FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 26, 1999
[] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
Commission File Number 1-10542
UNIFI, INC.
(Exact name of registrant as specified its charter)
New York 11-2165495
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
P.O. Box 19109 - 7201 West Friendly Avenue
Greensboro, NC 27419
(Address of principal executive offices) (Zip Code)
(336) 294-4410
(Registrant's telephone number, including area code)
Same
(Former name, former address and former fiscal year,
if changed since last report)
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes X No
APPLICABLE ONLY TO CORPORATE ISSUERS:
Indicate the number of shares outstanding of each of the issuer's class of
common stock, as of the latest practicable date.
Class Outstanding at October 31, 1999
Common stock, par value $.10 per share 59,204,952 shares
Part I. Financial Information
UNIFI, INC.
Condensed Consolidated Balance Sheets
September 26, June 27,
1999 1999
(Unaudited) (Note)
(Amounts in Thousands)
ASSETS:
Current assets:
Cash and cash equivalents $42,606 $44,433
Receivables 198,994 185,784
Inventories:
Raw materials and supplies 50,646 45,584
Work in process 17,451 14,584
Finished goods 66,152 69,749
Other current assets 2,669 2,015
Total current assets 378,518 362,149
Property, plant and equipment 1,237,138 1,231,013
Less: accumulated depreciation 559,842 541,275
677,296 689,738
Equity investments in unconsolidated
affiliates 210,753 207,142
Other noncurrent assets 105,072 106,811
Total assets $1,371,639 $1,365,840
LIABILITIES AND SHAREHOLDERS' EQUITY:
Current liabilities:
Accounts payable $87,773 $68,716
Accrued expenses 37,914 52,889
Income taxes payable 7,155 7,392
Current maturities of long-term debt
and other current liabilities 7,058 16,255
Total current liabilities 139,900 145,252
Long-term debt and other liabilities 487,332 478,898
Deferred income taxes 81,377 78,369
Minority interests 17,708 17,183
Shareholders' equity:
Common stock 5,955 5,955
Capital in excess of par value 27 13
Retained earnings 661,685 658,353
Accumulated other comprehensive loss (22,345) (18,183)
Total shareholders' equity 645,322 646,138
Total liabilities and shareholders'
equity $1,371,639 $1,365,840
Note: The balance sheet at June 27, 1999, has been derived from the audited
financial statements at that date but does not include all of the information
and footnotes required by generally accepted accounting principles for complete
financial statements.
See Accompanying Notes to Condensed Consolidated Financial Statements.
UNIFI, INC.
Condensed Consolidated Statement of Income
(Unaudited)
For the Quarters Ended
September 26, September 27,
1999 1998
(Amounts in Thousands Except Per Share Date)
Net sales $304,714 $328,815
Cost of goods sold 270,455 281,338
Selling, general & admin. expense 14,422 11,563
Operating income 19,837 35,914
Interest expense 7,445 6,586
Interest income 684 476
Other (income) expense (332) 551
Equity in (earnings) losses of
unconsolidated affiliates 4,364 (4,094)
Minority interests 2,394 2,350
Income before income taxes 6,650 30,997
Provision for income taxes 3,318 9,967
Income before cumulative effect of
accounting change 3,332 21,030
Cumulative effect of accounting
change, net of tax - 2,768
Net income $3,332 $18,262
Earnings per common share - basic:
Income before cumulative effect of
accounting change $.06 $.34
Cumulative effect of accounting
change, net of tax - .04
Net income per common share $.06 $.30
Earnings per common share -
assuming dilution:
Income before cumulative effect
of accounting change $.06 $.34
Cumulative effect of accounting
change, net of tax - .04
Net income per common share -
assuming dilution $.06 $.30
See Accompanying Notes to Condensed Consolidated Financial Statements.
UNIFI, INC.
