Earnings call transcript Q2 2023

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Operator

Greetings. Welcome to the Black Rifle Coffee Company 2Q 2023 Earnings Call. At this time all participants are in a listen-only mode. [Operator Instructions] Please note, this conference is being recorded.

I will now turn the conference over to your host, Tanner Doss.

begin. may You

Tanner Doss

on Thank conference everyone. financial joining Rifle be Black which ir.blackriflcoffee.com. Good to you discuss Company’s found can and call released XXXX website our Coffee at we afternoon, today for our second results, quarter

portion today the Mark on our CEO; new Iverson, Evan Hafer, Financial President today’s Mondzelewski, Weinsten, our Officer. CFO We’ll of as With Tom call Founder Q&A Co-CEO; as Davin, our me Interim the is on Chris wells Greg Chief and call. also have

Before started, the would you’re to company’s today’s forward-looking like safe with. assumptions. sure underlying make call, familiar we I’m statements, I get and remind including management may harbor you language, all guidance On which

cause actual to are materially. results statements on involve based risks could Forward-looking differ that expectations and that uncertainties

our discussion see further of please filings the to related risks SEC. business, with a previous our For

non-GAAP earnings also these GAAP such This our the in non-GAAP contain to also investor they available website. to on are adjusted of measures the measures call financial most comparable the SEC, release EBITDA. included Reconciliations and measures will furnished are as

turn like Company. the Evan? over Hafer, Founder to to and Rifle CEO I’d Now Coffee Evan of Black call

Evan Hafer

the veterans for good for from in anything in stand first been authentic generations. beliefs stray starting our can one We our last most From who felt everyone. Rifle Coffee and will is on don’t where responders whoever our brand focus their change brands a customers build Black between authenticity connection and that that can demonstrating looking yelling based beliefs by Company loudest. Thanks, day something military to community, or and be my world Tanner, are to don’t core afternoon it my an we garage, of has create our and

American business consumer CPG we’ve be real Black a proven an direct omnichannel from pure a success business, business story. Rifle As has into to transitioned

and American brand we’re all of that are every lifecycle, in We’re our we have shopping excited company’s up with customers products still early have but resonates our proven show public day. our in our where to stores

strategic Last direct-to-consumer date paid bag number that made products our X,XXX brand from into XX premium, Walmart one niche to mass, over the has year, launch selling off. we the coffee sold decision food, We’ve a and brand coffee and has drug gone to across decision to to stores brand and of in America. also mouth This a strength has year. the over our This XX% over and people aided shop million on reviews. in where excitement done from all been the XX% on being day of awareness the brand shelf last for XX our increased word ounce

While to we’re go. we with increase, left X% XX% the have point pleased

Over coffee with is grocery Coffee little coffee X.X% bags k-cups the the Rifle aisle. within within the or and sales rounds, last made categories X.X% only in weeks coffee aisle Black no total That marketing is of only the of Walmart represented half total to largest representative of of FDM. and up four spend ounce which XX

during launched been six SKUs XX% recently begin address remaining months, that to working we’ve aisle. the create with the to that coffee their Over new the Walmart we reset past will of

color Although Walmart increase we will coffee further sales. were the seen period, new the share product our in early we’ve reset additional Tom this innovation in section.

soon national our partnerships. chain FDM our be entry we building second would our on be we additional product success launching Today our I’m to partners. excited that itself we of and in going two into the other grocery regional As and to was grocery are mentioned call, announce last shipping to

