-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: keymaster@town.hall.org Originator-Key-Asymmetric: MFkwCgYEVQgBAQICAgADSwAwSAJBALeWW4xDV4i7+b6+UyPn5RtObb1cJ7VkACDq pKb9/DClgTKIm08lCfoilvi9Wl4SODbR1+1waHhiGmeZO8OdgLUCAwEAAQ== MIC-Info: RSA-MD5,RSA, JTLeLI/sKGk9VrG0MHfHB9fqzAekG31gRm2CtzEL1B/1ImwHrGHyQE+XEAWA3BZv eRyHhm+G+ETNKhbqj/Yu5w== 0000100726-94-000015.txt : 19941117 0000100726-94-000015.hdr.sgml : 19941117 ACCESSION NUMBER: 0000100726-94-000015 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19940925 FILED AS OF DATE: 19941109 SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: UNIFI INC CENTRAL INDEX KEY: 0000100726 STANDARD INDUSTRIAL CLASSIFICATION: 2200 IRS NUMBER: 112165495 STATE OF INCORPORATION: NY FISCAL YEAR END: 0630 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 001-10542 FILM NUMBER: 94558210 BUSINESS ADDRESS: STREET 1: 7201 WEST FRIENDLY RD STREET 2: P O BOX 19109 CITY: GREENSBORO STATE: NC ZIP: 27410-9109 BUSINESS PHONE: 9192944410 MAIL ADDRESS: STREET 2: P O BOX 19109 CITY: GREENSBORO STATE: NC ZIP: 24719-9109 FORMER COMPANY: FORMER CONFORMED NAME: AUTOMATED ENVIRONMENTAL SYSTEMS INC DATE OF NAME CHANGE: 19720906 10-Q 1 FORM 10-Q SECURITIES AND EXCHANGE COMMISSION Washington, DC 20549 [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 25, 1994 [] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission File Number 1-10542 UNIFI, INC. (Exact name of registrant as specified its charter) New York 11-2165495 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) P.O. Box 19109 - 7201 West Friendly Road Greensboro, NC 27419 (Address of principal executive offices) (Zip Code) (910) 294-4410 (Registrant's telephone number, including area code) Same (Former name, former address and former fiscal year, if changed since last report) Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes X No APPLICABLE ONLY TO CORPORATE ISSUERS: Indicate the number of shares outstanding of each of the issuer's class of common stock, as of the latest practicable date. Class Outstanding at September 25, 1994 Common Stock, par value $.10 per share 70,462,217 Shares UNIFI, INC. Condensed Consolidated Balance Sheets September 25, June 26, 1994 1994 (Unaudited) (Audited) (Amounts in Thousands) ASSETS Current Assets: Cash and Cash Equivalents $107,165 $80,653 Short-Term Investments 69,629 71,483 Accounts Receivable, Net 190,174 200,537 Inventories Raw Materials and Supplies $43,818 $29,797 Work in Process 13,323 12,937 Finished Goods 56,379 57,545 $113,520 $100,279 Other Current Assets 3,754 3,605 Total Current Assets $484,242 $456,557 Property, Plant and Equipment $860,336 $848,637 Less: Accumulated Depreciation 349,461 336,375 $510,875 $512,262 Investments in Affiliates $10,815 $10,626 Other Assets $26,559 $23,807 Total Assets $1,032,491 $1,003,252 LIABILITIES AND SHAREHOLDERS' EQUITY Current Liabilities: Notes Payable $-- $137 Accounts Payable 95,186 83,831 Accrued Expenses 43,541 56,183 Income Taxes 20,735 12,132 Total Current Liabilities $159,462 $152,283 Long-Term Debt $230,000 $230,000 Deferred Income Taxes $32,964 $32,447 Shareholders' Equity Common Stock $7,046 $7,043 Capital in Excess of Par 201,833 199,959 Retained Earnings 401,116 385,472 Cumulative Translation Adjustment 911 (3,060) Reserve for Investments (841) (892) Total Shareholders' Equity $610,065 $588,522 Total Liabilities and $1,032,491 $1,003,252 Shareholders' Equity See Accompanying Notes to Condensed Consolidated Financial Statements. UNIFI, INC. Condensed Consolidated Statements of Income (Unaudited) For the Quarters Ended September 25, September 26, 1994 1993 (Amounts in Thousands Except Per Share Data) Net Sales $359,194 $325,355 Costs and Expenses: Cost of Goods Sold $310,860 $279,630 Selling, General & Administrative 9,674 9,573 Expense Interest Expense 3,938 5,093 Interest Income (2,652) (2,713) Other (Income) Expense (579) 204 $321,241 $291,787 Income Before Income Taxes $37,953 $33,568 Income Taxes 15,264 13,756 Net Income $22,689 $19,812 Earnings Per Share: Primary $.32 $.28 Fully Diluted $.32 $.28 Cash Dividends Per Share $.10 $.14 Average Shares Outstanding: Primary 70,952 71,090 Fully Diluted 78,705 78,843 See Accompanying Notes to Condensed Consolidated Financial Statements. UNIFI, INC. Condensed Consolidated Statements of Cash Flows (Unaudited) For the Quarters Ended September 25, September 26, 1994 1993 (Amounts in Thousands) Cash and Cash Equivalents Provided by $41,568 $18,441 Operating Activities Investing Activities: Capital Expenditures $(23,736) $(44,250) Sale of Capital Assets 308 -- Notes Receivable (306) 915 Sale of Subsidiary - Note (e) 13,798 -- Sale of Investments 1,580 4,598 Net Investing Activities $(8,356) $(38,737) Financing Activities: Issuance of Common Stock $299 $17 Borrowing of Debt -- 7,453 Repayment of Debt (25) (24,563) Cash Dividend (7,045) (9,463) Net Financing Activities $(6,771) $(26,556) Currency Translation Adjustment $71 $(75) Increase (Decrease) in Cash $26,512 $(46,927) Cash and Cash Equivalents - Beginning 80,653 76,093 Cash and Cash Equivalents - Ending $107,165 $29,166 See Accompanying Notes to Condensed Consolidated Financial Statements. UNIFI, INC. Notes to Condensed Consolidated Financial Statements (a)Basis of Presentation The information furnished is unaudited and reflects all adjustments which are, in the opinion of Management, necessary to present fairly the financial position at September 25, 1994 and the results of operations and cash flows for the quarters ended September 25, 1994 and September 26, 1993. Such adjustments consisted of normal recurring items. Interim results are not necessarily indicative of results for a full year. It is suggested that the condensed financial statements be read in conjunction with the financial statements and notes thereto included in the Company's latest annual report on Form 10-K. (b)Income Taxes Deferred income taxes arise primarily from temporary differences between financial and tax basis of assets and liabilities, principally property and equipment. The difference between the statutory federal income tax rate and the effective tax rate is primarily due to results of foreign subsidiaries which are taxed at rates below those of U.S. operations. Neither quarters' operating results were significantly impacted by foreign operations; therefore, the rate for both periods approximates the statutory rate. Per Share Information (c) Earnings per common share are computed on the basis of the number of shares outstanding, adjusted for the dilutive effect of stock options outstanding. The Convertible Notes do not meet the test of a common stock equivalent, accordingly, conversion of these notes is only assumed for the calculation of fully diluted earnings per share. Computation of average shares outstanding (in 000's): Quarters Ended September 25, September 26, 1994 1993 Average Shares Outstanding 70,449 70,340 Add: Dilutive Options 503 750 Primary Average Shares 70,952 71,090 Incremental Shares Arising from Full Dilution 7,753 7,753 Assumption Average Shares Assuming Full Dilution 78,705 78,843 Computation of net income for per share data (in 000's): Quarters Ended September 25, September 26, 1994 1993 Net Income - Primary $22,689 $19,812 Add: Convertible Subordinated Interest Net of Tax 2,169 2,103 Net Income Assuming Full Dilution $24,858 $21,915 (d)Common Stock On October 20, 1994 the Company's Board of Directors declared a cash dividend of 10 cents per share payable on November 10, 1994 to shareholders of record on November 3, 1994. (e)Sale of Subsidiary During the current quarter the Company completed the sale of its wholly- owned French subsidiary, Unifi Texturing, S.A. (UTSA). Net cash proceeds from the sale totaled $13.8 million, excluding $4.1 million of cash remitted to the Parent from UTSA in conjunction with the sale. The transaction had no significant impact on current quarter earnings. The results of operations of UTSA were not significant to the consolidated Company for either period presented. Management's Discussion and Analysis of Financial Condition and Results of Operations The following is Management's discussion and analysis of certain significant factors that have affected the Company's operations and material changes in financial condition during the periods included in the accompanying Condensed Consolidated Financial Statements. Results of Operations Net sales increased 10.4% in the quarter from $325.4 million to $359.2 million. Volume increased 17.5% for the quarter while average unit price, based on overall product mix, decreased 6.0% during this period. Our domestic polyester operations performed well in the first quarter. Volume increases were experienced in both the dyed and undyed portions of the business. Dyed yarn prices were increased at the beginning of the quarter while prices for our natural yarns will be increasing in the second quarter. Demand for our polyester yarn remains strong in the automotive, home furnishings and export areas in addition to solid demand for our warped and twisted yarns. Domestic nylon and covered yarn volume declined slightly from the corresponding period of the prior year together with a decrease in average unit price. We anticipate good business in the sock grouping and a more steady demand in women's hosiery and legwear in the upcoming months. Volume for our spun division increased for the quarter while average per unit price declined due to pressures on selling prices. If demand remains good, we would anticipate improved margins in our spun business in the second half of Fiscal 1995 as old sales contracts begin to expire at the end of our second quarter. Volume for our European polyester business remains good although we face rising raw material prices. In anticipation of further raw material price increases we are pushing our selling prices upward and repositioning our product mix to help margin improvement. Cost of sales increased from $279.6 million in last year's first quarter to $310.9 million in this year's first