8-K
Westrock Coffee Co (WEST)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
Date of report (Date of earliest event reported): March 12, 2024
Westrock Coffee Company
(Exact Name of Registrant as Specified in Charter)
| Delaware | **** | 001-41485 | **** | 80-0977200 |
|---|---|---|---|---|
| (State or Other Jurisdiction of Incorporation) | | (Commission <br>File Number) | | (I.R.S. Employer <br>Identification No.) |
4009 N. Rodney Parham Road
3rd Floor
Little Rock , AR **** 72212
(Address of Principal Executive Offices, and Zip Code)
( 501 ) 918-9358
Registrant’s Telephone Number, Including Area Code
Not Applicable
(Former Name or Former Address, if Changed Since Last Report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (seeGeneral Instruction A.2. below):
| ☐ | Written communication pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
|---|---|
| ☐ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| --- | --- |
| ☐ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| --- | --- |
| ☐ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
| --- | --- |
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered |
|---|---|---|
| Shares of common stock, par value $0.01 per share | WEST | The Nasdaq Stock Market LLC |
| Warrants, each whole warrant exercisable for one share of common stock, par value $0.01 per share | WESTW | The Nasdaq Stock Market LLC |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (17 CFR §230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (17 CFR §240.12b-2 of this chapter).
Emerging growth company ☒
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Item 2.02.Results of Operations and Financial Condition.
On March 12, 2024, Westrock Coffee Company (the “Company”) issued a press release announcing its financial results for the fourth quarter and full year ended December 31, 2023. The fourth quarter and full year 2023 earnings press release is attached as Exhibit 99.1 to this Current Report on Form 8-K.
The information furnished pursuant to this Item 2.02, including exhibit 99.1, shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, nor shall it be incorporated by reference in any filing made by the Company pursuant to the Securities Act of 1933, as amended, other than to the extent that such filing incorporates by reference any or all of such information by express reference thereto.
Item 9.01.Financial Statements and Exhibits.
(d) Exhibits.
| | | |
|---|---|---|
| Exhibit No. | **** | Description of Exhibit |
| | | |
| 99.1 | | Westrock Coffee Company Press Release, dated March 12, 2024 |
| | | |
| 104 | | Cover Page Interactive Data File (embedded within the Inline XBRL document) |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| WESTROCK COFFEE COMPANY | |||
|---|---|---|---|
| By: | /s/ Robert P. McKinney | | |
| Name: | Robert P. McKinney | ||
| Title: | Chief Legal Officer and Corporate Secretary |
Dated: March 12, 2024
Westrock Coffee Company Reports Fourth Quarter and Full Year 2023 Results and Provides 2024 Outlook
Little Rock, Ark., March 12, 2024 (GLOBE NEWSWIRE) – Westrock Coffee Company (Nasdaq: WEST) (“Westrock Coffee” or the “Company”) today reported financial results for the fourth quarter and full year ended December 31, 2023 and provides its outlook on fiscal 2024.
Scott T. Ford, CEO and Co-founder stated, “We are pleased to announce our fourth quarter, and full year, 2023 financial results. Last year was a significant transition year for Westrock and we now enter 2024 with a number of critical system migrations and capital equipment upgrades behind us. The entire team worked tirelessly to modernize our legacy manufacturing operations while simultaneously building a new Extract and Ready-to-Drink plant in Conway, Arkansas which is scheduled to deliver its first commercial products to customers next month.”
