Affirms 2022 Adjusted EBITDA guidance
of $75 million
Upsized new credit facility to $350
million
Westrock Coffee Holdings, LLC ("Westrock Coffee" or the
"Company") today reported financial results for the first quarter
ended March 31, 2022, affirmed its full year Adjusted EBITDA
guidance of $75 million in 2022, and announced the upsizing of its
new credit facility to $350 million.
First Quarter 2022 Highlights:
- Consolidated net sales were $186.4 million, an increase of
$31.1 million, or 20%, from the prior year period.
- Net loss was $4.7 million compared to a net loss of $6.1
million in the prior year period, a decrease of 23%.
- Adjusted EBITDA was $11.4 million, an increase of $3.1 million,
or 37%, from the prior year period.
In addition, the Company announced it is upsizing the credit
facility it will enter in connection with its previously announced
transaction with Riverview Acquisition Corp. from $300 million to
$350 million in response to strong demand from prospective lenders
to participate in the facility.
Finally, the Company announced that its new plant in Malaysia
commenced production in April as planned and is on track to ship
its first product in June 2022.
Scott T. Ford, Co-Founder and CEO, stated, "We are pleased with
the strong start to the year, particularly given the numerous
factors currently impacting the U.S. consumer, increased inflation,
and the volume impacts of Covid restarts. Our team once again did
an exceptional job of delivering on time and in full for our
customers and that continues to open new opportunities for growth
across the numerous industry groups and product types that we
serve."
Quarterly Results
Consolidated net sales for the first quarter of 2022 increased
20% to $186.4 million, compared to $155.3 million for the first
quarter of 2021. Net loss for the first quarter of 2022 was $4.7
million, compared to a net loss of $6.1 million for the first
quarter of 2021. Adjusted EBITDA for the first quarter of 2022 was
$11.4 million, representing Adjusted EBITDA growth of 37% when
compared to the prior year first quarter.
Westrock Coffee's Beverage Solutions segment contributed $148.4
million of net sales and $10.4 million of Adjusted EBITDA for the
first quarter of 2022, compared to $127.3 million and $8.1 million,
respectively, for the first quarter of 2021. This represents
year-over-year sales growth of 17%, and year-over-year Adjusted
EBITDA growth of 28%. The increase in first quarter 2022 EBITDA was
driven by a favorable customer and product mix, favorable purchase
price variances, and improved operational efficiencies.
Sales in the Company’s Sustainable Sourcing & Traceability
(“SS&T”) segment, net of intersegment revenues, grew to $38.1
million in the first quarter of 2022, compared to $28.1 million in
the first quarter of 2021, driven by an approximately 20% increase
in volumes and by higher green coffee prices during the first
quarter of 2022 compared to the first quarter of 2021. Westrock
Coffee's SS&T segment contributed $1.0 million and $0.2 million
of Adjusted EBITDA in the first quarter of 2022 and 2021,
respectively.
Transaction Update
In connection with the Company's previously announced
transaction with Riverview Acquisition Corp. (Nasdaq: RVAC),
Westrock Coffee secured a financing commitment from Wells Fargo for
a $300 million Senior Secured Pro Rata Credit Facility. In response
to strong demand from prospective lenders to participate in the
facility, the size of the credit facility has been increased to a
$350 million Senior Secured Pro Rata Credit Facility, which will
include a $175 million term loan and a $175 million revolving loan
commitment. Upon closing, the funds will be used to re-finance the
Company’s existing debt and fund its expansion plans. The
transaction remains on track and is expected to close by the end of
the third quarter of 2022. The Company will retain the Westrock
Coffee name and be listed on Nasdaq under the ticker symbol
"WEST."
An updated investor presentation that includes the Company’s
results for the first quarter of 2022 is available on the Company’s
website here.
Malaysia Facility Update
The Company announced today that its newest production facility
in Johor Bahru, Malaysia commenced production in April 2022, and
that the Company is on schedule to ship products to customers in
the Asia Pacific region in June 2022.
About Westrock Coffee
Westrock Coffee Holdings, LLC is a leading integrated coffee,
tea, flavors, extracts, and ingredients solutions provider in the
U.S., providing coffee sourcing, supply chain management, product
development, roasting, packaging, and distribution services to the
retail, food service and restaurant, convenience store and travel
center, non-commercial account, CPG, and hospitality industries
around the world. With offices in 10 countries, the company sources
coffee and tea from 35 origin countries.
