Ranpak Holdings Corp. [PACK] Filings

10-Q 1 pack-20240630.htm 10-Q pack-20240630

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

_______________________________________________________________

FORM 10-Q

_______________________________________________________________

(Mark One)


			x			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2024


			o			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 001-38348

_______________________________________________________________

RANPAK HOLDINGS CORP.

(Exact name of registrant as specified in its charter)

_______________________________________________________________


Delaware			98-1377160
(State or other jurisdiction of			(I.R.S. Employer
incorporation or organization)			Identification Number)

7990 Auburn Road

Concord Township, Ohio 44077

(Address of principal executive offices) (Zip Code)

(440) 354-4445

(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
Class A Ordinary Shares, par value $0.0001 per share	PACK	New York Stock Exchange

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. Yes x No o

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). Yes x No o

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.


Large accelerated filer	o	Accelerated filer	x
Non-accelerated filer	o	Smaller reporting company	o
Emerging growth company	o

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. o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes o No x

As of July 22, 2024, the registrant had 80,302,264 of its Class A common shares, $0.0001 par value per share, outstanding and 2,921,099 of its Class C common shares, $0.0001 par value per share, outstanding.

Table of Contents

Ranpak Holdings Corp.

Quarterly Report on Form 10-Q

For the Period Ended June 30, 2024

Table of Contents


			Page
Part I – Financial Information			1
Item 1. Condensed Consolidated Financial Statements (Unaudited)			1
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations			22
Item 3. Quantitative and Qualitative Disclosures About Market Risk			36
Item 4. Controls and Procedures			37
Part II – Other Information			37
Item 1. Legal Proceedings			37
Item 1A. Risk Factors			38
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds			38
Item 3. Defaults Upon Senior Securities			38
Item 4. Mine Safety Disclosures			38
Item 5. Other Information			38
Item 6. Exhibits			38
Signatures			39

PART I – FINANCIAL INFORMATION

Item 1. Financial Statements

Index to Unaudited Condensed Consolidated Financial Statements

Ranpak Holdings Corp.


Unaudited Condensed Consolidated Statements of Operations and Comprehensive Income (Loss) for the Three and Six Months Ended June 30, 2024 and 2023

Unaudited Condensed Consolidated Balance Sheets – June 30, 2024 and December 31, 2023

Unaudited Condensed Consolidated Statements of Changes in Shareholders’ Equity for the Three and Six Months Ended June 30, 2024 and 2023

Unaudited Condensed Consolidated Statements of Cash Flows for the Six Months Ended June 30, 2024 and 2023

Notes to the Unaudited Condensed Consolidated Financial Statements

Ranpak Holdings Corp.

Unaudited Condensed Consolidated Statements of Operations

and Comprehensive Income (Loss)

(in millions, except share and per share data)


	Three Months Ended June 30,				Six Months Ended June 30,
	2024		2023		2024		2023
Paper revenue	$	67.5	$	63.3	$	133.7	$	127.6
Machine lease revenue	13.6		12.7		26.4		25.5
Other revenue	5.3		5.9		11.6		10.0
Net revenue	86.4		81.9		171.7		163.1
Cost of goods sold	54.7		51.7		107.7		105.4
Gross profit	31.7		30.2		64.0		57.7
Selling, general and administrative expenses	27.3		16.3		55.2		43.5
Depreciation and amortization expense	8.3		8.1		16.7		16.1
Other operating expense, net	1.3		1.4		2.1		2.6
Income (loss) from operations	(5.2)		4.4		(10.0)		(4.5)
Interest expense	5.3		5.9		11.5		11.6
Foreign currency (gain) loss	0.1		0.7		(1.3)		0.9
Other non-operating income, net	(17.9)		(0.4)		(17.9)		(0.7)
Income (loss) before income tax expense (benefit)	7.3		(1.8)		(2.3)		(16.3)
Income tax expense (benefit)	1.8		0.3		0.3		(1.8)
Net income (loss)	$	5.5	$	(2.1)	$	(2.6)	$	(14.5)

Two-class method
Basic and diluted income (loss) per share	$	0.07	$	(0.03)	$	(0.03)	$	(0.18)
Class A – basic and diluted income (loss) per share	$	0.07	$	(0.03)	$	(0.03)	$	(0.18)
Class C – basic and diluted income (loss) per share	$	0.07	$	(0.03)	$	(0.03)	$	(0.17)

Weighted average number of shares outstanding – Class A and C – basic	83,071,520		82,432,158		82,876,914		82,285,291
Weighted average number of shares outstanding – Class A and C – diluted	83,123,636		82,432,158		82,876,914		82,285,291

Other comprehensive income (loss), before tax
Foreign currency translation adjustments	$	(0.1)	$	(1.2)	$	(2.2)	$	0.9
Interest rate swap adjustments	(0.8)		(1.0)		(3.4)		(3.1)
Total other comprehensive loss, before tax	(0.9)		(2.2)		(5.6)		(2.2)
Benefit for income taxes related to other comprehensive income (loss)	(0.1)		(0.4)		—		(1.2)
Total other comprehensive loss, net of tax	(0.8)		(1.8)		(5.6)		(1.0)
Comprehensive income (loss), net of tax	$	4.7	$	(3.9)	$	(8.2)	$	(15.5)

______________________________________________________________________

See notes to unaudited condensed consolidated financial statements.

Ranpak Holdings Corp.