Fourth Quarter Highlights
| ● | Consolidated net sales were $215.0 million for the fourth quarter of 2023, a decrease of $12.8 million, or 5.6%, compared to the fourth quarter of 2022. |
|---|---|
| ● | Consolidated gross profit for the fourth quarter of 2023 was $34.8 million and included $0.9 million of non-cash mark-to-market losses, compared to consolidated gross profit of $34.3 million for the fourth quarter of 2022, which included $2.7 million of non-cash mark-to-market losses. |
| --- | --- |
| ● | Net loss for the fourth quarter of 2023 was $20.1 million, compared to a net loss of $31.9 million for the fourth quarter of 2022. The $20.1 million net loss for the fourth quarter of 2023 included $1.9 million of transaction, restructuring and integration expense, $5.1 million of start-up costs related to our Conway, AR extract and ready-to-drink facility, and $8.6 million of non-cash expense from the change in fair value of warrant liabilities. The $31.9 million net loss for the fourth quarter of 2022 included $4.4 million of transaction, restructuring and integration expense and $24.5 million of non-cash expense from the change in fair value of warrant liabilities. |
| --- | --- |
| ● | Adjusted EBITDA was $13.7 million for the fourth quarter of 2023, a decrease of $3.7 million, compared to the fourth quarter of 2022. |
| --- | --- |
| ● | Beverage Solutions segment contributed $175.1 million of net sales and $11.7 million of Adjusted EBITDA for the fourth quarter of 2023, compared to $192.6 million and $15.2 million, respectively, for the fourth quarter of 2022. |
| --- | --- |
| ● | SS&T segment, net of intersegment revenues, contributed $39.8 million of net sales and $2.1 million of Adjusted EBITDA for the fourth quarter of 2023, compared to $35.1 million and $2.3 million, respectively, for the fourth quarter of 2022. |
| --- | --- |
Full Year 2023 Highlights
| ● | Consolidated net sales were $864.7 million for the year ended December 31, 2023, a decrease of $3.2 million, or 0.4% compared to the year ended December 31, 2022. |
|---|---|
| ● | Consolidated gross profit was $139.9 million for the year ended December 31, 2023, and included $0.1 million of non-cash mark-to-market gains, compared to $152.8 million for the year ended December 31, 2022, which included $3.5 million of non-cash mark-to-market losses. |
| --- | --- |
| ● | Net loss was $34.6 million for the year ended December 31, 2023, compared to a net loss of $55.5 million for the year ended December 31, 2022. The $34.6 million net loss for the year ended December 31, 2023 included $14.6 million of transaction, restructuring and integration expense and $11.7 million of start-up costs related to our Conway, AR extract and ready-to-drink facility, partially offset by a $10.2 million non-cash gain from the change in fair value of warrant liabilities. The $55.5 million net loss for the year ended December 31, 2022 included |
| --- | --- |
| $13.2 million of transaction, restructuring and integration expense, $29.7 million of non-cash expense from the change in fair value of warrant liabilities, and $5.9 million of interest expense related to the early extinguishment of debt. | |
| --- | |
| ● | Adjusted EBITDA was $45.1 million for the year ended December 31, 2023, a decrease of $15.0 million, or 25%, compared to the year ended December 31, 2022. |
| --- | --- |
| ● | Beverage Solutions segment contributed $722.9 million of net sales and $41.6 million of Adjusted EBITDA for the year ended December 31, 2023, compared to $685.3 million and $54.0 million, respectively, for the year ended December 31, 2022. |
| --- | --- |
| ● | Sustainable Sourcing & Traceability (“SS&T”) segment, net of intersegment revenues, contributed $141.8 million of net sales and $3.5 million of Adjusted EBITDA for the year ended December 31, 2023, compared to $182.6 million and $6.1 million, respectively, in the year ended December 31, 2022. |
| --- | --- |
| ● | At December 31, 2023, the Company had approximately $147.2 million of unrestricted cash and undrawn borrowings under its revolving credit facility, and the Company’s consolidated leverage ratio was 4.4x based on net debt to fourth quarter annualized Adjusted EBITDA. |
| --- | --- |
2024 Outlook
As previously disclosed on February 15, 2024, the Company expects consolidated Adjusted EBITDA to be between $60 million and $80 million in fiscal 2024. The guidance range is necessarily broad to account for the range of results the Company may experience as it commences operations at its Extract and RTD facility in Conway, Arkansas and the commercialization of customers at that facility. This guidance is an estimate of what the Company believes is realizable as of the date of this release, and actual results may vary from this guidance and the variations may be material. Management will provide additional details regarding the 2024 outlook on its earnings results call to be held today.
The Company is not readily able to provide a reconciliation of forecasted Adjusted EBITDA to forecasted GAAP net income without unreasonable effort because certain items that impact such figure are uncertain or outside the Company’s control and cannot be reasonably predicted. Such items include the impacts of non-cash gains or losses resulting from mark-to-market adjustments of derivatives and the change in fair value of warrant liabilities, among others.
Conference Call Details
Westrock Coffee will host a conference call and webcast at 4:30 p.m. ET today to discuss this release. To participate in the live earnings call and question and answer session, please register at https://register.vevent.com/register/BIa80ab8d7d9824bdcb8f729b24cb36937 and dial-in information will be provided directly to you. The live audio webcast will be accessible in the “Events and Presentations” section of the Company’s Investor Relations website at https://investors.westrockcoffee.com. An archived replay of the webcast will be available shortly after the live event has concluded and will be available for a minimum of 14 days.
