Unifi Reports Steady Repreve Demand in Fiscal Q1

Unifi Inc. reported moderate sales growth for the first quarter ended Sept. 28 and said it will continue to increase texturing capacity in the U.S. and Central America to better serve the growing demand for synthetic yarns in the CAFTA region. 

Net sales increased $5.5 million, or 3.3 percent, to $174.2 million for the September 2014 quarter compared to net sales of $168.7 million for the prior year quarter.  The year-over-year improvement in net sales is attributable to improved volume in the company’s Nylon and International Segments, along with mix enrichment improvements in the company’s Polyester Segment. 

Net income for the September 2014 quarter was $7.1 million, or $0.39 per basic share, compared to net income of $8.9 million, or $0.46 per basic share, for the prior year quarter.  Improved operating results for the company’s Central American operations were offset primarily by a $2.5 million decrease in earnings from the company’s equity affiliate, Parkdale America, LLC.     

Other highlights for the September 2014 quarter included:

• Gross margin increasing by 20 basis points despite larger than anticipated manufacturing variances related to the company’s July 4th shutdown;
• Adjusted EBITDA of $14.2 million for the September 2014 quarter, a slight decline from $14.5 million for the prior year quarter;
• Repurchase of 148,500 shares of common stock under a previously announced stock repurchase program;
• Completion of a new long-term yarn supply agreement with Hanesbrands, Inc., which will be in effect through June 30, 2018; and
• The Fifth Amendment to the company’s  credit agreement, which increased borrowing capacity by $22 million.

“We are very pleased with the growth for our textured polyester business within the CAFTA region and the continued strength of our Repreve recycled fiber,” said Roger Berrier, President and Chief Operating Officer of Unifi. “We will continue to drive awareness and demand for Repreve through high visibility partnerships and consumer activations, which include programs with the Detroit Lions of the NFL, the University of North Carolina at Chapel Hill, and Marvel Universe Live!.  Our marketing programs have attracted the attention of many brands and retailers, and have led to the development and adoption of new programs featuring Repreve and our other value-added products.”

Cash and cash equivalents of $15.8 million as of September 28, 2014 remained relatively unchanged compared to $15.9 million as of June 29, 2014.  Net debt at the end of the September 2014 quarter was $95.8 million, compared to $83.6 million at June 29, 2014.  The company had $72.5 million available under its revolver as of September 28, 2014, compared to $61.1 million as of June 29, 2014.   

“Based on the success of our domestic business and the expansion of our business within the CAFTA region, the company anticipates utilizing our cash from operations and additional borrowing capacity to fund growth related initiatives in fiscal year 2015,: said Unifi Chairman and CEO Bill Jasper.  “We are planning to increase texturing capacity in the U.S. and Central America to better serve the growing demand for synthetic yarns in the CAFTA region and to support our mix enrichment strategies.  Because of the continued success and expected growth of Repreve , we will also continue exploring backward integration opportunities into bottle washing.”

Unifi, Inc. is a multi-national manufacturing company based in Greensboro, NC that produces and sells textured and other processed yarns designed to meet customer specifications, and premier value-added (“PVA”) yarns with enhanced performance characteristics.