Greetings! Welcome to the Black Rifle Coffee Company 2Q '23 earnings call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the phone 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'll now turn the conference over to your host, Tanner Doss. You may begin. Good afternoon, everyone. Thank you for joining Black Rifle Coffee Company's conference call to discuss our second quarter 2023 financial results, which were released today and can be found on our website at ir.blackriflecoffee.com. With me on the call today is Evan Hafer, Founder and CEO, Tom Davin, Co-CEO, and Greg Iverson, our Chief Financial Officer. We will also have Chris Mondzelewski, our new President, as well as Mark Weisenborn, our Interim CFO, on the Q&A portion of today's call. Before we get started, I'd like to remind you of the company's Safe Harbor language, which I'm sure you are all familiar with. On today's call, management may make forward-looking statements, including guidance and underlying assumptions. Forward-looking statements are based on expectations that involve risks and uncertainties that could cause actual results to differ materially. For a further discussion of our risks related to our business, please see our previous filings with the SEC. This call will also contain non-GAAP financial measures, such as Adjusted EBITDA. Reconciliations of these non-GAAP measures to the most comparable GAAP measures are included in the earnings release furnished to the SEC, and they are also available on our investor website. Now, I'd like to turn the call over to Evan Hafer, Founder and CEO of Black Rifle Coffee Company. Evan? Thanks, Tanner, and good afternoon, everyone. From day one of starting Black Rifle Coffee Company in my garage, my core focus has been to create an authentic connection between our brand and our community, demonstrating to military veterans and first responders that we can build something that will last generations. We don't stray from our beliefs, and it can be felt by our customers who are looking for authenticity in a world where most brands don't stand for anything or change their beliefs based on whoever is yelling the loudest. As we've transitioned from a pure direct-to-consumer business into an omni-channel CPG business, Black Rifle has proven to be a real American business success story. We are still early in our company's life cycle, but we have proven that our brand resonates with the American public. We're excited to have all of our products show up in stores where our customers are shopping every day. Last year, we made the strategic decision to launch our products into food, drug, and mass. To date, that decision has paid off. We've gone from a niche premium direct-to-consumer coffee brand to the number one selling 12-ounce bagged coffee sold in over 4,400 Walmart stores across America. This has all been done on the strength of our brand and word-of-mouth reviews. This excitement for the brand and being on shelf, where over 30 million people a day shop, has also increased our aided brand awareness from 20% to over 28% in the last year. While we're pleased with the 8% point increase, we have 72% left to go. Over the last 4 weeks, with little to no marketing spend, Black Rifle Coffee represented 4.4% of total coffee sales in the largest coffee aisle within grocery and FDM. That 4.4% is only made up of 12-ounce bags and K-Cup or rounds, which is representative of only half of the total categories within the Walmart coffee aisle. Over the past 6 months, we've been working with Walmart to create new SKUs that we recently launched during their coffee reset that will begin to address the remaining 50% of the aisle. Although we are early in the reset period, we've seen our new product innovation further increase Walmart coffee sales. Tom will share the additional color in this section. As we mentioned on our last call, the success of our entry into grocery was going to be building on itself. We would soon be launching additional FDM partnerships. Today, I'm excited to announce that we are shipping our product to our second national grocery chain and two other regional partners. We are deep in conversations with additional grocers and FDM accounts. We will continue to roll out Black Rifle Coffee into the additional grocery chains during 2024. In order to capitalize on the growth opportunity at CPG, I knew we needed to bring additional talent to the team to elevate our brand to the next level, which is why we hired a new President and CMO, Chris Mondzelewski. Chris has brought over 25 years of experience within the CPG industry, most recently as the Chief Growth Officer at Mars Petcare, and more importantly, he has been a coffee subscriber since 2015. He is intimately familiar with our brand, and he understands how to deliver the Black Rifle Coffee brand experience to our customer base, as well as expand our TAM into new cohorts of potential customers. Chris will be focused on three main goals over the next year: continue to aggressively lead the distribution expansion of our business across channels, especially in FDM, working hand in hand with me on the marketing and branding front to unlock marketing programs and expand into new customer groups. Working with Tom Davin and the rest of the business units to continue to drive efficiencies