LITTLE ROCK, Ark., USA – Westrock Coffee Company reported financial results for the second quarter ended June 30, 2024. Scott T. Ford, CEO and Co-founder stated, “The second quarter of 2024 was an important quarter at Westrock Coffee for several reasons. First, it represents our second consecutive quarter of year-over-year growth in Adjusted EBITDA – up 31.8% in the first quarter and now up 20.8% in the second quarter, while our Beverage Solutions Adjusted EBITDA margin improved almost 200 basis points, year over year.
And perhaps more importantly, the second quarter marked our first commercial sale of multi-serve bottles, and first commercial production of cans, from our Conway extract and ready-to-drink facility.
Also, given our updated sales ramp visibility for our Conway extract and RTD plant, we are narrowing our 2024 guidance range to $60 – $65 million of Adjusted EBITDA, while simultaneously reaffirming our preliminary guidance for Adjusted EBITDA of $115 million in fiscal year 2025.”
Westrock Coffee Company: Second Quarter Highlights
Consolidated Results
- Net sales were $208.4 million for the second quarter of 2024, a decrease of $16.3 million, or 7.3%, compared to the second quarter of 2023.
- Gross profit for the second quarter of 2024 was $41.4 million and included $1.5 million of non-cash mark-to-market gains, compared to gross profit of $35.7 million for the second quarter of 2023, which included $1.0 million of non-cash mark-to-market gains.
- Net loss for the period was $17.8 million, compared to a net loss of $26.8 million for the second quarter of 2023. The $17.8 million net loss for the second quarter of 2024 included $4.4 million of transaction, restructuring and integration expense, $13.6 million of start-up costs related to our Conway, Arkansas extract and ready-to-drink facility, and $1.6 million of non-cash gains from the change in fair value of warrant liabilities. The $26.8 million net loss for the second quarter of 2023 included $2.9 million of transaction, restructuring and integration expense, $1.7 million of start-up costs related to our Conway, Arkansas extract and ready-to-drink facility, and $11.8 million of non-cash charges from the change in fair value of warrant liabilities.
- Adjusted EBITDA was $13.7 million for the second quarter of 2024, an increase of $2.4 million, or 20.8%, compared to the second quarter of 2023.
Segment Results
Beverage Solutions segment contributed $163.3 million of net sales and $13.2 million of Adjusted EBITDA for the second quarter of 2024, compared to $189.7 million and $11.7 million, respectively, for the second quarter of 2023.
SS&T segment, net of intersegment revenues, contributed $45.1 million of net sales and $0.4 million of Adjusted EBITDA for the second quarter of 2024, compared to $35.0 million and ($0.4 million), respectively, for the second quarter of 2023.
2024 and 2025 Outlook
The Company is updating its guidance for Adjusted EBITDA, and the Company now expects Adjusted EBITDA to be between $60 million and $65 million in fiscal year 2024. Westrock Coffee is lowering the top end of its range to account for the Company’s current expectations regarding the timing of the commercialization of customers at its Conway, Arkansas extract and ready-to-drink facility. The Company is affirming its guidance for Adjusted EBITDA of $115 million in fiscal year 2025. Management will provide additional details regarding the 2024 and 2025 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 (loss) 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.
