Duluth Holdings Inc. · NASDAQ:DLTH
Duluth — Q4 2016 Earnings Presentation
28 slides from Duluth's earnings presentation, Mar 21, 2017
Slide 1: Investor Presentation 4Q 2016
Investor Presentation 4Q 2016 March 21, 2017
Slide 2: Forward-Looking Statements
Forward-Looking Statements ss Sie This presentation dated March 21, 2017 includes “forwardooking 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 conce
Slide 3: One Tough Fire Hose: Son of a... Work Pants
ONE TOUGH le FIRE HOSE: SON OF A... } WORK PANTS
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 March 21,2017
Slide 5: Company history and milestones
Invents The Establishes frst Bucket Boss headquarters—a underthe refurbished dredge companyname _bargein Duluth, “Portable MN’ on Lake Products" ‘Superior a@ Creates the frsttrades panel with a group of construction workers, dock hands, eycle riders, hippies ‘and hard-as-nais yahoos als frst catalog
Slide 6: Only available at Duluth Trading - complete distribution control of our brand
Only available at Duluth Trading - complete distribution control of our brand © Owned Distribution Center © 3 PL Distribution Centers ‘March 21,2017 Retail Website Call Center Retail Stores
Slide 7: Continuous year-over-year growth every quarter, without exception
Continuous year-over-year growth every quarter, without exception = Continuous net sales ig TTM Net Sales : ul $0 sunnnttttHUII Duan growth and profitability: +28% Net Sales CAGR from CY2009-FY2016 +42% Operating Income CAGR from CY2009-FY2016
Slide 8: Investment Highlights
\ WITH THE ARMAGH Investment Highlights
Slide 9: Differentiated, Everyday Lifestyle Brand
4 y Differentiated, Everyday Lifestyle Brand Tough enoughfor work yet comfortable enough for everyday casual wear Customer Profes: 4 = Create personal connections with our customers who lead the Modern, Self-Reliant American Lifestyle 100% Bui = Workwear heritage is the foundation of our authentic i
Slide 10: Nationwide customer base
ie Nationw U.S. Population v Nationwide customer base aligned geographically with U.S. population v Unique ability to know where our customers are through our direct sales channel Top Three Markets #1~= California #2 Texas ca age? a #3 > New York ‘March 21,2017
Slide 11: Omnichannel presence with distribution control
4 aby ied wat i ona ke oral aa Presence with Distribu Direct Segment fone e-Commerce (83%) Catalog (17%) vy Present our brand in a consistent manner De ore op v |mplementcontrolled pricing strategy y Own the relationship with our customers v Capture the full margin of our products v Reduce logistics
Slide 12: Innovative products solving customer problems
[ “Thereare a whole lotta legs, torsos, feet and crotches out there counting onus” | Buck Naked™ Underwear Crouch Gusset® Pants DuluthFlex® Fire Hose® Pants f yg IS . Soggy and restrictive Restrictive pants in sensitive Pants that constrict movement underwear areas K | Rouc ‘ Additional fabric lets
Slide 13: Distinctive marketing
istinctive Ma | Gives our products anidentity and enhances our brand = Makes shopping for our products fun with attention-grabbing advertisements that are humorous, irreverent and quirky = National advertising campaigns feature characters such as our Giant Angry Beaver, Buck Naked™ Guy and Grab-Happ
Slide 14: Growth Strategy
/ DRY ON THE FLY’ PANTS & SHORT Growth Strategy
Slide 15: Growth Strategies
Growth Strategies ‘March 21,2017 3 Grow Women's Business 4 Broaden Assortmentin SelectMen’'s Product Categories
Slide 16: Build Brand Awareness to Continue Customer Acquisition
Build Brand Awareness to Continue ‘Customer Acquisition — ; ‘ 85% | | NDBERTH | comport? combs LLBean TEUEY Cfofap warns enn €ece thaw TY 95% 63% LLBean ication By VANPSENDO HEIN GyBolyy, carnarrt =Purchased = Aware but Never Purchased ‘Source: Ri Clothing / Apparel Survey and Duluth Internal Panel,
Slide 17: Retail store expansion white space opportunity
pansion Significant white space opportunity to grow our U.S. retail presence 26-2812) 16 9 : a 2013 20142015" 20162017" Store Potential in Identified Markets Dux aH (2) Proweed number store fo 217 TRADING * Existing stores profitable in both metropolitan and rural locations across muttiple markets I
Slide 18: Flexible Store Development Strategy
Flexible Store Development Strategy
Slide 19: Expanding Retail Footprint
Expanding Retail Footprint Retail stores designedto bring our brand to life with engaging and entertaining elements = Mt Horeb, WI (2010) = Belleville, WI (Outlet) (2012) = Port Washington, WI (2012) * Bloomington, MN (2013) = Duluth, MN (2014) + Fridley, MIN (2014) = Ankeny, 1A (2015) = Oshkosh, WI
Slide 20: Announced Store Openings
* Announced Store Openings @ Full Line Outlet ‘March 21,2017 Burlington, MA (1 FY17) Macomb, Ml (1Q FY17) Warwick, RI (1Q FY17) West Chester, OH (2Q FY17) Pittsburgh, PA (2Q FY17) Red Wing, MN (2Q FY17) St. Charles, MO (3Q FY17) Avon, OH (30-4Q FY17) Thornton, CO (30-4Q FY17) Wixom, MI (4Q FY17-1Q F
Slide 21: Women's business growth
45% CAGR from CY2012-FY2016 to 21% of Net Sales Women have lower awareness of our brand relative to men but report high levels of satisfaction once they have tried our products Continue to grow through customer acquisition Continue to leverage all media channels and increase marketing spend as a per
Slide 22: Financial Review
Financial Review
Slide 23: Net sales, Adjusted EBITDA, gross profit and net income
(Sin milions) mm Direct ml Retail of $304.2 2015 Adjusted EBITDA” (Sin milions) $41.2 $26.7 S176 a 2013 2014 2015 2016 Margin 10.8% 11.5% 11.2% 10.9% Gross Profit (Sin milions) cnar= 20% $214.1 $173.5 $131.0 $92.0 a 2013 2014 2015 2016 Margin 56.4% 56.5% 57.0% 56.9% (Sin milions) ae 31. 20137 20142
Slide 24: Capitalization and liquidity
($ in millions) 29-Jan-17 Cash $ 24.0 Debt Term Loan 08 Total Debt 0.8 Total Shareholder's Equity 113.8 Total Capitalization $ 114.6 Duet (1) AsefJanvay29, 2017 TRADING ‘March 21,2017 Strong cash flow from operations supports investments for growth $24 million of cash with less than $1 million of de
Slide 25: 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 Seasoned Management Team Driving an I
Slide 26: For down-and-dirty work
FOR DOWN-AND-DIRTY WORK AN OVERALL IMPROVEMENT
Slide 27: Adjusted EBITDA reconciliation
(Sin millions) 2013 2014-2018 2016 Net income (eC Pao Feo 245 () Depreciation & Amortization 12 18 28 47 (+) Interest Expense, net 02 03 03 02 (+) Income Tax Expense 13 13.5 EBITDA 175 $ 263 $ 322 $ 39.9 Adjustments (+) Non-Cash Stock Based Compensation Expense 04 a4 07 12 (+) Payment for a Portion
Slide 28: Pro forma net income reconciliation
($ in millions) 2013 2014 2015 Income Attributable to Controlling Interest Before Provision for Income Tax (.) Provision for Income Taxes “? Pro Forma Net In _$ 165 § 236 $ 28 62 95 142 $ 17. “The pro forma net income information gives effectto the conversion of the Company to a “C corporation on No