Business Wire | Nov 11, 2021 06:00AM EST

YETI Reports Third Quarter 2021 Results

Nov. 11, 2021

AUSTIN, Texas--(BUSINESS WIRE)--Nov. 11, 2021--YETI Holdings, Inc. ("YETI") (NYSE: YETI) today announced its financial results for the third quarter ended October 2, 2021.

YETI reports its financial performance in accordance with accounting principles generally accepted in the United States of America ("GAAP") and as adjusted on a non-GAAP basis. Please see "Non-GAAP Financial Measures," and "Reconciliation of GAAP to Non-GAAP Financial Information" below for additional information and reconciliations of the non-GAAP financial measures to the most comparable GAAP financial measures.

Matt Reintjes, President and Chief Executive Officer, commented, "YETI's third quarter results continue to reflect robust demand for our brand. We delivered net sales growth of 23% on top of an exceptional 29% growth in the prior year's period, powered by our innovative product portfolio with balanced performance across our channels and categories. Profitability remained strong amidst accelerating and wide-spread inflationary pressures, supporting better-than-expected earnings per share growth for the period."

Mr. Reintjes concluded, "We are focused on building on the strong momentum in our business through the holidays and well into the future. While we are not immune to the confluence of supply chain disruptions and cost pressures that are pervasive in the market, our team's ongoing execution has supported our ability to once again raise both our top and bottom line outlooks for the year. As we continue to move forward in this challenging environment, we remain highly committed to both actions and continued investments that will position YETI for both near- and long-term sustainable growth."

For the Three Months Ended October 2, 2021

Net sales increased 23% to $362.6 million, compared to $294.6 million during the same period last year.

* Direct-to-consumer ("DTC") channel net sales increased 31% to $197.1 million, compared to $150.4 million in the prior year quarter, driven by strong performance in both Drinkware and Coolers & Equipment. The DTC channel grew to 54% of net sales, compared to 51% in the prior year period.

* Wholesale channel net sales increased 15% to $165.5 million, compared to $144.2 million in the same period last year, driven by both Drinkware and Coolers & Equipment.

* Drinkware net sales increased 24% to $205.0 million, compared to $165.9 million in the prior year quarter, primarily driven by the continued expansion of our Drinkware product offerings, including the introduction of new colorways and sizes, and strong demand for customization.

* Coolers & Equipment net sales increased 20% to $149.0 million, compared to $124.2 million in the same period last year, driven by strong performance in bags, outdoor living products, soft coolers, and hard coolers.

Gross profit increased 19% to $207.0 million, or 57.1% of net sales, compared to $174.0 million, or 59.1% of net sales, in the third quarter of 2020. The 200 basis point decrease in gross margin was primarily driven by higher inbound freight rates and the unfavorable impact of the non-renewal of the Global System of Preferences ("GSP") program on import duties, partially offset by product cost improvements and all other impacts.

Selling, general, and administrative ("SG&A") expenses increased 33% to $138.3 million, compared to $103.9 million in the third quarter of 2020. The 2020 period included the benefit of cost reduction initiatives implemented in response to the uncertainties of COVID-19. As a percentage of net sales, SG&A expenses increased 280 basis points to 38.1% from 35.3% in the prior year period, primarily driven by higher marketing expenses.

Operating income decreased 2% to $68.7 million, or 19.0% of net sales, compared to $70.1 million, or 23.8% of net sales, during the prior year quarter due to the aforementioned lower spending levels in 2020.

Adjusted operating income increased 3% to $74.2 million, or 20.5% of net sales, compared to $72.4 million, or 24.6% of net sales, during the same period last year due to the aforementioned lower spending levels in 2020.

Net income increased 3% to $53.0 million, or 14.6% of net sales, compared to $51.4 million, or 17.5% of net sales, in the prior year quarter; Net income per diluted share increased 3% to $0.60, compared to $0.58 per diluted share in the prior year quarter.

Adjusted net income increased 7% to $57.1 million, or 15.7% of net sales, compared to $53.5 million, or 18.2% of net sales, in the prior year quarter; Adjusted net income per diluted share increased 5% to $0.64, compared to $0.61 per diluted share in the prior year quarter.

For the Nine Months Ended October 2, 2021

Net sales increased 35% to $967.9 million, compared to $716.0 million in the prior year.

