Whitehall Jewellers — Investor Presentation (March 2002)
23 slides from Whitehall Jewellers's investor presentation, Mar 20, 2002
Slide 1: Whitehall Jewellers, Inc.
Slide 2: Forward-looking statements
This release contains certain forward-looking statements (as such term is defined in Section 27A ofthe Securities Act of 1933 and Section 21 of the Secufties Exchange Act of 1934) and information relating to the Company that are based on the current beliefs of Management of the Company as well a3 as
Slide 3: Company Highlights
Company Highlights @ 372 Fine Jewelry Stores in Regional Malls (38 states) Whitehall Co. Jewellers (313 Stores) ¢ Lundstrom Jewelers (59 Stores) ¢ 5th Largest Fine Jewelry Specialty Retailer in USA ¢ Long History of Strong Profitability and Growth ¢ Unique, Proven Business Model in Consolidating Ind
Slide 4: The Whitehall Concept
The Whitehall Concept @ Small Store Format @ No Credit Risk ¢ Upscale Merchandise for a Middle Income to Affluent Customer Base ¢ Proven Marketing Approach a Rod nitenay
Slide 5: Real Estate Strategy
Real Estate Strategy ¢ Small Store — Prototype 750 Square Feet e Numerous Site Opportunities e Lower Occupancy Expense e Lower Personnel Expense ¢ Attractive Stores in Key Locations e Key Corner Locations — High Traffic e Open Store Fronts © Showcases on Lease Line ¢ Highly Productive Stores © Sales
Slide 6: Pages
Pages
Slide 7: Store Growth
Store Growth ¢ Rapid Growth in the 1990's e Organic e Acquisitions ¢ Continued Growth in the 2000’s © Over 80% of Growth Under Whitehall Brand e Growth Concentrated in Existing Markets © 16 New Stores in 2002 © Approx. 10% New Store Growth Starting in 2003 a Rad nitenay
Slide 8: New Store Growth
New Store Growth mm 364 a 200 250 191 164 M6 # of Stores Operating 1995996997998 999) 20002001 * Includes 96 Store Acquisition New Stores " chau ee Page?
Slide 9: Store Locations
Slide 10: Compelling Demographics
Compelling Demographics Maturing U.S. Population Higher Disposable Income * Increasing Inheritances Jewelry Expenditures by Age Group Dollars (per capita) &) (@) Ag of head of howehold. Source: Bureau of Labor Statistics Consumer Survey. " chau Paged _.
Slide 11: Differentiated Merchandising Strategy
Differentiated Merchandising Strategy © Upscale Merchandise © 15% of sales from items over $3,000 ° lmcow © 30% of sales from items over meena $1,500 © Bridal Jewelry © Over 50% of Total Sales © Consistent Business © Average Bridal Sale- $1,324 Average Merchandise Sale * Customer Relationship Driven
Slide 12: Credit, Merchandise Margin & Operational Strategies
Credit, Merchandise Margin & Operational Strategies « No Credit Risk e In-Store Customer Payments (starting 2002) * Merchandise Margin Improvements » Repair Margin Opportunities © Stticter Controls on In-Store Discounting « Service Income e Service Plan Revenue Grew 30% in 2001 « Expected Gross Reve
Slide 13: Marketing Strategies
Marketing Strategies * Highly Productive Mailing List » 450,000 Credit Custorner Names » 3Million Total Customer Names © Christmas Results * 1.3Million Pieces Mailed » Response Rate Approx. 6% Monthly Mailings » Response Rate Approx. 7% % chau _. Page 12
Slide 14: 2001 Accomplishments
2001 Accomplishments » Re-engineered Business — Control/Profitability * Eliminated Marginal Lines of Business * Improved Gross Margin *» Reduced Personnel Expense » Reduced Average Store Inventory * Generated $16.2 Million Free Cash Flow — with 27 New Stores « Earned 55% More in Q4 2001 « Despite Re
Slide 15: Growth Outlook
Growth Outlook Top Line Growth © 3% - 5% Same Store Sales Growth © Approx. 10% New Stores Per Year Improving Operating Margin — To Peak Historical Levels ° Gross Margin Opportunities © Controlled and Leveraged SG&A Lower Levels of Bank Debt * Strong Cash Flow from Operations ° Greater Flexibility Hi
Slide 16: Financial Guidance
Financial Guidance Actual Projected Projected Eiscal 2001 Fiscal 2002 Fiscal 2003 and Beyond * Comparable -10.7% Q1-Q3: +Low Single Digit % 8% - 8% per year Store Sales Od +4%- 5% Operating 66% Approx. 7% - 8% Growing ta 11%+ Margin Net Income 3% Approx. 4% Growing ta 6%+ Rate EPS $0.69 $0.95- $1.05
Slide 17: Financial Performance
Financial Performance Page 18
Slide 18: Sales Performance
Sales Performance ($ in millions) Sales 1996 1997 1998 1999-2000 20012002 * Analysts’ Consensus Range " chau Page 17 ae
Slide 19: Net Income as Percentage of Sales
Net Income as Percentage of Sales 6.2% 6.0% 1996 1997 1998 1999 2000 2001 " chau Page 18
Slide 20: Quarter Recap
4 Quarter Recap Sales Operating Profit EPS Page 13 173 $0.69 ($ Millions Except EPS) 2001 130.5 26.0 $1.07 Change 2.8% 445.5% +55% chau
Slide 21: Fiscal 2001 Financial Recap
Fiscal 2001 Financial Recap ($ Millions Except EPS) 2000 2004, Sales $355.1 $338.9 Operating Profit $22.3 $22.4 EPS $0.65 $0.69 Bank Debt $61.2 $45.0 age Uniteral
Slide 22: Investment Thesis
Investment Thesis » Why Invest in the Jewelry Industry Little or No Fashion risk Fragmented Industry Favorable Demographic Trends « Why Invest in Whitehall Page 21 Differentiated Concept No Credit Risk Significant Growth Opportunities Growth Financed Internally Strong Balance Sheet Disciplined Manag
Slide 23: Page
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