The Dixie Group Reports 2018 Results, Continues the Rollout of Its $17 Million Profit Improvement Plan
DALTON, Ga., March 07, 2019 (GLOBE NEWSWIRE) -- The Dixie Group, Inc. (NASDAQ: DXYN) today reported financial results for the year ended December 29, 2018. For 2018, the Company had net sales of approximately $405,033,000 as compared to $412,462,000 in 2017. The loss from continuing operations for 2018 was $21,479,000 or $1.36 per share, as compared to a loss from continuing operations of ...
Commenting on the results,
The residential business soft surface product line grew by 1.8% while the industry, we believe, was flat. Our hard surface sales tripled during this same time period. In the residential market in 2018, we had our largest product launch ever. We launched over 150 new products for 2018, including 67 carpet styles and 86 hard surface designs. Our focus in 2018 was to enhance our importance to our residential dealer network and to gain retail floor space by broadening our product offering as we expanded our main street commercial and mill branded soft flooring product selection. We are especially pleased with our new Masland eNeRgy in store display with 20 exciting main street commercial products. This high styled main street category was developed by Masland in the mid 2000’s and we are re-invigorating this line with new products, designs and an updated selling vehicle. The eNeRgy line is a complete selection of broadloom and modular carpet tile designed for the commercial market serviced through our network of full service dealers. We began shipment of our new EnVision 6,6™ soft floorcovering collection. This new program is an extension of our
To facilitate this growth, we are expanding our distribution of hard surface products to our west coast distribution center as well as our east coast service center.
Our results in the commercial market have been impacted by the restructuring we have been undergoing since late 2017. Our commercial product sales for the year were down over 13.2% while the commercial soft floorcovering market, we believe, was down marginally. We expanded our product offering in luxury vinyl flooring with our sales doubling through our Calibrè line of luxury vinyl flooring products. We have introduced a new collection of modular carpet tile products in 2018, such as Top Notch using Thrive® by Universal® Fibers, a solution dyed nylon 6,6 that stands alone as the most environmentally conscious solution-dyed high performance nylon 6,6 carpet fiber in the world with the highest level of recycled material, the lowest CO2 emission and built-in encapsulated stain resistance. As we have merged the two commercial sales forces into Atlas | Masland Contract, we are positioned, with our newly reformulated footprint and complete line of broadloom carpet, modular carpet tile, luxury vinyl flooring and commercial rugs to service our customers with excellent service and cutting edge design from our focused operational facilities dedicated to the commercial marketplace.
Our Profit Improvement Plan has captured the many efforts we have implemented to improve operations during 2018. We began the structural consolidation of our commercial business with the closure of the
Our gross profit margin for the year was 21.5% for 2018, down from 24.5% in 2017. Our gross profit was negatively impacted by
Our receivables decreased
Our floorcovering sales for the first 9 weeks of the quarter are down high-single digits versus the same period in 2018. Our orders, however, are only slightly behind compared to this same period last year. We are pleased with the progress we are making with our Profit Improvement Plan and anticipate the bulk of the savings to be in place by the third quarter of 2019.