quarter or 11.2%. Cost of sales as a percentage of net sales for the quarter increased slightly from 85.9% last year to 86.6% this year. This is mainly the result of the decline in average unit sales price discussed above as sales volume has increased significantly and components of cost of sales have improved on a per unit basis. Average raw material costs per unit, based on overall product mix, have declined approximately 2.5%. Manufacturing costs have also experienced a decline during this time period on a per unit basis as was the case for depreciation. These improvements in cost per unit primarily resulted from increased volume in our polyester and spun yarn businesses. Our gross margins have declined approximately 0.6% from last year's first quarter to the current quarter due to lower average net sales prices based on our overall product mix. Selling, general and administrative expenses as a percentage of net sales decreased from 2.9% to 2.7% in the current quarter. During the quarter actual expense increased from $9.6 million to $9.7 million. The improvement in selling, general and administrative expenses as a percentage of sales is attributable to increased sales volume. Interest expense decreased from $5.1 million in the prior fiscal year first quarter to $3.9 million in the current quarter. During the first quarter of the prior year, the Company paid off approximately $24.6 million of debt acquired through merged companies and borrowed $7.5 million of additional debt. The combination of the interest expense on the newly acquired debt and the interest charged on the debt extinguished through the pay-off date resulted in higher interest expense in the September 1993 quarter than in the current quarter. Interest income has remained relatively constant during the quarter compared to the corresponding period of the prior year. Other (income) expense reflects an improvement of $783 thousand over the first quarter of the prior fiscal year. In the current quarter, the Company recognized gains on the sale of investments and property, plant and equipment. Currency exchange gains and income from an equity investment in the current quarter also contributed to the increase. Our effective tax rate was 40.2% in the current quarter as compared with 41.0% in the prior quarter. The lower rate in the current period is due to taxable earnings of foreign subsidiaries representing a larger contribution of total consolidated pretax income. Taxes on foreign earnings are normally at rates lower than US rates. Quarterly earnings per share increased from $.28 to $.32. Liquidity and Capital Resources The primary source of cash funds for the Company during the current quarter was from operating activities that contributed $41.6 million in cash and cash equivalents. Net income and noncash expenses comprised $40.9 million of this amount. The Company substantially completed the sale of its European nylon operations in the current quarter. This generated approximately $13.8 million in net cash proceeds, excluding $4.1 million of cash remitted to the Parent from UTSA in conjunction with the sale. The primary uses of funds during this period were capital expenditures of $23.7 million and the payment of cash dividends of $7.0 million. The Company ended the current quarter with working capital of $324.8 million of which $176.8 million represents cash and short-term investments. This compares with working capital of $304.3 million and cash reserves of $152.1 million at year-end. Management believes that the current financial position of the Company in addition to its operations and access to debt and equity markets is sufficient to meet anticipated capital expenditure, strategic acquisition, working capital and other financial needs. UNIFI, INC. PART II - OTHER INFORMATION Item 6. Exhibits and Reports on Form 8-K (a) Part I Exhibit (27) Financial Data Schedule (b)No reports on Form 8-K have been filed during the quarter ended September 25, 1994. UNIFI, INC. SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. UNIFI, INC. Date: 11/09/94 ROBERT A. WARD Robert A. Ward Executive Vice President- Financial and Administration (Mr. Ward is the Principal Financial and Accounting Officer and has been duly authorized to sign on behalf of the Registrant.) Date: 11/09/94 NORMA R. NIXON Norma R. Nixon Corporate Controller EX-27 2
5 THE SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE COMPANY'S QUARTERLY REPORT FOR THE QUARTER ENDED SEPTEMBER 25, 1994, AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS. 1000 3-MOS JUN-25-1995 SEP-25-1994 107,165 69,629 190,174 0 113,520 484,242 860,336 349,461 1,032,491 159,462 230,000 7,046 0 0 603,019 1,032,491 359,194 359,194 310,860 310,860 0 0 3,938 37,953 15,264 22,689 0 0 0 22,689 .32 .32 OTHER-SE OF $603,019 IS COMPRISED OF CAPITAL IN EXCESS OF PAR OF $201,833, RETAINED EARNINGS OF $401,116, CUMULATIVE TRANSLATION ADJUSTMENT OF $911 AND RESERVE FOR INVESTMENTS OF $(841).
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