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TABLE OF CONTENTS
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

Table of Contents

As filed with the Securities and Exchange Commission on September 27, 2018

Registration No. 333-                

 

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549



FORM S-1
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933



YETI Holdings, Inc.
(Exact name of registrant as specified in its charter)

Delaware
(State or other jurisdiction of
incorporation or organization)
  3949
(Primary Standard Industrial
Classification Code Number)
  45-5297111
(I.R.S. Employer
Identification Number)



7601 Southwest Parkway
Austin, Texas 78735
(512) 394-9384

(Address, including zip code, and telephone number, including area code, of registrant's principal executive offices)



Matthew J. Reintjes
President and Chief Executive Officer, Director
7601 Southwest Parkway
Austin, Texas 78735
(512) 394-9384

(Name, address, including zip code, and telephone number, including area code, of agent for service)



Copies to:

Timothy R. Curry
Kimberly J. Pustulka
Jones Day
901 Lakeside Avenue
Cleveland, Ohio 44114
(216) 586-3939

 

Bryan C. Barksdale
Senior Vice President,
General Counsel and Secretary
YETI Holdings, Inc.
7601 Southwest Parkway
Austin, Texas 78735
(512) 394-9384

 

Michael Benjamin
Latham & Watkins LLP
885 Third Avenue
New York, New York 10022
(212) 906-1200



Approximate date of commencement of proposed sale to the public:
As soon as practicable, after this registration statement becomes effective.

          If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, check the following box:    o

          If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering:    o

          If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering:    o

          If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering:    o

          Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company" and "emerging growth company" in Rule 12b-2 of the Exchange Act.

Large accelerated filer o   Accelerated filer o   Non-accelerated filer ý   Smaller reporting company o

Emerging growth company ý

          If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 7(a)(2)(B) of the Securities Act. o

CALCULATION OF REGISTRATION FEE

       
 
Title of Each Class of Securities
to be Registered

  Proposed Maximum
Aggregate Offering
Price(1)(2)

  Amount of
Registration Fee(1)(3)

 

Common Stock, $0.01 par value per share

  $100,000,000   $12,450

 

(1)
Estimated solely for the purpose of computing the amount of the registration fee pursuant to Rule 457(o) under the Securities Act of 1933, as amended.

(2)
Includes the aggregate offering price of additional shares that the underwriters have the option to purchase. See "Underwriting."

(3)
A registration fee in the amount of $10,070.00 was previously paid by the Registrant in connection with the filing of a Registration Statement on Form S-1 (Registration No. 333-212379) on July 1, 2016. The Registrant did not sell any securities pursuant to the Registration Statement No. 333-212379 and it was withdrawn on March 26, 2018. Pursuant to Rule 457(p) under the Securities Act of 1933, as amended, the filing fee of $10,070.00 previously paid by the Registrant will be used to offset the filing fee of $12,450.00 required for the filing of this Registration Statement.

          The registrant hereby amends this registration statement on such date or dates as may be necessary to delay its effective date until the registrant shall file a further amendment which specifically states that this registration statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933 or until the registration statement shall become effective on such date as the Securities and Exchange Commission, acting pursuant to said Section 8(a), may determine.

   


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The information in this preliminary prospectus is not complete and may be changed. These securities may not be sold until the registration statement filed with the Securities and Exchange Commission is effective. This preliminary prospectus is not an offer to sell these securities nor does it seek an offer to buy these securities in any jurisdiction where the offer or sale is not permitted.

Subject To Completion, Dated September 27, 2018

PROSPECTUS

            Shares



LOGO

Common Stock



        This is the initial public offering of shares of common stock of YETI Holdings, Inc. We are selling            shares of our common stock and the selling stockholders identified in this prospectus are selling            shares of our common stock. We will not receive any proceeds from the sale of shares of our common stock by the selling stockholders.

        We expect the public offering price to be between $            and $            per share. Currently, no public market exists for the shares. We have applied to list our common stock on the New York Stock Exchange under the symbol "YETI."

        We are an "emerging growth company" under the federal securities laws and, as such, will be subject to reduced public company reporting requirements. See "Prospectus Summary—Implications of Being an Emerging Growth Company."

        After the completion of this offering, Cortec Group Fund V, L.P. and its affiliates will control a majority of the voting power of our common stock with respect to the election of our directors. As a result, we will be a "controlled company" within the meaning of the New York Stock Exchange listing standards. See "Management—Controlled Company Exemption."

        Investing in our common stock involves a high degree of risk. See "Risk Factors" beginning on page 15 of this prospectus.

       
 
 
  Per share
  Total
 

Public offering price

  $                   $            
 

Underwriting discounts and commissions(1)

  $                   $            
 

Proceeds, before expenses, to us

  $                   $            
 

Proceeds, before expenses, to the selling stockholders

  $                   $            

 

(1)
See "Underwriting" for additional information regarding total underwriter compensation.

        The underwriters may also exercise their option to purchase up to an additional            shares from the selling stockholders, at the public offering price, less the underwriting discount, for 30 days after the date of this prospectus.

        Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or determined if this prospectus is truthful or complete. Any representation to the contrary is a criminal offense.

        The underwriters expect to deliver the shares to purchasers on or about                        , 2018.



BofA Merrill Lynch   Morgan Stanley   Jefferies
Baird   Piper Jaffray
Citigroup   Goldman Sachs & Co. LLC
KeyBanc Capital Markets   William Blair   Raymond James   Stifel

   

                        , 2018


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TABLE OF CONTENTS

Prospectus Summary

    1  

Risk Factors

    15  

Special Note Regarding Forward-Looking Statements

    40  

Use of Proceeds

    42  

Dividend Policy

    43  

Capitalization

    44  

Dilution

    46  

Selected Consolidated Financial and Other Data

    48  

Management's Discussion and Analysis of Financial Condition and Results of Operations

    50  

Business

    70  

Management

    91  

Executive Compensation

    103  

Certain Relationships and Related-Party Transactions

    115  

Principal and Selling Stockholders

    119  

Description of Capital Stock

    122  

Description of Indebtedness

    126  

Shares Eligible for Future Sale

    128  

Certain U.S. Federal Income Tax Consequences to Non-U.S. Holders

    131  

Underwriting

    135  

Legal Matters

    143  

Experts

    143  

Where You Can Find Additional Information

    143  

Index to Consolidated Financial Statements

    F-1  

        You should rely only on the information contained in this prospectus and in any related free writing prospectus prepared by or on behalf of us and the selling stockholders. Neither we, the selling stockholders, nor the underwriters have authorized anyone to provide you with information different from, or in addition to, the information contained in this prospectus or any related free writing prospectus. This prospectus is an offer to sell only the shares offered hereby, but only under circumstances and in jurisdictions where it is lawful to do so. The information contained in this prospectus or in any applicable free writing prospectus is current only as of its date, regardless of its time of delivery or any sale of shares of our common stock. Our business, financial condition, results of operations, and prospects may have changed since that date.


For Investors Outside the United States

        Neither we, the selling stockholders, nor the underwriters have taken any action that would permit this offering or possession or distribution of this prospectus in any jurisdiction where action for that purpose is required, other than the United States. Persons outside the United States are required to inform themselves about and to observe any restrictions relating to this offering and the distribution of this prospectus.


Trademarks, Trade Names, and Service Marks

        We use various trademarks, trade names, and service marks in our business, including, without limitation, YETI®, Tundra®, Hopper®, Hopper Flip®, YETI TANK®, Rambler®, Colster®, Roadie®, BUILT FOR THE WILD®, LOAD-AND-LOCK®, YETI Authorized™, YETI PRESENTS™, YETI Custom Shop™, Panga™, LoadOut™, Camino™, Hondo™, SideKick™, SideKick Dry™, Silo™, YETI ICE™, EasyBreathe™, FlexGrid™, PermaFrost™, T-Rex™, Haul™, NeverFlat™, StrongArm™, Vortex™, SteadySteel™, Hopper BackFlip™, ThickSkin™, DryHaul™, SureStrong™, LipGrip™, No Sweat™,

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Boomer™, Tocayo™, Lowlands™, TripleGrip™, TripleHaul™, Over-the-Nose™, FatLid™, MagCap™, DoubleHaul™, HydroLok™, and ColdCell™. YETI also uses trade dress for its distinctive product designs. For convenience, we may not include the ® or ™ symbols in this prospectus, but such omission is not meant to and does not indicate that we would not protect our intellectual property rights to the fullest extent allowed by law. Any other trademarks, trade names, or service marks referred to in this registration statement and the prospectus that are not owned by us are the property of their respective owners.


Industry, Market, and Other Data

        This prospectus includes estimates, projections, and other information concerning our industry and market data, including data regarding the estimated size of the market, projected growth rates, and perceptions and preferences of consumers. We obtained this data from industry sources, third-party studies, including market analyses and reports, and internal company surveys. Industry sources generally state that the information contained therein has been obtained from sources believed to be reliable. Although we are responsible for all of the disclosure contained in this prospectus, and we believe the industry and market data to be reliable as of the date of this prospectus, this information could prove to be inaccurate.


Basis of Presentation

        Effective January 1, 2017, we converted our fiscal year end from a calendar year ending December 31 to a "52-53 week" year ending on the Saturday closest in proximity to December 31, such that each quarterly period will be 13 weeks in length, except during a 53 week year when the fourth quarter will be 14 weeks. This did not have a material effect on our consolidated financial statements and, therefore, we did not retrospectively adjust our financial statements. References herein to "2017" relate to the 52 weeks ended December 30, 2017, and references herein to "2016" and "2015" relate to the years ended December 31, 2016 and December 31, 2015, respectively. The second quarter of 2018 ended on June 30, 2018, and the second quarter of 2017 ended on July 1, 2017. In this prospectus, unless otherwise noted, when we compare a metric between one period and a "prior period," we are comparing it to the corresponding period from the prior fiscal year.

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PROSPECTUS SUMMARY

        The following summary highlights selected information contained elsewhere in this prospectus and does not contain all of the information that you should consider in making your investment decision. Before investing in our common stock, you should carefully read the entire prospectus, including the consolidated financial statements and the related notes included in this prospectus and the information set forth under the headings "Risk Factors" and "Management's Discussion and Analysis of Financial Condition and Results of Operations." Unless the context requires otherwise, the words "YETI," "we," "company," "us," and "our" refer to YETI Holdings, Inc. and its subsidiaries, as applicable.

YETI: Built for the Wild

        We believe that by consistently designing and marketing innovative and outstanding outdoor products, we make an active lifestyle more enjoyable and cultivate a growing group of passionate and loyal customers.

        Our Founders, Roy and Ryan Seiders, are avid outdoorsmen who were frustrated with equipment that could not keep pace with their interests in hunting and fishing. By utilizing forward-thinking designs and advanced manufacturing techniques, they developed a nearly indestructible hard cooler with superior ice retention. Our original cooler not only delivered exceptional performance, it anchored an authentic, passionate, and durable bond among customers and our company.

        Today, we are a rapidly growing designer, marketer, retailer, and distributor of a variety of innovative, branded, premium products to a wide-ranging customer base. Our brand promise is to ensure each YETI product delivers exceptional performance and durability in any environment, whether in the remote wilderness, at the beach, or anywhere else life takes you. By consistently delivering high-performing products, we have built a following of engaged brand loyalists throughout the United States, Canada, Australia, and elsewhere, ranging from serious outdoor enthusiasts to individuals who simply value products of uncompromising quality and design. Our relationship with customers continues to thrive and deepen as a result of our innovative new product introductions, expansion and enhancement of existing product families, and multifaceted branding activities.

        Our diverse product portfolio includes:

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        We bring our products to market through a diverse and powerful omni-channel strategy, comprised of our select group of national and independent retail partners and our direct-to-consumer and corporate sales, or DTC, channel. Our DTC channel is comprised of YETI.com, YETIcustomshop.com, YETI Authorized on the Amazon Marketplace, corporate sales, and our flagship store in Austin, Texas. Our DTC channel provides authentic, differentiated brand experiences, customer engagement, and expedited customer feedback, enhancing the product development cycle while providing diverse avenues for growth.

        The broadening demand for our innovative and distinctive products is evidenced by our net sales growth from $89.9 million in 2013 to $639.2 million in 2017, representing a compound annual growth rate, or CAGR, of 63%. Over the same period, operating income grew from $15.2 million to $64.0 million, representing a CAGR of 43%, net income grew from $7.3 million to $15.4 million, representing a CAGR of 21%, Adjusted Operating Income grew from $16.3 million to $76.0 million, representing a CAGR of 47%, Adjusted Net Income grew from $8.0 million to $23.1 million, representing a CAGR of 30%, and our Adjusted EBITDA increased from $21.8 million to $97.5 million, representing a CAGR of 45%.

        See "—Summary Consolidated Financial and Other Data" for a reconciliation of Adjusted Operating Income, Adjusted Net Income, and Adjusted EBITDA, each a non-GAAP (as defined below) measure, to operating income, net income, and net income, respectively.

How is YETI different?

        We believe the following strengths fundamentally differentiate us from our competitors and drive our success:

        Influential, Growing Brand with Passionate Following.    The YETI brand stands for innovation, performance, uncompromising quality, and durability. We believe these attributes have made us the preferred choice of a wide variety of customers, from professional outdoors people to those who simply appreciate product excellence. Our products are used in and around an expanding range of pursuits, such as fishing, hunting, camping, climbing, snow sports, surfing, barbecuing, tailgating, ranch and rodeo, and general outdoors, as well as in life's daily activities. We support and build our brand through a multifaceted strategy, which includes innovative digital, social, television, and print media, our YETI Dispatch magalog, and several grass-roots initiatives that foster customer engagement. Our brand is embodied and personified by our YETI Ambassadors, a diverse group of men and women from throughout the United States and select international markets, comprised of world-class anglers, hunters, rodeo cowboys, barbecue pitmasters, surfers, and outdoor adventurers who embody our brand. The success of our brand-building strategy is partially demonstrated by our approximately 1.4 million new customers to YETI.com since 2013 and approximately 1.0 million Instagram followers as of June 30, 2018. In 2017 and the first six months of 2018, we added approximately 0.5 million and 0.2 million new customers to YETI.com, respectively.

        Our loyal customers act as brand advocates. YETI owners often purchase and proudly wear YETI apparel and display YETI banners and decals. As evidenced by the respondents to our May 2018 YETI owner study, 95% say they have proactively recommended our products to their friends, family, and others through social media or by word-of-mouth. Their brand advocacy, coupled with our varied marketing efforts, has consistently extended our appeal to the broader "YETI Nation." As we have expanded our product lines, extended our YETI Ambassador base, and broadened our marketing messaging, we have cultivated an audience of both men and women living throughout the United States and, increasingly, in international markets. Based on our annual owner studies, from 2015 to 2018 our customer base has evolved from 9% female to 34%, and from 64% aged 45 and under to 70%. While we have continued to invest in and remain true to our heritage hunting and fishing communities, our customer base evolved from 69% hunters to 38% during that same time period as our appeal broadened beyond those heritage communities. Further, based on our quarterly Brand Tracking Study, our unaided brand awareness in the coolers and drinkware markets in the United States has grown from 7% in 2015 to 24% in 2017,

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representing 243% growth during that period and indicating significant opportunity for future expansion, particularly in more densely populated United States markets.

        Superior Design Capabilities and Product Development.    At YETI, product is at our core and innovation fuels us. By employing an uncompromising approach to product performance and functionality, we have expanded on our original hard cooler offering and extended beyond our hunting and fishing heritage by introducing innovative new products, including soft coolers, drinkware, travel bags, backpacks, multipurpose buckets, outdoor chairs, blankets, dog bowls, apparel, and accessories. We believe that our new products appeal to our long-time customers as well as customers first experiencing our brand. We carefully design and rigorously test all new products, both in our innovation center and in the field, consistent with our commitment to delivering outstanding functional performance.

        We believe our products continue to set new performance standards in their respective categories. Our expansive team of in-house engineers and designers develops our products using a comprehensive stage-gate process that ensures quality control and optimizes speed-to-market. We use our purpose-built, state-of-the-art research and development center to rapidly generate design prototypes and test performance. Our global supply chain group, with offices in Austin, Texas and mainland China, sources and partners with qualified suppliers to manufacture our products to meet our rigorous specifications. As a result, we control the innovation process from concept through design, production, quality assurance, and launch. To ensure we benefit from the significant investment we make in product innovation, we actively manage and aggressively protect our intellectual property.

        We have a history of developing innovative products, including new products in existing product families, product line expansions, and accessories, as well as products that bring us into new categories. Our current product portfolio gives customers access to our brand at multiple price points, ranging from a $20 Rambler tumbler to a $1,300 Tundra hard cooler. We expand our existing product families and enter new product categories by creating solutions grounded in consumer insights and relevant market knowledge. We believe our product families, extensions, variations, and colorways, in addition to new product launches, result in repeat purchases by existing customers and consistently attract new customers to YETI.

        Balanced, Omni-Channel Distribution Strategy.    We distribute our products through a balanced omni-channel platform, consisting of our wholesale and DTC channels. In our wholesale channel, we sell our products through select national and regional accounts and an assemblage of independent retail partners throughout the United States and, more recently, Australia, Canada, and Japan. We carefully evaluate and select retail partners that have an image and approach that are consistent with our premium brand and pricing. Our domestic national and regional specialty retailers include Dick's Sporting Goods, REI, Academy Sports + Outdoors, Bass Pro Shops, and Ace Hardware. As of June 30, 2018, we also sold through a diverse base of nearly 4,800 independent retail partners, including outdoor specialty, hardware, sporting goods, and farm and ranch supply stores, among others. Our DTC channel consists primarily of online and inbound telesales and has grown from 8% of our net sales in 2015 to 30% in 2017. On YETI.com and at our flagship store, we showcase the entirety of our extensive product portfolio. Through YETIcustomshop.com and our corporate sales programs, we offer customers and businesses the ability to customize many of our products with licensed marks and original artwork. Our DTC channel enables us to directly interact with our customers, more effectively control our brand experience, better understand consumer behavior and preferences, and offer exclusive products, content, and customization capabilities. We believe our control over our DTC channel provides our customers the highest level of brand engagement and further builds customer loyalty, while generating attractive margins. As part of our commitment to premium positioning, we maintain supply discipline, consistently enforce our minimum advertised pricing, or MAP, policy across our wholesale and DTC channels, and sell primarily through one-step distribution.

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        Scalable Infrastructure to Support Growth.    As we have grown, we have worked diligently and invested significantly to further build our information technology capabilities, while improving business process effectiveness. This robust infrastructure facilitates our ability to manage our global manufacturing base, optimize complex distribution logistics, and effectively serve our consistently expanding customer base. We believe our global team, sophisticated technology backbone, and extensive experience provide us with the capabilities necessary to support our future growth.

        Experienced Management Team.    Our senior management team, led by our President and Chief Executive Officer, or CEO, Matt Reintjes, is comprised of experienced executives from large global product and services businesses and publicly listed companies. They have proven track records of scaling businesses, leading innovation, expanding distribution, and managing expansive global operations. Our culture is an embodiment of the values of our Founders who continue to work as a member of our product development team and a YETI Ambassador and help to identify new opportunities and drive innovation.

Our Growth Strategies

        We plan to continue growing our customer base by driving YETI brand awareness, introducing new and innovative products, entering new product categories, accelerating DTC sales, and expanding our international presence.

        Expand Our Brand Awareness and Customer Base.    Creating brand awareness among new customers and in new geographies has been, and remains, central to our growth strategy. We drive our brand through multilayered marketing programs, word-of-mouth referral, experiential brand events, YETI Ambassador reach, and product use. We have significantly invested in increasing brand awareness, spending $156.5 million in marketing initiatives from 2013 to 2017, including $50.7 million in 2017. This growth is illustrated by the increase in our gross sales derived from outside our heritage markets, which have increased significantly since 2013. We define our heritage markets as the South Atlantic, East South Central, and West South Central, as defined by the U.S. Census Bureau.

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        While we have meaningfully grown and expanded our brand reach throughout the United States and developed an emerging international presence, according to our quarterly brand study, unaided brand awareness, or consumers' awareness of our brand without prompt, in non-heritage markets remains meaningfully below unaided brand awareness in heritage markets. We believe our sales growth will be driven, in part, by continuing to grow YETI's brand awareness in these non-heritage markets.

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        Introduce New and Innovative Products.    We have a track record of consistently broadening our high performance, premium-priced product portfolio to meet our expanding customer base and their evolving pursuits. Our culture of innovation and success in identifying customer needs and wants drives our robust product pipeline. We typically enter a product line by introducing anchor products, followed by product expansions, such as additional sizes and colorways, and then accessories, as exemplified by our current product portfolio. In 2017, we expanded our Drinkware line to new colorways, launched our Hopper Two soft cooler, and added new Hopper Flip sizes and colors. We added to our Coolers & Equipment offering with the introductions of our Panga submersible duffel and LoadOut multipurpose bucket. In 2018, we introduced our Camino Carryall bag, Hondo base camp chair, Hopper Backflip backpack, Rambler wine tumblers, Haul wheeled cooler, Silo water cooler, Panga submersible backpack, Tocayo backpack, Boomer dog bowl, and Lowlands blanket. We have also meaningfully enhanced our customization capabilities through YETIcustomshop.com, which offers a broad assortment of custom logo Drinkware and coolers to individual and corporate clients.

        As we have done historically, we have identified several opportunities in new, adjacent product categories where we believe we can redefine performance standards and offer superior quality and design to customers. We believe these new opportunities will further bridge the connection between indoor and outdoor life and are consistent with our objective to have YETI products travel with customers wherever they go.

        Increase Direct-to-Consumer and Corporate Sales.    DTC represents our fastest growing sales channel, with net sales increasing from $14.1 million in 2013 to $194.4 million in 2017. Our DTC channel provides customers and businesses ready access to our brand, branded content, and full product assortment. We intend to continue to drive direct sales to our varied customers through: YETI.com; YETIcustomshop.com; YETI Authorized on the Amazon Marketplace; our corporate sales initiatives; increasing the number of our own retail stores; and our international YETI websites. In 2017, we had nearly 29.5 million visits to YETI.com and YETIcustomshop.com, of which 16.7 million were unique visitors and 0.8 million resulted in purchases. We believe we will continue to grow visitors to YETI.com and convert a portion of them to our customers. With YETIcustomshop.com, we believe there are significant opportunities to expand our licensing portfolio in sports and entertainment, along with numerous opportunities to further drive customized consumer and corporate sales. We began selling through YETI Authorized on the Amazon Marketplace in late 2016 and have enjoyed rapid reach expansion and sales growth since that time. Based upon our growth to date, we are optimistic about continued expansion through this important distribution channel. In 2017, we opened our flagship retail store in Austin, which is a showroom for our products as well as an event space. Sales from our flagship store have continued to grow since its opening. Building on the strong response to our flagship store, we intend to open a company store for employees and additional retail stores in the second half of 2018 or in 2019.

        Increasing sales through these various DTC channels enables us to control our product offering and how it is communicated to new and existing customers, fosters customer engagement, provides rapid feedback on new product launches, and enhances our demand forecasting. Further, our DTC channels provide customers an immersive and YETI-only experience, which we believe strengthens our brand.

        Expand into International Markets.    We believe we have the opportunity to continue to diversify and grow sales into existing and new international markets. In 2017, we successfully entered Canada and Australia, and 2018 net sales have continued to grow in both of these countries. In 2018, we successfully entered Japan. Our focus is on driving brand awareness, dealer expansion, and our DTC channel in these new markets. We believe there are meaningful growth opportunities by expanding into additional international markets, such as Europe and Asia, including China, as many of the market dynamics and premium, performance-based consumer needs that we have successfully identified domestically are also valued in these markets.

