Dixie Group, Inc. · OTC:DXYN
Dixie — Investor Presentation (May 2004)
29 slides from Dixie's investor presentation, May 19, 2004
Slide 1: May 2004
Exhibit 99.1 May 2004
Slide 2: Strategic Positioning
Strategic Positioning Exited textiles and grew floorcovering business – now 100% floorcovering Eight acquisitions since 1993 Commitment to brands and upper-end market led to the sale of our North Georgia operations.
Slide 3: Residential Positioning
Residential Positioning Goal is to be a highly profitable, high-styled supplier at the upper-end of the residential marketplace. Retailers rate the Masland and Fabrica lines as leaders in quality, service and innovation. Have the largest market share in the > $20 price range. We, also, see the $10—$
Slide 4: Residential Positioning of The Dixie Group
Residential Positioning of The Dixie Group ESTIMATE TOTAL WHOLESALE MARKET FOR CARPETS AND RUGS: VOLUME AND PRICE POINTS Positioning of Dixie Brands by Price Point Segment BROADLOOM RESIDENTIAL SALES = $7.6 Billion Note: Industry average price is based on sales reported by CRI for the first quarter
Slide 5: Customers Are Extremely Happy With Dixie's Products and Service
Overall, Customers Are Extremely Happy With Dixie’s Products and Service Customers had a lot of positive things to say about both Masland and Fabrica • “Fabrica and Masland are perceived by me and my customers as having quality, style and a great reputation.” • “My Masland and Fabrica reps are the b
Slide 6: Customers Are Interested in Dixie Home
Customers Are Interested in Dixie Home Many customers who had seen the line showed interest • “Dixie Home can really be in the driver’s seat here.” • “Dixie is doing the right thing with this line.” This initial interest in the Dixie Home line is driven by relationships with Dixie and the Dixie Home
Slide 7: Residential Summary
Residential Summary Fabrica and Masland are among the best brands in high-end residential carpet Fabrica and Masland’s combined residential sales are estimated to be about 35% of total U.S. industry sales at $22.00 and higher Dixie Home at $10-$20 - Provides access for Dixie to a larger sector of th
Slide 8: Shaw Transaction
Shaw Transaction Sold North Georgia carpet and Calhoun yarn to Shaw for $205 million Sold Hurst spun yarn facility to Shaw for $6.7 million plus working capital One-time P & L charge $16.2 million Debt reduced $150 million
Slide 9: Capital Structure
Capital Structure Debt: 1Q 2004 Senior Debt 42.8 Subordinated Debt 29.7 72.5 Equity 98.8 Total Capitalization 171.3 Debt to Total Capitalization: Senior Debt 25% Subordinated Debt 17% Total Debt 42% Since August 2000, we reduced total debt approximately $244 million
Slide 10: Dixie Today
Dixie Today Smaller, more profitable, growing company with strong balance sheet and strong brands in the upper-end Vastly improved risk profile . Financially . Customer base High-end business (Fabrica, Masland & Dixie Home) –carpet sales up in . 10% in 2003 and over 21% 4th QT 2003 . Over half of th
Slide 11: Total Gross Margin and S, G & A as a % of Sales
Total Gross Margin and S, G & A as a % of Sales 31.9% 25.9% 2001 34.6% 25.3% 2002 34.1% 28.1% 2003 33.4% 27.3% 1st QT 2004 Gross Margin S,G & A
Slide 12: Sales By End Market
2003 Sales By End Market Dixie Group, Inc. High-End Commercial 31% High-End Residential 56% Dixie Home 5% Specialty Yarn 7% 2004 Sales By End Market Dixie Group, Inc. High-End Commercial 27% High-End Residential 52% Dixie Home 16% Specialty Yarn 5%
Slide 13: Sales - Continuing Operations
Sales Continuing Operations ($ in millions) $230.9 $36.7 $194.2 2001 $53.4 $7.7 $45.7 1st QT 2002 $223.2 $26.5 $196.7 2002 $51.8 $4.8 $47.0 1st QT 2003 $234.1 $16.6 $217.5 2003 $64.4 $6.3 $58.1 1st QT 2004 Carpet Sales Yarn Sales
Slide 14: Residential Broadloom Dixie Home
