The Dixie Group (DXYN) AI Stock Analysis

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The Dixie Group

(OTC:DXYN)

51Neutral

The Dixie Group's stock is rated at 51 due to significant financial challenges, including high leverage and negative cash flows. While there are positive short-term technical indicators, the overall financial health and valuation are concerning. The earnings call provided mixed signals with some operational improvements but overshadowed by declining sales and profitability.

The Dixie Group (DXYN) vs. S&P 500 (SPY)

Market Cap

$6.72M

Dividend YieldN/A

Average Volume (3M)17.91K

Price to Earnings (P/E)―

Beta (1Y)1.48

Revenue Growth-4.60%

EPS Growth88.53%

CountryUS

Employees970

SectorConsumer Cyclical

Sector Strength60

IndustryApparel - Manufacturers

Share Statistics

EPS (TTM)-0.19

Shares Outstanding14,012,784

10 Day Avg. Volume20,909

30 Day Avg. Volume17,913

Financial Highlights & Ratios

PEG RatioN/A

Price to Book (P/B)N/A

Price to Sales (P/S)0.03

Price to Cash Flow (P/CF)1.10

P/FCF Ratio1.50

Enterprise Value/Market CapN/A

Enterprise Value/RevenueN/A

Enterprise Value/Gross ProfitN/A

Enterprise Value/EbitdaN/A

Forecast

1Y Price TargetN/A

Price Target UpsideN/A

Rating ConsensusN/A

Number of Analyst Covering0

The Dixie Group Business Overview & Revenue Model

Company DescriptionThe Dixie Group, Inc. (DXYN), headquartered in Dalton, Georgia, operates within the floor covering industry. The company is primarily engaged in the manufacturing, marketing, and sale of carpets and rugs for residential and commercial applications. The Dixie Group targets the premium and upper-end segments of the soft floor covering market, offering a broad range of high-quality carpet products under brands such as Masland Carpets, Fabrica International, and Dixie Home.

How the Company Makes MoneyThe Dixie Group makes money through the sale of its diverse range of carpet products to residential and commercial markets. Revenue is generated from the manufacture and distribution of premium carpet products sold through a network of independent retailers, commercial contractors, and distributors across the United States. The company's key revenue streams include sales to residential customers, which form the bulk of their revenue, as well as commercial sales to sectors such as hospitality and corporate offices. The Dixie Group's earnings are influenced by its ability to innovate in design, maintain quality, and leverage its brand reputation in the premium flooring market. Additionally, strategic partnerships with retailers and distributors, as well as effective supply chain management, play a significant role in its financial performance.

The Dixie Group Financial Statement Overview

Summary

The Dixie Group is facing financial challenges with declining revenues and margins, high leverage, and negative cash flows. While the company has potential for recovery through operational adjustments, current financial health remains weak.

Income Statement

Neutral

The Dixie Group's TTM (Trailing-Twelve-Months) income statement reveals a challenging financial performance. The gross profit margin is approximately 26.0%, which is decent, but the company faces significant profitability issues with a negative EBIT margin of -0.85% and a net profit margin of -0.99%. Revenue has decreased by approximately 3.27% from the previous annual report, reflecting a declining trend that could impact future profitability.

Balance Sheet

Negative

The balance sheet shows concerning leverage with a high debt-to-equity ratio of 4.88, indicating significant reliance on debt. Stockholders' equity has decreased, resulting in an equity ratio of just 11.95%. The return on equity is negative due to the net loss, highlighting profitability challenges. This high leverage poses a risk to financial stability.

Cash Flow

Neutral

The cash flow statement highlights challenges in generating positive cash flows. The operating cash flow is negative, and free cash flow has worsened from the previous period by approximately -356.29%. The operating cash flow to net income ratio is 0.79, indicating cash flow issues relative to net income. However, the company has managed to improve its cash position slightly, suggesting some capacity for operational adjustments.

TTM	Dec 2023	Dec 2022	Dec 2021	Dec 2020	Dec 2019
Breakdown
Income Statement		Total Revenue
267.31M	276.34M	303.57M	341.25M	315.94M	374.58M
	Gross Profit
69.58M	73.88M	53.62M	77.25M	76.46M	86.20M
	EBIT
-2.27M	5.05M	-23.57M	10.00M	-10.59M	14.98M
	EBITDA
11.87M	12.81M	-20.54M	18.47M	4.38M	26.43M
	Net Income Common Stockholders
-2.64M	-2.72M	-33.41M	5.15M	-9.09M	15.27M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
1.52M	79.00K	363.00K	1.47M	1.92M	769.00K
	Total Assets
234.75M	191.17M	202.95M	235.50M	232.87M	247.66M
	Total Debt
97.90M	112.08M	120.87M	100.28M	100.88M	113.65M
	Net Debt
96.38M	112.00M	120.51M	98.81M	98.96M	112.88M
	Total Liabilities
172.78M	161.88M	171.43M	169.12M	169.08M	174.45M
	Stockholders Equity
61.97M	29.29M	31.51M	66.38M	63.79M	73.21M
Cash Flow		Free Cash Flow
-4.21M	1.64M	-22.92M	-19.79M	11.79M	7.45M
	Operating Cash Flow
-2.09M	2.62M	-18.34M	-15.41M	13.55M	11.69M
	Investing Cash Flow
13.98M	15.08M	-4.30M	15.24M	-1.72M	32.97M
	Financing Cash Flow
-11.02M	-17.99M	19.87M	-280.00K	-10.68M	-43.91M

The Dixie Group Technical Analysis

Technical Analysis Sentiment

Negative

Last Price0.45

Price Trends

50DMA

0.55

Negative

100DMA

0.61

Negative

200DMA

0.67

Negative

Market Momentum

MACD

-0.02

Negative

RSI

37.54

Neutral

STOCH

10.26

Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For DXYN, the sentiment is Negative. The current price of 0.45 is below the 20-day moving average (MA) of 0.49, below the 50-day MA of 0.55, and below the 200-day MA of 0.67, indicating a bearish trend. The MACD of -0.02 indicates Negative momentum. The RSI at 37.54 is Neutral, neither overbought nor oversold. The STOCH value of 10.26 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for DXYN.

