The company is also reporting adjusted net income of US 6.9 million for the second quarter of fiscal year 2016, compared to adjusted net income of US 9.0 million for the prior year second quarter.

These results reflect strong operating performance, significantly impacted by lower earnings from Parkdale America, LLC and devaluation of the Brazilian Real, the company reports.

Net income

Net income for the six months ended 27 December 2015 was US 14.5 million, compared to net income of US 16.5 million for the prior year period. The company is reporting adjusted net income of US 14.9 million, compared to adjusted net income of US 15.0 million for the prior year period.

Similar to the results for the quarter, these year-to-date results reflect strong operating performance that was significantly impacted by lower earnings from Parkdale America, LLC and devaluation of the Brazilian Real.

"Despite soft US holiday apparel sales and weakening China growth, our North American and China businesses grew both revenue and earnings. I expect continued growth as our strategic capital investments are brought on line in the next year or two. I also anticipate improved performance in Brazil, as we gain market share there against weaker competitors struggling in the current economic environment," said Bill Jasper, Chairman and CEO of Unifi.

Net sales

Net sales were US 156.3 million for the second quarter of fiscal year 2016 compared to US 164.4 million for the prior year quarter.

The sales decline was a result of the devaluation of the Brazilian Real and pricing declines in the Polyester Segment associated with lower raw material costs. However, the Polyester and Nylon Segments experienced sales volume increases.

 Strong performance for the company's regional texturing business and premier value-added products, as well as continued growth for the company's subsidiary in China, helped drive strong overall gross margin in the December quarter, the company reports.

Domestic operations

"We are very pleased with the strong performance in our domestic operations, which continues to be driven by the increase in synthetic apparel produced in the NAFTA and CAFTA regions and the strength of our premier value-added yarns," commented Roger Berrier, President and COO of Unifi.

"The capital investments that we have made to support capacity growth and the production of our premier value-added products are delivering results consistent with our expectations, and they have helped the company offset the negative impact of the currency devaluation in Brazil and the loss from Parkdale America in the quarter."

Other highlights

Net debt (total debt less cash and cash equivalents) at the end of the second quarter was US 117.5 million, compared to US 94.1 million at 28 June 2015, consistent with the company's previously announced capital investment plans. As of 27 December 2015, the company had US 65.1 million of available borrowing capacity under its revolver.

Adjusted EBITDA, as a percentage of sales, improved to 10.0%, from 9.7% for the prior year second quarter. Cash and cash equivalents were US 19.4 million, up US 9.4 million compared to cash and cash equivalents as of 28 June 2015.

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