and be predictable across the business. Having Chris in this new role will allow me to get back to doing what I love, which is 100% focused on building and evolving the Black Rifle Coffee brand. I will be working on our large strategic partnerships at Black Rifle Coffee. More importantly, I will be 100% on the needs and wants of our customers. We are still very early in the cycle of Black Rifle Coffee, and I couldn't be more excited for the future. We also have Mons, our new President, and Mark Weinsten, our interim CFO, on the call to answer any additional questions you might have. Before I turn the call over to Tom to walk through the quarter, I wanna say thanks to Greg Iverson on his last earnings call as our CFO. Greg was instrumental in getting this business ready for IPO, and he's also done an amazing job the last three years. We will miss having him around the office, and I wanna wish him luck in his next mission. With that, I'll turn the call over to Tom. TD, go ahead. Thanks, Evan, and good afternoon, everyone. I'll start with the topic of company profitability, then address performance by channel, and conclude with 2023 guidance. Before addressing these topics, I'd like to preface my comments with some observations to set the context. First, the Black Rifle Coffee brand is gaining broad acceptance, and as a result, we are growing rapidly, far outpacing the coffee category and a long list of competitors. As military veterans leading a public company, we strive to set aggressive but achievable goals, supported by initiatives to mitigate risk. This is our seventh earnings call as a public company. Obviously, our omni-channel growth strategy has evolved over time as we've responded to consumer behavior and results in the marketplace. The success we've seen in the wholesale segment, particularly food, drug, and mass, has enabled us to sharpen our focus and more clearly chart a path to profitability. One investor said recently, "I'd like to see Black Rifle Coffee be more boring, at least as a business model." We've taken that sentiment to heart, meaning we will continue to streamline our processes, use technology to drive productivity, and hold ourselves accountable to do what we said we would do. Profitability. As I outlined on our Q1 call, we are committed to becoming profitable in 2023 at the Adjusted EBITDA line. I am pleased to report that we achieved Adjusted EBITDA profitability in Q2 and are trending to hit our profitability targets for the year. The key levers are the continued mix shift into the food, drug, and mass channel, cost savings, and productivity across the business. Our entire organization is aligned behind the imperatives of focus and profitable growth. I will now highlight each of our business channels. Wholesale. The strategic decision to focus on this channel has started to prove out over the past 2 quarters. Our wholesale channel revenue growth was 109% year-over-year, proving again that the BRCC brand has broad appeal with a wide range of shoppers. Food, drug, and mass. Although we are still less than a year into our launch within the FDM channel, we continue to gain market share rapidly. Evan shared that according to the most recent Nielsen data, over the last 4 weeks, Black Rifle Coffee represented 4.4% of total Walmart coffee sales. This success of Walmart has earned BRCC the opportunity to begin to address the remaining 50% of Walmart's coffee business. 16 new innovation SKUs are being shipped to stores as we speak, including our first canister coffee SKU, comprising 24 ounces of ground coffee, cold brew concentrates, and 32 fluid ounces with multiple flavors, two SKUs of instant coffee and three additional bagged coffees, and six additional pack sizes and flavors of rounds or K-Cup. With the new product launches, we are increasing our shelf facings at Walmart by roughly 67%. Based on Nielsen data, Walmart's coffee sales continue to outpace the total FDM category by more than 2.5 times. Black Rifle Coffee is honored to be part of this ongoing success story. Relative to the new FDM accounts Evan referenced, we look forward to sharing additional details as Black Rifle Coffee product arrives on shelves. Ready to drink. Our RTD product continues to outperform the segment, which has enabled BRCC to continue to take market share. Over the last 52 weeks, Black Rifle outperformed the category by over 8 times in terms of units and dollars. Our products are now being sold in over 82,000 doors, well on our way to the 100,000 door target by year-end 2023. Our percentage ACV continues to grow, currently at 41%, with FDM and convenience stores combined, up from 38% at year-end 2022. The ready-to-drink segment as a whole, experienced some deceleration over the past couple of quarters. Although Black Rifle Coffee's unit sales were up 26% quarter-over-quarter, the category has seen unit sales fall almost 8% during the same time period. While we're growing in RTD and taking share, we did not expect the category to slow in the last quarter. As a result of the category deceleration, we've completed a full top-down and bottoms-up review of the RTD business. The outcome of this review has resulted in renewed focus on quality of distribution, greater sense of urgency around margin, and increased profitability, all supported