UNIFI, Inc.

0000950144-07-003798.txt : 20070426 0000950144-07-003798.hdr.sgml : 20070426 20070426090100 ACCESSION NUMBER: 0000950144-07-003798 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 4 CONFORMED PERIOD OF REPORT: 20070426 ITEM INFORMATION: Results of Operations and Financial Condition ITEM INFORMATION: Regulation FD Disclosure ITEM INFORMATION: Other Events ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20070426 DATE AS OF CHANGE: 20070426 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: 0626 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-10542 FILM NUMBER: 07789370 BUSINESS ADDRESS: STREET 1: 7201 WEST FRIENDLY RD STREET 2: P O BOX 19109 CITY: GREENSBORO STATE: NC ZIP: 27419-9109 BUSINESS PHONE: 9192944410 MAIL ADDRESS: STREET 1: 7201 W FRIENDLY RD STREET 2: PO BOX 19109 CITY: GREENSBORO STATE: NC ZIP: 24719-9109 FORMER COMPANY: FORMER CONFORMED NAME: AUTOMATED ENVIRONMENTAL SYSTEMS INC DATE OF NAME CHANGE: 19720906 8-K 1 g06891e8vk.htm UNIFI, INC. UNIFI, Inc.

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 8-K

CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934

Date of Report (Date of earliest event reported):
April 26, 2007

UNIFI, INC.

(Exact name of registrant as specified in its charter)


New York	1-10542	11-21654951
(State of Incorporation)	(Commission File Number)	(IRS Employer Identification No.)

7201 West Friendly Avenue
Greensboro, North Carolina 27410
(Address of principal executive offices, including zip code)

(336) 294-4410
(Registrant’s telephone number, including area code)

Not Applicable
(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

ITEM 2.02. RESULTS OF OPERATIONS AND FINANCIAL CONDITION.

On April 26, 2007, Unifi, Inc. (the “Registrant”) issued a press release announcing its operating results for its third fiscal quarter ended March 25, 2007, which press release is attached hereto as Exhibit 99.1 and is incorporated herein by reference.

ITEM 7.01. REGULATION FD DISCLOSURE.

On April 26, 2007, the Registrant will host a conference call to discuss financial results for its third fiscal quarter. The slide package prepared for use by executive management for this presentation is attached hereto as Exhibit 99.2. All of the information in the presentation is presented as of April 26, 2007, and Unifi does not assume any obligation to update such information in the future.

The information included in the preceding paragraph, as well as the exhibit referenced therein, shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended.

ITEM 8.01. OTHER EVENTS

On April 26, 2007, the Registrant issued a press release announcing its operating results for its third fiscal quarter ended March 25, 2007, which press release is attached hereto as Exhibit 99.1 and is incorporated herein by reference.

On April 26, 2007, the registrant issued the press release announcing its rationalization plans for its recently acquired Dillon South Carolina operations, which press release is attached hereto as Exhibit 99.3 and is incorporated herein by reference.

ITEM 9.01. FINANCIAL STATEMENTS AND EXHIBITS.

(d) Exhibits.


EXHIBIT NO.		DESCRIPTION OF EXHIBIT

99.1		Press Release dated April 26, 2007 with respect to the Registrant’s financial results for its third fiscal quarter ended March 25, 2007

99.2		Slide Package prepared for use on April 26, 2007 in connection with the Registrant’s third fiscal quarter earnings conference call to be held on April 26, 2007

99.3		Press Release dated April 26, 2007 with respect to the Registrant’s rationalization plans for its recently acquired Dillon South Carolina operations

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 hereunto duly authorized.


		UNIFI, INC.

