Westrock Coffee Co. announced Thursday that it lost $4.3 million in the first quarter and company officials said its Conway plant will play a vital role in future production as customer demand intensifies.
Company officials said they already are taking orders for planned production lines that are not yet built out. Westrock announced in December that it would invest $100 million in a 524,000-square-foot plant in Conway, projected to begin production next year, that will be expanded over time and include about 250 employees.
The global coffee supplier and manufacturer posted a net loss of $4.3 million in the quarter ended March 31, compared with a loss of $4.7 million a year ago, as sales increased. Sales were up 10% to $205.4 million compared with $186.4 million in the first quarter of 2022.
Losses included 13 cents per share in the first quarter compared with 34 cents last year.
Chief Executive Officer Scott Ford told industry analysts on a conference call Thursday that the company primarily measures its ongoing performance based on earnings before income, taxes, depreciation and amortization (EBITDA). Adjusted EBITDA in the quarter was $8.4 million, down from $11.4 million last year.
"As 2023 begins to take shape, we are focused on our two major initiatives of successfully launching our Conway extract and ready-to-drink facility in the first quarter of 2024 and continuing the maturation of our existing operations to be able to capture the profitability intrinsically available from our growing large-scale, global customer base," Ford said in announcing the results.
The Little Rock company is diligently monitoring costs and expenses to enhance competitiveness and boost the bottom line, Ford said. "This is a competitive commodity-pricing business," he said on the call.
In the quarter, Westrock completed conversion of a North Carolina facility to improve efficiency though the effort created two weeks of downtime at the Concord plant, which reduced net profit by $4 million, the company said.
"I am pleased that this conversion is now behind us and that the long-awaited equipment expansion in our single-serve business is currently in place," Ford said. "Both of these efforts create a greater foundation for our long-term growth and prepare us to execute the launch of our Conway extract and ready-to-drink facility early next year."
Shares of Westrock, which went public in April 2022, fell 5 cents to close Thursday at $11.60. The stock is down about 14% this year. Earnings were announced after U.S. markets closed.