10-Q 1 pack-20220331.htm 10-Q 10-Q
falsehttp://www.ranpak.com/20220331#CurrentPortionOfLongTermDebtAndFinanceLeaseLiabilitieshttp://fasb.org/us-gaap/2021-01-31#LongTermDebtNoncurrent8.1Q1http://fasb.org/us-gaap/2021-01-31#PropertyPlantAndEquipmentNet0001712463--12-310001712463us-gaap:CommonClassAMember2022-05-020001712463us-gaap:CommonClassAMember2021-05-312021-05-310001712463us-gaap:AccumulatedGainLossNetCashFlowHedgeParentMember2022-03-310001712463pack:ComputerandOfficeEquipmentMember2021-12-310001712463us-gaap:LandMember2022-03-310001712463pack:RealizedGainLossOnCrossCurrencySwapMember2022-01-012022-03-310001712463us-gaap:CommonClassCMember2022-03-310001712463us-gaap:FairValueInputsLevel3Member2021-12-310001712463srt:NorthAmericaMemberus-gaap:AccountingStandardsUpdate201409Member2021-01-012021-03-310001712463us-gaap:RevolvingCreditFacilityMember2021-12-310001712463pack:RestrictedStockUnitsandPerformancebasedRestrictedStockUnitsMember2022-01-012022-03-310001712463pack:InterestRateSwapThreeMember2022-01-012022-03-310001712463us-gaap:RetainedEarningsMember2022-03-3100017124632019-01-012019-12-310001712463srt:MinimumMemberpack:PerformanceBasedRestrictedStockUnitsMember2022-01-012022-03-310001712463pack:DirectorStockUnitsMember2022-03-310001712463us-gaap:RestrictedStockUnitsRSUMember2022-01-012022-03-310001712463us-gaap:TechnologyBasedIntangibleAssetsMembersrt:WeightedAverageMember2021-01-012021-12-310001712463pack:ConvertingMachinesMember2022-03-310001712463us-gaap:AccountingStandardsUpdate201602Member2021-01-012021-03-310001712463us-gaap:AccumulatedTranslationAdjustmentMember2022-01-012022-03-310001712463us-gaap:RevolvingCreditFacilityMember2022-03-310001712463us-gaap:CommonClassCMember2022-05-020001712463us-gaap:AccumulatedOtherComprehensiveIncomeMember2021-01-012021-03-310001712463us-gaap:EarliestTaxYearMember2022-01-012022-03-310001712463us-gaap:LineOfCreditMemberpack:FirstLienCreditAgreementMember2022-01-012022-03-310001712463us-gaap:NondesignatedMemberus-gaap:InterestRateSwapMember2019-01-310001712463us-gaap:AdditionalPaidInCapitalMember2021-12-310001712463us-gaap:FairValueInputsLevel2Member2022-03-310001712463us-gaap:EmployeeStockOptionMemberpack:A2019PlanMember2022-03-310001712463us-gaap:DesignatedAsHedgingInstrumentMemberus-gaap:CashFlowHedgingMemberus-gaap:OtherAssetsMemberus-gaap:InterestRateSwapMember2021-12-310001712463pack:EuropeSegmentMember2021-12-310001712463pack:NoCustomerMembersrt:MaximumMemberus-gaap:CustomerConcentrationRiskMemberus-gaap:AccountsReceivableMember2022-01-012022-03-310001712463pack:ComputerandOfficeEquipmentMember2022-03-310001712463us-gaap:AdditionalPaidInCapitalMember2022-01-012022-03-310001712463us-gaap:IntellectualPropertyMember2021-12-310001712463us-gaap:ProductAndServiceOtherMember2022-01-012022-03-310001712463us-gaap:CommonClassCMember2020-12-310001712463pack:TwoThousandTwentyOneLtipPrsusMembersrt:MinimumMember2022-01-012022-03-310001712463us-gaap:AccountingStandardsUpdate201409Memberpack:EuropeAsiaMember2021-01-012021-03-310001712463us-gaap:DesignatedAsHedgingInstrumentMemberpack:InterestRateSwapTwoMemberus-gaap:CashFlowHedgingMember2022-03-310001712463pack:NoCustomerMemberus-gaap:RevenueFromContractWithCustomerMemberus-gaap:CustomerConcentrationRiskMember2022-01-012022-03-310001712463pack:RealizedGainLossOnCrossCurrencySwapMember2021-12-310001712463us-gaap:CostOfSalesMember2021-01-012021-03-310001712463pack:InterestRateSwapFourMember2022-04-012022-04-300001712463us-gaap:CustomerRelationshipsMember2021-12-310001712463pack:DirectorStockUnitsMember2022-01-012022-03-310001712463us-gaap:CommonClassAMember2021-03-310001712463us-gaap:FairValueInputsLevel1Member2021-12-310001712463pack:DepreciationandAmortizationMember2021-01-012021-03-310001712463us-gaap:AccumulatedOtherComprehensiveIncomeMember2022-01-012022-03-310001712463pack:TwoThousandTwentyOneLtipPrsusMembersrt:MaximumMember2022-01-012022-03-310001712463pack:EuropeSegmentMember2022-01-012022-03-310001712463us-gaap:RevolvingCreditFacilityMemberus-gaap:LineOfCreditMember2022-03-3100017124632022-01-012022-03-310001712463us-gaap:DomesticLineOfCreditMemberpack:FirstLienTermFacilityMember2021-12-310001712463us-gaap:FairValueInputsLevel3Member2022-03-310001712463pack:EuropeSegmentMember2022-03-310001712463pack:OneMadisonGroupLLCMember2022-01-012022-03-310001712463us-gaap:AccountingStandardsUpdate201409Memberpack:EuropeAsiaMember2022-01-012022-03-310001712463pack:DepreciationandAmortizationMember2022-01-012022-03-310001712463us-gaap:DesignatedAsHedgingInstrumentMemberus-gaap:CashFlowHedgingMemberpack:AccruedLiabilitiesAndOtherMemberus-gaap:InterestRateSwapMember2021-12-310001712463us-gaap:CostOfSalesMember2022-01-012022-03-310001712463us-gaap:FairValueInputsLevel1Member2022-03-310001712463us-gaap:ProductAndServiceOtherMember2021-01-012021-03-310001712463us-gaap:CommonClassAMember2021-01-012021-03-310001712463us-gaap:IntellectualPropertyMember2022-03-310001712463srt:WeightedAverageMemberus-gaap:IntellectualPropertyMember2022-01-012022-03-310001712463us-gaap:CarryingReportedAmountFairValueDisclosureMember2022-03-310001712463us-gaap:AccumulatedTranslationAdjustmentMember2021-12-310001712463pack:FirstLienDollarTermFacilityMember2021-06-300001712463us-gaap:DesignatedAsHedgingInstrumentMemberpack:InterestRateSwapTwoMemberus-gaap:CashFlowHedgingMemberpack:FirstLienTermFacilityMember2022-03-310001712463pack:NorthAmericaSegmentMember2022-03-310001712463pack:AccumulatedGainLossOnCrossCurrencySwapMember2022-01-012022-03-310001712463us-gaap:CustomerRelationshipsMember2022-03-310001712463us-gaap:LineOfCreditMemberus-gaap:EurodollarMemberpack:FirstLienCreditAgreementMember2021-01-012021-12-310001712463srt:WeightedAverageMember2022-01-012022-03-310001712463pack:EuropeAndAsiaSegmentMember2022-01-012022-03-3100017124632021-01-012021-03-310001712463us-gaap:DesignatedAsHedgingInstrumentMemberus-gaap:CashFlowHedgingMemberus-gaap:InterestRateSwapMember2021-12-310001712463us-gaap:DesignatedAsHedgingInstrumentMemberus-gaap:CashFlowHedgingMember2021-12-310001712463us-gaap:DesignatedAsHedgingInstrumentMember2022-03-310001712463us-gaap:ForeignLineOfCreditMemberpack:FirstLienTermFacilityMember2021-12-310001712463us-gaap:LatestTaxYearMember2022-01-012022-03-310001712463us-gaap:FairValueInputsLevel2Member2021-12-310001712463pack:MachineLeaseMember2022-01-012022-03-310001712463us-gaap:CommonClassAMember2022-01-012022-03-310001712463us-gaap:CommonClassCMember2021-03-310001712463us-gaap:RetainedEarningsMember2021-12-310001712463pack:PerformanceBasedRestrictedStockUnitsMember2021-12-310001712463pack:InterestRateSwapThreeMember2022-02-012022-02-280001712463pack:InterestRateSwapThreeMember2021-09-3000017124632020-12-310001712463pack:NorthAmericaSegmentMember2022-01-012022-03-310001712463pack:EuropeAndAsiaSegmentMember2021-01-012021-03-310001712463us-gaap:OverAllotmentOptionMember2021-05-012021-05-310001712463us-gaap:RevolvingCreditFacilityMemberus-gaap:LineOfCreditMember2021-12-310001712463pack:InterestRateSwapFiveMember2022-04-300001712463us-gaap:LineOfCreditMemberpack:FirstLienTermFacilityMember2022-03-310001712463us-gaap:DesignatedAsHedgingInstrumentMemberus-gaap:PrepaidExpensesAndOtherCurrentAssetsMemberus-gaap:CashFlowHedgingMemberus-gaap:InterestRateSwapMember2022-03-310001712463us-gaap:ForeignLineOfCreditMemberpack:FirstLienTermFacilityMember2022-03-310001712463us-gaap:MachineryAndEquipmentMember2021-12-310001712463us-gaap:AdditionalPaidInCapitalMember2021-01-012021-03-310001712463pack:DirectorStockUnitsMember2021-12-310001712463us-gaap:RestrictedStockUnitsRSUMembersrt:DirectorMember2022-01-012022-03-310001712463us-gaap:DomesticLineOfCreditMemberpack:FirstLienTermFacilityMember2022-03-310001712463pack:InterestRateSwapFourMember2022-02-280001712463pack:EuropeAndAsiaSegmentMember2021-12-310001712463pack:PaperMember2021-01-012021-03-310001712463pack:MachineLeaseMember2021-01-012021-03-310001712463us-gaap:RestrictedStockUnitsRSUMember2022-03-310001712463us-gaap:DesignatedAsHedgingInstrumentMemberus-gaap:CashFlowHedgingMember2022-03-310001712463us-gaap:DesignatedAsHedgingInstrumentMemberus-gaap:CashFlowHedgingMemberus-gaap:PrepaidExpensesAndOtherCurrentAssetsMemberus-gaap:InterestRateSwapMember2021-12-310001712463us-gaap:AdditionalPaidInCapitalMember2020-12-310001712463us-gaap:EmployeeStockOptionMemberpack:A2019PlanMember2022-01-012022-03-310001712463srt:NorthAmericaMemberus-gaap:AccountingStandardsUpdate201409Member2022-01-012022-03-310001712463us-gaap:DesignatedAsHedgingInstrumentMemberus-gaap:CashFlowHedgingMemberus-gaap:OtherAssetsMemberus-gaap:InterestRateSwapMember2022-03-3100017124632020-02-132020-02-140001712463us-gaap:AccumulatedOtherComprehensiveIncomeMember2021-12-3100017124632021-03-310001712463pack:PerformanceBasedRestrictedStockUnitsMember2022-01-012022-03-310001712463pack:PerformanceBasedRestrictedStockUnitsMember2022-03-310001712463us-gaap:RestrictedStockUnitsRSUMember2021-12-310001712463us-gaap:DesignatedAsHedgingInstrumentMemberus-gaap:CashFlowHedgingMemberus-gaap:InterestRateSwapMember2019-09-250001712463us-gaap:CommonClassAMember2021-12-310001712463us-gaap:RevenueFromContractWithCustomerMemberpack:NoCustomerMemberus-gaap:CustomerConcentrationRiskMember2021-01-012021-03-310