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Our Market

        Our premium products are designed for use in a wide variety of activities, from professional to recreational and outdoor to indoor, and can be used all year long. As a result, the markets we serve are broad as well as deep, including, for example, outdoor, housewares, home and garden, outdoor living, industrial, and commercial. While our product reach extends into numerous and varied markets, as of today, we primarily serve the United States outdoor recreation market. The outdoor recreation products market is a large, growing, and diverse economic super sector, which includes consumers of all genders, ages, ethnicities, and income levels. According to the Outdoor Industry Association's Outdoor Recreation Economy Reports, which are published every five years, outdoor recreation product sales in the United States grew from a total of approximately $120.7 billion in 2011 to a total of approximately $184.5 billion in 2016, representing a 9% CAGR.

Selected Risks Associated with Our Business

        Our business is subject to a number of risks and uncertainties, including those highlighted in the section titled "Risk Factors" immediately following this prospectus summary. Some of these principal risks include the following:

    our business depends on maintaining and strengthening our brand and generating and maintaining ongoing demand for our products, and a significant reduction in demand could harm our results of operations;

    if we are unable to successfully design and develop new products, our business may be harmed;

    we may not be able to effectively manage our growth;

    our growth depends in part on expanding into additional consumer markets, and we may not be successful in doing so;

    our plans for international expansion may not be successful;

    the outdoor and recreation market is highly competitive and includes numerous other brands and retailers that offer a wide variety of products that compete with our products; if we fail to compete effectively, or fail to protect our brand, our business would be harmed;

    we rely on third-party contract manufacturers and problems with, or loss of, our suppliers or an inability to obtain raw materials could harm our business and results of operations;

    fluctuations in the cost and availability of raw materials, equipment, labor, and transportation could cause manufacturing delays or increase our costs;

    our business could be harmed if we are unable to accurately forecast demand for our products or our results of operations;

    a significant portion of our sales are to national, regional, and independent retail partners and our business could be harmed if these retail partners decide to emphasize products from our competitors, to redeploy their retail floor space to other product categories, to take other actions that reduce their purchases of our products, or if they are disproportionately affected by economic conditions;

    our future success depends on the continuing efforts of our management and key employees and our ability to attract and retain highly-skilled personnel and senior management;

    our indebtedness may limit our ability to invest in the ongoing needs of our business and if we are unable to comply with the covenants in the Credit Agreement, dated as of May 19, 2016, by and among YETI Holdings, Inc., the lenders from time to time party thereto and Bank of America,

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      N.A., as administrative agent, as amended, which we refer to as the Credit Facility, our liquidity and results of operations could be harmed; and

    we will be a "controlled company" and, as a result, we intend to rely on exemptions from certain corporate governance requirements.

Implications of Being an Emerging Growth Company

        As a company with less than $1.07 billion in revenue during our last completed fiscal year, we qualify as an "emerging growth company" as defined in the Jumpstart Our Business Startups Act of 2012, or the JOBS Act. An emerging growth company may take advantage of certain reduced reporting requirements that are otherwise applicable generally to public companies. These reduced reporting requirements include:

    an exemption from compliance with the auditor attestation requirement on the effectiveness of our internal control over financial reporting;

    an exemption from compliance with any requirement that the Public Company Accounting Oversight Board, or PCAOB, may adopt regarding mandatory audit firm rotation or a supplement to the auditor's report providing additional information about the audit and the financial statements;

    reduced disclosure about our executive compensation arrangements;

    an exemption from the requirements to obtain a non-binding advisory vote on executive compensation or any golden parachute arrangements;

    extended transition periods for complying with new or revised accounting standards; and

    the ability to present more limited financial data, including presenting only three years of selected financial data in this registration statement, of which this prospectus is a part.

        We will remain an emerging growth company until the earliest to occur of: (i) the end of the first fiscal year in which our annual gross revenue is $1.07 billion or more; (ii) the end of the fiscal year in which the market value of our common stock that is held by non-affiliates is at least $700 million as of the last business day of our most recently completed second fiscal quarter; (iii) the date on which we have, during the previous three-year period, issued more than $1.0 billion in non-convertible debt securities; and (iv) the end of the fiscal year during which the fifth anniversary of this offering occurs. We may choose to take advantage of some, but not all, of the available benefits under the JOBS Act.

        We currently intend to take advantage of all of the exemptions discussed above. Accordingly, the information contained herein may be different than the information you receive from other public companies in which you invest.

Our Sponsor

        Cortec Group Fund V, L.P. and its affiliates, or Cortec, has been our principal stockholder since its initial investment in 2012.

        After the closing of this offering, Cortec will own approximately        % of our outstanding common stock (or approximately        % if the underwriters exercise their option to purchase additional shares in full). In addition, Cortec will have the right to vote in the election of our directors the shares of common stock held by Roy Seiders, Ryan Seiders, their respective affiliates, and certain other stockholders pursuant to a voting agreement, or the Voting Agreement, to be entered into upon the pricing of this offering. As a result, upon the completion of this offering, the group formed by the Voting Agreement will control more than 50% of the total voting power of our common stock with respect to the election of our directors.

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        In May 2016, we declared and paid a dividend, or the Special Dividend, as a partial return of capital to our stockholders. The Special Dividend totaled $451.3 million, of which Cortec received $312.1 million.

Corporate Information

        We were founded in 2006 by brothers Roy and Ryan Seiders in Austin, Texas and were subsequently incorporated as YETI Coolers, Inc., a Texas corporation, in 2010. In 2012, Cortec became our principal stockholder. In connection with Cortec's investment in YETI in 2012, YETI Coolers, Inc. was converted into YETI Coolers, LLC, a Delaware limited liability company, and subsequently YETI Coolers, LLC was acquired by an indirect subsidiary of YETI Holdings, Inc., a Delaware corporation incorporated in 2012 by Cortec. Thereafter, through two subsequent mergers, YETI Coolers, LLC became a wholly owned subsidiary of YETI Holdings, Inc. As part of the acquisition of YETI Coolers, LLC, our Founders and certain other equity holders exchanged a portion of their proceeds from the sale of YETI Coolers, LLC for equity in YETI Holdings, Inc. As a result, YETI Holdings, Inc. is currently majority owned by Cortec, with the remaining ownership being shared by our Founders, certain other management equity holders and select investors.

        Our principal executive and administrative offices are located at 7601 Southwest Parkway, Austin, Texas 78735, and our telephone number is (512) 394-9384. Our website address is YETI.com. The information on, or that can be accessed through, our website is not incorporated by reference into this prospectus and should not be considered to be a part of this prospectus.

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The Offering

Common stock offered by us

               shares

Common stock offered by the selling stockholders

 

             shares (                    shares if the underwriters exercise their option to purchase additional shares in full)

Underwriters' option to purchase additional shares from the selling stockholders

 

The underwriters have a 30-day option to purchase up to            additional shares of our common stock from the selling stockholders at the public offering price less estimated underwriting discounts and commissions.

Common stock to be outstanding after this offering

 

             shares

Use of proceeds

 

We estimate that we will receive net proceeds from the sale of shares of our common stock that we are selling in this offering of approximately $             million, after deducting estimated underwriting discounts and commissions and estimated offering expenses payable by us, based upon an assumed initial public offering price of $            per share, which is the midpoint of the price range set forth on the cover page of this prospectus. We currently intend to use the net proceeds from this offering to repay $            of outstanding borrowings under the Credit Facility and will use the remainder, if any, for general corporate purposes. We will not receive any proceeds from the sale of shares of our common stock by the selling stockholders. See "Use of Proceeds" for a complete description of the intended use of proceeds from this offering.

Controlled company

 

Pursuant to the Voting Agreement, upon the closing of this offering, Cortec will control more than 50% of the total voting power of our common stock with respect to the election of our directors. As a result, we will be a "controlled company" within the meaning of the New York Stock Exchange, or NYSE, listing standards, and therefore will be exempt from certain NYSE corporate governance requirements.

Risk factors

 

Investing in shares of our common stock involves a high degree of risk. See "Risk Factors" beginning on page 15 and the other information included in this prospectus for a discussion of factors you should carefully consider before investing in shares of our common stock.

Proposed NYSE symbol

 

"YETI"

        The number of shares of our common stock that will be outstanding after this offering is based on 204,401,582 shares of our common stock outstanding as of August 31, 2018, and excludes:

    6,740,000 shares of our common stock issuable upon the exercise of options to purchase shares of our common stock outstanding as of August 31, 2018 under the YETI Holdings, Inc. 2012 Equity

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      and Performance Incentive Plan, as amended and restated June 20, 2018, or the 2012 Plan, with a weighted average exercise price of $0.81 per share;

    3,553,487 shares of our common stock issuable upon the settlement of restricted stock units outstanding as of August 31, 2018 under the 2012 Plan, with an estimated fair value of $12.60 per share;

    5,584,931 shares of our common stock reserved for future issuance under the 2012 Plan which, upon the effectiveness of the 2018 Equity and Incentive Compensation Plan, or the 2018 Plan, will no longer be available for awards under the 2012 Plan or the 2018 Plan; and

    12,000,000 shares of our common stock reserved for future issuance under the 2018 Plan.

        Except as otherwise indicated, all information in this prospectus assumes or reflects:

    no exercise of the underwriters' option to purchase additional shares from the selling stockholders;

    no exercise or settlement of outstanding stock options;

    the filing and effectiveness of our amended and restated certificate of incorporation and the effectiveness of our amended and restated bylaws, each of which will occur prior to the completion of this offering;

    the amendment and restatement of our certificate of incorporation prior to the completion of this offering to effect a                 -for-                split of our common stock, including an                in the authorized shares of our capital stock, and all share, option, and per share information in this prospectus will be adjusted to reflect the split on a retroactive basis; and

    the amendment of our certificate of incorporation on May 5, 2016 to effect a 2,000-for-one forward split of our common stock, including an increase in the authorized shares of our capital stock, and all share, option, and per share information in this prospectus has been adjusted to reflect the split on a retroactive basis.

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Summary Consolidated Financial and Other Data

        The following tables set forth a summary of our historical summary consolidated financial data for the periods and at the dates indicated. Effective January 1, 2017, we converted our fiscal year end from a calendar year ending December 31 to a "52-53 week" year ending on the Saturday closest in proximity to December 31, such that each quarterly period will be 13 weeks in length, except during a 53-week year when the fourth quarter will be 14 weeks. This did not have a material effect on our consolidated financial statements and, therefore, we did not retrospectively adjust our financial statements. Fiscal year 2017 included 52 weeks, and the first six months of fiscal 2018 and fiscal 2017 included 26 weeks. The following table sets forth consolidated financial data for 2017, 2016, and 2015, which have been derived from our audited consolidated financial statements included elsewhere in this prospectus. The consolidated financial data as of and for the six months ended June 30, 2018 and for the six months ended July 1, 2017 have been derived from our unaudited condensed consolidated financial statements included elsewhere in this prospectus. In the opinion of management, our unaudited condensed consolidated financial statements were prepared on the same basis as our audited consolidated financial statements and include all adjustments necessary for a fair presentation of this information. The percentages below indicate the statement of operations data as a percentage of net sales. You should read this data together with our audited financial statements, our unaudited financial statements, and related notes appearing elsewhere in this prospectus and the information included under the caption "Management's Discussion and Analysis of Financial Condition and Results of Operations." Our historical results are not necessarily indicative of our future results.

 
  Six Months Ended   Fiscal Year Ended  
(in thousands, except per share
data)
  June 30,
2018
  July 1,
2017
  December 30,
2017
  December 31,
2016
  December 31,
2015
 

Statements of Operations

                                                             

Net sales

  $ 341,545     100 % $ 254,108     100 % $ 639,239     100 % $ 818,914     100 % $ 468,946     100 %

Cost of goods sold

    183,786     54 %   134,822     53 %   344,638     54 %   404,953     49 %   250,245     53 %

Gross profit

    157,759     46 %   119,286     47 %   294,601     46 %   413,961     51 %   218,701     47 %

Selling, general and administrative expenses

    121,329     36 %   103,908     41 %   230,634     36 %   325,754     40 %   90,791     19 %

Operating income

    36,430     11 %   15,378     6 %   63,967     10 %   88,207     11 %   127,910     27 %

Interest expense

    (16,719 )   5 %   (15,610 )   6 %   (32,607 )   5 %   (21,680 )   3 %   (6,075 )   1 %

Other (expense) income

    (111 )   0 %   1,150     0 %   699     0 %   (1,242 )   0 %   (6,474 )   1 %

Income before income taxes

    19,600     6 %   918     0 %   32,059     5 %   65,285     8 %   115,361     25 %

Income tax expense

    (4,036 )   1 %   (762 )   0 %   (16,658 )   3 %   (16,497 )   2 %   (41,139 )   9 %

Net income

  $ 15,564     5 % $ 156     0 % $ 15,401     2 % $ 48,788     6 % $ 74,222     16 %

Net income attributable to noncontrolling interest

        0 %       0 %       0 %   (811 )   0 %       0 %

Net income to YETI Holdings, Inc

    15,564     5 %   156     0 %   15,401     2 %   47,977     6 %   74,222     16 %

Adjusted Operating Income(1)

    46,642     14 %   23,343     9 %   76,003     12 %   221,429     27 %   136,043     29 %

Adjusted Net Income(1)

    23,453     7 %   5,267     2 %   23,126     4 %   134,559     16 %   79,484     17 %

Adjusted EBITDA(1)

  $ 58,416     17 % $ 33,849     13 % $ 97,471     15 % $ 231,862     28 % $ 137,101     29 %

Net income to YETI Holdings, Inc. per share

                                                             

Basic

  $ 0.08         $ 0.00         $ 0.08         $ 0.23         $ 0.37        

Diluted

  $ 0.07         $ 0.00         $ 0.07         $ 0.23         $ 0.37        

Adjusted Net Income per share(2)

                                                             

Diluted

  $ 0.11         $ 0.03         $ 0.11         $ 0.65         $ 0.39        

Weighted average common shares outstanding

                                                             

Basic

    204,744           205,165           205,236           204,274           200,944        

Diluted

    208,959           209,140           208,997           208,449           203,187        

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  As of
June 30, 2018
 
(dollars in thousands)
  As of
June 30, 2018
  Pro Forma(3)   Pro Forma
As Adjusted(3)(4)(5)
 

Balance Sheet and Other Data

                   

Inventory

  $ 149,368              

Property and equipment, net

    71,101              

Total assets

    510,397              

Long-term debt including current maturities

    427,863              

Total stockholders' deficit

    (56,801 )            

Additions to property and equipment

    7,067              

(1)
Adjusted Operating Income and Adjusted Net Income are defined as operating income and net income adjusted for non-cash stock-based compensation expense, early extinguishment of debt, asset impairment charges, investments in new retail locations and international market expansion, transition to Cortec majority ownership, transition to the ongoing senior management team, and transition to a public company, and, in the case of Adjusted Net Income, net of the tax impact of such adjustments. Adjusted EBITDA is defined as net income before interest expense, income tax expense, depreciation and amortization expense, non-cash stock-based compensation expense, early extinguishment of debt, asset impairment charges, investments in new retail locations and international market expansion, transition to Cortec majority ownership, transition to the ongoing senior management team, and transition to a public company. The expenses incurred related to these transitional events include: management fees and contingent consideration related to the transition to Cortec majority ownership; severance, recruiting, and relocation costs related to the transition to our ongoing senior management team; consulting fees, recruiting fees, salaries and travel costs related to members of our Board of Directors, fees associated with Sarbanes-Oxley Act compliance, and incremental audit and legal fees in connection with our transition to a public company. All of these transitional costs are reported in selling, general, and administrative, or SG&A, expenses.

Adjusted Operating Income, Adjusted Net Income, and Adjusted EBITDA are not defined under GAAP and may not be comparable to similarly titled measures reported by other entities. We use these non-GAAP measures, along with GAAP measures, as a measure of profitability. These measures help us compare our performance to other companies by removing the impact of our capital structure; the effect of operating in different tax jurisdictions; the impact of our asset base, which can vary depending on the book value of assets and methods used to compute depreciation and amortization; the effect of non-cash stock-based compensation expense, which can vary based on plan design, share price, share price volatility, and the expected lives of equity instruments granted; as well as certain expenses related to what we believe are events of a transitional nature. We also disclose Adjusted Operating Income, Adjusted Net Income, and Adjusted EBITDA as a percentage of net sales to provide a measure of relative profitability.

We believe these non-GAAP measures, when reviewed in conjunction with GAAP financial measures, and not in isolation or as substitutes for analysis of our results of operations under GAAP, are useful to investors as they are widely used measures of performance and the adjustments we make to these non-GAAP measures provide investors further insight into our profitability and additional perspectives in comparing our performance to other companies and in comparing our performance over time on a consistent basis. Adjusted Operating Income, Adjusted Net Income, and Adjusted EBITDA have limitations as profitability measures in that they do not include the interest expense on our debts, our provisions for income taxes, and the effect of our expenditures for capital assets and certain intangible assets. In addition, all of these non-GAAP measures have limitations as profitability measures in that they do not include the effect of non-cash stock-based compensation expense, the effect of asset impairments, the effect of investments in new retail locations and international market expansion, and the impact of certain expenses related to transitional events that are settled in cash. Because of these limitations, we rely primarily on our GAAP results.

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    In the future, we may incur expenses similar to those for which adjustments are made in calculating Adjusted Operating Income, Adjusted Net Income, and Adjusted EBITDA. Our presentation of these non-GAAP measures should not be construed as a basis to infer that our future results will be unaffected by extraordinary, unusual, or non-recurring items.

    The following tables reconcile operating income to Adjusted Operating Income, net income to Adjusted Net Income, and net income to Adjusted EBITDA for the periods presented.

 
  Six Months Ended   Fiscal Year Ended    
(dollars in thousands)
  June 30,
2018
  July 1,
2017
  December 30,
2017
  December 31,
2016
  December 31,
2015
   

Operating income

  $ 36,430   $ 15,378   $ 63,967   $ 88,207   $ 127,910    

Adjustments:

                                 

Non-cash stock-based compensation expense(a)(b)

    7,108     6,508     13,393     118,415     624    

Early extinguishment of debt(c)

                1,221        

Investments in new retail locations and international market expansion(a)(d)           

    240                    

Transition to Cortec majority ownership(a)(e)

    750     750     750     750     7,224    

Transition to the ongoing senior management team(a)(f)

    1,344         90     2,824     285    

Transition to a public company(a)(g)

    770     707     (2,197 )   10,012        

Adjusted Operating Income

  $ 46,642   $ 23,343   $ 76,003   $ 221,429   $ 136,043    

Net income

  $ 15,564   $ 156   $ 15,401   $ 48,788   $ 74,222    

Adjustments:

                                 

Non-cash stock-based compensation expense(a)(b)

    7,108     6,508     13,393     118,415     624    

Early extinguishment of debt(c)

                1,221        

Investments in new retail locations and international market expansion(a)(d)           

    240                    

Transition to Cortec majority ownership(a)(e)

    750     750     750     750     7,224    

Transition to the ongoing senior management team(a)(f)

    1,344         90     2,824     285    

Transition to a public company(a)(g)

    770     707     (2,197 )   10,012        

Tax impact of adjusting items(h)

    (2,323 )   (2,854 )   (4,311 )   (47,451 )   (2,871 )  

Adjusted Net Income

  $ 23,453   $ 5,267   $ 23,126   $ 134,559   $ 79,484    

Net income

  $ 15,564   $ 156   $ 15,401   $ 48,788   $ 74,222    

Adjustments:

                                 

Interest expense

    16,719     15,610     32,607     21,680     6,075    

Income tax expense

    4,036     762     16,658     16,497     41,139    

Depreciation and amortization expense(a)

    11,885     9,356     20,769     11,675     7,532    

Non-cash stock-based compensation expense(a)(b)

    7,108     6,508     13,393     118,415     624    

Early extinguishment of debt(c)

                1,221        

Investments in new retail locations and international market expansion(a)(d)

    240                    

Transition to Cortec majority ownership(a)(e)

    750     750     750     750     7,224    

Transition to the ongoing senior management team(a)(f)

    1,344         90     2,824     285    

Transition to a public company(a)(g)

    770     707     (2,197 )   10,012        

Adjusted EBITDA

  $ 58,416   $ 33,849   $ 97,471   $ 231,862   $ 137,101    

Net sales

  $ 341,545   $ 254,108   $ 639,239   $ 818,914   $ 468,946    

Net income as a % of net sales

    10.7 %   6.1 %   10.0 %   10.8 %   27.3 %  

Adjusted operating income as a % of net sales

    13.7 %   9.2 %   11.9 %   27.0 %   29.0 %  

Adjusted net income as a % of net sales           

    6.9 %   2.1 %   3.6 %   16.4 %   16.9 %  

Adjusted EBITDA as a % of net sales

    17.1 %   13.3 %   15.2 %   28.3 %   29.2 %  

(a)
All of these costs are reported in SG&A expenses.

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(b)
Represents non-cash stock-based compensation expense of $7.1 million and $6.5 million for the six months ended June 30, 2018 and July 1, 2017, respectively. For 2017, 2016, and 2015, compensation expense was $13.4 million, $118.4 million, and $0.6 million, respectively.

(c)
Represents the unamortized deferred financing fees associated with our prior credit facility, or the 2012 Credit Facility, which were outstanding at the time of repayment in May 2016.

(d)
Represents retail store pre-opening expenses and costs for expansion into new international markets.

(e)
Represents management fees of $0.8 million and $0.8 million and expenses associated with contingent consideration of $0 and $0 for the six months ended June 30, 2018 and July 1, 2017, respectively. For 2017, 2016, and 2015, annual management fees to Cortec were $0.8 million and contingent consideration was $0, $0, and $6.5 million, respectively.

(f)
Represents severance, recruiting, and relocation costs related to the transition to our ongoing senior management team.

(g)
Represents fees and expenses in connection with our transition to a public company, including consulting fees, recruiting fees, salaries, and travel costs related to members of our Board of Directors, fees associated with Sarbanes-Oxley Act compliance, and incremental audit and legal fees associated with being a public company.

(h)
Tax impact of adjustments calculated at a 23% and 36% effective tax rate for the six months ended June 30, 2018 and July 1, 2017, respectively. For 2017, 2016, and 2015, the effective tax rate used to calculate the tax impact of adjustments was 36%, 36%, and 35%, respectively.
(2)
Adjusted Net Income per share is calculated using Adjusted Net Income, as defined above, and diluted weighted average shares outstanding. Adjusted Net Income per share is not a presentation made in accordance with GAAP, and our use of the term Adjusted Net Income per share may vary from similar measures reported by others in our industry due to the potential differences in the method of calculation. Adjusted Net Income per share should not be considered as an alternative to earnings per share derived in accordance with GAAP. Adjusted Net Income per share has important limitations as an analytical tool and should not be considered in isolation or as a substitute for analysis of our results as reported under GAAP. Because of these limitations, we rely primarily on our GAAP results. However, we believe that presenting Adjusted Net Income per share is appropriate to provide investors with useful information regarding our historical operating results.

(3)
Reflects our total assets and total stockholders' equity (deficit) as of June 30, 2018 on a pro forma basis to give effect to (a) our        -for-        split of our common stock effected prior to the completion of this offering, including an          in the authorized shares of our capital stock; and (b) the filing and effectiveness of our amended and restated certificate of incorporation in Delaware, in each case as if such event had occurred on June 30, 2018.

(4)
Reflects the sale by us of shares of common stock in this offering at an assumed initial public offering price of $            per share, the midpoint of the price range set forth on the cover page of this prospectus, after deducting underwriting discounts and commissions and estimated offering expenses payable by us and the application of the net proceeds from this offering as described in "Use of Proceeds."

(5)
Each $1.00 increase (decrease) in the assumed initial public offering price of $            per share, the midpoint of the price range set forth on the cover page of this prospectus, would increase (decrease) each of total assets and total stockholders' equity (deficit) by approximately $            , assuming that the number of shares offered by us, as set forth on the cover page of this prospectus, remains the same, and after deducting underwriting discounts and commissions and estimated offering expenses payable by us. We may also increase or decrease the number of shares we are offering. Each increase (decrease) of 1,000,000 shares in the number of shares offered by us would increase (decrease) each of total assets and total stockholders' equity (deficit) by approximately $            , assuming that the assumed initial price to the public remains the same, and after deducting the underwriting discounts and commissions and estimated offering expenses payable by us. The pro forma as adjusted information discussed above is illustrative only and will adjust based on the actual initial public offering price and other terms of this offering determined at pricing.

