PSG Performance Sports Group Oct 2015 Investor Presentation

8/20/2019 PSG Performance Sports Group Oct 2015 Investor Presentation

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INVESTOR PRESENTATION OCT 201


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Forward-Looking Statements

Thispresentation includes forward-looking statementsabout PerformanceSports GroupLtd. (the “Company”) withinthe meaning of applicable securities laws, includingwith respect to,amongothers, ourcurrent andfutureplans, including

growthopportunities,our expectationsand intentions,specificallywith respect to our supply chainprofitability improvement initiative, our cash flow improvement plan and the anticipatedresulting$30M net working capital reduction in fisc

results, levelsof activity, performance, achievements or goals,including, useof Q30 Sports LLC’s (“Q 30”) patent and technology assetsin the development of products thatare intended to reducethe incidence of mTBI in sportsand athlet

future payments to Q30 in connection with certain product development and sales milestones being achieved, obtaining and maintaining approvals from the FDA and Health Canada that are necessary to market and sell products co

applicable licensed patentand technology assets, andsuccessfully bringing to marketproductsthat mayhave theability to reducethe incidenceof mTBI in sportsand athletic activities,opening an additional6-8 Ownthe Momentretail expe

thenext several years,our Ownthe Momentretail experiences being profitable in 18-24 monthsand being less than $0.01 dilutive to Adjusted EPSin fiscal2016and accretivein fiscal2017,or other futureevents or developments(collectivel

looking statements”). Thewords “may”, “will”, “would”, “should”, “could”, “expects”, “plans”, “intends”,“trends”,“indicates”,“anticipates”,“believes”, “estimates”, “predicts”, “likely”, or “potential” or thenegative or other variationsof the

othercomparable wordsor phrases,are intended to identify forward-lookingstatements.

Forward-looking statements arebased on current estimatesand assumptions made by us in light of ourexperience and perception of historical trends, current conditions and expected future developments, as well as other factors that we

appropriate and reasonable under the circumstances, but there can be no assurancethat such estimatesand assumptions will prove to be correct. Certain estimatesand assumptions arematerial factors made in preparingforward-looking

and management’s expectations, includingcertain estimates with respect to ourmarket share andassumptionswithrespect to macroeconomic factors such ascurrencyrates, labor,raw materialsand other input costsremaining at ornear cu

the determination of the impairmentof assets, claim liabilities, income taxes,employeefuture benefits,goodwill and intangibles.

Many factors could cause ouractualresultsto differmaterially from those expressedor implied by theforward-looking statements,including, without limitation, the followingfactors: inabilityto maintain and enhancebrands, inabilityto int

and innovative products, intense competition in the sporting equipment and apparel industries, inabilityto own, enforce, defendand protect intellectualproperty rightsworldwide, costs associated with potential lawsuits to enforce, defen

intellectualproperty rights, inabilityto protect ourknown brandsand rightsto usesuch brands, infringementof intellectualproperty rightsof others, inabilityto translatebooking orders into realized sales,includingrisks associated with ch

mix or timing of orders placed by customers, seasonal fluctuations in our operating results and the trading price of our common shares, decrease in popularity of ice hockey, baseball and softball, roller hockey or lacrosse, reduced popu

NationalHockey League, Major LeagueBaseballor other professionalor amateur leagues in sportsin which ourproductsare used, adverse publicity of athletes whouse ourproductsor thesports in which ourproductsare used, inabilityto e

party supplierswill meet quality and regulatory standards, reliance on third-party suppliers and manufacturers, disruption of distribution systems, loss of significant customers or suppliers,loss of key customers’ business due to customer co

changein the salesmix towards larger customers, costof raw materials,shippingcosts and othercost pressures, risks associatedwith doingbusinessabroad, inability to expandinto international marketsegments, inability to accuratelyforec

for products, inventory shrinkage,excess inventory due to inaccurate demand forecasts,product liability,warranty and recall claims, inability to successfully design products that satisfy testing protocols and standards establishedby testing

governingbodies, inabilityto obtain and maintain necessaryapprovals in respect to products that maybe considered medical devices, inabilityto successfully open and operate Own TheMoment HockeyExperience retailstores,inabilityto

implement our strategicinitiatives on anticipated timelines, including our profitability improvement initiative, risks associated with our third-party suppliers and manufacturers failing to manufacture products that comply with all applicab