Coffee roll into we Black grocery and Rifle conversations and We out additional are will deep XXXX. chains groceries to in additional with accounts the during FDM continue

elevate Mars a bring intimately Growth has familiar the importantly, President recently well to coffee years experience most and he our Officer additional growth Mondzelewski. capitalize of which XXXX. as experience to is base, Chris brand team customers. to understands CMO, knew we the over has customer He’s deliver our TAM been Black and of since to to needed brand opportunity Petcare, Rifle CPG, at subscriber with he a expand next our cohorts industry more and why new hired the the to as on Coffee we CPG the brought to Chris XX potential new brand Chief how I order our as of level, the In talent within into

of in lead and on Chris groups. me aggressively customer business and goals working the focused be the unlock Davin especially distribution on across expand into of in Tom year, expansion our channels, to Working programs with to with marketing hand and continue branding the FDM the will three marketing new main next I front on over large rest efficiencies Chris the Black business will Having this allow to Rifle what business. our units to to be Rifle brand. partnerships Coffee. in continue on love, me Coffee a focused is drive back of evolving the building which I role working across strategic Black the XXX% doing and predictable get to new be and will hand

be on More needs the will a and wants importantly, customers. XXX% of I our

more very for We are cycle still Coffee Rifle of and the the in I be Black excited early couldn’t future.

on Mark you the additional have. President, Mondz [ph], our and to might Interim questions our call answer any have also CFO We Weinsten, new

last the to job Before Greg earnings thanks for CFO. business over getting last in I as ready call his through three this Tom say walk to the quarter, I Iverson also years. an instrumental he’s was Greg our to IPO, and call on amazing turn to the want done

next miss want him wish office will his to I mission. having in luck We and around the him

TD, With the go ahead. that, call to turn I’ll over Tom.

Tom Davin

the of conclude and afternoon everyone. good profitability, performance then by I’ll with start address topic Evan, with Thanks, company and XXXX guidance. channel

I’d topics, context. addressing observations some like the comments to Before to set preface my with these

category brand result, list and First, coffee rapidly, the acceptance, the of Coffee growing long a gaining a outpacing is Black Rifle competitors. are as broad and we far

set veterans as omnichannel This aggressive, in has consumer company, over military marketplace. strive risk. by initiatives evolved As responded public achievable the results behavior supported to goals we’ve public mitigate strategy we as call earnings our to time growth seventh leading but a and is obviously to company, a our

sentiment success in Wholesale to be we’ll as The drug and mass, segment, our enabled we’re and to heart, path profitable streamline in the we Coffee particularly what as We’ve QX profitability report we continue adjusted least that line. business to to I’d clearly our technology I’m use see XXXX to that model. the focus drive said and processes, pleased to hit the year. we would achieved hold us a One I chart committed at said more we’ve sharpen targets profitability, like EBITDA meaning trending a our Black becoming productivity at taken food, in has Rifle recently, ourselves seen more accountable our to on boring, profitability. our profitability to call, do for investor EBITDA QX do and to adjusted outlined

The across key levers business. are mass food, the the and cost continued and the makeshift productivity drug channel savings into

entire is the of focus profitable behind Our aligned imperatives and organization growth.

past out this strategic our has I’ll prove now of the highlight to on started channels. decision channel the quarters. two to focus each over business Wholesale,

has was brought Our food, BRCC mass. again year-over-year, the XXX% Wholesale revenue proving drug shoppers, growth brand of wide appeal and range channel with a that

continue are market channel, a launch to still share gain less than we year our into within Although rapidly. we the FDM

new Black XX Coffee XX sales. comprising recent XX and XX% shipped data X.X% and Walmart total SKUs success the bag coffee additional being according Walmart’s stores Nielsen cold to coffee six flavors of the innovation Rifle over opportunity fluid coffees, to concentrates, rounds coffee, multiple are sizes four the speak, has including that of we last most as represented and shared business. SKU pack brew ounces with of address of flavors, earned first two three This our to of or remaining ground begin Evan ounces Walmart to BRCC k-cups. instant weeks, coffee coffee the additional canister of and SKUs

be With half details is Ready-To-Drink. Black more Coffee story to look we product Walmart times. this the honored Nielsen we XX%. the shelves Black on shelf product coffee ongoing by on by arrives of at Rifle sales new FDM the part increasing Based Evan Walmart’s category as new to Coffee than are referenced, continue two total forward Rifle data roughly to additional sharing outpace FDM accounts and a relative launches, our success facings to

