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The Dixie Group extends its Credit Agreement Waiver

November 30, 2001
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The Dixie Group wants to refinance its senior credit agreement and defer its plans to sell and leaseback its North Georgia distribution center.

CHATTANOOGA, Tenn. -- Carpet and rug manufacturer The Dixie Group, Inc. (Nasdaq/NM:DXYN) plans to refinance its senior credit agreement and defer its plans to sell and leaseback its North Georgia distribution center.

"Cash flow from operations has exceeded our projections throughout 2001, and for each reporting period in 2001, we have significantly reduced our debt and improved our cost structure," said company chairman and CEO Daniel K. Frierson. "We expect to reduce debt an additional $16 million in the fourth quarter, bringing the total reduction this year to approximately $42 million."

Holders of Dixie's senior debt have granted a waiver of compliance with certain financial covenants until June 30, 2002, to provide adequate time for the refinancing.

According to Frierson, "Cash flow from operations and $4 million from the sale of real estate will generate the funds for the fourth quarter debt reduction. We believe we can improve our financial flexibility and better control our cost of financing by deferring the sale and leaseback and acting now to refinance our 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. Dixie's Candlewick Yarns serves specialty carpet yarn customers.

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