Unifi Announces Robust Fourth Quarter and Fiscal 2021 Results
Continued business recovery drives fourth consecutive sequential increase in quarterly net sales, and provides momentum for fiscal 2022
Fourth Quarter Fiscal 2021 Overview
-
Net sales were
$184.4 million , representing an increase of 114% from the fourth quarter of fiscal 2020 and an increase of 3% from the third quarter of fiscal 2021. - Revenues from REPREVE® Fiber products represented 38% of consolidated net sales, compared to 28% for the fourth quarter of fiscal 2020.
-
Gross profit was
$27.4 million , while gross margin was 14.9%, as focused execution helped offset pressure from higher input costs. -
Net income of
$13.4 million , or$0.70 of diluted earnings per share (“EPS”), compared to a net loss of$20.2 million , or$1.10 loss per share for the fourth quarter of fiscal 2020. Adjusted EPS1 was$0.37 , and excludes the benefit of a recovery of non-income taxes inBrazil , compared to$1.05 loss per share, on an adjusted basis, for the fourth quarter of fiscal 2020. -
Adjusted EBITDA1 was
$20.4 million , compared to negative$14.0 million in the fourth quarter of fiscal 2020. -
Operating cash flows were
$11.0 million , a decrease of$9.6 million from the fourth quarter of fiscal 2020, primarily due to the impact of working capital changes associated with increasing raw material costs and comparable business activity levels. -
On
June 27, 2021 , debt principal was$86.9 million and cash and cash equivalents were$78.3 million , resulting in Net Debt1 of$8.6 million , a decrease from$23.6 million onJune 28, 2020 .
1 Adjusted EPS, Adjusted EBITDA, and Net Debt are non-GAAP financial measures. The schedules included in this press release reconcile each non-GAAP financial measure to its most directly comparable GAAP financial measure.
Fourth Quarter Fiscal 2021 Compared to Fourth Quarter Fiscal 2020
Net sales in the fourth quarter of fiscal 2021 were
Gross profit increased to
Operating income for the fourth quarter of fiscal 2021 was
Net income was
Fiscal 2021 Compared to Fiscal 2020
Net sales were
Debt principal was
Outlook
Looking forward, the Company expects demand levels and trends across the business to remain healthy during fiscal 2022. The Company’s outlook for the
-
Sales volumes to increase, with net sales improving sequentially from the
June 2021 quarter by approximately 3% to 5%; -
Adjusted EBITDA to range from approximately
$14.0 million to$16.0 million , reflecting continued underlying momentum, partially offset by current inflationary pressures, especially for recycled raw material inputs; - An effective tax rate between 35% and 40%; and
-
Capital expenditures of approximately
$10.0 million to$11.0 million .
For fiscal 2022, a 53-week fiscal year ending on
- Sales volume and REPREVE® Fiber sales growth driving a net sales increase of 10% or more from the level achieved in fiscal 2021;
- Adjusted EBITDA to be broadly consistent with the fiscal 2021 level;
- An effective tax rate between 35% and 40%; and
-
Capital expenditures of approximately
$40.0 million to$45.0 million , as the Company continues its plan to invest in new yarn texturing machinery within itsAmericas facilities. Such capital expenditure levels will be funded by cash on-hand and available financing arrangements and are inclusive of approximately$10.0 million to$12.0 million of routine annual maintenance.
Ingle concluded, “Following the pandemic, many customers began accelerating their commitment to recycled content products. In fact, we have seen REPREVE® hang tags with our co-branding partners increase 60% year-over-year. With consumer demand for sustainable product offerings more popular now than ever before, we continue to believe our innovative and sustainable solutions will be the growth engines that will allow us to meet the evolving needs of our customers. As we celebrate Unifi’s 50-year anniversary, I am proud of what our team has accomplished and how we have positioned our businesses. We remain confident in the growth potential of REPREVE® and our innovative portfolio and expect to reach an even more diverse array of end markets, as we continue to pursue long-term value for our shareholders.”
