Hello, and welcome to Westrock Coffee Company's Fourth Quarter 2025 Earnings Conference Call. My name is Lisa, I'll be coordinating your call today. [Operator Instructions]. I'll now turn the call over to Jauan Arnold with WestRock Coffee.

Thank you, and welcome to Westrock Coffee Company's Fourth Quarter 2025 Earnings Conference Call. Today's call is being recorded. With us are Mr. Scott Ford, Co-Founder and Chief Executive Officer; and Mr. Chris Pledger, Chief Financial Officer. By now, everyone should have access to the company's fourth quarter earnings release issued earlier today. This information is available on the Investor Relations section of Westrock Coffee Company's website at investors.westrockcoffee.com. Certain comments made on this call include forward-looking statements, which are subject to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are based on management's current expectations and beliefs concerning future events and are subject to several risks and uncertainties that could cause actual results to differ materially from those described in these forward-looking statements. Please refer to today's press release and our filings with the SEC for a more detailed discussion of the risk factors that could cause actual results to differ materially from those expressed or implied in any forward-looking statements made today. All discussions during the call will use some non-GAAP financial measures as we describe business performance. The SEC filings as well as the earnings press release provide reconciliations of these non-GAAP financial measures to the most directly comparable GAAP measures. And with that, it's my pleasure to turn the call over to Scott Ford, our Co-Founder and Chief Executive Officer.

Thank you, Jauan. Good afternoon, everyone. Thanks for joining us. We are pleased to announce today that we produced record-breaking fourth quarter and full year '25 results, driven by continued new customer volume additions, successful scale-up of our integrated platform and disciplined cost and operational execution across every part of our business. These results reflect the strength of our customer-centered broad portfolio model and the tremendous value our strategic investments are now delivering. On a regular SEC basis, with no construction activity add-backs, our 2025 consolidated adjusted EBITDA was $69.7 million, up #48% year-over-year. This performance sets up another strong year of EBITDA expansion in '26, where we estimate our EBITDA will be up another 30% to 45% this year. Dropping down 1 additional layer and importantly, we also outperformed our estimated deleveraging goals. In spite of '25 being the final CapEx year on the build-out of the 2 new plants we built in Conway, Arkansas. At year-end '25, our Beverage Solutions secured net leverage ratio stood at only 3.9x, a meaningful beat to our 4.5x target. The fact that we have now switched from construction mode into regular daily operations, which simply require maintenance CapEx is a pivotal moment in our company's history as we are scheduled to become fully free cash flow positive after all CapEx and debt service in 2026. Strategically, we remain firmly on track toward our goal of becoming the premier integrated strategic supplier for the preeminent coffee tea energy and now high protein beverage brands globally. To this end, we have 2 important updates to share with you today. First, we are pleased to announce that we have completed the product development and commercialization processes for our first high-protein beverage for a leading CPG brand. We currently expect production to begin this fall. And…

Thank you, Scott, and good afternoon, everyone. As Scott mentioned, 2025 was an exceptional year for WestRock Coffee. We delivered results that exceeded our outlook across each of our key financial metrics. Consolidated adjusted EBITDA for fiscal 2025 were $69.7 million, exceeding our previously communicated range of $60 million to $65 million and representing 48% year-over-year growth. At the segment level, Beverage Solutions segment adjusted EBITDA was $68.5 million, above the high end of our outlook range of $63 million to $68 million and SS&T segment adjusted EBITDA was $16.5 million, also exceeding our outlook range of $14 million to $16 million. We also ended the year with a Beverage Solutions secured net leverage ratio of 3.85x, significantly better than the 4.5x level contemplated in our outlook. These results reflect continued improvement in operating performance throughout the year. Over the past 3 years, we have invested approximately $360 million in CapEx to build and commercialize our Conway extract and RTD facility, that investment phase is now complete. As we move into 2026, our story shifts. With Conway fully commercialized and all production capabilities operating as designed, our focus now is straightforward, drive volume, optimize customer mix and maximize margin across the platform. With that context, I'll walk you through our full year results. For the full year consolidated net sales increased 40% of 2024. Our reported net loss of $90.4 million reflects the continued investment and scale up of Conway throughout 2025. Consolidated adjusted EBITDA was $69.7 million, up 48% year-over-year, with the fourth quarter representing our strongest order at $23 million, up 72% versus the prior year period. In Beverage Solutions, full year segment adjusted EBITDA was $68.5 million, up 28% versus 2024. Growth was driven by the launch of the RTD can line midyear and continued ramp of…

[Operator Instructions] Our first question today will be coming from the line of Todd Brooks of Benchmark.

