Westrock Coffee Company Reports First Quarter 2024 Results
Announces Delivery of First Commercial Products from
Reaffirms 2024 Guidance; Issues Preliminary 2025 Guidance
First Quarter Highlights
- Consolidated net sales were
$192.5 million for the first quarter of 2024, a decrease of$12.9 million , or 6.3%, compared to the first quarter of 2023. - Consolidated gross profit for the first quarter of 2024 was
$37.3 million and included$1.6 million of non-cash mark-to-market gains, compared to consolidated gross profit of$34.3 million for the first quarter of 2023, which included$1.2 million of non-cash mark-to-market gains. - Net loss for the period was
$23.7 million , compared to a net loss of$4.3 million for the first quarter of 2023. The$23.7 million net loss for the first quarter of 2024 included$3.0 million of transaction, restructuring and integration expense, and$9.8 million of start-up costs related to ourConway, AR extract and ready-to-drink facility. The$4.3 million net loss for the first quarter of 2023 included$6.6 million of transaction, restructuring and integration expense,$1.9 million of start-up costs related to ourConway, AR extract and ready-to-drink facility, and$5.5 million of non-cash gains from the change in fair value of warrant liabilities. - Consolidated Adjusted EBITDA was
$11.1 million for the first quarter of 2024, an increase of$2.7 million or 31.8%, compared to the first quarter of 2023. - Beverage Solutions segment contributed
$158.1 million of net sales and$10.8 million of Adjusted EBITDA for the first quarter of 2024, compared to$181.2 million and$8.4 million , respectively, for the first quarter of 2023. - SS&T segment, net of intersegment revenues, contributed
$34.4 million of net sales and$0.3 million of Adjusted EBITDA for the first quarter of 2024, compared to$24.2 million and break-even, respectively, for the first quarter of 2023.
The Company has also announced today that it has delivered the first commercial products from its multi-serve bottle line in its
2024 and 2025 Outlook
The Company is reiterating its guidance for consolidated Adjusted EBITDA to be between
The Company is introducing preliminary guidance for consolidated Adjusted EBITDA of
The Company is not readily able to provide a reconciliation of forecasted Adjusted EBITDA to forecasted GAAP net income 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 of derivatives and the change in fair value of warrant liabilities, among others.
Conference Call Details
About
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 prior to commencement of commercial production, of the Company's
Contacts
Media:
Investor Contact:
Condensed Consolidated Balance Sheets
(Unaudited)
(Thousands, except par value) | ||||||||
ASSETS | ||||||||
Cash and cash equivalents | $ | 12,571 | $ | 37,196 | ||||
Restricted cash | 1,205 | 644 | ||||||
Accounts receivable, net of allowance for credit losses of |
90,214 | 99,158 | ||||||
Inventories | 140,354 | 149,921 | ||||||
Derivative assets | 15,424 | 13,658 | ||||||
Prepaid expenses and other current assets | 13,457 | 12,473 | ||||||
Total current assets | 273,225 | 313,050 | ||||||
Property, plant and equipment, net | 400,839 | 344,038 | ||||||
116,111 | 116,111 | |||||||
Intangible assets, net | 120,950 | 122,945 | ||||||
Operating lease right-of-use assets | 64,000 | 67,601 | ||||||
Other long-term assets | 8,131 | 7,769 | ||||||
Total Assets | $ | 983,256 | $ | 971,514 | ||||
LIABILITIES, CONVERTIBLE PREFERRED SHARES AND SHAREHOLDERS' EQUITY | ||||||||
Current maturities of long-term debt | $ | 12,118 | $ | 9,811 | ||||
Short-term debt | 34,432 | 43,694 | ||||||
Accounts payable | 44,230 | 69,106 | ||||||
Supply chain finance program | 78,706 | 78,076 | ||||||
