Dixie Group, Inc. · OTC:DXYN
Dixie — Investor Presentation (January 2011)
37 slides from Dixie's investor presentation, Jan 6, 2011
Slide 1: Investor Presentation
Exhibit 99.1 Investor Presentation BE GROUP
Slide 2: Forward-Looking Statements
Forward-Looking Statements OS 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
Dixie History OSG F 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
Slide 4: Dixie Today
Gam Dixie Today OSG , 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— 14% of carpet sales = Top 20 carpet customers— 17% of carpet sales
Slide 5: New and Existing Home Sales
New and Existing Home Sales Seasonally Adjusted Rate New 1,000 4,000 Existing 1.000 900 ——New Homes Existing Homes 800 700 600 500 400 300 200 100 Jan July Jan July Jan July Jan July 2007 2008 2009 2010 7,000 6,500 6,000 5,500 5,000 4,500 4,000 3,500 SS THE DIXIE GROUP October 2010: = Badnews..... =
Slide 6: Residential Remodeling
Residential Remodeling RF Owner-Occupied Improvements* OG 6 THE DIXIE GROUP Millions of dollars $160,000 $140,000 $120,000 $100,000 $80,000 Expenditures increased to a rate of $109 billion in October. That was sei 10.7% below one year ago. $40,000 D> oP 6 6 SN PMP PL LS HO DPF oF Fh SF BW wh PIP EI
Slide 7: The Industry
The Industry XG THE DIXIE GROUP Mfg Value US Carpet and Rug Mill Shipments ($ 000's) 16,000,000 14,000,000 12,000,000 gore, 12 to 18months dips during recessionary times 10,000,000 \ — 6,000,000 \ Multi-year decline 400,000 2,000,000 1963 1966 1969 1972 1975 1978 1981 1984 1987 1990 1993 1996 1999 2
Slide 8: The Industry versus GDP
The Industry versus GDP SS THE DIXIE GROUP Value of U.S. Carpet and Rug Mill Shipments. ‘versus Gross Domestic Product 2010: asamp 290 = Estimated datafor - | 2010 samp 1. «Weare startingto 2zpmo0 zm | seeareboundin the relationship anpmm0 = sm betweencarpet and rug shipments iii wa and GDP = We bel
Slide 9: The Industry versus Fixed Investment
os The Industry versus AGS Fixed Investment WR Dikik ORO WS Fixed Investment as % of GDP (USDept. of Commerce) 6.5% 6.0% 55% 50% 45% 40% 3.5% 30% 2.5% 20% Residential Fixed Investm ent % of GDP — = Residential62 Yr Average ——Com ercial Structures Fixed Investm ent as% of GDP — = Commercial62 Vr Aver
Slide 10: Consumer Sentiment
Consumer Sentiment University of Michigan i> OG ; THE DIXIE GROUP 1966=100 100 95 90 85 80 75 70 65 60 55 50 45 2007 2008 2009 2010 Source: University of Michigan Consumer Sentiment Survey. December 10: = The first reading for Decemberlooks pretty good. Novemberwas revised upward. = Confidenceis hea
Slide 11: The Stock Market
The Stock Market BS AW @ THE DIXIE GROUP S&P 500 = December 10: a: = The stock market continues to rally. = = The marketis om no being driven by rising asset prices. = =Fornow, high unemployment and = ‘ the prospects of sinking house Cs prices are not holding back the oie stock marketrally. Jan Apr
Slide 12: 2009 U.S. Carpet Manufacturers
2009 U.S. Carpet Manufacturers OS e 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 13: The Industry
The Industry G THE DIXIE GROUP Sales $10.19 Billion Sales $7.02 Billion 13 Commercial: 41% 2001-2009 From 32% to 42% Source: CRI,* estimated for 2010
Slide 14: Dixie Group Carpet Sales
Dixie Group Carpet Sales SG THE DIXIE GROUP 14 From 29% to 38% High-End ‘Commercial 30% High-end Residential 70%
Slide 15: Broadloom Sales Dollars % Change
Broadloom Sales Dollars % 15 DIXIE GROUP : TH —indetry Mie oBuByo yUedeld Change vs. Prior Yr Quarter
Slide 16: Broadloom Square Yards % Change
16 a OG THE DIXIE GROUP PER RESR ESE RE REE SE eBuny weoedd Broadloom Square Yards % Change vs. Prior Yr Quarter
Slide 17: Residential Positioning of Dixie Brands
Residential Positioning of REF Y The Dixie Group een ne eee ESTIMATED TOTAL WHOLESALE MARKET FOR CARPETSAND RUGS VOLUME AND PRICE POINTS &s Positioning of Dixie Brands by Price Point Segment TIM, Try (Over $20 per SQ YD) Dany BROADLOOMRESIDENTIAL SALES 7.0 Billion (2009 $’s) 35% Market Share TOTAL M
Slide 18: Dixie High End Residential Sales
Dixie High End OG ; Residential Sales oe Bikis SReup ” ‘Year ‘Year Masland), 43%
Slide 19: Dixie Group High-End Residential Sales
Dixie Group High-End REF Residential Sales (all brands) 5.4. sicip crovur © ° Retailer, 577
