Unifi Announces First Quarter Results

GREENSBORO, N.C., Oct. 29 /PRNewswire-FirstCall/ -- Unifi, Inc. (NYSE: UFI)
today released preliminary operating results for its first fiscal quarter
ended September 27, 2009.

The Company is reporting net income of $2.5 million or $0.04 per share for the
first quarter of the 2010 fiscal year compared to a net loss of $6.3 million
or $0.10 per share and a net loss of $676 thousand or $0.01 per share for the
June 2009 and September 2008 quarters, respectively. The Company is also
reporting adjusted earnings before interest, taxes, depreciation and
amortization (Adjusted EBITDA) of $15.1 million, which exceeds the Company's
revised guidance of $13 to $14 million and is a marked improvement in Adjusted
EBITDA from the June 2009 and September 2008 quarters of $9.6 million and
$13.9 million, respectively. Results for the quarter were positively impacted
by the following:

-- A 570 basis point improvement in gross margin year-over-year, which
reflects improvements made in both our conversion margins and our
operating cost structure,
-- Continued volume growth in the Company's polyester business from
inventory levels coming back into alignment with retail demand in
apparel and home furnishings, and

-- Market share gains in certain product categories both in the U.S. and
Brazil.

Revenues for the first quarter increased 2.2% over the June 2009 quarter to
$143 million, although they still remain $26 million below the September 2008
quarterly level of $169 million.

"We are pleased the operating results for the quarter exceeded targets and the
Company was able to achieve its highest quarterly net income in seven years
despite the effects of a severe global recession," said Bill Jasper, President
and CEO of Unifi. "Now that the negative impact of the inventory de-stocking
across our supply chains seems to have abated, we are seeing the benefits of
our unwavering focus on our core strategies. These include our continuous
improvement efforts to enhance margins, quality, and operating efficiencies,
resulting in significantly improved operating performance, in spite of a 15
percent decline in year-over-year revenue."

Cash-on-hand at the end of the September quarter was $55.7 million, which is
an increase of $13.0 million from the end of the June quarter and an increase
of $35 million over the last twelve months. Total cash and cash equivalents
at the end of the September quarter, including restricted cash, were $61.5
million. Total long-term debt as of September 27, 2009 was $185.6 million,
and net debt for the Company was $124 million, representing a reduction of
more than $32 million from September 2008.

Ron Smith, Chief Financial Officer for Unifi, said, "Although there was modest
month-over-month improvements in retail sales of apparel and home furnishings,
volumes into all of our major segments remain down year-over-year.
Accordingly, we expect continued recovery in our North American sales over the
next several quarters, as consumer spending begins to return. We also expect
our aggressive cost and working capital improvements, profitable share gains
and disciplined, tasked based process improvement efforts will create further
benefits to our operating results. As a result, we are reaffirming our
Adjusted EBITDA estimate for the 2010 fiscal year to be near the higher end of
the guidance provided in our June earnings call, which was $50 million."

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(®) - all-in-one performance yarns,
SORBTEK(®), A.M.Y.(®), MYNX(®) UV, REPREVE(®), REFLEXX(®), MICROVISTA(®) and
SATURA(®). 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
www.unifi.com, or to learn more about REPREVE(®), visit www.repreve.com.

Financial Statements to Follow

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

September 27, 2009 June 28, 2009
------------------ -------------
(Unaudited)
Assets
Cash and cash equivalents $55,700 $42,659
Receivables, net 79,358 77,810
Inventories 99,414 89,665
Deferred income taxes 1,261 1,223
Assets held for sale 1,250 1,350
Restricted cash 5,843 6,477
Other current assets 5,214 5,464
----- -----
Total current assets 248,040 224,648

Property, plant and equipment, net 159,086 160,643
Investments in unconsolidated
affiliates 60,641 60,051
Restricted cash - 453
Intangible assets, net 16,712 17,603
Other noncurrent assets 13,439 13,534
------ ------
$497,918 $476,932
======== ========
Liabilities and Shareholders' Equity
Accounts payable $33,528 $26,050
Accrued expenses 18,876 15,269
Income taxes payable 727 676
Current maturities of long-term debt
and other current liabilities 6,212 6,845
----- -----
Total current liabilities 59,343 48,840

