Attached files

file filename
EX-99.2 - EX-99.2 - DIXIE GROUP INCex992pressrelease-commerci.htm
EX-2.1 - EX-2.1 - DIXIE GROUP INCex21-assetpurchaseagreement.htm
8-K - 8-K - DIXIE GROUP INCdxyn-20210913.htm
Exhibit 99.1

THE DIXIE GROUP, INC.
Pro Forma Consolidated Condensed Balance Sheets
(amounts in thousands, except share data)
Unaudited
 As Reported June 26, 2021Adjustments Netting to Loss on DisposalAdjustments to Remove Amounts for Discontinued Operations As Adjusted
ASSETS(Unaudited)(Unaudited)(Note 1)
Current Assets
Cash and cash equivalents$2,398 $2,134 (A)$— $4,532 
Receivables, net51,470 — (6,050)(I)45,420 
Inventories, net91,384 (18,167)(B)(2,000)(J)71,217 
Prepaids and other current assets5,562 1,025 (C)(152)(K)6,435 
Total Current Assets150,814 (15,008)(8,202)127,604 
Property, Plant and Equipment, Net55,039 (4,957)(D)— 50,082 
Operating Lease Right-Of-Use Assets20,330 — — 20,330 
Other Assets19,819 1,025 (E)(1,716)(L)19,128 
TOTAL ASSETS$246,002 $(18,940)$(9,918)$217,144 
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
Accounts payable$27,733 $— $(1,763)(M)$25,970 
Accrued expenses31,669 (627)(F)(3,115)(N)27,927 
Current portion of long-term debt4,502 — (360)(O)4,142 
Current portion of operating lease liabilities3,271 — — 3,271 
Total Current Liabilities67,175 (627)(5,238)61,310 
Long-Term Debt, Net73,431 (16,316)(G)(50)(P)57,065 
Operating Lease Liabilities17,775 — — 17,775 
Other Long-Term Liabilities22,019 — (1,631)(Q)20,388 
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY$180,400 $(16,943)$(6,919)$156,537 
STOCKHOLDERS' EQUITY
Common Stock ($3 par value per share): Authorized 80,000,000 shares, issued and outstanding - 14,795,617 shared for 2021 and 14,557,435 shares for 202044,387 — — 44,387 
Class B Common Stock ($3 par value per share): Authorized 16,000,000 shares, issued and outstanding - 1,004,975 shares for 2021 and 880,313 shares for 20203,015 — — 3,015 
Additional paid-in capital 157,384 — — 157,384 
Accumulated deficit(139,000)(1,997)(H)(2,999)(R)(143,996)
Accumulated other comprehensive loss(184)— — (184)
TOTAL STOCKHOLDERS' EQUITY65,602 (1,997)(2,999)60,606 
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY$246,002 $(18,940)$(9,918)$217,144 

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Exhibit 99.1

THE DIXIE GROUP, INC.
Consolidated Condensed Statements of Operations
(unaudited; in thousands, except per share data)

Six Months Ended June 26, 2021Twelve Months Ended December 26, 2020Twelve Months Ended December 28, 2019
Pro FormaPro FormaPro Forma
 As Reported Adjustments (S)Pro FormaAs ReportedAdjustments (S)Pro FormaAs ReportedAdjustments (S)Pro Forma
NET SALES$191,134 $(28,405)$162,729 $315,939 $(65,070)$250,869 $374,582 $(99,281)$275,301 
Cost of sales145,885 (22,544)123,341 239,483 (46,446)193,037 288,377 (67,900)220,477 
GROSS PROFIT45,249 (5,861)39,388 76,456 (18,624)57,832 86,205 (31,381)54,824 
Selling and administrative expenses41,157 (8,460)32,697 75,731 (17,556)58,175 83,825 (23,455)60,370 
Other operating (income) expense, net35 — 35 (108)— (108)(23,988)— (23,988)
Facility consolidation and severance expenses, net96 — 96 3,752 (1,281)2,471 5,019 (4,435)584 
OPERATING INCOME (LOSS)3,961 2,599 6,560 (2,919)213 (2,706)21,349 (3,491)17,858 
Interest expense2,571 — 2,571 5,803 — 5,803 6,444 — 6,444 
Other expense (income), net(1)— (1)678 — 678 (57)— (57)
Income (loss) from continuing operations before taxes1,391 2,599 3,990 (9,400)213 (9,187)14,962 (3,491)11,471 
Income tax provision (benefit)(51)341 (T)290 (312)(9)(T)(321)(657)(50)(T)(707)
Income (loss) from continuing operations1,442 2,258 3,700 (9,088)222 (8,866)15,619 (3,441)12,178 
Income (loss) from discontinued operations, net of tax(121)— (121)(120)— (120)(348)— (348)
NET INCOME (LOSS)$1,321 $2,258 $3,579 $(9,208)$222 $(8,986)$15,271 $(3,441)$11,830 
BASIC EARNINGS (LOSS) PER SHARE:
Continuing operations$0.09 $0.17 $0.26 $(0.59)$(0.07)$(0.66)$0.96 $(0.49)$0.47 
BASIC SHARES OUTSTANDING15,10215,10215,10215,31615,31615,31615,82215,82215,822
DILUTED EARNINGS (LOSS) PER SHARE:
Continuing operations0.09 0.16 0.25 (0.59)(0.07)(0.66)0.95 (0.48)0.47 
DILUTED SHARES OUTSTANDING 15,23215,23215,23215,31615,31615,31615,92615,92615,926
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Exhibit 99.1

