Stainmaster products continue to perform well @ Dixie
16 May '11
5 min read
However, the higher than anticipated volumes helped us leverage costs as our gross profit improved 0.6% compared with the same period a year ago. Our selling and administrative expenses, as a percentage of net sales, dropped 5.2 percentage points to 23.3% for the quarter as compared with the prior year. The industry and Dixie implemented price increases due to higher raw-material costs in the period. This increase was fully effective by the end of the quarter. In addition, a second price increase was implemented in April; the effect of the increase should be largely completed by the end of the second quarter.
"Inventory turns improved 12% compared with first quarter of 2010. Capital expenditures were $1,101,000, while depreciation and amortization was $2,519,000 for the period. Total debt increased $3,044,000 during the first quarter, primarily due to higher levels of inventories and receivables required to support the higher level of sales. Availability under our credit lines was $10.1 million at quarter end and is $12.4 million as of May 11, 2011.
"Although severe weakness in the housing industry and tough credit conditions will likely persist throughout this year, we expect improved sales volumes during the second quarter as a result of the normal seasonality of the carpet industry and the strength of our business. We believe that conditions in the residential portion of our industry face challenges with higher gasoline prices and a negative consumer sentiment. In addition, the rate of growth of commercial carpet sales for the industry is uncertain due to the high dependence on the refurbishment of existing commercial space. However, we anticipate our sales to continue to outpace those of the carpet industry as a whole, due to the performance of our commercial business and the continued success of our new residential products," Frierson concluded.
The Company's loss from discontinued operations was $21,000, or $0.00 per diluted share, for the first quarter of 2011, compared with a loss from discontinued operations of $70,000, or $0.00 per diluted share, for the prior year. Including discontinued operations, the Company reported a net income of $623,000, or $0.05 per diluted share, for the first quarter of 2011 compared with a net loss of $2,529,000, or $0.20 per diluted share, for the year-earlier period.
The Dixie Group is a leading marketer and manufacturer of carpet and rugs to higher-end residential and commercial customers through the Fabrica International, Masland Carpets, Dixie Home, Masland Contract and Whitespace brands.
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