Sportsman's Warehouse Holdings, Inc. · NASDAQ:SPWH
Sportsman's Warehouse — Investor Presentation (September 2014)
33 slides from Sportsman's Warehouse's investor presentation, Sep 24, 2014
Slide 1: Investor Presentation September 2014
Slide 2: Forward Looking Statements & Non-GAAP Measures
Forward Looking Statements & Non-GAAP Measures In this presentation, we will make statements about our future plans and prospects, including statements about our financial position, financial targets, business strategy and store opening pipeline, that constitute forward- looking statements. Actual r
Slide 3: Our mission statement
Our mission is to provide outdoor enthusiasts, casual users, and first-time participants with quality brand-name hunting, fishing, camping and shooting merchandise within a convenient shopping environment, serviced by passionate, knowledgeable associates, to create a memorable outdoor experience.
Slide 4: Sportsman's Warehouse Overview
Sportsman’s Warehouse Overview = High-growth outdoor sporting goods retailer = One-stop shopping experience with the right gear at the right time = Tailored merchandise and in-store events to meet local conditions and demand = Passionate associates, highly knowledgeable about local market conditions
Slide 5: Large, Growing and Highly-Fragmented Outdoor Sporting Goods Industry
Large, Growing and Highly-Fragmented Outdoor Sporting Goods Industry = Industry size estimated to be in excess of $50 billion = Sportsman's Warehouse is one of a select number of pure play outdoor specialty retailers = Mom & Pop retailers estimated to represent 65% of industry ™ Participation rates
Slide 6: NSSF Adjusted NICS
NSSF Adjusted NICS 2,200,000 2,000,000 1,800,000 + 1,600,000 4,400,000 1,200,000 1,000,000 800,000 600,000 400,000 Jan-00 Jun-00 Nov-00 Apr ot sep-o1 Feb-02 JuL02 bec o2 May-03 oct-03 Mar.o# Aug. 04 Jan.05 Jun-05 ‘Source: NavenalShootng Sports Foundatcn and SPwHcalclatons Nov.05 BREE See eS a8 Se 2a
Slide 7: Unique Customer Value Proposition
Unique Customer Value Proposition GORMAN BENS Cobol i Gees GANDER © [_Mom & Pop Western Penetration 48 of 54 Stores 15 of 53 stores 6 of 64 stores 2 of 135 stores NA Depth of Merchandise ‘One-stop ‘One-stop ‘One-stop One-stop ee Selection ~70,000 SKUs ~160,000 SKUs (NA) (NA) Convenience / Destinatio
Slide 8: 300+ Store Opportunity with Attractive Store Economics
300+ Store Opportunity with Attractive Store ge PORTSHAN) y sw Economics Pea att Relative White Spacet) Low Initial Investment per Store isinrsiens ie Including initial 1 Excluding initial se oe inventory investment 1 inventory investment 1 $20-24 1 gist! 1 Average New Store Payback Period (years) S
Slide 9: Investment Highlights
Investment Highlights C) Differentiated Outdoor Specialty Retail Experience { z ) Comprehensive, Locally Relevant Product Assortment and Merchandising Strategy () Disciplined and Adaptable Real Estate Strategy () Low Cost, High Return Operating Structure with Attractive and Replicable Store Economic
Slide 10: Differentiated Shopping Experience
ifferentiated Shopping Experience Differentiated and Inviting Shopping SoS NN) Experience with Broad Appeal . Conveniently Located Stores with Store Layout is Easy to Navigate with Easy-In, Easy-Out Access Wide Aisles and Clear Signage 534 mer its, tnventony ‘Archery Electronics, ‘Opties ar
Slide 11: Differentiated Shopping Experience
a Differentiated Shopping E: ce . .. Complemented by Engaging and Highly § ORTSMAN'S) Knowledgeable Sales Associates Pea aise Highly Trained and Passionate Employees. = Extensive, specialized and ongoing training programs = Non-commissioned sales force with incentives based on store-wide performance
