Intrinsic value of The Dixie Group, Inc. - DXYN

Previous Close

$0.63

  Intrinsic Value

$0.90

stock screener

  Rating & Target

buy

+43%

Previous close

$0.63

 
Intrinsic value

$0.90

 
Up/down potential

+43%

 
Rating

buy

We calculate the intrinsic value of DXYN stock by summing up the current values of future distributable cash flows generated by the company and dividing the sum by the number of outstanding shares. As such, the intrinsic value calculation depends entirely on projections. The more accurate your projections of the company's performance are - the more reliable is the intrinsic value calculation result. Please make sure to check the stock valuation input data below and adjust it if necessary. The quality of the output (intrinsic valuation result) is only as good as the quality of the input. See also DISCLAIMERS.

STOCK VALUATION INPUT DATA

Revenue (in 0001), $M
Initial revenue growth rate, %
Terminal revenue growth rate, %
Revenue decline factor
Initial discount rate, %
Discount rate multiplier
Variable cost ratio, %
Fixed operating expenses, $M
Interest rate on debt, %
Effective corporate tax rate, %
Production assets / Revenue, %
Life of production assets, yrs
Working capital / Revenue, %
Revenue / Adjusted assets
Adjusted equity ratio
Cash flow adjustment, % of Revenue
Book value of equity, $M
Shares outstanding, mln
Market capitalization, $bln 0.0

 

FINANCIAL STATEMENTS FORECAST and PRESENT VALUE CALCULATION

Fiscal year
   2
   3
   4
   5
   6
   7
   8
   9
   10
   11
   12
   13
   14
   15
   16
   17
   18
   19
   20
   21
   22
   23
   24
   25
   26
   27
   28
   29
   30
   31

INCOME STATEMENT

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Revenue growth rate, %
  2.00
  2.30
  2.57
  2.81
  3.03
  3.23
  3.41
  3.57
  3.71
  3.84
  3.95
  4.06
  4.15
  4.24
  4.31
  4.38
  4.44
  4.50
  4.55
  4.59
  4.64
  4.67
  4.70
  4.73
  4.76
  4.78
  4.81
  4.83
  4.84
  4.86
Revenue, $m
  413
  423
  433
  446
  459
  474
  490
  508
  526
  547
  568
  591
  616
  642
  670
  699
  730
  763
  798
  834
  873
  914
  957
  1,002
  1,050
  1,100
  1,153
  1,208
  1,267
  1,329
Variable operating expenses, $m
  409
  418
  429
  441
  455
  469
  485
  503
  521
  541
  563
  585
  610
  636
  663
  692
  723
  755
  790
  826
  864
  905
  947
  992
  1,039
  1,089
  1,141
  1,196
  1,254
  1,315
Fixed operating expenses, $m
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Total operating expenses, $m
  409
  418
  429
  441
  455
  469
  485
  503
  521
  541
  563
  585
  610
  636
  663
  692
  723
  755
  790
  826
  864
  905
  947
  992
  1,039
  1,089
  1,141
  1,196
  1,254
  1,315
Operating income, $m
  4
  4
  4
  4
  5
  5
  5
  5
  5
  5
  6
  6
  6
  6
  7
  7
  7
  8
  8
  8
  9
  9
  10
  10
  10
  11
  12
  12
  13
  13
EBITDA, $m
  17
  17
  18
  18
  19
  19
  20
  21
  21
  22
  23
  24
  25
  26
  27
  28
  30
  31
  32
  34
  35
  37
  39
  41
  43
  45
  47
  49
  51
  54
Interest expense (income), $m
  5
  7
  7
  7
  8
  8
  8
  9
  9
  10
  10
  11
  11
  12
  12
  13
  14
  15
  15
  16
  17
  18
  19
  20
  21
  22
  24
  25
  26
  28
  29
Earnings before tax, $m
  -3
  -3
  -3
  -3
  -3
  -4
  -4
  -4
  -4
  -5
  -5
  -5
  -6
  -6
  -6
  -7
  -7
  -8
  -8
  -9
  -9
  -10
  -11
  -11
  -12
  -13
  -13
  -14
  -15
  -16
Tax expense, $m
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Net income, $m
  -3
  -3
  -3
  -3
  -3
  -4
  -4
  -4
  -4
  -5
  -5
  -5
  -6
  -6
  -6
  -7
  -7
  -8
  -8
  -9
  -9
  -10
  -11
  -11
  -12
  -13
  -13
  -14
  -15
  -16

