The following is a summary of the Westrock Coffee Company (WEST) Q3 2024 Earnings Call Transcript:

Financial Performance:

• Westrock Coffee Company reported a third quarter segment adjusted EBITDA increase of 19% year-over-year for Beverage Solutions and 45% for Sustainable Sourcing & Traceability.

• Consolidated adjusted EBITDA was $10.3 million, negatively impacted by nearly $4 million in Conway scale-up operating costs.

• Net sales remained flat at $220.9 million compared to the third quarter of 2023, while consolidated gross profit grew by 5.8%.

Business Progress:

• The company is set to see major increases in EBITDA from the Conway facility, starting operations in early 2025, expected to significantly enhance earnings power.

• Established contracts for the Conway facility are expected to produce more annual EBITDA than the entire current base business.

• Westrock Coffee has new customers and substantial contracts lined up for the new RTD production lines in Conway, set to commence in the first quarter of 2025.

Opportunities:

• New contracts and the readiness of the Conway facility for 2025 promise substantial EBITDA contribution, projected between $80 million and $100 million.

• The introduction of new customers in 2025, derived from the hustle in past two years, is expected to substantially increase company revenues and market share, especially with the fully booked new facility.

Risks:

• Delayed start-ups at the Conway facility led to additional operational adjustments and temporary revenue setbacks.

• Managing scale-up costs which could potentially affect profitability margins if not aligned with production and sales ramp-up in 2025.

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