POLYESTER HELPS UNIFI NET SOAR
NEW YORK — Citing growth in its polyester business, which offset weakness in nylon, yarn texturizer Unifi Inc. reported a more than elevenfold increase in net income for its third quarter.
For the three months ended March 26, the Greensboro, N.C.-based company reported net income of $13.3 million, or 23 cents per diluted share. That compares with net income of $1.1 million, or 2 cents a share, in the prior-year quarter, after a $14.8 million one-time charge for an early retirement program.
Sales were $319.3 million, up 8.3 percent from $294.8 million.
In a conference call with analysts, Willis C. Moore, senior vice president and chief financial officer, said the company had experienced a 9.6 percent growth in polyester unit volume, 7.6 percent of which was related to its acquisition of a Brazilian operation a year ago. The rest of the growth came from non-apparel sales. Domestic sales of polyester to the apparel business were off in the quarter.
Average selling prices per unit were up for the quarter, he said, due to the ongoing increase in polyester fiber prices. Polyester represented 66 percent of Unifi’s sales for the quarter, he added.
Nylon unit sales were off 6.1 percent in the period, which Moore attributed to the continuing weakness of the hosiery business. Nylon represented 32 percent of sales for the quarter.
Regarding how successful the company had been in passing along the increases in man-made fiber prices, which its suppliers have been imposing in recent months, Moore said, “We’ve been able to get some price increases through, especially in the polyester area. Nylon, because of the weakness in hosiery, has been harder.”
He added that the company’s polyester and nylon plants are running “close to capacity,” with polyester operating at about 95 percent of capacity and nylon in the low 90s.
In addition, the company said it expects significant growth from its Brazilian operation over the years ahead.
“Our operation in Brazil has seen increased volumes and manufacturing efficiencies,” Brain Parke, chief executive officer, said in a statement. “We’ve also begun to realize the benefits of serving the underdeveloped potential for synthetics in the Latin American market.”
Parkdale America, Unifi’s cotton-yarn spinning joint venture with Parkdale Mills, was profitable in the quarter, largely because of the resumption of the U.S. Department of Agriculture’s rebate program for domestic cotton spinners, Moore said. That income offset continuing losses at Micell Technologies, a dry-cleaning joint venture the company is starting up, he added.
For the nine months, Unifi reported net income of $25.7 million, or 45 cents a diluted share, off 36.1 percent from $41.9 million, or 69 cents a diluted share, in the year-earlier period. Sales were $941.6 million, down 0.2 percent from $973.5 million.