Long-term debt and other
liabilities 181,629 182,707
Deferred income taxes 438 416
Shareholders' equity 256,508 244,969
------- -------
$497,918 $476,932
======== ========

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

For the Quarters Ended
----------------------
September September
27, 2009 28, 2008
---------- -----------
Summary of Operations:
Net sales $142,851 $169,009
Cost of sales 123,445 155,584
Write down of long-lived assets 100 -
Selling, general & administrative expenses 11,164 10,545
Provision for bad debts 576 558
Other operating (income) expense, net (87) (561)

Non-operating (income) expense:
Interest income (746) (913)
Interest expense 5,492 5,965
Gain on extinguishment of debt (54) -
Equity in earnings of unconsolidated affiliates (2,063) (3,482)
------ ------

Income from continuing operations before income
taxes 5,024 1,313
Provision for income taxes 2,535 1,885
----- -----
Income (loss) from continuing operations 2,489 (572)
Loss from discontinued operations, net of tax - (104)
- ----
Net income (loss) $2,489 $(676)
====== =====

Income (loss) per common share (basic and diluted):
Income (loss) - continuing operations $0.04 $(0.01)
Loss - discontinued operations - -
- -
Net income (loss) - basic and diluted $0.04 $(0.01)
===== ======

Weighted average basic and diluted shares
outstanding 62,057 61,134

UNIFI, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited) (Amounts in Thousands)
For the Quarters Ended
----------------------
September September
27, 2009 28, 2008
---------- -----------

Cash and cash equivalents at beginning of year $42,659 $20,248
Operating activities:
Net income (loss) 2,489 (676)
Adjustments to reconcile net income (loss)
to net cash provided by continuing
operating activities:
Loss from discontinued operations - 104
Earnings of unconsolidated equity
affiliates, net of distributions (452) (1,417)
Depreciation 5,805 8,980
Amortization 1,168 1,069
Stock-based compensation expense 593 282
Deferred compensation expense (recovery), net 177 (81)
Net gain on asset sales (94) (316)
Gain on extinguishment of debt (54) -
Write down of long-lived assets 100 -
Deferred income tax 63 (115)
Provision for bad debts 576 558
Other 40 296
Change in assets and liabilities,
excluding effects of acquisitions and
foreign currency adjustments 2,811 (6,082)
----- ------
Net cash provided by continuing
operating activities 13,222 2,602
------ -----

Investing activities:
Capital expenditures (2,106) (3,569)
Change in restricted cash 1,763 5,183
Proceeds from sale of capital assets 107 101
Other - (94)
- ---
Net cash (used in) provided by
investing activities (236) 1,621
---- -----

Financing activities:
Payments of long-term debt (2,198) (9,080)
Borrowings of long-term debt - 4,600
Proceeds from stock option exercises - 3,551
Other - 37
- --
Net cash used in financing activities (2,198) (892)
------ ----

Cash flows of discontinued operations:
Operating cash flow - (114)

- ----
Net cash used in discontinued operations - (114)
- ----

Effect of exchange rate changes on cash and cash
equivalents 2,253 (3,069)
----- ------

Net increase in cash and cash equivalents 13,041 148
------ ---

Cash and cash equivalents at end of period $55,700 $20,396
======= =======

Adjusted EBITDA Reconciliation
to Pre-Tax Income (Loss)
(Amounts in thousands)
(Unaudited)

For the Quarters Ended
----------------------
September June September
2009 2009 2008
---- ---- ----

Pre-tax income (loss) from continuing
operations $5,024 $(4,351) $1,313

Interest expense, net 4,746 4,876 5,052

Depreciation and amortization expense 6,696 6,951 9,758

Equity in (earnings) losses of
unconsolidated affiliates (2,063) 1,218 (3,482)

Non-cash compensation, net of
distributions 770 607 201

Gain (loss) on sales of PP&E (94) 9 (315)

Currency and hedging losses 13 370 86

Write down of long-lived assets 100 350 -

Restructuring recoveries - (240) -

Gain on extinguishment of debt (54) (251) -

Asset consolidation and optimization
expense - 47 1,240

Kinston shutdown expenses - - 30

------- ------ -------
Adjusted EBITDA $15,138 $9,586 $13,883
======= ====== =======

NON-GAAP FINANCIAL MEASURES

Non-GAAP Financial Measures

Included in this presentation are certain non-GAAP financial measures designed
to complement the financial information presented in accordance with generally
accepted accounting principles in the United States of America because
management believes such measures are useful to investors.

