Duluth Holdings Inc. · NASDAQ:DLTH
Duluth — Investor Presentation (June 2017)
30 slides from Duluth's investor presentation, Jun 6, 2017
Slide 1: Investor Presentation 1Q 2017
Diesel Investor Presentation 1Q 2017 June 6, 2017
Slide 2: Forward-Looking Statements
: ee Forward-Looking Statements This presentation dated June 6, 2017 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 concerni
Slide 3: One Tough Fire Hose Work Pants
ONE TOUGH le FIRE HOSE: SON OF A... } WORK PANTS
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 June 6,2017
Slide 5: Company history and milestones
Invents The Bucket Boss underthe ‘company name “Portable Products” Mails frst catalog Establishes frst headquarters—a refurbished dredge bargein Duluth, UN on Lake ‘Superior GEMPLER' agricutural/ horticutural ‘supply catalog underthe ‘ownership of ‘Steve Schlecht, purchases Duluth Trading Introduces
Slide 6: Only available at Duluth Trading - complete distribution control of our brand
Only available at Duluth Trading - complete distribution control of our brand © Owned Distribution Center © 3 PL Distribution Centers June 6,2017 Retail Website Call Center Retail Stores
Slide 7: Growth and profitability: continuous year-over-year growth
Growth and Continuous year-over-year growth every quarter, without exception = Continuous net sales Bol growth and profitability: ig TTM Net Sales (Gin millions) $450 +28% Net Sales CAGR $300 from CY2009-FY2016 +42% Operating $150 Income CAGR | | | from CY2009-FY2016 MMIII Q12010 © Q12011 © Q12012,
Slide 8: Investment Highlights
\ WITH THE ARMAGH Investment Highlights
Slide 9: Differentiated, Everyday Lifestyle Brand
. N : ‘ y, Differentiated, Everyday Lifestyle Brand Tough enoughfor work yet comfortable enough for everyday casual wear Customer Profes: = Create personal connections with our customers who lead the Modern, Self-Reliant American Lifestyle 100% = Workwear heritage is the foundation of our authentic
Slide 10: Nationwide customer base
ie Nationw U.S. Population 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 ca Nae LN #3 = New York June 6,2017
Slide 11: Omnichannel presence with distribution control
4 aby ied wat i ona ke oral aa Presence with Distribu Direct Segment fone e-Commerce (84%) Catalog (16%) yv Presentour brand in a consistent manner De ore op v |mplementcontrolled pricing strategy y Own the relationship with our customers v Capture the full margin of our products v Reduce logistics
Slide 12: Innovative products solving customer problems
[ “Thereare a whole lotta legs, torsos, feet and crotches out there counting onus” | Buck Naked™ Underwear Crouch Gusset® Pants DuluthFlex® Fire Hose® Pants f yg IS . Soggy and restrictive Restrictive pants in sensitive Pants that constrict movement underwear areas K | Rouc ‘ Additional fabric lets
Slide 13: Distinctive marketing
istinctive Ma | Gives our products anidentity and enhances our brand = Makes shopping for our products fun with attention-grabbing advertisements that are humorous, irreverent and quirky = National advertising campaigns feature characters such as our Giant Angry Beaver, Buck Naked™ Guy and Grab-Happ
Slide 14: Outstanding and Engaging Customer Experience
Outstanding san 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 = Content-rich, user-friendly website designed to provide an enjoyable,
Slide 15: Growth Strategy
/ DRY ON THE FLY’ PANTS & SHORT Growth Strategy
Slide 16: Growth Strategies
Growth Strategies June 6,2017 3 Grow Women's Business 4 Broaden Assortmentin SelectMen’'s Product Categories
Slide 17: Build Brand Awareness to Continue Customer Acquisition
Build Brand Awareness to Continue ‘Customer Acquisition — ; ‘ 85% | | NDBERTH | comport? combs LLBean TEUEY Cfofap warns enn €ece thaw TY 95% 63% LLBean ication By VANPSENDO HEIN GyBolyy, carnarrt =Purchased = Aware but Never Purchased ‘Source: Ri Clothing / Apparel Survey and Duluth Internal Panel,
Slide 18: Store potential in identified markets
29) 16 : 2013-2014 2015") 2016-2017) Store Potential in Identified Markets (1) includes two outiet stores. (2) Projected number of sores for 2017. @) Includes three outlet stores. Existing stores profitable in both metropolitan and rural locations across muttiple markets Identified markets with ~100
Slide 19: Flexible Store Development Strategy
Flexible Store Development Strategy
Slide 20: Expanding Retail Footprint
Expanding Retail Footprint Retail stores designedto bring our brand to life with engaging and entertaining elements + Mt Horeb, wi (2010) = Belleville, WI (Outlet) (2012) + PortWashington, * wi (2012) = Bloomington, MN, (2013) = Duluth, mv (2014) + Fridley, MN (2014) + Ankeny, 1A (2015) * Oshkosh, W
Slide 21: Announced Store Openings
Announced Store Openings Pittsburgh, PA (2Q FY17) Red Wing, MN (outlet) (2Q FY17) St. Charles, MO (3Q FY17) Thornton, CO (3Q FY17) Avon, OH (3Q FY17) Louisville, KY (4Q FY17) Wixom, MI (4Q FY17) Grandville, Ml (4Q FY17)
Slide 22: Women's business growth
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 as a per
Slide 23: Broaden assortment in high-potential categories
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 products that expand
Slide 24: Financial Review
Financial Review
Slide 25: Annual financial results
(Sin milions) mm Direct ml Retail of $304.2 2015 Adjusted EBITDA” (Sin milions) $41.2 $26.7 S176 a 2013 2014 2015 2016 Margin 10.8% 11.5% 11.2% 10.9% Gross Profit (Sin milions) cnar= 20% $214.1 $173.5 $131.0 $92.0 a 2013 2014 2015 2016 Margin 56.4% 56.5% 57.0% 56.9% (Sin milions) ae 31. 20137 20142
Slide 26: First quarter 2017 results
Ps eee f Three | ont (Sin milions) 21.9% Direct, s037 m Rel egg 5 si9.90 1 Es 2 3mos. 2016 3 mos. 2017 (6/1/2016) (4/30/2017) Adjusted EBITDA (Sin milions) $2.7 P| 3 mos. 2016 3mos. 2017 (5/1/2016) (4/30/2017) Margin 9.6% 3.2% LU’ (1). Adustedtoretecttne add-backof stock compensation expense p& cH (
Slide 27: Investment Highlights
lights ea 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 Proven Strategy for Long-Term Growth DeantH . June 6,2017
Slide 28: Appendix
FOR DOWN-AND-DIRTY WORK AN OVERALL IMPROVEMENT
Slide 29: Adjusted EBITDA reconciliation
‘Smonths ended (Sinmilions) 2013-2014 015208 May1, April 30, 2046 2017 Net income $ i$ MIS 77S USS 335 04 (#) Depreciation & Amorfization 12 «18 (28 47 09 16 (+) interest Expense, net 02 03 03 02 00 02 (+) Income Tax Expense 13 135 24 02 EBITDA $75 $ M3 $ 226 wos 63 24 Adustments (+) Non-Cash Stock
Slide 30: Pro forma net income reconciliation
($ in millions) 2013 2014 2015 Income Attributable to Controlling Interest Before Provision for Income Tax (.) Provision for Income Taxes “? Pro Forma Net In _$ 165 § 236 $ 28 62 95 142 $ 17. ‘The pro forma net income information gives effectto the conversion of the Company to a “C corporation on No