Note 31 - Condensed Consolidating Financial Statements

6 Months Ended

Dec. 25, 2011

Condensed Consolidating Financial Statements [Text Block]

31. 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 December 25, 2011:

	Parent		Guarantor Subsidiaries			Non-Guarantor Subsidiaries		Eliminations			Consolidated
ASSETS
Cash and cash equivalents	$	3,528	$	(3,320	)	$	24,469	$	—		$	24,677
Receivables, net		—		63,321			20,880		—			84,201
Intercompany accounts receivable		228,091		(221,505	)		1,258		(7,844	)		—
Inventories		—		76,072			38,108		—			114,180
Income taxes receivable		128		—			193		—			321
Deferred income taxes		2,755		—			1,186		—			3,941
Other current assets		79		1,429			4,937		—			6,445
Total current assets		234,581		(84,003	)		91,031		(7,844	)		233,765
Property, plant and equipment, net		8,761		105,553			23,610		—			137,924
Deferred income taxes		—		—			724		—			724
Intangible assets, net		—		10,442			8,568		(8,052	)		10,958
Investments in unconsolidated affiliates		—		85,374			3,743		103			89,220
Investments in consolidated subsidiaries		428,703		—			—		(428,703	)		—
Intercompany notes receivable		—		—			19,897		(19,897	)		—
Other non-current assets		2,986		3,090			3,941		—			10,017
Total assets	$	675,031	$	120,456		$	151,514	$	(464,393	)	$	482,608
LIABILITIES AND SHAREHOLDERS’ EQUITY
Accounts payable	$	32	$	24,055		$	4,863	$	—		$	28,950
Intercompany accounts payable		234,747		(234,338	)		7,300		(7,709	)		—
Accrued expenses		1,800		6,615			2,087		—			10,502
Income taxes payable		—		—			955		—			955
Current portion of long-term debt		—		356			—		—			356
Total current liabilities		236,579		(203,312	)		15,205		(7,709	)		40,763
Long-term debt		158,722		—			—		—			158,722
Intercompany notes payable		—		—			19,897		(19,897	)		—
Other long-term liabilities		342		2,695			972		—			4,009
Deferred income taxes		2,755		—			127		—			2,882
Total liabilities		398,398		(200,617	)		36,201		(27,606	)		206,376
Total Unifi, Inc. shareholders’ equity		275,722		321,073			115,313		(436,787	)		275,321
Non-controlling interest		911		—			—		—			911
Total shareholders’ equity		276,633		321,073			115,313		(436,787	)		276,232
Total liabilities and shareholders’ equity	$	675,031		120,456			151,514		(464,393	)	$	482,608

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, net		—		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’ 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 December 25, 2011:

	Parent			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations			Consolidated
Net sales	$	—		$	123,050		$	44,692		$	(632	)	$	167,110
Cost of sales		—			116,324			40,733			(829	)		156,228
Gross profit		—			6,726			3,959			197			10,882
Equity in subsidiaries		6,607			—			—			(6,607	)		—
Selling, general and administrative expenses		—			8,406			2,580			—			10,986
Provision (benefit) for bad debts		—			377			(20	)		—			357
Other operating (income) expenses, net		(4,344	)		4,255			585			(6	)		490
Operating (loss) income		(2,263	)		(6,312	)		814			6,810			(951	)
Interest income		—			(62	)		(624	)		191			(495	)
Interest expense		4,211			11			191			(191	)		4,222
Other non-operating (income) expenses		—			—			(1,479	)		—			(1,479	)
Equity in (earnings) losses of unconsolidated affiliates		—			(667	)		56			(233	)		(844	)
Loss on previously held equity interest in Repreve Renewables, LLC		—			—			3,656			—			3,656
(Loss) income before income taxes		(6,474	)		(5,594	)		(986	)		7,043			(6,011	)
Provision for income taxes		1,343			—			463			—			1,806
Net (loss) income including non-controlling interest		(7,817	)		(5,594	)		(1,449	)		7,043			(7,817	)
Less: net (loss) attributable to non-controlling interest		(209	)		—			(209	)		209			(209	)
Net (loss) income attributable to Unifi, Inc.	$	(7,608	)	$	(5,594	)	$	(1,240	)	$	6,834		$	(7,608	)

