Attached files
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| EX-99.1 - PRESS RELEASE - UNIFI INC | dex991.htm |
| 8-K - FORM 8-K - UNIFI INC | d8k.htm |
 Unifi, Inc.
For the Year and
Fourth Quarter Ended
June 26, 2011
Conference Call
Exhibit 99.2 |
 2
Cautionary Statement
Unifi, Inc.
Fourth Qtr. Conf. Call
July 28, 2011
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 current
expectations, estimates and projections about the markets in which the
Company operates, as well as management's beliefs and
assumptions. Words such as "expects," "anticipates," "believes," "estimates," variations of such words and other similar
expressions are intended to identify such forward-looking
statements. These statements are not guarantees of future
performance and involve certain risks, uncertainties and assumptions,
which are difficult to predict. Therefore, actual outcomes
and results may differ materially from what is expressed or forecasted in, or implied by, such forward-looking
statements. Readers are cautioned not to place undue reliance on
these forward-looking statements, which reflect management's
judgment only as of the date hereof. The Company undertakes no obligation to update publicly any of these
forward-looking statements to reflect new information, future
events or otherwise. Factors that may cause actual outcome and results to differ materially
from those expressed in, or implied by, these forward-
looking statements include, but are not necessarily limited to,
availability, sourcing and pricing of raw materials, the success
of our subsidiaries, pressures on sales prices and volumes due to
competition and economic conditions, reliance on and financial
viability of significant customers, operating performance of joint ventures, alliances and other equity investments,
technological advancements, employee relations, changes in construction
spending, capital expenditures and long-term investments
(including those related to unforeseen acquisition opportunities), continued availability of financial resources
through financing arrangements and operations, outcomes of pending or
threatened legal proceedings, negotiation of new or
modifications of existing contracts for asset management and for
property and equipment construction and acquisition, regulations
governing tax laws, other governmental and authoritative bodies’ policies and legislation, and proceeds received
from the sale of assets held for disposal. In addition to these
representative factors, forward-looking statements could be
impacted by general domestic and international economic and industry
conditions in the markets where the Company competes, such as
changes in currency exchange rates, interest and inflation rates, recession and other economic and
political factors over which the Company has no control. Other
risks and uncertainties may be described from time to time in
the Company’s other reports and filings with the Securities and Exchange Commission. |
 3
Income Statement Highlights
(Amounts in Thousands, Except Percentages) (Unaudited)
Unifi, Inc.
Fourth Qtr. Conf. Call
July 28, 2011
Net sales
194,852
$
100.0%
176,960
$
100.0%
Gross profit
17,569
9.0%
18,248
10.3%
Selling, general and administrative expense
10,744
5.5%
11,615
6.6%
Operating profit
(1)
6,825
3.5%
6,633
3.7%
Interest expense
3,843
5,477
Equity in earnings of unconsolidated affiliates
(12,465)
(5,846)
Income from operations before income taxes
16,642
7,562
Net income
13,514
5,472
(1) Gross profit less Selling, general, and administrative
expense June 26, 2011
June 27, 2010
For the Quarters Ended |
 4
Income Statement Highlights
(Amounts in Thousands, Except Percentages) (Unaudited)
Unifi, Inc.
Fourth Qtr. Conf. Call
July 28, 2011
Net sales
707,838
$
100.0%
616,753
$
100.0%
Gross profit
72,960
10.3%
71,500
11.6%
Selling, general and administrative expense
42,967
6.1%
46,183
7.5%
Operating profit
(1)
29,993
4.2%
25,317
4.1%
Interest expense
19,190
21,889
Equity in earnings of unconsolidated affiliates
(24,352)
(11,693)
Income from operations before income taxes
32,422
18,371
Net income
25,089
10,685
(1) Gross profit less Selling, general, and administrative
expense June 26, 2011
June 27, 2010
For the Years Ended |
 5
Volume and Pricing Highlights
(Unaudited)
Unifi, Inc.
Fourth Qtr. Conf. Call
July 28, 2011
Volume
Price
Volume
Price
Polyester
(2.5%)
18.8%
7.0%
13.3%
Nylon
(14.4%)
6.8%
(2.1%)
1.5%
Consolidated
(4.0%)
14.1%
5.9%
8.9%
Volume
Price
Polyester
3.2%
7.5%
Nylon
1.8%
3.0%
Consolidated
3.1%
6.3%
Quarter over trailing quarter
June 26, 2011 vs. March 27, 2011
Quarter over quarter
Year over year
June 26, 2011 vs. June 27, 2010
June 26, 2011 vs. June 27, 2010
For the Quarters Ended
For the Quarters Ended
For the Years Ended |
 6
Balance Sheet Highlights
(Amounts in Thousands, Except Percentages) (Unaudited)
Unifi, Inc.
