ICS Magazine

The Dixie Group reports third quarter loss

October 30, 2001
The Dixie Group posts quarter loss, but debt coming under control.

CHATTANOOGA, Tenn. -- The Dixie Group, Inc. (Nasdaq/NM:DXYN) reported a loss of $2.3 million on net income of $223,000 for the third quarter ended Sept. 29. For the same period in 2000, Dixie (www.thedixiegroup.com) reported a net loss of $3.7 million. Net sales for the quarter of 2001 were $132.3 million, down from $148.7 for the same period last year.

For the first nine months of 2001, Dixie reported a net loss of $2.3 million. This compares with a net loss of $3.6 million for the first nine months of 2000. Year-to-date sales also were down to $410.9 million in 2001, compared with sales of $431.2 million for the first nine months of 2000.

"We are encouraged with the progress we are making in strengthening our balance sheet and with the cost reductions achieved consolidating our North Georgia operations," said company chairman and CEO Daniel K. Frierson. "Our debt, including amounts advanced under the company's accounts receivables securitization program, was reduced another $12 million during the third quarter, bringing our total debt reduction to over $49.0 million since its high point in August 2000."

According to Frierson, while third quarter sales were down due to weak market demand, "our high-end business continues to be least affected by the slowdown in the economy. We are optimistic that sales will improve in 2002," he said.

Dixie previously announced that its senior lenders have extended until Nov. 30 the waiver of compliance with certain financial covenants of Dixie's senior credit agreement. It expects to amend the credit agreement on a longer-term basis prior to the expiration of the current waiver extension.

The Dixie Group 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.