Unifi released operating results for its second quarter of fiscal year 2004. The Company reported a net loss of $9.2 million or 18 cents per share for the quarter ending December 28, 2003, which compares to a net loss of
$2.2 million or 4 cents per share for the prior year December quarter. The
Company also reported a net loss of $13.8 million or 26 cents per share for
the first half of fiscal 2004 versus net income of $2.2 million or 4 cents per
share for the first six months of fiscal 2003.
Net sales for the December quarter of $183.7 million reflect a decrease of
9.0 percent compared to net sales of $201.9 million for the prior year
December quarter. Fiscal 2004 year-to-date net sales of $363.9 million
reflect a 14.1 percent decrease from net sales of $423.4 million reported for
the first six months of fiscal 2003. Net sales decline for the current
quarter and year-to-date have been negatively impacted by changes in product
mix, the continued increases in imported fabric and apparel, and the ongoing
softness in the domestic textile and apparel industries, resulting in an
inordinate curtailment of production in the month of December.
Net income for the current quarter was negatively impacted by a reduction
in earnings from the Company's unconsolidated equity affiliates, which face
the same challenging business and economic conditions as the Company. The
Company reported a pre-tax loss of $0.1 million for the current December
quarter from its share of income from its equity affiliates compared to pre-
tax income of $2.6 million for the prior year December quarter.
Also included in the December 2003 quarterly results is a pre-tax benefit,
included in cost of sales, of $7.0 million generated by the Company's
manufacturing alliance with DuPont, which is slightly below the $7.8 million
benefit realized in the prior year December quarter.
Continuing its ongoing strategic focus on strengthening its balance sheet,
the Company ended the December quarter without any funded bank debt and
reduced inventories to $115.1 million, a 7.6 percent reduction from
inventories of $124.5 million as of the end of September 2003. The Company
ended the December quarter with cash-on-hand of $59.3 million.
Brian Parke, chief executive officer for Unifi, said, “The first two
quarters of this fiscal year have continued to demonstrate that imports of
apparel and home goods at lower price points are continuing to drive
production offshore at a steady pace. Our performance in this current quarter
reflects this, as well as similar pressures on our equity affiliates.”
“Despite the fact that we have reduced our employment base from
approximately 5,500 to approximately 4,100 since December 2002, it is obvious
that with the continued pressure on pricing, we will be taking further action
to reduce our operating costs. In addition, we remain committed to our
downstream marketing efforts to counterbalance this trend and to completing
our acquisition in China.”
UNIFI, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(In Thousands Except Per Share Data)
For the Quarters For The Year to Date
Ended Periods Ended
Dec. 28, Dec. 29, Dec. 28, Dec. 29,
2003 2002 2003 2002
Net sales $183,667 $201,859 $363,871 $423,389
Cost of goods sold 180,003 186,910 349,621 385,323
Selling, general &
administrative expense 12,790 13,130 26,159 25,476
Interest expense 4,789 5,446 9,531 10,545
Interest income (568) (253) (1,396) (746)
Other (income) expense, net 1,092 649 1,885 (70)
Equity in (earnings) losses
of unconsolidated affiliates 146 (2,605) (111) (6,157)
Minority interest (income)
expense (1,121) 758 (2,077) 3,571
Arbitration costs and expenses - 1,625 - 2,834
Income (loss) before income
taxes (13,464) (3,801) (19,741) 2,613
Provision (benefit) for
income taxes (4,243) (1,631) (5,959) 456
Net income (loss) $(9,221) $(2,170) $(13,782) $2,157
Earnings (losses) per common
share - diluted:
Net income (loss) per
common share $(0.18) $(0.04) $(0.26) $0.04
Average diluted shares
outstanding 52,098 53,782 52,422 53,830
UNIFI, INC.
CONSOLIDATED BALANCE SHEETS
(Unaudited) (In Thousands)
December 28, September, 28 June 29,
2003 2003 2003
Assets
Cash and cash equivalents $59,311 $72,263 $76,801
Receivables 110,675 120,323 130,775
Inventories 115,110 124,520 118,436
Other current assets 7,723 7,963 8,235
Total current assets 292,819 325,069 334,247
Property, plant and
equipment 419,343 430,572 444,813
Investments in
unconsolidated affiliates 174,542 174,479 173,731
Other noncurrent assets 35,406 35,146 35,345
$922,110 $965,266 $988,136
Liabilities and
Shareholders' Equity
Accounts payable $54,565 $90,239 $80,972
Accrued expenses 46,529 45,404 60,288
Income taxes payable 1,293 1,647 1,729
Current maturities of
long-term debt and other
current liabilities 6,986 7,021 7,285
Total current
liabilities 109,373 144,311 150,274
Long-term debt and other
liabilities 258,730 258,766 259,395
Deferred income taxes 81,167 85,683 87,814
Minority interests 9,475 9,847 10,905
Shareholders' equity 463,365 466,659 479,748
$922,110 $965,266 $988,136
