Unifi, Inc. saw fiscal first quarter net sales from
continuing operations nudge up to $170.5 million from $169.9 million a
year ago. Results include the Dillon acquisition in January 2007.
Including discontinue operations, the textile maker showed a deficit of
$9.2 million or 15 cents a share, in the period versus a loss of $10.1
million, or 19 cents, a year ago.

Net income for the current quarter was hurt by $2.6 million in
restructuring charges and a $4.5 million non-cash impairment charge to
adjust the carrying value of the company's ownership interest in one of
its equity affiliates.

“Unifi began its fiscal 2008 year with a solid
quarter operationally, in which we had positive operating results
absent certain restructuring and severance related charges, which were
included in cost of sales and SG&A expenses,” said Ron Smith, CFO
for Unifi. “Quarter over prior year quarter sales and the underlying
operating results improved slightly despite the effects of a declining
market, further validating our consolidation strategy for the U.S.
market. Additionally, the closure of our Kinston facility in October
will allow us to reposition Unifi in the partially oriented yarn
market, thereby competing more effectively.”

Total long-term debt at the end of the September
quarter was $228.5 million, which is a reduction of $6.1 million over
the $234.6 million in debt at the end of the June quarter. Cash-on-hand
at the end of the current September quarter decreased to $33.9 million,
down from the $40.0 million cash-on-hand at the end of the June
quarter, primarily as a result of the working capital build related to
the Kinston closure.

Bill Jasper, president and CEO of Unifi, said,
“While we are pleased with the operational results of the quarter, we
recognize that there is still work to be done. Our leadership team will
concentrate on achieving corporate profitability as soon as possible,
maximizing cash generation and developing a vision and executing a plan
for growth and the long-term health of the Company. We will also
accelerate our efforts to achieve profitability in our joint venture in
China and position it for long-term success.”

   UNIFI, INC.
    CONSOLIDATED STATEMENTS OF OPERATIONS
    (Unaudited)
    (Amounts in Thousands Except Per Share Data)

                                       For the Quarters Ended
                                 Sept. 23, 2007    Sept. 24, 2006

   Net sales                           $170,536          $169,944
   Cost of sales                        159,543           159,383
   Selling, general &
    administrative expenses              14,454            11,289
   Provision for bad debts                  254             1,610
   Interest expense                       6,712             6,065
   Interest income                         (826)             (444)
   Other (income) expense, net           (1,006)             (479)
   Equity in (earnings) losses
    of unconsolidated affiliates           (178)            1,949
   Write down of long-lived assets          533             1,200
   Write down of investment in
    unconsolidated affiliate              4,505                 -
   Restructuring charges                  2,632                 -
   Loss from continuing operations
    before income taxes                 (16,087)          (10,629)
   Benefit from income taxes             (6,931)             (549)
   Loss from continuing
   operations                            (9,156)          (10,080)
   Loss from discontinued
   operations, net of tax                   (32)              (36)
         Net loss                       $(9,188)         $(10,116)

   Losses per common share
    (basic and diluted):
         Net loss -
          continuing operations          $(0.15)           $(0.19)
         Net loss -
          discontinued operations             -                 -
         Net loss -
          basic and diluted              $(0.15)           $(0.19)

   Weighted average basic and
    diluted shares outstanding           60,537            52,198