G-iii Apparel Group, Ltd. · NASDAQ:GIII
G-iii Apparel — Debt Investor Presentation (July 2020)
32 slides from G-iii Apparel's debt investor presentation, Jul 28, 2020
Slide 1: Investor Presentation July 2020
Investor Presentation July 2020
Slide 2: Important Information
IMPORTANT INFORMATION This presentation and any additional information provided in connection herewith (this “Presentation”) have been prepared by, or at the direction of, G-III Apparel Group, Ltd. (together with its direct and indirect subsidiaries, “G-III” or the “Company”) for purposes of conside
Slide 3: Important Information (Continued)
IMPORTANT INFORMATION (CONTINUED) Forward Looking Statements The following information contains, or may be deemed to contain, “forward-looking statements” (as defined in the U.S. Private Securities Litigation Reform Act of 1995). Most forward-looking statements contain words that identify them as fo
Slide 4: Table of Contents
TABLE OF CONTENTS 1. Company Overview 2. Business Update 3. Credit Highlights 4. Financial Overview 5. Appendix 3
Slide 5: Company Overview
COMPANY OVERVIEW
Slide 6: G-III: A 60+ Year History
G-III: A 60+ YEAR HISTORY 1956 Founded by Aron Goldfarb in New York City as a leather outerwear company 1974 Morris Goldfarb joined G-III as Chief Executive Officer and spearheaded the expansion of the Company’s international sourcing capabilities 1989 Became publicly traded on NASDAQ 2012 Acquired
Slide 7: G-III Overview
G-III OVERVIEW — Substantial portfolio of more than 30 licensed and proprietary brands – Anchored by our five global power brands: — Extensive and diverse range of apparel products and accessories – Outerwear – Dresses – Sportswear — Products sold via a broad and diverse cross-section of retailers a
Slide 8: Substantial Brand Portfolio
Fashion Licenses License Term End Date Renewal End Date 2023 None 2021 2025 2022 2025 2023 2025 2021 None 2023 None 2021 None 2020 2025 SUBSTANTIAL BRAND PORTFOLIO Owned Licensed Team Sports Licenses License Term End Date Renewal End Date 2020 None 2023 None 2020 None 2023 None 2022 None 2023 2028 —
Slide 9: Extensive Product Offering
EXTENSIVE PRODUCT OFFERING Sportswear Performance Suit Separates Dresses Outerwear Footwear Swimwear Handbags & Luggage Other — Best-in-class product development and design across a broad portfolio — Collaboration between in-house design teams and external services as well as flexible production cap
Slide 10: Partner of Choice for World's Largest Retailers & E-tailers
PARTNER OF CHOICE FOR WORLD’S LARGEST RETAILERS & E-TAILERS Department / Mid-Tier Diversity across customers, distribution channels and price points Off-Price / Club Specialty Licensor-Owned Luxury — Long-standing, entrenched relationships with major retailers – Collaborating with retail partners an
Slide 11: Business Update
BUSINESS UPDATE
Slide 12: Taking Decisive Actions During COVID-19
TAKING DECISIVE ACTIONS DURING COVID-19 — Announced significant, voluntary reductions in pay for senior management, effective March 30, 2020 – CEO and President each agreed to temporarily receive no salary – Other senior personnel agreed to a temporary reduction of 10-40% of base salary — Temporaril
Slide 13: Update on Business Operations
UPDATE ON BUSINESS OPERATIONS — In mid-March 2020, both G-III and its retail partners closed stores under government-mandated shutdown orders due to the COVID-19 pandemic – As of July 16, 2020, the majority of G-III retail stores and G-III’s retail partners’ stores have reopened, albeit with certain
Slide 14: Retail Segment Restructuring
RETAIL SEGMENT RESTRUCTURING — The decision follows a comprehensive review of the Company’s retail operations segment in which increasing profitability and enhancing shareholder value were of primary focus – For FY2020, ended January 31, 2020, retail segment net sales accounted for approximately 12%
Slide 15: Credit Highlights
CREDIT HIGHLIGHTS
Slide 16: Credit Highlights Summary
CREDIT HIGHLIGHTS SUMMARY Broad, diversified, and stable portfolio of globally recognized brands Long-standing, strong, and symbiotic relationships forged with retailers via superior design, sourcing and quality control Well-developed supply chain infrastructure is a key core competency that leverag
Slide 17: A Portfolio of Diversified, Stable & Globally Recognized Brands
A PORTFOLIO OF DIVERSIFIED, STABLE & GLOBALLY RECOGNIZED BRANDS Established Anchor Brands with Strong Brand Equity and Long-Standing Consumer Appeal Diversified Portfolio of Complementary Brands Brand FY2020 Net Sales ~$1.1bn ~$500mm ~$500mm ~$110mm 5 Power BRANDS account for ~70% or ~$2.2 billion o
Slide 18: G-III Is a Partner of Choice
