Dixie Group, Inc. · OTC:DXYN
Dixie — Investor Presentation (July 2013)
35 slides from Dixie's investor presentation, Jul 31, 2013
Slide 1: Investor Presentation July 2013
[ Exhibit 99.1 July 2013 Investor Presentation Contact: ion Ikner CFO The Dixie Group
Slide 2: Cautionary Statements Regarding Forward-Looking Statements and Sources of Information
Cautionary Statements Regarding Forward-Looking Statements and Sources of Information The Dixie Group, Inc. THE DIXIE GROUP + Certain of the statements included in this presentation constitute forward-looking statements. Rabie looking statements are made based on management's current expectations an
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 XS 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 * 20% of sales
Slide 5: New and Existing Home Sales
New and Existing Home Sales Seasonally Adjusted Annual Rate THE DIXIE GROUP New 1,000 Existing 1,000 600 5,500 New and existing home sales: = Americans snapped up new homes in June at the fastest 550 5,000 pace in five years, 5» sign the i housing recovery is 500 N strengthening. | ral PA J The Asso
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 $10.0 200% 15.0% 51200 100% $100.0 520.0 & a 8 a
Slide 7: The Industry versus GDP
The Industry versus GDP THE DIXIE GROUP Value of U.S. Carpet & Rug Shipments versus U.S. GDP 2013 =We are seeing a rebound in the relationship between carpet and ru shipments and GDP = We believe that to see housing outpace GDP growth as it formation 1963 1965 1967 1969 1971 1973 1975 1977 1979 1981
Slide 8: Residential and Commercial Fixed Investment
Residential and Commercial Fixed Investment THE DIXIE GROUP Fixed Investment as % of GDP Rebound in us (Us.0ept. of commerce) residential activity Rebound in commercial activity Year to date 2013 shows stronger growth; Expect this growth to continue as the year progresses 8
Slide 9: Consumer Sentiment
Consumer Sentiment Conference Board THE DIXIE GROUP d Consumer Confide SHS o KE My Pr ot eat o opetigt eight heath VP SESS PPPS SP SP PPS oes PRP ae es ond July 2013: “Consumer spending iS consumer confidence gains some strength. Job growth has bolstered confidence and wage growth has begun a modest
Slide 10: The Stock Market
The Stock Market THE NS DIXIE GROUP ‘S&P 500 EE EEE EEE EEE ES July 2013 = The stock market has rebounded to pre-recession levels = 2013 is positive but still subject to macro events: = Europe, = US Fiscal Issues, =China, = Middle East
Slide 11: The Industry as compared to The Dixie Group
The Industry as vat £ if Gc oO compared to The Dixie Group NE DIXIE GRouP Value of U.S. Carpet & Rug Mill Shipments ($000's) 20,000,000 250,000 18,00,000 Carpet Sas of The Dixie Group from 2003 through Q2 2013 > Sia sai Since 2008, Dixie is up 489% and the industry up 9% 000,000 12: 2011 adjusted fo
Slide 12: 2012 U.S. Carpet Manufacturers
2012 U.S. Carpet Manufacturers Carpet Leaders Shaw (Berkshire Hathaway) Mohawk (MHK) Beaulieu (Private) Interface (TILE) Engineered Floors (Private) Dixie (DXYN) Other Market Dollars in Millions % Total $ 2,996 38.7% Residential & Commercial $ 1,869 24.2% Residential & Commercial $ 625 8.1% Resident
Slide 13: Dixie versus the Industry
Dixie versus the Industry SF) Sales $7.7 Billion Commercial 43% Source: Floor Focus - Broadloom & Carpet Tile
Slide 14: Carpet Dollar Sales
Carpet Dollar Sales XG Indexed to 2009 THE DIXIE GROUP 1.80 160 140 120 10 | om 060 040 — : aime e370 atmo cama RDO ite 0
Slide 15: Carpet Unit Sales
Carpet Unit Sales Indexed to 2009 THE DIXIE GROUP 12009 032009 ai2010 © 32010» azo. ©3201-2012, 32012, a 2013 — Piste Market
Slide 16: Industry Positioning
Industry Positioning The Dixie Group NS THE DIXIE GROUP * Strategically our residential and commercial businesses are driven by our relationship to the upper end consumer and the design community | * This leads us to: — Have a sales force that is attuned to design and customer solutions — Bea “produ
Slide 17: Residential Market Positioning
Residential Market Positioning The Dixie Group THE DIXIE GROUP ESTIMATED TOTAL WHOLESALE MARKET CARPETS AND RUG: VOLUME AND PRICE POINTS. Positioning of Dixie Brands by Price Point Segment (Over $20 per SQ YD) Esp, Ate AT BROADLOOM RESIDENTIAL SALES = $7.0 Billion (2012 $’s) OR SALES DOLLARS 35% Mar
Slide 18: Dixie Group High-End Residential Sales
Dixie Group High-End Residential Sales XG All Brands THE DIXIE GROUP Masland, 38%
