Home / Knowledge / News / Textiles / Unifi reports net loss due to high raw material costs
Unifi reports net loss due to high raw material costs
08
Feb '12
Unifi Inc released preliminary operating results for its second quarter ended December 25, 2011. Net sales for the December 2011 quarter increased $5 million, or 3 percent, to $167 million compared to the December 2010 quarter and were up slightly at $338 million for the six months ended December 25, 2011 compared to the six months ended December 26, 2010.

Higher sales prices related to mix enrichment and raw material inflation offset unit volume softness caused by inventory destocking across the apparel supply chain. The Company reported a net loss for the December 2011 quarter of $7.6 million, or $0.38 per share, compared to net income of $5.4 million, or $0.27 per share for the December 2010 quarter. The Company reported a net loss for the first half of fiscal 2012 of $7.3 million, or $0.36 per share, compared to net income of $15.6 million, or $0.78 per share, for the prior year period.

"While I am disappointed we are reporting our first quarterly loss in over two years, I am pleased with our ability to generate cash despite historically high raw material prices and weak demand," said Bill Jasper, Chairman and CEO of Unifi.

"Although we believe there is still some excess inventory within the supply chain, we expect the effects of the destocking to be significantly less in the Company's third fiscal quarter and are encouraged by the volume improvements we have seen since returning from our holiday shutdown period. We are also encouraged by the easing of polyester raw material prices from record highs at the beginning of the December 2011 quarter."

"With stronger volumes and improved conversion margins from raw material price reductions, we expect to see continued improvement as we move through the second half of the 2012 fiscal year."

Adjusted earnings before interest, taxes, depreciation and amortization (adjusted EBITDA) were $7.3 million for the December 2011 quarter and $15.5 million for the first half of fiscal 2012, compared to $15.7 million and $34.1 million for the respective periods of fiscal 2011.

Cash-on-hand as of December 25, 2011 was $24.7 million and borrowings available under the Company's revolving credit facility were $44.3 million. Long-term debt at December 25, 2011 consisted of $123.7 million of 11.5% Senior Secured Notes due in May 2014 and $35.0 million of borrowings under the revolving credit facility.

"The Company continued to pursue our deleveraging strategy and maintained our focus on liquidity," said Ron Smith, Chief Financial Officer of Unifi. "As a result of operating activities and progress in our working capital management programs, cash-on-hand improved by $5 million during the December 2011 quarter, and we expect a continuation of these efforts in the second half of the 2012 fiscal year, which will allow us to further utilize excess operating cash and borrowings under our revolving credit facility to redeem additional 2014 Notes."

Must ReadView All

Textiles | On 25th May 2017

Huntsman and Clariant to have merger of equals

Huntsman Corporation and Clariant have announced that their boards of ...

Courtesy: CBRE

Apparel/Garments | On 25th May 2017

European cities preferred for retailer expansion: CBRE

European cities were the preferred new destination for international...

Apparel/Garments | On 25th May 2017

Guess records $458.6 million revenue for Q1 2018

For the first quarter of fiscal 2018, the net revenue of American...

Interviews View All

Priyanka
Studio Priyanka Rajiv

‘To reinvent the age-old tradition of embroidery to suit demographics and...

Nitin Bhatia
Trend Arrest

Setting up a brand for online selling is easy, but running the brand is not

Krishnanand Tripathi
Textrade International Ltd

We believe in vocational education for entry-level employees, offering...

Suresh Patel
Sidwin Fabric

Sidwin Fabric is a manufacturer and exporter of polypropylene textiles and ...

Mohammad Hassan
Biax Fiberfilm

About one in every 20 patients picks up an infection while hospitalised....

Silke Brand-Kirsch
Schlegel und Partner

Silke Brand-Kirsch, executive partner of Schlegel und Partner, a leading...

Igor Chapurin
Chapurin

"Now we can see the Russian trend in international fashion. And Russian...

Wendell Rodricks
Wendell Rodricks

"We should not compare India and the West. There are things we do that...

Jay Ramrakhiani
Occasions Elegance Wear

It is believed that by early 19th century, Varanasi weavers had moved away ...

Press Release

Press Release

Letter to Editor

Letter to Editor

RSS Feed

RSS Feed

Submit your press release on


editorial@fibre2fashion.com

Letter To Editor






(Max. 8000 char.)

Search Companies





SEARCH

news category


Related Categories:
May 2017

May 2017

Subscribe today and get the latest update on Textiles, Fashion, Apparel and so on.

SUBSCRIBE


Browse Our Archives

GO


E-News Insight
Subscribe Today and Get the
Latest News Update in Your Mail Box.
Advanced Search