DXYN - Earnings call transcript Q4 2019

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Operator

Good day and welcome to the Dixie Group, Inc. 2019 Earnings Conference Call. At this time, all participants are in a listen-only mode. [Operator Instructions] As a reminder, today’s call is being recorded. At this time for opening remarks and introductions, I would like to turn the call over to the Chairman and Chief Executive Officer, Dan Frierson. ahead. go Please

Dan Frierson

Strategic and call. Darrell Chief to fourth President our Officer; Thank have welcome with conference of Vice our I John our me quarter and you, Faulkner, everyone Initiatives. Allen Financial Danzey,

Our our and to reference website statement safe press is harbor by both included release.

a as or as profit the operations from $XX,XXX,XXX. company million for sales from $X.XX million share $XXX loss XXXX of net XXXX, to of to the in XXXX. $XX,XXX,XXX per operations continuing compared diluted income For Net $XXX was year was $XX,XXX,XXX had compared continuing XXXX. The XXXX of in for

the For of to $X,XXX,XXX release, quarter share. results On profit share. a profit was operations non-GAAP for diluted was from basis, a continuing our $XX press operations on continuing the schedule million quarter, as fourth or $X.XX attached diluted the or per per shown $X.XX from the

we lease period facility quarter million Street sold or approximately of Susan the $XX to up $X.XX the of options In with gain sale XX years. was share. XXXX, fourth on our The the for per signed and a

Our a sale. facility the result million senior $XX as of was paid down credit by

of $XX of the has from debt the Our million. over reduction XXXX through been end third quarter XXXX

equity XX% Our total stockholders’ of result increased as the transaction. a

residential was The year the prior by industry. the to for was industry. soft single-digits surface both business for in change soft down of high the surface impacted relative XXXX The weakness a Dixie market year. and residential XXXX the floorcovering was in soft

retailers our segment, mass the space merchant and year. Despite the to the surface our retail approximately hard merchant shifted market XX%. surface we sales, in second in sales our decline mid by soft sales single-digits by specialty low customer in hard changes the impacted floor surface grew the substantial in declined half where our outpaced the merchant our to emphasis mass as saw of also these mass channel We products. sales This more

Our floorcovering most over positioned year for surface in in one marginal. were product commercial the for Atlas soft we extensive commercial commercial have market was feel the drop contract business. sales the Masland down down with soft growth we we the of the lines believe business, XX%, while Despite

this turn over give our results, Allen At comments. Danzey will to time, which will have I it I to financial after more

Allen Danzey

Thank you, Dan.

XXXX of fourth net quarter an sales were sales the million, were Gross $XXX.X as million. million the net decrease This sales XXXX. million. the was net of year, $XX.X X.X% of XX.X% profit XXXX XX.X% from for $XXX of the the for quarter for compared was over XXXX. $XX.X Our decrease quarter in sales a the sales X.X% to All in fourth net

profit XXXX, of gross XX.X% was Improvement part inventories Plan. Profit Profit as made impacted cost changes a In Improvement XXXX, was of by down written of compared negatively XX% XXXX. our year, cost the Plan. of to net showed improvement as For In result of part sales our in as sales as sales our our of

in the XX.X% quarter to quarter expenses same in percent fourth XX.X% were the of administrative XXXX. net XXXX and Selling of a sales as compared of

Plan, in part the of in of complete. For XX.X% comparison Profit XXXX. to which This costs and as sales result now were the compared despite reductions as our XX.X% cost is of year, net selling reduction favorable was administrative the sales Improvement the

or of a $X.XX quarter Street was years. previously, sold Santa the share. we in with options approximately The our gain up signed per the facility fourth $XX for California XXXX, period and stated of on XX to a lease in sale Dan Ana, As Susan million

result $XX million paid facility of credit was down the senior about as Our a sale.

of $XX reduction over XXXX. through quarter end of the the debt third XXXX million from total was Our

in of XXXX. the expense As quarter XXXX as debt, to down a XX.X% was of result of fourth compared fourth this quarter interest in the reduction

million the interest in $X.X to compared XXXX. was million $X.X in XXXX expense For year,

increased equity XX% stockholder’s third over Our the quarter of XXXX.

