The Dixie Group Reports Net Income for the Second Quarter of 2025
Rhea-AI Summary
The Dixie Group (OTCQB:DXYN) reported strong Q2 2025 financial results, with net income of $1.2 million ($0.08 per diluted share), up from $0.6 million ($0.04 per diluted share) in Q2 2024. Despite net sales declining to $68.6 million from $70.5 million year-over-year, the company improved its gross profit margin to 29.2% from 28.1%.
Operating income increased to $3.2 million from $2.3 million in Q2 2024, driven by cost reduction initiatives expected to save $12.6 million annually. The company's soft surface sales outperformed the market, staying flat while the industry declined by 7%. Hard surface segment showed mixed results, with Fabrica wood products growing over 10% year-over-year.
The company maintained strong liquidity with $13.1 million available under its credit facility, despite challenging market conditions due to high interest rates and low consumer confidence affecting the flooring industry.
Positive
- None.
Negative
- Net sales decreased 2.7% to $68.6 million from $70.5 million year-over-year
- Interest expense increased to $1.9 million from $1.6 million in Q2 2024
- Total debt increased by $1.1 million in first six months of 2025
- TRUCOR segment experienced low inventory and supply chain issues
- Six-month net loss of $328,000 despite quarterly profit
News Market Reaction
On the day this news was published, DXYN declined 0.79%, reflecting a mild negative market reaction.
Data tracked by StockTitan Argus on the day of publication.
DALTON, GA / ACCESS Newswire / August 7, 2025 / The Dixie Group, Inc. (OTCQB:DXYN) today reported financial results for the quarter ended June 28, 2025.
The gross profit margin for the second quarter of 2025 was
29.2% of net sales compared to28.1% in the second quarter of 2024Operating income in the second quarter of 2025 was
$3.2 million compared to$2.3 million in the second quarter of the prior yearThe Company had a net income of
$1.2 million in the second quarter of 2025 compared to a net income of$0.6 million in the same period of the prior year
For the second quarter of 2025, the Company had net sales of
For the six months ended June 28, 2025, net sales were
Commenting on the results, Daniel K. Frierson, Chairman and Chief Executive Officer, said, "The Company had a net income of
Weak market conditions continued to negatively impact flooring industry sales in the second quarter of 2025, with high interest rates and low consumer confidence being key factors leading to slow home sales and weak home remodeling numbers. Our soft surface sales outpaced the market in the second quarter as we were relatively flat year over year where the industry, we believe, was down
We launched five new soft surface introductions during the second quarter across all three of our brands. All of these products are differentiated patterns made with our white dyeable EnVision Nylon. Featuring up to fifty colors, these patterns provide unique aesthetics for consumers and designers who are focused on high-end fashion and home décor. Additional synthetic styles and decorative styles will be launched during the second half of 2025.
In our hard surface segment, we have seen over
We launched five new hard surface collections during the second quarter. These launches include a beautiful new color update for Calais, a collection in our Fabrica wood program, and our new PRIME X collection, ten SKUs of half-inch thick, 7x72 WPC planks. This program expands our market leading oversized plank assortment with on trend colors in a high quality WPC construction. We expanded our high end SPC program with ten new colors of Boardwalk, a collection which features a rolled edge format and beautiful visuals. Finally, we expanded our market leading tile visuals with six new colors featuring CGT technology for built in grout lines. We also plan to have additional hard surface launches in the second half of 2025.
From a marketing standpoint, we continued our partnerships with Roomvo and Broadlume in the digital space. Through these programs, we continue to see increased lead generation, online sample ordering, and room visualizations. These metrics are promising as today's consumer is searching for flooring products online and we must meet them where they are. Our Premier Flooring Center (PFC) retail partners continue to be a strong point for TDG in the market. This program includes a selling system which supports better goods and higher end products along with training, unique promotional opportunities and other benefits.
Although we are encouraged by the strong second quarter results in a down market, our industry continues to be negatively impacted by inflationary pressures, high interest rates and low consumer confidence. Historically, after economic downturns, pent up demand drives sales growth in the industry for several years. While we cannot predict the timing of when this pent up demand will be released, we believe we have taken the appropriate actions through cost reductions and operational improvements to manage through the slower periods and optimize our return as market conditions improve." Frierson concluded.
Our operating margin in the second quarter of 2025 was
On our balance sheet, receivables increased
balance. This increase was primarily driven by higher payables and accruals for raw materials to replenish inventory and meet higher production needs in preparation for higher levels of demand in the third quarter as compared to the first quarter. In the second quarter of 2025, capital expenditures were
This press release contains forward-looking statements. Forward-looking statements are based on estimates, projections, beliefs and assumptions of management and the Company at the time of such statements and are not guarantees of performance. Forward-looking statements are subject to risk factors and uncertainties that could cause actual results to differ materially from those indicated in such forward-looking statements. Such factors include the levels of demand for the products produced by the Company. Other factors that could affect the Company's results include, but are not limited to, availability of raw material and transportation costs related to petroleum prices, the cost and availability of capital, integration of acquisitions, ability to attract, develop and retain qualified personnel and general economic and competitive conditions related to the Company's business. Issues related to the availability and price of energy may adversely affect the Company's operations. Additional information regarding these and other risk factors and uncertainties may be found in the Company's filings with the Securities and Exchange Commission. The Company disclaims any obligation to update or revise any forward-looking statements based on the occurrence of future events, the receipt of new information, or otherwise.
