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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 
FORM 8-K

CURRENT REPORT
Pursuant to Section 13 OR 15(d) of The Securities Exchange Act of 1934
 
Date of Report (Date of earliest event reported): May 2, 2024
 
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THE DIXIE GROUP, INC.
(Exact name of registrant as specified in its charter)
 
Tennessee0-258562-0183370
(State or other jurisdiction of incorporation)(Commission File Number)(I.R.S. Employer Identification No.)

475 Reed RoadDaltonGeorgia30720
(Address of principal executive offices)(Zip Code)
 
(706)876-5800
(Registrant's telephone number, including area code)

(Former name or former address, if changed since last report.)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
 
o   Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
o   Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
o   Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
o   Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading Symbol(s)Name of each exchange on which registered
Common Stock, $3 Par ValueDXYNNASDAQ Stock Market, LLC

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company          o 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o 



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Item 2.02. Results of Operations and Financial Condition.
On May 2, 2024, The Dixie Group, Inc. issued a press release reporting results for the first quarter ended March 30, 2024.
Item 9.01. Financial Statements and Exhibits.
(c)    Exhibits
(99.1) Press Release, dated May 2, 2024

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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
 
Date: May 2, 2024THE DIXIE GROUP, INC.
 By: /s/ Allen L. Danzey  
Allen L. Danzey
Chief Financial Officer


Exhibit 99.1
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CONTACT:    Allen Danzey
        Chief Financial Officer
        706-876-5865
        allen.danzey@dixiegroup.com


THE DIXIE GROUP REPORTS RESULTS FOR FIRST QUARTER OF 2024

DALTON, GEORGIA (May 2, 2024) -- The Dixie Group, Inc. (NASDAQ: DXYN) today reported financial results for the quarter ended March 30, 2024.

Net sales in the first quarter of 2024 were $65.3 million compared to $67.1 million in the same period of the prior year
The gross profit margin for the three months of the first quarter of 2024 was 24.2% of net sales compared to 26.6% in the first quarter of 2023
The Company began operations of its new extrusion line in the first quarter of 2024
The Company announces board approval of stock repurchase plan

For the first quarter of 2024, the Company had net sales of $65,254,000 as compared to $67,084,000 in the same quarter of 2023. The Company had an operating loss of $857,000 compared to an operating income of $306,000 in the first quarter of 2023. The net loss from continuing operations in the first quarter of 2024 was $2,410,000 or $0.16 per diluted share. In 2023, the net loss from continuing operations for the first quarter was $1,551,000 or $0.11 per diluted share.

Commenting on the results, Daniel K. Frierson, Chairman and Chief Executive Officer, said, “Our net sales for the quarter were negatively impacted by high interest rates affecting the housing and home remodeling market and the impact on the economy from continued inflation. Overall, our net sales during the quarter were 2.7% below prior year while the industry, we believe, was down approximately 8%. Due to this lower demand, we saw less favorable margins in the first part of the quarter as lower volume resulted in under absorbed fixed costs in our manufacturing plants. By the end of the quarter, in the month of March, net sales were slightly ahead of the same month in the prior year and our operating margins for the month were more in line with prior year and our expectations.

We are excited about the start of our nylon extrusion line in North Georgia. The internal production of raw materials will provide us with lower costs, as compared to our current external purchasing, and it will provide us with a continuity of supply, protecting us and our customers from potential supply disruptions. Our initial focus has been on extruding white, dyeable nylon which allows us to present long, beautiful color lines that stand out in a residential market that has moved to a solution dyed polyester sea of sameness. In support of this, we launched a color marketing campaign, Step Into Color, which connects retailers and consumers with a world of color options, including custom colors that are prevalent in Fabrica, but also available in our other soft surface divisions.
We launched 14 new carpet styles in the first quarter, including 11 EnVision Nylon styles in our high-end divisions. Our Masland introductions are a great mix of high fashion and mid-price points to drive volume in the current challenging market conditions. In our Fabrica brand, we launched a trio of styles paying tribute to the brand’s 50 year history. Homage, Tribute, and Adulation share a common color line of 50 colors which are named after key Fabrica styles from the last 50 years. These beautiful styles are available at a sharp price point and will become go to styles for Fabrica for years to come. The remainder of our soft and hard surface introductions for 2024 will be released in the second quarter.

Our new product offerings will help us continue to maintain sales volume in a difficult market. Additionally, we plan to reduce year over year costs by $10 million in 2024 through cost savings related to our extrusion operations and the reduction of other controllable costs. We believe, once interest rates come back down and consumer confidence
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The Dixie Group Reports First Quarter 2024 Results
Page 2
May 2, 2024