BRCC Our RTD product continue to segment, enabled market continues take to share. to has which outperform the

Over Rifle terms the weeks, in outperformed eight last Black XX the by times dollars. category of and over units

the are in now products a XXX,XXX while our XX,XXX sold end by to way target XXXX. door year doors Our on over being

the FDM of percentage Ready-To-Drink currently XX% segment continues XXXX. experienced grow some quarters. at over and year as deceleration whole a convenience combined Our to couple XX% The end from ACV past up at with stores

Where not the the quarter-over-quarter, X% XX% and sales the fall Although in growing during Black seen time last same up expect to Coffee’s Rifle unit the unit has share, taking period. sales we in quarter. did almost slow were RTD category category

As review quality this urgency the in distribution, by enable bottoms a of a has playbook. of and focus resulted of the profitability, the outcome increased of down execution supported review deceleration, leadership changes of sense all result and completed up full top to business. we’ve RTD category around Ready-To-Drink The renewed on of our greater margin,

to and our We monitor system. RTD throughout in overall the continue macro execution the trends improve

investments which new over continue operate imperative, relative as be a continued largest slight that in the to branded We’ve disciplined with with of in fall customer’s on XXX,XXX quarter-over-quarter, internal still subscription acquire customers. CAC decline see profitability cost we we aligns as with customers CAC is below the our models reduce as United business LTV elevated our hurdle an we to to new States coffee rates Direct-to-consumer, the to subscribers. or

the investment that FDM greatest area direct dollars the is providing the of the to continue category, business returns. into We

we the for last Outpost as future. division direct assumed immediate announced Outposts, I leadership the have quarter,

refine locations continue leadership maximize We the owned XXXX company within customer objectives the to have our engineering returns to prototype main retail ensure further future Number on retail BRCC Number two, and order Outpost. capabilities to to performance investment. model overall the out team enhance of value develop build franchise at one, experience, three in revenue. in generate to elevate business. the Outpost experience drive costs the our new Number for strong Outpost three, each while

for see this segment strategy. significant long-term our to continue opportunity growth of We

up section, provide Guidance, an on my wrapping for guidance I’ll XXXX. update

$XXX to of million $XX XX.X%, for million adjusted guided year. million. to As EBITDA you million Gross we know, range the to $X to revenue the XX% margin, $XXX previously

guidance deceleration, expect low to results improvement With the in XXXX margin, adjusted revenue metrics end of the continued gross be representing and the aforementioned at category Ready-To-Drink growth, now across XX% all three we EBITDA profitability. low-to-mid

see both gross QX. adjusted to improvements and expect and margins We EBITDA QX in in sequential

the turn through to in now more call walk quarter details. the I’ll Greg Greg? over Iverson to

Greg Iverson

I before years. and the Tom, review and like Thanks, But good Tom Today second BRCC friendship a over discuss will their our financial I quarter everyone. entire three Evan, and the and thank the family afternoon financials, XXXX half for I’d support results. past to

While will a that closely life. everyone, hands I company know the committed customer working is miss remain in Coffee Black Rifle I’ll with extremely and for I capable

the going report we’re we million context say to of and to towards doing second adjusted what forecasts. and guided EBITDA even $XX both approaches the we do, in revenue pleased In we break exceeded of previously quarter, I’m that

