Note 29 - Condensed Consolidating Financial Statements

3 Months Ended

Sep. 25, 2011

Condensed Consolidating Financial Statements [Text Block]

29. Condensed Consolidating Financial Statements

In accordance with the Indenture governing the Company’s 2014 notes, certain of the Company’s subsidiaries have guaranteed the notes, jointly and severally, on a senior secured basis.

The following presents the condensed consolidating financial statements separately for:

· Parent company, the issuer of the guaranteed obligations;

· Guarantor subsidiaries, on a combined basis, as specified in the Indenture;

· Non-guarantor subsidiaries, on a combined basis;

· Consolidating entries and eliminations representing adjustments to (a) eliminate intercompany transactions, (b) eliminate intercompany profit in inventory, (c) eliminate investments in its subsidiaries and (d) record consolidating entries; and

· Parent company, on a consolidated basis.

Each subsidiary guarantor is 100% owned by Unifi, Inc. or its wholly-owned subsidiary, Unifi Manufacturing, Inc. and all guarantees are full and unconditional.  The non-guarantor subsidiaries predominantly represent the foreign subsidiaries which do not guarantee the 2014 notes.  Each entity in the consolidating financial information follows the same accounting policies as described in the consolidated financial statements.  Supplemental financial information for the Company and its guarantor subsidiaries and non-guarantor subsidiaries for the 2014 notes is presented below.

Balance Sheet Information as of September 25, 2011:

	Parent		Guarantor Subsidiaries			Non-Guarantor Subsidiaries		Eliminations			Consolidated
ASSETS
Cash and cash equivalents	$	2,029	$	(1,883	)	$	19,675	$	—		$	19,821
Receivables		—		69,213			26,565		—			95,778
Intercompany accounts receivable		125,409		(118,485	)		946		(7,870	)		—
Inventories		—		96,063			39,913		—			135,976
Income taxes receivable		575		—			194		—			769
Deferred income taxes		2,296		—			2,094		—			4,390
Other current assets		99		990			3,752		—			4,841
Total current assets		130,408		45,898			93,139		(7,870	)		261,575
Property, plant and equipment, net		8,833		109,791			23,173		—			141,797
Intangible assets, net		—		11,027			—		—			11,027
Investments in unconsolidated affiliates		—		83,886			8,454		—			92,340
Investments in consolidated subsidiaries		431,698		—			—		(431,698	)		—
Intercompany notes receivable		—		—			19,706		(19,706	)		—
Other non-current assets		3,224		3,048			2,334		—			8,606
Total assets	$	574,163	$	253,650		$	146,806	$	(459,274	)	$	515,345
LIABILITIES AND SHAREHOLDERS’ EQUITY
Accounts payable	$	84	$	40,107		$	5,845	$	—		$	46,036
Intercompany accounts payable		120,085		(119,676	)		7,456		(7,865	)		—
Accrued expenses		5,426		7,855			2,727		—			16,008
Income taxes payable		—		—			767		—			767
Current portion of long-term debt		—		348			—		—			348
Total current liabilities		125,595		(71,366	)		16,795		(7,865	)		63,159
Long-term debt		163,622		—			—		—			163,622
Intercompany notes payable		—		—			19,706		(19,706	)		—
Other long-term liabilities		486		2,437			1,024		—			3,947
Deferred income taxes		2,296		—			157		—			2,453
Total liabilities		291,999		(68,929	)		37,682		(27,571	)		233,181
Shareholders’/ invested equity		282,164		322,579			109,124		(431,703	)		282,164
Total liabilities and shareholders’ equity	$	574,163		253,650			146,806		(459,274	)	$	515,345

Balance Sheet Information as of June 26, 2011:

