Greetings, and welcome to the Black Rifle Coffee Company Fourth Quarter and Full Year 2021 Earnings Call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. [Operator Instructions] As a reminder, this conference is being recorded. I would now like to turn the call over to Tanner Doss, Vice President of Investor Relations. Thank you. You may begin.

Good morning, everyone. Thank you for joining Black Rifle Coffee Company’s conference call to discuss our 2021 financial results, which released this morning and can be found on our website at ir.blackriflecoffee.com. With me on the call today is Evan Hafer, Founder and Chief Executive Officer; Tom Davin, Co-Chief Executive Officer; Toby Johnson, Chief Operating Officer; and Greg Iverson, Chief Financial Officer. Before we get started, I would like to remind you of the company’s Safe Harbor language, which I’m sure you are 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 further discussion of 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 and adjusted EBITDA margins. Reconciliations of these non-GAAP measures to the most comparable GAAP measures are included on the earnings released furnished to the SEC and also available on our Investor website. Now, I’d like to turn the call over to Evan Hafer, Founder and Chief Executive Officer of Black Rifle Coffee Company.

Thanks, Tanner, and good morning, everyone. Let me start by thanking you for joining our first earnings call as a publicly traded company. You may have heard me say before, but I think it’s worth repeating. I first started Black Rifle Coffee Company as a way of connecting people, honoring the generations of brave men and women that have served and continued to serve this country. I believed it would also be a way to give back to our veterans, both as an employment opportunity and through philanthropy, and with the utmost appreciation to their service. With help from fellow veterans, Mat Best and Jarred Taylor, we generated over $1.3 million in direct-to-consumer sales during our first year of business from my garage. And I was still able to contribute and give back to the veteran community through a nonprofit. That commitment to veterans has been central to our mission, including the hundreds of thousands of pounds of coffee we’ve donated to the military and first-responder units across the United States and the globe. In 2021, we also donated more than $3 million of value in coffee to the frontlines, and over $1.2 million to the veteran and first-responder charities. We’ve also set a bold hiring goal to hire 10,000 veterans to join us in expanding our mission. Our vision for Black Rifle Coffee Company as a public benefit corporation is to become one of the few public companies dedicated to supporting the veteran community by inspiring them to both become entrepreneurs in hiring them to join our team in serving them through our charitable work. I’m thrilled that we are all here today and look forward to building a great company and delivering strong results. Let’s get right to it and talk about our strong fourth quarter and our…

Thanks, Evan, and good morning, everyone. I’ll begin by highlighting our fourth quarter financial performance and providing an overview of our key growth initiatives. Our results of the fourth quarter reflect sustained top line growth throughout the year. The continued momentum demonstrates that we’re uniquely positioned to win in this competitive category, as we leverage the Black Rifle Coffee Company brand to serve our passionate customer base and attack the massive coffee market opportunity. I’ll discuss these competitive strengths in more detail. First, we are mission-driven lifestyle brand with a loyal customer base. Our mission is core to everything we do and a major driver of our success, engaging and attracting customers, employees and business partners. Our content creation capability enables us to build a large and growing community who love interacting with our brand on a daily basis. The support for our mission and our premium quality coffee drive exceptional customer retention and affinity for the brand, as evidenced by our category leading Net Promoter Score of 78. Second, we have a massive market opportunity. The U.S. coffee market is over $45 billion and we estimate our serviceable addressable market to be $28 billion. This includes $100 million U.S. customers who are aligned with our brand values. Note that our $233 million in revenue last year equates to less than a 1% share of our serviceable addressable market. So we are positioned for many years of sustained growth. Third, we have a powerful and proven omni-channel strategy to drive our growth. We’re a digitally native coffee and merchandise business that enables us to participate in multiple complementary channels, creating branded experiences that deliver community, premium quality, convenience and value. We achieve all of this across three primary channels: direct-to-consumer, outposts, and wholesale channels comprising our unique omni-channel flywheel. Looking…

