March 2018
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 Purchased Atlas Carpet Mills – high-end commercial business
• 2014 Purchased Burtco - computerized yarn placement for hospitality
• 2016 Launched Calibré luxury vinyl flooring in Masland Contract
• 2017 Launched Stainmaster® LVF in Masland and Dixie Home
• 2018 Launch engineered wood in our Fabrica brand 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
• 18% of sales
– Top 100 carpet customers
• 31% 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
• “Existing sales
concluded the year on a
softer note, but they were
guided higher these last
12 months by a multi-year
streak of exceptional job
growth, which ignited
buyer demand.”
• “At the same time, market
conditions were far from
perfect. New listings
struggled to keep up with
what was sold very
quickly, and buying
became less affordable in
a large swath of the
country. These two
factors ultimately muted
what should have been a
stronger sales pace.”
Lawrence Yun
Chief Economist
National Association of
Realtors
January 24, 2018
Residential and Commercial
Fixed Investment
7
Rebound in
residential
activity
Commercial
activity is
flat
We expect
2018 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
2016 U.S. Flooring Manufacturers
9
Source: Floor Focus - Flooring includes sales of carpet, rugs, ceramic floor tile, wood, laminate, resilient and rubber
Carpet & Rug Leaders
Flooring $ in
millions Flooring %
Shaw (Berkshire Hathaway) 3,983 19.2%
Mohawk (MHK) 4,892 23.6%
Engineered Floors (Private) 659 3.2%
Interface (TILE) 498 2.4%
Beaulieu (Bought by EF 11-2017) 479 2.3%
Dixie (DXYN) 394 1.9%
Imports & All Others 9,809 47.4%
U.S. Carpet & Rug Market 20,714 100.0%
Dixie versus the Industry
2017 U.S. Carpet & Rug
Market of $10.6 billion
10 Source: Floor Covering Weekly and Dixie Group estimate
2017 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 Brand Positioning
The Dixie Group
13
T
O
T
A
L
M
A
R
K
E
T
:
S
Q
U
A
R
E
Y
A
R
D
S
OR
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AL
E
S
DO
L
L
A
R
S
Dixie Home Fabrica
INDUSTRY AVERAGE PRICE / SQ YD FOR CARPETS AND RUGS
$0 $14 $21 $28 $35 $42 $49
Note: Market share data based on internal company estimates – Industry average price based on sales reported through industry sources
$8
Masland
ESTIMATED WHOLESALE MARKET PRICE FOR CARPETS
AND RUGS: VOLUME AND PRICE POINTS
Price Point Dixie Market Share
< $ 6.00 per SY 0%
$ 6.01 - $10.00 per SY 1%
$10.01 - $15.00 per SY 4%
> $15.00 per SY 27%
All Price Points 5%
Dixie Group High-End Residential Sales
All Residential Brands
Masland
Dixie
Home
Fabrica
14
Sales by Brand for 2017
Dixie Group High-End Residential Sales
All Brands
Retailer
Designer
Mass
Merchant
Builder
Commercial
Specialty -
OEM
15
Sales by Channel for 2017
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 24% 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 31% 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
– Calibré Luxury Vinyl Tile
21
Hospitality
Corporate
Education
Store
Planning
Gov't
Health Care
Other
22
Sales by Channel for 2017
Channels: Interior Design Specifier and Commercial End User
Dixie Group Sales
$ in millions
23
331 321
283
205
231
270 266
345
407
422
397
412
0
50
100
150
200
250
300
350
400
450
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
Net Sales
*2016 had 53 weeks.
