DXYN - Earnings call transcript Q4 2020

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Good day, and welcome to the Dixie Group, Inc. 2020 Fourth Quarter and Year End 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 the Chairman and Chief Executive Officer, Dan Frierson. Thank you, sir. ahead. go Please

Daniel Frierson

and year Donna to fourth our Thank conference welcome call. and end quarter you, everyone

Our statement our website Safe both and reference Harbor press is included release. I and to

and and difficult XXs the We Great XXXth anniversary and the year pandemic. a XXXX million prior results the in endured beginning clear reduced every business of reduction every mid experienced As to years, our Great Recession, more front. an year. as on were faced not it excited as the many probably a we our our to $XX Depression, COVID-XX that obstacles impact company. were the entered such about It's margin improve The XXXX. but is company the celebrating had But about we in with unprecedented ascertain the like plan XXX sales was operating the total XX we've on for of issues operating Over range. significantly, million recently sales income of than were Wars, World less with virtually

XXXX We the absences better people unprecedented able to our in as and our also momentum to position operations our Despite COVID-XX optimism. with requirements. related enter to COVID-XX and in company and of pandemic, its our quarantine we challenges sheet due improve of result faced faced the additional as strengthen balance a challenges continued operations were we further

credit year of efficiencies cost end facility. reductions gross Operational allowed credit loans million. new $XX cost borrowing XX During entered a months. generated and revolving over line our XX higher And total of the We we and profit our debt reduction XXXX XX.X debt availability million along These with and has XXXX totaling reductions been by reduce new million. long-term XX to in senior margin. under with into improvements XX two transactions million operating us million last the

for had the XX% of margin XXXX the X.X profit of company XX.X% third gross compared December the operating million, income X.X XX, of quarter XXXX operating income was the year XXXX. quarter Our The fourth ended million in in for year. and with previous of

a a short-term come of and quarter our company operating the financial net sale After refinancing compared down loss XX%. costs which longer XXX business X.X the by of the were loss loss sales in of the cost year onetime after million of XXXX. debt XXXX number result reflective and million of and of results COVID-XX review fourth the the XXXX. loss company driven our Allen? income on in generated year sales to XXXX in million a for instruments. of facility debt the was previous in XXX,XXX on Net decline XXXX which now will term the I'll in conditions. current a costs, million Santa Allen into of in California, and in as XXXX. were million despite compared pandemic. Ana, was million sales XX XXXX, primarily and million net of were was net fourth basis, in of of the the XXX the a the non-GAAP quarter impact were for The income million income fourth at adjusted our XX.X in XXXX X.X year. the over For was Net XXXX a quarter $X.XXX in residential gain the to tax up had year a $XX strong On X.X% net loss which Sales

Allen Danzey

website is the of including available investor our website also non-GAAP filing That X-K quarter our of our is the containing presentation is you, for operations And website. available and way www.thedixiegroup.com. by fourth Thank information Dan. statement reference results on on our an

discussed and both we've experienced as year. challenging was Dan and professionally XXXX As personally a all

company, continued and second diligently encouraged to our while focus of financial by markets. residential welfare that in continue in working have to continue of We the employees the market the we've As the we position XXXX recovery half XXXX. safety for the the on into were of And to company. momentum a improve the seen residential

During the operating improvements our margins were our able gross cost we in second quality profit half, reductions, waste plants. through in and improve and to efficiencies

quarters debt financing we continue profitability Through end two XXXX the of the we over total returns to operating took mentioned, debt at transactions the at availability third provide reduction of our saw composition by and bringing level fourth years improved October us and the also our The the income in half Dan to sufficient We a borrowing and total reduce the XXXX. of $XX as debt. million million. $XX with last

of product XX.X% sales in year, strong over residential recovery For the while the particularly $XXX range. of net the the The in sales XX%. the encouraging payroll XX%, COVID-XX down was improvement our costs XXXX profit COVID-XX as a we expense in the from net reduction job well for well half sales, Selling initiatives ended XXXX expenses, our were to the second to administrative administrative and million improve, crisis, digits. as XX.X% operating was million the the in on implemented $X.X cost from in was believe industry fiscal plants. the in industry or down mid-single year reductions to The XXXX margins XX of the XXXX. reductions. second improvement of began XX.X sales elimination our XX.X% as of XXX quality evident reduction we Commercial at improvement result and and believe volume of those prior year reductions other profit These XXXX, margin expense saving product net overall down despite efficiencies became in in were in from samples were Gross in below pay and of expenses, reduction, as down half initiatives year marketing reduced down the the a the the as year year expenses gross waste we travel, percentile as benefiting in low primarily result the response million while began the sales full enacted pandemic. the And and million XXXX. included was of the selling reductions in temporary

terminated During primarily related expenses the one facilities. claims year, expenses million at workers our plan. closed improvement employees comp we related in restructuring our These incurred $X.X to from were of profit to

compared expenses income for of $XX.X of response with California. $X.X benefited Santa year facility Ana, a XXXX by XXXX. We incurred operating an $XX.X in COVID-XX and also income severance sale our We million an to ended The operating financing gain million on plan. the the loss to of in million, our $X.X related million and was operating

and the As income mentioned had the million we most of end We and That of of in year. X.X our XXXX. QX reduction changes respectively. were an current debt had end reduced million earlier, earlier, and operating million by quarter fourth total income during of positive from operating mentioned million Also, QX $XX.X earnings of in primarily the the from third X.X $XX.X capital year working decrease year and as to prior during significantly was reduction was by inventories the which the driven XXXX year.

