The Dixie Group Inc.
09/16/2021 | Press release | Distributed by Public on 09/16/2021 15:30
Pro Forma Consolidated Condensed Balance Sheets (amounts in thousands, except share data) Unaudited (Form 8-K)
Pro Forma Consolidated Condensed Balance Sheets
(amounts in thousands, except share data)
Unaudited
| As Reported June 26, 2021 | Adjustments Netting to Loss on Disposal | Adjustments to Remove Amounts for Discontinued Operations | As Adjusted | ||||||
| ASSETS | (Unaudited) | (Unaudited) | (Note 1) | ||||||
| Current Assets | |||||||||
| Cash and cash equivalents | $ | 2,398 | $ | 2,134 | (A) | $ | - | $ | 4,532 |
| Receivables, net | 51,470 | - | (6,050) | (I) | 45,420 | ||||
| Inventories, net | 91,384 | (18,167) | (B) | (2,000) | (J) | 71,217 | |||
| Prepaids and other current assets | 5,562 | 1,025 | (C) | (152) | (K) | 6,435 | |||
| Total Current Assets | 150,814 | (15,008) | (8,202) | 127,604 | |||||
| Property, Plant and Equipment, Net | 55,039 | (4,957) | (D) | - | 50,082 | ||||
| Operating Lease Right-Of-Use Assets | 20,330 | - | - | 20,330 | |||||
| Other Assets | 19,819 | 1,025 | (E) | (1,716) | (L) | 19,128 | |||
| TOTAL ASSETS | $ | 246,002 | $ | (18,940) | $ | (9,918) | $ | 217,144 | |
| LIABILITIES AND STOCKHOLDERS' EQUITY | |||||||||
| Current Liabilities | |||||||||
| Accounts payable | $ | 27,733 | $ | - | $ | (1,763) | (M) | $ | 25,970 |
| Accrued expenses | 31,669 | (627) | (F) | (3,115) | (N) | 27,927 | |||
| Current portion of long-term debt | 4,502 | - | (360) | (O) | 4,142 | ||||
| Current portion of operating lease liabilities | 3,271 | - | - | 3,271 | |||||
| Total Current Liabilities | 67,175 | (627) | (5,238) | 61,310 | |||||
| Long-Term Debt, Net | 73,431 | (16,316) | (G) | (50) | (P) | 57,065 | |||
| Operating Lease Liabilities | 17,775 | - | - | 17,775 | |||||
| Other Long-Term Liabilities | 22,019 | - | (1,631) | (Q) | 20,388 | ||||
| TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $ | 180,400 | $ | (16,943) | $ | (6,919) | $ | 156,537 | |
| STOCKHOLDERS' EQUITY | |||||||||
| Common Stock ($3 par value per share): Authorized 80,000,000 shares, issued and outstanding - 14,795,617 shared for 2021 and 14,557,435 shares for 2020 | 44,387 | - | - | 44,387 | |||||
| Class B Common Stock ($3 par value per share): Authorized 16,000,000 shares, issued and outstanding - 1,004,975 shares for 2021 and 880,313 shares for 2020 | 3,015 | - | - | 3,015 | |||||
| Additional paid-in capital | 157,384 | - | - | 157,384 | |||||
| Accumulated deficit | (139,000) | (1,997) | (H) | (2,999) | (R) | (143,996) | |||
| Accumulated other comprehensive loss | (184) | - | - | (184) | |||||
| TOTAL STOCKHOLDERS' EQUITY | 65,602 | (1,997) | (2,999) | 60,606 | |||||
| TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $ | 246,002 | $ | (18,940) | $ | (9,918) | $ | 217,144 |
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THE DIXIE GROUP, INC.
Consolidated Condensed Statements of Operations
(unaudited; in thousands, except per share data)
| Six Months Ended June 26, 2021 | Twelve Months Ended December 26, 2020 | Twelve Months Ended December 28, 2019 | ||||||||||||||||
| Pro Forma | Pro Forma | Pro Forma | ||||||||||||||||
| As Reported | Adjustments (S) | Pro Forma | As Reported | Adjustments (S) | Pro Forma | As Reported | Adjustments (S) | Pro Forma | ||||||||||
| NET SALES | $ | 191,134 | $ | (28,405) | $ | 162,729 | $ | 315,939 | $ | (65,070) | $ | 250,869 | $ | 374,582 | $ | (99,281) | $ | 275,301 |
| Cost of sales | 145,885 | (22,544) | 123,341 | 239,483 | (46,446) | 193,037 | 288,377 | (67,900) | 220,477 | |||||||||
| GROSS PROFIT | 45,249 | (5,861) | 39,388 | 76,456 | (18,624) | 57,832 | 86,205 | (31,381) | 54,824 | |||||||||
| Selling and administrative expenses | 41,157 | (8,460) | 32,697 | 75,731 | (17,556) | 58,175 | 83,825 | (23,455) | 60,370 | |||||||||
| Other operating (income) expense, net | 35 | - | 35 | (108) | - | (108) | (23,988) | - | (23,988) | |||||||||
| Facility consolidation and severance expenses, net | 96 | - | 96 | 3,752 | (1,281) | 2,471 | 5,019 | (4,435) | 584 | |||||||||
| OPERATING INCOME (LOSS) | 3,961 | 2,599 | 6,560 | (2,919) | 213 | (2,706) | 21,349 | (3,491) | 17,858 | |||||||||
| Interest expense | 2,571 | - | 2,571 | 5,803 | - | 5,803 | 6,444 | - | 6,444 | |||||||||
| Other expense (income), net | (1) | - | (1) | 678 | - | 678 | (57) | - | (57) | |||||||||
| Income (loss) from continuing operations before taxes | 1,391 | 2,599 | 3,990 | (9,400) | 213 | (9,187) | 14,962 | (3,491) | 11,471 | |||||||||
| Income tax provision (benefit) | (51) | 341 | (T) | 290 | (312) | (9) | (T) | (321) | (657) | (50) | (T) | (707) | ||||||
| Income (loss) from continuing operations | 1,442 | 2,258 | 3,700 | (9,088) | 222 | (8,866) | 15,619 | (3,441) | 12,178 | |||||||||
| Income (loss) from discontinued operations, net of tax | (121) | - | (121) | (120) | - | (120) | (348) | - | (348) | |||||||||
| NET INCOME (LOSS) | $ | 1,321 | $ | 2,258 | $ | 3,579 | $ | (9,208) | $ | 222 | $ | (8,986) | $ | 15,271 | $ | (3,441) | $ | 11,830 |
| BASIC EARNINGS (LOSS) PER SHARE: | ||||||||||||||||||
| Continuing operations | $ | 0.09 | $ | 0.17 | $ | 0.26 | $ | (0.59) | $ | (0.07) | $ | (0.66) | $ | 0.96 | $ | (0.49) | $ | 0.47 |
