Dixie Group, Inc. · OTC:DXYN
Dixie — Investor Presentation (February 2013)
37 slides from Dixie's investor presentation, Feb 20, 2013
Slide 1: Investor Presentation February 2013
s Lid February 2013 - Investor 5S Presentation 5S * Contact: Jon Faulkner SFO The Dixie Group Phone: 706-876-5814 jon.faulkner @dixiegroup.com
Slide 2: Forward Looking Statements
Forward Looking Statements The Dixie Group, Inc. THE DIXTE GROUP Statements in this presentation which relate to the future, are subject to risk factors and uncertainties that could cause actual results to differ materially from those indicated in such forward-looking statements. Such factors includ
Slide 3: Dixie History
Dixie History XG THE DIXIE GROUP Began operations in 1920 Transitioned from textiles to floorcovering in 1990’s — now 100% floorcovering Refined focus on upper-end markets in 2004 For over 90 years we have focused on specialized products Traditionally we have outperformed the industry and expect to
Slide 4: Dixie Today
Dixie Today XG THE DIXIE GROUP Commitment to brands in the upper- end market with strong growth potential Diversified between Commercial and Residential markets Diversified customer base — Top I0 carpet customers ° 17% of sales — Top 20 carpet customers * 18% of sales
Slide 5: New and Existing Home Sales
New and Existing Home Sales Seasonally Adjusted Annual Rate THE DIXIE GROUP New 1,000 1g 1,000 ——New Homes ——Existing Homes 50 vJan40 © July Jan'‘11— July Jan"12_— July 5,000 New and Existing in December: = “The number of potential buyers who stayed on the sidelines accumulated during the recession,
Slide 6: Residential Remodeling
Residential Remodeling Harvard Study Leading Indicator of Remodeling Activity THE DIXIE GROUP Millions of dollars $160.0 $140.0 $120.0 2001:08 2002:02 2002:08 2003:02 2003:08 2004:02 2008:08 2005:02 2005:08 2006:02 2006:0% 2007:02 2007:08 2008:02 2008:08 2009:02 Steady recovery in 2009 through 2012
Slide 7: The Industry versus GDP
The Industry versus GDP THE DIXIE GROUP Value of U.S. Carpet & Rug Shipments versus U.S. GDP 118,000,000 16,000 2013 1600000 14000 «We are starting er) to see a rebound 22000 relationship 2,000 1000 | between carpet and rug 10,000,000 shipments and so | GDP +3000,000 = We believe that Samp the 2013
Slide 8: Residential and Commercial Fixed Investment
Residential and Commercial Fixed Investment THE DIXIE GROUP Fixed Investment as % of GDP (Us.0e Rebound in residential activity Rebound in commercial activity Anticipate that 2013 will see stronger growth as the year progresses
Slide 9: Consumer Sentiment
Consumer Sentiment Conference Board THE DIXIE GROUP January 2013: Ce ‘onsumer Ci = “Consumer confidence erasing all of the gains made through 2012. «= The increase in the payroll tax has undoubtedly dampened consumers’ spirits and it may take a while for confidence to rebound and consumers to recove
Slide 10: Consumer Sentiment: Buying Plans
Consumer Sentiment Conference Board THE DIXIE GROUP Conte wiCAeimecG Buying Plans January 2013: = Home improvement and carpet buying plans continue to show positive signs despite the overall consumer sentiments of those who are secure in their financial situation and less reflects sentiment on the b
Slide 11: The Stock Market
