Document and Entity Information
Document and Entity Information - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2023 | Mar. 01, 2024 | Jun. 30, 2023 | |
Document Information | |||
Document Type | 10-K | ||
Document Annual Report | true | ||
Document Period End Date | Dec. 31, 2023 | ||
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 | 4009 N. Rodney Parham Road | ||
Entity Address, Address Line Two | 3rd Floor | ||
Entity Address, City or Town | Little Rock | ||
Entity Address State Or Province | AR | ||
Entity Address, Postal Zip Code | 72212 | ||
City Area Code | 501 | ||
Local Phone Number | 918-9358 | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Interactive Data Current | Yes | ||
Entity Filer Category | Accelerated Filer | ||
Entity Small Business | false | ||
Entity Emerging Growth Company | true | ||
Entity Ex Transition Period | false | ||
ICFR Auditor Attestation Flag | false | ||
Document Financial Statement Error Correction [Flag] | true | ||
Document Financial Statement Restatement Recovery Analysis [Flag] | false | ||
Entity Shell Company | false | ||
Entity Public Float | $ 455.2 | ||
Entity Common Stock, Shares Outstanding | 88,033,917 | ||
Entity Central Index Key | 0001806347 | ||
Current Fiscal Year End Date | --12-31 | ||
Document Fiscal Year Focus | 2023 | ||
Document Fiscal Period Focus | FY | ||
Amendment Flag | false | ||
Auditor Name | PricewaterhouseCoopers LLP | ||
Auditor Location | Little Rock, Arkansas | ||
Auditor Firm ID | 238 | ||
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 $0.01 per share | ||
Trading Symbol | WESTW | ||
Security Exchange Name | NASDAQ |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
ASSETS | ||
Cash and cash equivalents | $ 37,196 | $ 16,838 |
Restricted cash | 644 | 9,567 |
Accounts receivable, net of allowance for credit losses of $2,915 and $3,023, respectively | 99,158 | 101,639 |
Inventories | 149,921 | 145,836 |
Derivative assets | 13,658 | 15,053 |
Prepaid expenses and other current assets | 12,473 | 9,166 |
Total current assets | 313,050 | 298,099 |
Property, plant and equipment, net | 344,038 | 185,206 |
Goodwill | 116,111 | 113,999 |
Intangible assets, net | 122,945 | 130,886 |
Operating lease right-of-use assets | 67,601 | 11,090 |
Other long-term assets | 7,769 | 6,933 |
Total Assets | 971,514 | 746,213 |
LIABILITIES, CONVERTIBLE PREFERRED SHARES AND SHAREHOLDERS' EQUITY | ||
Current maturities of long-term debt | 9,811 | 11,504 |
Short-term debt | 43,694 | 42,905 |
Accounts payable | 69,106 | 116,675 |
Supply chain finance program | 78,076 | |
Derivative liabilities | 3,731 | 7,592 |
Accrued expenses and other current liabilities | 35,217 | 37,459 |
Total current liabilities | 239,635 | 216,135 |
Long-term debt, net | 223,092 | 162,502 |
Deferred income taxes | 10,847 | 14,355 |
Operating lease liabilities | 63,554 | 8,424 |
Warrant liabilities | 44,801 | 55,521 |
Other long-term liabilities | 1,629 | 2,611 |
Total liabilities | 583,558 | 459,548 |
Commitments and contingencies (Note 21) | ||
Shareholders' Equity | ||
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, 88,051 shares and 75,020 shares issued and outstanding at December 31, 2023 and December 31, 2022, respectively | 880 | 750 |
Additional paid-in-capital | 471,666 | 342,664 |
Accumulated deficit | (362,624) | (328,042) |
Accumulated other comprehensive income (loss) | 3,818 | (6,103) |
Total shareholders' equity attributable to Westrock Coffee Company | 113,740 | 9,269 |
Non-controlling interest | 2,460 | |
Total shareholders' equity | 113,740 | 11,729 |
Total Liabilities, Convertible Preferred Shares and Shareholders' Equity | 971,514 | 746,213 |
Series A Redeemable Common Equivalent Preferred Shares | ||
LIABILITIES, CONVERTIBLE PREFERRED SHARES AND SHAREHOLDERS' EQUITY | ||
Series A Convertible Preferred Shares | $ 274,216 | $ 274,936 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) shares in Thousands | Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 |
Allowance for credit loss | $ 2,915,000 | $ 3,023,000 | $ 3,749,000 |
Preferred Stock, Par Value | $ 0.01 | $ 0.01 | |
Preferred Stock, Authorized (in shares) | 26,000 | 26,000 | |
Preferred Stock, Shares Issued (in shares) | 0 | 0 | |
Preferred Stock, Shares outstanding (in shares) | 0 | 0 | |
Common stock, Par Value (in dollars per share) | $ 0.01 | $ 0.01 | |
Common stock, Shares Authorized (In shares) | 300,000 | 300,000 | |
Common stock, Shares Issued (In shares) | 88,051 | 75,020 | |
Common stock, Shares Outstanding (In shares) | 88,051 | 75,020 | |
Series A Redeemable Common Equivalent 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 | 24,000 | |
Redeemable Common Preferred Shares, Issued (in shares) | 23,512 | 23,588 | |
Redeemable Common Preferred Shares, Outstanding (in shares) | 23,512 | 23,588 | |
Temporary Equity, Liquidation Preference | $ 11.50 | $ 11.50 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) shares in Thousands, $ in Thousands | 12 Months Ended | |||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | ||
CONSOLIDATED STATEMENTS OF OPERATIONS | ||||
Net sales | $ 864,714 | $ 867,872 | $ 698,144 | |
Costs of sales | 724,856 | 715,107 | 552,721 | |
Gross profit | 139,858 | 152,765 | 145,423 | |
Selling, general and administrative expense | 144,577 | 129,985 | 128,506 | |
Transaction, restructuring and integration expense | 14,557 | 13,169 | 8,835 | |
Loss on disposal of property, plant and equipment | 1,153 | 935 | 243 | |
Total operating expenses | 160,287 | 144,089 | 137,584 | |
Income (loss) from operations | (20,429) | 8,676 | 7,839 | |
Interest expense | 29,157 | 35,497 | 32,549 | |
Change in fair value of warrant liabilities | (10,207) | 29,675 | ||
Other, net | 1,446 | (1,146) | (34) | |
Loss before income taxes and equity in earnings from unconsolidated entities | (40,825) | (55,350) | (24,676) | |
Income tax expense (benefit) | (6,358) | 111 | (3,368) | |
Equity in (earnings) loss from unconsolidated entities | 100 | |||
Net loss | (34,567) | (55,461) | (21,308) | |
Net income (loss) attributable to non-controlling interest | 15 | (276) | 639 | |
Net loss attributable to shareholders | (34,582) | (55,185) | (21,947) | |
Accretion of Series A Convertible Preferred Shares | (161) | (1,316) | ||
Loss on extinguishment of Redeemable Common Equivalent Preferred Units, net | (2,870) | |||
Common equivalent preferred dividends | (4,380) | |||
Accumulating preferred dividends | (13,882) | (24,208) | ||
Net loss attributable to common shareholders | $ (34,743) | $ (77,633) | $ (46,155) | |
Loss per common share: | ||||
Basic (in dollars per share) | [1] | $ (0.43) | $ (1.60) | $ (1.34) |
Diluted (in dollars per share) | [1] | $ (0.43) | $ (1.60) | $ (1.34) |
Weighted-average number of shares outstanding: | ||||
Basic (in shares) | [1] | 80,684 | 48,444 | 34,472 |
Diluted (in shares) | [1] | 80,684 | 48,444 | 34,472 |
[1] (1) Retroactively adjusted for de-SPAC merger transaction as described in Note 4. |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) | |||
Net loss | $ (34,567) | $ (55,461) | $ (21,308) |
Other comprehensive income (loss), net of tax: | |||
Unrealized gain (loss) on derivative instruments | 9,717 | (18,114) | 8,178 |
Foreign currency translation adjustment | 204 | (7) | 20 |
Total other comprehensive income (loss) | 9,921 | (18,121) | 8,198 |
Comprehensive loss | (24,646) | (73,582) | (13,110) |
Comprehensive income (loss) attributable to non-controlling interests | 15 | (276) | 639 |
Comprehensive loss attributable to shareholders | (24,661) | (73,306) | (13,749) |
Accretion of Series A Convertible Preferred Shares | (161) | (1,316) | |
Loss on extinguishment of Redeemable Common Equivalent Preferred Units, net | (2,870) | ||
Common equivalent preferred dividends | (4,380) | ||
Accumulating preferred dividends | (13,882) | (24,208) | |
Comprehensive loss attributable to common shareholders | $ (24,822) | $ (95,754) | $ (37,957) |
CONSOLIDATED STATEMENTS OF SHAR
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY (DEFICIT) - USD ($) $ in Thousands | Common Stock | Additional Paid-in Capital | Accumulated Deficit | Accumulated Other Comprehensive Income (Loss). | Non-Controlling Interest | Total |
Balance at beginning of year at Dec. 31, 2020 | $ 342 | $ 59,570 | $ (205,570) | $ 3,820 | $ 2,097 | $ (139,741) |
Balance at beginning of year (in shares) at Dec. 31, 2020 | 34,202,000 | |||||
Net income (loss) | (21,947) | 639 | (21,308) | |||
Other comprehensive income (loss) | 8,198 | 8,198 | ||||
Equity-based compensation | $ 3 | 1,220 | 1,223 | |||
Equity-based compensation (in shares) | 321,000 | |||||
Net share settlement of equity awards | (162) | (162) | ||||
Accumulating preferred dividends | (24,208) | (24,208) | ||||
Balance at end of year at Dec. 31, 2021 | $ 345 | 60,628 | (251,725) | 12,018 | 2,736 | (175,998) |
Balance at end of year (in shares) at Dec. 31, 2021 | 34,523,000 | |||||
Net income (loss) | (55,185) | (276) | (55,461) | |||
Issuance of common shares upon closing of de-SPAC merger transaction, net of issuance costs, net of $3,178 of taxes | $ 129 | 1,738 | 1,867 | |||
Issuance of common shares upon closing of de-SPAC merger transaction, net of issuance costs, net of $3,178 of taxes (in shares) | 12,868,000 | |||||
Issuance of common shares related to PIPE financing | $ 206 | 205,694 | 205,900 | |||
Issuance of common shares related to PIPE financing (in shares) | 20,590,000 | |||||
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 shares) | 2,500,000 | |||||
Issuance of common shares related to conversion of Common Equivalent Preferred Units | $ 22 | 23,731 | 23,753 | |||
Issuance of common shares related to conversion of Common Equivalent Preferred Units (in shares) | 2,220,000 | |||||
Issuance of common shares related to Public Warrant exercise | $ 1 | 1,272 | 1,273 | |||
Issuance of common shares related to Public Warrant exercise (in shares) | 94,000 | |||||
Issuance of common shares related to stock options exercised | 375 | 375 | ||||
Issuance of common shares related to stock options exercised (in shares) | 39,000 | |||||
Issuance of common shares related to acquisition | $ 19 | 23,416 | 23,435 | |||
Issuance of common shares related to acquisition (in shares) | 1,853,000 | |||||
Common Equivalent Preferred Unit dividends ($0.02 per unit) | (4,380) | (4,380) | ||||
Loss on extinguishment of Common Equivalent Preferred units | (2,870) | (2,870) | ||||
Accretion of Series A Convertible Preferred Shares | (1,316) | (1,316) | ||||
Other comprehensive income (loss) | (18,121) | (18,121) | ||||
Equity-based compensation | $ 3 | 2,628 | 2,631 | |||
Equity-based compensation (in shares) | 333,000 | |||||
Net share settlement of equity awards | (477) | (477) | ||||
Accumulating preferred dividends | (13,882) | (13,882) | ||||
Balance at end of year at Dec. 31, 2022 | $ 750 | 342,664 | (328,042) | (6,103) | 2,460 | 11,729 |
Balance at end of year (in shares) at Dec. 31, 2022 | 75,020,000 | |||||
Net income (loss) | (34,582) | 15 | (34,567) | |||
Issuance of common shares related to conversion of Common Equivalent Preferred Units | $ 119 | 117,648 | 117,767 | |||
Issuance of common shares related to conversion of Common Equivalent Preferred Units (in shares) | 11,877,000 | |||||
Issuance of common shares related to acquisitions | 446 | 446 | ||||
Issuance of common shares related to acquisitions (in shares) | 40,000 | |||||
Issuance of common shares related to Public Warrant exercise | $ 2 | 3,142 | 3,144 | |||
Issuance of common shares related to Public Warrant exercise (in shares) | 229,000 | |||||
Issuance of common shares related to stock options exercised | $ 1 | 847 | 848 | |||
Issuance of common shares related to stock options exercised (in shares) | 88,000 | |||||
Issuance of common shares related to conversion of Series A Convertible Preferred Shares | $ 1 | 881 | 882 | |||
Issuance of common shares related to conversion of Series A Convertible Preferred Shares (in shares) | 76,000 | |||||
Issuance of common shares related to purchase of non-controlling interest | $ 1 | 474 | $ (2,000) | |||
Issuance of common shares related to purchase of non-controlling interest (in shares) | 100,000 | |||||
Issuance of common shares related to purchase of non-controlling interest | $ (2,475) | |||||
Issuance of common shares related to stock options exercised (in shares) | 88,525 | |||||
Accretion of Series A Convertible Preferred Shares | (161) | $ (161) | ||||
Other comprehensive income (loss) | 9,921 | 9,921 | ||||
Equity-based compensation | $ 6 | 8,702 | 8,708 | |||
Equity-based compensation (in shares) | 621,000 | |||||
Net share settlement of equity awards | (2,977) | (2,977) | ||||
Balance at end of year at Dec. 31, 2023 | $ 880 | $ 471,666 | $ (362,624) | $ 3,818 | $ 113,740 | |
Balance at end of year (in shares) at Dec. 31, 2023 | 88,051,000 |
CONSOLIDATED STATEMENTS OF SH_2
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY (DEFICIT) (Parenthetical) $ in Thousands | 12 Months Ended |
Dec. 31, 2022 USD ($) $ / shares | |
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY (DEFICIT) | |
Net issuance cost, taxes | $ | $ 3,178 |
Common equivalent preferred dividends ($0.02 per unit) | $ / shares | $ 0.02 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Cash flows from operating activities: | |||
Net loss | $ (34,567) | $ (55,461) | $ (21,308) |
Adjustments to reconcile net loss to net cash provided by (used in) operating activities: | |||
Depreciation and amortization | 26,584 | 24,210 | 25,501 |
Equity-based compensation | 8,708 | 2,631 | 1,223 |
Paid-in-kind interest added to debt principal | 295 | 1,777 | |
Provision for credit losses | 979 | 1,790 | 439 |
Amortization of deferred financing fees included in interest expense | 3,517 | 1,726 | 1,840 |
Write-off of unamortized deferred financing fees | 4,296 | ||
Loss on debt extinguishment | 1,580 | ||
Loss on disposal of property, plant and equipment | 1,153 | 935 | 243 |
Mark-to-market adjustments | (104) | 3,502 | (3,585) |
Change in fair value of warrant liabilities | (10,207) | 29,675 | |
Foreign currency transactions | 1,864 | 667 | 492 |
Deferred income tax benefit | (6,512) | (2,037) | (3,448) |
Other | 2,486 | 1,204 | |
Change in operating assets and liabilities: | |||
Accounts receivable | 1,688 | (16,789) | (20,102) |
Inventories | 915 | (46,770) | (16,543) |
Derivative assets and liabilities | 6,440 | (22,937) | 14,860 |
Prepaid expense and other assets | (1,890) | (15,476) | (401) |
Accounts payable | (59,292) | 27,646 | 18,724 |
Accrued liabilities and other | (5,826) | 2,685 | 3,165 |
Net cash provided by (used in) operating activities | (64,064) | (56,628) | 2,877 |
Cash flows from investing activities: | |||
Additions to property, plant and equipment | (164,611) | (63,261) | (25,115) |
Additions to intangible assets | (173) | (167) | (321) |
Acquisition of business, net of cash acquired | (2,392) | (14,885) | |
Acquisition of equity method investments and non-marketable securities | (1,385) | ||
Proceeds from sale of property, plant and equipment | 206 | 4,144 | 2,789 |
Net cash used in investing activities | (168,355) | (74,169) | (22,647) |
Cash flows from financing activities: | |||
Payments on debt | (199,196) | (438,571) | (111,313) |
Proceeds from debt | 258,490 | 328,539 | 119,740 |
Payments on supply chain financing program | (32,141) | ||
Proceeds from supply chain financing program | 110,217 | ||
Proceeds from related party debt | 11,700 | ||
Debt extinguishment costs | (1,580) | ||
Payment of debt issuance costs | (3,158) | (6,007) | (1,426) |
Proceeds from de-SPAC merger and PIPE financing | 255,737 | ||
Payment of common equity issuance costs | (1,000) | (23,998) | |
Proceeds from common equity issuance | 118,767 | ||
Payment of preferred equity issuance costs | (1,250) | ||
Net proceeds from (repayments of) repurchase agreements | (6,268) | 14,588 | |
Proceeds from exercise of stock options | 848 | 375 | |
Proceeds from exercise of Public Warrants | 2,632 | ||
Common equivalent preferred dividends | (4,380) | ||
Payment for purchase of non-controlling interest | (2,000) | ||
Payment for taxes for net share settlement of equity awards | (2,977) | (477) | (162) |
Proceeds from the issuance of common equivalent preferred units | 17,000 | ||
Net cash provided by financing activities | 244,214 | 134,676 | 23,839 |
Effect of exchange rate changes on cash | (360) | (344) | 149 |
Net increase in cash and cash equivalents and restricted cash | 11,435 | 3,535 | 4,218 |
Cash and cash equivalents and restricted cash at beginning of period | 26,405 | 22,870 | 18,652 |
Cash and cash equivalents and restricted cash at end of period | 37,840 | 26,405 | 22,870 |
Supplemental non-cash investing and financing activities: | |||
Property, plant and equipment acquired but not yet paid | 23,124 | 8,811 | 184 |
Accumulating preferred dividends | 13,882 | 24,208 | |
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 | ||
Supplemental cash flow information: | |||
Cash paid for interest | 29,446 | 30,448 | 28,496 |
Cash paid for income taxes, net | $ 1,432 | $ 814 | $ 1,409 |
Organization and Description of
Organization and Description of Business | 12 Months Ended |
Dec. 31, 2023 | |
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, consumer packaged goods (“CPG”), and hospitality industries around the world. We manage 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 consist of sales from commodity contracts related to forward sales of green coffee. The Company operates three manufacturing facilities in Concord, North Carolina, one in North Little Rock, Arkansas, one in Richmond, California, one in Kigali, Rwanda, and one in Johor Bahru, Malaysia. The Company is currently completing the build out of its Conway, Arkansas facility, which is expected to begin commercial production in 2024. 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 the Company (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 the Company (the “ LLC Merger ” , and together with the SPAC Merger, the “ Mergers ” ). See Note 4 for additional disclosures related to the Transaction . On June 29, 2023, the Company entered into a subscription agreement (the “Subscription Agreement”) with HF Direct Investments Pool, LLC (the “HF Investor”), an affiliate of HF Capital, LLC, pursuant to which the Company agreed to sell and issue to the HF Investor and the HF Investor agreed to purchase from the Company 5,000,000 shares (the “HF Subscription Amount”) of common stock, par value $0.01 per share, of the Company (the “Common Shares”) at a purchase price per share of $10.00 for aggregate gross proceeds to the Company of $50.0 million (such transaction, the “HF Investment”). On August 3, 2023, the HF Investment closed after the expiration of the applicable waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended. Additionally, on June 29, 2023 and July 18, 2023, the Company entered into definitive agreements with an affiliate of the Herbert Hunt family (the “Hunt Investor”) and the Arkansas Teacher Retirement System (the “ARTRS” and together with the Hunt Investor, the “Investors”), respectively, pursuant to which the Company agreed to sell and issue to the Investors and the Investors agreed to purchase from the Company a total of 5,000,000 Common Shares of the Company at a purchase price per share of $10.00 for aggregate gross proceeds to the Company of $50.0 million (such transactions the “PIPE Investments”). On August 3, 2023, the Company closed on the PIPE Investments. On July 24, 2023, affiliates of Brown Brothers Harriman & Co. (the “BBH Investors”) exercised preemptive rights (the “BBH Preemptive Rights”) to purchase approximately 1.9 million Common Shares at a purchase price per share of $10.00, under the terms of that certain Investor Rights Agreement, dated April 4, 2022, by and among the Company, the BBH Investors, and the other parties thereto. On August 7, 2023, the Company sold and issued the Common Shares to the BBH Investors, receiving aggregate gross proceeds of approximately $18.8 million. |
Basis of Presentation and Conso
Basis of Presentation and Consolidation | 12 Months Ended |
Dec. 31, 2023 | |
Basis of Presentation and Consolidation | |
Basis of Presentation and Consolidation | Note 2. Basis of Presentation and Consolidation The accompanying 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. The 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. On April 3, 2023, the Company purchased the remaining 15% of the equity interests of Falcon Coffees Limited (“Falcon”) that it did not previously own, resulting in Falcon becoming a wholly owned subsidiary of the Company. Aggregate consideration paid for the interest totaled Common Unit Conversion In connection with the Transaction and pursuant to the Transaction Agreement, (a) each issued and outstanding common unit of the Converting Company (“Common Units”) was automatically converted into 0.1049203474320 Common Shares, (b) each issued and outstanding common equivalent preferred unit of the Converting Company (the “Common Equivalent Preferred Units”) for which the holder had not elected to convert such unit into shares of Series A convertible preferred stock, par value $0.01 per share, of the Company (the “Westrock Series A Preferred Shares”), automatically converted into 0.1086138208640 Common Shares if such Common Equivalent Preferred Unit was designated a Westrock Series A Common Equivalent Preferred Unit or 0.1049203474320 Common Shares if such Common Equivalent Preferred Unit was designated a Series B Common Equivalent Preferred Unit and (c) each outstanding Common Equivalent 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 Common Equivalent Preferred Unit was designated a Series A Common Equivalent Preferred Unit or 0.0919280171940 Westrock Series A Preferred Shares if such Common Equivalent Preferred Unit was designated a Series B Common Equivalent Preferred Unit. For the periods prior to the Closing, the number of outstanding units, weighted average number of outstanding units, loss per common unit, equity-based compensation and other financial amounts previously expressed on the basis of Common Units have been retroactively adjusted on the basis of Common Shares reflecting the common unit conversion ratio, as described above. Reclassifications Certain reclassifications of prior years’ amounts have been made to conform with the current period financial statements presentation. These reclassifications had no impact on prior years’ net income as previously reported. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2023 | |
Summary of Significant Accounting Policies | |
Summary of Significant Accounting Policies | Note 3. Summary of Significant Accounting Policies Use of Estimates The preparation of consolidated financial statements in conformity with U.S. GAAP requires us to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues 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, plant and equipment, incremental borrowing rates for lease liability measurement, fair values of forward purchase and sales contracts, green coffee associated with forward contracts, 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 may differ from the estimates and assumptions used in preparing the accompanying consolidated financial statements. Going Concern In accordance with Accounting Standards Update (“ASU”) 2014-15, Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern (Subtopic 205-40) Cash and Cash Equivalents Cash and cash equivalents include all highly liquid investments with original maturities not exceeding three months at the time of purchase. The fair values of our cash and cash equivalents approximate the amounts shown on our Consolidated Balance Sheets due to their short-term nature. Restricted Cash Restricted cash represents cash maintained in margin accounts in accordance with futures market and broker regulations. In accordance with the Company’s accounting policy, the Company does not adjust the value of its derivative assets or liabilities by the amount of cash held in margin accounts. The total cash and cash equivalents and restricted cash is as follows: (Thousands) December 31, 2023 December 31, 2022 Cash and cash equivalents $ 37,196 $ 16,838 Restricted cash 644 9,567 Total $ 37,840 $ 26,405 Accounts Receivable and Allowance for Credit Losses Accounts receivable consist principally of amounts billed and currently due from customers and are generally unsecured and due within 30 to 60 days Activity in the allowance for credit losses was as follows: Year Ended December 31, (Thousands) 2023 2022 Balance at beginning of period $ 3,023 $ 3,749 Charged to selling, general and administrative expense 979 1,790 Write-offs (1,087) (2,516) Total $ 2,915 $ 3,023 Inventories Inventories are stated at the lower of cost, determined on the average cost method, or net realizable value. Finished goods and work-in-process include the inventory costs of raw materials, direct labor and manufacturing overhead costs. Within our Sustainable Sourcing & Traceability segment, green coffee associated with our forward contracts is recorded at net realizable value, which approximates market price, consistent with our forward purchase contracts recorded at fair value in accordance with 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 Consolidated Statements of Operations. For the years ended December 31, 2023, 2022 and 2021, we recognized Property, Plant and Equipment Property, plant and equipment are stated at cost less accumulated depreciation. Depreciation is allocated between cost of sales and selling, general and administrative expense and is determined using the straight-line method over the estimated useful life of the assets. Leasehold improvements are amortized using the straight-line method over the remaining life of the lease or useful life of the asset, whichever is shorter. Maintenance and repairs are charged to operating expense when incurred. As part of normal business operations, we identify long-lived assets that are no longer productive and dispose of them. Gains and losses on disposals of assets are presented separately in our Consolidated Statements of Operations as part of operating expenses. Capitalized Interest We capitalize a portion of interest costs incurred related to assets that require a period of time to get them ready for their intended use. The amount of interest capitalized is based on eligible expenditures incurred during the period involved in bringing the assets to their intended use and the Company’s weighted-average interest rate during the period. For the year ended December 31, 2023, we capitalized approximately million of interest costs. Supply Chain Finance Program The Company is party to a supply chain finance program (the “Program”) with a third-party financing provider to provide better working capital usage by deferring payments for certain raw materials. Under the Program, the financing provider remits payment to the Company’s suppliers for approved invoices, and the Company repays the financing provider the amount of the approved invoices, plus a financing charge, on 180-day terms. The Program is uncommitted and the financing provider may, at its sole discretion, cancel the Program at any time. The Company may request cancellation of the Program in whole or in respect of or more approved suppliers. Due to the extension of payment terms beyond the original due date of approved invoices, obligations under the Program are recorded outside of accounts payable, within our supply chain finance program, on our Consolidated Balance Sheets. Amounts paid by the financing provider to suppliers are reported as cash inflows from financing activities and a corresponding cash outflow from operating activities in our Consolidated Statements of Cash Flows. Amounts paid to the financing provider are reflected as cash outflows from financing activities in our Consolidated Statements of Cash Flows. As of December 31, 2023, there were million obligations outstanding under the Program. There were (Thousands) December 31, 2023 Confirmed obligations outstanding at the beginning of the year $ — Invoices confirmed during the year 110,217 Confirmed invoices paid during the year (32,141) Confirmed obligations outstanding at the end of the year $ 78,076 Goodwill and Indefinite Lived Intangible Assets Goodwill represents the excess purchase price of acquired businesses over the fair value of the net assets acquired. Goodwill is reviewed for impairment at least annually. In accordance with ASC 350 Goodwill – Intangible and Other , we evaluate goodwill for impairment between annual impairment tests if an event occurs or circumstances change that would more likely than not reduce the fair value of a reporting unit below its carrying amount. Application of the goodwill impairment test requires significant judgment, including the identification of reporting units; assignment of assets and liabilities to reporting units; and assignment of goodwill to reporting units. As of December 31, 2023, all of our goodwill is assigned to our Beverage Solutions reporting unit. Unless circumstances otherwise dictate, the annual impairment test is performed as of October 1. We first evaluate impairment of goodwill by assessing qualitative factors to determine whether it is more likely than not that the fair value of our reporting unit is less than its carrying amount (the “Step Zero” analysis). If the Step Zero analysis indicates that it is more likely than not that the fair value of our reporting unit is less than its carrying amount, we will perform a quantitative assessment of goodwill impairment. Qualitative factors include industry and market considerations, overall financial performance, and other relevant events and circumstances affecting the reporting unit. If we choose to perform a qualitative assessment and, after consideration of all relevant factors and circumstances, we determine that it is more likely than not that a reporting unit’s fair value is less than its carrying value, we would perform a quantitative fair value test. When performing a quantitative assessment, we estimate the fair value of our reporting unit using a combination of an income approach based on the present value of estimated future cash flows, and a market approach based on market data of comparable businesses and acquisition multiples paid in recent transactions. We evaluate the appropriateness of each valuation methodology in determining the weighting applied to each in the determination of the concluded fair value. If the carrying value of a reporting unit’s net assets is less than its fair value, no indication of impairment exists. If the carrying amount of the reporting unit is greater than the fair value of the reporting unit, an impairment loss must be recognized for the excess and recorded in the Consolidated Statements of Operations not to exceed the carrying value of goodwill. Fair value determinations of the business require considerable judgment and are sensitive to changes in underlying assumptions and factors. As a result, there can be no assurance that the estimates and assumptions made for the purposes of a quantitative goodwill impairment test will prove to be an accurate prediction of future results. Key assumptions include our expected revenue growth rates, operating profits, levels of capital expenditures, and costs of capital. In determining these assumptions, we considered our ability to execute on our plans, future economic conditions, interest rates, and other market data. Many factors are outside the control of management, and these assumptions and estimates may change in future periods. Small changes in these assumptions or estimates could materially affect our cash flow projections; and therefore, could affect the likelihood and amount of potential impairment in future periods. Accordingly, if our current cash flow assumptions are not realized, it is possible that an impairment charge may be recorded in the future. During the fourth quarter of 2023, the Company completed a qualitative analysis to evaluate impairment of goodwill and concluded that it was more likely than not that the fair value of our goodwill reporting unit exceeded the carrying amount. As a result, the Company concluded that We reached this conclusion based on consideration of the significant excess fair value over carrying value of previous quantitative goodwill impairment evaluations, the recently completed PIPE Investment and the Company’s current market capitalization. Our previous quantitative goodwill analysis indicated that the estimated fair value of our reporting units exceeded their carrying values by over 50%. Subsequent to that evaluation, we have noted no events or circumstances that would indicate that it is more likely than not that the carrying value of our reporting units exceed their fair value. Impairment of Property, Plant and Equipment We review our property, plant and equipment for impairment whenever events or changes in circumstances indicate that the carrying amount of the asset group may not be recoverable from future, undiscounted net cash flows expected to be generated by the asset group. If the asset group is not fully recoverable, an impairment loss would be recognized for the difference between the carrying value of the asset group and its estimated fair value. For the years ended December 31, 2023, 2022 and 2021, there were no events or changes in circumstances indicating that the carrying amount of any of our asset groups were not recoverable from future undiscounted cash flows we expect the asset groups to generate, and no impairment losses were recognized. Intangible Assets As of December 31, 2023, our intangible assets subject to amortization, net of accumulated amortization were $122.9 million. Intangible assets, including acquired finite-lived intangible assets, are amortized on a straight-line basis over their remaining useful lives. The useful life for the customer relationship intangible assets acquired in our acquisitions was determined to be the expected remaining life of those relationships on a basis that reflects the pattern of realization. Other intangible assets are amortized over their expected recovery periods. Finite-lived intangible assets are tested for impairment with the applicable asset group and evaluated for impairment along with property, plant and equipment. For the years ended December 31, 2023, 2022 and 2021, no impairment losses were recognized related to intangible assets subject to amortization. 