Unifi Announces Third Quarter Results

Apr 26, 2001, 01:00 ET from Unifi, Inc.

    GREENSBORO, N.C., April 26 /PRNewswire/ -- Unifi, Inc. (NYSE:   UFI), today
 released operating results for its third quarter of fiscal year 2001.
     The Company announced a net loss before non-recurring charges of 13 cents
 per share for the quarter ended March 25, 2001.  Additionally, in a move to
 improve the Company's fixed cost structure, a one time pre-tax charge of $26.4
 million, or 40 cents per share on an after-tax basis, was taken in the quarter
 to cover recently announced consolidation and cost reduction plans.  This
 charge includes severance and employee related costs of $5.5 million,
 machinery and equipment write-offs from plant consolidations of $4.7 million
 and write-down of assets due to impairment of $16.2 million.  The total net
 loss for the quarter was $28.5 million or 53 cents per share compared to net
 income of $13.2 million or 23 cents per share for the prior year March
 quarter.
     Net sales for the third quarter decreased to $252.3 million compared to
 $319.3 million in the third quarter a year ago.  Global unit volumes were off
 16.1 percent compared to the prior year quarter.  Domestically, unit volumes
 were off 21.3 percent, including a 22.7 percent drop in nylon and 21.0 percent
 drop in polyester.  This decrease in sales is largely due to reduced demand
 for new orders as retailers continue to reduce inventory across all retail
 sectors, continued decline in consumer demand for sheer hosiery, and softer
 than expected sales in the automotive, seamless apparel, and home furnishing
 industries.
     Brian Parke, Unifi's chief executive officer said, "We're encouraged by
 the efforts made to control the magnitude of our operating loss considering
 the significant decline in unit volumes during the quarter, which is an
 indication of the strength of our day-to-day operations.  Unifi has a strong
 underlying business, and the plant consolidation and cost reduction moves that
 we made in the quarter will create the necessary foundation for long-term
 profitability.
     The consolidation charges taken in the March quarter will reduce the fixed
 cost components of our business and improve our margins going forward.  The
 $5.5 million charge for severance associated with the reduction of 750
 positions worldwide should reduce on-going annual employment related costs by
 $17.1 million in the U.S. and Europe.  During the quarter, we committed to
 discontinuing our manufacturing operations in our T-3 polyester texturing
 plant and automated storage retrieval warehouse, both in Yadkinville (N.C.),
 and our nylon covering plant in Stoneville (N.C.) to further reduce our
 operational costs."
     Parke continued, "In the quarter we continued our efforts across the
 company to strengthen our balance sheet in the face of a difficult operating
 environment.  We achieved significant results during the quarter, reducing our
 working capital by $49.9 million and paying-down our funded debt by $77.9
 million.  The debt retirement during the quarter was aided by the completion
 of a balance sheet restructuring at our equity affiliate Parkdale America,
 LLC., in which we received a distribution of $49.2 million while still
 retaining our 34% ownership position.  The moves we have made to strengthen
 our balance sheet will provide us needed financial flexibility and reduce our
 interest carrying costs."
     Parke also noted that the recent announcement by DuPont to close their
 Cape Fear manufacturing facility and the consolidation of production in the
 Kinston and Yadkinville plants would improve the Company's product mix and
 cost structure for partially oriented yarn (POY) manufactured under the
 alliance with DuPont.  This announcement puts us three months ahead of our
 original time estimate, thereby accelerating the expected benefits of the
 alliance.  As previously discussed, under terms of the alliance agreements,
 Unifi is expected to take a restructuring charge in the June quarter to cover
 its share of the costs of the closing of Cape Fear.  The Company intends to
 issue a separate press release within the next two weeks providing estimates
 of the restructuring charge and the benefits to be obtained from the alliance.
     Looking ahead to the fourth quarter, Parke said, "We do not anticipate
 polyester or nylon volumes to rebound quickly based on the projected continued
 weakness at retail.  There are also no signs of the dollar losing strength,
 which will continue to affect our ability to export.  Until consumer spending
 levels for apparel, home furnishings and automotives improve, we will continue
 to realize a negative impact.  Based on anticipated volumes and our improved
 cost structure, net per share performance from normal operating activities,
 before the affects of the alliance restructuring referred to in the preceding
 paragraph, for the fourth quarter of fiscal 2001 is projected to be a net loss
 in the range of 6 cents to 12 cents per share."
     Unifi is the world's largest producer and processor of textured yarns.
 Its primary business is the texturing, dyeing, twisting, covering, and beaming
 of multi-filament polyester and nylon yarns.  Unifi's textured yarns are found
 in home furnishings, apparel and industrial fabrics, automotive, upholstery,
 hosiery, and sewing thread.
     Financial Statements to Follow
 