by leadership changes to enable execution of our ready-to-drink playbook. We'll continue to monitor the overall macro trends in RTD and improve our execution throughout the system. Direct-to-consumer. We operate the largest branded subscription coffee business in the United States, with over 239,000 subscribers. We've continued to see a slight decline in new customers quarter-over-quarter, which aligns with our internal models as we reduce investments that fall below our hurdle rates. With profitability as an imperative, we continue to be disciplined on CAC or cost to acquire customers. As CAC is still elevated relative to the LTV of new customers, we continue to direct investment dollars into the FDM category, the area of the business that is providing the greatest returns. Outposts. As we announced last quarter, I've assumed direct leadership of the Outpost division for the immediate future. We have 3 main objectives in 2023 for the retail business. Number 1, continue to enhance the customer experience within our company-owned and franchise locations to maximize revenue. Number 2, develop the leadership capabilities of the Outpost team in order to drive performance at each retail outpost. Number 3, refine our new prototype model to further elevate the BRCC experience, while value engineering overall build-out costs to ensure future outposts generate strong ROI. We continue to see significant long-term opportunity for this segment of our growth strategy. Guidance. Wrapping up my section, I'll provide an update on guidance for 2023. As, we previously guided to revenue the range of $400 million-$440 million. Gross margin, 36%-37.5%. Adjusted EBITDA, $5 million-$20 million for the year. With the aforementioned ready-to-drink category deceleration, we now expect 2023 results to be at the low end of the guidance across all three metrics, representing low to mid-30% revenue growth, continued improvement in gross margin, and Adjusted EBITDA profitability. We expect to see sequential improvements in gross margins and Adjusted EBITDA in both Q3 and Q4. I'll now turn the call over to Greg Iverson to walk through the quarter in more details. Greg? Thanks, Tom. Good afternoon, everyone. Today, I will discuss our 2023 second quarter financial results. Before I review the financials, I'd like to thank Evan, Tom, and the entire BRCC family for their support and friendship over the past three and a half years. While I will miss working closely with everyone, I know that the company is in extremely capable hands, and I will remain a committed Black Rifle Coffee customer for life. In the context of doing what we say we are going to do, we previously guided towards $91 million of revenue and Adjusted EBITDA that approaches break even in the second quarter, and I am pleased to report we exceeded both forecasts. For the second quarter, total revenue increased 39% to $91.9 million, compared to $66.4 million in Q2 of last year. I will give some additional details on our three sales channels. I'll begin with wholesale, where revenue increased 109% to $50 million in Q2, compared to $24 million during Q2 of last year. The increase was primarily driven by our entry into food, drug, and mass, as we began selling our bagged coffee and rounds in over 4,400 Walmart stores beginning in September of last year. We also saw a material increase in our ready-to-drink product sales, as our product is being sold in over 82,000 doors, up from 67,000 doors a year ago. Our direct-to-consumer revenue decreased by 6% to $34.6 million in Q2 of 2022, compared to $37 million in Q2 of last year. This expected decline was mainly the direct result of decreased digital advertising spend as we continue to prioritize our high growth and high returning wholesale channel. Revenue from Outposts increased 35% to $7.4 million in Q2, compared to $5.4 million last year. The main driver was an increase in our company-owned store count, which increased to 17 Outposts as of Q2 2023, compared to 10 in Q2 2022. This brings our total number of Outposts to 30, with 17 company-owned and 13 franchise stores. Turning to profitability, our Q2 gross margin was 35%, increasing approximately 100 basis points from 34% in Q2 of last year. Sequentially, gross margin improved 210 basis points versus the first quarter of 2023. The increase was driven primarily by channel mix shift, as our wholesale channel has higher gross margins than our other channels. Our total operating expenses for Q2 increased by $5.5 million, or 14%, to $44.9 million versus $39.4 million in Q2 of last year. As a percentage of revenue, our operating expenses during Q2 decreased by 987 basis points to 49.5% as compared to last year, as we drove significant operating leverage across our expense base. I will walk through our operating expenses in more detail, beginning with marketing and advertising, which decreased 22.3% to $7 million from $9 million in the second quarter of last year. As a percentage of revenue, marketing decreased by approximately 600 basis points to 7.6% compared to the same quarter last year. This decrease in expense was driven by reductions in spend on lower returning advertising platforms. In addition, our focus on our wholesale channel is continuing to drive the leverage and efficiency with our marketing and