Highlights
- Wholesale revenue grew 3.5% compared to Q3 2023 while
consolidated net revenue decreased 2.3% in Q3 2024 to $98.2
million.
- Adjusted EBITDA of $7.1 million and Net Loss of $1.4
million, an increase of $0.9 million compared to Adjusted EBITDA of
$6.2 million in Q3 2023 and an improvement of $9.3 million from Net
Loss of $10.7 million in Q3 2023.
- Increased midpoint guidance for Gross Margin and adjusted
EBITDA, while narrowing the full-year revenue range.
- Black Rifle Energy™ RTD will launch in Q4, offering a clean
energy option with BRCC's unique designs, supported by national
distribution through our partnership with Keurig Dr Pepper (KDP)
for FY25.
BRC Inc. (NYSE: BRCC, the "Company"), a Veteran-founded,
mission-driven premium beverage company, today announced financial
results for the third quarter of fiscal year 2024.
“The Black Rifle brand continues to perform well, and I’m proud
of our progress in gaining market share and improving profitability
this quarter,” said BRCC Chief Executive Officer Chris
Mondzelewski. “This momentum enables us to invest in key growth
areas, including the upcoming Q4 launch of Black Rifle Energy™ - a
significant addition to our portfolio that expands consumption
opportunities and complements our coffee offerings. This quarter,
we also announced a strategic partnership with Keurig Dr Pepper
(KDP) for the manufacture and distribution of Black Rifle Energy™,
positioning us for accelerated growth and a successful national
rollout in 2025. As we grow, our mission to support Veterans
remains central, ensuring that our success continues to create
meaningful impact in the communities we serve.”
“We’ve made meaningful improvements across several key financial
metrics this year, including gross margin, adjusted EBITDA, net
income, and free cash flow,” said BRCC Chief Financial Officer
Steve Kadenacy. “Our third-quarter performance showcases our
continued focus on improving operational excellence. Our Wholesale
business continues to gain momentum, laying the foundation for
growth across multiple product categories and channels over the
coming years. We remain on track to have our coffee products in
most major grocery chains by the end of 2025, and we are confident
that the rollout of our energy drink will open new market
opportunities and further accelerate our growth.”
Third Quarter 2024 Financial Highlights
(in millions, except % data)
Quarter To Date
Comparisons
2024
2023
$ Change
% Change
Net Revenue
$
98.2
$
100.5
$
(2.3
)
(2
)%
Gross Profit
$
41.3
$
34.1
$
7.2
21
%
Gross Margin
42.1
%
33.9
%
Net Loss
$
(1.4
)
$
(10.7
)
$
9.3
Adjusted EBITDA
$
7.1
$
6.2
$
0.9
Third Quarter 2024
Results
Third quarter 2024 revenue decreased 2.3% to $98.2 million from
$100.5 million in the third quarter of 2023. Wholesale revenue
increased 3.5% to $63.7 million in the third quarter of 2024 from
$61.5 million in the third quarter of 2023. Direct-to-Consumer
("DTC") revenue decreased 11.4% to $29.0 million in the third
quarter of 2024 from $32.8 million during the third quarter of
2023. Revenue from Black Rifle Coffee shops ("Outposts") decreased
11.4% to $5.5 million in the third quarter of 2024 from $6.2
million in the third quarter of 2023. The Wholesale channel
performance was primarily driven by continued penetration into the
Food, Drug and Mass (“FDM”) market and growth in our Ready-to-Drink
(“RTD”) product. RTD product sales increased through national
distributors and retail accounts as our All Commodity Volume
("ACV") percentage increased 530 basis points to 47.3%. The
decrease in DTC performance was primarily due to lower customer
acquisition as we strategically shifted advertising spend to other
areas of the business with higher returns. Outpost revenue
decreased due to lower transaction volumes.
Gross profit increased to $41.3 million in the third quarter of
2024 from $34.1 million in the third quarter of 2023, an increase
of 21.4% year over year, with gross margin increasing 820 basis
points to 42.1% from 33.9% for the third quarter of 2023, driven by
product mix shift, productivity improvements in our RTD products,
lowering warehousing costs, and favorable changes in inventory
reserves.
