ATLANTA — A shake-up at a Unifi, Inc. board of directors meeting on Wednesday ended in the firing of chairman, president and CEO Brian R. Parke and the resignations of six board members, including Parke. Stephen Wener was named chairman and acting CEO of Unifi. The changes are effective immediately, and Unifi said it will begin a search for a permanent CEO.
Parke had been president of Greensboro, N.C.-based Unifi since 1999, CEO since 2000 and chairman since 2004. He has agreed to continue to serve as the vice-chairman of Unifi’s Chinese joint venture, Yihua Unifi Fibre Industry Co. Ltd.
The company also reported a net loss in its fourth quarter, ended June 24, of $72.3 million, or $1.19 per share, in a continuing string of losses. The loss compares with a net loss of $5.4 million, or 10 cents per share, for the prior year quarter. The net loss from continuing operations was $73.3 million, or $1.21 per quarter, compared to a net loss of $5.2 million, or 10 cents per share, a year ago.
Unifi ended the 2007 fiscal year with a net loss of $113.1 million, or $2.01 per share, compared to a net loss of $14.4 million, or 28 cents per share, for the 2006 fiscal year. From continuing operations, the net loss was $114.6 million, or $2.04 per share, compared to a net loss of $14.7 million, or 28 cents per share, in fiscal 2006.
William Lowe, CFO and CFO, said fiscal 2007 was full of challenges, primarily in the area of “ever-increasing and fluctuating raw material prices.”
The other board members who resigned are R. Wiley Bourne, Charles R. Carter, Sue W. Cole, J.B. Davis and Donald F. Orr. The company has five remaining board members: Wener, William J. Armfield IV, Anthony Loo, Kenneth G. Langone and William M. Sams.
Unifi said it will file an 8-K report within the next few days explaining the reasons behind the resignations.
Before joining Unifi, Wener had been president and CEO of Dillon Yarn Corp. since 1980. Unifi acquired the Dillon polyester and nylon texturing operations in January 2007, and Wener was appointed a director of Unifi in May 2007.
Unifi also announced it will also close by the end of the year its Kinston, N. C., facility for partially orientated yarn (POY) production, which is for internal consumption and third party sales. Unifi will purchase its commodity POY needs from external suppliers for conversion in its texturing operations. Meanwhile, Unifi will continue to produce POY at its Yadkinville, N. C., facility for its specialty and premium value yarns and certain commodity yarns. Approximately 260 employees are affected by the closure.
Unifi acquired the plant in September 2004, allowing the company to remove excess manufacturing capacity of POY and to substantially lower production costs, and the acquisition had returned “excellent value” for Unifi over the past three years, according to William Lowe, COO and CFO. However, he said, “Continued foreign competition requires that we continue to evolve our business to not only compete but add value to the business.” Annual savings are expected to be around $12 million, though first year savings will be offset by closure costs and will be around $2 million to $3 million.
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