Duluth Holdings Inc. · NASDAQ:DLTH
Duluth — William Blair 37th Annual Growth Stock Conference 2017
31 slides from Duluth's conference presentation, Jun 13, 2017
Slide 1: William Blair 37th Annual Growth Stock Conference
William Blair 37 Annual Growth Stock Conference June 13, 2017
Slide 2: Forward-Looking Statements
Forward-Looking Statements This presentation dated June 13, 2017 includes “forwardJooking 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
FIRE HOSE SON OF A... WORK PANTS Introduction to Duluth Trading
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 13,2017
Slide 5: Company history and milestones
Invents The Bucket Boss underthe company name “Portable Products" Mails frst zi catalog Establishes frst headquarters—a refurbished dredge bargein Duluth, MIN’ on Lake ‘Superior Introduces heroically tough yetsoftFire Hose® workwear 2005 GEMPLER'S, an agricutural/ horticutural ‘supply catalog undert
Slide 6: Nationwide customer base
June 13,2017 v Nationwide customer base aligned geographically with U.S. population vi Unique ability to know where our customers are through our direct sales channel Top Three Markets #1~= California #2 Texas #3 > New York
Slide 7: Omnichannel Presence with Distribution Control
Re rant , ui hI Omnichannel Presence with Distribution Control Direct Segment seen e-Commerce (84%) Catalog (16%) v Self-reliant y Presentour brand ina consistent manner v Implementcontrolled pricing strategy Retail Segment 4 oe 7 ownine feletonehip we our customers v Capture the full margin of our
Slide 8: First Brand Pillar: Solution-Based Design
First Brand Pillar: Solution-Based Design “There’s Gotta Be A Better Way”
Slide 9: Second Brand Pillar: Humorous and Distinctive Marketing
Second Brand Pillar: Humorous and Distinctive Marketing FIGHTING WRINKLES IN AVERAGE SHIRTS
Slide 10: Second Brand Pillar: Humorous and Distinctive Marketing
\ Second Brand Pillar: Humorous and Distinctive Marketing
Slide 11: Third Brand Pillar: Guarantees
Third | 3 GUARANTEES NO HASSLES ysENSE Trading Tales I've made it to the store! This place is awesome! The staff was very friendly and helpful 4 Their positive attitudes made the difference from a gadget shopping trip to a full fledged Es shopping experience.” ~David L. Clarksburg, WV. 2 DESH 7 _ Ju
Slide 12: Growth Strategies
Growth Strategies June 13,2017 3 Grow Women's Business 4 Broaden Assortmentin SelectMen’'s Product Categories
Slide 13: Highest Customer Satisfaction Presents Opportunity to Expand Brand Awareness
Highest Customer Satisfaction Presents Opportunity to Expand Brand Awareness : A | DRBERH | corner @colonbs LLBean TEUEY dats vanns eno Cute fauo TPM 36% of respondents were aware of the Duluth Trading brand but have never purchased our product 99% 98% 95% 82% = Purchased = Aware but Never Purchased
Slide 14: The Omnichannel Experience Builds Brand Awareness and Drives Customer Acquisition
The Omnichannel Experience Builds Brand Awareness and Drives Customer Acquisition Duluth Trading Brand
Slide 15: Significant white space opportunity to grow our U.S. retail presence
| Significant white space opportunity to grow our U.S. retail presence Store Footprint 2013-2014 2018-2016) 2017 Store Potential in Identified Markets (1) okies two ote stores. Deeeri (2) Projected number of stores for 2017, G3) choos teceutet sores TRADING Existing stores profitable in both metropo
Slide 16: Site selection overview
Be ection Overview Use customer data from direct sales channel! to identify new geographies and locations Select specific site based on: - Current customer recommendations Access to freeway ~— High visibility ~ Ample parking Opportunity across urban and rural markets, including the ability to open m