advertising spend that we have been anticipating. Next, our salaries, wages, and benefits increased 20% to $18.4 million from $15.5 million in the second quarter of last year. Importantly, as a percentage of revenue, it decreased by approximately 350 basis points to 20%, compared to 23.4% in Q2 of last year, as again, we are driving leverage in our operating expenses. The increase in dollars was due to a year-over-year increase in employee headcount to support our significant revenue growth. While we increased headcount year-over-year, we actually reduced our headcount, excluding employees at newly opened Outposts sequentially in both Q1 and Q2 as part of our efforts to improve operational efficiency. Moving on, our G&A expenses increased 27.7% to $18.9 million, compared to $14.8 million in the second quarter of last year. As a percentage of revenue, G&A decreased by approximately 175 basis points to 20.6% of revenue, compared to 22.3% last year. This increase in dollars was driven primarily by non-routine legal expenses. As with our marketing and our salaries and wages, we achieved significant leverage in our G&A expense in the quarter. In addition to the GAAP measures I've discussed, Adjusted EBITDA is an important profitability measure that we use internally to manage our business. For the second quarter, we generated positive Adjusted EBITDA of $147,000, versus a loss of $10.5 million a year ago. This massive improvement was driven by our revenue growth, gross margin improvement, and operating expense leverage. We're very proud of the great work our teams have done to drive profitable revenue growth and optimize our expense structure, which supported our modest profitability in Q2. We continue to expect profitability to improve sequentially in the back half of this year as we continue to drive revenue growth while improving the efficiency of our business. I'll briefly walk through our balance sheet for the first quarter of 2023. We ended Q1 with $19.8 million of cash on the balance sheet, compared to $39 million as of December 31st. We also had $77.9 million of debt, compared to $49.2 million as of December 31st. As expected, our inventory balance grew slightly, and it was at its peak in Q2, as it has now begun decreasing in July and August. You will continue to see our inventory balance decrease throughout the remainder of the year as we convert our RTD inventory into cash over the coming quarters. Lastly, I'm pleased to announce that earlier today, we closed on a new credit facility consisting of an ABL credit agreement and a term loan credit agreement, which collectively provide aggregate borrowing capacity of up to $125 million. These facilities have allowed us to repay most of our existing indebtedness and will provide us with additional liquidity and a long-term capital structure to support our continued growth. With that, I will turn the call over to the operator for questions. At this time, we will be conducting a question-and-answer session. If you'd like to ask a question, please press star one on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star two if you would like to remove your question from the queue. To participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. Our first question comes from the line of Joe Altobello with Raymond James. Please proceed with your question. Thanks. Hey, good afternoon, guys. A couple of questions for you. I guess first, just to start with the RTD category, just so I'm clear, I, I think you said the category was down 8% in the second quarter. Is that correct? That's correct, Joe. Tom Davin here. Hey, Tom. What did that look like in the first quarter? I just want to see what the sequential slowdown was. It was down. We pulled that 10 yesterday. It was down 4. It was down 2% in Q4 of last year, 2022. Okay, it's been progressively slowing. Given your, your view of the category, what's, what's been driving that? We don't have a good answer for that. I mean, you had a nice pop during the COVID period. I can't say that traffic into convenience and gas has gone down. It does seem like people may be shifting into energy drink. Mondzelewski? I think the one factor would be higher prices. We've seen higher prices continue to move into the market, and as, as that becomes more of a differential, then we've seen the, the category sort of commensurately move down with that. Okay. Maybe a little bit more color on, on the, on the new FDM partnerships you guys announced. You said you have a new national partner and two new regional grocery partners. Can you give us some insight into who they are and when you expect to start shipping? Yeah, I'm gonna pitch that one to Chris Mondzelewski, who we call Mons. Mons, over to you. Great. Yeah, thanks, Tom. Yeah, we're excited. We, we do have a new, it's, it's a large West Coast retailer. We're currently shipping all divisions of that retailer. We expect to be in all stores by the end of the year. Then, we, as you mentioned we do have a number of smaller retailers that we're working with towards the end of the year as well. We're in conversations with honestly, at this point most, most large retailers in the United States. Okay. Thank you. Our next question comes from the line of Keegan Cox with D.A. Davidson. Please proceed with your question. Hi. I was