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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 10-Q

 

(Mark One)

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

 

For the quarterly period ended September 30, 2022

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 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 ☒ No ☐

 

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 ☒ No ☐

 

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

 

Accelerated filer

Non-accelerated filer

 

Smaller reporting company

Emerging growth company

 

 

 

 

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 79,085,973 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.

 

 


 

Ranpak Holdings Corp.

Quarterly Report on Form 10-Q

For the Period Ended September 30, 2022

 

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

 

23

Item 3. Quantitative and Qualitative Disclosures About Market Risk

 

38

Item 4. Controls and Procedures

 

39

Part II – Other Information

 

39

Item 1. Legal Proceedings

 

39

Item 1A. Risk Factors

 

39

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

 

39

Item 3. Defaults Upon Senior Securities

 

39

Item 4. Mine Safety Disclosures

 

39

Item 5. Other Information

 

39

Item 6. Exhibits

 

40

Signatures

 

41

 

 


 

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 Nine Months Ended September 30, 2022 and 2021

Unaudited Condensed Consolidated Balance Sheets – September 30, 2022 and December 31, 2021

Unaudited Condensed Consolidated Statements of Changes in Shareholders’ Equity for the Three and Nine Months Ended September 30, 2022 and 2021

Unaudited Condensed Consolidated Statements of Cash Flows for the Nine Months Ended September 30, 2022 and 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)

 

 

 

Three Months Ended September 30,

 

 

Nine Months Ended September 30,

 

 

 

2022

 

 

2021

 

 

2022

 

 

2021

 

Paper revenue

 

$

62.6

 

 

$

81.2

 

 

$

199.0

 

 

$

229.5

 

Machine lease revenue

 

 

11.7

 

 

 

11.8

 

 

 

36.4

 

 

 

35.0

 

Other revenue

 

 

3.5

 

 

 

4.1

 

 

 

11.7

 

 

 

10.3

 

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 income, net

 

 

(4.0

)

 

 

-

 

 

 

(4.0

)

 

 

-

 

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 loss

 

$

(8.7

)

 

$

(1.4

)

 

$

(34.1

)

 

$

(0.3

)

 

 

 

 

 

 

 

 

 

 

 

 

 

Two-class method

 

 

 

 

 

 

 

 

 

 

 

 

Loss per share

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

$

(0.11

)

 

$

(0.02

)

 

$

(0.42

)

 

$

-

 

Diluted

 

$

(0.11

)

 

$

(0.02

)

 

$

(0.42

)

 

$

-

 

Class A – earnings (loss) per share

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

$

(0.11

)

 

$

(0.02

)

 

$

(0.42

)

 

$

-

 

Diluted

 

$

(0.11

)

 

$

(0.02

)

 

$

(0.42

)

 

$

-

 

Class C – earnings (loss) per share

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

$

(0.10

)

 

$

(0.03

)

 

$

(0.41

)

 

$

-

 

Diluted

 

$

(0.10

)

 

$

(0.03

)

 

$

(0.41

)

 

$

-

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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

)

 

See notes to unaudited condensed consolidated financial statements.

2


 

Ranpak Holdings Corp.

Unaudited Condensed Consolidated Balance Sheets

(in millions, except share data)

 

 

 

September 30, 2022

 

 

December 31, 2021

 

Assets

 

 

 

 

 

 

Current assets

 

 

 

 

 

 

Cash and cash equivalents

 

$

61.3

 

 

$

103.9

 

Accounts receivable, net

 

 

36.4

 

 

 

43.7

 

Inventories, net

 

 

32.3

 

 

 

32.9

 

Income tax receivable

 

 

8.5

 

 

 

2.7

 

Prepaid expenses and other current assets

 

 

25.9

 

 

 

8.3

 

Total current assets

 

 

164.4

 

 

 

191.5

 

 

 

 

 

 

 

 

Property, plant and equipment, net

 

 

118.9

 

 

 

126.3

 

Operating lease right-of-use assets, net

 

 

5.8

 

 

 

6.6

 

Goodwill

 

 

437.8

 

 

 

453.0

 

Intangible assets, net

 

 

372.1

 

 

 

406.5

 

Deferred tax assets

 

 

-

 

 

 

0.1

 

Other assets

 

 

41.6

 

 

 

29.4

 

Total assets

 

$

1,140.6

 

 

$

1,213.4

 

 

 

 

 

 

 

 

