Dixie Group Inc. (DXYN, Financial) filed Quarterly Report for the period ended 2010-06-26.
Dixie Group Inc. has a market cap of $44.9 million; its shares were traded at around $3.51 with and P/S ratio of 0.2. DXYN is in the portfolios of Chuck Royce of Royce& Associates, Jim Simons of Renaissance Technologies LLC.
Operating Income (Loss). Our operating income was $59 thousand, or 0.1% of net sales, in the second quarter of 2010 compared with an operating loss of $458 thousand, or 0.9% of net sales, in the second quarter of the prior year. For the first six months of 2010, our operating loss was $2.2 million, compared with an operating loss of $39.6 million, in the first six months of 2009. For the first six 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 $1.7 million, or $1.4 million higher than the level of consolidation expenses in the first six months of 2010.
Loss from Continuing Operations. The loss from continuing operations was $684 thousand, or $0.05 per diluted share in the second quarter of 2010 and $3.1 million, or $0.25 per diluted share, for the first six months of 2010 compared with a loss from continuing operations of $984 thousand, or $0.08 per diluted share in the second quarter of 2009 and $36.4 million, or $2.97 per diluted share for the first six months of 2009. The loss from continuing operations for the first six months of 2010 included $226 thousand, or $0.02 per diluted share of losses associated with consolidation and severance expenses. The loss from continuing operations for the first six months of 2009 included $29.6 million, or $2.41 per diluted share of losses associated with the impairment of goodwill and consolidation and severance expenses.
Net Loss. Discontinued operations reflected a loss of $60 thousand, or $0.01 per diluted share, in the second quarter of 2010 compared with a loss of $83 thousand, or $0.01 per diluted share, in the same period in 2009. Discontinued operations reflected a loss of $130 thousand, or $0.01 per diluted share, for the first six months of 2010 compared with a loss of $199 thousand, or $0.02 per diluted share, for the first six months of 2009. Including discontinued operations, the net loss was $744 thousand, or $0.06 per diluted share, in the second quarter of 2010 compared with a net loss of $1.1 million, or $0.09 per diluted share, in the second quarter of 2009. The first six months of 2010 reflected a net loss of $3.3 million, or $0.26 per diluted share, compared with a net loss of $36.6 million, or $2.99 per diluted share, in the same period in 2009.
Working capital was reduced $2.9 million in the first six months of 2010, principally as a result of lower levels of receivables and an increase in accounts payable and accrued expenses. Trade accounts receivable increased $4.7 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. Inventories increased $4.0 million, primarily in raw materials and work in progress, to support higher levels of business activity from the year end 2009 levels. Accounts payable and accrued expenses increased $6.4 million principally to support a higher level of sales and production and a reduction in the current portion of debt increased working capital by $1.0 million.
Capital expenditures for the six months ended June 26, 2010 were $247 thousand, while depreciation and amortization was $5.9 million. We expect capital expenditures to be approximately $2.5 to $3.0 million for fiscal 2010, while depreciation and amortization is expected to be approximately $11.7 million. Planned capital expenditures in 2010 will be primarily for enhancements to existing equipment and facilities.
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Dixie Group Inc. has a market cap of $44.9 million; its shares were traded at around $3.51 with and P/S ratio of 0.2. DXYN is in the portfolios of Chuck Royce of Royce& Associates, Jim Simons of Renaissance Technologies LLC.
Highlight of Business Operations:
Facility Consolidation and Severance Expenses and Goodwill Impairment. During the second quarter and first six months of 2010, we recorded $122 thousand and $333 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. During the second quarter and first six months of 2009, we recorded $117 thousand and $1.7 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 Income (Loss). Our operating income was $59 thousand, or 0.1% of net sales, in the second quarter of 2010 compared with an operating loss of $458 thousand, or 0.9% of net sales, in the second quarter of the prior year. For the first six months of 2010, our operating loss was $2.2 million, compared with an operating loss of $39.6 million, in the first six months of 2009. For the first six 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 $1.7 million, or $1.4 million higher than the level of consolidation expenses in the first six months of 2010.
Loss from Continuing Operations. The loss from continuing operations was $684 thousand, or $0.05 per diluted share in the second quarter of 2010 and $3.1 million, or $0.25 per diluted share, for the first six months of 2010 compared with a loss from continuing operations of $984 thousand, or $0.08 per diluted share in the second quarter of 2009 and $36.4 million, or $2.97 per diluted share for the first six months of 2009. The loss from continuing operations for the first six months of 2010 included $226 thousand, or $0.02 per diluted share of losses associated with consolidation and severance expenses. The loss from continuing operations for the first six months of 2009 included $29.6 million, or $2.41 per diluted share of losses associated with the impairment of goodwill and consolidation and severance expenses.
Net Loss. Discontinued operations reflected a loss of $60 thousand, or $0.01 per diluted share, in the second quarter of 2010 compared with a loss of $83 thousand, or $0.01 per diluted share, in the same period in 2009. Discontinued operations reflected a loss of $130 thousand, or $0.01 per diluted share, for the first six months of 2010 compared with a loss of $199 thousand, or $0.02 per diluted share, for the first six months of 2009. Including discontinued operations, the net loss was $744 thousand, or $0.06 per diluted share, in the second quarter of 2010 compared with a net loss of $1.1 million, or $0.09 per diluted share, in the second quarter of 2009. The first six months of 2010 reflected a net loss of $3.3 million, or $0.26 per diluted share, compared with a net loss of $36.6 million, or $2.99 per diluted share, in the same period in 2009.
Working capital was reduced $2.9 million in the first six months of 2010, principally as a result of lower levels of receivables and an increase in accounts payable and accrued expenses. Trade accounts receivable increased $4.7 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. Inventories increased $4.0 million, primarily in raw materials and work in progress, to support higher levels of business activity from the year end 2009 levels. Accounts payable and accrued expenses increased $6.4 million principally to support a higher level of sales and production and a reduction in the current portion of debt increased working capital by $1.0 million.
Capital expenditures for the six months ended June 26, 2010 were $247 thousand, while depreciation and amortization was $5.9 million. We expect capital expenditures to be approximately $2.5 to $3.0 million for fiscal 2010, while depreciation and amortization is expected to be approximately $11.7 million. Planned capital expenditures in 2010 will be primarily for enhancements to existing equipment and facilities.
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