Fourth Qtr. Conf. Call
July 28, 2011
June 26,
March 27,
June 27,
2011
2011
2010
Cash
27,490
$
19,142
$
42,691
$
Short-Term Debt
10,341
$
335
$
15,327
$
Long-Term Debt
158,322
171,522
164,063
Total Debt
168,663
171,857
179,390
Net Debt
141,173
$
152,715
$
136,699
$
Accounts Receivable
100,177
$
104,665
$
91,243
$
Inventory
134,883
136,715
111,007
Accounts Payable
(42,842)
(48,352)
(40,662)
Accrued Expenses
(17,463)
(18,473)
(21,725)
Adjusted Working Capital
174,755
$
174,555
$
139,863
$
Quarterly Sales
194,852
$
178,164
$
176,960
$
Working Capital as a Percentage of Sales (1)
22%
24%
20%
(1) Adjusted Working Capital divided by annualized Quarterly
Sales |
 7
Equity Affiliates Highlights
(Amounts in Thousands) (Unaudited)
Unifi, Inc.
Fourth Qtr. Conf. Call
July 28, 2011
June 26, 2011
June 27, 2010
June 26, 2011
June 27, 2010
Earnings (Losses)
Parkdale America (34%)
12,047
$
5,534
$
22,655
$
11,605
$
Other
(363)
288
1,251
803
Intercompany Eliminations
781
24
446
(715)
Total
12,465
$
5,846
$
24,352
$
11,693
$
Distributions
Parkdale America (34%)
1,581
$
1,654
$
4,500
$
3,265
$
Other
-
-
1,400
-
Total
1,581
$
1,654
$
5,900
$
3,265
$
Quarters
Ended Years Ended |
 8
Adjusted EBITDA Reconciliation to Net Income
(Amounts in Thousands) (Unaudited)
Unifi, Inc.
Fourth Qtr. Conf. Call
July 28, 2011
June 26,
June 27,
June 26,
June 27,
2011
2010
2011
2010
Net income
13,514
$
5,472
$
25,089
$
10,685
$
Provision for income taxes
3,128
2,090
7,333
7,686
Interest expense, net
3,327
4,707
16,679
18,764
Depreciation and amortization expense
5,998
6,483
25,561
26,312
EBITDA
25,967
$
18,752
$
74,662
$
63,447
$
Equity in earnings of unconsolidated affiliates
(12,465)
(5,846)
(24,352)
(11,693)
Consolidated EBITDA
13,502
$
12,906
$
50,310
$
51,754
$
Restructuring charges
147
485
1,702
739
Startup costs
525
860
3,065
1,027
Non-cash compensation expense, net of distributions
266
256
1,361
2,555
Loss (gain) on extinguishment of debt
-
-
3,337
(54)
Other
(383)
(359)
684
(765)
Adjusted EBITDA
14,057
$
14,148
$
60,459
$
55,256
$
For the Quarters Ended
For the Years ended |
 9
Non-GAAP Financial Measures
Unifi, Inc.
Fourth Qtr. Conf. Call
July 28, 2011
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.
EBITDA and Adjusted EBITDA
EBITDA represents net income or loss before
income tax expense, net interest expense, and depreciation and amortization expense (excluding interest portion
of amortization). Consolidated EBITDA represents EBITDA adjusted
to exclude equity in earnings and losses of unconsolidated affiliates. Adjusted EBITDA
represents Consolidated EBITDA adjusted to exclude restructuring
charges, startup costs, non-cash compensation expense net of distributions, gains or losses on
extinguishment of debt, and other adjustments. Other adjustments
include gains or losses on sales or disposals of property, plant and equipment, currency and
derivative gains or losses, impairment of long-lived assets, other
non-operating expense, and gain from sale of nitrogen credits. We present Adjusted EBITDA as
a supplemental measure of our operating performance and ability to
service debt. We also present Adjusted EBITDA because we believe such measure is
frequently used by securities analysts, investors and other interested
parties in the evaluation of companies in our industry and in measuring the ability of “high-
yield” issuers to meet debt service obligations.
EBITDA, Consolidated EBITDA 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. Our 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)
unusual 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, Consolidated EBITDA 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; 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.
In evaluating EBITDA, Consolidated EBITDA 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,
Consolidated EBITDA and Adjusted EBITDA should not be construed as an inference that our
future results will be unaffected by unusual or non-recurring
items. EBITDA, Consolidated EBITDA, and Adjusted EBITDA are not measurements of our
financial performance under GAAP and should not be considered as
alternatives to net income, operating income or any other performance measures derived in
accordance with GAAP or as an alternative to cash flow from operating
activities as a measure of our liquidity. |
 10
Non-GAAP Financial Measures -
continued
Unifi, Inc.
Fourth Qtr. Conf. Call
July 28, 2011
Our Adjusted EBITDA measure 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:
• it does not reflect our cash
expenditures, future requirements for capital expenditures or contractual commitments;
• it does not reflect changes in, or cash
requirements for, our working capital needs;
• it does not reflect the significant interest expense or the cash requirements necessary to service interest or principal payments on our debt;
• although depreciation and amortization
are non-cash charges, the assets being depreciated and amortized will often have to be replaced in the future,
and our Adjusted EBITDA measure
does not reflect any cash requirements for such replacements;
• it is not adjusted for all non-cash
income or expense items that are reflected in our statements of cash flows;
• it does not reflect the impact of
earnings or charges resulting from matters we consider not indicative of our ongoing operations;
• it does not reflect limitations on or
costs related to transferring earnings from our subsidiaries to us; and
• other companies in our industry may
calculate this measure differently than we do, limiting its usefulness as a comparative measure.
Because of these limitations, 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 Adjusted EBITDA only as supplemental information. |