Unifi will be shutting two production lines and downsizing its recently acquired Kinston, North Carolina facility. The Company operates four production lines at the facility currently. The Company expects to close a line in December 2004 and the second line by March 31, 2005.
The Company acquired the Kinston facility on September 30, 2004 in a transaction valued at approximately $22.5 million. The acquisition resulted in a more vertically integrated base of operations for the Company in the U.S. through the addition of polymer spinning. As a part of the agreement, the manufacturing alliance between Unifi and INVISTA and all related agreements were terminated.
“At the time we announced this acquisition, we stated that our first priority would be to streamline the product mix and production lines between Kinston and our existing domestic polyester operations to optimize capacity to fit the market,” said Bill Lowe, Chief Operating Officer and Chief Financial Officer for Unifi. “This is one of the first major steps that we are taking quickly to get this operation on track and contributing positively to our operating results. This is a coordinated effort with our other polyester operations to exit non-profitable business and establish a solid base upon which to build value in the future for our shareholders, bondholders, and employees.”
The Kinston facility currently has approximately 740 full-service and contract employees. The Company estimates that after production ceases on these two production lines that it will employ approximately 250 full-service employees at the site.