About Riverview Acquisition Corporation
Riverview Acquisition Corp. is a blank check company formed for
the purpose of effecting a merger, capital stock exchange, asset
acquisition, stock purchase, reorganization or similar business
combination with one or more businesses. Management is led by Chief
Executive Officer R. Brad Martin, President Charles K. Slatery, and
Chief Financial Officer Will Thompson.
Additional Information and Where to Find It
In connection with the proposed transaction, Westrock Coffee has
filed with the Securities and Exchange Commission ("SEC") a
registration statement on Form S-4 that includes a proxy statement
of Riverview and a prospectus of Westrock Coffee, as well as other
relevant documents concerning the proposed transaction. INVESTORS,
SECURITY HOLDERS AND OTHER INTERESTED PERSONS ARE URGED TO READ THE
REGISTRATION STATEMENT AND THE PROXY STATEMENT/PROSPECTUS REGARDING
THE TRANSACTION AND ANY OTHER RELEVANT DOCUMENTS FILED WITH THE
UNITED STATES SECURITIES AND EXCHANGE COMMISSION, AS WELL AS ANY
AMENDMENTS OR SUPPLEMENTS TO THOSE DOCUMENTS, BECAUSE THEY CONTAIN
OR WILL CONTAIN IMPORTANT INFORMATION. The definitive proxy
statement / prospectus will be mailed to stockholders of Riverview
as of a record date to be established for voting on the proposed
transaction. Riverview stockholders may obtain a free copy of the
proxy statement/prospectus, as well as other filings containing
information about Westrock Coffee and Riverview, without charge, at
the SEC’s website (http://www.sec.gov). Copies of the proxy
statement/prospectus can also be obtained, without charge, by
directing a request to Riverview Acquisition Corp., 510 South
Mendenhall Road, Suite 200, Memphis, TN 38117, (901) 767-5576.
Participants in Solicitation
Riverview and its directors and executive officers may be deemed
participants in the solicitation of proxies from Riverview’s
stockholders with respect to the proposed business combination. A
list of the names of those directors and executive officers and a
description of their interests in Riverview is contained in
Westrock Coffee's registration statement on Form S-4, filed on
April 25, 2022, with the SEC, which is available free of charge at
the SEC’s website at www.sec.gov.
The Company and its directors and executive officers may also be
deemed to be participants in the solicitation of proxies from the
stockholders of Riverview in connection with the proposed business
combination. A list of the names of such directors and executive
officers and information regarding their interests in the proposed
business combination is included in the proxy statement/prospectus
for the proposed business combination that Westrock Coffee has
filed with the SEC.
No Offer or Solicitation
This communication does not constitute (i) a solicitation of a
proxy, consent, or authorization with respect to any securities or
in respect of the business combination or (ii) an offer to sell, a
solicitation of an offer to buy, or a recommendation to purchase,
any securities of Westrock Coffee, Riverview, the combined company
or any of their respective affiliates. No offering of securities
shall be made except by means of a prospectus meeting the
requirements of Section 10 of the Securities Act of 1933, as
amended, or an exemption therefrom, nor shall any sale of
securities in any states or jurisdictions in which such offer,
solicitation or sale would be unlawful prior to registration or
qualification under the securities laws of any such jurisdiction be
affected. No securities commission or securities regulatory
authority in the United States or any other jurisdiction has in any
way passed upon the merits of the business combination or the
accuracy or adequacy of this communication.
Forward Looking Statements
Certain statements included in this communication that are not
historical facts are forward-looking statements. Forward-looking
statements generally are accompanied by words such as "believe,"
"may," "will," "estimate," "continue," "anticipate," "intend,"
"expect", "should," "would," "plan," "predict,” "potential,"
"seem," "seek," "future," "outlook," and similar expressions that
predict or indicate future events or trends or that are not
statements of historical matters. These forward-looking statements
include, but are not limited to, certain plans, expectations,
goals, projections, and statements about the future operating and
financial performance of Westrock Coffee, benefits of the proposed
transaction, the plans, objections, expectations, and intentions of
Westrock Coffee and Riverview, the expected timing of completion of
the transaction, and other statements that are not historical
facts. These statements are based on information available to
Westrock Coffee and Riverview as of the date hereof and neither
Westrock Coffee nor Riverview is under any duty to update any of
the forward-looking statements after the date of this Presentation
to conform these statements to actual results. These statements are
based on various assumptions, whether or not identified in this
communication, and on the current expectations of the respective
management of Westrock Coffee and Riverview as of the date hereof
and are not predictions of actual performance. These
forward-looking statements are provided for illustrative purposes
only and are not intended to serve as and should not be relied on
by an investor or others as, a guarantee, an assurance, a
prediction, or a definitive statement of fact or probability.
