FNCL Series 2007 Other Floating Rate Instrument

Company Overview

Business Model: YETI Holdings, Inc. is a global designer, retailer, and distributor of innovative outdoor products, including coolers, drinkware, bags, and apparel. The company's products are engineered for diverse outdoor pursuits and are sold through a balanced omni-channel strategy comprising wholesale and direct-to-consumer (DTC) channels. The DTC channel includes YETI websites, YETI Authorized on the Amazon Marketplace, and YETI retail stores, while the wholesale channel serves national, regional, and independent retail partners. YETI also offers customized products with licensed marks and original artwork.

Market Position: YETI Holdings, Inc. has cultivated a strong following of brand loyalists, from serious outdoor enthusiasts to consumers who value uncompromising quality and design. The company operates in the large and fragmented outdoor and recreation market, as well as related sectors such as housewares, home and garden, outdoor living, industrial, and commercial. YETI Holdings, Inc. competes on product quality, performance, durability, styling, brand image, and price, leveraging its brand, superior design capabilities, product development, and DTC presence. Key competitors include established brands like Igloo and Coleman, newer entrants such as Stanley and SharkNinja, and various private label offerings.

Recent Strategic Developments:

• Product Launches (2025): YETI Holdings, Inc. introduced numerous new products and expansions across its portfolio. In Coolers & Equipment, this included the redesigned Roadie 24, Daytrip Lunchboxes, Lunch Bag, Tote Bag, Cayo Collection and Ranchero Collection backpacks, a smaller format LoadOut GoBox, Hondo Beach Chair, a limited release Can Crusher, and the YETI Fire Pit. In Drinkware, new offerings included the Rambler Travel Bottle, Yonder Shaker Bottle, Silo Jug with Straw Cap, Silo Jug with Chug Cap, redesigned Rambler Jug, Rambler Travel Straw Mug, Rambler Junior Tumbler with Silicone Straw, Rambler Insulated Bowls, Rambler Food Jars, YETI Food Storage containers, Rambler Ceramic Mug, a new size of the Rambler Ceramic Stackable Cup, a new size of the Cast Iron Skillet, the Cast Iron Ranch Pan, and a limited release Carbon Steel Pan.
• Acquisitions (2025): Acquired certain assets, including designs, tooling, and intellectual property, related to the Helimix branded shaker bottle for $38.0 million in cash, which facilitated the launch of the Yonder Shaker Bottle.
• Supply Chain Diversification: Accelerated diversification of Drinkware manufacturing beyond China in 2025 in response to elevated tariffs, resulting in a majority of Drinkware manufacturing capacity now being outside of China. This effort caused short-term supply chain disruptions and inventory constraints in 2025.
• International Expansion: Launched operations in Japan during the second quarter of 2025.

Geographic Footprint: YETI Holdings, Inc. operates globally, with primary markets in the United States, Canada, Australia, New Zealand, the United Kingdom, Europe, and Japan. In 2025, the United States accounted for approximately 79% of total net sales, while international sales represented 21%, driven by growth in Europe and Australia. The company's corporate headquarters are in Austin, Texas, with additional leased office and building spaces in Montana, Australia, Canada, China, Japan, Vietnam, Thailand, Germany, the United Kingdom, and the Netherlands. Distribution is managed through third-party logistics providers with facilities in Memphis, Tennessee; Salt Lake City, Utah; Sumner, Washington (domestic); and Australia, Canada, the United Kingdom, New Zealand, Japan, and the Netherlands (international). As of January 3, 2026, YETI Holdings, Inc. operated 27 retail stores across the United States.

Financial Performance

Revenue Analysis

Profitability Metrics (2025):

• Gross Margin: 57.4% (down 70 basis points from 58.1% in 2024)
• Operating Margin: 11.4% (down from 13.4% in 2024)
• Net Margin: 8.8% (down from 9.6% in 2024)

Investment in Growth (2025):

• R&D Expenditure: $25.2 million (1.35% of revenue)
• Capital Expenditures: $42.7 million (Purchases of property and equipment)
• Strategic Investments: Acquired certain assets related to the Helimix branded shaker bottle for $38.0 million in cash.

Business Segment Analysis

Coolers & Equipment

Financial Performance (2025):

• Revenue: $748.5 million (+7% YoY)
• Key Growth Drivers: Strong performance in bags, soft coolers, and cargo.