	By:	/s/ CHARLES F. MCCOY

		Charles F. McCoy Vice President, Secretary and General Counsel

Dated: April 26, 2007

INDEX TO EXHIBITS


EXHIBIT NO.		DESCRIPTION OF EXHIBIT

99.1		Press Release dated April 26, 2007 with respect to the Registrant’s financial results for its third fiscal quarter ended March 25, 2007

99.2		Slide Package prepared for use on April 26, 2007 in connection with the Registrant’s third fiscal quarter earnings conference call to be held on April 26, 2007

99.3		Press Release dated April 26, 2007 with respect to the Registrant’s rationalization plans for its recently acquired Dillon South Carolina operations

EX-99.1 2 g06891exv99w1.htm EXHIBIT 99.1 EXHIBIT 99.1

Exhibit 99.1

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

Unifi Announces Third Quarter Results

GREENSBORO, N.C. — April 26, 2007 — Unifi, Inc. (NYSE:UFI) today released operating results for its third quarter ended March 25, 2007.

Net income for the current quarter, including discontinued operations, was a net loss of $13.2 million or $0.22 per share compared a net loss of $2.1 million or $0.04 per share for the prior March quarter. Net income from continuing operations for the current quarter was a net loss of $13.9 million or $0.23 per share compared to a net loss of $1.3 million or $0.03 per share for the prior March quarter. Included in the current quarter are pre-tax impairment charges totaling $12.9 million related to the write down of certain plants and equipment, as well as bankruptcy related charges of $3.5 million related to a customer that filed a voluntary petition to reorganize under Chapter 11 of the United States Bankruptcy Code.

Net sales from continuing operations for the current March quarter, including the sales from the Company’s Dillon acquisition on January 1, 2007, of $178.2 million, were down $3.2 million or 1.8% compared to net sales of $181.4 million for the prior year March quarter.

Bill Lowe, Chief Operating Officer and Chief Financial Officer for Unifi, said, “Volumes rebounded in the March quarter as expected, and our pre-tax income for the current quarter would have been slightly positive, excluding the facility and equipment impairment charges and the customer bankruptcy charges. Nevertheless, we are taking steps to further maximize our facility utilization rate and improve operating results by moving all of our production from the recently acquired facility in Dillon, South Carolina, to our larger facility in Yadkinville, North Carolina, which will allow us to remain competitive in the marketplace through lower overall manufacturing costs.”

-continued-

Unifi Announces Third Quarter Results — page 2

Net income for the first nine months of the Company’s fiscal year 2007, including discontinued operations, was a net loss of $40.8 million or $0.75 per share compared to a net loss of $9.0 million or $0.17 per share for the prior year period. Net income from continuing operations for the first nine months of fiscal year 2007 was a net loss of $41.3 million or $0.75 per share compared to a net loss of $9.5 million or $0.18 per share for the prior year period. Net sales for fiscal year-to-date 2007 of $505.0 were down $50.6 million or 9.1% compared to net sales of $555.6 million for fiscal year-to-date 2006.

Total debt at the end of the current March quarter was $247.2 million, which is an increase of $41.1 million over the $206.1 million in debt at the end of the December 2006 quarter. Cash-on-hand at the end of the current March quarter was $26.8 million, which is down from the $35.6 million cash-on-hand at the end of the December 2006 quarter.

Subsequent to the close of the current March quarter, the Company received a $5.8 million dividend from its equity affiliate partner Parkdale America, which will be reported in the Company’s fiscal year 2007 fourth quarter results.

Brian Parke, Chairman of the Board and Chief Executive Officer, said “While import pressures persist across many of our supply chains, we are pleased by the growth of our premium value-added product offering. In addition to strong volumes on existing premium value-added programs during the quarter, we also successfully launched Repreve, our 100% recycled polyester yarn. Our joint venture in China has significantly improved its capabilities in this area as well, and we now offer many of our innovative products to brands and retailers on a global basis.”

Unifi, Inc. (NYSE: UFI) is a diversified producer and processor of multi-filament polyester and nylon textured yarns and related raw materials. The Company adds value to the supply chain and enhances consumer demand for its products through the development and introduction of branded yarns that provide unique performance, comfort and aesthetic advantages. Key Unifi brands include, but are not limited to: aio^® — all-in-one performance yarns, Sorbtek^®, A.M.Y.^®, Mynx^® UV, Repreve^®, Reflexx^®, MicroVista^® and Satura^®. Unifi’s yarns and brands are readily found in home furnishings, apparel, legwear, and sewing thread, as well as industrial, automotive, military, and medical applications. For more information about Unifi, visit http://www.unifi.com.

