20170906 Earnings 2QF17 8K





UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549





FORM 8K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934





 

 

 

 

 

 

Date of report (Date of earliest event reported): September 5, 2017

 

DULUTH HOLDINGS INC.

(Exact name of registrant as specified in its charter)

 

Wisconsin

001-37641

39-1564801

(State or other jurisdiction of incorporation)

(Commission File Number)

(IRS Employer Identification No.)

 

 

 

170 Countryside Drive

Belleville, Wisconsin 53508

(Address of principal executive offices, including zip code)

 

(608) 424-1544

(Registrant’s telephone number, including area code)

 

 







Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):





 

 

 

 

Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

 

Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

 

Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

 

Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))



Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).



Emerging growth company



If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.


 



Item 2.02 Results of Operations and Financial Condition.



The following information, including Exhibit 99.1 hereto, referenced in this Item 2.02, is being furnished pursuant to this Item 2.02 and shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, except as shall be expressly set forth by specific reference in such filing.



On September 5, 2017, Duluth Holdings Inc. (the “Company” or “Duluth Trading”) issued a press release (the “Earnings Press Release”) discussing, among other things, its financial results for its fiscal second quarter ended July 30, 2017. A copy of the Earnings Press Release is furnished as Exhibit 99.1 to this report.



Forward Looking Information



Certain matters discussed in this Current Report on Form 8-K and other oral and written statements by representatives of the Company including, but not limited to, the Company’s ability to meet its fiscal 2017 expectations (including its ability to increase net sales, adjusted EBITDA, and diluted EPS) and its ability to execute on its growth strategies and its long-term growth targets, are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995.  You can identify forward-looking statements by the use of words such as “may,” “might,” “will,” “should,” “expect,” “plan,” “anticipate,” “could,” “believe,” “estimate,” “project,” “target,” “predict,” “intend,” “future,” “budget,” “goals,” “potential,” “continue,” “design,” “objective,” “would,” and other similar expressions. The forward-looking statements are not historical facts, and are based upon Duluth Trading’s current expectations, beliefs, estimates, and projections, and various assumptions, many of which, by their nature, are inherently uncertain and beyond Duluth Trading’s control. Duluth Trading’s expectations, beliefs and projections are expressed in good faith, and Duluth Trading believes there is a reasonable basis for them. However, there can be no assurance that management's expectations, beliefs, estimates, and projections will result or be achieved and actual results may vary materially from what is expressed in or indicated by the forward-looking statements. Forward-looking statements are subject to risks and uncertainties that could cause actual performance or results to differ materially from those expressed in the forward-looking statements, including, among others, the risks, uncertainties, and factors set forth under Part 1, Item 1A "Risk Factors" in the Company’s Annual Report on Form 10-K filed with the SEC on March 22, 2017, and other factors as may be periodically described in Duluth Trading’s subsequent filings with the SEC. Forward-looking statements speak only as of the date the statements are made. Duluth Trading assumes no obligation to update forward-looking statements to reflect actual results, subsequent events or circumstances or other changes affecting forward-looking information except to the extent required by applicable securities laws. 




 



Item 9.01 Financial Statements and Exhibits.



 (d)  Exhibits.

The following exhibits are being furnished with this Current Report on Form 8-K.



 

 

 

 

 

 

 

 

 

Exhibit No.

 

Description

 

99.1

 

Earnings Press Release, dated September 5, 2017




 



SIGNATURES



Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.







 

 

 

 

 

 

 

DULUTH HOLDINGS INC.

Date:  September 5, 2017

 

 

 

 

 

 

By:

/s/ David Loretta

 

 

Name: David Loretta

 

 

Title: Senior Vice President and Chief Financial Officer








 



EXHIBIT INDEX





 

Exhibit No.