Marketing expenses increased 22.4% to $10.1 million in the third
quarter of 2024 from $8.3 million in the third quarter of 2023. As
a percentage of revenue, marketing expenses increased 210 basis
points to 10.3% in the third quarter of 2024 as compared to 8.2% in
the third quarter of 2023 as due to our expansion of partnerships,
including our engagement with UFC, higher advertising spend,
incremental shopper marketing, and an increase in trade
promotions.
Salaries, wages and benefits expenses increased 19.0% to $16.5
million in the third quarter of 2024 from $13.9 million in the
third quarter of 2023. As a percentage of revenue, salaries, wages
and benefits expenses increased 300 basis points to 16.9% in the
third quarter of 2024 as compared to 13.8% for the third quarter of
2023. The increase was related to a reduction in incentive
compensation in the third quarter of 2023.
General and administrative ("G&A") expenses decreased 36.7%
to $12.3 million in the third quarter of 2024 from $19.5 million in
the third quarter of 2023. As a percentage of revenue, G&A
decreased 680 basis points to 12.5% in the third quarter of 2024 as
compared to 19.4% in the third quarter of 2023 due to reductions in
our corporate infrastructure and support that were inefficient or
duplicative, including professional services, information
technology, and office space.
Net loss for the third quarter of 2024 was $1.4 million and
Adjusted EBITDA was $7.1 million. This compares to net loss of
$10.7 million and Adjusted EBITDA of $6.2 million in the third
quarter of 2023.
Financial Outlook
BRC Inc. provides guidance based on current market conditions
and expectations for revenue, gross margin, adjusted EBITDA, and
free cash flow. Adjusted EBITDA and free cash flow are non-GAAP
financial measures.
For the full-year fiscal 2024, the Company updated its
previous guidance as follows:
FY2023
FY2024 Guidance (prev.
reported)
FY2024 Guidance
(Updated)
Actual
Low
High
Low
High
Net Revenue (1)
$
395.6
$
385.0
$
415.0
$
390.0
$
395.0
Growth
31
%
(3
)%
5
%
(1
)%
—
Gross Margin
32
%
39
%
42
%
40
%
42
%
Adj. EBITDA
$
13.3
$
32.0
$
42.0
$
35.0
$
40.0
Free Cash Flow Conversion
80%
FCF positive for year
(1) A barter transaction favorably impacted Net Revenue in 2023
by $28.9 million and projected Net Revenue in 2024 by $15.2
million. Excluding the impact of the barter transaction reduces
revenue growth from 2022 to 2023 by 10%.
The guidance provided above constitutes forward-looking
statements and actual results may differ materially. Refer to the
“Forward-Looking Statements” safe harbor section below for
information on the factors that could cause our actual results to
differ materially from these forward-looking statements.
We have not reconciled forward-looking (i) Adjusted EBITDA to
its most directly comparable GAAP measure, net income (loss), or
(ii) Free Cash Flow Conversion to its most directly comparable GAAP
measure, net cash provided by (used in) operating activities, in
each case in reliance on the unreasonable efforts exception
provided under Item 10(e)(1)(i)(B) of Regulation S-K. We cannot
predict with reasonable certainty the ultimate outcome of certain
components of such reconciliations, including market-related
assumptions that are not within our control, or others that may
arise, without unreasonable effort. For these reasons, we are
unable to assess the probable significance of the unavailable
information, which could materially impact the amount of future net
income (loss) and net cash provided by operating activities. See
“Non-GAAP Financial Measures” for additional important information
regarding Adjusted EBITDA and Free Cash Flow Conversion.
Conference Call
A conference call to discuss the Company’s third quarter results
is scheduled for November 5, 2024, at 8:30 a.m. ET. Those who wish
to participate in the call may do so by dialing (877) 407-0609 or
(201) 689-8541 for international callers. A webcast of the call
will be available on the investor relation's page of the Company’s
website at ir.blackriflecoffee.com. For those unable to attend the
conference call, a replay will be available after the conclusion of
the call through November 12, 2024. The U.S. toll-free replay
dial-in number is (877) 660-6853, and the international replay
dial-in number is (201) 612-7415. The replay passcode is
13749067.
About BRC Inc.
