Hello, and welcome to Westrock Coffee Company's third quarter 2022 earnings conference call. My name is Chris, and I'll be coordinating your call today. Following prepared remarks, we will open the call to your questions with instructions to be given at that time. I'd now like to hand the call over to Clay Crumbliss with ICR.
Thank you. Welcome to Westrock Coffee Company's third quarter 2022 earnings results conference call. Today's call is being recorded. With us today 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 third quarter earnings release issued earlier today. This information is available in 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 other 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. Also, 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. With that, it's my pleasure to turn the call over to Scott Ford, our Co-founder and Chief Executive Officer. Scott?
Thank you, and good afternoon, everyone. Welcome to our inaugural public company quarterly earnings call. It has been quite the journey from our startup days in 2009 with $1.5 million in annual revenues to the business you see today. All of which I believe will pale in comparison to what we are about to do over the next five years. As many of you know, we started Westrock Coffee Company in 2009 when we saw the need for a new business model that would help ensure smallholder farmers in the developing world are paid a fair price for their coffee crop. Our business model, which is not predicated on us receiving charity or charging our customers premium prices, is most effective when we ourselves deliver superior financial results.
While we are a dual purpose organization, we are first and foremost a commercial enterprise. Because the better we do as a business in the developed world, the more we can do for farmers in the developing world, and the better stewards we can prove to be for the investors who trust us with their capital. As we profitably grow our business, we create greater demand pool for coffee to enter our supply chain, which in turn allows us to expand the number of farmers whose crops we purchase, through which we essentially underwrite the price of coffee in that community. What started in Rwanda as a single export mill through organic growth and via acquisitions, is today the leading integrated coffee, tea, and extract manufacturing company in the United States.
We have to thank for this our shareholders who believed in our future success when it was hard to see exactly how it would come to pass. Our customers who continue to select us for an ever-broadening array of products and services across an ever-widening geography. Our employee partners, whose passion and commitment to making a positive difference in the lives of everyone we serve up and down the supply chain is unmatched globally. The farmers in 35 origin countries without whose trust and trade we would have no business to report on. Now, we operate our business while purpose and farmer impact focused as a brand behind the brands model in the developed world, and the significant announcements we are making today shed light on both our progress to date and our capacities and potential over the next 5 years.
Before I turn the call over to Chris Pledger, I'd like to bring your attention to two very significant announcements we are making related to the growth of our extract and ready-to-drink manufacturing operations. First, we are pleased to announce that in response to the strong demand for the products we plan to produce from the previously announced phase one expansion of our extract and ready-to-drink facility in Conway, Arkansas, coupled with the additional capital beyond the PIPE that we raised through our recent SPAC merger, we now plan to bring forward the manufacturing and packaging capabilities previously planned for phase two.
Accelerating the phase two capital spend into phase one timing means that in addition to the basic extraction capabilities and high speed can and glass bottle lines planned for phase one, we will now add enhanced extraction and soluble capabilities, a multi-serve bottling line, and several bag-in-box lines. You'll recall that all of our previous long-term guidance was built solely on the completion of our original phase one planning. While not coming online in time to materially impact our 2024 EBITDA, this acceleration of phase two of those capabilities should allow us to continue to commensurately grow our adjusted EBITDA into 2025 and beyond.
Secondly, we are thrilled to announce that earlier today, we closed on the purchase of Kohana Coffee out of Richmond, California. Kohana, owned by Jonathan and his father, Steve Reinemund, the former CEO of PepsiCo, brings with it a fabulous team, two additional ready-to-drink extract packaging formats, and a number of important national customers. The Reinemunds will be rolling their equity in Kohana into Westrock Coffee, which I think speaks volumes about what we believe we can collectively do in the emerging ready-to-drink space, especially given their deep history in the beverage industry. Taken together, we believe these two developments materially accelerate our product to market timing, allowing us to bridge demand for a number of important CPG customers who are ramping up their own sales of RTD beverages, driven by their quickly accelerating end customer demand.
Finally, I wanna thank the team at Westrock Coffee, who, in spite of the unimaginable headwinds of quickly inflating costs and the attendant suppression of consumer demand brought about by the substantial rise in gas prices this summer, still managed to deliver adjusted EBITDA growth of roughly 30% year-over-year. While we are all disappointed that macroeconomic headwinds are gonna prevent us from achieving the 50% adjusted EBITDA growth we planned for, I am super thankful and respectful of all the team did in the midst of this inflationary storm to deliver yet again record financial results year to date. Chris?
