Core Viewpoint - Westrock Coffee Company (WEST) has been upgraded to a Zacks Rank 2 (Buy) due to an upward trend in earnings estimates, which is a significant factor influencing stock prices [1][3]. Earnings Estimates and Stock Price Movement - The Zacks rating system emphasizes the importance of changing earnings estimates in determining stock price movements, as there is a strong correlation between earnings estimate revisions and near-term stock performance [4][6]. - Rising earnings estimates for Westrock Coffee indicate an improvement in the company's underlying business, which is expected to positively influence its stock price [5][10]. Zacks Rating System - The Zacks Rank stock-rating system categorizes stocks into five groups based on earnings estimates, with a proven track record of Zacks Rank 1 stocks generating an average annual return of +25% since 1988 [7]. - The upgrade of Westrock Coffee to Zacks Rank 2 places it in the top 20% of Zacks-covered stocks, suggesting a strong potential for market-beating returns in the near term [9][10]. Earnings Estimate Revisions for Westrock Coffee - For the fiscal year ending December 2025, Westrock Coffee is expected to earn -$0.28 per share, which remains unchanged from the previous year [8]. - Over the past three months, the Zacks Consensus Estimate for Westrock Coffee has increased by 3.4%, indicating a positive trend in earnings expectations [8].

Financial Performance - Westrock Coffee Company reported a quarterly loss of $0.12 per share, which was better than the Zacks Consensus Estimate of a loss of $0.14, representing an earnings surprise of +14.29% [1] - The company posted revenues of $280.86 million for the quarter ended June 2025, exceeding the Zacks Consensus Estimate by 17.06%, compared to year-ago revenues of $208.39 million [2] - The current consensus EPS estimate for the upcoming quarter is -$0.04 on revenues of $285.9 million, and for the current fiscal year, it is -$0.28 on revenues of $1.04 billion [7] Stock Performance - Westrock Coffee Company shares have increased by approximately 8.9% since the beginning of the year, outperforming the S&P 500's gain of 7.9% [3] - The stock currently holds a Zacks Rank 3 (Hold), indicating it is expected to perform in line with the market in the near future [6] Industry Outlook - The Beverages - Soft drinks industry, to which Westrock Coffee Company belongs, is currently ranked in the top 38% of over 250 Zacks industries, suggesting a favorable outlook [8]

Core Insights - Westrock Coffee reported record revenue of $280.9 million for Q2 2025, a 34.8% increase year-over-year, exceeding analyst estimates of $238.3 million [1][2] - Despite strong revenue growth, the company faced a net loss of $0.23 per share, which was deeper than the expected loss of $0.15 per share, primarily due to higher facility scale-up costs and rising interest expenses [1][2] Financial Performance - Revenue for Q2 2025 was $280.9 million, compared to $238.3 million estimated and $208.4 million in Q2 2024, reflecting a 34.8% year-over-year increase [2] - Consolidated Adjusted EBITDA was $15.3 million, up 23.4% from $12.4 million in Q2 2024 [2] - Beverage Solutions revenue reached $208.8 million, a 27.8% increase from $163.3 million in Q2 2024 [2] - Beverage Solutions Segment Adjusted EBITDA was $19.7 million, a significant increase of 48.5% from $13.2 million in Q2 2024 [2] Business Strategy - Westrock Coffee focuses on integrated beverage solutions for large commercial clients, including roasted coffee, tea, and ready-to-drink formats [3] - The company targets high-growth beverage formats and has been expanding its vertically integrated supply chain while developing proprietary technology for sustainable sourcing [4] Operational Highlights - The ramp-up of two major facilities in Conway, Arkansas, contributed to high production utilization, operating near 85% capacity [6] - The company achieved record performance in both Beverage Solutions and Sustainable Sourcing & Traceability segments, with the latter seeing a 59.6% increase in sales [5] Cost and Profitability Challenges - The net loss widened to $21.6 million, with scale-up costs for new facilities totaling $7.6 million, significantly higher than $1.2 million in Q2 2024 [7] - Interest expenses rose from $7.5 million in Q2 2024 to $13.1 million in Q2 2025 [7] - Gross profit remained flat due to elevated coffee prices and new U.S. tariffs on coffee imports affecting working capital [8] Cash Flow and Balance Sheet - The company used $29.1 million in operating cash in the first half of 2025, up from $15.7 million in the same period of 2024 [9] - Capital expenditures were $61.8 million in the first half of 2025, reflecting ongoing investments in plant and equipment [9] - Cash and equivalents increased to $43.96 million from $26.15 million at the end of 2024, while total debt rose to $469.2 million [9] Future Outlook - Management reaffirmed guidance for fiscal 2025 and 2026, indicating strong performance in key metrics like consolidated adjusted EBITDA [11] - The company warned that U.S. coffee tariffs would impact results in Q3 2025, although costs are expected to be passed on to customers [12]

Financial Data and Key Metrics Changes - The company reported record-breaking second quarter results with adjusted EBITDA of $23 million, up 100% from the first quarter and approximately 70% year-over-year [6][12] - Consolidated net sales increased by 34.8% compared to 2024, although a net loss of $21.6 million was reported due to planned investments in the Conway facility [12][13] - Consolidated adjusted EBITDA was $15.3 million, which included $7.6 million of scale-up operating costs related to the Conway facility [13][15] Business Line Data and Key Metrics Changes - In the Beverage Solutions segment, net sales increased by 27.9% year-over-year, with adjusted EBITDA growing 48.5% to $19.7 million [13][14] - The SS and T segment saw net sales grow by 60% year-over-year, with adjusted EBITDA rising to $3.3 million from $400,000 in the prior year quarter [14] Market Data and Key Metrics Changes - The company experienced a 13.7% volume increase in core roasting ground coffee and a 21.1% increase in single-serve cups, contributing to overall sales growth [13][14] - Commodity coffee price increases were passed on to customers, contributing to top-line growth [14] Company Strategy and Development Direction - The company aims to become the premier integrated strategic supplier to leading coffee, tea, and energy beverage brands globally, focusing on innovation and sustainable sourcing [10][11] - The company is leveraging its relationship with Palantir for data intelligence and risk mitigation, which has significantly contributed to profitability [24][26] Management's Comments on Operating Environment and Future Outlook - Management acknowledged potential headwinds from elevated tariffs, persistent inflation, and softening consumer confidence, but noted strong demand across all customer segments [19][20] - The company remains on track to meet its guidance for the second half of the year, with no changes expected to forward guidance [20] Other Important Information - Capital expenditures for the quarter totaled approximately $20 million, primarily related to the Conway facility [15] - The company has approximately $72 million in unrestricted cash and liquidity under its revolving credit facility [15] Q&A Session Summary Question: Can you expand on the comment regarding results being different in mix? - Management noted that the mix was better in some profitability categories, with slower volume throughput at Conway being offset by improvements in core business areas [22][23] Question: Can you provide more background on the relationship with Palantir? - The company utilizes Palantir's data analytics to enhance risk management and profitability, with expectations for further improvements in manufacturing [25][26] Question: What is the status of the second RTD can line? - The second RTD can line is expected to be installed in October and in production by early November [28][29] Question: What is the visibility for production over the next six to nine months? - Management indicated good visibility on current customer orders, with potential for additional orders as new lines come online [34][35] Question: How is the market share in single serve coffee evolving? - The company is expanding its capacity and has secured new business, but faces competition from larger players like Keurig [47][48] Question: How does the company manage sourcing in light of tariffs? - The company can sometimes substitute sourcing from different countries, but it depends on contract terms and customer profiles [50][52]

