Q3 2025 Destination XL Group Inc Earnings Call

December 11, 2025

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I would now like to hand the call over to John Cooney, Chief Accounting Officer. Please go ahead.

Thank you, operator, and good afternoon, everyone.

As you saw earlier today, we announced a merger agreement between DXL and FullBeauty, as well as our third quarter fiscal 2025 earnings results.

Joining me today are Harvey Kanter, DXL President and Chief Executive Officer.

Peter Stratton, CXL Chief Financial Officer.

And Jim Fogerty, full Beauties, Chief Executive Officer, and incoming Chief Executive Officer of the combined company.

Today's discussion contains certain forward-looking statements concerning the announced merger between the company and FullBeauty, including an overview of the transactions, and the future opportunities and expectations. That the combination of these businesses will provide

We look forward to looking ahead. Statements are subject to various risks and uncertainties that could cause actual results to differ materially from those assumptions mentioned today, due to a variety of factors that affect the company.

Information regarding risks and uncertainties is detailed in the company's filings with the Securities and Exchange Commission.

During today's call, we will also discuss some non-GAAP metrics that provide investors with useful information about DXL's third-quarter financial performance.

Please refer to our earnings release, which was filed this afternoon and is available on our investor relations website at investordxl.com, for an explanation and reconciliation of such measures.

I would now like to turn the call over to DXL CEO Harvey Kanter. Harvey.

Thank you, John, and good afternoon, everyone. Today marks a pivotal step in redefining inclusive apparel as DXL and Full Beauty joined forces to create a retailer that sets a new standard for choice, quality, and customer experience.

We are pleased to be speaking with you about the opportunities we see ahead for the combined company to accelerate growth, improve operational efficiency, and deliver long-term value for our shareholders.

On our call today, Jim Fogerty and I will begin by sharing additional insights about our two companies and the compelling benefits of this combination.

I will then turn it over to Peter to review DXL financial results for the third quarter of 2025, which were announced today in a separate release.

I'll now begin by walking through why we believe our business fits so well together.

It starts with our complimentary emissions and the ways in which we target underserved consumers and the fragmented markets that provide significant growth opportunities.

At DXL, we are driven by a mission of providing big and tall men the freedom to choose their own style.

We offer the best brands through our broad and deep assortment of national and private brands, most of which are exclusive, across styles that provide options for most any occasion.

Problems for our customers: the big and tall man has largely been ignored by the apparel industry. There are few brands, fewer styles, and even fewer sizing options out there at most other retailers for the big and tall man. His clothes are largely chosen for him, not by what he likes, but purely by what exists.

DXL fixes that.

In so doing, we create significant growth opportunities for our business.

And when the big and tall man shops at one of our stores, they are getting the brands, quality, style, and experience that they simply cannot find anywhere else.

Jim will tell you more about Full Beauties' history, but they also solve this issue. They solve this issue by building on a business that has been dedicated to serving plus-size women and big and tall men since 1901.

Their company's journey has been marked by transformation, evolution, and purpose, adapting to new technology platforms and customer behaviors.

Hello, Beauty. Today provides an unparalleled fit and experience, with each product meticulously crafted to cater to the customer's needs.

This broad and balanced portfolio offers thoughtfully curated assortments aligned with evolving customer preferences, fashion trends, and a wide range of end-use price points, looks, and styles.

Through an unwavering focus on the brand experience and creating meaningful connections with their customers, Full Beauty has set itself apart in the market as a differentiated and reliable choice for plus-size and midsize customers.

Our companies share a belief in the importance of rigorous design.

Sizing and manufacturing processes. And this focus has allowed both Full Beauty and DXL to distinguish themselves in the market and build strong loyalty with our respective customer bases.

The merger of equals we are announcing today creates a scaled, category-defining retailer for inclusive apparel.

Together, we have unmatched know-how, manufacturing facilities, and proven capabilities to deliver high-quality bespoke pieces for our customers that are not merely just graded up, but thoughtfully created with big and tall and plus-size individuals in mind from the very start.

This is what has set each of us and our companies apart in the broader retail industry, and we are confident it will be foundational to our success as we enter this next phase.

By building on our combined strengths, we will meet the opportunity by creating a powerful engine for innovation.

Combining data science digital scale.

Proprietary fit technology and differentiated store expertise.

It also strengthens our financial position, providing us the profitability and flexibility to generate strong free cash flow.

That financial strength, along with the synergies we expect to capture, will provide the resources to reinvest in our business and further reduce our leverage.

Ultimately, together with Full Beauty, we will be better positioned to create value for our shareholders by serving our customers across the plus-size and Big and Tall apparel markets with more brands, more styles, and more options—whether they shop with us in our stores or online. And with that, I'll hand the mic over to Jim so he can share more about how this combination will create a scaled, category-defining retailer. Jim.

Thank you, Harvey. This is an exciting day for both DXL and FullBeauty, and I'm pleased to be speaking with you all about this transaction.

Today, we are creating a new entity that we believe is greater than the sum of its parts. Today's inclusive fashion market remains highly fragmented, with few players offering comprehensive solutions for plus-size and big and tall customers.

Together, we are building the first true, at-scale, profitable omni-channel platform that finally treats sizing inclusivity as a category, not a niche. This is not a merger to simply get bigger; it is a merger to become a category-defining leader and to create more value than either business could deliver on its own.

This merger positions us to address these gaps by bringing together two leading companies with complementary strengths, creating a retailer that delivers greater assortment, improved fit, and a powerful omnichannel experience.

For DXL shareholders, this means owning a larger, more diversified company with higher EBITDA and stronger value creation prospects than DXL on a standalone basis. The combined company will be larger, stronger, and more flexible as a result.

We will be well-positioned to invest in long-term growth.

Joining forces as one best-in-class inclusive sizing retailer. Our combined company will be one of the largest players in the inclusive sizing clothing sector by both sales and store count.

For the last 12 months, ending October 2025, DXL and FullBeauty generated approximately $1.2 billion in combined net sales.

Assuming no pro forma adjustments were made, EBA was approximately $45 million?

With the $25 million in expected annual run-rate cost synergies, adjusted EBITDA for the LCM would have been approximately $70 million?

We'll talk more about synergies in a moment.

Uniting full Beauties leading. Pure Play direct to Consumer capabilities, with DXL, expertise in men's big and tall. Retail will create a powerful Omni Channel and data-driven platform.

Together, we will have a customer database of approximately 34 million households. Our leading direct-to-consumer presence will be 73% of total sales, and our nearly 300 stores will be 27% of total sales.

With more first-party data, the combined company will be better able to offer more personalized marketing, make better inventory decisions, and deliver higher customer lifetime value.

We expect to deliver sustained, sustainable growth, stronger margins, and long-term shareholder value, while expanding choice for customers. Our combined customer offering will be diversified across brands, gender, assortment, and channel to offer unparalleled depth and breadth in options, whether our customers shop in-store or online.

