Financial Performance - Net sales for the first quarter of 2024 were $65.3 million, a decrease of 2.7% compared to $67.1 million in the same period of 2023[3] - The operating loss for the first quarter of 2024 was $857,000, compared to an operating income of $306,000 in the first quarter of 2023[3] - The net loss from continuing operations in the first quarter of 2024 was $2.41 million, or $0.16 per diluted share, compared to a net loss of $1.55 million, or $0.11 per diluted share, in the same quarter of 2023[3] - The gross profit margin for the first quarter of 2024 was 24.2% of net sales, down from 26.6% in the first quarter of 2023[7] Product Development - The company launched 14 new carpet styles in the first quarter, including 11 high-end EnVision Nylon styles[6] Cost Management - The company plans to reduce year-over-year costs by $10 million in 2024 through cost savings related to extrusion operations[7] Capital Expenditures - Capital expenditures for the full fiscal year 2024 are planned at $9.4 million, with $2.9 million funded by cash investment within the year[10] Shareholder Actions - The company's Board of Directors approved a stock repurchase plan of up to $2.8 million[11] Sales Trends - In the first four weeks of the second quarter of 2024, net sales were approximately 4% above the comparable period in the prior year[12] Receivables - The company experienced an increase in receivables by $4.5 million due to higher sales in the last month of the first quarter 2024[10]

Financial Performance - Net sales for the fiscal year ended December 30, 2023, were $276.3 million, a decrease of 9.0% compared to $303.6 million in 2022[92]. - Gross profit increased by 37.8% to $73.9 million, with gross profit margin rising to 26.7% from 17.7% in the previous year[92][93]. - Selling and administrative expenses decreased to $74.1 million in 2023 from $76.9 million in 2022, representing 26.8% of net sales[96]. - Operating income improved to $5.0 million in 2023 from an operating loss of $28.2 million in 2022, marking a significant turnaround[99]. - Net loss narrowed to $2.7 million, or $0.18 per diluted share, compared to a net loss of $35.1 million, or $2.32 per diluted share, in 2022[104]. Cash Flow and Investments - Cash provided by continuing operations was $4.2 million, driven by a reduction in receivables and a decrease in inventories[105]. - Net cash provided by investing activities was $15.1 million, primarily from the sale of the Adairsville distribution center[106]. - On December 14, 2023, the company sold its distribution center in Adairsville, Georgia for $11.0 million and completed a sale and leaseback, paying off an existing note of $10.4 million[114]. Debt and Interest - Interest expense increased to $7.2 million in 2023 from $5.3 million in 2022 due to higher interest rates[100]. - The company has $14.1 million of unused borrowing availability under its revolving credit facility as of December 30, 2023[111]. - Approximately 85% of the company's total debt, amounting to $71,494 thousand, is subject to floating interest rates, with a potential annual pre-tax impact of $715 thousand from a 100 basis point fluctuation[131]. - The company has other financing notes with interest rates ranging from 6.34% to 7.84%, due in monthly installments[116]. Tax and Liabilities - The effective income tax rate was a provision of 12.3% in 2023, compared to a benefit of 0.26% in 2022[102][103]. - The company anticipates cash outlays for income taxes during 2024 and 2025 will not exceed $200 thousand due to tax loss carryforwards[120]. - As of December 30, 2023, the company had a net deferred tax liability position of $91 thousand, with valuation allowances of $21.0 million[120]. - The company has a reserve of $2.2 million for environmental liabilities associated with discontinued textile businesses as of December 30, 2023[121]. Compensation and Stock - The total unrecognized compensation expense related to unvested restricted stock awards was $1.1 million as of December 30, 2023, with a weighted-average vesting period of 6.9 years[117]. - The company recorded total purchases from Engineered Floors of approximately $64 thousand in 2023, representing about 0.03% of its cost of sales[123]. Off-Balance Sheet Arrangements - The company has no off-balance sheet arrangements as of December 30, 2023[118]. Lease Agreements - The company entered into a 10-year operating lease for the Adairsville property with an initial annual rent of $1.5 million, increasing to $1.6 million in the second five years[114].

