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]

PART I. FINANCIAL INFORMATION This section provides the Company's financial statements, management's analysis, market risk disclosures, and internal controls [Item 1. Financial Statements](index=4&type=section&id=Item%201.%20Financial%20Statements) This section presents the Company's unaudited consolidated financial statements and related detailed notes [Consolidated Condensed Balance Sheets](index=4&type=section&id=Consolidated%20Condensed%20Balance%20Sheets) Total assets and stockholders' equity decreased from December 2022 to September 2023, while total liabilities remained stable | Metric | September 30, 2023 (thousands) | December 31, 2022 (thousands) | | :--- | :--- | :--- | | Total Assets | $197,135 | $202,946 | | Total Liabilities | $171,207 | $171,432 | | Total Stockholders' Equity | $25,928 | $31,514 | | Current Assets | $120,675 | $119,879 | | Current Liabilities | $45,141 | $41,666 | [Consolidated Condensed Statements of Operations](index=5&type=section&id=Consolidated%20Condensed%20Statements%20of%20Operations) Net and operating losses significantly reduced for Q3 and YTD 2023, despite lower net sales, due to improved gross profit percentage | Metric | Three Months Ended Sep 30, 2023 (thousands) | Three Months Ended Sep 24, 2022 (thousands) | Nine Months Ended Sep 30, 2023 (thousands) | Nine Months Ended Sep 24, 2022 (thousands) | | :--- | :--- | :--- | :--- | :--- | | Net Sales | $68,576 | $71,762 | $209,669 | $233,034 | | Gross Profit | $18,235 | $12,537 | $55,848 | $43,768 | | Operating Loss | $(913) | $(7,150) | $(354) | $(12,333) | | Net Loss | $(2,394) | $(8,780) | $(5,878) | $(16,624) | | Basic EPS (Net Loss) | $(0.16) | $(0.58) | $(0.40) | $(1.09) | [Consolidated Condensed Statements of Comprehensive Income (Loss)](index=6&type=section&id=Consolidated%20Condensed%20Statements%20of%20Comprehensive%20Income%20(Loss)) Comprehensive losses for Q3 and YTD 2023 were reported, primarily from net loss and other comprehensive losses | Metric | Three Months Ended Sep 30, 2023 (thousands) | Three Months Ended Sep 24, 2022 (thousands) | Nine Months Ended Sep 30, 2023 (thousands) | Nine Months Ended Sep 24, 2022 (thousands) | | :--- | :--- | :--- | :--- | :--- | | Net Loss | $(2,394) | $(8,780) | $(5,878) | $(16,624) | | Total Other Comprehensive Income (Loss), Net of Tax | $(5) | $0 | $(16) | $170 | | Comprehensive Loss | $(2,399) | $(8,780) | $(5,894) | $(16,454) | [Consolidated Condensed Statements of Cash Flows](index=7&type=section&id=Consolidated%20Condensed%20Statements%20of%20Cash%20Flows) Operating activities generated positive cash flow for YTD 2023, a significant improvement, with reduced cash usage in investing and financing | Metric | Nine Months Ended Sep 30, 2023 (thousands) | Nine Months Ended Sep 24, 2022 (thousands) | | :--- | :--- | :--- | | Net Cash Provided By (Used In) Operating Activities | $5,040 | $(13,720) | | Net Cash Used In Investing Activities | $(734) | $(4,921) | | Net Cash Provided By (Used In) Financing Activities | $(3,338) | $16,714 | | Decrease In Cash And Cash Equivalents | $(190) | $(510) | | Cash And Cash Equivalents At End Of Period | $173 | $961 | [Consolidated Condensed Statements of Stockholders' Equity](index=9&type=section&id=Consolidated%20Condensed%20Statements%20of%20Stockholders'%20Equity) Stockholders' equity decreased from December 2022 to September 2023, primarily due to net losses and other comprehensive losses | Metric | December 31, 2022 (thousands) | September 30, 2023 (thousands) | | :--- | :--- | :--- | | Total Stockholders' Equity | $31,514 | $25,928 | | Accumulated Deficit | $(173,784) | $(179,860) | - Repurchases of Common Stock for the nine months ended September 30, 2023, totaled **$(44) thousand**[23](index=23&type=chunk) - Stock-based compensation expense for the nine months ended September 30, 2023, totaled **$550 thousand**[23](index=23&type=chunk) [Notes to Consolidated Condensed Financial Statements](index=12&type=section&id=Notes%20to%20Consolidated%20Condensed%20Financial%20Statements) These notes provide detailed disclosures on accounting policies, debt, leases, employee benefits, income taxes, stock compensation, and discontinued operations [NOTE 1 - BASIS OF PRESENTATION](index=12&type=page&id=NOTE%201%20-%20BASIS%20OF%20PRESENTATION) The unaudited consolidated condensed financial statements are prepared under U.S. GAAP for interim reporting and should be read with the 2022 Annual Report on Form 10-K - Financial statements are unaudited and prepared under U.S. GAAP for interim reporting, to be read in conjunction with the **2022 10-K**[28](index=28&type=chunk) - The Company has one reportable segment: **Floorcovering**[29](index=29&type=chunk) - Discontinued operations are reported separately and detailed in Note 20[30](index=30&type=chunk) [NOTE 2 - RECENT ACCOUNTING PRONOUNCEMENTS](index=12&type=page&id=NOTE%202%20-%20RECENT%20ACCOUNTING%20PRONOUNCEMENTS) The Company adopted ASU 2016-13 (CECL model) effective January 1, 2023, resulting in a $198 thousand increase in accumulated deficit - Adopted ASU 2016-13 (CECL model) effective **January 1, 2023**[31](index=31&type=chunk) - Cumulative impact of **$198 thousand** recorded as an increase in accumulated deficit due to CECL adoption[31](index=31&type=chunk) [NOTE 3 - REVENUE](index=12&type=page&id=NOTE%203%20-%20REVENUE) Revenue is primarily from residential floorcovering products and processing services, recognized upon transfer of control, with net sales decreasing in 2023 - Revenue is recognized when control of products or services is transferred to customers[32](index=32&type=chunk) Net Sales by Product/Service (thousands) | Product/Service | Three Months Ended Sep 30, 2023 (thousands) | Three Months Ended Sep 24, 2022 (thousands) | Nine Months Ended Sep 30, 2023 (thousands) | Nine Months Ended Sep 24, 2022 (thousands) | | :--- | :--- | :--- | :--- | :--- | | Residential floorcovering products | $67,659 | $70,125 | $206,515 | $227,610 | | Other services | $917 | $1,637 | $3,154 | $5,424 | | Total net sales | $68,576 | $71,762 | $209,669 | $233,034 | Contract Liability Activity (thousands) | Contract Liability Activity | Three Months Ended Sep 30, 2023 (thousands) | Nine Months Ended Sep 30, 2023 (thousands) | | :--- | :--- | :--- | | Beginning contract liability | $1,034 | $1,055 | | Revenue recognized from beginning balance | $(742) | $(862) | | Increases due to cash received, net | $785 | $884 | | Ending contract liability | $1,077 | $1,077 | [NOTE 4 - RECEIVABLES, NET](index=15&type=page&id=NOTE%204%20-%20RECEIVABLES%2C%20NET) Net receivables increased to $28,074 thousand at September 30, 2023, due to higher trade receivables and an increased allowance for expected credit losses Receivables, Net (thousands) | Metric | September 30, 2023 (thousands) | December 31, 2022 (thousands) | | :--- | :--- | :--- | | Receivables, net | $28,074 | $25,009 | | Allowance for expected credit losses | $(439) | $(111) | - Adoption of ASU 2016-13 (CECL) resulted in a cumulative impact of **$388 thousand** from continuing operations[44](index=44&type=chunk) [NOTE 5 - INVENTORIES, NET](index=15&type=page&id=NOTE%205%20-%20INVENTORIES%2C%20NET) Net inventories decreased to $79,940 thousand at September 30, 2023, driven by reductions across all categories and a lower LIFO reserve Inventories, Net (thousands) |

