Second Quarter 2020 Highlights
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Second Quarter 2020 Highlights
Disclaimer
We are not making any representations or warranties, express or implied, with respect to the information (financial, business, legal or otherwise) contained in this presentation. No person has been authorized to give any information other than that
contained in this presentation.
Forward-Looking Statements
This presentation, as well as other written or oral communications made from time to time by us, may contain certain forward-looking statements. Forward-looking statements refer to our current expectations and projections relating to our financial
condition, results of operations, plans, objectives, strategies, future performance, and business. You can identify forward-looking statements by the fact that they do not relate strictly to historical or current facts. Forward-looking statements include
statements containing words such as ‘‘anticipate,’’ ‘‘assume,’’ ‘‘believe,’’ ‘‘can,’’ have,’’ ‘‘contemplate,’’ ‘‘continue,’’ ‘‘could,’’ ‘‘design,’’ ‘‘due,’’ ‘‘estimate,’’ ‘‘expect,’’ ‘‘forecast,’’ ‘‘goal,’’ ‘‘intend,’’ ‘‘likely,’’ ‘‘may,’’ ‘‘might,’’ ‘‘objective,’’ ‘‘plan,’’ ‘‘predict,’’
‘‘project,’’ ‘‘potential,’’ ‘‘seek,’’ ‘‘should,’’ ‘‘target,’’ “will,’’ ‘‘would,’’ and other words and terms of similar meaning in connection with any discussion of the timing or nature of future operational performance or other events. For example, all statements
made relating to growth strategies, estimated and projected costs, expenditures, and growth rates, plans and objectives for future operations, growth, or initiatives, or strategies are forward-looking statements.
All forward-looking statements are subject to risks and uncertainties that may cause actual results to differ materially from those that are expected. The risks and uncertainties that could cause actual results to differ materially from those expressed or
implied by these forward-looking statements include but are not limited to: (i) uncertainty regarding global economic conditions, particularly the uncertainty related to the duration and impact of the rapidly evolving COVID-19 pandemic, including its
impact on global economic conditions; (ii) our ability to maintain and strengthen our brand and generate and maintain ongoing demand for our products; (iii) our ability to successfully design, develop and market new products; (iv) our ability to
effectively manage our growth; (v) our ability to expand into additional consumer markets, and our success in doing so; (vi) the success of our international expansion plans; (vii) our ability to compete effectively in the outdoor and recreation market
and protect our brand; (viii) the level of customer spending for our products, which is sensitive to general economic conditions and other factors; (ix) problems with, or loss of, our third-party contract manufacturers and suppliers, or an inability to obtain
raw materials; (x) fluctuations in the cost and availability of raw materials, equipment, labor, and transportation and subsequent manufacturing delays or increased costs; (xi) our ability to accurately forecast demand for our products and our results of
operations; (xii) our relationships with our national, regional, and independent retail partners, who account for a significant portion of our sales; (xiii) the impact of natural disasters and failures of our information technology on our operations and the
operations of our manufacturing partners; (xiv) our ability to attract and retain skilled personnel and senior management and to maintain the continued efforts of our management and key employees; (xv) the impact of our indebtedness on our ability to
invest in the ongoing needs of our business; and (xvi) the other risks and uncertainties set forth under the caption “Risk Factors” and elsewhere in reports we file with the Securities and Exchange Commission (the “SEC”).