Black Rifle Coffee Company (BRCC) is a Veteran-founded coffee
company serving premium coffee to people who love America. Founded
in 2014 by Green Beret Evan Hafer, Black Rifle develops their
explosive roast profiles with the same mission focus they learned
while serving in the military. BRCC is committed to supporting
Veterans, active-duty military, first responders and the American
way of life.
To learn more, visit www.blackriflecoffee.com, subscribe to the
BRCC newsletter, or follow along on social media.
Forward-Looking
Statements
This press release contains forward-looking statements about the
Company and its industry that involve substantial risks and
uncertainties. All statements other than statements of historical
fact contained in this press release, including statements
regarding the Company’s intentions, beliefs or current expectations
concerning, among other things, the launch of Black Rifle Energy™,
the Company’s financial condition, liquidity, prospects, growth,
strategies, future market conditions, developments in the capital
and credit markets and expected future financial performance, as
well as any information concerning possible or assumed future
results of operations, are forward-looking statements. In some
cases, you can identify forward-looking statements because they
contain words such as “anticipate,” “believe,” “continue,” “could,”
“estimate,” “expect,” “intends,” “may,” “might,” “plan,”
“possible,” “potential,” “predict,” “project,” “should,” “will,”
“would” and similar expressions, but the absence of these words
does not mean that a statement is not forward-looking.
The events and circumstances reflected in the Company’s
forward-looking statements may not be achieved or occur and actual
results could differ materially from those projected in the
forward-looking statements. Factors that may cause such
forward-looking statements to differ from actual results include,
but are not limited to: competition and our ability to grow and
manage growth sustainably and retain our key employees; failure to
achieve sustained profitability; negative publicity affecting our
brand and reputation, or the reputation of key employees; failure
to manage our debt obligations; failure to effectively launch new
products, including Black Rifle Energy™; failure to effectively
make use of assets received under bartering transactions; failure
by us to maintain our message as a supportive member of the Veteran
and military communities and any other factors which may negatively
affect the perception of our brand; our limited operating history,
which may make it difficult to successfully execute our strategic
initiatives and accurately evaluate future risks and challenges;
failed marketing campaigns, which may cause us to incur costs
without attracting new customers or realizing higher revenue;
failure to attract new customers or retain existing customers;
risks related to the use of social media platforms, including
dependence on third-party platforms; failure to provide
high-quality customer experience to retail partners and end users,
including as a result of production defaults, or issues, including
due to failures by one or more of our co-manufacturers, affecting
the quality of our products, which may adversely affect our brand;
decrease in success of the direct to consumer revenue channel; loss
of one or more co-manufacturers, or delays, quality, or other
production issues, including labor-related production issues at any
of our co-manufacturers; failure to manage our supply chain, and
accurately forecast our raw material and co-manufacturing
requirements to support our needs; failure to effectively manage or
distribute our products through our Wholesale business partners,
especially our key Wholesale business partners; failure by third
parties involved in the supply chain of coffee, store supplies or
merchandise to produce or deliver products, including as a result
of ongoing supply chain disruptions, or our failure to effectively
manage such third parties; changes in the market for high-quality
coffee beans and other commodities; fluctuations in costs and
availability of real estate, labor, raw materials, equipment,
transportation or shipping; failure to successfully compete with
other producers and retailers of coffee; failure to successfully
open new Black Rifle Coffee shops ("Outposts"), including failure
to timely proceed through permitting and other development
processes, or the failure of any new or existing Outposts to
generate sufficient sales; failure to properly manage our rapid
growth, inventory needs, and relationships with various business
partners; failure to protect against software or hardware
vulnerabilities; failure to build brand recognition using our
intellectual properties or otherwise; shifts in consumer spending,
lack of interest in new products or changes in brand perception
upon evolving consumer preferences and tastes; failure to
adequately maintain food safety or quality and comply with food
safety regulations; failure to successfully integrate into new
domestic and international markets; risks related to leasing space
subject to long-term non-cancelable leases and with respect to real
property; failure of our franchise partners to successfully manage
their franchises; failure to raise additional capital to develop
the business; risks related to supply chain disruptions; risks
related to unionization of employees; failure to comply with
federal state and local laws and regulations, or failure to prevail
in civil litigation matters; and other risks and uncertainties
indicated in our Annual Report on Form 10-K for the year ended
December 31, 2023 filed with the Securities and Exchange Commission
(the “SEC”) on March 6, 2024 including those set forth under “Item
1A. Risk Factors” included therein, as well as in our other filings
with the SEC. Such forward-looking statements are based on
information available as of the date of this press release and the
Company’s current beliefs and expectations concerning future
developments and their effects on the Company. Because
forward-looking statements are inherently subject to risks and
uncertainties, some of which cannot be predicted or quantified, you
should not place undue reliance on these forward-looking statements
as predictions of future events. Although the Company believes that
it has a reasonable basis for each forward-looking statement
contained in this press release, the Company cannot guarantee that
the future results, growth, performance or events or circumstances
reflected in these forward-looking statements will be achieved or
occur at all. These forward-looking statement speak only as of the
date of this press release. The Company does not undertake any
obligation to update or revise any forward-looking statements,
whether as a result of new information, future events or otherwise,
except as may be required under applicable securities laws.