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. The liability is subject to re-measurement at each balance sheet date until exercised, and any change in fair value is recognized in the Consolidated Statements of Operations. The Company re-measures the fair value of the Westrock Public Warrants (as defined in Note 4) based on the quoted market price of the Westrock Public Warrants. The Westrock Private Warrants (as defined in Note 4) are valued using a binomial lattice valuation model. For the years ended December 31, 2023 and 2022, the Company recognized Equity Method Investments The equity method of accounting is used for investments in entities, partnerships and similar interests in which we have significant influence but do not control. Under the equity method, we adjust our investment in unconsolidated entities for additional contributions made, distributions received and income or losses from our pro-rata share of these unconsolidated entities’ net income or loss. At December 31, 2023, we had a $0.4 million investment in one unconsolidated entity, which is recorded in other long-term assets on the Consolidated Balance Sheets. Equity Investments The Company holds strategic investments in other companies. These investments are accounted for under the measurement alternative described in ASC 321, Investments - Equity Securities Debt Issuance Costs Debt issuance costs consist primarily of loan origination fees, underwriting, legal and other direct costs related to the issuance of debt. Fees related to the issuance of our Term Loan Facility are capitalized and amortized to interest expense over the term of the debt using the frozen effective yield method. The unamortized amount is presented as a reduction of long-term debt on the Consolidated Balance Sheets. Fees related to our Revolving Credit Facility are amortized ratably over the term of the Revolving Credit Facility and are included in other long-term assets in the accompanying Consolidated Balance Sheets. Amortization of deferred debt issuance costs are included in interest expense in the Consolidated Statements of Operations. Derivatives We use derivative financial instruments to manage our exposure to movements in certain commodity prices, primarily green coffee. All derivative instruments are valued at fair value in the Consolidated Balance Sheets. We do not use derivative instruments for speculative purposes. For coffee-related derivative instruments designated as cash flow hedges, the change in fair value of the derivative is reported as accumulated other comprehensive income (loss) (“AOCI”) and subsequently reclassified into product costs of sales in the period, or periods, when the hedged transaction affects earnings. Due to the high degree of effectiveness between the hedging instruments and the underlying exposures being hedged, fluctuations in the value of the derivative instruments are generally offset by changes in the fair values of the cash flows of the underlying exposures being hedged. The change in fair value of derivatives that were not designated and/or did not qualify as hedging instruments are immediately recognized in earnings. Revenue Recognition The Company’s revenue consists of products and services which are accounted for under ASC 606, Revenue from Contracts with Customers Sales Incentives We participate in various incentive programs with our customers, including volume-based incentives, contractual rebates and promotional allowances. Volume incentives are based on our customers achieving volume targets for a period of time. Volume incentives and contractual rebates are deducted from revenue and accrued as the incentives are earned and are based on management’s estimate of the total the customer is expected to earn and claim. Promotional allowances are accrued at the time of revenue recognition and are deducted from revenue based on either the volume shipped, or the volume sold at the retailer location, depending on the terms of the allowance. We regularly review customer sales forecasts to ensure volume targets will be met and adjust incentive accruals and revenues accordingly. C osts of Sales We record costs associated with the manufacturing of our products in costs of sales. Finished goods inventory costs include the costs of direct labor and materials and the applicable share of overhead expense chargeable to production. Selling, General and Administrative Expense We record all other expenses not charged to production as selling, general and administrative expense, except those meeting the definition of transaction, restructuring and integration expenses. Advertising costs are expensed at the commencement of an advertising campaign and are recognized as a component of selling, general and administrative expense. For the years ended December 31, 2023, 2022 and 2021, advertising expenses were approximately $1.9 million, $3.6 million and $2.9 million, respectively. Shipping and Handling Costs Shipping and handling costs incurred to deliver products from our locations to the end-user consumer of those products are recorded in selling, general and administrative expense in our Consolidated Statements of Operations. Shipping and handling costs included in selling, general and administrative expense were $17.8 million, $22.1 million and $19.9 million, for the years ended December 31, 2023, 2022 and 2021, respectively. Shipping and handling costs incurred to store, prepare, and move products between production facilities or from production facilities to branch locations or storage facilities are recorded in costs of sales. Equity-Based Compensation We have determined that our equity-based awards qualify as equity classified awards, and are measured based on the fair value of the award on the date of the grant. See Note 16. Foreign Currency Translation The functional currency of our Rwandan subsidiary is the Rwandan Franc. All other international subsidiaries of the Company use the U.S. Dollar as their functional currency. The assets and liabilities of non-U.S. active operations are translated to U.S. dollars at the exchange rates in effect at the balance sheet dates. Revenues and expenses are translated using average monthly exchange rates prevailing during the period. The resulting gains or losses are recorded in AOCI. Income Taxes We account for income taxes under the asset and liability method. Deferred tax assets and liabilities are recognized based on the differences between the financial statement carrying amount of assets and liabilities and their respective tax bases, using enacted income tax rates expected to apply when the deferred tax assets and liabilities are expected to be realized or settled. The Company’s foreign subsidiaries file income tax returns and are subject to tax provisions in their respective foreign tax jurisdictions. A valuation allowance is established to reduce deferred income tax assets if, on the basis of available evidence, it is more likely than not that all or a portion of any deferred tax assets will not be realized. The consideration of available evidence requires significant management judgment including an assessment of the future periods in which the deferred tax assets and liabilities are expected to be realized and projections of future taxable income. Specifically, in assessing the need for a valuation allowance, we consider the reversal of taxable temporary differences, future taxable income, the ability to carryback certain attributes and tax-planning strategies. The ultimate realization of the deferred tax assets, including net operating losses, is dependent upon the generation of future taxable income during the periods prior to their expiration. If our estimates and assumptions about future taxable income are not appropriate, the value of our deferred tax assets may not be recoverable, which may result in an increase to our valuation allowance that will impact current earnings. We re-evaluate our need for a valuation allowance on a quarterly basis. We account for uncertain tax positions using a two-step process. The first step is to evaluate the tax position for recognition by determining if the weight of available evidence indicates that it is more likely than not that the position will be sustained on audit, including resolution of related appeals or litigation processes, based on the technical merits. The second step requires management to estimate and measure the tax benefit as the largest amount that is more than 50% likely to be realized upon ultimate settlement. It is inherently difficult and subjective to estimate such amounts, as we have to determine the probability of various possible outcomes. We re-evaluate these uncertain tax positions on a quarterly basis. This evaluation is based on factors including, but not limited to, changes in facts or circumstances, changes in tax law, effectively settled issues under audit, and new audit activity. Such a change in recognition or measurement would result in the recognition of a tax benefit or an additional charge to the tax provision. We recognize interest and penalties related to unrecognized tax benefits within the income tax benefit line in the accompanying Consolidated Statements of Operations, and we include accrued interest and penalties within other long-term liabilities in the accompanying Consolidated Balance Sheets. Business Combinations The Company accounts for business combinations under the acquisition method of accounting. The purchase price of each business acquired is allocated to the tangible and intangible assets acquired and the liabilities assumed based on information regarding their respective fair values on the date of acquisition. Any excess of the purchase price over the fair value of the separately identifiable assets acquired and the liabilities assumed is allocated to goodwill. The fair value of the acquired assets and liabilities assumed are estimated using the income, market and/or cost approach. The income approach utilizes the present value of estimated future cash flows that a business or asset can be expected to generate, while under the market approach, the fair value of an asset or business reflects the price at which comparable assets are purchased under similar circumstances. Inherent in our preparation of cash flow projections are significant assumptions and estimates derived from a review of operating results, business plans, expected growth rates, capital expenditure plans, costs of capital and tax rates. We also make certain forecasts about future economic conditions, interest rates and other market data. Many of the factors used in assessing fair value are outside the control of management. Small changes in these assumptions or estimates could materially affect the estimated fair value. Additional information, which existed as of the acquisition date but unknown to the Company at that time, may become known during the remainder of the measurement period, a period not to exceed twelve months from the acquisition date. Adjustments in the purchase price allocation may require a recasting of the amounts allocated to goodwill and intangible assets. If such an adjustment is required, the Company will recognize a measurement-period adjustment during the period in which it determines the amount of the adjustment, including the effect on earnings of any amounts it would have recorded in previous periods if the accounting had been completed at the acquisition date. The results of operations of businesses acquired are included in the Company’s Consolidated Financial Statements from their dates of acquisition. Transaction, Restructuring and Integration Expense The Company expenses non-capitalizable transaction, restructuring and integration expenses in the period in which they are incurred and services are received. Transaction costs represent incremental transaction pursuit and unsuccessful pursuit costs, including professional services (legal, accounting, advisory, etc.), finder’s fees and other direct expenses associated with an acquisition or other capital markets transactions. Restructuring and integration costs include direct costs related to restructuring activities, and costs necessary to integrate an acquired business, including professional services, systems and data conversions, severance and retention bonuses to employees of an acquired business. Recently adopted 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 Accounting Standards Update (“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, distribution and warehousing facilities, vehicles and machinery and equipment. Upon adoption, we recognized ROU assets and lease liabilities on our Consolidated Balance Sheets. See Note 9 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 expenses in our 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 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. ASU 2022-04 - Liabilities—Supplier Finance Programs (Subtopic 405-50): Disclosure of Supplier Finance Program Obligations In September 2022, the FASB issued ASU 2022-04 “Liabilities—Supplier Finance Programs (Subtopic 405-50): Disclosure of Supplier Finance Program Obligations”, which requires that a company that uses a supplier finance program in connection with the purchase of goods or services disclose sufficient information about the program to allow a user of financial statements to understand the program’s nature, activity during the period, changes from period to period, and potential magnitude. ASU 2022-04 is effective for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years, except for the amendment on roll forward information, which is effective for fiscal years beginning after December 15, 2023. The Company adopted the applicable amendments within ASU 2022-04 on a retrospective basis effective January 1, 2023. The amendments to ASU 2022-04 do not affect the recognition, measurement or financial statement presentation of obligations covered by supplier finance programs. ASU 2021-08 – Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers In October 2021, the FASB issued ASU 2021-08, “Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers”, which requires an entity to recognize and measure contract assets and contract liabilities acquired in a business combination in accordance with ASC 606, instead of at fair value on the acquisition date as previously required by ASC 805, Business Combinations (“ASC 805”). The amendments improve comparability after the business combination by providing consistent recognition and measurement guidance for acquired revenue contracts and revenue contracts not acquired in a business combination. ASU 2021-08 was effective for years beginning after December 15, 2022. The adoption of ASU 2021-08 did not have a significant impact on the Company’s financial position or results of operations. Recently issued accounting pronouncements ASU 2023-07 – Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures In November 2023, the FASB issued ASU 2023-07, “Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures”. Th |
De-SPAC Merger Transaction
De-SPAC Merger Transaction | 12 Months Ended |
Dec. 31, 2023 | |
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. 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 outstanding immediately prior to Closing) from common stock PIPE investments, issued 20,590,000 Common Shares to the PIPE investors (which share amount excludes the conversion of the related party notes), 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. Prior to the Closing, the Company’s ownership interests consist of two classes of equity, referred to as Common Units and Common Equivalent Preferred Units. At inception, each Common Equivalent Preferred Unit has a liquidation preference of $1.00 per unit, increased by an amount accruing at the rate of 10% per annum, compounding annually, based on its liquidation preference as of the time of such accrual, and reduced by the cumulative amount of any cash dividends or distributions, if any, made by the Company in respect of such Common Equivalent Preferred Unit. During the years ended December 31, 2022 and 2021, the Common Equivalent Preferred Units accrued million of liquidation preference, respectively. In connection with the Closing, holders of Common Equivalent Preferred Units were paid a cash dividend totaling Pursuant to the Transaction Agreement, (a) each issued and outstanding Common Unit converted into 0.1049203474320 Common Shares, (b) each issued and outstanding Common Equivalent Preferred Unit for which the holder had not elected to convert such unit into shares of Westrock Series A Preferred Shares (see Note 13), automatically converted into 0.1086138208640 Common Shares if such Westrock Preferred Unit was designated a Series A Common Equivalent Preferred Unit or 0.1049203474320 Common Shares if such Common Equivalent Preferred Unit was designated a Series B Common Equivalent Preferred Unit 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 Common Equivalent Preferred Unit was designated a Series A Common Equivalent Preferred Unit or 0.0919280171940 Westrock Series A Preferred Shares if such Common Equivalent Preferred Unit was designated a Series B Common Equivalent Preferred Unit. As a result, we issued 34,855,535 Common Shares to holders of Common Units, 2,220,305 Common Shares to holders of Common Equivalent Preferred Units who elected to convert their Common Equivalent Preferred Units into Common Shares, and 23,587,952 Westrock Series A Preferred Shares to holders who elected to convert their Common Equivalent Preferred Units into Westrock Series A Preferred Shares. During the year ended December 31, 2022, the Company realized a net loss on extinguishment of the Common Equivalent 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 shareholders, Riverview provided an opportunity for its shareholders 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. As a result, Westrock is treated as the accounting acquirer and Riverview is treated as the acquired company for financial reporting purposes per ASC 805. Accordingly, for accounting purposes, the Transaction is treated similar to an equity contribution in exchange for the issuance of Common Shares. 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 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 $24.0 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 Consolidated Balance Sheets. As a result of the transaction, 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 Consolidated Balance Sheet. The Westrock Warrants entitle the holder to purchase 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 liquidation. Westrock may redeem the outstanding Westrock Public Warrants (i) in whole and not in part; (ii) at a price of per share. During any period when Westrock fails to maintain an effective registration statement registering the Common Shares issuable upon the exercise of the Westrock Warrants, Westrock is required to permit holders of Westrock Warrants to exercise their Westrock Warrants on a “cashless basis” in accordance with Section 3(a)(9) of the Securities Act of 1933, as amended, or another exemption. If and when the Westrock 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 were initially held by Riverview Sponsor Partners, LLC (the “Riverview Sponsor”), are generally identical to the Westrock Public Warrants, except they cannot be redeemable by Westrock so long as they are held by the Riverview Sponsor or its permitted transferees. Furthermore, the Riverview Sponsor, or its permitted transferees, have the option to exercise the Westrock Private Warrants on a cashless basis. During the year ended December 31, 2023, the Riverview Sponsor transferred ownership of its Westrock Private Warrants. At December 31, 2023, |
Revenue
Revenue | 12 Months Ended |
Dec. 31, 2023 | |
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. Our principal source of revenue is from the procurement, trade, manufacture, and distribution of coffee, tea and extracts to customers in the United States, Europe, and Asia. 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 December 31, 2023 and 2022, the Company has $8.3 million and $14.6 million, respectively, of such repurchase agreement obligations, collateralized by the corresponding inventory, that are recorded within accrued expenses and other current liabilities on the Consolidated Balance Sheets. Net cash flows associated with these repurchase agreements are reported as financing activities in the Consolidated Statements of Cash Flows. Revenue from Forward Contracts (ASC 815) A portion of the Company’s revenues consist of sales from commodity contracts that are accounted for under ASC 815. Sales from commodity contracts primarily relate to forward sales of green coffee which are accounted for as derivatives at fair value under ASC 815. These forward sales 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 commodity contracts are recognized in revenues 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 transfer to the customer. Prior to settlement, these forward sales contracts are recognized at fair value with the unrealized gains or losses recorded within cost of sales on our Consolidated Statements of Operations. For the years ended December 31, 2023, 2022 and 2021, we recorded For the years ended December 31, 2023, 2022 and 2021, the Company recognized $141.0 million, $181.7 million and $145.6 million in revenues under ASC 815, respectively, and 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 Consolidated Balance Sheets. Accrued sales incentives were $1.5 million at December 31, 2023 and $1.3 million at December 31, 2022. Other accrued deductions were 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 December 31, 2023 or 2022. Receivables from contracts with customers are included in accounts receivable, net on the Company’s Consolidated Balance Sheets. At December 31, 2023 and 2022, accounts receivable, net included $104.8 million and $104.7 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 December 31, 2023 and 2022, no costs were capitalized as all arrangements were less than a year. Contract assets, primarily deferred promotional incentives paid to customers, totaled $0.3 million at December 31, 2023 and $0.4 million at December 31, 2022, and were included in prepaid expenses and other current assets on our Consolidated Balance Sheets. Deferred promotional incentives are amortized straight-line over the contract life. Amortization of deferred contract costs for the years ended December 31, 2023, 2022 and 2021 was $2.4 million, $1.2 million and $0.3 million, respectively, and are included in revenues in our Consolidated Statements of Operations. Concentration of Customers For the year ended December 31, 2023, one customer, who is represented in the Company’s Beverage Solutions segment, accounted for 10.4%, or $90.0 million, of the Company’s consolidated net revenues. For the years ended December 31, 2022 and 2021, 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 and geographic area, based on customer location, for the periods indicated is as follows: Year Ended December 31, (Thousands) 2023 2022 2021 Coffee & tea $ 559,040 $ 569,464 $ 445,466 Flavors, extracts & ingredients 162,043 112,155 98,850 Other 1,782 3,684 6,697 Green coffee 141,849 182,569 147,131 Net sales $ 864,714 $ 867,872 $ 698,144 Year Ended December 31, (Thousands) 2023 2022 2021 United States $ 744,067 $ 719,437 $ 583,011 All other countries 120,647 148,435 115,133 Net sales $ 864,714 $ 867,872 $ 698,144 |
Acquisitions
Acquisitions | 12 Months Ended |
Dec. 31, 2023 | |
Acquisitions | |
Acquisitions | Note 6. Acquisitions Bixby Roasting Co. On February 28, 2023, the Company completed the acquisition of substantially all of the assets of Bixby Roasting Co. (“Bixby”), a specialty-grade roaster that is a leader in the emerging influencer-led brand space. The transaction is accounted for as a business combination in accordance with ASC 805. Aggregate consideration paid for Bixby included 39,778 Common Shares and approximately $2.2 million in cash, for total consideration of $2.6 million, subject to customary adjustments. Net assets acquired totaled approximately $0.7 million. The acquisition allows the Company to continue to expand its product marketing and development resources as it capitalizes on shifting consumer consumption trends. The acquisition includes Bixby’s roasting facility in Los Angeles, California. The acquisition was recorded by allocating the costs of the assets acquired and liabilities assumed, which consisted of accounts receivable, inventory, property, plant and equipment, and accounts payable, based on their estimated fair values at the acquisition date. The excess of the cost of the acquisition over the fair value of the net assets acquired is recorded as goodwill. The Company finalized its purchase price allocation during the second quarter of 2023, recognizing approximately Kohana Coffee, LLC 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 Acquisition”). Kohana Coffee is an extract and ready-to-drink focused business, based in Richmond, California, serving customers in the retail and CPG industries. The acquisition allows the Company to accelerate the development, production, and distribution of ready-to-drink products in cans and bottles. Aggregate consideration paid for Kohana Coffee included million in cash, subject to customary adjustments. The fair value of the stock consideration was based on the closing price of the Common Shares on the date of acquisition. The total consideration paid in the Kohana Acquisition is summarized below: (Thousands) Cash consideration $ 15,682 Fair value of stock consideration 23,435 Total Consideration $ 39,117 The assets and liabilities acquired in the Kohana Acquisition are recorded at their estimated fair values. (Thousands) Acquired Value Cash and cash equivalents $ 797 Accounts receivable 881 Inventory 2,306 Property, plant and equipment 8,387 Goodwill 17,275 Intangible assets 11,718 Accounts payable and accrued liabilities (2,247) Total $ 39,117 The above purchase price allocation was finalized during the second quarter of 2023. The cost of the acquisition in excess of the fair market value of the tangible and intangible assets acquired less liabilities assumed represents acquired goodwill, which is deductible for tax purposes. The goodwill arising from the transaction is primarily attributable to strategic opportunities from the acquisition of Kohana, including our ability to accelerate the development, production, and distribution of ready-to-drink products in cans and bottles to our existing customers. Intangible Assets In our determination of the fair value of intangible assets, we consider, among other factors, the best use of acquired assets, analysis of historical financial performance and estimates of future performance of the acquired business’ products. The estimated fair values of identified intangible assets are calculated considering both market participant expectations, using an income approach, as well as estimates and assumptions provided by Westrock management and management of the acquired business. Assumptions include, but are not limited to, expected revenue growth, weighted-average terminal growth rates, risk adjusted discount rate and royalty rate. The estimated fair value of customer relationships represents future after-tax discounted cash flows that will be derived from sales to existing customers of the acquired business as of the date of acquisition. The following table sets forth the components of identified intangible assets associated with the Kohana Acquisition and their estimated weighted average useful lives: Estimated Fair Estimated Useful (Thousands) Market Value Life Customer relationships $ 11,148 10 years Favorable lease asset 570 2.5 years Total $ 11,718 Kohana Coffee, which is reported within our Beverage Solutions segment, contributed net sales of $1.5 million and operating losses of $0.5 million from the date of acquisition through December 31, 2022. Expenses associated with the acquisition were not material. The following table presents the unaudited pro forma summary of our financial results as if the Kohana Acquisition had occurred on January 1, 2021. The pro forma results include additional depreciation and amortization resulting from purchase accounting adjustments. The pro forma results do not include any synergies or other benefits of the acquisition. The pro forma results are not indicative of future results of operations, or results that might have been achieved had the acquisition been consummated on January 1, 2021. Year Ended Year Ended (Thousands) December 31, 2022 December 31, 2021 Revenue $ 884,228 716,849 Net loss attributable to common shareholders (84,651) (44,353) |
