Tennessee
|
|
62-0183370
|
(State or other jurisdiction of incorporation of organization)
|
|
(I.R.S. Employer Identification No.)
|
|
|
|
104 Nowlin Lane, Suite 101, Chattanooga, TN 37421
|
|
(423) 510-7000
|
(Address of principal executive offices and zip code)
|
|
(Registrant's telephone number, including area code)
|
|
|
|
Securities registered pursuant to Section 12(b) of the Act:
|
|
|
Title of Class
|
|
Name of each exchange on which registered
|
Common Stock, $3.00 par value
|
|
NASDAQ Stock Market, LLC
|
|
|
|
Securities registered pursuant to Section 12(g) of the Act:
|
|
|
Title of class
|
|
|
None
|
|
|
Class
|
|
Outstanding as of February 28, 2014
|
||
Common Stock, $3.00 Par Value
|
|
12,453,166
|
|
shares
|
Class B Common Stock, $3.00 Par Value
|
|
866,875
|
|
shares
|
Class C Common Stock, $3.00 Par Value
|
|
0
|
|
shares
|
PART I
|
Page
|
|
Item 1.
|
||
Item 1A.
|
||
Item 1B.
|
||
Item 2.
|
||
Item 3.
|
||
Item 4.
|
||
|
||
PART II
|
|
|
Item 5.
|
||
Item 6.
|
||
Item 7.
|
||
Item 7A.
|
||
Item 8.
|
||
Item 9.
|
||
Item 9A.
|
||
Item 9B.
|
||
PART III
|
|
|
Item 10.
|
||
Item 11.
|
||
Item 12.
|
||
Item 13.
|
||
Item 14.
|
||
PART IV
|
|
|
Item 15.
|
||
|
||
|
|
|
|
||
|
||
|
||
|
||
|
||
|
||
|
||
|
||
|
Item 1.
|
BUSINESS
|
|
2013
|
|
|
2012
|
|
|
2011
|
|
Residential floorcovering products
|
74
|
%
|
|
75
|
%
|
|
71
|
%
|
Commercial floorcovering products
|
26
|
%
|
|
25
|
%
|
|
29
|
%
|
1.
|
annual reports on Form 10-K;
|
2.
|
quarterly reports on Form 10-Q;
|
3.
|
current reports on Form 8-K; and
|
4.
|
amendments to the foregoing reports.
|
•
|
Discharge to air and water;
|
•
|
Handling and disposal of solid and hazardous substances and waste, and
|
•
|
Remediation of contamination from releases of hazardous substances in our facilities and off-site disposal locations.
|
Item 1B.
|
UNRESOLVED STAFF COMMENTS
|
Item 2.
|
PROPERTIES
|
Location
|
|
Type of Operation
|
|
Approximate Square Feet
|
|
Administrative:
|
|
|
|
|
|
Dalton, GA*
|
|
Administrative
|
|
16,000
|
|
Saraland, AL
|
|
Administrative
|
|
29,000
|
|
Santa Ana, CA
|
|
Administrative
|
|
4,000
|
|
Chattanooga, TN*
|
|
Administrative
|
|
3,500
|
|
Calhoun, GA
|
|
Administrative
|
|
10,600
|
|
|
|
Total Administrative
|
|
63,100
|
|
|
|
|
|
|
|
Manufacturing and Distribution:
|
|
|
|||
Atmore, AL
|
|
Carpet Manufacturing, Distribution
|
|
610,000
|
|
Saraland, AL
|
|
Carpet Tile Manufacturing, Distribution
|
|
384,000
|
|
Saraland, AL*
|
|
Samples and Rug Manufacturing, Distribution
|
|
132,000
|
|
Roanoke, AL
|
|
Carpet Yarn Processing
|
|
204,000
|
|
Santa Ana, CA
|
|
Carpet and Rug Manufacturing, Distribution
|
|
200,000
|
|
Calhoun, GA *
|
|
Carpet Wool Manufacturing
|
|
99,000
|
|
Calhoun, GA
|
|
Carpet Dyeing & Processing
|
|
193,300
|
|
Chatsworth, GA *
|
|
Samples and Distribution
|
|
79,600
|
|
Eton, GA
|
|
Carpet Manufacturing, Distribution
|
|
408,000
|
|
|
|
Total Manufacturing and Distribution
|
|
2,309,900
|
|
|
|
|
|
|
|
* Leased properties
|
|
TOTAL
|
|
2,373,000
|
|
Item 3.
|
LEGAL PROCEEDINGS
|
Item 4.
|
MINE SAFETY DISCLOSURES
|
Name, Age and Position
|
|
Business Experience During Past Five Years
|
|
|
|
Daniel K. Frierson, 72
Chairman of the Board, and Chief Executive Officer, Director
|
|
Director since 1973, Chairman of the Board since 1987 and Chief Executive Officer since 1980. He is the Chairman of the Company's Executive Committee and Retirement Plans Committee. He serves as Director of Astec Industries, Inc. headquartered in Chattanooga, Tennessee; and Louisiana-Pacific Corporation headquartered in Nashville, Tennessee.
|
|
|
|
D. Kennedy Frierson, Jr., 47
Vice President and Chief Operating Officer
|
|
Director since 2012 and Vice President and Chief Operating Officer since August 2009. Vice President and President Masland Residential from February 2006 to July 2009. President Masland Residential from December 2005 to January 2006. Executive Vice President and General Manager, Dixie Home, 2003 to 2005. Business Unit Manager, Bretlin, 2002 to 2003.
|
|
|
|
Jon A. Faulkner, 53
Vice President and Chief Financial Officer
|
|
Vice President and Chief Financial Officer since October 2009. Vice President of Planning and Development from February 2002 to September 2009. Executive Vice President of Sales and Marketing for Steward, Inc. from 1997 to 2002.
|
|
|
|
Paul B. Comiskey, 62
Vice President and President, Dixie Residential
|
|
Vice President and President of Dixie Residential since August 2009. Vice President and President, Dixie Home from February 2007 to July 2009. President, Dixie Home from December 2006 to January 2007. Senior Vice President of Residential Sales, Mohawk Industries, Inc. from 1998 to 2006. Executive Vice President of Sales and Marketing for World Carpets from 1996 to 1998.
|
|
|
|
V. Lee Martin, 62
Vice President and President, Masland Contract
|
|
President, Masland Contract since August 2012 and Vice President since February 2013. President, Step 2 Surfaces, LLC from 2011 to August 2012. Corporate Vice President, Sales and Marketing, for J & J Industries from 1994 to 2011.
|
|
|
|
W. Derek Davis, 63
Vice President, Human Resources
|
|
Vice President of Human Resources since January 1991. Corporate Employee Relations Director, 1988 to 1991.
|
|
|
|
D. Eugene Lasater, 63
Controller
|
|
Controller since 1988.
|
|
|
|
Starr T. Klein, 71
Secretary
|
|
Secretary since November 1992. Assistant Secretary, 1987 to 1992.
|
Item 5.
|
MARKET FOR THE REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES
|
Fiscal Month Ending
|
|
Total Number of Shares Purchased
|
|
Average Price Paid Per Share
|
|
Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs (1)
|
|
Maximum Number (or approximate dollar value) of Shares That May Yet Be Purchased Under Plans or Programs
|
||||||
November 2, 2013
|
|
—
|
|
|
$
|
—
|
|
|
—
|
|
|
|
||
November 30, 2013
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
|||
December 28, 2013
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
|||
Three Fiscal Months Ended December 28, 2013
|
|
—
|
|
|
$
|
—
|
|
|
—
|
|
|
$
|
4,268,461
|
|
(1)
|
On August 8, 2007, we announced a program to repurchase up to $10 million of our Common Stock.
|
THE DIXIE GROUP, INC.
|
||||||||||||||||
QUARTERLY FINANCIAL DATA, DIVIDENDS AND PRICE RANGE OF COMMON STOCK
|
||||||||||||||||
(unaudited) (dollars in thousands, except per share data)
|
||||||||||||||||
2013
|
|
1ST
|
|
2ND
|
|
3RD
|
|
4TH
|
||||||||
Net sales
|
|
$
|
75,440
|
|
|
$
|
83,617
|
|
|
$
|
90,210
|
|
|
$
|
95,799
|
|
Gross profit
|
|
18,412
|
|
|
22,302
|
|
|
22,100
|
|
|
22,825
|
|
||||
Operating income
|
|
1,677
|
|
|
3,271
|
|
|
1,830
|
|
|
1,813
|
|
||||
Income from continuing operations
|
|
651
|
|
|
1,677
|
|
|
1,432
|
|
|
1,598
|
|
||||
Loss from discontinued operations
|
|
(15
|
)
|
|
(32
|
)
|
|
(20
|
)
|
|
(1
|
)
|
||||
Net income
|
|
$
|
636
|
|
|
$
|
1,645
|
|
|
$
|
1,412
|
|
|
$
|
1,597
|
|
Basic earnings per share:
|
|
|
|
|
|
|
|
|
||||||||
Continuing operations
|
|
$
|
0.05
|
|
|
$
|
0.13
|
|
|
$
|
0.11
|
|
|
$
|
0.12
|
|
Discontinued operations
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Net income
|
|
$
|
0.05
|
|
|
$
|
0.13
|
|
|
$
|
0.11
|
|
|
$
|
0.12
|
|
Diluted earnings per share:
|
|
|
|
|
|
|
|
|
||||||||
Continuing operations
|
|
$
|
0.05
|
|
|
$
|
0.13
|
|
|
$
|
0.11
|
|
|
$
|
0.12
|
|
Discontinued operations
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Net income
|
|
$
|
0.05
|
|
|
$
|
0.13
|
|
|
$
|
0.11
|
|
|
$
|
0.12
|
|
|
|
|
|
|
|
|
|
|
||||||||
Common Stock Prices:
|
|
|
|
|
|
|
|
|
||||||||
High
|
|
$
|
5.93
|
|
|
$
|
9.38
|
|
|
$
|
12.05
|
|
|
$
|
13.85
|
|
Low
|
|
3.24
|
|
|
5.30
|
|
|
7.43
|
|
|
9.15
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
2012
|
|
1ST
|
|
2ND
|
|
3RD
|
|
4TH
|
||||||||
Net sales
|
|
$
|
62,851
|
|
|
$
|
66,566
|
|
|
$
|
65,822
|
|
|
$
|
71,134
|
|
Gross profit
|
|
15,703
|
|
|
15,719
|
|
|
16,557
|
|
|
17,395
|
|
||||
Operating income (loss)
|
|
620
|
|
|
(40
|
)
|
|
820
|
|
|
415
|
|
||||
Income (loss) from continuing operations
|
|
(104
|
)
|
|
(404
|
)
|
|
269
|
|
|
(413
|
)
|
||||
Loss from discontinued operations
|
|
(77
|
)
|
|
(29
|
)
|
|
(167
|
)
|
|
(2
|
)
|
||||
Net income (loss)
|
|
$
|
(181
|
)
|
|
$
|
(433
|
)
|
|
$
|
102
|
|
|
$
|
(415
|
)
|
Basic earnings (loss) per share:
|
|
|
|
|
|
|
|
|
||||||||
Continuing operations
|
|
$
|
(0.01
|
)
|
|
$
|
(0.03
|
)
|
|
$
|
0.02
|
|
|
$
|
(0.03
|
)
|
Discontinued operations
|
|
—
|
|
|
—
|
|
|
(0.01
|
)
|
|
—
|
|
||||
Net income (loss)
|
|
$
|
(0.01
|
)
|
|
$
|
(0.03
|
)
|
|
$
|
0.01
|
|
|
$
|
(0.03
|
)
|
Diluted earnings (loss) per share:
|
|
|
|
|
|
|
|
|
||||||||
Continuing operations
|
|
$
|
(0.01
|
)
|
|
$
|
(0.03
|
)
|
|
$
|
0.02
|
|
|
$
|
(0.03
|
)
|
Discontinued operations
|
|
—
|
|
|
—
|
|
|
(0.01
|
)
|
|
—
|
|
||||
Net income (loss)
|
|
$
|
(0.01
|
)
|
|
$
|
(0.03
|
)
|
|
$
|
0.01
|
|
|
$
|
(0.03
|
)
|
|
|
|
|
|
|
|
|
|
||||||||
Common Stock Prices:
|
|
|
|
|
|
|
|
|
||||||||
High
|
|
$
|
4.79
|
|
|
$
|
4.25
|
|
|
$
|
3.90
|
|
|
$
|
4.38
|
|
Low
|
|
2.83
|
|
|
3.20
|
|
|
3.02
|
|
|
2.95
|
|
Item 6.
|
SELECTED FINANCIAL DATA
|
The Dixie Group, Inc.
