Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2022 | Nov. 08, 2022 | |
Document Information | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Sep. 30, 2022 | |
Document Transition Report | false | |
Entity File Number | 001-41485 | |
Entity Registrant Name | WESTROCK COFFEE COMPANY | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 80-0977200 | |
Entity Address, Address Line One | 100 River Bluff Drive, Suite 210 | |
Entity Address, City or Town | Little Rock | |
Entity Address State Or Province | AR | |
Entity Address, Postal Zip Code | 72202 | |
City Area Code | 501 | |
Local Phone Number | 320-4880 | |
Entity Current Reporting Status | No | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | true | |
Entity Ex Transition Period | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 73,033,991 | |
Entity Central Index Key | 0001806347 | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2022 | |
Document Fiscal Period Focus | Q3 | |
Amendment Flag | false | |
Common Stock | ||
Document Information | ||
Title of 12(b) Security | Shares of common stock, par value $0.01 per share | |
Trading Symbol | WEST | |
Security Exchange Name | NASDAQ | |
Public Warrants | ||
Document Information | ||
Title of 12(b) Security | Warrants, each whole warrant exercisable for one share of common stock, par value $0.01 per share | |
Trading Symbol | WESTW | |
Security Exchange Name | NASDAQ |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
ASSETS | ||
Cash and cash equivalents | $ 90,984 | $ 19,344 |
Restricted cash | 4,562 | 3,526 |
Accounts receivable, net of allowance for credit losses of $2,747 and $3,749, respectively | 98,380 | 85,795 |
Inventories | 162,245 | 109,166 |
Derivative assets | 13,696 | 13,765 |
Prepaid expenses and other current assets | 10,238 | 6,410 |
Total current assets | 380,105 | 238,006 |
Property, plant and equipment, net | 134,131 | 127,613 |
Goodwill | 97,053 | 97,053 |
Intangible assets, net | 120,949 | 125,914 |
Other long-term assets | 17,850 | 4,434 |
Total Assets | 750,088 | 593,020 |
LIABILITIES, CONVERTIBLE PREFERRED SHARES, REDEEMABLE UNITS, AND SHAREHOLDERS' EQUITY (DEFICIT) | ||
Current maturities of long-term debt | 12,011 | 8,735 |
Short-term debt | 61,806 | 4,510 |
Short-term related party debt | 34,199 | |
Accounts payable | 110,651 | 80,405 |
Derivative liabilities | 5,357 | 14,021 |
Accrued expenses and other current liabilities | 36,569 | 26,370 |
Total current liabilities | 226,394 | 168,240 |
Long-term debt, net | 164,671 | 277,064 |
Subordinated related party debt | 13,300 | |
Deferred income taxes | 16,326 | 25,515 |
Warrant liabilities | 32,333 | |
Other long-term liabilities | 11,217 | 3,028 |
Total liabilities | 450,941 | 487,147 |
Commitments and contingencies (Note 19) | ||
Shareholders' Equity (Deficit)(1) | ||
Preferred stock, $0.01 par value, 26,000 shares authorized, no shares issued and outstanding | ||
Common stock: $0.01 par value 300,000 shares authorized; 73,034 shares issued and outstanding at September 30, 2022; $0.00 par value 39,389 shares authorized; 34,523 shares issued and outstanding at December 31, 2021 | 730 | 345 |
Additional paid-in-capital | 316,537 | 60,628 |
Accumulated deficit | (296,442) | (251,725) |
Accumulated other comprehensive income | 1,923 | 12,018 |
Total shareholders' equity (deficit) attributable to Westrock Coffee Company | 22,748 | (178,734) |
Noncontrolling interest | 2,779 | 2,736 |
Total shareholders' equity (deficit) | 25,527 | (175,998) |
Total Liabilities, Convertible Preferred Shares, Redeemable Units and Shareholders' Equity (Deficit) | 750,088 | 593,020 |
Series A Convertible Preferred Shares [Member] | ||
LIABILITIES, CONVERTIBLE PREFERRED SHARES, REDEEMABLE UNITS, AND SHAREHOLDERS' EQUITY (DEFICIT) | ||
Redeemable Common Equivalent Preferred Units | $ 273,620 | |
Series A Redeemable Common Equivalent Preferred Shares | ||
LIABILITIES, CONVERTIBLE PREFERRED SHARES, REDEEMABLE UNITS, AND SHAREHOLDERS' EQUITY (DEFICIT) | ||
Redeemable Common Equivalent Preferred Units | 264,729 | |
Series B Redeemable Common Equivalent Preferred Shares | ||
LIABILITIES, CONVERTIBLE PREFERRED SHARES, REDEEMABLE UNITS, AND SHAREHOLDERS' EQUITY (DEFICIT) | ||
Redeemable Common Equivalent Preferred Units | $ 17,142 |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) | Sep. 30, 2022 | Dec. 31, 2021 |
Allowance for credit loss | $ 2,747,000 | $ 3,749,000 |
Preferred Stock, Par Value | $ 0.01 | $ 0.01 |
Preferred Stock, Authorized (in shares) | 26,000,000 | 26,000,000 |
Preferred Stock, Shares Issued (in shares) | 0 | 0 |
Preferred Stock, Shares outstanding (in shares) | 0 | 0 |
Common stock, Par Value (in dollars per shares) | $ 0.01 | $ 0 |
Common stock, Shares Authorized (In shares) | 300,000,000 | 39,389,000 |
Common stock, Shares Issued (In shares) | 73,034,000 | 34,523,000 |
Common stock, Shares Outstanding (In shares) | 73,034,000 | 34,523,000 |
Series A Convertible Preferred Shares [Member] | ||
Redeemable Common Preferred Shares, Par Value (in dollars per share) | $ 0.01 | $ 0.01 |
Redeemable Common Preferred Shares Authorized (in shares) | 24,000,000 | 24,000,000 |
Redeemable Common Preferred Shares Issued (in shares) | 23,587,952 | 23,588,000 |
Redeemable Common Preferred Shares Outstanding (in shares) | 23,588,000 | 23,588,000 |
Temporary Equity, Liquidation Preference | $ 11,500 | |
Series A Redeemable Common Equivalent Preferred Shares | ||
Redeemable Common Preferred Shares, Par Value (in dollars per share) | $ 0 | $ 0 |
Redeemable Common Preferred Shares Authorized (in shares) | 222,150,000 | 222,150,000 |
Redeemable Common Preferred Shares Issued (in shares) | 0 | 222,150,000 |
Redeemable Common Preferred Shares Outstanding (in shares) | 0 | 222,150,000 |
Series B Redeemable Common Equivalent Preferred Shares | ||
Redeemable Common Preferred Shares, Par Value (in dollars per share) | $ 0 | $ 0 |
Redeemable Common Preferred Shares Authorized (in shares) | 17,000,000 | 17,000,000 |
Redeemable Common Preferred Shares Issued (in shares) | 0 | 17,000,000 |
Redeemable Common Preferred Shares Outstanding (in shares) | 0 | 17,000,000 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS | ||||
Net sales | $ 230,308 | $ 181,277 | $ 640,149 | $ 507,752 |
Costs of sales | 189,169 | 142,993 | 521,681 | 401,980 |
Gross profit | 41,139 | 38,284 | 118,468 | 105,772 |
Selling, general and administrative expense | 31,223 | 32,803 | 101,332 | 96,309 |
Acquisition, restructuring and integration expense | 3,959 | 1,829 | 8,746 | 3,772 |
Loss (gain) on disposal of property, plant and equipment | 459 | (390) | 748 | (147) |
Total operating expenses | 35,641 | 34,242 | 110,826 | 99,934 |
Income from operations | 5,498 | 4,042 | 7,642 | 5,838 |
Interest expense | 13,404 | 8,614 | 30,265 | 24,283 |
Change in fair value of warrant liabilities | 5,215 | 5,215 | ||
Other, net | 325 | 114 | (785) | (124) |
Loss before income taxes | (13,446) | (4,686) | (27,053) | (18,321) |
Income tax benefit | (428) | (796) | (3,511) | (2,239) |
Net loss | (13,018) | (3,890) | (23,542) | (16,082) |
Net (loss) income attributable to non-controlling interest | (22) | 97 | 43 | 433 |
Net loss attributable to shareholders | (12,996) | (3,987) | (23,585) | (16,515) |
Loss on extinguishment of Redeemable Common Equivalent Preferred Units, net | (2,870) | (2,870) | ||
Common equivalent preferred dividends | (4,380) | (4,380) | ||
Accumulating preferred dividends | (6,109) | (13,882) | (17,957) | |
Net loss attributable to common shareholders | $ (20,246) | $ (10,096) | $ (44,717) | $ (34,472) |
Loss per common share(1): | ||||
Basic (in dollars per unit) | $ (0.41) | $ (0.29) | $ (1.12) | $ (1) |
Diluted (in dollars per unit) | $ (0.41) | $ (0.29) | $ (1.12) | $ (1) |
Weighted-average number of shares outstanding(1) | ||||
Basic (in units) | 49,795 | 34,523 | 39,819 | 34,455 |
Diluted (in units) | 49,795 | 34,523 | 39,819 | 34,455 |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) | ||||
Net loss | $ (13,018) | $ (3,890) | $ (23,542) | $ (16,082) |
Other comprehensive income (loss), net of tax: | ||||
Unrealized (loss) gain on derivative instruments | (2,802) | 2,372 | (10,087) | 5,882 |
Foreign currency translation adjustment | 1 | 67 | (8) | 2 |
Total other comprehensive (loss) income | (2,801) | 2,439 | (10,095) | 5,884 |
Comprehensive loss | (15,819) | (1,451) | (33,637) | (10,198) |
Comprehensive (loss) income attributable to non-controlling interests | (22) | 97 | 43 | 433 |
Comprehensive loss attributable to shareholders | (15,797) | (1,548) | (33,680) | (10,631) |
Loss on extinguishment of Redeemable Common Equivalent Preferred Units, net | (2,870) | (2,870) | ||
Common equivalent preferred dividends | (4,380) | (4,380) | ||
Accumulating preferred dividends | (6,109) | (13,882) | (17,957) | |
Comprehensive loss attributable to common shareholders | $ (23,047) | $ (7,657) | $ (54,812) | $ (28,588) |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY (DEFICIT) - USD ($) shares in Thousands, $ in Thousands | Common Stock | Additional Paid-in Capital | Accumulated Deficit | Accumulated Other Comprehensive Income | Non-Controlling Interest | Total |
Balance at beginning of period at Dec. 31, 2020 | $ 342 | $ 59,570 | $ (205,570) | $ 3,820 | $ 2,097 | $ (139,741) |
Balance at the beginning (in shares) at Dec. 31, 2020 | 34,202 | |||||
Net income (loss) | (16,515) | 433 | (16,082) | |||
Other comprehensive income (loss) | 5,884 | 5,884 | ||||
Equity-based compensation | $ 3 | 915 | 918 | |||
Equity-based compensation (in shares) | 321 | |||||
Net unit settlement | (162) | (162) | ||||
Accumulating preferred dividends | (17,957) | (17,957) | ||||
Balance at end of period at Sep. 30, 2021 | $ 345 | 60,323 | (240,042) | 9,704 | 2,530 | (167,140) |
Balance at the end (in shares) at Sep. 30, 2021 | 34,523 | |||||
Balance at beginning of period at Jun. 30, 2021 | $ 345 | 60,017 | (229,946) | 7,265 | 2,433 | (159,886) |
Balance at the beginning (in shares) at Jun. 30, 2021 | 34,523 | |||||
Net income (loss) | (3,987) | 97 | (3,890) | |||
Other comprehensive income (loss) | 2,439 | 2,439 | ||||
Equity-based compensation | 306 | 306 | ||||
Accumulating preferred dividends | (6,109) | (6,109) | ||||
Balance at end of period at Sep. 30, 2021 | $ 345 | 60,323 | (240,042) | 9,704 | 2,530 | (167,140) |
Balance at the end (in shares) at Sep. 30, 2021 | 34,523 | |||||
Balance at beginning of period at Dec. 31, 2021 | $ 345 | 60,628 | (251,725) | 12,018 | 2,736 | (175,998) |
Balance at the beginning (in shares) at Dec. 31, 2021 | 34,523 | |||||
Net income (loss) | (23,585) | 43 | (23,542) | |||
Issuance of common shares upon closing of de-SPAC merger transaction, net of issuance costs | $ 129 | 805 | 934 | |||
Issuance of common shares upon closing of de-SPAC merger transaction, net of issuance costs (Units) | 12,868 | |||||
Issuance of common shares related to PIPE financing | $ 206 | 205,694 | 205,900 | |||
Issuance of common shares related to PIPE financing (in units) | 20,590 | |||||
Issuance of common shares related to conversion of debt to equity | $ 25 | 24,975 | 25,000 | |||
Issuance of common shares related to conversion of debt to equity (in units) | 2,500 | |||||
Issuance of common shares related to conversion of Common Equivalent Preferred Units (see Note 4) | $ 22 | 23,731 | 23,753 | |||
Issuance of common shares related to conversion of Common Equivalent Preferred Units (see Note 4) (in units) | 2,220 | |||||
Common Equivalent Preferred Unit Dividends | (4,380) | (4,380) | ||||
Loss on extinguishment of Common Equivalent Preferred Units | (2,870) | (2,870) | ||||
Other comprehensive income (loss) | (10,095) | (10,095) | ||||
Equity-based compensation | $ 3 | 1,181 | 1,184 | |||
Equity-based compensation (in shares) | 333 | |||||
Net unit settlement | (477) | (477) | ||||
Accumulating preferred dividends | (13,882) | (13,882) | ||||
Balance at end of period at Sep. 30, 2022 | $ 730 | 316,537 | (296,442) | 1,923 | 2,779 | 25,527 |
Balance at the end (in shares) at Sep. 30, 2022 | 73,034 | |||||
Balance at beginning of period at Jun. 30, 2022 | $ 348 | 60,627 | (276,196) | 4,724 | 2,801 | (207,696) |
Balance at the beginning (in shares) at Jun. 30, 2022 | 34,856 | |||||
Net income (loss) | (12,996) | (22) | (13,018) | |||
Issuance of common shares upon closing of de-SPAC merger transaction, net of issuance costs | $ 129 | 805 | 934 | |||
Issuance of common shares upon closing of de-SPAC merger transaction, net of issuance costs (Units) | 12,868 | |||||
Issuance of common shares related to PIPE financing | $ 206 | 205,694 | 205,900 | |||
Issuance of common shares related to PIPE financing (in units) | 20,590 | |||||
Issuance of common shares related to conversion of debt to equity | $ 25 | 24,975 | 25,000 | |||
Issuance of common shares related to conversion of debt to equity (in units) | 2,500 | |||||
Issuance of common shares related to conversion of Common Equivalent Preferred Units (see Note 4) | $ 22 | 23,731 | 23,753 | |||
Issuance of common shares related to conversion of Common Equivalent Preferred Units (see Note 4) (in units) | 2,220 | |||||
Common Equivalent Preferred Unit Dividends | (4,380) | (4,380) | ||||
Loss on extinguishment of Common Equivalent Preferred Units | (2,870) | (2,870) | ||||
Other comprehensive income (loss) | (2,801) | (2,801) | ||||
Equity-based compensation | 705 | 705 | ||||
Balance at end of period at Sep. 30, 2022 | $ 730 | $ 316,537 | $ (296,442) | $ 1,923 | $ 2,779 | $ 25,527 |
Balance at the end (in shares) at Sep. 30, 2022 | 73,034 |
CONDENSED CONSOLIDATED STATEM_4
CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY (DEFICIT) (Parenthetical) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended |
Sep. 30, 2022 | Sep. 30, 2022 | |
CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY (DEFICIT) | ||
Common equivalent preferred dividends ($0.02 per unit) | $ 0.02 | $ 0.02 |
Net issuance cost, taxes | $ 2,469 | $ 2,469 |
CONDENSED CONSOLIDATED STATEM_5
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2022 | Sep. 30, 2021 | |
Cash flows from operating activities: | ||
Net loss | $ (23,542) | $ (16,082) |
Adjustments to reconcile net loss to net cash provided by (used in) operating activities: | ||
Depreciation and amortization | 17,782 | 18,386 |
Equity-based compensation | 1,184 | 918 |
Paid-in-kind interest added to debt principal | 295 | 1,452 |
Provision for credit losses | 1,286 | 119 |
Amortization of deferred financing fees included in interest expense | 1,350 | 1,361 |
Write-off of unamortized deferred financing fees | 4,296 | |
Loss on debt extinguishment | 1,580 | |
Loss (gain) on disposal of property, plant and equipment | 748 | (147) |
Mark-to-market adjustments | 793 | (1,979) |
Change in fair value of warrant liabilities | 5,215 | |
Foreign currency transactions | 355 | 190 |
Deferred income tax (benefit) expense | (3,511) | (2,239) |
Change in operating assets and liabilities: | ||
Accounts receivable | (13,891) | (16,622) |
Inventories | (61,180) | (20,548) |
Derivative assets and liabilities | (14,661) | 8,512 |
Prepaid expense and other assets | (14,944) | (1,301) |
Accounts payable | 29,834 | 16,931 |
Accrued liabilities and other | 7,477 | 2,867 |
Net cash used in operating activities | (59,534) | (8,182) |
Cash flows from investing activities: | ||
Additions to property, plant and equipment | (22,966) | (12,545) |
Additions to intangible assets | (135) | (244) |
Proceeds from sale of property, plant and equipment | 3,300 | 1,060 |
Net cash used in investing activities | (19,801) | (11,729) |
Cash flows from financing activities: | ||
Payments on debt | (407,384) | (74,881) |
Proceeds from debt | 319,100 | 90,980 |
Proceeds from related party debt | 11,700 | |
Debt extinguishment costs | (1,580) | |
Payment of debt issuance costs | (6,007) | (597) |
Proceeds from de-SPAC merger and PIPE financing | 255,737 | |
Payment of common equity issuance costs | (24,220) | |
Payment of preferred equity issuance costs | (1,250) | |
Net proceeds from repurchase agreements | 10,951 | |
Common equivalent preferred dividends | (4,380) | |
Net unit settlement | (477) | (162) |
Net cash provided by financing activities | 152,190 | 15,340 |
Effect of exchange rate changes on cash | (179) | 113 |
Net increase (decrease) in cash and cash equivalents and restricted cash | 72,676 | (4,458) |
Cash and cash equivalents and restricted cash at beginning of period | 22,870 | 18,652 |
Cash and cash equivalents and restricted cash at end of period | 95,546 | 14,194 |
Supplemental non-cash investing and financing activities: | ||
Property, plant and equipment acquired but not yet paid | 596 | |
Accumulating preferred dividends | 13,882 | $ 17,957 |
Exchange of Redeemable Common Equivalent Preferred Units for Series A Convertible Preferred Shares | 271,539 | |
Exchange of Redeemable Common Equivalent Preferred Units for common shares | 24,214 | |
Related party debt exchanged for common shares | 25,000 | |
Loss on extinguishment of Common Equivalent Preferred Units | $ 2,870 |
CONDENSED CONSOLIDATED STATEM_6
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Parenthetical) - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 | Sep. 30, 2021 | Dec. 31, 2020 |
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS | ||||
Cash and cash equivalents | $ 90,984 | $ 19,344 | $ 12,596 | |
Restricted cash | 4,562 | 3,526 | 1,598 | |
Total | $ 95,546 | $ 22,870 | $ 14,194 | $ 18,652 |
Organization and Description of
Organization and Description of Business | 9 Months Ended |
Sep. 30, 2022 | |
Organization and Description of Business | |
Organization and Description of Business | Note 1. Organization and Description of Business Westrock Coffee Company, a Delaware corporation (the “Company,” “Westrock,” “we,” “us,” or “our”), is a leading integrated coffee, tea, flavors, extracts, and ingredients solutions provider in the United States, providing coffee sourcing, supply chain management, product development, roasting, packaging, and distribution services to the retail, food service and restaurant, convenience store and travel center, non-commercial account, CPG, and hospitality industries around the world. The Company has an 85% ownership interest in Falcon Coffees Limited, which operates our trading business and is reported within our Sustainable Sourcing & Traceability segment. Equity interests not owned by us are reflected as non-controlling interests. In the Condensed Consolidated Statements of Operations, we allocate net income (loss) attributable to non-controlling interest to arrive at net income (loss) attributable to common shareholders based on their proportionate share. The Company operates seven manufacturing facilities, three of which are located in Concord, North Carolina, two in North Little Rock, Arkansas, one in Kigali, Rwanda, and one in Johor Bahru, Malaysia. On August 26, 2022 (the “Closing Date”), pursuant to the terms of the Transaction Agreement, dated April 4, 2022, by and among the Company, Riverview Acquisition Corp., a special purpose acquisition vehicle and a Delaware corporation (“Riverview”), Origin Merger Sub I, Inc. (“Merger Sub I”), and Origin Merger Sub II, LLC (“Merger Sub II”) (as amended, modified or supplemented, the “Transaction Agreement”), the Company completed its de-SPAC merger transaction with Riverview (the “Transaction”). In connection with the closing of the Transaction (the “Closing”), the Company converted from a Delaware limited liability company to a Delaware corporation (the “Conversion”) and changed its corporate name from “Westrock Coffee Holdings, LLC” (the “Converting Company”) to “Westrock Coffee Company.” Pursuant to the Transaction Agreement, Merger Sub I merged with and into Riverview, with Riverview surviving the merger as a direct wholly owned subsidiary of Westrock (such merger, the “SPAC Merger”) and immediately following the consummation of the SPAC Merger, Riverview merged with and into Merger Sub II, with Merger Sub II surviving the merger as a direct wholly owned subsidiary of Westrock (the “LLC Merger”, and together with the SPAC Merger, the “Mergers”). See Note 4 for additional disclosures related to the Transaction. |
