The Dixie Group Reports Profit Excluding Facility Restructuring Charges for the Second Quarter of 2019
DALTON, Ga., Aug. 05, 2019 (GLOBE NEWSWIRE) -- The Dixie Group, Inc. (NASDAQ: DXYN) today reported financial results for the quarter ended June 29, 2019. For the second quarter of 2019, the Company had net sales of $100,394,000 as compared to $106,438,000 in 2018. The Company’s second quarter net sales were down 5.7% as compared to the same period in 2018 while the industry, we estimate, was ...
Unusual expenses during the period included
Commenting on the results,
As a result of this action, we have completed the combination of our Atlas and Masland business into one commercial business, now known as Atlas | Masland Contract. In order to accomplish the cost reductions and combine our commercial business, we have expensed over
As mentioned above, without these costs in the second quarter, the Company was profitable. Costs related to the plan are nearly complete and will be at a much lower level in the future. We look forward to completing the Profit Improvement Plan in the second half of 2019.
Our residential sales were down 2.6% for second quarter of 2019. Residential soft surface products were down 4.1% while we estimate our segment of the soft surface market was down high single digits. Residential hard surface sales were up 48% while we estimate the industry was up low double digits.
Our strongest residential sales growth was in hard surfaces where we continued gaining traction in the luxury vinyl flooring and engineered wood flooring segments. Our new TRUCOR™ SPC program has begun to gain traction in the market. We will be expanding our
In
Our commercial business in the second quarter was down 13.7% while the industry we believe was up the in the low single digits. Our commercial team has a number of new offerings for 2019 with particular emphasis on new modular carpet tile offerings. Our new Sustaina™ modular carpet tile backing system, a PVC and polyurethane free backing system, was created for the specifier who desires both the most sustainable construction and performance in high relative humidity environments, thus allowing quicker installation on new concrete surfaces. The Crafted Collection will launch in the third quarter of 2019 using this new backing system. Further, Crafted will have over 80% recycled content with 100% recycled content in the face fiber,” Frierson concluded.
Our gross profit for the second quarter of 2019 was 23.4% of net sales as compared to a gross profit of 23.6% in the second quarter of 2018. Included in our cost of sales for the period was
Selling and administrative expenses for the second quarter of 2019 were 21.0% of net sales, a decrease of 1.4 percentage points from our level of 22.4% in the second 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 and streamlined other costs throughout the Company. We had
Our receivables increased
Our residential business continues to outperform our commercial business, though we are confident that our commercial reorganization is proving successful.
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 | Six Months Ended | |||||||||||||
2019 | 2018 | 2019 | 2018 | |||||||||||
$ | 100,394 | $ | 106,438 | $ | 189,001 | $ | 205,297 | |||||||
Cost of sales | 76,901 | 81,294 | 146,589 | 158,573 | ||||||||||
GROSS PROFIT | 23,493 | 25,144 | 42,412 | 46,724 | ||||||||||
Selling and administrative expenses | 21,114 | 23,802 | 42,774 | 46,921 | ||||||||||
