Unifi, Inc. posted a net loss from continuing operations for the company's third fiscal quarter of $1.3 million or 3 cents per share, a slight improvement from a net loss of $1.6 million or 3 cents per share for the prior year's quarter. Net income from continuing operations for the first nine months of fiscal year 2006 was a net loss of $9.5 million or 18 cents per share, which includes a total of $2.3 million in pre-tax impairment charges associated with the company's properties located in Mayodan, N.C., compared to a net loss of $7.3 million or 14 cents per share for the prior year period.

Net income for the current March quarter, including discontinued operations, was a net loss of $2.1 million or 4 cents per share compared a net loss of $1.9 million or 4 cents per share for the prior March quarter. Net income for the first nine months of fiscal year 2006, including discontinued operations, was a net loss of $9.0 million or 17 cents per share compared to a net loss of $32.2 million or 62 cents per share for the prior year period, which includes charges associated with the closure of the company's facility in Ireland.

Net sales from continuing operations for the current March quarter of $181.4 million were down $26.3 million or 12.7 percent compared to net sales of $207.7 million for the prior year March quarter. Net sales for the first nine months of fiscal year 2006 were $555.6 million, which is a decrease of $37.8 million or 6.4 percent compared to net sales of $593.4 million for the first nine months of fiscal year 2005. Net sales volume for the current quarter reflects the impact that higher energy prices and rising interest rates had on substantially slowing consumer spending in the fourth quarter of 2005. Cash-on-hand at the end of the current March quarter was $88.4 million.

“Our underlying business experienced distinct improvements, including cash generation, in the current quarter,” said Bill Lowe, Chief Operating Officer and Chief Financial Officer for Unifi. “We continue to be selective with our product mix to maximize our financial results, and we are continuing to capitalize on opportunities that exist in our region, including emerging markets, by offering innovation, differentiation, and speed-to-market advantages to our customers.”

Brian Parke, Chairman and CEO of Unifi, said, “Our Board of Directors has completed its strategic review, which was designed to scrutinize the various strategic alternatives available to our business and our shareholders. Based on the review, both management and the Board of Directors agree the optimal strategy is the pursuit of selective consolidation opportunities in our domestic yarn market, while continuing to explore participation in the global growth of emerging markets. As part of this strategy, the Company will continue to evaluate its debt structure in order to maintain flexibility to make selective acquisitions and investments. We believe this strategy allows the company to create meaningful and sustainable shareholder value, significantly in excess of the value provided from other alternatives, such as a sale or merger of the company.”

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

                                        For the Quarters  For the Nine Months
                                             Ended               Ended
                                       March 26, March 27, March 26, March 27,
                                          2006      2005      2006      2005

    Net sales                          $181,398  $207,688  $555,617  $593,368
    Cost of sales                       168,261   198,356   524,707   563,379
    Selling, general & administrative
     expenses                            10,184    11,360    31,132    30,548
    Provisions for bad debts                218       561     1,349     5,039
    Interest expense                      4,606     5,256    14,044    15,214
    Interest income                      (1,162)     (473)   (3,587)   (1,351)
    Other (income) expense, net            (969)     (701)   (2,544)   (1,247)
    Equity in (earnings) losses
      of unconsolidated affiliates          564    (4,457)   (1,278)   (6,285)
    Minority interest (income) expense        -        53         -      (444)
    Restructuring charges                     -         -        29         -
    Write down of long-lived assets         815         -     2,315         -
    Loss from continuing operations
     before income taxes and
     extraordinary item                  (1,119)   (2,267)  (10,550)  (11,485)
    Provision (benefit) for income taxes    208      (654)   (1,023)   (4,163)
    Loss from continuing operations
     before extraordinary item           (1,327)   (1,613)   (9,527)   (7,322)
    Income (loss) from discontinued
     operations, net of tax                (790)   (1,659)      556   (26,251)
    Extraordinary gain -
     net of taxes of $0                       -     1,342         -     1,342
    Net loss                            $(2,117)  $(1,930)  $(8,971) $(32,231)

    Earnings (losses) per common share
     (basic and diluted):
       Net loss - continuing operations  $(0.03)   $(0.03)   $(0.18)   $(0.14)
       Net income (loss) -
        discontinued operations           (0.01)    (0.04)     0.01     (0.51)
       Extraordinary gain -
        net of taxes of $0                    -      0.03         -      0.03
       Net loss                          $(0.04)   $(0.04)   $(0.17)   $(0.62)

    Average basic and diluted shares
     outstanding                         52,177    52,125    52,144    52,099