BALANCE SHEET

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and short-term investments, $m
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Total assets, $m
  258
  264
  271
  278
  287
  296
  306
  317
  329
  341
  355
  369
  384
  401
  418
  436
  456
  476
  498
  521
  545
  570
  597
  625
  655
  687
  720
  754
  791
  829
Adjusted assets (=assets-cash), $m
  258
  264
  271
  278
  287
  296
  306
  317
  329
  341
  355
  369
  384
  401
  418
  436
  456
  476
  498
  521
  545
  570
  597
  625
  655
  687
  720
  754
  791
  829
Revenue / Adjusted assets
  1.601
  1.602
  1.598
  1.604
  1.599
  1.601
  1.601
  1.603
  1.599
  1.604
  1.600
  1.602
  1.604
  1.601
  1.603
  1.603
  1.601
  1.603
  1.602
  1.601
  1.602
  1.604
  1.603
  1.603
  1.603
  1.601
  1.601
  1.602
  1.602
  1.603
Average production assets, $m
  92
  94
  97
  99
  102
  106
  109
  113
  117
  122
  127
  132
  137
  143
  149
  156
  163
  170
  178
  186
  195
  204
  213
  223
  234
  245
  257
  269
  283
  296
Working capital, $m
  107
  109
  112
  115
  118
  122
  126
  131
  136
  141
  147
  153
  159
  166
  173
  180
  188
  197
  206
  215
  225
  236
  247
  259
  271
  284
  297
  312
  327
  343
Total debt, $m
  132
  137
  142
  148
  154
  161
  169
  177
  186
  196
  206
  217
  229
  242
  255
  269
  284
  300
  316
  334
  352
  372
  392
  414
  437
  461
  486
  513
  541
  570
Total liabilities, $m
  198
  202
  208
  213
  220
  227
  235
  243
  252
  262
  272
  283
  295
  307
  321
  335
  350
  365
  382
  399
  418
  437
  458
  480
  503
  527
  552
  579
  607
  636
Total equity, $m
  60
  61
  63
  65
  67
  69
  71
  74
  77
  80
  83
  86
  90
  93
  97
  102
  106
  111
  116
  121
  127
  133
  139
  146
  153
  160
  168
  176
  184
  193
Total liabilities and equity, $m
  258
  263
  271
  278
  287
  296
  306
  317
  329
  342
  355
  369
  385
  400
  418
  437
  456
  476
  498
  520
  545
  570
  597
  626
  656
  687
  720
  755
  791
  829
Debt-to-equity ratio
  2.200
  2.220
  2.250
  2.280
  2.310
  2.340
  2.370
  2.400
  2.430
  2.460
  2.500
  2.530
  2.560
  2.590
  2.620
  2.650
  2.670
  2.700
  2.730
  2.750
  2.770
  2.800
  2.820
  2.840
  2.860
  2.880
  2.900
  2.920
  2.940
  2.950
Adjusted equity ratio
  0.233
  0.233
  0.233
  0.233
  0.233
  0.233
  0.233
  0.233
  0.233
  0.233
  0.233
  0.233
  0.233
  0.233
  0.233
  0.233
  0.233
  0.233
  0.233
  0.233
  0.233
  0.233
  0.233
  0.233
  0.233
  0.233
  0.233
  0.233
  0.233
  0.233

