dlth-20211202x8k
false000164974400016497442021-12-022021-12-02

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

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

 

 

 

 

Date of report (Date of earliest event reported):   December 2, 2021

 

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.)

 

 

 

201 East Front Street

Mount Horeb, Wisconsin 53572

(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):

 

 

 

o

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

 

 

o

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

 

 

o

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

 

 

o

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

Securities registered pursuant to Section 129b) of the Act:

Title of each class

Trading Symbol(s)

Name of each exchange on which registered

Class B Common Stock, No Par Value

DLTH

NASDAQ Global Select Market

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 December 2, 2021, 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 October 31, 2021. 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 2021 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 "Risk Factors" in the Company’s Annual Report on Form 10-K filed with the SEC on March 26, 2021 and other factors as may be periodically described in Duluth Trading’s subsequent filings with the SEC. These risks and uncertainties include, but are not limited to, the following: the prolonged effects of the COVID-19 on store traffic and disruptions to our distribution network, supply chains and operations; our ability to maintain and enhance a strong brand and sub-brand image; effectively adapting to new challenges associated with our expansion into new geographic markets; generating adequate cash from our existing stores to support our growth; effectively relying on sources for merchandise located in foreign markets; transportation delays and interruptions, including port congestion; inability to timely and effectively obtain shipments of products from our suppliers and deliver merchandise to our customers; the inability to maintain the performance of a maturing store portfolio; the impact of changes in corporate tax regulations; identifying and responding to new and changing customer preferences; the success of the locations in which our stores are located; our ability to attract and retain customers in the various retail venues and locations in which our stores are located; competing effectively in an environment of intense competition; our ability to adapt to significant changes in sales due to the seasonality of our business; price reductions or inventory shortages resulting from failure to purchase the appropriate amount of inventory in advance of the season in which it will be sold or global market constraints; increases in costs of fuel or other energy, transportation or utility costs and in the costs of labor and employment; failure of our information technology systems to support our current and growing business, before and after our planned upgrades; and other factors that may be disclosed in our SEC filings or otherwise. 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 December 2, 2021

104

Cover Page Interactive Data File (embedded within the Inline XBRL document)



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:  December 2, 2021

 

 

 

 

 

 

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 December 2, 2021

104

Cover Page Interactive Data File (embedded within the Inline XBRL document)

20211031 Earnings Release 3Q F21



Exhibit 99.1





Picture 1





Duluth Holdings Inc. Announces  Third Quarter 2021 Financial Results



Net Sales of $145 million increase 7.2% compared to Q3 2020 and 21.3% compared to Q3 2019



Gross Margin reaches record third quarter rate of 57.6%



Raises Full Year 2021 EPS outlook to $0.81 to $0.86



MOUNT HOREB, WI  December  2, 2021  Duluth Holdings Inc. (dba, Duluth Trading Company) (“Duluth Trading” or the “Company”) (NASDAQ: DLTH), a growing lifestyle brand of men’s and women’s workwear, casual wear, outdoor apparel and accessories, today announced its financial results for the fiscal third quarter ended October 31, 2021.



Highlights for the Third Quarter Ended October 31, 2021 



·

Net sales increased 7.2% to $145.3 million compared to $135.5 million in the third quarter of 2020 and increased 21.3% when compared to the same period in 2019

·

Gross margin improved 520 basis points to 57.6% compared to 52.4% in the prior year third quarter

·

Operating income increased $2.0 million, to $4.9 million compared to $2.9 million in the prior year third quarter

·

Net income was $2.8 million, or $0.09 per diluted share, compared to net income of $0.9 million, or $0.03 per diluted share in the prior year third quarter

·

Adjusted EBITDA1 increased 15.3% to $13.2 million compared to $11.4 million in the prior year third quarter 



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



Management Commentary



President and CEO, Sam Sato commented, “Our third quarter results reflect continued strength in customer demand for our core product offering and strong operating performance in the face of supply chain disruptions. Despite the congestion in the transportation networks, our business was able to maneuver and generate healthy sales growth of 7.2% and net income growth of over 200%, led by significant gross profit margin improvement. We are encouraged with the holiday selling trends to date and expect to end the year strong.”



