The Dixie Group, Inc. reported solid increases in sales and revenue in both its residential and commercial product lines. Income from continuing operations was $1,872,000, or $0.15 per diluted share, for the quarter ending March 26, 2005, compared with income from continuing operations of $1,976,000, or $0.16 per diluted share, for the same period a year ago. Sales for the quarter were $72 million, up 12 percent from $64.4 million last year.

Commenting on the results, Daniel K. Frierson, chairman and chief executive officer, said, "The first quarter results reflected an 18 percent gain in our total carpet sales, including a 19 percent increase in revenue from residential carpet products and a 16 percent increase in revenue from commercial carpet products. Over half of our carpet revenue growth was from our Dixie Home brand, which continues to meet or exceed our expectations.

"We are pleased with our profit performance; however, comparisons with the year-earlier period were affected by certain items that occurred in the first quarter last year that were not repeated in the first quarter of 2005. These items included the effect of a $1 million LIFO inventory liquidation and $700,000 of other income items that together increased first quarter 2004 income from continuing operations by approximately $1 million, or $0.08 per diluted share. Excluding these items, results for the first quarter of 2005 reflect significant improvement.

"Our order entry and sales have been very strong during the first four weeks of the second quarter of 2005, with carpet sales improving to reflect year-over-year revenue gains of 19 percent for the year to date through April 23, 2005. We are optimistic that our revenue growth will continue well above that of the carpet industry as a whole this year and we continue to expect total sales in 2005 to increase about 15% over last year," Frierson concluded.

Results related to discontinued operations reflected income of $422,000, or $0.03 per diluted share, in the first quarter of 2005 compared with a loss $259,000, or $0.02 per diluted share, in the first quarter of 2004. Including discontinued operations, the Company reported net income of $2,294,000, or $0.18 per diluted share, in the first quarter of 2005 compared with net income of $1,717,000, or $0.14 per diluted share, in the first quarter of 2004.