Unifi Announces First Quarter 2014 Results

                  Unifi Announces First Quarter 2014 Results

PR Newswire

GREENSBORO, N.C., Oct. 23, 2013

GREENSBORO, N.C., Oct. 23, 2013 /PRNewswire/ --Unifi, Inc. (NYSE: UFI) today
released preliminary operating results for the first quarter ended September
29, 2013 of its 2014 fiscal year. Net income for the September 2013 quarter
was $8.9 million, or $0.46 per share, compared to net income of $2.3 million,
or $0.11 per share, for the September 2012 quarter, reflecting gains from
improved margins, lower net interest expenses and higher earnings from the
Company's unconsolidated equity affiliates, which were only partially offset
by higher expenses for income taxes.

Highlights for the September 2013 quarter included:

  oAdjusted EBITDA improved to $14.5 million for the September 2013 quarter
    from $13.8 million for the September 2012 quarter;
  oDomestic gross margins improved significantly as a result of higher sales
    volumes, increased selling margins, and lower expenses for depreciation;
  oEarnings from the Company's unconsolidated equity affiliates increased
    $5.5 million in the current September quarter compared to the prior year
    quarter, primarily attributable to Parkdale America; and
  oThe Company used $5.8 million of excess cash flows from operations to
    repurchase 249,000 shares of the Company's common stock.

Although net sales decreased $4.2 million or 2.4% to $168.7 million for the
September 2013 quarter compared to net sales of $172.9 million for the
September 2012 quarter, net income increased by $6.6 million. The decline in
overall net sales reflects stronger domestic volumes which were offset by
declines in sales volumes for the Company's International Segment and the
negative effects of the weakened currency in Brazil.

"Improving year-over-year net income by $6.6 million during a quarter in which
we experienced a decline in net sales demonstrates the results of our focus on
driving financial improvement to our core business through lean manufacturing
initiatives, enriching our product mix, and deriving value from sustainability
based initiatives," said Bill Jasper, Chairman and CEO of Unifi. "The
positive operating results from the September 2013 quarter provide us with a
strong start to our 2014 fiscal year and have enabled us to fund the Company's
strategic growth opportunities and continue our share repurchases."

Cash-on-hand as of September 29, 2013 was $10.3 million, an increase of $1.6
million compared to $8.7 million cash-on-hand as of June 30, 2013. Total debt
at the end of the September 2013 quarter was $97.3 million, compared to $97.8
million at June 30, 2013, with a weighted average interest rate of 3.2%.

Roger Berrier, President and Chief Operating Officer of Unifi, added: "The
success of Repreve continues to drive our global mix enrichment strategy as we
provide recycled product solutions to brands and retailers. Our overall
business fundamentals remain positive and we feel confident in the continued
strength of our underlying domestic performance, even against the backdrop of
an economy that remains uncertain and a sluggish retail environment. We
expect operating conditions in Brazil and China to improve and become more
favorable as we move through the 2014 fiscal year, which will help yield
better results from our international businesses."

The Company will provide additional commentary regarding its first quarter
results during its earnings conference call on October 24, 2013, at 8:30 a.m.
Eastern Time. The call will be webcast live at http://investor.unifi.com/ and
will be available for replay approximately two hours after the live event and
will be archived for approximately twelve months. Additional supporting
materials and information related to the call, as well as the Company's
financial results for the September 2013 quarter, will also be available at

Unifi, Inc. (NYSE: UFI) is a multi-national manufacturing company that
produces and sells textured and other processed yarns designed to meet
customer specifications, and premier value-added ("PVA") yarns with enhanced
performance characteristics. Unifi maintains one of the textile industry's
most comprehensive polyester and nylon product offerings. Unifi enhances
demand for its products, and helps others in creating a more effective textile
industry supply chain, through the development and introduction of branded
yarns that provide unique performance, comfort and aesthetic advantages. In
addition to its flagship REPREVE^® products – a family of eco-friendly yarns
made from recycled materials – key Unifi brands include: SORBTEK^®, REFLEXX^®,
AIO^® - all-in-one performance yarns, SATURA^®, AUGUSTA^® A.M.Y.^®, MYNX^® UV,
MICROVISTA^® and MICROVISTA^®. Unifi's yarns are readily found in the
products of major brands in the apparel, hosiery, automotive, home
furnishings, industrial and other end use markets. For more information about
Unifi, visit www.unifi.com; to learn more about REPREVE^®, visit

