Dixie Group Sells Ranlo Yarn Facility
The Dixie Group Inc., Chattanooga,
Tenn., recently completed the sale of its Ranlo, N.C., synthetic yarn manufacturing facility to
Cavalier Specialty Yarn Co. USA, a subsidiary of Cavalier Textiles LP, Canada.
The company also announced that it has executed a definitive agreement to sell its remaining textile facilities in Chattanooga and Mebane, N.C., to R.L. Stowe Mills Inc.
Dixie previously announced that it expected to receive approximately $54 million in cash during 1999 from the disposal of its textile businesses, including two other operations that were sold in the fourth quarter of 1998 and the first quarter of 1999.
The company recorded the estimated costs of exiting the textile business in the fourth quarter of 1998 so it could focus on its floorcovering operations.
“We are pleased to complete the transaction with Cavalier and are making sound progress in finalizing the sale of the remaining textile operations,” said Daniel K. Frierson, Dixie’s chairman and CEO.
“We expect the mills to continue to operate at current levels and are working with the buyers to ensure that our customers are supported during this transition.
“We plan to use cash from these sales to continue our growth in floorcovering, to fund our extrusion investment and to pay down debt.”
According to the company, revenues from its floorcovering business have grown at a compounded annual rate of 11 percent since 1995; earnings have risen 24 percent per year over the same period.
Dixie recently acquired Globaltex Carpets, expanding its commitment to the home center channel of the residential market.
The company is also moving into producing its own filament yarn, which would strengthen its product development and cost position.