 



1

 


 

“As we near the end of 2021 and look into 2022 and beyond, I’m excited with the progress we’ve made on developing our long-range Big Dam Blueprint and the insights that will inform our strategic growth opportunities. The building blocks of the blueprint will inform critical long-term investments in our business, many of which are underway today and will be embedded in our near-term plans. Importantly, the investments we make will be thoughtful and purposeful, matching the growth and needs of the business. The core pillars of our strategic plans are:



·

Lead with a digital and customer first mindset in all aspects of our strategic initiatives

·

Intensify our efforts to optimize our owned DTC channels by truly understanding how our customer wants to engage with Duluth

·

Evolve our multi-brand platform to enable long term growth through product development that meets our customer’s end use

·

Continually test and learn in alternative channels that can lead to incremental growth on top of our goal of reaching $1 billion in sales by 2025

·

Invest in the enablement and future proofing of our enterprise through thoughtful, value creating investments in supply chain and digital capabilities”



Operating Results for the Third Quarter Ended October 31, 2021



Net sales increased 7.2% to $145.3 million, compared to $135.5 million in the same period a year ago and increased 21.3% versus the third quarter of 2019. Retail store net sales increased by 22.3% to $60.1 million, a significant increase over last year’s third quarter when store traffic was adversely affected by the pandemic. For a more normalized comparison, retail store sales were up 3.3% compared with the third quarter of 2019. Direct-to-consumer net sales decreased by 1.4% to $85.2 million compared to the third quarter last year when online shopping was boosted by heavier discounts and customer store traffic was light due to covid concerns. For a more normalized comparison, direct-to-consumer sales increased 38.4% compared to the third quarter of fiscal 2019.



Net sales in store markets increased 10.5% to $103.0 million, compared to $93.6 million in the same period a year ago. The increase was driven by a continued ramp up in store traffic and positive conversion trends as compared to the prior year. Net sales in non-store markets increased slightly by 0.7%, to $41.1 million. 



Men’s apparel net sales growth increased 7.5% driven by growth in year-round workwear, while women’s apparel net sales increased 5.6% driven by strength in woven bottoms and flannels.



Gross profit increased 17.8% to $83.6 million, or 57.6% of net sales, compared to $71.0 million, or 52.4% of net sales, in the corresponding prior year period. The significant increase in gross profit was driven by a higher mix of full price sales due to lower clearance inventory and successfully dialing back promotional activity.



Selling, general and administrative expenses increased 15.5% to $78.8 million, compared to $68.2 million in the same period a year ago. As a percentage of net sales, selling, general and administrative expenses increased to 54.2%, compared to 50.3% in the corresponding prior year period.



The increase in selling, general and administrative expense was primarily due to higher personnel costs, coupled with increased advertising expense as we pulled back in the prior year due to our uncertainty about customer demand resulting from the pandemic.

The effective tax rate related to controlling interest was 25% compared to 29% in the corresponding prior year period.







2

 


 



Balance Sheet and Liquidity



The Company ended the quarter with a cash balance of approximately $20.4 million, an inventory balance of $165.1 million, net working capital of $89.9 million, and no outstanding balance on its  $150.0 million revolving senior credit facility. 



Updated Fiscal 2021 Outlook



The Company updated its fiscal 2021 outlook as follows:



·

Net sales in the range of $700 million to $715 million

·

Adjusted EBITDA in the range of $73 million to $75 million1

·

EPS in the range of $0.81 to $0.86 per diluted share

·

Capital expenditures, inclusive of software hosting implementation costs, of approximately $18 million



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



Conference Call Information

A conference call and audio webcast with analysts and investors will be held on Thursday,  December  2, 2021 at 9:30 am 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 December  9, 2021: 877-344-7529 (domestic) or 412-317-0088 (international)

·

Replay access code: 10161763

·

Live and archived webcast: ir.duluthtrading.com

Investors can pre-register for the earnings conference call to expedite their entry into the call and avoid waiting for a live operator. To pre-register for the call, please visit https://dpregister.com/10161763and enter your contact information. You will then be issued a personalized phone number and pin to dial into the live conference call. Investors can pre-register any time prior to the start of the conference call.

About Duluth Trading



Duluth Trading is a growing lifestyle brand for the Modern, Self-Reliant American. Based in Mount Horeb, 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 are available 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 http://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 (Loss) to EBITDA and EBITDA to Adjusted EBITDA,” for a reconciliation of net income to EBITDA and EBITDA to Adjusted EBITDA for the three and nine months ended October 31, 2021, versus the three and nine months ended November 1, 2020.



