Dixie Group, Inc. · OTC:DXYN
Dixie — Investor Presentation (August 2012)
37 slides from Dixie's investor presentation, Aug 2, 2012
Slide 1: August 2012 Investor Presentation
August 2012 Investor Presentation
Slide 2: Forward Looking Statements
Forward Looking Statements XG NS The Dixie Group, Inc. 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
Slide 3: Dixie History
Dixie History XG 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 For over 90 years we have focused on specialized products Traditionally we have outperformed the industry and expect
Slide 4: Dixie Today
Dixie Today XS 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 * 16% of sales — Top 20 carpet customers * 18% of sales
Slide 5: New and Existing Home Sales
New and Existing Home Sales Seasonally Adjusted Annual Rate THE DIXIE GROUP New 1,000 Existing 1,000 May 2012: 550. —Existi 5,000 = New home sales continue to New Homes existing Homes 4,800 increase. The rate of 369,000 was 19.8% better than one year ago. 4,600 =» New home sales increased in the ea0
Slide 6: Residential Remodeling
Residential Remodeling XG Owner-Occupied Improvements* THE DIXIE GRouP Steady recovery in 2009 through 2011 with predicted similar pattern for 2012. Millions of dollars $150000 $140,000 IN $130000 vA \ 2012 by month J/_\ / $120000 $110,000 $100,000 =x _ $80,000 at o om 2 8 OO 06 0 Oo 8 © 10 1 bn Feb
Slide 7: The Industry versus GDP
The Industry versus GDP THE DIXIE GROUP 18,000,000 16,000,000 12,000,000 10,000,000 Value of U.S. Carpet & Rug Shipments versus U.S. GDP (\ A 2012 = We are starting to see a rebound he Sf Vv 4,000 between carpet and rug shipments and GDP = We believe that the long-term trend will once again be resto
Slide 8: Residential and Commercial Fixed Investment
Residential and Commercial SS Fixed Investment THE DIXIE GROUP Fixed Investment as % of GDP (Us.0e No rebound in residential activity Slight rebound in commercial activity
Slide 9: Consumer Sentiment
Consumer Sentiment Conference Board THE DIXIE GROUP sve Cae 4 eee EEE Es CELLO * pipe June 2012: = Consumer expectations over the next 6 months are dropping (green) = Upper-end consumer confidence has dropped (red) = "Consumer Confidence declined in June, the fourth consecutive moderate decline.” =
Slide 10: S&P July 2012
@® x = © = x 3) fe) ES n co) < kK DIXIE GROUP THE S&P 500 July 2012 = The stock market has rebounded to pre-recession levels = 2012 is positive but is still subject to macro events: «Europe, «US Election, = China 200
Slide 11: The Industry
The Industry THE DIXIE GROUP Value of U.S. Carpet & Rug Mill Shipments ($.000'5) 20,000,000 350000 18,000,000 Sales of The Dixie Group from 2003 through 2011 seats essai Dixie is gaining the economy rebounds _ YON ST sae single year a \/ 12,000,000 } | ‘ale 10,000,000 t | ae Ls 8,000,000 m4 Ww) seo
Slide 12: 2011 U.S. Carpet Manufacturers
2011 U.S. Carpet Manufacturers XG THE DIXIE GROUP Dollars in Carpet Leaders Millions % Total Shaw $ 2,966 38.8% Residential & Commercial Mohawk $ 1,884 24.6% Residential & Commercial Beaulieu $ 726 9.5% Residential & Commercial Interface $ 501 6.5% Commercial Only Dixie $ 262 3.4% Residential & Comm
Slide 13: The Industry
The Industry XG THE DIXIE GROUP Sales $10.19 Billion Sales $7.41 Billion Commercial 35% Commercial 43% 2001 — 2012 Source: Floor Focus ~ Broadloom & Carpet Tile From 32% to 43% 13
Slide 14: Dixie Group Carpet Sales
Dixie Group Carpet Sales XG THE DIXIE GROUP From 25% to 38% High-End Commercial High-End Residential 75%
Slide 15: Carpet Dollar Sales
Carpet Dollar Sales XG Indexed to 2008 THE DIXIE GROUP
Slide 16: Carpet Unit Sales
Carpet Unit Sales XG Indexed to 2008 THE DIXIE GROUP a 2008 3 2008 a2 2009 93 2009 a2 2010 93 2010 Qu 2011 3 2011 Qu 2012 bate tesa to 2008 ats — en Yotnder 208 Us 16
Slide 17: Residential Positioning
Residential Positioning The Dixie Group THE DIXIE GROUP MARKET ESTIMATED TOTAL WHOLESA\ CARPETS AND RUG: VOLUME AND PRICE POINTS a Positioning of Dixie Brands by Price Point Segment Ss (Over $20 per SQ YD) esr, : man 2 "D4 ea 'T4 $3 BROADLOOM RESIDENTIAL SALES = $7.0 Billion (2009 $’s) 28 g a 23 3 s
Slide 18: Dixie Group High-End Residential
Dixie Group High-End Residential Sales ~ THE DIXIE GROUP Fabrica, 19% Masland, 41%
Slide 19: Dixie Group High-End Residential Sales All Brands
Dixie Group High-End Residential QXTG Sales All Brands THE DIXIE GROUP Commercial, 2% Other, 1%. pistributor, Specialty - Builder, 1% OEM, 1% Nati — Retailer, 58%
Slide 20: Mass Merchant