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RISK FACTORS

        Investing in our common stock involves a high degree of risk. These risks include, but are not limited to, those described below, each of which may be relevant to an investment decision. You should carefully consider the risks and uncertainties described below, together with all of the other information contained in this prospectus, including the section titled "Management's Discussion and Analysis of Financial Condition and Results of Operations" and our consolidated financial statements and the related notes, before deciding whether to invest in shares of our common stock. If any of the following risks or other risks actually occur, our business, financial condition, results of operations, and future prospects could be materially harmed. In that event, the market price of our common stock could decline, and you could lose part or all of your investment.

Risks Related to Our Business and Industry

Our business depends on maintaining and strengthening our brand and generating and maintaining ongoing demand for our products, and a significant reduction in such demand could harm our results of operations.

        The YETI name and premium brand image are integral to the growth of our business, as well as to the implementation of our strategies for expanding our business. Our success depends on the value and reputation of our brand, which, in turn, depends on factors such as the quality, design, performance, functionality, and durability of our products, the image of our e-commerce platform and retail partner floor spaces, our communication activities, including advertising, social media, and public relations, and our management of the customer experience, including direct interfaces through customer service. Maintaining, promoting, and positioning our brand are important to expanding our customer base, and will depend largely on the success of our marketing and merchandising efforts and our ability to provide consistent, high quality customer experiences. We intend to make substantial investments in these areas in order to maintain and enhance our brand, and such investments may not be successful. Ineffective marketing, negative publicity, product diversion to unauthorized distribution channels, product or manufacturing defects, counterfeit products, unfair labor practices, and failure to protect the intellectual property rights in our brand are some of the potential threats to the strength of our brand, and those and other factors could rapidly and severely diminish customer confidence in us. Furthermore, these factors could cause our customers to lose the personal connection they feel with the YETI brand. We believe that maintaining and enhancing our brand image in our current markets and in new markets where we have limited brand recognition is important to expanding our customer base. If we are unable to maintain or enhance our brand in current or new markets, our growth strategy and results of operations could be harmed.

If we are unable to successfully design and develop new products, our business may be harmed.

        To maintain and increase sales we must continue to introduce new products and improve or enhance our existing products. The success of our new and enhanced products depends on many factors, including anticipating consumer preferences, finding innovative solutions to consumer problems, differentiating our products from those of our competitors, and maintaining the strength of our brand. The design and development of our products is costly and we typically have several products in development at the same time. Problems in the design or quality of our products, or delays in product introduction, may harm our brand, business, financial condition, and results of operations.

Our business could be harmed if we are unable to accurately forecast demand for our products or our results of operations.

        To ensure adequate inventory supply, we forecast inventory needs and often place orders with our manufacturers before we receive firm orders from our retail partners or customers. If we fail to accurately forecast demand, we may experience excess inventory levels or a shortage of product to deliver to our retail partners and through our DTC channel.

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        If we underestimate the demand for our products, our manufacturers may not be able to scale to meet our demand, and this could result in delays in the shipment of our products and our failure to satisfy demand, as well as damage to our reputation and retail partner relationships. If we overestimate the demand for our products, we could face inventory levels in excess of demand, which could result in inventory write-downs or write-offs and the sale of excess inventory at discounted prices, which would harm our gross margins. For example, driven by strong customer demand and a shortage of product in 2015, retailers aggressively stocked our products during 2016, which led to excess inventory in our wholesale channel and drove many of our retail partners to reduce purchases in the first half of 2017. In addition, failures to accurately predict the level of demand for our products could cause a decline in sales and harm our results of operations and financial condition.

        In addition, we may not be able to accurately forecast our results of operations and growth rate. Forecasts may be particularly challenging as we expand into new markets and geographies and develop and market new products. Our historical sales, expense levels, and profitability may not be an appropriate basis for forecasting future results.

        Failure to accurately forecast our results of operations and growth rate could cause us to make poor operating decisions and we may not be able to adjust in a timely manner. Consequently, actual results could be materially lower than anticipated. Even if the markets in which we compete expand, we cannot assure you that our business will grow at similar rates, if at all.

We may not be able to effectively manage our growth.

        As we grow our business, slower growing or reduced demand for our products, increased competition, a decrease in the growth rate of our overall market, failure to develop and successfully market new products, or the maturation of our business or market could harm our business. We expect to make significant investments in our research and development and sales and marketing organizations, expand our operations and infrastructure both domestically and internationally, design and develop new products, and enhance our existing products. In addition, in connection with operating as a public company, we will incur significant additional legal, accounting, and other expenses that we did not incur as a private company. If our sales do not increase at a sufficient rate to offset these increases in our operating expenses, our profitability may decline in future periods.

        We have expanded our operations rapidly since our inception. Our employee headcount and the scope and complexity of our business have increased substantially over the past several years. We have only a limited history operating our business at its current scale. Our management team does not have substantial tenure working together. Consequently, if our operations continue to grow at a rapid pace, we may experience difficulties in managing this growth and building the appropriate processes and controls. Continued growth may increase the strain on our resources, and we could experience operating difficulties, including difficulties in sourcing, logistics, recruiting, maintaining internal controls, marketing, designing innovative products, and meeting consumer needs. If we do not adapt to meet these evolving challenges, the strength of our brand may erode, the quality of our products may suffer, we may not be able to deliver products on a timely basis to our customers, and our corporate culture may be harmed.

Our marketing strategy of associating our brand and products with activities rooted in passion for the outdoors may not be successful with existing and future customers.

        We believe that we have been successful in marketing our products by associating our brand and products with activities rooted in passion for the outdoors. To sustain long-term growth, we must continue to successfully promote our products to consumers who identify with or aspire to these activities, as well as to individuals who simply value products of uncompromising quality and design. If we fail to continue to successfully market and sell our products to our existing customers or expand our customer base, our sales could decline or we may be unable to grow our business.

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If we fail to attract new customers, or fail to do so in a cost-effective manner, we may not be able to increase sales.

        Our success depends, in part, on our ability to attract customers in a cost-effective manner. In order to expand our customer base, we must appeal to and attract customers ranging from serious outdoor enthusiasts to individuals who simply value products of uncompromising quality and design. We have made, and we expect that we will continue to make, significant investments in attracting new customers, including through the use of YETI Ambassadors, traditional, digital, and social media, original YETI films, and participation in, and sponsorship of, community events. Marketing campaigns can be expensive and may not result in the cost-effective acquisition of customers. Further, as our brand becomes more widely known, future marketing campaigns may not attract new customers at the same rate as past campaigns. If we are unable to attract new customers, our business will be harmed.

Our growth depends, in part, on expanding into additional consumer markets, and we may not be successful in doing so.

        We believe that our future growth depends not only on continuing to reach our current core demographic, but also continuing to broaden our retail partner and customer base. The growth of our business will depend, in part, on our ability to continue to expand our retail partner and customer bases in the United States, as well as into international markets, including Canada, Australia, Europe, Japan, and China. In these markets, we may face challenges that are different from those we currently encounter, including competitive, merchandising, distribution, hiring, and other difficulties. We may also encounter difficulties in attracting customers due to a lack of consumer familiarity with or acceptance of our brand, or a resistance to paying for premium products, particularly in international markets. We continue to evaluate marketing efforts and other strategies to expand the customer base for our products. In addition, although we are investing in sales and marketing activities to further penetrate newer regions, including expansion of our dedicated sales force, we cannot assure you that we will be successful. If we are not successful, our business and results of operations may be harmed.

Our net sales and profits depend on the level of customer spending for our products, which is sensitive to general economic conditions and other factors.

        Our products are discretionary items for customers. Therefore, the success of our business depends significantly on economic factors and trends in consumer spending. There are a number of factors that influence consumer spending, including actual and perceived economic conditions, consumer confidence, disposable consumer income, consumer credit availability, unemployment, and tax rates in the markets where we sell our products. Consumers also have discretion as to where to spend their disposable income and may choose to purchase other items or services if we do not continue to provide authentic, compelling, and high-quality products at appropriate price points. As global economic conditions continue to be volatile and economic uncertainty remains, trends in consumer discretionary spending also remain unpredictable and subject to declines. Any of these factors could harm discretionary consumer spending, resulting in a reduction in demand for our premium products, decreased prices, and harm to our business and results of operations.

The markets in which we compete are highly competitive and include numerous other brands and retailers that offer a wide variety of products that compete with our products; if we fail to compete effectively, we could lose our market position.

        The markets in which we compete are highly competitive, with low barriers to entry. Numerous other brands and retailers offer a wide variety of products that compete with our cooler, drinkware, and other products, including our bags, storage, and outdoor lifestyle products and accessories. Competition in these product markets is based on a number of factors including product quality, performance, durability, styling, brand image and recognition, and price. We believe that we are one of the market leaders in both the U.S. premium cooler and premium stainless steel drinkware markets. We believe that we have been able to

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compete successfully largely on the basis of our brand, superior design capabilities, and product development, as well as on the breadth of our independent retailers, national retail partners, and growing DTC channel. Our competitors may be able to develop and market higher quality products that compete with our products, sell their products for lower prices, adapt to changes in consumers' needs and preferences more quickly, devote greater resources to the design, sourcing, distribution, marketing, and sale of their products, or generate greater brand recognition than us. In addition, as we expand into new product categories we have faced, and will continue to face, different and, in some cases, more formidable competition. We believe many of our competitors and potential competitors have significant competitive advantages, including longer operating histories, ability to leverage their sales efforts and marketing expenditures across a broader portfolio of products, global product distribution, larger and broader retailer bases, more established relationships with a larger number of suppliers and manufacturing partners, greater brand recognition, larger or more effective brand ambassador and endorsement relationships, greater financial strength, larger research and development teams, larger marketing budgets, and more distribution and other resources than we do. Some of our competitors may aggressively discount their products or offer other attractive sales terms in order to gain market share, which could result in pricing pressures, reduced profit margins, or lost market share. If we are not able to overcome these potential competitive challenges, effectively market our current and future products, and otherwise compete effectively against our current or potential competitors, our prospects, results of operations, and financial condition could be harmed.

Competitors have attempted and will likely continue to attempt to imitate our products and technology. If we are unable to protect or preserve our brand image and proprietary rights, our business may be harmed.

        As our business continues to expand, our competitors have imitated, and will likely continue to imitate, our product designs and branding, which could harm our business and results of operations. Only a portion of the intellectual property used in the manufacture and design of our products is patented, and we therefore rely significantly on trade secrets, trade and service marks, trade dress, and the strength of our brand. We regard our patents, trade dress, trademarks, copyrights, trade secrets, and similar proprietary rights as critical to our success. We also rely on trade secret protection and confidentiality agreements with our employees, consultants, suppliers, manufacturers, and others to protect our proprietary rights. Nevertheless, the steps we take to protect our proprietary rights against infringement or other violation may be inadequate and we may experience difficulty in effectively limiting the unauthorized use of our patents, trademarks, trade dress, and other intellectual property and proprietary rights worldwide. We also cannot guarantee that others will not independently develop technology with the same or similar function to any proprietary technology we rely on to conduct our business and differentiate ourselves from our competitors. Because a significant portion of our products are manufactured overseas in countries where counterfeiting is more prevalent, and we intend to increase our sales overseas over the long term, we may experience increased counterfeiting of our products. Unauthorized use or invalidation of our patents, trademarks, copyrights, trade dress, trade secrets, or other intellectual property or proprietary rights may cause significant damage to our brand and harm our results of operations.

        While we actively develop and protect our intellectual property rights, there can be no assurance that we will be adequately protected in all countries in which we conduct our business or that we will prevail when defending our patent, trademark, and proprietary rights. Additionally, we could incur significant costs and management distraction in pursuing claims to enforce our intellectual property rights through litigation, and defending any alleged counterclaims. If we are unable to protect or preserve the value of our patents, trade dress, trademarks, copyrights, or other intellectual property rights for any reason, or if we fail to maintain our brand image due to actual or perceived product or service quality issues, adverse publicity, governmental investigations or litigation, or other reasons, our brand and reputation could be damaged and our business may be harmed.

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We rely on third-party contract manufacturers and problems with, or loss of, our suppliers or an inability to obtain raw materials could harm our business and results of operations.

        Our products are produced by third-party contract manufacturers. We face the risk that these third-party contract manufacturers may not produce and deliver our products on a timely basis, or at all. We have experienced, and will likely continue to experience, operational difficulties with our manufacturers. These difficulties include reductions in the availability of production capacity, errors in complying with product specifications and regulatory and customer requirements, insufficient quality control, failures to meet production deadlines, failure to achieve our product quality standards, increases in costs of materials, and manufacturing or other business interruptions. The ability of our manufacturers to effectively satisfy our production requirements could also be impacted by manufacturer financial difficulty or damage to their operations caused by fire, terrorist attack, natural disaster, or other events. The failure of any manufacturer to perform to our expectations could result in supply shortages or delays for certain products and harm our business. If we experience significantly increased demand, or if we need to replace an existing manufacturer due to lack of performance, we may be unable to supplement or replace our manufacturing capacity on a timely basis or on terms that are acceptable to us, which may increase our costs, reduce our margins, and harm our ability to deliver our products on time. For certain of our products, it may take a significant amount of time to identify and qualify a manufacturer that has the capability and resources to produce our products to our specifications in sufficient volume and satisfy our service and quality control standards.

        The capacity of our manufacturers to produce our products is also dependent upon the availability of raw materials. Our manufacturers may not be able to obtain sufficient supply of raw materials, which could result in delays in deliveries of our products by our manufacturers or increased costs. Any shortage of raw materials or inability of a manufacturer to produce or ship our products in a timely manner, or at all, could impair our ability to ship orders of our products in a cost-efficient, timely manner and could cause us to miss the delivery requirements of our customers. As a result, we could experience cancellations of orders, refusals to accept deliveries, or reductions in our prices and margins, any of which could harm our financial performance, reputation, and results of operations.

Our business is subject to the risk of manufacturer and supplier concentrations.

        We depend on a limited number of third-party contract manufacturers for the sourcing of our products. For our hard coolers, our two largest manufacturers comprised approximately 80% of our production volume during 2017. For each of our soft coolers, our two largest suppliers comprised over 94% of our production volume during 2017. For our cargo and bags, one supplier accounted for all of our production volume of each product during 2017. For our Drinkware products, our two largest suppliers comprised approximately 90% of our production volume during 2017. As a result of this concentration in our supply chain, our business and operations would be negatively affected if any of our key manufacturers or suppliers were to experience significant disruption affecting the price, quality, availability, or timely delivery of products. The partial or complete loss of these manufacturers or suppliers, or a significant adverse change in our relationship with any of these manufacturers or suppliers, could result in lost sales, added costs, and distribution delays that could harm our business and customer relationships.

Our business could be harmed if we fail to execute our internal plans to transition our supply chain and certain other business processes to a global scale.

        We are in the process of re-engineering certain of our supply chain management processes, as well as certain other business processes, to support our expanding scale. This expansion to a global scale requires significant investment of capital and human resources, the re-engineering of many business processes, and the attention of many managers and other employees who would otherwise be focused on other aspects of our business. If our globalization efforts fail to produce planned efficiencies, or the transition is not managed effectively, we may experience excess inventories, inventory shortage, late deliveries, lost sales, or

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increased costs. Any business disruption arising from our globalization efforts, or our failure to effectively execute our internal plans for globalization, could harm our results of operations and financial condition.

We rely on a combination of purchase orders and supply contracts with our suppliers and manufacturers. Some of these relationships are not exclusive, which means that these suppliers and manufacturers could produce similar products for our competitors.

        We rely on a combination of purchase orders and supply contracts with our suppliers and manufacturers. With all of our suppliers and manufacturers, we face the risk that they may fail to produce and deliver supplies or our products on a timely basis, or at all, or comply with our quality standards. In addition, our suppliers and manufacturers may raise prices in the future, which would increase our costs and harm our margins. Even those suppliers and manufacturers with whom we have supply contracts may breach these agreements, and we may not be able to enforce our rights under these agreements or may incur significant costs attempting to do so. As a result, we cannot predict with certainty our ability to obtain supplies and finished products in adequate quantities, of required quality and at acceptable prices from our suppliers and manufacturers in the future. Any one of these risks could harm our ability to deliver our products on time, or at all, damage our reputation and our relationships with our retail partners and customers, and increase our product costs thereby reducing our margins.

        In addition, except in some of the situations where we have a supply contract, our arrangements with our manufacturers and suppliers are not exclusive. As a result, our suppliers or manufacturers could produce similar products for our competitors, some of which could potentially purchase products in significantly greater volume. Further, while certain of our long-term contracts stipulate contractual exclusivity, those suppliers or manufacturers could choose to breach our agreements and work with our competitors. Our competitors could enter into restrictive or exclusive arrangements with our manufacturers or suppliers that could impair or eliminate our access to manufacturing capacity or supplies. Our manufacturers or suppliers could also be acquired by our competitors, and may become our direct competitors, thus limiting or eliminating our access to supplies or manufacturing capacity.

Fluctuations in the cost and availability of raw materials, equipment, labor, and transportation could cause manufacturing delays or increase our costs.

        The price and availability of key components used to manufacture our products, including polyethylene, polyurethane foam, stainless steel, polyester fabric, zippers, and other plastic materials and coatings, as well as manufacturing equipment and molds, may fluctuate significantly. In addition, the cost of labor at our third-party contract manufacturers could increase significantly. For example, manufacturers in China have experienced increased costs in recent years due to shortages of labor and fluctuations of the Chinese Yuan in relation to the U.S. dollar. Additionally, the cost of logistics and transportation fluctuates in large part due to the price of oil. Any fluctuations in the cost and availability of any of our raw materials or other sourcing or transportation costs related to our raw materials or products could harm our gross margins and our ability to meet customer demand. If we are unable to successfully mitigate a significant portion of these product cost increases or fluctuations, our results of operations could be harmed.

Many of our products are manufactured by third parties outside of the United States, and our business may be harmed by legal, regulatory, economic, and political risks associated with international trade and those markets.

        Many of our core products are manufactured in China, Italy, Mexico, and the Philippines. Our reliance on suppliers and manufacturers in foreign markets creates risks inherent in doing business in foreign jurisdictions, including: (a) the burdens of complying with a variety of foreign laws and regulations, including trade and labor restrictions and laws relating to the importation and taxation of goods; (b) weaker protection for intellectual property and other legal rights than in the United States, and practical difficulties in enforcing intellectual property and other rights outside of the United States; (c) compliance with U.S. and foreign laws relating to foreign operations, including the U.S. Foreign

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Corrupt Practices Act, or FCPA, the UK Bribery Act 2010, or the Bribery Act, regulations of the U.S. Office of Foreign Assets Controls, or OFAC, and U.S. anti-money laundering regulations, which prohibit U.S. companies from making improper payments to foreign officials for the purpose of obtaining or retaining business, operating in certain countries, as well as engaging in other corrupt and illegal practices; (d) economic and political instability and acts of terrorism in the countries where our suppliers are located; (e) transportation interruptions or increases in transportation costs; and (f) the imposition of tariffs on components and products that we import into the United States or other markets. We cannot assure you that our directors, officers, employees, representatives, manufacturers, or suppliers have not engaged and will not engage in conduct for which we may be held responsible, nor can we assure you that our manufacturers, suppliers, or other business partners have not engaged and will not engage in conduct that could materially harm their ability to perform their contractual obligations to us or even result in our being held liable for such conduct. Violations of the FCPA, the Bribery Act, OFAC restrictions, or other export control, anti-corruption, anti-money laundering, and anti-terrorism laws or regulations may result in severe criminal or civil sanctions, and we may be subject to other related liabilities, which could harm our business, financial condition, cash flows, and results of operations.

If tariffs or other restrictions are placed on foreign imports or any related counter-measures are taken by other countries, our business and results of operations could be harmed.

        The Trump Administration has put into place tariffs and other trade restrictions and signaled that it may additionally alter trade agreements and terms between the United States and China, the European Union, Canada, and Mexico, among others, including limiting trade and/or imposing tariffs on imports from such countries. In addition, China, the European Union, Canada, and Mexico, among others, have either threatened or put into place retaliatory tariffs of their own. If tariffs or other restrictions are placed on foreign imports, including on any of our products manufactured overseas for sale in the United States, or any related counter-measures are taken by other countries, our business and results of operations may be materially harmed.

        These tariffs have the potential to significantly raise the cost of our products. In such a case, there can be no assurance that we will be able to shift manufacturing and supply agreements to non-impacted countries, including the United States, to reduce the effects of the tariffs. As a result, we may suffer margin erosion or be required to raise our prices, which may result in the loss of customers, negatively impact our results of operations, or otherwise harm our business. In addition, the imposition of tariffs on products that we export to international markets could make such products more expensive compared to those of our competitors if we pass related additional costs on to our customers, which may also result in the loss of customers, negatively impact our results of operations, or otherwise harm our business.

If we fail to timely and effectively obtain shipments of products from our manufacturers and deliver products to our retail partners and customers, our business and results of operations could be harmed.

        Our business depends on our ability to source and distribute products in a timely manner. However, we cannot control all of the factors that might affect the timely and effective procurement of our products from our third-party contract manufacturers and the delivery of our products to our retail partners and customers.

        Our third-party contract manufacturers ship most of our products to our distribution centers in Dallas, Texas. Our reliance on a single geographical location for our distribution centers makes us more vulnerable to natural disasters, weather-related disruptions, accidents, system failures, or other unforeseen events that could delay or impair our ability to fulfill retailer orders and/or ship merchandise purchased on our website, which could harm our sales. We import our products, and we are also vulnerable to risks associated with products manufactured abroad, including, among other things: (a) risks of damage, destruction, or confiscation of products while in transit to our distribution centers; and (b) transportation and other delays in shipments, including as a result of heightened security screening, port congestion, and

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inspection processes or other port-of-entry limitations or restrictions in the United States. In order to meet demand for a product, we have chosen in the past, and may choose in the future, to arrange for additional quantities of the product, if available, to be delivered through air freight, which is significantly more expensive than standard shipping by sea and, consequently, could harm our gross margins. Failure to procure our products from our third-party contract manufacturers and deliver merchandise to our retail partners and DTC channels in a timely, effective, and economically viable manner could reduce our sales and gross margins, damage our brand, and harm our business.

        We also rely on the timely and free flow of goods through open and operational ports from our suppliers and manufacturers. Labor disputes or disruptions at ports, our common carriers, or our suppliers or manufacturers could create significant risks for our business, particularly if these disputes result in work slowdowns, lockouts, strikes, or other disruptions during periods of significant importing or manufacturing, potentially resulting in delayed or cancelled orders by customers, unanticipated inventory accumulation or shortages, and harm to our business, results of operations, and financial condition.

        In addition, we rely upon independent land-based and air freight carriers for product shipments from our distribution centers to our retail partners and customers who purchase through our DTC channel. We may not be able to obtain sufficient freight capacity on a timely basis or at favorable shipping rates and, therefore, may not be able to receive products from suppliers or deliver products to retail partners or customers in a timely and cost-effective manner.

        Accordingly, we are subject to the risks, including labor disputes, union organizing activity, inclement weather, and increased transportation costs, associated with our third-party contract manufacturers' and carriers' ability to provide products and services to meet our requirements. In addition, if the cost of fuel rises, the cost to deliver products may rise, which could harm our profitability.

A significant portion of our sales are to independent retail partners.

