At Home — Debt Investor Presentation (November 2018)
26 slides from At Home's debt investor presentation, Nov 8, 2018
Slide 1: Disclaimer
Disclaimer This presentation contains forward-looking statements. You can generally identify forward-looking statements by our use of forward-looking terminology such as “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “intend,” “may,” “might,” “plan,” “potential,” “predict,” “see
Slide 2: Company Overview and Credit Highlights
Company Overview and Credit Highlights
Slide 3: A Highly Differentiated Retail Growth Story
A Highly Differentiated Retail Growth Story • Specialty retailer with unmatched breadth and depth of assortment • • ~110,000 square feet offering over 50,000 SKUs Over 70% of products are exclusive(1) to At Home • A low price leader offering compelling value in a highly fragmented market • Demonstra
Slide 4: Key Drivers of Differentiation and Value in Our Business Model
Key Drivers of Differentiation and Value in Our Business Model Exceptional Management Team Strong Corporate Culture Store-Level Adj. EBITDA period(4) (1) (2) (3) (4) Unbranded, private label or specifically designed for At Home. Annual Store-level Adjusted EBITDA margin for stores open at least 12 m
Slide 5: Why Our Customers Love Us
Why Our Customers Love Us 1 • Comprehensive selection for every room and every style under one roof Half of core 2 • • ~$65 average basket <$15 average price point (2) 3 • Over 70% of products are exclusive(3) to At Home 4 • • • “Treasure hunt” Allows customer to assess color / size / feel Average c
Slide 6: Low Price Leader
Low Price Leader Same Style, Similar Look, Lower Price 7 Note: Prices as quoted online as of September 1, 2018. Barstools Furniture Wall Decor Accent Furniture Outdoor Décor $39.99 $144.99 $29.99 $69.95 (on sale $55.96) Textiles $ 599.00 $199.99 $399.00 (on sale $309.99) $159.99 $799.00 $399.99 $220
Slide 7: Strength of Model Reflected in our Performance
Strength of Model Reflected in our Performance $278 $1,051 $178 $85 FY13 FY14 FY15 FY16 FY17 FY18 LTM 24 FY13 FY14 FY15 FY16 FY17 FY18 LTM 27 FY13 FY14 FY15 FY16 FY17 FY18 LTM % Growth(1) New Stores 11 21 27 23 24 % Growth 18 18 27 18 27 % Growth 6 4 1920 27 30 710 16 20 24 28 31 % Margin26 28 27 27
Slide 8: Credit Highlights
Credit Highlights Highly Differentiated Home Décor Concept Large, Growing and Fragmented Industry Unmatched Customer Value Proposition Low Cost Operating Model With Industry Leading Profitability Compelling Store Economics Favorable Cash Flow Profile Exceptional Management Team 9
Slide 9: Strategies to Continue Driving Industry Leading Growth
Strategies to Continue Driving Industry Leading Growth
Slide 10: Expand Store Base with Significant Whitespace Opportunity
Expand Significant New Store Store Base Whitespace Opportunity with Openings Across Markets Track Record of Successful Total Number of Stores at Year End 180 FY 2019 Openings FY 2018 Openings FY 2017 Openings Pre – FY 2017 Openings 167 Stores 36 States 100 81 68 58 FY13 Growth FY14 17% FY15 19% FY16
Slide 11: Compelling Store-Level Economics
Compelling Store-Level Economics Strong New Store Performance First Year Store Sales Per Store(3) ($ in millions) $7.2 Year 1 Sales >$5.5 million ~$7.5 million $6.9(6) 5-Year Average $5.9 Store-Level Adjusted EBITDA Margin 25%+ 25%+ FY2018 (4) FY2014 FY2015 FY2016 FY2017 (2) Net Investment $3.0 - 4.