Financial Statements to Follow

(amounts in thousands, except share and per share amounts)
                                             September 29, 2013  June 30, 2013
Cash and cash equivalents                    $      10,310       $   8,755
Receivables, net                                    90,097           98,392
Inventories                                         114,432          110,667
Income taxes receivable                             396              1,388
Deferred income taxes                               1,996            1,715
Other current assets                                8,668            5,913
Total current assets                                225,899          226,830
Property, plant and equipment, net                  115,574          115,164
Deferred income taxes                               2,413            2,196
Intangible assets, net                              7,340            7,772
Investments in unconsolidated affiliates            96,888           93,261
Other non-current assets                            5,149            10,243
Total assets                                 $      453,263      $   455,466
Accounts payable                             $      40,275       $   45,544
Accrued expenses                                    13,576           18,485
Income taxes payable                                1,879            851
Current portion of long-term debt                   1,316            65
Total current liabilities                           57,046           64,945
Long-term debt                                      96,023           97,688
Other long-term liabilities                         5,250            5,053
Deferred income taxes                               1,831            1,300
Total liabilities                                   160,150          168,986
Commitments and contingencies
Common stock, $0.10 par (500,000,000 shares
19,289,087 and 19,205,209 shares                    1,929            1,921
Capital in excess of par value                      39,806           36,375
Retained earnings                                   255,724          252,112
Accumulated other comprehensive loss                (5,667)          (5,500)
Total Unifi, Inc. shareholders' equity              291,792          284,908
Non-controlling interest                            1,321            1,572
Total shareholders' equity                          293,113          286,480
Total liabilities and shareholders' equity   $      453,263      $   455,466

(amounts in thousands, except per share amounts)
                                        For The Three Months Ended
                                        September 29, 2013  September 23, 2012
Net sales                               $      168,669      $      172,900
Cost of sales                                  148,684             154,880
Gross profit                                   19,985              18,020
Selling, general and administrative            10,114              11,147
(Benefit) provision for bad debts              (38)                110
Other operating expense, net                   1,624               581
Operating income                               8,285               6,182
Interest income                                (1,214)             (124)
Interest expense                               1,252               1,444
Loss on extinguishment of debt                 —                   242
Equity in earnings of unconsolidated           (6,123)             (671)
Income before income taxes                     14,370              5,291
Provision for income taxes                     5,751               3,233
Net income including non-controlling           8,619               2,058
Less: net (loss) attributable to               (251)               (236)
non-controlling interest
Net income attributable to Unifi, Inc   $      8,870        $      2,294
Net income attributable to Unifi, Inc.
per common share:
Basic                                   $      0.46         $      0.11
Diluted                                 $      0.44         $      0.11

(amounts in thousands)
                                        For The Three Months Ended
                                        September 29, 2013  September 23, 2012
Cash and cash equivalents at beginning  $     8,755         $     10,886
of year
Operating activities:
Net income including non-controlling          8,619               2,058
Adjustments to reconcile net income
including non-controlling interest to
net cash provided by operating
Equity in earnings of unconsolidated          (6,123)             (671)
Dividends received from unconsolidated        2,559               2,224
Depreciation and amortization expense         4,408               6,517
Loss on extinguishment of debt                —                   242
Non-cash compensation expense                 414                 621
Excess tax benefit on stock-based             (1,318)             —
compensation plans
Deferred income taxes                         17                  1,418
Other                                         3,042               23
Changes in assets and liabilities,
excluding effects of foreign currency
Receivables, net                              8,185               3,602
Inventories                                   (3,981)             (4,003)
Other current assets and income taxes         1,517               600
Accounts payable and accrued expenses         (10,102)            (7,204)
Income taxes payable                          2,073               (1,046)
Net cash provided by operating                9,310               4,381
Investing activities:
Capital expenditures                          (5,691)             (1,091)
Proceeds from sale of assets                  245                 36
Proceeds from other investments               141                 —
Other                                         (36)                (41)
Net cash used in investing activities         (5,341)             (1,096)
Financing activities:
Proceeds from revolving credit                32,100              17,500
Payments on revolving credit                  (39,700)            (14,000)
Proceeds from term loan                       7,200               —
Payments on term loans                        —                   (6,450)
Payments of debt financing fees               (3)                 (46)
Proceeds from related party term loan         —                   1,250
Repurchase and retirement of common           (5,768)             —
Proceeds from stock option exercises          2,373               —
Contributions from non-controlling            —                   200
Excess tax benefit on stock-based             1,318               —
compensation plans
Other                                         (15)                (9)
Net cash used in financing activities         (2,495)             (1,555)
Effect of exchange rate changes on            81                  (24)
cash and cash equivalents
Net increase in cash and cash                 1,555               1,706
Cash and cash equivalents at end of     $     10,310        $     12,592

