Unifi Inc., which supplies polyester and nylon yarns to many outdoor and athletic apparel brands, reported net sales declined 7.6 percent to $162.2 million for the fiscal first quarter ended Sept. 27, compared to the same quarter a year earlier, primarily due to the significant devaluation of the Brazilian Real and pricing declines due to lower raw material costs.
However, the Greensboro, NC company increased operating income by more than $2.0 million over the prior year due to the strong performance of its regional yarn texturing business and premier value-added products, such as Repreve, a family of yarns made from recycled PET bottles. Improved margins at the company's subsidiary in China and higher volumes at Unifi's Polyester Segment also contributed to the growth in operating income.
“We continue to see improvements in the areas of our business that we are supporting through strategic capital expenditures,” said Roger Berrier, President and Chief Operating Officer of Unifi. “The company is supporting the growth of its premier value-added products with several capital investments, including the expansion of our existing Repreve Recycling Center and the construction of a plastic bottle processing plant scheduled to start-up in May 2016. We will also explore opportunities to meet increased demand in the NAFTA and CAFTA regions over the next 18 months. The region continues to grow at an average annual rate of approximately five percent and presents opportunities for us to grow our texturing operations.”
Unifi reported net income reached $8.0 million, or $0.45 per basic share, compared to $7.1 million, or $0.39 per basic share, for the prior year first quarter. Adjusted net income reached $8.1 million, or $0.45 of Adjusted EPS, compared to $6.8 million, or $0.37, for the prior year first quarter. The results reflect improved performance for the company's consolidated operations, along with a lower effective tax rate, and were achieved despite lower earnings from Parkdale America, LLC and the effects from the devaluation of the Brazilian Real.
Gross profit improved to $21.0 million, or 12.9 percent of net sales, from $20.5 million, or 11.6 percent of net sales, for the prior year comparable quarter. Adjusted EBITDA reached $15.4 million, an improvement from $14.0 million for the prior year first quarter.
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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 |
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September 27, 2015 |
September 28, 2014 |
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Net sales |
$ |
162,165 |
$ |
175,561 |
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Cost of sales |
141,181 |
155,111 |
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Gross profit |
20,984 |
20,450 |
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Selling, general and administrative expenses |
10,830 |
11,649 |
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Provision for bad debts |
613 |
584 |
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Other operating (income) expense, net |
(146) |
600 |
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Operating income |
9,687 |
7,617 |
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Interest income |
(163) |
(317) |
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Interest expense |
984 |
819 |
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Equity in earnings of unconsolidated affiliates |
(2,860) |
(3,721) |
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Income before income taxes |
11,726 |
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