Adjusted EBITDA

Adjusted EBITDA represents pre-tax income before interest expense,
depreciation and amortization expense and loss or income from discontinued
operations, adjusted to exclude equity in earnings and losses of
unconsolidated affiliates, write down of long-lived assets, non-cash
compensation expense net of distributions, gains or losses on sales of
property, plant and equipment, currency and hedging losses, asset
consolidation and optimization expense, restructuring recoveries, gain on
extinguishment of debt, and Kinston shutdown costs. We present Adjusted
EBITDA as a supplemental measure of our performance and ability to service
debt. We also present Adjusted EBITDA because we believe such measure is
frequently used by securities analysts, investors and other interested parties
in the evaluation of companies in our industry and in measuring the ability of
"high-yield" issuers to meet debt service obligations.

We believe Adjusted EBITDA is an appropriate supplemental measure of debt
service capacity, because cash expenditures on interest are, by definition,
available to pay interest, and tax expense is inversely correlated to interest
expense because tax expense goes down as deductible interest expense goes up;
depreciation and amortization are non-cash charges. Equity in earnings and
losses of unconsolidated affiliates is excluded because such earnings or
losses do not have an impact on our ability to service our debt. The other
items excluded from Adjusted EBITDA are excluded in order to better reflect
our continuing operations.

In evaluating Adjusted EBITDA, you should be aware that in the future we may
incur expenses similar to the adjustments in this presentation. Our
presentation of Adjusted EBITDA should not be construed as an inference that
our future results will be unaffected by unusual or non-recurring items.
Adjusted EBITDA is not a measurement of our financial performance under GAAP
and should not be considered as an alternative to net income, operating income
or any other performance measures derived in accordance with GAAP or as an
alternative to cash flow from operating activities as a measure of our
liquidity.

Our Adjusted EBITDA measure has limitations as an analytical tool, and you
should not consider it in isolation or as a substitute for analysis of our
results as reported under GAAP. Some of these limitations are:

-- it does not reflect our cash expenditures, future requirements for
capital expenditures or contractual commitments;
-- it does not reflect changes in, or cash requirements for, our working
capital needs;
-- it does not reflect the significant interest expense or the cash
requirements necessary to service interest or principal payments on
our
debt;
-- although depreciation and amortization are non-cash charges, the
assets
being depreciated and amortized will often have to be replaced in the
future, and our Adjusted EBITDA measure does not reflect any cash
requirements for such replacements;
-- it is not adjusted for all non-cash income or expense items that are
reflected in our statements of cash flows;
-- it does not reflect the impact of earnings or charges resulting from
matters we consider not be indicative of our ongoing operations;
-- it does not reflect limitations on or costs related to transferring
earnings from our subsidiaries to us; and

-- other companies in our industry may calculate this measure differently
than we do, limiting its usefulness as a comparative measure.

Because of these limitations, Adjusted EBITDA should not be considered as a
measure of discretionary cash available to us to invest in the growth of our
business or as a measure of cash that will be available to us to meet our
obligations, including those under the notes. You should compensate for these
limitations by relying primarily on our GAAP results and using Adjusted EBITDA
only supplementally.

CAUTIONARY STATEMENT ON FORWARD-LOOKING STATEMENTS
Certain statements included herein contain forward-looking statements within
the meaning of federal securities 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, the success of our subsidiaries, 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, changes in currency exchange rates, interest and inflation rates,
changes in consumer spending, customer preferences, fashion trends and
end-uses, regulations governing tax laws, other governmental and authoritative
bodies' policies and legislation, and the ability to sell excess assets. 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, Chief Financial Officer of Unifi, Inc., +1-336-316-5545