| BASIC SHARES OUTSTANDING | 15,102 | 15,102 | 15,102 | 15,316 | 15,316 | 15,316 | 15,822 | 15,822 | 15,822 | |||||||||
| DILUTED EARNINGS (LOSS) PER SHARE: | ||||||||||||||||||
| Continuing operations | 0.09 | 0.16 | 0.25 | (0.59) | (0.07) | (0.66) | 0.95 | (0.48) | 0.47 | |||||||||
| DILUTED SHARES OUTSTANDING | 15,232 | 15,232 | 15,232 | 15,316 | 15,316 | 15,316 | 15,926 | 15,926 | 15,926 | |||||||||
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THE DIXIE GROUP, INC.
UNAUDITED PRO FORMA FINANCIAL INFORMATION
1.Basis of Presentation
On September 13, 2021, The Dixie Group, Inc. ('the Company') consummated an asset purchase agreement concerning the machinery and inventory related to its commercial products. The following unaudited pro forma financial statements give effect to the sale of the Company's commercial related business. The unaudited pro forma balance sheet as of June 26, 2021, the date of the Company's most recently filed balance sheet, has been prepared assuming the sale of the commercial business was consummated as of that date. The unaudited pro forma statements of operations for six months ended June 26, 2021, the twelve months ended December 26, 2020 and the twelve months ended December 28, 2019 have been prepared in accordance with the SEC's pro forma rules under S-X Article 11 assuming that the sale of the commercial business occurred as of December 30, 2018, the first day of the first year presented. All material adjustments required to reflect the consummation of the sale of the commercial business are set forth in the columns under the label 'Pro Forma Adjustments'. The data presented in the columns labeled 'As Reported' is derived from the Company's historical unaudited consolidated balance sheet as of June 26, 2021 and the consolidated statements of operations for the six months ended June 26, 2021, the twelve months ended December 26, 2020 and the twelve months ended December 28, 2019. The unaudited pro forma financial data is presented for informational purposes only and is not necessarily indicative of the results of future operations or future financial position of the Company or the actual results of operations or financial position that would have occurred had the sale of the commercial business been consummated as of the dates indicated above.
The unaudited pro forma condensed consolidated financial information is presented based on currently available information and assumptions, as described in the accompanying notes, that our management believes are reasonable under the circumstances. The parties have entered into a Transition Services Agreement with activity to be billed at internal cost. The pro forma adjustments do not include any estimate of activity under the Transition Services Agreement.
The unaudited pro forma financial statements and accompanying notes should be read in conjunction with our historical financial statements and accompanying notes thereto, and our Quarterly report on Form 10-Q for the six months ended June 26, 2021 and Annual Reports on Form 10-K for the years ended December 26, 2020 and December 28, 2019.
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2. Notes to the Balance Sheet
| A - Addition of cash deposited as collateral in place of fixed assets sold which were under financing agreement |
| B - Removal of net book value for commercial inventories. Includes write down of discontinued inventories retained by the Company post transaction |
| C - Current portion of escrow deposit |
| D - Removal of net book value for fixed assets related to the commercial business sold, idled and/or to be disposed |
| E - Long term portion of escrow deposit |
| F - Removal of liability for customer deposits. Addition of accrued expenses for transaction related costs such as severance agreements, legal fees and expenses for operational alignment |
| G - Reduction of debt by proceeds from sale of assets |
| H - Loss expected to be recorded for the sale of commercial business |
| I - Removal of net trade receivables generated by the commercial business |
| J - Removal of estimated recovery value of commercial inventory retained by the Company |
| K - Removal of deposits related to the commercial business |
| L - Removal of other long term assets related to the commercial business |
| M - Removal of trade accounts payable directly related to the commercial business |
| N - Removal of accrued expenses primarily, but not exclusively, related to payroll and estimated future claims of the commercial business |
| O - Removal of current portion of debt for payment on financing agreements tied to fixed assets removed in item D above |
| P - Removal of long term portion of debt for payment on financing agreements tied to fixed assets removed in item D above |
| Q - Removal of long term liabilities tied to the commercial business |
| R - Net amount of assets and liabilites held for discontinued operations |
3. Notes to the Income Statement
| S - Column shows adjustment amounts for revenues and expenses directly related to the commercial business |
| T - Represents the estimated tax effect of the pro forma adjustments |
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