Basis of Presentation and Conso
Basis of Presentation and Consolidation | 9 Months Ended |
Sep. 30, 2022 | |
Basis of Presentation and Consolidation | |
Basis of Presentation and Consolidation | Note 2. Basis of Presentation and Consolidation The accompanying Condensed Consolidated Financial Statements have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) using the U.S. dollar as the reporting currency. They do not include all the information and footnotes required by GAAP for complete financial statements. The Condensed Consolidated Financial Statements include the activities of the Company and its wholly owned and/or controlled subsidiaries. All intercompany balances and transactions have been eliminated. The Condensed Consolidated Balance Sheet as of December 31, 2021 was derived from the audited financial statements, but does not include all disclosures required by GAAP. The interim financial information is unaudited but, in the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for fair statement of results for the interim periods have been included. Operating results from any interim period are not necessarily indicative of the results that may be expected for the full fiscal year. The Condensed Consolidated Financial Statements and related notes should be read in conjunction with the audited December 31, 2021 consolidated financial statements and notes thereto included in our Registration Statement on Form S-1 filed with the U.S. Securities and Exchange Commission (“SEC”) on September 20, 2022. Accordingly, certain significant accounting policies and other disclosures normally provided have been omitted from the accompanying Condensed Consolidated Financial Statements and related notes since such items are disclosed in our audited financial statements. Use of Estimates The preparation of consolidated financial statements in conformity with GAAP requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities, revenue and expenses, and related disclosures of contingent assets and liabilities in the consolidated financial statements and accompanying notes. On an ongoing basis, we evaluate our estimates, including those related to the allowance for credit losses, useful lives of property, equipment, incremental borrowing rates for lease liability measurement, fair values of forward purchase and sales contracts, green coffee associated with forward contracts, and warrant liabilities, share-based compensation, contingencies, and income taxes, among others. We base our estimates on historical experience and on various other assumptions that we believe to be reasonable, the results of which form the basis for making judgments about the carrying values of assets and liabilities. Actual results could differ from our estimates. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 9 Months Ended |
Sep. 30, 2022 | |
Summary of Significant Accounting Policies | |
Summary of Significant Accounting Policies | Note 3. Summary of Significant Accounting Policies Accounts Receivable and Allowance for Credit Losses Accounts receivable consists principally of amounts billed and currently due from customers and are generally unsecured and due within 30 to 60 days. A portion of our accounts receivable is not expected to be collected due to non-payment, bankruptcies and deductions. Our accounting policy for the allowance for credit losses requires us to reserve an amount based on the evaluation of the aging of accounts receivable, detailed analysis of high-risk customers’ accounts, and the overall market and economic conditions of our customers. This evaluation considers the customer demographic, such as large commercial customers as compared to small businesses or individual customers. We consider our accounts receivable delinquent or past due based on payment terms established with each customer. Accounts receivable are written off when the account is determined to be uncollectible. Activity in the allowance for credit losses was as follows: Three Months Ended September 30, Nine Months Ended September 30, (Thousands) 2022 2021 2022 2021 Balance at beginning of period $ 2,392 $ 3,666 $ 3,749 $ 3,977 Charged to selling, general and administrative expense 364 19 1,286 119 Write-offs (9) (119) (2,288) (530) Total $ 2,747 $ 3,566 $ 2,747 $ 3,566 Inventories Green coffee associated with our forward contracts is recorded at net realizable value, which approximates market price, within our Sustainable Sourcing & Traceability segment, consistent with our forward purchase contracts recorded at fair value in accordance with Accounting Standards Codification (“ASC”) 815, Derivatives and Hedging (“ASC 815”). Green coffee is a commodity with quoted market prices in active markets, may be sold without significant further processing, has predictable and insignificant disposal costs and is available for immediate delivery. We estimate the fair value of green coffee based on the quoted market price at the end of each reporting period, with changes in fair value being reported as a component of costs of sales in our Condensed Consolidated Statements of Operations. For the three and nine months ended September 30, 2022, we recognized million, respectively, of unrealized losses on green coffee inventory associated with our forward sales and purchase contracts. For the three and nine months ended September 30, 2021, we recognized Warrant Liabilities We account for warrants assumed in connection with the Transaction (see Note 4) in accordance with the guidance contained in ASC 815, under which the warrants do not meet the criteria for equity treatment and must be recorded as liabilities. Accordingly, we classify the warrants as liabilities at their fair value and adjust the warrants to fair value at each reporting period. This liability is subject to re-measurement at each balance sheet date until exercised, and any change in fair value is recognized in our statement of operations. The Company remeasures the fair value of the Public Warrants (as defined in Note 4) based on the quoted market price of the Public Warrants. The Private Warrants (as defined in Note 4) are valued using a binomial lattice valuation model. For the three and nine months ended September 30, 2022, the Company recognized $5.2 million of losses related to the change in fair value of warrant liabilities. Recently issued accounting pronouncements Update ASU 2016-02 – Leases (Topic 842) and Update ASU 2018-10 – Codification Improvements to Topic 842, Leases Effective January 1, 2022, we account for leases in accordance with ASC 842, Leases (“ASC 842”). The standard establishes a right-of-use (ROU) model that requires a lessee to recognize a ROU asset and lease liability on the balance sheet for all leases with a term longer than 12 months. Leases will be classified as finance or operating, with classification affecting the pattern and classification of expense recognition in the statement of operations. We adopted ASC 842 using a modified retrospective transition approach as permitted by the amendments of ASU 2018-11 Leases (Topic 842): Target Improvements , which provides an alternative modified retrospective transition method. As a result, we were not required to adjust our comparative period financial information for effects of the standard or make the new required lease disclosures for periods before the date of adoption (i.e., January 1, 2022). We have elected to adopt the package of transition practical We determine if an arrangement is a lease at contract inception. A lease exists when a contract conveys to the customer the right to control the use of identified property, plant, or equipment for a period of time in exchange for consideration. The definition of a lease embodies two conditions: (i) there is an identified asset in the contract that is land or a depreciable asset, and (ii) the customer has a right to control the use of the identified asset. We enter into lease contracts for manufacturing and production facilities, warehouse facilities, vehicles and machinery and equipment. Upon adoption, we recognized lease liabilities on our Condensed Consolidated Balance Sheets. See Note 10 for additional disclosures related to leases. ROU assets are initially measured at cost, which comprises the initial amount of the lease liability adjusted for lease payments made at or before the lease commencement date, plus any initial direct costs incurred, less any lease incentives received. The lease liabilities are initially measured at the present value of the unpaid lease payments at the lease commencement date. Lease expense, for operating leases, is recognized on a straight-line basis over the lease term. Key estimates and judgements include the following: (i) Discount rate – ASC 842 requires a lessee to discount its unpaid lease payments using the rate implicit in the lease or, if that rate cannot be readily determined, its incremental borrowing rate. As we generally do not know the rate implicit in our leases, we use our incremental borrowing rate, based on the information available at the lease commencement date, in determining the present value of our lease payments. Our incremental borrowing rate for a lease is the rate of interest we would have to pay on a collateralized basis to borrow an amount equal to the lease payments under similar terms. (ii) Lease term – The lease term for all of our leases includes the noncancellable period of the lease plus any additional periods covered by either a lessee option to extend (or not to terminate) the lease that is reasonably certain to be exercised. Variable lease payments associated with our leases are recognized when the event, activity, or circumstance in the lease agreement on which those payments are assessed occurs. Variable lease payments are included in both costs of sales and selling, general and administrative expense in our Condensed Consolidated Statements of Operations. We monitor for events or changes in circumstances that require a reassessment of a lease. When a reassessment results in the remeasurement of a lease liability, a corresponding adjustment is made to the carrying amount of the associated ROU asset, unless doing so would reduce the carrying amount of the ROU asset to an amount less than zero. In that case, the amount of the adjustment that would result in a negative ROU asset is recorded in the Condensed Consolidated Statements of Operations. We have elected not to recognize ROU assets and lease liabilities for all short-term leases that have a lease term of 12 months or less. We recognize the lease payments associated with our short-term leases as an expense on a straight-line basis over the lease term. Furthermore, we have elected to combine lease and non-lease components for all contracts. Non-lease components primarily relate to maintenance services related to the leased asset. |
De-SPAC Merger Transaction
De-SPAC Merger Transaction | 9 Months Ended |
Sep. 30, 2022 | |
De-SPAC Merger Transaction | |
De-SPAC Merger Transaction | Note 4. De-SPAC Merger Transaction On the Closing Date, the Company completed the Transaction with Riverview (“Closing”). At Closing, the Company issued Substantially concurrently with the Closing, the Company received $205.9 million in cash proceeds (which amount excludes contribution to the Company of certain related party notes as described in Note 11) from common stock PIPE investments (the “PIPE Financing”), issued 20,590,000 Common Shares to the PIPE investors (which share amount excludes the conversion of the related party notes as described in Note 11), and entered into a credit agreement that includes (a) a senior secured first lien revolving credit facility in an initial aggregate principal amount of $175.0 million and (b) a senior secured first lien term loan facility in an initial aggregate principal amount of $175.0 million. See Note 11 for additional disclosures regarding the new credit agreement. Pursuant to the Transaction Agreement, (a) each issued and outstanding common unit of the Converting Company was automatically converted into 0.1049203474320 Common Shares, (b) each issued and outstanding common equivalent preferred unit of the Converting Company (the “Westrock Preferred Unit ”) for which the holder had not elected to convert such unit into shares of Series A convertible preferred stock of Westrock (the “Westrock Series A Preferred Shares”) (see Note 12), automatically converted into 0.1086138208640 Common Shares if such Westrock Preferred Unit was designated a Series A common equivalent preferred unit of the Converting Company (the “Westrock Series A Preferred Units”) or 0.1049203474320 Common Shares if such Westrock Preferred Unit was designated a Series B common equivalent preferred unit of the Converting Company (the “Westrock Series B Preferred Units”) and (c) each outstanding Westrock Preferred Unit, for which the holder thereof had made an election to convert such unit into Westrock Series A Preferred Shares, converted into 0.1086138208740 Westrock Series A Preferred Shares if such Westrock Preferred Unit was a Westrock Series A Preferred Unit or 0.0919280171940 Westrock Series A Preferred Shares if such Westrock Preferred Unit was a Westrock Series B Preferred Unit. In connection with the Closing, holders of Westrock Preferred Units were paid a cash dividend totaling As a result, we issued 34,855,535 Common Shares to common unitholders, 2,220,305 Common Shares to holders of Westrock Preferred Units who elected to convert their Westrock Preferred Units into Common Shares, and 23,587,952 Westrock Series A Preferred Shares to holders who elected to convert their Westrock Preferred Units into Westrock Series A Preferred Shares. The Company realized a net loss on extinguishment of the Westrock Preferred Units of In addition, at Closing, (i) each outstanding share of class B common stock of Riverview (the “Riverview Class B Shares” together with the Riverview Class A Shares, the “Riverview Shares”) (other than the Riverview Class B Shares held as treasury stock, which were automatically cancelled and extinguished at Closing), automatically converted into one Riverview Class A Share, (ii) each outstanding Riverview Class A Share (including the Riverview Class A Shares resulting from the conversion of Riverview Class B Shares at Closing but excluding any Riverview Class A Shares held as treasury stock, which were automatically cancelled and extinguished at Closing) were exchanged for one Common Share, (iii) each outstanding warrant to purchase Riverview Class A Shares (the “Riverview Warrants”) was, by its terms, automatically converted into a comparable warrant to purchase Common Shares (the “Westrock Warrants”) on the terms and subject to the conditions set forth in the warrant agreement for the Riverview Warrants and the amended and restated warrant agreement for the Westrock Warrants, (iv) each Riverview Share held immediately prior to Closing by Riverview as treasury stock was automatically canceled and extinguished and (v) each share of capital stock of Merger Sub I issued and outstanding immediately prior to Closing was automatically canceled and extinguished and converted into one share of common stock, par value $0.01, of the surviving corporation in the SPAC Merger. In connection with obtaining the approval of the Mergers by Riverview’s stockholders, Riverview provided an opportunity for its stockholders to redeem all or a portion of their outstanding Riverview Class A Shares. The Transaction is a capital transaction in substance and not a business combination under ASC 805, Business Combinations (“ASC 805”) Accordingly, for accounting purposes, the financial statements of the combined entity represent a continuation of the financial statements of Westrock, and the net assets of Riverview have been stated at historical cost, with no goodwill or other intangible assets recorded. The equity and net loss per unit attributable to common equityholders of the Company, prior to the Closing, have been retroactively restated as shares reflecting the common unit conversion ratio discussed above. Proceeds from the Transaction and the $175.0 million term loan facility were used to pay off and terminate our then existing term loan and asset-based lending agreements, and to pay expenses related to the Transaction and the new credit agreement. The Company and Riverview incurred $24.2 million and $17.1 million, respectively, of expenses related to the Transaction. These expenses consist of underwriting fees, professional services (legal, accounting, advisory, etc.) and other direct expenses associated with the Transaction. Costs incurred by Westrock were initially capitalized as incurred in the other assets on the Condensed Consolidated Balance Sheets. At Closing, million of expenses incurred by Riverview were either paid by Riverview prior to Closing or netted against proceeds received by the Company at Closing. There were deferred transaction costs recorded in the Condensed Consolidated Balance Sheets as of September 30, 2022 and December 31, 2021. Common Stock Warrants The Company assumed 12,500,000 publicly-traded Riverview Warrants (“Public Warrants”) and 7,400,000 private placement Riverview Warrants (“Private Warrants”), which were originally issued by Riverview in connection with its initial public offering and, as a result of the assumption by the Company, became Westrock Warrants. The Public Warrants assumed by Westrock are referred to as the Westrock Public Warrants and the Private Warrants assumed by Westrock are referred to as the Westrock Private Warrants. The Westrock Warrants are included in warrant liabilities on the Company’s Condensed Consolidated Balance Sheet. The Westrock Warrants entitle the holder to purchase The Westrock Warrants will become exercisable upon the effectiveness of our Registration Statement on Form S-1 (File No. 333-267509) (“Warrant Registration Statement”) registering the Common Shares issuable upon the exercise of the Westrock Warrants. The Westrock Warrants may only be exercised for a whole number of shares, and will expire on August 26, 2027 (i.e., five years following the Closing), or earlier upon redemption or liquidations. Once the Westrock Public Warrants become exercisable, Westrock may redeem the outstanding Westrock Public Warrants (i) in whole and not in part; (ii) at a price of per share. If the Warrant Registration Statement is not effective by November 25, 2022 (i.e., If and when the Public Warrants become redeemable by Westrock, Westrock may exercise its redemption right even if Westrock is unable to register or qualify the underlying securities for sale under all applicable state securities laws. The Westrock Private Warrants, which became transferable, assignable and salable on September 26, 2022 (i.e., 30 days after the Closing), are currently held by the Riverview Sponsor, and are generally identical to the Westrock Public Warrants, except they will not be redeemable by Westrock so long as they are held by the Riverview Sponsor or its permitted transferees. The Riverview Sponsor, or its permitted transferees, have the option to exercise the Westrock Private Warrants on a cashless basis. If the Westrock Private Warrants are held by holders other than the Riverview Sponsor or its permitted transferees, the Westrock Private Warrants will be redeemable by Westrock and exercisable by the holders on the same basis as the Westrock Public Warrants. |
Revenue
Revenue | 9 Months Ended |
Sep. 30, 2022 | |
Revenue | |
