Dixie Group Reported Financial Results for The Second Quarter Ended June 28, 2014

 Income from continuing operations, excluding manufacturing integration, facility consolidation, asset impairment and acquisition related pre-tax expenses of $2,221,000 was $772,000 after-tax (non-GAAP adjusted income from continuing operations, as set forth herein), or $0.05 per diluted share for the period.

 

Commenting on the results, Daniel K. Frierson, chairman and chief executive officer, said, “We continued our strong sales growth relative to the industry. Our sales increase for the quarter was 29.4% on a year-over-year basis and 14.8% without the addition of Atlas Carpet Mills, acquired in March of this year. The market, however, was up only slightly. Our sales increase in the second quarter for residential products was 13.7% ahead of the same quarter last year, relative to the market declining slightly on the same comparable basis. The second quarter sales increase for our commercial products was 83.5% ahead of the same time period last year. 

 

“Without Atlas, the increase was 24.4% for the second quarter as compared with the same time period last year and relative to a year-over-year market increase in the low-single digits. All of Dixie’s brands, other than the Atlas Carpet Mills brand, were up for the second quarter on a year-over-year basis. We anticipate Atlas sales to pick up as new product introductions are released late in the year. Additionally, the industry implemented a price increase, starting in June. However, the full impact will not be felt until later this summer. We largely completed the launch of the Desso Masland Hospitality joint venture during the second quarter. Further, our new product introductions over the last twelve months continue to show strong sales growth.

 

“The second quarter was a transitional quarter operationally, with operations improving throughout the quarter but still not fully up to expectations. We completed the shutdown of the Atlas dye house in May. It is under contract for sale in the third quarter of this year. We are still installing additional equipment in our Susan Street facility to accommodate the dyeing needs of Atlas. That should be completed in the third quarter. The first step in our east coast warehouse re-alignment process began with the installation of equipment into our new Adairsville facility in May and the formal opening in mid-June.”