Westrock Coffee Company

Hello and welcome to Westrock Coffee Company's fourth quarter 2024 earnings conference call. My name is Lateef and I will be coordinating your call today. Following prepared remarks, we will open the call up to your questions with instructions to be given at that time. I'll now hand the call over to Robert Munger with Westrock Coffee. Please go ahead.

Thank you and welcome to Westrock Coffee Company's fourth quarter 2024 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 in the investor relations section of West Rock 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.

Thank you, Robert, and good afternoon, everyone. Thanks for joining us today. As most of you know, our core value proposition is to be the premier integrated strategic supplier to the preeminent coffee, tea, and energy beverage brands globally. We made considerable progress in our execution of this strategy in 24, ending the fourth quarter with segment-adjusted EBITDA in our beverage solutions unit of 17.8 million, up 53% over the prior year. We also saw a 52% increase year-over-year in our SS&T segment. In total, we generated combined segment-adjusted EBITDA of 21 million, up 53% over the same period a year ago. On that same basis, for the full year 24, we ended at $60 million for the year, up 33% over the prior year, which was in line with our most recent forecast. Let me share a few highlights from 24 that we believe set us up to continue to grow this EBITDA number at roughly 50% annually for at least the next two years. West went public two and a half years ago with the value proposition I stated a few moments ago. And from that time to this, we've invested almost $400 million building and equipping the largest roast to extract ready-to-drink facility in the country, a new single-serve cup manufacturing facility, and a new distribution center that together encompass over a million square feet that can produce and distribute hundreds of millions of RTD cans, glass bottles, and multi-serve bottles, along with ultimately billions of single-serve cups each year. We pursued this path for two fundamental reasons. First, we observed generationally rare consumer-driven value shifts coming in the coffee and related beverage market that were going to create immense return opportunities for a few companies while stagnating or even imploding others. Because these consumer shifts were going to require profound business model changes from those of us in the supplier networks of these major brands. And secondly, because we were already positioned as one of a very few companies globally that had the technological expertise, the breadth of product offerings, and category leading customer base to deliver on this type of industry altering strategic plan. To execute against this opportunity, we set out to become the leading manufacturing partner to the preeminent global beverage brands by becoming their lead innovation and development partner dependable and sustainable sourcing resource, and a low-cost processing and packaging outsourcer. We believe that by doing this, we will become an invaluable partner to these global brands as we enable them to capitalize on their brand equity positions through the transition of their product portfolio in step with the movements of their end customers. Let me give you a few concrete examples of what our integrated strategic supplier approach yielded at the execution level in 24. In our core roasting ground coffee business, we are just this month completing the full automation of two new packaging lines that we installed in 24 in order to accommodate new customer demand of over 20 million pounds annually. This volume increase largely comes from new customers in the retail and private label and national coffee brand CPG industries, which were brought into our shop via the relationships we built with them in our single-serve and extract and RTD businesses. This volume expansion is coupled with greatly improving operational KPIs from recent investments in facilities, systems, and people. Together, these factors should translate into the greatest profitability we've seen in the roasting ground coffee unit in a number of years. In our single-serve business, we experienced setbacks early in the year from lower volumes from some of our historical customers. But in late 24 and early 25, we entered agreements with several additional leading CPG brands that contacted us through our new Conway facility