About Westrock Coffee
Westrock Coffee is a leading integrated coffee, tea, flavors, extracts, and ingredients solutions provider in the United States, providing coffee sourcing, supply chain management, product development, roasting, packaging, and distribution services to the retail, food service and restaurant, convenience store and travel center, non-commercial account, CPG, and hospitality industries around the world. With offices in 10 countries, the company sources coffee and tea from 35 origin countries.
Forward-Looking Statements
Certain statements in this press release that are not historical facts are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, as amended from time to time. Forward-looking statements generally are accompanied by words such as "believe," "may," "will," "estimate," "continue," "anticipate," "intend," "expect," "should," "would," "plan," "predict," "potential," "seem," "seek," "future," "outlook," and similar expressions that predict or indicate future events or trends or that are not statements of historical matters, but the absence of these words does not
mean that a statement is not forward-looking. These forward-looking statements include, but are not limited to, our 2024 financial outlook, certain plans, expectations, goals, projections, and statements about the timing and benefits of the build-out, and our ability to sell or commit the capacity prior to commencement of commercial production, of the Company's Conway, Arkansas extract and ready-to-drink facility, the plans, objectives, expectations, and intentions of Westrock Coffee, and other statements that are not historical facts. These statements are based on information available to Westrock Coffee as of the date hereof and Westrock Coffee is not under any duty to update any of the forward-looking statements after the date of this communication to conform these statements to actual results. These statements are based on various assumptions, whether or not identified in this communication, and on the current expectations of the management of Westrock Coffee as of the date hereof and are not predictions of actual performance. These forward-looking statements are provided for illustrative purposes only and are not intended to serve as and should not be relied on by an investor, or others, as a guarantee, an assurance, a prediction, or a definitive statement of fact or probability. Actual events and circumstances are difficult or impossible to predict and will differ from assumptions. Many actual events and circumstances are beyond the control of Westrock Coffee. These forward-looking statements are subject to a number of risks and uncertainties, including, but not limited to, changes in domestic and foreign business, market, financial, political, and legal conditions; risks relating to the uncertainty of the projected financial information with respect to Westrock Coffee; risks related to the rollout of Westrock Coffee's business and the timing of expected business milestones; the effects of competition on Westrock Coffee's business; the ability of Westrock Coffee to issue equity or equity-linked securities or obtain debt financing in the future; the risk that Westrock Coffee fails to fully realize the potential benefits of acquisitions or joint ventures or has difficulty successfully integrating acquired companies; the availability of equipment and the timely performance by suppliers involved with the build-out of the Conway, Arkansas facility; the loss of significant customers or delays in bringing their products to market; and those factors discussed in Westrock Coffee’s Annual Report on Form 10-K, which was filed with the United States Securities and Exchange Commission (the “SEC”) on March 21, 2023, in Part I, Item 1A “Risk Factors” and other documents Westrock Coffee has filed, or will file, with the SEC. If any of these risks materialize or our assumptions prove incorrect, actual results could differ materially from the results implied by these forward-looking statements. There may be additional risks that Westrock Coffee does not presently know, or that Westrock Coffee currently believes are immaterial, that could also cause actual results to differ from those contained in the forward-looking statements. In addition, the forward-looking statements reflect Westrock Coffee's expectations, plans, or forecasts of future events and views as of the date of this communication. Westrock Coffee anticipates that subsequent events and developments will cause Westrock Coffee's assessments to change. However, while Westrock Coffee may elect to update these forward-looking statements at some point in the future, Westrock Coffee specifically disclaims any obligation to do so. These forward-looking statements should not be relied upon as a representation of Westrock Coffee's assessments as of any date subsequent to the date of this communication. Accordingly, undue reliance should not be placed upon the forward-looking statements.