001712463srt:WeightedAverageMember2021-01-012021-12-310001712463us-gaap:LandMember2021-12-310001712463us-gaap:DesignatedAsHedgingInstrumentMemberpack:InterestRateSwapTwoMemberus-gaap:CashFlowHedgingMember2019-09-250001712463us-gaap:RetainedEarningsMember2021-03-310001712463us-gaap:CustomerRelationshipsMembersrt:WeightedAverageMember2022-01-012022-03-3100017124632022-03-310001712463pack:EuropeAndAsiaSegmentMember2022-03-310001712463us-gaap:LondonInterbankOfferedRateLIBORMemberus-gaap:LineOfCreditMemberpack:FirstLienCreditAgreementMember2022-01-012022-03-310001712463us-gaap:TechnologyBasedIntangibleAssetsMembersrt:WeightedAverageMember2022-01-012022-03-310001712463us-gaap:StandbyLettersOfCreditMember2022-03-310001712463us-gaap:AccumulatedOtherComprehensiveIncomeMember2020-12-310001712463us-gaap:RetainedEarningsMember2022-01-012022-03-310001712463us-gaap:ForeignLineOfCreditMemberpack:FirstLienTermFacilityMember2019-06-030001712463us-gaap:AccountingStandardsUpdate201602Member2022-01-012022-03-310001712463us-gaap:AccumulatedGainLossNetCashFlowHedgeParentMember2022-01-012022-03-310001712463us-gaap:AccumulatedOtherComprehensiveIncomeMember2022-03-310001712463us-gaap:RetainedEarningsMember2020-12-310001712463pack:AccumulatedGainLossOnCrossCurrencySwapMember2022-03-310001712463pack:FirstLienTermFacilityMember2022-01-012022-03-310001712463pack:RestrictedStockUnitsandPerformancebasedRestrictedStockUnitsMember2021-01-012021-03-310001712463pack:FirstLienTermFacilityMember2021-03-310001712463us-gaap:InProcessResearchAndDevelopmentMember2021-12-310001712463us-gaap:DomesticLineOfCreditMemberpack:FirstLienTermFacilityMember2019-06-030001712463us-gaap:AccumulatedOtherComprehensiveIncomeMember2021-03-310001712463us-gaap:RevolvingCreditFacilityMember2019-06-030001712463us-gaap:AccumulatedTranslationAdjustmentMember2022-03-310001712463us-gaap:CommonClassAMember2021-05-310001712463us-gaap:CommonClassAMember2020-12-310001712463us-gaap:RevolvingCreditFacilityMember2022-01-012022-03-310001712463srt:WeightedAverageMemberus-gaap:IntellectualPropertyMember2021-01-012021-12-310001712463us-gaap:CommonClassBMember2022-03-310001712463us-gaap:CommonClassCMember2021-12-310001712463us-gaap:RestrictedStockUnitsRSUMemberus-gaap:ShareBasedCompensationAwardTrancheOneMember2022-01-012022-03-310001712463us-gaap:DesignatedAsHedgingInstrumentMemberus-gaap:CashFlowHedgingMemberus-gaap:InterestRateSwapMember2022-03-310001712463us-gaap:LineOfCreditMemberus-gaap:EurodollarMemberpack:FirstLienCreditAgreementMember2022-01-012022-03-310001712463us-gaap:CommonClassAMember2021-05-012021-05-310001712463us-gaap:AdditionalPaidInCapitalMember2022-03-3100017124632021-05-012021-05-310001712463pack:NorthAmericaSegmentMember2021-01-012021-03-310001712463us-gaap:AccountingStandardsUpdate201409Member2021-01-012021-03-310001712463us-gaap:TrademarksAndTradeNamesMember2021-12-3100017124632021-12-310001712463us-gaap:InterestExpenseMemberus-gaap:InterestRateSwapMember2021-01-012021-03-310001712463us-gaap:CustomerRelationshipsMembersrt:WeightedAverageMember2021-01-012021-12-310001712