Strong sales in its Repreve polyester unit and lower raw material prices helped Unifi Inc. post net income of $2.4 million, or 12 cents a share, in the second quarter ended Dec. 23, compared to a net loss of $7.6 million, or 38 cents a share, in the same period a year earlier.
Net sales increased 3 percent to $172 million in the quarter from $167 million. Adjusted earnings before interest, taxes, depreciation and amortization improved 65 percent to $12.2 million, while gross profit advanced $5.8 million as a result of volume growth in each of the company’s operating segments.
“We continue to be on track to double our premier value-added business by 2014, which is an important part of our mix-enrichment strategy,” said Roger Berrier, president and chief operating officer of Unifi. “Repreve has been a flagship and success story for the company, and we are taking a more active approach by marketing to consumers and educating them about the benefits of recycling and choosing products made with recycled content. Since Repreve is in many winter sports products from companies such as Patagonia, The North Face and Polartec, we will be the recycling partner for X Games Aspen, which will air on ESPN from Jan. 24 to 27. We believe that this exposure will help accelerate the momentum that we have for Repreve with our brand and retail partners.”
For the first six months of its fiscal year, Unifi reported net income of $4.7 million, or 23 cents a share, compared to a net loss of $7.3 million, or 36 cents a share, for the prior-year period. Net sales increased 2 percent to $6.8 million. The company said results were negatively impacted by a $3.8 million reduction in earnings from its equity investment in Parkdale America, caused by margin pressures related to the softness in the cotton apparel market and differences in the recognition of earnings under the federal Farm Bill’s economic adjustment payments program.
“The results in the current quarter reflect the company’s ability to drive financial improvement in our core business through disciplined process improvement across all of our operating segments and the success of our mix-enrichment strategy domestically,” said Bill Jasper, chairman and chief executive officer. “Higher capacity utilization rates and moderating raw materials pricing compared to the prior-year quarter resulted in lower operating costs and improved conversion margins. Although we are encouraged that the U.S. economy continued to grow at a modest pace during the…quarter, we will continue to closely manage our operating rates and inventory in order to respond quickly to any changes in retail demand.”
In addition to its Repreve polyester line made primarily from recycled plastic water bottles, Unifi, based in Greensboro, N.C., produces a range of multifilament polyester and nylon textured yarns and related raw materials for the apparel and legwear markets, as well as industrial sectors.