NYSE:PACK Ranpak Q3 2024 Earnings Report $4.14 +0.02 (+0.36%) Closing price 04/25/2025 03:59 PM EasternExtended Trading$4.16 +0.02 (+0.36%) As of 04/25/2025 04:34 PM Eastern Extended trading is trading that happens on electronic markets outside of regular trading hours. This is a fair market value extended hours price provided by Polygon.io. Learn more. Earnings HistoryForecast Ranpak EPS ResultsActual EPS-$0.10Consensus EPS -$0.04Beat/MissMissed by -$0.06One Year Ago EPS-$0.03Ranpak Revenue ResultsActual Revenue$92.20 millionExpected Revenue$90.76 millionBeat/MissBeat by +$1.44 millionYoY Revenue Growth+11.40%Ranpak Announcement DetailsQuarterQ3 2024Date10/31/2024TimeBefore Market OpensConference Call DateThursday, October 31, 2024Conference Call Time8:30AM ETUpcoming EarningsRanpak's Q1 2025 earnings is scheduled for Thursday, May 1, 2025, with a conference call scheduled at 8:30 AM ET. Check back for transcripts, audio, and key financial metrics as they become available.Q1 2025 Earnings ReportConference Call ResourcesConference Call AudioConference Call TranscriptSlide DeckPress Release (8-K)Quarterly Report (10-Q)Earnings HistoryCompany ProfileSlide DeckFull Screen Slide DeckPowered by Ranpak Q3 2024 Earnings Call TranscriptProvided by QuartrOctober 31, 2024 ShareLink copied to clipboard.There are 5 speakers on the call. Operator00:00:00The moving and new home builds. Industrial activity remains lower as well, which has impacted our cushioning business. Europe and Asia Pacific activity levels improved sequentially versus the Q2 and also versus the prior year as constant currency sales increased 7% year over year. Volumes increased in the quarter by more than 9%, but were offset somewhat by mix and lower pricing, which we began to lap in August. The European industrial sector remains sluggish as companies in Germany and Poland see lower order levels for capital and consumer goods. Operator00:00:46We expect the remainder of the year to be choppy in Europe as the mood among manufacturers in the region is subdued. On the optimistic side, many believe in the coming year there will be some improvement as the global rate hiking cycle reverses. Geographically speaking, we have seen strength in Brazil, the UK, South Africa and Czech Republic, while Poland and Germany were weaker. In Asia Pacific, Japan, South Korea and New Zealand were stronger, while Australia was behind this quarter. As expected, the import cost environment remained a slight tailwind in the quarter, but did not provide the uplift to margins seen earlier in the year. Operator00:01:30Throughout the quarter, pricing of the RISI and Ewes indices increased in the mid single digits, which will flow through to paper costs in upcoming quarters. In North America, tighter supply is the key driver, while in Europe, it is more a function of producers trying to offset inflationary pressures. In Europe, the demand environment is less robust, so there are pockets to gain an edge if you're able to commit to more volume. Fortunately, we are a stable buyer of paper in good times and in bad. So many vendors are keen to partner with us and provide more attractive pricing. Operator00:02:07Energy pricing in Europe continues to be an important topic and has experienced more volatility as tensions in the Middle East have reached a new level. While pricing has risen to €40 per megawatt hour recently, that is a car cry from the €300 level peak area we experienced in years past. Overall, from a storage perspective, the continent remains in a solid position at 95% capacity and close to the 5 year high going into the winter, but we are watching the market closely and working with our vendors to lock in pricing where possible to reduce exposure. The mix shift we saw in the Q2 towards higher void fill and lower cushioning persisted into the Q3, impacting our gross margins. We're actively addressing this by ensuring the team is focused on growing the pie and cushioning and wrapping and not letting the macro environment dictate our performance. Operator00:03:05Overall though, I would say we remain on track to be in the 37% to 38% gross margin target for the year. Inventory levels in the channel remained tight with distributors and end users seeking to limit capital tied up on the floor. As we enter the holiday season, we have seen a number of distributors getting caught short product and needing rapid fulfillment. Now with that, let me turn it over to Bill for some financial detail. Speaker 100:03:34Thank you, Omar. In the deck, you'll see a summary of some of our key performance indicators. We'll also be filing our Form 10 Q, which provides further information on Rambac's operating results. Machine placement increased 1.1% year over year to approximately 143,000 machines globally. Cushioning systems increased 0.3%, while void fill installed systems increased 1.3% and wrapping machines increased 1.8%. Speaker 100:03:57Growth in the machine field population continues to be lower this year due to a combination of lower activity levels related to industrial and manufacturing sectors as well as our efforts to optimize our fleet. Overall, net revenue for the company in the Q3 was up 10.5% year over year on a constant currency basis, driven by a 14.7% increase in volume, offset by lower price mix, which is largely a result of the strategic account activity in North America and greater contribution from Boydfill and EMEA and APAC. North American net revenue increased 15.5% year over year with Boydfill driving the outperformance, offset slightly by decreases in cushioning and wrapping. Volumes were up 26.1% versus prior year, driven by strength in e commerce related to plastic to paper switching. In Europe and APAC, net revenue on a constant currency basis increased 7.1% year over year, driven by 9% volume growth, offset partially by pricing get back and void fill mix headwinds. Speaker 100:04:54Automation also meaningfully contributed to the top line growth in the quarter in the region, up 40.7% year over year. While void fill and wrapping were up, the pressured industrial sector in Europe drove a slight decline in our cushioning business for the quarter. We were pleased to see sequential improvement in the region compared