BRC Inc.

Greetings. Welcome to Black Rifle Coffee Company fourth quarter 2025 earnings call. At this time, all participants are in a listen-only mode. A 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. Please note this conference is being recorded. I will now turn the conference over to Matt McKinley, head of investor relations. Thank you. You may begin.

Good morning, everyone. And thank you for joining Black Rifle Coffee Company's fourth quarter and fiscal year 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 Monzaleski, CEO of Black Rifle Coffee Company. Monz.

Thanks, Matt. Good morning, everyone. Joining me today are Evan Hafer, our executive chairman. Matt Amy, our Chief Financial Officer, and Matt McGinley, our Head of Investor Relations. 2025 was a year of measurable operating progress for Black Rifle, led by strong performance in packaged coffee. For the year, packaged coffee grew 31.1%, approximately three times the broader category growth rate, with units up more than 22% and share up 60 basis points in bagged coffee. That momentum accelerated in the fourth quarter, as distribution expansion translated into measurable improvements in productivity and share with key retail partners. The combination of expanded doors and stronger per SKU productivity materially strengthened our retail position as we exited the year. We also advanced our ready to drink in energy platforms, securing incremental distribution and broadening our presence in priority accounts. These gains reflect disciplined commercial execution and reinforce the strength of the brand. 2025 presented a challenging operating backdrop. Coffee markets remained volatile and consumers faced ongoing pressure. Throughout the year, we remained disciplined on pricing, tightly managed expenses, and aligned resources with the highest return opportunities across the portfolio. We also took meaningful steps to streamline our platform. Our asset base is leaner and more focused, with capital and talent directed towards initiatives that support durable, profitable growth. As we look ahead, the actions taken in 2025, combined with expanding distribution, improving shelf productivity, and moderating cost pressures, position us for a return to strong EBITDA growth in 2026. We're encouraged by the progress we've made and confident in the trajectory of the business as we enter the new year. Moving to slide seven. Momentum in packaged coffee accelerated as we exited the year. In the fourth quarter, our packaged coffee business grew 34% compared to nearly 13% growth for the broader category. That performance translated into continued share gains. In bagged coffee, market share reached 3.3% nationally, up 60 basis points year over year, while pods increased to 2.2% nationally, up 40 basis points. Importantly, these gains were supported by improving shelf productivity, not just expanded distribution. Velocity strengthened throughout the year and reached parity with the overall bagged coffee category in grocery, despite pricing approximately 40% above the category average. We are seeing stronger consumer takeaway in repeat purchase, reinforcing sustained velocity improvement. Achieving category level velocity at a premium price point reinforces the strength of consumer demand and the durability of our retail position as we enter 2026. Move to slide eight, please. Our land and expand strategy continues to prove itself as a scalable and repeatable growth engine. We begin with a focused assortment entering retailers with a concentrated set of high performing items designed to demonstrate the value of the brand to the category. Once performance is established, we earn the right to broaden the assortment by adding incremental items to the shelf. On the land side, we delivered another year of retail expansion. Distribution reach increased nearly eight points in 2025, bringing ACV to 54.9%. That steady expansion reflects continued success in adding new retail doors and strengthening our national presence. The expand component is working as well, improving velocity translated directly into higher shelf productivity, which supported broader assortments and additional shelf space. On average, grocers added two incremental black rifle items in 2025 alone. And since entering grocery three years ago, we have nearly tripled our shelf presence. This disciplined execution is translating into greater shelf visibility, stronger retail economics, and deeper long-term retailer commitment to the brand. Slide 9. Looking at the broader category, much of the reported growth continues to be price-led, with higher shelf pricing driving dollar expansion across legacy brands, while underlying unit trends remain muted. Our performance looks different. The majority of our growth is volume-driven, Units increased more than 22% in 2025, reflecting real consumer takeaway rather than pricing actions. That distinction matters. We are adding households, increasing purchase frequency, and expanding share within existing accounts. As distribution expands and repeat purchase strengthens, our growth is becoming broader and more sustainable. In a category heavily influenced by price, our gains are rooted in unit expansion. repeat purchase, and stronger shelf productivity. Those dynamics reinforce durable top line momentum and operating leverage. As volume scales, we expand gross profit dollars and improve fixed cost absorption, while delivering strong productivity and economics to our retail partners. Packaged coffee is firmly established as the core economic engine of the business, and we see meaningful runway for continued growth. Turning to slide 10. Our direct-to-consumer business stabilized in 2025 and returned to growth in the fourth quarter. While retail continues to be the primary driver of top-line growth, direct-to-consumer remains an important strategic channel. Our owned website allows us to engage directly with our most loyal customers, gather insight and feedback, and introduce new products and messaging. Our approach is not to force traffic to a single destination, but to ensure Black Rifle products are available wherever consumers choose to shop. We saw improvement on our core website during the year, and at the same time, continued growth across third-party marketplaces. Those platforms are extending our reach, supporting repeat purchase, and complementing retail distribution. Taken together, Direct to Consumer is operating from a more stable base and contributing positively to the broader business. Slide 11. In ready-to-drink coffee, performance in 2025 varied by channel. We expanded distribution, increasing ACV by 10 points to 55.9%, with the strongest performance in grocery, mass, and dollar, where we outperformed the category for the full year. The category remained under pressure and convenience, which represents more than half of tracked ready to drink sales. As C-Store trends weakened, fourth quarter results reflected that softness. We are not assuming a category recovery and are focused on the factors we can control. That means prioritizing our top retail partners, improving shelf productivity, and using innovation as a disciplined growth lever. New flavors in our cold brew platform are intended to drive incremental takeaway and improve velocity within our existing distribution footprint. Packaged coffee remains our core economic engine. RTD is an important adjacency, and we are scaling it deliberately with a focus on returns and disciplined execution. Slide 12. In energy, distribution expanded in line with our launch year plan, reaching approximately 22% ACV across nearly 20,000 retail doors in 2025. As we move into 2026, the focus shifts from launch execution to scaling the business in the right markets with the right partners and with a clear emphasis on where we can win. That discipline continues to guide our approach. We are prioritizing geographies and channels where we can drive velocity and returns rather than pursuing distribution for its own sake. This return-focused strategy positions the energy business to scale responsibly and contribute to the overall growth of the Black Rifle brand. Before I hand it off to Matt, I want to briefly touch on how we continue to show up for the communities we serve. Last quarter, we committed to eliminate $25 million in medical debt for veterans through Operation Debt of Gratitude in partnership with Born Primitive and ForgiveCo. I'm proud to say we exceeded that goal. wiping out more than $34 million in medical debt and helping approximately 15,000 veterans enter 2026 free from that burden. We also helped feed more than 1,000 military families through Operation Homefront during the holidays and continued supporting the Special Operation Warrior Foundation and other veteran and first responder organizations across the country. With members of our community and even our families currently deployed in the Middle East and around the world, we remain committed to supporting them and those waiting for them at home. That same commitment will guide us as we move into 2026 and honor America's 250th birthday through initiatives that celebrate service and expand programs that create meaningful impact for veterans and their families. Supporting this community isn't a campaign for us. It's foundational. to who we are and how we grow. I will now turn it over to Matt Amy.