Ranpak Holdings Corp

Previous wording

This Quarterly Report on Form 10-Q contains “forward-looking statements” within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Our forward-looking statements include, but are not limited to, statements regarding our or our management team’s expectations, hopes, beliefs, intentions or strategies regarding the future. Statements that are not historical facts are forward-looking statements. In addition, any statements that refer to estimates, projections, forecasts or other characterizations of future events or circumstances, including any underlying assumptions, are forward-looking statements. The words “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “forecast,” “intend,” “may,” “might,” “plan,” “possible,” “potential,” “predict,” “project,” “should,” “would” and similar expressions may identify forward-looking statements, but the absence of these words does not mean that a statement is not forward-looking. Forward-looking statements in this Quarterly Report on Form 10-Q include, for example, statements about our expectations around the future performance of the business.

Current wording

This Quarterly Report on Form 10-Q contains “forward-looking statements” within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Statements that are not historical facts are forward-looking statements. Our forward-looking statements include, but are not limited to, statements regarding our or our management team’s expectations, hopes, beliefs, intentions or strategies regarding the future. In addition, any statements that refer to estimates, projections, forecasts or other characterizations of future events or circumstances, including any underlying assumptions, are forward-looking statements. The words “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “forecast,” “intend,” “may,” “might,” “plan,” “possible,” “potential,” “predict,” “project,” “should,” “would” and similar expressions may identify forward-looking statements, but the absence of these words does not mean that a statement is not forward-looking.

Previous wording

our ability to fulfill our obligations under new disclosure regimes relating to environmental, social and governance matters, such as the European Sustainability Disclosure Standards recently adopted by the European Union (“EU”) under the EU’s Corporate Sustainability Reporting Directive (“CSRD”);

Current wording

•our ability to fulfill our obligations under new disclosure regimes relating to ESG matters, such as the European Sustainability Disclosure Standards recently adopted by the European Union (“EU”) under the EU’s Corporate Sustainability Reporting Directive (“CSRD”);

Previous wording

and “Forward-Looking Statements,” and our financial statements and related notes included in this Quarterly Report on Form 10-Q as well as the section entitled, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” of Ranpak included in our 2023 10-K, filed with the SEC on March 14, 2024. Capitalized terms used and not defined herein have the meanings disclosed elsewhere in the Quarterly Report on Form 10-Q.

Current wording

The following discussion and analysis is intended to help the reader understand our business, financial condition, results of operations, liquidity and capital resources. You should read this discussion in conjunction with the sections entitled “Risk Factors” and “Forward-Looking Statements,” and our financial statements and related notes included in this Quarterly Report on Form 10-Q as well as the section entitled, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” of Ranpak included in our 2023 10-K, filed with the SEC on March 14, 2024. Capitalized terms used and not defined herein have the meanings disclosed elsewhere in the Quarterly Report on Form 10-Q.

Previous wording

Ranpak is a leading provider of environmentally sustainable, systems-based, product protection and end-of-line automation solutions for e-commerce and industrial supply chains. Since our inception in 1972, we have delivered high quality protective packaging solutions, while maintaining commitment to environmental sustainability. We provide our paper-based Protective Packaging Solutions (“PPS”) systems and paper consumables to our distributors and certain select end-users. We operate manufacturing facilities in the United States and Europe. For our Automation product lines, we currently have dedicated facilities in Shelton, Connecticut and the Netherlands. R Squared Robotics, a division of Ranpak, uses three-dimensional computer vision and artificial intelligence technologies to improve end-of-line packaging and logistics functions. We also maintain sales and administrative offices in Brazil, France, the Czech Republic, China, Japan, and Singapore. We are a global business that generated approximately 59% of our 2023 net revenue outside of the United States.

Current wording

Ranpak is a leading provider of environmentally sustainable, systems-based, product protection and end-of-line automation solutions for e-commerce and industrial supply chains. Since our inception in 1972, we have delivered high quality protective packaging solutions, while maintaining commitment to environmental sustainability. We provide our paper-based Protective Packaging Solutions (“ PPS”) systems and paper consumables to distributors and certain select end-users. We operate manufacturing facilities in the United States and Europe. For our Automation product lines, we currently have dedicated facilities in Shelton, Connecticut and the Netherlands. R Squared Robotics, a division of Ranpak, uses three-dimensional computer vision and artificial intelligence technologies to improve end-of-line packaging and logistics functions. We also maintain sales and administrative offices in Brazil, France, the Czech Republic, China, Japan, and Singapore. We are a global business that generated approximately 59% of our 2023 net revenue outside of the United States.

