Core Viewpoint - A class action lawsuit has been filed against West Pharmaceutical Services, Inc. for allegedly making false statements and failing to disclose significant issues affecting its financial performance during the Class Period from February 16, 2023, to February 12, 2025 [1][3]. Group 1: Allegations of Misleading Statements - The lawsuit claims that West Pharmaceutical misrepresented its visibility into customer demand and attributed challenges to temporary COVID-related product destocking, while it was actually facing ongoing destocking in its High-Value Products portfolio [3]. - It is alleged that the SmartDose device, which was marketed as a high-margin growth product, negatively impacted profit margins due to operational inefficiencies [3]. - The lawsuit also points out that these margin pressures could lead to costly restructuring activities, including the company's exit from continuous glucose monitoring contracts with long-standing customers [3]. Group 2: Financial Forecast and Market Reaction - On February 13, 2025, West Pharmaceutical issued a revenue forecast for 2025 between $2.88 billion and $2.91 billion, which was significantly below market expectations [4]. - The disappointing guidance was attributed to challenges in Contract Manufacturing, including the loss of two major continuous glucose monitoring customers transitioning to in-house manufacturing [4]. - Following the announcement, West Pharmaceutical's stock price fell by more than 38% [4].

Core Viewpoint - Westrock Coffee Company reported a quarterly loss of $0.22 per share, which was worse than the Zacks Consensus Estimate of a loss of $0.17, marking a 29.41% earnings surprise [1] Group 1: Financial Performance - The company posted revenues of $213.8 million for the quarter ended March 2025, exceeding the Zacks Consensus Estimate by 4.53%, compared to $192.5 million in the same quarter last year [2] - Over the last four quarters, Westrock Coffee has surpassed consensus EPS estimates only once [2] - The current consensus EPS estimate for the upcoming quarter is -$0.15 on revenues of $237.27 million, and for the current fiscal year, it is -$0.37 on revenues of $1.02 billion [7] Group 2: Stock Performance and Outlook - Westrock Coffee shares have declined approximately 5% since the beginning of the year, while the S&P 500 has decreased by 4.3% [3] - The company's earnings outlook and management commentary will be crucial for future stock movements [4] - The estimate revisions trend for Westrock Coffee is mixed, resulting in a Zacks Rank 3 (Hold), indicating expected performance in line with the market [6] Group 3: Industry Context - The Beverages - Soft drinks industry, to which Westrock Coffee belongs, is currently in the top 20% of over 250 Zacks industries, suggesting a favorable industry outlook [8]

Financial Data and Key Metrics Changes - In Q1 2025, consolidated net sales increased by 11.1% compared to Q1 2024, with a net loss of $27.2 million and consolidated adjusted EBITDA of $8.2 million, impacted by $3.3 million in Conway scale-up operating costs [12][13] - Adjusted EBITDA for the Beverage Solutions segment was $9.6 million, down from $10.8 million in Q1 2024, despite a 3.8% increase in net sales [13] - The Sustainable Sourcing and Traceability segment saw a 44% increase in sales, resulting in adjusted EBITDA of $1.9 million compared to $0.3 million in Q1 2024 [14] Business Line Data and Key Metrics Changes - The Beverage Solutions segment experienced a 3.8% increase in net sales, driven by a 7.6% increase in roasting ground coffee volumes and higher coffee commodity prices [13] - The Sustainable Sourcing and Traceability segment's sales growth was attributed to strong volume growth and margin capture, alongside higher coffee prices [14] Market Data and Key Metrics Changes - The company is contending with historically high green coffee prices and anticipates the impact of recently announced tariffs on coffee costs [16] - Despite political and macroeconomic headwinds affecting consumer spending, the company managed to grow roast and ground coffee volumes year over year [12] Company Strategy and Development Direction - The company aims to become the premier integrated strategic supplier to leading coffee, tea, and energy beverage brands globally, with a focus on innovation and sustainable sourcing [5][9] - The launch of new manufacturing facilities in Conway, Arkansas, is a significant driver of performance, with plans for further expansions to meet increasing demand [6][10] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving guidance for both the first half and full year of 2025, despite challenges in the operating environment [5][17] - The company is closely