for an integrated product set that should generate our best year ever in the single serve manufacturing unit in 25, both in volumes and in profits. This is another excellent manifestation of the value our customers see in West being their strategic integrated supplier, and is a prime example of the type of relationship that is at the heart of our value creation ambitions, both for our customers and our shareholders. Finally, in our extracts and RTD business, we experienced nearly 25% volume growth and more than that in gross profit expansion as we reaped the benefit of two major facility and system upgrades that we conducted over the previous two years at our Concord, North Carolina facilities. Importantly, this financial performance did not include any meaningful sales from our Conway, Arkansas complex, as that site is only now coming online at production level scale, but which acted as a brand beacon for us all year, attracting the largest brands in the world to our integrated platform. These important developments, coupled with the further impact we will experience over time as these full new contract volumes come online, Allow us to confidently reiterate our forecast for sharply rising EBITDA accompanied by a precipitous drop in our credit agreement leverage ratios over the next 24 months. To summarize 2024, we now have in hand executed contracts with purchase orders from over a dozen premier global CPG brands and another dozen plus retailers and distributors that fill over 80% of our initial production and packaging capacity in Conway. But perhaps even more importantly, these very customers have also filled much of our remaining packaging capacity at our roasting ground and single serve plants. So as we speak today, we are again expanding the size of our second can line in Conway, our retail packaging lines in North Carolina, and our new single serve plant in Conway. simply to meet the additional demand these iconic brands have brought to us across our portfolio of products over the course of 24. Finally, while 24 was a demanding year, full of complicated facility expansions and strenuous customer onboarding activities, the back half of the year was an exceptional period for us, both from a financial performance perspective and as an operational and financial setup for the next several years. As Chris will walk you through shortly, the initial sales load-in I just described is expected to take approximately six quarters and is slated to begin in about three weeks. The end result of these customer volume onboardings should generate significant continued EBITDA growth over the next few years before we sell anything else to anyone else. But with that said, we fully expect to sell out the remaining installed packaging capacity in both our Conway RTD and single-serve plants over the next few months, as many premier global brands are only now beginning to hear about our capabilities in product development and manufacturing and are lining up visits to see the new plants in operation for themselves. The timing of product sales that follows each of these global customer wins is a complicated process. as product onboarding is quite laborious and multifaceted. In order to help investors see this initial sale to EBITDA process clearly, we're going to break down our 25 EBITDA guidance into two halves. Additionally, we are going to share guidance for our period-ending credit agreement leverage ratio for each of these periods in 25 and for the year in 26, as we think these metrics are the most important measures of value creation. Finally, a large component of our management incentive compensation is tied to delivering tangible results on these very two specific data points, adjusted EBITDA and leverage ratios, along with the change in the value of our stock. We are clear-eyed and focused on delivering against our integrated strategic supplier value creation model by growing our EBITDA and reducing our leverage now by providing the highest service levels imaginable to our world-leading customers. And while I fully acknowledge we got a bit behind through the construction and customer contracting phase, we are now well ahead of plan on customer brand and project onboardings across our entire product set. With that introduction, I'd like to turn the call over to Chris Pledger, our CFO, for a deeper dive into each of these topics I've outlined, and I'll rejoin you for questions in a few moments. Thank you. Chris?

