Duluth Holdings Inc. · NASDAQ:DLTH
Duluth — Investor Presentation (June 2016)
32 slides from Duluth's investor presentation, Jun 8, 2016
Slide 1: Investor Presentation 1Q 2016
Derived Investor Presentation 1Q 2016 June 8, 2016
Slide 2: Forward-Looking Statements
Forward-Looking Statements This presentation dated June 8, 2016 includes “forward-looking 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 D
Slide 3: One Tough Fire Hose: Son of a... Work Pants
ONE TOUGH le FIRE HOSE: SON OF A... } WORK PANTS
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 June 8,2016
Slide 5: Company history and milestones
Invents The Establishes frst Bucket Boss headquarters—a underthe refurbished dredge companyname barge Duluth, iN “Portable ‘on Lake Superior Products" Creates the frst trades panel witha group of construction workers, dockhands, cycle riders, hippies and hard-as- nals yahoos DeantH Mails frst Launch
Slide 6: Only available at Duluth Trading - complete distribution control of our brand
Only available at Duluth Trading - complete distribution control of our brand Retail © Owned Distribution Center © 3 PL Distribution Centers June 8, 2016 Call Center Retail Stores
Slide 7: Continuous year-over-year growth every quarter, without exception
Continuous year-over-year growth every quarter, without exception = Continuous net sales Bolung UM Net ones growth and profitability: (Sin millions) $450 +29% Net Sales CAGR $300 from CY2009-FY2015 +47% Operating $150 Income CAGR i | | | from CY2009-FY2015 BIT Q1 2010 Q1 2011 Q1 2012 Q1 2013 Q1 2014
Slide 8: Investment Highlights
\ WITH THE ARMAGH Investment Highlights
Slide 9: Differentiated, Everyday Lifestyle Brand
. N : ‘ y, Differentiated, Everyday Lifestyle Brand Tough enoughfor work yet comfortable enough for everyday casual wear Customer Profes: = Create personal connections with our customers who lead the Modern, Self-Reliant American Lifestyle 100% = Workwear heritage is the foundation of our authentic
Slide 10: Nationwide customer base
ie Nationw 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 ca Nae LN #3 = New York June 8, 2016
Slide 11: Direct Segment
Direct Segment fone e-Commerce (80%)\") Duane Catalog (20%) (1) Basedon point oftransaction (2) AsofJune 7, 2016. includes two outlet stores. June 8,2016 y Presentour brand in a consistent manner v |mplementcontrolled pricing strategy y Own the relationship with our customers v Capture the full marg
Slide 12: Product innovation solving customer problems
[ “Thereare a whole lotta legs, torsos, feet and crotches out there counting onus” | Buck Naked™ Underwear Crouch Gusset® Pants DuluthFlex® Fire Hose® Pants f yg IS . Soggy and restrictive Restrictive pants in sensitive Pants that constrict movement underwear areas K | Rouc ‘ Additional fabric lets
Slide 13: Distinctive Marketing
istinctive Ma | 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 Angry Beaver, Buck Naked™ Guy and Grab-Happ
Slide 14: Outstanding and Engaging Customer Experience
Outstanding san Engaging Customer Experience 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 = Content-rich, user-friendly website designed to provide an enjoyable,
Slide 15: Growth Strategy
/ DRY ON THE FLY’ PANTS & SHORT Growth Strategy
Slide 16: Growth Strategies
Growth Strategies June 8, 2016 3 Grow Women's Business 4 Broaden Assortmentin SelectMen’'s Product Categories
Slide 17: Brand awareness and satisfaction versus peers
74% 66% 60% 59% 58% L L | i i DBESEH | cerpart® Gombe LLBean TERRY Cobalt -axns ene Cate ABoue TY aS 94% 92% LLBean Licata GB VANPSENDO = Purchased = Aware but Never Purchased Chol carnartt ‘Source: Ri Clothing / Apparel Survey and Duluth Internal Panel, July 2016. (1) As demonstrated by a score 016