Revenue | Note 5. Revenue Revenue from Contracts with Customers (ASC 606) We measure revenue based on the consideration specified in the client arrangement, and revenue is recognized when the performance obligations in the client arrangement are satisfied in accordance with ASC 606, Revenue from Contracts with Customers The transaction price of a contract, net of discounts and expected returns, is allocated to each distinct performance obligation based on the relative standalone selling price of the obligation and is recognized as revenue when the performance obligation is satisfied. The standalone selling price is the estimated price we would charge for the good or service in a separate transaction with similar customers in similar circumstances. Identifying distinct performance obligations and determining the standalone selling price for each performance obligation within a contract requires management judgment. Substantially all our client contracts require that we be compensated for services performed to date. This is upon shipment of goods or upon delivery to the customer, depending on contractual terms. Shipping and handling costs paid by the customer to us are included in revenue and costs incurred by us for shipping and handling activities that are performed after a customer obtains control of the product are accounted for as fulfillment costs. In addition, we exclude from net revenue and cost of sales taxes assessed by governmental authorities on revenue-producing transactions. Although we occasionally accept returns of products from our customers, historically returns have not been material. At times, the Company may enter into agreements in which its Sustainable Sourcing & Traceability segment will sell inventory to a third party, from whom the Company’s Beverage Solutions segment has an obligation to repurchase. Such transactions are accounted for as financing transactions in accordance with ASC 606. At September 30, 2022, the Company has $11.0 million of such repurchase agreement obligations, collateralized by the corresponding inventory, that are recorded within accrued expenses and other current liabilities on the Condensed Consolidated Balance Sheets. Net cash flows associated with these repurchase agreements are reported as financing activities in the Condensed Consolidated Statements of Cash Flows. Revenue from Forward Contracts (ASC 815) A portion of the Company’s revenues relate to the physical delivery and settlement of forward sales contracts for green coffee that are accounted for under ASC 815. These forward sales contracts meet the definition of a derivative under ASC 815 as they have an underlying, notional amount, no initial net investment and can be net settled since the commodity is readily converted to cash. The Company does not apply the normal purchase and normal sale exception under ASC 815 to these contracts. Revenues from forward sales contracts are recognized for the contractually stated amount when the contracts are settled. Settlement generally occurs upon shipment or delivery of the product when title and risks and rewards of ownership transfers to the customer. Prior to settlement, these forward sales contracts are recognized at fair value with the unrealized gains or losses recorded within costs of sales in our Condensed Consolidated Statements of Operations. For the three and nine months ended September 30, 2022, we recorded a nominal amount and million of net unrealized gains, respectively, within costs of sales. For the three and nine months ended September 30, 2021, we recorded For the three and nine months ended September 30, 2022, the Company recognized $56.6 million and $147.0 million in revenues under ASC 815, respectively, and for the three and nine months ended September 30, 2021, the Company recognized $42.3 million and $106.2 million in revenues under ASC 815, respectively, which are reported within the Company’s Sustainable Sourcing & Traceability segment. Contract Estimates The nature of the Company’s contracts give rise to variable consideration including cash discounts, volume-based rebates, point of sale promotions, and other promotional discounts to certain customers. For all promotional programs and discounts, the Company estimates the rebate or discount that will be granted to the customer and records an accrual upon invoicing. These estimated rebates or discounts are included in the transaction price of the Company’s contracts with customers as a reduction to net revenues and are included as accrued sales incentives in accrued expenses and other current liabilities in the Condensed Consolidated Balance Sheets. Accrued sales incentives were $1.3 million and $1.9 million at September 30, 2022 and December 31, 2021. We do not disclose the value of unsatisfied performance obligations for contracts (i) with an original expected length of one year or less or (ii) for which the Company recognizes revenue at the amount in which it has the right to invoice as the product is delivered. Contract Balances Contract balances relate primarily to advances received from the Company’s customers before revenue is recognized. The Company does not have any material contract liabilities as of September 30, 2022 or December 31, 2021. Receivables from contracts with customers are included in accounts receivable, net on the Company’s Condensed Consolidated Balance Sheets. At September 30, 2022 and December 31, 2021, accounts receivable, net included $101.0 million and $89.0 million in receivables from contracts with customers, respectively. Contract acquisition costs for obtaining contracts that are deemed recoverable are capitalized as contract costs. Such costs result from the payment of sales incentives and are amortized over the contract life. As of September 30, 2022 and December 31, 2021, no costs were capitalized as all arrangements were less than a year. Disaggregated Revenue In general, the Company’s business segmentation is aligned according to the nature and economic characteristics of its products and customer relationships and provides meaningful disaggregation of each business segment’s results of operations. Further disaggregation of revenues from sales to external customers by type are presented below: Three Months Ended September 30, Nine Months Ended September 30, (Thousands) 2022 2021 2022 2021 Coffee & tea $ 146,618 $ 111,900 $ 408,914 $ 323,509 Flavors, extracts & ingredients 26,385 25,077 81,448 72,412 Other 483 1,861 2,350 4,585 Green coffee 56,822 42,439 147,437 107,246 Net sales $ 230,308 $ 181,277 $ 640,149 $ 507,752 |
Inventories
Inventories | 9 Months Ended |
Sep. 30, 2022 | |
Inventories | |
Inventories | Note 6. Inventories The following table summarizes inventories as of September 30, 2022 and December 31, 2021: (Thousands) September 30, 2022 December 31, 2021 Raw materials $ 68,959 $ 45,079 Finished goods 21,854 14,895 Green coffee 71,432 49,192 Total inventories $ 162,245 $ 109,166 Green coffee inventories represent green coffee held for re-sale. At September 30, 2022 and December 31, 2021, all green coffee held for resale was included within our Sustainable Sourcing & Traceability segment. |
Property, Plant and Equipment,
Property, Plant and Equipment, Net | 9 Months Ended |
Sep. 30, 2022 | |
Property, Plant and Equipment, Net. | |
Property, Plant and Equipment, Net | Note 7. Property, Plant and Equipment, Net The following table summarizes property, plant and equipment, net: (Thousands) Depreciable Lives September 30, 2022 December 31, 2021 Land $ 9,092 $ 9,150 Buildings 10-40 years 44,274 43,895 Leasehold improvements 1 923 613 Plant equipment 3-15 years 90,912 88,155 Vehicles and transportation equipment 3-5 years 753 876 IT systems 3-7 years 2,475 2,453 Furniture and fixtures 3-10 years 2,890 2,746 Customer beverage equipment 2 3-5 years 21,879 24,341 Lease right-of-use assets 3 10 — Construction in progress and equipment deposits 23,775 8,025 196,983 180,254 Less: accumulated depreciation (62,852) (52,641) Property, plant and equipment, net $ 134,131 $ 127,613 1 - Leasehold improvements are amortized over the shorter of their estimated useful lives or the related lease life. 2 - Customer beverage equipment consists of brewers held on site at customer locations. 3 - Lease right-of-use assets are amortized over the shorter of the useful life of the asset or the lease term. Depreciation expense for the three and nine months ended September 30, 2022 was $4.1 million and $12.7 million, respectively, and depreciation expense for the three and nine months ended September 30, 2021 was $4.4 million and $13.4 million, respectively. Assets classified as construction in progress and equipment deposits are not depreciated, as they are not ready for production use. All assets classified as construction in progress and equipment deposits at September 30, 2022 are expected to be in production use. |
Goodwill
Goodwill | 9 Months Ended |
Sep. 30, 2022 | |
Goodwill. | |
Goodwill | Note 8. Goodwill The following table reflects the carrying amount of goodwill: Beverage (Thousands) Solutions Total Goodwill $ 173,936 $ 173,936 Accumulated impairment loss (76,883) (76,883) Balance at September 30, 2022, net $ 97,053 $ 97,053 |
Intangible Assets, Net
Intangible Assets, Net | 9 Months Ended |
Sep. 30, 2022 | |
Intangible Assets, Net | |
Intangible Assets, Net | Note 9. Intangible Assets, Net The following table summarizes intangible assets, net as of September 30, 2022 and December 31, 2021: September 30, 2022 Accumulated (Thousands) Cost Amortization Net Customer relationships $ 137,500 $ (17,036) $ 120,464 Favorable lease asset 220 (112) 108 Software 890 (513) 377 Intangible assets, net $ 138,610 $ (17,661) $ 120,949 December 31, 2021 Accumulated (Thousands) Cost Amortization Net Customer relationships $ 137,500 $ (12,091) $ 125,409 Favorable lease asset 220 (79) 141 Software 758 (394) 364 Intangible assets, net $ 138,478 $ (12,564) $ 125,914 Amortization expense of intangible assets was $1.7 million and $5.0 million for the three and nine months ended September 30, 2022, respectively, and amortization expense of intangible assets was $1.7 million and $5.0 million for the three and nine months ended September 30, 2021, respectively. As of September 30, 2022, the weighted average useful life for definite-lived intangibles is approximately |
Leases
Leases | 9 Months Ended |
Sep. 30, 2022 | |
Leases | |
Leases | Note 10. Leases We have operating leases for manufacturing and production facilities, warehouse facilities, vehicles and machinery and equipment. The remaining non-cancelable terms on our leases range from 1 year to 22 years, some of which may include options to extend the leases generally between 1 . We do not have any leases with material residual value guarantees or restrictive covenants. The following table summarizes the amount of right-of-use lease assets and lease liabilities included in each respective line item on the Company’s Condensed Consolidated Balance Sheets: (Thousands) Balance Sheet Location September 30, 2022 Right-of-use operating lease assets Other long-term assets $ 10,886 Operating lease liabilities - current Accrued expenses and other current liabilities 2,488 Operating lease liabilities - noncurrent Other long-term liabilities 8,515 Depending on the nature of the lease, lease costs are classified within costs of sales or selling, general and administrative expense on the Company’s Condensed Consolidated Statements of Operations. The components of lease costs are as follows: (Thousands) Three Months Ended September 30, 2022 Nine Months Ended September 30, 2022 Operating lease cost $ 878 $ 1,720 Short-term lease cost 219 443 Total $ 1,097 $ 2,163 The following table presents information about the Company’s weighted average discount rate and remaining lease term: September 30, 2022 Weighted-average discount rate 8.5% Weighted-average remaining lease term 5.0 years Supplemental cash flow information about the Company’s leases is as follows: (Thousands) Nine Months Ended September 30, 2022 Operating cash flows from operating leases $ 844 Finance lease assets are recorded in property, plant and equipment, net with the corresponding lease liabilities included in accrued expenses and other current liabilities and long-term debt, net on the Condensed Consolidated Balance Sheets. There were no material finance leases as of September 30, 2022. Future minimum lease payments under non-cancellable operating leases as of September 30, 2022 are as follows: (Thousands) Remainder of 2022 $ 842 2023 3,283 2024 2,828 2025 2,048 2026 1,435 Thereafter 3,125 Total future minimum lease payments 13,561 Less: imputed interest (2,558) Present value of minimum lease payments $ 11,003 Disclosures related to periods prior to adoption of ASC 842 Rent expense for operating lease agreements under the previous lease guidance was $1.0 million and $3.2 million for the three and nine months ended September 30, 2021, respectively. As previously reported in our audited Consolidated Financial Statements for year ended December 31, 2021, the minimum future lease payments under the previous lease guidance as of December 31, 2021 were as follows: (Thousands) 2022 $ 4,334 2023 4,332 2024 4,174 2025 3,286 2026 2,377 Thereafter 4,373 Total $ 22,876 |
Debt
Debt | 9 Months Ended |
Sep. 30, 2022 | |
Debt | |
Debt | Note 11. Debt Our long-term debt was as follows: (Thousands) September 30, 2022 December 31, 2021 Term loan facility $ 175,000 $ — Prior term loan facility — 235,668 Prior ABL facility — 51,890 International trade finance lines 61,806 4,510 International notes payable 4,617 3,126 Other loans 7 25 Total debt 241,430 295,219 Unamortized debt costs (2,942) (4,910) Current maturities of long-term debt (12,011) (8,735) Short-term debt (61,806) (4,510) Long-term debt, net $ 164,671 $ 277,064 Credit Agreement On August 29, 2022, the Company entered into a credit agreement (the “Credit Agreement”) among the Company, Westrock Beverage Solutions, LLC, as the borrower (the “Borrower”), Wells Fargo Bank, N.A., as administrative agent, collateral agent, and swingline lender, Wells Fargo Securities, LLC, as sustainability structuring agent, and each issuing bank and lender party thereto. The Credit Agreement includes (a) a senior secured first lien revolving credit facility in an initial aggregate principal amount of $175.0 million (the “Revolving Credit Facility”) and (b) a senior secured first lien term loan facility in an initial aggregate principal amount of $175.0 million (the “Term Loan Facility”). Proceeds from the Term Loan Facility were used for paying off existing indebtedness. The Revolving Credit Facility and the Term Loan Facility will mature on August 29, 2027. All obligations under the Credit Agreement are guaranteed by the Company and each of the Borrower’s domestic subsidiaries, which comprise our Beverage Solutions segment, and are secured by substantially all of the assets of the Company’s assets. Borrowings under the Revolving Credit Facility and the Term Loan Facility will bear interest, at the Borrower’s option, initially at an annual rate equal to (i) Term SOFR plus a credit spread adjustment of 0.10% for loans with an interest period of one month, 0.15% for loans with an interest period of three months and 0.25% for loans with an interest period of six months, as applicable, (the “Adjusted Term SOFR Rate”) or (ii) the base rate (determined by reference to the greatest of (i) the rate of interest last quoted by The Wall Street Journal in the U.S. as the prime rate in effect, (ii) the NYFRB Rate from time to time plus 0.50% and (iii) the Adjusted Term SOFR Rate for a one month interest period plus 1.00%, (the “Base Rate”)), in each case plus the Applicable Margin. The Applicable Margin ranges from 1.50% to 2.50% for Adjusted Term SOFR loans and from 0.50% to 1.50% for Base Rate loans, in each case depending on the total net leverage ratio. Commitment fees on the daily unused amount of commitments under the Revolving Credit Facility range from 0.20% to 0.35% depending on the total net leverage ratio. At September 30, 2022, the Revolving Credit Facility was undrawn (other than the standby letters of credit outstanding described below) and the interest rate applicable to our Term Loan Facility was The Term Loan Facility requires quarterly principal payments during the first three years of approximately $2.2 million (1.25% of the original principal balance beginning December 31, 2022). Quarterly payments increase to approximately $3.3 million and $4.4 million (1.875% and 2.5% of the original principal balance) during the fourth and fifth years, respectively. We incurred $6.0 million of financing fees in connection with the Credit Agreement. We had $2.6 million of standby letters of credit outstanding at September 30, 2022. The Credit Agreement contains two financial covenants requiring maintenance of a total net leverage ratio not to exceed 4.50 to 1.00, with a stepdown to 4.00 to 1.00 on the 18-month to 1.00 (the “Financial Covenants”). As of September 30, 2022, the Company was in compliance with the Financial Covenants. Prior Term Loan Facility On February 28, 2020, Westrock Beverage Solutions, LLC, as borrower, borrowed $240.0 million of term loans from various financial institutions pursuant to a loan and security agreement (the “Prior Term Loan Agreement”) (such term loans, the “Prior Term Loan Facility”). In connection with the Closing, all outstanding Prior Term Loan Facility balances were repaid, and the associated Prior Term Loan Agreement was terminated. The Company paid a Prior ABL Facility On February 28, 2020, Westrock Beverage Solutions, LLC, as borrower, entered into a loan and security agreement with Bank of America as administrative agent (the “Prior ABL Credit Agreement”) that created an asset-based loan of $90.0 million (the “Prior ABL Facility”). In connection with the Closing, all outstanding Prior ABL Facility balances were repaid, and the associated Prior ABL Credit Agreement was terminated. Upon termination, we wrote off million unamortized deferred financing fees associated with the Prior ABL Facility, which are recorded within interest expense on the Condensed Consolidated Statement of Operations. The remaining unamortized deferred financing fees were allocated to the new Revolving Credit Facility and will be amortized over the life of the Revolving Credit Facility. Outstanding letters of credit under the Prior ABL Facility were replaced by letters of credit under the Credit Agreement. International Debt and Lending Facilities At September 30, 2022, Westrock Coffee International, LLC, an Arkansas limited liability company and wholly owned subsidiary of the Company, through its subsidiary Falcon Coffees Limited (“Falcon”) had a $0.7 million promissory note payable with responsAbility SICAV (Lux). Proceeds from the note are restricted for the sole purpose of financing Falcon’s trading activities. Borrowings on the note bear interest at a fixed rate of 9.5% and mature on December 31, 2022. Westrock Coffee International, LLC, through its subsidiary Rwanda Trading Company, maintains 30, 2022. The short-term trade finance facility and the long-term note payable bear interest at a rate of Falcon maintains a working capital trade finance facility with multiple financial institutions, which prior to March 16, 2022, was agented by Brown Brothers Harriman (“BBH”), a related party of the Company through its equity interests in the Company, and was reported as short-term related party debt on the Condensed Consolidated Balance Sheets. On March 16, 2022, Falcon refinanced its working capital trade finance facility, and the facility was transferred to different lenders with the same terms as the previous facility. At the time of refinance, there was million outstanding under the facility. The new facility is uncommitted, repayable on demand and secured by Falcon’s assets. The facility is renewable on an annual basis beginning in March 2023. On April 29, 2022, the facility size increased from contains certain restrictive financial covenants which require Falcon to maintain certain levels of working capital, debt, and net worth. Falcon was in compliance with these financial covenants as of September 30, 2022. Subordinated Related Party Debt On February 28, 2020, we issued $13.3 million of subordinated debt (the “Subordinated Notes”) to Wooster Capital, LLC (“Wooster”) and Jo Ellen Ford, related parties of the Company through their equity ownership and relation with Joe Ford, the chairman of our board of directors. The Subordinated Notes provided for maturity on the earlier of (i) six months after the Prior Term Loan Facility due in 2025 was paid in full or (ii) 10 years from the date of issuance (February 2030). Interest was payable quarterly at the end of each calendar quarter at a rate of 6% per annum. Substantially concurrently with the Closing and pursuant to the terms of their respective subscription agreements with the Company, Wooster and Jo Ellen Ford contributed their respective Subordinated Notes to the Company and in exchange for such contribution, the Company issued Common Shares, par value $0.01 per share, to Wooster and Jo Ellen Ford. The Company issued a total of In connection with the Transaction, on July 14, 2022, pursuant to the terms of the subscription agreement entered into between the Company and Wooster, in which Wooster agreed to subscribe for and purchase, and the Company agreed to issue and sell to Wooster, prior to and substantially concurrently with the Closing, an aggregate of 2,150,000 Common Shares at a purchase price of $10.00 per share, for aggregate gross proceeds of $21,500,000 to the Company, Wooster pre-funded $11.7 million of its commitment (the “Wooster Pre-fund”) and in exchange thereof was issued a subordinated convertible note by the Company (the “Convertible Note”). The Convertible Note had a principal amount of $11.7 million, a maturity of one year and an interest rate of 8% per annum which was payable quarterly on the last business day of each quarter. On August 26, 2022, in connection with the Closing, the Convertible Note automatically converted, in accordance with its terms, into |
