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The Dixie Group(DXYN) - 2025 Q1 - Earnings Call Presentation
2025-05-12 07:24
Exhibit 99.1 May 2025 Investor Presentation Contact: Allen Danzey CFO The Dixie Group Phone: 706-876-5865 allen.danzey@dixiegroup.com Forward Looking Statements The Dixie Group, Inc. 2 • Statements in this presentation which relate to the future, 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 ...
The Dixie Group(DXYN) - 2025 Q1 - Earnings Call Transcript
2025-05-09 15:00
Financial Data and Key Metrics Changes - For Q1 2025, the company reported net sales of $62.99 million, a decrease of 3.5% from $65.25 million in Q1 2024 [2][3] - The operating income improved to $11,000 in Q1 2025 from an operating loss of $857,000 in Q1 2024 [2][5] - The net loss from continuing operations was $1.58 million or $0.11 per diluted share, compared to a net loss of $2.41 million or $0.16 per diluted share in the same quarter of 2024 [3] Business Line Data and Key Metrics Changes - Sales of soft floor covering products outperformed hard surface products, with continued market share gains in the soft surface category [3] - Gross margins improved to $16.90 million or 26.8% of net sales, compared to $15.80 million or 24.2% of net sales in the prior year [4] Market Data and Key Metrics Changes - The industry is experiencing weak market conditions due to low existing home sales and lower consumer confidence [3] - The residential remodeling market continues to face a multiyear slump, with uncertainty regarding when market dynamics will change [11] Company Strategy and Development Direction - The company is focused on creating differentiated styles for the residential market, emphasizing color, pattern, and texture [10] - Efforts are being made to minimize expenses, reduce overhead costs, and improve gross margins [12] - The company has closed on a new $75 million senior credit facility to support operations and manage costs effectively [7][12] Management's Comments on Operating Environment and Future Outlook - Management noted that low consumer confidence was impacted by uncertainty around tariff increases, with some industry players announcing price increases to mitigate these impacts [9] - The company believes that actions taken during the current difficult environment will position it well for an eventual market upturn [13] Other Important Information - The company has seen improvements in operations, including productivity, quality, and raw material utilization [11] - The first quarter trade show showcased 25 new styles of carpet and eight hard surface collections, which were well received [10] Q&A Session Summary Question: Is the stock buyback program still in effect? - The stock buyback program is no longer in effect as it was ceased during the latter part of the previous year [16] Question: Are there signs of consolidation in the industry? - There has not been much consolidation at the manufacturing level, although some smaller retailers have gone out of business [17] Question: Have buying habits changed between big box stores and boutique retailers? - Premium products are performing better than the market overall, with the Fabrica brand doing exceptionally well [18]
The Dixie Group(DXYN) - 2025 Q1 - Quarterly Results
2025-05-09 11:45
Financial Performance - In Q4 2024, net sales were $64.39 million, a decrease of 3.8% from $66.67 million in Q4 2023[2] - The net loss for Q4 2024 was $7.20 million, compared to a net income of $3.16 million in Q4 2023, which included an $8.20 million gain on asset sale[2] - For the fiscal year 2024, net sales totaled $265.03 million, down 4.1% from $276.34 million in 2023[2] - The gross margin for fiscal year 2024 was 24.7%, down from 26.7% in 2023, primarily due to under absorbed fixed costs and higher utility and medical expenses[10] Cost Management - The company achieved a cost reduction plan exceeding $10 million in 2025, alongside a planned reduction in inventory[7] - Selling and administrative expenses decreased by $4.3 million or 5.8% in 2024 compared to 2023[10] Capital Expenditures and Financing - Capital expenditures in 2024 were $2.1 million, an increase from $1.0 million in 2023[11] - The company closed a new $75 million senior credit facility in February 2025, replacing the previous facility[9] Inventory Management - Net inventories decreased by $9.4 million or 12.3% from the fiscal year end 2023 due to planned reductions and write downs[11] Product Development - The company experienced growth in higher-end product offerings, particularly in decorative programs and nylon carpet[5]
The Dixie Group(DXYN) - 2024 Q4 - Earnings Call Transcript
2025-04-10 21:43