Unaudited Condensed Consolidated Balance Sheets

(in millions, except share data)


	June 30, 2024		December 31, 2023
Assets
Current assets
Cash and cash equivalents	$	65.1	$	62.0
Accounts receivable, net	36.5		31.6
Inventories, net	26.0		17.3
Income tax receivable	7.5		0.9
Prepaid expenses and other current assets	12.4		13.1
Total current assets	147.5		124.9

Property, plant and equipment, net	139.1		142.1
Operating lease right-of-use assets, net	22.2		23.7
Goodwill	446.8		450.1
Intangible assets, net	328.7		345.4
Deferred tax assets	0.1		0.1
Other assets	35.6		36.4
Total assets	$	1,120.0	$	1,122.7

Liabilities and Shareholders’ Equity
Current liabilities
Accounts payable	$	26.2	$	17.6
Accrued liabilities and other	23.5		22.1
Current portion of long-term debt	2.6		2.5
Operating lease liabilities, current	3.9		3.8
Deferred revenue	2.4		2.0
Total current liabilities	58.6		48.0

Long-term debt	393.5		397.8
Deferred tax liabilities	72.4		71.6
Derivative instruments	4.3		6.3
Operating lease liabilities, non-current	22.5		24.7
Other liabilities	2.5		2.3
Total liabilities	553.8		550.7

Commitments and contingencies – Note 13
Shareholders’ equity
Class A common stock, $0.0001 par, 200,000,000 shares authorized at June 30, 2024 and December 31, 2023 Shares issued and outstanding: 80,289,912 and 79,684,170 at June 30, 2024 and December 31, 2023, respectively	—		—
Convertible Class C common stock, $0.0001 par, 200,000,000 shares authorized at June 30, 2024 and December 31, 2023 Shares issued and outstanding: 2,921,099 at June 30, 2024 and December 31, 2023	—		—
Additional paid-in capital	696.1		693.7
Accumulated deficit	(126.4)		(123.8)
Accumulated other comprehensive income (loss)	(3.5)		2.1
Total shareholders’ equity	566.2		572.0
Total liabilities and shareholders’ equity	$	1,120.0	$	1,122.7

______________________________________________________________________

See notes to unaudited condensed consolidated financial statements.

Ranpak Holdings Corp.

Unaudited Condensed Consolidated Statements of Changes in Shareholders’ Equity

(in millions, except share data)


	Common Stock						Additional Paid-In Capital		Accumulated Deficit		Accumulated Other Comprehensive Income (Loss)		Total
	Class A			Class C
	Shares	Amount		Shares	Amount
Balance at December 31, 2022	79,086,372	$	—	2,921,099	$	—	$	704.3	$	(96.7)	$	5.2	$	612.8
Stock-based awards vested and distributed	368,153	—		—	—		(0.4)		—		—		(0.4)
Issue Director shares	14,084	—		—	—		—		—		—		—
Amortization of restricted stock units	—	—		—	—		2.8		—		—		2.8
Net loss	—	—		—	—		—		(12.4)		—		(12.4)
Other comprehensive income	—	—		—	—		—		—		0.8		0.8
Balance at March 31, 2023	79,468,609	—		2,921,099	—		706.7		(109.1)		6.0		603.6
Stock-based awards vested and distributed	27,931	—		—	—		—		—		—		—
Issue Director shares	51,240	—		—	—		—		—		—		—
Amortization of restricted stock units	—	—		—	—		(9.5)		—		—		(9.5)
Net loss	—	—		—	—		—		(2.1)		—		(2.1)
Other comprehensive loss	—	—		—	—		—		—		(1.8)		(1.8)
Balance at June 30, 2023	79,547,780	$	—	2,921,099	$	—	$	697.2	$	(111.2)	$	4.2	$	590.2

Balance at December 31, 2023	79,684,170	$	—	2,921,099	$	—	$	693.7	$	(123.8)	$	2.1	$	572.0
Stock-based awards vested and distributed	353,622	—		—	—		(0.4)		—		—		(0.4)
Issue Director shares	16,110	—		—	—		—		—		—		—
Amortization of restricted stock units	—	—		—	—		1.3		—		—		1.3
Net loss	—	—		—	—		—		(8.1)		—		(8.1)
Other comprehensive loss	—	—		—	—		—		—		(4.8)		(4.8)
Balance at March 31, 2024	80,053,902	$	—	2,921,099	—		694.6		(131.9)		(2.7)		560.0
Stock-based awards vested and distributed	7,500	—		—	—		—		—		—		—
Issue Director shares	228,510	—		—	—		—		—		—		—
Amortization of restricted stock units	—	—		—	—		1.5		—		—		1.5
Net income	—	—		—	—		—		5.5		—		5.5
Other comprehensive loss	—	—		—	—		—		—		(0.8)		(0.8)
Balance at June 30, 2024	80,289,912	$	—	2,921,099	$	—	$	696.1	$	(126.4)	$	(3.5)	$	566.2

______________________________________________________________________

See notes to unaudited condensed consolidated financial statements.

Ranpak Holdings Corp.

Unaudited Condensed Consolidated Statements of Cash Flows

(in millions)


	Six Months Ended June 30,
	2024		2023
Cash Flows from Operating Activities
Net loss	$	(2.6)	$	(14.5)
Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation and amortization	35.5		33.0
Amortization of deferred financing costs	1.4		0.9
Loss on disposal of property and equipment	0.6		0.8
Gain on sale of patents	(5.4)		—
Deferred income taxes	3.7		(0.3)
Amortization of initial value of interest rate swap	(1.2)		(0.9)
Currency (gain) loss on foreign denominated debt and notes payable	(1.3)		0.8
Stock-based compensation expense	2.8		(6.7)
Amortization of cloud-based software implementation costs	1.8		1.5
Unrealized loss on strategic investments	3.5		—
Changes in operating assets and liabilities:
(Increase) decrease in receivables, net	(5.6)		(1.5)
(Increase) decrease in inventory	(8.8)		2.8
(Increase) decrease in income tax receivable	(6.6)		(2.0)
(Increase) decrease in prepaid expenses and other assets	(2.6)		(3.5)
Increase (decrease) in accounts payable	9.5		1.5
Increase (decrease) in accrued liabilities	3.4		2.3
Change in other assets and liabilities	(3.3)		2.4
Net cash provided by operating activities	24.8		16.6
Cash Flows from Investing Activities
Purchases of converter equipment	(15.3)		(11.0)
Purchases of other property, plant, and equipment	(4.4)		(14.2)
Proceeds from sale of patents	5.4		—
Cash paid for strategic investments	(4.8)		—
Net cash used in investing activities	(19.1)		(25.2)
Cash Flows from Financing Activities
Principal payments on term loans	(0.8)		(1.1)
Financing costs of debt facilities	—		(0.2)
Proceeds from equipment financing	0.7		1.9
Payments on equipment financing	(0.5)		—
Payments on finance lease liabilities	(0.6)		(0.8)
Tax payments for withholdings on stock-based awards distributed	(0.4)		(0.5)
Net cash used in financing activities	(1.6)		(0.7)
Effect of Exchange Rate Changes on Cash	(1.0)		0.4
Net Increase (Decrease) in Cash and Cash Equivalents	3.1		(8.9)
Cash and Cash Equivalents, beginning of period	62.0		62.8
Cash and Cash Equivalents, end of period	$	65.1	$	53.9

______________________________________________________________________

See notes to unaudited condensed consolidated financial statements.