[Part I. Financial Information](index=5&type=section&id=Part%20I.%20Financial%20Information) This section presents the company's unaudited condensed consolidated financial statements and management's analysis [Item 1. Financial Statements](index=5&type=section&id=Item%201.%20Financial%20Statements) This section presents unaudited consolidated financial statements and notes for periods ended June 30, 2025 [Condensed Consolidated Balance Sheets](index=5&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) This section details the company's financial position, including assets, liabilities, and equity Condensed Consolidated Balance Sheet Highlights (Thousands) | Metric | June 30, 2025 | December 31, 2024 | | :--------------------------------------- | :------------ | :---------------- | | Cash and cash equivalents | $43,956 | $26,151 | | Inventories | $194,244 | $163,323 | | Derivative assets | $28,176 | $19,746 | | Total current assets | $376,643 | $333,643 | | Total Assets | $1,157,477 | $1,101,780 | | Total current liabilities | $361,400 | $277,870 | | Supply chain finance program | $98,300 | $78,838 | | Derivative liabilities | $35,099 | $11,966 | | Total liabilities | $865,552 | $730,448 | | Total shareholders' equity | $18,247 | $97,482 | - Accumulated other comprehensive income (loss) shifted from a gain of **$19,584 thousand** at December 31, 2024, to a loss of **$(17,558) thousand** at June 30, 2025[11](index=11&type=chunk) [Condensed Consolidated Statements of Operations](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) This section outlines the company's financial performance, including net sales, gross profit, and net loss Condensed Consolidated Statements of Operations Highlights (Thousands, except per share data) | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :------------------------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Net sales | $280,859 | $208,389 | $494,655 | $400,889 | | Gross profit | $41,395 | $41,403 | $70,468 | $78,677 | | Loss from operations | $(15,013) | $(16,408) | $(28,082) | $(26,540) | | Interest expense | $13,119 | $7,453 | $25,718 | $15,032 | | Net loss | $(21,563) | $(17,759) | $(48,781) | $(41,432) | | Basic (Loss) earnings per common share | $(0.23) | $(0.20) | $(0.51) | $(0.47) | - Net sales increased by **34.8%** for the three months ended June 30, 2025, and by **23.4%** for the six months ended June 30, 2025, compared to the respective prior-year periods[12](index=12&type=chunk) - Interest expense significantly increased by **71.1%** for the six months ended June 30, 2025, compared to the same period in 2024[12](index=12&type=chunk) [Condensed Consolidated Statements of Comprehensive Income (Loss)](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Comprehensive%20Income%20(Loss)) This section presents comprehensive income or loss, including net loss and other comprehensive income Condensed Consolidated Statements of Comprehensive Income (Loss) Highlights (Thousands) | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :------------------------------------ | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Net loss | $(21,563) | $(17,759) | $(48,781) | $(41,432) | | Unrealized gain (loss) on derivative instruments | $(35,998) | $3,820 | $(36,766) | $4,006 | | Foreign currency translation adjustment | $(423) | $51 | $(376) | $81 | | Total other comprehensive income (loss) | $(36,421) | $3,871 | $(37,142) | $4,087 | | Comprehensive (loss) income | $(57,984) | $(13,888) | $(85,923) | $(37,345) | - Total other comprehensive income (loss) experienced a significant negative swing, moving from a gain of **$4,087 thousand** in the six months ended June 30, 2024, to a loss of **$(37,142) thousand** in the same period of 2025, primarily due to unrealized losses on derivative instruments[13](index=13&type=chunk) [Condensed Consolidated Statements of Shareholders' Equity](index=8&type=section&id=Condensed%20Consolidated%20Statements%20of%20Shareholders'%20Equity) This section details changes in shareholders' equity, including common stock, capital, and deficit Condensed Consolidated Statements of Shareholders' Equity Highlights (Thousands) | Metric | June 30, 2025 | December 31, 2024 | | :-------------------------------- | :------------ | :---------------- | | Common Stock (Shares) | 94,708 | 94,221 | | Additional Paid-in Capital | $526,561 | $519,878 | | Accumulated Deficit | $(491,703) | $(442,922) | | Accumulated Other Comprehensive Income (Loss) | $(17,558) | $19,584 | | Total Equity | $18,247 | $97,482 | - Total shareholders' equity decreased significantly from **$97,482 thousand** at December 31, 2024, to **$18,247 thousand** at June 30, 2025, primarily driven by the accumulated deficit and a shift in accumulated other comprehensive income from a gain to a loss[14](index=14&type=chunk)[16](index=16&type=chunk) - Equity-based compensation for the six months ended June 30, 2025, was **$8,080 thousand**, an increase from **$5,481 thousand** in the prior year[16](index=16&type=chunk) [Condensed Consolidated Statements of Cash Flows](index=10&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) This section presents cash flows from operating, investing, and financing activities Condensed Consolidated Statements of Cash Flows Highlights (Thousands, Six Months Ended June 30) | Metric | 2025 | 2024 | | :------------------------------------------------- | :------- | :-------- | | Net cash used in operating activities | $(29,073) | $(15,691) | | Net cash used in investing activities | $(64,002) | $(104,760) | | Additions to property, plant and equipment | $(61,826) | $(105,105) | | Net cash provided by financing activities | $109,887 | $108,409 | | Net increase (decrease) in cash and cash equivalents and restricted cash | $16,760 | $(11,813) | | Cash and cash equivalents and restricted cash at end of period | $52,324 | $26,027 | - Net cash used in operating activities increased to **$(29,073) thousand** for the six months ended June 30, 2025, from **$(15,691) thousand** in the prior year[17](index=17&type=chunk) - Net cash used in investing activities decreased due to lower capital expenditures, with additions to property, plant, and equipment falling from **$105,105 thousand** in 2024 to **$61,826 thousand** in 2025[17](index=17&type=chunk) [Note 1. Organization and Description of Business](index=11&type=section&id=Note%201.%20Organization%20and%20Description%20of%20Business) This note describes Westrock Coffee Company's global operations as an integrated coffee, tea, and ingredients provider - Westrock Coffee Company is a leading integrated coffee, tea, flavors, extracts, and ingredients solutions provider globally[18](index=18&type=chunk) - The company operates in two segments: * **Beverage Solutions:** Provides value-added beverage solutions, including coffee, tea, flavors, extracts, and ingredients, in various packaging formats to retail, food service, CPG, and hospitality industries[19](index=19&type=chunk) * **Sustainable Sourcing & Traceability (SS&T):** Utilizes proprietary technology and a digitally traceable supply chain to empower farming partners and emphasize environmental accountability, with revenues primarily from forward sales of green coffee[20](index=20&type=chunk) [Note 2. Basis of Presentation and Consolidation](index=11&type=section&id=Note%202.%20Basis%20of%20Presentation%20and%20Consolidation) This note explains the basis of financial statement presentation and consolidation, including the Rwandan JV - On April 1, 2025, the Company formed a Rwandan joint venture (Rwandan JV) with ETC Holdings SA (ECOM) to combine Rwandan export operations, contributing its ownership in Rwanda Trading Company (RTC) and **$100,000** cash for a **49.9%** interest[22](index=22&type=chunk) - As a result of the Rwandan JV, the Company de-consolidated RTC, derecognizing **$9.3 million** of assets and **$10.3 million** of liabilities, and recognized a **$2.3 million** gain during the three months ended June 30, 2025[22](index=22&type=chunk) [Note 3. Summary of Significant Accounting Policies](index=13&type=section&id=Note%203.