Duluth Holdings Inc. · NASDAQ:DLTH
Duluth — Q4 2020 Earnings Presentation
24 slides from Duluth's earnings presentation, Mar 26, 2021
Slide 1: Investor Presentation Fourth Quarter 2020
Investor Presentation Fourth Quarter 2020 March 26, 2021 va 7
Slide 2: Disclaimer
Disclaimer Forward-Looking Statements This presentation dated March 26, 2021 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
Slide 3: Introduction to Duluth Trading Co.
Introduction to Duluth Trading Co.
Slide 4: Duluth Trading Co.
Duluth Trading Co. a Workwear Heritage is the Foundation of our Authentic, Everyday Lifestyle Brand Long History of Product Innovation and Solution-Based Design Humorous and Distinctive Marketing Outstanding and Engaging Customer Experience Nationwide Omnichannel Presence with Controlled Distributio
Slide 5: Investment Highlights
Investment Highlights * Growing lifestyle brand with well-established direct business ¢ Multiple revenue growth opportunities > Evolving into a Portfolio of Distinct Brands within the Duluth Trading Co. Ecosystem >» Growing Sales in Existing Store and Non-Store Markets > Strengthening the Core Men’s
Slide 6: Year Ended Fiscal 2020 Financial Highlights
Year Ended Fiscal 2020 Financial Highlights + Net sales of $638.8M increased 4% versus last year + Direct-to-consumer net sales of $460.8M increased 31.5% + Adjusted EBITDA of $55.5M increased +6.8% versus last year + Free cash flow positive $38.5M, compared to negative -$22.4M in 2019 March:
Slide 7: Net Sales and Adjusted EBITDA
Net Sales and Adjusted EBITDA Das. ¢ Strong track record of 16% Net Sales and 10% Adjusted EBITDA growth * Strategic investments and operating efficiencies support long-term objectives of accelerated earnings growth G' (Sin milions) a (in millions) 2015 2016 2017 2018 2019 2020 2015 2016 2017 2018 2
Slide 8: Growth Strategy
Growth Strategy
Slide 9: Growth Strategies
Growth Strategies 1 2: Evolve into a Portfolio of Distinct Brands within the Duluth Ecosystem Growing Sales in Existing Store and Non-Store Markets March 26, 202: 3 Strengthening the Core Men's Duluth Brand Growing our Women’s Duluth Brand
Slide 10: Duluth Trading Co. Brand Platform
Duluth Trading Co. Brand\Platform Our “can-do” customers Our family of brands: Celebrating the “can-do” spirit by enabling anyone who takes on life with their own two hands: ih pers | Best $€ Mave TRADIN sR ALASKAN ry HARDGEAR Core line of innovative men’s and Tough, no-frillsbasics workwearline Per
Slide 11: Expanding & Refining our Retail Presence
Expanding & Refining our Retail Presence, purst * Design the next generation store model influenced by recent shifts in shopping . behavior that still achieves attractive unit . economics > Utilize direct segment data to determine markets with existing customer base » Focus on regions with demograph
Slide 12: Stores Triple the Size of Markets and Revive Direct Growth Over Time
Stores Triple the Size of Markets and Revive Direct Growth Over Time Direct sales growth accelerates in store Total Sales in a store market grow up markets 18 to 24 months to 3X with the presence of retail after opening, as evidenced by the higher growth rates in older store markets Average Increase
Slide 13: Retail Stores Attract New, More Valuable Customers
Retail Stores Attract New, More,Valuable Customers purst 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 Buye
Slide 14: Strengthening the Core Men's Duluth Brand
Strengthening the Core Men’s Duluth Brand purst Duluth brand men’s net sales were flat to 2019 + Selectively broaden our assortment in certain product categories + Cement Duluth as the most innovative workwear destination. + Extend core products through color, fabric and size + Increase penetration
Slide 15: Growing our Women's Duluth Brand
+ Net sales increased 6% in 2020 + Continue customer acquisition through marketing investments and retail presence + Expand product offering to address more of her lifestyle and appeal to wider range of female customers + Plus sizes grew to 11% of women’s sales in 2020 Net Sales 163 We (Sin millions
Slide 16: Financial Review
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Slide 17: Three Months Ended January 31, 2021
Three Months Ended January 31 (Sin mlions) (Sin milions) Direct 269.6 ™ Retail $ $256.0 $137.1 “ Ea = ae 1.0% _ $162.8 $187.3 2019 2020 3 mos. 2019 3mos. 2020 (21212020) (1/31/2021) (21212020) (1/31/2021) Margin 52.8% 53.0% Adjusted EBITDA’ | Netincomes | (Sin mlions) (Sin milions) $29.9 $38.7 $24.2
Slide 18: Year Ended January 31, 2021
Year Ended January 31, \2021 Gross Profit (Sin mtions) (Sin mlions) 638.8 Direct $615.6 $ ™ Retail [se2_ 33% _, $331.5 poe $328.4 4.0% $350.4 $4608 2019 2020 2019 2020 (2/2/2020) (1131/2021) (21212020) (1/31/2021) Margin 53.3% 51.9% Aalusted EBITDA: | Netincomes | (Sin mlions) (Sin mlions) $65.5 $18
Slide 19: Strong Balance Sheet, Liquidity
Strong Balance Sheet, Liqui Debtto Capital": 2 Free Cash Flow As of January 31, $38.5 ($ in millions) 2021 Cash $ 47.2 Debt: Line of Credit 0.0 Term Loan 48.3 Total Debt 48.3 Total Shareholders’ Equity 191.1 $(22.4) Total Capitalization $ 239.4 2019 2020 Debtto Capital ratio 20.2% + Balances do noti
Slide 20: Fiscal 2021 Financial Guidance
Fiscal 2021 Financial Guidance ($ in millions) Net Sales Adj. EBITDA EPS CAPEX () 2020 2021 Guidance (0 2021 Forecasted Adj. EBITDA Fiscal Year Ended January 31,2021 $638.8 | $680-$700 | forme a Net income $ 210 $ 23.0 () Depreciation and amortization 266 277 $55.5 $66 — $70 (#) Amortization of inte
Slide 21: Long-Term Financial Targets
Long-Term Financial Targets 2017 2018 2019 2020 LT Targets ($ in millions) Net Sales $471.4 $568.1 $615.6 $638.8 $1.0B Gross Profit % 55.4% 54.6% 53.3% 51.9% 54-55% Total SG&A % 47.5% 48.1% 48.7% 48.1% 45-44% Adj. EBITDA % 9.8% 9.1% 8.4% 8.7% 15-16%
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Slide 23: Reconciliation to 2020 Adjusted EBITDA and Free Cash Flow
Reconciliation to 2020 Adjusted EBITDA and Free Cash Glow pers? Adjusted EBIT! ee Cash Flow ‘3.Months Ended Fiscal Year Ended Fiscal Year Ended January 31, February2, January 31, February2, January 34, February2, (Sin millions) 2024 2020 2024 2020 S inmillions) 2024 2020 Netincome S28 S$ 242 $ 134 $
Slide 24: Announced Store Openings
Announced Store Openings Location Timing Gross Sq Ft Henrico, VA Opened March 5, 2020 16,828 Springfield, OR Opened August 14, 2020 20,388 Orland Park, IL Opened August 20, 2020 10,000 Florence, KY Opened October 1, 2020 13,126 Cherry Hill, NJ Q4 Fiscal 2021 11,441