Westrock Coffee Company

Hello and welcome to West Rock Coffee Company's first quarter 2025 earnings conference call. My name is Howard and I'll be your coordinator your call today. Following prepared remarks, we will open the call to your questions with instructions to be given at that time. I will now hand the call over to Robert Munger with West Rock Coffee.

Thank you and welcome to West Rock Coffee Company's first quarter 2025 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 first 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 the forward-looking statements made today. Also, discussions during the call will use some non-GAAP financial measures as we describe business performance. The SEC filing, 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. Good afternoon, everyone. Thanks for joining us today. I'm happy to share with you that in the first quarter of 25, we continued to make great strides towards our goal of becoming the premier integrated strategic supplier to the preeminent coffee, tea, and energy beverage brands globally. We ended the first quarter with the combination of our beverage solutions and SS&T segment adjusted EBITDAs of $11.5 million, up 3.3% over the prior year, in line with our expectations and our previous guidance of essentially flat for the first quarter of 2025. With the first quarter behind us and now halfway through the second quarter, we're pleased to be able to reaffirm our guidance for both the first half of the year and for the entire year of 2025. When added together, the combination of our beverage solutions segment-adjusted EBITDA and SS&T segment-adjusted EBITDA should total between $27.5 and $34 million for the first half of the year, an increase of roughly 25% over the prior year, and track to be between $75 and $88 million for the full year 25, up roughly 35% over 24. There are a number of significant factors that create this performance, and while not detracting from the many fantastic accomplishments and goals yet to be achieved in cost controls, systems development, and new customer and product wins, the single most important element driving this performance is the commercial launch of our two new Conway Arkansas manufacturing facilities. The often mentioned country's largest roast to extract to RTD facility is literally leaping to life in front of our eyes as we have begun commercial quantity production runs for many of our new customers in this facility in the past 45 days. It has not been without its challenges. It is a feat everyone else in the industry seemed to have walked away from rather than attempting. But we meet daily on the punch list of activities we must deliver on as a team. And at this point, that list is now short, manageable, and we are highly confident we will attain our deliverables. My respect for this team is immense as I watch them daily perform Herculean tasks with grace and grit. At the exact same time as the Conway RTD facility went commercial, we also launched our second single serve cup manufacturing facility in part of the new Conway distribution center complex. Fortunately, this startup of this plant has gone seamlessly as we have over 200 people that work in our original single serve plant just 20 minutes down the road that we have tapped into for insights, staffing help, and startup workload sharing. As always, my gratitude goes out to this tremendously talented team as well. Together, these facilities encompass over a million square feet and 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 remain convinced that consumer-driven shifts taking place in the coffee and related beverage market are going to create immense return opportunities for a few companies while stagnating others, and that our customer base positions us as one of the very few companies globally who have the technological expertise and breadth of product offerings to deliver on this type of industry-altering strategic plan. By becoming the lead innovation and development partner, dependable and sustainable sourcing resource, and low-cost processing and packaging outsourcer for the world's leading beverage brands, we enabled them to capitalize on their brand equity positions through the transition of their product portfolio in step with the movements of their end consumers. So as we speak today and as referenced on our last call, we are now bringing a second can line online in the third quarter of this year. and have a third can line now onsite and ready to install as demand continues to ramp. Our retail packaging capacity in North Carolina, which was only recently doubled, is now up for another 50% expansion, and our new single-serve plant in Conway is about to undergo another 100% capacity extension. Simply to meet the demand these iconic brands have brought to us across our product portfolio over just 24 and early 25. These are examples of growth brought about from our delivery of the leading integrated platform in the category, progress that in turn grows the value of our services to our customers, enhances our teammates' careers, manifests our pricing power on the ground daily for smallholder farmers in the developing world, and rewards our shareholders who entrusted us with their money with every expectation of a handsome return. These are important things and worthy of our greatest efforts. I want to thank everybody on the team for a miraculous quarter and for all the work you're doing now going into what will be the largest back half of the year from a production and earnings perspective in the company's history. With that, I'm going to turn the call over to Chris Pledger, our CFO, and I'll rejoin you shortly for questions. Thank you.