Financial Data and Key Metrics Changes - In Q4 2024, net sales were approximately $64.4 million, down from $66.7 million in Q4 2023 [2] - The net loss for Q4 2024 was $7.2 million compared to a net loss of $3.2 million in Q4 2023, which included an $8.2 million gain on the sale of assets [3] - For the fiscal year 2024, net sales were $265 million, down 4.1% from $276 million in 2023 [4] - The net loss from continuing operations for 2024 was $12.2 million or $0.83 per diluted share, compared to a net loss of $1.95 million or $0.13 per diluted share in 2023 [3] - Gross profit margin in 2024 was 24.7% of net sales, down from 26.7% in the prior year [5] Business Line Data and Key Metrics Changes - Selling and administrative expenses in 2024 were reduced by $4.3 million or 5.8% of net sales due to planned cost-cutting initiatives [5] - Facility consolidation expenses were $2.5 million lower than the prior year, including additional write-downs of idled assets [6] - The company reduced costs by over $35 million in 2023 and further reduced costs by over $10 million in 2024 [11] Market Data and Key Metrics Changes - Existing home sales have declined dramatically from over 6 million homes per year to under 4 million, impacting the industry significantly [9] - The actual square yards of carpet chips have decreased by 25% over the last three years [10] Company Strategy and Development Direction - The company has focused on cost reduction and restructuring to align capacity with current volume, reducing the number of associates by approximately 28% over the last three years [11] - Investment in extrusion equipment aims to provide lower-cost raw materials and ensure a consistent supply [12] - The company is expanding its product offerings, including hard surface products under the TrueCore brand and enhancing its high-end wood program [13][14] Management Comments on Operating Environment and Future Outlook - The management noted that the industry has been in a recession for several years, with existing home sales at the lowest point since 1995 [9] - The company anticipates further cost reductions exceeding $10 million in 2025 and continues to manage working capital effectively [11][17] - The impact of tariffs on imported products is uncertain, but the company is prepared to take appropriate actions as needed [16] Other Important Information - The company closed a new $75 million senior credit facility, enhancing its financial position [8] - The company has maintained low capital expenditures except for investments in extrusion equipment [11] Q&A Session Summary Question: What percent of hard surfaces is imported from China? - Very little is imported from China, with imports coming from Thailand, Cambodia, Vietnam, and some from Europe [19] Question: How quickly can the company pass along price increases due to tariffs? - It is unclear, but it is likely that price increases will be passed on quickly as tariffs become impactful [22] Question: What was the amount of the Q4 inventory write-down? - The overall reduction in inventory was $9.8 million, with additional reserves made for excess inventory [25][26] Question: How soon will the company achieve the $10 million cost reduction? - The company is very close to that level today, with most of the reductions planned months ago [27] Question: Is there potential benefit from tariffs for the soft side of the business? - It depends on where the tariffs end up, but imports are not a major factor for the domestic tufted carpet business [34] Question: Is the full amount of $12.2 million available to borrow under the new credit facility? - Yes, the $12.2 million includes the $6 million excess availability [35]
The Dixie Group(DXYN) - 2024 Q4 - Annual Report
2025-04-07 21:58
Financial Performance - Net sales for the fiscal year ended December 28, 2024, were $265.0 million, a decrease of 4.1% compared to $276.3 million in 2023[106][108] - Gross profit decreased by 11.3% to $65.5 million, with gross profit as a percentage of net sales dropping from 26.7% in 2023 to 24.7% in 2024[106][109] - Operating loss for 2024 was $5.9 million, a significant decline from an operating income of $5.0 million in 2023, primarily due to increased costs and lower sales volume[106][113] - The net loss for 2024 was $13.0 million, or $0.88 per diluted share, compared to a net loss of $2.7 million, or $0.18 per diluted share, in 2023[106][118] Cash Flow and Debt - Cash provided by continuing operations was $3.6 million, with a reduction in inventories generating $9.4 million[120] - The company had $50.0 million of outstanding indebtedness under its senior credit facility as of December 28, 2024, maturing on October 30, 2025[123] - On February 25, 2025, the company entered into a new three-year $75.0 million senior secured credit facility with MidCap Financial IV Trust[123] - The unused borrowing availability under the revolving credit facility was $9.9 million as of December 28, 2024[129] - The company entered into a $10.0 million principal amount USDA Guaranteed term loan with a minimum interest rate of 5.00% and a term of 25 years[130] - The company also secured a $15.0 million principal amount USDA Guaranteed term loan with a minimum interest rate of 5.00% and a term of 10 years[131] Expenses and Income - Selling and administrative expenses decreased to $69.9 million in 2024 from $74.1 million in 2023, representing 26.4% of net sales[106][110] - Other operating income was a net expense of $200 thousand in 2024, compared to income