SALT LAKE CITY, USA – BRC Inc., a rapidly growing and mission-driven premium coffee company founded to support Veterans, active-duty military and first responders and serve a broad customer base by connecting consumers with great coffee and a unique brand experience, today announced financial results for the fourth quarter and full year 2022.
“The momentum of the Black Rifle Coffee brand has been incredible throughout 2022. We’ve moved from a small, niche DTC brand to a mainstream CPG business in less than a couple of years,” said BRCC Founder and CEO Evan Hafer.
“We’ve entered the Food, Drug and Mass (FDM) market and in less than six months have become the number four bagged coffee brand at Walmart and currently represent 3.8% of their total coffee aisle. Outside of FDM, our Ready-to-Drink coffee products have been the fastest-growing RTD coffee brand outpacing the category by almost four times. We also have collaborated with some of the most recognizable brands on the planet with our announcement of becoming the official coffee of the Dallas Cowboys and partnering with Amazon Prime Video on a co-branded coffee for the launch of the “Terminal List.”
“In 2023, we will build on this foundation with our commitment to profitable, sustainable growth. Now that we have built much of our infrastructure for growth in the wholesale channel, we have begun to realize efficiencies and have implemented a number of productivity initiatives throughout the business. These initiatives will result in us generating meaningful profitability in 2023 and beyond. The team is laser-focused on ensuring these results as we recognize profitable growth is the only way to sustain our brand momentum and continue giving back to veterans, active-duty military, first responders and their families. That mission is the foundation for this business and drives us in everything we do.”
Recent Business Highlights for Brc Inc.
- Ready to Drink (RTD) doors grew 44.5% to 61,230 from 42,370 in 2021
- Wholesale doors ended 2022 at 10,690, an increase of 306.5% from 2021
- Direct to Consumer (DTC) subscribers ended the year at 270,000 a 6.0% decrease from 2021
- Ended the year with 26 Outposts, 15 company-owned and 11 franchised
Fourth Quarter 2022 Financial Details
- Net revenue of $93.6 million, an increase of 30.3% year-over-year
- Gross profit increased 19.4% to $29.5 million or 31.5% of net revenue
- Net loss of $20.0 million
- Adjusted EBITDA (non-GAAP) of $(11.4) million (for more information regarding the non-GAAP financial measures discussed in this press release, see “Non-GAAP Financial Measures” below)
BRC Inc.: Full Year 2022 Financial Details
- Net revenue of $301.3 million, an increase of 29.3% year-over-year
- Gross profit increased 10.6% to $99.2 million or 32.9% of net revenue
- Net loss of $338.0 million, including $268.7 million equity fair value adjustments
- Adjusted EBITDA (non-GAAP) of $(34.0) million
BRC Inc.: Fourth Quarter 2022 Results
Fourth quarter 2022 revenue increased 30.3% to $93.6 million from $71.8 million the fourth quarter of 2021. Direct to Consumer revenue decreased 8.1% to $45.6 million compared to $49.6 million in the fourth quarter of 2021. Wholesale revenue increased 140.1% to $41.2 million compared to $17.2 million in the fourth quarter of 2021, and our Outpost revenue increased 34.3% to $6.8 million versus $5.1 million in the fourth quarter of 2021. The year-over-year growth in revenue was primarily driven by entry into FDM and the continued growth in our Wholesale revenue channel due to expanding points of distribution and strong retail velocities in addition to the opening of four company owned outposts in Q4 of 2022.
Gross profit increased 19.4% to $29.5 million compared to $24.7 million in the fourth quarter of 2021. Gross margins decreased 290 basis points to 31.5% from 34.3% for the fourth quarter of 2021. The decrease in our gross margins was driven by inflationary pressures on product and shipping costs (not yet offset by price increases) and startup costs associated with the expansion of our Ready to Drink product.
Marketing expenses increased 22.5% to $13.6 million from $11.1 million in the fourth quarter of 2021. This increase was driven by increased advertising expenditure to increase brand awareness as well as increased costs for production of content. As a percentage of revenue, marketing decreased 90 bps to 14.5% versus 15.4% in the fourth quarter of 2021.
Salaries, wages and benefits increased 87.8% to $16.9 million from $9.0 million in the fourth quarter of 2021, primarily due to the building out of the management teams within the wholesale channel. As a percentage of revenue, salaries, wages and benefits increased 550 bps to 18.0% as compared to 12.5% for the fourth quarter of 2021.
G&A expenses increased 112.6% to $18.5 million compared to $8.7 million in the fourth quarter of 2021. This increase is due primarily to increased technology costs and professional services. As a percentage of revenue, G&A increased 760 basis points to 19.7% compared to 12.1% in the fourth quarter of 2021.
In the fourth quarter of 2022, we had a net loss of $20.0 million and adjusted EBITDA of $(11.4) million. In the fourth quarter of 2021, net loss was $4.6 million and adjusted EBITDA was $(0.9) million.
Financial Outlook
BRC Inc. provides guidance based on current market conditions and expectations for revenue, gross margin and adjusted EBITDA, which is a non-GAAP financial measure.
For the full-year fiscal 2023, the Company expects:
- Net revenue of $400-$440 million
- Gross Margin Target of 36% – 37.5%
- Adjusted EBITDA of $5M – $20M
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 Adjusted EBITDA to its most directly comparable GAAP measure, net income (loss), because 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 loss. See “Non-GAAP Financial Measures” for additional important information regarding Adjusted EBITDA.
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.
