Dixie Group Has 20% Sales Increase For 1st Quarter

Wednesday, May 1, 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.

September Hamilton County Unemployment Rate Slightly Increases

County unemployment rates for September 2016, released Thursday, show the rates decreased in 21 counties, increased in 46, and remained the same in 28 counties. Specific county information for September is available on the Internet For the month of September, Davidson County had the state’s lowest major metropolitan rate at 3.9 percent, increasing from 3.8 percent the previous ... (click for more)

Nation's First Interactive Pro Bono Legal Site Based On Tennessee Model

A ground-breaking interactive pro bono website that is being launched across the country had its roots in Tennessee, officials said.  The American Bar Association is in the midst of rolling out ABAFreeLegalAnswers.org , the nation's first interactive pro bono site that will help low income citizens obtain free legal advice. The purpose of the website is to increase access ... (click for more)

School Board Chooses Charlotte Firm For Superintendent Search Firm; Lennon, Testerman Want To Keep Kelly

The County School Board on Thursday night voted 5-4 to choose a Charlotte, N.C., search firm to pick a new county school superintendent. Coleman Lew and Associates was selected over McPherson & Jacobson of Omaha. That vote came after board members Kathy Lennon and David Testerman started the session by saying they are very pleased with Interim Supt. Kirk Kelly and would ... (click for more)

Judge Finds Young Guilty Of Lesser Charge In Fatal Wreck On Highway 58

Judge Tom Greenholtz on Wednesday found William Henry Young guilty of a lesser charge in a fatal traffic accident on Highway 58. The judge, who heard the case without a jury, ruled the 56-year-old former TVA employee guilty of criminally negligent homicide. He had been charged with vehicular homicide. Sentencing will be in December. Judge Greenholtz dismissed charges ... (click for more)

Accountability Doesn't Have To Be A Bad Word

Am I making a difference? Isn’t that the basic question we all ask ourselves, and seek to demonstrate to others?  Ronald Reagan said:  “Some people spend an entire lifetime wondering if they made a difference in the world. But, the Marines don't have that problem.”   We would argue teachers do not have that problem either.    Educators make a huge difference ... (click for more)

Roy Exum: ‘The Right To Bear Arms’

As the worldwide debut of the much-anticipated “Hacksaw Ridge” is set for next weekend, it didn’t take long for the anti-gun fanatics to decry “a war movie.” Mel Gibson, the director of the film that focuses on a conscientious objector Desmond Doss who refused to bear a weapon but saved an estimated 75 lives, was asked about America’s gun problem as he toured to promote the film. ... (click for more)