regulations,inability to sourcemerchandise profitably in the event new trade restrictionsare imposed or existing trade restrictionsbecome more burdensome, departure of seniorexecutives or other key personnel with specialized markeand technical skills, litigation, including certain classaction lawsuits, employment or union-related disputes, disruption of information technology systems, including damages from computer viruses, unauthorized access, cyberattack and ot

vulnerabilities,potential environmental liabilities, restrictive covenants in our credit facilities, increasinglevels of indebtedness, inability to generate sufficientcash to fund operations or service our indebtednessfailure to make,integrate,a

new acquisitions, inability to realize growthopportunities or cost synergiesthat are anticipated to result from new acquisitions such as Easton Baseball/Softball, undisclosedliabilities acquired pursuant to recent acquisitions, volatilityin the m

forCommon Shares,possibilitythat we will need additionalcapital in thefuture, incurrence of additional expenses as a resultof the loss of ourforeign private issuerstatus, assertionthat the acquisition of the Bauer Hockey Business at the

Canadian IPO was an inversion transaction, our current intention not to pay cash dividends, dependence on the performance of subsidiariesgiven the our status as a holding company, potential inability of investorsto enforce judgments

Company and its directors,fluctuations in the valueof certain foreign currencies, includingthe Canadian dollar, in relation to the U.S. dollar, and otherworld currencies, general adverse economic and market conditions,changesgovernment

includingtax laws andunanticipated taxliabilitiesand naturaldisasters andgeo-political events, as well as thefactorsidentified in the"RiskFactors" sectionsof ourannualreporton Form10-Kand quarterlyreporton form 10-Q, which are

EDGARat www.sec.gov andSEDARat www.sedar.com.

The purpose of forward-looking statements is to provide the reader with a description of management’s expectations regarding the Company’s financial performance and may not be appropriate for other purposes.Readers should not p

reliance on forward-looking statements made herein. Furthermore, unless otherwise stated, the forward-looking statements contained in this presentation are made as of the date of this presentation, and we have no intention and u

obligation to update or reviseany forward-lookingstatements,whether as a resultof newinformation, future eventsor otherwise,except as required by law.The forward-looking statements containedin this presentationare expresslyqua

cautionary statement.

Presentationof Financial Information

The pro forma information contained in this presentationshould notbe considered to be whatthe actualfinancialpositionor other results of operations would have necessarily been had the Companyand EastonBaseball/Softball operatecombined company,as, at,or forthe periods stated.

This presentation makes reference to certain non-GAAP measures, including Adjusted Gross Profit, EBITDA, Adjusted EBITDA, Adjusted Net Income, Adjusted Earnings Per Share (EPS), Free Cash Flow and certain measures expressed on

currencybasis. Thesenon-GAAP measures arenot recognized measures under GAAP anddo nothave a standardizedmeaning prescribed by GAAP, and aretherefore unlikely to be comparable to similar measures presentedby other compa

these measures areprovided as additional information to complement those GAAP measures by providing further understandingof results of operationsfrom management’s perspective.Accordingly, they shouldnot be considered in isolat

substitutefor analyses of financialinformation reported underthe applicable accountingstandards. For the relevant definitions and reconciliationsto our reported results,see the Appendix to thispresentation, including “Non-GAAPMeasure

All$ references in this presentationare to U.S. dollars unlessotherwisestated.

Thispresentation is copyright2015 PerformanceSportsGroupLtd. All rights reserved.

http://www.sec.gov/http://www.sedar.com/http://www.sedar.com/http://www.sec.gov/


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Who We Are…

• Performance Sports Group (PSG) is a leading

developer and manufacturer of high performance

sports equipment and related apparel• We are the No. 1 global brand in hockey and No. 1

North American brand in diamond sports with an

expanding presence in the growing lacrosse market

• Our mission is to elevate player performance and

protection through athlete insight and superiorinnovation

• Our brands have a rich history of innovation,

authenticity and market leadership, with BAUER

and EASTON dating back to 1927 and 1922,

respectively

• Our company produces predictable and significant

Free Cash Flow

$257

$306

$375

$400

$446

$67

$31

$44$52

$62$69

$11

FY10 FY11 FY12 FY13 FY14² FY1

Revenues

Adj. EBITDA¹

Fiscal year ends May 31. FY15, FY14 and FY13 represent U.S. GAAP; FY12 and FY11 are

FY10 is Canadian GAAP.

¹See Appendix for a reconciliation of Adj. EBITDA.2FY14 includes only six weeks of EASTON revenues and EBITDA.