FullBeauty is distinctive in women's brands, as well as Big and Tall King Size brand.

Will join DXL Big and Tall Specialty to create a meaningful, expanded portfolio of both private and national brands.

Our combined product mix is expected to be approximately 54% women's and 46% men's, delivering day-to-day staples.

Active, wear intimates, accessories, and décor, spanning value to premium across lifestyles and occasions.

The differentiated core capabilities that each of our companies bring to the table will enable us to accelerate growth.

DXL, store infrastructure and expertise.

creates potential for brick-and-mortar expansion at Full Beauty

The Excel is, well, established relationships with the national brands, provide opportunities for king-size and full Beauties, women's brands to enhance their merchandise offerings.

Meanwhile, Full Beauty brings an existing private label credit card program that can be brought in to include the Excel.

A universal card website infrastructure that can increase cross-selling and sales at both DXL, and full Beauty Marketplace expertise that can be leveraged to increase the Excel sales.

As well as a print catalog capability that can be leveraged to increase the Excel sales.

Further, we excuse me. Further, we will be able to accelerate the work. Both companies are already doing to remain agile and responsive to evolving customer needs and shopping habits.

Our shared focus on fit flexibility and ongoing customer support positions the combined company to meet new and existing customers at every stage of their weight fluctuation journey, including those using GLP-1 medications, through offerings such as DXL, Fitness, and FullBeauty’s free exchange program.

As we invest in enhancing and expanding our product range across the combined enterprise, we will also continue adding sizes at the lower end of our current range to offer an even broader range of options.

In addition to cost synergies, I want to remind and reinforce that this combination unlocks meaningful commercial synergy upside by applying the strengths of both organizations to create a company with greater revenue potential than either business could achieve alone.

Commercial growth with DXL through Affirm and Universal Card. Platform cross-selling and marketplace expansion.

Website conversion, private label credit card, penetration, and print and digital marketing—likewise, DXL is brick and mortar, and national brand expertise will also drive incremental growth within FullBeauty.

Let me now turn it back to Harvey to discuss the technical aspects of the transaction and certain of the financial benefits.

GM.

Let me start with an overview of the merger transaction.

Under the terms of the agreement, FullBeauty will merge with a newly formed subsidiary of DXL, with DXL remaining as the publicly traded entity.

The transaction is 100% stock-for-stock, with DXL shareholders owning 45% and FullBeauty shareholders owning 55% of the combined company.

As part of establishing a strong financial foundation for the combined company at closing, a certain affiliate's equity and debt holders will complete a committed subscription of $92 million through the sale of common stock in exchange for a combination of new equity and outstanding debt equation. This will result in a Term Loan outstanding at closing of approximately $172 million, with a maturity of August 2029.

In combination, this is expected to generate $25 million in run-rate annual cost synergies by 2027.

We intend to begin capturing the synergies promptly after the closing of the transaction, with a significant portion to be actioned within the first 12 months.

We will take a scientific approach to driving efficiencies across the combined company through cost of goods sold, organizational, and non-organizational expenses.

With meaningfully enhanced scale, we will be able to optimize our factory bases and supply, our network, improve our inbound freight and logistics, and leverage improvements in outbound shipping rates.

Taken together, this will allow us to streamline our factories and resources for product creation, while maintaining agility to pivot sourcing operations to mitigate care exposure.

We will also be able to consolidate our workforce and streamline corporate functions to create a leaner, more efficient organization.

Finally, by unifying our business overhead across the combined organization, we will benefit from improved pricing efficiency on corporate programs.

Streamline customer-facing spend categories and reduce spending for non-organized and contract programs.

Turning now to the roadmap to completing the transaction and our integration plans.

Looking ahead, the transaction is expected to close in the first half of fiscal 2026, subject to customary closing conditions and approval by shareholders of DXL.

I'm pleased to note that the boards of directors of both companies have unanimously approved the merger.

In addition, DXL has entered into voting support agreements with one of our largest shareholders, Fund 1 Investments, and with each member of the DXL board, under which the parties have agreed to vote all of their respective shares in favor of the transaction.

These agreements represent approximately 19.4% of DXL's existing voting shares, further reinforcing our confidence in a successful closing.

Upon close, the company will trade under the ticker symbol of DXL. The combined company's headquarters will remain in Canton, Massachusetts, and the combined company expects to maintain a significant presence in New York, Indianapolis, and El Paso.

The combined company will be led by a proven management team that includes members from both organizations.

Upon closing, Jim will serve as our Chief Executive Officer, and Peter Stratton, current CFO of DXL, will serve as the Chief Financial Officer of the combined entity.

This experienced team is highly qualified to deliver on the promise of this merger.

The board will be composed of nine directors—four directors from each company, and one independent director to be mutually agreed upon by the go-forward directors—prior to closing.

There are, of course, many decisions to be made throughout our integration planning. We look forward to keeping you apprised of further details as we have updates to share. And now, I'd like to turn the call over to Peter for a quick update on DXL's third quarter earnings results. Peter,

Highlights of DXL, third quarter financial performance.

Net sales for the third quarter were $101.9 million as compared to $107.5 million in the third quarter of last year.

The decrease in net sales was primarily due to a decrease in comparable sales of 7.4%, partially offset by an increase in non-comparable sales from new stores.

Although sales were below our expectations, the quarterly comp was an improvement from negative 9.3% in the first half of the year.

We continue to see a shift towards our value-driven private brands, as customers remain cautious with their discretionary spending.

These private brands sell at lower average unit retails that generate higher margins.

By month, our comps were negative 6.7% in August, negative 9.37% in September, and negative 5.8% in October, with October our best month year to date.

Our gross margin rate, inclusive of occupancy costs, was 42.7% as compared to 45.1% in the third quarter of last year.

Do you leverage on occupancy? Costs contributed 210 basis points of decline, and merchandise margins decreased by only 30 basis points, primarily impacted by promotional offers and tariff increases.

Terrorists impacted our third quarter margins by approximately 60 basis points. And we expect the impact on our fiscal year 2025 margin to be approximately $2 million.

We did see favorability in Q3 due to the shift in product mix from national brands to private brands.

Our FDNA expense as a percentage of sales increased to 44.7%, as compared to 44.1% in the third quarter of 2024.

Our ad-to-sales ratio for Q3 was up slightly at 6% from 5.7% last year, and we have been seeing strong returns from our paid, search, and social channels.

Even though for the quarter, it came in at a loss of millions as compared to earnings of $1 million for the third quarter of last year.

We continue to feel very good about the overall strength of our balance sheet.

Total inventory levels are down 4.6% to last year, and clearance levels were maintained at approximately 10%, which is in line with our target and with last year.

We finished the quarter with cash and short-term investments of $27 million as compared to $43 million a year ago, with no outstanding debt in either period and excess availability of $73.6 million under our revolving credit facility.