Previous wording

As of March 31, 2024, we had an installed base of approximately 140.8 thousand PPS systems serving a diverse set of distributors and end-users. We generated net revenue of $85.3 million and $81.2 million in the three months ended March 31, 2024 and 2023, respectively.

Current wording

As of June 30, 2024, we had an installed base of approximately 141.2 thousand PPS systems serving a diverse set of distributors and end-users. We generated net revenue of $171.7 million and $163.1 million in the six months ended June 30, 2024 and 2023, respectively.

Previous wording

Our condensed consolidated financial statements are prepared in accordance with GAAP. We have, however, also presented below Earnings Before Interest, Taxes, Depreciation and Amortization (“EBITDA”) and adjusted EBITDA (“AEBITDA”), which are non-GAAP financial measures. We have included EBITDA and AEBITDA because they are key measures used by our management and Board of Directors to understand and evaluate our operating performance and trends, to prepare and approve our annual budget and to develop short- and long-term operational plans. In particular, the exclusion of certain expenses in calculating EBITDA and AEBITDA can provide a useful measure for period-to-period comparisons of our primary business operations. Adjusting AEBITDA for comparability for constant currency also assists in this comparison as it allows a better insight into the performance of our businesses that operate in currencies other than our reporting currency. Before consolidation, our Europe/Asia financial data is derived in Euros. To calculate the adjustment that we apply to present AEBITDA on a constant currency basis, we multiply this Euro-derived data by 1.15 to reflect an exchange rate of 1 Euro to 1.15 USD, which we believe is a reasonable exchange rate to use to give a stable depiction of the business without currency fluctuations between periods, to calculate Europe/Asia data in constant currency USD. An exchange rate of 1.15 approximates the average exchange rate of the Euro to USD over the past five years. We also present non-GAAP constant currency net revenue and derive it in the same manner. We believe that EBITDA and AEBITDA provide useful information to investors and others in understanding and evaluating the Company’s operating results in the same manner as our management and Board of Directors.

Current wording

Our condensed consolidated financial statements are prepared in accordance with GAAP. We have, however, also presented below Earnings Before Interest, Taxes, Depreciation and Amortization (“EBITDA”) and constant currency adjusted EBITDA (“Constant Currency AEBITDA”), which are non-GAAP financial measures. We have included EBITDA and Constant Currency AEBITDA because they are key measures used by our management and board of directors to understand and evaluate our operating performance and trends, to prepare and approve our annual budget and to develop short- and long-term operational plans. In particular, the exclusion of certain expenses in calculating EBITDA and Constant Currency AEBITDA can provide a useful measure for period-to-period comparisons of our primary business operations. Adjusting AEBITDA for comparability for constant currency also assists in this comparison as it allows a better insight into the performance of our businesses that operate in currencies other than our reporting currency. Before consolidation, our Europe/Asia financial data is derived in Euros. To calculate the adjustment that we apply to present

Previous wording

although depreciation and amortization are non-cash charges, the assets being depreciated and amortized may have to be replaced in the future, and EBITDA and AEBITDA do not reflect all cash capital expenditure requirements for such replacements or for new capital expenditure requirements;

Current wording

•although depreciation and amortization are non-cash charges, the assets being depreciated and amortized may have to be replaced in the future, and EBITDA and Constant Currency AEBITDA do not reflect all cash capital expenditure requirements for such replacements or for new capital expenditure requirements;

Previous wording

EBITDA and AEBITDA do not reflect changes in, or cash requirements for, our working capital needs;

Current wording

•EBITDA and Constant Currency AEBITDA do not reflect changes in, or cash requirements for, our working capital needs;

Previous wording

AEBITDA does not consider the potentially dilutive impact of equity-based compensation;