Financial Statements to Follow

Unifi Announces Third Quarter Results — page 3

UNIFI, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited) (Amounts in Thousands Except Per Share Data)


	For the Quarters Ended						For the Nine Months Ended
	March 25, 2007			March 26, 2006			March 25, 2007			March 26, 2006

Net sales	$	178,202		$	181,398		$	505,041		$	555,617
Cost of sales		164,752			168,261			479,931			524,707
Selling, general & administrative expenses		11,177			10,184			32,854			31,132
Provision for bad debts		2,274			218			2,872			1,349
Interest expense		6,610			4,606			18,786			14,063
Interest income		(707	)		(1,542	)		(2,217	)		(5,012	)
Other (income) expense, net		(2,462	)		(589	)		(2,705	)		(1,138	)
Equity in (earnings) losses of unconsolidated affiliates		(352	)		564			4,473			(1,278	)
Write down of long-lived assets		12,870			815			16,072			2,315
Restructuring charges		—			—			—			29

Loss from continuing operations before income taxes		(15,960	)		(1,119	)		(45,025	)		(10,550	)
Provision (benefit) from income taxes		(2,075	)		208			(3,748	)		(1,023	)

Loss from continuing operations		(13,885	)		(1,327	)		(41,277	)		(9,527	)
Income (loss) from discontinued operations, net of tax		666			(790	)		463			556

Net loss	$	(13,219	)	$	(2,117	)	$	(40,814	)	$	(8,971	)


Earnings (losses) per common share (basic and diluted):
Net loss — continuing operations	$	(0.23	)	$	(0.03	)	$	(0.75	)	$	(0.18	)
Net income (loss) — discontinued operations		0.01			(0.01	)		—			0.01

Net loss — basic and diluted	$	(0.22	)	$	(0.04	)	$	(0.75	)	$	(0.17	)


Weighted average basic and diluted shares outstanding		59,803			52,177			54,733			52,144

-continued-

Unifi Announces Third Quarter Results — page 4

UNIFI, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited) (Amounts in Thousands)


	March 25, 2007		June 25, 2006

Assets
Cash and cash equivalents	$	26,780	$	35,317
Receivables, net		99,442		93,236
Inventories		129,059		116,018
Deferred income taxes		14,060		11,739
Assets held for sale		7,346		17,418
Restricted cash		1,000		—
Other current assets		10,360		9,229

Total current assets		288,047		282,957

Property, plant and equipment		228,807		237,697
Investments in unconsolidated affiliates		184,249		190,217
Intangible assets, net		31,450		—
Other noncurrent assets		21,699		21,766

	$	754,252	$	732,637

Liabilities and Shareholders’ Equity
Accounts payable	$	59,922	$	68,916
Accrued expenses		27,897		23,869
Income taxes payable		503		2,303
Current maturities of long-term debt and other current liabilities		9,047		6,330

Total current liabilities		97,369		101,418

Long-term debt and other liabilities		243,593		202,405
Deferred income taxes		43,328		45,861
Shareholders’ equity		369,962		382,953

	$	754,252	$	732,637

-continued-

Unifi Announces Third Quarter Results — page 5

UNIFI, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited) (Amounts in Thousands)


	For the Nine Months Ended
	March 25, 2007			March 26, 2006

Cash and cash equivalents at beginning of period	$	35,317		$	105,621
Operating activities:
Net loss		(40,814	)		(8,971	)
Adjustments to reconcile net loss to net cash used in continuing operating activities:
(Income) loss from discontinued operations		(463	)		(556	)
Net (earnings) loss of unconsolidated equity affiliates, net of distributions		4,473			850
Depreciation		31,701			36,911
Amortization		1,967			962
Stock based compensation		1,433			421
Net (gain) loss on asset sales		(1,593	)		(180	)
Non-cash write down of long-lived assets		16,072			2,315
Non-cash portion of restructuring charges		—			29
Deferred income tax		(5,342	)		(3,797	)
Provision for bad debts		2,872			1,349
Key executive life insurance proceeds, net		1,761			1,661
Other		93			(44	)
Change in assets and liabilities, excluding effects of acquisitions and foreign currency adjustments		(15,771	)		(7,531	)