Condensed Consolidated Statements of Cash Flows
(Unaudited)
For the Quarters Ended
September 26, September 27,
1999 1998
(Amounts in Thousands)
Cash and cash equivalents provided by
operating activities $21,117 $44,174
Investing activities:
Capital expenditures (12,345) (45,168)
Investments in unconsolidated
equity affiliates (17,976) (10,000)
Sale of capital assets 46 75
Other 1,061 1,476
Net investing activities (29,214) (53,617)
Financing activities:
Borrowing of long-term debt 10,000 35,000
Repayment of long-term debt (127) (5,285)
Issuance of Company common stock 14 641
Purchase and retirement of Company
common stock - (11,986)
Distributions to minority interest
Shareholders (3,000) -
Other - (48)
Net financing activities 6,887 18,322
Currency translation adjustment (617) 361
Net increase (decrease) in cash and
cash equivalents (1,827) 9,240
Cash and cash equivalents - beginning 44,433 8,372
Cash and cash equivalents - ending $42,606 $17,612
See Accompanying Notes to Condensed Consolidated Financial Statements.
UNIFI, INC.
Notes to Condensed Consolidated Financial Statements
(a)Basis of Presentation
The information furnished is unaudited and reflects all adjustments which
are, in the opinion of management, necessary to present fairly the financial
position at September 26, 1999, and the results of operations and cash flows
for the periods ended September 26, 1999, and September 27, 1998. Such
adjustments consisted of normal recurring items in the current year. Interim
results are not necessarily indicative of results for a full year. It is
suggested that the condensed consolidated financial statements be read in
conjunction with the financial statements and notes thereto included in the
Company's latest annual report on Form 10-K. The Company has reclassified
the presentation of certain prior year information to conform with the
current presentation format.
(b)Income Taxes
Deferred income taxes have been provided for the temporary differences
between financial statement carrying amounts and tax basis of existing assets
and liabilities.
The difference between the statutory federal income tax rate and the
effective tax rate is primarily due to the losses of foreign subsidiaries for
which no significant tax benefit was recognized thereby distorting the
effective rate for our consolidated operations.
(c)Earnings per Share
The following table sets forth the reconciliation of the numerators and
denominators of the basic and diluted earnings per share computations
(amounts in thousands):
For the Quarters Ended
September 26, September 27,
1999 1998
Numerator:
Income before cumulative
effect of accounting change $3,332 $21,030
Cumulative effect of
accounting change, net of tax - 2,768
Net income $3,332 $18,262
For the Quarters Ended
September 26, September 27,
1999 1998
Denominator:
Denominator for basic
earnings per share -
Weighted average shares 59,549 61,401
Effect of dilutive securities:
Stock options - 6
Dilutive potential common
shares denominator for
diluted earnings per
share-Adjusted weighted
average shares and
assumed conversions 59,549 61,407
(d)Comprehensive Income
Comprehensive income (loss) amounted to ($0.8) million for the first quarter
of fiscal 2000 and $12.0 million for the first quarter of fiscal 1999, and
was comprised of net income and foreign currency translation adjustments.
The Company does not provide income taxes on the impact of currency
translations as earnings from foreign subsidiaries are deemed to be
permanently invested.
(e)Cumulative Effect of Accounting Change
In April 1998, the AICPA issued SOP 98-5, "Reporting on the Costs of Start-Up
Activities," (SOP 98-5) which requires start-up costs, as defined, to be
expensed as incurred. In accordance with this SOP, any previously
capitalized start-up costs are required to be written-off as a cumulative
effect of a change in accounting principle. The Company, upon adoption of
this SOP in the first quarter of fiscal 1999, wrote off the unamortized
balance of such previously capitalized start-up costs as of June 29, 1998, of
$4.5 million ($2.8 million after tax) or $.04 per diluted share as a
cumulative catch-up adjustment.
(f)Segment Disclosures
In June 1997, the FASB issued Statement of Financial Accounting Standards No.
131, "Disclosures about Segments of an Enterprise and Related Information,"
(SFAS 131) which the Company adopted in the fourth quarter of fiscal 1999.
