Ranpak Holdings Corp. has recently released its 10-Q report, providing key insights into the company's financial condition and results of operations. Ranpak is a leading provider of environmentally sustainable product protection and end-of-line automation solutions for e-commerce and industrial supply chains, operating in North America, Europe, and Asia. The company offers protective packaging solutions and end-of-line packaging automation products, with a focus on paper-based systems and consumables.
In the 10-Q report, Ranpak highlighted its key performance indicators and factors affecting its performance. The company closely tracks the number of protective packaging systems installed with end-users, with an installed base of approximately 143.6 thousand PPS systems as of September 30, 2024. This represents a 1.1% increase from the previous year, indicating underlying business trends and near-term sales expectations.
The report also emphasized the impact of paper and other costs on Ranpak's financials. Paper is a significant component of the company's cost of goods sold, and fluctuations in paper costs can have a substantial effect on its operating results. Ranpak purchases both 100% virgin and 100% recycled paper, as well as blends, from various suppliers for conversion into paper consumables. The cost of paper supplies is the company's largest input cost, and it historically negotiates supply and pricing arrangements with most of its paper suppliers annually to mitigate fluctuations in paper cost.
Additionally, Ranpak addressed the effects of currency fluctuations on its operations. As a global business, the company is exposed to currency translation effects, which can impact the comparability of its results of operations between different periods. To mitigate currency transaction exposure, Ranpak seeks to match the currencies in which it incurs sales and expenses. The company also hedges some of its exposure to foreign currency translation with a cross-currency swap.
Furthermore, the report discussed the impact of inflationary pressures and other costs on Ranpak's financial performance. Inflationary pressures experienced in 2024 have adversely impacted some of the company's end-users, leading to higher costs and potential impacts on net revenue. Ranpak noted that it expects some continued pressure on its gross margin in the medium term relative to its historical margin profile due to inflationary pressures.
Lastly, the 10-Q report provided an overview of the company's results of operations, including the presentation of non-GAAP financial measures such as Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA) and constant currency adjusted EBITDA (Constant Currency AEBITDA). Ranpak uses these measures to understand and evaluate its operating performance and trends, prepare and approve its annual budget, and develop short* and long-term operational plans.
As a result of these announcements, the company's shares have moved 3.9% on the market, and are now trading at a price of $6.16. Check out the company's full 10-Q submission here.
