Unifi Getting It Together
By Staff -- Home Textiles Today, 4/25/2005
Greensboro, N.C. —Helped by sharply higher sales stemming from a recent acquisition, and putting behind it a fistful of restructuring charges that dogged the bottom line a year ago, yarn producer Unifi Inc. slashed its fourth quarter operating loss to just $1.9 million from $50 million during the same period a year ago in the midst of a sweeping overhaul of operations.
Steering toward a top-line turnaround, the polyester and nylon yarn producer boosted sales in the closing quarter 20.7 percent, to $208.3 million from $172.5 million, layering on more than $35 million in growth. Driving the sales growth was revenue from the Kinston, N.C., Invista polyester manufacturing operation acquired in September, 2004.
In a further strong assist, Unifi continued to hack away at costs, reducing overhead expenses 6.3 percent, to $11.7 million from $12.5 million a year ago, generating a cash savings of $791,000.
In a further big lift, inventories were pared 6.8 percent, to $142.8 million from $153.3 million, saving more than $10 million.
But acting as a drag on earnings, margins remained weak and eroded further. Average gross margin narrowed 110 basis points, or 1.1 percentage point, to 4.4 percent from 5.5 percent the preceding year. But helped by stronger sales, gross margin dollars thinned a slender 4.7 percent, to $9.1 million from $9.6 million.
| Qtr. 3/27 (x000) | 2005 | 2004 | % change |
| Sales | $208,318 | $172,526 | 20.7 |
| Oper. Income (EBIT) | (2,639) | (2,976) | — |
| Net income | (1,930)a | (49,992)a | — |
| Per share (diluted) | (0.04) | (0.96) | — |
| Average gross margin | 4.4% | 5.5% | — |
| SG&A expenses | 5.6% | 7.3% | — |
| 12 months | |||
| Sales | 596,946 | 502,558 | 18.8 |
| Oper. Income (EBIT) | (1,920) | (10,678) | — |
| Net income | (32,231)b | (63,774)b | — |
| Per share (diluted) | (0.62) | (1.22) | — |
| Average gross margin | 4.9% | 5.2% | — |
| SG&A expenses | 5.2% | 7.3% | — |
| (loss) a Fourth quarter results include $277,000 in miscellaneous income, compared with $2.6 million during the same period a year ago; $4.4 million in equity income from the company's share in an affiliate, compared with a $6.7 million loss a year ago; $53,000 in interest expense, compared with $4.8 million in minority interest income last year; an income-tax benefit of $896,000, compared with a year-before benefit of $33.6 million; an after-tax loss from discontinued operations of $1.4 million versus a $16.4 million loss the prior year; and a one-time gain of $1.3 million. Prior-year results include a $25.2 million charge for the write down of long lived assets; a goodwill impairment charge of $13.5 million; and a restructuring charge of $6 million. b 12-month results include miscellaneous expenses of $3.5 million, compared with miscellaneous income of $1.6 million last year; $6.2 million in equity income from the company's share in an affiliate, compared with a prior-year loss of $6.6 million; $444,000 in minority income, compared with $6.8 million last year; a $4.7 million income-tax benefit versus $23.5 million in 2004; and an after-tax loss from discontinued operations of $25.8 million versus $20.5 million the prior year. 2004 results include a $25.2 million write down of long lived assets; a $13.5 million goodwill impairment charge; and a $6.8 million restructuring charge. |
|||
