Westrock Coffee Q2 Earnings Call Highlights

Key Points

• Record profitability and cash flow: Second-quarter adjusted EBITDA rose nearly 39% year over year to a record $21.3 million, while free cash flow reached $20.2 million and turned positive for the first half of 2026 earlier than expected.
• Beverage Solutions drove growth: Consolidated sales increased 8.8% to approximately $306 million, led by a nearly 17% increase in Beverage Solutions sales and higher ready-to-drink and other beverage volumes.
• Lower spending supports deleveraging: Capital expenditures fell sharply to about $6.5 million, and Westrock reaffirmed its 2026 adjusted EBITDA outlook of $90 million to $100 million while prioritizing existing capacity and balance-sheet improvement over major new facilities.

Westrock Coffee NASDAQ: WEST reported second-quarter results that included record quarterly adjusted EBITDA, year-over-year sales growth and free cash flow generation ahead of its prior expectations, as the company said its recently expanded manufacturing platform is becoming a cash-generating operation.

Chief Executive Officer Scott Ford said the company recorded its fifth consecutive quarter of year-over-year consolidated adjusted EBITDA growth and its fifth straight quarter of sequential deleveraging. Westrock ended the first half of 2026 nearly 10% ahead of its internal EBITDA plan, according to Ford.

“The platform we spent the last three years building no longer requires capital,” Ford said. “Rather, it is a generator of cash.”

Sales Growth Led by Beverage Solutions

Consolidated net sales totaled approximately $306 million in the second quarter, up 8.8% from the second quarter of 2025, Chief Financial Officer Chris Pledger said. For the first six months of 2026, net sales were approximately $614 million, a 24% increase from the prior-year period.

Beverage Solutions was the primary growth driver, with segment net sales rising nearly 17% year over year. Ford attributed the performance to continued volume growth in ready-to-drink canned, glass and multi-serve bottle formats at the company’s Conway facility, as well as increased volumes from existing and new brand partners.

Pledger said Beverage Solutions adjusted EBITDA was $22.2 million in the quarter, up 13% from a year earlier. The company cited the ramp-up of Conway’s RTD formats, new flavors, extracts and ingredients customer wins, including a lemonade refreshers program, and better fixed-cost absorption across its manufacturing network.

Single-serve cup volume increased more than 9% year over year when excluding business lost after a customer departed following industry acquisition and consolidation, management said. Westrock expects new single-serve volumes to begin arriving late in 2026 and has targeted full replacement of the lost volume by the end of 2027.

Ford said Westrock is adding product capabilities in areas including refreshers, energy drinks, high-protein beverages, functional products and nutraceutical single-serve cups. He said the company has eight products moving through its process for potential launches during the next 24 months, with new format investments requiring an “anchor tenant” customer to support the expense before capacity is added.

Profitability and Cash Flow Improve

Second-quarter consolidated adjusted EBITDA was $21.3 million, up nearly 39% year over year and a company record for a second quarter. For the first six months of 2026, consolidated adjusted EBITDA was $47.3 million, more than double the first-half 2025 result.

Consolidated gross profit was $37.7 million, down $3.6 million from a year ago. Pledger said the decline reflected $4.1 million of additional depreciation and amortization expense associated with assets placed into service at Conway, along with a $2 million unfavorable year-over-year impact from non-cash mark-to-market adjustments in the SS&T segment.

The company’s operating loss narrowed to $1.4 million from $15 million in the prior-year quarter. Westrock reported operating income for the first half of 2026, compared with a $28 million operating loss in the first half of 2025. Its net loss narrowed to $13.7 million in the second quarter from $21.6 million a year earlier.

The SS&T segment generated adjusted EBITDA of $2 million in the second quarter, compared with $3.3 million in the prior-year period. Pledger said the quarterly difference was driven by shipment timing. Year-to-date SS&T adjusted EBITDA was $8.4 million, up more than 60% from $5.2 million in the first half of 2025.

Westrock generated $20.2 million in free cash flow during the quarter and became free-cash-flow positive for the first half of the year. Management had previously expected that inflection to occur in the second half of 2026.

Lower Capital Spending and Deleveraging

Capital expenditures were approximately $6.5 million in the quarter, down from more than $20.5 million in the second quarter of 2025. Westrock expects total 2026 capital expenditures of about $30 million, compared with $160 million in 2024 and $89 million in 2025.

Pledger said the company views roughly half of the expected $30 million annual run rate as maintenance capital expenditures over time, though that proportion could be lower initially because of the company’s newer assets.

At quarter-end, Westrock had approximately $73 million of unrestricted cash and revolver availability under its Beverage Solutions credit facility. Its secured net leverage ratio under that facility was 3.36 times, slightly lower than in the first quarter.

On June 30, the company extended the maturity of most of its Beverage Solutions credit facility to November 2028 and ended its covenant relief period early, a move Pledger said reduced borrowing costs. The company said it remained in compliance with its credit agreement.

Outlook Reaffirmed as Management Focuses on Existing Capacity

Westrock reaffirmed its full-year 2026 consolidated adjusted EBITDA outlook of $90 million to $100 million. Ford said the company’s first two quarters exceeded its internal plan, aided by customers moving product volumes ahead of schedule and newer customer projects expanding beyond their original scale.

Management did not raise guidance, with Ford saying the company intends to provide formal 2027 guidance on its next quarterly call. He said Westrock is focused on selling remaining installed capacity, optimizing customer mix and margins, and improving operational execution across its plants.

Ford also said the company does not plan to rush into building another major facility. Instead, it intends to prioritize balance-sheet improvement and shareholder value creation while selectively considering additional format lines that can leverage existing infrastructure and produce attractive incremental returns.

About Westrock Coffee (NASDAQ:WEST)

Westrock Coffee Company is a global integrated coffee roaster and manufacturer that delivers end-to-end solutions across the coffee and tea supply chain. The company sources, roasts, blends, packages and distributes a diverse range of products, including hot and cold brew coffee, single-serve pods, instant and soluble coffee, tea, and specialty coffee extracts. Serving retail, convenience, foodservice and industrial customers, Westrock Coffee offers both private-label and co-packed branded products to meet the needs of supermarkets, quick-service restaurants, office coffee services and other channels.

Since its founding in 2008, Westrock Coffee has grown through a combination of organic expansion and strategic acquisitions to establish manufacturing facilities across North America, Latin America and Europe.

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