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):

March 10, 2014

 

UNIFI, INC.

(Exact name of registrant as specified in its charter)

 

New York (State or Other Jurisdiction of Incorporation)

1-10542 (Commission File Number)

11-2165495 (IRS Employer Identification No.)

 

7201 West Friendly Avenue Greensboro, North Carolina (Address of Principal Executive Offices)

27410 (Zip Code)

 

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

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 7.01.     REGULATION FD DISCLOSURE

 

James M. Otterberg, Vice President and Chief Financial Officer of Unifi, Inc. (the “Registrant”), is scheduled to meet privately with analysts and select others for a series of meetings over the course of March 10 and 11, 2014. The slide package prepared for possible use by the executive during these meetings is furnished herewith as Exhibit 99.1. The information in the slide package will be presented, if at all, for the convenient reference of the attendees at the meetings, and no such information is being presented to update any previous disclosure of information by the Registrant. In any event, 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 9.01. FINANCIAL STATEMENTS AND EXHIBITS

 

(d)     Exhibits.

 

EXHIBIT NO.	DESCRIPTION OF EXHIBIT
99.1	Slide Package prepared for possible use in connection with meetings on March 10 and 11, 2014.

 

 

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/ W. RANDY EADDY
		W. Randy Eaddy
		General Counsel and Secretary

 

 

Dated: March 10, 2014

 

 

INDEX TO EXHIBITS

 

EXHIBIT NO.	DESCRIPTION OF EXHIBIT
99.1	Slide Package prepared for possible use in connection with meetings on March 10 and 11, 2014.

 

 

 

Exhibit 99.1

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

For more information, contact: James M. Otterberg Chief Financial Officer (336) 316-5424

 

Unifi Announces Second Quarter 2014 Results

 

 

GREENSBORO, N.C., – January 21, 2014 – Unifi, Inc. (NYSE: UFI) today released preliminary operating results for the second quarter ended December 29, 2013 of its 2014 fiscal year. Net income for the current year quarter was $6.4 million, or $0.34 per basic share, compared to net income of $2.4 million, or $0.12 per basic share, for the prior year quarter, reflecting gains from improved margins, lower net interest expense and higher earnings from the Company’s equity affiliates. These gains were partially offset by higher expenses for income taxes.

 

Highlights for the December 2013 quarter included:

●

Adjusted EBITDA improved to $12.6 million for the current year quarter from $12.2 million for the prior year quarter;

●

Domestic gross profit was higher due to improved margins and lower expenses for depreciation;

●

Higher earnings from the Company’s equity affiliates, primarily Parkdale America LLC, increased income before income taxes by $3.9 million versus the prior year quarter; and

●

The Company used $12.9 million of excess cash flows from operations to repurchase 522,220 shares of its common stock under its previously announced stock repurchase program.

 

A net sales decrease of $11.5 million, or 6.7%, to $160.6 million for the second quarter of the current year compared to net sales of $172.1 million for the prior year quarter, was offset by improved operating margins and earnings from equity affiliates. The comparative decrease was primarily attributable to the timing of the holiday shutdown, which adversely affected domestic sales activity in the second quarter of the current year versus the third quarter of the prior year; in addition, declines in sales volumes for the Company’s foreign subsidiaries, reductions in lower margin business and the currency translation effects of the weakened Brazilian Real also contributed to lower net sales.

 

 

 

 

Unifi Announces Second Quarter 2014 Results - page 2

 

 

“We are encouraged with the continued performance of our domestic business, focusing on products that are profitable, defensible and compliant within the Central American Free Trade Agreement, and we have experienced growth in our domestic operations from our premier value-added products,” said Roger Berrier, President and Chief Operating Officer of Unifi. “Although operating conditions remain challenging in Brazil and China, we remain encouraged by the long-term sales opportunities that we anticipate from the development work that we are currently engaged in.”