Mass Merchant, 35%
Slide 21: Well-styled moderate to upper priced residential broadloom
NS THE DIXIE GROUP 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® SolarMax ® Fiber Technology — Du
Slide 22: Carpets & Rugs Sales by Channel
CARPETS&RUG Sales by Channel for TTM Q2 2012 Commercial, 5% Builder, 4% a National é Retailers, 1%, & Designer, 29%
Slide 23: Masland Carpets & Rugs
Wine CARPETS&RUGS Leading high-end brand with reputation for innovative styling, design and color High-end retail / designer driven Hand crafted and imported rugs Growth initiative — Stainmaster® TruSoft™ Fiber Technology — Wool products * Introduced in 2007 * Now offering complete line to the indus
Slide 24: Fabrica Fine Carpet & Rug
FABRICA FINE CARPET & RUG THE DIXIE GROUP Specialty - Builder, 2 National a Retailers, 8% Retailer, 47%
Slide 25: Fabrica Fine Carpet & Rugs
ICA FINE CARPET & RUGS NS THE DIXIE GROUP . Premium high-end brand — Superior quality in all aspects Designer focused Hand crafted and imported rugs Growth initiatives — Stainmaster® TruSoft™ Fiber Technology — Unlimited color selection in select wool products — an industry exclusive — Expand select
Slide 26: Sales by Channel for Commercial Q2 2012
NS THE DIXIE GROUP "Sales by Channel for FFM Q22022 Health Other, 5% Gov't, 6%.CaFe, 6%. Store Planning, 15% Hospitality, 27%
Slide 27: Commercial brand overview
are XG THE DIXIE GROUP ¢ Premium brand in the commercial marketplace . Designer focused Strong national account base — Nordstrom’s, Target, Sears, Delta Air Lines, AECOM, Club Corporation of America Growth initiative — Modular/carpet tile — End User Channel
Slide 28: Dixie Group Sales
Dixie Group Sales $ in millions THE DIXIE GROUP $331 $321 $283 $203 $231 $270 $268 2006 2007 2008 2009 2010 2011 2012 Seasonally Adjusted Carpet Sales __-™ Processing Sales.
Slide 29: Sales & Operating Income
Sales & Operating Income OG $ in millions THE DIXIE GROUP 270.1 20 282.7 Net Sales 320.8 203.5 231.3 129.4 Net Income (Loss) 6.2 (31.5) (42.2) (4.7) 1.0 (0.6) Non-GAAP Adjusted Op. Income (Loss) 16.7 1.5 (8.4) (1.0) 5.1 1.3 Non-GAAP Adjusted EBITDA 29.6 15.2 5.1 10.6 14.8 6.1 Net Sales 66.0 69.2 69.
Slide 30: Current Business Conditions
Current Business Conditions SS 2012 Activity THe Dixie GROUP Sales Activity: * Second quarter as compared to prior year, sales down 3.7% - Residential sales up 5.6% compared to the industry down - Residential retail excluding mass merchants is up over 11% - Commercial sector is down while the indust
Slide 31: Outlook
RG Outlook G Current quarter THE DIXIE GROUP Though the market has been difficult, we are encouraged by: * Dixie’s high end goods are growing faster than the lower end * Positive market reception to our new products: - Masland and Fabrica Wool Collections continued growth - Masland Avenue — new tech
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Slide 33: Non-GAAP Information
Non-GAAP Information on kB Dee Cae a8 Use of Non-GAAP Financial Information: pany Juating th c ’s business, may provid ft pany ith additional meaningful sae’ i i However, the non-GAAP tive for, \ddition to, not It , i in the United States. factors performance results under by the actual number of we
Slide 34: Non-GAAP Information
Non-GAAP Information THE DIXIE GROUP ($ in thousands) YTD 2011 YTD2012 Y/Y Chge Weeks in Period 27 26 Net Sales as Reported 135,154 129,416 -4.2% Adjustment for Weeks (4,711) a 3.5% Non-GAAP Net Sales as Adjusted (Note 1) $130,443 $129,416 -0.8%
Slide 35: Note a: Restated
Note a: Restated ($ in thousands) Operating income (loss) : Impairment of assets Impairment of goodwill Manufacturing Realignm ent. Non-GAAP Adjusted Operating Income (Loss) (Note 2) ($ in thousands) Net income (loss) as reported 2007 (a) 2008(a) 2009(a) 2010 2011 ©2012 YTD 16,707 (28,460) (45,389)
Slide 36: Quarterly Non-GAAP Reconciliation
($ in thousands) Q12011 Q22011 Q32011 Q42011 Q12012 Q22012 Operating income (loss) 1,668 = 2,300» 1,178 520 620 (40) Plus: Facility consolidation and severance expenses 2 (563) = 5 z e Plus: Impairment of assets 2 : : Plus: Impairment of goodwill - . 2 * s us: Manufacturing Realignm : : : : 219 Non-
Slide 37: Non-GAAP Information
Non-GAAP Information THE DIXIE GROUP (Sin thousands) Q12011 Q22011 Q32011 Q42011 Qi2012 Non-GAAP Adjusted EBIT (from above) 1,685 2,290 882 568 617 Times: 1 - Tax Rate = EBIAT 1,096 1,489 573 369 401 Plus: Depreciation and Amortization 2,519 2,360 2,422,238 2,402 Plus: Non Cash Impairment of Assets