Despite 21% sales hike, Dixie Group slips into Q3 loss
In the third fiscal quarter ending September 27, 2014, despite posting revenue growth of 21.22% year-on-year, NASDAQ-listed manufacturer of carpet and rugs – The Dixie Group, reported loss from continuing operations.
In the quarter under review, Dixie Group slipped in to a massive loss from continuing operations totalling to $166,000, or $0.01 per diluted share, compared with income from continuing operations of $1,432,000, or $0.11 per diluted share in the third quarter of 2013.
Dixie Group posted revenue growth of 21.22% in the third quarter of 2014, which amounted to $109,359,000 against sales of $90,210,000 in the corresponding quarter of 2013.
“Excluding Atlas Carpet Mills, which was acquired in March, Dixie Group sales were up 7.8% as compared to the same quarter in 2013, while the market remained flat,” the carpet producer said.
It said, income from continuing operations, excluding manufacturing integration, facility consolidation, equipment impairment, and acquisition related expenses, after-tax, was $1,326,000, or $0.08 per diluted share for the period.
Dixie had $2,579,000 in facility consolidation, equipment impairment and acquisition related expenses during the period, as it implements its previously announced plans to expand capacity, integrate acquisitions and streamline operations.
Its residential sales increase in the third quarter was 9.8% ahead of those of the same quarter last year, relative to the market declining in the low single digits on a comparable basis.
Third quarter sales increase for its commercial products was 45.6%, up from the same time period last year. Excluding Atlas, the hike was 1.0% for the third quarter as compared with a strong third quarter of 2013.
Sales for all of Dixie’s brands, other than Atlas Carpet Mills, were up for the third quarter on a year-over-year basis and it anticipates Atlas sales to pick up in 2015 as new product introductions are released later this year.
Dixie Group said, gross profit for the third quarter of 2014 at 24.2% of net sales, was impacted by added costs related to the restructuring activities. SG&A expenses reached 21.9% of sales in the reporting quarter as compared with 22.4% for the same quarter of 2013.
Third quarter of 2014 operating income touched $528,000, while on a non-GAAP basis, operating income was $3.1 million for the quarter.
Current assets increased $3.9 million during the quarter, primarily due to higher levels of trade receivables and deposits on new machinery and equipment.
“As projects are completed in the fourth quarter and interim progress fundings are converted to permanent financing, current debt will decrease by approximately $3.5 million,” it revealed.
Capital expenditures and capital leases for the quarter were $7.0 million, while capital assets purchased in the business combination of Burtco was $2.3 million and depreciation and amortization amounted to $3.3 million in the third quarter of 2014. (AR)
Fibre2fashion News Desk - India