|
||||||||||||||||||||
Historical Summary
|
||||||||||||||||||||
(dollars in thousands, except share and per share data)
|
||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
||||||||||
FISCAL YEARS
|
|
2013
|
|
2012
|
|
2011 (1)
|
|
2010 (2)
|
|
2009 (3)
|
||||||||||
OPERATIONS
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Net sales
|
|
$
|
345,066
|
|
|
$
|
266,372
|
|
|
$
|
270,110
|
|
|
$
|
231,322
|
|
|
$
|
203,480
|
|
Gross profit
|
|
85,639
|
|
|
65,372
|
|
|
65,506
|
|
|
56,651
|
|
|
52,106
|
|
|||||
Operating income (loss)
|
|
8,591
|
|
|
1,815
|
|
|
5,668
|
|
|
(2,570
|
)
|
|
(45,389
|
)
|
|||||
Income (loss) from continuing operations before taxes
|
|
4,715
|
|
|
(1,054
|
)
|
|
1,956
|
|
|
(6,977
|
)
|
|
(50,729
|
)
|
|||||
Income tax provision (benefit)
|
|
(643
|
)
|
|
(401
|
)
|
|
684
|
|
|
(2,604
|
)
|
|
(8,870
|
)
|
|||||
Income (loss) from continuing operations
|
|
5,358
|
|
|
(653
|
)
|
|
1,272
|
|
|
(4,373
|
)
|
|
(41,859
|
)
|
|||||
Depreciation and amortization
|
|
10,262
|
|
|
9,396
|
|
|
9,649
|
|
|
11,575
|
|
|
13,504
|
|
|||||
Dividends
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Capital expenditures
|
|
11,438
|
|
|
3,386
|
|
|
6,740
|
|
|
1,771
|
|
|
2,436
|
|
|||||
Assets purchased under capital leases
|
|
1,865
|
|
|
666
|
|
|
14
|
|
|
127
|
|
|
—
|
|
|||||
FINANCIAL POSITION
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Total assets
|
|
$
|
248,866
|
|
|
$
|
201,770
|
|
|
$
|
182,943
|
|
|
$
|
180,929
|
|
|
$
|
181,944
|
|
Working capital
|
|
95,679
|
|
|
76,958
|
|
|
66,417
|
|
|
56,496
|
|
|
52,616
|
|
|||||
Long-term debt
|
|
101,759
|
|
|
80,166
|
|
|
65,357
|
|
|
58,070
|
|
|
59,349
|
|
|||||
Stockholders' equity
|
|
70,771
|
|
|
64,046
|
|
|
64,385
|
|
|
62,430
|
|
|
66,349
|
|
|||||
PER SHARE
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Income (loss) from continuing operations:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Basic
|
|
$
|
0.40
|
|
|
$
|
(0.05
|
)
|
|
$
|
0.10
|
|
|
$
|
(0.35
|
)
|
|
$
|
(3.39
|
)
|
Diluted
|
|
0.40
|
|
|
(0.05
|
)
|
|
0.10
|
|
|
(0.35
|
)
|
|
(3.39
|
)
|
|||||
Dividends:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Common Stock
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Class B Common Stock
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Book value
|
|
5.32
|
|
|
4.88
|
|
|
4.99
|
|
|
4.86
|
|
|
5.20
|
|
|||||
GENERAL
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Weighted-average common shares outstanding:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Basic
|
|
12,736,835
|
|
|
12,637,657
|
|
|
12,585,396
|
|
|
12,524,358
|
|
|
12,330,648
|
|
|||||
Diluted
|
|
12,851,917
|
|
|
12,637,657
|
|
|
12,623,054
|
|
|
12,524,358
|
|
|
12,330,648
|
|
|||||
Number of shareholders (4)
|
|
2,350
|
|
|
1,800
|
|
|
1,750
|
|
|
1,750
|
|
|
1,860
|
|
|||||
Number of associates
|
|
1,423
|
|
|
1,200
|
|
|
1,171
|
|
|
1,150
|
|
|
1,050
|
|
(1)
|
Includes income of $563, or $356 net of tax, for facility consolidation and severance in 2011.
|
(2)
|
Includes expenses of $1,556, or $1,008 net of tax, for facility consolidation and severance costs in 2010.
|
(3)
|
Includes expenses of $36,956, or $32,055 net of tax, for the impairment of goodwill and long-lived assets and facility consolidation and severance costs in 2009.
|
(4)
|
The approximate number of record holders of our Common Stock for 2009 through 2013 includes Management's estimate of shareholders who held our Common Stock in nominee names as follows: 2009 - 1,300 shareholders; 2010 - 1,250 shareholders; 2011 - 1,250 shareholders; 2012 - 1,255 shareholders; 20
13 - 1,900 shareholders.
|
Item 7.
|
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
|
|
Fiscal Year Ended
|
|
Percent Increase (Decrease)
|
||||||||||||||
|
December 28, 2013
|
|
December 29, 2012
|
|
December 31, 2011
|
|
2013 vs. 2012
|
|
2012 vs. 2011
|
||||||||
Net sales as reported
|
$
|
345,066
|
|
|
$
|
266,372
|
|
|
$
|
270,110
|
|
|
29.5
|
%
|
|
(1.4
|
)%
|
Adjustment to net sales:
|
|
|
|
|
|
|
|
|
|
||||||||
Impact of shipping weeks
|
—
|
|
|
—
|
|
|
(4,711
|
)
|
|
|
|
|
|||||
Net sales as adjusted
|
$
|
345,066
|
|
|
$
|
266,372
|
|
|
$
|
265,399
|
|
|
29.5
|
%
|
|
0.4
|
%
|
|
Fiscal Year Ended
|
|||||||
|
December 28, 2013
|
|
December 29, 2012
|
|
December 31, 2011
|
|||
Net sales
|
100.0
|
%
|
|
100.0
|
%
|
|
100.0
|
%
|
Cost of sales
|
75.2
|
%
|
|
75.5
|
%
|
|
75.7
|
%
|
Gross profit
|
24.8
|
%
|
|
24.5
|
%
|
|
24.3
|
%
|
Selling and administrative expenses
|
22.2
|
%
|
|
23.8
|
%
|
|
22.5
|
%
|
Other operating (income) expense, net
|
0.1
|
%
|
|
—
|
%
|
|
(0.1
|
)%
|
Facility consolidation and severance expense, net
|
—
|
%
|
|
—
|
%
|
|
(0.2
|
)%
|
Operating income
|
2.5
|
%
|
|
0.7
|
%
|
|
2.1
|
%
|
•
|
Revenue recognition.
Revenues, including shipping and handling amounts, are recognized when the following criteria are met: there is persuasive evidence that a sales agreement exists, delivery has occurred or services have been rendered, the price to the buyer is fixed or determinable, and collection is reasonably assured. Delivery is considered to have occurred when the customer takes title to products, which is generally on the date of shipment. At the time revenue is recognized, we record a provision for the estimated amount of future returns based primarily on historical experience and any known trends or conditions.
|
•
|
Accounts receivable allowances
. We provide allowances for expected cash discounts and doubtful accounts based upon historical experience and periodic evaluations of the financial condition of our customers. If the financial conditions of our customers were to significantly deteriorate, or other factors impair their ability to pay their debts, credit losses could differ from allowances recorded in our Consolidated Financial Statements.
|
•
|
Customer claims and product warranties.
We provide product warranties related to manufacturing defects and specific performance standards for our products. We record reserves for the estimated costs of defective products and failure to meet applicable performance standards. The levels of reserves are established based primarily upon historical experience and our evaluation of pending claims. Because our evaluations are based on historical experience and conditions at the time our financial statements are prepared, actual results could differ from the reserves in our Consolidated Financial Statements.
|
•
|
Inventories.
Inventories are stated at the lower of cost or market. Cost is determined using the last-in, first-out method (LIFO), which generally matches current costs of inventory sold with current revenues, for substantially all inventories. Reserves are also established to adjust inventories that are off-quality, aged or obsolete to their estimated net realizable value. Additionally, rates of recoverability per unit of off-quality, aged or obsolete inventory are estimated based on historical rates of recoverability and other known conditions or circumstances that may affect future recoverability. Actual results could differ from assumptions used to value our inventory.
|
•
|
Goodwill.
Goodwill is tested annually for impairment during the fourth quarter or earlier if significant events or substantive changes in circumstances occur that may indicate that goodwill may net be recoverable. The goodwill impairment tests are based on determining the fair value of the specified reporting units based on management judgments and assumptions using the discounted cash flows. The valuation approaches are subject to key judgments and assumptions that are sensitive to change such as judgments and assumptions about sales growth rates, operating margins and the weighted average cost of capital (“WACC”). When developing these key judgments and assumptions, we consider economic, operational and market conditions that could impact the fair value of the reporting unit. However, estimates are inherently uncertain and represent only management’s reasonable expectations regarding future developments. These estimates and the judgments and assumptions upon which the estimates are based will, in all likelihood, differ in some respects from actual future results. Should a significant or prolonged deterioration in economic conditions occur key judgments and assumptions could be impacted.
|
•
|
Contingent Consideration.
Contingent consideration liabilities represent future amounts we may be required to pay in conjunction with various business combinations. The ultimate amount of future payments is based on sales levels for one contingent liability and incremental gross margin growth related to another contingent liability. We estimate the fair value of the contingent consideration liability related to sales levels by forecasting estimated cash payments based on projected sales and discounting the cash payment to its present value using a risk-adjusted rate of return. We estimate the fair value of the contingent consideration liability associated with incremental gross margin growth by employing Monte Carlo simulations to estimate the volatility and systematic relative risk of gross margin levels and discounting the associated cash payment amounts to their present values using a credit-risk-adjusted interest rate. We evaluate our estimates of the fair value of contingent consideration liabilities on a periodic basis. Any changes in the fair value of contingent consideration liabilities are recorded through earnings. The total estimated fair value of contingent consideration liabilities was $2.8 million and $1.9 million at December 28, 2013 and December 29, 2012, respectively, and was included in accrued expenses and other liabilities in our consolidated balance sheets.
|
•
|
Self-insured accruals
. We estimate costs required to settle claims related to our self-insured medical, dental and workers' compensation plans. These estimates include costs to settle known claims, as well as incurred and unreported claims. The estimated costs of known and unreported claims are based on historical experience. Actual results could differ from assumptions used to estimate these accruals.
|
•
|
Income taxes.
The Company’s effective tax rate is based on its income, statutory tax rates and tax planning opportunities available in the jurisdictions in which it operates. Tax laws are complex and subject to different interpretations by the taxpayer and respective governmental taxing authorities. Deferred tax assets represent amounts available to reduce income taxes payable on taxable income in a future period. The Company evaluates the recoverability of these future tax benefits by assessing the adequacy of future expected taxable income from all sources, including reversal of taxable temporary differences, forecasted operating earnings and available tax planning strategies. These sources of income inherently rely on estimates, including business forecasts and other projections of financial results over an extended period of time. In the event that the Company is not able to realize all or a portion of its deferred tax assets in the future, a valuation allowance is provided. The Company would recognize such amounts through a charge to income in the period in which that determination is made or when tax law changes are enacted. The Company had valuation allowances of $3.7 million at December 28, 2013 and $4.9 million at December 29, 2012. For further information regarding the Company’s valuation allowances, see Note 13 to the consolidated financial statements.
|
•
|
Loss contingencies.
We routinely assess our exposure related to legal matters, environmental matters, product liabilities or any other claims against our assets that may arise in the normal course of business. If we determine that it is probable a loss has been incurred, the amount of the loss, or an amount within the range of loss, that can be reasonably estimated will be recorded.
|
Item 7A.
|
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK (Dollars in thousands)
|
Item 8.
|
FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
|
Item 9.
|
CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
|
(i)
|
The application of accounting principles to a specific transaction, either completed or proposed;
|
(ii)
|
The type of audit opinion that might be rendered on the Registrant's financial statements, and none of the following was provided to the Registrant:
|
(a)
|
a written report; or (b) oral advice that Dixon Hughes Goodman concluded was an important factor considered by the Registrant in reaching a decision as to an accounting, auditing or financial reporting issue; or
|
(iii)
|
Any matter that was subject of a disagreement, as that term is defined in Item 304(a)(1)(iv) of Regulation S-K, or a reportable event, as described in Item 304(a)(1)(v) of Regulation S-K.
|
Item 9A.
|
CONTROLS AND PROCEDURES
|
Item 9B.
|
OTHER INFORMATION
|
Item 10.
|
DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
|
Item 11.
|
EXECUTIVE COMPENSATION
|
Item 12.
|
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS
|
|
(a)
|
|
(b)
|
|
(c)
|
||||
Plan Category
|
Number of securities to be issued upon exercise of the outstanding options, warrants and rights
|
|
Weighted-average exercise price of outstanding options, warrants and rights
|
|
Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a)
|
||||
Equity Compensation Plans approved by security holders
|
759,995
|
|
(1)
|
$
|
10.64
|
|
(2)
|
622,819
|
|
(1)
|
Does not include 525,799 shares issued but unvested Common Stock pursuant to restricted stock grants under our 2006 Stock Awards Plan, with a weighted-average grant date value of $6.64 per share.
|
(2)
|
Includes the aggregate weighted-average of (i) the exercise price per share for outstanding options to purchase 555,105 shares of Common Stock under our 2000 Stock Incentive Plan and 105,250 shares of Common Stock under our 2006 Stock Awards Plan and (ii) the price per share of the Common Stock on the grant date for each of 99,640 Performance Units issued under the Directors' Stock Plan (each unit equivalent to one share of Common Stock).
|
Item 13.
|
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE
|
Item 14.
|
PRINCIPAL ACCOUNTING FEES AND SERVICES
|
Item 15.
|
EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.
|
(a)
|
(1) The response to this portion of Item 15 is submitted as a separate section of this report.
|
(b)
|
Exhibits - The response to this portion of Item 15 is submitted as a separate section of this report. See Item 15(a) (3) above.
|
Date: March 12, 2014
|
|
The Dixie Group, Inc.
|
|
|
|
|
|
/s/ DANIEL K. FRIERSON
|
|
|
By: Daniel K. Frierson
|
|
|
Chairman of the Board and Chief Executive Officer
|
Signature
|
|
Capacity
|
|
Date
|
|
|
|
|
|
/s/ DANIEL K. FRIERSON
|
|
Chairman of the Board, Director and Chief Executive Officer
|
|
March 12, 2014
|
Daniel K. Frierson
|
|
|
|
|
|
|
|
|
|
/s/ JON A. FAULKNER
|
|
Vice President, Chief Financial Officer
|
|
March 12, 2014
|
Jon A. Faulkner
|
|
|
|
|
|
|
|
|
|
/s/ D. KENNEDY FRIERSON, JR.
