Unifi, Inc. announced a net loss of $30.5 million, or 57 cents per share, for the quarter ending June 29, 2003, which includes a pre-tax charge of $16.9 million for employee severance and related charges associated with the restructuring of the Company’s domestic and European operations, and a previously disclosed pre-tax charge of $13.9 million related to the outcome of the Company’s arbitration with DuPont, all compared to a net loss of $1.6 million, or 3 cents per share, for the prior year June quarter. Net sales for the June quarter, which contained 13 weeks, were $206.1 million, per share compared to the $256.5 million of net sales for the prior year June quarter, which contained 14 weeks. The decline in sales is attributed to fewer operating weeks in the current year quarter and reduced sales volumes due to overall weakness in the textile and apparel sector.

The Company continued its ongoing strategic focus to improve free cash flow, ending the fiscal year with cash on hand of $76.8 million, which represents an increase of $57.7 million over the prior year cash on hand of $19.1 million. The Company also continues to have no amounts outstanding under its bank credit facility. The Company’s continuing ability to improve its cash position comes as a result of the continued generation of cash flows from operations and distributions of earnings from unconsolidated equity affiliates, reductions in working capital and the utilization of the Company’s state-of-the-art manufacturing and information technology to minimize capital expenditures.

During the June quarter, the Company repurchased approximately 509,000 shares of the 8.6 million shares of Unifi common stock authorized for repurchase under the Unifi share repurchase program.

For the 2003 fiscal year, the Company reported a net loss of $27.2 million, or 51 cents per share, compared to the net loss of $43.9 million, or 82 cents per share, for the prior fiscal year. Net sales for fiscal 2003, which contained 52 weeks, were $849.1 million compared to $914.7 million for the prior fiscal year, which contained 53 weeks.

Results for the current June quarter and the current fiscal year were positively impacted by pre-tax income of $1.3 million and $10.6 million, respectively, stemming from the equity in earnings of the Company’s unconsolidated equity affiliates.

Also included in the results for the current June quarter and current fiscal year is a pre-tax benefit, included in cost of sales, of $9.5 million and $34.6 million, respectively, generated by the Company’s manufacturing alliance with DuPont. This manufacturing alliance remains an important facet of the Company’s day-to-day operations, and both Unifi’s and DuPont’s management remain fully committed to maximizing the future benefits of the alliance. However, as previously disclosed, despite the fact that the arbitration with DuPont has been concluded, DuPont continues to pursue collection of a $17.6 million claim that was dismissed by the Arbitration Panel, as this claim was not properly brought before the Panel. The Company continues to deny these assertions.

Brian Parke, Unifi’s chief executive officer said, “We have continued to make progress in strengthening our balance sheet, and remain focused on improving the overall performance of our operating results. We have the right product, global expansion and marketing strategies in place, supported by an organization that is leaner, faster and more efficient than ever.

The new products launched in the past two years have completed the development cycle with our customers and are now finding their way into new retail programs with many of the world’s most well-known and respected brands. The success of these programs at retail will help sustain demand for our products, as well as create opportunities for expansion into new programs.

The focus on apparel production in the Americas will continue to increase as more and more brands and retailers recognize the impact that speed and flexibility have on their operating effectiveness and profitability. Throughout the Caribbean Basin region, Unifi is working to improve transportation logistics and develop an industry-leading technology infrastructure to better manage inventories and shipments. In addition, our operations in Brazil have outperformed expectations, as strong demand for our products throughout that region has resulted in greater than anticipated results.

And, although we experienced a decrease in net sales volume in fiscal 2003 compared to fiscal 2002, we expect our gross margins to grow slightly, as we continue to reduce operating costs and improve operating efficiencies.

Looking forward, our industry will continue to face extremely challenging conditions caused by slow economies around the world and aggressive fabric and apparel imports into the U.S. and Europe. In light of these difficult business and economic conditions, Unifi will continue to take the actions necessary to maximize operating performance.”

    (Unaudited) (In Thousands Except Per Share Data)

                                     For the Quarters    For The Year to Date
                                          Ended              Periods Ended
                                  June 29,      June 30,   June 29,   June 30,
                                    2003          2002       2003       2002

    Net sales                    $ 206,094    $ 256,534  $ 849,116  $ 914,716
    Cost of sales                  188,394      234,484    777,812    840,164
    Selling, general &
     administrative expense         14,015       14,035     53,676     51,093
    Interest expense                 4,821        5,771     19,900     22,956
    Interest income                    793          600      1,883      2,559
    Other (income) expense, net      2,746       10,489      2,586      9,524
    Equity in (earnings) losses
     of unconsolidated affiliates   (1,261)      (2,883)   (10,627)     1,704
    Minority interest (income)
     expense                         2,361         (861)     4,769         --
    Alliance plant closure costs        --           --     (3,486)        --
    Arbitration costs and expenses  13,893           --     19,185         --
    Employee severance and related
     charges                        16,893           --     16,893         --

    Loss before income taxes and
     cumulative effect of accounting
     change                        (34,975)      (3,901)   (29,709)    (8,166)
    Benefit for income taxes        (4,498)      (2,257)    (2,532)    (2,092)
    Loss before cumulative effect of
     accounting change             (30,477)      (1,644)   (27,177)    (6,074)
    Cumulative effect of accounting
     change (net of applicable
     income taxes of $8,420)            --           --         --     37,851

    Net loss                     $ (30,477)    $ (1,644) $ (27,177) $ (43,925)

    Losses per common share -
      Loss before cumulative
       effect of accounting
       change                    $   (0.57)    $  (0.03) $   (0.51) $   (0.11)
      Cumulative effect of
       accounting change                --           --         --      (0.71)
         Net loss per common
          share                  $   (0.57)    $  (0.03) $   (0.51) $   (0.82)