SFAS 131 establishes standards for public companies for the reporting of
financial information from operating segments in annual and interim financial
statements as well as establishes standards for related disclosures about
products and services, geographic areas and major customers. Operating
segments are defined in SFAS 131 as components of an enterprise about which
separate financial information is available to the chief operating decision-
maker for purposes of assessing performance and allocating resources. The
adoption of SFAS 131 did not affect consolidated results of operations or
financial position. Following is the Company's selected segment information
for the quarters ended September 26, 1999 and September 27, 1998 (amounts in
thousands):
All
Polyester Nylon Other Total
Quarter ended September 26, 1999:
Net sales to external customers $193,111 $106,658 $4,945 $304,714
Intersegment net sales 4 109 3,009 3,122
Operating income 10,564 9,959 481 21,004
Depreciation and amortization 14,675 5,349 156 20,180
Total assets 704,797 364,303 13,768 1,082,868
Quarter ended September 27, 1998:
Net sales to external customers $212,253 $116,562 $- $328,815
Intersegment net sales 8,935 1,410 - 10,345
Operating income 22,868 14,306 - 37,174
Depreciation and amortization 14,432 5,068 - 19,500
Total assets 709,553 206,661 13,392 929,606
For the Quarters Ended
September 26, 1999 September 27, 1998
Operating income:
Reportable segments operating income $21,004 $37,174
Net standard cost adjustment to LIFO (1,000) 1,817
Unallocated operating expense (167) (3,077)
Consolidated operating income $19,837 $35,914
Certain indirect manufacturing and selling, general and administrative costs
are allocated to the operating segments based on activity drivers relevant to
the respective costs. The primary differences between the segmented
financial information of the operating segments, as reported to management,
and the Company's consolidated reporting relates to intersegment transfer of
yarn, fiber costing and capitalization of property, plant and equipment
costs. Prior to the current fiscal year, substantially all intersegment
transfers of yarn were treated as internal sales at a selling price which
approximated cost plus a normalized profit margin. In the current quarter,
intersegment transfers of yarn were treated as inventory transfers, and
profit margins recorded only on intersegment transfers from our Unifi
Textured Polyester joint venture. Domestic operating divisions' fiber costs
are valued on a standard cost basis, which approximates first-in, first-out
accounting. Subsequently, for those components of inventory valued utilizing
the last-in, first-out method, an adjustment is made at the corporate level.
For significant capital projects, capitalization is delayed for management
reporting until the facility is substantially complete. However, for
consolidated financial reporting, assets are capitalized into construction in
progress as costs are incurred or carried as unallocated corporate fixed
assets if they have been placed in service but have not as yet been moved for
management reporting.
The increase in Nylon total assets is attributable to the reclassification of
property, plant and equipment from unallocated corporate fixed assets. This
reclassification primarily relates to a new facility that had become
substantially completed.
(g)Recent Accounting Pronouncements
In March 1998, the AICPA issued SOP 98-1, "Accounting for the Cost of
Computer Software Developed for or Obtained for Internal-Use," (SOP 98-1).
This SOP is effective for the Company in the current quarter. SOP 98-1
provides guidance on accounting for costs of developing or obtaining computer
software for internal use. In summary, costs incurred in the preliminary
project stage (formulation, evaluation and selection of alternatives and
assessment of existence of required technology) or post-implementation stage
(training and maintenance) should be expensed as incurred while application
development costs should be capitalized or expensed depending on their
nature. Application development costs include external direct costs of
materials and services. Examples of application development costs are
designing the chosen path, coding, testing and installing the software
product to hardware. The Company previously expensed certain of these
internal costs when incurred. The adoption of this standard did not have,
nor is it expected to have, a material effect on the Company's results of
operations or financial position.
In June 1998, the FASB issued Statement of Financial Accounting Standards No.
133, "Accounting for Derivative Instruments and Hedging Activities," (SFAS
133) and in August 1999, the FASB issued Statement of Financial Accounting
Standards No. 137 "Accounting for Derivative Instruments and Hedging
Activities - Deferral of the Effective Date of FASB Statement No. 133," which
delayed the effective date the Company is required to adopt SFAS 133 until
its fiscal year 2001. SFAS 133 permits early adoption as of the beginning of
any fiscal quarter after its issuance. SFAS 133 will require the Company to
recognize all derivatives on the balance sheet at fair value. Derivatives
that are not hedges must be adjusted to fair value through income. If the
derivative is a hedge, depending on the nature of the hedge, changes in the
fair value of derivatives will either be offset against the change in fair
value of the hedged assets, liabilities, or firm commitments through earnings
or recognized in other comprehensive income until the hedged item is
recognized in earnings. The ineffective portion of a derivative's change in
fair value will be immediately recognized in earnings. The Company has not
yet determined what the effect of Statement 133 will be on the earnings and
financial position of the Company.
