Net sales up marginally at Unifi in Q1 FY'13

Net sales increased $2 million, or 1.1%, to $173 million for the September 2012 quarter compared to net sales of $171 million for the September 2011 quarter.

Highlights for the September 2012 quarter over prior year quarter results include:

• Adjusted earnings before interest, taxes, depreciation and amortization (Adjusted EBITDA) improved $5.7 million to $13.8 million;
• Volume improved 6.7% primarily due to recovery in our international operations;
• Gross profit improved $6.2 million as a result of volume and conversion margin improvements; and,
• Interest expense dropped $2.9 million as a result of the $44 million reduction in outstanding debt since September 2011 and significantly lower borrowing rates from the debt refinancing in May 2012.

Results for the quarter versus the prior year quarter were negatively impacted by a $3.8 million reduction in earnings from the Company's equity investment in Parkdale America, related primarily to softness in the cotton apparel market.

"I am pleased with the strong start to our fiscal year, especially in what remains an uncertain economy and a relatively flat retail unit sales environment," said Bill Jasper, Chairman and CEO of Unifi. "Our focus remains on execution and continuously improving the things we can control, such as cost, inventory management and process efficiency and flexibility improvements.  As a result of this focus, we are beginning our 2013 fiscal year with a healthy balance sheet and a flexible capital structure to support our current strategies."

Cash-on-hand as of September 23, 2012 was $12.6 million, an increase of $1.7 million compared to $10.9 million cash-on-hand as of June 24, 2012.  Total debt at the end of the September 2012 quarter was $120.0 million with a weighted average interest rate of 4.2%. 

"Although September 2012 was a strong quarter for the Company and business fundamentals remain positive, we are cautious about the rest of the fiscal year," said Ron Smith, Chief Financial Officer of Unifi.  "We are entering the holiday season with an uncertain retail forecast and are expecting an escalating raw material cost environment over the next few months, which will put temporary pressure on margins.  Nevertheless, we feel confident in the strength of our underlying business and anticipate continued improvements in our international businesses as we move through the fiscal year."

Unifi Inc.