Ranpak Holdings Corp. (NYSE: PACK) reported Q3 EPS of ($0.03), $0.04 better than the analyst estimate of ($0.07). Revenue for the quarter came in at $69.1 million versus the consensus estimate of $64.07 million.

• Packaging System placement up 7.5% year over year to more than 102,000 machines
• Net sales up 6.1% year over year and 8.8% year over year on a constant currency basis and adjusted for fair value accounting
• Gross profit margin up 70 bps year over year to 42.7% and Adjusted gross profit margin up more than 200 bps year over year to 44.2%
• Net loss of $(1.6) million compared to net income of $0.3 million and Adjusted EBITDA up 6.9% year over year to $22.0 million (31.3% margin)

“We are pleased with our strong third quarter results and improved performance,” said Omar M. Asali, Chairman and Chief Executive Officer of Ranpak. “Sales increased by 8.8% year over year on a constant currency basis driven by broad-based growth across geographies with strong growth in cushioning, wrapping, and automation. Profitability was strong with year over year improvement in Adjusted gross profit margin by more than 200 bps to 44.2% and Adjusted EBITDA growth of 6.9%, resulting in an Adjusted EBITDA margin of greater than 31%.

“In addition to expanding the top-line at a solid clip, we are pleased to continue our profitable growth while meaningfully investing in the business through increased R&D and adding high quality talent in impactful positions. In the third quarter we expanded our sales force, product management teams, and business development resources to focus on key growth opportunities available to Ranpak. As these personnel additions season and contribute to our growth profile over time, we expect to experience greater operating leverage in the business. Our key near-term growth initiatives remain retail expansion and innovation, with progress being made in both areas in the third quarter. Our first retail trials begin in the fourth quarter in North America and our new product launch roll-out in cushioning, void-fill, and thermal applications commence later this year as well.”

“Since expanding my role to become CEO in August, communication at Ranpak has improved, customers feel a renewed focus, and we have become a more proactive and nimble organization. While we have more progress to make in order for Ranpak to achieve its true potential, I am excited to see that the changes are beginning to show up in results. We are working extremely hard to finish 2019 on a strong note and expect Q4 to continue the momentum we regained this past quarter.

“These are very exciting times at Ranpak, and in the industry in general, with the increased focus on sustainability and movement towards automated packaging solutions. Given the resources we now have at our disposal, we are exceptionally well positioned to \'deliver a better world\' TM by offering a superior protective packaging solution.”

Outlook for Remainder of 2019

The team remains committed to achieving its previously stated outlook of $95 million Pro forma Adjusted EBITDA, however, in light of performance in the second quarter we have updated our full year 2019 outlook. Our plan for the final quarter of 2019 includes various top line and cost savings initiatives, that we expect, upon execution, will provide us with the resources and operating leverage to achieve a range of $90 - $95 million Pro forma Adjusted EBITDA on a constant currency basis.

For earnings history and earnings-related data on Ranpak Holdings Corp. (PACK) click here.