For QX increased $XX.X of XX% to in total last the second quarter, year. $XX.X compared revenue million to million

as additional wholesale into entry in to we our revenue of and to three during by food, sales Walmart will $XX where on drug channels. million QX in I Now, our driven with primarily began stores year. compared in September mass $XX million beginning selling begin X,XXX QX give I’ll coffee and some rounds our of year. last was over increase XXX% bag increased last The details

in doors Ready-To-Drink increase in product our as sales from We material a XX,XXX also year our saw sold over XX,XXX is ago. product up being a doors

in advertising Direct-To-Consumer returning to by Next, high mainly channel. expected of $XX.X and decreased This continue year. to result growth decreased of prioritize QX digital our to the compared million million QX high spend of XXXX as our direct in decline last was wholesale revenue X% $XX we

owned last XXXX. was million increased to with The QX an XX $X.X of year. count, revenue million Outpost increase total in QX company compared to XXXX owned [ph] which in as brings company Next, in outposts store XX from main XX stores. franchise compared to outposts XX% our number QX $X.X our This driver XX of and to to increased XX

has other Sequentially the was gross margin versus QX profitability, basis basis channel approximately increasing last from first points of QX increase by year. XX% mix to our our improved channel XXX quarter channels. was than XXX margins driven in as Turning wholesale margin higher gross primarily XX%, shift XXXX. of gross our The points

Next, million year. million XX% QX or of increased our by total operating expenses in for $XX.X $X.X $XX.X last QX million, versus to

As a last year decreased $X more XX.X% points operating our expenses walk by advertising, leverage significant our through during detail, million as to decreased beginning QX we base. quarter of which basis year. across and $X million operating expenses XXX in will revenue, marketing I the from drove operating percentage last second to as of our compared expense to in XX.X% with

percentage a by approximately on platforms. marketing XXX reductions quarter points This X.X% As decrease to in driven to of basis in expense was revenue same decreased the advertising spend by last compared lower returning year.

In spend we channel the is continuing marketing and with wholesale been our leverage and our focus anticipating. advertising on drive addition, our efficiency to that have

quarter increased of to wages year. and from benefits the salaries, XX% million $XX.X million Next, last second $XX.X our in

XX.X% approximately leverage as we XXX QX headcount points are year-over-year significant operating employee expenses. to our to in growth. a Importantly compared dollars by basis was in due revenue, last of percentage increase decreased year XX% to driving revenue The in increase as to our in support it of a again,

headcount improve operational we both in sequentially QX reduced our and our we open to employees at year-over-year, part newly as efficiency. While headcount, of outposts efforts actually excluding QX increased

compared on year. to increased our G&A million last XX.X% Moving expenses quarter second million the $XX.X in to of $XX.X

points increase of expenses. to percentage in XXX year. to legal by decreased approximately basis primarily non-routine was This revenue driven of compared a revenue As dollars XX.X% by G&A XX.X% last

expense significant As the wages, with achieved G&A and our marketing and in quarter. our in our salaries we leverage

discussed, is an internally EBITDA we I’ve use manage profitability measures GAAP business. adjusted important our the that to addition measure In to

driven the quarter, ago. margin growth, generated a our year versus we adjusted by of operating gross For XXX,XXX second positive leverage. was revenue million and improvement, $XX.X massive of EBITDA a loss improvement This expense

our revenue work our have profitability profitable the in very We’re growth modest drive expense done teams and structure, of optimize our to supported proud QX. great which

continue to growth continue this of year We profitability revenue we to back of half sequentially efficiency the as improving business. while improve expect in our the drive to

first We to through Now, million as XX. quarter the of of ended walk briefly on I’ll our sheet balance cash the for of compared $XX.X $XX December sheet balance QX million with XXXX.

XX. debt compared to had December million of We also million $XX.X $XX.X as of

and As expected, slightly and was it grew now August. our has inventory it in QX peak in its as at balance decreasing July begun

cash as RTD throughout our to of see the quarters. inventory the over our decrease coming the continue You’ll remainder convert balance year we inventory into

a allowed provide earlier to today we I’m up on structure which facility closed Loan our Lastly, existing long-term an announce borrowing additional Credit new ABL continued pleased to and of facilities a liquidity collectively credit that million. of a to and growth. capacity us consisting most $XXX will capital provide Term Credit aggregate with of Agreement Agreement, our indebtedness These repay have us to support and

operator With turn will the that, I over call the to for questions.

Operator

of [Operator Joe James. the question. Our line from your comes question Altobello with proceed Please Raymond Instructions] first with

Joe Altobello

you. was guess you for the start correct? so just with the I’m is in think down quarter, couple RTD category second Hey, clear, the questions said first, I of that Thanks. afternoon I category A to guys. X% good just

Tom Davin

That’s Tom correct, Davin Joe. here.

Joe Altobello

first that what Hey, was. in like Tom, and want did to quarter? I the sequential see what look slowdown just the

Tom Davin

was It down we year, four, in Tanner It pulled that was it yesterday. last X% down, QX XXXX. down of was

Joe Altobello

been it’s progressively so slowing. Okay,

what’s Given been category, that? your the view driving of

Tom Davin

I I pop be a drink. that. gas for into can’t It a like answer into Mondz? nice have mean, down. and may shifting don’t traffic the has during convenience people seem COVID energy We does gone period. good you that had say

Chris Mondzelewski

one we’ve that the of seen market higher factor that. and as into commensurately categories of a be with move becomes continue move down than seen would more higher I the differential sort prices think the We’ve prices. to

Joe Altobello

maybe bit a And more new Okay. the partnerships. then color little on FDM

You Can new guys new to partner and they partners. some are announced, national two you who a you and said us give insight shipping? you grocery expect when into have start you regional

Tom Davin

we call to one Mondzelewski, to Chris Yes, that pitch I’m who going Mondz.

Mondz So you. to over

Chris Mondzelewski

thanks, a new, Tom. coast a Yes, it’s have We large west retailer. Great. excited. do Yes, we’re

all retailer. shipping currently divisions We’re of that

mentioned, we, we’re States. be we’re as large of And number the end do of We the retailers towards all the of smaller most year. have working well. the this point, at in with, conversations you end in expect then in as with, And we honestly to retailers that the by stores year a United

Joe Altobello

Thank you. Okay.

Operator

the of comes Please question next Our from line D.A. Cox Keegan question. Davidson. with with your proceed

Keegan Cox

of environment. I was coffee seen gross like margins? a wondering was Hi. deflationary impact wondering, down what I just would the coffee like on we’ve be towards inflation heading prices today lower was your

Greg Iverson

that forward is on coffee, take Greg practice can said about place is Keegan, out. past back, I our contracts usually we’ve this calls, Sure. as and for months stepping XX just Iverson. purchase to

what commodity We several months over all said right rates or coffee of cost is had higher. has the year The coffee a not least placed gone purchased, through had. you coffee quarters. So P&L had contracts at that’s exactly but is physically, significantly The flowing at were is pretty we last last that that on down right. our now

So we’re our we cost as lower going not of into seeing this through the year, of but the coffee P&L certainly we benefit XXXX. go will

Keegan Cox

environment sold? to be up a like on impact are Awesome. deflationary just do benefit what And coffee if right, think then units you heading will follow is the or we a

Evan Hafer

Can part say your there? of you last the question

Keegan Cox

impact the Yes. units sold What like would on or coffees ground be bags, sold?

Evan Hafer

demand Is level? potentially your or pricing retail at question the around

Keegan Cox

Yes, the level. demand pricing retail at and

Evan Hafer

of we’re that price. are retailers but at of from big prices Yes. indications does, we the level pressure That’s over start or pressure within coffee seeing lowering hasn’t back yet as going everybody and, I’m down that watch From the or to not risk. terms closely you space the demand I something consumer a impact cost sure any time, in look demand the deflationary coffee go the any perspective, a had think if on

Keegan Cox

you. Thank

Evan Hafer

Thank you.

Operator

Our your the comes next Andersen Jon line with William question Please question. proceed with of from Blair.

Jon Andersen

Hey, good afternoon everybody.

Tom Davin

Hey, Jon.

