CORRECTING and REPLACING The Dixie Group Reports Third Quarter 2015 Results
CHATTANOOGA, Tenn.--(BUSINESS WIRE)-- Seventh paragraph, second sentence should read: The simulcast will begin at approximately 10:00 a.m. Eastern Time on October 29, 2015. (instead of The simulcast will begin at approximately 2:00 p.m. Eastern Time on October 29, 2015). The corrected release reads: THE DIXIE GROUP REPORTS THIRD QUARTER 2015 RESULTS The Dixie Group, Inc. (NASDAQ:DXYN) today ...
The corrected release reads:
THE DIXIE GROUP REPORTS THIRD QUARTER 2015 RESULTS
Commenting on the results,
“For the quarter, gross profit was 25.0% of net sales as compared to
24.4% for the third quarter of the prior year and 26.7% for the second
quarter of 2015. Gross profit improved relative to a year ago as a
result of improved operations and a reduction in acquisition related
expenses. Relative to the second quarter of 2015, however, margins were
lower due to lower sales, an unfavorable product mix primarily in our
residential business, continued quality expenses from production made
during the consolidation and a favorable adjustment in the prior quarter
related to acquisition-related contingent payments. Operationally, we
did not perform in the third quarter as well as expected due to
continued higher quality expenses and lower production volumes. Our
production levels were over 6% lower in the third quarter than in the
second quarter of 2015. Facility consolidation expenses, both for our
manufacturing facility realignment and for our corporate office
consolidation, were
“Operating income was
“Current assets decreased
“Sales in the third quarter started off strong in July, but slowed throughout the period, similar to what happened in the second quarter of this year. Further, we are continuing to see operational improvements; however, given the slower growth environment than previously expected, we are putting more emphasis on operational improvements and on moderating our investment in growth. In addition, even though we have continued to suffer from quality control issues that arose during the restructuring, we believe that they will continue to diminish as we move forward. We are continuing to see improvements as our operations return to the historical quality levels we had before the restructuring. We are intent on increasing profitability through improved operations and tighter cost controls as we complete the ongoing restructuring,” Frierson concluded.
A listen-only
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, raw
material and transportation costs related to petroleum prices, the cost
and availability of capital, integration of acquisitions 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) |
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Three Months Ended | Nine Months Ended | |||||||||||||||||||
|
2014 |
2015 |
2014 |
|||||||||||||||||
NET SALES | $ | 108,908 | $ | 109,006 | $ | 314,721 | $ | 302,014 | ||||||||||||
Cost of sales | 81,643 | 82,407 | 234,811 | 230,643 | ||||||||||||||||
GROSS PROFIT | 27,265 | 26,599 | 79,910 | 71,371 | ||||||||||||||||
Selling and administrative expenses | 25,267 | 23,801 | 76,215 | 68,179 | ||||||||||||||||
Other operating expense, net | 131 | 230 | 684 | 601 | ||||||||||||||||
Facility consolidation expenses | 614 | 1,632 | 2,264 | 2,654 | ||||||||||||||||
Impairment of assets | — | 104 | — | 759 | ||||||||||||||||
OPERATING INCOME (LOSS) | 1,253 | 832 | 747 | (822 | ) | |||||||||||||||
