Driven by strong polyester yarn sales in North and Central America, Unifi Inc., the Greensboro, N.C.-based yarn spinner, reported net income increased 53 percent to $10 million, or 55 cents a share, in the third quarter ended March 29.
The devaluation of the Brazilian real adversely affected net sales and was the principal driver of a 3.8 percent net sales decrease to $170.5 million in the quarter. Higher consolidated sales volumes, as well as higher margins in the Polyester and International Segments, helped yield the strong operating results for the quarter.
“Growth in textured polyester yarn in the NAFTA and CAFTA regions, along with greater demand for our premier value-added yarns in all regions, helped drive our strong operating results in the quarter and for the fiscal year to date,” said Roger Berrier, president and chief operating officer of Unifi. “We recently expanded the production capacity of our texturing operations, and based on the continued success and growth of Repreve, we will be expanding our Repreve Recycling Center and also installing a state-of-the-art plastic bottle processing facility over the next 12 to 15 months.”
Unifi said textured polyester sales increased 7 percent. The company reported gross profit improved to $22.3 million, or 13.1 percent of net sales, from $19.8 million, or 11.2 percent of net sales, for the prior-year quarter. Adjusted earnings before interest, taxes, depreciation and amortization were $14.9 million for the period, an improvement from $12.6 million for the prior-year quarter.
“We will continue to evaluate opportunities to increase capacity in the CAFTA and NAFTA regions to capitalize on the growth of synthetic apparel and demand for premier value-added yarns,” said Bill Jasper, chairman and chief executive officer. “The enhancements to our credit facility, especially the ability to increase our borrowing capacity annually without further amendments to the agreement, provide us an even stronger foundation to support these and other strategic capital projects as we pursue profitable growth-related opportunities over the next few years.”
For the nine months, net income rose 20 percent to $26.5 million, or $1.46 per basic share, from $20.1 million, or $1.05 per basic share, for the prior year nine-month period. Net sales increased 0.3 percent to $507.9 million compared to net sales of $506.2 million for the prior year nine-month period, primarily due to improved volumes, notwithstanding the substantial offset attributable to the unfavorable currency translation in Brazil.
Unifi maintains one of the textile industry’s most comprehensive polyester and nylon product offerings. In addition to its flagship Repreve products, a family of eco-friendly yarns made from recycled materials, key Unifi brands include Sorbtek, Reflexx, AIO, Satura, Augusta, Mynx UV and MicroVista, used in the apparel, hosiery and home furnishings industries, along with the automotive, industrial and other end-use markets.