The Stock Market THE DIXIE GROUP 1,600 S&P 500 oO} : 1/3/2007 7/3/2007 1/3/2008 7/3/2008 1/3/2009 7/3/2009 1/3/2010 7/3/2010 1/3/2011 7/3/2011 1/3/2012 7/3/2012 1/3/201: January 2013 «The stock market has rebounded to pre-recession levels = 2013 is positive but is still subject to macro events: Euro
Slide 12: The Industry as compared to The Dixie Group
The Industry as compared to The Dixie Group THE DIxtE GRouP Value of U.S. Carpet & Rug Mill Shipments ($000's) 20,000 00 350,000 12,000,000 Sales of The Dixie Group from 2003 through 2012 _— tso00m00 Dine Is gaining market share as the economy rebounds — = 2011 adjusted for 53 wee 14,000,000 250,000
Slide 13: 2011 U.S. Carpet Manufacturers
2011 U.S. Carpet Manufacturers THE DIXIE GROUP Carpet Leaders Shaw (Berkshire Hathaway) Mohawk (MHK) Beaulieu (Private) Interface (TILE) Dixie (DXYN) Other Market Dollars in Millions % Total $ 2,966 38.8% Residential & Commercial $ 1,884 24.6% Residential & Commercial $ 726 9.5% Residential & Commer
Slide 14: Dixie versus the Industry
Dixie versus the Industry SF) Sales $7.51 Billion High-End Commercial 26% Commercial 43% Source: Floor Focus - Broadloom & Carpet Tile
Slide 15: Carpet Dollar Sales
Carpet Dollar Sales Indexed to 2008 THE DIXIE GR ouP 1 2012
Slide 16: Carpet Unit Sales
Carpet Unit Sales XG Indexed to 2008 THE DIXIE GROUP @12008 = 3.2008 = a2009 a3 2009 ai 2010 © a32010 ©2011. «© a32011. «= @i2012,—— a3. 2012 16
Slide 17: Residential Positioning
Residential Positioning The Dixie Group THE DIXIE GROUP SQUARE YARDS OR SALES DOLLARS TOTAL MARK! ESTIMATED TOTAL WHOLESALE MARKET FOR CARPETS AND RUG! VOLUME AND PRICE POINTS jing of Dixie Brands by Price Point Segment (Over $20 per SQ YD) tsp, 4 ep Darg BROADLOOM RESIDENTIAL SALES = $7.0 Billion (
Slide 18: Dixie Group High-End Residential Sales
Dixie Group High-End Residential Sales XG All Brands THE DIXIE GROUP Masland, 43%
Slide 19: Dixie Group High-End Residential Sales by Channel
Dixie Group High-End Residential Sales QXTG All Brands THE DIXIE GROUP Builder, 3%. National y Retailers, 2% —<— VA, Merchant, 12% £ Designer, 19%
Slide 20: Sales by Channel
Builder, 2%. Distributor, 1% Mass Merchant, 31%
Slide 21: Well-styled moderate to upper priced residential broadloom line
NS THE DIXIE GROUP Well-styled moderate to upper priced residential broadloom line Dixie provides a “full line” to retailers Known for differentiated pattern and color selection Selective distribution strategy attractive to retailers Growth initiatives — Stainmaster® Tru Soft ™ Fiber Technology — St
Slide 22: Sales by Channel
CARPETS&-RUCS an #8 TEES Um les by Channel for Commercial, 5% Other, Builder, 4%. -_ Retailers, 1% Retailer, 61%
Slide 23: Carpets & Rugs high-end brand
nk CARPETS&RUGS THE DIXTE GROUP Leading high-end brand with reputation for innovative styling, design and color High-end retail / designer driven Hand crafted and imported rugs Growth initiative — Stainmaster® TruSoft™ Fiber Technology — Wool products * Complete line of broadloom and rugs to the ind
Slide 24: Fine Carpet & Rugs sales by channel
CG \ THE DIXIE GROUP FINE CARPET & RUGS Specialty - OEM, 5%. Builder, 2%__ National y Retailers, 6%, Retailer, 48:
Slide 25: Fine Carpet & Rugs premium high-end brand
CA o¢ FINE CARPET & RUGS THE DIXIE GROUP Premium high-end brand — Superior quality in all aspects Designer focused Hand crafted and imported rugs Growth initiatives — Stainmaster® TruSoft™ Fiber Technology — Fabrica Permaset dyeing process allows unlimited color selection in select wool products — E
Slide 26: Commercial sales by market segment
Health Others 576 Gov't, 2%. Care, 5% Store Planning, 14% Corporate, 43% Education, 3%
Slide 27: Premium brand in the commercial marketplace
THE DIXIE GROUP Premium brand in the commercial marketplace Designer focused Strong national account base — Nordstrom’s, Target, Delta Air Lines, AECOM, Club Corporation of America Growth initiative — Modular/carpet tile — End User Channel
Slide 28: Dixie Group Sales
Dixie Group Sales $ in millions THE DIXIE GROUP $331 $321 $283 $203 $231 $270 $266 2006 = 2007 2008 2009 2010 2011 2012 ™ Carpet Sales '™ Processing Sales
Slide 29: Sales & Operating Income
Sales & Operating Income $ in millions Net Sales Net Income (Loss) Non-GAAP Adjusted Op. Income (Loss) Non-GAAP Adjusted EBITDA Net Sales 66.0 Net Income (Loss) 0.6 Non-GAAP Adjusted Op. Income (Loss) 17 Non-GAAP Adjusted EBITDA 4, Note: Qi 2011 Introduction of our wool “permaset” dyeing process for
Slide 30: Current Business Conditions
: ca ~ Current Business Conditions SG THE DIXIE GROUP First quarter 2013 activity: - Residential sales up double digits New displays, Stainmaster® TruSoft™ products and expanded sales force in place as we focus on gaining retailer space - Commercial sales up double digits - Sales force re-alignment
Slide 31: Outlook
Outlook SS 2013 Business Plan THE DIXIE GROUP Though the market has been difficult, we are encouraged by: ¢ The residential housing market began gaining momentum in mid 2012 from which we normally would see activity 12 months later Positive market reception to our new products: - Masland and Fabrica
Slide 32: Fabrica Carpets Rugs
FABRICA | CARPETS. RUCS
Slide 33: Non-GAAP Information
Non-GAAP Information THE DIxtE GROUP Use of Non-GAAP Financial Information: pany Juating th c ’s business, may provid ft pany ith additional meaningful Toe wariniivas ih i i ive to riod. However, the non-GAAP \ddition to, not ternative for, i in the United States. factors performance results under b
Slide 34: Non-GAAP Information
Non-GAAP Information THE DIXIE GROUP ($ in thousands) Q42011 Q42012 Chge 2011 2012 Y/Y Chge Weeks in Period 13 13 53 52 Net Sales as Reported 65,349 71,134 «8.9% 270,110 266,372 -1.4% Adjustment for Weeks : : : (4,711) 1.8: Non-GAAP Net Sales as Adjusted (Note 1) $65,349 $71,134 8.9% $265,399 $266,3
Slide 35: Note a: Restated
Note a: Restated ($ in thousands) isi income (loss) mpament of sacs rent of goo sMainactirng menignment & Colormaster (Sin thousands) Net income (loss) as reported Less: 2007(a) 2008(a) 2009(a) 2010 16,707 (28,460) (45,389) (2,570) 2,317 4,091. 1,556 - 4,478 1,459 - - 23,121 31,406 - 2011 5,668 (563
Slide 36: Quarterly Non-GAAP reconciliation
(Sin thousands) Q12011 Q22011 Q32011 Q42011 Qi2012 Q22012 Q32012 Q42012 Operating income (loss) 1,668 2,300 1,178 520 620 (40) 820 415 ii i : (563) Plus: Impairment of assets - - - & Impairment of goodwill Plus: : : : : 14g 399 307 Non-GAAP Adj. Operating Income (Loss) (Note2) $ 1,668 $ 1,738 $ 1,17
Slide 37: Non-GAAP Information
Non-GAAP Information THE DIXIE GROUP Note a: Restated ($ in thousands) 2007(a) 2008(a) 2009(a) 2010 2011 2012 Non-GAAP Adjusted corr (from above) 16,801 (28,134) (45,208) (2,853) 5,426 2,093 Times: 1 - Tax Rate 10,921 (18,287) (29,385) (1,854) 3,527 1,360 Plus: Depreciation ama Amortization 12,941 1