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Q4 2020 sales results in-line with expectations at Unifi
Unifi, Inc. today released preliminary operating results for its first fiscal quarter ended September 28, 2008. For the September quarter, income from continuing operations before taxes was $1.3 million and net income was a loss of $676 thousand or $0.01 per share, which compares to a loss from continuing operations before taxes of $16.1 million and a net loss of $9.2 million or $0.15 per share in the prior September quarter. Increased sales of the Company's p
30th October 2008
Knitting Industry
|
Greensboro, N.C.
Unifi, Inc. today released preliminary operating results for its first fiscal quarter ended September 28, 2008.
For the September quarter, income from continuing operations before taxes was $1.3 million and net income was a loss of $676 thousand or $0.01 per share, which compares to a loss from continuing operations before taxes of $16.1 million and a net loss of $9.2 million or $0.15 per share in the prior September quarter. Increased sales of the Company's premium value-added yarns and other product mix enrichments contributed to year-over-year margin improvements and the prior year quarter was negatively impacted by approximately $11 million of restructuring and impairment costs.
Net sales for the current quarter were $169.0 million, which represents a slight decrease from net sales of $170.5 million for the prior year September quarter. Net sales were positively impacted by volume gains in Brazil and strength in the Company's nylon business, which continues to be driven by consumer and fashion preferences.
"During the quarter, volume started out ahead of plan but softened in September as the economy weakened," said Ron Smith, Chief Financial Officer for Unifi. "Our results for the quarter confirm that the Company's strategies to focus on our core business and develop our portfolio of premium value-added products, while exploring growth opportunities in China and Brazil, are the correct ones for our business. We are reacting quickly and decisively to an uncertain market caused by the economic slow down and significant fluctuations in our raw material prices. This price volatility, combined with softening volumes, will have a negative impact on our conversion margin in the December quarter, but we expect to see improvement as we move into the second half of our fiscal year."
Cash-on-hand at the end of September was $20.4 million, which increased slightly from the $20.2 million cash-on-hand at the end of June. Total cash and cash equivalents at the end of September, including restricted cash, were $47.7 million compared to $55.6 million at the end of June. Going forward, restricted cash now includes deposits in Brazil, which secure VAT tax incentive loans, as well as the domestic cash restricted primarily for capital expenditures in accordance with the Company's long-term borrowing agreements. At the end of September, long-term debt was reduced to $196.5 million from $201.8 million as the Company repaid the remaining $3 million of outstanding borrowings under its revolver from the June quarter end.
Bill Jasper, President and CEO of Unifi, said, "The continuing decline in sales of existing homes, cars and light trucks began taking a toll on our volume in the home furnishings and automotive business segments during the quarter, and we expect the ongoing softness in the economy to make our December quarter a challenging one. However, we will face these challenges with a strong financial base and flexibility that we have not had in the past, including the ability to shift the supply of our raw materials to the most competitive sources and to adjust our mix more efficiently and effectively. We feel confident that the Company will emerge from the economic downturn stronger and with new opportunities based on the actions we have taken over the past year to enhance our overall financial strength."
Unifi, Inc. (NYSE: UFI) is a diversified producer and processor of multi-filament polyester and nylon textured yarns and related raw materials. The Company adds value to the supply chain and enhances consumer demand for its products through the development and introduction of branded yarns that provide unique performance, comfort and aesthetic advantages. Key Unifi brands include, but are not limited to: AIO(R) - all-in-one performance yarns, SORBTEK(R), A.M.Y.(R), MYNX(R) UV, REPREVE(R), REFLEXX(R), MICROVISTA(R) and SATURA(R). Unifi's yarns and brands are readily found in home furnishings, apparel, legwear, and sewing thread, as well as industrial, automotive, military, and medical applications. For more information about Unifi, visit www.unifi.com, or to learn more about REPREVE(R), visit the new website www.repreve.com.