to the Q2, although we remain cautious given the economic environment that seems to be stagnating. Our gross profit increased 8.6% on a constant currency basis, implying a margin of 37.5% compared to 38.2% in the prior year. This is consistent with expectations as we expected gross margin to be roughly in line with Q4 of 2023 throughout the year, but was pressured somewhat from less cushioning contribution. Speaker 100:05:33Maintaining our gross margin profile is a critical area of focus for us, so we are committed to taking actions that seek to preserve it as we finish 2024 and go into 2025. Higher volumes and sales drove an adjusted EBITDA increase of 13.9 percent year over year to $20,500,000 implying a 21.6 percent margin. We are extremely focused on continuing to improve the overall financial profile of the business and generating cash. As we discussed in the Q2 call, earlier in the year, we invested in working capital to position ourselves well for the ramp in strategic account activity. We worked this inventory down somewhat in the Q3, which combined with the higher sales helped us improve our cash position by $4,500,000 from Q2. Speaker 100:06:14Capital expenditures for the quarter were $5,600,000 driven by converter placement and investments related to our Malaysia production facility. This is down from just under $10,000,000 per quarter for the first half of the year. For the remainder of the year, we expect capital expenditures to remain lower as many of our converter converted purchases were more heavily weighted in the front half of the year as well as our larger project spend, which is primarily related to our APAC production plant, which went live in August. Moving briefly to the balance sheet and liquidity. We completed Q3 with a strong liquidity position, including a $69,500,000 cash balance and no drawings on our revolving credit facility. Speaker 100:06:48We continue to make steady progress on our goal of deleveraging and reached 4 times net debt to adjusted EBITDA at the end of the quarter, down from 4.6x at 2023 year end and 5.7x as of Q2 2023. We expect to build more cash in the Q4 as we enter into the traditionally stronger holiday season and volumes improve, resulting in cash generation for the year. We continue to pursue our leverage target of getting to 3 turns or below. With that, I'll turn it back to Omar before we move on to questions. Operator00:07:16Thank you, Bill. In closing, I'm pleased with the continued steady improvement in the business and 5th quarter in a row of volume growth. Strategic account activity remains a bright spot and I'm pleased with our continued progress deepening relationships with these key accounts both in PPS and in automation. We believe RamPac is winning in the marketplace and our volumes reflect that. We are laser focused on driving volumes through the complex and winning more business, which enables us to drive further efficiencies. Operator00:07:48I firmly believe we are a differentiated player in this space and more large companies are recognizing that by partnering with Rambac. In PPS, you can see it in the volumes in North America. In automation, our sales were up meaningfully in the Q3 and our bookings momentum is taking that next leg up we've been looking for positioning us well for next year. We are executing really well on our key installs and addressing our customers with our ability to deliver projects on time and rapidly adapt to their needs. We've invested a tremendous amount in the customer experience and automation and I believe those are paying dividends as we have been able to navigate challenging last minute changes quickly and efficiently. Operator00:08:32These projects typically involve providers of all kinds of equipment and software support resulting in tremendous complexity as all of these pieces need to come together. Customer needs can change on a dime and you must be able to adapt quickly to solve their critical needs. Feedback recently from the most demanding players has been that Rambac has really set itself apart in these situations and has been able to keep tight timelines on track. I'm really proud of the team and the effort that has gone into making our customers happy as that sets the foundation for growing our business. As I think about how we are positioned going into the end of the year and into 2025, I continue to believe we are well positioned to drive positive outcomes for the business and for shareholders. Operator00:09:18We are forging deep relationships with the most discerning players in the business and they are recognizing the value proposition and differentiation we bring to the table. The sustainability momentum in North America remains strong and keeps gaining speed. I believe plastic is on its back foot and we are well positioned to take advantage of it through our wide array of best in class paper offerings paired with second to none data and analytics. In Europe, we've made some additions to the sales effort that will help us renew our focus on the sales process and help drive outstanding outcomes. Asia Pacific continues to show solid growth. Operator00:10:00I'm pleased to report our Malaysia plant went live in August and is serving limited SKUs this year prior to fully ramping up capabilities in 2025. This plan provides us with a lower cost home base to serve the region, enabling us to drive growth and putting us on the path to scale in Asia Pacific. Volume growth, profitability and cash generation remain the key areas of focus for us. This combination will drive the deleveraging we are focused on. With Malaysia going live, that marks the end of our major investment cycle and completion of our fully invested platform. Operator00:10:39As an organization, we are focused on getting paid back on these investments. I'm thrilled with the progress we have made over the past few years and I'm excited to take the next step in the execution phase of the vision for Rambac. I believe we are building something special here at Rambac. With that, let's open the call up for some questions. Operator? Speaker 200:11:03Thank And your first question comes from the line of Ghansham Panjabi of Baird. Please go ahead. Speaker 300:11:39Thank you, operator. Good