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

UNIFI, INC.

(Exact name of registrant as specified in its charter)

New York		1-10542		11-2165495
(State of Incorporation)		(Commission File Number)		(IRS Employer Identification No.)

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

(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:

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

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

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

o     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 October 30, 2008, Unifi, Inc. (the “Registrant”) issued a press release announcing its preliminary operating results for its first fiscal quarter ended September 28, 2008, which press release is attached hereto as Exhibit 99.1 and is incorporated herein by reference.

ITEM 7.01. REGULATION FD DISCLOSURE.

     On October 30, 2008, the Registrant will host a conference call to discuss its preliminary operating results for its first fiscal quarter ended September 28, 2008. The slide package prepared for use by executive management for this presentation is attached hereto as Exhibit 99.2. All of the information in the presentation is presented as of October 30, 2008, and the Registrant does not assume any obligation to update such information in the future.

     The information included in the preceding paragraph, as well as the exhibit referenced therein, shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended.

ITEM 8.01. OTHER EVENTS.

     On October 30, 2008, the Registrant issued a press release announcing its preliminary operating results for its first fiscal quarter ended September 28, 2008, which press release is attached hereto as Exhibit 99.1 and is incorporated herein by reference.

ITEM 9.01. FINANCIAL STATEMENTS AND EXHIBITS.

(d) Exhibits.

EXHIBIT NO.		DESCRIPTION OF EXHIBIT
99.1		Press Release dated October 30, 2008 with respect to the Registrant’s preliminary operating results for its fiscal quarter ended September 28, 2008.
99.2		Slide Package prepared for use in connection with the Registrant’s conference call to be held on October 30, 2008.

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.

Dated: October 30, 2008

INDEX TO EXHIBITS

EXHIBIT NO.		DESCRIPTION OF EXHIBIT
99.1		Press Release dated October 30, 2008 with respect to the Registrant’s preliminary operating results for its fiscal quarter ended September 28, 2008.
99.2		Slide Package prepared for use in connection with the Registrant’s conference call to be held on October 30, 2008.

Exhibit 99.1

For more information, contact:
Ronald L. Smith
Chief Financial Officer
(336) 316-5545

Unifi Announces First Quarter Results

     GREENSBORO, N.C. – October 30, 2008 – Unifi, Inc. (NYSE:UFI) today released preliminary operating results for its first fiscal quarter ended September 28, 2008.

     For the September quarter, income from continuing operations before taxes was $1.3 million and net income was a loss of $676 thousand or $0.01 per share, which compares to a loss from continuing operations before taxes of $16.1 million and a net loss of $9.2 million or $0.15 per share in the prior September quarter. Increased sales of the Company’s premium value-added yarns and other product mix enrichments contributed to year-over-year margin improvements and the prior year quarter was negatively impacted by approximately $11 million of restructuring and impairment costs.

     Net sales for the current quarter were $169.0 million, which represents a slight decrease from net sales of $170.5 million for the prior year September quarter. Net sales were positively impacted by volume gains in Brazil and strength in the Company’s nylon business, which continues to be driven by consumer and fashion preferences.

     “During the quarter, volume started out ahead of plan but softened in September as the economy weakened,” said Ron Smith, Chief Financial Officer for Unifi.  “Our results for the quarter confirm that the Company’s strategies to focus on our core business and develop our portfolio of premium value-added products, while exploring growth opportunities in China and Brazil, are the correct ones for our business. We are

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Unifi Announces First Quarter Results – page 2

reacting quickly and decisively to an uncertain market caused by the economic slow down and significant fluctuations in our raw material prices. This price volatility, combined with softening volumes, will have a negative impact on our conversion margin in the December quarter, but we expect to see improvement as we move into the second half of our fiscal year.”

     Cash-on-hand at the end of September was $20.4 million, which increased slightly from the $20.2 million cash-on-hand at the end of June. Total cash and cash equivalents at the end of September, including restricted cash, were $47.7 million compared to $55.6 million at the end of June. Going forward, restricted cash now includes deposits in Brazil, which secure VAT tax incentive loans, as well as the domestic cash restricted primarily for capital expenditures in accordance with the Company’s long-term borrowing agreements. At the end of September, long-term debt was reduced to $196.5 million from $201.8 million as the Company repaid the remaining $3 million of outstanding borrowings under its revolver from the June quarter end.