Current wording

•Constant Currency AEBITDA does not consider the potentially dilutive impact of equity-based compensation;

Previous wording

EBITDA and AEBITDA do not reflect the impact of the recording or release of valuation allowances or tax payments that may represent a reduction in cash available to us;

Current wording

•EBITDA and Constant Currency AEBITDA do not reflect the impact of the recording or release of valuation allowances or tax payments that may represent a reduction in cash available to us;

Previous wording

AEBITDA does not take into account any restructuring and integration costs;

Current wording

•Constant Currency AEBITDA does not take into account any restructuring and integration costs;

Previous wording

AEBITDA is presented on a constant currency basis and gives effect to the impact of currency fluctuations

Current wording

•Constant Currency AEBITDA is presented on a constant currency basis and gives effect to the impact of currency fluctuations

Previous wording

other companies, including companies in our industry, may calculate EBITDA and AEBITDA differently, which reduces their usefulness as comparative measures.

Current wording

•other companies, including companies in our industry, may calculate EBITDA and Constant Currency AEBITDA differently, which reduces their usefulness as comparative measures.

Previous wording

AEBITDA —AEBITDA is a non-GAAP financial measure that we present on a constant currency basis and calculate as net income (loss), adjusted to exclude: benefit from (provision for) income taxes; interest expense; depreciation and amortization; stock-based compensation expense; and, in certain periods, certain other income and expense items; as further adjusted to reflect the performance of the business on a constant currency basis.

Current wording

Constant Currency AEBITDA —Constant Currency AEBITDA is a non-GAAP financial measure that we present on a constant currency basis and calculate as net income (loss), adjusted to exclude: benefit from (provision for) income taxes; interest expense; depreciation and amortization; stock-based compensation expense; and, in certain periods, certain other income and expense items; as further adjusted to reflect the performance of the business on a constant currency basis.

Previous wording

In addition, in our discussion below, we include certain other unaudited, non-GAAP constant currency data for the three months ended March 31, 2024 and 2023. This data is based on our historical financial statements included elsewhere in this Quarterly Report on Form 10-Q, adjusted (where applicable) to reflect a constant currency presentation between periods for the convenience of readers. We reconcile this data to our GAAP data for the same period under “Presentation and Reconciliation of GAAP to Non-GAAP Measures” for the three months ended March 31, 2024 and 2023.

Current wording

In addition, in our discussion below, we include certain other unaudited, non-GAAP constant currency data for the three and six months ended June 30, 2024 and 2023. This data is based on our historical financial statements included elsewhere in this Quarterly Report on Form 10-Q, adjusted (where applicable) to reflect a constant currency presentation between periods for the convenience of readers. We reconcile this data to our GAAP data for the same period under “Presentation and Reconciliation of GAAP to Non-GAAP Measures” for the three and six months ended June 30, 2024 and 2023.

Previous wording

The following tables set forth our results of operations for the three months ended March 31, 2024 and 2023 with line items presented in millions of dollars.

Current wording

The following tables set forth our results of operations for the three and six months ended June 30, 2024 and 2023 with line items presented in millions of dollars.

Previous wording

The following tables and the discussion that follows compare our net revenue by geographic region and by product line for the first quarter of 2024 and 2023 on a GAAP basis and on a non-GAAP constant currency basis as described above and in the discussion below. See also “Presentation and Reconciliation of GAAP to Non-GAAP Measures” for further detail:

Current wording

The following tables and the discussion that follows compare our net revenue by geographic region and by product line for the second quarter of 2024 and 2023 on a GAAP basis and on a non-GAAP constant currency basis as described above and in the discussion below. See also “Presentation and Reconciliation of GAAP to Non-GAAP Measures” for further detail:

