BRC (US:BRCC)2024-08-07 20:17Financial Performance - Q2 2024 net revenue decreased 3% to $89.0 million from $91.9 million in Q2 2023[3] - Revenue for Q2 2024 was $89,017,000, a decrease of 3.2% from $91,947,000 in Q2 2023[16] - Total net sales for the three months ended June 30, 2024, were $89,017,000, a decrease of 3.2% compared to $91,947,000 for the same period in 2023[22] - Direct to Consumer sales decreased to $29,970,000 for the three months ended June 30, 2024, down 13.5% from $34,586,000 in the prior year[22] - Wholesale revenue grew 8% year-over-year, reaching $53.8 million in Q2 2024, while Direct-to-Consumer revenue decreased 13.3% to $30.0 million[4] Profitability Metrics - Adjusted EBITDA improved to $8.5 million in Q2 2024, compared to $0.1 million in Q2 2023, marking an increase of $8.4 million[3] - Adjusted EBITDA for the three months ended June 30, 2024, was $8,450,000, compared to $147,000 in the same period of 2023[30] - Operating income improved to $978,000 in Q2 2024, compared to a loss of $13,661,000 in Q2 2023[16] - Net income attributable to BRC Inc. was a loss of $482,000 in Q2 2024, an improvement from a loss of $4,228,000 in Q2 2023[16] - Free Cash Flow for the three months ended June 30, 2024, was $998,000, a significant improvement from a negative $29,984,000 in the prior year[31] Expenses and Cost Management - Marketing expenses increased 5.7% to $7.4 million, representing 8.3% of revenue in Q2 2024[5] - General and administrative expenses decreased 43.5% to $10.9 million, improving efficiency in corporate infrastructure[7] Cash Flow and Liquidity - Net cash provided by operating activities was $7,212,000 in the first half of 2024, compared to a cash outflow of $40,457,000 in the first half of 2023[19] - Free cash flow conversion is projected to remain at 80% for fiscal 2024[8] - Cash and cash equivalents at the end of Q2 2024 were $9,642,000, down from $12,448,000 at the end of 2023[19] Assets and Liabilities - Total current assets decreased to $99,369,000 as of June 30, 2024, down from $107,738,000 at the end of 2023[18] - Total liabilities decreased to $177,728,000 as of June 30, 2024, compared to $189,268,000 at the end of 2023[18] - Long-term debt decreased to $52,450,000 as of June 30, 2024, down from $68,683,000 at the end of 2023[18] Future Outlook and Product Development - The company reiterated full-year adjusted EBITDA guidance of $32 million to $42 million for fiscal 2024[1] - Black Rifle Energy™ RTD is set to launch in Q4 2024, expanding the product line to cater to more customers[1] - The company expects coffee products to be available in almost every significant grocery chain by the end of 2025[2] Subscriber and Store Metrics - DTC subscribers decreased to 201,200 as of June 30, 2024, compared to 239,500 in 2023, representing a decline of 15.9%[23] - The company-owned stores increased to 18 as of June 30, 2024, up from 17 in 2023, while franchise stores rose to 18 from 14[23] Revenue Recognition - The company recognized $11,904,000 in revenue for inventory exchanged for prepaid advertising during the first half of 2024[20] - The wholesale revenue for the three months ended June 30, 2024, was $53,761,000, an increase of 7.5% from $50,010,000 in the prior year[22] Adjusted EBITDA Presentation - The company has modified the presentation of Adjusted EBITDA to include certain legal expenses and cash expenses associated with RTD start-up and production issues starting from June 30, 2023[25]