A couple of questions here. I know we're talking about 29% to 44% EBITDA growth in the guidance for 2026. Can you size up maybe the EBITDA contribution of the customer that came off the platform on the single-serve side in '25, so that we really get a sense of what the growth rate is apples- for-apples because I know we're not looking until '27 to replace those single-serve revenues from the departed customer? And I have a follow-up, too.

Yes. We're going to make sure we understood your question. Yes. So the annualized run rate was about $30 million that we expected in '26. We had about a 0.5 year's performance in '25. That capacity when we refill it would be worth about that incremental over the guidance that we've given you for '26 at this point because we don't have any of that refilled in our guidance for '26. Does that all together? I think those are the right pieces, Todd.

Okay. Great. So optically, if we think about ex that 1 customer, $49 million in EBITDA and '25 going to $90 million to $100 million for kind of normalized year-over-year growth?

Correct.

Okay. Great. And then the second one, and I know increasingly, Scott, you keep talking about the partnership with Palantir, I know you talked about being 3 years into it and some of the efficiencies that have come from it. But how far into the process are you of levering their expertise? And how iterative is the process? So does it keep getting stronger, better, more effective, the more time that you're working with them?

Yes, sure. So we started out with our basic trade and logistics in our trade and logistics platform. Then had such a good experience with them. And we literally iterate with them daily, and there's weekly reviews, and it's -- they are maniacal communicators both the team that works here and that and their counterparts at Palantir. I sit on a weekly update just to make sure that I'm trying to keep my finger on the pulse of it. So we started in the trade and logistics platform. We then moved into the operational platform. And what we came to appreciate was that they are capable of delivering out of the software agents and engineering that they do. They are capable of delivering essentially every function that every SaaS software business that we pay somebody to for the license and then pay another group of people to maintain and to connect. They're able to do all of that centrally as part of the standard engineering package that they've been working with. So we work with them through our trade and logistics platform. We work -- so that's our entire procurement team. We work with them through the manufacturing floor where they've gone in and automated and put in cameras and counters and measures on every piece of the equipment that run through our factories. And at this juncture, we are now turning the sites on every Software as a Service business that we do business with, frankly. It is unbelievable how much more efficient it is than what you have always in my 40-year career, had to close together through various software vendors.

Okay. Great. Scott. So would you say most of the kind of implementation opportunity is behind you and now it's cost extraction for what they can replace from other services? Or is there still more fruit to come from volunteer partnership?

I have learned not to put a limit on it. So I'm going to say I don't know, but I remain highly optimistic about not only what we are doing, but the fruits that will come from that and then what we will turn over next.

And for our next question is coming from the line of Eric Des Lauriers of Craig-Hallum.

Congrats on the strong end of the year here. My first question is just kind of drilling into the potential to win back some customers in the single-serve cup space now that, that large customer has moved on. I think you mentioned that you'd like to have that sort of refilled sometime in 2027. Can you just help us understand a bit more of the pacing or how you're thinking about it? Should we think this is sort of these volumes is being replaced entering 2027? Or sort of by the end of '27, you'll be able to replace these in your estimation?

Sure. We actually expect some of them might actually show up in late '26. My guess is that we will have all of it running by late '27. So let's take a phased-in approach view here. And it's a combination of retail brands, consumer brands, regional brands essentially like the customer mix that we have today. But the big win and loss hats off to our competitor being aggressive about getting them back. But it is lit the fire that there is a way to live on other infrastructures than the predominant one. And I don't think they can buy them all. So we're going to give them a chance to sort it all out.

Okay. That's helpful. And then One of the things that you've kind of highlighted is in addition to driving volume, which is you sort of have a clear path to doing that. The other, I guess, main aspect of margin enhancement is optimizing product mix. Could you just expand on that a bit? I know you mentioned new high-protein offerings coming online later this year. Can you just kind of give us a high level of which products are you looking to increase make up to drive margin? And just overall, what should we think of when we hear you referring to optimizing product mix?