Thank you, Scott, and good afternoon, everyone. 2024 was an exceptional year for Westrock Coffee Company. We expanded our roasting ground coffee business by onboarding new CPG customers to our platform, and our extracts business grew 8.5% year over year. At our Conway Extract and RTD facility, we launched our multi-serve bottle line and successfully sold out our glass bottle line. Additionally, we launched and largely sold out our can capacity, catering to a customer base that includes large CPG customers, and some of the largest coffee brands in the US. On the infrastructure side, we leveraged new data insights and artificial intelligence to enhance our commodity cost forecasting and the associated risk management. We tightly managed our operating expenses and capital expenditures to maximize the return on every dollar we invested in the business. We protected our balance sheet and ensured delivery of our Conway extract and RTD facility through a $72 million convertible debt offering in February of 2024 and we increased our revolving credit facility by $25 million in January 2025. Moreover, we implemented several working capital strategies to ensure liquidity throughout the development of the Conway facility. However, our year wasn't without its challenges. Our single-serve cut volumes remained below forecast for much of the year, and we didn't begin monetizing our Conway investment in the back half of 2024 as we initially projected. Instead, this will commence in the second quarter of this year. Regarding our financial results, For the full year 2024, we generated consolidated adjusted EBITDA of $47.2 million. This result included $12.8 million of Conway facility scale-up operating costs. For comparison, consolidated adjusted EBITDA for the full year 2023 was $45.1 million, but did not include any Conway scale-up operating costs. For an accurate year-over-year comparison, you would add the $12.8 million in Conway scale-up costs to the $47.2 million of consolidated adjusted EBITDA to get a true picture of our 2024 performance versus 2023. With respect to our 2024 guidance, during our third quarter earnings call, we projected $50 million in consolidated adjusted EBITDA with $10 million in Conway scale-up costs. Conway scale-up costs ended up at $12.8 million because we had less sales volume in our Conway extract and RTD facility to absorb those costs. Nevertheless, we achieved our segment-adjusted EBITDA targets in beverage solutions with 53.6 million and SS&T with 6.4 million, representing a 29% and 84% increase respectively over last year's results. With that introduction, I'll now review our financial results for the fourth quarter and full year 2024. On a consolidated basis in the fourth quarter, net sales increased by 6.5% compared to the fourth quarter of 2023. and gross profit rose by 9.2%. Consolidated adjusted EBITDA was $13.3 million, with that result being burdened by $7.6 million of Conway scale-up operating costs. Comparatively, last year's consolidated adjusted EBITDA was $13.7 million, but with no Conway scale-up operating costs. For an accurate year-over-year comparison, you would add the $7.6 million in Conway scale-up costs to the $13.3 million in consolidated adjusted EBITDA to get a true picture of our quarter-over-quarter performance. On a segment basis in the fourth quarter, beverage solutions experienced a slight decrease in net sales, while segment adjusted EBITDA grew by 6.2 million, or 53%. This growth was driven by continued strength in flavors, extracts, and ingredients, coupled with effective supply chain and operating expense management. Our sustainable sourcing and traceability segment saw a 38% increase in sales compared to the fourth quarter of 2023, driven by higher coffee prices and increased sales volume. This resulted in a 52% increase in SS&T segment adjusted EBITDA for the quarter. Turning to our annual results, on a consolidated basis, net sales for the full year 2024 decreased by 1.6%, while gross profit increased 10% over the prior year. As mentioned earlier, consolidated adjusted EBITDA for 2024 was $47.2 million, impacted by $12.8 million of Conway scale-up operating costs. For the full year 2024, our beverage solutions segment generated $659.4 million in net sales, an 8.8% decrease compared to 2023. The segment showed strong performance in flavors, extracts, and ingredients with 8.5% sales growth, whereas volumes in core coffee and single-serve products declined by 13% and 16%, respectively. Beverage solution segment in JustZivita was $53.6 million for 2024, compared to $41.6 million in 2023, which is a 29% increase versus the prior year. This increase was driven by continued strength in flavors, extracts, and ingredients, effective supply chain management, and expense discipline throughout the year. Sales in our SS&T segment net of intersegment revenues totaled $191.3 million during 2024, driven by a 40% increase in volumes. SS&T segment adjusted EBITDA for 2024 was $6.4 million compared to $3.5 million in 2023. This increase reflects a return to our expected results for this segment, with 2023 being an anomaly triggered by the supply chain disruption experienced throughout the global shipping industry. We expect to see this segment continue to grow as we are well positioned to capitalize on opportunities brought about by the higher green coffee price environment in which we now operate. Turning to capital expenditures, we spent approximately $18 million in capex in the fourth quarter, which brings our total for the year to $160 million. Of this amount, $140 million was spent on our Conway Extract and RTD facility. With respect to our Conway facility, through the end of fiscal 2024, we've spent a total of $288 of the planned $340 million in CapEx, which includes the cost for the installation of our second RTD can line. We expect to spend the balance of the Conway CapEx in the first three quarters of 2025, with the largest part of that spend in the first quarter. As of year end, we had