 
 
     UNIFI, INC. CONSOLIDATED SALES AND EARNINGS      (In Thousands Except Per
     (UNAUDITED)                                                Share Data)
 
                           For the Quarter Ended   For the Year to Date Ended
                           March 25,     March 26,    March 25,     March 26,
                             2001          2000         2001           2000
 
     Net Sales             $252,255      $319,302    $ 864,550      $941,605
     Cost of Goods Sold     236,280       276,432      782,875       822,734
     S G & A                 15,732        14,645       49,654        43,071
     Interest Expense         7,272         7,522       24,062        22,474
     Interest Income           (137)         (590)      (1,949)       (2,122)
     Other (Income) Expense   3,136           130       10,506           995
     Equity in (Earnings)
      Losses of Unconsolidated
      Affiliates             (2,008)       (2,321)        (200)        2,907
     Minority Interest
      Expense                   152         2,380        5,634         7,184
     Non-Recurring Charges   26,409            --       26,409            --
 
     Income Before Income
      Taxes                 (34,581)       21,104      (32,441)       44,362
     Income Tax Expense
      (Benefit)              (6,033)        7,868       (3,348)       17,621
 
     Net Income (Loss)     $(28,548)      $13,236    $ (29,093)      $26,741
 
     Diluted Net Income
      (Loss) Per Share       $(0.53)        $0.23       $(0.54)        $0.45
 
     Average Diluted Shares
      Outstanding            53,666        58,694       53,943        59,187
 
     Depreciation and
      Amortization Included
       Above                $22,166       $23,908      $66,674       $67,189
 
 
 
     UNIFI, INC. CONSOLIDATED BALANCE SHEET                    (In Thousands)
     (UNAUDITED)
 
                                                 March 25, 2001  June 25, 2000
     Assets
     Cash and Cash Equivalents                       $ 16,073        $18,778
     Accounts Receivable, Net                         162,926        214,001
     Inventories                                      136,934        147,640
     Other Current Assets                               5,891          2,958
      Total Current Assets                            321,824        383,377
 
     Net Property, Plant and Equipment                620,116        658,387
     Investment in Equity Affiliates                  172,083        208,918
     Other Noncurrent Assets                          104,387        104,082
                                                   $1,218,410     $1,354,764
     Liabilities and Shareholders' Equity
     Current Notes Payable                           $ 15,794      $ 217,308
     Accounts Payable                                  92,708         97,875
     Accrued Expenses                                  37,337         50,160
     Income Taxes Payable                                 862          2,430
      Total Current Liabilities                       146,701        367,773
 
     Long-Term Debt and Other Liabilities             405,671        261,830
     Minority Interests                                14,203         16,677
     Deferred Income Taxes                             85,506         86,046
     Shareholders' Equity                             566,329        622,438
                                                   $1,218,410     $1,354,764
 
     CAUTIONARY STATEMENT ON FORWARD-LOOKING STATEMENTS
     Certain statements included herein are "forward-looking statements" within
 the meaning of the federal securities laws.  Management cautions that forward-
 looking statements are not guarantees and that actual results could differ
 materially from those expressed or implied in the forward-looking statements.
 Important factors that could cause the actual results of operations or
 financial condition of the Company to differ include, but are not necessarily
 limited to, sourcing and pricing of raw materials, pressures on sales prices
 due to competition and economic condition, reliance on and financial viability
 of significant customers, technological advancements, employee relations,
 changes in construction spending and capital expenditures (including those
 related to unforeseen acquisition opportunities), continued availability of
 financial resources through financing arrangements and operations, negotiation
 of new or modifications of existing contracts for asset management and for
 property and equipment construction and acquisition, regulations governing tax
 laws, other governmental and authoritative bodies' policies and legislation,
 the continuation and the magnitude of the Company's common stock repurchase
 program  and proceeds received from the sale of assets held for disposal.  In
 addition to these representative factors, forward-looking statements could be
 impacted by general domestic and international economic and industry
 conditions in the markets where the Company competes, such as changes in
 currency exchange rates, interest and inflation rates, recession and other
 economic and political factors over which the Company has no control.
 Investors are also directed to consider the risks and uncertainties discussed
 in documents filed by the Company with the Securities and Exchange Commission.
 
