Officials at the Dixie Group said the company restated its results for 2006, and the quarterly periods ended July 1, 2006 and September 30, 2006 to correct classification errors. The carpet and rug company reported that the errors included the classification of pension expenses and income tax payments.

The adjustments reclassified pension expenses from discontinued operations to continuing operations in the company’s income and cash flow statements for the 2005 and 2006 calendar years, for the three and six months ended July 1, 2006, and the nine months ended September 30, 2006. Income tax payments were erroneously classified as investing activities, and subsequently corrected. The company assured investors that the adjustment did not affect its net income, total cash flow, balance sheets, or stockholders’ equity, for any periods.

Dixie also concluded that its internal control over financial reporting was not effective as of December 30, 2006. That determination was made based solely on the need to restate results. The company added, however, that it has completed remediation of the control deficiency represented by its classification errors, and the company’s Chief Executive Officer Daniel Frierson and Chief Financial Officer Gary Harmon have certified that the company’s internal control over financial reporting is now effective.