The Dixie Group Announces Letter of Intent to Sell and Lease Santa Ana Facility
August 09 2019 - 6:00AM
The Dixie Group, Inc. (NASDAQ: DXYN) today announces it has entered
into a letter of intent to sell to CenterPoint Properties Trust the
Company’s Santa Ana, California facility. The transaction is
subject to entering into a definitive purchase and lease agreement.
The property consists of 10 acres with one building totaling
approximately 200,000 square feet. The transaction is anticipated
to close in early October 2019. The purchase price is in excess of
$40 million dollars and is anticipated to generate an after tax
gain on sale in excess of $20 million. Simultaneously, under the
agreement, the Company shall sign a lease for 10 years with two
5-year renewal options.
Commenting on the anticipated transaction,
Daniel K. Frierson, Chairman and Chief Executive Officer, said, “We
believe this transaction will strengthen our balance sheet by
paying down debt, increasing our equity and substantially improving
the availability under our lines of credit. We are pleased with
this opportunity to work with CenterPoint Properties Trust and
begin a mutually beneficial relationship. Our commitment to the
Santa Ana operation is demonstrated by this long term lease. We
have an excellent work force that we have developed over the years
here in Orange County that continues our tradition of producing for
our Fabrica Brand and its emphasis on “Quality without Compromise”.
This transaction, along with our becoming profitable in the second
quarter excluding restructuring related charges, helps ensure our
long term financial stability,” Frierson concluded.
The Dixie Group (www.thedixiegroup.com) is a
leading marketer and manufacturer of carpet and rugs to higher-end
residential and commercial customers through the Fabrica
International, Masland Carpets, Dixie Home, Atlas | Masland
Contract and Dixie International brands.
This press release contains forward-looking
statements. Forward-looking statements are based on estimates,
projections, beliefs and assumptions of management and the Company
at the time of such statements and are not guarantees of
performance. Forward-looking statements are subject to risk factors
and uncertainties that could cause actual results to differ
materially from those indicated in such forward-looking statements.
Such factors include the levels of demand for the products produced
by the Company. Other factors that could affect the Company's
results include, but are not limited to, availability of raw
material and transportation costs related to petroleum prices, the
cost and availability of capital, integration of acquisitions,
ability to attract, develop and retain qualified personnel and
general economic and competitive conditions related to the
Company's business. Issues related to the availability and price of
energy may adversely affect the Company's operations. Additional
information regarding these and other risk factors and
uncertainties may be found in the Company's filings with the
Securities and Exchange Commission. The Company disclaims any
obligation to update or revise any forward-looking statements based
on the occurrence of future events, the receipt of new information,
or otherwise.
CONTACT: |
Jon Faulkner |
|
Chief Financial Officer |
|
706-876-5814 |
|
jon.faulkner@dixiegroup.com |
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