprehensive income (loss) by component:
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Fair Value Measurement |
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| Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Fair Value Measurement | Note 10 — Fair Value Measurement Financial instruments are required to be categorized within a valuation hierarchy based upon the lowest level of input that is significant to the fair value measurement. Assets and liabilities recorded at fair value are measured and classified in accordance with a three-tier fair value hierarchy based on the observability of the inputs available in the market used to measure fair value: • Level 1 — Observable inputs that reflect quoted prices (unadjusted) for identical assets or liabilities in active markets. • Level 2 — Inputs that are based upon quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active, and model-based valuation techniques for which all significant inputs are observable in the market or can be derived from observable market data. • Level 3 — Unobservable inputs that are supported by little or no market activities. The carrying values of cash and cash equivalents (primarily consisting of bank deposits and a money market fund), accounts receivable and accounts payable approximate their fair values due to the short-term nature of these instruments as of September 30, 2022 and December 31, 2021. The following table provides the carrying amounts, estimated fair values and the respective fair value measurements of our financial instruments as of September 30, 2022 and December 31, 2021:
The money market fund is valued at net asset value and is considered a Level 1 measurement. The money market fund's carrying value approximates its value fair due to the short-term nature of the investment. The fair value of outstanding long-term debt is based on prices and other relevant information generated by market transactions involving identical or comparable debt instruments, which represents a Level 2 measurement. Derivative positions are classified within Level 2 of the valuation hierarchy as they are valued using quoted market prices for similar assets and liabilities in active markets. |
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Income Taxes |
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| Income Tax Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||
| Income Taxes | Note 11 — Income Taxes For each interim reporting period, we make an estimate of the effective tax rate we expect to be applicable for the full year for our operations. This estimated effective tax rate is used in providing for income taxes on a year-to-date basis. Our effective tax rate was as follows:
The fluctuation in the effective tax rate over the periods presented above was primarily attributable to a jurisdictional mix of income between periods. The effective tax rate differs from the U.S. federal statutory rate due primarily to benefits derived from stock-based compensation, the U.S. foreign-derived intangible income deduction, tax credits available in the U.S., and income in foreign jurisdictions that are taxed at different rates than the U.S. statutory tax rate. We are subject to taxation in the United States (federal, state, local) and foreign jurisdictions. As of September 30, 2022, tax years 2019 through 2021 are subject to examination by the tax authorities. Pursuant to ASC 740, Income Taxes (“ASC 740”), as of each balance sheet date, we assess our uncertain tax positions to determine whether factors underlying the sustainability assertion have changed. As of September 30, 2022, such factors have not changed and no additional adjustments are necessary. |
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Leases |
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| Leases [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Leases | Note 12 — Leases We lease automobiles, machinery, equipment, warehouses, and office buildings. We account for these leases in accordance with ASC 842 by recording right-of-use assets and lease liabilities. The right-of-use asset represents our right to use underlying assets for the lease term and the lease liability represents our obligation to make lease payments under the leases. We determine if an arrangement is or contains a lease at contract inception and exercise judgment and apply certain assumptions when determining the discount rate, lease term, and lease payments. ASC 842 requires a lessee to record a lease liability based on the discounted unpaid lease payments using the interest rate implicit in the lease or, if the rate cannot be readily determined, the incremental borrowing rate. Generally, we do not have knowledge of the rate implicit in the lease and, therefore, we use the incremental borrowing rate for a lease. The lease term includes the non-cancelable period of the lease plus any additional periods covered by an option to extend that we are reasonably certain to exercise. Operating leases and finance leases are included in the condensed consolidated balance sheets as follows:
The components of lease costs, which are included in income from operations in our condensed consolidated statements of operations and comprehensive income (loss), were as follows:
Maturities of lease liabilities as of September 30, 2022 are as follows:
Additional information related to leases is presented as follows:
As previously noted, our machine lease revenue is accounted for under ASC 842 and is recognized on a straight-line basis over the terms of the agreements with customers, which have durations of less than one year. |
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Commitments and Contingencies |
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Sep. 30, 2022 | |
| Commitments and Contingencies Disclosure [Abstract] | |
| Commitments and Contingencies | Note 13 — Commitments and Contingencies Litigation We are subject to legal proceedings and claims that arise in the ordinary course of our business. Management evaluates each claim and provides for potential loss when the claim is probable to be paid and reasonably estimable. While adverse decisions in certain of these litigation matters, claims and administrative proceedings could have a material effect on a particular period’s results of operations, subject to the uncertainties inherent in estimating future costs for contingent liabilities, management believes that any future accruals with respect to these currently known contingencies would not have a material effect on the financial condition, liquidity or cash flows of the Company. There are no amounts required to be reflected in these unaudited interim condensed consolidated financial statements related to contingencies for the three and nine months ended September 30, 2022. Environmental Matters Our operations are subject to extensive and changing U.S. federal, state and local laws and regulations, as well as the laws of other countries that establish health and environmental quality standards. These standards, among others, relate to air and water pollutants and the management and disposal of hazardous substances and wastes. We are exposed to potential liability for personal injury or property damage caused by any release, spill, exposure or other accident involving such pollutants, substances or wastes. There are no amounts required to be reflected in these unaudited interim consolidated financial statements related to environmental contingencies. Management believes the Company is in compliance, in all material respects, with environmental laws and regulations and maintains insurance coverage to mitigate exposure to environmental liabilities. Management does not believe any environmental matters will have a material adverse effect on the Company’s future consolidated results of operations, financial position or cash flows. Guarantees We issue bank guarantees from time to time for various purposes that arise out of the normal course of business. These amounts are immaterial for all periods presented. |
Stock-Based Compensation |
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| Share-Based Payment Arrangement [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Stock-Based Compensation | Note 14 — Stock-Based Compensation We expense the fair value of grants of various stock-based compensation programs over the vesting period of the awards. Stock compensation expense is recorded in selling, general, and administrative expenses in the condensed consolidated statements of operations. Awards granted are recognized as compensation expense based on the grant date fair value, estimated in accordance with ASC 718, Compensation – Stock Compensation. The grant date fair value is the closing price of our stock on the grant date. Failure to satisfy the threshold service or performance conditions results in the forfeiture of shares. Forfeiture of share awards with service conditions or performance-based restrictions results in a reversal of previously recognized share-based compensation expense so long as the awards were probable of vesting. Stock compensation expense includes actual forfeitures incurred. The table below summarizes certain data for our stock-based compensation plans:
