Brc Inc. · NYSE:BRCC
Brc — 26th Annual ICR Conference (January 2024)
26 slides from Brc's conference presentation, January 2024
Slide 1: ICR Investor Presentation
ICR Investor Presentation January 2024
Slide 2: Disclaimer
DISCLAIMER Disclaimer This investor presentation (this “Presentation”) is for informational purposes only. The information contained herein does not purport to be all-inclusive and none of BRC Inc. (“the Company”) or its respective affiliates makes any representation or warranty, express or implied,
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, Adjusted EBITDA, and Adjusted Gross Margin. These non-GAAP fi
Slide 4: Today's Presenters
TODAY’S PRESENTERS Chris Danya Chris Steve Mondzelewski Kennedy Clark Kadenacy President and Chief Executive Officer Chief Revenue Officer Chief Operating and Technology Officer Chief Financial Officer Our Team Has Deep Experience Operating Worldclass CPG Businesses. 4
Slide 5: Our Four Pillars of Brand Identity
OUR FOUR PILLARS OF BRAND IDENTITY Black Rifle Stands For More Than High-Quality Coffee Veteran Founded Authenticity Matters Premium Positioned Community Focused We carry the culture of those Our brand represents and is Curated; We stand for the communities we serve including an embraced by those wh
Slide 6: Today's Content
TODAY’S CONTENT TOPLINE GROWTH 1 Fastest growing coffee company in the US with significant opportunity still ahead¹ OPTIMIZING GROSS MARGIN 2 Focused on several margin-improving initiatives to align with best-in class CPG businesses HEALTHY BOTTOM LINE 3 Our SG&A has been realigned for sustainable g
Slide 7: Topline Growth
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Slide 8: A Proven Omni-Channel Business Model
A PROVEN OMNI-CHANNEL BUSINESS MODEL WHOLESALE Revenue Mix FDM Convenience & Gas 5% 24% 2021A 71% Direct to Consumer (DTC) Outposts 6% 33% 3Q23 61% Wholesale DTC Outposts Black Rifle Coffee 8 Company
Slide 9: We Have a Large Addressable Market and Runway for Growth
WE HAVE A LARGE ADDRESSABLE MARKET AND RUNWAY FOR GROWTH We are meeting our customers where they shop U.S. POPULATION AGES 18-64: 203 MILLION PEOPLE BRCC ADDRESSABLE MARKET: 57% 115M+ Total Addressable Market 12.5M+ Owned Audience 2.4M+ Cumulative Customers and Growing, with 231K+ Active Coffee Club
Slide 10: We Are Outpacing the FDM Category Growth
WE ARE OUTPACING THE FDM AND WE SEE SIGNIFICANT CATEGORY GROWTH RUNWAY TO GROW FDM MUCH FURTHER Total xAOC Total Grocery BRCC xAOC Tremendous runway for ACV growth ahead 263% BRCC xAOC BRCC Grocery 36.9 103% 28.9 64% %ACV 16.9 .1 2% 3% 2% 3% Dec 22 - 5 w/e 12/31/22 Apr 23 - 4 w/e 04/29/23 Nov 23 - 4
Slide 11: In Year One, We've Built a $100M+ FDM Business
IN YEAR ONE, WE’VE BUILT A $100M+ FDM BUSINESS BRCC has a We are the We’ve risen to the 4.3 Share #4 Brand #6 Brand of coffee in our largest mass in bagged coffee in 12oz. ground coffee at our partner at our largest mass partner largest grocery partner Source: Nielsen 12-2-23 MASS SKUs (35 core) GRO
Slide 12: RTD Is an Explosive Yet Still Nascent Business
RTD IS AN EXPLOSIVE YET STILL NASCENT BUSINESS RTD Represents a Massive Growth Opportunity, RTD And We Have Runway To Improve and Execute HIGHLIGHTS • In March 2020, we launched RTD coffee products with two 11 oz. SKUs and have since added another 11 oz. SKU and three 15 oz. ones • Four of our SKUs
Slide 13: We Are a Digitally Native Brand
WE ARE A DIGITALLY NATIVE BRAND We have the largest coffee subscription in the world. It has been a strategic enabler to make BRCC a large and fast-growing beverage brand, and we aim to build from this channel to meet the shifting needs of our coffee consumers The Coffee Club DTC HIGHLIGHTS • Subscr
Slide 14: Growth Engine for 2025 and Beyond
