Brc Inc. · NYSE:BRCC
Brc — Black Rifle Coffee Company — Investor Day (January 2022)
59 slides from Brc's investor day presentation, Jan 11, 2022
Slide 1: Analyst and Investor Day Presentation
ANALYST AND INVESTOR DAY PRESENTATION COFFEE January 11, 2022 CONTENT COMMUNITY
Slide 2: Disclaimer
DISCLAIMER Disclaimer This investor presentation (this “Presentation”) is for informational purposes only to assist interested parties in making their own evaluation with respect to the proposed business combination (the “Business Combination”) among SilverBox Engaged Merger Corp I or one or more of
Slide 3: Disclaimer (Cont'd)
DISCLAIMER (CONT’D) Non-GAAP Financial Measures This Presentation includes projections of certain financial measures not presented in accordance with generally accepted accounting principles (“GAAP”) including, but not limited to, EBITDA, EBITDA Margin, Adjusted EBITDA, Adjusted EBITDA Margin, Gross
Slide 4: Executive Summary
EXECUTIVE SUMMARY Black Rifle Coffee Company 3
Slide 5: The Team
THE TEAM Black Rifle Coffee Company SilverBox Engaged Merger Corp I Evan Hafer Tom Davin Greg Iverson Toby Johnson Joe Reece Chief Executive Co-Chief Chief Financial Chief Operating Executive Officer and Founder Executive Officer Officer Officer Chairman Founder, visionary, Experienced CEO Financial
Slide 6: We Are America's Coffee
WE ARE AMERICA’S COFFEETM 1 ROASTED IN THE USA 2 VETERAN CONTROLLED Our Mission Black Rifle Coffee Serves Premium Coffee and Content to Active Military, 3 ~50% OF EMPLOYEES Veterans, First Responders, ARE VETERANS OR VETERAN SPOUSES and Those Who Love America Black Rifle Coffee Company 5
Slide 7: Our Commitment to Veterans
OUR COMMITMENT TO VETERANS $3M+ $1.2M+ 10,000 of coffee will be will be given to Veterans donated to military charitable Black Rifle Coffee and first responder organizations in 2021 long-term hiring goal units in 2021 selects local heroes annually and donates Black Rifle Coffee and SBEA Will Togethe
Slide 8: Why We Believe BRCC Is a Great Investment
WHY WE BELIEVE BRCC IS A GREAT INVESTMENT BRCC Key Metrics Authentic and Passionate Focus on Company Mission • Company mission drives customer loyalty and employee retention Experienced management team dedicated to the company’s mission 78 • Net Promoter Score2 • 530,000+ shares to be donated to the
Slide 9: Strong Financial Profile
STRONG FINANCIAL PROFILE Revenue Growth & Profitability Underlined by Strong KPIs Net Sales ($ in millions) 37% CAGR $430 1.9M+ 67% Cumulative Customers $311 and Growing CAGR $230 $164 $82 285K+ Active Coffee Club Subscribers 2019A 2020A 2021E 2022E 2023E Gross Profit Top 4 ($ in millions) RTD Coffe
Slide 10: What We Do
WHAT WE DO MISSION-DRIVEN HIGH QUALITY DIGITALLY NATIVE LIFESTYLE BRAND COFFEE & PRODUCTS OMNI-CHANNEL Devoted to cause- Great coffee that Omni-channel related content that consumers love, and business model with INFORMS, INSPIRES, high-quality branded experiences ENTERTAINS, and merchandise that th
Slide 11: Large and Loyal Social Media Following