Interest expense | 1,203 | 991 | 3,603 | 3,161 | ||||||||||||||||
Other (income) expense, net | 4 | (23 | ) | 45 | (60 | ) | ||||||||||||||
Gain on purchase of business | — | (173 | ) | — | (11,110 | ) | ||||||||||||||
Income (loss) from continuing operations before taxes | 46 | 37 | (2,901 | ) | 7,187 | |||||||||||||||
Income tax provision (benefit) | (38 | ) | 45 | (1,121 | ) | 2,884 | ||||||||||||||
Income (loss) from continuing operations | 84 | (8 | ) | (1,780 | ) | 4,303 | ||||||||||||||
Loss from discontinued operations, net of tax | (18 | ) | (177 | ) | (118 | ) | (505 | ) | ||||||||||||
NET INCOME (LOSS) | $ | 66 | $ | (185 | ) | $ | (1,898 | ) | $ | 3,798 | ||||||||||
BASIC EARNINGS (LOSS) PER SHARE: | ||||||||||||||||||||
Continuing operations | $ | 0.01 | $ | — | $ | (0.11 | ) | $ | 0.29 | |||||||||||
Discontinued operations | — | (0.01 | ) | (0.01 | ) | (0.04 | ) | |||||||||||||
Net income (loss) | $ | 0.01 | $ | (0.01 | ) | $ | (0.12 | ) | $ | 0.25 | ||||||||||
DILUTED EARNINGS (LOSS) PER SHARE: | ||||||||||||||||||||
Continuing operations | $ | 0.01 | $ | — | $ | (0.11 | ) | $ | 0.29 | |||||||||||
Discontinued operations | — | (0.01 | ) | (0.01 | ) | (0.04 | ) | |||||||||||||
Net income (loss) | $ | 0.01 | $ | (0.01 | ) | $ | (0.12 | ) | $ | 0.25 | ||||||||||
Weighted-average shares outstanding: | ||||||||||||||||||||
Basic | 15,573 | 15,394 | 15,518 | 14,040 | ||||||||||||||||
Diluted | 15,666 | 15,394 | 15,518 | 14,216 | ||||||||||||||||
Consolidated Condensed Balance Sheets (in thousands) |
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2015 |
2014 |
||||||||
ASSETS | (Unaudited) | ||||||||
Current Assets | |||||||||
Cash and cash equivalents | $ | 179 | $ | 394 | |||||
Receivables, net | 53,808 | 50,524 | |||||||
Inventories | 114,856 | 104,207 | |||||||
Other | 18,481 | 18,692 | |||||||
Total Current Assets | 187,324 | 173,817 | |||||||
Property, Plant and Equipment, Net | 102,069 | 102,489 | |||||||
|
6,537 | 6,767 | |||||||
Other Assets | 16,457 | 17,807 | |||||||
TOTAL ASSETS | $ | 312,387 | $ | 300,880 | |||||
LIABILITIES AND STOCKHOLDERS' EQUITY | |||||||||
Current Liabilities | |||||||||
Accounts payable and accrued expenses | $ | 62,375 | $ | 51,415 | |||||
Current portion of long-term debt | 9,337 | 9,078 | |||||||
Total Current Liabilities | 71,712 | 60,493 | |||||||
Long-Term Debt | 121,844 | 118,210 | |||||||
Deferred Income Taxes | 8,166 | 9,376 | |||||||
Other Liabilities | 19,933 | 19,824 | |||||||
Stockholders' Equity | 90,732 | 92,977 | |||||||
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $ | 312,387 | $ | 300,880 | |||||
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
results in a prior period, 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 |
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Non-GAAP Summary | ||||||||||
Three Months Ended | ||||||||||
Non-GAAP Gross Profit |
2015 |
2014 |
||||||||
Net Sales | $ | 108,908 | $ | 109,006 | ||||||
Gross Profit | $ | 27,265 | $ | 26,599 | ||||||
Plus: Amortization of Acquisition Inventory Step-up | — | 196 | ||||||||
Non-GAAP Adjusted Gross Profit (Note 1) | $ | 27,265 | $ | 26,795 | ||||||
Gross Profit as % of Net Sales | 25.0 | % | 24.4 | % | ||||||
Non-GAAP Adjusted Gross Profit % of Net Sales | 25.0 | % | 24.6 | % | ||||||
The Company defines Adjusted Gross Profit as Gross Profit plus manufacturing integration expenses of new or expanded operations, plus amortization of acquisition inventory step-up, plus one-time items so defined. (Note 1) | ||||||||||