Net cash provided by (used in) continuing operating activities		(3,611	)		23,419

Investing activities:
Capital expenditures		(5,502	)		(9,767	)
Acquisitions		(42,831	)		(30,188	)
Investment in foreign restricted assets		—			171
Collection of notes receivable		766			—
Change in restricted cash		(1,000	)		2,766
Proceeds from sale of capital assets		2,399			2,395
Return of capital from equity affiliates		229			—
Key executive life insurance premiums		(217	)		(217	)
Other		(60	)		155

Net cash used in investing activities		(46,216	)		(34,685	)

Financing activities:
Payment of long-term debt		—			(24,407	)
Net borrowings of long-term debt		40,000			—
Other		(1,168	)		277

Net cash provided by (used in) financing activities		38,832			(24,130	)

Cash flows of discontinued operations:
Operating cash flow		463			(9,259	)
Investing cash flow		—			25,987

Net cash provided by discontinued operations		463			16,728

Effect of exchange rate changes on cash and cash equivalents		1,995			1,470

Net decrease in cash and cash equivalents		(8,537	)		(17,198	)

Cash and cash equivalents at end of period	$	26,780		$	88,423

-continued-

Unifi Announces Third 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, 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, 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, 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.

-end-

EX-99.2 3 g06891exv99w2.htm EXHIBIT 99.2 EXHIBIT 99.2

Exhibit 99.2

Unifi, Inc.
Third Qtr. Conf. Call
April 26, 2007

Unifi, Inc.

Third Quarter Ended
March 25, 2007

Conference Call

Unifi, Inc.
Third Qtr. Conf. Call
April 26, 2007

Cautionary Statement

Unifi, Inc.
Third Qtr. Conf. Call
April 26, 2007

Income Statement Highlights

(Amounts in thousands)


	For the Quarters Ended
	Mar. 2007			Mar. 2006

Total sales from continuing operations	$	178,202		$	181,398

Loss from continuing operations before income taxes		(15,960	)		(1,119	)

Loss from continuing operations		(13,885	)		(1,327	)

Selling, general and administrative expense		11,177			10,184

Interest expense		6,610			4,606

Depreciation expense		10,252			12,223

Net loss		(13,219	)		(2,117	)

Unifi, Inc.
Third Qtr. Conf. Call
April 26, 2007

Income Statement Highlights

(Amounts in thousands)


	For the Nine Months Ended
	Mar. 2007			Mar. 2006

Total sales from continuing operations	$	505,041		$	555,617

Loss from continuing operations before income taxes		(45,025	)		(10,550	)

Loss from continuing operations		(41,277	)		(9,527	)

Selling, general and administrative expense		32,854			31,132

Interest expense		18,786			14,063

Depreciation expense		31,701			36,911

Net loss		(40,814	)		(8,971	)

Unifi, Inc.
Third Qtr. Conf. Call
April 26, 2007

Balance Sheet Highlights

(Amounts in thousands, except percentages and days in receivables/payables)


	March		December		September		June
	2007		2006		2006		2006

Cash	$	26,780	$	35,612	$	29,516	$	35,317

Short-Term Debt	$	7,223	$	6,236	$	3,807	$	4,626
Long-Term Debt		240,022		199,912		200,230		199,421

Total Debt	$	247,245	$	206,148	$	204,037	$	204,047

Equity	$	369,962	$	358,243	$	373,272	$	382,953

Net Working Capital (1)	$	169,915	$	133,688	$	151,968	$	141,586
Days in receivable		47.2		40.9		45.7		46.0
Days in payables		27.8		31.2		27.4		33.4

(1) Includes only Accounts Receivable, Inventories and Accounts Payable; excludes discontinued operations