These forward-looking statements are made based upon detailed assumptions and reflect management’s current expectations and beliefs as of the date hereof. While we believe that these assumptions underlying the forward-looking statements are
reasonable, we caution that it is very difficult to predict the impact of known factors, and it is impossible for us to anticipate all factors that could affect actual results. Readers of this presentation should consider these factors in evaluating, and are
cautioned not to place undue reliance on, the forward-looking statements contained therein. YETI undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events, or
otherwise, except as required by law
Non-GAAP Financial Measures
We present Adjusted EBITDA, Adjusted Net Income and Adjusted Net Income per Diluted Share to help us describe our operating performance. We define Adjusted EBITDA as net income before interest expense, net, provision for income taxes and
depreciation and amortization, adjusted for the impact of certain other items, including: non-cash stock-based compensation expense, asset impairment charges, and loss on modification and extinguishment of debt, including accelerated amortization
of deferred financing fees resulting from the early prepayment of debt. We define Adjusted Net Income as net income, adjusted for non-cash stock-based compensation expense, asset impairment charges, accelerated amortization of deferred
financing fees and loss on modification and extinguishment of debt, including accelerated amortization of deferred financing fees resulting from the early prepayment of debt. Adjusted EBITDA is not defined by accounting principles generally accepted
in the United States, or GAAP, and may not be comparable to similarly titled measures reported by other entities. We use Adjusted EBITDA, Adjusted Net Income and Adjusted Net Income per Diluted Share as a measure of profitability. Adjusted
EBITDA, Adjusted Net Income and Adjusted Net Income per Diluted Share have limitations as a profitability measure in that it does not include the interest expense on our debts, our provisions for income taxes, and the effect of our expenditures for
capital assets and certain intangible assets. Our presentation of Adjusted EBITDA, Adjusted Net Income and Adjusted Net Income per Diluted Share should not be construed as a basis to infer that our future results will be unaffected by extraordinary,
unusual or non-recurring items. See Appendix for reconciliation of GAAP to Non-GAAP financial measures and see investors.yeti.com for recast 2019 Non-GAAP financial results, as discussed below.
Revised Non-GAAP Financial Measures Beginning in Fiscal 2020
As previously disclosed, following YETI’s initial full year as a public company and beginning with the first quarter of Fiscal 2020, YETI revised its definitions of certain non-GAAP financial measures by eliminating various adjustments. These revisions
are intended to align with how management will evaluate the performance of the business going forward. Specifically, YETI will no longer include adjustments for investments in new retail locations and international market expansion, transition to the
ongoing senior management team, and transition to a public company.
YETI has recast its historical 2019 non-GAAP financial measures to conform to the revised definitions on its investor relations website at investors.yeti.com.
2
1
EXPANDING OUR CUSTOMER BASE
Debuted new digital content including The Midnight Hour and Tips from the Pit
New partnerships including Major League Baseball, surfer Mick Fanning, and Crew Nation
2 INTRODUCE NEW PRODUCTS
Q2 2020 introductions: Roadie 24 hard cooler, Rambler Elements, and Daytrip Lunch Box
Launched Navy color in coolers and bags
3 ACCELERATE DTC
$133.0MM Q2 2020 Sales / +61% YoY Growth / 54% Channel Mix
YETI.com registered triple-digit year-over-year growth each month during the quarter
4 EXPAND INTERNATIONALLY
Strong E-Commerce growth and expansion across international markets
Retail partners established in nine countries YTD in Europe and the U.K.
3
LTM Q2 2020 Net Sales KEY FINANCIAL METRICS
$948MM $187MM
LTM Q2 2020
LTM Q2 2020 Net Sales
Adjusted EBITDA2
47% 20%
Coolers & LTM Q2 2020
2013 – 2019 Net Sales CAGR
Adjusted EBITDA2 Margin
Equipment LTM Q2 2020
41%
$948MM
Drinkware KEY BUSINESS METRICS
57%
7 >95%
Other New Products Introduced
YETI Owner Referral Rate3
3% 1H 2020
~57MM 2.5MM
LTM Q2 Traffic to
YETI Social Media Followers5
YETI websites4
1 Other includes apparel, bottle openers, ice substitutes, and other accessories. 4 Represents visits to YETI.com and YETIcustomshop.com.
2 Please refer to page 19 for a reconciliation of Adjusted EBITDA to net income. 5 Includes Facebook and Instagram as of July 27, 2020.