|
|
Vice President, Chief Operating Officer and Director
|
|
March 12, 2014
|
D. Kennedy Frierson, Jr.
|
|
|
|
|
|
|
|
|
|
/s/ D. EUGENE LASATER
|
|
Controller
|
|
March 12, 2014
|
D. Eugene Lasater
|
|
|
|
|
|
|
|
|
|
/s/ CHARLES E. BROCK
|
|
Director
|
|
March 12, 2014
|
Charles E. Brock
|
|
|
|
|
|
|
|
|
|
/s/ J. DON BROCK
|
|
Director
|
|
March 12, 2014
|
J. Don Brock
|
|
|
|
|
|
|
|
|
|
/s/ WALTER W. HUBBARD
|
|
Director
|
|
March 12, 2014
|
Walter W. Hubbard
|
|
|
|
|
|
|
|
|
|
/s/ LOWRY F. KLINE
|
|
Director
|
|
March 12, 2014
|
Lowry F. Kline
|
|
|
|
|
|
|
|
|
|
/s/ HILDA S. MURRAY
|
|
Director
|
|
March 12, 2014
|
Hilda S. Murray
|
|
|
|
|
|
|
|
|
|
/s/ JOHN W. MURREY, III
|
|
Director
|
|
March 12, 2014
|
John W. Murrey, III
|
|
|
|
|
|
|
|
|
|
/s/ MICHAEL L. OWENS
|
|
Director
|
|
March 12, 2014
|
Michael L. Owens
|
|
|
|
|
Table of Contents
|
Page
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year Ended
|
||||||||||
|
December 28,
2013 |
|
December 29,
2012 |
|
December 31,
2011 |
||||||
NET SALES
|
$
|
345,066
|
|
|
$
|
266,372
|
|
|
$
|
270,110
|
|
Cost of sales
|
259,427
|
|
|
201,000
|
|
|
204,604
|
|
|||
GROSS PROFIT
|
85,639
|
|
|
65,372
|
|
|
65,506
|
|
|||
|
|
|
|
|
|
||||||
Selling and administrative expenses
|
76,554
|
|
|
63,489
|
|
|
60,667
|
|
|||
Other operating (income) expense, net
|
494
|
|
|
68
|
|
|
(266
|
)
|
|||
Facility consolidation and severance expenses, net
|
—
|
|
|
—
|
|
|
(563
|
)
|
|||
OPERATING INCOME
|
8,591
|
|
|
1,815
|
|
|
5,668
|
|
|||
|
|
|
|
|
|
||||||
Interest expense
|
3,756
|
|
|
3,146
|
|
|
3,470
|
|
|||
Other (income) expense, net
|
26
|
|
|
(277
|
)
|
|
(75
|
)
|
|||
Refinancing expenses
|
94
|
|
|
—
|
|
|
317
|
|
|||
INCOME (LOSS) FROM CONTINUING OPERATIONS BEFORE TAXES
|
4,715
|
|
|
(1,054
|
)
|
|
1,956
|
|
|||
Income tax provision (benefit)
|
(643
|
)
|
|
(401
|
)
|
|
684
|
|
|||
INCOME (LOSS) FROM CONTINUING OPERATIONS
|
5,358
|
|
|
(653
|
)
|
|
1,272
|
|
|||
Loss from discontinued operations, net of tax
|
(68
|
)
|
|
(274
|
)
|
|
(286
|
)
|
|||
NET INCOME (LOSS)
|
$
|
5,290
|
|
|
$
|
(927
|
)
|
|
$
|
986
|
|
|
|
|
|
|
|
||||||
BASIC EARNINGS (LOSS) PER SHARE:
|
|
|
|
|
|
||||||
Continuing operations
|
$
|
0.40
|
|
|
$
|
(0.05
|
)
|
|
$
|
0.10
|
|
Discontinued operations
|
(0.01
|
)
|
|
(0.02
|
)
|
|
(0.02
|
)
|
|||
Net income (loss)
|
$
|
0.39
|
|
|
$
|
(0.07
|
)
|
|
$
|
0.08
|
|
|
|
|
|
|
|
||||||
BASIC SHARES OUTSTANDING
|
12,737
|
|
|
12,638
|
|
|
12,585
|
|
|||
|
|
|
|
|
|
||||||
DILUTED EARNINGS (LOSS) PER SHARE:
|
|
|
|
|
|
||||||
Continuing operations
|
$
|
0.40
|
|
|
$
|
(0.05
|
)
|
|
$
|
0.10
|
|
Discontinued operations
|
(0.01
|
)
|
|
(0.02
|
)
|
|
(0.02
|
)
|
|||
Net income (loss)
|
$
|
0.39
|
|
|
$
|
(0.07
|
)
|
|
$
|
0.08
|
|
|
|
|
|
|
|
||||||
DILUTED SHARES OUTSTANDING
|
12,852
|
|
|
12,638
|
|
|
12,623
|
|
|||
|
|
|
|
|
|
||||||
DIVIDENDS PER SHARE:
|
|
|
|
|
|
||||||
Common Stock
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Class B Common Stock
|
—
|
|
|
—
|
|
|
—
|
|
|
Year Ended
|
||||||||||
|
December 28,
2013 |
|
December 29,
2012 |
|
December 31,
2011 |
||||||
CASH FLOWS FROM OPERATING ACTIVITIES
|
|
|
|
|
|
|
|
|
|||
Income (loss) from continuing operations
|
$
|
5,358
|
|
|
$
|
(653
|
)
|
|
$
|
1,272
|
|
Loss from discontinued operations
|
(68
|
)
|
|
(274
|
)
|
|
(286
|
)
|
|||
Net income (loss)
|
5,290
|
|
|
(927
|
)
|
|
986
|
|
|||
|
|
|
|
|
|
||||||
Adjustments to reconcile net income (loss) to net cash (used in) provided by operating activities, net of acquisitions:
|
|
|
|
|
|
||||||
Depreciation and amortization
|
10,262
|
|
|
9,396
|
|
|
9,649
|
|
|||
Provision (benefit) for deferred income taxes
|
(1,037
|
)
|
|
(643
|
)
|
|
(254
|
)
|
|||
Net (gain) loss on property, plant and equipment disposals
|
195
|
|
|
(186
|
)
|
|
37
|
|
|||
Stock-based compensation expense
|
847
|
|
|
937
|
|
|
663
|
|
|||
Excess tax benefits from stock-based compensation
|
(151
|
)
|
|
—
|
|
|
—
|
|
|||
Write-off of deferred financing costs
|
94
|
|
|
—
|
|
|
92
|
|
|||
Changes in operating assets and liabilities:
|
|
|
|
|
|
||||||
Receivables
|
(11,479
|
)
|
|
(3,296
|
)
|
|
2,204
|
|
|||
Inventories
|
(19,283
|
)
|
|
(8,115
|
)
|
|
(5,650
|
)
|
|||
Other current assets
|
(878
|
)
|
|
(2,506
|
)
|
|
(313
|
)
|
|||
Accounts payable and accrued expenses
|
11,642
|
|
|
1,455
|
|
|
(1,724
|
)
|
|||
Other operating assets and liabilities
|
(1,423
|
)
|
|
(827
|
)
|
|
(636
|
)
|
|||
NET CASH (USED IN) PROVIDED BY OPERATING ACTIVITIES
|
(5,921
|
)
|
|
(4,712
|
)
|
|
5,054
|
|
|||
|
|
|
|
|
|
||||||
CASH FLOWS FROM INVESTING ACTIVITIES
|
|
|
|
|
|
||||||
Net proceeds from sales of property, plant and equipment
|
48
|
|
|
187
|
|
|
5
|
|
|||
Purchase of property, plant and equipment
|
(11,438
|
)
|
|
(3,386
|
)
|
|
(6,740
|
)
|
|||
Net cash paid in business acquisitions
|
(2,170
|
)
|
|
(1,197
|
)
|
|
—
|
|
|||
NET CASH USED IN INVESTING ACTIVITIES
|
(13,560
|
)
|
|
(4,396
|
)
|
|
(6,735
|
)
|
|||
|
|
|
|
|
|
||||||
CASH FLOWS FROM FINANCING ACTIVITIES
|
|
|
|
|
|
||||||
Net payments on previous credit line
|
—
|
|
|
—
|
|
|
(30,503
|
)
|
|||
Payments on previous term loan
|
—
|
|
|
—
|
|
|
(11,324
|
)
|
|||
Net borrowings on current credit line
|
25,152
|
|
|
7,316
|
|
|
52,806
|
|
|||
Borrowings on current mortgage note payable
|
—
|
|
|
—
|
|
|
11,063
|
|
|||
Payments on current mortgage note payable
|
(10,141
|
)
|
|
(737
|
)
|
|
(185
|
)
|
|||
Payments on previous mortgage note payable
|
—
|
|
|
—
|
|
|
(5,736
|
)
|
|||
Payments on note payable related to acquisition
|
(852
|
)
|
|
(161
|
)
|
|
—
|
|
|||
Borrowings on equipment financing
|
4,312
|
|
|
5,003
|
|
|
1,794
|
|
|||
Payments on equipment financing
|
(1,212
|
)
|
|
(1,293
|
)
|
|
(2,660
|
)
|
|||
Payments on capitalized leases
|
(688
|
)
|
|
(204
|
)
|
|
(360
|
)
|
|||
Borrowings on notes payable
|
2,429
|
|
|
795
|
|
|
733
|
|
|||
Payments on notes payable
|
(851
|
)
|
|
(746
|
)
|
|
(609
|
)
|
|||
Payments on subordinated indebtedness
|
—
|
|
|
—
|
|
|
(12,162
|
)
|
|||
Change in outstanding checks in excess of cash
|
1,350
|
|
|
(205
|
)
|
|
366
|
|
|||
Proceeds from stock option exercises
|
190
|
|
|
—
|
|
|
—
|
|
|||
Repurchases of Common Stock
|
(207
|
)
|
|
(199
|
)
|
|
(131
|
)
|
|||
Excess tax benefits from stock-based compensation
|
151
|
|
|
—
|
|
|
—
|
|
|||
Payments for debt issuance costs
|
(388
|
)
|
|
(268
|
)
|
|
(1,357
|
)
|
|||
NET CASH PROVIDED BY FINANCING ACTIVITIES
|
19,245
|
|
|
9,301
|
|
|
1,735
|
|
|||
|
|
|
|
|
|
||||||
(DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS
|
(236
|
)
|
|
193
|
|
|
54
|
|
|||
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD
|
491
|
|
|
298
|
|
|
244
|
|
|||
CASH AND CASH EQUIVALENTS AT END OF PERIOD
|
$
|
255
|
|
|
$
|
491
|
|
|
$
|
298
|
|
|
|
|
|
|
|
||||||
|
|
|
|
|
|
SUPPLEMENTAL SCHEDULE OF NON-CASH INVESTING AND FINANCING ACTIVITIES:
|
|
|
|
|
|
||||||
Equipment purchased under capital leases
|
$
|
1,865
|
|
|
$
|
666
|
|
|
$
|
14
|
|
Fair value of assets acquired in acquisitions
|
8,062
|
|
|
9,184
|
|
|
—
|
|
|||
Liabilities assumed in acquisitions
|
(836
|
)
|
|
(42
|
)
|
|
—
|
|
|||
Note payable related to acquisition
|
(3,749
|
)
|
|
(5,500
|
)
|
|
—
|
|
|||
Accrued consideration related to acquisition
|
(1,307
|
)
|
|
(2,445
|
)
|
|
—
|
|
|
Common Stock
|
|
Class B Common Stock
|
|
Additional Paid-In Capital
|
|
Accumulated Deficit
|
|
Accumulated Other Comprehensive Income (Loss)
|
|
Total Stockholders' Equity
|
||||||||||||
Balance at December 25, 2010
|
$
|
35,926
|
|
|
$
|
2,603
|
|
|
$
|
135,831
|
|
|
$
|
(111,899
|
)
|
|
$
|
(31
|
)
|
|
$
|
62,430
|
|
Repurchases of Common Stock - 29,069 shares
|
(87
|
)
|
|
—
|
|
|
(44
|
)
|
|
—
|
|
|
—
|
|
|
(131
|
)
|
||||||
Restricted stock grants issued - 91,340 shares
|
211
|
|
|
63
|
|
|
(274
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Class B converted into Common Stock - 6,197 shares
|
18
|
|
|
(18
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Stock-based compensation expense
|
—
|
|
|
—
|
|
|
663
|
|
|
—
|
|
|
—
|
|
|
663
|
|
||||||
Reclassification of deferred compensation on Directors' stock
|
—
|
|
|
—
|
|
|
494
|
|
|
—
|
|
|
—
|
|
|
494
|
|
||||||
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
986
|
|
|
—
|
|
|
986
|
|
||||||
Other comprehensive loss
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(57
|
)
|
|
(57
|
)
|
||||||
Balance at December 31, 2011
|
36,068
|
|
|
2,648
|
|
|
136,670
|
|
|
(110,913
|
)
|
|
(88
|
)
|
|
64,385
|
|
||||||
Repurchases of Common Stock - 50,444 shares
|
(151
|
)
|
|
—
|
|
|
(48
|
)
|
|
—
|
|
|
—
|
|
|
(199
|
)
|
||||||
Restricted stock grants issued - 289,233 shares
|
609
|
|
|
258
|
|
|
(867
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Restricted stock grants forfeited - 17,229 shares
|
(52
|
)
|
|
—
|
|
|
52
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Class B converted into Common Stock - 15,925 shares
|
48
|
|
|
(48
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Stock-based compensation expense
|
—
|
|
|
—
|
|
|
937
|
|
|
—
|
|
|
—
|
|
|
937
|
|
||||||
Net loss
|
—
|
|
|
—
|
|
|
—
|
|
|
(927
|
)
|
|
—
|
|
|
(927
|
)
|
||||||
Other comprehensive loss
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(150
|
)
|
|
(150
|
)
|
||||||
Balance at December 29, 2012
|
36,522
|
|
|
2,858
|
|
|
136,744
|
|
|
(111,840
|
)
|
|
(238
|
)
|
|
64,046
|
|
||||||
Common Stock issued - 50,464 shares
|
151
|
|
|
—
|
|
|
39
|
|
|
—
|
|
|
—
|
|
|
190
|
|
||||||
Repurchases of Common Stock - 38,815 shares
|
(116
|
)
|
|
—
|
|
|
(91
|
)
|
|
—
|
|
|
—
|
|
|
(207
|
)
|
||||||
Restricted stock grants issued - 173,249 shares
|
346
|
|
|
174
|
|
|
(520
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Class B converted into Common Stock - 140,477 shares
|
421
|
|
|
