The Dixie Group Reports Update on COVID-19 Recovery Plan Along With Q1 2020 Results
DALTON, GA / ACCESSWIRE / May 19, 2020 / The Dixie Group, Inc. (NASDAQ:DXYN) today reported financial results for the first fiscal quarter ended March 28, 2020. For the first quarter of 2020, the Company had net sales of $80,578,000 as compared to $88,606,000 in 2019. For the first quarter of 2020 net sales were down 9.1% as compared to the same quarter in 2019. For the first quarter of 2020, ...
Commenting on the results,
We have reduced our anticipated spending in the current year by approximately
Our residential product sales were down 7.3% for the quarter with the industry, we estimate, being down mid-single digits as compared to the prior year. Our residential sales were the most impacted through our mass merchant sales channel with relatively stronger sales from our traditional flooring retailers up until the crisis hit. Despite the impact of the COVID-19 pandemic, our residential hard surface sales were still up over 80% from the first quarter of 2019. All brands in specialty retail were strong. Hard surface sales were gaining a lot of momentum in both TRUCOR™ and Fabrica Wood. Our 2020 winter market season was our best in many years. Dealer sentiment was very positive, and our new products and innovations were very well received. We showcased more than 50 new soft surface products including two key innovations. First, we introduced the TECHnique Collection, a new tufting innovation which delivers a clean crisp, woven like visual for beautiful patterns. We will utilize TECHnique in both wool and nylon in our Masland and
We have continued to focus on growing our luxury vinyl flooring business. In hard surfaces, we are building out our TRUCOR™ Rigid Core offering in
Our commercial product sales in the first quarter were down 12.9% on a year over year basis while the industry we believe was down in the low single digits for the same time periods. Our commercial modular carpet tile sales were more impacted than our broadloom sales for the period. Our commercial hard surface sales were up over 40% for the period relative to a year ago. In the first quarter of 2020, Atlas | Masland Contract became AtlasMasland, still offering the same innovative product lines under one dedicated sales force.
Our commercial business is excited to launch a comprehensive collection of patterns and colorways targeted in the Living market. We believe that this collection, launched in complementary folders named Achievements and Blossoming, provides designers with the soft surface offering to create places for experiences that inspire all generations. Working with our industry-leading Area Rug programs and our extensive LVT offering, we provide a complete flooring offering for specifiers to successfully design outstanding projects in the Living market. LIVING began with an innovative concept to creatively combine elements of Senior Living, Multifamily and Hospitality into one complete offering. From this vision, the dual portfolios of Achievement and Blossoming were devised. Both encompass an extensive selection of broadloom and carpet tile patterns, ideal for an array of interior applications. The on-trend color palette offers a diverse mixture of sophisticated neutrals and vibrant brights that can either soothe or energize an environment while adding the exceptional performance benefits of Universal Fibers Nylon 6,6 with Permanent Stain Resistance.
We are excited to celebrate 100 years in business in 2020. Over our 100-year history, the company has transformed itself again and again. Just as the second world war required we adapt to change, we are adapting to the issues confronting us in the current pandemic. We are proud of our history and heritage, and we are excited about starting the next 100 years as a company," Frierson concluded.