BRC Inc. CONSOLIDATED
STATEMENTS OF OPERATIONS (in thousands, except share and per
share amounts)
Three Months Ended September
30,
Nine Months Ended
September 30,
2024
2023
2024
2023
Revenue, net
$
98,204
$
100,536
$
285,613
$
275,974
Cost of goods sold
56,856
66,477
164,822
182,197
Gross profit
41,348
34,059
120,791
93,777
Operating expenses
Marketing and advertising
10,109
8,260
25,129
22,418
Salaries, wages and benefits
16,548
13,907
49,419
52,087
General and administrative
12,324
19,474
38,619
56,529
Other operating expense (income), net
1,261
(596
)
1,584
734
Total operating expenses
40,242
41,045
114,751
131,768
Operating income (loss)
1,106
(6,986
)
6,040
(37,991
)
Non-operating expenses
Interest expense, net
(2,453
)
(3,544
)
(6,805
)
(4,658
)
Other (expense) income, net
—
(108
)
—
138
Total non-operating expenses
(2,453
)
(3,652
)
(6,805
)
(4,520
)
Loss before income taxes
(1,347
)
(10,638
)
(765
)
(42,511
)
Income tax expense
50
56
151
169
Net loss
$
(1,397
)
$
(10,694
)
$
(916
)
$
(42,680
)
Less: Net loss attributable to
non-controlling interest
(862
)
(7,462
)
(446
)
(30,420
)
Net loss attributable to BRC
Inc.
$
(535
)
$
(3,232
)
$
(470
)
$
(12,260
)
Net loss per share attributable to
Class A Common Stock
Basic and diluted
$
(0.01
)
$
(0.05
)
$
(0.01
)
$
(0.21
)
Weighted-average shares of Class A
Common Stock outstanding
Basic and diluted
72,154,931
61,964,157
68,904,034
59,738,542
BRC Inc. CONSOLIDATED
BALANCE SHEETS (in thousands, except share and par value
amounts)
September 30,
December 31,
2024
2023
Assets
Current assets:
Cash and cash equivalents
$
7,336
$
12,448
Restricted cash
315
1,465
Accounts receivable, net
28,884
25,207
Inventories, net
50,210
56,465
Prepaid expenses and other current
assets
16,243
12,153
Total current assets
102,988
107,738
Property, plant and equipment, net
64,670
68,326
Operating lease, right-of-use asset
29,293
36,214
Identifiable intangibles, net
373
418
Other
36,340
23,080
Total assets
$
233,664
$
235,776
Liabilities and stockholders'
equity
Current liabilities:
Accounts payable
$
31,227
$
33,564
Accrued liabilities
36,412
34,911
Deferred revenue and gift card
liability
4,869
11,030
Current maturities of long-term debt
15,866
2,297
Current operating lease liability
2,195
2,249
Current maturities of finance lease
obligations
19
58
Total current liabilities
90,588
84,109
Non-current liabilities:
Long-term debt, net
49,034
68,683
Finance lease obligations, net of current
maturities
—
23
Operating lease liability
29,336
35,929
Other non-current liabilities
11,141
524
Total non-current liabilities
89,511
105,159
Total liabilities
180,099
189,268
Stockholders' equity:
Preferred Stock, $0.0001 par value,
1,000,000 shares authorized; no shares issued and outstanding as of
September 30, 2024 and December 31, 2023, respectively
—
—
Class A Common Stock, $0.0001 par value,
2,500,000,000 shares authorized; 77,265,412 and 65,637,806 shares
issued and outstanding as of September 30, 2024 and December 31,
2023, respectively
8
6
Class B Common Stock, $0.0001 par value,
300,000,000 shares authorized; 135,473,335 and 146,484,989 shares
issued and outstanding as of September 30, 2024 and December 31,
2023, respectively
14
15
Class C Common Stock, $0.0001 par value,
1,500,000 shares authorized; no shares issued or outstanding as of
September 30, 2024 and December 31, 2023, respectively
—
—
Additional paid in capital
135,453
133,728
Accumulated deficit
(120,947
)
(120,478
)
Total BRC Inc.'s stockholders' equity
14,528
13,271
Non-controlling interests
39,037
33,237
Total stockholders' equity
53,565
46,508
Total liabilities and stockholders'
