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.


Luke Neder Joins Dale Buchanan And Associates

Dale Buchanan and Associates has hired attorney Luke H. Neder.  The firm, which specializes in social security disability matters, recruited Mr. Neder to develop a personal injury and workers’ compensation practice.  Mr. Neder has experience representing plaintiffs in personal injury actions in a variety of contexts.  He has represented insurance companies and ... (click for more)

New And Used Vehicle Sales Rise In March

New vehicle sales in Hamilton County rose to 993 in March, and used vehicle sales rose to 4,052, according to figures from the County Clerk's office.  That compares to 1,044 new vehicles sold and 3,952 used vehicles sold in March of last year. Used sales in March were the highest of the year.  Totals for March included 432 new cars and 561 new trucks sold. They included ... (click for more)

Autopsy Says 5-Year-Old Whitwell Boy Died Of Blunt Force Trauma

An autopsy on five-year-old Lucas Dillon of Whitwell says he died of blunt force trauma. The TBI is investigating the death, which is being treated as a homicide. The child, who lived on Jewell Lane Road. was injured on Saturday and died in a hospital on Monday. Lucas was a student at Whitwell Head Start. . (click for more)

Officials Expect MLK Boulevard Mural To Be Big Draw; Artist Apprentices To Be Hired For Project

Officials said Tuesday they expect a massive mural planned on a tall MLK Boulevard building by a renowned muralist will be a big draw for the area. City Councilman Moses Freeman said, "This is going to be a destination point. People are going to come here to see it. I guarantee it." He added, "She's world-renowned. We're going to be famous by having her work here." The ... (click for more)

Physicians Thank Their Patients On Doctor’s Day

March 30 has been set aside as National Doctors’ Day since 1933 as a time to recognize the contributions made by our physicians. While the recognition is appreciated, our greatest satisfaction comes from caring for our patients.  For 132 years, the Chattanooga-Hamilton County Medical Society has been the physicians’ voice as we worked together to improve health of our community. ... (click for more)

Roy Exum: Look At My April Garden

On this April Fool’s Day, as I take my monthly stroll through my virtual garden, there are gorgeous flowers and there are weeds, which appear to be trying harder than the flowers. So let’s see what we find before searching for “The Prize Egg” on Sunday. A FLOWER to the New York cab driver who told a young writer, “Always remember that everyone you meet knows something that you ... (click for more)