Jon Andersen

in with, your the across, to maybe on based there as anything or is Or with performance Hey. I you performance of sounds your of ask to seeing launch geographies? also different How strength, from they’re have those, similar get these do and the parts SKUs? the today and ready and form to to X.X% thoughts on Thanks. to learned because SKUs? what some versus Do are of you’ve then tend and terms results you of wanted start kind be incremental highly or Walmart, quickly launched. those country, and expectations It already similar those new get to some different be launched Walmart shelf on like hitting incrementality rural flavors incrementality there? of different are congrats factors, urban

Evan Hafer

Mondz?

Chris Mondzelewski

Yes. Jon, interestingly, Great. performance on so we’ve steady Yes, pretty question, entire the the had market. first across

when we when you seen West would look towards but see in larger like still, volumes obviously bit Midwest larger and Coast, we geographies, at all divisions, an Northeast, products expect. standpoint, it index an So the from as we performing look we’ve is well. at the South, There Walmart index you a of the the

So to on weeks real those been We’ve all see of happy, Walmart’s cut we’d in six go eight the thus in of expect to They’re you new new should now. on shelf. nationally. lot see, Possibly distribution them full with is when items far not would the weeks items, stores, strong shelf, to performance you a has been the items. our of

item on, And, the will depend incrementality itself. really

distribution, to of internal we’re we don’t the still our our So market incrementality. category, it are own existing a see XXX% we result a lower of being Cold so item expect on k-cups the while, we an have level that actually is see we we’ll given share we’ve high that example, see within level of market actually, for in with as incrementality, will happy of in where have forecasts. a said, Brew going obviously and built almost that segment, the as segments, expect versus items share, instance, overall where That we for any very into our some to items cannibalization that

Jon Andersen

then, can some sense of on, at Coast West kind of, then FDM you’ve regional’s the talk to across, of more talking in next number with retailers about large expansion a phase broader That you then makes and about this talking as retailer like you XXXX by XXXX. you’re for we most you large and of to and second the the maybe criteria of how regard chains the sounds the half are retailers, new year said, used a rollout the end, and much of kind to a in select

a sense yes, why get thinking you then Walmart retailers we’ll of kind phasing for, the there. trying how Just have what about and again start post you’ve and it you’re selected to criteria,

Chris Mondzelewski

question. great a it’s Yes,

as, I premium know, think, proud very been brand. brand built a you we’re very it’s of that’s the and

with partnership So there. eye see we retailers will partnerships the had really that success Obviously we’ve Walmart. that, with with been seek on eye the with to us we’ve delighted

So, every is retailer I different. obviously think

brand us different we’re as, understand know They premium would that with that we operate that, we whatever that in that under expect that, retail going but market. to we it’s models particular and get to a strike the we important chain deal execution

working again own we our important side, a, within is that brand individual criteria that that their as on we criteria the then side market. execution ensure premium would obviously getting have, we’re their expect to in but on So

on. criteria that’s again So that primarily yes, focused we’re the

Jon Andersen

of the great as store shelf, Thank you to go in that one last for be things more brands forward increase maybe low And that a ACV brand? opportunity? is what which activity get as drug the relative as and mass and is the you. ACV the average you’re items just at higher doing drug in going to And awareness broad, greater big market. you food, to some kind in marketing again, XX% seems there mass? of also, XX% shift you are there drive and the me, helpful. awareness, mix That’s there other for obviously to does a going food, in try in other this, build like that is Are frankly seems,

Evan Hafer

Yes, this is Evan.

three we’re guess I redefining in We’ve ago dollars. and what in us department, marketing to I of related to get, coming specifically more build kind marketing the Chris more how does partnerships of like out build what activate at FDM, with How for time? the we’re Rifle? marketing efficient of I the would more months is allow to ultimately out doing would going also with strategic that a us to what it’s allowing able game efficient and we our strategic look grow plan to future say that, think a Black say our I then now What do awareness more dollar. been same

So there’s to is reflective of to expand as of with opportunity efficiently start budget, we marketing outside more financials. ahead DXC, spend in a the there, obviously of lot our Go which sorry. some

