DXYN The Dixie Group Inc

Risks

• In addition to the other information provided in this Report, the following risk factors should be considered when evaluating the results of our operations, future prospects and an investment in shares of our Common Stock. Any of these factors could cause our actual financial results to differ materially from our historical results, and could give rise to events that might have a material adverse effect on our business, financial condition and results of operations.
• The floorcovering industry is sensitive to changes in general economic conditions and a decline in residential or commercial construction activity or corporate remodeling and refurbishment could have a material adverse effect on our business.
• We have significant levels of sales in certain channels of distribution and reduction in sales through these channels could adversely affect our business.
• We have significant levels of indebtedness that could result in negative consequences to us.
• Uncertainty in the credit market or downturns in the economy and our business could affect our overall availability and cost of credit.
• If our stock price remains below $1.00 for an extended time, our common stock may be subject to delisting from The NASDAQ Stock Market.
• Our stock price has been and could remain volatile, which could further adversely affect the market price of our stock, our ability to raise additional capital and/or cause us to be subject to securities class action litigation.
• We face intense competition in our industry, which could decrease demand for our products and could have a material adverse effect on our profitability.
• If we are unable to anticipate consumer preferences and successfully develop and introduce new, innovative and updated products, we may not be able to maintain or increase our net revenues and profitability.
• Raw material prices may vary and the inability to either offset or pass on such cost increases or avoid passing on decreases larger than the cost decrease to our customers could have a material adverse effect on our business, results of operations and financial condition.
• Unanticipated termination or interruption of our arrangements with third-party suppliers of nylon yarn could have a material adverse effect on us.
• The long-term performance of our business relies on our ability to attract, develop and retain qualified personnel.
• We are subject to various governmental actions that may interrupt our supply of materials.
• We may experience certain risks associated with internal expansion, acquisitions, joint ventures and strategic investments.
• We are subject to various environmental, safety and health regulations that may subject us to costs, liabilities and other obligations, which could have a material adverse effect on our business, results of operations and financial condition.
• We may be exposed to litigation, claims and other legal proceedings in the ordinary course of business relating to our products or business, which could have a material adverse effect on our business, results of operations and financial condition.
• Our business operations could suffer significant losses from natural disasters, catastrophes, fire or other unexpected events.