Dixie sees third-quarter earnings hurt by lower sales
CHATTANOOGA, Tenn. -- Carpet and rug manufacturer The Dixie Group (Nasdaq:DXYN) said it won't meet analyst third quarter expectations as it anticipates earning 2-cents a share due to weakening sales and despite a $7 million debt reduction during the quarter.
"The uncertain and lagging economy has lowered sales across most product categories, delaying our ability to take full advantage of cost improvements from consolidating operations," said Chairman and CEO Daniel Frierson.
The company also said its senior lenders have extended its credit agreement waiver until Nov. 30. Its discussions with its lenders were delayed as a result of the Sept. 11 terrorist attacks of the World Trade Center and Pentagon, it said.
Analysts were forecasting earnings between 5 cents and 12 cents a share, with a mean estimate of 7 cents, according to research firm Thomson Financial/First Call. The company posted a loss of 32 cents a share in the year-earlier period.
The Dixie Group said its sales in the third quarter will be down about 11 percent from a year ago, due primarily to weaker demand its markets.
The Dixie Group (www.thedixiegroup.com) is a leading carpet and rug manufacturer and supplier to higher-end residential and commercial customers serviced by Masland Carpets and Fabrica International, to consumers through major retailers under the Bretlin, Globaltex and Alliance Mills brands and to the factory-built housing and recreational vehicle markets through Carriage Carpets. Dixie's Candlewick Yarns serves specialty carpet yarn customers.