Series A Preferred Shares
Series A Preferred Shares | 9 Months Ended |
Sep. 30, 2022 | |
Series A Preferred Shares | |
Series A Preferred Shares | Note 12. Series A Preferred Shares In connection with the Transaction, the Company issued 23,587,952 Westrock Series A Preferred Shares, which rank senior to the Common Shares with respect to dividend rights and/or distribution rights upon the liquidation, winding up or dissolution, as applicable, of Westrock. Each holder of Westrock Series A Preferred Shares is entitled to vote, on an as-converted basis, as a single class with the holders of Common Shares and the holders of any other class or series of capital stock of Westrock then entitled to vote with the Common Shares on all matters submitted to a vote of the holders of Common Shares. The initial liquidation preference of Westrock Series A Preferred Shares is $11.50 per share, plus any declared but unpaid dividends and subject to accretion under certain circumstances. In the event of our liquidation, dissolution or winding up, holders of Westrock Series A Preferred Shares are entitled to receive, per Westrock Series A Preferred Share, the greater of (a) the liquidation preference and (b) the amount such holder would have received had they converted their Westrock Series A Preferred Shares into Common Shares immediately prior to such liquidation event. Holders of Westrock Series A Preferred Shares may voluntarily convert their Westrock Series A Preferred Shares into a whole number of Common Shares at any time at a rate equal to the quotient of (a) the liquidation preference as of the applicable conversion date, divided by (b) the conversion price as of the applicable conversion date, which is currently per Westrock Series A Preferred Share is subject to customary adjustments for the issuance of Common Shares as a dividend or distribution to the holders of Common Shares, a subdivision or combination of the Common Shares, reclassification of the Common Shares into a greater or lesser number of Common Shares, certain tender or exchange offers for the Common Shares, and issuances of Common Shares below a specified price. After February 26, 2028 (i.e., the five a third-party lender provides debt financing to Westrock or its subsidiaries, at a redemption price per share equal to the greater of (a) the liquidation preference and (b) the product of (i) the number of Common Shares that would have been obtained from converting one Westrock Series A Preferred Share on the redemption notice date and (ii) the simple average of the daily volume weighted average price per Common Share for the ten trading days ending on and including the trading day immediately preceding the redemption notice date. At any time after February 26, 2028 (i.e., the five and a half year anniversary of the date of Closing), Westrock may redeem, ratably, in whole or, from time to time in part, the Westrock Series A Preferred Shares of any holder then outstanding at the redemption price in cash, equal to the greater of (i) the liquidation preference and (ii) the product of (x) the number of Common Shares that would have been obtained from converting one Westrock Series A Preferred Share on the date of the exercise of such call is notified by Westrock (including fractional shares for this purpose) and (y) the simple average of the daily volume weighted average price per Common Share for the ten trading days ending on and including the trading day immediately preceding the date of the exercise of such call by Westrock. The redemption price for the Westrock Series A Preferred Shares held by controlled affiliates of Brown Brothers Harriman & Co. (“BBH Investors”) may not be less than the $18.50 per Westrock Series A Preferred Share (subject to adjustments); provided that, Westrock may redeem such shares in such a case if it pays an incremental price per share on the redemption date to the BBH Investors equal to the difference between $18.50 (subject to adjustments) and the redemption price otherwise. Upon issuance, the Westrock Series A Preferred Shares were recorded on our Condensed Consolidated Balance Sheets at fair value. Subsequently, the Company will accrete changes in the redemption value from the date of issuance to the earliest redemption date (i.e., the five and a half year anniversary of the date of Closing) using the effective interest rate method. The accretion will be recorded as a deemed dividend, which adjusts retained earnings (or in the absence of retained earnings, additional paid-in capital) and earnings attributable to common shareholders in computing basic and diluted earnings per share. However, at no time will the Westrock Series A Preferred Shares be reported at a value less than its initial carrying value. At September 30, 2022 the redemption value of the Westrock Series A Preferred Shares was less than its initial carrying value, as a result, |
Derivatives
Derivatives | 9 Months Ended |
Sep. 30, 2022 | |
Derivatives | |
Derivatives | Note 13. Derivatives We record all derivatives, whether designated in a hedging relationship or not, at fair value on the Condensed Consolidated Balance Sheets. We use various types of derivative instruments including, but not limited to, forward contracts, futures contracts, and options contracts for certain commodities. Forward and futures contracts are agreements to buy or sell a quantity of a commodity at a predetermined future date, and at a predetermined rate or price. Forward contracts are traded over the counter whereas future contracts are traded on an exchange. Option contracts are agreements to facilitate a potential transaction involving the commodity at a preset price and date. The accounting for gains and losses that result from changes in the fair values of derivative instruments depends on whether the derivatives have been designated and qualify as hedging instruments and the types of hedging relationships. Derivatives can be designated as fair value hedges, cash flow hedges or hedges of net investments in foreign operations. The changes in the fair values of derivatives that have not been designated and for which hedge accounting is not applied, are recorded in the same line item in our Condensed Consolidated Statements of Operations as the changes in the fair value of the hedged items attributable to the risk being hedged. The changes in fair values of derivatives that have been designated and qualify as cash flow hedges are recorded in accumulated other comprehensive income (“AOCI”) and are reclassified into the line item in the Condensed Consolidated Statements of Operations in which the hedged items are recorded in the same period the hedged items affect earnings. For derivatives that will be accounted for as hedging instruments, we formally designate and document, at inception, the financial instrument as a hedge of a specific underlying exposure, the risk management objective and the strategy for undertaking the hedge transaction. In addition, we formally assess both at the inception and at least quarterly thereafter, whether the financial instruments used in hedging transactions are highly effective at offsetting changes in either the fair values or cash flows of the related underlying exposures. We use cash flow hedges to minimize the variability in cash flows of assets or liabilities or forecasted transactions caused by fluctuations in commodity prices. The changes in fair values of hedges that are determined to be ineffective are immediately reclassified from AOCI into earnings. We did not discontinue any cash flow hedging relationships during the nine months ended September 30, 2022 or 2021. Within our Beverage Solutions segment, we have entered into coffee futures and options contracts to hedge our exposure to price fluctuations on green coffee associated with certain price-to-be-fixed purchase contracts, which generally range from three to twelve months in length. These derivative instruments have been designated and qualified as a part of our commodity cash flow hedging program. The objective of this hedging program is to reduce the variability of cash flows associated with future purchases of green coffee. The notional amount for the coffee futures contracts that were designated and qualified for our commodity cash flow hedging program was 11.4 million pounds and 7.9 million pounds as of September 30, 2022 and December 31, 2021, respectively. During the three and nine months ended September 30, 2022, the Company purchased coffee futures contracts and coffee options contracts under our cash flow hedging program with aggregate notional amounts of 8.8 million pounds and 57.0 million pounds, respectively. During the three and nine months ended September 30, 2021, the Company purchased coffee futures contracts and coffee options contracts under our cash flow hedging program with aggregate notional amounts of Approximately $4.3 million and $11.1 million of net realized gains, representing the effective portion of the cash flow hedge, were subsequently reclassified from AOCI to earnings and recognized in costs of sales in the Condensed Consolidated Statements of Operations for the three and nine months ended September 30, 2022, respectively. Approximately 30, 2021, respectively. As of September 30, 2022, the estimated amount of net losses reported in AOCI that is expected to be reclassified to the Condensed Consolidated Statements of Operations within the next twelve months is Within our Sustainable Sourcing & Traceability segment, the Company’s forward sales and forward purchase contracts are for physical delivery of green coffee in a future period. While the Company considers these contracts to be effective economic hedges, the Company does not designate or account for forward sales or forward purchase contracts as hedges as defined under current accounting standards. See Note 5 for a description of the treatment of realized and unrealized gains and losses on forward sales and forward purchase contracts. The fair value of our derivative assets and liabilities included in the Condensed Consolidated Balance Sheets are set forth below: (Thousands) Balance Sheet Location September 30, 2022 December 31, 2021 Derivative assets designated as cash flow hedging instruments: Coffee futures contracts 1 Derivative assets $ — $ 172 Coffee options Derivative assets 303 — Total $ 303 $ 172 Derivative assets not designated as cash flow hedging instruments: Forward purchase and sales contracts Derivative assets $ 13,393 $ 13,593 Total 13,393 13,593 Total derivative assets $ 13,696 $ 13,765 Derivative liabilities designated as cash flow hedging instruments: Coffee futures contracts 1 Derivative liabilities $ 703 $ — Coffee options Derivative liabilities — — Total $ 703 $ — Derivative liabilities not designated as cash flow hedging instruments: Forward purchase and sales contracts Derivative liabilities $ 4,654 $ 14,021 Total 4,654 14,021 Total derivative liabilities $ 5,357 $ 14,021 1 - The fair value of coffee futures excludes amounts related to margin accounts. The following table presents the pre-tax net gains and losses for our derivative instruments: Three Months Ended September 30, Nine Months Ended September 30, (Thousands) Statement of Operations Location 2022 2021 2022 2021 Derivative assets designated as cash flow hedging instruments: Net realized gains (losses) on coffee derivatives Costs of sales $ 4,267 $ 1,680 $ 11,098 $ 3,580 Derivative assets and liabilities not designated as cash flow hedging instruments: Net unrealized gains (losses) on forward sales and purchase contracts Costs of sales $ 29 $ (3,329) $ 7,266 $ (3,910) |
Fair Value Measurements
Fair Value Measurements | 9 Months Ended |
Sep. 30, 2022 | |
Fair Value Measurements | |
Fair Value Measurements | Note 14. Fair Value Measurements ASC 820, Fair Value Measurements prioritized based on a three-level hierarchy. This hierarchy requires entities to maximize the use of observable inputs and minimize the use of unobservable inputs. The Company groups its assets and liabilities at fair value in three levels, based on the markets in which the assets and liabilities are traded, and the reliability of the assumptions used to determine fair value. These levels are: ● Level 1—Valuation is based upon quoted prices for identical instruments traded in active markets. ● Level 2—Valuation is based upon inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly (i.e. interest rate and yield curves observable at commonly quoted intervals, default rates, etc.). Observable inputs include quoted prices for similar instruments in active and non-active markets. Level 2 includes those financial instruments that are valued with industry standard valuation models that incorporate inputs that are observable in the marketplace throughout the full term of the instrument or can otherwise be derived from or supported by observable market data in the marketplace. Level 2 inputs may also include insignificant adjustments to market observable inputs. ● Level 3—Valuation is based upon one or more unobservable inputs that are significant in establishing a fair value estimate. These unobservable inputs are used to the extent relevant observable inputs are not available and are developed based on the best information available. These inputs may be used with internally developed methodologies that result in management’s best estimate of fair value. The following table summarizes the fair value of financial instruments at September 30, 2022: September 30, 2022 (Thousands) Level 1 Level 2 Level 3 Total Assets: Green coffee associated with forward contracts $ — $ 51,323 $ — $ 51,323 Coffee futures contracts — — — — Forward purchase and sales contracts — 13,393 — 13,393 Coffee options 303 — — 303 Total $ 303 $ 64,716 $ — $ 65,019 Liabilities: Coffee futures contracts $ 703 $ — $ — $ 703 Forward purchase and sales contracts — 4,654 — 4,654 Coffee options — — — — Westrock Public Warrants 18,125 — — 18,125 Westrock Private Warrants — — 14,208 14,208 Total $ 18,828 $ 4,654 $ 14,208 $ 37,690 The following table presents the change in the fair value of Level 3 Westrock Private Warrant liabilities: (Thousands) Westrock Private Warrants Fair value as of January 1, 2022 $ — Assumption of warrants 11,618 Change in fair value 2,590 Fair value as of September 30, 2022 $ 14,208 The following table summarizes the fair value of financial instruments at December 31, 2021: December 31, 2021 (Thousands) Level 1 Level 2 Level 3 Total Assets: Green coffee associated with forward contracts $ — $ 47,845 $ — $ 47,845 Coffee futures contracts 172 — — 172 Forward purchase and sales contracts — 13,593 — 13,593 Coffee options — — — — Total $ 172 $ 61,438 $ — $ 61,610 Liabilities: Forward purchase and sales contracts $ — $ 14,021 $ — $ 14,021 Total $ — $ 14,021 $ — $ 14,021 Coffee futures contracts and coffee options are valued based on quoted market prices. The estimated fair value for green coffee inventories associated with forward contracts and forward sales and purchase contracts are based on exchange-quoted prices, adjusted for differences in origin, quantity, quality, and future delivery period, as the exchange quoted prices represent standardized terms for the commodity. These adjustments are generally determined using broker or dealer quotes or based upon observable market transactions. As a result, green coffee associated with forward contracts and forward sales and purchase contracts are classified within Level 2 of the fair value hierarchy. Westrock Public Warrants are valued based on their quoted market price of $1.45 per warrant as of September 30, 2022. Westrock Private Warrants price of per warrant are valued using a binomial lattice valuation model, which is considered to be a Level 3 fair value measurement. The primary unobservable inputs were as follows: September 30, 2022 Stock price $ 10.33 Exercise price 11.50 Expected term (years) 5.00 Expected volatility 16.50% Risk-free rate of return 4.03% Dividend yield 0.00% Financial instruments consist primarily of cash, accounts receivable, accounts payable, and long-term debt. The carrying amount of cash, accounts receivable and accounts payable was estimated by management to approximate fair value due to the relatively short period of time to maturity for those instruments. On August 29, 2022, the Company entered into the Credit Agreement, which includes the Term Loan Facility and the Revolving Credit Facility. The Term Loan Facility and the Revolving Credit Facility are carried on the Condensed Consolidated Balance Sheets at amortized cost. In November 2021, we amended our Prior Term Loan Agreement and our Prior ABL Credit Agreement, which comprised our material long-term debt obligations at December 31, 2021. As there was no re-pricing of those obligations in connection with the amendments, the carrying amount of these obligations was estimated by management to approximate fair value as of December 31, 2021. The Prior Term Loan Facility and the Prior ABL Facility were carried on the Condensed Consolidated Balance Sheets at amortized cost. The fair value of the Term Loan Facility, Revolving Credit Facility, Prior Term Loan Facility and the Prior ABL Facility was determined based on Level 2 inputs under the fair value hierarchy. Non-financial assets and liabilities, including property, plant and equipment, goodwill, and intangible assets are measured at fair value on a non-recurring basis. No events occurred during the three or nine months ended September 30, 2022 and 2021, requiring these non-financial assets and liabilities to be subsequently recognized at fair value. |
Accumulated Other Comprehensive
Accumulated Other Comprehensive Income | 9 Months Ended |
Sep. 30, 2022 | |
Accumulated Other Comprehensive Income. | |