Inventories
Inventories | 12 Months Ended |
Dec. 31, 2023 | |
Inventories | |
Inventories | Note 7. Inventories The following table summarizes inventories as of December 31, 2023 and 2022: (Thousands) December 31, 2023 December 31, 2022 Raw materials $ 78,882 $ 66,925 Finished goods 26,857 21,232 Green coffee 44,182 57,679 Total inventories $ 149,921 $ 145,836 Green coffee inventories represents green coffee held for resale. At December 31, 2023 and 2022, all green coffee held for resale was included within our Sustainable Sourcing & Traceability segment. |
Property, Plant and Equipment,
Property, Plant and Equipment, Net | 12 Months Ended |
Dec. 31, 2023 | |
Property, Plant and Equipment, Net | |
Property, Plant and Equipment, Net | Note 8. Property, Plant and Equipment, Net The following table summarizes property, plant and equipment, net as of December 31, 2023 and 2022: (Thousands) Depreciable Lives December 31, 2023 December 31, 2022 Land $ 8,778 $ 9,052 Buildings (4) 10-40 years 35,911 35,499 Leasehold improvements (1) 9,800 1,651 Plant equipment (4) 3-15 years 128,639 107,215 Vehicles and transportation equipment 3-5 years 648 700 IT systems 3-7 years 8,909 3,053 Furniture and fixtures (4) 3-10 years 3,294 3,068 Customer beverage equipment (2) 3-5 years 22,931 21,930 Lease right-of-use assets (3) 81 36 Construction in progress and equipment deposits (4) 208,308 70,004 427,299 252,208 Less: accumulated depreciation (83,261) (67,002) Property, plant and equipment, net $ 344,038 $ 185,206 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. 4 – We identified a $10.1 million classification error in the disclosure of buildings, plant equipment, furniture and fixtures, and construction in progress and equipment deposits for the year ended December 31, 2022. Amounts presented above reflect the corrected amounts. Depreciation expense for the years ended December 31, 2023, 2022 and 2021 was $18.4 million, $17.4 million and $18.8 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 December 31, 2023 are expected to be in production use. |
Leases
Leases | 12 Months Ended |
Dec. 31, 2023 | |
Leases | |
Leases | Note 9. Leases We have operating leases for manufacturing, production, administrative, distribution and warehousing facilities, vehicles and machinery and equipment. Some of our lease agreements have renewal options, tenant improvement allowances, rent holidays and rent escalation clauses. The remaining terms on our leases range from 1 year to 15 years, some of which may include options to extend the leases and some of which may include options to terminate the leases within 1 year. 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 Consolidated Balance Sheets: (Thousands) Balance Sheet Location December 31, 2023 December 31, 2022 Right-of-use operating lease assets Operating lease right-of-use assets $ 67,601 $ 11,090 Operating lease liabilities - current Accrued expenses and other current liabilities 4,809 2,832 Operating lease liabilities - noncurrent Operating lease liabilities 63,554 8,424 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 Consolidated Statements of Operations. Year Ended December 31, (Thousands) 2023 2022 Operating lease cost $ 4,857 $ 4,422 Short-term lease cost 1,020 40 Total $ 5,877 $ 4,462 We identified a $3.3 million disclosure error in the disclosure of the components of lease costs for the year ended December 31, 2022. The amounts presented above reflect the corrected amounts. The following table presents information about the Company’s weighted average discount rate and remaining lease term as of December 31, 2023 and 2022: December 31, 2023 December 31, 2022 Weighted-average discount rate 7.8% 8.4% Weighted-average remaining lease term 12.9 years 4.6 years Supplemental cash flow information about the Company’s leases as of December 31, 2023 and 2022, respectively, is as follows: Year Ended December 31, (Thousands) 2023 2022 Operating cash flows from operating leases $ 4,317 $ 3,373 We identified a $2.5 million disclosure error in the disclosure of operating cash flows from operating leases for the year ended December 31, 2022. The amount presented above reflects the corrected amount. During the year ended December 31, 2023, the Company obtained $60.2 million of right-of-use operating lease assets in exchange for lease obligations. 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 Consolidated Balance Sheets. There were Future minimum lease payments under non-cancellable operating leases as of December 31, 2023 are as follows: (Thousands) 2024 $ 9,708 2025 8,678 2026 8,086 2027 8,149 2028 7,635 Thereafter 69,498 Total future minimum lease payments 111,754 Less: imputed interest (43,391) Present value of minimum lease payments $ 68,363 On February 12, 2024, following the completion of its 530,000 square foot distribution center in Conway, Arkansas, the Company entered into a lease termination agreement for the premises located at 1601 Gregory Street, North Little Rock, Arkansas, 72114, originally entered into on October 24, 2018. The lease will terminate by mutual agreement, effective June 30, 2024. As of December 31, 2023, the premises associated with this lease was classified as held and used. As of the date of this Annual Report on Form 10-K, costs are expected to be incurred, by the Company as a result of the lease termination. This lease termination event does not significantly alter the Company’s operational capabilities or its financial position. |
Goodwill
Goodwill | 12 Months Ended |
Dec. 31, 2023 | |
Goodwill | |
Goodwill | Note 10. Goodwill Changes in the carrying amount of goodwill occurring during the years ended December 31, 2023 and 2022 were as follows: Beverage (Thousands) Solutions Total Balance at December 31, 2021 Goodwill $ 173,936 $ 173,936 Accumulated impairment loss (76,883) (76,883) 97,053 97,053 Changes during the period: Acquisitions 16,946 16,946 Balance at December 31, 2022 Goodwill $ 190,882 $ 190,882 Accumulated impairment loss (76,883) (76,883) 113,999 113,999 Changes during the period: Acquisitions 2,025 2,025 Measurement period and other adjustments 87 87 Balance at December 31, 2023 Goodwill $ 192,994 $ 192,994 Accumulated impairment loss (76,883) (76,883) $ 116,111 $ 116,111 |
Intangible Assets, Net
Intangible Assets, Net | 12 Months Ended |
Dec. 31, 2023 | |
Intangible Assets, Net | |
Intangible Assets, Net | Note 11. Intangible Assets, Net The following table summarizes intangible assets, net as of December 31, 2023 and 2022: December 31, 2023 Accumulated (Thousands) Cost Amortization Net Customer relationships $ 148,648 $ (26,487) $ 122,161 Favorable lease asset 790 (413) 377 Software 1,079 (672) 407 Intangible assets, net $ 150,517 $ (27,572) $ 122,945 December 31, 2022 Accumulated (Thousands) Cost Amortization Net Customer relationships $ 148,648 $ (18,778) $ 129,870 Favorable lease asset 710 (140) 570 Software 919 (473) 446 Intangible assets, net $ 150,277 $ (19,391) $ 130,886 Amortization expense of intangible assets was $8.2 million, $6.8 million and $6.7 million for the years ended December 31, 2023, 2022 and 2021, respectively. As of December 31, 2023, the weighted average useful life for definite-lived intangibles is approximately 20 years. The estimated amortization expense for intangible assets subject to amortization over the next five years is: (Thousands) 2024 $ 8,096 2025 7,883 2026 7,785 2027 7,785 2028 7,754 Thereafter 83,642 Total $ 122,945 |
Debt
Debt | 12 Months Ended |
Dec. 31, 2023 | |
Debt | |
Debt | Note 12. Debt Our long-term debt as of December 31, 2023 and 2022 was as follows: (Thousands) December 31, 2023 December 31, 2022 Term loan facility $ 164,063 $ 175,000 Revolving credit facility 65,000 — International trade finance lines 43,694 42,905 International notes payable 6,179 1,750 Other loans 39 25 Total debt 278,975 219,680 Unamortized debt costs (2,378) (2,769) Current maturities of long-term debt (9,811) (11,504) Short-term debt (43,694) (42,905) Long-term debt, net $ 223,092 $ 162,502 The following table summarizes our long-term debt payments required in each of the next five years and thereafter: (Thousands) 2024 $ 9,811 2025 11,501 2026 17,719 2027 196,250 2028 — Thereafter — Total $ 235,281 Credit Agreement The Company is party to 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”), (b) a senior secured first lien term loan facility in an initial aggregate principal amount of $175.0 million (the “Term Loan Facility”), and (c) incremental term loan commitments in the form of a senior secured delayed draw term loan credit facility (the “Delayed Draw Term Loan Facility”) in the aggregate principal amount of $50.0 million. The Revolving Credit Facility, the Term Loan Facility and the Delayed Draw 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 Company’s assets. Borrowings under the Revolving Credit Facility, the Term Loan Facility and the Delayed Draw Term Loan Facility will bear interest, at the Borrower’s option, initially at an annual rate equal to (a) 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”) or (b) 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 for a one month interest period plus 1.00%, (the “Base Rate”)), in each case plus an applicable margin. At December 31, 2023, we had $65.0 million of outstanding borrowings under the Revolving Credit Facility, with a weighted average interest rate of 8.9%, and the interest rate applicable to our Term Loan Facility was 9.2%, and we had $2.6 million of standby letters of credit outstanding. At December 31, 2023, no amounts were outstanding under the Delayed Draw Term Loan Facility; however, on January 8, 2024, the Company borrowed $50.0 million under the Delayed Draw Term Loan Facility, using a portion of the proceeds to repay outstanding borrowings under the Revolving Credit Facility. On June 30, 2023, we entered into Amendment No. 2 (the “Second Amendment”) to the Credit Agreement. The Second Amendment established a covenant relief period (the “Covenant Relief Period”) commencing on June 30, 2023, and ending on the earlier to occur of (i) April 1, 2025 and (ii) the date following December 31, 2023, on which the Borrower delivers to the administrative agent a certificate of a responsible officer (a) electing to terminate the Covenant Relief Period, (b) demonstrating a total net leverage ratio less than During the Covenant Relief Period, (i) the total net leverage ratio financial covenant will be (a) 5.00:1.00 for the test period ending June 30, 2023, (b) 5.25:1.00 for the test period ending September 30, 2023, (c) 5.50:1.00 for the test periods ending on or after December 31, 2023 to and including September 30, 2024, (d) 5.00:1.00 for the test period ending December 31, 2024 and (e) 4.50:1.00 for the test period ending March 31, 2025 and (ii) the applicable margin for any term SOFR rate loan will range from 2.50% to 3.75% and for any ABR loan will range from 1.50% to 2.75%, in each case depending on the total net leverage ratio. After the Covenant Relief Period, the total net leverage ratio financial covenant and the applicable margin for term SOFR rate loans and ABR loans will revert to the pre-amendment terms of the Credit Agreement. During and after the Covenant Relief Period, the minimum interest coverage ratio financial covenant will be 2.00 :1.00. As of December 31, 2023, we were in compliance with the Financial Covenants. See Note 23 for disclosures regarding the entry into Amendment No. 3 to the Credit Agreement on February 15, 2024, which modifies certain requirements of the Company during the Covenant Relief Period. The Term Loan Facility and Delayed Draw Term Loan Facility require quarterly principal payments during the first three years of 1.25% of the original principal balance. Quarterly payments increase to 1.875% and 2.5% of the original principal balance during the fourth and fifth years, respectively. We incurred a total of $6.6 million of financing fees in connection with the Credit Agreement and related amendments. $3.3 million of the fees were allocated to the Term Loan Facility and are being amortized utilizing the frozen effective yield method based on the interest rate in place at the issuance of the Term Loan Facility. $3.3 million of the fees were allocated to the Revolving Credit Facility, which are reported within other long-term assets on the Consolidated Balance Sheets and are being amortized ratably over the term of the Revolving Credit Facility. 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 $1.6 million early termination fee, and wrote off $4.0 million of unamortized deferred financing fees associated with the termination of the Prior Term Loan Facility, which are recorded within interest expense on the Consolidated Statement of Operations. 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 $0.3 million of the $1.3 million unamortized deferred financing fees associated with the Prior ABL Facility, which are recorded within interest expense on the 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 On March 21, 2023, we entered into a $70 million working capital trade finance facility with multiple financial institutions through our subsidiary, Falcon. The facility replaced Falcon’s then existing working capital trade finance facility. The facility is uncommitted and repayable on demand, with certain of Falcon’s assets pledged as collateral against the facility. The facility will mature one year from inception. Borrowings under the facility will bear interest at the borrower’s option at a rate equal to (a) Term SOFR, as defined in the facility, plus a margin of 4.00% plus a liquidity premium set by the lender at the time of borrowing or (b) the Base Rate (determined by reference to the greatest of (i) the Prime Rate, as defined in the facility, at such time, (ii) one-half of 1.00% At December 31, 2023, there was $37.0 million of outstanding borrowings under the facility, which is recorded in short-term debt in the Consolidated Balance Sheets. On September 28, 2023, we entered into a $5.0 million unsecured working capital trade finance facility with responsAbility Climate Smart Agriculture & Food Systems Fund through our subsidiary, Falcon. The facility will mature on December 31, 2026, and requires stepped repayments of million on December 31, 2026. Borrowings under the facility will bear interest at the borrower’s option at a rate equal to (a) (i) the most recent applicable for the longest period (for which Term SOFR is available) which is less than the applicable interest period of the loan or (ii) if no such Term SOFR is available for a period which is less than the applicable interest period, SOFR for the day which is two U.S. Government Securities Business Days before the Quotation day; or (b) the most recent applicable Term SOFR (as of Quotation Day) for the shortest period (for which Term SOFR is available) which exceeds the applicable interest period of that loan, in each case plus the applicable margin. At December 31, 2023, there was million is recorded in long-term debt, net and current maturities of long-term debt, respectively, on the Consolidated Balance Sheets. Falcon’s facility contains certain restrictive financial covenants which require Falcon to maintain certain levels of working capital, debt, and tangible net worth. Falcon was in compliance with these financial covenants as of December 31, 2023. Westrock Coffee International, LLC, through its subsidiary Rwanda Trading Company, maintains two mortgage and inventory-backed lending facilities with a local bank in Rwanda: (a) a short-term trade finance facility with a balance of $6.7 million at December 31, 2023 and (b) a long-term note payable with a balance of $1.2 million at December 31, 2023. |
Series A Preferred Shares
Series A Preferred Shares | 12 Months Ended |
Dec. 31, 2023 | |
Series A Preferred Shares. | |
Series A Preferred Shares | Note 13. 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 During the year ended December 31, 2023, the Company issued 76,030 Common Shares upon the conversion of 76,030 Westrock Series A Preferred Shares, receiving no proceeds upon the issuance of the Common Shares. After February 26, 2028 (i.e., the five trading days ending on and including the trading day immediately preceding the redemption notice date. Assuming that the liquidation preference of the Series A Preferred Shares remains 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 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. For the years ended December 31, 2023 and 2022, the Company recorded |
Derivatives
Derivatives | 12 Months Ended |
Dec. 31, 2023 | |
Derivatives | |
Derivatives | Note 14. Derivatives We record all derivatives, whether designated in a hedging relationship or not, at fair value on the 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 futures 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 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 (loss) (“AOCI”) and are reclassified into the line item in the 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 years ended December 31, 2023, 2022 or 2021. Within our Beverage Solutions segment, we have entered into coffee futures 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 as cash flow hedges. 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 11.5 million pounds and 29.2 million pounds as of December 31, 2023 and 2022, respectively. During the years ended December 31, 2023 and 2022, the Company purchased coffee futures contracts and coffee options contracts under our cash flow hedging program with aggregate notional amount of 63.4 million pounds and 98.6 million pounds, respectively. Approximately $6.4 million of net realized loss, $13.1 million of net realized gains and $7.2 million of net realized gains, representing the effective portion of the cash-flow hedge, were subsequently reclassified from AOCI to earnings and recognized in cost of sales in the Consolidated Statements of Operations for the years ended December 31, 2023, 2022 and 2021, respectively. As of December 31, 2023, the estimated amount of net gains reported in AOCI that is expected to be reclassified to the Consolidated Statements of Operations within the next twelve months is $6.6 million. 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 Consolidated Balance Sheets are set forth below: (Thousands) Balance Sheet Location December 31, 2023 December 31, 2022 Derivative assets designated as cash flow hedging instruments: Coffee futures contracts (1) Derivative assets $ 3,355 $ — Total $ 3,355 $ — Derivative assets not designated as cash flow hedging instruments: Forward purchase and sales contracts Derivative assets $ 10,303 $ 15,053 Total 10,303 15,053 Total derivative assets $ 13,658 $ 15,053 Derivative liabilities designated as cash flow hedging instruments: Coffee futures contracts (1) Derivative liabilities $ — $ 3,334 Total $ — $ 3,334 Derivative liabilities not designated as cash flow hedging instruments: Forward purchase and sales contracts Derivative liabilities $ 3,731 $ 4,258 Total 3,731 4,258 Total derivative liabilities $ 3,731 $ 7,592 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 for the years ended December 31, 2023, 2022 and 2021: Year Ended December 31, (Thousands) Statement of Operations Location 2023 2022 2021 Derivative assets designated as cash flow hedging instruments: Net realized gains (losses) on coffee derivatives Costs of sales $ (6,377) $ 13,094 $ 7,197 Derivative assets and liabilities not designated as cash flow hedging instruments: Net unrealized gains (losses) on forward sales and purchase contracts Costs of sales $ (4,064) $ 8,828 $ (4,799) |
Fair Value Measurements
Fair Value Measurements | 12 Months Ended |
Dec. 31, 2023 | |
Fair Value Measurements | |
Fair Value Measurements | Note 15. Fair Value Measurements ASC 820, Fair Value Measurements 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 December 31, 2023: December 31, 2023 (Thousands) Level 1 Level 2 Level 3 Total Assets: Green coffee associated with forward contracts $ — $ 33,447 $ — $ 33,447 Coffee futures contracts 3,355 — — 3,355 Forward purchase and sales contracts — 10,303 — 10,303 Total $ 3,355 $ 43,750 $ — $ 47,105 Liabilities: Forward purchase and sales contracts — 3,731 — 3,731 Westrock Public Warrants 39,371 — — 39,371 Westrock Private Warrants — — 5,430 5,430 Total $ 39,371 $ 3,731 $ 5,430 $ 48,532 The following table presents the change in the fair value of Level 3 Westrock Private Warrants liabilities during the year ended December 31, 2023: Westrock (Thousands) Private Warrants Fair value as of December 31, 2022 $ 28,342 Transfer out of level 3 (18,916) Change in fair value (3,996) Fair value as of December 31, 2023 $ 5,430 The following table summarizes the fair value of financial instruments at December 31, 2022: December 31, 2022 (Thousands) Level 1 Level 2 Level 3 Total Assets: Green coffee associated with forward contracts $ — $ 39,928 $ — $ 39,928 Forward purchase and sales contracts — 15,053 — 15,053 Total $ — $ 54,981 $ — $ 54,981 Liabilities: Coffee futures contracts $ 3,334 $ — $ — $ 3,334 Forward purchase and sales contracts — 4,258 — 4,258 Westrock Public Warrants 27,179 — — 27,179 Westrock Private Warrants — — 28,342 28,342 Total $ 30,513 $ 4,258 $ 28,342 $ 63,113 The following table presents the change in the fair value of Level 3 Westrock Private Warrants liabilities during the year ended December 31, 2022: Westrock (Thousands) Private Warrants Fair value as of December 31, 2021 $ — Assumption of warrants 11,618 Change in fair value 16,724 Fair value as of December 31, 2022 $ 28,342 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 $2.30 and $2.27 per warrant as of December 31, 2023 and 2022, respectively. Westrock Private Warrants price of per warrant as of December 31, 2023 and 2022, respectively, 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: December 31, 2023 December 31, 2022 Stock price $ 10.21 $ 13.36 Exercise price 11.50 11.50 Expected term (years) 5.00 5.00 Expected volatility 33.80% 7.74% Risk-free rate of return 3.91% 3.99% Dividend yield 0.00% 0.00% The most significant of these primary unobservable inputs utilized in determining the fair value of the Westrock Private Warrants is the expected volatility of the stock price, which is determined by use of an option pricing model. Financial instruments consist primarily of cash, accounts receivable, accounts payable, a supply chain finance program and long-term debt. The carrying amount of cash, accounts receivable, accounts payable and the supply chain finance program was estimated by management to approximate fair value due to the relatively short period of time to maturity for those instruments. The Term Loan Facility and the Revolving Credit Facility are carried on the Consolidated Balance Sheets at amortized cost and are estimated by management to approximate fair value as of December 31, 2023, as the interest rate on these facilities is adjusted for changes in the market rates. The fair value of the Term Loan Facility and the Revolving Credit 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 years ended December 31, 2023 and 2022 requiring these non-financial assets and liabilities to be subsequently recognized at fair value. |
Equity-Based Compensation
Equity-Based Compensation | 12 Months Ended |
Dec. 31, 2023 | |
Equity-Based Compensation | |
Equity-Based Compensation | Note 16. Equity-Based Compensation The Company has implemented equity compensation programs, which are designed to attract and retain key employees while also aligning employees’ interests with the interests of our shareholders. Compensation expense for all equity-based compensation awards is based on the grant date fair value estimate. As equity-based compensation expense recognized is based on awards ultimately expected to vest, such expense is reduced for forfeitures estimated at the date of grant based on our historical experience and future expectations. Income tax benefits related to the tax deductions for share-based awards are recognized only upon settlement of the related share-based awards. Stock Options In August 2022, in connection with the Transaction, unit option awards issued under the Company’s 2020 Unit Option Incentive Plan, as amended (the “2020 Option Plan”), were equitably converted in accordance with the terms of the 2020 Option 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 The fair value of the Westrock common units underlying the options granted under the 2020 Option Plan had been determined by the Westrock board of directors, with input from management and corroboration from contemporaneous, independent third-party valuations. Given the absence of a public trading market for the Westrock common units when the options were granted under the 2020 Option Plan, and in accordance with the American Institute of Certified Public Accountants Accounting and Valuation Guide: Valuation of Privately Held Company Equity Securities Issued as Compensation (the “AICPA Practice Guide”), the Westrock board exercised reasonable judgment and considered a number of objective and subjective factors to determine the best estimate of the fair value of the Westrock common units at each grant date, including obtaining independent third-party valuations. Independent third-party valuations that we utilized to estimate the fair value of the Westrock common units underlying the unit options under the 2020 Option Plan included a combination of an income approach, based on the present value of estimated future cash flows, and a market approach based on market data of comparable businesses and acquisition multiples paid in recent transactions. The discounted cash flow model reflected our assumptions regarding revenue growth rates, cost structure, economic and market trends, and other expectations around the anticipated operating results of our business. We discounted the estimated cash flows for the entity using rates that represented a market participant’s weighted average cost of capital commensurate with the underlying business operations. The market approach developed an indication of fair value by calculating average market pricing multiples of revenues and EBITDA for selected peer publicly traded companies, as well as multiples for relevant transactions that have taken place. We evaluated the weighting applied to each valuation methodology in the determination of the concluded fair value. During the year ended December 31, 2022 we granted 0.3 million options to employees. One-half of the options granted vest over four years of continuous service by the employee, and one-half of the options 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 The Company recognizes expense related to the options using graded vesting attribution and recognized approximately $0.4 million, $0.6 million and $0.5 million of expense for the years ended December 31, 2023, 2022 and 2021, respectively, which is included in selling, general and administrative expense on our Consolidated Statements of Operations. The total compensation cost of unvested options, not yet recognized, is approximately $0.1 million, which is to be recognized over the next four years. Weighted-Average Weighted-Average Remaining Options Exercise Price Contractual Term Options outstanding at December 31, 2022 3,217,349 $ 9.54 7.8 years Options granted — $ — Options forfeited (323,148) $ 9.54 Options exercised (88,525) $ 9.54 Outstanding at December 31, 2023 2,805,676 $ 9.54 6.8 years Exercisable at December 31, 2023 841,705 $ 9.54 6.7 years Intrinsic value for stock options is defined as the amount by which the current market price of the underlying stock exceeds the weighted-average exercise price. For stock options where the weighted-average exercise price exceeds the current market price of the underlying stock, the intrinsic value is zero. The intrinsic value of options outstanding as of December 31, 2023 was Restricted Stock On February 28, 2020, the Company granted restricted Common Units to three key executives. In August 2022, in connection with the Transaction, each restricted Common Unit was converted into 0.1049203474320 restricted Common Shares (“RCSs”). Such RCSs carry the same rights and limitations as the Common Shares under the organizational documents of the Company, except that the RCSs are subject to vesting and forfeiture. The RCSs vest in three installments on each anniversary of the grant date, vesting in full on February 28, 2023. During the years ended December 31, 2023, 2022 and 2021, the Company issued RCS expense is based on the fair value of the common units on the date of grant and is amortized over the vesting period, which is generally three years. The value of the RCSs was calculated using a combination of historic equity and implied asset volatility of 40%, a risk-free rate of 1.14%, and a marketability discount of 30%. The Company recognized approximately $0.1 million, $0.3 million and $0.8 million in expense for the RCSs in the years ended December 31, 2023, 2022 and 2021, respectively, which is included in selling, general and administrative expense on our Consolidated Statements of Operations. Restricted Stock Unit Awards During the years ended December 31, 2023 and 2022, the Company granted 1.4 million and 1.1 million restricted stock units (“RSUs”), respectively, under the 2022 Equity Plan. The RSUs had a grant date fair value of million, respectively, which was calculated using the closing price of the Common Shares on the applicable date of grant. The RSUs are amortized on a straight-line basis to expense over the vesting period, which is generally . During the years ended December 31, 2023 and 2022, the Company recognized approximately The following table sets forth the RSU activity under the 2022 Equity Plan for the year ended December 31, 2023. Weighted-Average Fair Value at Units Grant Date Outstanding at December 31, 2022 1,127,000 $ 11.49 Granted 1,370,564 11.53 Forfeited (91,077) 11.63 Vested (416,705) 11.49 Outstanding at December 31, 2023 1,989,782 $ 11.51 During the year ended December 31, 2023, the Company issued 310,635 Common Shares upon the vesting of RSUs, for which no proceeds were recorded. The aggregate intrinsic value of RSUs vested for the year ended December 31, 2023 was |