just wondering, like, we've seen coffee inflation today was down, heading towards like a deflationary environment. I was wondering what the impact of lower coffee prices would be on your guys' gross margins? Sure, Keegan, this is Greg Iverson. I, I can take that. Just stepping back, as we've said on past calls, our practice is to, is to place forward purchase contracts for coffee, usually about 12 months out. What you said is exactly right. The cost of coffee as, as a commodity, has gone down pretty significantly over the last several months or, or quarters. The, the coffee that's flowing through our P&L right now is all coffee that we had, we had purchased, not physically, but at least had placed contracts on at rates last year that were higher. We're not seeing the benefit of the lower cost of coffee going through our P&L this year, but we certainly will as we go into 2024. Awesome. Then just a follow-up is, right, if we are heading to a deflationary coffee environment, what do you think the benefit or impact will be on, like, units sold? Can you say the last part of your question there? I didn't catch that either. Yeah. What would be the impact on units, like, bagged coffee sold or grounds sold? Is your, is your question around demand or potentially pricing at, at the retail level? Yeah, pricing and demand at the retail level. Yeah, from, from a demand perspective, I think if you go back and look, look over time, the, the cost of coffee hasn't had a big impact on demand at, at the consumer level. In terms of any deflationary pressure or risk, that's something that we watch closely, as I'm sure everybody within the coffee space does, but we're, we're not seeing any indications yet that the prices are, are going down or pressure from the retailers to start lowering price. Thank you. Thank you. Our next question comes from the line of Jon Andersen with William Blair. Please proceed with your question. Hey, good afternoon, everybody. Hey, Jon. Hey, I wanted to start with Walmart, your-- and ask, based on the performance to date, and congrats on hitting 4.4%, are you seeing similar strength, similar results across geographies? Or is there anything to be learned from maybe performance, urban versus rural or different parts of the country? Then also on Walmart, as you get ready to launch or have launched some of these new SKUs, it sounds like you've already launched., how quickly do those get to the shelf and what are your expectations in terms of kind of incrementality of those SKUs? Do those tend to be highly incremental because they're different form factors, different flavors? Just some thoughts on incrementality there. Thanks. Mon? Yeah, great. Yeah, Jon. On the first question interestingly, we've had pretty steady performance across the entire market. When we look at all Walmart divisions, we've seen the, the, the products performing well., there is, there is a bit of an index towards the Midwest and south when you look at it from an index standpoint, but obviously in larger geographies like the West Coast, the northeast we still, we, we see larger volumes, as you would expect. The performance has been strong nationally., we've been, we've been real happy thus far with the cut-in of our new items. They're on shelf., you should see them in a lot of the Walmarts you would go to now, possibly not all stores. , 6-8 weeks is when we'd expect to see full distribution of those new items on shelf., incrementality will really depend on the item itself., for any of the items that are going into segments where we have existing distribution, so K-Cup, as an example we will obviously see some level of cannibalization, and we've built that in to our own in-in-internal forecasts. That being said given... While we're, we're very happy with our market share, it still is a lower market share overall versus the category. We, we expect as a result of that, to see a high level of incrementality. On items where we don't actually, have, have within the segment, for instance, our cold brew item, we actually expect that we'll see, almost 100% incrementality. That makes sense. With regard to the expansion at FDM in the large West Coast retailer and some of the regionals by the year-end can you talk about how you kind of the criteria you've used to kind of select this, this next phase of retailers? For the second half of 2023, and then are we talking about maybe a much more, sounds like you're talking to most large retailers, as you said, a broader rollout across a number of new chains in 2024. Just trying to get a sense for, again, what kind of criteria, how you're thinking about phasing it and why you've selected the retailers you have, post-Walmart, and then, yeah, we'll start there. Yeah, it's a great question. I think we're very proud of the brand that's been built, and as, it's a very premium brand. We will seek partnerships with retailers that really see eye to eye with us on that., we've been delighted with the partnership with walmart obviously, the success we've had there. I think every retailer obviously is different. They, they operate under different models, and we understand that. It's important to us that we know that whatever deal we strike with that particular retail chain, we're gonna get that execution that we would expect as a premium brand in the market. Again, working that within their own individual criteria is, is obviously important on their side, but then we have criteria on our side to ensure that we're getting execution that we would expect as a premium brand, in the market. Yeah, again, that's, that's, that's the criteria that we're primarily focused on. That's helpful. Last one for me, just as you get higher ACV in food, drug, and mass, more, average items at the shelf is that what is gonna drive greater awareness for the brand? Or there other things that you're gonna be doing to, to try and, increase that 28% awareness? Which frankly seems like a great opportunity. 