Dixie Group Inc (DXYN) 10-Q Quarterly Report May 2021

Despite the unprecedented challenges faced in the COVID-19 pandemic affected year of 2020, we were able to improve our operations, and further strengthen our balance sheet to better position our Company as we entered 2021 with momentum and optimism.

•We reduced debt by $10 million in 2020 bringing our total debt reduction to $60 million over the last thirty months.

•We entered into a new $75 million line of credit and two long term loans totaling $25 million. These transactions, along with cost reductions and operating efficiencies in 2020, allowed us to end the year with borrowing availability of $43.3 million under our new Senior Revolving Credit Facility.

•Operational improvements and cost reductions generated higher gross profit margins. Our gross profit margin for the year ended December 26, 2020 was 24.2% compared with 23.0% in the year ended December 28, 2019.

For the year 2020, net sales for the Company were $315,939,000 as compared to $374,582,000 in the year 2019. The net loss on the year 2020 was $9,208,000 compared to a net income of $15,271,000 in the previous year. The decline in sales and the loss in 2020 were primarily driven by the impact of the COVID-19 pandemic. Net income in 2019 was the result of the sale of our facility in Santa Ana, California which generated a $25 million gain in the fourth quarter of 2019. On a non-GAAP adjusted basis, the Company had a net loss of $2.8 million in 2020 and a net loss of $3.9 million in 2019.

Commenting on the results, Daniel K. Frierson, Chairman and Chief Executive Officer, said, “2020 was a year of unprecedented circumstances and a once-in-a-century event – the COVID-19 pandemic. Not knowing where the COVID-19 pandemic would lead, we implemented our continuity plan to maintain the health and safety of our associates, preserve cash and minimize the impact on our customers. To minimize and prevent cases of COVID-19 exposure in our facilities, we have taken measures aimed at sanitation and safety, including large scale COVID-19 testing, mandatory temperature checks prior to starting work, requirements to wear masks when unable to maintain social distancing and deep cleaning and sanitation. We limited travel for our associates, implemented work from home options where appropriate, and limited physical contact with our customers. We reduced our running schedules in our facilities to below demand, to maintain order flow to our customers while simultaneously reducing inventories to generate cash and align them with our lower customer demand. In order to preserve cash, we placed a large percentage of our associates either on rotating layoff or furlough. We eliminated or deferred planned spending of $14 million in 2020. These cost cuts included deferring maintenance when possible, reduced capital expenditures, instituting select job eliminations, and temporary salary reductions. Our management team worked together to implement our continuity plan which has resulted in improved operating results. During the year, we were able to decrease selling and administration costs through headcount reductions and lower spending. Operationally, we have experienced significant improvement in quality, waste reduction and cost. At the same time, we were able to maintain superior customer service and outperformed many of our competitors in this area. In

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The following information was filed by Dixie Group Inc (DXYN) on Thursday, March 4, 2021 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.

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Inside Dixie Group Inc's 10-Q Quarterly Report:

Financial - Expense Highlight
The following important factors may affect our future results and could cause those results to differ materially from our historical results; these factors include, in addition to those "Risk Factors" detailed in item 1A of this report, and described elsewhere in this document, the cost and availability of capital, raw material and transportation costs related to petroleum price levels, the cost and availability of energy supplies, the loss of a significant customer or group of customers, the ability to attract, develop and retain qualified personnel, materially adverse changes in economic conditions generally in carpet, rug and floorcovering markets we serve and other risks detailed from time to time in our filings with the Securities and Exchange Commission.

Financial - Expense Highlight
Expense reductions from our COVID-19 Continuity Plan contributed to lower selling and administrative expenses.
Revenue - Product Highlight
Our residential product sales were up 23% for the quarter as compared to the prior year while the industry, we believe, was up similarly in the higher teens.
Other - Other Highlight
Such benefits, if recognized, would affect the Company's effective tax rate.
Revenue - Product Highlight
The increase in accounts receivable at March 2021 quarter end reflects the increased sales volume for the period.
Financial - Expense
The expenses in the first...Read more
Revenue - Product
Increased net sales of our...Read more
Financial - Expense
Facility consolidation expenses recorded in...Read more
Other - Other
The Company is in a...Read more
Financial - Expense
The increase is partially the...Read more
Revenue - Product
Three Months Ended March 27,...Read more
Other - Other
The differences between the two...Read more
Revenue - Product
Commercial product sales decreased 37%...Read more
Other - Other
Significant additional cash expenditures above...Read more
Financial - Income
Table of Contents 26 Other...Read more
Other - Other
Inventories increased $4.3 million as...Read more
Other - Other
Once the extent of the...Read more
Other - Other
There can be no assurance...Read more
Other - Other
We focus primarily on the...Read more

Financial Statements, Disclosures and Schedules

Inside this 10-Q Quarterly Report

Material Contracts, Statements, Certifications & more

Dixie Group Inc provided additional information to their SEC Filing as exhibits

Exhibit 31.1: Rule 13A-14(A)/15D-14(A) Certification

Exhibit 31.2: Rule 13A-14(A)/15D-14(A) Certification

Exhibit 32.1: Section 1350 Certification

Exhibit 32.2: Section 1350 Certification

Ticker: DXYN
CIK: 29332
Form Type: 10-Q Quarterly Report
Accession Number: 0000029332-21-000055
Submitted to the SEC: Mon May 17 2021 4:23:52 PM EST
Accepted by the SEC: Mon May 17 2021
Period: Saturday, March 27, 2021
Industry: Carpets And Rugs