of $9.2 million in 2023 due to the sale and leaseback of the Adairsville distribution center[106][111] Compliance and Valuation - The company received notice from Nasdaq regarding non-compliance with the minimum bid price requirement, leading to delisting from Nasdaq effective October 3, 2024[105][122] - Valuation allowances increased by $3.8 million related to net deferred tax assets and specific federal and state net operating losses for the year ended December 28, 2024[136] - At December 28, 2024, the company had valuation allowances of $24.7 million compared to $21.0 million at December 30, 2023[146] Interest Rates and Liabilities - As of December 28, 2024, the applicable margin on the revolving credit facility was 2.50% for SOFR and 1.50% for Prime due to the fixed charge coverage ratio being below 1.10 to 1.00[127] - The weighted-average interest rate on borrowings outstanding under the revolving credit facility was 7.18% at December 28, 2024, compared to 8.15% for December 30, 2023[128] - Approximately 86% of the company's total debt, amounting to $71,960, was subject to floating interest rates as of December 28, 2024[148] - A one-hundred basis point fluctuation in the variable interest rates applicable to floating rate debt would have an annual pre-tax impact of approximately $720[148] Environmental Liabilities - The company has a reserve of $2.2 million for environmental liabilities associated with discontinued operations as of December 28, 2024[138]
The Dixie Group(DXYN) - 2024 Q2 - Earnings Call Transcript
2024-08-11 12:35
Financial Data and Key Metrics Changes - Net sales in Q2 2024 were $70.5 million, down approximately 4.7% from $74 million in Q2 2023 [2][4] - Gross profit margin improved to 28.1% in Q2 2024 from 26.7% in Q2 2023 [2][4] - Operating income increased to $2.3 million in Q2 2024 from $300,000 in Q2 2023 [2] - Net income from continuing operations was $700,000 in Q2 2024, compared to a net loss of $1.6 million in the same period of the prior year [2][6] - Year-to-date gross margins were 26.2%, slightly down from 26.7% in the prior year [5] Business Line Data and Key Metrics Changes - Net sales from soft surfaces were less than 1% below the prior year, while the industry was down approximately 5% [3] - Hard surface business was down in the range of 15% to 20% for the quarter [18] Market Data and Key Metrics Changes - The housing and home remodeling market is negatively impacted by high interest rates and inflation [3][12] - Existing home sales have decreased from over six million units to below four million, the lowest since 1995 [12] Company Strategy and Development Direction - The company is focused on cost reduction initiatives, with a target of $10 million to $12 million in savings for the year [12] - The extrusion facility is operational and providing cost reductions in nylon fiber, which supports new carpet styles [8][10] - The company launched 18 new carpet styles and six new collections in Q2 2024, completing its new product launches for the year [9][10] Management's Comments on Operating Environment and Future Outlook - Management expects interest rates to decline later this year or early next year, which could improve the industry [12] - The company does not anticipate improvement in Q3 2024, as current performance lags behind last year [13] - Management is optimistic about the leasing of the Saraland facility, which will positively impact income and cash flow [13] Other Important Information - The company completed a 10-year sublease agreement for warehouse space, expected to generate approximately $1.8 million in annual income [2][19] - Selling and administrative expenses were lower in dollars and as a percentage of net sales compared to the prior year due to cost-cutting initiatives [6] Q&A Session Summary Question: Will the new product launches impact SG&A in the back half? - Management indicated that expenses related to sampling activities are spread in line with sales, so the impact will be minimal, but it will positively affect cash flow [14] Question: How much of the $10 million in cost savings has been achieved? - Approximately 35% to 40% of the cost savings have been achieved in the first half, with the remainder expected in the second half [15] Question: Are the gross margins sustainable? - Management confirmed that there were no significant one-time factors affecting the gross margins, indicating they are sustainable at current revenue levels [17] Question: What is the status of the hard surfaces business? - The hard surfaces business was confirmed to be down in the range of 15% to 20%, which is less than 20% of total business [18] Question: Is the $1.8 million in sublease income incremental? - The income is mostly incremental, with some existing lease revenue already in place [19] Question: What is the expected cash CapEx for the back half of the year? - Expected cash CapEx is in the range of $9.2 million to $9.4 million, with $1 million to $1.5 million allocated for general maintenance projects [22]
The Dixie Group(DXYN) - 2024 Q2 - Quarterly Results
2024-08-08 12:24