        For 2017, 37% of our net sales were made to independent retail partners. These retail partners may decide to emphasize products from our competitors, to redeploy their retail floor space to other product categories, or to take other actions that reduce their purchases of our products. We do not receive long-term purchase commitments from our independent retail partners, and orders received from our independent retail partners are cancellable. Factors that could affect our ability to maintain or expand our sales to these independent retail partners include: (a) failure to accurately identify the needs of our customers; (b) a lack of customer acceptance of new products or product expansions; (c) unwillingness of our independent retail partners and customers to attribute premium value to our new or existing products or product expansions relative to competing products; (d) failure to obtain shelf space from our retail partners; (e) new, well-received product introductions by competitors; and (f) damage to our relationships with independent retail partners due to brand or reputational harm.

        We cannot assure you that our independent retail partners will continue to carry our current products or carry any new products that we develop. If these risks occur, they could harm our brand as well as our results of operations and financial condition.

We depend on our retail partners to display and present our products to customers, and our failure to maintain and further develop our relationships with our retail partners could harm our business.

        We sell a significant amount of our products through knowledgeable national, regional, and independent retail partners. Our retail partners service customers by stocking and displaying our products, explaining our product attributes, and sharing our brand story. Our relationships with these retail partners are important to the authenticity of our brand and the marketing programs we continue to deploy. Our failure to maintain these relationships with our retail partners or financial difficulties experienced by these retail partners could harm our business.

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        We have key relationships with national retail partners. For 2017, one retail partner accounted for approximately 14% of our total sales. If we lose any of our key retail partners or any key retail partner reduces its purchases of our existing or new products or its number of stores or operations or promotes products of our competitors over ours, our sales would be harmed. Because we are a premium brand, our sales depend, in part, on retail partners effectively displaying our products, including providing attractive space and point of purchase displays in their stores, and training their sales personnel to sell our products. If our retail partners reduce or terminate those activities, we may experience reduced sales of our products, resulting in lower gross margins, which would harm our results of operations.

If our plans to increase sales through our DTC channel are not successful, our business and results of operations could be harmed.

        For 2017, our DTC channel accounted for 30% of our net sales. Part of our growth strategy involves increasing sales through our DTC channel. However, we have limited operating experience executing the retail component of this strategy. The level of customer traffic and volume of customer purchases through our website or other e-commerce initiatives are substantially dependent on our ability to provide a content-rich and user-friendly website, a hassle-free customer experience, sufficient product availability, and reliable, timely delivery of our products. If we are unable to maintain and increase customers' use of our website, allocate sufficient product to our website, and increase any sales through our website, our business, and results of operations could be harmed.

        We currently operate our online stores in a limited number of countries and are planning to expand our e-commerce platform to others. These countries may impose different and evolving laws governing the operation and marketing of e-commerce websites, as well as the collection, storage, and use of information on customers interacting with those websites. We may incur additional costs and operational challenges in complying with these laws, and differences in these laws may cause us to operate our business differently, and less effectively, in different territories. If so, we may incur additional costs and may not fully realize the investment in our international expansion.

If we do not successfully implement our future retail store expansion, our growth and profitability could be harmed.

        We may in the future expand our existing DTC channel by opening new retail stores. We intend to open a company store for employees and additional retail stores in the second half of 2018 or in 2019. Our ability to open new retail stores in a timely manner and operate them profitably depends on a number of factors, many of which are beyond our control, including:

    our ability to manage the financial and operational aspects of our retail growth strategy, including making appropriate investments in our software systems, information technology, and operational infrastructure;

    our ability to identify suitable locations, including our ability to gather and assess demographic and marketing data to accurately determine customer demand for our products in the locations we select;

    our ability to negotiate favorable lease agreements;

    our ability to properly assess the potential profitability and payback period of potential new retail store locations;

    the availability of financing on favorable terms;

    our ability to secure required governmental permits and approvals and our ability to effectively comply with state and local employment and labor laws, rules, and regulations;

    our ability to hire and train skilled store operating personnel, especially management personnel;

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    the availability of construction materials and labor and the absence of significant construction delays or cost overruns;

    our ability to provide a satisfactory mix of merchandise that is responsive to the needs of our customers living in the areas where new retail stores are established;

    our ability to establish a supplier and distribution network able to supply new retail stores with inventory in a timely manner;

    our competitors, or our retail partners, building or leasing stores near our retail stores or in locations we have identified as targets for a new retail store;

    customer demand for our products; and

    general economic and business conditions affecting consumer confidence and spending and the overall strength of our business.

        We currently have only one retail store and, therefore, have limited experience in opening retail stores and may not be able to successfully address the risks that they entail. For example, we may not be able to implement our retail store strategy, achieve desired net sales growth, and payback periods or maintain consistent levels of profitability in our retail stores. In order to pursue our retail store strategy, we will be required to expend significant cash resources prior to generating any sales in these stores. We may not generate sufficient sales from these stores to justify these expenses, which could harm our business and profitability. The substantial management time and resources which any future retail store expansion strategy may require could also result in disruption to our existing business operations which may decrease our net sales and profitability.

Insolvency, credit problems or other financial difficulties that could confront our retail partners could expose us to financial risk.

        We sell to the large majority of our retail partners on open account terms and do not require collateral or a security interest in the inventory we sell them. Consequently, our accounts receivable with our retail partners are unsecured. Insolvency, credit problems, or other financial difficulties confronting our retail partners could expose us to financial risk. These actions could expose us to risks if they are unable to pay for the products they purchase from us. Financial difficulties of our retail partners could also cause them to reduce their sales staff, use of attractive displays, number or size of stores, and the amount of floor space dedicated to our products. Any reduction in sales by, or loss of, our current retail partners or customer demand, or credit risks associated with our retail partners, could harm our business, results of operations, and financial condition.

If our independent suppliers and manufacturing partners do not comply with ethical business practices or with applicable laws and regulations, our reputation, business, and results of operations would be harmed.

        Our reputation and our customers' willingness to purchase our products depend in part on our suppliers', manufacturers', and retail partners' compliance with ethical employment practices, such as with respect to child labor, wages and benefits, forced labor, discrimination, safe and healthy working conditions, and with all legal and regulatory requirements relating to the conduct of their businesses. We do not exercise control over our suppliers, manufacturers, and retail partners and cannot guarantee their compliance with ethical and lawful business practices. If our suppliers, manufacturers, or retail partners fail to comply with applicable laws, regulations, safety codes, employment practices, human rights standards, quality standards, environmental standards, production practices, or other obligations, norms, or ethical standards, our reputation and brand image could be harmed and we could be exposed to litigation and additional costs that would harm our business, reputation, and results of operations.

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We are subject to payment-related risks.

        For our DTC sales, as well as for sales to certain retail partners, we accept a variety of payment methods, including credit cards, debit cards, electronic funds transfers, electronic payment systems, and gift cards. Accordingly, we are, and will continue to be, subject to significant and evolving regulations and compliance requirements, including obligations to implement enhanced authentication processes that could result in increased costs and liability, and reduce the ease of use of certain payment methods. For certain payment methods, including credit and debit cards, as well as electronic payment systems, we pay interchange and other fees, which may increase over time. We rely on independent service providers for payment processing, including credit and debit cards. If these independent service providers become unwilling or unable to provide these services to us or if the cost of using these providers increases, our business could be harmed. We are also subject to payment card association operating rules and agreements, including data security rules and agreements, certification requirements and rules governing electronic funds transfers, which could change or be reinterpreted to make it difficult or impossible for us to comply. If we fail to comply with these rules or requirements, or if our data security systems are breached or compromised, we may be liable for losses incurred by card issuing banks or customers, subject to fines and higher transaction fees, lose our ability to accept credit or debit card payments from our customers, or process electronic fund transfers or facilitate other types of payments. Any failure to comply could significantly harm our brand, reputation, business, and results of operations.

Our future success depends on the continuing efforts of our management and key employees, and on our ability to attract and retain highly skilled personnel and senior management.

        We depend on the talents and continued efforts of our senior management and key employees. The loss of members of our management or key employees may disrupt our business and harm our results of operations. Furthermore, our ability to manage further expansion will require us to continue to attract, motivate, and retain additional qualified personnel. Competition for this type of personnel is intense, and we may not be successful in attracting, integrating, and retaining the personnel required to grow and operate our business effectively. There can be no assurance that our current management team, or any new members of our management team, will be able to successfully execute our business and operating strategies.

Our plans for international expansion may not be successful.

        Continued expansion into markets outside the United States, including Canada, Australia, Europe, Japan, and China, is one of our key long-term strategies for the future growth of our business. There are, however, significant costs and risks inherent in selling our products in international markets, including: (a) failure to effectively translate and establish our core brand identity, particularly in markets with a less established heritage of outdoor and recreational activities; (b) time and difficulty in building a widespread network of retail partners; (c) increased shipping and distribution costs, which could increase our expenses and reduce our margins; (d) potentially lower margins in some regions; (e) longer collection cycles in some regions; (f) increased competition from local providers of similar products; (g) compliance with foreign laws and regulations, including taxes and duties, and enhanced privacy laws, rules, and regulations, particularly in the European Union; (h) establishing and maintaining effective internal controls at foreign locations and the associated increased costs; (i) increased counterfeiting and the uncertainty of protection for intellectual property rights in some countries and practical difficulties of enforcing rights abroad; (j) compliance with anti-bribery, anti-corruption, and anti-money laundering laws, such as the FCPA, the Bribery Act, and OFAC regulations, by us, our employees, and our business partners; (k) currency exchange rate fluctuations and related effects on our results of operations; (l) economic weakness, including inflation, or political instability in foreign economies and markets; (m) compliance with tax, employment, immigration, and labor laws for employees living or traveling abroad; (n) workforce uncertainty in countries where labor unrest is more common than in the United States; (o) business

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interruptions resulting from geopolitical actions, including war and terrorism, or natural disasters, including earthquakes, typhoons, floods, and fires; (p) the imposition of tariffs on products that we import into international markets that could make such products more expensive compared to those of our competitors; (q) that our ability to expand internationally could be impacted by the intellectual property rights of third parties that conflict with or are superior to ours; and (r) other costs and risks of doing business internationally.

        These and other factors could harm our international operations and, consequently, harm our business, results of operations, and financial condition. Further, we may incur significant operating expenses as a result of our planned international expansion, and it may not be successful. We have limited experience with regulatory environments and market practices internationally, and we may not be able to penetrate or successfully operate in new markets. We may also encounter difficulty expanding into international markets because of limited brand recognition, leading to delayed or limited acceptance of our products by customers in these markets, and increased marketing and customer acquisition costs to establish our brand. Accordingly, if we are unable to successfully expand internationally or manage the complexity of our global operations, we may not achieve the expected benefits of this expansion and our financial condition and results of operations could be harmed.

Our current and future products may experience quality problems from time to time that can result in negative publicity, litigation, product recalls, and warranty claims, which could result in decreased sales and operating margin, and harm to our brand.

        Although we extensively and rigorously test new and enhanced products, there can be no assurance we will be able to detect, prevent, or fix all defects. Defects in materials or components can unexpectedly interfere with the products' intended use and safety and damage our reputation. Failure to detect, prevent, or fix defects could result in a variety of consequences, including a greater number of product returns than expected from customers and our retail partners, litigation, product recalls, and credit claims, among others, which could harm our sales and results of operations. The occurrence of real or perceived quality problems or material defects in our current and future products could expose us to product recalls, warranty, or other claims. In addition, any negative publicity or lawsuits filed against us related to the perceived quality and safety of our products could also harm our brand and decrease demand for our products.

Our business is subject to the risk of earthquakes, fire, power outages, floods, and other catastrophic events, and to interruption by problems such as terrorism, cyberattacks, or failure of key information technology systems.

        Our business is vulnerable to damage or interruption from earthquakes, fires, floods, power losses, telecommunications failures, terrorist attacks, acts of war, human errors, criminal acts, and similar events. For example, a significant natural disaster, such as an earthquake, fire, or flood, could harm our business, results of operations, and financial condition, and our insurance coverage may be insufficient to compensate us for losses that may occur. Our corporate offices, distribution centers, and one of our data center facilities are located in Texas, a state that frequently experiences floods and storms. In addition, the facilities of our suppliers and where our manufacturers produce our products are located in parts of Asia that frequently experience typhoons and earthquakes. Acts of terrorism could also cause disruptions in our or our suppliers', manufacturers', and logistics providers' businesses or the economy as a whole. We may not have sufficient protection or recovery plans in some circumstances, such as natural disasters affecting Texas or other locations where we have operations or store significant inventory. Our servers may also be vulnerable to computer viruses, criminal acts, denial-of-service attacks, ransomware, and similar disruptions from unauthorized tampering with our computer systems, which could lead to interruptions, delays, or loss of critical data. As we rely heavily on our information technology and communications systems and the Internet to conduct our business and provide high-quality customer service, these disruptions could harm our ability to run our business and either directly or indirectly disrupt our suppliers'

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or manufacturers' businesses, which could harm our business, results of operations, and financial condition.

We collect, store, process, and use personal and payment information and other customer data, which subjects us to regulation and other legal obligations related to privacy, information security, and data protection.

        We collect, store, process, and use personal and payment information and other customer data, and we rely on third parties that are not directly under our control to manage certain of these operations. Our customers' personal information may include names, addresses, phone numbers, email addresses, payment card data, and payment account information, as well as other information. Due to the volume and sensitivity of the personal information and data we manage, the security features of our information systems are critical.

        If our security measures, some of which are managed by third parties, are breached or fail, unauthorized persons may be able to access sensitive customer data, including payment card data. If we or our independent service providers or business partners experience a breach of systems compromising our customers' sensitive data, our brand could be harmed, sales of our products could decrease, and we could be exposed to losses, litigation, or regulatory proceedings. Depending on the nature of the information compromised, we may also have obligations to notify users, law enforcement, or payment companies about the incident and may need to provide some form of remedy, such as refunds, for the individuals affected by the incident.

        As we expand internationally, we will be subject to additional privacy rules, many of which, such as the European Union's General Data Protection Regulation, are significantly more stringent than those in the United States. Privacy laws, rules, and regulations are constantly evolving in the United States and abroad and may be inconsistent from one jurisdiction to another. Complying with these evolving obligations is costly, and any failure to comply could give rise to unwanted media attention and other negative publicity, damage our customer and consumer relationships and reputation, and result in lost sales, fines, or lawsuits, and may harm our business and results of operations.

Any material disruption or breach of our information technology systems or those of third-party partners could materially damage our customer and business partner relationships, and subject us to significant reputational, financial, legal, and operational consequences.

        We depend on our information technology systems, as well as those of third parties, to design and develop new products, operate our website, host and manage our services, store data, process transactions, respond to user inquiries, and manage inventory and our supply chain as well as to conduct and manage other activities. Any material disruption or slowdown of our systems or those of third parties that we depend upon, including a disruption or slowdown caused by our failure to successfully manage significant increases in user volume or successfully upgrade our or their systems, system failures, viruses, ransomware, security breaches, or other causes, could cause information, including data related to orders, to be lost or delayed, which could result in delays in the delivery of products to retailers and customers or lost sales, which could reduce demand for our products, harm our brand and reputation, and cause our sales to decline. If changes in technology cause our information systems, or those of third parties that we depend upon, to become obsolete, or if our or their information systems are inadequate to handle our growth, particularly as we increase sales through our DTC channel, we could damage our customer and business partner relationships and our business and results of operations could be harmed.

We depend on cash generated from our operations to support our growth.

        We primarily rely on cash flow generated from our sales to fund our current operations and our growth initiatives. As we expand our business, we will need significant cash from operations to purchase inventory, increase our product development, expand our manufacturer and supplier relationships, pay

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personnel, pay for the increased costs associated with operating as a public company, expand internationally, and to further invest in our sales and marketing efforts. If our business does not generate sufficient cash flow from operations to fund these activities and sufficient funds are not otherwise available from our current or future credit facility, we may need additional equity or debt financing. If such financing is not available to us on satisfactory terms, our ability to operate and expand our business or to respond to competitive pressures would be harmed. Moreover, if we raise additional capital by issuing equity securities or securities convertible into equity securities, your ownership may be diluted. Any indebtedness we incur may subject us to covenants that restrict our operations and will require interest and principal payments that would create additional cash demands and financial risk for us.

Our indebtedness may limit our ability to invest in the ongoing needs of our business and if we are unable to comply with the covenants in our current Credit Facility, our liquidity and results of operations could be harmed.

        On May 19, 2016, we entered into the Credit Facility. As of June 30, 2018, we had $433.9 million outstanding under the Credit Facility and $1.5 million outstanding under our promissory note with Rambler On. Upon completion of this offering, after giving effect to the use of proceeds described in this prospectus, we expect to have total indebtedness of $          . The Credit Facility is jointly and severally guaranteed by our wholly owned subsidiaries, YETI Coolers, LLC, which we refer to as YETI Coolers, and YETI Custom Drinkware LLC, which we refer to as YCD, and any future subsidiaries, together, the Guarantors, that execute a joinder to the guaranty and collateral agreement. The Credit Facility is also secured by a first priority lien on substantially all of our assets and the assets of the Guarantors, in each case subject to certain customary exceptions. We may, from time to time, incur additional indebtedness under the Credit Facility. See "Description of Indebtedness."

        The Credit Facility places certain conditions on us, including that it:

    requires us to utilize a portion of our cash flow from operations to make payments on our indebtedness, reducing the availability of our cash flow to fund working capital, capital expenditures, development activity, return capital to our stockholders, and other general corporate purposes;

    increases our vulnerability to adverse economic or industry conditions;

    limits our flexibility in planning for, or reacting to, changes in our business or markets;

    makes us more vulnerable to increases in interest rates, as borrowings under the Credit Facility bear interest at variable rates;

    limits our ability to obtain additional financing in the future for working capital or other purposes; and

    could place us at a competitive disadvantage compared to our competitors that have less indebtedness.

        The Credit Facility places certain limitations on our ability to incur additional indebtedness. However, subject to the qualifications and exceptions in the Credit Facility, we may incur substantial additional indebtedness under that facility. The Credit Facility also places certain limitations on our ability to enter into certain types of transactions, financing arrangements and investments, to make certain changes to our capital structure, and to guarantee certain indebtedness, among other things. The Credit Facility also places certain restrictions on the payment of dividends and distributions and certain management fees. These restrictions limit or prohibit, among other things, and in each case, subject to certain customary exceptions, our ability to: (a) pay dividends on, redeem or repurchase our stock, or make other distributions; (b) incur or guarantee additional indebtedness; (c) sell stock in our subsidiaries; (d) create or incur liens; (e) make acquisitions or investments; (f) transfer or sell certain assets or merge or consolidate

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with or into other companies; (g) make certain payments or prepayments of indebtedness subordinated to our obligations under the Credit Facility; and (h) enter into certain transactions with our affiliates.

        The Credit Facility requires us to comply with certain covenants, including financial covenants regarding our total net leverage ratio and interest coverage ratio. Fluctuations in these ratios may increase our interest expense. Failure to comply with these covenants, certain other provisions of the Credit Facility, or the occurrence of a change of control, could result in an event of default and an acceleration of our obligations under the Credit Facility or other indebtedness that we may incur in the future.

        If such an event of default and acceleration of our obligations occurs, the lenders under the Credit Facility would have the right to proceed against the collateral we granted to them to secure such indebtedness, which consists of substantially all of our assets. If the debt under the Credit Facility were to be accelerated, we may not have sufficient cash or be able to sell sufficient collateral to repay this debt, which would immediately and materially harm our business, results of operations, and financial condition. The threat of our debt being accelerated in connection with a change of control could make it more difficult for us to attract potential buyers or to consummate a change of control transaction that would otherwise be beneficial to our stockholders.

Our disclosure controls and procedures may not prevent or detect all errors or acts of fraud.

        In connection with this offering, we will become subject to the periodic reporting requirements of the Securities Exchange Act of 1934, or Exchange Act. We are designing our disclosure controls and procedures to provide reasonable assurance that information we must disclose in reports we file or submit under the Exchange Act is accumulated and communicated to management, recorded, processed, summarized, and reported within the time periods specified in the rules and forms of the Securities and Exchange Commission, or the SEC. Disclosure controls and procedures, no matter how well-conceived and operated, can provide reasonable, but not absolute, assurance that the objectives of the control system are met.

        These inherent limitations include the realities that judgments in decision-making can be faulty, and that breakdowns can occur because of simple error or mistake. Additionally, controls can be circumvented by individuals or groups of persons or by an unauthorized override of the controls. Accordingly, because of the inherent limitations in our control system, misstatements in our public reports due to error or fraud may occur and not be detected.

In connection with our preparation of our financial statements, we identified material weaknesses in our internal control over financial reporting. Any failure to maintain effective internal control over financial reporting could harm us.

        Our management is responsible for establishing and maintaining adequate internal control over financial reporting. Internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements in accordance with GAAP. During the preparation of our financial statements for 2017, we identified material weaknesses in our internal control over financial reporting. The material weaknesses related to IT general controls weaknesses in managing access and change in our significant financial systems; and failure to properly detect and analyze issues in the accounting system related to inventory valuation. Under standards established by the PCAOB, a deficiency in internal control over financial reporting exists when the design or operation of a control does not allow management or personnel, in the normal course of performing their assigned functions, to prevent or detect misstatements on a timely basis. The PCAOB defines a material weakness as a deficiency, or combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of annual or interim financial statements will not be prevented, or detected and corrected, on a timely basis. The PCAOB defines a significant deficiency as a deficiency, or a combination of deficiencies, in internal control

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over financial reporting that is less severe than a material weakness, yet important enough to merit attention by those responsible for oversight of a registrant's financial reporting.

        We have implemented measures designed to improve our internal control over financial reporting to address the underlying causes of these material weaknesses, including: completing a significant number of the identified required remediation activities within a comprehensive IT general controls remediation plan for our SAP environment to improve general controls; and initiating weekly inventory reconciliation activities to allow for more timely identification of inventory adjustments and errors. We continue to work on other remediation initiatives, including: documenting and implementing revised delegation of authority and transaction approval policies; addressing remaining remediation activities within our SAP environment and across our other financially significant IT systems; and working closely with our third-party logistics provider on improvements to their inventory tracking activities and reporting processes. See "Management's Discussion and Analysis of Financial Condition and Results of Operations" for more information.

        In accordance with the provisions of the JOBS Act, we and our independent registered public accounting firm were not required to, and did not, perform an evaluation of our internal control over financial reporting as of December 30, 2017, in accordance with the provisions of Section 404 of the Sarbanes-Oxley Act. Accordingly, we cannot assure you that we have identified all, or that we will not in the future have additional, material weaknesses. Material weaknesses may still exist when we report on the effectiveness of our internal control over financial reporting as required under Section 404 of the Sarbanes-Oxley Act after the completion of this offering.

        Additional material weaknesses or significant deficiencies may be identified in the future. If we identify such issues or if we are unable to produce accurate and timely financial statements, our stock price may decline and we may be unable to maintain compliance with the NYSE listing standards.

Our results of operations are subject to seasonal and quarterly variations, which could cause the price of our common stock to decline.

        We believe that our sales include a seasonal component. We expect our net sales to be highest in our second and fourth quarters, with the first quarter generating the lowest sales. To date, however, it has been difficult to accurately analyze this seasonality due to fluctuations in our sales. In addition, due to our more recent, and therefore more limited experience, with bags, storage, and outdoor lifestyle products and accessories, we are continuing to analyze the seasonality of these products. We expect that this seasonality will continue to be a factor in our results of operations and sales.

        Our annual and quarterly results of operations may also fluctuate significantly as a result of a variety of other factors, including, among other things, the timing of the introduction of and advertising for our new products and those of our competitors and changes in our product mix. Variations in weather conditions may also harm our quarterly results of operations. In addition, we may not be able to adjust our spending in a timely manner to compensate for any unexpected shortfall in our sales. As a result of these seasonal and quarterly fluctuations, we believe that comparisons of our results of operations between different quarters within a single fiscal year, or the same quarters of different fiscal years, are not necessarily meaningful and that these comparisons cannot be relied upon as indicators of our future performance. In the event that any seasonal or quarterly fluctuations in our net sales and results of operations result in our failure to meet our forecasts or the forecasts of the research analysts that may cover us in the future, the market price of our common stock could fluctuate or decline.

