Tandus Ends Joint Venture With Dixie

Chattanooga, TN, August 11-- Dixie Group Inc., in a Securities and Exchange Commission filing, said it received notice that the company’s joint venture partner, the Monterey Carpets unit of Tandus, will pull out of a joint venture, giving Dixie Group the option to assume full control of the venture. Dixie said it has received notice that its joint venture partner Monterey will end its supply arrangement with Chroma Systems Partners, which operates a carpet dyeing and finishing plant in Santa Ana, Calif. The arrangement is slated to end in August 2005. According to the filing, Dixie and Monterey Carpets each have a 50% interest in Chroma Systems. The filing stated that Dixie will have the option to acquire Monterey's interest in the venture for a "nominal value" and assume full control of Chroma Systems' operations when the supply agreement terminates. Dixie Group said Chroma Systems dyes and finishes most carpets produced by Monterey and by Dixie Group's Fabrica division. Chroma Systems also dyes and finishes for other carpet mills. Earlier this week Tandus Group said will close its broadloom carpet manufacturing plant in Santa Ana and transfer most of those assets to its facility in Truro, Nova Scotia. The company said the action was taken to remain competitive in the demanding commercial marketplace.