Contacts
Media:
Westrock Coffee: PR@westrockcoffee.com
Investor Contact:
Westrock Coffee: IR@westrockcoffee.com
Westrock Coffee Company
Consolidated Balance Sheets
(Unaudited)
| | | | | | | |
|---|---|---|---|---|---|---|
| (Thousands, except par value) | December 31, 2023 | December 31, 2022 | ||||
| ASSETS | | | | | | |
| Cash and cash equivalents | | $ | 37,196 | | $ | 16,838 |
| Restricted cash | | | 644 | | | 9,567 |
| Accounts receivable, net of allowance for credit losses of $5,653 and $3,023, respectively | | | 99,158 | | | 101,639 |
| Inventories | | | 149,921 | | | 145,836 |
| Derivative assets | | | 13,658 | | | 15,053 |
| Prepaid expenses and other current assets | | | 12,473 | | | 9,166 |
| Total current assets | | | 313,050 | | | 298,099 |
| | | | | | | |
| Property, plant and equipment, net | | | 344,038 | | | 185,206 |
| Goodwill | | | 116,111 | | | 113,999 |
| Intangible assets, net | | | 122,945 | | | 130,886 |
| Operating lease right-of-use assets | | | 13,919 | | | 11,090 |
| Other long-term assets | | | 7,769 | | | 6,933 |
| Total Assets | | $ | 917,832 | | $ | 746,213 |
| | | | | | | |
| LIABILITIES, CONVERTIBLE PREFERRED SHARES AND SHAREHOLDERS' EQUITY | | | | | | |
| Current maturities of long-term debt | | $ | 9,811 | | $ | 11,504 |
| Short-term debt | | | 43,694 | | | 42,905 |
| Accounts payable | | | 69,106 | | | 116,675 |
| Supply chain finance program | | | 78,076 | | | — |
| Derivative liabilities | | | 3,731 | | | 7,592 |
| Accrued expenses and other current liabilities | | | 33,879 | | | 37,459 |
| Total current liabilities | | | 238,297 | | | 216,135 |
| | | | | | | |
| Long-term debt, net | | | 223,092 | | | 162,502 |
| Deferred income taxes | | | 10,847 | | | 14,355 |
| Warrant liabilities | | | 44,801 | | | 55,521 |
| Other long-term liabilities | | | 12,839 | | | 11,035 |
| Total liabilities | | | 529,876 | | | 459,548 |
| | | | | | | |
| Commitments and contingencies | | | | | | |
| | | | | | | |
| Series A Convertible Preferred Shares, $0.01 par value, 24,000 shares authorized, 23,512 shares and 23,588 shares issued and outstanding at December 31, 2023 and December 31, 2022, respectively, $11.50 liquidation value | | | 274,216 | | | 274,936 |
| | | | | | | |
| Shareholders' Equity | | | | | | |
| Preferred stock, $0.01 par value, 26,000 shares authorized, no shares issued and outstanding | | | — | | | — |
| Common stock, $0.01 par value, 300,000 shares authorized, 88,051 shares and 75,020 shares issued and outstanding at December 31, 2023 and December 31, 2022, respectively | | | 880 | | | 750 |
| Additional paid-in-capital | | | 471,666 | | | 342,664 |
| Accumulated deficit | | | (362,624) | | | (328,042) |
| Accumulated other comprehensive income (loss) | | | 3,818 | | | (6,103) |
| Total shareholders' equity attributable to Westrock Coffee Company | | | 113,740 | | | 9,269 |
| Non-controlling interest | | | — | | | 2,460 |
| Total shareholders' equity | | | 113,740 | | | 11,729 |
| | | | | | | |
| Total Liabilities, Convertible Preferred Shares and Shareholders' Equity | | $ | 917,832 | | $ | 746,213 |
Westrock Coffee Company
Consolidated Statements of Operations
(Unaudited)
| | | | | | | | | | | | | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| | | Three Months Ended December 31, | | Year Ended December 31, | ||||||||
| (Thousands, except per share data) | 2023 | 2022 | 2023 | 2022 | ||||||||
| Net sales | | $ | 214,966 | | $ | 227,723 | | $ | 864,714 | | $ | 867,872 |
| Costs of sales | | | 180,149 | | | 193,426 | | | 724,856 | | | 715,107 |
| Gross profit | | | 34,817 | | | 34,297 | | | 139,858 | | | 152,765 |
| | | | | | | | | | | | | |
| Selling, general and administrative expense | | | 39,302 | | | 28,653 | | | 144,577 | | | 129,985 |
| Transaction, restructuring and integration expense | | | 1,875 | | | 4,423 | | | 14,557 | | | 13,169 |
| Loss on disposal of property, plant and equipment | | | 8 | | | 187 | | | 1,153 | | | 935 |