THE DIXIE GROUP, INC.
Consolidated Condensed Statements of Operations
(unaudited; in thousands, except earnings (loss) per share)
Three Months Ended | Six Months Ended | |||||||||||||||
June 28, | June 29, | June 28, | June 29, | |||||||||||||
NET SALES | $ | 68,573 | $ | 70,507 | $ | 131,563 | $ | 135,761 | ||||||||
Cost of sales | 48,557 | 50,694 | 94,645 | 100,139 | ||||||||||||
GROSS PROFIT | 20,016 | 19,813 | 36,918 | 35,622 | ||||||||||||
Selling and administrative expenses | 16,778 | 17,376 | 33,652 | 33,748 | ||||||||||||
Other operating income, net | (68 | ) | (105 | ) | (166 | ) | (52 | ) | ||||||||
Facility consolidation and severance expenses, net | 117 | 247 | 232 | 489 | ||||||||||||
OPERATING INCOME | 3,189 | 2,295 | 3,200 | 1,437 | ||||||||||||
Interest expense | 1,872 | 1,620 | 3,365 | 3,152 | ||||||||||||
Other (income) expense, net | (4 | ) | 4 | 84 | 8 | |||||||||||
INCOME (LOSS) FROM CONTINUING OPERATIONS BEFORE TAXES | 1,321 | 671 | (249 | ) | (1,723 | ) | ||||||||||
Income tax provision | 67 | 4 | 79 | 20 | ||||||||||||
INCOME (LOSS) FROM CONTINUING OPERATIONS | 1,254 | 667 | (328 | ) | (1,743 | ) | ||||||||||
Loss from discontinued operations, net of tax | (94 | ) | (64 | ) | (209 | ) | (148 | ) | ||||||||
NET INCOME (LOSS) | $ | 1,160 | $ | 603 | $ | (537 | ) | $ | (1,891 | ) | ||||||
BASIC EARNINGS (LOSS) PER SHARE: | ||||||||||||||||
Continuing operations | $ | 0.08 | $ | 0.04 | $ | (0.02 | ) | $ | (0.12 | ) | ||||||
Discontinued operations | (0.01 | ) | (0.00 | ) | (0.01 | ) | (0.01 | ) | ||||||||
Net income (loss) | $ | 0.07 | $ | 0.04 | $ | (0.03 | ) | $ | (0.13 | ) | ||||||
DILUTED EARNINGS (LOSS) PER SHARE: | ||||||||||||||||
Continuing operations | $ | 0.08 | $ | 0.04 | $ | (0.02 | ) | $ | (0.12 | ) | ||||||
Discontinued operations | (0.01 | ) | (0.00 | ) | (0.01 | ) | (0.01 | ) | ||||||||
Net income (loss) | $ | 0.07 | $ | 0.04 | $ | (0.03 | ) | $ | (0.13 | ) | ||||||
Weighted-average shares outstanding: | ||||||||||||||||
Basic | 14,496 | 14,894 | 14,431 | 14,872 | ||||||||||||
Diluted | 14,589 | 14,987 | 14,431 | 14,872 | ||||||||||||
THE DIXIE GROUP, INC.
Consolidated Condensed Balance Sheets
(in thousands)
June 28, | December 28, | |||||||
ASSETS | (Unaudited) | |||||||
CURRENT ASSETS | ||||||||
Cash and cash equivalents | $ | 4,386 | $ | 19 | ||||
Receivables, net of allowances for expected credit losses of | 28,891 | 23,325 | ||||||
Inventories, net | 67,381 | 66,852 | ||||||
Prepaid and other current assets | 5,965 | 5,643 | ||||||
TOTAL CURRENT ASSETS | 106,623 | 95,839 | ||||||
PROPERTY, PLANT AND EQUIPMENT, NET | 31,315 | 33,747 | ||||||
OPERATING LEASE RIGHT-OF-USE ASSETS | 26,127 | 25,368 | ||||||
RESTRICTED CASH | 4,309 | - | ||||||
OTHER ASSETS | 18,870 | 19,854 | ||||||
LONG-TERM ASSETS OF DISCONTINUING OPERATIONS | 1,139 | 1,064 | ||||||
TOTAL ASSETS | $ | 188,383 | $ | 175,872 | ||||
LIABILITIES AND STOCKHOLDERS' EQUITY | ||||||||
CURRENT LIABILITIES | ||||||||
Accounts payable | $ | 26,319 | $ | 14,884 | ||||
Accrued expenses | 15,100 | 15,057 | ||||||
Current portion of long-term debt | 57,311 | 53,818 | ||||||
Current portion of operating lease liabilities | 4,437 | 3,804 | ||||||
Current liabilities of discontinued operations | 1,115 | 1,156 | ||||||
TOTAL CURRENT LIABILITIES | 104,282 | 88,719 | ||||||
LONG-TERM DEBT, NET | 26,123 | 28,530 | ||||||
OPERATING LEASE LIABILITIES | 22,591 | 22,295 | ||||||
OTHER LONG-TERM LIABILITIES | 16,100 | 16,712 | ||||||
Long-Term Liabilities of Discontinued Operations | 3,480 | 3,398 | ||||||
Stockholders' Equity | 15,807 | 16,218 | ||||||
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $ | 188,383 | $ | 175,872 | ||||
SOURCE: The Dixie Group
View the original press release on ACCESS Newswire
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