The Dixie Group Reports 2016 Results
CHATTANOOGA, Tenn., March 06, 2017 (GLOBE NEWSWIRE) -- The Dixie Group, Inc. (NASDAQ:DXYN) today reported financial results for the year ended December 31, 2016. For 2016, the Company had net sales of $397,453,000, a 5.9% decrease versus fiscal 2015’s net sales of $422,483,000. Fiscal 2016 was a 53 week period while Fiscal 2015 had 52 weeks in the period. On a comparable 52 week basis, net ...
Commenting on the results,
For the year, gross profit was 24.0% of net sales, a decline from 2015’s 25.1% gross profit percentage. The drop in sales year over year severely impacted our bottom line. Further, the decline in margins in both the first and fourth quarters were impacted by our reducing inventories by
Our interest expense for the year was
Despite this difficult year from a profit perspective, we have made several significant changes to improve our results in the future. We completed our restructuring earlier in the year, setting the stage for a more productive manufacturing environment. This completes the separation of our east coast commercial and residential facilities. Our claims expense has declined significantly as our workforce training has taken effect, improving our quality. We refinanced our debt, pushing out the maturity until 2021. We have reduced our inventory to levels in line with our sales and reflecting the improvements in reduced waste and shorter throughput times. As the quarter ended, the industry announced a price increase based on many increases in cost of both labor and raw material. This price increase included both residential and commercial products.
We launched a series of new distinctive products in our residential market in 2016. In our Fabrica brand we introduced Alluvial with its elegant feeling of movement creating channels of flowing pattern elements. In Masland we are excited about 'This and That', a pattern which whispers a hint of texture with tonal variations that create contrast and visual depth. With the introduction of many beautiful new products and the disruption of the restructuring behind us, our residential brands should outperform the industry as we have over the last 5 years.
Our Atlas brand successfully launched our Bellissimo Collection, made with our multi-color Visionweave technology. Masland Contract has a success with Lava. With its larger scale pattern, Lava can create fluid form in contemporary contract design projects. Commercially last year we lagged the industry due to our lack of growth in modular carpet tile products. To remedy this situation, we moved our Avant offering into the Masland Contract brand to give these products greater exposure and introduced a number of new modular products at Masland and Atlas. We are beginning to see the results of this effort in our current business.
In the coming years, the housing market will be in the middle of two massive demographic waves, millennials and baby boomers, with both groups driving demand for at least the next decade. This trend should provide steady growth in the floorcovering market. We are particularly pleased with the growth in single family housing and the rate of existing home sales. We plan to capitalize on this opportunity while recognizing the dramatic change in the flooring marketplace as hard surface products have grown significantly faster than soft surface products over the last several years. Therefore, we are entering into the hard surface market through several initiatives in both our residential and commercial brands. We first introduced the Calibrè line of luxury vinyl tile products this past fall in our Masland Contract brand. Masland Contract has brought their own unique styling to the market as they do with their soft flooring categories. These products have been engineered to be high performance, available for quick delivery, with exceptional styling and a great value.
Residentially, our
From a sales and marketing perspective we have promoted