The Ranpak Holdings Corp. 2019 Omnibus Incentive Plan (the “2019 Plan”) rewards employees and other individuals to perform at their highest level and contribute significantly to the success of the Company. The 2019 Plan is an omnibus plan that may provide these incentives through grants of stock options, stock appreciation rights, restricted stock, restricted stock units (“RSU” or “RSUs”), performance awards, other cash-based awards and other stock-based awards to employees, directors, or consultants of the Company. At the annual meeting in May 2021, shareholders approved an amendment to the 2019 Plan (the “Amended Plan”) that authorized an additional 9.0 million shares for issuance for future awards. As of September 30, 2022, the pool of shares in the 2019 Plan is summarized as follows:
Restricted Stock Units — RSUs represent a right to receive one share of our common stock that is both nontransferable and forfeitable unless and until certain conditions are satisfied. Typically, RSUs vest ratably over a two-year period. The fair value of RSUs is determined on the grant date and is amortized over the vesting period on a ratable basis. Performance-Based Restricted Stock Units — Performance-based restricted stock units (“PRSU” or “PRSUs”) represent a right to receive, to the extent vested and earned, one share of our common stock. Our PRSUs generally follow two forms. One form of PRSU vests over a three-year period with the number of the awards to be earned determined at the end of the initial one-year performance period, based upon attainment of specific business performance goals during such initial one-year performance period. If certain minimum performance levels are not attained in the initial one-year performance period, the awards will be automatically forfeited before vesting. The awards are variable in that PRSUs earned could range from 0% to 150% of the target number of PRSUs granted, contingent on the performance level attained. In connection with the shareholders approving the Amended Plan, certain executive officers and key employees received a special long-term incentive PRSU award (the “2021 LTIP PRSUs”). The 2021 LTIP PRSUs are generally eligible to be earned based on performance against pre-established performance metrics during our 2023, 2024 and 2025 fiscal years. One-third of the 2021 LTIP PRSUs are eligible to be earned and vest on each of January 1, 2024, January 1, 2025, and January 1, 2026 based on the achievement of performance goals during the one-year period immediately preceding the vesting date (each such one-year period, a “2021 LTIP PRSU Measurement Period”), subject to continued employment on each such vesting date. The number of PRSUs eligible to be earned in respect of each such 2021 LTIP PRSU Measurement Period will be equal to one-third of the target number of PRSUs multiplied by a percentage that corresponds to the level of achievement of our performance goals. The awards are variable in that the PRSUs earned could range from 0% to 300% of the target number of PRSUs granted contingent on the performance level attained. The fair value of our PRSUs is determined on the grant date. Compensation cost for these awards is recognized based on the probability of achievement of the performance-based conditions. Activity of our RSUs and PRSUs is as follows:
Director Stock Units — Members of the Company’s Board of Directors (“Director(s)”) may elect to receive their quarterly retainer fees in the form of Class A common shares that are covered by an active shelf registration statement. The retainers are paid quarterly, in arrears in the form of cash or stock at the Director’s election, and vest upon issuance. These shares are priced at the closing price of the last business day of the calendar quarter. Additionally, Directors are granted an annual award of RSUs of $0.1 million on the date of the annual shareholder meeting. The number of RSUs is determined by the closing price of Ranpak stock on that date. These RSUs vest at the earlier of the (i) anniversary of the grant date or (ii) the following annual shareholder meeting. The following table includes the number of shares granted and vested for Directors electing to receive retainer payments in shares:
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Earnings (Loss) per Share |
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| Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Earnings (Loss) per Share | Note 15 — Earnings (Loss) per Share Basic earnings (loss) per share (“EPS”) is computed by dividing net income (loss) available to common stockholders by the weighted-average number of shares of common stock outstanding during the period, excluding the effects of any potentially dilutive securities. Diluted EPS gives effect to the potential dilution, if any, that could occur if securities or other contracts to issue common stock were exercised or converted into common stock, using the more dilutive of the two-class method or if-converted method. Diluted EPS excludes potential shares of common stock if their effect is anti-dilutive. If there is a net loss in any period, basic and diluted EPS are computed in the same manner. The two-class method determines net income (loss) per common share for each class of common stock and participating securities according to dividends declared or accumulated and participation rights in undistributed earnings. The two-class method requires income available to common shareholders for the period to be allocated between different classes of common stock and participating securities based upon their respective rights to receive dividends as if all income for the period had been distributed. We apply the two-class method for EPS when computing net income (loss) per Class A and Class C common shares. As of September 30, 2022, we have not issued any instruments that are considered to be participating securities. Weighted average shares of Class A and Class C common stock have been combined in the denominator of basic and diluted earnings (loss) per share because they have equivalent economic rights. The following table sets forth the computation of our earnings (loss) per share:
The dilutive effect of 0.5 million and 1.2 million shares in the three months ended September 30, 2022 and 2021, respectively, and 0.9 million and 0.4 million shares in the nine months ended September 30, 2022 and 2021, respectively, was omitted from the calculation of diluted weighted-average shares outstanding and diluted earnings per share because we were in a loss position. The following securities were not included in the computation of diluted shares outstanding because the effect would be anti-dilutive or because milestones were not yet achieved for awards contingent on the achievement of performance milestones:
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Transactions with Related Parties |
9 Months Ended |
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Sep. 30, 2022 | |
| Related Party Transactions [Abstract] | |
| Transactions with Related Parties | Note 16 — Transactions with Related Parties On June 3, 2019, upon the closing of Ranpak’s business combination with One Madison Corporation, Ranpak entered into a shared services agreement (the “Shared Services Agreement”) with One Madison Group LLC (the “Sponsor”), pursuant to which the Sponsor may provide, or cause to be provided, certain services to Ranpak. The Shared Services Agreement provides for a broad array of potential services, including administrative and “back office” or corporate-type services and requires Ranpak to indemnify the Sponsor in connection with the services provided by the Sponsor to Ranpak. Total fees under the agreement were $0.1 million for the third quarter of 2022 and 2021. Total fees under the agreement amounted to approximately $0.2 million and $0.3 million for the nine months ended September 30, 2022 and 2021, respectively. |
Shareholders' Equity |
9 Months Ended |
|---|---|
Sep. 30, 2022 | |
| Equity [Abstract] | |
| Shareholders' Equity | Note 17 — Shareholders' Equity On July 26, 2022, the Directors authorized a general share repurchase program of the Company’s Class A common stock of up to $50.0 million, with a 36-month expiration. These Class A common stock repurchases may occur in transactions that may include, without limitation, tender offers, open market purchases, accelerated share repurchases, negotiated block purchases, and transactions effected through plans under Rule 10b5-1 of the Securities Exchange Act of 1934. The timing and actual amount of shares repurchased will depend on a variety of different factors and may be modified, suspended or terminated at any time at the discretion of the Directors. |