Accumulated Other Comprehensive Income | Note 15. Accumulated Other Comprehensive Income Changes in accumulated other comprehensive loss, net of tax by component is as follows: Three Months Ended September 30, Nine Months Ended September 30, (Thousands) 2022 2021 2022 2021 Cash flow hedge changes in fair value gain (loss): Balance at beginning of period $ 4,474 $ 7,091 $ 11,759 $ 3,581 Other comprehensive income (loss) before reclassifications 555 4,824 (2,245) 11,369 Amounts reclassified from accumulated comprehensive income (4,267) (1,680) (11,098) (3,580) Tax effect 910 (772) 3,256 (1,907) Net other comprehensive income 1,672 9,463 1,672 9,463 Less: Other comprehensive income attributable to noncontrolling interests — — — — Balance at end of period 1,672 9,463 1,672 9,463 Foreign currency translation gain Balance at beginning of period 250 174 259 239 Other comprehensive income (loss) before reclassifications 1 67 (8) 2 Amounts reclassified from accumulated comprehensive income — — — — Tax effect — — — — Net other comprehensive income 251 241 251 241 Less: Other comprehensive income attributable to noncontrolling interests — — — — Balance at end of period 251 241 251 241 Accumulated other comprehensive income at end of period $ 1,923 $ 9,704 $ 1,923 $ 9,704 |
Equity-Based Compensation
Equity-Based Compensation | 9 Months Ended |
Sep. 30, 2022 | |
Equity-Based Compensation | |
Equity-Based Compensation | Note 16. Equity-Based Compensation In August 2022, the Company’s Board of Directors adopted the Westrock Coffee Company 2022 Equity Incentive Plan (“2022 Equity Plan”), which is administered by the Compensation Committee of the Board of Directors. Awards issuable under the 2022 Equity Plan include restricted stock, restricted stock units, incentive stock options, “non-qualified” stock options, stock appreciation rights and performance shares. Restricted Stock Unit Awards During the quarter ended September 30, 2022, the Company granted 1.1 million restricted stock units (“RSUs”) to employees, which had a grant date fair value of $12.8 million. We calculate the grant date fair value of non-vested RSUs using the closing price of the Company’s Common Shares on the day of the grant. The RSUs are amortized on a straight-line basis to expense over the vesting period, which is generally . As of September 30, 2022, there were million shares available for future issuance under the 2022 Equity Plan. The following table sets forth the number of unvested RSUs and the weighted-average fair value of these awards at the date of grant. Average Fair Units Market Value Outstanding at December 31, 2021 — $ — Granted 1,109,000 $ 11.51 Forfeited (4,000) $ 11.51 Vested — $ — Outstanding at September 30, 2022 1,105,000 $ 11.51 Furthermore, in August 2022, in connection with the Transaction, unit option awards issued under the Company’s 2020 Unit Option Incentive Plan, were equitably converted in accordance with the terms of the 2020 Unit Option Incentive Plan and the Transaction Agreement. Each outstanding option to purchase units of Westrock Coffee Holdings, LLC, whether vested or unvested, was converted into an option to purchase Common Shares based on an exchange ratio (the “Exchange Ratio”) defined in the Transaction Agreement. The per unit exercise price of unit options was converted to a per share exercise price based on the Exchange Ratio, and with respect to performance-based options, such options converted into performance-based options to purchase Common Shares that vest once the simple average of the daily volume weighted average price per share of Common Shares for 10 trading days in any consecutive 30-day period is $18.50 per share. These changes were deemed to be Type I modifications under ASC 718, Compensation – Stock Compensation |
Earnings per Share
Earnings per Share | 9 Months Ended |
Sep. 30, 2022 | |
Earnings per Share | |
Earnings per Share | Note 17. Earnings per Share Prior to the Conversion, the Company’s ownership interests consisted of two classes of equity units, referred to as Common Units and Common Equivalent Preferred Units (“CEP Units”), which have been retroactively restated as shares reflecting the conversion ratios discussed in Note 4. Our Series A Preferred Shares and RSUs issued under our 2022 Equity Incentive Plan are considered participating securities as they receive non-forfeitable rights to dividends at the same rate as Common Shares. As participating securities, we include these instruments in the computation of earnings per share under the two-class method described in ASC 260, Earnings per Share. Prior to the Conversion, the dilutive effect of CEP Units is calculated by using the “if-converted” method. This assumes an add-back of dividends on the CEP Units to net income attributable to unitholders as if the securities were converted to common shares at the beginning of the reporting period (or at the time of issuance, if later), and the resulting common shares are included in the number of weighted-average units outstanding. The dilutive effect of time-based option awards and RSUs is calculated using the treasury stock method, while performance-based awards are treated as contingently issuable. We have excluded from the computation of diluted shares the effect of Warrants, time-based options awards and RSUs because their inclusion would have an anti-dilutive effect due to our reported net loss. We had 19.9 million warrants, 1.6 million time-based options awards, and 1.1 million RSUs outstanding at September 30, 2022, and 15.3 million, 9.1 million and 222.2 million unit options, restricted Common Units, and CEP Units outstanding, respectively, at September 30, 2021, which if converted into common shares would yield 1.6 million, 1.0 million, and 23.3 million common shares, respectively. The following table sets forth the computation of basic and diluted earnings per share under the two-class method. Three Months Ended September 30, Nine Months Ended September 30, (Thousands, except per unit data) 2022 2021 2022 2021 Basic Earnings per Common Share Numerator: Net loss attributable to common shareholders $ (20,246) $ (10,096) $ (44,717) $ (34,472) Denominator: Basic weighted-average common shares outstanding 49,795 34,523 39,819 34,455 Basic Loss per common share $ (0.41) $ (0.29) $ (1.12) $ (1.00) Diluted Earnings per Common Share Numerator: Net loss attributable to common shareholders $ (20,246) $ (10,096) $ (44,717) $ (34,472) Impact of non-participating securities — — — — Net loss attributable to common shareholders - diluted $ (20,246) $ (10,096) $ (44,717) $ (34,472) Denominator: Basic weighted-average common shares outstanding 49,795 34,523 39,819 34,455 Impact of dilutive non-participating securities — — — — Impact of if-converted securities — — — — Weighted-average shares for dilutive earnings per common share 49,795 34,523 39,819 34,455 Dilutive loss per common share $ (0.41) $ (0.29) $ (1.12) $ (1.00) |
Segment Information
Segment Information | 9 Months Ended |
Sep. 30, 2022 | |
Segment Information | |
Segment Information | Note 18. Segment Information Management, including our chief executive officer, who is our chief operating decision maker, manages our business in two operating segments. Beverage Solutions: Sustainable Sourcing & Traceability: Through this segment, we utilize our proprietary technology and digitally traceable supply chain to directly impact and improve the lives of our farming partners, tangible economic empowerment and an emphasis on environmental accountability and farmer literacy. Revenues primarily relate to the physical delivery and settlement of forward sales contracts for green coffee. Management evaluates the performance of each segment using Adjusted EBITDA, which is a segment performance measure we define as net income determined in accordance with GAAP, before interest expense, provision for income taxes, depreciation and amortization, equity-based compensation expense and the impact, which may be recurring in nature, of acquisition, transaction and integrations costs, including management services and consulting agreements entered into in connection with the acquisition of S&D Coffee, Inc. (“S&D”), impairment charges, changes in the fair value of warrant liabilities, non-cash mark-to-market adjustments, certain costs specifically excluded from the calculation of EBITDA under our material debt agreements, such as facility start-up costs, and other similar or infrequent items (although we may not have had such charges in the periods presented). Selected financial data related to our segments is presented below: Three Months Ended September 30, 2022 Sustainable Total of Beverage Sourcing & Intersegment Reportable (Thousands) Solutions Traceability Revenues Segments Net sales $ 173,486 $ 62,809 $ (5,987) $ 230,308 Adjusted EBITDA 15,885 2,028 n/a 17,913 Less: Interest expense 13,404 Income tax benefit (428) Depreciation and amortization 5,816 Acquisition, restructuring and integration expense 3,959 Change in fair value of warrants 5,215 Management and consulting fees (S&D Coffee, Inc. acquisition) 834 Equity-based compensation 705 Mark-to-market adjustments 543 Loss on disposal of property, plant and equipment 459 Other 424 Net loss $ (13,018) Total assets 638,160 111,928 n/a 750,088 Three Months Ended September 30, 2021 Sustainable Total of Beverage Sourcing & Intersegment Reportable (Thousands) Solutions Traceability Revenues Segments Net sales $ 138,838 $ 47,529 $ (5,090) $ 181,277 Adjusted EBITDA 11,462 2,017 n/a 13,479 Less: Interest expense 8,614 Income tax benefit (796) Depreciation and amortization 6,072 Acquisition, restructuring and integration expense 1,829 Management and consulting fees (S&D Coffee, Inc. acquisition) 1,591 Equity-based compensation 306 Mark-to-market adjustments (4) Gain on disposal of property, plant and equipment (390) Other 147 Net loss $ (3,890) Total assets 497,219 85,275 n/a 582,494 Nine Months Ended September 30, 2022 Sustainable Total of Beverage Sourcing & Intersegment Reportable (Thousands) Solutions Traceability Revenues Segments Net sales $ 492,712 $ 169,041 $ (21,604) $ 640,149 Adjusted EBITDA 38,776 3,824 n/a 42,600 Less: Interest expense, net 30,265 Income tax benefit (3,511) Depreciation and amortization 17,782 Acquisition, restructuring and integration expense 8,746 Change in fair value of warrants 5,215 Management and consulting fees (S&D Coffee, Inc. acquisition) 3,035 Equity-based compensation 1,184 Mark-to-market adjustments 793 Loss on disposal of property, plant and equipment 748 Other 1,885 Net loss $ (23,542) Total assets 638,160 111,928 n/a 750,088 Nine Months Ended September 30, 2021 Sustainable Total of Beverage Sourcing & Intersegment Reportable (Thousands) Solutions Traceability Revenues Segments Net sales $ 400,506 $ 121,550 $ (14,304) $ 507,752 Adjusted EBITDA 29,924 3,047 n/a 32,971 Less: Interest expense, net 24,283 Income tax benefit (2,239) Depreciation and amortization 18,386 Acquisition, restructuring and integration expense 3,772 Management and consulting fees (S&D Coffee, Inc. acquisition) 4,791 Equity-based compensation 918 Mark-to-market adjustments (1,979) Gain on disposal of property, plant and equipment (147) Other 1,268 Net loss $ (16,082) Total assets 497,219 85,275 n/a 582,494 The following table presents net sales information by geographic area. Net sales are attributed to countries based on the customer invoice location. Three Months Ended September 30, Nine Months Ended September 30, (Thousands) 2022 2021 2022 2021 United States $ 181,789 $ 146,642 $ 515,742 $ 423,524 All other countries 48,519 34,635 124,407 84,228 Net sales $ 230,308 $ 181,277 $ 640,149 $ 507,752 |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Sep. 30, 2022 | |
Commitments and Contingencies. | |
Commitments and Contingencies | Note 19. Commitments and Contingencies We are subject to various claims and legal proceedings with respect to matters such as governmental regulations, and other actions arising out of the ordinary course of business. Management believes that the resolution of these matters will not have a material adverse effect on our financial position, results of operations, or cash flow. We have future purchase obligations of $284.6 million as of September 30, 2022 that consist of commitments for the purchase of inventory over the next 12 months. These obligations represent the minimum contractual obligations expected under the normal course of business. |
Related Party Transactions
Related Party Transactions | 9 Months Ended |
Sep. 30, 2022 | |
Related Party Transactions | |
Related Party Transactions | Note 20. Related Party Transactions The Company transacts with certain entities or persons that have ownership in the Company, and/or for which our co-founder and Chief Executive Officer Scott Ford, our co-founder and Chairman, Joe Ford, or close family members of the Fords, have ownership interests in. As such, these persons and entities are deemed related parties. In connection with the acquisition of S&D on February 28, 2020, certain affiliates of BBH were issued equity of the Company at which time BBH became a related party. The consolidated financial statements reflect the following transactions with related parties: (Thousands) September 30, 2022 December 31, 2021 Short-term related party debt: Brown Brothers Harriman (1) $ — $ 34,199 Subordinated related party debt: Wooster Capital (2) — 9,800 Jo Ellen Ford (1) — 3,500 Total $ — $ 13,300 Three Months Ended September 30, Nine Months Ended September 30, (Thousands) 2022 2021 2022 2021 Interest expense, net: Brown Brothers Harriman (1) — 358 541 936 Wooster Capital (2) 207 152 503 449 Jo Ellen Ford (1) 33 54 139 160 Westrock Finance, LLC (2) — 98 — 290 Total $ 240 $ 662 $ 1,183 $ 1,835 1 – Related through common ownership 2 – Related through common ownership and management In connection with the acquisition of S&D in February 2020, the Company entered into a Management Services Agreement with Westrock Group, LLC (“Westrock Group”), which expires February 2023. Under the terms of the agreement Westrock Group will be paid million in return for financial, managerial, operational, and strategic services. The associated expense is recorded within selling, general and administrative expense in our Condensed Consolidated Statements of Operations. The Company recognized 30, 2022 and 2021. In addition, million, respectively, for such items, which are recorded in selling, general and administrative expenses on our Condensed Consolidated Statements of Operations. For the three and nine months ended September 30, 2021, the Company incurred expenses of million, respectively, for such items. At September 30, 2022 and December 31, 2021, we had payables to Westrock Group of million, respectively, reported within accrued expenses and other current liabilities on our Condensed Consolidated Balance Sheets. |
Subsequent Events
Subsequent Events | 9 Months Ended |
Sep. 30, 2022 | |
Subsequent Events | |
Subsequent Events | Note 21. Subsequent Events On November 14, 2022, Westrock Beverage Solutions, LLC, a Delaware limited liability company and wholly-owned subsidiary of the Company, acquired one hundred percent (100%) of the equity securities of Kohana Coffee, LLC (“Kohana Coffee”), a Texas limited liability company. Kohana Coffee is an extract and ready-to-drink focused business, based in Richmond, California, serving customers in the retail and CPG industries. Aggregate consideration paid for Kohana Coffee included 1,852,608 shares of common stock of the Company, par value $0.01 per share, and approximately $15.5 million in cash, subject to customary adjustments. We expect the business combination to be accounted for using the acquisition method of accounting under ASC 805. However, due to the timing of the acquisitions subsequent to our September 30, 2022 reporting date, the initial accounting, including the allocation of purchase price and related supplemental pro form information, is incomplete as of the filing date. As a result, applicable disclosures related to the acquisition of Kohana Coffee are not included herein. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 9 Months Ended |
Sep. 30, 2022 | |
Summary of Significant Accounting Policies | |
Use of Estimates | Use of Estimates The preparation of consolidated financial statements in conformity with GAAP requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities, revenue and expenses, and related disclosures of contingent assets and liabilities in the consolidated financial statements and accompanying notes. On an ongoing basis, we evaluate our estimates, including those related to the allowance for credit losses, useful lives of property, equipment, incremental borrowing rates for lease liability measurement, fair values of forward purchase and sales contracts, green coffee associated with forward contracts, and warrant liabilities, share-based compensation, contingencies, and income taxes, among others. We base our estimates on historical experience and on various other assumptions that we believe to be reasonable, the results of which form the basis for making judgments about the carrying values of assets and liabilities. Actual results could differ from our estimates. |
Accounts Receivable and Allowance for Credit Losses | Accounts Receivable and Allowance for Credit Losses Accounts receivable consists principally of amounts billed and currently due from customers and are generally unsecured and due within 30 to 60 days. A portion of our accounts receivable is not expected to be collected due to non-payment, bankruptcies and deductions. Our accounting policy for the allowance for credit losses requires us to reserve an amount based on the evaluation of the aging of accounts receivable, detailed analysis of high-risk customers’ accounts, and the overall market and economic conditions of our customers. This evaluation considers the customer demographic, such as large commercial customers as compared to small businesses or individual customers. We consider our accounts receivable delinquent or past due based on payment terms established with each customer. Accounts receivable are written off when the account is determined to be uncollectible. Activity in the allowance for credit losses was as follows: Three Months Ended September 30, Nine Months Ended September 30, (Thousands) 2022 2021 2022 2021 Balance at beginning of period $ 2,392 $ 3,666 $ 3,749 $ 3,977 Charged to selling, general and administrative expense 364 19 1,286 119 Write-offs (9) (119) (2,288) (530) Total $ 2,747 $ 3,566 $ 2,747 $ 3,566 |
Inventories | Inventories Green coffee associated with our forward contracts is recorded at net realizable value, which approximates market price, within our Sustainable Sourcing & Traceability segment, consistent with our forward purchase contracts recorded at fair value in accordance with Accounting Standards Codification (“ASC”) 815, Derivatives and Hedging (“ASC 815”). Green coffee is a commodity with quoted market prices in active markets, may be sold without significant further processing, has predictable and insignificant disposal costs and is available for immediate delivery. We estimate the fair value of green coffee based on the quoted market price at the end of each reporting period, with changes in fair value being reported as a component of costs of sales in our Condensed Consolidated Statements of Operations. For the three and nine months ended September 30, 2022, we recognized million, respectively, of unrealized losses on green coffee inventory associated with our forward sales and purchase contracts. For the three and nine months ended September 30, 2021, we recognized |