³FY15 represents constant currency in U.S. Dollars at FY14 FX rates. See Appendix for a

reconciliation of constant currency revenue and Adj. EBITDA, both non-GAAP measure

$ Millions

We Are a Growth Company


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#1 in Hockey

(~56% Share)

Diamond Sports

Leader (~30% Share)

Lacrosse Equipment

Leader (~28% Share)

Soccer & Team

Apparel Engine

A Powerful Brand Portfolio


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A Large and Growing Addressable Market

• We target a ~$3.3B addressable wholesale

market ($2.0B equipment, $1.2B apparel)¹

• Global sporting goods industry grew at a 3%CAGR to $56.9B from 2009 to 2014¹

• Strong dollar value growth due to positive

underlying fundamentals and attractive

purchasing patterns

• Short replacement cycle driven by core youthconsumers outgrowing their equipment and

parents wanting highest performing products

for their children

• One to two year product cycles ensure

relentless flow of latest technologies

• Consistent innovation drives higher average

selling prices

¹Management estimates.

Sport/Category

2014 Estimated

Market Size¹

($ in millions)

Anticipated Ind

Growth Percen

Hockey equip.

(Global) $670Low-Single-Dig

Mid-Single-D

Hockey apparel

(Global)$390

Mid-Single-Dig

High-Single-D

Baseball/Softball

equip.

(Global)

Baseball/Softball

apparel

(Global)

$1,200

$560

Low-Single-D

Low-Single-D

Lacrosse equip.

(U.S., Canada)

Lacrosse apparel(U.S., Canada)

$120

$40

Mid-Single-Dig

High-Single-D

Mid-Single-DigHigh-Single D

Soccer team

apparel

(U.S., Canada)

$300Low-Single-Dig

Mid-Single-D


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THE PSG PLATFORM


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Hockey Baseball / Softball SoccerLacrosse

PSG Functional Platform – Enabling Growth

PSG Platform Advantage

Independent Consumer & Customer-Facing Functions – Driving Growth

SalesResearch, Design

& Development

Advance R&DSourcing &

Manufacturing

Distribution &

LogisticsIT & HR Finance & Legal

Marketing

Authentic Brands / Consumer Insight / World Class R&D / Strong IP

/


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• ~4% of annual revenues spent on R&D

• Strong track record of technical design

and product development through five-year innovation cycle

• Portfolio includes 638 global patents¹

• Team of more than 75 designers,

engineers and developers

• Legacy of redefining product categories

• R&D, technology and materials

leveraged across multiple sports

• Utilize strategic partnerships to enhance

R&D (e.g. McGill University, UPMC)

World-Class R&D is a Competitive Advantage

¹Includes design patents and patents pending.

Innovative Technologies

Base Layer feat. 37.5™

Technology: Fast-drying

moisture management

delivers high level of

performance

EASTON Mako Torq:Patented rotating handle

allows batter to get barrel into

hitting zone quicker and keep

it there longer

TUUK Lightspeed Edge:

Revolutionary, trigger-basedsystem allows for immediate

replacement of steel and tight

turns

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Shared R&D Across Our Sports Platform

• Collaborative product

development process exemplifies

potential of our integratedplatform

• Multi-disciplinary approach to

product development is

organized by product categories

within each sport

• Takes advantage of our category-

based integrated R&D platform

• This approach has been

successful in leveraging

innovation, such as helmet

technology between BAUER and

EASTON/CASCADE

BAUER RE-AKT 100

Hockey Helmet

EASTON Z7 Baseba

Helmet

Cross-Pollination Case Study – Helmets

Other examples of leveraging technology

across the platform:

•

Lacrosse and hockey gloves• Apparel development

• Under-protective gear

• Carbon fiber

CASCADE R Lacross

Helmet

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• EASTON balanced

quarterly sales and

profitability

• Also improved physical

distribution, raw

material purchasing,

internal manufacturing

and more efficient

utilization of 3rd party

manufacturing

Diversified and Balanced Business Model

Geography DistributionSeason

Rest of

World

CanadaU.S.

