Westrock Coffee Company (Nasdaq: WEST) (“Westrock Coffee” or the
“Company”) today reported financial results for the third quarter
ended September 30, 2024.
Scott T. Ford, CEO and Co-founder stated,
“Westrock Coffee Company had a strong third quarter despite what
continues to be a challenging macroeconomic environment for the
consumer. This is the third consecutive quarter of impressive,
combined segment, year over year performance, which is driven by
improvements in our base business, as the Conway extract and
ready-to-drink facility will not see substantive revenues until
early 2025.
As it relates to the new Conway facility, the
sales and customer onboarding work that the team has excelled at
over the past two years is nothing short of phenomenal. It has
resulted in more than a dozen new customers who will begin placing
orders in the first quarter of 2025, from whom, once fully
onboarded, are expected to produce more annual Consolidated
Adjusted EBITDA than the entirety of our current base business.
This is the promised earnings power of transitioning this facility
from a construction and product development project to a filled and
operational production plant.”
Third Quarter Highlights
Consolidated Results
- Net sales were
$220.9 million for the third quarter of 2024, an increase of $1.2
million, or 0.6%, compared to the third quarter of 2023.
- Gross profit
for the third quarter of 2024 was $37.1 million and included $0.5
million of non-cash mark-to-market losses, compared to gross profit
of $35.1 million for the third quarter of 2023, which included $1.2
million of non-cash mark-to-market losses.
- Net loss for
the period was $14.3 million, compared to a net income of $16.6
million for the third quarter of 2023. The $14.3 million net loss
for the third quarter of 2024 included $2.5 million of transaction,
restructuring and integration expense, $7.9 million of
pre-production costs related to our Conway, Arkansas extract and
ready-to-drink facility (the “Conway Facility”), $4.0 million of
scale-up costs related to the Conway Facility, $1.2 million of
impairment charges related to our previously announced plant
closures, and $5.5 million non-cash gains from the change in fair
value of warrant liabilities. The $16.6 million net income for the
third quarter of 2023 included $3.1 million of transaction,
restructuring and integration expense, $3.0 million of
pre-production costs related to our Conway Facility, and $25.1
million of non-cash gains from the change in fair value of warrant
liabilities.
- Consolidated
Adjusted EBITDA1 for the third quarter of 2024 was $10.3 million
and included $4.0 million of scale-up costs associated with our
Conway Facility. Consolidated Adjusted EBITDA for the third quarter
of 2023 was $11.6 million and did not include any scale-up costs
associated with our Conway Facility.
Segment Results
- Beverage
Solutions segment contributed $164.0 million of net sales and had
Segment Adjusted EBITDA2 of $11.8 million for the third quarter of
2024, compared to $176.8 million and $9.9 million, respectively,
for the third quarter of 2023.
- Sustainable
Sourcing & Traceability (“SS&T”) segment, net of
intersegment revenues, contributed $56.9 million of net sales and
had Segment Adjusted EBITDA of $2.5 million for the third quarter
of 2024, compared to $42.8 million and $1.7 million, respectively,
for the third quarter of 2023.
______________________________1 Consolidated
Adjusted EBITDA is a non-GAAP measure. The definition of
Consolidated Adjusted EBITDA is included under the section titled
“Non-GAAP Financial Measures” and a reconciliation of Consolidated
Adjusted EBITDA to the most comparable GAAP measure is provided in
the tables that accompany this release.
2 Segment Adjusted EBITDA is a segment performance measure.
While not a U.S. GAAP measure, a segment performance measure is
required to be disclosed by U.S. GAAP in accordance with FASB
Accounting Standards Codification 280, Segment Reporting. Segment
Adjusted EBITDA is defined consistently with Consolidated Adjusted
EBITDA, except that it excludes scale-up costs related to the
Conway Facility.
Warrant Exchange
As previously disclosed, on September 30, 2024
the Company completed an exchange offer (the “Offer”) for all of
its outstanding private placement warrants (the “Private Warrants”)
and substantially all of its public warrants (the “Public Warrants”
and together with the Private Warrants, the “Warrants”), issuing
approximately 5.4 million shares of common stock of the Company,
par value $0.01 per share (“Common Shares”). In connection with the
Offer, the Company completed a consent solicitation, pursuant to
which it received approval to amend the warrant agreement, which
governs the Warrants (the “Warrant Amendment”). In accordance with
the terms of the Warrant Amendment, the Company exercised its right
to exchange each Public Warrant that remained outstanding following
the closing of the Offer for Common Shares. Accordingly, on October
16, 2024, the Company completed the exchange of the remaining
Public Warrants, issuing 0.1 million Common Shares (the “Post-Offer
Exchange”). Following the Post-Offer Exchange, no Warrants remain
outstanding.