morning, everybody. Omar, your prepared comments were cut off, so I apologize if you covered this. But sales were up, let's say, dollars 6,000,000 sequentially 3Q versus 2Q. And then EBITDA was up a little bit, but not as much as I would have expected from an operating leverage standpoint. Speaker 300:11:59Can you just give us more color as to why that is? I know price mix was negative year over year, but I'm just more curious on the margin profile of the new businesses driving your volumes. Operator00:12:10Yes. I think, Ghansham, a couple of things. Number 1, obviously, as you said, mix is part of it because a lot of our growth has been more in the void fill area than in some of our other areas like Cushing and Wrapping. The other point other than mix is honestly a lot of the strategic account activity started towards the latter part of Q2. And in Q3, we continued to sort of ramp up both production ramp up, continued installation, etcetera. Operator00:12:43And now we feel by Q4, we should see a lot of sort of the benefit of that more installed base and a business that is fully ramped up in some of these accounts. So part of it is just the cycle of continuing to evolve and grow and ramp up the business with some of these accounts that also has driven things where you may not be as efficient as you want to be as you're scaling with some of these large accounts. So I think these two factors were part of it. Now of course, these large accounts are pretty discerning, Ghansham, in terms of margin profile. But we're very confident that overall as we continue to win more and more of their business, it will be driving profitability and driving EBITDA margin down the road. Speaker 300:13:29Okay. That's very helpful. And then just two more questions. So the 26% volume growth in North America, how much of that was due to the load in effect of new business that you may have picked up? And then the last question I have maybe for Bill is just the debt coming due in 2026 strategy to deal with that and also more color on the $5,400,000 sale of the patents. Speaker 300:13:52What does that relate to? Operator00:13:55Yes. Let me start first just with the growth in North America. Customers are not loading up. There are very limited number of people maybe that were buying just in anticipation of the ramp up. As we speak today, Ghansham, I would actually characterize inventory levels and paper levels at both distributors and end users as pretty light. Operator00:14:19And frankly, just witnessing some of that in Q4 right now as we speak, where we have a number of accounts that are scrambling to sort of fulfill their needs and asking us to fulfill it quickly. So I wouldn't look at that top line growth in North America as people loading up. I think a lot of it is paper that is being consumed just given the scale of some of these large accounts that we've won and basically what you're hearing about with the plastic to paper switch. Bill? And Speaker 300:14:53then on the debt, yes. Speaker 100:14:55Yes. So Ghansham, just on the refi, that's something that's been a key priority for the organization. We've talked about that a lot. For us, it was critical for us over the past number of quarters to put some points on the board, right, get the momentum in the operating part of the business, right, to go in the direction that we wanted to, so we could go and access the credit markets with our best foot forward. So I think over the number the past 5 quarters, I think we've done that, right. Speaker 100:15:19So we've improved volumes 5 quarters in a row. We've grown our adjusted EBITDA from a low up to $85,500,000 now. Got our leverage ratio down from 5.7x at the peak to 4. We have great strategic account momentum with tangible wins impacting volume and performance. And I think the clear evidence of the plastic to paper shift in North America is taking place. Speaker 100:15:40That on top of the automation momentum that we have, I think puts us in a much better position to start going and access the credit markets now, right? So that's something that just stay tuned on and we'll keep you updated. Speaker 300:15:54And then on the patent sale? Speaker 100:15:58Yes, Ghansham, the patent sale, that was something that took place in Q2, right, at the same time the settlement of the litigation with the competitor. So if you recall, we've got about $20,000,000 in proceeds from a combination of the litigation settlement and patent sale. Those are patents that we just weren't using. Speaker 300:16:16Okay, got you. Okay, thanks so much guys. Operator00:16:18Sure. Thanks, Ghansham. Speaker 200:16:21And your next question comes from the line of Greg Palm. Your line is now open. Speaker 400:16:28Hey, good morning. Thanks for taking the questions. Just kind of maybe looking back to the last few months, Omar, anything that surprised you in the quarter, either better or worse and specifically would like to get just some commentary on kind of the ramp up of maybe additional strategic accounts outside of kind of the one that you highlighted last quarter? Operator00:16:55Yes. Good morning, Greg. I would say, look, we've been working for almost as you guys know, liquidity for 18 months plus on landing some of these big accounts. It takes a lot of time to land these guys. It takes a long trial period. Operator00:17:11There are tremendous departments and operational and procurement people and so on involved from these accounts to decide on vendors. So I would say in the last few months, I'm probably pleasantly surprised with the volume, Greg. I would say the size of some of these accounts as we started fulfilling them, the needs, the frequency with which they need more and more product has been a pleasant surprise. And part of our organization has been trying to do what we can to meet some of that ramp up in demand. And this is why I feel pretty good that as we settle in and have a better understanding of their volume needs, which are bigger than our expectations, I think we can start fulfilling a bit more efficiently to some of these accounts and translate more of that volume down to the bottom line. Operator00:18:02So on the large accounts, I'm really quite pleased with the volumes that we've seen. And