Item 8.01 Other Events
On December 14, 2023, The Dixie Group, Inc. (the “Company”), acting by and through a wholly owned subsidiary,
TDG Adairsville, LLC, completed the sale and lease back of its warehousing facility located at 400 Princeton
Boulevard, Adairsville, Georgia. The Purchaser of the facility, Adairsville GA, LLC, is an affiliate of Cannon
Commercial, Inc. The Facility consists of 17 acres with one building totaling approximately 294,000 square feet.
The sale price for the Facility was $16,250,000. At closing, the Company’s existing loan from RGA Insurance, having a principal balance of $10,368,427, was assumed by the Purchaser.
Simultaneously with closing, a 10-year lease (including two options to extend for five years each) was entered into between the Purchaser and the Company’s wholly owned operating subsidiary, TDG Operations, LLC. The lease is on a net basis with annual base rent for the first five years of $1,495,660 and for the last five years of $1,585,400 (with no rent for months 13 and 25). Performance of the lease is guaranteed by the Company. Included within the lease is a right of first refusal for the Company to purchase the property on the terms of any bona fide third- party offer.
Simultaneously with closing, the Company issued a press release announcing the sale/leaseback noting that the transaction was expected to result in an after- tax gain to the Company in excess of $8 million, and that proceeds would be used to reduce debt.