Slide 1: Xcel Brands Investor Presentation
NASDAQ: XELB XCEL BRANDS (12-04-23)2 INVESTOR PRESENTATION
Slide 2: Forward Looking Statements
FORWARD LOOKING STATEMENTS 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 includ
Slide 3: Table of Contents
TABLE OF CONTENTS I OUR OVERVIEW II THE BUSINESS MODEL III GROWTH OPPORTUNITIES 3
Slide 4: Our Overview
OUR OVERVIEW 4
Slide 5: Xcel is a consumer products and social commerce company
XCEL IS A CONSUMER PRODUCTS AND SOCIAL COMMERCE COMPANY GENERATING APPROXIMATELY $600 MILLION IN ANNUAL RETAIL SALES UNDER ITS BRANDS 5 R O B E R T D ’ L O R E N , C E O 5
Slide 6: We imagine shopping, entertainment and social media as social commerce
“We imagineshopping, entertainment and 6 socialmedia as social commerce” – R O B E R T D ’ L O R E N , C E O
Slide 7: Executive Summary: Leader in Social Commerce
7 EXECUTIVE SUMMARY LEADER IN SOCIAL COMMERCE $ 4 B B i n c u m u l a t i v e r e t a i l s a l e s i n L i v e S t r e a m i n g a n d S o c i a l C o m m e r c e , o v e r 5 m i l l i o n s o c i a l f o l l o w e r s a n d o v e r $ 6 0 0 m i l l i o n i n a n n u a l r e t a i l s a l e s a c r
Slide 8: Financial Strength
8 FINANCIAL STRENGTH W o r k i n g c a p i t a l l i g h t b u s i n e s s m o d e l , a n d a h i s t o r i c a l t r a c k r e c o r d o f r e v e n u e a n d A d j u s t e d E B I T D A g r o w t h , h a v e e n a b l e d c o n t i n u e d i n v e s t m e n t s i n t o o u r b r a n d s a n d t e
Slide 9: Our Evolution 2011-2022
OUR EVOLUTION 2011 2015 2020 2011 - 2016 BUILDING THE FOUNDATION Acquired Isaac Mizrahi, Judith Ripka, Halston and C. Wonder Significant growth across our brands in Direct-Response Television and licensing Over $1BB of Live Stream Shopping sales at retail 2012 2014 2016 2017 2018 2019 2021 2022 2017
Slide 10: Our Evolution 2023 - Forward
OUR EVOLUTION 10 2023 - FORWARD LEADING SOCIAL COMMERCE PLATFORM Planned launch of Social Commerce marketplace adding new brands to our platform through incubation, partnerships and future acquisitions Development and expansion of new and existing brands across all channels of distribution through L
Slide 11: Our Core Brands
OUR CORE BRANDS Note: All brands are fully owned by Xcel Brands Inc. other than (i) Isaac Mizrahi which represents a minority interest retained ownership, TWRHLL which is co-owned by Xcel and Christie Brinkley, and (iii) Longaberger which represents a 50% ownership position in the business by Xcel.
Slide 12: Sales at Retail
SALES AT RETAIL WE OWN STRONG BRANDS THAT RESONATE WITH CONSUMERS Retail Sales include actual retail sales where reported, as well as estimates based on a combination of our net wholesales and reported net wholesales of our licensees, converted to estimated retail sales applying a reasonable mark-up
Slide 13: Revenue and Adj. EBITDA
13 (1)Launched wholesale divisions in jewelry and apparel to enhance brands (2)Invested over $5MM in technology and systems from 2020-2022 (3)Sold Isaac Mizrahi in May 2022, resulted in revenue reduction of $16MM and EBITDA reduction of approximately $6.8MM, reduced debt from $25MM to $0. (4)Restruc
Slide 14: Balance Sheet Highlights
14 BALANCE SHEET HIGHLIGHTS FISCAL YEAR ENDING QUARTER ENDING 2019 2020 2021 2022 3Q'23 Cash $ 4,641 $ 4,957 $ 4,483 $ 4,608 $ 2,189 Current Assets 17,566 16,147 17,179 14,020 8,382 TOTAL Assets $ 143,191 $ 123,054 $ 125,781 $ 88,935 $ 75,750 Current Liabilities(1) $ 8,085 $ 8,215 $ 9,310 $ 5,097 $
Slide 15: The Business Model
THE BUSINESS MODEL 15
Slide 16: Business Model Overview
BRAND DEVELOPMENT LICENSING DESIGN AND CREATIVE MARKETING AND CONTENT PRODUCTION SOCIAL COMMERCE TECHNOLOGY PLATFORM XCELhas built a working capital light operating and technology platform designed to build brands and drive sales through Live Streaming and Social Commerce BUSINESS MODEL OVERVIEW OUR
Slide 17: The Rise of Social Commerce
3 THE RISE OF SOCIAL COMMERCE Billions are now up for grabs as ecommerce, live streaming, and social media are evolving into Social Commerce marketplaces powered by short form video content, with an estimated 20% of all online sales expected to be driven by social commerce by 2026 .. (1) As compared
