The Dixie Group Reports Results for First Quarter of 2025 and New $75 Million Senior Credit Facility
Rhea-AI Summary
The Dixie Group (OTCQB:DXYN) reported its Q1 2025 financial results and secured a new $75 million senior credit facility. Net sales decreased 3.5% to $62.99 million compared to $65.25 million in Q1 2024. Despite lower sales, gross margins improved to 26.8% from 24.2% year-over-year. The company posted an operating income of $11,000, compared to an operating loss of $857,000 in Q1 2024. Net loss from continuing operations was $1.58 million ($0.11 per share), an improvement from $2.41 million ($0.16 per share) in Q1 2024.
The company's soft floorcovering products outperformed hard surface products, gaining market share in the soft surface category. Premium products showed strong performance across all categories. The new three-year credit facility with MidCap Financial replaces their previous facility with Fifth Third Bank. The company faces challenges from weak market conditions due to low existing home sales and lower consumer confidence, with additional uncertainty around tariffs impacting the industry.
Positive
- Operating income improved to $11,000 in Q1 2025 from a loss of $857,000 in Q1 2024
- Gross margins increased to 26.8% from 24.2% year-over-year
- Net loss reduced to $1.58 million from $2.41 million in Q1 2024
- Secured new $75 million three-year credit facility
- Gained market share in soft surface category
Negative
- Net sales declined 3.5% to $62.99 million year-over-year
- Selling and administrative expenses increased to $16.9 million from $16.4 million
- Debt increased by $2.3 million in Q1 2025
- Hard surface products underperformed compared to soft floorcovering products
- Only $12 million unused borrowing availability under credit facility, subject to $6 million minimum requirement
News Market Reaction 1 Alert
On the day this news was published, DXYN gained 4.40%, reflecting a moderate positive market reaction.
Data tracked by StockTitan Argus on the day of publication.
DALTON, GA / ACCESS Newswire / May 9, 2025 / The Dixie Group, Inc. (OTCQB:DXYN) today reported financial results for the quarter ended March 29, 2025.
The Company had favorable year over year gross margins despite lower year over year net sales volume
The Company had an operating income of
$11 thousand in the first quarter of 2025 compared to an operating loss of$857 thousand in the same period of 2024During the first quarter of 2025 the Company closed on a new
$75 million credit facility
For the first quarter of 2025, the Company had net sales of
Commenting on the results, Daniel K. Frierson, Chairman and Chief Executive Officer, said, "The industry continues to experience weak market conditions driven by low existing home sales and lower consumer confidence. Our first quarter net sales were down
Despite the lower sales volume, our gross margins in the first quarter were favorable to prior year at
Low consumer confidence was further impacted by the uncertainty around the announcement of tariffs during the quarter. We had previously minimized the amount of our products being imported from China and we have worked with all of the suppliers of our imported products to reduce the impact of tariffs on the cost of our products. The situation is very volatile at this time, and it is difficult to predict what the impact of increased tariffs will be on imported products. At this time, several industry players have already announced price increases. Certainly, the impact will be greater on some hard surface categories.
We were pleased by the success of the first quarter trade shows, including Surfaces where we showcased 25 new styles of carpet across our nylon, polyester and decorative collections. Our focus continues to be on creating differentiated styles for the residential market, with an emphasis on color, pattern, and textural visuals. This includes our Step Into Color campaign where we offer the best and broadest color lines in the industry including custom color offerings in our white dyeable nylon carpet collections produced through our nylon extrusion operation that began successful production last year.
We also showcased eight hard surface collections with new visuals and innovations and ten new colors in our Fabrica wood program which were all very well received and will continue to fuel growth in this program. In our TRUCOR brand, we are focused on simplification of our product line and consumer friendly messaging. We featured new visuals and constructions in several of our SPC, WPC, and laminate programs. Notably, our PRIME X collection, with a half inch thick WPC construction and 7x72 inch plank in ten colors. Also our Boardwalk collection, with rolled edge and beautiful visuals in a high end SPC platform, will get 10 new colors in 2025. And we are expanding our market leading visuals in the SPC tile/stone segment with 6 new "built in grout" options. Our hard surface introductions began rolling out late in the 1st quarter and will continue through mid year.
