UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 8‑K

CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934

Date of Report (Date of earliest event reported):
January 19, 2006

UNIFI, INC.
(Exact name of registrant as specified in its charter)

New York (State of Incorporation)

1-10542 (Commission File Number)

11-2165495 (IRS Employer Identification No.)

7201 West Friendly Avenue
Greensboro, North Carolina 27410
(Address of principal executive offices)

(336) 294-4410
(Registrant's telephone number, including area code)

Not Applicable
(Former name or former address, if changed since last report)

- -------------------------------------------------------------

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

[ ]   Written communications pursuant to Rule 425 under the Securities Act  (17 CFR 230.425)

[ ]   Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

[ ]   Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

[ ]   Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

==========================================================

 

---

ITEM 2.02.  Results of Operations and Financial Condition.

On January 19, 2006, Unifi, Inc. (the "Company") issued a press release announcing the financial results for its second quarter of fiscal year 2006 ending December 25, 2005.  A copy of the press release is furnished as Exhibit 99.1 to this report and is incorporated by reference herein.

The information included herein, as well as Exhibit 99.1 referenced herein, shall not be deemed "filed" for purposes of Section 18 of the Securities Exchange Act of 1934, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933.

ITEM 9.01.  FINANCIAL STATEMENTS AND EXHIBITS.

(d)        Exhibits.

EXHIBIT NO.	DESCRIPTION OF EXHIBIT
99.1	News Release disseminated on January 19, 2006 by Unifi, Inc. announcing the financial results for its second quarter of fiscal year 2006 ending December 25, 2005.

 

 

---

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

                                                    UNIFI, INC.

                                                    By:       /s/ CHARLES F. MCCOY
                                                                Charles F. McCoy
                                                                Vice President, Secretary and General Counsel

Dated:  January 19, 2006

 

---

INDEX TO EXHIBITS

EXHIBIT NO.	DESCRIPTION OF EXHIBIT
99.1	News Release disseminated on January 19, 2006 by Unifi, Inc. announcing the financial results for its second quarter of fiscal year 2006 ending December 25, 2005.

EXHIBIT 99.1

For more information, contact:
William M. Lowe, Jr.
Vice President
Chief Operating Officer
Chief Financial Officer
(336) 316-5664

Unifi Announces Second Quarter Results

GREENSBORO, N.C. - January 19, 2006 - Unifi, Inc. (NYSE: UFI) today released operating results for its second quarter ending December 25, 2005.

Net income for the current quarter, including discontinued operations, was a net loss of $3.8 million or $0.07 per share compared to a net loss of $7.7 million or $0.15 per share for the prior December quarter.  Net income for the first half of the Company's fiscal year 2006, including discontinued operations, was a net loss of $6.9 million or $0.13 per share compared to a net loss of $30.3 million or $0.58 per share for the prior year first half. 

Net income from continuing operations for the current quarter was a net loss of $3.7 million or $0.07 per share compared to a net loss of $5.1 million or $0.10 per share for the prior December quarter.  Net income from continuing operations for the first half of fiscal year 2006 was a net loss of $9.4 million or $0.18 per share compared to a net loss of $6.2 million or $0.12 per share for the prior year first half. 

Net sales from continuing operations for the current December quarter of $192.3 million were down $16.1 million or 7.7 percent compared to net sales of $208.4 million for the prior year December quarter.   Net sales for the first half of fiscal year 2006 were $377.7 million, which is a decrease of $10.3 million or 2.7 percent compared to net sales of $388.0 million for the first half of fiscal year 2005. 

"While the damages caused by the hurricanes continued to affect raw materials and energy prices throughout the entire quarter, we were very pleased with our results for the quarter and the way that our operations handled the situation," said Bill Lowe, Chief Operating Officer and Chief Financial Officer for Unifi.  "The Company was able to

-continued-

 

---

 

Unifi Announces Second Quarter Results - page 2

meet its deliveries to customers in the quarter by successfully managing through the transportation and access issues associated with the supply of raw materials, and we offset the increases in raw materials and energy prices with a surcharge that was in effect throughout the December quarter.  In addition, through actions taken previously to reduce operating costs, we were able to increase our operating margins slightly on similar volume over the previous quarter ended September 2005."

Cash-on-hand at the end of the current December quarter was $85.0 million, down $5.7 million from the $90.7 million cash-on-hand at the end of the September quarter.  The Company funded the remaining $15.0 million investment in Yihua Unifi, which is the Company's joint venture in China, in the December quarter.

