DXYN - Earnings call transcript Q4 2018

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Operator

Good day, and welcome to Dixie Group, Inc. 2018 Fourth Quarter Earnings Conference Call. Today's call is being recorded. At this time, for opening remarks and introductions, I would like to turn the call over to Chairman and Chief Executive Officer, Dan Frierson. Please go ahead.

Dan Frierson

Sarah. you, Thank to everyone quarter year-end and And our call. conference welcome fourth Faulkner, me Financial with have our today, I Jon Chief Officer.

release. Our Safe our press to reference by Harbor statement Web is site included both and

of XXXX, compared results loss the approximately $XXX our For from to $X,XXX,XXX. On a in basis, press loss was a operations for The been from continuing XXXX. release, had per in $XX,XXX,XXX loss plan. share company net the the operations or in million $X.XX of XXXX $XXX as improvement a $X.XX compared the million continuing to I operations XXXX from non-GAAP have continuing sales share impact would per assume profit of as adjusted of for

input residential business reorganize while surface we our we a business The was industry to commercial support of of managed integration sales share throughout this our of forces we our profitability. businesses commercial have functions, have in Our residential as XXXX, labor while Commercially, flat. taking carpet, culminating been late as business the modular XXXX. complete we costs. the our the operational and dyed focus in quarter, environment. has lower solution the grew footprint with Residentially year our operations, product has our leadership the been increased facilities under towards soft productivity advantage commercial we two on offering of believe we by the methodically into end market expanded our of David continued the combining quarter sustained by other volume shipments, this retail first X%, gain been our have Beginning Hobbs, brought segment we driving bringing when floorcovering to

XXX market Our XXXX, over had residential surface ever. designs. carpets XX we largest in residential period. during the We surface product launched products styles same and new including hard launch hard our the In XX tripled sales

of our tile is line broadloom shipments new of for eNeRgy we pleased began importance our collection. selection a an display by dealer especially network. XXXXs The in with and street street network branded to floor in-store line stream This was styled broadening nylon carpet Dixie highly products. commercial standards. to the main updated product XXXX our soft styled Masland gain by in modular to performance X,X reinvigorating commercial the at and our We're enhance space The high ensure an soft Masland product to and vehicle. serviced moderate our as developed EnVision with market dealer designs commercial our focus selling wider selection. with this Our design program expanded offering of a X,X. and main carpet to residential price covering range Home line product and floor products, main mill We the are with through our points products XX made complete was extension of with products we're commercial is new eNeRgy quality highest new exciting and mid floorcovering These consumers. our new reach

flooring and Fabrica's offerings with offering tile and and with both in high-end more our unique offering while best-in-class brand. placement In selection We collection quality addition, of our looks later distribution Stainmaster product quality the system line French the XX% with -- we vinyl by flooring across wood including but Fabrica expanded PetProtect features and States. launched style initially oak, expanded the The with United the and Fabrica luxury selective line. maple a plank southeast, birch

is waterproof facilitate the Coast to core To business flooring launch our our luxury our designed tripling latest expanding points service various rigid line. growth, flooring to an meet flooring in and with building to we we're momentum as XXXX, East well residential create vinyl addition needs our XXXX consumers. This offering we're new on our the vinyl the distribution surface a For durable center TruCor, by our of extremely gained hard luxury of price to surface SPC with this West products of Coast as product range distribution center. broader luxury of hard vinyl

Our results undergoing market in the the have late been we've by impacted that since XXXX. commercial been restructuring

and down was the for while market, down sales of believe over marginally. commercial line product Our flooring the We our we our our Calibrè sales with luxury soft flooring doubling products. year offering floorcovering XX% luxury commercial vinyl expanded through were vinyl

products that 'XX type new of material. highest using Fibers carpet carpet conscious X,X that solution the the performance nylon X,X environmentally level most Notch Top in the Thrive collection as modular by fiber as in Universal to world stands recycle nylon We with a such have solution high tile introduced a of alone

in commercial As forces emerge contract. sales we have Atlas the the with two and Masland

modular carpet to dedicated marketplace. tile, rugs call excellent Jon commercial We At formulated to design customers flooring financial Faulkner of vinyl like the line this our for are our facilities complete positioned cutting service on operational commercial with luxury carpet, focused footprint results review newly to with service XXXX. broadloom and our and to I'd edge and our from time,

Jon Faulkner

you, Thank Dan.