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].

Financial Data and Key Metrics Changes - The net sales for the fiscal year 2022 were $304 million, which is 11% lower than the $341 million reported in 2021 [15][17] - The net loss for fiscal year 2022 was $35.1 million, compared to a profit of $1.6 million in the previous year [18] - The gross profit margin for fiscal year 2022 was 17.7%, down from 22.6% in fiscal year 2021 [7] - Selling and administrative expenses were 25.4% of net sales in 2022, compared to 19.9% in the prior fiscal year [7] - Interest expense increased to $5.3 million in 2022 from $4.7 million in 2021 due to higher debt levels and interest rates [7] Business Line Data and Key Metrics Changes - The polyester business grew by 49% in 2022, with projections for a 75% sales growth in 2023 starting from a low base [31] - The Hard Surface segment has grown to approximately $50 million in annual sales, representing about 20% of total sales [23] - The company faced a significant impact from the exit of Invista from the Stainmaster nylon business, leading to a loss of business with Lowe's [10][11] Market Data and Key Metrics Changes - The company experienced a reduction in sales volume, leading to a decrease in accounts receivable by $14 million year-over-year [19] - Accounts payable and accrued expenses decreased by $11.1 million at the end of 2022, consistent with lower volume and inventory costs [20] Company Strategy and Development Direction - The company is focusing on growth initiatives in polyester products and has developed a three-year strategy to expand this category [13][30] - A consolidation plan for East Coast facilities is expected to result in over $25 million in savings and a 24% reduction in workforce [15][30] - The company is also restructuring its manufacturing to adapt to market changes, including ceasing yarn and carpet manufacturing in certain plants [29] Management's Comments on Operating Environment and Future Outlook - Management indicated that 2023 is expected to be challenging due to economic uncertainty, inflation, and higher interest rates, but anticipates growth from new initiatives [30] - The company is implementing cost reduction measures and expects improved results in 2023 despite a sluggish core business [30] Other Important Information - Capital expenditures for the year were $4.6 million, with depreciation of $7.6 million [9] - The company ended the year with a borrowing availability of $15.3 million under its senior credit facility [21] Q&A Session Summary - There were no questions during the Q&A session, and the call concluded with management expressing optimism for 2023 compared to 2022 [25][26]

Dixie Group (NASDAQ:DXYN) Q3 2022 Earnings Conference Call November 3, 2022 2:00 PM ET Company Participants Dan Frierson - Chairman and Chief Executive Officer Allen Danzey - Chief Financial Officer Operator Good day and welcome to the Dixie Group, Inc. 2022 Third Quarter Earnings Conference Call. TodayÂ's call is being recorded. At this time, for opening remarks and introductions, I would like to turn the call over to the Chairman and Chief Executive Officer, Dan Frierson. Thank you, sir. Please go ahead. ...

The Dixie Group, Inc. (NASDAQ:DXYN) Q2 2022 Results Conference Call August 15, 2022 2:00 PM ET Company Participants Dan Frierson - Chairman & CEO Allen Danzey - VP & CFO Conference Call Participants Barry Gertner - Improverb Derek Maupin - Hodges Capital Management Chris Riemenschneider - Morgan Stanley Operator Greetings, and welcome to the Dixie Group Second Quarter 2022 Conference Call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presenta ...