Dixie Group, Inc. · OTC:DXYN
Dixie — Investor Presentation (November 2010)
35 slides from Dixie's investor presentation, Nov 4, 2010
Slide 1: Investor Presentation
Exhibit 99.1 Investor Presentation BE GROUP
Slide 2: Forward-Looking Statements
Forward-Looking Statements SG 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
SS Dixie History 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 to
Slide 4: Dixie Today
> OS Dixie Today 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— 11% of carpet sales = Top 20 carpet customers— 14% of carpet sales
Slide 5: The Industry
The Industry A roadioom Carpe Sales $10.19 Billion Sales $7.00 Billion roadioom Carpe Commercial, 41% 2001-2009 From 32% to 42% Source: CRI
Slide 6: The Industry: Fixed Investment as % of GDP
The Industry XG THE DIXIE GROUP Fixed Investment as % of GDP (USDept. of Commerce) 6.5% 6.0% 55% 50% 45% 40% 3.5% 30% 2.5% 20% Residential Fixed Investm ent % of GDP — = Residential62 Yr Average ——Com ercial Structures Fixed Investm ent as% of GDP — = Commercial62 Vr Average
Slide 7: The Industry: Value of U.S. Carpet & Rug Mill Shipments
The Industry THE DG AI Dixi18 Value of U.S. Carpet & Rug Mill Shipments 16,000,000 ($.000's) GROUP 14,000,000 12,000,000 12-18 month dips in shipments during recessionary times 10,000,000 8,000,000 6,000,000 4,000,000 Multi-year decline in this downturn, 2,000,000 1963 1968 1973 Source: U.S. Census
Slide 8: Broadloom Sales Dollars % Change vs. Prior Year Quarter
a OG THE DIXIE GROUP —eindetry Die REE ee eee EEE SE eBuBYD JUeDe1g Broadloom Sales Dollars % Change vs. Prior Yr Quarter
Slide 9: Broadloom Square Yards % Change vs. Prior Year Quarter
a OG THE DIXIE GROUP [ —ineertry eBuwyo yue9edd Broadloom Square Yards % Change vs. Prior Yr Quarter
Slide 10: 2009 U.S. Carpet Manufacturers
2009 U.S. Carpet Manufacturers OS " 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 11: Dixie Group Carpet Sales
i Dixie Group Carpet Sales WAY Snir From 29% to 38% High-End Commercial, 33%
Slide 12: 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 13: Dixie High-End Residential Sales
Dixie High-End RF wy Residential Sales an ry wows °
Slide 14: Dixie High-End Residential Sales
Dixie High-End RF %Y Residential Sales nn Retailer, 55%
Slide 15: Sales by Segment for 2009
Slide 16: Dixie Home
Re AY se THE DIXIE GROUP
Slide 17: Dixie Home
OSG 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 ® “value” products = Durasilk (p
Slide 18: Carpets & Rugs
CARPETS&RUGS THE DIXIE GROUP
Slide 19: Carpets & Rugs
Aner CARPETS& OSG 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® products for more volume orientated price points = Wool products introduced in ‘07 1
Slide 20: Fabrica Fine Carpet & Rugs
FABRICA SG FINE CARPET & RUGS
Slide 21: Fabrica Fine Carpet & Rugs
FABRICA FINE CARPET & RUGS AY sy Premium high-end brand Designer focused Hand crafted and imported rugs Growth initiative = New products, heightened focus on retail penetration = Fullservice national supplier of wool to the designer trade with excellent service and support
Slide 22: Masland
Masland BE esr FBS Ft THE DIXIE GROUP | ine | z "Sales by Segment for 2009 (arrows versus 2006) nse [; 2 Corporate, 30%
Slide 23: Commercial Brand
OSG THE DIXIE GROUP 23 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 = Updated “Energy Collection”
Slide 24: Dixie Sales from Continuing Operations
Dixie Sales Continuing AGS Operations (¢ in mitiions) [ah Bite SOUS 2010 YTD Run Rate ™CarpetSales & Yarn Sales 4
Slide 25: Sales & Operating Income
———eee Sales & Operating Income DG ($ in millions) a THE DIXIE GROUP Net Sales 3311 3208 282.7 2035 1662 Non-GAAP Adjusted Operating Income 166 16.7 15 (8.4) (5) Non-GAAP Adjusted EBITDA 2381 29.7 153 51 53 ¢ We have cut costs during the downturn to lower our break even point ° We have written off a
Slide 26: Quarterly Sales & Operating Income
Quarterly — 2 nz Sales & Operating Income OG 26 ($ 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 @6) 32 22 23 09 313 ¢ First quarter is historically our lowest quarter in net
Slide 27: Dixie Cost Structure
Dixie Cost Structure XG THE DIXIE GROUP a ¢ Considering the following assumptions: = Our current mix, noting that we are sensitive to mix = Our current volume and cost structure = Our current pricing (the price increase fully felt in July) ¢ Our cost structure if you do the math implies that: = Our
Slide 28: Dixie Debt Levels
Dixie Debt Levels OG ($ in millions) $68 ys $61 $62 28 Q42008 12009 Q22009 Q32009 G42009 Q12010 Q22010 Q32010 Capital expenditures of $2.5 million in 2010 versus depreciation and amortization of $11.6 million
Slide 29: Dixie Capital Structure
Dixie Gaprital Siruet re SG THE DIXIE GROUP September 25, 2010 December 27, 2008 Debt 67.5 93.8 Equity 62.9 107.6 Capital 130.4 201.4 Debt to Capital Ratio 51.8% 46.6%
Slide 30: Current Business Conditions
Current Business Conditions XG 30 ¢ The carpet industry is in recovery mode = Our carpet sales are up 11.9% Y/Y for the 3rd quarter o Industry up 2% Y/Y for the 3" quarter o Our residential up 16% Y/Y, industry down 2% o Our commercial up 3% Y/Y, industry up 8% Actions to consolidate facilities, mak
Slide 31: Outlook
Outlook XG THE DIXIE GROUP al ¢ Although the industry has experienced a difficult period, we are encouraged by: " Our shipments in the first five weeks of the 4" quarter are up over last year by 25% in both residential and commercial products = Positive market reception to our new products: © Maslan
Slide 32: a\A Jo bax
a\A Jo bax sland HOMER | Y
Slide 33: Non-GAAP Information
F Non-GAAP Information SG THE DIXIE GROUP Use of Non-GAAP Financial Information: The Company believes that non-GAAP performance measures, which management uses in evaluating the Company's business, may provide users of the Company's finandal information with additional meaningful bases for comparing
Slide 34: Adjusted Operating Income (Loss)
Adjusted Operating Income (Loss) {$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 35: Non-GAAP Financial Information
Non-GAAP Financial information: Adjusted Operating Income (Loss) {Sinthousands) 12009 @22009 Q32009 Qa2009 GIZMO Q2amMO as2m0 ‘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 as