Westrock Coffee Company

Hello and welcome to the West Rock Coffee Company's second quarter 2025 earnings conference call. My name is Therese 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'll now hand the call over to Robert Munger with West Rock Coffee.

Thank you, and welcome to Westrock Coffee Company's second 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 second quarter earnings release issued earlier today. This information is available in the investor relations section at 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 findings of 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. Good afternoon, everyone. Thanks for joining us. We delivered record-breaking second quarter results driven by strong customer demand, improved margin performance, and successful execution across our integrated platform this quarter. These results reflect the strength of our model and the strategic investments we've made in growth. Our progress towards our goal of becoming the premier integrated strategic supplier to the preeminent coffee, tea, and energy beverage brands globally has resulted in record production, record deliveries, and record profits for our business this quarter. We ended the second quarter with the combination of our beverage solutions and SS&T adjusted EVA dops of $23 million, up 100% over the first quarter of this year and up approximately 70% over the same quarter last year. These results bring our first half of the year combined segment adjusted EBITDA to $34.5 million, up approximately 40% over the prior year at the high end of our guidance rate. As we explained on our first quarter call, the beginning of commercial operations at the new single-serve cup plant, along with production ramp-up at the extract and RTD plant in Conway, Arkansas, combined with cost controls across our entire business and process, data intelligence, and risk mitigation insights brought about through our now two-year-old relationship with Palantir were the key drivers of this quarter's earnings beat. To provide you a bit of context, but without getting into competitive sensitive details, our new extract and RTD facility saw a five-fold increase in sales from our main production line in the quarter and is on track for the third quarter to be up another four-fold. It has not been without its challenges. We got off to a much slower volume start than we originally anticipated. Our startup cost exceeded our plan, and it was as difficult as our most ardent critics intimated. However, our primary liquid product volumes are now approaching planned levels, and we're closing in on our budgeted unit economics. The Conway plant team members continue to persevere with an unprecedented grit and determination. Our knowledge base grows daily, and we have line of sight to being fully caught up with all of our customers over the next 60 to 90 days. I am so proud of this team. They are now just weeks away from pulling off what many said was impossible. To lesser fanfare, but at the same time, as the Conway RTD facility went into commercial production, we also launched our second single serve cup manufacturing facility in another part of the Conway complex. The startup of this plant has continued to go seamlessly as we moved from 3% of our total manufactured cups being made in this new plant to 25% in just three months. Our combined single-serve plants are now producing 50% more cups monthly than we were just a few short months ago, and we have a number of new customers that we'll be onboarding into this new facility over the next year. As a reminder, together these Conway facilities 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 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 many others. We also believe that our customer base and our vendor partners position 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 enable them to capitalize on their brand equity positions through the transition of their product portfolio in step with the movements of their end consumers. These results from the quarter demonstrate examples of growth brought about from our delivery as the leading integrated platform in the category. Progress then in turn enhances the value of our services to our customers, contributes to the growth of the careers of our teammates, manifests our pricing power on the ground daily for the benefit of smallholder farmers in the developing world, and rewards our shareholders. These are important things, and they continue to be worthy of all of our greatest efforts. Our combined results, while different in mix versus our original thoughts, blended together in such a way this quarter that we were able to generate record results and are now again able to affirm our previous guidance for the back half and for the full year 2025. With that good news, I'll turn the call over to Chris Pledger, our CFO, and rejoin you in a few moments for questions.