-----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, rcW6hGoajIoZH1ziKW0cON2vHHiYs0g6JulbVFXdXy/VXOGnubmJa8lpZurU3CFF BkV8T47xNFbvwaWcgcgNdg== 0000100726-95-000013.txt : 19950511 0000100726-95-000013.hdr.sgml : 19950511 ACCESSION NUMBER: 0000100726-95-000013 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19950326 FILED AS OF DATE: 19950510 SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: UNIFI INC CENTRAL INDEX KEY: 0000100726 STANDARD INDUSTRIAL CLASSIFICATION: TEXTILE MILL PRODUCTS [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: 95535903 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 1: 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 March 26, 1995 [] 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 April 30, 1995 Common Stock, par value $.10 per share 68,137,505 Shares Part I. Financial Information UNIFI, INC. Condensed Consolidated Balance Sheets March 26, June 26, 1995 1994 (Unaudited) (Audited) (Amounts in Thousands) ASSETS Current Assets: Cash and Cash Equivalents $66,931 $80,653 Short-Term Investments 69,450 71,483 Accounts Receivable, Net 204,387 200,537 Inventories Raw Materials and Supplies $57,003 $29,797 Work in Process 14,235 12,937 Finished Goods 55,186 57,545 $126,424 $100,279 Other Current Assets 9,367 3,605 Total Current Assets $476,559 $456,557 Property, Plant and Equipment $891,413 $848,637 Less: Accumulated Depreciation 380,748 336,375 $510,665 $512,262 Investments in Affiliates $173 $10,626 Other Assets $21,886 $23,807 Total Assets $1,009,283 $1,003,252 LIABILITIES AND SHAREHOLDERS' EQUITY Current Liabilities: Notes Payable $-- $25 Accounts Payable 82,050 83,831 Accrued Expenses 50,390 56,295 Income Taxes 10,937 12,132 Total Current Liabilities $143,377 $152,283 Long-Term Debt $230,000 $230,000 Deferred Income Taxes $37,606 $32,447 Shareholders' Equity Common Stock $6,811 $7,043 Capital in Excess of Par 141,853 199,959 Retained Earnings 446,464 385,472 Cumulative Translation Adjustment 2,297 (3,060) Reserve for Investments 875 (892) Total Shareholders' Equity $598,300 $588,522 Total Liabilities and Shareholders' Equity $1,009,283 $1,003,252 See Accompanying Notes to Condensed Consolidated Financial Statements. UNIFI, INC. Condensed Consolidated Statements of Income (Unaudited) For the Quarters For the Nine Months Ended Ended March 26, March 27, March 26, March 27, 1995 1994 1995 1994 (Amounts in Thousands Except Per Share Data) Net Sales $403,001 $346,059 $1,149,492 $1,022,930 Costs and Expenses: Cost of Goods Sold $344,699 $295,470 $987,741 $874,052 Selling, General & Admin. Expense 11,055 10,661 31,016 30,419 Interest Expense 3,983 4,432 11,856 13,711 Interest Income (2,507) (1,029) (7,560) (5,749) Other (Income)Expense (4,526) (1,358) (7,364) (1,422) $352,704 $308,176 $1,015,689 $911,011 Income Before Income Taxes $50,297 $37,883 $133,803 $111,919 Income Taxes 19,247 15,129 51,944 44,992 Net Income $31,050 $22,754 $81,859 $66,927 Earnings Per Share: Primary $.45 $.32 $1.17 $.94 Fully Diluted $.43 $.32 $1.14 $.93 Cash Dividends Per Share $.10 $.14 $.30 $.42 Average Shares Outstanding: Primary 68,699 71,027 69,955 71,048 Fully Diluted 76,470 78,780 77,715 78,810 See Accompanying Notes to Condensed Consolidated Financial Statements. UNIFI, INC. Condensed Consolidated Statements of Cash Flows (Unaudited) For the Nine Months Ended March 26, March 27, 1995 1994 (Amounts in Thousands) Cash and Cash Equivalents Provided by $92,741 $81,645 Operating Activities Investing Activities: Capital Expenditures $(64,175) $(98,994) Sale of Capital Assets 2,078 3,061 Notes Receivable 4,983 (22) Sale of Subsidiary 13,798 -- Sale of Investments 80,460 42,015 Purchase of Investments (64,659) (4) Net Investing Activities $(27,515) $(53,944) Financing Activities: Issuance of Common Stock $410 $499 Borrowing of Debt -- 7,453 Repayment of Debt (25) (28,545) Cash Dividend (20,867) (29,198) Purchase and Retirement of Common Stock (58,748) -- Net Financing Activities $(79,230) $(49,791) Currency Translation Adjustment $282 $10 Increase (Decrease) in Cash $(13,722) $(22,080) Cash and Cash Equivalents - Beginning 80,653 76,093 Cash and Cash Equivalents - Ending $66,931 $54,013 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 March 26, 1995 and the results of operations and cash flows for the periods ended March 26, 1995 and March 27, 1994. 