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 http://investor.unifi.com/. 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 www.repreve.com. Financial Statements to Follow CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) (amounts in thousands, except share and per share amounts) September 29, 2013 June 30, 2013 ASSETS 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 LIABILITIES AND SHAREHOLDERS' EQUITY 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 authorized, 19,289,087 and 19,205,209 shares 1,929 1,921 outstanding) 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 CONDENSED CONSOLIDATED STATEMENTS OF INCOME (Unaudited) (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 expenses (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) affiliates 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 interest 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 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) (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 interest Adjustments to reconcile net income including non-controlling interest to net cash provided by operating activities: Equity in earnings of unconsolidated (6,123) (671) affiliates Dividends received from unconsolidated 2,559 2,224 affiliates 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 adjustments: Receivables, net 8,185 3,602 Inventories (3,981) (4,003) Other current assets and income taxes 1,517 600 receivable 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 activities 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 facilities Payments on revolving credit (39,700) (14,000) facilities 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) — stock Proceeds from stock option exercises 2,373 — Contributions from non-controlling — 200 interest 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 equivalents Cash and cash equivalents at end of $ 10,310 $ 12,592 period RECONCILIATIONS OF NET INCOME ATTRIBUTABLE TO UNIFI, INC. TO ADJUSTED EBITDA (Unaudited) (amounts in thousands) The reconciliations of Net income attributable to Unifi, Inc. to EBITDA, Adjusted EBITDA including equity affiliates and Adjusted EBITDA are as follows: 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 expense 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 NON-GAAP FINANCIAL MEASURES 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. NON-GAAP FINANCIAL MEASURES (continued) 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 replacements; 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. CAUTIONARY STATEMENT ON FORWARD-LOOKING STATEMENTS 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 amended. SOURCE Unifi, Inc. Website: http://www.unifi.com Contact: James M. Otterberg, Chief Financial Officer, (336) 316-5424
Unifi Announces First Quarter 2014 Results
Press spacebar to pause and continue. Press esc to stop.