Unifi, Inc. announced a net loss of $4.6 million or 9 cents per share for the fiscal first quarter ended September 28, 2003, which compares to net income of $4.3 million or 8 cents per share for the prior year September quarter.

Net sales for the September quarter of $180.5 million reflect a decrease of 18.6 percent compared to net sales of $221.5 million for the prior year quarter. The decrease in sales over the prior year quarter is primarily due to a 16.8 percent decline in sales volumes caused by the continued increase in imported fabric and apparel, and the overall softness in the domestic textile and apparel industries.

Net income in the current quarter was also negatively impacted by reduced earnings from the Company's unconsolidated equity affiliates, who are being impacted by the same business conditions mentioned above. The Company's share of income from its equity affiliates was $0.3 million for the current September quarter compared to $3.6 million for the prior year quarter.

Also included in the September 2003 quarter results is a pre-tax benefit, included in cost of sales, of $9.6 million generated by the Company's manufacturing alliance with DuPont, which approximates the $9.9 million benefit realized in the September 2002 quarter.

Continuing its ongoing strategic focus on maximizing free cash flow and strengthening its balance sheet, the Company ended the September quarter with no funded bank debt. The Company also ended the September quarter with cash on hand of $72.3 million.

Brian Parke, Unifi's chief executive officer, said, “Our ability to generate cash and further strengthen our balance sheet on lower sales revenue validates our strategies and actions over the last few years, and confirms that we are making advances in creating a stronger, healthier Company.

“However, we continue to feel the effects of reduced consumer demand and spending as well as the negative impact of imported fabric and apparel on the domestic textile and apparel industries. Every level of the supply chain is being hit hard as the center of gravity for the supply of fabrics and garments moves to Asia.

“Going forward, we will continue to defend our domestic business through the development and introduction of innovative products and unique service solutions. Worldwide polyester consumption is expected to grow at a rate of approximately six percent per year, and polyester should represent half of all fibers consumed by 2010. Consumers want the comfort, convenience and performance of synthetic fibers, so driving innovation and improving the development-to-market cycle for new products will remain a priority for Unifi.

“We will also continue to develop the opportunities that exist in the Americas. A sustainable apparel supply base will remain in the Americas given the speed-to-market advantages offered from the region, and we will continue to grow our customer base and product offerings in the region.

“We will also participate in the growth in Asia. Our sales office in Hong Kong and operations in Thailand are now supplying the region with Unifi- quality product, including several of our value-added yarns. And, in terms of China, we continue to move forward with our negotiations with Kaiping, which will allow us to directly participate in China's growth and to become a cost- effective supplier to brands and retailers sourcing apparel programs from China.

“Looking forward, we expect this to be another challenging year. In light of these difficult business and economic conditions, Unifi will continue to take the actions necessary to meet the challenges ahead and maximize our operating performance.”

      UNIFI, INC.
      CONSOLIDATED STATEMENTS OF OPERATIONS
      (UNAUDITED) (In Thousands Except Per Share Data)

                                         For the Quarter      For the Quarter
                                              Ended                Ended
                                      September 28, 2003   September 29, 2002

      Net sales                              $180,486            $221,530
      Cost of goods sold                      169,930             198,413
      Selling, general & administrative
       expense                                 13,314              13,555
      Interest expense                          4,742               5,099
      Interest income                            (828)               (493)
      Other (income) expense, net                 817                (719)
      Equity in earnings of
         unconsolidated affiliates               (257)             (3,552)
      Minority interest (income) expense         (955)              2,813

      Income (loss) before income taxes        (6,277)              6,414
      Provision (benefit) for income
       taxes                                   (1,715)              2,087
      Net income (loss)                       $(4,562)             $4,327

      Earnings (losses) per common share
       - diluted:
               Net income (loss) per
                common share                   $(0.09)              $0.08