May 2017
Investor Presentation
Contact:
Jon Faulkner
CFO
The Dixie Group
Phone: 706-876-5814
jon.faulkner@dixiegroup.com
Exhibit 99.1
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 of demand for the products produced by the Company. Other
factors that could affect the Company’s results include, but are not limited to,
raw material and transportation costs related to petroleum prices, the cost
and availability of capital, and general economic and competitive conditions
related to the Company’s business. Issues related to the availability and price
of energy may adversely affect the Company’s operations. Additional
information regarding these and other factors and uncertainties may be found
in the Company’s filings with the Securities and Exchange Commission.
• General information set forth in this presentation concerning market
conditions, sales data and trends in the U.S. carpet and rug markets are
derived from various public and, in some cases, non-public sources. Although
we believe such data and information to be accurate, we have not attempted
to independently verify such information.
2
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
• 2007 Launched wool products in Masland & Fabrica – high-end designers
• 2012 Purchased Colormaster dye house – lower cost
• 2012 Purchased Crown rugs – wool rugs
• 2013 Purchased Robertex - wool carpet manufacturing
• 2014 Expanded and realigned manufacturing to increase capacity
• 2014 Purchased Atlas Carpet Mills – high-end commercial business
• 2014 Purchased Burtco - computerized yarn placement for hospitality
• 2016 Completed restructuring of manufacturing facilities
• 2017 Entered the hard surface market in Calibre & Stainmaster LVT 3
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
• 15% of sales
– Top 100 carpet customers
• 29% of sales
4
5
Dixie Group Drivers
What affects our business?
The market dynamics:
• Residentially
• The market is driven by home sales and remodeling.
• New construction is a smaller effect.
• Dixie is driven by the wealth effect.
• The stock market and consumer confidence.
• Commercially
• The market is driven by remodeling of offices,
schools, retail and hospitality as demonstrated by the
investment in non-residential fixed structures.
• Dixie is driven by upper-end remodeling in offices,
retail remodeling, higher education, and upper-end
hospitality that primarily involves a designer.
New and Existing Home Sales
Seasonally Adjusted Annual Rate
6
New 1,000 Existing 1,000
Source: National Association of Realtors (existing) and census.gov/newhomesales
3,000
3,500
4,000
4,500
5,000
5,500
6,000
250
300
350
400
450
500
550
600
650
700
750
800
Jan '13 Jan '14 Jan '15 Jan '16 Jan '17
• “The early returns so far
this spring buying season
look very promising as a
rising number of
households dipped their
toes into the market and
were successfully able to
close on a home last
month."
• "Although finding available
properties to buy
continues to be a
strenuous task for many
buyers, there was enough
of a monthly increase in
listings in March for sales
to muster a strong gain."
Lawrence Yun
Chief Economist
National Association of
Realtors
April 21, 2017
Residential and Commercial
Fixed Investment
7
Rebound in
residential
activity
Commercial
activity is
flat
We expect
2017 to
continue the
rebound of
residential
fixed
investment
as a percent
of GDP
The Industry as
compared to The Dixie Group
8
Source: U.S. Bureau of Economic Analysis and Company estimates
2015 U.S. Flooring Manufacturers
9
Source: Floor Focus Carpet includes sales of carpet as broadloom, modular tile and rugs
Flooring includes sales of carpet, rugs, ceramic floor tile, wood, laminate, resilient and rubber
Carpet & Rug Leaders
Carpet $
in millions Carpet %
Flooring $
in millions Flooring %
Shaw (Berkshire Hathaway) $ 3,200 29.5% 3,929 19.1%
Mohawk (MHK) $ 2,653 24.5% 4,585 22.3%
Engineered Floors (Private) $ 540 5.0% 540 2.6%
Interface (TILE) $ 520 4.8% 520 2.5%
Beaulieu (Private) $ 504 4.6% 524 2.6%
Dixie (DXYN) $ 419 3.9% 419 2.0%
Imports & All Others $ 3,016 27.7% 10,009 48.9%
U.S. Carpet & Rug Market $ 10,852 100% 20,526 100.0%
Dixie versus the Industry
2017 First Quarter U.S. Carpet &
Rug Market of $10.5 billion
10 Source: Floor Covering Weekly and Dixie Group estimate
2017 First Quarter Dixie sales
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Carpet Growth
Dixie Market Share in Dollars and Units
11
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”
with emphasis on the most beautiful
and up-to-date styling and design
– Be quality focused with excellent
reputation for building excellent
products and standing behind what
we make
– And, unlike much of the industry,
not manufacturing driven
12
Residential Market Positioning
The Dixie Group
13
BROADLOOM RESIDENTIAL SALES
T
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A
L
M
A
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K
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Q
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ESTIMATED TOTAL WHOLESALE MARKET
FOR CARPETS AND RUGS:
VOLUME AND PRICE POINTS
Positioning of Dixie Brands by Price Point Segment
Dixie Home Fabrica
INDUSTRY
AVERAGE
PRICE/ SQ YD
$0 $14 $21 $28 $35 $42 $49
Note: Industry average price is based on sales reported through industry sources.