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.



























































4

 


 



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, including statements under the heading “Updated Fiscal 2021 Outlook” are forward-looking statements. 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 26, 2021 and other factors as may be periodically described in Duluth Trading’s subsequent filings with the SEC. These risks and uncertainties include, but are not limited to, the following: the prolonged effects of COVID-19 on store traffic and disruptions to our distribution network, supply chains and operations; our ability to maintain and enhance a strong brand image; effectively adapting to new challenges associated with our expansion into new geographic markets; generating adequate cash from our existing stores to support our growth; effectively relying on sources for merchandise located in foreign markets; transportation delays and interruptions, including port congestion; inability to timely and effectively obtain shipments of products from our suppliers and deliver merchandise to our customers; the inability to maintain the performance of a maturing store portfolio; the impact of changes in corporate tax regulations; identifying and responding to new and changing customer preferences; the success of the locations in which our stores are located; our ability to attract and retain customers in the various retail venues and locations in which our stores are located; competing effectively in an environment of intense competition; our ability to adapt to significant changes in sales due to the seasonality of our business; price reductions or inventory shortages resulting from failure to purchase the appropriate amount of inventory in advance of the season in which it will be sold in global market constraints; increases in costs of fuel or other energy, transportation or utility costs and in the costs of labor and employment; failure of our information technology systems to support our current and growing business, before and after our planned upgrades; and other factors that may be disclosed in our SEC filings or otherwise. 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.



Investor Contacts:

ICR, Inc.

(646) 277-1200

DuluthIR@icrinc.com



(Tables Follow)

***



5

 


 





DULUTH HOLDINGS INC.

Condensed Consolidated Balance Sheets

(Unaudited)

(Amounts in thousands)



















 

 

 

 

 

 



 

October 31, 2021

 

January 31, 2021



 

 

 

 

 

 

ASSETS

 

 

 

 

 

 

Current Assets:

 

 

 

 

 

 

Cash and cash equivalents

 

$

20,390 

 

$

47,221 

Receivables

 

 

5,133 

 

 

2,270 

Income tax receivable

 

 

605 

 

 

Inventory, net

 

 

165,078 

 

 

149,052 

Prepaid expenses & other current assets

 

 

14,787 

 

 

10,203 

Prepaid catalog costs

 

 

635 

 

 

1,014 

Total current assets

 

 

206,628 

 

 

209,760 

Property and equipment, net

 

 

114,579 

 

 

124,237 

Operating lease right-of-use assets

 

 

124,164 

 

 

117,490 

Finance lease right-of-use assets, net

 

 

50,866 

 

 

53,468 

Available-for-sale security

 

 

6,598 

 

 

6,111 

Other assets, net

 

 

5,382 

 

 

4,511 

Total assets

 

$

508,217 

 

$

515,577 

LIABILITIES AND SHAREHOLDERS' EQUITY

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

Trade accounts payable

 

$

59,157 

 

$

33,647 

Accrued expenses and other current liabilities

 

 

41,832 

 

 

37,686 

Income taxes payable

 

 

 

 

7,579 

Current portion of operating lease liabilities

 

 

12,362 

 

 

11,050 

Current portion of finance lease liabilities

 

 

2,679 

 

 

2,629 

Current portion of Duluth long-term debt

 

 

 

 

2,500 

Current maturities of TRI long-term debt1

 

 

675 

 

 

623 

Total current liabilities

 

 

116,705 

 

 

95,714 

Operating lease liabilities, less current maturities

 

 

110,370 

 

 

104,287 

Finance lease liabilities, less current maturities

 

 

40,954 

 

 

43,299 

Duluth long-term debt, less current maturities

 

 

 

 

45,750 

TRI long-term debt, less current maturities1

 

 

26,773 

 

 

27,229 

Deferred tax liabilities

 

 

8,092 

 

 

8,200 

Total liabilities

 

 

302,894 

 

 

324,479 

Commitments and contingencies

 

 

 

 

 

 

Shareholders' equity:

 

 

 

 

 

 

Treasury stock

 

 

(998)

 

 

(628)

Capital stock

 

 

94,815 

 

 

92,875 

Retained earnings

 

 

113,509 

 

 

101,166 

Accumulated other comprehensive income, net

 

 

494 

 

 

48 

Total shareholders' equity of Duluth Holdings Inc.