%20Summary%20of%20Significant%20Accounting%20Policies) This note outlines the company's significant accounting policies, including liquidity, inventory, debt, and tax - The Company incurred net losses of **$48.8 million** and net cash outflows from operating activities of **$29.1 million** for the six months ended June 30, 2025, but believes projected cash flow from operations and available borrowings will be sufficient to fund operations and maintain covenant compliance for at least the next twelve months[26](index=26&type=chunk) - On January 15, 2025, the Company amended its Credit Agreement, increasing available borrowings by **$25.0 million** and modifying certain financial covenants to support liquidity[27](index=27&type=chunk) - Green coffee inventory associated with forward contracts resulted in **$10.7 million** of net unrealized losses for the six months ended June 30, 2025, compared to **$1.0 million** of net unrealized gains in the prior year[33](index=33&type=chunk) - Supply chain finance program obligations increased to **$98.3 million** at June 30, 2025, from **$78.8 million** at December 31, 2024[35](index=35&type=chunk) - The Company recognized **$0.6 million** in capitalized interest costs for the six months ended June 30, 2025, a significant decrease from **$7.2 million** in the prior year, reflecting progress on the Conway Facility[34](index=34&type=chunk) - Restructuring activities in 2024 included the closure and sale of the West Winds facility and closure of the Richmond, California facility, incurring **$0.8 million** in impairment charges on equipment in Q2 2024[39](index=39&type=chunk)[41](index=41&type=chunk) - The effective income tax rate for the six months ended June 30, 2025, was **(3.1)%**, primarily due to an increase in the valuation allowance against domestic deferred tax assets[47](index=47&type=chunk) [Note 4. Revenue](index=23&type=section&id=Note%204.%20Revenue) This note disaggregates revenue by type and geographic area, detailing commodity contract gains - Revenues from commodity contracts (ASC 815) recognized **$14.2 million** in net unrealized gains for the six months ended June 30, 2025, compared to **$2.2 million** in 2024[60](index=60&type=chunk) Disaggregated Revenue by Type (Thousands, Six Months Ended June 30) | Category | 2025 | 2024 | | :-------------------------- | :------- | :------- | | Coffee & tea | $274,633 | $233,845 | | Flavors, extracts & ingredients | $97,229 | $85,782 | | Other | $1,031 | $1,685 | | Green coffee | $121,762 | $79,577 | | **Total Net Sales** | **$494,655** | **$400,889** | Disaggregated Revenue by Geographic Area (Thousands, Six Months Ended June 30) | Region | 2025 | 2024 | | :---------------- | :------- | :------- | | United States | $385,485 | $327,070 | | All other countries | $109,170 | $73,819 | | **Total Net Sales** | **$494,655** | **$400,889** | [Note 5. Inventories](index=26&type=section&id=Note%205.%20Inventories) This note details the composition of inventories, including raw materials, finished goods, and green coffee Inventory Composition (Thousands) | Category | June 30, 2025 | December 31, 2024 | | :-------------- | :------------ | :---------------- | | Raw materials | $96,170 | $82,412 | | Finished goods | $44,941 | $32,520 | | Green coffee | $53,133 | $48,391 | | **Total inventories** | **$194,244** | **$163,323** | - Total inventories increased by **$30.9 million** from December 31, 2024, to June 30, 2025, with raw materials and finished goods seeing notable increases[67](index=67&type=chunk) [Note 6. Property, Plant and Equipment, Net](index=27&type=section&id=Note%206.%20Property,%20Plant%20and%20Equipment,%20Net) This note provides a breakdown of property, plant, and equipment, net, and depreciation expense Property, Plant and Equipment, Net (Thousands) | Category | June 30, 2025 | December 31, 2024 | | :--------------------------------------- | :------------ | :---------------- | | Land | $5,160 | $6,581 | | Buildings | $182,818 | $175,171 | | Plant equipment | $275,326 | $249,933 | | Construction in progress and equipment deposits | $85,677 | $85,279 | | **Property, plant and equipment, net** | **$480,653** | **$467,011** | - Depreciation expense for the six months ended June 30, 2025, was **$22.8 million**, significantly higher than **$11.3 million** for the same period in 2024[70](index=70&type=chunk) [Note 7. Goodwill](index=27&type=section&id=Note%207.%20Goodwill) This note details the carrying amount of goodwill and accumulated impairment loss - The carrying amount of goodwill remained stable at **$116,111 thousand** for both June 30, 2025, and December 31, 2024, with an accumulated impairment loss of **$76,883 thousand**[71](index=71&type=chunk) [Note 8. Intangible Assets, Net](index=28&type=section&id=Note%208.%20Intangible%20Assets,%20Net) This note presents the net carrying amount of intangible assets, including customer relationships and software Intangible Assets, Net (Thousands) | Category | June 30, 2025 (Net) | December 31, 2024 (Net) | | :-------------------- | :------------------ | :-------------------- | | Customer relationships | $110,597 | $114,451 | | Software | $323 | $417 | | **Intangible assets, net** | **$110,920** | **$114,879** | - Amortization expense for intangible assets was **$3.9 million** for the six months ended June 30, 2025, slightly down from **$4.1 million** in the prior year[72](index=72&type=chunk) [Note 9. Leases](index=28&type=section&id=Note%209.%20Leases) This note details operating lease assets, liabilities, costs, and future minimum lease payments Operating Lease Assets and Liabilities (Thousands) | Category | June 30, 2025 | December 31, 2024 | | :-------------------------------- | :------------ | :---------------- | | Operating lease right-of-use assets | $61,955 | $63,380 | | Operating lease liabilities - noncurrent | $59,553 | $60,692 | - Total lease costs for the six months ended June 30, 2025, were **$5.6 million**, a decrease from **$6.0 million** in the prior year[76](index=76&type=chunk) - The weighted-average remaining lease term is **11.8 years** as of June 30, 2025[76](index=76&type=chunk) Future Minimum Lease Payments (Thousands, as of June 30, 2025) | Year | Amount | | :--------- | :------- | | 2025 | $5,244 | | 2026 | $8,916 | | 2027 | $8,736 | | 2028 | $8,141 | | 2029 | $8,184 | | Thereafter | $62,299 | | **Total future minimum lease payments** | **$101,520** | | Less: imputed interest | $(37,301) | | **Present value of minimum lease payments** | **$64,219** | [Note 10. Debt](index=30&type=section&id=Note%2010.%20Debt) This note provides a breakdown of long-term debt, including term loans, revolving credit, and convertible notes Long-Term Debt (Thousands) | Category | June 30, 2025 | December 31, 2024 | | :-------------------------- | :------------ | :---------------- | | Term loan facility | $150,938 | $155,313 | | Delayed draw term loan facility | $46,875 | $48,125 | | Revolving credit facility | $172,500 | $112,500 | | Convertible notes payable | $72,000 | $72,000 | | International trade finance lines | $75,170 | $54,659 | | **Total debt** | **$521,997** | **$447,727** | - The Credit Agreement's Revolving Credit Facility was increased by **$25.0 million** to **$200.0 million** on January 15, 2025, via the Fourth Amendment, to fund a second ready-to-drink can line at the Conway Facility and for general corporate purposes[85](index=85&type=chunk) - The Fourth Amendment also modified the secured net leverage ratio covenant, increasing the maximum allowable ratio to **6.00x** for the test period ending June 30, 2025, **5.50x** for September 30, 2025, and **5.25x** for December 31, 2025[86](index=86&type=chunk) - As of June 30, 2025, the Company was in compliance with its financial covenants[86](index=86&type=chunk) - Outstanding borrowings under the Revolving Credit Facility were **$172.5 million** at June 30, 2025, with a weighted average interest rate of **8.2%**[81](index=81&type=chunk) - The Company issued **$72.0 million** in **5.00%** convertible senior notes due 2029 on February 15, 2024, with **$50.0 million** from related parties[89](index=89&type=chunk) - Falcon Coffees Limited's working capital trade finance facility was increased from **$75.0 million** to **$85.0 million** on March 7, 2025, and further to **$102.5 million** on July 23, 2025 (subsequent event)[96](index=96&type=chunk)[175](index=175&type=chunk) [Note 11. Series A Preferred Shares](index=36&type=section&id=Note%2011.