BRC (US:BRCC)2024-08-07 20:19Financial Performance - Revenue for the three months ended June 30, 2024, was $89,017 thousand, a decrease of 3.2% compared to $91,947 thousand for the same period in 2023[8] - Gross profit for the six months ended June 30, 2024, increased to $79,443 thousand, up 33.1% from $59,717 thousand in the prior year[8] - Operating income for the three months ended June 30, 2024, was $978 thousand, a significant improvement from a loss of $13,661 thousand in the same quarter of 2023[8] - Net income attributable to BRC Inc. for the six months ended June 30, 2024, was $67 thousand, compared to a loss of $9,028 thousand for the same period in 2023[8] - Total operating expenses for the three months ended June 30, 2024, were $36,281 thousand, down 20.9% from $45,867 thousand in the prior year[8] - Net income for the six months ended June 30, 2024, was $482,000, a significant improvement from a net loss of $31,986,000 in the same period of 2023[11] - Net loss attributable to BRC Inc. was $482,000 in Q2 2024, compared to a loss of $4,228,000 in Q2 2023[10] - Basic and diluted net income (loss) per share for Q2 2024 was $(0.01), an improvement from $(0.07) in Q2 2023[8] Assets and Liabilities - Total current assets decreased from $107.738 million as of December 31, 2023, to $99.369 million as of June 30, 2024, representing a decline of approximately 7.5%[7] - Cash and cash equivalents decreased from $12.448 million to $9.642 million, a reduction of about 22.5%[7] - Total liabilities decreased from $189.268 million to $177.728 million, a decrease of approximately 6.1%[7] - Long-term debt decreased from $68.683 million to $52.450 million, a reduction of about 23.6%[7] - Total stockholders' equity increased from $46.508 million to $52.154 million, an increase of approximately 12.5%[7] - The balance of total stockholders' equity at June 30, 2024, was $52,154 thousand, reflecting a decrease from $69,304 thousand at June 30, 2023[10] - The company reported a decrease in cash and cash equivalents to $9,642,000 at the end of June 2024, down from $19,782,000 at the end of June 2023[11] Revenue Channels - Franchise store revenues for the three months ended June 30, 2024, were $89,017 thousand, a decrease of 3.2% compared to $91,947 thousand for the same period in 2023[34] - Wholesale channel revenue increased to $53,761 thousand for the three months ended June 30, 2024, up 7.0% from $50,010 thousand in 2023[34] - Direct to Consumer channel revenue decreased to $29,970 thousand for the three months ended June 30, 2024, down 13.0% from $34,586 thousand in 2023[34] - Outpost channel revenue decreased to $5,286 thousand for the three months ended June 30, 2024, down 28.1% from $7,351 thousand in 2023[34] - Total net sales for the six months ended June 30, 2024, were $187,409 thousand, an increase of 6.0% compared to $175,437 thousand for the same period in 2023[34] - The company disaggregates revenue by sales channel, with the majority derived from customers located in the United States[34] Cost Management - Total operating expenses for the three months ended June 30, 2024, decreased by $9.6 million, or 21%, to $36.3 million compared to $45.9 million in 2023[143] - General and administrative expenses for the three months ended June 30, 2024, decreased by $8.3 million, or 43%, to $10.9 million compared to $19.3 million in 2023[144] - Cost of goods sold for the three months ended June 30, 2024, decreased by $8.0 million, or 13%, to $51.8 million compared to $59.7 million for the same period in 2023[142] - Operating expenses decreased by $16.1 million, or 18%, to $74.5 million, with significant reductions in general and administrative expenses[152] Strategic Initiatives - The company plans to launch Black Rifle Energy™ as part of its future growth strategy[4] - The company is focused on expanding its market presence and integrating into new domestic and international markets[5] - The loyalty rewards program allows customers to earn 5% on purchases for subscription customers and 1% for non-subscription customers, enhancing customer retention[26] - The company expects to recognize $3,361,000 in revenue due to changes in loyalty points redemption policy, reflecting a proactive approach to customer engagement[27] Debt and Financing - Proceeds from the issuance of long-term debt were $111,601,000 in 2024, compared to $199,034,000 in 2023, indicating a reduction in new debt financing[11] - Cash paid for interest increased to $3,567,000 in 2024 from $1,324,000 in 2023, indicating higher borrowing costs[12] - Interest expense for the three months ended June 30, 2024, increased to $(2,301) thousand, compared to $(791) thousand in the same period last year[8] - The company has a minimum liquidity requirement of at least $15,000,000, which reduces to $7,500,000 following the Availability Block Release Date[80] Customer and Market Insights - The company has approximately 201,200 subscribers as of June 30, 2024, indicating a decline in the Direct to Consumer (DTC) channel as distribution points expanded[120] - The DTC channel experienced a $4.6 million decrease in revenue, while the Outpost channel saw a $2.1 million decrease, partially offset by a $3.8 million increase in Wholesale revenues[124] - One wholesale customer and its affiliate represented 30% of revenue for the three months ended June 30, 2024[34] Legal and Compliance - The Company is subject to various legal actions, but does not believe these will have a material adverse effect on its operations or financial condition[111] - The Company has accrued $320 related to potential sales and other tax exposure as of June 30, 2024, included in accrued liabilities[113] - The Company included $2,000 in accrued liabilities related to a legal matter concerning breach of contract[119]