monitoring consumer confidence and spending, managing expenses proactively to mitigate potential impacts [16][17] Other Important Information - Capital expenditures in Q1 2025 totaled approximately $41 million, with over $30 million related to the Conway Extract and RTD facility [15] - The company has approximately $86 million in unrestricted cash and undrawn revolving credit commitments [15] Q&A Session Summary Question: Can you remind us about the full-scale production start at Conway? - The first large can line started this month, ramping up in May and June, with a second can line and a glass line expected to come online in the third quarter [22][23] Question: How are volumes ramping up in the single-serve side? - The company is winning in the market with several private label and branded product wins, leading to increased single-serve volumes [27][30] Question: What visibility do you have into orders supporting EBITDA growth in the back half of the year? - Management is confident in meeting customer volume commitments and demand is strong, with customers lining up for production slots [34] Question: Where do you stand on coffee demand and pricing? - The company is experiencing a share shift, with underlying unit demand improving despite high coffee prices and tariffs [53][56] Question: Can you expand on recent wins that are helping offset volume headwinds? - Recent wins include new customers in retail and traditional coffee categories, contributing to increased volume [61][62] Question: What capacity do you have to continue taking share? - The company has built infrastructure to add machines without needing additional space, allowing for significant capacity to take on new business [66]

Financial Data and Key Metrics Changes - In Q1 2025, WestRock Coffee Company reported a net sales increase of 11.1% compared to Q1 2024, with consolidated adjusted EBITDA of $8,200,000, impacted by $3,300,000 in Conway scale-up operating costs [12][13] - The net loss for the quarter was $27,200,000, while adjusted EBITDA for the previous year was $11,100,000 without the scale-up costs [12][13] - The combination of Beverage Solutions and SS and T segment adjusted EBITDA was $11,500,000, up 3.3% year-over-year [5][6] Business Line Data and Key Metrics Changes - Beverage Solutions segment net sales increased by 3.8%, with adjusted EBITDA of $9,600,000 compared to $10,800,000 in Q1 2024 [13] - The Sustainable Sourcing Traceability segment saw a 44% increase in sales, resulting in adjusted EBITDA of $1,900,000 compared to $300,000 in Q1 2024 [13] Market Data and Key Metrics Changes - The company faced historically high green coffee prices and anticipated the impact of recently announced tariffs on coffee costs [15][16] - Despite macroeconomic headwinds, the company managed to grow roast and ground coffee volumes year-over-year [12] Company Strategy and Development Direction - The company aims to become the premier integrated strategic supplier for coffee, tea, and energy beverage brands globally, with significant investments in new manufacturing facilities [5][9] - The launch of new manufacturing facilities in Conway, Arkansas, is expected to drive growth and enhance production capacity [6][10] - The company is focused on becoming a lead innovation partner and low-cost processing resource for leading beverage brands [9][10] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving guidance for the first half and full year of 2025, despite the challenging consumer environment [5][17] - The company is closely monitoring consumer confidence and spending, managing expenses proactively to mitigate potential impacts [16][17] Other Important Information - Capital expenditures in Q1 2025 were approximately $41,000,000, with over $30,000,000 related to the Conway facility [14] - The company has approximately $86,000,000 in unrestricted cash and undrawn credit commitments [14] Q&A Session Summary Question: Inquiry about full-scale production at Conway - Management confirmed that the first large can line started production in May, with a second can line and a glass line expected to ramp up in Q3 [20][22] Question: Volume ramp-up expectations for single serve products - Management indicated strong market traction and several private label wins, with expectations for significant volume growth in the second half of the year [25][30] Question: Visibility into orders supporting EBITDA growth - Management expressed high confidence in meeting customer demand and maintaining volume commitments [33] Question: Capacity for additional wins and market demand - Management stated that they have built infrastructure to support additional capacity without needing significant new investments [62] Question: Variability in guidance outlook - Management acknowledged potential variability due to scaling the new facility and consumer behavior in response to economic conditions [68][70]