%20Series%20A%20Preferred%20Shares) This note describes Series A Preferred Shares, including outstanding amounts, conversion rights, and redemption terms - There are **23,510,527** Westrock Series A Preferred Shares outstanding, with an initial liquidation preference of **$11.50** per share[100](index=100&type=chunk)[101](index=101&type=chunk) - Holders can convert Series A Preferred Shares into common shares at a rate based on the liquidation preference divided by the conversion price (**$11.50**)[102](index=102&type=chunk) - After February 26, 2028, Series A Preferred Shares are redeemable by holders or Westrock at the greater of the liquidation preference or market value, with an estimated aggregate redemption payment of at least **$270.4 million**[103](index=103&type=chunk)[104](index=104&type=chunk) - The Company recorded **$0.2 million** of amortization for Series A Convertible Preferred Shares for both the six months ended June 30, 2025, and 2024[105](index=105&type=chunk) [Note 12. Common Stock Warrants](index=38&type=section&id=Note%2012.%20Common%20Stock%20Warrants) This note details common stock warrants, their fair value measurement, and exchange offer results - The Company classifies warrants as liabilities and re-measures them at fair value each reporting period[106](index=106&type=chunk) - No gains or losses were recognized from changes in the fair value of warrant liabilities for the three and six months ended June 30, 2025, compared to gains of **$1.6 million** and **$1.7 million**, respectively, in 2024[107](index=107&type=chunk) - The Company completed an exchange offer and consent solicitation for its Westrock Warrants in September 2024, resulting in the issuance of **5,423,681** Common Shares[109](index=109&type=chunk) - All Westrock Warrants were exchanged and subsequently delisted by October 15, 2024[113](index=113&type=chunk)[114](index=114&type=chunk) [Note 13. Derivatives](index=40&type=section&id=Note%2013.%20Derivatives) This note explains the company's use of derivative instruments for hedging, fair value, and related gains/losses - The Company uses coffee futures contracts as cash flow hedges to minimize cash flow variability from green coffee price fluctuations, with a notional amount of **49.2 million pounds** at June 30, 2025, up from **11.0 million pounds** at December 31, 2024[119](index=119&type=chunk)[120](index=120&type=chunk) - Net realized gains from cash flow hedges reclassified from AOCI to costs of sales were **$22.3 million** for the six months ended June 30, 2025, a significant increase from **$3.6 million** in the prior year[122](index=122&type=chunk) - An estimated **$18.0 million** of net losses reported in AOCI is expected to be reclassified to the Condensed Consolidated Statements of Operations within the next twelve months[122](index=122&type=chunk) Fair Value of Derivative Instruments (Thousands) | Category | June 30, 2025 | December 31, 2024 | | :-------------------------------- | :------------ | :---------------- | | Derivative assets | $28,176 | $19,746 | | Derivative liabilities | $35,099 | $11,966 | - Net unrealized gains on forward sales and purchase contracts (not designated as cash flow hedges) recognized in costs of sales were **$14.2 million** for the six months ended June 30, 2025, compared to **$2.2 million** in 2024[126](index=126&type=chunk) [Note 14. Fair Value Measurements](index=43&type=section&id=Note%2014.%20Fair%20Value%20Measurements) This note presents the fair value of financial instruments, categorized by valuation levels and key assumptions Fair Value of Financial Instruments (Thousands, June 30, 2025) | Category | Level 1 | Level 2 | Level 3 | Total | | :-------------------------------- | :------ | :------ | :------ | :------ | | **Assets:** | | | | | | Green coffee associated with forward contracts | $— | $52,646 | $— | $52,646 | | Forward purchase and sales contracts | $— | $28,176 | $— | $28,176 | | **Total Assets** | **$—** | **$80,822** | **$—** | **$80,822** | | **Liabilities:** | | | | | | Coffee futures contracts | $23,316 | $— | $— | $23,316 | | Options contracts | $1,795 | $— | $— | $1,795 | | Forward purchase and sales contracts | $— | $9,988 | $— | $9,988 | | **Total Liabilities** | **$25,111** | **$9,988** | **$—** | **$35,099** | - The estimated fair value of Convertible Notes was **$60.0 million** as of June 30, 2025, determined using a Level 3 binomial lattice model with unobservable inputs including expected volatility of **50.0%** and assumed debt yield of **14.7%**[133](index=133&type=chunk)[134](index=134&type=chunk) [Note 15. Accumulated Other Comprehensive Income (Loss)](index=45&type=section&id=Note%2015.%20Accumulated%20Other%20Comprehensive%20Income%20(Loss)) This note details changes in accumulated other comprehensive income (loss) from derivative instruments Changes in Accumulated Other Comprehensive Income (Loss) (Thousands, Six Months Ended June 30) | Component | 2025 | 2024 | | :------------------------------------------------- | :--------- | :------- | | Unrealized gain (loss) on derivative instruments (beginning balance) | $18,863 | $3,362 | | Unrealized gain (loss) on derivative instruments (ending balance) | $(17,903) | $7,368 | | Foreign currency translation adjustment (ending balance) | $345 | $537 | | **Accumulated other comprehensive income (loss) at end of period** | **$(17,558)** | **$7,905** | - Accumulated other comprehensive income (loss) shifted from a gain of **$7,905 thousand** at June 30, 2024, to a loss of **$(17,558) thousand** at June 30, 2025, primarily due to unrealized losses on derivative instruments[137](index=137&type=chunk) [Note 16. Equity-Based Compensation](index=45&type=section&id=Note%2016.%20Equity-Based%20Compensation) This note describes equity-based compensation, including RSU grants, available shares, and activity - During the six months ended June 30, 2025, the Company granted **1.5 million** RSUs with an aggregate fair value of **$9.0 million** under the 2022 Equity Plan[145](index=145&type=chunk) - As of June 30, 2025, **3.1 million** shares were available for future issuance under the 2022 Equity Plan[145](index=145&type=chunk) RSU Activity (Units, Six Months Ended June 30, 2025) | Category | Service-based Restricted Stock Units | Performance-based Restricted Stock Units | Market-based Restricted Stock Units | | :-------------------------- | :--------------------------------- | :------------------------------------- | :---------------------------------- | | Outstanding at December 31, 2024 | 2,444,228 | — | — | | Granted | 295,654 | 607,610 | 607,644 | | Forfeited | (11,159) | — | — | | Vested | (712,983) | — | — | | **Outstanding at June 30, 2025** | **2,015,740** | **607,610** | **607,644** | [Note 17. Earnings per Share](index=47&type=section&id=Note%2017.%20Earnings%20per%20Share) This note presents basic and diluted earnings per common share and potentially dilutive securities - Basic and diluted earnings per common share for the six months ended June 30, 2025, were **$(0.51)**, compared to **$(0.47)** for the same period in 2024[150](index=150&type=chunk) Potentially Dilutive Securities Excluded (Thousands, Six Months Ended June 30) | Category | 2025 | 2024 | | :-------------------- | :----- | :----- | | Restricted stock units | 2,147 | 2,504 | | Options | 1,255 | 1,322 | | If-converted securities | 34,568 | 25,278 | [Note 18. Segment Information](index=48&type=section&id=Note%2018.