 

 

207,820 

 

 

193,461 

Noncontrolling interest

 

 

(2,497)

 

 

(2,363)

Total shareholders' equity

 

 

205,323 

 

 

191,098 

Total liabilities and shareholders' equity

 

$

508,217 

 

$

515,577 







1Represents debt of the variable interest entity, TRI Holdings, LLC, that is consolidated in accordance with ASC 810, Consolidation. Duluth Holdings Inc. is not the guarantor nor the obligor of this debt.

6

 


 



DULUTH HOLDING INC.

Consolidated Statements of Operations

(Unaudited)

(Amounts in thousands, except per share figures)





















 

 

 

 

 

 

 

 

 

 

 

 



 

Three Months Ended

 

Nine Months Ended



 

October 31, 2021

 

November 1, 2020

 

October 31, 2021

 

November 1, 2020

Net sales

 

$

145,277 

 

$

135,531 

 

$

427,823 

 

$

382,823 

Cost of goods sold (excluding depreciation and amortization)

 

 

61,627 

 

 

64,494 

 

 

196,204 

 

 

186,982 

Gross profit

 

 

83,650 

 

 

71,037 

 

 

231,619 

 

 

195,841 

Selling, general and administrative expenses

 

 

78,792 

 

 

68,189 

 

 

211,779 

 

 

202,175 

Operating income (loss)

 

 

4,858 

 

 

2,848 

 

 

19,840 

 

 

(6,334)

Interest expense

 

 

900 

 

 

1,643 

 

 

3,390 

 

 

4,771 

Other (loss) income, net

 

 

(265)

 

 

87 

 

 

(193)

 

 

(104)

Income (loss) before income taxes

 

 

3,693 

 

 

1,292 

 

 

16,257 

 

 

(11,209)

Income tax expense (benefit)

 

 

930 

 

 

393 

 

 

4,048 

 

 

(2,827)

Net income (loss)

 

 

2,763 

 

 

899 

 

 

12,209 

 

 

(8,382)

Less: Net loss attributable to noncontrolling interest

 

 

(43)

 

 

(41)

 

 

(134)

 

 

(128)

Net income (loss) attributable to controlling interest

 

$

2,806 

 

$

940 

 

$

12,343 

 

$

(8,254)

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

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average shares of common stock outstanding

 

 

32,649 

 

 

32,476 

 

 

32,605 

 

 

32,431 

Net income (loss) per share attributable to controlling interest

 

$

0.09 

 

$

0.03 

 

$

0.38 

 

$

(0.25)

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

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average shares and equivalents outstanding

 

 

32,761 

 

 

32,606 

 

 

32,825 

 

 

32,431 

Net income (loss) per share attributable to controlling interest

 

$

0.09 

 

$

0.03 

 

$

0.38 

 

$

(0.25)



7

 


 



DULUTH HOLDINGS INC.

Consolidated Statements of Cash Flows

(Unaudited)

(Amounts in thousands)













 

 

 

 

 

 



 

Nine Months Ended



 

October 31, 2021

 

November 1, 2020

Cash flows from operating activities:

 

 

 

 

 

 

Net income (loss)

 

$

12,209 

 

$

(8,382)

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

 

 

 

 

 

 

Depreciation and amortization

 

 

21,822 

 

 

21,209 

Stock based compensation

 

 

1,612 

 

 

1,263 

Deferred income taxes

 

 

(257)

 

 

3,463 

Loss on disposal of property and equipment

 

 

404 

 

 

304 

Changes in operating assets and liabilities:

 

 

 

 

 

 

Receivables

 

 

(2,863)

 

 

(64)

Income taxes receivable

 

 

(605)

 

 

(3,549)

Inventory

 

 

(16,026)

 

 

(65,554)

Prepaid expense & other current assets

 

 

(1,571)

 

 

1,154 

Software hosting implementation costs, net

 

 

(2,939)

 

 

Deferred catalog costs

 

 

379 

 

 

94 

Trade accounts payable

 

 

24,944 

 

 

21,424 

Income taxes payable

 

 

(7,579)

 

 

(3,427)

Accrued expenses and deferred rent obligations

 

 

4,117 

 

 

2,667 

Other assets

 

 

(918)

 

 

Noncash lease impacts

 

 

29 

 

 

784 

Net cash provided by (used in) operating activities

 

