Dixie Group, Inc. · OTC:DXYN
Dixie — Investor Presentation (May 2013)
35 slides from Dixie's investor presentation, May 1, 2013
Slide 1: Investor Presentation May 2013
RE NS) May 2013 Investor Presentation Contact: Jon Faulkner CFO 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 * 16% of sales — Top 20 carpet customers * 19% of sales
Slide 5: New and Existing Home Sales
New and Existing Home Sales Seasonally Adjusted Annual Rate THE DIXIE GROUP New 1,000 550 450 400 wo f\ | “h | 300 HHH++ eee July Jan'11 ‘uly Van’ 12 July New and Existing in December: = "Buyer traffic is 25 percent above a year ago when we were already seeing notable gains in shopping activity. In
Slide 6: Residential Remodeling
Residential Remodeling Harvard Study Leading Indicator of Remodeling Activity ""® PIX'® GROUP Millions of dollars Steady recovery in 2009 through 2012 with TTM rate of change ilar pattern for 2013 predicted simi $160.0 25.0% Projected 2013 activity yy $100.0 a! 15.0% 51200 100% $100.0 sno ‘ta, seo s
Slide 7: The Industry versus GDP
The Industry versus GDP THE DIXIE GROUP Value of U.S. Carpet & Rug Shipments versus U.S. GDP 1800000 16,000 2013 16,090,000 143000 «We are seeing a 14,000,000 — rebound in the relationship 112,000,000 between carpet 1000 | and ru 110,000,000 shipments and me GDP 8,000,000 = We believe that ry the 20
Slide 8: Residential and Commercial
Residential and Commercial Fixed Investment THE DIXIE GROUP Fixed Investment as % of GDP (Us.0 Rebound in residential activity Rebound in commercial activity Anticipate that 2013 will see stronger growth as the year progresses
Slide 9: Consumer Sentiment
Consumer Sentiment Conference Board THE DIXIE GROUP ‘onsumer Ct SPs oS sey a oe FIP M MSN MI Ps SPY SSS SS a March 2013: = “Consumer Confidence fell sharply in March, following February’s uptick.” =“The loss of confidence, particularly expectations, mirrors the losses experienced recent sequester ha
Slide 10: The Stock Market
The Stock Market THE DIXIE GROUP S&P 500 April 2013 1.900 = The stock market has rebounded 1,600 + to pre-recession levels 1m = 2013 is positive but is still 1,200 subject to macro events: 1,000 Europe, = US Fiscal 800 Issues, cco =China 400 ° 1/3/2007 7/3/2007 1/3/2008 7/3/2008 1/3/2009 7/3/2009 1/
Slide 11: The Industry as compared to The Dixie Group
The Industry as compared to The Dixie Group THE DIX Value of U.S. Carpet & Rug Mill Shipments {$.000's) 20,000,000 18,000,000 Sales of The Dixie Group from 2003 through Q1 2013 — Since 2009, Dixie is up 39% and the industry up 6.8% sae Note: 2011 adjusted for 53 weeks 14,000,000 Single year dips in
Slide 12: 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 13: Dixie versus the Industry
Dixie versus the Industry SF) Sales $1.8 Billion Commercial 25% Commercial 42% Source: Floor Focus - Broadloom & Carpet Tile
Slide 14: Carpet Dollar Sales
Carpet Dollar Sales XG Indexed to 2008 THE DIXIE GROUP (012008 032008 ©2009 a3.2009 © i200 «© aazm10 «azo as2011. a= as202 at 2013
Slide 15: Carpet Unit Sales
Carpet Unit Sales Indexed to 2008 THE DIXIE GROUP 40 : 012008 03200812009 32009 Q12010 © Q32010 Qi 2011. S201 QL2012_——«Q32012_— a1 2013. oie Tinton Tonto ns 15
Slide 16: 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 17: Dixie Group High-End Residential Sales
XS THE DIXIE GROUP Dixie Group High-End Residential Sales All Brands 1% s 5 ae ot =
Slide 18: Dixie Group High-End Residential Sales
Dixie Group High-End Residential Sales All Brands THE Commercial, Other, 0.8% Distributor, 2% 0.2% Builder, 3%. National Retailers, 1%. Designer, 18% Specialty -