• 5,000+ retailers in

Canada, U.S.,Scandinavia and

Finland; 60+

distributors in other

int’l markets

• Low customer

concentration (one

customer ~10% of s

• Most sales are to

independent/specia

retailers:

• Total Hockey

• Pro Hockey Life

• Lacrosse Unlimit

• Monkey Sports

• Baseball Express

• Geographically

balanced sales -

presence in over 60

countries

• ~42% of sales from

outside the U.S., ~24%in Canada

Q1

Q2Q3

Q4

Category

Other

Sports

Baseball/

SoftballHockey

• Broad product offering

across all major

equipment categories

• Increasing team and

related-apparel offering

limits reliability on anyone product type, sport

season or geography

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2012

We acquire lacrosse

helmet maker

CASCADE,

significantly

expanding presencein lacrosse

Proven Acquisition Expertise

2013

We acquire

baseball &

softball bat

manufacturer

COMBAT, entering3rd major sport

2012

We acquire Inaria,establishing one-stop-

shop for team apparel

(hockey, lacrosse &

soccer)

2009

We acquire IP

assets of Jock

Plus, entering

performance

apparel market

2008

We acquire Mission-Itech,4th largest hockey

equipment company,

providing entrance into

roller hockey & expansion

of ice hockey categories

2010

We acquirelacrosse

equipment maker

MAVERIK & enter

2nd major sport

History of Successfull y Identifying and Integrating Accretive Acquisitions

2014

We acquire EastonBaseball/Softball, No. 1

market share company in

North America,

significantly expanding

baseball presence

2015

We acquire a license

technology assets fro

Q30 Sports, a compa

dedicated to develop

products intended toreduce traumatic bra

injury

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Seasoned Management Team

NAME & TITLEYEARS

AT PSGPAST FIVE YEARS EXPERIENCE

Kevin Davis

Director, CEO

13 President and CEO, PSG

Amir Rosenthal

President, PSG Brands and CFO7

CFO and Treasurer, PSG; CFO and EVP of Finance and Administration, and

Treasurer, PSG

Paul Gibson

Chief Supply Chain Officer 27

Chief Supply Chain Officer, PSG; EVP, Product Creation and Supply Chain,

PSG

Rich WuertheleEVP, Bauer Hockey

1

EVP, Bauer Hockey; President, Tools Business Segment, Newell Rubberma

President, Industrial Products & Services, Newell Rubbermaid; President,

North American Sales Organization, Newell Rubbermaid

Todd Harman

EVP, Easton Baseball/Softball


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GROWTH OPPORTUNITIES

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S / S

54

3Grow Apparel Across AllSports

21Significantly Grow Share

in Baseball/Softball

• As we did with hockey, expand our

market share in baseball/softball by:

• Investment in product development• Category management discipline

• Strong consumer connections

• Like hockey 6-7 years ago, our

baseball/softball brands have:

• Market share of ~30%

• Very strong presence in a single category

(with strength in others)

• Approx. a dozen competitors in a

fragmented market

• Leverage technologies of EASTON and

COMBAT

• Territorial expansion of both diamond

sports brands

• Grow apparel to include uniforms

Five Key Growth Opportunities

Continue to Pursue

Strategic Acquisitions

Continue Rapid Growth

in Lacrosse

Continue to Grow in

Hockey

Category Market Share¹

35%

56%

30%

FY07 FY15 FY1

Hockey Baseb

Softb

Strong market share

growth in hockey...

...with

to capiton sim

opportu

in base

softba

¹Management estimates.

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h


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/

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Continue to Pursue



in Lacrosse

Continue to Grow in

Hockey

• Grow sticks – the largest ice

hockey product category

• Expand market share in allother categories

• “First Shift” initiative

• Continue to innovate and

redefine product categories

through 5-year productinnovation cycle

• “Own the Moment” retail

stores to elevate BAUER brand

• Boston store opened Aug 2015,

Minneapolis store to open fall2015

• 6-8 additional stores planned in

key U.S. and Canadian markets

35%

56%

FY07 FY15

Our Hockey Performance

70%+ 65%+ 65%+45%+ 35

Skates Helmets Protective Sticks Goa

#1 #1 #1

#1#

Estimated % Market Share

Estimated Market Share by Catego

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i K G h O i i


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Continue to Pursue


Continue to Grow in

Hockey

• Apparel market highly fragmented

• Apparel revenues increased at

47% CAGR from FY09-FY15

• Inaria acquisition provided team

uniform capabilities

• Continue strong growth in hockey

apparel

• Expand lacrosse uniform launch

• Grow soccer apparel and uniform

market share

• Large opportunity in

baseball/softball

• Continue R&D investments in

apparel


in Lacrosse

Apparel Market Size by Sport¹($ in millions)~$560

~$390

~$300

~

Baseball/Softball Hockey Soccer La¹Management estimates.

