BRC (BRCC)2025-03-04 22:38Financial Data and Key Metrics Changes - Revenue declined by 1% in 2024 compared to 2023, with solid growth in bag coffee, pods, RTD coffee, and energy [32] - Adjusted EBITDA tripled in 2024, with adjusted EBITDA margin improving from 3.2% in 2023 to 10% in 2024 [38] - Gross margin improved by 950 basis points to 41.2% in 2024, driven by supply chain productivity [36] Business Line Data and Key Metrics Changes - Wholesale revenue increased from 57% of total sales in 2023 to 63% in 2024, growing 9% overall [34] - Direct-to-consumer segment revenue declined by 14% in 2024, attributed to increased retail availability and shifting consumer preferences [35] - Packaged coffee saw a 22% growth in 2024, while the overall coffee category declined by 0.5% [11] Market Data and Key Metrics Changes - Nielsen data indicated that the coffee category declined modestly in 2024, but Black Rifle sales grew by 13% in Q4 [11] - Ready-to-drink (RTD) coffee category declined by 8% in 2024, while Black Rifle's RTD sales increased by 0.5% [18] - Black Rifle's market share in the RTD coffee category grew by 50 basis points to 4.6%, making it the 3 brand [19] Company Strategy and Development Direction - The company is focused on driving brand awareness, expanding distribution, and product innovation, including the recent launch of Black Rifle Energy [9] - Strategic investments in operations and infrastructure are aimed at enhancing efficiency and scalability for long-term growth [7] - The company plans to revitalize its direct-to-consumer segment while prioritizing growth in the wholesale channel [15] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving 10% to 15% revenue CAGR and 15% to 25% adjusted EBITDA growth over the next three years [46] - The company anticipates revenue for 2025 to be between 425 million, with gross margin expected to be in the 37% to 39% range [49] - Management noted that the first quarter of 2025 is expected to be the lowest for revenue generation, with sequential increases anticipated throughout the year [48] Other Important Information - The company has locked in over 95% of its pricing and volume commitments for 2025 to mitigate volatility in green coffee prices [50] - A search for a new CFO has been initiated as the current CFO transitions to a role on the Board of Directors [59] Q&A Session Summary Question: What is the expected distribution for Energy by the end of the year? - Management indicated that distribution is growing rapidly, with a goal of reaching between 20% and 30% ACV by year-end [65] Question: When will marketing spend for Energy ramp up? - Marketing spend will begin in March and increase significantly as the summer selling season approaches [70] Question: What are the plans to stabilize the DTC business? - The focus will be on subscription-based programs and stabilizing subscriber counts, with no additional marketing spend for one-time buyers [76][78] Question: What is the trend with the largest customer? - Revenue from the largest customer grew by 8% year-over-year, with expectations of continued growth despite some flattening [87][93] Question: How will barter transactions impact the P&L in 2025? - Media credits from barter transactions will be used efficiently in marketing expenses, providing a cost-effective way to support growth [90][91] Question: What are the plans for price increases? - No price increases are currently included in the 2025 estimates, but there may be opportunities to adjust pricing based on market conditions [100]