Dixie’s Income Up in 3Q, in Negotiations over Chro

Chattanooga, TN, October 28--The Dixie Group Inc. today reported the third quarter income from continuing operations was $3,554,000, or $0.28 per diluted share, compared with a loss from continuing operations of $60,000, or $0.01 per diluted share, for the third quarter of 2003. Sales for the third quarter of 2004 were $74,108,000, up 26% from sales of $58,790,000 in the year-earlier quarter. For the first nine months of fiscal 2004, income from continuing operations was $9,017,000, or $0.72 per diluted share, compared with income from continuing operations of $2,707,000, or $0.23 per diluted share, for the first nine months of 2003. Sales for the first nine months of 2004 were $209,329,000, up 23% from sales of $169,532,000 in the prior-year period. "Despite suspending operations at our Alabama facilities for approximately three days due to Hurricane Ivan, our third quarter results improved significantly," commented Daniel K. Frierson, chairman and chief executive officer. "Revenue rose 31% in our residential carpet business and 22% in our commercial carpet business, compared with the third quarter a year ago. Revenue grew in all of our operations with over half of the increase coming from our Masland and Fabrica businesses. This growth reflects the impact of the new products introduced over the last two years, a strengthening economy, and growing demand in the commercial markets we serve. "The higher sales volume improved manufacturing efficiencies and the absorption of fixed costs, and allowed us to better leverage selling and administrative expenses. We are particularly pleased with our results in light of our belief that the effects of the hurricane and suspended operations reduced third quarter revenue by approximately $2,000,000 and income from continuing operations by approximately $0.04 per diluted share. "We initiated several projects in the third quarter to support growth, improve customer service, reduce costs, and enable us to develop more differentiated products. At Masland's Atmore, Alabama, facility, we are expanding the size of our building to increase operating space and add new tufting technologies. Fabrica is also adding new tufting technology to its operations. The capital spending for these projects will be incurred in the fourth quarter 2004 and in 2005. "Although sales comparisons will be more difficult in the fourth quarter, our order entry and sales were very strong during the first four weeks of October, causing us to expect to continue to show positive trends in the fourth quarter 2004. Some of this improvement will be due to sales being shifted from the third quarter to the fourth quarter as a result of the hurricane. However, we continue to experience revenue growth well above the growth rate of the carpet industry as a whole and now expect sales for the full year 2004 to show year-over-year growth in the low 20% range," Frierson concluded. Results of discontinued operations reflected a loss of $38,000, or less than $0.01 per diluted share, for the third quarter of 2004, compared with a loss of $1,347,000, or $0.11 per diluted share, for the third quarter of 2003. For the first nine months of 2004, discontinued operations reflected a loss of $335,000, or $0.03 per diluted share, compared with a loss of $3,053,000, or $0.26 per diluted share, in the year-earlier period. Including discontinued operations, the company reported net income of $3,516,000, or $0.28 per diluted share, for the third quarter of 2004, compared with a net loss of $1,407,000, or $0.12 per diluted share, for the third quarter of 2003. For the first nine months of 2004, net income was $8,682,000, or $0.69 per diluted share, compared with a net loss of $346,000, or $0.03 per diluted share, in the 2003 period. Separately, the Dixie Group announced that it is currently negotiating with Monterey Carpets, Inc. to acquire its interest in Chroma Systems Partners. The acquisition is expected to be completed during the fourth quarter of 2004.

Related Topics:The Dixie Group, Masland Carpets & Rugs

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