Slide 20: Dixie Home Sales by Segment for 2010
Slide 21: Dixie Home
OSG THE DIXIE GROUP al Well-styled moderate to upper priced residential broadloom line Dixie provides 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 (
Slide 22: The Dixie Group
GROUP
Slide 23: Leading high-end brand
AS AY 3 THE DIXIE 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 = New Stainmaster ® value products = Wool products o First introductions in 2007 o Now offering complete line to
Slide 24: Fabrica Sales
FABRICA INE CARPET & RUGS Designer, 40% Retailer, 38%
Slide 25: Fabrica Fine Carpet & Rugs
FABRICA SG. FINE CARPET & RUGS THE DIXIE GROUP * Premium high-end brand * Designer focused * Hand crafted and imported rugs * Growth initiative = New products, heightened focus on retail penetration = Fullservice supplier of wool to the designer trade with excellent service and support
Slide 26: Masland
nA Masland XS a 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 = “Energy Collection”
Slide 27: Dixie Sales Continuing Operations
Dixie Sales Continuing AS . NI Operations (in mitiions) oR BIRIE GRO BS $331 $321 $283 $203 $232 16 11 6 4 305 272 199 oz 4 0 T T - { 2006 2007 2008 2009 2010 Est. ™CarpetSales & Yarn Sales
Slide 28: Quarterly Sales & Operating Income
Quarterly RE Fi nz Sales & Operating Income IN) 5 ($ in millions) THE DIXIE GROUP Net Sales 47.6 52.6 50.5 528 505 59.1 56.7 Non-GAAP Adjusted Operating Income (6.1) {0.3} (1.1) {0.7} (2.1) 02 {1.6} Non-GAAP Adjusted EBITDA {2.6} 3.2 22 23 o9 31 13 ¢ Anticipate positive operating results in Q4 of 20
Slide 29: Dixie Debt Levels
Dixie Debt Levels G ($ in millions) a $ 4.2008 Q1 2009 Q2.2009 Q3.2009 G4 2009 G1 2010 G2 2010 G3 2010 Q4 2010 * We have reduced debt $29 million since the beginning of 2008 * 2010 Capital expenditures of $2 million vs. D&A of $11.6 million + Availability was $11.7 million at the end of 2010
Slide 30: Dixie Capital Structure
Dixie Capital Structure ($ in millions) Debt Equity Capital Debt to Capital Ratio Re AY ei THE DIXIE GROUP December 27, September 25, 2010 93.8 67.5 107.6 62.9 201.4 130.4 46.6% 51.8% Goal is to lower debt to capital ratio over the next few years
Slide 31: Current Business Conditions
Current Business Conditions SG Sales = a For the 4™ quarter of 2010 vs. prior year: Commercial sales up 26% with tile sales up 98% Residential sales up nearly 22% with Dixie Home up 55% Dixie Group sales up 24% will all brands showing growth We feel the industry will show marginal improvement for th
Slide 32: Current Business Conditions
Current Business Conditions DG The carpet industry is in recovery mode ; 33 * Though we see a slow recovery in the housing sector ... * We are less dependent than the industry upon new construction ... we are driven by resale and remodel of existing homes and commercial facilities Actions to consoli
Slide 33: Outlook
Outlook QS ae A i Opportunities in the future THE DIXIE GROUP Though the market has been difficult, we are encouraged by: * Continued signs of recovery in the commercial sector * Despite slow recovery in the residential sector, we have seen improvement of higher end goods in the luxury market * Posi
Slide 34: a\A Jo bax
a\A Jo bax sland HOMER | Y
Slide 35: Non-GAAP Information
F Non-GAAP Information SG THE DIXIE GROUP Use of Non-GAAP Financial Information: The Company believes that non-GAAP performance measures, which management uses in evaluating the Company's business, may provide users of the Company's finandal information with additional meaningful bases for comparing
Slide 36: Adjusted Operating Income (Loss)
Adjusted Operating Income (Loss) {$im thousands} 2006 207 2008 2003 2010 YTD: Operating income (less) 16558 16,724 «= (28,395) (45,323) (4,165) Plus: Facility consolidation and severance expenses = * 237 4,051 o37 Phas: impairment of assets - - 478 1,459 - Plus: impairment of goodwill - - 23,171 ‘31
Slide 37: Non-GAAP Financial Information
Non-GAAP Financial information: Adjusted Operating Income (Loss) {Sinthousands) 12009 @22009 Q32009 Q42009 QIZN0 a2zm0 aszmD 38 ‘Operating income {loss} (39.163) 58) 4.711} (3,992) (2,286) so (1,937) Plus: Facility consolidation and severance expenses 1.615 a7 sos 1,796 mm m2 208 hus: impairment of