Previous wording

Net revenue for the first quarter of 2024 was $85.3 million compared to $81.2 million in the first quarter of 2023, an increase of $4.1 million or 5.0% year over year. Net revenue was positively impacted by increases in void-fill and other products, as well as a currency benefit of 0.7%, partially offset by decreases in cushioning and wrapping. Cushioning decreased $0.3 million, or 0.8%, to $37.3 million from $37.6 million; void-fill increased $2.9 million, or 9.6%, to $33.1 million from $30.2 million; wrapping decreased $0.7 million, or 7.5%, to $8.6 million from $9.3 million; and other sales increased $2.2 million, or 53.7%, to $6.3 million from $4.1 million for the first quarter of 2024 compared to the first quarter of 2023. Other net revenue includes automated box sizing equipment and non-paper revenue from packaging systems installed in the field, such as systems accessories. The increase in net revenue is quantified by an increase in the volume of sales of our paper consumable products of approximately 5.3% and an increase of 2.7% in sales of automated box sizing equipment, partially offset by a 3.6% decrease in the price or mix of our paper consumable products. Constant currency net revenue was $88.5 million for the first quarter of 2024, a 4.4% increase from $84.8 million for the first quarter of 2023.

Current wording

Net revenue for the second quarter of 2024 was $86.4 million compared to $81.9 million in the second quarter of 2023, an increase of $4.5 million or 5.5% year over year. Net revenue was positively impacted by an increase in void-fill, partially offset by a decrease in cushioning and other net revenue. Other net revenue includes automated box sizing equipment and non-paper revenue from packaging systems installed in the field, such as systems accessories. Cushioning decreased $1.6 million, or 4.4%, to $35.0 million from $36.6 million; void-fill increased $6.6 million, or 21.2%, to $37.7 million from $31.1 million; wrapping remained constant at $8.4 million; and other sales decreased $0.5 million, or 8.6%, to $5.3 million from $5.8 million for the second quarter of 2024 compared to the second quarter of 2023. The increase in net revenue is quantified by an increase in the volume of sales of our paper consumable products of approximately 8.8%, partially offset by a 2.5% decrease in the price or mix of our paper consumable products and a 0.4% decrease in sales of automated box sizing equipment. Constant currency net revenue was $89.6 million for the second quarter of 2024, a 5.9% increase from $84.6 million from the second quarter of 2023.

Previous wording

Net revenue in North America for the first quarter of 2024 totaled $31.9 million compared to $31.1 million in the first quarter of 2023. The increase of $0.8 million, or 2.6%, was primarily attributable to increases in void-fill and other sales, partially offset by decreases in cushioning and wrapping.

Current wording

Net revenue in North America for the second quarter of 2024 totaled $37.7 million compared to $32.2 million in the second quarter of 2023. The increase of $5.5 million, or 17.1%, was primarily attributable to an increase in void-fill sales, partially offset by decreases in wrapping and other sales.

Previous wording

Foreign currency gain for the first quarter of 2024 was $1.4 million, a change of $1.6 million, from foreign currency loss of $0.2 million in the first quarter of 2023 due to the volatility in Euro exchange rates compared to USD.

Current wording

Foreign currency loss for the second quarter of 2024 was $0.1 million, a decrease of $0.6 million, or 85.7%, from foreign currency loss of $0.7 million in the second quarter of 2023 due to the volatility in Euro exchange rates compared to USD.

Previous wording

Income tax benefit for the first quarter of 2024 was $1.5 million, or an effective tax rate of 15.8%. Income tax benefit was $2.1 million in the first quarter of 2023, or an effective tax rate of 14.4%. The fluctuation in the effective tax rate between periods was primarily attributable to a tax expense of $0.7 million related to stock-based compensation shortfall. The effective tax rate is less than the U.S. federal statutory rate due primarily to stock-based compensation adjustments, which is partially offset by the U.S. tax credits available in the U.S., and income in foreign jurisdictions that are taxed at different rates than the U.S. statutory tax rate.

Current wording

Income tax expense for the second quarter of 2024 was $1.8 million, or an effective tax rate of 24.8%. Income tax expense was $0.3 million in the second quarter of 2023, or an effective tax rate of (15.5)%. The fluctuation in the effective tax rate between periods was primarily attributable to the litigation settlement and patent sale in the second quarter of 2024. The effective tax rate for the three months ended June 30, 2024 is consistent with the combined federal and state statutory rates. The effective tax rate is less than the U.S. federal statutory rate for the three months ended June 30, 2023 due primarily to stock-based compensation adjustments.

