Unifi Inc’s net sales for the fourth quarter ended June 26 increased $18 million, or 10 percent, to $195 million from $177 million for the fourth quarter of 2010.  Net income for the June 2011 quarter rose to $13.5 million from $5.5 million, and earnings per share increased to 67 from 27 cents. 


Earnings for the quarter include $12 million of pre-tax earnings from the company’s unconsolidated investment in Parkdale America, LLC, a $6.5 million improvement from the prior year quarter.  Adjusted earnings before interest, taxes, depreciation and amortization (Adjusted EBITDA) for the June 2011 quarter were $14.1 million.   

For the 2011 fiscal year, net income rose to $25.1 million, or $1.25 per share, compared to $10.7 million, or $0.53 per share for the 2010 fiscal year.  Highlights for the 2011 fiscal year include: 



  • A $91 million, or 15 percent, increase in net sales to $708 million, as the company increased prices to cover higher raw material costs, improved market share in key segments, increased sales of its premier value added products and grew volume in its operations in Central America and China. 
  • A $45 million reduction in the 11.5% senior secured notes due 2014, as the company used excess operating cash and borrowing under its revolving credit facility to redeem a portion of the notes.
  • Adjusted EBITDA of $60 million for the fiscal year, representing a $5 million increase over the prior fiscal year.

 


“Despite the effects of a sluggish economy and significant increases in raw material prices throughout the year, our focus on continuous improvement across all areas of the organization helped drive increases in net income and EBITDA for the year,” said Bill Jasper, Chairman and CEO of Unifi.  “We are pleased with progress made in operational efficiency and the growth of our premier value added products and are encouraged by the positive response from our customers to the opening of our Repreve Recycling Center.  We are also pleased by the performance of Parkdale America and its effective management of the business despite highly volatile cotton prices during the year.”


Cash-on-hand increased from $19.1 million at March 27, 2011 to $27.5 million at June 26, 2011.  This $8.4 million increase is primarily a result of cash flow from operations and working capital improvements, as inventory turns improved and raw material costs started to decrease.  As of June 26, 2011, $133.7 million of the 11.5% senior secured notes remain outstanding and borrowings under the company’s revolving credit facility were $34.6 million. 


“We continue to focus on maintaining the strength of our balance sheet by focusing on cash flow from operations and working capital management programs,” said Ron Smith, CFO of Unifi. “This persistent focus on cash generation allowed us to redeem $45 million of our 11.5% senior secured notes during fiscal year 2011 and plan an additional redemption of $10 million, which we expect to be completed in the first quarter of fiscal 2012.”


“Looking forward, we see inflationary pressures across all our businesses and increased import competition in Brazil, as a result of the strength of the Brazilian Real,” said Jasper.  “Nevertheless, we are well-positioned to respond to these issues.  Volumes for the June 2011 quarter continued to improve, and we are realizing the benefits of our efficiency improvement and capital expenditure programs.  We expect continued growth of our premier value added product portfolio, driven by our Repreve brand and demand in China.  With projected double-digit growth in apparel unit supply from the CAFTA region, we expect growth from Unifi Central America as brands and retailers take advantage of the time, cost and quality benefits offered by the North and Central American supply chains.”


The financial statements included in this press release have been retroactively adjusted to reflect the Company’s one-for-three stock split, which became effective November 3, 2010. 



































































































































































































































































































UNIFI, INC.


CONSOLIDATED STATEMENTS OF OPERATIONS


(Unaudited) (Amounts in Thousands, Except Per Share Data)




For the Quarters Ended



For the Years Ended




June 26, 2011



June 27, 2010



June 26, 2011



June 27, 2010











Summary of Operations:










 Net sales



$       194,852



$       176,960



$       707,838



$       616,753


 Cost of sales



177,283



158,712



634,878



545,253


 Restructuring (recoveries) charges  



(71)



485



1,484



739


 Impairment of long-lived assets









100


 Selling, general & administrative expenses



10,744



11,615



42,967



46,183


(Benefit) provision for bad debts



(390)



216



(304)



123


 Other operating (income) expense , net



(296)



(491)



121



(1,033)











Non-operating (income) expense:










 Interest income



(516)



(770)



(2,511)



(3,125)


 Interest expense



3,843



5,477



19,190



21,889


 Other non-operating expense



78





606




 Loss (gain) on extinguishment of debt







3,337



(54)


 Equity in earnings of unconsolidated affiliates



(12,465)



(5,846)



(24,352)



(11,693)


 Income from operations before income taxes



16,642



7,562



32,422



18,371


 Provision for income taxes



3,128



2,090



7,333



7,686


               Net income



$         13,514



$           5,472



$         25,089



$         10,685











Earnings per share:










              Income per common share – basic



$             0.67



$             0.27



$             1.25



$             0.53











              Income per common share – diluted



$             0.66