returns, the housing market along with remodeling activity, will rebound strongly, driven by pent up demand.” Frierson concluded.
The gross profit in the first quarter of 2024 was 24.2% of net sales compared to 26.6% of net sales in the first quarter of 2023. Our gross profit margins in 2024 were negatively impacted by under absorbed fixed costs as the result of lower volume in our plants due to lower sales demand in the first part of the quarter. Selling and administrative costs in the first quarter of 2024 were slightly below the prior year in expense dollars but higher as a percent of net sales, 25.1% in 2024 as compared to 24.5% in the same quarter of 2023.
On our balance sheet, receivables increased $4.5 million from the balance at fiscal year end 2023 due to higher sales in the last month of the first quarter 2024 as compared to the seasonally lower sales volume in the last month of the fiscal year 2023. The net inventory value at the end of the first quarter of 2024 was $1.2 million lower than the fiscal year end 2023 balance of $76.2 million. Combined accounts payable and accrued expenses were $8.7 million higher at the end of the first quarter of 2024 as compared to the December 2023 balance. This increase was primarily driven by higher payables and accruals for raw materials to replenish inventory and meet higher production needs in preparation for an expected increase in demand in the second quarter. In the first quarter of 2024, capital expenditures were $7.0 million, of which $0.5 million was a cash outlay during the quarter with the remainder having been paid in deposits in previous years. Capital expenditures for the full fiscal year 2024 are planned at $9.4 million, with $2.9 million being funded by cash investment within the year and the remaining $6.5 million from cash spent through deposits in prior years. Interest expense was $1.5 million in the first quarter of 2024 compared to $1.9 million in the first quarter of 2023. The lower interest expense in 2024 was the result of lower average debt balance within the quarter. Our debt increased by $1.9 million in the first quarter of 2024 driven primarily by the planned cash investment in new product introductions in the first quarter. Our availability under our line of credit with our senior lending facility was $15.0 million at the end of the first quarter of 2024.

Subsequent to the end of the first quarter, the Company's Board of Directors approved the repurchase of up to $2.8 million of the Company's common stock. This share repurchase authorization reflects the Company's ongoing commitment to improving the investment value of the Company's stock.

In the first four weeks of the second quarter in 2024, net sales are approximately 4% above the comparable period in the prior year and order entry is approximately 8% below the same period in the prior year. The second quarter is typically a stronger sales level than the first quarter due to seasonality and our new products hitting retail floors.

This press release contains forward-looking statements. Forward-looking statements are based on estimates, projections, beliefs and assumptions of management and the Company at the time of such statements and are not guarantees of performance. Forward-looking statements 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, availability of raw material and transportation costs related to petroleum prices, the cost and availability of capital, integration of acquisitions, ability to attract, develop and retain qualified personnel 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 risk factors and uncertainties may be found in the Company's filings with the Securities and Exchange Commission. The Company disclaims any obligation to update or revise any forward-looking statements based on the occurrence of future events, the receipt of new information, or otherwise.


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The Dixie Group Reports First Quarter 2024 Results
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May 2, 2024

THE DIXIE GROUP, INC.
Consolidated Condensed Statements of Operations
(unaudited; in thousands, except earnings (loss) per share)
 Three Months Ended
 March 30,
2024
April 1,
2023
NET SALES$65,254 $67,084 
Cost of sales49,445 49,251 
GROSS PROFIT15,809 17,833 
Selling and administrative expenses16,372 16,409 
Other operating expense, net52 68 
Facility consolidation and severance expenses, net242 1,050 
OPERATING INCOME (LOSS)(857)306 
Interest expense1,532 1,858 
Other (income) expense, net(14)
Loss from continuing operations before taxes(2,394)(1,538)
Income tax provision16 13 
Loss from continuing operations(2,410)(1,551)
Loss from discontinued operations, net of tax(84)(207)
NET LOSS$(2,494)$(1,758)
BASIC EARNINGS (LOSS) PER SHARE:
Continuing operations$(0.16)$(0.11)
Discontinued operations(0.01)(0.01)
Net loss$(0.17)$(0.12)
DILUTED EARNINGS (LOSS) PER SHARE:
Continuing operations$(0.16)$(0.11)
Discontinued operations(0.01)(0.01)
Net loss$(0.17)$(0.12)
Weighted-average shares outstanding:
Basic14,850 14,676 
Diluted14,850 14,676 


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The Dixie Group Reports First Quarter 2024 Results
Page 4
May 2, 2024

THE DIXIE GROUP, INC.
Consolidated Condensed Balance Sheets
(in thousands)
 March 30,
2024
December 30,
2023
ASSETS(Unaudited)
Current Assets
Cash and cash equivalents$55 $79 
Receivables, net28,225 23,686 
Inventories, net75,041 76,211 
Prepaid and other current assets10,803 12,154 
Current assets of discontinued operations260 265 
Total Current Assets114,384 112,395 
Property, Plant and Equipment, Net37,660 31,368 
Operating Lease Right-Of-Use Assets28,187 28,962 
Other Assets18,039 17,130 
Long-Term Assets of Discontinued Operations1,391 1,314 
TOTAL ASSETS$199,661 $191,169 
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
Accounts payable$21,819 $13,935 
Accrued expenses17,438 16,598 
Current portion of long-term debt3,794 4,230 
Current portion of operating lease liabilities3,713 3,654 
Current liabilities of discontinued operations1,172 1,137 
Total Current Liabilities47,936 39,554 
Long-Term Debt, Net80,610 78,290 
Operating Lease Liabilities25,081 25,907 
Other Long-Term Liabilities15,500 14,591 
Long-Term Liabilities of Discontinued Operations3,618 3,536 
Stockholders' Equity26,916 29,291 
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY$199,661 $191,169 



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