Board Appointment
The Company is announcing today the appointment
of Ken Parent to the Company’s Board of Directors. Mr. Parent
served as special advisor to the chairman and chief executive
officer of Pilot Flying J, the largest travel center operator in
North America from January 2021 to February 2023. From 2014 to
December 31, 2020, Mr. Parent served as president of Pilot Flying
J. In this role, he oversaw all company functions, including human
resources, technology, finance, real estate and construction. Mr.
Parent also led strategic initiatives on behalf of Pilot Flying J.
Prior to becoming president, he served as executive vice president,
chief operating officer of Pilot Flying J from 2013 to 2014. Prior
to that, Mr. Parent served as Pilot Flying J's senior vice
president of operations, marketing and human resources from 2001 to
2013 where he managed store and restaurant operations, marketing,
sales, transportation and supply and distribution. Mr. Parent holds
a Master of Business Administration and a bachelor's degree in
marketing from San Diego State University.
2024 and 2025 Preliminary Outlook
The Company is updating its guidance to conform
to its revised presentation of Consolidated Adjusted EBITDA, as
discussed in the tables that accompany this release. In fiscal year
2024, the Company expects to report $50.0 million of Consolidated
Adjusted EBITDA, which includes $10.0 million of scale-up costs
associated with the Conway Facility. This updated guidance is
operationally equivalent to the Company’s prior guidance using the
historic presentation of Adjusted EBITDA, and accounts for the
continued softness in the Company’s single serve cup platform and
push out of the sales ramp for the Conway Facility ready-to-drink
(“RTD”) can products into the first quarter of 2025 (vs. the fourth
quarter of 2024).
In fiscal year 2025, the Company expects to
report Consolidated Adjusted EBITDA of between $80.0 million and
$100.0 million, which includes approximately $10.0 to $15.0 million
of scale-up costs associated with the Conway Facility. This
growth in Consolidated Adjusted EBITDA is driven by:
(i) volume growth in the
Company’s core coffee business from new retail coffee
customers; (ii) new volume commitments from
existing single serve customers and new single serve customer
wins;(iii) full year benefit of expense savings
from cost reduction and facility consolidation
efforts;(iv) the rapid scale of our RTD can
volumes beginning in the first quarter of 2025 and continuing
throughout 2025, and the launch of our RTD glass bottle products in
the third quarter of 2025.
Management will provide additional details
regarding the 2024 and 2025 outlook on its earnings results call to
be held today.
The Company is not readily able to provide a
reconciliation of forecasted Consolidated Adjusted EBITDA to
forecasted GAAP net income (loss) without unreasonable effort
because certain items that impact such figure are uncertain or
outside the Company’s control and cannot be reasonably predicted.
Such items include the impacts of non-cash gains or losses
resulting from mark-to-market adjustments, among others.
Conference Call Details
Westrock Coffee will host a conference call and
webcast at 4:30 p.m. ET today to discuss this release. To
participate in the live earnings call and question and answer
session, please register at HERE and dial-in information will be
provided directly to you. The live audio webcast will be accessible
in the “Events and Presentations” section of the Company’s Investor
Relations website at https://investors.westrockcoffee.com. An
archived replay of the webcast will be available shortly after the
live event has concluded and will be available for a minimum of 14
days.
About Westrock Coffee
Westrock Coffee is a leading integrated coffee,
tea, flavors, extracts, and ingredients solutions provider in the
United States, 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 numerous countries of
origin.
Forward-Looking Statements
Certain statements in this press release that
are not historical facts are forward-looking statements within the
meaning of the Private Securities Litigation Reform Act of 1995, as
amended from time to time. 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,
but the absence of these words does not mean that a statement is
not forward-looking. These forward-looking statements include, but
are not limited to, our 2024 financial outlook, our 2025
preliminary financial outlook, certain plans, expectations, goals,
projections, and statements about the timing and benefits of the
build-out, and our ability to sell or commit the capacity of the
Company's Conway, Arkansas extract and ready-to-drink facility, the
plans, objectives, expectations, and intentions of Westrock Coffee,
and other statements that are not historical facts. These
statements are based on information available to Westrock Coffee as
of the date hereof and Westrock Coffee is not under any duty to
update any of the forward-looking statements after the date of this
communication 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 management of Westrock Coffee 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. 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; 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 ability
of Westrock Coffee to issue equity or equity-linked securities or
obtain debt financing in the future; the risk that Westrock Coffee
fails to fully realize the potential benefits of acquisitions or
joint ventures or has difficulty successfully integrating acquired
companies; the availability of equipment and the timely performance
by suppliers involved with the build-out of the Conway, Arkansas
extract and ready-to-drink facility; the loss of significant
customers or delays in bringing their products to market; and those
factors discussed in Westrock Coffee’s Annual Report on Form 10-K,
which was filed with the United States Securities and Exchange
Commission (the “SEC”) on March 15, 2024, in Part I, Item 1A “Risk
Factors” and other documents 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 Westrock Coffee does not presently
know, or that Westrock Coffee currently believes 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 Westrock Coffee's expectations, plans, or
forecasts of future events and views as of the date of this
communication. Westrock Coffee anticipates that subsequent events
and developments will cause Westrock Coffee's assessments to
change. However, while Westrock Coffee may elect to update these
forward-looking statements at some point in the future, Westrock
Coffee specifically disclaims any obligation to do so. These
forward-looking statements should not be relied upon as a
representation of 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.
Contacts
Media: Westrock Coffee:
PR@westrockcoffee.com
Investor Contact: Westrock Coffee:
IR@westrockcoffee.com
Westrock Coffee CompanyCondensed
Consolidated Balance
Sheets(Unaudited) |
|
|
|
|
|
|
|
(Thousands, except par value) |
|
September 30, 2024 |
|
December 31, 2023 |
ASSETS |
|
|
|
|
|
|
Cash and cash equivalents |
|
$ |
22,359 |
|
|
$ |
37,196 |
|
Restricted cash |
|
|
10,321 |
|
|
|
644 |
|
Accounts receivable, net of allowance for credit losses of $3,447
and $2,915, respectively |
|
|
102,669 |
|
|
|
99,158 |
|
Inventories |
|
|
160,644 |
|
|
|
149,921 |
|
Derivative assets |
|
|
16,720 |
|
|
|
13,658 |
|
Prepaid expenses and other current assets |
|
|
23,921 |
|
|
|
12,473 |
|
