Duluth Holdings Inc. · NASDAQ:DLTH
Duluth — Q1 2020 Earnings Presentation
21 slides from Duluth's earnings presentation, Jun 5, 2020
Slide 1: Investor Presentation First Quarter 2020
Investor Presentation First Quarter 2020 June 5, 2020
Slide 2: Forward-Looking Statements
Forward-Looking Statements This presentation dated June 5, 2020 includes “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 concerning D
Slide 3: Introduction to Duluth Trading Co.
Introduction to Duluth Trading Co.
Slide 4: Long History of Product Innovation
= Long History of Product Innovation = Humorous and Distinctive Marketing = Outstanding and Engaging Customer = Nationwide Omnichannel Presence = Workwear Heritage is the Foundation of our Authentic, Everyday Lifestyle Brand and Solution-Based Design Experience with Controlled Distribution Duane Jun
Slide 5: Growing lifestyle brand with well-established direct business
Growing lifestyle brand with well-established direct business Multiple revenue growth opportunities > Build brand awareness to expand customer base > Expand retail presence with attractive unit economics >» Grow women’s business >» Broaden men’s assortment Strategic investments support long-term EBI
Slide 6: Strong track record of 18% Net Sales and Adjusted EBITDA growth
= Strong track record of 18% Net Sales and Adjusted EBITDA growth = Strategic investments support long-term objectives (Sin millions) (Sin milions) 2014 2015 2016 2017 2018 2019 2014 2015 2016 2017 2018 2019 OREN June 5,2020
Slide 7: Growth Strategy
Growth Strategy
Slide 8: Growth Strategies
Growth Strategies jaa 5.2020 3 Grow Women’s Business 4 Broaden Assortmentin Select Men's Product Categories
Slide 9: Build Brand Awareness
% ea Bhan ‘i Build Brand Awareness = Digital Advertising > Paid-for search and banner ads » Social media (organic and sponsored) >» Targeted emails ii: |e ‘ai itt WATCH @ TV ADS = TV Advertising > Strategically placed national ads >» Memorable, humorous ads = Catalog >» Captivating storytelling >» P
Slide 10: Identified markets with ~100 potential store locations
= Identified markets with ~100 potential store locations > Utilize direct segment data to determine markets with existing customer base » Focus on regions with demographic that aligns with target customer » Geographic diversity indicates significant white space opportunity A. @ Full Line © Outlet "
Slide 11: Stores Triple the Size of Markets and Revive Direct Growth Over Time
> ‘ 1 Stores Triple the Size of Markets and Revive Direct Growth Over Time Direct sales growth accelerates in store markets 18 to 24 months Total Sales in a store market grow up to 3X with the presence of retail after opening, as evidenced by the higher growth rates in older store markets Average In
Slide 12: Retail Stores Attract New, More Valuable Customers
Retail Stores Attract New, More Valuable Customers Retail customers more likely to shop across channels, categories, and spend more Multi-Channel Buyers Multi-Category Buyers Sales Per Customer Retail Buyer Direct Segment Retail Buyer Direct Segment Retail Buyer Direct Segment Buyer Buyer Buyer 2 D
Slide 13: Grow Women's Business
Grow Women’s Business Net sales increased 17% in 2019 Continued customer acquisition through marketing investments and retail presence Expand product offering to address more of her lifestyle Plus sizes grew to 10% of women’s sales in Q1 2020 163 Net Sales (Sin millions) 141 110 81 61 2014 2015 2016
Slide 14: Net sales increased 8% in 2019
Net sales increased 8% in 2019 Extend core products through color, fabric and size Increase penetration in spring and transitional product (rain, mid- weight jackets, etc.) Continue to introduce products that expand occasions for wear Expansion of closet share in sub- brands » Duluth-Built Business
Slide 15: Financial Review
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Slide 16: First Quarter 2020 Gross Profit, Adjusted EBITDA and Net Income
Gross Profit (Sin mlions) 5 ms Retail (Sin mtions) ™ Direct $60.9 te $523 3 mos. 2019 3 mos. 2020 Smos 2019 Simos 2020 (5/5/2019) (5/3/2020) (6/5/2019) (6/3/2020) Margin 53.3% 47.6% Adjusted EBITDA‘ Net Income? (Sin mlions) (Sin mtions) (84.4) (876) ($11.6) ($15.2) 3 mos. 2019 3 mos. 2020 3 mos. 201
Slide 17: Year Ended February 2, 2020
Year Ended February 2, 2020 Gross Profit \9/ 615.6 Direct $568.1 8.4% $328 $310 $351 $350, 2018 2019 2018 2019 (2/3/2019) (2/2/2020) (2/3/2019) (21212020) Margin 54.6% 53.3% Aalusted EBITDA: | Netincomes | $23.2 $18.9 2018 2019 2018 2019 (2/3/2019) (2/2/2020) (2/3/2019) (2/2/2020) Margin 9.1% 84% Ma
Slide 18: Strong Balance Sheet and Liquidity
fF Stro 1g Balance Sheet and Liquidity" As of ($ in millions) 2020 Cash $ 8.9 = $8.9 million of cash with $84.8 million of debt outstanding’ Debt: ; * $150.5 million credit facility ($80 million Line of Credit 35.0 line of creditand $70.5 million of term Term Loan 49.8 loan capacity?) Total Debt 84.
Slide 19: Appendix
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Slide 20: Adjusted EBITDA Reconciliation
3 Months Ended May 3, May 5, ( in millions) 2020 2019 Net loss (15.2) (76) @) Depreciation and amortization 67 44 (+) Interest expense 14 08 (+) Amortization of build-to-suit leases captital contribution 02 0.2 (/+) Income tax benefit (expense) 5.1 Dt EBITDA (12.0) (43) () Stock based compensation 0
Slide 21: Announced Store Openings
Announced ‘Store Openings Location Friendswood, TX Katy, TX Wichita, KS Spokane Valley, WA Jacksonville, FL Rogers, AR Danbury, CT Madison. AL. Kennesaw, GA Round Rock, TX Hoover, AL Sandy, UT Bloomington, MN Franklin, TN Knoxville, TN Henrico, VA Springfield, OR Orland Park, IL Florence, KY Cherry