GROWTH ENGINE FOR 2025 AND BEYOND 18 Company-Operated Outposts 17 Franchised Outposts $22.9M / 91% Sales Generated in FY2022 / YoY Growth We are currently building a plan to accelerate retail growth with strong unit economics and Return on Capital in 2025 and beyond 14
Slide 15: Optimized Gross Margin
OPTIMIZED GROSS MARGIN
Slide 16: We Are Optimizing Gross Margin
WE ARE OPTIMIZING GROSS MARGIN Our target long-term margins are in excess of 40% We are focused on optimizing our Without non- gross margins by: standard items in Q3 2023 our gross margin was 36.8% Mix between channels 35.7% 36.8% and products 35.0% 35.1% Distribution and 33.9% Logistics 33.0% 31.7%
Slide 17: The Pathway for Increased Gross Margin Is Clear
THE PATHWAY FOR INCREASED GROSS MARGIN IS CLEAR 40+% Inflation Sourcing Manufacturing Distribution and Logistics LONG Channel and TERM 2023 Product Mix GROSS GROSS MARGINS MARGIN All Initiatives have been identified and actioned to drive continued gross margin improvement throughout 2024 Black Rifle
Slide 18: Healthy Bottom Line
§ es): J s x > oR Z —e ea ania am = aay o> aS ex Ores ae ee. 'cask ih \ ie? B5 WA ALA ~ y HEALTHY BOTTOM LINE
Slide 19: Operational Excellence
OPERATIONAL EXCELLENCE 1 2 3 4 Consolidated Reduce Allocate Capital Analytical and Headcount to Reliance on to the Core of High-Return Better Reflect Consultants & our Business: Approach to Future State of Other Wholesale Deployment of the Business Professional Marketing Fees Dollars ~$10 Million ~$
Slide 20: Black Rifle by the Numbers
BLACK RIFLE BY THE NUMBERS 31% CAGR Net Sales ($ in Millions) $400 $301 $233 2021A 2022A 2023E Adj. EBITDA ($ in Millions) $5-$20 ($0) Achieved Adj. EBITDA profitability in last two fiscal quarters ($34) 2021A 2022A 2023E 2023E reflects outlook provided in Q3 2023 earnings call: Revenue low end of $
Slide 21: Our SG&A Has Been Realigned for Sustainable Growth
OUR SG&A HAS BEEN REALIGNED FOR SUSTAINABLE GROWTH $100.5 $93.6 $91.9 $83.5 Realignment Net initiatives Revenue equate to $30M run rate SG&A 52.3% 53.6% 49.9% annual savings 40.8% ($ in Millions) Q4 2022 Q1 2023 Q2 2023 Q3 2023 $6.2 $0.1 Adjusted EBITDA ($ in Millions) Q4 2022 Q1 2023 Q2 2023 Q3 202
Slide 22: At Inflection Point in 2023 and What's Next
AT INFLECTION POINT IN 2023 AND WHAT’S NEXT 2023 HIGHLIGHTS • Ranked Highest in Brand Loyalty among Top 10 Coffees in Largest Mass Customer • #1 NPS in all of Coffee Category • Increased Brand Awareness over 70% 2024 AND BEYOND • Major Brand Partnerships • Continued Growth Rates Well Above Category
Slide 23: Appendix
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Slide 24: Reconciliation of Non-GAAP Financial Measures: Q3 2023
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES: Q3 2023 Three Months Ended September 30, 2023 Net Sales Gross Profit Operating Expenses EBITDA GAAP Results $100,536 $34,059 $41,045 ($5,092) % of Net Sales - 33.9% 40.8% (5.1%) Equity-based compensation - - 596 596 System implementation costs - - 1,195
Slide 25: Reconciliation of Non-GAAP Financial Measures: Q2 2023
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES: Q2 2023 Three Months Ended June 30, 2023 Net Sales Gross Profit Operating Expenses EBITDA GAAP Results $91,947 $32,206 $45,867 ($12,184) % of Net Sales - 35.0% 49.9% (5.1%) Equity-based compensation - - 2,543 2,543 System implementation costs - - 1,171
Slide 26: Reconciliation of Non-GAAP Financial Measures: Q1 2023
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES: Q1 2023 Three Months Ended March 31, 2023 Net Sales Gross Profit Operating Expenses EBITDA GAAP Results $83,490 $27,511 $44,726 ($15,223) % of Net Sales - 33.0% 53.6% (18.2%) Equity-based compensation - - 2,506 2,506 System implementation costs - - 701