Fourth Quarter Fiscal 2021 Earnings Conference Call
The Company will provide additional commentary regarding its fourth quarter and fiscal 2021 results and other developments during its earnings conference call on
About
Financial Statements, Business Segment Information and Reconciliations of Reported Results to Adjusted Results to Follow
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) (In thousands, except per share amounts) |
||||||||||||||||
|
|
|
|
|
||||||||||||
|
|
For the Three Months Ended |
|
For the Fiscal Year Ended |
||||||||||||
|
|
|
|
|
|
|
|
|
||||||||
Net sales |
|
$ |
184,445 |
|
|
$ |
86,055 |
|
|
$ |
667,592 |
|
|
$ |
606,509 |
|
Cost of sales |
|
|
157,041 |
|
|
|
95,506 |
|
|
|
574,098 |
|
|
|
567,469 |
|
Gross profit (loss) |
|
|
27,404 |
|
|
|
(9,451 |
) |
|
|
93,494 |
|
|
|
39,040 |
|
Selling, general and administrative expenses |
|
|
12,764 |
|
|
|
8,606 |
|
|
|
51,334 |
|
|
|
43,814 |
|
Provision (benefit) for bad debts |
|
|
14 |
|
|
|
1,408 |
|
|
|
(1,316 |
) |
|
|
1,739 |
|
Other operating expense, net |
|
|
629 |
|
|
|
1,408 |
|
|
|
4,865 |
|
|
|
2,308 |
|
Operating income (loss) |
|
|
13,997 |
|
|
|
(20,873 |
) |
|
|
38,611 |
|
|
|
(8,821 |
) |
Interest income |
|
|
(132 |
) |
|
|
(127 |
) |
|
|
(603 |
) |
|
|
(722 |
) |
Interest expense |
|
|
734 |
|
|
|
1,190 |
|
|
|
3,323 |
|
|
|
4,779 |
|
Equity in loss (earnings) of unconsolidated affiliates |
|
|
12 |
|
|
|
2,381 |
|
|
|
(739 |
) |
|
|
477 |
|
Recovery of non-income taxes |
|
|
(9,717 |
) |
|
|
— |
|
|
|
(9,717 |
) |
|
|
— |
|
Gain on sale of investment in unconsolidated affiliate |
|
|
— |
|
|
|
(2,284 |
) |
|
|
— |
|
|
|
(2,284 |
) |
Impairment of investment in unconsolidated affiliate |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
45,194 |
|
Income (loss) before income taxes |
|
|
23,100 |
|
|
|
(22,033 |
) |
|
|
46,347 |
|
|
|
(56,265 |
) |
Provision (benefit) for income taxes |
|
|
9,681 |
|
|
|
(1,786 |
) |
|
|
17,274 |
|
|
|
972 |
|
Net income (loss) |
|
$ |
13,419 |
|
|
$ |
(20,247 |
) |
|
$ |
29,073 |
|
|
$ |
(57,237 |
) |
|
|
|
|
|
|
|
|
|
||||||||
Net income (loss) per common share: |
|
|
|
|
|
|
|
|
||||||||
Basic |
|
$ |
0.73 |
|
|
$ |
(1.10 |
) |
|
$ |
1.57 |
|
|
$ |
(3.10 |
) |
Diluted |
|
$ |
0.70 |
|
|
$ |
(1.10 |
) |
|
$ |
1.54 |
|
|
$ |
(3.10 |
) |
|
|
|
|
|
|
|
|
|
||||||||
Weighted average common shares outstanding: |
|
|
|
|
|
|
|
|
||||||||
Basic |
|
|
18,490 |
|
|
|
18,446 |
|
|
|
18,472 |
|
|
|
18,475 |
|
Diluted |
|
|
19,055 |
|
|
|
18,446 |
|
|
|
18,856 |
|
|
|
18,475 |
|
CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) (In thousands) |
||||||||
|
|
|
|
|
||||
|
|
|
|
|
||||
ASSETS |
|
|
|
|
||||
Cash and cash equivalents |
|
$ |
78,253 |
|
|
$ |
75,267 |
|
Receivables, net |
|
|
94,837 |
|
|
|
53,726 |
|
Inventories |
|
|
141,221 |
|
|
|
109,704 |
|
Income taxes receivable |
|
|
2,392 |
|
|
|
4,033 |
|
Other current assets |
|
|
12,364 |
|
|
|
11,763 |
|
Total current assets |
|
|
329,067 |
|
|
|
254,493 |
|
Property, plant and equipment, net |
|
|
201,696 |
|
|
|