Sample Apparel Products

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Fi K G h O i i


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2

54


Continue to Grow in

Hockey1Significantly Grow Share



• CASCADE and MAVERIK enjoy ~28%

market share today

• Targeting market leadership by2016

• Focus on core youth and high

school markets

• Maintain our factory customization

competitive advantage

• Grow in every category

• Expand into team apparel

• Expand women’s equipment

offering (launched in 2013)

• Develop compelling offering for

women’s head protectionContinue to PursueStrategic Acquisitions


in Lacrosse

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Fi K G th O t iti


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in Lacrosse




• PSG is an acquirer of choice

• Global operating platform applicable to

many sports• Steady cash flow generation and strong

balance sheet

• We’ve established an effective

internal process for identifying,

acquiring and integrating target

companies

• Target acquisition parameters

Ability to leverage world-class

performance sports platform

Existing or potential market leaders

Authentic brand equity and strong IPassets

Sports that demand high-quality,

innovative performance products

Continue to Pursue


Continue to Grow in

Hockey

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Q30 S t T ti


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Q30 Sports Transaction

• In Oct 2015, PSG acquired the exclusive, perpetual,

worldwide license to sports-related patent and

technology assets from Q30 Sports for $7M¹

• Q30 patent and technology assets address

important issue of mild traumatic brain injury (mTBI)

in sports and athletic activities

• Q30 technology has shown a reduction in mTBI in

both animal and human studies

• Q30 has developed the first technology that

attempts to reduce mTBI internally rather than

through external protections, such as helmets

• PSG and Q30 have initiated the process of bringing

this promising technology to market with both the

U.S. FDA and Health Canada

• Nov 17, 2015 press conference in New York will

explain the technology and latest research results

¹Future payments of up to $18M if certain product development and sales milestones are achieved.

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$30 Million Supply Chain Initiative


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$30 Million Supply Chain Initiative

• Five-year plan introduced Oct 2014

• Goal: improve pre-tax profit by $30M¹

• Expected benefit to begin FY16 with

$3M, $5-$7M expected in each of FY17-

19, and $9M in FY20

• Focused on efficiency, product cost

reductions and inventory quality

improvements• Expected to increase service levels

throughout supply chain

• Additional focus on improving

distribution footprint and shifting go-

to-market strategy

• Profitability improvements incremental

to previously disclosed $2M of synergies

resulting from EASTON acquisition

¹Target of $30M assumes that unit volumes remain constant and that certain macroeconomic factors such as currency rates, labor, raw material and other input costs willremain at or near current levels. The estimate excludes certain non-recurring or one-time costs associated with the initiative.

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FINANCIAL HIGHLIGHTS

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Historical Financial Performance


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Revenues Adjusted EBITDA¹ Adjusted EPS¹

Historical Financial Performance

$306M

$375M$400M

$446M

$675M

FY11 FY12 FY13 FY14² FY15³

$44M

$52M

$63M

$69M

$116M

FY11 FY12 FY13 FY14² FY15³

$0.55

$0.81

$0.98 $1.00

$1

FY11 FY12 FY13 FY14² FYAdj. Gross Margin¹ ³

40.2% 38.7% 38.3% 36.9% 37.3%

Adj. EBITDA Margin¹

14.2% 13.7% 15.6% 15.5% 17.2%

Fiscal year ends May 31. FY15, FY14 and FY13 represent U.S. GAAP; FY12 and FY11 are IFRS.1A reconciliation of Adj. Gross Profit, Adj. EBITDA, Adj. Net Income and Adj. EPS is included in the appendix. Margin percentages are calculated by dividing applicable margin dollars by revenues.

²FY14 includes only six weeks of contribution from EASTON.

³FY15 represents constant currency in U.S. Dollars at FY14 FX rates. See Appendix for a reconciliation of constant currency revenue, Adj. Gross Profit, Adj. EBITDA and Adj. EPS, all non-GA

measures.

Strong Revenue

Growth, Stable

Gross Margins

Predictable Cash

Flow Generation

Earnings Growth

Exceeds Revenue

Growth

Adj. Net Income Margin¹

5.6% 6.8% 8.9% 8.4% 9.

NYSE/TSConsistent Revenue Growth Across


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Consistent Revenue Growth AcrossFour Seasons

$ Millions

% Year-Over-Year Growth

$154.0

$109.6

$54.9

$86.7

$197.1

$117.1

$62.2

$112.9

$189.5

$176.3

$141.3

$156.