(421
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Stock-based compensation expense
|
—
|
|
|
—
|
|
|
847
|
|
|
—
|
|
|
—
|
|
|
847
|
|
||||||
Excess tax benefits from stock-based compensation
|
—
|
|
|
—
|
|
|
151
|
|
|
—
|
|
|
—
|
|
|
151
|
|
||||||
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
5,290
|
|
|
—
|
|
|
5,290
|
|
||||||
Other comprehensive income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
454
|
|
|
454
|
|
||||||
Balance at December 28, 2013
|
$
|
37,324
|
|
|
$
|
2,611
|
|
|
$
|
137,170
|
|
|
$
|
(106,550
|
)
|
|
$
|
216
|
|
|
$
|
70,771
|
|
|
2013
|
|
2012
|
||||
Customers, trade
|
$
|
41,898
|
|
|
$
|
31,043
|
|
Other receivables
|
2,306
|
|
|
1,642
|
|
||
Gross receivables
|
44,204
|
|
|
32,685
|
|
||
Less allowance for doubtful accounts
|
(141
|
)
|
|
(216
|
)
|
||
Net receivables
|
$
|
44,063
|
|
|
$
|
32,469
|
|
|
2013
|
|
2012
|
||||
Raw materials
|
$
|
31,864
|
|
|
$
|
23,002
|
|
Work-in-process
|
16,880
|
|
|
13,786
|
|
||
Finished goods
|
57,983
|
|
|
49,251
|
|
||
Supplies, repair parts and other
|
566
|
|
|
470
|
|
||
LIFO reserve
|
(13,626
|
)
|
|
(14,264
|
)
|
||
Total inventories
|
$
|
93,667
|
|
|
$
|
72,245
|
|
|
2013
|
|
2012
|
||||
Land and improvements
|
$
|
7,231
|
|
|
$
|
6,950
|
|
Buildings and improvement
|
50,627
|
|
|
50,293
|
|
||
Machinery and equipment
|
149,040
|
|
|
137,432
|
|
||
|
206,898
|
|
|
194,675
|
|
||
Accumulated depreciation
|
(132,413
|
)
|
|
(125,192
|
)
|
||
Property, plant and equipment, net
|
$
|
74,485
|
|
|
$
|
69,483
|
|
Cash paid
|
$
|
2,278
|
|
Seller-financed note
|
3,749
|
|
|
Contingent consideration
|
1,307
|
|
|
Total purchase price
|
$
|
7,334
|
|
Cash
|
$
|
108
|
|
Accounts receivable
|
115
|
|
|
Inventory
|
2,139
|
|
|
Other current assets
|
14
|
|
|
Property, plant and equipment
|
1,863
|
|
|
Definite-lived intangible assets
|
2,222
|
|
|
Goodwill
|
1,709
|
|
|
Accounts payable
|
(643
|
)
|
|
Accrued expenses
|
(193
|
)
|
|
Total purchase price
|
$
|
7,334
|
|
Cash paid
|
$
|
239
|
|
Seller-financed note
|
5,500
|
|
|
Below-market supply contract
|
823
|
|
|
Total purchase price
|
$
|
6,562
|
|
Property, plant and equipment
|
$
|
6,371
|
|
Inventory
|
173
|
|
|
Supplies
|
18
|
|
|
Purchase price
|
$
|
6,562
|
|
Cash paid
|
$
|
958
|
|
Deferred payments to seller
|
471
|
|
|
Contingent consideration
|
1,151
|
|
|
Total purchase price
|
$
|
2,580
|
|
Property, plant and equipment
|
$
|
590
|
|
Definite-lived intangible assets
|
352
|
|
|
Goodwill
|
1,680
|
|
|
Accrued payable
|
(42
|
)
|
|
Purchase price
|
$
|
2,580
|
|
|
Goodwill
|
|
Accumulated Impairment Losses
|
|
Net
|
||||||
Balance at December 31, 2011
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Additional goodwill recognized during the period (1)
|
1,680
|
|
|
—
|
|
|
1,680
|
|
|||
Impairment losses recognized during the period
|
—
|
|
|
—
|
|
|
—
|
|
|||
Other changes in the carrying amounts during the period
|
—
|
|
|
—
|
|
|
—
|
|
|||
Balance at December 29, 2012
|
1,680
|
|
|
—
|
|
|
1,680
|
|
|||
Additional goodwill recognized during the period (2)
|
1,709
|
|
|
—
|
|
|
1,709
|
|
|||
Impairment losses recognized during the period
|
—
|
|
|
—
|
|
|
—
|
|
|||
Other changes in the carrying amounts during the period
|
—
|
|
|
—
|
|
|
—
|
|
|||
Balance at December 28, 2013
|
$
|
3,389
|
|
|
$
|
—
|
|
|
$
|
3,389
|
|
|
2013
|
|
2012
|
||||||||||||||||||||
|
Gross
|
|
Accumulated Amortization
|
|
Net
|
|
Gross
|
|
Accumulated Amortization
|
|
Net
|
||||||||||||
Customer relationships
|
$
|
1,062
|
|
|
$
|
(40
|
)
|
|
$
|
1,022
|
|
|
$
|
208
|
|
|
$
|
—
|
|
|
$
|
208
|
|
Rug design coding
|
144
|
|
|
(14
|
)
|
|
130
|
|
|
144
|
|
|
—
|
|
|
144
|
|
||||||
Trade names
|
1,368
|
|
|
(34
|
)
|
|
1,334
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Total
|
$
|
2,574
|
|
|
$
|
(88
|
)
|
|
$
|
2,486
|
|
|
$
|
352
|
|
|
$
|
—
|
|
|
$
|
352
|
|
|
2013
|
|
2012
|
|
2011
|
||||||
Customer relationships
|
$
|
40
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Rug design coding
|
14
|
|
|
—
|
|
|
—
|
|
|||
Trade names
|
34
|
|
|
—
|
|
|
—
|
|
|||
Amortization expense
|
$
|
88
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Year
|
|
Amount
|
||
2014
|
|
$
|
146
|
|
2015
|
|
146
|
|
|
2016
|
|
146
|
|
|
2017
|
|
146
|
|
|
2018
|
|
146
|
|
|
Thereafter
|
|
1,756
|
|
|
2013
|
|
2012
|
||||
Compensation and benefits (1)
|
$
|
8,233
|
|
|
$
|
5,637
|
|
Provision for customer rebates, claims and allowances
|
6,202
|
|
|
4,389
|
|
||
Outstanding checks in excess of cash
|
3,873
|
|
|
2,523
|
|
||
Other
|
7,894
|
|
|
6,598
|
|
||
Total accrued expenses
|
$
|
26,202
|
|
|
$
|
19,147
|
|
(1)
|
Includes a liability related to the Company's self-insured Workers' Compensation program. This program is collateralized by letters of credit in the aggregate amount of
$1,717
.
|
|
2013
|
|
2012
|
||||
Warranty reserve at beginning of year
|
$
|
1,297
|
|
|
$
|
1,219
|
|
Warranty liabilities accrued
|
4,330
|
|
|
3,122
|
|
||
Warranty liabilities settled
|
(3,905
|
)
|
|
(3,118
|
)
|
||
Changes for pre-existing warranty liabilities
|
128
|
|
|
74
|
|
||
Warranty reserve at end of year
|
$
|
1,850
|
|
|
$
|
1,297
|
|
|
2013
|
|
2012
|
||||
Revolving credit facility
|
$
|
85,274
|
|
|
$
|
60,122
|
|
Mortgage note payable
|
—
|
|
|
10,141
|
|
||
Obligation to Development Authority of Gordon County
|
4,447
|
|
|
5,339
|
|
||
Note payable - Robertex acquisition
|
3,789
|
|
|
—
|
|
||
Equipment notes payable
|
7,987
|
|
|
5,071
|
|
||
Notes payable
|
2,210
|
|
|
632
|
|
||
Capital lease obligations
|
4,281
|
|
|
2,920
|
|
||
Total long-term debt
|
107,988
|
|
|
84,225
|
|
||
Less: current portion of long-term debt
|
(6,229
|
)
|
|
(4,059
|
)
|
||
Total long-term debt, less current portion
|
$
|
101,759
|
|
|
$
|
80,166
|
|
Instrument
|
Interest Rate
|
Term (Months)
|
Principal and Interest Payments
|
Frequency
|
Maturity Date
|
||||
Note Payable - Equipment
|
6.85
|
%
|
84
|
|
$
|
38
|
|
Monthly
|
May 1, 2014
|
Note Payable - Equipment
|
7.72
|
%
|
48
|
|
2
|
|
Monthly
|
June 1, 2014
|
|
Note Payable - Equipment
|
2.00
|
%
|
60
|
|
38
|
|
Monthly
|
August 1, 2016
|
|
Note Payable - Equipment
|
5.94
|
%
|
75
|
|
41
|
|
Monthly
|
February 1, 2019
|
|
Note Payable - Equipment
|
1.00
|
%
|
84
|
|
18
|
|
Monthly
|
June 14, 2020
|
|
Note Payable - Equipment
|
6.84
|
%
|
60
|
|
3
|
|
Monthly
|
July 1, 2018
|
|
Note Payable - Equipment
|
6.86
|
%
|
60
|
|
49
|
|
Monthly
|
October 1, 2018
|
Instrument
|
Interest Rate
|
Term (Months)
|
Principal and Interest Payments
|
Frequency
|
Maturity Date
|
||||
Capital Lease - Equipment
|
7.04
|
%
|
84
|
|
$
|
8
|
|
Monthly
|
December 1, 2015
|
Capital Lease - Equipment
|
7.40
|
%
|
48
|
|
4
|
|
Monthly
|
June 1, 2014
|
|
Capital Lease - Equipment
|
2.90
|
%
|
60
|
|
11
|
|
Monthly
|
August 1, 2017
|
|
Capital Lease - Equipment
|
4.76
|
%
|
72
|
|
32
|
|
Monthly
|
October 1, 2018
|
|
Capital Lease - Equipment
|
5.74
|
%
|
56
|
|
2
|
|
Monthly
|
October 1, 2017
|
|
Capital Lease - Equipment
|
5.90
|
%
|
60
|
|
7
|
|
Monthly
|
April 1, 2018
|
|
Capital Lease - Equipment
|
5.75
|
%
|
60
|
|
7
|
|
Monthly
|
July 1, 2018
|
|
Capital Lease - Equipment
|
4.88
|
%
|
48
|
|
16
|
|
Quarterly
|
April 1, 2017
|
|
Capital Lease - Equipment
|
7.04
|
%
|
60
|
|
8
|
|
Monthly
|
October 1, 2018
|
|
Capital Lease - Equipment
|
5.10
|
%
|
60
|
|
3
|
|
Monthly
|
November 1, 2018
|
|
Long-Term
Debt
|
|
Capital Leases
|
|
Total
|
||||||
(See Note 17)
|
|
||||||||||
2014
|
$
|
5,392
|
|
|
$
|
837
|
|
|
$
|
6,229
|
|
2015
|
3,835
|
|
|
877
|
|
|
4,712
|
|
|||
2016
|
3,842
|
|
|
801
|
|
|
4,643
|
|
|||
2017
|
3,182
|
|
|
761
|
|
|
3,943
|
|
|||
2018
|
87,053
|
|
|
1,005
|
|
|
88,058
|
|
|||
Thereafter
|
403
|
|
|
—
|
|
|
403
|
|
|||
Total
|
$
|
103,707
|
|
|
$
|
4,281
|
|
|
$
|
107,988
|
|
|
2013
|
|
2012
|
|
Fair Value Hierarchy Level
|
||||
Assets:
|
|
|
|
|
|
||||
Rabbi trust (1)
|
$
|
14,242
|
|
|
$
|
11,894
|
|
|
Level 2
|
Interest rate swaps (2)
|
556
|
|
|
—
|
|
|
Level 2
|
||
|
|
|
|
|
|
||||
Liabilities:
|
|
|
|
|
|
||||
Interest rate swaps (2)
|
$
|
813
|
|
|
$
|
1,086
|
|
|
Level 2
|
Deferred compensation plan (3)
|
13,210
|
|
|
11,066
|
|
|
Level 1
|
||
Contingent consideration (4)
|
2,751
|
|
|
1,928
|
|
|
Level 3
|
(1)
|
The Company maintains a rabbi trust that serves as an investment designed to offset its deferred compensation plan liability. The investment assets of the trust consist of life insurance policies for which the Company recognizes income or expense based upon changes in cash surrender value.
|
(2)
|
The fair value of the interest rate swaps was obtained from external sources. The interest rate swaps were valued using observable inputs (e.g., LIBOR yield curves, credit spreads). Valuations of interest rate swaps may fluctuate considerably from period-to-period due to volatility in underlying interest rates, which are driven by market conditions and the duration of the instrument. Credit adjustments could have a significant impact on the valuations due to changes in credit ratings of the Company or its counterparties.
|
(3)
|
Senior management and other highly compensated associates may defer a specified percentage of their compensation into a non-qualified deferred compensation plan. Changes in the value of the deferred compensation under this plan is recognized each period based on the fair value of the underlying measurement funds.
|
(4)
|
As a result of the Colormaster and Crown Rug acquisitions in 2012 and the Robertex acquisition in 2013, the Company recorded contingent consideration liabilities at fair value. These fair value measurements were based on calculations that utilize significant inputs not observable in the market including forecasted revenues, gross margins and discount rates and thus represent Level 3 measurements.
