CONTACT: Allen Danzey
Chief Financial Officer
THE DIXIE GROUP REPORTS PROFIT FOR THE THIRD QUARTER 2020
Highlights from Third Quarter 2020 Results (all comparisons are to the prior year third quarter):
•Net Income from continuing operations of $906,000 compared to a loss of $2,577,000
•Gross Profit Margin of 25.9%; an improvement of 3.8%
•Secured $25 million in long term fixed rate loans; entered into new $75 million, 5 year senior credit facility; raised borrowing availability to $45 million.
•Announced authorization of $2.9 million stock repurchase plan
DALTON, GEORGIA (November 5, 2020) -- The Dixie Group, Inc. (NASDAQ: DXYN) today reported financial results for the third fiscal quarter ended September 26, 2020. For the third quarter of 2020, the Company had net income from continuing operations of $906,000 or $0.06 per diluted share as compared to a loss of $2,577,000 or $0.16 per diluted share in the third quarter of 2019. For the third quarter of 2020, the Company had net sales of $85,920,000 as compared to $95,447,000 in 2019. For the third quarter of 2020, net sales were down 10% as compared to the same quarter in 2019 but were up 41% compared to the prior quarter.
Subsequent to the end of the third quarter, the Company entered into a new $75 million, five year, Senior Revolving Credit Facility, and also closed on two additional long term, fixed rate, asset backed loans in the total amount of $25 million. The Company currently has no goodwill or intangibles on its balance sheet, and has reduced its debt by $50 million in the last twelve months. Availability under the revolving facility at the close of the transaction was $45 million. Additionally, the Company's Board of Directors approved the repurchase of up to $2.9 million of the Company's common stock. We believe these transactions, together with significant operational improvements, put the Company in a much stronger position going forward.
Commenting on the results, Daniel K. Frierson, Chairman and Chief Executive Officer, said, “We are pleased to report a profit for the third quarter of 2020. We continue our efforts to keep our employees safe through the COVID-19 crisis. To minimize and prevent cases of COVID-19 exposure in our facilities, we have taken measures aimed at enhancing worker safety, including large scale COVID-19 testing, mandatory temperature checks prior to starting work, and requirements to wear masks when unable to maintain social distancing. We are still assessing the long-term impacts of the COVID-19 crisis on our markets and operating practices. We are encouraged by the improvement we have seen in sales, but as a resurgence of COVID-19 cases has been seen in many parts of the country and as government authorities reassess their decisions to lift the restrictions in their jurisdictions, we are cautious as to what the remainder of the year may look like.
In the third quarter, sales continued to recover from the impact of the COVID-19 pandemic. Our third quarter sales were 10% below the same quarter sales in the prior year. Sales of our residential products were up 3% for the quarter, while the industry, we believe, was up closer to 1.5%. Benefiting from strong trends in new home construction and existing home sales, our residential segment saw business conditions continue to improve through the quarter, as many flooring retailers emerged from the COVID-19 downturn, and an increasing number of consumers began home improvement projects. Our specialty retail soft surface business was positive for the third
The following information was filed by Dixie Group Inc (DXYN) on Thursday, November 5, 2020 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-Q Quarterly Report statement of earnings and operation as management may choose to highlight particular information in the press release.