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  -3
  -3
  -3
  -3
  -3
  -4
  -4
  -4
  -4
  -5
  -5
  -5
  -6
  -6
  -6
  -7
  -7
  -8
  -8
  -9
  -9
  -10
  -11
  -11
  -12
  -13
  -13
  -14
  -15
  -16
Depreciation, amort., depletion, $m
  13
  13
  13
  14
  14
  14
  15
  16
  16
  17
  17
  18
  19
  20
  20
  21
  22
  23
  24
  25
  27
  28
  29
  31
  32
  34
  35
  37
  39
  41
Funds from operations, $m
  10
  10
  10
  10
  11
  11
  11
  11
  12
  12
  12
  13
  13
  14
  14
  15
  15
  16
  16
  17
  17
  18
  19
  19
  20
  21
  22
  23
  24
  25
Change in working capital, $m
  2
  2
  3
  3
  3
  4
  4
  5
  5
  5
  6
  6
  6
  7
  7
  8
  8
  8
  9
  9
  10
  11
  11
  12
  12
  13
  14
  14
  15
  16
Cash from operations, $m
  8
  8
  7
  7
  7
  7
  7
  7
  7
  7
  7
  7
  7
  7
  7
  7
  7
  7
  7
  7
  7
  8
  8
  8
  8
  8
  8
  8
  9
  9
Maintenance CAPEX, $m
  -12
  -13
  -13
  -13
  -14
  -14
  -14
  -15
  -16
  -16
  -17
  -17
  -18
  -19
  -20
  -20
  -21
  -22
  -23
  -24
  -25
  -27
  -28
  -29
  -31
  -32
  -34
  -35
  -37
  -39
New CAPEX, $m
  -2
  -2
  -2
  -3
  -3
  -3
  -4
  -4
  -4
  -5
  -5
  -5
  -5
  -6
  -6
  -7
  -7
  -7
  -8
  -8
  -9
  -9
  -10
  -10
  -11
  -11
  -12
  -12
  -13
  -14
Cash from investing activities, $m
  -14
  -15
  -15
  -16
  -17
  -17
  -18
  -19
  -20
  -21
  -22
  -22
  -23
  -25
  -26
  -27
  -28
  -29
  -31
  -32
  -34
  -36
  -38
  -39
  -42
  -43
  -46
  -47
  -50
  -53
Free cash flow, $m
  -6
  -7
  -8
  -9
  -9
  -10
  -11
  -12
  -13
  -14
  -15
  -16
  -17
  -18
  -19
  -20
  -21
  -22
  -24
  -25
  -27
  -28
  -30
  -32
  -33
  -35
  -37
  -39
  -41
  -44
Issuance/(repayment) of debt, $m
  4
  5
  5
  6
  6
  7
  8
  8
  9
  10
  10
  11
  12
  12
  13
  14
  15
  16
  17
  18
  19
  20
  21
  22
  23
  24
  25
  27
  28
  29
Issuance/(repurchase) of shares, $m
  4
  4
  5
  5
  5
  6
  6
  7
  7
  8
  8
  9
  9
  10
  10
  11
  12
  12
  13
  14
  15
  16
  17
  18
  19
  20
  21
  22
  24
  25
Cash from financing (excl. dividends), $m  
  8
  9
  10
  11
  11
  13
  14
  15
  16
  18
  18
  20
  21
  22
  23
  25
  27
  28
  30
  32
  34
  36
  38
  40
  42
  44
  46
  49
  52
  54
Total cash flow (excl. dividends), $m
  2
  2
  2
  2
  2
  3
  3
  3
  3
  4
  4
  4
  4
  5
  5
  5
  5
  6
  6
  6
  7
  7
  7
  8
  8
  9
  9
  10
  10
  11
Retained Cash Flow (-), $m
  -4
  -4
  -5
  -5
  -5
  -6
  -6
  -7
  -7
  -8
  -8
  -9
  -9
  -10
  -10
  -11
  -12
  -12
  -13
  -14
  -15
  -16
  -17
  -18
  -19
  -20
  -21
  -22
  -24
  -25
Prev. year cash balance distribution, $m
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash flow adjustment, $m
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash available for distribution, $m
  -2
  -3
  -3
  -3
  -3
  -3
  -3
  -4
  -4
  -4
  -4
  -5
  -5
  -5
  -6
  -6
  -6
  -7
  -7
  -8
  -8
  -9
  -9
  -10
  -11
  -11
  -12
  -13
  -13
  -14
Discount rate, %
  11.10
  11.66
  12.24
  12.85
  13.49
  14.17
  14.88
  15.62
  16.40
  17.22
  18.08
  18.98
  19.93
  20.93
  21.98
  23.08
  24.23
  25.44
  26.71
  28.05
  29.45
  30.92
  32.47
  34.09
  35.80
  37.59
  39.47
  41.44
  43.51
  45.69
PV of cash for distribution, $m
  -2
  -2
  -2
  -2
  -2
  -1
  -1
  -1
  -1
  -1
  -1
  -1
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Current shareholders' claim on cash, %
  91.4
  83.0
  74.9
  67.3
  60.2
  53.6
  47.6
  42.0
  37.0
  32.4
  28.3
  24.7
  21.4
  18.5
  16.0
  13.8
  11.8
  10.1
  8.6
  7.4
  6.3
  5.3
  4.5
  3.8
  3.2
  2.7
  2.3
  1.9
  1.6
  1.4