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Ranpak Holdings Corp.

Notes to Unaudited Condensed Consolidated Financial Statements

(in millions, except share and per share data)

Note 1 — Nature of Operations

We are a leading provider of environmentally sustainable, systems-based, product protection and end-of-line automation solutions for e-Commerce and industrial supply chains. Through our proprietary protective packaging solutions (“PPS”) systems and paper consumables, we offer a full suite of protective packaging solutions. Our business is global, with a strong presence in the United States, Europe and Asia. 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, 2023, 2022, and 2021, which are included in our Annual Report on Form 10-K for the year ended December 31, 2023 (“2023 10-K”). The three months ended June 30, 2024 may be further referred to herein as the “second quarter of 2024.” The three months ended June 30, 2023 may be further referred to herein as the “second quarter of 2023.”

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. All amounts are in millions, except share and per share amounts.

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. 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 in our Unaudited Condensed Consolidated Statements of Operations. In turn, subsidiary income statement balances that are denominated in currencies other than U.S. dollars (“USD”) are translated into USD, our reporting 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 (loss).

Revenue Recognition — Revenue from contracts with customers is recognized using a five-step model consisting of the following: (i) identify the contract with a customer; (ii) identify the performance obligations in the contract; (iii) determine the transaction price; (iv) allocate the transaction price to the performance obligations in the contract; and (v) recognize revenue when (or as) we satisfy a performance obligation. Performance obligations are satisfied when we transfer control of a good or service to a customer, which can occur over time or at a point in time. The amount of revenue recognized is

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Ranpak Holdings Corp.

Notes to Unaudited Condensed Consolidated Financial Statements

(in millions, except share and per share data)

based on the consideration to which we expect to be entitled in exchange for those goods or services, including the expected value of variable consideration. The customer’s ability and intent to pay the transaction price is assessed in determining whether a contract exists with the customer. If collectability of substantially all of the consideration in a contract is not probable, consideration received is not recognized as revenue unless the consideration is nonrefundable and we no longer have an obligation to transfer additional goods or services to the customer or collectability becomes probable.

We sell our PPS products to end-users primarily through an established distributor network and direct sales to select end-users. For both customer types, the customer is granted the right to use our machine(s) for which we charge an annual or quarterly fixed fee or may waive the fee at management’s discretion. Our revenue associated with our PPS business contains (i) a non-lease component (the paper consumables) accounted for as revenue under Accounting Standards Codification (“ASC”) Topic 606, Revenue from Contracts with Customers (“ASC 606”), and (ii) a lease component (our PPS systems) accounted for as machine lease revenue under ASC Topic 842, Leases (“ASC 842”). Machine lease revenue is recognized on a straight-line basis over the terms of the PPS systems agreements with customers, which have durations of less than one year.

In paper consumables sales for both distributor agreements and direct agreements, we have determined the contract to be a combination of the master service agreement (“MSA”) and purchase order (“PO”). The MSA contains general terms and conditions which govern the agreement, including general payment terms. Individual PO’s must be placed underneath the terms of the MSA to order specific paper products which we promise to deliver. The PO contains relevant details of the contract including the type of paper, quantity, unit price, total price, as well as payment terms and estimated delivery date. Under the MSA, multiple PO’s for one customer may be placed at or near the same time. In situations where there are multiple PO’s issued at or near the same time to the same customer, we treat each PO in combination with the MSA as a separate contract for revenue recognition purposes.

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. Maintenance revenue is based on a fixed fee that is recognized straight-line on the basis that the level of effort is consistent over the term of the contract.

We determine the standalone selling price for a performance obligation sold on a standalone basis. We offer rebates to customers in their contracts that are related to the amount of consumables purchased. We believe that this form of variable consideration should only be allocated to consumables because the entire amount of variable consideration relates to the customer’s purchase of and our efforts to provide consumables. We allocate a percentage of PPS paper revenue to machine lease revenue using the residual approach to estimate the standalone selling price of our PPS systems to customers. The allocation is performed based on the number of PPS systems in the field. We do not sell or transfer ownership of our PPS systems to our customers. Our lease agreements with customer for PPS systems are for one year or less and renew annually.

We have forms of variable consideration present in our contracts with customers, including rebates and other discounts. Charges for rebates and other allowances were approximately 9% and 13% of revenue in the three months ended June 30, 2024 and 2023, respectively, and approximately 11% and 14% for the six months ended June 30, 2024 and 2023, respectively. For all contracts that contain a form of variable consideration, we estimate at contract inception, and periodically throughout the term of the contract, what volume of goods and/or services the customer will purchase in a given period and determine how much consideration is payable to the customer or how much consideration we would be able to recover from the customer based on the structure of the type of variable consideration, using either the expected value method or the most likely amount method. In most cases, the variable consideration in contracts with customers results in amounts payable to the customer by the Company. We adjust the contract transaction price based on any changes in estimates each reporting period and perform an inception to date cumulative adjustment to the amount of revenue previously recognized. 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.

To provide Automation solution goods and services, an agreement is documented and agreed to between Ranpak and the customer. This is in the form of a proposal contract for automation machines with separate proposals for related goods and services. Typically, machines have their own proposal, and other related goods and services such as preventative maintenance, and spare parts have a separate proposal with these goods and services all detailed. These written agreements

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Ranpak Holdings Corp.

Notes to Unaudited Condensed Consolidated Financial Statements

(in millions, except share and per share data)

outline the terms and conditions for respective transactions between us and our customers and represent contracts with enforceable rights. For each type of contract, there are various levels of termination provisions for each party.

