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Sep 30, 2024
Westrock Coffee Q3 2024 Earnings Report
Westrock Coffee had a strong third quarter, with net sales increasing slightly and gross profit improving, despite a net loss due to various expenses and facility costs.
Key Takeaways
Westrock Coffee Company reported a slight increase in net sales for Q3 2024, with a rise in gross profit. However, the company experienced a net loss due to transaction, restructuring, and integration expenses, pre-production and scale-up costs related to the Conway facility, and impairment charges.
Net sales increased by 0.6% to $220.9 million compared to Q3 2023.
Gross profit increased to $37.1 million, including $0.5 million of non-cash mark-to-market losses.
Net loss for the period was $14.3 million, which included $2.5 million of transaction, restructuring and integration expense and $7.9 million of pre-production costs related to the Conway Facility.
Consolidated Adjusted EBITDA was $10.3 million, including $4.0 million of scale-up costs associated with the Conway Facility.
Westrock Coffee
Westrock Coffee
Westrock Coffee Revenue by Segment
Revenue by Segment
Beverage Solutions Revenue
CapyFin.com Forward Guidance
Westrock Coffee expects to report $50.0 million of Consolidated Adjusted EBITDA in fiscal year 2024, including $10.0 million of scale-up costs associated with the Conway Facility, and between $80.0 million and $100.0 million in fiscal year 2025, which includes approximately $10.0 to $15.0 million of scale-up costs associated with the Conway Facility.
Positive Outlook
- Volume growth in the Company’s core coffee business from new retail coffee customers
- New volume commitments from existing single serve customers and new single serve customer wins
- Full year benefit of expense savings from cost reduction and facility consolidation efforts
- Rapid scale of our RTD can volumes beginning in the first quarter of 2025 and continuing throughout 2025
- Launch of our RTD glass bottle products in the third quarter of 2025.
Challenges Ahead
- Continued softness in the Company’s single serve cup platform
- Push out of the sales ramp for the Conway Facility ready-to-drink (“RTD”) can products into the first quarter of 2025 (vs. the fourth quarter of 2024).
- The Company is not readily able to provide a reconciliation of forecasted Consolidated 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, among others.
- 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.