I continue to sort of have pretty high expectations for what we're going to see from some of these accounts as we talk to them and work with them on forecasting into 2025. So that piece I think has been pretty pleasant, Greg. Speaker 400:18:20Got it. Okay. And is the expectation that there are still additional ones ramping up in Q4? I asked sort of in light of, a, the commentary on kind of the ones that you've been ramping, but also in light of kind of that full year guidance that you put out there toward at the beginning of the year. So what any sort of update on that or thoughts as it relates to Q4 specifically? Operator00:18:46We continue to feel very confident in our guidance. So we feel very good about that. I would say we've done a number of ramp ups in the last few months. The large guys, we started the quarter with them fully ramped. As you know, in our business, people really do not want to do dramatic changes in Q4, which is peak season. Operator00:19:07There is maybe an account or 2 where we were ramping up still in October, but by now pretty much we're fully ramped on the key guys that we can service in 2024 and the focus is just to fulfill their needs in peak season. And then we will revisit some accounts in early 2025 that hopefully we can scale further with. Our pipeline and our trial activity and our activity around large accounts, in particular in North America, looks as robust as I've seen it in the last number of years. And we think that will continue to help us in 2025. But to your question in particular, by now the focus is not ramping up. Operator00:19:48By now the focus is more serving these accounts in peak season. Speaker 400:19:54Understood. Okay. And then last one for me on automation, it sounds like another good quarter, both I guess in terms of bookings and revenue. But in terms of the ramp up in Q4 and more beyond, kind of just give us a little bit of update on kind of what you're seeing. And I'd be curious as having sort of a combination of automation PPS, is that helping you win customers on the new side as well? Speaker 400:20:25Can you give Speaker 200:20:25us a little bit of sense on Speaker 400:20:26kind of what you're seeing in terms of account activity? Operator00:20:30Sure. Let me start with that last one. With large accounts, having automation, having PPS, having also our digital footprint, our vision system, some of our machine learning capabilities, these things are super important to winning these accounts and we are seeing more and more fully integrated solutions that we're bringing to some of these customers. And honestly, Greg, that is how you become relevant to big enterprises. When you come up with these holistic solutions that's helping them with data, with vision, with paper consumable, with automation equipment that's making them more efficient, faster, rely less on labor in certain tasks. Operator00:21:11And we are doing that at a terrific pace and getting very, very good feedback. So that second piece of your question is really critical and it's probably the piece that gets us excited the most with what we're seeing in the business. To give you just some idea where are we with automation, our bookings year to date are up 60% year over year. We continue to be very confident in hitting our number of growth for total revenue of approximately $30,000,000 for the year. We had a very good Q3. Operator00:21:43In Q4, we're expecting record bookings, so the highest quarter we've ever had. Our visibility and backlog for 2025 is the highest it's been. My expectation is the growth that we are going to deliver in 2024 as a percentage, whether you want to call it 40%, 50% plus growth that we will repeat that in 2025. I see that with high confidence given the backlog that we have. And the other thing that's really important to note, a lot of our wins, Greg, are with large customers. Operator00:22:16So a big part of these wins and the backlog that we have is now existing customers that we started servicing this year that will be repeat customers in 2025 for existing distribution centers, for new distribution centers, for next generation centers that they're building. So the confidence in our backlog is really good and we're starting to hit our strides in automation and I expect you'll see a lot of those numbers in 2025. Does that give you a sense? Speaker 400:22:49Yes, that's great. All right, I will leave it there. Best of luck. Thanks. Operator00:22:54Thanks. Speaker 200:22:57And that concludes our Q and A session. I will now turn the conference back over to Bill for closing remarks. Speaker 100:23:05Thank you, Kathleen, and thank you all for joining us today. We're looking forward to catching up to give you Q4 update as well as our outlook for 2025. Thank you. Speaker 200:23:15That concludes our session. Thank you all for joining. You may now disconnect.Read morePowered by Conference Call Audio Live Call not available Earnings Conference CallRanpak Q3 202400:00 / 00:00Speed:1x1.25x1.5x2x Earnings DocumentsSlide DeckPress Release(8-K)Quarterly report(10-Q) Ranpak Earnings HeadlinesRanpak (PACK) to Release Earnings on ThursdayApril 24 at 2:51 AM | americanbankingnews.comCEO Confidence Drops As Economic Uncertainty LoomsApril 23 at 1:24 PM | forbes.comTrump’s tariffs just split the AI market in twoTrump’s tariff just split the AI market – among others – in two. One group of AI companies—the ones relying on cheap foreign hardware—just saw their costs shoot through the roof. For the other group of AI companies, they were just handed a massive competitive advantage. Make no mistake, AI as a whole is still a game-changer for the global economy. But within the AI sector, Trump’s tariffs have created a huge divergence.April 26, 2025 | Traders Agency (Ad)Ranpak (PACK) Introduces AI-Powered Packaging Innovations to Reduce WasteMarch 17, 2025 | insidermonkey.comRanpak Unveils New AI and Automation Solutions at ProMat 2025March 12, 2025 | finance.yahoo.comRanpak Holdings Corp. (NYSE:PACK) Released Earnings Last Week And Analysts Lifted Their Price Target To US$11.17March 11, 2025 | finance.yahoo.comSee More Ranpak Headlines Get Earnings Announcements in your inboxWant to stay updated on the latest earnings announcements