Basis of Presentation and Summary of Significant Accounting Policies (Policies) |
9 Months Ended |
|---|---|
Sep. 30, 2022 | |
| Accounting Policies [Abstract] | |
| Principles of Consolidation | Principles of Consolidation — The unaudited interim condensed consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries prepared in conformity with GAAP. All intercompany balances and transactions have been eliminated in consolidation and certain immaterial prior year amounts have been reclassified consistent with current year presentation. All amounts are in millions, except share and per share amounts and are approximate due to rounding. |
| Use of Estimates | Use of Estimates — The preparation of condensed consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the condensed consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from these estimates and such differences could be material. |
| Foreign Currency | Foreign Currency — The nature of business activities involves the management of various financial and market risks, including those related to changes in foreign currency exchange rates. The functional currency of our operating subsidiaries outside the U.S. is the applicable local currency. For those operations, assets and liabilities are translated into U.S. dollars at period-end exchange rates and revenues and expenses are translated into U.S. dollars using average monthly exchange rates. |
| Investments in Small Private Businesses | Investments in Small Private Businesses — In the third quarter of 2021, we paid consideration of $9.2 million in exchange for minority ownership interests in two small private businesses. We do not have power to direct the activities of these businesses and do not have significant economic exposure related to these investments. These investments do not require consolidation and are immaterial to our condensed consolidated financial statements. In the third quarter of 2022, we invested an additional $2.1 million in one of the small private businesses. Further, we adjusted the carrying value of our initial investment in the small private business due to an observable price change for a similar or identical investment, a Level 2 fair value measurement. This resulted in an unrealized gain of $3.9 million, which is recorded in other non-operating expense (income), net in the condensed consolidated financial statements. The adjusted value of our investment in this small private business continues to be immaterial to our condensed consolidated financial statements. |
| Recently Adopted Accounting Standards and Recently Issued Accounting Standards | Recently Adopted Accounting Standards — We have adopted all applicable accounting standards and did not adopt any new accounting standards issued by the Financial Accounting Standards Board (“FASB”) in 2022. Recently Issued Accounting Standards — As of September 30, 2022, it is not expected that the future adoption of any recently issued accounting pronouncements by the FASB will have a material impact on our financial position, results of operations or cash flows. |
Supplemental Balance Sheet Data and Cash Flow Information (Tables) |
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| Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Components of Accounts Receivable, Net | Accounts Receivable, net — The components of accounts receivable, net were as follows:
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| Schedule of Inventory, Net | Inventories, net — The components of inventories, net were as follows:
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| Property, Plant and Equipment | Property, Plant and Equipment, net — The following table details our property, plant and equipment, net:
Depreciation expense recorded in cost of goods sold and depreciation and amortization in the unaudited condensed consolidated statements of operations and comprehensive income (loss) was as follows:
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| Schedule of Accrued Liabilities and Other | Accrued Liabilities and Other – The components of accrued liabilities and other were as follows:
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| Schedule of Cash Flow, Supplemental Disclosures | Supplemental Cash Flow Information — Supplemental cash flow information is as follows:
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Segment and Geographic Information (Tables) |
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| Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Schedule of Revenue, Segment Gross Profit from External Customers, Certain Expenses and Long-Lived Assets, by Geographical Areas | We attribute revenue and gross profit to individual countries based on the selling location. Our products are primarily sold from North America and Europe. As previously noted, segment gross profit includes certain depreciation and amortization expenses that are included in cost of goods sold.
Our customers are not concentrated in any specific geographic region. During the nine months ended September 30, 2022 and 2021, no customers exceeded 10% of net revenue. The following table presents our long-lived assets by geographic region:
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Revenue Recognition, Contracts with Customers (Tables) |
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Sep. 30, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Revenue from Contract with Customer [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Schedule of Change in Deferred Revenue | Our enforceable contractual obligations have durations of less than one year and are included in current liabilities on the unaudited condensed consolidated balance sheets. Changes in deferred revenue were as follows:
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| Revenue from Contracts with Customers Summarized by Segment Geography | In addition to the disaggregation of revenue between paper, machine lease, and other revenue, we also disaggregate our revenue by segment geography to assist in evaluating the nature, timing, and uncertainty of revenue and cash flows that may be impacted by economic factors:
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Goodwill, Long-Lived Assets, Intangible Assets and Impairment (Tables) |
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| Goodwill and Intangible Assets Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Schedule of Goodwill Balances by Operating Segment | The following table shows our goodwill balances by operating segment that are aggregated into one reportable segment:
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| Schedule of Indefinite-Lived Intangible Assets | The following tables summarize our identifiable intangible assets, net with definite and indefinite useful lives:
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| Finite-lived Intangible Assets Amortization Expense | The following table shows the remaining estimated amortization expense for our definite-lived intangible assets at September 30, 2022:
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| Schedule of Finite-Lived Intangible Assets | The following table shows the remaining weighted-average useful life of our definite lived intangible assets as of September 30, 2022:
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Long-Term Debt (Tables) |
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Sep. 30, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Schedule of Long-term Debt Instruments | Long-term debt consisted of the following:
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Derivative Instruments (Tables) |
9 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2022 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Derivative Instruments and Hedging Activities Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Schedule of Derivative Instruments | A summary of our interest rate swaps is as follows:
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| Schedule of Derivative Assets at Fair Value | The net amount of derivatives can be reconciled to the tabular disclosure of fair value in Note 10, “Fair Value Measurement”:
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| Schedule of Derivative Instruments, Gain (Loss) | The following table presents the effect of our derivative financial instruments on our unaudited condensed consolidated statements of operations. The income effects of our derivative activities are reflected in interest expense.
