Westrock fee pany(US:WEST)2025-03-12 20:05Financial 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].