Description

99.1

Earnings Press Release, dated September 5, 2017




20170730 Earnings Release 2Q F17



Exhibit 99.1





Picture 1





Duluth Holdings Inc. Announces Second Quarter Fiscal 2017 Financial Results



Belleville, WI – Sep. 5, 2017  Duluth Holdings Inc. (dba, Duluth Trading Company) (“Duluth Trading” or the “Company”) (NASDAQ: DLTH), a lifestyle brand of men’s and women’s casual wear, workwear and accessories, today announced its financial results for the fiscal second quarter ended July 30, 2017.



Highlights for the Second Quarter Ended July 30, 2017 



·

Net sales increased 31.0% to $86.2 million compared to $65.8 million in the prior-year second quarter

·

Gross margin decreased 240 basis points (bps) to 56.7% compared to 59.1% in the prior-year second quarter

·

Net income increased 18.4% to $4.3 million, or $0.13 per diluted share, compared to $3.6 million, or $0.11 per diluted share in the prior-year second quarter

·

Adjusted EBITDA1 increased 26.7% to $9.5 million compared to $7.5 million in the prior-year second quarter 

·

During the second quarter, the Company opened two retail stores, one in West Chester, OH, and one in Pittsburgh, PA, and an outlet store in Redwing, MN

·

30th consecutive quarter of increased net sales year-over-year

1See Reconciliation of net income to EBITDA and EBITDA to Adjusted EBITDA in the accompanying financial tables.



Management Commentary



“I am pleased to report that net sales increased over 30% during the second quarter, which marked our 30th consecutive quarter of increased net sales year-over-year. We drove a 35% increase in new customer acquisition year-over-year, as we continue to invest in our omnichannel model and in growing our brand awareness with our direct marketing efforts and with geographical expansion of our retail stores,” said Stephanie Pugliese, Chief Executive Officer of Duluth Trading.



“This quarter we opened three retail stores and our first store in the West will open later this week in Thornton, CO, a suburb of Denver. We are excited to bring our unique Duluth retail experience to our many fans in this region. Including the Thornton store, we will have opened nine stores this year, and we are on track to open six more stores for the remainder of the year, for a total of 15 new stores in fiscal 2017. We believe our retail strategy is working, as our new stores continue to attract new customers to the brand and are performing exceptionally well.”



“We are pleased with our first half results and expect to deliver on our fiscal 2017 guidance, as previously stated.”



1

 


 

Operating Results for the Second Quarter Ended July 30, 2017



Net sales increased 31.0% to $86.2 million, compared to $65.8 million in the same period a year ago. The net sales increase was driven by a  7.1% growth in direct net sales and a  138.3% growth in retail net sales. Growth was achieved in all product categories. The increase in retail net sales was primarily attributable to an increase of 12 stores in the second quarter of 2017 as compared to the same period a year ago.



Gross profit increased 25.7% to $48.9 million, or 56.7% of net sales, compared to $38.9 million, or 59.1% of net sales, in the corresponding prior-year period. The 240 basis point decrease in gross margin was primarily due to a decline in shipping revenues as a result of promotions that had more free shipping days as compared to the prior-year period, coupled with an increase in inventory reserve due to retail growth and an increase in freight cost from the Company’s distribution center to the retail stores. The Company’s product margins were up slightly compared to the corresponding prior-year period.



Selling, general and administrative expenses increased 26.1% to $41.5 million, compared to $32.9 million in the same period a year ago. As a percentage of net sales, selling, general and administrative expenses decreased 180 basis points to 48.2%, compared to 50.0% in the corresponding prior-year period. As a percentage of net sales, advertising and marketing costs decreased 340 basis points to 17.4%, compared to 20.8% in the corresponding prior-year period, primarily attributable to launching the women’s television advertising campaign in the first quarter of this year versus the second quarter of the prior year, coupled with the planned decrease in catalog spend as a percentage of net sales.  As a percentage of net sales, selling expenses increased 100 basis points to 14.1%, compared to 13.1% in the corresponding prior-year period, primarily due to an increase in customer service expenses due to retail store growth, which was partially offset by leverage in shipping expenses from an increase in the proportion of retail net sales. As a percentage of net sales, general and administrative expenses increased 60 basis points to 16.7%, compared to 16.1% in the corresponding prior-year period, primarily due to an increase in store occupancy and equipment expense and depreciation, which was partially offset by personnel expenses due to operating leverage from higher sales.



