Closing of Merger with Riverview Scheduled
On or About August 26, 2022
Grows Net Sales by 31% Compared to the
Second Quarter of 2021
Shrinks Net Loss by 4% Compared to the
Second Quarter of 2021
Grows Adjusted EBITDA by 19% Compared to the
Second Quarter of 2021
Westrock Coffee Holdings, LLC ("Westrock Coffee" or the
"Company") today reported financial results for the second quarter
ended June 30, 2022.
Second Quarter 2022 Highlights:
- Consolidated net sales were $223.4 million in the second
quarter of 2022, an increase of $52.3 million, or 31%, from the
second quarter of 2021.
- Net loss was $5.8 million in the second quarter of 2022,
compared to a net loss of $6.1 million in the second quarter of
2021, a decrease of 4%.
- Adjusted EBITDA was $13.3 million in the second quarter of
2022, an increase of $2.1 million, or 19%, from the second quarter
of 2021.
Scott T. Ford, CEO and Co-founder, stated, "In the second
quarter, we continued to see year-over-year growth in our single
serve cup and extract product lines which reinforces the mix shift
we are seeing across our industry and allowed us to achieve first
half 2022 Adjusted EBITDA growth of 27%, compared to the first half
of 2021. The combination of our traditional seasonality trends
which are back half of the year weighted, and the back half of the
year ramp in our Adjusted EBITDA due to the startup of significant
new single serve cup volume that came online in June, sets us up
for a strong 2022.”
Mr. Ford continued, “Like our customers, our results are not
immune from the recent inflationary pressures experienced across
the country, so we are pleased to see gasoline prices beginning to
normalize. Overall, we remain very well-positioned to meet our
customers’ expanding product needs in both the short and long term
which should enable us to deliver corresponding strong financial
results over time."
Quarterly Results
Consolidated net sales for the second quarter of 2022 increased
31% to $223.4 million, compared to $171.1 million for the second
quarter of 2021. Net loss for the second quarter of 2022 was $5.8
million, compared to a net loss of $6.1 million for the second
quarter of 2021. Adjusted EBITDA for the second quarter of 2022 was
$13.3 million, representing Adjusted EBITDA growth of 19% when
compared to the prior year second quarter.
Westrock Coffee's Beverage Solutions segment contributed $170.9
million of net sales and $12.5 million of Adjusted EBITDA for the
second quarter of 2022, compared to $134.4 million and $10.3
million, respectively, for the second quarter of 2021. This
represents year-over-year net sales growth of 27%, driven by a 57%
increase in single serve cup and a 20% increase in flavors,
extracts and ingredients volumes, and year-over-year Adjusted
EBITDA growth of 21%.
Net sales in the Company’s Sustainable Sourcing &
Traceability (“SS&T”) segment, net of intersegment revenues,
grew to $52.5 million in the second quarter of 2022, compared to
$36.7 million in the second quarter of 2021, driven by a 53%
increase in average green coffee prices during the second quarter
of 2022 compared to the second quarter of 2021. Westrock Coffee's
SS&T segment contributed $0.8 million and $0.9 million of
Adjusted EBITDA in the second quarter of 2022 and 2021,
respectively.