463us-gaap:RetainedEarningsMember2021-01-012021-03-310001712463pack:PaperMember2022-01-012022-03-310001712463pack:ConvertingMachinesMember2021-12-310001712463us-gaap:DesignatedAsHedgingInstrumentMember2021-12-310001712463us-gaap:CommonClassCMember2021-01-012021-03-310001712463us-gaap:CommonClassAMember2022-03-310001712463srt:MaximumMemberpack:PerformanceBasedRestrictedStockUnitsMember2022-01-012022-03-310001712463us-gaap:DesignatedAsHedgingInstrumentMemberus-gaap:CashFlowHedgingMemberus-gaap:DerivativeFinancialInstrumentsLiabilitiesMemberus-gaap:InterestRateSwapMember2022-03-310001712463us-gaap:DesignatedAsHedgingInstrumentMemberpack:InterestRateSwapTwoMemberus-gaap:CashFlowHedgingMemberpack:FirstLienTermFacilityMember2021-12-310001712463us-gaap:InterestExpenseMemberus-gaap:InterestRateSwapMember2022-01-012022-03-310001712463pack:NorthAmericaSegmentMember2021-12-310001712463us-gaap:TechnologyBasedIntangibleAssetsMember2022-03-310001712463us-gaap:AdditionalPaidInCapitalMember2021-03-310001712463us-gaap:BuildingAndBuildingImprovementsMember2021-12-310001712463us-gaap:DesignatedAsHedgingInstrumentMemberus-gaap:CashFlowHedgingMemberus-gaap:DerivativeFinancialInstrumentsLiabilitiesMemberus-gaap:InterestRateSwapMember2021-12-310001712463pack:AccumulatedGainLossOnCrossCurrencySwapMember2021-12-310001712463us-gaap:DesignatedAsHedgingInstrumentMemberus-gaap:CashFlowHedgingMemberpack:FirstLienTermFacilityMemberus-gaap:InterestRateSwapMember2022-03-310001712463us-gaap:BuildingAndBuildingImprovementsMember2022-03-310001712463us-gaap:TrademarksAndTradeNamesMember2022-03-310001712463us-gaap:MachineryAndEquipmentMember2022-03-310001712463us-gaap:DesignatedAsHedgingInstrumentMemberus-gaap:CashFlowHedgingMemberpack:AccruedLiabilitiesAndOtherMemberus-gaap:InterestRateSwapMember2022-03-310001712463us-gaap:DesignatedAsHedgingInstrumentMemberus-gaap:CashFlowHedgingMemberus-gaap:InterestRateSwapMember2020-03-270001712463us-gaap:CommonClassCMember2022-01-012022-03-310001712463us-gaap:LineOfCreditMemberpack:FirstLienTermFacilityMember2021-12-310001712463us-gaap:InProcessResearchAndDevelopmentMember2022-03-310001712463us-gaap:AccumulatedGainLossNetCashFlowHedgeParentMember2021-12-310001712463pack:OneMadisonGroupLLCMember2021-01-012021-03-310001712463pack:NoCustomerMembersrt:MaximumMemberus-gaap:CustomerConcentrationRiskMemberus-gaap:AccountsReceivableMember2021-01-012021-12-310001712463us-gaap:CarryingReportedAmountFairValueDisclosureMember2021-12-310001712463pack:InterestRateSwapTwoMemberus-gaap:DesignatedAsHedgingInstrumentMemberus-gaap:CashFlowHedgingMember2021-12-310001712463pack:RealizedGainLossOnCrossCurrencySwapMember2022-03-3100017124632021-01-012021-12-310001712463us-gaap:AccountingStandardsUpdate201409Member2022-01-012022-03-310001712463us-gaap:DesignatedAsHedgingInstrumentMemberus-gaap:CashFlowHedgingMemberpack:FirstLienTermFacilityMemberus-gaap:InterestRateSwapMember2021-12-310001712463us-gaap:TechnologyBasedIntangibleAssetsMember2021-12-31iso4217:EURutr:Ratexbrli:purepack:Segmentxbrli:sharesiso4217:USDxbrli:sharesiso4217:USD

