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-