Slide 17: Expanded Manager-in-Training Program
+ Expanded Manager-in-Training Program + Introduced Area Manager role * Created Director of Store Operations role + Scalable store opening process June 13,2017
Slide 18: Renovations
Renovations Build to Suit = Ankeny, A = Bloomington, MN = Downers Grove, IL = Fridley, MN = King of Prussia, PA = Manassas, VA = Omaha, NE = Macomb, Ml = Burlington, MA = Wanwick, RI Duane of irae pe Lay = Hoffman Estates, IL = Duluth, MN = Independence, MO = LaCrosse, WI = Noblesville, IN = Mt Hore
Slide 19: Announced Store Openings
ry eateae da ‘ : MN Anno' nced Store Openings Balance of 2017 = 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, MI (4Q FY17) @ Full Line Outlet June 13,2017
Slide 20: Retail store expansion plan in geographic clusters
ce ee Retail store expansion plan reflects strategy to phase openings in geographic clusters Bet Re ON LS ae June 13,2017
Slide 21: Retail Stores Create Incremental Growth Over Time
Retail Stores Create Incremental Growth Over Time Deceleration of direct growth Acceleration of direct growth vs. nationalaverage vs: national average
Slide 22: Expand offering to appeal to a wider range of women
Expandofferingto appeal to a wider range of women and lifestyleneeds 45% CAGR from CY2012-FY2016 to 21% of Net Sales Highly differentiated products in crowded space of women’s apparel = Women have lower awareness of our brand than men yet report high levels of satisfaction once they have tried our p
Slide 23: Reaching deeper into his closet
= Reaching deeper into his closet: = 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 whether at work or at leisure U uLor 2 June 13,2017
Slide 24: Financial Review
Financial Review
Slide 25: Annual net sales, gross profit, Adjusted EBITDA and net income
(Sin milions) Gross Profit (Sin milions) Direct none 325% mm Reta soa $173.5 $131.0 $163.1 $92.0 a 2013 2014 2015 2016 2013 2014 2015 2016 Margin 56.4% 56.5% 57.0% 56.9% Adjusted EBITDA” (Sin milions) ' 32.8% $41.2 oi ons $34.0 $26.7 = EA (Sin milions) $93 2013 2014 2015 Margin 10.8% 11.5% 11.2% 10.
Slide 26: First quarter gross profit, Adjusted EBITDA and net income
Gross Profit (Sin mlions) 7 (Sin mlions) 21.9% o Direct $83.7 2 $48.6 ml Retail $68.6 $39.7 Eas ue 3 mos. 2016 3 mos. 2017 3mos. 2016 3mos. 2017 (6/1/2016) (4/30/2017) (6/1/2016) (4/30/2017) Margin 57.8% 58.1% Adjusted EBITDA” Net Income?) (Sin mlions) (Sin milions) $6.6 $2.7 $3.2 Pes Ezz soa 3 mos.
Slide 27: Model for New Stores
Model for New Stores 10,000 to 12,000 selling square feet $2.0 million to $2.6 million in capital expenditures and starting inventory Average payback of less than two years Four-Wall EBITDA Margin in the mid-20s Pe DeantH ) : June 13,2017
Slide 28: Large, Addressable Market Opportunity
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 13,2017 28
Slide 29: FOR
FOR DOWN-AND-DIRTY WORK AN OVERALL IMPROVEMENT
Slide 30: Adjusted EBITDA reconciliation
‘Smonths ended (Sinmilions) 2013 2014015208 May1, April 30, 2046 2017 Net income $ i$ Mi S w7S WSS 338 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 CE See Adustments (+) Non-Cash Stock Based Compensation
Slide 31: Pro forma net income reconciliation
($ in millions) I come Attributable to Controlling Interest Before Provision for Income Taxes Q (9 Provision for Income Taxes Pro Forma Net In 95 42 $173 “The pro forma net income information gives effectto the conversion of the Company to a “C° corporation on November 25, 2015. Prior to such conver
Duluth Holdings — William Blair 37th Annual Growth Stock Conference 2017 on 6ix