equity
$
233,664
$
235,776
BRC Inc. CONSOLIDATED
STATEMENTS OF CASH FLOWS (in thousands)
Nine Months Ended September
30,
2024
2023
Operating activities
Net loss
$
(916
)
$
(42,680
)
Adjustments to reconcile net income (loss)
to net cash provided by (used in) operating activities:
Depreciation and amortization
7,458
5,354
Equity-based compensation
7,862
5,645
Amortization of debt issuance costs
908
260
Loss on disposal of assets
1,236
3,622
Paid-in-kind interest
2,014
—
Other
30
252
Changes in operating assets and
liabilities:
Accounts receivable, net
(3,960
)
(2,284
)
Inventories, net
(8,965
)
(14,190
)
Prepaid expenses and other assets
(2,289
)
(7,374
)
Accounts payable
(1,010
)
12,629
Accrued liabilities
1,081
(3,285
)
Deferred revenue and gift card
liability
(6,161
)
655
Operating lease liability
462
915
Other liabilities
11,395
122
Net cash provided by (used in) operating
activities
9,145
(40,359
)
Investing activities
Purchases of property, plant and
equipment
(7,007
)
(18,872
)
Proceeds from sale of property and
equipment
911
5,576
Net cash used in investing activities
(6,096
)
(13,296
)
Financing activities
Proceeds from issuance of long-term debt,
net of discount
206,182
294,501
Debt issuance costs paid
(164
)
(3,876
)
Repayment of long-term debt
(214,751
)
(267,381
)
Financing lease obligations
(62
)
(73
)
Repayment of promissory note
(1,047
)
(1,047
)
Issuance of stock from the Employee Stock
Purchase Plan
518
673
Proceeds from exercise of stock
options
13
—
Net cash (used in) provided by financing
activities
(9,311
)
22,797
Net decrease in cash, cash equivalents and
restricted cash
(6,262
)
(30,858
)
Cash and cash equivalents, beginning of
period
12,448
38,990
Restricted cash, beginning of period
1,465
—
Cash and cash equivalents, end of
period
$
7,336
$
6,667
Restricted cash, end of period
$
315
$
1,465
BRC Inc. CONSOLIDATED
STATEMENTS OF CASH FLOWS (CONTINUED) (in thousands)
Nine Months Ended September
30,
2024
2023
Non-cash operating activities
(Derecognition) Recognition of
right-of-use operating lease assets
$
(5,363
)
$
15,913
Recognition of revenue for inventory
exchanged for prepaid advertising
$
15,220
$
7,480
Non-cash investing and financing
activities
Property and equipment purchased but not
yet paid
$
530
$
3,349
Supplemental cash flow
information
Cash paid for income taxes
$
385
$
665
Cash paid for interest
$
5,372
$
2,591
KEY OPERATING AND FINANCIAL METRICS
Revenue by Sales Channel
(in thousands)
Three Months Ended September
30,
Nine Months Ended September
30,
2024
2023
2024
2023
Wholesale
$
63,655
$
61,527
$
177,844
$
151,534
Direct to Consumer
29,044
32,794
91,628
104,160
Outpost
5,505
6,215
16,141
20,280
Total net sales
$
98,204
$
100,536
$
285,613
$
275,974
Key Operational Metrics
September 30,
2024
2023
FDM ACV %
47.2
%
34.1
%
RTD ACV %
47.3
%
42.0
%
DTC Subscribers
194,000
230,300
Outposts
Company-owned stores
18
17
Franchise stores
19
17
Total Outposts
37
34
Non-GAAP Financial Measures
To evaluate the performance of our business, we rely on both our
results of operations recorded in accordance with generally
accepted accounting principles in the United States ("GAAP") and
certain non-GAAP financial measures, including EBITDA, Adjusted
EBITDA, Free Cash Flow Conversion, and Free Cash Flow. These
measures, as defined below, are not defined or calculated under
principles, standards or rules that comprise GAAP. Accordingly, the
non-GAAP financial measures we use and refer to should not be
viewed as a substitute for performance measures derived in
accordance with GAAP or as a substitute for a measure of liquidity.
