Unifi Announces Fourth Quarter Results

GREENSBORO, N.C., July 31 /PRNewswire-FirstCall/ -- Unifi, Inc.
(NYSE: UFI) today released operating results for its fiscal fourth quarter
ended June 29, 2008.
Net income for the current quarter, including discontinued operations, was
$771 thousand or $0.01 per share compared to a net loss of $74.2 million or
$1.23 per share for the prior June quarter. Net sales for the quarter were
$189.6 million compared to net sales of $185.3 million for the prior year June
quarter.
The Company also announced a proposed agreement to sell its 50% ownership
interest in Yihua Unifi Fibre Industry Co. Ltd ("YUFI") to its partner,
Sinopec Yizheng Chemical Fiber Co., Ltd. ("YCFC"), pending final negotiation
and execution of definitive agreements and Chinese regulatory approvals.
While there can be no assurances of completion, the Company expects to close
the transaction in the second quarter of fiscal 2009. Net income for the June
quarter was negatively impacted by $8.8 million in impairment charges and
operating losses of YUFI. The Company intends to continue servicing customers
in Asia, through the formation of Unifi Textiles Suzhou Co., Ltd. ("UTSC"), a
wholly-owned, China-based subsidiary that will develop, source, sell and
service premium value-added yarns. The Company expects UTSC to begin
operations during the second quarter of fiscal 2009.
Net income in the quarter was also impacted by a $3.2 million discontinued
operation benefit from the pending liquidation of the Company's former
operations in the United Kingdom and $2.1 million of gains related to the sale
of non-productive assets.
Net income for the 2008 fiscal year was a net loss of $16.2 million or
$0.27 per share compared to a net loss of $115.8 million or $2.06 per share
for the prior fiscal year. Net sales for the 2008 fiscal year were $713.3
million compared to net sales of $690.3 million for the prior fiscal year.
"The supply-chain management and operational improvements made throughout
the fiscal year, as well as continued growth in our premium value-added
products, have driven our improved performance over the last two quarters,"
said Ron Smith, Chief Financial Officer for Unifi. "Our sourcing strategy for
raw materials enabled the Company to partially contend with escalating raw
materials costs, which saw double digit increases during the quarter. While
domestic consumption contracted as a result of the prolonged economic slowdown
in many of our market segments, certain portions of our business remained
stable due to the increased volume of synthetic apparel sourced through the
CAFTA region."
Cash-on-hand at the end of the June quarter was $20.2 million, which is a
decrease from the $26.2 million cash-on-hand at the end of the March quarter.
Total cash and cash equivalents at the end of June, including restricted cash,
were $38.5 million compared to $44.1 million as of June 2007. Total long-term
debt at the end of the June quarter was $201.8 million compared to $218.4
million as of the March 2008 quarter and $234.6 million as of the June 2007
year-end.
Bill Jasper, President and CEO of Unifi, said, "Although the economic
slowdown and rapidly rising raw material prices have dampened the positive
impacts, we continue to be pleased with the fundamental improvements in our
core business. As we move into our new fiscal year, we will continue to
address our supply chain management and operational discipline, and focus our
efforts on driving growth of premium value-added products. Integral to our
strategy will be continued investment in the development and commercialization
of innovative products, such as Repreve(R), and the establishment of UTSC to
service the profitable opportunities in the value-added segments of the Asian
yarn markets. The positive improvements in our underlying operations over the
last few quarters, and the new business model being launched in China are
specific examples of how the leadership team is successfully responding to
challenges in the market place while also seeking to maximize profitable
growth opportunities, both domestically and abroad."
Unifi, Inc. (NYSE: UFI) is a diversified producer and processor of
multi-filament polyester and nylon textured yarns and related raw materials.
The Company adds value to the supply chain and enhances consumer demand for
its products through the development and introduction of branded yarns that
provide unique performance, comfort and aesthetic advantages. Key Unifi
brands include, but are not limited to: aio(R) - all-in-one performance yarns,
Sorbtek(R), A.M.Y.(R), Mynx(R) UV, Repreve(R), Reflexx(R), MicroVista(R) and
Satura(R). Unifi's yarns and brands are readily found in home furnishings,
apparel, legwear, and sewing thread, as well as industrial, automotive,
military, and medical applications. For more information about Unifi, visit
http://www.unifi.com .

UNIFI, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited) (In Thousands Except Per Share Data)

For the Quarters Ended For the Years Ended
June 29, June 24, June 29, June 24,
2008 2007 2008 2007

Net sales $189,605 $185,267 $713,346 $690,308
Cost of sales 171,768 170,704 662,764 651,911
Selling, general &
administrative expenses 11,030 12,032 47,572 44,886
Provision for bad debts 62 4,302 214 7,174
Interest expense 6,458 6,732 26,056 25,518
Interest income (679) (970) (2,910) (3,187)
Other (income) expense,
net (2,340) 129 (6,427) (2,576)
Equity in (earnings)
losses of unconsolidated
affiliates 4,179 (181) 3,265 4,292
Restructuring charges
(recoveries) (611) (157) 4,027 (157)
Write down of long-lived
assets - 659 2,780 16,731
Write down of investment
in unconsolidated
affiliates 1,826 84,742 6,331 84,742
Loss from continuing
operations before
income taxes (2,088) (92,725) (30,326) (139,026)
Provision (benefit) for
income taxes 345 (17,531) (10,949) (21,769)
Loss from continuing
operations (2,433) (75,194) (19,377) (117,257)
Income from discontinued
operations, net of tax 3,204 1,002 3,226 1,465
Net income (loss) $771 $(74,192) $(16,151) $(115,792)

