The Dixie Group's Q1 Sales Up 7% YOY, Earnings Declined
Dalton, GA, May 10, 2022-The Dixie Group reported net sales of $77.6 million for the first quarter of 2022, or 6.7% above the net sales of $72.7 million in Q1 2021, as adjusted for the divestiture of the commercial business.
Net loss was $3.4 million for Q1 2022, compared to a loss of $2.0 million in Q1 2021.
In its SEC earnings filing, the company attributes this to increases in raw material costs on several fronts.
"We incurred significant and unsustainable increases in raw material costs as a result of the decision of our primary raw material provider, Invista, to exit the business," the filing reads. "We have identified other suppliers and we are implementing our strategy to diversify our fiber providers and bring our costs to a more favorable position. In addition, throughout 2021 and into the first quarter of 2022, raw materials costs with our other suppliers increased due to inflationary pressures and increased incoming freight costs on imported goods.
Continuing operations reflected a loss of $3.4 million, or $0.22 per diluted share, in the first quarter of 2022 compared with a loss of $0.3 million, or $0.02 per diluted share, in the same period in 2021.
Discontinued operations include financial results related to Dixie's commercial business, which the company sold in the third quarter of 2021. The loss from discontinued operations was $14,000 in the first quarter of 2022 compared to a loss of $1.8 million in the first quarter of 2021.
Though citing the volatility of current market conditions, the filing states that, "We believe, after having reviewed various financial scenarios, our operating cash flows, credit availability under our revolving credit facility and other sources of financing are adequate to finance our anticipated liquidity requirements under current operating conditions."
Dixie bulked up its inventory by $3.2 million this quarter in anticipation of increased demand in the second quarter, and is planning roughly $5 million in capital expenditures this year, primarily for new equipment.
Last week, the company held its annual shareholders' meeting, during which the board of directors was voted on, amid other measures. The following individuals were elected for a term of one year each:
William F. Blue Jr.
Charles E. Brock
Daniel K. Frierson (CEO)
D. Kennedy Frierson Jr.
Lowry F. Kline
Hilda S. Murray
Michael L. Owens
Related Topics:The Dixie Group