* DTC channel net sales increased 43% to $520.8 million, compared to $363.1 million in the prior year period, driven by both Drinkware and Coolers & Equipment. The DTC channel grew to 54% of net sales, compared to 51% in the prior year.

* Wholesale channel net sales increased 27% to $447.1 million, compared to $352.9 million in the same period last year, primarily driven by both Drinkware and Coolers & Equipment. In the second quarter of 2020, wholesale channel net sales were adversely impacted by the temporary store closures due to COVID-19.

* Drinkware net sales increased 39% to $546.8 million, compared to $392.9 million in the prior year period, due to the continued expansion of our Drinkware product offerings, including the introduction of new colorways and sizes, and strong demand for customization.

* Coolers & Equipment net sales increased 28% to $400.3 million, compared to $312.3 million in the same period last year. The strong performance was driven by growth in bags, outdoor living products, soft coolers, hard coolers, and cargo.

Gross profit increased 39% to $561.3 million, or 58.0% of net sales, compared to $404.0 million, or 56.4% of net sales, in the prior year. The 160 basis point increase in gross margin was primarily driven by product cost improvements as well as a favorable mix shift to our DTC channel and lower inventory reserves, partially offset by the unfavorable impact of the non-renewal of the GSP program on import duties and higher inbound freight rates.

Selling, general, and administrative expenses increased 40% to $380.1 million, compared to $271.2 million in the prior year. The 2020 period included the benefit of cost reduction initiatives implemented in response to COVID-19. As a percentage of net sales, SG&A expenses increased 140 basis points to 39.3% from 37.9% in the prior year period. This increase was due to an increase of 10 basis points in variable expenses, driven by the increased mix of our faster growing and higher gross margin DTC channel, which grew to 54% of net sales during the period, and an increase of 130 basis points primarily driven by higher marketing expense.

Operating income increased 36% to $181.2 million, or 18.7% of net sales, compared to $132.8 million, or 18.5% of net sales, during the prior year.

Adjusted operating income increased 40% to $195.4 million, or 20.2% of net sales, compared to $139.8 million, or 19.5% of net sales, during the same period last year.

Net income increased 50% to $139.7 million, or 14.4% of net sales, compared to $93.4 million, or 13.0% of net sales, in the prior year; Net income per diluted share increased 48% to $1.58, compared to $1.07 per diluted share in the prior year.

Adjusted net income increased 52% to $150.4 million, or 15.5% of net sales, compared to $99.0 million, or 13.8% of net sales in the prior year period; Adjusted net income per diluted share increased 50% to $1.70, compared to $1.13 per diluted share in the same period last year.

Balance Sheet and Cash Flow Highlights

Cash increased to $259.3 million, compared to $234.8 million at the end of the third quarter of 2020.

Inventory increased 98% to $266.0 million, compared to $134.6 million at the end of the prior year quarter, primarily due to the inventory purchase order reductions taken during 2020 in response to COVID-19 and higher in-transit inventories this year due to extended lead times from ongoing supply chain disruptions. The inventory increase represents a CAGR of 13% since the same period in 2019, which is below our net sales CAGR of 26% during the same period.

Total debt, excluding finance leases and unamortized deferred financing fees, was $118.1 million, compared to $238.8 million at the end of the third quarter of 2020. During the first nine months of 2021, YETI made mandatory debt payments of $16.9 million. At the end of the third quarter of 2021, our cash balance exceeded total debt by $141.2 million.

Updated 2021 Outlook

For Fiscal 2021, a 52-week period, compared to a 53-week period in Fiscal 2020:

* Net sales are now expected to increase between 28% and 29% (versus the previous outlook of between 26% and 28%);

* Operating income as a percentage of net sales is expected to be approximately 19.5% (versus the previous outlook of approximately 19%);

* Adjusted operating income as a percentage of net sales is expected to be approximately 20.8% (versus the previous outlook of approximately 20.5%);

* The effective tax rate is now expected to be approximately 22% (versus the previous outlook of approximately 23%);

* Net income per diluted share is now expected to be between $2.35 and $2.37 (versus the previous outlook of between $2.25 and $2.29), reflecting a 33% to 34% increase;

* Adjusted net income per diluted share is now expected to be between $2.51 and $2.53 (versus the previous outlook of between $2.42 and $2.46), reflecting a 34% to 35% increase;

* Diluted weighted average shares outstanding is now expected to be approximately 88.7 million (versus the previous outlook of 88.6 million); and

* Capital expenditures are expected to remain between $55 million and $60 million, primarily to support investments in technology and new product innovation and launches.