The $16 million decrease in cash from a year ago can be accounted for with $13.1 million in capital spent on new store development during the past 12 months, and $3.3 million in share repurchases in the fourth quarter of fiscal 2024.

For the 9-month year-to-date, our free cash flow, which we define as cash flow from operating activities less capital expenditures, was a use of $20.2 million of cash as compared to a use of $7 million last year, with the decrease primarily attributable to lower earnings.

Now, I'll pass it back to Harvey for some concluding remarks.

Thanks Peter and Jim.

On behalf of Jim and I, we want to take a moment to recognize our teams, both at DXL and Full Duty, for their dedication and hard work every day.

Our success is built on their commitment and the efforts of our colleagues across the stores, Distribution Center, corporate offices, and the Guest Engagement Centers. Everything we accomplished, including our ability to reach this milestone transaction, is possible because of them.

Thank you for joining us today to learn more about this compelling transaction. I am confident that FullBeauty and Dixell will reach even greater heights together than either business could have achieved on its own as a standalone. And with that, operator, we will open the floor for questions.

Thank you. As a reminder, to ask a question, you will need to press *1,1 on your telephone. To remove yourself from the queue, you may press *1,1 again. Please stand by while we compile the Q&A roster.

Our first question.

Coming from the line of Jeremy Hamlin of Craig-Hallum Capital Group, your line is open. Jeremy?

Seventy-two million, uh, one hundred seventy-two million Term Loan. Um, but wanted to just get a sense for, uh, kind of the expectations of where total debt would be post-closing, you know, kind of expected cash.

Post-closing. And then, here, a little bit more about the expected, um, you know, terms within the term loan.

Uh, sure, so, so Jeremy let me, let me start with, um, with that question. So, first of all, I should just note that. Um, we will have an awful, lot more information coming out in the proxy statement, which, uh, we're going to be working on soon. But I'll, I'll try to give you some sense of, um, how, how we're we're thinking about it. So, um, you know, as you saw in the release, um, what's, what's happening is it's it's a 100% stock, stock stock for stock, uh, transaction. Uh, we will be welcoming new shareholders into, uh, the company who are, are shareholders of of full Beauty today. Um, and and to answer your your question about debt, the, the total debt that we're expecting, um, upon closing is the 172 million,

Um, as I said, there's there's going to be a lot more. That will be coming coming soon, but, um, that's just a quick, a quick start with, with how to how to think about it. But, you know, certainly Harvey or Jim can add anything else that that they think appropriate.

I would just add that the maturity is out to August of 2029 on the term loan, and it’s, uh, LIBOR plus 750.

Great. Okay. And so then, right, so—

DXL has had the $27 million here in cash. So just in terms of understanding what the balance sheet looks like for, uh, for FullBeauty. Um,

So the total debt load is going to be $172 million post-close. Um, and then just kind of an estimate—was looking to see an estimate of what the post-closing cash balance would be.

You would expect for the combined entity.

Yeah, so so Jeremy again. I'm I'm not going to get into to those pro-forma numbers right now. Um, we will have a lot more information coming in the the proxy statement. Um, but as of right now, what we, what we're announcing is, we wanted to make sure that everyone was clear on the, the term loan, uh, that that, uh, Jim just referenced, um, that that's going to be the, uh, the the outstanding debt that we're expecting upon closing.

Okay, got it. Um, and then just, uh, another one—kind of post-closing, combined entity expectations around, you know, capex. Given that FBB is more of a DTC business.

Um, but just on a go-forward basis, you know, in kind of

Assuming some of the investments that you'll be making in the business, but kind of the ongoing capex that you would expect for the entity.

Sure. So I'll

1 of the most exciting things about this. Transaction is the commercial synergies that that both sides, see. Now, of course we both have infrastructure and and maintenance capex that that needs to be maintained whether it's um maintaining distribution facilities investments in it, in technology. Um, but when I, when I think about commercial synergies, you know, there will be questions about, um, where do we want to go with store operations? That's certainly 1 of the strengths that we bring to this transaction and I think, um, you know, full full Beauty does not operate any stores today. So I think, you know, we will we will be looking at all kinds of commercial synergies and Industrial Logics that make sense.

Um, that's going to become more clear, I think, as the two teams start working together and coming up with what are those operational plans that we want to be pursuing, um, in the immediate term.

Got it. Maybe this, uh, question is more for Jim. But Jim wanted to understand—you know, obviously, it's been a, you know, challenging couple of years for DXL. Um, and, you know, wanted to understand what FBB was seeing.

Um, you know, in those, are any of the brands getting shed, um, kind of post-closing?

Uh, no.

For that currently. Um, you know, all of our Brands, um, certain you know, serve a purpose. If you look at, uh, I think there's a sliding investor presentation. You'll see that we break our Brands down into, um, what we call the new mall Brands and the classic Mall Brands, uh, our new mall Brands, uh Service, uh, Millennial younger Gen X, uh, demo. And then the classic Mall brands have historically, uh, service to sort of older Gen X, um, and and into young Boomers, uh, uh, demo and we we've leaned into, um, the, the new mall and we've seen some, um, you know, better results there. And then, we're, we're, we're continuing to know the classic Mall, um, you know, is sort of the Mainstay of the business for for uh, many, many years. And so, we've, we've built up a networking effect within that classic mall where we have very loyal customers, uh, you know, a big percentages of our, uh, business are done by customers. Who,

Bought more than four times from us lifetime. Uh, we have a very strong extended plus-size, uh, business within that classic mall, and we try to drive, uh, we'll take a new customer into Classic Mall in one of our brands—let's say, one within—and then that, uh, that relationship we'll try to grow, uh, with a, you know, basically a strategy of driving her, and you'll see where we operate with a universal web cart.

So if you ever to load into 1 within.com, you would see other surrounding Brands and we try to then encourage that customer to not only be a customer well within, but, uh, you know, if she needs something nice for the weekend, she might move over to Romans if she needs Workwear, she'll move over to, uh, Jessica London. Uh, and so we're, we're, we're basically trying to build multiple Brands relationships, uh, with that customer, and then also multiple categories, move her into multiple, uh, categories as well and then classically direct, you know, consumer, um, you know CRM, you know, customer lifetime value of driving. Um, just getting more uh transactions and more loyalty with that customer over time. So I'm giving you like the quick history and then we we as a company introduced uh uh bought a brand called eloquii and we built out a a new mall presence toward that younger demographic. Um, and so we're seeing nice uh um nice performance uh with with that uh,

A new mall, a lean as well. And then I would just double back and say, uh, from our standpoint.