We have anticipated modest sales growth for the industry in 2017 as we have put together our plans for the year. Our floorcovering sales and orders for the first 9 weeks of the quarter are both up approximately 8%. Our total sales are up just under 6% over the same period in 2016; the difference as compared to our overall sales is due to our processing sales being down significantly as we have diverted our yarn production from external sales to internal consumption. We continue to be focused on cutting costs through select investments, such as the ongoing project to bring our beck dying in
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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)
Three Months Ended | Twelve Months Ended | ||||||||||||||
2016 | 2015 | 2016 | 2015 | ||||||||||||
$ | 102,606 | $ | 107,763 | $ | 397,453 | $ | 422,483 | ||||||||
Cost of sales | 80,760 | 81,443 | 302,028 | 316,253 | |||||||||||
GROSS PROFIT | 21,846 | 26,320 | 95,425 | 106,230 | |||||||||||
Selling and administrative expenses | 25,223 | 24,207 | 96,983 | 100,422 | |||||||||||
Other operating (income) expense, net | (124 | ) | 188 | 401 | 872 | ||||||||||
Facility consolidation expenses, net | (359 | ) | 682 | 1,456 | 2,946 | ||||||||||
OPERATING INCOME (LOSS) | (2,894 | ) | 1,243 | (3,415 | ) | 1,990 | |||||||||
Interest expense | 1,423 | 1,332 | 5,392 | 4,935 | |||||||||||
Other expense, net | 7 | 2 | 22 | 47 | |||||||||||
Loss from continuing operations before taxes | (4,324 | ) | (91 | ) | (8,829 | ) | (2,992 | ) | |||||||
Income tax provision (benefit) | (1,686 | ) | 407 | (3,622 | ) | (714 | ) | ||||||||
Loss from continuing operations | (2,638 | ) | (498 | ) | (5,207 | ) | (2,278 | ) | |||||||
Loss from discontinued operations, net of tax | (79 | ) | (30 | ) | (131 | ) | (148 | ) | |||||||
Income (loss) on disposal of discontinued operations, net of tax | (5 | ) | — | 60 | — | ||||||||||
NET LOSS | $ | (2,722 | ) | $ | (528 | ) | $ | (5,278 | ) | $ | (2,426 | ) | |||
BASIC EARNINGS (LOSS) PER SHARE: | |||||||||||||||
Continuing operations | $ | (0.17 | ) | $ | (0.03 | ) | $ | (0.33 | ) | $ | (0.15 | ) | |||
Discontinued operations | (0.01 | ) | (0.00 | ) | (0.01 | ) | (0.01 | ) | |||||||
Disposal of discontinued operations | (0.00 | ) | — | 0.00 | — | ||||||||||
Net loss | $ | (0.18 | ) | $ | (0.03 | ) | $ | (0.34 | ) | $ | (0.16 | ) | |||
DILUTED EARNINGS (LOSS) PER SHARE: | |||||||||||||||
Continuing operations | $ | (0.17 | ) | $ | (0.03 | ) | $ | (0.33 | ) | $ | (0.15 | ) | |||
Discontinued operations | (0.01 | ) | (0.00 | ) | (0.01 | ) | (0.01 | ) | |||||||
Disposal of discontinued operations | (0.00 | ) | — | 0.00 | — | ||||||||||
Net loss | $ | (0.18 | ) | $ | (0.03 | ) | $ | (0.34 | ) | $ | (0.16 | ) | |||
Weighted-average shares outstanding: | |||||||||||||||
Basic | 15,659 | 15,590 | 15,638 | 15,536 | |||||||||||
Diluted | 15,659 | 15,590 | 15,638 | 15,536 | |||||||||||
Consolidated Condensed Balance Sheets
(in thousands)
2016 | 2015 | ||||||
ASSETS | (Unaudited) | ||||||
Current Assets | |||||||
Cash and cash equivalents | $ | 140 | $ | 281 | |||
Receivables, net | 43,605 | 50,806 | |||||
Inventories, net | 97,237 | 115,146 | |||||
Other | 4,376 | 3,362 | |||||
Total Current Assets | 145,358 | 169,595 | |||||
Property, Plant and Equipment, Net | 92,807 | 101,146 | |||||
6,156 | 6,461 | ||||||
Other Assets | 24,666 | 21,016 | |||||
TOTAL ASSETS | $ | 268,987 | $ | 298,218 | |||
LIABILITIES AND STOCKHOLDERS' EQUITY | |||||||
Current Liabilities | |||||||
Accounts payable and accrued expenses | $ | 53,509 | $ | 60,821 | |||
Current portion of long-term debt | 10,122 | 10,142 | |||||
Total Current Liabilities | 63,631 | 70,963 | |||||
Long-Term Debt | 98,256 | 115,907 | |||||
Other Liabilities | 19,978 | 20,544 | |||||
Stockholders' Equity | 87,122 | 90,804 | |||||
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $ | 268,987 | $ | 298,218 | |||
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
Non-GAAP Summary | ||||||||||||||||||
Twelve Months Ended | ||||||||||||||||||
Net Sales As Adjusted | 2016 | Week 53 | Adjusted 2016 | 2015 | Increase (Decrease) | as Adjusted % Change | ||||||||||||
Net Sales As Adjusted (Note 1) | $ | 397,453 | $ | (5,380 | ) | $ | 392,073 | $ | 422,483 | $ | (30,410 | ) | (7.2)% | |||||
The Company defines |
Further non-GAAP reconciliation data are available at www.thedixiegroup.com under the Investor Relations section.
CONTACT:Source:Jon Faulkner Chief Financial Officer 706-876-5814 jon.faulkner@dixiegroup.com