Slide 1: Black Rifle Coffee Company Fourth Quarter '23
BLACK RIFLE COFFEE COMPANY COFFEE COMPANY- ' \ | Merrgygy B* sam FOURTH QUARTER’ 23 BLACK RIFI © WEARE AMERICA’S COFFEE
Slide 2: Disclaimer
DISCLAIMER Forward-Looking Statements This presentation contains forward-looking statements about BRC Inc. and its industry that involve substantial risks and uncertainties. All statements other than statements of historical fact contained in this presentation, including statements regarding the Com
Slide 3: Today's Speakers
TODAY’S SPEAKERS Evan Chris Steve Hafer Mondzelewski Kadenacy Founder and Executive Chairman President and Chief Executive Officer Chief Financial Officer Black Rifle is clearly hitting its stride as a brand, as an efficient well-run company and most importantly in its ability to impact the veteran
Slide 4: Mission Driven, Results Focused
MISSION DRIVEN, RESULTS FOCUSED VETERAN FOUNDED AUTHENTIC TO THE CORE PREMIUM POSITION COMMUNITY FOCUSED #1 NPS 4x #4 Brand #6 Brand Fastest Growing RTD Coffee In Bagged Coffee in Our Largest In 12oz. Ground Coffee in Our In All of Coffee Category1 Brand, Outpacing the Category by Mass Partner Large
Slide 5: 2023 Q4 and Fiscal Year Highlights
2023 Q4 AND FISCAL YEAR HIGHLIGHTS Q4 2023 Highlights Revenue Profitability Adjusted EBITDA improved Net Revenue increased to sequentially to $119.6 million $12.2 million up 19% QoQ up 96% QoQ FY 2023 Highlights Operating Revenue Profitability Expenses Net Revenue increased by OpEx dropped to 31% Yo
Slide 6: Channel Highlights
Channel Highlights
Slide 7: We Are Outpacing the FDM Category Growth
WE ARE OUTPACING THE FDM SIGNIFICANT RUNWAY TO CATEGORY GROWTH INCREASE ACV IN FDM Added Nine Additional Grocery Banners in Q4, Bringing our Total to 23 Coffee xAOC BRCC xAOC 337% BRCC xAOC BRCC Grocery 37.1 29.0 17.4 ACV 60% 46% 2% 0.1 -4% -5% Q4 2022 Q4 2023 Q2 2023 Q3 2023 FY 2023 Q4 2023 Dec 202
Slide 8: We Are Outpacing the RTD Category Growth
WE ARE OUTPACING THE RTD CONTINUED SUCCESS EXPANDING CATEGORY GROWTH DISTRIBUTION IN 2023 Tremendous runway for ACV growth ahead Total xAOC + Convenience BRCC xAOC + Convenience BRCC xAOC + Convenience 32% 43.4 20% 18% ACV 38.6 0% Q4 2022 Q4 2023 Q2 2023 Q3 2023 Q1 2023 -7% -9% FY 2023 Q4 2023 Dec 2
Slide 9: We Are a Digitally Native Brand
WE ARE A DIGITALLY NATIVE BRAND Technological enhancements have been implemented on our website and mobile app Innovations within our subscription options to provide customers with more flexibility and variety NEW SITE OBJECTIVES DTC HIGHLIGHTS Customer Acquisition Brand Awareness Customer Satisf
Slide 10: Outposts Will Be a Growth Engine in 2025 & Beyond
OUTPOSTS WILL BE A GROWTH ENGINE IN 2025 & BEYOND We are reformulating the Outpost Plans to bring the unique Black Rifle experience to consumers as we accelerate retail growth with strong unit economics and Return on Capital BRC Inc. | 10
Slide 11: A Lifestyle Brand with a Broad and Growing Following
A Lifestyle Brand with a Broad and Growing Following 13.9M+ 3.7B+ 115M+ Social Media Followers¹ Media Impressions Total addressable market2 U.S. POPULATION AGES 18-64: 203M PEOPLE BRCC ADDRESSABLE MARKET: 57% 1.9M Followers on Instagram 1.2M Subscribers on YouTube 260K Followers on X ¹ Across Black
Slide 12: Operational Excellence & Financial Results
Operational Excellence & Financial Results
Slide 13: Operational Excellence
OPERATIONAL EXCELLENCE 1 2 3 4 Consolidated Reduce Reduced Focused Headcount to Reliance on Inventory, Margin Better Reflect Consultants & nearing Optimal Improvement Future State of Other Levels of Initiatives with the Business Professional Working Capital 2024 Impact Fees ~$10 Million ~$20 Million
Slide 14: 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 Adjusted gross gross margins by: margin¹ improvement is 40%+ clear 37.8% Mix between channels 36.8% and products 35.7% 35.1% 35.0% Distribution and 33.9% 33.0% Logistics Our manufacturin
Slide 15: Quarterly Financials
