Dixie Group Sales Decline 16% for 2020, Profitable in Second Half
Dalton, GA, March 4, 2021-The Dixie Group reported net sales of $315,939,000 for fiscal year 2020, a 16% decline compared to sales of $374,582,000 in fiscal year 2019.
The Dixie Group was profitable in Q3 and Q4 2020. In Q3, operating profit was $2.6 million and in Q4, $1.5 million. In Q4, residential sales were up 15%.
Net loss for 2020 was $9,208,000, compared to a net income of $15,271,000 in the previous year. The decline in sales and the loss in 2020 were primarily driven by the impact of the Covid-19 pandemic. Net income in 2019 was the result of the sale of the company’s facility in Santa Ana, California, which generated a $25 million gain in Q4 2019.
Says chairman and CEO Daniel Frierson, “While we are still assessing the long term impacts of the Covid-19 crisis on our markets and operating practices, we are encouraged by the improvement in sales. The abrupt decline of over 50% in sales in April was certainly a shock to our system, but we have been pleased with the recovery in the residential market. Low interest rates helped drive strong trends in new home construction and existing home sales helped to improve business conditions for our residential segment through the second half of the year, as many flooring retailers emerged from the Covid-19 downturn, and an increasing number of consumers began home improvement projects. The third quarter showed positive growth versus prior year, driven by strong sales in the specialty retail channel, and the fourth quarter was a very strong quarter in all segments of the residential business. Our soft surface segment grew throughout the second half of 2020, driven by our EnVision 6,6 program as well as aggressive promotional activity. We are continuing our diversification strategy by significantly expanding our EnVision 6,6 offering with over 20 new styles across all brands...Residential order entry and sales have continued to improve since the second quarter and ended the year very strong with orders and shipments up 15% for the fourth quarter.
“We have continued to focus on growing our luxury vinyl flooring business. Our hard surface programs grew significantly for the year, with the Trucor and Fabrica Wood programs pacing well ahead of the hard surface market. ...We expect to double our Fabrica Wood placements in the market in 2021.
“Our commercial business and the commercial market continues to be adversely impacted by Covid-19. Sales for the year were down more than 35% from the previous year. We are beginning to see some improvement, but we believe the recovery will be longer coming and not as dynamic as the residential market recovery. Our commercial business is excited about one of the most unique innovations in our modular carpet tile offering. Sustaina is now the ‘standard’ for backing on orders. The Sustaina modular tile backing system is a PVC and polyurethane free cushion modular carpet tile backing with very high recycled content. The product is breathable and able to be installed in environments up to 99% relative humidity and up to a pH of 12 when utilizing our custom formulated Sustaina 99 adhesive. The product provides the cushion backing benefits of increased under foot comfort, appearance retention and sound absorption.”
In Q1 2021, orders were better than shipments due to availabilty of sourced carpet fiber. Both Invista and Ascend implemented force majeure as fallout of the extreme weather in Texas.
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