Slide 12: Comprehensive Product Assortment
‘Comprehensive Product Assortment Locally Relevant Merchandising Strategy = Deep selection of branded merchandise from well-known manufacturers Consumables generate ~35% of unit sales and 20% of dollar sales Approximately 30% of our products are shielded from internet competition via regulatory rest
Slide 13: Comprehensive Product Assortment
‘Comprehensive Product Assortment Depth and Breadth of Branded Products Gro _ Across Our Six Major Departments Pea aise —= 6 Sas on ois EA =e i cul ‘Columbia FY 2013 Product Breakdown (‘% of sales) WINCHESTER yr) Other 3 Treen FE 316% BrowninG freer 6.6% LEUPOLD pes Clothing bets ee : Smith Wesson F
Slide 14: Real Estate Strategy
Real Estate Strategy Disciplined, Analytics-Driven Real Estate _ Strategy Maximizes Coverage and Returns pe ea Rigerolerette selection Precese Profitably Serve Small and Large MSAs with Attractive Economic: = Analyze market characteristics and economic viability with local real estate firms and inte
Slide 15: Well-Positioned as a First-Mover in Smaller MSAs
Well-Positioned as a “First-Mover” in ‘Smaller GPORTSMANG MSAs, as well as to Fill-In Competitive Markets. “=~ es Oregon |-5 Corridor Store Development "(Our low-cost model allows us to operate multiple stores to surround a competitor's single, higher-cost unit, while| we continue to satisfy our ret
Slide 16: Opportunities within Existing and New Markets
Opportunities within Existing and SoS NN) New Markets Potential to increase store base to more than 300 stores) nationally
Slide 17: Passionate Management Team
Passionate Management Team (3 a Passionate and Experienced Management GORMAN Team with Proven Track Record Pea cate ai Directed successful consumer and E-Commerce retal companies including Eastbay, Cornerstone: ohn Schaefer Chief Executive Officer 5 ‘Brands end Team Express Received @ BBA in Busines
Slide 18: Growth Strategy
Growth Strategy SEEN . a ra () Capitalize on New Store Growth Opportunity Within Existing and New Markets () Increase Same Store Sales Growth through In-Store Initiatives (:) Grow the Sportsman’s Warehouse Brand 4 )ecntnue to Enhance Operating Margins ‘sata scabs canta
Slide 19: Significant White Space Potential
$ Significant White Space Potential Gros aN) Significant White Space Opportunity Relative White Space) Number of Sportsman's Warehouse stores t 00 FY 2010 FY 2011 FY 2012 FY 201SY 2014 FY 2015 Tongtem TR W0TA EES soa Citite Reset ame DS EM ats, New Store Pipeline = Four committed openings in FY 2015
Slide 20: In-Store Initiatives Driving Same Store Sales Growth
In-Store Initiatives Driving Same Store Sales GOREN, _ Growth ee = Increased selling square footage in 31 existing stores ~ Facilitates roll-out of store-within- a-store elothing programs = Launch of loyalty card program (Nov. 2013) = Computerized kiosks to expand in-store assortment = In-store pick
Slide 21: Grow the Sportsman's Warehouse Brand
3. Grow the Sportsman's Warehouse Brand Grow the Sportsman’s Warehouse Brand Effective “Localized” Advertising Grass Roots Campaigns Billboards OLD = ~13 million total visitors to website during FY 2013 = Numerous product videos and how-to videos available for public viewing = Hold ~2,500 events ann
Slide 22: Continue to Enhance our Operating Margins