Slide 18: Store Potential in Identified Markets
~100 9 6 : i 2013 2014 2018" Store Potential in Identified Markets Existing stores profitable in both metropolitan and rural locations across muttiple markets Identified markets with ~100 locations that have attractive customer and population density metrics High concentration of existing Duluth Tra
Slide 19: Flexible Store Development Strategy
Flexible Store Development Strategy Ha. ann BD | a
Slide 20: Expanding Retail Footprint
Expanding Retail Footprint Retail stores designedto bring our brand to life with engaging and entertaining elements = Mt. Horeb, WI (2010) = Belleville, WI (Outlet) (2012) = Port Washington, WI (2012) = Bloomington, MN (2013) = Duluth, MN (2014) = Fridley, MN (2014) = Ankeny, [A(2015) = Oshkosh, WI
Slide 21: Upcoming store openings
La Crosse, WI (mid-June) Omaha, NE (July) 2in Chicago Metro (Fall) King of Prussia, PA(4Q FY16) Independence, MO (FY17) a
Slide 22: Women's business: 50% CAGR to 20% of net sales
50% CAGR from CY2012-FY2015 to 20% of Net Sales Women have lower awareness of our brand relative to men but report high levels of satisfaction once they have tried our products Continue to grow through customer acquisition Continue to leverage all media channels and increase marketing spend as a per
Slide 23: Broaden assortment in high potential categories
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 24: Financial Review
Financial Review
Slide 25: Financials: Net sales, Adjusted EBITDA, Gross Profit, Pro Forma Net Income
(Sh miles) im Direct 236.67 Rel gsc . $231.9 $266.3 2013 2015 Adjusted EBITDA (Sh miles) $17.6 2013 Margin 10.8% ULUT YY (sissies onstrates mets omenoyee sock avarsanstockcmoensain ners (2) Adjusted fore 40% taxrate for comparabiy purposes. Excudesnetincome trbutable to noncontoing terest TRADING Fi
Slide 26: First quarter 2016 financial results
(Sin milions) SS Direct = $68.6 mm Retail $56.8 3 mos. 2015 3 mos. 2016 (5/3/2015) (6/1/2016) Adjusted EBITDA” (Sin milions) wore 36.6 zi i 3mos. 2015 3 mos. 2016 (63/2015) (61/2016) Margin 8.2% 9.6% LUT YY (siesta assesses ym tomenoyeesookavarganstctcmomeatin pers (2) 118 adhusted fora 40% tox rete
Slide 27: Total Shareholders' Equity and Capitalization
Total Shareholders’ Equity Total Capitalization Strong free cash flow generation with ability to fund organic growth High conversion of EBITDAto cash flow Fiscal 2016 expected capital expenditures of $24 million to $25 million a
Slide 28: Fiscal 2016 outlook growth targets
Net Sales Growth: 20% Adjusted EBITDA Growth: 25% Net Income Growth: 25%
Slide 29: Large, Addressable Market Opportunity
Large, Addressable Market Opportunity Differentiated, Everyday Lifestyle Brand with Attractive, Loyal Customer Base Omnichannel Presence with Complete Distribution Control Demonstrated Track Record of Growth and Profitability Proven Strategy for Long-Term Growth Seasoned Management Team Driving an I
Slide 30: Appendix
FOR DOWN-AND-DIRTY WORK AN OVERALL IMPROVEMENT
Slide 31: Adjusted EBITDA reconciliation
(Sin millions) 2015 2016 2013 2014-2015 —S > —aF Net Income $ 161 $ 241 $ 277 $ 28 $ 33 (+) Depreciation & Amorization 12. «#18 28 06 09 (+) Interest Expense, net 02 03 03 - 00 (+) Income Tax Expense 430 - 24 EBITDA $175 $ 03 $ 3222 $ 34 $ 63 ‘Adjustments (+) Non-Cash Stock Based Compensation Expens
Slide 32: Pro forma net income reconciliation
(Sin millions) 2013 2014-2015 2018 _ Qt Income Attributable fo Controlling Interest Before Provision for Income Taxes $ 155 §$ 236 $ 288 $ 27 (Provision for Income Taxes” 62.95 15 11 Pro Forma Net Income. $93 8 142 8 173 8 16 DULSTH Note: 2013-2015 financials presented are Fiscal Vear ended the Sund