Duluth Holdings Inc. · NASDAQ:DLTH

Duluth — Investor Presentation (September 2017)

31 slides from Duluth's investor presentation, Sep 6, 2017

  1. Slide 1: Investor Presentation 2Q 2017

    Investor Presentation 2Q 2017 September 6, 2017

  2. Slide 2: Forward-Looking Statements

    Forward-Looking Statements This presentation dated September 6, 2017 indudes “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. All statements, other than statements of historical facts included in this presentation, including statements concerni

  3. Slide 3: Fire Hose Work Pants

    FIRE HOSE WORK PANTS ONE TOUGH SON GOB Auas ©

  4. Slide 4: The Modern, Self-Reliant American Lifestyle

    The Modern, Self-Reliant American Lifestyle Men and women who are hands-on, value a job well done and are often outdoors for work and hobbies September 6, 2017

  5. Slide 5: Company history and milestones

    invents The. Introduces Opens first store in ‘Opens first outlet Bucket Boss. ‘heroically tough Mount Horeb, WI in Belleville, WI Introduces, ae yaoottre Nocvar” —Open wotbu aay = fotteen : 7m ae ie Etats ~ — Sepaad O va Buck | Fi = acme ae | Armachillo® Introduces, underwear DuuthFlex® L a 2012 3M

  6. Slide 6: Call Center, Distribution Centers and Retail Stores

    Call Center © Owned Distribution Center Retail Stores © 3 PL Distribution Centers September 6, 2017

  7. Slide 7: Investment Highlights

    N A AEDS Feed Ba a) ARMACHILLOT Investment Highlights

  8. Slide 8: Differentiated, Everyday Lifestyle Brand

    Differentiated, Everyday Lifestyle Brand Tough enoughfor work yet comfortable enough for everyday casual wear Customer Profession = Create personal connections with our customers who lead the Modern, Self-Reliant American Lifestyle 100% = Workwear heritage is the foundation of our authentic Building

  9. Slide 9: Nationwide customer base

    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 September 6, 2017

  10. Slide 10: Omnichannel Presence with Distribution Control

    Omnichannel Presence with Distribution yey Direct Segment 67% of 2Q 2017 Net Sales; 7% YoY Growth Key Ben: e-Commerce (87%) _ Catalog (13%) v Presentour brand in a [oLuT] Dy re82 ee y : ~ -ontrol consistent manner Implement controlled pricing strategy y Own the relationship with our customers v Capt

  11. Slide 11: Innovative products solving customer problems

    “Therearea whole lotta legs, torsos, feet and crotches out there counting onus” Buck Naked™ Underwear Crouch Gusset® Pants DuluthFlex® Fire Hose® Pants i y Soggy and restrictive Restrictive pants in sensitive underwear areas: ‘euocmer = CR , : ioe ses 9 | “ Additional fabric lets our Fast-drying, od

  12. Slide 12: Storytelling and advertising differentiate the brand

    aay 3 | a Gives our products anidentity and enhances our brand = Makes shopping for our products fun with attention-grabbing | advertisements that are humorous, irreverent and quirky ‘ssl m = National advertising campaigns feature characters such as our Giant f Angry Beaver, Buck Naked™ Guy and Grab

  13. Slide 13: Outstanding and Engaging Customer Experience

    PS rate Outstanding and 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 * Contentrich, user-friendly website designed to provide an enj

  14. Slide 14: Growth Strategy

    WITH DRY ON THE FLY* PANTS & SHORT UNWET YOUR PANTS Growth Strategy

  15. Slide 15: Growth Strategies

    Growth Strategies September 6, 2017 3 Grow Women's Business 4 Broaden Assortmentin SelectMen’s Product Categories

  16. Slide 16: Build Brand Awareness to Continue Customer Acquisition

    Build Brand Awareness to Continue Customer Acquisition TT carnart? Gslunbin LLBean TERY ChBedhs anos ene eetwtauo TAMMY 36% of respondents were aware of the Duluth Trading brand but have never purchased our product a 98% Es 94% 83% 82% 72% co - a | DESH Ty LLBean icedfouee a LANDS'ENDO Culms: Coffey

  17. Slide 17: Retail Expansion

    aie etal Expansion Significant white space opportunity to grow our U.S. retail presence 342) 16 : 1 oo 201320142015" 2016" 2017) Store Potential in Identified Markets (1) includes two outet stores. DURU TH 8 reenter” Existing stores profitable in both metropolitan and rural locations across muttiple