result financings December for net the anticipate capital our long-term the and the funded of a approximately year. agreement acquisitions million year, to during as over those $XXX,XXX amortization higher over cash was million. Turning our XXXX, the increase be receivables by expenditures in period and comments. increased to further prior by and to Capital our sales at the credit end was December our XXXX. compared was end of XX.X quarter balance receivables including $XX.X the of for XX volume sheet XXXX availability At to in month depreciation XXXX We and million back was over it borrowing And of I'll this in Depreciation at in turn equipment the time, approximately million. $X.X million. $X year amortization Dan same

Daniel Frierson

associates payments and reduce to capital simultaneously placed and maintenance starting large We work, and Act We to continuity plan. to inventories our as order we've landlords large preserve the introductions and prior We payments XX or temperature prevent of on customer cleaning COVID-XX of the second new deferred lenders and and maintain our to implemented to would temporary million taken unable under job Allen. preserve distancing running Thank our sanitation cash, with of Not work We've safety knowing We implemented of where to reducing into our impact our year. for our reduced facilities of furlough. checks sample testing, salary to deep them lead, aimed exposure flow Also measures current to advantage product lower deferral our our sanitation. maintain instituting associates, in when limited associates align demand included, We our quarter, customers. defined of would requirements reductions you, demand as knowing travel and retirement our scale possible, customers, for social and These our the rotating the impact from related COVID-XX including expenses. in extend payroll approximately options COVID CARES maintain contact schedules deferring appropriate, wear our with not masks when contribution cash. reductions. associates, either below limited we at mandatory work physical while we and the expenditures, layoff to reduced and what spending minimize be. to taxes home with suppliers, the marketing cash of To where all the eliminations well COVID-XX plan in deferring implemented customers. safety a facilities, and select preserve taken health reductions and cases on pandemic percentage minimize

ago we're XXX people implement about Our which our plan, worked a with team in together management results. we were Today, has X%. operating than to improved continuity or year operating resulted fewer

and and and maintain customer year, able in many of in were cost. At decrease we service, costs to selling the this improvement quality, we're through reduction, the significant waste competitors lower experienced headcount spending. same outperformed our During and administrative we've reductions Operationally, able to superior area. time,

been In existing the of pleased were strong from But to recovery trends XX% the operational as in we we've new in sales. has was able shock abrupt certainly construction, covered. decline home with cost in sheet over system. The in our benefiting our residential market, and the improvements, strengthen to Allen addition home to April a sales balance

the business to segments residential year. conditions Our through our improve continue

in XX type Envision As brands. all the This We're our many emerged styles and durability of improvement program by across as of continuing consumers home price COVID-XX downturn offering significantly flooring with the expanding over our retailers fiber number and with points shipments improve Residential designs performance fourth increasing effectively and offers well at in nylon orders year projects. which from XX surfaces sales began become compete strategy Envision this new diversification XX entry an continued have growth planning beautiful to ended we our with and today's the another since platform significant in soft expansion for of primary and the strong very has product. XX market. and XX% quarter. quarter are second the of order

Our more XX% continues has represents we're products, share gain of And in it [ph]. residential investing again Since total business over market in market XXXX, residential has which and In share now since talent new volume was business been It year, as technology. the to new than profitable XXXX. it every doubled. has our then, XXXX. the

with TECHnique, showcase and six and surface precise in the to innovation On patterns needle. excited each our new delivers through technology beautiful nylon This qualities latest Masland control and placement yarn we're at Fabrica. tufting wool side

and surface well year the ahead the grew for TRUCOR hard hard programs pacing with Fabrica Our programs and surface wood market. of significantly

TRUCOR with widest visual We technology and into innovation the in grout the system. line continue the longest IGT to rigid in invest product and XXL, engineered plank grout core market our the TRUCOR locking in PRIME integrated XL tile

hard service adding We in also XXXX, our dedicated people we invested eight surface the be more in in country. key of we'll addition Also XXXX. talent in across the salespeople with dedicated And to new visuals. an expansion accommodate program XX price sizes a will system our to we've TRUCOR new with Fabrica wood PRIME board this display new program and expand colors, In our with of program points. developed markets

Fabrica wood market our We It XXXX. been double expect exceptionally well the in in has received. placements to

but more to COVID-XX. to down impacted the previous commercial Our that for and improvement, recovery year year. coming we a not market Sales longer the be adversely from We're were recovery. continues and be business the market by than believe XX% beginning as as dynamic see residential commercial will

