Westrock Coffee reports first-quarter 2022 results

Westrock Coffee Holdings, LLC reported financial results for the first quarter ending March 31, 2022, affirmed its full year adjusted EBITDA guidance of $75 million in 2022, and announced the upsizing of its new credit facility to $350 million.

Consolidated net sales were $186.4 million, an increase of $31.1 million, or 20%, from the prior year period.
Net loss was $4.7 million compared to a net loss of $6.1 million in the prior year period, a decrease of 23%.
Adjusted EBITDA was $11.4 million, an increase of $3.1 million, or 37%, from the prior year period.

In addition, the company announced it is upsizing the credit facility it will enter in connection with its previously announced transaction with Riverview Acquisition Corp. from $300 million to $350 million in response to strong demand from prospective lenders to participate in the facility.

Finally, the company announced that its new plant in Malaysia commenced production in April as planned and is on track to ship its first product in June 2022.

Scott T. Ford, co-founder and CEO, stated in the announcement, "We are pleased with the strong start to the year, particularly given the numerous factors currently impacting the U.S. consumer, increased inflation, and the volume impacts of Covid restarts. Our team once again did an exceptional job of delivering on time and in full for our customers and that continues to open new opportunities for growth across the numerous industry groups and product types that we serve."

Quarterly results

Consolidated net sales for the first quarter of 2022 increased 20% to $186.4 million, compared to $155.3 million for the first quarter of 2021. Net loss for the first quarter of 2022 was $4.7 million, compared to a net loss of $6.1 million for the first quarter of 2021. Adjusted EBITDA for the first quarter of 2022 was $11.4 million, representing adjusted EBITDA growth of 37% when compared to the prior year first quarter.

Westrock Coffee's Beverage Solutions segment contributed $148.4 million of net sales and $10.4 million of Adjusted EBITDA for the first quarter of 2022, compared to $127.3 million and $8.1 million, respectively, for the first quarter of 2021. This represents year-over-year sales growth of 17%, and year-over-year adjusted EBITDA growth of 28%. The increase in first quarter 2022 EBITDA was driven by a favorable customer and product mix, favorable purchase price variances, and improved operational efficiencies.

Sales in the company’s Sustainable Sourcing & Traceability (“SS&T”) segment, net of intersegment revenues, grew to $38.1 million in the first quarter of 2022, compared to $28.1 million in the first quarter of 2021, driven by an approximately 20% increase in volumes and by higher green coffee prices during the first quarter of 2022 compared to the first quarter of 2021. Westrock Coffee's SS&T segment contributed $1.0 million and $0.2 million of adjusted EBITDA in the first quarter of 2022 and 2021, respectively.

Transaction update

In connection with the company's previously announced transaction with Riverview Acquisition Corp, Westrock Coffee secured a financing commitment from Wells Fargo for a $300 million Senior Secured Pro Rata Credit Facility. In response to strong demand from prospective lenders to participate in the facility, the size of the credit facility has been increased to a $350 million Senior Secured Pro Rata Credit Facility, which will include a $175 million term loan and a $175 million revolving loan commitment. Upon closing, the funds will be used to re-finance the company’s existing debt and fund its expansion plans. The transaction remains on track and is expected to close by the end of the third quarter of 2022. The company will retain the Westrock Coffee name and be listed on Nasdaq under the ticker symbol "WEST."

Malaysia facility update

The company announced that its newest production facility in Johor Bahru, Malaysia commenced production in April 2022, and that the company is on schedule to ship products to customers in the Asia Pacific region in June 2022.