The Dixie Group Inc. today reported a second-quarter net loss of $1.8 million, or 12 cents per share, after reporting a profit of $1.1 million, or 8 cents per share, in the same period a year earlier.
The Dalton, Georgia-based carpet maker has reported net losses in each of the past four fiscal quarters as carpet sales have been relatively flat. Dixie blamed the losses in the spring quarter of this year on one-time items, including a $1.51 million charge related to settlement of a class action litigation as well as a $450,000 charge from an accident at one of the company's yarn facilities.
Earnings, adjusted for one-time gains and costs, came to $182,00, or 1 cent per share, which was 1 cent per share below what analysts had forecast for the period.
The floor covering company posted revenue of $106.4 million in the period, down 0.7 percent from the prior year and $2.56 million less than industry forecasts.
Dixie said its residential sales were up 4 percent in the quarter while commercial carpet sales were down 10.1 percent.
Dixie is the nation's fifth biggest floorcovering maker with a 1.6 percent share of the market last year, according to to Floor Focus magazine
"Our gross margin was impacted by higher than normal waste, purchase price variances and distribution expenses," Dixie CEO Dan Frierson said in a statement today. "We have made changes in our manufacturing operations to lower costs by better aligning staffing to demand, implemented several waste reduction initiatives, and are streamlining our distribution operations."
With unemployment near its lowest level in two decades, Dixie said it is raising worker pay and carpet prices.
"To maintain our workforce, we have increased wages and improved benefits," Frierson said. "This has helped us reduce turnover as we deal with a continued tight labor market. We announced a residential price increase for this August primarily to offset higher labor, material and other operational costs."
The company's shares closed Thursday ahead of today's earnings announcement at $2.10, up 10 cents. But shares of Dixie are still less than half of what they were trading at a year ago.