Balance Sheet and Liquidity



The Company ended the quarter with a cash balance of approximately $1.4 million, with net working capital of $58.3 million, and $28.1 million available on its $40.0 million revolving line of credit. Effective August 1, 2017, the Company’s borrowing availability under its revolving line of credit increased to $50.0 million.



Fiscal 2017 Outlook



The Company reaffirmed its fiscal 2017 outlook as follows:



·

Net sales in the range of $455.0 million to $465.0 million

·

Adjusted EBITDA1 in the range of $47.0 million to $49.5 million

·

EPS in the range of $0.66 to $0.71 per diluted share



The Company updated its fiscal 2017 retail store openings and capital expenditures:

·

The Company expects to open a total of 15 stores, adding approximately 173,000 selling square feet

·

Capital expenditures of $38.0 to $42.0 million2



1See Reconciliation of forecasted net income to forecasted EBITDA and forecasted EBITDA to forecasted Adjusted EBITDA in the accompanying financial tables.

2Fiscal 2017 capital expenditures primarily include the Company’s plan to open 15  stores and information technology investments.



2

 


 

The table below recaps the Company’s fiscal 2017 stores opened, signed new store leases and the anticipated opening timeframe.









 

 

Location

 

Timing

Noblesville, IN

 

Opened March 2, 2017

Burlington, MA

 

Opened March 23, 2017

Macomb, MI

 

Opened April 6, 2017

Warwick, RI

 

Opened April 27, 2017

West Chester, OH

 

Opened May 11, 2017

Pittsburgh, PA

 

Opened June 8, 2017

Red Wing, MN

 

Opened July 15, 2017

St. Charles, MO

 

Opened August 31, 2017

Thornton, CO

 

Grand Opening September 7, 2017

Avon, OH

 

Q3 Fiscal 2017

Louisville, KY

 

Q4 Fiscal 2017

Woodbury, MN

 

Q4 Fiscal 2017

Grandville, MI

 

Q4 Fiscal 2017

Waukesha, WI

 

Q4 Fiscal 2017

Wixom, MI

 

Q4 Fiscal 2017

Anchorage, AK

 

Q1 Fiscal 2018

West Fargo, ND

 

Q1 Fiscal 2018

Portland, OR

 

Q1 Fiscal 2018

Denton, TX

 

Q2 Fiscal 2018

Arlington, TX

 

Q2 Fiscal 2018



 

 



Conference Call Information

A conference call and audio webcast with analysts and investors will be held on Tuesday, September 5, 2017 at 4:30 pm Eastern Time, to discuss the results and answer questions.

·

Live conference call: 844-875-6915 (domestic) or 412-317-6711 (international)

·

Conference call replay available through September 19, 2017: 877-344-7529 (domestic) or 412-317-0088 (international)

·

Replay access code: 10111589

·

Live and archived webcast: ir.duluthtrading.com

The Company is enabling investors to pre-register for the earnings conference call so that they can expedite their entry into the call and avoid the need to wait for a live operator. In order to pre-register for the call, investors can visit http://dpregister.com/10111589 and enter in their contact information. Investors will then be issued a personalized phone number and pin to dial into the live conference call. Individuals can pre-register any time prior to the start of the conference call on September 5th.