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Accumulated Other Comprehensive Income (Loss) (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Equity [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Components of AOCI | The components of accumulated other comprehensive income (loss) at September 30, 2022 and December 31, 2021 were as follows:
The following table presents the changes in accumulated other comprehensive income (loss) by component:
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Fair Value Measurement (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Fair Value Measurements, Recurring and Nonrecurring | The following table provides the carrying amounts, estimated fair values and the respective fair value measurements of our financial instruments as of September 30, 2022 and December 31, 2021:
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Income Taxes (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Sep. 30, 2022 | |||||||||||||||||||||||||||||||||||||
| Income Tax Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||
| Schedule of Effective Income Tax Rate Reconciliation | Our effective tax rate was as follows:
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Leases (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Leases [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Operating Leases and Finance Leases included in Condensed Consolidated Balance Sheets | Operating leases and finance leases are included in the condensed consolidated balance sheets as follows:
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| Summary of Components of Lease Costs | The components of lease costs, which are included in income from operations in our condensed consolidated statements of operations and comprehensive income (loss), were as follows:
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| Summary of Maturities of Lease Liabilities | Maturities of lease liabilities as of September 30, 2022 are as follows:
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| Summary of Additional Information Related to Leases | Additional information related to leases is presented as follows:
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Stock-Based Compensation (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Share-Based Payment Arrangement [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Share-based Payment Arrangement, Cost by Plan | The table below summarizes certain data for our stock-based compensation plans:
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| Share-based Payment Arrangement, Activity | As of September 30, 2022, the pool of shares in the 2019 Plan is summarized as follows:
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| Share-based Payment Arrangement, Restricted Stock Unit, Activity | Activity of our RSUs and PRSUs is as follows:
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| Share-based Payment Arrangement, Nonemployee Director Award Plan, Activity |
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Earnings (Loss) per Share (Tables) |
9 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2022 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Earnings Per Share [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Schedule of Earnings Per Share, Basic and Diluted | Weighted average shares of Class A and Class C common stock have been combined in the denominator of basic and diluted earnings (loss) per share because they have equivalent economic rights. The following table sets forth the computation of our earnings (loss) per share:
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| Schedule of Antidilutive Securities Excluded from Computation of Earnings | The following securities were not included in the computation of diluted shares outstanding because the effect would be anti-dilutive or because milestones were not yet achieved for awards contingent on the achievement of performance milestones:
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Basis of Presentation and Summary of Significant Accounting Policies - Narrative (Details) - USD ($) $ in Millions |
9 Months Ended | |
|---|---|---|
Sep. 30, 2022 |
Sep. 30, 2021 |
|
| Accounting Policies [Abstract] | ||
| Other Ownership Interests, Contributed Capital | $ 9.2 | |
| Unrealized gain on investments in small private businesses | $ 3.9 | |
| Additional Investment In Private Business | $ 2.1 | |
Supplemental Balance Sheet Data and Cash Flow Information - Components of Accounts Receivable, Net (Details) - USD ($) $ in Millions |
Sep. 30, 2022 |
Dec. 31, 2021 |
|---|---|---|
| Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
| Accounts receivable | $ 37.1 | $ 44.7 |
| Allowance for doubtful accounts | (0.7) | (1.0) |
| Accounts receivable, net | $ 36.4 | $ 43.7 |
Supplemental Balance Sheet Data and Cash Flow Information - Narrative (Details) - USD ($) shares in Millions, $ in Millions |
1 Months Ended | 9 Months Ended | 12 Months Ended | |
|---|---|---|---|---|
May 31, 2021 |
Sep. 30, 2022 |
Dec. 31, 2021 |
Jun. 30, 2021 |
|
| Accounts Notes And Loans Receivable [Line Items] | ||||
| Cash | $ 35.1 | $ 70.0 | ||
| First Lien Dollar Term Facility | ||||
| Accounts Notes And Loans Receivable [Line Items] | ||||
| Prepaid of principal amount | $ 20.9 | |||
| Allotment Option | ||||
| Accounts Notes And Loans Receivable [Line Items] | ||||
| Sale of stock, number of shares issued in transaction (shares) | 0.8 | |||
| Class A | ||||
| Accounts Notes And Loans Receivable [Line Items] | ||||
| Sale of stock, number of shares issued in transaction (shares) | 4.5 | |||
| Sale of stock, consideration received per transaction | $ 103.4 | |||
| No Customer | Maximum | Accounts Receivable | Customer Concentration Risk | ||||
| Accounts Notes And Loans Receivable [Line Items] | ||||
| Concentration risk, percentage | 10.00% | 10.00% |
Supplemental Balance Sheet Data and Cash Flow Information - Schedule of Inventory, Net (Details) - USD ($) $ in Millions |
