The Dixie Group Reports Update on $18.7 Million Profit Improvement Plan Along With Q1 2019 Results
DALTON, Ga., May 03, 2019 (GLOBE NEWSWIRE) -- The Dixie Group, Inc. (NASDAQ: DXYN) today reported financial results for the first fiscal quarter ended March 30, 2019. For the first quarter of 2019, the Company had net sales of $88,606,000 as compared to $98,858,000 in 2018. For Q1, 2019 net sales were down 10.4% as compared to 2018. For the first quarter of 2019, the Company had a loss from ...
Commenting on the results,
Our commercial business in the first quarter was down over 20% on a year over year basis while the industry we believe was flat for the same time periods. Our commercial broadloom sales were most heavily impacted while our commercial modular carpet tile sales were flat for the comparative periods. We did benefit from the reorganization of our commercial business this past fall with lower selling and administrative expenses.
The exclusive supplier of yarns to our Atlas contract operation has decided to dramatically reduce the supply of white dyeable yarns, which have been the major source of differentiation and supported the majority of our Atlas product line. The Atlas business model had been to make piece dyeable products on a build to order model. The change in piece dyed yarn availability along with other product trends in the market place has caused us to change our business model. We have responded by merging our two commercial businesses; first by consolidating the marketing, product development, and support functions followed by consolidating our sales team and manufacturing operations. That consolidation is now complete. We are still in the process of introducing new products to replace those being phased out and will continue this transition for several years.
Our commercial sales during the period were impacted by the completion of our moving equipment from our commercial west coast tufting center into our
Our gross profit for the first quarter of 2019 was 21.4% of net sales as compared to a gross profit of 21.8% in 2018. Our gross profit was impacted by several major issues during the quarter. Our medical costs were over
Selling and administrative expenses for the quarter were down from
We had
Our receivables increased
Our residential sales for the first four weeks of April are 1.7% behind last year at this time. Our commercial backlog has increased
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 | |||||||
2019 | 2018 | ||||||
$ | 88,606 | $ | 98,858 | ||||
Cost of sales | 69,687 | 77,278 | |||||
GROSS PROFIT | 18,919 | 21,580 | |||||
Selling and administrative expenses | 21,660 | 23,120 | |||||
Other operating (income) expense, net | 26 | (241 | ) | ||||
Facility consolidation and severance expenses, net | 2,091 | 216 | |||||
Impairment of assets | 5 | — | |||||
OPERATING LOSS | (4,863 | ) | (1,515 | ) | |||
Interest expense | 1,720 | 1,533 | |||||
Other (income) expense, net | (42 | ) | 2 | ||||
Loss from continuing operations before taxes | (6,541 | ) | (3,050 | ) | |||
Income tax provision (benefit) | 100 | (166 | ) | ||||
Loss from continuing operations | (6,641 | ) | (2,884 | ) | |||
Loss from discontinued operations, net of tax | (31 | ) | (23 | ) | |||
NET LOSS | $ | (6,672 | ) | $ | (2,907 | ) | |
BASIC EARNINGS (LOSS) PER SHARE: | |||||||
Continuing operations | $ | (0.42 | ) | $ | (0.18 | ) | |
Discontinued operations | (0.00 | ) | (0.00 | ) | |||
Net loss | $ | (0.42 | ) | $ | (0.18 | ) | |
DILUTED EARNINGS (LOSS) PER SHARE: | |||||||
Continuing operations | $ | (0.42 | ) | $ | (0.18 | ) | |
Discontinued operations | (0.00 | ) | (0.00 | ) | |||
Net loss | $ | (0.42 | ) | $ | (0.18 | ) | |
Weighted-average shares outstanding: | |||||||
Basic | 15,809 | 15,715 | |||||
Diluted | 15,809 | 15,715 | |||||
Consolidated Condensed Balance Sheets
(in thousands)
2019 | 2018 | ||||||
ASSETS | (Unaudited) | ||||||
Current Assets | |||||||
Cash and cash equivalents | $ | 12 | $ | 18 | |||
Receivables, net | 43,504 | 42,542 | |||||
Inventories, net | 103,823 | 105,195 | |||||
Prepaids and other current assets | 6,412 | 5,204 | |||||
Total Current Assets | 153,751 | 152,959 | |||||
Property, Plant and Equipment, Net | 82,061 | 84,111 | |||||
Operating Lease Right-Of-Use Assets | 8,982 | — | |||||
Other Assets | 17,506 | 15,708 | |||||
TOTAL ASSETS | $ | 262,300 | $ | 252,778 | |||
LIABILITIES AND STOCKHOLDERS' EQUITY | |||||||
Current Liabilities | |||||||
Accounts payable | $ | 19,580 | $ | 17,779 | |||
Accrued expenses | 29,577 | 30,852 | |||||
Current portion of long-term debt | 6,966 | 7,794 | |||||
Current portion of operating lease liabilities | 2,115 | — | |||||
Total Current Liabilities | 58,238 | 56,425 | |||||
Long-Term Debt | 125,716 | 120,251 | |||||
Operating Lease Liabilities | 7,255 | — | |||||
Other Long-Term Liabilities | 18,995 | 17,118 | |||||
Stockholders' Equity | 52,096 | 58,984 | |||||
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $ | 262,300 | $ | 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 | Three Months Ended | ||||||
2019 | 2018 | ||||||
Net loss as reported | $ | (6,672 | ) | $ | (2,907 | ) | |
Income from discontinued operations | (31 | ) | (23 | ) | |||
Loss from continuing operations | (6,641 | ) | (2,884 | ) | |||
Profit Improvement Plans | 2,091 | 216 | |||||
Impairment of assets | 5 | — | |||||
Loss from continuing operations | $ | (4,545 | ) | $ | (2,668 | ) | |
Diluted shares | 15,809 | 15,851 | |||||
Adjusted loss per diluted share | $ | (0.29 | ) | $ | (0.17 | ) | |
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