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Fibres/​Yarns

Unifi reports income decline in Q4 2016

Net income declined by US$ 5.4 million, compared to the prior year’s fourth quarter, primarily due to lower earnings from Parkdale America.

28th July 2016

Knitting Industry
 |  Greensboro, NC

Knitted Outerwear, Sports/​Activewear, Collections

Meanwhile, operating income increased by US$ 2.0 million compared to the prior year fourth quarter and gross margin climbed to 16.8%, compared to 14.5% for the prior year fourth quarter, the company reports.

Fiscal 2016

Operating income increased by US$ 3.7 million compared to fiscal 2015. Net income declined by US$ 7.7 million. Gross margin climbed to 14.5%, compared to 13.2% for fiscal 2015. Premium value-added (PVA) products surpassed 35% of net sales.

"I am pleased to report strong fourth quarter and fiscal 2016 results. Our international operations, coupled with strong sales of PVA products, helped drive solid results," said Tom Caudle, President of Unifi. "We've spent the last several years transforming our business and shifting our sales mix to higher-margin PVA products.”

“We remain committed to producing the highest quality, innovative and sustainable products for our customers around the world. This has been the foundation of our success over the past several years, and we believe it will continue to be as we grow. We're excited about the course of our business and our global opportunities."

Operational review

Net income for the fourth quarter of fiscal 2016 was US$ 10.2 million, compared to US$ 15.6 million for the fourth quarter of fiscal 2015. Net income for fiscal 2016 was US$ 34.4 million, compared to US$ 42.2 million for fiscal 2015.

Net sales were US$ 163.9 million for the fourth quarter of fiscal 2016, compared to net sales of US$ 175.0 million for the fourth quarter of fiscal 2015. Net sales were US$ 643.6 million for fiscal 2016, compared to US$ 687.1 million for fiscal 2015 primarily due to the same factors noted in the quarterly comparison.

Market share gains for the International Segment and a disciplined focus on the company's PVA portfolio returned strong operating results. Operating income grew in the fourth quarter of fiscal 2016 by US$ 2.0 million, compared to the fourth quarter of fiscal 2015. Operating income for fiscal 2016 grew by US$ 3.7 million, compared to fiscal 2015.

Adjusted EBITDA was US$ 21.1 million for the fourth quarter of fiscal 2016, compared to US$ 19.2 million for the fourth quarter of fiscal 2015. Adjusted EBITDA was US$ 68.6 million for fiscal 2016 compared to US$ 64.3 million for fiscal 2015.

Outlook

For fiscal 2017, the company anticipates revenue growth in the low single digit percentage range, assuming raw material prices are unchanged. The company also forecasts operating income and adjusted EBITDA growth in the low single digit percentage range. The company is also planning to continue with the current capital investment strategy, with estimated capital expenditures of approximately US$ 40 million.

"We expect growth in our top line in fiscal 2017, based on increased contributions from our international operations, PVA portfolio, and our new bottle processing facility, all of which should help offset a soft domestic environment," said Sean Goodman, CFO of Unifi.

"We expect some gross margin pressure in fiscal 2017 associated with initial start-up costs for our bottle processing operation and Recycling Center expansion. We anticipate that the financial benefits of these investments will be realized in fiscal 2018 and beyond.  We will continue to invest diligently in our business to position our assets for enhanced returns, to expand internationally, and to continue on a path for long-term growth."

www.unifi.com

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