Sep. 30, 2022 |
Dec. 31, 2021 |
|---|---|---|
| Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
| Raw materials | $ 15.9 | $ 19.5 |
| Work-in-process | 8.1 | 1.2 |
| Finished goods | 8.6 | 12.5 |
| Total inventories | 32.6 | 33.2 |
| Reserve for obsolescence | (0.3) | (0.3) |
| Inventories, net | $ 32.3 | $ 32.9 |
Supplemental Balance Sheet Data and Cash Flow Information - Schedule of Property. Plant and Equipment (Details) - USD ($) $ in Millions |
Sep. 30, 2022 |
Dec. 31, 2021 |
|---|---|---|
| Property, Plant and Equipment [Line Items] | ||
| Total property, plant, and equipment | $ 228.4 | $ 212.4 |
| Accumulated depreciation | (109.5) | (86.1) |
| Property, plant, and equipment, net | 118.9 | 126.3 |
| Land | ||
| Property, Plant and Equipment [Line Items] | ||
| Total property, plant, and equipment | 3.9 | 4.1 |
| Buildings and Improvements | ||
| Property, Plant and Equipment [Line Items] | ||
| Total property, plant, and equipment | 8.5 | 9.2 |
| Machinery and Equipment | ||
| Property, Plant and Equipment [Line Items] | ||
| Total property, plant, and equipment | 36.7 | 22.3 |
| Computer and office equipment | ||
| Property, Plant and Equipment [Line Items] | ||
| Total property, plant, and equipment | 10.3 | 12.7 |
| Converting Machines | ||
| Property, Plant and Equipment [Line Items] | ||
| Total property, plant, and equipment | $ 169.0 | $ 164.1 |
Supplemental Balance Sheet Data and Cash Flow Information - Schedule of Depreciation Expense (Details) - USD ($) $ in Millions |
3 Months Ended | 9 Months Ended | ||
|---|---|---|---|---|
Sep. 30, 2022 |
Sep. 30, 2021 |
Sep. 30, 2022 |
Sep. 30, 2021 |
|
| Property, Plant and Equipment [Line Items] | ||||
| Depreciation | $ 9.0 | $ 11.2 | $ 31.1 | $ 32.4 |
| Cost of goods sold | ||||
| Property, Plant and Equipment [Line Items] | ||||
| Depreciation | 8.3 | 9.8 | 28.7 | 28.3 |
| Depreciation and amortization expense | ||||
| Property, Plant and Equipment [Line Items] | ||||
| Depreciation | $ 0.7 | $ 1.4 | $ 2.4 | $ 4.1 |
Supplemental Balance Sheet Data and Cash Flow Information - Schedule of Accrued Liabilities and Other (Details) - USD ($) $ in Millions |
Sep. 30, 2022 |
Dec. 31, 2021 |
|---|---|---|
| Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
| Employee compensation | $ 2.4 | $ 1.5 |
| Taxes | 9.8 | 6.9 |
| Professional fees | 1.3 | 4.6 |
| Bonus | 0.5 | 10.1 |
| Interest | 1.8 | 1.7 |
| Interest rate swap liability, current portion | 0.0 | 3.8 |
| Other | 1.9 | 2.9 |
| Accrued liabilities and other | $ 17.7 | $ 31.5 |
Supplemental Balance Sheet Data and Cash Flow Information - Supplemental Cash Flow Information (Details) - USD ($) $ in Millions |
3 Months Ended | 9 Months Ended | ||
|---|---|---|---|---|
Sep. 30, 2022 |
Sep. 30, 2021 |
Sep. 30, 2022 |
Sep. 30, 2021 |
|
| Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||||
| Interest paid | $ 4.9 | $ 5.6 | $ 15.2 | $ 16.5 |
| Income taxes paid | 0.3 | 2.1 | 2.1 | 7.1 |
| Non-cash investing activities | ||||
| Right-of-use assets obtained in exchange for lease liabilities | 0.8 | 0.1 | 1.1 | 10.7 |
| Capital expenditures in accounts payable | $ 0.0 | $ 0.0 | $ 0.4 | $ 0.3 |
Segment and Geographic Information - Narrative (Details) - Segment |
9 Months Ended | |
|---|---|---|
Sep. 30, 2022 |
Sep. 30, 2021 |
|
| Revenues from External Customers and Long-Lived Assets [Line Items] | ||
| Number of operating segments | 2 | |
| Number of reportable segments | 1 | |
| No Customer | Revenue | Customer Concentration Risk | ||
| Revenues from External Customers and Long-Lived Assets [Line Items] | ||
| Concentration risk, percentage | 10.00% | 10.00% |
Segment and Geographic Information - Schedule of Revenue, Segment Gross Profit from External Customers, Certain Expenses and Long-Lived Assets, by Geographical Areas (Details) - USD ($) $ in Millions |
3 Months Ended | 9 Months Ended | |||
|---|---|---|---|---|---|
Sep. 30, 2022 |
Sep. 30, 2021 |
Sep. 30, 2022 |
Sep. 30, 2021 |
Dec. 31, 2021 |
|
| Segment Reporting Information [Line Items] | |||||
| Revenues | $ 77.8 | $ 97.1 | $ 247.1 | $ 274.8 | |
| Gross profit | 24.4 | 38.0 | 77.3 | 110.0 | |
| Selling, general and administrative expenses | 26.8 | 27.1 | 86.8 | 70.8 | |
| Depreciation and amortization expense | 7.8 | 8.7 | 24.0 | 26.1 | |
| Other operating expense (income), net | 1.5 | (0.1) | 3.4 | 2.0 | |
| Interest expense | 5.3 | 5.5 | 15.2 | 17.1 | |
| Foreign currency gain | (1.2) | (1.5) | (4.1) | (3.9) | |
| Other non-operating income, net | (4.0) | 0.0 | (4.0) | 0.0 | |
| Income (loss) before income tax benefit | (11.8) | (1.7) | (44.0) | (2.1) | |
| Long-lived assets | 124.7 | 124.7 | $ 126.3 | ||
| North America | |||||
| Segment Reporting Information [Line Items] | |||||
| Revenues | 33.4 | 37.3 | 98.6 | 101.1 | |
| Gross profit | 9.7 | 14.4 | 30.6 | 37.5 | |
| Long-lived assets | 66.4 | 66.4 | 62.1 | ||
| Europe/Asia | |||||
| Segment Reporting Information [Line Items] | |||||
| Revenues | 44.4 | 59.8 | 148.5 | 173.7 | |
| Gross profit | 14.7 | $ 23.6 | 46.7 | $ 72.5 | |
| Long-lived assets | $ 58.3 | $ 58.3 | $ 64.2 | ||
Revenue Recognition, Contracts with Customers - Narrative (Details) - USD ($) |
Sep. 30, 2022 |
Dec. 31, 2021 |
|---|---|---|
| Revenue from Contract with Customer [Abstract] | ||
| Contract assets | $ 0 | $ 0 |
Revenue Recognition, Contracts with Customers - Schedule of Change in Deferred Revenue (Details) $ in Millions |
9 Months Ended |
|---|---|
|
Sep. 30, 2022
USD ($)
| |
| Contract with Customer, Liability [Roll Forward] | |
| Beginning balance | $ 3.1 |
| Deferral of revenue | 7.5 |
| Recognition of revenue | (9.0) |
| Ending balance | $ 1.6 |
Revenue Recognition, Contracts with Customers - Revenue from Contracts with Customers Summarized by Segment Geography (Details) - USD ($) $ in Millions |
3 Months Ended | 9 Months Ended | ||
|---|---|---|---|---|
Sep. 30, 2022 |
Sep. 30, 2021 |
Sep. 30, 2022 |
Sep. 30, 2021 |
|
| Disaggregation of Revenue [Line Items] | ||||
| Net revenue | $ 77.8 | $ 97.1 | $ 247.1 | $ 274.8 |