Slide 12: Continue to Drive Comparable Store Sales
Continue to Drive Comparable Store Sales 18 consecutive quarters of positive Comparable Store Sales growth, averaging 5.2% 12 Customer • Leverage credit card and Insider Perks programs (launched in August 2017) • 2.7MM Insider Perks Members as of August 2018 • Convert email address database to Insid
Slide 13: Building Brand Awareness Is a Huge Opportunity
Building Brand Awareness Is a Huge Opportunity Unaided Brand Awareness(1) High Intent to Shop(2) (Marketing Spend, $mm) $26 41% 71% FY13 FY14 FY15 FY16 FY17 FY18 Investing In TV and Digital Advertising Increasing Outreach Through Direct Mail and Catalogs (1)Per Cooper Roberts research survey: “What
Slide 14: Enhancing the Customer Experience Digitally
Enhancing the Customer Experience Digitally • • • • • • Focused on digitally-enabling in-store sales All products and prices online to promote ease of browsing Optimized mobile experience Improved online search and filter functionality Loyalty and credit card designed to gather real-time customer da
Slide 15: Historical Financial Performance
Historical Financial Performance
Slide 16: Proven Track Record
Proven Track Record $1,051 $951 165 CAGR: +21% CAGR: +21% 149 81 $404 68 $364 58 (2) (2) FY13 FY14 FY15 FY16 FY17 FY18 LTM FY13 FY14 FY15 FY16 FY17 FY18 LTM % Growth(1) 11 21 27 23 24 24 New Stores 7 10 16 20 24 28 31 $278 CAGR: +21% CAGR: +16% $178 $252 $161 $169 $105 $89 $85 $81 (2) (2) FY13 FY14
Slide 17: Consistent Track Record of Delivering Comp Store Sales Growth
Consistent Track Record of Delivering Comp Store Sales Growth 11.4% 6.1% 0% 3.5% Fiscal Quarter: (1) Q1 15 Q2 15 Q3 15 Q4 15 Q1 16 Q2 16 Q3 16 Q4 16 Q1 17 Q2 17 Q3 17 Q4 17 Q1 18 Q2 18 Q3 18 Q4 18 Q1 19 Q2 19 Q3 19E 18 consecutive quarters of Comparable Store Sales growth averaging 5.2% 16 (1) Repre
Slide 18: Momentum Has Continued Since IPO
Momentum Has Continued Since IPO Target 23% 23 Net New Stores 21% 26 Net New Stores Store Growth High Teens Comp Sales Growth Low Single Digits 3.7% 6.5% Sales Growth High Teens 23% 24% Adj. Operating Income Growth ~20% 26% 30% PF Adj. Net Income Growth ~25% 44% 64% (1)These growth targets represent
Slide 19: We Have Continued to Strengthen our Balance Sheet
We Have Continued to Strengthen our Balance Sheet ($ in millions) TLB Issuance Pro Forma 7/28/18 5.2x 5.1x PF 4/4/15 7/28/18 Cash $8 $10 $10 ABL Facility Term Loan Facilities Other Debt 43 300 168 196 291 35 68 425 35 Total Liquidity(1) $89 $126 $254 In July 2017, upsized ABL Facility from $215mm to
Slide 20: We Have Continued to Strengthen our Balance Sheet
We Have Continued to Strengthen our Balance Sheet (5 in millions ’ TLB Issuance Pro Forma PF 4415 7/2818 7/28/18 _ Cash $8 $10 $10 ABL Facility 43 196 68 Term Loan Facilties 300 201 425 Other Debt 168 35 35 Total Debt $511 $522 $528 Net Debt 503 512 518 29x 30x Total Liquidity” seo $128 $284 Debt/LT
Slide 21: Consistent Growth Since IPO with Initiatives in Place to Continue Momentum
Consistent Growth Since IPO with Initiatives in Place to Continue Momentum ($mm) • Focus on driving consistent, quality comparable store sales increases • Enable productivity loop by re-investing in: • Direct sourcing • Brand awareness • Lower prices • Better quality Continue to drive earnings growt
Slide 22: Historical Adjusted EBITDA and Store-Level Adjusted EBITDA Reconciliation
Historical Adjusted EBITDA and Store-Level Adjusted EBITDA Reconciliation Net (Loss) Income Interest Expense, net Loss on Extinguishment of Debt Income Tax (Benefit) Provision Depreciation and Amortization(a) ($9,749) 39,837 20,744 (1,558) 12,912 ($22,283) 41,152 - 59 13,132 ($436) 42,382 - 4,357 23
Slide 23: Historical Adjusted EBITDA and Store-Level Adjusted EBITDA Reconciliation
Historical Adjusted EBITDA and Store-Level Adjusted EBITDA Reconciliation Includes the portion of depreciation and amortization expenses that are classified as cost of sales in our consolidated statements of operations. Primarily consists of (i) consulting and other professional fees with respect to
Slide 24: Historical Adjusted Operating Income Reconciliation
Historical Adjusted Reconciliation Operating Income (a) Non-cash stock-based compensation associated with a special one-time initial public offering bonus grant to senior executives (the IPO grant”), which we do not consider in our evaluation of our ongoing performance. The IPO grant was made in add
Slide 25: Historical Pro Forma Adjusted Net Income Reconciliation
Historical Pro Forma Reconciliation Adjusted Net Income (a) Non-cash stock-based compensation associated with a special one-time initial public offering bonus grant to senior executives (the IPO grant”), which we do not consider in our evaluation of our ongoing performance. The IPO grant was made in
Slide 26: Nel (Loss) Income a reported siass) $15,258] $27,066 |
Nel (Loss) Income a reported siass) $15,258] $27,066 | $10.89 $9533 $18,251 (10,058) Impairment charg 2s on exinguishment of debt 2m6 2715 sed compensaton related o special one-time IPO ” 2610 5318 ane 2m9 ane a7 1296 225 ce " 6 Sock based conpersatontelaod fo oe: 414s Transacton costs" 1 n 19 ras 7
At Home Group — Debt Investor Presentation (November 2018) on 6ix