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 timing differences between the 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. The current periods' operating results were more favorably impacted by foreign operations than the prior periods' which contributed to the lower effective tax rates. (c)Per Share Information 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 Nine Months Ended Mar.26, Mar.27, Mar.26, Mar.27, 1995 1994 1995 1994 Average Shares 68,127 70,482 69,427 70,419 Outstanding Add: Dilutive Options 572 545 528 629 Primary Average Shares 68,699 71,027 69,955 71,048 Incremental Shares Arising from Full Dilution Assumption 7,771 7,753 7,760 7,762 Average Shares Assuming Full Dilution 76,470 78,780 77,715 78,810 Computation of net income for per share data (in 000's): Quarters Ended Nine Months Ended Mar.26, Mar.27, Mar.26, Mar.27, 1995 1994 1995 1994 Net Income - Primary $31,050 $22,754 $81,859 $66,927 Add: Convertible Subordinated Interest Net of Tax 2,147 2,111 6,442 6,332 Net Income Assuming Full Dilution $33,197 $24,865 $88,301 $73,259 (d)Common Stock On April 20, 1995, the Company's Board of Directors declared a cash dividend of 10 cents per share payable to shareholders of record on May 5, 1995, payable on May 12, 1995. Management's Discussion and Analysis of Financial Condition and Results of Operations The following is Management's discussion and analysis of certain significant factors which 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 from $346.1 million to $403.0 million in the quarter or 16.5% and increased in the nine month period from $1.023 billion in 1994 to $1.149 billion in 1995 or 12.4%. We experienced volume increases of 14.3% for the quarter and 14.9% for the year-to-date period over the prior year periods. Our average net sales price, based on the overall product mix, increased 1.9% in the current quarter and decreased 2.2% for the current nine month period. Domestic unit volume increased 12.0% for the quarter and 13.6% year-to-date. Unit sales of our polyester yarns were favorable during the quarter compared to the corresponding period of the prior year consistent with the year-to- date results. We have begun an expansion in our domestic polyester texturing operations that will increase our capacity by approximately seven percent by the end of the first quarter of Fiscal 1996. Average unit price for polyester has improved for both the current quarter and year-to-date. Volume for our nylon operations in the current quarter improved over the corresponding period of the prior year but is down year-to-date. Average unit price for our nylon products has declined for both the current quarter and year-to- date. Capacity expansions in our spun facilities has resulted in volume increases for both the current quarter and year-to-date. Average unit price has also improved in both current periods. Our European polyester yarn operation unit volume has increased in both the current quarter and year-to-date. Average unit price has also improved as we have increased prices to partially offset the effect of higher raw materials costs. Average unit price in US dollar terms has also been impacted by the further weakening of the U.S. dollar over the corresponding periods of the prior year. European polyester yarn productive capacity will be increased approximately 30% over the period of the next three calendar quarters. Cost of goods sold as a percentage of net sales remained relatively consistent at 85.5% in the current quarter compared to 85.4% in last year's March quarter as higher raw yarn costs were mostly offset by improved sales prices. The current quarter was also assisted by lower manufacturing expenses as our increased sales diluted our per unit costs. For the year-to- date periods, cost of goods sold increased from 85.4% to 85.9% of net sales due to the combination of lower average unit sales price and slightly higher per unit raw yarn costs. Lower per unit fixed manufacturing charges in the current period, however, have mitigated the effects of these changes. During the quarter selling, general and administrative expenses increased from $10.7 million in 1994 to $11.1 million in 1995. For the nine month period selling, general and administrative expenses increased from $30.4 million in 1994 to $31.0 million in 1995. Selling, general and administrative expenses as a percentage of net sales decreased from 3.1% in the prior year quarter to 2.7% in the current quarter. For the nine month periods we experienced a decrease from 3.0% in 1994 to 2.7% in 1995. This improved ratio for both the current quarter and year-to-date reflects the