If our goodwill, other intangible assets, or fixed assets become impaired, we may be required to record a charge to our earnings.

        We may be required to record future impairments of goodwill, other intangible assets, or fixed assets to the extent the fair value of these assets falls below their book value. Our estimates of fair value are

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based on assumptions regarding future cash flows, gross margins, expenses, discount rates applied to these cash flows, and current market estimates of value. Estimates used for future sales growth rates, gross profit performance, and other assumptions used to estimate fair value could cause us to record material non-cash impairment charges, which could harm our results of operations and financial condition.

If our estimates or judgments relating to our critical accounting policies prove to be incorrect or change significantly, our results of operations could be harmed.

        The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. We base our estimates on historical experience and on various other assumptions that we believe to be reasonable under the circumstances, as provided in the section of this prospectus titled "Management's Discussion and Analysis of Financial Condition and Results of Operations" and our consolidated financial statements, and related notes included elsewhere in this prospectus. These estimates form the basis for making judgments about the carrying values of assets, liabilities, and equity and the amount of sales and expenses that are not readily apparent from other sources. Our results of operations may be harmed if our assumptions change or if actual circumstances differ from those in our assumptions, which could cause our results of operations to fall below the expectations of securities analysts and investors, and could result in a decline in our stock price.

We may become involved in legal or regulatory proceedings and audits.

        Our business requires compliance with many laws and regulations, including labor and employment, sales and other taxes, customs, and consumer protection laws and ordinances that regulate retailers generally and/or govern the importation, promotion, and sale of merchandise, and the operation of stores and warehouse facilities. Failure to comply with these laws and regulations could subject us to lawsuits and other proceedings, and could also lead to damage awards, fines, and penalties. We may become involved in a number of legal proceedings and audits, including government and agency investigations, and consumer, employment, tort, and other litigation. The outcome of some of these legal proceedings, audits, and other contingencies could require us to take, or refrain from taking, actions that could harm our operations or require us to pay substantial amounts of money, harming our financial condition and results of operations. Additionally, defending against these lawsuits and proceedings may be necessary, which could result in substantial costs and diversion of management's attention and resources, harming our business, financial condition, and results of operations. Any pending or future legal or regulatory proceedings and audits could harm our business, financial condition, and results of operations.

We may be subject to liability if we infringe upon the intellectual property rights of third parties.

        Third parties may sue us for alleged infringement of their proprietary rights. The party claiming infringement might have greater resources than we do to pursue its claims, and we could be forced to incur substantial costs and devote significant management resources to defend against such litigation, even if the claims are meritless and even if we ultimately prevail. If the party claiming infringement were to prevail, we could be forced to modify or discontinue our products, pay significant damages, or enter into expensive royalty or licensing arrangements with the prevailing party. In addition, any payments we are required to make, and any injunction we are required to comply with as a result of such infringement, could harm our reputation and financial results.

We may acquire or invest in other companies, which could divert our management's attention, result in dilution to our stockholders, and otherwise disrupt our operations and harm our results of operations.

        In the future, we may acquire or invest in businesses, products, or technologies that we believe could complement or expand our business, enhance our capabilities, or otherwise offer growth opportunities. The pursuit of potential acquisitions may divert the attention of management and cause us to incur various

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costs and expenses in identifying, investigating, and pursuing suitable acquisitions, whether or not they are consummated.

        In any future acquisitions, we may not be able to successfully integrate acquired personnel, operations, and technologies, or effectively manage the combined business following the acquisition. We also may not achieve the anticipated benefits from future acquisitions due to a number of factors, including: (a) an inability to integrate or benefit from acquisitions in a profitable manner; (b) unanticipated costs or liabilities associated with the acquisition; (c) the incurrence of acquisition-related costs; (d) the diversion of management's attention from other business concerns; (e) the loss of our or the acquired business' key employees; or (f) the issuance of dilutive equity securities, the incurrence of debt, or the use of cash to fund such acquisitions.

        In addition, a significant portion of the purchase price of companies we acquire may be allocated to acquired goodwill and other intangible assets, which must be assessed for impairment at least annually. In the future, if our acquisitions do not yield expected returns, we may be required to take charges to our results of operations based on this impairment assessment process, which could harm our results of operations.

We may be the target of strategic transactions.

        Other companies may seek to acquire us or enter into other strategic transactions. We will consider, discuss, and negotiate such transactions as we deem appropriate. The consideration of such transactions, even if not consummated, could divert management's attention from other business matters, result in adverse publicity or information leaks, and could increase our expenses.

We are subject to many hazards and operational risks that can disrupt our business, some of which may not be insured or fully covered by insurance.

        Our operations are subject to many hazards and operational risks inherent to our business, including: (a) general business risks; (b) product liability; (c) product recall; and (d) damage to third parties, our infrastructure, or properties caused by fires, floods and other natural disasters, power losses, telecommunications failures, terrorist attacks, human errors, and similar events.

        Our insurance coverage may be inadequate to cover our liabilities related to such hazards or operational risks. In addition, we may not be able to maintain adequate insurance in the future at rates we consider reasonable and commercially justifiable, and insurance may not continue to be available on terms as favorable as our current arrangements. The occurrence of a significant uninsured claim, or a claim in excess of the insurance coverage limits maintained by us could harm our business, results of operations, and financial condition.

Recently enacted tax reform legislation could have an adverse impact on us.

        Recently enacted tax reform legislation has made substantial changes to U.S. tax law, including a reduction in the corporate income tax rate, a limitation on deductibility of interest expense, the allowance of immediate expensing of capital expenditures, and deemed repatriation of foreign earnings. We expect this legislation to have significant effects on us, some of which may be adverse. The magnitude of the impact on future years remains uncertain at this time and is subject to any other regulatory or administrative developments, including any regulations or other guidance promulgated by the U.S. Internal Revenue Service, or the IRS. We continue to work with our tax advisors to determine the full impact that this legislation will have on us.

We are subject to credit risk.

        We are exposed to credit risk primarily on our accounts receivable. We provide credit to our retail partners in the ordinary course of our business and perform ongoing credit evaluations. While we believe that our exposure to concentrations of credit risk with respect to trade receivables is mitigated by our large retail partner base, and we make allowances for doubtful accounts, we nevertheless run the risk of our retail partners not being able to meet their payment obligations, particularly in a future economic downturn. If a material number of our retail partners were not able to meet their payment obligations, our results of operations could be harmed.

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Risks Related to Ownership of Our Common Stock and this Offering

There has been no prior market for our common stock and an active market may not develop or be sustained. Investors may not be able to resell their shares at or above the initial public offering price.

        There has been no public market for our common stock prior to this offering. The initial public offering price for our common stock will be determined through negotiations between the underwriters and us, and the selling stockholders, and may vary substantially from the market price of our common stock following this offering. An active or liquid market in our common stock may not develop upon completion of this offering or, if it does develop, may not be sustained. If you purchase shares of our common stock in this offering, you may not be able to resell those shares at or above the initial public offering price.

Our directors, executive officers, and significant stockholders will continue to have substantial control over us after this offering and could delay or prevent a change in corporate control.

        Upon completion of this offering, Cortec will continue to be our largest stockholder, controlling                % of the total voting power of our common stock (                %, if the underwriters exercise their option to purchase additional shares in full). In addition, pursuant to the Voting Agreement, Cortec will control more than 50% of the total voting power of our common stock with respect to the election of our directors. Furthermore, after this offering, our directors, executive officers, and other holders of more than 5% of our common stock, together with their affiliates, will beneficially own, in the aggregate,        % of our outstanding common stock, on a fully diluted basis. As a result, these stockholders, acting together or in some cases individually, have the ability to control the outcome of matters submitted to our stockholders for approval, including the election of directors and any merger, consolidation, or sale of all or substantially all of our assets. In addition, these stockholders, acting together or in some cases individually, have the ability to control the management and affairs of our company. Accordingly, this concentration of ownership might decrease the market price of our common stock by:

    delaying, deferring, or preventing a change in control of the company;

    impeding a merger, consolidation, takeover, or other business combination involving us; or

    discouraging a potential acquirer from making a tender offer or otherwise attempting to obtain control of the company.

We will be a controlled company within the meaning of the NYSE listing standards and, as a result, will rely on exemptions from certain requirements that provide protection to stockholders of other companies.

        Pursuant to the Voting Agreement, upon completion of this offering, Cortec will control more than 50% of the total voting power of our common stock with respect to the election of our directors and we will be considered a controlled company under the NYSE listing standards. As a controlled company, certain exemptions under the NYSE listing standards will exempt us from the obligation to comply with certain NYSE corporate governance requirements, including the requirements:

    that a majority of our Board of Directors consist of independent directors, as defined under the NYSE listing standards;

    that we have a nominating and governance committee that is composed entirely of independent directors with a written charter addressing the committee's purpose and responsibilities; and

    that we have a compensation committee that is composed entirely of independent directors with a written charter addressing the committee's purpose and responsibilities.

        Upon completion of this offering, our Board of Directors will consist of seven directors, comprised of our CEO, one of our Founders, two outside directors, and three directors selected by Cortec. In addition, Cortec will have the right to have one of its representatives serve as Chairman of our Board of Directors

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and Chair of our nominating and governance committee, as well as the right to select nominees for our Board of Directors, in each case subject to a phase-out period based on Cortec's future share ownership. Accordingly, as long as we are a controlled company, holders of our common stock may not have the same protections afforded to stockholders of companies that must comply with all of the NYSE listing standards.

Our stock price may be volatile or may decline, including due to factors beyond our control, resulting in substantial losses for investors purchasing shares in this offering.

        The market price of our common stock may fluctuate significantly in response to numerous factors, many of which are beyond our control, including:

    actual or anticipated fluctuations in our results of operations;

    the financial projections we may provide to the public, any changes in these projections, or our failure to meet these projections;

    failure of securities analysts to initiate or maintain coverage of our company, changes in financial estimates by any securities analysts who follow our company, or our failure to meet these estimates or the expectations of investors;

    ratings changes by any securities analysts who follow our company;

    sales or potential sales of shares by our stockholders, or the filing of a registration statement for these sales;

    adverse market reaction to any indebtedness we may incur or equity we may issue in the future;

    announcements by us or our competitors of significant innovations, acquisitions, strategic partnerships, joint ventures, or capital commitments;

    publication of adverse research reports about us, our industry, or individual companies within our industry;

    publicity related to problems in our manufacturing or the real or perceived quality of our products, as well as the failure to timely launch new products that gain market acceptance;

    changes in operating performance and stock market valuations of our competitors;

    price and volume fluctuations in the overall stock market, including as a result of trends in the United States or global economy;

    any major change in our Board of Directors or management;

    lawsuits threatened or filed against us or negative results of any lawsuits;

    security breaches or cyberattacks;

    legislation or regulation of our business;

    loss of key personnel;

    new products introduced by us or our competitors;

    the perceived or real impact of events that harm our direct competitors;

    developments with respect to our trademarks, patents, or proprietary rights;

    general market conditions; and

    other events or factors, including those resulting from war, incidents of terrorism, or responses to these events, which could be unrelated to us or outside of our control.

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        In addition, stock markets have experienced price and volume fluctuations that have affected and continue to affect the market prices of equity securities of many companies in our industry, as well as those of newly public companies. In the past, stockholders of other public companies have instituted securities class action litigation following periods of market volatility. If we were to become involved in securities litigation, it could subject us to substantial costs, divert resources and the attention of management from our business, and harm our business, results of operations, financial condition, reputation, and cash flows. As a result, you may be unable to resell your shares of common stock at or above the initial public offering price.

If securities or industry analysts do not publish research or reports about our business, or publish negative reports about our business, our stock price and trading volume could decline.

        The trading market for our common stock will be influenced to some extent by the research and reports that industry or financial analysts publish about us and our business. We do not control these analysts. As a newly public company, we may be slow to attract research coverage and the analysts who publish information about our common stock will have had relatively little experience with us or our industry, which could affect their ability to accurately forecast our results and could make it more likely that we fail to meet their estimates. In the event we obtain securities or industry analyst coverage, if any of the analysts who cover us provide inaccurate or unfavorable research or issue an adverse opinion regarding our stock price, our stock price could decline. If one or more of these analysts cease to regularly cover us or fail to publish reports, we could lose visibility in the market, which in turn could cause our stock price or trading volume to decline.

We may invest or spend the proceeds of this offering in ways with which you may not agree or in ways which may not yield a return.

        We currently intend to use the net proceeds to us from this offering to repay $          of the outstanding borrowings under the Credit Facility and will use the remainder, if any, for general corporate purposes. Our management will have considerable discretion in the application of the net proceeds, and you will not have the opportunity, as part of your investment decision, to assess whether the proceeds will be used appropriately or to influence our decisions regarding the use of proceeds. Because of the number and variability of factors that will determine our use of the net proceeds from this offering, their ultimate use may vary substantially from the intended uses described in this prospectus. The net proceeds may be used for purposes that do not result in an increase in the value of our business, which could cause our stock price to decline.

Substantial future sales, or the perception or anticipation of future sales, of shares of our common stock could cause our stock price to decline.

        Our stock price could decline as a result of substantial sales of our common stock, or the perception or anticipation that such sales could occur, particularly sales by our directors, executive officers, and significant stockholders, a large number of shares of our common stock becoming available for sale, or the perception in the market that holders of a large number of shares intend to sell their shares. After this offering, we will have            shares of our common stock outstanding. This includes the            shares included in this offering, or            shares if the underwriters exercise their option to purchase additional shares from the selling stockholders, which may be resold in the public market immediately unless purchased by our affiliates. The remaining            shares are currently restricted as a result of the 180-day lock-up agreements. Merrill Lynch, Pierce, Fenner & Smith Incorporated, Morgan Stanley & Co. LLC and Jefferies LLC may, in their sole discretion, permit our officers, directors, employees, and current stockholders who are subject to the 180-day contractual lock-up to sell shares prior to the expiration of the lock-up agreements. See "Underwriting."

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        Under a registration rights agreement we will enter into in connection with this offering, Cortec, the Founders and certain other holders of our common stock will have demand registration rights in respect of the shares of common stock they hold, subject to certain conditions. In addition, in the event that we register additional shares of common stock for sale to the public following the completion of this offering, we will be required to give notice of the registration to the parties to the registration rights agreement and, subject to certain limitations, include shares of common stock held by them in the registration. See "Certain Relationships and Related-Party Transactions—Registration Rights Agreement" for a more detailed description of the registration rights agreement. If our existing stockholders register or sell substantial amounts of our common stock, this could harm the market price of our common stock, even if there is no relationship between the registration or sales and the performance of our business. In addition, as restrictions on resale end, the market price of our shares of common stock could drop if the holders of these restricted shares sell them or are perceived by the market as intending to sell them. These factors could also make it more difficult for us to raise additional funds through future offerings of our shares of common stock or other securities.

        We also intend to register shares of common stock that we may issue under our equity compensation plans. Once we register these shares, they will be able to be sold freely in the public market upon issuance, subject to volume limitations applicable to affiliates and the existing lock-up agreements.

Purchasers in this offering will experience immediate and substantial dilution.

        The initial public offering price per share will be substantially higher than the pro forma net tangible book value per share of our common stock outstanding prior to this offering. As a result, investors purchasing common stock in this offering will experience immediate dilution of $          per share. This dilution is due in large part to the fact that our earlier investors paid substantially less than the initial public offering price when they purchased their shares of common stock. In addition, we have issued options to acquire common stock at prices significantly below the initial public offering price. To the extent outstanding options are ultimately exercised, there will be further dilution to investors in this offering. In addition, if we issue additional equity securities, you will experience additional dilution.

The requirements of being a public company may strain our resources, divert management's attention, and affect our ability to attract and retain executive management and qualified board members.

        As a public company, we will be subject to the reporting requirements of the Exchange Act, the Sarbanes-Oxley Act, the Dodd-Frank Act, the NYSE listing standards and other applicable securities laws, rules, and regulations. Compliance with these laws, rules, and regulations will increase our legal and financial compliance costs, make some activities more difficult, time-consuming, or costly, and increase demand on our systems and resources, particularly after we are no longer an "emerging growth company." The Exchange Act requires, among other things, that we file annual, quarterly, and current reports with respect to our business and results of operations. The Sarbanes-Oxley Act requires, among other things, that we maintain effective disclosure controls and procedures and internal control over financial reporting. In order to maintain and, if required, improve our disclosure controls and procedures, and internal control over financial reporting to meet this standard, significant resources and management oversight may be required. As a result, management's attention may be diverted from other business concerns and our costs and expenses will increase, which could harm our business and results of operations. Although we have already hired additional employees to comply with these requirements, we will need to hire more employees in the future or engage outside consultants, which will increase our costs and expenses.

        In addition, changing laws, regulations, and standards relating to corporate governance and public disclosure are creating uncertainty for public companies, increasing legal and financial compliance costs, and making some activities more time consuming. These laws, regulations, and standards are subject to varying interpretations, in many cases due to their lack of specificity and, as a result, their application in practice may evolve over time as new guidance is provided by regulatory and governing bodies. This could

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result in continuing uncertainty regarding compliance matters and higher costs necessitated by ongoing revisions to disclosure and governance practices. We intend to invest resources to comply with evolving laws, regulations, and standards, and this investment may result in increased general and administrative expenses and a diversion of management's time and attention from sales-generating activities to compliance activities. If our efforts to comply with new laws, regulations, and standards differ from the activities intended by regulatory or governing bodies due to ambiguities related to their application and practice, regulatory authorities may initiate legal, administrative, or other proceedings against us and our business may be harmed.

        We will incur additional compensation costs due to current or future increases in our executive officers' cash compensation to be in line with that of executive officers of other companies in our industry, as well as public companies generally, which will increase our general and administrative expense and could harm our profitability. Any future equity awards will also increase our compensation expense. We also expect that being a public company, and compliance with applicable rules and regulations, will make it more expensive for us to obtain director and officer liability insurance, and we may be required to accept reduced coverage or incur substantially higher costs to obtain coverage. These factors could also make it more difficult for us to attract and retain qualified executive officers and members of our Board of Directors, particularly to serve on our audit committee and compensation committee.

        As a result of disclosure of information in this prospectus and in filings required of a public company, our business and financial condition will become more visible, which could be advantageous to, or harm our relationships with, our competitors, suppliers, manufacturers, retail partners, and customers. These disclosures may also make it more likely that we will experience an increase in threatened or actual litigation, including by competitors and other third parties. If such claims are successful, our business and results of operations could be harmed, and even if the claims are resolved in our favor the time and resources necessary to resolve them could divert the resources of our management and harm our business and results of operations.

We are an emerging growth company and the reduced disclosure requirements applicable to emerging growth companies could make our common stock less attractive to investors.

        We are an "emerging growth company" as defined in the JOBS Act. Under the JOBS Act, emerging growth companies can delay adopting new or revised financial accounting standards until such time as those standards apply to private companies. We intend to take advantage of the extended transition period for adopting new or revised financial statements under the JOBS Act as an emerging growth company.

        For as long as we continue to be an emerging growth company, we may also take advantage of other exemptions from certain reporting requirements that are applicable to other public companies, including not being required to comply with the auditor attestation requirements of Section 404(b) of the Sarbanes-Oxley Act, exemption from any rules that may be adopted by the PCAOB requiring mandatory audit firm rotations or a supplement to the auditor's report on financial statements, reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements, exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and any golden parachute arrangements, and reduced financial reporting requirements. Investors may find our common stock less attractive because we will rely on these exemptions, which could result in a less active trading market for our common stock, increased price fluctuation, and a decrease in the trading price of our common stock.

        We will remain an emerging growth company until the earliest of (i) the end of the fiscal year in which the market value of our common stock that is held by non-affiliates is at least $700 million as of the last business day of our most recently completed second fiscal quarter, (ii) the end of the fiscal year in which we have total annual gross revenues of $1.07 billion or more during such fiscal year, (iii) the date on which we issue more than $1 billion in non-convertible debt in a three-year period, or (iv) the end of the fiscal year in which the fifth anniversary of the date of this prospectus occurs.

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Anti-takeover provisions in our charter documents and under Delaware law could make an acquisition of our company more difficult, limit attempts by our stockholders to replace or remove our current management, and limit the market price of our common stock.

        Provisions in our amended and restated certificate of incorporation and amended and restated bylaws, as amended and restated in connection with this offering, may have the effect of delaying or preventing a change in control or changes in our management. Our amended and restated certificate of incorporation and amended and restated bylaws will include provisions that:

    provide that our Board of Directors is classified into three classes of directors;

    prohibit stockholders from taking action by written consent from and after the date that Cortec beneficially owns less than 35% of our outstanding shares of common stock;

    provide that stockholders may remove directors only for cause after the date that Cortec beneficially owns less than 35% of our outstanding common stock and only with the approval of holders of at least 662/3% of our then outstanding common stock;

    provide that the authorized number of directors may be changed only by resolution of the Board of Directors;

    provide that all vacancies, including newly created directorships, may, except as otherwise required by law or as set forth in the stockholders agreement, which we will enter into with Cortec and certain other holders of our common stock in connection with the consummation of this offering (which we refer to as the New Stockholders Agreement), be filled by the affirmative vote of a majority of directors then in office, even if less than a quorum;

    provide that stockholders seeking to present proposals before a meeting of stockholders or to nominate candidates for election as directors at a meeting of stockholders must provide notice in writing in a timely manner, and also specify requirements as to the form and content of a stockholder's notice;

    restrict the forum for certain litigation against us to Delaware;

    do not provide for cumulative voting rights (therefore allowing the holders of a majority of the shares of common stock entitled to vote in any election of directors to elect all of the directors standing for election);

    provide that special meetings of our stockholders may be called only by the Chairman of the Board of Directors, our CEO, or the Board of Directors pursuant to a resolution adopted by a majority of the total number of authorized directors;

    provide that stockholders will be permitted to amend our amended and restated bylaws only upon receiving at least 662/3% of the votes entitled to be cast by holders of all outstanding shares then entitled to vote generally in the election of directors, voting together as a single class; and

    provide that certain provisions of our amended and restated certificate of incorporation may only be amended upon receiving at least 662/3% of the votes entitled to be cast by holders of all outstanding shares then entitled to vote, voting together as a single class.

        These provisions may frustrate or prevent any attempts by our stockholders to replace or remove our current management by making it more difficult for stockholders to replace members of our Board of Directors, which is responsible for appointing the members of our management. In addition, we will opt out of the provisions of Section 203 of the General Corporation Law of the State of Delaware, or DGCL, which generally prohibits a Delaware corporation from engaging in any of a broad range of business combinations with any "interested" stockholder for a period of three years following the date on which the stockholder became an "interested" stockholder. However, our amended and restated certificate of incorporation will provide substantially the same limitations as are set forth in Section 203 but will also

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provide that Cortec and its affiliates and any of their direct or indirect transferees and any group as to which such persons are a party do not constitute "interested stockholders" for purposes of this provision.

Our amended and restated certificate of incorporation provides that the Court of Chancery of the State of Delaware will be the sole and exclusive forum for substantially all disputes between us and our stockholders, which could limit our stockholders' ability to obtain a favorable judicial forum for disputes with us or our directors, officers, or employees.

        Our amended and restated certificate of incorporation, and the amended and restated certificate of incorporation that will become effective prior to the completion of this offering, provide that, unless we consent to the selection of an alternative forum, the Court of Chancery of the State of Delaware is the sole and exclusive forum for: (a) any derivative action or proceeding brought on our behalf; (b) any action asserting a claim of breach of fiduciary duty owed by any of our directors, officers, or other employees to us or to our stockholders; (c) any action asserting a claim arising pursuant to the DGCL; or (d) any action asserting a claim governed by the internal affairs doctrine. The choice of forum provision does not apply to any actions arising under the Securities Act or the Exchange Act. The choice of forum provision may limit a stockholder's ability to bring a claim in a judicial forum that it finds favorable for disputes with us or our directors, officers, or other employees, which may discourage such lawsuits against us and our directors, officers, and other employees. Alternatively, if a court were to find the choice of forum provision contained in our amended and restated certificate of incorporation to be inapplicable or unenforceable in an action, we may incur additional costs associated with resolving such action in other jurisdictions, which could harm our business, results of operations, and financial condition.

