Dixie Group, Inc. · OTC:DXYN
Dixie — Investor Presentation (May 2011)
38 slides from Dixie's investor presentation, May 12, 2011
Slide 1: Investor Presentation
= Exhibit 99.1 xG Inv Presentation XIE 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 * Refined focus on upper end markets in 2004 * Traditionally we have outperformed the industry and expect to do so in the future
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— 17% of carpet sales = Top 20 carpet customers—20% 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 March2011: 4 = Uneventful news ... =Newhome sales droppedto 250 thousand. = Existing home sales droppedto 4.88 million. = Home sales are so weak and inventories are so high that downward price pressur
Slide 6: Residential Remodeling
Residential Remodeling LS Owner-Occupied Improvements* ww THE DIXIE GROUP Millions of dollars $160,000 $140,000 — $120,000 $100,000 $80,000 a Expenditures decreased to arate of $109 billion in February. ‘That was 7.2% below one year ago. $60,000 * Census discontinued a broader survey of remodeling i
Slide 7: The Industry
The Industry XG THE DIXIE GROUP Mfg Value US Carpet and Rug Mill Shipments ($ 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 QS University of Michigan eee Bivie wkewe - 1966=100 ae March 2011: 95 90 = The consumeris worried. = =Confidenceis headed inthe 80 wrong direction primarily due to 75 rising food and gas prices. 70 = Consumers are perceiving the economyis slowly improving. = Only 11% of household
Slide 11: The Stock Market
The Stock Market TH E OSG Dixi18 GROUP April 2011: = The stock market continues to rally. = The marketis being driven by rising asset prices. =Fornow, high unemployment and the prospects of sinking house prices are not holding back the stock marketrally.
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: High-End Commercial share
From 29% to 38% High-End ‘Commercial 30%
Slide 15: Broadloom Sales Dollars % Change
15 a OG THE DIXIE GROUP - =e oBuBYS wedeld Broadloom Sales Dollars % Change vs. Prior Yr Quarter
Slide 16: Broadloom Square Yards % Change
16 a OG THE DIXIE GROUP a PRERRERE SERRE REESE Bua jueoeig 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 REF Ux Residential Sales na a 8 Masland) 42%
Slide 19: Dixie Group High-End Residential Sales
Dixie Group High-End REF Residential Sales (all brands) ..,,, Ries wees Retailer, 56%
Slide 20: Residential sales by channel
Distributor, Buikder, 2%. 1%
Slide 21: Dixie Home 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: Sales by customer channel
fous 9S THE DIXIE GROUP Designer, 31% Retailer, 5675,
Slide 23: Leading high-end brand
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 sales by channel
FABRICA OG FINE CARPET & RUGS Designer, 38%
Slide 25: Fabrica Fine Carpet & Rugs
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: Commercial sales by channel
Specified Design, 43% Hospitlality,
Slide 27: Masland
a nA Masland SS 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 Operations (in mitiions) OSG THE DIXIE GROUP ~ $331 $321 $283 $203 $231 $262 vi i j j 2010 2011 Annualized | CarpetSales & Processing Sales 28
Slide 29: Sales & Operating Income
Sales & Operating Income DG ($ in millions) 29 Net Sales 505 59.1 56.7 65.1 66.0 Non-GAAP Adjusted Operating Income (2.1) 02 (1.6) 25 18 Non-GAAP Adjusted EBITDA 0s 31 13 52 43 * We have sales momentum coming out of the 1*t quarter * We improved QI Adj. Operating Income by $3.9 million vs. Q1 2010 *
Slide 30: Dixie Debt Levels
Dixie Debt Levels OG ($ in millions) a a4 ai @ a a ai a2 Les) a4 a 2008 «2009 2009 2009 2009 2010 2010 2010 2010 2011 * We have reduced debt $26 million since the beginning of 2008 + Availability was $10.1 million at the end of QI 2011 + Availability was $12.4 million on May 11", 2011
Slide 31: Current Business Conditions
Current Business Conditions SG Sales = : al The 1* quarter of 2011 versus prior year (adjusted for selling days): ¢ Commercial sales up 18.6% vs. the industry up 7.7% ¢ Residential sales up 22.5% vs. the industry down 1.4% * Dixie Group sales up 21.4% © vs. the industry up 2.3% All brands up in the
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
Non-GAAP Information oN) 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 comparing the Company's
Slide 36: Net Sales as Adjusted
36 (Sinthousmds} 120 220 a32m0 Q42m0 12011 Weeks in Period cry a a B 14 Net Sales zs Reported S04 SOIR SKGT «IM OSM Adjustment for Weeks : (a7) Non-GAAP Net Sales as Adjusted (Mote 1) S504 $ SOMES $5666 $6519 $612
Slide 37: Non-GAAP Financial Information
Non-GAAP Financial Information: Note a: Restated Adjusted Operating Income (Loss) {Sin thousands) 2007{a) 208 fa) 20082) MO YTD ‘Operating income {loss} 16,707 (28AGD) 5,385) (2,570) 1,668 Plus: Fait consolidation and severance expenses - 2317 aint 4556 - Plus: Impairment of assets - AATS cy) 2 - Pl
Slide 38: Non-GAAP Financial Information
Non-GAAP Financial Information: Adjusted Operating Income (Loss) (Gin thousands} qzm0 a22m0 6 Q3zm0 gaz C12 Operating income (loss) (2.225) so S37) S18 Plus: Facility consolidation and severance expenses 2m m2 Ey Ey = Plus: Impairment of assets - - - - - Plus: Impairment of goodvell 2 st = = : (Non-