Other operating expense, net | 80 | 1,507 | 108 | 1,267 | ||||||||||
Facility consolidation and severance expenses, net | 1,725 | 190 | 3,816 | 406 | ||||||||||
Impairment of assets | — | — | 3 | — | ||||||||||
OPERATING INCOME (LOSS) | 574 | (355 | ) | (4,289 | ) | (1,870 | ) | |||||||
Interest expense | 1,717 | 1,642 | 3,437 | 3,176 | ||||||||||
Other (income) expense, net | 4 | 1 | (38 | ) | 3 | |||||||||
Loss from continuing operations before taxes | (1,147 | ) | (1,998 | ) | (7,688 | ) | (5,049 | ) | ||||||
Income tax provision (benefit) | 34 | (26 | ) | 134 | (192 | ) | ||||||||
Loss from continuing operations | (1,181 | ) | (1,972 | ) | (7,822 | ) | (4,857 | ) | ||||||
Income (loss) from discontinued operations, net of tax | (35 | ) | 157 | (66 | ) | 135 | ||||||||
NET LOSS | $ | (1,216 | ) | $ | (1,815 | ) | $ | (7,888 | ) | $ | (4,722 | ) | ||
BASIC EARNINGS (LOSS) PER SHARE: | ||||||||||||||
Continuing operations | $ | (0.07 | ) | $ | (0.13 | ) | $ | (0.49 | ) | $ | (0.31 | ) | ||
Discontinued operations | (0.00 | ) | 0.01 | (0.00 | ) | 0.01 | ||||||||
Net loss | $ | (0.07 | ) | $ | (0.12 | ) | $ | (0.49 | ) | $ | (0.30 | ) | ||
DILUTED EARNINGS (LOSS) PER SHARE: | ||||||||||||||
Continuing operations | $ | (0.07 | ) | $ | (0.13 | ) | $ | (0.49 | ) | $ | (0.31 | ) | ||
Discontinued operations | (0.00 | ) | 0.01 | (0.00 | ) | 0.01 | ||||||||
Net loss | $ | (0.07 | ) | $ | (0.12 | ) | $ | (0.49 | ) | $ | (0.30 | ) | ||
Weighted-average shares outstanding: | ||||||||||||||
Basic | 15,885 | 15,763 | 15,847 | 15,739 | ||||||||||
Diluted | 15,885 | 15,763 | 15,847 | 15,739 | ||||||||||
Consolidated Condensed Balance Sheets
(in thousands)
2019 | 2018 | ||||||
ASSETS | (Unaudited) | ||||||
Current Assets | |||||||
Cash and cash equivalents | $ | 20 | $ | 18 | |||
Receivables, net | 47,362 | 42,542 | |||||
Inventories, net | 104,166 | 105,195 | |||||
Prepaids and other current assets | 6,529 | 5,204 | |||||
Total Current Assets | 158,077 | 152,959 | |||||
Property, Plant and Equipment, Net | 80,451 | 84,111 | |||||
Operating Lease Right-Of-Use Assets | 8,393 | — | |||||
Other Assets | 17,258 | 15,708 | |||||
TOTAL ASSETS | $ | 264,179 | $ | 252,778 | |||
LIABILITIES AND STOCKHOLDERS' EQUITY | |||||||
Current Liabilities | |||||||
Accounts payable | $ | 27,521 | $ | 17,779 | |||
Accrued expenses | 31,018 | 30,852 | |||||
Current portion of long-term debt | 6,345 | 7,794 | |||||
Current portion of operating lease liabilities | 1,973 | — | |||||
Total Current Liabilities | 66,857 | 56,425 | |||||
Long-Term Debt | 120,805 | 120,251 | |||||
Operating Lease Liabilities | 6,831 | — | |||||
Other Long-Term Liabilities | 19,296 | 17,118 | |||||
Stockholders' Equity | 50,390 | 58,984 | |||||
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $ | 264,179 | $ | 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 | |||||||||||
2018 | |||||||||||
Net loss as reported | $ | (1,216 | ) | $ | (1,815 | ) | |||||
Inventory write-downs related to Profit Improvement Plan | 202 | — | |||||||||
Facility consolidation and severance expenses, net | 1,725 | 190 | |||||||||
Tax effect | (14 | ) | (1 | ) | |||||||
Profit (loss) | $ | 697 | $ | (1,626 | ) | ||||||
Diluted shares | 15,980 | 15,763 | |||||||||
Adjusted profit (loss) per diluted share | $ | 0.04 | $ | (0.10 | ) |
Further non-GAAP reconciliation data are available at www.thedixiegroup.com under the Investor Relations section.
CONTACT: | Chief Financial Officer 706-876-5814 jon.faulkner@dixiegroup.com |