We do not intend to pay dividends for the foreseeable future. If our stock price does not appreciate after you purchase our shares, you may lose some or all of your investment.

        Other than the Special Dividend, we have not declared or paid any dividends on our common stock. We currently intend to retain any future earnings and do not expect to pay any dividends in the foreseeable future. Any future determination to declare cash dividends will be made at the discretion of our Board of Directors, subject to applicable laws, and will depend on a number of factors, including our financial condition, results of operations, capital requirements, contractual restrictions, general business conditions, and other factors that our Board of Directors may deem relevant. In addition, the Credit Facility precludes our and our subsidiaries' ability to, among other things, pay dividends or make any other distribution or payment on account of our common stock, subject to certain exceptions. Accordingly, investors must rely on sales of their common stock after price appreciation, which may never occur, as the only way to realize any future gains on their investment.

YETI Holdings, Inc. is a holding company with no operations of its own and, as such, it depends on its subsidiaries for cash to fund its operations and expenses, including future dividend payments, if any.

        As a holding company, our principal source of cash flow will be distributions from our subsidiaries. Therefore, our ability to fund and conduct our business, service our debt, and pay dividends, if any, in the future will depend on the ability of our subsidiaries to generate sufficient cash flow to make upstream cash distributions to us. Our subsidiaries are separate legal entities, and although they are wholly owned and controlled by us, they have no obligation to make any funds available to us, whether in the form of loans, dividends, or otherwise. The ability of our subsidiaries to distribute cash to us will also be subject to, among other things, restrictions that may be contained in our subsidiary agreements (as entered into from time to time), availability of sufficient funds in such subsidiaries and applicable laws and regulatory restrictions. Claims of any creditors of our subsidiaries generally will have priority as to the assets of such subsidiaries over our claims and claims of our creditors and stockholders. To the extent the ability of our subsidiaries to distribute dividends or other payments to us is limited in any way, our ability to fund and conduct our business, service our debt, and pay dividends, if any, could be harmed.

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SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

        This prospectus contains "forward-looking statements" that involve substantial risks and uncertainties. All statements other than statements of historical or current fact included in this prospectus are forward looking statements. Forward-looking statements refer to our current expectations and projections relating to our financial condition, results of operations, plans, objectives, strategies, future performance, and business. You can identify forward-looking statements by the fact that they do not relate strictly to historical or current facts. These statements may include words such as "anticipate," "assume," "believe," "can have," "contemplate," "continue," "could," "design," "due," "estimate," "expect," "forecast," "goal," "intend," "likely," "may," "might," "objective," "plan," "predict," "project," "potential," "seek," "should," "target," "will," "would," and other words and terms of similar meaning in connection with any discussion of the timing or nature of future operational performance or other events. For example, all statements we make relating to our estimated and projected costs, expenditures, and growth rates, our plans and objectives for future operations, growth, or initiatives, or strategies are forward-looking statements. All forward-looking statements are subject to risks and uncertainties that may cause actual results to differ materially from those that we expect and, therefore, you should not unduly rely on such statements. The risks and uncertainties that could cause those actual results to differ materially from those expressed or implied by these forward-looking statements include but are not limited to:

    our ability to maintain and strengthen our brand and generate and maintain ongoing demand for our products;

    our ability to successfully design and develop new products;

    our ability to effectively manage our growth;

    our ability to expand into additional consumer markets, and our success in doing so;

    the success of our international expansion plans;

    our ability to compete effectively in the outdoor and recreation market and protect our brand;

    problems with, or loss of, our third-party contract manufacturers and suppliers, or an inability to obtain raw materials;

    fluctuations in the cost and availability of raw materials, equipment, labor, and transportation and subsequent manufacturing delays or increased costs;

    our ability to accurately forecast demand for our products and our results of operations;

    our relationships with our independent retail partners, who account for a significant portion of our sales;

    the impact of natural disasters and failures of our information technology on our operations and the operations of our manufacturing partners;

    our ability to attract and retain skilled personnel and senior management, and to maintain the continued efforts of our management and key employees;

    the impact of our indebtedness on our ability to invest in the ongoing needs of our business; and

    other risks and uncertainties described in "Risk Factors."

        We make many of our forward-looking statements based on our operating budgets and forecasts, which are based upon detailed assumptions. While we believe that our assumptions are reasonable, we caution that it is very difficult to predict the impact of known factors, and it is impossible for us to anticipate all factors that could affect our actual results.

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        See the "Risk Factors" section and elsewhere in this prospectus for a more complete discussion of the risks and uncertainties mentioned above and for discussion of other risks and uncertainties we face that could cause actual results to differ materially from those expressed or implied by these forward-looking statements. All forward-looking statements attributable to us are expressly qualified in their entirety by these cautionary statements as well as others made in this prospectus and hereafter in our other SEC filings and public communications. You should evaluate all forward-looking statements made by us in the context of these risks and uncertainties.

        We caution you that the risks and uncertainties identified by us may not be all of the factors that are important to you. Furthermore, the forward-looking statements included in this prospectus are made only as of the date hereof. We undertake no obligation to publicly update or revise any forward-looking statement as a result of new information, future events, or otherwise, except as required by law.

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USE OF PROCEEDS

        We estimate that we will receive net proceeds from the sale of shares of our common stock that we are selling in this offering of approximately $             million, after deducting estimated underwriting discounts and commissions and estimated offering expenses payable by us, based upon an assumed initial public offering price of $            per share, which is the midpoint of the price range set forth on the cover page of this prospectus. We currently intend to use the net proceeds from this offering to repay $            of outstanding borrowings under the Credit Facility and will use the remainder, if any, for general corporate purposes. We will not receive any proceeds from the sale of shares of our common stock by the selling stockholders.

        After applying the net proceeds from this offering to repay $            of the outstanding borrowings under the Credit Facility, our management will have broad discretion in the application of the remaining net proceeds from this offering, and investors will be relying on the judgment of our management regarding the application of the proceeds from this offering. Pending the final use of proceeds from this offering as described above, we plan to invest the net proceeds that we receive in this offering in short-term and long-term interest-bearing obligations, including government and investment-grade debt securities and money market funds.

        On May 19, 2016, we entered into the Credit Facility, which bears interest at a variable rate based on prime, federal funds, or LIBOR plus an applicable margin based on our total leverage ratio. As of June 30, 2018, our interest rates on term loan A and term loan B were 6.10% and 7.60%, respectively. As of June 30, 2018, $0, $356.0 million and $77.9 million were outstanding under the revolving credit facility, term loan A and term loan B, respectively. Following the application of the net proceeds of this offering, we expect there to be $                and $                outstanding under term loan A and term loan B, respectively. The term loan A and the revolving credit facility under the Credit Facility mature on May 19, 2021. The term loan B under the Credit Facility matures on May 19, 2022. See "Description of Indebtedness."

        Each $1.00 increase (decrease) in the assumed initial public offering price of $            per share, the midpoint of the price range set forth on the cover page of this prospectus, would increase (decrease) the net proceeds to us by approximately $             million, assuming that the number of shares offered by us, as set forth on the cover page of this prospectus, remains the same, and after deducting underwriting discounts and commissions and estimated offering expenses payable by us. We may also increase or decrease the number of shares we are offering. Each increase (decrease) of 1,000,000 shares in the number of shares offered by us would increase (decrease) the net proceeds to us by approximately $             million, assuming that the assumed initial public offering price remains the same, and after deducting the underwriting discounts and commissions and estimated offering expenses payable by us.

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DIVIDEND POLICY

        We currently intend to retain any future earnings and do not expect to pay any dividends in the foreseeable future. Any future determination to declare cash dividends will be made at the discretion of our Board of Directors, subject to applicable laws, and will depend on a number of factors, including our financial condition, results of operations, capital requirements, contractual restrictions, general business conditions, and other factors that our Board of Directors may deem relevant.

        The Credit Facility prohibits us and our subsidiaries, and any future agreements may prohibit us and our subsidiaries, from, among other things, paying any dividends or making any other distribution or payment on account of our common stock other than certain exceptions. See "Description of Indebtedness."

        In May 2016, we declared the Special Dividend totaling approximately $451.3 million to our stockholders. We paid the Special Dividend as a partial return of capital to our stockholders. Of the Special Dividend, $312.1 million, $0.1 million and $48.9 million was paid to Cortec, our CEO, and our Founder board member, respectively. Other than the Special Dividend, we have not declared or paid any cash dividends on our common stock.

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CAPITALIZATION

        The following table sets forth our cash and capitalization as of June 30, 2018:

    on an actual basis;

    on a pro forma basis to give effect to (a)  our            -for-            split of our common stock effected prior to the completion of this offering, including an            in the authorized shares of our capital stock, and (b) the filing and effectiveness of our amended and restated certificate of incorporation in Delaware, in each case as if such event had occurred on June 30, 2018; and

    on a pro forma as adjusted basis to give effect to the pro forma adjustments set forth above, the sale of shares of common stock that we are selling in this offering at the assumed initial public offering price of $            per share, the midpoint of the range set forth on the cover page of this prospectus, and the application of the net proceeds of this offering after deducting underwriting discounts and commissions and estimated offering expenses payable by us, as described under "Use of Proceeds."

        You should read this information in conjunction with "Use of Proceeds," "Selected Consolidated Financial and Other Data," "Management's Discussion and Analysis of Financial Condition and Results of Operations," and our consolidated financial statements, and related notes included elsewhere in this prospectus.

 
  As of June 30, 2018  
 
  Actual   Pro Forma   Pro Forma
as
Adjusted(1)
 
 
  (in thousands, except per share data)
 

Cash

  $ 71,342   $     $    

Long-term debt (excludes debt issuance costs)

                   

Credit Facility

                   

Revolving credit facility

                 

Term loan A, due 2021

    356,000              

Term loan B, due 2022

    77,900              

Rambler On promissory note

    1,500              

Total long-term debt (excludes debt issuance costs)

  $ 435,400   $     $    

Stockholders' equity:

   
 
   
 
   
 
 

Common stock, $0.01 par value: 400,000 shares, authorized, 204,402 shares issued and outstanding actual;            shares authorized,            shares issued and outstanding, pro forma;            shares authorized,            shares issued and outstanding, pro forma as adjusted

    2,044              

Additional paid-in capital

    223,003              

Accumulated deficit

    (281,834 )            

Accumulated other comprehensive loss

    (14 )            

Total stockholders' deficit

    (56,801 )            

Total capitalization

  $ 378,599   $     $    

(1)
Each $1.00 increase (decrease) in the assumed initial public offering price of $            per share, the midpoint of the price range set forth on the cover page of this prospectus, would increase (decrease) each of cash, additional paid-in capital, total stockholders' deficit, and total capitalization by approximately $            , assuming that the number of shares offered by us, as set forth on the cover page of this prospectus, remains the same, and after deducting underwriting discounts and commissions and estimated offering expenses payable by us. We may also increase or decrease the number of shares we are offering. Each increase (decrease) of 1,000,000 shares in the number of

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    shares offered by us would increase (decrease) each of cash, additional paid-in capital, total stockholders' deficit, and total capitalization by approximately $            , assuming that the assumed initial price to the public remains the same, and after deducting the underwriting discounts and commissions and estimated offering expenses payable by us. The pro forma as adjusted information discussed above is illustrative only and will be adjusted based on the actual initial public offering price and other terms of this offering determined at pricing.

        The pro forma and pro forma as adjusted columns in the table above are based on 204,401,582 shares of our common stock outstanding as of August 31, 2018, and exclude:

    6,740,000 shares of our common stock issuable upon the exercise of options to purchase shares of our common stock outstanding as of August 31, 2018 under the 2012 Plan, with a weighted average exercise price of $0.81 per share;

    3,553,487 shares of our common stock issuable upon the settlement of restricted stock units outstanding as of August 31, 2018 under the 2012 Plan, with an estimated fair value of $12.60 per share;

    5,584,931 shares of our common stock reserved for future issuance under the 2012 Plan which, upon the effectiveness of the 2018 Plan, will no longer be available for awards under the 2012 Plan or the 2018 Plan; and

    12,000,000 shares of our common stock reserved for future issuance under the 2018 Plan.

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DILUTION

        If you invest in our common stock in this offering, your ownership interest will be immediately diluted to the extent of the difference between the offering price per share and the pro forma as adjusted net tangible book value per share after this offering. Historical net tangible book value per share represents the amount of our total tangible assets less total liabilities, divided by the number of shares of common stock outstanding. Dilution in pro forma net tangible book value per share represents the difference between the amount per share paid by purchasers of our common stock in this offering and the pro forma as adjusted net tangible book value per share of common stock immediately after the consummation of this offering.

        Our historical net tangible book value as of June 30, 2018 was $(190.5) million, or $(0.93) per share. Our pro forma net tangible book value as of June 30, 2018 was approximately $             million, or $            per share.

        After giving effect to the (1)             -for-            split of our common stock effected prior to the completion of this offering and (2) sale by us of the             shares of our common stock that we are selling in this offering at an assumed initial public offering price of $            per share, which is the midpoint of the price range set forth on the cover page of this prospectus, less underwriting discounts and commissions and estimated offering expenses payable by us, our pro forma as adjusted net tangible book value as of June 30, 2018 would have been approximately $            , or approximately $            per share. This represents an immediate increase in net tangible book value of $             per share to existing stockholders and an immediate dilution in net tangible book value of $            per share to new investors of common stock in this offering. The following table illustrates this per share dilution:

Assumed initial public offering price per share

      $    

Historical net tangible book value per share as of June 30, 2018

  $        

Pro forma increase in net tangible book value per share attributable to additional borrowing in June 30, 2018 of $      

           

Pro forma net tangible book value per share as of June 30, 2018

           

Increase in pro forma net tangible book value per share attributable to new investors in this offering

           

Pro forma as adjusted net tangible book value per share immediately after this offering

           

Dilution per share to new investors in this offering

      $    

        Each $1.00 increase (decrease) in the assumed initial public offering price of $            per share, the midpoint of the price range set forth on the cover page of this prospectus, would increase (decrease) the pro forma as adjusted net tangible book value by $            per share and the dilution per share to new investors by $            per share, assuming the number of shares offered by us, as set forth on the cover page of this prospectus, remains the same, and after deducting underwriting discounts and commissions and estimated offering expenses.

        The following table sets forth, on a pro forma as adjusted basis, as of June 30, 2018, the differences between the number of shares of common stock purchased from us, the total consideration paid, and the weighted average price per share (1) paid to us by our existing stockholders and (2) to be paid by new investors participating in this offering at an assumed initial public offering price of $            per share, the

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midpoint of the price range set forth on the cover page of this prospectus, before deducting underwriting discounts and commissions and estimated offering expenses payable by us.

 
   
   
  Total
Consideration
   
 
 
  Shares Purchased   Weight
Average
Price
Per Share
 
 
  Number   Percent   Amount   Percent  

Existing stockholders

                  $    

New investors

                       

Total

                  $    

        Each $1.00 increase (decrease) in the assumed initial public offering price of $            per share would increase (decrease) total consideration paid by new investors by $             million, assuming the number of shares we are offering, as set forth on the cover page of this prospectus, remains the same, after deducting underwriting discounts and commissions and estimated offering expenses payable by us. We may also increase or decrease the number of shares we are offering. An increase (decrease) of 1,000,000 in the number of shares offered by us would increase (decrease) total consideration paid by new investors by $             million, assuming that the assumed initial price to the public remains the same, and after deducting the underwriting discounts and commissions and estimated offering expenses payable by us.

        Sales of shares of our common stock by the selling stockholders in this offering will reduce the number of shares of common stock held by existing stockholders to            , or approximately      % of the total shares of common stock outstanding after this offering (or            shares, or approximately      % of the total shares of common stock outstanding after this offering, if the underwriters exercise their option to purchase additional shares in full), and will increase the number of shares held by new investors to            , or approximately      % of the total shares of common stock outstanding after this offering (or            shares, or approximately      % of the total shares of common stock outstanding after this offering, if the underwriters exercise their option to purchase additional shares in full).

        The discussion and tables above are based on 204,401,582 shares of our common stock outstanding as of August 31, 2018, and excludes:

    6,740,000 shares of our common stock issuable upon the exercise of options to purchase shares of our common stock outstanding as of August 31, 2018 under the 2012 Plan, with a weighted average exercise price of $0.81 per share;

    3,553,487 shares of our common stock issuable upon the settlement of restricted stock units outstanding as of August 31, 2018 under the 2012 Plan, with an estimated fair value of $12.60 per share;

    5,584,931 shares of our common stock reserved for future issuance under the 2012 Plan which, upon the effectiveness of the 2018 Plan, will no longer be available for awards under the 2012 Plan or the 2018 Plan; and

    12,000,000 shares of our common stock reserved for future issuance under the 2018 Plan.

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SELECTED CONSOLIDATED FINANCIAL AND OTHER DATA

        The following tables set forth a summary of our historical selected consolidated financial data for the periods and at the dates indicated. Effective January 1, 2017, we converted our fiscal year end from a calendar year ending December 31 to a "52-53 week" year ending on the Saturday closest in proximity to December 31, such that each quarterly period will be 13 weeks in length, except during a 53-week year when the fourth quarter will be 14 weeks. This did not have a material effect on our consolidated financial statements and, therefore, we did not retrospectively adjust our financial statements. Fiscal year 2017 included 52 weeks, and the first six months of fiscal 2018 and fiscal 2017 included 26 weeks. The following table sets forth consolidated financial data for 2017, 2016, and 2015, which have been derived from our audited consolidated financial statements included elsewhere in this prospectus. The consolidated financial data as of and for the six months ended June 30, 2018 and for the six months ended July 1, 2017 have been derived from our unaudited condensed consolidated financial statements included elsewhere in this prospectus. In the opinion of management, our unaudited condensed consolidated financial statements were prepared on the same basis as our audited consolidated financial statements and include all adjustments necessary for a fair presentation of this information. The percentages below indicate the statement of operations data as a percentage of net sales. You should read this data together with our audited financial statements, our unaudited financial statements, and related notes appearing elsewhere in this prospectus and the information included under the caption "Management's Discussion and Analysis of Financial Condition and Results of Operations." Our historical results are not necessarily indicative of our future results.

 
  Six Months Ended   Fiscal Year Ended  
(in thousands, except per share data)
  June 30, 2018   July 1, 2017   December 30, 2017   December 31, 2016   December 31, 2015  

Statements of Operations

                                                             

Net sales

  $ 341,545     100 % $ 254,108     100 % $ 639,239     100 % $ 818,914     100 % $ 468,946     100 %

Cost of goods sold

    183,786     54 %   134,822     53 %   344,638     54 %   404,953     49 %   250,245     53 %

Gross profit

    157,759     46 %   119,286     47 %   294,601     46 %   413,961     51 %   218,701     47 %

Selling, general, and administrative expenses

    121,329     36 %   103,908     41 %   230,634     36 %   325,754     40 %   90,791     19 %

Operating income

    36,430     11 %   15,378     6 %   63,967     10 %   88,207     11 %   127,910     27 %

Interest expense

    (16,719 )   5 %   (15,610 )   6 %   (32,607 )   5 %   (21,680 )   3 %   (6,075 )   1 %

Other (expense) income

    (111 )   0 %   1,150     0 %   699     0 %   (1,242 )   0 %   (6,474 )   1 %

Income before income taxes

    19,600     6 %   918     0 %   32,059     5 %   65,285     8 %   115,361     25 %

Income tax expense

    (4,036 )   1 %   (762 )   0 %   (16,658 )   3 %   (16,497 )   2 %   (41,139 )   9 %

Net income

  $ 15,564     5 % $ 156     0 % $ 15,401     2 % $ 48,788     6 % $ 74,222     16 %

Net income attributable to noncontrolling interest

        0 %       0 %       0 %   (811 )   0 %       0 %

Net income to YETI Holdings, Inc.

    15,564     5 %   156     0 %   15,401     2 %   47,977     6 %   74,222     16 %

Adjusted Operating Income(1)

    46,642     14 %   23,343     9 %   76,003     12 %   221,429     27 %   136,043     29 %

Adjusted Net Income(1)

    23,453     7 %   5,267     2 %   23,126     4 %   134,559     16 %   79,484     17 %

Adjusted EBITDA(1)

  $ 58,416     17 % $ 33,849     13 % $ 97,471     15 % $ 231,862     28 % $ 137,101     29 %

Net income to YETI Holdings, Inc. per share

                                                             

Basic

  $ 0.08         $ 0.00         $ 0.08         $ 0.23         $ 0.37        

Diluted

  $ 0.07         $ 0.00         $ 0.07         $ 0.23         $ 0.37        

Adjusted Net Income per share(1)

                                                             

Diluted

  $ 0.11         $ 0.03         $ 0.11         $ 0.65         $ 0.39        

Weighted average common shares outstanding

                                                             

Basic

    204,744           205,165           205,236           204,274           200,944        

Diluted

    208,959           209,140           208,997           208,449           203,187        

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  As of Fiscal Year End,  
 
  As of
June 30, 2018
 
(dollars in thousands)
  2017   2016  

Balance Sheet and Other Data

                   

Inventory

  $ 149,368   $ 175,098   $ 246,119  

Property and equipment, net

    71,101     73,783     47,090  

Total assets

    510,397     516,427     536,107  

Long-term debt including current maturities

    427,863     475,682     537,238  

Total YETI Holdings, Inc. stockholders' deficit

    (56,801 )   (76,231 )   (97,287 )

Total stockholders' deficit(2)

    (56,801 )   (76,231 )   (95,101 )

Additions to property and equipment

    7,067     42,197     35,588  

(1)
For the definition of Adjusted Operating Income, Adjusted Net Income, Adjusted EBITDA and Adjusted Net Income per share, and a reconciliation of such measures to operating income and net income, as applicable, see "Prospectus Summary—Summary Consolidated Financial and Other Data."

(2)
Total stockholders' deficit includes the impact of noncontrolling interest related to the consolidation of Rambler On as a variable interest entity in 2016.

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MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS

        The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our financial statements and the related notes to those statements included elsewhere in this prospectus. In addition to historical financial information, the following discussion and analysis contains forward-looking statements that involve risks, uncertainties, and assumptions. Our actual results may differ materially from those anticipated in these forward-looking statements as a result of many factors, including those discussed under "Special Note Regarding Forward-Looking Statements" and "Risk Factors" and elsewhere in this prospectus. Some of the numbers included herein have been rounded for the convenience of presentation.

Executive Summary

        We are a rapidly growing designer, marketer, retailer, and distributor of a variety of innovative, branded, premium products to a wide-ranging customer base. Our brand promise is to ensure each YETI product delivers exceptional performance and durability in any environment, whether in the remote wilderness, at the beach, or anywhere else life takes you. By consistently delivering high-performing products, we have built a following of engaged brand loyalists throughout the United States, Canada, Australia, and elsewhere, ranging from serious outdoor enthusiasts to individuals who simply value products of uncompromising quality and design. Our relationship with customers continues to thrive and deepen as a result of our innovative new product introductions, expansion and enhancement of existing product families, and multifaceted branding activities.

        Our marketing strategy has been instrumental in driving sales and building equity in the YETI brand. We have become a trusted and preferred brand to experts and serious enthusiasts in an expanding range of outdoor pursuits. Their brand advocacy, combined with our various marketing efforts, has broadened our appeal to a larger consumer population. We produce original short films and distribute them through our content-rich website, active social media presence, and email subscriber base. We maintain a large and active roster of YETI Ambassadors, a diverse group of men and women throughout the United States and select international markets, comprised of world-class anglers, hunters, rodeo cowboys, barbecue pitmasters, surfers, and outdoor adventurers who embody our brand. We also directly engage with our current and target customers by sponsoring and participating in a variety of events, including sportsman shows, outdoor festivals, rodeos, music and film festivals, barbecue competitions, fishing tournaments, and retailer events. We believe our innovative consumer engagement reinforces the authenticity and aspirational nature of our brand and products across our expanding customer base.