Brian Parke, Chairman and Chief Executive Officer of Unifi, said, "In China, we continue to focus on preparing the texturing equipment to produce yarn that meets Unifi quality standards, and we anticipate finishing this stage by the end of March.  We believe we will meet our quality standards in May of this year.  Interest remains very high from customers and potential customers looking to fulfill orders for their Chinese operations.  We anticipate that the joint venture will achieve breakeven levels in the fourth fiscal quarter, and we will begin to build from this platform."

Unifi, Inc. (NYSE: UFI) is a diversified producer and processor of multi-filament polyester and nylon textured yarns and related raw materials.  The Company adds value to the supply chain and enhances consumer demand for its products through the development and introduction of branded yarns that provide unique performance, comfort and aesthetic advantages.  Key Unifi brands include, but are not limited to: Sorbtek^®, A.M.Y.^®, Mynx^® UV, Reflexx^®, MicroVista^® and Satura^®.  Unifi's yarns and brands are readily found in home furnishings, apparel, legwear, and sewing thread, as well as industrial, automotive, military, and medical applications.  For more information about Unifi, visit www.unifi.com.

###

Financial Statements to Follow

---

 

Unifi Announces Second Quarter Results - page 3

UNIFI, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited) (In Thousands Except Per Share Data)
		For the Quarters Ended		For the Six Months Ended
		December 25, 2005	December 26, 2004	December 25, 2005	December 26, 2004
Net sales		$          192,300	$       208,412	$        377,741	$          388,002
Cost of sales		183,207	198,669	361,126	367,523
Selling, general & administrative expenses		10,694	10,009	21,675	19,514
Provisions for bad debts		604	3,828	1,131	4,648
Interest expense		4,659	5,293	9,436	9,958
Interest income		(1,144)	(467)	(2,421)	(840)
Other (income) expense, net		(724)	(127)	(1,575)	(401)
Equity in earnings of unconsolidated affiliates		(18)	(712)	(1,842)	(1,866)
Minority interest income		-	(309)	-	(497)
Restructuring charges		-	-	29	-
Writedown of long-lived assets		-	-	1,500	-
Loss from continuing operations before income taxes  and extraordinary item		(4,978)	(7,772)	(11,318)	(10,037)
Benefit for income taxes		(1,272)	(2,710)	(1,953)	(3,815)
Loss from continuing operations before   extraordinary item		(3,706)	(5,062)	(9,365)	(6,222)
Income (loss) from discontinued operations, net of tax		(270)	(2,684)	2,511	(24,079)
Extraordinary gain - net of taxes of $0		208	-	-	-
Net loss		(3,768)	$            (7,746)	$            (6,854)	$         (30,301)
Earnings (losses) per common share (basic and diluted):
Net loss - continuing operations		$        (0.07)	$              (0.10)	$            (0.18)	$             (0.12)
Net income (loss) - discontinued     operations		-	(0.05)	0.05	(0.46)
Extraordinary gain (loss) - net of taxes     of $0		-	-	-	-
Net loss		$         (0.07)	$             (0.15)	$           (0.13)	$             (0.58)
Average basic and diluted shares outstanding		52,127	52,095	52,127	52,086

-continued-

Unifi Announces Second Quarter Results - page 4

UNIFI, INC.
CONSOLIDATED BALANCE SHEETS
(Unaudited) (In Thousands)
			December 25, 2005		September 25, 2005		June 26, 2005
Assets
Cash and cash equivalents			$                    85,019		$                    90,744		$       105,621
Receivables, net			94,075		98,895		106,437
Inventories			109,572		114,179		110,827
Deferred income taxes			11,711		12,217		14,578
Assets held for sale			-		-		10,694
Restricted cash			-		-		2,766
Other current assets			11,335		13,109		15,590
Total current assets			311,712		329,144		366,513
Property, plant and equipment			280,908		290,599		301,574
Investments in unconsolidated affiliates			192,090		177,981		160,675
Other noncurrent assets			15,731		14,309		16,613
			$                  800,441		$                  812,033		$       845,375
Liabilities and Shareholders' Equity
Accounts payable			$                    63,197		$                    58,401		$         62,666
Accrued expenses			31,103		36,694		45,618
Income taxes payable			2,054		3,189		2,292
Current maturities of long-term debt
and other current liabilities			8,929		11,383		35,339
Total current liabilities			105,283		109,667		145,915
Long-term debt and other liabilities			260,738		258,731		259,790
Deferred income taxes			49,539		51,754		55,913
Minority interest			-		-		182
Shareholders' equity			384,881		391,881		383,575
			$                  800,441		$                  812,033		$       845,375