Total current assets |
|
|
336,634 |
|
|
|
313,050 |
|
|
|
|
|
|
|
|
Property, plant and equipment, net |
|
|
438,617 |
|
|
|
344,038 |
|
Goodwill |
|
|
116,111 |
|
|
|
116,111 |
|
Intangible assets, net |
|
|
116,968 |
|
|
|
122,945 |
|
Operating lease right-of-use assets |
|
|
61,404 |
|
|
|
67,601 |
|
Other long-term assets |
|
|
7,380 |
|
|
|
7,769 |
|
Total Assets |
|
$ |
1,077,114 |
|
|
$ |
971,514 |
|
|
|
|
|
|
|
|
LIABILITIES,
CONVERTIBLE PREFERRED SHARES AND SHAREHOLDERS' EQUITY |
|
|
|
|
|
|
Current maturities of long-term debt |
|
$ |
12,137 |
|
|
$ |
9,811 |
|
Short-term debt |
|
|
58,007 |
|
|
|
43,694 |
|
Accounts payable |
|
|
52,320 |
|
|
|
69,106 |
|
Supply chain finance program |
|
|
70,881 |
|
|
|
78,076 |
|
Derivative liabilities |
|
|
10,204 |
|
|
|
3,731 |
|
Accrued expenses and other current liabilities |
|
|
38,479 |
|
|
|
35,217 |
|
Total current liabilities |
|
|
242,028 |
|
|
|
239,635 |
|
|
|
|
|
|
|
|
Long-term debt, net |
|
|
326,122 |
|
|
|
223,092 |
|
Convertible notes payable - related party, net |
|
|
49,689 |
|
|
|
— |
|
Deferred income taxes |
|
|
14,475 |
|
|
|
10,847 |
|
Operating lease liabilities |
|
|
58,507 |
|
|
|
63,554 |
|
Warrant liabilities |
|
|
729 |
|
|
|
44,801 |
|
Other long-term liabilities |
|
|
1,286 |
|
|
|
1,629 |
|
Total liabilities |
|
|
692,836 |
|
|
|
583,558 |
|
|
|
|
|
|
|
|
Commitments and
contingencies |
|
|
|
|
|
|
|
|
|
|
|
|
|
Series A Convertible Preferred Shares, $0.01 par value, 24,000
shares authorized, 23,511 shares and 23,512 shares issued and
outstanding at September 30, 2024 and December 31, 2023,
respectively, $11.50 liquidation value |
|
|
273,938 |
|
|
|
274,216 |
|
|
|
|
|
|
|
|
Shareholders'
Equity |
|
|
|
|
|
|
Preferred stock, $0.01 par value, 26,000 shares authorized, no
shares issued and outstanding |
|
|
— |
|
|
|
— |
|
Common stock, $0.01 par value, 300,000 shares authorized, 94,073
shares and 88,051 shares issued and outstanding at September 30,
2024 and December 31, 2023, respectively |
|
|
941 |
|
|
|
880 |
|
Additional paid-in-capital |
|
|
515,925 |
|
|
|
471,666 |
|
Accumulated deficit |
|
|
(418,315 |
) |
|
|
(362,624 |
) |
Accumulated other comprehensive income |
|
|
11,789 |
|
|
|
3,818 |
|
Total shareholders' equity |
|
|
110,340 |
|
|
|
113,740 |
|
|
|
|
|
|
|
|
Total Liabilities,
Convertible Preferred Shares and Shareholders' Equity |
|
$ |
1,077,114 |
|
|
$ |
971,514 |
|
|
Westrock Coffee CompanyCondensed
Consolidated Statements of
Operations(Unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months EndedSeptember 30, |
|
Nine Months EndedSeptember 30, |
(Thousands, except per share data) |
|
2024 |
|
|
2023 |
|
|
2024 |
|
|
2023 |
|
Net sales |
|
$ |
220,860 |
|
|
$ |
219,612 |
|
|
$ |
621,749 |
|
|
$ |
649,748 |
|
Costs of sales |
|
|
183,775 |
|
|
|
184,546 |
|
|
|
505,987 |
|
|
|
544,707 |
|
Gross profit |
|
|
37,085 |
|
|
|
35,066 |
|
|
|
115,762 |
|
|
|
105,041 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Selling, general and administrative expense |
|
|
46,132 |
|
|
|
37,050 |
|
|
|
142,182 |
|
|
|
105,275 |
|
Transaction, restructuring and integration expense |
|
|
2,538 |
|
|
|
3,137 |
|
|
|
9,901 |
|
|
|
12,682 |
|
Impairment charges |
|
|
1,165 |
|
|
|
— |
|
|
|
1,996 |
|
|
|
— |
|
(Gain) loss on disposal of property, plant and equipment |
|
|
(8 |
) |
|
|
248 |
|
|
|
965 |
|
|
|
1,145 |
|
Total operating expenses |
|
|
49,827 |
|
|
|
40,435 |
|
|
|
155,044 |
|
|
|
119,102 |
|
Loss from
operations |
|
|
(12,742 |
) |
|
|
(5,369 |
) |
|
|
(39,282 |
) |
|
