March 2021 Investor Presentation Contact: Allen Danzey CFO The Dixie Group Phone: 706-876-5865 allen.danzey@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 • 2012 Purchased Colormaster dye house and Crown 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 Launched engineered wood in our Fabrica brand • 2018 Unified Atlas and Masland Contract into single business unit • 2019 Launched TRUCOR™ and TRUCOR Prime™ LVF in Dixie Home and Masland 3
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 • Deep cleaning and sanitizing on a frequent basis in facilities and offices • Daily temperature checks prior to the start of work in all facilities and offices COVID-19 Recovery • Temporary pay reductions were eliminated in Q4 2020 • Most furloughs have been eliminated to support strengthening business conditions • Continue to closely monitor and manage spending and operating expenses 4 Financing Initiatives In the fourth quarter: • We entered into a new $75 million, 5 year senior secured Revolving Credit Facility • Dixie entered into two fixed asset loans in the combined principal amount of $25 million. • Availability under the new senior secured facility was $45 million as of October 30.
COVID-19 Recovery 5
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
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, dependent upon consumer confidence, the health of the stock market and the wealth effect. • Commercially • The market is driven by remodeling of offices, schools, retail and hospitality as demonstrated by the investment in non-residential fixed structures. • Our commercial business 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 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 '14 Jan '15 Jan '16 Jan '17 Jan '18 Jan '19 Jan '20 • “Home sales rose in December, and for 2020 as a whole, we saw sales perform at their highest levels since 2006, despite the pandemic. What's even better is that this momentum is likely to carry into the new year, with more buyers expected to enter the market. • Although mortgage rates are projected to increase, they will continue to hover near record lows at around 3%. Moreover, expect economic conditions to improve with additional stimulus forthcoming and vaccine distribution already underway." Lawrence Yun Chief Economist National Association of Realtors January 22, 2021
9 Remodeling Activity
Household Formations 10
Residential and Commercial Fixed Investment 11
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 (Private) 1,079 5.1% Interface (TILE) 668 3.1% Dixie (DXYN) 376 1.8% Imports & All Others 8,770 41.1% Total 21,364 100.0%
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%
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 14
Dixie Group High-End Residential Sales All Residential Brands Masland Dixie Home Fabrica TRUCOR 15 Sales by Brand 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.
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 business has been profitable each year since 2010 17
• 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™ SPC and TRUCOR Prime™ WPC flooring – EnVision 6,6™ nylon – PetProtect ® nylon 18
• 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 flooring – Wool products in both tufted and woven constructions – EnVision 6,6™ nylon 19
• 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 wool products in tufted and woven constructions 20
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 “main street commercial” through retailers • Our Masland Residential and AtlasMasland sales forces – Commercial design firms and select commercial retailers 21
• 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 high relative humidity environments – The Crafted Collection with Sustaina™ cushion modular carpet backing, both PVC and polyeurathane free – over 80% recycled content – Calibré Luxury Vinyl Tile 22
Hospitality Corporate Education Store Planning Gov't Health Care Other 23 Sales by Channel for 2020 Channels: Interior Design Specifier and Commercial End User
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.