                     MAKE YOUR OPINION COUNT -  Click Here
                http://tbutton.prnewswire.com/prn/11690X60925642
 
 

SOURCE Unifi, Inc.
    GREENSBORO, N.C., April 26 /PRNewswire/ -- Unifi, Inc. (NYSE:   UFI), today
 released operating results for its third quarter of fiscal year 2001.
     The Company announced a net loss before non-recurring charges of 13 cents
 per share for the quarter ended March 25, 2001.  Additionally, in a move to
 improve the Company's fixed cost structure, a one time pre-tax charge of $26.4
 million, or 40 cents per share on an after-tax basis, was taken in the quarter
 to cover recently announced consolidation and cost reduction plans.  This
 charge includes severance and employee related costs of $5.5 million,
 machinery and equipment write-offs from plant consolidations of $4.7 million
 and write-down of assets due to impairment of $16.2 million.  The total net
 loss for the quarter was $28.5 million or 53 cents per share compared to net
 income of $13.2 million or 23 cents per share for the prior year March
 quarter.
     Net sales for the third quarter decreased to $252.3 million compared to
 $319.3 million in the third quarter a year ago.  Global unit volumes were off
 16.1 percent compared to the prior year quarter.  Domestically, unit volumes
 were off 21.3 percent, including a 22.7 percent drop in nylon and 21.0 percent
 drop in polyester.  This decrease in sales is largely due to reduced demand
 for new orders as retailers continue to reduce inventory across all retail
 sectors, continued decline in consumer demand for sheer hosiery, and softer
 than expected sales in the automotive, seamless apparel, and home furnishing
 industries.
     Brian Parke, Unifi's chief executive officer said, "We're encouraged by
 the efforts made to control the magnitude of our operating loss considering
 the significant decline in unit volumes during the quarter, which is an
 indication of the strength of our day-to-day operations.  Unifi has a strong
 underlying business, and the plant consolidation and cost reduction moves that
 we made in the quarter will create the necessary foundation for long-term
 profitability.
     The consolidation charges taken in the March quarter will reduce the fixed
 cost components of our business and improve our margins going forward.  The
 $5.5 million charge for severance associated with the reduction of 750
 positions worldwide should reduce on-going annual employment related costs by
 $17.1 million in the U.S. and Europe.  During the quarter, we committed to
 discontinuing our manufacturing operations in our T-3 polyester texturing
 plant and automated storage retrieval warehouse, both in Yadkinville (N.C.),
 and our nylon covering plant in Stoneville (N.C.) to further reduce our
 operational costs."
     Parke continued, "In the quarter we continued our efforts across the
 company to strengthen our balance sheet in the face of a difficult operating
 environment.  We achieved significant results during the quarter, reducing our
 working capital by $49.9 million and paying-down our funded debt by $77.9
 million.  The debt retirement during the quarter was aided by the completion
 of a balance sheet restructuring at our equity affiliate Parkdale America,
 LLC., in which we received a distribution of $49.2 million while still
 retaining our 34% ownership position.  The moves we have made to strengthen
 our balance sheet will provide us needed financial flexibility and reduce our
 interest carrying costs."
     Parke also noted that the recent announcement by DuPont to close their
 Cape Fear manufacturing facility and the consolidation of production in the
 Kinston and Yadkinville plants would improve the Company's product mix and
 cost structure for partially oriented yarn (POY) manufactured under the
 alliance with DuPont.  This announcement puts us three months ahead of our
 original time estimate, thereby accelerating the expected benefits of the
 alliance.  As previously discussed, under terms of the alliance agreements,
 Unifi is expected to take a restructuring charge in the June quarter to cover
 its share of the costs of the closing of Cape Fear.  The Company intends to
 issue a separate press release within the next two weeks providing estimates
 of the restructuring charge and the benefits to be obtained from the alliance.
     Looking ahead to the fourth quarter, Parke said, "We do not anticipate
 polyester or nylon volumes to rebound quickly based on the projected continued
 weakness at retail.  There are also no signs of the dollar losing strength,
 which will continue to affect our ability to export.  Until consumer spending
 levels for apparel, home furnishings and automotives improve, we will continue
 to realize a negative impact.  Based on anticipated volumes and our improved
 cost structure, net per share performance from normal operating activities,
 before the affects of the alliance restructuring referred to in the preceding
 paragraph, for the fourth quarter of fiscal 2001 is projected to be a net loss
 in the range of 6 cents to 12 cents per share."
     Unifi is the world's largest producer and processor of textured yarns.
 Its primary business is the texturing, dyeing, twisting, covering, and beaming
 of multi-filament polyester and nylon yarns.  Unifi's textured yarns are found
 in home furnishings, apparel and industrial fabrics, automotive, upholstery,
 hosiery, and sewing thread.
     Financial Statements to Follow
 
