Dixie Group, Inc. · OTC:DXYN
Dixie — Investor Presentation (January 2012)
37 slides from Dixie's investor presentation, Jan 9, 2012
Slide 1: The Dixie Group Investor Presentation January 2012
OG THE DIXIE GROUP January 2012 Investor Presentation
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 carpet customers * 18.6% of carpet sales — Top 20 carpet customers * 21.2% of carpet sales
Slide 5: New and Existing Home Sales
New and Existing Home Sales Seasonally Adjusted Rate aeeE HeNIee) eee one New 1,000 [= 1g 1.000 és ‘sso November 2011: | ——New Homes —Enisting Homes = Existing home sales up 12% 00 + from a year ago and ona steady Tex Credit Ves but slowrecovery. basa Response = Newhome sales have beennear + 4500 Fa
Slide 6: Residential Remodeling
. . ; DEF Residential Remodeling SG Owner-Occupied Improvements* _—_ ee Upward trend for Q3 2011 with a slow recovery predicted. Millions of dollars $150,000 $140,000 $130,000 January 11 $120,000 $110,000 $100,000 $90,000 $80,000 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 Jan Feb Mar Apr
Slide 7: The Industry
The Industry SG THE DIXIE GROUP Value of U.S. Carpet & Rug Mill Shipments ($ 000's) 16,000,000 14,900,000 412,000,000 . Single year dips in Shipments during recessionary times 10,000,000 6,000,000 | Multi-year decline in this downturn 4,009,000 2,000,000 983 1988 1998 | 2003 2008 Source: U.S. Census
Slide 8: The Industry versus GDP
The Industry versus GDP THE DIXIE GROUP Value of U.S. Carpet & Rug Shipments versus U.S. GDP 16,000,000 18,000 2012 14,000,000 bad «Weare startingto sso | See areboundin Bone the relationship poo | betweencarpet 110,000,000 andrug shipments and vee SDP 000,000 soo | "We believe that 000000 the long-
Slide 9: Residential and Commercial Fixed Investment
Residential and Commercial Fixed Investment THE DI Fixed Investment as % of GDP (US.0apt. of Commerce} 19881 198901 sential Fined Investment % of GDP = Residential 22 vr Average Comercial Stuctures Fed Investment as % of GDP = = Commerciiaa ve average No rebound in residential activity Slight reboun
Slide 10: Consumer Sentiment
i BD Consumer Sentiment SG Conference Board THE DIXIE GROUP Conference Board Consumer Confidence Survey December 2011: = Consumer sentimentis rebounding (blue) = Upper-endconsumer confidenceis accelerating (red) =“Looking ahead, consumers are more opti ic that business conditions, employment prospec
Slide 11: The Stock Market
The Stock Market RG WW THE DIXIE GROUP Dow Jones Industrial Average 16,000 January 2012 14,000 = The stock market 12,000 has beenunstable throughout 2011 due to macro 10000 ‘ economic shocks a =2012is predictedto “ remain unsettled due to macro 6,000 events: Europe, — US Election, Chinese slowdown,
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: Carpet End Use
The Industry SG THE DIXIE GROUP 13 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 1.10 1.00 0.90 0.80 0.70 0.60 a1 2008 a3 2008 a1 2009 a3 2009 a1 2010 a3 2010 12011 a3 2011 15
Slide 16: Carpet Unit Sales
Carpet Unit Sales OG Indexed to 2008 THE DIXIE GROUP 1.30 1.20 1.10 1.00 0.90 o.80 0.70 0.60 0.50 0.40 a1 2008 93 2008 1 2009 3 2009 a1 2010 a3 2010 i201 a3 2011 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 by Channel
Dixie Group High-End Residential Sales SG All Brands THE DIXIE GROUP Other, 1% Distributor, Specialty - Commercial, 1% OEM, 1% Builder, 3% 305 National Retailers, 2%. / Merchant, 16% Retailer, 55% 19
