Unifi, Inc. reported net income for the fiscal year ended June 30 reached its highest level in 10 years and said it will plow more money into Repreve, a brand of polyester yarns made with recycled material that is in high demand among many outdoor apparel brands.
The Greensboro, NC maker of polyester fibers reported net income of $28.8 million, or $1.52 per basic share, for the fiscal year ended June 29, 2014, which consisted of 52 fiscal weeks, compared to net income of $16.6 million, or $0.84 per basic share, for the prior fiscal year, which consisted of 53 fiscal weeks. The results reflected improved operating results for the company's domestic and Central American operations and lower domestic depreciation expenses, as partially offset by lower earnings from the company's foreign operations.
Net sales decreased $26.1 million, or 3.7 percent, to $687.9 million for the 2014 fiscal year compared to net sales of $714.0 million for the prior fiscal year. Improvement in the company's domestic operations was offset by the negative impact of one less week of sales in the current fiscal year for the company's domestic and Central American operations, unfavorable currency translation effects in Brazil and lower volumes for the company's operations in China.
“We are very pleased with the full year results generated from our domestic business, which reflects the continued growth in our value-added and differentiated products, increased demand from the CAFTA region, and the ability to provide pricing stability throughout the year based on consistent raw material costs,” said Roger Berrier, President and Chief Operating Officer of Unifi. “We completed the expansion of our Repreve Recycling Center, and we will continue to drive growth as we evolve the Repreve brand to include additional performance and sustainability attributes.”
Cash and cash equivalents as of June 29, 2014 were $15.9 million, an increase of $7.2 million from June 30, 2013. Net debt at the end of the June 2014 quarter was $83.6 million, compared to $89.0 million at June 30, 2013. The company had $61.1 million available under its revolver as of June 29, 2014, compared to $36.1 million as of June 30, 2013.
Net income for the fourth quarter ended June 30, which consisted of 13 fiscal weeks, was $8.8 million, or $0.48 per basic share, compared to net income of $10.5 million, or $0.54 per basic share, for the prior year fourth quarter, which consisted of 14 fiscal weeks. Net income was negatively impacted by the reduced number of weeks in the current fiscal quarter as well as lower earnings from the company's foreign operations and equity affiliates. Net sales decreased $19.0 million, or 9.5 percent, to $181.8 million for the current fiscal quarter, compared to net sales of $200.7 million for the prior year quarter, reflecting one less week in the current quarter for the company's domestic and Central American operations, unfavorable currency translation effects in Brazil and lower volumes in the company's foreign operations.
“I am pleased with our improved annual operating results, especially in the North American region, and with our consolidated net income, which is the company's highest in more than ten years,” said Unifi Chairman and CEO Bill Jasper. “Our strong balance sheet and cash generation will allow us to fund high payback projects that drive revenue growth, improve margins, and provide for additional PVA growth opportunities, especially for Repreve, which we plan to balance with stock repurchases to enhance shareholder value.”
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (Unaudited) |
(amounts in thousands, except per share amounts) |
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For the Three Months Ended (1) |
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For the Fiscal Years Ended (1) |
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June 29, 2014 |
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June 30, 2013 |
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June 29, 2014 |
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June 30, 2013 |
Net sales |
$ |
181,752 |
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$ |
200,742 |
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$ |
687,902 |
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$ |
713,962 |
Cost of sales |
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156,731 |
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175,030 |
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604,640 |
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640,858 |
Gross profit |
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25,021 |
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25,712 |
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83,262 |
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73,104 |
Selling, general and administrative expenses |
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12,308 |
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13,445 |
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46,203 |
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47,386 |
Provision (benefit) for bad debts |
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101 |
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(411) |
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287 |
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(154) |
Other operating expense, net |
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1,281 |
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1,536 |
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5,289 |
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3,409 |
Operating income |
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11,331 |
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11,142 |
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31,483 |
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22,463 |
Interest income |
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(220) |
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(190) |
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(1,790) |
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(698) |
Interest expense |
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1,212 |
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448 |
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4,329 |
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4,489 |
Loss on extinguishment of debt |
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– |
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– |
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– |
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1,102 |
Other non-operating expense |
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126 |
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– |
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126 |
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– |
Equity in earnings of unconsolidated affiliates |
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(4,233) |
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(4,732) |
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(19,063) |
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(11,444) |
Income before income taxes |
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14,446 |
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15,616 |
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47,881 |
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|
29,014 |
Provision for income taxes |
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6,010 |
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5,385 |
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20,161 |
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13,344 |
Net income including non-controlling interest |
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8,436 |
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10,231 |
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27,720 |
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15,670 |
Less: net (loss) attributable to non-controlling
interest |
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(331) |
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(285) |
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(1,103) |
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(965) |
Net income attributable to Unifi, Inc. |
$ |
8,767 |
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$ |
10,516 |
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$ |
28,823 |
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$ |
16,635 |
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Net income attributable to Unifi, Inc. per
common share: |
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Basic |
$ |
0.48 |
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$ |
0.54 |
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$ |
1.52 |
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$ |
0.84 |
Diluted |
$ |
0.46 |
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$ |
0.52 |
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$ |
1.47 |
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$ |
0.80 |
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(1) For the Company's operations in the United States and El Salvador, the comparative prior year periods each contained one additional fiscal week. |