Q1 Q2 Q3 Q4

7%

51%

13%

127%

30%

38%

(4%)

FY16¹FY14 FY14 FY13 FY14FY15 FY15¹ FY14 FY15FY15¹FY13 FY13

28%

Fiscal year ends May 31. FY16, FY15, FY14 and FY13 represent U.S. GAAP.

¹Represents constant currency in U.S. Dollars. See Appendix for a reconciliation of constant currency revenue, a non-GAAP measure.

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Predictable and Significant Free Cash Flow


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Predictable and Significant Free Cash Flow

• Capex has averaged 1.6% of revenues

• To support our growth initiatives, we

expect moderately higher levels ofcapex

• Initiated cash flow improvement plan

focused on streamlining inventory

• Expect $30M net working capital

reduction in FY16• PSG cash flow used for:

• R&D

• Debt reduction (currency neutral

leverage ratio of 4.11x³ and 5.73x on a

reported basis)

• Growth initiatives (includingacquisitions)

$13.3M

$17.5M

$30.8M

$36.3M

$41.5M

$57.1M

FY10 FY11 FY12 FY13 FY14 FY15

PSG Free Cash Flow¹

Fiscal year ends May 31. FY15, FY14 and FY13 represent U.S. GAAP; FY12 and FY11 are IFRS; FY10 is Canadian GAAP.

¹See appendix for a reconciliation of Free Cash Flow, a non-GAAP measure. Free Cash Flow excludes impact from acquisition of Easton

Baseball/Softball.

²Fiscal 2010 through 2015 average.

³A non-GAAP measure defined as TTM average revolver balance less TTM average cash plus actual term debt divided by currency neutral TTM EBITDA.

NYSE/TS

PSG Key Takeaways


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PSG Key Takeaways

• World-class performance sports company with

proven platform

• Our brands have a rich history of innovation,

authenticity and market leadership

• #1 global ice hockey company and #1 brand in

diamond sports in North America

• Leading lacrosse company with estimated 90%

market share in helmets

• Growing organically and via acquisitions in

attractive segments and new sport markets

• Predictable and significant Free Cash Flow

generation

$257

$306

$375$400

$446

$67

$31

$44$52

$62$69

$11

FY10 FY11 FY12 FY13 FY14² FY15

Revenues

Adj. EBITDA¹$ Millions

Fiscal year ends May 31. FY15, FY14 and FY13 represent U.S. GAAP; FY12 and FY11 are

FY10 is Canadian GAAP.

¹See Appendix for a reconciliation of Adj. EBITDA.2FY14 includes only six weeks of EASTON revenues and EBITDA.

³FY15 represents constant currency in U.S. Dollars at FY14 FX rates. See Appendix for a

reconciliation of constant currency revenue and Adj. EBITDA, both non-GAAP measure

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APPENDIX

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BAUER to Open First-Ever Retail Experience


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BAUER to Open First Ever Retail Experience

• Branded as ‘Own The Moment,’ Boston debuted

Aug 2015 and Minneapolis to open fall 2015

• 6-8 add’l stores to open in key U.S. and Canadian

hockey markets over the next several years

• 20,000+ sq. ft. premium stores offer unmatched

fit expertise and product education

• Build-out cost per store is ~$2.5-$3M

• Expected to grow BAUER’s hockey market shareand be profitable in 18-24 months

• Less than $0.01 dilutive to Adj. EPS in FY16 and

accretive in FY17

• Strategic rationale:

Elevate BAUER brand

Deliver unmatched consumer educational

experience

Serve as the ultimate BAUER brand/product

showcase

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Non-GAAP Financial Measures


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Non GAAP Financial Measures

Adjusted Gross Profit, Adjusted EBITDA, Adjusted EPS, Adjusted Net Income/Loss and constant currency are non-GAAP financial measures. These non-GAAP financial

measures are not recognized measures under GAAP and do not have a standardized meaning prescribed by GAAP, and are therefore unlikely to be comparable to similar

measures presented by other companies. When used, these measures are defined in such terms as to allow the reconciliation to the closest GAAP measure. These

measures are provided as additional information to complement those GAAP measures by providing further understanding of the Company’s results of operations from

management’s perspective. Accordingly, they should not be considered in isolation nor as a substitute for analysis of the Company’s financial information reported under

GAAP. The Company uses non-GAAP financial measures, such as Adjusted Gross Profit, Adjusted EBITDA, Adjusted EPS, Adjusted Net Income/Loss and constant currency

metrics, to provide investors with a supplemental measure of its operating performance and thus highlight trends in its core business that may not otherwise be apparentwhen relying solely on GAAP financial measures. The Company also believes that securities analysts, investors and other interested parties frequently use non-GAAP

financial measures in the evaluation of issuers. The Company also uses non-GAAP financial measures in order to facilitate operating performance comparisons from period

to period, prepare annual operating budgets, and to assess its ability to meet future debt service, capital expenditure, and working capital requirements.