XXXX, reductions in expenses. cost of a a completed in basis XXXX to we to we of the Improvement XXXX. million Plan in fourth of which structure. incurred quarter consolidation facility This as an Total began plan expected as Profit During and $X severance our are $XX million cost compared result annual excess the be on

We loss million quarter the from the period fourth gain On million as in non-GAAP $XX.X results a diluted million related was for restructuring, $X.XX expenses on sale in or profit to fourth of the operating our the operating compared and to profit a same per in $X.X the of share. excluding facility quarter operations had of XXXX. Street continuing XXXX Susan an $XX.X of of basis, an

For share for the the of as was year profit compared operating loss $X.XX entire an quarter operating was XXXX. year continuing profit XXXX. per from million XXXX, $XX.X $XX.X Diluted fourth to $X.XX for of the and our in million operations

share. fourth stock plan XXX,XXX the long-term to during at the of $XX.X Outside of receivables down the price operating XXXX decreased our million. portion, $X.X result acquisitions, as of Inventory total previously million lease of sheet, the average Under decreases volume. the our balance during in capital. sale our end equipment in Capital buyback funded and decreased in those to purchased the including stock by to $X.XX and XXXX. the million. Turning Street approximately our and million million for at XXXX XXXX, XXXX. including cash of sales $XX.X $X.X an announced Susan expenditures million we shares short-term of a quarter our and were $X of debt, anticipate approximately We financing, amortization amortization liabilities, be in was XXXX depreciation quarter Depreciation $XX.X was of and capital working of $X.X million per lower due

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

Dan Frierson

$XX to cost and in We completed Plan of XXXX to Profit over million cost Allen. savings XXXX. million in the generated beginning relative plan XXXX, you, Improvement $XX structure. Since Thank our this annual over implement our

have realigned or this of plants. X down part shut plan As we

plan of implementation the quality over has With been cost by of reduced this XX%. our

combination Our Susan has from since $XX by over about in by our the headcount XXXX. just of The has reduced Street reduced scheduling debt capital of of reduction sale The reduction facility beginning in working our million. focused a and capital system. in come planning has our been XX% working the time and

$X levels. In reductions Plan, Profit to including of medical this in reductions, plans, in Improvement in processing addition and acceptable margins work as raw we restore to the we our anticipate cost continue over XXXX to year to material changes million savings our

excited itself from again XXX has XXX to cotton textile the transformed and company transformation a yarns, we a Then today synthetic covering full from a history, floor As then yarn are years a yarns Over to service to to our with provider XXXX again, carpet we growing supplier to and surface celebrate continue enter yarns. of year business. the program. hard we manufacturer, carpet

our businesses we including of next Contract, and the line our have our we to tile, proud broadloom service product rugs focused cutting two excellent Atlas into vinyl commercial design and we are and with flooring dedicated operational merged starting commercial from about luxury our extensive We history carpet to customers facilities are are the modular as a edge commercial service excited marketplace. our positioned and an carpet, heritage, Masland company, XXX years with

very market product As the set This recycled backing. of XX% modular Sustaina Collection humidity available comes friendly and XX.X% when to Crafted content. part high able environments commercial recycled most cushion with and environmentally us utilizing custom carpet total tile has a PVC breathable relative an modular unique with have XX and our to Sustaina of and innovations: in polyurethane of system environmentally the in customers. patterns. and tile The to this Crafted product broad designers be our one is with content, installer a adhesive. in a product along conscious Sustaina pH the backing up collection backing of differentiates line, innovation highest conscious line introduced formulated This we market product The free to up beautiful is today. installed in Sustaina our XX the

EnVision soft X,X, introduced and including Strongwool. XX Residentially in new we styles STAINMASTER, surface,

manufacturer a proud launch STAINMMASTER carpet be beautiful to and STAINMASTER continue of some in unique We and products leading marketplace. the the most to are in

new our opportunities steps Masland saw in have new initially XXXX. At we X,X, we in all across products a program. divisions. of launched and our In Masland and Energy late the our line, growth styles are tile addressing and broadloom XX taking in we XXXX program, traction in also that XXXX EnVision X,X significant our which to adding new in some key diversify we are offering with We EnVision have

across color XX We product story natural a product dyed colors. line. Colorplay, our gives innovation, us with striations nylon, yarn featuring for Grace, a Colorplay innovation This are solution a pending new unique Masland in PetProtect also named patent different in

our are being Masland crisp technology, very that work and TECHnique, a TECHnique of excited clean are about a covering. products which in with and floor lines. tufting Fabrica a more delivers is We finish than new art woven visual showcased

growing continued to on have focus our luxury business. vinyl We tile

poised and substantial successful growth we continue Prime are in the to of With achieved launch XXXX. TRUCOR the we TRUCOR

growing items family TRUCOR of number products of are the We our by in XX%. over

sizes out our X-inch with programs. X, We visuals and our and and new X building wide exciting in TRUCORSPC plank are program tile