3 Per January 2019 YETI Owner Study.
4
5
2006
FISHING HUNTING
2020
BEACH SNOW CAMPFIRE AT PLAY AT HOME AT WORK
• YETI’s Customer Base Has Expanded as Brand Awareness Has Spread Nationally and Internationally
• New Products and Marketing Driving Attractive Shift in Demographics
12 129 64% 9% 33%
Communities Ambassadors 2019 % Under 451 2015 % Female1 2019 % Female1
1 Per October 2015 and January 2019 YETI Owner Study.
6
LARGE AND GROWING DOMESTIC UNAIDED BRAND
SOCIAL MEDIA PRESENCE AWARENESS BY REGION2
Followers1
2019 2015
4.6MM
20%
4.5MM 18%
3.3MM 14%
13%
11% 11%
10%
3.1MM 9%
8%
7%
1.5MM 4%
3%
2%
616K 1% 1% 1% 1%
0%
488K East South West South East North West North South Pacific 4 New Mountain4 Mid Atlantic4
Central 3 Central 3 Central 4 Central 4 Atlantic 3 England4
426K
342K
BROAD EARNED MEDIA COVERAGE
1 Instagram followers as of July 27, 2020. 3 Heritage market region.
2 Per YETI’s January 2019 Brand Tracking Study. 4 Non-heritage market region.
7
1H 2H 1H 2H 1H 2H 1H
PRE 2016
2017 2017 2018 2018 2019 2019 2020
Hard
Cooler Sherpa™, Roadie®, River YETI
Tundra®, YETI Tank™ Tundra® 210 Limited Edition Limited Edition Limited Edition Haul™ Silo® Reef Blue Green V Series™ Roadie® 24 Navy
Soft
Cooler Hopper® Field Tan Hopper Flip® 8 Daytrip® Hopper® M30 Daytrip®
Hopper BackFlip™
Coolers & Equipment
One Colorway Hopper Flip® Hopper® Two & Flip® 18 Charcoal Lunch Bag Lunch Box
Bags
Camino® Panga® Tocayo™ Crossroads™ Crossroads™
Panga® Duffel Carryalla Backpack Backpack Backpack Tote Bag
Cargo
LoadOut® Bucket LoadOut GoBox™
Outdoor
Living
Boomer™ Lowlands™ Trailhead™ Trailhead™
and Pet Hondo® Base
8 Blanket Dog Bed Boomer™ 4
amp Chair Camp Chair
Drinkware
Rambler®
Colored Navy Stackable 24 Oz. Canyon Jr. Kids 12 Oz. Stackable Elements 26 Oz. New Colster
Tumbler Colster® Lowball Bottle Drinkware Jug Mug Wine Tumbler Pint Mug Red Bottle Bottle Mug Collection Stackable Sizes
