Westrock fee pany(WEST) - 2025 Q2 - Quarterly Results

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 Q2 2025 performance highlights strong segment growth and net sales, offset by flat gross profit and a wider net loss 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 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 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] - The company's progress aligns with its goal of becoming the premiere integrated, strategic supplier to global coffee, tea, and energy beverage brands[3] 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] Company Information This section outlines Westrock Coffee's business, Q2 2025 earnings call details, and contact information 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] - 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] - Westrock Coffee has offices in 10 countries and sources coffee and tea from numerous countries of origin[9] 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] - 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] Contacts Contact information for media and investor relations inquiries is listed - Media contact: PR@westrockcoffee.com[12] - Investor contact: IR@westrockcoffee.com[12] Condensed Consolidated Financial Statements This section presents Westrock Coffee's condensed consolidated balance sheets, statements of operations, and cash flows 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 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 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 This section summarizes the financial performance of Beverage Solutions and Sustainable Sourcing & Traceability segments 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 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 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] - As of the date of the press release, the Company is in compliance with its financial covenants[24] 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 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] - EBITDA is defined as net (loss) income before interest expense, provision for income taxes, and depreciation and amortization[27] - 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] - 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] Outlook and Performance Comparison This section compares Westrock Coffee's H1 2025 actual performance against its previously issued outlook 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] 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 This section provides standard disclosures on forward-looking statements, detailing inherent risks and update policy 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] - 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][11] - 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]