 

 

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 March 31, 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 May 2, 2022, the registrant had 79,010,828 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 March 31, 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

 

35

Item 4. Controls and Procedures

 

36

Part II – Other Information

 

36

Item 1. Legal Proceedings

 

36

Item 1A. Risk Factors

 

36

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

 

37

Item 3. Defaults Upon Senior Securities

 

37

Item 4. Mine Safety Disclosures

 

37

Item 5. Other Information

 

37

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 Months Ended March 31, 2022 and 2021

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

Unaudited Condensed Consolidated Statements of Changes in Shareholders’ Equity for the Three Months Ended March 31, 2022 and 2021

Unaudited Condensed Consolidated Statements of Cash Flows for the Three Months Ended March 31, 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 March 31,

 

 

 

2022

 

 

2021

 

Paper revenue

 

$

66.2

 

 

$

74.8

 

Machine lease revenue

 

 

12.2

 

 

 

10.8

 

Other revenue

 

 

4.1

 

 

 

2.1

 

Net revenue

 

 

82.5

 

 

 

87.7

 

Cost of goods sold

 

 

57.9

 

 

 

51.4

 

Gross profit

 

 

24.6

 

 

 

36.3

 

Selling, general and administrative expenses

 

 

29.7

 

 

 

19.1

 

Depreciation and amortization expense

 

 

8.2

 

 

 

8.7

 

Other operating expense, net

 

 

0.5

 

 

 

0.8

 

Income (loss) from operations

 

 

(13.8

)

 

 

7.7

 

Interest expense

 

 

5.0

 

 

 

5.6

 

Foreign currency gain

 

 

(0.6

)

 

 

(3.6

)

Income (loss) before income tax benefit

 

 

(18.2

)

 

 

5.7

 

Income tax benefit

 

 

(4.1

)

 

 

(0.6

)

Net income (loss)

 

$

(14.1

)

 

$

6.3

 

 

 

 

 

 

 

 

Two-class method

 

 

 

 

 

 

Earnings (loss) per share

 

 

 

 

 

 

Basic

 

$

(0.17

)

 

$

0.09

 

Diluted

 

$

(0.17

)

 

$

0.08

 

Class A – earnings (loss) per share

 

 

 

 

 

 

Basic

 

$

(0.17

)

 

$

0.09

 

Diluted

 

$

(0.17

)

 

$

0.08

 

Class C – earnings (loss) per share

 

 

 

 

 

 

Basic

 

$

(0.17

)

 

$

0.08

 

Diluted

 

$

(0.17

)

 

$

0.08

 

 

 

 

 

 

 

 

Weighted average number of shares outstanding – Class A and C

 

 

 

 

 

 

Basic

 

 

81,573,467

 

 

 

73,559,340

 

Diluted

 

 

81,573,467

 

 

 

76,248,514

 

 

 

 

 

 

 

 

Other comprehensive income (loss), before tax

 

 

 

 

 

 

Foreign currency translation adjustments

 

$

(2.8

)

 

$

(8.4

)

Interest rate swap adjustments

 

 

8.1

 

 

 

2.6

 

Cross-currency swap adjustments

 

 

0.1

 

 

 

-

 

Total other comprehensive income (loss), before tax

 

 

5.4

 

 

 

(5.8

)

Provision for income taxes related to other comprehensive income (loss)

 

 

2.0

 

 

 

0.6

 

Total other comprehensive income (loss), net of tax

 

 

3.4

 

 

 

(6.4

)

Comprehensive loss, net of tax

 

$

(10.7

)

 

$

(0.1

)

 

See notes to unaudited condensed consolidated financial statements.

2


 

Ranpak Holdings Corp.

Unaudited Condensed Consolidated Balance Sheets

(in millions, except share data)

 

 

 

March 31, 2022

 

 

December 31, 2021

 

Assets

 

 

 

 

 

 

Current assets

 

 

 

 

 

 

Cash and cash equivalents

 

$

80.5

 

 

$

103.9

 

Accounts receivable, net

 

 

47.6

 

 

 

43.7

 

Inventories, net

 

 

41.2

 

 

 

32.9

 

Income tax receivable

 

 

6.0

 

 

 

2.7

 

Prepaid expenses and other current assets

 

 

11.7

 

 

 

8.3

 

Total current assets

 

 

187.0

 

 

 

191.5

 

 

 

 

 

 

 

 

Property, plant and equipment, net

 

 

123.1

 

 

 

126.3

 

Operating lease right-of-use assets, net

 

 

5.9

 

 

 

6.6

 

Goodwill

 

 

451.3

 

 

 

453.0

 

Intangible assets, net

 

 

398.6

 

 

 