Derivative liabilities | 4,229 | 3,731 | ||||||
Accrued expenses and other current liabilities | 46,573 | 35,217 | ||||||
Total current liabilities | 220,288 | 239,635 | ||||||
Long-term debt, net | 224,090 | 223,092 | ||||||
Convertible notes payable - related party, net | 49,654 | — | ||||||
Deferred income taxes | 16,722 | 10,847 | ||||||
Operating lease liabilities | 60,400 | 63,554 | ||||||
Warrant liabilities | 44,761 | 44,801 | ||||||
Other long-term liabilities | 1,528 | 1,629 | ||||||
Total liabilities | 617,443 | 583,558 | ||||||
Commitments and contingencies | ||||||||
Series A Convertible Preferred Shares, |
274,129 | 274,216 | ||||||
Shareholders' Equity | ||||||||
Preferred stock, |
— | — | ||||||
Common stock, |
883 | 880 | ||||||
Additional paid-in-capital | 473,064 | 471,666 | ||||||
Accumulated deficit | (386,297 | ) | (362,624 | ) | ||||
Accumulated other comprehensive income | 4,034 | 3,818 | ||||||
Total shareholders' equity | 91,684 | 113,740 | ||||||
Total Liabilities, Convertible Preferred Shares and Shareholders' Equity | $ | 983,256 | $ | 971,514 | ||||
Condensed Consolidated Statements of Operations
(Unaudited)
Three Months Ended |
||||||||
(Thousands, except per share data) | 2024 | 2023 | ||||||
Net sales | $ | 192,500 | $ | 205,442 | ||||
Costs of sales | 155,226 | 171,144 | ||||||
Gross profit | 37,274 | 34,298 | ||||||
Selling, general and administrative expense | 44,440 | 34,122 | ||||||
Transaction, restructuring and integration expense | 2,964 | 6,644 | ||||||
Loss on disposal of property, plant and equipment | 2 | 896 | ||||||
Total operating expenses | 47,406 | 41,662 | ||||||
Loss from operations | (10,132 | ) | (7,364 | ) | ||||
Other (income) expense | ||||||||
Interest expense, net | 7,579 | 6,029 | ||||||
Change in fair value of warrant liabilities | (41 | ) | (5,529 | ) | ||||
Other, net | 135 | 821 | ||||||
Loss before income taxes and equity in earnings from unconsolidated entities | (17,805 | ) | (8,685 | ) | ||||
Income tax expense (benefit) | 5,815 | (4,359 | ) | |||||
Equity in (earnings) loss from unconsolidated entities | 53 | — | ||||||
Net loss | $ | (23,673 | ) | $ | (4,326 | ) | ||
Net income (loss) attributable to non-controlling interest | — | 15 | ||||||
Net loss attributable to shareholders | (23,673 | ) | (4,341 | ) | ||||
Accretion of Series A Convertible Preferred Shares | 87 | (429 | ) | |||||
Net loss attributable to common shareholders | $ | (23,586 | ) | $ | (4,770 | ) | ||
Loss per common share: | ||||||||
Basic | $ | (0.27 | ) | $ | (0.06 | ) | ||
Diluted | $ | (0.27 | ) | $ | (0.13 | ) | ||
Weighted-average number of shares outstanding: | ||||||||
Basic | 88,095 | 75,358 | ||||||
Diluted | 88,095 | 76,693 | ||||||
Condensed Consolidated Statements of Cash Flows
(Unaudited)
Three Months Ended |
||||||||
(Thousands) | 2024 | 2023 | ||||||
Cash flows from operating activities: | ||||||||
Net loss | $ | (23,673 | ) | $ | (4,326 | ) | ||
Adjustments to reconcile net loss to net cash provided by (used in) operating activities: | ||||||||
Depreciation and amortization | 7,548 | 5,874 | ||||||
Equity-based compensation | 2,455 | 1,548 | ||||||
Provision for credit losses | 441 | 497 | ||||||
Amortization of deferred financing fees included in interest expense | 1,050 | 453 | ||||||
Loss on disposal of property, plant and equipment | 2 | 896 | ||||||
Mark-to-market adjustments | (1,640 | ) | (1,236 | ) | ||||
Change in fair value of warrant liabilities | (41 | ) | (5,529 | ) | ||||
Foreign currency transactions | 245 | 307 | ||||||
Deferred income tax expense (benefit) | 5,815 | (4,359 | ) | |||||
Other | 343 | 259 | ||||||
Change in operating assets and liabilities: | ||||||||
Accounts receivable | 8,397 | (14,048 | ) | |||||
Inventories | 8,907 | 6,626 | ||||||