        We bring our products to market through a diverse and powerful omni-channel strategy, comprised of our select group of national and independent retail partners and our DTC channel. Within our wholesale channel, our national retail partners include Dick's Sporting Goods, REI, Academy Sports + Outdoors, Bass Pro Shops, and Ace Hardware. Our network of independent retail partners includes outdoor specialty, hardware, and farm and ranch supply stores. Our DTC channel is comprised of YETI.com, YETIcustomshop.com, YETI Authorized on the Amazon Marketplace, corporate sales, and our flagship store in Austin, Texas. Our DTC channel provides authentic, differentiated brand experiences, customer engagement, and expedited customer feedback, enhancing the product development cycle while providing diverse avenues for growth.

        From 2013 to 2016, yearly net sales were $89.9 million, $147.7 million, $468.9 million, and $818.9 million, respectively, representing a CAGR of 109% for the three-year period. Beginning in late 2016 and throughout 2017, we were affected by a confluence of internal and external factors that adversely impacted our growth and profitability, resulting in a decrease of net sales by 22% to $639.2 million for 2017. Driven by strong customer demand and a shortage of product in 2015, retailers aggressively stocked our products during 2016, which led to excess inventory in our wholesale channel and drove many of our

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retail partners to reduce purchases in the first half of 2017. During this period, we were also impacted by a challenging wholesale marketplace generally, notably the delayed merger of Bass Pro Shops and Cabela's, which slowed ordering, negative trends in the U.S. retail environment, including several retailer bankruptcies, and the repositioning by a major retail partner towards "every day low prices" and private label products at the expense of our premium products. Additionally, we settled several lawsuits that we had initiated against competitors in which we alleged they were infringing on our intellectual property across our range of products. While these settlements were favorable to YETI over the long-term, during the first half of 2017 they resulted in competitors being allowed to liquidate the disputed inventory at low prices.

        In response to these events, we immediately implemented several initiatives and made investments that by year-end 2017 had reduced retailer and company inventory levels to targeted levels, enhanced liquidity, reinvigorated growth, and better positioned YETI for long-term success. These key initiatives included:

    implementing a series of pricing actions, which stimulated demand and re-balanced existing inventory held by our customers, while, at the same time, allowing us to retain our premium positioning in the market;

    introducing new products in existing product families, specifically an expanded line of Hopper soft coolers, new colorways, sizes, and accessories for Rambler drinkware, and limited-edition Hard Cooler and Drinkware products;

    growing our DTC business by increasing our digital marketing investment, re-platforming YETI.com, increasing our presence on the Amazon Marketplace, and further developing our customer and corporate customization business through the acquisition of Rambler On;

    focusing on and diversifying our independent dealer base with retail partners committed to our long-term growth, including culling approximately 1,100 underperforming retailers;

    increasing our engagement with Dick's Sporting Goods, consistent with its market position as the largest sporting goods retailer in the United States;

    rationalizing our manufacturing supplier base, which resulted in greater manufacturing capacity and lower product costs;

    strengthening our team by adding several key executives and increasing our employee count from 269 at the end of 2015 to 507 at the end of 2017, including material investments in our new product development staff; and

    investing in enhanced information systems, including new enterprise resource planning, or ERP, customer relationship management, or CRM, and business improvement systems, which provide us with the technological infrastructure necessary to support our global operations and future growth.

        These initiatives enabled us to successfully expand our customer base, both demographically and geographically, enhance existing product lines, accelerate new product innovation, and improve customer service. Furthermore, despite the challenges during 2017, our brand remained strong and YETI awareness continued to grow. Today, we operate a more balanced omni-channel distribution model, anchored by a stronger and more diversified retailer network and more powerful DTC platform, with a wider range of products. As a result, we believe that we are better positioned to achieve sustainable long-term growth.

Results of Operations

        Components of Our Results of Operations.    Net sales are comprised of wholesale channel sales to our retail partners and sales through our DTC channel. Net sales in both channels reflect the impact of product returns as well as discounts for certain sales programs or promotions.

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        We believe that our net sales include a seasonal component. In our wholesale and DTC channels, we expect our net sales to be highest in our second and fourth quarters, with the first quarter generating the lowest sales. We expect this seasonality will continue to be a factor in our results of operations.

        We discuss the net sales of our products in our two primary categories: Coolers & Equipment and Drinkware. The Coolers & Equipment category includes hard coolers, soft coolers, outdoor equipment products, and various accessories to these core products as well as replacement parts. Likewise, Drinkware accessories are included in the Drinkware category. In addition, the Other category is primarily YETI ICE, YETI logo tee shirts, hats, and other miscellaneous products.

        Gross profit reflects net sales less cost of goods sold, which primarily includes the purchase cost of our products from our third-party contract manufacturers, inbound freight and duties, product quality testing and inspection costs, depreciation on molds and equipment that we own, and our cost of customizing Drinkware products.

        We calculate gross margin as gross profit divided by net sales. Gross margin in our DTC sales channel is generally higher than that on sales in our wholesale channel. We anticipate that our DTC net sales may grow at a faster rate than our net sales in our wholesale channel. If so, we would expect a favorable impact to aggregate gross margin over time. This favorable anticipated gross margin impact may not be realized, or may be offset by other unfavorable gross margin factors. Additionally, any new products that we develop, or our planned expansion into new geographies, may impact our future gross margin.

        SG&A expenses consist primarily of marketing costs, employee compensation and benefits costs, costs of our outsourced warehousing and logistics operations, costs of operating on third-party DTC marketplaces, professional fees and services, cost of non-cash stock-based compensation, cost of product shipment to our customers, and general corporate infrastructure expenses. We anticipate that SG&A will increase in the future based on our plans to increase staff levels, open additional retail stores, expand marketing activities, and bear additional costs as a public company. In particular, we intend to open a company store for employees and additional retail stores in the second half of 2018 or in 2019.

        Change in Fiscal Year and Reporting Calendar.    Effective January 1, 2017, we converted our fiscal year end from a calendar year ending December 31 to a "52-53 week" year ending on the Saturday closest in proximity to December 31, such that each quarterly period will be 13 weeks in length, except during a 53-week year when the fourth quarter will be 14 weeks. This did not have a material effect on our consolidated financial statements and, therefore, we did not retrospectively adjust our financial statements.

Results of Operations

        The following table sets forth selected statement of operations data, and their corresponding percentage of net sales, for the periods indicated. The discussion below should be read in conjunction with

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the following table and our audited financial statements, our unaudited financial statements, and related notes appearing elsewhere in this prospectus:

    Statement of Operations Data

 
  Six Months Ended   Fiscal Year Ended  
(dollars in thousands)
  June 30, 2018   July 1, 2017   December 30, 2017   December 31, 2016   December 31, 2015  

Statement of Operations

                                                             

Net sales

  $ 341,545     100 % $ 254,108     100 % $ 639,239     100 % $ 818,914     100 % $ 468,946     100 %

Cost of goods sold

    183,786     54 %   134,822     53 %   344,638     54 %   404,953     49 %   250,245     53 %

Gross profit

    157,759     46 %   119,286     47 %   294,601     46 %   413,961     51 %   218,701     47 %

Selling, general, and administrative expenses

    121,329     36 %   103,908     41 %   230,634     36 %   325,754     40 %   90,791     19 %

Operating income

    36,430     11 %   15,378     6 %   63,967     10 %   88,207     11 %   127,910     27 %

Interest expense

    (16,719 )   5 %   (15,610 )   6 %   (32,607 )   5 %   (21,680 )   3 %   (6,075 )   1 %

Other (expense) income

    (111 )   0 %   1,150     0 %   699     0 %   (1,242 )   0 %   (6,474 )   1 %

Income before income taxes

    19,600     6 %   918     0 %   32,059     5 %   65,285     8 %   115,361     25 %

Income tax expense

    (4,036 )   1 %   (762 )   0 %   (16,658 )   3 %   (16,497 )   2 %   (41,139 )   9 %

Net income

  $ 15,564     5 % $ 156     0 % $ 15,401     2 % $ 48,788     6 % $ 74,222     16 %

Adjusted Operating Income(1)

    46,642     14 %   23,343     9 %   76,003     12 %   221,429     27 %   136,043     29 %

Adjusted Net Income(1)

    23,453     7 %   5,267     2 %   23,126     4 %   134,559     16 %   79,484     17 %

Adjusted EBITDA(1)

  $ 58,416     17 % $ 33,849     13 % $ 97,471     15 % $ 231,862     28 % $ 137,101     29 %

(1)
For the definitions of Adjusted Operating Income, Adjusted Net Income, Adjusted EBITDA and a reconciliation of such measures to operating income, net income, and net income, respectively, see "Prospectus Summary—Summary Consolidated Financial and Other Data."

Six Months Ended June 30, 2018 Compared to July 1, 2017

    Net Sales

 
  Six Months Ended    
   
 
 
  Change  
 
  June 30,
2018
  July 1,
2017
 
(dollars in millions)
  $   %  

Net sales

  $ 341.5   $ 254.1   $ 87.4     34 %

        Net sales increased $87.4 million, or 34%, to $341.5 million for the six months ended June 30, 2018 compared to $254.1 million for the six months ended July 1, 2017. This increase was driven by growth across both our wholesale and DTC channels. Net sales in our wholesale channel increased $42.1 million, or 22%, to $235.8 million for the six months ended June 30, 2018. The growth in our wholesale channel net sales was primarily driven by increased Drinkware sales. Overall, wholesale channel net sales grew as a result of replenishment orders from our retail partners caused by strong product sell-through, sales of new products, and additional colorways for existing products. Net sales through our DTC channel increased by $45.4 million, or 75%, to $105.8 million for the six months ended June 30, 2018. DTC sales increased across all categories, but most significantly in Drinkware. DTC sales were driven by an increase in customer purchases on our website, YETI.com, and YETI Authorized on the Amazon Marketplace, as well as increased consumer and corporate customized Drinkware and hard cooler sales, primarily from YETIcustomshop.com.

        Net sales in our two primary product categories were as follows:

    Coolers & Equipment net sales increased by $27.0 million, or 21%, to $153.3 million for the six months ended June 30, 2018 compared to $126.3 million for the six months ended July 1, 2017. This change was driven by growth in both the wholesale and DTC channels, but most significantly in our DTC channel. These channels benefitted from a continued increase in hard cooler sales and the expansion of our soft cooler products, as well as the introduction of several storage, transport, and outdoor living products.

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    Drinkware net sales increased by $58.0 million, or 49%, to $176.7 million for the six months ended June 30, 2018 compared to $118.6 million for the six months ended July 1, 2017. This increase was driven by strong growth in both the wholesale and DTC channels. These channels benefitted from the expansion of our Drinkware product line, new Drinkware accessories, and the introduction of new Drinkware colorways.

    Gross Profit

 
  Six Months Ended    
   
 
 
  Change  
 
  June 30,
2018
  July 1,
2017
 
(dollars in millions)
  $   %  

Gross profit

  $ 157.8   $ 119.3   $ 38.5     32 %

Gross margin (Gross profit as a % of net sales)

    46.2 %   46.9 %            

        Gross profit increased $38.5 million, or 32%, to $157.8 million for the six months ended June 30, 2018 compared to $119.3 million for the six months ended July 1, 2017. Gross margin decreased 70 basis points for the six months ended June 30, 2018 to 46.2% from 46.9% for the six months ended July 1, 2017. The decrease in gross margin was primarily driven by:

    price reductions on select hard cooler, soft cooler, and Drinkware products in the second half of 2017 and in 2018 to reposition these products in the market to create pricing space for planned new product introductions, which reduced gross margin by approximately 570 basis points; and

    increased inbound freight expense on incoming Drinkware colorways to meet increased demand, which reduced gross margin by approximately 120 basis points.

        These reductions in gross margin in the six months ended June 30, 2018 were partially offset by the favorable impact of:

    leveraging fixed costs on higher net sales, which favorably impacted gross margin by approximately 320 basis points;

    increased higher margin DTC channel sales, which favorably impacted gross margin by approximately 180 basis points; and

    charges incurred in the prior period for price protection related to our first-generation Hopper, which favorably impacted gross margin by approximately 70 basis points.

    Selling, General, and Administrative Expenses

 
  Six Months Ended    
   
 
 
  Change  
 
  June 30,
2018
  July 1,
2017
 
(dollars in millions)
  $   %  

Selling, general, and administrative expenses

  $ 121.3   $ 103.9   $ 17.4     17 %

SG&A as a % of net sales

    35.5 %   40.9 %            

        SG&A expenses increased by $17.4 million, or 17%, to $121.3 million for the six months ended June 30, 2018 compared to $103.9 million for the six months ended July 1, 2017. As a percentage of net sales, SG&A decreased 540 basis points to 35.5% for the six months ended June 30, 2018. The increase in SG&A was driven mainly by increases in the following: employee wages and benefits of $6.8 million due to increased headcount; Amazon Marketplace fees of $6.0 million; warehousing and logistics and outbound freight expense of $3.6 million; information technology expenses of $2.4 million; depreciation and amortization of $1.2 million; property taxes of $1.2 million; credit card processing fees of $0.9 million; fees associated with sales through a peripheral bulk sales channel of $0.7 million; and non-cash stock-based

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compensation expense of $0.6 million. These SG&A increases were partially offset by a reduction of $6.4 million in marketing expenses.

    Non-Operating Expenses

        Interest expense was $16.7 million for the six months ended June 30, 2018 compared to $15.6 million for the six months ended July 1, 2017. The increase in interest expense was primarily due to an increase in our LIBOR rate related to our Credit Facility. See further discussion of our Credit Facility in "—Liquidity and Capital Resources" below.

        Income tax expense was $4.0 million for the six months ended June 30, 2018 compared to $0.8 million for the six months ended July 1, 2017. The increase in income tax expense was primarily driven by higher pre-tax income for the six months ended June 30, 2018, partially offset by a lower effective tax rate. The effective tax rate for the six months ended June 30, 2018 was 21% compared to 83% for the six months ended July 1, 2017. The decrease in the effective tax rate was partially due to the reduction in the U.S. corporate income tax rate from 35% to 21%, which resulted from the Tax Cuts and Jobs Act, or the Act. In addition, the high effective tax rate for the six months ended July 1, 2017 was due to certain discrete tax expense items recorded against lower pre-tax income and the consolidation of Rambler On as a variable interest entity, or VIE. Rambler On was taxed as a partnership and, as a nontaxable pass-through entity, income tax was not recorded on its income.

2017 Compared to 2016

    Net Sales

 
  Fiscal Year Ended   Change  
(dollars in millions)
  2017   2016   $   %  

Net sales

  $ 639.2   $ 818.9   $ (179.7 )   (22 )%

        Net sales decreased $179.7 million, or 22%, to $639.2 million in 2017, compared to $818.9 million in 2016. This decrease was primarily driven by a decline in net sales in our wholesale channel of $296.1 million, or 40%, which was partially offset by increased net sales in our DTC channel of $116.4 million, or 149%. Wholesale channel net sales declined significantly in both Coolers & Equipment and Drinkware in 2017 primarily as a result of excess levels of inventory of YETI product in our wholesale channel at the end of 2016. This wholesale channel inventory situation was caused by retail partners overbuying in the first half of 2016 in response to rapid 2015 product sell-through and resulting product shortages, a challenging overall U.S. retail environment, and inventory liquidations by certain competitors at low relative prices. DTC net sales increased significantly in both Coolers & Equipment and Drinkware. The increase in DTC net sales was largely attributable to our continued commitment to and significant investments in the DTC channel, which resulted in enhanced customer engagement with YETI.com, increased focus on selling through YETI Authorized on the Amazon Marketplace, and growth in custom Drinkware and hard cooler sales to customers and businesses.

        Net sales in our two primary product categories were as follows:

    Coolers & Equipment net sales decreased by $37.2 million, or 11%, to $312.2 million in 2017, compared to $349.5 million in 2016. The decline was driven by lower hard cooler and soft cooler net sales in the wholesale channel, partially offset by an increase in both hard and soft cooler net sales in the DTC channel. Both channels benefited from expansion of our soft cooler Hopper FlipTM family product offerings, the introduction of premium storage buckets, a second-generation Hopper soft cooler, our Panga submersible duffel bags, and limited edition hard coolers.

    Drinkware net sales decreased by $137.0 million, or 31%, to $310.3 million in 2017 compared to $447.3 million in 2016. The decline was driven by a decrease in the wholesale channel, partially

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      offset by an increase in the DTC channel. Both channels benefited from new product introductions, including Rambler Jugs, the Rambler 14 oz. Mug, and additional Drinkware accessories, as well as the addition of Drinkware colorways.

        During the first half of 2017, we implemented a series of commercial actions aimed at better positioning us for long-term growth. See "—Executive Summary." These initiatives proved highly successful in reducing excess channel inventory and improving retailer sell-through, which fostered net sales growth of 21% during the fourth quarter of 2017 compared to the fourth quarter of 2016.

    Gross Profit

 
  Fiscal Year Ended   Change  
(dollars in millions)
  2017   2016   $   %  

Gross profit

  $ 294.6   $ 414.0   $ (119.4 )   (29 )%

Gross margin (Gross profit as a % of net sales)

    46.1 %   50.6 %            

        Gross profit decreased $119.4 million, or 29%, to $294.6 million in 2017, compared to $414.0 million in 2016. Gross margin decreased 450 basis points to 46.1% from 50.6% in 2016. The decrease in gross margin was primarily driven by:

    adding incremental, value-add features, and related costs to certain of our Drinkware products, which reduced gross margin by approximately 180 basis points;

    the inclusion of YCD's manufacturing costs in our consolidated cost of goods sold, which reduced gross margin by approximately 170 basis points;

    price reductions on several hard cooler, soft cooler, and Drinkware products to reposition these products in the market to create pricing space for planned new product introductions, which reduced gross margin by approximately 160 basis points;

    additional costs related to reworking certain Drinkware finished goods inventories to add color as well as customization, which reduced gross margin by approximately 130 basis points; and

    disposition of certain prior generation, excess end-of-life soft cooler inventories through a peripheral bulk sales channel at a low gross margin, which reduced gross margin by approximately 90 basis points.

        These factors which contributed to the aggregate reduction of consolidated gross margin were partially offset by the favorable impact of:

    reduced air freight on incoming Drinkware product deliveries as a percentage of net sales in 2017 versus 2016, which favorably impacted gross margin by approximately 250 basis points; and

    an increase in the mix of higher margin DTC net sales in 2017 compared to 2016, which favorably impacted gross margin by approximately 80 basis points.

    Selling, General, and Administrative Expenses

 
  Fiscal Year Ended   Change  
(dollars in millions)
  2017   2016   $   %  

Selling, general, and administrative expenses

  $ 230.6   $ 325.8   $ (95.1 )   (29 )%

SG&A as a % of net sales

    36.1 %   39.8 %            

        SG&A decreased $95.1 million, or 29%, to $230.6 million in 2017, compared to $325.8 million in 2016. As a percentage of net sales, SG&A decreased to 36.1% in 2017 from 39.8% in 2016. The decrease in SG&A was primarily driven by a first quarter 2016 non-recurring charge to non-cash stock-based compensation of $104.4 million, resulting from the accelerated vesting of certain outstanding stock options.

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        After adjusting for the non-recurring charge to non-cash stock-based compensation expense, SG&A increased by $9.3 million in 2017. The increase in SG&A was driven primarily by increases in the following: Amazon Marketplace fees of $16.8 million; costs for outsourced warehousing and logistics and outbound freight of $8.1 million; depreciation and amortization of $5.3 million; and information technology expenses of $4.0 million. These SG&A increases were partially offset by a $15.8 million reduction in professional fees, largely related to our 2016 initial public offering preparation, and a $12.7 million reduction in marketing expense.

    Non-Operating Expenses

        Interest expense was $32.6 million in 2017, compared to $21.7 million in 2016. The increase in interest expense was primarily due to additional long-term indebtedness incurred under the Credit Facility in May 2016.

        Other income was $0.7 million in 2017, compared to other expense of $1.2 million in 2016. Other income in 2017 related to settlements received in certain actions to enforce our intellectual property in excess of amounts netted against related intangibles. Other expense in 2016 related to losses on early retirement of debt, primarily from unamortized deferred financing costs on our 2012 Credit Facility, which was outstanding at the time of repayment in May 2016.

        Income tax expense was $16.7 million in 2017 compared to $16.5 million in 2016. The effective tax rate increased to 52% in 2017 from 25% in 2016. We recognized additional income tax expense of $5.7 million in 2017, primarily due to the revaluation of our net deferred tax assets based on the enactment of the Act. In addition, income tax expense was lower than usual in 2016 due to a higher benefit from the research and development credit and the consolidation of Rambler On as a VIE. Rambler On was a partnership, and as a nontaxable pass-through entity, no income tax was recorded on its income.

2016 Compared to 2015

    Net Sales

 
  Fiscal Year Ended   Change  
(dollars in millions)
  2016   2015   $   %  

Net sales

  $ 818.9   $ 468.9   $ 350.0     75 %

        Net sales increased $350.0 million from 2015, or 75%, to $818.9 million in 2016 compared to $468.9 million in 2015. This increase was primarily driven by higher net sales in our wholesale channel of $308.3 million, or 71%. While wholesale channel net sales of both Coolers & Equipment and Drinkware increased significantly, Drinkware net sales grew 98%, which was markedly faster than Coolers & Equipment growth. We believe our net sales in 2016, across both Drinkware and Coolers & Equipment, were impacted due to supply chain-related challenges we experienced in 2015, which caused a number of our retail partners to order product volumes in 2016 in excess of their normal sell-through requirements. During the first half of 2016, as our supply chain partners met this higher demand from our retail partners, wholesale channel inventories built to unusually high levels. This excess inventory resulted in lower net sales volumes to our retail partners in late 2016 and into 2017. Net sales through our DTC channel in 2016 increased by $41.7 million, or 115%, driven by strong growth in both Coolers & Equipment and Drinkware. DTC sales benefited from growing customer engagement with YETI.com, increased inventory allocated to this channel in 2016, and higher sales of customized Drinkware products. In late 2016, we initiated sales through the Amazon Marketplace, which also contributed to DTC net sales growth.

        Net sales in our two primary product categories were as follows:

    Coolers & Equipment net sales increased by $118.6 million, or 51%, to $349.5 million in 2016, compared to $230.8 million in 2015. The increase was driven by both hard cooler and soft cooler

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      products, reflecting continued strong demand and increased levels of inventory available to meet this demand. In addition, we expanded our Coolers & Equipment product line with successful introductions of additional sizes and colors of our Hopper soft cooler product line as well as Hopper Flip soft cooler products.

    Drinkware net sales increased by $225.0 million, or 101%, to $447.3 million in 2016, compared to $222.3 million in 2015. The increase was driven by continued demand for our Drinkware products, successful introduction of Rambler Bottles, increased inventory being available in 2016, and increased sales of customized Drinkware.

    Gross Profit

 
  Fiscal Year Ended   Change  
(dollars in millions)
  2016   2015   $   %  

Gross profit

  $ 414.0   $ 218.7   $ 195.3     89 %

Gross margin (Gross profit as a % of net sales)

    50.6 %   46.6 %            

        Gross profit increased $195.3 million, or 89%, to $414.0 million in 2016, compared to $218.7 million in 2015. Gross margin increased 400 basis points to 50.6% in 2016 from 46.6% in 2015. The increase in gross margin was primarily driven by:

    cost improvements across all product categories, which favorably impacted gross margin by approximately 300 basis points;

    a decrease in air freight expense on incoming Drinkware product deliveries as a percentage of net sales, which favorably impacted gross margin by approximately 180 basis points;

    mix shift to higher margin Drinkware net sales in 2016, which favorably impacted gross margin by approximately 20 basis points; and

    an increase in the mix of higher margin DTC net sales in 2016, which favorably impacted gross margin by approximately 20 basis points.