approximately $90 million in consolidated unrestricted cash and undrawn revolving credit commitments on our $175 million line. The credit amendment executed on January 15 provides an additional $25 million in revolving credit commitments. Our leverage reigns within expectations and applies with our credit agreement covenants. As many of you are aware, green coffee prices surged by approximately 70% in fiscal 2024, reaching all-time highs in the early months of this year. As we've mentioned on numerous occasions, at Westrock, the cost of coffee is a pass-through expense borne by our customers. However, we do feel the impact of higher green coffee costs in our inventory values for the green coffee we carry during the manufacturing process. This puts additional pressure on our liquidity through increased working capital, but we believe we're well positioned from a liquidity standpoint to withstand higher coffee prices. Higher coffee prices are more likely to impact our business as the higher coffee costs are passed on to coffee consumers, which could affect demand for our products. While our volumes in the first quarter have been impacted by severe weather events, not higher coffee prices, we could see a decline in product demand due to higher coffee prices in the back half of the year and are adjusting our forward guidance to take this into account. We'll continue to monitor coffee pricing and provide updates on any impact. Another important topic is the impact of tariffs on our business. Given the uncertainty surrounding tariffs, we haven't factored any potential impact into our 2025 forecast. Regarding Mexico, Canada, and China, None of these countries are a major source of inputs for our products, so we do not expect the announced tariffs to affect our business. As with higher green coffee prices, we'll continue to monitor the evolving situation with tariffs and provide updates as we learn more. Turning to guidance, as Scott mentioned, we're set up for an exciting run over the next two years. In 2025 alone, we anticipate volume growth in our core coffee business for new retail customers, many of whom are onboarded in the latter half of 2024, new volume commitments from existing single-serve customers and new single-serve customer wins, the full year benefit of expense savings from our cost reduction and facility consolidation efforts implemented in the middle of last year, expense savings through operational improvements within our core manufacturing facilities as we continue to improve and modernize our plants, and the rapid scale-up of our RTD can volumes starting the second quarter of 2025 and continuing throughout the year, along with the launch of our RTD glass bottle products in the third quarter of 2025. Because of where we are with signed new customer contracts and the product commercialization process in our facilities, we have strong visibility into our growth over the next two years. And given the scale up of the facility over that period, we believe that a two-year perspective is important to properly understand what we expect to deliver. In our earnings release, we provide guidance ranges for the first half of fiscal 2025, second half of fiscal 2025, and full year fiscal 2026 for consolidated adjusted EBITDA and the segment adjusted EBITDA of our two reportable segments. For purposes of this call, I'm just going to refer to the midpoint of those ranges. On a consolidated basis, we expect to deliver $66.5 million of consolidated adjusted EBITDA in fiscal 2025, which includes $15 million of Conway scale-up operating costs, and $140 million of consolidated adjusted EBITDA in fiscal 2026, which includes no Conway scale-up operating costs since the plant is fully scaled as we enter 2026. Our 2025 guidance is lower than the preliminary numbers we provided during our third quarter call to account for the potential risk of softer customer demand due to higher coffee prices and to introduce a bit of conservatism as we ramp our RTD can operations and our new single-serve coffee plant in Conway in the second quarter of 2025. Our outlook and expectations for 2026 have not changed. On a segment basis in 2025, we expect to generate segment-adjusted EBITDA of $75 million in beverage solutions and $6.5 million in SS&T. And in 2026, we expect to generate segment-adjusted EBITDA of $133.5 million in beverage solutions and, again, $6.5 million in SS&T. Looking at our year-over-year growth and the sum of our segments, we expect to grow 35% year-over-year in 2025, and then 72% year-over-year in 2026. As Scott mentioned, we're also introducing guidance for our beverage solutions net secured leverage. We've obviously deployed a significant amount of capital to complete the build-out of our extract and RTD facility, and we believe this metric will allow you to see the delevering that comes as we ramp that facility without the noise created by our commodity trade finance lines in our SS&T segment. For context, we finished 2024 with a Beverage Solutions net secured leverage ratio of 4.7 times. We expect our Beverage Solutions net secured leverage ratio to grow to 5.7 times at June 30, 2025, before coming down to 4.9 times as we end fiscal 2025, both of which are well within our credit agreement covenant. We expect to end fiscal 2026 with a Beverage Solutions net secured leverage ratio of three times, which is also well within our credit agreement covenant. Our goal post-Conway expansion has always been to operate within a two and a half to three times debt to EBITDA range in beverage solutions, and we expect to achieve this goal by the end of 2026. Before we open the call to questions, I just want to take a moment to thank our team members for their incredible work over the past year and their commitment to realizing the full potential of Westrock Coffee Company. Representing over 1,400 employees around the world on this call, every quarter is a privilege that Scott and I do not take lightly. With that, we'll be glad to take a few questions.