The Dixie Group, Inc. is engaged in marketing, manufacturing and selling of carpet and rugs. The Company offers its products to various residential and commercial customers through its various sales forces and brands. The Company operates through the carpet and rug manufacturing segment. The Company also provides carpet and yarn related services to other manufacturers. The Company's brands include Fabrica, Masland Residential, Dixie Home, Atlas Carpet Mills, Masland Contract and Masland Hospitality. Dixie International sells its brands outside of the North American market. Fabrica markets and manufactures various residential carpet and custom rugs. Masland Contract markets and manufactures broadloom and modular carpet tile for the specified commercial marketplace. Masland Residential markets and manufactures design-driven specialty carpets and rugs for the residential marketplace. Dixie Home markets a range of tufted broadloom residential and commercial carpets.

FINANCIAL RATIOS  of  The Dixie Group, Inc. (DXYN)

Valuation Ratios
P/E Ratio -2
Price to Sales 0
Price to Book 0.1
Price to Tangible Book
Price to Cash Flow 0.4
Price to Free Cash Flow 0.5
Growth Rates
Sales Growth Rate -5.9%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate -28.6%
Cap. Spend. - 3 Yr. Gr. Rate -14.6%
Financial Strength
Quick Ratio 0
Current Ratio 0
LT Debt to Equity 112.6%
Total Debt to Equity 126.4%
Interest Coverage -1
Management Effectiveness
Return On Assets -0.8%
Ret/ On Assets - 3 Yr. Avg. -0.1%
Return On Total Capital -2.4%
Ret/ On T. Cap. - 3 Yr. Avg. -1.3%
Return On Equity -5.6%
Return On Equity - 3 Yr. Avg. -3%
Asset Turnover 1.4
Profitability Ratios
Gross Margin 23.9%
Gross Margin - 3 Yr. Avg. 24.2%
EBITDA Margin 2.5%
EBITDA Margin - 3 Yr. Avg. 3.6%
Operating Margin -1%
Oper. Margin - 3 Yr. Avg. 0.3%
Pre-Tax Margin -2.3%
Pre-Tax Margin - 3 Yr. Avg. -0.8%
Net Profit Margin -1.3%
Net Profit Margin - 3 Yr. Avg. -0.7%
Effective Tax Rate 44.4%
Eff/ Tax Rate - 3 Yr. Avg. 42.6%
Payout Ratio 0%

DXYN stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the DXYN stock intrinsic value calculation we used $405 million for the last fiscal year's total revenue generated by The Dixie Group, Inc.. The default revenue input number comes from 0001 income statement of The Dixie Group, Inc.. You may change it if you feel that it should be adjusted for some unusual circumstances that are not expected to be repeated in the future or if you already know (from interim financial statements, for example) that this year's revenue is going to be quite different.

