1. business and industrial
2. company
3. annual report

Bluestem Brands, Inc.
Q3 2014 Financial Highlights
Conference Call
Note: Bluestem Brands, Inc. is a wholly-owned subsidiary of Capmark Financial Group Inc. and these
results are on a stand-alone historical basis
1
Important Investor Information
2
•
All financial information in this presentation and related earnings release dated December 23, 2014 (the “Release”), available at www.capmark.com,
relates solely to Bluestem Brands, Inc., a wholly-owned subsidiary of Capmark Financial Group Inc., and Bluestem’s consolidated subsidiaries on a
historical stand-alone basis prior to Bluestem’s merger with Capmark. This presentation uses the financial measures Contribution Margin,
Contribution Margin (pro forma), Adjusted G&A expenses, and Adjusted pro forma EBITDA which are financial measures not in accordance with GAAP
and are not based on any comprehensive set of accounting rules or principles. Please see “Bluestem Brands, Inc. Financial Information 13- and 39weeks ended October 31, 2014--Overview and Basis of Presentation” and accompanying disclosures in the Release and the notes to the applicable
tables included in this presentation for an explanation of these terms, a reconciliation or other information related to results of Bluestem reported
under GAAP, and other important information for investors to consider.
•
References to “Q3” or “third quarter” in this presentation refer to Bluestem’s 13-week period ended October 31, 2014 and November 1, 2013,
references to “YTD” refer to Bluestem’s 39 week period ended October 31, 2014 and November 1, 2013, and references to “LTM” refer to the 52week periods ended October 31, 2014 and November 1, 2013.
•
This presentation contains statements that are “forward-looking statements.” Forward-looking statements relate to expectations, beliefs,
projections, future plans and strategies, anticipated events or trends and similar expressions concerning matters that are not historical facts. All
statements contained herein that are not clearly historical in nature are forward-looking. In some cases, you can identify these statements by use of
forward-looking words such as “may,” “will,” “should,” “anticipate,” “estimate,” “expect,” “plan,” “believe,” “predict,” “potential,” “project,” “intend,”
“could” or similar expressions. In particular, statements regarding Capmark’s plans, strategies, prospects and expectations regarding its business are
forward-looking statements. You should be aware that these statements and any other forward-looking statements in this presentation only reflect
Capmark’s beliefs, assumptions and expectations and are not guarantees of performance. These statements involve risks, uncertainties and
assumptions. Many of these risks, uncertainties and assumptions are beyond Capmark’s control and may cause actual results and performance to
differ materially from Capmark’s expectations. Forward-looking statements are based on Capmark’s beliefs, assumptions and expectations of its
future performance and actions, taking into account all information currently available to Capmark. These beliefs, assumptions and expectations can
change as a result of many possible events or factors, not all of which are known to Capmark or are within its control. If a change occurs, Capmark’s
plans, business, financial condition, and liquidity may vary materially from those expressed in its forward-looking statements. Important factors that
could cause the actual results to be materially different from Capmark’s expectations include the risks and uncertainties set forth in “Risk Factors” in
Capmark’s Report as of and for the years ended December 31, 2013 and 2012. Accordingly, you should not place undue reliance on the forwardlooking statements made in this presentation. These forward-looking statements are made only as of the date of this presentation. Capmark
undertakes no obligation to update or revise publicly any forward-looking statements, whether as a result of new information, future events or
otherwise.
Bluestem Q3 2014 – Net Sales
($ in millions)
Q3 2014
YTD Q3 2014
LTM October 2014
+28%
$989
$773
+32%
$615
Net Sales
+27%
$465
$213
$168
Q3 2013
3
Q3 2014
2013 YTD
2014 YTD
Oct'13 LTM
Oct'14 LTM
Bluestem Q3 2014 - EBITDA
($ in millions)
Q3 2014
YTD Q3 2014
LTM October 2014
$98.3
+321%
Adjusted
Pro
Forma
EBITDA
+67%
$42.7
$59.0
+607%
$10.0
$10.2
$1.4
Q3 2013
%
Net
Sales
4
0.8%
Q3 2014
4.7%
2013 YTD
%
Net
Sales
2.2%
2014 YTD
6.9%
Oct'13 LTM
%
Net
Sales
7.6%
Oct'14 LTM
9.9%
Bluestem Key Operating Metrics
Average Order Size(1)
Active Customers
(in thousands)
1,534
$228
$201
1,417
1,339
$225
$217
$217
$211
$201
2012
2013
Q3 2014
2012
2013
Q3 2013
Q3 2014
2013 YTD
2014 YTD
New Customer Accounts
(in thousands)
825
868
590
$217
515
$201
$225
171
203
$211
$217
2012
(1)
5
2013
Q3 2013
Q3 2014
2013 YTD
2014 YTD
“Average Order Size" defined as retail merchandise sales including shipping and handling revenue divided by the number of merchandise orders fulfilled
during the fiscal period presented
$228
Bluestem Key Operating Metrics – cont’d
Gross Margin
G&A Expenses *
(% of sales)
44.2%
(% of sales)
41.2%
41.7%
40.6%
42.8%
42.1%
19.2%
14.5%
2012
2013
Q3 2013
Q3 2014
2013 YTD
2014 YTD
15.9%
17.4%
17.0%
14.4%
13.3%
2012
2013
Q3 2013
Total G&A
Contribution Margin (pro forma) **
22.4%
19.1%
2012
2013
Q3 2013
17.0%
Q3 2014
** pro forma to reflect the SCUSA transaction
6
18.3%
18.0%
14.7%
14.3%
Q3 2014
2013 YTD
2014 YTD
Adjusted G&A
* Adjusted G&A excludes acquisition transaction costs, dividend equivalent
expense, and specified litigation matters
(% of sales)
15.2%
18.9%
17.5%
2013 YTD
19.5%
2014 YTD
Bluestem Key Credit Portfolio Metrics
Net Charge-Offs(1)
30+ Days Delinquent Balances
18.6%
14.4%
14.7%
2012
2013
17.8%
16.9%
18.3%
18.4%
Q3 2013
Q3 2014
17.4%
16.9%
YTD 2013
YTD 2014
14.4%
Q3 2013
(2)
Q3 2014
(2)
Finance Charge & Fee Income
2012
2013
Active Accounts Average Balance
$608
$578
$531
30.5%
2012
Note:
(1)
(2)
7
29.3%
28.1%
28.2%
2013
Q3 2013
Q3 2014
$494
30.2%
29.1%
YTD 2013
YTD 2014
2012
2013
Q3 2013
Refers to total managed portfolio.
Net charge-offs in 2012 favorably impacted by one-time sale of charged-off receivables; excluding this impact, net charge-off rate would have been ~15.2%.
Elevation of 30+ days delinquent balances influenced by seasonality.
Q3 2014