Financial Performance - Net sales for Q2 2024 were $70.5 million, a decrease of 4.5% from $74.0 million in Q2 2023[2] - Gross profit margin improved to 28.1% in Q2 2024, up from 26.7% in Q2 2023[9] - Operating income increased to $2.3 million in Q2 2024, compared to $0.3 million in Q2 2023[3] - Net income from continuing operations was $0.7 million, or $0.04 per diluted share, compared to a net loss of $1.6 million, or $0.11 per diluted share, in Q2 2023[3] - For the first six months of 2024, net sales were $135.8 million, down 3.8% from $141.1 million in the same period of 2023[4] - Sales in Q3 2024 to date are approximately 5.5% below the comparable period in the prior year[11] Cost Management - The company expects to reduce year-over-year costs by over $10 million in 2024 through cost-saving initiatives[8] New Product Launches - The company launched 18 new carpet styles and 6 new collections with 38 SKUs in Q2 2024, contributing to sales volume[8] Assets and Liabilities - Total assets increased to $198,492,000 as of June 29, 2024, up from $191,169,000 on December 30, 2023, reflecting a growth of approximately 3.4%[15] - Current assets rose to $115,329,000, compared to $112,395,000 at the end of 2023, indicating an increase of about 2.6%[15] - Cash and cash equivalents increased slightly to $83,000 from $79,000, showing a growth of 5.1%[15] - Receivables, net grew to $28,019,000, up from $23,686,000, representing an increase of approximately 18.4%[15] - Total current liabilities increased to $44,813,000 from $39,554,000, marking a rise of about 13.5%[15] - Long-term debt, net rose to $82,699,000, compared to $78,290,000, reflecting an increase of approximately 5.5%[15] - Stockholders' equity decreased to $27,304,000 from $29,291,000, a decline of about 6.8%[15] - Accounts payable increased significantly to $19,371,000 from $13,935,000, indicating a rise of approximately 39.5%[15] - Operating lease liabilities decreased slightly to $24,206,000 from $25,907,000, a reduction of about 6.6%[15] - Inventories, net remained relatively stable at $76,131,000 compared to $76,211,000, showing a negligible change[15] Capital Expenditures - Capital expenditures for the full fiscal year 2024 are planned at $9.4 million[10] Sublease Agreement - A 10-year sublease agreement was completed for warehouse space, expected to generate approximately $1.8 million in annual income[2]
The Dixie Group(DXYN) - 2024 Q1 - Earnings Call Transcript
2024-05-03 21:34
Financial Data and Key Metrics Changes - The company reported net sales of $65.254 million for Q1 2024, a decrease of approximately 2.7% compared to roughly $67 million in the same quarter of the previous year [2][4] - An operating loss of $857,000 was recorded, contrasting with an operating income of $306,000 in Q1 2023 [2] - The net loss from continuing operations was $2.41 million or $0.16 per diluted share, compared to a net loss of $1.551 million or $0.11 per diluted share in Q1 2023 [2] Business Line Data and Key Metrics Changes - The gross profit margin for Q1 2024 was 24.2% of net sales, down from 26.6% in the same quarter of the prior year, primarily due to lower production volumes [6] - Selling and administrative expenses were aligned with the prior year but increased as a percentage of lower net sales, at 25.1% compared to 24.5% in the prior year [7] Market Data and Key Metrics Changes - The overall industry was believed to be down approximately 8%, while the company's net sales were only down 2.7%, indicating better performance relative to the industry [4][5] Company Strategy and Development Direction - The company is focusing on cost reduction, implementing a $10 million cost reduction plan following a successful $35 million reduction last year [15] - New product launches include 14 new carpet styles, with a focus on high-end divisions and a color marketing campaign to enhance consumer engagement [12][13] - The company has begun extruding its own raw materials to reduce costs and ensure supply stability [12] Management's Comments on Operating Environment and Future Outlook - Management expressed that the company is at the bottom of a down cycle but anticipates improvement with lower interest rates in the future [11] - The first quarter is typically the slowest, but there was a noted seasonal improvement in March, with net sales slightly ahead of the same month last year [11] - Management remains cautious about the timeline for significant business improvement due to ongoing high interest rates [20] Other Important Information - The company’s quarter-end receivables increased by $4.5 million, while inventory decreased by $1.2 million, reflecting a strategy to align inventory with demand [8] - The Board of Directors approved a stock repurchase plan of up to $2.8 million, set to begin on or about May 8 [16] Q&A Session Summary Question: How will the company navigate the current environment with high interest rates affecting remodeling activity? - Management acknowledged the challenges posed by high interest rates but emphasized ongoing cost-cutting measures and the potential for profitability despite the environment [20] Question: What is the timeline for the $10 million savings plan? - The $10 million savings will be distributed over the next 12 months, with some impact already seen in the first quarter [25] Question: Any updates on the NASDAQ listing regarding the stock being under $1? - The company has received an extension until September of this year to address the listing deficiency [26]
