Dixie Home shows significant growth in Durasilk products
The Dixie Group, Inc. reported financial results for the second quarter and six months ended June 26, 2010. In the second quarter of 2010, the Company had net sales of $59,058,000 versus $52,572,000 in the same quarter of 2009. Including facility consolidation and severance expenses, the Company reported an after-tax loss from continuing operations of $684,000, or $0.05 per diluted share, in the quarter, compared with a loss from continuing operations of $984,000, or $0.08 per diluted share, for same quarter of 2009.
For the six months ended June 26, 2010, the Company had net sales of $109,512,000, versus $100,211,000, in the six months ended June 27, 2009. Including facility consolidation and severance expenses, the Company reported an after-tax loss from continuing operations of $3,143,000, or $0.25 per diluted share, compared with a loss from continuing operations of $36,425,000, or $2.97 per diluted, for the six months ended June 27, 2009.
The first six months of 2010 had pre-tax facility consolidation and severance expenses of $333,000. Comparatively, the first six months of 2009 had pre-tax facility consolidation and severance expenses and impairment of goodwill of $33,138,000, as well as liquidations of LIFO inventory carried at lower costs established in prior years, increasing pre-tax income by $1,020,000.
Commenting on the results, Daniel K. Frierson, Chairman and Chief Executive Officer, said, "During the second quarter, we experienced significant improvement in revenue. Carpet sales for the second quarter were 17.0% above those of the first quarter and 12.8% above the same quarter last year, while the industry was up only 1.7% over the year-ago quarter.
"Our growth was most notable in our residential business, with strong performances in the high-end through numerous new wool offerings at Fabrica and Masland and our unique Masland Avenue collection. Dixie Home showed significant growth in its Durasilk products, and all three brands continued growth of the Stainmaster(R) brand, with a number of new Luxurelle products.
"Our sales in the commercial sector were flat with the prior-year period which we believe slightly exceeds the industry performance for the period. We continue to introduce new products in the fastest growing segments of our markets as we strive to maintain our style and design leadership.
"Margins for the quarter were 25.8%, an improvement over the first quarter of 1.3 percentage points but below the prior-year's quarter by 1.5 percentage points. The prior-year margin of 27.3% included a favorable $1.0 million LIFO tier liquidation gain. The margin for second quarter 2010 had both a less favorable mix across our markets as more value oriented products gained in share. Our residential margins were under pressure during the period as we suffered higher costs resulting from material cost increases while the effect of our corresponding price increases did not become fullyeffective until July.