Other
Cooler Cuts Women’s Bait Shop Spring Badge Fishing Club
Shirts / Hats YETI ICE Brick Hoodie Howler
Tank T-Shirt T-Shirt Rope Hat
INNOVATION CREATES REASON TO BUY CUSTOMIZATION, COLORWAYS, AND LIMITED
AND INCREASES ADDRESSABLE EDITION OFFERINGS ENCOURAGE NEW AND
MARKETS REPEAT PURCHASES
8
9
HIGHLIGHTS STRATEGIC CHANNEL MIX CREATES STABLE, HIGH MARGIN PROFILE
• Diverse omni-channel business
2015 LTM Q2 2020
• Fast growing DTC business
Wholesale2 Wholesale 52%
• Diverse group of U.S. wholesale partners with 92%
nationwide coverage; only one account exceeds $469MM $948MM
10% of gross sales1
• Successful 2017-2019 entries into Australia, DTC DTC 48%
8%
NET SALES BY CHANNEL
Japan, Europe, U.K., and New Zealand
NATIONAL AND INDEPENDENT
REGIONAL SPECIALTY DIRECT-TO-CONSUMER INTERNATIONAL
~4,700 ACCOUNTS3
Entered Entered
2017 2017
Entered Entered
2018 2019
Entered Entered
2019 2019
1 As a percent of 2019 gross sales.
2 Wholesale includes $8.3 million of sales to Rambler On.
10 3 As of December 28, 2019.YETI.COM RETAIL
CORPORATE SALES YETI AUTHORIZED
11GROWING GLOBAL SALES EXPANSION STRATEGY
• Capitalize on global digital, e-commerce, and mobile trends
DTC & Wholesale DTC & Wholesale
• Enter international markets via DTC and select wholesale
• Push global brand via Ambassador, influencer, and event
marketing
59%
41%
Wholesale DTC & Wholesale 28% 28%
4%
12 1 Represents last fiscal year percentage of sales from international markets per public company filings as of July 27, 2020. YETI international represents percentage of 2019 net sales.GLOBAL INFRASTRUCTURE GLOBAL FOOTPRINT
• Leading third-party manufacturing and logistics partners ll
l
l
ll
ll
•
ll
Optimizing quality, delivery and best cost
l
l
l l
• Developed key manufacturing partners in 2017, 2018 and 2019
• Soft coolers and bag supply chain transitioned out of China 1218818_1.WOR [NY008WXC]
l Coolers & Equipment l Drinkware Distribution Centers
• Completed “should cost” analysis and supplier negotiations
• Master Supply Agreements in place with key suppliers
• Established 3PL facilities in Dallas, Salt Lake City, Australia,
Canada, and the Netherlands
• Opened Second Customization Facility (Third-party
Manufacturing Partnership)
1314
NET SALES GROSS PROFIT
Gross Profit % Margin
$948 $512
$914 $475
$779 $383
52% 54%
49%
2018 2019 LTM Q2 2020 2018 2019 LTM Q2 2020
ADJUSTED EBITDA1 CAPITAL EXPENDITURES
Adjusted EBITDA 1 % Margin
Capital Expenditures % of Net Sales
$187
$172
$149 $32
$21 $22
3% 4%
2%
19% 19% 20%
2018 2019 LTM Q2 2020 2018 2019 LTM Q2 2020
Note: $ in millions.
1 Please refer to page 19 for a reconciliation of Adjusted EBITDA to net income.
15NET SALES
$247
$232
Q2 2019 Q2 2020
CATEGORY NET SALES GROWTH
Coolers &
Drinkware
Equipment
$129 $117 $114
$109
Q2 2019 Q2 2020 Q2 2019 Q2 2020
CHANNEL NET SALES GROWTH
Wholesale Direct-to-Consumer
$133
$149
$114
$82
Q2 2019 Q2 2020 Q2 2019 Q2 2020
16 Note: $ in millions.GROSS PROFIT ADJUSTED OPERATING INCOME1
Gross Profit $ / % Margin Adjusted Operating Income $ / % Margin
$138 / 56%
$116 / 50% $49 / 20%
$39 / 17%
Q2 2019 Q2 2020 Q2 2019 Q2 2020
ADJUSTED EBITDA1 ADJUSTED NET INCOME PER DILUTED SHARE1
Adjusted EBITDA1 $ / % Margin
$58 / 23% $0.41
$47 / 20% $0.30
Q2 2019 Q2 2020 Q2 2019 Q2 2020
Note: $ in millions.
1 Please refer to page 20 for a reconciliation of operating income to adjusted operating income, net income to adjusted net income, and net income to adjusted EBITDA.