Financial Performance - Net sales for the three months ended March 31, 2025, were $213,796,000, an increase of 11.1% compared to $192,500,000 for the same period in 2024[10]. - The net loss for the three months ended March 31, 2025, was $27,218,000, compared to a net loss of $23,673,000 in the same period of 2024, indicating a 15.5% increase in losses[11]. - Comprehensive loss attributable to common shareholders for Q1 2025 was $27,853,000, compared to $23,370,000 in Q1 2024, indicating a 19.0% increase in comprehensive losses[11]. - For the three months ended March 31, 2025, the company reported a net loss attributable to common shareholders of $27,132,000, compared to a net loss of $23,586,000 for the same period in 2024, resulting in a basic and diluted loss per share of $0.29, up from $0.27[144][148]. Revenue and Sales - Total net sales for the Beverage Solutions segment were $164,079,000, while the Sustainable Sourcing & Traceability segment reported net sales of $49,717,000, leading to total net sales of $213,796,000 for Q1 2025, an increase from $192,500,000 in Q1 2024[148][149]. - Revenue from the Coffee & Tea segment was $120.7 million for the three months ended March 31, 2025, compared to $118.8 million in 2024, reflecting a growth of 1.5%[62]. - The company reported $49.6 million in revenues from commodity contracts under ASC 815 for the three months ended March 31, 2025, up from $35.0 million in 2024, marking an increase of approximately 41.3%[55]. Expenses and Losses - Gross profit decreased to $29,073,000 in Q1 2025 from $37,274,000 in Q1 2024, representing a decline of 22.0%[10]. - The company reported a loss from operations of $13,069,000 for Q1 2025, compared to a loss of $10,132,000 in Q1 2024, reflecting a worsening operational performance[10]. - Interest expense rose to $12,599,000 in Q1 2025 from $7,579,000 in Q1 2024, an increase of 66.5%[10]. - Employee-related costs for the Beverage Solutions segment were $11,806,000 in Q1 2025, slightly down from $11,923,000 in Q1 2024, indicating a focus on managing operational expenses[150][152]. Cash and Liquidity - Cash and cash equivalents at the end of the period increased to $44,888,000 as of March 31, 2025, compared to $13,776,000 at the end of March 31, 2024[14]. - The company incurred net cash outflows from operating activities of $22.1 million during the three months ended March 31, 2025[21]. - The company had $147.5 million of outstanding borrowings under the Revolving Credit Facility at March 31, 2025, with a weighted average interest rate of 8.3%[78]. Assets and Liabilities - Total assets as of March 31, 2025, were reported at $1,138,704,000, an increase from $983,256,000 at the end of Q1 2024[148][149]. - Total inventories increased to $187.4 million as of March 31, 2025, from $163.3 million as of December 31, 2024, representing a growth of about 14.8%[63]. - The company’s property, plant, and equipment, net amounted to $476.3 million as of March 31, 2025, compared to $467.0 million as of December 31, 2024, indicating an increase of approximately 2.7%[64]. Debt and Financing - As of March 31, 2025, the total debt of the company was $483.431 million, an increase from $447.727 million as of December 31, 2024, representing an increase of approximately 8.5%[75]. - The company entered into an Incremental Assumption Agreement that increased available borrowings under its Credit Agreement by $25.0 million[22]. - The company incurred a total of $1.4 million in financing fees in connection with the Fourth Amendment to the Credit Agreement[84]. Derivatives and Hedging - The net realized gains on coffee derivatives for the three months ended March 31, 2025, were $10.2 million, compared to $0.1 million for the same period in 2024[121][126]. - The total derivative assets as of March 31, 2025, amounted to $26.573 million, an increase from $19.746 million as of December 31, 2024[124]. - The fair value of derivative assets designated as cash flow hedging instruments was $4.978 million as of March 31, 2025, compared to $4.043 million as of December 31, 2024[124]. Other Significant Events - The company entered into a joint venture with ETC Holdings SA on April 1, 2025, to combine Rwandan export operations, allowing for improved profitability and operational scaling[160]. - The company recognized approximately $4.7 million of one-time employee severance costs during the year ended December 31, 2024[36]. - The company recognized $1.5 million of net unrealized losses on green coffee inventory for the three months ended March 31, 2025[28].