Our definitions of EBITDA, Adjusted EBITDA, Free Cash Flow
Conversion, and Free Cash Flow described below are specific to our
business and you should not assume that they are comparable to
similarly titled financial measures of other companies. We define
EBITDA as net income (loss) before interest, tax expense,
depreciation and amortization expense. We define Adjusted EBITDA,
as adjusted for equity-based compensation, system implementation
costs, executive, recruiting, relocation and sign-on bonus,
write-off of site development costs, strategic initiative related
costs, non-routine legal expenses, RTD start-up production issues,
contract termination costs, restructuring fees and related costs,
RTD transformation costs, and impairment for assets held for
sale.
When used in conjunction with GAAP financial measures, we
believe that EBITDA and Adjusted EBITDA are useful supplemental
measures of operating performance and liquidity because these
measures facilitate comparisons of historical performance by
excluding non-cash items such as equity-based payments and other
amounts not directly attributable to our primary operations, such
as the impact of system implementation, acquisitions, disposals,
litigation and settlements. Adjusted EBITDA is also a key metric
used internally by our management to evaluate performance and
develop internal budgets and forecasts. EBITDA and Adjusted EBITDA
have limitations as an analytical tool and should not be considered
in isolation or as a substitute for analyzing our results as
reported under GAAP and may not provide a complete understanding of
our operating results as a whole. Some of these limitations are (i)
they do not reflect changes in, or cash requirements for, our
working capital needs, (ii) they do not reflect our interest
expense or the cash requirements necessary to service interest or
principal payments on our debt, (iii) they do not reflect our tax
expense or the cash requirements to pay our taxes, (iv) they do not
reflect historical capital expenditures or future requirements for
capital expenditures or contractual commitments, (v) although
equity-based compensation expenses are non-cash charges, we rely on
equity compensation to compensate and incentivize employees,
directors and certain consultants, and we may continue to do so in
the future and (vi) although depreciation, amortization and
impairments are non-cash charges, the assets being depreciated and
amortized will often have to be replaced in the future, and these
non-GAAP measures do not reflect any cash requirements for such
replacements.
Free Cash Flow is a non-GAAP liquidity measure used by
investors, financial analysts and management to help evaluate the
Company's ability to generate cash to pursue opportunities that
enhance shareholder value. We define Free Cash Flow as net cash
provided by (used in) operating activities less cash outflows for
purchases of property, plant and equipment. We revised our
definition of Free Cash Flow from the definition used in the second
quarter of 2024, which was net cash provided by (used in) operating
activities less cash outflows for purchases of property, plant and
equipment plus proceeds from sale of property and equipment. We
believe our updated definition ensures a more accurate reflection
of ongoing operational performance by excluding asset sales which
are non-recurring and could distort the sustainability of cash flow
generation. The impact of the change in our definition of Free Cash
Flow reduces Free Cash Flow by the amount of cash inflows due to
the sale of assets.
We believe the presentation of Free Cash Flow is relevant and
useful for investors because it measures cash generated internally
that is available to service debt and fund inorganic growth or
acquisitions. Free Cash Flow is the cash flow from operations after
payment of capital expenditures that we can use to invest in our
business and meet our current and future financing needs.