 

Cash-on-hand as of December 29, 2013 was $15.5 million, an increase of $6.8 million from June 30, 2013. Net debt at the end of the December 2013 quarter was $87.3 million, compared to $89.0 million at June 30, 2013. As of December 29, 2013, the weighted average interest rate for the Company’s outstanding debt obligations was 3.1%.

 

Net income was $15.3 million, or $0.80 per basic share, for the six months ended December 29, 2013 compared to net income of $4.7 million, or $0.23 per share, for the prior year six-month period. A net sales decrease of $15.7 million, or 4.5%, to $329.3 million for the current year six-month period compared to net sales of $345.0 million for the prior year six-month period, was offset by improved operating margins and earnings from equity affiliates.

 

“We continue to have strong, improving earnings and cash flow. Our operating results over the past twelve months have enabled us to fund our operating and capital needs, while repurchasing $38 million of the Company’s common stock and reducing net debt by slightly over $4 million, significantly enhancing shareholder value,” said Bill Jasper, Chairman and CEO of Unifi. “We expect to continue our financial improvement by continuing to focus on lean manufacturing initiatives, enriching our product mix and deriving value from sustainability based initiatives.”

 

 

 

   

CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited)

(amounts in thousands, except share and per share amounts)

 

		December 29, 2013				June 30, 2013
ASSETS
Cash and cash equivalents		$	15,522			$	8,755
Receivables, net			77,536				98,392
Inventories			110,765				110,667
Income taxes receivable			1,374				1,388
Deferred income taxes			1,831				1,715
Other current assets			5,371				5,913
Total current assets			212,399				226,830
Property, plant and equipment, net			116,562				115,164
Deferred income taxes			2,590				2,196
Intangible assets, net			8,549				7,772
Investments in unconsolidated affiliates			101,562				93,261
Other non-current assets			4,510				10,243
Total assets		$	446,172			$	455,466
LIABILITIES AND SHAREHOLDERS’ EQUITY
Accounts payable		$	35,740			$	45,544
Accrued expenses			12,517				18,485
Income taxes payable			417				851
Current portion of long-term debt			1,316				65
Total current liabilities			49,990				64,945
Long-term debt			101,508				97,688
Other long-term liabilities			6,950				5,053
Deferred income taxes			1,991				1,300
Total liabilities			160,439				168,986
Commitments and contingencies
Common stock, $0.10 par (500,000,000 shares authorized, 19,035,918 and 19,205,209 shares outstanding)			1,904				1,921
Capital in excess of par value			42,814				36,375
Retained earnings			248,242				252,112
Accumulated other comprehensive loss			(8,662	)			(5,500	)
Total Unifi, Inc. shareholders’ equity			284,298				284,908
Non-controlling interest			1,435				1,572
Total shareholders’ equity			285,733				286,480
Total liabilities and shareholders’ equity		$	446,172			$	455,466

 

 

 

  

CONDENSED CONSOLIDATED STATEMENTS OF INCOME (Unaudited)

(amounts in thousands, except per share amounts) 

 

		For the Three Months Ended								For the Six Months Ended
		December 29, 2013				December 23, 2012				December 29, 2013				December 23, 2012
Net sales		$	160,617			$	172,071			$	329,286			$	344,971
Cost of sales			142,120				155,380				290,804				310,260
Gross profit			18,497				16,691				38,482				34,711
Selling, general and administrative expenses			11,491				11,532				21,605				22,679
Provision for bad debts			87				73				49				183
Other operating expense, net			1,145				580				2,769				1,161
Operating income			5,774				4,506				14,059				10,688
Interest income			(142	)			(144	)			(1,356	)			(268	)
Interest expense			903				1,361				2,155				2,805
Loss on extinguishment of debt			—				114				—				356
Equity in earnings of unconsolidated affiliates			(5,122	)			(1,258	)			(11,245	)			(1,929	)
Income before income taxes			10,135				4,433				24,505				9,724
Provision for income taxes			3,924				2,216				9,675				5,449
Net income including non-controlling interest			6,211				2,217				14,830				4,275
Less: net (loss) attributable to non-controlling interest			(232	)			(209	)			(483	)			(445	)
Net income attributable to Unifi, Inc.		$	6,443			$	2,426			$	15,313			$	4,720
Net income attributable to Unifi, Inc. per common share:
Basic		$	0.34			$	0.12			$	0.80			$	0.23
Diluted		$	0.32			$	0.12			$	0.76			$	0.23