Financial Performance - Net sales for Q1 2025 were $213.8 million, an increase of 11.1% compared to the prior year[7] - Gross profit decreased to $29.1 million, down 22.0% from the previous year[7] - Net loss for Q1 2025 was $27.2 million, compared to a net loss of $23.7 million in the prior year[7] - Consolidated Adjusted EBITDA was $8.2 million, including $3.3 million of scale-up costs related to the Conway Facility[7] - Beverage Solutions segment net sales increased by 3.8% to $164.1 million, while Segment Adjusted EBITDA decreased by 11.3% to $9.6 million[7] - Sustainable Sourcing & Traceability segment net sales surged by 44.4% to $49.7 million, with Segment Adjusted EBITDA rising to $1.9 million from $0.3 million in Q1 2024[7] - Consolidated Adjusted EBITDA for Q1 2025 was $8,224,000, down from $11,142,000 in Q1 2024, indicating a decline of 26.0%[25] Guidance and Future Outlook - The company reaffirmed its guidance for Consolidated Adjusted EBITDA and Segment Adjusted EBITDA for 2025 and 2026[4] Cash and Liquidity - Cash and cash equivalents increased to $33.1 million as of March 31, 2025, up from $26.2 million at the end of 2024[14] - Cash and cash equivalents at the end of the period increased to $44,888,000 in Q1 2025 from $13,776,000 in Q1 2024, showing a significant improvement in liquidity[doc id='18'] - Net cash used in operating activities for Q1 2025 was $(22,121,000), a decline from net cash provided of $7,979,000 in Q1 2024[doc id='18'] - Total cash flows from investing activities were $(40,785,000) in Q1 2025, compared to $(68,936,000) in Q1 2024, indicating a reduction in cash outflows[doc id='18'] - Payments on debt in Q1 2025 amounted to $34,064,000, a decrease from $100,462,000 in Q1 2024, reflecting a strategic reduction in debt servicing[doc id='18'] Assets and Liabilities - Total assets rose to $1.14 billion, compared to $1.10 billion at the end of 2024[14] - Total liabilities increased to $793.5 million from $730.4 million at the end of 2024[14] Accounts Receivable - The company reported a significant increase in accounts receivable, which rose to $14,553,000 in Q1 2025 from $8,397,000 in Q1 2024, indicating potential growth in sales[doc id='18']

Core Insights - Westrock Coffee Company reported solid financial results for the first quarter of 2025, with a focus on becoming a premier integrated strategic supplier in the coffee, tea, and energy sectors [3][4] - The company is confident in its growth trajectory and has reaffirmed its financial guidance for 2025 and 2026 [4] Financial Performance - Net sales increased to $213.8 million, reflecting an 11.1% growth compared to the prior year [8] - Gross profit decreased to $29.1 million, down 22.0% from the previous year [8] - The net loss for the quarter was $27.2 million, compared to a net loss of $23.7 million in the same period last year [8] - Consolidated Adjusted EBITDA was $8.2 million, which included $3.3 million in scale-up costs related to the Conway Facility, compared to $11.1 million in the prior year [8][28] Segment Results - Beverage Solutions segment net sales were $164.1 million, an increase of 3.8%, with Segment Adjusted EBITDA at $9.6 million, down 11.3% [8][24] - Sustainable Sourcing & Traceability segment net sales rose significantly to $49.7 million, a 44.4% increase, with Segment Adjusted EBITDA improving to $1.9 million from $0.3 million in the previous year [8][24] Cash Flow and Balance Sheet - Cash and cash equivalents at the end of the period were $33.1 million, up from $12.6 million a year ago [20] - Total assets increased to $1.14 billion from $1.10 billion at the end of 2024 [14][15] - Total liabilities rose to $793.5 million from $730.4 million at the end of 2024 [15] Outlook - The company is optimistic about its operational progress, particularly in scaling up production at its Conway facility and launching new products [3][4] - Westrock Coffee is committed to maintaining compliance with its financial covenants and has reaffirmed its guidance for future performance [4][26]

