Dixie Group Has 20% Sales Increase For 1st Quarter

Wednesday, May 01, 2013

The Dixie Group, Inc. (NASDAQ:DXYN) today reported financial results for the first quarter ended March 30, 2013, including a 20 percent rise in sales.

In the first quarter of 2013, the company had sales of $75,440,000 and income from continuing operations of $651,000, or $0.05 per diluted share, compared with sales of $62,851,000 and a loss from continuing operations of $104,000, or $0.

01 per diluted share for the first quarter of 2012. The sales increase as compared to the year ago period was 20 percent.

Commenting on the results, Daniel K. Frierson , chairman and chief executive officer, said, “The first quarter typically is the slowest and most difficult quarter for our business. However, Dixie had a year-over-year sales improvement of 20 percent with sales growth in all areas of the business. Our sales growth in the residential business was 21 percent higher than the same period in the prior year with notable growth in our mass merchant area. We believe that the residential market, in contrast, grew in the low single digits. Our commercial business increased 13 percent with particularly strong growth in our modular carpet tile area. This increase was in comparison, we believe, to low single digit growth in the commercial market.

“We are seeing the results of the investments we have made over the last several years in new products and sales opportunities. The residential growth was a combination of sales momentum in our mass merchant area, increases from the successful integration of the Gulistan products purchased late last year, growth of our Stainmaster TruSoft and SolarMax products and growth in our wool business. In the residential market, we are seeing a strong market shift to softer products, as demonstrated by the growth of our Stainmaster TruSoft products, and thus an increased opportunity to gain floor space at retail as the industry moves towards this new consumer preference. We have expanded our residential sales force to take advantage of these added market opportunities. Sales for all of our residential brands were up for the quarter and all channels were showing strength as we entered into the second quarter. In the commercial market, we are pleased with the response to our expanded SPEAK modular carpet tile and newly launched FIT office remodel collections. These high performance products give us added breadth in our line and fulfill the need for high styled modular and broadloom carpet products in this market. In the commercial sector, we have expanded our sales force to give us more strategic focus in select markets. Our continued investment in products, processes and people, we believe, will position us to continue to outperform the industry at the high end of the marketplace.

"The quarter saw gross profit margins at 24.4 percent, in line with expectations considering the integration costs of the Crown Rug and Colormaster continuous dye house acquisitions from the previous quarter, as well as the continued expansion of our Eton tufting operation. These integration costs negatively impacted our gross profit margin by $794,000 during the quarter or about one percentage point. We had higher selling and administrative costs as we continued our accelerated investment in new products. Our sampling expenses were approximately $968,000 higher during the quarter as compared to the year ago period. Unusual items during the quarter included a non-taxable insurance gain of $202,000 and a $157,000 tax deduction taken during the quarter for 2012 tax credits passed by Congress in January 2013.

“Working capital increased by $2,923,000 during the quarter due to the seasonal rise in preparation for the spring selling season. Our inventory turns improved 12 percent versus the same period in the prior year. Capital leases and expenditures were $2,580,000, while depreciation and amortization was $2,513,000 for the period. Total debt increased $2,529,000 during the first quarter. Availability under our credit lines was $21.3 million at quarter end. Subsequent to quarter end, we amended and extended our senior credit facility to accommodate the growth in working capital as we take advantage of our expanded sales.

"Though uncertainty surrounds the rate of recovery in the housing sector and potential macro-economic issues affecting consumer confidence, we believe that conditions in the upper-end residential portion of our industry will continue to grow during 2013. The commercial market appears to be healthy with the highest growth in the modular carpet tile segment. We are committed to growing our market share with innovative products, refinement of our manufacturing processes and continued investment in our people,” Frierson concluded.

The company's loss from discontinued operations was $15,000, or $0.00 per diluted share, for the first quarter of 2013, compared with a loss from discontinued operations of $77,000, or $0.00 per diluted share, for the prior year. Including discontinued operations, the Company reported a net income of $636,000, or $0.05 per diluted share, for the first quarter of 2013, compared with a net loss of $181,000, or $0.01 per diluted share, for the year-earlier period.

The Dixie Group (www.thedixiegroup.com) is a leading marketer and manufacturer of carpet and rugs to higher-end residential and commercial customers through the Fabrica International, Masland Carpets, Dixie Home , Masland Contract and Avant brands.


Scam Phone Calls Continue; IRS Identifies Five Easy Ways To Spot Suspicious Calls

The Internal Revenue Service issued a consumer alert today providing taxpayers with additional tips to protect themselves from telephone scam artists calling and pretending to be with the IRS.   These callers may demand money or may say you have a refund due and try to trick you into sharing private information. These con artists can sound convincing when they call. They ... (click for more)

CBL & Associates Properties To Pay Common And Preferred Stock Dividends

CBL & Associates Properties, Inc. Thursday announced that its Board of Directors has declared a quarterly cash dividend for the company’s Common Stock of $0.245 per share for the quarter ending Sept. 30. The dividend is payable on Oct. 15 to shareholders of record as of Sept. 30. The Board also declared a quarterly cash dividend of $0.4609375 per depositary share for the ... (click for more)

Plan Revived For 5-Story Boutique Hotel Next To The Walnut Street Bridge

Plans have been revived for a five-story boutique hotel next to the Walnut Street Bridge. Vision Hospitality Group said the yet-to-be named hotel will provide 90 rooms featuring high-end amenities and exemplary service in the city's art district. Plans for a similar hotel were announced in 2012, but the proposal was later withdrawn. The hotel is slated for 102 Walnut ... (click for more)

Grand Jury Says County Needs To Start "Immediately" On Funding A New County Jail

Members of the Hamilton County Grand Jury said in a final report that the county needs to start "immediately" on funding a replacement for the Hamilton County Jail. The report, read by Foreman Robert Smith, says, "The Jail is near and/or over capacity and understaffed!  Hard-working corrections officers are in constant danger.  Being responsible for 80-100 inmates per ... (click for more)

Better Plan For Walnut Street Hotel

Mitch Patel and his Vision Hospitality Group have unveiled a revised plan for a hotel on Walnut Street. It is much better than the one proposed two years ago. By having no curb cuts on Walnut Street, it makes that special block near the bridge more inviting and safer for pedestrians. Deliveries would be off Riverfront Parkway and hotel access (valet parking) would be off Aquarium ... (click for more)

Thanks For Making The Southern Brewers Festival A Success

Now that the dust has settled I'd like to thank Chattanooga for supporting the Southern Brewers Festival and making it yet another very successful event.    For those who do not know - the SBF benefits the Chattanooga chapter of Kids on the Block and the Chattanooga Community Kitchen.  As a partner helping the SBF with volunteers, sponsorships and the overall production ... (click for more)