Accumulated Other Comprehensive
Accumulated Other Comprehensive Income (Loss) | 12 Months Ended |
Dec. 31, 2023 | |
Accumulated Other Comprehensive Income (Loss) | |
Accumulated Other Comprehensive Income (Loss) | Note 17. Accumulated Other Comprehensive Income (Loss) Comprehensive income (loss) includes all changes in equity during the period, except those resulting from transactions with our shareholders. Comprehensive income (loss) is comprised of net earnings and other comprehensive income (loss). Accumulated other comprehensive income (loss) reported on our Consolidated Balance Sheets consists of foreign currency translation adjustments and other items and the unrealized gains and losses, net of applicable taxes, on derivative instruments that have been designated and qualify as cash flow hedges. Changes in accumulated other comprehensive income (loss), net of tax by component is as follows for the years ended December 31, 2023, 2022 and 2021: Year Ended December 31, (Thousands) 2023 2022 2021 Cash flow hedge changes in fair value gain (loss): Balance at beginning of period $ (6,355) $ 11,759 $ 3,581 Other comprehensive income (loss) before reclassifications 6,570 (10,978) 18,010 Amounts reclassified from accumulated comprehensive income 6,377 (13,094) (7,197) Tax effect (3,230) 5,958 (2,635) Net accumulated other comprehensive income 3,362 (6,355) 11,759 Less: Other comprehensive income attributable to non-controlling interests — — — Balance at end of period 3,362 (6,355) 11,759 Foreign currency translation gain Balance at beginning of period 252 259 239 Other comprehensive income (loss) before reclassifications 204 (7) 20 Amounts reclassified from accumulated comprehensive income — — — Tax effect — — — Net accumulated other comprehensive income 456 252 259 Less: Other comprehensive income attributable to non-controlling interests — — — Balance at end of period 456 252 259 Accumulated other comprehensive income (loss) at end of period $ 3,818 $ (6,103) $ 12,018 |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2023 | |
Income Taxes | |
Income Taxes | Note 18. Income Taxes U.S. and international components of loss before income taxes is as follows: Year Ended December 31, (Thousands) 2023 2022 2021 U.S. (34,695) (51,607) (28,573) International (6,130) (3,743) 3,897 Loss before income taxes $ (40,825) $ (55,350) $ (24,676) Income tax expense (benefit) consisted of the following: Year Ended December 31, (Thousands) 2023 2022 2021 Current expense (benefit) Federal $ — $ — $ — State 266 529 179 Foreign (112) 1,619 (99) Total current 154 2,148 80 Deferred expense (benefit) Federal (7,365) 173 (4,617) State 236 81 (901) Foreign 617 (2,291) 2,070 Total deferred (6,512) (2,037) (3,448) Income tax expense (benefit) $ (6,358) $ 111 $ (3,368) A reconciliation of income tax expense (benefit) to the federal statutory rate is as follows: Year Ended December 31, (Thousands) 2023 2022 2021 Income tax expense (benefit) at U.S. statutory income tax rate $ (8,573) $ (11,624) $ (5,182) State income tax expense (benefit), net of federal benefit (862) (1,507) (773) Foreign rate differential (260) (15) (304) Change in fair value of warrants (2,144) 6,232 — Global intangible low-taxed income ("GILTI") inclusion — — 1,095 Transaction costs — — 260 Stock compensation (windfall)/shortfall (838) (195) 57 Corporate interest restriction 677 291 — Excess compensation (§162(m)) 717 182 — Other permanent differences 161 146 78 Change in valuation allowance 4,414 7,319 632 Provision to return adjustments — (320) (166) Effect of change in foreign tax rates — (552) 1,181 Other 350 154 (246) Income tax expense (benefit) $ (6,358) $ 111 $ (3,368) Effective tax rate 15.6% (0.2)% 13.6% Deferred income tax assets and liabilities were recognized on temporary differences between the financial and tax basis of existing assets and liabilities as follows: (Thousands) December 31, 2023 December 31, 2022 Deferred tax assets Liabilities and reserves $ 2,158 $ 2,300 Interest limitation 18,217 16,256 Net operating losses 21,804 13,483 Transaction expenses 186 206 Inventories 1,146 1,449 Stock compensation 1,205 794 Derivatives — 552 Operating lease liabilities 16,223 2,430 Other 2,131 269 Total 63,070 37,739 Valuation allowance (12,878) (8,464) Total deferred tax assets, net $ 50,192 $ 29,275 Deferred tax liabilities Property, plant and equipment $ (15,649) $ (13,334) Intangible assets (26,392) (27,358) Derivatives (2,214) — Right-of-use assets (16,041) (2,403) Other (743) (535) Total (61,039) (43,630) Net deferred tax liability $ (10,847) $ (14,355) We establish a valuation allowance to reduce deferred tax assets if, based on the weight of the available evidence, both positive and negative, for each respective tax jurisdiction, it is more likely than not that some portion or all of the deferred tax assets will not be realized. A valuation allowance related to domestic deferred tax assets of $9.9 million and $6.9 million, respectively, was recorded, of which $7.6 million and $5.5 million, respectively, was against a portion of the Company’s Section 163(j) interest limitation carryforward, and the remainder was against certain state net operating losses as of December 31, 2023 and 2022, respectively. A valuation allowance related to foreign deferred tax assets of million was recorded against certain foreign net operating losses as of December 31, 2023 and 2022, respectively. The amount of deferred tax assets considered realizable could be adjusted in the near term, resulting in an increase to the valuation allowance, if estimates of future taxable income during the carryforward period are reduced. Activity in the valuation allowance is as follows: (Thousands) December 31, 2023 December 31, 2022 December 31, 2021 Beginning balance $ 8,464 $ 1,145 $ 513 Additions 4,414 7,319 632 Ending Balance $ 12,878 $ 8,464 $ 1,145 As of December 31, 2023, the Company had federal net operating loss carryforwards of approximately $88.3 million which do not expire. As of December 31, 2023, the Company had post-apportionment state net operating loss carryforwards of approximately $96.6 million which begin to expire in 2030. As of December 31, 2023, the Company had foreign net operating loss carryforwards of approximately $10.9 million which begin to expire in 2025. As of December 31, 2023 and 2022, the Company’s reserve for uncertain tax positions was $4.0 million and $0.1 million, respectively. It is reasonably possible the Company’s reserve for uncertain tax positions could increase or decrease in the next 12 months. However, it is not practical to estimate the change, which may be influenced by several factors. Of the total reserve for uncertain tax positions as of December 31, 2023, only effective tax rate if released. As indicated in Note 3, the Company re-evaluates uncertain tax positions on a quarterly basis. The Company recognizes potential interest and penalties relating to unrecognized tax positions as a component of income tax expense (benefit). A reconciliation of the beginning and ending balances of the total amounts of unrecognized tax benefits is as follows: (Thousands) December 31, 2023 December 31, 2022 December 31, 2021 Beginning balance $ 96 $ 96 $ 96 Additions for tax positions in prior period 2,473 — — Additions for tax positions in current period 1,421 — — Ending Balance $ 3,990 $ 96 $ 96 As a result of the U.S. Tax Cuts and Jobs Act of 2017, or the Tax Act, our accumulated foreign earnings have been subjected to U.S. tax. Moreover, all future foreign earnings will be subject to a new territorial tax system and dividends received deduction regime in the U.S. As of December 31, 2023, undistributed earnings of certain foreign subsidiaries of approximately $6.8 million are intended to be permanently reinvested outside the U.S. Accordingly, no provision for foreign withholding tax or state income taxes associated with a distribution of these earnings has been made. Determination of the amount of the unrecognized deferred tax liability on these unremitted earnings is not practicable. We are subject to taxation in the United States and various states and foreign jurisdictions, including the United Kingdom. As of December 31, 2023, we have no tax years under examination by the IRS, and there are currently no state or foreign income tax examinations in process. The Company is subject to United States federal income tax examinations for years after 2020 and to state and foreign income tax examinations for years after 2015. |
Earnings Per Share
Earnings Per Share | 12 Months Ended |
Dec. 31, 2023 | |
Earnings Per Share | |
Earnings Per Share | Note 19. 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 adjusted as shares reflecting the conversion ratios discussed in Note 4. Westrock Series A Preferred Shares and our RSUs issued under our 2022 Equity 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 . Neither the Series A Preferred Shares nor the RSUs have a contractual obligation to share in losses of the Company. However, undistributed earnings are allocated to the participating securities. Prior to the Conversion, the dilutive effect of CEP Units was calculated by using the “if-converted” method. This assumed an add-back of dividends on the CEP Units to net income attributable to shareholders 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 were included in the number of weighted-average units outstanding. The dilutive effect of Westrock Series A Preferred Shares is calculated using the if-converted method, which assumes an add-back of any accretion on preferred shares to net income attributable to shareholders 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 being 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. The following potentially dilutive securities were excluded from the computation of diluted shares for the periods indicated because their inclusion would have an anti-dilutive effect on dilutive earnings (loss) per common share. Year Ended December 31, (Thousands) 2023 2022 2021 Warrants 19,149 19,373 — Restricted stock 1,917 1,602 950 Options 1,445 3,217 3,200 If-converted securities 23,551 23,588 25,092 The following table sets forth the computation of basic and diluted earnings per share under the two-class method for the periods indicated. Year Ended December 31, (Thousands, except per share data) 2023 2022 2021 Basic Earnings per Common Share Numerator: Net income (loss) attributable to common shareholders $ (34,743) $ (77,633) $ (46,155) Denominator: Weighted-average common shares outstanding - basic 80,684 48,444 34,472 Basic earnings (loss) per common share $ (0.43) $ (1.60) $ (1.34) Diluted Earnings per Common Share Numerator: Net income (loss) attributable to common shareholders - basic $ (34,743) $ (77,633) $ (46,155) Effect of participating securities — — — Effect of non-participating securities — — — Net income (loss) attributable to common shareholders - diluted $ (34,743) $ (77,633) $ (46,155) Denominator: Weighted-average common shares outstanding - basic 80,684 48,444 34,472 Effect of dilutive participating securities — — — Effect of dilutive non-participating securities — — — Weighted-average common shares outstanding - diluted 80,684 48,444 34,472 Dilutive loss per common share $ (0.43) $ (1.60) $ (1.34) |
Segment Information
Segment Information | 12 Months Ended |
Dec. 31, 2023 | |
Segment Information | |
Segment Information | Note 20. Segment Information Our two operating segments, Beverage Solutions and Sustainable Sourcing & Traceability, are evaluated 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 transaction, restructuring and integrations costs, including management services and consulting agreements entered into in connection with the acquisition of S&D Coffee, Inc., 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 for the periods indicated: Year Ended December 31, 2023 Sustainable Total of Beverage Sourcing & Intersegment Reportable (Thousands) Solutions Traceability Revenues Segments Net sales $ 722,865 $ 146,911 $ (5,062) $ 864,714 Adjusted EBITDA 41,624 3,457 n/a 45,081 Less: Interest expense 29,157 Income tax expense (benefit) (6,358) Depreciation and amortization 26,584 Transaction, restructuring and integration expense 14,557 Change in fair value of warrants (10,207) Management and consulting fees (S&D acquisition) 556 Equity-based compensation 8,708 Conway extract and ready-to-drink facility start-up costs 11,698 Mark-to-market adjustments (104) Loss (gain) on disposal of property, plant and equipment 1,153 Other 3,904 Net loss $ (34,567) Capital expenditures $ 164,474 $ 137 n/a $ 164,611 Total assets 891,170 80,344 n/a 971,514 Year Ended December 31, 2022 Sustainable Total of Beverage Sourcing & Intersegment Reportable (Thousands) Solutions Traceability Revenues Segments Net sales $ 685,303 $ 207,579 $ (25,010) $ 867,872 Adjusted EBITDA 53,951 6,102 n/a 60,053 Less: Interest expense 35,497 Income tax expense (benefit) 111 Depreciation and amortization 24,210 Transaction, restructuring and integration expense 13,169 Change in fair value of warrants 29,675 Management and consulting fees (S&D acquisition) 3,868 Equity-based compensation 2,631 Mark-to-market adjustments 3,502 Loss (gain) on disposal of property, plant and equipment 935 Other 1,916 Net loss $ (55,461) Capital expenditures $ 63,158 $ 103 n/a $ 63,261 Total assets 658,814 87,399 n/a 746,213 Year Ended December 31, 2021 Sustainable Total of Beverage Sourcing & Intersegment Reportable (Thousands) Solutions Traceability Revenues Segments Net sales $ 551,013 $ 170,035 $ (22,904) $ 698,144 Adjusted EBITDA 41,468 5,706 n/a 47,174 Less: Interest expense 32,549 Income tax expense (benefit) (3,368) Depreciation and amortization 25,501 Transaction, restructuring and integration expense 8,835 Management and consulting fees (S&D acquisition) 6,382 Equity-based compensation 1,223 Mark-to-market adjustments (3,585) Loss (gain) on disposal of property, plant and equipment 243 Other 702 Net loss $ (21,308) Capital expenditures $ 24,501 $ 614 n/a $ 25,115 Total assets 510,751 82,269 n/a 593,020 Approximately 100% of our long-lived assets were located in the United States as of December 31, 2023. |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2023 | |
Commitments and Contingencies. | |
Commitments and Contingencies | Note 21. 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 normal 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 $238.7 million as of December 31, 2023 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. In addition, at December 31, 2023 we had an obligation to repurchase $8.3 million of inventory associated with repurchase agreements in which the Company’s Sustainable Sourcing & Traceability segment has sold inventory to a third party and from whom the Company’s Beverage Solutions segment has an obligation to repurchase. The liability for these obligations is recorded within accrued expenses and other current liabilities on the Company’s Consolidated Balance Sheet. |
Related Party Transactions
Related Party Transactions | 12 Months Ended |
Dec. 31, 2023 | |
Related Party Transactions | |
Related Party Transactions | Note 22. Related Party Transactions Prior to the Conversion, the Company had subordinated debt issued to Wooster Capital, LLC, which is owned and controlled by our co-founder and Chairman, Joe T. Ford, and the estate of Jo Ellen Ford, who have or had ownership in the Company. During 2022, Brown Brothers Harriman & Co., which is a holder of Westrock Series A Preferred Shares and participant of the August 2023 equity issuance, and prior to the Conversion was a holder of Westrock Series A and Series B Preferred Units, participated in Falcon’s working capital trade finance facility. As such, these persons and entities are deemed related parties. The Consolidated Financial Statements reflect the following transactions with related parties: Year Ended December 31, (Thousands) 2023 2022 2021 Interest expense: Brown Brothers Harriman $ — $ 541 $ 1,393 Wooster Capital — 503 599 Jo Ellen Ford — 139 214 Westrock Finance, LLC — — 423 Total $ — $ 1,183 $ 2,629 In connection with the acquisition of S&D Coffee, Inc. in February 2020, the Company entered into a Management Services Agreement with Westrock Group, LLC (“Westrock Group”), whose controlling manager and controlling member, Greenbrier Holdings, LLC, is owned and controlled by our co-founder and Chief Executive Officer Scott Ford. Under the terms of the agreement, which expired in February 2023, Westrock Group was paid million in return for financial, managerial, operational, and strategic services. The associated expense is recorded within selling, general and administrative expense in our Consolidated Statements of Operations. million, respectively, of such expenses. In addition, million, respectively, for such items, which are recorded in selling, general and administrative expense on our Consolidated Statements of Operations. At December 31, 2023, we had |
Subsequent Events
Subsequent Events | 12 Months Ended |
Dec. 31, 2023 | |
Subsequent Events | |
Subsequent Events | Note 23. Subsequent Events On January 8, 2024, the Company borrowed $50.0 million under the Delayed Draw Term Loan Facility, using a portion of the proceeds to repay outstanding borrowings under the Revolving Credit Facility. On February 15, 2024, the Company sold and issued in a private placement $72.0 million in aggregate principal amount of 5.00% convertible senior notes due 2029 (the “Convertible Notes”). The Convertible Notes will be unsecured and senior obligations of the Company and will accrue interest at a rate of per annum. Pursuant to the terms of the Convertible Notes, noteholders may convert their Convertible Notes at their option only in the following circumstances: (i) during the period commencing on August 15, 2024, and prior to the close of business on the trading day immediately preceding August 15, 2028, if the closing price for at least 20 trading days (whether or not consecutive) during the period of any 30 consecutive trading days in the immediately preceding calendar quarter is equal to or greater than 130% of the conversion price; (ii) during the period commencing on August 15, 2028, and prior to the close of business on the second scheduled trading day immediately preceding February 15, 2029, at any time; and (iii) during the 35 The Company will settle conversions by paying or delivering, as applicable, at the Company’s election, cash, Common Shares, or a combination of cash and Common Shares. The Company may not issue more than of the issued and outstanding Common Shares immediately prior to the issuance of the Convertible Notes in respect of the conversion of the Convertible Notes. The initial conversion price of the Convertible Notes is principal amount of Convertible Notes. The conversion price and conversion rate are subject to customary adjustments. The Convertible Notes do not contain any financial or operating covenants or restrictions on the payments of dividends, the incurrence of indebtedness or the issuance or repurchase of securities by the Company or any of its subsidiaries. The Convertible Notes contain customary terms regarding events of default. If any event of default (other than certain events of bankruptcy, insolvency or reorganization involving the Company) occurs and is continuing, then each noteholder may, by written notice to the Company, declare the principal amount of, and all accrued and unpaid interest on, such noteholder’s Convertible Notes to become due and payable immediately. If an event of default involving certain events of bankruptcy, insolvency or reorganization occurs, then the principal amount of, and all accrued and unpaid interest on, all of the Convertible Notes then outstanding will immediately become due and payable without any further action or notice by any person. The purchasers of the Convertible Notes are Westrock Group, LLC (a holder of more than 5% of the outstanding Common Shares and an affiliate of Scott Ford, the Company’s Chief Executive Officer and a member of the board of directors of the Company), Wooster Capital, LLC (an affiliate of Joe Ford, chairman of the board of directors), an affiliate of The Stephens Group, LLC (a holder of more than 5% of the outstanding Common Shares), an affiliate of Sowell Westrock, L.P. (a holder of more than 5% of the outstanding Common Shares), HF Direct Investments Pool, LLC (a holder of more than 10% of the outstanding Common Shares), an affiliate of the Herbert Hunt family and an individual investor. The offer and sale of the Convertible Notes was authorized and approved unanimously by the Audit & Finance Committee of the board of directors in accordance with the Company’s Related Party Transactions Policy. On February 15, 2024, Westrock Beverage Solutions, LLC, a Delaware limited liability company and wholly-owned subsidiary of the Company (the “Borrower”), entered into Amendment No. 3 (the “Third Amendment”) to the Credit Agreement. The Third Amendment modified the existing covenant relief period (the “Covenant Relief Period”), which commenced on June 30, 2023 and will end on the earlier to occur of (i) April 1, 2026 and (ii) any date following June 30, 2024, on which the borrower elects to terminate the Covenant Relief Period subject to satisfaction of certain conditions. During the Covenant Relief Period, the Company’s ability to incur additional indebtedness and make investments, restricted payments and junior debt restricted payments will be more limited. The Third Amendment permits the Company to issue convertible notes, including the Convertible Notes. During the Covenant Relief Period, the Applicable Margin for any term SOFR rate loan will range from 3.00% to 4.00% and for any ABR loan will range from 2.00% to 3.00%, in each case depending on the secured net leverage ratio. After the Covenant Relief Period, the Applicable Margin for any term SOFR rate loan will range from 2.00% to 3.00% and for any ABR loan will range from 1.00% to 2.00% , in each case depending on the secured net leverage ratio. The Credit Agreement, as amended, requires the Borrower to maintain compliance with (i) a secured net leverage ratio at levels ranging from 4.50:1.00 to 6.25:1.00 and stepping down to 4.50:1.00 by April 2026 and (ii) an interest coverage ratio of at least 1.50:1.00 on and prior to September 30, 2025 and at least 2.00:1.00 on December 31, 2025 and thereafter. The Credit Agreement, as amended, also includes (i) a minimum liquidity covenant requiring the Borrower not to permit its liquidity, measured as of the last business day of each calendar month commencing March 29, 2024, to be less than $15 million and (ii) an anti-cash hoarding covenant, which shall be effective only during the Covenant Relief Period, requiring the Borrower to have no more than $20 million of unrestricted cash on the last day of each calendar month when revolving loans or letters of credit are outstanding or on the date of borrowing of a revolving loan. On March 8, 2024, Falcon renewed its working capital trade finance facility with multiple institutions. The facility size was reduced from million and remains uncommitted and repayable on demand, with certain of Falcon’s assets pledged as collateral against the facility. The facility will mature from inception. Borrowings under the facility will bear interest at the borrower’s option at a rate equal to (a) Term SOFR plus a margin of 1.00% |
SCHEDULE I - PARENT COMPANY ONL
SCHEDULE I - PARENT COMPANY ONLY | 12 Months Ended |
Dec. 31, 2023 | |
SCHEDULE I - PARENT COMPANY ONLY | |
SCHEDULE I - PARENT COMPANY ONLY | SCHEDULE I WESTROCK COFFEE COMPANY PARENT COMPANY ONLY CONDENSED BALANCE SHEET (Thousands, except par value) December 31, 2023 December 31, 2022 ASSETS Cash and cash equivalents $ 49 $ 77 Related party receivables 60 2,000 Total current assets 109 2,077 Deferred income taxes 4,332 1,032 Investment in consolidated subsidiaries 432,991 336,753 Total Assets $ 437,432 $ 339,862 LIABILITIES, CONVERTIBLE PREFERRED SHARES AND SHAREHOLDERS' EQUITY Accrued expenses and other current liabilities $ 30 $ 38 Related party payables 4,645 98 Total current liabilities 4,675 136 Warrant liabilities 44,801 55,521 Total liabilities 49,476 55,657 Series A Convertible Preferred Shares, $0.01 par value, 24,000 shares authorized, 23,512 shares and 23,588 shares issued outstanding 274,216 274,936 Shareholders' Equity 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, 88,051 shares and 75,020 shares issued outstanding 880 750 Additional paid-in-capital 471,666 342,664 Accumulated deficit (362,624) (328,042) Accumulated other comprehensive income (loss) 3,818 (6,103) Total shareholders' equity 113,740 9,269 Total Liabilities, Convertible Preferred Shares and Shareholders' Equity $ 437,432 $ 339,862 See accompanying notes to the condensed financial statements. SCHEDULE I WESTROCK COFFEE COMPANY PARENT COMPANY ONLY CONDENSED STATEMENTS OF OPERATIONS Year Ended December 31, (Thousands, except per share data) 2023 2022 2021 Selling, general and administrative expense $ 8,764 $ — $ — Transaction, restructuring and integration expense 344 — — Total operating expenses 9,108 — — Loss from operations (9,108) — — Other (income) expense Change in fair value of warrant liabilities (10,207) 29,675 — Other, net (24) — — Loss (earnings) from consolidated subsidiaries 39,006 23,364 21,947 Loss before income taxes (37,883) (53,039) (21,947) Income tax expense (benefit) (3,301) 2,146 — Net loss attributable to shareholders (34,582) (55,185) (21,947) Comprehensive loss attributable to common shareholders $ (24,822) $ (95,754) $ (37,957) See accompanying notes to the condensed financial statements. SCHEDULE I WESTROCK COFFEE COMPANY PARENT COMPANY ONLY CONDENSED STATEMENTS OF CASH FLOWS Year Ended December 31, (Thousands) 2023 2022 2021 Cash flows from operating activities: Net cash used in operating activities $ (22,981) $ (14,950) $ (22,425) Cash flows from financing activities: Proceeds from related party debt — 11,700 — Proceeds from issuance of common equivalent preferred units — — 17,000 Proceeds from de-SPAC merger and PIPE financing — 255,737 — Payment of common equity issuance costs (1,000) (23,998) — Proceeds from common equity issuance 118,767 — — Payment of preferred equity issuance costs — (1,250) — Common equivalent preferred dividends — (4,380) — Payment of taxes for net share settlement of equity awards (2,977) (477) — Proceeds from exercise of stock options 848 375 (162) Proceeds from exercise of Public Warrants 2,632 — — Intercompany transactions, net (95,317) (223,700) 6,607 Net cash provided by financing activities 22,953 14,007 23,445 Net increase (decrease) in cash and cash equivalents and restricted cash (28) (943) 1,020 Cash and cash equivalents and restricted cash at beginning of period 77 1,020 — Cash and cash equivalents and restricted cash at end of period $ 49 $ 77 $ 1,020 See accompanying notes to the condensed financial statements. Notes to Parent Company Only Condensed Financial Statements Note 1. Basis of Presentation The condensed financial statements of Westrock Coffee Company (the “Registrant”) have been prepared in accordance with Rule 12-04, Schedule I of Regulation S-X, as the restricted assets of the subsidiaries of Westrock, as defined in Rule 4-08(e)(3) of Regulation S-X, exceed 25% of the consolidated net assets of the Company. The condensed financial statements of Westrock Coffee Company have been prepared using the same accounting principles and policies described in Note 3, Summary of Significant Accounting Policies, of Part II, Item 8 Financial Statements and Supplementary Data of this Annual Report on Form 10-K, with the only exception being that the parent company accounts for its subsidiaries using the equity method of accounting. The parent company condensed financial information should be read in conjunction with the Company’s consolidated financial statements and the accompanying notes thereto included in Part II, Item 8 of this Annual Report on Form 10-K. Note 2. Debt Restrictions Pursuant to the terms of the Credit Agreement, Westrock Beverage Solutions, LLC has restrictions on its ability to (i) declare or pay dividends or make any other distribution whether in cash, property, securities or a combination thereof or (ii) directly or indirectly redeem, purchase, retire or otherwise acquire for value any of Westrock Beverage Solutions, LLC’s equity interests or set aside any amount for such purpose, other than through the issuance of qualified equity interests, as defined in the Credit Agreement. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2023 | |