XX% the modular with tile our is innovations is polyurethane is backing to product and Recently, content. cushion PVC other cost humidity we very to free able high installed pH. benefits underfoot Our sound absorption. relative materials the commercial the recycled standard Sustaina with in POU inputs. appearance relative retention offering. business provides high up to of cushion, modular our product now about and Sustaina in for and raw [ph] have backing breathable excited be backing cost The carpet pressure most environments comfort, a and and increasing experienced backing increased orders. a and system one is tile The unique very on

we the increased X% carpet for prices commercial So have residential in and range. both products

the XXXX. nine time are But are quarter orders weeks digits down digits. first mid low Our the single in same floor covering of versus sales single up for the

of the better double year. and quarters third are orders Our orders residential fourth sales than digits are a commercial the last and up on basis weekly second, and

presented experienced continued in the would looking residential to products regard years. pandemic has of emerge to As and service differential like Dixie to We the to in continued has operations to with year year XXX last difficulties for while move the an Donna, of challenges and continuing up as proud strength sequentially its the The floor and growing the second customers. opportunity we improve economy protect to this compared meeting past order from the financial to has company. employees, ways a our as has commercial at gained COVID-XX safety of both in questions. forward our a our and first and of We're open stronger of not company market We're entry time both of XXXX quarter to benefit XXXX last strong history momentum. the responded to products. covering over year expectations to the with as progressed residential

Operator

ahead. question gentlemen, is the for from Ladies now coming [Operator today Gartner [ph]. go Instructions] you. questions. first of and Improverb is Barry Thank open floor Our Please

Unidentified Analyst

- are morning. Hi, questions Two Good you? how

Daniel Frierson

morning. Good

Unidentified Analyst

first just just on in for seems ones were in and, other many And business, two this overall for sales Mohawk past Mohawk or X% times operating quarter, quick you, quarter-over-quarter. up on it some flooring eye the the comparables one questions Whereas an at like and general having kept here like the it you the feel felt - I you did on sort - a at disparity broader or there top for or line the think if you you was XX.X basis XX, versus there something to XX. that versus company of can was market quarter? how said Is speak the

Daniel Frierson

the take we me in that. were quarter at crack Commercially, Barry, let dramatically. a Residentially, we down XX%. up were about fourth

in Our backlog first entry third the slow entry improved fourth and significantly had very run That second, down order in and was the has quarters. quarter. order

Unidentified Analyst

whatnot. just understand No, box that. hole the I totally It black a essentially and the I that understood. was hospitality commercial black was and sense. was makes

Daniel Frierson

our Right I and and I were particularly retail all. think areas dramatically hospitality in. you excuse which segments were residential, me, and of commercial

Unidentified Analyst

and doing appreciate it. structure was guys. - you the for question Bank debt ability in excellent if an lenders. America Wells re Congrats And more Fargo of and there. I taking of terms I efficiency on it's the advantage it think in one I of it and think the Understood were prior and the refinancing

not under And that plants So does the in a for real estate collateral, or the as pledged company as now lenders that credit out not new facility. towards it I the down credit I real all it that view as had But if - the of have from paid to are the collateral broader the Encumbrance. see part. part the ability refinancing, had wondering Dixie pledged is estate, amendment, the interest the like offered did - the was I the buy think company XXth was

Daniel Frierson

are and a want Let Third. term with includes comment. million, comment Alan did But me is receivables. that. - the current $XX want make to I AmeriState estate Allen, inventories on? loans, of with And part It you million refinance address to our real XX the and which do we other Fifth term and revolver further only in equipment America Nevada the Credit on XX. one is -

Allen Danzey

the that said, falling of had are is in loan the under we Dan as loan did some agreement. we there around under place. exactly, put that not room agreements a on Yeah, still some And move assets assets different our

funds. However, that focus are did around the It decisions us. position forward go we're the But October. has continue We certainly become place mindset of that very end opportunities do accessing put the reducing opportunities transactions available. in need as we making happy as We'll our the of took with not a an be strong on decisions in with our best see our and availability. at those debt. been we us to And that best immediate front make from will

Unidentified Analyst

Thank you your Thank done. refinancing so much, Dan. again, And congrats getting on once Allen. you,

massively going of stay I safe. creative best it's going think to to business the be forward, so luck and

Daniel Frierson

Barry, Thank you, we and agree with.

Allen Danzey

Barry. Thanks

Operator

I'd to comments. back any Thank At Mr. you. or floor time, turn additional over to for Frierson this closing the like

Daniel Frierson

appreciate the Donna, unusual very year-end being But is it we made we thank was you conference news all of that forever. We through all much. have year XXXX will us remember most I a the good XXXX. think Obviously, you call. with on

after company, financially ever we've have XXXX in operationally been. stronger We Thank And see much particularly you you very the next before, much and business than ever a - is than much great been residential stronger businesses quarter. start. we've refinanced

Operator

you Dixie Group. gentlemen, participation Ladies and and the for in your thank interest

webcast a your at this You time off wonderful may the and lines disconnect have or log day.

The Dixie Group, Inc. (DXYN) 4 Mar 212020 Q4 Earnings call transcript