Carpet maker Dixie reports loss of $2.50 per diluted share in 2008
The Dixie Group Inc reported financial results for the fourth quarter and fiscal year ended December 27, 2008. In the fourth quarter 2008, the Company recorded $29,916,000 of costs for goodwill and asset impairments and for consolidation and severance expenses, of which $27,599,000 were non-cash expenses.
In the fourth quarter 2007, the Company merged its only remaining defined benefit pension plan into a multi-employer pension plan and ceased to be a plan sponsor. The Company incurred $1,518,000 of principally non-cash expenses relating to that merger.
Including the unusual items, the Company reported a loss from continuing operations of $31,761,000, or $2.59 per diluted share, in the fourth quarter of 2008, compared with income from continuing operations of $1,746,000, or $0.14 per diluted share, for the fourth quarter of 2007.
Excluding the unusual items, the non-GAAP loss from continuing operations was $4,077,000, or $0.33 per diluted share, for the fourth quarter of 2008 compared with non-GAAP income from continuing operations of $2,769,000 or $0.21 per diluted share, for the fourth quarter of 2007. Sales for the fourth quarter of 2008 were $61,916,000, down 22% from $79,517,000 in the year-earlier quarter.
For the fiscal year ended December 27, 2008, the loss from continuing operations, including the unusual items, was $31,128,000, or $2.50 per diluted share, compared with income from continuing operations of $6,778,000, or $0.52 per diluted share, for the year ended December 29, 2007.
Excluding the unusual items, the non-GAAP loss from continuing operations was $3,444,000, or $0.28 per diluted share, for fiscal 2008 compared with non-GAAP income from continuing operations of $7,801,000, or $0.60 per diluted share, for fiscal 2007. Sales for fiscal 2008 were $282,710,000, down 12% from sales of $320,795,000 in the prior year.
Commenting on the results, Daniel K. Frierson, chairman and chief executive officer, said, "We are disappointed that high-end residential and commercial carpet markets continued to deteriorate more rapidly than anticipated. Lower net sales adversely affected our results, and we have taken additional actions to reduce costs and improve liquidity.
"The consolidation of our Eton, Georgia, carpet tufting operation into our tufting, dyeing and finishing facility in Atmore, Alabama, is substantially complete. Most of the costs to complete this action are now behind us, and the benefits of this consolidation should begin to have a positive impact on our results in March of this year.
We are assessing our alternatives for the Fabrica business and are considering the possible sale of the business or, more likely, consolidation into our East Coast facilities, beginning in the last half of this year. If implemented, a consolidation would further reduce costs and headcount and allow us to sell or lease our California real estate.
“We reduced total employment approximately 17% in 2008 and have taken additional steps to significantly reduce administrative expenses for 2009. Consolidation or sale of Fabrica's operations could reduce employment by at least 13%.