406.5

 

Deferred tax assets

 

 

-

 

 

 

0.1

 

Other assets

 

 

34.4

 

 

 

29.4

 

Total assets

 

$

1,200.3

 

 

$

1,213.4

 

 

 

 

 

 

 

 

Liabilities and Shareholders' Equity

 

 

 

 

 

 

Current liabilities

 

 

 

 

 

 

Accounts payable

 

$

39.4

 

 

$

33.5

 

Accrued liabilities and other

 

 

23.0

 

 

 

31.5

 

Current portion of long-term debt

 

 

1.0

 

 

 

1.0

 

Operating lease liabilities, current

 

 

2.2

 

 

 

2.4

 

Deferred machine fee revenue

 

 

2.1

 

 

 

3.1

 

Total current liabilities

 

 

67.7

 

 

 

71.5

 

 

 

 

 

 

 

 

Long-term debt

 

 

398.1

 

 

 

400.4

 

Deferred tax liabilities

 

 

98.0

 

 

 

97.7

 

Derivative instruments

 

 

-

 

 

 

2.4

 

Operating lease liabilities, non-current

 

 

3.8

 

 

 

4.3

 

Other liabilities

 

 

1.3

 

 

 

0.9

 

Total liabilities

 

 

568.9

 

 

 

577.2

 

 

 

 

 

 

 

 

Commitments and contingencies – Note 13

 

 

 

 

 

 

Shareholders' equity

 

 

 

 

 

 

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

 

 

 

 

 

 

authorized at March 31, 2022 and December 31, 2021

 

 

 

 

 

 

Shares issued and outstanding: 79,006,238 and 78,482,024

 

 

 

 

 

 

at March 31, 2022 and December 31, 2021, respectively

 

 

-

 

 

 

-

 

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

 

 

 

 

 

 

authorized at March 31, 2022 and December 31, 2021

 

 

 

 

 

 

Shares issued and outstanding: 2,921,099

 

 

 

 

 

 

at March 31, 2022 and December 31, 2021

 

 

-

 

 

 

-

 

Additional paid-in capital

 

 

694.8

 

 

 

688.9

 

Accumulated deficit

 

 

(69.4

)

 

 

(55.3

)

Accumulated other comprehensive income

 

 

6.0

 

 

 

2.6

 

Total shareholders' equity

 

 

631.4

 

 

 

636.2

 

Total liabilities and shareholders' equity

 

$

1,200.3

 

 

$

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

 

 

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

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance at December 31, 2021

 

 

78,482,024

 

 

$

-

 

 

 

2,921,099

 

 

$

-

 

 

$

688.9

 

 

$

(55.3

)

 

$

2.6

 

 

$

636.2

 

Stock-based awards vested and distributed

 

 

521,719

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(2.9

)

 

 

-

 

 

 

-

 

 

 

(2.9

)

Issue Director shares

 

 

2,495

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

Amortization of restricted stock units

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

8.8

 

 

 

-

 

 

 

-

 

 

 

8.8

 

Net loss

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

(14.1

)

 

 

-

 

 

 

(14.1

)

Other comprehensive income

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

-

 

 

 

3.4

 

 

 

3.4

 

Balance at March 31, 2022

 

 

79,006,238

 

 

$

-

 

 

 

2,921,099

 

 

$

-

 

 

$

694.8

 

 

$

(69.4

)

 

$

6.0

 

 

$

631.4

 

 

See notes to unaudited condensed consolidated financial statements.

4


 

Ranpak Holdings Corp.

Unaudited Condensed Consolidated Statements of Cash Flows

(in millions)

 

 

 

Three Months Ended March 31,

 

 

 

2022

 

 

2021

 

Cash Flows from Operating Activities

 

 

 

 

 

 

Net income (loss)

 

$

(14.1

)

 

$

6.3

 

Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:

 

 

 

 

 

 

Depreciation and amortization

 

 

18.8

 

 

 

17.9

 

Amortization of deferred financing costs

 

 

0.4

 

 

 

0.4

 

Loss on disposal of fixed assets

 

 

-

 

 

 

0.2

 

Deferred income taxes

 

 

(1.4

)