G-III IS A PARTNER OF CHOICE… G-III’s core strengths provide a foundation that drives a virtuous cycle G-III’s Core Strengths Superior Quality Control Superior Design Superior Sourcing — In-house individual design and merchandising teams design substantially all licensed, proprietary and private lab
Slide 19: Longstanding, Symbiotic Relationships (Licensors)
~$29 Outerwear (2005) Suits (2005) Dresses (2006) Performance (2007) Sportswear (2008) Handbags, Cold Weather Acc. & Luggage (2010) Swimwear (2013) Women’s Jeanswear (2019) Outerwear, Luggage & Women’s Apparel ~$1,100 ~$1,600 FY05 FY20 …LONGSTANDING, SYMBIOTIC RELATIONSHIPS (LICENSORS) Through excep
Slide 20: Well-Invested, Resilient Supply Chain and Strong Vendor Relationships
WELL-INVESTED, RESILIENT SUPPLY CHAIN AND STRONG VENDOR RELATIONSHIPS Developed strong vender relationships over the past 40 years; those long-standing, trust- based relationships form the foundation that G-III’s global supply chain was built upon Competitive Manufacturing Advantage with Focus on Di
Slide 21: Diversification Across the Portfolio
DIVERSIFICATION ACROSS THE PORTFOLIO Products Outerwear 95% Other 5% Outerwear 26% Sportswear and Other 46% Retail 12% Dresses 16% FY05 Net Sales: $214mm FY20 Net Sales: $3,160mm Price Points Customers and Channels Luxury Department / Mid-Tier Specialty Off-Price / Club Licensor- Owned Affordable Be
Slide 22: Strong Business and Financial Profile
STRONG BUSINESS AND FINANCIAL PROFILE THAT IS PROACTIVELY MANAGED WITH A LONG-TERM MINDSET The closure of the Wilsons Leather and G.H. Bass retail stores is expected to greatly reduce our retail losses (approximately $49mm (1)) and to ultimately have the retail segment become profitable Note: See Ad
Slide 23: Conservative and Prudent Financial Policies
CONSERVATIVE AND PRUDENT FINANCIAL POLICIES Historical Net Debt / Adjusted EBITDA —G-III has maintained a conservative financial policy and has taken a prudent approach to liquidity management – The Company has consistently maintained conservative leverage levels –G-III’s Management Team and Board o
Slide 24: Highly Experienced and Cohesive Management Team
HIGHLY EXPERIENCED AND COHESIVE MANAGEMENT TEAM The G-III senior management team is comprised of seasoned professionals with an average executive tenure of 15 years Name / Title Years at G-III Background Morris Goldfarb Chairman of the Board and Chief Executive Officer 46 • Currently serves as Chair
Slide 25: Financial Overview
FINANCIAL OVERVIEW
Slide 26: Historical Financials
HISTORICAL FINANCIALS Net Sales Adj. EBITDA Capital Expenditures Free Cash Flow (Adj. EBITDA less Capex) $2,386 $2,807 $3,076 $3,160 $0 $1,000 $2,000 $3,000 $4,000 FY2017 FY2018 FY2019 FY2020 ($ in millions) $165 $221 $291 $302 $0 $100 $200 $300 $400 FY2017 FY2018 FY2019 FY2020 ($ in millions) $25 $
Slide 27: Recent Performance (As Reported)
RECENT PERFORMANCE (AS REPORTED) ($ in millions, except per share amounts) Q1 FY 2021 vs. Q1 FY 2020 Total net sales declined primarily due to the closure of retail partners’ and Company-operated stores as a result of disruptions related to COVID-19 In addition to fixed costs and overhead being
Slide 28: Appendix
APPENDIX
Slide 29: Adjusted EBITDA Reconciliation (LTM)
ADJUSTED EBITDA RECONCILIATION (LTM) ($ in millions) LTM Ended April 30, 2020 Net Income / (Loss) $92.5 (+) Asset Impairments and Loss / (Gain) on Lease Terminations 23.4 (+) Depreciation and Amortization 39.2 (+) Interest and Financing Charges, Net 44.5 (+) Income Tax Expense 19.3 (+) Share-based C
Slide 30: Adjusted EBITDA Reconciliation (Annual)
ADJUSTED EBITDA RECONCILIATION (ANNUAL) ($ in millions) Fiscal Year Ended January 31, 2020 2019 2018 2017 Net Income / (Loss) $143.8 $138.1 $62.1 $51.9 (+) Transitional Expenses and Professional Fees Associated with the DKI Acquisition – – 2.1 11.7 (+) Asset Impairments and Loss / (Gain) on Lease Te
Slide 31: Adjusted EBITDA Reconciliation (Q1)
ADJUSTED EBITDA RECONCILIATION (Q1) ($ in millions) Fiscal Quarter Ended April 30, 2020 April 30, 2019 Net Income / (Loss) ($39.3) $12.0 (+) Asset Impairments and Loss / (Gain) on Lease Terminations 3.2 (0.8) (+) Depreciation and Amortization 9.9 9.5 (+) Interest and Financing Charges, Net 10.4 10.3
Slide 32: Leverage Reconciliation (Annual)
LEVERAGE RECONCILIATION (ANNUAL) ($ in millions) Fiscal Year Ended January 31, 2020 2019 2018 2017 Term Loan $300.0 $300.0 $300.0 $300.0 Revolving Credit Facility – – 12.0 91.1 Note Issued to LVMH 125.0 125.0 125.0 125.0 Unsecured Loan 2.9 – – – Total Debt $427.9 $425.0 $437.0 $516.1 Cash 197.4 70.1
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