|
|
2013
|
|
2012
|
||||
Beginning balance
|
$
|
1,928
|
|
|
$
|
—
|
|
Contingent consideration liabilities recorded at fair value at acquisition
|
1,307
|
|
|
1,974
|
|
||
Fair value adjustments
|
(23
|
)
|
|
—
|
|
||
Settlements
|
(461
|
)
|
|
(46
|
)
|
||
Ending balance
|
$
|
2,751
|
|
|
$
|
1,928
|
|
|
2013
|
|
2012
|
||||||||||||
|
Carrying
|
|
Fair
|
|
Carrying
|
|
Fair
|
||||||||
|
Amount
|
|
Value
|
|
Amount
|
|
Value
|
||||||||
Financial assets:
|
|
|
|
|
|
|
|
||||||||
Cash and cash equivalents
|
$
|
255
|
|
|
$
|
255
|
|
|
$
|
491
|
|
|
$
|
491
|
|
Notes receivable, including current portion
|
282
|
|
|
282
|
|
|
307
|
|
|
307
|
|
||||
Interest rate swaps
|
556
|
|
|
556
|
|
|
—
|
|
|
—
|
|
||||
Financial Liabilities:
|
|
|
|
|
|
|
|
||||||||
Long-term debt and capital leases, including current portion
|
107,988
|
|
|
101,752
|
|
|
84,225
|
|
|
80,174
|
|
||||
Interest rate swaps
|
813
|
|
|
813
|
|
|
1,086
|
|
|
1,086
|
|
Type
|
Notional Amount
|
|
Effective Date
|
Fixed Rate
|
Variable Rate
|
||
Interest rate swap
|
$
|
10,000
|
|
|
October 3, 2011 through September 1, 2016
|
1.330%
|
1 Month LIBOR
|
Interest rate swap
|
$
|
10,000
|
|
|
March 1, 2013 through September 1, 2016
|
1.620%
|
1 Month LIBOR
|
Interest rate swap
|
$
|
5,000
|
|
|
June 1, 2013 through September 1, 2016
|
1.700%
|
1 Month LIBOR
|
Interest rate swap
|
$
|
25,000
|
|
|
September 1, 2016 through September 1, 2021
|
3.105%
|
1 Month LIBOR
|
Interest rate swap
|
$
|
25,000
|
|
|
September 1, 2015 through September 1, 2021
|
3.304%
|
1 Month LIBOR
|
|
Location on Consolidated Balance Sheets
|
Fair Value
|
||||||
|
2013
|
|
2012
|
|||||
Asset Derivatives:
|
|
|
|
|
||||
Derivatives designated as hedging instruments:
|
|
|
|
|
||||
Interest rate swaps
|
Other Assets
|
$
|
556
|
|
|
$
|
—
|
|
|
|
|
|
|
||||
Derivatives not designated as hedging instruments:
|
|
|
|
|
||||
Interest rate swaptions
|
Other Assets
|
—
|
|
|
—
|
|
||
Total Asset Derivatives
|
|
$
|
556
|
|
|
$
|
—
|
|
|
|
|
|
|
||||
Liability Derivatives:
|
|
|
|
|
||||
Derivatives designated as hedging instruments:
|
|
|
|
|
||||
Interest rate swaps, current portion
|
Accrued Expenses
|
$
|
328
|
|
|
$
|
439
|
|
Interest rate swaps, long term portion
|
Other Long-Term Liabilities
|
485
|
|
|
647
|
|
||
Total Liability Derivatives
|
|
$
|
813
|
|
|
$
|
1,086
|
|
|
Amount of Gain or (Loss) Recognized in AOCIL on the effective portion of the Derivative
|
||||||||||
|
2013
|
|
2012
|
|
2011
|
||||||
Derivatives designated as hedging instruments:
|
|
|
|
|
|
||||||
Cash flow hedges - interest rate swaps
|
$
|
381
|
|
|
$
|
(767
|
)
|
|
$
|
(665
|
)
|
|
|
|
|
|
|
||||||
|
Amount of Gain or (Loss) Reclassified from AOCIL on the effective portion into Income (1)(2)
|
||||||||||
|
2013
|
|
2012
|
|
2011
|
||||||
Derivatives designated as hedging instruments:
|
|
|
|
|
|
||||||
Cash flow hedges - interest rate swaps
|
$
|
(442
|
)
|
|
$
|
(625
|
)
|
|
$
|
(583
|
)
|
|
|
|
|
|
|
||||||
|
Amount of Gain or (Loss) Recognized on the ineffective portion in Income on Derivative (3)
|
||||||||||
|
2013
|
|
2012
|
|
2011
|
||||||
Derivatives designated as hedging instruments:
|
|
|
|
|
|
||||||
Cash flow hedges - interest rate swaps
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
Amount of Gain or (Loss) Recognized in Income on Derivative (4)
|
||||||||||
|
2013
|
|
2012
|
|
2011
|
||||||
Derivatives not designated as hedging instruments:
|
|
|
|
|
|
||||||
Interest rate swaptions
|
$
|
—
|
|
|
$
|
87
|
|
|
$
|
43
|
|
(1)
|
The amount of gain (loss) reclassified from AOCIL is included in interest expense on the Company's Consolidated Statements of Operations.
|
(2)
|
The amount of loss expected to be reclassified from AOCIL into earnings during the next 12 months subsequent to fiscal 2013 is
$328
.
|
(3)
|
The amount of gain (loss) recognized in income on the ineffective portion of interest rate swaps is included in other (income) expense, net on the Company's Consolidated Statements of Operations.
|
(4)
|
The amount of gain (loss) recognized in income for derivatives not designated as hedging instruments is included in other (income) expense, net on the Company's Consolidated Statements of Operations.
|
Pension Fund
|
EIN/Pension Plan Number
|
Pension Protection Act Zone Status
|
FIP/RP Status Pending/Implemented (1)
|
Contributions (2)
|
Surcharge Imposed (1)
|
Expiration Date of Collective-Bargaining Agreement
|
|||||||||
2013
|
2012
|
2013
|
|
2012
|
|
2011
|
|
||||||||
The Pension Plan of the National Retirement Fund
|
13-6130178 - 001
|
Red
|
Red
|
Implemented
|
$
|
279
|
|
$
|
256
|
|
$
|
292
|
|
Yes
|
6/8/2014
|
|
2013
|
|
2012
|
||||
Change in benefit obligation:
|
|
|
|
||||
Benefit obligation at beginning of year
|
$
|
694
|
|
|
$
|
733
|
|
Service cost
|
7
|
|
|
7
|
|
||
Interest cost
|
23
|
|
|
26
|
|
||
Participant contributions
|
15
|
|
|
15
|
|
||
Actuarial gain
|
(137
|
)
|
|
(80
|
)
|
||
Benefits paid
|
(5
|
)
|
|
(11
|
)
|
||
Medicare Part D subsidy
|
1
|
|
|
4
|
|
||
Benefit obligation at end of year
|
598
|
|
|
694
|
|
||
|
|
|
|
||||
Change in plan assets:
|
|
|
|
||||
Fair value of plan assets at beginning of year
|
—
|
|
|
—
|
|
||
Employer contributions
|
(11
|
)
|
|
(8
|
)
|
||
Participant contributions
|
15
|
|
|
15
|
|
||
Benefits paid
|
(5
|
)
|
|
(11
|
)
|
||
Medicare Part D subsidy
|
1
|
|
|
4
|
|
||
Fair value of plan assets at end of year
|
—
|
|
|
—
|
|
||
Unfunded amount
|
$
|
(598
|
)
|
|
$
|
(694
|
)
|
|
2013
|
|
2012
|
||||
Accrued expenses
|
$
|
18
|
|
|
$
|
17
|
|
Other long-term liabilities
|
580
|
|
|
677
|
|
||
Total liability
|
$
|
598
|
|
|
$
|
694
|
|
|
2013
|
|
2012
|
||
Weighted-average assumptions as of year-end:
|
|
|
|
||
Discount rate (benefit obligations)
|
3.16
|
%
|
|
2.81
|
%
|
|
2013
|
|
2012
|
||
Health care cost trend assumed for next year
|
8.00
|
%
|
|
9.00
|
%
|
Rate to which the cost trend is assumed to decline
|
5.00
|
%
|
|
5.00
|
%
|
Year that the rate reaches the ultimate trend rate
|
2017
|
|
|
2017
|
|
|
2013
|
|
2012
|
||||||||||||
|
1% Increase
|
|
1% Decrease
|
|
1% Increase
|
|
1% Decrease
|
||||||||
Accumulated postretirement benefit obligation
|
$
|
4
|
|
|
$
|
(3
|
)
|
|
$
|
3
|
|
|
$
|
(3
|
)
|
|
2013
|
|
2012
|
|
2011
|
||||||
Service cost
|
$
|
7
|
|
|
$
|
7
|
|
|
$
|
7
|
|
Interest cost
|
23
|
|
|
26
|
|
|
33
|
|
|||
Amortization of prior service credits
|
(88
|
)
|
|
(88
|
)
|
|
(88
|
)
|
|||
Recognized net actuarial gains
|
(35
|
)
|
|
(45
|
)
|
|
(29
|
)
|
|||
Settlement gain
|
(105
|
)
|
|
(48
|
)
|
|
(12
|
)
|
|||
Net periodic benefit cost (credit)
|
$
|
(198
|
)
|
|
$
|
(148
|
)
|
|
$
|
(89
|
)
|
|
Postretirement Benefit Plans
|
||||||
|
Balance at 2013
|
|
2014 Expected Amortization
|
||||
Prior service credits
|
$
|
(190
|
)
|
|
$
|
(88
|
)
|
Unrecognized actuarial gains
|
(397
|
)
|
|
(39
|
)
|
||
Totals
|
$
|
(587
|
)
|
|
$
|
(127
|
)
|
|
2013
|
|
2012
|
|
2011
|
||||||
Current
|
|
|
|
|
|
||||||
Federal
|
$
|
216
|
|
|
$
|
154
|
|
|
$
|
725
|
|
State
|
178
|
|
|
88
|
|
|
213
|
|
|||
Total current
|
394
|
|
|
242
|
|
|
938
|
|
|||
|
|
|
|
|
|
||||||
Deferred
|
|
|
|
|
|
||||||
Federal
|
(955
|
)
|
|
(592
|
)
|
|
(234
|
)
|
|||
State
|
(82
|
)
|
|
(51
|
)
|
|
(20
|
)
|
|||
Total deferred
|
(1,037
|
)
|
|
(643
|
)
|
|
(254
|
)
|
|||
Income tax provision (benefit)
|
$
|
(643
|
)
|
|
$
|
(401
|
)
|
|
$
|
684
|
|
|
2013
|
|
2012
|
|
2011
|
||||||
Federal statutory rate
|
35
|
%
|
|
35
|
%
|
|
35
|
%
|
|||
Statutory rate applied to income (loss) from continuing operations before taxes
|
$
|
1,650
|
|
|
$
|
(369
|
)
|
|
$
|
684
|
|
Plus state income taxes, net of federal tax effect
|
96
|
|
|
24
|
|
|
130
|
|
|||
Total statutory provision (benefit)
|
1,746
|
|
|
(345
|
)
|
|
814
|
|
|||
Increase (decrease) attributable to:
|
|
|
|
|
|
||||||
Nondeductible meals and entertainment
|
112
|
|
|
88
|
|
|
83
|
|
|||
Domestic production activities deduction
|
(208
|
)
|
|
—
|
|
|
—
|
|
|||
Federal tax credits
|
(1,326
|
)
|
|
—
|
|
|
(179
|
)
|
|||
Goodwill
|
283
|
|
|
—
|
|
|
—
|
|
|||
Change in valuation allowance
|
(1,190
|
)
|
|
—
|
|
|
—
|
|
|||
Non-taxable insurance proceeds
|
(71
|
)
|
|
—
|
|
|
(174
|
)
|
|||
Stock-based compensation
|
—
|
|
|
14
|
|
|
61
|
|
|||
Other items
|
11
|
|
|
(158
|
)
|
|
79
|
|
|||
Total tax provision (benefit)
|
$
|
(643
|
)
|
|
$
|
(401
|
)
|
|
$
|
684
|
|
|
2013
|
|
2012
|
||||
Deferred tax assets:
|
|
|
|
||||
Inventories
|
$
|
2,226
|
|
|
$
|
2,324
|
|
Retirement benefits
|
3,408
|
|
|
3,464
|
|
||
Federal/State net operating losses
|
2,936
|
|
|
3,221
|
|
||
Federal/State tax credit carryforwards
|
1,740
|
|
|
2,111
|
|
||
Allowances for bad debts, claims and discounts
|
2,527
|
|
|
1,845
|
|
||
Other
|
5,279
|
|
|
5,497
|
|
||
Total deferred tax assets
|
18,116
|
|
|
18,462
|
|
||
Valuation allowance
|
(3,748
|
)
|
|
(4,938
|
)
|
||
Net deferred tax assets
|
14,368
|
|
|
13,524
|
|
||
|
|
|
|
||||
Deferred tax liabilities:
|
|
|
|
||||
Property, plant and equipment
|
11,818
|
|
|
11,733
|
|
||
Total deferred tax liabilities
|
11,818
|
|
|
11,733
|
|
||
|
|
|
|
||||
Net deferred tax asset
|
$
|
2,550
|
|
|
$
|
1,791
|
|
Balance sheet classification:
|
2013
|
|
2012
|
||||
Current deferred tax assets
|
$
|
6,622
|
|
|
$
|
5,615
|
|
Non-current deferred tax liabilities
|
4,072
|
|
|
3,824
|
|
||
Net deferred tax asset
|
$
|
2,550
|
|
|
$
|
1,791
|
|
|
2013
|
|
2012
|
|
2011
|
||||||
Balance at beginning of year
|
$
|
5
|
|
|
$
|
16
|
|
|
$
|
47
|
|
Additions based on tax positions taken during a prior period
|
250
|
|
|
—
|
|
|
—
|
|
|||
Additions based on tax positions taken during a current period
|
41
|
|
|
—
|
|
|
—
|
|
|||
Reductions related to settlement of tax matters
|
—
|
|
|
—
|
|
|
(17
|
)
|
|||
Reductions related to a lapse of applicable statute of limitations
|
(5
|
)
|
|
(11
|
)
|
|
(14
|
)
|
|||
Balance at end of year
|
$
|
291
|
|
|
$
|
5
|
|
|
$
|
16
|
|
|
2013
|
|
2012
|
|
2011
|
||||||
Basic earnings (loss) per share:
|
|
|
|
|
|
||||||
Income (loss) from continuing operations
|
$
|
5,358
|
|
|
$
|
(653
|
)
|
|
$
|
1,272
|
|
Less: Allocation of earnings to participating securities
|
(212
|
)
|
|
—
|
|
|
(31
|
)
|
|||
Income (loss) from continuing operations available to common shareholders - basic
|
$
|
5,146
|
|
|
$
|
(653
|
)
|
|
$
|
1,241
|
|
Basic weighted-average shares outstanding (1)
|
12,737
|
|
|
12,638
|
|
|
12,585
|
|
|||
Basic earnings (loss) per share - continuing operations
|
$
|
0.40
|
|
|
$
|
(0.05
|
)
|
|
$
|
0.10
|
|
|
|
|
|
|
|
||||||
Diluted earnings (loss) per share:
|
|
|
|
|
|
||||||
Income (loss) from continuing operations available to common shareholders - basic
|
$
|
5,146
|
|
|
$
|
(653
|
)
|
|
$
|
1,241
|
|
Add: Undistributed earnings reallocated to unvested shareholders
|
2
|
|
|
—
|
|
|
—
|
|
|||
Income (loss) from continuing operations available to common shareholders - basic
|
$
|
5,148
|
|
|
$
|
(653
|
)
|
|
$
|
1,241
|
|
Basic weighted-average shares outstanding (1)
|
12,737
|
|
|
12,638
|
|
|
12,585
|
|
|||
Effect of dilutive securities:
|
|
|
|
|
|
||||||
Stock options (2)
|
54
|
|
|
—
|
|
|
1
|
|
|||
Directors' stock performance units (2)
|
61
|
|
|
—
|
|
|
37
|
|
|||
Diluted weighted-average shares outstanding (1)(2)
|
12,852
|
|
|
12,638
|
|
|
12,623
|
|
|||
Diluted earnings (loss) per share - continuing operations
|
$
|
0.40
|
|
|
$
|
(0.05
|
)
|
|
$
|
0.10
|
|
(1)
|
Includes Common and Class B Common shares, less shares held in treasury, in thousands.