Income (loss) per common
share (basic and diluted):
Net loss -
continuing operations $(0.04) $(1.24) $(0.32) $(2.09)
Net income -
discontinued operations 0.05 0.01 0.05 0.03
Net income (loss) -
basic and diluted $0.01 $(1.23) $(0.27) $(2.06)

Weighted average basic and
diluted shares
outstanding 60,629 60,537 60,577 56,184

UNIFI, INC.
CONSOLIDATED BALANCE SHEETS
(Unaudited) (Amounts in Thousands)

June 29, 2008 June 24, 2007

Assets
Cash and cash equivalents $20,248 $40,031
Receivables, net 103,272 93,989
Inventories 122,890 132,282
Deferred income taxes 2,357 9,923
Assets held for sale 4,124 7,880
Restricted cash 18,246 4,036
Other current assets 13,007 11,973
Total current assets 284,144 300,114

Property, plant and equipment 177,299 209,955
Investments in unconsolidated
affiliates 70,562 93,170
Intangible assets, net 38,965 42,290
Other noncurrent assets 20,561 20,424
$591,531 $665,953
Liabilities and Shareholders'
Equity
Accounts payable $44,553 $61,620
Accrued expenses 25,531 28,278
Income taxes payable 681 247
Current maturities of long-term
debt and other current liabilities 9,805 11,198
Total current liabilities 80,570 101,343

Long-term debt and other
liabilities 204,366 236,149
Deferred income taxes 926 23,507
Shareholders' equity 305,669 304,954
$591,531 $665,953

UNIFI, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited) (Amounts in Thousands)

For the Twelve-Months Ended
June 29, 2008 June 24, 2007

Cash and cash equivalents at
beginning of year $40,031 $35,317
Operating activities:
Net loss (16,151) (115,792)
Adjustments to reconcile net loss
to net cash provided by
continuing operating activities:
Income from discontinued
operations (3,226) (1,465)
(Earnings) losses of
unconsolidated equity
affiliates, net of
distributions 7,727 7,029
Depreciation 36,931 41,594
Amortization 4,643 3,264
Stock-based compensation
expense 1,015 1,691
Deferred compensation
expense, net (665) 1,619
Net gain on asset sales (4,003) (1,225)
Non-cash restructuring
charges (recoveries), net 4,027 (157)
Non-cash write down of long-
lived assets 2,780 16,731
Non-cash write-down of
investment in
unconsolidated affiliates 6,331 84,742
Deferred income tax benefit (15,066) (23,776)
Provision for bad debts 214 7,174
Other (8) (866)
Change in assets and
liabilities, excluding
effects of
acquisitions and foreign
currency adjustments (10,876) (9,943)
Net cash provided by
continuing operating
activities 13,673 10,620

Investing activities:
Capital expenditures (12,809) (7,840)
Acquisitions - (42,222)
Return of capital from equity
affiliates - 3,630
Proceeds from the sale of equity
affiliate 8,750 -
Proceeds from sale of capital
assets 17,821 5,099
Change in restricted cash (14,209) (4,036)
Collection of notes receivable 250 1,266
Net proceeds from split dollar
life insurance surrenders - 1,757
Split dollar life insurance
premiums (216) (217)
Other (1,148) (943)
Net cash used in
investing activities (1,561) (43,506)

Financing activities:
Borrowing of long-term debt 147,000 133,000
Payment of long-term debt (181,273) (97,000)
Other (733) (134)
Net cash (used in)
provided by financing
activities (35,006) 35,866

Cash flows of discontinued
operations:
Operating cash flow (586) 277

Net cash (used in)
provided by discontinued
operations (586) 277

Effect of exchange rate changes on
cash and cash equivalents 3,697 1,457

Net increase (decrease) in cash and
cash equivalents (19,783) 4,714

Cash and cash equivalents at end of
period $20,248 $40,031

CAUTIONARY STATEMENT ON FORWARD-LOOKING STATEMENTS
Certain statements included herein contain forward-looking statements
within the meaning of federal security laws about Unifi, Inc.'s (the
"Company") 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, as well as management's beliefs and
assumptions. 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, operating performance of joint ventures, alliances and
other equity investments, technological advancements, employee relations,
changes in construction spending, capital expenditures and long-term
investments (including those related to unforeseen acquisition opportunities),
continued availability of financial resources through financing arrangements
and operations, outcomes of pending or threatened legal proceedings,
negotiation 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, 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. Other
risks and uncertainties may be described from time to time in the Company's
other reports and filings with the Securities and Exchange Commission.
SOURCE Unifi, Inc.

Ronald L. Smith, Vice President, Chief Financial Officer, Unifi, Inc.,
+1-336-316-5545