We recognize revenue from each Automation product separately, on a contract-by-contract basis (i.e., by individual machine). Each contract represents its own unit of accounting. Our Automation machines are highly customized to customer specific needs and termination is only allowed in the case of breach of contract. As such, we are entitled to all consideration from the production of the machine. We cannot sell the machine to another customer due to the level of customization and, as such, there is not an alternative use for the product produced. Because of these factors, we recognize machine revenue over time on a contract-by-contract basis using an input method, based on the percentage of costs and effort incurred to complete the construction of the machine. We also sell extended warranties, preventative maintenance services, spare parts and spare part packages related to our sale of Automation products. We recognize revenue on maintenance contracts and spare parts separately from their Automation products. Revenue for the sale of spare parts is recognized based on shipping terms, which is the point in time the customer obtains control of the promised goods. Maintenance revenue is based on a fixed fee that is recognized straight-line on the basis that the level of effort is consistent over the term of the contract.

We recognize incremental costs to obtain a contract as an expense when incurred if the amortization period of the asset that otherwise would have been recognized is one year or less. For example, we generally expense sales commissions when incurred because the contract term is less than one year. These costs are recorded within selling, general and administrative (“SG&A”) expenses in our Unaudited Condensed Consolidated Statements of Operations. We elected to account for shipping and handling costs as fulfillment activities.

Sales, value-added, and other taxes collected from customers and remitted to governmental authorities are accounted for on a net basis and therefore are excluded from revenue on the Unaudited Condensed Consolidated Statements of Operations.

Goodwill and Identifiable Intangible Assets, net — 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.

As of June 30, 2024, there were no indicators to suggest that it is more likely than not that the fair value of our reporting units and indefinite-lived assets were below their carrying values.

Recently Issued Accounting Standards — In November 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2023-07, Segment Reporting (Topic 280). This ASU is intended to improve financial reporting by providing additional disclosures regarding a company’s segment expenses and more detailed and timely segment information reporting throughout the fiscal period. The amendment requires companies to disclose, on an interim and annual basis, significant segment expenses that are regularly provided to the Chief Operating Decision Making (“CODM”), report an “other segment items” category which represents the difference between segment revenue less the significant expenses along with a description of composition, clarify if the CODM uses more than one measure of a segment’s profit or loss, and disclose the title and position of the CODM along with an explanation of how the CODM uses the reported measures. All annual disclosures required by Topic 280, Segment Reporting, will also be required for all interim periods. The amendment does not change how a company identifies its operating segments, aggregates those operating segments, or applies the quantitative thresholds to determine its reportable segments. The ASU will be effective for fiscal years beginning after December 15, 2023 and interim periods within fiscal years beginning after December 15, 2024 and should be applied retrospectively to all periods presented. We are in the process of evaluating the impact of the future adoption of this standard on our consolidated financial statements.

In December 31, 2023, the FASB issued ASU No. 2023-09, Improvements to Income Tax Disclosures (“ASU 2023-09”), which will require us to provide a tabular rate reconciliation that reconciles income tax attributable to continuing operations to the statutory federal income tax applied to our pre-tax income from continuing operations, including the nature and amount of significant reconciling items, and will require disclosure of additional disaggregated information on income taxes paid. ASU 2023-09 will become effective for us for annual periods beginning after December 15, 2024. Early adoption is permitted. We are in the process of evaluating the impact of future adoption of this standard on our consolidated financial statements.

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Ranpak Holdings Corp.

Notes to Unaudited Condensed Consolidated Financial Statements

(in millions, except share and per share data)

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, and our investment in a money market account, which is classified as a cash equivalent because of its short-term, highly liquid nature that is readily convertible to cash. The balance in our money market account was approximately $23.1 million and $17.6 million at June 30, 2024 and December 31, 2023, respectively. The fair value of money market accounts is considered Level 1 in the fair value hierarchy because they are securities traded in active markets.

Accounts Receivable, net — The components of accounts receivable, net were as follows:


	June 30, 2024		December 31, 2023
Accounts receivable	$	37.4	$	32.2
Allowance for doubtful accounts	(0.9)		(0.6)
Accounts receivable, net	$	36.5	$	31.6

At June 30, 2024, one customer’s accounts receivable balance represented 20.1% of our accounts receivable balance. At December 31, 2023, one customer’s accounts receivable balance represented 16.9% of our accounts receivable balance.

Inventories — The components of inventories were as follows:


	June 30, 2024		December 31, 2023
Raw materials	$	14.3	$	11.5
Work-in-process	1.3		1.4
Finished goods	10.4		4.4
Inventories	$	26.0	$	17.3

Property, Plant and Equipment, net — The following table details our property, plant and equipment, net:


	June 30, 2024		December 31, 2023
Land	$	2.4	$	2.4
Buildings and improvements	12.4		12.3
Leasehold improvements	20.7		20.7
Machinery and equipment	33.8		30.9
Computer and office equipment	17.0		16.8
Converting machines	224.0		216.6
Total property, plant and equipment	310.3		299.7
Accumulated depreciation	(171.2)		(157.6)
Property, plant and equipment, net	$	139.1	$	142.1

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 June 30,				Six Months Ended June 30,
	2024		2023		2024		2023
Cost of goods sold	$	8.4	$	8.6	$	18.8	$	16.9
Depreciation and amortization expense	1.0		0.8		2.2		1.6
Total depreciation expense	$	9.4	$	9.4	$	21.0	$	18.5

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Ranpak Holdings Corp.

Notes to Unaudited Condensed Consolidated Financial Statements

(in millions, except share and per share data)

Accrued Liabilities and Other – The components of accrued liabilities and other were as follows:


	June 30, 2024		December 31, 2023
Employee compensation	$	4.2	$	3.8
Taxes	6.7		2.5
Professional fees	3.0		3.3
Bonus	4.1		4.6
Interest	2.7		3.0
Warranty reserve	0.8		0.8
Amounts owed to customers	0.4		1.5
Other	1.6		2.6
Accrued liabilities and other	$	23.5	$	22.1

Supplemental Cash Flow Information — Supplemental cash flow information is as follows:


	Six Months Ended June 30,
	2024		2023
Supplemental cash flow information
Interest paid	$	14.4	$	11.9
Income taxes paid	$	1.2	$	2.0
Non-cash investing activities
Capital expenditures in accounts payable	$	0.1	$	1.0

Note 4 — Segment and Geographic Information

We have determined we have two operating segments which are aggregated into one reportable segment, Ranpak. Our CODM 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 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.The operating segments were aggregated for purposes of determining whether segments meet the quantitative threshold for separate reporting.