204,246 |
|
Operating lease assets |
|
|
8,772 |
|
|
|
8,940 |
|
Deferred income taxes |
|
|
1,208 |
|
|
|
2,352 |
|
Other non-current assets |
|
|
14,625 |
|
|
|
4,131 |
|
Total assets |
|
$ |
555,368 |
|
|
$ |
474,162 |
|
|
|
|
|
|
||||
LIABILITIES AND SHAREHOLDERS’ EQUITY |
|
|
|
|
||||
Accounts payable |
|
$ |
54,259 |
|
|
$ |
25,610 |
|
Income taxes payable |
|
|
1,625 |
|
|
|
349 |
|
Current operating lease liabilities |
|
|
1,856 |
|
|
|
1,783 |
|
Current portion of long-term debt |
|
|
16,045 |
|
|
|
13,563 |
|
Other current liabilities |
|
|
31,638 |
|
|
|
13,689 |
|
Total current liabilities |
|
|
105,423 |
|
|
|
54,994 |
|
Long-term debt |
|
|
70,336 |
|
|
|
84,607 |
|
Non-current operating lease liabilities |
|
|
7,032 |
|
|
|
7,251 |
|
Deferred income taxes |
|
|
6,686 |
|
|
|
2,549 |
|
Other long-term liabilities |
|
|
7,472 |
|
|
|
8,606 |
|
Total liabilities |
|
|
196,949 |
|
|
|
158,007 |
|
|
|
|
|
|
||||
Commitments and contingencies |
|
|
|
|
||||
|
|
|
|
|
||||
Common stock |
|
|
1,849 |
|
|
|
1,845 |
|
Capital in excess of par value |
|
|
65,205 |
|
|
|
62,392 |
|
Retained earnings |
|
|
344,797 |
|
|
|
315,724 |
|
Accumulated other comprehensive loss |
|
|
(53,432 |
) |
|
|
(63,806 |
) |
Total shareholders’ equity |
|
|
358,419 |
|
|
|
316,155 |
|
Total liabilities and shareholders’ equity |
|
$ |
555,368 |
|
|
$ |
474,162 |
|
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) (In thousands) |
||||||||
|
|
|
||||||
|
|
For the Fiscal Year Ended |
||||||
|
|
|
|
|
||||
Cash and cash equivalents at beginning of year |
|
$ |
75,267 |
|
|
$ |
22,228 |
|
Operating activities: |
|
|
|
|
||||
Net income (loss) |
|
|
29,073 |
|
|
|
(57,237 |
) |
Adjustments to reconcile net income (loss) to net cash provided by operating activities: |
|
|
|
|
||||
Equity in (earnings) loss of unconsolidated affiliates |
|
|
(739 |
) |
|
|
477 |
|
Distributions received from unconsolidated affiliates |
|
|
750 |
|
|
|
10,437 |
|
Depreciation and amortization expense |
|
|
25,528 |
|
|
|
23,653 |
|
Non-cash compensation expense |
|
|
3,462 |
|
|
|
3,999 |
|
Deferred income taxes |
|
|
5,087 |
|
|
|
(4,011 |
) |
Loss on disposal of assets |
|
|
2,809 |
|
|
|
160 |
|
Recovery of non-income taxes |
|
|
(9,717 |
) |
|
|
— |
|
Impairment of investment in unconsolidated affiliate |
|
|
— |
|
|
|
45,194 |
|
Gain on sale of investment in unconsolidated affiliate |
|
|
— |
|
|
|
(2,284 |
) |
Other, net |
|
|
(495 |
) |
|
|
(444 |
) |
Changes in assets and liabilities |
|
|
(19,077 |
) |
|
|
32,780 |
|
Net cash provided by operating activities |
|
|
36,681 |
|
|
|
52,724 |
|
|
|
|
|
|
||||
Investing activities: |
|
|
|
|
||||
Capital expenditures |
|
|
(21,178 |
) |
|
|
(18,509 |
) |
Proceeds from sale of investment in unconsolidated affiliate |
|
|
— |
|
|
|
60,000 |
|
Purchases of intangible assets |
|
|
(3,605 |
) |
|
|
— |
|
Other, net |
|
|
162 |
|
|
|
83 |
|
Net cash (used by) provided by investing activities |
|
|
(24,621 |
) |
|
|
41,574 |
|
|
|
|
|
|
||||
Financing activities: |
|
|
|
|
||||