Core Insights - Westrock Coffee Company has released its 2024 Sustainability Report, highlighting its commitment to sustainability and corporate responsibility initiatives aimed at benefiting smallholder farmers and promoting environmental stewardship [2][4]. Group 1: Sustainability Initiatives - The report outlines Westrock Coffee's progress towards its sustainability goals over the past year, celebrating milestones in initiatives designed to empower millions of smallholder farmers in its global supply chain [2][4]. - The company aims to achieve 100% responsibly sourced coffee and tea by the end of 2025, with 89% of coffee and 100% of tea already responsibly sourced by the end of 2024 [8]. - Westrock Coffee's Raíz Sustainability™ program has paid over $8.5 million in farmer premiums to more than 6,800 participating farmers since its inception in 2015, demonstrating a significant impact on sustainable agriculture and fair labor practices [8]. Group 2: Future Goals and Vision - The company has set a vision for 2030, which includes increasing transparency and traceability, expanding economic programming in coffee-producing countries, and bolstering its sustainable supply chain [5]. - Westrock Coffee plans to open the world's largest roast-to-ready-to-drink (RTD) plant in North America in 2024, which will recycle over one billion gallons of water annually and use energy-efficient roasting technology [8]. - The company has audited strategic suppliers for compliance with its Responsible Sourcing Policy and expanded its Real Roots™ entry-level sustainability sourcing program [8]. Group 3: Company Overview - Westrock Coffee is a leading integrated provider of coffee, tea, flavors, extracts, and ingredients solutions in the U.S., serving various industries including retail, foodservice, and hospitality [3][7]. - Founded in 2009, the company emphasizes responsible business practices and supply chain transparency as core values [3].

Core Insights - Westrock Coffee Company will report its first quarter 2025 results on May 8, 2025, after market close, followed by a live earnings conference call at 4:30 p.m. ET [1] - The company is a leading integrated provider of coffee, tea, flavors, extracts, and ingredients solutions in the U.S., serving various industries globally [3] Company Overview - Westrock Coffee provides a range of services including coffee sourcing, supply chain management, product development, roasting, packaging, and distribution [3] - The company operates in 10 countries and sources coffee and tea from 35 origin countries [3]

Financial Performance - Net sales for 2024 were $850.726 million, a decrease of 1.1% from $864.714 million in 2023[342]. - Gross profit increased to $153.774 million in 2024, up 9.7% from $139.858 million in 2023[342]. - Total operating expenses rose to $202.898 million in 2024, compared to $160.287 million in 2023, reflecting a significant increase of 26.5%[342]. - The net loss for 2024 was $80.298 million, worsening from a net loss of $34.567 million in 2023[344]. - Basic and diluted loss per common share for 2024 was $(0.89), compared to $(0.43) in 2023[342]. - Comprehensive loss attributable to shareholders for 2024 was $(64.532) million, compared to $(24.661) million in 2023[344]. - Interest expense increased to $33.856 million in 2024, up from $29.157 million in 2023[342]. - The company incurred impairment charges of $5.686 million in 2024, which were not present in 2023[342]. - The company recognized $6.8 million of net unrealized gains on green coffee inventory for the year ended December 31, 2024[377]. - The company recognized $190.0 million in revenues from commodity contracts under ASC 815, compared to $141.0 million in 2023 and $181.7 million in 2022[464]. Assets and Liabilities - Total assets increased to $1,101,780,000 as of December 31, 2024, compared to $971,514,000 in 2023, reflecting a growth of approximately 13.4%[341]. - Current liabilities rose to $277,870,000 in 2024 from $239,635,000 in 2023, indicating an increase of about 15.9%[341]. - Long-term debt increased significantly to $325,880,000 in 2024, up from $223,092,000 in 2023, representing a growth of approximately 46.1%[341]. - Total debt rose significantly from $278.975 million at December 31, 2023, to $447.727 million at December 31, 2024[498]. - The