Unifi, Inc. reported net income $5.4 million, or 27 cents per share for the second fiscal quarter ended Dec. 26, 2010, compared to net income of $2.0 million, or 10 cents per share, for the prior year quarter ended Dec. 27, 2009.  Net sales increased $19 million, or 13%, to $161 million for the December 2010 quarter compared to net sales of $142 million for the prior year quarter. 


Highlights for the quarter include:


  • The quarter over prior year quarter increase in net sales was primarily a result of  improvement across substantially all of the company's global operations as the economic recovery continues to strengthen;
  • Operating results and working capital improvements resulted in a $7 million increase in cash-on-hand during the quarter; and,
  • Adjusted earnings before income taxes, depreciation and amortization (adjusted EBITDA) increased $2.4 million over the prior year December quarter to $15.7 million.

The company reported net income of $15.6 million, or $0.78 per share, for the first six months of fiscal year 2011 compared to net income of $4.4 million, or $0.22 per share, for the prior year period.  Net sales increased $50 million, or 17 percent, to $335 million for the first half of the fiscal year compared to net sales of $285 million for the prior year period.  Adjusted EBITDA for the first half of fiscal year 2011 was $34.1 million compared to $28.4 million for the prior year period.


“We are pleased with the company's performance during the first half of the 2011 fiscal year and are looking forward to positive impacts from the strategic capital expenditures made over the past six months,” said Bill Jasper, President and CEO of Unifi.  “Our plant in Central America opened in December and is now fully operational at high capacity utilization.  The company also expects to celebrate the grand opening of our recycling center in early May, providing a secure, high-quality source of raw materials and creating new growth opportunities for our Repreve products.”


Ron Smith, Chief Financial Officer of Unifi, said, “The company continues to maintain a solid balance sheet and excellent liquidity, as a result of strong operating results and working capital reductions.  We improved cash-on-hand in the quarter, despite the payment of semi-annual interest on our outstanding notes and significant capital expenditures in support of our strategic growth initiatives. 


“Going forward, the company plans to utilize the strength of our balance sheet and operating results to deleverage and reduce our interest carrying costs.  Over the next couple of years, we plan to use excess operating cash-on-hand and a limited amount of borrowings under our revolving credit facility to pay down significant portions of our 11.5% senior secured notes due May 2014.  We initiated this strategy on Jan. 11, 2011, when we announced that we were calling for the redemption of $30 million of the notes at a redemption price of 105.75% of the principal amount of the redeemed notes, to be effective February 16, 2011.”

Cash-on-hand at the end of December 2010 was $33.2 million, an increase of $6.9 million from the end of September 2010.  Total debt remained at $164 million, and the company had no outstanding borrowings on its revolving credit facility.  Following the redemption of the $30 million of notes on February 16, 2011, the Company expects borrowings under the revolving credit facility to be approximately $35 million.


At the annual meeting held on Oct. 27, 2010, the company's stockholders approved an authorization enabling its Board of Directors to affect a one-for-three reverse stock split of its common stock.  The board of directors authorized the one-for-three reverse stock split, which became effective Nov. 3, 2010.  The financial statements included in this press release have been retroactively adjusted to reflect this reverse split.








































































































































































































































































































































































UNIFI, INC.  

 CONSOLIDATED STATEMENTS OF OPERATIONS


 (Unaudited) (Amounts in Thousands, Except Per Share Data)





For the Quarters Ended



For the Six-Months Ended





December 26,
2010

December 27,
2009

December 26,
2010

December 27,
2009














Summary of Operations:










 Net sales

$     160,802

$     142,255

$     334,822

$     285,106



 Cost of sales

141,721

124,919

294,578

248,364



 Restructuring charges  

1,183

–

1,546

–



 Write down of long-lived assets

–

–

–

100



 Selling, general & administrative expenses

10,752

12,152

21,879

23,316



 Provision (benefit) for bad debts

86

(564)

45

12



 Other operating expense (income), net

16

(109)

259

(196)














Non-operating (income) expense:










 Interest income

(668)

(834)

(1,411)

(1,580)



 Interest expense

5,062

5,223

10,331

10,715



 Other non-operating expense

450

–

450

–



 Loss (gain) on extinguishment of debt

–

–

1,144

(54)



 Equity in earnings of unconsolidated affiliates

(5,039)

(1,609)

(13,990)

(3,672)



 Income from operations before income taxes

7,239

3,077

19,991

8,101



 Provision for income taxes

1,854

1,124

4,371

3,659



               Net income



$         5,385

$         1,953

$       15,620

$         4,442














Earnings per share:












               Income per common share – basic



$           0.27

$           0.10

$           0.78

$           0.22














               Income per common share – diluted

$           0.26

$           0.09

$           0.76

$           0.22