Proceeds from long-term debt |
|
|
— |
|
|
|
122,200 |
|
Payments on long-term debt |
|
|
(13,646 |
) |
|
|
(157,635 |
) |
Proceeds from construction financing |
|
|
882 |
|
|
|
— |
|
Common stock repurchased |
|
|
— |
|
|
|
(1,994 |
) |
Other, net |
|
|
(111 |
) |
|
|
(493 |
) |
Net cash used by financing activities |
|
|
(12,875 |
) |
|
|
(37,922 |
) |
|
|
|
|
|
||||
Effect of exchange rate changes on cash and cash equivalents |
|
|
3,801 |
|
|
|
(3,337 |
) |
Net increase in cash and cash equivalents |
|
|
2,986 |
|
|
|
53,039 |
|
Cash and cash equivalents at end of year |
|
$ |
78,253 |
|
|
$ |
75,267 |
|
BUSINESS SEGMENT INFORMATION (Unaudited) (In thousands) |
||||||
|
|
|
||||
Net sales details for each reportable segment of the Company are as follows: |
||||||
|
|
|
||||
|
|
For the Three Months Ended |
||||
|
|
|
|
|
||
Polyester |
|
$ |
87,795 |
|
$ |
47,972 |
|
|
|
53,939 |
|
|
20,536 |
|
|
|
23,413 |
|
|
7,245 |
Nylon |
|
|
18,054 |
|
|
9,528 |
All Other |
|
|
1,244 |
|
|
774 |
Consolidated net sales |
|
$ |
184,445 |
|
$ |
86,055 |
|
|
|
|
|
||
|
|
For the Fiscal Year Ended |
||||
|
|
|
|
|
||
Polyester |
|
$ |
316,235 |
|
$ |
309,184 |
|
|
|
184,837 |
|
|
153,032 |
|
|
|
95,976 |
|
|
73,339 |
Nylon |
|
|
65,869 |
|
|
67,381 |
All Other |
|
|
4,675 |
|
|
3,573 |
Consolidated net sales |
|
$ |
667,592 |
|
$ |
606,509 |
Gross profit (loss) details for each reportable segment of the Company are as follows: |
|||||||
|
|
|
|||||
|
|
For the Three Months Ended |
|||||
|
|
|
|
|
|||
Polyester |
|
$ |
10,695 |
|
$ |
(9,399 |
) |
|
|
|
7,134 |
|
|
2,301 |
|
|
|
|
8,507 |
|
|
190 |
|
Nylon |
|
|
870 |
|
|
(2,535 |
) |
All Other |
|
|
198 |
|
|
(8 |
) |
Consolidated gross profit (loss) |
|
$ |
27,404 |
|
$ |
(9,451 |
) |
|
|
|
|
|
|||
|
|
For the Fiscal Year Ended |
|||||
|
|
|
|
|
|||
Polyester |
|
$ |
33,444 |
|
$ |
12,088 |
|
|
|
|
25,393 |
|
|
16,683 |
|
|
|
|
31,695 |
|
|
11,195 |
|
Nylon |
|
|
2,367 |
|
|
(978 |
) |
All Other |
|
|
595 |
|
|
52 |
|
Consolidated gross profit (loss) |
|
$ |
93,494 |
|
$ |
39,040 |
|
RECONCILIATIONS OF REPORTED RESULTS TO ADJUSTED RESULTS (Unaudited) (In thousands) |
||||||||||||||||
|
|
|
|
|
||||||||||||
EBITDA and Adjusted EBITDA |
||||||||||||||||
|
||||||||||||||||
The reconciliations of the amounts reported under |
||||||||||||||||
|
|
|
|
|
||||||||||||
|
|
For the Three Months Ended |
|
For the Fiscal Year Ended |
||||||||||||
|
|
|
|
|
|
|
|
|
||||||||
Net income (loss) |
|
$ |
13,419 |
|
|
$ |
(20,247 |
) |
|
$ |
29,073 |
|
|
$ |
(57,237 |
) |
Interest expense, net |
|
|
602 |
|
|
|
1,063 |
|
|
|
2,720 |
|
|
|
4,057 |
|
Provision (benefit) for income taxes |
|
|
9,681 |
|
|
|
(1,786 |
) |
|
|
17,274 |
|
|
|
972 |
|
Depreciation and amortization expense (1) |
|
|
6,464 |
|
|
|
5,907 |
|
|
|
25,293 |
|
|
|
23,406 |
|
EBITDA |
|
|
30,166 |
|
|
|
(15,063 |
) |
|
|
74,360 |
|
|
|
(28,802 |
) |
|
|
|
|
|
|
|
|
|
||||||||
Equity in loss of PAL |
|
|
— |
|
|
|
2,284 |
|
|
|
— |
|
|
|
960 |
|
EBITDA excluding PAL |
|
|
30,166 |
|
|
|
(12,779 |
) |
|
|
74,360 |
|
|
|
