NEW YORK — Citing the benefits of its joint ventures and new foreign operations, Unifi Inc. said it narrowed its loss in its second fiscal quarter, despite a decline in sales.
The Greensboro, N.C.-based synthetic yarn marker recorded a loss of $2.2 million, or 4 cents a diluted share, for the quarter ended Dec. 29. That compares with a year-ago loss of $3.5 million, or 7 cents a share. Results were pre-tax gains of $2.6 million from equity in earnings of affiliates and $7.4 million from the company’s manufacturing alliance with DuPont.
"Our continued ability to improve our level of profitability on an equivalent or even slightly reduced level of sales is a clear indication that our equity investments and our strategies involving customer services, manufacturing excellence and maximization of cash flows are sound," Brian Parke, Unifi’s chief executive, said in a statement.
Sales for the quarter slipped 8.9 percent to $201.9 million, down from sales of $221.7 million, due to reduced sales prices and a change in product mix.
Parke said, on a global basis, operations in Brazil and Europe continue to perform well. Meanwhile, Hong Kong-based Unifi Asia continues to make progress in developing relationships with Asian customers, while preparing the way for future growth in the region.
Unifi also said costs associated with the arbitration process between itself and DuPont totaled $1.6 million and $2.8 million for the quarter and six-month period, respectively. The arbitration panel has advised that the final ruling be delayed until the end of February, because of the breadth and complexity of the arbitration.
As reported, the two companies disagree about the terms of a polyester filament "manufacturing alliance," which has led DuPont to seek $85 million in compensation. Under the terms of the agreement reached in 2000, DuPont and Unifi agreed to co-manage DuPont’s partially oriented yarn plants.
Unifi also said it will no longer provide quarterly or yearly guidance on its financial results so it can focus more on long-term goals.
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