Thanks, Tom, and good morning, everyone. Today, I will discuss our 2021 fourth quarter and full year results, briefly touch on our balance sheet following our SPAC merger and then update you on our fiscal year 2022 outlook. Turning first to our financial results, we are pleased to have delivered solid results in the fourth quarter and full year 2021 as we continue to make progress across all three of our sales channels. For the fourth quarter, total revenue increased 20% to $71.8 million, compared to $59.9 million in Q4 of last year. For the full year, our total revenue grew by 42% to $233.1 million. The meaningful increase in revenue was driven by growth across all three of our sales channels, most notably our wholesale and outpost channels, which continued their impressive growth in 2021 by 139% and 325%, respectively. Now I will give some additional details on our three sales channels. First, our direct-to-consumer revenue increased 3% in the fourth quarter to $49.6 million compared to $48.3 million last year. The slight increase was a result of comping against a prior year period with unprecedented consumer demand when most consumers were stuck at home during the COVID pandemic. To give some context, Q4 2020 direct-to-consumer revenues were up 78% compared to Q4 2019. For the full year 2021, our direct-to-consumer channel increased by $27.6 million or 20% to $165.3 million, due principally to an increase in the number of our coffee clubs subscribers. Our subscriber base grew 14% in 2021 to 287,000 subscribers compared to 252,000 at the end of 2020. Our wholesale revenue increased 74% to $17.2 million in Q4 compared to $9.9 million last year. For the full year 2021, we saw wholesale revenue increased $32.4 million or 139%, bringing our total wholesale revenue to $55.8…

Thank you. We will now be conducting a question-and-answer session. [Operator Instructions] Our first question come from the line of Joe Altobello with Raymond James. Please proceed with your questions.

Thanks. Hey, guys, good morning. Congratulations. First question not surprisingly, on gross margin and Q4. Could you parse out for us how much of the weakness was from product channel mix and how much was from cost inflation?

Yeah, you bet, Joe. It’s Greg Iverson. Good morning. Glad to be on our first public company earnings call with you today. But yeah, just breaking down at a high level the significant factors that drove the decrease in our Q4 margin year-over-year. The first one is inflation, which was the largest in the aggregate was about 400 basis points. And that’s comprised of both shipping, increased costs from our RTD, as well as a small increase in our green coffee prices. The second factor is mix, and it netted to about 130 basis points. So keep in mind that our outpost channel has our highest gross margins. And so as we did increase our outpost sales year-over-year, we saw some favorable impact on margin. But that was more than offset by larger increase in our wholesale channel, in particular, the ready-to-drink product, which has the lowest gross margin of our products and channels. And then the third piece is the net of pricing and promo. We did take a little bit of price in the fourth quarter of 2021 that had a favorable impact in our non-subscription direct-to-consumer business, but that favorable pricing was more than offset by increased promotions in the fourth quarter of 2021 versus 2020. The net of all that price and promo was about 40 basis points.

That’s very helpful. And maybe just a follow-up on that. Could you remind us how much of your cost of goods is green coffee and how much you have hedged at this point for 2022?

Sure. Yeah, in terms of the price, the portion of cost of sales, that’s a number we haven’t given out. What we’ve said is that it’s about – it’s in the single digits in terms of percentage of revenue. In terms of copy hedging, just as a reminder, our policy or practices to hedge about 12 months out, so as of today, we’re fully hedged through Q1 of 2023. When we last provided outlook in Q4, at that time, we were already fully hedged through the end of 2022. So while we’ll see a step up in our coffee prices, certainly going into Q1 and then sequential steps up on a go-forward basis, those are at prices that have been hedged now for some time, and are still quite a bit lower than the current spot rate from a coffee futures perspective.

Great. Thanks, guys. Good luck.

Thanks, Joe.

Thank you.

Thank you. Our next question is come from the line of Wendy Nicholson with Citi. Please proceed with your questions.

Hi, good morning. I had a couple of questions on the outpost. First question is, did you see any impact in the fourth quarter, I know you had a lot of openings then? But in terms of Omicron, and any weakness in sort of in terms of store productivity, and just thinking about that, as we sort of build up our model for 2022 as you layer in those stores. I know you said they were going to be mostly waited to the very end of the year, but still trying to get an idea of sequential revenue growth, if you will, for the outpost channel?

Hey, Wendy, it’s Tom Davin, thanks for hopping on this morning and asking the question here on our first earnings call. We did not see any impact from Omicron, with very strong store openings and good momentum coming into the year.

Great. Okay, fantastic. And just on the labor side, I know you said that whatever wages have gone up, and so your labor expenses increased a lot, which makes sense. Are you having any issues with labor availability and staffing the stores as you open them?