(27,842 |
) |
|
|
|
|
|
|
|
|
|
||||||||
Recovery of non-income taxes (2) |
|
|
(9,717 |
) |
|
|
— |
|
|
|
(9,717 |
) |
|
|
— |
|
Gain on sale of investment in unconsolidated affiliate (3) |
|
|
— |
|
|
|
(2,284 |
) |
|
|
— |
|
|
|
(2,284 |
) |
Severance (4) |
|
|
— |
|
|
|
1,102 |
|
|
|
— |
|
|
|
1,485 |
|
Impairment of investment in unconsolidated affiliate (3) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
45,194 |
|
Adjusted EBITDA |
|
$ |
20,449 |
|
|
$ |
(13,961 |
) |
|
$ |
64,643 |
|
|
$ |
16,553 |
|
(1) |
Within this reconciliation, depreciation and amortization expense excludes the amortization of debt issuance costs, which are reflected in interest expense, net. Within the condensed consolidated statements of cash flows, amortization of debt issuance costs is reflected in depreciation and amortization expense. |
|
|
||
(2) |
For the fiscal year ended |
|
|
||
(3) |
For the fiscal year ended |
|
|
||
(4) |
For the fiscal year ended |
RECONCILIATIONS OF REPORTED RESULTS TO ADJUSTED RESULTS (CONTINUED) (Unaudited) (In thousands, except per share amounts) |
||||||||||||||||||||||||||||||||
|
|
|
|
|
||||||||||||||||||||||||||||
Adjusted Net Income (Loss) and Adjusted EPS |
||||||||||||||||||||||||||||||||
|
|
|
|
|
||||||||||||||||||||||||||||
The tables below set forth reconciliations of (i) income (loss) before income taxes (“Pre-tax Income (Loss)”), provision (benefit) for income taxes (“Tax Impact”), and net income (loss) (“Net Income (Loss)”) to Adjusted Net Income (Loss) and (ii) Diluted Earnings Per Share (“Diluted EPS”) to Adjusted EPS. Rounding may impact certain of the below calculations. |
||||||||||||||||||||||||||||||||
|
|
|
|
|
||||||||||||||||||||||||||||
|
|
For the Three Months Ended |
|
For the Three Months Ended |
||||||||||||||||||||||||||||
|
|
Pre-tax Income |
|
Tax Impact |
|
Net Income |
|
Diluted EPS |
|
Pre-tax Loss |
|
Tax Impact |
|
Net Loss |
|
Diluted EPS |
||||||||||||||||
GAAP results |
|
$ |
23,100 |
|
|
$ |
(9,681 |
) |
|
$ |
13,419 |
|
|
$ |
0.70 |
|
|
$ |
(22,033 |
) |
|
$ |
1,786 |
|
|
$ |
(20,247 |
) |
|
$ |
(1.10 |
) |
Recovery of non-income taxes (1) |
|
|
(9,717 |
) |
|
|
3,304 |
|
|
|
(6,413 |
) |
|
|
(0.33 |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Severance (2) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
1,102 |
|
|
|
(231 |
) |
|
|
871 |
|
|
|
0.05 |
|
Adjusted results |
|
$ |
13,383 |
|
|
$ |
(6,377 |
) |
|
$ |
7,006 |
|
|
$ |
0.37 |
|
|
$ |
(20,931 |
) |
|
$ |
1,555 |
|
|
$ |
(19,376 |
) |
|
$ |
(1.05 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Weighted average common shares outstanding |
|
|
19,055 |
|
|
|
|
|
|
|
|
|
18,446 |
|
||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
|
|
For the Fiscal Year Ended |
|
For the Fiscal Year Ended |
||||||||||||||||||||||||||||
|
|
Pre-tax Income |
|
Tax Impact |
|
Net Income |
|
Diluted EPS |
|
Pre-tax Loss |
|
Tax Impact |
|
Net Loss |
|
Diluted EPS |
||||||||||||||||
GAAP results |
|
$ |
46,347 |
|
|
$ |
(17,274 |
) |
|
$ |
29,073 |
|
|
$ |
1.54 |
|
|
$ |
(56,265 |
) |
