BRC Inc.

Greetings, and welcome to the Black Rifle Coffee Company second quarter earnings call. At this time, all participants are in a listen-only mode. A brief question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Matthew McGinley, Vice President of Investor Relations. Thank you, sir. You may begin.

Good morning, everyone. And thank you for joining Black Rifle Coffee Company's second quarter 2025 financial results conference call. We released our results yesterday, and the press release and related materials are available on our investor relations website at ir.blackriflecoffee.com. Before we begin, I would like to remind you of the company's safe harbor statement regarding forward-looking statements. During today's call, management may make forward-looking statements, including guidance and the underlying assumptions. These statements are based on expectations that involve risks and uncertainties, which could cause actual results to differ materially. For a further discussion of these risks, please refer to our previous filings with the SEC. Additionally, this call will include non-GAAP financial measures, such as adjusted EBITDA. Whenever we refer to EBITDA, we mean adjusted EBITDA unless otherwise noted. Reconciliation of non-GAAP measures to the most directly comparable GAAP measures are included in our earnings release, which was furnished to the SEC and is available on our investor relations website. Now, please refer to the presentation on our Investor Relations website and turn to slide four. I would now like to turn the call over to Chris Monzelewski, CEO of Black Rifle Coffee Company. Monze?

Thanks, Matt. Good morning, everyone. Joining me today are Evan Hafer, our Executive Chairman, Matt Ami, our new Chief Financial Officer, and Matt McGinley, our Head of Investor Relations. As we enter the second half of the year, I want to acknowledge our team here at Black Rifle. Over the past year, we've taken meaningful steps to build a more disciplined and resilient organization, tightening execution, investing in critical capabilities, and preparing the business to scale more efficiently. That foundation enabled us to deliver results in line with our expectations this quarter, even as the macro cost environment became more challenging. As I noted last quarter, our organizational nimbleness has allowed us to navigate change and stay on course. We remain highly focused on positioning the business for long-term growth. We'll continue to expand our footprint with key retail partners to build momentum in both packaged coffee and ready-to-drink beverages and to ensure that every dollar we invest in the brand drives meaningful, measurable impact. That includes leaning into what's working while staying disciplined in our execution and continuing to innovate. We're encouraged by the progress and confident in the opportunities that lie ahead. Let's move to slide six. During the second quarter, Nielsen data showed a modest decline in unit volume for the U.S. coffee category within the food, drug, and mass channels. Despite this, category sales grew, driven largely by pricing actions taken across the industry. Black Rifle significantly outperformed the category, delivering 32% sales growth on a 29% increase in unit volume, well ahead of the category's 9.6% sales growth and 1% decline in units. Our distribution momentum continued this quarter with strong gains in grocery and mass merch retailers. In grocery, ACV increased by 19 percentage points year over year to reach 46.5%, while total ACV across all tracked channels rose 15 points to 56.6%. We continue to see significant room for expansion, both through new retail partnerships and by deepening our presence with existing customers. While we launched with a strong assortment at our largest retail customer, averaging 19 items on shelf and capturing 9.3% share in the bagged category, we typically begin with a smaller presence at new grocery and mass accounts. Our land and expand strategy is working as intended. We start with a few SKUs to establish presence, then grow assortments as performance warrants. We continue to see that play out across key accounts where strong velocities are translating into additional shelf space. In addition to gains in grocery and mass, we've expanded in club and secured national distribution with the leading rural lifestyle retailer. These moves increase visibility, drive trial and repeat and grow household penetration. Moving to slide seven, our direct to consumer channel remains a key pillar of our broader digital strategy, offering a direct connection to our most loyal customers in generating valuable insights that shape brand and product decisions. Whether purchasing directly from Black Rifle or through a digital retail partner, consumers have ample opportunities to have our products delivered to their door directly. While the majority of our recent growth has come from brick and mortar retail, I'm pleased to report, consistent with what we've shared on prior calls, that our digital channel stabilization in the quarter and returned to growth. In the second quarter, DTC revenue was 7.8% lower year over year. However, after adjusting, For a 2.4 million loyalty reserve benefit that was recognized in the prior year, sales in the channel were actually slightly positive. We also saw strong growth across key third-party e-commerce platforms, underscoring our ability to capture demand in high-traffic digital marketplaces and meet consumers where they prefer to shop. We've made meaningful enhancements to both the subscription and non-subscription experience. Updates to our website and mobile app have improved usability while backend improvements have enabled more precise merchandising and SKU optimization. For Coffee Club members, we've expanded perks, introduced prepaid subscription options and launched a new brand portal featuring partner benefits and members only gear. Our digital business remains a vital channel for fostering loyalty, testing new offerings, deepening customer relationships and supporting our expansion with some of the nation's largest retailers. and we're committed to evolving it in ways that drive long-term growth. On slide eight, our ready to drink coffee business continues to outperform the broader category. In the second quarter, we delivered 7% sales growth in a category that declined 4%, according to Nielsen. Unit volume for Black Rifle was up 9% while category units fell 6%, a clear testament to the strength of our brand and our ability to grow in a contracting market. We've maintained our position as the third largest RTD coffee brand in the US. And during the quarter, we expanded ACV by six points year over year to reach 53.5%. While we've made meaningful progress, we're still in the early stages of realizing the full opportunity, with approximately half the market still available to be penetrated. Similar to our bags and pods business, we will continue to drive outsized growth through new retail partnerships and expanded shelf presence with existing customers. Slide nine. We've made strong progress in the launch year of Black Rifle Energy and are pleased with its momentum building at retail. Since launching in January, distribution has steadily expanded. And by the end of the second quarter, the product was available in over 15,000 retail locations, reaching 23% ACV. While the energy drink category is highly competitive, the early traction gives us confidence in the brand's ability to continue gaining shelf space and driving sales. We're executing a disciplined rollout in partnership with Keurig Dr. Pepper and their national direct store delivery network supported by marketing efforts aimed at building awareness and trial, particularly in the convenience channel where the energy drink category is most active. Our entry into energy is grounded in clear consumer data. The majority of our coffee customers also purchase energy drinks and a significant portion of our digital audience engages with the brand, even if they don't drink coffee. We see this as a natural extension of our brand and a compelling long-term growth opportunity, one that expands our reach, adds consumption occasions, and brings new consumers into the franchise. We're encouraged by the early results and excited about what's ahead. Finally, I want to take a moment to highlight the work we continue to do at the intersection of brand, mission, and service, a focus that remains central to who we are. For Evan, myself, and our organization, this serves as the long-term bellwether of what truly defines Black Rifle. In the second quarter, we deepened our engagement with the communities that define our brand. Service members, veterans, first responders, and their families. From major 4th of July activations at Fort Campbell and Camp Lejeune, where we supported tens of thousands of military families, to events commemorating the Army's 250th birthday, Two on-the-ground disaster responses in Kerrville, Texas. Our team showed up in meaningful ways. In Kerrville, we remained on-site for several weeks following severe flooding, distributing hot coffee, thousands of cans of Black Rifle Energy and RTD coffee, and offering support to first responders working through a challenging recovery. This work isn't about marketing or optics. It's about impact. It's about showing up when and where we're needed and standing behind the people who represent the very best of our country. That sense of purpose continues to drive our brand forward. It's what makes Black Rifle more than a beverage company. It's what makes us a community. Before we dive into the financials, I also want to take a moment to welcome Matt Amie, our new chief financial officer. Matt brings nearly 30 years of experience in the consumer packaged goods industry. He's been with us for just under a month, but he's hit the ground running and we're excited to have him on board. With that, I'll turn it over to Matt to walk through the quarter.