Unifi, a producer and processor of multi-filament polyester and nylon textured yarns and related raw materials, has released preliminary operating results for its fourth quarter and fiscal year ended June 30, 2013. The company's reported net sales increased by 6.8% to $200.7 million, compared to net sales of $187.9 million for the same period last year.

Net income for the June 2013 quarter, however, resulted in $0.54 per share, compared to $0.56 per share for the June 2012 quarter, showing a decrease caused, according to the company, by lower earnings of unconsolidated affiliates and higher income tax expense.

Roger Berrier, President and Chief Operating Officer of Unifi, commented: "Fiscal 2013 was another successful year for our premier value-added yarns, particularly Repreve, our flagship product.  As we near 100% capacity utilisation of our Repreve Recycling Center in Yadkinville, NC, the company has recently announced plans to expand both our capacity and flexibility to produce Repreve and our other premier value-added yarns."

Highlights for the quarter

Highlights for the June 2013 quarter over prior year quarter results include:

• Adjusted EBITDA for the June 2013 quarter improved to $18.3 million compared to $14.1 million in the June quarter last year;
• Gross margin improved significantly as a result of higher conversion margins and lower manufacturing costs;
• Strong shipping volumes continued, as growth in US retail demand benefited the company's yarn operations in North America and China;
• Unifi amended its $150 million bank credit facility to provide additional liquidity and improve its long-term operating flexibility.

The company's reported net sales increased $8.9 million to $714 million for the fiscal year ended June 30, 2013, compared to the fiscal year ended June 24, 2012. For the 2013 fiscal year, net income was $16.6 million, or $0.84 per share, compared to net income of $11.5 million, or $0.57 per share, for the prior fiscal year and adjusted EBITDA was $52.7 million compared to adjusted EBITDA of $39.8 million for the prior fiscal year.

Operating margins for the 2013 fiscal year were positively impacted by a 250 basis point improvement in gross margin and an $11.6 million decrease in interest expense related to the Company's recently completed deleveraging strategy. These improvements were partially offset by an $8.3 million decrease in earnings from the company's unconsolidated affiliates and a $15.3 million increase in income taxes.

"Conversion margins for the June 2013 quarter improved, as raw material prices decreased, allowing us to recover margins lost during the run-up of raw material prices in the March 2013 quarter," said Bill Jasper, Chairman and CEO of Unifi.  "We are very pleased with the overall progress of our mix enrichment programme and rigorous continuous improvement efforts. While we do not expect to consistently maintain the exceptional margins from the June 2013 quarter, we do expect our future financial performance to benefit from our continued investment in our premier value-added capabilities; continued growth of regional, synthetic apparel production; longer-term moderation of raw materials prices; and the continued recovery of our operations in Brazil and China."

Credit facility amendment

During the 2013 fiscal year, the company utilised the $50.5 million of cash generated from operating activities and distributions from equity affiliates to repurchase 1.1 million shares of the company's common stock for $19.3 million and repay $23.8 million of outstanding debt.  As of June 30, 2013, cash-on-hand was $8.8 million and total debt was $97.8 million.

"Due to our financial strength and positive operating results, we were able to successfully amend our $150 million bank credit facility during the June 2013 quarter," said Ron Smith, Chief Financial Officer of Unifi. "The amendment extends the maturity of the entire facility to May 2018; improves our liquidity by resetting the borrowings under the Term Loan to $50 million and eliminating scheduled quarterly principal payments; reduces the borrowing rate of the Term Loan; and removes share repurchases and certain optional debt prepayments from our fixed charge coverage ratio calculation.  Accordingly, we believe the amendment provides additional stability to our long-term capital structure and significantly improves our flexibility and ability to execute on our strategic plans."

www.unifi.com

www.repreve.com