CHATTANOOGA, Tenn. -- The Dixie Group, Inc. today reported net income of $2.4 million, or $0.20 per diluted share, for the third quarter ended September 28, 2002, compared with net income of $223,000, or $0.02 per diluted share, for the prior-year period.

Sales for the third quarter of 2002 were $125.7 million compared with $132.3 million in the year-earlier period.

For the first nine months of 2002, the Company reported net income of $5.9 million, or $0.50 per diluted share, compared with a net loss of $2.3 million, or $0.20 per diluted share, for the first nine months of 2001.

Year-to-date sales in 2002 were $389.0 million compared with $410.9 million in the first nine months of 2001. The net loss for the first nine months of 2001 included unusual charges of $1.5 million pre-tax ($900,000 after-tax), or $.08 per diluted share, for severance and asset write-offs.

The Dixie Group says it has reduced debt an additional $8.2 million during the third quarter, bringing total debt (including amounts advanced under a prior accounts receivable securitization program) down by $38.4 million for the first nine months of this year.