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 Income 1.8 8.9 (5.2) 2.0 (3.4) 4.0 (15.6) 21.3 (2.9) Non-GAAP Adjusted Op. Income 3.5 16.4 5.1 4.9 (2.0) 4.6 (1.1) 1.8 3.7 EBITDA 11.2 18.7 16.9 15.9 10.0 16.6 (3.1) 32.9 7.0 Non-GAAP Adjusted EBITDA 13.2 26.5 18.1 19.0 11.5 17.5 11.4 13.7 13.8 Quarterly Q4 2018 Q12019 Q22019 Q32019 Q42019 Q12020 Q22020 Q32020 Q42020 Net Sales 98.2 88.6 100.4 95.4 90.1 80.6 60.8 85.9 88.6 Net Income (Loss) (13.7) (6.7) (1.2) (2.6) 25.7 (2.7) (7.1) 0.9 (0.3) Operating Income (12.8) (4.9) 0.6 (1.0) 26.7 (1.3) (5.6) 2.6 1.5 Non-GAAP Adjusted Op. Income (2.4) (2.8) 2.5 0.1 2.0 (1.3) (0.9) 3.3 2.6 EBITDA (9.5) (1.8) 3.3 1.9 29.4 1.6 (3.1) 5.2 3.4 Non-GAAP Adjusted EBITDA 0.8 0.4 5.3 3.0 5.0 1.7 1.6 6.0 4.4 Change Year over Year Q4 2018 Q12019 Q22019 Q32019 Q42019 Q12020 Q22020 Q32020 Q42020 Net Sales (6.9) (10.3) (6.0) (6.1) (8.0) (8.0) (39.6) (9.5) (1.5) Net Sales % Change -6.6% -10.4% -5.7% -6.0% -8.2% -9.1% -39.4% -10.0% -1.7% Net Income (Loss) (4.2) (3.8) 0.6 0.4 39.4 4.0 (5.8) 3.4 (26.0) Operating Income (12.2) (3.3) 0.7 0.1 39.4 3.5 (6.2) 3.6 (25.2) Non-GAAP Adjusted Op. Income (2.5) (1.5) 0.5 (0.6) 4.4 1.5 (3.4) 3.3 0.6 EBITDA (12.2) (3.4) 0.4 0.0 38.9 3.4 (6.5) 3.3 (26.0) Non-GAAP Adjusted EBITDA (2.5) (1.5) 0.3 (0.7) 4.2 1.4 (3.7) 3.0 (0.6) Note: 2016 has 53 operating weeks, all other periods had 52 operating weeks
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 and operating efficiencies in 2020, allowed us to end the year with borrowing availability of $43.3 million under our new Senior Revolving Credit Facility. • Operational improvements and cost reductions generated higher gross profit margins. Our gross profit margin for the year ended December 26, 2020 was 24.2% compared with 23.0% in the year ended December 28, 2019. • Our residential division has gained market share and built momentum during the fourth quarter of 2020. • Early 2021 shows continued strength with business trending approximately 15% ahead of prior year. • We have announced a price increase for April 1, 2021 to offset increases in raw materials, transportation and labor costs. • For 2021, we are investing in new product and talent. We are introducing over 40 new soft surface styles and over 60 new hard surface SKUs. • We have hired a retail channel leader, a decorative segment leader and additional hard surface sales people. • We no longer have any goodwill or intangibles on our balance sheet. • We have announced price increases of approximately 5% on residential and commercial carpet products. 26
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 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 and intangibles, 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 and intangibles, 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 and intangibles, 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) Due to the COVID-19 pandemic the Company paid certain non-service wages and related health insurance charges for the safety, welfare and retention of our employees. The expenses were incurred through the second, third and fourth quarter of 2020 and were partially offset by the employee retention credit allowed under the CARES Act. (Note 10)
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 - - Plus: Inventory write off for PIP - - - - - - 2,701 572 - Plus: Business integration expense 1,383 4,738 445 - - - - - - Plus: Amortization of inventory step up - 367 606 - - - - - - Non-GAAP Adj. Gross Profit (Note 1) 66,755 90,674 96,548 106,231 95,425 101,213 90,142 86,777 76,456 Gross Profit as % of Net Sales 24.5% 24.8% 23.5% 25.1% 24.0% 24.5% 21.5% 23.0% 24.2% Non-GAAP Adj. Gross Profit % of Net Sales 25.1% 26.3% 23.7% 25.1% 24.0% 24.5% 22.3% 23.2% 24.2% Non-GAAP S,G&A 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 Selling and Administrative Expense 63,489 76,221 93,182 100,422 96,983 96,171 92,472 83,825 75,731 Plus: Business integration expense - (1,706) (1,429) - - - - - - Less: Acquisition expenses (318) (350) (789) - - - - - - Non-GAAP Adj. Selling and Admin. Expense 63,171 74,164 90,964 100,422 96,983 96,171 92,472 83,825 75,731 S,G&A as % of Net Sales 23.8% 22.1% 22.9% 23.8% 24.4% 23.3% 22.8% 22.4% 24.0% Non-GAAP S,G&A as % of Net Sales (Note 2) 23.7% 21.5% 22.4% 23.8% 24.4% 23.3% 22.8% 22.4% 24.0% Twelve Months Ended