As a reminder, to ask a question, you will need to press star one one on your telephone. To remove yourself from the queue, you may press star one one again. Please stand by while we compile the Q&A roster. Our first question comes from Matt Smith of Stifel. Please go ahead, Matt.

Hi, good afternoon Scott and Chris. Hey Matt. I appreciate the greater detail of the 2025 outlook, and at the midpoint, it's about $20 million or so below the preliminary outlook you provided last quarter. You talked about a degree of risk in the second half from higher coffee prices impacting customer orders and some conservatism built into your build-out of the canning and glass lines. Can you talk about the impact of historically higher coffee prices it sounds like you're still able to pass those through and match your costs on a quarterly basis. But are you seeing an impact in customer order cadence or their acceptance to launching new products in this kind of environment, both from the higher coffee costs as well as a softer consumption environment across the store?

Hey, Matt, this is Chris. Yeah, we're seeing a little bit now. I think that if you think about when a higher coffee price would actually flow through the customer cost, it would be later in the year. And so if you listen to some of the other earnings calls, you listen to some of our other customers as they talk about it, you start to see instances where people are passing on coffee costs to the end consumer. And so our expectation is, as that happens, that that could impact the demand for our products. And so for us, it's just a matter of being able to – We don't know what the answer is going to be. But as you start to predict how 25 can be, that's one of the things that, you know, if you're going to have a little downside risk, it's associated with that. And so we wanted to be able to introduce that concept into our guidance. And also, as you think about scaling the Conway facility, both with the RTD scan scaling that occurs in the second quarter throughout the rest of the year, we wanted to build that in as well. The important thing is, as you think about 2026, That number doesn't change. It's really about kind of the timing of the ramp and the exit velocity of 25. But once you get to 26, those numbers still hold.

I appreciate that, Chris. And as a follow-up, I believe in your prepared commentary, you said no scale-up costs in the 2026 guidance. Should we think of that as kind of the second canning line and the glass line kind of coming up to speed and reaching – a pretty full run rate as you exit 2025. Did I hear that right?

That's correct. Yeah, everything scales pretty quickly. As we turn that on, it's largely sold out in full by the time we turn it on in the third quarter. So you won't have any scale-up costs in 2026. Thank you.

I'll pass it on.

Thank you. Our next question comes from Todd Brooks of The Benchmark Company. Please go ahead, Todd.

Hey, thanks for taking my questions. First question, and Scott, maybe you can help level set this. There was an outlook for the industry and the switch to kind of extract-driven cold products that we talked about a couple years ago, and we're into a different place with the consumer. We're into a different place from a sea price standpoint. Are your customers kind of iterating and developing products as quickly, kind of that new product development engine that Westrock would be able to help them with? Or as we look at the growth of Conway over the next two years, is this more of a share-taking exercise because you guys are truly an integrated solution for those customers?

Hey, Todd. I believe it's actually a mix to the possible answers that you are throwing out. Number one, we are share-taking because we have a new plant and we've taken a lot of share just from being the new entrant and being an aggressive pricer, et cetera. But the real wins that we've had in 24, which are driving the 25 and 26 numbers, The vast majority of that are new brands to us who are not just coming with one product. They're coming with an RTD product. They're coming with a multi-serve bottle product. RTD, I mean a can or a glass bottle. They're coming with multi-serve bottles. We've got the same customers coming in for roast and ground and single serve. I would say that prior to the Conway kickoff here in the last four or five months, we probably had a very small count-em-on-both-hands number of integrated customers, and that would have been single-serve and maybe roast and ground. At this juncture, the biggest brands in the world have all come down to go through Conway, and we have picked up sales in single-serve. We've literally filled all of our single-serve plants, added machines, filled them, and have ordered new machines. All of that has come from RTD brands that came in when they wanted us to start to develop various liquid products for them. So that is really where we've seen our growth, and that's really where our expertise helps set us apart, and it's where we're winning in the market right now.

That's great. My follow-up, and I'll jump back in after this one, but Scott, you've always talked about the answer is yes for the customer. And when we talked about Conway and the capacity being taken up, the concept that these were mostly take or pay type of contracts, I assume there was one set of realization that was based on it given the environment a couple years ago versus where we are now. But how is take or pay working with these partners or the relationships coming in at a different level or a different scale that we should we should think about just kind of the holistic value of a customer versus holding them to some sort of take or pay if they're not commercializing as quickly as the contract was speculated.

Yeah, no, it's a great question. It's one we've wrestled with, and I think we dealt with it a good bit on the third quarter call, which seems a lifetime ago at this point. What we've done is basically we've just tried to follow the do-right rule, right, which is, if a customer comes to you and they're trying to move over and they have issues and they need you to move your calendar out, et cetera, or our best case is where they come in and they say, we need you to go faster. We've actually had enough customers that were coming in saying, we need to go faster, that the ones who said we need to go slower kind of all washed out in the puts and takes of that. And it's why, It's why that we get to the run rate in 26, which is the full ramp up of all of that activity. 130 to 150 million of EBITDA. And that means we don't have to sell anything else. That's what we've already sold. So right now we're working on the next $100 million of EBITDA. And we're trying to find places for people to fold in and get into the flow and get the equipment in to deliver for them. And we're working on the $150 to $300 million EBITDA run rate right now with our customers, not the $150. That's just got to go through the machine.

