BRC, Inc. (NYSE:BRCC) Q3 2022 Earnings Conference Call November 10, 2022 8:00 AM ET Company Participants Tanner Doss - VP, Investor Relations Tom Davin - Co-CEO, Black Rifle Coffee Company Evan Hefer - Founder & CEO Gregory Iverson - CFO Heath Nielsen - Chief Retail Officer Toby Johnson - Chief Operating Officer Conference Call Participants George Kelly - ROTH Capital Partners Operator Greetings, and welcome to the Black Rifle Coffee Company Third Quarter 2022 Earnings Call. [Operator Instructions]. I would ...

[Part I - Financial Information](index=5&type=section&id=Part%20I%20-%20Financial%20Information) [Financial Statements (unaudited)](index=5&type=section&id=Item%201.%20Financial%20Statements%20(unaudited)) The company presents its unaudited consolidated financial statements for the period ended September 30, 2022 [Consolidated Balance Sheets](index=6&type=section&id=CONSOLIDATED%20BALANCE%20SHEETS) Total assets grew to $208.1 million and stockholders' equity became positive due to the Business Combination Consolidated Balance Sheet Highlights (in thousands) | Account | Sep 30, 2022 (unaudited) | Dec 31, 2021 (audited) | | :--- | :--- | :--- | | **Total Current Assets** | $143,888 | $53,025 | | Cash and cash equivalents | $71,211 | $18,334 | | Inventories | $40,933 | $20,872 | | **Total Assets** | **$208,100** | **$87,082** | | **Total Current Liabilities** | $61,199 | $59,018 | | **Total Liabilities** | **$93,630** | **$82,292** | | **Total Stockholders' Equity** | **$114,470** | **($149,491)** | [Consolidated Statements of Operations](index=7&type=section&id=CONSOLIDATED%20STATEMENTS%20OF%20OPERATIONS) The company reported a Q3 net loss of $16.1 million and a nine-month net loss of $318.0 million Statement of Operations Summary (in thousands) | Metric | Q3 2022 | Q3 2021 | Nine Months 2022 | Nine Months 2021 | | :--- | :--- | :--- | :--- | :--- | | **Revenue, net** | **$75,494** | **$60,106** | **$207,695** | **$161,253** | | Gross Profit | $23,945 | $24,063 | $69,714 | $65,008 | | Operating Loss | ($15,618) | ($3,146) | ($48,301) | ($7,510) | | **Net Loss** | **($16,102)** | **($4,053)** | **($318,014)** | **($9,238)** | | Net Loss per Share (Basic & Diluted) | ($0.08) | N/A | ($1.54) | N/A | [Consolidated Statements of Stockholders' Equity (Deficit)](index=8&type=section&id=CONSOLIDATED%20STATEMENTS%20OF%20STOCKHOLDERS'%20EQUITY%20(DEFICIT)) The company's capital structure transformed from a deficit to $114.5 million in equity post-Business Combination - The Business Combination in February 2022 resulted in the conversion of members' deficit into stockholders' equity, including the issuance of **44,009,874 shares of Class A Common Stock** and **139,106,323 shares of Class B Common Stock**[26](index=26&type=chunk) - Vesting events for earn-out shares (First and Second Tier) and a warrant redemption led to the issuance of additional Class A common stock throughout the period[26](index=26&type=chunk) - By September 30, 2022, the company had **53,765,690 shares of Class A Common Stock** and **157,794,609 shares of Class B Common Stock** issued and outstanding[29](index=29&type=chunk) [Consolidated Statements of Cash Flows](index=11&type=section&id=CONSOLIDATED%20STATEMENTS%20OF%20CASH%20FLOWS) Financing activities provided $151.8 million, resulting in a net cash increase of $52.9 million for the period Cash Flow Summary (Nine Months Ended Sep 30, in thousands) | Activity | 2022 | 2021 | | :--- | :--- | :--- | | Net cash used in operating activities | ($78,971) | ($10,654) | | Net cash used in investing activities | ($19,950) | ($11,755) | | Net cash provided by financing activities | $151,798 | $769 | | **Net increase (decrease) in cash** | **$52,877** | **($21,640)** | | **Ending cash and cash equivalents** | **$71,211** | **$13,992** | - Financing activities in 2022 were dominated by **$338.0 million in proceeds from the Business Combination**, offset by $127.9 million for distribution and redemption of Series A preferred equity and $31.6 million in Business Combination costs[31](index=31&type=chunk) [Notes to Consolidated Financial Statements](index=13&type=section&id=NOTES%20TO%20CONSOLIDATED%20FINANCIAL%20STATEMENTS) Notes detail accounting policies, the Business Combination, revenue channels, and subsequent