Thanks, Scott, and good afternoon, everyone. Given that this is our first earnings call as a public company, I'll begin with a quick overview of where we are as a company year to date, provide a wrap-up of our recently completed third quarter, and then close with some comments on where we stand relative to our expectations for 2022. When you look at what we've accomplished as a company, 2022 has been an exceptional year for Westrock Coffee. On a consolidated basis, our net sales are up 26% year to date, and our adjusted EBITDA is up 29% year to date. With the closing of our SPAC merger with Riverview Acquisition Corp. in August, we raised approximately $300 million in common equity and $350 million in debt in what can best be described as a very challenging financial market.
We ended our third quarter with approximately $90 million of cash on our balance sheet and $175 million undrawn revolver. We made the decision to go public to position the company to capitalize on the consumer shift from hot black coffee to cold coffee-based beverages through the build-out of our extract and ready-to-drink facility in Conway, Arkansas, and to allow us to expand our operations internationally to meet the growing needs of our customers. With our new capital base and the leverage it creates for the company, we have everything we need to be able to execute on that plan. Turning now to the results of our third quarter, total company sales increased 27% to $230.3 million.
Total company gross profit increased 7% to $41.1 million, and total company adjusted EBITDA increased 33% to $17.9 million. While we continue to experience significant growth on an absolute dollar basis, our gross profit and adjusted EBITDA margins have come under pressure from higher labor and material costs. For example, coffee represents approximately 60% of the total cost of our products, and we have experienced 45% price inflation on green coffee purchase costs compared to the third quarter of 2021. As this cost is pushed through our net sales as a pass-through, our overall margins compress even though the dollar gross profit and dollar-adjusted EBITDA remain largely unchanged. The reverse is true when coffee prices decrease. This is why we focus on absolute dollar-adjusted EBITDA growth as the best measure of our performance.
Our Beverage Solutions segment contributed $173.5 million in net sales, which represents a year-over-year growth of 25%, and adjusted EBITDA of $15.9 million, which represents year-over-year growth of 39%. Our sales growth was driven by a 59% increase in single-serve cup volumes and higher underlying green coffee prices that were largely passed through to customers during the quarter. This growth was partially offset by a 9% decrease in roast and ground volumes. Broad-based inflation continues to impact both our sales, particularly in our restaurant and convenience store channels, and our operating margins as our labor and material costs continue to grow.
Despite these headwinds, our gross profit grew 9%, driven by a positive product mix shift, meaning sales of single-serve cups and extracts, which are our highest margin products in our portfolio, continue to represent a growing and greater percentage of our total sales. Despite growing dollar gross profit, our gross profit margins decreased by 310 basis points, largely driven by higher material costs, which we passed through as a component of both our net sales and our cost of goods sold. Our adjusted EBITDA growth was driven by the flow-through of increases in gross profit and reduction in SG&A, primarily related to personnel cost savings, partially offset by higher depreciation and amortization costs.
Turning to our Sustainable Sourcing and Traceability segment, or SS&T, sales net of inter-segment revenues grew 34% to $56.8 million in the third quarter of 2022, primarily driven by higher average green coffee prices. Our SS&T segment contributed approximately $2 million in adjusted EBITDA in each of the third quarters of 2022 and 2021. The SS&T segment continues to perform well through periods of complex supply chain and inflationary pressures, which speaks volumes for the leadership and the team we have in place. During the quarter, we incurred approximately $7.8 million in capital expenditures. Approximately $4 million was growth CapEx tied to single-serve expansion in our Little Rock, Arkansas facility and extract capacity expansion in our Concord, North Carolina facility, with the balance being spent on customer beverage equipment and maintenance.
Turning to our extract and ready-to-drink facility in Conway, Arkansas, we originally planned to build this facility in phases, with phase one costing between $180-$190 million in CapEx and generating between $50 million and $60 million of adjusted EBITDA once we are operating at planned capacities. By investing the additional equity capital we raised in our SPAC merger and improving our working capital utilization, we're able to pull forward into phase one the enhanced extraction and solubles capabilities and the additional packaging lines we had planned to install as part of phase two. This bringing forward of phase two will cost an additional $90-$100 million in CapEx and should generate incremental adjusted EBITDA in a range similar to our original expectations for phase one.
