Unifi Announces Fourth Quarter Results
GREENSBORO, N.C., Aug. 3 /PRNewswire-FirstCall/ -- Unifi, Inc. (NYSE: UFI), today released operating results for its fourth quarter and fiscal year ended June 25, 2006.
Net income for the current quarter, including discontinued operations, was a net loss of $5.4 million or $0.10 per share, which is an improvement over a net loss of $9.0 million or $0.17 per share for the prior year June quarter. Net income for the current quarter was negatively impacted by a pre-tax loss of $2.9 million associated with the early extinguishment of debt. The Company also reported a net loss of $14.4 million or $0.28 per share for the 2006 fiscal year, which represents an improvement over a net loss of $41.2 million or $0.79 per share for the 2005 fiscal year.
Excluding discontinued operations and extraordinary items, the Company reported a net loss from continuing operations of $5.2 million or $0.10 per share compared to a net loss of $12.4 million or $0.24 per share for the prior year June quarter. The Company also reported a net loss from continuing operations of $14.7 million or $0.28 per share for the 2006 fiscal year, which compares favorably to the net loss of $19.7 million or $0.38 per share for the 2005 fiscal year.
"Our results for the current fiscal year mark the second straight year of improvement. We have reduced our net loss by $55.4 million, which improvement has been driven by continued successful execution of our internal plans," said Bill Lowe, Chief Operating Officer and CFO for Unifi. "We also successfully refinanced our long-term debt during this last fiscal quarter providing the flexibility and time to execute our longer-term external strategies."
Net sales for the June quarter were $183.2 million, a decrease of $17.2 million or 8.6 percent compared to net sales of $200.4 million for the prior year June quarter. Net sales of $738.8 million for the 2006 fiscal year represent a decrease of $55.0 million, or 6.9 percent, over 2005 fiscal year net sales of $793.8 million.
Brian Parke, Chairman and CEO for Unifi, said, "In an environment of rising raw material prices, the ability to exceed our forecast and improve the results of our underlying business during the 2006 fiscal year, reflects the soundness of the strategies that have been in place for more than two years. We will continue to stay the course in terms of our domestic and global growth plans, as we evaluate and pursue additional opportunities to consolidate the domestic industry. We remain keenly aware of the need to return to profitability and create value to our shareholders."
Unifi, Inc. 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(R), A.M.Y.(R), Mynx(R) UV, Reflexx(R), MicroVista(R) and Satura(R). 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 http://www.unifi.com.
Financial Statements to Follow
UNIFI, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited) (In Thousands Except Per Share Data)
For the Quarters For the Fiscal Years
Ended Ended
June 25, June 26, June 25, June 26,
2006 2005 2006 2005
Net sales $183,208 $200,428 $738,825 $793,796
Cost of sales 171,348 199,338 696,055 762,717
Selling, general &
administrative expenses 10,402 11,663 41,534 42,211
Provision (recovery) for
bad debts (93) 8,133 1,256 13,172
Interest expense 5,203 5,361 19,247 20,575
Interest income (902) (801) (4,489) (2,152)
Other (income) expense, net (574) (1,053) (3,118) (2,300)
Equity in (earnings) losses
of unconsolidated affiliates 453 (653) (825) (6,938)
Minority interest income - (86) - (530)
Restructuring charges
(recovery) (283) (341) (254) (341)
Write down of long-lived
assets 51 603 2,366 603
Loss from early
extinguishment of debt 2,949 - 2,949 -
Loss from continuing
operations before
income taxes and
extraordinary item (5,346) (21,736) (15,896) (33,221)
Benefit for income taxes (147) (9,320) (1,170) (13,483)
Loss from continuing
operations before
extraordinary item (5,199) (12,416) (14,726) (19,738)
Income (loss) from
discontinued operations,
net of tax (196) 3,607 360 (22,644)
Extraordinary gain (loss)-
net of taxes of $0 - (185) - 1,157
Net loss $(5,395) $(8,994) $(14,366) $(41,225)
Earnings (losses) per
common share (basic and
diluted):
Net loss - continuing
operations $(0.10) $(0.24) $(0.28) $(0.38)
Net income (loss) -
discontinued
operations - 0.07 - (0.43)
Extraordinary gain
(loss)- net of taxes
of $0 - - - 0.02
Net loss $(0.10) $(0.17) $(0.28) $(0.79)
Average basic and diluted
shares outstanding 52,190 52,126 52,155 52,106
UNIFI, INC.
