Unifi sales rise; will open recycling center in early May
Unifi Inc released preliminary operating results for the quarter ended December 26, 2010. The Company reported net income for its second quarter of the 2011 fiscal year of $5.4 million, or $0.27 per share, compared to net income of $2.0 million, or $0.10 per share, for the prior year quarter ended December 27, 2009. Net sales increased $19 million, or 13 percent, to $161 million for the December 2010 quarter compared to net sales of $142 million for the prior year quarter. Highlights for the quarter include:
• The quarter over prior year quarter increase in net sales was primarily a result of improvement across substantially all of the Company's global operations as the economic recovery continues to strengthen;
• Operating results and working capital improvements resulted in a $7 million increase in cash-on-hand during the quarter; and,
• Adjusted earnings before income taxes, depreciation and amortization (adjusted EBITDA) increased $2.4 million over the prior year December quarter to $15.7 million.
The Company reported net income of $15.6 million, or $0.78 per share, for the first six months of fiscal year 2011 compared to net income of $4.4 million, or $0.22 per share, for the prior year period. Net sales increased $50 million, or 17 percent, to $335 million for the first half of the fiscal year compared to net sales of $285 million for the prior year period. Adjusted EBITDA for the first half of fiscal year 2011 was $34.1 million compared to $28.4 million for the prior year period.
"We are pleased with the Company's performance during the first half of the 2011 fiscal year and are looking forward to positive impacts from the strategic capital expenditures made over the past six months," said Bill Jasper, President and CEO of Unifi. "Our plant in Central America opened in December and is now fully operational at high capacity utilization. The Company also expects to celebrate the grand opening of our recycling center in early May, providing a secure, high-quality source of raw materials and creating new growth opportunities for our Repreve products."
Ron Smith, Chief Financial Officer of Unifi, said, "The Company continues to maintain a solid balance sheet and excellent liquidity, as a result of strong operating results and working capital reductions. We improved cash-on-hand in the quarter, despite the payment of semi-annual interest on our outstanding notes and significant capital expenditures in support of our strategic growth initiatives. Going forward, the Company plans to utilize the strength of our balance sheet and operating results to deleverage and reduce our interest carrying costs.
“Over the next couple of years, we plan to use excess operating cash-on-hand and a limited amount of borrowings under our revolving credit facility to pay down significant portions of our 11.5% senior secured notes due May 2014. We initiated this strategy on January 11, 2011, when we announced that we were calling for the redemption of $30 million of the notes at a redemption price of 105.75% of the principal amount of the redeemed notes, to be effective February 16, 2011."