The Dixie Group Inc reported financial results for the second quarter and six months ended June 30, 2007. For the second quarter of 2007, income from continuing operations was $2,556,000, or $0.20 per diluted share, compared with income from continuing operations of $1,028,000, or $0.08 per diluted share, for the second quarter of 2006. Sales for the second quarter of 2007 were $84,403,000, down 4% from sales of $88,046,000 in the year-earlier quarter.
For the first six months of fiscal 2007, income from continuing operations was $2,793,000, or $0.21 per diluted share, compared with income from continuing operations of $1,953,000, or $0.15 per diluted share, for the first half of 2006. Sales for the first six months of 2007 were $158,893,000, down 5% from sales of $167,219,000 in the prior-year period.
During the second quarter of 2006, the Company terminated a legacy defined benefit pension plan. Expenses related to the pension plan termination reduced income from continuing operations by $2,057,000 after-tax, or $0.16 per diluted share, for the second quarter and first six months of fiscal 2006.
Commenting on the results, Daniel K. Frierson, chairman and chief executive officer, said, "Our second quarter results reflected a 5% decline in sales of carpet products, compared with the year earlier period; however, our sales continued to outperform the carpet industry, where sales were off almost 8%.
"Despite lower revenue and higher raw material costs, our gross margins as a percentage of net sales were 31.1%, the highest we have achieved since the second quarter of 2005. We attribute the gross margin improvement to a better product mix, improved production quality and manufacturing efficiencies."
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