Financial Data and Key Metrics Changes - The gross margin improved by 13 percentage points to 27% of net sales in Q4 2023 compared to 14% in Q4 2022 [3] - Net income for Q4 2023 was $3.2 million, a significant improvement from a loss of $18.5 million in Q4 2022 [9] - For the fiscal year 2023, net sales were $236.3 million, down from $303.6 million in the prior year, reflecting a decrease of 9% [30] - The operating income for 2023 was $5 million compared to an operating loss of $28.2 million in 2022 [12] - The net loss for the year was $2.7 million, an improvement from a net loss of $35.1 million in the previous year [12] Business Line Data and Key Metrics Changes - The company experienced a 7.2% decline in adjusted average weekly sales in 2023 compared to the prior year, primarily due to high interest rates and inflation affecting consumer confidence [10] - Hard surface products now represent about 20% of total sales, indicating growth in this segment [17] - The company invested heavily in displays and samples for its DuraSilk collection, which has seen strong acceptance [18] Market Data and Key Metrics Changes - The flooring industry faced a significant reduction in year-over-year sales volume, with the company gaining market share in its core markets despite a slowdown in the overall industry [8] - The actual square yards of carpets sold by the industry in 2023 were about 20% lower than in 2021, indicating a challenging market environment [36] Company Strategy and Development Direction - The company is focused on minimizing expenses and reducing overhead, with a plan to cut costs by an additional $10 million in 2024 after reducing costs by over $35 million in 2023 [16] - A major initiative includes starting up extrusion capabilities to produce its own nylon yarn, which will provide a more cost-effective source of raw materials [39] - The company aims to leverage its growth initiatives to gain market share, particularly in the hard surface and polyester product offerings [17][18] Management's Comments on Operating Environment and Future Outlook - Management noted that the industry is at a cyclical low point, but they are positioned to take advantage of a future upturn when interest rates recede and housing rebounds [20] - Current business conditions for the first 10 weeks of 2024 show sales slightly behind last year, but orders are in line with expectations [42] Other Important Information - The company recognized a gain of approximately $8 million from the sale and leaseback of its Adairsville facility [32] - The company is celebrating the 50th anniversary of its Fabrica brand, highlighting its commitment to quality and industry leadership [41] Q&A Session All Questions and Answers Question: Can you quantify the market share gained in the soft surface market? - Management indicated that while they cannot provide exact numbers, they have gained market share and noted that carpet has continued to lose market share to hard surfaces [46] Question: What is the Board's goal regarding debt in relation to equity? - The company has made significant progress in reducing debt and is monitoring economic conditions to determine future financing needs [54] Question: Will the company address compliance with NASDAQ efficiency filing dates? - Management confirmed that they will be addressing compliance issues soon [44]

Financial Performance - For the fiscal year 2023, net sales were $276,343,000, a decrease of 9.0% compared to $303,570,000 in 2022[3] - The operating income for 2023 was $5,048,000, a significant improvement from an operating loss of $28,156,000 in the previous year[3] - The net loss for 2023 was $2,718,000, or $0.18 per diluted share, compared to a net loss of $35,079,000, or $2.32 per diluted share, in 2022[3] - In Q4 2023, net sales were $66,674,000, down from $70,535,000 in Q4 2022, but average weekly sales increased by approximately 2% when adjusted for the additional week in the prior year[4][5] - Net sales for the three months ended December 30, 2023, were $66,674 million, a decrease of $3,861 million or 5.5% compared to $70,535 million in the same period of 2022[18] - For the twelve months ended December 30, 2023, net sales totaled $276,343 million, down $27,227 million or 9.0% from $303,570 million in 2022[18] - The company reported an adjusted weekly sales figure of $5,129 million for the three months ended December 30, 2023, reflecting an increase of $91 million or 1.8% from $5,038 million in the same period of 2022[18] - For the twelve months ended December 30, 2023, adjusted weekly sales were $5,314 million, a decrease of $414 million or 7.2% compared to $5,728 million in 2022[18] Cost Management - The company reduced costs by over $35 million in 2023 and plans to further reduce costs by $10 million in 2024[6] - Gross profit margin improved to 26.7% in 2023, up from 17.7% in 2022, reflecting cost reductions and plant consolidation efforts[6] - Capital expenditures in 2023 were $1 million, a decrease from $4.6 million in 2022[12] Debt and Financing - The debt level at the end of 2023 was $82.5 million, a 16.9% decrease from $99.3 million at the end of 2022[12] - The company completed a sale and leaseback of its distribution facility in December 2023, resulting in a gain of over $8 million and a debt reduction of approximately $16 million[13] Future Operations - The company plans to start its own nylon extrusion operations in Q1 2024 to mitigate raw material disruptions and lower costs[7]