Adjusted Gross Profit, Adjusted EBITDA, Adjusted EPS, Adjusted Net Income/Loss and constant currency metrics are non-GAAP financial measures. Adjusted Gross Profit is

defined as gross profit plus the following expenses which are part of cost of goods sold: (i) amortization and depreciation of intangible assets, (ii) non-cash charges to cost

of goods sold resulting from fair market value adjustments to inventory as a result of business acquisitions, (iii) reserves established to dispose of obsolete inventory

acquired from acquisitions and (iv) other one-time or non-cash items. Adjusted EBITDA is defined as EBITDA (net income adjusted for income tax expense, depreciation and

amortization, losses related to amendments to the credit facility, gain or loss on disposal of fixed assets, net interest expense, deferred financing fees, unrealized

gains/losses on derivative instruments, and realized and unrealized gains/losses related to foreign exchange revaluation) before restructuring and other one-time or non-

cash charges associated with acquisitions, other one-time or non-cash items, pre-Canadian initial public offering sponsor fees, costs related to share offerings, as well asshare-based payment expenses. Adjusted EPS is defined as Adjusted Net Income/Loss divided by the weighted average diluted shares outstanding. Adjusted Net

Income/Loss is defined as net income adjusted for all unrealized gains/losses related to derivative instruments and unrealized gains/losses related to foreign exchange

revaluation, non-cash or incremental charges associated with acquisitions, amortization of acquisition-related intangible assets for acquisitions since the Company’s initial

public offering in Canada, costs related to share offerings, share-based compensation expense and other non-cash or one-time items.

All references to “constant currency,” a non-GAAP financial measure, reflect the impact of translating the current period results at the monthly foreign exchange rates of

the prior year period, the effect of changes in the value of the Canadian dollar against the U.S. dollar on our cost of goods purchased for sale outside of the United States,

including the related realized gains/losses on derivatives and the realized gains/losses generated from revaluing non-functional currency assets and liabilities. The reported

foreign exchange impact does not include the impact of fluctuations in Asian currencies against the U.S. dollar and their related effect on our Asian-sourced finished goods.

For more information, see “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations - Factors Affecting our Performance – Impact of

Foreign Exchange and Hedging Practices” in the Company’s annual report on Form 10-K and “Item 2. Management’s Discussion and Analysis of Financial Condition andResults of Operations - Factors Affecting our Performance – Impact of Foreign Exchange and Hedging Practices” in the Company’s quarterly report on Form 10-Q dated

October 14, 2015.

A reconciliation of these non-GAAP financial measures to the relevant GAAP measure can be found in the tables in the appendix of this presentation and in the Company's

annual report on Form 10-K and quarterly report on From 10-Q under “Non-GAAP Financial Measures.”

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Quarterly Constant Currency Reconciliation


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Quarterly Constant Currency Reconciliation

PSG

($ in Millions)

Reported

Constant

Currency

Impact of

Foreign

Exchange Reported

Constant

Currency

Impact of

Foreign

Exchange

Revenues $172.3 $176.3 ($4.0) Revenues $147.6 $156.1 ($8.5)

Reported

Constant

Currency

Impact of

Foreign

Exchange Reported

Constant

Currency

Impact of

Foreign

Exchange

Revenues $137.7 $141.3 ($3.6) Revenues $175.0 $189.5 ($14.5)

Three Months Ended 11/30/14




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Annual Constant Currency Reconciliation


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Annual Constant Currency Reconciliation

PSG($ in Millions)

Reported

Constant

Currency

Impact of

Foreign

Exchange

Revenues $654.7 $675.2 ($20.5)

Adjusted Gross profit $229.4 $251.8 ($22.4)

Adjusted EBITDA $98.3 $116.4 ($18.1)

Adjusted Net Income $47.5 $61.4 ($13.9)

Adjusted EPS $1.02 $1.32 ($0.30)

Twelve Months Ended 5/31/15

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Adjusted Gross Profit Reconciliation