Excerpt from KSA Study dated May 2004, Titled "KSA Assessment of Dixie's Residential and Contract Carpet Businesses", commissioned by The Dixie Group, Inc.
$8
Masland
FOCUSED NATIONAL SUPPLIER IN THE UPPER
END OF THE SOFT FLOOR COVERING MARKET
Dixie Group High-End Residential Sales
All Residential Brands
Masland
Dixie
Home
Fabrica
14
Sales by Brand for 2017 First Quarter
Dixie Group High-End Residential Sales
All Brands
Retailer
Designer
Mass Merchant
Builder
Commercial
Specialty - OEM
15
Sales by Channel for 2017 First Quarter
The company believes that a significant portion of retail sales also involve a designer
• Well-styled moderate to upper priced
residential broadloom line
– Known for differentiated pattern
and color selection
• Dixie Home provides a “full line” to
retailers
– Sells specialty and mass merchant
retailers
• Growth initiatives
– Stainmaster® Tru Soft TM Fiber
Technology
– Stainmaster® PetProtect ® Fiber
Technology
16
• Leading high-end brand with
reputation for innovative styling,
design and color
• High-end retail / designer driven
– Approximately 26% of sales
directly involve a designer
– Hand crafted and imported rugs
• Growth initiative
– Stainmaster® TruSoft™ Fiber
Technology
– Stainmaster® PetProtect ® Fiber
Technology
– Wool products in both tufted and
woven constructions
17
• Premium high-end brand
– “Quality without Compromise”
• Designer focused
– Approximately 32% of sales directly
involve a designer
– Hand crafted and imported rugs
• Growth initiatives
– Stainmaster® TruSoft™ Fiber
Technology
– Fabrica Permaset dyeing process
“unlimited color selection in wool”
18
Commercial Market Positioning
The Dixie Group
• We focus on the “high-end specified
soft floorcovering contract market”
• Our Atlas brand
– Designer driven focused on the
fashion oriented market space
• Our Masland Contract brand
– Broad product line for diverse
commercial markets
• Our Masland Hospitality brand
– Custom products for the hospitality
industry
• Our Masland Residential sales force
– Sells “main street commercial”
through retailers 19
• Atlas is our premium
commercial brand
• Dedicated to serving the
architect and designer needing
finer goods
• Focus is on the corporate
market through high fashion
broadloom and modular carpet
tile offerings
• With state-of-the-art tufting
machines Atlas can quickly
manufacture both custom and
running line products
20
• 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
– Masland Contract Modular Carpet
Tile
– Masland Hospitality using
“computerized yarn placement”
technology
– Calibre Luxury Vinyl Tile
21
Hospitality
Corporate
Education
Store
Planning
Gov't
Health Care
Other
22
Sales by Channel for 2017 First Quarter
Channels: Interior Design Specifier and Commercial End User
Dixie Group Sales
$ in millions
23 Includes Atlas Carpet Mills since March 2014 and Burtco since September 2014
331 321
283
205
231
270 266
345
407
422
397 406
0
50
100
150
200
250
300
350
400
450
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 TTM
Q1 2017
Net Sales
Sales & Operating Income
$ in millions
24 Note: Non-GAAP reconciliation starting on slide 27