and upcoming reports for companies like Ranpak? Sign up for Earnings360's daily newsletter to receive timely earnings updates on Ranpak and other key companies, straight to your email. Email Address About RanpakRanpak (NYSE:PACK), together with its subsidiaries, provides product protection solutions and end-of-line automation solutions for e-commerce and industrial supply chains in North America, Europe, and Asia. The company offers protective packaging solutions, such as void-fill protective systems that convert paper to fill empty spaces in secondary packages and protect objects under the FillPak brand; cushioning protective systems, which convert paper into cushioning pads under the PadPak brand; and wrapping protective systems that create pads or paper mesh to wrap and protect fragile items, as well as to line boxes and provide separation when shipping various objects under the WrapPak, Geami, and ReadyRoll brands, as well as cold chain products, which are used to provide insulation for goods. It also offers end-of-line packaging automation products, which help end users automate the void filling and box closure processes after product packing is complete. The company sells its products to end users primarily through a distributor network, and directly to select end-users. Ranpak Holdings Corp. was founded in 1972 and is headquartered in Concord Township, Ohio.View Ranpak ProfileRead more More Earnings Resources from MarketBeat Earnings Tools Today's Earnings Tomorrow's Earnings Next Week's Earnings Upcoming Earnings Calls Earnings Newsletter Earnings Call Transcripts Earnings Beats & Misses Corporate Guidance Earnings Screener Earnings By Country U.S. Earnings Reports Canadian Earnings Reports U.K. Earnings Reports Latest Articles Markets Think Robinhood Earnings Could Send the Stock UpIs the Floor in for Lam Research After Bullish Earnings?Market Anticipation Builds: Joby Stock Climbs Ahead of EarningsIs Intuitive Surgical a Buy After Volatile Reaction to Earnings?Seismic Shift at Intel: Massive Layoffs Precede Crucial EarningsRocket Lab Lands New Contract, Builds Momentum Ahead of EarningsAmazon's Earnings Could Fuel a Rapid Breakout Upcoming Earnings Cadence Design Systems (4/28/2025)Welltower (4/28/2025)Waste Management (4/28/2025)AstraZeneca (4/29/2025)Mondelez International (4/29/2025)PayPal (4/29/2025)Starbucks (4/29/2025)DoorDash (4/29/2025)Honeywell International (4/29/2025)Regeneron Pharmaceuticals (4/29/2025) Get 30 Days of MarketBeat All Access for Free Sign up for MarketBeat All Access to gain access to MarketBeat's full suite of research tools. 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There are 5 speakers on the call. Operator00:00:00The moving and new home builds. Industrial activity remains lower as well, which has impacted our cushioning business. Europe and Asia Pacific activity levels improved sequentially versus the Q2 and also versus the prior year as constant currency sales increased 7% year over year. Volumes increased in the quarter by more than 9%, but were offset somewhat by mix and lower pricing, which we began to lap in August. The European industrial sector remains sluggish as companies in Germany and Poland see lower order levels for capital and consumer goods. Operator00:00:46We expect the remainder of the year to be choppy in Europe as the mood among manufacturers in the region is subdued. On the optimistic side, many believe in the coming year there will be some improvement as the global rate hiking cycle reverses. Geographically speaking, we have seen strength in Brazil, the UK, South Africa and Czech Republic, while Poland and Germany were weaker. In Asia Pacific, Japan, South Korea and New Zealand were stronger, while Australia was behind this quarter. As expected, the import cost environment remained a slight tailwind in the quarter, but did not provide the uplift to margins seen earlier in the year. Operator00:01:30Throughout the quarter, pricing of the RISI and Ewes indices increased in the mid single digits, which will flow through to paper costs in upcoming quarters. In North America, tighter supply is the key driver, while in Europe, it is more a function of producers trying to offset inflationary pressures. In Europe, the demand environment is less robust, so there are pockets to gain an edge if you're able to commit to more volume. Fortunately, we are a stable buyer of paper in good times and in bad. So many vendors are keen to partner with us and provide more attractive pricing. Operator00:02:07Energy pricing in Europe continues to be an important topic and has experienced more volatility as tensions in the Middle East have reached a new level. While pricing has risen to €40 per megawatt hour recently, that is a car cry from the €300 level peak area we experienced in years past. Overall, from a storage perspective, the continent remains in a solid position at 95% capacity and close to the 5 year high going into the winter, but we are watching the market closely and working with our vendors to lock in pricing where possible to reduce exposure. The mix shift we saw in the Q2 towards higher void fill and lower cushioning persisted into the Q3, impacting our gross margins. We're actively addressing this by ensuring the team is focused on growing the pie and cushioning and wrapping and not letting the macro environment dictate our performance. Operator00:03:05Overall though, I would say we remain on track to be in the 37% to 38% gross margin target for the year. Inventory levels in the channel remained tight with distributors and end users seeking to limit capital tied up on the floor. As we enter the holiday season, we have seen a number of distributors getting caught short product and needing rapid fulfillment. Now with that, let me turn it over to Bill for some financial detail. Speaker 100:03:34Thank you, Omar. In the deck, you'll see a summary of some of our key performance indicators. We'll also be filing our Form 10 Q, which provides further information on Rambac's operating results. Machine placement increased 1.1% year over year to approximately 143,000 machines globally. Cushioning systems increased 0.3%, while void fill installed systems increased 1.3% and wrapping machines increased 