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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):
April 20, 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 April 20, 2006, Unifi, Inc. (the "Company") issued a press release announcing the financial results for its third quarter of fiscal year 2006 ending March 26, 2006.  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.

(c)        Exhibits.

EXHIBIT NO.

DESCRIPTION OF EXHIBIT
 

99.1

News Release disseminated on April 20, 2006 by Unifi, Inc. announcing the financial results for its third quarter of fiscal year 2006 ending March 26, 2006.

 

 

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:  April 20, 2006


INDEX TO EXHIBITS

EXHIBIT NO.

DESCRIPTION OF EXHIBIT

99.1

News Release disseminated on April 20, 2006 by Unifi, Inc. announcing the financial results for its third quarter of fiscal year 2006 ending March 26, 2006.

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

Unifi Announces Third Quarter Results

GREENSBORO, N.C. - April 20, 2006 - Unifi, Inc. (NYSE: UFI) today released operating results for its fiscal third quarter ending March 26, 2006.

Net income from continuing operations for the current quarter was a net loss of $1.3 million or $0.03 per share, which is equivalent to a net loss of $1.6 million or $0.03 per share for the prior March quarter.  Net income from continuing operations for the first nine months of fiscal year 2006 was a net loss of $9.5 million or $0.18 per share, which includes a total of $2.3 million in pre-tax impairment charges associated with the Company's properties located in Mayodan, N.C., compared to a net loss of $7.3 million or $0.14 per share for the prior year period.

Net income for the current March quarter, including discontinued operations, was a net loss of $2.1 million or $0.04 per share compared a net loss of $1.9 million or $0.04 per share for the prior March quarter.  Net income for the first nine months of fiscal year 2006, including discontinued operations, was a net loss of $9.0 million or $0.17 per share compared to a net loss of $32.2 million or $0.62 per share for the prior year period, which includes charges associated with the closure of the Company's facility in Ireland. 

-continued-

 

 Unifi Announces Third Quarter Results - page 2

Net sales from continuing operations for the current March quarter of $181.4 million were down $26.3 million or 12.7 percent compared to net sales of $207.7 million for the prior year March quarter.   Net sales for the first nine months of fiscal year 2006 were $555.6 million, which is a decrease of $37.8 million or 6.4 percent compared to net sales of $593.4 million for the first nine months of fiscal year 2005.  Net sales volume for the current quarter reflects the impact that higher energy prices and rising interest rates had on substantially slowing consumer spending in the fourth quarter of 2005.  Cash-on-hand at the end of the current March quarter was $88.4 million.

"Our underlying business experienced distinct improvements, including cash generation, in the current quarter," said Bill Lowe, Chief Operating Officer and Chief Financial Officer for Unifi.  "We continue to be selective with our product mix to maximize our financial results, and we are continuing to capitalize on opportunities that exist in our region, including emerging markets, by offering innovation, differentiation, and speed-to-market advantages to our customers."

Brian Parke, Chairman and CEO of Unifi, said, "Our Board of Directors has completed its strategic review, which was designed to scrutinize the various strategic alternatives available to our business and our shareholders.  Based on the review, both management and the Board of Directors agree the optimal strategy is the pursuit of  selective consolidation opportunities in our domestic yarn market, while continuing to explore participation in the global growth of emerging markets.  As part of this strategy, the Company will continue to evaluate its debt structure in order to maintain flexibility to make selective acquisitions and investments.  We believe this strategy allows the Company to create meaningful and sustainable shareholder value, significantly in excess of the value provided from other alternatives, such as a sale or merger of the Company."

-continued-

 

 

 Unifi Announces Third Quarter Results - - page 3

The Company will provide updates as definitive transactions are approved by the Board of Directors.

Unifi, Inc. (NYSE: UFI) is a leading 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 Third Quarter Results - page 4

 

UNIFI, INC.   
CONSOLIDATED STATEMENTS OF OPERATIONS         
(Unaudited) (In Thousands Except Per Share Data)        
   For the Quarters Ended   For the Nine Months Ended
  March 26, 2006 March 27, 2005 March 26, 2006 March 27, 2005
         
Net sales  $                  181,398  $              207,688  $              555,617  $                   593,368
Cost of sales                                     168,261                                     198,356                                  524,707                                   563,379

Selling, general & administrative expenses		                                      10,184                                      11,360                                   31,132                                     30,548
Provisions for bad debts                                          218                                          561                                     1,349                                       5,039
Interest expense                                        4,606                                        5,256                                   14,044                                     15,214
Interest income                                       (1,162)                                         (473)                                    (3,587)                                      (1,351)
Other (income) expense, net                                         (969)                                         (701)                                    (2,544)                                      (1,247)

Equity in (earnings) losses of unconsolidated affiliates		                                          564                                       (4,457)                                    (1,278)                                      (6,285)
Minority interest (income) expense                                              -                                            53                                           -                                        (444)
Restructuring charges                                              -                                              -                                         29                                             -
Write down of long-lived assets                                          815                                              -                                     2,315                                             -

Loss from continuing operations before income taxes and extraordinary item 		 (1,119) (2,267) (10,550) (11,485)
Provision (benefit) for income taxes                                          208                                         (654)                                    (1,023)                                      (4,163)

