The Dixie Group, Inc. (NASDAQ:DXYN) Q2 2020 Earnings Conference Call - Final Transcript

Aug 06, 2020 • 11:30 am ET

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The Dixie Group, Inc. (NASDAQ:DXYN) Q2 2020 Earnings Conference Call - Final Transcript

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Presentation
Operator
Operator

Good day, and welcome to The Dixie Group, Inc. 2020 Second Quarter Earnings Conference Call. Today's call is being recorded.

At this time, for opening remarks and introductions, I would like to turn the call over to the Chairman and Chief Executive Officer, Dan Frierson. Please go ahead.

Executive
Daniel K. Frierson

Thank you, Daryl, and welcome, everyone, to our second quarter conference call. With me is Allen Danzey, our Chief Financial Officer.

Our Safe Harbor statement is included by reference to both our website and press release. Due to the COVID-19 pandemic, the second quarter was most unusual. Our first objective was to maintain the health and safety of our associates. At the same time, we wanted to continue servicing the existing business by running our plants at reduced rates, but also decrease inventories.

In order to ensure our survival, we had to reduce, defer and eliminate as much cost as possible and manage our cash prudently. We actually had half of our associates not working for some period of time. Due to these actions and our bank -- due to these actions, our bank availability increased during the quarter from a low of around $8 million to the $20 million range currently. With sales down nearly 40% for the quarter, it required everyone to be part of the solution, and our associates rose to the challenge.

For the second quarter, the Company had net sales of $60,824,000 as compared to over $100 million in 2019. For the second quarter of 2020, net sales were down 39% as compared to the same quarter in '19. In April, sales were down 54% from the same month in the prior year as a result of the COVID-19 pandemic and related government orders that negatively impacted ours and our customers' ability to transact business. Sales recovered gradually over the quarter, with May sales volume down 40%, and June net sales down 21% from their respective months in the prior year. For the second quarter of 2020, the Company had a loss from continuing operations of $6,979,000 or $0.46 per diluted share as compared to a loss of $1,181,000 or $0.07 per diluted share in the second quarter of '19.

As with most companies, the COVID-19 pandemic had a significant impact on our sales in the quarter. Once the extent of the COVID-19 pandemic became apparent, we implemented our continuity plan to maintain the health and safety of our associates, preserve cash and minimize the impact on our customers. To minimize and prevent cases of COVID exposure in our facilities, we have taken measures aimed at sanitation and safety, including large-scale COVID testing, mandatory temperature checks prior to starting work, requirements to wear masks when unable to maintain social distancing and deep cleaning and sanitation.

We limited travel for our associates, implemented work-from-home options where appropriate and limited physical contact with our customers. We reduced our running schedules in our facilities to below demand to maintain order flow to our customers while simultaneously reducing inventories to align them