|
(14,061 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Other (income) expense |
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense |
|
|
6,889 |
|
|
|
7,803 |
|
|
|
21,921 |
|
|
|
21,216 |
|
Change in fair value of warrant liabilities |
|
|
(5,481 |
) |
|
|
(25,105 |
) |
|
|
(7,134 |
) |
|
|
(18,833 |
) |
Other, net |
|
|
(10 |
) |
|
|
510 |
|
|
|
223 |
|
|
|
1,323 |
|
(Loss) income before
income taxes and equity in earnings from unconsolidated
entities |
|
|
(14,140 |
) |
|
|
11,423 |
|
|
|
(54,292 |
) |
|
|
(17,767 |
) |
Income tax expense (benefit) |
|
|
84 |
|
|
|
(5,212 |
) |
|
|
1,254 |
|
|
|
(3,331 |
) |
Equity in (earnings) loss from unconsolidated entities |
|
|
35 |
|
|
|
14 |
|
|
|
145 |
|
|
|
80 |
|
Net (loss)
income |
|
$ |
(14,259 |
) |
|
$ |
16,621 |
|
|
$ |
(55,691 |
) |
|
$ |
(14,516 |
) |
Net loss attributable to non-controlling interest |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
15 |
|
Net (loss) income
attributable to shareholders |
|
|
(14,259 |
) |
|
|
16,621 |
|
|
|
(55,691 |
) |
|
|
(14,531 |
) |
Participating securities' share in earnings |
|
|
— |
|
|
|
(3,912 |
) |
|
|
— |
|
|
|
— |
|
Accretion of Series A Convertible Preferred Shares |
|
|
88 |
|
|
|
93 |
|
|
|
262 |
|
|
|
(249 |
) |
Net (loss) income
attributable to common shareholders |
|
$ |
(14,171 |
) |
|
$ |
12,802 |
|
|
$ |
(55,429 |
) |
|
$ |
(14,780 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
(Loss) earnings per
common share: |
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
$ |
(0.16 |
) |
|
$ |
0.15 |
|
|
$ |
(0.63 |
) |
|
$ |
(0.19 |
) |
Diluted |
|
$ |
(0.16 |
) |
|
$ |
0.15 |
|
|
$ |
(0.63 |
) |
|
$ |
(0.19 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted-average
number of shares outstanding: |
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
|
88,540 |
|
|
|
83,437 |
|
|
|
88,320 |
|
|
|
78,203 |
|
Diluted |
|
|
88,540 |
|
|
|
107,080 |
|
|
|
88,320 |
|
|
|
78,203 |
|
|
Westrock Coffee CompanyCondensed Consolidated Statements of
Cash Flows(Unaudited) |
|
|
|
|
|
|
|
|
|
Nine Months EndedSeptember 30, |
(Thousands) |
|
2024 |
|
|
2023 |
|
Cash flows from
operating activities: |
|
|
|
|
|
|
Net loss |
|
$ |
(55,691 |
) |
|
$ |
(14,516 |
) |
Adjustments to reconcile net loss to net cash provided by (used in)
operating activities: |
|
|
|
|
|
|
Depreciation and amortization |
|
|
23,196 |
|
|
|
18,419 |
|
Impairment charges |
|
|
1,996 |
|
|
|
— |
|
Equity-based compensation |
|
|
8,508 |
|
|
|
6,297 |
|
Provision for credit losses |
|
|
1,368 |
|
|
|
278 |
|
Amortization of deferred financing fees included in interest
expense |
|
|
2,432 |
|
|
|
1,560 |
|
Loss on disposal of property, plant and equipment |
|
|
965 |
|
|
|
1,145 |
|
Mark-to-market adjustments |
|
|
(2,692 |
) |
|
|
(1,045 |
) |
Change in fair value of warrant liabilities |
|
|
(7,134 |
) |
|
|
(18,833 |
) |
Foreign currency transactions |
|
|
461 |
|
|
|
1,481 |
|
Deferred income tax expense (benefit) |
|
|
1,133 |
|
|
|
(3,331 |
) |
Other |
|
|
1,003 |
|
|
|
1,443 |
|
Change in operating assets and liabilities: |
|
|
|
|
|
|
Accounts receivable |
|
|
(4,930 |
) |
|
|
1,993 |
|
Inventories |
|
|
(7,191 |
) |
|
|
(14,153 |
) |
Derivative assets and liabilities |
|
|
12,685 |
|
|
|
4,090 |
|
Prepaid expense and other assets |
|
|
1,447 |
|
|
|
(8,469 |
) |
Accounts payable |
|
|
(2,650 |
) |
|
|
(50,254 |
) |
Accrued liabilities and other |
|
|
9,071 |
|
|
|
(1,236 |
) |
Net cash used in operating activities |
|
|
(16,023 |
) |
|
|
(75,131 |
) |
Cash flows from
