ICS Magazine

The Dixie Group Reports Second Quarter Profit

August 13, 2001
The Dixie Group, Inc. reports net income of $188,000

CHATTANOOGA, Tenn. -- The Dixie Group, Inc. (Nasdaq/NM:DXYN) reported net income of $188,000, or 2-cents per diluted share, for the second quarter ended June 30, 2001. That compares to a net income of $1.3 million, or 11-cents per diluted share during the same period last year.

Sales for the second quarter of 2001 were $145.5 million compared with $146.1 million in the year-earlier period. For the first six months of 2001, The Dixie Group reported a net loss of $2.5 million, or 22-cents per diluted share, compared with net income of $70,000, or 1-cent per diluted share for the first half of 2000.

Year-to-date sales were $278.6 million compared with $282.4 million in the first six months of 2000. "Although we are not satisfied with our results, we returned to profitability in the second quarter of 2001 and have made tremendous progress in improving our operations and balance sheet," said Daniel K. Frierson, chairman and CEO.

The company, he pointed out, has reduced its debt by around $31 million, a debt reduction of $16 million. Also, Frierson said the company has reduced its inventory over the last 12 months by $25 million.

"Although we expect sales to remain sluggish for the remainder of 2001, we are well positioned to take advantage of improvements in our markets," he said. "We continue to focus on simplifying operations, improving profitability and reducing debt."

Late last month, The Dixie Group announced that its senior lenders have extended until Oct. 15, 2001, the waiver of compliance with certain financial covenants of the company's senior credit agreement.

The Dixie Group (www.thedixiegroup.com) is a leading carpet and rug manufacturer and supplier to higher-end residential and commercial customers serviced by Masland Carpets and Fabrica International, to consumers through major retailers under the Bretlin, Globaltex and Alliance Mills brands and to the factory-built housing and recreational vehicle markets through Carriage Carpets. Dixie's Candlewick Yarns serves specialty carpet yarn customers.