Unifi, Inc. announced a net loss of $3.1 million or 6 cents per share for the first quarter ended September 25, 2005, including discontinued operations, compared to a net loss of $22.6 million or 43 cents per share last year. Included in the current September quarter is a $2.8 million gain from the sale of the company's property located in Ireland.
Net income from continuing operations for the current quarter was a net loss of $5.7 million or 11 cents per share compared to a net loss of $1.2 million or 2 cents per share for the prior September quarter. Net income from continuing operations for the current quarter was negatively impacted by a pre-tax impairment charge of $1.5 million associated with company properties located in Mayodan, N.C., and $1.4 million in pre-tax losses from the winding down of Unimatrix Americas, the company's external sourcing business.
Net sales from continuing operations for the current September quarter of $185.4 million were up $5.8 million or 3.2% compared to net sales of $179.6 million for the prior year September quarter.
“We faced many challenges this quarter, including certain key customers adjusting inventory during the summer months and the unexpected interruption of our supply chain of raw materials from the impact of both Hurricane Katrina and Rita, which has continued into October,” said Bill Lowe, COO and CFO for Unifi. “Although we are still assessing the long-term effect of polyester ingredient supply and the increases in raw material and energy costs on the profitability of our business for the remainder of the fiscal year, we have taken certain measures to guarantee continuity of production to assure our customers of a supply of product.”
Cash-on-hand at the end of the current September quarter was $90.7 million, up from the $45.7 million cash-on-hand at the end of the prior year September quarter.
Brian Parke, chairman and CEO of Unifi, said, “After two months of operations, Yihua Unifi, our joint venture in China, is making progress in improving operational quality and manufacturing expertise. We will be introducing four of our branded performance yarns to the China market at a key industry trade show at the end of October.”
UNIFI, INC. CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) (In Thousands Except Per Share Data) For the Quarters Ended September 25, September 26, 2005 2004 Net sales $185,441 $179,590 Cost of sales 177,919 168,854 Selling, general & administrative expenses 10,981 9,505 Provisions for bad debts 527 820 Interest expense 4,777 4,665 Interest income (1,277) (373) Other (income) expense, net (851) (274) Equity in earnings of unconsolidated affiliates (1,824) (1,154) Minority interest income - (188) Restructuring charges 29 - Writedown of long-lived assets 1,500 - Income (loss) from continuing operations before income taxes and extraordinary item (6,340) (2,265) Benefit for income taxes (681) (1,105) Income (loss) from continuing operations before discontinued operations and extraordinary item (5,659) (1,160) Gain (loss) from discontinued operations, net of tax 2,781 (21,395) Extraordinary loss - net of taxes of $0 (208) - Net loss $(3,086) $(22,555) Earnings (losses) per common share: Net income (loss) - continuing operations $(0.11) $(0.02) Net income (loss) - discontinued operations 0.05 (0.41) Extraordinary loss - net of $0 tax - - Net loss $(0.06) $(0.43)