The Dixie Group Risk Analysis

The Dixie Group disclosed 17 risk factors in its most recent earnings report. The Dixie Group reported the most risks in the “Finance & Corporate” category.

Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy

Latest Risks Added 0 New Risks

The Dixie Group Peers Comparison

Overall Rating

UnderperformOutperform

Sector (59)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
TOL	69 Neutral	$10.03B	6.94	20.38%	0.91%	5.86%	12.20%
HD	68 Neutral	$351.79B	23.74	385.37%	2.56%	4.48%	-1.27%
TILE	66 Neutral	$1.08B	12.51	18.90%	0.22%	4.29%	95.04%
MHK	66 Neutral	$6.61B	12.99	6.82%	―	-2.68%	―
FND	61 Neutral	$7.69B	38.38	10.04%	―	0.95%	-16.97%
Sector *	59 Neutral	$11.18B	10.04	-1.58%	3.96%	1.31%	-16.97%
DXYN	51 Neutral	$6.72M	―	-8.46%	―	-4.60%	88.53%

* Consumer Cyclical Sector Average

Performance Comparison

DXYN

The Dixie Group

0.45

-0.08

-15.09%

Home Depot

341.51

-11.75

-3.33%

TILE

Interface

18.13

1.56

9.41%

MHK

Mohawk

102.16

-21.13

-17.14%

TOL

Toll Brothers

94.52

-29.30

-23.66%

FND

Floor & Decor Holdings

72.96

-48.65

-40.00%

The Dixie Group Earnings Call Summary

Earnings Call Date: Mar 6, 2025 | % Change Since: -15.09% | Next Earnings Date: May 1, 2025

Earnings Call Sentiment Negative

The earnings call highlighted some positive aspects such as the successful operation of extrusion equipment and successful cost reductions, but these were overshadowed by declining sales, increased net losses, and challenges such as high interest rates and hurricanes, painting a challenging outlook.

Highlights

Successful Operation of Extrusion Equipment

The company successfully operated its extrusion equipment, providing a lower cost supply of raw materials. This internal supply became critical as an external supplier announced a shutdown.

Cost Reductions and Facility Consolidation

Positive results from cost reductions and consolidation of East Coast facilities are expected to restore higher margins.

Decrease in Interest Expense

Interest expenses decreased to $1.6 million from $1.8 million in Q3 2023, and $4.8 million year-to-date compared to $5.5 million in 2023.

Retail Store Program Success

The Premier Flooring Center program resulted in strong growth, increased business, and greater market share.

Lowlights

Decline in Net Sales

Net sales for Q3 2024 were $64.9 million, down from $68.6 million in Q3 2023, a decrease of 5.4%.

Increased Net Loss

Net loss from continuing operations in Q3 2024 was $3.9 million, up from $2.4 million in Q3 2023.

Lower Gross Profit Margins

Gross profit margin dropped to 24.6% from 26.6% in the same quarter last year.

Impact of High Interest Rates

High interest rates and low consumer confidence delayed consumer spending, impacting sales volume.

Hurricane and Ocean Freight Challenges

Hurricane season and high ocean freight rates negatively impacted business and increased inventory costs.

Company Guidance

During the third quarter 2024 earnings call for The Dixie Group Inc., key financial metrics and operational insights were discussed. The company reported net sales of $64.9 million, a decrease from $68.6 million in the same quarter of 2023. The operating loss widened to $2.1 million from $913,000, and the net loss from continuing operations increased to $3.7 million or $0.26 per diluted share, compared to $2.2 million or $0.15 per share the previous year. Gross profit margins fell to 24.6% from 26.6% in the prior year. Additionally, interest expenses dropped to $1.6 million from $1.8 million in 2023, reflecting lower average debt. Despite these challenges, the company highlighted successful cost reduction initiatives and positive impacts from their extrusion operations, which are expected to improve future margins. The balance sheet showed an increase in receivables by $2.9 million and a decrease in net inventory by 4% compared to the previous year. Management also discussed strategic marketing efforts and anticipated improved demand in 2025 due to potential decreases in interest rates and an upswing in home sales.

The Dixie Group Corporate Events

Product-Related AnnouncementsBusiness Operations and Strategy

The Dixie Group Focuses on Growth Amid Challenges

Neutral

Nov 1, 2024

The Dixie Group, a major player in the high-end floorcovering market, is navigating a challenging landscape influenced by fluctuating raw material costs and economic conditions. Despite these hurdles, the company is focusing on growth initiatives such as expanding its DuraSilk SD and EnVision product lines. Sales in their residential segment, particularly through designer-driven efforts, indicate potential for recovery, although the group faces significant setbacks following the sale of its commercial division and changes in its supplier relationships.

Glossary

OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.

NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.

UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.