%20Segment%20Information) This note provides disaggregated financial information for Beverage Solutions and Sustainable Sourcing & Traceability segments Segment Net Sales (Thousands, Six Months Ended June 30) | Segment | 2025 | 2024 | | :-------------------------------- | :------- | :------- | | Beverage Solutions | $372,893 | $321,312 | | Sustainable Sourcing & Traceability | $121,762 | $79,577 | | **Total Net Sales** | **$494,655** | **$400,889** | Segment Adjusted EBITDA (Thousands, Six Months Ended June 30) | Segment | 2025 | 2024 | | :-------------------------------- | :------- | :------- | | Beverage Solutions | $29,253 | $24,045 | | Sustainable Sourcing & Traceability | $5,243 | $761 | | **Total Segment Adjusted EBITDA** | **$34,496** | **$24,806** | - Beverage Solutions net sales increased by **16.1%** for the six months ended June 30, 2025, driven by a **10.7%** increase in roast and ground coffee volumes and higher coffee commodity prices[196](index=196&type=chunk) - Sustainable Sourcing & Traceability net sales increased by **53.0%** for the six months ended June 30, 2025, primarily due to a **52.3%** increase in the average sales price per pound, correlated to global commodities prices[198](index=198&type=chunk) [Note 19. Commitments and Contingencies](index=53&type=section&id=Note%2019.%20Commitments%20and%20Contingencies) This note outlines legal proceedings, purchase obligations, and inventory repurchase commitments - Dairy Farmers of America, Inc. filed a complaint against the Company alleging trade secret misappropriation, with a trial tentatively scheduled for August 10, 2026[165](index=165&type=chunk)[166](index=166&type=chunk) - Future purchase obligations for inventory total **$422.1 million** over the next 12 months as of June 30, 2025[168](index=168&type=chunk) - The Company had inventory repurchase obligations of **$0.5 million** for repurchase agreements and **$9.9 million** for Repo Transactions at June 30, 2025[169](index=169&type=chunk)[170](index=170&type=chunk) [Note 20. Related Party Transactions](index=53&type=section&id=Note%2020.%20Related%20Party%20Transactions) This note details transactions with related parties, including convertible notes and green coffee purchases Convertible Notes Payable - Related Party (Thousands) | Related Party | June 30, 2025 | December 31, 2024 | | :-------------------------- | :------------ | :---------------- | | Westrock Group | $20,000 | $20,000 | | Wooster Capital | $5,000 | $5,000 | | HF Direct Investments Pool, LLC | $25,000 | $25,000 | | **Total (net of unamortized debt costs)** | **$49,741** | **$49,706** | - Interest expense from related party convertible notes was **$1.3 million** for the six months ended June 30, 2025, an increase from **$0.9 million** in the prior year[173](index=173&type=chunk) - Falcon purchased **$0.3 million** of green coffee from the Rwandan JV (in which the Company has a **49.9%** interest) during the three and six months ended June 30, 2025[174](index=174&type=chunk) [Note 21. Subsequent Events](index=55&type=section&id=Note%2021.%20Subsequent%20Events) This note describes significant events occurring after the reporting period, such as facility financing - On July 23, 2025, Falcon's working capital trade finance facility was increased from **$85.0 million** to **$102.5 million**[175](index=175&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=56&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section provides management's analysis of financial condition and results of operations [Overview](index=56&type=section&id=Overview) This section provides an overview of Westrock Coffee Company's business, segments, and strategic platform - Westrock Coffee Company is a leading integrated provider of coffee, tea, flavors, extracts, and ingredients solutions, serving various industries globally[177](index=177&type=chunk) - The company operates through two segments: Beverage Solutions and Sustainable Sourcing & Traceability (SS&T)[179](index=179&type=chunk) - Its platform is built on transparent supply chain, innovative beverage solutions, high-quality products, and scaled international presence, emphasizing responsible sourcing and ESG[178](index=178&type=chunk) [Significant Developments](index=56&type=section&id=Significant%20Developments) This section highlights key developments, including the Rwandan joint venture and its financial impact - On April 1, 2025, the Company formed a Rwandan joint venture (Rwandan JV) with ETC Holdings SA (ECOM) to combine Rwandan export operations, contributing its ownership in Rwanda Trading Company (RTC) and **$100,000** cash for a **49.9%** interest[182](index=182&type=chunk) - The transaction resulted in the de-consolidation of RTC, derecognizing **$9.3 million** of assets and **$10.3 million** of liabilities, and a **$2.3 million** gain recognized during the three months ended June 30, 2025[182](index=182&type=chunk)[183](index=183&type=chunk) [Results of Operations](index=58&type=section&id=Results%20of%20Operations) This section analyzes the company's net sales, costs of sales, and other expenses Net Sales by Segment (Thousands, Three Months Ended June 30) | Segment | 2025 | 2024 | YoY Change (%) | | :-------------------------------- | :------- | :------- | :------------- | | Beverage Solutions | $208,814 | $163,253 | 27.9% | | Sustainable Sourcing & Traceability | $72,045 | $45,136 | 59.6% | | **Total Net Sales** | **$280,859** | **$208,389** | **34.8%** | - Beverage Solutions net sales increased due to a **21.1%** rise in single-serve cup volumes, a **13.7%** increase in core roast and ground coffee volumes, and higher coffee commodity prices, along with a **$6.6 million** increase in flavors, extracts & ingredients sales from the Conway Facility ramp-up[186](index=186&type=chunk) - Sustainable Sourcing & Traceability net sales increased primarily due to a **50.1%** increase in the average sales price per pound, correlated to global commodities prices, and a **10.3%** increase in sales volume[187](index=187&type=chunk) Costs of Sales by Segment (Thousands, Three Months Ended June 30) | Segment | 2025 | 2024 | YoY Change (%) | | :-------------------------------- | :------- | :------- | :------------- | | Beverage Solutions | $174,528 | $126,638 | 37.8% | | Sustainable Sourcing & Traceability | $64,936 | $40,348 | 60.9% | | **Total Costs of Sales** | **$239,464** | **$166,986** | **43.4%** | - Transaction, restructuring, and integration expenses decreased to **$2.5 million** in Q2 2025 (primarily severance and factoring agreement fees) from **$4.4 million** in Q2 2024 (primarily severance and employee termination costs)[191](index=191&type=chunk) - Interest expense for Q2 2025 was **$13.1 million**, up from **$7.5 million** in Q2 2024, driven by higher outstanding borrowings on the revolving credit facility and lower capitalized interest[192](index=192&type=chunk) [Critical Accounting Estimates](index=63&type=section&id=Critical%20Accounting%20Estimates) This section confirms no material changes to critical accounting estimates - There have been no material changes to the critical accounting estimates discussed in the Company's Annual Report on Form 10-K filed on March 12, 2025[207](index=207&type=chunk) [Key Business Metrics](index=64&type=section&id=Key%20Business%20Metrics) This section discusses key non-GAAP financial measures, including Consolidated Adjusted EBITDA - The Company uses non-GAAP measures, EBITDA and Consolidated Adjusted EBITDA, to evaluate performance and make strategic decisions[208](index=208&type=chunk)[209](index=209&type=chunk) Consolidated Adjusted EBITDA (Thousands) | Period | 2025 | 2024 | | :-------------------------- | :------- | :------- | | Three Months Ended June 30 | $15,338 | $12,434 | | Six Months Ended June 30 | $23,561 | $23,576 | - Consolidated Adjusted EBITDA for the three months ended June 30, 2025, increased by **23.4%** to **$15,338 thousand**, while for the six months ended June 30, 2025, it remained relatively flat at **$23,561 thousand**[212](index=212&type=chunk) - Consolidated Adjusted EBITDA for Q2 2024 and H1 2024 was revised to exclude scale-up operating costs related to the Conway Facility[212](index=212&type=chunk) [Liquidity and Capital Resources](index=65&type=section&id=Liquidity%20and%20Capital%20Resources) This section details the company's liquidity needs, debt facilities, capital expenditures, and obligations - The Company's principal liquidity needs are to fund operating expenses, meet debt service obligations, and finance capital expenditures, particularly for the commercialization of the Conway