Duluth Holdings Inc. · NASDAQ:DLTH
Duluth — Investor Presentation (September 2016)
30 slides from Duluth's investor presentation, Sep 21, 2016
Slide 1: Investor Presentation 2Q 2016
Derived Investor Presentation 2Q 2016 September 21, 2016
Slide 2: Forward-Looking Statements
Forward-Looking Statements ss Sie This presentation dated September 21, 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 induded in this presentation, including statements
Slide 3: One Tough Fire Hose Work Pants
ONE TOUGH le FIRE HOSE: SON OF A... } WORK PANTS
Slide 4: Company history and milestones
Launches Invents The Establishes frst Lunes Introduces ‘Opens frststorein ‘Opens frst outlet in ‘Opens Ankeny, Bucket Boss headquarters—a heroically tough Mount Horeb, WI Belevile, WI 1A store underthe refurbished dredge yetsoftFire company name bargein Duluth, Es Hoset workwear “Portable MN’ on Lak
Slide 5: Only available at Duluth Trading - complete distribution control of our brand
Only available at Duluth Trading - complete distribution control of our brand © Owned Distribution Center © 3 PL Distribution Centers September 21,2016 Retail Website Call Center Retail Stores
Slide 6: Continuous year-over-year growth every quarter, without exception
Continuous year-over-year growth every quarter, without exception = Continuous net sales ig TTM Net Sales : ul $0 nnn HHUHHHUII DeantH growth and profitability: +29% Net Sales CAGR from CY2009-FY2015 +47% Operating Income CAGR from CY2009-FY2015
Slide 7: Investment Highlights
\ WITH THE ARMAGH Investment Highlights
Slide 8: 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 9: Nationwide Customer Base
Nationwide C U.S. Population aoe September 21,2016 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
Slide 10: Direct Segment
Direct Segment fone e-Commerce (83%)\") Catalog (17%) Duane (1) Basedon point oftransaction. (2) Asof September 21, 2016. includes two outlet stores. September 21,2016 y Presentour brand in a consistent manner v |mplementcontrolled pricing strategy y Own the relationship with our customers v Capture
Slide 11: Innovative products 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 12: 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 13: 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 14: Growth Strategy
/ DRY ON THE FLY’ PANTS & SHORT Growth Strategy
Slide 15: Growth Strategies
Growth Strategies September 21,2016 3 Grow Women’s Business 4 Broaden Assortmentin SelectMen’s Product Categories
Slide 16: Brand awareness and purchase versus peer brands
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 17: Flexible Store Development Strategy
Flexible Store Development Strategy
Slide 18: Expanding Retail Footprint
Expanding Retail Footprint Retail stores designedto bring our brand to life with engaging and entertaining elements DuancH September 21,2016 Mt. Horeb, WI (2010) Belleville, WI (Outlet) (2012) Port Washington, WI (2012) Bloomington, MN (2013) Duluth, MN (2014) Fridley, MN (2014) Ankeny, 1A (2015) Os
Slide 19: Upcoming store openings
= King of Prussia, PA(3Q FY16) = Manassas, VA(4Q FY 16) = Independence, MO (4Q FY16) = Noblesville, IN (1QFY17) e FullLine a eS | Outlet September 21,2016
Slide 20: Women's business growth
= 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
Slide 21: 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 22: Financial Review
Financial Review
Slide 23: Net sales, adjusted EBITDA, gross profit and 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 24: Six months results 2015 vs 2016
(Sin milions) Sa o% im Direct 2 as mel S108 sas iss oS 6 mos. 2015 6 mos. 2016 (8/2/2015) (7/31/2016) Adjusted EBITDA” Geno) th 1% : 1 6 mos. 2015 6 mos. 2016 (8/2/2015) (7/31/2016) Margin 10.3% 10.4% LU’ (1) Adustedt refiecttneadc-back of tax elated payments fromempayee stockawardsand stock compens
Slide 25: Total Capitalization
Total Shareholders’ Equity Total Capitalization September 21,2016 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 In August 2016 paid off additional $4.0 million of Term
Slide 26: Long-term growth targets
Net Sales Growth: 20% Adjusted EBITDA Growth: 25% Net Income Growth: 25%
Slide 27: 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 28: Appendix
FOR DOWN-AND-DIRTY WORK AN OVERALL IMPROVEMENT
Slide 29: Adjusted EBITDA reconciliation
6 months ended (Sin millions) 2013 2014-2015 July 34, 2015 2016 Net Income $161 $ 241 $ 77 $ 85 $ 7.0 (+) Depreciation & Amorization 12. 18 28 12 20 (+) Interest Expense, net 02 03 03 O14 04 (+) Income Tax Expense 13 - 43 EBITDA $175 $ 203 $ 322 $ 98 $ 134 ‘Adjustments (+) Non-Cash Stock Based Compe
Slide 30: Pro forma net income reconciliation
6 months ($ in millions) 2013 2014 2015 _ended July 31, 2015 Income Attributable to Controlling Interest Before Provision for Income Taxes $155 $ 236 $ 288 $ 84 (.) Provision for Income Taxes © 62.95 115 34 Pro Forma Net Income $93 $ 42 $173 $ 50 ‘The pro forma net income information gives effectto
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