Primo Water has reported financial results for the second quarter ended June 30, 2018. The company reported net sales increased to $75.8 million from $74.8 million for the prior year quarter, driven by growth in Refill and Exchange, which was partially offset by an expected decrease in Dispensers due to the timing of shipments. U.S. GAAP net income was $0.5 million, or $0.01 per diluted share, compared to a net loss of $2.5 million, or $0.07 per diluted share for the prior year quarter. Adjusted net income was $4.5 million, or $0.12 per diluted share, compared to adjusted net income of $2.0 million, or $0.06 per diluted share, for the prior year quarter. Adjusted EBITDA, a non-U.S. GAAP measure, increased 7.2% to $15.0 million or 19.7% of net sales from $14.0 million, or 18.7% of net sales for the prior year quarter, driven primarily by the gross margin improvements. Free cash flow increased significantly to $4.7 million from negative free cash flow in the prior year. Cash flow from operations more than doubled to $10.2 million compared to $5 million, primarily driven by an increase in income from operations, offset somewhat by changes in working capital.

For the third quarter of 2018, the company expects net sales of $80.5 million to $83.5 million and adjusted EBITDA of $18.2 million to $18.7 million.

For the full year 2018, net sales guidance is expected to a range of $305.0 million to $309.0 million, compared to the previous range of $303.0 million to $307.0 million. The company reiterating guidance for adjusted EBITDA of $61.0 million to $63.0 million, as it continue to expect to invest the contribution from the incremental net sales growth into existing and new strategic initiatives. At the midpoint, this represents an adjusted EBITDA margin of 20.2%, which is an improvement of over 100 basis points compared to 2017.