Ranpak (PACK) - 2025 Q1 - Quarterly Report

Financial Performance - Net revenue for Q1 2025 was $91.2 million, an increase of 6.9% from$ 85.3 million in Q1 2024[149] - Cost of sales rose to $60.3 million in Q1 2025, up 13.8% from$ 53.0 million in Q1 2024[149] - Gross profit decreased to $30.9 million, down 4.3% from$ 32.3 million in Q1 2024[149] - Loss from operations increased to $8.0 million in Q1 2025, a 66.7% decline compared to a loss of$ 4.8 million in Q1 2024[149] - Net loss for Q1 2025 was $10.9 million, representing a 34.6% increase from a net loss of$ 8.1 million in Q1 2024[149] - EBITDA for Q1 2025 was $9.7 million, down 37.0% from$ 15.4 million in Q1 2024[149] - AEBITDA for Q1 2025 was $17.3 million, a decrease of 9.9% from$ 19.2 million in Q1 2024[149] Revenue Breakdown - Approximately 37% of net revenue in 2024 was generated from e-commerce sectors, indicating a seasonal trend[139] - Cushioning revenue decreased by $7.2 million or 19.3% to$ 30.1 million, while void-fill revenue increased by $11.0 million or 33.2% to$ 44.1 million[150] - North America net revenue increased by $10.7 million or 33.5% to$ 42.6 million, driven by a 66.2% increase in void-fill sales[160] - Europe/Asia net revenue decreased by $4.8 million or 9.0% to$ 48.6 million, primarily due to a 17.7% decrease in cushioning sales[161] Expenses and Costs - SG&A expenses rose to $28.9 million, an increase of$ 1.0 million or 3.6% from $27.9 million in Q1 2024, primarily due to higher stock-based compensation and IT maintenance costs[153] - Interest expense increased by$ 2.5 million or 40.3% to $8.7 million, primarily due to a decrease in interest income from swap agreements[156] - M&A, restructuring, and severance costs increased by 222.2% to$ 2.9 million in Q1 2025 from $0.9 million in Q1 2024[166] Cash Flow and Debt - Cash and cash equivalents as of March 31, 2025, were$ 65.5 million, down from $76.1 million at the beginning of the period[168] - Net cash used in operating activities was$ 1.3 million in Q1 2025, compared to cash provided of $5.2 million in Q1 2024[177] - Total debt as of March 31, 2025, was$ 414.3 million, slightly down from $415.7 million as of December 31, 2024[170] - Net cash used in investing activities was$ 7.5 million in Q1 2025, an improvement from $10.3 million in Q1 2024[178] - The company had no borrowings under its$ 50.0 million revolving credit facility as of March 31, 2025[170] Tax and Future Outlook - Income tax benefit for Q1 2025 was $3.2 million, with an effective tax rate of 22.6%, compared to$ 1.5 million and 15.8% in Q1 2024[158] - The company expects capital expenditures to increase as it continues to grow and expand its manufacturing footprint[169] - The interest rate for the Term Facility was 8.85% as of March 31, 2025[171] Market Challenges - Inflationary pressures have adversely impacted end-users, leading to challenges in net revenue growth[137] - The company is evaluating alternative suppliers to mitigate the impact of tariffs on capital expenditures[138]