Dixie Group Inc. (DXYN, Financial) filed Quarterly Report for the period ended 2010-09-25.
Dixie Group Inc. has a market cap of $45.3 million; its shares were traded at around $3.7 with and P/S ratio of 0.2. DXYN is in the portfolios of Chuck Royce of Royce& Associates.
Facility Consolidation and Severance Expenses and Goodwill Impairment. During the third quarter and first nine months of 2010, we recorded $304 thousand and $637 thousand respectively, of expenses primarily related to associate relocation obligations and completion of computer systems modifications under our restructuring initiatives that were begun in 2008 and 2009 and exit costs related to our leased facility in California. During the third quarter and first nine months of 2009, we recorded $563 thousand and $2.3 million respectively, of expenses related to facilities consolidations and severance cost under our restructuring plans. We recorded a $31.4 million non-cash charge in the first quarter of 2009 to write-off the remainder of our goodwill based on our assessment of its carrying value compared to its estimated recoverability.
Operating Loss. Our operating loss was $1.9 million, or 3.4% of net sales, in the third quarter of 2010 compared with an operating loss of $1.7 million, or 3.4% of net sales, in the third quarter of the prior year. For the first nine months of 2010, our operating loss was $4.2 million, compared with an operating loss of $41.3 million, in the first nine months of 2009. For the first nine months of 2009, the operating loss included $31.4 million of non-cash expenses related to impairment of goodwill and facility consolidations and severance of $2.3 million, or $1.7 million higher than the level of consolidation expenses in the first nine months of 2010.
Loss from Continuing Operations. The loss from continuing operations was $1.9 million, or $0.15 per diluted share in the third quarter of 2010 and $5.0 million, or $0.40 per diluted share, for the first nine months of 2010 compared with a loss from continuing operations of $2.0 million, or $0.16 per diluted share in the third quarter of 2009 and $38.4 million, or $3.13 per diluted share for the first nine months of 2009. The loss from continuing operations for the first nine months of 2010 included $428 thousand, or $0.03 per diluted share of losses associated with consolidation and severance expenses. The loss from continuing operations for the first nine months of 2009 included $29.9 million, or $2.44 per diluted share of losses associated with the impairment of goodwill and consolidation and severance expenses.
Net Loss. Discontinued operations reflected a loss of $28 thousand, or $0.00 per diluted share, in the third quarter of 2010 compared with income of $23 thousand, or $0.00 per diluted share, in the same period in 2009. Discontinued operations reflected a loss of $158 thousand, or $0.01 per diluted share, for the first nine months of 2010 compared with a loss of $176 thousand, or $0.01 per diluted share, for the first nine months of 2009. Including discontinued operations, the net loss was $1.9 million, or $0.15 per diluted share, in the third quarter of 2010 compared with a net loss of $2.0 million, or $0.16 per diluted share, in the third quarter of 2009. The first nine months of 2010 reflected a net loss of $5.2 million, or $0.41 per diluted share, compared with a net loss of $38.6 million, or $3.14 per diluted share, in the same period in 2009.
Working capital increased $2.1 million in the first nine months of 2010. Although total receivables declined $266 thousand during the first nine months of 2010, trade accounts receivable increased $6.4 million primarily due to an increase in sales and seasonably low accounts receivable at the end of 2009, while income tax receivables decreased $6.9 million primarily due to tax refunds of $6.7 million received in the first quarter of 2010 while all other receivables increased $213 thousand. Inventories increased $4.2 million to support higher levels of business activity from the year end 2009 levels while all other current assets increased $1.0 million, including an increase in deferred tax assets of $1.4 million during the period. Accounts payable and accrued expenses increased $4.3 million principally to support a higher level of sales and production while a reduction in the current portion of debt increased working capital by $1.4 million.
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Dixie Group Inc. has a market cap of $45.3 million; its shares were traded at around $3.7 with and P/S ratio of 0.2. DXYN is in the portfolios of Chuck Royce of Royce& Associates.