We attribute net revenue to individual countries based on the selling location. The following table presents our net revenue by geographic location:


	Three Months Ended June 30,				Six Months Ended June 30,
	2024		2023		2024		2023
North America	$	37.7	$	32.2	$	69.6	$	63.3
Europe/Asia	48.7		49.7		102.1		99.8
Net revenue	$	86.4	$	81.9	$	171.7	$	163.1

The following table presents our long-lived assets by geographic region:


	June 30, 2024		December 31, 2023
North America	$	86.0	$	87.5
Europe/Asia	75.3		78.3
Total long-lived assets	$	161.3	$	165.8

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Ranpak Holdings Corp.

Notes to Unaudited Condensed Consolidated Financial Statements

(in millions, except share and per share data)

Note 5 — Contracts with Customers

Deferred Revenue and Contract Balances — Deferred revenue primarily represents contractual amounts received from customers that exceed revenue recognized for automation equipment sales. Our enforceable contractual obligations have durations of less than one year and are included in current liabilities on the Unaudited Condensed Consolidated Balance Sheets. The following table presents our contract assets and contract liabilities as of the period ended June 30, 2024 and December 31, 2023:


	June 30, 2024		December 31, 2023
Contract Assets	$	2.3	$	1.4
Contract Liabilities	$	2.4	$	2.0

The contract liability balance represents deferred revenue related to our automation contracts. Deferred revenue from our automation projects is recognized within twelve months.

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 June 30,				Six Months Ended June 30,
	2024		2023		2024		2023
North America	$	31.1	$	26.6	$	57.3	$	51.9
Europe/Asia	41.7		42.6		88.0		85.7
Total paper and other revenue	72.8		69.2		145.3		137.6
North America	6.5		5.8		12.2		11.5
Europe/Asia	7.1		6.9		14.2		14.0
Machine lease revenue	13.6		12.7		26.4		25.5
Net revenue	$	86.4	$	81.9	$	171.7	$	163.1

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. Our customers are not concentrated in any specific geographic region. During the three and six months ended June 30, 2024 and 2023, no customers exceeded 10% of net revenue.

Note 6 — Goodwill and Intangible Assets, net

Goodwill

The following table shows our goodwill balances by operating segment that are aggregated into one reportable segment:


	North America		Europe/Asia		Total
Balance at December 31, 2023	$	338.8	$	111.3	$	450.1
Currency translation	—		(3.3)		(3.3)
Balance at June 30, 2024	$	338.8	$	108.0	$	446.8

Intangible Assets, net

Finite-lived or amortizable intangible assets consist of patented and unpatented technology, customer/distributor relationships, and other intellectual property.

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Ranpak Holdings Corp.

Notes to Unaudited Condensed Consolidated Financial Statements

(in millions, except share and per share data)

The following tables summarize our identifiable intangible assets, net with definite and indefinite useful lives:


	June 30, 2024
	Remaining Weighted-Average Useful Life (Years)	Gross Carrying Amount		Accumulated Amortization		Net
Customer/distributor relationships	10	$	195.6	$	(66.1)	$	129.5
Patented/unpatented technology	6	171.6		(78.8)		92.8
Intellectual property	7	0.5		(0.3)		0.2
Total definite-lived intangible assets	8	367.7		(145.2)		222.5
Trademarks/tradenames with indefinite lives		106.2		—		106.2
Identifiable intangible assets, net		$	473.9	$	(145.2)	$	328.7


	December 31, 2023
	Remaining Weighted-Average Useful Life (Years)	Gross Carrying Amount		Accumulated Amortization		Net
Customer/distributor relationships	10	$	198.8	$	(60.6)	$	138.2
Patented/unpatented technology	7	171.7		(70.9)		100.8
Intellectual property	7	0.5		(0.3)		0.2
Total definite-lived intangible assets	9	371.0		(131.8)		239.2
Trademarks/tradenames with indefinite lives		106.2		—		106.2
Identifiable intangible assets, net		$	477.2	$	(131.8)	$	345.4

The following table shows the remaining estimated amortization expense for our definite-lived intangible assets at June 30, 2024:


Year	Amount
2024	$	14.6
2025	28.4
2026	28.1
2027	27.9
2028	27.9
Thereafter	95.6
	$	222.5

Amortization expense was $7.3 million and $7.3 million in the second quarter of 2024 and 2023, respectively, and $14.5 million and $14.5 million in the six months ended June 30, 2024 and 2023, respectively.

Note 7 — Long-Term Debt

In 2019, the Company entered into a First Lien Credit Agreement (as amended, restated, supplemented or otherwise modified from time to time, the “Credit Agreement”), which consists of senior secured credit facilities of a $378.2 million USD-denominated first lien term facility (the “First Lien Dollar Term Facility”), a €140.0 million ($142.8 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 June 2026 and the

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Ranpak Holdings Corp.

Notes to Unaudited Condensed Consolidated Financial Statements

(in millions, except share and per share data)

Revolving Facility matures in June 2025. Borrowings under the Facilities, at our option, bear interest at either (1) an adjusted eurocurrency rate or the secured overnight financing rate (“SOFR”), or (2) a base rate, in each case plus an applicable margin. The applicable margin is 3.75% with respect to eurocurrency borrowings or SOFR borrowings, as applicable, and 2.75% with respect to base rate borrowings, 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 and SOFR borrowings, as applicable, and 3.00% with respect to base rate borrowings. The interest rate for the First Lien Dollar Term Facility as of June 30, 2024 and December 31, 2023, was 9.18% and 9.44%, respectively. The interest rate for the First Lien Euro Term Facility as of June 30, 2024 and December 31, 2023, was 7.50% and 7.86%, respectively.

