Unifi Inc. said it will increase its yarn texturing capacity in the U.S. and Central America to serve growing demand for its Repreve and other premium synthetic yarns from Hanesbrands, Patagonia, The North Face, DC, Quiksilver and other brands and retailers determined to maintain a supply chain for synthetic apparel in the region.
The Greensboro, NC-based manufacturer of Nylon and polyester yarns reported net sales increased $5.5 million, or 3.3 percent, to $174.2 million for the quarter ended Sept. 28, compared to net sales of $168.7 million for the prior year quarter. The gain was attributed to higher volume at the company’s Nylon and International Segments (Brazil and China) as well as higher sales of premium textured polyester yarns that provide anti-microbial, moisture management, UV protection, drape, stretch and other performance and aesthetic attributes. Gross profit improved to $20.9 million and 12.0% of net sales.
Net income reached $7.1 million, or 39 cents per basic share, during the quarter, compared to $8.9 million, or 46 cents, in the fiscal first quarter of 2013. Improved operating results for the company’s Central American operations were offset primarily by a $2.5 million decrease in earnings from the company’s equity affiliate, Parkdale America, LLC, which manufactures cotton yarns.
Repreve, a polyester yarn made from recycled PET bottles, was embraced years ago by environmentally conscious brands such as The North Face and Patagonia for use in fleece garments. This year, UFI began partnering with the NFL’s Detroit Lions, the University of North Carolina at Chapel Hill and Marvel Universe Live! to drive consumer awareness of the fiber beyond the outdoor and action sports world through its #TURNITGREEN campaign. The marketing is already spurring new business that will enable UFI to invest about $40 million in the current fiscal year expanding capacity in the NAFTA/CAFTA region.
Among the projects under consideration is the addition of 10 texturing machines to the company’s plants in North Carolina and El Salvador that will enhance UFI’s small production run capabilities. It is finalizing a plan to convert one spinning machine into six smaller machines that could produce its premium yarns in smaller order sizes more efficiently in line with customer demands. It is securing permits for a solar farm at its Yadkinville, NC plant that will generate enough energy to supply 10 percent of the electricity needed to run its Repreve recycling center. Based on current forecasts, UFI expects to exhaust the capacity at its recently expanded Repreve recycling center by the end of next year, which means it will have to add a fourth recycling line in Yadkinville before 2016. Finally, it is scouting upstream investments that could help secure its supply of plastic bottles such as bottle washing plants.
“Our apparel production continues to grow in the NAFTA/CAFTA region, and increases in US retail spending, as well as re-shoring of synthetic apparel programs are fueling increases in the consumption of synthetic yarns within the CAFTA region,” said UFI Chairman and CEO Bill Jasper.
