Xcel Brands, Inc · NASDAQ:XELB
Xcel Brands — Investor Presentation (January 2017)
30 slides from Xcel Brands's investor presentation, January 2017
Slide 1: Investor Presentation January 2017
(NASDAQ:XELB) Investor Presentation January 2017 I LOVE XCEL BRANDS
Slide 2: Safe Harbor Statement
Safe Harbor Statement 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 include, wi
Slide 3: Agenda
Agenda 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 FUTURE GR
Slide 4: The Retail Industry is Being Disrupted
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 4
Slide 5: Disruptive Forces Effecting our Industry
Disruptive Forces Effecting our Industry The way customers shop is rapidly changing, primarily caused by the following five disruptive forces: 5
Slide 6: Xcel Brands - Innovation for the Retail Industry
Xcel Brands - Innovation for the Retail Industry Xcel Brands Inc. (NASDAQ:XELB) is a media and brand management platform company that owns, licenses, designs, manages production of products, generates media content and markets a portfolio of dynamic consumer brands that engage our customers and foll
Slide 7: Mission, Vision & Core Values
Mission, Vision & Core Values THE VISION To re-imagine shopping, entertainment and social as one THE MISSION CORE VALUES To design and Be open and honest produce the best Listen to our followers products for our Collaborate fairly to win followers and Grow through the two- partners second advantage
Slide 8: Strategy
Strategy 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 eng
Slide 9: Highly Differentiated Business Model
Highly Differentiated Business Model TRADITIONAL TRADITIONAL WHOLESALE WHOLESALE LICENSED OWNED BRANDS BRANDS FAST-FASHION Inventory Position - Inventory Turnover - Supply Chain Management Responsiveness / Lead Time Long Lead Long Lead Fast Fast Design Distribution Channe
Slide 10: Ubiquitous-Channel Distribution
Ubiquitous-Channel Distribution Interactive Television Wholesale Specialty QVC, Inc. (USA) Hudson Bay Company 1800 Flowers QVC International (UK, Germany, Lord & Taylor Hewlett Packard Italy, France, Japan, China) Dillard’s Best Buy The Shopping Channel (Canada) Better Dept Store
Slide 11: Our Brands
Our Brands Wholesale Interactive Television (Brick & Mortar + E-Commerce) Specialty 11
Slide 12: IMNYC / Isaac Mizrahi
IMNYC ISAAC MIZRAHI \I7 ao —» ISAAC MIZRAHILIVE ISAAC MIZRAHI NEW YORK” 12
Slide 13: Judith Ripka
JUDITH RIPKA JUDITH RIPKAin
Slide 14: Halston
He HALSTON
Slide 15: C. Wonder
CX WONDER 4 » WONDER
Slide 16: Highline Collective
IGHLINE * COLLECTIVE
Slide 17: IMNYC Isaac Mizrahi
IMNYC ISAAC MIZRAHI 17
Slide 18: Halston
I HALSTON By) 18
Slide 19: Highline Collective
HIGHLINE COLLECTIVE 19
Slide 20: Specialty
Specialty 1800 FLOWERS JOHNSON & JOHNSON HEWLETT PACKARD BEST BUY KLEENEX 20
Slide 21: Best In Class Retail Partners
Best In Class Retail Partners 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: 21
Slide 22: Retail Sales and EBITDA Scorecard
Retail Sales and EBITDA Scorecard $450.0MM $1.350B $380.0MM $27.7MM $212.0MM $21.7MM $142.0MM $114.0MM $12.7MM $13.4MM $7.0MM $9.3MM $4.5MM $3.9MM 2011 2012 2013 2014 2015 (pro-forma) EST. SALES AT RETAIL $114MM $142MM $212MM $380MM $450MM Xcel Brands Revenue - $12.7MM $13.4MM $20.7MM $27.7MM
Slide 23: Strong Balance Sheet
Strong Balance Sheet As of September 30, 2016, Xcel had $15.2MM of cash against $29.8MM of Term Debt, which resulted in Net Debt(3) of $14.5MM. Earn-Outs (2) $6.6 MM Seller Notes (3) $4.1MM Cash $15.2MM Senior Debt $25.7MM 25.6 1.5X Net Debt $14.6MM 10.4 Senior Debt Leverage Ratio Total Debt (1) Cas
Slide 24: Organic Growth Opportunities
Organic Growth Opportunities Built-In Growth Category Growth Geographic Growth • H by Halston – Full Year of • Additional categories to launch • Launched brands on QVC in UK, performance in 2016 in 2017 including Denim, Italy, Germany, France, and • C. Wonder – Launched Spring expansion of Home whic
Slide 25: Sizing the Opportunities
Sizing the Opportunities Direct-Response Television Growth Drivers: Organic Growth of Existing Brands $900MM - continued growth of C. Wonder and Halston - geographic expansion within QVC and to other networks New developed brands/JV’s Acquisitions $350MM Current Retail Sales (1) 3-Year Opportu
Slide 26: Sizing the Opportunities
Sizing the Opportunities QTR Platform - Department Stores / Traditional Retailers Growth Drivers: $600MM Full-year of existing brands at HBC in 2017 Continued growth of existing brands - Core businesses (results = market share) - Ancillary categories - Expansion to Kaufoff, other international r
Slide 27: Acquisition Strategy and Brand Development
Acquisition Strategy and Brand Development Xcel is seeking to acquire brands that are: Strategic Synergistic Accretive Additionally, our unique platform and relationship with key retailers enable us to develop brands for our retail partners. DECEMBER 2014 DECEMBER 2015 SEPTEMBER 2011 APRIL 201
Slide 28: Summary
Summary 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 dy
Slide 29: Differentiate By Design
AGEL Differentiate By Design
Slide 30: Exhibit I
Exhibit I Reconciliation of Net Income (loss) to Adjusted EBITDA Exhibit I Reconciliation of Net Income (Loss) to Adjusted EBITDA (amounts in thousands) Nine Months Ended September 30, Year Ended Twelve Months 2016 2015 12/31/2015 Ended 09/30/2016 Net (loss) income $ (17) $ 1,806 $ 2,574 $ 751 Depre