UNIFI INC - FORM 8-K - EX-99.2 - January 7, 2011

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8-K - FORM 8-K - UNIFI INCg25715e8vk.htm
EX-99.4 - EX-99.4 - UNIFI INCg25715exv99w4.htm
EX-99.3 - EX-99.3 - UNIFI INCg25715exv99w3.htm
EX-23.1 - EX-23.1 - UNIFI INCg25715exv23w1.htm
EX-99.1 - EX-99.1 - UNIFI INCg25715exv99w1.htm
EX-99.5 - EX-99.5 - UNIFI INCg25715exv99w5.htm
Exhibit 99.2
Part II.
Item 6. Selected Financial Data
                                         
    June 27, 2010     June 28, 2009     June 29, 2008     June 24, 2007     June 25, 2006  
    (52 Weeks)     (52 Weeks)     (53 Weeks)     (52 Weeks)     (52 Weeks)  
    (Amounts in thousands, except per share date)  
Summary of Operations:
                                        
Net sales
   $ 616,753     $ 553,663     $ 713,346     $ 690,308     $ 738,665  
Cost of sales
     545,253       525,157       662,764       651,911       692,225  
Restructuring charges (recoveries)
     739       91       4,027       (157 )     (254 )
Write down of long-lived assets (1)
     100       350       2,780       16,731       2,366  
Goodwill impairment (2)
     —       18,580       —       —       —  
Selling, general and administrative expenses
     46,183       39,122       47,572       44,886       41,534  
Provision for bad debts
     123       2,414       214       7,174       1,256  
Other operating (income) expense, net
     (1,033 )     (5,491 )     (6,427 )     (2,601 )     (1,466 )
 
Non-operating (income) expense:
                                        
Interest income
     (3,125 )     (2,933 )     (2,910 )     (3,187 )     (6,320 )
Interest expense
     21,889       23,152       26,056       25,518       19,266  
(Gain) loss on extinguishment of debt (3)
     (54 )     (251 )     —       25       2,949  
Equity in (earnings) losses of unconsolidated affiliates
     (11,693 )     (3,251 )     (1,402 )     4,292       (825 )
Write down of investment in unconsolidated affiliates (4)
     —       1,483       10,998       84,742       —  
 
                              
 
Income (loss) from continuing operations before income taxes
     18,371       (44,760 )     (30,326 )     (139,026 )     (12,066 )
Provision (benefit) for income taxes
     7,686       4,301       (10,949 )     (21,769 )     301  
 
                              
Income (loss) from continuing operations
     10,685       (49,061 )     (19,377 )     (117,257 )     (12,367 )
Income from discontinued operations, net of tax
     —       65       3,226       1,465       360  
 
                              
Net income (loss)
   $ 10,685     $ (48,996 )   $ (16,151 )   $ (115,792 )   $ (12,007 )
 
                              
 
                                        
Per Share of Common Stock: (basic)*
                                        
Income (loss) from continuing operations
   $ .53     $ (2.38 )   $ (.96 )   $ (6.26 )   $ (.71 )
Income from discontinued operations, net of tax
     —       —       .16       .08       .02  
 
                              
Net income (loss)
   $ .53     $ (2.38 )   $ (.80 )   $ (6.18 )   $ (.69 )
 
                              
 
                                        
Per Share of Common Stock: (diluted)*
                                        
Income (loss) from continuing operations
   $ .52     $ (2.38 )   $ (.96 )   $ (6.26 )   $ (.71 )
Income from discontinued operations, net of tax
     —       —       .16       .08       .02  
 
                              
Net income (loss)
   $ .52     $ (2.38 )   $ (.80 )   $ (6.18 )   $ (.69 )
 
                              
 
                                        
Balance Sheet Data:
                                        
Working capital
   $ 174,464     $ 175,808     $ 186,817     $ 196,808     $ 187,731  
Gross property, plant and equipment
     747,857       744,253       855,324       913,144       914,283  
Total assets
     504,465       476,932       591,531       665,953       737,148  
Notes payable, long-term debt and other obligations (3)
     166,253       182,707       205,855       238,222       203,791  
Shareholders’ equity (5)
     259,896       244,969       305,669       304,954       387,464  

 

 

 
*   All outstanding amounts and computations using such amounts have been retroactively adjusted to reflect the November 3, 2010 1-for-3 reverse stock split.
 
(1)   The Company performs impairment testing on its long-lived assets and assets held for sale periodically, or when an event or change in market conditions indicates that the Company may not be able to recover its investment in the long-lived asset in the normal course of business. As a result of this testing, the Company has determined certain assets had become impaired and recorded impairment charges accordingly.
 
(2)   In the third quarter of fiscal year 2009, the Company determined that it was appropriate to test the carrying value of its goodwill based on the decline in its market capitalization and difficult market conditions. The Company updated its cash flow forecasts based upon the latest market intelligence, its discount rate and its market capitalization values. The fair value of the domestic polyester reporting unit was determined based upon a combination of a discounted cash flow analysis and a market approach utilizing market multiples of “guideline” publicly traded companies. As a result of the findings, the Company determined that the goodwill was impaired and recorded an impairment charge of $18.6 million.
 
(3)   In April 2006, the Company tendered an offer for all of its outstanding 6.5% senior unsecured notes due May, 2008. During the fourth quarter of fiscal year 2006, the Company recorded a $2.9 million charge which was a combination of fees associated with the tender offer and the write off of unamortized bond issuance costs related to the notes. During the fourth quarter of fiscal year 2009, the Company utilized $8.8 million of restricted cash to tender at par for a portion of its 2014 notes. In addition, the Company repurchased and retired 2014 notes having a face value of $2 million in open market purchases. The net effect of the gain on this repurchase and the write-off of the respective unamortized issuance cost related to the $8.8 million and $2 million of 2014 notes resulted in a net gain of $0.3 million.
 
(4)   In fiscal year 2007, management determined that its investment in PAL was impaired and that the impairment was considered other than temporary. As a result, the Company recorded a non-cash impairment charge of $84.7 million to reduce the carrying value of its equity investment in PAL to $52.3 million. In fiscal year 2008, the Company determined that its investments in Unifi-SANS Technical Fibers, LLC (“USTF”) and Yihua Unifi Fibre Company Limited (“YUFI”) were impaired resulting in non-cash impairment charges of $4.5 million and $6.4 million, respectively. In fiscal year 2009, the Company recorded a non-cash impairment charge of $1.5 million to reduce its investment in YUFI in connection with selling the Company’s interest in YUFI to YCFC for $9 million.
 
(5)   There have been no cash dividends declared for the past five fiscal years.

 

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