We've always prided ourselves on being high free cash flow generators. Um, so well, you know, Peter will handle the the sort of specific uh uh numbers there but we have um been you know, capex light and and strong free cash flow, uh, uh, driving. You know, you'll see those numbers from us over time. Um, and I concur with Peter's, uh, and you saw it in my remarks that that we're pretty excited about the, uh, not. Not only the, the synergies, uh, on the, uh, cross side to sort of, um, you know, deliver those, um, you know, that's, that's super important. But also we believe the, um, you know, and would reinforce that the commercial synergies in the transaction are exciting. You know, the the capacity and capabilities that we bring, uh, to the DXL brand and vice versa. Uh, um, you know, I won't, I won't go through that all again but we we are, we're, we're pretty excited about that. So I I'll, I'll I'll I'll leave it there.

Great. Last one, actually kind of building on that point in terms of, uh, you know, managing kind of two really separate businesses that are in the same, you know, servicing similar customer sets. Um, you know, DXL has been very, um, you know, kind of hesitant to lead with promotion, um, and fairly disciplined. Now, for the P, you know, certain—

Since Harvey's tenure, um, I just want to understand in terms of, you know, thinking about how, um, you know, the FB portion of the organization versus DXL. Um, you know, I'm sure this has been something discussed, but in thinking about how to, uh, you know, kind of market the brands and how to position from a, uh, a price point and promotion—how do you create synergy, um, among those two organizations?

so,

So, let me start with that one, and then Jim, I'd love for you to comment on some of the specific questions about FB. So, um,

Cost synergies—we're going to start capturing those, we think, pretty quickly after closing. There will be a lot of actioning on that coming in the first 12 months.

Um, but I think there's going to be opportunities with cost of goods. Um, we both have a pretty diverse, um, manufacturing footprint around the world. Uh, there's certainly going to be organizational efficiencies and reduced overhead. Um, but ultimately, you know, I think what we collectively are excited about are those commercial synergies I was alluding to earlier, and how can we accelerate growth through cross-selling, uh, cross-channel capability stores, DTC? I really think this is a tremendous opportunity for each company to bring their best attributes and skill sets, and be able to build upon each other's distinct capabilities.

Yeah, and I I just add to it. Um, so so first, you know, we take the, the job on the cross synergies, you know, quite seriously and then, that, that, that would be surprising. But, um, we and as Peter said, we're going to get at it, you know, promptly. Um, and and it's, you know, it's all, it's a whole, uh, and, and we, uh, the 2 organizations have spent a lot of time working through what we think, uh, you know what we, where we think those synergies are and and details. Um, and you know, um, organizational details, but also contracted details and, and so it's, it's in the same places that Peter's talking about the sourcing organization.

Ation, uh, shared contracts over time, uh, you know, the organizational piece, you know, we don't issue the, the streamlining of leadership, of course, is obvious, but then also, um, inside the organization, just, you know, trying to be as, uh, as, uh, lean as we, uh, can be. Um, and then also, uh, you know, outbound shipping, uh, inbound Logistics, all of those business addition to the core product costs. Uh, we're going to, you know, then as you know, of course, the duplic, duplication of audit and tax, and all all of those sort of normal things. And so we'll we'll work that piece, uh, in terms of the organizations together. Uh, if you, if you think about it, we're we're still in the planning stages, but we have the, we have a great, uh, brand in King Size, Big and Tall brand, uh, and DXL, of course, you know, this is a very powerful brand in Big and Tall, uh, and we've we've sort of, uh, known and respected 1 of

Another's Brands. So if you, they're bigger than our king size brand for uh, by by a decent. Uh uh click uh, but we are a little bit more value moderate with king size and they're a little bit, you know, um, more moderate. So we think there's a, a positioning, uh, their uh, where we can Envision having a universal cart with our 2 men's Brands uh king-size and DXL uh sort of feeding cross Channel traffic to 1 another in a direct to consumer.

Consumer sense. Um, and we have all sorts of things to Think Through uh, as you know, as you know, the Excel was, you know, moving towards uh, private label, uh, uh, you know, increasing private label penetration. Um, that's that's where we're strong. They're strong on the national brand side. So we think they're, you know, there may be some really nice uh cross server potential that we have to work through from uh you know making the the the 2 Brands will will absolutely have a place. Um,

Together and we we've always found what, you know, 1 plus 1 equaling 2 and a half sort of thing and making it making them stronger. Uh, but we, you know, we'll we'll try to be as lean and efficient and all of that, and be very, you know, even when we're thinking about capital and utilization of capital will be very, uh, disciplined uh, uh, Capital allocators, uh, you know, as we as we serve work, these things together.

Great, thanks for taking my questions. Best wishes. I'll hop out now. Thank you.

Thank you.

Our next question.

Comes from the line of Michael Baker of DA Davidson. Your line is open, Michael.

Uh, okay. Uh, thanks, uh, congratulations on on the transaction. Um, can I follow up with on Jeremy's question about the capital structure? Um,

Was mentioning, you know, full Beauty brings a a high, uh, strong cash flowing business DXL. Uh, has a strong balance sheet. Um, you know, there there's there's a lot of synergies that we think will find. But but this is essentially a, uh, a stock deal

So so I guess to then, you know, you got to do. We know how much stock is going to be issued or or what the, you know what, how much we're we're. Yeah. So we so we, as as we mentioned in the terms, it's going to be 55%, uh, to full Beauty and 45% to DXL.

Will be the pro forma ownership.

Understood. Okay, I I got you. Okay. Uh, and then um, for again on the capital structure, um, is there. So so that 172 million turmoil and that that's that full beauty doesn't come with any debt because I know in the past full Beauty, had existing debt. But has that been paid down? Or is there full Beauty existing debt that? We need to consider?

Right. So, so that 172

Million in the Chim was referring to. That is full Beauty debt. That is being assumed by the Excel on the transaction. Um, as Jim was mentioning in his prepared remarks, the, um, uh, the the, the the owners at at full Beauty have um uh equat, uh a significant chunk of that 90, there's a 92 million pay down which which brings us down, uh, to the 1 1 172.

um,

And and um the extension uh the the the term debts being extended out to um August of 29.

Okay.

Okay, thanks. That helps clear it up. Um,

Now, can I ask a follow-up? So, based on the trailing 12 months numbers that you provided of $1.2 billion and $45 million in EBITDA, and, you know, we know, um, the Excel G's last 12 months numbers of about $445 million and, um,

Uh, I'm missing my numbers here, but about $6 million in trailing 12 months EBITDA. So we can back into a full beauty would be doing over the last 12 months, which, correct me if I'm wrong, but that seems to be down a little bit from the last. I think Full Duty, the last time we have numbers from you was from your ICR presentation for fiscal year 2023. So I guess, again, following up on a previous question, Jim, can you talk about the types of trends you've been seeing in terms of the top line growth or declines and EBITDA profitability over the last couple of years?