|
(2)
|
Because their effects are anti-dilutive, shares issuable under stock option plans where the exercise price is greater than the average market price of the Company's Common Stock at the end of the relevant period, directors' stock performance units, and shares issuable on conversion of subordinated debentures into shares of Common Stock have been excluded. Aggregate shares excluded were
510
in 2013,
827
shares in 2012 and
1,337
shares in 2011.
|
|
Number of Shares
|
|
Weighted-Average Grant-Date Fair Value
|
|||
Outstanding at December 25, 2010
|
301,179
|
|
|
$
|
8.61
|
|
Granted
|
91,340
|
|
|
4.57
|
|
|
Vested
|
(85,990
|
)
|
|
6.51
|
|
|
Forfeited
|
—
|
|
|
—
|
|
|
Outstanding at December 31, 2011
|
306,529
|
|
|
8.00
|
|
|
Granted
|
289,233
|
|
|
3.99
|
|
|
Vested
|
(113,647
|
)
|
|
4.20
|
|
|
Forfeited
|
(17,229
|
)
|
|
4.14
|
|
|
Outstanding at December 29, 2012
|
464,886
|
|
|
6.57
|
|
|
Granted
|
173,249
|
|
|
5.19
|
|
|
Vested
|
(112,336
|
)
|
|
4.15
|
|
|
Forfeited
|
—
|
|
|
—
|
|
|
Outstanding at December 28, 2013
|
525,799
|
|
|
$
|
6.64
|
|
|
Number of Shares
|
|
Weighted-Average Exercise Price
|
|
Weighted-Average Fair Value of Options Granted During the Year
|
|||||
Outstanding at December 25, 2010
|
786,728
|
|
|
$
|
10.91
|
|
|
$
|
—
|
|
Granted
|
—
|
|
|
—
|
|
|
—
|
|
||
Exercised
|
—
|
|
|
—
|
|
|
—
|
|
||
Forfeited
|
—
|
|
|
—
|
|
|
—
|
|
||
Outstanding at December 31, 2011
|
786,728
|
|
|
10.91
|
|
|
—
|
|
||
Granted
|
—
|
|
|
—
|
|
|
—
|
|
||
Exercised
|
—
|
|
|
—
|
|
|
—
|
|
||
Forfeited
|
(89,321
|
)
|
|
10.20
|
|
|
—
|
|
||
Outstanding at December 29, 2012
|
697,407
|
|
|
11.00
|
|
|
—
|
|
||
Granted
|
—
|
|
|
—
|
|
|
—
|
|
||
Exercised
|
(37,052
|
)
|
|
5.15
|
|
|
—
|
|
||
Forfeited
|
—
|
|
|
—
|
|
|
—
|
|
||
Outstanding at December 28, 2013
|
660,355
|
|
|
$
|
11.33
|
|
|
$
|
—
|
|
|
|
|
|
|
|
|||||
Options exercisable at:
|
|
|
|
|
|
|||||
December 31, 2011
|
682,478
|
|
|
$
|
11.81
|
|
|
—
|
|
|
December 29, 2012
|
638,407
|
|
|
11.56
|
|
|
—
|
|
||
December 28, 2013
|
630,855
|
|
|
11.63
|
|
|
—
|
|
Options Outstanding
|
||||||||||
Range of Exercise Prices
|
|
Number of Shares
|
|
Weighted-Average Remaining Contractual Life
|
|
Weighted-Average Exercise Price
|
||||
$4.20 - $5.00
|
|
126,750
|
|
|
5.1
|
years
|
|
$
|
4.93
|
|
$6.96 - $6.96
|
|
83,435
|
|
|
1.3
|
years
|
|
6.96
|
|
|
$11.85 - $17.58
|
|
450,170
|
|
|
1.4
|
years
|
|
13.94
|
|
|
$3.875 - $17.58
|
|
660,355
|
|
|
2.1
|
years
|
|
$
|
11.33
|
|
|
|
|
|
|
|
|
|
|||
Options Exercisable
|
||||||||||
Range of Exercise Prices
|
|
Number of Shares
|
|
Weighted-Average Remaining Contractual Life
|
|
Weighted-Average Exercise Price
|
||||
$4.20 - $5.00
|
|
97,250
|
|
|
4.8
|
years
|
|
$
|
4.91
|
|
$6.96 - $6.96
|
|
83,435
|
|
|
1.3
|
years
|
|
6.96
|
|
|
$11.85 - $17.58
|
|
450,170
|
|
|
1.4
|
years
|
|
13.94
|
|
|
$3.875 - $17.58
|
|
630,855
|
|
|
1.9
|
years
|
|
$
|
11.63
|
|
|
2013
|
|
2012
|
|
2011
|
||||||
Other comprehensive income (loss):
|
|
|
|
|
|
||||||
Unrealized gain (loss) on interest rate swaps:
|
|
|
|
|
|
||||||
Before income taxes
|
$
|
381
|
|
|
$
|
(767
|
)
|
|
$
|
(665
|
)
|
Income taxes
|
145
|
|
|
(291
|
)
|
|
(253
|
)
|
|||
Net of taxes
|
236
|
|
|
(476
|
)
|
|
(412
|
)
|
|||
|
|
|
|
|
|
||||||
Reclassification of loss into earnings from interest rate swaps:
|
|
|
|
|
|
||||||
Before income taxes
|
284
|
|
|
158
|
|
|
433
|
|
|||
Income taxes
|
108
|
|
|
60
|
|
|
165
|
|
|||
Net of taxes
|
176
|
|
|
98
|
|
|
268
|
|
|||
|
|
|
|
|
|
||||||
Amortization of unrealized loss on dedesignated interest rate swaps:
|
|
|
|
|
|
||||||
Before income taxes
|
158
|
|
|
467
|
|
|
150
|
|
|||
Income taxes
|
60
|
|
|
178
|
|
|
57
|
|
|||
Net of taxes
|
98
|
|
|
289
|
|
|
93
|
|
|||
|
|
|
|
|
|
||||||
Unrecognized net actuarial gain on postretirement benefit plans:
|
|
|
|
|
|
||||||
Before income taxes
|
32
|
|
|
33
|
|
|
108
|
|
|||
Income taxes
|
12
|
|
|
13
|
|
|
41
|
|
|||
Net of taxes
|
20
|
|
|
20
|
|
|
67
|
|
|||
|
|
|
|
|
|
||||||
Reclassification of net actuarial gain into earnings from postretirement benefit plans:
|
|
|
|
|
|
||||||
Before income taxes
|
(35
|
)
|
|
(45
|
)
|
|
(29
|
)
|
|||
Income taxes
|
(13
|
)
|
|
(18
|
)
|
|
(11
|
)
|
|||
Net of taxes
|
(22
|
)
|
|
(27
|
)
|
|
(18
|
)
|
|||
|
|
|
|
|
|
||||||
Reclassification of prior service credits into earnings from postretirement benefit plans:
|
|
|
|
|
|
||||||
Before income taxes
|
(88
|
)
|
|
(88
|
)
|
|
(88
|
)
|
|||
Income taxes
|
(34
|
)
|
|
(34
|
)
|
|
(33
|
)
|
|||
Net of taxes
|
(54
|
)
|
|
(54
|
)
|
|
(55
|
)
|
|||
Other comprehensive income (loss)
|
$
|
454
|
|
|
$
|
(150
|
)
|
|
$
|
(57
|
)
|
|
Interest Rate Swaps
|
|
Post-Retirement Liabilities
|
|
Total
|
||||||
Balance at December 25, 2010
|
$
|
(514
|
)
|
|
$
|
483
|
|
|
$
|
(31
|
)
|
Unrealized gain (loss) on interest rate swaps, net of tax of $253
|
(412
|
)
|
|
—
|
|
|
(412
|
)
|
|||
Reclassification of loss into earnings from interest rate swaps, net of tax of $165
|
268
|
|
|
—
|
|
|
268
|
|
|||
Amortization of unrealized loss on dedesignated interest rate swaps, net of tax of $57
|
93
|
|
|
—
|
|
|
93
|
|
|||
Unrecognized net actuarial gain on postretirement benefit plans, net of tax of $41
|
—
|
|
|
67
|
|
|
67
|
|
|||
Reclassification of net actuarial gain into earnings from postretirement benefit plans, net of tax of $11
|
—
|
|
|
(18
|
)
|
|
(18
|
)
|
|||
Reclassification of prior service credits into earnings from postretirement benefit plans, net of tax of $33
|
—
|
|
|
(55
|
)
|
|
(55
|
)
|
|||
Balance at December 31, 2011
|
(565
|
)
|
|
477
|
|
|
(88
|
)
|
|||
Unrealized gain (loss) on interest rate swaps, net of tax of $291
|
(476
|
)
|
|
—
|
|
|
(476
|
)
|
|||
Reclassification of loss into earnings from interest rate swaps, net of tax of $60
|
98
|
|
|
—
|
|
|
98
|
|
|||
Amortization of unrealized loss on dedesignated interest rate swaps, net of tax of $178
|
289
|
|
|
—
|
|
|
289
|
|
|||
Unrecognized net actuarial gain on postretirement benefit plans, net of tax of $13
|
—
|
|
|
20
|
|
|
20
|
|
|||
Reclassification of net actuarial gain into earnings from postretirement benefit plans, net of tax of $18
|
—
|
|
|
(27
|
)
|
|
(27
|
)
|
|||
Reclassification of prior service credits into earnings from postretirement benefit plans, net of tax of $34
|
—
|
|
|
(54
|
)
|
|
(54
|
)
|
|||
Balance at December 29, 2012
|
(654
|
)
|
|
416
|
|
|
(238
|
)
|
|||
Unrealized gain (loss) on interest rate swaps, net of tax of $145
|
236
|
|
|
—
|
|
|
236
|
|
|||
Reclassification of loss into earnings from interest rate swaps, net of tax of $108
|
176
|
|
|
—
|
|
|
176
|
|
|||
Amortization of unrealized loss on dedesignated interest rate swaps, net of tax of $60
|
98
|
|
|
—
|
|
|
98
|
|
|||
Unrecognized net actuarial gain on postretirement benefit plans, net of tax of $12
|
—
|
|
|
20
|
|
|
20
|
|
|||
Reclassification of net actuarial gain into earnings from postretirement benefit plans, net of tax of $13
|
—
|
|
|
(22
|
)
|
|
(22
|
)
|
|||
Reclassification of prior service credits into earnings from postretirement benefit plans, net of tax of $34
|
—
|
|
|
(54
|
)
|
|
(54
|
)
|
|||
Balance at December 28, 2013
|
$
|
(144
|
)
|
|
$
|
360
|
|
|
$
|
216
|
|
|
Capital
Leases
|
|
Operating
Leases
|
||||
2014
|
$
|
1,040
|
|
|
$
|
2,421
|
|
2015
|
1,037
|
|
|
2,132
|
|
||
2016
|
919
|
|
|
1,898
|
|
||
2017
|
838
|
|
|
1,470
|
|
||
2018
|
1,037
|
|
|
1,067
|
|
||
Thereafter
|
—
|
|
|
4,739
|
|
||
Total commitments
|
4,871
|
|
|
13,727
|
|
||
Less amounts representing interest
|
(590
|
)
|
|
—
|
|
||
Total
|
$
|
4,281
|
|
|
$
|
13,727
|
|
|
2013
|
|
2012
|
|
2011
|
||||||
Other operating (income) expense, net:
|
|
|
|
|
|
||||||
Insurance proceeds (1)
|
$
|
(202
|
)
|
|
$
|
—
|
|
|
$
|
(492
|
)
|
Loss on property, plant and equipment disposals
|
195
|
|
|
1
|
|
|
37
|
|
|||
Retirement expenses
|
154
|
|
|
201
|
|
|
371
|
|
|||
Contract settlement
|
172
|
|
|
—
|
|
|
—
|
|
|||
Miscellaneous (income) expense
|
175
|
|
|
(134
|
)
|
|
(182
|
)
|
|||
Other operating (income) expense, net
|
$
|
494
|
|
|
$
|
68
|
|
|
$
|
(266
|
)
|
(1)
|
The Company recognized settlement gains of
$202
and
$492
from company-owned insurance policies during 2013 and 2011, respectively.
