Destination Xl Group, Inc. · NASDAQ:DXLG
Destination Xl — ICR Conference 2017
34 slides from Destination Xl's conference presentation, Jan 9, 2017
Slide 1: ICR Conference January 10, 2017
ICR Conference January 10, 2017
Slide 2: Forward-Looking Statements and Non-GAAP Measures
Forward-Looking Statements and Non-GAAP Measures Forward-Looking Statements: Certain information contained in this presentation constitute forward-looking statements under the federal securities laws and include statements regarding the Company’s expectations on strategic opportunities, sales, gross
Slide 3: Agenda
Agenda DXL Today Our Strategy Our Opportunity Key Financial Metrics Key Investment Takeaways
Slide 4: Destination XL Group, Inc.
Destination XL Group, Inc.
Slide 5: DXL Stores key facts
$450M+ annual sales 203 DXL Stores 48 DXL stores with sales per sq ft >$200 2.9 years average age of DXL store New store 5yr - IRR 40% - 50% 15% online sales penetration 76 DXL stores with 4-wall cash flow >25% 28 DXL stores with annual sales >$2.0M
Slide 6: Strategy
Strategy Destination XL Group, Inc.
Slide 7: Strategy: Differentiated Assortment & Experience
Strategy: Differentiated Assortment & Experience CONVENIENCE AND EASE Convenient head-to-toe shopping all under one roof; casual to dress to athletic styles. THE PERFECT FIT We ARE the fit experts with technical designs to precisely fit and complement the body proportions of our guy. Sizes start at
Slide 8: Strategy: Lifestyle Assortment Approach
Strategy: Lifestyle Assortment Approach Effectively displaying the full range of brands and categories Floor sections targeted to specific lifestyles Comfortable tailoring and fitting areas Ambiance appeals to target customers as well as female companion shoppers
Slide 9: Strategy: World Class Brand Portfolio
Strategy: World Class Brand Portfolio Good Better Best Luxury Brand Class Over 100 brands, 1,000s of styles!
Slide 10: Strategy: Destination Model vs. Mall Model
Strategy: Destination Model vs. Mall Model Destination model acquires customers over time resulting in strong year-over-year comps as the store matures as opposed to Mall model Located in high traffic locations with convenient access
Slide 11: Video tour of DXL stores
This slide represents a one-minute video that provides a tour of the DXL stores as well as a representation of merchandise sold by the Company.
Slide 12: Opportunity
Opportunity Destination XL Group, Inc.
Slide 13: Opportunity: Awareness out of Big and Tall
Opportunity: Awareness 6 out of 10 Big and Tall Guys don’t know who we are!
Slide 14: Opportunity: End-of-Rack Customer
Opportunity: End-of-Rack Customer (waist size 38”- 46”) End-of-Rack Improves Quality of Sale Spends 120% more than 48”+ customers Visits 52% more often than 48”+ customers In Q3 2016, End-of-Rack was 44.5% of bottoms business compared to 42.9% in prior year quarter.
Slide 15: Opportunity: eCommerce
Opportunity: eCommerce Mobile Experience Personalization Digital Prospecting Digital Offers/Free Shipping
Slide 16: Selected Primary Expansion Opportunities: International
Selected Primary Expansion Opportunities Opportunity: International 2 DXL stores opening in Toronto in Spring 2017 International franchising / licensing model
Slide 17: Key Financial Metrics
Key Financial Metrics Destination XL Group, Inc.
Slide 18: Consistent 4-Wall Cash Flow Model with High IRR
Key Financial Metrics: Consistent 4-Wall Cash Flow Model with High IRR DXL Average Store Model (1) ($ in 000s; except psf data) Year 1 Year 2 Year 3 Year 4 Year 5 Sales $1,080 $1,220 $1,350 $1,460 $1,570 Sales per Square Foot $155 $175 $195 $210 $225 Gross Margin (net of occupancy) $440 $540 $620 $7
Slide 19: Key Financial Metrics: Impressive ROI
Key Financial Metrics: Impressive ROI (1) Reflects 51 DXL stores opened in fiscal 2013, 39 DXL stores opened in fiscal 2014, 29 DXL stores opened in fiscal 2015 and 25 DXL stores in fiscal 2016 (2) Capital expenditures, net of tenant allowances. Performance of DXL stores, by year of opening(1):
Slide 20: Significantly Improving Leverage
Key Financial Metrics: Significantly Improving Leverage 2013 2014 2015 2016E Total Debt (1) $25.7 $52.3 $69.1 $63.0 EBITDA (2) $7.8 $14.1 $23.3 $30.0 Debt/EBITDA 3.3 3.7 3.0 2.1 Gross, before unamortized debt issuance costs. EBITDA is a non-GAAP measure. See Appendix B for a reconciliation of this n
Slide 21: Strong Free Cash Flow Trend
Key Financial Metrics: Strong Free Cash Flow Trend *Free Cash Flow is a non-GAAP measure. See Appendix B for a reconciliation to its comparable GAAP measure.