Sales & Operating Income
$ in millions
24 Note: Non-GAAP reconciliation starting on slide 27
Annual Y 2007 Y 2008 Y 2009 Y 2010 Y 2011 Y 2012 Y 2013 Y 2014 Y 2015 Y 2016 Y2017
Net Sales 321 283 203 231 270 266 344 407 422 397 412
Net Income (Loss) 6.2 (31.5) (42.2) (4.7) 1.0 (0.9) 5.3 (1.4) (2.4) (5.3) (9.6)
Operating Income 16.7 (28.5) (45.4) (2.6) 5.7 1.8 8.9 (5.2) 2.0 (3.4) 4.0
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) 4.6
EBITDA 29.2 (14.7) (32.1) 8.4 14.8 11.2 18.7 16.9 15.9 10.0 16.6
Non-GAAP Adjusted EBITDA 29.7 15.5 5.3 10.3 14.5 13.2 26.5 17.7 19.0 11.5 17.5
Quarterly Q2 2015 Q3 2015 Q4 2015 Q1 2016 Q2 2016 Q3 2016 Q4 2016 Q1 2017 Q2 2017 Q3 2017 Q4 2017
Net Sales 110.0 108.9 107.8 89.2 105.3 100.3 102.6 97.5 107.2 102.7 105.1
Net Income (Loss) 0.5 0.1 (0.5) (4.8) 1.7 0.5 (2.7) (0.6) 1.1 (0.6) (9.5)
Operating Income 2.2 1.3 1.2 (5.8) 3.4 1.9 (2.9) 0.6 3.2 0.8 (0.6)
Non-GAAP Adjusted Op. Income 3.1 1.9 1.9 (4.4) 3.8 1.9 (3.3) 0.6 3.2 0.8 0.0
EBITDA 5.8 4.9 4.4 (2.4) 6.8 5.3 0.3 3.8 6.2 4.0 2.7
Non-GAAP Adjusted EBITDA 6.7 5.5 5.1 (0.9) 7.1 5.3 0.0 3.8 6.3 4.0 3.4
Change Year over Year Q2 2015 Q3 2015 Q4 2015 Q1 2016 Q2 2016 Q3 2016 Q4 2016 Q1 2017 Q2 2017 Q3 2017 Q4 2017
Net Sales 2.0 (0.1) 3.2 (6.6) (4.6) (8.6) (5.2) 8.3 1.9 2.4 2.5
Net Sales % Change 1.9% -0.1% 3.1% -6.9% -4.2% -7.9% -4.8% 9.3% 1.8% 2.3% 2.4%
Net Income (Loss) 1.1 0.3 4.7 (2.3) 1.2 0.5 (2.2) 4.2 (0.6) (1.1) (6.8)
O erating Income 1.6 0.4 5.7 (3.2) 1.2 0.7 (4.1) 6.5 (0.2) (1.1) 2.3
Non-GAAP Adjusted Op. Income 0.2 (1.5) 2.6 (2.5) 0.8 0.0 (5.2) 5.1 (0.6) (1.1) 3.3
EBITDA 2.0 0.7 6.9 (3.2) 1.0 0.4 (4.1) 6.2 (0.6) (1.3) 2.4
Non-GAAP Adjusted EBITDA 0.6 (1.2) 2.3 (2.7) 0.4 (0.2) (5.1) 4.8 (0.8) (1.3) 3.3
Note: 2011 and 2016 have 53 operating weeks, all other periods had 52 operating weeks
Current Business Conditions
2017 Initiatives
• We have consolidated our two commercial brands, Masland Contract and Atlas,
under one management, sharing operations in marketing, product development
and manufacturing but maintaining distinct sales forces.
• We announced our Profit Improvement Program with savings in 2018 of over
$3 million.
• We are taking advantage of the opportunities created in the west coast market
with added retailer and builder penetration and increased service flexibility
with the acquisition of the Porterville, CA yarn facility.
• Masland Contract has launched both the new Calibré and Quiet Down luxury
vinyl flooring product lines.
• We have placed over 1,300 displays of Stainmaster PetProtect® luxury vinyl
flooring through our Masland and Dixie Home residential brands.
• Our floorcovering sales for the first 8 weeks of the quarter were flat compared
to this period in 2017. Our residential sales are positive relative to 2017 while
our commercial sales are behind from this same period last year.