Y 2007 Y 2008 Y 2009 Y 2010 Y 2011 Y 2012 Y 2013 Y 2014 Y 2015 Y 2016
TTM
Q1 17
Net Sales 321 283 203 231 270 266 344 407 422 397 406
Net Income (Loss) 6.2 (31.5) (42.2) (4.7) 1.0 (0.9) 5.3 (1.4) (2.4) (5.3) (1.1)
Operating Income 16.7 (28.5) (45.4) (2.6) 5.7 1.8 8.9 (5.2) 2.0 (3.4) 3.1
Non-GAAP Adjusted Op. Income 16.7 1.5 (8.4) (1.0) 5.1 3.5 16.4 4.7 4.9 (2.0) 3.1
EBITDA 29.2 (14.7) (32.1) 8.4 14.8 11.2 18.7 16.9 15.9 10.0 16.2
Non-GAAP Adjusted EBITDA 29.7 15.5 5.3 10.3 14.5 13.2 26.5 17.7 19.0 11.5 16.3
Q3 2014 Q4 2014 Q1 2015 Q2 2015 Q3 2015 Q4 2015 Q1 2016 Q2 2016 Q3 2016 Q4 2016 Q1 2017
Net Sales 109.0 104.6 95.9 110.0 108.9 107.8 89.2 105.3 100.3 102.6 97.5
Net Income (Loss) (0.2) (5.2) (2.5) 0.5 0.1 (0.5) (4.8) 1.7 0.5 (2.7) (0.6)
Operating Income 0.8 (4.4) (2.7) 2.2 1.3 1.2 (5.8) 3.4 1.9 (2.9) 0.6
Non-GAAP Adjusted Op. Income 3.4 (0.6) (1.9) 3.1 1.9 1.9 (4.4) 3.8 1.9 (3.3) 0.6
EBITDA 4.2 (2.6) 0.9 5.8 4.9 4.4 (2.4) 6.8 5.3 0.3 3.8
Non-GAAP Adjusted EBITDA 6.8 2.8 1.7 6.7 5.5 5.1 (0.9) 7.1 5.3 0.0 3.8
Change Year over Year Q3 2014 Q4 2014 Q1 2015 Q2 2015 Q3 2015 Q4 2015 Q1 2016 Q2 2016 Q3 2016 Q4 2016 Q1 2017
Net Sales 19.1 9.2 10.8 2.0 (0.1) 3.2 (6.6) (4.6) (8.6) (5.2) 8.3
Net Sales % Change 21.2% 9.6% 12.7% 1.9% -0.1% 3.1% -6.9% -4.2% -7.9% -4.8% 9.3%
Net Income (Loss) (1.6) (6.8) (7.1) 1.1 0.3 4.7 (2.3) 1.2 0.5 (2.2) 4.2
Operating Income 0.8 (4.4) (2.7) 2.2 0.4 5.7 (3.2) 1.2 0.7 (4.1) 6.5
Non-GAAP Adjusted Op. Income (1.3) (4.5) (1.0) 0.2 (1.5) 2.6 (2.5) 0.8 0.0 (5.2) 5.1
EBITDA 4.2 (2.6) 0.9 5.8 0.7 6.9 (3.2) 1.0 0.4 (4.1) 6.2
Non-GAAP Adjusted EBITDA (0.7) (3.5) (0.4) 0.6 (1.2) 2.3 (2.7) 0.4 (0.2) (5.1) 4.8
Note: 2011 and 2016 have 53 operating weeks, all other periods had 52 operating weeks
Current Business Conditions
2017 Initiatives
• We have improved our quality, delivery and production throughput as our
new associates are now trained and productive.
• We continue to reduce costs through intelligent investments in select
areas to improve throughput, cost and quality.
• We have rebounded in first quarter of 2017 from a weak election year.
• We refinanced our long term debt, pushing out the maturity to 2021.
• Masland Contract launched the new Calibré luxury vinyl tile line.
• We have launched Stainmaster PetProtect® luxury vinyl tile through our
Masland and Dixie Home residential brands with its “Claw Scratch Shield”
and “Pet Traction Action” coating .
• For the first four weeks of the Q2, our floorcovering sales are up low-
single digits on a year over year basis but are up mid-single digits as
compared to this same time in the prior year after adjusting for the
Easter holiday. Our total sales are flat as compared to the prior year but
would be up low-single digits on a similarly holiday adjusted basis.
25
Non-GAAP Information
27
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 current results and results in a prior period, as these measures
reflect factors that are unique to one period relative to the comparable period. However, the non-GAAP performance measures should be viewed in addition
to, not as an alternative for, the Company's reported results under accounting principles generally accepted in the United States.