Product Portfolio:

• Hard Coolers: YETI Tundra, YETI Roadie (including the redesigned Roadie 24), YETI V Series hard coolers, YETI TANK ice bucket, and YETI Silo 6G water cooler, with related accessories.
• Soft Cooler Bags: Hopper Collection (M15 Soft Cooler, M12 Soft Backpack Cooler, M30 Soft Cooler, M20 Backpack Cooler, Flip Soft Cooler) and Daytrip Collection (expanded in 2025 with Lunchboxes, Lunch Bag, and Tote Bag).
• Bags: Panga Collection, Crossroads Collection, Camino Carryall, and SideKick Dry gear case. Expanded in 2025 with the Cayo Collection (all-weather backpacks) and Ranchero Collection backpacks.
• Cargo and Storage: LoadOut GoBox (including a smaller format launched in 2025), LoadOut Bucket, and LoadOut Swivel Seat.
• Outdoor Living: Trailhead Camp Chair, Lowlands Blanket, and Boomer Dog Bowls. Expanded in 2025 with the Hondo Beach Chair, a limited release Can Crusher, and the YETI Fire Pit.

Market Dynamics:

• Competes against established brands such as Igloo and Coleman, newer brands like Stanley and SharkNinja, and private label brands.

Drinkware

Financial Performance (2025):

• Revenue: $1,085.8 million (-1% YoY)
• Key Growth Drivers: International growth was more than offset by a decline in the U.S. region, attributed to a promotional market environment, cautious wholesale buying, and inventory constraints from supply chain transition.

Product Portfolio:

• Most products feature durable, kitchen-grade, 18/8 stainless-steel, double-wall vacuum insulation, and No Sweat design.
• Bottles and Jugs: Rambler Collection, Yonder Collection (including the Yonder Shaker Bottle launched in 2025), and Silo Collection. Expanded in 2025 with the Rambler Travel Bottle, Yonder Shaker Bottle, Silo Jug with Straw Cap, Silo Jug with Chug Cap, and redesigned Rambler Jug.
• Cups, Mugs, and Tumblers: Rambler Collection (Stackable Pints, Mugs, Tumblers, and Cups). Expanded in 2025 with the Rambler Travel Straw Mug and Rambler Junior Tumbler with Silicone Straw.
• Tableware, Coffeeware, Barware, and Containers: Broad range of Rambler products, including Insulated Bowls and Food Jars, ceramic-lined Mugs and Stackable Cups, French Presses, Pitchers, Wine Chillers, Wine Tumblers, Beverage Bucket, Colsters, and Cocktail Shaker. Expanded in 2025 with Rambler Insulated Bowls, Rambler Food Jars, YETI Food Storage containers, Rambler Ceramic Mug, and a new size of the Rambler Ceramic Stackable Cup.
• Cookware: Cast Iron Skillet (expanded in 2025 with a new size), Cast Iron Ranch Pan (launched in 2025), and a limited release Carbon Steel Pan (launched in 2025).

Market Dynamics:

• Competes against well-known brands such as HydroFlask, Stanley, Owala, and HydroJug, as well as numerous other brands and retailers.

Other

Financial Performance (2025):

• Revenue: $34.1 million (-8% YoY)

Product Portfolio:

• Apparel: Hats, shirts, and sweatshirts.
• Other: Ice substitutes and other YETI branded products.

Capital Allocation Strategy

Shareholder Returns:

• Share Repurchases: In 2025, YETI Holdings, Inc. repurchased 8,157,674 shares of its common stock on the open market for approximately $297.6 million, at an average repurchase price of $36.49 per share.
• Dividend Payments: YETI Holdings, Inc. has not declared or paid any cash dividends on its common stock and does not expect to pay any in the foreseeable future.
• Future Capital Return Commitments: The Share Repurchase Program, originally authorized for $300.0 million in February 2024, was increased by $350.0 million in Q1 2025, for a total authorization of $450.0 million. As of January 3, 2026, $152.4 million remained available under the program.

Balance Sheet Position (as of January 3, 2026):

• Cash: $188.3 million
• Total Debt: $75.0 million (comprising $73.8 million principal amount under Term Loan A and $1.2 million in finance lease debt)
• Net Cash Position: $113.3 million
• Debt Maturity Profile: The Term Loan A matures on June 22, 2028, with quarterly principal payments of $1.1 million due through March 2028. Finance lease obligations extend through 2028.