Sure. Well, some of it -- and this is in Pledger's remarks. Some of it is just maturation of turning something on and getting it all running and getting your shifts right and getting all your processes right. And that is a constant slog and the ops and logistics team have done a fabulous job of doing that work all year long and the systems team. But as you've talked about new products, we're actually very excited about that because this plant is built primarily as an RTD plant and handles milk and has retort systems. And you would not build that kind of, let's call that a battle tank or a small skirmish of making soda water or sodas that just need to be -- they're sterile and need to be lightly heated. But that doesn't mean that we can't do them. And through a little bit of reengineering in the water system, and in the heating system, we can actually now -- if you come to us and say, I have -- I want to launch an RTD brand, I want to launch traditional energy beverages, I want to launch sparkling sodas, or I want to move my capacities around, and I want to bring in another vendor, the facility is now set up to be able to do all of that. And that creates more demand, which creates more options for us to fill and cover fixed costs while we're trying to get our margins tighter and our fixed costs down through just honing the operation.

[Operator Instructions] And our next question is coming from the line of Sarang Vora of Telsey Group.

Congrats on a great quarter. and it's good to see the growth in EBITDA and sales ahead. Just closing in on the construction part of the facility, can you remind us what is now fully operational at the Conway plant? My understanding is that there were 2 can lines, on multiserve, one glass line. Now that you are done with the construction phase, can you help us close the loop on like what's up and running now at convey?

Yes. The -- yes, that's a short answer. They're all up and running.

Awesome. So following up on that, can you help us understand how the capacity utilization is progressing as you are I think you started this year -- last year, middle of last year, it started operating. So can you help us how the -- just as a whole convey, how is the capacity utilization in like '25? How does it look like in '26 from where you are seeing it right? And then any color on like where it kind of ends up around '27 as you onboard some customers that one of the rep. And just curious to know like how it's ramping up.

Sure. We're not going to get into the split outs. We broke out a lot of information when we were in the construction phase so that people could follow along and make what we thought they need ample information to be able to assess where we were in the construction process. And we broke all that out last year in detail, so that people could follow along. This year, as you saw in Chris' comments, a, we don't think it's required anymore for you to understand where we are. And b, we have seen several things that we've shared with public while we went through this build out. We've seen that used in targeted customer contacts. And -- so we're going to lighten up on what we share around all of that because it's not good for us when it's beyond what we're required to put out. But I will say this, what we generate through those plants and the utilization in '25 will be higher in '26, and we are scheduled to be busting the same in '27.

Great. One question on the margin and kind of intuitively look that both [indiscernible] and SG&A both [indiscernible] when you look at the EBITDA guidance. Is that a fair way to think is one bigger than other? Is there -- is gross margin [indiscernible] if you can share any color on between cost and the gross margin, primarily helped by mix, if you can share any color over there?

Sarang, can you repeat the question? It was coming in, you're breaking up as the question was coming through, so I didn't quite get it.

So I'll give it simple. Can you help us understand how the mix between gross margin and cost leverage helps your EBITDA for 2026? Is one bigger than other or something just curious.

No. I think -- I mean what you're going to see in 2026 is from an overall like SG&A cost, you're going to actually see that from '25 to '26 staying flat to going down. But you're going to see as the plant ramps up, you're not going to have as much of the benefit that you got in terms of subscale add-backs. So on an absolute dollar basis, that number might go up a little bit, but not quantum too big. What I think you're going to really be able to see as we continue to layer on the volumes, as Scott was saying, you're really going to see us how we're able to leverage the platform from starting out really the medium can or the large can on in the middle of last year, getting the glass and the second can line up in December with everything on the leverage of being able to run more and more and more volume through the facility without having to add on additional costs in order to be able to do it. That's where you're really going to see the economics and the EBITDA growth that we've talked about in terms generating '26.

Thank you. That does conclude today's Q&A session. I would like to turn the call back over to Scott Ford for closing remarks. Please go ahead.

Well, I'd just like to thank everybody. It's been a long struggle to build 2 plants from scratch and fill them up. We have tried to be as transparent as we could be along the process. And at this juncture, we're going to call construction over, and we're going to go back to being a normal business, trying to fill our plants and lower our cost and drive EBITDA, which will drive refinancing and all sorts of other good funds. So thanks for joining us and look forward to talking to you in 90 days.

Thank you all for participating in today's conference call. This does conclude today's program. You may all disconnect.