The Dixie Group has reported an ongoing loss for the fourth quarter and fiscal year ended Dec. 27, 2003.

The company declared a loss from continuing operations of $11.7 million, or 99 cents per diluted share, for the fourth quarter compared with income from continuing operations of $4.4 million, or 37 cents per diluted share, for the prior-year period. Net sales from continuing operations increased 19 percent to $64.6 million for the quarter vs. $54.1 million in the year-earlier period.

. For the year, the company reported a loss from continuing operations of $9 million, or 77 cents per diluted share, compared with income from continuing operations of $11.4 million, or 97 cents per diluted share, for 2002. Net sales from continuing operations increased 5 percent to $234.1 million in 2003 from $223.3 million in 2002.

The results reflect the previously announced sales of the company's North Georgia operations. As a result of these sales, The Dixie Group has changed significantly. It now manufactures higher-end residential and commercial carpet under the Fabrica, Masland and Dixie Home brands. The asset sales allowed the company to substantially reduce its long-term debt and reposition its product slate.

"In essence, we are entering 2004 as a new company - one that is focused on its core competencies, in a much stronger financial position, and well positioned to take advantage of the improving economy," said Daniel K. Frierson, chairman and CEO. Our business is now concentrated in the upper end of the carpet market, where innovative styling, design, color and product differentiation are demanded and rewarded."

Results from continuing operations were reduced by impairments and other charges of $21.1 million pre-tax ($13.4 million after-tax, or $1.14 per diluted share) in the fourth quarter. The impairments and other charges were principally costs related to the early extinguishment of debt and write-downs of assets impaired as a result of the sale of discontinued operations. Approximately $16.1 million of the charges were non-cash.

Excluding the impairments and other charges, earnings from continuing operations for the fourth quarter of 2003 were $1.7 million, or 15 cents per diluted share. For the full year 2003, earnings from continuing operations, excluding the impairments and other charges, were $4.4 million, or 37 cents per diluted share.

The sale of the North Georgia operations in the fourth quarter of 2003 resulted in a loss from disposal of discontinued operations of $2.8 million, or 23 cents per diluted share, compared with a loss from disposal of discontinued operations of $3.7 million, or 32 cents per diluted share in the fourth quarter of the prior year. In the first quarter of 2004, the Company completed the sale of its Ringgold, Ga., spun carpet yarn facility to Shaw Industries Group, Inc. The transaction is expected to result in a small gain in the first quarter of 2004. The assets sold are classified as assets held for sale on the company's balance sheets. Financial results for the operations sold have been classified as discontinued operations for all periods presented. Results of the discontinued operations reflected a loss of $2.1 million, or 18 cents per diluted share, in the fourth quarter of 2003 compared with a loss of $2.0 million, or 17 cents per diluted share, in the fourth quarter of 2002. For the year 2003, discontinued operations reflected a loss of $5.1 million, or 44 cents per diluted share, compared with a loss of $3.2 million, or 27 cents per diluted share, for 2002.

Including discontinued operations, The Dixie Group reported a net loss of $16.6 million, or $1.40 per diluted share, for the fourth quarter of 2003 compared with a net loss of $1.4 million, or 12 cents per diluted share, in the fourth quarter of 2002. For 2003, the net loss was $17.0 million, or $1.44 per diluted share, compared with net income of $4.6 million, or 39 cents per diluted share, for 2002.

All of the company's carpet brands reported strong sales gains in 2003, with carpet sales from continuing operations up over 10 percent for the year and over 21 percent in the fourth quarter, compared with the year-earlier periods. Those sales trends have continued in the first quarter of 2004. Fabrica and Masland accounted for more than half of the sales growth in the 2003 periods and continue to do so in the first quarter of 2004.