|
$ |
(972 |
) |
|
$ |
(57,237 |
) |
|
$ |
(3.10 |
) |
Recovery of non-income taxes |
|
|
(9,717 |
) |
|
|
3,304 |
|
|
|
(6,413 |
) |
|
|
(0.34 |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Impairment of investment in unconsolidated affiliate (3) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
45,194 |
|
|
|
— |
|
|
|
45,194 |
|
|
|
2.45 |
|
Severance (1) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
1,485 |
|
|
|
(312 |
) |
|
|
1,173 |
|
|
|
0.06 |
|
Adjusted results |
|
$ |
36,630 |
|
|
$ |
(13,970 |
) |
|
$ |
22,660 |
|
|
$ |
1.20 |
|
|
$ |
(9,586 |
) |
|
$ |
(1,284 |
) |
|
$ |
(10,870 |
) |
|
$ |
(0.59 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
Weighted average common shares outstanding |
|
|
18,856 |
|
|
|
|
|
|
|
|
|
18,475 |
|
(1) |
For the fiscal year ended |
|
|
||
(2) |
For the fiscal year ended |
|
|
||
(3) |
For the fiscal year ended |
Net Debt |
||||||
|
|
|
|
|
||
Reconciliations of Net Debt are as follows: |
||||||
|
|
|
|
|
||
|
|
|
|
|
||
Long-term debt |
|
$ |
70,336 |
|
$ |
84,607 |
Current portion of long-term debt |
|
|
16,045 |
|
|
13,563 |
Unamortized debt issuance costs |
|
|
476 |
|
|
711 |
Debt principal |
|
|
86,857 |
|
|
98,881 |
Less: cash and cash equivalents |
|
|
78,253 |
|
|
75,267 |
Net Debt |
|
$ |
8,604 |
|
$ |
23,614 |
Cash and cash equivalents
At
REPREVE® Fiber
REPREVE® Fiber represents the Company's collection of fiber products on its recycled platform, with or without added technologies. Beginning in the fourth quarter of fiscal 2021, as a result of its annual review of products meeting the REPREVE® Fiber definition, the Company began including certain product sales in the Asia Segment that were previously excluded from the REPREVE® Fiber sales metric. Quarters 1, 2, and 3 of fiscal 2021 have been adjusted to reflect such sales, which resulted in a change of not more than 1% for any quarter.
Non-GAAP Financial Measures
Certain non-GAAP financial measures included herein are designed to complement the financial information presented in accordance with GAAP. These non-GAAP financial measures include Earnings Before Interest, Taxes, Depreciation and Amortization (“EBITDA”), Adjusted EBITDA, Adjusted Net (Loss) Income, Adjusted EPS and Net Debt (together, the “non-GAAP financial measures”).
- EBITDA represents Net income (loss) before net interest expense, income tax expense, and depreciation and amortization expense.
-
Adjusted EBITDA represents EBITDA adjusted to exclude equity in loss of PAL and, from time to time, certain other adjustments necessary to understand and compare the underlying results of
UNIFI . -
Adjusted Net Income (Loss) represents Net income (loss) calculated under GAAP adjusted to exclude certain amounts. Management believes the excluded amounts do not reflect the ongoing operations and performance of
UNIFI and/or exclusion may be necessary to understand and compare the underlying results ofUNIFI . - Adjusted EPS represents Adjusted Net Income (Loss) divided by UNIFI’s weighted average common shares outstanding.