Financial Data and Key Metrics Changes - For Q3 2023, net sales were $68.6 million, down approximately 4% from $71.8 million in Q3 2022. Net operating income was a loss of $913,000, an improvement from a loss of over $7 million in the same quarter last year. Gross margin improved by over 9 percentage points from 17.5% to 26.6% [3][4][10] - Year-to-date operating income for the first nine months of 2023 was a loss of $354,000, significantly better than a loss of $12.3 million for the same period in 2022. The year-to-date loss included $2.3 million in facility consolidation expenses [3][9] - Net loss for Q3 2023 was $2.4 million compared to a net loss of $8.8 million in the same period last year. Year-to-date net loss was $5.9 million, down from $16.6 million in the prior year [10] Business Line Data and Key Metrics Changes - Sales decline was partially attributed to a loss in volume in the mass merchant channel due to a strategic shift by the largest mass merchant customer towards lower price point offerings [5][6] - The company has continued to invest in hard surface initiatives and broadened its product offerings, gaining retail floor space and market share despite overall industry challenges [13][14] Market Data and Key Metrics Changes - The housing market remains constrained due to limited supply, high interest rates, and inflation, leading to a weak residential flooring market. The company believes it gained market share despite the overall industry decline [4][6] - The upper end of the market is outperforming the general market, and sales and orders for the first six weeks of Q4 2023 are slightly better than the previous year [15] Company Strategy and Development Direction - The company is focused on managing controllable aspects of the business, including productivity improvements, cost reductions, and restructuring assets to optimize cash flow [12][18] - Plans to begin in-house nylon extrusion in Q1 2024 to mitigate future raw material disruptions and lower costs [20] Management's Comments on Operating Environment and Future Outlook - Management acknowledges the cyclical downturn in the flooring industry but remains optimistic about a future rebound. They are focused on cost reductions and growth initiatives to position the company for recovery [4][18] - The company expects to continue lowering costs into the next year while investing in growth initiatives that will positively impact sales once the market improves [35] Other Important Information - Capital expenditures for Q3 totaled $166,000, with a year-to-date total of $763,000. Total capital expenditures are planned around $1 million for the year [17] - The company reduced debt by over $3 million at the end of Q3 compared to the end of the prior year [14] Q&A Session Summary Question: Anticipated lag time for sales increase following interest rate decreases - Management indicated that remodeling typically precedes home resales, and a significant decrease in interest rates would likely result in a shorter lag time for sales increases [16][22] Question: Adjustments made following the loss of Lowe's business - Management confirmed a focus on residential retailers across the country and believes they are gaining market share despite the decline in big box market share [23] Question: Progress on facility consolidation and in-house production - Management detailed the consolidation of manufacturing facilities into lower-cost operations, which has helped reduce overall costs. They expect to incur about $500,000 in remaining consolidation expenses [27][28][29] Question: Status of the Ardennes Ville facility sale leaseback - Management confirmed ongoing efforts to pursue a sale leaseback opportunity for the Ardennes Ville facility, aiming to close a deal by the end of the year [30]

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 Form 10-Q (Mark One) THE DIXIE GROUP, INC. (Exact name of Registrant as specified in its charter) | Tennessee | | 62-0183370 | | --- | --- | --- | | (State or other jurisdiction of incorporation or organization) | | (I.R.S. Employer Identification No.) | | 475 Reed Road, Dalton, Georgia | 30720 | (706) 876-5800 | | (Address of principal executive offices) | (zip code) | (Registrant's telephone number, including area code) | | | Not Appl ...