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: Legal Settlement - - - - - - 1,514 - - Plus: Inventory write off for PIP - - - - - - 2,701 572 - Plus: Profit improvement plans - - 5,889 2,946 1,456 636 3,167 5,019 1,382 Plus: COVID-19 Recovery Plan - - - - - - - - 2,370 Plus: COVID-19 Related Expenses (Note 10) - - - - - - - - 2,117 Plus: Financing Expenses - - - - - - - - 744 Plus: Impairment of assets - 195 1,133 - - - 1,164 (25,111) - Plus: Impairment of goodwill and intangibles - - - - - - 5,545 - - Non-GAAP Adj. Operating Income (Loss) (Note 3) 3,516 16,384 5,056 4,936 (1,959) 4,601 (1,083) 1,830 3,694 Operating income as % of net sales 0.7% 2.6% -1.3% 0.5% -0.9% 1.0% -3.9% 5.7% -0.9% Adjusted operating income as a % of net sales 1.3% 4.8% 1.2% 1.2% -0.5% 1.1% -0.3% 0.5% 1.2% Non-GAAP Income from Continuing Operations 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) Income (loss) from Continuing Operations (653) 5,557 673 (2,278) (5,207) (9,323) (21,479) 15,619 (9,086) Plus: Unusual Workers Comp - - - - - - 450 - - Plus: Legal Settlement - - - - - - 1,514 - - Plus: Inventory write off for PIP - - - - - - 2,701 572 - Plus: Profit improvement plans - - 5,889 2,946 1,456 636 3,167 5,019 1,382 Plus: COVID-19 Recovery Plan - - - - - - - - 2,370 Plus: COVID-19 Related Expenses (Note 10) - - - - - - - - 2,117 Plus: Financing Expenses - - - - - - - - 744 Plus: Impairment of assets - 195 1,133 - - - 1,164 (25,111) - Plus: Impairment of goodwill and intangibles - - - - - - 5,545 - - Plus: Tax effect of above (646) (2,861) 311 (1,119) (553) (242) - - - Plus: Tax credits, rate change and valuation allowance - (1,847) - - - 8,169 - (14) (342) Non-GAAP Adj. (Loss) / Inc from Cont. Op's (Note 4) 402 8,377 165 (451) (4,304) (759) (6,938) (3,915) (2,815) Adj diluted EPS from Cont. Op's 0.03 0.65 0.01 (0.03) (0.28) (0.05) (0.44) (0.25) (0.18) Wt'd avg. common shares outstanding - diluted 12,638 12,852 14,382 15,536 15,638 15,699 15,764 15,926 15,316
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) (3,622) 7,510 (831) (657) (312) Plus: Interest 3,146 3,756 4,301 4,935 5,392 5,740 6,490 6,444 5,803 Non-GAAP Adjusted EBIT (Note 5) 2,092 8,737 6,029 1,943 (3,437) 3,927 (15,820) 21,405 (3,595) Plus: Depreciation and amortization 9,396 10,263 12,908 14,120 13,515 12,947 12,653 11,803 10,746 Non-GAAP EBITDA from Cont Op 11,488 18,999 18,937 16,063 10,078 16,874 (3,167) 33,208 7,151 Plus: Legal Settlement - - - - - - 1,514 - - Plus: Inventory write off for PIP - - - - - - 2,701 572 - Plus: Profit improvement plans - - 5,889 2,946 1,456 636 3,167 5,019 1,382 Plus: COVID-19 Recovery Plan - - - - - - - - 2,370 Plus: COVID-19 Related Expenses (Note 10) - - - - - - - - 2,117 Plus: Financing Expenses - - - - - - - - 744 Plus: Impairment of assets - 195 1,133 - - - 1,164 (25,111) - Plus: Impairment of goodwill and intangibles - - - - - - 5,545 - - Non-GAAP Adj. EBITDA (Note 5) 13,189 26,528 18,118 19,009 11,534 17,510 11,374 13,688 13,764 Non-GAAP Adj. EBITDA as % of Net Sales 5.0% 7.7% 4.5% 4.5% 2.9% 4.2% 2.8% 3.7% 4.4% Management estimate of severe weather (not in above) - - 1,054 - - - - - - Non-GAAP Free Cash Flow 2012 2013 2014 2015 2016 2017 2018 2019 2020 Non-GAAP Adjusted EBIT (from above) 2,092 8,737 6,029 1,943 (3,437) 3,927 (15,820) 21,405 (3,595) Times: 1 - Tax Rate = EBIAT 1,297 5,417 3,738 1,205 (2,131) 2,435 (15,820) 21,405 (3,595) Plus: Depreciation and amortization 9,396 10,263 12,908 14,120 13,515 12,947 12,653 11,803 10,746 Plus: Non Cash Impairment of Assets, Goodwill - 195 1,133 - - - 6,709 (25,111) - Minus: Net change in Working Capital 10,786 17,714 11,546 (1,970) (16,905) 23,386 (8,578) (8,298) (9,368) Non-GAAP Cash from Operations (93) (1,839) 6,234 17,295 28,289 (8,004) 12,120 16,395 16,519 Minus: Capital Expenditures 4,052 13,257 32,825 12,230 5,331 13,582 4,441 1,416 3,074 Minus: Business / Capital acquisitions 6,961 1,863 9,331 - - - - - - Non-GAAP Free Cash Flow (Note 6) (11,106) (16,959) (35,922) 5,065 22,958 (21,586) 7,679 14,979 13,445