Yes. So, um, and and I've, you know, that'll all be part of the, you know, the the sort of statements but just give you kind of a quick quick frame. Uh, you know, Peter took you through the comps of DXL, uh, of of late. Uh, you know, we've we've been about the same level of of, uh, comp as, as DXL in the last

A period of time. So we, you know, we have, uh, continued to work on our, uh, you know, in the environment where the— the moderate value customer has been squeezed. Uh, we've continued to work hard on our cost structure, and we've continued to work hard on making sure our marketing expenses are right. And so, so that's all— that's all, you know, evident in the, the EVA, um, flow through that we— that we have on our— on our revenue. And, you know, we think that, again, both of these businesses are in much better, uh, you know, versus our standalone plans. Uh, if you will, we— the reason we're coming together is we see incredible ability to, you know, find the— you know, and deliver on these synergies— these cost synergies as well as the commercial synergies we've been referencing. Uh, and that— that makes the, the business, uh, work really well. And so we think it's a great deal for the DXL shareholder as— as it is.

As it is for our, our own, uh, our own organization to, you know, combine and, and, you know, combine forces and get stronger.

Okay, got it. Uh,

Understood. I think that will be all my questions. Thank you. Sure.

Michael and, uh, Jeremy, thank you so much for asking your questions. Operator, it looks like there's no one else left in the queue with questions. So I would just like to thank everyone for their attendance on the call today. Know that we have a number of follow-ups. As Peter mentioned, we'll be working on the proxy, and you should see that in the first quarter at some point. And we know we'll have ongoing discussions and need to follow up with all of you. So I wish you the very best of holidays if we don't talk to you live, and we look forward to catching up with you in the weeks and months ahead. Have a wonderful holiday.

Today's conference call—thank you for participating. You may now disconnect.

Thank you for standing by.

And welcome to Destination XL Group's third quarter fiscal 2025 earnings conference call.

At this time, all participants are in a listen-only mode.

After the speaker presentation, there will be a question-and-answer session. To ask a question during the session, you will need to press star 1-1 on your telephone. To remove yourself from the queue, you may press star 1-1 again.

I would now like to hand the call over to John Cooney, Chief Accounting Officer. Please go ahead.

Thank you, operator, and good afternoon, everyone.

As you saw earlier today, we announced a merger agreement between DXL and Full Beauty, as well as our third quarter fiscal 2025 earnings results.

Joining me today are Harvey Kanter, DXL President and Chief Executive Officer.

Peter Stratton, CXL Chief Financial Officer, and Jim Fogerty, FullBeauty's Chief Executive Officer and incoming Chief Executive Officer of the combined company.

Today's discussion contains certain forward-looking statements concerning the announced merger between the company and FullBeauty, including an overview of the transactions, as well as future opportunities and expectations. The combination of these businesses will provide

Look forward to looking. Statements are subject to various risks and uncertainties that could cause actual results to differ materially from those assumptions mentioned today, due to a variety of factors that affect the company.

Information regarding risks and uncertainties is detailed in the Company's filings with the Securities and Exchange Commission.

During today's call, we will also discuss some non-GAAP metrics that provide investors with useful information about DXL's third quarter financial performance.

Please refer to our earnings release, which was filed this afternoon and is available on our investor relations website at investordxl.com, for an explanation and reconciliation of such method measures.

I would now like to turn the call over to DXL CEO, Harvey Kanter. Harvey.

A pivotal step in redefining inclusive apparel as DXL and Full Beauty join forces to create a retailer that sets a new standard for choice, quality, and customer experience.

On our call today, Jim Fogerty and I will begin by sharing additional insights about our two companies and the compelling benefits of this combination.

I will then turn it over to Peter to review DXL financial results for the third quarter of 2025, which were announced today in a separate release.

I'll now begin by walking through why we believe our business fits so well together.

It starts with our complimentary emissions and the ways in which we target underserved consumers, and the fragmented markets that provide significant growth opportunities.

At DXL, we are driven by a mission of providing big and tall men the freedom to choose their own style.

We offer the best brands through our broad and deep assortment of national and private brands, most of which are exclusive, across styles that provide options for most any occasion.

Our clothes are made with the highest standards of construction and quality in our stores. Our customers will find a level of service that gives them a better experience than they can get anywhere else, bar none.

We are solving problems for our customers. The big and tall man has largely been ignored by the apparel industry. There are few brands, fewer styles, and even fewer sizing options out there at most other retailers for the big and tall man. His clothes are largely chosen for him, not by what he likes, but purely by what exists.

DXL fixes that.

In so doing, we create significant growth opportunities for our business.

And when the big and tall man shops at one of our stores, they are getting the brand's quality, style, and experience that they simply cannot find anywhere else.

Jim will tell you more about Full Beauties' history, but they also solved this issue.

They solve this issue by building on a business that has been dedicated to serving plus-size women and big and tall men since 1901.

Their company's journey has been marked by transformation, evolution, and purpose, adapting to new technology platforms and customer behaviors.

Hello, Beauty. Today provides an unparalleled fit and experience, with each product meticulously crafted to cater to the customer's needs.

Full Beat is a broad and balanced portfolio. It offers thoughtfully curated assortments aligned with evolving customer preferences, fashion and trends, and a wide range of end use, price points, looks, and styles.

Our companies share a belief in the importance of rigorous design.

Sizing and manufacturing processes. And this focus has allowed both Full Beauty and DXL to distinguish themselves in the market and build strong loyalty with our respective customer bases.

The merger of equals we are announcing today creates a scaled, category-defining retailer for inclusive apparel.

Together, we have unmatched know-how, manufacturing facilities, and proven capabilities to deliver high-quality, bespoke pieces for our customers that are not merely just graded up, but thoughtfully created with big and tall and plus-size individuals in mind from the very start.

This is what has set each of us and our companies apart in the broader retail industry, and we are confident that it will be foundational to our success as we enter this next phase.

By building on our combined strengths, we will meet the opportunity by creating a powerful engine for innovation.

Combining data science digital scale.

Proprietary fit technology and differentiated store expertise.

It also strengthens our financial position, providing us the profitability and flexibility to generate strong free cash flow.

Expect to capture will provide the resources to reinvest in our business and further reduce our leverage.

Ultimately, together with Full Beauty, we will be better positioned to create value for our shareholders by serving our customers across the plus-size and Big and Tall apparel markets with more brands, more styles, and more options, whether they shop with us in our stores or online. And with that, I'll hand the mic over to Jim so he can share more about how this combination will create a scaled, category-defining retailer. Jim?

Thank you, Harvey. This is an exciting day for both DXL and Full Beauty, and I'm pleased to be speaking with you all about this transaction.

Today, we are creating a new entity that we believe is greater than the sum of its parts. Today’s inclusive fashion market remains highly fragmented, with few players offering comprehensive solutions for plus-size and big and tall customers.

Together, we are building the first true-scale, profitable omni-channel platform that finally treats sizing inclusivity as a category, not a niche. This is not a merger to simply get bigger; it is a merger to become a category-defining leader and to create more value than either business could deliver on its own.

