In Q2 of fiscal 2018, Dixie Group, one of the leading floorcovering companies, has recorded sales of $106,438,000 as compared to $107,187,000 in 2017, down 0.7 per cent, against same period in 2017 while the industry, as estimated, was flat. The gross profit for second quarter of 2018 was 23.6 per cent of sales, compared to a gross profit of 26.5 per cent.
The US-based company also incurred a loss from continuing operations of $1,972,000 or $0.13 per diluted share as compared to a profit of $1,226,000 or $0.08 per diluted share in the second quarter of 2017. It had unusual expenses during the period of $2 million, including a $1.51 million charge related to settlement of a class action litigation as well as a $450 thousand charge related to an accident at one of our yarn facilities. On a non-GAAP basis, the Company had earnings for continuing operations of $182,000 or $0.01 per diluted share.
"Our residential sales were up 4.0% for the quarter with the industry, we estimate, being up slightly as compared to the prior year. Our residential sales were strongest through our independent retail channels. In 2018, we have reintroduced the Masland Energy collection. Masland Energy is a modern take on the traditional main street commercial business. Our Energy products are highly stylised and feature type 6, 6 nylon delivering the performance required by the most demanding segments of the commercial market. The Fabrica wood line was launched with initial selective distribution in the southeast United States. The Fabrica collection features both flooring and companion wood wall coverings. The line will include French oak, maple and birch with a style and quality consistent with the high-end quality of Fabrica’s brand," Daniel K Frierson, chairman and chief executive officer, said.
Selling and administrative expenses for the quarter were 22.4 per cent of net sales, a decrease of 1.2 percentage points from our level of 23.6 per cent in the second quarter of 2017. The decrease in our selling and administrative costs is primarily due to the Profit Improvement Program we initiated in the fourth quarter of last year as we consolidated our two commercial management teams under the leadership of David Hobbs. We had $190,000 in restructuring expenses primarily related to the Profit Improvement Plan during the period.
During the second quarter, the receivables increased $1.5 million due to our normal seasonal pattern. Inventories increased $5.4 million due to normal seasonal factors. The capital expenditures for the year of 2018 are planned at a maintenance level of approximately $6 million. For the first half of 2018, our capital expenditures, including those financed through capital leases, were $1.4 million as compared to depreciation and amortization of $6.3 million.
"Our gross margin was further impacted by higher than normal waste, purchase price variances and distribution expenses. We have made changes in our manufacturing operations to lower costs by better aligning staffing to demand, implemented several waste reduction initiatives, and are streamlining our distribution operations. To maintain our workforce, we have increased wages and improved benefits. This has helped us reduce turnover as we deal with a continued tight labor market. We announced a residential price increase for this August primarily to offset higher labor, material and other operational costs," a press release from Dixie stated. (RR)
Fibre2Fashion News Desk – India