Three Months Ended | ||||||||||
Non-GAAP Adjusted Selling and Administrative Expenses |
2015 |
2014 |
||||||||
Net Sales | $ | 108,908 | $ | 109,006 | ||||||
Selling and Administrative Expenses | $ | 25,267 | $ | 23,801 | ||||||
Less: Mfg. Integration Expense | — | (555 | ) | |||||||
Less: Acquisition Expense | — | (93 | ) | |||||||
Non-GAAP Adjusted Selling and Administrative Expenses (Note 2) | $ | 25,267 | $ | 23,153 | ||||||
Selling and Administrative Expenses as % of Net Sales | 23.2 | % | 21.8 | % | ||||||
Non-GAAP Adjusted Selling and Administrative Expenses as % of Net Sales | 23.2 | % | 21.2 | % | ||||||
The Company defines Adjusted Selling and Administrative Expenses as Selling and Administrative Expenses less manufacturing integration expenses and direct acquisition expenses included in Selling and Administrative Expenses, less one-time items so defined. (Note 2) | ||||||||||
Non-GAAP Summary | ||||||||||
Three Months Ended | ||||||||||
Non-GAAP Operating Income (Loss) |
2015 |
2014 |
||||||||
Net Sales | $ | 108,908 | $ | 109,006 | ||||||
Operating Income (Loss) | $ | 1,253 | $ | 832 | ||||||
Plus: Mfg. Integration Expense | — | 555 | ||||||||
Plus: Facility Consolidation Expense | 614 | 1,632 | ||||||||
Plus: Amortization of Acquisition Inventory Step-up | — | 196 | ||||||||
Plus: Acquisition Expense | — | 93 | ||||||||
Plus: Impairment of Assets | — | 104 | ||||||||
Non-GAAP Adjusted Operating Income (Loss) (Note 3) | $ | 1,867 | $ | 3,412 | ||||||
Operating Income (Loss) as % of Net Sales | 1.2 | % | 0.8 | % | ||||||
Adjusted Operating Income (Loss) as a % of Net Sales | 1.7 | % | 3.1 | % | ||||||
The Company defines Adjusted Operating Income (Loss) as Operating Income (Loss) plus manufacturing integration expenses of new or expanded operations, plus amortization of acquisition inventory step-up, plus facility consolidation and severance expenses, plus direct acquisition expenses, plus impairment of assets, plus impairment of goodwill, plus one-time items so defined. (Note 3) | ||||||||||
Three Months Ended | ||||||||||
Non-GAAP Income (Loss) From Continuing Operations |
2015 |
2014 |
||||||||
Net Income (Loss) as Reported | $ | 66 | $ | (185 | ) | |||||
Less: Loss from Discontinued Operations, Net of Tax | (18 | ) | (177 | ) | ||||||
Income (Loss) from Continuing Operations | 84 | (8 | ) | |||||||
Plus: Mfg. Integration Expense | — | 555 | ||||||||
Plus: Facility Consolidation Expense | 614 | 1,632 | ||||||||
Plus: Amortization of Acquisition Inventory Step-up | — | 196 | ||||||||
Plus: Acquisition Expense | — | 93 | ||||||||
Less: Gain on Purchase of Business | — | (173 | ) | |||||||
Plus: Impairment of Assets | — | 104 | ||||||||
Plus: Tax Effect of Above | (233 | ) | (914 | ) | ||||||
Non-GAAP Adjusted Income (Loss) From Continuing Operations (Note 4) | $ | 465 | $ | 1,485 | ||||||
Adjusted Diluted Earnings (Loss) Per Share from Continuing Operations | $ | 0.03 | $ | 0.10 | ||||||
Weighted-Average Diluted Shares Outstanding | 15,666 | 15,394 | ||||||||
The Company defines Adjusted Income (Loss) from Continuing Operations as Net Income (Loss) less loss from discontinued operations, net of tax, plus manufacturing integration expenses of new or expanded operations, plus facility consolidation and severance expenses, plus amortization of acquisition inventory step-up, plus direct acquisition expenses, less gain on purchase of business, plus impairment of assets, plus impairment of goodwill, plus one-time items so defined. (Note 4) | ||||||||||