As of June 30, 2024 and December 31, 2023, no amounts were outstanding under the Revolving Facility. The Revolving Facility includes borrowing capacity available for standby letters of credit of up to $5.0 million. As of June 30, 2024, we had $1.2 million committed to outstanding letters of credit, leaving net availability under the Revolving Facility at $43.8 million.

Long-term debt consisted of the following:


	June 30, 2024		December 31, 2023
First Lien Dollar Term Facility	$	250.0	$	250.0
First Lien Dollar Term Facility exit fees payable	2.5		2.5
First Lien Euro Term Facility	142.8		148.8
First Lien Euro Term Facility exit fees payable	1.5		1.5
Finance lease liabilities	2.0		1.9
Equipment financing	2.9		2.7
Deferred financing costs, net	(5.6)		(7.1)
Total debt	396.1		400.3
Less: current portion of long-term debt	(1.6)		(1.6)
Less: current portion of finance lease liabilities	(1.0)		(0.9)
Long-term debt	$	393.5	$	397.8

The Credit Agreement contains customary events of default, representations and warranties, and affirmative and negative covenants, including restrictions on certain of the Company’s subsidiaries’ ability to incur additional debt and liens or undergo certain fundamental changes, as well as certain financial tests and ratios. We were in compliance with all financial covenants as of June 30, 2024. The Credit Agreement also has customary mandatory prepayment provisions, including the requirement for the borrowers under the Credit Agreement to apply excess cash flow to mandatorily prepay term loans under the Credit Agreement.

Fees due upon repayment of the Term Loans and Revolving Loan are as follows (in each case outstanding and effective as of the time of such repayment):

•If the repayment occurs after December 31, 2023, but prior to June 30, 2024 (the “Exit Payment Date”), 0.75% of the Initial Revolving Credit Commitments and Outstanding Term Loans outstanding at such time; or

•If the repayment occurs after the Exit Payment Date, 1.00% of the Initial Revolving Credit Commitments and Outstanding Term Loans outstanding at such time.

As the Company expects repayment to occur after the Exit Payment Date, the Company has recorded fees equal to 1.00% of the Facilities, or approximately $5 million. These fees are included within the related balances of debt and deferred financing fees as of June 30, 2024. The Company evaluated the amendments to the Credit Agreement entered into during the second quarter of 2023, and determined that there were no provisions requiring bifurcation and treatment as a derivative, and that the transaction constituted a modification rather than an extinguishment.

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Ranpak Holdings Corp.

Notes to Unaudited Condensed Consolidated Financial Statements

(in millions, except share and per share data)

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.

Interest Rate Swap Agreement

Our 2.1% interest rate swap, which was entered into to hedge part of the floating interest rate exposure under the First Lien Dollar Term Facility and designated as a cash flow hedge, matured on June 1, 2024.

Cross Currency Swap Agreements

In November 2022, we entered into a fixed-to-fixed cross-currency rate swap contract between the Euro and U.S. dollar to protect the value of our investments in our foreign operations against adverse changes in foreign currency exchange rates and that we designated as a hedge and accounted for as a net investment hedge (the “November 2022 Swap”). At the spot exchange rate of 1.0205, we converted notional amounts of approximately $80.0 million at 5.84% for €78.4 million at 3.95%. On May 20, 2024, we entered into a fixed-for-fixed cross currency swap in a transaction commonly referred to as a “blend-and-extend,” whereby the November 2022 Swap was effectively terminated and voluntarily de-designated, and the modified swap (the “May 2024 Swap”) converted notional amounts of $80.0 million at 5.84% for €78.4 million at 4.54%. The May 2024 swap is designated as a hedge and accounted for as a net investment hedge.

The component of the gains and losses on our net investment in these designated foreign operations driven by changes in foreign exchange rates are economically partly offset by movements in the fair value of our cross-currency swap contracts. The fair value of the swaps is calculated each period, with changes in fair value recorded in currency translation in other comprehensive income (loss) and accumulated other comprehensive income (loss). Components of the May 2024 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 May 2024 Swap to maturity on June 1, 2025.

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 June 30, 2024 and December 31, 2023. The net amount of derivatives can be reconciled to the tabular disclosure of fair value in Note 10 — Fair Value Measurement:


		Assets (Liabilities)
	Balance Sheet Classification	June 30, 2024		December 31, 2023
Interest Rate Swap
Designated as cash flow hedges	Prepaid expenses and other current assets	$	—	$	3.2
Cross-Currency Swap
Designated as net investment hedge	Derivative instruments	$	(4.3)	$	(6.3)

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 (income) expense, net.


	Three Months Ended June 30,				Six Months Ended June 30,
	2024		2023		2024		2023
Interest rate swap designated as cash flow hedge	$	(1.6)	$	(2.0)	$	(4.0)	$	(3.8)
Cross-currency swap designated as net investment hedge, amounts excluded from effectiveness testing	$	0.1	$	(0.4)	$	0.5	$	(0.7)

Note 9 — Accumulated Other Comprehensive Income (Loss)

Accumulated other comprehensive income (loss) is a separate line within the Unaudited Condensed Consolidated Statements of Changes in Shareholders’ Equity that presents our other comprehensive income (loss) that has not been

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Ranpak Holdings Corp.

