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What changed in Ranpak Holdings Corp.'s 10-K — 2023 vs 2024

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Paragraph-level year-over-year comparison of Ranpak Holdings Corp.'s 2023 and 2024 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2024 report.

+336 added−265 removedSource: 10-K (2025-03-17) vs 10-K (2024-03-14)

Top changes in Ranpak Holdings Corp.'s 2024 10-K

336 paragraphs added · 265 removed · 213 edited across 7 sections

Item 1. Business

Business — how the company describes what it does

71 edited+19 added−20 removed60 unchanged
Biggest changeOur recent innovations include: • The Cut'it! ™ EVO Multi-Lid provides the ability to combine a universal box with different lids, so that a single packaging line process boxes with different visual appearances. • FillPak Trident Mini ™ offers superior protection with less paper when compared to traditional protective paper packaging options. • The Geami MS Mini ™ wrapping system, a sustainable, biodegradable, recyclable, and plastic-free alternative to traditional plastic bubble roll. • The Geami Wrap ‘n Go ™ converter, the latest evolution of the patented Geami portfolio that converts environmentally friendly paper into protective packaging for fragile items. • The RecyCold® Climaliner ™ solution, a highly efficient paper-based sustainable thermal liner designed to support Cold Chain shipping needs across a variety of end markets, by ensuring that products stay within their ideal temperature range for up to 48 hours, while simultaneously ensuring recyclability and sustainability. • Intellectual Property .
Biggest changeIt is a highly efficient paper-based sustainable thermal liner designed to support Cold Chain shipping needs across a variety of end markets, by ensuring that products stay within their ideal temperature range for up to 72 hours, while simultaneously ensuring recyclability and sustainability. • Intellectual Property .
We believe changing consumer preferences and buying habits will drive continued e-commerce growth, both among pure-play e-commerce companies, as well as among historical brick-and-mortar companies seeking to expand their e-commerce presence.
E-commerce . We believe changing consumer preferences and buying habits will drive continued e-commerce growth, both among pure-play e-commerce companies, as well as among historical brick-and-mortar companies seeking to expand their e-commerce presence.
These reports are also available at the SEC’s website, www.sec.gov . Apart from SEC filings, we also use our website to publish information which may be important to investors, such as analyst and investor presentations. Any information on our website or obtained through our website is not part of this Report.
These reports are also available at the SEC’s website at www.sec.gov . Apart from SEC filings, we also use our website to publish information which may be important to investors, such as analyst and investor presentations. Any information on our website or obtained through our website is not part of this Report.
Our solutions deliver automation, productivity and sustainability enhancements to our end-users’ operations. Through our robust research and development (“R&D”) pipeline, we plan to continue to improve our value proposition by rolling-out next generation products to improve performance and efficiency as 3 well as expanding product lines adapted to continuously evolving consumer and business preferences.
Our solutions deliver automation, productivity and sustainability enhancements to our end-users’ operations. Through our robust research and development (“R&D”) pipeline, we plan to continue to improve our value proposition by rolling-out next generation products to improve performance and efficiency as well as expanding product lines adapted to continuously evolving consumer and business preferences.
We historically have benefited from net revenue that is recurring in nature with attractive profit margins from our installed base, resulting in attractive payback periods and returns on invested capital per PPS system. • Diversified End-User Base .
We historically have benefited from net revenue that is recurring in nature with attractive profit margins from our installed base, resulting in strong payback periods and returns on invested capital per PPS system. • Diversified End-User Base .
Beyond our leading position in paper-based Void-Fill and Cushioning protective packaging systems, we expect to also focus on other emerging applications, such as Wrapping, Automation, Cold Chain, and Retail Consumables, for continued growth.
Beyond our leading position in paper-based Void-Fill and Cushioning protective packaging systems, we expect to also focus on other emerging applications, such as Wrapping, Automation, Cold Chain, and Consumables, for continued growth.
We believe businesses and consumers are increasingly demonstrating preferences for environmentally sustainable cold chain solutions to keep food and beverages cold during transit. We have expanded our offering to include fiber-based liners and sustainable plant-based cool packs to keep perishable goods cool while they are being delivered to consumers. • Expansion into Retail Channel and Consumables .
We believe businesses and consumers are increasingly demonstrating preferences for environmentally sustainable cold chain solutions to keep food and beverages cold during transit. We have expanded our offering to include fiber-based liners and sustainable plant-based cool packs to keep perishable goods cool while they are being delivered to consumers. • Expansion into Consumables .
Our Market Our end-user market consists of any business that sells and ships products requiring packaging. Accordingly, these end-users are highly dependent on their ability to obtain a cost-effective and efficient in-the-box packaging solution. Our end-users operate in a variety of businesses, including e-commerce, the automotive after-market, electronics, machinery/manufacturing, home goods, pharmaceuticals, retail and others. E-commerce .
Our Market Our end-user market consists of any business that sells and ships products requiring packaging. Accordingly, these end-users are highly dependent on their ability to obtain a cost-effective and efficient in-the-box packaging solution. Our end- 9 Table of Contents users operate in a variety of businesses, including e-commerce, the automotive after-market, electronics, machinery/manufacturing, home goods, pharmaceuticals, retail and others.
We believe demand for industrial machinery and equipment used in sectors such as agriculture, construction, mining, packaging, and food processing will increase as economies expand, thus requiring additional infrastructure spend as well as increasing the need to feed growing middle-class populations across the globe. Sales to our machinery end-users accounted for approximately 6.4% of our net revenue in 2023.
We believe demand for industrial machinery and equipment used in sectors such as agriculture, construction, mining, packaging, and food processing will increase as economies expand, thus requiring additional infrastructure spend as well as increasing the need to feed growing middle-class populations across the globe. Sales to our machinery end-users accounted for approximately 6% of our net revenue in 2024.
Our electronics end-users customarily sell products such as computer hardware and electronics that are often already securely packaged in primary packages by the manufacturer and, as a result, require less robust protective packaging systems from us. Sales to our electronics end-users accounted for approximately 7.5% of our net revenue in 2023. Industrial Machinery .
Our electronics end-users customarily sell products such as computer hardware and electronics that are often already securely packaged in primary packages by the manufacturer and, as a result, require less robust protective packaging systems from us. Sales to our electronics end-users accounted for approximately 7% of our net revenue in 2024. Industrial Machinery .
In 2021, we created R Squared Robotics, a division of Ranpak, that uses three-dimensional computer vision and artificial intelligence technologies to improve end-of-line packaging and logistics functions and we advanced our focus on Automation with a strategic investment in Pickle. All of these efforts complement and expand our focus on our Automation products.
In 2021, we created R Squared Robotics, a division of Ranpak, that uses three-dimensional computer vision and artificial intelligence technologies to improve end-of-line packaging and logistics functions and we advanced our focus on Automation with a strategic investment in Pickle Robot Co. (“Pickle”). All of these efforts complement and expand our focus on our Automation products.
This qualification process involves an evaluation of the physical specifications of the potential supply source, as well as extensive testing for the paper’s convertibility – on the fan-folding, rewinding and die-cutting raw paper converters in our facilities – and in the protective packaging systems we place with our end-users.
This qualification process involves an evaluation of the physical specifications of the potential supply source, as well as extensive testing for the 10 Table of Contents paper’s convertibility – on the fan-folding, rewinding and die-cutting raw paper converters in our facilities – and in the protective packaging systems we place with our end-users.
Compliance with, or liability under, these laws and regulations may require us to incur significant costs and have a material adverse effect on our capital expenditures, earnings, and competitive position.
Compliance with, or liability under, these laws and regulations can require us to incur significant costs and have a material adverse effect on our capital expenditures, earnings, and competitive position.
While still relatively small, representing approximately 10.7% of our net revenue in 2023, we believe our Wrapping product line can provide a platform for growth largely due to our Geami products, which provide a highly effective and environmentally friendly alternative to plastic bubble wrap, as well as an opportunity to expand our distribution channels into the retail and retail shipping segments.
While still relatively small, representing approximately 10% of our total net revenue in 2024, we believe our Wrapping product line can provide a platform for growth largely due to our Geami products, which provide a highly effective and environmentally friendly alternative to plastic bubble wrap, as well as an opportunity to expand our distribution channels into the retail and retail shipping segments.
Commitment to Sustainability In 2020, we committed to achieving the following sustainability targets by 2030: • Reducing greenhouse gas emissions by 46%; • Sourcing an aggregate paper supply consisting of at least 75% recycled pulp; • Obtaining Forest Stewardship Council, Sustainable Forestry Initiative, or Programme for the Endorsement of Forest Certification for 100% of our paper packaging; • Sourcing an aggregate paper supply consisting of at least 25% post-consumer waste (“PCW”) or alternative pulp In our 2022 Environmental and Sustainability (“ESG”) Report, we announced that we had already met our previous goal of sourcing an aggregate paper supply consisting of at least 25% PCW or alternative pulp by 2030.
Commitment to Sustainability In 2020, we committed to achieving the following sustainability targets by 2030: • Reducing greenhouse gas emissions by 46%; • Sourcing an aggregate paper supply consisting of at least 75% recycled pulp; • Obtaining Forest Stewardship Council, Sustainable Forestry Initiative, or Programme for the Endorsement of Forest Certification for 100% of our paper packaging; • Sourcing an aggregate paper supply consisting of at least 25% post-consumer waste (“PCW”) or alternative pulp In 2022, we announced that we had already met our goal of sourcing an aggregate paper supply consisting of at least 25% PCW or alternative pulp by 2030.
ITEM 1. BUSINESS Our Business 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 our commitment to environmental sustainability. We differentiate ourselves by our: • Distinct Business Model .
ITEM 1. BUSINESS Our Business 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 our commitment to environmental sustainability. We differentiate ourselves by our: • Comprehensive Suite of Solutions.
Our sales and marketing teams, as well as our highly skilled engineers, work closely with distributors and ultimate end-users, on-site or remotely, to optimize the custom configuration and installation of our PPS systems and Automation products at the end-user’s facility.
Our sales and marketing teams, as well as our highly skilled engineers, work closely with distributors and ultimate end-users, on-site or remotely, to optimize the custom configuration and installation 7 Table of Contents of our PPS systems and Automation products at the end-user’s facility.
We believe that our distributor-based 5 distribution model is particularly well suited to the highly fragmented nature of the protective packaging solution end-user market we seek to serve by enabling us to reach a broad range of end users across size, industry and geography while maintaining a lean internal salesforce and capital base.
We believe that our distributor-based distribution model is particularly well suited to the highly fragmented nature of the protective packaging solution end-user market we seek to serve by enabling us to reach a broad range of end users across size, industry and geography while maintaining a lean internal sales force and capital base.
We believe that growing environmental awareness world-wide, combined with an increasing regulatory trend to limit the use of polymer-based foams and plastic films in many jurisdictions, present an opportunity for our paper-based protective packaging solutions in an ever-expanding number of geographies. • Grow via partnerships and acquisitions .
We believe that growing environmental awareness world-wide, combined with an increasing regulatory trend to limit the use of polymer-based foams and plastic films in many jurisdictions, present an opportunity for our paper-based protective packaging solutions in an ever-expanding number of geographies.
Seasonality We estimate that nearly a third of our net revenue in 2023, either directly or to distributors, was destined for end-users in the e-commerce sectors, whose businesses frequently follow traditional retail seasonal trends, including a concentration of sales in the holiday period in the fourth quarter.
Seasonality We estimate that over a third of our net revenue in 2024, either directly or to distributors, was destined for end-users in the e-commerce sectors, whose businesses frequently follow traditional retail seasonal trends, including a concentration of sales in the holiday period in the fourth quarter.
In 2023, approximately 89% of our net revenue was derived from sales to our distributors. End-Users. In addition, we sell our PPS systems and Automation products directly to certain select end-users. Our end-users vary in size from extremely small specialty manufacturers or retailers to some of the largest global e-commerce companies.
In 2024, approximately 79% of our total net revenue was derived from sales to our distributors. End-Users. In addition, we sell our PPS systems and Automation products directly to certain select end-users. Our end-users vary in size from extremely small specialty manufacturers or retailers to some of the largest global e-commerce companies.
Our Automation products represented only 6.1% of our net revenue in 2023, however, following development through acquisitions and organic growth, we believe it will serve as a platform for expansion to better serve end-users with higher volume requirements and more sophisticated end-of-line needs.
Our Automation products represented only 8% of our net revenue in 2024, however, following development through acquisitions and organic growth, we believe it will serve as a platform for expansion to better serve end-users with higher volume requirements and more sophisticated end-of-line needs.
Higher demand for advanced machines spurs increased spending on tools and robotics while higher demand for housing, infrastructure and commercial buildings benefits the tools and construction supplies sectors. Sales to industrial manufacturing end-users accounted for approximately 12.6% of our net revenue in 2023. Automotive Aftermarket .
Higher demand for advanced machines spurs increased spending on tools and robotics while higher demand for housing, infrastructure and commercial buildings benefits the tools and construction supplies sectors. Sales to industrial manufacturing end-users accounted for approximately 11% of our net revenue in 2024. Automotive Aftermarket .
We sell the vast majority of our paper packaging materials to an established network of approximately 300 distributors worldwide which, in turn, store, market and sell our products, including bundles and rolls, to end-users.
Our Distribution Model Distributors. We sell the vast majority of our paper packaging materials to an established network of over 300 distributors worldwide which, in turn, store, market and sell our products, including bundles and rolls, to end-users.
Most 7 commonly, our e-commerce end-users purchase our Void-Fill solutions, but many also use our Automation, Wrapping, and Cushioning systems. Sales to our e-commerce end-users, directly and through distributors accounted for approximately 30% of our net revenue in 2023. Industrial Manufacturing.
Most commonly, our e-commerce end-users purchase our Void-Fill solutions, but many also use our Automation, Wrapping, and Cushioning systems. Sales to our e-commerce end-users, directly and through distributors accounted for approximately 37% of our net revenue in 2024. Industrial Manufacturing.
Our packaging solutions are typically designed to integrate into these end-users’ existing industrial processes for the production and distribution of automotive parts. Sales to our automotive after-market end-users accounted for approximately 9.0% of our net revenue in 2023. Electronics .
Our packaging solutions are typically designed to integrate into these end-users’ existing industrial processes for the production and distribution of automotive parts. Sales to our automotive after-market end-users accounted for approximately 8% of our net revenue in 2024. Electronics .
These systems allow our end-users to both reduce their void-fill needs and optimize their logistics costs with smaller boxes while reducing labor costs. • Machine Vision Solutions. Our machine vision solutions combine a modular software architecture with the capability to perform machine learning-based machine vision inspections on greyscale or color 2D images and 3D point clouds.
These systems allow our end-users to both reduce their dunnage needs and end of line labor costs while optimizing logistics costs with smaller boxes. • Machine Vision Solutions. Our machine vision solutions combine a modular software architecture with the capability to perform machine learning-based machine vision inspections on greyscale or color 2D images and 3D point clouds.
Governmental Regulation Federal, State, Local, and International Regulations We are required to comply with numerous laws and regulations covering areas such as workplace health and safety, data privacy and protection, labor and employment. We are also required to hold various permits to conduct our operations. We monitor changes in these laws to maintain compliance with applicable requirements.
Governmental Regulation Federal, State, Local, and International Regulations We are required to comply with numerous laws and regulations covering areas such as workplace health and safety, data privacy and protection, labor and employment. We monitor changes in these laws to maintain compliance with applicable requirements.
Through our extensive distributor network and select direct sales, we have approximately 141,200 installed systems serving over 36,000 end-users as of December 31, 2023. We have a full suite of paper-based PPS systems to meet the needs of diversified and growing end-user markets, from small businesses to global corporations.
Through our extensive distributor network and select direct sales, we have over 140,000 installed systems serving over 30,000 end-users as of December 31, 2024. We have a full suite of paper-based PPS systems to meet the needs of diversified and growing end-user markets, from small businesses to global corporations.
We believe that preference for environmentally sustainable packaging solutions will be a key driver of growth moving forward, particularly to the extent plastics and other resin-based solutions come under increasing public scrutiny. • Attractive Financial Profile . In 2023, we generated net revenue of $336.3 million.
We believe that preference for environmentally sustainable packaging solutions will be a key driver of growth moving forward, particularly to the extent plastics and other resin-based solutions come under increasing public scrutiny and regulatory pressure. • Attractive Financial Profile . In 2024, we generated net revenue of $368.9 million.
Our Wrapping products generated $36.0 million in revenue in 2023, which accounted for 10.7% of our net revenue. Geami revenue includes sale of tissue rolls in addition to kraft paper. We retain ownership of most of our PPS systems (other than certain disposable Wrapping systems and FillPak Manual).
Our Wrapping products generated $37.1 million in revenue in 2024, which accounted for 10% of our net revenue. Geami revenue includes sale of tissue rolls in addition to kraft paper. We retain ownership of most of our PPS systems (other than certain disposable Wrapping systems and FillPak Manual).
We intend to maintain and extend our technological leadership, expertise and our environmentally sustainable value proposition through continuous improvement of our product and service offerings to bolster speed, improve 6 efficacy, and decrease packing footprint, as well as by introducing new products that deliver the environmentally friendly solutions customers require for their business needs. • Pursue targeted growth opportunities .
We intend to maintain and extend our technological leadership, expertise and our environmentally sustainable value proposition through continuous improvement of our product and service offerings to bolster speed, improve efficacy, and decrease packing footprint, as well as by introducing new products that deliver the environmentally friendly solutions customers require for their business needs. • Grow via partnerships and acquisitions .
Our PPS systems predominantly use kraft paper of varying weights, sizes, and configurations. Our Automation Products Our AS systems are comprised of configurable automation machines that fulfill the needs of end-of-line packaging automation for product distribution and shipping. We utilize a right-sizing technique that optimizes the size of corrugated boxes to fit the contents being shipped.
Our Automation Products Our AS products are comprised of configurable automated systems that fulfill the needs of end-of-line packaging automation for product distribution and shipping. We utilize a right-sizing technique that optimizes the size of corrugated boxes to fit the contents being shipped.
We will continue to focus on offering innovative solutions that enable our end-users to meet their sustainability needs while growing their business, reducing their costs and mitigating the risks associated with ineffective and/or unreliable end-of-line systems.
In order to achieve these goals, we are focused on the following strategic priorities: • Grow organically . We will continue to focus on offering innovative solutions that enable our end-users to meet their sustainability needs while growing their business, reducing their costs and mitigating the risks associated with ineffective and/or unreliable end-of-line systems.
Most importantly, we, either directly or with our distributors, work with end-users to examine their end-of-line operations to maximize throughput, minimize cost and reduce breakage. • Unique Approach to Automation.
We, either directly or with our distributors, work 4 Table of Contents with end-users to examine their end-of-line operations to maximize throughput, minimize cost and reduce breakage.
Our paper packaging materials contain little or no plastic or other resin-based inputs. Additionally, a majority of our paper packaging materials are manufactured from entirely or partially recycled content.
Our paper packaging materials are fiber-based, biodegradable, renewable, and curb-side recyclable to customers. Our paper packaging materials contain little or no plastic or other resin-based inputs. Additionally, a majority of our paper packaging materials are manufactured from entirely or partially recycled content.
Direct sales to end-users accounted for approximately 11% of our net revenue in 2023. Our Strategy Our strategy for adding to our customer base includes investing in innovation, our sales force and distributor relationships across all end markets as well as expanding geographically.
Our Strategy Our strategy for adding to our customer base includes investing in innovation, our sales force and distributor relationships across all end markets as well as expanding geographically.
However, in all cases, our current business model for our Automation product line involves the direct or indirect sale of highly customized systems, designed on the basis of our consultancy and product engineering expertise.
However, in all cases, our current business model for our Automation product line involves the direct or indirect sale of highly customized systems, designed on the basis of our consultancy and product engineering expertise. We have enhanced our Automation offering to include more digital tools to increase the benefits of our solutions.
In 2023, we purchased paper from approximately 25 paper suppliers and our largest single source of paper supplies sold us approximately 64% and 26.5% of the paper supplies purchased in North America and globally, respectively.
In 2024, we purchased paper from approximately 27 paper suppliers, and our largest single source of paper supplies sold us approximately 73% and 39% of the paper supplies purchased in North America and globally, respectively.
Our revenues are geographically diverse, with approximately 41% of our 2023 net revenue generated from end-users in North America, approximately 51% generated from end-users in Europe, and approximately 8% generated from end-users in Asia and other locations.
Our revenues are geographically diverse, with approximately 44% of our 2024 net revenue generated in North America, approximately 48% generated in Europe, and approximately 8% generated in Asia and other locations.
We sell our Cushioning products under the brand name PadPak ® and offer a variety of PadPak units. We have an installed base of approximately 34,800 PadPak units as of December 31, 2023. Our Cushioning products generated $145.8 million in revenue in 2023 and accounted for 43.4% of our net revenue. • Wrapping .
We sell our Cushioning products under the brand name PadPak ® and offer a variety of PadPak units. We have an installed base of approximately 6 Table of Contents 34,400 PadPak units as of December 31, 2024. Our Cushioning products generated $135.7 million in revenue in 2024 and accounted for 37% of our total net revenue. • Wrapping .
These end-users include leading e-Commerce companies, as well as suppliers and sellers of automotive after-market parts, information technology (“IT”)/electronics, machinery, home goods, industrial, warehousing/transport services, healthcare, and other products. • Well Established, Long-Term Distributor Relationships .
These end-users include leading e-commerce companies, as well as suppliers and sellers of automotive after-market parts, information technology (“IT”)/electronics, machinery, home goods, industrial, warehousing/transport services, healthcare, and other products. • Well Established, Long-Term Distributor Relationships . We have arrangements with over 300 distributors globally, which enable us to reach thousands of small and medium-sized end-users.
We also believe there are significant opportunities to increase penetration across end markets. We aim to grow beyond our current PPS systems by expanding our existing Wrapping, Automation and Retail and Consumables offerings into new end-markets.
We aim to grow beyond our current PPS systems by expanding our existing Wrapping, Automation and Consumables offerings into new end-markets.
We have an installed base of approximately 83,700 FillPak units as of December 31, 2023. Our Void-Fill products generated $133.9 million in revenue in 2023, accounting for 39.8% of our net revenue. • Cushioning .
We have an installed base of approximately 85,700 FillPak units as of December 31, 2024. Our Void-Fill products generated $167.0 million in revenue in 2024, accounting for 45% of our total net revenue. • Cushioning .
For example, the APAC region has a large, well-developed parcel shipping business, but currently represents less than 10% of our net revenue in 2023. We believe that the new Malaysia facility can strengthen our performance in the APAC region.
We also believe there are significant opportunities to increase penetration across end markets and existing geographies. For example, the APAC region has a large, well-developed parcel shipping business, but currently represents less than 10% of our net revenue in 2024. We believe that the new Malaysia facility can strengthen our performance in the APAC region.
We believe our Automation products provide us with an opportunity to increase our penetration with existing customers and broaden our customer base to include business segments that we have not historically served. We will also continue to identify additional product and service opportunities for our current and future end-user markets.
We believe our Automation products provide us with an opportunity to increase our penetration with existing customers and broaden our customer base to include business segments that we have not historically served.
As the market for our Automation products is rapidly evolving, we have extended our Automation services to offer extended service warranties beyond the initial warranty period, packaging line solutions, and the sale of spare parts. Our Distribution Model Distributors.
As the market for our Automation products is rapidly evolving, we have extended our Automation services to offer data subscriptions, extended service warranties beyond the initial warranty period, packaging line solutions, and the sale of spare parts and consumables. Our Automation products generated $29.1 million in revenue in 2024, which accounted for 8% of our net revenue.
We continue to innovate and advance that competitive advantage and file numerous U.S. and foreign patent applications each year. We are also vigilant in protecting our intellectual property, by monitoring competitor activity, providing notice to potential infringers, and bringing litigation whenever and wherever necessary and appropriate.
We are also vigilant in protecting our intellectual property, by monitoring competitor activity, providing notice to potential infringers, and bringing litigation whenever and wherever necessary and appropriate.
Widespread product innovation combined with an expanding working population, a corresponding growth in household formation and disposable incomes are key factors contributing to the growth of the global consumer electronics market. Thriving demand for smartphones across the globe and the miniaturization of electronic devices are additional factors boosting growth in the global consumer electronics market.
Widespread product innovation combined with an expanding working population, a corresponding growth in household formation and disposable incomes are key factors contributing to the growth of the global consumer electronics market. We believe this demand for electronics will continue to grow as innovation drives increased demand for the latest electronics hardware.
Our primary competitors include Sealed Air Protective Division, Pregis (FP International/Easypack), Intertape Polymer Group (IPG), Storopack and Sprick. Most competing manufacturers offer multi-substrate solutions including foam, loose-fill, plastic air pillows, and plastic bubble wrap in addition to a fiber-based offering.
Most competing manufacturers offer multi-substrate solutions including foam, loose-fill, plastic air pillows, and plastic bubble wrap in addition to a fiber-based offering.
Approximately 30% of our net revenue is derived from sales to e-commerce end-users. While growth slowed in 2022 and 2023, we continue to believe that global investment in e-commerce provides a significant opportunity for us. • Focus on Sustainability . Additionally, we believe both our end-users and consumers, generally, are demonstrating an increasing preference for environmentally sustainable solutions.
Approximately 37% of our net revenue is derived from sales to e-commerce end-users. We continue to believe that global investment in e-commerce provides a significant opportunity for us as e-commerce continues to grow and outpaces growth in retail sales. • Focus on Sustainability .
We believe the Malaysia facility can improve our ability to serve customers in the region by shortening lead times as well as provide a more attractive cost profile to the APAC market than we have historically been able to offer. Combined with the localized presence and connection to Southeast Asia, we believe the Malaysia facility can bring favorable growth opportunities.
We have recently established a full-service paper conversion facility in Malaysia, which became operational in the second half of 2024. We believe the Malaysia facility can improve our ability to serve customers in the region by shortening lead times as well as provide a more attractive cost profile to the APAC market than we have historically been able to offer.
Other . Our end-users also operate in many other industries, including Warehousing (approximately 7.0% of net revenue in 2023), Home Furnishings (approximately 4.8%), Food and Beverage (approximately 2.8%), Printing and Business Services (approximately 2.6%), and other various industries (17.4%). Our Paper Suppliers We purchase kraft paper from various suppliers for conversion into the paper consumables we sell.
Other . Our end-users also operate in many other industries, including Warehousing (approximately 6% of net revenue in 2024), Home Furnishings (approximately 4%), Food and Beverage (approximately 3%), medical supplies (approximately 2%), Printing and Business Services (approximately 2%), and other various industries (14%).
Use of other suppliers’ paper on our PPS systems increases the likelihood of negative operating consequences, such as jamming, ineffective yield, and/or other performance deficiencies. We retain ownership of most of our PPS systems. This business model is designed to generate attractive margins that are recurring in nature through the sale of our paper consumables.
Use of other suppliers’ paper on our PPS systems increases the likelihood of negative operating consequences, such as jamming, ineffective yield, and/or other performance deficiencies. We retain ownership of most of our PPS systems and require end users to use our paper consumables exclusively with our owned systems. • Environmentally Sustainable Product Portfolio .
We seek to enhance our position as a leading global provider of innovative sustainable packaging solutions that our customers rely on to improve performance, cost competitiveness and automation to enhance productivity within their operations. In order to achieve these goals, we are focused on the following strategic priorities. • Grow organically .
Combined with the localized presence and connection to Southeast Asia, we believe the Malaysia facility can bring favorable growth opportunities. We seek to enhance our position as a leading global provider of innovative sustainable packaging solutions that our customers rely on to improve performance, cost competitiveness and automation to enhance productivity within their operations.
The protective packaging industry is characterized by a diversity of applications and end markets, within both the industrial and consumer segments. Historically, growth in the protective packaging industry has been positively impacted by trends such as expedited delivery of individualized packages, globalization of the supply chain, and increased focus on efficiency and reduced shipping costs.
Historically, growth in the protective packaging industry has been positively impacted by trends such as expedited delivery of individualized packages, globalization of the supply chain, and increased focus on efficiency and reduced shipping costs. As national and local governments continue to legislate for consumer recycling requirements, we anticipate an increase in market demand for our products.
While the cost of paper supplies is our largest input cost, we typically negotiate supply and pricing arrangements with most of our paper suppliers annually, many of which we have long-standing relationships with, which helps us mitigate shorter term fluctuations in paper cost.
We typically negotiate supply and pricing arrangements with most of our paper suppliers quarterly or semi-annually, many of which we have long-standing relationships with, which helps us mitigate shorter term fluctuations in paper cost. Our Competition We compete with companies producing competing products that are well-established, have significant scale, and have a broad product offering.
We believe that these increasing preferences in favor of environmental sustainability will also be a significant driver of our continued growth. We believe our investments in paper innovations help close the price gap for sustainable solutions and provide an important tailwind for continued growth. • Demand for Automation and Machine Vision .
Additionally, we believe both our end-users and consumers, generally, are demonstrating an increasing preference for environmentally sustainable solutions. We believe that these increasing preferences in favor of environmental sustainability will also be a significant driver of our continued growth.
Our Automation and Machine Vision product lines provide significant improvements to end-of-line packaging speed and lower labor costs for many high-volume businesses.
We believe our investments in paper innovations help close the price gap for sustainable solutions and provide an important tailwind for continued growth. • Demand for Automation and Machine Vision . Our Automation and Machine Vision product lines provide significant improvements to end-of-line packaging speed, lower labor costs, and valuable data and statistics on end-of-line performance for many high-volume businesses.
Additionally, we developed robust anti-bias training to ensure that every potential candidate is given a fair and merit-based evaluation of their skills. We strive to maintain an active dialogue with our employees and provide employees a comprehensive benefits package including competitive wages, medical, life, and accident insurance, incentive bonus programs, and a 401(k) plan with an employer matching contribution.
We strive to maintain an active dialogue with our employees and provide employees a comprehensive benefits package including competitive wages, medical, life, and accident insurance, incentive bonus programs, and a 401(k) plan with an employer matching contribution. We have departmental budgets set aside for training and also provide a tuition reimbursement program for employees seeking bachelors or masters degrees.
Our consumables ship in bulk, which is efficient for customers in shipping and require less storage space than many competing products. We convert the vast majority of raw paper to create rolls and bundles of paper that integrate with our PPS systems and into direct or consumable products.
Our Paper Suppliers We convert the vast majority of raw paper to create rolls and bundles of paper that integrate with our PPS systems and into direct or consumable products. Our PPS systems predominately use kraft paper of varying weights, sizes, and configurations. We purchase kraft paper from various suppliers for conversion into the paper consumables we sell.
Our Competition 8 We compete with companies producing competing products that are well-established, have significant scale, and have a broad product offering. There are other manufacturers of protective packaging products, some of which are companies offering similar products that operate across regions and others that operate in a single region or single country.
There are other manufacturers of protective packaging products, some of which are companies offering similar products that operate across regions and others that operate in a single region or single country. Our primary competitors include Sealed Air Protective Division, Pregis (FP International/Easypack), Intertape Polymer Group (IPG), Storopack and Sprick.
We are pursuing expansion of our customer base in several ways. We have a global sales organization that works hand-in-hand with the sales representatives of our distributors to introduce our products and services to potential accounts. Our broad product portfolio allows us to serve any type of business with protective packaging needs across all end markets.
Our broad product portfolio allows us to serve any type of business with protective packaging needs across all end markets.
For each product, we set targets for minimum annual paper consumption in order to justify the capital deployed to that account. Accordingly, our sales team, in conjunction with our distributors, help end-users select which products meet their specific needs based on their own volume requirements and business objectives.
For each product, we set targets for minimum annual paper consumption in order to justify the capital deployed to that account.
We hold over 684 U.S. and foreign patents and patent applications directed to various innovations related to our business, as well as more than 241 U.S. and foreign trademark registrations and trademark applications that protect our branding. • Focus on Talent and Leadership : We have assembled a strong international team of talented, motivated, inclusive, and diverse employees to maintain our leadership in the industry, drive our growth and to achieve our strategic objectives.
We hold over 880 U.S. and foreign patents and patent applications directed to various innovations related to our business, as well as more than 300 U.S. and foreign trademark registrations and trademark applications that protect our branding. Our PPS Products Our PPS products are designed to be flexible and responsive to the needs of our end-users.
These solutions offer end-users numerous benefits including the reduction of shipping costs, waste, and labor, resulting in improved efficiency. • Multiple Drivers of Growth . We believe that our business benefits from multiple factors that will drive our future growth: • Growth of E-commerce . E-commerce is a significant growth driver in our business.
They also provide data on throughput, error rates, and processed versus rejected packages to identity areas for improved efficiencies. • Multiple Drivers of Growth . We believe that our business benefits from multiple factors that will drive our future growth: • Growth of E-commerce . E-commerce is a significant growth driver in our business.
We do not set minimum annual paper consumption targets for the disposable units, as the full production cost and margin associated with the dispenser is covered with each sale. 4 Included within our Wrapping systems are our Cold Chain products, which are used to provide insulation for goods that require temperatures to be controlled during transport.
Included within our Wrapping systems are our Cold Chain products, which are used to provide insulation for goods that require temperatures to be controlled during transport. We have an installed base of approximately 22,600 Wrapping units, which were predominantly Geami converter units, as of December 31, 2024.
As a Charter Pledge Partner, we acknowledge that we already have diversity in our boardroom and pledge to use our resources to accelerate change within other companies. We utilize interview guides in our hiring processes to help identify different competencies, such as diversity, equity, and inclusion competencies, to ensure that new hires are developed in these areas.
We utilize interview guides in our hiring processes to help identify different competencies and to ensure that new hires are developed in these areas. Additionally, we developed robust training to ensure that every potential candidate is given a fair and merit-based evaluation of their skills.
We work hand-in-hand with our distributors or, on a selective basis, directly with some end-users to ensure that end-users obtain a solution that meets their specific needs, whether that be a single unit for a low volume end-user or a highly-customized base of hundreds of units across multiple facilities for a high-volume end-user. 2 Furthermore, through our distributors, we strive to ensure that our end-users are consistently supplied with our paper consumables on-time and that their PPS systems are running with minimal downtime.
Given our comprehensive solution offering and distribution network, we are able to provide solutions that meet the needs of a broad spectrum of end-users from a single unit for a low volume end-user or a highly-customized base of hundreds of units across multiple facilities for a high-volume end-user. • Unique Approach to Automation.
As of December 31, 2023, we had approximately 800 full time employees worldwide, approximately 330 of whom were located in the United States. We have approximately 150 of our employees located in Europe who are covered by collective bargaining agreements. Our Intellectual Property 9 Our intellectual property provides a strong competitive advantage.
A disruption in operations or higher ongoing labor costs could materially adversely affect our business, financial condition or results of operations. As of December 31, 2024, we had over 800 full time employees worldwide, approximately 300 of whom were located in the United States.
Our business is global, with a strong presence in the U.S. and Europe along with an expanding footprint in Asia. End-users rely on our paper consumables for use exclusively with our installed base of systems. • Environmentally Sustainable Product Portfolio . Our paper packaging materials are fiber-based, biodegradable, renewable, and curb-side recyclable to customers.
Our business is global, with a strong presence in the U.S. and Europe along with an expanding footprint in Asia enabling us to serve multi-national customers across more than 50 countries. • Distinct Business Model .
Removed
We have arrangements with approximately 300 distributors globally, which enable us to reach thousands of small and medium-sized end-users while maintaining an asset-light capital base and a lean sales force.
Added
Ranpak provides a comprehensive suite of environmentally friendly end-of-line Protective Packaging, Automation, and Cold Chain solutions. Ranpak believes its ability to provide a broad array of value-added solutions to global customers is a key differentiator compared to our Protective Packaging competition and enables Ranpak to have deeper relationships with its end customers.
Removed
We believe the retail channel provides a substantial opportunity for consumable versions of our existing Wrapping product line. We also believe significant opportunity exists to sell environmentally friendly packaging alternatives directly to consumers. • Continued Product Development and Innovation .
Added
Our machine vision solutions provide customers with insights into their business such as data on void-levels for compliance checks and improved packaging. These solutions offer end-users numerous benefits including the reduction of shipping costs, waste, and labor, resulting in improved efficiency.
Removed
We have implemented a focused talent acquisition and development strategy to ensure our teams continue to have the right skills to execute our strategy on a global basis. Our PPS Products Our PPS products are designed to be flexible and responsive to the needs of our end-users.
Added
We believe there is a substantial opportunity to expand our consumable offering through environmentally friendly alternatives to traditional plastic mailers, such as Ranpak’s eco-friendly padded mailers. 5 Table of Contents • Continued Product Development and Innovation .
Removed
We also offer the Geami combination of die-cut and tissue in a disposable cardboard dispenser as well as in a Geami-based offering to be sold directly to consumers without a dispenser in retail stores under the brand name ReadyRoll.
Added
Our recent innovations include: • The Cut’t!™ EVO Multi-Lid provides the ability to combine a universal box with different lids, so that a single packaging line process boxes with different visual appearances. • The DecisionTower™ applies a unique combination of 2D and 3D AI-supported computer vision technology for a variety of insightful tasks, including quality control, order insights, and precision void-filling and measurement. • Ranpak Precube’it!™ is used in conjunction with Ranpak’s Automation solutions, and uses historical site order data to simulate machine utilization and box fill rates for future scenarios, amongst its other capabilities.
Removed
Additionally, we further expanded our Cold Chain products with the 2021 acquisition of Recycold Cool Solutions B.V. (“Recycold”), the manufacturer of Recycold Cool Packs, which are sustainable cool packs made from a biodegradable, plant-based gel. We have an installed base of approximately 22,700 Wrapping units, which were predominantly Geami converter units, as of December 31, 2023.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeSome of the more significant risks relating to our business include: • We may be unable to secure a sufficient supply of paper to meet our production requirements given the limited number of suppliers that produce paper suitable for our products. • Adverse changes in production input costs, such as labor, energy, and freight costs may negatively impact our results of operations, including our profit margins, and financial condition. • Variability in kraft paper pricing may cause volatility in, or may negatively impact, our results of operations, including our profit margins, and financial condition. 10 • If significant tariffs or other restrictions are placed on the import of Chinese goods, or if China places tariffs or other restrictions on the import of U.S. goods, our business, financial condition or results of operations may be materially adversely affected. • We rely on third-party distributors to store, sell, market, service and distribute our products. • Our level of outstanding indebtedness could adversely affect our financial condition and ability to fulfill our obligations. • Certain of our stockholders, including JS Capital, own a significant portion of the outstanding voting stock of the Company. • The price for our securities may be volatile. • We rely on third-party suppliers to provide both the components used in our protective packaging systems as well as certain fully assembled protective packaging systems. • Unfavorable customer or consumer responses to price increases could have a material adverse impact on our business, results of operations and financial condition. • Our efforts to expand beyond our core product offerings and into adjacent markets may not succeed and could adversely impact our business, financial condition or results of operations. • The global nature of our operations exposes us to numerous risks that could materially adversely affect our financial condition or results of operations. • We face risks related to economic, competitive, and market conditions generally, including macroeconomic uncertainty, the impact of inflation, and geopolitical conflicts and other social and political unrest or change. • Fluctuations between foreign currencies and USD could materially impact our consolidated financial condition or results of operations. • We are subject to a variety of evolving environmental, governmental, and product registration laws and regulations that expose us to potential financial liability and increased operating costs. • If we are not able to protect or maintain our trademarks, patents and other intellectual property, we may not be able to prevent competitors from developing similar products or from marketing their products in a manner that capitalizes on our trademarks, and this loss of a competitive advantage may have a material adverse effect on our business, financial position or results of operations. • Our insurance policies may not cover all operating risks and a casualty loss beyond the limits of our coverage could adversely impact our business. • Our annual effective income tax rate can change materially as a result of changes in our mix of U.S. and foreign earnings and other factors, including changes in tax laws and changes made by regulatory authorities. • The full realization of our deferred tax assets may be affected by a number of factors. • We are subject to taxation in multiple jurisdictions.
Biggest changeSome of the more significant risks relating to our business include: • We may be unable to secure a sufficient supply of paper to meet our production requirements given the limited number of suppliers that produce paper suitable for our products. • Adverse changes in input costs, such as kraft paper, may negatively impact us. • Our business is exposed to risks associated with our reliance on third-party suppliers to provide both the components used in our PPS systems as well as certain fully assembled PPS systems. • Demand for our products could be adversely affected by changes in end-user or consumer preferences. • The loss of end-users, particularly our e-commerce end-users, or a reduction in their production requirements, could have a significant adverse impact. • Our investments in R&D may not yield the results expected. • The global nature of our operations exposes us to numerous risks. • A major loss of or disruption in our assembly and distribution operations could adversely affect us. • Fluctuations between foreign currencies and USD could materially impact us. • We could experience disruptions in operations and/or increased labor costs. • If significant tariffs or other restrictions are placed on the import of Chinese goods, if China places tariffs or other restrictions on the import of U.S. goods, or if relations between China and the U.S. were to deteriorate as a result of tensions in the South China Sea, with respect to Taiwan or otherwise, we may be materially adversely affected. • We are subject to taxation in multiple jurisdictions.
Impairment may result from, among other things, (i) 25 a decrease in our expected net earnings; (ii) adverse equity market conditions; (iii) a decline in current market multiples; (iv) a decline in our common stock price; (v) a significant adverse change in legal factors or business climates; (vi) heightened competition; (vii) strategic decisions made in response to economic or competitive conditions; or (viii) a more- likely-than-not expectation that a reporting unit or a significant portion of a reporting unit will be sold or disposed of.
Impairment may result from, among other things, (i) a decrease in our expected net earnings; (ii) adverse equity market conditions; (iii) a decline in current market multiples; (iv) a decline in our common stock price; (v) a significant adverse change in legal factors or business climates; (vi) heightened competition; (vii) strategic decisions made in response to economic or competitive conditions; or (viii) a more- likely-than-not expectation that a reporting unit or a significant portion of a reporting unit will be sold or disposed of.
Noncompliance with these laws could subject us to whistleblower complaints, investigations, sanctions, settlements, 17 prosecution, other enforcement actions, disgorgement of profits, significant fines, damages, other civil and criminal penalties or injunctions, suspension and debarment from contracting with certain governments or other persons, the loss of export privileges, reputational harm, adverse media coverage, and other collateral consequences.
Noncompliance with these laws could subject us to whistleblower complaints, investigations, sanctions, settlements, prosecution, other enforcement actions, disgorgement of profits, significant fines, damages, other civil and criminal penalties or injunctions, suspension and debarment from contracting with certain governments or other persons, the loss of export privileges, reputational harm, adverse media coverage, and other collateral consequences.
In order to continue listing our securities on the NYSE, we must maintain certain financial, distribution and share price levels. If the NYSE delists our securities from trading on its exchange and we are not able to list our securities on another national securities exchange, we 19 expect our securities could be quoted on an over-the-counter market.
In order to continue listing our securities on the NYSE, we must maintain certain financial, distribution and share price levels. If the NYSE delists our securities from trading on its exchange and we are not able to list our securities on another national securities exchange, we expect our securities could be quoted on an over-the-counter market.
Foreign exchange rates can also impact the competitiveness of products 14 produced in certain jurisdictions and exported for sale into other jurisdictions. These changes may impact the value received for the sale of our goods versus those of our competitors.
Foreign exchange rates can also impact the competitiveness of products produced in certain jurisdictions and exported for sale into other jurisdictions. These changes may impact the value received for the sale of our goods versus those of our competitors.
Risks Related to Our Business 11 We may be unable to secure a sufficient supply of paper to meet our production requirements given the limited number of suppliers that produce paper suitable for our products.
Risks Related to Our Business We may be unable to secure a sufficient supply of paper to meet our production requirements given the limited number of suppliers that produce paper suitable for our products.
At the state level, in 2023 California enacted legislation that will ultimately require certain companies that do business in California to publicly disclose their Scopes 1, 2 and 3 greenhouse gas emissions, with third-party assurance of such data, and issue public reports on their climate-related financial risk and related mitigation measures; and requires companies that operate in California and make certain climate-related claims to provide enhanced disclosures around the achievement of such claims.
In the United States, at the state level, in 2023 California enacted legislation that will ultimately require certain companies that do business in California to publicly disclose their Scopes 1, 2 and 3 greenhouse gas emissions, with third-party assurance of such data, and issue public reports on their climate-related financial risk and related mitigation measures; and requires companies that operate in California and make certain climate-related claims to provide enhanced disclosures around the achievement of such claims.
Risks inherent in our international operations include: • foreign currency exchange controls and tax rates, and exchange rate fluctuations, including devaluations; • the potential for changes in regional and local economic conditions, including regional or local inflationary pressures and/or regional or local energy disruptions or price increases; • laws and regulations governing foreign investment, foreign trade and currency exchange, such as those on transfer or repatriation of funds, which may affect our ability to repatriate cash as dividends or otherwise and may limit our ability to convert foreign cash flows into USD; • restrictive governmental actions such as those on trade protection matters, including antidumping duties, tariffs, embargoes and prohibitions or restrictions on acquisitions or joint ventures; • burdens and risks of complying with a number and variety of foreign laws and regulations, including the U.S.
Risks inherent in our international operations include: • foreign currency exchange controls and tax rates, and exchange rate fluctuations, including devaluations; • the potential for changes in regional and local economic conditions, including regional or local inflationary pressures and/or regional or local energy disruptions or price increases; 16 Table of Contents • laws and regulations governing foreign investment, foreign trade and currency exchange, such as those on transfer or repatriation of funds, which may affect our ability to repatriate cash as dividends or otherwise and may limit our ability to convert foreign cash flows into USD; • restrictive governmental actions such as those on trade protection matters, including antidumping duties, tariffs, embargoes and prohibitions or restrictions on acquisitions or joint ventures; • burdens and risks of complying with a number and variety of foreign laws and regulations, including the U.S.
Economic uncertainty in some of the 13 geographic regions in which we operate, including developing regions, could result in the disruption of commerce and negatively impact our cash flows or operations in those areas.
Economic uncertainty in some of the geographic regions in which we operate, including developing regions, could result in the disruption of commerce and negatively impact our cash flows or operations in those areas.
For example, at most of our facilities, quantities of raw paper stored on-site represent approximately five days of paper consumables production at such facilities due to cost savings and storage limitations. In addition, if any of these third parties were to cease operations or cease doing business with us, it might be unable to replace them at reasonable cost.
For example, at most of our facilities, quantities of raw paper stored on-site represent approximately five days of paper consumables production at such facilities due to cost savings and storage limitations. In addition, if any of these third parties were to cease operations or cease doing business with us, we might be unable to replace them at reasonable cost.
Although we have developed and have taken steps to implement plans to remediate the material weaknesses that led to the ineffectiveness of our internal control over financial reporting at December 31, 2022, there can be no assurance as to when our remediation plan related to our 2023 material weaknesses will be fully developed, when we will be able to fully implement it or the cost of such implementation.
Although we have developed and have taken steps to implement plans to remediate the material weaknesses that led to the ineffectiveness of our internal control over financial reporting at December 31, 2023, there can be no assurance as to when our remediation plan related to our 2024 material weaknesses will be fully developed, when we will be able to fully implement it or the cost of such implementation.
We cannot guarantee that our current ESG practices will meet future regulatory requirements, reporting frameworks, or best practices, increasing the risk of related enforcement, and compliance with new requirements may lead to increased management burden and related costs. Many jurisdictions require us to have operating permits for our assembly and warehouse facilities and operations.
We cannot guarantee that our practices will meet future regulatory requirements, reporting frameworks, or best practices, increasing the risk of related enforcement, and compliance with new requirements may lead to increased management burden and related costs. Many jurisdictions require us to have operating permits for our assembly and warehouse facilities and operations.
If this were to occur, we could face significant material adverse consequences, including: • a limited availability of market quotations for our securities; • reduced liquidity for our securities; • a determination that our Class A common stock is a “penny stock” which will require brokers trading in our Class A common stock to adhere to more stringent rules and possibly result in a reduced level of trading activity in the secondary trading market for our securities; • a limited amount of news and analyst coverage; and • a decreased ability to issue additional securities or obtain additional financing in the future.
If this were to occur, we could face significant material adverse consequences, including: • a limited availability of market quotations for our securities; 22 Table of Contents • reduced liquidity for our securities; • a determination that our Class A common stock is a “penny stock” which will require brokers trading in our Class A common stock to adhere to more stringent rules and possibly result in a reduced level of trading activity in the secondary trading market for our securities; • a limited amount of news and analyst coverage; and • a decreased ability to issue additional securities or obtain additional financing in the future.
Further, new and emerging regulatory initiatives in the U.S., European Union (“EU”) and the U.K. related to climate change and ESG could adversely affect our business, including initiatives and regulations deriving from the European Sustainability Reporting Standards promulgated by the EU in July 2023, under the EU’s Corporate Sustainability Reporting Directive (“CSRD”), which will require that we make certain disclosures in 2026 relating to our ESG impacts, risks and opportunities for fiscal year 2025.
Further, new and emerging regulatory initiatives in the U.S., European Union (“EU”) and the U.K. related to climate change and ESG could adversely affect our business, including initiatives and regulations deriving from the European 18 Table of Contents Sustainability Reporting Standards promulgated by the EU in July 2023, under the EU’s Corporate Sustainability Reporting Directive (“CSRD”), which will require that we make certain disclosures in 2026 relating to our ESG impacts, risks and opportunities for fiscal year 2025.
Controls and Procedures .” As a result of these material weaknesses, our management concluded that our internal control over financial reporting and our disclosure controls and procedures were ineffective at December 31, 2023.
Controls and Procedures .” As a result of these material weaknesses, our management concluded that our internal control over financial reporting and our disclosure controls and procedures were ineffective at December 31, 2024.
We test goodwill and intangible assets with indefinite useful lives for possible impairment annually during the fourth quarter of each fiscal year or more frequently if events or changes in circumstances indicate that the asset might be impaired.
We test goodwill and intangible assets with indefinite useful lives for possible 28 Table of Contents impairment annually during the fourth quarter of each fiscal year or more frequently if events or changes in circumstances indicate that the asset might be impaired.
Moreover, the implementation of our new ERP negatively impacted our internal control over 23 financial reporting leading management to conclude that our internal control over financial reporting and our disclosure controls and procedures were ineffective at December 31, 2022. As disclosed in “ Item 9A.
Moreover, the implementation of our new ERP negatively impacted our internal control over financial reporting leading management to conclude that our internal control over financial reporting and our disclosure controls and procedures were ineffective at December 31, 2023. As disclosed in “ Item 9A.
If WestRock or one of our other major suppliers of paper in any of the markets in which we operate, fails or experiences an interruption or delay in service, there may be short-term or long-term disruption in our ability to secure paper from qualified sources and we may not have enough inventory to maintain our production schedule or continue to provide paper consumables to our distributors and end-users on a timely basis, or at all.
If Smurfit or one of our other major suppliers of paper in any of the markets in which we operate, fails or experiences an interruption or delay in service, there may be short-term or long-term disruption in our ability to secure paper from qualified sources and we may not have enough inventory to maintain our production schedule or continue to 14 Table of Contents provide paper consumables to our distributors and end-users on a timely basis, or at all.
This increased awareness may result in more prescriptive reporting requirements, increased expectations with regards to transparency, and increased pressure to set targets and accountability with respect to meeting those targets. We have established and publicly disclosed targets and other commitments related to ESG matters.
This increased awareness may result in more prescriptive reporting requirements, increased expectations with regards to transparency, and increased pressure to set targets and accountability with respect to meeting those targets. We have established and publicly disclosed targets and other commitments related to climate and sustainability matters.
Failure to comply with any of the covenants in our existing or future financing agreements, including with respect to the senior secured credit facilities, could result in a default under those agreements and under other agreements containing cross-default provisions.
Failure to comply with any of the covenants in our existing or future financing agreements, including with respect to the senior secured credit facilities, could result in a default under those agreements and under other agreements containing 24 Table of Contents cross-default provisions.
In the course of its assessment of the effectiveness of our internal control over financial reporting as of December 31, 2023, our management identified material weaknesses in our internal control over financial reporting.
In the course of its assessment of the effectiveness of our internal control over financial reporting as of December 31, 2024, our management identified material weaknesses in our internal control over financial reporting.
If any of the analysts who may cover us change their recommendation regarding our stock adversely, or provide more favorable relative recommendations about our competitors, the price of our common stock would likely decline.
If any of the analysts who may cover us change their recommendation regarding our stock adversely, or provide more favorable relative recommendations about our 23 Table of Contents competitors, the price of our common stock would likely decline.
For example, we could encounter difficulties in attracting new end-users due to lower levels of familiarity with our brand among potential distributor partners and end-users in markets we do not 22 currently serve and customer acceptance of our products is not guaranteed.
For example, we could encounter difficulties in attracting new end-users due to lower levels of familiarity with our brand among potential distributor partners and end-users in 25 Table of Contents markets we do not currently serve and customer acceptance of our products is not guaranteed.
The global nature of our operations exposes us to numerous risks that could materially adversely affect our financial condition or results of operations. We maintain production facilities in three countries and territories, and our products are distributed to approximately 54 countries and territories around the world.
The global nature of our operations exposes us to numerous risks that could materially adversely affect our financial condition or results of operations. We maintain production facilities in three countries and territories, and our products are distributed to over 50 countries and territories around the world.
ITEM 1A. R ISK FACTORS Summary Risk Factors Our business faces significant risks. In addition to the summary below, you should carefully review the “Risk Factors” section of this Report. We may be subject to additional risks and uncertainties not presently known to us or that we currently deem immaterial.
ITEM 1A. RISK FACTORS Summary Risk Factors Our business faces significant risks. In addition to the summary below, you should carefully review the “Risk Factors” section of this Report. We may be subject to additional risks and uncertainties not presently known to us or that we 12 Table of Contents currently deem immaterial.
As exchange rates vary, our results of operations and profitability may be harmed. We could experience disruptions in operations and/or increased labor costs.
As exchange rates vary, our results of operations and profitability may be harmed. 17 Table of Contents We could experience disruptions in operations and/or increased labor costs.
In addition, the implementation of the new ERP system affected operations, including scheduled downtime, processing and shipping inefficiencies, and the delay of pricing increases.
In addition, the implementation of the new ERP system affected operations, including scheduled 26 Table of Contents downtime, processing and shipping inefficiencies, and the delay of pricing increases.
A substantial portion of our operations are located outside of the United States and 59.0% of our 2023 revenue was generated outside of North America. These operations, particularly in developing regions, are subject to various risks that may not be present or as significant for our North American and European operations.
A substantial portion of our operations are located outside of the United States and 55.8% of our 2024 revenue was generated outside of North America. These operations, particularly in developing regions, are subject to various risks that may not be present or as significant for our North American and European operations.
We could also be required to recall possibly defective products, or voluntarily do so, which could result in adverse publicity and significant expenses and reduced net revenue.
We could also be required to recall possibly defective products, or voluntarily do so, 20 Table of Contents which could result in adverse publicity and significant expenses and reduced net revenue.
All of our ESG targets and commitments are subject to a variety of assumptions, risks and uncertainties, many of which are outside our control.
All of our climate and sustainability targets and commitments are subject to a variety of assumptions, risks and uncertainties, many of which are outside our control.
However, we might not be able to refinance our existing debt or obtain any such new or additional facilities on favorable terms or at all. Our debt financing may adversely affect our leverage and financial condition and thus negatively impact the value of our shareholders’ investment in us.
However, we might not be able to refinance our existing debt or obtain any such new or additional facilities on favorable terms or at all. Our debt financing may adversely affect our leverage and financial condition and thus negatively impact the value of our shareholders’ investment in us. We are a borrower under senior secured credit facilities.
These risks include, but are not limited to: • the risk that our supplier agreements will be terminated, or that we will not be able to renew our agreements on favorable economic terms, and as a result our cost of goods will increase; • the risk that our suppliers, including those in China that supply a majority of the components and systems provided to our end-users, will experience operational delays or disruptions that will affect our ability to produce protective packaging systems or provide them to our distributors and end-users; • the risk that our suppliers will fail, or will no longer be able to provide the components which we use to produce our protective packaging systems; • the risk that our suppliers will not be able to meet an increase in demand for the components which we use to produce our protective packaging systems; • the risk that our suppliers’ costs will increase, and that they will increase the prices of components or fully assembled protective packaging systems; • the risk that suppliers of fully assembled protective packaging systems will increase their prices or will no longer be able to provide us with protective packaging systems; and • the risk that our suppliers in China will be subject to increased trade barriers as a result of U.S.-Chinese trade measures, and such trade barriers will increase the costs of these components and systems or negatively impact our ability to purchase these components and systems. 12 For example, following the outbreak of the COVID-19 pandemic, we experienced delays in the supply of certain components used in the assembly of certain of our protective packaging systems and Automation products.
These risks include, but are not limited to: • the risk that our supplier agreements will be terminated, or that we will not be able to renew our agreements on favorable economic terms, and as a result our cost of sales will increase; • the risk that our suppliers, including those in China that supply a majority of the components and systems provided to our end-users, will experience operational delays or disruptions that will affect our ability to produce protective packaging systems or provide them to our distributors and end-users; • the risk that our suppliers will fail, or will no longer be able to provide the components which we use to produce our protective packaging systems; • the risk that our suppliers will not be able to meet an increase in demand for the components which we use to produce our protective packaging systems; • the risk that our suppliers’ costs will increase, and that they will increase the prices of components or fully assembled protective packaging systems; • the risk that suppliers of fully assembled protective packaging systems will increase their prices or will no longer be able to provide us with protective packaging systems; and • the risk that our suppliers in China will be subject to increased trade barriers as a result of U.S.-Chinese trade measures, and such trade barriers will increase the costs of these components and systems or negatively impact our ability to purchase these components and systems.
Demand for our products could be adversely affected by changes in end-user or consumer preferences, which could have a material adverse effect on our business, financial condition or results of operations. Our net revenue depends primarily on the volume of purchases by our end-users in the e-commerce industry and other industries it serves.
Our net revenue depends primarily on the volume of purchases by our end-users in the e-commerce industry and other industries it serves. Changes in consumer preferences or behavior generally could negatively impact demand for our products which could have a material adverse effect on our business, financial condition or results of operations.
Additionally, the U.S. government continues to signal that it may alter trade agreements and terms between China and the United States, including limiting trade with China, and may impose additional tariffs on imports from China.
Additionally, the U.S. government continues to signal that it may alter trade agreements and terms between China and the United States, including limiting trade with China, and may impose additional tariffs on imports from China and other countries from which we import goods.
For example, in September 2018, the U.S. government assessed a 10% tariff on thousands of categories of goods, including parts that we import from China to our domestic facilities to assemble our protective systems.
For example, in September 2018, the U.S. government assessed a 10% tariff on thousands of categories of goods, including parts that we import from China to our domestic facilities to assemble our protective systems, and in February and March of 2025 the U.S. government assessed additional tariffs of 20%.
For example, in 2023, we purchased approximately 64.2% and 26.5% of our raw paper requirements in North America and globally, respectively, from a single supplier, WestRock Company (“WestRock”). Increasing consolidation among our suppliers or the paper supply market more broadly may increase our reliance on existing suppliers or impact our ability to obtain alternative suppliers, if necessary.
For example, in 2024, we purchased approximately 73% and 39% of our raw paper requirements in North America and globally, respectively, from a single supplier, Smurfit WestRock Company (“Smurfit”). Increasing consolidation among our suppliers or the paper supply market more broadly may increase our reliance on existing suppliers or impact our ability to obtain alternative suppliers, if necessary.
If securities or industry analysts do not publish or cease publishing research or reports about us, our business, or our market, or if they change their recommendations regarding our common stock adversely, the price and trading volume of our common stock could decline. 20 The trading market for our common stock will be influenced by the research and reports that industry or securities analysts may publish about us, our business, our market, or our competitors.
If securities or industry analysts do not publish or cease publishing research or reports about us, our business, or our market, or if they change their recommendations regarding our common stock adversely, the price and trading volume of our common stock could decline.
The price of our securities has been and may continue to be volatile. The price of our securities can vary due to general market and economic conditions and forecasts, our general business condition and the release of our financial reports. During 2023, our Class A common shares traded between $2.69 and $8.21 per share.
The price of our securities has been and may continue to be volatile. The price of our securities can vary due to general market and economic conditions and forecasts, our general business condition and the release of our financial reports. During 2024 our Class A common shares traded between $3.85 and $9.04 per share.
Although we believe a market and consumer preference for environmentally sustainable solutions is a trend that is likely to continue, there is no guarantee that it will do so or that we will benefit from the continuing trend.
Moreover, we position ourselves in the protective packaging market as the leading environmentally sustainable protective packaging solutions provider. Although we believe a market and consumer preference for environmentally sustainable solutions is a trend that is likely to continue, there is no guarantee that it will do so or that we will benefit from the continuing trend.
We are subject to a variety of evolving environmental and governmental regulations and product registration laws that expose us to potential financial liability and increased operating costs. 15 We are subject to a number of federal, state, local and foreign environmental, health and safety laws and regulations that govern, among other things, the manufacture and assembly of our products, the discharge of pollutants into the air, soil and water and the use, handling, transportation, storage and disposal of hazardous materials.
We are subject to a number of federal, state, local and foreign environmental, health and safety laws and regulations that govern, among other things, the manufacture and assembly of our products, the discharge of pollutants into the air, soil and water and the use, handling, transportation, storage and disposal of hazardous materials.
Subject to certain exceptions, such agreements restrict our ability to, among other things: • incur additional indebtedness, issue disqualified stock and make guarantees; • incur liens on assets; • engage in mergers or consolidations or fundamental changes; • sell assets; • pay dividends and distributions or repurchase capital stock; • make investments, loans and advances, including acquisitions; • amend organizational documents; • enter into certain agreements that would restrict the ability to incur liens on assets; • repay certain junior indebtedness; • enter into sale-leasebacks; • engage in transactions with affiliates; and • in the case of our subsidiary Ranger Pledgor LLC, engage in activities other than passively holding the equity interests in the borrowers and their subsidiaries. 21 Further, various risks, uncertainties and events beyond our control could affect our ability to comply with these covenants.
Subject to certain exceptions, such agreements restrict our ability to, among other things: • incur additional indebtedness, issue disqualified stock and make guarantees; • incur liens on assets; • engage in mergers or consolidations or fundamental changes or asset sales; • pay dividends and distributions or repurchase capital stock; • make investments, loans and advances, including acquisitions • amend or otherwise alter organizational documents and other material agreements; • enter into certain agreements that would restrict the ability to incur liens on assets or restrict our ability to pay dividends, make loans or transfer assets among our subsidiaries • prepay, redeem or purchase certain junior indebtedness; • enter into sale-leaseback transactions; • engage in transactions with affiliates; and • in the case of our subsidiary Ranger Pledgor LLC, engage in activities other than passively holding the equity interests in the borrowers and their subsidiaries.
Additional sales of our common stock in the market may cause the market price of our common stock to drop significantly. Certain of our stockholders, including JS Capital, own a significant portion of the outstanding voting stock of the Company.
The transaction agreement included customary registration rights relating to shares. Sales of our common stock in the market may cause the market price of our common stock to drop significantly. 21 Table of Contents Certain of our stockholders, including JS Capital, own a significant portion of the outstanding voting stock of the Company.
In addition, increasingly regulators are focusing on ESG matters and related disclosures, and we are subject to changing rules and regulations promulgated by organizations such as the SEC, NYSE and the Financial Accounting Standards Board. These rules and regulations continue to evolve in scope and complexity, making compliance more difficult and uncertain.
In addition, increasingly regulators are focusing on climate matters and related disclosures, and we are subject to changing rules and regulations. These rules and regulations continue to evolve in scope and complexity, making compliance more difficult and uncertain.
Controls and Procedures ” of this Report, while we have developed and taken steps to implement a plan to remedy the material weaknesses related to our ERP system, our internal control over financial reporting and our disclosure controls and procedures continued to be ineffective at December 31, 2023, and there can be no assurances as to whether we will successfully remediate the material weaknesses identified on a timely basis.
Controls and Procedures ” of this Report, while we have successfully remediated the material weaknesses related to our ERP system, our internal control over financial reporting and our disclosure controls and procedures continued to be ineffective at December 31, 2024, and there can be no assurances as to the time frame as to when these material weaknesses will be remediated.
Any failure of a third-party transportation provider to deliver raw materials or finished products in a timely manner could harm our reputation, negatively impact our end-user relationships and have a material adverse effect on our financial condition or results of operations. 24 Our insurance policies may not cover all operating risks and a casualty loss beyond the limits of our coverage could adversely impact our business.
Any failure of a third-party transportation provider to deliver raw materials or finished products in a timely manner could harm our 27 Table of Contents reputation, negatively impact our end-user relationships and have a material adverse effect on our financial condition or results of operations.
If we are unable to meet these targets or commitments on our projected timelines or at all, or if they are perceived negatively, including the perception that they are not sufficiently robust, or conversely, too costly, our reputation as well as our relationships with our investors, customers and other stakeholders could be harmed, which could adversely impact our business, financial condition or results of operations.
If we are unable to meet these targets or commitments on our projected timelines or at all, or if they are perceived negatively, including the perception that they are not sufficiently robust, or conversely, too costly, our reputation as well as our relationships with our investors, customers and other stakeholders could be harmed, which could adversely impact our business, financial condition or results of operations. 19 Table of Contents If we are not able to protect or maintain our trademarks, patents and other intellectual property, we may not be able to prevent competitors from developing similar products or from marketing their products in a manner that capitalizes on our trademarks, and this loss of a competitive advantage may have a material adverse effect on our business, financial position or results of operations.
Risk Related to Ownership of Our Securities A significant portion of our total outstanding shares may be sold into the market in the near future.
Risk Related to Ownership of Our Securities A significant portion of our total outstanding shares may be sold into the market in the near future. This could cause the market price of our common stock to drop significantly, even if our business is doing well.
These sales, or the perception in the market that the holders of a large number of shares intend to sell shares, could reduce the market price of our common stock. As of December 31, 2023, JS Capital holds approximately 37.0% of our total outstanding shares.
Sales of a substantial number of shares of common stock in the public market could occur at any time. These sales, or the perception in the market that the holders of a large number of shares intend to sell shares, could reduce the market price of our common stock.
Increased compliance costs, increasing risks and penalties associated with violations, or our inability to market some of our products in certain jurisdictions may have a material adverse effect on our business, financial condition or results of operations. 16 We face risks associated with ESG matters, including climate change There has been an increased focus, including from investors, customers, regulators, and other stakeholders regarding ESG matters, including with respect to climate change; circular economy; packaging waste; sustainable supply chain practices; biodiversity, deforestation, land, energy, and water use; and diversity, equity, inclusion and belonging and other human capital matters.
We face risks associated with climate and sustainability matters, including climate change There has been an increased focus, including from investors, customers, regulators, and other stakeholders regarding climate and sustainability matters, including with respect to climate change; circular economy; packaging waste; sustainable supply chain practices; biodiversity, deforestation, land, energy, and water use.
Our business is subject to operating hazards and risks relating to handling, storing, transporting and use of the products we sell. We maintain insurance policies in amounts and with coverage and deductibles that we believe are reasonable and prudent.
Our insurance policies may not cover all operating risks and a casualty loss beyond the limits of our coverage could adversely impact our business. Our business is subject to operating hazards and risks relating to handling, storing, transporting and use of the products we sell.
Should these delays re-occur or our supply of such components be interrupted, our business and results of operations may be adversely affected. In addition, some of our third-party suppliers for components and fully assembled systems represent our only source for such products.
For example, following the outbreak of the COVID-19 pandemic, we experienced delays in the supply of certain components used in the assembly of certain of our protective packaging systems and Automation products. Should these delays re-occur or our supply of such components be interrupted, our business and results of operations may be adversely affected.
If we are unable to continue to purchase such components and systems from such suppliers, we may face additional costs or delays, or be unable to obtain similar components and systems. These and other factors may have a material adverse effect on our business, results of operation or financial condition.
In addition, some of our third-party suppliers for components and fully assembled systems represent our only source for such products. If we are unable to continue to purchase such components and systems from such suppliers, we may face additional costs or delays, or be unable to obtain similar components and systems.
Changes in consumer preferences or behavior generally could negatively impact demand for our products which could have a material adverse effect on our business, financial condition or results of operations. Moreover, we position ourselves in the protective packaging market as the leading environmentally sustainable protective packaging solutions provider.
These and other factors may have a material adverse effect on our business, results of operation or financial condition. 15 Table of Contents Demand for our products could be adversely affected by changes in end-user or consumer preferences, which could have a material adverse effect on our business, financial condition or results of operations.
Removed
As a result, any adverse development in the tax laws of any of these jurisdictions or any disagreement with our tax positions could have a material adverse effect on our business, consolidated financial condition or results of operations. • Unanticipated changes in effective tax rates or adverse outcomes resulting from examination of our income or other tax returns could adversely affect our financial condition and results of operations. • Our debt financing may adversely affect our leverage and financial condition and thus negatively impact the value of our shareholders’ investment in us. • We may be unable to obtain additional financing to fund our operations or growth. • Our failure to develop new products that meet our sales or margin expectations, or the failure of those products to achieve market acceptance, could adversely affect our financial condition and results of operations. • If we fail to maintain an effective system of internal controls in the future, we may experience a loss of investor confidence and an adverse impact to our stock price. • Provisions in our organizational documents may inhibit a takeover of us, which could limit the price investors might be willing to pay in the future for our Class A common stock and could entrench management.
Added
As a result, any adverse development in the tax laws of any of these jurisdictions or any disagreement with our tax positions could have a material adverse effect. • We are subject to a variety of evolving environmental and governmental regulations and product registration laws that expose us to potential financial liability and increased operating costs. • We face risks associated with climate and sustainability matters, including climate change. • If we are not able to protect or maintain our trademarks, patents and other intellectual property, we may not be able to prevent competitors from developing similar products or from capitalizing on our trademarks. • We are subject to anti-corruption and anti-money laundering laws with respect to both our domestic and international operations, and non-compliance with such laws can subject us to criminal and civil liability and harm our business. • Product liability claims or regulatory actions could adversely affect us, our reputation or the value of our brands. • Changes in laws or regulations, or a failure to comply with any laws and regulations, may adversely affect us. • We are subject to litigation in the ordinary course of business, and uninsured judgments or a rise in insurance premiums may adversely impact us. • A significant portion of our total outstanding shares may be sold into the market in the near future.
Removed
On March 21, 2022, the SEC issued a proposed rule regarding the enhancement and standardization of mandatory climate-related disclosures for investors. The proposed rule would mandate extensive disclosure of climate-related data, risks, and opportunities, including financial impacts, physical and transition risks, related governance and strategy and greenhouse gas emissions, for certain public companies.
Added
This could cause the market price of our common stock to drop significantly, even if our business is doing well. • Certain of our stockholders, including JS Capital, own a significant portion of our outstanding voting stock. • Provisions in our organizational documents may inhibit a takeover of us, which could limit the price investors might be willing to pay in the future for our Class A common stock and could entrench management. • Our organizational documents designate the Court of Chancery of the State of Delaware as the sole and exclusive forum for substantially all disputes between the Company and our stockholders, to the fullest extent permitted by law, which could limit the Company’s stockholders’ ability to obtain a favorable judicial forum for disputes. • The NYSE may delist our securities from trading on its exchange, which could limit investors’ ability to make transactions in our securities and subject us to additional trading restrictions. • The price of our securities has been and may continue to be volatile. 13 Table of Contents • If securities or industry analysts do not publish or cease publishing research or reports about us, our business, or our market, or adversely change their recommendations, the price and trading volume of our common stock could decline. • Our level of outstanding indebtedness could adversely affect us and our ability to fulfill our obligations. • Our debt financing may adversely affect our leverage and financial condition and thus negatively impact the value of our stockholders’ investment in us. • We experience competition in the markets for our products and services. • Unfavorable end-user responses to price increases could have a material adverse impact. • Our performance, competitive position and prospects for future growth could be negatively impacted if new products we develop do not meet sales or margin expectations. • Our efforts to expand beyond our core product offerings and into adjacent markets may not succeed. • Uncertain global economic conditions, inflationary pressures, and geopolitical unrest have had and could continue to have an adverse effect. • Cyber risk and the failure to maintain the integrity of our operational or security systems or infrastructure, or those of third parties with which we do business, could have a material adverse effect. • We may not be able to successfully implement our strategic transformation initiatives, including our enterprise resource planning (“ERP”) system implementation. • Political and economic instability and risk of government actions affecting our business and our end-users or suppliers may adversely impact our business, results of operations and cash flows. • We rely on third-party distributors to store, sell, market, service and distribute our products. • We depend on third parties for transportation services. • Our insurance policies may not cover all operating risks and a casualty loss beyond the limits of our coverage could adversely impact us. • Our ability to use our net operating loss carryforwards and certain other tax attributes may be limited. • Unanticipated changes in effective tax rates or adverse outcomes resulting from examination of our income or other tax returns could adversely affect us. • We may record a significant amount of goodwill and other identifiable intangible assets and we may never realize the full carrying value of the related assets. • Our management has identified material weaknesses in our internal control over financial reporting, which could, if not promptly remediated, result in material misstatements in our future financial statements. • We are dependent upon certain key personnel. • Disruption and volatility of the financial and credit markets could affect our external liquidity sources. • We may be unable to obtain additional financing to fund our operations or growth.
Removed
Although the ultimate date of effectiveness and the final form and substance of the proposed rule are not yet known and the ultimate scope and impact on our business is uncertain, compliance with the proposed rule, if finalized, may result in increased legal, accounting and financial compliance costs, make some activities more difficult, time-consuming and costly, and place strain on our personnel, systems and resources.
Added
We are subject to a variety of evolving environmental and governmental regulations and product registration laws that expose us to potential financial liability and increased operating costs.
Removed
If we are not able to protect or maintain our trademarks, patents and other intellectual property, we may not be able to prevent competitors from developing similar products or from marketing their products in a manner that capitalizes on our trademarks, and this loss of a competitive advantage may have a material adverse effect on our business, financial position or results of operations.
Added
Increased compliance costs, increasing risks and penalties associated with violations, or our inability to market some of our products in certain jurisdictions may have a material adverse effect on our business, financial condition or results of operations.
Removed
This could cause the market price of our common stock to drop significantly, even if our business is doing well. 18 Sales of a substantial number of shares of common stock in the public market could occur at any time.
Added
As of December 31, 2024, JS Capital held approximately 37% of our total outstanding shares. In addition, on January 28, 2025, we entered into a transaction agreement with Amazon.com, Inc.
Removed
We are a borrower under senior secured credit facilities provided by Goldman Sachs Lending Partners LLC.
Added
(“Amazon”) under which, among other things, we agreed to issue to a wholly-owned affiliate of Amazon a warrant to acquire up to 18,716,456 shares of the Company’s Class A common stock (subject to customary anti-dilution adjustments) at an exercise price of $6.8308 per share on the terms and conditions set forth in the warrant. 1,871,646 shares issuable under the warrant vested on the date of the transaction agreement, and the remainder of the issuable shares are subject to vesting over time based on payments made to the Company by Amazon or on Amazon’s behalf under the current and any possible future commercial agreements with the Company, with all such shares vesting upon an aggregate spend of $400 million.
Added
The trading market for our common stock will be influenced by the research and reports that industry or securities analysts may publish about us, our business, our market, or our competitors.
Added
Further, various risks, uncertainties and events beyond our control could affect our ability to comply with these covenants.
Added
We maintain insurance policies in amounts and with coverage and deductibles that we believe are reasonable and prudent.

Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

2 edited+0 added−0 removed11 unchanged
Biggest changeThis roadmap includes steps for assessing the severity of a cybersecurity threat, identifying the source of a cybersecurity threat including whether the cybersecurity threat is associated with a third-party service provider, implementing cybersecurity countermeasures and mitigation strategies and informing management and our board of directors of material cybersecurity threats and incidents. 26 Specifically, our technology team relies on third-party information security experts for risk assessment, monitoring, and system enhancements.
Biggest changeThis roadmap includes steps for assessing the severity of a cybersecurity threat, 29 Table of Contents identifying the source of a cybersecurity threat including whether the cybersecurity threat is associated with a third-party service provider, implementing cybersecurity countermeasures and mitigation strategies and informing management and our board of directors of material cybersecurity threats and incidents.
In addition, our technology team provides training to all employees periodically, on an ongoing basis.
Specifically, our technology team relies on third-party information security experts for risk assessment, monitoring, and system enhancements. In addition, our technology team provides training to all employees periodically, on an ongoing basis.

Item 2. Properties

Properties — owned and leased real estate

1 edited+0 added−0 removed0 unchanged
Biggest changeP ROPERTIES The following table provides our locations and their various functions: Function Location Segment PPS System Assembly Paper Consumables Automation Sales/ Administrative Concord Township, Ohio [1] North America ✓ ✓ ✓ ✓ Eygelshoven, The Netherlands [2] Europe/Asia ✓ ✓ ✓ ✓ Shelton, Connecticut North America ― ― ✓ ✓ Kansas City, Missouri North America ― ✓ ― ― Krimice, Czech Republic Europe/Asia ― ― ― ✓ Laoshan, China Europe/Asia ― ― ― ✓ Moenchengladbach, Germany Europe/Asia ― ― ― ✓ Nyrany, Czech Republic Europe/Asia ✓ ✓ ― ― Paris, France Europe/Asia ― ― ― ✓ Prague, Czech Republic Europe/Asia ― ― ― ✓ Raleigh, North Carolina North America ― ✓ ― ― Reno, Nevada North America ― ✓ ― ― Sao Paulo, Brazil Europe/Asia ― ― ― ✓ Shanghai, China Europe/Asia ― ― ― ✓ Singapore Europe/Asia ― ― ― ✓ Tokyo, Japan Europe/Asia ― ― ― ✓ Iskandar Puteri, Malaysia Europe/Asia ― ✓ ― ― [1] Global headquarters [2] Europe/Asia regional headquarters
Biggest changePROPERTIES The following table provides our primary locations and their various functions: Function Location Business Segment PPS System Assembly Paper Consumables Automation Sales/ Administrative Concord Township, Ohio [1] North America ✓ ✓ — ✓ Eygelshoven, The Netherlands [2] Europe/Asia ✓ ✓ ✓ ✓ Shelton, Connecticut North America — — ✓ ✓ Kansas City, Missouri North America — ✓ — — Nyrany, Czech Republic Europe/Asia ✓ ✓ — — Krimice, Czech Republic Europe/Asia ✓ — — ✓ Reno, Nevada North America — ✓ — — Singapore [2] Europe/Asia — — — ✓ Malaysia, Johor Bahru Europe/Asia — ✓ — — ________________________________________________________________________ [1] Global headquarters [2] Regional headquarters

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

4 edited+0 added−0 removed7 unchanged
Biggest changeWe have not paid any cash dividends and, therefore, the cumulative total return calculation for us is based solely upon share price appreciation and not upon reinvestment of cash dividends.
Biggest changeWe have not paid any cash dividends and, therefore, the cumulative total return calculation for us is based solely upon share price appreciation 31 Table of Contents and not upon reinvestment of cash dividends. The share price performance shown on the graph is not necessarily indicative of future price performance.
The graph below compares the cumulative total return of our common stock from June 3, 2019 through December 31, 2023, with the comparable cumulative return of two indices, the Russell 2000 Index (“RTY”) and the Dow Jones U.S. Containers and Packaging Index (“DJUSCP”).
The graph below compares the cumulative total return of our common stock from December 31, 2019 through December 31, 2024, with the comparable cumulative return of two indices, the Russell 2000 Index (“RTY”) and the Dow Jones U.S. Containers and Packaging Index (“DJUSCP”).
ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STO CKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Our Class A Common Shares are listed on the NYSE under the symbol, “PACK.” Holders of Record As of March 7, 2024, there were 16 holders of record of our Class A Common Shares and one holder of our Class C Common Shares.
ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Our Class A Common Shares are listed on the NYSE under the symbol, “PACK.” Holders of Record As of March 11, 2025, there were 15 holders of record of our Class A Common Shares.
The share price performance shown on the graph is not necessarily indicative of future price performance. 28 Issuer Purchases of Equity Securities On July 26, 2022, the Company's Board of Directors approved the repurchase of up to $50.0 million of shares of the Company's Class A common stock, with a 36-month expiration.
Issuer Purchases of Equity Securities On July 26, 2022, the Company's Board of Directors approved the repurchase of up to $50.0 million of shares of the Company's Class A common stock, with a 36-month expiration.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

74 edited+95 added−23 removed37 unchanged
Biggest changeThese non-GAAP financial measures should not be considered as alternatives to, or more meaningful than, measures of financial performance as determined in accordance with GAAP or as indicators of operating performance. 34 The following tables and related notes reconcile certain non-GAAP measures, including the non-GAAP constant currency measures, to GAAP information presented in this Report for 2023 and 2022: Non-GAAP Measures Year Ended December 31, 2023 2022 $ Change % Change Net revenue $ 336.3 $ 326.5 $ 9.8 3.0 Cost of goods sold 213.0 226.9 (13.9 ) (6.1 ) Gross profit 123.3 99.6 23.7 23.8 Selling, general and administrative expenses 91.8 105.5 (13.7 ) (13.0 ) Depreciation and amortization expense 33.8 32.1 1.7 5.3 Other operating expense, net 5.2 4.5 0.7 15.6 Loss from operations (7.5 ) (42.5 ) 35.0 (82.4 ) Interest expense 24.3 20.7 3.6 17.4 Foreign currency gain (0.3 ) (2.2 ) 1.9 (86.4 ) Other non-operating income, net (0.2 ) (4.3 ) 4.1 (95.3 ) Loss before income tax benefit (31.3 ) (56.7 ) 25.4 (44.8 ) Income tax benefit (4.2 ) (15.3 ) 11.1 (72.5 ) Net loss (27.1 ) (41.4 ) 14.3 (34.5 ) Depreciation and amortization expense – COS 35.8 36.8 (1.0 ) (2.7 ) Depreciation and amortization expense – D&A 33.8 32.1 1.7 5.3 Interest expense 24.3 20.7 3.6 17.4 Income tax benefit (4.2 ) (15.3 ) 11.1 (72.5 ) EBITDA (1) 62.6 32.9 29.7 90.3 Adjustments (2) : Unrealized gain translation (0.3 ) (2.3 ) 2.0 (87.0 ) Non-cash impairment losses 1.5 1.0 0.5 50.0 M&A, restructuring, severance 5.8 2.0 3.8 190.0 Amortization of restricted stock units (10.2 ) 18.3 (28.5 ) (155.7 ) Amortization of cloud-based software implementation costs (3) 3.0 2.8 0.2 7.1 Cloud-based software implementation costs 4.3 7.4 (3.1 ) (41.9 ) Unrealized gain on investment in small private business - (3.9 ) 3.9 (100.0 ) SOX remediation costs 4.2 - 4.2 - Other adjustments 2.5 4.3 (1.8 ) (41.9 ) Constant currency 3.1 4.3 (1.2 ) (27.9 ) Constant Currency AEBITDA (1) $ 76.5 $ 66.8 $ 9.7 14.5 (see subsequent footnotes) (1) Reconciliations of EBITDA and AEBITDA for each period presented are to net (loss) income, the nearest GAAP equivalent.
Biggest changeGAAP information presented in this Report for 2023 and 2022: Non-GAAP Measures Constant Currency (Non-GAAP) % Change (6) Year Ended December 31, $ Change % Change 2023 2022 Net loss $ (27.1) $ (41.4) $ 14.3 (34.5) (35.3) Depreciation and amortization expense – COS 35.8 36.8 (1.0) (2.7) Depreciation and amortization expense – D&A 33.8 32.1 1.7 5.3 Interest expense 24.3 20.7 3.6 17.4 Income tax benefit (4.2) (15.3) 11.1 (72.5) EBITDA (1) 62.6 32.9 29.7 90.3 87.8 Adjustments (2) : Foreign currency gain (0.3) (2.3) 2.0 (87.0) Non-cash impairment losses 1.5 1.0 0.5 50.0 M&A, restructuring, severance 5.8 2.0 3.8 190.0 Stock-based compensation expense (10.2) 18.3 (28.5) (155.7) Amortization of cloud-based software implementation costs (3) 3.0 2.8 0.2 7.1 Cloud-based software implementation costs (4) 4.3 7.4 (3.1) (41.9) SOX remediation costs 4.2 — 4.2 NM Unrealized loss on strategic investments — (3.9) 3.9 NM Other adjustments (5) 2.5 4.3 (1.8) (41.9) AEBITDA (1) $ 73.4 $ 62.5 $ 10.9 17.4 15.4 (see subsequent footnotes) (1) Reconciliations of EBITDA and AEBITDA for each period presented are to net loss, the nearest U.S.
Nevertheless, as paper is a commodity, its price on the open market, and in turn the prices we negotiate with suppliers at a given point in time, can fluctuate significantly, and is affected by several factors outside of our control, including inflationary pressures, supply and demand 29 and the cost of other commodities that are used in the manufacture of paper, including wood, energy, and chemicals.
Nevertheless, as paper is a commodity, its price on the open market, and in turn the prices we negotiate with suppliers at a given point in time, can fluctuate significantly, and is affected by several factors outside of our control, including inflationary pressures, supply and demand and the cost of other commodities that are used in the manufacture of paper, including wood, energy, and chemicals.
Our future capital requirements and the adequacy of available funds will depend on many factors, and if we are unable to obtain needed additional funds, we may have to reduce our operating costs or incur additional debt, which could impair our 35 growth prospects and/or otherwise negatively impact our business.
Our future capital requirements and the adequacy of available funds will depend on many factors, and if we are unable to obtain needed additional funds, we may have to reduce our operating costs or incur additional debt, which could impair our growth prospects and/or otherwise negatively impact our business.
Goodwill is not subject to amortization but is tested for impairment annually at a reporting unit level (October 1 st ) and between annual tests if events and circumstances indicate that the estimated fair value of a reporting unit may no longer exceed its carrying value.
Goodwill is not subject to amortization but is tested for impairment annually at a reporting unit level as of October 1 st and between annual tests if events and circumstances indicate that the estimated fair value of a reporting unit may no longer exceed its carrying value.
Other Non-Operating Expense (Income), Net Other non-operating income, net was $0.2 million in 2023 and $4.3 million in 2022, a decrease of $4.1 million year over year. In 2022 the other non-operating income was primarily related to the unrealized gain on our investment in Pickle.
Other Non-Operating Income, Net Other non-operating income, net was $0.2 million in 2023 and $4.3 million in 2022, a decrease of $4.1 million year over year. In 2022 the other non-operating income was primarily related to the unrealized gain on our investment in Pickle.
EBITDA. EBITDA is a non-GAAP financial measure that we calculate as net income (loss), adjusted to exclude: benefit from (provision for) income taxes; interest expense; and depreciation and amortization. AEBITDA.
EBITDA is a non-GAAP financial measure that we calculate as net loss, adjusted to exclude: benefit from (provision for) income taxes; interest expense; and depreciation and amortization.
Additionally, our $50.0 million notional interest rate swap at 1.5% matured on June 1, 2023. Foreign Currency (Gain) Loss 32 Foreign currency gain for 2023 was $0.3 million, a decrease of $1.9 million, or 86.4%, from a foreign currency gain of $2.2 million in 2022 due to the volatility in Euro exchange rates compared to USD.
Additionally, our $50.0 million notional interest rate swap at 1.5% matured on June 1, 2023. Foreign Currency Gain Foreign currency gain for 2023 was $0.3 million, a decrease of $1.9 million, or 86.4%, from a foreign currency gain of $2.2 million in 2022 due to the volatility in Euro exchange rates compared to USD.
The increase of $7.2 million, or 3.8%, was driven by favorable currency exchange rates of the Euro to the U.S. dollar, as well as increases in cushioning sales of $5.4 million, wrapping sales of $0.8 million, and other sales of $2.4 million, partially offset by a decrease of $1.4 million in void-fill sales.
The increase of $7.2 million, or 3.8%, was driven by favorable currency exchange rates of the Euro to the U.S. dollar, as well as increases in cushioning sales of $5.4 million, wrapping sales of $0.8 million, and other net revenue of $2.4 million, partially offset by a decrease of $1.4 million in void-fill sales.
MANAGEMENT’S DISCUSSION AND ANALYSIS O F FINANCIAL CONDITION AND RESULTS OF OPERATIONS The information in this Management’s Discussion and Analysis of Financial Condition and Results of Operations should be read together with our consolidated financial statements and related notes set forth in Part II, Item 8, as well as the discussion included in Part I, Item 1A, “ Risk Factors ,” of this Report.
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS The information in this Management’s Discussion and Analysis of Financial Condition and Results of Operations should be read together with our consolidated financial statements and related notes set forth in Part II, Item 8, as well as the discussion included in Part I, Item 1A, “ Risk Factors ,” of this Report.
Cash Flows Used in Investing Activities Net cash used in investing activities was $52.4 million in 2023 and reflects cash used for production of converter equipment and leasehold improvements for our new facilities in Connecticut and The Netherlands, net of $2.9 million in proceeds from the sale of our building and land located in Heerlen, The Netherlands.
Net cash used in investing activities was $52.4 million in 2023 and reflects cash used for production of converter equipment and leasehold improvements for our facilities in Connecticut and The Netherlands, net of $2.9 million in proceeds from the sale of our building and land located in Heerlen, The Netherlands.
The market for our solutions is competitive and it may be difficult to pass on increases in paper prices to our customers immediately, or at all, which has in the past, and could in the future, adversely affect our operating results.
The market for our solutions is competitive and it may be difficult to pass on increases in paper and other commodity prices to our customers immediately, or at all, which has in the past, and could in the future, adversely affect our operating results.
The increase of $2.6 million, or 1.9%, was attributable to an increase in cushioning sales of $0.1 million, an increase in void-fill sales of $4.7 million, and an increase in other sales of $3.1 million, partially offset by a decrease in wrapping sales of $5.3 million.
The increase of $2.6 million, or 1.9%, was attributable to an increase in cushioning sales of $0.1 million, an increase in void-fill sales of $4.7 million, and an increase in other net revenue of $3.1 million, partially offset by a decrease in wrapping sales of $5.3 million.
Results of Operations The following tables set forth our results of operations for 2023 and 2022, presented in millions of dollars. In addition, in our discussion below, we include certain other unaudited, non-GAAP constant currency data for 2023 and 2022.
Consolidated Results of Operations — 2023 and 2022 The following tables set forth our consolidated results of operations for 2023 and 2022, presented in millions of dollars. In addition, in our discussion below, we include certain other unaudited, non-GAAP data and Constant Currency (Non-GAAP) % Change data for 2023 and 2022.
Our Automation machines are highly customized to customer specific needs, and termination is only allowed in the case of breach of contract, and as such Ranpak is entitled to all consideration from the production of the machine.
Our Automation machines are highly customized to customer specific needs and termination is only allowed in the case of breach of contract. As such, we are entitled to all consideration from the production of the machine.
This could also result in reduced or delayed collections of outstanding accounts receivable from end-users, which could impact our cash flows. As a result, to the extent inflationary pressures continue, we expect additional pressure on our net revenue and gross margin. We will continue to evaluate the impact of inflationary pressures on our profitability and cash flows.
This could also result in reduced or delayed collections of outstanding accounts receivable from end-users, which could impact our cash flows. As a result, to the extent inflationary pressures continue, we expect additional pressure on our net revenue and gross margin.
Ranpak cannot sell the machine to another customer due to the level of customization, and as such, there is not an alternative use for the product produced.
We cannot sell the machine to another customer due to the level of customization, and as such, there is not an alternative use for the product produced.
Our ability to predict or further offset inflationary cost increases in the future or during economic downturns or recessions may be limited or impacted by heightened competition for net revenue, an unwillingness by our customers to accept price increases or pressure to reduce selling prices if end-users reduce their volume of purchases.
However, our ability to predict or further offset inflationary cost increases in the future or during economic downturns or recessions may be limited or impacted by heightened competition for net revenue, an unwillingness by our 33 Table of Contents customers to accept price increases or pressure to reduce selling prices if end-users reduce their volume of purchases.
Any currency balances that are denominated in currencies other than the functional currency of the subsidiary are re-measured into the functional currency, with the resulting gain or loss recorded in the foreign currency (gains) losses line-item in our Consolidated Statements of Operations.
Any currency balances that are denominated in currencies other than the functional currency of the subsidiary are re-measured into the functional currency, with the resulting gain or loss recorded in the foreign currency (gains) losses line-item in our Consolidated Statements of Operations and Comprehensive Income (Loss).
Cash Flows Used in Financing Activities Net cash used in financing activities was $1.8 million in 2023 and reflects payments on finance lease liabilities, legal fees paid related to a modification of our debt facilities, debt repayments, and tax payments for withholdings on stock compensation, partially offset by proceeds from equipment financing, net of repayments.
Net cash used in financing activities was $1.8 million in 2023 and reflects debt repayments, payments on finance lease liabilities, tax payments for withholdings on stock-based compensation, and legal fees paid related to a modification of our debt facilities, partially offset by net proceeds received from our equipment financing arrangement.
Paper is a key component of our cost of goods sold and paper costs can fluctuate significantly between periods. We purchase both 100% virgin and 100% recycled paper, as well as blends, from various suppliers for conversion into the paper consumables we sell.
Paper is a key component of our cost of product sales and paper costs can fluctuate significantly between periods. We purchase both 100% virgin and 100% recycled paper, as well as blends, from various suppliers for conversion into the paper consumables we sell.
At December 31, 2023, we did not have amounts outstanding under our $45.0 million revolving credit facility, and we had no borrowings under such facility through March 14, 2024. Debt Profile The material terms of our debt are summarized in Note 11 — Long-Term Debt to the consolidated financial statements included elsewhere in this Report.
At December 31, 2024, we did not have amounts outstanding under our $50.0 million revolving credit facility, and we had no borrowings under such facility through March 17, 2025. Debt Profile The material terms of our debt are summarized in Note 11 — Long-Term Debt to the consolidated financial statements included elsewhere in this Report.
Key Performance Indicators and Other Factors Affecting Performance We use the following key performance indicators and other factors to analyze our business performance, determine financial forecasts, and help develop long-term strategic plans: PPS Systems Base.
Key Performance Indicators and Other Factors Affecting Performance We use the following key performance indicators and other factors to analyze our business performance, determine financial forecasts, and help develop long-term strategic plans: 32 Table of Contents PPS Systems Base.
Management does not consider these non-GAAP measures in isolation or as an alternative to similar financial measures determined in accordance with GAAP. The computations of EBITDA and AEBITDA may not be comparable to other similarly titled measures of other companies.
Management does not consider these non-GAAP measures in isolation or as an alternative to similar financial measures determined in accordance with U.S. GAAP. The computations of EBITDA, AEBITDA and Constant Currency (Non-GAAP) % Change may not be comparable to other similarly titled measures of other companies.
Revenue from contracts with customers is recognized under ASC Topic 606, Revenue from Contracts with Customers (“ASC 606”) using a five-step model consisting of the following: (i) identify the contract with a customer; (ii) identify the performance obligations in the contract; (iii) determine the transaction price; (iv) allocate the transaction price to the performance obligations in the contract; and (v) recognize revenue when (or as) we satisfy a performance obligation.
Revenue Recognition — Revenue from contracts with customers is recognized using a five-step model consisting of the following: (i) identify the contract with a customer; (ii) identify the performance obligations in the contract; (iii) determine the transaction price; (iv) allocate the transaction price to the performance obligations in the contract; and (v) recognize revenue when (or as) we satisfy a performance obligation.
The fluctuation in the effective tax rate between periods, and the difference between the effective tax rate and the U.S. federal statutory rate, was primarily attributable to stock-based compensation adjustments.
The fluctuation in the effective tax rate between periods, and the difference 40 Table of Contents between the effective tax rate and the U.S. federal statutory rate, was primarily attributable to stock-based compensation adjustments.
Other sales, which includes automated box sizing equipment and non-paper revenue from packaging systems installed in the field, such as systems accessories, increased $5.5 million, or 36.4%, to $20.6 million from $15.1 million, for 2023 compared to 2022.
Other net revenue, which includes sales of automated box sizing equipment and non-paper revenue from packaging systems installed in the field, such as systems accessories, increased $5.5 million, or 36.4% (33.8% at constant currency), to $20.6 million from $15.1 million, for 2023 compared to 2022.
Including finance lease liabilities and excluding deferred financing costs, we had $407.4 million in debt, $2.5 million of which was classified as short-term, as of December 31, 2023, compared to $396.9 million in debt, $2.4 million of which was classified as short-term, as of December 31, 2022.
Including finance lease liabilities and equipment financing and excluding deferred financing costs, we had $415.7 million in debt, $5.6 million of which was classified as short-term, as of December 31, 2024, compared to $407.4 million in debt, $2.5 million of which was classified as short-term, as of December 31, 2023.
Our revenue associated with our PPS business contains (i) a non-lease component (the paper consumables) accounted for as revenue under ASC 606 and (ii) a lease component (our PPS systems) accounted for as machine lease revenue under ASC Topic 842, Leases (“ASC 842”).
Our revenue associated with our PPS business contains (i) a non-lease component (the paper consumables) accounted for as revenue under Accounting Standards Codification (“ASC”) Topic 606, Revenue from Contracts with Customers (“ASC 606”), and (ii) a lease component (our PPS systems) accounted for as machine lease revenue under ASC Topic 842, Leases (“ASC 842”).
The following table presents our installed base of PPS systems as of December 31, 2023 and 2022: December 31, 2023 December 31, 2022 Change % Change PPS Systems (in thousands) Cushioning machines 34.8 35.3 (0.5 ) (1.4 ) Void-Fill machines 83.7 81.6 2.1 2.6 Wrapping machines 22.7 22.2 0.5 2.3 Total 141.2 139.1 2.1 1.5 Paper Costs.
The following table presents our installed base of PPS systems as of December 31, 2024 and 2023: December 31, 2024 December 31, 2023 Change % Change PPS systems (in thousands) Cushioning 34.4 34.8 (0.4) (1.1) Void-Fill 85.7 83.7 2.0 2.4 Wrapping 22.6 22.7 (0.1) (0.4) Total 142.7 141.2 1.5 1.1 Paper and Other Costs.
We believe that our cash and cash equivalents of $62.0 million as of December 31, 2023, 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.
We believe that our cash and cash equivalents of $76.1 million as of December 31, 2024 and cash flow from operations, 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.
The assumptions that have the most significant effect on the fair values of our goodwill reporting units derived using the Discounted Cash Flow Method are (i) the expected revenue growth rate, (ii) gross margin, (iii) projected operating expense (iv) the weighted average cost of capital (“WACC”), (v) and the residual growth rate for each reporting unit.
The assumptions that have the most significant effect on the fair values of our North America reporting unit based on the Discounted Cash Flow Method are (i) the expected revenue growth rate, (ii) gross margin, (iii) projected operating expense, (iv) the weighted average cost of capital (“WACC”), (v) the residual growth rate, and (vi) capital expenditures.
Overview We are a leading provider of environmentally sustainable, systems-based, product protection solutions and end-of-line automation solutions for e-commerce and industrial supply chains.
All amounts and percentages are approximate due to rounding. Overview We are a leading provider of environmentally sustainable, systems-based, product protection solutions and end-of-line automation solutions for e-commerce and industrial supply chains.
Revenue continued to improve year over year on a consolidated basis driven by increased placement of packaging systems with end users, partially offset by the current consumer spend preferring experience over discretionary goods and the impact of inflationary and interest rate pressures on consumer and corporate spend. Cushioning increased $5.5 million, or 3.9%, to $145.8 million from $140.3 31 million.
Revenue continued to improve year over year on a consolidated basis driven by increased placement of packaging systems with end users, partially offset by the current consumer spend preferring experience over discretionary goods and the impact of inflationary and interest rate pressures on consumer and corporate spend.
A hypothetical individual decrease in the expected long-term revenue growth rate by approximately 1.6%, a hypothetical decrease in the long-term gross profit assumption of approximately 2.4%, a hypothetical increase in the long-term operating expense assumption of 2.4%, or a decrease in the residual revenue growth rate of 1.2% would result in an impairment charge.
A hypothetical decrease in the expected long-term revenue growth rate by approximately 1.2%, a hypothetical decrease in the long-term gross profit assumption of approximately 2.1%, a hypothetical increase in the long-term operating expense assumption of 2.1%, or a hypothetical decrease in the residual growth rate of 1.2%, would have resulted in an impairment 47 Table of Contents charge.
Wrapping decreased $4.7 million, or 11.2%, to $37.1 million from $41.8 million. Other sales increased $5.1 million, or 30.9%, to $21.6 million from $16.5 million, for 2023 compared to 2022. Net revenue in North America for 2023 totaled $137.3 million compared to net revenue in North America of $134.7 million in 2022.
Void-fill increased $1.7 million, or 1.2%, to $138.3 million from $136.6 million. Wrapping decreased $4.7 million, or 11.2%, to $37.1 million from $41.8 million. Other net revenue increased $5.1 million, or 30.9%, to $21.6 million from $16.5 million, for 2023 compared to 2022.
No mandatory prepayments were required as of December 31, 2023, and the Company was in compliance with all debt covenants. 36 Cash Flows The following table sets forth our summary cash flow information for the periods indicated: Year Ended December 31, 2023 2022 Net cash provided by operating activities $ 52.6 $ 1.1 Net cash used in investing activities (52.4 ) (37.9 ) Net cash used in financing activities (1.8 ) (4.5 ) Effect of exchange rate changes on cash and cash equivalents 0.8 0.2 Net decrease in cash and cash equivalents (0.8 ) (41.1 ) Cash and Cash Equivalents, beginning of period 62.8 103.9 Cash and Cash Equivalents, end of period $ 62.0 $ 62.8 Cash Flows Provided by Operating Activities Net cash provided by operating activities was $52.6 million in 2023.
Cash Flows The following table sets forth our summary cash flow information for the periods indicated: Year Ended December 31, 2024 2023 Net cash provided by operating activities $ 41.4 $ 52.6 Net cash used in investing activities (32.5) (52.4) Net cash provided by (used in) financing activities 1.8 (1.8) Effect of exchange rate changes on cash and cash equivalents 3.4 0.8 Net increase (decrease) in cash and cash equivalents 14.1 (0.8) Cash and Cash Equivalents, beginning of period 62.0 62.8 Cash and Cash Equivalents, end of period $ 76.1 $ 62.0 Cash Flows Provided by Operating Activities Net cash provided by operating activities was $41.4 million in 2024.
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.
We believe that our Constant Currency (Non-GAAP) % Change presentation provides useful information to investors and others in understanding and evaluating our operating results in the same manner as our management and board of directors.
Some of these limitations are: • 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; • EBITDA and AEBITDA do not reflect changes in, or cash requirements for, our working capital needs; • AEBITDA does not consider the potentially dilutive impact of stock-based compensation; • 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; • AEBITDA does not take into account any restructuring and integration costs; • AEBITDA is presented on a constant currency basis and gives effect to the impact of currency fluctuations; • while EBITDA for all periods herein has been reported without giving effect to constant currency adjustments, we have previously presented EBTIDA on a constant currency basis, which reduces its usefulness as a comparative measure to certain of our historical results that are not presented in this report; and 33 • other companies, including companies in our industry, may calculate EBITDA and AEBITDA differently, which reduces their usefulness as comparative measures.
Some of these limitations are: • 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; • EBITDA and AEBITDA do not reflect changes in, or cash requirements for, our working capital needs; • 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; • AEBITDA does not consider the potentially dilutive impact of stock-based compensation, and in certain periods, other income and expense items, such as restructuring and integration costs; 34 Table of Contents • constant currency change measures exclude the foreign currency exchange rate impact on our foreign operations; and • other companies, including companies in our industry, may calculate EBITDA, AEBITDA, and constant currency change differently, which reduces their usefulness as comparative measures.
Void-fill increased $3.3 million, or 2.5%, to $133.9 million from $130.6 million. Wrapping decreased $4.5 million, or 11.1%, to $36.0 million from $40.5 million.
Cushioning increased $5.5 million, or 3.9% (1.8% at constant currency), to $145.8 million from $140.3 million. Void-fill increased $3.3 million, or 2.5% (1.5% at constant currency), to $133.9 million from $130.6 million. Wrapping decreased $4.5 39 Table of Contents million, or 11.1% (11.9% at constant currency), to $36.0 million from $40.5 million.
The Facilities also provide us with the option to increase commitments under the Facilities in an aggregate amount not to exceed the sum of (i) the greater of $95.0 million and 100% of Consolidated Adjusted EBITDA (as defined in the Credit Agreement) for the four consecutive fiscal quarters most recently ended, plus (ii) the amounts of any voluntary prepayments of the First Lien Term Facility (and, in the case of the Revolving Facility, to the extent such voluntary prepayments are accompanied by permanent commitment reductions under the Revolving Facility) plus (iii) additional amounts subject to the relevant net leverage ratio tests and other conditions specified in the Credit Agreement.
The Facilities provide the Company with the option to increase commitments under the Facilities in an aggregate amount not to exceed the greater of $85.0 million and 100% of Consolidated Adjusted EBITDA (as defined in the 2024 Credit Agreement), plus certain voluntary prepayments (and in the case of the Revolving Facility, to the extent such voluntary prepayments are accompanied by permanent commitment reductions under the Revolving Facility), plus unlimited amounts subject to the relevant net leverage ratio tests and certain other conditions.
We reconcile this data to our GAAP data for the same period under “ Presentation and Reconciliation of GAAP to Non-GAAP Measures ” for 2023 and 2022. As noted above, we believe that in order to better understand the performance of the Company, providing non-GAAP financial measures to users of our financial information is helpful.
GAAP to Non-GAAP Measures As noted above, we believe that in order to better understand the performance of the Company, providing non-GAAP financial measures to users of our financial information is helpful.
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.
AEBITDA is a non-GAAP financial measure that we calculate as net loss, adjusted to exclude: benefit from (provision for) income taxes; interest expense; depreciation and amortization; stock-based compensation expense; foreign currency (gain) loss; amortization of cloud-based software implementation costs; and, in certain periods, other income and expense items. We reconcile this data to our U.S.
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.
We also present Earnings Before Interest, Taxes, Depreciation and Amortization (“EBITDA”) and adjusted EBITDA (“AEBITDA”), which are non-GAAP financial measures, 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.
We reconcile this data to our GAAP data for the same period under “ Presentation and Reconciliation of GAAP to Non-GAAP Measures ” for 2023 and 2022. 30 Comparison of 2023 to 2022 Year Ended December 31, 2023 2022 $ Change % Change Net revenue $ 336.3 $ 326.5 $ 9.8 3.0 Cost of goods sold 213.0 226.9 (13.9 ) (6.1 ) Gross profit 123.3 99.6 23.7 23.8 Selling, general and administrative expenses 91.8 105.5 (13.7 ) (13.0 ) Depreciation and amortization expense 33.8 32.1 1.7 5.3 Other operating expense, net 5.2 4.5 0.7 15.6 Loss from operations (7.5 ) (42.5 ) 35.0 (82.4 ) Interest expense 24.3 20.7 3.6 17.4 Foreign currency gain (0.3 ) (2.2 ) 1.9 (86.4 ) Other non-operating income, net (0.2 ) (4.3 ) 4.1 (95.3 ) Loss before income tax benefit (31.3 ) (56.7 ) 25.4 (44.8 ) Income tax benefit (4.2 ) (15.3 ) 11.1 (72.5 ) Net loss $ (27.1 ) $ (41.4 ) $ 14.3 (34.5 ) Non-GAAP EBITDA $ 62.6 $ 32.9 $ 29.7 90.3 AEBITDA (Constant Currency) $ 76.5 $ 66.8 $ 9.7 14.5 Net Revenue The following table and the discussion that follows compares our net revenue by geographic region and by product line for 2023 and 2022 on a GAAP basis and on a non-GAAP constant currency basis as described above and in the discussion below.
GAAP. 38 Table of Contents Comparison of 2023 to 2022 Year Ended December 31, Constant Currency (Non-GAAP) % Change (1) 2023 2022 $ Change % Change Net revenue $ 336.3 $ 326.5 $ 9.8 3.0 1.4 Cost of sales 213.0 226.9 (13.9) (6.1) (7.5) Gross profit 123.3 99.6 23.7 23.8 21.8 Selling, general and administrative expenses 91.8 105.5 (13.7) (13.0) Depreciation and amortization expense 33.8 32.1 1.7 5.3 Other operating expense, net 5.2 4.5 0.7 15.6 Loss from operations (7.5) (42.5) 35.0 (82.4) Interest expense 24.3 20.7 3.6 17.4 Foreign currency gain (0.3) (2.2) 1.9 (86.4) Other non-operating income, net (0.2) (4.3) 4.1 (95.3) Loss before income tax benefit (31.3) (56.7) 25.4 (44.8) Income tax benefit (4.2) (15.3) 11.1 (72.5) Net loss $ (27.1) $ (41.4) $ 14.3 (34.5) (35.3) Non-GAAP EBITDA $ 62.6 $ 32.9 $ 29.7 90.3 87.8 AEBITDA $ 73.4 $ 62.5 $ 10.9 17.4 15.4 (1) The Constant Currency (Non-GAAP) % Change excludes the impact of foreign currency translation effects when comparing current results to the prior year.
We consider the following accounting policies to be critical to understanding our financial statements because the application of these policies requires significant judgment on the part of management, which could have a material impact on our financial statements. The following accounting policies include estimates that require management’s subjective or complex judgments about the effects of matters that are inherently uncertain.
We 45 Table of Contents consider the following accounting policies to be critical to understanding our financial statements because the application of these policies requires significant judgment on the part of management, which could have a material impact on our financial statements.
For information on our significant accounting policies, including the policies discussed below, see Note 2 — Basis of Presentation and Summary of Significant Accounting Policies to the audited consolidated financial statements included elsewhere in this Report. Revenue Recognition .
The following accounting policies include estimates that require management’s subjective or complex judgments about the effects of matters that are inherently uncertain. For information on our significant accounting policies, including the policies discussed below, see Note 2 — Basis of Presentation and Summary of Significant Accounting Policies to the audited consolidated financial statements included elsewhere in this Report.
See “ Qualitative and Quantitative Disclosures About Market Risk. ” Inflationary Pressures and Other Costs. We have continued to experience inflationary pressures in 2023, which have adversely impacted some of our end-users, particularly e-commerce customers, that are particularly sensitive to reductions in business and consumer spending by their respective customers, and which in turn have impacted our net revenue.
We have continued to experience inflationary pressures in 2024, which have adversely impacted some of our end-users, such as automotive companies; distributors; electronic manufacturers; machinery manufacturers; e-commerce and mail-order fulfillment firms; and other end-users that are particularly sensitive to reductions in business and consumer spending by their respective customers, and which in turn have impacted our net revenue.
On a constant currency basis, the increase was attributable to an increase of cushioning sales of $2.7 million, an increase in wrapping sales of $0.5 million, an increase in other sales of $2.1 million, partially offset by a decrease in void-fill sales of $3.0 million compared to 2022.
The increase of $25.9 million, or 18.9%, was attributable to an increase in void-fill sales of $27.4 million, or 39.3%, and an increase in other net revenue of $2.7 million, or 60.0%, partially offset by a decrease in cushioning sales of $3.7 million and a decrease in wrapping sales of $0.5 million.
Off-Balance Sheet Arrangements We did not have any off-balance sheet arrangements as of December 31, 2023. Critical Accounting Policies and Estimates Our accounting principles and the methods of applying these principles are in accordance with U.S. GAAP, which often require the judgment of management in the selection and application of certain accounting principles and methods.
We have various contractual obligations and commercial commitments that are recorded as liabilities in our Consolidated Financial Statements. Off-Balance Sheet Arrangements We did not have any off-balance sheet arrangements as of December 31, 2024. Critical Accounting Policies and Estimates Our accounting principles and the methods of applying these principles are in accordance with U.S.
Additionally, currency rate fluctuations accounted for approximately 1.3% of the percentage increase in 2023 over the prior year. Operating expenses Selling, General, and Administrative (“SG&A”) Expenses. SG&A expenses for 2023 were $91.8 million, a decrease of $13.7 million, or 13.0%, from $105.5 million in 2022.
Production costs include costs from materials, labor and overhead. Operating expenses Selling, General, and Administrative (“SG&A”) Expenses. SG&A expenses for 2023 were $91.8 million, a decrease of $13.7 million, or 13.0%, from $105.5 million in 2022.
Presentation and Reconciliation of GAAP to Non-GAAP Measures Our consolidated financial statements are prepared in accordance with U.S. 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 will continue to evaluate the impact of inflationary pressures on our profitability and cash flows as well as our end-users. Non-GAAP Measures Earnings Before Interest, Taxes, Depreciation and Amortization (“EBITDA”) and Adjusted EBITDA (“AEBITDA”) Our consolidated financial statements are prepared in accordance with U.S. GAAP.
Because of these factors, Ranpak recognizes machine revenue over time on a contract-by-contract basis using an input method, based on the percentage of costs and effort incurred to complete the construction of the machine. We sell our products to end-users primarily through an established distributor network and direct sales to select end-users.
Because of these factors, we recognize machine revenue over time on a contract-by-contract basis using an input method, based on the percentage of costs and effort incurred to complete the construction of the machine. We also sell extended warranties, preventative maintenance services, spare parts and spare part packages related to our sale of Automation products.
Machine lease revenue is recognized on a straight-line basis over the terms of the PPS systems agreements with customers, which have durations of less than one year.
Machine lease revenue is recognized on a straight-line basis over the terms of the PPS systems agreements with customers, which have durations of less than one year. In paper consumables sales for both distributor agreements and direct agreements, we have determined the contract to be a combination of the master service agreement (“MSA”) and purchase order (“PO”).