Management's Discussion and Analysis of
Financial Condition and Results of Operations
The following is Management's discussion and analysis of certain significant
factors that have affected the Company's operations and material changes in
financial condition during the periods included in the accompanying Condensed
Consolidated Financial Statements.
Results of Operations
General
Consolidated net sales decreased 7.3% in the quarter from $328.8 million to
$304.7 million. Unit volume for the quarter increased 3.5% while average unit
sales prices, based on product mix, declined 10.4%.
Domestically, polyester and nylon yarn net sales declined 10.9% for the quarter
due primarily to reductions in unit price, based on product mix. However, as
the quarter progressed, the Company experienced continued improvement in the
domestic business as unit prices were increased while market share was
maintained. Internationally, sales in local currency of our Irish operation
decreased 27.3% for the quarter due to both lower unit volume and sales prices.
The currency exchange rate change from the prior year to the current year
adversely effected current quarter sales translated to U.S. dollars for this
operation by $1.6 million, or 7.2% over the prior year amount.
Gross profit decreased by $13.2 million to $34.3 million for the quarter while
gross margin (gross profit as a percentage of net sales) declined from 14.4% in
the prior year quarter to 11.2%. The decline in gross margin for the quarter
reflects pressures on sales prices as a result of imported fiber, fabric and
apparel as well as higher raw material and manufacturing costs, which were
partially offset by lower packaging costs.
Selling, general and administrative expenses as a percentage of net sales
increased from 3.5% in last year's quarter to 4.7% this quarter. On a dollar
basis, selling, general and administrative expense increased $2.8 million to
$14.4. Higher selling, general and administrative expenses for the current year
are the result of our new business venture in Brazil acquired in April 1999 and
our majority ownership in Unifi Technology Group, a domestic automation
solutions provider established in June 1999.
Segment Information
Net sales to external customers for our Polyester segment reflect a 9.0%
decrease as a result of lower sales prices, based on product mix. Unit volume
was up in the current quarter versus the prior year quarter due mainly to our
prior year, fourth quarter acquisition in Brazil. Gross margins were negatively
impacted by the lower sales prices associated with the previously described
competitive conditions. Operating margins for our Polyester segment were
further impacted by higher selling, general and administrative costs, which are
primarily attributable to our Brazil acquisition.
Net sales to external customers for our Nylon segment were 8.5% lower in the
current quarter versus the prior year quarter as a result of both lower volume
and sales prices, based on product mix. Gross margin for this segment reflects
lower sales prices and higher production costs. Selling, general and
administrative costs have also increased over the prior year negatively
impacting operating margin.
Corporate
Interest expense increased $0.8 million to $7.4 million in the current quarter.
The increase in interest expense reflects higher levels of outstanding debt at
higher average interest rates and the reduction of interest capitalized for
major construction projects. The weighted average interest rate on outstanding
debt at September 26, 1999, was 6.1%.
Equity in the earnings (losses) of our unconsolidated affiliates, Parkdale
America, LLC ("the LLC") and Micell Technologies, Inc., (Micell) amounted to a
$4.4 million loss in the first quarter of fiscal 2000 compared with $4.1 million
profit for the corresponding prior year quarter. The declines are attributable
to the reduced earnings from the LLC and higher start-up costs associated with
Micell. The cotton spinning operation of the LLC is being negatively impacted
by excess spinning capacities in the market compounded by increased off-shore
production of cotton fabric and apparel.
In the current year fiscal quarter and corresponding prior year period the
minority interest charge amounted to $2.4 million.
The effective income tax rate has increased from 32.2% to 49.9% in the current
quarter. The current quarter increase reflects the reduction in earnings of our
Irish operations, which are taxed at a 10.0% effective tax rate, and losses in
our Brazilian operations for which no tax benefit was able to be recognized.
These losses distorted the effective tax rate for our consolidated operations.