THE DIXIE GROUP, INC.

UNAUDITED PRO FORMA FINANCIAL INFORMATION

1.Basis of Presentation

On September 13, 2021, The Dixie Group, Inc. (“the Company”) consummated an asset purchase agreement concerning the machinery and inventory related to its commercial products. The following unaudited pro forma financial statements give effect to the sale of the Company’s commercial related business. The unaudited pro forma balance sheet as of June 26, 2021, the date of the Company’s most recently filed balance sheet, has been prepared assuming the sale of the commercial business was consummated as of that date. The unaudited pro forma statements of operations for six months ended June 26, 2021, the twelve months ended December 26, 2020 and the twelve months ended December 28, 2019 have been prepared in accordance with the SEC’s pro forma rules under S-X Article 11 assuming that the sale of the commercial business occurred as of December 30, 2018, the first day of the first year presented. All material adjustments required to reflect the consummation of the sale of the commercial business are set forth in the columns under the label “Pro Forma Adjustments”. The data presented in the columns labeled “As Reported” is derived from the Company’s historical unaudited consolidated balance sheet as of June 26, 2021 and the consolidated statements of operations for the six months ended June 26, 2021, the twelve months ended December 26, 2020 and the twelve months ended December 28, 2019. The unaudited pro forma financial data is presented for informational purposes only and is not necessarily indicative of the results of future operations or future financial position of the Company or the actual results of operations or financial position that would have occurred had the sale of the commercial business been consummated as of the dates indicated above.

The unaudited pro forma condensed consolidated financial information is presented based on currently available information and assumptions, as described in the accompanying notes, that our management believes are reasonable under the circumstances. The parties have entered into a Transition Services Agreement with activity to be billed at internal cost. The pro forma adjustments do not include any estimate of activity under the Transition Services Agreement.

The unaudited pro forma financial statements and accompanying notes should be read in conjunction with our historical financial statements and accompanying notes thereto, and our Quarterly report on Form 10-Q for the six months ended June 26, 2021 and Annual Reports on Form 10-K for the years ended December 26, 2020 and December 28, 2019.
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Exhibit 99.1



2.     Notes to the Balance Sheet

A - Addition of cash deposited as collateral in place of fixed assets sold which were under financing agreement
B - Removal of net book value for commercial inventories. Includes write down of discontinued inventories retained by the Company post transaction
C - Current portion of escrow deposit
D - Removal of net book value for fixed assets related to the commercial business sold, idled and/or to be disposed
E - Long term portion of escrow deposit
F - Removal of liability for customer deposits. Addition of accrued expenses for transaction related costs such as severance agreements, legal fees and expenses for operational alignment
G - Reduction of debt by proceeds from sale of assets
H - Loss expected to be recorded for the sale of commercial business
I - Removal of net trade receivables generated by the commercial business
J - Removal of estimated recovery value of commercial inventory retained by the Company
K - Removal of deposits related to the commercial business
L - Removal of other long term assets related to the commercial business
M - Removal of trade accounts payable directly related to the commercial business
N - Removal of accrued expenses primarily, but not exclusively, related to payroll and estimated future claims of the commercial business
O - Removal of current portion of debt for payment on financing agreements tied to fixed assets removed in item D above
P - Removal of long term portion of debt for payment on financing agreements tied to fixed assets removed in item D above
Q - Removal of long term liabilities tied to the commercial business
R - Net amount of assets and liabilites held for discontinued operations

3.     Notes to the Income Statement

S - Column shows adjustment amounts for revenues and expenses directly related to the commercial business
T - Represents the estimated tax effect of the pro forma adjustments


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