DXYN - Earnings call 3 2023 | The Dixie Group, Inc.

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Operator

Good day, and welcome to the Dixie Group Inc. 2023 Third Quarter Earnings Conference Call. Today's call is being recorded.

At this time, for opening remarks, I'll turn the floor over to Chairman and Chief Executive Officer, Dan Frierson. Please go ahead.

Daniel Frierson

welcome, our and call. quarter Rob, you, everyone, third to conference Thank have Danzey, Allen me CFO. I today, our with

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

quarter were net For $X quarter, last of $XXX,XXX year. was the sales compared down income of approximately third operating XX.X% margin year loss sales the of in third by same the volume, quarter X% our for over quarter $XX.X gross year, a our ago third Despite percentage lower Net million X of the to this to compared a loss million the points this of a improved over XX.X% XXXX. from year. to

in of First for million. loss income $X.X ago. $XXX,XXX, to the The 'XX $XXX,XXX a loss expenses period operating same was million amount operating $XX.X X loss of compared of which months year of a an the consolidation included facility

market inflation projects. of interest resales to remains a result deferred limited lower The the due remains as high market improvement home Consequently, flooring pressure. and supply, constrained weak housing continued home and rates residential

Our the sales significantly was quarter, for were more. industry down but we I down indicated, X%, the believe as

gained market believe our we this in quarter. So we again markets share

point, grow. is rebound a will. determine a industry some It's too improve, And downturn when will experience had like early the will and the we've it times flooring The experiencing at but to over cyclical industry many the years. economic situation

After discuss future. Allen? the Allen we're the reviews for financials, preparing downturn our we will and through how working

Allen Danzey

Dan. you, Thank

due in point at million, the $XXX net period million September to to prior of net the X% $XXX channel period months X Dan see the versus volume mass a decline partially the sales over in X-month the XX% To on attributable $XX.X million third merchant XX, down $XX.X was year. strategy said quarter customer the reinforce largest by below quarter, the the A offerings. loss in price our the in of ourselves from in lower year million sales merchant decrease was same mass did sales a what in of about ended shipment to prior sales to we

Net sales impacted consumer home rates reflected impacting in confidence remodeling as inflationary interest also and concerns unfavorably activity. lower high by were

As into the of Dan efforts margins mentioned, are gross result our 'XX XXXX X restructuring improved through XXXX. and months as the over that 'XX in first that we of continued consolidation and facility began significantly a

Low Our the imported more the business. multiple lower suppliers ocean of rates changed freight we year By sales primary year and former third prior of in gross the in and the pricing high to Prior levels. raw first results have XX.X% our half 'XX normal of ocean impacted very were the below quarter 'XX, margin exit containers. year-to-date XX%. rates at by the provider tied our cost margins high to the their to that from was from on fibers in margins freight also return net compared material extraordinarily of material end raw over were to points

our We in in reductions results also operating favorable XXXX. of and cost from manufacturing saw the materials raw facilities

expenses year, sales selling in slightly percent and and by were compared period The samples the 'XX are new dollars marketing months to administrative in a driven in the the in the lower X The investment of primarily and first initiatives. lower of prior same higher growth expenses XXXX. but selling as

was to maintenance of $XXX,XXX in during primarily We This third the and expense closure consolidation 'XX. costs. incurred facility facility related for expenses quarter

quarter loss 'XX. Our $X.X of in the operating facility expenses, inclusive a loss compared of $XXX,XXX consolidation operating to third was million

loss of an of to million a included year-to-date, the compared loss in of same $X.X months first 'XX, period operating million the consolidation we in expenses. loss $XX.X With $XXX,XXX X operating had For of facility 'XX XXXX.

Interest the in current senior increased in expense $X.X September expense rates expense was months and the million borrowings driven quarter same This year. XX, million line on ended to by 'XX. the on the higher in prior interest Interest to quarter million of interest on X million compared increased was compared 'XX, $X.X $X.X period. credit was $X.X our the

Our net same the net to was the loss in quarter million. compared year in $X.X the $X.X loss prior of a at million period

$XX.X net million we loss compared prior year-to-date, year. loss a the of have $X.X a in On million to the of

balance our at sheet. Looking

by Our now. of volume and the The months receivables sales the the increase comparative driven last respective from periods. year $X prior increased during higher the was million by

quarter. and inventory result reduction and million. anticipated year a prior prior from payable $X.X early over due million, up $X.X primarily the and stronger fourth higher Accounts to by sales costs balance volume accrued of end was planned timing increased expenses As to our seasonally decreasing in year-end the in spending were down into by related volume, going

Total for year-to-date estimated million. expenditures are around $XXX,XXX. the the is $X.X expenditures for depreciation totaled capital million and $XXX,XXX bring be year quarter to Capital $X to planned

our $X.X new cost or of decreased related facility driven For million and the high to and timing expense inventory debt the consolidations. payments product end by operations, increase me, debt samples by cost lower and excuse by activity decreased offset XXXX from purchases for -- of of

at was availability $XX.X end quarter Our million. borrowing

website available at investor www.dixiegroup.com. is on our Our presentation

Dan At I'll time, to it back hand over Frierson. this

Daniel Frierson

you, Allen. Thank

and of and We optimize capital our our and working business lowers debt. are assets manage by appropriate our flow, productivity restructuring continuing the cash where to expenses, head improvements, which all count, to improves managing costs implementing results reducing decreases controllable of our our aspects

taken third last positive the of margin results have impact the over improved year we actions the Our so. showed or quarter gross and

have demand with lower capacity. consolidations aligned better facility cost Our

our reductions count in lowered improvements have experienced facilities. operational manufacturing Our and we head costs, have our

year on $XX still costs to are We by million. track this reduce

gain improving In to the invest us operations share. initiatives, and enabled we year, continued market to growth addition in last over has have costs lowering our which to

