DIGITALLY NATIVE ATHLETIC WEAR BRAND SEP 2018 - IPO Edge
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® DIGITALLY NATIVE ATHLETIC WEAR BRAND SEP - 2018
LEGAL DISCLAIMER
T h i s C o n f i d e n t i a l I n v e s t o r P r e s e n t a t i o n h a s b e e n p r e p a r e d f o r d i s c u s s i o n p u r p o s e s o n l y. I t i s b e i n g d e l i v e r e d o n a c o n f i d e n t i a l b a s i s t o s p e c i f i e d p a r t i e s
solely to assist them in deciding whether to proceed with their investigation of HYLE TE, Inc. (“ HYLE TE” or the “Company ” ) in accordance with procedures
e s t a b l i s h e d b y t h e C o m p a n y. T h i s I n v e s t o r P r e s e n t a t i o n d o e s n o t p u r p o r t t o c o n t a i n a l l o f t h e i n f o r m a t i o n t h a t m a y b e r e q u i r e d o r r e l e v a n t t o a r e c i p i e n t ’ s
evaluation of any transac tion and recipients will be responsible for conduc ting their own investigations and analysis.
The distribution and use by each recipient of the information contained herein and any other information provided may not be distributed, reproduced or
used without the express consent of the Company or for any purpose other than the evaluation of the transac tion by the person reviewing this
Investor Presentation.
N e i t h e r t h e C o m p a n y o r a n y o f i t s a f f i l i a t e s o r r e p r e s e n t a t i v e s m a ke s a n y r e p r e s e n t a t i o n , w a r r a n t y o r g u a r a n t y o f a n y k i n d , e x p r e s s o r i m p l i e d , a s t o t h e
a c c u r a c y, c o m p l e t e n e s s o r r e a s o n a b l e n e s s o f t h e i n f o r m a t i o n c o n t a i n e d h e r e i n o r a n y o t h e r w r i t t e n o r o r a l c o m m u n i c a t i o n t r a n s m i t t e d o r m a d e a v a i l a b l e t o
the recipient. The Company and its af f iliates and representatives expressly disclaim any and all liabilit y based on or arising from, in whole or in par t, such
information, errors therein or omissions therefrom.
In addition, this Investor Presentation includes cer tain projec tions and for ward-looking statements provided by the Company with respec t to the
a n t i c i p a t e d f u t u r e p e r f o r m a n c e o f t h e C o m p a n y. S u c h p r o j e c t i o n s a n d f o r w a r d - l o o k i n g s t a t e m e n t s r e f l e c t v a r i o u s a s s u m p t i o n s o f m a n a g e m e n t c o n c e r n i n g
t h e f u t u r e p e r f o r m a n c e o f t h e C o m p a n y, a n d a r e s u b j e c t t o s i g n i f i c a n t b u s i n e s s , e c o n o m i c a n d c o m p e t i t i v e u n c e r t a i n t i e s a n d c o n t i n g e n c i e s , m a n y o f
w h i c h a r e b e y o n d t h e c o n t r o l o f t h e C o m p a n y. A c c o r d i n g l y, t h e r e c a n b e n o a s s u r a n c e t h a t s u c h p r o j e c t i o n s o r f o r w a r d - l o o k i n g s t a t e m e n t s w i l l b e r e a l i z e d .
Ac tual results may var y from anticipated results and such variations may be material. No representations or warranties are made as to the accurac y or
reasonableness of such assumptions or the projec tions or for ward-looking statements based thereon.
Onl y those represent ations and warranties that are made in a def initi ve writ ten agreement relating to a trans ac tion, when and if executed, and subjec t to
any limit ations and res tr ic tions as may be specif ied in such def initi ve agreement , shall have any legal ef fec t . Each recipient should make an independent
assessment of the merits of pursuing a transac tion and should consult its own professional advisors. This Investor Presentation should not be considered
t o b e a n o f f e r t o b u y t h e s e c u r i t i e s o f t h e C o m p a n y d e s c r i b e d h e r e i n . A n y s u c h o f f e r, i f a n d w h e n m a d e , w i l l b e i n w r i t i n g .