Cash Flow Generation (2025):

• Operating Cash Flow: $254.7 million
• Free Cash Flow: Operating Cash Flow less Purchases of Property and Equipment was approximately $212.0 million ($254.7 million - $42.7 million).

Operational Excellence

Production & Service Model: YETI Holdings, Inc. designs and develops products for superior performance and functionality, utilizing high-quality materials and advanced manufacturing processes. The company employs a disciplined, stage-gate product development process to ensure consistent quality control and optimize speed-to-market. Prototypes are rigorously tested with YETI Ambassadors and industry professionals. Manufacturing is conducted by third-party contract manufacturers according to YETI Holdings, Inc.'s specifications and quality standards. YETI Holdings, Inc. owns the molds and tooling used in production and performs inspections at manufacturing sites and distribution facilities.

Supply Chain Architecture: Key Suppliers & Partners:

• Raw Materials: Primary raw materials and components include polyethylene, polyurethane foam, stainless-steel, polyester fabric, zippers, magnets, and other plastic materials and coatings. These are believed to be readily available from multiple vendors, with YETI Holdings, Inc. stipulating approved suppliers and controlling specifications.
• Manufacturing Partners: Third-party contract manufacturers are located in China, Thailand, Malaysia, Vietnam, the Philippines, Mexico, and Poland.
• Logistics Partners: Global third-party logistics providers manage warehousing and distribution.

Facility Network:

• Manufacturing: Third-party facilities in various international locations.
• Research & Development: Purpose-built, state-of-the-art research and development centers.
• Distribution: Leased and managed by third-party logistics providers in Memphis, Tennessee; Salt Lake City, Utah; Sumner, Washington (domestic); and Australia, Canada, the United Kingdom, New Zealand, Japan, and the Netherlands (international).
• Corporate Offices: Corporate headquarters in Austin, Texas, and additional leased office and building spaces globally.

Operational Metrics: Operational metrics such as capacity utilization, efficiency measures, and quality indicators are not explicitly disclosed with quantitative data in the provided text.

Market Access & Customer Relationships

Go-to-Market Strategy: Distribution Channels:

• Direct Sales: Products are sold directly to consumers through YETI websites, YETI Authorized on the Amazon Marketplace, and 27 YETI retail stores across the United States. A corporate sales program offers customized products to corporate customers.
• Channel Partners: The wholesale channel includes national and regional retailers such as Dick’s Sporting Goods, REI, Academy Sports + Outdoors, Bass Pro Shops, Ace Hardware, Scheels, and Tractor Supply Company in the United States. International retailers include FGL Sports and SportChek in Canada, BCF and Rebel in Australia, and GO Outdoors in the United Kingdom. YETI Holdings, Inc. partners with approximately 5,300 independent retail partners worldwide.
• Digital Platforms: Online sales are conducted via YETI websites and the Amazon Marketplace.

Customer Portfolio: Enterprise Customers: Key enterprise relationships include major national and regional retailers in the U.S. and internationally.

• Customer Concentration: No single customer accounted for 10% or more of gross sales in 2025.

Geographic Revenue Distribution (2025):

• United States: 79% of total net sales ($1,474.1 million)
• International: 21% of total net sales ($394.4 million)
• Growth Markets: YETI Holdings, Inc. continues to expand its presence in Canada, Australia, New Zealand, Asia, the United Kingdom, and Europe, with Japan launching in Q2 2025.

Competitive Intelligence

Market Structure & Dynamics

Industry Characteristics: The markets in which YETI Holdings, Inc. competes, including outdoor and recreation, housewares, home and garden, outdoor living, industrial, and commercial, are highly fragmented and competitive with low barriers to entry. These markets are characterized by continuous new product introductions, frequent enhancements, customization options, new colorways, and evolving customer demands. Given the high quality and durability of YETI Holdings, Inc.'s products, innovation is crucial as products do not have a natural replacement cycle.

Competitive Positioning Matrix:

Direct Competitors

Primary Competitors:

• Coolers & Equipment: Established brands such as Igloo and Coleman; newer brands including Stanley and SharkNinja; and various private label brands.
• Drinkware: Well-known brands like HydroFlask, Stanley, Owala, and HydroJug; alongside numerous other brands and retailers offering competing products.