During the quarter we were pleased to announce closure on a new, three year,
The year over year gross margin improved by
On our balance sheet, receivables increased
On February 25, 2025, the Company entered into a new
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 | ||||||||
March 29, | March 30, | |||||||
NET SALES | $ | 62,990 | $ | 65,254 | ||||
Cost of sales | 46,088 | 49,445 | ||||||
GROSS PROFIT | 16,902 | 15,809 | ||||||
Selling and administrative expenses | 16,874 | 16,372 | ||||||
Other operating (income) expense, net | (98 | ) | 52 | |||||
Facility consolidation and severance expenses, net | 115 | 242 | ||||||
OPERATING INCOME (LOSS) | 11 | (857 | ) | |||||
Interest expense | 1,493 | 1,532 | ||||||
Other expense, net | 88 | 5 | ||||||
LOSS OF CONTINUING OPERATIONS BEFORE TAXES | (1,570 | ) | (2,394 | ) | ||||
Income tax provision | 12 | 16 | ||||||
LOSS FROM CONTINUING OPERATIONS | (1,582 | ) | (2,410 | ) | ||||
Loss from discontinued operations, net of tax | (115 | ) | (84 | ) | ||||
NET LOSS | $ | (1,697 | ) | $ | (2,494 | ) | ||
BASIC EARNINGS (LOSS) PER SHARE: | ||||||||
Continuing operations | $ | (0.11 | ) | $ | (0.16 | ) | ||
Discontinued operations | (0.01 | ) | (0.01 | ) | ||||
Net loss | $ | (0.12 | ) | $ | (0.17 | ) | ||
BASIC SHARES OUTSTANDING | 14,366 | 14,850 | ||||||
DILUTED EARNINGS (LOSS) PER SHARE: | ||||||||
Continuing operations | $ | (0.11 | ) | $ | (0.16 | ) | ||
Discontinued operations | (0.01 | ) | (0.01 | ) | ||||
Net loss | $ | (0.12 | ) | $ | (0.17 | ) | ||
DILUTED SHARES OUTSTANDING | 14,366 | 14,850 | ||||||
DIVIDENDS PER SHARE: | ||||||||
Common Stock | $ | - | $ | - | ||||
Class B Common Stock | $ | - | $ | - | ||||
THE DIXIE GROUP, INC.
Consolidated Condensed Balance Sheets
(in thousands)
March 29, | December 28, | |||||||
ASSETS | (Unaudited) | |||||||
CURRENT ASSETS | ||||||||
Cash and cash equivalents | $ | 4,795 | $ | 19 | ||||
Receivables, net of allowances for expected credit losses of | 27,940 | 23,325 | ||||||
Inventories, net | 66,741 | 66,852 | ||||||
Prepaid and other current assets | 6,160 | 5,643 | ||||||
TOTAL CURRENT ASSETS | 105,636 | 95,839 | ||||||
PROPERTY, PLANT AND EQUIPMENT, NET | 32,527 | 33,747 | ||||||
OPERATING LEASES RIGHT-OF-USE ASSETS | 24,501 | 25,368 | ||||||
RESTRICTED CASH | 4,309 | - | ||||||
OTHER ASSETS | 17,426 | 19,854 | ||||||
LONG TERM ASSETS OF DISCONTINUED OPERATIONS | 1,047 | 1,064 | ||||||
TOTAL ASSETS | $ | 185,446 | $ | 175,872 | ||||
LIABILITIES AND STOCKHOLDERS' EQUITY | ||||||||
Current Liabilities | ||||||||
Accounts payable | $ | 26,036 | $ | 14,884 | ||||
Accrued expenses | 14,945 | 15,057 | ||||||
Current portion of long-term debt | 57,912 | 53,818 | ||||||
Current portion of operating lease liabilities | 3,746 | 3,804 | ||||||
Current liabilities of discontinued operations | 1,121 | 1,156 | ||||||
TOTAL CURRENT LIABILITIES | 103,760 | 88,719 | ||||||
LONG-TERM DEBT, NET | 26,742 | 28,530 | ||||||
OPERATING LEASE LIABILITIES | 21,476 | 22,295 | ||||||
OTHER LONG-TERM LIABILITIES | 15,467 | 16,712 | ||||||
LONG-TERM LIABILITIES OF DISCONTINUED OPERATIONS | 3,384 | 3,398 | ||||||
STOCKHOLDERS' EQUITY | 14,617 | 16,218 | ||||||
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $ | 185,446 | $ | 175,872 | ||||
CONTACT:
Allen Danzey
Chief Financial Officer
706-876-5865
allen.danzey@dixiegroup.com
SOURCE: The Dixie Group
View the original press release on ACCESS Newswire
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