Notes to Unaudited Condensed Consolidated Financial Statements

(in millions, except share and per share data)

reported as part of net loss. The components of accumulated other comprehensive income (loss) at June 30, 2024 and December 31, 2023 were as follows:


	June 30, 2024
	Gross Balance		Tax Effect		Net Balance
Foreign currency translation
Translation of foreign subsidiaries	$	(7.8)	$	—	$	(7.8)
Realized gain on cross-currency swap	10.0		(2.4)		7.6
Unrealized loss on cross-currency swap	(4.3)		1.0		(3.3)
Total	$	(2.1)	$	(1.4)	$	(3.5)


	December 31, 2023
	Gross Balance		Tax Effect		Net Balance
Foreign currency translation
Translation of foreign subsidiaries	$	(3.6)	$	—	$	(3.6)
Realized gain on cross-currency swap	10.0		(2.4)		7.6
Unrealized loss on cross-currency swap	(6.3)		1.6		(4.7)
Total foreign currency translation	0.1		(0.8)		(0.7)
Unrealized gain on interest rate swaps	3.4		(0.6)		2.8
Total	$	3.5	$	(1.4)	$	2.1

The following tables present the changes in accumulated other comprehensive income (loss) by component for the six months ended June 30, 2024 and 2023:


	Six Months Ended June 30, 2024
	Foreign currency translation		Unrealized gain (loss) on interest rate swaps		Total
Beginning balance	$	(0.7)	$	2.8	$	2.1
Other comprehensive loss before reclassifications	(2.7)		1.8		(0.9)
Amounts reclassified from accumulated other comprehensive income (loss)	0.5		(4.0)		(3.5)
Tax effects	(0.6)		(0.6)		(1.2)
Ending balance	$	(3.5)	$	—	$	(3.5)


	Six Months Ended June 30, 2023
	Foreign currency translation		Unrealized gain (loss) on interest rate swaps		Total
Beginning balance	$	(3.4)	$	8.6	$	5.2
Other comprehensive loss before reclassifications	1.1		1.5		2.6
Amounts reclassified from accumulated other comprehensive income (loss)	1.1		(3.7)		(2.6)
Tax effects	(0.8)		(0.2)		(1.0)
Ending balance	$	(2.0)	$	6.2	$	4.2

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

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Ranpak Holdings Corp.

Notes to Unaudited Condensed Consolidated Financial Statements

(in millions, except share and per share data)

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 June 30, 2024 and December 31, 2023.

The cross-currency swap is valued utilizing forward and spot prices for currencies and SOFR forward curves, as applicable, which are considered Level 2 inputs. We estimate the fair value of our strategic investments in unconsolidated affiliates based on Level 3 inputs when there is an observable price change. The fair values of these investments are determined based upon valuation techniques using the Option Pricing Method and market comparables.

The following table provides the carrying amounts, estimated fair values and the respective fair value measurements of our financial instruments as of June 30, 2024 and December 31, 2023:


			Fair Value Measurements
	Carrying Amount		Level 1		Level 2		Level 3
June 30, 2024
Money market fund	$	23.1	$	23.1	$	—	$	—
Current and long-term debt	$	401.7	$	—	$	402.2	$	—
Cross-currency swap agreement	$	4.3	$	—	$	4.3	$	—

December 31, 2023
Money market fund	$	17.6	$	17.6	$	—	$	—
Current and long-term debt	$	407.4	$	—	$	398.2	$	—
Interest rate swap agreements	$	3.2	$	—	$	3.2	$	—
Cross-currency swap agreement	$	6.3	$	—	$	6.3	$	—

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:


	Three Months Ended June 30,		Six Months Ended June 30,
	2024	2023	2024	2023
Effective tax rate	24.8%	(15.5)%	(13.3)%	11.1%

The fluctuation in the effective tax rate over the periods presented above was primarily attributable to the litigation settlement and patent sale in the second quarter of 2024 (as described in Note 13 — Commitments and Contingencies), and a tax benefit of $0.1 million and tax expense of $0.6 million related to stock-based compensation windfall and shortfall recognized for the three and six months ended June 30, 2024, respectively. The effective tax rate for the six months ended June 30, 2024 is less than the U.S. federal and state statutory rates due primarily to stock-based compensation adjustments.

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Ranpak Holdings Corp.

Notes to Unaudited Condensed Consolidated Financial Statements

(in millions, except share and per share data)

Note 12 — Leases

We have operating and finance leases for automobiles, machinery, equipment, warehouses, and office buildings. Our leases have remaining terms ranging from one year to 15 years, some of which include options to extend the leases from one to five years, and some of which include options to terminate the leases within one year.

Supplemental balance sheet information related to leases is as follows:


	Classification	June 30, 2024		December 31, 2023
Lease assets
Operating lease right-of-use assets, net	Assets	$	22.2	$	23.7
Finance lease right of use assets, net	Property, plant, and equipment, net	1.9		1.9
Total lease assets		$	24.1	$	25.6
Lease liabilities
Operating lease liabilities, current	Current liabilities	$	3.9	$	3.8
Operating lease liabilities, non-current	Non-current liabilities	22.5		24.7
Finance lease liabilities, current	Current portion of long-term debt	1.0		0.9
Finance lease liabilities, non-current	Long-term debt	1.0		1.0
Total lease liabilities		$	28.4	$	30.4

The components of lease costs included in our Condensed Consolidated Statements of Operations were as follows:


	Three Months Ended June 30,				Six Months Ended June 30,
	2024		2023		2024		2023
Operating leases
Operating lease costs	$	1.5	$	1.2	$	2.8	$	2.2
Variable lease costs	0.2		—		0.5		0.1
Short-term lease costs	0.1		—		0.3		0.2
Finance leases
Amortization of right-of-use asset	$	0.3	$	0.2	$	0.8	$	0.4

Maturities of lease liabilities as of June 30, 2024 are as follows:


	Operating		Finance		Total
2024	$	3.1	$	0.6	$	3.7
2025	6.0		0.9		6.9
2026	4.5		0.5		5.0
2027	3.2		0.2		3.4
2028	2.9		—		2.9
2029 and Thereafter	22.4		—		22.4
Total lease payments	42.1		2.2		44.3
Less lease interest	(15.7)		(0.2)		(15.9)
Total lease liabilities	$	26.4	$	2.0	$	28.4

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Ranpak Holdings Corp.

