The Dixie Group Reports Third Quarter 2019 Operating Results and Balance Sheet Changes
DALTON, Ga., Nov. 07, 2019 (GLOBE NEWSWIRE) -- The Dixie Group, Inc. (NASDAQ: DXYN) today reported financial results for the quarter ended September 28, 2019. For the third quarter of 2019, the Company had net sales of $95,447,000 as compared to $101,562,000 in the same period in 2018, a decrease of 6.0%. In the third quarter of 2019 our sales, exclusive of sales through the mass merchant ...
For the third quarter of 2019, the Company had a loss from continuing operations of
Unusual expenses during the period included
Early in the fourth quarter of 2019, we sold our
Commenting on the results,
Our EnVision 6,6™ program continues gaining traction in the market. We continue to expand this program which brings exceptional value to the customer. We have seen growth in our west coast offering through both Masland California Classics and the Dixie Home Pacific Living Quick Ship Collection. Both of these programs are serviced out of our
Our residential luxury vinyl flooring and wood sales experienced a greater than 40% increase in sales in the third quarter of the current fiscal year as compared to the same period in the prior year. During the third quarter of 2019, we had great traction with our new TRUCOR™ SPC offering, including placement of over 2,000 displays in the retail community, and by the end of the quarter, TRUCOR™ represented a significant percentage of our total luxury vinyl sales. During the fourth quarter of 2019, we are expanding our TRUCOR™ line with the addition of TRUCOR Prime™, a WPC construction, offered by our
Our commercial carpet product sales in the third quarter were down less than 1% while the industry we believe was down in the low single digits as compared to the same period in the prior year. Our commercial luxury vinyl flooring sales were up over 40% comparing the third quarter of 2019 with the same quarter in 2018.
Our commercial division has launched a number of new offerings for 2019 with particular emphasis on modular carpet tile offerings. We are especially excited about the launch of our Sustaina™ modular tile backing system. This system is a PVC and polyurethane free cushion modular carpet tile backing with very high recycled content. The product is breathable and able to be installed in environments up to 99% relative humidity and up to a pH of 12 when utilizing our custom formulated Sustaina™ 99 adhesive. The product provides the cushion backing benefits of increased under foot comfort, appearance retention and sound absorption. We have just launched “Crafted” with our Sustaina™ backing system. This product has an 81.5% total recycled content, the highest available on the market today. These unique products, differentiating us in the market place and fulfilling the needs of our discerning environmentally conscious customers, will accelerate our growth.
The sale of our
Our gross profit for the third quarter of 2019 was 22.1% of net sales as compared to a gross profit of 21.5% in the third quarter of 2018. Included in our cost of sales for the period was
Selling and administrative expenses for the third quarter of 2019 were 22.0% of net sales, a decrease of 0.7 percentage points from our level of 22.7% in the third quarter of 2018. The decrease in our selling and administrative costs is primarily due to the Profit Improvement Plan we initiated in the fourth quarter of 2017 as we consolidated our two commercial management businesses.
We had
Our receivables increased
Interest expense for the year to date was up due to higher interest rates from a year ago. Our debt decreased
Our sales excluding sales to the mass merchant channel for the first 5 weeks of the quarter are approximately 3.9% behind the same period in 2018.
A listen-only Internet simulcast and replay of Dixie's conference call may be accessed with appropriate software at the Company's website at www.thedixiegroup.com/investor/. The simulcast will begin at approximately
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
Consolidated Condensed Statements of Operations
(unaudited; in thousands, except earnings per share)
Three Months Ended | Nine Months Ended | |||||||||||||
2019 | 2018 | 2019 | 2018 | |||||||||||
$ | 95,447 | $ | 101,562 | $ | 284,448 | $ | 306,858 | |||||||
Cost of sales | 74,373 | 79,675 | 220,962 | 238,247 | ||||||||||
GROSS PROFIT | 21,074 | 21,887 | 63,486 | 68,611 | ||||||||||
Selling and administrative expenses | 21,036 | 23,033 | 63,810 | 69,954 | ||||||||||
Other operating expense (income), net | 37 | (845 | ) | 145 | 421 | |||||||||