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

	Parent			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations			Consolidated
Net (loss) income including non-controlling interest.	$	(7,817	)	$	(5,594	)	$	(1,449	)	$	7,043		$	(7,817	)
Other comprehensive (loss) income (net of tax):
Foreign currency translation adjustments		(1,107	)		—			(1,107	)		1,107			(1,107	)
Gain on cash flow hedges		966			822			—			(822	)		966
Other comprehensive (loss) income		(141	)		822			(1,107	)		285			(141	)
Comprehensive (loss) income including non-controlling interest		(7,958	)		(4,772	)		(2,556	)		7,328			(7,958	)
Less: comprehensive (loss) attributable to non-controlling interest		(209	)		—			(209	)		209			(209	)
Comprehensive (loss) income attributable to Unifi, Inc.	$	(7,749	)	$	(4,772	)	$	(2,347	)	$	7,119		$	(7,749	)

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

	Parent			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations			Consolidated
Net sales	$	—		$	114,383		$	48,148		$	(392	)	$	162,139
Cost of sales		—			101,814			41,447			(612	)		142,649
Gross profit		—			12,569			6,701			220			19,490
Equity in subsidiaries		(5,675	)		—			—			5,675			—
Selling, general and administrative expenses		—			8,100			3,061			—			11,161
Provision (benefit) for bad debts		—			90			(4	)		—			86
Restructuring charges		—			1,183			—			—			1,183
Other operating (income) expenses, net		(5,663	)		4,745			10			924			16
Operating income (loss)		11,338			(1,549	)		3,634			(6,379	)		7,044
Interest income		—			(64	)		(807	)		203			(668	)
Interest expense		5,118			17			130			(203	)		5,062
Other non-operating expenses		450			—			—			—			450
Equity in (earnings) losses of unconsolidated affiliates		—			(4,423	)		(601	)		(15	)		(5,039	)
Income (loss) before income taxes		5,770			2,921			4,912			(6,364	)		7,239
Provision for income taxes		385			—			1,469			—			1,854
Net income (loss) including non-controlling interest		5,385			2,921			3,443			(6,364	)		5,385
Less: net (loss) attributable to non-controlling interest		—			—			—			—			—
Net income (loss) attributable to Unifi, Inc.	$	5,385		$	2,921		$	3,443		$	(6,364	)	$	5,385

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

	Parent		Guarantor Subsidiaries		Non-Guarantor Subsidiaries		Eliminations			Consolidated
Net income (loss) including non-controlling interest.	$	5,385	$	2,921	$	3,443	$	(6,364	)	$	5,385
Other comprehensive income (loss) (net of tax):
Foreign currency translation adjustments		1,446		—		1,446		(1,446	)		1,446
Gain on cash flow hedges		6,727		6,727		—		(6,727	)		6,727
Other comprehensive income (loss)		8,173		6,727		1,446		(8,173	)		8,173
Comprehensive income (loss) including non-controlling interest		13,558		9,648		4,889		(14,537	)		13,558
Less: comprehensive (loss) attributable to non-controlling interest		—		—		—		—			—
Comprehensive income (loss) attributable to Unifi, Inc.	$	13,558		9,648		4,889		(14,537	)		13,558

Statement of Operations Information for the Six Months Ended December 25, 2011:

	Parent			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations			Consolidated
Net sales	$	—		$	246,970		$	91,785		$	(632	)	$	338,123
Cost of sales		—			232,534			83,878			(1,001	)		315,411
Gross profit		—			14,436			7,907			369			22,712
Equity in subsidiaries		6,571			—			—			(6,571	)		—
Selling, general and administrative expenses		—			16,190			5,167			—			21,357
Provision (benefit) for bad debts		—			615			(53	)		—			562
Other operating (income) expenses, net		(9,267	)		9,192			522			2			449
Operating income (loss)		2,696			(11,561	)		2,271			6,938			344
Interest income		—			(124	)		(1,369	)		351			(1,142	)
Interest expense		8,574			28			351			(351	)		8,602
Loss on extinguishment of debt		462			—			—			—			462
Other non-operating income		—			—			(1,479	)		—			(1,479	)
Equity in (earnings) losses of unconsolidated affiliates		—			(4,494	)		123			68			(4,303	)
Loss on previously held equity interest in Repreve Renewables, LLC		—			—			3,656			—			3,656
(Loss) income before income taxes		(6,340	)		(6,971	)		989			6,870			(5,452	)
Provision for income taxes		1,191			—			888			—			2,079
Net (loss) income including non-controlling interest		(7,531	)		(6,971	)		101			6,870			(7,531	)
Less: net (loss) attributable to non-controlling interest		(209	)		—			(209	)		209			(209	)
Net (loss) income attributable to Unifi, Inc.	$	(7,322	)	$	(6,971	)	$	310		$	6,661		$	(7,322	)

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

	Parent			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations		Consolidated
Net (loss) income including non-controlling interest.	$	(7,531	)	$	(6,971	)	$	101		$	6,870	$	(7,531	)
Other comprehensive (loss) income (net of tax):
Foreign currency translation adjustments		(18,332	)		—			(18,332	)		18,332		(18,332	)
Loss on cash flow hedges		(3	)		(70	)		—			70		(3	)
Other comprehensive (loss) income		(18,335	)		(70	)		(18,332	)		18,402		(18,335	)
Comprehensive (loss) income including non-controlling interest		(25,866	)		(7,041	)		(18,231	)		25,272		(25,866	)
Less: comprehensive (loss) attributable to non-controlling interest		(209	)		—			(209	)		209		(209	)
Comprehensive (loss) income attributable to Unifi, Inc.	$	(25,657	)	$	(7,041	)	$	(18,022	)	$	25,063	$	(25,657	)

Statement of Operations Information for the Six Months Ended December 26, 2010:

	Parent			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations			Consolidated
Net sales	$	—		$	236,441		$	101,580		$	(790	)	$	337,231
Cost of sales		—			209,185			88,095			(1,085	)		296,195
Gross profit		—			27,256			13,485			295			41,036
Equity in subsidiaries		(17,003	)		—			—			17,003			—
Selling, general and administrative expenses		—			16,290			6,381			—			22,671
Provision (benefit) for bad debts		—			(202	)		247			—			45
Restructuring charges		—			1,546			—			—			1,546
Other operating (income) expenses, net		(12,067	)		9,916			560			1,850			259
Operating income (loss)		29,070			(294	)		6,297			(18,558	)		16,515
Interest income		—			(130	)		(1,484	)		203			(1,411	)
Interest expense		10,274			34			226			(203	)		10,331
Loss on extinguishment of debt		1,144			—			—			—			1,144
Other non-operating expenses		450			—			—			—			450
Equity in (earnings) losses of unconsolidated affiliates		—			(13,057	)		(1,195	)		262			(13,990	)
Income (loss) before income taxes		17,202			12,859			8,750			(18,820	)		19,991
Provision for income taxes		1,582			—			2,789			—			4,371
Net income (loss) including non-controlling interest	$	15,620		$	12,859		$	5,961		$	(18,820	)	$	15,620
Less: net (loss) attributable to non-controlling interest		—			—			—			—			—
Net income (loss) attributable to Unifi, Inc.	$	15,620		$	12,859		$	5,961		$	(18,820	)	$	15,620

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

	Parent		Guarantor Subsidiaries		Non-Guarantor Subsidiaries		Eliminations			Consolidated
Net income (loss) including non-controlling interest.	$	15,620	$	12,859	$	5,961	$	(18,820	)	$	15,620
Other comprehensive income (loss) (net of tax):
Foreign currency translation adjustments		8,153		—		8,153		(8,153	)		8,153
Gain on cash flow hedges		6,727		6,727		—		(6,727	)		6,727
Other comprehensive income (loss)		14,880		6,727		8,153		(14,880	)		14,880
Comprehensive income (loss) including non-controlling interest		30,500		19,586		14,114		(33,700	)		30,500
Less: comprehensive (loss) attributable to non-controlling interest		—		—		—		—			—
Comprehensive income (loss) attributable to Unifi, Inc.	$	30,500	$	19,586	$	14,114	$	(33,700	)	$	30,500

Statements of Cash Flows Information for Six Months Ended December 25, 2011:

	Parent			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations			Consolidated
Operating activities:
Net cash provided by (used in) operating activities	$	3,451		$	(2,950	)	$	13,771		$	30		$	14,302
Investing activities:
Capital expenditures		(56	)		(790	)		(2,421	)		8			(3,259	)
Investments in unconsolidated affiliates		—			—			(360	)		—			(360	)
Acquisition of controlling interest in Repreve Renewables, LLC, net of cash acquired		—			—			(356	)		—			(356	)
Proceeds from sale of assets		—			97			92			(8	)		181
Proceeds from return of split dollar life insurance premiums		14			—			—			—			14
Net cash used in investing activities		(42	)		(693	)		(3,045	)		—			(3,780	)
Financing activities:
Payments of notes payable		(10,288	)		—			—			—			(10,288	)
Payments on revolving credit facility		(92,400	)		—			—			—			(92,400	)
Proceeds from borrowings on revolving credit facility		92,800			—			—			—			92,800
Proceeds from stock option exercises		60			—			—			—			60
Contributions from non-controlling interest		—			—			120			—			120
Cash dividend paid		8,291			—			(8,291	)		—			—
Net cash used in financing activities		(1,537	)		—			(8,171	)		—			(9,708	)
Effect of exchange rate changes on cash and cash equivalents		—			—			(3,597	)		(30	)		(3,627	)
Net (decrease) increase in cash and cash equivalents		1,872			(3,643	)		(1,042	)		—			(2,813	)
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	$	3,528		$	(3,320	)	$	24,469		$	—		$	24,677

Statements of Cash Flows Information for Six Months Ended December 26, 2010:

	Parent			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations			Consolidated
Operating activities:
Net cash provided by operating activities	$	6,464		$	4,031		$	3,940		$	86		$	14,521
Investing activities:
Capital expenditures		—			(8,538	)		(4,786	)		—			(13,324	)
Investments in unconsolidated affiliates		—			—			143			—			143
Proceeds from sale of assets		—			6			179			—			185
Proceeds from split dollar life insurance premiums		3,241			—			—			—			3,241
Net cash provided by (used in) investing activities		3,241			(8,532	)		(4,464	)		—			(9,755	)
Financing activities:
Payments of notes payable		(15,862	)		—			—			—			(15,862	)
Payments on revolving credit facility		(77,225	)		—			—			—			(77,225	)
Proceeds from borrowings on revolving credit facility		77,225			—			—			—			77,225
Proceeds from stock option exercises		68			—			—			—			68
Purchase and retirement of Company stock		(2	)		—			—			—			(2	)
Debt financing fees		(825	)		—			—			—			(825	)
Net cash used in financing activities		(16,621	)		—			—			—			(16,621	)
Effect of exchange rate changes on cash and cash equivalents		—			—			2,435			(86	)		2,349
Net (decrease) increase in cash and cash equivalents		(6,916	)		(4,501	)		1,911			—			(9,506	)
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	$	3,022		$	(2,669	)	$	32,832		$	—		$	33,185