 

 

 

 

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)

(amounts in thousands)

 

		For The Six Months Ended
		December 29, 2013				December 23, 2012
Cash and cash equivalents at beginning of year		$	8,755			$	10,886
Operating activities:
Net income including non-controlling interest			14,830				4,275
Adjustments to reconcile net income including non-controlling interest to net cash provided by operating activities:
Equity in earnings of unconsolidated affiliates			(11,245	)			(1,929	)
Dividends received from unconsolidated affiliates			3,059				2,724
Depreciation and amortization expense			8,625				12,997
Loss on extinguishment of debt			—				356
Non-cash compensation expense			1,611				1,326
Excess tax benefit on stock-based compensation plans			(3,536	)			—
Deferred income taxes			25				3,159
Other			3,465				97
Changes in assets and liabilities, excluding effects of foreign currency adjustments:
Receivables, net			19,829				10,447
Inventories			(1,609	)			5,467
Other current assets and income taxes receivable			3,684				(784	)
Accounts payable and accrued expenses			(19,299	)			(12,235	)
Income taxes payable			3,137				(1,161	)
Net cash provided by operating activities			22,576				24,739
Investing activities:
Capital expenditures			(9,431	)			(2,872	)
Other investments			—				(1,620	)
Proceeds from sale of assets			268				56
Proceeds from other investments			392				—
Other			(60	)			(55	)
Net cash used in investing activities			(8,831	)			(4,491	)
Financing activities:
Proceeds from revolving credit facility			72,700				28,700
Payments on revolving credit facility			(74,800	)			(35,700	)
Proceeds from term loan			7,200				—
Payments on term loans			—				(10,516	)
Payments of debt financing fees			(3	)			(63	)
Proceeds from related party term loan			—				1,250
Repurchase and retirement of common stock			(18,686	)			—
Proceeds from stock option exercises			2,833				29
Contributions from non-controlling interest			346				480
Excess tax benefit on stock-based compensation plans			3,536				—
Other			(29	)			(39	)
Net cash used in financing activities			(6,903	)			(15,859	)
Effect of exchange rate changes on cash and cash equivalents			(75	)			(29	)
Net increase in cash and cash equivalents			6,767				4,360
Cash and cash equivalents at end of period		$	15,522			$	15,246

 

 

 

 

RECONCILIATIONS OF NET INCOME ATTRIBUTABLE TO UNIFI, INC. TO ADJUSTED EBITDA (Unaudited)

(amounts in thousands)

 

The reconciliations of Net income attributable to Unifi, Inc. to EBITDA, Adjusted EBITDA including equity affiliates and Adjusted EBITDA are as follows:

 

		For the Three Months Ended								For the Six Months Ended
		December 29, 2013				December 23, 2012				December 29, 2013				December 23, 2012
Net income attributable to Unifi, Inc.		$	6,443			$	2,426			$	15,313			$	4,720
Provision for income taxes			3,924				2,216				9,675				5,449
Interest expense, net			761				1,217				799				2,537
Depreciation and amortization expense			4,080				6,298				8,349				12,631
EBITDA			15,208				12,157				34,136				25,337
Non-cash compensation expense			1,197				705				1,611				1,326
Loss on extinguishment of debt			—				114				—				356
Other			1,284				438				2,546				891
Adjusted EBITDA including equity affiliates			17,689				13,414				38,293				27,910
Equity in earnings of unconsolidated affiliates			(5,122	)			(1,258	)			(11,245	)			(1,929	)
Adjusted EBITDA		$	12,567			$	12,156			$	27,048			$	25,981