(amounts in thousands)
The reconciliations of Net income attributable to Unifi, Inc. to EBITDA,
Adjusted EBITDA including equity affiliates and Adjusted EBITDA are as
                                  For the Three Months Ended
                                  September 29, 2013      September 23, 2012
Net income attributable to        $        8,870          $       2,294
Unifi, Inc
Provision for income taxes                 5,751                  3,233
Interest expense, net                      38                     1,320
Depreciation and amortization              4,269                  6,333
EBITDA                                     18,928                 13,180
Loss on extinguishment of debt             —                      242
Non-cash compensation expense              414                    621
Other                                      1,262                  453
Adjusted EBITDA including                  20,604                 14,496
equity affiliates
Equity in earnings of                      (6,123)                (671)
unconsolidated affiliates
Adjusted EBITDA                   $        14,481         $       13,825


Included in this presentation are certain non-GAAP financial measures designed
to complement the financial information presented in accordance with generally
accepted accounting principles in the United States of America ("GAAP")
because management believes such measures are useful to investors. These
non-GAAP financial measures are Earnings Before Interest, Taxes, Depreciation
and Amortization ("EBITDA"), Adjusted EBITDA including equity affiliates, and
Adjusted EBITDA.

EBITDA represents net income or loss attributable to Unifi, Inc. before net
interest expense, income tax expense, and depreciation and amortization
expense (excluding interest portion of amortization). Adjusted EBITDA
including equity affiliates represents EBITDA adjusted to exclude non-cash
compensation expense, gains or losses on extinguishment of debt, loss on
previously held equity interest, and certain other adjustments. Such other
adjustments include operating expenses for Repreve Renewables, restructuring
charges and start-up costs, gains or losses on sales or disposals of property,
plant and equipment, currency and derivative gains or losses, certain employee
healthcare expenses, and other operating or non-operating income or expense
items necessary to understand and compare the underlying results of the
Company. Adjusted EBITDA represents Adjusted EBITDA including equity
affiliates adjusted to exclude equity in earnings and losses of unconsolidated
affiliates. The Company may, from time to time, change the items included
within Adjusted EBITDA.

EBITDA, Adjusted EBITDA including equity affiliates and Adjusted EBITDA are
alternative views of performance used by management, and we believe that
investors' understanding of our performance is enhanced by disclosing these
performance measures. Management uses Adjusted EBITDA: (i) as a measurement
of operating performance because it assists us in comparing our operating
performance on a consistent basis, as it removes the impact of (a) items
directly related to our asset base (primarily depreciation and amortization)
and (b) items that we would not expect to occur as a part of our normal
business on a regular basis; (ii) for planning purposes, including the
preparation of our annual operating budget; (iii) as a valuation measure for
evaluating our operating performance and our capacity to incur and service
debt, fund capital expenditures and expand our business; and (iv) as one
measure in determining the value of other acquisitions and dispositions.
Adjusted EBITDA is also a key performance metric utilized in the determination
of variable compensation.

We believe that the use of EBITDA, Adjusted EBITDA including equity affiliates
and Adjusted EBITDA as operating performance measures provides investors and
analysts with a measure of operating results unaffected by differences in
capital structures, capital investment cycles, and ages of related assets,
among otherwise comparable companies. We also believe Adjusted EBITDA is an
appropriate supplemental measure of debt service capacity, because cash
expenditures on interest are, by definition, available to pay interest, and
tax expense is inversely correlated to interest expense because tax expense
decreases as deductible interest expense increases; and depreciation and
amortization are non-cash charges. Equity in earnings and losses of
unconsolidated affiliates is excluded because such earnings or losses do not
reflect our operating performance. The other items excluded from Adjusted
EBITDA are excluded in order to better reflect the performance of our
continuing operations.