Facility[213](index=213&type=chunk)[247](index=247&type=chunk) - Green coffee 'C' market prices increased approximately **70%** in 2024 and continue to fluctuate, requiring increased working capital and posing risks of supply chain disruptions[215](index=215&type=chunk)[216](index=216&type=chunk) - The Fourth Amendment to the Credit Agreement on January 15, 2025, increased the Revolving Credit Facility by **$25.0 million** to **$200.0 million** and modified the secured net leverage ratio covenant to **6.00x** for Q2 2025, **5.50x** for Q3 2025, and **5.25x** for Q4 2025[228](index=228&type=chunk)[229](index=229&type=chunk) - As of June 30, 2025, the Company's secured net leverage ratio was **4.75:1.00**, well within the maximum allowable ratio of **6.00:1.00**, and the Company was in compliance with its financial covenants[226](index=226&type=chunk)[229](index=229&type=chunk) - The Company entered into a receivable purchase agreement on June 27, 2025, to sell up to **$35.0 million** of trade receivables on a nonrecourse basis, receiving **$35.0 million** in proceeds during the six months ended June 30, 2025[243](index=243&type=chunk)[244](index=244&type=chunk) - Material capital expenditures for the Conway Facility are expected to be completed by the end of the third quarter of 2025[248](index=248&type=chunk) - Potential aggregate redemption payment of at least **$270.4 million** for Series A Preferred Shares after February 26, 2028, could significantly impact future liquidity[251](index=251&type=chunk) Capital Expenditures (Thousands, Six Months Ended June 30) | Type | 2025 | 2024 | | :------------------------ | :------- | :------- | | Growth | $58,765 | $102,742 | | Maintenance | $1,110 | $1,043 | | Customer beverage equipment | $846 | $538 | | Other | $1,105 | $782 | | **Total** | **$61,826** | **$105,105** | [Recent Accounting Pronouncements](index=79&type=section&id=Recent%20Accounting%20Pronouncements) This section refers to Note 3 for a detailed discussion of recent accounting pronouncements - Refer to Note 3, 'Summary of Significant Accounting Policies,' for a detailed discussion of recent accounting pronouncements[260](index=260&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=79&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) This section states no material changes in market risks since the last Annual Report on Form 10-K - There have been no material changes in the market risks discussed in the Annual Report on Form 10-K filed on March 12, 2025[261](index=261&type=chunk) [Item 4. Controls and Procedures](index=79&type=section&id=Item%204.%20Controls%20and%20Procedures) This section confirms effective disclosure controls and no material changes in internal control - Management concluded that the company's disclosure controls and procedures were effective as of June 30, 2025[263](index=263&type=chunk) - There were no material changes in internal control over financial reporting during the quarter ended June 30, 2025[264](index=264&type=chunk) [Part II. Other Information](index=80&type=section&id=Part%20II.%20Other%20Information) This section provides additional information not covered in the financial statements, including legal and risk factors [Item 1. Legal Proceedings](index=80&type=section&id=Item%201.%20Legal%20Proceedings) This section refers to Note 19 for a description of legal proceedings - A description of legal proceedings can be found in Note 19 'Commitments and Contingencies' to the Condensed Consolidated Financial Statements[265](index=265&type=chunk) [Item 1A. Risk Factors](index=80&type=section&id=Item%201A.%20Risk%20Factors) This section states no material changes to risk factors since the last Annual Report on Form 10-K - There have been no material changes to the risk factors discussed in the Annual Report on Form 10-K filed on March 12, 2025[266](index=266&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=80&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) This section reports no unregistered sales of equity securities or use of proceeds - None[267](index=267&type=chunk) [Item 3. Defaults Upon Senior Securities](index=80&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) This section reports no defaults upon senior securities during the period - None[268](index=268&type=chunk) [Item 4. Mine Safety Disclosures](index=80&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This section states that mine safety disclosures are not applicable to the company - Not applicable[269](index=269&type=chunk) [Item 5. Other Information](index=80&type=section&id=Item%205.%20Other%20Information) This section reports no other material information, including no Rule 10b5-1 trading arrangements - No Rule 10b5-1 trading arrangements were adopted or terminated by the Company's directors or officers during the three months ended June 30, 2025[270](index=270&type=chunk) [Item 6. Exhibits](index=81&type=section&id=Item%206.%20Exhibits) This section provides an index of exhibits, including certifications and XBRL documents - The exhibits include certifications from the Chief Executive Officer and Chief Financial Officer, as well as XBRL instance, schema, calculation, definition, label, and presentation documents[272](index=272&type=chunk)

[Report Overview & Key Highlights](index=1&type=section&id=report-overview-key-highlights) Westrock Coffee's Q2 2025 saw strong segment growth and reaffirmed financial guidance, driven by new facility operations [Second Quarter 2025 Performance Highlights](index=1&type=section&id=second-quarter-2025-performance-highlights) Q2 2025 performance highlights strong segment growth and net sales, offset by flat gross profit and a wider net loss [Consolidated Results](index=1&type=section&id=consolidated-results) Q2 2025 consolidated results show substantial net sales growth, flat gross profit, wider net loss, and improved Adjusted EBITDA **Consolidated Financial Performance (Millions)** | Metric | Q2 2025 (Millions) | Q2 2024 (Millions) | Change (%) | | :-------------------------- | :----------------- | :----------------- | :--------- | | Net sales | $280.9 | $208.4 | +34.8% | | Gross profit | $41.4 | $41.4 | 0.0% | | Net loss | $(21.6) | $(17.8) | -21.3% | | Consolidated Adjusted EBITDA | $15.3 | $12.4 | +23.4% | | Scale-up costs (Conway Facility) | $7.6 | $1.2 | +533.3% | [Segment Results](index=1&type=section&id=segment-results) Both Beverage Solutions and SS&T segments achieved significant Q2 2025 growth in net sales and Adjusted EBITDA **Segment Performance Overview (Millions)** | Segment | Metric | Q2 2025 (Millions) | Q2 2024 (Millions) | Change (%) | | :----------------------------------- | :-------------------- | :----------------- | :----------------- | :--------- | | **Beverage Solutions** | Net sales | $208.8 | $163.3 | +27.9% | | | Segment Adjusted EBITDA | $19.7 | $13.2 | +48.5% | | **Sustainable Sourcing & Traceability** | Net sales | $72.0 | $45.1 | +59.6% | | | Segment Adjusted EBITDA | $3.3 | $0.4 | +725.0% | [CEO Commentary](index=1&type=section&id=ceo-commentary) CEO highlights record quarterly segment performance, driven by successful new facility launches and production ramp-ups - CEO Scott T. Ford reported **record quarterly segment performance**, driven by the successful launch of the new single-serve cup plant and production ramp-up at the extract and ready-to-drink (RTD) facility in Conway, Arkansas[3](index=3&type=chunk) - The company's progress aligns with its goal of becoming the premiere integrated, strategic supplier to global coffee, tea, and energy beverage brands[3](index=3&type=chunk) [2025 and 2026 Outlook Reaffirmation](index=1&type=section&id=2025-and-2026-outlook-reaffirmation) Company reaffirms 2025 and 2026 financial guidance, including Adjusted EBITDA and secured net leverage ratio targets - Westrock Coffee is reaffirming its 2025 and 2026 guidance for Consolidated Adjusted EBITDA, Segment Adjusted EBITDA, and Beverage Solutions credit agreement secured net leverage ratio[4](index=4&type=chunk) [Company Information](index=2&type=section&id=company-information) This section outlines Westrock Coffee's business, Q2 2025 earnings call details, and contact information [About Westrock Coffee](index=2&type=section&id=about-westrock-coffee) Westrock Coffee is a leading integrated