Financial Data and Key Metrics Changes - In Q2 2025, net revenue increased by 7% year over year, primarily driven by growth in the wholesale segment [20] - Adjusted EBITDA declined by $5.1 million year over year, totaling $2.4 million for the quarter [23] - Gross margin was 33.9%, reflecting a 790 basis point reduction compared to the prior year, primarily due to green coffee inflation and trade pricing impacts [22][26] Business Line Data and Key Metrics Changes - The wholesale segment, which includes packaged coffee and ready-to-drink beverages, grew by 14% year over year, with a 21% increase when excluding non-recurring revenue from the prior year [20] - Direct-to-consumer (DTC) revenue was 8% lower year over year, but showed slight positive growth when adjusted for prior year loyalty rewards accrual changes [21] - The Outpost segment grew revenue by 11.3%, driven by higher franchise fees and increased average order value [21] Market Data and Key Metrics Changes - Nielsen data indicated a modest decline in unit volume for the U.S. coffee category, while Black Rifle Coffee Company outperformed the category with a 32% sales growth and a 29% increase in unit volume [6][7] - The ready-to-drink coffee business delivered 7% sales growth in a category that declined by 4%, with Black Rifle's unit volume up by 9% [12] - The energy drink segment reached over 15,000 retail locations, achieving 23% ACV [14] Company Strategy and Development Direction - The company is focused on long-term growth by expanding its footprint with key retail partners and investing in critical capabilities [5] - A land and expand strategy is being employed to increase shelf space and product assortment in grocery and mass retailers [9] - The company aims to maintain brand authenticity and community engagement, particularly with service members and veterans [16][96] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the challenging macro cost environment but expressed confidence in the company's ability to navigate changes and position for long-term growth [5] - The company anticipates a sequential increase in revenue and EBITDA in the second half of the year, driven by distribution gains and marketing investments [24][80] - Full-year revenue guidance is maintained at $395 million to $425 million, with expectations of finishing towards the lower end of the range due to prior year revenue headwinds [24] Other Important Information - The company raised $40.25 million in gross proceeds through an equity offering to support the rollout of the energy portfolio and strengthen its balance sheet [28] - The Salt Lake property is currently held for sale as the company seeks a facility more suitable for its current size [62] Q&A Session Summary Question: What are the key drivers for the three-year outlook? - Management indicated that all aspects of the business are growing, including packaged coffee, ready-to-drink, and energy segments, contributing to the long-term growth outlook [34][36] Question: Why did Walmart sales decline year over year? - Management explained that internal sales can fluctuate due to timing of shipments and noted a lost item last year that impacted sales, but takeaway growth remains strong [38][40] Question: How will the company drive higher market share in the RTD segment? - Management emphasized that increasing ACV is a leading indicator for future sales and that they are investing in sales force enhancements to drive share growth [46][49] Question: What are the expectations for pricing in the back half of the year? - Management confirmed that pricing actions were executed in May, which will impact the market in the upcoming quarters [58] Question: What is the strategy for the energy drink rollout? - Management stated that the rollout is disciplined, focusing on limited geographies and national customers, with plans for expansion based on initial successes [66][90]

Second Quarter 2025 Financial Highlights - Net revenue reached $948 million, a 65% increase year-over-year, representing a $58 million rise[13] - Wholesale revenue increased by 141% year-over-year, reaching $613 million, or a 210% increase excluding barter, amounting to $76 million and $106 million respectively[13] - Gross margin was 339%, compared to 419% in Q2 2024[13] - Adjusted EBITDA was $24 million, a decrease of $51 million year-over-year[13] Channel Performance - DTC revenue decreased by 78% year-over-year in Q2 2025, but increased by 03% excluding the impact of loyalty point expirations in Q2 2024[18,22] - Black Rifle Ready to Drink Coffee remains a Top-3 brand in Q2 2025[23] - Black Rifle Energy achieved approximately 23% ACV with distribution in 15200 doors, including 2800 Walmart locations (~66% Walmart ACV), 8900 convenience stores (~7% Convenience Store ACV), and 3250 grocery stores (~12% Grocery Store ACV)[27] Financial Outlook - The company projects net revenues between $395 million and $425 million for 2025, representing a 1% to 9% growth[40] - Gross margin is expected to be in the range of 35% to 37%[40] - Adjusted EBITDA is projected to be between $20 million and $30 million[41]

BRC Inc. (BRCC) came out with a quarterly loss of $0.07 per share versus the Zacks Consensus Estimate of a loss of $0.03. This compares to a loss of $0.01 per share a year ago. These figures are adjusted for non-recurring items.This quarterly report represents an earnings surprise of -133.33%. A quarter ago, it was expected that this company would post a loss of $0.02 per share when it actually produced a loss of $0.04, delivering a surprise of -100%.Over the last four quarters, the company has surpassed co ...