     Bill Jasper, President and CEO of Unifi, said, “The continuing decline in sales of existing homes and cars and light trucks began taking a toll on our volume in the home furnishings and automotive business segments during the quarter, and we expect the ongoing softness in the economy to make our December quarter a challenging one. However, we will face these challenges with a strong financial base and flexibility that we have not had in the past, including the ability to shift the supply of our raw materials to the most competitive sources and to adjust our mix more efficiently and effectively. We feel confident that the Company will emerge from the economic downturn stronger and with new opportunities based on the actions we have taken over the past year to enhance our overall financial strength.”

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Unifi Announces First Quarter Results – page 3

     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: AIO® — all-in-one performance yarns, SORBTEK®, A.M.Y.®, MYNX® UV, REPREVE®, 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, or to learn more about REPREVE®, visit the new website www.repreve.com.

###

Financial Statements to Follow

Unifi Announces First Quarter Results – page 4

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Unifi Announces First Quarter Results – page 5

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Unifi Announces First Quarter Results – page 6

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Unifi Announces First 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, as well as management’s beliefs and assumptions. 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, 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, 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-

Unifi, Inc.
First Qtr. Conf. Call
October 30, 2008

Unifi, Inc.

First Quarter Ended
September 28, 2008

Conference Call

Unifi, Inc.
First Qtr. Conf. Call
October 30, 2008

Cautionary Statement

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, as well as management’s beliefs and assumptions. 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, 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, 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.

Unifi, Inc.
First Qtr. Conf. Call
October 30, 2008

Income Statement Highlights

(Amounts in thousands)

		For the Quarters Ended
		September 2008				September 2007
Total sales from continuing operations		$	169,009			$	170,536
Income (loss) from continuing operations before income taxes			1,313				(16,087	)
Loss from continuing operations			(572	)			(9,156	)
Selling, general and administrative expense			10,545				14,454
Interest expense			5,965				6,712
Depreciation and amortization expense			9,758				10,470
Net loss			(676	)			(9,188	)

Unifi, Inc.
First Qtr. Conf. Call
October 30, 2008

Volume and Pricing Highlights

(Amounts in thousands, except percentages)

		For the Quarter Ended								For the Quarter Ended
		Sept. 2008 as Compared to								Sept. 2008 as Compared to
		Sept. 2007								June 2008
		Volume				Price				Volume				Price
Polyester			-16.0	%			11.1	%			-13.4	%			1.4	%
Nylon			14.6	%			-2.7	%			-6.4	%			-1.2	%
Consolidated			-13.0	%			12.1	%			-12.6	%			1.7	%

Unifi, Inc.
First Qtr. Conf. Call
October 30, 2008

Balance Sheet Highlights

(Amounts in thousands, except percentages and days in receivables/payables)

		September				June				March				December
		2008				2008				2008				2007
Cash		$	20,396			$	20,248			$	26,187			$	25,775
Restricted Cash-Domestic			14,543				18,246				16,374				18,846
Restricted Cash-Foreign Deposits			12,754				17,116				16,424				16,095
Short-Term Debt			7,651				9,657				9,382				10,247
Long-Term Debt			196,481				201,801				218,384				223,814
Total Debt		$	204,132			$	211,458			$	227,766			$	234,061
Equity			292,979				305,669				296,560				294,947
Net Working Capital (1)		$	153,642			$	156,469			$	153,111			$	145,649
Days in receivables			51.4				49.7				53.3				49.4
Days in payables			23.4				21.4				23.7				22.8

Unifi, Inc.
First Qtr. Conf. Call
October 30, 2008

Equity Affiliates Highlights

(Amounts in thousands, except percentages)

		Quarter Ended September 2008
		Earnings (Loss)				Distributions
Parkdale America (34%)		$	3,450			$	2,065
UNF (50%)			32				—
Total earnings		$	3,482			$	2,065

Unifi, Inc.
First Qtr. Conf. Call
October 30, 2008

Adjusted EBITDA Reconciliation
to Pre-Tax Income

(Amounts in thousands)

