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.



AOC Launching New Indigent Representation Payment System In February

The Administrative Office of the Courts will modernize its disbursement system for indigent representation payments to attorneys, interpreters, expert witnesses, and investigators in February 2018. The new AOC Claims and Payment (ACAP) system will replace the Indigent Claim Entry (ICE) system and will allow users to more accurately and efficiently input and track claims for payment.The ... (click for more)

December State Revenues Exceed Expectations

Tennessee Department of Finance and Administration Commissioner Larry Martin announced Thursday that revenues for December posted higher than expected and exceeded the monthly revenues from the previous year.  State revenues for December were $1.4 billion, which is a growth of 11.34 percent and $139.9 million more than December 2016.   “Total revenues in December ... (click for more)

Hamilton County Sheriff's Deputy In Officer-Involved Shooting At Lakesite

A Hamilton County Sheriff's Office deputy was involved in an officer involved shooting in the Lakesite area on Friday morning.   Authorities said it happened around 9:35 a.m. near the 1900 block of Wilkes Avenue.   Deputies were called on "an unwanted party."   There was a confrontation with deputies and a man at the mobile home was shot.   ... (click for more)

EPB Video As Percentage Of Fiber Customers Going Down, But That's Fine With Management

With more and more video customers turning to streaming options, EPB's video is dropping as a percentage of overall fiber customers. But that's fine with EPB management, knowing that all that video streaming needs a wide fiber pipeline to go through. EPB is positioned with the best "gig" service. Greg Eaves, chief financial officer, said 65 percent of EPB fiber customers now ... (click for more)

DACA Or Amnesty To Become The Majority?

As we have the political drama that we see in D.C. let’s be honest about what DACA is all about. We understand as the liberal policies of abortion, dependency on the government and an anti-American globalist / progressive agenda that many have come to realize these policies no longer represent their core beliefs and have left a certain party. Without an influx of new dependency ... (click for more)

Roy Exum: The Saturday Funnies

It is said that a 15-year-old in Minnesota, where just like the rest of the United States prayer in schools is prohibited, was tasked with writing an essay. He turned in his paper and, as it was returned with an A-plus, it is only fitting that something this clever should begin this week’s edition of The  Saturday  Funnies. Those who enjoy the Funnies understand that ... (click for more)