in a new engineered are line. where Integrated real Grout simulate locking innovation the grout a tile, is to We system featuring Technology,

beautiful XX including visuals Carrara designs. launching this sizes, with are We marble x program XX integrated grout in XX multiple

program, widest This WPC XX oversized plank Oak and by feature visuals. We in XX offering are XXL longest product wide TRUCOR rigid high-end product the inches our core market. inches Prime on clean plank, planks The including and the visuals. our is long, launching inspired new the contemporary, French is in XX

and program We and points our in These us are products, Oak our Fabrica enhancements in this Home new team offering we residential finishes new exclusively continue Hickory. growth, Fabrica, sales this focus our sales surface wood To the growing under on adding color price brands. accelerate European give and including will X products are dedicated with to Dixie to our Masland division. expanding American representatives White hard Fabrica

we launched backing. XXXX Masland recycle brands We material, one, in the consumer In into TRUCOR launched TRUCOR Atlas and Sustaina X.XX% with We summary, ‘XX, and Prime. our have two post consolidated commercial polyurethane-free early PVC and contract.

items we growing over our this over We the to returned the profitability. styles number $XX and surface in in we lost In fourth of have our in operating we XXXX, of third paid offering. down new XX And XXXX, are XX% increased quarter by quarter, XX% Since by equity around in year. TRUCOR debt. soft we million the

we mentioned year. in quarter, the fourth the XXX,XXX of million authorized stock authorizing an plan over extension next $X stock buyback the Allen buyback As Yesterday, to shares earlier, of of up stock. the purchased Board of the

year. began, in and Sales last year. improved are year last activity levels of the orders the the and significantly and behind have business level As above was slow February of

the both in improvement residential retail experienced business. have and We commercial

merchant mass our to However, underperform. sales continue

the the to-date, our sales, quarter sales merchant excluding slightly are our of mass XXXX. For period behind same

company the month concerned what the ago The is the February, others levels. on ago year our about our sales for rate To-date, and of orders coronavirus. commercial will that a to and January. for for sales are residential delay businesses, China. all impact luxury of It from the up have were year weekly above been both to impact However, early has from substantially sales above shipments Certainly, vinyl in both the tile tell too slightly some and business.

sales had to time. our does have impact not terms at and of seem orders, In this it an

the time, And will this to meeting questions. at we open

Operator

Please Barry Instructions] Our Darbie. question. you. first Blank from Thank line of is of with J.H. [Operator coming the proceed question your

Barry Blank

year was congratulations. Good It morning, a job, great great and Dan. great quarter and a

Dan Frierson

Thank to morning you, Barry. you. Good

Barry Blank

of I’ve going companies a acquired either smaller possibly a) of acquisitions company What this seeing or the the being on? seeing In making is combine. couple flooring in consolidation, am I questions. had of philosophy trend lot a the with industry,

Dan Frierson

trend been years. the for many, on Barry, going Well, many has

around carpet be instance years mills in XX. around XXX used many to California, ago, For Dalton and there XXX

But trend on been to is years operations and our continues to been on. It examine forward. do obviously last is this been the players. the that board results. going continue active improving So, something has candidly, focus has fewer will that we as our certainly point, our at few But financial going because in not are there and

Barry Blank

maybe One business of the company the regarding hard more color trend you on increase what away the a to the from soft that give could question doing little I to hard to is flooring into flooring the have percentage compared flooring? flooring, soft

Dan Frierson

Barry, about TRUCOR in presentation. the the made I comments

there, getting invested have We were have heavily. surface. hard invested in heavily late We but we

that we this mentioned with help have were that. hiring already help will again XX% We what as are up hard to more hired time start people early XXXX, up last our much hard people to to we beginning be and think year. And the is for in us surface we and in that sell first exclusively sales jump surface are I year plans

Barry Blank

Okay, thank you much very Dan.

Dan Frierson

Thank you, Barry.

Operator

further the call questions any or Instructions] no for I queue, closing [Operator in additional Dan to With remarks. the will Frierson turn back

Dan Frierson

for Darrell, is XXXX very We that appreciate XXXX we thank this us all for quarter active was a news good this much. very we at Certainly, with facility no The fourth changes you time. you conference being call. have in have year planned of us.

So quarter. is focused of you our hard both and will you results visit operations growing next our and emphasis again the we end improving internal and improving again on Thank with surface at soft businesses. and

Operator

your Ladies conclude and gentlemen that again for will participation. conference. Thank you today’s

The Dixie Group, Inc. (DXYN) 5 Mar 202019 Q4 Earnings call transcript