1.8%. Speaker 100:03:57Growth in the machine field population continues to be lower this year due to a combination of lower activity levels related to industrial and manufacturing sectors as well as our efforts to optimize our fleet. Overall, net revenue for the company in the Q3 was up 10.5% year over year on a constant currency basis, driven by a 14.7% increase in volume, offset by lower price mix, which is largely a result of the strategic account activity in North America and greater contribution from Boydfill and EMEA and APAC. North American net revenue increased 15.5% year over year with Boydfill driving the outperformance, offset slightly by decreases in cushioning and wrapping. Volumes were up 26.1% versus prior year, driven by strength in e commerce related to plastic to paper switching. In Europe and APAC, net revenue on a constant currency basis increased 7.1% year over year, driven by 9% volume growth, offset partially by pricing get back and void fill mix headwinds. Speaker 100:04:54Automation also meaningfully contributed to the top line growth in the quarter in the region, up 40.7% year over year. While void fill and wrapping were up, the pressured industrial sector in Europe drove a slight decline in our cushioning business for the quarter. We were pleased to see sequential improvement in the region compared to the Q2, although we remain cautious given the economic environment that seems to be stagnating. Our gross profit increased 8.6% on a constant currency basis, implying a margin of 37.5% compared to 38.2% in the prior year. This is consistent with expectations as we expected gross margin to be roughly in line with Q4 of 2023 throughout the year, but was pressured somewhat from less cushioning contribution. Speaker 100:05:33Maintaining our gross margin profile is a critical area of focus for us, so we are committed to taking actions that seek to preserve it as we finish 2024 and go into 2025. Higher volumes and sales drove an adjusted EBITDA increase of 13.9 percent year over year to $20,500,000 implying a 21.6 percent margin. We are extremely focused on continuing to improve the overall financial profile of the business and generating cash. As we discussed in the Q2 call, earlier in the year, we invested in working capital to position ourselves well for the ramp in strategic account activity. We worked this inventory down somewhat in the Q3, which combined with the higher sales helped us improve our cash position by $4,500,000 from Q2. Speaker 100:06:14Capital expenditures for the quarter were $5,600,000 driven by converter placement and investments related to our Malaysia production facility. This is down from just under $10,000,000 per quarter for the first half of the year. For the remainder of the year, we expect capital expenditures to remain lower as many of our converter converted purchases were more heavily weighted in the front half of the year as well as our larger project spend, which is primarily related to our APAC production plant, which went live in August. Moving briefly to the balance sheet and liquidity. We completed Q3 with a strong liquidity position, including a $69,500,000 cash balance and no drawings on our revolving credit facility. Speaker 100:06:48We continue to make steady progress on our goal of deleveraging and reached 4 times net debt to adjusted EBITDA at the end of the quarter, down from 4.6x at 2023 year end and 5.7x as of Q2 2023. We expect to build more cash in the Q4 as we enter into the traditionally stronger holiday season and volumes improve, resulting in cash generation for the year. We continue to pursue our leverage target of getting to 3 turns or below. With that, I'll turn it back to Omar before we move on to questions. Operator00:07:16Thank you, Bill. In closing, I'm pleased with the continued steady improvement in the business and 5th quarter in a row of volume growth. Strategic account activity remains a bright spot and I'm pleased with our continued progress deepening relationships with these key accounts both in PPS and in automation. We believe RamPac is winning in the marketplace and our volumes reflect that. We are laser focused on driving volumes through the complex and winning more business, which enables us to drive further efficiencies. Operator00:07:48I firmly believe we are a differentiated player in this space and more large companies are recognizing that by partnering with Rambac. In PPS, you can see it in the volumes in North America. In automation, our sales were up meaningfully in the Q3 and our bookings momentum is taking that next leg up we've been looking for positioning us well for next year. We are executing really well on our key installs and addressing our customers with our ability to deliver projects on time and rapidly adapt to their needs. We've invested a tremendous amount in the customer experience and automation and I believe those are paying dividends as we have been able to navigate challenging last minute changes quickly and efficiently. Operator00:08:32These projects typically involve providers of all kinds of equipment and software support resulting in tremendous complexity as all of these pieces need to come together. Customer needs can change on a dime and you must be able to adapt quickly to solve their critical needs. Feedback recently from the most demanding players has been that Rambac has really set itself apart in these situations and has been able to keep tight timelines on track. I'm really proud of the team and the effort that has gone into making our customers happy as that sets the foundation for growing our business. As I think about how we are positioned going into the end of the year and into 2025, I continue to believe we are well positioned to drive positive outcomes for the business and for shareholders. Operator00:09:18We are forging deep relationships with the most discerning players in the business and they are recognizing the value proposition and differentiation we bring to the table. The sustainability momentum in North America remains strong and keeps gaining speed. I believe plastic is on its back foot and we are well positioned to take advantage of it through our wide array of best in class paper offerings paired