We are generally not. Given our commitment to hiring veterans, we find anybody who wants to work in a coffee shop, and particularly veterans who work at competitive shops, they’re among the first in line when we have now hiring under construction coming soon Black Rifle Coffee shops. I will say we have to pay a market rate. So it is competitive out there in terms of wage rate, but we’re having no issue, finding great quality people, get part of our value proposition is that we do promote from within. So people know they’re signing onto a growth company. And they have opportunities to start this shift leader or move up to an assistant manager and the like. The other thing I’ll mention, as you remember, with our model being about 45% merchandise and bagged coffee sales were highly productive. Because once that products out there on the retail space on the shelf, there’s almost no incremental labor to bring that product up.

Got it. Got it. Yes. And indulge me if you can for just one more on the same outpost subject. In terms of the change in your prototype, the building up of the stores, that sounds great, and I’m sure they’re going to be fantastic working. But does that change the unit economics at all? I know you’ve always said the unit economics you have for the stores are really, really strong. So does that strategy change that at all? And can you give us a CapEx number maybe for 2022? Or if you did, I missed it? I’m sorry.

Absolutely. So in terms of the new prototype, the CapEx number is the number we’ve talked about in the Analyst Day presentation of about $1.4 million per store on a build out and that includes everything from the dirt up. So we’re not including the ground lease or the cost to buy the dirt in that. So when we put that number together, it was anticipating the new prototype model. Obviously, there is cost inflation out there and labor to build new units and construction costs. But we had anticipated that when we put that number together. We do see significant benefits in terms of the consumer experience and it’s going to make it a much better place to work for our baristas and our staff. So we’re super excited to pull those out of the ground. But overall, no change in the unit economics. We do hope to have more upside on the top line, in terms of productivity. In terms of CapEx, Greg, I think the numbers we put out during Analyst Day are still generally good.

Yeah. And as Wendy just said, you’re right, we did not guide to a CapEx number for this year. But in our Analyst Day presentation, we referenced $13 million in CapEx that wasn’t related to the outpost build. That’s principally for us to expand the capacity and put some automation in place in our Tennessee roasting facility. Our plans are still really unchanged there. We’re moving forward and really excited about that initiative. With regard to the remainder of the CapEx, most of it is related to the outpost. As Tom mentioned, we’re tracking at $1.4 million per outpost build. As you probably saw, we did increase our expectations around new outpost openings to a range of 15 to 20. So with that, we do expect increased CapEx in 2022, but it’s just related to incremental outpost openings.

Great, fantastic. Thank you so much, and congratulations. I know it’s a really exciting time for you all.

Thank you, Wendy.

Thank you, Wendy.

Thank you. Our next question is come from the line of Mike Baker with D.A. Davidson. Please proceed with your questions.

Hey, thanks, guys. I wanted to talk about the coffee pricing a little bit as well. And so our work shows that not only did you take prices up, but competitors did as well, at least on the bagged coffee. Can you talk about if you’re seeing any pushback from consumers, either in the bagged coffee or what you’re doing in the outposts to make coffee seems pretty inelastic. But if you could just talk about if you’re seeing any change in unit demand as prices go up?

Hey, Mike, it’s Tom again. So the headline is no, we’re not seeing pushback or any elasticity of demand and just to recap in a little more detail what we’ve done on pricing. So we took up the MSRP, or stated price on bag coffee and what we call rounds, or K-Cups by approximately $1 per bag or box of rounds. It’s about 7%. And that was effective across all of our channels, including non-subscription, direct-to-consumer. We have not yet taken up pricing on our subscription or coffee club, coffee and rounds. We’ve also taken the pricing up similarly $1 per unit with our B2B accounts, though, as you might imagine, with some of the bigger accounts, there’s a lag between when that price becomes effective. Also, we took a $2 increase on our direct-to-consumer shipping cost from 595 to 795 for orders below the free shipping threshold. In coffee shops, we did take drink pricing up just this week, approximately 9%, which generally matches competitors, including Starbucks, in the local neighborhoods where we operate. And then for ready-to-drink, Toby Johnson, who’s here with us our COO, she’s leading a price increase, that’s roughly going to be about 10% to our convenience and other accounts out there. That’ll take effect in Q2, and we’ll really see the benefit of that in Q3 and Q4. We do have additional pricing actions underway. But as always, we’re trying to balance out taking care of the customer delivering that premium coffee at a great value while offsetting the cost inflation.

Okay. Yeah, that’s helpful. And then just can you talk about as your prices go up, what’s your view on input prices, coffee input prices, some of the data we look at shows some of the futures are actually starting to come down a little bit. So I know you have some hedges in place. But it seems like your prices are going up while some of the commodity costs going down can that end up being a gross margin boon at some point?

Hey, Mike, this is Greg. I can address that. And I mentioned just a few minutes ago that we’re hedged now through the end of Q1 of 2023. So in terms of our 2022 coffee prices, those were locked in at a higher rates than what we saw in 2021. But still quite a bit lower than the current futures. Like you mentioned, the cost of coffee futures have gone down quite a bit since we’ve seen the war in Ukraine and increases in oil. There’s definitely some a lot of volatility within the coffee trading world right now. Just based on our always be buying strategy, we’re – I think we’re able to basically use that volatility to our advantage and continue to lock in some of our position for 2023 as the price of coffee continues to decline.

Sounds like you guys are playing it well. Appreciate the color. Thanks.

Thanks, Mike.

Thanks, Mike.

Thank you. Our next question is come from the line of Sarang Vora with Telsey Advisory Group. Please proceed with your questions.

Thank you. Congratulations on a great quarter. It seems like you guys are brewing a strong growth story. My question is on the cost savings, which has an impact on the margins. I feel like you guys mentioned you hired an international firm to evaluate your operations and you see significant savings in like freight, sourcing and packaging. Can you share some colors on some of these areas, like where in trade, you could see some benefits? Or are you changing your sourcing, because the coffee has gone up a bit from one region to another region or packaging? Can you shed any colors on some of those structural cost saving initiatives? Thank you.

Absolutely. Thank you for the question. This is Toby Johnson, Chief Operating Officer. So as we brought in the partners that Greg mentioned earlier, we really look end-to-end across our business for the biggest opportunities to increase efficiency, and really progress our gross margin stories sequentially throughout the year. So all the things that you mentioned are in scope, everything from our sourcing and our key areas that affect our business to our 3PL to our fulfillment. And just generally, looking at any pockets of cost and efficiency that we can streamline, our number one focus remains growth and being very focused on growth and accelerating the business. But at the same time, we know it’s important to drive that efficiency across the business. Does that answer your question?

Yes. Yes. Got it. Thank you.

Thank you. Our next question is come from the line of George Kelly with ROTH Capital Partners. Please proceed with your questions.

Hi, everybody, thanks for taking my questions, and congrats on all the momentum. So first question for me is in the RTD business. Just curious, you said that a lot of the demand is being unmet. So can you quantify the level of that imbalance?

Hey, George, it’s Toby, again. Happy to talk about that. So it’s really a good story. We have enough capacity to meet all the commitments that are in our plan. But what we’ve seen is such support for the products that we have, from consumers and from retailers, that the unmet demand is really additional opportunity for us to go after. So we entered the year actually more than doubling our capacity for our TD. We’re looking at additional expansion. And we’re in advanced stages of negotiations with additional partners that will help us continue to expand our capacity for ready-to-drink coffee. So it’s really taking advantage of the momentum on the brands and continuing to accelerate. So it’s actually a really good story for the product and for the brand.

Gotcha. Thank you. And then second question just on advertising. So in your prepared remarks, it sounds your strategy and kind of how you think about advertising is shifting a bit. So just curious if you could talk more about that? And what – you’ve got so much more scale now than you’ve had in the past and your balance sheet was so much different. So, what does that allow you to now consider?

Well, this is Evan Hafer. Thank you very much for the question. So I think the big pivot point is that we’re shifting to a owned media strategy. We’ve been really moving towards that over the course of the last eight years. What we’ve seen is inconsistency or what I would say is platform volatility that disrupts basically our CPM and our CPA average to specifically along the lines of the DTC customer base, whether we’re moving it back towards blackriflecoffee.com, or we want to push up thing through a CPM basis through one of the platforms. What we want to do is invest more specifically within our influencer strategy, which is why you’ll see Travis Pastrana just came on which he’s the largest action sports figure, internationally. He’s been with Red Bull for 20 years. He’s a very recognizable name as far as both energy and then beverage space, and then action sports, which it’s a big investment, but Travis has been a really good friend of ours for a long time. But the owned media strategy allows us to push traffic back to places like coffeeordie.com, where we have 2 million-plus unique visitors per month, grow our channels and then interact with our direct subscriptions related to our customer base, so we can grow and sustain our followers, interact with our customers and then retarget them specifically with other products that we might be wanting to propel or push a little bit more visibility into. So each and every one of these is directly connected to the omni-channel flywheel that we continue to reference, that investment will continue to pay off, and it’ll yield us a greater result as we continue to grow top line over the course the next 12 to 36 months.