Notes to Unaudited Condensed Consolidated Financial Statements

(in millions, except share and per share data)

Additional information related to leases is presented as follows:


	June 30, 2024	December 31, 2023
Operating leases
Weighted average remaining lease term	10.1 years	10.3 years
Weighted average discount rate	10.0%	10.0%
Finance leases
Weighted average remaining lease term	2.3 years	2.4 years
Weighted average discount rate	8.0%	7.2%


	Three Months Ended June 30,				Six Months Ended June 30,
	2024		2023		2024		2023
Cash paid for amounts included in the measurement of lease liabilities
Operating cash flows from operating leases	$	1.7	$	1.3	$	3.3	$	2.3
Financing cash flows from finance leases	0.3		0.2		0.6		0.4
Right-of-use assets obtained in exchange for lease liabilities
Leased assets obtained in exchange for new operating lease liabilities	$	0.1	$	0.2	$	0.2	$	18.2
Leased assets obtained in exchange for new finance lease liabilities	—		0.2		0.4		0.3

Note 13 — Commitments and Contingencies

Litigation

On an ongoing basis, we assess the potential liabilities related to any lawsuits or claims brought against us. While it is typically very difficult to determine the timing and ultimate outcome of these actions, we use our best judgment to determine if it is probable that we will incur an expense related to the settlement or final adjudication of these matters and whether a reasonable estimation of the probable loss, if any, can be made. In assessing probable losses, we make estimates of the amount of any insurance recoveries, if any. We accrue a liability when we believe a loss is probable and the amount of loss can be reasonably estimated. Due to the inherent uncertainties related to the eventual outcome of litigation and potential insurance recovery, it is possible that disputed matters may be resolved for amounts materially different from any provisions or disclosures that we have previously made. We expense legal costs as incurred.

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 six months ended June 30, 2024.

On April 22, 2024, we entered into a settlement agreement (“the Settlement Agreement”) with a competitor (the “Defendant”) in connection with a patent infringement action we filed against the Defendant regarding a patented feature on some of our machines. Pursuant to the Settlement Agreement, on April 24, 2024, we received a cash payment in the amount of €15 million (approximately $16.1 million USD), and a second cash payment of €5 million (approximately $5.4 million USD) related to the sale of two patents, both of which were recorded in other non-operating income, net in our Condensed Consolidated Statements of Operations and Comprehensive Income (Loss). The patents sold were never used in a commercial product or arrangement and the combined carrying value at the time of sale was insignificant.

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Ranpak Holdings Corp.

Notes to Unaudited Condensed Consolidated Financial Statements

(in millions, except share and per share data)

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.

Note 14 — Stock-Based Compensation

We record stock-based compensation at fair value on the date of grant and record the expense for these awards in SG&A expenses in our Unaudited Condensed Consolidated Statements of Operations on a ratable basis over the requisite employee service period. Stock-based compensation expense includes actual forfeitures incurred. For performance-based awards, including performance-based restricted stock units (“PRSUs”) and our 2021 LTIP PRSUs, we reassess at each reporting date whether achievement of the performance condition is probable and accrue compensation expense if and when achievement of the performance condition is probable.

The table below summarizes our stock-based compensation plans:


	Three Months Ended June 30,				Six Months Ended June 30,
	2024		2023		2024		2023
Stock-based compensation expense	$	1.5	$	(9.5)	$	2.8	$	(6.7)
Tax effect on stock-based compensation	0.4		(2.4)		0.7		(1.7)
Stock-based compensation expense, net of tax	$	1.1	$	(7.1)	$	2.1	$	(5.0)

As of June 30, 2024, the pool of shares in the Ranpak Holdings Corp. 2019 Omnibus Incentive Plan (as amended, restated, supplemented or otherwise modified from time to time) is summarized as follows:


2019 Plan						Quantity
As of January 1, 2024						5,885,434
Awards granted						(1,735,169)
Awards forfeited						1,046,311
Available for future awards						5,196,576

Activity related to our restricted stock units (“RSUs”), PRSUs, and Director Stock Units is as follows:


	RSUs			PRSUs			Director Stock Units
	Quantity	Weighted Average Grant Date Fair Value		Quantity	Weighted Average Grant Date Fair Value		Quantity	Weighted Average Grant Date Fair Value
Outstanding, January 1, 2024	948,781	$	6.17	3,289,213	$	16.44	216,720	$	3.23
Granted	975,845	5.43		622,049	4.46		137,275	6.47
Vested	(156,770)	8.19		(274,629)	15.87		(244,620)	3.63
Forfeited	(46,468)	6.84		(999,843)	6.90		—	—
Outstanding, June 30, 2024	1,721,388	$	5.56	2,636,790	$	17.29	109,375	$	6.40

Table of Contents

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.

Earnings (loss) per share is calculated using the two-class method. 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 June 30, 2024, 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:


	Three Months Ended June 30,				Six Months Ended June 30,
	2024		2023		2024		2023
Numerator:
Net income (loss)	$	5.5	$	(2.1)	$	(2.6)	$	(14.5)
Net income (loss) attributable to common stockholders	$	5.5	$	(2.1)	$	(2.6)	$	(14.5)
Denominator:
Basic weighted average common shares outstanding	83,071,520		82,432,158		82,876,914		82,285,291
Dilutive effect of potential common shares	52,116		—		—		—
Weighted average common shares outstanding - dilutive	83,123,636		82,432,158		82,876,914		82,285,291
Two-class method:
Basic and diluted income (loss) per share	$	0.07	$	(0.03)	$	(0.03)	$	(0.18)
Class A Common Stock:
Basic weighted average common shares outstanding	80,150,421		79,511,059		79,955,815		79,364,192
Dilutive effect of potential common shares	52,116		—

Ranpak Holdings Corp. [PACK] Filings
10-Q	[2024-08-01]
10-Q	[2024-05-02]
10-K	[2024-03-14]
10-Q	[2023-10-31]
10-Q	[2023-08-03]
10-Q	[2023-05-08]
10-K	[2023-03-31]
10-Q	[2022-11-01]
10-Q	[2022-07-28]
10-Q	[2022-05-06]
10-K	[2022-02-28]
10-Q	[2021-10-28]
10-Q	[2021-07-29]
10-Q	[2021-05-07]
10-K	[2021-03-04]
10-Q	[2020-11-06]
10-Q	[2020-07-30]
10-Q	[2020-05-11]
10-K	[2020-03-17]
10-Q	[2019-11-07]
10-Q	[2019-08-13]
10-Q	[2019-05-07]
10-K	[2019-03-01]
10-Q	[2018-11-08]
10-Q	[2018-08-06]
10-Q	[2018-05-10]
10-K	[2018-03-29]
S-1	[2017-10-13]