Westrock Coffee Company, LLC (WEST) Earnings

Management highlights

### Overall Financial Milestones - This was the fifth consecutive quarter of year-over-year consolidated adjusted EBITDA growth and fifth consecutive quarter of sequential deleveraging. - The company turned free cash flow positive in Q2 2026, one quarter ahead of the previously anticipated schedule for H2 2026. Q2 2026 free cash flow was $20.2 million, and the company is free cash flow positive for the first half of 2026. - The net leverage ratio under the Beverage Solutions credit agreement improved to 3.36x, down from prior quarters. - H1 2026 results came in almost 10% ahead of the company's internal EBITDA plan, with the heavy capital investment phase now completed. The business has shifted from requiring external capital to generating consistent free cash flow. ### Commercial & Operational Updates - Beverage Solutions growth is led by strong volume growth of RTD can, glass, and multi-serve bottle formats at the Conway facility, from both new and existing brand partners across packaged coffee, single serve cups, and RTD beverages. The recently expanded Conway manufacturing capacity is now fully operational, shortening sales cycles with brand partners. Secured incremental canned format volume wins that will drive profit growth through the rest of 2026 and into 2027 without requiring additional capital expenditure. - Single serve cups have strong new inbound customer interest; full volume replacement for the customer lost to acquisition is expected by the end of 2027, with new volumes starting to arrive in late 2026. - Palantir Foundry AI is now implemented as a native core of the company's operations, powering real-time analysis across manufacturing, logistics, and planning systems. Operating leverage from this AI implementation is just beginning to impact financial results. - Capital expenditure for Q2 2026 was $6.5 million, down from over $20.5 million in Q2 2025. Full year 2026 capex is on pace to hit ~$30 million, a major drop from $160 million in 2024 and $89 million in 2025, reflecting the structural shift to a lower-capital business model. - The company extended the maturity of most of its Beverage Solutions credit facility to November 2028 and terminated its covenant relief period early, lowering borrowing costs and increasing financial flexibility. Ended Q2 with ~$73 million of unrestricted cash and revolver availability, and remains fully compliant with all credit agreement covenants. ### Core Strategic Priorities 1. Sell through the remaining installed manufacturing capacity the company has already built 2. Manage customer mix to maximize overall margins 3. Drive operational excellence across all production facilities

Guidance

- Management reaffirmed the full year 2026 consolidated adjusted EBITDA guidance range of $90 million to $100 million, despite the first two quarters of 2026 coming in ahead of internal plans. - No formal 2027 EBITDA guidance is provided at this time; management expects to release formal 2027 guidance on the next quarterly call, and notes management is more optimistic about 2027 results than previously projected. - Full year 2026 capital expenditure is projected to be approximately $30 million, on pace with current spending. Going forward, maintenance capital expenditure is expected to make up roughly half of the $30 million annual run rate, rising slightly as existing assets age. - Management expects SG&A to stay flat at worst over coming quarters, with ample opportunity for SG&A to decline in the next 12-18 months as construction-related temporary costs fall away.

Segment performance

Consolidated: Q2 2026 net sales of $306 million, up 8.8% YoY; consolidated adjusted EBITDA of $21.3 million, up 39% YoY (a Q2 record); consolidated gross profit of $37.7 million, down $3.6 million YoY; operating loss narrowed to $1.4 million from $15 million YoY; net loss narrowed to $13.7 million from $21.6 million YoY. First half 2026 consolidated net sales $614 million, up 24% YoY; first half adjusted EBITDA $47.3 million, more than double H1 2025. 1. Beverage Solutions: Q2 2026 net sales grew ~17% YoY; segment adjusted EBITDA was $22.2 million, up 13% YoY. Revenue contribution was 56% of consolidated net sales. 2. Single Serve and Trading (SS&T): Q2 2026 segment adjusted EBITDA was $2 million, down from $3.3 million YoY, due to shipment timing. Year-to-date adjusted EBITDA hit $8.4 million, up 60% from H1 2025. Exiting the departed customer volume (lost to industry acquisition/consolidation), single serve cup volumes grew 9% YoY, matching the company's stated recovery trajectory. Revenue contribution was 44% of consolidated net sales.

Risks & headwinds

- Forward-looking results are subject to risks and uncertainties that could cause actual results to differ materially from management projections, per the safe harbor disclosure. Key risks are detailed in the company's SEC filings and earnings release. - Volume and revenue realization for new customer and product pipeline depends on timely customer conversion and onboarding, which may occur slower than currently expected. - Any new format line expansions require pre-sold anchor customer volume to underwrite capital costs, which may not materialize for all pipeline products. - Future free cash flow allocation and capital structure changes are still under evaluation with the board of directors, and outcomes may differ from current expectations.

Analyst Q&A

• Q: How much of the company's strong pipeline is driven by the new Conway facility versus industry M&A pushing customers to seek new manufacturing partners? Is Westrock gaining net share in the market?

  A: Management confirms Westrock is gaining material net share in every category it competes in, including roasting ground, canning, and single serve cups. The company is growing 4x faster than the overall single serve cup industry. Share gains stem from the company's large-scale, automated, competitively priced platform, cross-selling additional capabilities (including commodity risk management) to new customers, and strong word-of-mouth from successful customer partnerships.

• Q: How complete is the current product capability set, and how much more new product expansion is planned?

  A: Management notes there are still incremental product and SKU opportunities to pursue, with 4 new format lines planned for launch in 2026, and 8 additional new products in the approval pipeline for launch over the next 24 months. The product development pipeline is currently twice as large as it has ever been in the company's history. All new lines require pre-committed anchor customer volume to underwrite costs before they are added.

• Q: What is driving upside relative to internal projections, and what are the company's priorities for free cash flow now that it is cash flow positive?

  A: Upside stems from customers moving volume to Westrock faster than scheduled, with many customers bringing 20% more volume than initially contracted, and small new customer projects growing into much larger partnerships. Management notes incremental new format lines leverage existing Conway infrastructure, so incremental contribution flows directly to EBITDA. The board is currently evaluating long-term free cash use options, with a focus on deleveraging the balance sheet and delivering value to shareholders before pursuing large new expansion projects.

• Q: How does profitability vary across new product categories like protein drinks versus traditional beverages, and how should we expect SG&A to trend as production ramps?

  A: Management evaluates profitability holistically at the total customer level, not per product. Lower-margin new products are added when they increase overall account profitability and leverage existing sales and infrastructure costs, and the aggregate company margin is trending up. SG&A is expected to stay flat at worst, and will likely decline over coming quarters as temporary construction-related costs wind down and AI tools improve operational efficiency.