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

US President Joe Biden. Pic: Shutterstock

Textiles | On 29th Jul 2021

Proposed amendments to raise US content in federal purchases announced

The United States has decided to raise US-made content in government...

Pic: Shutterstock

Apparel/Garments | On 29th Jul 2021

Uninterrupted supply chain crucial for Vietnam amid ongoing COVID wave

Ensuring that the supply chain of Vietnam is not interrupted amid the ...

Pic: Moschino

Fashion | On 29th Jul 2021

Italy’s Aeffe buys remaining 30% stake in Moschino for full ownership

Italian luxury fashion company Aeffe has acquired fashion house...

Interviews View All

Florian Heubrandner, Lenzing AG

Florian Heubrandner
Lenzing AG

Cannot see the world breaking away from cotton & polyester

Textile Industry, Head honchos

Textile Industry
Head honchos

Delay in adopting water sustainability both financially & environmentally...

Textile Industry, Head honchos

Textile Industry
Head honchos

The pandemic has reinstated need for organised retail spaces in Tier II...

Amanda Cioletti,

Amanda Cioletti

The entertainment/character segment lead as the largest sector for the...

Shyam Gupta,

Shyam Gupta

Established by <b>Shyam Gupta</b> in 1978, Gargee Designer's (GD) offers...

Abdullah Mohammad Saad Hossain,

Abdullah Mohammad Saad Hossain

Saad Group is a leading vertically integrated textile group in Bangladesh. ...

Pranesh Sridharan & Berndt Koll, Lenzing

Pranesh Sridharan & Berndt Koll
Lenzing

The Lenzing Group produces Lenzing Lyocell and Modal cellulosic fibres of...

Michael Jaenecke, Messe Frankfurt

Michael Jaenecke
Messe Frankfurt

From May 14 to 17, international exhibitors will present the entire...

Keith McMillen, Bebop Sensors

Keith McMillen
Bebop Sensors

Bebop Sensors' smart fabrics allows for a new level of interaction between ...

Vidur Adlakha & Riccardo Bennidini, La Fuori

Vidur Adlakha & Riccardo Bennidini
La Fuori

With an active presence in US, Italy and India, clothing brand La Fuori...

Sailesh Singhania, Sailesh Singhania Label

Sailesh Singhania
Sailesh Singhania Label

The Sailesh Singhania label was created to promote handwoven sarees and...

Suman Nathwani, Suman Nathwani

Suman Nathwani
Suman Nathwani

Designer <b>Suman Nathwani</b> talks about her journey of opening a...

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

Leave your Comments


July 2021

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


Advanced Search