28 seems low relative to some of the other, obviously, big brands in the market. Is there also is there a shift in kind of the marketing mix as you go forward, maybe in-store activity, as again, you build ACV in food, drug, and mass? Thank you. Yeah, this is Evan. I think that Chris coming in, I guess 3 months ago now and kind of redefining what we're doing specifically in the marketing department, allowing us to get, what I would say is, is, more efficient with our marketing dollars. We've been able to ultimately- build out a more strategic game plan related to how we're gonna activate with FDM, then also, what does the future of marketing look like for Black Rifle? How do we build out more of our strategic partnerships that allow us to grow awareness? At the same time, what I would say is, it's a more efficient dollar. As we start to expand outside of d2c there's, there's a lot of opportunity there to, to spend more efficiently with our marketing budget, which is obviously reflected in some of the financials. Yeah, go ahead, sorry. No, go ahead. Yeah, I was gonna build just a bit to say I wanted to address the first part of your question as well. You mentioned the ACV expansion. Absolutely. I think that certainly in, in, in any category in CPG, your, your on-shelf awareness is a huge part of your advertising., that's something that we focus a lot on., the distinctiveness of our brand, the distinctiveness of our package, the ability to drive secondary display, these things will all drive awareness in the market. But to Evan's point we're also very excited about our ability to do that through advertising of the brand. Again, this is a brand that's been that, that's been built very much through owned media. , we're, we're continuing to find other ways to do that through paid and earned, and you're gonna see a lot more of that going forward with, with the business. Just one quick one. Are there, from a capacity standpoint, any constraints in terms of continuing the ACV expansion and adding new partners? No, not an issue. There's plenty of capacity out there. Plus, as we've talked before, we're building more capacity to roast in Manchester, Tennessee. That's not an issue. Thanks so much. You bet. Thank you. John? Our next question comes from the line of George Kelly with Roth Capital Partners. Please proceed with your question. Hey, everyone, thanks for taking my questions. First, another question on Walmart. I was curious if you could talk about the percent of the aisle that cold brew and canisters represents. George, I'm gonna kick that one over to Mon. You're getting at the fact that we've talked about 50% of coffee at Walmart we've not participated in yet. Yeah. Right. Yeah, just curious what those two new products, the, the innovation SKUs, what they represent of Walmart's aisle. You said cold brew, and, and which other one? I'm sorry, I'm- Canister. Oh, canister. Very different. I think cold brew is actually a very small percentage of the overall aisle. It's, it's really a newer category for them. Versus canister, which actually is a huge portion of what they're selling already. In the case of canister that's a quarter overall of what their, their business is from a category standpoint. obviously we're excited about having potential incremental sales within that. Then in the case of cold brew, it's really just a very small segment at this point. It's, it's growing. It's, it's less than 2%. Again, we're excited about the potential of that. When you look at the consumer trends, that is where consumption is beginning to shift to. again we expect to see probably in the case of canister there'll be a bit more moderate growth of that segment. While it's, it's large, it has scale now. In the case of cold brew, it has obviously a much smaller overall play currently, but we expect to see much more explosive growth of that segment. Okay, great. That's helpful. Second question for you, or I guess a few questions on your RTD business. I was curious if you could spend a bit of time. You mentioned just briefly in the prepared remarks about your focus on margin in that business. Just curious, is is it still a pretty challenging kind of near and medium-term outlook? Is there much you can do internally to, to, improve margin there? The second part of the question is might you kind of deprioritize growth in that business? You've got this wonderful retail business that's emerging and I think carries a much higher margin profile. Is rtd still as much a priority as, as it was a year, two years ago? Yeah, George, it's Tom. Thanks for the question. Yeah, if you think about our history with RTD, we've had a number of