Conference Call Details

A conference call to discuss the third quarter of 2021 financial results is scheduled for today, November 11, 2021, at 8:00 a.m. Eastern Time. Investors and analysts interested in participating in the call are invited to dial 877-451-6152 (international callers, please dial 201-389-0879) approximately 10 minutes prior to the start of the call. A live audio webcast of the conference call will be available online at http://investors.yeti.com and by dialing 844-512-2921 and entering the access code 13724074. A replay will be available through November 25, 2021.

About YETI Holdings, Inc.

Headquartered in Austin, Texas, YETI is a global designer, retailer, and distributor of innovative outdoor products. From coolers and drinkware to bags and apparel, YETI products are built to meet the unique and varying needs of diverse outdoor pursuits, whether in the remote wilderness, at the beach, or anywhere life takes you. By consistently delivering high-performing, exceptional products, we have built a strong following of brand loyalists throughout the world, ranging from serious outdoor enthusiasts to individuals who simply value products of uncompromising quality and design. We have an unwavering commitment to outdoor and recreation communities, and we are relentless in our pursuit of building superior products for people to confidently enjoy life outdoors and beyond. For more information, please visit www.YETI.com.

Non-GAAP Financial Measures

In addition to our results determined in accordance with GAAP, we supplement our results with non-GAAP financial measures, including adjusted operating income, adjusted net income, adjusted net income per diluted share as well as adjusted operating income and adjusted net income as a percentage of net sales. Our management uses these non-GAAP financial measures in conjunction with GAAP financial measures to measure our profitability and to evaluate our financial performance. We believe that these measures are useful to investors as they are widely used measures of performance and to facilitate comparisons to other companies. These non-GAAP financial measures have limitations as analytical tools in that they do not reflect all of the amounts associated with our results of operations as determined in accordance with GAAP. Because of these limitations, these non-GAAP financial measures should be considered along with GAAP financial performance measures. The presentation of these non-GAAP financial measures is not intended to be considered in isolation or as a substitute for, or superior to, financial information prepared and presented in accordance with GAAP. Investors are encouraged to review the reconciliation of these non-GAAP financial measures to their most directly comparable GAAP financial measures. A reconciliation of the non-GAAP financial measures to such GAAP measures can be found below.

Forward-looking statements

This press release contains ''forward-looking statements'' within the meaning of the Private Securities Litigation Reform Act of 1995. All statements other than statements of historical or current fact included in this press release are forward-looking statements. 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 relating to demand conditions, pricing conditions, expected sales levels, and our expectations for opportunity or growth, including those set forth in the quote from YETI's President and CEO, and the updated 2021 financial outlook provided herein, constitute 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 and, therefore, you should not unduly rely on such statements. 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; and (xv) the impact of our indebtedness on our ability to invest in the ongoing needs of our business. For a more extensive list of factors that could materially affect our results, you should read our filings with the United States Securities and Exchange Commission (the "SEC"), including our Quarterly Report on Form 10-Q for the three months ended July 3, 2021, as such filings may be amended, supplemented or superseded from time to time by other reports YETI files with the SEC. These forward-looking statements are made based upon detailed assumptions and reflect management's current expectations and beliefs. While YETI believes that these assumptions underlying the forward-looking statements are reasonable, YETI cautions that it is very difficult to predict the impact of known factors, and it is impossible for YETI to anticipate all factors that could affect actual results.

The forward-looking statements included here are made only as of the date hereof. YETI undertakes no obligation to publicly update or revise any forward-looking statement as a result of new information, future events, or otherwise, except as required by law. Many of the foregoing risks and uncertainties may be exacerbated by the COVID-19 pandemic and its effects, including any worsening of the global business and economic environment as a result.