The Company defines Adjusted Gross Profit as Gross Profit plus manufacturing integration expenses of new or expanded operations, plus acquisition expense
related to the fair market write up of inventories, plus one time items so defined (Note 1)
The Company defines Adjusted S,G&A as S,G&A less manufacturing integration expenses included in selling, general and administrative, less direct acquisition
expenses, less one time items so defined. (Note 2)
The Company defines Adjusted Operating Income as Operating Income plus manufacturing integration expenses of new or expanded operations, plus
acquisition expense related to the fair market write up of inventories, plus facility consolidation and severance expenses, plus acquisition related expenses, plus
impairment of assets, plus impairment of goodwill, plus one time items so defined. (Note 3)
The company defines Adjusted Income from Continuing Operations as net income plus loss from discontinued operations net of tax, plus manufacturing
integration expenses of new or expanded operations, plus facility consolidation and severance expenses, plus acquisition related expenses, plus impairment of
assets, plus impairment of goodwill, plus one time items so defined , all tax effected. (Note 4)
The Company defines Adjusted EBIT as net income plus taxes and plus interest. The Company defines Adjusted EBITDA as Adjusted EBIT plus depreciation and
amortization, plus manufacturing in integration expenses of new or expanded operations, plus facility consolidation and severance expenses, plus acquisition
related expenses, plus impairment of assets, plus impairment of goodwill, plus one time items so defined. (Note 5)
The company defines Free Cash Flow as Net Income plus interest plus depreciation plus non-cash impairment of assets and goodwill minus the net change in
working capital minus the tax shield on interest minus capital expenditures. The change in net working capital is the change in current assets less current
liabilities between periods. (Note 6)
The company defines Non-GAAP Earnings per Share (EPS) as the adjusted operating income less Interest and other expense, tax adjusted at a 35% rate, and
divided by the umber of fully diluted shares. (Note 7)
The Company defines Net Sales as Adjusted as net sales less the last week of sales in a 53 week fiscal year. (Note 8)
Non-GAAP Information
Non-GAAP Gross Profit Q1 2016 Q2 2016 Q3 2016 Q4 2016 Q1 2017 2013 2014 2015 2016
Net Sales 89,234 105,316 100,297 102,606 97,541 344,374 406,588 422,484 397,453
Gross Profit 19,506 28,242 25,831 21,846 25,161 85,569 95,497 106,231 95,425
Plus: Business integration expense - - - - - 4,738 445 - -
Plus: Amortization of inventory step up - - - - - 367 606 - -
Non-GAAP Adj. Gross Profit (Note 1) 19,506 28,242 25,831 21,846 25,161 90,674 96,548 106,231 95,425
Gross Profit as % of Net Sales 21.9% 26.8% 25.8% 21.3% 25.8% 24.8% 23.5% 25.1% 24.0%
Non-GAAP Adj. Gross Profit % of Net Sales 21.9% 26.8% 25.8% 21.3% 25.8% 26.3% 23.7% 25.1% 24.0%
Non-GAAP S,G&A Q1 2016 Q2 2016 Q3 2016 Q4 2016 Q1 2017 2013 2014 2015 2016
Net Sales 89,234 105,316 100,297 102,606 97,541 344,374 406,588 422,484 397,453
Selling and Administrative Expense 23,666 24,320 23,774 25,223 24,481 76,221 93,182 100,422 96,983
Plus: Business integration expense - - - - - (1,706) (1,429) - -
Less: Acquisition expenses - - - - - (350) (789) - -
Non-GAAP Adj. Selling and Admin. Expense 23,666 24,320 23,774 25,223 24,481 74,164 90,964 100,422 96,983
S,G&A as % of Net Sales 26.5% 23.1% 23.7% 24.6% 25.1% 22.1% 22.9% 23.8% 24.4%
Non-GAAP S,G&A as % of Net Sales (Note 2) 26.5% 23.1% 23.7% 24.6% 25.1% 21.5% 22.4% 23.8% 24.4%
Twelve Months EndedThree Months Ended
30
Non-GAAP Operating Income Q1 2016 Q2 2016 Q3 2016 Q4 2016 Q1 2017 2013 2014 2015 2016
Net Sales 89,234 105,316 100,297 102,606 97,541 344,374 406,588 422,484 397,453
Operating income (loss) (5,840) 3,403 1,916 (2,894) 628 8,855 (5,236) 1,990 (3,415)
Plus: Acquisition expenses - - - - - 350 789 - -