In April 1998, the AICPA issued SOP 98-5, "Reporting on the Costs of Start-Up
Activities," (SOP 98-5) which requires start-up costs, as defined, to be
expensed as incurred. In accordance with this SOP, any previously capitalized
start-up costs are required to be written-off as a cumulative effect of a change
in accounting principle. The Company, upon adopting this SOP in the first
quarter of fiscal 1999, wrote off the unamortized balance of such previously
capitalized start-up costs as of June 29, 1998, of $4.5 million ($2.8 million
after tax) or $.04 per diluted share as a cumulative catch-up adjustment.
As a result of the above, the Company realized during the current quarter net
income of $3.3 million, or diluted earnings per share of $.06, compared to $18.3
million, or $.30 per share, for the corresponding quarter of the prior year.
For the prior year quarter, income before the cumulative effect of the
accounting change was $21.0 million, or $.34 per diluted share, respectively.
In March 1998, the AICPA issued SOP 98-1, "Accounting for the Cost of Computer
Software Developed for or Obtained for Internal-Use," (SOP 98-1). This SOP is
effective for the Company in the current quarter. SOP 98-1 provides guidance on
accounting for costs of developing or obtaining computer software for internal
use. In summary, costs incurred in the preliminary project stage (formulation,
evaluation and selection of alternatives and assessment of existence of required
technology) or post-implementation stage (training and maintenance) should be
expensed as incurred while application development costs should be capitalized
or expensed depending on their nature. Application development costs include
external direct costs of materials and services. Examples of application
development costs are designing the chosen path, coding, testing and installing
the software product to hardware. The Company previously expensed certain of
these internal costs when incurred. The adoption of this standard did not have,
nor is it expected to have, a material effect on the Company's results of
operations or financial position.
In June 1998, the FASB issued Statement of Financial Accounting Standards No.
133, "Accounting for Derivative Instruments and Hedging Activities," (SFAS 133)
and in August 1999, the FASB issued Statement of Financial Accounting Standards
No. 137 "Accounting for Derivative Instruments and Hedging Activities - Deferral
of the Effective Date of FASB Statement No. 133," which delayed the effective
date the Company is required to adopt SFAS 133 until its fiscal year 2001. SFAS
133 permits early adoption as of the beginning of any fiscal quarter after its
issuance. SFAS 133 will require the Company to recognize all derivatives on the
balance sheet at fair value. Derivatives that are not hedges must be adjusted
to fair value through income. If the derivative is a hedge, depending on the
nature of the hedge, changes in the fair value of derivatives will either be
offset against the change in fair value of the hedged assets, liabilities, or
firm commitments through earnings or recognized in other comprehensive income
until the hedged item is recognized in earnings. The ineffective portion of a
derivative's change in fair value will be immediately recognized in earnings.
The Company has not yet determined what the effect of Statement 133 will be on
the earnings and financial position of the Company.
Liquidity and Capital Resources
Cash provided by operations continues to be a primary source of funds to finance
operating needs and capital expenditures. Cash generated from operations was
$21.1 million for the quarter ended September 26, 1999, compared to $44.2
million for the prior year corresponding period. The primary sources of cash
from operations, other than net income, was an increase in accounts payable and
accruals of $10.1 million and non-cash adjustments aggregating $29.6 million.
Depreciation and amortization of $22.2 million, the deferred income tax
provision of $3.0 million and the undistributed losses of unconsolidated
affiliates of $4.4 million, were the primary components of the non-cash
adjustments to cash provided by operations. Offsetting these sources were
increases in accounts receivable and inventory of $14.0 million and $5.8
million, respectively. All working capital changes have been adjusted to
exclude the effects of currency translation.
Working capital levels are more than adequate to meet the operating requirements
of the Company. The Company ended the current quarter with working capital of
$238.6 million, which included cash and cash equivalents of $42.6 million.
The Company utilized $29.2 million for net investing activities and obtained
$6.9 million from net financing activities during the current quarter.
Significant expenditures during this period included $12.3 million for capacity
expansions and upgrading of facilities, $18.0 for investments in equity
affiliates, and $3.0 million for distributions to minority interest
shareholders. The Company obtained $9.9 million from net borrowings under its
long-term debt agreements.
At September 26, 1999, the Company has committed approximately $37.3 million for
the purchase and upgrade of equipment and facilities, which is scheduled to be
expended during the remainder of fiscal year 2000.