|
|
2013
|
|
2012
|
|
2011
|
||||||
Other (income) expense, net:
|
|
|
|
|
|
||||||
(Gain) loss on non-hedged swaptions
|
$
|
—
|
|
|
$
|
(87
|
)
|
|
$
|
(43
|
)
|
Gain on sale of non-operating assets
|
—
|
|
|
(187
|
)
|
|
—
|
|
|||
Miscellaneous (income) expense
|
26
|
|
|
(3
|
)
|
|
(32
|
)
|
|||
Other (income) expense, net
|
$
|
26
|
|
|
$
|
(277
|
)
|
|
$
|
(75
|
)
|
|
Equipment and Inventory Relocation
|
|
Severance Pay and Employee Relocation
|
|
Asset Impairments
|
|
Lease Obligations
|
|
Total
|
||||||||||
Total expenses by activity
|
$
|
3,192
|
|
|
$
|
1,095
|
|
|
$
|
1,459
|
|
|
$
|
1,664
|
|
|
$
|
7,410
|
|
|
Severance Pay and Employee Relocation
|
|
Computer Systems Conversion Costs
|
|
Total
|
||||||
Total expenses by activity
|
$
|
969
|
|
|
$
|
481
|
|
|
$
|
1,450
|
|
|
2013
|
|
2012
|
|
2011
|
||||||
Loss from discontinued operations:
|
|
|
|
|
|
||||||
Workers' compensation costs
|
$
|
(23
|
)
|
|
$
|
(143
|
)
|
|
$
|
(237
|
)
|
Environmental remediation costs
|
(74
|
)
|
|
(279
|
)
|
|
(196
|
)
|
|||
Loss from discontinued operations, before taxes
|
(97
|
)
|
|
(422
|
)
|
|
(433
|
)
|
|||
Income tax benefit
|
(29
|
)
|
|
(148
|
)
|
|
(147
|
)
|
|||
Loss from discontinued operations, net of tax
|
$
|
(68
|
)
|
|
$
|
(274
|
)
|
|
$
|
(286
|
)
|
EXHIBIT NO.
|
EXHIBIT DESCRIPTION
|
|
INCORPORATION BY REFERENCE
|
(2.1)
|
Securities Purchase Agreement dated as of June 30, 2013.
|
|
Incorporated by reference to Exhibit (2.1) to Dixie's Current Report on Form 8-K dated June 30, 2013. *
|
(3.1)
|
Text of Restated Charter of The Dixie Group, Inc. as Amended - Blackline Version.
|
|
Incorporated by reference to Exhibit (3.4) to Dixie's Annual Report on Form 10-K for the year ended December 27, 2003. *
|
(3.2)
|
Amended By-Laws of The Dixie Group, Inc. as of February 22, 2007.
|
|
Incorporated by reference to Exhibit 3.1 to Dixie's Current Report on Form 8-K dated February 26 2007.*
|
(10.1)
|
The Dixie Group, Inc. Director's Stock Plan. **
|
|
Incorporated by reference to Exhibit (10y) to Dixie's Annual Report on Form 10-K for the year ended December 27, 1997. *
|
(10.2)
|
The Dixie Group, Inc. New Non-qualified Retirement Savings Plan effective August 1, 1999. **
|
|
Incorporated by reference to Exhibit (10.1) to Dixie's Quarterly Report on Form 10-Q for the quarter ended June 26, 1999. *
|
(10.3)
|
The Dixie Group, Inc. Deferred Compensation Plan Amended and Restated Master Trust Agreement effective as of August 1, 1999. **
|
|
Incorporated by reference to Exhibit (10.2) to Dixie's Quarterly Report on Form 10-Q for the quarter ended June 26, 1999. *
|
(10.4)
|
The Dixie Group, Inc. Stock Incentive Plan, as amended. **
|
|
Incorporated by reference to Annex A to Dixie's Proxy Statement dated April 5, 2002 for its 2002 Annual Meeting of Shareholders. *
|
(10.5)
|
Form of Stock Option Agreement under The Dixie Group, Inc. Stock Incentive Plan. **
|
|
Incorporated by reference to Exhibit (10.23) to Dixie's Annual Report on Form 10-K for the year ended December 29, 2001. *
|
(10.6)
|
Form of Stock Rights and Restrictions Agreement for Restricted Stock Award under The Dixie Group, Inc. Stock Incentive Plan, as amended.**
|
|
Incorporated by reference to Exhibit (10.35) to Dixie's Annual Report on Form 10-K for the year ended December 25, 2004. *
|
(10.7)
|
Form of Stock Option Agreement under The Dixie Group, Inc. Stock Incentive Plan for Non-Qualified Options Granted December 20, 2005.**
|
|
Incorporated by reference to Exhibit (10.1) to Dixie's Current Report on Form 8-K dated December 20, 2005. *
|
(10.8)
|
Summary Description of the Director Compensation Arrangements for The Dixie Group, Inc.**
|
|
Incorporated by reference to Exhibit (10.34) to Dixie's Annual Report on Form 10-K for the year ended December 25, 2004. *
|
(10.9)
|
The Dixie Group, Inc. 2006 Stock Awards Plan. **
|
|
Incorporated by reference to Annex A to the Company's Proxy Statement for its 2006 Annual Meeting of Shareholders, filed March 20, 2006. *
|
(10.10)
|
Summary Description of the 2006 Incentive Compensation Plan, approved February 23, 2006.**
|
|
Incorporated by reference to Current Report on Form 8-K dated March 1, 2006. *
|
EXHIBIT NO.
|
EXHIBIT DESCRIPTION
|
|
INCORPORATION BY REFERENCE
|
(10.11)
|
Summary Description of The Dixie Group, Inc., 2006 Incentive Compensation Plan/Range of Incentives.**
|
|
Filed herewith.
|
(10.12)
|
Material terms of the performance goals for the period 2007-2011, pursuant to which incentive compensation awards may be made to certain key executives of the Company based on the results achieved by the Company during such years, approved March 14, 2006.**
|
|
Incorporated by reference to Current Report on Form 8-K dated March 20, 2006. *
|
(10.13)
|
Form of Award of Career Shares under the 2006 Incentive Compensation Plan for Participants holding only shares of the Company's Common Stock.**
|
|
Incorporated by reference to Exhibit (10.1) to Dixie's Current Report on Form 8-K dated June 6, 2006. *
|
(10.14)
|
Form of Award of Career Shares under the 2006 Incentive Compensation Plan for Participants holding shares of the Company's Class B Common Stock.**
|
|
Incorporated by reference to Exhibit (10.2) to Dixie's Current Report on Form 8-K dated June 6, 2006. *
|
(10.15)
|
Form of Award of Long Term Incentive Plan Shares under the 2006 Incentive Compensation Plan for Participants holding only shares of the Company's Common Stock.**
|
|
Incorporated by reference to Exhibit (10.3) to Dixie's Current Report on Form 8-K dated June 6, 2006. *
|
(10.16)
|
Form of Award of Long Term Incentive Plan Shares under the 2006 Incentive Compensation Plan for Participants holding shares of the Company's Class B Common Stock.**
|
|
Incorporated by reference to Exhibit (10.4) to Dixie's Current Report on Form 8-K dated June 6, 2006. *
|
(10.17)
|
Award of 125,000 shares of Restricted Stock under the 2006 Stock Awards Plan to Daniel K. Frierson.**
|
|
Incorporated by reference to Exhibit (10.1) to Dixie's Current Report on Form 8-K dated June 7, 2006. *
|
(10.18)
|
Summary description of The Dixie Group, Inc. 2007 Annual Compensation Plan.**
|
|
Incorporated by reference to Exhibit (10.1) to Dixie's Current Report on Form 8-K dated February 26, 2007.*
|
(10.19)
|
Rule 10b5-1 and 10b-18 Repurchase Agreement by and between The Dixie Group, Inc. and Raymond James & Associates, Inc. dated December 11, 2007*
|
|
Incorporated by reference to Exhibit (99.1) to Dixie's Current Report on Form 8-K dated December 11, 2007*
|
(10.20)
|
Merger agreement between The Dixie Group, Inc. and Unite Here National Retirement Fund regarding the Company's Masland Bargaining Unit Defined Benefit Pension Plan.**
|
|
Incorporated by reference to Exhibit (99.1) to Dixie's Current Report on Form 8-K dated December 28, 2007*
|
(10.21)
|
Summary description of The Dixie Group, Inc. 2008 Annual Incentive Plan.**
|
|
Incorporated by reference to Exhibit 10.1 to Dixie's Current Report on Form 8-K dated February 15, 2008*
|
(10.22)
|
Summary description of The Dixie Group, Inc. 2009 Annual Incentive Plan.**
|
|
Incorporated by reference to Exhibit 10.1 to Dixie's Current Report on Form 8-K dated March 26, 2009*
|
(10.23)
|
Amended and restated award of 125,000 shares of Restricted Stock under the 2006 Stock Awards Plan to Daniel K. Frierson.**
|
|
Incorporated by reference to Exhibit 10.1 to Dixie's Current Report on Form 8-K dated May 21, 2009.*
|
(10.24)
|
Master Lease Agreement, Corporate Guaranty and Schedule to the Master Lease Agreement by and between General Electric Capital Corporation and Masland Carpets, LLC dated August 21, 2009.
|
|
Incorporated by reference to Exhibit (10.1, 10.2, 10.3) to Dixie's Current Report on Form 8-K dated August 25, 2009.*
|
EXHIBIT NO.
|
EXHIBIT DESCRIPTION
|
|
INCORPORATION BY REFERENCE
|
(10.25)
|
Agreement by and between Raymond James & Associates, Inc. dated November 6, 2008, to repurchase shares of The Dixie Group, Inc.'s Common Stock.
|
|
Incorporated by reference to Exhibit (99.1) to Dixie's Current Report on Form 8-K dated November 6, 2008.*
|
(10.26)
|
Summary description of The Dixie Group, Inc. 2010 Incentive Compensation Plan/Range of Incentives.**
|
|
Incorporated by reference to Exhibit (10.1) to Dixie's Current Report on Form 8-K dated March 3, 2010.*
|
(10.27)
|
Fixed Rate Swap Agreement between Bank of America, N.A. and The Dixie Group, Inc.
|
|
Incorporated by reference to Exhibit (10.1) to Dixie's Current Report on Form 8-K dated April 19, 2010.*
|
(10.28)
|
Fixed Rate Swap Agreement between Bank of America, N.A. and The Dixie Group, Inc.
|
|
Incorporated by reference to Exhibit (10.1) to Dixie's Current Report on Form 8-K dated July 8, 2010.*
|
(10.29)
|
Termination of interest rate swap between Bank of America, N.A. and The Dixie Group, Inc. dated April 19, 2010.
|
|
Incorporated by reference to Exhibit (10.2) to Dixie's Current Report on Form 8-K dated July 8, 2010.*
|
(10.30)
|
Summary Description of The Dixie Group, Inc. 2011 Incentive Compensation Plan/Range of Incentives.**
|
|
Incorporated by reference to Exhibit (10.1) to Dixie's Current Report on Form 8-K dated February 1, 2011.*
|
(10.31)
|
Credit Agreement, by and among The Dixie Group, Inc. and certain of its subsidiaries, as Borrowers, cert of its subsidiaries, as Guarantor, the Lendors from time to time party thereto, Wells Fargo Bank Capital Finance LLC, as Administrative Agent, and co-lender and Bank of America and the Other parties thereto, dated September 13, 2011.
|
|
Incorporated by reference to Exhibit (10.10) to Dixie's Current Report on Form 8-K dated September 14, 2011.*
|
(10.32)
|
Security Agreement, by and among The Dixie Group, Inc. and certain of its subsidiaries, as Borrowers, certain of its subsidiaries, as Guarantor, the Lenders from time to time party thereto, Wells Fargo Bank Capital Finance LLC, as Administrative Agent, and co-lender and Bank of America and the Other parties thereto, dated September 13, 2011.
|
|
Incorporated by reference to Exhibit (10.11) to Dixie's Current Report on Form 8-K dated September 14, 2011.*
|
(10.33)
|
Form of Mortgages, by and among The Dixie Group, Inc. and certain of its subsidiaries, as Borrowers, certain of its subsidiaries, as Guarantor, the Lenders from time to time party thereto, Wells Fargo Bank Capital Finance LLC, as Administrative Agent, and co-lender and Bank of America and the Other parties thereto, dated September 13, 2011.
|
|
Incorporated by reference to Exhibit (10.12) to Dixie's Current Report on Form 8-K dated September 14, 2011.*
|
(10.34)
|
Credit Agreement, by and between The Dixie Group, Inc. and certain of its subsidiaries named therein, and Wells Fargo Bank, N.A. as lender, dated September 13, 2011.
|
|
Incorporated by reference to Exhibit (10.20) to Dixie's Current Report on Form 8-K dated September 14, 2011.*
|
(10.35)
|
Security Agreement, by and between The Dixie Group, Inc. and certain of its subsidiaries named therein, and Wells Fargo Bank, N.A. as lender, dated September 13, 2011.
|
|
Incorporated by reference to Exhibit (10.21) to Dixie's Current Report on Form 8-K dated September 14, 2011.*
|
(10.36)
|
First Mortgage, by and between The Dixie Group, Inc. and certain of its subsidiaries named therein, and Wells Fargo Bank, N.A. as lender, dated September 13, 2011.
|
|
Incorporated by reference to Exhibit (10.22) to Dixie's Current Report on Form 8-K dated September 14, 2011.*
|
(10.37)
|
Summary Description of The Dixie Group, Inc. 2012 Incentive Compensation Plan/Range of Incentives.**
|
|
Incorporated by reference to Exhibit (10.1) to Dixie's Current Report on Form 8-K dated March 12, 2012.*
|
EXHIBIT NO.
|
EXHIBIT DESCRIPTION
|
|
INCORPORATION BY REFERENCE
|
(10.38)
|
Amended and Modified Financing Agreement, by and between The Dixie Group, Inc. and certain of its subsidiaries named therein, and General Electric Credit Corporation, as lender, dated June 26, 2012.
|
|
Incorporated by reference to Exhibit (10.1) to Dixie's Current Report on Form 8-K dated June 26, 2012.*
|
(10.39)
|
Agreement to Reduce Security Deposit Amount and Amendment to Security Deposit Pledge Agreement, dated June 26, 2012.
|
|
Incorporated by reference to Exhibit (10.2) to Dixie's Current Report on Form 8-K dated June 26, 2012.*
|
(10.40)
|
Summary Description of The Dixie Group, Inc. 2012 Incentive Compensation Plan/Range of Incentives.**
|
|
Incorporated by reference to Exhibit (10.1) to Dixie's Current Report on Form 8-K dated August 22, 2012.*
|
(10.41)
|
First Amendment to Credit Agreement dated as of November 2, 2012, by and among The Dixie Group, Inc., certain of its subsidiaries, and Wells Fargo Bank, N.A. as Agent and the persons identified as Lenders therein.