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 number 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)
The Company defines Non-GAAP earnings per Share (EPS) for the Jobs Cut and Tax Act of 2017 as Net Income less discontinued operations minus the effect of
the tax act and divided by the number of fully diluted shares. (Note 9)
Non-GAAP Information
28
Non-GAAP Gross Profit 2011 2012 2013 2014 2015 2016 2017
Net Sales 270,110 266,372 344,374 406,588 422,484 397,453 412,462
Gross Profit 65,506 65,372 85,569 95,497 106,231 95,425 101,213
Plus: Business integration expense - 1,383 4,738 445 - - -
Plus: Amortization of inventory step up - - 367 606 - - -
Non-GAAP Adj. Gross Profit (Note 1) 65,506 66,755 90,674 96,548 106,231 95,425 101,213
Gross Profit as % of Net Sales 24.3% 24.5% 24.8% 23.5% 25.1% 24.0% 24.5%
Non-GAAP Adj. Gross Profit % of Net Sales 24.3% 25.1% 26.3% 23.7% 25.1% 24.0% 24.5%
Non-GAAP S,G&A 2011 2012 2013 2014 2015 2016 2017
Net Sales 270,110 266,372 344,374 406,588 422,484 397,453 412,462
Selling and Administrative Expense 60,667 63,489 76,221 93,182 100,422 96,983 96,171
Plus: Business integration expense - - (1,706) (1,429) - - -
Less: Acquisition expenses - (318) (350) (789) - - -
Non-GAAP Adj. Selling and Admin. Expense 60,667 63,171 74,164 90,964 100,422 96,983 96,171
S,G&A as % of Net Sales 22.5% 23.8% 22.1% 22.9% 23.8% 24.4% 23.3%
Non-GAAP S,G&A as % of Net Sales (Note 2) 22.5% 23.7% 21.5% 22.4% 23.8% 24.4% 23.3%
Twelve Months Ended
29
Non-GAAP Operating Income 2011 2012 2013 2014 2015 2016 2017
Net Sales 270,110 266,372 344,374 406,588 422,484 397,453 412,462
Operating income (loss) 5,668 1,815 8,855 (5,236) 1,990 (3,415) 3,965
Plus: Acquisition expenses - 318 350 789 - - -
Plus: Amortization of inventory step up - - 367 606 - - -
Plus: Business integration expense - 1,383 6,616 1,874 - - -
Plus: Profit improvement plans (563) - - 5,514 2,946 1,456 636
Plus: Impairment of assets - - 195 1,133 - - -
Plus: Impairment of goodwill - - - - - - -
Non-GAAP Adj. Operating Income (Loss) (Note 3) 5,105 3,516 16,384 4,681 4,936 (1,959) 4,601
Operating income as % of net sales 2.1% 0.7% 2.6% -1.3% 0.5% -0.9% 1.0%
Adjusted operating income as a % of net sales 1.9% 1.3% 4.8% 1.2% 1.2% -0.5% 1.1%
Non-GAAP Income from Continuing Operations 2011 2012 2013 2014 2015 2016 2017
Net income (loss) as reported 986 (927) 5,291 (1,402) (2,426) (5,278) (9,555)
Less: (Loss) from discontinued, net tax (286) (275) (266) (2,075) (148) (71) (233)
Income (loss) from Continuing Operations 1,272 (653) 5,557 673 (2,278) (5,207) (9,322)
Plus: Business integration expense - 1,383 6,616 1,874 - - -
Plus: Profit improvement plans (563) - - 5,514 2,946 1,456 636
Plus: Amortization of inventory step up - - 367 606 - - -
Plus: Acquisition expenses - 318 350 789 - - -
Less: Gain on purchase of business - - - (11,110) - - -
Plus: Impairment of assets - - 195 1,133 - - -
