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'Outlook remains unclear' - Dixie Group Chairman
01 May '09
4 min read
“Our plans are on track to reduce inventories and limit capital expenditures to roughly half of our depreciation and amortization expense. Inventories were down 12% in the first quarter compared with the fourth quarter of 2008, and were down 20% compared with inventory levels at the end of the first quarter last year.
Capital expenditures were slightly over $1.0 million, or 29% of the first quarter's depreciation and amortization. Total debt was reduced $9.6 million during the first quarter of 2009, due to lower working capital and capital expenditures. Our senior loan and security agreement does not have financial covenants, and we intend to continue positioning our business and balance sheet in response to the current economic downturn.
“The outlook for our business remains unclear. Although sales in April are running significantly below prior-year levels, our business has shown seasonal improvement since January of this year. April order entry levels in our residential and commercial markets continue to reflect this seasonal improvement. We are cautiously optimistic that this trend will continue; however, the severe weakness in the U.S. economy and difficult credit conditions will likely have an impact on demand for residential and commercial carpet products throughout this year.
While we cannot predict how long the current economic downturn will last, or its impact on the markets we serve, we believe the changes we have made in our business position us to weather the current economic storm and benefit from improved conditions when they occur,” Frierson concluded.
The Company's loss from discontinued operations was $116,000, or $0.01 per diluted share, for the first quarter of 2009, compared with a loss from discontinued operations of $69,000, or $0.01 per diluted share, for the first quarter of 2008. Including discontinued operations, the Company reported a net loss of $35,557,000, or $2.91 per diluted share, for the first quarter of 2009 compared with net income of $13,000, or $0.00 per diluted share, for the first quarter of 2008.
Capital expenditures were slightly over $1.0 million, or 29% of the first quarter's depreciation and amortization. Total debt was reduced $9.6 million during the first quarter of 2009, due to lower working capital and capital expenditures. Our senior loan and security agreement does not have financial covenants, and we intend to continue positioning our business and balance sheet in response to the current economic downturn.
“The outlook for our business remains unclear. Although sales in April are running significantly below prior-year levels, our business has shown seasonal improvement since January of this year. April order entry levels in our residential and commercial markets continue to reflect this seasonal improvement. We are cautiously optimistic that this trend will continue; however, the severe weakness in the U.S. economy and difficult credit conditions will likely have an impact on demand for residential and commercial carpet products throughout this year.
While we cannot predict how long the current economic downturn will last, or its impact on the markets we serve, we believe the changes we have made in our business position us to weather the current economic storm and benefit from improved conditions when they occur,” Frierson concluded.
The Company's loss from discontinued operations was $116,000, or $0.01 per diluted share, for the first quarter of 2009, compared with a loss from discontinued operations of $69,000, or $0.01 per diluted share, for the first quarter of 2008. Including discontinued operations, the Company reported a net loss of $35,557,000, or $2.91 per diluted share, for the first quarter of 2009 compared with net income of $13,000, or $0.00 per diluted share, for the first quarter of 2008.
Dixie Group Inc
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