Xcel Brands, Inc · NASDAQ:XELB
Xcel Brands — Investor Presentation (September 2016)
30 slides from Xcel Brands's investor presentation, Sep 29, 2016
Slide 1: Investor Presentation September 29, 2016
Investor Presentation September 29, 2016 I LOVE XCEL BRANDS (NASDAQ:XELB)
Slide 2: Safe Harbor Statement
Safe Harbor Statement 2 Certain statements in this presentation, as well as certain oral statements made by management during the presentation, constitute “forward - looking statements” within the meaning of the United States Private Securities Litigation Reform Act of 1995 . These statements includ
Slide 3: Agenda
Agenda 3 » INDUSTRY UPDATE » COMPANY OVERVIEW Working Capital Light, Owned Dynamic Brands, Virtual Vertical, Highly Scalable, Strong Growth » OUR BRANDS Dynamic Brands, Ubiquitous - Channel Distribution » HISTORICAL PERFORMANCE Consistent Growth of Revenues and Earnings, Strong Balance Sheet » FUTUR
Slide 4: The Retail Industry is Being Disrupted
FLIPBOARD UPDATE » Disruptive forces are impacting all sectors » The Way People Shop Will Continue to Change » Companies Must Move Toward Where Things Are Going » Sales and Follower Satisfaction Are Achieved Through responsive delivery of great Products The Retail Industry is Being Disrupted 4
Slide 5: Disruptive Forces Effecting our Industry
Disruptive Forces Effecting our Industry 5 The way customers shop is rapidly changing, primarily caused by the following five disruptive forces:
Slide 6: Xcel Brands - Innovation for the Retail Industry
Xcel Brands - Innovation for the Retail Industry 6 Xce l Brands Inc . (NASDAQ : XELB) is a media and brand management platform company that owns , li c en s e s, de sign s, manages production of products, generates media content an d m arket s a portfolio of dynami c consume r brands that engage our
Slide 7: Mission, Vision & Core Values
Mission, Vision & Core Values 7 THE MISSION To design and produce the best products for our followers and partners THE VISION To re - imagine shopping, entertainment and social as one CORE VALUES Be open and honest Listen to our followers Collaborate fairly to win Grow through the two - second advan
Slide 8: Strategy
Strategy 8 Xcel’s strategy is to monetize the convergence of shopping , entertainment and social We accomplish this through four key tactics : » We own and license dynamic brands featuring designers and creative directors who have significant media presence » We develop captivating media content and
Slide 9: Highly Differentiated Business Model
Highly Differentiated Business Model 9 TRADITIONAL WHOLESALE LICENSED BRANDS TRADITIONAL WHOLESALE OWNED BRANDS FAST - FASHION Inventory Position - Inventory Turnover - Supply Chain Management Responsiveness / Lead Time Long Lead Long Lead Fast Fast Design Distribution Ch
Slide 10: Ubiquitous-Channel Distribution
Ubiquitous - Channel Distribution 10 Interactive Television Wholesale Specialty » QVC, Inc. (USA) » QVC International (UK, Germany, Italy, France, Japan, China) » The Shopping Channel (Canada) » CJo Shopping (Korea) » Hudson Bay Company » Lord & Taylor » Dillard’s » Better Dept Stores » Michael’s »
Slide 11: Our Brands
Our Brands 11 Interactive Television Wholesale (Brick & Mortar + E - Commerce) Specialty
Slide 12: Xcel brands: IMNYC, Isaac Mizrahi
XCEL IMNYC \I2 ISAACMIZRAHILIVE ISAAC MIZRAHI NEW YORK
Slide 13: Judith Ripka
JUDITH RIPKA JUDITH RIPKA wun
Slide 14: 14
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Slide 15: C. Wonder
Cee JNDER K WONDER
Slide 16: ~ uu = = x= wo: =
~ uu = = x= wo: =
Slide 17: Xcel IMNYC Isaac Mizrahi
XCEL IMNYC ISAAC MIZRAHI
Slide 18: Xcel H Halston
XCEL H HALSTON
Slide 19: Highline Collective
COLLECTIVE
Slide 20: Specialty
20 Specialty JOHNSON & JOHNSON MICHAELS HEWLETT PACKARD KLEENEX BEST BUY 1800 FLOWERS
Slide 21: Best In Class Retail Partners
Best In Class Retail Partners 21 Our brands are distributed through a Ubiquitous - Channel Sales strategy through best - in - class retail partners across Direct - Response Television, Bricks - and - Mortar, and Digital channels including :
Slide 22: Retail Sales and EBITDA Scorecard
$114.0MM $142.0MM $212.0MM $380.0MM Retail Sales and EBITDA Scorecard 22 (1) Adjusted EBITDA is a non - GAAP unaudited term. See Exhibit I for the definition of Adjusted EBITDA and a reconciliation to net in come (loss). $ 1.350B 2011 (pro - forma) 2012 2013 2014 2015 ▪ EST. SALES AT RETAIL $114MM $
Slide 23: Strong Balance Sheet
Strong Balance Sheet 23 As of June 30 , 2016 , Xcel had $ 13 . 5 MM of cash against $ 27 . 0 MM of Senior Debt, which resulted in Net Debt ( 3 ) of $ 13 . 5 MM . (1) Total Debt is based on Senior Term Debt with Bank Hapoalim, Seller Note and Contingent Obligations. It does not include the unamortize
Slide 24: Organic Growth Opportunities
• Expansion of 1800 Flowers partnership • New deals signed in 2016 for Bed Bath & Beyond and Revlon; Home and other opportunities remain. • Opportunities with specialty retailers in Canada, Mexico, and globally • IMNYC, H Halston, C. Wonder and Highline Collective - 3 brands launched in 450 shop - i
Slide 25: Sizing the Opportunities: Direct-Response Television
$350MM $900MM Current Retail Sales (1) 3-Year Opportunity(2) Sizing the Opportunities 25 Direct - Response Television Growth Drivers : » Organic Growth of Existing Brands - continued growth of C. Wonder and Halston - geographic expansion within QVC and to other networks » New developed brands/JV’s »
Slide 26: Sizing the Opportunities: QTR Platform
$45MM $600MM Current Retail Sales(1) 3-Year Opportunity(2) Sizing the Opportunities 26 QTR Platform - Department Stores / Traditional Retailers Growth Drivers : » Full - year of existing brands at HBC in 2017 » Continued growth of existing brands - Core businesses (results = market share) - Ancillar
Slide 27: Acquisition Strategy and Brand Development
Acquisition Strategy and Brand Development Xcel is seeking to acquire brands that are : x Strategic x Synergistic x Accretive Additionally, our unique platform and relationship with key retailers enable us to develop brands for our retail partners . 27 SEPTEMBER 2011 APRIL 2014 DECEMBER 2014 JUNE 20
Slide 28: Summary
Summary 28 » Xcel Brands is built to develop innovative solutions to address the changes in our industry. » Xcel’s “Virtual Vertical” business model is working capital light but its design, sourcing, and marketing infrastructure provides a highly scalable platform for strong organic growth. » We own
Slide 29: Differentiate By Design
BRANDS Differentiate By Design
Slide 30: Exhibit I Reconciliation of Net Income (loss) to Adjusted EBITDA
Exhibit I Reconciliation of Net Income (loss) to Adjusted EBITDA 30 (amounts in thousands) Year Ended Twelve Months 2016 2015 12/31/2015 Ended 06/30/2016 Net (loss) income (135)$ 1,776$ 2,574$ 663$ Depreciation and amortization 785 580 1,379 1,584 Interest and finance expense 965 944 1,804 1,825 Inc