Despite the underserved market opportunity, the sector has traditionally lacked coordinated offerings, leaving many customers with limited choices and inconsistent shopping experiences.

We will be well-positioned to invest in long-term growth.

Joining forces as one best-in-class inclusive sizing retailer. Our combined company will be one of the largest players in the inclusive sizing clothing sector by both sales and store count.

For the last 12 months ending October 2025, DXL and FullBeauty generated approximately $1.2 billion in combined net sales.

Assuming no proforma adjustments, adjusted EBITDA was approximately $45 million.

With the $2,500 in expected annual run rate, cost synergies adjusted EBITDA for the LTM would have been approximately $70 million.

We'll talk more about synergies in a moment.

Uniting full Beauties leading. Pure Play direct to Consumer capabilities, with DXL, expertise in men's big and tall. Retail will create a powerful Omni Channel and data driven platform.

Together, we will have a customer database of approximately 34 million households. Our leading director, consumer presence, will be 73% of total sales, and our nearly 300 stores will be 27% of total sales.

With more first-party data, the combined company will be better able to offer more personalized marketing, make better inventory decisions, and deliver higher customer lifetime value.

Fullbeauty, distinctive women's brands, as well as Big and Tall and King Size brand.

We'll join DXL, the big and tall specialty, to create a meaningfully expanded portfolio of both private and national brands.

Our combined product mix is expected to be approximately 54% women's and 46% men's, delivering day-to-day staples.

Active, wear intimates, accessories, and decor, spanning value to premium across lifestyle and locations.

The differentiated core capabilities that each of our companies bring to the table will enable us to accelerate growth.

DXL store infrastructure and expertise creates potential for brick-and-mortar. Expand expansion at Full Beauty.

The Excel is, well, established relationships with the national brands, provide opportunities for king-size and full Beauties, women's brands to enhance their merchandise offerings.

Full Beauty brings an existing private label credit card program that can be brought in to include the Excel.

A universal card website infrastructure that can increase cross-selling and sales at both DXL and the full Beauty Marketplace, expertise that can be leveraged to increase DXL sales.

As well as a print catalog capability that can be leveraged to increase the Excel sales.

Further, we will be able to accelerate the work. Both companies are already doing so to remain agile and responsive to evolving customer needs and shopping habits.

Our shared focus on fit, flexibility, and ongoing customer support positions the combined company to meet new and existing customers at every stage of their weight fluctuation journey, including those using GLP-1 medications, through offerings such as the Excel Fit Map and full Beauty's free exchange program.

FullBeauty has demonstrated an ability to drive commercial synergies across previous integrations, and we expect to apply that same playbook to drive incremental commercial growth with DXL, through Affirm and Universal Card, platform cross-selling, and marketplace expansion.

Let me now turn it back to Harvey to discuss the technical aspects of the transaction and certain of the financial benefits.

Jim.

Let me start with an overview of the merger transaction.

Under the terms of the agreement, FullBeauty will merge with a newly formed subsidiary of DXL, with DXL remaining as a publicly traded entity.

The transaction is 100% stock-for-stock, with DXL shareholders owning 45% and full Beauty shareholders owning 55% of the combined company.

As part of establishing a strong financial foundation for the combined company, at closing a certain, a certain a full Beauties equity and debt holders will complete a committed. Subscription of 92 million through the sale of common stock in exchange for a combination of new equity and outstanding debt equiz. This will result in a Term Loan outstanding. At closing of approximately 172 million with a maturity of August 2029.

The combination is expected to generate $25 million in run-rate annual cost synergies by 2027.

We intend to begin capturing these synergies promptly after the closing of the transaction, with a significant portion to be actioned within the first 12 months.

We will take a scientific approach to driving efficiencies across the combined company through cost of goods sold, organizational, and non-organizational expenses.

Taken together, this will allow us to streamline our factories and resources for product creation, while maintaining agility to pivot sourcing operations to mitigate tariff exposure.

We will also be able to consolidate our workforce and streamline corporate functions to create a leaner, more efficient organization.

Finally, by unifying our business overhead across the combined organization, we will benefit from improved pricing efficiency on corporate programs.

Streamlined customer-facing spend categories and reduced spending for non-organized and contract programs.

Turning now to the roadmap to completing the transaction and our integration plans.

Looking ahead, the transaction is expected to close in the first half of fiscal 2026, subject to customary closing conditions and approval by shareholders of DXL.

I'm pleased to note that the boards of directors of both companies were unanimous.

Approved the merger.

Under which the parties have agreed to vote all their respective shares in favor of the transaction.

These agreements represent approximately 19.4% of DXL's existing voting shares, further reinforcing our confidence in a successful closing.

Upon close, the company will trade under the ticker symbol of DXL.G. The combined companies' headquarters will remain in Canton, Massachusetts, and the combined company expects to maintain a significant presence in New York, Indianapolis, and El Paso.

The combined company will be led by a proven management team that includes members from both organizations upon closing. Jim will serve as our Chief Executive Officer, and Peter Stratton, DXL's current CFO, will serve as the Chief Financial Officer of the combined entity.

This experienced team is highly qualified to deliver on the promise of this merger.

The board will be composed of nine directors: four directors from each company, and one independent director to be mutually agreed upon by the go-forward directors, prior to closing.

Thank you, Harvey, and good afternoon, everyone.

I'll just take a

few minutes to run through the highlights of DXL, third quarter, financial performance.

Net sales for the third quarter were $101.9 million as compared to $107.5 million in the third quarter of last year.

The decrease in net sales was primarily due to a decrease in comparable sales of 7.4%, partially offset by an increase in non-comparable sales from new stores.

Although sales were below our expectations, the quarterly comp was an improvement from negative 9.3% in the first half of the year.

We continue to see a shift towards our value-driven private brands as customers remain cautious with their discretionary spending.

These private brands sell at lower average unit retails but generate higher margins.

By month, our comps were negative 6.7% in August, 9.3% in September, and negative 5.8% in October, with October our best month year to date.

Our gross margin rate, inclusive of occupancy costs, was 42.7%, as compared to 45.1% in the third quarter of last year.

Do you leverage on occupancy? Costs contributed 210 basis points of decline in merchandise. Margins decreased by only 30 basis points, primarily impacted by promotional offers and in tariff increases.

Tariffs impacted our third quarter margins by approximately 60 basis points, and we expect the impact on our fiscal year 2025 margin to be approximately $2 million.

We did see favorability in Q3 due to the shift in product mix from National Brands to private brands.

Our SG&A expense as a percentage of sales increased to 44.7%, as compared to 44.1% in the third quarter of 2024.

Our ad-to-sales ratio for Q3 was up slightly at 6%, from 5.7% last year, and we have been seeing strong returns from our paid, search, and social channels.