Our gross profit for the first quarter of 2020 was 23.6% of net sales as compared to a gross profit of 21.4% in 2019. The increased gross profit was the result of improvements in operations from the prior year quarter. Selling and administrative expenses for the quarter were down from
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. 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 | ||||||||
$ | 80,578 | $ | 88,606 | |||||
Cost of sales | 61,585 | 69,687 | ||||||
GROSS PROFIT | 18,993 | 18,919 | ||||||
Selling and administrative expenses | 20,397 | 21,660 | ||||||
Other operating (income) expense, net | (92 | ) | 26 | |||||
Facility consolidation and severance expenses, net | 24 | 2,091 | ||||||
Impairment of assets | - | 5 | ||||||
OPERATING LOSS | (1,336 | ) | (4,863 | ) | ||||
Interest expense | 1,285 | 1,720 | ||||||
Other income, net | (4 | ) | (42 | ) | ||||
Loss from continuing operations before taxes | (2,617 | ) | (6,541 | ) | ||||
Income tax provision (benefit) | (4 | ) | 100 | |||||
Income (loss) from continuing operations | (2,613 | ) | (6,641 | ) | ||||
Income (loss) from discontinued operations, net of tax | (76 | ) | (31 | ) | ||||
NET INCOME (LOSS) | $ | (2,689 | ) | $ | (6,672 | ) | ||
BASIC EARNINGS (LOSS) PER SHARE: | ||||||||
Continuing operations | $ | (0.17 | ) | $ | (0.42 | ) | ||
Discontinued operations | (0.01 | ) | 0.00 | |||||
Net income (loss) | $ | (0.18 | ) | $ | (0.42 | ) | ||
DILUTED EARNINGS (LOSS) PER SHARE: | ||||||||
Continuing operations | $ | (0.17 | ) | $ | (0.42 | ) | ||
Discontinued operations | (0.01 | ) | 0.00 | |||||
Net income (loss) | $ | (0.18 | ) | $ | (0.42 | ) | ||
Weighted-average shares outstanding: | ||||||||
Basic | 15,356 | 15,809 | ||||||
Diluted | 15,356 | 15,809 | ||||||
Consolidated Condensed Balance Sheets
(in thousands)
ASSETS | (Unaudited) | |||||||
Current Assets | ||||||||
Cash and cash equivalents | $ | 19 | $ | 769 | ||||
Receivables, net | 38,229 | 37,138 | ||||||
Inventories, net | 98,227 | 95,509 | ||||||
Prepaid and other current assets | 8,529 | 6,179 | ||||||
Total Current Assets | 145,004 | 139,595 | ||||||
Property, Plant and Equipment, Net | 63,254 | 65,442 | ||||||
Operating Lease Right-Of-Use Assets | 24,034 | 24,835 | ||||||
Other Assets | 14,853 | 17,787 | ||||||
TOTAL ASSETS | $ | 247,145 | $ | 247,659 | ||||
LIABILITIES AND STOCKHOLDERS' EQUITY | ||||||||
Current Liabilities | ||||||||
Accounts payable | $ | 17,963 | $ | 16,084 | ||||
Accrued expenses | 27,890 | 25,418 | ||||||
Current portion of long-term debt | 6,742 | 6,684 | ||||||
Current portion of operating lease liabilities | 3,169 | 3,172 | ||||||
Total Current Liabilities | 55,764 | 51,358 | ||||||
Long-Term Debt | 83,870 | 81,667 | ||||||
Operating Lease Liabilities | 21,378 | 22,123 | ||||||
Other Long-Term Liabilities | 16,659 | 19,300 | ||||||
Stockholders' Equity | 69,474 | 73,211 | ||||||
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $ | 247,145 | $ | 247,659 |
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 | ||||||||
Net income as reported | $ | (2,689 | ) | $ | (6,672 | ) | ||
Income (loss) from discontinued operations | (76 | ) | (31 | ) | ||||
Income from continuing operations | (2,613 | ) | (6,641 | ) | ||||
Profit Improvement Plans | - | 2,091 | ||||||
Facility consolidation and severance expenses, net | 24 | - | ||||||
Impairment of Assets | - | 5 | ||||||
Profit Improvement Plan related expenses | 24 | 2,096 | ||||||
Income/Loss | $ | (2,589 | ) | $ | (4,545 | ) | ||
Diluted shares | 15,356 | 15,809 | ||||||
Adjusted loss per diluted share | $ | (0.17 | ) | $ | (0.29 | ) | ||
Further non-GAAP reconciliation data are available at www.thedixiegroup.com under the Investor Relations section.
CONTACT
Chief Financial Officer
706-876-5865
allen.danzey@dixiegroup.com
SOURCE:
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