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| EX-99.1 - PRESS RELEASE - UNIFI INC | d248206dex991.htm |
| 8-K - FORM 8-K - UNIFI INC | d248206d8k.htm |
 Unifi, Inc.
For the
First Quarter Ended
September 25, 2011
Conference Call
Exhibit 99.2 |
 2
Cautionary Statement
Unifi, Inc.
First Qtr. Conf. Call
October 27, 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
Volume and Pricing Highlights
(Unaudited)
Unifi, Inc.
First Qtr. Conf. Call
October 27, 2011
Volume
Price
Polyester
(2.7%)
10.8%
Nylon
(16.3%)
9.0%
International
(25.1%)
7.8%
Consolidated
(11.0%)
8.7%
Volume
Price
Polyester
(13.5%)
(0.7%)
Nylon
(13.3%)
10.1%
International
(13.5%)
(4.9%)
Consolidated
(13.5%)
0.6%
Quarter over Trailing Quarter
September 25, 2011 vs. June 26, 2011
Quarter over Quarter
September 25, 2011 vs. September 26, 2010
For the Quarters Ended
For the Quarters Ended |
 4
Income Statement Highlights
(Amounts in Thousands, Except Percentages) (Unaudited)
Unifi, Inc.
First Qtr. Conf. Call
October 27, 2011
Net sales
171,013
$
100.0%
175,092
$
100.0%
Gross profit
11,830
6.9%
21,546
12.3%
Selling, general and administrative expense
10,371
6.1%
11,510
6.6%
Operating profit
(1)
1,459
0.9%
10,036
5.7%
Interest expense
4,380
5,269
Equity in earnings of unconsolidated affiliates
(3,459)
(8,951)
Income from operations before income taxes
559
12,752
Net income
286
0.2%
10,235
5.8%
Adjusted EBITDA
8,142
4.8%
18,432
10.5%
(1) Gross profit less Selling, general, and administrative
expense September 25, 2011
September 26, 2010
For the Quarters Ended |
 5
Balance Sheet Highlights
(Amounts in Thousands, Except Percentages) (Unaudited)
Unifi, Inc.
First Qtr. Conf. Call
October 27, 2011
September 25,
June 26,
June 27,
2011
2011
2010
Cash
19,821
$
27,490
$
42,691
$
Revolver Availability, Net
54,598
51,734
73,879
Total Liquidity
74,419
$
79,224
$
116,570
$
2014 Notes
123,722
$
133,722
$
178,722
$
Revolver
39,900
34,600
-
Other
348
342
668
Total Debt
163,970
168,664
179,390
Net Debt
144,149
$
141,174
$
136,699
$
Weighted Average Interest Rate
9.7%
11.0%
11.9% |
 6
Working Capital Highlights
(Amounts in Thousands, Except Percentages) (Unaudited)
Unifi, Inc.
First Qtr. Conf. Call
October 27, 2011
September 25,
June 26,
June 27,
2011
2011
2010
Accounts Receivable
95,778
$
100,175
$
91,276
$
Inventory
135,976
134,883
111,007
Accounts Payable
(46,036)
(42,842)
(40,662)
Accrued Expenses
(16,008)
(17,495)
(21,772)
Adjusted Working Capital
169,710
$
174,721
$
139,849
$
Quarterly Sales
171,013
$
196,191
$
178,516
$
Adjusted Working Capital
as a Percentage of Sales (1)
25%
22%
20%
(1) Adjusted Working Capital divided by annualized Quarterly
Sales |
 7
Equity Affiliates Highlights
(Amounts in Thousands) (Unaudited)
Unifi, Inc.
First Qtr. Conf. Call
October 27, 2011
September 25, 2011
September 26, 2010
Earnings (Losses)
Parkdale America (34%)
3,827
$
8,634
$
Other
(67)
594
Intercompany Eliminations
(301)
(277)
Total
3,459
$
8,951
$
Distributions
Parkdale America (34%)
2,005
$
2,532
$
Other
-
-
Total
2,005
$
2,532
$
For
the Quarters Ended |
 8
Adjusted EBITDA Reconciliation to Net Income
(Amounts in Thousands) (Unaudited)
Unifi, Inc.
First Qtr. Conf. Call
October 27, 2011
September 25,
September 26,
2011
2010
Net income
286
$
10,235
$
Provision for income taxes
273
2,517
Interest expense, net
3,733
4,526
Depreciation and amortization expense
6,561
6,489
EBITDA
10,853
$
23,767
$
Equity in earnings of unconsolidated affiliates
(3,459)
(8,951)
Consolidated EBITDA
7,394
$
14,816
$
Restructuring charges
-
363
Startup costs
-
1,463
Non-cash compensation expense, net of distributions
243
347
Loss on extinguishment of debt
462
1,144
Other
43
299
Adjusted EBITDA
8,142
$
18,432
$
For the Quarters Ended |
 9
Non-GAAP Financial Measures
Unifi, Inc.
First Qtr. Conf. Call
October 27, 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, Consolidated 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 and currency and derivative gains or losses.
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.
First Qtr. Conf. Call
October 27, 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 a
supplemental information. |