U.S. coffee, tea, and beverage solutions provider, operating globally - Westrock Coffee is a leading integrated coffee, tea, flavors, extracts, and ingredients solutions provider in the United States[9](index=9&type=chunk) - The company provides coffee sourcing, supply chain management, product development, roasting, packaging, and distribution services to various industries globally, including retail, food service, convenience stores, and hospitality[9](index=9&type=chunk) - Westrock Coffee has offices in 10 countries and sources coffee and tea from numerous countries of origin[9](index=9&type=chunk) [Conference Call Details](index=2&type=section&id=conference-call-details) Q2 2025 earnings conference call and webcast details, including registration and access, are provided - Westrock Coffee will host a conference call and webcast on August 7, 2025, at 4:30 p.m. ET to discuss the Q2 2025 results[8](index=8&type=chunk) - Participants need to register for the live earnings call, and the live audio webcast will be accessible on the Company's Investor Relations website[8](index=8&type=chunk) [Contacts](index=3&type=section&id=contacts) Contact information for media and investor relations inquiries is listed - Media contact: PR@westrockcoffee.com[12](index=12&type=chunk) - Investor contact: IR@westrockcoffee.com[12](index=12&type=chunk) [Condensed Consolidated Financial Statements](index=4&type=section&id=condensed-consolidated-financial-statements) This section presents Westrock Coffee's condensed consolidated balance sheets, statements of operations, and cash flows [Condensed Consolidated Balance Sheets](index=4&type=section&id=condensed-consolidated-balance-sheets) As of June 30, 2025, total assets increased, liabilities rose significantly, and shareholders' equity decreased **Condensed Consolidated Balance Sheets (Thousands)** | Metric | June 30, 2025 | December 31, 2024 | Change | | :----------------------------------- | :-------------- | :---------------- | :----- | | Total Assets | $1,157,477 | $1,101,780 | +$55,697 | | Total Liabilities | $865,552 | $730,448 | +$135,104 | | Total Shareholders' Equity | $18,247 | $97,482 | -$79,235 | | Cash and cash equivalents | $43,956 | $26,151 | +$17,805 | | Inventories | $194,244 | $163,323 | +$30,921 | | Property, plant and equipment, net | $480,653 | $467,011 | +$13,642 | | Long-term debt, net | $377,580 | $325,880 | +$51,700 | | Accumulated deficit | $(491,703) | $(442,922) | -$48,781 | | Accumulated other comprehensive income (loss) | $(17,558) | $19,584 | -$37,142 | [Condensed Consolidated Statements of Operations](index=5&type=section&id=condensed-consolidated-statements-of-operations) Q2 2025 saw substantial net sales growth, flat gross profit, and a wider net loss from increased interest expense **Condensed Consolidated Statements of Operations (Thousands, Three Months Ended June 30)** | Metric | 2025 | 2024 | Change (%) | | :----------------------------------- | :------- | :------- | :--------- | | Net sales | $280,859 | $208,389 | +34.8% | | Costs of sales | $239,464 | $166,986 | +43.4% | | Gross profit | $41,395 | $41,403 | -0.02% | | Selling, general and administrative expense | $53,931 | $51,610 | +4.5% | | Loss from operations | $(15,013) | $(16,408) | +8.5% | | Interest expense | $13,119 | $7,453 | +76.0% | | Net loss | $(21,563) | $(17,759) | -21.4% | | Basic Loss per common share | $(0.23) | $(0.20) | -15.0% | **Condensed Consolidated Statements of Operations (Thousands, Six Months Ended June 30)** | Metric | 2025 | 2024 | Change (%) | | :----------------------------------- | :------- | :------- | :--------- | | Net sales | $494,655 | $400,889 | +23.4% | | Costs of sales | $424,187 | $322,212 | +31.6% | | Gross profit | $70,468 | $78,677 | -10.4% | | Selling, general and administrative expense | $94,275 | $96,050 | -1.8% | | Loss from operations | $(28,082) | $(26,540) | -5.8% | | Interest expense | $25,718 | $15,032 | +71.1% | | Net loss | $(48,781) | $(41,432) | -17.7% | | Basic Loss per common share | $(0.51) | $(0.47) | -8.5% | [Condensed Consolidated Statements of Cash Flows](index=6&type=section&id=condensed-consolidated-statements-of-cash-flows) H1 2025 cash flows show increased operating cash use, decreased investing cash use, and stable financing **Condensed Consolidated Statements of Cash Flows (Thousands, Six Months Ended June 30)** | Metric | 2025 | 2024 | Change | | :----------------------------------- | :------- | :------- | :------- | | Net cash used in operating activities | $(29,073) | $(15,691) | -85.3% | | Net cash used in investing activities | $(64,002) | $(104,760) | +38.9% | | Net cash provided by financing activities | $109,887 | $108,409 | +1.4% | | Net increase (decrease) in cash and cash equivalents and restricted cash | $16,760 | $(11,813) | N/A | | Cash and cash equivalents and restricted cash at end of period | $52,324 | $26,027 | +101.0% | [Segment Performance](index=7&type=section&id=segment-performance) This section summarizes the financial performance of Beverage Solutions and Sustainable Sourcing & Traceability segments [Summary of Segment Results](index=7&type=section&id=summary-of-segment-results) Both Beverage Solutions and SS&T segments showed robust growth in net sales and Adjusted EBITDA for Q2 and H1 2025 **Summary of Segment Results (Thousands, Three Months Ended June 30)** | Segment | Metric | 2025 | 2024 | Change (%) | | :----------------------------------- | :-------------------- | :------- | :------- | :--------- | | **Beverage Solutions** | Net sales | $208,814 | $163,253 | +27.9% | | | Segment Adjusted EBITDA | $19,670 | $13,245 | +48.5% | | **Sustainable Sourcing & Traceability** | Net sales | $72,045 | $45,136 | +59.6% | | | Segment Adjusted EBITDA | $3,315 | $419 | +691.2% | **Summary of Segment Results (Thousands, Six Months Ended June 30)** | Segment | Metric | 2025 | 2024 | Change (%) | | :----------------------------------- | :-------------------- | :------- | :------- | :--------- | | **Beverage Solutions** | Net sales | $372,893 | $321,312 | +16.0% | | | Segment Adjusted EBITDA | $29,253 | $24,045 | +21.7% | | **Sustainable Sourcing & Traceability** | Net sales | $121,762 | $79,577 | +53.0% | | | Segment Adjusted EBITDA | $5,243 | $761 | +589.0% | [Non-GAAP Financial Measures & Leverage Ratio](index=8&type=section&id=non-gaap-financial-measures-leverage-ratio) This section details the Beverage Solutions secured net leverage ratio and reconciles net income to Consolidated Adjusted EBITDA [Calculation of Beverage Solutions Credit Agreement Secured Net Leverage Ratio](index=8&type=section&id=calculation-of-beverage-solutions-credit-agreement-secured-net-leverage-ratio) Beverage Solutions secured net leverage ratio was 4.75x as of June 30, 2025, demonstrating credit agreement compliance **Beverage Solutions Credit Agreement Secured Net Leverage Ratio (Thousands, Trailing Twelve-Months)** | Metric | Amount | | :----------------------------------- | :------- | | Beverage Solutions Segment Adjusted EBITDA | $58,847 | | Permissible credit agreement adjustments | $11,137 | | Trailing Twelve-Months Credit Agreement Adjusted EBITDA | $69,984 | | Secured net debt | $332,166 | | Beverage Solutions Credit Agreement secured net leverage ratio | 4.75x | - The Company is required to maintain compliance with a secured net leverage ratio under its credit agreement, applicable only to the Beverage Solutions segment[23](index=23&type=chunk) - As of the date of the press release, the Company is in compliance with its financial covenants[24](index=24&type=chunk) [Reconciliation of Net (Loss) Income to Non-GAAP Consolidated Adjusted EBITDA](index=9&type=section&id=reconciliation-of-net-loss-income-to-non-gaap-consolidated-adjusted-ebitda) Q2 2025 Consolidated Adjusted EBITDA increased despite higher net loss, driven by non-cash adjustments and Conway costs **Reconciliation of Net (Loss) Income to Non-GAAP Consolidated Adjusted EBITDA (Thousands, Three Months Ended June 30)** | Metric | 2025 | 2024 | Change (%) | | :----------------------------------- | :------- | :------- | :--------- | | Net loss | $(21,563) | $(17,759) | -21.4% | | EBITDA | $6,202 | $(6,983) | N/A | | Conway extract and ready-to-drink facility pre production costs | $9,072 | $12,382 | -26.8% | | Consolidated