Dixie Group Reported Financial Results for The First Quarter Ended March 29, 2014

The Dixie Group, Inc. reported financial results for the first quarter ended March 29, 2014. For the first quarter of 2014, the Company had sales of $85,313,000 and income from continuing operations of $3,308,000, or $0.24 per diluted share, compared with sales of $75,440,000 and income from continuing operations of $651,000, or $0.05 per diluted share for the same quarter in 2013. The Company had an operating loss of $2,469,000 for the period offset by a gain on the acquisition of Atlas Carpet Mills.

Commenting on the results, Daniel K. Frierson, chairman and chief executive officer, said, “The first quarter was a difficult quarter operationally, both due to external events as well as our internal operations not performing up to expectations. The January and February period stood in contrast to the months of March and April.

Our order entry for carpet products for January and February were up 6.8% on a year-over-year basis while for March and April, excluding Atlas, our order entry was up 17.0% as compared to the prior year. Likewise, our carpet product sales for the January and February period were up 8.8% while our sales for the March and April period, excluding Atlas, were up 12.7% relative to the prior year. Our sales rate in the March and April period was more in line with our expectations, and therefore our cost structure.

“Our sales for the quarter were up 13.1% as compared with sales in the same quarter in the prior year. Without Atlas Carpet Mills our sales were up 10.9% while the market was down, we estimate, by a few percentage points. Our residential product sales for the first quarter were up 9.4% on a year over year basis, while the market was down, we believe, in the low single digits for the comparable period.

Our commercial carpet sales were up 18.0% versus the first quarter of 2013. Without the acquisition of Atlas Carpet Mills, our commercial product sales were up 9.6% for the first quarter on a year-over-year comparison, while we estimate the commercial market was flat.