		September 28, 2008				September 23, 2007
Pre-tax income (loss) from continuing operations		$	1,313			$	(16,087	)
Interest expense, net			5,052				5,886
Depreciation and amortization expense			9,758				10,470
Equity in earnings of unconsolidated equity affiliates			(3,482	)			(178	)
Non-cash compensation, net of distributions			201				109
Gain on sales of PP&E			(315	)			(142	)
Hedging (gains) losses			86				(115	)
Write down of long-lived assets & equity affiliate			—				5,038
Restructuring charges			—				2,632
SG&A severance charges			—				2,368
Asset consolidation and optimization expense			1,240				—
Kinston shutdown expenses			30				822
Deposit write offs			—				1,248
Adjusted EBITDA		$	13,883			$	12,051

Unifi, Inc.
First Qtr. Conf. Call
October 30, 2008

Non-GAAP

Financial Measures

Non-GAAP Financial Measures

     Included in this presentation are certain non-GAAP financial measures designed to complement the financial information presented in accordance with generally accepted accounting principles in the United States of America because management believes such measures are useful to investors.

     Adjusted EBITDA

     Adjusted EBITDA represents pre-tax income before interest expense, depreciation and amortization expense and loss or income from discontinued operations, adjusted to exclude restructuring charges, SG&A severance charges, equity in earnings and losses of unconsolidated affiliates, write down of long-lived assets and equity affiliate, non-cash compensation expense, gains and losses on sales of property, plant and equipment, hedging gains and losses, deposit write offs, asset consolidation and optimization expense, and Kinston shutdown costs. We present Adjusted EBITDA as a supplemental measure of our performance and ability to service debt. We also present Adjusted EBITDA because we believe such measure is frequently used by securities analysts, investors and other interested parties in the evaluation of companies in our industry and in measuring the ability of “high-yield” issuers to meet debt service obligations.

     We believe Adjusted EBITDA is an appropriate supplemental measure of debt service capacity, because cash expenditures on interest are, by definition, available to pay interest, and tax expense is inversely correlated to interest expense because tax expense goes down as deductible interest expense goes up; depreciation and amortization are non-cash charges. Equity in earnings and losses of unconsolidated affiliates is excluded because such earnings or losses do not have an impact on our ability to service our debt. The other items excluded from Adjusted EBITDA are excluded in order to better reflect our continuing operations.

     In evaluating Adjusted EBITDA, you should be aware that in the future we may incur expenses similar to the adjustments in this presentation. Our presentation of Adjusted EBITDA should not be construed as an inference that our future results will be unaffected by unusual or non-recurring items. Adjusted EBITDA is not a measurement of our financial performance under GAAP and should not be considered as an alternative to net income, operating income or any other performance measures derived in accordance with GAAP or as an alternative to cash flow from operating activities as a measure of our liquidity.

Unifi, Inc.
First Qtr. Conf. Call
October 30, 2008

Non-GAAP

Financial Measures – continued

Our Adjusted EBITDA measure has limitations as an analytical tool, and you should not consider it in isolation or as a substitute for analysis of our results as reported under GAAP. Some of these limitations are:

	•		it does not reflect our cash expenditures, future requirements for capital expenditures or contractual commitments;
	•		it does not reflect changes in, or cash requirements for, our working capital needs;
	•		it does not reflect the significant interest expense or the cash requirements necessary to service interest or principal payments on our debt;
	•		although depreciation and amortization are non-cash charges, the assets being depreciated and amortized will often have to be replaced in the future, and our Adjusted EBITDA measure does not reflect any cash requirements for such replacements;
	•		it is not adjusted for all non-cash income or expense items that are reflected in our statements of cash flows;
	•		it does not reflect the impact of earnings or charges resulting from matters we consider not be indicative of our ongoing operations;
	•		it does not reflect limitations on or costs related to transferring earnings from our subsidiaries to us; and
	•		other companies in our industry may calculate this measure differently than we do, limiting its usefulness as a comparative measure.

     Because of these limitations, Adjusted EBITDA 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 the notes. You should compensate for these limitations by relying primarily on our GAAP results and using Adjusted EBITDA only supplementally.