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2025 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ________ to ________ Commission file number 001-41275 BRC Inc. (Exact name of registrant as specified in its charter) (State or other jurisdiction of in ...

| | | | | | Second Quarter Comparisons | | | | --- | --- | --- | --- | --- | --- | --- | --- | | | 2025 | | | 2024 | | $ Change | % Change | | Net Revenue | $ | 94.8 | $ | 89.0 | $ | 5.8 | 6.5 % | | Gross Profit | $ | 32.2 | $ | 37.3 | $ | (5.1) | (13.7)% | | Gross Margin | | 33.9 % | | 41.9 % | | | | | Net Loss | $ | (14.5) | $ | (1.4) | $ | (13.1) | | | Adjusted EBITDA | $ | 2.4 | $ | 7.5 | $ | (5.1) | (68.3)% | 1 Exhibit 99.1 BRC Inc. Reports Second Quarter 2025 Financial Results Financial Highlights SAL ...

Company Overview - BRC Inc. (NYSE: BRCC) is currently expanding its retail distribution while facing challenges in direct-to-consumer sales and margin performance [1] - The company has recently launched an energy drink line in collaboration with Keurig [1] Investment Insights - The investment philosophy focuses on identifying mispriced securities by analyzing the underlying drivers of a company's financials, often revealed through a DCF model valuation [1] - This approach allows for a flexible investment strategy that encompasses various stock prospects, assessing the risk-to-reward ratio [1]

Group 1 - Black Rifle Coffee Company (BRC Inc.) held its Q1 2025 earnings conference call on May 6, 2025, at 8:30 AM ET [1] - The call was hosted by Matthew McGinley, Vice President of Investor Relations, and included key company executives [1][2] - The financial results for Q1 2025 were released prior to the call, and related materials are available on the company's Investor Relations website [3] Group 2 - The conference call included a Safe Harbor statement regarding forward-looking statements, highlighting the risks and uncertainties involved [4] - Non-GAAP financial measures, such as adjusted EBITDA, were discussed during the call, with reconciliations provided in the earnings release [5]

Financial Data and Key Metrics Changes - First quarter revenue declined by 9% year over year, primarily due to $8.5 million in barter transactions and a $3.4 million benefit from a change in loyalty rewards accruals in the previous year. Excluding these items, revenue increased by 4% [18] - Adjusted EBITDA declined by $11.6 million compared to the first quarter of last year, totaling approximately $1 million in Q1 2025 [21] - Gross margin decreased by 680 basis points to 36% of sales, impacted by increased trade investment, green coffee inflation, and changes in loyalty rewards [20] Business Line Data and Key Metrics Changes - The wholesale segment, primarily selling packaged coffee and ready-to-drink beverages, declined by 6% year over year. Excluding non-recurring revenue from the previous year, sales in this segment grew by 9% [18] - Direct-to-consumer (DTC) revenue declined by 15% in the first quarter, but adjusted for last year's loyalty reserve, the decline was closer to 5% [19] - The Outpost segment grew revenue by 2%, driven by higher franchise revenue and increased average order value [19] Market Data and Key Metrics Changes - In the U.S. Food, Drug, and Mass channels, the coffee category declined in unit volume during the first quarter, but Black Rifle Coffee Company achieved 21% sales growth, significantly outperforming the category's 4% increase [8] - The ready-to-drink coffee business saw first-quarter sales up 7% in a category that declined by 6% [12] - Distribution in grocery increased by 25 percentage points year over year to reach 45% [9] Company Strategy and Development Direction - The company is focused on long-term growth by scaling the brand, deepening retail partnerships, and ensuring effective investment in the business [6] - The launch of Black Rifle Energy is a key initiative, with plans to expand distribution and marketing efforts in priority markets [14] - The company is committed to cost reduction and efficiency initiatives, aiming for annualized cost savings of $8 million to $10 million [27] Management's Comments on Operating Environment and Future Outlook - Management acknowledged a challenging operating environment but expressed confidence in the company's positioning and operational progress [28] - The impact of tariffs and green coffee inflation was highlighted, with an estimated $5 million impact on EBITDA in 2025 [24] - The company maintains its full-year revenue guidance of $395 million to $425 million, expecting sequential growth throughout the year [22] Other Important Information - The company continues to make monetary and product donations to military units and first responder organizations, emphasizing its mission-driven approach [15] - The company has implemented a price increase to offset rising green coffee prices, which have more than doubled since early 2024 [25] Q&A Session Summary Question: How does the business react to an economic slowdown? - Management noted that during economic slowdowns, consumers tend to shift from coffee shops to at-home coffee, which can benefit premium brands like Black Rifle [32] Question: What is the outlook on guidance and gross margin changes? - Management explained that increased trade spending and coffee inflation have impacted gross margin, but they expect to manage these challenges effectively [35][36] Question: Can you share early feedback on the energy drink launch? - Management reported positive early feedback on the energy drink launch, with distribution already reaching over 20% of the market [40][41] Question: What strategies are being implemented to stabilize the DTC business? - Management is focusing on improving conversion rates, particularly through the mobile app, while reallocating resources towards wholesale and energy initiatives [51][53] Question: How is pricing being managed in relation to competitors? - Management indicated that pricing actions are being taken carefully to remain competitive while also considering the elasticity of demand [59] Question: What is the status of hedging for coffee purchases? - Management stated that they are approximately 95% hedged for 2025, which positions them better than competitors who are less hedged [61]

