Dixie Group, Inc. · OTC:DXYN
Dixie — Investor Presentation (July 2010)
35 slides from Dixie's investor presentation, Jul 28, 2010
Slide 1: Investor Presentation
Exhibit 99.1 Investor Presentation
Slide 2: Forward-Looking Statements
Forward-Looking Statements XG THE DIXIE 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 include the levels of d
Slide 3: Dixie History
DS . Dixie History THE DIXIE GROUP ¢ Began operations in 1920 ¢ Entered floorcovering in 1993 and exited textiles in 1999 — now 100% floorcovering ¢ Eight floorcovering acquisitions in the ‘90’s ¢ Exclusively focused on upper-end markets ¢ Traditionally we have outperformed the industry and expect t
Slide 4: Dixie Today
Dixie Today SG 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 10 carpet customers — 11% of carpet sales = Top 20 carpet customers — 14% of carpet sales
Slide 5: The Industry: Broadloom Carpet End Use
The Industry OS THE DIXIE GROUP 2006 Broadioom Carpet End Use 2009 Broadioom Carpet End Use Sales $10.19 Billion Sales $7.00 Billion Commercial, 41% 2001-2009 From 32% to 42% Source: CRI
Slide 6: Fixed Investment as % of GDP
E DIXIE GROUP TH Fixed Investment as % of GDP CSDept. of Commerce) The Industry 106007 1OL007 TOs00T TO £007 10 1007 106661 TOL66T TOS66T TO £661 TO 1661 1O686T TOL861 TOSs6T TOE86T TO 1861 TO6L6T TOLL6T TOsi6t TOEL6T TOILET TO696T = = Residential 62 Yr Average Commercial 62 Yr Average TOL96T TOS96T
Slide 7: Value of U.S. Carpet & Rug Mill Shipments
The Industry XG THE DIXIE GROUP Value of U.S. Carpet & Rug Mill Shipments ($ 000's) 16,000,000 14,000,000 A 12,000,000 12-18 month dips in shipments during recessionary times 10,000,000 8,000,000 6,000,000 ear decline in this downturn 4,000,000 ea F GECINS IN TMS COWNEUEE. 2,000,000 1978 1983 | 1988
Slide 8: Broadloom Sales Dollars %
a OG THE DIXIE GROUP Broadloom Sales Dollars % —=Dixie Industry Change vs. Prior Yr Quarter eBueuo 3ue 24d
Slide 9: Broadloom Square Yards %
Broadloom Square Yards % DIXIE GROUP THE Change vs. Prior Yr Quarter > —+Industry @Bueyo quesedg
Slide 10: 2009 U.S. Carpet Manufacturers
2009 U.S. Carpet Manufacturers OS if Dollars in Carpet & Rug Sales Millions % Total Shaw $ 3,025 31.4% Mohawk $ 2,479 25.8% Beaulieu $ 857 8.9% Interface $ 423 4.4% The Dixie Group $ 199 2.1% Others $ 2,642 27.4% Total Industry $ 9,625 100.0%
Slide 11: Dixie Group Carpet Sales
Dixie Group Carpet Sales XG THE DIXIE GROUP From 29% to 38% High-End Commercial, 33%
Slide 12: Residential Positioning of Dixie Brands
Residential Positioning of REF The Dixie Group eee So GROUP ESTIMATED TOTAL WHOLESALE MARKET FOR CARPETS AND RUGS: ‘VOLUME AND PRICE POINTS Egy, Positioning of Dixie Brands by Price Point Segment Tey (Over $20 per SQ YD) Dar, BROADLOOM RESIDENTIAL SALES = $7.0 Billion (2009 $'s) OR SALES DOLLARS 35%
Slide 13: Dixie High-End Residential Sales
Dixie High-End Rx Residential Sales Sa Bigik enous
Slide 14: Dixie High-End Residential Sales by Channel
Dixie High-End RSF Y Residential Sales Ge Bix a CRS Retailer, 55%
Slide 15: Builder, Distributor
Builder, 476 Distributor, 3%
Slide 16: Sales by Segment for 2006 and 2009
Slide 17: Well-styled moderate to upper priced residential broadloom line
SG THE DIXIE GROUP Well-styled moderate to upper priced residential broadloom line Provides Dixie a “full line” to retailers Leverage needed by fiber suppliers for market access Selective distribution strategy attractive to retailers Growth initiatives = Stainmaster ® “value” products = Durasilk (po
Slide 18: Designer / To The Trade
Designer / To The Trade Showrooms, 31% Builders,
Slide 19: Leading high-end brand
Wire CARPETS&RL x ¢ Leading high-end brand with reputation for innovative styling, design and color ¢ High-end retail / designer driven ¢ Hand crafted and imported rugs ¢ Growth initiative = New Stainmaster ® products for more volume orientated price points = Wool products introduced in ‘07
Slide 20: Fabrica Sales by Channel
FABRICA FINE CARPET & RUGS Furniture / Dept Stores, 9% %, Decorators / Design Trade, 50%
Slide 21: Fabrica: Premium high-end brand
FABRICA S| FINE CARPET & RUGS ¢ Premium high-end brand Designer focused Hand crafted and imported rugs Growth initiative = New products, heightened focus on retail penetration = Full service national supplier of wool to the designer trade with excellent service and support
Slide 22: Masland Sales by Channel
Masland Gent r act A 3 Planning, Corporate, 30%
Slide 23: Masland: Premium commercial brand
RF oS THE DIXIE GROUP ¢ Premium brand in the commercial marketplace ¢ Designer focused ¢ Strong national account base = Nordstrom’s, Target, Sears, Olive Garden, Red Lobster, Victoria’s Secret, Applebee’s ¢ Growth initiative = Modular/carpet tile = Updated “Energy Collection”
Slide 24: Dixie Sales Continuing Operations
Dixie Sales Continuing Operations ¢ in mitiions) OG THE DIXIE GROUP $331 $321 $283 $203 16 1 rw | 4 | 305 a LY] 199 2006 2007 2008 2009 =Carpet Sales ™ Yarn Sales
Slide 25: Sales & Operating Income
F Ar Sales & Operating Income RG ($ in millions) THE DIXIE GROUP Net Sales 331.1 3208 2827 203.5 109.5 Non-GAAP Adjusted Operating Income 16.6 16.7 1.5 (8.4) (1.9) Non-GAAP Adjusted EBITDA 23.1 29.7 15.3 5.1 40 ¢ We have cut costs during the downturn to lower our break even point ¢ We have written o
Slide 26: Quarterly Sales & Operating Income
Quarterly ASF Sales & Operating Income OG % ($ in millions) THE DIXIE GROUP Net Sales 47.6 52.6 50.5 52.8 50.5 59.1 Non-GAAP Adjusted Operatingincome (6.1) (0.3) (4.1) (0.7) (21) 0.2 Non-GAAP Adjusted EBITDA (26) 32 22 23 0.9 31 ¢ First quarter is historically our lowest quarter in net sales ¢ We ha
Slide 27: Dixie Cost Structure
Dixie Cost Structure XG THE DIXIE GROUP a ¢ Considering the following assumptions: = Our current mix, noting that we are sensitive to mix = Our current volume and cost structure = Our current pricing (the price increase fully felt in July) ¢ Our cost structure if you do the math implies that: = Our
Slide 28: Dixie Debt Levels
Dixie Debt Levels OG ($ in millions) $77. $68 | $61 $62 § $80 @42008 =@12009 22009 @32009 42009 Q12010 22010 Capital expenditures of $3 ion in 2010 versus depreciation and amortization of $11.7 million
Slide 29: Dixie Capital Structure
Dixie Capital struct re SG THE DIXIE GROUP June 26, 2010 December 27, 2008 Debt 62.0 93.8 Equity 64.9 107.6 Capital 126.9 201.4 Debt to Capital Ratio 48.9% 46.6%
Slide 30: Current Business Conditions
Current Business Conditions WY 20 ¢ The carpet industry is in recovery mode = Our sales up 12.3% Y/Y for the 2nd quarter of 2010 © Residential up 19% Y/Y, Commercial flat Y/Y o Our 2" quarter sales up approximately 17% over 1 quarter = Actions to consolidate facilities and make organizational change
Slide 31: Outlook
Outlook XG THE DIXIE GROUP ¢ Although the industry has experienced a difficult period, we are encouraged by: = Positive market reception to our new products: © Masland and Fabrica Wool Collections o Durasilk (polyester) o Masland Avenue — new technology with a woven look © Modular / Carpet Tile = Ca
Slide 32: Fabrica
1 ABRICA CARPETSS:RUGS
Slide 33: Non-GAAP Information
F Non-GAAP Information SG THE DIXIE GROUP Use of Non-GAAP Finandal Information: The Company believesthat non-GAAP performance measures, which management usesin evaluatingthe Company’ sbusiness, may provide users of the Company's finandal information with additional meaningful basesfor comparingthe C
Slide 34: Non-GAAP Financial Information
Non-GAAP Finanda Information: Adjusted Operatinglncome (Loss) (Sinthousands) 2008 007 2008 2003-210 YTD Operatingincome (loss) 16,58 = 16,724 (28,096) (45,323) (2,227) Plus: Facility consolidation and severance expenses - - 2317 4091 3 Plus: Impaiment of assets : - 4a78 1,459 - Plus: Impairment of g
Slide 35: Non-GAAP Financial Information
Non-GAAP Finandal Information: Adjusted Operatinglncome (Loss) (Sinthousands) Gms «22009 cB2009 2092010 2010 Operatingincome (loss) 39,63) 458) (7) 38 (2,288) 58 Plus: Facility consolidation and severance expenses 1615 Ww 563 1798 mz Plus: Impaiment of assets - - - 1,489 - - Plus: Impairment of good