Dixie Group Results Better Than Industry Average

Chattanooga, TN, April 29, 2008--The Dixie Group Inc. reported net income of $13,000, or $0.00 per diluted share, for the first quarter of 2008 compared with net income of $171,000, or $0.01 per diluted share, for the first quarter of 2007.

Income from continuing operations was $82,000, or $0.01 per diluted share, compared with $237,000, or $0.02 per diluted share, for the first quarter of 2007.

Sales for the first quarter were $70.7 million, down 5 percent from sales of $74.5 million in the year-earlier quarter.

“The carpet industry continued to be adversely affected by declining sales of new and existing residential housing units, difficult credit conditions, and contracting consumer confidence," said CEO Daniel K. Frierson.

"Industry sales declined 7 percent compared with the year-earlier first quarter, while our first quarter carpet sales reflected a 3 percent year-over-year decline. Our residential carpet business was down 10.6 percent, slightly less than the industry’s residential carpet decline, but our commercial carpet business grew over 10 percent, well ahead of the industry’s commercial carpet growth."

Frierson said that the company's new residential products have been popular. He noted that wool carpet collections were introduced late last year by Masland and earlier this year by Fabrica, and the company plans to expand its wool lines this year.

 “Although severe weakness in the housing industry and tough credit conditions will likely persist throughout this year, we expect improved sales volumes during the second quarter as a result of the normal seasonality of the carpet industry and our business," Frierson said.

"We believe that conditions in the residential portion of our industry will improve somewhat in the last half of this year, but the rate of growth of commercial carpet sales is expected to slow. We anticipate our sales to continue to outpace those of the carpet industry as a whole, due to the performance of our commercial business and the projected effect of our new residential products."

Related Topics:Masland Carpets & Rugs, The Dixie Group