In October, we began making equipment deposits and expect to spend approximately $40 million of CapEx during the remainder of 2022 on the Conway facility. More importantly, we're assembling a world-class team of experienced manufacturing professionals to lead the build-out and ultimately the operation of the facility once it's commissioned. We're currently on schedule to begin producing and delivering products to customers from that facility in the first half of 2024. With respect to our balance sheet, at quarter end, we had approximately $266 million of unrestricted cash on hand and undrawn revolving credit commitments. Our consolidated net leverage ratio at September 30 was 2.1 based on third quarter annualized adjusted EBITDA. We believe that we have ample access to liquidity to achieve our near-term growth targets and capital expenditure needs.
Now I'd like to take a moment to discuss where we stand relative to our net sales and adjusted EBITDA guidance for the year. Our 2022 financial results have been impacted by three main factors. First, inflation generally, and more specifically, higher gasoline prices in July and August, had a significant negative impact on U.S. consumer spending, resulting in lower product sales in our away-from-home channels, particularly restaurants and convenience stores. We began to see this ease mid-August, leading to a more normalized sales volume in September. While this lift certainly helped to balance out the quarter, it was not sufficient to make up for lower sales earlier in the quarter. Second, it has taken us a little longer and cost a little more in terms of equipment, labor, and materials to absorb the 59% increase in single-serve cup volume we received in the third quarter.
The good news is that the volume of orders is as we expected, and as we continue to stabilize our growing single-serve platform, we feel very good about our ability to more efficiently monetize these increased product volumes. Third, our team has done an absolutely fantastic job of executing against our plan and managing costs in a high inflationary environment. Year-to-date through September 30, we've generated $640.1 million in net sales and $42.6 million in consolidated adjusted EBITDA. While this represents year-over-year growth of 26% in net sales and 29% in adjusted EBITDA, it's approximately $69 million in net sales and $8.4 million in adjusted EBITDA behind where we previously planned to be at the end of the third quarter.
Roughly half of our adjusted EBITDA shortfall is attributable to lower volumes in 2022, and roughly half of it is attributable to the natural lag that occurs as our higher material and production costs get pushed through to our customers pursuant to their respective pricing formulas over the next 2 to 4 quarters. Given the continued uncertainty of the macroeconomic environment, we are updating our outlook for the year and now expect to achieve net sales in a range of $850 million-$890 million and adjusted EBITDA in the range of $60 million-$63 million. While we are perhaps two quarters behind where we had planned on our short-term adjusted EBITDA expectations, the acceleration of capabilities we've announced today should allow us to continue to commensurately grow our adjusted EBITDA in 2025 and beyond.
With that, I'll hand the call back over to the operator for questions.
Thank you. To ask a question, you'll need to press star one one on your phone. Please stand by as we compile the Q&A roster. One moment please for our first question. Our first question will come from Chris Growe of Stifel. Your line is open.
What? Yes.
Hello. Good afternoon. How are you guys?
Hey, Chris, how are you doing?
Good. I'm doing great. Great, thank you. I just wanna get a little bit more update on your updated EBITDA expectations for the year. Just to better understand the pass-along feature of the higher costs. We always think of that as being, you know, kind of in line with the cost, but there is some lag, I guess, in that coming through, and that's causing some of the shortfall to date and then maybe some you expect also in the fourth quarter. Is that correct?
Yeah. Let me kind of walk you through the bridge. There are a couple of different factors at work. I think, first of all, the biggest influence is roast and ground volumes being down 7% year to date and 9% in the third quarter. If you look at our roast and ground coffee volumes, if you compare to last year, they're down. We've done a really good job of passing through higher material costs, and inflation has certainly had an impact on our performance this year. Our ability to be able to pass through those costs, we've done a very good job of being able to do that.
We're limited by the pricing formulas that we have with our customers in terms of timing, and so that does create some lag.
That's part of the story, but it's only a small part of it. The other thing at work is the single-serve cup volumes are up 59% year-over-year. While we didn't monetize everything we had planned to in the third quarter, as we continue to bring that platform or stability to that platform, we'll continue to see that flow through our financial results. If you look at the $75 million EBITDA guidance that we provided at the beginning of the year. When we got to the end of the first half of the year, we were probably $3 million behind where we thought we'd be at that point in the year.