Liabilities and Shareholders' Equity

 

 

 

 

 

 

Current liabilities

 

 

 

 

 

 

Accounts payable

 

$

24.4

 

 

$

33.5

 

Accrued liabilities and other

 

 

17.7

 

 

 

31.5

 

Current portion of long-term debt

 

 

0.9

 

 

 

1.0

 

Operating lease liabilities, current

 

 

1.8

 

 

 

2.4

 

Deferred machine fee revenue

 

 

1.6

 

 

 

3.1

 

Total current liabilities

 

 

46.4

 

 

 

71.5

 

 

 

 

 

 

 

 

Long-term debt

 

 

379.6

 

 

 

400.4

 

Deferred tax liabilities

 

 

92.1

 

 

 

97.7

 

Derivative instruments

 

 

-

 

 

 

2.4

 

Operating lease liabilities, non-current

 

 

4.0

 

 

 

4.3

 

Other liabilities

 

 

6.9

 

 

 

0.9

 

Total liabilities

 

 

529.0

 

 

 

577.2

 

 

 

 

 

 

 

 

Commitments and contingencies – Note 13

 

 

 

 

 

 

Shareholders' equity

 

 

 

 

 

 

Class A common stock, $0.0001 par, 200,000,000 shares

 

 

 

 

 

 

authorized at September 30, 2022 and December 31, 2021

 

 

 

 

 

 

Shares issued and outstanding: 79,064,041 and 78,482,024

 

 

 

 

 

 

at September 30, 2022 and December 31, 2021, respectively

 

 

-

 

 

 

-

 

Class C common stock, $0.0001 par, 200,000,000 shares

 

 

 

 

 

 

authorized at September 30, 2022 and December 31, 2021

 

 

 

 

 

 

Shares issued and outstanding: 2,921,099

 

 

 

 

 

 

at September 30, 2022 and December 31, 2021

 

 

-

 

 

 

-

 

Additional paid-in capital

 

 

706.8

 

 

 

688.9

 

Accumulated deficit

 

 

(89.4

)

 

 

(55.3

)

Accumulated other comprehensive income (loss)

 

 

(5.8

)

 

 

2.6

 

Total shareholders' equity

 

 

611.6

 

 

 

636.2

 

Total liabilities and shareholders' equity

 

$

1,140.6

 

 

$

1,213.4

 

 

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)

 

 

 

Common Stock

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Class A

 

 

Class C

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Shares

 

 

Amount

 

 

Shares

 

 

Amount

 

 

Additional Paid-In Capital

 

 

Accumulated Earnings (Deficit)

 

 

Accumulated Other Comprehensive Income (Loss)

 

 

Total

 

Balance at December 31, 2020

 

 

69,005,059

 

 

$

-

 

 

 

6,511,293

 

 

$

-

 

 

$

564.7

 

 

$

(52.5

)

 

$

10.7

 

 

$

522.9

 

Stock-based awards vested and distributed

 

 

332,718

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(1.7

)

 

 

-

 

 

 

-

 

 

 

(1.7

)

Issue Director shares

 

 

5,584

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

Amortization of restricted stock units

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

2.7

 

 

 

-

 

 

 

-

 

 

 

2.7

 

Net income

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

6.3

 

 

 

-

 

 

 

6.3

 

Other comprehensive loss

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(6.4

)

 

 

(6.4

)

Balance at March 31, 2021

 

 

69,343,361

 

 

$

-

 

 

 

6,511,293

 

 

$

-

 

 

$

565.7

 

 

$

(46.2

)

 

$

4.3

 

 

$

523.8

 

Shareholder conversion of Class C to Class A

 

 

3,590,194

 

 

 

-

 

 

 

(3,590,194

)

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

May 2021 Equity Offering

 

 

5,250,000

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

103.4

 

 

 

-

 

 

 

-

 

 

 

103.4

 

Stock-based awards vested and distributed

 

 

202,414

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

Issue Director shares

 

 

83,954

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

Amortization of restricted stock units

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

4.7

 

 

 

-

 

 

 

-

 

 

 

4.7

 

Net loss

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(5.2

)

 

 

-

 

 

 

(5.2

)

Other comprehensive income

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

2.6

 

 

 

2.6

 

Balance at June 30, 2021

 

 

78,469,923

 

 

$

-

 

 

 

2,921,099

 

 

$

-

 

 

$

673.8

 

 

$

(51.4

)

 

$

6.9