Masland’s Parent Company Reports Larger Than Expect Losses

October 28, 2009

The Dixie Group, parent company of Masland Carpets, reported that the company lost over $2 million in the third quarter and sales were down 31 percent over a year ago.

Masland employs about 325 people in Atmore and 340 people in Saraland.

Financial results released Tuesday show that for the third quarter of 2009, the Company reported a loss from continuing operations of $2,017,000, or $0.16 per diluted share, compared with a loss from continuing operations of $732,000, or $0.06 per diluted share, for the third quarter of 2008. Sales for the third quarter of 2009 were $50,487,000, down 31% from $72,917,000 in the year-earlier quarter.

For the nine months ended September 26, 2009, the loss from continuing operations was $38,442,000, or $3.13 per diluted share.

“The actions taken beginning in 2008 to reduce costs have resulted in 28 percent fewer associates and should produce cost reductions of approximately $23 million to $25 million by 2010. We continue to review our cost position to insure our return to profitability,” said Daniel K. Frierson, chairman and chief executive officer. “Our initial action under the cost reduction plan consisted primarily of consolidating our East Coast and West Coast tufting facilities along with other cost-cutting efforts. This program will be complete by year-end 2009.”

“The second phase of our cost reduction initiative, as described in our second quarter earnings release, realigned our three residential units into one business unit with three distinct brands. This action is progressing well, and we expect to begin seeing savings from this realignment in the fourth quarter – with the full effect to be felt early next year.”

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Written by William Reynolds · Filed Under News