| ASC 606 | ||||
| Disaggregation of Revenue [Line Items] | ||||
| Net revenue | 66.1 | 85.3 | 210.7 | 239.8 |
| ASC 842 | ||||
| Disaggregation of Revenue [Line Items] | ||||
| Machine lease revenue | 11.7 | 11.8 | 36.4 | 35.0 |
| Net revenue | 77.8 | 97.1 | 247.1 | 274.8 |
| North America | ASC 606 | ||||
| Disaggregation of Revenue [Line Items] | ||||
| Revenue | 28.1 | 32.0 | 82.3 | 86.2 |
| Europe/Asia | ASC 606 | ||||
| Disaggregation of Revenue [Line Items] | ||||
| Revenue | $ 38.0 | $ 53.3 | $ 128.4 | $ 153.6 |
Goodwill, Long-Lived Assets, Intangible Assets and Impairment - Schedule of Goodwill Balances by Operating Segment (Details) $ in Millions |
9 Months Ended |
|---|---|
|
Sep. 30, 2022
USD ($)
| |
| Goodwill [Roll Forward] | |
| Gross carrying value, beginning balance | $ 453.0 |
| Currency translation | (15.2) |
| Gross carrying value, ending balance | 437.8 |
| North America | |
| Goodwill [Roll Forward] | |
| Gross carrying value, beginning balance | 338.8 |
| Currency translation | 0.0 |
| Gross carrying value, ending balance | 338.8 |
| Europe | |
| Goodwill [Roll Forward] | |
| Gross carrying value, beginning balance | 114.2 |
| Currency translation | (15.2) |
| Gross carrying value, ending balance | $ 99.0 |
Goodwill, Long-Lived Assets, Intangible Assets and Impairment - Schedule of Finite-Lived Intangible Assets Amortization Expense (Details) $ in Millions |
Sep. 30, 2022
USD ($)
|
|---|---|
| Goodwill and Intangible Assets Disclosure [Abstract] | |
| 2022 | $ 7.1 |
| 2023 | 28.4 |
| 2024 | 28.3 |
| 2025 | 27.8 |
| 2026 | 27.4 |
| Thereafter | 146.9 |
| Finite-lived intangible assets, Net | $ 265.9 |
Goodwill, Long-Lived Assets, Intangible Assets and Impairment - Narrative (Details) - USD ($) $ in Millions |
3 Months Ended | 9 Months Ended | ||
|---|---|---|---|---|
Sep. 30, 2022 |
Sep. 30, 2021 |
Sep. 30, 2022 |
Sep. 30, 2021 |
|
| Goodwill and Intangible Assets Disclosure [Abstract] | ||||
| Amortization expense | $ 7.1 | $ 7.3 | $ 21.7 | $ 22.0 |
Goodwill, Long-Lived Assets, Intangible Assets and Impairment - Schedule of Intangible Asset Remaining Useful Life (Details) - Weighted Average |
9 Months Ended | 12 Months Ended |
|---|---|---|
Sep. 30, 2022 |
Dec. 31, 2021 |
|
| Finite-Lived Intangible Assets [Line Items] | ||
| Intangible asset, useful life (years) | 10 years | 11 years |
| Customer/distributor relationships | ||
| Finite-Lived Intangible Assets [Line Items] | ||
| Intangible asset, useful life (years) | 12 years | 12 years |
| Patented/Unpatented Technology | ||
| Finite-Lived Intangible Assets [Line Items] | ||
| Intangible asset, useful life (years) | 8 years | 9 years |
| Intellectual Property | ||
| Finite-Lived Intangible Assets [Line Items] | ||
| Intangible asset, useful life (years) | 7 years | 7 years |
Long-Term Debt - Schedule of Long Term Debt (Details) € in Millions, $ in Millions |
Sep. 30, 2022
USD ($)
|
Dec. 31, 2021
USD ($)
|
Jun. 03, 2019
USD ($)
|
Jun. 03, 2019
EUR (€)
|
|---|---|---|---|---|
| Debt Instrument [Line Items] | ||||
| Total long-term debt | $ 380.5 | $ 401.4 | ||
| Total lease liabilities | 1.2 | |||
| Less: current portion of long-term debt | (0.4) | (0.4) | ||
| Less: current portion of finance lease liabilities | (0.5) | (0.6) | ||
| Long-term debt | 379.6 | 400.4 | ||
| Dollar Denominated Line of Credit | First Lien Term Facility | ||||
| Debt Instrument [Line Items] | ||||
| Total long-term debt | 250.0 | 250.0 | $ 378.2 | |
| First Lien Euro Term Facility | First Lien Term Facility | ||||
| Debt Instrument [Line Items] | ||||
| Total long-term debt | 133.5 | 155.0 | $ 152.6 | € 140.0 |
| Line of Credit | Revolving Credit Facility | ||||
| Debt Instrument [Line Items] | ||||
| Total lease liabilities | 1.2 | 1.5 | ||
| Deferred financing costs, net | $ (4.2) | $ (5.1) |
Derivative Instruments - Narrative (Details) € in Millions, $ in Millions |
1 Months Ended | 9 Months Ended | ||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
|
Jul. 31, 2022
USD ($)
|
Apr. 30, 2022
USD ($)
Rate
|
Feb. 28, 2022
USD ($)
Rate
|
Sep. 30, 2022
USD ($)
|
Apr. 30, 2022
EUR (€)
Rate
|
Feb. 28, 2022
EUR (€)
Rate
|
Dec. 31, 2021
USD ($)
|
Sep. 30, 2021
USD ($)
Rate
|
Sep. 30, 2021
EUR (€)
Rate
|
Mar. 27, 2020 |
Sep. 25, 2019
USD ($)
|
Jan. 31, 2019
USD ($)
|
|
| Derivative [Line Items] | ||||||||||||
| Interest rate cash flow hedge loss to be reclassified during next twelve months, net | $ 5.4 | |||||||||||
| Designated as Hedging Instrument | Cash Flow Hedge | ||||||||||||
| Derivative [Line Items] | ||||||||||||
| Derivative, notional amount | 250.0 | $ 250.0 | ||||||||||
| January 2019 Swap | Not Designated as Hedging Instrument | ||||||||||||
| Derivative [Line Items] | ||||||||||||
| Derivative, notional amount | $ 200.0 | |||||||||||
| Derivative, fixed interest rate | 2.56% | |||||||||||
| January 2019 Swap | Designated as Hedging Instrument | Cash Flow Hedge | ||||||||||||
| Derivative [Line Items] | ||||||||||||
| Derivative, notional amount | $ 200.0 | $ 200.0 | ||||||||||
| Derivative, fixed interest rate | 2.09% | 2.09% | 2.10% | 2.31% | ||||||||
| September 2019 Swap | Designated as Hedging Instrument | Cash Flow Hedge | ||||||||||||
| Derivative [Line Items] | ||||||||||||
| Derivative, notional amount | $ 50.0 | $ 50.0 | $ 50.0 | |||||||||
| Derivative, fixed interest rate | 1.50% | 1.50% | 1.50% | |||||||||
| September 2021 Swap | ||||||||||||
| Derivative [Line Items] | ||||||||||||
| Derivative, notional amount | $ 80.0 | |||||||||||
| Derivative, Description of Terms | The September 2021 Swap involves the receipt of fixed-rate amounts from a counterparty in exchange for us making fixed-rate payments over the life of the contract without exchange of the underlying notional amounts. At a spot exchange rate of 1.1835, we converted notional amounts of approximately $80.0 million at 5.84% for €67.6 million at 5.02%. The change in fair value of the September 2021 Swap is recorded in currency translation in other comprehensive income (loss) and accumulated other comprehensive income (loss). Components of the September 2021 Swap excluded from the assessment of effectiveness are amortized out of accumulated other comprehensive income (loss) and into interest expense over the life of the September 2021 Swap to maturity on June 1, 2024. | |||||||||||