Summary of Significant Accounting Policies | |
Use of Estimates | Use of Estimates The preparation of consolidated financial statements in conformity with U.S. GAAP requires us to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues 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, plant and equipment, incremental borrowing rates for lease liability measurement, fair values of forward purchase and sales contracts, green coffee associated with forward contracts, 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 may differ from the estimates and assumptions used in preparing the accompanying consolidated financial statements. |
Going Concern | Going Concern In accordance with Accounting Standards Update (“ASU”) 2014-15, Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern (Subtopic 205-40) |
Cash and Cash Equivalents | Cash and Cash Equivalents Cash and cash equivalents include all highly liquid investments with original maturities not exceeding three months at the time of purchase. The fair values of our cash and cash equivalents approximate the amounts shown on our Consolidated Balance Sheets due to their short-term nature. |
Restricted Cash | Restricted Cash Restricted cash represents cash maintained in margin accounts in accordance with futures market and broker regulations. In accordance with the Company’s accounting policy, the Company does not adjust the value of its derivative assets or liabilities by the amount of cash held in margin accounts. The total cash and cash equivalents and restricted cash is as follows: (Thousands) December 31, 2023 December 31, 2022 Cash and cash equivalents $ 37,196 $ 16,838 Restricted cash 644 9,567 Total $ 37,840 $ 26,405 |
Accounts Receivable and Allowance for Credit Losses | Accounts Receivable and Allowance for Credit Losses Accounts receivable consist principally of amounts billed and currently due from customers and are generally unsecured and due within 30 to 60 days Activity in the allowance for credit losses was as follows: Year Ended December 31, (Thousands) 2023 2022 Balance at beginning of period $ 3,023 $ 3,749 Charged to selling, general and administrative expense 979 1,790 Write-offs (1,087) (2,516) Total $ 2,915 $ 3,023 |
Inventories | Inventories Inventories are stated at the lower of cost, determined on the average cost method, or net realizable value. Finished goods and work-in-process include the inventory costs of raw materials, direct labor and manufacturing overhead costs. Within our Sustainable Sourcing & Traceability segment, green coffee associated with our forward contracts is recorded at net realizable value, which approximates market price, consistent with our forward purchase contracts recorded at fair value in accordance with 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 Consolidated Statements of Operations. For the years ended December 31, 2023, 2022 and 2021, we recognized |
Property, Plant and Equipment | Property, Plant and Equipment Property, plant and equipment are stated at cost less accumulated depreciation. Depreciation is allocated between cost of sales and selling, general and administrative expense and is determined using the straight-line method over the estimated useful life of the assets. Leasehold improvements are amortized using the straight-line method over the remaining life of the lease or useful life of the asset, whichever is shorter. Maintenance and repairs are charged to operating expense when incurred. As part of normal business operations, we identify long-lived assets that are no longer productive and dispose of them. Gains and losses on disposals of assets are presented separately in our Consolidated Statements of Operations as part of operating expenses. |
Capitalized Interest | Capitalized Interest We capitalize a portion of interest costs incurred related to assets that require a period of time to get them ready for their intended use. The amount of interest capitalized is based on eligible expenditures incurred during the period involved in bringing the assets to their intended use and the Company’s weighted-average interest rate during the period. For the year ended December 31, 2023, we capitalized approximately million of interest costs. |
Supply Chain Finance Program | Supply Chain Finance Program The Company is party to a supply chain finance program (the “Program”) with a third-party financing provider to provide better working capital usage by deferring payments for certain raw materials. Under the Program, the financing provider remits payment to the Company’s suppliers for approved invoices, and the Company repays the financing provider the amount of the approved invoices, plus a financing charge, on 180-day terms. The Program is uncommitted and the financing provider may, at its sole discretion, cancel the Program at any time. The Company may request cancellation of the Program in whole or in respect of or more approved suppliers. Due to the extension of payment terms beyond the original due date of approved invoices, obligations under the Program are recorded outside of accounts payable, within our supply chain finance program, on our Consolidated Balance Sheets. Amounts paid by the financing provider to suppliers are reported as cash inflows from financing activities and a corresponding cash outflow from operating activities in our Consolidated Statements of Cash Flows. Amounts paid to the financing provider are reflected as cash outflows from financing activities in our Consolidated Statements of Cash Flows. As of December 31, 2023, there were million obligations outstanding under the Program. There were (Thousands) December 31, 2023 Confirmed obligations outstanding at the beginning of the year $ — Invoices confirmed during the year 110,217 Confirmed invoices paid during the year (32,141) Confirmed obligations outstanding at the end of the year $ 78,076 |
Goodwill and Indefinite Lived Intangible Assets | Goodwill and Indefinite Lived Intangible Assets Goodwill represents the excess purchase price of acquired businesses over the fair value of the net assets acquired. Goodwill is reviewed for impairment at least annually. In accordance with ASC 350 Goodwill – Intangible and Other , we evaluate goodwill for impairment between annual impairment tests if an event occurs or circumstances change that would more likely than not reduce the fair value of a reporting unit below its carrying amount. Application of the goodwill impairment test requires significant judgment, including the identification of reporting units; assignment of assets and liabilities to reporting units; and assignment of goodwill to reporting units. As of December 31, 2023, all of our goodwill is assigned to our Beverage Solutions reporting unit. Unless circumstances otherwise dictate, the annual impairment test is performed as of October 1. We first evaluate impairment of goodwill by assessing qualitative factors to determine whether it is more likely than not that the fair value of our reporting unit is less than its carrying amount (the “Step Zero” analysis). If the Step Zero analysis indicates that it is more likely than not that the fair value of our reporting unit is less than its carrying amount, we will perform a quantitative assessment of goodwill impairment. Qualitative factors include industry and market considerations, overall financial performance, and other relevant events and circumstances affecting the reporting unit. If we choose to perform a qualitative assessment and, after consideration of all relevant factors and circumstances, we determine that it is more likely than not that a reporting unit’s fair value is less than its carrying value, we would perform a quantitative fair value test. When performing a quantitative assessment, we estimate the fair value of our reporting unit using a combination of an income approach based on the present value of estimated future cash flows, and a market approach based on market data of comparable businesses and acquisition multiples paid in recent transactions. We evaluate the appropriateness of each valuation methodology in determining the weighting applied to each in the determination of the concluded fair value. If the carrying value of a reporting unit’s net assets is less than its fair value, no indication of impairment exists. If the carrying amount of the reporting unit is greater than the fair value of the reporting unit, an impairment loss must be recognized for the excess and recorded in the Consolidated Statements of Operations not to exceed the carrying value of goodwill. Fair value determinations of the business require considerable judgment and are sensitive to changes in underlying assumptions and factors. As a result, there can be no assurance that the estimates and assumptions made for the purposes of a quantitative goodwill impairment test will prove to be an accurate prediction of future results. Key assumptions include our expected revenue growth rates, operating profits, levels of capital expenditures, and costs of capital. In determining these assumptions, we considered our ability to execute on our plans, future economic conditions, interest rates, and other market data. Many factors are outside the control of management, and these assumptions and estimates may change in future periods. Small changes in these assumptions or estimates could materially affect our cash flow projections; and therefore, could affect the likelihood and amount of potential impairment in future periods. Accordingly, if our current cash flow assumptions are not realized, it is possible that an impairment charge may be recorded in the future. During the fourth quarter of 2023, the Company completed a qualitative analysis to evaluate impairment of goodwill and concluded that it was more likely than not that the fair value of our goodwill reporting unit exceeded the carrying amount. As a result, the Company concluded that We reached this conclusion based on consideration of the significant excess fair value over carrying value of previous quantitative goodwill impairment evaluations, the recently completed PIPE Investment and the Company’s current market capitalization. Our previous quantitative goodwill analysis indicated that the estimated fair value of our reporting units exceeded their carrying values by over 50%. Subsequent to that evaluation, we have noted no events or circumstances that would indicate that it is more likely than not that the carrying value of our reporting units exceed their fair value. |
Impairment of Property, Plant and Equipment | Impairment of Property, Plant and Equipment We review our property, plant and equipment for impairment whenever events or changes in circumstances indicate that the carrying amount of the asset group may not be recoverable from future, undiscounted net cash flows expected to be generated by the asset group. If the asset group is not fully recoverable, an impairment loss would be recognized for the difference between the carrying value of the asset group and its estimated fair value. For the years ended December 31, 2023, 2022 and 2021, there were no events or changes in circumstances indicating that the carrying amount of any of our asset groups were not recoverable from future undiscounted cash flows we expect the asset groups to generate, and no impairment losses were recognized. |
Intangible Assets | Intangible Assets As of December 31, 2023, our intangible assets subject to amortization, net of accumulated amortization were $122.9 million. Intangible assets, including acquired finite-lived intangible assets, are amortized on a straight-line basis over their remaining useful lives. The useful life for the customer relationship intangible assets acquired in our acquisitions was determined to be the expected remaining life of those relationships on a basis that reflects the pattern of realization. Other intangible assets are amortized over their expected recovery periods. Finite-lived intangible assets are tested for impairment with the applicable asset group and evaluated for impairment along with property, plant and equipment. For the years ended December 31, 2023, 2022 and 2021, no impairment losses were recognized related to intangible assets subject to amortization. |
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. The liability is subject to re-measurement at each balance sheet date until exercised, and any change in fair value is recognized in the Consolidated Statements of Operations. The Company re-measures the fair value of the Westrock Public Warrants (as defined in Note 4) based on the quoted market price of the Westrock Public Warrants. The Westrock Private Warrants (as defined in Note 4) are valued using a binomial lattice valuation model. For the years ended December 31, 2023 and 2022, the Company recognized |
Equity Method Investments | Equity Method Investments The equity method of accounting is used for investments in entities, partnerships and similar interests in which we have significant influence but do not control. Under the equity method, we adjust our investment in unconsolidated entities for additional contributions made, distributions received and income or losses from our pro-rata share of these unconsolidated entities’ net income or loss. At December 31, 2023, we had a $0.4 million investment in one unconsolidated entity, which is recorded in other long-term assets on the Consolidated Balance Sheets. |
Equity Investments | Equity Investments The Company holds strategic investments in other companies. These investments are accounted for under the measurement alternative described in ASC 321, Investments - Equity Securities |
Debt Issuance Costs | Debt Issuance Costs Debt issuance costs consist primarily of loan origination fees, underwriting, legal and other direct costs related to the issuance of debt. Fees related to the issuance of our Term Loan Facility are capitalized and amortized to interest expense over the term of the debt using the frozen effective yield method. The unamortized amount is presented as a reduction of long-term debt on the Consolidated Balance Sheets. Fees related to our Revolving Credit Facility are amortized ratably over the term of the Revolving Credit Facility and are included in other long-term assets in the accompanying Consolidated Balance Sheets. Amortization of deferred debt issuance costs are included in interest expense in the Consolidated Statements of Operations. |
Derivatives | Derivatives We use derivative financial instruments to manage our exposure to movements in certain commodity prices, primarily green coffee. All derivative instruments are valued at fair value in the Consolidated Balance Sheets. We do not use derivative instruments for speculative purposes. For coffee-related derivative instruments designated as cash flow hedges, the change in fair value of the derivative is reported as accumulated other comprehensive income (loss) (“AOCI”) and subsequently reclassified into product costs of sales in the period, or periods, when the hedged transaction affects earnings. Due to the high degree of effectiveness between the hedging instruments and the underlying exposures being hedged, fluctuations in the value of the derivative instruments are generally offset by changes in the fair values of the cash flows of the underlying exposures being hedged. The change in fair value of derivatives that were not designated and/or did not qualify as hedging instruments are immediately recognized in earnings. |
Revenue Recognition | Revenue Recognition The Company’s revenue consists of products and services which are accounted for under ASC 606, Revenue from Contracts with Customers Sales Incentives We participate in various incentive programs with our customers, including volume-based incentives, contractual rebates and promotional allowances. Volume incentives are based on our customers achieving volume targets for a period of time. Volume incentives and contractual rebates are deducted from revenue and accrued as the incentives are earned and are based on management’s estimate of the total the customer is expected to earn and claim. Promotional allowances are accrued at the time of revenue recognition and are deducted from revenue based on either the volume shipped, or the volume sold at the retailer location, depending on the terms of the allowance. We regularly review customer sales forecasts to ensure volume targets will be met and adjust incentive accruals and revenues accordingly. |
Cost of Sales | C osts of Sales We record costs associated with the manufacturing of our products in costs of sales. Finished goods inventory costs include the costs of direct labor and materials and the applicable share of overhead expense chargeable to production. |
Selling, General and Administrative Expense | Selling, General and Administrative Expense We record all other expenses not charged to production as selling, general and administrative expense, except those meeting the definition of transaction, restructuring and integration expenses. Advertising costs are expensed at the commencement of an advertising campaign and are recognized as a component of selling, general and administrative expense. For the years ended December 31, 2023, 2022 and 2021, advertising expenses were approximately $1.9 million, $3.6 million and $2.9 million, respectively. |
Shipping and Handling Costs | Shipping and Handling Costs Shipping and handling costs incurred to deliver products from our locations to the end-user consumer of those products are recorded in selling, general and administrative expense in our Consolidated Statements of Operations. Shipping and handling costs included in selling, general and administrative expense were $17.8 million, $22.1 million and $19.9 million, for the years ended December 31, 2023, 2022 and 2021, respectively. Shipping and handling costs incurred to store, prepare, and move products between production facilities or from production facilities to branch locations or storage facilities are recorded in costs of sales. |
Equity-Based Compensation | Equity-Based Compensation We have determined that our equity-based awards qualify as equity classified awards, and are measured based on the fair value of the award on the date of the grant. See Note 16. |
Foreign Currency Translation | Foreign Currency Translation The functional currency of our Rwandan subsidiary is the Rwandan Franc. All other international subsidiaries of the Company use the U.S. Dollar as their functional currency. The assets and liabilities of non-U.S. active operations are translated to U.S. dollars at the exchange rates in effect at the balance sheet dates. Revenues and expenses are translated using average monthly exchange rates prevailing during the period. The resulting gains or losses are recorded in AOCI. |
Income Taxes | Income Taxes We account for income taxes under the asset and liability method. Deferred tax assets and liabilities are recognized based on the differences between the financial statement carrying amount of assets and liabilities and their respective tax bases, using enacted income tax rates expected to apply when the deferred tax assets and liabilities are expected to be realized or settled. The Company’s foreign subsidiaries file income tax returns and are subject to tax provisions in their respective foreign tax jurisdictions. A valuation allowance is established to reduce deferred income tax assets if, on the basis of available evidence, it is more likely than not that all or a portion of any deferred tax assets will not be realized. The consideration of available evidence requires significant management judgment including an assessment of the future periods in which the deferred tax assets and liabilities are expected to be realized and projections of future taxable income. Specifically, in assessing the need for a valuation allowance, we consider the reversal of taxable temporary differences, future taxable income, the ability to carryback certain attributes and tax-planning strategies. The ultimate realization of the deferred tax assets, including net operating losses, is dependent upon the generation of future taxable income during the periods prior to their expiration. If our estimates and assumptions about future taxable income are not appropriate, the value of our deferred tax assets may not be recoverable, which may result in an increase to our valuation allowance that will impact current earnings. We re-evaluate our need for a valuation allowance on a quarterly basis. We account for uncertain tax positions using a two-step process. The first step is to evaluate the tax position for recognition by determining if the weight of available evidence indicates that it is more likely than not that the position will be sustained on audit, including resolution of related appeals or litigation processes, based on the technical merits. The second step requires management to estimate and measure the tax benefit as the largest amount that is more than 50% likely to be realized upon ultimate settlement. It is inherently difficult and subjective to estimate such amounts, as we have to determine the probability of various possible outcomes. We re-evaluate these uncertain tax positions on a quarterly basis. This evaluation is based on factors including, but not limited to, changes in facts or circumstances, changes in tax law, effectively settled issues under audit, and new audit activity. Such a change in recognition or measurement would result in the recognition of a tax benefit or an additional charge to the tax provision. We recognize interest and penalties related to unrecognized tax benefits within the income tax benefit line in the accompanying Consolidated Statements of Operations, and we include accrued interest and penalties within other long-term liabilities in the accompanying Consolidated Balance Sheets. |
Business Combinations | Business Combinations The Company accounts for business combinations under the acquisition method of accounting. The purchase price of each business acquired is allocated to the tangible and intangible assets acquired and the liabilities assumed based on information regarding their respective fair values on the date of acquisition. Any excess of the purchase price over the fair value of the separately identifiable assets acquired and the liabilities assumed is allocated to goodwill. The fair value of the acquired assets and liabilities assumed are estimated using the income, market and/or cost approach. The income approach utilizes the present value of estimated future cash flows that a business or asset can be expected to generate, while under the market approach, the fair value of an asset or business reflects the price at which comparable assets are purchased under similar circumstances. Inherent in our preparation of cash flow projections are significant assumptions and estimates derived from a review of operating results, business plans, expected growth rates, capital expenditure plans, costs of capital and tax rates. We also make certain forecasts about future economic conditions, interest rates and other market data. Many of the factors used in assessing fair value are outside the control of management. Small changes in these assumptions or estimates could materially affect the estimated fair value. Additional information, which existed as of the acquisition date but unknown to the Company at that time, may become known during the remainder of the measurement period, a period not to exceed twelve months from the acquisition date. Adjustments in the purchase price allocation may require a recasting of the amounts allocated to goodwill and intangible assets. If such an adjustment is required, the Company will recognize a measurement-period adjustment during the period in which it determines the amount of the adjustment, including the effect on earnings of any amounts it would have recorded in previous periods if the accounting had been completed at the acquisition date. The results of operations of businesses acquired are included in the Company’s Consolidated Financial Statements from their dates of acquisition. |
Transaction, Restructuring and Integration Expense | Transaction, Restructuring and Integration Expense The Company expenses non-capitalizable transaction, restructuring and integration expenses in the period in which they are incurred and services are received. Transaction costs represent incremental transaction pursuit and unsuccessful pursuit costs, including professional services (legal, accounting, advisory, etc.), finder’s fees and other direct expenses associated with an acquisition or other capital markets transactions. Restructuring and integration costs include direct costs related to restructuring activities, and costs necessary to integrate an acquired business, including professional services, systems and data conversions, severance and retention bonuses to employees of an acquired business. |
Recently adopted and issued accounting pronouncements | Recently adopted 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 Accounting Standards Update (“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, distribution and warehousing facilities, vehicles and machinery and equipment. Upon adoption, we recognized ROU assets and lease liabilities on our Consolidated Balance Sheets. See Note 9 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 expenses in our 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 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. ASU 2022-04 - Liabilities—Supplier Finance Programs (Subtopic 405-50): Disclosure of Supplier Finance Program Obligations In September 2022, the FASB issued ASU 2022-04 “Liabilities—Supplier Finance Programs (Subtopic 405-50): Disclosure of Supplier Finance Program Obligations”, which requires that a company that uses a supplier finance program in connection with the purchase of goods or services disclose sufficient information about the program to allow a user of financial statements to understand the program’s nature, activity during the period, changes from period to period, and potential magnitude. ASU 2022-04 is effective for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years, except for the amendment on roll forward information, which is effective for fiscal years beginning after December 15, 2023. The Company adopted the applicable amendments within ASU 2022-04 on a retrospective basis effective January 1, 2023. The amendments to ASU 2022-04 do not affect the recognition, measurement or financial statement presentation of obligations covered by supplier finance programs. ASU 2021-08 – Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers In October 2021, the FASB issued ASU 2021-08, “Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers”, which requires an entity to recognize and measure contract assets and contract liabilities acquired in a business combination in accordance with ASC 606, instead of at fair value on the acquisition date as previously required by ASC 805, Business Combinations (“ASC 805”). The amendments improve comparability after the business combination by providing consistent recognition and measurement guidance for acquired revenue contracts and revenue contracts not acquired in a business combination. ASU 2021-08 was effective for years beginning after December 15, 2022. The adoption of ASU 2021-08 did not have a significant impact on the Company’s financial position or results of operations. Recently issued accounting pronouncements ASU 2023-07 – Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures In November 2023, the FASB issued ASU 2023-07, “Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures”. The amendments in the update are intended to improve reportable segment disclosure requirements, primarily through enhanced disclosures about significant expenses. ASU 2023-07 requires disclosure to include significant segment expenses that are regularly provided to the chief operating decision maker (“CODM”) and a description of other segment items by reportable segment. ASU 2023-07 also requires all annual disclosures currently required by Topic 280 to be included in interim periods. The amendments in the update are effective for fiscal years beginning after December 31, 2023, and interim periods within fiscal years beginning after December 31, 2024, with early adoption permitted. The amendments in the update require retrospective application to all prior periods presented in the financial statements. The Company is currently evaluating the impact that ASU 2023-07 will have on our consolidated financial statements. ASU 2023-09 – Income Taxes (Topic 740): Improvements to Income Tax Disclosures In December 2023, the FASB issued ASU 2023-09, “Income Taxes (Topic 740): Improvements to Income Tax Disclosures”. The amendments in the update relate to the rate reconciliation and income taxes paid disclosure and are intended to improve transparency of income tax disclosures by requiring (1) consistent categories and greater disaggregation of information in the tax reconciliation and (2) income taxes paid disaggregated by jurisdiction. The other amendments in the update are intended to improve comparability of disclosures by (1) adding disclosures of pretax income (or loss) and income tax expense (or benefit) and (2) removing disclosures that no longer are considered cost beneficial or relevant. ASU 2023-09 is effective for annual periods beginning after December 15, 2024, with early adoption permitted for annual financial statements that have not yet been issued or made available for issuance. The amendments in the update should be applied on a prospective basis, with retrospective application permitted. The Company is currently evaluating the impact that ASU 2023-09 will have on our consolidated financial statements. |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Summary of Significant Accounting Policies | |