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, 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 | Twelve Months Ended | ||||||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||||||
(As Adjusted) | (As Adjusted) | ||||||||||||||
$ | 98,175 | $ | 105,084 | $ | 405,033 | $ | 412,462 | ||||||||
Cost of sales | 79,795 | 82,315 | 318,042 | 311,249 | |||||||||||
GROSS PROFIT | 18,380 | 22,769 | 86,991 | 101,213 | |||||||||||
Selling and administrative expenses | 22,518 | 22,386 | 92,473 | 96,189 | |||||||||||
Other operating expense, net | 37 | 357 | 458 | 441 | |||||||||||
Facility consolidation and severance expenses, net | 2,230 | 634 | 3,167 | 636 | |||||||||||
Impairment of assets | 6,360 | — | 6,709 | — | |||||||||||
OPERATING INCOME (LOSS) | (12,765 | ) | (608 | ) | (15,816 | ) | 3,947 | ||||||||
Interest expense | 1,651 | 1,535 | 6,491 | 5,739 | |||||||||||
Other expense, net | 5 | 1 | 3 | 21 | |||||||||||
Loss from continuing operations before taxes | (14,421 | ) | (2,144 | ) | (22,310 | ) | (1,813 | ) | |||||||
Income tax provision (benefit) | (721 | ) | 7,283 | (831 | ) | 7,509 | |||||||||
Loss from continuing operations | (13,700 | ) | (9,427 | ) | (21,479 | ) | (9,322 | ) | |||||||
Income (loss) from discontinued operations, net of tax | 1 | (69 | ) | 95 | (233 | ) | |||||||||
NET LOSS | $ | (13,699 | ) | $ | (9,496 | ) | $ | (21,384 | ) | $ | (9,555 | ) | |||
BASIC EARNINGS (LOSS) PER SHARE: | |||||||||||||||
Continuing operations | $ | (0.87 | ) | $ | (0.60 | ) | $ | (1.36 | ) | $ | (0.59 | ) | |||
Discontinued operations | (0.00 | ) | (0.00 | ) | 0.01 | (0.01 | ) | ||||||||
Net loss | $ | (0.87 | ) | $ | (0.60 | ) | $ | (1.35 | ) | $ | (0.60 | ) | |||
DILUTED EARNINGS (LOSS) PER SHARE: | |||||||||||||||
Continuing operations | $ | (0.87 | ) | $ | (0.60 | ) | $ | (1.36 | ) | $ | (0.59 | ) | |||
Discontinued operations | (0.00 | ) | (0.00 | ) | 0.01 | (0.01 | ) | ||||||||
Net loss | $ | (0.87 | ) | $ | (0.60 | ) | $ | (1.35 | ) | $ | (0.60 | ) | |||
Weighted-average shares outstanding: | |||||||||||||||
Basic | 15,792 | 15,707 | 15,764 | 15,699 | |||||||||||
Diluted | 15,792 | 15,707 | 15,764 | 15,699 |
Consolidated Condensed Balance Sheets
(in thousands)
2018 | 2017 | ||||||||||
(Unaudited) | (As Adjusted) | ||||||||||
Current Assets | |||||||||||
Cash and cash equivalents | $ | 18 | $ | 19 | |||||||
Receivables, net | 42,542 | 46,480 | |||||||||
Inventories, net | 105,195 | 113,657 | |||||||||
Prepaid expenses | 5,204 | 4,669 | |||||||||
Total Current Assets | 152,959 | 164,825 | |||||||||
Property, Plant and Equipment, Net | 84,111 | 93,785 | |||||||||
— | 5,850 | ||||||||||
Other Assets | 15,708 | 19,447 | |||||||||
TOTAL ASSETS | $ | 252,778 | $ | 283,907 | |||||||
LIABILITIES AND STOCKHOLDERS' EQUITY | |||||||||||
Current Liabilities | |||||||||||
Accounts payable | $ | 17,779 | $ | 18,541 | |||||||
Accrued expenses | 30,852 | $ | 31,360 | ||||||||
Current portion of long-term debt | 7,794 | 9,811 | |||||||||
Total Current Liabilities | 56,425 | 59,712 | |||||||||
Long-Term Debt | 120,251 | 123,446 | |||||||||
Other Long-Term Liabilities | 17,118 | 21,486 | |||||||||
Stockholders' Equity | 58,984 | 79,263 | |||||||||
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $ | 252,778 | $ | 283,907 |
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 | Twelve Months Ended | |||||||||||
December 29, 2018 | December 29, 2018 | |||||||||||
Net loss as reported | $ | (13,699 | ) | $ | (21,384 | ) | ||||||
Income from discontinued operations | 1 | 95 | ||||||||||
Loss from continuing operations | (13,700 | ) | (21,479 | ) | ||||||||
Unusual worker's compensation | — | 450 | ||||||||||
Legal settlement | — | 1,514 | ||||||||||
Inventory write-off related to Profit Improvement Plan | 1,738 | 2,701 | ||||||||||
Facility consolidation and severance expenses, net | 2,230 | 3,167 | ||||||||||
Impairment of assets | 815 | 1,164 | ||||||||||
Impairment of goodwill and intangibles | 5,545 | 5,545 | ||||||||||
Loss from continuing operations | $ | (3,372 | ) | $ | (6,938 | ) | ||||||
Diluted shares | 15,792 | 15,764 | ||||||||||
Adjusted loss per diluted share | $ | (0.21 | ) | $ | (0.44 | ) |
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 |