YETI HOLDINGS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

(In thousands, except per share amounts)

Three Months Ended Nine Months Ended

October 2, September October 2, September 2021 26, 2021 26, 2020 2020

Net sales $ 362,643 $ 294,603 $ 967,864 $ 715,953

Cost of goods sold 155,640 120,627 406,560 311,994

Gross profit 207,003 173,976 561,304 403,959

Selling, general, and 138,274 103,864 380,101 271,152 administrative expenses

Operating income 68,729 70,112 181,203 132,807

Interest expense (833 ) (1,963 ) (2,519 ) (7,730 )

Other expense (1,239 ) (82 ) (2,492 ) (1,020 )

Income before income 66,657 68,067 176,192 124,057 taxes

Income tax expense (13,690 ) (16,622 ) (36,471 ) (30,650 )

Net income $ 52,967 $ 51,445 $ 139,721 $ 93,407



Net income per share

Basic $ 0.61 $ 0.59 $ 1.60 $ 1.07

Diluted $ 0.60 $ 0.58 $ 1.58 $ 1.07



Weighted-average common shares outstanding

Basic 87,526 87,032 87,343 86,933

Diluted 88,750 88,094 88,636 87,677

YETI HOLDINGS, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)

(In thousands, except per share amounts)

October 2,2021

January 2,2021

September 26,2020

ASSETS

Current assets

Cash

$

259,317

$

253,283

$

234,813

Accounts receivable, net

83,267

65,417

71,189

Inventory

265,974

140,111

134,632

Prepaid expenses and other current assets

23,640

17,686

14,069

Total current assets

632,198

476,497

454,703

Property and equipment, net

108,739

78,075

75,355

Operating lease right-of-use assets

54,270

34,090

34,652

Goodwill

54,293

54,293

54,293

Intangible assets, net

94,074

92,078

91,572

Other assets

1,934

2,034

1,997

Total assets

$

945,508

$

737,067

$

712,572

LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities

Accounts payable

$

166,080

$

123,621

$

101,850

Accrued expenses and other current liabilities

96,857

89,068

56,390

Taxes payable

6,869

18,316

14,333

Accrued payroll and related costs

24,513

25,810

17,735

Operating lease liabilities

11,008

8,247

8,425

Current maturities of long-term debt

24,548

22,697

20,819

Total current liabilities

329,875

287,759

219,552

Long-term debt, net of current portion

101,723

111,017

215,823

Operating lease liabilities, non-current

54,043

36,546

37,679

Other liabilities

20,227

13,327

16,885

Total liabilities

505,868

448,649

489,939

Commitments and contingencies

Stockholders' Equity

Common stock, par value $0.01; 600,000 shares authorized; 87,598, 87,128, and 87,064 shares outstanding at October 2, 2021, January 2, 2021, and September 26, 2020, respectively

876

871

871

Preferred stock, par value $0.01; 30,000 shares authorized; no shares issued or outstanding

-

-

-

Additional paid-in capital

332,299

321,678

317,996

Retained earnings (accumulated deficit)

105,977

(33,744

)

(96,138

)

Accumulated other comprehensive income (loss)

488

(387

)

(96

)

Total stockholders' equity

439,640

288,418

222,633

Total liabilities and stockholders' equity

$

945,508

$

737,067

$

712,572

YETI HOLDINGS, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)

(In thousands, except per share amounts)

October 2, January 2, September 2021 2021 26, 2020

ASSETS

Current assets

Cash $ 259,317 $ 253,283 $ 234,813

Accounts receivable, net 83,267 65,417 71,189

Inventory 265,974 140,111 134,632

Prepaid expenses and other current 23,640 17,686 14,069 assets

Total current assets 632,198 476,497 454,703

Property and equipment, net 108,739 78,075 75,355

Operating lease right-of-use assets 54,270 34,090 34,652

Goodwill 54,293 54,293 54,293

Intangible assets, net 94,074 92,078 91,572

Other assets 1,934 2,034 1,997

Total assets $ 945,508 $ 737,067 $ 712,572



LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities

Accounts payable $ 166,080 $ 123,621 $ 101,850

Accrued expenses and other current 96,857 89,068 56,390 liabilities

Taxes payable 6,869 18,316 14,333

Accrued payroll and related costs 24,513 25,810 17,735

Operating lease liabilities 11,008 8,247 8,425

Current maturities of long-term debt 24,548 22,697 20,819

Total current liabilities 329,875 287,759 219,552

Long-term debt, net of current portion 101,723 111,017 215,823

Operating lease liabilities, 54,043 36,546 37,679 non-current

Other liabilities 20,227 13,327 16,885

Total liabilities 505,868 448,649 489,939



Commitments and contingencies



Stockholders' Equity

Common stock, par value $0.01; 600,000shares authorized; 87,598, 87,128, and87,064 shares outstanding at October 2, 876 871 871 2021, January 2, 2021, and September26, 2020, respectively