WPC, on this category, for to include our surface The hard continued laminate product with have in initiative with SPC, invest innovative and particular our In to and broadened gain and retail continued have engineered share. market each merchandising wood products. have products appropriate category. we floor space We emphasis today offering

which decorative category by This us, by continued initiative, Masland continued this not XXXX has Fabrica Our to has and grow for grow. the industry category to products while encompasses for Décor us grown. has

customers. other We offering now and most have products, broad imported offer to allows products their of customers domestic of a a to wool decorate assortment discerning our wide which and

We continue to new hit samples floor. our product as the momentum gain

emphasize are affordable seeking initiative to third which innovative The polyester to has fashion. certain to important customers price points, been fill products

Elements quickly experienced traction year, this Our and the in DuraSilk gained solution have Collection dyed we program merchandise market growth. the significant has as

exposure. return With investment our these market heavily to to has the and samples would next sales us outperform costs in place, had which helped in initiatives X expect selling we year us more our but a We level. invested reasonable retail enabled to expand in have cost. a This displays

debt $X end prior in the the at Despite many compared of third investment the the to to end quarter new by products, year. able over the were million reduce we of

people to decrease inflation significantly demand early has have inflation, offset experienced. and costs Raw which decreased material rapid the as declined peaked in increased year, increase and due raw helped costs, have in material we in The the the moderate. prices have all which costs

quarter we in begin the order our will extrusion next of In of to nylon company our first strategically, better year. position

any impact and moderate raw of this to We costs. have to taken the lower disruptions action of future materials

end seems continues the trends, items. in difficult market these as industry focused things spending Despite period rather of a The purchasing on upper the experience to discretionary outperforming to experiencing market is the be than general.

a ago. to continues the be are for focus than first the upper our fourth a better Our and the orders quarter, plus. weeks end of X on And sales slightly year

we'll the questions. meeting At for open this time,

Operator

first Barry is Darbie. Blank Our question Instructions] from [Operator J.H. with

Barry Blank

a have I question.

lag what Assuming second of anticipate down decrease rates time an interest you start for to rate homeowners? interest that in come to increase to the is starting of year, half do next sales current the the

Daniel Frierson

Barry, too I resales. lower question. obviously I a exactly think there ball But excellent tell -- that. wish Certainly, me long be would a first that home remodeling could more interest know comes interest costs, lower crystal then lag. I don't when. not that's and significantly an had I

will it slow obviously is longer. think much a very I decline, it if take

Barry Blank

The one there. the that product our no volume make up to selling I some or Have lost different in distributors additional fact is longer you companies Lowe's for selling the the business is of increased question. have are Lowe's? that

Daniel Frierson

boxes. Well, is we on do of sell the and country. retailers as on share market. residential feel their declined, this the you think we and our the market time, piece throughout We is retailer know, share are in the the focus focus market big not, country, like our gaining across however, all that at We has

Operator

Improverb. with of The is from line next the Barry Gertner question

Barry Gertner

for X had just I quick questions you.

conjunction first kind around able with on like, with on we're activity being you an into been partners. seeing forward how we consolidation and your in-house idea the kind the of gain footprint progress think supply of give facility this one rely should of Could sort to and of going in to like consolidating facilities you've which new announcing manufacturing of about that kind of us in-house? production then The chain costs specifically materials not of

Daniel Frierson

ask Let well. as that a comment me take Allen and to then stab at it on

of yarn not costs a producing The operation, the In plant, yarn producer in terms our Roanoke, to lower of advantages only all consolidated consolidated cost as true Roanoke, which we enabled lower facility. and consolidation they or were the thing that and cost but Alabama. plant, Eton its lower X were that our We was manufacturing. that into our therefore, we had of Alabama facilities into We into -- our manufacturing same us testing, into of do were carpet Atmore was was overall. one, in consolidation, which lower a cost

you Allen, comments have there? do

Allen Danzey

racks in which mainly facility equipment the this vacated facilities continue we The that to down process, that down consolidation have we incur $XXX,XXX South on taking left year, in that focused Yes. estimated expenses in Alabama the and existing about area. we is

and to those we going have forward We space available out distribution some facilities be to looking able that and well. administrative to utilize continue lease LVF we of as for are

Barry Gertner

then one That's just quick extremely helpful. follow-up. And

On or considering guys back, wanted there's that you the there? and to of a know I progress looking kind had Adairsville if through. still while sale like deal a a leaseback are facility, fallen then any little mentioned -- you if at been had announced the complete

Allen Danzey

Yes.

As we continue ] be opportunity end year. to did leaseback sale to for [ close [ for when would we opportunity of that ] a announced, the situation pursue the the working we we'd we are hope by or we announce able

Operator

any I'll remarks. closing no further for With in turn questions to back the the Dan call or additional queue. Frierson

Daniel Frierson

lower going in to continued us costs have you slow our plan with initiatives, have Thank on this -- our Obviously, improves, Rob, cost. the our we'll which growth a been Despite impact we has invested for you, market but We very today. and year continue all -- being business that, year. thank of lowering market and into sales. significant have once next think we

for you us. being Thank with

Operator

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

The Dixie Group, Inc. (DXYN) 13 Nov 232023 Q3 Earnings call transcript