You could talk for the quarter came in at a loss of $2 million, as compared to earnings of $1 million for the third quarter of last year.

We continue to feel very good about the overall strength of our balance sheet.

Total inventory levels are down 4.6% to last year, and clearance levels were maintained at approximately 10%, which is in line with our target and with last year.

We finished the quarter with cash and short-term investments of $27 million, as compared to $43 million a year ago, with no outstanding debt in either period and excess availability of $73.6 million under our revolving credit facility.

To lower earnings.

Now, I'll pass it back to Harvey for some concluding remarks.

Thanks Peter and Jim.

On behalf of Jim and I, we wanted to take a moment to recognize our team as both a DXL and Full Duty for their dedication and hard work every day.

Thank you as a reminder, to ask a question. You will need to press star 1, 1 on your telephone, to remove yourself from the queue. You may press star 1 1 1, again please, stand by while we compile the Q&A roster,

Our first question.

Coming from the line of Jeremy Hamlin of Craig-Hallum Capital Group, your line is open. Jeremy?

Thanks, and congrats on the, uh, the transaction. Um, I wanted to start by just getting a fuller picture of, um, the expected capital structure post-closing. Um, you know, we see the $172 million Term Loan, um, but wanted to just get a sense for, uh, kind of the expectations of where total debt would be post-closing, you know, kind of expected cash.

Post-closing. And then, here, a little bit more about the expected, um, you know, terms within the term loan.

Uh, sure, so, so Jeremy let me, let me start with, um, with that question. So, first of all, I should just note that. Um, we will have an awful, lot more information coming out in the proxy statement, which, uh, we're going to be working on soon. But I'll, I'll try to give you some sense of, um, how, how we're we're thinking about it. So, um, you know, as you saw in the release, um, what's, what's happening is it's, it's a 100% stock stock for stock, uh, transaction. Uh, we will be welcoming new shareholders into, uh, the company who are are shareholders of of full

Beauty today. Um, and to answer your question about debt, the total debt that we're expecting, um, upon closing is the $172 million,

I would just add that the maturity is out to August of 2029 on the term loan, and it's, uh, LIBOR plus 750.

Great. Okay. And so then, uh, right, so—

ZXL has had the $27 million here in cash. So just in terms of understanding what the, you know, the balance sheet looks like for, uh, for Full Beauty. Um,

So, the total debt load is going to be $172 million post-close. Um, and then, just kind of an estimate—I was looking to see an estimate of what the post-closing cash balance will be.

You would expect for the combined entity.

Yeah, so, so Jeremy again. I'm I'm I'm not going to get into to those pro-forma numbers right now. Um, we will have a lot more information coming in the the proxy statement. Um, but as of right now, what we, what we're announcing is, we wanted to make sure that everyone was clear on the, the term loan, uh, that that, uh, Jim just referenced, um, that that's going to be the, uh, the the outstanding debt that we're expecting upon closing.

Okay, got it. Um, and then just uh, another 1 kind of post closing combined entity expectations around, you know, capex. Given that, um, fbb is, is more of a DTC business. Um, but just on a go forward basis, you know, in kind of assuming some of the Investments that you'll be making in the business, but kind of the ongoing capex, uh, that you would expect for The Entity.

Lie. I, I guess is the best way to say it. You know, I I think 1 of the most exciting things about this transaction is the commercial synergies that that both sides, see. Now, of course, we both have infrastructure and and maintenance capex that that needs to be maintained whether it's um, maintaining distribution facilities investments in it, in technology. Um, but when I, when I think about commercial synergies, you know, there will be questions about, um, where do we want to go with store operations? That's certainly 1 of the strengths that we bring to this transaction and I think, um, you know, full full full Beauty does not operate any stores today. So I think, you know, we will we will be looking at all kinds of commercial synergies, and Industrial logic, that makes sense.

Um, that's going to become more clear, I think, as the two teams start working together and coming up with what are those operational plans that we want to be pursuing, um, in the immediate term.

Got it? Maybe this uh, question more for Jim. But Jim wanted to understand, you know, obviously it's it's been a, you know, challenging couple of years for for DXL, um, and you know, wanted to understand what fbb was seen.

Um, in terms of Trends, you know, kind of sales Trends over the past year and whether or not, you know, we've kind of the number of uh, brands that you have on the Under the Umbrella. If there are particular, uh, brands that are are, are very strong, um, you know, in those that maybe are any of the brands getting shed, um, kind of post closing.

Uh, no plans for that. Currently, um, you know, all of our Brands, um, certain, you know, serve a purpose. If you look at, uh, I think there's a slide in the investor presentation. You'll see that we break our Brands down into, um, what we've called the new mall Brands, and the classic Mall Brands. Uh, our new mall Brands, uh Service, uh, Millennial younger Gen X, uh, demo. And then the classic Mall brands have historically, uh, service to sort of older Gen X. Um, and, and, and to Young Boomers, uh, uh, demo and we we've leaned into, um, the, the new mall and we've seen some, um, you know, better results there. And then, we're, we're, we're continuing to know the classic Mall, um, you know, is for the main stay of the business for for uh, many, many years. And so, we've, we both up, uh, a networking effect within that classic mall where we have very loyal customers, uh, you know, a big percentages for, uh, business.

Are done by customers who bought more than four times from us lifetime. Uh, we have a very strong extended plus-size, uh, business within that classic wall, and we try to drive—uh, we'll take a new customer into classic mall in one of our brands, let's say one within, and then that, uh, that relationship we'll try to grow, uh, with a, you know, basically a strategy of driving her, and you'll see where we operate with a universal web cart.

So if you ever know load into 1 within do, you would see other surrounding Brands and we try to then encourage that customer to not only be a customer of all within but, uh, you know, if she needs something nice for the weekend, she might move over to Romans if she needs Workwear, she'll move over to Jessica London. Uh, and so we're, we're, we're basically trying to build multiple Brands relationships, uh, with that customer, and then also multiple categories, move her into multiple, uh, categories as well and then classically direct, you know, consumer, um, you know CRM, you know, customer lifetime value of driving. Um, just getting more uh transactions and more loyalty with that customer over time. So I'm giving you like the quick history and then we we as a company introduced uh uh bought a brand called eloquii and we've built out a a new mall presence toward that younger demographic. Um, and so we're seeing nice uh um nice performance uh with with that.

That's super important. But also we believe the, um, you know, and would reinforce that the commercial synergies in the transaction or exciting, you know, the capacity and capabilities that we bring, uh, to the DXL brand and vice versa. Um, you know, I won't, I won't go through that all again, but we, we are, we're, we're pretty excited about that. So I'll I'll, I'll I'll leave it there.