Preferred stock, par value $0.01;30,000 shares authorized; no shares - - - issued or outstanding

Additional paid-in capital 332,299 321,678 317,996

Retained earnings (accumulated deficit) 105,977 (33,744 ) (96,138 )

Accumulated other comprehensive income 488 (387 ) (96 )(loss)

Total stockholders' equity 439,640 288,418 222,633

Total liabilities and stockholders' $ 945,508 $ 737,067 $ 712,572 equity

YETI HOLDINGS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

(In thousands, except per share amounts)

Nine Months Ended

October 2,2021

September 26,2020

Cash Flows from Operating Activities:

Net income

$

139,721

$

93,407

Adjustments to reconcile net income to cash provided by operating activities:

Depreciation and amortization

23,440

22,835

Amortization of deferred financing fees

516

712

Stock-based compensation

11,339

6,315

Deferred income taxes

3,764

732

Impairment of long-lived assets

2,331

632

Other

3,213

1,414

Loss on prepayment of debt

-

418

Changes in operating assets and liabilities:

Accounts receivable

(18,769

)

10,236

Inventory

(126,381

)

50,943

Other current assets

(5,206

)

5,570

Accounts payable and accrued expenses

48,184

31,537

Taxes payable

(11,441

)

11,019

Other

2,488

3,329

Net cash provided by operating activities

73,199

239,099

Cash Flows from Investing Activities:

Purchases of property and equipment

(41,159

)

(10,904

)

Additions of intangibles, net

(6,749

)

(5,377

)

Net cash used in investing activities

(47,908

)

(16,281

)

Cash Flows from Financing Activities:

Repayments of long-term debt

(16,875

)

(61,250

)

Taxes paid in connection with employee stock transactions

(3,507

)

(1,027

)

Proceeds from employee stock transactions

2,794

2,033

Finance lease principal payment

(600

)

(138

)

Borrowings under revolving line of credit

-

50,000

Repayments under revolving line of credit

-

(50,000

)

Net cash used in financing activities

(18,188

)

(60,382

)

Effect of exchange rate changes on cash

(1,069

)

(138

)

Net increase in cash

6,034

162,298

Cash, beginning of period

253,283

72,515

Cash, end of period

$

259,317

$

234,813

YETI HOLDINGS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

(In thousands, except per share amounts)

Nine Months Ended

October 2, September 2021 26, 2020

Cash Flows from Operating Activities:

Net income $ 139,721 $ 93,407

Adjustments to reconcile net income to cash provided by operating activities:

Depreciation and amortization 23,440 22,835

Amortization of deferred financing fees 516 712

Stock-based compensation 11,339 6,315

Deferred income taxes 3,764 732

Impairment of long-lived assets 2,331 632

Other 3,213 1,414

Loss on prepayment of debt - 418

Changes in operating assets and liabilities:

Accounts receivable (18,769 ) 10,236

Inventory (126,381 ) 50,943

Other current assets (5,206 ) 5,570

Accounts payable and accrued expenses 48,184 31,537

Taxes payable (11,441 ) 11,019

Other 2,488 3,329

Net cash provided by operating activities 73,199 239,099

Cash Flows from Investing Activities:

Purchases of property and equipment (41,159 ) (10,904 )

Additions of intangibles, net (6,749 ) (5,377 )

Net cash used in investing activities (47,908 ) (16,281 )

Cash Flows from Financing Activities:

Repayments of long-term debt (16,875 ) (61,250 )

Taxes paid in connection with employee stock (3,507 ) (1,027 )transactions

Proceeds from employee stock transactions 2,794 2,033

Finance lease principal payment (600 ) (138 )

Borrowings under revolving line of credit - 50,000

Repayments under revolving line of credit - (50,000 )

Net cash used in financing activities (18,188 ) (60,382 )

Effect of exchange rate changes on cash (1,069 ) (138 )

Net increase in cash 6,034 162,298

Cash, beginning of period 253,283 72,515

Cash, end of period $ 259,317 $ 234,813

YETI HOLDINGS, INC.

SELECTED FINANCIAL DATA

Reconciliation of GAAP to Non-GAAP Financial Information

(Unaudited) (In thousands except per share amounts)

Three Months Ended

Nine Months Ended

October 2,2021

September 26,2020

October 2,2021

September 26,2020

Operating income

$

68,729

$

70,112

$

181,203

$

132,807

Adjustments:

Non-cash stock-based compensation expense(1)

3,824

2,279

11,339

6,315

Long-lived asset impairment(1)

1,189

-

2,331

632

Business optimization expense(1)(2)

479

-

479

-

Adjusted operating income

$

74,221

$

72,391

$

195,352

$

139,754

Net income

$

52,967

$

51,445

$

139,721

$

93,407

Adjustments:

Non-cash stock-based compensation expense(1)

3,824

2,279

11,339

6,315

Long-lived asset impairment(1)

1,189

-

2,331

632

Loss on prepayment of debt(3)

-

418

-

418

Business optimization expense(1)(2)

479

-

479

-

Tax impact of adjusting items(4)

(1,346

)

(661

)

(3,467

)

(1,804

)

Adjusted net income

$

57,113

$

53,481

$

150,403

$

98,968

Net sales

$

362,643

$

294,603

$

967,864

$

715,953

Operating income as a % of net sales

19.0

%

23.8

%

18.7

%

18.5

%

Adjusted operating income as a % of net sales

20.5

%

24.6

%

20.2

%

19.5

%

Net income as a % of net sales

14.6

%

17.5

%

14.4

%

13.0

%

Adjusted net income as a % of net sales

15.7

%

18.2

%

15.5

%

13.8

%

Net income per diluted share

$

0.60

$

0.58

$

1.58

$

1.07

Adjusted net income per diluted share

$

0.64

$

0.61

$

1.70

$

1.13

Weighted average common shares outstanding - diluted

88,750

88,094

88,636

87,677

_________________________

YETI HOLDINGS, INC.

SELECTED FINANCIAL DATA

Reconciliation of GAAP to Non-GAAP Financial Information

(Unaudited) (In thousands except per share amounts)

Three Months Ended Nine Months Ended

October 2, September October 2, September 2021 26, 2021 26, 2020 2020

Operating income $ 68,729 $ 70,112 $ 181,203 $ 132,807

Adjustments:

Non-cash stock-based 3,824 2,279 11,339 6,315 compensation expense^(1)

Long-lived asset 1,189 - 2,331 632 impairment^(1)

Business optimization 479 - 479 - expense^(1)(2)

Adjusted operating income $ 74,221 $ 72,391 $ 195,352 $ 139,754



Net income $ 52,967 $ 51,445 $ 139,721 $ 93,407

Adjustments:

Non-cash stock-based 3,824 2,279 11,339 6,315 compensation expense^(1)

Long-lived asset 1,189 - 2,331 632 impairment^(1)

Loss on prepayment of - 418 - 418 debt^(3)

Business optimization 479 - 479 - expense^(1)(2)

Tax impact of adjusting (1,346 ) (661 ) (3,467 ) (1,804 )items^(4)

Adjusted net income $ 57,113 $ 53,481 $ 150,403 $ 98,968



Net sales $ 362,643 $ 294,603 $ 967,864 $ 715,953

Operating income as a % 19.0 % 23.8 % 18.7 % 18.5 %of net sales

Adjusted operating income 20.5 % 24.6 % 20.2 % 19.5 %as a % of net sales

Net income as a % of net 14.6 % 17.5 % 14.4 % 13.0 %sales

Adjusted net income as a 15.7 % 18.2 % 15.5 % 13.8 %% of net sales



Net income per diluted $ 0.60 $ 0.58 $ 1.58 $ 1.07 share

Adjusted net income per $ 0.64 $ 0.61 $ 1.70 $ 1.13 diluted share

Weighted average commonshares outstanding - 88,750 88,094 88,636 87,677 diluted

_________________________

(1) These costs are reported in SG&A expenses.

Represents start-up costs, transition and integration charges associated(2) with our new distribution facility in Memphis, Tennessee, and costs to exit our distribution facility in Dallas, Texas.

(3) Represents the accelerated amortization of deferred financing fees resulting from the voluntary prepayments of our term loan.

Represents the tax impact of adjustments calculated at an expected statutory tax rate of 24.5% for both the three months ended October 2, 2021(4) and September 26, 2020, respectively. For both the nine months ended October 2, 2021 and September 26, 2020, the tax rate used to calculate the tax impact of adjustments was 24.5%.