- Net Debt represents debt principal less cash and cash equivalents.
The non-GAAP financial measures are not determined in accordance with GAAP and should not be considered a substitute for performance measures determined in accordance with GAAP. The calculations of the non-GAAP financial measures are subjective, based on management’s belief as to which items should be included or excluded in order to provide the most reasonable and comparable view of the underlying operating performance of the business. We may, from time to time, modify the amounts used to determine our non-GAAP financial measures.
We believe that these non-GAAP financial measures better reflect Unifi’s underlying operations and performance and that their use, as operating performance measures, provides investors and analysts with a measure of operating results unaffected by differences in capital structures, capital investment cycles, and ages of related assets, among otherwise comparable companies.
Management uses Adjusted EBITDA (i) as a measurement of operating performance because it assists us in comparing our operating performance on a consistent basis, as it removes the impact of (a) items directly related to our asset base (primarily depreciation and amortization) and (b) items that we would not expect to occur as a part of our normal business on a regular basis; (ii) for planning purposes, including the preparation of our annual operating budget; (iii) as a valuation measure for evaluating our operating performance and our capacity to incur and service debt, fund capital expenditures, and expand our business; and (iv) as one measure in determining the value of other acquisitions and dispositions. Adjusted EBITDA is a key performance metric utilized in the determination of variable compensation. We also believe Adjusted EBITDA is an appropriate supplemental measure of debt service capacity, because it serves as a high-level proxy for cash generated from operations. Equity in loss of PAL is excluded from Adjusted EBITDA because such results do not reflect our operating performance.
Management uses Adjusted Net Income (Loss) and Adjusted EPS (i) as measurements of net operating performance because they assist us in comparing such performance on a consistent basis, as they remove the impact of (a) items that we would not expect to occur as a part of our normal business on a regular basis and (b) components of the provision for income taxes that we would not expect to occur as a part of our underlying taxable operations; (ii) for planning purposes, including the preparation of our annual operating budget; and (iii) as measures in determining the value of other acquisitions and dispositions.
Management uses Net Debt as a liquidity and leverage metric to determine how much debt would remain if all cash and cash equivalents were used to pay down debt principal.
In evaluating non-GAAP financial measures, investors should be aware that, in the future, we may incur expenses similar to the adjustments included herein. Our presentation of non-GAAP financial measures should not be construed as indicating that our future results will be unaffected by unusual or non-recurring items. Each of our non-GAAP financial measures has limitations as an analytical tool, and investors should not consider it in isolation or as a substitute for analysis of our results or liquidity measures as reported under GAAP. Some of these limitations are (i) it is not adjusted for all non-cash income or expense items that are reflected in our statements of cash flows; (ii) it does not reflect the impact of earnings or charges resulting from matters we consider not indicative of our ongoing operations; (iii) it does not reflect changes in, or cash requirements for, our working capital needs; (iv) it does not reflect the cash requirements necessary to make payments on our debt; (v) it does not reflect our future requirements for capital expenditures or contractual commitments; (vi) it does not reflect limitations on or costs related to transferring earnings from our subsidiaries to us; and (vii) other companies in our industry may calculate this measure differently than we do, limiting its usefulness as a comparative measure.
Because of these limitations, these non-GAAP financial measures should not be considered as a measure of discretionary cash available to us to invest in the growth of our business or as a measure of cash that will be available to us to meet our obligations, including those under our outstanding debt obligations. Investors should compensate for these limitations by relying primarily on our GAAP results and using these measures only as supplemental information.
Cautionary Statement on Forward-Looking Statements
Certain statements included herein contain “forward-looking statements” within the meaning of federal securities laws about the financial condition and results of operations of
Factors that could contribute to such differences include, but are not limited to: the competitive nature of the textile industry and the impact of global competition; changes in the trade regulatory environment and governmental policies and legislation; the availability, sourcing and pricing of raw materials; general domestic and international economic and industry conditions in markets where
All such factors are difficult to predict, contain uncertainties that may materially affect actual results and may be beyond our control. New factors emerge from time to time, and it is not possible for management to predict all such factors or to assess the impact of each such factor on
View source version on businesswire.com: https://www.businesswire.com/news/home/20210804006059/en/
312-445-2870
UFI@alpha-ir.com
Source: