Dixie Group, Inc. · OTC:DXYN
Dixie — Investor Presentation (November 2024)
24 slides from Dixie's investor presentation, Nov 1, 2024
Slide 1: November 2024 Investor Presentation
November 2024 Investor Presentation Contact: Allen Danzey CFO The Dixie Group Phone: 706-876-5865 allen.danzey@dixiegroup.com Exhibit 99.1
Slide 2: Forward Looking Statements
Forward Looking Statements The Dixie Group, Inc. • 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 o
Slide 3: Dixie History
Dixie History • 1920 • 1990’s • 2003 • 2003 • 2005 • 2012 • 2013 • 2014 • 2014 • 2016 • 2017 • 2018 • 2018 • 2019 • 2021 • 2022 • 2024 Began as Dixie Mercerizing in Chattanooga, TN Transitioned from textiles to floorcovering Refined focus on upper- end floorcovering market Launched Dixie Home - uppe
Slide 4: Dixie Today
Dixie Today • Commitment to brands in the upper-end residential market with strong growth potential. • Diversified customer base – Top 10 customers • 6.8% of sales – Top 100 customers • 24% of sales 4
Slide 5: Net Sales of Residential Products
Net Sales of Residential Products ($ shown in millions) 5 - 50 100 150 200 250 300 350 400 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 FC Residential Product Net Sales
Slide 6: Dixie Group Business Drivers
Dixie Group Business Drivers 6 • The residential flooring market is driven by remodeling, existing home sales and new construction of single family and multifamily housing. • Our residential business plays primarily in the mid to high end residential replacement segment, dependent upon consumer conf
Slide 7: Market Data
Market Data Industry Sales in $ Industry Sales in Units US Existing Home Sales Mortgage Rates Comparative industry sales data for third quarter over the last three years show sales down 23.2% in dollars and 24.4% in units. Existing home sales, affected by rising mortgage rates, are down significantl
Slide 8: Remodeling Activity
Remodeling Activity SF THE DIXIE GROUP Leading Indicator of Remodeling Activity — Third Quarter 2024 Homeowner Improvements & Repairs Four-Quarter Moving Totals Four-Quarter Moving Billions Rate of Change $550 5 29 ~ 20% | 18.6% 2% 18.0% $500 12.0% s + 15% $450 | | 40% $400 $350 | + 5% $300 | j 1.2%
Slide 9: 2023 U.S. Flooring Manufacturers
2023 U.S. Flooring Manufacturers Source: Floor Focus - Flooring includes sales of carpet, rugs, ceramic floor tile, wood, laminate, resilient and rubber 9 Flooring Market % Flooring $ in millionsFlooring Manufacturers 21.6% 5,487Shaw (Berkshire Hathaway) 19.3% 4,895Mohawk (MHK) 5.8% 1,475Engineered
Slide 10: Carpet Trends – Independent Floor Covering Retailers
Carpet Trends – Independent Floor Covering Retailers The Dixie Group as Compared to the Industry Independent Floor Covering Retailers excludes big box stores and business related to multi- family housing and new home construction. This most closely represents the area Dixie competes in. 10
Slide 11: Growth Initiatives: Decorative
GROWTH INITIATIVES Decorative/TDG Retail Soft/Industry (Residential Replacement) 11 -25.0% -20.0% -15.0% -10.0% -5.0% 0.0% 5.0% 10.0% 15.0% 20.0% 2022.Q1 2022.Q2 2022.Q3 2022.Q4 2023.Q1 2023.Q2 2023.Q3 2023.Q4 2024.Q1 2024.Q2 2024.Q3 Decorative / TDG Retail Soft / Industry (Res Replacement) Decorati
Slide 12: Growth Initiatives: PET
GROWTH INITIATIVES PET/TDG Retail Soft/Industry (Residential Replacement) 12 -30.0% -20.0% -10.0% 0.0% 10.0% 20.0% 30.0% 40.0% 50.0% 60.0% 70.0% 80.0% 2022.Q1 2022.Q2 2022.Q3 2022.Q4 2023.Q1 2023.Q2 2023.Q3 2023.Q4 2024.Q1 2024.Q2 2024.Q3 PET / TDG Retail Soft / Industry (Res Replacement) TDG Retail
Slide 13: Market Share
Market Share 13 Sales by The Dixie Group as a percent of the estimated total residential market 0.00% 1.00% 2.00% 3.00% 4.00% 5.00% 6.00% 7.00% 8.00% Q 1 20 09 Q 3 20 09 Q 1 20 10 Q 3 20 10 Q 1 20 11 Q 3 20 11 Q 1 20 12 Q 3 20 12 Q 1 20 13 Q 3 20 13 Q 1 20 14 Q 3 20 14 Q 1 20 15 Q 3 20 15 Q 1 20 16
Slide 14: Industry Positioning
Industry Positioning The Dixie Group • Strategically our business is 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 – Be a “product driven company” with an emphasis on beautiful a
Slide 15: High-End Residential Sales by Brand
Dixie Group High-End Residential Sales All Brands 15 Sales by Brand for Q3 2024 Trailing Twelve Months Trucor Masland Dixie Home Fabrica
Slide 16: High-End Residential Sales by Channel
Dixie Group High-End Residential Sales All Brands Sales by Channel for Q3 2024 Trailing Twelve Months The company believes that a significant portion of retail sales also involve a designer. 16 Retailer Designer Other Builder
Slide 17: DH Floors
• In 2023, we rebranded Dixie Home as DH Floors and celebrated 20 years in the market. • Affordable Fashion: DH Floors provides well styled carpet and hard surface designs in the mid to high end residential market. • With a broad range of price points, DH Floors meets the needs of a wide range of co
Slide 18: Masland
• Inspired by Design: leading high-end brand with reputation for innovative styling, design and color • High-end retail / designer driven, approximately 16% of sales directly involve a designer • The most versatile offering in the industy • Growth initiatives – TRUCOR® Prime WPC flooring – TRUCOR® E
Slide 19: Fabrica
• Quality without Compromise: beautiful, high end residential products, manufactured with the finest raw materials and an unwavering commitment to quality and attention to detail. • Designer focused, approximately 22% of sales directly involve a designer • Custom construction, pattern, and color cap
Slide 20: Business Challenges
Business Challenges • Invista sold Stainmaster brand to Lowes • Ultimately led to the loss of our business with Lowes – our largest mass merchant customer • We sold our commercial division to Mannington • Began a restructuring plan to right size our operations to the new sales volume 2021 • Our prim
Slide 21: 2023 Cost Reduction Plan
2023 Cost Reduction Plan $35.6 Million In iti at iv e Co st S av in gs Employee Headcount Reduction Number of employees was reduced by 27% (354 employees) Lower Costs on Nylon Fiber. Existing nylon broadloom styles were converted to new raw material fibers from multiple suppliers at lower cost Reduc
Slide 22: 2024 Cost Reduction Plan
2024 Cost Reduction Plan $11.0 Million In iti at iv e Co st S av in gs Raw Material Cost Savings Savings from Partial Year of Internal Extrusion Operations and reductions in Costs of Nylon Fiber and Polyester Yarn Reductions in Expenses for Samples Costs maintained at a level to support new product
Slide 23: Looking Forward
Looking Forward We anticipate strong sales driven by pent up demand when interest rates are reduced and the housing market recovers. Gross margins will continue to improve with full volume from extrusion operations and increased volume in the manufacturing plants. Selling expenses are expected to st
Slide 24: Inspired by Design
Aprcslank INSPIRED BY DESIGN.