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Sales volumes of Unifi grows 6% in Q4 FY 2019

Aug '19
Pic: Unifi
Pic: Unifi
Sales volumes of Unifi, one of world's leading innovators in recycled and synthetic yarns, grew 6 per cent in Q4 FY 2019 led by premium value-added (PVA) product sales in Asia. However, net sales in Q4 of fiscal 2019 decreased to $179.5 million, compared to $181.3 million in Q4 of fiscal 2018. Gross profit decreased from $23.9 million to $18.3 million.

Fiscal 2019 consisted of 53 weeks for the company's domestic operations, compared to 52 weeks in fiscal 2018. The sales volumes increased 7 per cent from fiscal 2018, led by PVA product sales in Asia. Net sales increased to $708.8 million, compared to $678.9 million. However, unfavourable foreign currency translation negatively impacted fiscal 2019 net sales by $21.4 million, said the company in a media statement.

"Despite the persistent headwinds we faced throughout fiscal 2019, we achieved our fourth quarter volume and profitability expectations, made progress towards revitalising our position in the Americas, and exited fiscal 2019 with momentum," said Tom Caudle, president & chief operating officer of Unifi. "Throughout a challenging fiscal 2019, we grew our top-line by 4 per cent, took aggressive steps to better align our cost structure, entered fiscal 2020 having achieved our goal to reduce our future SG&A by approximately 15 per cent from its prior annual run-rate, and made further commitment to the Americas by announcing our use of exclusive new texturing technology in the coming years. Overall, I am proud of our team as we remain focused on delivering long-term shareholder value, and our short-term initiatives continue to fuel resurgence for this unique global company."

Imports of polyester textured yarn from China and India – which increased approximately 79 per cent from calendar years 2013 to 2017 and continued to grow during calendar year 2018 – placed considerable pressure on margins in the US during fiscal 2019.

For fiscal 2020, the company expects high-single-digit percentage growth for sales volumes and mid-single-digit percentage growth for net sales from fiscal 2019;

"As we look to fiscal 2020, we remain optimistic. The combination of our ongoing growth efforts to drive our innovative and recycled portfolios globally and the deliberate and considerable reduction of our SG&A cost structure should provide meaningful improvement in our profitability, while further momentum on recent trade activity is expected to lift our domestic operations. Assuming a stable raw material cost environment for fiscal 2020, we are projecting continued top-line expansion, a doubling of operating income, substantial improvement in our effective tax rate and a significant increase in net income and Adjusted EBITDA," added Caudle.

In the fourth quarter of fiscal 2019, the company increased its reportable segments from three to four, primarily in connection with the growth of sales for the company's subsidiaries in Asia. The company is now reporting the Polyester, Nylon, Brazil and Asia Segments. (PC)

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