EX-99 2 unifioctearnings1.htm Unifi Announces Second Quarter Results

Exhibit 99.1

For more information, contact:
William M. Lowe, Jr.
Vice President
Chief Operating Officer
Chief Financial Officer
(336) 316-5664

Unifi Announces First Quarter Results

             GREENSBORO, N.C. - October 21, 2004 - Unifi, Inc. (NYSE:UFI) today released operating results for its first quarter ending September 26, 2004.

             The Company reported a net loss from continuing operations of $1.3 million or $0.02 per share for the quarter ending September 26, 2004 compared to a net loss of $2.6 million or $0.05 per share for the prior year September quarter.  Net income, including discontinued operations, was a net loss of $22.6 million or $0.43 per share, which includes the operations and associated charges related to the closure of the Company's facility in Ireland.

             Net sales from continuing operations for the September quarter of $180.2 million were up $16.5 million or 10.1% compared to net sales of $163.7 million for the prior year September quarter.   Sales volume from continuing operations increased 7.4% this quarter over the prior comparable quarter.

            "The Company recorded an operating profit from continuing operations of $1.0 million in the current quarter compared to a loss of $1.0 million in the prior year quarter, indicating that the broad set of actions taken over this calendar year has strengthened our underlying business," said Bill Lowe, Chief Operating Officer and CFO for Unifi.  "This also marks the second consecutive quarter in which we posted an operating profit, which is significant in that we have accomplished this as raw materials have risen by approximately 25 percent since the prior comparable quarter.  There are more challenges ahead, but we are making steady progress in stabilizing our base business."

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Unifi Announces First Quarter Results - page 2

         Selling, general and administrative expenses were 5.3% of sales from continuing operations compared to 7.6% of last year's comparable quarter.  Cash-on-hand at September 26, 2004 was $45.7 million.

         "One can clearly see the combined impact of our business building and consolidation efforts reflected in the operating results of our continuing operations," said Brian Parke, Chairman and Chief Executive Officer of Unifi.   "Our cost structure today is closely aligned with current market demands, and the strength of our balance sheet allows us to pursue strategic business opportunities.  We will continue to be proactive in our efforts to maximize growth in the global supply chain and manage costs and capacity relative to market conditions."

          Unifi is a diversified producer and processor of textured yarns.  Its primary business is the texturing, dyeing, twisting, covering, and beaming of multi-filament polyester and nylon yarns.  Unifi's textured yarns are found in home furnishings, apparel and industrial fabrics, automotive, upholstery, hosiery, and sewing thread.

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Financial Statements to Follow

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Unifi Announces First Quarter Results - page 3

UNIFI, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

(UNAUDITED) (In Thousands Except Per Share Data)

 For the Quarters Ended

September 26, 2004

September 28, 2003

Net sales

 $                    180,155

 $                    163,721

Cost of goods sold

                       169,595

                       152,262

Selling, general & administrative expense

                           9,514

                         12,423

Operating profit (loss)

                           1,046

                             (964)

Interest expense

                           4,667

                           4,741

Interest income

                              413

                              742

Other (income) expense, net

                              458

                              576

Equity in earnings of

   unconsolidated affiliates

                           1,117

                              257

Minority interest income

                              188

                              955

Loss before income tax benefit

                          (2,361)

                          (4,327)

Benefit for income taxes

                          (1,105)

                          (1,730)

Loss from continuing operations

                          (1,256)

                          (2,597)

Loss from discontinued operations - net of tax

                        (21,299)

                          (1,965)

Net loss

 $                     (22,555)

 $                       (4,562)

Earnings (losses) per common share

   (basic and diluted):

            Net loss - continuing operations

 $                         (0.02)

 $                         (0.05)

            Net loss - discontinued operations

 $                         (0.41)

 $                         (0.04)

Average diluted shares outstanding

52,077

52,746

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Unifi Announces First Quarter Results - page 4

 

UNIFI, INC.

CONSOLIDATED BALANCE SHEETS

(UNAUDITED) (In Thousands)

September 26, 2004

June 27, 2004

Assets

Cash and cash equivalents

 $                      45,726

 $                      65,221

Receivables

                       129,514

                       125,949

Inventories

                       117,870

                       116,995

Deferred income taxes

                         13,721

                         12,237

Assets held for sale

                         13,225

                         13,899

Other current assets

                         10,129

                         10,657

    Total current assets

                       330,185

                       344,958

Property, plant and equipment

                       332,171

                       341,559

Investment in unconsolidated affiliates

                       165,124

                       163,941

Other noncurrent assets

                         19,861

                         22,077

 $                    847,341

 $                    872,535

Liabilities and Shareholders' Equity

Accounts payable

 $                      70,311

 $                      75,504

Accrued expenses

                         45,250

                         44,850

Income taxes payable

                           2,142

                           1,523

Current maturities of long-term debt

   and other current liabilities

                           8,820

                           8,497

     Total current liabilities

                       126,523

                       130,374

Long-term debt and other liabilities

                       264,103

                       263,779

Deferred income taxes

                         67,968

                         71,921

Minority interests

                           4,371

                           4,560

Shareholders' equity

                       384,376

                       401,901

 $                    847,341

 $                    872,535

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Unifi Announces First Quarter Results - page 5

UNIFI, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

 

 

(UNAUDITED) (In Thousands)

 

For the  Quarters Ended

September 26, 2004

September 28, 2003

Cash and cash equivalents at beginning of year

 $                   65,221

 $                      76,801

Cash and cash equivalents provided by (used in)

     continuing operations:

Net loss

                      (1,256)

                         (2,597)

Income charges not affecting cash:

Net earnings of  unconsolidated equity affiliates,

     net of distributions

                      (1,117)

                            (118)

Depreciation

                      12,675

                        14,773

Amortization

                           307

                             322

Net gain on asset sales

                         (337)

                                  -

Deferred income tax

                      (5,406)

                         (2,227)

Provision for bad debts and quality claims

                           820

                             482

Other noncurrent assets

                        4,109

                                  -

Other

                         (292)

                          1,405

Change in assets and liabilities, excluding

     effects of acquisitions and foreign

       currency adjustments

                        (8,328)

                         (3,937)

 Net cash provided by operating activities

                          1,175

                          8,103

Cash used in  investing activities of continuing

     operations:

Capital expenditures

                      (1,551)

                         (2,257)

Strategic investment costs

                      (1,145)

                            (332)

Investment in foreign restricted assets

                      (1,261)

                            (404)

Collection of notes receivable

                           101

                               94

Issuance of notes receivable

                         (139)

                                  -

Proceeds from sale of capital assets

                           368

                                  -

Other

                             (9)

                               99

 Net cash used in investing activities

                      (3,636)

                         (2,800)

Cash provided by (used in) financing activities

     of continuing operations:

Purchase and retirement of Company stock    

                             (2)

                         (7,458)

Other

                           983

                            (911)

Cash provided by (used in) financing activities

                           981

                         (8,369)

Discontinued operations and net change in

     assets held for sale

                    (20,485)

                            (536)

Effect of exchange rate changes on cash

                        2,470

                            (936)

Net decrease in cash and cash equivalents

                    (19,495)

                         (4,538)

Cash and cash equivalents at end of period

 $                   45,726

 $                      72,263

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Unifi Announces First Quarter Results - page 6

 
CAUTIONARY STATEMENT ON FORWARD-LOOKING STATEMENTS

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, management's beliefs and assumptions made by management.  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, the continuation and magnitude of the Company's common stock repurchase program 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.

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