Slide 18: Social Commerce Technology
SOCIAL COMMERCE TECHNOLOGY We have created and invested in a multi-brand short-form video content platform with the ability for shoppers, creators, and influencers to earn fees based on conversions. The platform will be an industry leader in the application of artificial intelligence (AI) to the sho
Slide 19: Growth Opportunities
GROWTH OPPORTUNITIES 19 19
Slide 20: Key Growth Strategies
KEY GROWTH STRATEGIES GROW EXISTING BRANDS SOCIAL COMMERCE OPPORTUNITIES PURSUE AQUISITIONS 20
Slide 21: Halston: partnership with G-III Apparel Group
June 2023, new partnership announced with GIII Apparel Group An industry-leading public company with sales over $2BB annually, is expected to grow the brand over the next several years with substantial investments and brand marketing Ken Downing as Creative Director, relaunching the brand in premium
Slide 22: Judith Ripka: partnership with JTV
New partnership with JTV , an industry leader in jewelry Live Stream commerce with over $500MM of annual retail sales who will take over the Live Stream, wholesale, and D2C channels - 900% growth in revenues from 2019-2021 driven by continued growth of independent jeweler distribution and Live Strea
Slide 23: QVC business back on growth trajectory
QVC business back on a strong growth trajectory for 2023 with regular shows in primetime New collection for better retailers in development Expansion through licensing, DTC and Social Commerce Raising brand awareness through collaborations, most recently with AnaOno and Smiley 23 23
Slide 24: Christian Siriano brand update
Announced Christian Siriano as new Creative Director in 1Q’23 Launched a new collection on HSN in 2Q’23 with extremely high engagement and aggressive growth planned New categories planned to launch in 2024 including handbags, footwear, jewelry, seasonal accessories and travel 24 24
Slide 25: Isaac Mizrahi brand update
New D2C website launched in 2022 boasts high engagement New sportswear license signed in 4Q’22 for distribution outside of QVC and through DTC website International partners and new categories in discussion Remains top performing designer apparel brand in Direct Direct-Response Television channel Xc
Slide 26: Longaberger brand update
Premium social commerce and Live Streaming home products company with over 5,000 nano influencers as stylists and 300,000 customers Significant growth potential through digital marketing efforts, stylist recruiting, and expansion of vendors Additional growth opportunities through licensing and inter
Slide 27: TWRHLL collaboration with Christie Brinkley
New brand announced December 2023 and launching Spring 2024 as a collaboration between Xcel Brands and Christie Lee Brinkley, an iconic American supermodel with over 1 million followers on social media. Christie’s beloved home, Tower Hill, located in Long Island’s stunning East End, reflects her cre
Slide 28: Social Commerce Opportunities
SOCIAL COMMERCE OPPORTUNITIES NEW SOCIAL COMMERCE DRIVEN BRANDS We are currently developing new brands in collaboration with designers and other social media influencers who have millions of followers and are positioned to succeed in Live Stream and Social Commerce. We plan to launch 2-4 new brands
Slide 29: Acquisitions
AQUISITIONS SEPTEMBER 2011 APRIL 2014 JUNE 2015 SALE - MAY 2022 DECEMBER 2014 APRIL 2022 Since 2011 we have sought the acquisition of brands and businesses that we believe we can grow through Social Commerce, with an average of one acquisition every two years We seek to divest and/or harvest our bra
Slide 30: Investor Relations Contact
NASDAQ: XELB INVESTOR RELATIONS CONTACT: IR@XCELBRANDS.COM 30 30
Slide 31: Exhibit A: Reconciliation of Adjusted EBITDA
EXHIBIT A RECONCILIATION OF ADJUSTED EBITDA 31 Xcel Brands, Inc. and Subsidiaries Reconciliation of Adjusted EBITDA (Unaudited) FISCAL YEAR YTD PROJ. FISCAL YEAR (amounts in thousands) 2017 2018 2019 2020 2021 2022 Q3 2023 2023(F) 2024(F) Net Income (loss) ($10,122) $1,088 ($3,445) ($12,936) ($12,18