Xcel Brands, Inc · NASDAQ:XELB
Xcel Brands — Q2 2022 Earnings Presentation
32 slides from Xcel Brands's earnings presentation, Aug 17, 2022
Slide 1: Investor Presentation Second Quarter 2022
INVESTOR PRESENTATION Second Quarter 2022 NASDAQ: XELB Xcel Brands (8/17/22)
Slide 2: Safe Harbor Statement / Forward Looking Statements
SAFE HARBOR STATEMENT FORWARD LOOKING STATEMENTS 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
Slide 3: Table of Contents
3 OVERVIEW HIGHLIGHTS PLATFORM GROWTH STRATEGY FINANCIAL OVERVIEW SUMMARY Page 4 Page 6 Page 11 Page 16 Page 26 Page 29 Xcel Brands (8/17/22) TABLE OF CONTENTS
Slide 4: Overview
OVERVIEW 4
Slide 5: Xcel is a consumer products and live streaming media company
XCEL IS A CONSUMER PRODUCTS AND LIVE STREAMING MEDIA COMPANY GENERATING OVER $500 MILLION ANNUAL RETAIL SALES IN 2021 “We imagine shopping, entertainment and social media as one thing” – ROBERT D’LOREN, CEO Xcel Brands (8/17/22)
Slide 6: Market leading position in Live Stream and social commerce shopping
Market leading position in Live Stream and social commerce shopping with nearly $4BB in cumulative retail sales in Live Streaming and 10,000 hours of show programming Industry - leading technology platform designed to drive audience, engagement and sales of products through Live Stream shopping and
Slide 7: Our Evolution
2011 - 2016 BUILDING THE FOUNDATION 7 OUR EVOLUTION Acquired Isaac Mizrahi, Judith Ripka, Halston and C. Wonder Significant growth across our brands in Direct - Response Television and licensing Over $1BB of Live Stream Shopping sales at retail 2017 - 2022 EXPANDING INFRASTRUCTURE Acquired Longaberg
Slide 8: Our Brands
OUR BRANDS Note: All brands are fully owned by Xcel Brands Inc. other than (i) Isaac Mizrahi which represents a minority interest retain ed ownership and (ii) Longaberger which represents a 50% ownership position in the business by Xcel. 8 Xcel Brands (8/17/22)
Slide 9: Estimated Retail Sales of Our Brands
EST. RETAIL SALES OF OUR BRANDS 9 (1) 2022 Goal includes the Isaac Mizrahi Brand Xcel Brands (8/17/22) STRONG CONSUMER DEMAND 8.3% CAGR COVID - 19 (1 )
Slide 10: Significant revenue growth from investments in technology, wholesale and DTC
SIGNIFICANT REVENUE GROWTH FROM INVESTMENTS IN TECHNOLOGY, WHOLESALE AND DTC BUSINESSES 10 58% 42% 2021 Royalties Net Sales 99.5% 0.5% 2016 Royalties Net Sales Xcel Brands (8/17/22) Diversification of revenue by distribution channel, category and seasonality
Slide 11: The Platform
THE PLATFORM 11
Slide 12: Xcel has built an operating platform designed to drive sales through social commerce
XCEL HAS BUILT AN OPERATING PLATFORM DESIGNED TO DRIVE SALES THROUGH SOCIAL COMMERCE 12 BRAND DEVELOPMENT AND MAKETING DESIGN AND CREATIVE LIVE STREAM TECHNOLOGY, MEDIA AND INFLUENCER MARKETING WHOLESALE AND SUPPLY CHAIN AND RELATED TECHNOLOGIES LICENSING IN NON - CORE CATEGORIES DTC WITH DUTY - FRE
Slide 13: Industry-leading technology and Live Stream media platform
INDUSTRY - LEADING TECHNOLOGY AND LIVE STREAM MEDIA PLATFORM Product sales driven by a targeted digital and traditional media strategy and the use of brand ambassadors and influencers, with conversions driven through Live Stream events. Harness the power of the many to many social commerce 13 Xcel B
Slide 14: A model for the future of retailing
A MODEL FOR THE FUTURE OF RETAILING Xcel has developed a fast - to - market, technology driven “vertical” design and sourcing platform for its wholesale and DTC business, designed to create clear advantages over competition, including the ability to: Disintermediate the traditional wholesaler by con
Slide 15: A model for the future of retailing
Significant investments in design and supply chain technologies including advanced ERP, PLM, 3D Design, Trend Analytics, and other supply chain investments to react quickly to customer demand and maximize operating margins Highly responsive design, development, and supply chain designed to maximize
Slide 16: Growth Strategy
GROWTH STRATEGY 16
Slide 17: Key growth strategies: 2023-2025
Grow Existing Brands New Live Stream Driven Businesses Accelerate Wholesale Transformation Pursue Accretive Acquisitions KEY GROWTH STRATEGIES: 2023 - 2025 17