Thanks, Scott. Thank you. Our next question comes from Bill Chappelle of Truist Securities. Your question, please, Bill.

Yeah, thanks. Good afternoon. I guess two questions. Maybe a little more color in kind of how you're reflecting the higher green coffee costs into your kind of projections, and is it hitting both Conway and S&T in terms of volumes? And then with that, how does it flow through? Because I think a lot of the coffee companies, green coffee costs have spiked, but they have the hedges, so they don't expect to pass off the full brunt for at least a few months. So are you expecting a greater drop-off in kind of customer volumes as we move to the back half? Just any more color and kind of how you're factoring that into the guidance would be great.

Yeah, that's exactly the way that we think about it. I think if you think about the coffee that's going through the system today is coffee that was purchased six months ago. And so the higher coffee costs that you're seeing in the headlines, that's something that's going to flow through the system in the back half of the year. And so the potential for higher for higher coffee costs impacting consumer demand because our customers push price through, you're going to see that in the back half of the year if it happens at all. If you listen to some of the commentary, a lot of folks say that they've got hedges, they've got their own plans in place in order to be able to hold price constant or steady for as long as they can. And if they do that, then that's great. But having gone through an inflationary period where people took price, We wanted to be a little bit conservative in the back part of the year as we think about what impact that could have. And then in terms of the products that you'd see that in, it's going to be really in the heavy coffee products. Think about roasting ground coffee, some single serve. That's where you'd see it impact the business most if it happens at all.

Okay. And then maybe just follow up with that. When you look at your change in guidance for this year versus the preliminary, what percentage or what amount is from the higher coffee prices and how much is from the higher kind of startup or kind of expansion, I guess, you know, rollout of Conway?

It's overweighted to just conservatism around the startup. I mean, we know that, you know, from a first quarter perspective, we spent a lot of time on the commercialization and qualification of products. We know that, like Scott said, in three weeks as we hit the second quarter, that the volume ramp is pretty steady and pretty high. pretty steep. And so really it's mostly around being able to insert, include some conservatism around, you know, what's the slope of that and our expectations around delivering and the timing of that. So it's mostly around that part of it. I mean, I don't know if it's half and half, but I would think about it somewhere in terms of that kind of split.

Okay. And then actually one follow-up, I understand you're working with customers on Conway and speeding up and slowing down and stuff like that. Is Is there a time this year where that's largely behind us, like things are locked and loaded and you have very high visibility in terms of what's going through the system? Yeah, now that is another great question. And it's the reason we broke out our guidance in the first half, second half. So we will really have, I think, As we exit the second quarter and enter the third, we're going to have great visibility into the step function volume list that we have slated to come into the plant. But we broke the guidance out in half so that you could see it because we were like, if that happens in the second quarter, early third, we won't be able to report that to you till the end of the year. And so we wanted to give you an annual guidance with the component for the first half so that you could see clearly where that step function change comes along. And then if we can hit our guidance in the first half, by the time we report the second quarter, we'll be able to tell you are the volumes in for the third quarter that we use to build our forecast for the year. And I think that's a great place to check in. And I fully expect that that's where we'll have the visibility you're looking for. Great. Thanks so much, LeCuller. You bet. Thank you all.

Thank you. I would now like to turn the conference back to Scott Ford for closing remarks. Sir?

Well, again, a quick thanks to everybody for all the work that you do to help us get our story out. We think it is an interesting story. We are, as I said in the prepared remarks, we got a little behind in the building customer sign-up, but we are back ahead of schedule on onboarding. The team has done a fabulous job from commercialization, product development, getting all of the various approvals and regulatory checks in. And the team has done a fabulous job. My heart and soul of thanks goes out to everybody that has made this true. And I look forward to reporting to you on the next quarter where we should have a good bit more visibility into the back half of the year and what we would then be thinking about doing with our balance sheet as we go to the end of the year as these numbers are in line because it gives us all sorts of interesting options. that create value and we look forward to update you next quarter on that so thanks very much for your time this concludes today's conference call thank you for participating you may now disconnect