Dixie Group, Inc. · OTC:DXYN
Dixie — Investor Presentation (March 2011)
37 slides from Dixie's investor presentation, Mar 9, 2011
Slide 1: The Dixie Group
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 RF Seasonally Adjusted Rate OG THE DIXIE GROUP New 1,000 Existing 1.000 January2011: 4 = Goodnews... =Newhome sales stayed flat = Existing home sales increased to 5.36 million. = Home sales are so weak and inventories are so high that downward price pressure continues. =
Slide 6: Residential Remodeling
Residential Remodeling RF Owner-Occupied Improvements* OG THE DIXIE GROUP Millions of dollars $160,000 $140,000 $120,000 $100,000 $20,000 Expenditures increased to arate of $124 billion in January. That was 8.7% below $60,000 AY ‘one year ago. $40,000 PPPPEPPPPPPPLESL LS eee FS FSF oF eo * Census di
Slide 7: The Industry
The Industry XG THE DIXIE GROUP Mfg Value US Carpet and Rug Mill Shipments ($ 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 . | «Weare startingto sapmgon x | a.m see areboundin the relationship betweencarpet Zameen v=" | andrug shipments and GDP nam = + anmm =We believe that the iii wa lo
Slide 9: The Industry versus Fixed Investment
GROUP (©) > Dixi18 THE The Industry versus Fixed Investment Fixed Investment as % of GDP (USDept ofCommere} Toot To soce To aoce Tozoce To pote To s0ce Tovoce Toeoce rox oce ToT OCR To oot To seer To eee Toles To pest To seer Tovest Toeest roves TOTES Toes To geet Toone Tozest To sect To seer Tovest
Slide 10: Consumer Sentiment
Consumer Sentiment AS University of Michigan nay “caw 0 1966=100 100 February 11: 95 ry so = The spring is heading up 85 = Confidenceis headed inthe right 20 direction. cD = Consumers are perceiving the 70 economyis improving & =Fornow. high unemployment and the prospects of sinking house = prices w
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
13 The Industry A roadioom Carpe Sales $10.19 Billion Sales $7.02 Billion roadioom Carpe Commercial: 43% 2001-2010 Fron 32% to 43% Source: CRI
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
> SG Dixi18 Broadloom Sales Dollars % 15 GROUP THE _ tatty oBuByo yUedeld Change vs. Prior Yr Quarter
Slide 16: Broadloom Square Yards % Change
16 a OG THE DIXIE GROUP PER REE ER ERE RE EE eBuny weDedd 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: Sales by Channel for 2010
AE QE THE DIXIE GROUP SAS by Channelfor2010 Distributor, Builder, 2%. 2% Mass Merchant,
Slide 21: Residential broadloom brand
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: GROUP
GROUP
Slide 23: Leading high-end brand with innovative styling
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 Fine Carpet & Rugs
FABRICA Ss INE CARPET & RUGS Designer, 407
Slide 25: Fabrica
FABRICA FINE CARPET & RUGS 25 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: Specified
Specified Design, 41% Hospitlality, 23% International, 8x
Slide 27: 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 28: Dixie Sales Continuing Operations
Dixie Sales Continuing AS . NI Operations (in mitiions) oR BIRIE GRO BS $331 $321 $283 $203 $231 16 11 6 4 305 272 199 225 4 0 T T - { 2006 2007 2008 2009 2010 ™CarpetSales & Yarn Sales
Slide 29: Sales & Operating Income
Sales & Operating Income SG ($ in millions) 29 THE DIXIE GROUP 035 2313 Net Sales 331: 282.7 Non-GAAP Adjusted Operating Income 165 16.7 15 (8.4) (1.0) Non-GAAP Adjusted EBITDA 280 29.6 152 51 10.6 We have sales momentum coming out of the 4" quarter We improved Adj. Operating Income by $7.4 million
Slide 30: Dixie Debt Levels
Dixie Debt Levels G ($ 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 + Availability was $11.7 million at the end of 2010
Slide 31: Current Business Conditions
Current Business Conditions SG Sales Pr : For the 4" quarter of 2010 versus prior year: * Commercial sales up 22% vs. the industry at 9% * Residential sales up nearly 22% vs. the industry down 4% * Dixie Group sales up 23% with all brands showing growth For the year of 2010 versus 2009: * Commercial
Slide 32: Current Business Conditions
Current Business Conditions DG The carpet industry is in recovery mode ; a * 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 consolid
Slide 33: Outlook
Outlook RG Opportunities in the future a 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 ¢ Positive
Slide 34: a\A Jo bax
a\A Jo bax sland HOMER | Y
Slide 35: Non-GAAP Information
F Non-GAAP Information OS . THE DIXIE GROUP Use of Non-GAAP Finandal Information: ‘The Company believes that non-GAAP performance measures, which management usesin evaluating the Company's business, may provide users of the Company's financial information with additional meaningful bases for compari
Slide 36: Non-GAAP Financial Information
Non-GAAP Financial Information: Adjusted Operating income (Loss) {Sinthousands) 12009 G22009 32009 Q4200{a) Q12M0 QQIM0 A320 aAzMO Operating income {loss} 29,163) (8) (4.711) NSB} (2.286) so (37) 1508 Plus: Fadiity consolidation and severance expenses 1,615 Ei sos 1,796 mm m 308 m8 hus: impairment o
Slide 37: Non-GAAP Financial Information
Non-GAAP Financial Information: Adjusted Operating Income (Loss) {Sinthousands) 2006{a) 2007{a)-2008{a)-2009fa) 20 (Operating income {loss} IGS = 16,707 (28,460) 45,389} (2.570) Plus: Facility consolidation and severance expenses - - 2317 apna 1556 Phas: impairment of assets - - aa 1 - hus: lnpairme