Dixie Group Reports Losses in 2018; Continues Focus on Profit Improvement Plan
Dalton, GA, March 8, 2019--The Dixie Group reported net sales of $405.0 million for 2018, compared to sales of $412.5 million for 2017. The net loss for 2018 was $21.4 million, compared to a loss of $9.6 million in 2017.
For Q4, sales fell from $105.0 million in Q4 2017 to $98.2 million in Q4 2018. Net loss for the quarter was $13.7 million, compared to a loss of $9.5 million in Q4 2017.
Commenting on the results, Daniel K. Frierson, chairman and chief executive officer, said, “2018 was a year of change for both Dixie and the industry. The industry dynamics have shifted as we have seen the soft floorcovering market shrink in square feet while at the same time we saw the rapid rise of a new market segment with luxury vinyl flooring which has taken market share from all major flooring categories. During this time, we have been shifting our emphasis to include hard surfaces products, primarily luxury vinyl flooring, in our product offering. Our residential business has continued to gain market share as we have expanded our footprint throughout the retail environment. Residentially our operational focus this past year has been on taking advantage of our increased productivity as we lower our labor and other input costs. Beginning in late 2017 when we brought our two commercial floorcovering businesses under the leadership of David Hobbs, we have been methodically combining our operations, culminating with the complete integration of our management, support functions, sales forces and commercial facilities by the end of the first quarter of 2019. Commercially we have been driving our product offering towards solution dyed modular carpet tile while we reorganize the commercial business to bring it into sustained profitability.
“The residential business soft surface product line grew by 1.8% while the industry, we believe, was flat. Our hard surface sales tripled during this same time period…To facilitate this growth, we are expanding our distribution of hard surface products to our west coast distribution center as well as our east coast service center.
“Our results in the commercial market have been impacted by the restructuring we have been undergoing since late 2017. Our commercial product sales for the year were down over 13.2% while the commercial soft floorcovering market, we believe, was down marginally.”
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