with second to none data and analytics. In Europe, we've made some additions to the sales effort that will help us renew our focus on the sales process and help drive outstanding outcomes. Asia Pacific continues to show solid growth. Operator00:10:00I'm pleased to report our Malaysia plant went live in August and is serving limited SKUs this year prior to fully ramping up capabilities in 2025. This plan provides us with a lower cost home base to serve the region, enabling us to drive growth and putting us on the path to scale in Asia Pacific. Volume growth, profitability and cash generation remain the key areas of focus for us. This combination will drive the deleveraging we are focused on. With Malaysia going live, that marks the end of our major investment cycle and completion of our fully invested platform. Operator00:10:39As an organization, we are focused on getting paid back on these investments. I'm thrilled with the progress we have made over the past few years and I'm excited to take the next step in the execution phase of the vision for Rambac. I believe we are building something special here at Rambac. With that, let's open the call up for some questions. Operator? Speaker 200:11:03Thank And your first question comes from the line of Ghansham Panjabi of Baird. Please go ahead. Speaker 300:11:39Thank you, operator. Good morning, everybody. Omar, your prepared comments were cut off, so I apologize if you covered this. But sales were up, let's say, dollars 6,000,000 sequentially 3Q versus 2Q. And then EBITDA was up a little bit, but not as much as I would have expected from an operating leverage standpoint. Speaker 300:11:59Can you just give us more color as to why that is? I know price mix was negative year over year, but I'm just more curious on the margin profile of the new businesses driving your volumes. Operator00:12:10Yes. I think, Ghansham, a couple of things. Number 1, obviously, as you said, mix is part of it because a lot of our growth has been more in the void fill area than in some of our other areas like Cushing and Wrapping. The other point other than mix is honestly a lot of the strategic account activity started towards the latter part of Q2. And in Q3, we continued to sort of ramp up both production ramp up, continued installation, etcetera. Operator00:12:43And now we feel by Q4, we should see a lot of sort of the benefit of that more installed base and a business that is fully ramped up in some of these accounts. So part of it is just the cycle of continuing to evolve and grow and ramp up the business with some of these accounts that also has driven things where you may not be as efficient as you want to be as you're scaling with some of these large accounts. So I think these two factors were part of it. Now of course, these large accounts are pretty discerning, Ghansham, in terms of margin profile. But we're very confident that overall as we continue to win more and more of their business, it will be driving profitability and driving EBITDA margin down the road. Speaker 300:13:29Okay. That's very helpful. And then just two more questions. So the 26% volume growth in North America, how much of that was due to the load in effect of new business that you may have picked up? And then the last question I have maybe for Bill is just the debt coming due in 2026 strategy to deal with that and also more color on the $5,400,000 sale of the patents. Speaker 300:13:52What does that relate to? Operator00:13:55Yes. Let me start first just with the growth in North America. Customers are not loading up. There are very limited number of people maybe that were buying just in anticipation of the ramp up. As we speak today, Ghansham, I would actually characterize inventory levels and paper levels at both distributors and end users as pretty light. Operator00:14:19And frankly, just witnessing some of that in Q4 right now as we speak, where we have a number of accounts that are scrambling to sort of fulfill their needs and asking us to fulfill it quickly. So I wouldn't look at that top line growth in North America as people loading up. I think a lot of it is paper that is being consumed just given the scale of some of these large accounts that we've won and basically what you're hearing about with the plastic to paper switch. Bill? And Speaker 300:14:53then on the debt, yes. Speaker 100:14:55Yes. So Ghansham, just on the refi, that's something that's been a key priority for the organization. We've talked about that a lot. For us, it was critical for us over the past number of quarters to put some points on the board, right, get the momentum in the operating part of the business, right, to go in the direction that we wanted to, so we could go and access the credit markets with our best foot forward. So I think over the number the past 5 quarters, I think we've done that, right. Speaker 100:15:19So we've improved volumes 5 quarters in a row. We've grown our adjusted EBITDA from a low up to $85,500,000 now. Got our leverage ratio down from 5.7x at the peak to 4. We have great strategic account momentum with tangible wins impacting volume and performance. And I think the clear evidence of the plastic to paper shift in North America is taking place. Speaker 100:15:40That on top of the automation momentum that we have, I think puts us in a much better position to start going and access the credit markets now, right? So that's something that just stay tuned on and we'll keep you updated. Speaker 300:15:54And then on the patent sale? Speaker 100:15:58Yes, Ghansham, the patent sale, that was something that took place in Q2, right, at the same time the settlement of the litigation with the competitor. So if you recall, we've got about $20,000,000 in proceeds from a combination of the litigation settlement and patent sale. Those are patents that we just weren't using. Speaker 300:16:16Okay, got you. Okay, thanks so much guys. Operator00:16:18Sure. Thanks, Ghansham. Speaker 200:16:21And your next question comes from the line of Greg Palm. Your line is now open. Speaker 400:16:28Hey, good morning. Thanks for taking the questions. Just kind of maybe looking back to the last few months, Omar, anything that surprised you in the quarter, either better or worse