Transaction update
As previously reported, Riverview Acquisition Corp. (NASDAQ:
RVAC) (“Riverview”) has scheduled a special meeting of its
stockholders on August 25, 2022 to approve its previously announced
business combination with Westrock Coffee. Subject to the receipt
of Riverview stockholder approval and the satisfaction of the other
closing conditions described in the transaction agreement between
Riverview and Westrock Coffee, the Company expects to complete the
merger with Riverview on or about August 26, 2022 and expects that
shares of common stock will begin trading on Nasdaq under the
symbol “WEST” on August 29, 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 was mailed to stockholders of Riverview as
of the record date of August 3, 2022. 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, initially
filed on April 25, 2022, with the SEC, and subsequently amended on
June 10, 2022, July 15, 2022, August 1, 2022 and August 3, 2022,
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
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 and
June 30, 2022, Westrock Coffee’s registration statement on Form
S-4, which was initially filed on April 25, 2022, and subsequently
amended on June 10, 2022, July 15, 2022, August 1, 2022 and August
3, 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)
June 30, 2022
December 31, 2021
ASSETS
Cash and cash equivalents
$
14,343
$
19,344
Restricted cash
3,842
3,526
Accounts receivable, net
96,001
85,795
Inventories
155,323
109,166
Derivative assets
15,692
13,765
Prepaid expenses and other current
assets
8,894
6,410
Total current assets
294,095
238,006
Property, plant and equipment, net
131,802
127,613
Goodwill
97,053
97,053
Intangible assets, net
122,565
125,914
Other long-term assets
15,931
4,434
Total Assets
$
661,446
$
593,020
LIABILITIES, REDEEMABLE UNITS, AND
UNITHOLDERS' DEFICIT
Current maturities of long-term debt
$
8,157
$
8,735
Short-term debt
67,871
4,510
Short-term related party debt
—
34,199
Accounts payable
117,871
80,405
Derivative liabilities
7,583
14,021
Accrued expenses and other current
liabilities
29,842
26,370
Total current liabilities
231,324
168,240
Long-term debt, net
297,044
277,064
Subordinated related party debt
13,300
13,300
Deferred income taxes
20,132
25,515
Other long-term liabilities
11,589
3,028
Total liabilities
573,389
487,147
Commitments and contingencies
Series A Redeemable Common Equivalent
Preferred Units: $0 par value, 222,150,000 units authorized, issued
and outstanding
277,762
264,729
Series B Redeemable Common Equivalent
Preferred Units: $0 par value, 17,000,000 units authorized, issued
and outstanding
17,991
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 June 30, 2022 and December 31, 2021,
respectively
—
—
Additional paid-in-capital
60,975
60,973
Accumulated deficit
(276,196
)
(251,725
)
Accumulated other comprehensive income
4,724
12,018
Total unitholders' deficit attributable
to Westrock Coffee Holdings, LLC
(210,497
)
(178,734
)
Noncontrolling interest
2,801
2,736
Total unitholders' deficit
(207,696
)
(175,998
)
Total Liabilities, Redeemable Units and
Unitholders' Deficit
$
661,446
$
593,020
Westrock Coffee Holdings,
LLC
Consolidated Statements of
Operations
(Unaudited)
Three Months Ended June
30,
Six Months Ended June 30,
(Thousands, except per unit data)
2022
2021
2022
2021
Net Sales
$
223,413
$
171,144
$
409,841
$
326,475
Costs of sales
184,515
136,791
332,512
258,987
Gross Profit
38,898
34,353
77,329
67,488
Selling, general and administrative
expense
35,048
31,819
70,109
63,506
Acquisition, restructuring and integration
expense
2,304
926
4,787
1,943
Loss (gain) on disposal of property, plant
and equipment
184
(25
)
289
243
Total operating expenses
37,536
32,720
75,185
65,692
Income from operations
1,362
1,633
2,144
1,796
Other (income) expense, net
(133
)
(58
)
(1,110
)
(238
)
Interest expense
8,813
8,261
16,861
15,669
Loss before income taxes
(7,318
)
(6,570
)
(13,607
)
(13,635
)
Income tax benefit
(1,499
)
(502
)
(3,083
)
(1,443
)
Net Loss
(5,819
)
(6,068
)
(10,524
)
(12,192
)
Net (loss) income attributable to
