Destination Xl Group, Inc. · NASDAQ:DXLG
Destination Xl — Investor Presentation (December 2015)
30 slides from Destination Xl's investor presentation, Dec 8, 2015
Slide 1: December 2015 Investor Presentation
December 2015 Investor Presentation Exhibit 99.1
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, including, but not limited to, future store projections of sales, sales per square foot, gross margin, occupancy and selling, general administrative expenses, EBITDA from
Slide 3: Destination XL's Unique Customer
DESTINATION XL’s UNIQUE CUSTOMER Not determined by demographic Males of all ages with a waist size 38” and greater Values convenience, comfort, selection and fit over price Desires a good, better, best array of product assortments in all primary lifestyles 3
Slide 4: Transforming Our Brand
TRANSFORMING OUR BRAND Began transformation to DXL brand in 2010 to provide customers with a one-stop shopping destination for all his wardrobe needs Capture greater wallet share Attract broader customer audience Opportunity for Growth Target end-of-rack1 customers Leverage website to drive sales 1W
Slide 5: One-Stop Shopping at Its Best
ONE-STOP SHOPPING AT ITS BEST More brands Bright Atmosphere Wide aisles Highly Trained Staff Onsite tailoring Large changing rooms 5
Slide 6: Largest Selection of Big and Tall Brands
LARGEST SELECTION OF BIG AND TALL BRANDS 10 Private label brands 58 Apparel brands 54 Shoe brands 22 Exclusive brands
Slide 7: Why the Transformation Is Working
WHY THE TRANSFORMATION IS WORKING Dominant position as the largest big-and-tall specialty retailer Experience in our markets drives new-store success Destination XL store concept drives high forward comps, long-term sales growth Declining execution risk Increasing operating leverage
Slide 8: DXL Owns the Big & Tall Space
Only 4 stores owned by next-largest competitor DXL Owns the big & tall space 354 Total stores Note: Online traffic share as of October 2015 based on third-party market research #1 In online and brick-and-mortar big & tall sales We have been the only successful market entrant No competitor even comes
Slide 9: Market Experience Driving Highly Successful Store Rollout
Years of Casual Male and DXL store experience differentiates DXL from other retail rollouts MARKET EXPERIENCE DRIVING HIGHLY SUCCESSFUL STORE ROLLOUT First-hand knowledge of existing markets is crucial as we open new DXL stores in those markets Casual Male legacy experience provides years of proprie
Slide 10: Long-term Sales Growth, High Forward Comps
long-term sales growth, high forward comps Destination XL stores mature over a five-year period 1based on the average actual performance of DXL stores in years 1-3, with pro forma estimate in years 4-5 10
Slide 11: Consistent 4-Wall Retail Store Model
DXL Year 1 DXL Year 2 DXL Year 3 DXL Year 4 DXL Year 5 Sales per square foot $150 $170 $190 $205 $220 Gross margin, net of occupancy costs 42.0% 44.0% 45.0% 46.0% 47.0% SG&A as a % of sales 26.0% 22.0% 21.0% 21.0% 20.0% Four-wall cash flow 16.0% 22.0% 24.0% 25.0% 27.0% CONSISTENT 4-WALL RETAIL STORE
Slide 12: Impressive Return on Investment
DXL Retail Stores Average Sq. Ft. Year One Sales PSF Year One 4-Wall Cash Flow PSF ROI 2010 – 2012 (48 stores) 9,590 $151 $22 30.0% 2013 (51 stores) 8,441 $145 $25 38.0% 2014 (39 stores) 7,320 $151 $25 43.0% 2015 (29 stores) 6,890 $160 $23 40.0% DXL Outlet Stores 2014 - 2015 (9 stores)3 5,035 $165 $
Slide 13: Success of Small-Format Stores Drove Market Opportunity Study
SUCCESS OF SMALL-FORMAT STORES DROVE MARKET OPPORTUNITY STUDY Introduced 5,000-6,500 square foot store concept in Q2 2014 to penetrate smaller markets and increase saturation of larger markets Lowers cap ex and occupancy costs by 20-30% as compared to a 7,000 sq. ft. store Example: Economics of a ty
Slide 14: Significant Increase in Market Opportunities
SIGNIFICANT INCREASE IN MARKET OPPORTUNITIES Detailed analysis examined population densities and demographics across the U.S. Compared against DXL customer database Compared against established retail trade zones Expands market opportunities into: Conversion of CMXL markets Saturation of DXL markets
Slide 15: Example: Cincinnati Market
