Westrock Coffee Company

Hello, and welcome to Westrock Coffee Company's third quarter 2022 earnings conference call. My name is Chris, and I'll be coordinating your call today. Following prepared remarks, we will open the call to your questions with instructions to be given at that time. I'd now like to hand the call over to Clay Crumpless with ICR.

Thank you, and welcome to Westrock Coffee Company's third quarter 2022 earnings results conference call. Today's call is being recorded. With us today are Mr. Scott Ford, co-founder and chief executive officer, and Mr. Chris Pledger, chief financial officer. By now, everyone should have access to the company's third quarter earnings release issued earlier today. This information is available in the investor relations section of Westrock Coffee Company's website at investors.westrockcoffee.com. Certain comments made on this call include forward-looking statements, which are subject to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are based on management's current expectations and beliefs concerning future events and are subject to several risks and uncertainties that could cause actual results to differ materially from those described in these forward-looking statements. Please refer to today's press release and other filings with the SEC for a more detailed discussion of the risk factors that could cause actual results to differ materially from those expressed or implied in any forward-looking statements made today. Also, discussions during the call will use some non-GAAP financial measures as we describe business performance. The SEC filings as well as the earnings press release provide reconciliations of these non-GAAP financial measures to the most directly comparable GAAP measures. And with that, it's my pleasure to turn the call over to Scott Ford, our co-founder and chief executive officer. Scott?

Thank you, and good afternoon, everyone. Welcome to our inaugural public company quarterly earnings call. It has been quite the journey from our startup days in 2009 with $1.5 million in annual revenues to the business you see today, all of which I believe will pale in comparison to what we are about to do over the next five years. As many of you know, we started Westrock Coffee Company in 2009 when we saw the need for a new business model that would help ensure smallholder farmers in the developing world are paid a fair price for their coffee crop. Our business model, which is not predicated on us receiving charity or charging our customers premium prices, is most effective when we ourselves deliver superior financial results. So while we are a dual-purpose organization, we are first and foremost a commercial enterprise. Because the better we do as the business in the developed world, the more we can do for farmers in the developing world, and the better stewards we can prove to be for the investors who trust us with their capital. As we profitably grow our business, we create greater demand pool for coffee to enter our supply chain, which in turn allows us to expand the number of farmers whose crops we purchase, through which we essentially underwrite the price of coffee in that community. What started in Rwanda as a single export mill through organic growth and via acquisitions is today the leading integrated coffee, tea, and extract manufacturing company in the United States. We have to thank for this our shareholders who believed in our future success when it was hard to see exactly how it would come to pass, our customers who continue to select us for an ever-broadening array of products and services across an ever-widening geography, our employee partners whose passion and commitment to making a positive difference in the lives of everyone we serve up and down the supply chain is unmatched globally. And the farmers in 35 origin countries without whose trust and trade we would have no business to report on. Now, we operate our business while purpose and farmer impact focused as a brand behind the brand's model in the developed world. And the significant announcements we are making today shed light on both our progress to date and our capacities and potential over the next five years. Before I turn the call over to Chris Pledger, I'd like to bring your attention to two very significant announcements we are making related to the growth of our extract and ready to drink manufacturing operations. First, we are pleased to announce that in response to the strong demand for the products we plan to produce, from the previously announced phase one expansion of our extract and ready to drink facility in Conway, Arkansas. Coupled with the additional capital beyond the pipe that we raised through our recent SPAC merger, we now plan to bring forward the manufacturing and packaging capabilities previously planned for phase two. Accelerating the phase two capital spend into phase one timing means that in addition to the basic extraction capabilities and high-speed can and glass bottle lines planned for Phase 1, we will now add enhanced extraction and soluble capabilities, a multi-serve bottling line, and several bag-in-a-box lines. You will recall that all of our previous long-term guidance was built solely on the completion of our original Phase 1 planning. While not coming online in time to materially impact our 24 EBITDA, this acceleration of phase two of those capabilities should allow us to continue to commensurately grow our adjusted EBITDA into 25 and beyond. Secondly, we are thrilled to announce that earlier today we closed on the purchase of Kohana Coffee out of Richmond, California. Kohana, owned by Jonathan and his father, Steve Reinman, the former CEO of PepsiCo, brings with it a fabulous team, two additional ready-to-drink extract packaging formats, and a number of important national customers. The Reinmans will be rolling their equity in Kohana into Westrock Coffee, which I think speaks volumes about what we believe we can collectively do in the emerging ready-to-drink space, especially given their deep history in the beverage industry. Taken together, we believe these two developments materially accelerate our product-to-market timing, allowing us to bridge demand for a number of important CPG customers who are ramping up their own sales of RTD beverages driven by their quickly accelerating end customer demand. Finally, I want to thank the team at Westrock Coffee, who in spite of the unimaginable headwinds of quickly inflating costs and the attendance suppression of consumer demand brought about by the substantial rise in gas prices this summer still managed to deliver adjusted EBITDA growth of roughly 30% year over year. And while we're all disappointed that macroeconomic headwinds are going to prevent us from achieving the 50% adjusted EBITDA growth we planned for, I am super thankful and respectful of all the team did in the midst of this inflationary storm to deliver yet again record financial results year to date. Chris?