Financial Data and Key Metrics Changes - For Q2 2023, net sales were approximately $74 million, down from $83.7 million in Q2 2022, reflecting a year-over-year decline [1][6] - Operating income improved to $253,000 compared to a loss of $2.9 million in the same quarter of the prior year [1][8] - Gross margin for Q2 2023 was 26.7% of net sales, significantly improved from the low 19% range in the prior year [7] - Net loss for the quarter was $1.7 million, an improvement from a net loss of $4.5 million in the same period last year [9] Business Line Data and Key Metrics Changes - The decrease in sales was partially due to a loss of volume in the mass merchant channel, which was affected by the customer's shift to lower price point offerings [2][10] - Excluding mass merchant sales, net sales were down 9.1% for the quarter [10] - Selling and administrative expenses were lower in dollars than the same period in the prior year but higher as a percentage of net sales due to lower sales volume [23] Market Data and Key Metrics Changes - The residential flooring market remains weak due to limited supply, high interest rates, and inflation, with the carpet market down in the mid-teens [21] - Multifamily and new housing segments were stronger than the residential replacement segment [21] Company Strategy and Development Direction - The company is focused on reducing total costs by over $35 million this year and has invested heavily in the hard surface market and decorative products [10][11] - Facility consolidations have better aligned demand and capacity, leading to operational improvements [26] - The company launched 11 new products in synthetic soft surface brands and continued executing its growth strategy with 23 new introductions in decorative brands [27] Management Comments on Operating Environment and Future Outlook - Management noted that the flooring industry is experiencing a cyclical downturn, but they are preparing for a future rebound by cutting costs and improving operations [13][28] - There is optimism regarding order entry for July, which was slightly ahead of the previous year, indicating potential momentum from new product launches [28] Other Important Information - Interest expense for the quarter was $1.8 million, up from $1.1 million in Q2 2022, driven by increased borrowings and higher interest rates [4] - The company incurred $719,000 in expenses related to facility consolidation during Q2 2023 [8] - Capital expenditures for the quarter totaled $238,000, with a planned total of $3 million for the year [24] Q&A Session Summary Question: What is the normalized SG&A number going forward? - Management expects SG&A to be several percentage points lower as a percent of sales [15] Question: How did order entry play out in Q2? - Order entry improved throughout the quarter, with July showing slight growth compared to the previous year [16][37] Question: Will the company be operating cash flow positive in the second half? - Management is optimistic about operating cash flow positivity based on first half results and projections [18] Question: How is market share quantified? - Market share is measured through quarterly sales data received from industry organizations, specifically in the soft surface market [40]

Financial Data and Key Metrics Changes - Net sales for Q1 2023 were approximately $67 million, down from $77.5 million in the same quarter last year, representing a 14% decline [2][6] - Operating income was $300,000 compared to a loss of $2.25 million in Q1 2022, indicating a significant improvement [2][10] - Gross margin improved to 26.6% in Q1 2023 from 19.6% in Q1 2022, driven by restructuring efforts [7][17] - Interest expense increased to $1.9 million from $1.1 million in the prior year due to higher borrowings and interest rates [11] Business Line Data and Key Metrics Changes - Excluding mass merchant sales, net sales were down 7% year-over-year, primarily due to high inflation and increased interest rates affecting consumer demand [4][15] - The Masland brand showed strong performance with self-surface sales flat compared to the previous year, while engineered wood products experienced growth [15][16] Market Data and Key Metrics Changes - Sales to residential retail customers were down 7%, while the industry was believed to be down at least double that percentage [15] - The company’s hard surface products now represent 20% of total sales, reflecting a strategic shift in product offerings [25] Company Strategy and Development Direction - The company is focusing on expanding its hard surface offerings and decorative collections, with new product launches planned [25][21] - A significant restructuring plan was implemented, including a 25% reduction in workforce and cost reductions expected to exceed $35 million for the year [19][30] - The company aims to gain market share by offering stylish, quality products through selective distribution [27] Management's Comments on Operating Environment and Future Outlook - Management acknowledged a challenging industry environment but noted improved performance relative to competitors [15] - Order entry for the second quarter is running 14% above the first quarter, indicating a return to more normal operations [24] - The company is adapting strategies to a challenging environment while investing for future growth [25] Other Important Information - Capital expenditures for the year were $359,000, with a planned increase to $3 million [14] - The company celebrated the 20th anniversary of the Dixie Home brand with a rebranding initiative [20] Q&A Session Summary Question: Savings realization and pacing for cost reductions - Management indicated that $6 million in savings was realized in Q1, with expectations to achieve the remaining $11 million throughout the year, primarily from workforce reductions and material costs [30] Question: Gross margins and overhead cost absorption - Management confirmed that gross margins were strong, but overhead cost absorption did impact results slightly [31] Question: Future restructuring charges - Estimated residual restructuring charges of $300,000 to $500,000 are expected in Q2 for facility maintenance and severance costs [32] Question: Liquidity and cash flow generation - Management did not project operating cash flow from accounts receivable or inventory drawdowns but noted improved borrowing availability [36] Question: Debt maturity timeline - The next major debt maturity is in 2025, with a renewal of the senior credit facility expected at that time [38]