	Parent		Guarantor Subsidiaries		Non-Guarantor Subsidiaries		Eliminations			Consolidated
ASSETS
Cash and cash equivalents	$	1,656	$	323	$	25,511	$	—		$	27,490
Receivables		—		69,800		30,375		—			100,175
Intercompany accounts receivable		3		6,755		500		(7,258	)		—
Inventories		—		84,193		50,690		—			134,883
Income taxes receivable		419		—		159		—			578
Deferred income taxes		3,482		—		2,230		—			5,712
Other current assets		122		588		4,521		—			5,231
Total current assets		5,682		161,659		113,986		(7,258	)		274,069
Property, plant and equipment, net		8,889		114,510		27,628		—			151,027
Intangible assets, net		—		11,612		—		—			11,612
Investments in unconsolidated affiliates		—		82,955		8,303		—			91,258
Investments in consolidated subsidiaries		456,288		—		—		(456,288	)		—
Intercompany notes receivable		—		—		16,545		(16,545	)		—
Other non-current assets		3,619		3,048		2,743		—			9,410
Total assets	$	474,478	$	373,784	$	169,205	$	(480,091	)	$	537,376
LIABILITIES AND SHAREHOLDERS’ EQUITY
Accounts payable	$	164	$	35,207	$	7,471	$	—		$	42,842
Intercompany accounts payable		409		—		6,849		(7,258	)		—
Accrued expenses		2,037		11,717		3,741		—			17,495
Income taxes payable		—		—		421		—			421
Current portion of long-term debt		—		342		—		—			342
Total current liabilities		2,610		47,266		18,482		(7,258	)		61,100
Long-term debt		168,322		—		—		—			168,322
Intercompany notes payable		—		—		16,545		(16,545	)		—
Other long-term liabilities		409		2,562		1,036		—			4,007
Deferred income taxes		3,482		—		810		—			4,292
Total liabilities		174,823		49,828		36,873		(23,803	)		237,721
Shareholders’/ invested equity		299,655		323,956		132,332		(456,288	)		299,655
Total liabilities and shareholders’ equity	$	474,478	$	373,784	$	169,205	$	(480,091	)	$	537,376

Statement of Operations Information for the Three Months Ended September 25, 2011:

	Parent			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations			Consolidated
Net sales	$	—		$	123,920		$	47,093		$	—		$	171,013
Cost of sales		—			116,210			43,145			(172	)		159,183
Gross profit		—			7,710			3,948			172			11,830
Equity in subsidiaries		(36	)		—			—			36			—
Selling, general and administrative expenses		—			7,784			2,587			—			10,371
(Benefit) provision for bad debts		—			238			(33	)		—			205
Other operating (income) expense, net		(4,923	)		4,937			(63	)		8			(41	)
Operating income (loss)		4,959			(5,249	)		1,457			128			1,295
Interest income		—			(62	)		(745	)		160			(647	)
Interest expense		4,363			17			160			(160	)		4,380
Loss on extinguishment of debt		462			—			—			—			462
Equity in earnings (losses) of unconsolidated affiliates		—			(3,827	)		67			301			(3,459	)
Income (loss) before income taxes		134			(1,377	)		1,975			(173	)		559
(Benefit) provision for income taxes		(152	)		—			425			—			273
Net income (loss)	$	286		$	(1,377	)	$	1,550		$	(173	)	$	286

Statement of Comprehensive Income (Loss) Information for the Three Months Ended September 25, 2011:

	Parent			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations			Consolidated
Net income (loss)	$	286		$	(1,377	)	$	1,550		$	(173	)	$	286
Other comprehensive income (loss):
Foreign currency adjustments		(17,225	)		—			(17,225	)		17,225			(17,225	)
Loss on cash flow hedges		(78	)		(891	)		—			—			(969	)
Other comprehensive income		(17,303	)		(891	)		(17,225	)		17,225			(18,194	)
Comprehensive income (loss)	$	(17,017	)	$	(2,268	)	$	(15,675	)	$	17,052		$	(17,908	)

Statement of Operations Information for the Three Months Ended September 26, 2010:

	Parent			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations			Consolidated
Net sales	$	—		$	122,058		$	53,432		$	(398	)	$	175,092
Cost of sales		—			107,371			46,648			(473	)		153,546
Gross profit		—			14,687			6,784			75			21,546
Restructuring charges		—			363			—			—			363
Equity in subsidiaries		(11,328	)		—			—			11,328			—
Selling, general and administrative expenses		—			8,190			3,320			—			11,510
(Benefit) provision for bad debts		—			(292	)		251			—			(41	)
Other operating (income) expense, net		(6,404	)		5,171			550			926			243
Operating income (loss)		17,732			1,255			2,663			(12,179	)		9,471
Interest income		—			(66	)		(677	)		—			(743	)
Interest expense		5,156			17			96			—			5,269
Loss on extinguishment of debt		1,144			—			—			—			1,144
Equity in earnings (losses) of unconsolidated affiliates		—			(8,634	)		(594	)		277			(8,951	)
Income (loss) before income taxes		11,432			9,938			3,838			(12,456	)		12,752
Provision for income taxes		1,197			—			1,320			—			2,517
Net income (loss)	$	10,235		$	9,938		$	2,518		$	(12,456	)	$	10,235

Statement of Comprehensive Income (Loss) Information for the Three Months Ended September 26, 2010:

	Parent		Guarantor Subsidiaries		Non-Guarantor Subsidiaries		Eliminations			Consolidated
Net income (loss)	$	10,235	$	9,938	$	2,518	$	(12,456	)	$	10,235
Other comprehensive income (loss):
Foreign currency adjustments		6,707		—		6,707		(6,707	)		6,707
Loss on cash flow hedges		—		—		—		—			—
Other comprehensive income (loss)		6,707				6,707		(6,707	)		6,707
Comprehensive income (loss)	$	16,942	$	9,938	$	9,225	$	(19,163	)	$	16,942

Statements of Cash Flows Information for Three Months Ended September 25, 2011:

	Parent			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations			Consolidated
Operating activities:
Net cash provided by (used in) operating activities	$	(2,093	)	$	(1,989	)	$	5,915		$	(12	)	$	1,821
Investing activities:
Capital expenditures		5			(306	)		(821	)		—			(1,122	)
Investments in unconsolidated affiliates		—			—			(360	)		—			(360	)
Proceeds from sale of assets		—			89			92			(8	)		173
Net cash provided by (used in) investing activities		5			(217	)		(1,089	)		(8	)		(1,309	)
Financing activities:
Payments of notes payable		(10,288	)		—			—			—			(10,288	)
Payments on revolving credit facility		(53,500	)		—			—			—			(53,500	)
Proceeds from borrowings on revolving credit facility		58,800			—			—			—			58,800
Proceeds from stock option exercises		49			—			—			—			49
Cash dividend paid		7,400			—			(7,400	)		—			—
Net cash provided by (used in) by financing activities		2,461			—			(7,400	)		—			(4,939	)
Effect of exchange rate changes on cash and cash equivalents		—			—			(3,262	)		20			(3,242	)
Net increase (decrease) in cash and cash equivalents		373			(2,206	)		(5,836	)		—			(7,669	)
Cash and cash equivalents at beginning of the year		1,656			323			25,511			—			27,490
Cash and cash equivalents at end of the period	$	2,029		$	(1,883	)	$	19,675		$	—		$	19,821

Statements of Cash Flows Information for Three Months Ended September 26, 2010:

	Parent			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations			Consolidated
Operating activities:
Net cash provided by (used in) operating activities	$	6,921		$	1,149		$	(4,380	)	$	321		$	4,011
Investing activities:
Capital expenditures		—			(3,020	)		(2,475	)		—			(5,495	)
Investments in unconsolidated affiliates		—			—			(225	)		—			(225	)
Proceeds from sale of assets		—			—			180			—			180
Net cash used in investing activities		—			(3,020	)		(2,520	)		—			(5,540	)
Financing activities:
Payments of notes payable		(15,863	)		—			—			—			(15,863	)
Payments on revolving credit facility		(40,525	)		—			—			—			(40,525	)
Proceeds from borrowings on revolving credit facility		40,525			—			—			—			40,525
Debt financing fees		(821	)		—			—			—			(821	)
Net cash used in financing activities		(16,684	)		—			—			—			(16,684	)
Effect of exchange rate changes on cash and cash equivalents		—			—			2,117			(321	)		1,796
Net decrease in cash and cash equivalents		(9,763	)		(1,871	)		(4,783	)		—			(16,417	)
Cash and cash equivalents at beginning of the year		9,938			1,832			30,921			—			42,691
Cash and cash equivalents at end of the period	$	175		$	(39	)	$	26,138		$	—		$	26,274