Westrock Coffee Company (NASDAQ:WEST), a Delaware-based beverage manufacturer with annual revenues of $836.72 million, announced today an increase in its revolving credit facility by $25 million, bringing the total available credit to $200 million.
According to InvestingPro data, the company currently operates with a significant debt burden, though its liquid assets exceed short-term obligations with a current ratio of 1.39. This move comes as part of an agreement with Wells Fargo (NYSE:WFC) Bank, N.A., acting as administrative and collateral agent, and includes participation from member banks of the Farm Credit System.
According to the amendment, the company's secured net leverage ratio will be adjusted during a covenant relief period, with a maximum secured net leverage ratio set at 6.00x for the test period ending June 30, 2025, 5.50x for the period ending September 30, 2025, and 5.25x for the period ending December 31, 2025. Following the relief period, the minimum liquidity covenant will no longer apply.
The interest rates, commitment fees, maturity dates, and other terms of the Incremental Revolving Facility Commitments and Loans align with those of the existing revolving facility.
This strategic financial maneuver is intended to support Westrock Coffee's growth and operational needs, particularly noteworthy given the company's total debt of $580.88 million and debt-to-equity ratio of 5.26. The information regarding this financial development is based on a press release statement. For comprehensive analysis of Westrock Coffee's financial health and growth prospects, InvestingPro subscribers can access detailed research reports covering over 1,400 US stocks, including key metrics, Fair Value estimates, and expert insights.
In other recent news, Westrock Coffee Company reported a notable year-over-year revenue increase and strong growth expectations for its Beverage Solutions and Sustainable Sourcing & Traceability (SS&T) segments. The company's CEO, Scott Ford (NYSE:F), announced a 33% revenue boost and a 36% rise in volumes, despite prevailing macroeconomic challenges. Westrock Coffee is set to generate significant revenues from the Conway extract and ready-to-drink plant starting early 2025, backed by new customer commitments.
The company reported a 19% year-over-year increase in its Beverage Solutions segment's adjusted EBITDA and a 45% rise in the SS&T segment. The Conway facility is projected to contribute notably to revenues starting 2025. The fiscal year 2024 guidance for consolidated adjusted EBITDA is set at $50 million, including $10 million in Conway scale-up costs. For the fiscal year 2025, the company anticipates adjusted EBITDA to be between $80 million and $100 million.
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