Florence, KY - CM EXAMPLE: CINCINNATI MARKET Springdale, OH - DXL
Slide 16: Cincinnati Customer Spotting Study
Represents DXLG customers shopping at Florence (CM) Represents DXLG customers shopping at the Springdale DXL Cincinnati Customer Spotting Study Florence, KY Springdale, OH East Opportunity
Slide 17: Example: Cincinnati Market – Trade Zones
Florence, KY Casual Male (New DXL Opportunity) EXAMPLE: CINCINNATI MARKET – TRADE ZONES Potential Whitespace Location Springdale, OH DXL Macy’s * Darker blue areas represent higher population densities 16
Slide 18: Economics, Retail vs. Outlets 4-Wall Store Model
ECONOMICS, RETAIL VS. OUTLETS 4-WALL STORE MODEL Year 51 DXL Retail – Large DXL Retail – Small DXL Outlet Average square feet 8,300 5,700 4,500 Sales per square foot $220 $220 $245 4-wall % of sales 27% 27% 22% 4-wall per square foot $59 $59 $54 Build-out Costs $75 $80 $50 ROI2 37% 32% 37% 1Average
Slide 19: DXL Stores Increasing Share of Total Store Portfolio
DXL STORES INCREASING SHARE OF TOTAL STORE PORTFOLIO 2013 2014 Year # DXL Stores DXL SF # Casual Male and Rochester Stores Casual Male and Rochester Stores SF DXL SF Differential 2014 140 1,191,000 213 784,000 407,000 2015E 175 1,414,000 169 619,000 795,000 2016E 205 1,601,000 142 519,000 1,082,000
Slide 20: Domestic Success Drives Expansion of International Franchise
Domestic Success drives expansion of international franchise 2013 2014 No existing large-scale international Big & Tall retailer today International customer currently is underserved Recently hired experienced new SVP of International Development Will leverage successful Kuwait franchise experience
Slide 21: Increasing Operating Leverage
INCREASING OPERATING LEVERAGE 2015E based on low end of the Company’s guidance; 2016E based on internal estimates EBITDA from continuing operations is a non-GAAP measure. See Appendix A for a reconciliation from its comparable GAAP measure 19
Slide 22: Strong Free Cash Flow Trend
STRONG FREE CASH FLOW* TREND 2014 2015E 2013 2012 Neg. Free Cash Flow Pos. Free Cash Flow EBITDA from Continuing Operations CAPEX / Interest *Free Cash Flow is a non-GAAP measure and is calculated by taking cash flow from operations less capital expenditures.
Slide 23: Financial Performance
FINANCIAL PERFORMANCE (all periods restated for discontinued operations)
Slide 24: 2015 Sales Highlights – Q3 YTD
2015 SALES HIGHLIGHTS – Q3 YTD Total sales (Retail and Direct) On top of +4.8% in Q3 YTD 2014 Total comparable sales On top of +5.5% in Q3 YTD 2014 DXL comparable store sales On top of +12.3% in Q3 YTD 2014 +8.1% +10.0% +5.6%
Slide 25: Sales and Gross Margins
SALES AND GROSS MARGINS Strong gross margins provide opportunity for significant sales leverage 2015E based on low end of the Company’s guidance; 2016E based on internal estimates
Slide 26: SG&A Expense Declining as % of Sales
SG&A EXPENSE DECLINING AS % of SALES 2015E based on low end of the Company’s guidance; 2016E based on internal estimates
Slide 27: EBITDA & EBITDA Margin from Continuing Operations
EBITDA & EBITDA MARGIN FROM CONTINUING OPERATIONS ($MM) 1EBITDA from continuing operations and EBITDA margin from continuing operations are non-GAAP measures. For additional information about these non-GAAP measures, including a reconciliation to their respective GAAP measures, see Appendix A attach
Slide 28: Balance Sheet
BALANCE SHEET 2012 2013 2014 Q3 ‘14 Q3 ‘15 Cash on hand $8.2 $4.5 $4.6 $6.1 $5.6 Inventory $104.2 $105.6 $115.2 $126.4 $133.3 Credit Facility, net of deferred debt issuance costs * -- $8.6 $18.8 $37.3 $55.9 Long-term debt, net of deferred debt issuance costs ** -- $16.5 $33.5 $35.5 $28.0 ($MM) * Unu
Slide 29: Non-GAAP Reconciliation
NON-GAAP RECONCILIATION In addition to Operating Income (Loss) determined in accordance with United States Generally Accepted Accounting Principles (GAAP), the Company uses non−GAAP financial measures, such as “EBITDA from continuing operations,” in assessing its operating performance. The Company b
Slide 30: Investor Contact
INVESTOR CONTACT Jeffrey Unger V. P. Investor Relations Destination XL Group, Inc. jeffunger@usa.net 561-482-9715 (o) Ÿ 561-543-9806 (c) www.DestinationXL.com
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