Unifi released operating results for its third quarter of fiscal year 2004. The Company reported a net loss of $50.0 million or 96 cents per share for the quarter ending March 28, 2004, which compares to net income of $1.1 million or 2 cents per share for the prior year March quarter. The Company also reported a net loss of $63.8 million or $1.22 per share for the first nine months of fiscal 2004 versus net income of $3.3 million or 6 cents per share for the first nine months of fiscal 2003.
Net income for the current quarter and the first nine months of fiscal 2004 was negatively impacted by pre-tax charges of $20.8 million associated with the broad restructuring of the Company's U.S. and European operations, which was announced on March 2, 2004, as well as an asset impairment charge of $38.7 million. Additionally, included in the pre-tax loss for the March quarter was a $6.7 million loss from its share of income or losses from its equity affiliates.
Net sales for the March quarter of $190.9 million reflect a decrease of 13.1 percent compared to net sales of $219.6 million for the prior year March quarter. However, net sales increased $7.2 million or four percent over the previous quarter ended December 28, 2003. Fiscal 2004 year-to-date net sales of $554.8 million reflect a 13.7 percent decrease from net sales of $643.0 million reported for the first nine months of fiscal 2003. Net sales continue to be negatively impacted by increases in imported fabric and apparel and the ongoing softness in the domestic textile and apparel industries.
William Lowe, Chief Operating Officer and Chief Financial Officer for Unifi, said, “Excluding restructuring, special items and the results of our equity affiliates, our operating loss as a percent of sales for the third quarter was significantly less than the second quarter. The fact that we are seeing an improvement in the conversion of sales in our underlying business prior to the beneficial impact of our broad restructuring is a positive sign. We expect to see continued improvement in this area in our fourth fiscal quarter, as the benefits of the restructuring begin to take effect.”
“We are also gaining momentum on other new initiatives within our domestic business units that are designed to improve profitability. We anticipate seeing the results of these efforts, as well as those of our restructuring, over the next few quarters.”
Continuing its ongoing strategic focus on maintaining a strong balance sheet, the Company ended the March quarter with cash-on-hand of $59.7 million, which is a slight improvement over the $59.3 million cash-on-hand at the end of the December quarter.
Financial Statements to FollowUNIFI, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited) (In Thousands Except Per Share Data)For the Quarters For The Year to Date
Ended Periods Ended
March 28, March 30, March 28, March 30,
2004 2003 2004 2003Net sales $190,915 $219,633 $554,786 $643,022
Cost of sales 182,128 204,094 531,747 589,417
Selling, general &
administrative expense 13,688 14,185 39,847 39,661
Interest expense 4,741 4,534 14,272 15,079
Interest income (725) (344) (2,121) (1,090)
Other (income) expense, net (2,663) (90) (777) (160)
Equity in (earnings) losses
of unconsolidated
affiliates 6,669 (3,209) 6,558 (9,366)
Minority interest (income)
expense (4,755) (1,163) (6,831) 2,408
Restructuring charges 20,799 - 20,799 -
Arbitration costs and
expenses 3 2,458 3 5,292
Alliance plant closure
costs (206) (3,486) (206) (3,486)
Asset impairments and write
downs 38,703 - 38,703 -Income (loss) before income
taxes (67,467) 2,654 (87,208) 5,267
Provision (benefit) for
income taxes (17,475) 1,510 (23,434) 1,966
Net income (loss) $(49,992) $1,144 $(63,774) $3,301Earnings (losses) per
common share - diluted:
Net income (loss)
per common share $(0.96) $0.02 $(1.22) $0.06Average diluted shares
outstanding 52,075 53,794 52,306 53,818Depreciation and
amortization included
above $16,311 $17,489 $50,025 $55,565