Actual events and circumstances are difficult or impossible to
predict and will differ from assumptions. Many actual events and
circumstances are beyond the control of Westrock Coffee and
Riverview. These forward-looking statements are subject to a number
of risks and uncertainties, including, but not limited to, changes
in domestic and foreign business, market, financial, political, and
legal conditions; the inability of the parties to successfully or
timely consummate the proposed transaction, including the risk that
any regulatory approvals or the SEC’s declaration of the
effectiveness of our prospectus/proxy statement are not obtained,
are delayed or are subject to unanticipated conditions that could
adversely affect the combined company or the expected benefits of
the proposed transaction or that the approval of the requisite
equity holders of Riverview is not obtained; failure to realize the
anticipated benefits of the proposed transaction; risks relating to
the uncertainty of the projected financial information with respect
to Westrock Coffee; risks related to the rollout of Westrock
Coffee's business and the timing of expected business milestones;
the effects of competition on Westrock Coffee's business; the
amount of redemption requests made by Riverview's stockholders; the
ability of Riverview or Westrock Coffee to issue equity or
equity-linked securities or obtain debt financing in connection
with the proposed transaction or in the future; and those factors
discussed in Riverview's final prospectus dated August 8, 2021,
,Riverview's annual report on Form 10-K for the year ended December
31, 2021, Riverview’s quarterly report on Form 10-Q for the three
months ended March 31, 2022, Westrock Coffee’s registration
statement on Form S-4 filed on April 25, 2022, in each case, under
the heading "Risk Factors", and other documents Riverview or
Westrock Coffee has filed, or will file, with the SEC. If any of
these risks materialize or our assumptions prove incorrect, actual
results could differ materially from the results implied by these
forward-looking statements. There may be additional risks that
neither Riverview nor Westrock Coffee presently know, or that
Riverview or Westrock Coffee currently believe are immaterial, that
could also cause actual results to differ from those contained in
the forward-looking statements. In addition, the forward-looking
statements reflect Riverview's and Westrock Coffee's expectations,
plans, or forecasts of future events and views as of the date of
this communication. Riverview and Westrock Coffee anticipate that
subsequent events and developments will cause Riverview's and
Westrock Coffee's assessments to change. However, while Riverview
and Westrock Coffee may elect to update these forward-looking
statements at some point in the future, Riverview and Westrock
Coffee specifically disclaim any obligation to do so. These
forward-looking statements should not be relied upon as a
representation of Riverview's and Westrock Coffee's assessments as
of any date subsequent to the date of this communication.
Accordingly, undue reliance should not be placed upon the
forward-looking statements.
Westrock Coffee Holdings,
LLC Consolidated Balance Sheets (Unaudited)
(Thousands, except unit values)
March 31, 2022
December 31, 2021
ASSETS
Cash and cash equivalents
$
11,940
$
19,344
Restricted cash
6,247
3,526
Accounts receivable, net of allowance for
credit losses of $3,011 and $3,749, respectively
94,360
85,795
Inventories
137,596
109,166
Derivative assets
18,223
13,765
Prepaid expenses and other current
assets
8,272
6,410
Total current assets
276,638
238,006
Property, plant and equipment, net
130,901
127,613
Goodwill
97,053
97,053
Intangible assets, net
124,215
125,914
Other long-term assets
16,557
4,434
Total Assets
$
645,364
$
593,020
LIABILITIES, REDEEMABLE UNITS, AND
UNITHOLDERS' DEFICIT
Current maturities of long-term debt
$
8,722
$
8,735
Short-term debt
52,545
4,510
Short-term related party debt
—
34,199
Accounts payable
98,116
80,405
Derivative liabilities
12,453
14,021
Accrued expenses and other current
liabilities
30,959
26,370
Total current liabilities
202,795
168,240
Long-term debt, net
298,401
277,064
Subordinated related party debt
13,300
13,300
Deferred income taxes
22,390
25,515
Other long-term liabilities
12,476
3,028
Total liabilities
549,362
487,147
Commitments and contingencies
Series A Redeemable Common Equivalent
Preferred Units: $0 par value, 222,150,000 units authorized, issued
and outstanding
271,042
264,729
Series B Redeemable Common Equivalent
Preferred Units: $0 par value, 17,000,000 units authorized, issued
and outstanding
17,566
17,142
Unitholders' Deficit
Common Units: $0 par value 375,420,213
units authorized; 332,209,476 units and 329,042,787 units issued
and outstanding at March 31, 2022 and December 31, 2021,
respectively
—
—
Additional paid-in-capital
60,667
60,973
Accumulated deficit
(263,338)
(251,725)
Accumulated other comprehensive income
7,158
12,018
Total unitholders' deficit attributable
to Westrock Coffee Holdings, LLC
(195,513)
(178,734)
Noncontrolling interest
2,907
2,736
Total unitholders' deficit
(192,606)
(175,998)
Total Liabilities, Redeemable Units and
Unitholders' Deficit
$
645,364
$
593,020
Westrock Coffee Holdings,
LLC Consolidated Statements of Operations
(Unaudited)
Three Months Ended March
31,
(Thousands, except per unit data)
2022
2021
Net Sales
$
186,428
$
155,331
Costs of sales
147,997
122,196
Gross profit
38,431
33,135
Selling, general and administrative
expense
35,061
31,687
Acquisition, restructuring and integration
expense
2,483
1,017
Loss on disposal of property, plant and
equipment
105
268
Total operating expenses
37,649
32,972
Income from operations
782
163
Other (income) expense, net
(977)
(180)
Interest expense
8,048
7,408
Loss before income taxes
(6,289)
(7,065)
Income tax benefit
(1,584)
(941)
Net loss
(4,705)
(6,124)
Net income attributable to noncontrolling
interest
171
310
Net loss attributable to
unitholders
(4,876)
(6,434)
Accumulating preferred dividends
(6,737)
(5,739)
Net loss attributable to common
unitholders
$
(11,613)
$
(12,173)
(Loss) earnings per common
unit:
Basic
$
(0.04)
$
(0.04)
Diluted
$
(0.04)
$
(0.04)
Weighted-average number of units
outstanding
Basic
330,169
327,071
Diluted
330,169
327,071
Westrock Coffee Holdings,
LLC Consolidated Statements of Cash Flows
(Unaudited)
Three Months Ended March
31,
(Thousands)
2022
2021
Cash flows from operating
activities:
Net loss
$
(4,705)
$
(6,124)
Adjustments to reconcile net loss to net
cash used in operating activities:
Depreciation and amortization
6,014
6,243
Equity-based compensation
171
306
Paid-in-Kind interest added to debt
principal
147
543
Allowance for credit losses
897
44
Amortization of deferred financing fees
included in interest expense
523
445
Loss on disposal of property, plant and
equipment
105
268
Mark-to-market adjustments
(1,145)
(1,973)
Foreign currency transactions
137
60
Change in deferred income taxes
(1,584)
(952)
Change in operating assets and
liabilities:
Accounts receivable
(9,468)
(7,380)
Inventories
(34,242)
4,527
Derivative assets and liabilities
(5,460)
785
Prepaid expense and other assets
(14,216)
(199)
Accounts payable
17,895
7,872
Accrued liabilities and other
6,531
(5,747)
Net cash used in operating activities
(38,400)
(1,282)
Cash flows from investing
activities:
Additions to property and equipment
(8,697)
(4,176)
Additions to intangible assets
—
(57)
Proceeds from sale of property and
equipment
861
575
Net cash used in investing activities
(7,836)
(3,658)
Cash flows from financing
activities:
Payments on debt
(13,982)
(17,834)
Proceeds from debt
56,118
21,822
Payment of debt issuance costs
—
(597)
Net unit settlement
(477)
(162)
Net cash provided by financing
activities
41,659
3,229
Effect of exchange rate changes on
cash
(106)
—
Net decrease in cash and cash equivalents
and restricted cash
(4,683)
(1,711)
Cash and cash equivalents and restricted
cash at beginning of period
22,870
18,652
Cash and cash equivalents and
restricted cash at end of period
$
18,187
$
16,941
Westrock Coffee Holdings,
LLC Reconciliation of Net Income / (Loss) to Non-GAAP
Adjusted EBITDA (Unaudited)
Three Months Ended March
31,
(Thousands)
2022
2021
Net loss
$
(4,705)
$
(6,124)
Interest expense
8,048
7,408
Income tax benefit
(1,584)
(941)
Depreciation and amortization
6,014
6,243
EBITDA
7,773
6,586
Acquisition, restructuring and integration
expense
2,483
1,017
Management and consulting fees
1,335
1,605
Equity-based compensation
171
306
Loss on disposal of property, plant and
equipment
105
268
Mark-to-market adjustments
(1,145)
(1,973)
Other, net
672
500
Adjusted EBITDA
$
11,394
$
8,309
Westrock Coffee Holdings,
LLC Reconciliation of Segment Results
(Unaudited)
Three Months Ended March
31,
(Thousands)
2022
2021
Net Sales
Beverage Solutions
$
148,362
$
127,263
Sustainable Sourcing &
Traceability1
38,066
28,068
Total of Reportable Segments
$
186,428
$
155,331
Adjusted EBITDA
Beverage Solutions
$
10,420
$
8,132
Sustainable Sourcing &
Traceability
974
177
Total of Reportable Segments
$
11,394
$
8,309
__________
1 - Net of intersegment revenues
Non-GAAP Financial Measures
We refer to EBITDA and Adjusted EBITDA in our analysis of our
results of operations, which are not required by, or presented in
accordance with, accounting principles generally accepted in the
United States (“GAAP”). While we believe that net (loss) income, as
defined by GAAP, is the most appropriate earnings measure, we also
believe that EBITDA and Adjusted EBITDA are important non-GAAP
supplemental measures of operating performance as they contribute
to a meaningful evaluation of the Company’s future operating
performance and comparisons to the Company's past operating
performance. Additionally, we use these non-GAAP financial measures
in evaluating the performance of our segments, to make operational
and financial decisions and in our budgeting and planning process.
The Company believes that providing these non-GAAP financial
measures to investors helps investors evaluate the Company’s
operating performance, profitability and business trends in a way
that is consistent with how management evaluates such
performance.
We define “EBITDA” as net (loss) income, as defined by GAAP,
before interest expense, provision for income taxes and
depreciation and amortization. We define “Adjusted EBITDA” as
EBITDA before equity-based compensation expense and the impact,
which may reoccur, of acquisition, restructuring and integration
related costs, including management services and consulting
agreements entered into in connection with the acquisition of
S&D Coffee, Inc., impairment charges, non-cash mark-to-market
adjustments, certain costs specifically excluded from the
calculation of EBITDA under our material debt agreements, the write
off of unamortized deferred financing costs, costs incurred as a
result of the early repayment of debt, gains or losses on
dispositions, and other similar or infrequent items (although we
may not have had such charges in the periods presented). We believe
EBITDA and Adjusted EBITDA are important supplemental measures to
net income (loss) because they provide additional information to
evaluate our operating performance on an unleveraged basis. In
addition, Adjusted EBITDA is calculated similar to defined terms in
our material debt agreements used to determine compliance with
specific financial covenants.
Since EBITDA and Adjusted EBITDA are not measures calculated in
accordance with GAAP, they should be viewed in addition to, and not
be considered as alternatives for, net income (loss) determined in
accordance with GAAP. Further, our computations of EBITDA and
Adjusted EBITDA may not be comparable to that reported by other
companies that define EBITDA and Adjusted EBITDA differently than
we do.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20220607005433/en/
Media: ICR for Westrock: Westrock@icrinc.com Investor
Relations: ICR for Westrock: WestrockIR@icrinc.com
Riverview Acquisition (NASDAQ:RVAC)
Historical Stock Chart
From Jul 2024 to Aug 2024
Riverview Acquisition (NASDAQ:RVAC)
Historical Stock Chart
From Aug 2023 to Aug 2024