events - The Business Combination on February 9, 2022, was accounted for as a **reverse recapitalization**, with Authentic Brands as the accounting acquirer[37](index=37&type=chunk)[41](index=41&type=chunk) Revenue by Sales Channel (Nine Months Ended Sep 30, in thousands) | Channel | 2022 | 2021 | | :--- | :--- | :--- | | Direct to Consumer (DTC) | $113,376 | $115,656 | | Wholesale | $78,173 | $38,608 | | Outpost | $16,146 | $6,989 | | **Total net sales** | **$207,695** | **$161,253** | - Subsequent to the quarter, the company initiated a voluntary withdrawal of certain RTD products, expecting to issue credits of **$561 thousand** and recording **$2.875 million in cost of goods sold** for replacements and write-offs[152](index=152&type=chunk) - In November 2022, the company entered into a new **$65 million senior revolving credit facility**, replacing its existing facility[153](index=153&type=chunk) [Management's Discussion and Analysis (MD&A)](index=31&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Q3 revenue grew 26% to $75.5 million, but gross margin declined to 31.7% due to mix shift and costs [Results of Operations: Q3 2022 vs. Q3 2021](index=32&type=section&id=Comparison%20of%20the%20three%20months%20ended%20September%2030%2C%202022%20to%20the%20three%20months%20ended%20September%2030%2C%202021) Q3 revenue grew 26% to $75.5 million, while gross margin fell to 31.7% on higher costs and write-offs Q3 2022 vs Q3 2021 Performance (in thousands) | Metric | Q3 2022 | Q3 2021 | $ Change | % Change | | :--- | :--- | :--- | :--- | :--- | | Revenue, net | $75,494 | $60,106 | $15,388 | 26% | | Gross Profit | $23,945 | $24,063 | ($118) | 0% | | Gross Margin | 31.7% | 40.0% | -830 bps | N/A | | Total Operating Expenses | $39,563 | $27,209 | $12,354 | 45% | - Wholesale revenue increased **66% to $32.2 million**, driven by entry into the Food-Drug-Mass (FDM) channel and expansion of RTD doors from 35,800 to 70,400 year-over-year[172](index=172&type=chunk) - Outpost revenue increased **65% to $5.2 million**, primarily due to an increase in company-owned stores from four to eleven year-over-year[173](index=173&type=chunk) [Results of Operations: Nine Months 2022 vs. 2021](index=33&type=section&id=Comparison%20of%20the%20nine%20months%20ended%20September%2030%2C%202022%20to%20the%20nine%20months%20ended%20September%2030%2C%202021) Nine-month revenue rose 29% to $207.7 million, offset by lower margins and higher operating expenses Nine Months 2022 vs 2021 Performance (in thousands) | Metric | Nine Months 2022 | Nine Months 2021 | $ Change | % Change | | :--- | :--- | :--- | :--- | :--- | | Revenue, net | $207,695 | $161,253 | $46,442 | 29% | | Gross Profit | $69,714 | $65,008 | $4,706 | 7% | | Gross Margin | 33.6% | 40.3% | -670 bps | N/A | | Total Operating Expenses | $118,015 | $72,518 | $45,497 | 63% | - Wholesale revenue grew **102% to $78.2 million**, and Outpost revenue grew **131% to $16.1 million**[181](index=181&type=chunk)[182](index=182&type=chunk) - The company recognized non-cash, non-operating losses of **$209.7 million from earn-out liability**, **$56.7 million from warrant liability**, and **$2.3 million from derivative liability**, all related to the Business Combination[190](index=190&type=chunk)[192](index=192&type=chunk)[193](index=193&type=chunk)[195](index=195&type=chunk) [Liquidity and Capital Resources](index=36&type=section&id=Liquidity%20and%20Capital%20Resources) The company held $71.2 million in cash and secured a new $65.0 million credit facility post-quarter - As of September 30, 2022, the company had **$71.2 million in cash and cash equivalents** and **$21.0 million of available borrowings** under credit facilities[197](index=197&type=chunk) Cash Flow Summary (Nine Months Ended Sep 30, in thousands) | Activity | 2022 | 2021 | | :--- | :--- | :--- | | Cash from Operating Activities | ($78,971) | ($10,654) | | Cash from Investing Activities | ($19,950) | ($11,755) | | Cash from Financing Activities | $151,798 | $769 | - In November 2022, the company entered into a new **$65.0 million senior revolving credit facility**, replacing its existing facility and repaying a $14.0 million outstanding balance[202](index=202&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=38&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) Primary