Unifi continues to strengthen its balance sheet
Unifi, Inc. released preliminary operating results for its first quarter ended September 26, 2010.
The Company reported net income for the current quarter of $10.2 million or $0.17 per share compared to net income of $2.5 million or $0.04 per share for the prior year first quarter ended September 27, 2009. The Company also reported net sales of $174 million for the current quarter, an increase of $31 million or 22% compared to net sales of $143 million for the prior year September quarter. Additional highlights for the current quarter include:
• The Company continued to strengthen its balance sheet with the redemption of $15 million of its 11.5% Senior Secured Notes due 2014 (the "2014 Notes");
• The Company's 34% interest in Parkdale America LLC contributed $8.6 million of earnings in equity affiliates, a $6.3 million increase from the prior year September quarter; and,
• Adjusted earnings before income taxes, depreciation and amortization (adjusted EBITDA) were $18.4 million, a $3.3 million improvement over the prior year September quarter.
Ron Smith, Chief Financial Officer for Unifi, said, "Business conditions in the September quarter were generally favorable across our largest end use segments, and we saw continued strength in overall volume. Results were also positively impacted by operational efficiency gains and improved domestic conversion margins. It is important to note that while the underlying results of Parkdale America were strong, approximately $4.3 million of the Company's earnings in equity affiliates for the quarter is attributable to the timing of deferred revenue recognition by Parkdale America under the terms of the cotton rebate program."
Cash-on-hand as of September 26, 2010 was $26.3 million, a decrease of $16.4 million from June 27, 2010, as the Company used excess operating cash to call $15 million of the 2014 Notes. Since September 2009, total debt for the Company has been reduced by more than $21 million.
At the Company's annual meeting of its shareholders held earlier today, the Company's shareholders approved a proposal to amend the Company's Restated Certificate of Incorporation to effect a reverse stock split of the Company's common stock at a reverse stock split ratio of 1-for-3. The Board of Directors has authorized the Company to file a certificate of amendment to its Restated Certificate of Incorporation implementing the Reverse Stock Split, which is anticipated to be effective November 3, 2010. The financial statements included in this press release have not been adjusted to reflect this pending Reverse Stock Split.
"We are pleased to begin our 2011 fiscal year with a profitable quarter, driven by the strong results of our underlying business," said Bill Jasper, President and CEO of Unifi.
"Although uncertainty remains around consumer demand amid rising raw material prices, we are prepared to react quickly and are confident in our ability to recoup raw material cost increases we are experiencing. Going forward, we will continue to focus on what got us here - driving rigorous continuous operational improvement across all areas of the organization, maintaining market share in all of our markets, and investing in the growth of our premier value-added products, especially Repreve.