Previous wording

Net loss for the first quarter of 2024 decreased $4.3 million to $8.1 million from a net loss of $12.4 million in the first quarter of 2023. The change was due to the reasons discussed above.

Current wording

Net income for the second quarter of 2024 increased $7.6 million to $5.5 million from a net loss of $2.1 million in the second quarter of 2023. The change was due to the reasons discussed above.

Previous wording

EBITDA for the first quarter of 2024 was $15.4 million, an increase of $7.9 million, or 105.3%, compared to $7.5 million in the first quarter of 2023. AEBITDA for the first quarter of 2024 and 2023 totaled $20.2 million and $15.1 million, respectively, an increase of $5.1 million, or 33.8%.

Current wording

EBITDA for the second quarter of 2024 was $29.3 million, an increase of $8.5 million, or 40.9%, compared to $20.8 million in the second quarter of 2023. Adjusting for non-recurring costs, AEBITDA for the second quarter of 2024 and 2023 totaled $20.4 million and $19.0 million, respectively, an increase of $1.4 million, or 7.4% year over year.

Previous wording

Net revenue in Europe/Asia for the first quarter of 2024 totaled $53.4 million compared to $50.1 million in the first quarter of 2023. The increase of $3.3 million, or 6.6%, was driven by increases from void-fill, wrapping and other sales, partially offset by a decrease in cushioning. Constant currency net revenue in Europe/Asia was $56.6 million for the first quarter of 2024, a $2.9 million, or 5.4%, increase from $53.7 million for the first quarter of 2023.

Current wording

Net revenue in Europe/Asia for the six months ended June 30, 2024 totaled $102.1 million compared to $99.8 million in the six months ended June 30, 2023. The increase of $2.3 million, or 2.3%, was driven by increased sales in void-fill, wrapping and other sales, partially offset by a decrease in cushioning sales. Constant currency net revenue in Europe/Asia was $108.5 million for the six months ended June 30, 2024, a $2.4 million, or 2.3%, increase from constant currency net revenue of $106.1 million for the six months ended June 30, 2023.

Previous wording

The following tables and related notes reconcile certain non-GAAP measures, including the non-GAAP constant currency measures, to GAAP information presented in this Quarterly Report on Form 10-Q for the three months ended March 31, 2024 and 2023:

Current wording

The following tables and related notes reconcile certain non-GAAP measures, including the non-GAAP constant currency measures, to GAAP information presented in this Quarterly Report on Form 10-Q for the three and six months ended June 30, 2024 and 2022:

Previous wording

(1) Reconciliations of EBITDA and AEBITDA for each period presented are to net (loss) income, the nearest GAAP equivalent.

Current wording

(1)Reconciliations of EBITDA and AEBITDA for each period presented are to net (loss) income, the nearest GAAP equivalent.

Previous wording

(2) Adjustments are related to non-cash unusual or infrequent costs such as: effects of non-cash foreign currency remeasurement or adjustment; impairment of returned machines; costs associated with the evaluation of acquisitions; costs associated with executive severance; costs associated with restructuring actions such as plant rationalization or realignment, reorganization, and reductions in force; costs associated with the implementation of the global ERP system; and other items deemed by management to be unusual, infrequent, or non-recurring.

Current wording

(2)Adjustments are related to non-cash unusual or infrequent costs such as: effects of non-cash foreign currency remeasurement or adjustment; impairment of returned machines; costs associated with the evaluation of acquisitions; costs associated with executive severance; costs associated with restructuring actions such as plant rationalization or realignment, reorganization, and reductions in force; costs associated with the implementation of the global ERP system; and other items deemed by management to be unusual, infrequent, or non-recurring.

Previous wording

(3) Represents amortization of capitalized costs related to the implementation of the global ERP system, which are included in SG&A.

Current wording

(3)Represents amortization of capitalized costs related to the implementation of the global ERP system, which are included in SG&A.

Previous wording

We evaluate liquidity in terms of cash flows from operations and other sources and the sufficiency of such cash flows to fund our operating, investing and financing activities. We believe that our cash and cash equivalents of $55.1 million as of March 31, 2024, together with borrowing capacity under the revolving portion of our senior secured credit facilities, will provide us with sufficient resources to cover our current requirements.

