The Dixie Group Completes Acquisition of Multitex/Globaltex

Business Wire, Jan 11, 1999

CHATTANOOGA, Tenn.--(BUSINESS WIRE)--Jan. 11, 1999--The Dixie Group, Inc. (Nasdaq/NM:DXYN) today announced that it has completed the previously announced acquisition of the assets of Multitex Corporation of America, Inc., a Dalton, Georgia, carpet and carpet yarn producer with annual revenues of approximately $85 million. Multitex sells carpet under the Globaltex name through home centers and other retail floorcovering channels.

The purchase price for the transaction was $30 million in cash, plus future payments keyed to revenue growth. While the Company has sufficient capability within its current debt arrangements to finance the transaction, it anticipates significant cash inflows from the recently announced sales of its Tarboro, North Carolina, yarn facility and its knit fabric company in Jefferson, South Carolina. It also is in the process of divesting Specialty Yarns, its remaining textile business.

During the third quarter of 1998, The Dixie Group announced plans to focus exclusively on its floorcovering business and continue the Company's growth internally and through acquisition. Dixie's floorcovering revenues are expected to exceed $600 million in 1999.

Daniel K. Frierson, Dixie's Chairman, stated, "We are glad to have been able to reach a rapid conclusion to the merger of Multitex and Globaltex operations with Dixie's existing businesses. Multitex leaders, associates, and customers will be exciting and positive additions to the Dixie Group. This is a great way for us to start the new year as a floorcovering company."

The Dixie Group manufactures value-added floorcovering products. It is a leading carpet and rug supplier to the manufactured housing and recreational vehicle markets through Carriage Carpets, to consumers through major retailers under the Bretlin and Globaltex names, to higher-end residential and commercial customers serviced by Masland Carpets, and to the specialty carpet yarn market through Candlewick Yarns.

Statements in the news release which relate to the future are subject to risk factors and uncertainties that could cause actual results to differ materially from those indicated in such forward-looking statements. Additional information regarding these and other risk factors and uncertainties may be found in the Company's filings with the Securities and Exchange Commission.