13  Consolidated Statements of Cash Flows (dollars in thousands) YEAR ENDED DECEMBER 29, DECEMBER 30, DECEMBER 25, 2001 2000 1999  CASH FLOWS FROM OPERATING ACTIVITIES Income (loss) from continuing operations $ 517 $ (10,150) $ 12,399  Income on disposal of discontinued operations – 824  4,792  Net income (loss) 517 (9,326) 17,191  Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: Depreciation and amortization –  Continuing Operations 24,007 23,440 22,330 Provision (benefit) for deferred income taxes (1,271) 3,647 2,045 Gain on property, plant and equipment disposals (4,330) (2,661) (160) Changes in operating assets and liabilities, net of effects of business combinations: Accounts receivable (6,367) 12,653 23,739 Inventories 22,045 (5,122) (12,685) Other current assets 10,591 (2,286) (1,122) Other assets (1,419) (3,564) (6,129) Accounts payable and accrued expenses 108 (16,793) (7,357)  Other liabilities (2,466) (150) (1,114) NET CASH PROVIDED BY (USED IN)  OPERATING ACTIVITIES 41,415 (162) 36,738  CASH FLOWS FROM INVESTING ACTIVITIES Net proceeds from sales of property, plant and equipment 6,564 20,008 52,097 Purchase of property, plant and equipment: Continuing operations (12,133) (50,664) (35,327) Discontinued operations – – (4,385) Cash payments in connection with  business combinations (1,987) (10,923) (32,714) Investment in affiliate (1,323) (11,894) –  NET CASH USED IN INVESTING ACTIVITIES (8,879) (53,473) (20,329) CASH FLOWS FROM FINANCING ACTIVITIES Net (decrease) increase in credit line borrowings (20,483) 59,104 16,073 Payments under term loan facility  (5,875) (7,814) (20,654) Payments on subordinated indebtedness (7,262) (7,262) (2,500) Other (95) (343) 398  NET CASH (USED IN) PROVIDED BY  FINANCING ACTIVITIES (33,715) 43,685 (6,683) (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS (1,179) (9,950) 9,726  CASH AND CASH EQUIVALENTS AT  BEGINNING OF YEAR 2,591 12,541 2,815 CASH AND CASH EQUIVALENTS AT  END OF YEAR $ 1,412 $ 2,591  $ 12,541  See accompanying notes to the consolidated financial statements. THE DIXIE GROUP  / 2001 ANNUAL REPORT