The deliver y of this Inves tor Presentation should not create any implication that there has been no change in the business and af fairs of the Company since
s u c h d a t e . N e i t h e r t h e C o m p a n y n o r i t s a f f i l i a t e s o r r e p r e s e n t a t i v e s u n d e r t a ke s a n y o b l i g a t i o n t o u p d a t e a n y o f t h e i n f o r m a t i o n c o n t a i n e d h e r e i n . T h e
Company is free to conduc t the process for the transac tion as it determines in its sole discretion (including without limitation, ceasing to proceed with any
t r a n s a c t i o n , t e r m i n a t i n g f u r t h e r p a r t i c i p a t i o n i n t h e p r o c e s s b y a n y p a r t y, n e g o t i a t i n g w i t h p r o s p e c t i v e b u y e r s a n d e n t e r i n g i n t o a n a g r e e m e n t w i t h r e s p e c t
t o a t r a n s a c t i o n w i t h o u t p r i o r n o t i c e t o y o u o r a n y o t h e r p e r s o n) a n d a n y p r o c e d u r e s r e l a t i n g t o s u c h t r a n s a c t i o n m a y b e c h a n g e d a t a n y t i m e w i t h o u t p r i o r
notice to you or any other person.
1
OVERVIEW
HY LE T E , I n c . i s d ig it a lly n a t ive, a thletic wear
co m p a n y e n g a g ed in t h e d es ig n , development,
m a nu f a c tu r i n g a n d d is t rib u t io n of premium
pe r f or m a n c e a p p a rel, fo o t wea r, and gear f or men
a nd w om e n , i nc lu d in g it ems s u c h as shorts, pants,
t o ps , j a c k e ts , s h o es a n d b a c kp a c ks. HYLETE designs
pr o d u c ts w i th p ro p riet a ry fa b ric s and/or innovative
f e a t u r e s d i f f e ren t ia t in g t h em fr om their
co m p e t i ti on .
HYLE T E f oc u s es it s p r o d u c t , c on t ent, and initiatives
o n it s c om m u n it y wh o live a fit n ess- base lifestyle.
2
KEY HIGHLIGHTS
all data as of July 31, 2018 unless other wise indicated
• Es ta b l i s h e d in 2012
• G e n e r a t e d r even u es o f $ 10.2M during the last
1 2 m on th s
• Co n d u c te d six s ep a ra t e c r o wd funding
cam p a i gn s ; r a is in g mo r e t h a n
$ 8 m i l l i on f r o m o ver 3,800 in vestors
• A cq u i r e d ov er 160k c u s t o mer s
• A t t r a c te d ov er 300k fo llo wers on Social Media
• P r o j e c te d E BIT D A b rea k-even a t $ 1 3 M
3
REVENUE BY YEAR
T T M p e r i o d s e n d i n g o n J u l y 31, 2018
$ 10.2M
R $ 8.1M
C AG
%
6 .1 $ 6.1M
5
$ 5.2M
$ 3.1M
$ 1.1M
2013 2014 2015 2016 2017 2018
4
GROSS MARGINS BY YEAR
T TM periods ending on June 30th
%
= 5 2.2
RGIN
O S S MA
GE GR
AVERA 54% 54%
52% 52%
48%
2014 2015 2016 2017 2018
5
HISTORICAL SHARE PRICE
p e r y e a r b a s e d u p o n co m p l e te d e q u i t y o f f e r i n g s
$ 1.25
$ 1.00
GR
C A
%
45.8
$ 0.51 $ 0.51
$ 0.31
$ 0.19
2013 2014 2015 2016 2017 2018
6
CAPITALIZATION OVERVIEW
Options Ser ies A Preferred Options Ser ies A Preferred
2.4M 12.4M 43 63
Warrants Class A Common
9 14
Warrants
2.9M
Class B
Non-Voting TYPE OF SHARE NUMBER OF HOLDERS
Common
3.5M
291 . M
(f ul l y d i l u te d s h a re s)
3 961,
i n v e s to r s
Class A Common
Class B Non-Voting Common
7.9M
3,832
7
DEBT FINANCING
a s o f J u n e 15 , 2018
TYPE AMOUNT APR MATURITY DATE
M e zzan in e
$ 4 ,2 7 5 ,0 0 0 1 2 .5 % J un-19
(Sen io r )
B r i d g e No t es $ 9 5 0 ,0 0 0 1 8 .0 % J ul -20
Bonds $ 4 0 0 ,0 0 0 1 2 .0 % J ul -21
TOTAL $ 5,625,000 13.5%
8
MARKET OPPORTUNITY
( TA M / S A M )
97+
BILLION ($)
32+
BILLION ($)
To t a l Av a i l a b l e S e r v i ce a b l e Av a i la b l e
Ma r ke t Ma r ke t
TAM SAM
Th e T ot a l Availa b le Ma r ket ( T AM) for athletic The Serv i c e ab l e A v ai l ab l e Mar k e t (S A M)
w e a r (w h i c h in c lu d es ap p a r el and footwear) totals 22. 5 m i l l i on and i s c om p r i se d of
is a $97 b i llio n a year in d u s t r y in the United individual s who p ar t i c i p at e f r e q ue nt l y i n
Sta te s . [1] T h e g ym in d u s t r y p laces the number cross- trai ni ng and hi gh-i nt e nsi t y i nt e r v al
o f p e o p l e wh o en g a g e in fit n ess in the U.S. at training. [ 3] T ak i ng t hi s c or e m ar k e t and
6 6 . 5 m i l l i on . [2] T a kin g t h e T AM and dividing by then mul t i p l y i ng b y t he av e r age y e ar l y
t h e 66. 5 m i llio n , t h e aver ag e y early spend per spend pe r p e r son y i e l d s a S A M of $32. 8
in d i v i d u a l is $1,459. billion p e r y e ar .
