Westrock Coffee Company

Hello, and welcome to the West Rock Cafe Company's fourth quarter 2022 earnings conference call. My name is Valerie. I will be your conference coordinator today. Following prepared remarks, we will open the call for your questions with instructions to be given at that time. I will now hand the call over to Clay Crumbless of ICR. Please begin.

Thank you, and welcome to West Rock Coffee Company's fourth quarter 2022 earnings conference call. Today's call is being recorded. With us 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 fourth quarter earnings release issued earlier today. This information is available on 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 is my pleasure to turn the call over to Scott Ford, our co-founder and chief executive officer.

Good afternoon, everyone, and thank you, Clay. I'm delighted to be here with you as we report our fourth quarter and full year 22 financial results. As noted in the headlines of our release, our year-over-year adjusted EBITDA growth was 23% for the fourth quarter and 27% for fiscal year 2022. These are fabulous results, and I am grateful to the entire Westrock Coffee team who worked tirelessly all year to deliver them. Ask anyone on the team and they can tell you 22 was a year of unbelievable accomplishments amid staggering challenges. We became a public company during a very difficult time for the public equity markets. and have been one of the best performing new issues of 22. This transaction allowed us to deliver our balance sheet and provided us access to enough capital to build out not only the first, but also the second phase of our new Conway Arkansas extract and ready to drink facility. With well over half of the capacity of this combined facility already under sales contracts with leading RTD coffee brands, we are excited to be positioned to enter a completely new era of EBITDA creation over the next two to three years. And while we plan for the future, we operate in the here and now. In 2022, we encountered a significant number of operational level challenges. We began 22 with the onset of the Omicron COVID variant, which delayed an expected economic recovery, and then faced a surge of inflation and gasoline price hikes through the summer, all of which negatively impacted our business. Our year ended with the late arrival of significant production equipment for our single serve and extract units, which created customer delivery issues and negatively impacted our costs and margins. Our team had to fight for every inch of progress in every season of what could have otherwise been a fairly impressive and reasonably easy year. Yet through all the good and the bad of 2022, our team worked tirelessly to deliver record adjusted EBITDA, up 20%, while also making significant advances on integrating and improving our internal operations, sales, and support functions. These advances, coupled with the recent arrival and onboarding of our long-delayed manufacturing equipment, have set us up for another record year in 2023, even as we continue to spend as needed to build the scaled platform necessary to monetize the value of our new Conway extracts and RTD plants. which when fully online is set to expand our EBITDA, not by percentage factors, but quite possibly by multiples. Before I turn the call over to Chris Pledger, our CFO, let me say a word about two acquisitions we made over the past few months. In November, we closed on the acquisition of Kohana Coffee, an extract and RTD business in Richmond, California. This acquisition was important for us in that it allowed us to add several new customers on our beverage solutions platform And more importantly, it allowed us to accelerate the development, production, and distribution of RTD products in cans and multi-serve bottles for key existing customers. Similarly, the acquisition of Bixby Roasting in February allowed us to expand our growing influencer-led sales channel and add two outstanding sales executives to our team. Miles Fisher and Remington Hotchkiss are going to be impact players for Westrock Coffee over time. These kind of incremental gains expand our platform and help drive growth as we build for our future. They are exactly the kind of acquisition opportunities we remain focused on today. With that, I'll turn the call over to Chris, who will walk you through our recent financial performance.