Unifi, a multi-national producer of textured and other processed yarns, has reported an increase in net income for the third quarter ended 29 March 2015, which constituted US 10.0 million, compared to the net income of US 4.7 million for the prior year quarter. 

These earnings reflect improved operating results for the company's global operations and equity affiliates, along with a lower effective tax rate, and were achieved despite the effects of a significant devaluation of the Brazilian Real and a loss on extinguishment of debt.

Other highlights

The growing demand for synthetic yarn in the NAFTA and CAFTA regions increased textured polyester sales volumes by more than 7%. The gross profit improved to US 22.3 million, or 13.1% of net sales, from US 19.8 million, or 11.2% of net sales, for the prior year quarter.

Adjusted EBITDA amounted to US 14.9 million for the March 2015 quarter, an improvement from US 12.6 million for the prior year quarter.

The company has also amended and restated its credit facility to, among other things, extend the maturity date to March 2020, reduce the interest rate on applicable borrowings and allow for potential annual capacity increases.

Strong operating results

The devaluation of the Brazilian Real adversely affected net sales, and was the principal driver of the US 6.4 million net sales decrease, from US 176.9 million for the prior year quarter to US 170.5 million for the March 2015 quarter. However, higher consolidated sales volumes, as well as higher margins in the Polyester and International Segments, helped yield the strong operating results for the quarter, the company reports.

“Growth in textured polyester in the NAFTA and CAFTA regions, along with greater demand for our premier value-added yarns in all regions, helped drive our strong operating results in the quarter and for the fiscal year to date,” said Roger Berrier, President and Chief Operating Officer of Unifi.

“We recently expanded the production capacity of our texturing operations, and based on the continued success and growth of REPREVE, we will be expanding our Repreve Recycling Center and also installing a state-of-the-art plastic bottle processing facility over the next 12-15 months.”

Growth-related opportunities

Net income was US 26.5 million, for the nine months ended 29 March 2015, compared to net income of US 20.1 million, for the prior year nine-month period.  Net sales increased by US 1.7 million, or 0.3%, to US 507.9 million for the current year nine-month period compared to net sales of US 506.2 million for the prior year nine-month period, primarily due to improved sales volumes, notwithstanding the substantial offset attributable to the unfavourable currency translation in Brazil.

“We will continue to evaluate opportunities to increase capacity in the CAFTA and NAFTA regions to capitalize on the growth of synthetic apparel and demand for premier value-added yarns,” commented Bill Jasper, Chairman and CEO of Unifi.

“The enhancements to our credit facility, especially the ability to increase our borrowing capacity annually without further amendments to the agreement, provide us an even stronger foundation to support these and other strategic capital projects as we pursue profitable growth-related opportunities over the next few years.”

www.repreve.com