Plus: Amortization of inventory step up - - - - - 367 606 - -
Plus: Business integration expense - - - - - 6,616 1,874 - -
Plus: Facility consolidation expense 1,413 403 (1) (359) - - 5,514 2,946 1,456
Plus: Impairment of assets - - - - - 195 1,133 - -
Plus: Impairment of goodwill - - - - - - - - -
Non-GAAP Adj. Operating Income (Loss) (Note 3) (4,427) 3,806 1,915 (3,253) 628 16,384 4,681 4,936 (1,959)
Operating income as % of net sales -6.5% 3.2% 1.9% -2.8% 0.6% 2.6% -1.3% 0.5% -0.9%
Adjusted operating income as a % of net sales -5.0% 3.6% 1.9% -3.2% 0.6% 4.8% 1.2% 1.2% -0.5%
Non-GAAP Income from Continuing Operations Q1 2016 Q2 2016 Q3 2016 Q4 2016 Q1 2017 2013 2014 2015 2016
Net income (loss) as reported (4,767) 1,677 534 (2,722) (604) 5,291 (1,402) (2,426) (5,278)
Less: (Loss) from discontinued, net tax (10) 62 (39) (84) (29) (266) (2,075) (148) (71)
Income (loss) from Continuing Operations (4,757) 1,615 573 (2,638) (575) 5,557 673 (2,278) (5,207)
Plus: Business integration expense - - - - - 6,616 1,874 - -
Plus: Facility consolidation expense 1,413 403 (1) (359) - - 5,514 2,946 1,456
Plus: Amortization of inventory step up - - - - - 367 606 - -
Plus: Acquisition expenses - - - - - 350 789 - -
Less: Gain on purchase of business - - - - - - (11,110) - -
Plus: Impairment of assets - - - - - 195 1,133 - -
Plus: Impairment of goodwill - - - - - - - - -
Plus: Tax effect of above (537) (153) 0 136 - (2,861) 453 (1,119) (553)
Plus: Prior years tax credits and val. allowance - - - - - - - - -
Non-GAAP Adj. (Loss) / Inc from Cont. Op's (Note 4) (3,881) 1,865 572 (2,861) (575) 10,224 (68) (451) (4,304)
Adj diluted EPS from Cont. Op's (0.25) 0.12 0.04 (0.18) (0.04) 0.80 (0.00) (0.03) (0.28)
Wt'd avg. common shares outstanding - diluted 15,600 15,783 15,744 15,659 15,673 12,852 14,382 15,536 15,638
Twelve Months EndedThree Months Ended
31
Non-GAAP EBIT and EBITDA Q1 2016 Q2 2016 Q3 2016 Q4 2016 Q1 2017 2013 2014 2015 2016
Net income (loss) as reported (4,767) 1,677 534 (2,722) (604) 5,291 (1,402) (2,426) (5,278)
Less: (Loss) from discontinued, net tax (10) 62 (39) (84) (29) (266) (2,075) (148) (71)
Plus: Taxes (2,415) 451 27 (1,685) (163) (576) 1,055 (714) (3,622)
Plus: Interest 1,324 1,333 1,312 1,423 1,362 3,756 4,301 4,935 5,392
Non-GAAP Adjusted EBIT (Note 5) (5,848) 3,399 1,912 (2,900) 624 8,737 6,029 1,943 (3,437)
Plus: Depreciation and amortization 3,498 3,325 3,410 3,282 3,210 10,263 12,908 14,120 13,515
Non-GAAP EBITDA from Cont Op (2,350) 6,724 5,322 382 3,834 18,999 18,937 16,063 10,078
Plus: Acquisition expenses - - - - - 350 789 - -
Plus: Amortization of inventory step up - - - - - 367 606 - -
Less: Gain on purchase of business - - - - - - (11,110) - -
Plus: Business integration expense - - - - - 6,616 1,874 - -
Plus: Facility consolidation expense 1,413 403 (1) (359) - - 5,514 2,946 1,456
Plus: Impairment of assets - - - - - 195 1,133 - -
Non-GAAP Adj. EBITDA (Note 5) (937) 7,127 5,321 23 3,834 26,528 17,743 19,009 11,534
Non-GAAP Adj. EBITDA as % of Net Sales -1.1% 6.8% 5.3% 0.0% 3.9% 7.7% 4.4% 4.5% 2.9%
Non-GAAP Free Cash Flow Q1 2016 Q2 2016 Q3 2016 Q4 2016 Q1 2017 2013 2014 2015 2016
Non-GAAP Adjusted EBIT (from above) (5,848) 3,399 1,912 (2,900) 624 8,737 6,029 1,943 (3,437)
Times: 1 - Tax Rate = EBIAT (3,626) 2,107 1,185 (1,798) 387 5,417 3,738 1,205 (2,131)
Plus: Depreciation and amortization 3,498 3,325 3,410 3,282 3,210 10,263 12,908 14,120 13,515
Plus: Non Cash Impairment of Assets, Goodwill - - - - - 195 1,133 - -
Minus: Net change in Working Capital (4,671) (3,330) 927 (9,831) 10,906 17,714 11,546 (1,970) (16,905)
Non-GAAP Cash from Operations 4,543 8,762 3,668 11,315 (7,309) (1,839) 6,234 17,295 28,289
Minus: Capital Expenditures 1,218 1,020 1,357 1,736 3,778 13,257 32,825 12,230 5,331
Minus: Business / Capital acquisitions - - - - - 1,863 9,331 - -
Non-GAAP Free Cash Flow (Note 6) 3,325 7,742 2,311 9,579 (11,087) (16,959) (35,922) 5,065 22,958
Twelve Months EndedThree Months Ended