Fiscal 2021 OUTLOOK

Reconciliation of GAAP to Non-GAAP Financial Information

(Unaudited)

(In thousands except per share amounts)

Twelve Months Ended

Updated Fiscal 2021 Outlook

January 2, 2021

Low

High

Operating income

$

214,233

$

271,736

$

274,007

Adjustments:

Non-cash stock-based compensation expense(1)

9,009

15,446

15,446

Long-lived asset impairment(1)

1,051

2,331

2,331

Business optimization expense(1)(2)

-

1,147

1,147

Adjusted operating income

$

224,293

$

290,660

$

292,931

Net income

$

155,801

$

207,932

$

209,708

Adjustments:

Non-cash stock-based compensation expense(1)

9,009

15,446

15,446

Business optimization expense(1)(2)

-

1,147

1,147

Long-lived asset impairment(1)

1,051

2,331

2,331

Loss on prepayment of debt(3)

1,064

-

-

Tax impact of adjusting items(4)

(2,725

)

(4,636

)

(4,636

)

Adjusted net income

$

164,200

$

222,220

$

223,996

Net sales

$

1,091,721

$

1,397,403

$

1,408,320

Operating income as a % of net sales

19.6

%

19.4

%

19.5

%

Adjusted operating income as a % of net sales

20.5

%

20.8

%

20.8

%

Net income as a % of net sales

14.3

%

14.9

%

14.9

%

Adjusted net income as a % of net sales

15.0

%

15.9

%

15.9

%

Net income per diluted share

$

1.77

$

2.35

$

2.37

Adjusted net income per diluted share

$

1.87

$

2.51

$

2.53

Weighted average common shares outstanding - diluted

87,847

88,654

88,654

_________________________

Fiscal 2021 OUTLOOK

Reconciliation of GAAP to Non-GAAP Financial Information

(Unaudited)

(In thousands except per share amounts)

Twelve Months Updated Fiscal 2021 Outlook Ended

January 2, Low High 2021

Operating income $ 214,233 $ 271,736 $ 274,007

Adjustments:

Non-cash stock-based compensation 9,009 15,446 15,446 expense^(1)

Long-lived asset impairment^(1) 1,051 2,331 2,331

Business optimization expense^(1) - 1,147 1,147 (2)

Adjusted operating income $ 224,293 $ 290,660 $ 292,931



Net income $ 155,801 $ 207,932 $ 209,708

Adjustments:

Non-cash stock-based compensation 9,009 15,446 15,446 expense^(1)

Business optimization expense^(1) - 1,147 1,147 (2)

Long-lived asset impairment^(1) 1,051 2,331 2,331

Loss on prepayment of debt^(3) 1,064 - -

Tax impact of adjusting items^(4) (2,725 ) (4,636 ) (4,636 )

Adjusted net income $ 164,200 $ 222,220 $ 223,996



Net sales $ 1,091,721 $ 1,397,403 $ 1,408,320

Operating income as a % of net 19.6 % 19.4 % 19.5 %sales

Adjusted operating income as a % 20.5 % 20.8 % 20.8 %of net sales

Net income as a % of net sales 14.3 % 14.9 % 14.9 %

Adjusted net income as a % of net 15.0 % 15.9 % 15.9 %sales



Net income per diluted share $ 1.77 $ 2.35 $ 2.37

Adjusted net income per diluted $ 1.87 $ 2.51 $ 2.53 share

Weighted average common shares 87,847 88,654 88,654 outstanding - diluted

_________________________

(1) These costs are reported in SG&A expenses.

Represents start-up costs, transition and integration charges associated(2) with our new distribution facility in Memphis, Tennessee, and costs to exit our distribution facility in Dallas, Texas.

(3) Represents the accelerated amortization of deferred financing fees resulting from the voluntary prepayments of our term loan in Fiscal 2020.

(4) Represents tax impact of adjustments calculated at an expected statutory tax rate of 24.5% for both Fiscal 2020 and Fiscal 2021.

View source version on businesswire.com: https://www.businesswire.com/news/home/20211111005409/en/

CONTACT: Investor Relations Contact: Tom Shaw, 512-271-6332 Investor.relations@yeti.com

CONTACT: Media Contact: YETI Holdings, Inc. Media Hotline Media@yeti.com