Warrant Liabilities | Warrant Liabilities We account for warrants assumed in connection with the Transaction (see Note 4) in accordance with the guidance contained in ASC 815, under which the warrants do not meet the criteria for equity treatment and must be recorded as liabilities. Accordingly, we classify the warrants as liabilities at their fair value and adjust the warrants to fair value at each reporting period. This liability is subject to re-measurement at each balance sheet date until exercised, and any change in fair value is recognized in our statement of operations. The Company remeasures the fair value of the Public Warrants (as defined in Note 4) based on the quoted market price of the Public Warrants. The Private Warrants (as defined in Note 4) are valued using a binomial lattice valuation model. For the three and nine months ended September 30, 2022, the Company recognized $5.2 million of losses related to the change in fair value of warrant liabilities. |
Recently issued accounting pronouncements | Recently issued accounting pronouncements Update ASU 2016-02 – Leases (Topic 842) and Update ASU 2018-10 – Codification Improvements to Topic 842, Leases Effective January 1, 2022, we account for leases in accordance with ASC 842, Leases (“ASC 842”). The standard establishes a right-of-use (ROU) model that requires a lessee to recognize a ROU asset and lease liability on the balance sheet for all leases with a term longer than 12 months. Leases will be classified as finance or operating, with classification affecting the pattern and classification of expense recognition in the statement of operations. We adopted ASC 842 using a modified retrospective transition approach as permitted by the amendments of ASU 2018-11 Leases (Topic 842): Target Improvements , which provides an alternative modified retrospective transition method. As a result, we were not required to adjust our comparative period financial information for effects of the standard or make the new required lease disclosures for periods before the date of adoption (i.e., January 1, 2022). We have elected to adopt the package of transition practical We determine if an arrangement is a lease at contract inception. A lease exists when a contract conveys to the customer the right to control the use of identified property, plant, or equipment for a period of time in exchange for consideration. The definition of a lease embodies two conditions: (i) there is an identified asset in the contract that is land or a depreciable asset, and (ii) the customer has a right to control the use of the identified asset. We enter into lease contracts for manufacturing and production facilities, warehouse facilities, vehicles and machinery and equipment. Upon adoption, we recognized lease liabilities on our Condensed Consolidated Balance Sheets. See Note 10 for additional disclosures related to leases. ROU assets are initially measured at cost, which comprises the initial amount of the lease liability adjusted for lease payments made at or before the lease commencement date, plus any initial direct costs incurred, less any lease incentives received. The lease liabilities are initially measured at the present value of the unpaid lease payments at the lease commencement date. Lease expense, for operating leases, is recognized on a straight-line basis over the lease term. Key estimates and judgements include the following: (i) Discount rate – ASC 842 requires a lessee to discount its unpaid lease payments using the rate implicit in the lease or, if that rate cannot be readily determined, its incremental borrowing rate. As we generally do not know the rate implicit in our leases, we use our incremental borrowing rate, based on the information available at the lease commencement date, in determining the present value of our lease payments. Our incremental borrowing rate for a lease is the rate of interest we would have to pay on a collateralized basis to borrow an amount equal to the lease payments under similar terms. (ii) Lease term – The lease term for all of our leases includes the noncancellable period of the lease plus any additional periods covered by either a lessee option to extend (or not to terminate) the lease that is reasonably certain to be exercised. Variable lease payments associated with our leases are recognized when the event, activity, or circumstance in the lease agreement on which those payments are assessed occurs. Variable lease payments are included in both costs of sales and selling, general and administrative expense in our Condensed Consolidated Statements of Operations. We monitor for events or changes in circumstances that require a reassessment of a lease. When a reassessment results in the remeasurement of a lease liability, a corresponding adjustment is made to the carrying amount of the associated ROU asset, unless doing so would reduce the carrying amount of the ROU asset to an amount less than zero. In that case, the amount of the adjustment that would result in a negative ROU asset is recorded in the Condensed Consolidated Statements of Operations. We have elected not to recognize ROU assets and lease liabilities for all short-term leases that have a lease term of 12 months or less. We recognize the lease payments associated with our short-term leases as an expense on a straight-line basis over the lease term. Furthermore, we have elected to combine lease and non-lease components for all contracts. Non-lease components primarily relate to maintenance services related to the leased asset. |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Summary of Significant Accounting Policies | |
Schedule of activity in allowance of credit losses | Three Months Ended September 30, Nine Months Ended September 30, (Thousands) 2022 2021 2022 2021 Balance at beginning of period $ 2,392 $ 3,666 $ 3,749 $ 3,977 Charged to selling, general and administrative expense 364 19 1,286 119 Write-offs (9) (119) (2,288) (530) Total $ 2,747 $ 3,566 $ 2,747 $ 3,566 |
Revenue (Tables)
Revenue (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Revenue | |
Schedule of disaggregation of revenues from sales to external customers | Three Months Ended September 30, Nine Months Ended September 30, (Thousands) 2022 2021 2022 2021 Coffee & tea $ 146,618 $ 111,900 $ 408,914 $ 323,509 Flavors, extracts & ingredients 26,385 25,077 81,448 72,412 Other 483 1,861 2,350 4,585 Green coffee 56,822 42,439 147,437 107,246 Net sales $ 230,308 $ 181,277 $ 640,149 $ 507,752 |
Inventories (Tables)
Inventories (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Inventories | |
Schedule of inventories | (Thousands) September 30, 2022 December 31, 2021 Raw materials $ 68,959 $ 45,079 Finished goods 21,854 14,895 Green coffee 71,432 49,192 Total inventories $ 162,245 $ 109,166 |
Property, Plant and Equipment_2
Property, Plant and Equipment, Net (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Property, Plant and Equipment, Net. | |
Schedule of Property, Plant and Equipment, Net | (Thousands) Depreciable Lives September 30, 2022 December 31, 2021 Land $ 9,092 $ 9,150 Buildings 10-40 years 44,274 43,895 Leasehold improvements 1 923 613 Plant equipment 3-15 years 90,912 88,155 Vehicles and transportation equipment 3-5 years 753 876 IT systems 3-7 years 2,475 2,453 Furniture and fixtures 3-10 years 2,890 2,746 Customer beverage equipment 2 3-5 years 21,879 24,341 Lease right-of-use assets 3 10 — Construction in progress and equipment deposits 23,775 8,025 196,983 180,254 Less: accumulated depreciation (62,852) (52,641) Property, plant and equipment, net $ 134,131 $ 127,613 1 - Leasehold improvements are amortized over the shorter of their estimated useful lives or the related lease life. 2 - Customer beverage equipment consists of brewers held on site at customer locations. 3 - Lease right-of-use assets are amortized over the shorter of the useful life of the asset or the lease term. |
Goodwill (Tables)
Goodwill (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Goodwill. | |
Schedule of carrying goodwill | Beverage (Thousands) Solutions Total Goodwill $ 173,936 $ 173,936 Accumulated impairment loss (76,883) (76,883) Balance at September 30, 2022, net $ 97,053 $ 97,053 |
Intangible Assets, Net (Tables)
Intangible Assets, Net (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Intangible Assets, Net | |
Schedule of intangible assets | September 30, 2022 Accumulated (Thousands) Cost Amortization Net Customer relationships $ 137,500 $ (17,036) $ 120,464 Favorable lease asset 220 (112) 108 Software 890 (513) 377 Intangible assets, net $ 138,610 $ (17,661) $ 120,949 December 31, 2021 Accumulated (Thousands) Cost Amortization Net Customer relationships $ 137,500 $ (12,091) $ 125,409 Favorable lease asset 220 (79) 141 Software 758 (394) 364 Intangible assets, net $ 138,478 $ (12,564) $ 125,914 |
Leases (Tables)
Leases (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Leases | |
Summary of amount of right-of-use lease assets and lease liabilities | (Thousands) Balance Sheet Location September 30, 2022 Right-of-use operating lease assets Other long-term assets $ 10,886 Operating lease liabilities - current Accrued expenses and other current liabilities 2,488 Operating lease liabilities - noncurrent Other long-term liabilities 8,515 |
Schedule of components of lease costs | (Thousands) Three Months Ended September 30, 2022 Nine Months Ended September 30, 2022 Operating lease cost $ 878 $ 1,720 Short-term lease cost 219 443 Total $ 1,097 $ 2,163 September 30, 2022 Weighted-average discount rate 8.5% Weighted-average remaining lease term 5.0 years (Thousands) Nine Months Ended September 30, 2022 Operating cash flows from operating leases $ 844 |
Schedule of future minimum lease payments under non-cancellable operating leases | (Thousands) Remainder of 2022 $ 842 2023 3,283 2024 2,828 2025 2,048 2026 1,435 Thereafter 3,125 Total future minimum lease payments 13,561 Less: imputed interest (2,558) Present value of minimum lease payments $ 11,003 |
Schedule of minimum future lease payments under the previous lease guidance | (Thousands) 2022 $ 4,334 2023 4,332 2024 4,174 2025 3,286 2026 2,377 Thereafter 4,373 Total $ 22,876 |
Debt (Tables)
Debt (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Debt | |
Summary of long-term debt | (Thousands) September 30, 2022 December 31, 2021 Term loan facility $ 175,000 $ — Prior term loan facility — 235,668 Prior ABL facility — 51,890 International trade finance lines 61,806 4,510 International notes payable 4,617 3,126 Other loans 7 25 Total debt 241,430 295,219 Unamortized debt costs (2,942) (4,910) Current maturities of long-term debt (12,011) (8,735) Short-term debt (61,806) (4,510) Long-term debt, net $ 164,671 $ 277,064 |
Derivatives (Tables)
Derivatives (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Derivatives | |
Schedule of fair value of derivative assets and liabilities | (Thousands) Balance Sheet Location September 30, 2022 December 31, 2021 Derivative assets designated as cash flow hedging instruments: Coffee futures contracts 1 Derivative assets $ — $ 172 Coffee options Derivative assets 303 — Total $ 303 $ 172 Derivative assets not designated as cash flow hedging instruments: Forward purchase and sales contracts Derivative assets $ 13,393 $ 13,593 Total 13,393 13,593 Total derivative assets $ 13,696 $ 13,765 Derivative liabilities designated as cash flow hedging instruments: Coffee futures contracts 1 Derivative liabilities $ 703 $ — Coffee options Derivative liabilities — — Total $ 703 $ — Derivative liabilities not designated as cash flow hedging instruments: Forward purchase and sales contracts Derivative liabilities $ 4,654 $ 14,021 Total 4,654 14,021 Total derivative liabilities $ 5,357 $ 14,021 1 - The fair value of coffee futures excludes amounts related to margin accounts. |
Schedule of pre-tax net gains and losses for derivative instruments | Three Months Ended September 30, Nine Months Ended September 30, (Thousands) Statement of Operations Location 2022 2021 2022 2021 Derivative assets designated as cash flow hedging instruments: Net realized gains (losses) on coffee derivatives Costs of sales $ 4,267 $ 1,680 $ 11,098 $ 3,580 Derivative assets and liabilities not designated as cash flow hedging instruments: Net unrealized gains (losses) on forward sales and purchase contracts Costs of sales $ 29 $ (3,329) $ 7,266 $ (3,910) |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Fair Value Measurements | |
Summarizes the fair value of financial instruments | September 30, 2022 (Thousands) Level 1 Level 2 Level 3 Total Assets: Green coffee associated with forward contracts $ — $ 51,323 $ — $ 51,323 Coffee futures contracts — — — — Forward purchase and sales contracts — 13,393 — 13,393 Coffee options 303 — — 303 Total $ 303 $ 64,716 $ — $ 65,019 Liabilities: Coffee futures contracts $ 703 $ — $ — $ 703 Forward purchase and sales contracts — 4,654 — 4,654 Coffee options — — — — Westrock Public Warrants 18,125 — — 18,125 Westrock Private Warrants — — 14,208 14,208 Total $ 18,828 $ 4,654 $ 14,208 $ 37,690 December 31, 2021 (Thousands) Level 1 Level 2 Level 3 Total Assets: Green coffee associated with forward contracts $ — $ 47,845 $ — $ 47,845 Coffee futures contracts 172 — — 172 Forward purchase and sales contracts — 13,593 — 13,593 Coffee options — — — — Total $ 172 $ 61,438 $ — $ 61,610 Liabilities: Forward purchase and sales contracts $ — $ 14,021 $ — $ 14,021 Total $ — $ 14,021 $ — $ 14,021 |
Schedule of change in fair value | (Thousands) Westrock Private Warrants Fair value as of January 1, 2022 $ — Assumption of warrants 11,618 Change in fair value 2,590 Fair value as of September 30, 2022 $ 14,208 |
Schedule of warrants measured at fair value | September 30, 2022 Stock price $ 10.33 Exercise price 11.50 Expected term (years) 5.00 Expected volatility 16.50% Risk-free rate of return 4.03% Dividend yield 0.00% |
Accumulated Other Comprehensi_2
Accumulated Other Comprehensive Income (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Accumulated Other Comprehensive Income. | |
Schedule of changes in accumulated other comprehensive loss, net of tax | Three Months Ended September 30, Nine Months Ended September 30, (Thousands) 2022 2021 2022 2021 Cash flow hedge changes in fair value gain (loss): Balance at beginning of period $ 4,474 $ 7,091 $ 11,759 $ 3,581 Other comprehensive income (loss) before reclassifications 555 4,824 (2,245) 11,369 Amounts reclassified from accumulated comprehensive income (4,267) (1,680) (11,098) (3,580) Tax effect 910 (772) 3,256 (1,907) Net other comprehensive income 1,672 9,463 1,672 9,463 Less: Other comprehensive income attributable to noncontrolling interests — — — — Balance at end of period 1,672 9,463 1,672 9,463 Foreign currency translation gain Balance at beginning of period 250 174 259 239 Other comprehensive income (loss) before reclassifications 1 67 (8) 2 Amounts reclassified from accumulated comprehensive income — — — — Tax effect — — — — Net other comprehensive income 251 241 251 241 Less: Other comprehensive income attributable to noncontrolling interests — — — — Balance at end of period 251 241 251 241 Accumulated other comprehensive income at end of period $ 1,923 $ 9,704 $ 1,923 $ 9,704 |
Equity-Based Compensation (Tabl
Equity-Based Compensation (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Equity-Based Compensation | |
Schedule of number of unvested restricted stock awards | Average Fair Units Market Value Outstanding at December 31, 2021 — $ — Granted 1,109,000 $ 11.51 Forfeited (4,000) $ 11.51 Vested — $ — Outstanding at September 30, 2022 1,105,000 $ 11.51 |
Earnings per Share (Tables)
Earnings per Share (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Earnings per Share | |
Schedule of basic and diluted earning per share | Three Months Ended September 30, Nine Months Ended September 30, (Thousands, except per unit data) 2022 2021 2022 2021 Basic Earnings per Common Share Numerator: Net loss attributable to common shareholders $ (20,246) $ (10,096) $ (44,717) $ (34,472) Denominator: Basic weighted-average common shares outstanding 49,795 34,523 39,819 34,455 Basic Loss per common share $ (0.41) $ (0.29) $ (1.12) $ (1.00) Diluted Earnings per Common Share Numerator: Net loss attributable to common shareholders $ (20,246) $ (10,096) $ (44,717) $ (34,472) Impact of non-participating securities — — — — Net loss attributable to common shareholders - diluted $ (20,246) $ (10,096) $ (44,717) $ (34,472) Denominator: Basic weighted-average common shares outstanding 49,795 34,523 39,819 34,455 Impact of dilutive non-participating securities — — — — Impact of if-converted securities — — — — Weighted-average shares for dilutive earnings per common share 49,795 34,523 39,819 34,455 Dilutive loss per common share $ (0.41) $ (0.29) $ (1.12) $ (1.00) |
Segment Information (Tables)
Segment Information (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Segment Information | |
Summary of selected financial data related to our segments | Three Months Ended September 30, 2022 Sustainable Total of Beverage Sourcing & Intersegment Reportable (Thousands) Solutions Traceability Revenues Segments Net sales $ 173,486 $ 62,809 $ (5,987) $ 230,308 Adjusted EBITDA 15,885 2,028 n/a 17,913 Less: Interest expense 13,404 Income tax benefit (428) Depreciation and amortization 5,816 Acquisition, restructuring and integration expense 3,959 Change in fair value of warrants 5,215 Management and consulting fees (S&D Coffee, Inc. acquisition) 834 Equity-based compensation 705 Mark-to-market adjustments 543 Loss on disposal of property, plant and equipment 459 Other 424 Net loss $ (13,018) Total assets 638,160 111,928 n/a 750,088 Three Months Ended September 30, 2021 Sustainable Total of Beverage Sourcing & Intersegment Reportable (Thousands) Solutions Traceability Revenues Segments Net sales $ 138,838 $ 47,529 $ (5,090) $ 181,277 Adjusted EBITDA 11,462 2,017 n/a 13,479 Less: Interest expense 8,614 Income tax benefit (796) Depreciation and amortization 6,072 Acquisition, restructuring and integration expense 1,829 Management and consulting fees (S&D Coffee, Inc. acquisition) 1,591 Equity-based compensation 306 Mark-to-market adjustments (4) Gain on disposal of property, plant and equipment (390) Other 147 Net loss $ (3,890) Total assets 497,219 85,275 n/a 582,494 Nine Months Ended September 30, 2022 Sustainable Total of Beverage Sourcing & Intersegment Reportable (Thousands) Solutions Traceability Revenues Segments Net sales $ 492,712 $ 169,041 $ (21,604) $ 640,149 Adjusted EBITDA 38,776 3,824 n/a 42,600 Less: Interest expense, net 30,265 Income tax benefit (3,511) Depreciation and amortization 17,782 Acquisition, restructuring and integration expense 8,746 Change in fair value of warrants 5,215 Management and consulting fees (S&D Coffee, Inc. acquisition) 3,035 Equity-based compensation 1,184 Mark-to-market adjustments 793 Loss on disposal of property, plant and equipment 748 Other 1,885 Net loss $ (23,542) Total assets 638,160 111,928 n/a 750,088 Nine Months Ended September 30, 2021 Sustainable Total of Beverage Sourcing & Intersegment Reportable (Thousands) Solutions Traceability Revenues Segments Net sales $ 400,506 $ 121,550 $ (14,304) $ 507,752 Adjusted EBITDA 29,924 3,047 n/a 32,971 Less: Interest expense, net 24,283 Income tax benefit (2,239) Depreciation and amortization 18,386 Acquisition, restructuring and integration expense 3,772 Management and consulting fees (S&D Coffee, Inc. acquisition) 4,791 Equity-based compensation 918 Mark-to-market adjustments (1,979) Gain on disposal of property, plant and equipment (147) Other 1,268 Net loss $ (16,082) Total assets 497,219 85,275 n/a 582,494 |
Summary of net sales information by geographic area | Three Months Ended September 30, Nine Months Ended September 30, (Thousands) 2022 2021 2022 2021 United States $ 181,789 $ 146,642 $ 515,742 $ 423,524 All other countries 48,519 34,635 124,407 84,228 Net sales $ 230,308 $ 181,277 $ 640,149 $ 507,752 |
Related Party Transactions (Tab
Related Party Transactions (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Related Party Transactions | |