Schedule of cash and cash equivalents and restricted cash | (Thousands) December 31, 2023 December 31, 2022 Cash and cash equivalents $ 37,196 $ 16,838 Restricted cash 644 9,567 Total $ 37,840 $ 26,405 |
Schedule of activity in allowance of credit losses | Year Ended December 31, (Thousands) 2023 2022 Balance at beginning of period $ 3,023 $ 3,749 Charged to selling, general and administrative expense 979 1,790 Write-offs (1,087) (2,516) Total $ 2,915 $ 3,023 |
Schedule of contractual obligation | (Thousands) December 31, 2023 Confirmed obligations outstanding at the beginning of the year $ — Invoices confirmed during the year 110,217 Confirmed invoices paid during the year (32,141) Confirmed obligations outstanding at the end of the year $ 78,076 |
Revenue (Tables)
Revenue (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Revenue | |
Schedule of disaggregation of revenues by product type and geographic area | Year Ended December 31, (Thousands) 2023 2022 2021 Coffee & tea $ 559,040 $ 569,464 $ 445,466 Flavors, extracts & ingredients 162,043 112,155 98,850 Other 1,782 3,684 6,697 Green coffee 141,849 182,569 147,131 Net sales $ 864,714 $ 867,872 $ 698,144 Year Ended December 31, (Thousands) 2023 2022 2021 United States $ 744,067 $ 719,437 $ 583,011 All other countries 120,647 148,435 115,133 Net sales $ 864,714 $ 867,872 $ 698,144 |
Acquisitions (Tables)
Acquisitions (Tables) - Kohana Coffee, LLC | 12 Months Ended |
Dec. 31, 2023 | |
Business Acquisition [Line Items] | |
Summary of total consideration | (Thousands) Cash consideration $ 15,682 Fair value of stock consideration 23,435 Total Consideration $ 39,117 |
Summary the purchase price allocation of the assets acquired, and liabilities assumed | (Thousands) Acquired Value Cash and cash equivalents $ 797 Accounts receivable 881 Inventory 2,306 Property, plant and equipment 8,387 Goodwill 17,275 Intangible assets 11,718 Accounts payable and accrued liabilities (2,247) Total $ 39,117 |
Summary components of identified intangible assets | Estimated Fair Estimated Useful (Thousands) Market Value Life Customer relationships $ 11,148 10 years Favorable lease asset 570 2.5 years Total $ 11,718 |
Summary of proforma results | Year Ended Year Ended (Thousands) December 31, 2022 December 31, 2021 Revenue $ 884,228 716,849 Net loss attributable to common shareholders (84,651) (44,353) |
Inventories (Tables)
Inventories (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Inventories | |
Schedule of inventories | (Thousands) December 31, 2023 December 31, 2022 Raw materials $ 78,882 $ 66,925 Finished goods 26,857 21,232 Green coffee 44,182 57,679 Total inventories $ 149,921 $ 145,836 |
Property, Plant and Equipment_2
Property, Plant and Equipment, Net (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Property, Plant and Equipment, Net | |
Schedule of Property, Plant and Equipment, Net | (Thousands) Depreciable Lives December 31, 2023 December 31, 2022 Land $ 8,778 $ 9,052 Buildings (4) 10-40 years 35,911 35,499 Leasehold improvements (1) 9,800 1,651 Plant equipment (4) 3-15 years 128,639 107,215 Vehicles and transportation equipment 3-5 years 648 700 IT systems 3-7 years 8,909 3,053 Furniture and fixtures (4) 3-10 years 3,294 3,068 Customer beverage equipment (2) 3-5 years 22,931 21,930 Lease right-of-use assets (3) 81 36 Construction in progress and equipment deposits (4) 208,308 70,004 427,299 252,208 Less: accumulated depreciation (83,261) (67,002) Property, plant and equipment, net $ 344,038 $ 185,206 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. 4 – We identified a $10.1 million classification error in the disclosure of buildings, plant equipment, furniture and fixtures, and construction in progress and equipment deposits for the year ended December 31, 2022. Amounts presented above reflect the corrected amounts. |
Leases (Tables)
Leases (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Leases | |
Summary of amount of right-of-use lease assets and lease liabilities | (Thousands) Balance Sheet Location December 31, 2023 December 31, 2022 Right-of-use operating lease assets Operating lease right-of-use assets $ 67,601 $ 11,090 Operating lease liabilities - current Accrued expenses and other current liabilities 4,809 2,832 Operating lease liabilities - noncurrent Operating lease liabilities 63,554 8,424 |
Schedule of components of lease costs | Year Ended December 31, (Thousands) 2023 2022 Operating lease cost $ 4,857 $ 4,422 Short-term lease cost 1,020 40 Total $ 5,877 $ 4,462 We identified a $3.3 million disclosure error in the disclosure of the components of lease costs for the year ended December 31, 2022. The amounts presented above reflect the corrected amounts. The following table presents information about the Company’s weighted average discount rate and remaining lease term as of December 31, 2023 and 2022: December 31, 2023 December 31, 2022 Weighted-average discount rate 7.8% 8.4% Weighted-average remaining lease term 12.9 years 4.6 years Supplemental cash flow information about the Company’s leases as of December 31, 2023 and 2022, respectively, is as follows: Year Ended December 31, (Thousands) 2023 2022 Operating cash flows from operating leases $ 4,317 $ 3,373 |
Schedule of future minimum lease payments under non-cancellable operating leases | (Thousands) 2024 $ 9,708 2025 8,678 2026 8,086 2027 8,149 2028 7,635 Thereafter 69,498 Total future minimum lease payments 111,754 Less: imputed interest (43,391) Present value of minimum lease payments $ 68,363 |
Goodwill (Tables)
Goodwill (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Goodwill | |
Schedule of changes in carrying amount of goodwill | Beverage (Thousands) Solutions Total Balance at December 31, 2021 Goodwill $ 173,936 $ 173,936 Accumulated impairment loss (76,883) (76,883) 97,053 97,053 Changes during the period: Acquisitions 16,946 16,946 Balance at December 31, 2022 Goodwill $ 190,882 $ 190,882 Accumulated impairment loss (76,883) (76,883) 113,999 113,999 Changes during the period: Acquisitions 2,025 2,025 Measurement period and other adjustments 87 87 Balance at December 31, 2023 Goodwill $ 192,994 $ 192,994 Accumulated impairment loss (76,883) (76,883) $ 116,111 $ 116,111 |
Intangible Assets, Net (Tables)
Intangible Assets, Net (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Intangible Assets, Net | |
Schedule of intangible assets | December 31, 2023 Accumulated (Thousands) Cost Amortization Net Customer relationships $ 148,648 $ (26,487) $ 122,161 Favorable lease asset 790 (413) 377 Software 1,079 (672) 407 Intangible assets, net $ 150,517 $ (27,572) $ 122,945 December 31, 2022 Accumulated (Thousands) Cost Amortization Net Customer relationships $ 148,648 $ (18,778) $ 129,870 Favorable lease asset 710 (140) 570 Software 919 (473) 446 Intangible assets, net $ 150,277 $ (19,391) $ 130,886 |
Schedule of estimated amortization expense for intangible assets | (Thousands) 2024 $ 8,096 2025 7,883 2026 7,785 2027 7,785 2028 7,754 Thereafter 83,642 Total $ 122,945 |
Debt (Tables)
Debt (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Debt | |
Summary of long-term debt | (Thousands) December 31, 2023 December 31, 2022 Term loan facility $ 164,063 $ 175,000 Revolving credit facility 65,000 — International trade finance lines 43,694 42,905 International notes payable 6,179 1,750 Other loans 39 25 Total debt 278,975 219,680 Unamortized debt costs (2,378) (2,769) Current maturities of long-term debt (9,811) (11,504) Short-term debt (43,694) (42,905) Long-term debt, net $ 223,092 $ 162,502 |
Schedule of debt payments required in each of the next five years | (Thousands) 2024 $ 9,811 2025 11,501 2026 17,719 2027 196,250 2028 — Thereafter — Total $ 235,281 |
Derivatives (Tables)
Derivatives (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Derivatives | |
Schedule of fair value of derivative assets and liabilities | (Thousands) Balance Sheet Location December 31, 2023 December 31, 2022 Derivative assets designated as cash flow hedging instruments: Coffee futures contracts (1) Derivative assets $ 3,355 $ — Total $ 3,355 $ — Derivative assets not designated as cash flow hedging instruments: Forward purchase and sales contracts Derivative assets $ 10,303 $ 15,053 Total 10,303 15,053 Total derivative assets $ 13,658 $ 15,053 Derivative liabilities designated as cash flow hedging instruments: Coffee futures contracts (1) Derivative liabilities $ — $ 3,334 Total $ — $ 3,334 Derivative liabilities not designated as cash flow hedging instruments: Forward purchase and sales contracts Derivative liabilities $ 3,731 $ 4,258 Total 3,731 4,258 Total derivative liabilities $ 3,731 $ 7,592 1 - The fair value of coffee futures excludes amounts related to margin accounts. |
Schedule of pre-tax net gains and losses for derivative instruments | Year Ended December 31, (Thousands) Statement of Operations Location 2023 2022 2021 Derivative assets designated as cash flow hedging instruments: Net realized gains (losses) on coffee derivatives Costs of sales $ (6,377) $ 13,094 $ 7,197 Derivative assets and liabilities not designated as cash flow hedging instruments: Net unrealized gains (losses) on forward sales and purchase contracts Costs of sales $ (4,064) $ 8,828 $ (4,799) |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Fair Value Measurements | |
Summary of the fair value of financial instruments | December 31, 2023 (Thousands) Level 1 Level 2 Level 3 Total Assets: Green coffee associated with forward contracts $ — $ 33,447 $ — $ 33,447 Coffee futures contracts 3,355 — — 3,355 Forward purchase and sales contracts — 10,303 — 10,303 Total $ 3,355 $ 43,750 $ — $ 47,105 Liabilities: Forward purchase and sales contracts — 3,731 — 3,731 Westrock Public Warrants 39,371 — — 39,371 Westrock Private Warrants — — 5,430 5,430 Total $ 39,371 $ 3,731 $ 5,430 $ 48,532 December 31, 2022 (Thousands) Level 1 Level 2 Level 3 Total Assets: Green coffee associated with forward contracts $ — $ 39,928 $ — $ 39,928 Forward purchase and sales contracts — 15,053 — 15,053 Total $ — $ 54,981 $ — $ 54,981 Liabilities: Coffee futures contracts $ 3,334 $ — $ — $ 3,334 Forward purchase and sales contracts — 4,258 — 4,258 Westrock Public Warrants 27,179 — — 27,179 Westrock Private Warrants — — 28,342 28,342 Total $ 30,513 $ 4,258 $ 28,342 $ 63,113 |
Schedule of change in fair value | Westrock (Thousands) Private Warrants Fair value as of December 31, 2022 $ 28,342 Transfer out of level 3 (18,916) Change in fair value (3,996) Fair value as of December 31, 2023 $ 5,430 Westrock (Thousands) Private Warrants Fair value as of December 31, 2021 $ — Assumption of warrants 11,618 Change in fair value 16,724 Fair value as of December 31, 2022 $ 28,342 |
Schedule of unobservable inputs | December 31, 2023 December 31, 2022 Stock price $ 10.21 $ 13.36 Exercise price 11.50 11.50 Expected term (years) 5.00 5.00 Expected volatility 33.80% 7.74% Risk-free rate of return 3.91% 3.99% Dividend yield 0.00% 0.00% |
Equity-Based Compensation (Tabl
Equity-Based Compensation (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Equity-Based Compensation | |
Schedule of unit option activity | Weighted-Average Weighted-Average Remaining Options Exercise Price Contractual Term Options outstanding at December 31, 2022 3,217,349 $ 9.54 7.8 years Options granted — $ — Options forfeited (323,148) $ 9.54 Options exercised (88,525) $ 9.54 Outstanding at December 31, 2023 2,805,676 $ 9.54 6.8 years Exercisable at December 31, 2023 841,705 $ 9.54 6.7 years |
Schedule of restricted unit option activity | Weighted-Average Fair Value at Units Grant Date Outstanding at December 31, 2022 1,127,000 $ 11.49 Granted 1,370,564 11.53 Forfeited (91,077) 11.63 Vested (416,705) 11.49 Outstanding at December 31, 2023 1,989,782 $ 11.51 |
Accumulated Other Comprehensi_2
Accumulated Other Comprehensive Income (Loss) (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Accumulated Other Comprehensive Income (Loss) | |
Schedule of changes in accumulated other comprehensive (loss) income, net of tax | Year Ended December 31, (Thousands) 2023 2022 2021 Cash flow hedge changes in fair value gain (loss): Balance at beginning of period $ (6,355) $ 11,759 $ 3,581 Other comprehensive income (loss) before reclassifications 6,570 (10,978) 18,010 Amounts reclassified from accumulated comprehensive income 6,377 (13,094) (7,197) Tax effect (3,230) 5,958 (2,635) Net accumulated other comprehensive income 3,362 (6,355) 11,759 Less: Other comprehensive income attributable to non-controlling interests — — — Balance at end of period 3,362 (6,355) 11,759 Foreign currency translation gain Balance at beginning of period 252 259 239 Other comprehensive income (loss) before reclassifications 204 (7) 20 Amounts reclassified from accumulated comprehensive income — — — Tax effect — — — Net accumulated other comprehensive income 456 252 259 Less: Other comprehensive income attributable to non-controlling interests — — — Balance at end of period 456 252 259 Accumulated other comprehensive income (loss) at end of period $ 3,818 $ (6,103) $ 12,018 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Income Taxes | |
Schedule of U.S. and international components of income (loss) before income taxes | Year Ended December 31, (Thousands) 2023 2022 2021 U.S. (34,695) (51,607) (28,573) International (6,130) (3,743) 3,897 Loss before income taxes $ (40,825) $ (55,350) $ (24,676) |
Schedule of income tax expense (benefit) component | Year Ended December 31, (Thousands) 2023 2022 2021 Current expense (benefit) Federal $ — $ — $ — State 266 529 179 Foreign (112) 1,619 (99) Total current 154 2,148 80 Deferred expense (benefit) Federal (7,365) 173 (4,617) State 236 81 (901) Foreign 617 (2,291) 2,070 Total deferred (6,512) (2,037) (3,448) Income tax expense (benefit) $ (6,358) $ 111 $ (3,368) |
Schedule of reconciliation of income tax expense benefit | Year Ended December 31, (Thousands) 2023 2022 2021 Income tax expense (benefit) at U.S. statutory income tax rate $ (8,573) $ (11,624) $ (5,182) State income tax expense (benefit), net of federal benefit (862) (1,507) (773) Foreign rate differential (260) (15) (304) Change in fair value of warrants (2,144) 6,232 — Global intangible low-taxed income ("GILTI") inclusion — — 1,095 Transaction costs — — 260 Stock compensation (windfall)/shortfall (838) (195) 57 Corporate interest restriction 677 291 — Excess compensation (§162(m)) 717 182 — Other permanent differences 161 146 78 Change in valuation allowance 4,414 7,319 632 Provision to return adjustments — (320) (166) Effect of change in foreign tax rates — (552) 1,181 Other 350 154 (246) Income tax expense (benefit) $ (6,358) $ 111 $ (3,368) Effective tax rate 15.6% (0.2)% 13.6% |
Schedule of deferred income tax assets and liabilities | (Thousands) December 31, 2023 December 31, 2022 Deferred tax assets Liabilities and reserves $ 2,158 $ 2,300 Interest limitation 18,217 16,256 Net operating losses 21,804 13,483 Transaction expenses 186 206 Inventories 1,146 1,449 Stock compensation 1,205 794 Derivatives — 552 Operating lease liabilities 16,223 2,430 Other 2,131 269 Total 63,070 37,739 Valuation allowance (12,878) (8,464) Total deferred tax assets, net $ 50,192 $ 29,275 Deferred tax liabilities Property, plant and equipment $ (15,649) $ (13,334) Intangible assets (26,392) (27,358) Derivatives (2,214) — Right-of-use assets (16,041) (2,403) Other (743) (535) Total (61,039) (43,630) Net deferred tax liability $ (10,847) $ (14,355) |
Summary of valuation allowance | (Thousands) December 31, 2023 December 31, 2022 December 31, 2021 Beginning balance $ 8,464 $ 1,145 $ 513 Additions 4,414 7,319 632 Ending Balance $ 12,878 $ 8,464 $ 1,145 |
Schedule reconciliation of unrecognized tax benefits | (Thousands) December 31, 2023 December 31, 2022 December 31, 2021 Beginning balance $ 96 $ 96 $ 96 Additions for tax positions in prior period 2,473 — — Additions for tax positions in current period 1,421 — — Ending Balance $ 3,990 $ 96 $ 96 |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Earnings Per Share | |
Schedule of potentially dilutive securities that were excluded from the computation of dilutive shares | Year Ended December 31, (Thousands) 2023 2022 2021 Warrants 19,149 19,373 — Restricted stock 1,917 1,602 950 Options 1,445 3,217 3,200 If-converted securities 23,551 23,588 25,092 |
Schedule of basic and diluted earning per share | Year Ended December 31, (Thousands, except per share data) 2023 2022 2021 Basic Earnings per Common Share Numerator: Net income (loss) attributable to common shareholders $ (34,743) $ (77,633) $ (46,155) Denominator: Weighted-average common shares outstanding - basic 80,684 48,444 34,472 Basic earnings (loss) per common share $ (0.43) $ (1.60) $ (1.34) Diluted Earnings per Common Share Numerator: Net income (loss) attributable to common shareholders - basic $ (34,743) $ (77,633) $ (46,155) Effect of participating securities — — — Effect of non-participating securities — — — Net income (loss) attributable to common shareholders - diluted $ (34,743) $ (77,633) $ (46,155) Denominator: Weighted-average common shares outstanding - basic 80,684 48,444 34,472 Effect of dilutive participating securities — — — Effect of dilutive non-participating securities — — — Weighted-average common shares outstanding - diluted 80,684 48,444 34,472 Dilutive loss per common share $ (0.43) $ (1.60) $ (1.34) |
Segment Information (Tables)
Segment Information (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Segment Information | |
Summary of selected financial data related to our segments | Year Ended December 31, 2023 Sustainable Total of Beverage Sourcing & Intersegment Reportable (Thousands) Solutions Traceability Revenues Segments Net sales $ 722,865 $ 146,911 $ (5,062) $ 864,714 Adjusted EBITDA 41,624 3,457 n/a 45,081 Less: Interest expense 29,157 Income tax expense (benefit) (6,358) Depreciation and amortization 26,584 Transaction, restructuring and integration expense 14,557 Change in fair value of warrants (10,207) Management and consulting fees (S&D acquisition) 556 Equity-based compensation 8,708 Conway extract and ready-to-drink facility start-up costs 11,698 Mark-to-market adjustments (104) Loss (gain) on disposal of property, plant and equipment 1,153 Other 3,904 Net loss $ (34,567) Capital expenditures $ 164,474 $ 137 n/a $ 164,611 Total assets 891,170 80,344 n/a 971,514 Year Ended December 31, 2022 Sustainable Total of Beverage Sourcing & Intersegment Reportable (Thousands) Solutions Traceability Revenues Segments Net sales $ 685,303 $ 207,579 $ (25,010) $ 867,872 Adjusted EBITDA 53,951 6,102 n/a 60,053 Less: Interest expense 35,497 Income tax expense (benefit) 111 Depreciation and amortization 24,210 Transaction, restructuring and integration expense 13,169 Change in fair value of warrants 29,675 Management and consulting fees (S&D acquisition) 3,868 Equity-based compensation 2,631 Mark-to-market adjustments 3,502 Loss (gain) on disposal of property, plant and equipment 935 Other 1,916 Net loss $ (55,461) Capital expenditures $ 63,158 $ 103 n/a $ 63,261 Total assets 658,814 87,399 n/a 746,213 Year Ended December 31, 2021 Sustainable Total of Beverage Sourcing & Intersegment Reportable (Thousands) Solutions Traceability Revenues Segments Net sales $ 551,013 $ 170,035 $ (22,904) $ 698,144 Adjusted EBITDA 41,468 5,706 n/a 47,174 Less: Interest expense 32,549 Income tax expense (benefit) (3,368) Depreciation and amortization 25,501 Transaction, restructuring and integration expense 8,835 Management and consulting fees (S&D acquisition) 6,382 Equity-based compensation 1,223 Mark-to-market adjustments (3,585) Loss (gain) on disposal of property, plant and equipment 243 Other 702 Net loss $ (21,308) Capital expenditures $ 24,501 $ 614 n/a $ 25,115 Total assets 510,751 82,269 n/a 593,020 |
Related Party Transactions (Tab
Related Party Transactions (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Related Party Transactions | |
Schedule of transactions with related parties | The Consolidated Financial Statements reflect the following transactions with related parties: Year Ended December 31, (Thousands) 2023 2022 2021 Interest expense: Brown Brothers Harriman $ — $ 541 $ 1,393 Wooster Capital — 503 599 Jo Ellen Ford — 139 214 Westrock Finance, LLC — — 423 Total $ — $ 1,183 $ 2,629 |
Organization and Description _2
Organization and Description of Business (Details) $ / shares in Units, $ in Thousands | 12 Months Ended | ||||
Aug. 07, 2023 USD ($) | Jul. 24, 2023 $ / shares shares | Jun. 29, 2023 USD ($) $ / shares shares | Dec. 31, 2023 USD ($) facility segment $ / shares | Dec. 31, 2022 $ / shares | |
Organization and Description of Business | |||||
Number of operating segments | segment | 2 | ||||
Common stock, Par Value (in dollars per share) | $ / shares | $ 0.01 | $ 0.01 | |||
Aggregate gross proceeds | $ | $ 118,767 | ||||
Concord, North Carolina | |||||
Organization and Description of Business | |||||
Number of manufacturing facilities | facility | 3 | ||||
North Little Rock, Arkansas | |||||
Organization and Description of Business | |||||
Number of manufacturing facilities | facility | 1 | ||||
Richmond, California | |||||
Organization and Description of Business | |||||
Number of manufacturing facilities | facility | 1 | ||||
Kigali, Rwanda | |||||
Organization and Description of Business | |||||
Number of manufacturing facilities | facility | 1 | ||||
Johor Bahru, Malaysia | |||||
Organization and Description of Business | |||||
Number of manufacturing facilities | facility | 1 | ||||
Subscription agreement | |||||
Organization and Description of Business | |||||
Number of shares agreed to issue | shares | 5,000,000 | ||||
Common stock, Par Value (in dollars per share) | $ / shares | $ 0.01 | ||||
Purchase price (in dollars per share) | $ / shares | $ 10 | ||||
Aggregate gross proceeds | $ | $ 50,000 | ||||
Definitive agreements | |||||
Organization and Description of Business | |||||
Number of shares agreed to issue | shares | 5,000,000 | ||||
Purchase price (in dollars per share) | $ / shares | $ 10 | ||||
Aggregate gross proceeds | $ | $ 50,000 | ||||
Investor rights agreement | |||||
Organization and Description of Business | |||||
Number of shares agreed to issue | shares | 1,900,000 | ||||
Purchase price (in dollars per share) | $ / shares | $ 10 | ||||
Aggregate gross proceeds | $ | $ 18,800 |
Basis of Presentation and Con_2
Basis of Presentation and Consolidation (Details) - USD ($) $ / shares in Units, $ in Millions | Apr. 03, 2023 | Aug. 26, 2022 |
Investment in Falcon | ||
Class of Stock [Line Items] | ||
Percentage of ownership | 15% | |
Aggregate consideration paid in cash | $ 3.2 | |
Cash paid | $ 2 | |
Aggregate consideration paid in shares | 100,000 | |
Riverview | ||
Class of Stock [Line Items] | ||
Number of shares issued for each unit | 1 | |
Common stock par value ( in dollars per share) | $ 0.01 | |
Riverview | Common Stock | ||
Class of Stock [Line Items] | ||
Number of shares issued for each unit | 0.1049203474320 | |
Common stock par value ( in dollars per share) | $ 0.01 | |
Series A Redeemable Common Equivalent Preferred Units | Riverview | ||
Class of Stock [Line Items] | ||
Number of shares issued for each unit | 0.1086138208640 | |
Series B Redeemable Common Equivalent Preferred Units | Riverview | ||
Class of Stock [Line Items] | ||
Number of shares issued for each unit | 0.1049203474320 | |
Series A Redeemable Common Equivalent Preferred Shares | Riverview | ||
Class of Stock [Line Items] | ||
Number of shares issued for each unit | 0.1086138208740 | |
Series B Redeemable Common Equivalent Preferred Shares | Riverview | ||
Class of Stock [Line Items] | ||
Number of shares issued for each unit | 0.0919280171940 |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies - Cash and cash equivalents and restricted cash (Details) - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 |
Summary of Significant Accounting Policies | ||||
Cash and cash equivalents | $ 37,196 | $ 16,838 | ||
Restricted cash | 644 | 9,567 | ||
Total | $ 37,840 | $ 26,405 | $ 22,870 | $ 18,652 |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies - Allowance for credit losses (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Allowance for credit loss roll forward | |||
Balance at beginning of period | $ 3,023 | $ 3,749 | |
Charged to selling, general and administrative expense | 979 | 1,790 | $ 439 |
Write-offs | (1,087) | (2,516) | |
Total | $ 2,915 | $ 3,023 | $ 3,749 |
Minimum | |||
Accounts Receivable and Allowance for Credit Losses | |||
Accounts receivable generally outstanding duration | 30 days | ||
Maximum | |||
Accounts Receivable and Allowance for Credit Losses | |||
Accounts receivable generally outstanding duration | 60 days |
Summary of Significant Accoun_6
Summary of Significant Accounting Policies - Obligations Outstanding (Details) $ in Thousands | 12 Months Ended |
Dec. 31, 2023 USD ($) | |
Summary of Significant Accounting Policies | |
Confirmed obligations outstanding at the beginning of the year | $ 0 |
Invoices confirmed during the year | 110,217 |
Confirmed invoices paid during the year | (32,141) |
Confirmed obligations outstanding at the end of the year | $ 78,076 |
Summary of Significant Accoun_7
Summary of Significant Accounting Policies - Additional information (Details) | 12 Months Ended | ||||
Jan. 01, 2022 USD ($) | Dec. 31, 2023 USD ($) item | Dec. 31, 2022 USD ($) | Dec. 31, 2021 USD ($) | Aug. 26, 2022 USD ($) | |
Summary of Significant Accounting Policies | |||||
Net loss | $ (34,567,000) | $ (55,461,000) | $ (21,308,000) | ||
Net cash provided by (used in) operating activities | (64,064,000) | (56,628,000) | 2,877,000 | ||
Unrealized gain (loss) on derivative instruments | 9,717,000 | (18,114,000) | 8,178,000 | ||
Capitalized interest costs | $ 3,200,000 | 0 | |||
Credit period under the supplier finance program | 180 days | ||||
Accumulated amortization of goodwill | $ 76,883,000 | 76,883,000 | 76,883,000 | ||
Number of approved suppliers | item | 1 | ||||
Contractual Obligation | $ 78,076,000 | 0 | |||
Goodwill impairment charges | 0 | ||||
Impairment losses on property, plant and equipment | 0 | 0 | 0 | ||
Intangible assets, net | 122,945,000 | 130,886,000 | $ 0 | ||
Goodwill | 116,111,000 | 113,999,000 | 97,053,000 | $ 0 | |
Decrease in accumulated deficit | (362,624,000) | (328,042,000) | |||
Loss before income taxes | (40,825,000) | (55,350,000) | (24,676,000) | ||
Practical expedients election | true | ||||
Right-of-use operating lease assets | 67,601,000 | 11,090,000 | |||
Lease liabilities recognized | 68,363,000 | ||||
Impairment losses on intangible assets | 0 | 0 | 0 | ||
Gains/Losses related to changes in fair value of warrant liabilities | (10,207,000) | 29,675,000 | |||
Equity method investment | 400,000 | ||||
Equity method investment at cost | 1,000,000 | ||||
Advertising expenses | 1,900,000 | 3,600,000 | 2,900,000 | ||
Green coffee associated with forward contracts | |||||
Summary of Significant Accounting Policies | |||||
Unrealized gain (loss) on derivative instruments | 4,200,000 | (12,300,000) | 8,400,000 | ||
Selling, general and administrative expenses | |||||
Summary of Significant Accounting Policies | |||||
Shipping and handling costs | $ 17,800,000 | $ 22,100,000 | $ 19,900,000 | ||
ASU 2016-02 | Adjustment | |||||
Summary of Significant Accounting Policies | |||||
Right-of-use operating lease assets | $ 13,000,000 | ||||
Lease liabilities recognized | $ 13,000,000 |
De-SPAC Merger Transaction - Ot
De-SPAC Merger Transaction - Other Information (Details) | 2 Months Ended | 12 Months Ended | ||||
Aug. 26, 2022 USD ($) $ / shares shares | Aug. 25, 2022 class $ / shares | Aug. 26, 2022 USD ($) $ / shares shares | Dec. 31, 2023 USD ($) class $ / shares shares | Dec. 31, 2022 USD ($) shares | Dec. 31, 2021 USD ($) | |
De-SPAC Merger Transaction | ||||||
Number of classes of equity | class | 2 | |||||
Preferred dividends paid | $ 4,400,000 | $ 4,380,000 | ||||
Goodwill | $ 0 | 0 | $ 116,111,000 | 113,999,000 | $ 97,053,000 | |
Intangible assets | 0 | 0 | $ 122,945,000 | 130,886,000 | ||
Transaction cost incurred capitalized | 24,000,000 | $ 24,000,000 | ||||
Transaction costs related to the issuance of shares | 24,000,000 | |||||
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 stock options exercised (in shares) | shares | 88,000 | 39,000 | ||||
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 | shares | 12,868,151 | |||||
Number of classes of equity | class | 2 | |||||
Number of shares issued for each unit | shares | 1 | 1 | ||||
Common stock par value ( in dollars per share) | $ / shares | $ 0.01 | $ 0.01 | ||||
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 | shares | 34,855,535 | |||||
Number of shares issued for each unit | shares | 0.1049203474320 | 0.1049203474320 | ||||
Common stock par value ( in dollars per share) | $ / shares | $ 0.01 | $ 0.01 | ||||
Issuance of common shares related to stock options exercised (in shares) | shares | 2,220,305 | |||||
Riverview | Common Stock PIPE Commitments | ||||||
De-SPAC Merger Transaction | ||||||
Number of shares issued | shares | 1,910,000 | |||||
Series A Redeemable Common Equivalent Preferred Units | Riverview | ||||||
De-SPAC Merger Transaction | ||||||
Number of shares issued for each unit | shares | 0.1086138208640 | 0.1086138208640 | ||||
Series B Redeemable Common Equivalent Preferred Units | Riverview | ||||||
De-SPAC Merger Transaction | ||||||
Number of shares issued for each unit | shares | 0.1049203474320 | 0.1049203474320 | ||||
Series Convertible Preferred Shares | ||||||
De-SPAC Merger Transaction | ||||||
Liquidation preference per share | $ / shares | $ 11.50 | |||||
CEP Units | Riverview | ||||||
De-SPAC Merger Transaction | ||||||
Temporary Equity, Liquidation Preference | $ 13,900,000 | $ 24,200,000 | ||||
Liquidation preference per share | $ / shares | $ 1 | |||||
Percent of increase in liquidation preference per share | 10% | |||||
Series A Redeemable Common Equivalent Preferred Shares | ||||||
De-SPAC Merger Transaction | ||||||
Temporary Equity, Liquidation Preference | $ 11.50 | $ 11.50 | ||||
Series A Redeemable Common Equivalent Preferred Shares | Riverview | ||||||
De-SPAC Merger Transaction | ||||||
Number of shares issued for each unit | shares | 0.1086138208740 | 0.1086138208740 | ||||
Number of new stock classified as temporary equity issued | shares | 23,587,952 | |||||
Series B Redeemable Common Equivalent Preferred Shares | Riverview | ||||||