Slide 22: Key Investment Takeaways
Key Investment Takeaways Destination XL Group, Inc.
Slide 23: Key Investment Takeaways: Quality, Service, Selection
Key Investment Takeaways: Quality, Service, Selection World Class Brand portfolio Customer Awareness End-of-Rack Customer eCommerce International
Slide 24: ICR Conference January 10, 2017
ICR Conference January 10, 2017
Slide 25: Q3 Financial Results Appendix A
Q3 Financial Results Appendix A
Slide 26: Q3 Financial Highlights: DXL Transformation driving Free Cash Flow and EBITDA Growth
Q3 Financial Highlights: DXL Transformation driving Free Cash Flow and EBITDA Growth 200th DXL store, in Oxnard, California DXL stores now represent 74% of our store footprint Increase in Q3 EBITDA* over last year Q3 2016 of $3.9M vs. Q3 2015 of $2.5M Increase in Full-Year Free Cash Flow* after DXL
Slide 27: Financial Highlights: Awareness Driving Success of DXL Transformation
2013 Financial Highlights: Awareness Driving Success of DXL Transformation Strategy Third Quarter 2016 - Key Metrics Consecutive quarter of positive comps – Total Company Increased sales, improved cash flow and earnings Conversion rate of Casual Male customers Versus Q3 2015 End-of-rack percentage o
Slide 28: Financial Highlights: Year-to-Date 2016
Financial Highlights: 9 Month 2016 DXL comparable store sales On top of +10.0% in YTD 2015 Total YTD 2016 sales vs. YTD 2015 Net loss Versus net loss of $(7.0)M in YTD 2015 EBITDA +30% Versus $16.0M in YTD 2015 +4.2% +3.0% $20.8M Delivered growth in sales and profitability in challenging consumer en
Slide 29: Financial Highlights: Year-over-Year
Financial Highlights: 9 Month YOY * On a non-GAAP basis, EPS, assuming a normalized tax rate, was $(0.05) per diluted share for the first nine months of fiscal 2016, compared with $(0.08) per diluted share for the prior year’s first nine months. See Appendix B for a reconciliation to its comparable
Slide 30: Financial Highlights: Cash Flow & Balance Sheet
Financial Highlights: Cash Flow & Balance Sheet 9 Months 2015 9 Months 2016 Capital Expenditures: DXL stores $17.3 $16.0 Other maintenance/infrastructure 8.1 5.8 Total $25.4 $21.8 Inventory $133.3 $128.2 Clearance inventory 9.0% 9.0% Total debt* $83.9 $83.3 Borrowings under credit facility* $55.9 $6
Slide 31: Financial Highlights: FY 2016 Guidance
Financial Highlights: FY 2016 Guidance Guidance Sales (1) $451.0~$457.0 Total comparable sales increase (1) 1.0%~2.0% Gross margin 46.0% EBITDA* (1) $30.0~$33.0 Net loss per share, diluted(1) $(0.09)~breakeven Adjusted net loss per diluted share *(1) $(0.05)~breakeven Total debt $60.0~$66.0 Total Ca
Slide 32: Non-GAAP Reconciliation
Non-GAAP Reconciliation The Company uses non−GAAP financial measures, such as “EBITDA,” ”Free Cash Flow,” “Free Cash Flow before DXL Capital Expenditures,” “Adjusted net loss” and “Adjusted net loss per diluted share” in assessing its operating performance. The Company believes that these non−GAAP m
Slide 33: Non-GAAP Reconciliation (cont.)
Non-GAAP Reconciliation (cont.) GAAP TO NON-GAAP FREE CASH FLOW RECONCILIATION 2016 FORECAST GAAP TO NON-GAAP RECONCILIATIONS
Slide 34: Investor Contact
Investor Contact Tom Filandro Managing Director, ICR 646-277-1235 (D) Tom.Filandro@icrinc.com www.DestinationXL.com