| Derivative, fixed interest rate | 5.84% | 5.84% | ||||||||||
| Gains (losses) on derivatives | $ 2.1 | |||||||||||
| Spot exchange rate | 1.1835 | 1.1835 | ||||||||||
| Derivative notional amount, converted | € | € 67.6 | |||||||||||
| Derivative notional amount, converted rate | Rate | 5.02% | 5.02% | ||||||||||
| February 2022 Swap | ||||||||||||
| Derivative [Line Items] | ||||||||||||
| Derivative, notional amount | $ 80.0 | |||||||||||
| Derivative, fixed interest rate | 5.84% | 5.84% | ||||||||||
| Gains (losses) on derivatives | $ 2.8 | |||||||||||
| Spot exchange rate | Rate | 113.45% | 113.45% | ||||||||||
| Derivative notional amount, converted | € | € 70.5 | |||||||||||
| Derivative notional amount, converted rate | Rate | 4.37% | 4.37% | ||||||||||
| April 2022 Swap | ||||||||||||
| Derivative [Line Items] | ||||||||||||
| Derivative, notional amount | $ 80.0 | |||||||||||
| Derivative, fixed interest rate | 5.84% | 5.84% | ||||||||||
| Gains (losses) on derivatives | $ 5.1 | |||||||||||
| Spot exchange rate | 1.0827 | 1.0827 | ||||||||||
| Derivative notional amount, converted | € | € 73.9 | |||||||||||
| Derivative notional amount, converted rate | Rate | 3.93% | 3.93% | ||||||||||
Derivative Instruments - Schedule of Interest Rate Swaps (Details) - Designated as Hedging Instrument - Cash Flow Hedge - USD ($) $ in Millions |
Sep. 30, 2022 |
Dec. 31, 2021 |
Mar. 27, 2020 |
Sep. 25, 2019 |
|---|---|---|---|---|
| Derivative [Line Items] | ||||
| Derivative, notional amount | $ 250.0 | $ 250.0 | ||
| Percentage of Debt Instrument Outstanding | 100.00% | 100.00% | ||
| September 2019 Swap | ||||
| Derivative [Line Items] | ||||
| Derivative, fixed interest rate | 1.50% | 1.50% | 1.50% | |
| Derivative, notional amount | $ 50.0 | $ 50.0 | $ 50.0 | |
| September 2019 Swap | First Lien Term Facility | ||||
| Derivative [Line Items] | ||||
| Percentage of Debt Instrument Outstanding | 20.00% | 20.00% | ||
| January 2019 Swap | ||||
| Derivative [Line Items] | ||||
| Derivative, fixed interest rate | 2.09% | 2.09% | 2.10% | 2.31% |
| Derivative, notional amount | $ 200.0 | $ 200.0 | ||
| January 2019 Swap | First Lien Term Facility | ||||
| Derivative [Line Items] | ||||
| Percentage of Debt Instrument Outstanding | 80.00% | 80.00% |
Derivative Instruments - Schedule of Derivative Assets and Liabilities at Fair Value (Details) - Designated as Hedging Instrument - USD ($) $ in Millions |
Sep. 30, 2022 |
Dec. 31, 2021 |
|---|---|---|
| Derivative [Line Items] | ||
| Derivative liability, fair value | $ 7.9 | $ (6.2) |
| Cash Flow Hedge | Interest Rate Swap | ||
| Derivative [Line Items] | ||
| Derivative asset, fair value | 0.0 | 2.3 |
| Cash Flow Hedge | Accrued liabilities and other | Interest Rate Swap | ||
| Derivative [Line Items] | ||
| Derivative liability, fair value | 0.0 | (3.8) |
| Cash Flow Hedge | Derivative instruments | Interest Rate Swap | ||
| Derivative [Line Items] | ||
| Derivative liability, fair value | 0.0 | (2.4) |
| Cash Flow Hedge | Prepaid Expenses And Other Current Assets | Interest Rate Swap | ||
| Derivative [Line Items] | ||
| Derivative liability, fair value | 5.4 | 0.0 |
| Derivative asset, fair value | 0.0 | 2.3 |
| Cash Flow Hedge | Other Assets | Interest Rate Swap | ||
| Derivative [Line Items] | ||
| Derivative asset, fair value | $ 2.5 | $ 0.0 |
Derivative Instruments - Effect of Derivative Instruments on Statement of Financial Position (Details) - USD ($) $ in Millions |
3 Months Ended | 9 Months Ended | ||
|---|---|---|---|---|
Sep. 30, 2022 |
Sep. 30, 2021 |
Sep. 30, 2022 |
Sep. 30, 2021 |
|
| Derivative [Line Items] | ||||
| Interest expense | $ 5.3 | $ 5.5 | $ 15.2 | $ 17.1 |
| Interest Expense | Interest Rate Swap | ||||
| Derivative [Line Items] | ||||
| Interest rate swap agreements designated as cash flow hedges | (0.4) | 1.0 | 1.2 | 2.9 |
| Cross currency swap agreement designated as net investment hedge, amounts excluded from effectiveness testing | $ (0.2) | $ (0.1) | $ (1.0) | $ (0.1) |
Income Taxes - Schedule of Effective Tax Rate (Details) |
3 Months Ended | 9 Months Ended | ||
|---|---|---|---|---|
Sep. 30, 2022 |
Sep. 30, 2021 |
Sep. 30, 2022 |
Sep. 30, 2021 |
|
| Income Tax Disclosure [Abstract] | ||||
| Effective tax rate, percent | 26.80% | 16.10% | 22.60% | 89.10% |
Income Taxes - Narrative (Details) |
9 Months Ended |
|---|---|
Sep. 30, 2022 | |
| Earliest Tax Year | |
| Income Taxes [Line Items] | |
| Examination tax year | 2019 |
| Latest Tax Year | |
| Income Taxes [Line Items] | |
| Examination tax year | 2021 |
Leases - Schedule of Operating Leases and Finance Leases included in Condensed Consolidated Balance Sheets (Details) - USD ($) $ in Millions |
Sep. 30, 2022 |
Dec. 31, 2021 |
|---|---|---|
| Lease assets | ||
| Operating lease right-of-use assets, net | $ 5.8 | $ 6.6 |
| Finance lease right of use assets, net | 1.2 | 1.5 |
| Total lease assets | 7.0 | 8.1 |
| Lease liabilities | ||
| Operating lease liabilities, current | 1.8 | 2.4 |
| Operating lease liabilities, non-current | 4.0 | 4.3 |
| Finance lease liabilities, current | 0.5 | 0.6 |
| Finance lease liabilities, non-current | 0.7 | 0.9 |
| Total lease liabilities | $ 7.0 | $ 8.2 |
| Finance Lease, Right-of-Use Asset, Statement of Financial Position [Extensible List] | Property, plant and equipment, net | |
| Finance Lease, Liability, Current, Statement of Financial Position [Extensible List] | Current portion of long-term debt | |
| Finance Lease, Liability, Noncurrent, Statement of Financial Position [Extensible List] | Long-term debt |
Leases - Schedule of Components of Lease Costs (Details) - USD ($) $ in Millions |
3 Months Ended | 9 Months Ended | ||