were million sales Looking $XXX.X the sales sales XXXX. at million, for our in year, X.X% $XXX of of our decrease

were the in XX.X%, believe the we down industry, slightly. Residential XXXX. Our XX.X% while to Gross flat. was XX.X% industry sales Products year net down was of X.X%, the profit as commercial up compared products while was were for

operations. in For impacted sales costs the our to our our [indiscernible] XXXX, in lower and sales by absorbed commercial business year were of manufacturing negatively under costs

asset from our sold, $XX including in Improvement expense goodwill inventory fully to year was compared reduction profit as later cost operating of Commerce to Georgia million our a gross intangibles. expense and the once Profit inventories our an Chickamauga, close totaled operations inventory down approximately of the tufting margin savings expenses settlement, severance million for Other and write-down writing an result million $X.X settlement to improvement legal compared year in impacted all and profit of million of XXXX. relative in in $X.X goods of impairment $X.X the of related Plan including is million impairments, year profit for million. and facility in basis. administrative inventory to total expenses, $X.X annualized With Selling million million, XXXX. our decision the consolidation, impairment California on million and million part the the Our XX.X% $XX.X including XXXX the by XXXX implemented $X.X $X.X The was of restructuring in plan. loss expense goodwill impairments All expense legal XX.X% and $XX.X items in as operating the in an $X the the for

rates the Our higher from $X.X tax interest due for levels had XXXX, higher per of of debt. We operations million was in interest of $X.X expense XXXX share continuing for $X.XX was higher $XXX,XXX XXXX, loss million interest expense year. to credit versus diluted and in

Looking of lower at the at our million balance the sheet the receivables year our year, on end $X.X were sales. during down

was amortization expenditures approximately during decreased cash equipment $X Depreciation year Anticipate acquisitions million depreciation million XXXX. inventories and the of and year. for amortization by $X.X financing Capital Our funded those and XXXX including million. for million $X.X of $XX.X capital for million. $XX.X and approximately was the

the $X.X million. lines Saraland of end the end end leaseback million $X year, year at under the $XX.X at at the the by an increasing our Our we debt credit of the approximately million. $XXX of decreasing year was of availability our After of did million for million our year. stood $XX.X sale the availability facility Accessible by

Web on is presentation Our including our Dan? our non-GAAP site information investor at www.thedixiegroup.com.

Dan Frierson

you, Jon. Thank

operations improve our better the first and moved end our California the Santa tufting commercial to Our as Georgia the Difficulty] Commerce of our this the operation the in Eton we as facilities. plant implemented to and cost XXXX profit the staffing commercial other production commercial to being our our Atmore, samples we'll completed XXXX. to these our our the was Atlas Saraland operations. moved items commercial bulk equipment productivity out these many consolidation match [Technical our began the operation quarter Alabama operations end meet be plant equipment other of facilities tufting the various We advantage our associates XXXX. improvement has tufting fall Eton, demand rug plan we closure of process of our facilities in exiting Ana, support this by We to our to from California facility the to This our and near We of the structural commercial Mobile. to take Atmore, during California completely time of the increased of Roanoke reduced The and were operations. with Adairsville closure transferred captured to began Atlas past and of with of able we marketplace. have at lowered response We improved business tufting plant move efforts Chickamauga of

physical addition consolidated to well as functions. commercial design In sales consolidated movement support entire the in our we equipment inventory, of functions Saraland and our as

and Atlas, The carpet has modular carpet, now or not product products. were tile, much vinyl capabilities sales broadloom to forces but added Our providing and the contract line, of Tapistron equipped wool in only a product with rugs. custom, benefit and a force broader broad Masland nylon commercial line merged less design luxury combined create distinct flooring CYP sales

Dixie to XXX from manufacturing department of done lose operations company we're fine over by and though our functions all of the associates beginning of of XX% XXXX. through we're headcount the within review our having after team. or We have stronger reduced feel from of by We sad the members many department sales our workforce

wherever cost process, costs we identified reductions to continue this many have advantageous. and During cut we'll

plan and during of million impairments related restructuring $X.X the inventory Our expenses expenses asset combined were and including write-downs, XXXX. severance

cost implemented basis $XX reductions on annualized during XXXX. over million once However, our were fully an total

of goodwill all written-off intangible now and have we addition, In our assets.

improve we improvement be forward. plan quarter, should to well-positioned we As going results this profit the complete

one on to and We into internal we our and manufacturing In and Masland under marketing continue quality to our two forces. and brands operations improve sales commercial summary, and thereby consolidated product continue service, improvements management on Atlas sharing consolidation development contract focus costs. well

to with and by quarter the of the [ph] improvement XXXX. our profit progressing third plan in are place bulk [expect] of We the savings be

TruCor SPC launching vinyl are year. flooring We this luxury earl an line

of placed luxury shipping We over X,XXX of EnVision Stainmaster owned-residential soft and brands. collection. floorcovering displays our We began Dixie have Masland in TruCor flooring vinyl PetProtect X,X our through

commercial that last street the confidence year last dip well spring this and main for in Masland the is subsequent coming product We weather our the revamped market felt. being in line. seems as reception now be conditions year are with eNeRgy late decrease months, later stock the pleased the as several to Due newly consumer to to

for XXXX. high weeks versus same the quarter the sales the in floorcovering digits for first are single down nine Our period

questions. to last compared would slightly like were same behind time, open this the the orders, to we only however, Our period call to year. up At

Dan Frierson

very all I thank you and are with being the to or us And thank want the much. you Sarah, today you forward talking to with on future. that call of look in

Operator

thank today's gentlemen, in you conclude does and program. conference. This today's Ladies participating for

all may one a day. Every disconnect. You great have

The Dixie Group, Inc. (DXYN) 7 Mar 192018 Q4 Earnings call transcript