  18. Slide 18: Flexible Store Development Strategy

    Flexible Store Development Strategy ‘September 6, 2017

  19. Slide 19: Expanding Retail Footprint

    Expanding Retail Footprint Retail stores designedto bring our brand to life with engaging and entertaining elements + MLHoreb, = (2010) + Belleville, Wi . (Outlet) (2012) + PortWashington, * wi (2012) * Bloomington, MN = (2013) * Duluth, MN (2014) = * Fridley, MN (2014) * Ankeny, 1A (2018) + Oshkosh

  20. Slide 20: Announced Store Openings

    * Announced Store Openings @ Full Line Outlet September 6, 2017 Thornton, CO (3Q FY17) Avon, OH (3Q FY17) Louisville, KY (4Q FY17) Woodbury, MN (4Q FY17) Grandville, MI (4Q FY17) Waukesha, WI (4Q FY17) Wixom, MI (4Q FY17) Anchorage, AK (Q1 FY18) West Fargo, ND (Q1 FY18) Portand, OR (Q1 FY18) Denton,

  21. Slide 21: Grow Women's Business

    = 45% CAGR from CY2012-FY2016 to 21% 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

  22. Slide 22: Broaden Assortment in Select Men's Categories

    ents in Sele iG ries 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

  23. Slide 23: Financial Review

    Financial Review

  24. Slide 24: Annual net sales, Adjusted EBITDA, gross profit, net income

    (Sin milions) tm rect cate ASR $376.1 meta o Ss $231.9 $163.1 ont sisaq 5208.0, S260. 22.7 2013 2014 2015 2016 Adjusted EBITDA” (Sin milions) 32.8% $34.0 [ 2014 2015 2016 Margin 10.8% 11.5% 11.2% 10.9% Gross Profit (Sin mlions) caoR= Bi $214.1 $173.5 $131.0 $92.0 | 2013 2014 2015 2016 Margin 56.4% 5

  25. Slide 25: Six months ended July 30, 2017 results

    (Sin mlions) seh mi Direct mm Retail $134.5 6 mos. 2016 6 mos. 2017 (773112016) (7130/2017) Adjusted EBITDA” (Sin milions) LH 7 6 mos. 2016 6 mos. 2017 (7/31/2016) (7130/2017) Margin 10.4% 7.1% LU’ (1) Adjusted to reflect the add-back of stock compensation expense. DY. aH (2) Chesil cone abate pocor

  26. Slide 26: Three months ended July 30, 2017 results

    ba! ees f the End d July 30, : y i petals | Gross Profit (Sin milions) (Sin mlions) "I Direct ant $48.9 mm Reta so $65.8 $86.2 3mos. 2016 3mos. 2017 3mos. 2016 3mos. 2017 (7231/2016) (7/30/2017) (7/31/2016) (7/30/2017) Margin 59.1% 56.7% Adjusted EBITDA Net Income?) (Sin millions) (Sin millions) $9.

  27. Slide 27: Capitalization as of July 30, 2017

    As of ($ in millions) 30-Jul-17 $s 14 Term Loan is Line of Credit 11.9 Other Debt 0.1 Total Debt 13.5 Total Shareholders' Equity 120.0 Total Capitalization $133.5 il (1) Asafa, 2017 $1.4 million of cash with $13.5 million of debt outstanding” = $40 million line of credit; increasedto $50 million on

  28. Slide 28: 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 e Proven Strategy for Long-Term Growth September 6, 2017 Cas =S ‘800-50

  29. Slide 29: Appendix

    POR DOWN-AND-DIRTY WORK ee Appendix

  30. Slide 30: Adjusted EBITDA reconciliation

    3 months ended 6 months ended (Sin millions) 2013-2014 20152016 duly 30, duly 30, 2017 «2016-2017 2016 Net Income. $16.1 $ 241 $ 277 $25 $ 44 $ 37 $ 48 $ 7.0 (+) Depreciation & Amorization 12 18 28 47 17 14 33 (20 (+) Interest Expense, net 02 03 03 02 04 0005 (+) Income Tax Expense 13135 272372943 E

  31. Slide 31: Pro forma net income reconciliation

    ($ in millions) 2013 2014 2015 Income Attributable to Controlling Interest Before Provision for Income Taxes $ 155 $ 236 $ 288 (.) Provision for Income Taxes “) 62 95 11.5 Pro Forma Net Income $ 93 $ 142 $ 173 “The pro forma net income information gives effectto the conversion of the Company to a “c

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