Given the seasonality of the business and the growth expectations around the back half, $3 million that can easily be made up in the last six months of the year. We ended up about $4.5 million through the end of the third quarter, $8.4 million behind where we thought we'd be. That was largely driven by volumes offset by cost push-through and then the increased single-serve cup volumes. We think as we get to the end of the year, we'll finish somewhere between $60 million and $63 million.
Chris, those are the absolutely correct pieces. To go back to your initial question, is there a lag on the pass-throughs? There definitely is. It can be 6 months, it can be up to 12 months. Most of the time, coffee passes through on a quarterly basis, but several of the material components pass through on a 6- and 12-month basis.
Okay. Thank you for that.
Yep.
I guess just looking ahead then, you know, volume is one component of the weaker outlook, I guess. Obviously the lag, you'll pick that up. You know, as you look ahead to your expectations for coffee prices, which, you know, have been coming down a little bit, I guess that along with your volume outlook for the business, I just thought to get a little more sense of, you know, how much of those do you expect to contribute to the EBITDA performance over, say, the fourth quarter and the next year. Are we seeing any relief on the input cost side? Do you expect volumes to improve at all, I guess, is what I'm ultimately asking there.
Yeah. I can't make a prediction on volumes. They've been about the same pace behind. I think if you look at July with the higher gas prices and the impact of higher gas prices on the consumer, July was a bad month for coffee volumes. Other than that, it's been fairly stable, running about 5%-7% behind. I think in terms of the lower coffee prices, we're fixed out with our customers for 3-6 months in advance. In the short term, it's probably not gonna have an impact. But the lower coffee prices certainly create some incentives for our customers to come into the market and buy going forward. I do think we'll see a benefit of that in 2024 or 2023.
Seeing that in the fourth quarter of 2024 is probably not likely.
Okay. I appreciate your time today. Thanks for the color.
You bet.
Thanks, Chris.
Thank you. One moment, please, for our next question. Our next question will come from Ben Klieve of Stephens Inc. Your line is open.
Hey, good afternoon, everybody.
Hey, Ben.
I wanna ask about the decision to pull forward phase two, and the investment there. You guys had talked about robust demand and kind of the nature of the capacity you were building being oversubscribed, and hence we have a pull forward. Could you talk a little bit about the visibility of demand and utilization of the capacity and capabilities you'll be building as you made the decision to pull forward that investment?
Sure. First of all, let me go back and reset the context just briefly. On phase one in our investor deck, when we went public this last summer, we had talked about doing capital expenditures of roughly $180 million with the expectation that phase one would generate $50 million-$60 million of EBITDA. What happened after we made that announcement was a marvelous thing. We had a lot more demand for the products that are gonna be produced in phase one than we would have expected. We have already signed up under contract, so not just an LOI, but we've already signed up under contract roughly 70% of all of the production of phase one, and it doesn't even come online until 2024.
The demand for the remaining 20-30% that we have available is almost 2.5 times oversubscribed, and we are working through right now, frankly, trying to take care of as many of our customers in phase one as possible. As we were working through that in the dialogue with our customers, what became evidently clear was their demand for more than just can and glass bottle products as you move into the BIBs and ready-to-drink space was running as hot as their demand for can and bottles. We were encouraged to actually accelerate phase two, which is what those products were designed to be in. Phase two is essentially $100 million more in CapEx and should generate as much EBITDA as phase one once fully sold and fully brought online.
We have actually started to work on the implementation of phase two now, and we're entering planning for phase three. Now, we're talking about bringing five-year forward CapEx into the next two years. We are accelerating our five and seven-year capital plans into the next two or three simply because we can sell it all under largely take-or-pay contracts now. That's the overall picture that we're looking at, and it is materially better once those various packaging and extract lines come on than we have previously contemplated.
Okay, that's great. If I could shift gears a little bit to the acquisition you announced today. From your comments, the transaction is gonna be funded entirely with stock or equity. Are there any terms that you can provide us with, whether it be valuation and/or earnings contribution, as well as maybe a little. If you could expound upon kind of the nature of the business, and how you guys came to get linked up with them.
