Unifi boosted by improved market conditions

30 April 2010, Greensboro – Textured polyester and nylon producer Unifi yesterday reported improved sales and net income for its third fiscal quarter ended March 28, 2010 and increased gross profits for the first nine months. The company said net sales were positively impacted by improved market conditions across all of the company's key segments, as well as continued growth in Brazil.

The company reported net sales of $154.7 million for the third quarter of fiscal year 2010, an increase of $35.6 million or 29.9% compared to the prior year quarter and $12.4 million or 8.7% compared to the December 2009 quarter.

Net income was $0.8 million or $0.01 per share for the third quarter compared to a net loss of $33.0 million or $0.53 per share for the prior year quarter. Adjusted earnings before interest, taxes, depreciation and amortization (adjusted EBITDA) were $12.7 million for the third quarter, an improvement of $15.0 million compared to the prior year quarter. The company said that substantial year on year improvements in quarterly results were the result of significantly improved retail demand in apparel, furnishings and automotive, as the economic recovery continues, higher utilization levels across the regional supply chain, continued improvement in the Brazilian market and cost and efficiency improvements realized over the last year.

Compared to the prior year period, net sales for the first nine months of the 2010 fiscal year improved by $26.0 million or 6.3% to $439.8 million. The company reported net income of $5.2 million or $0.09 per share for the year-to-date period of fiscal year 2010 compared to a net loss of $42.7 million or $0.69 per share for the prior year period, and Adjusted EBITDA increased $27.4 million to $41.1 million.

Ron Smith, Chief Financial Officer for Unifi, said, "Higher utilization rates and overall operational improvements have contributed to increases in gross profit for the first nine months of the fiscal year. Our share gain efforts, as well as rising raw material costs, squeezed margins somewhat in the quarter, and we expect to regain those margins over the next few months."

"We are very pleased to be reporting profitability in each of the first three quarters of the fiscal year, especially in a recovering economic environment," said Bill Jasper, President and CEO of Unifi. "Our aggressive cost reductions and disciplined task-based improvement process continue to contribute significantly to our improved cost basis and the strength of our balance sheet. Our domestic business is improving, and Brazil continues to exceed projections. We will continue to focus on cash generation and deleveraging our balance sheet, while funding targeted growth opportunities in our global businesses."