THE Exhibit 99.1 allen.danzey@dixiegroup.com THE 2 | --- | --- | --- | |-------|--------|--------------------------------------------------------------------------------| | | | | | • | 1920 | Began as Dixie Mercerizing in Chattanooga, TN | | • | 1990's | Transitioned from textiles to floorcovering | | • | 2003 | Refined focus on upper- end floorcovering market | | • | 2003 | Launched Dixie Home - upper end residential line | | • | 2005 | Launched modular tile carpet line – new product category | | • | 2012 ...

Financial Performance - Net sales for the fiscal year ended December 31, 2022, were $303.6 million, a decrease of 11.0% compared to $341.2 million in 2021[89]. - Gross profit decreased to $53.6 million, representing 17.7% of net sales, down from 22.6% in 2021, reflecting a 30.6% decline year-over-year[89][90]. - Selling and administrative expenses increased to $77.0 million, or 25.4% of net sales, compared to $67.9 million, or 19.9% of net sales in 2021, marking a 13.3% increase[93]. - The operating loss for 2022 was $28.2 million, a significant decline from an operating income of $10.0 million in 2021, representing a 381.5% change[96]. - Net income for 2022 was a loss of $35.1 million, or $2.32 per diluted share, compared to net income of $1.6 million, or $0.09 per diluted share in 2021[100]. Cash Flow and Operations - Cash used in continuing operations was $17.5 million, driven by a reduction in receivables of $15.2 million and a decrease in accounts payable of $9.6 million[101]. - The company incurred facility consolidation expenses of $4.6 million in 2022, a significant increase from $0.3 million in 2021, related to the consolidation of east coast manufacturing[95]. - Interest expense rose to $5.3 million in 2022 from $4.7 million in 2021, attributed to higher interest rates and increased debt[97]. Tax and Valuation - The effective income tax rate was a benefit of 0.26% in 2022, with a valuation allowance increase of $8.5 million related to net deferred tax assets[98]. - The company increased its valuation allowances by $8.5 million related to net deferred tax assets and specific federal and state net operating losses for the year ended December 31, 2022[116]. - The company had valuation allowances of $21.3 million at December 31, 2022, compared to $12.9 million at December 25, 2021[127]. Debt and Liabilities - Availability under the Senior Secured Revolving Credit Facility was $15.3 million as of December 31, 2022[103]. - At December 31, 2022, approximately 76% of the company's total debt, amounting to $76,341, was subject to floating interest rates[129]. - A one-hundred basis point fluctuation in the variable interest rates applicable to floating rate debt would have an annual pre-tax impact of approximately $763[129]. - The company recorded a liability for amounts received from a sale and leaseback transaction, with an annual rental rate of $977 thousand, subject to annual rent increases of 1.25%[112]. - The company has a reserve of $2.2 million for environmental liabilities at previously owned sites associated with discontinued textile businesses as of December 31, 2022[118]. - The company has no off-balance sheet arrangements as of December 31, 2022[115]. Purchases and Future Tax Outlook - Total purchases from Engineered Floors amounted to approximately $917 thousand in 2022, representing about 0.4% of the cost of sales[120]. - The company anticipates no cash outlays for income taxes to exceed $100 thousand during 2023 and 2024 due to tax loss carryforwards[117]. - As of December 31, 2022, the total unrecognized compensation expense related to unvested restricted stock awards was $1.8 million with a weighted-average vesting period of 6.0 years[114].