The Dixie Group(DXYN) - 2024 Q1 - Quarterly Results
2024-05-02 12:07
Financial Performance - Net sales for the first quarter of 2024 were $65.3 million, a decrease of 2.7% compared to $67.1 million in the same period of 2023[3] - The operating loss for the first quarter of 2024 was $857,000, compared to an operating income of $306,000 in the first quarter of 2023[3] - The net loss from continuing operations in the first quarter of 2024 was $2.41 million, or $0.16 per diluted share, compared to a net loss of $1.55 million, or $0.11 per diluted share, in the same quarter of 2023[3] - The gross profit margin for the first quarter of 2024 was 24.2% of net sales, down from 26.6% in the first quarter of 2023[7] Product Development - The company launched 14 new carpet styles in the first quarter, including 11 high-end EnVision Nylon styles[6] Cost Management - The company plans to reduce year-over-year costs by $10 million in 2024 through cost savings related to extrusion operations[7] Capital Expenditures - Capital expenditures for the full fiscal year 2024 are planned at $9.4 million, with $2.9 million funded by cash investment within the year[10] Shareholder Actions - The company's Board of Directors approved a stock repurchase plan of up to $2.8 million[11] Sales Trends - In the first four weeks of the second quarter of 2024, net sales were approximately 4% above the comparable period in the prior year[12] Receivables - The company experienced an increase in receivables by $4.5 million due to higher sales in the last month of the first quarter 2024[10]
The Dixie Group(DXYN) - 2023 Q4 - Annual Report
2024-03-20 20:48
Financial Performance - Net sales for the fiscal year ended December 30, 2023, were $276.3 million, a decrease of 9.0% compared to $303.6 million in 2022[92]. - Gross profit increased by 37.8% to $73.9 million, with gross profit margin rising to 26.7% from 17.7% in the previous year[92][93]. - Selling and administrative expenses decreased to $74.1 million in 2023 from $76.9 million in 2022, representing 26.8% of net sales[96]. - Operating income improved to $5.0 million in 2023 from an operating loss of $28.2 million in 2022, marking a significant turnaround[99]. - Net loss narrowed to $2.7 million, or $0.18 per diluted share, compared to a net loss of $35.1 million, or $2.32 per diluted share, in 2022[104]. Cash Flow and Investments - Cash provided by continuing operations was $4.2 million, driven by a reduction in receivables and a decrease in inventories[105]. - Net cash provided by investing activities was $15.1 million, primarily from the sale of the Adairsville distribution center[106]. - On December 14, 2023, the company sold its distribution center in Adairsville, Georgia for $11.0 million and completed a sale and leaseback, paying off an existing note of $10.4 million[114]. Debt and Interest - Interest expense increased to $7.2 million in 2023 from $5.3 million in 2022 due to higher interest rates[100]. - The company has $14.1 million of unused borrowing availability under its revolving credit facility as of December 30, 2023[111]. - Approximately 85% of the company's total debt, amounting to $71,494 thousand, is subject to floating interest rates, with a potential annual pre-tax impact of $715 thousand from a 100 basis point fluctuation[131]. - The company has other financing notes with interest rates ranging from 6.34% to 7.84%, due in monthly installments[116]. Tax and Liabilities - The effective income tax rate was a provision of 12.3% in 2023, compared to a benefit of 0.26% in 2022[102][103]. - The company anticipates cash outlays for income taxes during 2024 and 2025 will not exceed $200 thousand due to tax loss carryforwards[120]. - As of December 30, 2023, the company had a net deferred tax liability position of $91 thousand, with valuation allowances of $21.0 million[120]. - The company has a reserve of $2.2 million for environmental liabilities associated with discontinued textile businesses as of December 30, 2023[121]. Compensation and Stock - The total unrecognized compensation expense related to unvested restricted stock awards was $1.1 million as of December 30, 2023, with a weighted-average vesting period of 6.9 years[117]. - The company recorded total purchases from Engineered Floors of approximately $64 thousand in 2023, representing about 0.03% of its cost of sales[123]. Off-Balance Sheet Arrangements - The company has no off-balance sheet arrangements as of December 30, 2023[118]. Lease Agreements - The company entered into a 10-year operating lease for the Adairsville property with an initial annual rent of $1.5 million, increasing to $1.6 million in the second five years[114].