 

32,758 

 

 

(28,614)

Cash flows from investing activities:

 

 

 

 

 

 

Purchases of property and equipment

 

 

(9,108)

 

 

(11,059)

Capital contributions towards build-to-suit stores

 

 

 

 

(520)

Principal receipts from available-for-sale security

 

 

108 

 

 

96 

Proceeds from disposals

 

 

55 

 

 

Net cash used in investing activities

 

 

(8,945)

 

 

(11,483)

Cash flows from financing activities:

 

 

 

 

 

 

Proceeds from line of credit

 

 

5,000 

 

 

84,588 

Payments on line of credit

 

 

(5,000)

 

 

(60,894)

Proceeds from delayed draw term loan

 

 

 

 

32,500 

Payments on delayed draw term loan

 

 

(48,250)

 

 

(3,625)

Payments on TRI long term debt

 

 

(457)

 

 

(354)

Payments on finance lease obligations

 

 

(1,894)

 

 

(1,325)

Payments of tax withholding on vested restricted shares

 

 

(370)

 

 

(215)

Other

 

 

327 

 

 

(18)

Net cash (used in) provided by financing activities

 

 

(50,644)

 

 

50,657 

(Decrease) increase in cash, cash equivalents

 

 

(26,831)

 

 

10,560 

Cash, cash equivalents and restricted cash at beginning of period

 

 

47,221 

 

 

2,240 

Cash, cash equivalents and restricted cash at end of period

 

$

20,390 

 

$

12,800 

Supplemental disclosure of cash flow information:

 

 

 

 

 

 

Interest paid

 

$

3,328 

 

$

4,730 

Income taxes paid

 

$

12,585 

 

$

40 

Supplemental disclosure of non-cash information:

 

 

 

 

 

 

Unpaid liability to acquire property and equipment

 

$

2,518 

 

$

657 



















8

 


 





DULUTH HOLDINGS INC.

Reconciliation of Net Income (Loss) to EBITDA and EBITDA to Adjusted EBITDA

For the Fiscal Quarter Ended October 31, 2021

(Unaudited)

(Amounts in thousands)







 

 

 

 

 

 

 

 

 

 

 

 



 

Three Months Ended

 

Nine Months Ended



 

October 31, 2021

 

November 1, 2020

 

October 31, 2021

 

November 1, 2020

(in thousands)

 

 

 

 

 

 

 

 

 

 

 

 

Net income (loss)

 

$

2,763 

 

$

899 

 

$

12,209 

 

$

(8,382)

Depreciation and amortization

 

 

7,306 

 

 

7,917 

 

 

21,822 

 

 

21,209 

Amortization of internal-use software hosting

 

 

 

 

 

 

 

 

 

 

 

 

  subscription implementation costs

 

 

478 

 

 

 

 

1,252 

 

 

Interest expense

 

 

900 

 

 

1,643 

 

 

3,390 

 

 

4,771 

Amortization of build-to-suit operating leases
capital contribution

 

 

198 

 

 

199 

 

 

595 

 

 

596 

Income tax expense (benefit)

 

 

930 

 

 

393 

 

 

4,048 

 

 

(2,827)

EBITDA

 

$

12,575 

 

$

11,051 

 

$

43,316 

 

$

15,367 

Stock based compensation

 

 

605 

 

 

382 

 

 

1,612 

 

 

1,263 

Adjusted EBITDA

 

$

13,180 

 

$

11,433 

 

$

44,928 

 

$

16,630 







DULUTH HOLDINGS INC.

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

For the Fiscal Year Ended January 30, 2022

(Unaudited)

(Amounts in thousands)





 

 

 

 

 

 



 

Low

 

High

Forecasted

 

 

 

 

 

 

Net income

 

$

26,500 

 

$

28,100 

Depreciation and amortization

 

 

28,200 

 

 

28,200 

Amortization of internal-use software hosting subscription implementation costs

 

 

2,000 

 

 

2,000 

Interest expense

 

 

4,500 

 

 

4,400 

Amortization of build-to-suit operating leases capital contributions

 

 

800 

 

 

800 

Income tax expense

 

 

8,800 

 

 

9,300 

EBITDA

 

$

70,800 

 

$

72,800 

Stock based compensation

 

 

2,200 

 

 

2,200 

Adjusted EBITDA

 

$

73,000 

 

$

75,000 























































9