Great, last one actually kind of building on that point in terms of, uh, you know, managing kind of two really, uh, separate businesses that are in the same, you know, servicing similar customer sets. Um, you know, DXL has been very, um, you know, uh, kind of hesitant to lead with promotion, um, and, and fairly disciplined now for the past, you know, certainly since Harvey's tenure. Um, just want to understand in terms of, you know, thinking about how, um, you know, the FB portion of the organization versus DXL—um, you know, I'm sure this has been something discussed, but in thinking about how to, uh, you know, kind of to market the brands and how to position from a, uh, a price point and promotion, how do you create synergy, um, among those two organizations?

So, so let me start with that one, and then Jim, I'd love for you to comment on some of the specific questions about FB. So, um,

So, Jeremy, so, you know, we—we mentioned we're targeting $25 million, a run-rate, cost synergies. Um, we're going to start capturing those, we think, pretty quickly after closing. Um, there will be a lot of actioning on that coming in the first 12 months.

Um, but I think there's going to be opportunities with cost of goods. Um, we both have a pretty diverse, um, manufacturing footprint around the world. Uh, there's certainly going to be organizational efficiencies and reduced overhead. Um, but ultimately, you know, I think what we collectively are excited about are those commercial synergies I was alluding to earlier, and how can we accelerate growth through cross-selling, uh, cross-channel capability stores, DTC? I—I really think this is a tremendous opportunity for each company to bring their best attributes and skill sets, and be able to build upon each other's distinct capabilities.

Yeah, and I I just add to it. Um, so so first, you know, we take the, the job on the cross synergies, you know, quite seriously. And then, that's, that's, that's that wouldn't be surprising. But, um, we and as Peter said, we're going to get at it, you know, promptly. Um, and and it's, you know, it's all, it's a whole. Uh, and and we uh, the 2 organizations have spent a lot of time working through

We think, uh, you know what, we, where we think those synergies are, and and details, um, and you know, um, organizational details, but also contracted details and, and so, it's, it's in the same places that Peter's talking about the sourcing organization, uh, shared contracts over time, uh, you know, the organizational piece, you know, we don't, is it sort of the, the streamlining of leadership, of course, is obvious. But then also, um, inside the organization, just, you know, trying to be as, uh, as, uh, lean as we, uh, can be. Um, and then also, uh, you know, outbound shipping, uh, inbound Logistics, all of those businesses. In addition to the core product costs, uh, we're going to, you know, then as you know, of course, the duplication of audits and texts, and all all of those sort of normal things. And so we'll, we'll work that piece, uh, in terms of of the organizations together. Uh, if you, if you think about it, we're we're still in the fight.

Stages. But we have the, we have a great, uh, brand in King Size, big and tall brand, uh, and DXL. Of course, you know, this is a very powerful brand in big and tall, uh, and we've, we've sort of, uh, known and respected one another's brands for years. They're bigger than our King Size brand, uh, by a decent, uh, uh, click. Uh, but we are a little bit more value-moderate with King Size and they're a little bit, you know, um, a lot more moderate. So we think that

You know, there may be some really nice, uh, crossover potential that we have to work through from a, you know, making the—the—the two brands will absolutely have a place. Um,

Together and we we've always found what, you know, 1 plus 1 equaling 2 and a half sort of thing and making it making them stronger. Uh, but we, you know, we'll we'll try to be as lean and efficient and all of that, and be very, you know, even when we're thinking about capital and utilization of capital be very, uh, disciplined, uh, uh, Capital allocators, uh, you know, as we as we serve work, these things together.

Great, thanks for taking my questions. Best wishes—I’ll hop out now. Sure, thank you.

Thank you.

Our next question.

Next comes the line of Michael Baker of D.A. Davidson. Your line is open, Michael.

Uh, okay. Uh

The transaction. Um, can I follow up with on Jeremy's question about the capital structure? Um, again forgive my ignorance and maybe it's in here somewhere. But, so just to be clear, this is, we're not issuing any more stock here. It's still the same, uh, roughly what 50, 58 million shares of of, of stock, I would say or is that, all right, so that that same stuff, uh, stock, I was standing number that we're using

Yeah, no, no mic so. So it is going to be a stock issuance deal. We will be issuing stock to combine the 2 companies. Um, you know, as as as we were talking about, um, Jim was mentioning, you know, full Beauty brings a a high, uh, strong cash flowing business DXL. Uh, has a strong balance sheet. Um, you know, there there's there's a lot of synergies that we think we'll find. But, but this is essentially a, uh, a stock deal.

So, so I guess to then, you know, you got to do— we know how much stock is going to be issued or, or what the, you know, how much we're, we're—

Yeah, so we so we as as we mentioned in the terms, it's going to be 55%, uh, to full Beauty and 45% to DXL.

Will be the pro forma ownership.

Understood. Okay, I I got you. Okay. Uh, and then um, for again on the capital structure, um, is there. So so the 172 million terminal and that that's that full beauty doesn't come with any debt because I know in the past full Beauty, had existing debt. But has that been paid down? Or is there full Beauty, existing debt that we need to?

Consider.

Right. So, so that 172 million that Jim was referring to, that is full Beauty debt. That is being assumed by the Excel on the transaction. Um, as Jim was mentioning in his prepared remarks, the, um, uh, the the, the the owners at at full Beauty have um uh equit uh a significant chunk of that 90, there's a 92 million pay down which which brings us down, uh, to the 1 172. Um,

And and um the extension uh the the the term debts being extended out to um August of 29.

Okay.

Okay, thanks. So that helps clear it up. Um,

Now, can I ask a full? So, so based on the trailing 12 month numbers that, that you provided of 1.2 billion and 455 million in in ibida. And, you know, we know, um, DXL G's last 12 months numbers of about 445. And, um,

uh, I missed my number here, but about 6 million in trailing 12 months Eva, so we can back into a full. Beauty, would be doing over the last 12 months, which corrected if I'm wrong, but that seems to be down a little bit from the last. I think, full Beauty. The last time we have numbers from, you was from your icr presentation for fiscal year 2023. So, I guess, uh, again following up on a previous question can

Jim, can you talk about the types of trends you've been seeing in terms of the top-line growth or declines, and EBITDA profitability over the last couple of years?

Right. And so, so that's all, that's all, you know, evident in the, the Eva, um, flow through that, we, that we have on our, on our revenue. And, you know, we think that again, both of these businesses are in much better, uh, you know, versus our Standalone plans. Uh, if you will, we the reason we're coming together is we see incredible ability to, you know, find the, you know, and deliver on these synergies. These cost synergies as well as the commercial synergies. We've been referencing. Uh, and that that makes the the business uh, work really well. And so we think it's a great deal for the DXL shareholder as as it as it is, for our our own, uh, our own organization to, you know, combined and and you know, combine forces and get stronger.

Okay, got it. Uh,

Understood. Uh, I think that will be all my questions. Thank you. Sure.

Months ahead, have a wonderful holiday.

This concludes today's conference call. Thank you for participating. You may now disconnect.

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