CONTACT: Jon Faulkner
Chief Financial Officer
THE DIXIE GROUP REPORTS FOURTH QUARTER 2013 RESULTS
CHATTANOOGA, Tenn. (February 19, 2014) -- The Dixie Group, Inc. (NASDAQ:DXYN) today reported financial results for the year ended December 28, 2013. For the year of 2013, the Company had sales of $345,066,000 and income from continuing operations of $5,358,000, or $0.40 per diluted share, compared with sales of $266,372,000 and loss from continuing operations of $653,000, or $0.05 per diluted share for 2012. On a non-GAAP basis, adjusted income from continuing operations was $8,258,000 or $0.62 per diluted share for the year, compared with an adjusted income from continuing operations of $246,000, or $0.02 per diluted share in 2012.
For the fourth quarter of 2013, the Company had sales of $95,799,000 as compared with sales of $71,134,000 in the fourth quarter of 2012. Income from continuing operations for the fourth quarter of 2013 was $1,598,000 as compared with a loss of $413,000 in the same period in 2012. On a non-GAAP basis, adjusted income from operations was $1,906,000 in the fourth quarter of 2013 as compared to a loss of $69,000 on a non-GAAP basis for the fourth quarter of 2012.
Commenting on the results, Daniel K. Frierson, chairman and chief executive officer, said, “Our sales for the quarter were up 34.7% as compared to sales in the same quarter in the prior year, while the market was only up in the mid-single digits. Our residential product sales for the fourth quarter were up 30.5% on a year over year basis, while the market was only up in the mid-single digits for the comparable period. Our commercial product sales were up 45.5% for the fourth quarter on a year-over-year comparison, while the commercial market was only up in the mid-single digits basis. Our growth was strongest at the beginning of the quarter; however, our December sales were still up over 18% from the previous year’s December period.
“For the entire year of 2013, our sales increase was 29.5% compared to 2012. Our residential product sales were up 28.5% for the year compared to 2012, while the industry, we estimate, was up in the mid-single digit range. In the residential market in 2013, we successfully introduced new products, utilizing the Stainmaster® TruSoft™ and PetProtect™ line of fibers: products that we took a lead position in introducing to the marketplace. Additionally, we continued our double-digit growth in wool continuing our new product success in serving the high-end marketplace. The sales increase in commercial products was 30.1% as compared with an estimated market growth in the low single digits for 2013. Our commercial success over the last year was led by the successful launch of our Speak modular carpet tile and our Fit office remodel collections.
“Dixie’s performance since the historic downturn of 2008 - 2009 has been exceptional. Looking back at the period since 2009, our carpet product sales have grown 68%, while the industry, we estimate, grew only around 12%. During this period, our residential sales have grown 88% while the industry is up less than 10%. Commercially, we grew 28%, while we estimate the industry was up slightly greater than 15%. The growth we have seen has been driven by extensive investment in product, processes and people. The investments we have made have included both capital expenditures and operating cost, which have impacted our operating earnings during this time period. Our sample expense as a percent of carpet sales for the period of 2009-2013 were 32% higher than those for the period from 2006 through 2008. Over time, we anticipate our sample spending will return to a more normal rate or approximately one percentage point less than current S,G&A as a percentage of sales. In addition, we have invested in yarn processing, new tufting and rug technology, and new dyeing technology as we have grown out of this historic industry downturn. Specifically, we increased our Roanoke yarn capacity by over 40%. We purchased, upgraded, and increased the capacity of our Colormaster dyeing facility over the last 15 months. We purchased and started up our new space dye line, providing us with additional yarn capabilities. We acquired the top selling product lines from Gulistan and expanded our residential sales force. We invested in the Crown rug operation, moving it into our California facility and expanding its production capacity. We bought and are currently integrating the Robertex wool business into our Fabrica and Masland product lines.
The following information was filed by Dixie Group Inc (DXYN) on Wednesday, February 19, 2014 as an 8K 2.02 statement, which is an earnings press release pertaining to results of operations and financial condition. It may be helpful to assess the quality of management by comparing the information in the press release to the information in the accompanying 10-K Annual Report statement of earnings and operation as management may choose to highlight particular information in the press release.