Slide 20: Sales by Channel
THE DIXIE GROUP PN SaisbyGhahndior200 Builder, 2% _Distributor, 1% Mass Merchant, 40% 20
Slide 21: Well-styled moderate to upper priced residential broadloom 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 Techn
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
fAB RICA 26 ARPET & RUGS ales annel for 20 Specialty - Other, 4% _ OEM. 3% National Retailers, Designer, 37% 24
Slide 25: Fabrica Fine Carpet & Rugs
FABRICA BS..,., FINE CARPET & RUGS Premium high-end brand — Superior quality in all aspects Designer focused Hand crafted and imported rugs Growth initiative — New products, heightened focus on retail penetration — Full service supplier of wool to the designer trade with excellent service and suppor
Slide 26: Masland Sales by Channel
Masland 96 EOon?rae f THE DIXIE GROUP | yy Channel for Gov't, 6%. Health Care, —— Store ; Planning, 8% Education, 13% Corporate, 45%
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 2006 2007 2008 2009 2010 2011 Annualized |CarpetSales ™ Processing Sales 28
Slide 29: Sales & Operating Income
” OS Sales & Operating Income CXS $ in millions THE DIXIE GROUP Q3 2010 Q4 2010 Q12011 Q22011 Q32011 Net Sales 56.7 65.1 66.0 69.2 69.6 Net Income (Loss) from continuing operations Non-GAAP Adjusted Operating Income (Loss) Non-GAAP Adjusted EBITDA (1.9) 0.6 0.6 0.8 0.0 (1.6) 2.5 1.8 17 1.2 1.3 5.2 4
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 11%, nearly double the industry growth rate * Dixie Group sales up 14% versus limited growth for the industry — All b
Slide 31: Outlook
RG Outlook DOG Current quarter THE DIXIE GROUP Though the market has been difficult, we are encouraged by: ¢ The sales improvement is strongest at the highest price points * Positive market reception to our new products: — Masland and Fabrica Wool Collections continued growth — Masland Avenue — new
Slide 32: Pall
Pall £{ABRICA & aly b CARPETS CRUCS
Slide 33: Non-GAAP Information
y) C) SG Non-GAAP Information — THE DIXIE G 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 compar
Slide 34: Non-GAAP Information
Non-GAAP Information OG THE DIXIE GROUP ($ in thousands) YTD 2010 YTD 2011 Y/Y Chge Weeks in Period 39 40 Net Sales as Reported 166,188 204,761 23.2% Adjustment for Weeks : (4,711) -2.8% Non-GAAP Net Sales as Adjusted (Note 1) $166,188 $ 200,050 20.4% 34
Slide 35: Non-GAAP Adjusted Operating Income and EBIT (Restated)
Note a: Restated (Sin thousands) 2007 (a) 2008 (a) 2009 (a) 2010-2011 TD Operating income (loss) 16,707 (28,460) (45,389) (2,570) 5,148 Plus: Facility consolidation and severance expenses - 2,317 4,091 1,556 (563) Plus: Impairment of assets - 4,478 1,459 a - Plus: Impairment of goodwill - 23,121 31,
Slide 36: Quarterly Non-GAAP Adjusted Operating Income and EBIT
(Sin thousands) 12010 Q22010 932010 942010 a12011 Q22011 932011 Operating income (loss) (2,286) 59 (1,937) 1594 1,669 2,301 1,178 Plus: Facility consolidation and severance expenses 211 122 304 918 - (563) = Plus: Impairment of assets - - Plus: Impairment of goodwill 7 - Less One time item: Insuranc
Slide 37: Non-GAAP Information
Non-GAAP Information y@ THE DIXIE GROUP ($ in thousands) Q12010 Q22010 Q32010 Q42010 Q12011 Q22011 32011 Net income (loss) as reported (2,529) (744) (1,897) 516 623 766 (43) Plus: Interest 1,235 1,082 904 903 932 900 904 Plus: Depreciation 2914 2916 2941 2,655 2,469 2,311 2,421 Minus: Net change in