The Board of Directors, effective July 16, 1998, increased the remaining
authorization pursuant to a resolution originally adopted on October 21, 1993,
to purchase 10 million shares of Unifi's common stock. There remains an
authorization to repurchase approximately 7.9 million shares. The Company will
continue to operate its stock buy-back program from time to time as it deems
appropriate, based on prevailing financial and market conditions.
Management believes the current financial position of the Company in connection
with its operations and its access to debt and equity markets are sufficient to
meet anticipated capital expenditure, strategic acquisition, working capital,
Company common stock repurchases and other financial needs.
Year 2000 Compliance Status
The Company continues to actively monitor and address the business issues
associated with the year 2000 that impact information technology systems and non
- -information technology systems (i.e., embedded technology) both internally and
in relation to our external customers, suppliers and other business associates.
Factors involved in addressing such business issues include the evaluation,
testing and implementation of the Company's enterprise-wide systems; evaluation,
upgrading and certifying of non-information technology systems; assessing and
testing significant customers' and vendors' compliance strategies and monitoring
the status thereof (including electronic commerce with these companies); and,
evaluating and monitoring the compliance plans of businesses in which the
Company maintains investments in their operations.
The Company has created a team of professionals with the responsibility of
addressing business issues associated with the year 2000. The Company does not
believe any material exposures or contingencies exist with respect to its
internal information systems as the installation and testing of the enterprises-
wide software is virtually complete. At present, the Company estimates it is
approximately 99% complete with its enterprise-wide software implementation
efforts and manufacturing plant floor applications, including embedded
technology devices. Additionally, upgrades are ongoing for certain applications
where the Company has elected to postpone enterprise software conversion.
The Company is also dependent upon its customers' and vendors' compliance with
the year 2000 problem and could face disruption of business in the event these
efforts are unsuccessful. The Company has requested information on the year
2000 compliance plans and status from its significant vendors and equity
affiliates and is not aware of any material exposures or contingencies.
Meetings have been conducted with critical suppliers and compliance testing has
been completed. The Company has sent surveys to its major customers and is
performing necessary follow-up activities. Conversion plans have been
established for the Company's EDI customers and vendors and procedures are
substantially completed. Efforts are ongoing to convert the remaining customers
in the next month. For certain customers who have elected not to upgrade their
EDI technology, they have conveyed to the Company that they have year 2000
compliant systems and procedures in place. The Company will continue its efforts
to gather information from businesses with whom it conducts business. However,
such information is subject to accurate and voluntary communication.
Consequently, the Company cannot predict the likelihood or impact on its
business resulting from noncompliance by such parties.
Although the Company believes its business critical systems will be compliant,
there can be no assurances that all non-compliant systems will be identified or
that all significant suppliers or customers will be year 2000 capable. A worst-
case scenario could include interruption in the procurement of necessary
materials or the disruption in manufacturing or information systems. Such
events would adversely impact the distribution of product, timelines and
accuracy of record-keeping and collection of revenue among other consequences
which could cause a material impact on the Company's results of operation and
financial position.
Costs incurred in the Company's year 2000 compliance efforts are being expensed
as incurred. Anticipated expenditures related to year 2000 compliance readiness
are expected to be approximately $0.3 million for the fiscal year ending June
25, 2000.
Euro Conversion
The Company conducts business in multiple currencies, including the currencies
of various European countries in the European Union which began participating in
the single European currency by adopting the Euro as their common currency as of
January 1, 1999. Additionally, the functional currency of our Irish operation
and several sales office locations will change before January 1, 2002, from
their historical currencies to the Euro. During the period January 1, 1999, to
January 1, 2002, the existing currencies of the member countries will remain
legal tender and customers and vendors of the Company may continue to use these
currencies when conducting business. Currency rates during this period,
however, will no longer be computed from one legacy currency to another but
instead will first be converted into the Euro. The Company continues to
evaluate the Euro conversion and the impact on its business, both strategically
and operationally. At this time, the conversion to the Euro has not had, nor is
expected to have, a material adverse effect on the financial condition or
results of operations of the Company.