 
 
     UNIFI, INC. CONSOLIDATED SALES AND EARNINGS      (In Thousands Except Per
     (UNAUDITED)                                                Share Data)
 
                           For the Quarter Ended   For the Year to Date Ended
                           March 25,     March 26,    March 25,     March 26,
                             2001          2000         2001           2000
 
     Net Sales             $252,255      $319,302    $ 864,550      $941,605
     Cost of Goods Sold     236,280       276,432      782,875       822,734
     S G & A                 15,732        14,645       49,654        43,071
     Interest Expense         7,272         7,522       24,062        22,474
     Interest Income           (137)         (590)      (1,949)       (2,122)
     Other (Income) Expense   3,136           130       10,506           995
     Equity in (Earnings)
      Losses of Unconsolidated
      Affiliates             (2,008)       (2,321)        (200)        2,907
     Minority Interest
      Expense                   152         2,380        5,634         7,184
     Non-Recurring Charges   26,409            --       26,409            --
 
     Income Before Income
      Taxes                 (34,581)       21,104      (32,441)       44,362
     Income Tax Expense
      (Benefit)              (6,033)        7,868       (3,348)       17,621
 
     Net Income (Loss)     $(28,548)      $13,236    $ (29,093)      $26,741
 
     Diluted Net Income
      (Loss) Per Share       $(0.53)        $0.23       $(0.54)        $0.45
 
     Average Diluted Shares
      Outstanding            53,666        58,694       53,943        59,187
 
     Depreciation and
      Amortization Included
       Above                $22,166       $23,908      $66,674       $67,189
 
 
 
     UNIFI, INC. CONSOLIDATED BALANCE SHEET                    (In Thousands)
     (UNAUDITED)
 
                                                 March 25, 2001  June 25, 2000
     Assets
     Cash and Cash Equivalents                       $ 16,073        $18,778
     Accounts Receivable, Net                         162,926        214,001
     Inventories                                      136,934        147,640
     Other Current Assets                               5,891          2,958
      Total Current Assets                            321,824        383,377
 
     Net Property, Plant and Equipment                620,116        658,387
     Investment in Equity Affiliates                  172,083        208,918
     Other Noncurrent Assets                          104,387        104,082
                                                   $1,218,410     $1,354,764
     Liabilities and Shareholders' Equity
     Current Notes Payable                           $ 15,794      $ 217,308
     Accounts Payable                                  92,708         97,875
     Accrued Expenses                                  37,337         50,160
     Income Taxes Payable                                 862          2,430
      Total Current Liabilities                       146,701        367,773
 
     Long-Term Debt and Other Liabilities             405,671        261,830
     Minority Interests                                14,203         16,677
     Deferred Income Taxes                             85,506         86,046
     Shareholders' Equity                             566,329        622,438
                                                   $1,218,410     $1,354,764
 
     CAUTIONARY STATEMENT ON FORWARD-LOOKING STATEMENTS
     Certain statements included herein are "forward-looking statements" within
 the meaning of the federal securities laws.  Management cautions that forward-
 looking statements are not guarantees and that actual results could differ
 materially from those expressed or implied in the forward-looking statements.
 Important factors that could cause the actual results of operations or
 financial condition of the Company to differ include, but are not necessarily
 limited to, sourcing and pricing of raw materials, pressures on sales prices
 due to competition and economic condition, reliance on and financial viability
 of significant customers, technological advancements, employee relations,
 changes in construction spending and capital expenditures (including those
 related to unforeseen acquisition opportunities), continued availability of
 financial resources through financing arrangements and operations, negotiation
 of new or modifications of existing contracts for asset management and for
 property and equipment construction and acquisition, regulations governing tax
 laws, other governmental and authoritative bodies' policies and legislation,
 the continuation and the magnitude of the Company's common stock repurchase
 program  and proceeds received from the sale of assets held for disposal.  In
 addition to these representative factors, forward-looking statements could be
 impacted by general domestic and international economic and industry
 conditions in the markets where the Company competes, such as changes in
 currency exchange rates, interest and inflation rates, recession and other
 economic and political factors over which the Company has no control.
 Investors are also directed to consider the risks and uncertainties discussed
 in documents filed by the Company with the Securities and Exchange Commission.
 
                     MAKE YOUR OPINION COUNT -  Click Here
                http://tbutton.prnewswire.com/prn/11690X60925642
 
 SOURCE  Unifi, Inc.