About Duluth Trading



Duluth Trading is a rapidly growing lifestyle brand for the Modern, Self-Reliant American. Based in Belleville, Wisconsin, we offer high quality, solution-based casual wear, workwear and accessories for men and women who lead a hands-on lifestyle and who value a job well-done. We provide our customers an engaging and entertaining experience.  Our marketing incorporates humor and storytelling that conveys the uniqueness of our products in a distinctive, fun way, and our products are sold exclusively through our content-rich website, catalogs, and “store like no other” retail locations. We are committed to outstanding customer service backed by our “No Bull Guarantee” - if it’s not right, we’ll fix it. Visit our website at www.duluthtrading.com.  





3

 


 

Non-GAAP Measurements



Management believes that non-GAAP financial measures may be useful in certain instances to provide additional meaningful comparisons between current results and results in prior operating periods. Within this release, including the tables attached hereto, reference is made to adjusted earnings before interest, taxes, depreciation and amortization (EBITDA).  See attached Table “Reconciliation of Net Income to EBITDA and EBITDA to Adjusted EBITDA,” for a reconciliation of net income to EBITDA and EBITDA to Adjusted EBITDA for the three and six months ended July 30, 2017, versus the three and six months ended July 31, 2016See also attached Table “Reconciliation of Forecasted Net Income to Forecasted EBITDA and Forecasted EBITDA to Forecasted Adjusted EBITDA,” for a reconciliation of forecasted net income to forecasted EBITDA and forecasted EBITDA to forecasted Adjusted EBITDA for the fiscal year ending January 28, 2018. Adjusted EBITDA is a metric used by management and frequently used by the financial community, which provides insight into an organization’s operating trends and facilitates comparisons between peer companies, since interest, taxes, depreciation and amortization can differ greatly between organizations as a result of differing capital structures and tax strategies. Adjusted EBITDA excludes certain items that are unusual in nature or not comparable from period to period.  The Company provides this information to investors to assist in comparisons of past, present and future operating results and to assist in highlighting the results of on-going operations.  While the Company’s management believes that non-GAAP measurements are useful supplemental information, such adjusted results are not intended to replace the Company’s GAAP financial results and should be read in conjunction with those GAAP results.



Forward-Looking Statements



This press release 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 press release, including statements concerning Duluth Trading's plans, objectives, goals, beliefs, business strategies, future events, business conditions, its results of operations, financial position and its business outlook, business trends and certain other information herein are forward-looking statements, including statements regarding Duluth Trading’s ability to execute on its growth strategies, statements under the heading “Fiscal 2017 Outlook and the forecasted results of operations in the Table “Reconciliation of Forecasted Net Income to Forecasted EBITDA to Forecasted Adjusted EBITDA.” You can identify forward-looking statements by the use of words such as “may,” ”might,” “will,” “should,” “expect,” “plan,” “anticipate,” “could,” “believe,” “estimate,” “project,” “target,” “predict,” “intend,” “future,” “budget,” “goals,” “potential,” “continue,” “design,” “objective,” “forecasted,” “would” and other similar expressions. The forward-looking statements are not historical facts, and are based upon Duluth Trading's current expectations, beliefs, estimates, and projections, and various assumptions, many of which, by their nature, are inherently uncertain and beyond Duluth Trading's control. Duluth Trading's expectations, beliefs and projections are expressed in good faith, and Duluth Trading believes there is a reasonable basis for them. However, there can be no assurance that management's expectations, beliefs, estimates, and projections will be achieved and actual results may vary materially from what is expressed in or indicated by the forward-looking statements. Forward-looking statements are subject to risks and uncertainties that could cause actual performance or results to differ materially from those expressed in the forward-looking statements, including, among others, the risks, uncertainties, and factors set forth under Part 1, Item 1A Risk Factors” in the Company’s Annual Report on Form 10-K filed with the SEC  on March 22, 2017, and other factors as may be periodically described in Duluth Trading’s subsequent filings with the SEC. Forward-looking statements speak only as of the date the statements are made. Duluth Trading assumes no obligation to update forward-looking statements to reflect actual results, subsequent events or circumstances or other changes affecting forward-looking information except to the extent required by applicable securities laws.







4

 


 

Investor Contacts:

Donni Case (310) 622-8224

Johan Yokay (310) 622-8241

Financial Profiles, Inc.

Duluth@finprofiles.com



# # #

(Tables Follow)

5

 


 



DULUTH HOLDINGS INC.

Condensed Consolidated Balance Sheets

(Unaudited)

(Amounts in thousands)



















 

 

 

 

 

 



 

July 30, 2017

 

January 29, 2017



 

 

 

 

 

 

ASSETS

 

 

 

 

 

 

Current Assets:

 

 

 

 

 

 

Cash

 

$

1,411 

 

$

24,042 

Accounts receivable

 

 

34 

 

 

45 

Other receivables

 

 

419 

 

 

349 

Inventory, net

 

 

84,734 

 

 

70,368 

Prepaid expenses

 

 

8,034 

 

 

4,860 

Deferred catalog costs

 

 

1,468 

 

 

1,582 

Total current assets

 

 

96,100 

 

 

101,246 

Property and equipment, net

 

 

75,746 

 

 

52,432 

Restricted cash

 

 

2,469 

 

 

1,435 

Goodwill

 

 

402 

 

 

402 

Other assets, net

 

 

6,980 

 

 

452 

Total assets

 

$

181,697 

 

$

155,967 

LIABILITIES AND SHAREHOLDERS' EQUITY

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

Trade accounts payable

 

$

17,836 

 

$

9,330 

Accrued expenses and other current liabilities

 

 

17,239 

 

 

19,822 

Income taxes payable

 

 

301 

 

 

5,225 

Bank overdrafts

 

 

2,350 

 

 

Current maturities of long-term debt

 

 

81 

 

 

742 

Total current liabilities

 

 

37,807 

 

 

35,119 

Long-term line of credit

 

 

11,943 

 

 

Finance lease obligations under build-to-suit leases

 

 

6,770 

 

 

3,349 

Long-term debt, less current maturities

 

 

1,466 

 

 

35 

Deferred rent obligations, less current maturities

 

 

2,595 

 

 

2,109 

Deferred tax liabilities

 

 

1,149 

 

 

1,567 

Total liabilities

 

 

61,730 

 

 

42,179 

Commitments and contingencies

 

 

 

 

 

 

Shareholders' equity:

 

 

 

 

 

 

Capital stock

 

 

87,063 

 

 

86,446 

Retained earnings

 

 

29,372 

 

 

24,733 

Total shareholders' equity of Duluth Holdings Inc.

 

 

116,435 

 

 

111,179 

Noncontrolling interest

 

 

3,532 

 

 

2,609 

Total shareholders' equity

 

 

119,967 

 

 

113,788 

Total liabilities and shareholders' equity

 

$

181,697 

 

$

155,967 



6

 


 



DULUTH HOLDING INC.

Consolidated Statements of Operations

(Unaudited)

(Amounts in thousands, except per share figures)

















 

 

 

 

 

 

 

 

 

 

 

 



 

Three Months Ended

 

Six Months Ended



 

July 30, 2017

 

July 31, 2016

 

July 30, 2017

 

July 31, 2016

Net sales

 

$

86,226 

 

$

65,823 

 

$

169,913 

 

$

134,455 

Cost of goods sold (excluding depreciation and amortization)

 

 

37,303 

 

 

26,901 

 

 

72,347 

 

 

55,842 

Gross profit

 

 

48,923 

 

 

38,922 

 

 

97,566 

 

 

78,613 

Selling, general and administrative expenses

 

 

41,534 

 

 

32,936 

 

 

89,428 

 

 

67,286 

Operating income

 

 

7,389 

 

 

5,986 

 

 

8,138 

 

 

11,327 

Interest expense

 

 

372 

 

 

37 

 

 

538 

 

 

75 

Other income, net

 

 

45 

 

 

60 

 

 

102 

 

 

130 

Income before income taxes

 

 

7,062 

 

 

6,009 

 

