Dixie Group Reports Losses for Quarter, Year

Chattanooga, TN, Feb. 25, 2009--The Dixie Group reported a fourth quarter net loss of $31.8 million, or $2.60 per share, compared to net income of $1.4 million, or $0.11 per share in 2007.

For the fiscal year ended Dec. 27, Dixie reported a net loss of $31.4 million, or $2.52 per share, compared to net income of $6.3 million, or $0.48 per share, for the year-earlier period.

Sales for fiscal 2008 were $282,710,000, down 12% from sales of $320,795,000 in the prior year.

"We are disappointed that high-end residential and commercial carpet markets continued to deteriorate more rapidly than anticipated," said CEO Daniel Frierson.

"Lower net sales adversely affected our results, and we have taken additional actions to reduce costs and improve liquidity.

"We are assessing our alternatives for the Fabrica business and are considering the possible sale of the business or, more likely, consolidation into our East Coast facilities, beginning in the last half of this year. If implemented, a consolidation would further reduce costs and headcount and allow us to sell or lease our California real estate."

Frierson said the outlook for business remains unclear and that early sales this year are considerably below last year.

"We believe our position in the upper-end of the market will permit us to benefit from improved conditions and grow our sales at a rate that will exceed the carpet industry’s growth rate, as economic conditions improve,” Frierson said.