Continue to Enhance our Operating Margins (eealy = Improve gross margins through: Gross Profit and Margin — Expanding higher margin clothing and eee) ees footwear departments — Expanding private label offerings — Improving buying opportunities with vendors FY 2010 FY 2011 FY 2012 FY 2013 — Coordinat
Slide 23: Private Label Program Presents Compelling Margin Opportunity
Private Label Program Presents Compelling Margin Opportunity = Supplement third-party merchandise assortment with Private Vabel asta Percentage'cr Sates our own proprietary brands 25% — Fill merchandise gaps 23% — Designed and priced to complement our branded assorti — Goal to offer customers a qual
Slide 24: Financial Highlights
Financial Highlights ‘ceo sates wraith a eee
Slide 25: Historical Financial Overview
Historical Financial Overview ge PORTSHAN) ) os Net Sales and Store Count ‘Same Store Sales (Sin milons) $6422 (6 inorease over prior year) WNetSaes Stores 254% 21.0% i 13.1% (3.758) FY, 2010. FY.2011 FY 2012 FY 2018 FY 2010 Fy2011 Fy 2012 Fy 2013 P rossrront Sie (Sin milters) (Sia miions) ING 1035
Slide 26: Quarterly Combined Same Store Sales Growth
Quarterly Combined Same Store Sales Growth GEN NS) oT 47.6% 19.6% 222% 20.9% 20.4% 20.8% rT 5% 16.4% 16.6% ‘a Hee Vent 15.7% oEll aa ae =< L 1%), (24.9%) = 1%) QI eG24 G3 Ct Ot. Q2/ eas |) agian on A asi ad] Oty) 02 2.03 | a4 ate kaa) FY2010 FY 2011 FY 2012 FY.2013 | Fy2014 25 ‘sao sates wrath tate
Slide 27: Capitalization, Capital Expenditures and Free Cash Flow
Capitalization, Capital Expenditures and Free GEN ) _ Cash Flow aaa Q2 2014 t 8/2/2014 xAdj. EBITDA®) (6 in mitions) Cash and Cash Equivalents. $1.7 ABL Working Capital Facility 629 1.0x Term loan ($185m tranche) 123.5 2.0x Term loan ($50m tranche) 33.4 0.5x Total Debt $219.8 3.6x Capital Expenditur
Slide 28: Select Q2 Results
Select Q2 Results Q2 2014 Q2 2013 Net Sales $159.5 million $155.9 million Same Store Sales Increase (Decrease) (6.1%) 2.8% Operating Income $12.3 million $16.1 million Adjusted Net Income $5.1 million $7.7 million GAAP Earnings Per Share $0.12 $0.23 Adjusted Earnings Per Share $0.12 $0.18 a ()—Adjst
Slide 29: Long-Term Financial Targets
Long-Term Financial Targets Unit Growth >10% Comparable Store Sales Growth 2-3% Total Revenue Growth >10% EBITDA Growth 15% Net Income Growth 25% () Tage anes mmm 10% wrt gute eA npn a ainnun RO 50% excng a very oo 20%5 Reagent een irate aut A “Sao sabia orca ta ace
Slide 30: Appendix: GAAP Reconciliations
Appendix: GAAP Reconciliations ‘seo sates wrath eae a eee
Slide 31: Reconciliation of Net Income to Adjusted EBITDA and Free Cash Flow
Reconciliation of Net Income to Adjusted EBITDA and Free Cash Flow Fiscal Year Ended January 29, January28, February2, ‘February 1, rues 2014 2012 2013 2014 Net Income $5,244 $33,694 $28,074 $21,750 Plus: (#) Interest expense 5,676 4,392 6321 25,447 (#) Income tax expense (benefit) - (11,467) 19,076
Slide 32: GAAP and Non-GAAP Measures (Unaudited)
GAAP and Non-GAAP Measures (Unaudited) § OR rae ) For the Thirteen Weeks Ended —_For the Twenty-Six Weeks Ended August 2, 2014 August 3,2013 August 2, 2014 August 3, 2013 Income from operations 12,343 16,050 12,122 26,666 IPO bonus 2.200 [Adjusted income from operation: 42,34: 44,322 26,666] Net inc
Slide 33: GAAP and Non-GAAP Measures (Unaudited)
GAAP and Non-GAAP Measures (Unaudited) . Key Notes and Assumptions (1) Assumes our initial public offering was effective as of February 3, 2013, the first day of our fiscal year 2013. (2) Stock-based compensation expense represents non-cash expenses related to equity instruments granted to employees
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