 

7,702 

 

 

11,382 

Income tax expense

 

 

2,709 

 

 

2,325 

 

 

2,934 

 

 

4,386 

Net income

 

 

4,353 

 

 

3,684 

 

 

4,768 

 

 

6,996 

Less: Net income attributable to noncontrolling interest

 

 

69 

 

 

65 

 

 

129 

 

 

136 

Net income attributable to controlling interest

 

$

4,284 

 

$

3,619 

 

$

4,639 

 

$

6,860 

Basic earnings per share (Class A and Class B):

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average shares of
   common stock outstanding

 

 

31,828 

 

 

31,520 

 

 

31,825 

 

 

31,520 

Net income per share attributable
   to controlling interest

 

$

0.13 

 

$

0.11 

 

$

0.15 

 

$

0.22 

Diluted earnings per share (Class A and Class B):

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average shares and
   equivalents outstanding

 

 

32,318 

 

 

32,263 

 

 

32,344 

 

 

32,265 

Net income per share attributable
   to controlling interest

 

$

0.13 

 

$

0.11 

 

$

0.14 

 

$

0.21 



7

 


 



DULUTH HOLDINGS INC.

Consolidated Statements of Cash Flows

(Unaudited)

(Amounts in thousands)















 

 

 

 

 

 



 

Six Months Ended



 

July 30, 2017

 

July 31, 2016

Cash flows from operating activities:

 

 

 

 

 

 

Net income

 

$

4,768 

 

$

6,996 

Adjustments to reconcile net income to net cash (used in) provided by
   operating activities:

 

 

 

 

 

 

Depreciation and amortization

 

 

3,280 

 

 

1,951 

Amortization of stock-based compensation

 

 

617 

 

 

615 

Deferred income taxes

 

 

(418)

 

 

(228)

Changes in operating assets and liabilities:

 

 

 

 

 

 

Accounts receivable

 

 

11 

 

 

(24)

Other receivables

 

 

(70)

 

 

(325)

Inventory

 

 

(12,879)

 

 

(10,855)

Prepaid expense

 

 

(2,749)

 

 

(12)

Deferred catalog costs

 

 

1,050 

 

 

1,067 

Trade accounts payable

 

 

6,641 

 

 

5,641 

Income taxes payable

 

 

(4,924)

 

 

(994)

Accrued expenses and deferred rent obligations

 

 

(7,495)

 

 

(2,760)

Net cash (used in) provided by operating activities

 

 

(12,168)

 

 

1,072 

Cash flows from investing activities:

 

 

 

 

 

 

Purchases of property and equipment

 

 

(20,054)

 

 

(14,513)

Change in other assets

 

 

(6,495)

 

 

Change in restricted cash

 

 

(1,034)

 

 

(774)

Purchases of other assets

 

 

(68)

 

 

(20)

Net cash used in investing activities

 

 

(27,651)

 

 

(15,307)

Cash flows from financing activities:

 

 

 

 

 

 

Proceeds from line of credit

 

 

17,395 

 

 

Payments on line of credit

 

 

(5,452)

 

 

Proceeds from long term debt

 

 

800 

 

 

Payments on long term debt

 

 

(20)

 

 

(135)

Payments on capital lease obligations

 

 

(10)

 

 

(9)

Change in bank overdrafts

 

 

2,350 

 

 

Distributions to shareholders

 

 

 

 

(192)

Proceeds from finance lease obligations

 

 

1,310 

 

 

Capital contributions to variable interest entity

 

 

794 

 

 

Other

 

 

21 

 

 

Net cash provided by (used in) financing activities

 

 

17,188 

 

 

(336)

Decrease in cash

 

 

(22,631)

 

 

(14,571)

Cash at beginning of period

 

 

24,042 

 

 

37,873 

Cash at end of period

 

$

1,411 

 

$

23,302 

Supplemental disclosure of cash flow information

 

 

 

 

 

 

Interest paid

 

$

472 

 

$

75 

Income taxes paid

 

$

8,340 

 

$

5,544 

Supplemental disclosure of non-cash information

 

 

 

 

 

 

Property and equipment acquired under build-to-suit leases

 

$

2,090 

 

$

83 

Unpaid liability to acquire property and equipment

 

$

4,411 

 

$

1,713 





8

 


 

DULUTH HOLDINGS INC.

Reconciliation of Net Income to EBITDA and EBITDA to Adjusted EBITDA

(Unaudited)

(Amounts in thousands)















 

 

 

 

 

 

 

 

 

 

 

 



 

Three Months Ended

 

Six Months Ended



 

July 30, 2017

 

July 31, 2016

 

July 30, 2017

 

July 31, 2016

Net income

 

$

4,353 

 

$

3,684 

 

$

4,768 

 

$

6,996 

Depreciation and amortization

 

 

1,728 

 

 

1,082 

 

 

3,280 

 

 

1,951 

Interest expense

 

 

372 

 

 

37 

 

 

538 

 

 

75 

Income tax expense

 

 

2,709 

 

 

2,325 

 

 

2,934 

 

 

4,386 

EBITDA

 

$

9,162 

 

$

7,128 

 

$

11,520 

 

$

13,408 

Non-cash stock based compensation

 

 

293 

 

 

335 

 

 

617 

 

 

615 

Adjusted EBITDA

 

$

9,455 

 

$

7,463 

 

$

12,137 

 

$

14,023 







DULUTH HOLDINGS INC.

Segment Information

(Unaudited)

(Amounts in thousands)

















 

 

 

 

 

 

 

 

 

 

 

 



 

Three Months Ended

 

Six Months Ended



 

July 30, 2017

 

July 31, 2016

 

July 30, 2017

 

July 31, 2016

Net sales

 

 

 

 

 

 

 

 

 

 

 

 

Direct

 

$

57,667 

 

$

53,841 

 

$

121,442 

 

$

114,166 

Retail

 

 

28,559 

 

 

11,982 

 

 

48,471 

 

 

20,289 

Total net sales

 

$

86,226 

 

$

65,823 

 

$

169,913 

 

$

134,455 

Operating income

 

 

 

 

 

 

 

 

 

 

 

 

Direct

 

$

3,125 

 

$

4,587 

 

$

2,968 

 

$

8,778 

Retail

 

 

4,264 

 

 

1,399 

 

 

5,170 

 

 

2,549 

Total operating income

 

 

7,389 

 

 

5,986 

 

 

8,138 

 

 

11,327 

Interest expense

 

 

372 

 

 

37 

 

 

538 

 

 

75 

Other income, net

 

 

45 

 

 

60 

 

 

102 

 

 

130 

Income before income taxes

 

$

7,062 

 

$

6,009 

 

$

7,702 

 

$

11,382 







DULUTH HOLDINGS INC.

Reconciliation of Forecasted Net Income to Forecasted EBITDA and Forecasted EBITDA to Forecasted Adjusted EBITDA

For the Fiscal Year Ending January 28, 2018

(Unaudited)

(Amounts in thousands)









 

 

 

 

 

 

 

 

 



 

Low

 

Mid-point

 

High

Forecasted

 

 

 

 

 

 

 

 

 

Net income

 

$

21,500 

 

$

22,400 

 

$

23,000 

Depreciation and amortization

 

 

8,400 

 

 

8,400 

 

 

8,400 

Interest expense

 

 

2,000 

 

 

2,000 

 

 

2,000 

Income tax expense

 

 

13,600 

 

 

14,200 

 

 

14,600 

EBITDA

 

$

45,500 

 

$

47,000 

 

$

48,000 

Non-cash stock based compensation

 

 

1,500 

 

 

1,500 

 

 

1,500 

Adjusted EBITDA

 

$

47,000 

 

$

48,500 

 

$

49,500 



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