Dixie Group Reports Loss in Second Quarter

Chattanooga, TN, Aug. 2, 2012 -- The Dixie Group reported a second quarter net loss of $433,000, or $0.03 per share, compared with net income of $766,000, or $0.06 per share, for the year-earlier period.

Dixie reported sales of $66.5 million, compared to $69.2 million a year ago.

"Dixie had strong residential product growth in the quarter with 5.6% improvement in sales compared to a decline for the industry," said CEO Dan Frierson.

"Our commercial products, however, declined against a strong period a year ago. The industry, we believe, had growth commercially during the quarter. Notable was growth in our upper-end residential segments with over 11% sales increase, excluding sales to mass merchants. Favorable activity early in the year slowed as we got later into the quarter. We expect this slower pace to continue throughout the summer months."

The company said it plans to launch a line of Stainmaster TruSoft products, as well as a new "permaset" wool dyeing process.

Dixie said it is one of only two suppliers to deliver TruSoft to the market this year.

The new dyeing process, Dixie said, offers unlimited color selection to the high-end design community in wool products.

The company said it hopes its mass merchant segment will grow later in the year with the introduction of new products.

The company also said it is bringing in new leadership for its commercial business.

"Continued uncertainty in the economy has resulted in a softer sales period that we expect may continue throughout the summer," Dixie said.

However, we are confident that the upper end of the residential market is recovering faster than the rest of the market, and we will continue our emphasis on serving these customers."