Plus: Impairment of goodwill - - - - - - -
Plus: Tax effect of above 214 (646) (2,861) 453 (1,119) (553) (242)
Plus: Tax credits, rate change and valuation allowance - - (1,847) - - - 8,169
Non-GAAP Adj. (Loss) / Inc from Cont. Op's (Note 4) 923 402 8,377 (68) (451) (4,304) (758)
Adj diluted EPS from Cont. Op's 0.07 0.03 0.65 (0.00) (0.03) (0.28) (0.05)
Wt'd avg. common shares outstanding - diluted 12,623 12,638 12,852 14,382 15,536 15,638 15,699
30
Non-GAAP EBIT and EBITDA 2011 2012 2013 2014 2015 2016 2017
Net income (loss) as reported 986 (927) 5,291 (1,402) (2,426) (5,278) (9,555)
Less: (Loss) from discontinued, net tax (286) (275) (266) (2,075) (148) (71) (233)
Plus: Taxes 684 (401) (576) 1,055 (714) (3,622) 7,509
Plus: Interest 3,470 3,146 3,756 4,301 4,935 5,392 5,739
Non-GAAP Adjusted EBIT (Note 5) 5,426 2,092 8,737 6,029 1,943 (3,437) 3,925
Plus: Depreciation and amortization 9,650 9,396 10,263 12,908 14,120 13,515 12,947
Non-GAAP EBITDA from Cont Op 15,075 11,488 18,999 18,937 16,063 10,078 16,872
Plus: Acquisition expenses - 318 350 789 - - -
Plus: Amortization of inventory step up - - 367 606 - - -
Less: Gain on purchase of business - - - (11,110) - - -
Plus: Business integration expense - 1,383 6,616 1,874 - - -
Plus: Profit improvement plans (563) - - 5,514 2,946 1,456 636
Plus: Impairment of assets - - 195 1,133 - - -
Plus: Impairment of goodwill - - - - - - -
Non-GAAP Adj. EBITDA (Note 5) 14,512 13,189 26,528 17,743 19,009 11,534 17,508
Non-GAAP Adj. EBITDA as % of Net Sales 5.4% 5.0% 7.7% 4.4% 4.5% 2.9% 4.2%
Management estimate of severe weather (not in above) - - - 1,054 - - -
Non-GAAP Free Cash Flow 2011 2012 2013 2014 2015 2016 2017
Non-GAAP Adjusted EBIT (from above) 5,426 2,092 8,737 6,029 1,943 (3,437) 3,925
Times: 1 - Tax Rate = EBIAT 3,364 1,297 5,417 3,738 1,205 (2,131) 2,433
Plus: Depreciation and amortization 9,650 9,396 10,263 12,908 14,120 13,515 12,947
Plus: Non Cash Impairment of Assets, Goodwill - - 195 1,133 - - -
Minus: Net change in Working Capital 9,589 10,786 17,714 11,546 (1,970) (16,905) 23,386
Non-GAAP Cash from Operations 3,425 (93) (1,839) 6,234 17,295 28,289 (8,006)
Minus: Capital Expenditures 6,735 4,052 13,257 32,825 12,230 5,331 13,582
Minus: Business / Capital acquisitions - 6,961 1,863 9,331 - - -
Non-GAAP Free Cash Flow (Note 6) (3,310) (11,106) (16,959) (35,922) 5,065 22,958 (21,588)
31
Net Sales as
Adjusted Net Sales
December 31, Extra December 31, December 30, As Adjusted
2016 Week 2016 2017 Difference % Change
Year 2017
Net Sales as Adjusted 397,453$ (5,380)$ 392,073$ 412,462$ 20,389$ 5.2%
December 30,
Adjusted for Tax Cut and Jobs Act of 2017 (Note 9) 2017
Net Loss as reported (9,555)
Loss from discountinued operations (233)
Loss from continuing operations (9,322)
Impact of tax act 8,169
Loss from Cont Ops less affect of Tax Cuts and Jobs Act of 2017 (1,153)
Diluted shares 15,699
Adj loss per diluted share ex Tax Act (0.07)$