UNIFI, INC. CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) (In Thousands Except Per Share Data) For the Quarters Ended September 28, September 23, 2008 2007 Net sales $169,009 $170,536 Cost of sales 155,584 159,543 Selling, general & administrative expenses 10,545 14,454 Provision for bad debts 558 254 Interest expense 5,965 6,712 Interest income (913) (826) Other (income) expense, net (561) (1,006) Equity in earnings of unconsolidated affiliates (3,482) (178) Write down of long-lived assets - 533 Write down of investment in unconsolidated affiliate - 4,505 Restructuring charges - 2,632 Income (loss) from continuing operations before income taxes 1,313 (16,087) Provision (benefit) for income taxes 1,885 (6,931) Loss from continuing operations (572) (9,156) Loss from discontinued operations, net of tax (104) (32) Net loss $(676) $(9,188) Loss per common share (basic and diluted): Net loss - continuing operations $(0.01) $(0.15) Net loss - discontinued operations - - Net loss - basic and diluted $(0.01) $(0.15) Weighted average basic and diluted shares outstanding 61,134 60,537 UNIFI, INC. CONSOLIDATED BALANCE SHEETS (Amounts in Thousands) September 28, June 29, 2008 2008 (Unaudited) Assets Cash and cash equivalents $20,396 $20,248 Receivables, net 95,247 103,272 Inventories 127,994 122,890 Deferred income taxes 1,962 2,357 Assets held for sale 3,808 4,124 Restricted cash 7,308 9,314 Other current assets 4,290 3,693 Total current assets 261,005 265,898 Property, plant and equipment, net 167,845 177,299 Investments in unconsolidated affiliates 71,950 70,562 Restricted cash 19,989 26,048 Goodwill 18,579 18,579 Intangible assets, net 19,607 20,386 Other noncurrent assets 11,698 12,759 $570,673 $591,531 Liabilities and Shareholders' Equity Accounts payable $43,897 $44,553 Accrued expenses 26,061 25,531 Income taxes payable 832 681 Current maturities of long-term debt and other current liabilities 7,729 9,805 Total current liabilities 78,519 80,570 Long-term debt and other liabilities 198,518 204,366 Deferred income taxes 657 926 Shareholders' equity 292,979 305,669 $570,673 $591,531UNIFI, INC. CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) (Amounts in Thousands) For the Quarters Ended September 28, September 23, 2008 2007 Cash and cash equivalents at beginning of year $20,248 $40,031 Operating activities: Net loss (676) (9,188) Adjustments to reconcile net loss to net cash provided by (used in) continuing operating activities: Loss from discontinued operations 104 32 Earnings of unconsolidated equity affiliates, net of distributions (1,417) 282 Depreciation 8,980 9,599 Amortization 1,069 1,162 Stock-based compensation expense 282 107 Deferred compensation expense, net (81) 30 Net gain on asset sales (316) (142) Non-cash write down of long-lived assets - 533 Non-cash write down of investment in equity affiliate - 4,505 Non-cash portion of restructuring charges - 2,632 Deferred income tax benefit (115) (7,524) Provision for bad debts 558 254 Other 296 (473) Change in assets and liabilities, excluding effects of acquisitions and foreign currency adjustments (6,082) (3,016) Net cash provided by (used in) continuing operating activities 2,602 (1,207) Investing activities: Capital expenditures (3,569) (1,064) Change in restricted cash 5,183 (915) Proceeds from sale of capital assets 101 2,216 Return of capital from equity affiliate - 234 Other (94) 264 Net cash provided by investing activities 1,621 735 Financing activities: Borrowings of long-term debt 4,600 157 Payments of long-term debt (9,080) (6,705) Proceeds from stock option exercises 3,551 - Other 37 33 Net cash used in financing activities (892) (6,515) Cash flows of discontinued operations: Operating cash flow (114) (78) Net cash used in discontinued operations (114) (78) Effect of exchange rate changes on cash and cash equivalents (3,069) 893 Net increase (decrease) in cash and cash equivalents 148 (6,172) Cash and cash equivalents at end of period $20,396 $33,859
Certain statements included herein contain forward-looking statements within the meaning of federal security laws about Unifi, Inc.'s (the "Company") financial condition and results of operations that are based on management's current expectations, estimates and projections about the markets in which the Company operates, as well as management's beliefs and assumptions. Words such as "expects," "anticipates," "believes," "estimates," variations of such words and other similar expressions are intended to identify such forward-looking statements. These statements are not guarantees of future performance and involve certain risks, uncertainties and assumptions, which are difficult to predict. Therefore, actual outcomes and results may differ materially from what is expressed or forecasted in, or implied by, such forward-looking statements. Readers are cautioned not to place undue reliance on these forward-looking statements, which reflect management's judgment only as of the date hereof. The Company undertakes no obligation to update publicly any of these forward-looking statements to reflect new information, future events or otherwise.
Factors that may cause actual outcome and results to differ materially from those expressed in, or implied by, these forward-looking statements include, but are not necessarily limited to, availability, sourcing and pricing of raw materials, pressures on sales prices and volumes due to competition and economic conditions, reliance on and financial viability of significant customers, operating performance of joint ventures, alliances and other equity investments, technological advancements, employee relations, changes in construction spending, capital expenditures and long-term investments (including those related to unforeseen acquisition opportunities), continued availability of financial resources through financing arrangements and operations, outcomes of pending or threatened legal proceedings, negotiation of new or modifications of existing contracts for asset management and for property and equipment construction and acquisition, regulations governing tax laws, other governmental and authoritative bodies' policies and legislation, and proceeds received from the sale of assets held for disposal. In addition to these representative factors, forward-looking statements could be impacted by general domestic and international economic and industry conditions in the markets where the Company competes, such as changes in currency exchange rates, interest and inflation rates, recession and other economic and political factors over which the Company has no control. Other risks and uncertainties may be described from time to time in the Company's other reports and filings with the Securities and Exchange Commission.
SOURCE Unifi, Inc.
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