| Total operating expenses | | | 41,185 | | | 33,263 | | | 160,287 | | | 144,089 |
| Income (loss) from operations | | | (6,368) | | | 1,034 | | | (20,429) | | | 8,676 |
| | | | | | | | | | | | | |
| Other (income) expense | | | | | | | | | | | | |
| Interest expense, net | | | 7,941 | | | 5,232 | | | 29,157 | | | 35,497 |
| Change in fair value of warrant liabilities | | | 8,626 | | | 24,460 | | | (10,207) | | | 29,675 |
| Other, net | | | 123 | | | (361) | | | 1,446 | | | (1,146) |
| Loss before income taxes and equity in earnings from unconsolidated entities | | | (23,058) | | | (28,297) | | | (40,825) | | | (55,350) |
| Income tax expense (benefit) | | | (3,027) | | | 3,622 | | | (6,358) | | | 111 |
| Equity in (earnings) loss from unconsolidated entities | | | 20 | | | — | | | 100 | | | — |
| Net loss | | $ | (20,051) | | $ | (31,919) | | $ | (34,567) | | $ | (55,461) |
| Net income (loss) attributable to non-controlling interest | | | — | | | (319) | | | 15 | | | (276) |
| Net loss attributable to shareholders | | | (20,051) | | | (31,600) | | | (34,582) | | | (55,185) |
| Accretion of Series A Convertible Preferred Shares | | | 88 | | | (1,316) | | | (161) | | | (1,316) |
| Loss on extinguishment of Redeemable Common Equivalent Preferred Units, net | | | — | | | — | | | — | | | (2,870) |
| Common equivalent preferred dividends | | | — | | | — | | | — | | | (4,380) |
| Accumulating preferred dividends | | | — | | | — | | | — | | | (13,882) |
| Net loss attributable to common shareholders | | $ | (19,963) | | $ | (32,916) | | $ | (34,743) | | $ | (77,633) |
| | | | | | | | | | | | | |
| Loss per common share: | | | | | | | | | | | | |
| Basic | | $ | (0.23) | | $ | (0.44) | | $ | (0.43) | | $ | (1.60) |
| Diluted | | $ | (0.23) | | $ | (0.44) | | $ | (0.43) | | $ | (1.60) |
| | | | | | | | | | | | | |
| Weighted-average number of shares outstanding: | | | | | | | | | | | | |
| Basic | | | 88,047 | | | 74,038 | | | 80,684 | | | 48,444 |
| Diluted | | | 88,047 | | | 74,038 | | | 80,684 | | | 48,444 |
Westrock Coffee Company
Consolidated Statements of Cash Flows
(Unaudited)
| | | | | | | |
|---|---|---|---|---|---|---|
| | | Year Ended December 31, | ||||
| (Thousands) | 2023 | 2022 | ||||
| Cash flows from operating activities: | | | | | | |
| Net loss | | $ | (34,567) | | $ | (55,461) |
| Adjustments to reconcile net loss to net cash provided by (used in) operating activities: | | | | | | |
| Depreciation and amortization | | | 26,584 | | | 24,210 |
| Equity-based compensation | | | 8,708 | | | 2,631 |
| Paid-in-kind interest added to debt principal | | | — | | | 295 |
| Provision for credit losses | | | 2,979 | | | 1,790 |
| Amortization of deferred financing fees included in interest expense, net | | | 3,517 | | | 1,726 |
| Write-off of unamortized deferred financing fees | | | — | | | 4,296 |
| Loss on debt extinguishment | | | — | | | 1,580 |
| Loss on disposal of property, plant and equipment | | | 1,153 | | | 935 |
| Mark-to-market adjustments | | | (104) | | | 3,502 |
| Change in fair value of warrant liabilities | | | (10,207) | | | 29,675 |
| Foreign currency transactions | | | 1,864 | | | 667 |
| Deferred income tax benefit | | | (6,512) | | | (2,037) |
| Other | | | 2,486 | | | 1,204 |
| Change in operating assets and liabilities: | | | | | | |
| Accounts receivable | | | (312) | | | (16,789) |
| Inventories | | | 915 | | | (46,770) |
| Derivative assets and liabilities | | | 6,440 | | | (22,937) |
| Prepaid expense and other assets | | | (1,890) | | | (15,476) |
| Accounts payable | | | (59,292) | | | 27,646 |
| Accrued liabilities and other | | | (5,826) | | | 2,685 |
| Net cash used in operating activities | | | (64,064) | | | (56,628) |
| Cash flows from investing activities: | | | | | | |
| Additions to property, plant and equipment | | | (164,611) | | | (63,261) |
| Additions to intangible assets | | | (173) | | | (167) |