Financial Data and Key Metrics Changes - First quarter revenue declined by 9% year-over-year, primarily due to $8.5 million in barter transactions and a $3.4 million benefit from a change in loyalty rewards accruals in the previous year. Excluding these items, revenue increased by 4% [17] - Adjusted EBITDA declined by $11.6 million compared to the first quarter of the previous year, totaling approximately $1 million for Q1 2025 [21] - Gross margin decreased by 680 basis points to 36% of sales, impacted by increased trade investment, green coffee inflation, and changes in loyalty rewards [20] Business Line Data and Key Metrics Changes - The wholesale segment, which sells packaged coffee and ready-to-drink beverages, declined by 6% year-over-year. However, excluding non-recurring revenue from the previous year, sales in this segment grew by 9% [17] - Direct-to-consumer (DTC) revenue declined by 15% in the first quarter, but adjusting for last year's loyalty reserve, the decline was closer to 5% [19] - The Outpost segment grew revenue by 2%, driven by higher franchise revenue and increased average order value [19] Market Data and Key Metrics Changes - In the U.S. Food, Drug, and Mass channels, the coffee category declined in unit volume during the first quarter, but Black Rifle Coffee Company achieved 21% sales growth, significantly outpacing the category's 4% increase [6] - The ready-to-drink coffee business saw first-quarter sales up 7% in a category that declined by 6%, maintaining the company's position as the third-largest RTD coffee brand in the U.S. [11] Company Strategy and Development Direction - The company is focused on long-term growth by scaling the brand, deepening retail partnerships, and ensuring efficient investment in the business [5] - The launch of Black Rifle Energy is a key initiative, with plans to expand distribution and marketing efforts in priority markets [12][13] - The company is committed to cost reduction and efficiency initiatives, aiming for annualized cost savings of $8 million to $10 million [27] Management's Comments on Operating Environment and Future Outlook - Management acknowledged a challenging operating environment but expressed confidence in the company's positioning for growth in 2025 and beyond [4] - The impact of tariffs and green coffee inflation was highlighted, with an estimated $5 million impact on EBITDA in 2025 [24] - The company maintains its full-year revenue guidance of $395 million to $425 million, expecting sequential growth throughout the year [22] Other Important Information - The company continues to make monetary and product donations to military units and first responder organizations, emphasizing its mission-driven approach [14][15] - The company has implemented a price increase to offset rising green coffee prices, which have more than doubled since early 2024 [25] Q&A Session Summary Question: How does the business react to an economic slowdown? - Management noted that during economic slowdowns, consumers tend to shift from coffee shops to at-home coffee, which can benefit premium brands like Black Rifle [33] Question: What is the outlook on guidance, particularly regarding gross margin? - Management indicated that increased trade spending and coffee inflation have impacted gross margin expectations, but they remain confident in achieving their EBITDA range [36][37] Question: Can you share early feedback on the energy drink launch? - Early feedback has been positive, with strong distribution and marketing efforts planned to support the launch [41][43] Question: What strategies are being implemented to stabilize the DTC business? - The company is focusing on improving conversion rates, particularly through its mobile app, while reallocating resources towards wholesale and energy initiatives [52][55] Question: How is pricing being managed in light of inflation and tariffs? - Management stated that pricing actions are being taken strategically to remain competitive while managing the impact of tariffs and inflation on costs [60][62]

