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Sales decline marginally at Unifi in FY'12

27
Jul '12
Unifi Inc. released preliminary operating results for its fourth quarter and fiscal year ended June 24, 2012. 

The Company reported net income for the fourth quarter of the 2012 fiscal year of $11.3 million, or $0.56 per share, compared to net income of $13.5 million, or $0.67 per share, for the prior year quarter ended June 26, 2011.  Net sales declined $8 million or 4.2% to $188 million for the June 2012 quarter compared to net sales of $196 million for the prior year June quarter.  Highlights for the quarter include:

  • Adjusted earnings before interest, taxes, depreciation and amortization (Adjusted EBITDA) of $14.1 million for the June 2012 quarter, which continues the improving trend;
  • Operating results and working capital improvements, resulting in $16.1 million of net cash generated by operating activities;
  • Strong growth continued in our domestic, premier value-added yarn portfolio; and
  • The successful completion of the refinancing of the Company's 2014 Senior Secured Notes, which is expected to result in approximately $9 million of annual interest savings.

Results for the current quarter were impacted by the early extinguishment of the 11.5% Senior Secured Notes, which were due 2014 and by the Company's entry into a new debt structure. The Company recorded a $2.7 million charge related to the early extinguishment of debt and also realized a one-time, non-cash income tax benefit of $6.0 million related to the release of certain income tax valuation reserves. 

Compared to the June 2011 quarter, earnings were also negatively impacted by a $6.9 million reduction in earnings from the Company's equity investments in unconsolidated affiliates.

Net sales for the 2012 fiscal year were $705 million, a decline of $8 million or 1.1% compared to the 2011 fiscal year.  The Company is reporting net income of $11.5 million, or $0.57 per share, for the 2012 fiscal year compared to net income of $25.1 million, or $1.25 per share, for the 2011 fiscal year. 

In addition to the items previously noted for the quarter, net income for the 2012 fiscal year was negatively impacted by raw material prices approaching historic highs in the first half of the fiscal year and volume pressure in Brazil, as a result of a temporary strengthening of the Real.

"We continued to see recovery in volume across all of our operating segments through the second half of the 2012 fiscal year, and margins improved due to the strength of our premier value-added products and polyester raw material cost subsiding from their historically high levels," said Bill Jasper, Chairman and CEO of Unifi. 

"We also realized converting cost benefits during the March and June quarters as higher utilization rates in our plants and our ongoing focus on cost improvement initiatives resulted in lower per unit manufacturing costs.  Looking forward, we are optimistic the improved performance will continue into our new fiscal year."


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