Boosted by better results in its domestic polyester business and an earnings jolt from its investment in Parkdale America, Unifi Inc. reported net income of $7.5 million, or $0.38 per share, for the third quarter ended March 25, compared with a net loss of $4.0 million, or $0.20 per share, for the prior-year quarter.
Net sales for the quarter were flat at $179 million, as a slight decrease in volume was offset by a 3.2 percent increase in selling price, the company said.
“We expected to see better results as we entered the second half of our 2012 fiscal year and clearly saw an improving trend through the March quarter,” said Bill Jasper, chairman and chief executive officer of Unifi, a diversified producer and processor of multifilament polyester and nylon textured yarns based in Greensboro, N.C. “Retail sales increased in each of our core business segments, apparel inventory destocking across the supply chain is now largely completed, U.S. market synthetic apparel supplied by the North American region continues to grow and the weakened currency in Brazil is making domestic production there more competitive. Coupled with anticipated moderation in polyester raw materials prices, these conditions led to improved operating results during the quarter and are expected to result in continued operating improvements for the company over the next few quarters.”
Unifi said the quarter saw $9.7 million of earnings from its equity investment in Parkdale America, a joint venture it has with Parkdale Mills.
Adjusted earnings before interest, taxes, depreciation and amortization were $10.3 million for the quarter compared to $12.3 million for the prior-year quarter, as improvements in the firm’s polyester segment were offset by declines in the nylon and international units. On Tuesday, Unifi announced a full call for redemption of its remaining outstanding 2014 senior secured notes and said it had entered into commitment letters for a new debt structure, comprised of a $150 million senior secured credit facility and a $30 million term B loan. The company expects to fund the redemption of the 2014 notes using about $22 million of cash-on-hand and borrowings of $60 million under the new revolving credit facility, $50 million under the term loan component of the new senior secured credit facility and $30 million under the term B loan.
Ron Smith, chief financial officer of Unifi, said, “As a result of these transactions, we expect to save approximately $9 million annually in interest expense and have extended the maturity profile of our indebtedness to May 2017.”