Dixie Group gets back in the black, sells extrusion facility
The company also announced that it executed a definitive agreement to sell its Calhoun, Ga. extrusion manufacturing facility to CAF Extrusion Inc., a subsidiary of Collins & Aikman Floorcoverings Inc., for $30.8 million. The transaction will include a three-year supply agreement with the purchaser. The sale of the facility, which is scheduled to close in May 2002, is subject to certain customary conditions and is expected to result in an after-tax gain exceeding $3.0 million.
In addition, the Dixie Group announced that it has accepted a commitment from a new lender to refinance its senior credit facility. The new, $150 million credit agreement is expected to be finalized in May 2002.
"The improved operating results reflect the changes we have made in our cost structure over the past year and a half, particularly in our North Georgia operations,¿ said Daniel K. Frierson, chairman and CEO. ¿Our carpet business started out very soft in January, began to pick up during the last eight weeks of the quarter, and is now running well ahead of prior-year levels.
"The sale of our extrusion facility is part of our strategy to reduce debt and improve our balance sheet,¿ he added. ¿By year-end 2002, we expect our debt to be reduced by over $100 million from its high point in August 2000.¿