Adjusted EBITDA | $15,338 | $12,434 | +23.4% | **Reconciliation of Net (Loss) Income to Non-GAAP Consolidated Adjusted EBITDA (Thousands, Six Months Ended June 30)** | Metric | 2025 | 2024 | Change (%) | | :----------------------------------- | :------- | :------- | :--------- | | Net loss | $(48,781) | $(41,432) | -17.7% | | EBITDA | $5,166 | $(9,714) | N/A | | Conway extract and ready-to-drink facility pre production costs | $13,520 | $22,178 | -39.1% | | Consolidated Adjusted EBITDA | $23,561 | $23,576 | -0.1% | [Non-GAAP Financial Measures Definition](index=10&type=section&id=non-gaap-financial-measures-definition) This section defines non-GAAP measures like EBITDA and Consolidated Adjusted EBITDA, outlining their calculation and limitations - EBITDA and Consolidated Adjusted EBITDA are non-GAAP supplemental measures used to evaluate the Company's operating performance, profitability, and business trends[26](index=26&type=chunk) - EBITDA is defined as net (loss) income before interest expense, provision for income taxes, and depreciation and amortization[27](index=27&type=chunk) - Consolidated Adjusted EBITDA further adjusts EBITDA for equity-based compensation, transaction/restructuring costs, impairment charges, fair value changes of warrant liabilities, non-cash mark-to-market adjustments, Conway facility pre-production costs, and other similar items[27](index=27&type=chunk) - These non-GAAP measures should be viewed in addition to, and not as alternatives for, net income (loss) determined in accordance with GAAP, and may not be comparable to measures reported by other companies[28](index=28&type=chunk) [Outlook and Performance Comparison](index=11&type=section&id=outlook-and-performance-comparison) This section compares Westrock Coffee's H1 2025 actual performance against its previously issued outlook [2025 Outlook Versus Actual Results](index=11&type=section&id=2025-outlook-versus-actual-results) H1 2025 actual performance met or exceeded outlook for Adjusted EBITDA and secured net leverage ratio - The Company's performance for the first half of 2025 met or exceeded its outlook provided in the March 11, 2025 earnings release[30](index=30&type=chunk) **1H 2025 Outlook Versus Actual Results (Millions)** | Metric | 1H 2025 Actual | 1H 2025 Outlook (Low) | 1H 2025 Outlook (High) | Performance vs. Outlook | | :----------------------------------- | :------------- | :-------------------- | :--------------------- | :---------------------- | | Consolidated Adjusted EBITDA | $23.6 | $17.5 | $24.0 | Met/Exceeded | | Beverage Solutions Segment Adjusted EBITDA | $29.3 | $25.0 | $30.0 | Met/Exceeded | | SS&T Segment Adjusted EBITDA | $5.2 | $2.5 | $4.0 | Exceeded | | Beverage Solutions Credit Agreement secured net leverage ratio (June 30, 2025) | 4.75x | N/A | 5.70x | Better (Lower) | [Legal & Disclosures](index=2&type=section&id=legal-disclosures) This section provides standard disclosures on forward-looking statements, detailing inherent risks and update policy [Forward-Looking Statements](index=2&type=section&id=forward-looking-statements) This disclosure outlines forward-looking statements, highlighting inherent risks and potential material differences in actual results - The press release contains forward-looking statements regarding the 2025 and 2026 financial outlook, leverage ratios, volume growth, expense savings, and the timing and benefits of the Conway, Arkansas facility build-out and scale-up[10](index=10&type=chunk) - These statements are based on current assumptions and expectations and are subject to various risks and uncertainties, including changes in business, market, financial, political, and legal conditions, supply chain disruptions, and operational challenges[10](index=10&type=chunk)[11](index=11&type=chunk) - Actual events and circumstances may differ materially from those implied by forward-looking statements, and the Company specifically disclaims any obligation to update these statements after the date of communication[11](index=11&type=chunk)

Core Insights - Westrock Coffee Company reported record quarterly segment performance, driven by the successful launch of a new single-serve cup plant and increased production at its extract and ready-to-drink facility in Conway, Arkansas [3][4] - The company reaffirmed its financial guidance for 2025 and 2026, indicating confidence in its operational strategy and market position [4] Financial Performance - Net sales for the second quarter reached $280.9 million, a 34.8% increase compared to the prior year [8] - Gross profit remained flat at $41.4 million, while the net loss widened to $21.6 million from $17.8 million in the previous year [8] - Consolidated Adjusted EBITDA was $15.3 million, which included $7.6 million in scale-up costs related to the Conway facility, compared to $12.4 million in the prior year [8][26] Segment Results - Beverage Solutions segment net sales increased by 27.9% to $208.8 million, with Segment Adjusted EBITDA rising by 48.5% to $19.7 million [8][21] - Sustainable Sourcing & Traceability segment net sales surged by 59.6% to $72.0 million, with Segment Adjusted EBITDA improving to $3.3 million from $0.4 million in the second quarter of 2024 [8][21] Cash Flow and Balance Sheet - Cash and cash equivalents increased to $43.96 million as of June 30, 2025, up from $26.15 million at the end of 2024 [12][19] - Total assets rose to $1.16 billion, compared to $1.10 billion at the end of 2024, reflecting growth in inventory and accounts receivable [12][19] Outlook - The company is focused on becoming a premier integrated supplier to leading coffee, tea, and energy beverage brands globally, with ongoing investments in production capabilities [3][4] - Westrock Coffee's secured net leverage ratio was reported at 4.75x, indicating the company's financial leverage in relation to its EBITDA [22][23]

Core Insights - Westrock Coffee Company has opened a new manufacturing facility in Conway, Arkansas, aimed at producing millions of single-serve coffee cups daily to meet rising global demand [1][2][4] - The new facility is part of Westrock's strategy to expand its U.S. operations and enhance its production capabilities in the coffee and beverage sector [5][6] Company Expansion - The new 'Clark' facility spans 525,000 square feet, with 130,000 square feet dedicated to manufacturing single-serve coffee products [3] - This facility is Westrock's second new production site in the past year, reinforcing Arkansas's position as a leading hub for coffee and beverage manufacturing in the U.S. [1][5] Market Demand - The coffee pods market is projected to grow from $35.3 billion in 2024 to $71.2 billion by 2034, driven by consumer preferences for fast and high-quality coffee [4] - The facility is equipped with state-of-the-art technology to support the evolving single-serve coffee category and meet increasing customer needs [5] Job Creation and Economic Impact - The expansion is expected to create skilled manufacturing, quality assurance, and logistics jobs, with both facilities projected to employ 900 people at full capacity [6] - The investment in central Arkansas is anticipated to strengthen the local economy through job creation and enhanced production capabilities [6]

Company Announcement - Westrock Coffee Company will report its second quarter 2025 results on August 7, 2025, after market close [1] - A live earnings conference call will follow the announcement at 4:30 p.m. ET [1] Participation Information - Interested participants can register for the live earnings call, with dial-in information provided directly [2] - The live audio webcast will be available in the "Events and Presentations" section of the Company's Investor Relations website [2] - An archived replay of the webcast will be accessible shortly after the live event concludes [2] Company Overview - Westrock Coffee is a leading integrated provider of coffee, tea, flavors, extracts, and ingredients solutions in the U.S. [3] - The Company offers services including coffee sourcing, supply chain management, product development, roasting, packaging, and distribution [3] - Westrock Coffee operates in 10 countries and sources coffee and tea from 35 origin countries [3]

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