|
|
Incorporated by reference to Exhibit (10.1) to Dixie's Current Report on Form 8-K dated November 5, 2012.*
|
(10.42)
|
First Amendment to Credit Agreement dated as of November 2, 2012, by and among The Dixie Group, Inc., certain of it subsidiaries, and Wells Fargo Capital Finance, LLC as Agent and the persons identified as Lenders therein.
|
|
Incorporated by reference to Exhibit (10.2) to Dixie's Current Report on Form 8-K dated November 5, 2012.*
|
(10.43)
|
Intercreditor Agreement dated as of November 2, 2012, by and among Wells Fargo Capital Finance, LLC and Wells Fargo Bank, N.A. as Agents and The Dixie Group, Inc. and certain of its subsidiaries.
|
|
Incorporated by reference to Exhibit (10.3) to Dixie's Current Report on Form 8-K dated November 5, 2012.*
|
(10.44)
|
Summary Description of The Dixie Group, Inc. 2013 Incentive Compensation Plan/Range of Incentives.**
|
|
Incorporated by reference to Exhibit (10.1) to Dixie's Current Report on Form 8-K dated February 15, 2013.*
|
(10.45)
|
Obligation to the Development Authority of Gordon County; by and among Masland Carpets, LLC, Purchase and Sale Agreement dated December 28, 2012.
|
|
Incorporated by reference to Exhibit (4.12) to Dixie's Annual Report on Form 10-K for the year ended December 29, 2012 .*
|
(10.46)
|
Obligation to the Development Authority of Gordon County; by and among Masland Carpets, LLC, Bill of Sale, dated December 28, 2012.
|
|
Incorporated by reference to Exhibit (4.12) to Dixie's Annual Report on Form 10-K for the year ended December 29, 2012. *
|
(10.47)
|
Obligation to the Development Authority of Gordon County; by and among Masland Carpets, LLC, Lease Agreement, dated December 28, 2012.
|
|
Incorporated by reference to Exhibit (4.12) to Dixie's Annual Report on Form 10-K for the year ended December 29, 2012 .*
|
(10.48)
|
Obligation to the Development Authority of Gordon County; by and among Masland Carpets, LLC, Short Form Lease Agreement, dated December 28, 2012.
|
|
Incorporated by reference to Exhibit (4.12) to Dixie's Annual Report on Form 10-K for the year ended December 29, 2012 .*
|
(10.49)
|
Obligation to the Development Authority of Gordon County; by and among Masland Carpets, LLC, Option Agreement, dated December 28, 2012.
|
|
Incorporated by reference to Exhibit (4.12) to Dixie's Annual Report on Form 10-K for the year ended December 29, 2012 .*
|
(10.50)
|
Obligation to the Development Authority of Gordon County; by and among Masland Carpets, LLC, Pilot Agreement, dated December 28, 2012.
|
|
Incorporated by reference to Exhibit (4.12) to Dixie's Annual Report on Form 10-K for the year ended December 29, 2012 .*
|
EXHIBIT NO.
|
EXHIBIT DESCRIPTION
|
|
INCORPORATION BY REFERENCE
|
(10.51)
|
Obligation to the Development Authority of Gordon County; by and among Masland Carpets, LLC, Loan Agreement, dated December 28, 2012.
|
|
Incorporated by reference to Exhibit (4.12) to Dixie's Annual Report on Form 10-K for the year ended December 29, 2012 .*
|
(10.52)
|
Obligation to the Development Authority of Gordon County; by and among Masland Carpets, LLC, Loan and Security Agreement, dated December 28, 2012.
|
|
Incorporated by reference to Exhibit (4.12) to Dixie's Annual Report on Form 10-K for the year ended December 29, 2012 .*
|
(10.53)
|
Obligation to the Development Authority of Gordon County; by and among Masland Carpets, LLC, Deed to Secure Debt and Security Agreement, dated December 28, 2012.
|
|
Incorporated by reference to Exhibit (4.12) to Dixie's Annual Report on Form 10-K for the year ended December 29, 2012 .*
|
(10.54)
|
Obligation to the Development Authority of Gordon County; by and among Masland Carpets, LLC, Notice and Consent to Assignment, dated December 28, 2012.
|
|
Incorporated by reference to Exhibit (4.12) to Dixie's Annual Report on Form 10-K for the year ended December 29, 2012 .*
|
(10.55)
|
Obligation to the Development Authority of Gordon County; by and among Masland Carpets, LLC, Absolute Assignment of Deed to Secure Debt and Security Agreement and Other Loan Documents, dated December 28, 2012.
|
|
Incorporated by reference to Exhibit (4.12) to Dixie's Annual Report on Form 10-K for the year ended December 29, 2012 .*
|
(10.56)
|
Second Amendment to Credit Agreement dated as of April 1, 2013, by and among The Dixie Group, Inc. certain of its subsidiaries and Wells Fargo Capital Finance, LLC, as Agent and the persons identified as Lenders therein.
|
|
Incorporated by reference to Exhibit (10.01) to Dixie's Current Report on Form 8-K dated April 3, 2013.*
|
(10.57)
|
Third Amendment to Credit Agreement dated as of May 22, 2013, by and among The Dixie Group, Inc. certain of its subsidiaries and Wells Fargo Capital Finance, LLC, as Agent and the persons identified as Lenders therein.
|
|
Filed herewith.
|
(10.58)
|
Fourth Amendment to Credit Agreement dated as of July 1, 2013, by and among The Dixie Group, Inc. certain of its subsidiaries and Wells Fargo Capital Finance, LLC, as Agent and the persons identified as Lenders therein.
|
|
Filed herewith.
|
(10.59)
|
Fifth Amendment to Credit Agreement dated as of July 30, 2013, by and among The Dixie Group, Inc. certain of its subsidiaries and Wells Fargo Capital Finance, LLC, as Agent and the persons identified as Lenders therein.
|
|
Incorporated by reference to Exhibit (10.1) to Dixie's Current Report on Form 10-Q dated August 7, 2013. *
|
(10.60)
|
Sixth Amendment to Credit Agreement dated as of August 30, 2013, by and among The Dixie Group, Inc. certain of its subsidiaries and Wells Fargo Capital Finance, LLC, as Agent and the persons identified as Lenders therein.
|
|
Incorporated by reference to Exhibit (10.1) to Dixie's Current Report on Form 10-Q dated November 6, 2013. *
|
(10.61)
|
Seventh Amendment to Credit Agreement dated as of January 20, 2014, by and among The Dixie Group, Inc. certain of its subsidiaries and Wells Fargo Capital Finance, LLC, as Agent and the persons identified as Lenders therein.
|
|
Incorporated by reference to Exhibit (10.1) to Dixie's Current Report on Form 8-K dated January 21, 2014. *
|
(10.62)
|
Summary Description of The Dixie Group, Inc. 2014 Incentive Compensation Plan/Range of Incentives.**
|
|
Filed herewith.
|
(14)
|
Code of Ethics, as amended and restated, February 15, 2010.
|
|
Incorporated by reference to Exhibit 14 to Dixie's Annual Report on Form 10-K for year ended December 26, 2009.*
|
(16)
|
Letter from Ernst & Young LLP regarding change in certifying accountant.
|
|
Incorporated by reference to Exhibit 16 to Dixie's Form 8-K dated November 15, 2013.*
|
EXHIBIT NO.
|
EXHIBIT DESCRIPTION
|
|
INCORPORATION BY REFERENCE
|
(21)
|
Subsidiaries of the Registrant.
|
|
Filed herewith.
|
(23)
|
Consent of Independent Registered Public Accounting Firm.
|
|
Filed herewith.
|
(31.1)
|
CEO Certification pursuant to Securities Exchange Act Rule 13a-14(a).
|
|
Filed herewith.
|
(31.2)
|
CFO Certification pursuant to Securities Exchange Act Rule 13a-14(a).
|
|
Filed herewith.
|
(32.1)
|
CEO Certification pursuant to Securities Exchange Act Rule 13a-14(b).
|
|
Filed herewith.
|
(32.2)
|
CFO Certification pursuant to Securities Exchange Act Rule 13a-14(b).
|
|
Filed herewith.
|
(101.INS)
|
XBRL Instance Document
|
|
Filed herewith.
|
(101.SCH)
|
XBRL Taxonomy Extension Schema Document
|
|
Filed herewith
|
(101.CAL)
|
XBRL Taxaonomy Extension Calculation Linkbase Document
|
|
Filed herewith.
|
(101.DEF)
|
XBRL Taxonomy Extension Definition Linkbase Document
|
|
Filed herewith.
|
(101.LAB)
|
XBRL Taxonomy Extension Label Linkbase Document
|
|
Filed herewith.
|
(101.PRE)
|
XBRL Taxonomy Extension Presentation Linkbase Document
|
|
Filed herewith.
|
BORROWERS:
|
THE DIXIE GROUP, INC.,
a Tennessee corporation
By:
/s/ Jon Faulkner
Name: Jon Faulkner
Title: VP / CFO
|
|
CANDLEWICK YARNS, LLC.
an Alabama limited liability company
By:
/s/ Jon Faulkner
Name: Jon Faulkner
Title: President
|
|
FABRICA INTERNATIONAL, INC.,
a California corporation
By:
/s/ Jon Faulkner
Name: Jon Faulkner Title: President |
|
MASLAND CARPETS, LLC,
a Georgia limited liability company
By:
/s/ Jon Faulkner
Name: Jon Faulkner
Title: President |
AGENT AND LENDERS:
|
WELLS FARGO CAPITAL FINANCE, LLC,
a Delaware limited liability company, as Agent and as a Lender
By:
/s/ Gary Forlenza
Name: Gary Forlenza
Title: VP
|
|
BANK OF AMERICA, N.A.
,
a national banking association, as a Lender
By:
/s/ Robert B. H. Moore
Name: Robert B. H. Moore
Title: Senior Vice President
|
|
C-KNIT APPAREL, INC.
,
a Tennessee corporation
By:
/s/ Jon A. Faulkner
Name: Jon A. Faulkner
Title: President
|
I.
|
DEFINITIONS
|
II.
|
EVENTS OF DEFAULT
|
III.
|
CONDITIONS PRECEDENT
|
BORROWERS:
|
THE DIXIE GROUP, INC.
By: /s/ Jon A. Faulkner
Name: Jon A. Faulkner
Title: VP / CFO
|
|
CANDLEWICK YARNS, LLC
By: /s/ Jon A.Faulkner
Name: Jon A. Faulkner
Title: President
|
|
FABRICA INTERNATIONAL, INC.
By: /s/ Jon A. Faulkner
Name: Jon A. Faulkner
Title: President |
|
MASLAND CARPETS, LLC
By: /s/ Jon A. Faulkner
Name: Jon A. Faulkner
Title: President |
AGENT AND LENDERS:
|
WELLS FARGO CAPITAL FINANCE, LLC,
as Agent and as a Lender
By: /s/ Matt Mouledous
Name: Matt Mouledous
Title: VP
|
|
BANK OF AMERICA, N.A.
,
as a Lender
By: /s/ Robert B. H. Moore
Name: Robert B. H. Moore
Title: Senior Vice President
|
|
C-KNIT APPAREL, INC.
By: /s/ Jon A. Faulkner
Name: Jon A. Faulkner
Title: President
|
SUBSIDIARY
|
|
STATE/COUNTRY OF INCORPORATION
|
Fabrica International, Inc.
|
|
CA
|
C-Knit Apparel, Inc.
|
|
TN
|
TDG Operations, LLC
|
|
GA
|
Candlewick Yarns, LLC
|
|
AL
|
Dixie Commercial Consulting (Shanghai) Company Limited
|
|
Shanghai, China
|
(1)
|
Registration Statement (Form S-8 No. 333-134779) pertaining to The Dixie Group, Inc. 2006 Stock Awards Plan,
|
(2)
|
Registration Statement (Form S-8 No. 333-89994) pertaining to
The Dixie Group, Inc. Stock Incentive Plan,
|
(3)
|
Registration Statement (Form S-8 No. 33-59564) pertaining to
the Agreement and Plan of Merger by and among Dixie Yarns, Inc., Carriage Acquisitions, Inc. and Carriage Industries, Inc., dated as of November 3, 1992,
|
(4)
|
Registration Statement (Form S-8 No. 333-87534) pertaining to The Dixie Group, Inc. Stock Incentive Plan,
|
(5)
|
Registration Statement (Form S-8 No. 333-81163) pertaining to The Dixie Group, Inc. Incentive Stock Plan,
|
(6)
|
Registration Statement (Form S-8 No. 333-80971) pertaining to The Dixie Group, Inc. Core Leadership Team Stock Ownership Plan,
|
(7)
|
Registration Statement (Form S-8 No. 333-118504) pertaining to
The Dixie Group, Inc. Directors Stock Plan,
|
(8)
|
Registration Statement (Form S-8 No.
333-168412
) pertaining to The Dixie Group, Inc. Amended and Restated 2006 Stock Awards Plan, and
|
(9)
|
Registration Statement (Form S-8 No.
333-188321
) pertaining to The Dixie Group, Inc. Amended and Restated 2006 Stock Awards Plan;
|
1.
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I have reviewed this annual report on Form 10-K of The Dixie Group, Inc.;
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2.
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Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
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3.
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Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
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4.
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The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
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a.
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Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
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b.
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Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
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c.
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Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
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d.
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Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
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5.
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The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
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a.
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All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
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b.
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Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
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Date: March 12, 2014
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/s/
DANIEL K. FRIERSON
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Daniel K. Frierson
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Chief Executive Officer
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The Dixie Group, Inc.
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1.
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I have reviewed this annual report on Form 10-K of The Dixie Group, Inc.;
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2.
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Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
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3.
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Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
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4.
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The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
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a.
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
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b.
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Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
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c.
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Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
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d.
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Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
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5.
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The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
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a.
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All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
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b.
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Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
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Date: March 12, 2014
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/s/
JON A. FAULKNER
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Jon A. Faulkner
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Chief Financial Officer
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The Dixie Group, Inc.
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(1)
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the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
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(2)
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the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
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/s/
DANIEL K. FRIERSON
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Daniel K. Frierson, Chief Executive Officer
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Date:
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March 12, 2014
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(1)
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the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
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(2)
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the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
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/s/
JON A. FAULKNER
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Jon A. Faulkner, Chief Financial Officer
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Date:
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March 12, 2014
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