Dixie Group, Inc. · OTC:DXYN
Dixie — Investor Presentation (March 2021)
31 slides from Dixie's investor presentation, Mar 4, 2021
Slide 1: March 2021 Investor Presentation
March 2021 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 Began as Dixie Mercerizing in Chattanooga, TN • 1990’s Transitioned from textiles to floorcovering • 2003 Refined focus on upper- end floorcovering market • 2003 Launched Dixie Home - upper end residential line • 2005 Launched modular tile carpet line – new product category • 20
Slide 4: COVID – Response; Financing Initiatives
COVID – 19 Response Health & Safety • Large scale COVID-19 testing where necessary • Monitoring and complying with all government regulations • Restrictions implemented to minimize group meetings • Requirement to wear masks when unable to social distance • Remote work schedules have been implemented
Slide 5: COVID-19 Recovery
DIXIE GROUP THE COVID-19 Recovery Net Sales Comparison for Current and Prior Year WkO1 WkO4 WkO7 Wk1E Wk13 Wk16 Wk19 Wk22 Wk25 Wk28 Wk31 Wk34 Wk37 Wk4E Wk43 Wk46 Wk49 WkS52 ——— Net Sales 2019 (starts week 1) —?—Net Sales 2020
Slide 6: Dixie Today
Dixie Today • Commitment to brands in the upper- end market with strong growth potential. • Diversified between Commercial and Residential markets. • Diversified customer base (TTM Basis) – Top 10 carpet customers • 12% of sales – Top 100 carpet customers • 28% of sales 6
Slide 7: Dixie Group Business Drivers
7 Dixie Group Business Drivers • Residentially • The flooring market is driven by residential remodeling activity, 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, dep
Slide 8: New and Existing Home Sales
New and Existing Home Sales Seasonally Adjusted Annual Rate 8 New 1,000 Existing 1,000 Source: National Association of Realtors (existing) and census.gov/newhomesales 3,500 4,000 4,500 5,000 5,500 6,000 6,500 7,000 7,500 300 350 400 450 500 550 600 650 700 750 800 850 900 950 1,000 1,050 Jan '13 Jan
Slide 9: Remodeling Activity
Remodeling Activity OS THE DIXIB GROUP Leading Indicator of Remodeling Activity — Fourth Quarter 2020 Homeowner Improvements & Repairs Four-Quarter Moving Totals Four-Quarter Moving Billions Rate of Change $450 10% 6.3% 5.2% $400 3.4% 3.2% xe 29% 3.8% | 5% fo $350 + 0% $300 $250 3% $200 10% 4 2021-1
Slide 10: Household Formations
Household Formations XG Figure 1: Household Formations HH (mm) HH formations jump on HH (mm) (1,000) (2,000) (3,000) ovyrwnoornrwoeooeorian ono vyrTwo oOonm~ O DMD OD co oOo Oo aowwm 2:82 - = E re Se SESE = = CS oooooqooooqooqooqooqoduo9ooo$s:s? @©& NNNN NN NN NNN NN NN NN NSN MM) Own less Rent (LHS
Slide 11: Residential and Commercial Fixed Investment
Residential and Commercial Fixed Investment 11
Slide 12: 2019 U.S. Flooring Manufacturers
2019 U.S. Flooring Manufacturers 12 Source: Floor Focus - Flooring includes sales of carpet, rugs, ceramic floor tile, wood, laminate, resilient and rubber Flooring Manufacturers Flooring $ in millions Flooring Market % Shaw (Berkshire Hathaway) 5,387 25.2% Mohawk (MHK) 5,084 23.8% Engineered Floors
Slide 13: Dixie versus the Industry
Dixie versus the Industry 2020 TTM U.S. Carpet & Rug Market 13 Source: Floor Covering Weekly and Dixie Group estimate TTM: Trailing Twelve Months 2020 TTM Dixie sales High End Commercial, 20% High End Residential, 80% Commercial, 39% Residential, 61%
Slide 14: Industry Positioning
Industry Positioning The Dixie Group • Strategically our residential and commercial businesses are 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” w
Slide 15: High-End Residential Sales by Brand for 2020
Dixie Group High-End Residential Sales All Residential Brands Masland Dixie Home Fabrica TRUCOR 15 Sales by Brand for 2020
Slide 16: High-End Residential Sales by Channel for 2020
Dixie Group High-End Residential Sales All Brands Retailer Designer Mass Merchant Builder Commercial Specialty - OEM 16 Sales by Channel for 2020 The company believes that a significant portion of retail sales also involve a designer.