Slide 19: Sales channel mix
Builder, 2%. Mass Merchant, 33% Distributor, 1%
Slide 20: 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 21: Carpets & Rugs sales channels
CARPETS&RUGS mye pusewous annel for Commercial, 4% Builder, 4%. Retailers, 1%, Retailer, 62%
Slide 22: Carpets & Rugs 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 23: Fine Carpet & Rugs sales channels
CA THE DIXIE GROUP FINE CARPET & RUGS Specialty - OEM, 5%. Builder, 3%__ nal Retailers, 5%_< Retailer, 49%
Slide 24: Fine Carpet & Rugs brand
CA FINE CARPET & RUGS NS 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 25: Sales by Channel for FFM Q1 2013
AE NS) THE DIXIE GROUP Sales by Channel for FFM Q1 2013 Other, 6% , Health a Gov't, 1% Care, 5% Store Planning, 14 Education, 2%
Slide 26: Premium brand in the commercial marketplace
NS 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 — SPEAK modular carpet tile & FIT office remodel collections — End User Channel growth initiative
Slide 27: Dixie Group Sales
Dixie Group Sales $ in millions THE DIXIE GROUP $331 $321 $283 $203 $231 $270 $266 $302 2006 = 2007 2008 2009 2010 2011 2012 = 2013 ™ Carpet Sales
Slide 28: Sales & Operating Income
Sales & Operating Income $ in millions THE DIxTE GROUP Net Sales 320.8 282.7 203.5 231.3 270.1 266.4 Net Income (Loss) 6.2 (31.5) (42.2) (4.7) 1.0 (0.9) Non-GAAP Adjusted Op. Income (Loss) 16.7 1.5 (8.4) (1.0) 5.1 3.2 Non-GAAP Adjusted EBITDA 29.6 15.2 5.1 10.6 14.8 12.6 Net Sales 62.9 66.6 65.8 71.
Slide 29: Current Business Conditions
Current Business Conditions SS THE DIXIE GROUP Second quarter 2013 activity: - Residential order entry up double digits - New displays, Stainmaster® TruSoft™ products and expanded sales force in place as we focus on gaining retailer space - Commercial order entry up double digits Sales force re-alig
Slide 30: Outlook for 2013
Outlook for 2013 SS THE DIXIE GROUP The housing & commercial markets have strengthened: ¢ The residential housing market is gaining momentum from which we expect to continue to benefit during the year Positive market reception to our new products: - Masland and Fabrica Wool Collections continued gro
Slide 31: Fabrica
FABRICA | CARPETS. RUCS
Slide 32: Non-GAAP Information
Non-GAAP Information THE DIXIE SROUP Use of Non-GAAP Financial Information: pany P , which in evaluating the results in a prior period, as these measures reflect id relati However, the non-GAAP performance measures should be viewed in addition to, not as an alternative for, the Company's reported re
Slide 33: Quarterly non-GAAP reconciliation
($ in thousands) Q12012 Q22012 Q32012 Q42012 Q12013 Operating income (loss) 620 (40) 820 415 1,677 5: Facility - ‘ . : Plus: Impairment of assets = _ z . Plus: Impairment of goodwill : * . . a Plus: & 148 399 307 530 794 Non-GAAP Adj. Operating Income (Loss) (Note 2) $ 768 $ 359 $1,127 $ 945 $ 2,471
Slide 34: Annual non-GAAP reconciliation (restated)
Note a: Restated ($ in thousands) 2007(a) 2008(a) 2009 (a) 2010 2011 2012 2013 YTD Operating income (loss) 16,707 (28,460) (45,389) (2,570) 5,668 «= 1,815 1,677 = 2,317 4,091 1,556 (563) = = Plus: Impairment of assets : 4478 1,459 : - - - Plus : Impairment of goodwill : 23,121 31,406 : : - - & 794 :
Slide 35: Non-GAAP Information
Non-GAAP Information THE DIXIE GR ouP (Sin thousands) Q12012 Q22012 Q32012 Q42012 Q12013 Non-GAAP Adjusted EBIT (from above) 617 551,009 412 1,669 Times: 1 - Tax Rate = EBIAT 401 36 656 268 © 1,085 Plus: Depreciation and Amortization 2,402 2,379 2,355 2,259 2,513 Plus: Non Cash Impairment of Assets