Schedule of transactions with related parties | (Thousands) September 30, 2022 December 31, 2021 Short-term related party debt: Brown Brothers Harriman (1) $ — $ 34,199 Subordinated related party debt: Wooster Capital (2) — 9,800 Jo Ellen Ford (1) — 3,500 Total $ — $ 13,300 Three Months Ended September 30, Nine Months Ended September 30, (Thousands) 2022 2021 2022 2021 Interest expense, net: Brown Brothers Harriman (1) — 358 541 936 Wooster Capital (2) 207 152 503 449 Jo Ellen Ford (1) 33 54 139 160 Westrock Finance, LLC (2) — 98 — 290 Total $ 240 $ 662 $ 1,183 $ 1,835 1 – Related through common ownership 2 – Related through common ownership and management |
Organization and Description _2
Organization and Description of Business (Details) $ in Millions | 9 Months Ended | |
Sep. 30, 2022 facility | Aug. 26, 2022 USD ($) | |
Organization and Description of Business | ||
Number of manufacturing facilities | 7 | |
Concord, North Carolina | ||
Organization and Description of Business | ||
Number of manufacturing facilities | 3 | |
North Little Rock, Arkansas | ||
Organization and Description of Business | ||
Number of manufacturing facilities | 2 | |
Kigali, Rwanda | ||
Organization and Description of Business | ||
Number of manufacturing facilities | 1 | |
Johor Bahru, Malaysia | ||
Organization and Description of Business | ||
Number of manufacturing facilities | 1 | |
Riverview | New Company | Wells Fargo | Revolving loan commitment | ||
Organization and Description of Business | ||
Face amount | $ | $ 175 | |
Riverview | New Company | Common Stock PIPE Commitments | ||
Organization and Description of Business | ||
Amount received | $ | $ 205.9 | |
Westrock Coffee Company, LLC. | Falcon Coffees Limited | ||
Organization and Description of Business | ||
Percentage of ownership interest | 85% |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies - Allowance for credit losses (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Allowance for credit loss roll forward | ||||
Balance at beginning of period | $ 2,392 | $ 3,666 | $ 3,749 | $ 3,977 |
Charged to selling, general and administrative expense | 364 | 19 | 1,286 | 119 |
Write-offs | (9) | (119) | (2,288) | (530) |
Total | $ 2,747 | $ 3,566 | $ 2,747 | $ 3,566 |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies - Other (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | Dec. 31, 2021 | |
Summary of Significant Accounting Policies | |||||
Unrealized (loss) gain on derivative instruments | $ (2,802) | $ 2,372 | $ (10,087) | $ 5,882 | |
Gains/Losses related to changes in fair value of warrant liabilities | 5,215 | 5,215 | |||
Right-of-use operating lease assets | 10,886 | 10,886 | |||
Lease liabilities recognized | 11,003 | 11,003 | |||
Green coffee associated with forward contracts | |||||
Summary of Significant Accounting Policies | |||||
Unrealized (loss) gain on derivative instruments | $ 600 | $ 3,300 | $ 8,100 | $ 5,900 | |
ASU 2016-02 | |||||
Summary of Significant Accounting Policies | |||||
Practical expedients election | true | ||||
ASU 2016-02 | Adjustment | |||||
Summary of Significant Accounting Policies | |||||
Right-of-use operating lease assets | $ 13,000 | ||||
Lease liabilities recognized | $ 13,000 |
De-SPAC Merger Transaction - Ot
De-SPAC Merger Transaction - Other Information (Details) - USD ($) | 2 Months Ended | 3 Months Ended | 9 Months Ended | ||
Aug. 26, 2022 | Aug. 26, 2022 | Sep. 30, 2022 | Sep. 30, 2022 | Dec. 31, 2021 | |
De-SPAC Merger Transaction | |||||
Preferred dividends paid | $ 4,400,000 | $ 4,380,000 | |||
Goodwill | $ 97,053,000 | 97,053,000 | $ 97,053,000 | ||
Intangible assets | $ 0 | 0 | 120,949,000 | 120,949,000 | 125,914,000 |
Transaction cost incurred capitalized | 24,200,000 | $ 24,200,000 | |||
Transaction costs related to the issuance of shares | 24,200,000 | ||||
Deferred transaction cost | $ 0 | 0 | $ 0 | ||
Payment of preferred equity issuance costs | 1,250,000 | ||||
Net gain (loss) on extinguishment | $ (2,870,000) | ||||
Common Stock | |||||
De-SPAC Merger Transaction | |||||
Issuance of common shares related to conversion of debt to equity (in units) | 2,500,000 | 2,500,000 | |||
Term Loan facility | |||||
De-SPAC Merger Transaction | |||||
Proceeds from line of credit | 175,000,000 | ||||
Riverview | |||||
De-SPAC Merger Transaction | |||||
Number of shares issued, value | $ 49,800,000 | ||||
Number of shares issued | 12,868,151 | ||||
Number of shares issued for each unit | 1 | 1 | |||
Transaction cost incurred capitalized | $ 17,100,000 | $ 17,100,000 | |||
Transaction cost incurred expenses | 17,100,000 | ||||
Payment of preferred equity issuance costs | 1,300,000 | ||||
Net gain (loss) on extinguishment | (2,900,000) | ||||
Riverview | Common Stock | |||||
De-SPAC Merger Transaction | |||||
Number of shares issued, value | $ 34,855,535 | ||||
Number of shares issued for each unit | 0.1049203474320 | 0.1049203474320 | |||
Common stock par value ( in dollars per share) | $ 0.01 | $ 0.01 | |||
Issuance of common shares related to conversion of debt to equity (in units) | 2,220,305 | ||||
Riverview | Common Stock PIPE Commitments | |||||
De-SPAC Merger Transaction | |||||
Number of shares issued | 1,910,000 | ||||
Series Redeemable Common Equivalent Preferred Units | Riverview | |||||
De-SPAC Merger Transaction | |||||
Number of shares issued for each unit | 0.1086138208640 | 0.1086138208640 | |||
Series B Redeemable Common Equivalent Preferred Units | Riverview | |||||
De-SPAC Merger Transaction | |||||
Number of shares issued for each unit | 0.1049203474320 | 0.1049203474320 | |||
Series A Redeemable Common Equivalent Preferred Shares | Riverview | |||||
De-SPAC Merger Transaction | |||||
Number of shares issued for each unit | 0.1086138208740 | 0.1086138208740 | |||
Number of new stock classified as temporary equity issued | 23,587,952 | ||||
Series B Redeemable Common Equivalent Preferred Shares | Riverview | |||||
De-SPAC Merger Transaction | |||||
Number of shares issued for each unit | 0.0919280171940 | 0.0919280171940 | |||
Class A share | Riverview | |||||
De-SPAC Merger Transaction | |||||
Number of shares issued for each unit | 1 | 1 | |||
New Company | Riverview | Common Stock PIPE Commitments | |||||
De-SPAC Merger Transaction | |||||
Number of shares issued | 20,590,000 | ||||
Amount received | $ 205,900,000 | $ 205,900,000 | |||
New Company | Riverview | Wells Fargo | Revolving loan commitment | |||||
De-SPAC Merger Transaction | |||||
Face amount | $ 175,000,000 | $ 175,000,000 |
De-SPAC Merger Transaction - Co
De-SPAC Merger Transaction - Common Stock Warrants (Details) | 9 Months Ended |
Sep. 30, 2022 D USD ($) $ / shares shares | |
Common Stock Warrants | |
Warrant to purchase each share | shares | 1 |
Warrant exercise price (in dollars per share) | $ / shares | $ 11.50 |
Westrock Public Warrants | |
Common Stock Warrants | |
Warrants | shares | 12,500,000 |
Warrant expiry term | 5 years |
Redemption price | $ / shares | $ 0.01 |
Number of trading days | D | 20 |
Number of trading days before warrant redemption notice | D | 30 |
Number of business days | D | 3 |
Share price (in dollars per share) | $ / shares | $ 18 |
Number of business days after closing | $ | 60 |
Westrock Public Warrants | Minimum | |
Common Stock Warrants | |
Term of redemption notice to share holders | 30 days |
Westrock Private Warrants | |
Common Stock Warrants | |
Warrants | shares | 7,400,000 |
Warrant exercisable term | 30 days |
Revenue - Revenue from Forward
Revenue - Revenue from Forward Contracts (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Derivatives | ||||
Net unrealized gains (losses) | $ (2,802) | $ 2,372 | $ (10,087) | $ 5,882 |
Forward sales contracts | ||||
Derivatives | ||||
Net unrealized gains (losses) | (3,300) | 7,300 | (3,900) | |
Revenue | $ 56,600 | $ 42,300 | $ 147,000 | $ 106,200 |
Revenue - Contract Estimates (D
Revenue - Contract Estimates (Details) - USD ($) $ in Millions | Sep. 30, 2022 | Dec. 31, 2021 |
Revenue | ||
Accrued sales incentives | $ 1.3 | $ 1.9 |
Revenue - Contract Balances (De
Revenue - Contract Balances (Details) - USD ($) | Sep. 30, 2022 | Dec. 31, 2021 |
Revenue | ||
Capitalized contract costs | $ 0 | $ 0 |
Revenue | ||
Revenue | ||
Receivables from contracts with customers | $ 101,000,000 | $ 89,000,000 |
Revenue - Disaggregated Revenue
Revenue - Disaggregated Revenue (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Revenue | ||||
Net sales | $ 230,308 | $ 181,277 | $ 640,149 | $ 507,752 |
Repurchase obligation | 284,600 | 284,600 | ||
Sustainable, Sourcing and Traceability | ||||
Revenue | ||||
Repurchase obligation | 11,000 | 11,000 | ||
Coffee & tea | ||||
Revenue | ||||
Net sales | 146,618 | 111,900 | 408,914 | 323,509 |
Flavors, extracts & ingredients | ||||
Revenue | ||||
Net sales | 26,385 | 25,077 | 81,448 | 72,412 |
Other | ||||
Revenue | ||||
Net sales | 483 | 1,861 | 2,350 | 4,585 |
Green coffee | ||||
Revenue | ||||
Net sales | $ 56,822 | $ 42,439 | $ 147,437 | $ 107,246 |
Inventories (Details)
Inventories (Details) - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
Inventories | ||
Raw materials | $ 68,959 | $ 45,079 |
Finished goods | 21,854 | 14,895 |
Green coffee | 71,432 | 49,192 |
Total inventories | $ 162,245 | $ 109,166 |
Property, Plant and Equipment_3
Property, Plant and Equipment, Net (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | Dec. 31, 2021 | |
Property, Plant and Equipment, Net | |||||
Property, plant and equipment, gross | $ 196,983 | $ 196,983 | $ 180,254 | ||
Less: accumulated depreciation | (62,852) | (62,852) | (52,641) | ||
Property, plant and equipment, net | 134,131 | 134,131 | 127,613 | ||
Depreciation expense | 4,100 | $ 4,400 | 12,700 | $ 13,400 | |
Land | |||||
Property, Plant and Equipment, Net | |||||
Property, plant and equipment, gross | 9,092 | 9,092 | 9,150 | ||
Building | |||||
Property, Plant and Equipment, Net | |||||
Property, plant and equipment, gross | 44,274 | 44,274 | 43,895 | ||
Leasehold improvements | |||||
Property, Plant and Equipment, Net | |||||
Property, plant and equipment, gross | 923 | 923 | 613 | ||
Plant equipment | |||||
Property, Plant and Equipment, Net | |||||
Property, plant and equipment, gross | 90,912 | 90,912 | 88,155 | ||
Vehicles and transportation equipment | |||||
Property, Plant and Equipment, Net | |||||
Property, plant and equipment, gross | 753 | 753 | 876 | ||
IT systems | |||||
Property, Plant and Equipment, Net | |||||
Property, plant and equipment, gross | 2,475 | 2,475 | 2,453 | ||
Furniture and fixtures | |||||
Property, Plant and Equipment, Net | |||||
Property, plant and equipment, gross | 2,890 | 2,890 | 2,746 | ||
Customer beverage equipment | |||||
Property, Plant and Equipment, Net | |||||
Property, plant and equipment, gross | 21,879 | 21,879 | 24,341 | ||
Lease right-of-use assets | |||||
Property, Plant and Equipment, Net | |||||
Property, plant and equipment, gross | 10 | 10 | |||
Construction in progress and equipment deposits | |||||
Property, Plant and Equipment, Net | |||||
Property, plant and equipment, gross | $ 23,775 | $ 23,775 | $ 8,025 | ||
Minimum | Building | |||||
Property, Plant and Equipment, Net | |||||
Useful life | 10 years | 10 years | |||
Minimum | Plant equipment | |||||
Property, Plant and Equipment, Net | |||||
Useful life | 3 years | 3 years | |||
Minimum | Vehicles and transportation equipment | |||||
Property, Plant and Equipment, Net | |||||
Useful life | 3 years | 3 years | |||
Minimum | IT systems | |||||
Property, Plant and Equipment, Net | |||||
Useful life | 3 years | 3 years | |||
Minimum | Furniture and fixtures | |||||
Property, Plant and Equipment, Net | |||||
Useful life | 3 years | 3 years | |||
Minimum | Customer beverage equipment | |||||
Property, Plant and Equipment, Net | |||||
Useful life | 3 years | 3 years | |||
Maximum | Building | |||||
Property, Plant and Equipment, Net | |||||
Useful life | 40 years | 40 years | |||
Maximum | Plant equipment | |||||
Property, Plant and Equipment, Net | |||||
Useful life | 15 years | 15 years | |||
Maximum | Vehicles and transportation equipment | |||||
Property, Plant and Equipment, Net | |||||
Useful life | 5 years | 5 years | |||
Maximum | IT systems | |||||
Property, Plant and Equipment, Net | |||||
Useful life | 7 years | 7 years | |||
Maximum | Furniture and fixtures | |||||
Property, Plant and Equipment, Net | |||||
Useful life | 10 years | 10 years | |||
Maximum | Customer beverage equipment | |||||
Property, Plant and Equipment, Net | |||||
Useful life | 5 years | 5 years |
Goodwill (Details)
Goodwill (Details) - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
Goodwill | ||
Goodwill | $ 173,936 | |
Accumulated impairment loss | (76,883) | |
Balance at end of period | 97,053 | $ 97,053 |
Beverage Solutions | ||
Goodwill | ||
Goodwill | 173,936 | |
Accumulated impairment loss | (76,883) | |
Balance at end of period | $ 97,053 |
Intangible Assets, Net (Details
Intangible Assets, Net (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | Dec. 31, 2021 | |
Intangible Assets, Net | |||||
Cost | $ 138,610 | $ 138,610 | $ 138,478 | ||
Accumulated Amortization | (17,661) | (17,661) | (12,564) | ||
Net | 120,949 | 120,949 | 125,914 | ||
Amortization expenses | 1,700 | $ 1,700 | $ 5,000 | $ 5,000 | |
Useful life | 20 years | ||||
Customer relationships | |||||
Intangible Assets, Net | |||||
Cost | 137,500 | $ 137,500 | 137,500 | ||
Accumulated Amortization | (17,036) | (17,036) | (12,091) | ||
Net | 120,464 | 120,464 | 125,409 | ||
Favorable lease assets | |||||
Intangible Assets, Net | |||||
Cost | 220 | 220 | 220 | ||
Accumulated Amortization | (112) | (112) | (79) | ||
Net | 108 | 108 | 141 | ||
Software | |||||
Intangible Assets, Net | |||||
Cost | 890 | 890 | 758 | ||
Accumulated Amortization | (513) | (513) | (394) | ||
Net | $ 377 | $ 377 | $ 364 |
Leases - Other (Details)
Leases - Other (Details) | Sep. 30, 2022 |
Leases | |
Termination term (in years) | 1 year |
Minimum | |
Leases | |
Remaining non-cancelable lease term (in years) | 1 year |
Option to extend term (in years) | 1 year |
Maximum | |
Leases | |
Remaining non-cancelable lease term (in years) | 22 years |
Option to extend term (in years) | 10 years |
Leases - Schedule of amount of
Leases - Schedule of amount of right-of-use lease assets and lease liabilities (Details) $ in Thousands | Sep. 30, 2022 USD ($) |
Right-of-use lease assets and lease liabilities | |
Right-of-use operating lease assets | $ 10,886 |
Right-of-use operating lease assets, Balance sheet location | Other long-term assets |
Operating lease liabilities - current | $ 2,488 |
Operating lease liabilities - current, Balance sheet location | Accrued expenses and other current liabilities |
Operating lease liabilities - noncurrent | $ 8,515 |
Operating lease liabilities - noncurrent, Balance sheet location | Other long-term liabilities |
Leases - Schedule of components
Leases - Schedule of components of lease costs (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended |
Sep. 30, 2022 | Sep. 30, 2022 | |
Lease Cost | ||
Operating lease cost | $ 878 | $ 1,720 |
Short-term lease cost | 219 | 443 |
Total | $ 1,097 | $ 2,163 |
Leases - Schedule of weighted a
Leases - Schedule of weighted average discount rate and remaining lease term (Details) | Sep. 30, 2022 |
Leases | |
Weighted-average discount rate | 8.50% |
Weighted-average remaining lease term | 5 years |
Leases - Schedule of supplement
Leases - Schedule of supplemental cashflow information (Details) $ in Thousands | 9 Months Ended |
Sep. 30, 2022 USD ($) | |
Leases | |
Operating cash flows from operating lease | $ 844 |
Leases - Schedule of future min
Leases - Schedule of future minimum lease payments under non-cancellable operating leases (Details) $ in Thousands | Sep. 30, 2022 USD ($) |
Leases | |
Remainder of 2022 | $ 842 |
2023 | 3,283 |
2024 | 2,828 |
2025 | 2,048 |
2026 | 1,435 |
Thereafter | 3,125 |
Total future minimum lease payments | 13,561 |
Less: imputed interest | (2,558) |
Present value of minimum lease payments | $ 11,003 |
Leases - Schedule of minimum fu
Leases - Schedule of minimum future lease payments under the previous lease guidance (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |
Sep. 30, 2021 | Sep. 30, 2021 | Dec. 31, 2021 | |
Leases | |||
Rent expense | $ 1,000 | $ 3,200 | |
Operating leases | |||
2022 | $ 4,334 | ||
2023 | 4,332 | ||
2024 | 4,174 | ||
2025 | 3,286 | ||
2026 | 2,377 | ||
Thereafter | 4,373 | ||
Total | $ 22,876 |
Debt - Other (Details)
Debt - Other (Details) - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
Debt | ||
Total debt | $ 241,430 | $ 295,219 |
Unamortized debt costs | (2,942) | (4,910) |
Current maturities of long-term debt | (12,011) | (8,735) |
Short-term debt | (61,806) | (4,510) |
Long-term debt, net | 164,671 | 277,064 |
Term loan | ||
Debt | ||
Total debt | 175,000 | |
Prior term loan facility | ||
Debt | ||
Total debt | 235,668 | |
ABL facility | ||
Debt | ||
Total debt | 51,890 | |
International trade finance lines | ||
Debt | ||
Total debt | 61,806 | 4,510 |
International notes payable | ||
Debt | ||
Total debt | 4,617 | 3,126 |
Other loans | ||
Debt | ||
Total debt | $ 7 | $ 25 |
Debt - Additional Information (
Debt - Additional Information (Details) | 9 Months Ended | |||||||||
Sep. 30, 2022 USD ($) item $ / shares shares | Aug. 29, 2022 USD ($) | Aug. 26, 2022 shares | Jul. 14, 2022 USD ($) $ / shares shares | Feb. 28, 2020 USD ($) | Sep. 30, 2022 USD ($) item $ / shares shares | Jun. 16, 2022 USD ($) | Apr. 29, 2022 USD ($) | Mar. 16, 2022 USD ($) | Dec. 31, 2021 USD ($) shares | |
Debt | ||||||||||
Debt finance costs | $ 6,000,000 | |||||||||
Variable rate (as a percent) | 0.10% | |||||||||
Number of financial covenants | item | 2 | 2 | ||||||||
Term of anniversary closing date | 18 months | |||||||||
Early termination fees | $ 1,580,000 | |||||||||
Unamortized deferred financing fees written off | 4,296,000 | |||||||||
Short-term debt | $ 61,806,000 | $ 61,806,000 | $ 4,510,000 | |||||||
Common stock shares issued (in shares) | shares | 73,034,000 | 73,034,000 | 34,523,000 | |||||||
Proceeds from issuance of common stock | $ 255,737,000 | |||||||||
Wooster Capital(2) | ||||||||||
Debt | ||||||||||
Proceeds from issuance of common stock | $ 21,500,000 | |||||||||
Number of shares issued | shares | 2,150,000 | |||||||||
Purchase price (in dollars per share) | $ / shares | $ 10 | |||||||||
Pre-funded commitment | $ 11,700,000 | |||||||||
Revolving credit facility | ||||||||||
Debt | ||||||||||
Debt finance costs | $ 3,000,000 | |||||||||
Face amount | 175,000,000 | |||||||||
Variable rate (as a percent) | 5.70% | |||||||||
Term Loan facility | ||||||||||
Debt | ||||||||||
Debt finance costs | 3,000,000 | |||||||||
Face amount | $ 175,000,000 | |||||||||
Line of credit, periodic payment term | 3 years | |||||||||
Periodic payment principal amount | $ 2,200,000 | |||||||||
Percentage of original principal amount | 1.25% | |||||||||
Term Loan facility | Year four | ||||||||||
Debt | ||||||||||
Periodic payment principal amount | $ 3,300,000 | |||||||||
Percentage of original principal amount | 1.875% | |||||||||
Term Loan facility | Year five | ||||||||||
Debt | ||||||||||
Periodic payment principal amount | $ 4,400,000 | |||||||||
Percentage of original principal amount | 2.50% | |||||||||
Standby letter of credit | ||||||||||
Debt | ||||||||||
Letters of credit outstanding | $ 2,600,000 | $ 2,600,000 | ||||||||
Minimum | ||||||||||
Debt | ||||||||||
Variable rate (as a percent) | 0.50% | |||||||||
Net Leverage Ratio | 4 | 4 | ||||||||
Minimum | Revolving credit facility | ||||||||||
Debt | ||||||||||
Line of credit, Commitment fee percentage (as a percent) | 0.20% | |||||||||
Maximum | ||||||||||
Debt | ||||||||||
Interest coverage ratio | 1.50 | 1.50 | ||||||||
Net Leverage Ratio | 4.50 | 4.50 | ||||||||
Maximum | Revolving credit facility | ||||||||||
Debt | ||||||||||
Line of credit, Commitment fee percentage (as a percent) | 0.35% | |||||||||