Jon Andersen

ahead. go No,

Chris Mondzelewski

going just to to Yes, well. a bit first the I wanted build part of question was as I address your say, to

mentioned, the absolutely. You expansion, ACV

the business. is And to ability of through owned other very And brand. with been media advertising built lot that package, about been and find that, category and that a the awareness paid of do our drive all that’s drive to huge our the secondary that distinctiveness through display. distinctiveness CPG the more excited we point, very part we’re your see your of that focus also is – brand we’re will awareness on much in That’s ways going I to of These ability earned. through continuing of to advertising. the has to going you’re forward But of shelf any lot our in certainly again, something brand, that to Evan’s on, think do a a things this a the market.

Jon Andersen

Are one. ACV just a constraints And capacity of expansion terms in partners? from standpoint one there any new the and continuing – adding quick

Tom Davin

as an issue. of Tennessee, out to Plus, not in Manchester, capacity building we’re talked No, not more that’s capacity plenty there. an issue. before, There’s we’ve so roast

Jon Andersen

so much. Thanks

Tom Davin

You you, Jon. bet. Thank

Operator

Our ROTH next Please with proceed of question. George with Kelly the question comes line your from Capital Partners.

George Kelly

thanks taking questions. my Hey everyone for

curious could that So and Canister was first Walmart. the Brew you represents? on about Cold of the question another talk percent if I aisle

Tom Davin

I’m over kick to George, one to going Mondz. that

yet. participated Walmart So at we’ve we’ve about in fact you’re coffee getting XX% at not that of talked the

Chris Mondzelewski

Right. curious of SKUs what those Yes, innovation products, they new just two what Walmart the aisle. represent

Evan Hafer

which And I sorry, said Brew and I’m you Cold one? other missed.

George Kelly

Canister

Evan Hafer

Canister. Oh,

So very different.

overall Cold very percentage a think, small category actually them. Brew really I It’s for aisle. is of a the newer

is which a Canister of they’re actually portion versus huge selling already. So what

is So of that’s case Canister, overall category their in standpoint. what the from business a a quarter of

segment So obviously, excited that. small And than It’s having the at this in less about X%. we’re really excited Brew incremental a then about growing. case it’s we’re just of It’s potential But potential Cold the within point. again, sales of very that.

at consumer is When is consumption you shift look that to where beginning the to. trends

to large, has So in there’ll expect bit again, expect currently, obviously segment that be a but growth to a probably we of much the explosive case overall now while of moderate more of see has Brew Canister, it’s it Cold the of it much we scale see smaller in more play case growth that segment.

George Kelly

on a in curious bit question your could focus margin second great. I guess was if your the I RTD spend for that you about mentioned time, questions just few of on business. helpful. then a remarks in prepared or And That’s Okay, you, business. briefly you

there curious improve term much pretty is, to and you internally margin do challenging Is is just And still so kind outlook? medium of near can there? it a

of question second part growth might, And of then business. deprioritize the the you is, in that it kind

business emerging profile. You’ve margin got I that’s a this wonderful carries much retail and think higher

So was a much as is two year, years priority a as ago? RTD still it

Tom Davin

the Thanks new [ph] question. RTD, as brought we’ve of co-mans new for so our startup George, we’ve had hired if is both it CORE we’ve you up issues history a Yes, and SKUs, as Tom. with about Yes, a LTO. number think

So drag issue. an will particularly not that’s year, on a that be year this as been profitability we look next to

future where are co-packers in point, good we RTD We with are, money the have our relationships And their feel that about so second external just We prioritizing what margin good we stabilized. over making So, purely is your growing. know margin we be. to need RTD profile. we to really really understand needs and

we’re a the accounts adding really incremental street plan right not plenty at SKUs and about So profitability. execute going to be the It’s SKUs. got level now. We’ve focus lot more of drive

George Kelly

you. thank Okay,

Tom Davin

bet. You

Operator

question Please from next with Matt with the Company. McGinley comes our Needham your line And proceed question. & of

