Unifi Inc. reported sharply higher profits on flat dollar sales for the fiscal year ended June 28 as the devaluation of the Brazilian currency and lower input costs offset higher volume sales of its synthetic yarns, widely used by athletic and outdoor apparel brands.
The Greensboro, NC manufacturer reported net income reached $42.2 million, or $2.32 per basic share, compared to net income of $28.8 million, or $1.52 per basic share, for the prior fiscal year. The company is reporting Adjusted Net Income of $34.3 million, or $1.88 of Adjusted EPS, for the current fiscal year, compared to Adjusted Net Income of $31.2 million, or $1.65 of Adjusted EPS, for the prior fiscal year.
These earnings reflect improved operating results for the company's global operations, along with a lower effective tax rate. Earnings were achieved despite effects from the devaluation of the Brazilian Real.
Net sales of $687.1 million for the 2015 fiscal year were essentially flat compared to the prior fiscal year. Devaluation of the Brazilian Real and lower sales prices, due to lower raw material costs, offset sales volume improvements. However, higher margins for all reportable segments, as well as higher consolidated sales volumes, drove improvement in operating results for the year.
“Increased demand for our premier value-added yarns, strong operating results from our international businesses and higher earnings from our equity affiliates helped drive our strong performance,” said Roger Berrier, president and COO, Unifi. “We expect that our domestic business will begin to see in fiscal year 2016 the benefits of the strategic capital projects that were completed in the 2015 fiscal year, including the addition of texturing machines to support growing demand for synthetic yarns from the CAFTA region, as well as the expansion of our air jet texturing capacity. We also expect to start seeing the benefits of the recently announced expansions of our Repreve Recycling Center and the backward integration into bottle processing as we enter our 2017 fiscal year.”
Cash and cash equivalents were $10.0 million as of June 28, a decrease of $5.9 million compared to $15.9 million as of June 29, 2014, the end of the prior fiscal year. Net debt at June 28 was $94.1 million, compared to $83.6 million a year earlier. The company had $75.9 million of available borrowing capacity under its revolver at the end of the fiscal year, compared with $61.1 million as of June 29, 2014.
Net income was $15.6 million, or $0.86 per basic share, for the fourth quarter ended June 28, 2015, compared to net income of $8.8 million, or $0.48 per basic share, for the prior year fourth quarter. Adjusted EPS for the fourth quarter of fiscal year 2015 improved $0.05 to $0.55 when compared to the prior year fourth quarter period's Adjusted EPS of $0.50. Net sales decreased $6.8 million, or 3.7 percent, to $175.0 million for the current year fourth quarter, compared to net sales of $181.8 million for the prior year fourth quarter– primarily attributable to the devaluation of the Brazilian Real.
“The company's $34.3 million Adjusted Net Income for the 2015 fiscal year makes this our most profitable year since fiscal year 2000 and is attributable to our strict adherence to our mix enrichment efforts, our focus on recycling and sustainability initiatives, plus our commitment to driving operational excellence throughout the organization,” said Unifi Chairman and CEO Bill Jasper. “Going forward, we will continue to focus on enhancing our manufacturing processes to improve cost and operating efficiencies across our broader, more specialized product offering. We will also continue to investigate and invest in opportunities that allow us to continue to grow our premier value-added products, expand our business globally and diversify the company, always with sustainability at the core of what we do.”
Unifi enhances demand for its products and helps others create a more effective textile industry supply chain through the development and introduction of branded polyester and nylon yarns that provide unique performance, comfort and aesthetic advantages. Unifi yarns, including its flagship Repreve family of eco-friendly yarns made from recycled materials, are found in products of major brands in the apparel, hosiery, automotive, home furnishings and industrial markets.
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CONDENSED CONSOLIDATED STATEMENTS OF INCOME (Unaudited) |
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(amounts in thousands, except per share amounts) |
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For the Three Months Ended |
For the Fiscal Years Ended |
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June 28, 2015 |
June 29, 2014 |
June 28, 2015 |
June 29, 2014 |
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Net sales |
$ |
174,951 |
$ |
181,752 |
$ |
687,121 |
$ |
687,902 |
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Cost of sales |
149,632 |
156,731 |
596,416 |
604,640 |
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Gross profit |
25,319 |
25,021 |
90,705 |
83,262 |
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Selling, general and administrative expenses |
12,406 |
12,308 |
49,672 |
46,203 |
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Provision for bad debts |
300 |
101 |
947 |
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