Donna Shook removes used spools of thread from the creeling area at the Dixie Group carpet plant in Eton, Ga., in this file photo.The Dixie Group fought through an expensive first quarter marred by severe weather and a complicated acquisition to beat Wall Street earnings estimates by 12 cents per share, the company reported.
But concerns over the cost of the company’s operations pushed the stock down Wednesday afternoon, as Dixie closed at $15.07 per share, down 54 cents, or nearly 3.5 percent.
Though the Chattanooga-based carpet maker’s grew revenue to $85 million following the acquisition of Atlas Carpet Mills from $75 million in the first quarter of 2013, expenses piled up as Dixie attempted to merge the companies’ dyeing operations in California.
Dixie acquired Atlas in March 2014 for $17.5 million, and plans to finish consolidating the companies’ operations by 2015. Atlas had sales of about $53 million in 2013, much of that in the broadloom and modular carpet tile markets. While Dixie has long planned to combine dyeing facilities on the West Coast, Dixie’s chief operating officer, Kennedy Frierson, has said that the manufacturing, distribution and administrative operations of Atlas will stay as-is for now.
Shutting down Atlas’ California dyeing operation in order to expand capacity by 75 percent cost about $445,000, while multiple shutdowns of Dixie’s East Coast operations during winter storms added another $1.1 million in costs during the quarter, Frierson said.