Revenue growth rate. Forecasted future revenue growth rate is the most important input parameter for the intrinsic value calculation. Unlike other input parameters that are reasonably expected to be in line with their historic averages or their historic trends, the revenue growth rate by and large is a wild card: nobody really knows what the company's revenue will be in the future. Of course, the level of unpredictability is different for different industries (utility companies being the most predictable and, thus, less risky).
    We use three input parameters to forecast the revenue growth rate in our DXYN stock valuation model: a) initial revenue growth rate of 2% whose default value is the revenue growth rate in the most recent quarter compared to the quarterly revenue a year ago; b) terminal revenue growth rate of 5% whose default value is chosen to be close to the average nominal (i.e. not adjusted for inflation) GDP growth rate; and c) revenue decline factor of 0.9, which stipulates that revenue growth rate in each forecasted year will be equal to the difference of the revenue growth rate in the preceding year and the terminal revenue growth rate multiplied by this revenue decline factor (with the passage of time the revenue growth rate will be approaching the terminal revenue growth rate, but not quite reaching it - though the difference could be infinitesimally small).
    At the revenue decline factor of 1, the future revenue growth rate is forecasted to be constant and equal to the initial revenue growth rate. The smaller the revenue decline factor, the faster the revenue growth rate will approach the terminal revenue growth.

Discount rate. The discount rate is used for determining the present value of future cash flows: future cash flows are "discounted" as at normal conditions (that translate into positive expected return on investment) one dollar today is worth more than the same dollar in the future. Unlike all other valuation models, we use variable discount rate, i.e. it increases for each consecutive year. This is done to account for higher risk of cash flows coming in further in the future.
    The initial discount rate of 11.1%, whose default value for DXYN is calculated based on our internal credit rating of The Dixie Group, Inc., is applied to the cash flow expected to be received a year from now (well, actually, to be precise, in the financial year following the base year - the last year for which we have financial statements). For each consecutive year the discount rate is multiplied by the discount rate multiplier of 1.05, e.i. each year it increases by 5%. Feel free to change this number to correspond to your level of risk assessment of The Dixie Group, Inc..
    By the way, it is easy to set the discount rate to be constant (this would make comparison with other valuation models easier): just set the discount rate multiplier equal to 1 and chose the magnitude of the initial discount rate to your liking.

Variable cost ratio is the ratio of variable costs (i.e. costs that fluctuate with fluctuation of the volume of production) to the revenue expressed as a percentage. In the calculation of intrinsic value of DXYN stock the variable cost ratio is equal to 99%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $0 million in the base year in the intrinsic value calculation for DXYN stock. These expenses increase with the level of inflation in subsequent years.

Interest rate on debt is the average all-in rate of interest paid by the company on its debt. It is set at 5.4% for The Dixie Group, Inc..

Corporate tax rate of 27% is the nominal tax rate for The Dixie Group, Inc.. In reality, companies find ways to pay much less taxes than that or not to pay them at all.

Cash flow adjustment could be used for any adjustment the investor deems necessary. Most commonly we use this field to account for stock options-related effects in excess of what is reported on the company's income statement. The cash flow adjustment is expressed as a percentage of the revenue, and in the current valuation of the DXYN stock is equal to 0%.

Production assets are the company's assets used for manufacturing products or provision of services. In the valuation model input table they are expressed as a percentage of revenue and for DXYN are equal to 22.3%.

Life of production assets of 7.3 years is the average useful life of capital assets used in The Dixie Group, Inc. operations. It is used to calculate yearly capital expenditures needed to keep these assets in good order - we call it the maintenance CAPEX.

Working capital is the difference between the company's current assets and liabilities. In the model we use the ratio of working capital to revenue, which for DXYN is equal to 25.8%. A negative number means that the company is apt at using financial resources of its suppliers and customers; a large positive number, on the other hand, means that it either provides in-kind financing to others or is not good at managing its inventories.

Book value of equity - $58.984 million for The Dixie Group, Inc. - is used in calculation of the "floor" for intrinsic valuation based on the discounted cash flow (DCF) method. Even if the prospects are very bad for a company, its assets could always be sold now for their current fair market value.

Shares outstanding of 16.359 million for The Dixie Group, Inc. is needed to calculate the intrinsic value of one share.

Market capitalization is used here only for reference purposes and as a quick check that the share price and the number of shares outstanding numbers are correct - something especially to be cognizant about at stock splits. So, the market capitalization of The Dixie Group, Inc. at the current share price and the inputted number of shares is $0.0 billion.

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