[1] M o r g a n S t a n l e y h t t p s : //m o r g a n s t a n l e y. c o m / i d e a s /g l o b a l - a t h l e t i c- w e a r- g e a r e d - f o r- g r o w t h
References: [ 2 ] I H R S A h t t p: // w w w. i h r s a . o r g /a b o u t- t h e - i n d u s t r y
9
[ 3 ] 2 017 S F I A – S p o r t s , F i t n e s s , a n d L e i s u r e A c t i v i t i e s To t a l Pa r t i c i p a t i o n R e p o r tSERVICEABLE OBTAINABLE MARKET
(S O M )
x = 1+
BILLION ($)
1 M
$ 1 K
H Y L E T E ’s s t r at eg y is c en t er ed in f ocusing on a smaller, passionate cust om e r b ase wi t hi n i t s
2 2 m i l l i on p o t en t ial u s er s . T h e company engages their customers to b e c om e i nv e st or s or
”i n v e s t o m er s ” b y a c t ively p a r ticipating in ownership in the fitness l i f e st y l e b r and t he y hav e
co m e t o t r u s t a n d wit h wh ic h they identif y.
I n v e s t o r s r ec eive exc lu s ive in vestor perks to further incentivize thei r p ur c hase s. T he se p e r k s
in c l u d e 50% o ff a ll r eg u la r p r i ced f ootwear, gear, and apparel; f ree gr ound shi p p i ng; and
ex c l u s i v e i nves t o r p r ic in g o n all HYLETE project, pre- order, and clear anc e l oc k e r i t e m s.
1 m i l l i o n p l u s i n d i v i d u a l s w h o p u r c h a s e o n a v e r a g e $1k p e r y e a r o f a t hlet ic wea r (a ppa rel a nd
SOM calculation f o o tw e ar) , f i t n e s s l i f e s t y l e w e a r ( d e n i m , c h i n o s , p o l o s , d r e s s s h i r t s ) , ba gs/ba ckpa cks, 10
and ac c e s s o r i e s .High
REVENUE FORECAST
( p o s t I P O)
Median
$ 93M
• H
Y L ET E’ s gr owt h st r at e gy t ar ge t s a
YO Y ne t r e v e nue i nc r e ase b e t we e n
3 0 and 50% . T he c om p any f oc use s
on ge ne r at i ng 60% + of i t s r e v e nue s
from c ur r e nt c ust om e r s v i a an
in c r e ase d p r od uc t of f e r i ng and
upd at i ng i t s m ost p op ul ar st y l e s.
• H
Y L ET E’ s ne w c ust om e r ac q ui si t i on
$ 62M is p r e d i c at e d up on l e v e r agi ng
its “i nv e st om e r s” f or p osi t i v e
$ 46M en d or se m e nt and l ong t e r m gr owt h.
$ 41M
• T
he c om p any has t ar ge t e d a 10%
$ 35M net i nc om e l e v e l p e r y e ar b e gi nni ng
$ 27M $ 27M
in 2019.
$ 21M
$ 18M
$ 16M
2019 2020 2021 2022 2023
11MANAGEMENT TEAM
Ron L. Wilson, II Matthew Paulson Joseph Johnson
C o -f o u n d er an d CE O, Bo ar d Co- founder and Business CFO
Member Developer, Board Member
Cor p orate Cont roller at
F ounde d 18 0 s , Kel y sus , and Co -founde d Xt reme Sp onge. prA na L i v ing (Subsidiar y of
Jaco C lot hing. G re w 18 0 s to F or mer Dire c tor of S ale s and Columbia Sp or t s Comp any).
over $5 0 million in s ale s; Mar ke t ing for Jaco C lot hing CF O at Kelomar Inc . B S in
achie v ing a rank ing of numb er BS , Mar r iot t S chool of F inance, MB A f rom Nat ional
9 on Inc . Magazine ’s 5 0 0 fas te s t Management , BY U; MB A f rom Uni ver si t y. M A F M f rom
g row ing comp anie s . Er ns t & S an Diego St ate Uni ver si t y. Keller G radua te S chool of
Young Ent repreneur of t he Year Management . CPA , CM A .