Emerging Competitive Threats: The company faces potential threats from new market entrants, disruptive technologies (e.g., AI in customer experience), and alternative solutions. Competitors may possess advantages such as larger retailer bases, global product distribution, greater financial strength, more established supplier relationships, or larger marketing budgets.

Competitive Response Strategy: YETI Holdings, Inc. aims to maintain its competitive advantage by continuously introducing new products and enhancing existing ones, strengthening its brand image through marketing and customer experience, expanding its global supply chain and technological infrastructure, implementing selective price increases, diversifying manufacturing to mitigate tariff impacts, and aggressively protecting its intellectual property rights.

Risk Assessment Framework

Strategic & Market Risks

Market Dynamics: YETI Holdings, Inc.'s business is highly sensitive to general economic conditions and consumer discretionary spending, which can be adversely affected by factors such as inflation, rising interest rates, and declining consumer confidence. Failure to attract new customers, maintain brand image, or successfully launch new products could harm demand. Inaccurate forecasting of growth and demand could lead to excess inventory or shortages, impacting margins and reputation. The company also faces challenges in managing its growth, expanding into new international markets, and competing effectively in highly competitive markets with low barriers to entry. Sustainability: Failure to meet evolving investor and stakeholder expectations regarding sustainability matters, or to comply with emerging sustainability regulations, could adversely affect reputation, access to capital, and business opportunities. Climate Change: Physical risks from extreme weather and natural disasters could disrupt the supply chain and increase production costs. Legislative and regulatory responses to climate change may also increase compliance costs.

Operational & Execution Risks

Supply Chain Vulnerabilities: Reliance on third-party contract manufacturers exposes YETI Holdings, Inc. to risks such as production delays, quality control issues, raw material shortages, and disruptions from catastrophic events or manufacturer financial difficulties. Concentration of business with certain manufacturers and reliance on limited distribution center locations increase vulnerability. Failure to effectively scale global supply chain processes could lead to inefficiencies. Non-compliance by suppliers with ethical practices or laws could harm reputation. Product Recalls: The company is exposed to product recall, warranty liability, and product liability claims if products fail to perform as expected, as demonstrated by the 2023 voluntary recalls of certain Hopper Soft Coolers and SideKick Dry gear cases, which incurred substantial costs and reputational impact.

Financial & Regulatory Risks

Market & Financial Risks: Inability to maintain prices or implement increases due to competitive pressures or economic conditions could reduce margins. Fluctuations in foreign currency exchange rates can adversely impact financial results. The company's indebtedness under its Credit Facility imposes covenants that could limit investment in business needs, and failure to comply could accelerate obligations. Impairment of goodwill, other intangible assets, or fixed assets could result in significant charges to earnings. Inaccurate accounting estimates for critical policies could harm results. Regulatory & Compliance Risks: YETI Holdings, Inc. is subject to a complex array of federal, state, local, and foreign laws and regulations, including those related to trade, customs, labor, consumer protection, data privacy (e.g., EU GDPR), and anti-corruption (FCPA, UK Bribery Act 2010). Adverse changes in international trade policies, such as tariffs (e.g., U.S. tariffs on imports from China, IEEPA Decision, new tariffs), can materially impact costs and profitability. Legal proceedings and regulatory investigations also pose risks of substantial costs and diversion of management attention.

Geopolitical & External Risks

Geopolitical Exposure: International operations expose the company to risks inherent in foreign jurisdictions, including varying legal and regulatory environments, weaker intellectual property protection, economic and political instability, public health crises, and transportation disruptions. Trade relations and geopolitical conflicts can lead to sanctions, export controls, and increased costs.

Innovation & Technology Leadership

Research & Development Focus: YETI Holdings, Inc. maintains a strong focus on research and development, driven by consumer insights and relevant product knowledge. The company utilizes high-quality materials, advanced design, and manufacturing processes to expand existing product families and enter new categories. Its robust product roadmap is supported by purpose-built, state-of-the-art R&D centers for design prototyping and performance testing.

Intellectual Property Portfolio: YETI Holdings, Inc. owns patents, trademarks, copyrights, trade dress, trade secrets, and other intellectual property rights, which are considered critical to its success and competitive advantage. The company actively seeks and defends intellectual property protection in the United States and internationally, including proactive online marketplace monitoring and litigation against counterfeit products.