| Acquisition of business, net of cash acquired | | | (2,392) | | | (14,885) |
| Acquisition of equity method investments and non-marketable securities | | | (1,385) | | | — |
| Proceeds from sale of property, plant and equipment | | | 206 | | | 4,144 |
| Net cash used in investing activities | | | (168,355) | | | (74,169) |
| Cash flows from financing activities: | | | | | | |
| Payments on debt | | | (199,196) | | | (438,571) |
| Proceeds from debt | | | 258,490 | | | 328,539 |
| Payments on supply chain financing program | | | (32,141) | | | — |
| Proceeds from supply chain financing program | | | 110,217 | | | — |
| Proceeds from related party debt | | | — | | | 11,700 |
| Debt extinguishment costs | | | — | | | (1,580) |
| Payment of debt issuance costs | | | (3,158) | | | (6,007) |
| Proceeds from de-SPAC merger and PIPE financing | | | — | | | 255,737 |
| Payment of common equity issuance costs | | | (1,000) | | | (23,998) |
| Proceeds from common equity issuance | | | 118,767 | | | — |
| Payment of preferred equity issuance costs | | | — | | | (1,250) |
| Net proceeds from (repayments of) repurchase agreements | | | (6,268) | | | 14,588 |
| Proceeds from exercise of stock options | | | 848 | | | 375 |
| Proceeds from exercise of Public Warrants | | | 2,632 | | | — |
| Common equivalent preferred dividends | | | — | | | (4,380) |
| Payment for purchase of non-controlling interest | | | (2,000) | | | — |
| Payment for taxes for net share settlement of equity awards | | | (2,977) | | | (477) |
| Net cash provided by financing activities | | | 244,214 | | | 134,676 |
| Effect of exchange rate changes on cash | | | (360) | | | (344) |
| Net increase in cash and cash equivalents and restricted cash | | | 11,435 | | | 3,535 |
| Cash and cash equivalents and restricted cash at beginning of period | | | 26,405 | | | 22,870 |
| Cash and cash equivalents and restricted cash at end of period | | $ | 37,840 | | $ | 26,405 |
Westrock Coffee Company
Reconciliation of Net Income (Loss) to Non-GAAP Adjusted EBITDA
(Unaudited)
| | | | | | | | | | | | | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| | | Three Months Ended | Year Ended | |||||||||
| | | December 31, | | December 31, | ||||||||
| (Thousands) | 2023 | 2022 | 2023 | 2022 | ||||||||
| Net loss | | $ | (20,051) | | $ | (31,919) | | $ | (34,567) | | $ | (55,461) |
| Interest expense, net | | 7,941 | | 5,232 | | 29,157 | | 35,497 | ||||
| Income tax expense (benefit) | | (3,027) | | 3,622 | | (6,358) | | 111 | ||||
| Depreciation and amortization | | 8,166 | | 6,428 | | 26,584 | | 24,210 | ||||
| EBITDA | | (6,971) | | (16,637) | | 14,816 | | 4,357 | ||||
| Transaction, restructuring and integration expense | | 1,875 | | 4,423 | | 14,557 | | 13,169 | ||||
| Change in fair value of warrant liabilities | | | 8,626 | | | 24,460 | | | (10,207) | | | 29,675 |
| Management and consulting fees (S&D Coffee, Inc. acquisition) | | — | | 833 | | 556 | | 3,868 | ||||
| Equity-based compensation | | 2,411 | | 1,447 | | 8,708 | | 2,631 | ||||
| Conway extract and ready-to-drink facility start-up costs | | | 5,083 | | | — | | | 11,698 | | | — |
| Mark-to-market adjustments | | 941 | | 2,709 | | (104) | | 3,502 | ||||
| Loss on disposal of property, plant and equipment | | 8 | | 187 | | 1,153 | | 935 | ||||
| Other | | 1,750 | | 31 | | 3,904 | | 1,916 | ||||
| Adjusted EBITDA | | $ | 13,723 | | $ | 17,453 | | $ | 45,081 | | $ | 60,053 |
Westrock Coffee Company
Reconciliation of Segment Results
(Unaudited)
| | | | | | | | | | | | | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| | | Three Months Ended December 31, | | Year Ended December 31, | ||||||||
| (Thousands) | **** | 2023 | **** | 2022 | **** | 2023 | **** | 2022 | ||||
| Net Sales | | | | | ||||||||
| Beverage Solutions | | $ | 175,119 | | $ | 192,591 | | $ | 722,865 | | $ | 685,303 |
| Sustainable Sourcing & Traceability^1^ | | 39,847 | | 35,132 | | 141,849 | | 182,569 | ||||
| Total of Reportable Segments | | $ | 214,966 | | $ | 227,723 | | $ | 864,714 | | $ | 867,872 |
| | | | | | | | | | | | | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| | | Three Months Ended December 31, | | Year Ended December 31, | ||||||||
| (Thousands) | **** | 2023 | **** | 2022 | **** | 2023 | **** | 2022 | ||||
| Gross Profit | | | | | ||||||||
| Beverage Solutions | | $ | 31,031 | | $ | 32,297 | | $ | 125,899 | | $ | 140,692 |
| Sustainable Sourcing & Traceability | | 3,786 | | 2,000 | | 13,959 | | 12,073 | ||||
| Total of Reportable Segments | | $ | 34,817 | | $ | 34,297 | | $ | 139,858 | | $ | 152,765 |
| | | | | | | | | | | | | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| | | Three Months Ended December 31, | | Year Ended December 31, | ||||||||
| (Thousands) | **** | 2023 | **** | 2022 | **** | 2023 | **** | 2022 | ||||
| Adjusted EBITDA | | | | | ||||||||
| Beverage Solutions | | $ | 11,659 | | $ | 15,175 | | $ | 41,624 | | $ | 53,951 |
| Sustainable Sourcing & Traceability | | 2,064 | | 2,278 | | 3,457 | | 6,102 | ||||
| Total of Reportable Segments | | $ | 13,723 | | $ | 17,453 | | $ | 45,081 | | $ | 60,053 |
1 - Net of intersegment revenues
Non-GAAP Financial Measures
We refer to EBITDA and Adjusted EBITDA in our analysis of our results of operations, which are not required by, or presented in accordance with, accounting principles generally accepted in the United States (“GAAP”). While we believe that net (loss) income, as defined by GAAP, is the most appropriate earnings measure, we also believe that EBITDA and Adjusted EBITDA are important non-GAAP supplemental measures of operating performance as they contribute to a meaningful evaluation of the Company’s future operating performance and comparisons to the Company’s past operating performance. Additionally, we use these non-GAAP financial measures in evaluating the performance of our segments, to make operational and financial decisions and in our budgeting and planning process. The Company believes that providing these non-GAAP financial measures to investors helps investors evaluate the Company’s operating performance, profitability and business trends in a way that is consistent with how management evaluates such performance.
We define “EBITDA” as net (loss) income, as defined by GAAP, before interest expense, net, provision for income taxes and depreciation and amortization. We define “Adjusted EBITDA” as EBITDA before equity-based compensation expense and the impact, which may be recurring in nature, of transaction, restructuring and integration related costs, including management services and consulting agreements entered into in connection with the acquisition of S&D Coffee, Inc., impairment charges, changes in the fair value of warrant liabilities, non-cash mark-to-market adjustments, certain costs specifically excluded from the calculation of EBITDA under our material debt agreements, such as facility start-up costs, the write off of unamortized deferred financing costs, costs incurred as a result of the early repayment of debt, gains or losses on dispositions, and other similar or infrequent items (although we may not have had such charges in the periods presented). We believe EBITDA and Adjusted EBITDA are important supplemental measures to net (loss) income because they provide additional information to evaluate our operating performance on an unleveraged basis. In addition, Adjusted EBITDA is calculated similar to defined terms in our material debt agreements used to determine compliance with specific financial covenants.
Since EBITDA and Adjusted EBITDA are not measures calculated in accordance with GAAP, they should be viewed in addition to, and not be considered as alternatives for, net income (loss) determined in accordance with GAAP. Further, our computations of EBITDA and Adjusted EBITDA may not be comparable to that reported by other companies that define EBITDA and Adjusted EBITDA differently than we do.