EX-99.2 3 g20980exv99w2.htm EX-99.2 exv99w2
Exhibit 99.2
Unifi, Inc.
First Qtr. Conf. Call
October 29, 2009
Unifi, Inc.
First Quarter Ended
September 27, 2009
Conference Call

 

 

Unifi, Inc.
First Qtr. Conf. Call
October 29, 2009
Cautionary Statement
Certain statements included herein contain forward-looking statements within the meaning of federal securities 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, the success of our subsidiaries, 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, changes in currency exchange rates, interest and inflation rates, changes in consumer spending, customer preferences, fashion trends and end-uses, regulations governing tax laws, other governmental and authoritative bodies’ policies and legislation, and the ability to sell excess assets. 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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Unifi, Inc.
First Qtr. Conf. Call
October 29, 2009
Income Statement Highlights
(Amounts in thousands)
(Unaudited)
                 
    For the Quarters Ended
    September 27, 2009   September 28, 2008
Net sales from continuing operations
   $ 142,851     $ 169,009  
Depreciation and amortization expense
     6,696       9,758  
Selling, general and administrative expense
     11,164       10,545  
Interest expense
     5,492       5,965  
Income from continuing operations before income taxes
     5,024       1,313  
Income (loss) from continuing operations
     2,489       (572 )
Net income (loss)
     2,489       (676 )

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Unifi, Inc.
First Qtr. Conf. Call
October 29, 2009
Volume and Pricing Highlights
(Amounts in thousands, except percentages)
(Unaudited)
                 
    Quarter over quarter
    September 2009 vs. September 2008
    Volume   Price
Polyester
     -2.5 %     -12.6 %
Nylon
     -22.4 %     5.9 %
 
                
Consolidated
     -5.1 %     -10.4 %
 
                
                 
    Quarter over trailing quarter
    September 2009 vs. June 2009
    Volume   Price
Polyester
     4.4 %     -0.6 %
Nylon
     -7.6 %     5.6 %
 
                
Consolidated
     2.9 %     -0.8 %
 
                

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Unifi, Inc.
First Qtr. Conf. Call
October 29, 2009
Balance Sheet Highlights
(Amounts in thousands, except days in receivables/payables)
(Unaudited)
                                 
    September     June     March     December  
    2009     2009     2009     2008  
Cash
   $ 55,700     $ 42,659     $ 23,544     $ 12,619  
 
                                
Restricted Cash-Domestic
     —       —       8,809       11,106  
Restricted Cash-Foreign Deposits
     5,843       6,930       7,170       8,681  
 
                        
Total Restricted Cash
     5,843       6,930       15,979       19,787  
 
                        
Total Cash
   $ 61,543     $ 49,589     $ 39,523     $ 32,406  
 
                        
 
                                
Short-Term Debt
   $ 6,212     $ 6,845     $ 6,119     $ 6,313  
Long-Term Debt
     179,391       180,344       192,049       193,747  
 
                        
Total Debt
     185,603       187,189       198,168       200,060  
 
                        
Net Debt
   $ 124,060     $ 137,600     $ 158,645     $ 167,654  
 
                        
 
                                
Equity
   $ 256,508     $ 224,969     $ 238,102     $ 270,395  
 
                                
Net Working Capital (1)
   $ 126,363     $ 126,151     $ 127,854     $ 149,848  
Days in receivables
     51       51       55       50  
Days in payables
     25       19       19       21  
 
(1)   Includes only Accounts Receivable, Inventories, Accounts Payable, and Accrued Expenses; excludes discontinued operations

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Unifi, Inc.
First Qtr. Conf. Call
October 29, 2009
Equity Affiliates Highlights
(Amounts in thousands, except percentages)
(Unaudited)
                 
    Quarter Ended September 27, 2009  
    Earnings (Loss)     Distributions  
 
            
Parkdale America (34%)
   $ 2,352     $ 1,611  
UNF (50%)
     177       —  
Intercompany Eliminations
     (466 )     —  
 
            
Total
   $ 2,063     $ 1,611  
 
            

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Unifi, Inc.
First Qtr. Conf. Call
October 29, 2009
Adjusted EBITDA Reconciliation
to Pre-Tax Income (Loss)
(Amounts in thousands)
(Unaudited)
                         
