The Dixie Group registers strong growth in Q3
The Dixie Group Inc reported financial results for the third quarter ended October 1, 2011. In the third quarter of 2011, the Company had sales of $69,607,000 and income from continuing operations of $22,000, or $0.00 per diluted share, compared with a loss from continuing operations of $1,869,000, or $0.15 per diluted share for the third quarter of 2010.
Net sales increased 22.8% for the fiscal third quarter of 2011 as compared with the third quarter of 2010. For the year-to-date, sales are $204,761,000 and income from continuing operations is $1,474,000, or $0.11 per diluted share, compared with sales of $166,188,000 and a loss from continuing operations of $5,012,000, or $0.40 per diluted share, for the year-ago period. Net sales for the year-to-date are 23.2% above the same period of 2010.
Excluding items related to refinancing the Company's Senior Credit Facility, the Company reported Non-GAAP income from continuing operations of $216,000, or $0.02 per diluted share, in the third quarter of 2011, compared with a loss from continuing operations of $1,869,000, or $0.15 per diluted share, for the third quarter of 2010.
Commenting on the results, Daniel K. Frierson, chairman and chief executive officer, said, "Dixie had strong growth in the quarter with nearly 23% improvement in sales compared to very modest growth for the industry. Our residential product sales grew 26% above the same period in 2010. This increase is in contrast with what we believe is a sales decline for the residential market.
The residential carpet market, in general, has still not recovered from the recession; however, it is notably stronger at the high end than the broader market. Our commercial products had growth of 14%, which we believe is above the industry growth rate. Notable was growth in the modular carpet tile sector, which continues to exceed that of the broadloom product category in commercial products for both Dixie and the industry.
"Having completed seven consecutive quarters of sales growth in excess of the industry, we believe that continued emphasis on new product introductions is the correct strategy to enhance our position within the high end of the market. Our sales improved in all brands, in addition to a 6% sales increase that resulted from a one-time special during the period in the mass merchant category. Notably, Masland and Fabrica had double digit growth in the third quarter relative to the same period last year. Masland Contract had similarly improved sales during the quarter.
"We continue to shift more resources into new product introductions serving the upper-end segments of the market as we believe that those segments will continue to rebound faster than the more moderate price points. This is why we have invested in expanded capacity to produce such new products as Invista's SolarMax and TruSoft fiber technology. In addition, we are expanding our wool offerings to enhance our position in serving that portion of the upper-end market.