Facility consolidation and severance expenses, net | 1,043 | 529 | 4,859 | 936 | ||||||||||
Impairment of assets | — | 349 | 3 | 349 | ||||||||||
OPERATING LOSS | (1,042 | ) | (1,179 | ) | (5,331 | ) | (3,049 | ) | ||||||
Interest expense | 1,648 | 1,664 | 5,085 | 4,840 | ||||||||||
Other income, net | (4 | ) | (3 | ) | (42 | ) | — | |||||||
Loss from continuing operations before taxes | (2,686 | ) | (2,840 | ) | (10,374 | ) | (7,889 | ) | ||||||
Income tax (benefit) provision | (109 | ) | 82 | 25 | (110 | ) | ||||||||
Loss from continuing operations | (2,577 | ) | (2,922 | ) | (10,399 | ) | (7,779 | ) | ||||||
Income (loss) from discontinued operations, net of tax | 23 | (40 | ) | (43 | ) | 94 | ||||||||
NET LOSS | $ | (2,554 | ) | $ | (2,962 | ) | $ | (10,442 | ) | $ | (7,685 | ) | ||
BASIC EARNINGS (LOSS) PER SHARE: | ||||||||||||||
Continuing operations | $ | (0.16 | ) | $ | (0.19 | ) | $ | (0.66 | ) | $ | (0.49 | ) | ||
Discontinued operations | 0.00 | (0.00 | ) | (0.00 | ) | 0.01 | ||||||||
Net loss | $ | (0.16 | ) | $ | (0.19 | ) | $ | (0.66 | ) | $ | (0.48 | ) | ||
DILUTED EARNINGS (LOSS) PER SHARE: | ||||||||||||||
Continuing operations | $ | (0.16 | ) | $ | (0.19 | ) | $ | (0.66 | ) | $ | (0.49 | ) | ||
Discontinued operations | (0.00 | ) | 0.00 | (0.00 | ) | 0.01 | ||||||||
Net loss | $ | (0.16 | ) | $ | (0.19 | ) | $ | (0.66 | ) | $ | (0.48 | ) | ||
Weighted-average shares outstanding: | ||||||||||||||
Basic | 15,899 | 15,786 | 15,864 | 15,754 | ||||||||||
Diluted | 15,899 | 15,786 | 15,864 | 15,754 | ||||||||||
Consolidated Condensed Balance Sheets
(in thousands)
2019 | 2018 | ||||||
ASSETS | (Unaudited) | ||||||
Current Assets | |||||||
Cash and cash equivalents | $ | 19 | $ | 18 | |||
Receivables, net | 44,980 | 42,542 | |||||
Inventories, net | 98,507 | 105,195 | |||||
Prepaids and other current assets | 7,174 | 5,204 | |||||
Total Current Assets | 150,680 | 152,959 | |||||
Property, Plant and Equipment, Net | 78,594 | 84,111 | |||||
Operating Lease Right-Of-Use Assets | 7,795 | — | |||||
Other Assets | 17,140 | 15,708 | |||||
TOTAL ASSETS | $ | 254,209 | $ | 252,778 | |||
LIABILITIES AND STOCKHOLDERS' EQUITY | |||||||
Current Liabilities | |||||||
Accounts payable | $ | 21,192 | $ | 17,779 | |||
Accrued expenses | 33,724 | 30,852 | |||||
Current portion of long-term debt | 7,100 | 7,794 | |||||
Current portion of operating lease liabilities | 1,821 | — | |||||
Total Current Liabilities | 63,837 | 56,425 | |||||
Long-Term Debt | 117,049 | 120,251 | |||||
Operating Lease Liabilities | 6,390 | — | |||||
Other Long-Term Liabilities | 19,039 | 17,118 | |||||
Stockholders' Equity | 47,894 | 58,984 | |||||
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $ | 254,209 | $ | 252,778 |
Use of Non-GAAP Financial Information:
(in thousands)
The Company believes that non-GAAP performance measures, which management uses in evaluating the Company's business, may provide users of the Company's financial information with additional meaningful bases for comparing the Company's current results and prior period results, as these measures reflect factors that are unique to one period relative to the comparable period. However, the non-GAAP performance measures should be viewed in addition to, not as an alternative for, the Company's reported results under accounting principles generally accepted in
Non-GAAP Summary | |||||||||||
Three Months Ended | |||||||||||
2019 | 2018 | ||||||||||
Net loss as reported | $ | (2,554 | ) | $ | (2,962 | ) | |||||
Income (loss) from discontinued operations | 23 | (40 | ) | ||||||||
Loss from continuing operations | (2,577 | ) | (2,922 | ) | |||||||
Inventory write-downs related to Profit Improvement Plan | 82 | 963 | |||||||||
Facility consolidation and severance expenses, net | 1,043 | 529 | |||||||||
Impairment of assets | — | 349 | |||||||||
Tax effect | — | — | |||||||||
Profit Improvement Plan related expenses | 1,125 | 1,841 | |||||||||
Loss | $ | (1,452 | ) | $ | (1,081 | ) | |||||
Diluted shares | 15,899 | 15,786 | |||||||||
Adjusted loss per diluted share | $ | (0.09 | ) | $ | (0.07 | ) | |||||
Further non-GAAP reconciliation data are available at www.thedixiegroup.com under the Investor Relations section.
Sale of Susan Street Facility | |||
2019 | |||
Approximate Gain on Sale of Susan Street Facility | $ | 25,000 | |
Weighted Average Shares Outstanding for the Quarter | 15,899 | ||
Gain Per Share | $ | 1.57 |
CONTACT: | ||
Chief Financial Officer | ||
706-876-5814 | ||
jon.faulkner@dixiegroup.com |
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