S&P drops Dixie Group view to stable

Standard & Poor's said it revised its outlook on The Dixie Group Inc to stable from positive.

At the same time, S&P said its B+ corporate credit and B- subordinated debt ratings were affirmed.

The agency noted the outlook revision incorporates the impact of substantially higher raw material, energy and transportation costs as a result of the recent hurricanes, in particular, petroleum-based chemical derivative products, which are a significant portion of the Dixie's cost structure.

S&P added the ratings on Dixie reflect its difficult operating environment and weak industry fundamentals, including the market's fragmentation, intense competition and maturity.

The ratings also incorporate the company's niche position in the high-end residential and commercial carpet segments, as well as its improved financial profile from the debt reduction with proceeds from the sale of its non-core businesses, the agency said.

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