Yeah, sure. Well, this is a business run by Jonathan and Steve Reinemund, and it is just a fabulous set of products that they developed over the last year or two, where they have developed a strong following in major retailers and CPG brands, other coffee companies. They serve the kinds of markets that we do in that space. I'll let Chris take you through the actual numbers of it. The thing that we saw was not only a great partnership with the Reinemunds, but the ability to pick up two extract lines, one of which was gonna be different than anything we were gonna do in the type of bottle that it is. The second one was a small specialty can line.
I mean, it's not small, but it relative to what we're doing in Conway, I guess it is. We always had as a plan in phase two or three, a specialty can line, and instead of putting it in Conway, we're going to do it in Kohana's facility in California. We're gonna make capital expenditures of $ a few million, which will allow us to nearly triple that capacity. Just like in Conway, all of that capacity, even the tripling of it that won't happen until over the next 4-6 months, it's already spoken for. What this does, it gives us a new set of products with new blue chip customers that we can bring onto our platform that might buy these kinds of products and the other products that we make for this type of customer.
It does it in a fashion that's, you know, 12-18 months sooner than we could have gotten these stood up in Conway. That's what it is and why we're doing it. We're thrilled to have the Kohana team join us. We're thrilled to be able to pick up the products that they make, the customers they have, and then start to introduce them to the other products we make, and it accelerates the timeline. Chris, you wanna walk him through the numbers?
Yeah. Just in terms of the purchase price, the overall purchase price for Kohana is $34.5 million. About $18.5 million of that is the equity portion of the initial investment that's getting rolled into Westrock Coffee Company stock. Then the balance of that is the extinguishment of debt on the company and then about $3.5 million of transaction fees associated. It's a combination of equity and cash, but the equity portion of the base business is rolling into Westrock stock.
Okay, perfect. Thanks. I'll hop back in the queue.
Thank you. Can we please follow our next question? Our next question will come from Todd Brooks of The Benchmark Company. Your line is open.
Hey. Good evening, everybody.
Hey, Todd.
Quick follow-up question on Kohana, if I can. I think, Scott, in your comments, you talked about, and you guys talked about this, during the deal process as well, the ability to build a bridge to a kind of capacity that allows you to unlock some of the CPG demand that is coming with Conway. Can you talk about maybe Kohana as that unlock for you to be able to start to service some of these customers earlier and maybe talk to their capacity picture if they had incremental capacity that you guys are gonna be able to utilize now in place, or if it's gonna require the CapEx that you talked about? I have one follow-up afterwards.
Yeah, sure. Thank you, Todd. The short answer is, when we started working with them a few months ago, there was a reasonable amount of capacity left available in the line that they have. They have actually done a really nice job of filling that up. As companies that are in the ready-to-drink coffee space have been looking around for capacity, the Kohana team did a really nice job of lining some of that up, and they have essentially, on their own, filled their own capacity. The $3 million-$5 million in capital that we're gonna spend to triple their can line capacity, we have customers that will fill that up.
They are some of our blue chip, serious large CPG brands that are in multiple other platforms with us, not cans, obviously, because we don't do cans yet, that need cans, and this is a runway for us to bring them on literally 18 months sooner than we were gonna be able to, which is a material and important thing for some of our top customers. That's why we were looking around at the Kohana acquisition. As we got into it, we said, not only is it a really nice investment where we have great certainty about the multiple we're paying on a forward basis because we're bringing the customer set to fill the facilities. Those were facilities we weren't gonna put on a specialty can line until deep into phase two.
Our customers have been thrilled with the acceleration of timing for them.
That's great. That's helpful. Thanks, Scott. I don't know if there's a way to tackle this because a lot's changed. We have the inflationary pressures this year and the new thinking around
2022 EBITDA guidance, but we have the Kohana acquisition, we have the acceleration of phase two at Conway. I don't know if you can qualitatively or even quantitatively tackle kind of that forward projection of what these steps have done to accelerate the EBITDA base as we start to look a couple of years out.
Yeah. No, it's a great question, and it goes to the heart of, well, what window of time do you wanna look at, right? About 90% of the common stock in Westrock is owned by people that we know the first and last names of, all of whom are looking at a 3- to 7-year window to ride this phenomenon. It's nothing short of a phenomenon in the coffee ready-to-drink space. The fact that gasoline went to $6 this summer was unfortunate. The fact that 30% fewer, according to industry, articles that were written of people that had to stop and get gas, 30% fewer even went into the store, right? $6 gasoline is a serious stressor in the average, family's life in terms of what they can afford beyond gas to buy.
