Unifi’s first quarter hits highest quarterly profit in seven years
-- Home Textiles Today, 10/29/2009 8:20:00 AM
Greensboro, N.C. -- Unifi Inc. today said it achieved its highest quarterly net income in seven years during the first quarter.
The multi-filament polyester and nylon textured yarn producer and processor’s profit for the first quarter – ended Sept. 27 – came in at $2.5 million, or 4 cents per share, compared to a loss of $676,000, or 1 cent per share, in last year's 1Q. The gain followed a loss of $6.3 million, or 10 cents per share, in the previous quarter, ended in June.
Revenues for the first quarter increased 2.2% over the June 2009 quarter to $143 million. But sales still remained $26 million below the September 2008 quarterly level of $169 million.
"Now that the negative impact of the inventory de-stocking across our supply chains seems to have abated, we are seeing the benefits of our unwavering focus on our core strategies,” said Bill Jasper, president and ceo. “These include our continuous improvement efforts to enhance margins, quality, and operating efficiencies, resulting in significantly improved operating performance, in spite of a 15% decline in year-over-year revenue."
Gross margin improved by 570 basis points. The company said its polyester inventory levels started to realign with retail demand in both apparel and home furnishings -- although ongoing sales of the latter "remain well below historic levels despite recent signs of improvement," Jasper said during a conference call.
But business has not fully recovered, noted Ron Smith, cfo.
“Although there was modest month-over-month improvements in retail sales of apparel and home furnishings, volumes into all of our major segments remain down year-over-year,” Smith explained.
Still, Unifi expects to see continued improvements in its North American sales over the next several quarters, “as consumer spending begins to return.” The company also expects the bottom line to benefit from cost and working capital improvements as well as market share gains.
“As a result, we are reaffirming our Adjusted EBITDA estimate for the 2010 fiscal year to be near the higher end of the guidance provided in our June earnings call, which was $50 million," he said.
Cash-on-hand at the end of the quarter was $55.7 million, up $13.0 million from the end of the prior quarter and up $35 million over the last 12 months. Total cash and cash equivalents at the end of September, including restricted cash, were $61.5 million, and total long-term debt was $185.6 million. Also by first quarter’s end, net debt for Unifi was $124 million, representing a reduction of more than $32 million from September 2008.
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