Base rate | One Month Interest Period [Member] | ||||||||||
Debt | ||||||||||
Interest rate (as a percent) | 1% | |||||||||
Interest period | 1 month | |||||||||
Base rate | Maximum | ||||||||||
Debt | ||||||||||
Variable rate (as a percent) | 1.50% | |||||||||
SOFR | One Month Interest Period [Member] | ||||||||||
Debt | ||||||||||
Interest period | 1 month | |||||||||
SOFR | Three Month Interest Period [Member] | ||||||||||
Debt | ||||||||||
Variable rate (as a percent) | 0.15% | |||||||||
Interest period | 3 months | |||||||||
SOFR | Six Month Interest Period [Member] | ||||||||||
Debt | ||||||||||
Variable rate (as a percent) | 0.25% | |||||||||
Interest period | 6 months | |||||||||
SOFR | Minimum | ||||||||||
Debt | ||||||||||
Variable rate (as a percent) | 1.50% | |||||||||
SOFR | Maximum | ||||||||||
Debt | ||||||||||
Variable rate (as a percent) | 2.50% | |||||||||
NYFRB | ||||||||||
Debt | ||||||||||
Interest rate (as a percent) | 0.50% | |||||||||
Short-term trade finance facility | ||||||||||
Debt | ||||||||||
Interest rate (as a percent) | 6.50% | 6.50% | ||||||||
Long-term note payable | ||||||||||
Debt | ||||||||||
Interest rate (as a percent) | 7% | 7% | ||||||||
Convertible Debt | Wooster Capital(2) | ||||||||||
Debt | ||||||||||
Interest rate (as a percent) | 8% | |||||||||
Face amount | $ 11,700,000 | |||||||||
Debt term | 1 year | |||||||||
Debt converted into shares | shares | 1,170,000 | |||||||||
Term Loan Due in 2025 | ||||||||||
Debt | ||||||||||
Early termination fees | $ 1,600,000 | |||||||||
Unamortized deferred financing fees written off | 4,000,000 | |||||||||
Term Loan Due in 2025 | Westrock Coffee Company, LLC. | ||||||||||
Debt | ||||||||||
Face amount | 240,000,000 | |||||||||
US Asset Based Lending Facility | ||||||||||
Debt | ||||||||||
Debt finance costs | 1,300,000 | |||||||||
Unamortized deferred financing fees written off | 300,000 | |||||||||
US Asset Based Lending Facility | Westrock Coffee Company, LLC. | ||||||||||
Debt | ||||||||||
Face amount | $ 90,000,000 | |||||||||
International Debt and Lending Facilities | Westrock Coffee Company, LLC. | ||||||||||
Debt | ||||||||||
Short-term debt | $ 700,000 | $ 700,000 | ||||||||
International Debt and Lending Facilities | Westrock Coffee Company, LLC. | Mortgage backed securities | ||||||||||
Debt | ||||||||||
Long term note | $ 1,900,000 | $ 1,900,000 | ||||||||
International Debt and Lending Facilities, 9.5%, 30 September 2022 | Westrock Coffee Company, LLC. | ||||||||||
Debt | ||||||||||
Interest rate (as a percent) | 9.50% | 9.50% | ||||||||
Working Capital Trade Finance Facility | Westrock Coffee Company, LLC. | ||||||||||
Debt | ||||||||||
Maximum borrowing capacity | $ 62,500,000 | $ 55,000,000 | $ 50,000,000 | |||||||
Short-term debt | $ 49,600,000 | $ 49,600,000 | $ 49,300,000 | |||||||
Agent fees percentage (as a percent) | 0.25% | |||||||||
Working Capital Trade Finance Facility | Westrock Coffee Company, LLC. | Mortgage backed securities | ||||||||||
Debt | ||||||||||
Short-term debt | $ 9,100,000 | $ 9,100,000 | ||||||||
Number of mortgage-backed lending facilities | item | 2 | 2 | ||||||||
Working Capital Trade Finance Facility | Westrock Coffee Company, LLC. | Prime rate | Minimum | ||||||||||
Debt | ||||||||||
Interest rate (as a percent) | 1.50% | 1.50% | ||||||||
Working Capital Trade Finance Facility | Westrock Coffee Company, LLC. | Prime rate | Maximum | ||||||||||
Debt | ||||||||||
Interest rate (as a percent) | 5% | 5% | ||||||||
Subordinated related party debt | Wooster Capital, LLC ("Wooster") and Jo Ellen Ford | ||||||||||
Debt | ||||||||||
Interest rate (as a percent) | 6% | |||||||||
Face amount | $ 13,300,000 | |||||||||
Debt term | 10 years | |||||||||
Grace period | 6 months | |||||||||
Common stock shares issued (in shares) | shares | 1,330,000 | 1,330,000 | ||||||||
Par value (in dollars per share) | $ / shares | $ 0.01 | $ 0.01 |
Series A Preferred Shares (Deta
Series A Preferred Shares (Details) | 3 Months Ended | 9 Months Ended | |
Sep. 30, 2022 USD ($) D $ / shares shares | Sep. 30, 2022 USD ($) D $ / shares shares | Dec. 31, 2021 shares | |
Temporary Equity [Line Items] | |||
Conversion price | $ 11.50 | $ 11.50 | |
Term of anniversary | 5 years 6 months | ||
Number of shares converted | $ | 1 | 1 | |
Threshold number of days | D | 10 | 10 | |
Redemption price per share | $ 18.50 | $ 18.50 | |
Series A Convertible Preferred Shares [Member] | |||
Temporary Equity [Line Items] | |||
Shares issued | shares | 23,587,952 | 23,587,952 | 23,588,000 |
Liquidation preference per share | $ 11.50 | $ 11.50 | |
Conversion price | $ 11.50 | 11.50 | |
Accretion value | $ | $ 0 | ||
Series A Convertible Preferred Shares [Member] | Minimum | |||
Temporary Equity [Line Items] | |||
Redemption price per share | $ 18.50 | $ 18.50 |
Derivatives - Other (Details)
Derivatives - Other (Details) lb in Millions, $ in Millions | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2022 USD ($) lb | Sep. 30, 2021 USD ($) lb | Sep. 30, 2022 USD ($) lb | Sep. 30, 2021 USD ($) lb | Dec. 31, 2021 lb | |
Derivatives | |||||
Net gain (loss) reported in AOCI expected to be reclassified | $ | $ (1.6) | ||||
Cash flow hedging | |||||
Derivatives | |||||
Gain (loss) reclassified from accumulated other comprehensive income | $ | $ 1.7 | $ 3.6 | |||
Net gain (loss) reported in AOCI expected to be reclassified | $ | $ 4.3 | $ 11.1 | |||
Coffee futures contracts | Cash flow hedging | |||||
Derivatives | |||||
Notional amount of derivative purchased | lb | 8.8 | 26.5 | |||
Coffee futures contracts | Designated as hedges | Cash flow hedging | |||||
Derivatives | |||||
Derivative notional amount | lb | 11.4 | 7.9 | |||
Coffee options | Cash flow hedging | |||||
Derivatives | |||||
Notional amount of derivative purchased | lb | 57 | 75.1 |
Derivatives - Fair value of ass
Derivatives - Fair value of assets and liabilities (Details) - USD ($) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
Derivatives | ||
Fair value of derivative assets | $ 13,696 | $ 13,765 |
Fair value of derivative liabilities | 5,357 | 14,021 |
Designated as hedges | ||
Derivatives | ||
Fair value of derivative assets | 303 | 172 |
Fair value of derivative liabilities | 703 | |
Designated as hedges | Coffee futures contracts | Derivative assets | ||
Derivatives | ||
Fair value of derivative assets | 172 | |
Designated as hedges | Coffee futures contracts | Derivative liabilities | ||
Derivatives | ||
Fair value of derivative liabilities | 703 | |
Designated as hedges | Coffee options | Derivative assets | ||
Derivatives | ||
Fair value of derivative assets | 303 | |
Not designated as hedges | ||
Derivatives | ||
Fair value of derivative assets | 13,393 | 13,593 |
Fair value of derivative liabilities | 4,654 | 14,021 |
Not designated as hedges | Forward purchase and sales contracts | Derivative assets | ||
Derivatives | ||
Fair value of derivative assets | 13,393 | 13,593 |
Not designated as hedges | Forward purchase and sales contracts | Derivative liabilities | ||
Derivatives | ||
Fair value of derivative liabilities | $ 4,654 | $ 14,021 |
Derivatives - Pre-tax net gains
Derivatives - Pre-tax net gains and losses (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Derivatives | ||||
Net unrealized gains (losses) | $ (2,802) | $ 2,372 | $ (10,087) | $ 5,882 |
Designated as hedges | Cash flow hedging | Coffee derivatives | Cost of sales | ||||
Derivatives | ||||
Net realized gains (losses) | 4,267 | 1,680 | 11,098 | 3,580 |
Not designated as hedges | Cash flow hedging | Forward sales and purchase contracts | Cost of sales | ||||
Derivatives | ||||
Net unrealized gains (losses) | $ 29 | $ (3,329) | $ 7,266 | $ (3,910) |
Fair Value Measurements - Other
Fair Value Measurements - Other Information (Details) - USD ($) $ / shares in Units, $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 |
Fair Value Measurements | ||
Assets | $ 65,019 | $ 61,610 |
Liabilities | $ 37,690 | 14,021 |
Warrant exercise price (in dollars per share) | $ 11.50 | |
Green coffee associated with forward contracts | ||
Fair Value Measurements | ||
Assets | $ 51,323 | 47,845 |
Coffee futures contracts | ||
Fair Value Measurements | ||
Assets | 172 | |
Liabilities | 703 | |
Forward purchase and sales contracts | ||
Fair Value Measurements | ||
Assets | 13,393 | 13,593 |
Liabilities | 4,654 | 14,021 |
Coffee options | ||
Fair Value Measurements | ||
Assets | 303 | |
Westrock Public Warrants | ||
Fair Value Measurements | ||
Liabilities | $ 18,125 | |
Warrant exercise price (in dollars per share) | $ 1.45 | |
Westrock Private Warrants | ||
Fair Value Measurements | ||
Liabilities | $ 14,208 | |
Warrant exercise price (in dollars per share) | $ 1.92 | |
Level 1 | ||
Fair Value Measurements | ||
Assets | $ 303 | 172 |
Liabilities | 18,828 | |
Level 1 | Coffee futures contracts | ||
Fair Value Measurements | ||
Assets | 172 | |
Liabilities | 703 | |
Level 1 | Coffee options | ||
Fair Value Measurements | ||
Assets | 303 | |
Level 1 | Westrock Public Warrants | ||
Fair Value Measurements | ||
Liabilities | 18,125 | |
Level 2 | ||
Fair Value Measurements | ||
Assets | 64,716 | 61,438 |
Liabilities | 4,654 | 14,021 |
Level 2 | Green coffee associated with forward contracts | ||
Fair Value Measurements | ||
Assets | 51,323 | 47,845 |
Level 2 | Forward purchase and sales contracts | ||
Fair Value Measurements | ||
Assets | 13,393 | 13,593 |
Liabilities | 4,654 | $ 14,021 |
Level 3 | ||
Fair Value Measurements | ||
Liabilities | 14,208 | |
Level 3 | Westrock Private Warrants | ||
Fair Value Measurements | ||
Liabilities | $ 14,208 |
Fair Value Measurements - Chang
Fair Value Measurements - Change in Fair Value (Details) - Level 3 - Westrock Private Warrants $ in Thousands | 9 Months Ended |
Sep. 30, 2022 USD ($) | |
Fair Value Measurements | |
Assumption of warrants | $ 11,618 |
Change in fair value | 2,590 |
Fair value as of ending | $ 14,208 |
Fair Value Measurements - Measu
Fair Value Measurements - Measurements (Details) | Sep. 30, 2022 $ / shares Y |
Stock price | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |
Measurement inputs | 10.33 |
Exercise price | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |
Measurement inputs | 11.50 |
Expected term (years) | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |
Measurement inputs | Y | 5 |
Expected volatility | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |
Measurement inputs | 16.50 |
Risk-free rate of return | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |
Measurement inputs | 4.03 |
Dividend yield | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |
Measurement inputs | 0 |
Accumulated Other Comprehensi_3
Accumulated Other Comprehensive Income - Schedule of changes in accumulated other comprehensive loss, net of tax (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Accumulated Other Comprehensive Income | ||||
Balance at beginning of period | $ (207,696) | $ (159,886) | $ (175,998) | $ (139,741) |
Net other comprehensive income | (2,801) | 2,439 | (10,095) | 5,884 |
Balance at end of period | 25,527 | (167,140) | 25,527 | (167,140) |
Cash flow hedge changes in fair value gain (loss) | ||||
Accumulated Other Comprehensive Income | ||||
Balance at beginning of period | 4,474 | 7,091 | 11,759 | 3,581 |
Other comprehensive income (loss) before reclassifications | 555 | 4,824 | (2,245) | 11,369 |
Amounts reclassified from accumulated comprehensive income | (4,267) | (1,680) | (11,098) | (3,580) |
Tax effect | 910 | (772) | 3,256 | (1,907) |
Net other comprehensive income | 1,672 | 9,463 | 1,672 | 9,463 |
Balance at end of period | 1,672 | 9,463 | 1,672 | 9,463 |
Foreign currency translation gain | ||||
Accumulated Other Comprehensive Income | ||||
Balance at beginning of period | 250 | 174 | 259 | 239 |
Other comprehensive income (loss) before reclassifications | 1 | 67 | (8) | 2 |
Net other comprehensive income | 251 | 241 | 251 | 241 |
Balance at end of period | 251 | 241 | 251 | 241 |
Accumulated other comprehensive income (loss) | ||||
Accumulated Other Comprehensive Income | ||||
Balance at end of period | $ 1,923 | $ 9,704 | $ 1,923 | $ 9,704 |
Equity-Based Compensation - Nar
Equity-Based Compensation - Narrative (Details) - Restricted Awards $ / shares in Units, $ in Millions | 3 Months Ended | 9 Months Ended | |
Sep. 30, 2022 USD ($) shares | Sep. 30, 2022 shares | Aug. 31, 2022 D $ / shares | |
Share-Based Payment Arrangement, Employee [Member] | |||
Equity-Based Compensation | |||
Granted | 1,100,000 | ||
Units granted (in value) | $ | $ 12.8 | ||
Vesting period | 3 years | ||
2022 Equity Plan | |||
Equity-Based Compensation | |||
Granted | 1,109,000 | ||
Shares available for future issuance | 3,500,000 | 3,500,000 | |
Number of trading days | D | 10 | ||
Number of consecutive trading days | D | 30 | ||
Share price (in dollars per share) | $ / shares | $ 18.50 |
Equity-Based Compensation - Res
Equity-Based Compensation - Restricted Awards (Details) - Restricted Awards - 2022 Equity Plan | 9 Months Ended |
Sep. 30, 2022 $ / shares shares | |
Units | |
Granted | shares | 1,109,000 |
Forfeited | shares | (4,000) |
Balance at end of period (shares) | shares | 1,105,000 |
Average Fair Market Value | |
Granted (in dollars per share) | $ / shares | $ 11.51 |
Forfeited (in dollars per share) | $ / shares | 11.51 |
Balance at end of period (shares) | $ / shares | $ 11.51 |
Earnings per Share (Details)
Earnings per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Numerator: | ||||
Net loss attributable to common shareholders | $ (20,246) | $ (10,096) | $ (44,717) | $ (34,472) |
Denominator: | ||||
Weighted-average common shares outstanding - basic | 49,795 | 34,523 | 39,819 | 34,455 |
Basic Loss per common share | $ (0.41) | $ (0.29) | $ (1.12) | $ (1) |
Numerator: | ||||
Net loss attributable to common shareholders | $ (20,246) | $ (10,096) | $ (44,717) | $ (34,472) |
Net loss attributable to common shareholders - diluted | $ (20,246) | $ (10,096) | $ (44,717) | $ (34,472) |
Denominator: | ||||
Weighted-average common shares outstanding - basic | 49,795 | 34,523 | 39,819 | 34,455 |
Weighted-average common shares outstanding - diluted | 49,795 | 34,523 | 39,819 | 34,455 |
Dilutive loss per common share | $ (0.41) | $ (0.29) | $ (1.12) | $ (1) |
Warrants | ||||
Earnings per Share | ||||
Antidilutive securities | 19,900 | |||
Units options | ||||
Earnings per Share | ||||
Antidilutive securities | 1,600 | 15,300 | ||
Denominator: | ||||
Impact of if-converted securities | 1,600 | |||
Restricted common units | ||||
Earnings per Share | ||||
Antidilutive securities | 1,100 | 9,100 | ||
Denominator: | ||||
Impact of if-converted securities | 1,000 | |||
CEP units | ||||
Earnings per Share | ||||
Antidilutive securities | 222,200 | |||
Denominator: | ||||
Impact of if-converted securities | 23,300 |
Segment Information - Other (De
Segment Information - Other (Details) | 9 Months Ended |
Sep. 30, 2022 segment | |
Segment Information | |
Number of operating segments | 2 |
Segment Information - Selected
Segment Information - Selected Financial Data (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | Dec. 31, 2021 | |
Segment Information | |||||
Net sales | $ 230,308 | $ 181,277 | $ 640,149 | $ 507,752 | |
Adjusted EBITDA | 17,913 | 13,479 | 42,600 | 32,971 | |
Interest expense, net | 13,404 | 8,614 | 30,265 | 24,283 | |
Income tax benefit | (428) | (796) | (3,511) | (2,239) | |
Depreciation and amortization | 5,816 | 6,072 | 17,782 | 18,386 | |
Acquisition, restructuring and integration expense | 3,959 | 1,829 | 8,746 | 3,772 | |
Change in fair value of warrant liabilities | 5,215 | 5,215 | |||
Management and consulting fees | 834 | 1,591 | 3,035 | 4,791 | |
Equity-based compensation | 705 | 306 | 1,184 | 918 | |
Mark-to-market adjustments | 543 | (4) | 793 | (1,979) | |
Loss (gain) on disposal of property, plant and equipment | 459 | (390) | 748 | (147) | |
Other | 424 | 147 | 1,885 | 1,268 | |
Net loss | (13,018) | (3,890) | (23,542) | (16,082) | |
Total assets | 750,088 | 582,494 | 750,088 | 582,494 | $ 593,020 |
Operating Segments | Beverage Solutions. | |||||
Segment Information | |||||
Net sales | 173,486 | 138,838 | 492,712 | 400,506 | |
Adjusted EBITDA | 15,885 | 11,462 | 38,776 | 29,924 | |
Total assets | 638,160 | 497,219 | 638,160 | 497,219 | |
Operating Segments | Sustainable, Sourcing and Traceability | |||||
Segment Information | |||||
Net sales | 62,809 | 47,529 | 169,041 | 121,550 | |
Adjusted EBITDA | 2,028 | 2,017 | 3,824 | 3,047 | |
Total assets | 111,928 | 85,275 | 111,928 | 85,275 | |
Intersegment Eliminations | |||||
Segment Information | |||||
Net sales | $ (5,987) | $ (5,090) | $ (21,604) | $ (14,304) |
Segment Information - Net sales
Segment Information - Net sales information (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Segment Information | ||||
Net sales | $ 230,308 | $ 181,277 | $ 640,149 | $ 507,752 |
United States | ||||
Segment Information | ||||
Net sales | 181,789 | 146,642 | 515,742 | 423,524 |
All other countries | ||||
Segment Information | ||||
Net sales | $ 48,519 | $ 34,635 | $ 124,407 | $ 84,228 |
Commitments and Contingencies (
Commitments and Contingencies (Details) $ in Millions | Sep. 30, 2022 USD ($) |
Commitments and Contingencies. | |
Purchase obligations | $ 284.6 |
Related Party Transactions - Tr
Related Party Transactions - Transactions with related party (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | Dec. 31, 2021 | |
Related Party Transactions | |||||
Short-term related party debt | $ 34,199 | ||||
Interest expense, net | $ 240 | $ 662 | $ 1,183 | $ 1,835 | |
Brown Brothers Harriman(1) | |||||
Related Party Transactions | |||||
Interest expense, net | 358 | 541 | 936 | ||
Wooster Capital(2) | |||||
Related Party Transactions | |||||
Interest expense, net | 207 | 152 | 503 | 449 | |
Jo Ellen Ford(1) | |||||
Related Party Transactions | |||||
Interest expense, net | $ 33 | 54 | $ 139 | 160 | |
Westrock Finance, LLC(2) | |||||
Related Party Transactions | |||||
Interest expense, net | $ 98 | $ 290 | |||
Short-term related party debt | Brown Brothers Harriman(1) | |||||
Related Party Transactions | |||||
Short-term related party debt | 34,199 | ||||
Subordinated related party debt | |||||
Related Party Transactions | |||||
Subordinated related party debt | 13,300 | ||||
Subordinated related party debt | Wooster Capital(2) | |||||
Related Party Transactions | |||||
Subordinated related party debt | 9,800 | ||||
Subordinated related party debt | Jo Ellen Ford(1) | |||||
Related Party Transactions | |||||
Subordinated related party debt | $ 3,500 |
Related Party Transactions - Ot
Related Party Transactions - Other (Details) - USD ($) $ in Thousands | 1 Months Ended | 3 Months Ended | 9 Months Ended | |||
Feb. 29, 2020 | Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | Dec. 31, 2021 | |
Related Party Transactions | ||||||
Short-term related party debt | $ 34,199 | |||||
Selling, general and administrative expenses | ||||||
Related Party Transactions | ||||||
Expenses incurred | $ 800 | $ 2,500 | $ 800 | $ 2,500 | ||
Westrock Group, LLC | ||||||
Related Party Transactions | ||||||
Expenses incurred | $ 200 | $ 500 | ||||
Westrock Group, LLC | Accrued expenses and other current liabilities | ||||||
Related Party Transactions | ||||||
Short-term related party debt | 100 | 100 | $ 200 | |||
Westrock Group, LLC | Selling, general and administrative expenses | ||||||
Related Party Transactions | ||||||
Expenses incurred | $ 10,000 | $ 300 | $ 1,000 |
Subsequent Events (Details)
Subsequent Events (Details) - Subsequent Event - Westrock Beverage Solutions Llc [Member] - Kohana Coffee Llc [Member] $ / shares in Units, $ in Millions | Nov. 14, 2022 USD ($) $ / shares shares |
Subsequent Events | |
Acquired percentage | 100% |
Aggregate consideration | shares | 1,852,608 |
Common stock par value ( in dollars per share) | $ / shares | $ 0.01 |
Cash subject to customary adjustments | $ | $ 15.5 |