Non-GAAP Summary | ||||||||||
Three Months Ended | ||||||||||
Non-GAAP EBIT and EBITDA |
2015 |
2014 |
||||||||
Net Income (Loss) as Reported | $ | 66 | $ | (185 | ) | |||||
Less: Loss from Discontinued Operations, Net of Tax | (18 | ) | (177 | ) | ||||||
Plus: Taxes | (38 | ) | 45 | |||||||
Plus: Interest | 1,203 | 991 | ||||||||
Non-GAAP Adjusted EBIT (Note 5) | 1,249 | 1,028 | ||||||||
Plus: Depreciation and Amortization | 3,652 | 3,330 | ||||||||
EBITDA | 4,901 | 4,358 | ||||||||
Plus: Mfg. Integration Expense | — | 555 | ||||||||
Plus: Facility Consolidation Expense | 614 | 1,632 | ||||||||
Plus: Amortization of Acquisition Inventory Step-up | — | 196 | ||||||||
Plus: Acquisition Expense | — | 93 | ||||||||
Less: Gain on Purchase of Business | — | (173 | ) | |||||||
Plus: Impairment of Assets | — | 104 | ||||||||
Non-GAAP Adjusted EBITDA (Note 5) | $ | 5,515 | $ | 6,765 | ||||||
Non-GAAP Adjusted EBITDA as % of Net Sales | 5.1 | % | 6.2 | % | ||||||
The Company defines Adjusted EBIT as Net Income (Loss) less loss from discontinued operations, plus taxes and plus interest. The Company defines Adjusted EBITDA as Adjusted EBIT plus depreciation and amortization, plus manufacturing in integration expenses of new or expanded operations, plus facility consolidation and severance expenses, plus amortization of acquisition inventory step-up, plus direct acquisition expenses, less gain on purchase of business, plus impairment of assets, plus impairment of goodwill, plus one-time items so defined. (Note 5) | ||||||||||
Three Months Ended | ||||||||||
Non-GAAP Free Cash Flow |
2015 |
2014 |
||||||||
Non-GAAP Adjusted EBIT | $ | 1,249 | $ | 1,028 | ||||||
|
774 | 638 | ||||||||
Plus: Depreciation and amortization | 3,652 | 3,330 | ||||||||
Plus: Non-cash impairment of assets | — | 104 | ||||||||
Minus: Net change in working capital | (331 | ) | 7,499 | |||||||
Non-GAAP Cash from Operations | 4,757 | (3,427 | ) | |||||||
Minus: Capital expenditures | 1,758 | 6,972 | ||||||||
Minus: Business/Capital acquisitions | — | 2,615 | ||||||||
Non-GAAP Free Cash Flow (Note 6) | $ | 2,999 | $ | (13,014 | ) | |||||
The Company defines Free Cash Flow as Non-GAAP Adjusted EBIT plus interest plus depreciation and amortization, plus non-cash impairment of assets and goodwill, minus the net change in working capital minus the tax shield on interest, minus capital expenditures, minus business/capital acquisitions. The change in net working capital is the change in current assets less current liabilities between periods. (Note 6) | ||||||||||
Facility Consolidation Plan Summary | ||||||||||||||||||||||||
Q1 2015 | Q2 2015 | Q3 2015 |
Q4 2015 |
|
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Warehousing, Distribution & Manufacturing Consolidation Plan | $ | 605 | $ | 840 | $ | 341 | $ | 291 | $ | 451 | ||||||||||||||
Atlas Integration Plan | 170 | 35 | (3 | ) | — | — | ||||||||||||||||||
Corporate Office Consolidation Plan | — | — | 276 | 440 | — | |||||||||||||||||||
Total Facility Consolidation Expense | $ | 775 | $ | 875 | $ | 614 | $ | 731 | $ | 451 | ||||||||||||||
Further non-GAAP reconciliation data are available at www.thedixiegroup.com under the Investor Relations section. |
View source version on businesswire.com: http://www.businesswire.com/news/home/20151029005237/en/
Chief
Financial Officer
jon.faulkner@dixiegroup.com
Source: