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Primo Water Corporation released their Second Quarter 2012 numbers and to say the least the stock market nor the analyst were impressed. The stock hit a 52 week low by breaking the $1 mark trading as low as 0.96 before recovering by the end of the week to $1.20. Primo did report advancing water and dispensers sales however took almost a one million dollar loss on it’s Flavorstation product, a carbonated flavored water dispenser.

 

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Since it’s IPO the stock has not any major upswing in price and gone nowhere but down since August 2011. It continues to face strong pressure as analyst have not been impressed and even made a rather negative comment during the conference call which is all but unheard of.  In reference to Prim’s comments during the conference call that Primo was going to concentrate on it’s core water business through the dispensers and refill locations analyst Jim Duffy responded, “I look forward to that flawless execution, because we haven’t seen it yet, Billy.” Primo also still faces a Class Action by investors claiming the company or it’s executives made false and misleading statements about the company’s financials.

The Complaint names Primo Water, certain of its officers and directors and the underwriters of the Offerings as defendants and alleges they have violated the Securities Act of 1933 and the Securities Exchange Act of 1934. The Complaint alleges that during the Class Period, defendants’ positive statements about the Company were lacking in a reasonable basis of fact and were materially false and misleading when made. Specifically, (a) neither demand nor sales of the Company’s products were as robust as represented; (b) stores owned by the Company’s largest retail customers did not carry the Company’s products so the Company was not generating any revenue from those locations; (c) the Company’s growth and business prospects were heavily dependent upon the ability of the Company’s two largest customers to sell products from other, unrelated companies before those customers would order products from Primo Water; (d) the Company’s primary retail customers would not be in position to order any of the Company’s products until after those retail customers cleared out other inventory sitting on their shelves, including inventory related to products sold by competitors to the Company; (e) the Company’s largest retail customers had delayed promotions of the Company’s products, which negatively impacted the Company’s sales; (f) the Company’s growth rate had slowed and would be slower for the rest of 2011, if not beyond; and (g) the Company would not meet the financial guidance it provided to investors.

The Street.com

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