Unifi, Inc.
Third Qtr. Conf. Call
April 26, 2007

EBITDA Reconciliation
to Pre-Tax Income

(Amounts in thousands)


	Quarters Ended
										Year-to-Date
	September 2006			December 2006			March 2007			March 2007

Pre-tax loss from continuing operations	$	(12,150	)	$	(16,915	)	$	(15,960	)	$	(45,025	)
Interest expense, net		5,621			5,045			5,903			16,569
Depreciation and amortization expense		11,124			10,325			11,374			32,823
Equity in (earnings) losses of unconsolidated affiliates		1,949			2,876			(352	)		4,473
Cash distributions from equity affiliates		229			—			—			229
Non cash compensation		2,128			609			236			2,973
Write down of long-lived assets		1,200			2,002			12,870			16,072
Gains/losses on sale of PP&E		240			1			(1,834	)		(1,593	)
Hedging (gains) losses		44			(96	)		(18	)		(70	)
Customer bankruptcy charges		—			—			3,533			3,533

Adjusted EBITDA	$	10,385		$	3,847		$	15,752		$	29,984

Unifi, Inc.
Third Qtr. Conf. Call
April 26, 2007

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.

EBITDA

EBITDA represents pre-tax income before interest expense, depreciation and amortization expense and loss or income from discontinued operations, adjusted to exclude restructuring charges, equity in earnings and losses of unconsolidated affiliates, impairment write-downs, non-cash compensation expense, gains and losses on sales of property, plant and equipment, hedging gains and losses and customer bankruptcy charges and to include cash distributions from equity affiliates. We present EBITDA as a supplemental measure of our performance and ability to service debt. We also present 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 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. Similarly, we include actual cash distributions from equity affiliates because such cash is available to service our debt. The other items excluded from EBITDA are excluded in order to better reflect our continuing operations.

In evaluating EBITDA, you should be aware that in the future we may incur expenses similar to the adjustments in this presentation. Our presentation of EBITDA should not be construed as an inference that our future results will be unaffected by unusual or non-recurring items. 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.

Unifi, Inc.
Third Qtr. Conf. Call
April 26, 2007

Non-GAAP
Financial Measures — Continued

Our 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 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, 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 EBITDA only supplementally.

EX-99.3 4 g06891exv99w3.htm EXHIBIT 99.3 exhibit 99.3

Exhibit 99.3

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

UNIFI ANNOUNCES RATIONALIZATION PLANS AT ITS RECENTLY
ACQUIRED DILLON, SOUTH CAROLINA OPERATIONS

GREENSBORO, N.C. — April 26, 2007 — Unifi, Inc. (NYSE: UFI) today announced that it will be shutting its recently acquired Dillon, South Carolina facility. The Company currently operates 42 texturing machines at the facility. The Company expects to close the facility by July 31, 2007 and move the entire production to its facility in Yadkinville, North Carolina. The Company acquired the Dillon facility on January 1, 2007 in a transaction valued at approximately $65.2 million.

“The closure of the Dillon, South Carolina facility is consistent with our strategy of making key acquisitions and addressing excess capacity to lower our manufacturing costs. Our largest facility in Yadkinville of over 800,000 square feet has both the footprint and equipment to accommodate the volume currently run in South Carolina. We continue to streamline our product mix and look to maximize our facility utilization rates to lower manufacturing costs to compete in the marketplace,” said Bill Lowe, Chief Operating Officer and Chief Financial Officer for Unifi. “We plan to move some texturing machines into our existing facilities and expect the impact on our customers to be seamless during the transition period.”

The South Carolina facility currently has approximately 355 employees. The Company estimates that it will add approximately 120 employees to its Yadkinville, North Carolina facility to accommodate the additional volume. Cash closure costs, including severance and equipment moves, is expected to be approximately $2.1 million with annual savings of approximately $5.0 million.

-continued-

Unifi Announces Rationalization Plans At Its Recently Acquired Dillon, South Carolina Operations— page 2

CAUTIONARY STATEMENT ON FORWARD-LOOKING STATEMENTS

-end-