Na t ional F inalis t and an SF I A
“ Top 2 5 Leader s in Sp or t ing
G oo ds ”. BS in Indus t r ial and
Sy s tems Eng ine er ing , V ir g inia
Te ch; MB A , T he W har ton S chool,
Uni ver si t y of Penns y l vania. 12MANAGEMENT TEAM
K ate Nowl an Scot t Kennerly
V P of B rand E x p er ience V P of Te chnolog y
Co -founde d GR ACE DBYGR I T F or mer Dire c tor
and acquire d over 2 5 ,0 0 0 of Te chnolog y and
cus tomer s . F inalis t for E- Commerce at X-1 Audio.
2016 S an Diego Woman of Sp e cialize d in f ull - c ycle
t he Year and F inalis t for e - commerce integ rat ion &
2018 Top B usine s s Leader s busine s s au toma t ion.
Under 4 0 for SDB J . B A
S ociolog y and P s ycholog y,
UM A S S A mher s t .
Pe te D irk s ing Jamie Wardlow
V P of Produc t V P of Mar ke t ing
Dire c tor of Produc t at X-1 E- commerce Manager a t
Audio and Jaco C lot hing. Ni xon Watche s and Jaco
B A f rom t he Uni ver si t y of C lot hing. B S in Mar ke t ing ,
C ali for nia , S an Diego. S an Diego St ate Uni ver si t y.
13BOARD OF DIRECTORS
n o n - m a n a ge m e n t
Kev in Park Darren Yager
F ounder of SimplePi tch Vent ure s . O ne of his COO. & Co - F ounder of E x pre s s Loc at ions f rom
pr imar y focus e s is on e - commerce app arel 20 05 -2017. A s a founding ow ner of t he comp any,
brands , w here he is an ear l y inve s tor and ad v is or Dar ren over s aw 13 0 0 + employe e s , 4 di v isions ,
in Elo quii , B uck Mas on , and Jaanuu. O ver t he p as t and 26 reg ions . E x pre s s Loc at ions achie ve d
si x year s , he has als o s er ve d as inter im CEO, COO $10 0 million in s ale s in 2016 and was on Inc .
and CF O a t his p or t folio comp anie s , including 5 0 0 0 ’s Fas te s t G row ing Pr i vate Comp anie s 4
Per ver s e Sung las s e s , Mob ov ida , D reamD r y, and year s s t raig ht (2014 , 2015 , 2016 & 2017 ). Pr ior to
Hopk ins G ol f. Pr ior to founding SimplePi tch , Ke v in E x pre s s Loc at ions , Dar ren was E xe cu t i ve Dire c tor
spent 5 year s in pr i vate e qui t y and was t he of S ale s for We s ter n W irele s s . Up unt il 20 05 ,
Co - F ounder & Pre sident of Lour us , an e duc at ion Dar ren succe s s f ull y le d b ot h t he we s ter n reg ion
s er v ice s comp any in Korea. He g raduate d f rom and subs e quent l y t he nat ional indire c t s ale s
Yale Uni ver si t y w here he was a var si t y tennis channel for t he comp any.
player and re cei ve d his MB A f rom St anford. He
was als o a F ulbr ig ht S cholar and re cei ve d his
CFA de sig na t ion.
Jim C accavo
F ounder and Manag ing G eneral Par t ner at Ste elpoint C api t al Par t ner s . Jim has manage d
t rans ac t ions in consumer pro duc t s , re t ail, app arel, food and be verage, nu t raceu t ic al and
supplement s , s of t ware and communic at ions te chnolog y. Pr ior to for ming Ste elp oint , Jim was t he
Manag ing Dire c tor of Mo ore C api t al Management ’s Pr i vate Equi t y G roup. B e fore joining Moore in
19 9 9, he was pre sident and CEO of T icke t s .com. From 19 8 8 to 19 9 6 , Jim was a co -founder and s enior
e xe cu t i ve of Sulli van Communic a t ions , helping to build i t into a leading g raphic ar t s comp any. Jim
began his c are er in f inance at Mer r ill Ly nch and G T E Cor porat ion. Jim holds a B . S . in Economic s and
F inance f rom t he Uni ver si t y of S cranton.
14CONTACT
Scot t A . Biddick
Inve s tor Rela t ions , Manag ing Dire c tor
F ir s t A p e x Inter na t ional
admin @ f ir s t ap e x inter na t ional.com
( 310) 79 6 - 9 018
619 S . Vulc an Ave. Sui te 20 9
Encini t as , C A 92024
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