market risks include commodity prices (coffee beans), interest rates, and inflation - **Commodity price risk for coffee beans** is a primary market risk, as supply and price are affected by weather, natural disasters, and political/economic conditions in producing countries[213](index=213&type=chunk)[214](index=214&type=chunk) - The company is exposed to **interest rate risk** through its variable-rate credit facility and equipment financing loan[215](index=215&type=chunk) - **Inflation** has increased the cost of products, overhead, and freight, which the company has partially offset with price increases[216](index=216&type=chunk) [Controls and Procedures](index=38&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that disclosure controls and procedures were effective with no material changes - Management concluded that the company's **disclosure controls and procedures were effective** as of September 30, 2022[218](index=218&type=chunk) - **No material changes** to the internal control over financial reporting occurred during the three months ended September 30, 2022[219](index=219&type=chunk) [Part II - Other Information](index=39&type=section&id=Part%20II%20-%20Other%20Information) [Legal Proceedings](index=39&type=section&id=Item%201.%20Legal%20Proceedings) Current legal proceedings are not expected to have a material adverse effect on the company - The company is involved in various legal proceedings from the ordinary course of business[223](index=223&type=chunk) - Management does not believe any pending claims will have a **material adverse effect** on the company's financial results[223](index=223&type=chunk) [Risk Factors](index=39&type=section&id=Item%201A.%20Risk%20Factors) No material changes to previously disclosed risk factors were reported for the period - **No material changes** to risk factors were reported for the quarter[224](index=224&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=39&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) This section is not applicable for the current reporting period - Not applicable[225](index=225&type=chunk) [Other Information](index=39&type=section&id=Item%205.%20Other%20Information) No other information was required to be disclosed during the period - None[228](index=228&type=chunk) [Exhibits](index=39&type=section&id=Item%206.%20Exhibits) This section lists all exhibits filed with the report, including officer certifications and XBRL data - Filed exhibits include **CEO and CFO certifications** pursuant to Sarbanes-Oxley Act Sections 302 and 906[229](index=229&type=chunk) - **Inline XBRL documents** are included as part of the filing[229](index=229&type=chunk)[231](index=231&type=chunk)

BRC Inc. (NYSE:BRCC) Q2 2022 Earnings Conference Call August 11, 2022 8:00 AM ET Company Participants Tanner Doss - Vice President of Investor Relations Evan Hafer - Chief Executive Officer Tom Davin - Co-Chief Executive Officer Greg Iverson - Chief Financial Officer Toby Johnson - Chief Operations Officer Heath Nielsen - Chief Retail Officer Conference Call Participants Sharon Zackfia - William Blair Michael Baker - D.A. Davidson Stephen Powers - Deutsche Bank Bill Chappell - Truist Securities Operator Gre ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 Title of each class Trading Symbol(s) Name of each exchange on which registered Class A common stock, $0.0001 par value BRCC New York Stock Exchange 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, 2022 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ________ to ________ ...

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Table of Contents Title of each class Trading Symbol(s) Name of each exchange on which registered Class A common stock, $0.0001 par value BRCC New York Stock Exchange Redeemable warrants, each whole warrant exercisable for one share of Class A common stock at an exercise price of $11.50BRCC WS New York Stock Exchange UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the qu ...

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Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K (Mark One) ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2021 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) Delaware 08-3277812 (State ...