-continued-

Unifi Announces Second Quarter Results - page 5

 

UNIFI, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited) (In Thousands)
		For the Six Months Ended
		December 25, 2005			December 26, 2004
Cash and cash equivalents at beginning of year		$                105,621			$                 65,221
Operating activities:
Net loss from continuing operations		(9,365)			(6,222)
Adjustments to reconcile net loss to net cash
provided by continuing operating activities:
Net loss of unconsolidated equity affiliates,
net of distributions		288			496
Depreciation		24,688			25,118
Amortization		642			628
Net gain on asset sales		(365)			(586)
Non-cash portion restructuring charges		29			-
Non-cash write down of long-lived assets		1,500			-
Deferred income tax		(3,255)			(8,835)
Provision for bad debts and quality claims		1,131			4,648
Other noncurrent assets		-			4,109
Other		(32)			(239)
Change in assets and liabilities, excluding
effects of acquisitions and foreign currency
adjustments		331			(12,678)
Net cash provided by continuing operating
activities		15,592			6,439
Investing activities:
Capital expenditures		(7,614)			(3,642)
Acquisition		-			(1,002)
Investment in equity affiliates		(30,388)			-
Investment of foreign restricted assets		158			(262)
Collection of notes receivable		236			204
Decrease in restricted cash		2,766			-
Proceeds from sale of capital assets		2,376			621
Return of capital from equity affiliates		-			6,138
Other		(28)			(37)
Net cash (used in) provided by investing activities		(32,494)			2,020
Financing activities:
Payment of long-term debt		(24,407)			-
Common stock issued upon exercise of options		-			104
Other		40			(70)
Net cash (used in) provided by financing activities		(24,367)			34
Discontinued operations and net changes in assets
held for sale		20,544			(22,566)
Effect of exchange rate changes on cash and cash
equivalents		123			1,803
Net decrease in cash and cash equivalents		(20,602)			(12,270)
Cash and cash equivalents at end of period		$                  85,019			$                 52,951

 

 

-continued-

Unifi Announces Second Quarter Results - page 6

CAUTIONARY STATEMENT ON FORWARD-LOOKING STATEMENTS

Certain statements included herein contain forward-looking statements within the meaning of federal security laws about Unifi, Inc.'s (the "Company") financial condition and results of operations that are based on management's current expectations, estimates and projections about the markets in which the Company operates, management's beliefs and assumptions made by management.  Words such as "expects," "anticipates," "believes," "estimates," variations of such words and other similar expressions are intended to identify such forward-looking statements.  These statements are not guarantees of future performance and involve certain risks, uncertainties and assumptions, which are difficult to predict.  Therefore, actual outcomes and results may differ materially from what is expressed or forecasted in, or implied by, such forward-looking statements.  Readers are cautioned not to place undue reliance on these forward-looking statements, which reflect management's judgment only as of the date hereof.  The Company undertakes no obligation to update publicly any of these forward-looking statements to reflect new information, future events or otherwise.

Factors that may cause actual outcome and results to differ materially from those expressed in, or implied by, these forward-looking statements include, but are not necessarily limited to, availability, sourcing and pricing of raw materials, pressures on sales prices and volumes due to competition and economic conditions, reliance on and financial viability of significant customers, operating performance of joint ventures, alliances and other equity investments, technological advancements, employee relations, changes in construction spending, capital expenditures and long-term investments (including those related to unforeseen acquisition opportunities), continued availability of financial resources through financing arrangements and operations, outcomes of pending or threatened legal proceedings or governmental investigations or proceedings (including environmental related claims), negotiation of new or modifications of existing contracts for asset management and for property and equipment construction and acquisition, regulations governing tax laws, other governmental and authoritative bodies' policies and legislation, the continuation and magnitude of the Company's common stock repurchase program and proceeds received from the sale of assets held for disposal.  In addition to these representative factors, forward-looking statements could be impacted by general domestic and international economic and industry conditions in the markets where the Company competes, such as changes in currency exchange rates, interest and inflation rates, recession and other economic and political factors over which the Company has no control.  Other risks and uncertainties may be described from time to time in the Company's other reports and filings with the Securities and Exchange Commission.

-end-