Duluth Holdings Inc. · NASDAQ:DLTH
Duluth — Investor Presentation (December 2017)
29 slides from Duluth's investor presentation, Dec 8, 2017
Slide 1: Investor Presentation 3Q 2017
Investor Presentation 3Q 2017 December 8, 2017
Slide 2: Forward-Looking Statements
Forward-Looking Statements This presentation dated December 8, 2017 includes “forwardooking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. all statements, other than statements of historical facts included in this presentation, including statements concerning
Slide 3: Fire Hose Work Pants
FIRE HOSE WORK PANTS ONE TOUGH SON GOB Auas ©
Slide 4: The Modern, Self-Reliant American Lifestyle
The Modern, Self-Reliant American Lifestyle Men and women who are hands-on, value a job well done and are often outdoors for work and hobbies December 8, 2017
Slide 5: Company history and product milestones
lnvents The Bucket Boss underthe company name “Portable Products” Pe Establishes frst headquarters—a refurbished dredge bargein Duluth, Non Lake ‘Superior Introduces heroicaly tough yetsoFire Steve Schlecht, jy cet a, © oun = the Longtail Teshirt Hose® workwear | ics 2008 Mt 2010 e Introduces Balroo
Slide 6: Only available at Duluth Trading — complete distribution control of our brand
Only available at Duluth Trading — complete distribution control of our brand Call Center © Owned Distribution Center Retail Stores © 3 PL Distribution Centers ‘December 8, 2017
Slide 7: Investment Highlights
N A AEDS Feed Ba a) ARMACHILLOT Investment Highlights
Slide 8: Differentiated, Everyday Lifestyle Brand
Differentiated, Everyday Lifestyle Brand Tough enoughfor work yet comfortable enough for everyday casual wear istomer Profession = Create personal connections with our customers who lead the Modern, Self-Reliant American Lifestyle 100% 5 = Workwear heritage is the foundation of our authentic ing Tra
Slide 9: Wide Customer Presence
ide Customer Presence U.S. Population v Nationwide customer base aligned geographically with U.S. population v Unique ability to know where our customers are through our direct sales channel Top Three Markets #1~= California #2 Texas : #3 = New York ‘December 8, 2017
Slide 10: Omnichannel Presence with Distribution Control
PS Omnic hannel Bie ecnce with Distribution | ontrol Direct Segment IEE e-Commerce (87%) Catalog (13%) Y Presentour brand in a consistent manner peat ye Dee v Implement controlled pricing strategy y Own the relationship with our customers v Capture the full margin of our products v Reduce logistics
Slide 11: Innovative products solving customer problems
“Therearea whole lotta legs, torsos, feet and crotches out there counting onus” Buck Naked™ Underwear Crouch Gusset® Pants DuluthFlex® Fire Hose® Pants . i y Soggy and restrictive Restrictive pants in sensitive underwear areas: ‘euocmer = CR , : ioe ses 9 | “ Additional fabric lets our Fast-drying,
Slide 12: Gives our products an identity and enhances our brand
Gives our products anidentity and enhances our brand = Makes shopping for our products fun with attention-grabbing advertisements that are humorous, irreverent and quirky = National advertising campaigns feature characters such as our Giant f Angry Beaver, Buck Naked™ Guy and Grab-Happy Grizzly Sy =
Slide 13: Treating our customers like next-door neighbors creates loyalty
PS Treating our customers like next-door neighbors creates loyalty and drives repeat purchases Seamless, consistent omnichannel brand experience that makes shopping fun and hassle-free * Contentrich, user-friendly website designed to provide an enjoyable, informative and efficient shopping experienc
Slide 14: Growth Strategy
WITH DRY ON THE FLY* YOUR PANTS Eee oe ee Growth Strategy
Slide 15: Growth Strategies
Growth Strategies December 8, 2017 3 Grow Women's Business 4 Broaden Assortmentin SelectMen’s Product Categories
Slide 16: Build Brand Awareness to Continue Customer Acquisition
Build Brand Awareness to Continue Customer Acquisition = Broadcastand cable networks = Google paid search and banner Tangible vehicle for authentic and = Reachesa large national ads humorous storytelling audience «Extends TV advertising to digital + Drives visits to the website and «Features both an
Slide 17: Retail Store Expansion
hte Rota Expansion is ; Significant white space opportunity to grow our U.S. retail presence Retail Store Footpi }00 31 16 9 4 6 2013 2014-2018 -2016() 20172 Store Potential in Identified Markets ey | (2 neues tree out sore, Existing stores profitable in both metropolitan and rural locations across
Slide 18: Flexible Store Development Strategy
Flexible Store Development Strategy December 8,2017
Slide 19: Retail stores designed to bring our brand to life
Retail stores designedto bring our brand to life with engaging and entertaining elements Distinctive Exteriors Current Stores (Opening Year) * Mt Horeb,Wi(2010) = + Belleville, WI (Outlet) (2012) = * PortWashington,wi = (2012) 2 * Bloomington, MIN (2013) = Duluth, MN (2014) * Fridley, MN (2014) * An
Slide 20: Announced Store Openings
i * Announced S tore Openings @ Full Line Outlet ‘December 8, 2017 Anchorage, AK (Q1 FY18) West Fargo, ND (Q1 FY18) Portand, OR (Q1 FY18) Lubbock, TX (Q1 FY18) Denton, TX (Q2 FY18) Columbus, OH (Q2 FY18) Arlington, TX (Q2 FY18) Nashville, TN (Q3 FY18) South Portland, ME (Q3 FY18) 20
Slide 21: Women's business growth
= 45% CAGR from CY2012-FY2016 to 21% of Net Sales = Continue to grow through customer acquisition and new product offerings = Multi-category buyers (men’s and women’s business) spend on average 2X more than a single category buyer = Continue to leverage all media channels and increase marketing spen
Slide 22: Broaden assortment in categories with high potential
Broaden assortment in categories that exhibit high potential with our Modern, Self-Reliant American Lifestyle = Extend core products through color, fabric and size = Increase penetration in spring and transitional product (rain, mid-weight jackets, etc.) = Continue to introduce products that expand
Slide 23: Financial Review
Financial Review
Slide 24: Financial results nine months 2017
oe ae omen) se $253.6 @ Retail $145.0 Het = | 9 mos. 2016 9 mos. 2017 9 mos. 2016 9 mos. 2017 (10/30/2016) (10/29/2017) (10/30/2016) (10/29/2017) Margin 58.3% 57.2% (Sin milions) (Sin milions) $165 $14.0 $73 L_ = 9 mos. 2016 9 mos. 2017 9 mos. 2016 9 mos. 2017 (10/30/2016) (10/29/2017) (10/30/2016)
Slide 25: Third quarter 2017 financial results
(Sin milions) Direct _ ee etal 83.7 meet eg si 3 mos. 2016 3 mos. 2017 (10/30/2016) (10/29/2017) Adjusted EBITDA (Sin milions) $2.5 $19 3 mos. 2016 3 mos. 2017 (10/30/2016) (10/29/2017) Margin 3.7% 2.2% LU’ (1). Adustedtoretcttheadd-back of stock compensation expense. (2) Exchides net come atirbutab
Slide 26: Balance Sheet and Liquidity
Sheet and Liq As of (Sin millions) 29-Oct-17 Cash $ 1.0 Debt: Term Loan Ls Line of Credit 50.1 Total Debt 51.6 Total Shareholders' Equity 119.3 Total Capitalization $1709 Deserta (1) Asofoctoer29, 2017 ING TREN ‘December 8, 2017 $1.0 million of cash with $51.6 million of debt outstanding” Line of cr
Slide 27: Investment highlights summary
Large, Addressable Market Opportunity Differentiated, Everyday Lifestyle Brand with Attractive, Loyal Customer Base Distribution Control Demonstrated Track Record of Growth and Profitability © 9 e Omnichannel Presence with Complete e © Proven Strategy for Long-Term Growth ‘December 8, 2017 800-505-8
Slide 28: Appendix
POR DOWN-AND-DIRTY WORK ee Appendix
Slide 29: Adjusted EBITDA reconciliation
3 months ended 9 months ended in millions) October 29, October 29, 2017 2016 2017 2016 Net Income. $ (07) $ 05 $ 40 $ 75 (+) Depreciation & Amorization 18 13 51 32 (+) Interest Expense, net O7 S 12 of (+) Income Tax Expense (0.5) 03 eS 47 EBITDA $13 $ 21 $ 128 $ 15.5 Adjustments (+) Non-Cash Stock B
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