In evaluating EBITDA, Adjusted EBITDA including equity affiliates, and
Adjusted EBITDA, you should be aware that in the future, we may incur expenses
similar to the adjustments in this presentation. Our presentation of EBITDA,
Adjusted EBITDA including equity affiliates and Adjusted EBITDA should not be
construed as indicating that our future results will be unaffected by unusual
or non-recurring items. EBITDA, Adjusted EBITDA including equity affiliates,
and Adjusted EBITDA are not determined in accordance with GAAP and should not
be considered as substitutes for net income, operating income or any other
performance measures determined in accordance with GAAP or as an alternative
to cash flow from operating activities as a measure of our liquidity.

Each of our EBITDA, Adjusted EBITDA including equity affiliates, and Adjusted
EBITDA measures has limitations as an analytical tool, and you should not
consider it in isolation or as a substitute for analysis of our results as
reported under GAAP. Some of these limitations are:

  oit does not reflect our cash expenditures, future requirements for capital
    expenditures or contractual commitments;
  oit does not reflect changes in, or cash requirements for, our working
    capital needs;
  oit does not reflect the interest expense or the cash requirements
    necessary to service interest or to make payments on our debt;
  oalthough depreciation and amortization are non-cash charges, the assets
    being depreciated or amortized will often have to be replaced in the
    future, and our Adjusted EBITDA (or our Adjusted EBITDA including equity
    affiliates) measure does not reflect any cash requirements for such
  oit is not adjusted for all non-cash income or expense items that are
    reflected in our statements of cash flows;
  oit does not reflect the impact of earnings or charges resulting from
    matters we consider not indicative of our ongoing operations;
  oit does not reflect limitations on or costs related to transferring
    earnings from our subsidiaries to us; and
  oother companies in our industry may calculate this measure differently
    than we do, limiting its usefulness as a comparative measure.

Because of these limitations, EBITDA, Adjusted EBITDA including equity
affiliates, and Adjusted EBITDA should not be considered as a measure of
discretionary cash available to us to invest in the growth of our business or
as a measure of cash that will be available to us to meet our obligations,
including those under our outstanding debt obligations. You should compensate
for these limitations by relying primarily on our GAAP results and using these
measures only as supplemental information.


Certain statements included herein contain forward-looking statements within
the meaning of federal securities laws about the financial condition and
results of operations of Unifi, Inc. (the "Company") that are based on
management's beliefs, assumptions and expectations about our future economic
performance, considering the information currently available to management.
The words "believe," "may," "could," "will," "should," "would," "anticipate,"
"estimate," "project," "expect," "intend," "seek," "strive," and words of
similar import, or the negative of such words, identify or signal the presence
of forward-looking statements. These statements are not statements of
historical fact; they involve risk and uncertainties that may cause our actual
results, performance or financial condition to differ materially from the
expectations of future results, performance or financial condition that we
express or imply in any forward-looking statement.

Factors that could contribute to such differences include, but are not limited
to: the competitive nature of the textile industry and the impact of
worldwide competition; changes in the trade regulatory environment and
governmental policies and legislation; the availability, sourcing and pricing
of raw materials; general domestic and international economic and industry
conditions in markets where the Company competes, such as recession and other
economic and political factors over which the Company has no control; changes
in consumer spending, customer preferences, fashion trends and end-uses; the
financial condition of the Company's customers; the loss of a significant
customer; the success of the Company's strategic business initiatives; the
continuity of the Company's leadership; volatility of financial and credit
markets; the ability to service indebtedness and fund capital expenditures and
strategic initiatives; availability of and access to credit on reasonable
terms; changes in currency exchange rates, interest and inflation rates; the
ability to reduce production costs; the ability to protect intellectual
property; employee relations; the impact of environmental, health and safety
regulations; the operating performance of joint ventures and other equity
investments; and the accurate financial reporting of information from equity
method investees.

All such factors are difficult to predict, contain uncertainties that may
materially affect actual results and may be beyond our control. New factors
emerge from time to time, and it is not possible for management to predict all
such factors or to assess the impact of each such factor on the Company. Any
forward-looking statement speaks only as of the date on which such statement
is made, and we do not undertake any obligation to update any forward-looking
statement to reflect events or circumstances after the date on which such
statement is made, except as may be required by federal securities law. The
above and other risks and uncertainties are described in the Company's annual
report on Form 10-K, and additional risks or uncertainties may be described
from time to time in other reports filed by the Company with the Securities
and Exchange Commission pursuant to the Securities Exchange Act of 1934, as

SOURCE Unifi, Inc.

Website: http://www.unifi.com
Contact: James M. Otterberg, Chief Financial Officer, (336) 316-5424
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