Dalton-based Dixie Group consolidates plants, cuts staff after quarterly loss

Staff file photo / Dan Frierson of the Dixie Group talks about the state of the carpet industry.

The Dixie Group announced Thursday it is consolidating its East Coast tufting operations to its existing plant in Dalton, Georgia, and cutting its staff by 20% this year in response to the weakening floorcovering market.

The Dalton-based carpet manufacturer announced the $25 million cost-cutting program after reporting a net loss of $8.8 million, or 58 cents per share, on sales of $71.7 million in the third quarter. A year ago in the same period, Dixie reported net income of $6.4 million, or 40 cents per share, on sales of nearly $89.3 million.

"Our third quarter results were the culmination of the impact of several factors, beginning in the fourth quarter of 2021, that have had an unfavorable impact on our company as well as a general industry downturn which began in mid-second quarter and extended through the third quarter," Dixie Group CEO Dan Frierson said in an earnings release Thursday.

Frierson said in the third quarter to reduce costs, the company consolidated all of its East Coast tufting operations into a single plant in North Georgia. Dixie also began relocating distribution of luxury vinyl flooring from its plant in Saraland, Alabama, to its plant in Atmore, Alabama, Frierson said.

"We are implementing our plan to lower both our fixed and variable costs by shutting higher cost assets, reducing staffing and aligning production with demand," he said. "As a result of these and other actions our headcount is down by 20% for the year."

In response to the earnings announcement, shares of Dixie Group fell 2.5% in trading on the Nasdaq exchange on Thursday.

— Compiled by Dave Flessner