Okay, great. And then just one last question for me. The guidance you provided $315 million, it’s about $80 million increase from what you did in 2021. Can you help break down that increase by segment by DTC outpost in wholesale? And I’m just curious is this – is 2022, is that growth really largely about the RTD business?

Yeah, George, it’s Greg Iverson. And as you noted, we didn’t provide guidance by revenue channel. But if we think about it – as we think about growth rates going into – in the year went right now, yes, RTD is absolutely going to be the growth leader during the current year. It’s – our wholesale channel is going to have the highest growth rate, followed by outpost and we mentioned that we’ve got a really backend loaded store opening schedule for 2022. So we have a significant growth within the outpost channel. But that growth rate from a revenue perspective really begins to accelerate into 2023. And so the lowest of the growth rates is as you’d expect, within our direct-to-consumer channel, which as a reminder is, how the business was started and founded and where we’ve been operating for since inception.

Okay, understood. Thank you so much.

Thank you. Our next question is come from the line of Bill Chappell with Truist Securities. Please proceed with your questions.

Thanks. Good morning, and welcome to the public world.

Thank you, Bill.

A couple of questions just on the top line, just kind of our housekeeping in the raise to $325 million, or at least that this year, is that versus your original kind of expectations a couple of months ago? Is that largely all price? Or is it kind of the business momentum that’s allowing you to raise it?

Bill, just to clarify, our prior revenue outlook that was in our investor presentation from last year was $311 million. Our raise right now is at $315 million. So it’s a relatively modest raise as we go into the year. As Toby mentioned, we’ve got upside. We think from a rate strength perspective, but nothing that we’ve built yet into our baseline revenue outlook.

But I guess if you’re – if you didn’t have a, say, a 5% increase in the prior guidance, and you do have it now, I’m just trying to understand, is it all just, say, now we’re reflecting the pricing? Obviously, there’s still more upside there, but just want to make sure I’m not missing anything?

No, I don’t think you are. I mean, I guess let’s just go back to our 2021 results. We ended 2021 higher than our prior outlook. We were about 4% ahead from a revenue perspective. So our launch point into 2022 was slightly better than our prior outlook, and we’ve just reflected that in our updated guidance for 2022.

Okay. And then, if you permit me to kind of a more of a fundamental question, but why being EBITDA positive, why is that important this year? I mean, you’re a growth company, you’ve got a proven model, you’ve got so much opportunity to expand, why not push that out even further and step up advertising marketing, outpost growth, what have you, and get bigger, faster? Just help me understand that, because I’m not sure investors are as focused on winning turned to profitable is more of – it seems to be more of a focus on the opportunity on the top line. And so just help me understand that from a fundamental or philosophy standpoint? Thanks.

Hey, Bill, it’s Tom Davin here. Great question, and again, thanks for being on. So we are focused primarily on growth. But we made a commitment to public investors to that breakeven goal for last year and for current 2022. And we collectively have debated this, could we go a lot faster, but we think we have the resources to drive the business and manage the middle of the P&L and hit that adjusted EBITDA breakeven for the year. It’ll be an ongoing debate, but we think we’ve strike the right balance.

Okay.

Yes. I’ll pass on that. You – by the way, this is Evan. So I think it’s not only our firm commitment to as we look into the future, it’s our commitment to focusing on all aspects of the business. And we have to be – it’s – we’re eight years from my garage. We’ve been focused on becoming a high-growth company, but we also really have to focus on the bottom line and becoming profitable and have a pathway to profitability. So when we look at not only the growth story of the company, but we also have to look at how do we become profitable and how do we manage all aspects of the business in great detail. So it’s both. I want us to be great at a lot of different things, but we have to be a great company.

No, that’s very helpful. And if I could squeeze in one more just on the outputs openings towards the fourth quarter, how much revenue expectation is from that? And is there any risk if they open from October 15th versus December 15 to the model? Or are you largely expecting those to generate revenue in 2023? Thank you.