Technology Partnerships: While not explicitly detailed, YETI Holdings, Inc. leverages outside partnerships to gain intelligence on cybersecurity threats and continuously adjusts its protection mechanisms.

Leadership & Governance

Executive Leadership Team

Board Composition: The Board of Directors is classified into three classes. The Audit Committee holds primary oversight responsibility for YETI Holdings, Inc.'s overall enterprise risk assessment and risk management policies, including those related to IT and security systems and cybersecurity threats. The Audit Committee receives quarterly presentations on these matters, which are then summarized and shared with the full Board.

Human Capital Strategy

Workforce Composition (as of January 3, 2026):

• Total Employees: Approximately 1,390 people worldwide.
• Geographic Distribution: Approximately 83% of the workforce is located in the United States, with employees in twelve countries.
• Skill Mix: Not explicitly detailed in the provided text.

Talent Management: Acquisition & Retention: YETI Holdings, Inc. focuses on attracting, developing, and retaining top talent through market-competitive compensation, comprehensive healthcare, retirement benefits (401(k) with employer match), paid time off, bonding leave, and mental health, wellness, and financial planning programs. Diversity & Development: The company supports voluntary, employee-led resource groups and offers employees educational activities and training. Programs are in place to recognize leadership and employees who exemplify core values.

Environmental & Social Impact

Environmental Commitments: Not explicitly detailed in the provided text. Supply Chain Sustainability: Not explicitly detailed in the provided text beyond general compliance with ethical business practices and applicable laws. Social Impact Initiatives: YETI Holdings, Inc. maintains an unwavering commitment to outdoor and recreation communities.

Business Cyclicality & Seasonality

Demand Patterns: YETI Holdings, Inc. historically experiences its highest net sales in the fourth quarter, coinciding with the seasonal holiday shopping season. The first quarter typically generates the lowest sales. In 2025, net sales distribution was 19% in Q1, 24% in Q2, 26% in Q3, and 31% in Q4. The business is highly sensitive to general economic conditions and consumer discretionary spending. Planning & Forecasting: The company must forecast inventory needs and place orders with manufacturers in advance of firm customer orders, a process made challenging by new markets, new products, and macroeconomic uncertainties.

Regulatory Environment & Compliance

Regulatory Framework: YETI Holdings, Inc.'s global business activities are subject to various federal, state, local, and foreign laws and regulations, including those pertaining to labor and employment, sales and other taxes, customs, consumer protection, and the importation, promotion, and sale of merchandise. The company also navigates changing regulatory restrictions in data privacy, information security, and sustainability. Trade & Export Controls: Substantially all import operations are subject to complex trade and customs laws, regulations, and tax requirements. In 2025, the U.S. government implemented incremental tariffs on imports from many countries, materially impacting gross margins. While the IEEPA Decision invalidated some tariffs in February 2026, new tariffs were immediately initiated under alternative authorities, maintaining continued tariff exposure. Legal Proceedings: YETI Holdings, Inc. is involved in various claims and legal proceedings, some covered by insurance, which it believes are not material. The company is also exposed to product liability claims and regulatory investigations.

Tax Strategy & Considerations

Tax Profile: YETI Holdings, Inc. is subject to income taxes in the United States (federal and state) and various foreign jurisdictions. The effective tax rate was 24.9% in 2025. The company considers the undistributed earnings of its foreign subsidiaries ($62.3 million as of January 3, 2026) to be indefinitely reinvested. Tax Reform Impact: The company is evaluating the impact of the global minimum tax framework (Pillar Two), which was not material as of January 3, 2026. The One Big Beautiful Bill Act (OBBBA), enacted in July 2025, resulted in domestic cash tax savings and an immaterial impact to income tax expense in 2025. Tax Credit Carryforwards: YETI Holdings, Inc. has research and development tax credit carryforwards from the state of Texas of approximately $3.1 million, set to expire beginning in 2040.

Insurance & Risk Transfer

Risk Management Framework: YETI Holdings, Inc. maintains various insurance policies, including a cybersecurity and information security risk insurance policy. However, coverage may not be available or sufficient to cover all potential losses or liabilities, particularly those arising from product recalls, cybersecurity incidents, catastrophic events, climate-related physical events, or prolonged business interruption. Risk Transfer Mechanisms: Not explicitly detailed in the provided text beyond general insurance coverage.