We recognize incremental costs to obtain a contract as an expense when incurred if the amortization period of the asset that otherwise would have been recognized is one year or less. For example, we generally expense sales commissions when incurred because the contract term is less than one year. These costs are recorded within sales and marketing expenses. Goodwill .
Maintenance revenue is based on a fixed fee that is recognized straight-line on the basis that the level of effort is consistent over the term of the contract. We recognize incremental costs to obtain a contract as an expense when incurred if the amortization period of the asset that otherwise would have been recognized is one year or less.
See also “ Presentation and Reconciliation of GAAP to Non-GAAP Measures ” for further details: Year Ended December 31, 2023 2022 $ Change % Change North America $ 137.3 $ 134.7 $ 2.6 1.9 Europe/Asia 199.0 191.8 7.2 3.8 Net revenue $ 336.3 $ 326.5 $ 9.8 3.0 Cushioning machines $ 145.8 $ 140.3 $ 5.5 3.9 Void-Fill machines 133.9 130.6 3.3 2.5 Wrapping machines 36.0 40.5 (4.5 ) (11.1 ) Other 20.6 15.1 5.5 36.4 Net revenue $ 336.3 $ 326.5 $ 9.8 3.0 Non-GAAP Constant Currency Year Ended December 31, 2023 2022 $ Change % Change North America $ 137.3 $ 134.7 $ 2.6 1.9 Europe/Asia 211.7 209.4 2.3 1.1 Net revenue $ 349.0 $ 344.1 $ 4.9 1.4 Cushioning machines $ 152.0 $ 149.2 $ 2.8 1.9 Void-Fill machines 138.3 136.6 1.7 1.2 Wrapping machines 37.1 41.8 (4.7 ) (11.2 ) Other 21.6 16.5 5.1 30.9 Net revenue $ 349.0 $ 344.1 $ 4.9 1.4 Net revenue for 2023 was $336.3 million compared to net revenue of $326.5 million in 2022, an increase of $9.8 million or 3.0%.
See also “ Non-GAAP Measures ” for further details: Year Ended December 31, Constant Currency (Non-GAAP) % Change (1) 2023 2022 $ Change % Change Cushioning $ 145.8 $ 140.3 $ 5.5 3.9 1.8 Void-Fill machines 133.9 130.6 3.3 2.5 1.5 Wrapping machines 36.0 40.5 (4.5) (11.1) (11.9) Other 20.6 15.1 5.5 36.4 33.8 Net revenue $ 336.3 $ 326.5 $ 9.8 3.0 1.4 (1) The Constant Currency (Non-GAAP) % Change excludes the impact of foreign currency translation effects when comparing current results to the prior year.
Separately, a hypothetical increase in the WACC by approximately 0.7% would have resulted in an impairment charge in the North America reporting unit. We believe that our estimates and assumptions used in our annual impairment assessment are reasonable but are subject to change from period to period.
We believe that our estimates and assumptions used in our annual impairment assessment are reasonable but are subject to change from period to period.
However, EBITDA and AEBITDA have limitations as analytical tools, and you should not consider them in isolation or as substitutes for analysis of our results as reported under GAAP. In particular, EBITDA and AEBITDA should not be viewed as substitutes for, or superior to, net income (loss) prepared in accordance with GAAP as a measure of profitability or liquidity.
In particular, non-GAAP financial measures should not be viewed as substitutes for, or superior to, net loss prepared in accordance with U.S. GAAP as a measure of profitability or liquidity.
(3) Represents amortization of capitalized costs related to the implementation of the global ERP system, which are included in SG&A. Liquidity and Capital Resources 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.
Refer to further discussion in “Non-GAAP Measures.” 43 Table of Contents Liquidity and Capital Resources 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.
Sales taxes collected from customers and remitted to governmental authorities are accounted for on a net basis and therefore are excluded from net revenue on the Consolidated Statements of Operations. Charges for rebates and other allowances are recognized as a deduction from revenue on an accrual basis in the period in which the associated revenue is recorded.
Sales, value-added, and other taxes collected from customers and remitted to governmental authorities are accounted for on a net basis and therefore are excluded from revenue on the Consolidated Statements of Operations and Comprehensive Income (Loss). Impairment of Goodwill, Indefinite-Lived Intangible Assets, and Long-Lived Assets.
The First Lien Term Facility matures in 2026 and the Revolving Facility matures in 2025. As of December 31, 2023, no amounts were outstanding under the Revolving Facility. The Revolving Facility includes borrowing capacity available for standby letters of credit of up to $5.0 million. Any issuance of letters of credit reduces the amount available under the revolving facility.
The Revolving Facility includes borrowing capacity available for standby letters of credit of up to $50.0 million. Any issuance of letters of credit reduces the amount available under the revolving facility. As of December 31, 2024, we had $1.2 million committed to outstanding letters of credit, leaving net availability under the Revolving Facility at $48.8 million.
In 2022, inflationary pressures increased the costs of paper as well as shipping and logistics, among other costs, and the conflict in Ukraine caused certain headwinds including increased energy costs. Higher costs due to inflation and the conflict in Ukraine were partially offset by price increases, which mitigated the impact on our operating results.
Higher costs due to inflation were partially offset by price increases, which mitigated the impact on our operating results.
We expect our capital expenditures to increase as we continue to grow our business, expand our manufacturing footprint, and upgrade our existing systems and facilities. We continue to evaluate our inventory requirements and adjust according to our volume forecasts.
We continue to evaluate our inventory requirements and adjust according to our volume forecasts.
Cost of Goods Sold Cost of goods sold for 2023 totaled $213.0 million, a decrease of $13.9 million, or 6.1%, compared to $226.9 million in 2022. The decrease was primarily due to lower raw material costs and favorable currency exchange rates, partially offset by an increase in volume and increased manufacturing input costs.
Cost of Sales Cost of sales for 2023 totaled $213.0 million, a decrease of $13.9 million, or 6.1%, compared to $226.9 million in 2022.
Our lease agreements with customer for PPS systems are for one year, or less, and renew annually. Revenue for paper consumables is recognized based on shipping terms, which is the point in time the customer obtains control of the promised goods.
Revenue is recognized when control of the promised goods or services is transferred to customers in an amount that reflects the consideration expected to be received in exchange for those goods or services. Revenue for paper consumables is recognized based on shipping terms, which is the point in time the customer obtains control of the promised goods.
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.
Borrowings under the Facilities, at our option, bear interest at either (1) the secured overnight financing rate (“SOFR”) plus 4.50% or (2) the base rate plus 3.50%, in each case assuming a First Lien Leverage Ratio, as defined in the 2024 Credit Agreement, of greater than 3.60:1.00, and subject to a leverage-based step-down to 4.25% for SOFR borrowing and 3.25% for base rate borrowings, respectively.
Net revenue was positively impacted by increases in cushioning, void-fill, and other revenue, partially offset by decreases in wrapping.
The increase of $6.7 million, or 3.4%, was driven by increases in void-fill of $5.7 million, wrapping of $1.6 million, and other net revenue of $5.8 million, partially offset by a decrease in cushioning net revenue of $6.4 million.
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.
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. We believe that EBITDA and AEBITDA provide useful information to investors and others in understanding and evaluating our operating results in the same manner as our management and board of directors.
Cash used in investing activities was $37.9 million in 2022 and reflects cash used for production of converter equipment and the renovation of our global headquarters in Concord, Ohio, and an investment in Pickle, partially offset by cash received in termination of cross-currency swaps.
Cash Flows Used in Investing Activities Net cash used in investing activities was $32.5 million in 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, partially offset by proceeds from sale of patents of $5.4 million.
Cash provided by operating activities was $1.1 million in 2022. The increase in operating cash flows is primarily due to changes in working capital adjustments and decreased input costs.
Cash provided by operating activities was $52.6 million in 2023. The decrease in cash provided by operating activities was primarily due to changes in working capital, in particular significant increases in accounts receivable and inventories in the current year compared to prior year balances.
Net revenue in Europe/Asia for 2023 totaled $199.0 million compared to net revenue in Europe/Asia of $191.8 million in 2022.
Europe/Asia Year Ended December 31, 2023 2022 $ Change % Change Cushioning $ 103.1 $ 97.7 $ 5.4 5.5 Void-Fill 64.1 65.5 (1.4) (2.1) Wrapping 15.7 14.9 0.8 5.4 Other 16.1 13.7 2.4 17.5 Net revenue $ 199.0 $ 191.8 $ 7.2 3.8 Net revenue in Europe/Asia for 2023 totaled $199.0 million compared to net revenue in Europe/Asia of $191.8 million in 2022.
This data is based on our historical financial statements included elsewhere in this Report, adjusted (where applicable) to reflect a constant currency presentation between periods for the convenience of readers.
This data is based on our historical financial statements included elsewhere in this Report. Refer to “ Non-GAAP Measures ” and “ Reconciliation of U.S. GAAP to Non-GAAP Measures ” for additional information and a reconciliation of EBITDA and AEBITDA to our net loss under U.S.
Constant currency net revenue was $349.0 million for 2023, a $4.9 million, or 1.4%, increase from constant currency net revenue of $344.1 million for 2022. On a constant currency basis, cushioning increased $2.8 million, or 1.9%, to $152.0 million from $149.2 million. Void-fill increased $1.7 million, or 1.2%, to $138.3 million from $136.6 million.
Cushioning decreased $10.1 million, or 6.9% (7.1% at constant currency), to $135.7 million from $145.8 million; void-fill increased $33.1 million, or 24.7% (24.9% at constant currency), to $167.0 million from $133.9 million; wrapping increased $1.1 million, or 3.1%, to $37.1 million from $36.0 million; and other net revenue increased $8.5 million, or 41.3%, to $29.1 million from $20.6 million, for 2024 compared to 2023.
Constant currency net revenue in Europe/Asia was $211.7 million for 2023, a $2.3 million, or 1.1%, increase from constant currency net revenue of $209.4 million for 2022.
Segment EBITDA for Europe/Asia was $26.6 million for 2023 compared to $14.5 million in 2022, an increase of $12.1 million, or 83.4%.
In addition, we include certain other unaudited, non-GAAP constant currency data for 2023 and 2022. This data is based on our historical financial statements included elsewhere in this Report, adjusted (where applicable) to reflect a constant currency presentation between periods for the convenience of readers.
This data is based on our historical financial statements included elsewhere in this Report. Refer to “ Non-GAAP M easures ” and “ Reconciliation of U .S. GAAP to Non-GAAP Measures ” for additional information and a reconciliation of EBITDA and AEBITDA to our net loss under U.S. GAAP.
Removed
For a discussion of the year ended December 31, 2022 compared to the year ended December 31, 2021, please refer to Part II, Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report on Form 10-K for the year ended December 31, 2022. All amounts and percentages are approximate due to rounding.
Added
For example, energy prices in Europe have experienced recent increased volatility, and such volatility has, in the past, increased the cost of paper.
Removed
Highlights from fiscal year 2023 compared with fiscal 2022 included: • Net loss for 2023 decreased $14.3 million to $27.1 million from a net loss of $41.4 million in 2022. • EBITDA for 2023 increased $29.7 million to $62.6 million from $32.9 million in 2022. • AEBITDA for 2023 increased $9.7 million to $76.5 million from $66.8 million in 2022.
Added
See “ Quantitative and Qualitative Disclosures About Market Risk . ” Inflationary Pressures and Other Costs.
Removed
Comparison of 2022 to 2021 Discussions of 2021 items and comparisons between 2022 and 2021 that are not included in this Report can be found in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Part II, Item 7 of our Annual Report on Form 10-K for 2022.
Added
GAAP data for the same periods presented. Constant Currency We operate globally, and a substantial portion of our net revenue and operations is denominated in foreign currencies, primarily the Euro. We calculate the year over-year impact of foreign currency movements using prior period foreign currency rates applied to current year results.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changeRefer to Note 11 — Long-Term Debt and Note 12 —Derivative Instruments to the Notes to consolidated financial statements included elsewhere in this Report for additional information on our indebtedness and interest rate swap agreements. 39 Foreign Currency Exchange Rate Risk We are exposed to foreign currency exchange risk related to our transactions and subsidiaries’ balances that are denominated in currencies other than USD, our reporting currency.
Biggest changeForeign Currency Exchange Rate Risk We are exposed to foreign currency exchange risk related to our transactions and subsidiaries’ balances that are denominated in currencies other than USD, our reporting currency. See “Effect of Currency Fluctuations ” in Item 7 previously for more information about our foreign currency exchange rate exposure.
A 10% increase or decrease in the value of the Euro to USD would have caused our reported net revenue for 2023 to increase or decrease by approximately $19.9 million.
A 10% increase or decrease in the value of the Euro to USD would have caused our reported net revenue for 2024 to increase or decrease by approximately $20.6 million.
Commodity Price Risk While our business is significantly impacted by price fluctuations related to the purchase, production and sale of paper products, we historically have negotiated prices with suppliers on an annual basis and negotiate prices with distributors reflecting competitive market terms, which mitigates the impact market price fluctuations in paper purchase or sale prices may have on our operating results.
Commodity Price Risk While our business is significantly impacted by price fluctuations related to the purchase, production and sale of paper products, we are typically not directly exposed to market price fluctuations in paper purchase or sale prices as we historically have negotiated prices with suppliers on an annual basis and negotiate prices with distributors reflecting competitive market terms.
ITEM 7A. QUANTITATIVE AND QUALITAT IVE DISCLOSURES ABOUT MARKET RISK Interest Rate Risk Changes in interest rates affect the amount of interest income we earn on cash, cash equivalents and short-term investments and the amount of interest expense we pay on borrowings under the floating rate portions of our Facilities.
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK Interest Rate Risk Changes in interest rates affect the amount of interest income we earn on cash and cash equivalents and the amount of interest expense we pay on borrowings under the floating rate portions of our outstanding senior secured credit facilities.
See “Effect of Currency Fluctuations ” in Item 7 previously for more information about Ranpak’s foreign currency exchange rate exposure. We seek to naturally hedge our foreign exchange transaction exposure by matching the transaction currencies for our cash inflows and outflows and maintaining access to credit in the principal currencies in which we conduct business.
We seek to naturally hedge our foreign exchange transaction exposure by matching the transaction currencies for our cash inflows and outflows and maintaining access to credit in the principal currencies in which we conduct business. Additionally, we hedge some of our exposure to foreign currency translation with a cross-currency swap.
Our strategy has generally been to obtain competitive prices for our products and services and allow operating results to reflect market price movements dictated by supply and demand.
Our strategy has generally been to obtain competitive prices for our products and services and allow operating results to reflect market price movements dictated by supply and demand. However, due to global inflation and other macroeconomic factors, we may be subject to significantly more commodity price volatility than we have historically experienced. 48 Table of Contents
For 2023, net revenue denominated in currencies other than USD amounted to $199.0 million or 59.2% of our net revenue for the period. Substantially all of this amount was denominated in Euro.
Refer to Note 12 — Derivative Instruments to the Notes to consolidated financial statements included elsewhere in this Report for additional information. For 2024, net revenue denominated in currencies other than USD amounted to $205.7 million or 55.8% of our net revenue for the period. Substantially all of this amount was denominated in Euro.
A hypothetical 100 basis point increase or decrease in the applicable base interest rates under our credit facilities would have resulted in a $10.0 million impact on our cash interest expense for 2023. We use fixed interest rate swap agreements to manage this exposure.
A hypothetical 100 basis point increase or decrease in the applicable base interest rates would have resulted in a $9.9 million impact on our interest expense under our outstanding senior secured credit facilities for 2024. Refer to Note 11 — Long-Term Debt to the Notes to consolidated financial statements included elsewhere in this Report for additional information on our indebtedness.
Removed
Additionally, we hedge some of our exposure to foreign currency translation with a cross currency swap. Refer to Note 12 — Derivative Instruments to the Notes to consolidated financial statements included elsewhere in this Report for additional information.
Removed
However, due to global inflation and other macroeconomic factors, as well as geopolitical unrest, in 2022 we were subject to significantly more commodity price volatility than we have historically experienced, and we may be exposed to this volatility in the future.
Removed
Where possible, we seek to pass increases in paper prices on to our customers, but we are unable to predict our ability to do so in the future. We expect some continued pressure on our gross margin in the medium term relative to our historical margin profile as a result of these factors. 40

Other PACK 10-K year-over-year comparisons