Press Release Details

GREENSBORO, N.C., July 19 /PRNewswire/ -- Despite posting an almost 8% quarter-over- quarter increase in domestic polyester unit volume, Unifi, Inc. (NYSE: UFI) today announced that earnings per share for the fourth quarter of fiscal 2000 are expected to be approximately 10% below the $.23 per share earned in the third quarter of fiscal 2000.

Despite a strong start to the fourth quarter, earnings were negatively impacted by the following factors: a polyester price increase in May and June of approximately 8% in Unifi's raw materials were not totally passed along to customers in the quarter; a softness in sales of the company's value-added fine denier nylon as retailers adjusted their sheer hosiery inventories by as much as 40% to improve turns, which reduced operating profit in the quarter by approximately $3.0 million; a special charge of approximately $8.0 million taken as a provision for bad debts resulting from the general decline of industry conditions; and unusual and non-recurring charges of $1.8 million for severance costs, insurance and other project settlements. Additionally, the earnings of Unifi's equity affiliates declined approximately $2.0 million from the March 2000 quarter due to increased start-up costs at Micell and reduced earnings at Parkdale America.

Among the many positives for the quarter were the continued strong improvements in volume, performance, and profitability of the Company's Brazilian operations, the repurchase during the quarter of 4.3% of the Company's common stock, and a $3.5 million reduction of income taxes achieved through resolution with taxing authorities.

Moving into the new fiscal year the Company anticipates improvements in its domestic operations as the price increase in raw materials is passed through, nylon volumes increase as retail orders for sheer hosiery recover from the inventory adjustment, and shipments of value-added polyester continue to rise. Globally, the Company should benefit from the improved process flow and increased operating efficiency at Unifi Dyed Yarns in England and the continuation of Unifi's worldwide partnering strategy.

Unifi will release complete fourth quarter financial details on July 26, 2000.

Unifi is the largest producer and processor of textured yarns in the world. Its primary business is the texturing, dyeing, twisting, covering and beaming of multi-filament polyester and nylon yarns. Unifi's textured yarns are found in home furnishings, apparel and industrial fabrics, automotive, upholstery, hosiery and sewing thread.

CAUTIONARY STATEMENT ON FORWARD-LOOKING STATEMENTS

Certain statements included herein are "forward-looking statements" within the meaning of the federal securities laws. Management cautions that forward- looking statements are not guarantees and that actual results could differ materially from those expressed or implied in the forward-looking statements. Important factors that could cause the actual results of operations or financial condition of the Company to differ include, but are not necessarily limited to, sourcing and pricing of raw materials, pressures on sales prices due to competition and economic condition, reliance on and financial viability of significant customers, technological advancements, employee relations, changes in construction spending and capital expenditures (including those related to unforeseen acquisition opportunities), continued availability of financial resources through financing arrangements and operations, 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 the 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. Investors are also directed to consider the risks and uncertainties discussed in documents filed by the Company with the Securities and Exchange Commission.
SOURCE Unifi, Inc.
CONTACT: Billy Moore, Senior Vice President and CFO of Unifi, Inc., 336-316-5664