WE HAVE A LARGE AND LOYAL SOCIAL MEDIA FOLLOWING THAT LOVES INTERACTING WITH OUR CONTENT (1) 3.7B+ 8 11.1M Social Media Impressions(2) 7 7.9M 6 3.1M 5 2.9M 4 1.8M 3 1.7M 2 0.6M 1 0.4M Facebook Instagram Twitter TikTok YouTube Note: Social Media Followers by Brand as of November 30, 2021. 1. Includes
Slide 12: Recent Partnerships
RECENT PARTNERSHIPS TRAVIS PASTRANA TIM KENNEDY SPARTAN RACE • Renowned action sports icon • Green Beret, former UFC MMA Fighter • BRCC activations and participants at 10 U.S. events in 2022 • Six-time X Games Gold Medalist • CEO Sheepdog Response 4.1M 6.7M 1.5M 1.1M 600K 122K 739K 5M 112K Followers
Slide 13: Our Customers Love Black Rifle Coffee Company
OUR CUSTOMERS LOVE BLACK RIFLE COFFEE COMPANY February 2021 Net Promoter Score1 “Great flavor on all blends.. Far superior to SBUX, Green Mountain, Dunkin' and other brands..”2 83 78 67 December 2020 “Proud and humble to be part of what you're doing here! America should do so much for our brave vets
Slide 14: Mission and Quality Drive Customer Retention
SUPPORT FOR OUR MISSION AND OUR PREMIUM QUALITY COFFEE DRIVE EXCEPTIONAL CUSTOMER RETENTION Top Reasons Our Consumers Purchase Black Rifle Coffee1 Support for Military / Veterans 84% Great taste / smell 68% A brand that shares my values 59% Flavor variety / uniqueness 45% Buying directly from websit
Slide 15: Powerful Omni-Channel Strategy Drives Growth
POWERFUL OMNI-CHANNEL STRATEGY DRIVES GROWTH DTC Outposts Revenue Mix 2% 14% 2020A 84% Wholesale Wholesale RTD Coffee/Merchandise 21% 46% 2023E 33% DTC Wholesale Outposts Black BlackRifle RifleCoffee CoffeeCompany Company 14
Slide 16: Large Market Opportunity
LARGE MARKET OPPORTUNITY… BRCC Serviceable Addressable Market1 $28B+ $14B $45B+ U.S. Coffee Market $28B+ Black Rifle Coffee Company $4B Serviceable Addressable Market $10B $0.3B 2022E Revenue At-Home RTD Out-of-Home S.A.M. Source: BRCC Management, Stax Market Study. Black Rifle Coffee Company 15 1.
Slide 17: Proven Ability to Reach a Broad, Diverse Audience
…WITH PROVEN ABILITY TO REACH A BROAD, DIVERSE AUDIENCE… ...FROM COAST TO COAST Black Rifle Coffee Company’s Rank Market …And Reflects Highly (2020 DTC Customer Base Reaches All Sales) 1 (MSA) Attractive Demographics Geographies…1 1 New York – Newark – Jersey City 2 Dallas – Ft. Worth – Arlington 3
Slide 18: Three-Pronged Strategy to Craft a Unique Brand
BLACK RIFLE COFFEE COMPANY UTILIZES A THREE– PRONGED STRATEGY TO CRAFT A UNIQUE BRAND Inspire Entertain “We take pride in the coffee we roast, “The entertain vertical is probably the first thing they think of when the Veterans we employ, and the they think “Black Rifle Coffee Media.” It’s the irreve
Slide 19: Focus on Delivering Highest Quality Coffee
FOCUS ON DELIVERING LOYAL AND ENERGIZED HIGHEST QUALITY COFFEE CONSUMER BASE DRIVES SIGNIFICANT MERCHANDISE SALES1 Medium Hats Accessories Drinkware Light Roast Dark Roast Roast Cold Brew 11 oz. RTD 15 oz. RTD Shirts Hoodies Equipment Packs Instant Rounds Women’s Blankets Thermoses Coffee Note: Prod
Slide 20: Highest-Quality Products That Deliver on Taste
FOCUS ON HIGHEST-QUALITY PRODUCTS THAT DELIVER ON TASTE AND DRIVE BRAND LOYALTY PREMIUM SUPERIOR ROASTED IN- QUALITY FLAVOR HOUSE DAILY Superior Coffee +18%1 Owned Roasting Premium Arabica Beans All of our beans have an Black Rifle Coffee’s Average Outperformance vs. Peers on Facility 83-Point grade
Slide 21: Deep, Talented Leadership Team
DEEP, TALENTED LEADERSHIP TEAM WITH EXTENSIVE EXPERIENCE Evan Tom Greg Mat Toby Kim Dan Hafer Davin Iverson Best Johnson Ellis Kaepernik CEO / Founder Co-CEO CFO Exec. Vice COO Head of VP of Retail President Development Operations Seasoned Founder, Leads long- Builds and Head of real strategic leade
Slide 22: Commitment to Diversity
COMMITMENT TO DIVERSITY • BRCC has won the 2021 LinkedIn Diversity Champion Award for companies under 1,000 employees 2021 Talent Awards • We at BRCC appreciate the value of diversity across our organization and seek out diverse voices to join our mission • Veterans are a diverse group, and it’s wha
Slide 23: Growth Strategy
GROWTH STRATEGY Black Rifle Coffee Company 22
Slide 24: Multiple Growth Vectors with Detailed Tactical Plans
MULTIPLE GROWTH VECTORS WITH DETAILED TACTICAL PLANS 1 2 3 4 Continue Growing Experiential Retail RTD and New Expansion of Our DTC Business (“Outposts”) Product Innovation Wholesale West Distribution Midwest Northeast ~11% ~16% ~3% 45%+ 100K+ ~5K Cash-on-Cash Returns Points of Distribution Potential
Slide 25: Leading Coffee Subscription Model with High Retention
LEADING COFFEE SUBSCRIPTION 1 MODEL WITH HIGH RETENTION Monthly Churn Rates1 ~10% ~3%-4% ~2% Industry 285k+ Average2 active coffee club subscribers BRCC’s subscription service provides a recurring revenue stream with strong customer retention relative to other subscription businesses3 >4x attractive
Slide 26: Brand Awareness Presents Significant Growth Opportunity
BRAND AWARENESS 1 PRESENTS SIGNIFICANT Awareness Building GROWTH OPPORTUNITY Targeted By Audience West Northeast ~11% Midwest ~3% 64M 42M 18M 7M 131M ~16% California South ~5% ~12% Texas ~16% 11M 10M 2M 2M 26M Military/ 2nd Mission Law Total = 0% – 10% = 10% – 12% Veteran Amendment Aligned Enforceme
Slide 27: BRCC Outposts Are Redefining the Brand Experience
BRCC OUTPOSTS ARE REDEFINING THE BRAND 2 EXPERIENCE Outpost Highlights Unit Economic Benchmarking3 $12 to $13 ~48% / ~52% AUV - $000 $3,020 Average check Merchandise / Beverage & ~$2,500 $2,223 Food Sales Mix $1,524 $1,489 $1,455 $1,275 $969 45%+ ~$1.4M Cash-on-Cash Returns1 Cost to Build2 BRCC 4-Wa
Slide 28: Outpost Overview
OUTPOST OVERVIEW 2 Immersive In-Store Environment Builds a Community And Broad Array of Merchandise Enables Consumers to Live the Brand Source: BRCC Management. Black Rifle Coffee Company 27
Slide 29: Long Runway for Outpost Expansion
LONG RUNWAY FOR OUTPOST EXPANSION 2 Priority Markets Outpost Growth – Management Forecast Total Long-Term Target by 78 Addressable Outpost 2023 Franchise Population Potential1 Corporate 25 Phoenix, AZ 5.1 mm 13 40+ 36 Dallas- 7.3 mm 13 40+ 13 53 Ft. Worth, TX 16 4 8 23 Houston, TX 6.2 mm 9 40+ 8 202
Slide 30: Case Study: 40+ Opportunities in Phoenix
CASE STUDY: 40+ OPPORTUNITIES IN PHOENIX 2 Market Overview • JLL initial market analysis completed in February 2021 Represents potential outpost locations • Broker retained February 2021 • JLL analytics updated August 2021 • 42 trade areas identified, 4 leases executed, and 8 leases in the pipeline
Slide 31: Significant Opportunity in Ready-to-Drink Product
SIGNIFICANT OPPORTUNITY 3 IN READY-TO-DRINK PRODUCT $4B+ Current RTD Product Portfolio Addressable market1 0 to 40,000 All 4 SKUs Doors in BRCC distribution In the top 25 RTD SKUs 11 oz. in less than 2 years ($/%ACV) despite being introduced less offerings than 2 years ago <20% Penetration Top 4 Bra
Slide 32: RTD Expansion & Retail Pipeline
RTD EXPANSION & RETAIL PIPELINE 3 Selected National Long-Term Potential Distribution Retail Accounts ~10x 375k FDM C-Store ~2x 73k 40k BRCC Existing Customers' Total Current Doors Potential Doors Potential Doors Recent Customer Wins 22% 17M+ $24.2M 40K ACV for 11oz RTD1 Cans by 2021E In TTM RTD Door
Slide 33: Illustrative Growth Potential in SKUs
ILLUSTRATIVE GROWTH POTENTIAL IN SKUs 3 2 SKUs, 2 Facings 4 SKUs, 4 Facings 6 SKUs, 8 Facings Initially, both 11oz. SKUs Two 15 oz. SKUs added, Two new SKUs introduced; two with one facing each each with one facing SKUs receive second facing Case Study: Growth in VPO / SKU in National Chain, > 400 D
Slide 34: Wholesale Coffee and Merch Products Expanding Nationwide
WHOLESALE COFFEE AND 4 MERCH PRODUCTS Existing Outdoor, DIY & Lifestyle EXPANDING NATIONWIDE Chains Partnership Examples 3x+ ~7,200 2,200 Rapidly expanding reach in retail through unique coffee products and merchandise1 Doors at end of 2021 Potential doors with existing customers Source: BRCC Manage
Slide 35: Omni-Channel Flywheel in Action: San Antonio
BRCC’S OMNI-CHANNEL FLYWHEEL IN ACTION: SAN ANTONIO At Home On-the-Go San Antonio Market: 2023E Direct-to-Consumer C-store & Mass Example C-Store / Wholesale Partners Highest Likelihood BRCC Customers BRCC Outpost target location San Antonio Market Significant overlap Revenue Outlook ($M) of Outpost
Slide 36: Enhancing the Digital Omni-Channel Experience
INVESTING TO FURTHER ENHANCE THE DIGITAL OMNI–CHANNEL EXPERIENCE Creating a Fulsome Digital Experience • Integrated Loyalty and gift card programs across retail and digital channels • Fully integrated Retail Experience o Order-ahead capabilities o In-store DTC subscription management o Order online,
Slide 37: 2021E-2023E Revenue Growth by Channel
ADDING IT ALL UP: 2021E-2023E REVENUE GROWTH BY CHANNEL ($ in millions) ~37% CAGR $78 $430 $87 Outpost builds $36 $230 New doors, Steady growth new retailers off substantial and new SKUs customer base 2021E Revenue DTC Wholesale Outposts 2023P Revenue Expansion of wholesale and unit growth of high-r
Slide 38: Financial Overview
FINANCIAL OVERVIEW Black Rifle Coffee Company 37
Slide 39: Efficient and Profitable Omni-Channel Model
EFFICIENT AND PROFITABLE OMNI-CHANNEL MODEL Revenue ($ in millions) Revenue Mix 2% 51% CAGR $430 14% $89 $311 2020A $37 $142 $230 84% $12 $91 $164 $55 $23 $3 $82 $199 $8 $163 $184 $138 $74 2019A 2020A 2021E 2022E 2023E 21% 46% ’20A – ’23E 216% Outposts 82% Wholesale 13% DTC 2023E CAGR 33% • Total 20
Slide 40: Expanding Consumer Touchpoints Across the U.S.
EXPANDING CONSUMER TOUCHPOINTS ACROSS THE U.S. DTC Subscribers (000’s)1 RTD Doors1 100,000+ ~325+ 75,000+ ~305+ 285 40,000 252 10,600 2020A 2021A 2022E 2023E 2020A 2021A 2022E 2023E Outposts1 Wholesale Doors1 3,600+ 78 Franchise 25 2,700+ Corporate 2,200 36 13 53 16 1,161 4 8 23 8 2020A 2021A 20
Slide 41: Leverage Highly-Efficient Marketing
OPPORTUNITY TO LEVERAGE BLACK RIFLE COFFEE’S HIGHLY- EFFICIENT MARKETING Future 70% Marketing Website Sales From • Mapping the customer journey Owned Sources Historical • Website and mobile app revamp Marketing • Centralizing loyalty programs and subscriptions • Primarily focused on digital • Mobile
Slide 42: Investing to Support Growth
INVESTING TO SUPPORT GROWTH CapEx ($ in millions) $54 $61 million of Outpost capex in 2022 and 2023 $13 combined creates ~$110 million of first year high margin revenue Strong cash-on cash returns of 45%+ on Outpost $34 investment Other capex in 2021-2023 predominantly relates $13 to building
Slide 43: BRCC Growth and Profitability Over Time
BRCC GROWTH AND PROFITABILITY OVER TIME 2021E 2022E 2023E At Scale Revenue Growth 40% 35% 38% ~30% Gross Profit Margin 40% 41% 44% ~45% Adjusted EBITDA Margin NM NM 4% ~20% Note: BRCC financial projections provided by the Company. Black Rifle Coffee Company 42 42
Slide 44: Benchmarking Long Term Margin Potential vs Peers
BENCHMARKING BRCC LONG TERM MARGIN POTENTIAL VS PEERS RTD and restaurant peers show material margin improvements as scale is achieved over time 1 2 Unit Count3 Revenue ($ in millions) 229 305 409 489 581 $904 $823 $628 $606 $471 $349 $316 $180 $205 $110 FY2003 FY2004 FY2005 FY2006 FY2007 FY2002 FY20
Slide 45: Expertise to Drive Supply Chain Effectiveness
EXPERTISE TO DRIVE SUPPLY CHAIN EFFECTIVENESS New to BRCC Toby Johnson Manny Pineiro Stanley Soebianto* Jack Nadeau* Ben Richey Team in 2021 COO Supply Chain Coffee Capability & Manufacturing FD&T Operations Sourcing Builds and leads revenue Deepens coffee Builds internal and Optimizes fulfillment,
Slide 46: Near Term Margin Improvement Opportunities
NEAR TERM MARGIN IMPROVEMENT OPPORTUNITIES Sourcing Manufacturing Fulfilment Shipping Engage more deeply in Improve parcel efficiency Optimize distribution nodes green bean value chain to Invest to automate internal and LTL consolidation while to service customer heat extract value while coffee manu
Slide 47: Conclusion
CONCLUSION Black Rifle Coffee Company 46
Slide 48: Black Rifle Coffee Company: America's Coffee
BLACK RIFLE COFFEE COMPANY: AMERICA’S COFFEETM LOYAL AND GROWING PROVEN OMNI-CHANNEL COMMUNITY FLYWHEEL • Mission-driven, lifestyle brand • Digitally native • In-house content driving massive • Leading coffee subscription program social following • Premier specialty retail partners • Broad geographi
Slide 49: Appendix
APPENDIX Black Rifle Coffee Company 48
Slide 50: Leading Sponsorship and Full Alignment
LEADING SPONSORSHIP AND FULL ALIGNMENT Fully Financed Transaction With Innovative Backstop Structure SBEA: INSTITUTIONAL SPAC PLATFORM and Alignment • Formed based on a shared vision between SilverBox Capital and • $300 million in commitments (@ $10.00/common share), led by $100 Engaged Capital with
Slide 51: Transaction Highlights
TRANSACTION HIGHLIGHTS Fully Financed Transaction from $300 million of Common Equity Sources ($ in millions)1 Commitments From Innovative Backstop Structure SBEA Cash in Trust $345 • $300 million in commitments (@$10.00 / common share), led by $100 million Engaged Capital FPA 100 commitment from Eng
Slide 52: BRCC Highlights: Defining the Opportunity vs Peer Group
BRCC HIGHLIGHTS: DEFINING THE OPPORTUNTY VS PEER GROUP 1 Powerful mission-led lifestyle brand with loyal customer base and broad appeal in coffee and beyond 2 Scalable, omni-channel platform with strong subscriber base and significant “white space” to expand brand reach throughout $45B+ TAM 3 Multip
Slide 53: Operational Benchmarking
OPERATIONAL BENCHMARKING HIGH GROWTH FOOD & BEVERAGE DTC LIFESTYLE BRANDS CY 2023E Revenue Growth 52.2% 51.1% Median: 28.5% Median: 21.7% 38.2% 31.9% 29.2% 31.5% 27.9% 26.1% 25.0% 21.7% 15.4% 15.5% 10.1% 13.9% CY 2022E Revenue Growth 35.4% 59.5% 59.7% 27.9% 37.6% 30.9% 30.3% 16.7% 10.3% 32.5% 26.2%
Slide 54: Valuation Benchmarking
VALUATION BENCHMARKING HIGH GROWTH FOOD & BEVERAGE DTC LIFESTYLE BRANDS Enterprise Value / CY 2023E Revenue 9.1x 7.7x Median: 6.0x Median: 5.6x 7.3x 6.8x 6.5x 5.8x 5.6x 5.3x 4.0x 3.5x 3.0x 2.6x 1.9x 1.8x 1 Enterprise Value / CY 2022E Revenue 5.5x 11.7x 8.9x 8.1x 10.3x 6.7x 3.8x 3.9x 2.5x 8.5x 6.6x 7
Slide 55: Financial Summary
FINANCIAL SUMMARY Summary P&L 2019A 2020A 2021E 2022E 2023E ($ in millions) DTC 73.6 137.7 163.2 184.2 199.4 Wholesale 7.7 23.4 55.3 90.6 141.9 Outposts 0.8 2.8 11.5 36.6 89.1 Total Revenue $82.1 $163.9 $230.1 $311.4 $430.4 (%) Growth 99.6% 40.4% 35.4% 38.2% (-) COGS ($46.4) ($94.5) ($138.4) ($182.8
Slide 56: EBITDA Adjustment Detail
EBITDA ADJUSTMENT DETAIL Fiscal Year ($ in millions) 2019 2020 2021E 2022E 2023E Net Income (0.8) 4.3 (12.1) (11.6) 1.2 1 Reflects non-cash equity compensation paid Interest Expense 0.7 1.0 1.9 1.1 0.9 to our employees and a wholesale partner under a marketing services agreement. Tax Expense 0.0 0.
Slide 57: Summary Key Risks
SUMMARY KEY RISKS Risks Related to the Company’s Business • The Company’s success is dependent upon evolving consumer preferences and tastes, and shifts in consumer spending, lack of interest in new products, or changes in brand perception can negatively affect consumer demand for the Company’s prod
Slide 58: Summary Key Risks (Cont'd)
SUMMARY KEY RISKS (CONT’D) Risks Related to the Company’s Business (Cont’d) • The Company's results of operations are subject to seasonal and quarterly variations, which could cause the price of our common stock to decline. • The Company must maintain adequate operational and financial resources, es
Slide 59: Summary Key Risks (Cont'd)
SUMMARY KEY RISKS (CONT’D) Risks Related to Public Company • The Company’s management team has limited experience managing a public company. • It is possible that the Company’s internal control over financial reporting is not effective because it cannot detect or prevent material errors at a reasona
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