We watched them trade down which restaurant they went to. We watched them hunt through what's the average meal ticket per person. We watched them buy smaller and smaller packages at retail. They started at a 100 count, they went to a 50 count, they ended up at a 12 count. They were doing everything they could to stretch their wallets, you know, in the July, August, September timeframe when gas was really high. Now, all of that is understandable. It's straightforward. Chris walked you through the details. Some of that will pick back up over the next 4-6 quarters as we reprice costs through people's contracts.
All of which, if you're looking at it the way I do, and I don't mean this in any, you know, kind of grandiose way, but if you're looking at the business for what you think it can be over the next 3 to 5 years, it's kinda all immaterial. Because what we're talking about in phase one is as big as an EBITDA generator as our whole business is today. Phase two is bigger than that. Phase three is as big as phase one and phase two combined. We're talking about 10 years of EBITDA growth, we're gonna pull into about 3 or 4. If what gas prices did in July is what, you know, you wanna focus on, I get it.
There are investors who don't wanna own the stock long term and are looking at specific short-term issues, boy, they've got some to pick on. No running away from it. If you think that it has at all changed what we're trying to accomplish, and you look at the contracts that the largest coffee brands in the world are signing with us today for the needs that they have, it is irrelevant and gonna be unfindable on a five-year basis. Depending on who the audience is, I'm glad to have either conversation.
That's great. Thanks, Scott. Appreciate it.
Thank you. One moment please for our next question. Our next question will come from Sarang Vora of Telsey Advisory Group. Your line is open.
Thank you. Thank you, guys. Great good news in the release. Let me start with the first on the fourth quarter. You know, the downtick in guidance that you talked about, Chris, how much of that is more about SS&T business because the commodity prices are coming down versus the beverage solution? I know there's a volume that impacts the beverage solution, but just curious to know, like, if you could help us understand, like, you know, is it more about the commodity prices, more about the volume? Just curious to know.
No, it's more about the volume in Beverage Solutions. The SS&T business has really kind of chugged along this year exactly where we expected it to be in terms of the kind of financial performance. I think it's all around volume and Beverage Solutions.
That's great. You know, when it's great to see the acceleration in phase two, but you know, as you start, like, you know, the process of ordering the equipment, are you seeing any supply chain issues with the manufacturing right now, or you still remain on track for opening in the first half? The phase two, will it also open along with in 2024, or will it be a 2025 end, the phase two opening? Just curious.
We are at this moment in time on time and on budget for first half of 2024 opening of Conway. Roughly 70% of all of that original phase one volume is under contract. We are opening phase two marketing officially this afternoon after this call. Most of that will come on in late 2024, so you won't see it impact the 2024 numbers, but you will see in 2025 and 2026 EBITDA that under our original thinking, which was all outside of the guesstimates we had to do over the three-year forecast period for our filings, we're talking about EBITDA that we expected to bring on in maybe 2027, 2028, 2029. We're talking about bringing some of that on now in 2025, 2026.
It is additive to the 256 numbers as those assets come on late 2024 is our current thinking. The other material thing in Conway, and we put out a smaller press release on this last week, is that we have brought in two really world-class manufacturing executives, including to be the VP & GM, if you will, of the Conway facility. We went out after the world's finest plant operating leader in the ready-to-drink space that had done these exact products for these exact types of customers in the can and bottle and extract world. Cedric Smith joined our team about six weeks ago now, previously with another firm that did similar kinds of canning and bottling. Nicolas Lorenz has joined us from a large plastic operation in Germany.
He is a world-class seasoned executive, and those two guys are now putting together the team. We've got about a 10 or 12-person senior leadership team in Conway from quality, product development, safety, et cetera, and they're putting that team together. All of that is on time and on schedule as well right now, and we are thrilled to have those two guys and several people that they're bringing on board already.
That's great. Good luck with the progress.
Thank you. I see no further questions in the queue. I would now like to turn the conference back to Scott Ford for closing remarks.
All right. Well, we appreciate your interest. We appreciate your support. We'll be around to follow up with questions through the normal course. I think we're gonna be at the Stephens Conference in Nashville on Wednesday, and we look forward to conversations with you as we go into the end of the year. Thanks so much.
This concludes today's conference call. Thank you all for participating. You may now disconnect and have a pleasant day.