startup issues, as, as we brought on new commands, as we fired up new SKUs, both core and LTO. That's been a drag on profitability this year. Particularly as we look to next year, that will not be an issue. We feel good about the future RTD margin profile. We really have good relationships with our external co-packers, and, and we understand where we need to be. We know what their needs are. That margin is stabilized. Really, to your second point, we are prioritizing making money in RTD over just purely growing. We're not gonna be adding a lot more SKUs. We've got plenty of SKUs right now. It's really about focus, plan the accounts, execute at the street level, and drive incremental profitability. Okay, thank you. You bet. Our next question comes from the line of Matt McGinley with Needham & Company. Please proceed with your question. Thank you. With the revenue guidance revision on the ready-to-drink package velocities, how did the ready-to-drink product perform in new doors versus doors where you already had distribution? Was, was the slowdown that you saw consistent in old doors versus new doors? Secondarily there, if you don't get to the 100,000 ready-to-drink doors by year end, would your revenue guide fall below that 30% for the year? Do you have good enough line of sight on that ready-to-drink distribution, that even if you did 100,000, I don't know if 100,000 is a magic number or not, but could you still deliver within that guided range? I guess, put it, put another way, is that, is that 100,000 really an important deliverable? Hey, it's Tom, Matt. I would say, I'll answer the second one first. No, it's not critical. It's more directional. We feel pretty good about the doors we're in. We feel like we'll continue to add doors and gain more ACV, so that's not a big lever. To your first point, it really is more units per door, per month. In particular, we've not been happy with the performance of our LTO ready-to-drink products., they've come up short on us, but overall, it's a matter of the category not being as strong as we expected, and we know we can execute better. As mentioned in my prepared remarks, we've done a deep dive review on the business. Mondzelewski obviously coming on board has worked closely with the sales and marketing teams. We've made changes and everybody understands what they need to do, so we feel good about being able to hit that number for the year. And Matt, this is Greg. I'll, I'll just add to this, because the, the whole idea of doors comes up quite a bit in, in these calls and other conversations. One of the things that's important for us to reiterate is, you, you really can't model our business accurately using doors as a, as a proxy for revenue. In some cases, it's, it's not even going to line up directionally. To back to your specific question, if you were to look at how, how we expect doors to grow throughout the rest of the year versus, versus revenue, it's definitely not, not going to be linear. Got it. On the restructuring that you instituted in the 1st quarter, I don't think you expected to fully realize those savings in the 2nd quarter, but should we expect to see your OpEx dollars decline in the 3rd quarter from restructuring, or does that Outpost headcount increase that you referenced, prevent those OpEx dollars from falling? I'm just kind of wondering if should we expect those dollars to be down from here, or does the Outpost kind of grow it? Yes, Matt, Greg, again, that's, that's a good question. You're absolutely right in terms of the Outpost headcount. As, as we mentioned, most of the Outpost cost structure sits within the G&A line. All the salaries and wages for the folks who work at the Outpost are in salaries and wages. The rent, occupancy, and other costs are, are in G&A. There, there was definitely growth in those areas in the second quarter as, as we opened new stores. That growth offset some of the efficiencies that we saw in both of those line items. I, I think the important message is, we've, we've made really good progress in terms of simplifying our business, improving our, our cost structure, finding efficiencies within our, our G&A, and that work isn't complete. That, that work will continue. We'll continue to find some opportunities to streamline the business while serving our, our customers and, and our consumers. That will be offset a little bit by increases in salaries and wages and other costs as, as we, we do open one more Outpost this year. Okay, thank you very much. Thank you. We have reached the end of the question and answer session. I'll now turn the call back over to Tom Davin for closing remarks. Thank you to everyone who joined our Q2 Black Rifle Coffee Company financial results earnings call. Just to recap, net revenue increased 39% in the quarter to $91.9 million. That's up from 27% growth in Q1. As committed, we achieved EBITDA adjusted profitability. We're feeling excellent about where we'll end up for the balance of the year, and we've, announced that we've launched a second national grocery customer with 2 additional regional chains, and we completed a major refinancing. Thank you for your questions, and we look forward to the follow-up calls. This concludes today's conference. You may disconnect your line at this time. Thank you for your participation.