Dixie Group, Inc. · OTC:DXYN
Dixie — Investor Presentation (March 2012)
37 slides from Dixie's investor presentation, Mar 8, 2012
Slide 1: Investor Presentation March 2012
OG THE DIXIE GROUP Exhibit 99.1 March 2012 Investor Presentation Jon Faulkner CFO The Dixie Group Phone: 706-876-5814 jon faulkner@dixiesr oup.com
Slide 2: Forward Looking Statements
Forward Looking Statements SG The Dixie Group, Inc. 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 i
Slide 3: Dixie History
Dixie History Began operations in 1920 Entered floorcovering in 1993 and exited textiles in 1999 — 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 do so in the fu
Slide 4: Dixie Today
Dixie Today y@ 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 customers * 20% of sales — Top 20 customers * 22% of sales
Slide 5: New and Existing Home Sales
New and Existing Home Sales SG Seasonally Adjusted Rate aeeE HeNIee) eee one New 1,000 Existing 1.000 650 + 5,500 January 2011: = Existing home sales up froma yearago and ona steadybut + 5,000 slowrecovery = Newhome sales have beennear 600 550 Tax Credit Response 500 the 300,000 rate for over a year
Slide 6: Residential Remodeling
. . : > Residential Remodeling SG Owner-Occupied Improvements* — ee Flatin 2011 with a slow recovery predicted for 2012. Millions of dollars | $150,000 $140,000 + > 2011 by month $130,000 $120,000 + $110,000 ~ $100,000 $90,000 $80,000 r —— > —— 00 01 02 03 04 05 06 07 08 09 10 Jan Feb Mar AprMay Jun
Slide 7: The Industry versus GDP
The Industry versus GDP OG THE DIXIE GROUP Value of U.S. Carpet & Rug Shipments versus U.S. GDP 13000000 45000 2012 45000000 5000 =Weare starting 14,000,000 to see arebound az00 | | " inthe 12,000,000 —_ relationship 1900 | betweencarpet sous andrug shipments and sm | Epp 6,000,000 ooo =We believe t
Slide 8: Residential and Commercial Fixed Investment
Residential and Commercial SG Fixed Investment THE DIXIE GROUP Fixed Investment as % of GDP (US.Dept. of Commerce) No rebound in residential activity Slight rebound in commercial activity
Slide 9: Consumer Sentiment
Consumer Sentiment Conference Board 10 Conference Board Consumer Confidence Survey January 2012: = Consumer sentimentis moderating (blue) = Upper-end consumer confidenceis up but tempered (red) ="Regarding the short-term outlook, consumers are more upbeat about employment. but less optimistic about
Slide 10: The Stock Market
The Stock Market xS DIXIE GROUP 16,000 14,000 12.000 19,000 ‘8000 6000 ‘4000 2000 Jan-07 Dow Jones Industrial Average a Apr-07 - Jul-07 | Oct-07 | Jan-08 + Apr-08 + Jul-08 — Oct-08 — Jan-09 + Apr-09 - Jul-09 — Oct-09 — Jan-10 + Apr-10 - Jul-10 > Oct-10 + Janell Apr-11 4 Jul. Oct-11 Jan-12~ February
Slide 11: The Industry
The Industry 29,000,000 48,000,000 46,000,000 44,000,000 12,000.000 10,000,000 8,000,000 5,000,000 4,000,000 2,000,000 Value of U.S. Carpet & Rug Mill Shipments {$ 00's) Sales of The Dixie Group from 2003 through 2011 __ Dixie is gaining market share as the economy rebounds Single year dips in Shipm
Slide 12: 2010 U.S. Carpet Manufacturers
2010 U.S. Carpet Manufacturers RG SJ HE DIXIE fe >ROUP Carpet & Rug Sales Shaw Mohawk Bealieau Interface Dixie Other Market Source: Floor Focus Dollars in Millions % Total cS) 3,024 31.2% S 2,442 25.2% cS) 896 9.2% S 496 5.1% S 225 2.3% S 2,618 27.0% S 9,701 100.0% 12
Slide 13: The Industry
The Industry SG THE DIXIE GROUP 2006 Carpet End Use 2011 Carpet End Use Sales $10.19 Billion Sales $7.16 Billion Commercial 43% Source: Floor Focus ~ Broadioom & Carpet Tile Ween vets 13
Slide 14: Dixie Group Carpet Sales
Dixie Group Carpet Sales OG THE DIXIE GROUP From 29% to 38% High-£nd Commercial 29% High=nd Residential 71% 14
Slide 15: Carpet Dollar Sales
Carpet Dollar Sales OG Indexed to 2008 THE DIXIE GROUP 1.20 130 1.00 090 | 0.80 0.70 0.60 oso 0.40 a2 2008 932008 ‘a1 2003 ‘a3 2009 12010 3 2010 12011 932011 —irie Tota! index to 2008 Dollrs CA Total Index to 2008 Dallas 15
Slide 16: Carpet Unit Sales
Carpet Unit Sales OG Indexed to 2008 THE DIXIE GROUP {130 - wan ml Z\\ ove f js 7 AG —vinie Total index to 2008 Units Chl Total Index to 2008 Units 16
Slide 17: Residential Positioning
Residential Positioning SG The Dixie Group THE DIXIE GROUP ESTIMATED TOTAL WHOLESALE MARKET FOR CARPETSAND RUGS a VOLUME AND PRICE POINTS an Positioning of Dixie Brands by Price Point Segment 5 (Over $20 per SQ YD) z i (Over $20 per SQYD) sr, ay | ATE ae Par s a H BROADLOOMRESIDENTIAL SALES = $7.0 B
Slide 18: Dixie Group High-End Residential Sales
Dixie Group High-End Residential Sales y@ All Brands THE DIXIE GROUP