and specifically would like to get just some commentary on kind of the ramp up of maybe additional strategic accounts outside of kind of the one that you highlighted last quarter? Operator00:16:55Yes. Good morning, Greg. I would say, look, we've been working for almost as you guys know, liquidity for 18 months plus on landing some of these big accounts. It takes a lot of time to land these guys. It takes a long trial period. Operator00:17:11There are tremendous departments and operational and procurement people and so on involved from these accounts to decide on vendors. So I would say in the last few months, I'm probably pleasantly surprised with the volume, Greg. I would say the size of some of these accounts as we started fulfilling them, the needs, the frequency with which they need more and more product has been a pleasant surprise. And part of our organization has been trying to do what we can to meet some of that ramp up in demand. And this is why I feel pretty good that as we settle in and have a better understanding of their volume needs, which are bigger than our expectations, I think we can start fulfilling a bit more efficiently to some of these accounts and translate more of that volume down to the bottom line. Operator00:18:02So on the large accounts, I'm really quite pleased with the volumes that we've seen. And I continue to sort of have pretty high expectations for what we're going to see from some of these accounts as we talk to them and work with them on forecasting into 2025. So that piece I think has been pretty pleasant, Greg. Speaker 400:18:20Got it. Okay. And is the expectation that there are still additional ones ramping up in Q4? I asked sort of in light of, a, the commentary on kind of the ones that you've been ramping, but also in light of kind of that full year guidance that you put out there toward at the beginning of the year. So what any sort of update on that or thoughts as it relates to Q4 specifically? Operator00:18:46We continue to feel very confident in our guidance. So we feel very good about that. I would say we've done a number of ramp ups in the last few months. The large guys, we started the quarter with them fully ramped. As you know, in our business, people really do not want to do dramatic changes in Q4, which is peak season. Operator00:19:07There is maybe an account or 2 where we were ramping up still in October, but by now pretty much we're fully ramped on the key guys that we can service in 2024 and the focus is just to fulfill their needs in peak season. And then we will revisit some accounts in early 2025 that hopefully we can scale further with. Our pipeline and our trial activity and our activity around large accounts, in particular in North America, looks as robust as I've seen it in the last number of years. And we think that will continue to help us in 2025. But to your question in particular, by now the focus is not ramping up. Operator00:19:48By now the focus is more serving these accounts in peak season. Speaker 400:19:54Understood. Okay. And then last one for me on automation, it sounds like another good quarter, both I guess in terms of bookings and revenue. But in terms of the ramp up in Q4 and more beyond, kind of just give us a little bit of update on kind of what you're seeing. And I'd be curious as having sort of a combination of automation PPS, is that helping you win customers on the new side as well? Speaker 400:20:25Can you give Speaker 200:20:25us a little bit of sense on Speaker 400:20:26kind of what you're seeing in terms of account activity? Operator00:20:30Sure. Let me start with that last one. With large accounts, having automation, having PPS, having also our digital footprint, our vision system, some of our machine learning capabilities, these things are super important to winning these accounts and we are seeing more and more fully integrated solutions that we're bringing to some of these customers. And honestly, Greg, that is how you become relevant to big enterprises. When you come up with these holistic solutions that's helping them with data, with vision, with paper consumable, with automation equipment that's making them more efficient, faster, rely less on labor in certain tasks. Operator00:21:11And we are doing that at a terrific pace and getting very, very good feedback. So that second piece of your question is really critical and it's probably the piece that gets us excited the most with what we're seeing in the business. To give you just some idea where are we with automation, our bookings year to date are up 60% year over year. We continue to be very confident in hitting our number of growth for total revenue of approximately $30,000,000 for the year. We had a very good Q3. Operator00:21:43In Q4, we're expecting record bookings, so the highest quarter we've ever had. Our visibility and backlog for 2025 is the highest it's been. My expectation is the growth that we are going to deliver in 2024 as a percentage, whether you want to call it 40%, 50% plus growth that we will repeat that in 2025. I see that with high confidence given the backlog that we have. And the other thing that's really important to note, a lot of our wins, Greg, are with large customers. Operator00:22:16So a big part of these wins and the backlog that we have is now existing customers that we started servicing this year that will be repeat customers in 2025 for existing distribution centers, for new distribution centers, for next generation centers that they're building. So the confidence in our backlog is really good and we're starting to hit our strides in automation and I expect you'll see a lot of those numbers in 2025. Does that give you a sense? Speaker 400:22:49Yes, that's great. All right, I will leave it there. Best of luck. Thanks. Operator00:22:54Thanks. Speaker 200:22:57And that concludes our Q and A session. I will now turn the conference back over to Bill for closing remarks. Speaker 100:23:05Thank you, Kathleen, and thank you all for joining us today. We're looking forward to catching up to give you Q4 update as well as our outlook for 2025. Thank you. Speaker 200:23:15That concludes our session. Thank you all for joining. 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