De-SPAC Merger Transaction | ||||||
Number of shares issued for each unit | shares | 0.0919280171940 | 0.0919280171940 | ||||
Class A share | Riverview | ||||||
De-SPAC Merger Transaction | ||||||
Number of shares issued for each unit | shares | 1 | 1 | ||||
New Company | Riverview | Common Stock PIPE Commitments | ||||||
De-SPAC Merger Transaction | ||||||
Number of shares issued | shares | 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) | Aug. 26, 2022 D $ / shares shares | Dec. 31, 2023 shares |
Common Stock Warrants | ||
Warrant to purchase each share | 1 | |
Warrant exercise price (in dollars per share) | $ / shares | $ 11.50 | |
Westrock Public Warrants | ||
Common Stock Warrants | ||
Warrants | 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 | |
Westrock Public Warrants | Minimum | ||
Common Stock Warrants | ||
Term of redemption notice to share holders | 30 days | |
Westrock Public Warrants | Riverview | ||
Common Stock Warrants | ||
Warrants | 5,373,954 | |
Westrock Private Warrants | ||
Common Stock Warrants | ||
Warrants | 7,400,000 | |
Westrock Private Warrants | Riverview | ||
Common Stock Warrants | ||
Warrant to purchase each share | 2,026,046 |
Revenue - Revenue from Forward
Revenue - Revenue from Forward Contracts (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Derivatives | |||
Purchase obligations | $ 238,700 | ||
Net unrealized gains (losses) | 9,717 | $ (18,114) | $ 8,178 |
Sustainable, Sourcing and Traceability | |||
Derivatives | |||
Purchase obligations | 8,300 | 14,600 | |
Forward sales contracts | |||
Derivatives | |||
Net unrealized gains (losses) | (4,100) | 8,800 | (4,800) |
Revenue | $ 141,000 | $ 181,700 | $ 145,600 |
Revenue - Contract Estimates (D
Revenue - Contract Estimates (Details) - USD ($) $ in Millions | Dec. 31, 2023 | Dec. 31, 2022 |
Revenue | ||
Accrued sales incentives | $ 1.5 | $ 1.3 |
Other accrued deductions | $ 2.7 | $ 1.4 |
Revenue - Contract Balances (De
Revenue - Contract Balances (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Revenue | |||
Capitalized contract costs | $ 0 | $ 0 | |
Amortization of deferred contract costs | 2,400 | 1,200 | $ 300 |
Prepaid expenses and other current assets | |||
Revenue | |||
Contract assets | 300 | 400 | |
Accounts receivable | |||
Revenue | |||
Receivables from contracts with customers | $ 104,800 | $ 104,700 |
Revenue - Concentration of Cust
Revenue - Concentration of Customers (Details) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 USD ($) customer | Dec. 31, 2022 USD ($) item | Dec. 31, 2021 USD ($) item | |
Concentration Risk | |||
Revenues | $ 864,714 | $ 867,872 | $ 698,144 |
Revenue from Contract with Customer, net | Customer Concentration | Beverage Solutions. | |||
Concentration Risk | |||
Number of major customers | item | 0 | 0 | |
Revenue from Contract with Customer, net | Customer Number One | Customer Concentration | Beverage Solutions. | |||
Concentration Risk | |||
Number of major customers | customer | 1 | ||
Concentration risk percentage | 10.40% | ||
Revenues | $ 90,000 |
Revenue - Disaggregated Revenue
Revenue - Disaggregated Revenue (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Revenue | |||
Revenues | $ 864,714 | $ 867,872 | $ 698,144 |
United States | |||
Revenue | |||
Revenues | 744,067 | 719,437 | 583,011 |
All other countries | |||
Revenue | |||
Revenues | 120,647 | 148,435 | 115,133 |
Product | |||
Revenue | |||
Revenues | 864,714 | 867,872 | 698,144 |
Coffee & tea | |||
Revenue | |||
Revenues | 559,040 | 569,464 | 445,466 |
Flavors, extracts & ingredients | |||
Revenue | |||
Revenues | 162,043 | 112,155 | 98,850 |
Other | |||
Revenue | |||
Revenues | 1,782 | 3,684 | 6,697 |
Green coffee | |||
Revenue | |||
Revenues | $ 141,849 | $ 182,569 | $ 147,131 |
Acquisitions - Other (Details)
Acquisitions - Other (Details) - USD ($) $ in Thousands | 2 Months Ended | ||||||
Feb. 28, 2023 | Nov. 14, 2022 | Dec. 31, 2022 | Dec. 31, 2023 | Jun. 30, 2023 | Aug. 26, 2022 | Dec. 31, 2021 | |
Business Acquisition | |||||||
Revenue of acquiree | $ 1,500 | ||||||
Operating loss of acquiree | (500) | ||||||
Goodwill | $ 113,999 | $ 116,111 | $ 0 | $ 97,053 | |||
Bixby Roasting Co. | |||||||
Business Acquisition | |||||||
Shares of common stock issued by Company | 39,778 | ||||||
Net assets acquired | $ 700 | ||||||
Cash consideration | 2,600 | ||||||
Cash consideration | $ 2,200 | ||||||
Goodwill | $ 2,000 | ||||||
Kohana Coffee, LLC | |||||||
Business Acquisition | |||||||
Business acquisition ownership, percentage | 100% | ||||||
Shares of common stock issued by Company | 1,852,608 | ||||||
Cash consideration | $ 39,117 | ||||||
Cash consideration | 15,682 | ||||||
Goodwill | $ 17,275 |
Acquisitions - Total considerat
Acquisitions - Total consideration (Details) - Kohana Coffee, LLC $ in Thousands | Nov. 14, 2022 USD ($) |
Business Acquisition | |
Cash consideration | $ 15,682 |
Fair Value of stock consideration | 23,435 |
Total Consideration | $ 39,117 |
Acquisitions - Purchase price a
Acquisitions - Purchase price allocation of the assets acquired, and liabilities assumed (Details) - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 | Nov. 14, 2022 | Aug. 26, 2022 | Dec. 31, 2021 |
Business Acquisition | |||||
Goodwill | $ 116,111 | $ 113,999 | $ 0 | $ 97,053 | |
Kohana Coffee, LLC | |||||
Business Acquisition | |||||
Cash and cash equivalents | $ 797 | ||||
Accounts receivable | 881 | ||||
Inventory | 2,306 | ||||
Property, plant and equipment | 8,387 | ||||
Goodwill | 17,275 | ||||
Intangible assets | 11,718 | ||||
Accounts payable and accrued liabilities | (2,247) | ||||
Total | $ 39,117 |
Acquisitions - Identifiable int
Acquisitions - Identifiable intangible assets (Details) - Kohana Coffee, LLC $ in Thousands | Nov. 14, 2022 USD ($) |
Business Acquisition | |
Intangible assets | $ 11,718 |
Customer relationships | |
Business Acquisition | |
Intangible assets | $ 11,148 |
Estimated Useful Life | 10 years |
Favorable lease asset | |
Business Acquisition | |
Intangible assets | $ 570 |
Estimated Useful Life | 2 years 6 months |
Acquisitions - Proforma Informa
Acquisitions - Proforma Information (Details) - Kohana Coffee, LLC - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Business Acquisition | ||
Revenue | $ 884,228 | $ 716,849 |
Net loss attributable to common shareholders | $ (84,651) | $ (44,353) |
Inventories (Details)
Inventories (Details) - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Inventories | ||
Raw materials | $ 78,882 | $ 66,925 |
Finished goods | 26,857 | 21,232 |
Green coffee | 44,182 | 57,679 |
Total inventories | $ 149,921 | $ 145,836 |
Property, Plant and Equipment_3
Property, Plant and Equipment, Net (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Property, Plant and Equipment, Net | |||
Property, plant and equipment, gross | $ 427,299 | $ 252,208 | |
Less: accumulated depreciation | (83,261) | (67,002) | |
Property, plant and equipment, net | 344,038 | 185,206 | |
Depreciation expense | 18,400 | 17,400 | $ 18,800 |
Property, plant and equipment reclassification for error | 10,100 | ||
Land | |||
Property, Plant and Equipment, Net | |||
Property, plant and equipment, gross | 8,778 | 9,052 | |
Building | |||
Property, Plant and Equipment, Net | |||
Property, plant and equipment, gross | 35,911 | 35,499 | |
Leasehold improvements | |||
Property, Plant and Equipment, Net | |||
Property, plant and equipment, gross | 9,800 | 1,651 | |
Plant equipment | |||
Property, Plant and Equipment, Net | |||
Property, plant and equipment, gross | 128,639 | 107,215 | |
Vehicles and transportation equipment | |||
Property, Plant and Equipment, Net | |||
Property, plant and equipment, gross | 648 | 700 | |
IT systems | |||
Property, Plant and Equipment, Net | |||
Property, plant and equipment, gross | 8,909 | 3,053 | |
Furniture and fixtures | |||
Property, Plant and Equipment, Net | |||
Property, plant and equipment, gross | 3,294 | 3,068 | |
Customer beverage equipment | |||
Property, Plant and Equipment, Net | |||
Property, plant and equipment, gross | 22,931 | 21,930 | |
Lease right-of-use assets | |||
Property, Plant and Equipment, Net | |||
Property, plant and equipment, gross | 81 | 36 | |
Construction in progress and equipment deposits | |||
Property, Plant and Equipment, Net | |||
Property, plant and equipment, gross | $ 208,308 | $ 70,004 | |
Minimum | Building | |||
Property, Plant and Equipment, Net | |||
Useful life | 10 years | ||
Minimum | Plant equipment | |||
Property, Plant and Equipment, Net | |||
Useful life | 3 years | ||
Minimum | Vehicles and transportation equipment | |||
Property, Plant and Equipment, Net | |||
Useful life | 3 years | ||
Minimum | IT systems | |||
Property, Plant and Equipment, Net | |||
Useful life | 3 years | ||
Minimum | Furniture and fixtures | |||
Property, Plant and Equipment, Net | |||
Useful life | 3 years | ||
Minimum | Customer beverage equipment | |||
Property, Plant and Equipment, Net | |||
Useful life | 3 years | ||
Maximum | Building | |||
Property, Plant and Equipment, Net | |||
Useful life | 40 years | ||
Maximum | Plant equipment | |||
Property, Plant and Equipment, Net | |||
Useful life | 15 years | ||
Maximum | Vehicles and transportation equipment | |||
Property, Plant and Equipment, Net | |||
Useful life | 5 years | ||
Maximum | IT systems | |||
Property, Plant and Equipment, Net | |||
Useful life | 7 years | ||
Maximum | Furniture and fixtures | |||
Property, Plant and Equipment, Net | |||
Useful life | 10 years | ||
Maximum | Customer beverage equipment | |||
Property, Plant and Equipment, Net | |||
Useful life | 5 years |
Leases - Other (Details)
Leases - Other (Details) | 12 Months Ended |
Dec. 31, 2023 | |
Leases | |
Option to extend | true |
Option to terminate | true |
Termination term (in years) | 1 year |
Minimum | |
Leases | |
Remaining non-cancelable lease term (in years) | 1 year |
Maximum | |
Leases | |
Remaining non-cancelable lease term (in years) | 15 years |
Leases - Schedule of amount of
Leases - Schedule of amount of right-of-use lease assets and lease liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Right-of-use lease assets and lease liabilities | ||
Right-of-use operating lease assets | $ 67,601 | $ 11,090 |
Operating lease liabilities - current | $ 4,809 | $ 2,832 |
Operating lease liabilities - current, Balance sheet location | Accrued expenses and other current liabilities | Accrued expenses and other current liabilities |
Operating lease liabilities - noncurrent | $ 63,554 | $ 8,424 |
Leases - Schedule of components
Leases - Schedule of components of lease costs (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Lease Cost | ||
Operating lease cost | $ 4,857 | $ 4,422 |
Short-term lease cost | 1,020 | 40 |
Total | $ 5,877 | $ 4,462 |
Leases - Error Corrections (Det
Leases - Error Corrections (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Error Corrections and Prior Period Adjustments Restatement | ||
Operating lease cost | $ 4,857 | $ 4,422 |
Operating cash flows from operating leases | $ 4,317 | 3,373 |
Correction Other | Revision of Prior Period, Error Correction, Adjustment | ||
Error Corrections and Prior Period Adjustments Restatement | ||
Operating lease cost | 3,300 | |
Operating cash flows from operating leases | $ 2,500 |
Leases - Schedule of weighted a
Leases - Schedule of weighted average discount rate and remaining lease term (Details) | Dec. 31, 2023 | Dec. 31, 2022 |
Leases | ||
Weighted-average discount rate | 7.80% | 8.40% |
Weighted-average remaining lease term | 12 years 10 months 24 days | 4 years 7 months 6 days |
Leases - Schedule of supplement
Leases - Schedule of supplemental cashflow information (Details) $ in Thousands | 12 Months Ended | |
Dec. 31, 2023 USD ($) lease | Dec. 31, 2022 USD ($) | |
Leases | ||
Operating cash flows from operating leases | $ 4,317 | $ 3,373 |
Right-of-use operating lease assets in exchange for lease obligations | $ 60,200 | |
Number of material finance lease | lease | 0 |
Leases - Schedule of future min
Leases - Schedule of future minimum lease payments under non-cancellable operating leases (Details) $ in Thousands | Dec. 31, 2023 USD ($) |
Leases | |
2024 | $ 9,708 |
2025 | 8,678 |
2026 | 8,086 |
2027 | 8,149 |
2028 | 7,635 |
Thereafter | 69,498 |
Total future minimum lease payments | 111,754 |
Less: imputed interest | (43,391) |
Present value of minimum lease payments | $ 68,363 |
Goodwill (Details)
Goodwill (Details) - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2023 | Dec. 31, 2022 | Aug. 26, 2022 | Dec. 31, 2021 | |
Changes in goodwill | ||||
Goodwill, Beginning balance | $ 113,999 | $ 97,053 | ||
Acquisitions | 2,025 | 16,946 | ||
Measurement period adjustments | 87 | |||
Goodwill, Ending balance | 116,111 | 113,999 | ||
Goodwill, Impaired and Accumulated Impairment Loss | ||||
Gross goodwill | 192,994 | 190,882 | $ 173,936 | |
Accumulated impairment loss | (76,883) | (76,883) | (76,883) | |
Goodwill | 116,111 | 113,999 | $ 0 | 97,053 |
Beverage Solutions | ||||
Changes in goodwill | ||||
Goodwill, Beginning balance | 113,999 | 97,053 | ||
Acquisitions | 2,025 | 16,946 | ||
Measurement period adjustments | 87 | |||
Goodwill, Ending balance | 116,111 | 113,999 | ||
Goodwill, Impaired and Accumulated Impairment Loss | ||||
Gross goodwill | 192,994 | 190,882 | 173,936 | |
Accumulated impairment loss | (76,883) | (76,883) | (76,883) | |
Goodwill | $ 116,111 | $ 113,999 | $ 97,053 |
Intangible Assets, Net - Other
Intangible Assets, Net - Other (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Intangible Assets, Net | |||
Cost | $ 150,517 | $ 150,277 | |
Accumulated Amortization | (27,572) | (19,391) | |
Total | 122,945 | 130,886 | |
Amortization expenses | $ 8,200 | 6,800 | $ 6,700 |
Useful life | 20 years | ||
Customer relationships | |||
Intangible Assets, Net | |||
Cost | $ 148,648 | 148,648 | |
Accumulated Amortization | (26,487) | (18,778) | |
Total | 122,161 | 129,870 | |
Favorable lease assets | |||
Intangible Assets, Net | |||
Cost | 790 | 710 | |
Accumulated Amortization | (413) | (140) | |
Total | 377 | 570 | |
Software | |||
Intangible Assets, Net | |||
Cost | 1,079 | 919 | |
Accumulated Amortization | (672) | (473) | |
Total | $ 407 | $ 446 |
Intangible Assets, Net - Amorti
Intangible Assets, Net - Amortization expenses (Details) - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Amortization expenses for intangible assets | ||
2024 | $ 8,096 | |
2025 | 7,883 | |
2026 | 7,785 | |
2027 | 7,785 | |
2028 | 7,754 | |
Thereafter | 83,642 | |
Total | $ 122,945 | $ 130,886 |
Debt - Other (Details)
Debt - Other (Details) - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Debt | ||
Total debt | $ 278,975 | $ 219,680 |
Unamortized debt costs | (2,378) | (2,769) |
Current maturities of long-term debt | (9,811) | (11,504) |
Short-term debt | (43,694) | (42,905) |
Long-term debt, net | 223,092 | 162,502 |
Term loan facility | ||
Debt | ||
Total debt | 164,063 | 175,000 |
Revolving credit facility | ||
Debt | ||
Total debt | 65,000 | |
International trade finance lines | ||
Debt | ||
Total debt | 43,694 | 42,905 |
International notes payable | ||
Debt | ||
Total debt | 6,179 | 1,750 |
Other loans | ||
Debt | ||
Total debt | $ 39 | $ 25 |
Debt - Future payments (Details
Debt - Future payments (Details) $ in Thousands | Dec. 31, 2023 USD ($) |
Debt | |
2024 | $ 9,811 |
2025 | 11,501 |
2026 | 17,719 |
2027 | 196,250 |
Total | $ 235,281 |
Debt - Additional Information (
Debt - Additional Information (Details) $ in Thousands | 12 Months Ended | |||||||||||||
Mar. 08, 2024 USD ($) | Jan. 08, 2024 USD ($) | Mar. 21, 2023 USD ($) | Aug. 29, 2022 USD ($) | Dec. 31, 2023 USD ($) | Dec. 31, 2022 USD ($) | Apr. 30, 2026 | Dec. 31, 2025 | Sep. 30, 2025 | Mar. 31, 2025 | Dec. 31, 2024 | Mar. 07, 2024 USD ($) | Sep. 30, 2023 | Jun. 30, 2023 | |
Debt | ||||||||||||||
Debt finance costs | $ 6,600 | |||||||||||||
Early termination fees | $ 1,580 | |||||||||||||
Unamortized deferred financing fees written off | 4,296 | |||||||||||||
Short-term debt | $ 43,694 | $ 42,905 | ||||||||||||
Net Leverage Ratio | 5.50 | 4.50 | 5 | 5.25 | 5 | |||||||||
Revolving credit facility | ||||||||||||||
Debt | ||||||||||||||
Debt finance costs | 3,300 | |||||||||||||
Face amount | 175,000 | |||||||||||||
Line of credit | $ 65,000 | |||||||||||||
Weighted average effective rate (as a percent) | 8.90% | |||||||||||||
Term Loan facility | ||||||||||||||
Debt | ||||||||||||||
Debt finance costs | 3,300 | |||||||||||||
Face amount | $ 175,000 | |||||||||||||
Variable rate (as a percent) | 9.20% | |||||||||||||
Standby letter of credit | ||||||||||||||
Debt | ||||||||||||||
Letters of credit outstanding | $ 2,600 | |||||||||||||
Delayed Draw Term Loan Facility | ||||||||||||||
Debt | ||||||||||||||
Face amount | 50,000 | |||||||||||||
Line of credit | $ 0 | |||||||||||||
Delayed Draw Term Loan Facility | Subsequent Events | ||||||||||||||
Debt | ||||||||||||||
Proceeds from line of credit | $ 50,000 | |||||||||||||
Term Loan Facility and Delayed Draw Term Loan Facility | ||||||||||||||
Debt | ||||||||||||||
Line of credit, periodic payment term | 3 years | |||||||||||||
Percentage of original principal amount | 1.25% | |||||||||||||
Term Loan Facility and Delayed Draw Term Loan Facility | Year four | ||||||||||||||
Debt | ||||||||||||||
Percentage of original principal amount | 1.875% | |||||||||||||
Term Loan Facility and Delayed Draw Term Loan Facility | Year five | ||||||||||||||
Debt | ||||||||||||||
Percentage of original principal amount | 2.50% | |||||||||||||
Minimum | ||||||||||||||
Debt | ||||||||||||||
Interest coverage ratio | 2 | |||||||||||||
Minimum | Subsequent Events | ||||||||||||||
Debt | ||||||||||||||
Interest coverage ratio | 2 | 1.50 | ||||||||||||
Net Leverage Ratio | 4.50 | |||||||||||||
Maximum | ||||||||||||||
Debt | ||||||||||||||
Net Leverage Ratio | 3.75 | |||||||||||||
Maximum | Subsequent Events | ||||||||||||||
Debt | ||||||||||||||
Net Leverage Ratio | 6.25 | |||||||||||||
Base rate | One Month Interest Period [Member] | ||||||||||||||
Debt | ||||||||||||||
Interest rate (as a percent) | 1% | |||||||||||||
Interest period | 1 month | |||||||||||||
SOFR | One Month Interest Period [Member] | ||||||||||||||
Debt | ||||||||||||||
Variable rate (as a percent) | 0.10% | |||||||||||||
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) | 2.50% | |||||||||||||
SOFR | Maximum | ||||||||||||||
Debt | ||||||||||||||
Variable rate (as a percent) | 3.75% | |||||||||||||
ABR | Minimum | ||||||||||||||
Debt | ||||||||||||||
Variable rate (as a percent) | 1.50% | |||||||||||||
ABR | Maximum | ||||||||||||||
Debt | ||||||||||||||
Variable rate (as a percent) | 2.75% | |||||||||||||
NYFRB | ||||||||||||||
Debt | ||||||||||||||
Interest rate (as a percent) | 0.50% | |||||||||||||
Delayed Draw Term Loan Facility | Subsequent Events | ||||||||||||||
Debt | ||||||||||||||
Proceeds from line of credit | $ 50,000 | |||||||||||||
New short-term trade finance facility | ||||||||||||||
Debt | ||||||||||||||
Face amount | $ 70,000 | |||||||||||||
Variable rate (as a percent) | 4% | |||||||||||||
Line of credit | $ 37,000 | |||||||||||||
Debt term | 1 year | |||||||||||||
New short-term trade finance facility | Subsequent Events | ||||||||||||||
Debt | ||||||||||||||
Face amount | $ 55,000 | $ 70,000 | ||||||||||||
Debt term | 1 year | |||||||||||||
New short-term trade finance facility | SOFR | Subsequent Events | ||||||||||||||
Debt | ||||||||||||||
Variable rate (as a percent) | 4% | |||||||||||||
New short-term trade finance facility | SOFR one-month | ||||||||||||||
Debt | ||||||||||||||
Variable rate (as a percent) | 1% | |||||||||||||
New short-term trade finance facility | SOFR one-month | Subsequent Events | ||||||||||||||
Debt | ||||||||||||||
Variable rate (as a percent) | 1% | |||||||||||||
New short-term trade finance facility | Federal Funds Rate | ||||||||||||||
Debt | ||||||||||||||
Variable rate (as a percent) | 0.50% | |||||||||||||
New short-term trade finance facility | Federal Funds Rate | Subsequent Events | ||||||||||||||
Debt | ||||||||||||||
Variable rate (as a percent) | 0.50% |
Debt - Information (Details)
Debt - Information (Details) $ in Thousands | 12 Months Ended | ||||
Sep. 28, 2023 USD ($) | Feb. 28, 2020 USD ($) | Dec. 31, 2022 USD ($) | Dec. 31, 2023 USD ($) item | Aug. 29, 2022 USD ($) | |
Debt | |||||
Early termination fees | $ 1,580 | ||||
Unamortized deferred financing fees written off | 4,296 | ||||
Debt finance costs | $ 6,600 | ||||
Short-term debt | $ (42,905) | $ (43,694) | |||
Term Loan Due in 2025 | Westrock Beverage Solutions, LLC | |||||
Debt | |||||
Face amount | $ 240,000 | ||||
Early termination fees | 1,600 | ||||
Unamortized deferred financing fees written off | 4,000 | ||||
US Asset Based Lending Facility | Westrock Beverage Solutions, LLC | |||||
Debt | |||||
Face amount | 90,000 | ||||
Unamortized deferred financing fees written off | 300 | ||||
Debt finance costs | $ 1,300 | ||||
International Debt and Lending Facilities | Westrock Coffee Company, LLC. | Mortgage backed securities | |||||
Debt | |||||
Long term note | 1,200 | ||||
Unsecured Working Capital Trade Finance Facility | |||||
Debt | |||||
Face amount | $ 5,000 | ||||
Line of credit | 5,000 | ||||
Long term debt, net | 4,500 | ||||
Current maturities of long term debt | $ 500 | ||||
Unsecured Working Capital Trade Finance Facility | SOFR | |||||
Debt | |||||
Variable rate | Term SOFR | ||||
Unsecured Working Capital Trade Finance Facility | Stepped repayments due December 31, 2024 | |||||
Debt | |||||
Periodic payment principal amount | $ 500 | ||||
Unsecured Working Capital Trade Finance Facility | Stepped repayments due December 31, 2025 | |||||
Debt | |||||
Periodic payment principal amount | 1,000 | ||||
Unsecured Working Capital Trade Finance Facility | Stepped repayments due December 31, 2026 | |||||
Debt | |||||
Periodic payment principal amount | $ 3,500 | ||||
Working Capital Trade Finance Facility | Westrock Coffee Company, LLC. | Mortgage backed securities | |||||
Debt | |||||
Number of mortgage-backed lending facilities | item | 2 | ||||
Short-term debt | $ (6,700) |
Series A Preferred Shares (Deta
Series A Preferred Shares (Details) $ / shares in Units, $ in Millions | 12 Months Ended | |
Dec. 31, 2023 USD ($) item D $ / shares shares | Dec. 31, 2022 USD ($) | |
Temporary Equity [Line Items] | ||
Conversion price | $ 11.50 | |
Common shares issued | shares | 76,030 | |
Preferred Shares | shares | 76,030 | |
Term of anniversary | 5 years 6 months | |
Number of shares converted | item | 1 | |
Threshold number of days | D | 10 | |
Redemption price per share | $ 18.50 | |
Series A Preferred Shares | ||
Temporary Equity [Line Items] | ||
Shares issued | shares | 23,587,952 | |
Liquidation preference per share | $ 11.50 | |
Liquidation preference share | shares | 23,511,922 | |
Conversion price | $ 11.50 | |
Accretion value | $ | $ 0.2 | $ 1.3 |
Series A Preferred Shares | Minimum | ||
Temporary Equity [Line Items] | ||
Aggregate redemption payment | $ | $ 270.4 | |
Redemption price per share | $ 18.50 |
Derivatives - Other (Details)
Derivatives - Other (Details) lb in Millions, $ in Millions | 12 Months Ended | ||
Dec. 31, 2023 USD ($) lb | Dec. 31, 2022 USD ($) lb | Dec. 31, 2021 USD ($) | |
Derivatives | |||
Net gains reported in AOCI expected to be reclassified | $ | $ 6.6 | ||
Cash flow hedging | |||
Derivatives | |||
Net gains reported in AOCI expected to be reclassified | $ | $ (6.4) | $ 13.1 | $ 7.2 |
Coffee futures contracts | Cash flow hedging | |||
Derivatives | |||
Notional amount of derivative purchased | 63.4 | ||
Coffee futures contracts | Designated as hedges | Cash flow hedging | |||
Derivatives | |||
Derivative notional amount | 11.5 | 29.2 | |
Coffee options | Cash flow hedging | |||
Derivatives | |||
Notional amount of derivative purchased | 98.6 |
Derivatives - Fair value of ass
Derivatives - Fair value of assets and liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Derivatives | ||
Fair value of derivative assets | $ 13,658 | $ 15,053 |
Fair value of derivative liabilities | 3,731 | 7,592 |
Designated as hedges | ||
Derivatives | ||
Fair value of derivative assets | 3,355 | |
Fair value of derivative liabilities | 3,334 | |
Designated as hedges | Coffee futures contracts | Derivative assets | ||
Derivatives | ||
Fair value of derivative assets | 3,355 | |
Designated as hedges | Coffee futures contracts | Derivative liabilities | ||
Derivatives | ||
Fair value of derivative liabilities | 3,334 | |
Not designated as hedges | ||
Derivatives | ||
Fair value of derivative assets | 10,303 | 15,053 |
Fair value of derivative liabilities | 3,731 | 4,258 |
Not designated as hedges | Forward purchase and sales contracts | Derivative assets | ||
Derivatives | ||
Fair value of derivative assets | 10,303 | 15,053 |
Not designated as hedges | Forward purchase and sales contracts | Derivative liabilities | ||
Derivatives | ||
Fair value of derivative liabilities | $ 3,731 | $ 4,258 |
Derivatives - Pre-tax net gains
Derivatives - Pre-tax net gains and losses (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Derivatives | |||
Net unrealized gains (losses) | $ 9,717 | $ (18,114) | $ 8,178 |
Designated as hedges | Cash flow hedging | Coffee derivatives | Cost of sales | |||
Derivatives | |||
Net realized gains (losses) | (6,377) | 13,094 | 7,197 |
Not designated as hedges | Cash flow hedging | Forward sales and purchase contracts | Cost of sales | |||
Derivatives | |||
Net unrealized gains (losses) | $ (4,064) | $ 8,828 | $ (4,799) |
Fair Value Measurements - Other
Fair Value Measurements - Other Information (Details) - USD ($) $ / shares in Units, $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 | Aug. 26, 2022 |
Fair Value Measurements | |||
Assets | $ 47,105 | $ 54,981 | |
Liabilities | 48,532 | 63,113 | |
Warrant exercise price (in dollars per share) | $ 11.50 | ||
Green coffee associated with forward contracts | |||
Fair Value Measurements | |||
Assets | 33,447 | 39,928 | |
Coffee futures contracts | |||
Fair Value Measurements | |||
Assets | 3,355 | ||
Liabilities | 3,334 | ||
Forward purchase and sales contracts | |||
Fair Value Measurements | |||
Assets | 10,303 | 15,053 | |
Liabilities | 3,731 | 4,258 | |
Westrock Public Warrants | |||
Fair Value Measurements | |||
Liabilities | $ 39,371 | $ 27,179 | |
Warrant exercise price (in dollars per share) | $ 2.30 | $ 2.27 | |
Westrock Private Warrants | |||
Fair Value Measurements | |||
Liabilities | $ 5,430 | $ 28,342 | |
Warrant exercise price (in dollars per share) | $ 2.68 | $ 3.83 | |
Level 1 | |||
Fair Value Measurements | |||
Assets | $ 3,355 | ||
Liabilities | 39,371 | $ 30,513 | |
Level 1 | Coffee futures contracts | |||
Fair Value Measurements | |||
Assets | 3,355 | ||
Liabilities | 3,334 | ||
Level 1 | Westrock Public Warrants | |||
Fair Value Measurements | |||
Liabilities | 39,371 | 27,179 | |
Level 2 | |||
Fair Value Measurements | |||
Assets | 43,750 | 54,981 | |
Liabilities | 3,731 | 4,258 | |
Level 2 | Green coffee associated with forward contracts | |||
Fair Value Measurements | |||
Assets | 33,447 | 39,928 | |
Level 2 | Forward purchase and sales contracts | |||
Fair Value Measurements | |||
Assets | 10,303 | 15,053 | |
Liabilities | 3,731 | 4,258 | |
Level 3 | |||
Fair Value Measurements | |||
Liabilities | 5,430 | 28,342 | |
Level 3 | Westrock Private Warrants | |||
Fair Value Measurements | |||
Liabilities | $ 5,430 | $ 28,342 |
Fair Value Measurements - Chang
Fair Value Measurements - Change in Fair Value (Details) - Level 3 - Westrock Private Warrants - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Fair Value Measurements | ||
Fair value as of beginning | $ 28,342 | |
Assumption of warrants | $ 11,618 | |
Transfer out of Level 3 | (18,916) | |
Change in fair value | (3,996) | 16,724 |
Fair value as of ending | $ 5,430 | $ 28,342 |
Fair Value Measurements - Measu
Fair Value Measurements - Measurements (Details) | Dec. 31, 2023 $ / shares Y | Dec. 31, 2022 $ / shares Y |
Stock price | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Measurement inputs | 10.21 | 13.36 |
Exercise price | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Measurement inputs | 11.50 | 11.50 |
Expected term (years) | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Measurement inputs | Y | 5 | 5 |
Expected volatility | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Measurement inputs | 33.80 | 7.74 |
Risk-free rate of return | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Measurement inputs | 3.91 | 3.99 |
Dividend yield | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Measurement inputs | 0 | 0 |
Equity-Based Compensation - Uni
Equity-Based Compensation - Unit option - Other (Details) $ / shares in Units, shares in Millions, $ in Millions | 12 Months Ended | |||
Dec. 31, 2023 USD ($) $ / shares | Dec. 31, 2022 USD ($) D $ / shares shares | Dec. 31, 2021 USD ($) | Aug. 31, 2022 D $ / shares | |
Share-Based Compensation Arrangement by Share-Based Payment Award | ||||
Options granted (in shares) | shares | 0.3 | |||
Stock based compensation expenses | $ | $ 0.4 | $ 0.6 | $ 0.5 | |
Compensation cost not yet recognized | $ | 0.1 | |||
2022 Equity Plan | ||||
Share-Based Compensation Arrangement by Share-Based Payment Award | ||||
Number of trading days | D | 10 | |||
Number of Consecutive Trading Days | D | 30 | |||
Share price (in dollars per share) | $ / shares | $ 18.50 | |||
Restricted Awards | ||||
Share-Based Compensation Arrangement by Share-Based Payment Award | ||||
Stock based compensation expenses | $ | $ 0.1 | $ 0.3 | $ 0.8 | |
Restricted Awards | 2022 Equity Plan | ||||
Share-Based Compensation Arrangement by Share-Based Payment Award | ||||
Number of trading days | D | 10 | |||
Number of Consecutive Trading Days | D | 30 | |||
Share price (in dollars per share) | $ / shares | $ 18.50 | |||
Stock options | ||||
Share-Based Compensation Arrangement by Share-Based Payment Award | ||||
Share price (in dollars per share) | $ / shares | $ 10.21 | |||
Options outstanding, intrinsic value | $ | $ 1.9 | |||
Employee | ||||
Share-Based Compensation Arrangement by Share-Based Payment Award | ||||
Vesting period | 4 years | |||
Option expiration period | 10 years | |||
Period to recognized compensation cost | 4 years | |||
Employee | Vesting tranche 1 | Vesting option of four years of continuous service by the employee | ||||
Share-Based Compensation Arrangement by Share-Based Payment Award | ||||