    For the Quarters Ended  
    September     June     September  
    2009     2009     2008  
Pre-tax income (loss) from continuing operations
   $ 5,024     $ (4,351 )   $ 1,313  
Interest expense, net
     4,746       4,876       5,052  
Depreciation and amortization expense
     6,696       6,951       9,758  
Equity in (earnings) losses of unconsolidated affiliates
     (2,063 )     1,218       (3,482 )
Non-cash compensation, net of distributions
     770       607       201  
(Gain) loss on sales of PP&E
     (94 )     9       (315 )
Currency and hedging losses
     13       370       86  
Write down of long-lived assets
     100       350       —  
Restructuring recoveries
     —       (240 )     —  
Gain on extinguishment of debt
     (54 )     (251 )     —  
Asset consolidation and optimization expense
     —       47       1,240  
Kinston shutdown expenses
     —       —       30  
 
                  
Adjusted EBITDA
   $ 15,138     $ 9,586     $ 13,883  
 
                  

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Unifi, Inc.
First Qtr. Conf. Call
October 29, 2009
Non-GAAP
Financial Measures
Non-GAAP Financial Measures
     Included in this presentation are certain non-GAAP financial measures designed to complement the financial information presented in accordance with generally accepted accounting principles in the United States of America because management believes such measures are useful to investors.
     Adjusted EBITDA
     Adjusted EBITDA represents pre-tax income before interest expense, depreciation and amortization expense and loss or income from discontinued operations, adjusted to exclude equity in earnings and losses of unconsolidated affiliates, write down of long-lived assets, non-cash compensation expense net of distributions, gains or losses on sales of property, plant and equipment, currency and hedging losses, asset consolidation and optimization expense, restructuring recoveries, gain on extinguishment of debt, and Kinston shutdown costs. We present Adjusted EBITDA as a supplemental measure of our performance and ability to service debt. We also present Adjusted EBITDA because we believe such measure is frequently used by securities analysts, investors and other interested parties in the evaluation of companies in our industry and in measuring the ability of “high-yield” issuers to meet debt service obligations.
     We believe Adjusted EBITDA is an appropriate supplemental measure of debt service capacity, because cash expenditures on interest are, by definition, available to pay interest, and tax expense is inversely correlated to interest expense because tax expense goes down as deductible interest expense goes up; depreciation and amortization are non-cash charges. Equity in earnings and losses of unconsolidated affiliates is excluded because such earnings or losses do not have an impact on our ability to service our debt. The other items excluded from Adjusted EBITDA are excluded in order to better reflect our continuing operations.
     In evaluating Adjusted EBITDA, you should be aware that in the future we may incur expenses similar to the adjustments in this presentation. Our presentation of Adjusted EBITDA should not be construed as an inference that our future results will be unaffected by unusual or non-recurring items. Adjusted EBITDA is not a measurement of our financial performance under GAAP and should not be considered as an alternative to net income, operating income or any other performance measures derived in accordance with GAAP or as an alternative to cash flow from operating activities as a measure of our liquidity.

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Unifi, Inc.
First Qtr. Conf. Call
October 29, 2009
Non-GAAP
Financial Measures — continued
Our Adjusted EBITDA measure has limitations as an analytical tool, and you should not consider it in isolation or as a substitute for analysis of our results as reported under GAAP. Some of these limitations are:
  •   it does not reflect our cash expenditures, future requirements for capital expenditures or contractual commitments;
 
  •   it does not reflect changes in, or cash requirements for, our working capital needs;
 
  •   it does not reflect the significant interest expense or the cash requirements necessary to service interest or principal payments on our debt;
 
  •   although depreciation and amortization are non-cash charges, the assets being depreciated and amortized will often have to be replaced in the future, and our Adjusted EBITDA measure does not reflect any cash requirements for such replacements;
 
  •   it is not adjusted for all non-cash income or expense items that are reflected in our statements of cash flows;
 
  •   it does not reflect the impact of earnings or charges resulting from matters we consider not be indicative of our ongoing operations;
 
  •   it does not reflect limitations on or costs related to transferring earnings from our subsidiaries to us; and
 
  •   other companies in our industry may calculate this measure differently than we do, limiting its usefulness as a comparative measure.
     Because of these limitations, Adjusted EBITDA should not be considered as a measure of discretionary cash available to us to invest in the growth of our business or as a measure of cash that will be available to us to meet our obligations, including those under the notes. You should compensate for these limitations by relying primarily on our GAAP results and using Adjusted EBITDA only supplementally.

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