Dixie Group, Inc. · OTC:DXYN
Dixie — Investor Presentation (November 2006)
25 slides from Dixie's investor presentation, Nov 15, 2006
Slide 1: The Dixie Group
Exhibit 99. 1 RY KS THE DIXIE GROUP November 2006 Masland c on traic t fiuson CARPETSS-RUGS
Slide 2: Forward-Looking Statements
XG THE DIXIE GROUP Forward-Looking Statements 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 dem
Slide 3: Dixie History
Lo OG THE DIXIE GROUP Dixie History Began operations in 1920 Grew floorcovering business from 1993 and exited textiles in 1999 - now 100% floorcovering Eight acquisitions from 1993 through 2000 Sold factory-built housing and needlepunch carpet operations in 2003 Commitment to brands and upper-end ma
Slide 4: Dixie Today
SG THE DIXIE GROUP Dixie Today * Profitable, growing company with strong brands in the upper-end market * Strong balance sheet * Diversified customer base o Top 20 carpet customers - 15% of total carpet sales o Top 40 carpet customers - 18% of total carpet sales
Slide 5: Dixie Carpet and Rug Sales by End Market
OG THE DIXIE GROUP Dixie Carpet and Rug Sales by End Market Year 2005
Slide 6: Residential Positioning of The Dixie Group
DG THE DIXIE GROUP ( Residential Positioning of The Dixie Group TOTAL MARKET: SQUARE YARDS OR SALES DOLLARS ESTIMATED TOTAL WHOLESALE MARKET FOR CARPETS AND RUGS: VOLUME AND PRICE POINTS P. My, ‘ositioning of Dixie Brands by Price Point Segment ATED Dar BROADLOOM RESIDENTIAL SALES = $7.6 Billion 35%
Slide 7: Dollar Sales Growth vs. Carpet Industry
_ OG THE DIXIE GROUP Indexed versus 2001 Dollar Sales Growth vs. Carpet Industry Developed growth initiatives in each of our business during 2002 Consistent sales growth began in 2003 and has continued through September 2006 BROADLOOM CARPET SALES DOLLARS CUMULATIVE CHANGE (2001 = Base Year) 80% + 7
Slide 8: Unit Sales Growth vs. Carpet Industry
Re KS THE DIXIE GROUP Unit Sales Growth vs. Carpet Industry * Dixie units sold increased 82.4% during the period 2002 through September 2006, while units sold by the carpet industry’s have been relatively flat. BROADLOOM CARPET SALES IN UNITS CUMULATIVE CHANGE (2001 = Base Year) 85% 9 75% + 65% + 55
Slide 9: Dixie High-End Residential Sales
OG THE DIXIE GROUP Dixie High-End Residential Sales Year 2005
Slide 10: Residential Broadloom - Dixie Home
OG THE DIXIE GROUP Residential Broadloom - Dixie Home Launched in 2003 Fulfill market need for third player o Well-styled moderate to upper priced line Leverage needed by fiber suppliers for market access o Branded high-styled goods - not “me too" o Support fiber suppliers’ branded products Selectiv
Slide 11: Masland Residential Sales
OG THE DIXIE GROUP Masland Residential Sales Year 2005 a1
Slide 12: Masland Residential
SG THE DIXIE GROUP Masland Residential Leading high-end brand with reputation for development of products with innovative styling, design and color High-end retail/designer driven Hand crafted and imported rugs Growth initiative — o Increasing product introductions to increase market penetration o W
Slide 13: Fabrica Residential Sales
OG THE DIXIE GROUP Fabrica Residential Sales Year 2005 13
Slide 14: Fabrica Residential
XS THE DIXIE GROUP Fabrica Residential Premium high-end brand o Leader in styling/patterns/color Designer focused Hand crafted and imported rugs New products, heightened focus on retail penetration and wool products will drive growth FABRICA 14
Slide 15: Masland Contract Sales
OG THE DIXIE GROUP Masland Contract Sales Year 2005 Channels: Interior Design Specifier and Commercial End User 15
Slide 16: Masland Contract
KS THE DIXIE GROUP Masland Contract * Good and growing position with premium brand * Designer focused * Strong national account base * Strong growth driven by “Energy Collection" o Contract carpet sales grew 8% in 2003, 15% in 2004, 12% in 2005 and 10% in the 1** nine months of 2006 o Expected to gr
Slide 17: The Energy Line has Contributed Significantly to Strong Commercial Growth
OG THE DIXIE GROUP The Energy Line has Contributed Significantly to Strong Commercial Growth The Energy Line was started from the ground up in 2002 and generated over $13 million, $22 million and $31 million; respectively, in sales for Masland during 2003, 2004 and 2005 Energy Line sales were $23.7
Slide 18: Masland Contract has Performed Better than the U.S. Commercial Carpet Market
OG THE DIXIE GROUP Masland Contract has Performed Better than the U.S. Commercial Carpet Market Started in 1993 — significant growth in the 1990’s From 1999 to 2002, Masland Contract performed at about the same rate as the market In 2003, Masland Contract grew 8% while the market declined slightly I
Slide 19: Dixie Sales Continuing Operations
OG THE DIXIE GROUP Dixie Sales Continuing Operations ($ in millions) $319 $292 ji 2001 2002 2003 2004 2005 i Carpet Sales © Yarn Saes (1}- Includes sales related to disposal of North GA operations 19
Slide 20: Dixie Operating Income
XG THE DIXIE GROUP (1)- @)- @)- (4) - Dixie Operating Income ($ in millions) $14.0 2001 Includes $3.2 million net gains from the sale of facilities and impairments Includes $11.4 million of impairments and charges Includes LIFO liquidation that increased operating income by $2.3 million in 2004 Incl
Slide 21: Dixie YTD September Sales
SG THE DIXIE GROUP Dixie YTD September Sales ($ in millions) $250.8 $230.8 $209.3 $169.5 2003 2004 2005 2006 & Carpet Sales © Yarn & Olner (1)- Includes sales related to disposal of North GA operations 21
Slide 22: Dixie YTD September Operating Income
-y SG THE DIXIE GROUP Dixie YTD September Operating Income ($ in millions) $17.0 $14.4 $14.5 $9.4 7 T 1 2003 2004 2005 2006 22
Slide 23: Dixie Capital Structure
DG THE DIXIE GROUP Dixie Capital Structure Debt: Senior Debt Subordinated Debt Equity Total Capitalization Debt to Total Capitalization: Senior Debt Subordinated Debt Total Debt ($ in millions) Sept. 30, 2006 $ 76.6 22.2 $ 98.8 131.2 $ 230.0 23
Slide 24: Current Business Conditions
OG THE DIXIE GROUP Current Business Conditions Carpet industry’s business soft: Sales Dollars Units Sold Dixie | Industry | Dixie | Industry 3" QT 2006 8% -3% 5% -10% YTD Sept. 2006 10% 2% 12% 5% Our sales grew 4% in October, but orders declined due to price increases a year ago and industry weaknes
Slide 25: Outlook
OG THE DIXIE GROUP Outlook ° Although the industry is experiencing a difficult period, we are encouraged by several ctors: o Favorable comparison in units and dollars to the industry o Sales improvement in each of our four businesses in the third quarter and first nine months of this year o Improved