Matt McGinley

you. Thank

revenue Ready-To-Drink where the you provision doors versus old performing product how with versus did on the new doors slowdown doors in velocities, doors? distribution? So Was the already new saw that had you the package Ready-To-Drink guidance in consistent

to XXX,XXX or XXX,XXX don’t doors another for year fall that deliver have even is guess know that a there, Ready-To-Drink range? that XXX,XXX would a deliverable? on number secondarily that guide your of not, enough And below an XXX,XXX, you distribution I put XX% guided if end, if revenue could still Or have year? if line Ready-To-Drink is way, the good within by a get magic you’d that I you sight do important a don’t but really you the it

Tom Davin

Hey it’s Tom, Matt.

say, second No, directional. critical. more first. I’ll I’ll would the I it’s So It’s not answer one ask,

pretty of really So and the a we’ve not so in. with happy about door we big like more feel products. To We not our point, doors particular, month. been more we’ll that’s is add LTO performance the doors lever. continue to we’re feel good per Ready-To-Drink in And it gain your first ACV, per units

and we category on us, but not expected it’s So, strong being matter as execute they’ve know come a overall, we can up better. as short we of the

need do. worked teams. dive and prepared deep a closely review business. my everybody marketing the what sales made So they we’ve as the in obviously has mentioned to understands changes board Mondz coming remarks, on on with and done We’ve

year. that for So, to we able the number good being about feel hit

Greg Iverson

these I’ll comes idea a up in Greg. the add quite bit is conversations. and this whole this Matt, other just doors calls to of because And

going line proxy using things the can’t up it’s not important revenue. some And for you a doors in for reiterate is, even cases that’s us so one model And business really directionally. to our accurately to of as

So at rest the we throughout definitely not question, were you to be doors revenue, how the to expect to your linear. versus grow if to to back specific look revenue of year going is

Matt McGinley

those those Got expect just from kind the dollars it. but the the quarter, increase fully referenced, of dollar’s to decline think down those kind you it? in first And to expect quarter here that realize from falling? expected OpEx does on Outpost, your should we of wondering should OpEx headcount restructuring, the you in don’t I grow that in we from the be that Outpost restructuring or dollars savings third I’m instituted or is second quarter, the see to you prevent

Greg Iverson

good Yes. Matt, a question. that’s that’s, Greg, again,

right terms So headcount. the you’re absolutely of in Outpost

cost the sits the as G&A structure mentioned, of most line. So, we within Outpost

and salaries at work occupancy the in and outposts wages G&A. who folks are costs wages. are salaries the the all in and So for The rent other

in And of the we line that those as efficiencies of in the areas some quarter both was we opened growth that saw those growth stores, so definitely new offset in there items. second

and progress while simplifying G&A, of we’ll good a important the we’ve continue that I So, be finding increases to by structure, work improving And streamline as more business, will to that and within opportunities terms in isn’t customers other business bit our little offset serving our in some open one really salaries our year. efficiencies our find this our and will costs that consumers. Outpost we wages do made the think complete, and cost continue, message is work that

Matt McGinley

Okay. Thank you much. very

Greg Iverson

Thank you.

Operator

turn the call And we for now over remarks. question-and-answer closing session. And of end I’ll to have the reached Tom Davin back the

Tom Davin

earnings our results Rifle who Coffee QX financial Company Thank to Black call. you everyone joined

EBITDA Just to as to net recap, increased revenue achieved growth committed million. the we quarter XX% $XX.X in from in QX, XX% adjusted up profitability. It’s

customer We’re about and national feeling grocery year. regional up balance launched a And announced a we’ve two we chains additional for that the major with completed we’ll of where we’ve end refinancing. second excellent

the questions So your thank you we for look follow and calls. up to forward

Operator

you time. your Thank disconnect this you today’s This and concludes participation. conference may line at for your

BRC (BRCC) 10 Aug 232023 Q2 Earnings call transcript