company has a total of $393.068 million in long-term debt payments required over the next five years[498]. - As of December 31, 2024, total cash and cash equivalents were $26.2 million, down from $37.2 million in 2023[373]. - Cash and cash equivalents at the end of 2024 were $35,564 thousand, a decrease from $37,840 thousand at the end of 2023[349]. - The allowance for credit losses increased to $3.995 million in 2024 from $2.915 million in 2023, reflecting higher provisions[375]. Cash Flow and Investments - Total cash used in operating activities for 2024 was $13,243 thousand, an improvement from $64,064 thousand in 2023[349]. - Cash flows from investing activities resulted in a net cash outflow of $145,923 thousand in 2024, slightly lower than the $168,355 thousand outflow in 2023[349]. - The company capitalized approximately $11.7 million of interest costs in 2024, compared to $3.2 million in 2023[381]. - The company incurred $24.0 million in transaction expenses related to the merger, which included underwriting fees and professional services, and these costs were recognized in additional paid-in capital[446]. Equity and Shareholder Information - The weighted-average number of shares outstanding increased to 89.795 million in 2024 from 80.684 million in 2023[342]. - The company issued 11,877 thousand common shares in 2023, raising $117,767 thousand net of issuance costs[347]. - The company issued 34,855,535 Common Shares and 2,220,305 Common Shares to holders of Common Equivalent Preferred Units, resulting in a net loss of $2.9 million on extinguishment of the Common Equivalent Preferred Units[440]. - The company has 23,510,527 Series A Preferred Shares outstanding, which rank senior to Common Shares regarding dividend and distribution rights[520]. Acquisitions and Mergers - The Company completed a de-SPAC merger with Riverview Acquisition Corp. on August 26, 2022, converting from a Delaware limited liability company to a Delaware corporation[354]. - The Company acquired the remaining 15% equity interest in Falcon Coffees Limited for $3.2 million, including $2.0 million in cash and 100,000 Common Shares[361]. - The acquisition of Bixby Roasting Co. on February 28, 2023, involved total consideration of $2.6 million, including $2.2 million in cash and 39,778 common shares[474]. - Kohana Coffee was acquired for a total consideration of $39.117 million, which included $15.682 million in cash and $23.435 million in stock[478]. Operational Risks and Market Conditions - The company faces risks related to macroeconomic conditions, including potential disruptions in operations and changes in consumer spending[3]. - Interest rate volatility could impact the company's financing capabilities, with a potential annualized impact of approximately $0.9 million from a hypothetical 10% change in interest rates[332]. - The company is actively working to mitigate inflation impacts by passing costs onto customers, although pricing increases often lag behind cost increases[333]. Inventory and Cost Management - Inventories increased to $163,323,000 in 2024, up from $149,921,000 in 2023, reflecting an increase of about 8.9%[341]. - Shipping and handling costs included in selling, general and administrative expense were $14.7 million, $17.8 million, and $22.1 million for the years ended December 31, 2024, 2023, and 2022, respectively, showing a decline of 33.5% from 2022 to 2024[414]. - Advertising expenses for the years ended December 31, 2024, 2023, and 2022 were approximately $0.9 million, $1.9 million, and $3.6 million, respectively, indicating a decrease of 52.6% from 2022 to 2024[413]. Compliance and Regulatory Matters - The Company adopted ASU 2022-04 on January 1, 2023, which requires disclosure of supplier finance program obligations, effective for fiscal years beginning after December 15, 2022[427]. - The Company is currently evaluating the impact of ASU 2023-09, which improves income tax disclosures, effective for annual periods beginning after December 15, 2024[431]. - Falcon was in compliance with financial covenants requiring certain levels of working capital, debt, and tangible net worth as of December 31, 2024[518].