Highlight of Business Operations:
Including $211 thousand of cost incurred in the first nine months of 2010, expenses incurred for the consolidation and organizational changes associated with the 2008 consolidation and cost reduction plan were $5.8 million since inception in the third quarter of 2008. Cost recognized included $3.2 million of costs to consolidate facilities, $1.1 million of severance and employee relocation expenses and $1.5 million of costs associated with the exit of our leased facility in Santa Ana, California. The cost associated with the exit of the leased facility may change in the future based on facts and circumstances.Facility Consolidation and Severance Expenses and Goodwill Impairment. During the third quarter and first nine months of 2010, we recorded $304 thousand and $637 thousand respectively, of expenses primarily related to associate relocation obligations and completion of computer systems modifications under our restructuring initiatives that were begun in 2008 and 2009 and exit costs related to our leased facility in California. During the third quarter and first nine months of 2009, we recorded $563 thousand and $2.3 million respectively, of expenses related to facilities consolidations and severance cost under our restructuring plans. We recorded a $31.4 million non-cash charge in the first quarter of 2009 to write-off the remainder of our goodwill based on our assessment of its carrying value compared to its estimated recoverability.
Operating Loss. Our operating loss was $1.9 million, or 3.4% of net sales, in the third quarter of 2010 compared with an operating loss of $1.7 million, or 3.4% of net sales, in the third quarter of the prior year. For the first nine months of 2010, our operating loss was $4.2 million, compared with an operating loss of $41.3 million, in the first nine months of 2009. For the first nine months of 2009, the operating loss included $31.4 million of non-cash expenses related to impairment of goodwill and facility consolidations and severance of $2.3 million, or $1.7 million higher than the level of consolidation expenses in the first nine months of 2010.
Loss from Continuing Operations. The loss from continuing operations was $1.9 million, or $0.15 per diluted share in the third quarter of 2010 and $5.0 million, or $0.40 per diluted share, for the first nine months of 2010 compared with a loss from continuing operations of $2.0 million, or $0.16 per diluted share in the third quarter of 2009 and $38.4 million, or $3.13 per diluted share for the first nine months of 2009. The loss from continuing operations for the first nine months of 2010 included $428 thousand, or $0.03 per diluted share of losses associated with consolidation and severance expenses. The loss from continuing operations for the first nine months of 2009 included $29.9 million, or $2.44 per diluted share of losses associated with the impairment of goodwill and consolidation and severance expenses.
Net Loss. Discontinued operations reflected a loss of $28 thousand, or $0.00 per diluted share, in the third quarter of 2010 compared with income of $23 thousand, or $0.00 per diluted share, in the same period in 2009. Discontinued operations reflected a loss of $158 thousand, or $0.01 per diluted share, for the first nine months of 2010 compared with a loss of $176 thousand, or $0.01 per diluted share, for the first nine months of 2009. Including discontinued operations, the net loss was $1.9 million, or $0.15 per diluted share, in the third quarter of 2010 compared with a net loss of $2.0 million, or $0.16 per diluted share, in the third quarter of 2009. The first nine months of 2010 reflected a net loss of $5.2 million, or $0.41 per diluted share, compared with a net loss of $38.6 million, or $3.14 per diluted share, in the same period in 2009.
Working capital increased $2.1 million in the first nine months of 2010. Although total receivables declined $266 thousand during the first nine months of 2010, trade accounts receivable increased $6.4 million primarily due to an increase in sales and seasonably low accounts receivable at the end of 2009, while income tax receivables decreased $6.9 million primarily due to tax refunds of $6.7 million received in the first quarter of 2010 while all other receivables increased $213 thousand. Inventories increased $4.2 million to support higher levels of business activity from the year end 2009 levels while all other current assets increased $1.0 million, including an increase in deferred tax assets of $1.4 million during the period. Accounts payable and accrued expenses increased $4.3 million principally to support a higher level of sales and production while a reduction in the current portion of debt increased working capital by $1.4 million.
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