1718
1 1 1
As Reported As Recast As Recast
2018 2019 YTD Q2 2019 YTD Q2 2020 LTM Q2 2020
Net Income $57.8 $50.4 $24.4 $42.0 $68.0
Interest Expense 31.3 21.8 11.8 5.8 15.8
Income Tax Expense 11.9 16.8 7.7 14.0 23.1
2 Depreciation and Amortization Expense 24.8 29.0 13.8 15.4 30.5
3,4 Non-Cash Stock-Based Compensation Expense 13.2 52.3 8.3 4.0 48.1
3 Long-lived Asset Impairment 1.2 0.6 0.1 0.6 1.2
5 Loss on Modification and Extinguishment of Debt 1.3 0.6 — — 0.6
1,3,6 Investments in New Retail Locations and International Market Expansion 0.8 — — — —
1,3,7 Transition to Cortec Majority Ownership 0.8 — — — —
1,3,8 Transition to the Ongoing Senior Management Team 1.8 — — — —
1,3,9 Transition to a Public Company 4.2 — — — —
Adjusted EBITDA $149.0 $171.6 $66.1 $81.8 $187.3
1 Beginning with the first quarter of Fiscal 2020, YETI revised its definitions of certain non-GAAP 5 Represents the loss on modification and extinguishment related to the amendment of our
financial measures by eliminating various adjustments, specifically investments in new retail credit facility in Fiscal 2019 and the loss on extinguishment of debt and accelerated
locations and international market expansion, transition to the ongoing senior management team, amortization of deferred financing fees resulting from the voluntary paydown and
and transition to a public company. The Fiscal 2019 non-GAAP financial results have been recast to prepayments of the term loans under our credit facility in Fiscal 2018.
conform to these revised definitions.
6 Represents retail store pre-opening expenses and costs for expansion into new
international markets.
2 Depreciation and amortization expenses are reported in SG&A expenses and cost of goods sold.
7 Represents management service fees paid to Cortec, our majority stockholder. The
3 These costs are reported in SG&A expenses. management services agreement with Cortec was terminated immediately following the
completion of our initial public offering in October 2018.
4 Includes $40.7 million of one-time non-cash stock-based compensation expense related to pre-IPO 8 Represents severance, recruiting, and relocation costs related to the transition to our ongoing
restricted stock units (“PRSUs”) that vested and were fully recognized during the three and twelve senior management team.
months ended December 28, 2019. The vesting of the PRSUs was triggered when Cortec ceased to own
more than 35% of the voting power of our outstanding common stock following the closing of our 9 Represents fees and expenses in connection with our transition to a public company,
November 2019 secondary offering. including consulting fees, recruiting fees, salaries, and travel costs related to members of our
Board of Directors, fees associated with Sarbanes-Oxley Act compliance, incremental audit
and legal fees associated with being a public company.
Note: $ in millions.
19 1 Amounts may not recalculate due to rounding.As Recast
Q2 2019 Q2 2020
1 These costs are reported in SG&A expenses.
Operating Income $35.0 $46.5
Non-Cash Stock-Based Compensation Expense 4.3 2.2 Represents the tax impact of adjustments calculated at an
1 2
expected statutory tax rate of 24.5% and 24.5% for the three
1 Long-lived Asset Impairment 0.0 0.6 months ended March 28, 2020 and March 30, 2019,
respectively.
Adjusted Operating Income $39.3 $49.3
3 Depreciation and amortization expenses are reported in
SG&A expenses and cost of goods sold.
Net Income $22.2 $33.5
1 Non-Cash Stock-Based Compensation Expense 4.3 2.2
1 Long-lived Asset Impairment 0.0 0.6
2 Tax Impact of Adjusting Items (1.1) (0.7)
Adjusted Net Income $25.5 $35.6
Net Income $22.2 $33.5
Interest Expense 5.7 2.7
Income Tax Expense 7.1 11.3
3 Depreciation and Amortization 7.3 7.7
1 Non-Cash Stock-Based Compensation Expense 4.3 2.2
1 Long-lived Asset Impairment 0.0 0.6
Adjusted EBITDA $46.6 $57.9
Weighted Average Common Shares Outstanding - Diluted 86.2 87.5
Adjusted Net Income per Diluted Share $0.30 $0.41
Note: $ in millions.
20 1 Amounts may not recalculate due to rounding.You can also read