QUARTERLY FINANCIALS $ million Gross Margin Adj. Gross Margin +28% +630 bps GROSS MARGIN NET REVENUE $119.6 37.8% 31.5% 31.5% $93.6 26.5% Q4 2022 Q4 2023 Q4 2022 Q4 2023 ADJUSTED EBITDA Q4 2022 Q4 2023 Q4 2022 Q4 2023 NET LOSS ($14.0) $12.2 ($20.0) ($11.4) +30% +206% BRC Inc. | 15
Slide 16: Annual Financials
ANNUAL FINANCIALS $ million Gross Margin Adj. Gross Margin +31% +360 bps GROSS MARGIN NET REVENUE $395.6 36.5% $301.3 32.9% 32.9% 31.7% FY 2022 FY 2023 FY 2022 FY 2023 FY 2022 FY 2023 ADJUSTED EBITDA FY 2022 FY 2023 NET LOSS $13.3 ($56.7) ($338.0) ($34.0) +83% +139% BRC Inc. | 16
Slide 17: Outlook
Outlook
Slide 18: 2024 Outlook
2024 OUTLOOK TOPLINE GROWTH¹ $430M - $460M OPTIMIZED GROSS MARGIN 37% - 40% HEALTHY BOTTOM LINE $27M-$40M ADJ EBITDA 80% Free Cash Flow Conversion ¹ A barter transaction favorably impacted Net Revenue in 2023 by $28.8 million and projected Net Revenue in 2024 by an estimated $6.5 million. Excluding
Slide 19: Appendix
SAT Dy, Appendix
Slide 20: Financial Highlights
FINANCIAL HIGHLIGHTS Fourth Quarter 2023 Financial Highlights (in millions, except % data) Quarter To Date Comparisons Year To Date Comparisons 2023 2022 $ Change % Change 2023 2022 $ Change % Change Net Revenue $119.7 $93.6 $26.1 28% $395.6 $301.3 $94.3 31% Gross Profit $31.7 $29.5 $2.2 7% $125.4 $
Slide 21: Income Statement
INCOME STATEMENT Consolidated Statements of Operations (in thousands, except share and per share amounts) (unaudited) (audited) Quarter Ended December Year Ended December 31, 31, 2023 2022 2023 2022 Revenue, net $119,650 $93,618 $395,623 $301,313 Cost of goods sold $87,978 $64,153 $270,175 $202,134
Slide 22: Balance Sheet
BALANCE SHEET Consolidated Balance Sheets (in thousands, except share and par value amounts) December 31, December 31, 2023 2022 Assets Current assets: Cash and cash equivalents $12,448 $38,990 Restricted cash $1,465 - Accounts receivable, net $25,207 $22,337 Inventories, net $56,465 $77,183 Prepaid
Slide 23: Cash Flow
CASH FLOW Consolidated Statements of Cash Flow (in thousands) Fiscal Year Ended December 31, 2023 2022 Operating activities Net loss ($56,716) ($338,044) Adjustments to reconcile net loss to net cash used in operating activities: Depreciation and amortization $7,263 $4,383 Equity-based compensation
Slide 24: Cash Flow (Continued)
CASH FLOW (CONTINUED) Consolidated Statements of Cash Flow Continued (in thousands) Fiscal Year Ended December 31, 2023 2022 Non-cash operating activities Recognition of right-of-use operating lease assets $18,547 $20,050 Recognition of revenue for inventory exchanged for prepaid advertising $28,901
Slide 25: Key Operational Metrics
KEY OPERATIONAL METRICS Key Operating and Financial Metrics (unaudited) Revenue by Sales Channel (in thousands) Quarter Ended December 31, Year Ended December 31, 2023 2022 2023 2022 Wholesale $73,525 $41,187 $225,059 $119,360 Direct to Consumer $39,072 $45,645 $143,232 $159,022 Outpost $7,053 $6,78
Slide 26: Reconciliation of Net Loss to Adjusted EBITDA
RECONCILIATION OF NET LOSS TO ADJUSTED EBITDA Reconciliation of Net Loss to Adjusted EBITDA (amounts in thousands) Quarter Ended December 31, Year Ended December 31, 2023 2022 2023 2022 Net loss ($14,036) ($20,030) ($56,716) ($338,044) Interest expense $1,672 $457 $6,330 $1,593 Tax expense $16 $101
Slide 27: Reconciliation of Gross Margin to Adjusted Gross Margin
RECONCILIATION OF GROSS MARGIN TO ADJUSTED GROSS MARGIN GAAP to Non-GAAP Financial Measures: Gross Margin (in thousands, except % data) Quarter Ended March 31, June 30, September 30, December 31, 2023 2023 2023 2023 GAAP Results: Net Sales $83,500 $91,938 $100,536 $119,649 RTD transformation costs -
Slide 28: Guidance
GUIDANCE For the Full-year fiscal 2024, the Company expects: FY2023 FY2024 Guidance Actual Low High Net Revenue $395.6 $430.0 $460.0 Growth 31% 9% 16% Gross Margin 32% 37% 40% Adj. EBITDA $13.3 $27.0 $40.0 Free Cash Flow 80% Flow Through ¹ A barter transaction favorably impacted Net Revenue in 2023