Financial Performance - Revenue for Q1 2025 was $89,974,000, a decrease of 8.6% compared to $98,392,000 in Q1 2024[17] - Gross profit for Q1 2025 was $32,472,000, down 23.1% from $42,185,000 in Q1 2024[17] - Net loss attributable to BRC Inc. for Q1 2025 was $2,888,000, compared to a net income of $548,000 in Q1 2024[17] - Total net sales for the three months ended March 31, 2025, were $89,974,000, a decrease of 8.5% from $98,392,000 in the same period of 2024[55] - Wholesale revenue decreased to $56,791,000 in Q1 2025 from $60,428,000 in Q1 2024, representing a decline of 10.8%[55] - Direct-to-Consumer (DTC) revenue fell to $27,720,000 in Q1 2025, down 15.0% from $32,614,000 in Q1 2024[55] - The net income (loss) attributable to Class A Common Stock for Q1 2025 was $(2,888) thousand, a decrease from $548 thousand in Q1 2024, indicating a significant decline[136] - Net revenue for the three months ended March 31, 2025 decreased by $8.4 million, or 9%, to $89.974 million compared to $98.392 million for the same period in 2024[165] - Gross profit for the three months ended March 31, 2025 was $32.472 million, a decrease of $9.713 million, or 23%, with a gross margin of 36% compared to 43% in 2024[164] Assets and Liabilities - Total current assets as of March 31, 2025, were $95,062,000, slightly down from $95,471,000 as of December 31, 2024[14] - Total liabilities increased to $178,705,000 as of March 31, 2025, compared to $177,886,000 as of December 31, 2024[14] - Cash and cash equivalents decreased to $3,902,000 at the end of Q1 2025 from $6,810,000 at the end of 2024[14] - Long-term debt increased to $66,472,000 as of March 31, 2025, from $63,027,000 as of December 31, 2024[14] - The allowance for sales returns and charge backs was $467 million as of March 31, 2025, compared to $560 million as of December 31, 2024[57] - Accounts receivable allowance for doubtful accounts was $626 million as of March 31, 2025, up from $593 million as of December 31, 2024[64] - Inventories, net increased to $50,498 million as of March 31, 2025, from $42,647 million as of December 31, 2024[65] - Property, plant, and equipment, net decreased to $56,645 thousand as of March 31, 2025, down from $59,204 thousand as of December 31, 2024, a decline of 4.3%[93] Operating Expenses - Operating expenses for Q1 2025 were $37,904,000, a slight decrease from $38,230,000 in Q1 2024[17] - Total operating expenses decreased by $0.3 million, or 1%, to $37.904 million, with marketing and advertising expenses increasing by $3.713 million, or 49%[170] - Interest expense increased by $0.319 million, or 16%, to $2.370 million due to higher average debt balances[175] Cash Flow - The company reported a net cash used in operating activities of $4,141,000 for Q1 2025, compared to net cash provided of $4,914,000 in Q1 2024[23] - Net cash used in operating activities was $4.1 million for the three months ended March 31, 2025, a decrease of $9.1 million compared to net cash provided of $4.9 million in the same period of 2024[180] - Net cash used in investing activities was $1.2 million for the three months ended March 31, 2025, a decrease of $1.5 million from $2.7 million in the corresponding period of 2024[181] - Net cash provided by financing activities was $2.4 million for the three months ended March 31, 2025, an increase of $13.1 million compared to net cash used of $10.7 million in the same period of 2024[182] Revenue Recognition and Customer Programs - The company’s revenue recognition follows the ASC 606 standard, ensuring that revenue is recognized when control of the product transfers to the customer[40] - The company’s loyalty program allows customers to earn up to 5% on purchases, with points expiring after one year[46] - The company recognized a revenue increase of $3,361,000 in its DTC channel due to changes in the loyalty program policy regarding expired points[47] - The company’s franchise agreements require ongoing fees based on store revenues, which are recognized as sales occur[49] Future Outlook and Strategy - The company aims to expand its product line to increase growth opportunities and reduce product-specific risks through diversification[156] - The company plans to continue investing in customer acquisition and new product launches to drive revenue growth in the Wholesale channel[151] - Future growth in the Outpost channel is anticipated as the company reallocates investments and improves profitability through operational changes[151] - The company is focused on optimizing marketing performance to manage customer acquisition costs effectively[154] Legal and Tax Matters - The Company is currently involved in various legal disputes, including a lawsuit from Tang Capital seeking $10,535 thousand in compensatory damages[143] - The Company has recorded a valuation allowance against deferred tax assets (DTAs) due to uncertainty regarding their realization[134] - The effective tax rate for the period ended March 31, 2025, differs from the U.S. federal statutory rate primarily due to changes in valuation allowance and non-controlling interest[133] - The Company has accrued $320 thousand related to potential sales and other tax exposure as of March 31, 2025, which is included in "Accrued liabilities" on the consolidated balance sheets[141]