To The Moon

Black Rifle Coffee (BRCC) shares jumped 30% in their first day of trading on the New York Stock Exchange.

The Austin coffee-bar chain bills itself as a company founded "to support veterans, active duty military [and] first responders" and "to [connect] consumers with great coffee and a unique brand experience."

Aiming to Hire 10,000 Veterans

Black Rifle is a unit of Authentic Brands, the closely held New York brand-management company. The company went public via a merger with a special purpose acquisition company, or SPAC, affiliate of SilverBox Capital.

Black Rifle Coffee

The new company is BRC Inc., trading under the symbol BRCC. The shares closed Thursday at $15.64.

The company says that it aims to hire 10,000 veterans as it expands across the U.S. The merger will give Black Rifle about $150 million cash to fund its strategy.

As part of its efforts, Black Rifle is donating more than 530,000 shares to a foundation that aims to improve the lives of veterans, active soldiers and first responders.

The company was founded in 2014 by a Green Beret, Evan Hafer, who leads as chief executive.

It was long a favorite of Americans on the conservative end of the spectrum, with its merchandise co-opted over the last two years by extremists including Kyle Rittenhouse, who killed two Black Lives Matter protestors in Wisconsin in 2020.

An interview the company's leadership did with the New York Times last summer seemed to dampen that appeal, however, as they sought to distance themselves from political extremism.

Medium Roast: Thin Blue Line

Salt Lake City-based Black Rifle produces dark roast under brand names like Blackbeard's Delight and Freedom Fuel, as well as medium roast under the names Thin Blue Line and Coffee Or Die.

It also publishes a magazine under the title Coffee or Die.

Black Rifle Coffee currently operates 16 stores, which it calls outposts, with eight of them franchised and eight corporate-owned. The stores are located in Texas, Utah, Oklahoma, Florida, Georgia and Tennessee.

It said expects to more than double that total to 36 this year and double it again to 78 in 2023.

Its focus states for expansion: Arizona, North Carolina, Virginia and Maryland.

Can This Omnichannel Plan Work?

The company in its investor presentation notes that it has an omnichannel model, including a direct-to-consumer subscription business "with low churn."

It also has a growing wholesale business, a canned ready-to-drink product, and a growing base of coffee bars.

The company estimates revenue for 2021 was $230 million, 40% above the 2020 figure. Gross margin is also estimated at 40%.

For 2022, Black Rifle pegs revenue at $311 million with a gross margin of 41%. The figures for 2023 are $430 million and 44% margin.

SPACs, or blank-check companies, are formed for the express purpose of finding and merging with an operating partner. The idea is to speed the operating company to the public markets and avoid the extended process of a traditional initial public offering.