The Dixie Group(DXYN) - 2023 Q4 - Annual Report

Financial Performance - Net sales for the fiscal year ended December 30, 2023, were $276.3 million, a decrease of 9.0$303.6 million in 2022[92]. - Gross profit increased by 37.8% to $73.9 million, with gross profit margin rising to 26.7$74.1 million in 2023 from $76.9 million in 2022, representing 26.8$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].