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j

PSG Year Ended Year Ended Year Ended Year Ended Year En($ Millions) 05/31/11 05/31/12 05/31/13 05/31/14 05/31

IFRS IFRS U.S. GAAP U.S. GAAP U.S. GA

Gross profit $119.1 $142.6 $147.2 $154.3 $2

Amortization & depreciation of intangible assets 3.2 2.5 3.6 4.8

Inventory step-up/step-down & reserves 0.6 - 1.7 4.6

Other - - 0.5 1.0

Adjusted Gross Profit $122.9 $145.1 $153.0 $164.7 $2

Impact of foreign exchange (

Constant Currency Adjusted Gross Profit $2

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Adjusted EBITDA Reconciliation


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j

PSGYear Ended Year Ended Year Ended Year Ended Year Ended

($ Millions) 05/31/11 05/31/12 05/31/13 05/31/14 05/31/15

IFRS IFRS U.S. GAAP U.S. GAAP U.S. GAAP

Net income (loss) $0.4 $30.2 $25.2 $20.0 $3.3

Income tax expense (benefit) 0.4 13.1 8.6 6.3 3.4

Depreciation & amortization 7.8 5.7 8.3 11.1 21.3

Loss on extinguishment of debt - - 0.3 2.6 -

Gain on bargain purchase - - (1.2) - -

Loss on disposal of fixed assets - - - 0.2 -

Realized loss on derivatives & loss on extinguishment of debt 3.6 - - - -

Interest expense, net 10.4 7.6 7.3 8.1 17.3

Deferred financing fees 1.5 1.2 1.5 1.6 2.5

Unrealized (gain)/loss on derivative instruments, net 12.4 (14.3) (0.9) 2.0 2.2

Foreign exchange (gain)/loss (3.4) 2.7 (0.5) (4.8) 19.6

EBITDA $33.1 $46.2 $48.6 $47.1 $69.6

Acquisition-related charges 1.6 4.0 7.5 15.6 18.0

Other - - 1.7 1.0 3.5

Costs related to share offerings 8.2 - 0.8 0.5 0.1

Share-based payment expense 0.6 1.3 4.2 4.7 7.1

Adjusted EBITDA $43.5 $51.5 $62.8 $68.9 $98.3

Impact of foreign exchange (18.1)

Constant Currency Adjusted EBITDA $116.4

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Adjusted EPS Reconciliation


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j

PSGYear Ended Year Ended Year Ended Year Ended Year Ended

($ Millions) 05/31/11 05/31/12 05/31/13 05/31/14 05/31/15

IFRS IFRS U.S. GAAP U.S. GAAP U.S. GAAP

Net income (loss) $0.4 $30.2 $25.2 $20.0 $3.3

Unrealized foreign exchange loss/(gain) 10.5 (11.9) (1.1) (1.5) 20.4

Costs related to share offerings 10.6 - 0.8 0.5 0.1

Acquisition-related charges 1.3 4.0 9.5 19.2 30.5

Share-based payment expense 1.4 1.3 4.2 4.7 7.1

Other - - 0.8 3.9 3.5

Tax impact on above items (6.9) 1.9 (3.6) (9.5) (17.4)

Adjusted net income (loss) $17.3 $25.5 $35.8 $37.3 $47.5

Average diluted shares outstanding 31.4 31.7 36.4 37.5 46.4

Adjusted EPS $0.55 $0.81 $0.98 $1.00 $1.02

Impact of foreign exchange (0.30)

Constant Currency Adjusted EPS $1.32

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Free Cash Flow Reconciliation


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PSGYear Ended Year Ended Year Ended Year Ended Year Ended Year En

($ Millions) 05/31/10 05/31/11 05/31/12 05/31/13 05/31/14 05/31/

Canadian IFRS IFRS U.S. GAAP U.S. GAAP U.S. GA

GAAP

Adjusted EBITDA $30.7 $43.5 $51.5 $62.8 $68.9 $9

Capital expenditures 1.5 5.4 4.5 7.4 6.0 1

Interest expense, net 10.5 11.9 7.4 6.9 8.1 1

Term loan amortization 4.5 5.8 8.9 9.6 7.0

Net cash taxes (inflow)/outflow 0.9 2.9 (0.1) 2.6 6.2

Free Cash Flow $13.3 $17.5 $30.8 $36.3 $41.5 $5

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Documents

PSG Performance Sports Group Oct 2015 Investor Presentation