Slide 19: Dixie Group High-End Residential Sales
Dixie Group High-End Residential Sales XG All Brands National Retailers, mA y /, Mass / Merchant, / 15% Designer, 18%
Slide 20: QOS
QOS THE DIXIE GROUP Well-styled moderate to upper priced residential broadloom line — Known for differentiated pattern and color selection Dixie provides a “full line” to retailers — Sells Specialty and Mass Merchant retailers Growth initiatives — Stainmaster® Tru Soft ™ Fiber Technology — Stainmast
Slide 21: Carpets & Rugs brand
nk CARPETS&RUGS THE pixie crovur . : oe J Leading high-end brand with reputation for innovative styling, yr = se design and color High-end retail / designer driven — Approximately 30% of sales directly involve a designer Hand crafted and imported rugs Growth initiative — Stainmaster® TruSoft™ Fiber
Slide 22: Fine Carpet & Rugs brand
C oS FINE CARPET & RUGS Premium high-end brand — “Quality without Compromise” Designer focused — Approximately 40% of sales directly involve a designer Hand crafted and imported rugs Growth initiatives — Stainmaster® TruSoft™ Fiber Technology — Fabrica Permaset dyeing process “unlimited color select
Slide 23: Commercial Market Positioning
Commercial Market Positioning Us The Dixie Group THE DIXIE GROUP ¢ We focus on the “high end specified soft floorcovering contract market” | « We have positioned our brands to serve this market through: — Our Masland Contract division ¢ Broad product line for diverse commercial markets through a dir
Slide 24: Masland Contract
QOS THE DIXIE GROUP Premium brand in the specified commercial marketplace — Corporate, End User, Store Planning, Hospitality, Health Care, Government and Education markets Designer focused Strong national account base — Nordstrom’s, Target, Delta Air Lines, AECOM, Club Corp Growth initiative — SPEAK
Slide 25: Commercial sales by end market
Health Other,9% Care, 4% - Corporate, 46% Education, 2% ier an
Slide 26: Avant is our newest division
THE DIXIE GROUP Avant is our newest division Dedicated to servicing the designer through the multi-line interior finishes sales agent Focus is on the corporate market through high fashion broadloom and modular carpet tile offerings
Slide 27: Dixie Group Sales
Dixie Group Sales $ in millions THE DIXIE GROUP $331 $321 $283 $203 $231 $270 $266 $318 2006 2007 2008 2009 2010 2011 2012 2013
Slide 28: Sales & Operating Income
Sales & Operating Income $ in millions Net Sales 320.8 Net Income (Loss) 6.2 Non-GAAP Adjusted Op. Income 16.7 Non-GAAP Adjusted EBITDA 29.6 Net Sales 62.9 Net Income (Loss) (0.2) Non-GAAP Adjusted Op. Income 0.8 Non-GAAP Adjusted EBITDA 3.2 In 2013 our key objectives are: 282.7 (31.5) 1.5 15.2 66.6
Slide 29: Current Business Conditions
Current Business Conditions SS THE DIXIE GROUP Second quarter 2013 activity: The residential floorcovering market strengthened throughout the quarter. The market is growing due to an improving housing sector. Residentially we have momentum in our Stainmaster® TruSoft™, Stainmaster® SolarMax™ and woo
Slide 30: Outlook for 2013
Outlook for 2013 SS THE DIXIE GROUP The housing & commercial markets have strengthened: The residential housing & commercial end use markets are gaining momentum. Positive market reception to our new products: - Masland and Fabrica Wool Collections continued growth - New Stainmaster® SolarMax® and T
Slide 31: Fabrica
FABRICA “4 CARPETSS:RUCS HOME
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: Non-GAAP reconciliation quarterly
($in thousands) Q12012 Q22012 Q32012 042012 Q12013 Q22013 Operating income (loss) 620 (40) 820 415-1677 3,271 Plus: Impairment of assets = 3 s 2 zs Pls: Impairment of goodwill . 7 > . s : sis ei js . . . . . 148 399 307 530 794 51 Non GAAP Adj. Operating Income (Loss) (Note2) $ 768 $ 359 $1,127 $ 94
Slide 34: Non-GAAP reconciliation annual
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 4,948 : 2,317 4,091,556 (563) : - Plus: ‘capa of assets Co 4,478 1,459 co ? + eo ee Impairment of goodwill : 23,121 31,406 : - : lus: & 1,383 1,31
Slide 35: Non-GAAP Information
Non-GAAP Information THE DIXIE GROUP ($ in thousands) Q12012 Q22012 Q32012 Q42012 Q12013 Q22013 Non-GAAP Adjusted EBIT (from above) 617 55, 1,009 412 1,669 3,166 Times: 1 - Tax Rate = EBIAT 401 36 656 268 = 1,085 2,058 Ph Depreciation and Amortization 2,402 2,379 2,355, 2,259 2,513 2,559 lon Cash Im