Current wording

We evaluate liquidity in terms of cash flows from operations and other sources and the sufficiency of such cash flows to fund our operating, investing and financing activities. We believe that our $65.1 million in cash and cash equivalents as of June 30, 2024, together with borrowing capacity under the revolving portion of our senior secured credit facilities, will provide us with sufficient resources to cover our current requirements over the next twelve months.

Previous wording

We had $55.1 million in cash and cash equivalents as of March 31, 2024 and $62.0 million as of December 31, 2023. Including finance lease liabilities and excluding deferred financing costs, we had $403.0 million in debt, $2.6 million of which was classified as short-term, as of March 31, 2024, compared to $407.4 million in debt, $2.5 million of which was classified as short-term, as of December 31, 2023. At March 31, 2024, we did not have amounts outstanding under our $45.0 million revolving credit facility, and we had no borrowings under such facility through May 2, 2024. The Revolving Facility includes borrowing capacity available for standby letters of credit of up to $5.0 million. Any issuance of letters of credit will reduce the amount available under the Revolving Facility. As of March 31, 2024, we had $3.6 million committed to outstanding letters of credit, leaving net availability under the Revolving Facility at $41.4 million.

Current wording

We had $65.1 million in cash and cash equivalents as of June 30, 2024 and $62.0 million as of December 31, 2023. Including finance lease liabilities and excluding deferred financing costs, we had $401.7 million in debt, $2.6 million of which was classified as short-term, as of June 30, 2024, compared to $407.4 million in debt, $2.5 million of which was classified as short-term, as of December 31, 2023. At June 30, 2024, we did not have amounts outstanding under our $45.0 million revolving credit facility, and we had no borrowings under such facility through August 1, 2024. The Revolving Facility includes borrowing capacity available for standby letters of credit of up to $5.0 million. Any issuance of letters of credit will reduce the amount available under the Revolving Facility. As of June 30, 2024, we had $1.2 million committed to outstanding letters of credit, leaving net availability under the Revolving Facility at $43.8 million.

Previous wording

The material terms of the Facilities are summarized in Note 7, “Long-Term Debt” to the unaudited condensed consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q and Note 11, “Long-Term Debt” to the consolidated financial statements included in our 2023 10-K. The First Lien Term Facility matures in 2026 and the Revolving Facility matures in 2025. Borrowings under the Facilities, at our option, bear interest at either (1) an adjusted eurocurrency rate or the secured-overnight financing rate (“SOFR”), or (2) a base rate, in each case plus an applicable margin. The applicable margin is 3.75% with respect to eurocurrency borrowings or SOFR borrowings, as applicable, and 2.75% with respect to base rate borrowings, in each case assuming a first lien net leverage ratio of less than 5.00:1.00, subject to a leverage-based step-up to an applicable margin equal to 4.00% for eurocurrency borrowings and SOFR borrowings, as applicable, and 3.00% with respect to base rate borrowings. The interest rate for the First Lien Dollar Term Facility as of March 31, 2024 and December 31, 2023, was 9.43% and 9.44%, respectively. The interest rate for the First Lien Euro Term Facility as of March 31, 2024 and December 31, 2023, was 7.86% and 7.86%, respectively. Global interest rates increased meaningfully in 2023 and we expect interest on our Facilities to increase.

Current wording

The material terms of the Facilities are summarized in Note 7 — Long-Term Debt to the unaudited condensed consolidated financial statements included elsewhere in this Quarterly Report on Form 10-Q and under the heading “Liquidity and Capital Resources - Debt Profile” in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” of the 2023 10-K. The First Lien Term Facility matures in 2026 and the Revolving Facility matures in 2025. Borrowings under the Facilities, at our option, bear interest at either (1) an adjusted eurocurrency rate or, the secured-overnight financing rate (“SOFR”), or (2) a base rate, in each case plus an applicable margin. The applicable margin is 3.75% with respect to eurocurrency borrowings or SOFR borrowings, as applicable, and 2.75% with respect to base rate borrowings, in each case assuming a first lien net leverage ratio of less than 5.00:1.00, subject to a leverage-based step-up to an applicable margin equal to 4.00% for eurocurrency borrowings and SOFR borrowings, as applicable, and 3.00% with respect to base rate borrowings. The interest rate for the First Lien Dollar Term Facility as of June 30, 2024 and December 31, 2023, was 9.18% and 9.44%, respectively. The interest rate for the First Lien Euro Term Facility as of June 30, 2024 and December 31, 2022, was 7.50% and 7.86%, respectively.