Slide 19: Dixie Group High-End Residential Sales
Dixie Group High-End Residential Sales SG All Brands THE DIXIE GROUP Other, 1% Distributor, Specialty - Commercial, 1% OEM, 1% Builder, 3%_ 395 National Retailers, 2%. / Merchant, 16% Retailer, 55% 19
Slide 20: Sales by Channel for 2011
THE DIXIE GROUP PN SaisbyGhahndior200 Builder, 2% _Distributor, 1% Mass Merchant, 40% 20
Slide 21: Well-styled moderate to upper priced residential line
y@ THE DIXIE GROUP * 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® SolarMax® Fiber Techno
Slide 22: Sales by Channel for 2011
Aanker CARPETS&RUGS OG E GROUP "Sales by Channel for 2011 Commercial, 6% \ \\. Other, 1% Builder, 4%___ National Retailers, 1% Designer, 30% 22
Slide 23: Leading high-end brand
Pus oS CARPETS&:RUGS cceninicininaacatio * 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 * First introductions in 2007 *
Slide 24: Fabrica Sales by Channel
FABRICA 8S... FINE CARPET & RUGS Specialty - OEM, 3%. Retailer, 45% 24
Slide 25: Fabrica premium high-end brand
FABRICA BS..,., FINE CARPET & RUGS Premium high-end brand — Superior quality in all aspects Designer focused Hand crafted and imported rugs Growth initiative — Stainmaster® TruSoft™ Fiber Technology — Focus on retail penetration — Full service supplier of wool to the designer trade with excellent se
Slide 26: Masland Contract Sales by Channel
Masland oe Ccontraet THE DIXIE GROUP Other, 7%, Health Care, 7% Gov't, 6% Store Planning, / 20%. Corporate, 39%
Slide 27: Premium brand in the commercial marketplace
1 / | Viasian¢ OG THE DIXIE GROUP « Premium brand in the commercial marketplace * Designer focused * Strong national account base — Nordstrom’s, Target, Sears, Belk, Delta Air Lines, AECOM, Club Corporation of America * Growth initiative — Modular/carpet tile — End User Channel 27
Slide 28: Dixie Group Sales
Dixie Group Sales XS $ in millions THE DIXIE GROUP $331 $321 $283 $203 $231 $270 350 + 300 | 416 11 = 250 | 200 | 150 | ‘ 305 ope aes 100 | 50 | 2006 2007 2008 2009 2010 2011 ™Carpet Sales _™ Processing Sales 28
Slide 29: Sales & Operating Income
Sales & Operating Income OG $ in millions THE DIXIE GROUP Y¥2007 Y2008 Y2009 Y2010 Y2011 Net Sales 320.8 282.7 203.5 231.3 270.1 Net Income (Loss) 6.2 (31.5) (42.2) (4.7) 1.0 Non-GAAP Adjusted Operating Income (Loss) 16.7 1.5 (8.4) (1.0) 5.1 Non-GAAP Adjusted EBITDA 29.6 15.2 5.1 10.6 14.8 * In 2011
Slide 30: Current Business Conditions
. - ~~ Current Business Conditions SG 2011 Activity THE DIXIE GROUP Sales Activity (on a 52 week basis): * Residential sales up 16% while the industry is down slightly * Commercial sales up | 1%, nearly double the industry growth rate * Dixie Group sales up 14% versus limited growth for the industry
Slide 31: Outlook
RG Outlook G Current quarter THE DIXIE GROUP Though the market has been difficult, we are encouraged by: * Dixie’s high end goods are growing faster than the lower end * The mass merchant category for Dixie continues to decline as a percentage of our overall sales « Positive market reception to our
Slide 32: Pall
Pall £{ABRICA & aly b CARPETS CRUCS
Slide 33: Non-GAAP Information
) DS Non-GAAP Information — 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 financial information with additional meaningful bases for comp
Slide 34: Non-GAAP Information
Non-GAAP Information OG THE DIXIE GROUP ($ in thousands) Yr 2010 Yr 2011 Y/Y Chge Weeks in Period 52 53 Net Sales as Reported 231,322 270,110 16.8% Adjustment for Weeks - (4,711) -2.0% Non-GAAP Net Sales as Adjusted (Note 1) $231,322 $265,399 14.7% 34
Slide 35: Note a: Restated
Note a: Restated (Sin thousands) Operating income (loss) Plus: Facility consolidation and severance expenses Plus: Impairment of assets Plus: Impairment of goodwill Non-GAAP Adjusted Operating Income (Loss) (Note 2) (Sin thousands) Net income (loss) as reported Less: Income (loss) from discontinued
Slide 36: Quarterly Non-GAAP Reconciliation
($ in thousands) Q12010 Q22010 Q32010 Q42010 Q12011 Q22011 Q32011 42011 Operating income (loss) (2,286) 59 (1,937) 1594 1,669 2,301 1,178 520 Plus: Facility consolidation and severance expenses 21122 3048 - (563) - - Plus: Impairment of assets = = = = “ = “ “ Plus: Impairment of goodwill es : : = :
Slide 37: Non-GAAP Information
y@ THE DIXIE GROUP Non-GAAP Information Note a: Restated ($ in thousands) 2007 (a) 2008(a) 2009(a) 2010 2011 Non-GAAP Adjusted EBIT (from above) 16,801 (28,134) (45,208) (2,853) 5,426 Times: 1 - Tax Rate = EBIAT 10,921 (18,287) (29,385) (1,854) 3,527 Plus: Depreciation and Amortization 12,941 13,752