Derivative assets and liabilities | 1,302 | (76 | ) | |||||
Prepaid expense and other assets | 494 | (9,510 | ) | |||||
Accounts payable | (18,038 | ) | (10,756 | ) | ||||
Accrued liabilities and other | 14,372 | 8,249 | ||||||
Net cash provided by (used in) operating activities | 7,979 | (25,131 | ) | |||||
Cash flows from investing activities: | ||||||||
Additions to property, plant and equipment | (68,914 | ) | (19,625 | ) | ||||
Additions to intangible assets | (43 | ) | (41 | ) | ||||
Acquisition of business, net of cash acquired | — | (2,392 | ) | |||||
Proceeds from sale of property, plant and equipment | 21 | 30 | ||||||
Net cash used in investing activities | (68,936 | ) | (22,028 | ) | ||||
Cash flows from financing activities: | ||||||||
Payments on debt | (100,462 | ) | (56,358 | ) | ||||
Proceeds from debt | 73,813 | 106,706 | ||||||
Payments on supply chain financing program | (38,980 | ) | — | |||||
Proceeds from supply chain financing program | 39,610 | — | ||||||
Proceeds from convertible notes payable | 72,000 | — | ||||||
Payment of debt issuance costs | (2,934 | ) | (405 | ) | ||||
Net proceeds from (repayments of) repurchase agreements | (4,933 | ) | (4,418 | ) | ||||
Proceeds from exercise of stock options | — | 63 | ||||||
Proceeds from exercise of Public Warrants | — | 2,632 | ||||||
Payment for taxes for net share settlement of equity awards | (1,141 | ) | (1,841 | ) | ||||
Net cash provided by financing activities | 36,973 | 46,379 | ||||||
Effect of exchange rate changes on cash | (80 | ) | (55 | ) | ||||
Net decrease in cash and cash equivalents and restricted cash | (24,064 | ) | (835 | ) | ||||
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 | $ | 13,776 | $ | 25,570 | ||||
Reconciliation of Net Income (Loss) to Non-GAAP Adjusted EBITDA
(Unaudited)
Three Months Ended | ||||||||
(Thousands) | 2024 | 2023 | ||||||
Net loss | $ | (23,673 | ) | $ | (4,326 | ) | ||
Interest expense, net | 7,579 | 6,029 | ||||||
Income tax expense (benefit) | 5,815 | (4,359 | ) | |||||
Depreciation and amortization | 7,548 | 5,874 | ||||||
EBITDA | (2,731 | ) | 3,218 | |||||
Transaction, restructuring and integration expense | 2,964 | 6,644 | ||||||
Change in fair value of warrant liabilities | (41 | ) | (5,529 | ) | ||||
Management and consulting fees ( |
— | 556 | ||||||
Equity-based compensation | 2,455 | 1,548 | ||||||
9,796 | 1,869 | |||||||
Mark-to-market adjustments | (1,640 | ) | (1,236 | ) | ||||
Loss on disposal of property, plant and equipment | 2 | 896 | ||||||
Other | 337 | 487 | ||||||
Adjusted EBITDA | $ | 11,142 | $ | 8,453 | ||||
Reconciliation of Segment Results
(Unaudited)
Three Months Ended |
||||||
(Thousands) | 2024 | 2023 | ||||
Beverage Solutions | $ | 158,059 | $ | 181,209 | ||
Sustainable Sourcing & Traceability1 | 34,441 | 24,233 | ||||
Total of Reportable Segments | $ | 192,500 | $ | 205,442 |
Three Months Ended |
||||||
(Thousands) | 2024 | 2023 | ||||
Gross Profit | ||||||
Beverage Solutions | $ | 32,999 | $ | 30,495 | ||
Sustainable Sourcing & Traceability | 4,275 | 3,803 | ||||
Total of Reportable Segments | $ | 37,274 | $ | 34,298 |
Three Months Ended |
||||||
(Thousands) | 2024 | 2023 | ||||
Adjusted EBITDA | ||||||
Beverage Solutions | $ | 10,800 | $ | 8,421 | ||
Sustainable Sourcing & Traceability | 342 | 32 | ||||
Total of Reportable Segments | $ | 11,142 | $ | 8,453 |
_____________________________
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
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 transaction, restructuring and integration related costs, including management services and consulting agreements entered into in connection with the acquisition of
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.
Source: Westrock Coffee Company