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Profits at Unifi post smart turnaround in Q2FY'13
23
Jan '13
Unifi, Inc. released preliminary operating results for its second fiscal quarter ended December 23, 2012.  The Company reported net income of $2.4 million, or $0.12 per share, compared to a net loss of $7.6 million, or $0.38 per share, for the prior year fiscal quarter ended December 25, 2011.  Net sales increased $5.0 million, or 3.0%, to $172 million for the December 2012 quarter, compared to net sales of $167 million for the December 2011 quarter. 
 
Highlights for the December 2012 quarter over prior year quarter results include the following:
-Adjusted earnings before interest, taxes, depreciation and amortization (Adjusted EBITDA) improved $4.8 million to $12.2 million;
-Gross profit improved $5.8 million as a result of volume growth in each of the Company's operating segments;
-Conversion margins improved as a result of the increased volumes in the Company's premier value-added portfolio; and
-Interest expense decreased $2.9 million as a result of the continuing execution of the Company's deleveraging strategy. 
 
The Company reported net income of $4.7 million, or $0.23 per share, for the six months ended December 23, 2012, compared to a net loss of $7.3 million, or $0.36 per share, for the prior year period.  Net sales increased $6.8 million, or 2.0%, to $345 million for the first six months of fiscal year 2013 compared to net sales of $338 million for the prior year period.  
 
Results for the first six months of fiscal 2013 were negatively impacted by a $3.8 million reduction in earnings from the Company's equity investment in Parkdale America, caused by margin pressures related to the softness in the cotton apparel market and differences in the recognition of earnings under the Farm Bill's economic adjustment payments program.
 
"The results in the current quarter reflect the Company's ability to drive financial improvement in our core business through disciplined process improvement across all of our operating segments and the success of our mix enrichment strategy domestically," said Bill Jasper, Chairman and CEO of Unifi.  "Higher capacity utilization rates and moderating raw materials pricing compared to the prior year quarter resulted in lower operating costs and improved conversion margins.  Although we are encouraged that the U.S. economy continued to grow at a modest pace during the December 2012 quarter, we will continue to closely manage our operating rates and inventory in order to respond quickly to any changes in retail demand."
 
Cash-on-hand as of December 23, 2012 was $15.2 million, an increase of $4.3 million compared to $10.9 million cash-on-hand as of June 24, 2012.  Total debt at the end of the December 2012 quarter was $106.7 million.


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