Forward Looking Statements
Certain statements in this Management's Discussion and Analysis of Financial
Condition and Results of Operations and other sections of this quarterly report
contain forward-looking statements within the meaning of federal security laws
about the Company's financial condition and results of operations that are based
on management's current expectations, estimates and projections about the
markets in which the Company operates, management's beliefs and assumptions made
by management. Words such as "expects," "anticipates," "believes," "estimates,"
variations of such words and other similar expressions are intended to identify
such forward-looking statements. These statements are not guarantees of future
performance and involve certain risks, uncertainties and assumptions, which are
difficult to predict. Therefore, actual outcomes and results may differ
materially from what is expressed or forecasted in, or implied by, such forward-
looking statements. Readers are cautioned not to place undue reliance on these
forward-looking statements, which reflect management's judgment only as of the
date hereof. The Company undertakes no obligation to update publicly any of
these forward-looking statements to reflect new information, future events or
otherwise.
Factors that may cause actual outcome and results to differ materially from
those expressed in, or implied by, these forward-looking statements include, but
are not necessarily limited to, availability, sourcing and pricing of raw
materials, pressures on sales prices and volumes due to competition and economic
conditions, reliance on and financial viability of significant customers,
technological advancements, employee relations, changes in construction spending
and capital equipment expenditures (including those related to unforeseen
acquisition opportunities), the timely completion of construction and expansion
projects planned or in process, continued availability of financial resources
through financing arrangements and operations, negotiations of new or
modifications of existing contracts for asset management and for property and
equipment construction and acquisition, regulations governing tax laws, other
governmental and authoritative bodies' policies and legislation, the
continuation and magnitude of the Company's common stock repurchase program and
proceeds received from the sale of assets held for disposal. In addition to
these representative factors, forward-looking statements could be impacted by
general domestic and international economic and industry conditions in the
markets where the Company competes, such as changes in currency exchange rates,
interest and inflation rates, recession and other economic and political factors
over which the Company has no control.
Part II. Other Information
Item 6. Exhibits and Reports on Form 8-K
(27) Financial Data Schedule
(b) No reports on Form 8-K have been filed during the quarter ended
September 26, 1999
UNIFI, INC.
Signatures
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
UNIFI, INC.
Date: November 10, 1999 WILLIS C. MOORE, III
Willis C. Moore, III
Senior-Vice President and
Chief Financial Officer (Mr. Moore
is the Principal Financial and
Accounting Officer and has been
duly authorized to sign on behalf
of the Registrant.)
<TABLE> <S> <C>
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<LEGEND>
The schedule contains summary financial information extracted from the
Company's Quarterly Report for the three month period ended
September 26,1999, and is qualified in its entirety by reference to such
financial statements.
</LEGEND>
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> JUN-25-2000
<PERIOD-END> SEP-26-1999
<CASH> $42,606
<SECURITIES> $0
<RECEIVABLES> $208,021
<ALLOWANCES> $9,027
<INVENTORY> $134,249
<CURRENT-ASSETS> $378,518
<PP&E> $1,237,138
<DEPRECIATION> $559,842
<TOTAL-ASSETS> $1,371,639
<CURRENT-LIABILITIES> $139,900
<BONDS> $487,332
$5,955
$0
<COMMON> $0
<OTHER-SE> $639,367<F1>
<TOTAL-LIABILITY-AND-EQUITY> $1,371,639
<SALES> $304,714
<TOTAL-REVENUES> $304,714
<CGS> $270,455
<TOTAL-COSTS> $270,455
<OTHER-EXPENSES> $0
<LOSS-PROVISION> $841
<INTEREST-EXPENSE> $7,445
<INCOME-PRETAX> $6,650
<INCOME-TAX> $3,318
<INCOME-CONTINUING> $3,332
<DISCONTINUED> $0
<EXTRAORDINARY> $0
<CHANGES> $0
<NET-INCOME> $3,332
<EPS-BASIC> $.06
<EPS-DILUTED> $.06
<FN>
<F1>Note 1: Other Stockholders Equity of $639,367 is comprised of Capital in
Excess of Par Value of $27, Retained Earnings of $661,685 and Accumulated
Other Comprehensive Loss of $(22,345).
</FN>
</TABLE>