absorption of the higher current period costs over larger net sales amounts. Interest expense decreased from $4.4 million in the 1994 quarter to $4.0 million in the current quarter. For the nine month periods interest expense decreased from $13.7 million in the prior year to $11.9 million in the current year. The reduction in interest expense is attributed to lower debt levels as debt acquired in prior year mergers was retired throughout Fiscal 1994. Interest income improved from $1.0 million in the prior year quarter to $2.5 million in the current quarter and from $5.7 million in the prior year-to- date to $7.6 million in the current nine month period. Other (income) expense represents income in all periods presented. Other income increased from $1.4 million to $4.5 million or $3.1 million during the current quarter and increased from $1.4 million to $7.4 million or $6.0 million during the current nine month period. The year-to-date income includes the recognition of a $3.1 million gain on the sale of an investment that had been previously deferred pending collection of a note receivable balance. In addition, a gain of $2.7 million on the sale of an equity investment contributed to the increase noted in both the current quarter and year-to-date periods. Our effective tax rate was 38.3% in the current quarter as compared with 39.9% in the prior year quarter. For the year-to-date periods, the rate was 38.8% and 40.2% in 1995 and 1994, respectively. The lower rates in the current periods are due to taxable earnings of foreign subsidiaries comprising a larger percentage of total consolidated pretax income. These earnings are taxed at rates lower than US rates. Earnings per share increased from $.32 per share to $.45 per share in the current quarter and increased from $.94 per share to $1.17 for the current nine month period. Liquidity and Capital Resources We ended the current quarter with working capital of $333.2 million of which $136.4 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. Inventories increased $26.1 million from $100.3 million at June 26, 1994 to $126.4 million at March 26, 1995 as we are maintaining higher levels of raw yarn inventories in anticipation of continued strong demand and capacity increases. This increase is also attributable to overall higher per unit raw material prices. Our primary source of cash funds is from operating activities which generated $92.7 million in cash and cash equivalents for the year-to-date period ended March 26, 1995. The Company utilized $27.5 million and $79.2 million for net investing and financing activities, respectively for the nine months ended March 26, 1995. These net investing and financing activities were primarily comprised of $34.6 million received from net investment activity, including $13.8 million from the sale of its French subsidiary, and funds used for capacity expansions and upgrades totaling $64.2 million, the payment of the Company's cash dividends of $20.9 million and the purchase and retirement of Company common stock of $58.7 million. Management believes the current financial position of the Company in connection with its operations and its access to debt and equity markets are sufficient to meet anticipated capital expenditure, strategic acquisition, working capital and other financial needs. Part II. Other Information UNIFI, INC. Item 6. Exhibits and Reports on Form 8-K (a) Exhibit (27) Financial Data Schedule (b) No reports on Form 8-K have been filed during the quarter ended March 26, 1995. 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: MAY 9, 1995 WILLIS C. MOORE, III Willis C. Moore, III Vice President and Chief Financial Officer (Mr. Moore is the Principal Financial and Accounting Officer and has been duly authorized to sign on behalf of the Registrant.) EX-27 2
5 THE SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE COMPANY'S QUARTERLY REPORT FOR THE NINE MONTH PERIOD ENDED MARCH 26, 1995 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS. 1000 9-MOS JUN-25-1995 MAR-26-1995 66,931 69,450 204,387 0 126,424 476,559 891,413 380,748 1,009,283 143,377 230,000 6,811 0 0 591,489 1,009,283 1,149,492 1,149,492 987,741 987,741 0 0 11,856 133,803 51,944 81,859 0 0 0 81,859 1.17 1.14 OTHER STOCKHOLDERS' EQUITY OF $591,489 IS COMPRISED OF CAPITAL IN EXCESS OF PAR OF $141,853, RETAINED EARNINGS OF $446,464, CUMULATIVE TRANSLATION ADJUSTMENT OF $2,297 AND RESERVE FOR INVESTMENTS OF $875.
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