Vesting period | 4 years | |||
Employee | Vesting tranche 2 | Realization of cash proceeds on all CEP Units | ||||
Share-Based Compensation Arrangement by Share-Based Payment Award | ||||
Vesting period | 1 year |
Equity-Based Compensation - U_2
Equity-Based Compensation - Unit option - Activity (Details) - $ / shares | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Equity-Based Compensation | ||
Options granted all-time (in dollars per shares) | $ 9.54 | |
Options | ||
Options outstanding, Beginning Balance (in shares) | 3,217,349 | |
Options granted (in shares) | 300,000 | |
Options forfeited (in shares) | (323,148) | |
Options exercised (in shares) | (88,525) | |
Options outstanding, Ending Balance (in shares) | 2,805,676 | 3,217,349 |
Exercisable (in shares) | 841,705 | |
Exercise Price | ||
Options outstanding, Beginning Balance (in dollars per shares) | $ 9.54 | |
Options forfeited (in dollars per shares) | 9.54 | |
Options exercised (in dollars per shares) | 9.54 | |
Options outstanding, Ending Balance (in dollars per shares) | 9.54 | $ 9.54 |
Options exercisable (in dollars per shares) | $ 9.54 | |
Contractual Term | ||
Options outstanding (in years) | 6 years 9 months 18 days | 7 years 9 months 18 days |
Options outstanding exercisable (in years) | 6 years 8 months 12 days |
Equity-Based Compensation - Res
Equity-Based Compensation - Restricted common units - Other (Details) $ in Millions | 1 Months Ended | 12 Months Ended | ||||
Feb. 28, 2023 installment | Feb. 28, 2020 employee | Aug. 31, 2022 shares | Dec. 31, 2023 USD ($) shares | Dec. 31, 2022 USD ($) shares | Dec. 31, 2021 USD ($) shares | |
Share-Based Compensation Arrangement by Share-Based Payment Award | ||||||
Stock based compensation expenses | $ | $ 0.4 | $ 0.6 | $ 0.5 | |||
Restricted common units | ||||||
Share-Based Compensation Arrangement by Share-Based Payment Award | ||||||
Units granted (in shares) | 1,370,564 | 1,100,000 | ||||
Vested | 416,705 | |||||
Units outstanding | 1,989,782 | 1,127,000 | ||||
Granted Fair Value | $ | $ 15.8 | $ 13.1 | ||||
Common shares issued upon vesting of restricted common shares | 310,635 | |||||
Stock based compensation expenses | $ | $ 8.3 | $ 1.7 | ||||
Period to recognized compensation cost | 3 years | |||||
Aggregate intrinsic value | $ | $ 4.8 | |||||
Shares available for issuance | 2,200,000 | |||||
Restricted Awards | ||||||
Share-Based Compensation Arrangement by Share-Based Payment Award | ||||||
Common shares issued upon vesting of restricted common shares | 310,670 | 332,251 | 320,998 | |||
Volatility rate | 40% | |||||
Risk free interest rate | 1.14% | |||||
Discount rate | 30% | |||||
Stock based compensation expenses | $ | $ 0.1 | $ 0.3 | $ 0.8 | |||
Restricted Awards | Executive employee | ||||||
Share-Based Compensation Arrangement by Share-Based Payment Award | ||||||
Number of executive | employee | 3 | |||||
Number of shares issued for each unit | 0.1049203474320 | |||||
Number of installments | installment | 3 | |||||
Vesting period | 3 years |
Equity-Based Compensation - R_2
Equity-Based Compensation - Restricted common units - Activity (Details) - Restricted common units - $ / shares | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Units | ||
Units outstanding, Beginning balance (in shares) | 1,127,000 | |
Units granted (in shares) | 1,370,564 | 1,100,000 |
Units forfeited (in shares) | (91,077) | |
Units vested (in shares) | (416,705) | |
Units outstanding, Ending balance (in shares) | 1,989,782 | 1,127,000 |
Weighted-Average Fair Value at Grant Date | ||
Average Fair Market Value outstanding, Beginning balance (in dollars per shares) | $ 11.49 | |
Average Fair Market Value granted (in dollars per shares | 11.53 | |
Average Fair Market Value forfeited (in dollars per shares | 11.63 | |
Average Fair Market Value vested (in dollars per shares | 11.49 | |
Average Fair Market Value outstanding, Ending balance (in dollars per shares | $ 11.51 | $ 11.49 |
Accumulated Other Comprehensi_3
Accumulated Other Comprehensive Income (Loss) - Schedule of changes in accumulated other comprehensive loss, net of tax (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Accumulated Other Comprehensive (Loss) Income | |||
Balance at beginning of year | $ 11,729 | $ (175,998) | $ (139,741) |
Net accumulated other comprehensive income (loss) | 9,921 | (18,121) | 8,198 |
Balance at end of year | 113,740 | 11,729 | (175,998) |
Cash flow hedge changes in fair value gain (loss) | |||
Accumulated Other Comprehensive (Loss) Income | |||
Balance at beginning of year | (6,355) | 11,759 | 3,581 |
Other comprehensive income (loss) before reclassifications | 6,570 | (10,978) | 18,010 |
Amounts reclassified from accumulated comprehensive income | 6,377 | (13,094) | (7,197) |
Tax effect | (3,230) | 5,958 | (2,635) |
Net accumulated other comprehensive income (loss) | 3,362 | (6,355) | 11,759 |
Balance at end of year | 3,362 | (6,355) | 11,759 |
Foreign currency translation gain (loss) | |||
Accumulated Other Comprehensive (Loss) Income | |||
Balance at beginning of year | 252 | 259 | 239 |
Other comprehensive income (loss) before reclassifications | 204 | (7) | 20 |
Net accumulated other comprehensive income (loss) | 456 | 252 | 259 |
Balance at end of year | $ 456 | $ 252 | $ 259 |
Income Taxes - Income (loss) be
Income Taxes - Income (loss) before income taxes (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Income Taxes | |||
U.S. | $ (34,695) | $ (51,607) | $ (28,573) |
International | (6,130) | (3,743) | 3,897 |
Loss before income taxes and equity in earnings from unconsolidated entities | $ (40,825) | $ (55,350) | $ (24,676) |
Income Taxes - Income tax expen
Income Taxes - Income tax expense (benefit) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Current Federal, State and Local, Tax Expense (Benefit) | |||
State | $ 266 | $ 529 | $ 179 |
Foreign | (112) | 1,619 | (99) |
Total current | 154 | 2,148 | 80 |
Deferred expense (benefit) | |||
Federal | (7,365) | 173 | (4,617) |
State | 236 | 81 | (901) |
Foreign | 617 | (2,291) | 2,070 |
Total deferred | (6,512) | (2,037) | (3,448) |
Income tax expense (benefit) | $ (6,358) | $ 111 | $ (3,368) |
Income Taxes - Reconciliation (
Income Taxes - Reconciliation (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Income Taxes | |||
Income tax expense (benefit) at US statutory income tax rate | $ (8,573) | $ (11,624) | $ (5,182) |
State income tax expense (benefit), net of federal benefit | (862) | (1,507) | (773) |
Foreign rate differential | (260) | (15) | (304) |
Change in fair value of warrants | (2,144) | 6,232 | |
Global intangible low-taxed income ("GILTI") inclusion | 1,095 | ||
Transaction costs | 260 | ||
Stock compensation (windfall)/shortfall | (838) | (195) | 57 |
Corporate interest restriction | 677 | 291 | |
Excess compensation (162(m)) | 717 | 182 | |
Other permanent differences | 161 | 146 | 78 |
Change in valuation allowance | 4,414 | 7,319 | 632 |
Provision to return adjustments | (320) | (166) | |
Effect of change in foreign tax rates | (552) | 1,181 | |
Other | 350 | 154 | (246) |
Income tax expense (benefit) | $ (6,358) | $ 111 | $ (3,368) |
Effective tax rate (as percentage) | 15.60% | (0.20%) | 13.60% |
Income Taxes - Deferred income
Income Taxes - Deferred income tax assets and liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 |
Deferred tax assets | ||||
Liabilities and reserves | $ 2,158 | $ 2,300 | ||
Interest limitation | 18,217 | 16,256 | ||
Net operating losses | 21,804 | 13,483 | ||
Transaction expenses | 186 | 206 | ||
Inventories | 1,146 | 1,449 | ||
Stock compensation | 1,205 | 794 | ||
Derivatives | 552 | |||
Operating lease liabilities | 16,223 | 2,430 | ||
Other | 2,131 | 269 | ||
Total | 63,070 | 37,739 | ||
Valuation allowance | (12,878) | (8,464) | $ (1,145) | $ (513) |
Total deferred tax assets, net | 50,192 | 29,275 | ||
Deferred tax liabilities | ||||
Property, plant and equipment | (15,649) | (13,334) | ||
Intangible assets | (26,392) | (27,358) | ||
Derivatives | (2,214) | |||
Right-of-use assets | (16,041) | (2,403) | ||
Other | (743) | (535) | ||
Total | (61,039) | (43,630) | ||
Net deferred tax liability | $ (10,847) | $ (14,355) |
Income Taxes - Valuation Allowa
Income Taxes - Valuation Allowance (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Income Taxes | |||
Beginning balance | $ 8,464 | $ 1,145 | $ 513 |
Additions | 4,414 | 7,319 | 632 |
Ending Balance | $ 12,878 | $ 8,464 | $ 1,145 |
Income Taxes - Unrecognized tax
Income Taxes - Unrecognized tax benefits (Details) $ in Thousands | 12 Months Ended |
Dec. 31, 2023 USD ($) | |
Reconciliation of unrecognized tax benefits Roll forward | |
Beginning balance | $ 96 |
Additions for tax positions in prior period | 2,473 |
Additions for tax positions in current period | 1,421 |
Ending Balance | $ 3,990 |
Income Taxes - Other (Details)
Income Taxes - Other (Details) - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 |
Operating Loss Carryforwards | ||||
Operating loss carryforward | $ 88,300 | |||
Uncertain tax position | 3,990 | $ 96 | $ 96 | $ 96 |
Valuation allowance reversal impact on effective tax rate | 100 | |||
Undistributed earnings of certain foreign subsidiaries for investment | 6,800 | |||
Provisions | 0 | |||
Federal | ||||
Operating Loss Carryforwards | ||||
Valuation allowance | 9,900 | 6,900 | ||
Deferred tax assets interest limitation carryforward | 7,600 | 5,500 | ||
State | ||||
Operating Loss Carryforwards | ||||
Operating loss carryforward | 96,600 | |||
Foreign | ||||
Operating Loss Carryforwards | ||||
Valuation allowance | 3,000 | $ 1,600 | ||
Operating loss carryforward | $ 10,900 |
Earnings Per Shares (Details)
Earnings Per Shares (Details) $ / shares in Units, shares in Thousands, $ in Thousands | 12 Months Ended | |||
Dec. 31, 2023 USD ($) class $ / shares shares | Dec. 31, 2022 USD ($) $ / shares shares | Dec. 31, 2021 USD ($) $ / shares shares | ||
Earnings per Unit | ||||
Number of classes of equity | class | 2 | |||
Numerator: | ||||
Net income (loss) attributable to common unitholders - basic | $ | $ (34,743) | $ (77,633) | $ (46,155) | |
Numerator: | ||||
Net income (loss) attributable to common shareholders - basic | $ | (34,743) | (77,633) | (46,155) | |
Net income (loss) attributable to common shareholders - diluted | $ | $ (34,743) | $ (77,633) | $ (46,155) | |
Denominator: | ||||
Weighted-average common units outstanding - basic | [1] | 80,684 | 48,444 | 34,472 |
Weighted-average common units outstanding - diluted | [1] | 80,684 | 48,444 | 34,472 |
Basic earnings (loss) per common share | $ / shares | [1] | $ (0.43) | $ (1.60) | $ (1.34) |
Dilutive earnings (loss) per common share | $ / shares | [1] | $ (0.43) | $ (1.60) | $ (1.34) |
Warrants | ||||
Earnings per Unit | ||||
Antidilutive securities | 19,149 | 19,373 | ||
Restricted stock | ||||
Earnings per Unit | ||||
Antidilutive securities | 1,917 | 1,602 | 950 | |
Employee Stock Option | ||||
Earnings per Unit | ||||
Antidilutive securities | 1,445 | 3,217 | 3,200 | |
Series A Preferred Shares | ||||
Earnings per Unit | ||||
Antidilutive securities | 23,551 | 23,588 | 25,092 | |
[1] (1) Retroactively adjusted for de-SPAC merger transaction as described in Note 4. |
Segment Information - Other (De
Segment Information - Other (Details) | 12 Months Ended |
Dec. 31, 2023 segment | |
Segment Information | |
Number of operating segments | 2 |
United States | |
Segment Information | |
Percentage of long-lived assets | 100% |
Segment information - Selected
Segment information - Selected Financial Data (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Segment Information | |||
Net sales | $ 864,714 | $ 867,872 | $ 698,144 |
Adjusted EBITDA | 45,081 | 60,053 | 47,174 |
Interest expense | 29,157 | 35,497 | 32,549 |
Income tax expense (benefit) | (6,358) | 111 | (3,368) |
Depreciation and amortization | 26,584 | 24,210 | 25,501 |
Transaction, restructuring and integration expense | 14,557 | 13,169 | 8,835 |
Change in fair value of warrant liabilities | (10,207) | 29,675 | |
Management and consulting fees (S&D acquisition) | 556 | 3,868 | 6,382 |
Equity-based compensation | 8,708 | 2,631 | 1,223 |
Conway extract and ready-to-drink facility start-up costs | 11,698 | ||
Mark-to-market adjustments | (104) | 3,502 | (3,585) |
Loss (gain) on disposal of property, plant and equipment | 1,153 | 935 | 243 |
Other | 3,904 | 1,916 | 702 |
Net loss | (34,567) | (55,461) | (21,308) |
Capital expenditures | 164,611 | 63,261 | 25,115 |
Total assets | 971,514 | 746,213 | 593,020 |
Operating Segments | Beverage Solutions. | |||
Segment Information | |||
Net sales | 722,865 | 685,303 | 551,013 |
Adjusted EBITDA | 41,624 | 53,951 | 41,468 |
Capital expenditures | 164,474 | 63,158 | 24,501 |
Total assets | 891,170 | 658,814 | 510,751 |
Operating Segments | Sustainable, Sourcing and Traceability | |||
Segment Information | |||
Net sales | 146,911 | 207,579 | 170,035 |
Adjusted EBITDA | 3,457 | 6,102 | 5,706 |
Capital expenditures | 137 | 103 | 614 |
Total assets | 80,344 | 87,399 | 82,269 |
Intersegment Eliminations | |||
Segment Information | |||
Net sales | $ (5,062) | $ (25,010) | $ (22,904) |
Commitments and Contingencies (
Commitments and Contingencies (Details) $ in Millions | Dec. 31, 2023 USD ($) |
Commitments and Contingencies. | |
Purchase obligations | $ 238.7 |
Repurchase agreement liability | $ 8.3 |
Related Party Transactions - Tr
Related Party Transactions - Transactions with related party (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Related Party Transactions | |||
Other long-term liabilities | $ 1,629 | $ 2,611 | |
Interest expense | 29,157 | 35,497 | $ 32,549 |
Related Party | |||
Related Party Transactions | |||
Interest expense | 1,183 | 2,629 | |
Related Party | Brown Brothers Harriman | |||
Related Party Transactions | |||
Interest expense | 541 | 1,393 | |
Related Party | Wooster Capital, LLC | |||
Related Party Transactions | |||
Interest expense | 503 | 599 | |
Related Party | Jo Ellen Ford | |||
Related Party Transactions | |||
Interest expense | $ 139 | 214 | |
Related Party | Westrock Group, LLC | |||
Related Party Transactions | |||
Short-term related party debt | $ 200 | ||
Related Party | Westrock Finance, LLC | |||
Related Party Transactions | |||
Interest expense | $ 423 |
Related Party Transactions - Ot
Related Party Transactions - Other (Details) - USD ($) $ in Thousands | 1 Months Ended | 12 Months Ended | ||
Feb. 29, 2020 | Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Related Party Transactions | ||||
Expenses incurred | $ 144,577 | $ 129,985 | $ 128,506 | |
Related Party | ||||
Related Party Transactions | ||||
Expenses incurred | 600 | 3,300 | 3,300 | |
Related Party | Westrock Group, LLC | ||||
Related Party Transactions | ||||
Expenses incurred | $ 10,000 | 1,500 | $ 900 | $ 800 |
Short-term related party debt | $ 200 |
Subsequent Events (Details)
Subsequent Events (Details) | 12 Months Ended | ||||||||||||||
Aug. 15, 2024 USD ($) D $ / shares shares | Mar. 08, 2024 USD ($) | Feb. 12, 2024 USD ($) ft² | Jan. 08, 2024 USD ($) | Mar. 21, 2023 USD ($) | Dec. 31, 2023 USD ($) | Apr. 30, 2026 | Dec. 31, 2025 | Sep. 30, 2025 | Mar. 31, 2025 | Dec. 31, 2024 | Mar. 07, 2024 USD ($) | Feb. 15, 2024 USD ($) | Sep. 30, 2023 | Jun. 30, 2023 | |
Subsequent Events | |||||||||||||||
Termination term (in years) | 1 year | ||||||||||||||
Option to extend | true | ||||||||||||||
Secured net leverage ratio | 5.50 | 4.50 | 5 | 5.25 | 5 | ||||||||||
Minimum liquidity covenant required | $ 15,000,000 | ||||||||||||||
Anti-cash hoarding covenant requirement amount | 20,000,000 | ||||||||||||||
Delayed Draw Term Loan Facility | |||||||||||||||
Subsequent Events | |||||||||||||||
Face amount | 50,000,000 | ||||||||||||||
Line of credit | 0 | ||||||||||||||
New short-term trade finance facility | |||||||||||||||
Subsequent Events | |||||||||||||||
Face amount | $ 70,000,000 | ||||||||||||||
Debt term | 1 year | ||||||||||||||
Variable rate (as a percent) | 4% | ||||||||||||||
Line of credit | $ 37,000,000 | ||||||||||||||
New short-term trade finance facility | Federal Funds Rate | |||||||||||||||
Subsequent Events | |||||||||||||||
Variable rate (as a percent) | 0.50% | ||||||||||||||
New short-term trade finance facility | SOFR one-month | |||||||||||||||
Subsequent Events | |||||||||||||||
Variable rate (as a percent) | 1% | ||||||||||||||
Minimum | |||||||||||||||
Subsequent Events | |||||||||||||||
Interest coverage ratio | 2 | ||||||||||||||
Minimum | SOFR | |||||||||||||||
Subsequent Events | |||||||||||||||
Variable rate (as a percent) | 2.50% | ||||||||||||||
Minimum | ABR rate | |||||||||||||||
Subsequent Events | |||||||||||||||
Variable rate (as a percent) | 1.50% | ||||||||||||||
Maximum | |||||||||||||||
Subsequent Events | |||||||||||||||
Secured net leverage ratio | 3.75 | ||||||||||||||
Maximum | SOFR | |||||||||||||||
Subsequent Events | |||||||||||||||
Variable rate (as a percent) | 3.75% | ||||||||||||||
Maximum | ABR rate | |||||||||||||||
Subsequent Events | |||||||||||||||
Variable rate (as a percent) | 2.75% | ||||||||||||||
Subsequent Events | |||||||||||||||
Subsequent Events | |||||||||||||||
Threshold trading days of 30 consecutive trading days for calculating share price | D | 20 | ||||||||||||||
Threshold consecutive trading days immediately preceding calendar year | D | 30 | ||||||||||||||
Percentage of conversion price for conversion of convertible notes | 130% | ||||||||||||||
Number of trading days of certain fundamental change transactions that occur prior to close of business | 35 days | ||||||||||||||
Subsequent Events | Delayed Draw Term Loan Facility | |||||||||||||||
Subsequent Events | |||||||||||||||
Proceeds from line of credit | $ 50,000,000 | ||||||||||||||
Subsequent Events | Westrock Group, LLC | |||||||||||||||
Subsequent Events | |||||||||||||||
Lease area (in sq feet) | ft² | 530,000 | ||||||||||||||
Cost incurred on lease termination | $ 0 | ||||||||||||||
Expected costs to be incurred on lease termination | $ 0 | ||||||||||||||
Percentage of equity interest owned | 5% | ||||||||||||||
Subsequent Events | An affiliate of The Stephens Group, LLC | |||||||||||||||
Subsequent Events | |||||||||||||||
Percentage of equity interest owned | 5% | ||||||||||||||
Subsequent Events | An affiliate of Sowell Westrock, L.P. | |||||||||||||||
Subsequent Events | |||||||||||||||
Percentage of equity interest owned | 5% | ||||||||||||||
Subsequent Events | HF Direct Investments Pool, LLC | |||||||||||||||
Subsequent Events | |||||||||||||||
Percentage of equity interest owned | 10% | ||||||||||||||
Subsequent Events | 5.00% convertible senior notes due 2029 | |||||||||||||||
Subsequent Events | |||||||||||||||
Face amount | $ 1,000 | $ 72,000,000 | |||||||||||||
Interest rate (as a percent) | 5% | ||||||||||||||
Percentage of shares issuable on outstanding common stock | 19.99% | ||||||||||||||
Conversion price | $ / shares | $ 12.84 | ||||||||||||||
Debt converted into shares | shares | 77.88 | ||||||||||||||
Subsequent Events | New short-term trade finance facility | |||||||||||||||
Subsequent Events | |||||||||||||||
Face amount | $ 55,000,000 | $ 70,000,000 | |||||||||||||
Debt term | 1 year | ||||||||||||||
Subsequent Events | New short-term trade finance facility | SOFR | |||||||||||||||
Subsequent Events | |||||||||||||||
Variable rate (as a percent) | 4% | ||||||||||||||
Subsequent Events | New short-term trade finance facility | Federal Funds Rate | |||||||||||||||
Subsequent Events | |||||||||||||||
Variable rate (as a percent) | 0.50% | ||||||||||||||
Subsequent Events | New short-term trade finance facility | SOFR one-month | |||||||||||||||
Subsequent Events | |||||||||||||||
Variable rate (as a percent) | 1% | ||||||||||||||
Subsequent Events | Minimum | |||||||||||||||
Subsequent Events | |||||||||||||||
Secured net leverage ratio | 4.50 | ||||||||||||||
Interest coverage ratio | 2 | 1.50 | |||||||||||||
Subsequent Events | Minimum | SOFR | During the covenant relief period | |||||||||||||||
Subsequent Events | |||||||||||||||
Secured net leverage ratio | 3 | ||||||||||||||
Subsequent Events | Minimum | SOFR | After the covenant relief period | |||||||||||||||
Subsequent Events | |||||||||||||||
Secured net leverage ratio | 2 | ||||||||||||||
Subsequent Events | Minimum | ABR rate | During the covenant relief period | |||||||||||||||
Subsequent Events | |||||||||||||||
Secured net leverage ratio | 2 | ||||||||||||||
Subsequent Events | Minimum | ABR rate | After the covenant relief period | |||||||||||||||
Subsequent Events | |||||||||||||||
Secured net leverage ratio | 1 | ||||||||||||||
Subsequent Events | Maximum | |||||||||||||||
Subsequent Events | |||||||||||||||
Secured net leverage ratio | 6.25 | ||||||||||||||
Subsequent Events | Maximum | SOFR | During the covenant relief period | |||||||||||||||
Subsequent Events | |||||||||||||||
Secured net leverage ratio | 4 | ||||||||||||||
Subsequent Events | Maximum | SOFR | After the covenant relief period | |||||||||||||||
Subsequent Events | |||||||||||||||
Secured net leverage ratio | 3 | ||||||||||||||
Subsequent Events | Maximum | ABR rate | During the covenant relief period | |||||||||||||||
Subsequent Events | |||||||||||||||
Secured net leverage ratio | 3 | ||||||||||||||
Subsequent Events | Maximum | ABR rate | After the covenant relief period | |||||||||||||||
Subsequent Events | |||||||||||||||
Secured net leverage ratio | 2 |
SCHEDULE I - PARENT COMPANY O_2
SCHEDULE I - PARENT COMPANY ONLY - CONDENSED BALANCE SHEET (Details) - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 |
ASSETS | ||||
Cash and cash equivalents | $ 37,196 | $ 16,838 | ||
Total current assets | 313,050 | 298,099 | ||
Investment in consolidated subsidiaries | 400 | |||
Total Assets | 971,514 | 746,213 | $ 593,020 | |
LIABILITIES, CONVERTIBLE PREFERRED SHARES AND SHAREHOLDERS' EQUITY | ||||
Accrued expenses and other current liabilities | 35,217 | 37,459 | ||
Total current liabilities | 239,635 | 216,135 | ||
Warrant liabilities | 44,801 | 55,521 | ||
Total liabilities | 583,558 | 459,548 | ||
Shareholders' Equity | ||||
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, 88,051 shares and 75,020 shares issued and outstanding at December 31, 2023 and December 31, 2022, respectively | 880 | 750 | ||
Additional paid-in-capital | 471,666 | 342,664 | ||
Accumulated deficit | (362,624) | (328,042) | ||
Accumulated other comprehensive income (loss) | 3,818 | (6,103) | ||
Total shareholders' equity | 113,740 | 11,729 | $ (175,998) | $ (139,741) |
Total Liabilities, Convertible Preferred Shares and Shareholders' Equity | 971,514 | 746,213 | ||
PARENT COMPANY ONLY | ||||
ASSETS | ||||
Cash and cash equivalents | 49 | 77 | ||
Total current assets | 109 | 2,077 | ||
Deferred income taxes | 4,332 | 1,032 | ||
Investment in consolidated subsidiaries | 432,991 | 336,753 | ||
Total Assets | 437,432 | 339,862 | ||
LIABILITIES, CONVERTIBLE PREFERRED SHARES AND SHAREHOLDERS' EQUITY | ||||
Accrued expenses and other current liabilities | 30 | 38 | ||
Total current liabilities | 4,675 | 136 | ||
Warrant liabilities | 44,801 | 55,521 | ||
Total liabilities | 49,476 | 55,657 | ||
Shareholders' Equity | ||||
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, 88,051 shares and 75,020 shares issued and outstanding at December 31, 2023 and December 31, 2022, respectively | 880 | 750 | ||
Additional paid-in-capital | 471,666 | 342,664 | ||
Accumulated deficit | (362,624) | (328,042) | ||
Accumulated other comprehensive income (loss) | 3,818 | (6,103) | ||
Total shareholders' equity | 113,740 | 9,269 | ||
Total Liabilities, Convertible Preferred Shares and Shareholders' Equity | 437,432 | 339,862 | ||
PARENT COMPANY ONLY | Related Party | ||||
ASSETS | ||||
Related party receivables | 60 | 2,000 | ||
LIABILITIES, CONVERTIBLE PREFERRED SHARES AND SHAREHOLDERS' EQUITY | ||||
Related party payables | 4,645 | 98 | ||
Series A Redeemable Common Equivalent Preferred Shares | ||||
LIABILITIES, CONVERTIBLE PREFERRED SHARES AND SHAREHOLDERS' EQUITY | ||||
Series A Convertible Preferred Shares | 274,216 | 274,936 | ||
Series A Redeemable Common Equivalent Preferred Shares | PARENT COMPANY ONLY | ||||
LIABILITIES, CONVERTIBLE PREFERRED SHARES AND SHAREHOLDERS' EQUITY | ||||
Series A Convertible Preferred Shares | $ 274,216 | $ 274,936 |
SCHEDULE I - PARENT COMPANY O_3
SCHEDULE I - PARENT COMPANY ONLY - CONDENSED BALANCE SHEETS (Details) - USD ($) | Dec. 31, 2023 | Dec. 31, 2022 |
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 share) | $ 0.01 | $ 0.01 |
Common stock, Shares Authorized (In shares) | 300,000,000 | 300,000,000 |
Common stock, Shares Issued (In shares) | 88,051,000 | 75,020,000 |
Common stock, Shares Outstanding (In shares) | 88,051,000 | 75,020,000 |
PARENT COMPANY ONLY | ||
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 share) | $ 0.01 | $ 0.01 |
Common stock, Shares Authorized (In shares) | 300,000,000 | 300,000,000 |
Common stock, Shares Issued (In shares) | 88,051,000 | 75,020,000 |
Common stock, Shares Outstanding (In shares) | 88,051,000 | 75,020,000 |
Series A Preferred Shares | ||
Redeemable Common Preferred Shares, Issued (in shares) | 23,587,952 | |
Redeemable Common Preferred Shares, Outstanding (in shares) | 23,511,922 | |
Series A Redeemable Common Equivalent 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) | 23,512,000 | 23,588,000 |
Redeemable Common Preferred Shares, Outstanding (in shares) | 23,512,000 | 23,588,000 |
Temporary Equity, Liquidation Preference | $ 11.50 | $ 11.50 |
Series A Redeemable Common Equivalent Preferred Shares [Member] | PARENT COMPANY ONLY | ||
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) | 23,512,000 | 23,588,000 |
Redeemable Common Preferred Shares, Outstanding (in shares) | 23,512,000 | 23,588,000 |
Temporary Equity, Liquidation Preference | $ 11.50 | $ 11.50 |
SCHEDULE I - PARENT COMPANY O_4
SCHEDULE I - PARENT COMPANY ONLY - CONDENSED STATEMENT OF OPERATIONS (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Selling, general and administrative expense | $ 144,577 | $ 129,985 | $ 128,506 |
Transaction, restructuring and integration expense | 14,557 | 13,169 | 8,835 |
Total operating expenses | 160,287 | 144,089 | 137,584 |
Income (loss) from operations | (20,429) | 8,676 | 7,839 |
Change in fair value of warrant liabilities | (10,207) | 29,675 | |
Other, net | 1,446 | (1,146) | (34) |
Loss before income taxes | (40,825) | (55,350) | (24,676) |
Income tax expense (benefit) | (6,358) | 111 | (3,368) |
Net loss attributable to shareholders | (34,582) | (55,185) | (21,947) |
Comprehensive loss attributable to common shareholders | (24,822) | (95,754) | (37,957) |
PARENT COMPANY ONLY | |||
Selling, general and administrative expense | 8,764 | ||
Transaction, restructuring and integration expense | 344 | ||
Total operating expenses | 9,108 | ||
Income (loss) from operations | (9,108) | ||
Change in fair value of warrant liabilities | (10,207) | 29,675 | |
Other, net | (24) | ||
Loss (earnings) from consolidated subsidiaries | (39,006) | (23,364) | (21,947) |
Loss before income taxes | (37,883) | (53,039) | (21,947) |
Income tax expense (benefit) | (3,301) | 2,146 | |
Net loss attributable to shareholders | (34,582) | (55,185) | (21,947) |
Comprehensive loss attributable to common shareholders | $ (24,822) | $ (95,754) | $ (37,957) |
SCHEDULE I - PARENT COMPANY O_5
SCHEDULE I - PARENT COMPANY ONLY - CONDENSED STATEMENT OF CASH FLOW (Details) - USD ($) $ in Thousands | 2 Months Ended | 12 Months Ended | ||
Aug. 26, 2022 | Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Cash flows from operating activities: | ||||
Net cash used in operating activities | $ (64,064) | $ (56,628) | $ 2,877 | |
Cash flows from financing activities: | ||||
Proceeds from related party debt | 11,700 | |||
Proceeds from the issuance of common equivalent preferred units | 17,000 | |||
Proceeds from de-SPAC merger and PIPE financing | 255,737 | |||
Payment of common equity issuance costs | (1,000) | (23,998) | ||
Proceeds from common equity issuance | 118,767 | |||
Payment of preferred equity issuance costs | (1,250) | |||
Common equivalent preferred dividends | $ (4,400) | (4,380) | ||
Payment for taxes for net share settlement of equity awards | (2,977) | (477) | (162) | |
Proceeds from exercise of stock options | 848 | 375 | ||
Proceeds from exercise of Public Warrants | 2,632 | |||
Net cash provided by financing activities | 244,214 | 134,676 | 23,839 | |
Net increase in cash and cash equivalents and restricted cash | 11,435 | 3,535 | 4,218 | |
Cash and cash equivalents and restricted cash at beginning of period | 26,405 | 22,870 | 18,652 | |
Cash and cash equivalents and restricted cash at end of period | 37,840 | 26,405 | 22,870 | |
PARENT COMPANY ONLY | ||||
Cash flows from operating activities: | ||||
Net cash used in operating activities | (22,981) | (14,950) | (22,425) | |
Cash flows from financing activities: | ||||
Proceeds from related party debt | 11,700 | |||
Proceeds from the issuance of common equivalent preferred units | 17,000 | |||
Proceeds from de-SPAC merger and PIPE financing | 255,737 | |||
Payment of common equity issuance costs | (1,000) | (23,998) | ||
Proceeds from common equity issuance | 118,767 | |||
Payment of preferred equity issuance costs | (1,250) | |||
Common equivalent preferred dividends | (4,380) | |||
Payment for taxes for net share settlement of equity awards | (2,977) | (477) | ||
Proceeds from exercise of stock options | 848 | 375 | (162) | |
Proceeds from exercise of Public Warrants | 2,632 | |||
Intercompany transactions, net | (95,317) | (223,700) | 6,607 | |
Net cash provided by financing activities | 22,953 | 14,007 | 23,445 | |
Net increase in cash and cash equivalents and restricted cash | (28) | (943) | 1,020 | |
Cash and cash equivalents and restricted cash at beginning of period | 77 | 1,020 | ||
Cash and cash equivalents and restricted cash at end of period | $ 49 | $ 77 | $ 1,020 |
Pay vs Performance Disclosure
Pay vs Performance Disclosure - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Pay vs Performance Disclosure | |||
Net Income (Loss) | $ (34,582) | $ (55,185) | $ (21,947) |
Insider Trading Arrangements
Insider Trading Arrangements | 3 Months Ended |
Dec. 31, 2023 | |
Trading Arrangements, by Individual | |
Rule 10b5-1 Arrangement Adopted | false |
Non-Rule 10b5-1 Arrangement Adopted | false |
Rule 10b5-1 Arrangement Terminated | false |
Non-Rule 10b5-1 Arrangement Terminated | false |