 

 

(1.4

)

Amortization of initial value of interest rate swap

 

 

(0.2

)

 

 

(0.2

)

Currency gain on foreign denominated debt and notes payable

 

 

(0.2

)

 

 

(3.6

)

Amortization of restricted stock units

 

 

8.8

 

 

 

2.7

 

Changes in operating assets and liabilities:

 

 

 

 

 

 

(Increase) decrease in receivables, net

 

 

(4.8

)

 

 

(3.0

)

(Increase) decrease in inventory

 

 

(7.6

)

 

 

(5.5

)

(Increase) decrease in prepaid expenses and other assets

 

 

(1.2

)

 

 

0.1

 

Increase (decrease) in accounts payable

 

 

2.9

 

 

 

1.8

 

Increase (decrease) in accrued liabilities

 

 

(4.9

)

 

 

(0.3

)

Change in other assets and liabilities

 

 

(5.9

)

 

 

(2.9

)

Net cash provided by (used in) operating activities

 

 

(9.4

)

 

 

12.5

 

 

 

 

 

 

 

 

Cash Flows from Investing Activities

 

 

 

 

 

 

Capital expenditures:

 

 

 

 

 

 

Converter equipment

 

 

(8.4

)

 

 

(8.0

)

Other capital expenditures

 

 

(1.4

)

 

 

(2.9

)

Total capital expenditures

 

 

(9.8

)

 

 

(10.9

)

Patent and trademark expenditures

 

 

(0.9

)

 

 

(0.3

)

Net cash used in investing activities

 

 

(10.7

)

 

 

(11.2

)

 

 

 

 

 

 

 

Cash Flows from Financing Activities

 

 

 

 

 

 

Principal payments on term loans

 

 

(0.4

)

 

 

(0.4

)

Payments on finance lease liabilities

 

 

(0.2

)

 

 

(0.2

)

Exit Payment

 

 

-

 

 

 

(8.2

)

Tax payments for withholdings on stock-based awards distributed

 

 

(2.5

)

 

 

-

 

Net cash used in financing activities

 

 

(3.1

)

 

 

(8.8

)

 

 

 

 

 

 

 

Effect of Exchange Rate Changes on Cash

 

 

(0.2

)

 

 

(0.5

)

Net Decrease in Cash and Cash Equivalents

 

 

(23.4

)

 

 

(8.0

)

Cash and Cash Equivalents, beginning of period

 

 

103.9

 

 

 

48.5

 

Cash and Cash Equivalents, end of period

 

$

80.5

 

 

$

40.5

 

 

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 March 31, 2022 may be further referred to herein as the “first quarter of 2022.” The three months ended March 31, 2021 may be further referred to herein as the “first 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.

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 the first quarter of 2022.

Recently Issued Accounting Standards — As of March 31, 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. A money market fund 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 $55.0 million and $70.0 million at March 31, 2022 and December 31, 2021, respectively. The fair value of money market funds is considered Level 1 in

6


Ranpak Holdings Corp.

Notes to Unaudited Condensed Consolidated Financial Statements

(in millions, except share and per share data)

 

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). The balance will be used for general corporate purposes. Refer to Note 7, “Long-Term Debt” for further detail.

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

 

 

 

March 31, 2022

 

 

December 31, 2021

 

Accounts receivable

 

$

48.5

 

 

$

44.7

 

Allowance for doubtful accounts

 

 

(0.9

)

 

 

(1.0

)

Accounts receivable, net

 

$

47.6

 

 

$

43.7

 

 

At March 31, 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:

 

 

 

March 31, 2022

 

 

December 31, 2021

 

Raw materials

 

$

18.4

 

 

$

19.5

 

Work-in-process

 

 

10.8

 

 

 

1.2

 

Finished goods

 

 

12.3

 

 

 

12.5

 

Total inventories

 

 

41.5

 

 

 

33.2

 

Reserve for obsolescence

 

 

(0.3

)

 

 

(0.3

)

Inventories, net

 

$

41.2

 

 

$

32.9

 

 

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

 

 

 

March 31, 2022

 

 

December 31, 2021

 

Land

 

$

4.1

 

 

$

4.1