investing activities: |
|
|
|
|
|
|
Additions to property, plant and equipment |
|
|
(141,451 |
) |
|
|
(121,545 |
) |
Additions to intangible assets |
|
|
(144 |
) |
|
|
(147 |
) |
Acquisition of business, net of cash acquired |
|
|
— |
|
|
|
(2,392 |
) |
Acquisition of equity method investments and non-marketable
securities |
|
|
— |
|
|
|
(1,385 |
) |
Proceeds from sale of property, plant and equipment |
|
|
1,225 |
|
|
|
198 |
|
Net cash used in investing activities |
|
|
(140,370 |
) |
|
|
(125,271 |
) |
Cash flows from
financing activities: |
|
|
|
|
|
|
Payments on debt |
|
|
(151,968 |
) |
|
|
(170,522 |
) |
Proceeds from debt |
|
|
250,882 |
|
|
|
221,509 |
|
Payments on supply chain financing program |
|
|
(121,203 |
) |
|
|
(2,321 |
) |
Proceeds from supply chain financing program |
|
|
114,008 |
|
|
|
69,787 |
|
Proceeds from convertible notes payable |
|
|
22,000 |
|
|
|
— |
|
Proceeds from convertible notes payable - related party |
|
|
50,000 |
|
|
|
— |
|
Payment of debt issuance costs |
|
|
(3,329 |
) |
|
|
(3,023 |
) |
Payment of convertible notes payable issuance costs |
|
|
(511 |
) |
|
|
— |
|
Net proceeds from (repayments of) repurchase agreements |
|
|
(7,111 |
) |
|
|
(8,553 |
) |
Proceeds from exercise of stock options |
|
|
12 |
|
|
|
848 |
|
Proceeds from exercise of Public Warrants |
|
|
— |
|
|
|
2,632 |
|
Proceeds from issuance of common stock |
|
|
635 |
|
|
|
118,767 |
|
Payment of equity issuance costs |
|
|
(10 |
) |
|
|
(1,000 |
) |
Payment for purchase of non-controlling interest |
|
|
— |
|
|
|
(2,000 |
) |
Payment for taxes for net share settlement of equity awards |
|
|
(2,041 |
) |
|
|
(2,977 |
) |
Net cash provided by financing activities |
|
|
151,364 |
|
|
|
223,147 |
|
Effect of exchange rate changes on cash |
|
|
(131 |
) |
|
|
(335 |
) |
Net (decrease) increase in
cash and cash equivalents and restricted cash |
|
|
(5,160 |
) |
|
|
22,410 |
|
Cash and cash equivalents and
restricted cash at beginning of period |
|
|
37,840 |
|
|
|
26,405 |
|
Cash and cash
equivalents and restricted cash at end of period |
|
$ |
32,680 |
|
|
$ |
48,815 |
|
|
Westrock Coffee CompanySummary of Segment
Results(Unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months EndedSeptember 30, |
|
Nine Months EndedSeptember 30, |
(Thousands) |
|
2024 |
|
2023 |
|
2024 |
|
2023 |
Beverage
Solutions |
|
|
|
|
|
|
|
|
|
|
|
|
Net sales |
|
$ |
164,010 |
|
$ |
176,818 |
|
$ |
485,322 |
|
$ |
547,746 |
Segment Adjusted EBITDA1 |
|
|
11,752 |
|
|
9,884 |
|
|
35,797 |
|
|
29,965 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Sustainable Sourcing
& Traceability |
|
|
|
|
|
|
|
|
|
|
|
|
Net sales2 |
|
$ |
56,850 |
|
$ |
42,794 |
|
$ |
136,427 |
|
$ |
102,002 |
Segment Adjusted EBITDA1 |
|
|
2,475 |
|
|
1,711 |
|
|
3,236 |
|
|
1,393 |
______________________________1 - Segment
Adjusted EBITDA is a segment performance measure. While not a U.S.
GAAP measure, a segment performance measure is required to be
disclosed by U.S. GAAP in accordance with FASB Accounting Standards
Codification 280, Segment Reporting. Segment Adjusted EBITDA is
defined consistently with Consolidated Adjusted EBITDA, except that
it excludes scale-up costs related to the Conway extract and
ready-to-drink facility. Refer to the Notes to Condensed
Consolidated Financial Statements included in our Quarterly Report
on Form 10-Q for additional information regarding our segments and
a reconciliation of Segment Adjusted EBITDA to consolidated net
income (loss).
2 - Net of intersegment revenues.