Slide 18: Strong potential in existing brands: Halston, Judith Ripka, Lori Goldstein
STRONG POTENTIAL IN EXISTING BRANDS HALSTON Growth Opportunities: - Significant expansion in DTC and Live Stream - New Creative Director to drive development of new collections and build community around brand and drive Live Stream sales - New product in development for all channels of distribution
Slide 19: Strong potential in existing brands: C. Wonder, Longaberger
STRONG POTENTIAL IN EXISTING BRANDS C. WONDER Growth Opportunities: - Significant expansion in DTC and Live Stream - New Creative Director to drive development of new collections and build community around brand category - Expansion into significant ITV business - International distribution agreemen
Slide 20: Case Study – Isaac Mizrahi
CASE STUDY – ISAAC MIZRAHI Xcel sold 70% position in the Isaac Mizrahi band in May 2022 to WHP Global - Significant increase in value since Xcel acquired the brand in 2011 - Return on Equity of approximately 99% per annum under Xcel’s ownership - Retained interest allows Xcel to participate in conti
Slide 21: Live Stream shopping represents a significant growth opportunity for Xcel
LIVE STREAM SHOPPING REPRESENTS A SIGNFICANT GROWTH OPPORTUNITY FOR XCEL Live Stream Shopping combines the best features of Direct - Response Television and social commerce to drive high customer acquisition, engagement, and conversion Live Stream represents the convergence between shopping, enterta
Slide 22: The U.S. Live Stream market is poised for significant growth
In Billions USD 0 50 100 150 200 250 300 350 400 2017 2018 2019 2020 2021-2023 Asian Live - Streaming Commerce Market Asian Live-Streaming Commerce Market (1) www.statista.com , coresight research $0 $5 $10 $15 $20 $25 $30 2017 2018 2019 2020 2021-2023 U.S Live - Streaming Commerce Market U.S Live-S
Slide 23: Xcel is well positioned to grow as Live Stream shopping accelerates
XCEL IS WELL POSITIONED TO GROW AS LIVE STREAM SHOPPING AND SOCIAL COMMERCE ACCELERATE With nearly $4BB of Live Stream sales and 10,000 hours of show programming, Xcel is well positioned to grow its existing brands, partner with third parties, and acquire brands that the company can accelerate throu
Slide 24: Wholesale and DTC transformation
WHOLESALE AND DTC TRANSFORMATION Since 2016, Xcel has invested over $5MM in infrastructure to drive its wholesale and direct - to - consumer businesses, all designed around Live Stream and social shopping We plan to accelerate the growth of these divisions in 2023 as we scale our existing brands and
Slide 25: Acquisitions
Since 2011 we have sought the acquisition of brands and businesses that we believe we can drive through Live Stream and social shopping, with an average of one acquisition every two years We continue to seek acquisitions of brands and businesses that we believe we can integrate into our existing pla
Slide 26: Financial Overview
FINANCIAL OVERVIEW 26
Slide 27: Revenue and Adj. EBITDA Growth
REVENUE AND ADJ. EBITDA GROWTH 27 Xcel Brands (8/17/22) COVID - 19 COVID - 19 COVID - 19
Slide 28: Balance Sheet Highlights
BALANCE SHEET HIGHLIGHTS Xcel Brands (8/17/22) 2019 2020 2021 2022 1H CASH $4,641 $4,957 $4,483 $10,873 NET WORKING CAPITAL (exclusive of cash) $4,840 $2,975 $3,386 $5,983 WORKING CAPITAL $9,481 $7,932 $7,869 $16,856 DEBT $19,721 $16,638 $28,031 $0
Slide 29: Summary
SUMMARY 29
Slide 30: Summary: Market leading position in Live Stream and social commerce
Market leading position in Live Stream and social commerce shopping with nearly $4BB in retail sales in Live Streaming and 10,000 hours of show programming Industry - leading technology platform designed to drive audience, engagement and sales of products through Live Stream shopping and social comm
Slide 31: NASDAQ: XELB Xcel Brands (8/17/22)
NASDAQ: XELB Xcel Brands (8/17/22)
Slide 32: Exhibit A: Adjusted EBITDA definition
Adjusted EBITDA is a non - GAAP unaudited measure, which we define as net income before stock - based compensation, interest and finance expense, loss on extinguishment of debt, gain on the reduction of contingent obligations, income taxes, other state and local franchise taxes, depreciation and amo