Dixie Reports Much Narrower First Quarter Loss

Chattanooga, TN, April 29, 2010--The Dixie Group reported a first quarter net loss of $2,529,000, or $0.20 per share, compared with a net loss of $35,557,000, or $2.91 per share, for the year-earlier period.

Dixie reported net sales of $50,454,000 versus $47,639,000 in the same quarter of 2009.

"The first quarter, which is usually our lowest from a seasonal standpoint, was an improvement over the same quarter of last year and our first favorable year-over-year comparison since the downturn began,"said CEO Dan Frierson.

"We have seen a gradual recovery in the residential markets with emphasis being on value products. In the fourth quarter, we introduced more aggressively priced, well-designed value products in both our Durasilk polyester and branded nylon product lines. These and other sales initiatives have resulted in carpet sales growth that exceeded the general market by 10% in dollars and over 20% in units for the quarter. The increase in units was due to mix changes in both our commercial and residential product markets."

Frierson said that margins continue to be under pressure due to raw material increases, growth in lower margin product lines and unfavorable volume early in the quarter.

He said Dixie had solid growth in its wool collections at the upper end and strong growth from our new polyester products in the Dixie Home line.

"We see the residential business recovering faster than the commercial business," Frierson said.