Slide 17: Residential Business
Residential Business • Residential represents 85% of TDG sales today • Doubled our market share of carpet in the past 10 years, aided by an upper end segment that is outpacing the market • Successfully entered the hard surface market in the rigid core and engineered wood segments • Residential busin
Slide 18: Dixie Home
• Affordable Fashion: Dixie Home provides well styled carpet and hard surface designs in the mid to high end residential market. • With a broad range of price points, Dixie Home meets the needs of a variety of consumers through specialty retailers and mass merchants. • Growth initiatives – TRUCOR™ S
Slide 19: Masland
• Leading high-end brand with reputation for innovative styling, design and color • High-end retail / designer driven – Approximately 20% of sales directly involve a designer – Hand crafted and imported rugs • Growth initiatives – TRUCOR Prime™ WPC Luxury Vinyl Flooring & – TRUCOR™ Energy SPC floori
Slide 20: Fabrica
• Premium high-end brand – “Quality without Compromise” • Designer focused – Approximately 28% of sales directly involve a designer – Hand crafted and imported rugs • Growth initiatives – Fabrica Fine Wood Flooring, a sophisticated collection of refined wood flooring – EnVision 6,6™ nylon – Luxury w
Slide 21: Commercial Market Positioning
Commercial Market Positioning The Dixie Group • We focus on the “high-end specified soft floorcovering contract market” • Our AtlasMasland products – Designer driven focused on the fashion oriented market space – Broad product line for diverse commercial markets • Our Masland eNergy products – Sells
Slide 22: Atlas Masland commercial brand
• Upper-end brand in the specified commercial marketplace – Corporate, End User, Store Planning, Hospitality, Health Care, Government and Education markets • Designer focused • Strong national account base • Growth initiatives – Sustaina™ cushion modular carpet backing with the ability to install in
Slide 23: Commercial Sales by Channel for 2020
Hospitality Corporate Education Store Planning Gov't Health Care Other 23 Sales by Channel for 2020 Channels: Interior Design Specifier and Commercial End User
Slide 24: Dixie Group Sales
Dixie Group Sales $ in millions 24 331 321 283 205 231 270 266 345 407 422 397 412 405 375 316 0 50 100 150 200 250 300 350 400 450 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 Net Sales *2016 had 53 weeks.
Slide 25: Sales & Operating Income
Sales & Operating Income $ in millions 25Note: Non-GAAP reconciliation starting on slide 32 Annual FY 2012 FY 2013 FY 2014 FY 2015 FY 2016 FY 2017 FY 2018 FY 2019 FY 2020 Net Sales 266 344 407 422 397 412 405 375 316 Net Income (Loss) (0.9) 5.3 (1.4) (2.4) (5.3) (9.6) (21.4) 15.3 (9.2) Operating Inc
Slide 26: Current Business Conditions
Current Business Conditions Outlook: • We reduced debt by $10 million in 2020 bringing our total debt reduction to $60 million over the last thirty months. • We entered into a new $75 million line of credit and two long term loans totaling $25 million. These transactions, along with cost reductions
Slide 27: Inspired by Design
INSPIRED BY DESIGN. DIXIE HOME RF A THE BDIKTE GCGROUP
Slide 28: Non-GAAP Information
Non-GAAP Information 28 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 cu
Slide 29: Non-GAAP Information: Gross Profit and S,G&A
Non-GAAP Information 29 Non-GAAP Gross Profit 2012 2013 2014 2015 2016 2017 2018 2019 2020 Net Sales 266,372 344,374 406,588 422,484 397,453 412,462 405,033 374,581 315,940 Gross Profit 65,372 85,569 95,497 106,231 95,425 101,213 86,991 86,205 76,456 Plus: Unusual Workers Comp - - - - - - 450 - - Pl
Slide 30: Non-GAAP Operating Income
30 Non-GAAP Operating Income 2012 2013 2014 2015 2016 2017 2018 2019 2020 Net Sales 266,372 344,374 406,588 422,484 397,453 412,462 405,033 374,581 315,940 Operating income (loss) 1,815 8,855 (5,236) 1,990 (3,415) 3,965 (15,624) 21,350 (2,919) Plus: Unusual Workers Comp - - - - - - 450 - - Plus: Leg
Slide 31: Non-GAAP EBIT and EBITDA
31 Non-GAAP EBIT and EBITDA 2012 2013 2014 2015 2016 2017 2018 2019 2020 Net income (loss) as reported (927) 5,291 (1,402) (2,426) (5,278) (9,555) (21,384) 15,270 (9,207) Less: (Loss) from discontinued, net tax (275) (266) (2,075) (148) (71) (233) 95 (348) (121) Plus: Taxes (401) (576) 1,055 (714) (