Westrock Coffee CompanyReconciliation of
Net Income (Loss) to Non-GAAP Consolidated Adjusted
EBITDA(Unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
Nine Months Ended |
|
|
September 30, |
|
September 30, |
(Thousands) |
|
2024 |
|
|
2023 |
|
|
2024 |
|
|
2023 |
|
Net (loss) income |
|
$ |
(14,259 |
) |
|
$ |
16,621 |
|
|
$ |
(55,691 |
) |
|
$ |
(14,516 |
) |
Interest expense |
|
|
6,889 |
|
|
|
7,803 |
|
|
|
21,921 |
|
|
|
21,216 |
|
Income tax expense (benefit) |
|
|
84 |
|
|
|
(5,212 |
) |
|
|
1,254 |
|
|
|
(3,331 |
) |
Depreciation and amortization |
|
|
7,680 |
|
|
|
6,364 |
|
|
|
23,196 |
|
|
|
18,419 |
|
EBITDA |
|
|
394 |
|
|
|
25,576 |
|
|
|
(9,320 |
) |
|
|
21,788 |
|
Transaction, restructuring and integration expense |
|
|
2,538 |
|
|
|
3,137 |
|
|
|
9,901 |
|
|
|
12,682 |
|
Change in fair value of warrant liabilities |
|
|
(5,481 |
) |
|
|
(25,105 |
) |
|
|
(7,134 |
) |
|
|
(18,833 |
) |
Management and consulting fees (S&D Coffee, Inc.
acquisition) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
556 |
|
Equity-based compensation |
|
|
3,028 |
|
|
|
2,439 |
|
|
|
8,508 |
|
|
|
6,297 |
|
Impairment charges |
|
|
1,165 |
|
|
|
— |
|
|
|
1,996 |
|
|
|
— |
|
Conway extract and ready-to-drink facility pre-production
costs |
|
|
7,937 |
|
|
|
3,035 |
|
|
|
30,115 |
|
|
|
6,615 |
|
Mark-to-market adjustments |
|
|
470 |
|
|
|
1,160 |
|
|
|
(2,692 |
) |
|
|
(1,045 |
) |
Loss on disposal of property, plant and equipment |
|
|
(8 |
) |
|
|
248 |
|
|
|
965 |
|
|
|
1,145 |
|
Other |
|
|
226 |
|
|
|
1,105 |
|
|
|
1,506 |
|
|
|
2,153 |
|
Consolidated Adjusted
EBITDA |
|
$ |
10,269 |
|
|
$ |
11,595 |
|
|
$ |
33,845 |
|
|
$ |
31,358 |
|
|
Historically, the Company has presented
Consolidated Adjusted EBITDA3 as excluding (i) preproduction costs
it has incurred to place the Conway, Arkansas extract and
ready-to-drink facility into commercial service (“pre-production
costs”), and (ii) a portion of the operating costs the Company
incurs to produce products for sale as it scales its production
capabilities within the facility (“scale-up costs”). The Company
disclosed these costs under the heading “Conway extract and
ready-to-drink facility start-up costs” in its reconciliation of
net (loss) income to Adjusted EBITDA for historical financial
results. Beginning in the third quarter of 2024, the Company no
longer excludes scale-up costs in the determination of Consolidated
Adjusted EBITDA. Consolidated Adjusted EBITDA for the three and six
months ended June 30, 2024 has been revised to exclude the impact
of scale-up costs, as follows:
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
Six Months Ended |
(Thousands) |
|
June 30, 2024 |
|
June 30, 2024 |
Consolidated Adjusted EBITDA, as presented |
|
$ |
13,664 |
|
|
$ |
24,806 |
|
Conway extract and ready-to-drink facility scale-up costs |
|
|
(1,230 |
) |
|
|
(1,230 |
) |
Consolidated Adjusted
EBITDA, as revised |
|
$ |
12,434 |
|
|
$ |
23,576 |
|
|
______________________________3 In prior
filings and earnings releases, “Consolidated Adjusted EBITDA” was
referred to as “Adjusted EBITDA”.
Non-GAAP Financial Measures
We refer to EBITDA and Consolidated 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 Consolidated
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. The Company believes that
providing these non-GAAP financial measures 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 “Consolidated
Adjusted EBITDA” as EBITDA before equity-based compensation expense
and the impact, which may be recurring in nature, of transaction,
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,
changes in the fair value of warrant liabilities, non-cash
mark-to-market adjustments, certain non-capitalizable costs
necessary to place the Conway extract and ready-to-drink facility
into commercial production, 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 Consolidated Adjusted
EBITDA are important supplemental measures to net (loss) income
because they provide additional information to evaluate our
operating performance on an unleveraged basis.
Since EBITDA and Consolidated 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 Consolidated Adjusted EBITDA may not be
comparable to that reported by other companies that define EBITDA
and Consolidated Adjusted EBITDA differently than we do.
Westrock Coffee (NASDAQ:WEST)
Historical Stock Chart
From Nov 2024 to Dec 2024
Westrock Coffee (NASDAQ:WEST)
Historical Stock Chart
From Dec 2023 to Dec 2024