        These improvements to gross margin were partially offset by:

    credits provided to wholesale channel retail partners related to certain Drinkware price reductions, which reduced gross margin by approximately 70 basis points; and

    the consolidation of Rambler On, which was effective August 1, 2016, which reduced consolidated gross margins approximately 40 basis points due to inclusion of their manufacturing costs in our consolidated cost of goods sold.

    Selling, General and Administrative Expenses

 
  Fiscal Year
Ended
  Change  
(dollars in millions)
  2016   2015   $   %  

Selling, general and administrative expenses

  $ 325.8   $ 90.8   $ 235.0     259 %

SG&A as a % of net sales

    39.8 %   19.4 %            

        SG&A increased $235.0 million, or 259%, to $325.8 million in 2016 compared to $90.8 million in 2015. As a percentage of net sales, SG&A increased to 39.8% in 2016 from 19.4% in 2015. The increase in SG&A was primarily driven by a first quarter 2016 non-recurring charge to non-cash stock-based compensation of $104.4 million, resulting from the accelerated vesting of certain of our outstanding stock options, as described below.

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        In March 2016, our unvested stock options outstanding were modified to convert performance-based options to time-based options and to change the vesting period for time-based options. The modified stock options generally vest over a three-year period from July 31, 2016. The incremental compensation cost associated with the modifications are recognized over the remaining requisite service period. Additionally, the awards for four employees were accelerated in March 2016 so that a portion of their options vested immediately, and consequently the incremental cost associated with these options, which totaled $104.4 million, was expensed upon such vesting.

        In addition to the non-recurring charge to non-cash stock-based compensation expense discussed above, the increase in SG&A was also driven by increases in the following: employee compensation expense of $37.9 million, which included recurring non-cash stock-based compensation expense of $13.4 million; incremental marketing expenses of $37.5 million; costs for outsourced warehousing/logistics and outbound freight of $24.3 million; and professional fees of $16.1 million. Additionally, the consolidation of Rambler On, which was effective August 1, 2016, increased SG&A by $4.7 million, primarily due to related employee compensation.

    Non-Operating Expenses

        Interest expense was $21.7 million in 2016 compared to $6.1 million in 2015. The increase in interest expense was primarily due to additional indebtedness incurred in May 2016 from the Credit Facility, which was used to repay the 2012 Credit Facility and pay dividends to stockholders.

        Other expenses were $1.2 million in 2016, compared to $6.5 million in 2015. Other expenses in 2016 relate to losses on early retirement of debt, primarily from unamortized deferred financing costs on the 2012 Credit Facility outstanding at the time of repayment in May 2016. Other expenses in 2015 related to changes in the fair value of the contingent consideration associated with our acquisition of YETI Coolers in 2012. The contingent consideration was paid in May 2016 using proceeds from the Credit Facility.

        Income tax expense was $16.5 million in 2016, compared to $41.1 million in 2015, due to the $50 million decrease in income before income taxes in 2016 from 2015. The effective tax rate in 2016 decreased to 25% from 36% in 2015. The reduction in the effective tax rate in 2016 was primarily due to increased benefit from the research and development credit and the consolidation of Rambler On as a VIE. Rambler On was a partnership, and as a nontaxable pass-through entity, no income tax was recorded on its income.

Non-GAAP Financial Measures

        See "Prospectus Summary—Summary Consolidated Financial and Other Data" for a description of Adjusted Operating Income, Adjusted Net Income, and Adjusted EBITDA.

        The following tables reconcile operating income to Adjusted Operating Income, net income to Adjusted Net Income, and net income to Adjusted EBITDA for the periods presented.

 
  Six Months Ended   Fiscal Year Ended  
(dollars in thousands)
  June 30,
2018
  July 1,
2017
  December 30,
2017
  December 31,
2016
  December 31,
2015
 

Operating income

  $ 36,430   $ 15,378   $ 63,967   $ 88,207   $ 127,910  

Adjustments:

                               

Non-cash stock-based compensation expense(a)(b)

    7,108     6,508     13,393     118,415     624  

Early extinguishment of debt(c)

                1,221      

Investments in new retail locations and international market expansion(a)(d)

    240                  

Transition to Cortec majority ownership(a)(e)

    750     750     750     750     7,224  

Transition to the ongoing senior management team(a)(f)

    1,344         90     2,824     285  

Transition to a public company(a)(g)

    770     707     (2,197 )   10,012      

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  Six Months Ended   Fiscal Year Ended  
(dollars in thousands)
  June 30,
2018
  July 1,
2017
  December 30,
2017
  December 31,
2016
  December 31,
2015
 

Adjusted Operating Income

  $ 46,642   $ 23,343   $ 76,003   $ 221,429   $ 136,043  

Net income

  $ 15,564   $ 156   $ 15,401   $ 48,788   $ 74,222  

Adjustments:

                               

Non-cash stock-based compensation expense(a)(b)

    7,108     6,508     13,393     118,415     624  

Early extinguishment of debt(c)

                1,221      

Investments in new retail locations and international market expansion(a)(d)

    240                  

Transition to Cortec majority ownership(a)(e)

    750     750     750     750     7,224  

Transition to the ongoing senior management team(a)(f)

    1,344         90     2,824     285  

Transition to a public company(a)(g)

    770     707     (2,197 )   10,012      

Tax impact of adjusting items(h)

    (2,323 )   (2,854 )   (4,311 )   (47,451 )   (2,871 )

Adjusted Net Income

  $ 23,453   $ 5,267   $ 23,126   $ 134,559   $ 79,484  

Net income

  $ 15,564   $ 156   $ 15,401   $ 48,788   $ 74,222  

Adjustments:

                               

Interest expense

    16,719     15,610     32,607     21,680     6,075  

Income tax expense

    4,036     762     16,658     16,497     41,139  

Depreciation and amortization expense(a)

    11,885     9,356     20,769     11,675     7,532  

Non-cash stock-based compensation expense(a)(b)

    7,108     6,508     13,393     118,415     624  

Early extinguishment of debt(c)

                1,221      

Investments in new retail locations and international market expansion(a)(d)

    240                  

Transition to Cortec majority ownership(a)(e)

    750     750     750     750     7,224  

Transition to the ongoing senior management team(a)(f)

    1,344         90     2,824     285  

Transition to a public company(a)(g)

    770     707     (2,197 )   10,012      

Adjusted EBITDA

  $ 58,416   $ 33,849   $ 97,471   $ 231,862   $ 137,101  

Net sales

  $ 341,545   $ 254,108   $ 639,239   $ 818,914   $ 468,946  

Net income as a % of net sales

    10.7 %   6.1 %   10.0 %   10.8 %   27.3 %

Adjusted operating income as a % of net sales

    13.7 %   9.2 %   11.9 %   27.0 %   29.0 %

Adjusted net income as a % of net sales

    6.9 %   2.1 %   3.6 %   16.4 %   16.9 %

Adjusted EBITDA as a % of net sales

    17.1 %   13.3 %   15.2 %   28.3 %   29.2 %

Liquidity and Capital Resources

        Historically, our cash requirements have principally been for working capital purposes. We fund our working capital, primarily inventory, and accounts receivable, from cash flows from operating activities, cash on hand, and borrowings under our revolving credit facility.

        On May 19, 2016, we entered into the Credit Facility and repaid in its entirety the 2012 Credit Facility. At June 30, 2018, we had $71.3 million in cash on hand and no outstanding borrowings under our revolving credit facility. At July 1, 2017, we had $15.3 million in cash on hand and $50.0 million in outstanding borrowings under our revolving credit facility.

        The recent changes in our working capital requirements generally reflect the growth in our business. Although we cannot predict with certainty all of our particular short-term cash uses or the timing or amount of cash requirements, we believe that our available cash on hand, along with amounts available under our Credit Facility will be sufficient to satisfy our liquidity requirements for at least the next twelve months. However, the continued growth of our business, including our expansion into international markets and opening and operating our own retail locations, may significantly increase our expenses and cash requirements. For example, we currently anticipate incurring approximately $4.0 million to $6.0 million in capital expenditures related to our contemplated opening of retail stores in Chicago, Illinois and Charleston, South Carolina in the second half of 2018 or the first half of 2019. In addition, the amount of our future product sales is difficult to predict, and actual sales may not be in line with our forecasts. As a

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result, we may be required to seek additional funds in the future from issuances of equity or debt, obtaining additional credit facilities, or loans from other sources.

    Cash Flows

 
  Six Months Ended   Fiscal Year Ended  
(dollars in thousands)
  June 30,
2018
  July 1,
2017
  December 30,
2017
  December 31,
2016
  December 31,
2015
 

Cash flows provided by (used in):

                               

Operating activities

  $ 83,631   $ 5,491   $ 147,751   $ 28,911   $ 8,625  

Investing activities

    (14,626 )   (18,134 )   (38,722 )   (55,884 )   (10,902 )

Financing activities

    (51,342 )   6,710     (72,237 )   8,011     33,643  

    Operating activities

        Our cash flow from operating activities consists primarily of net income adjusted for certain non-cash items. Adjustments to net income for non-cash items include depreciation and amortization, amortization of deferred loan costs, stock-based compensation, and deferred income taxes. In addition, our operating cash flows include the effect of changes in operating assets and liabilities, principally inventory, accounts receivable, income taxes, prepaid expenses, deposits and other assets, accounts payable, and accrued expenses.

        Net cash provided by operating activities was $83.6 million in the six months ended June 30, 2018, compared to $5.5 million in the six months ended July 1, 2017. The increase in net cash provided by operating activities was due to the following:

    changes in accounts receivable increased operating cash flow by $25.2 million, primarily driven by an increased mix of DTC sales, which have shorter collection terms; and

    changes in inventory increased operating cash flow by $52.4 million, primarily driven by disciplined inventory management coupled with increasing sales beginning in the third quarter of 2017 and continuing through the second quarter of 2018.

        Net cash provided by operating activities was $147.8 million in 2017, compared to net cash provided by operating activities of $28.9 million in 2016. The increase in cash provided by operating activities was due to the following:

    changes in inventory increased operating cash flow by $221.7 million. This increase was driven by increasing hard coolers and Drinkware inventory in 2016 to meet customer demand, versus decreasing inventory levels throughout 2017 as a result of disciplined inventory management, coupled with increasing sales primarily in the third and fourth quarters of 2017; and

    a decrease in net income, after adjusting for non-cash items, of $103.3 million.

        Net cash provided by operating activities was $28.9 million in 2016, compared to net cash provided by operating activities of $8.6 million in 2015. The increase in cash provided by operating activities was due to the following:

    an increase in net income, after adjusting for non-cash items, of $77.1 million; and

    changes in working capital decreased operating cash flow by $56.8 million, due to changes associated with increased customer demand.

    Investing activities

        Cash used in investing activities was $14.6 million and $18.1 million in the six months ended June 30, 2018 and July 1, 2017, respectively. Our investing activities primarily relate to capital expenditures for technology systems infrastructure, facilities, and production molds, as well as tooling and equipment, which

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totaled $7.1 million and $30.5 million during the six months ended June 30, 2018 and July 1, 2017, respectively. Additionally, in the six months ended June 30, 2018, we used cash in investing activities of $7.7 million related to trade dress and trademark assets. In the six months ended July 1, 2017, we received $6.0 million in settlement payments from litigation matters that were credited against the carrying value of the related intangible assets, in accordance with our policy on intangibles. In the six months ended July l, 2017, we acquired Rambler On for $2.0 million (and a subsequent payment of $0.9 million, in October 2017), which increased our cash flows used in investing activities. Additionally, in the six months ended July l, 2017, we had cash inflows from investing activities related to the receipt of notes receivable with Rambler On.

        Cash flows used in investing activities were $38.7 million in 2017, $55.9 million in 2016, and $10.9 million in 2015. Our investing activities primarily relate to spending on capital expenditures for technology systems infrastructure, facilities, and production molds, as well as tooling and equipment, which totaled $42.2 million, $35.6 million, and $8.9 million in 2017, 2016, and 2015, respectively. In 2017, we had cash flows provided by investing activities of $4.9 million in settlements received from litigation that were credited against the carrying value of the related intangible assets, in accordance with our policy on intangibles. In 2017, we acquired Rambler On and paid approximately $2.9 million for the acquisition, which increased our cash flows used in investing activities. In 2016 and 2015, we spent $24.7 million and $2.0 million, respectively, on investments in intangible assets, primarily patents and trademarks. Cash flows from investing activities for 2016 were positively impacted by the cash at Rambler On, which totaled $5.0 million at the time of consolidation.

    Financing activities

        Cash used in financing activities was $51.3 million in the six months ended June 30, 2018 and cash flows provided by financing activities were $6.7 million in the six months ended July 1, 2017. In the six months ended June 30, 2018, we repaid $22.3 million and $25.5 million of our term loan A and term loan B under our Credit Facility, respectively, and $1.5 million of our promissory note with Rambler On. Additionally, in the six months ended June 30, 2018, we purchased 1.0 million shares of our common stock from a stockholder for approximately $2.0 million that were subsequently retired. In the six months ended July 1, 2017, we borrowed $30.0 million from our revolving credit facility and repaid $22.3 million and $0.5 million of our term loan A and term loan B under our Credit Facility, respectively.

        Cash flows used by financing activities were $72.2 million in 2017. Cash flows provided by financing activities were $8.0 million in 2016 and $33.6 million in 2015. Cash flows from financing activities predominately related to borrowings and repayments on long-term debt, including related payments of loan costs, and proceeds from employee stock transactions. In 2017, we had a net repayment of $20.0 million on our revolving credit facility and repaid approximately $47.5 million on the Credit Facility. Additionally, in 2017 we paid $2.8 million in dividends, compared to $453.9 million in 2016. In 2016, we borrowed $550.0 million from the Credit Facility, repaid $61.7 million on the 2012 Credit Facility, and repaid $34.6 million on the Credit Facility. In 2015, we borrowed $35.0 million from the 2012 Credit Facility and paid approximately $2.4 million in principal payments and fees on the 2012 Credit Facility.

Credit Facility

        On May 19, 2016, we entered into the Credit Facility. The Credit Facility provides for (a) a revolving credit facility, (b) a term loan A, and (c) a term loan B. All borrowings under the Credit Facility bear interest at a variable rate based on prime, federal funds, or LIBOR plus an applicable margin based on our total net leverage ratio. As of June 30, 2018, our interest rates on term loan A and term loan B were 6.10% and 7.60%, respectively. Interest is due at the end of each quarter if we have selected to pay interest based on the base rate or at the end of each LIBOR period if we have selected to pay interest based on LIBOR.

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        On July 15, 2017, we amended the Credit Facility to reset the net leverage ratio covenant for the period ending June 2017 through December 2018.

        At June 30, 2018, we had $433.9 million outstanding under the Credit Facility. At December 30, 2017, we had $481.7 million outstanding under the Credit Facility.

    Revolving Credit Facility

        The revolving credit facility, which matures May 19, 2021, allows us to borrow up to $100.0 million, including the ability to issue up to $20.0 million in letters of credit. While our issuance of letters of credit does not increase our borrowings outstanding under our revolving credit facility, it does reduce the amount available. As of December 30, 2017 and June 30, 2018, we had no borrowings outstanding under the revolving credit facility. As of June 30, 2018, we had issued $20.0 million in letters of credit with a 4.0% annual fee to supplement our supply chain finance program.

    Term Loan A

        The term loan A is a $445.0 million term loan facility, maturing on May 19, 2021. Principal payments of $11.1 million are due quarterly with the entire unpaid balance due at maturity. As of June 30, 2018, we had $356.0 million outstanding under term loan A.

    Term Loan B

        The term loan B is a $105.0 million term loan facility, maturing on May 19, 2022. Principal payments of $0.3 million are due quarterly with the entire unpaid balance due at maturity. As of June 30, 2018, we had $77.9 million outstanding under term loan B.

    Other Terms of the Credit Facility

        We may request incremental term loans, incremental equivalent debt, or revolving commitment increases (we refer to each as an Incremental Increase) of amounts of not more than $125.0 million in total plus an additional amount if our total secured net leverage ratio (as defined in the Credit Facility) is equal to or less than 2.50 to 1.00. In the event that any lenders fund any of the Incremental Increases, the terms and provisions of each Incremental Increase, including the interest rate, shall be determined by us and the lenders, but in no event shall the terms and provisions, when taken as a whole and subject to certain exceptions, of the applicable Incremental Increase, be more favorable to any lender providing any portion of such Incremental Increase than the terms and provisions of the loans provided under the revolving credit facility, the term loan A, and the term loan B, as applicable.

        The Credit Facility is (a) jointly and severally guaranteed by the Guarantors and any future subsidiaries that execute a joinder to the guaranty and collateral agreement and (b) secured by a first priority lien on substantially all of our and the Guarantors' assets, subject to certain customary exceptions.

        The Credit Facility requires us to comply with certain financial ratios, including:

    at the end of each fiscal quarter, a total net leverage ratio (as defined in the Credit Facility) for the four quarters then ended of not more than 6.50 to 1.00, 5.50 to 1.00, 4.50 to 1.00, and 4.25 to 1.00, 4.00 to 1.00, and 3.50 to 1.00 for the quarters ended December 30, 2017, March 31, 2018, June 30, 2018, September 30, 2018, December 31, 2018, and March 31, 2019 and thereafter, respectively; and

    at the end of each fiscal quarter, an interest coverage ratio (as defined in the Credit Facility) for the four quarters then ended of not less than 3.00 to 1.00.

        In addition, the Credit Facility contains customary financial and non-financial covenants limiting, among other things, mergers and acquisitions; investments, loans, and advances; affiliate transactions; changes to capital structure and the business; additional indebtedness; additional liens; the payment of

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dividends; and the sale of assets, in each case, subject to certain customary exceptions. The Credit Facility contains customary events of default, including payment defaults, breaches of representations and warranties, covenant defaults, defaults under other material debt, events of bankruptcy and insolvency, failure of any guaranty or security document supporting the Credit Facility to be in full force and effect, and a change of control of our business. We were in compliance with all covenants under the Credit Facility as of June 30, 2018.

        Contractual Obligations.    The following table summarizes our contractual cash obligations as of December 30, 2017:

 
  Payments Due by Period  
(dollars in thousands)
  Total   Less Than
1 Year
  1 - 3 Years   3 - 5 Years   More Than
5 Years
 

Long-term debt principal payment

  $ 481,675   $ 45,550   $ 91,100   $ 345,025   $  

Interest

    88,985     23,766     48,335     16,884      

Operating lease obligations

    55,553     6,724     14,306     10,294     24,229  

Total

  $ 626,213   $ 76,040   $ 153,741   $ 372,203   $ 24,229  

        Off-Balance Sheet Arrangements.    We did not have any off-balance sheet arrangements as of December 30, 2017.

Critical Accounting Policies

        Our discussion and analysis of our financial condition and results of operations are based upon our consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States. In preparing the consolidated financial statements, we make estimates and judgments that affect the reported amounts of assets, liabilities, sales, expenses, and related disclosure of contingent assets and liabilities. We re-evaluate our estimates on an on-going basis. Our estimates are based on historical experience and on various other assumptions that we believe to be reasonable under the circumstances. Because of the uncertainty inherent in these matters, actual results may differ from these estimates and could differ based upon other assumptions or conditions.

        The critical accounting policies that reflect our more significant judgments and estimates used in the preparation of our consolidated financial statements include those noted below. Within the context of these critical accounting policies, we are not currently aware of any reasonably likely events or circumstances that would result in materially different amounts being reported.

        Revenue Recognition.    Revenue is recognized when persuasive evidence of an arrangement exists, and title and risks of ownership have passed to the customer, based on the terms of sale. Goods are usually shipped to customers with FOB shipping point terms; however, our practice has been to bear the responsibility of the delivery to the customer. In the case that product is lost or damaged in transit to the customer, we generally take the responsibility to provide new product. In effect, we apply a synthetic FOB destination policy and therefore recognize revenue when the product is delivered to the customer. For our national accounts, delivery of our products typically occurs at shipping point, as they take delivery at our distribution center.

        Our terms of sale provide limited return rights. We may, and have at times, accepted returns outside our terms of sale at our sole discretion. We may also, at our sole discretion, provide our retail partners with sales discounts and allowances. We record estimated sales returns, discounts, and miscellaneous customer claims as reductions to net sales at the time revenues are recorded. We base our estimates upon historical experience and trends, and upon approval of specific returns or discounts. Actual returns and discounts in any future period are inherently uncertain and thus may differ from our estimates. If actual or expected future returns and discounts were significantly greater or lower than the reserves we had established, we

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would record a reduction or increase to net sales in the period in which we made such determination. A 10% change in our estimated reserve for sales returns, discounts, and miscellaneous claims for 2017 would have impacted net sales by $0.7 million.

        Allowance for Doubtful Accounts.    We make ongoing estimates relating to the ability to collect our accounts receivable and maintain an allowance for estimated losses resulting from the inability of our customers to make required payments. In determining the amount of the allowance, we consider our historical level of credit losses and make judgments about the creditworthiness of our customers based on ongoing credit evaluations and their payment trends. Accounts receivable are uncollateralized customer obligations due under normal trade terms typically requiring payment within 30 to 45 days of sale. Receivables are written off when deemed uncollectible. Recoveries of trade receivables previously written off are recorded to income when received. A 10% change in the estimate for our allowance for doubtful accounts would not result in a material adjustment.

        Inventory.    Inventories are comprised primarily of finished goods and are carried at the lower of cost (weighted average cost method) or market (net realizable value). We make ongoing estimates relating to the net realizable value of inventories based upon our assumptions about future demand and market conditions. If the estimated net realizable value is less than cost, we reflect the lower value of that inventory. This methodology recognizes inventory exposures at the time such losses are identified rather than at the time the inventory is actually sold. Due to customer demand and inventory constraints, we have not historically taken material adjustments to the carrying value of our inventory.

        Physical inventory counts and cycle counts are taken on a regular basis. We provide for estimated inventory shrinkage since the last physical inventory date. Historically, physical inventory shrinkage has not been significant.

        Goodwill and Indefinite-Lived Intangible Assets.    Goodwill and intangible assets are recorded at cost, or at their estimated fair values at the date of acquisition. We review goodwill and indefinite-lived intangible assets for impairment annually or whenever events or changes in circumstances indicate the carrying amount may be impaired. In conducting our annual impairment test, we first review qualitative factors to determine whether it is more likely than not that the fair value of the asset, or reporting units, is less than its carrying amount. If factors indicate that the fair value is less than its carrying amount, we perform a quantitative assessment, analyzing the expected present value of future cash flows to quantify the amount of impairment, if any. We perform our annual impairment tests in the fourth quarter of each fiscal year. We have not historically taken any impairments of our goodwill or indefinite-lived intangible assets, and a 10% reduction in the fair value of our reporting unit would not result in a goodwill impairment.

        Long-Lived Assets.    We review our long-lived assets, which include property and equipment and definite-lived intangible assets, for impairment whenever events or changes in circumstances indicate the carrying amount of such assets may not be recoverable. An impairment loss on our long-lived assets exists when the estimated undiscounted cash flows expected to result from the use of the asset and its eventual disposition are less than its carrying amount. Any impairment loss recognized represents the excess of the long-lived asset's carrying value over the estimated fair value.

        Stock-Based Compensation.    We estimate the fair value of stock options on the date of grant using a Black-Scholes option-pricing valuation model, which requires the input of highly subjective assumptions including expected option term, stock price volatility and the risk-free interest rate. The assumptions used in calculating the fair value of stock-based compensation awards represent management's best estimates, but the estimates involve inherent uncertainties and the application of management judgment. The expected option term assumption reflects the period that we believe the option will remain outstanding. This assumption is based upon the historical and expected behavior of our employees and may vary based upon the behavior of different groups of employees. Expected stock price volatility is estimated using the calculated value method based on the historical closing values of comparable publicly-held entities. The

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