We define Free Cash Flow Conversion as Free Cash Flow divided by
Adjusted EBITDA. We believe that Free Cash Flow Conversion is
useful to the users of our financial statements as it is a measure
of the Company's long-term cash flow generating capacity.
Free Cash Flow and Free Cash Flow Conversion are limited due to
the fact that these are not measures of residual cash flow
available for discretionary expenditures due to the payments
required for debt service and other financing activities.
A reconciliation of net income (loss), the most directly
comparable GAAP measure, to EBITDA and Adjusted EBITDA is set forth
below:
Reconciliation of Net Income (Loss) to
Adjusted EBITDA
(amounts in thousands)
Three Months Ended September
30,
Nine Months Ended September
30,
2024
2023
2024
2023
Net loss
$
(1,397
)
$
(10,694
)
$
(916
)
$
(42,680
)
Interest expense
2,453
3,544
6,805
4,658
Tax expense
50
56
151
169
Depreciation and amortization
2,661
2,002
7,458
5,354
EBITDA
$
3,767
$
(5,092
)
$
13,498
$
(32,499
)
Equity-based compensation(1)
2,605
596
7,862
5,645
System implementation costs(2)
—
1,195
520
3,057
Executive recruiting, relocation and
sign-on bonus(3)
—
477
279
1,544
Write-off of site development costs(4)
441
1,430
2,663
2,492
Strategic initiative related costs(5)
—
—
—
1,505
Non-routine legal expense(6)
291
3,134
2,335
7,381
RTD start-up and production issues(7)
—
—
—
2,394
Contract termination costs(8)
—
—
—
730
Restructuring fees and related
costs(9)
—
1,911
266
5,120
RTD transformation costs(10)
—
3,649
2,260
3,649
(Gain) Loss on assets held for
sale(11)
—
(1,097
)
—
105
Adjusted EBITDA
$
7,104
$
6,203
$
29,683
$
1,123
(1)
Represents the non-cash expense related to
our equity-based compensation arrangements for employees,
directors, consultants and a Wholesale channel partner.
(2)
Represents non-capitalizable costs
associated with the implementation of our enterprise-wide
systems.
(3)
Represents payments made for executive
recruitment, relocation, and sign-on bonuses connected with RTD
transformation.
(4)
Represents the write-off of development
costs for abandoned retail locations.
(5)
Represents nonrecurring third-party
consulting costs related to the planning and execution of our
growth and productivity strategic initiatives.
(6)
Represents legal costs and fees incurred
in connection with certain non-routine legal disputes consisting of
certain claims relating to deSPAC warrants and a commercial dispute
with a former consultant resulting from the Company in-housing
certain activities.
(7)
Represents nonrecurring, non-cash costs
and expense incurred as a result of our RTD start-up and production
issue.
(8)
Represents nonrecurring costs incurred for
early termination of software and service contracts.
(9)
Represents restructuring advisory fees,
severance, and other related costs associated with RTD
transformation.
(10)
Represents non-recurring, non-cash or
non-operational costs associated with the transformation of our RTD
business (excluding those reported separately in (3) and (9)
including loss on write-off of RTD inventory, discounts recognized
on non-cash transactions, and other non-cash costs to transform our
RTD business.
(11)
Represents the adjustment recorded to
recognize assets held for sale at their estimate net realizable
value less estimated cost to sell.
A reconciliation of net cash provided by (used in) operating
activities, a GAAP measure, to free cash flow, a non-GAAP measure
is set forth below:
Reconciliation of Net Cash Provided by
(Used in) Operating Activities to Free Cash Flow
(amounts in thousands)
Three Months Ended September
30,
Nine Months Ended September
30,
2024
2023
2024
2023
Net cash provided by (used in) operating
activities
$
1,933
$
98
$
9,145
$
(40,359
)
Capital expenditures
(2,138
)
(8,863
)
(7,007
)
(18,872
)
Free Cash Flow
$
(205
)
$
(8,765
)
$
2,138
$
(59,231
)
View source
version on businesswire.com: https://www.businesswire.com/news/home/20241104052379/en/
Investor Contacts: Matt McGinley: IR@BlackRifleCoffee.com
ICR for BRCC: BlackrifleIR@icrinc.com
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