non-controlling interest
(106
)
26
65
336
Net loss attributable to
unitholders
(5,713
)
(6,094
)
(10,589
)
(12,528
)
Accumulating preferred dividends
(7,145
)
(6,109
)
(13,882
)
(11,848
)
Net loss attributable to common
unitholders
$
(12,858
)
$
(12,203
)
$
(24,471
)
$
(24,376
)
Loss per common unit:
Basic
$
(0.04
)
$
(0.04
)
$
(0.07
)
$
(0.07
)
Diluted
$
(0.04
)
$
(0.04
)
$
(0.07
)
$
(0.07
)
Weighted-average number of units
outstanding
Basic
332,209
329,043
331,195
328,062
Diluted
332,209
329,043
331,195
328,062
Westrock Coffee Holdings,
LLC
Consolidated Statements of
Cash Flows
(Unaudited)
Six Months Ended June
30,
(Thousands)
2022
2021
Cash flows from operating
activities:
Net loss
$
(10,524
)
$
(12,192
)
Adjustments to reconcile net loss to net
cash used in operating activities:
Depreciation and amortization
11,966
12,314
Equity-based compensation
479
612
Paid-in-Kind interest added to debt
principal
294
991
Allowance for credit losses
922
100
Amortization of deferred financing fees
included in interest expense
1,046
903
Loss on disposal of property, plant and
equipment
289
243
Mark-to-market adjustments
250
(1,975
)
Foreign currency transactions
91
48
Change in deferred income taxes
(3,083
)
(1,454
)
Change in operating assets and
liabilities:
Accounts receivable
(11,137
)
(5,017
)
Inventories
(53,663
)
(7,564
)
Derivative assets and liabilities
(10,743
)
4,289
Prepaid expense and other assets
(14,257
)
(2,000
)
Accounts payable
37,278
9,463
Accrued liabilities and other
3,818
457
Net cash used in operating activities
(46,974
)
(782
)
Cash flows from investing
activities:
Additions to property and equipment
(15,163
)
(8,556
)
Additions to intangible assets
(48
)
(253
)
Proceeds from sale of property and
equipment
2,248
1,354
Net cash used in investing activities
(12,963
)
(7,455
)
Cash flows from financing
activities:
Payments on debt
(51,665
)
(46,453
)
Proceeds from debt
107,423
54,888
Payment of debt issuance costs
—
(597
)
Net unit settlement
(477
)
(162
)
Net cash provided by financing
activities
55,281
7,676
Effect of exchange rate changes on
cash
(29
)
112
Net decrease in cash and cash equivalents
and restricted cash
(4,685
)
(449
)
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
$
18,185
$
18,203
Westrock Coffee Holdings,
LLC
Reconciliation of Net Loss to
Non-GAAP Adjusted EBITDA
(Unaudited)
Three Months Ended June
30,
Six Months Ended June 30,
(Thousands)
2022
2021
2022
2021
Net loss
$
(5,819
)
$
(6,068
)
$
(10,524
)
$
(12,192
)
Interest expense
8,813
8,261
16,861
15,669
Income tax benefit
(1,499
)
(502
)
(3,083
)
(1,443
)
Depreciation and amortization
5,952
6,071
11,966
12,314
EBITDA
7,447
7,762
15,220
14,348
Acquisition, restructuring and integration
expense
2,304
926
4,787
1,943
Management and consulting fees
866
1,595
2,201
3,200
Equity-based compensation
308
306
479
612
Loss (gain) on disposal of property, plant
and equipment
184
(25
)
289
243
Mark-to-market adjustments
1,395
(2
)
250
(1,975
)
Other, net
789
621
1,461
1,121
Adjusted EBITDA
$
13,293
$
11,183
$
24,687
$
19,492
Westrock Coffee Holdings,
LLC
Reconciliation of Segment
Results
(Unaudited)
Three Months Ended June
30,
Six Months Ended June
30,
(Thousands)
2022
2021
2022
2021
Net Sales
Beverage Solutions
$
170,865
$
134,405
$
319,226
$
261,668
Sustainable Sourcing &
Traceability1
52,548
36,739
90,615
64,807
Total of Reportable Segments
$
223,413
$
171,144
$
409,841
$
326,475
Adjusted EBITDA
Beverage Solutions
$
12,471
$
10,330
$
22,891
$
18,462
Sustainable Sourcing &
Traceability
822
853
1,796
1,030
Total of Reportable Segments
$
13,293
$
11,183
$
24,687
$
19,492
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 be recurring in nature, 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 (loss) income 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 (loss) income 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.
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Media: ICR for Westrock: Westrock@icrinc.com Investor
Relations: ICR for Westrock: WestrockIR@icrinc.com
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