Unifi Inc. released preliminary operating results showing its net sales for the second quarter ended Dec. 25, 2011 increased $5 million, or 3 percent, to $167 million compared to the December 2010 quarter and were up slightly at $338 million for the six months ended Dec. 25, 2011 compared to the six months ended Dec. 26, 2010.
The company aid higher sales prices related to mix enrichment and raw material inflation offset unit volume softness caused by inventory destocking across the apparel supply chain. Still, the company reported a net loss for the quarter of $7.6 million, or 38 cents per share, compared to net income of $5.4 million, or 27 cents per share for the December 2010 quarter. The net loss for the first half of fiscal 2012 was $7.3 million, or 36 cents per share, compared to net income of $15.6 million, or 78 cents per share, for the prior year period.
“While I am disappointed we are reporting our first quarterly loss in over two years, I am pleased with our ability to generate cash despite historically high raw material prices and weak demand,” said Bill Jasper, chairman and CEO of Unifi. “Although we believe there is still some excess inventory within the supply chain, we expect the effects of the destocking to be significantly less in the company's third fiscal quarter and are encouraged by the volume improvements we have seen since returning from our holiday shutdown period. We are also encouraged by the easing of polyester raw material prices from record highs at the beginning of the December 2011 quarter. With stronger volumes and improved conversion margins from raw material price reductions, we expect to see continued improvement as we move through the second half of the 2012 fiscal year.”
Adjusted earnings before interest, taxes, depreciation and amortization (adjusted EBITDA) were $7.3 million for the December 2011 quarter and $15.5 million for the first half of fiscal 2012, compared to $15.7 million and $34.1 million for the respective periods of fiscal 2011. Cash-on-hand as of Dec. 25, 2011 was $24.7 million and borrowings available under the Company's revolving credit facility were $44.3 million. Long-term debt at December 25, 2011 consisted of $123.7 million of 11.5% Senior Secured Notes due in May 2014 and $35.0 million of borrowings under the revolving credit facility.
“The company continued to pursue our deleveraging strategy and maintained our focus on liquidity,” said Ron Smith, CFO of Unifi. “As a result of operating activities and progress in our working capital management programs, cash-on-hand improved by $5 million during the December 2011 quarter, and we expect a continuation of these efforts in the second half of the 2012 fiscal year, which will allow us to further utilize excess operating cash and borrowings under our revolving credit facility to redeem additional 2014 Notes.”
Jasper added, “We are beginning to see signs of improvement in the Brazilian textile market, which should improve our future results there. We are also encouraged by customer response to our expansion of texturing capacity in Central America. This quarter, Repreve continued to gain market acceptance with new high-profile programs such as the recent announcement that Ford will be the first automaker to use the brand in seat fabric for their all-new Focus Electric vehicle. As these and other positive trends continue to develop, we remain confident we are on the right path and will stay focused on executing our strategies.”
“While I am disappointed we are reporting our first quarterly loss in over two years, I am pleased with our ability to generate cash despite historically high raw material prices and weak demand,” said Bill Jasper, chairman and CEO of Unifi. “Although we believe there is still some excess inventory within the supply chain, we expect the effects of the destocking to be significantly less in the company's third fiscal quarter and are encouraged by the volume improvements we have seen since returning from our holiday shutdown period. We are also encouraged by the easing of polyester raw material prices from record highs at the beginning of the December 2011 quarter. With stronger volumes and improved conversion margins from raw material price reductions, we expect to see continued improvement as we move through the second half of the 2012 fiscal year.”
Adjusted earnings before interest, taxes, depreciation and amortization (adjusted EBITDA) were $7.3 million for the December 2011 quarter and $15.5 million for the first half of fiscal 2012, compared to $15.7 million and $34.1 million for the respective periods of fiscal 2011. Cash-on-hand as of Dec. 25, 2011 was $24.7 million and borrowings available under the Company's revolving credit facility were $44.3 million. Long-term debt at December 25, 2011 consisted of $123.7 million of 11.5% Senior Secured Notes due in May 2014 and $35.0 million of borrowings under the revolving credit facility.
“The company continued to pursue our deleveraging strategy and maintained our focus on liquidity,” said Ron Smith, CFO of Unifi. “As a result of operating activities and progress in our working capital management programs, cash-on-hand improved by $5 million during the December 2011 quarter, and we expect a continuation of these efforts in the second half of the 2012 fiscal year, which will allow us to further utilize excess operating cash and borrowings under our revolving credit facility to redeem additional 2014 Notes.”
Jasper added, “We are beginning to see signs of improvement in the Brazilian textile market, which should improve our future results there. We are also encouraged by customer response to our expansion of texturing capacity in Central America. This quarter, Repreve continued to gain market acceptance with new high-profile programs such as the recent announcement that Ford will be the first automaker to use the brand in seat fabric for their all-new Focus Electric vehicle. As these and other positive trends continue to develop, we remain confident we are on the right path and will stay focused on executing our strategies.”