Previous wording

Net cash provided by operating activities was $5.2 million in the three months ended March 31, 2024. Cash provided by operating activities was $7.5 million in the three months ended March 31, 2023. The changes in operating cash flows are largely due to the decreased net loss for the current period compared with prior year and changes in working capital adjustments.

Current wording

Net cash provided by operating activities was $24.8 million in the six months ended June 30, 2024. Cash provided by operating activities was $16.6 million in the six months ended June 30, 2023. The changes in operating cash flows are largely due to the decreased net loss for the current period compared with prior year, which was in part due to a patent litigation settlement of $16.1 million in the current period, and partially offset by increases in inventory and accounts receivable as of June 30, 2024.

Previous wording

Net cash used in investing activities was $10.3 million in the three months ended March 31, 2024 and reflects cash used for production of converter equipment and purchases of machinery and equipment, and an additional investment in Pickle. Cash used in investing activities was $11.8 million in the three months ended March 31, 2023 and reflects cash used for production of converter equipment and leasehold improvements for our facilities in Connecticut and The Netherlands.

Current wording

Net cash used in investing activities was $19.1 million in the six months ended June 30, 2024 and reflects cash used for production of converter equipment and purchases of machinery and equipment, and an additional investment in Pickle of $4.8 million. We had cash inflows from investing activities of $5.4 million from the sale of two patents. Net cash used in investing activities was $25.2 million in the six months ended June 30, 2023 and reflects cash used for production of converter equipment and leasehold improvements for our facilities in Connecticut and The Netherlands.

Previous wording

Net cash used in financing activities was $1.3 million in the three months ended March 31, 2024 and reflects debt repayments, payments on finance lease liabilities, tax payments for withholdings on stock compensation and payments on our equipment financing arrangement. Net cash used in financing activities was $0.3 million in the three months ended March 31, 2023 and reflects debt repayments, payments on finance lease liabilities, and tax payments for withholdings on stock compensation, partially offset by proceeds received from an equipment financing arrangement.

Current wording

Net cash used in financing activities was $1.6 million in the six months ended June 30, 2024 and reflects debt repayments, payments on finance lease liabilities, tax payments for withholdings on stock compensation, and payments on our equipment financing arrangement. Net cash used in financing activities was $0.7 million in the six months ended June 30, 2023 and reflects debt repayments, payments on finance lease liabilities, tax payments for withholdings on stock compensation, and legal fees paid related to a modification of our debt facilities, partially offset by proceeds received from our equipment financing arrangement.

Previous wording

Our unaudited condensed consolidated financial statements have been prepared in conformity with GAAP, which requires management to make estimates and assumptions that affect the reported amount of assets and liabilities at the date of our financial statements and the reported amounts of revenues and expenses during the reporting period. While we do not believe that the reported amounts would be materially different, application of these policies involves the exercise of judgment and the use of assumptions as to future uncertainties and, as a result, actual results could differ from these estimates. We evaluate our estimates and judgments on an ongoing basis. We base our estimates on experience and various other assumptions that we believe are reasonable under the circumstances. All of our significant accounting policies, including certain critical accounting policies and estimates, are disclosed in our 2023 10-K.

Current wording

Our unaudited condensed consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“GAAP”), which requires management to make estimates and assumptions that affect the reported amount of assets and liabilities at the date of our financial statements and the reported amounts of revenues and expenses during the reporting period. While we do not believe that the reported amounts would be materially different, application of these policies involves the exercise of judgment and the use of assumptions as to future uncertainties and, as a result, actual results could differ from these estimates. We evaluate our estimates and judgments on an ongoing basis. We base our estimates on experience and various other assumptions that we believe are reasonable under the circumstances. All of our significant accounting policies, including certain critical accounting policies and estimates, are disclosed in our 2023 10-K.