CONSOLIDATED BALANCE SHEETS
(Unaudited) (In Thousands)
June 25, 2006 June 26, 2005
Assets
Cash and cash equivalents $35,317 $105,621
Receivables, net 93,236 106,437
Inventories 116,018 110,827
Deferred income taxes 11,739 14,578
Assets held for sale 15,419 32,536
Restricted cash - 2,766
Other current assets 9,229 15,590
Total current assets 280,958 388,355
Property, plant and equipment 239,696 279,732
Investments in unconsolidated
affiliates 190,217 160,675
Other noncurrent assets 21,766 16,613
$732,637 $845,375
Liabilities and Shareholders' Equity
Accounts payable $68,888 $62,666
Accrued expenses 23,869 45,618
Income taxes payable 2,303 2,292
Current maturities of long-term
debt and other current
liabilities 6,330 35,339
Total current liabilities 101,390 145,915
Long-term debt and other
liabilities 202,433 259,790
Deferred income taxes 45,861 55,913
Minority interest - 182
Shareholders' equity 382,953 383,575
$732,637 $845,375
UNIFI, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited) (In Thousands)
Fiscal Years Ended
June 25, 2006 June 26, 2005
Cash and cash equivalents at
beginning of year $105,621 $65,221
Operating activities:
Net loss (14,366) (41,225)
Adjustments to reconcile net loss
to net cash provided by continuing
operating activities:
Extraordinary gain - (1,157)
Loss from discontinued
operations (360) 22,644
Net (income) loss of
unconsolidated equity
affiliates, net of
distributions 1,945 (2,302)
Depreciation 48,669 51,542
Amortization 1,276 1,350
Net (gain) loss on asset
sales (1,755) (1,770)
Non-cash portion of loss
from early extinguishment
of debt 1,793 -
Non-cash portion of
restructuring charges
(recovery) (254) (341)
Non-cash write down of long-
lived assets 2,366 603
Deferred income tax (8,153) (19,057)
Provision for bad debts and
quality claims 1,256 13,172
Other 3,368 (2,089)
Change in assets and
liabilities, excluding
effects of acquisitions
and foreign currency
adjustments (5,817) 7,415
Net cash provided by
continuing operating
activities 29,968 28,785
Investing activities:
Capital expenditures (11,988) (9,422)
Investment in equity affiliates (30,634) (1,358)
Return of capital from equity
affiliates - 6,138
Investment in foreign restricted
assets 171 388
Collection of notes receivable 404 520
Increase in notes receivable - (139)
Proceeds from sale of capital
assets 10,093 2,290
Change in restricted cash 2,766 (2,766)
Other (42) (342)
Net cash used in
investing activities (29,230) (4,691)
Financing activities:
Payment of long-term debt (273,134) -
Borrowing of long-term debt 190,000 -
Debt issuance costs (8,041) -
Issuance of Company stock 176 104
Other 530 (22)
Net cash provided by
(used in) financing
activities (90,469) 82
Cash flows of discontinued
operations:
Operating cash flow (3,337) (6,273)
Investing cash flow 22,028 13,902
Net cash provided by discontinued
operations 18,691 7,629
Effect of exchange rate changes on
cash and cash equivalents 736 8,595
Net increase (decrease) in cash and
cash equivalents (70,304) 40,400
Cash and cash equivalents at end of
year $35,317 $105,621
CAUTIONARY STATEMENT ON FORWARD-LOOKING STATEMENTS
Certain statements included herein contain forward-looking statements within the meaning of federal security laws about the Company's 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, 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.
SOURCE Unifi, Inc.
CONTACT: William M. Lowe, Jr., Vice President, Chief Operating Officer,
Chief Financial Officer of Unifi, Inc.,
+1-336-316-5664