LITTLE ROCK, Ark., USA – Westrock Coffee Company today reported financial results for the fourth quarter and full year 2022. Scott T. Ford, CEO and Co-founder, stated, “We are pleased to announce strong growth in net sales, gross profit and Adjusted EBITDA for full year 2022.
I am very grateful to the team for their near heroic efforts that delivered record annual results, even as they dealt with the damaging macroeconomic challenges of an inflation surge and record gasoline prices, while simultaneously contending with internal capacity constraints and increased operating expenses brought about by the late arrival of critical manufacturing equipment in both our single serve cup and extracts units.
As we turn to 2023 with the requisite equipment to meet our legacy customers’ demands now operational, we are focused on continuing to scale our existing capabilities in service to our customers. Among our top priorities is delivering our Conway, Arkansas extract and ready-to-drink facility on time and on budget, the benefits of which will be material to our business.”
Westrock Coffee Company: Full Year 2022 Highlights
- Consolidated net sales were $867.9 million for the year ended December 31, 2022, an increase of $169.7 million, or 24%, compared to the year ended December 31, 2021.
- Consolidated gross profit was $152.8 million for the year ended December 31, 2022, and included $3.5 million of non-cash mark-to-market losses, compared to $145.4 million for the year ended December 31, 2021, which included $3.6 million of non-cash mark-to-market gains.
- Net loss was $55.5 million for the year ended December 31, 2022, compared to a net loss of $21.3 million for the year ended December 31, 2021. The $55.5 million net loss for the year ended December 31, 2022 included $13.2 million of acquisition, 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. Net loss of $21.3 million for the year ended December 31, 2021 included $8.8 million of acquisition, restructuring and integration expense.
- Adjusted EBITDA was $60.1 million for the year ended December 31, 2022, an increase of $12.9 million, or 27%, compared to the year ended December 31, 2021.
- At December 31, 2022, the Company had approximately $192 million of unrestricted cash and undrawn borrowings under its revolving credit facility, and the Company’s consolidated leverage ratio was 2.9x based on net debt to fourth quarter annualized Adjusted EBITDA.
- Beverage Solutions segment contributed $685.3 million of net sales and $54.0 million of Adjusted EBITDA for the year ended December 31, 2022, compared to $551.0 million and $41.5 million, respectively, for the year ended December 31, 2021. This represents net sales growth of 24%, and Adjusted EBITDA growth of 30%.
- Sustainable Sourcing & Traceability (“SS&T”) segment, net of intersegment revenues, contributed $182.6 million and $6.1 million of Adjusted EBITDA for the year ended December 31, 2022, compared to $147.1 million and $5.7 million, respectively, in the year ended December 31, 2021. This represents net sales growth of 24%, and Adjusted EBITDA growth of 7%.
Fourth Quarter Highlights
- Consolidated net sales were $227.7 million for the fourth quarter of 2022, an increase of $37.3 million, or 20%, compared to the fourth quarter of 2021.
- Consolidated gross profit for the fourth quarter of 2022 was $34.3 million and included $2.7 million of non-cash mark-to-market losses, compared to consolidated gross profit of $39.7 million for the fourth quarter of 2021, which included $1.6 million of non-cash mark-to-market gains.
- Net loss for the period was $31.9 million compared to a net loss of $5.2 million for the same period in 2021. The $31.9 million net loss for the fourth quarter of 2022 included $4.4 million of acquisition, restructuring and integration expense and $24.5 million of non-cash expense from the change in fair value of warrant liabilities. Net loss of $5.2 million for the fourth quarter of 2021 included $5.1 million of acquisition, restructuring and integration expense.
- Adjusted EBITDA was $17.5 million for the fourth quarter of 2022, an increase of $3.3 million, or 23%, compared to the fourth quarter of 2021.
- Beverage Solutions segment contributed $192.6 million of net sales and $15.2 million of Adjusted EBITDA for the fourth quarter of 2022, compared to $150.5 million and $11.5 million, respectively, for the fourth quarter of 2021. This represents net sales growth of 28%, and Adjusted EBITDA growth of 31%.
- SS&T segment, net of intersegment revenues, contributed $35.1 million and $2.3 million of Adjusted EBITDA for the fourth quarter of 2022, compared to $39.9 million and $2.7 million, respectively, for the fourth quarter of 2021.
Westrock Coffee Company: Business Highlights
As previously announced, on February 14, 2023, the Company amended its existing $350 million credit agreement to establish a new class of incremental term loan commitments in the form of a senior secured delayed draw term loan credit facility in the aggregate principal amount of $50 million.
As previously announced, on February 28, 2023, the Company completed the acquisition of Bixby Roasting Co. (“Bixby”), a specialty-grade roaster that is a leader in the emerging influencer-led brand space. The acquisition, which includes Bixby’s roasting facility in Los Angeles, CA, allows Westrock Coffee to continue to expand its omnichannel product marketing and development resources as we capitalize on shifting consumer consumption trends toward consumption associated with personal brands. Bixby co-founders Miles Fisher and Remington Hotchkis both joined the Westrock Coffee senior management team as part of the transaction. The terms of the transaction were not disclosed.
2023 Outlook
The Company expects consolidated Adjusted EBITDA to grow 10% to 25% in fiscal 2023, representing a range of $66 million to $75 million. 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 2023 outlook on the earnings results call later 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.