|---|---|---|---|---|
Sep. 30, 2022 |
Sep. 30, 2021 |
Sep. 30, 2022 |
Sep. 30, 2021 |
|
| Operating leases | ||||
| Operating lease costs | $ 0.7 | $ 0.7 | $ 2.2 | $ 2.1 |
| Variable lease costs | 0.1 | 0.1 | 0.2 | 0.2 |
| Total operating lease costs | 0.8 | 0.8 | 2.4 | 2.3 |
| Finance leases | ||||
| Amortization of right-of-use asset | 0.1 | 0.2 | 0.5 | 0.4 |
| Interest on finance lease liabilities | 0.0 | 0.0 | 0.1 | 0.0 |
| Total finance lease costs | $ 0.1 | $ 0.2 | $ 0.6 | $ 0.4 |
Leases - Schedule of Maturities of Lease Liabilities (Details) $ in Millions |
Sep. 30, 2022
USD ($)
|
|---|---|
| Operating leases | |
| 2022 | $ 0.6 |
| 2023 | 2.0 |
| 2024 | 1.6 |
| 2025 | 1.5 |
| 2026 | 0.5 |
| 2027 and Thereafter | 0.0 |
| Total lease payments | 6.2 |
| Less lease interest | (0.4) |
| Total lease liabilities | 5.8 |
| Finance leases | |
| 2022 | 0.2 |
| 2023 | 0.6 |
| 2024 | 0.4 |
| 2025 | 0.1 |
| 2026 | 0.0 |
| 2027 and Thereafter | 0.0 |
| Total lease payments | 1.3 |
| Less lease interest | (0.1) |
| Total lease liabilities | 1.2 |
| Total | |
| 2022 | 0.8 |
| 2023 | 2.6 |
| 2024 | 2.0 |
| 2025 | 1.6 |
| 2026 | 0.5 |
| 2027 and Thereafter | 0.0 |
| Total lease payments | 7.5 |
| Less lease interest | (0.5) |
| Total lease liabilities | $ 7.0 |
Stock-Based Compensation - Summary of Certain Data for Stock-Based Compensation Plans (Details) - USD ($) $ in Millions |
3 Months Ended | 9 Months Ended | ||
|---|---|---|---|---|
Sep. 30, 2022 |
Sep. 30, 2021 |
Sep. 30, 2022 |
Sep. 30, 2021 |
|
| Share-Based Payment Arrangement [Abstract] | ||||
| Stock-based compensation expense | $ 6.7 | $ 6.9 | $ 20.8 | $ 14.3 |
| Tax (expense) benefit for stock-based compensation | (0.1) | 0.0 | 0.7 | 1.2 |
| Stock-based compensation expense, net of tax | $ 6.6 | $ 6.9 | $ 21.5 | $ 15.5 |
Stock-Based Compensation - 2019 Plan (Details) - 2019 Plan - Share-based Payment Arrangement, Option |
9 Months Ended |
|---|---|
|
Sep. 30, 2022
shares
| |
| Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
| Maximum allowed for issuance | 13,118,055 |
| Awards granted | (6,302,565) |
| Awards forfeited | 1,012,397 |
| Available for future awards | 7,827,887 |
| Awards vested | 2,035,658 |
Stock-Based Compensation - Director Stock Unit Activity (Details) - Director Stock Units |
9 Months Ended |
|---|---|
|
Sep. 30, 2022
$ / shares
shares
| |
| Quantity | |
| Outstanding at December 31, 2021 (shares) | shares | 28,364 |
| Granted (shares) | shares | 71,720 |
| Vested (shares) | shares | (48,844) |
| Outstanding at June 30, 2022 (shares) | shares | 51,240 |
| Weighted Average Grant Date Fair Value | |
| Outstanding at December 31, 2021 (USD per share) | $ / shares | $ 24.69 |
| Granted (USD per share) | $ / shares | 12.29 |
| Vested (USD per share) | $ / shares | 20.09 |
| Outstanding at June 30, 2022 (USD per share) | $ / shares | $ 11.72 |
Shareholders' Equity - Schedule of Common Stock Outstanding (Details) - shares |
Sep. 30, 2022 |
Jun. 30, 2022 |
Mar. 31, 2022 |
Dec. 31, 2021 |
Sep. 30, 2021 |
Jun. 30, 2021 |
Mar. 31, 2021 |
Dec. 31, 2020 |
|---|---|---|---|---|---|---|---|---|
| Class A | ||||||||
| Class of Stock [Line Items] | ||||||||
| Common stock, shares outstanding (shares) | 79,064,041 | 79,039,192 | 79,006,238 | 78,482,024 | 78,475,824 | 78,469,923 | 69,343,361 | 69,005,059 |
| Class C | ||||||||
| Class of Stock [Line Items] | ||||||||
| Common stock, shares outstanding (shares) | 2,921,099 | 2,921,099 | 2,921,099 | 2,921,099 | 2,921,099 | 2,921,099 | 6,511,293 | 6,511,293 |
Earnings (Loss) per Share - Additional Information (Details) - shares shares in Millions |
3 Months Ended | 9 Months Ended | ||
|---|---|---|---|---|
Sep. 30, 2022 |
Sep. 30, 2021 |
Sep. 30, 2022 |
Sep. 30, 2021 |
|
| Earnings Per Share [Abstract] | ||||
| Dilutive effect of shares omitted from the calculation of diluted weighted average shares outstanding and diluted earnings per share | 0.5 | 1.2 | 0.9 | 0.4 |
Earnings (Loss) per Share - Schedule of Antidilutive Securities (Details) - shares |
3 Months Ended | 9 Months Ended | ||
|---|---|---|---|---|
Sep. 30, 2022 |
Sep. 30, 2021 |
Sep. 30, 2022 |
Sep. 30, 2021 |
|
| Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
| Total antidilutive securities | 3,559,496 | 3,290,689 | 3,417,060 | 1,920,875 |
| RSUs and PRSUs | ||||
| Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
| Total antidilutive securities | 3,559,496 | 3,290,689 | 3,417,060 | 1,920,875 |
Transactions with Related Parties - Narrative (Details) - USD ($) $ in Millions |
3 Months Ended | 9 Months Ended | ||
|---|---|---|---|---|
Sep. 30, 2022 |
Sep. 30, 2021 |
Sep. 30, 2022 |
Sep. 30, 2021 |
|
| One Madison Group LLC | ||||
| Related Party Transaction [Line Items] | ||||
| Related party transaction, fees | $ 0.1 | $ 0.1 | $ 0.2 | $ 0.3 |
Shareholders' Equity - Narrative (Details) - USD ($) $ / shares in Units, $ in Millions |
9 Months Ended | |||
|---|---|---|---|---|
Jul. 26, 2022 |
Sep. 30, 2022 |
Sep. 30, 2021 |
Dec. 31, 2021 |
|
| Class of Stock [Line Items] | ||||
| Proceeds from issuance of common stock | $ 0.0 | $ 104.0 | ||
| Common Class A [Member] | ||||
| Class of Stock [Line Items] | ||||
| Common stock, shares authorized (shares) | 200,000,000 | 200,000,000 | ||
| Common stock, par value (USD per share) | $ 0.0001 | $ 0.0001 | ||
| Common stock, shares issued (shares) | 79,064,041 | 78,482,024 | ||
| Share repurchase program maximum amount | $ 50.0 | |||
| Stock repurchase program period | 36 months | |||
| Class C | ||||
| Class of Stock [Line Items] | ||||
| Common stock, shares authorized (shares) | 200,000,000 | 200,000,000 | ||
| Common stock, par value (USD per share) | $ 0.0001 | $ 0.0001 | ||
| Common stock, shares issued (shares) | 2,921,099 | 2,921,099 | ||
Subsequent Event - Narrative (Details) - Common Class A [Member] $ in Millions |
Jul. 26, 2022
USD ($)
|
|---|---|
| Subsequent Event [Line Items] | |
| Share repurchase program maximum amount | $ 50.0 |
| Stock repurchase program period | 36 months |