Loss from continuing operations before extraordinary item		 (1,327) (1,613) (9,527) (7,322)

Income (loss) from discontinued operations, net of tax		                                         (790)                                       (1,659)                                       556                                    (26,251)

Extraordinary gain - net of taxes of $0		                                              -                                        1,342                                           -                                       1,342
Net loss  $                  (2,117)  $                (1,930)  $                   (8,971)  $                 (32,231)
         
Earnings (losses) per common share (basic and diluted):        
   Net loss - continuing operations  $                    (0.03)  $                 (0.03)  $                     (0.18)  $                     (0.14)

   Net income (loss) - discontinued operations		                                         (0.01)                                         (0.04)                                       0.01                                       (0.51)

   Extraordinary gain - net of taxes of $0		                                              -                                          0.03                                           -                                        0.03
      Net loss  $                     (0.04)  $                    (0.04)  $                      (0.17)  $                      (0.62)
         
Average basic and diluted shares outstanding 52,177 52,125 52,144 52,099
         

 

 

 

 

 

 
 -continued-

 

 

 Unifi Announces Third Quarter Results - page 5

    

UNIFI, INC.

CONSOLIDATED BALANCE SHEETS

(Unaudited) (In Thousands)

March 26, 2006

June 26, 2005

Assets

Cash and cash equivalents

 $                 88,423

 $       105,621

Receivables, net

                    94,637

          106,437

Inventories

                  114,836

          110,827

Deferred income taxes

                    10,996

            14,578

Assets held for sale

                      6,000

            16,842

Restricted cash

                             -

              2,766

Other current assets

                      9,395

            15,590

    Total current assets

                  324,287

          372,661

Property, plant and equipment

                  249,425

          279,345

Investments in unconsolidated affiliates

                  191,191

          160,675

Assets held for sale

                    15,729

            16,081

Other noncurrent assets

                  14,525

            16,613

 $               795,157

 $     845,375

Liabilities and Shareholders' Equity

Accounts payable

 $                 64,458

 $       62,666

Accrued expenses

                    24,627

          45,618

Income taxes payable

                      1,915

            2,292

Current maturities of long-term debt

   and other current liabilities

                      7,275

          35,339

     Total current liabilities

                    98,275

        145,915

Long-term debt and other liabilities

                  260,901

        259,790

Deferred income taxes

                    47,934

          55,913

Minority interest

                             -

               182

Shareholders' equity

                  388,047

        383,575

 $               795,157

 $      845,375

 

-continued-

 
 

Unifi Announces Third Quarter Results - page 6

 
 

UNIFI, INC.

 

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

 

(Unaudited) (In Thousands)

 

 

For the Nine Months Ended

March 26, 2006

March 27, 2005

 

 

Cash and cash equivalents at beginning of year

 $               105,621

 $                 65,221

Operating activities:

 Net loss

                    (8,971)

                 (32,231)

 Adjustments to reconcile net loss to net cash provided

     by (used in) continuing operating activities:

   Income (loss) from discontinued operations

                       (556)

                    26,251

   Extraordinary gain

                              -

                   (1,342)

   Net income of unconsolidated equity affiliates, net of

      distributions

                         850

                   (2,460)

   Depreciation

                    36,911

                    37,645

   Amortization

                         962

                         949

   Net gain on asset sales

                       (180)

                      (570)

     Non-cash portion restructuring charges

                           29

                             -

     Non-cash write down of long-lived assets

                      2,315

                             -

     Deferred income tax

                    (3,797)

                   (9,549)

     Provision for bad debts and quality claims

                      1,349

                      5,039

     Other

                      1,821

                   (1,876)

     Change in assets and liabilities, excluding

        effects of acquisitions and foreign currency

           adjustments

                    (7,531)

                 (45,116)

           Net cash provided by (used in) continuing

              operating activities

                    23,202

                 (23,260)

Investing activities:

 Capital expenditures

                    (9,767)

                   (5,890)

 Investment in equity affiliates

                  (30,188)

                      (668)

 Investment in foreign restricted assets

                         171

                      2,777

 Collection of notes receivable

                           92

                         413

 Change in restricted cash

                      2,766

                   (2,766)

 Proceeds from sale of capital assets

                      2,395

                         608

 Return of capital from equity affiliates

                              -

                      6,138

 Increase in notes receivable

                              -

                      (139)

 Other

                           63

                           68

           Net cash (used in) provided by investing activities

                  (34,468)

                         541

Financing activities:

 Payment of long-term debt

                  (24,407)

                             -

 Common stock issued upon exercise of options

                         138

                         104

 Other

                         139

                   (2,548)

           Net cash used in financing activities

                  (24,130)

                   (2,444)

 Cash flows of discontinued operations:

 Operating cash flow

                    (9,259)

                      6,581

 Investing cash flow

                    25,987

                      6,485

           Net cash provided by discontinued operations

                    16,728

                    13,066

Effect of exchange rate changes on cash and cash

   equivalents

                      1,470

                      2,325

Net decrease in cash and cash equivalents

                  (17,198)

                   (9,772)

Cash and cash equivalents at end of period

 $                 88,423

 $                 55,449

 

-continued-

 

 Unifi Announces Third Quarter Results - page 7

 

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-