Yeah, Bill. So obviously, it’s a game of getting local permits to construct the shops, get them open on time with proper staffing, and so forth. We think we’ve got a very conservative model, and the development team, obviously, working hand in hand with the operations team that will ultimately run the stores. The goal is to get stores open in October in Q4, not December, because if you open them at the end of the year, obviously, you get all the cost and not any of the benefits. So we think we’ve got an aggressive internal plan, that more than supports what we put out there in the way of guidance for the external plan.

And I’ll just add to that, to Bill, it’s an important question because we do have a pretty meaningful sequential step up in our outpost revenue from Q3 to Q4, just based on those store openings. And the other thing that’s important to call out to is we definitely see some seasonality with – within our coffee shops, particularly during the fourth quarter, which is our seasonal peak period, both in terms of beverages, and then certainly folks coming into our shops to do some holiday shopping, picking up apparel, bag coffee and other products.

Great. Thanks for the color.

Thank you, Bill.

Thank you. Our next question is come from the line of Matt Curtis with William Blair. Please proceed with your questions.

Hi, good morning. Thanks for taking my question. On marketing, you talked about the shift to more owned media going forward? And I’m just curious, is this meant to improve brand awareness primarily with your core existing core audience? Where – or is it really more to help build your brand with groups that may be newer, perhaps to Black Rifle?

It’s actually both. So the philosophy behind this is, when you’re outsourcing all of your media, both from external, well, I’ll say at media production perspective. And then also from a channel perspective, you have less control over how much you’re spending, and there’s more spend volatility as we look into the future. We’re a social media brand. And we’re very sophisticated, where I would say that we’re the most sophisticated coffee company when it comes to marketing and media. So as we start to look at what type of investments return a positive ROI, we really looked at our blog is a great example of this. When we looked at coffee or die, we looked at how much traffic that was driving from a pure cost perspective, as far as what’s it cost us in SG&A to run a coffee or die? And then what does it yield us from a direct conversion standpoint, from an internal investment from not only CPM, but also conversion on a DTC and then product conversion and other channels? What that did is it gave us a fairly sophisticated and predictable model to look at how do we invest in these things in the future? How do we grow these different aspects of the business? And that’s something that we’ve gotten several years of look back on. It’s not something that we’re just looking into a crystal ball, we’ve actually got a very detailed perspective in that model. So we think that we’re not only suited to scale that aspects of the business – that aspect of the business, we’re probably the only company in this category as far as averaging coffee is concerned to do it.

Okay, got it. And then the last one, regarding the redesigned outpost prototype, I’m just curious what you saw in the original design that prompted the change. I mean, was it an issue with throughput or perhaps the look of the stores or something else?

Yeah. So if you recall, our first store opened in August of 2020 in San Antonio, Texas. We call it the bitterness [ph] road store. It’s just a monster. But that was a conversion of a failed barbecue restaurant. So it was a bit sub-optimal both from the consumer perspective as well as from the team members perspective of supporting the barista, having the right storage for retail items and the like. So from day one, we knew we want to have a, if you will, fully fleshed out prototype store for us for our brand partners, which we call our franchisees. So number one benefit is from the moment anybody would see the store from the street, it really screams Black Rifle branding in a fallen authentic way. Then as you flow through either the drive-thru or you come inside a shop in the retail space or get a coffee beverage, you get the fully branded experience. And at same time, we optimized back of house ergonomics in terms of measuring footsteps for people to deliver, say, an espresso beverage to the drive thru, or to take care of people at the front counter or to restock the shelves for the retail items. So we see tremendous benefit. And it’s really just part of the natural evolution of a store fleet. And again, as I mentioned in my prepared remarks, we see 80% of stores going forward this year, being of that new prototype.

Okay, got it. Thanks very much and good luck.

Thanks, Matt.

Thank you. That is all the time we have for questions today. I would now like to turn the call back over to Tom Davin for any closing comments.

Well, thank you to everyone for joining our first ever Black Rifle Coffee Company public earnings call. We certainly enjoyed the questions. We look forward to the follow-up, and thank you all for participating this morning.

Thank you. That does conclude today’s teleconference. We appreciate your participation. You may disconnect your lines at this time. Enjoy the rest of your day.