Residential Broadloom Dixie Home Fulfill market need for third player .Well-styled moderate to upper priced line Leverage needed by fiber suppliers for market access . Branded high-styled goods – not “me too” . Support fiber suppliers branded products Limited distribution strategy attractive to “sel
Slide 15: Today's Situation
Today’s Situation Dixie Home is now in phase 2 of product rollout and market placement . Launched second wave of product for a second rack in most retailers. . Samples ship beginning in March z Have 2,468 active retail stores (last six months) . Have 1,598 active mass merchant stores . Positioned wi
Slide 16: Dixie Home Key Customers
Dixie Home Key Customers The Home Depot Home Depot Expo Creative Touch Interiors NRF Distributors Abbey Carpets Carpets of Dalton L & L Company CCA Global Nebraska Furniture Mart Roberts Carpets & Fine Floors Sam Kinnairds J.R. McDade
Slide 17: Dixie Home Sales
Dixie Home Sales Total Dixie Home Total Dixie Home Trend
Slide 18: Masland Sales By Markets
Masland Sales By Markets Rugs 9% Commercial 47% Residential 44%
Slide 19: Masland Residential Sales
Masland Residential Sales Buying Groups 16% Designers 27% Retail 45% Builders 12%
Slide 20: Masland Residential
Masland Residential Leading high-end brand with reputation for development of product with innovative styling, design and color Doubling product introductions to increase market penetration Drive more volume on existing capacity at Masland/Dixie
Slide 21: Masland Residential Key Customers
Masland Residential—Key Customers Expo Design Nebraska Furniture Mart Standard Pacific Creative Touch Shea Homes Allstate Contract Flooring Lewis Carpets Carpets of Dalton Marshall Fields GSO Investments Worldwide Wholesale Creative Office Environment
Slide 22: Masland Commercial Sales
Masland Commercial Sales Corporate 45% Other 14% Store Planning 14% Hospitality 27% Channels: Interior Design Specifier and Commercial End-User
Slide 23: Masland Commercial
Masland Commercial Good and growing position with premium brand Designer focused Strong national account base Strong growth from new “energy collection” KSA study
Slide 24: Masland Contract Has Performed at the Same Rate or Higher Than the Market
Masland Contract Has Performed at the Same Rate or Higher Than the U.S. Commercial Carpet Market 1998 was a great year for Masland Contract, which grew 52% that year while the market only grew 5% From 1999 to 2002, Masland Contract performed at about the same rate as the market In 2003, Masland Cont
Slide 25: The Energy Line Has Contributed Significantly to This Strong Growth
The Energy Line Has Contributed Significantly to This Strong Growth The Energy line was started from the ground up in 2002, and generated over $13 million in sales for Masland during 2003 • 49% is through the residential sales force and 51% is sold through the commercial sales force The Energy line
Slide 26: Masland Commercial Key Customers
Masland Commercial Key Customers Store Planning Nordstrom Saks Target REI Bloomingdale’s Lens Crafters Famous Footwear Hospitality-Hotel Starwood Group (W Hotels, Westin Sheraton) Hilton/Embassy Suites Ritz Carlton Four Seasons West Coast Hosp. Loews Hotels Hospitality-Restaurant Red Lobster Applebe
Slide 27: Fabrica Sales By Markets
Fabrica Sales By Markets Builders 9% Specialty Manufacturers 10% Furniture/ Department Stores 11% Retailers 26% Decorator/ Design Trade 44%
Slide 28: Fabrica Residential Market
Fabrica Residential Market Premium high-end brand . Styling/patterns/color Consistent sales and profit growth
Slide 29: Fabrica Key Customers
Fabrica Key Customers Motor Coach & Yacht Industries Fleetwood Monaco Coach Country Coach Commercial Flooring Contractors Anderson Carpet Peppermill Casinos High-End Furniture & Department Stores Ethan Allen Dayton-Hudson Marshall Fields High-End Retail Stores The Home Depot Expo The Great Indoors D