Unifi Inc. (UFI, Financial) filed Quarterly Report for the period ended 2010-09-26.
Unifi Inc. has a market cap of $917 million; its shares were traded at around $14.95 with a P/E ratio of 89.6 and P/S ratio of 1.6. UFI is in the portfolios of Chuck Royce of Royce& Associates, Jim Simons of Renaissance Technologies LLC, Steven Cohen of SAC Capital Advisors.
Earnings from equity affiliates during the first quarter of fiscal year 2011 were $9.0 million, which was an improvement of $6.9 million over the prior year same quarter. The majority of this improvement came from the Company s 34% membership interest in Parkdale America, LLC (“PAL”), which contributed $8.6 million to the Company s earnings compared to $2.4 million for the prior year first quarter. PAL s improved performance is a result of the timing of revenue recognition related to the economic adjustment payments (“EAP”) cotton rebate program.
For the quarters ended September 26, 2010 and September 27, 2009, the Company recognized net equity earnings of $8.6 million and $2.4 million, respectively. The Company received distributions from PAL of $2.5 million and $1.6 million for the first quarters of fiscal years 2011 and 2010, respectively.
During the Company s first quarter of fiscal year 2011, PAL received $7.1 million of economic assistance and recognized $19.3 million of economic assistance in its operating income in accordance with the provisions of the Program. As a result of the timing of qualified capital expenditures, PAL s deferred revenue relating to this Program decreased from $13.4 million as of June 27, 2010 to $1.2 million as of September 26, 2010. PAL expects the remaining deferred revenue balance to be fully realized through the completion of qualifying capital expenditures within the timelines prescribed by the Program.
The Company s investment in PAL at September 26, 2010 was $71.5 million and the underlying equity in the net assets of PAL at September 26, 2010 was $89.3 million. The difference between the carrying value of the Company s investment in PAL and the underlying equity in PAL is attributable to initial excess capital contributions by the Company of $53.4 million, the Company s share of the settlement cost of an anti-trust lawsuit against PAL in which the Company did not participate of $2.6 million, and the Company s share of other comprehensive income of $0.3 million offset by an impairment charge taken by the Company on its investment in PAL of $74.1 million.
UNF America. On October 8, 2009, the Company formed a 50/50 joint venture, UNF America, with Nilit for the purpose of producing nylon POY in Nilit s Ridgeway, Virginia plant. The Company s initial investment in UNF America was $50 thousand dollars. In addition, the Company loaned UNF America $0.5 million for working capital. The loan carries interest at London Interbank Offered Rate ("LIBOR") plus one and one-half percent and both principal and interest shall be paid from the future profits of UNF America at such time as deemed appropriate by its members. The loan is being treated as an additional investment by the Company for accounting purposes. The Company s investment in UNF America at September 26, 2010 was $1.3 million. In October 2010, UNF America repaid $250 thousand of the working capital loan plus interest back to the Company.
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Unifi Inc. has a market cap of $917 million; its shares were traded at around $14.95 with a P/E ratio of 89.6 and P/S ratio of 1.6. UFI is in the portfolios of Chuck Royce of Royce& Associates, Jim Simons of Renaissance Technologies LLC, Steven Cohen of SAC Capital Advisors.
Highlight of Business Operations:
Net sales for the first quarter of fiscal year 2011 were $174.0 million, an increase of $31.2 million or 22% over all domestic and foreign operations as compared to the same quarter in the prior year. This improvement was driven by increased market share and improving market conditions in substantially all key segments.Earnings from equity affiliates during the first quarter of fiscal year 2011 were $9.0 million, which was an improvement of $6.9 million over the prior year same quarter. The majority of this improvement came from the Company s 34% membership interest in Parkdale America, LLC (“PAL”), which contributed $8.6 million to the Company s earnings compared to $2.4 million for the prior year first quarter. PAL s improved performance is a result of the timing of revenue recognition related to the economic adjustment payments (“EAP”) cotton rebate program.
For the quarters ended September 26, 2010 and September 27, 2009, the Company recognized net equity earnings of $8.6 million and $2.4 million, respectively. The Company received distributions from PAL of $2.5 million and $1.6 million for the first quarters of fiscal years 2011 and 2010, respectively.
During the Company s first quarter of fiscal year 2011, PAL received $7.1 million of economic assistance and recognized $19.3 million of economic assistance in its operating income in accordance with the provisions of the Program. As a result of the timing of qualified capital expenditures, PAL s deferred revenue relating to this Program decreased from $13.4 million as of June 27, 2010 to $1.2 million as of September 26, 2010. PAL expects the remaining deferred revenue balance to be fully realized through the completion of qualifying capital expenditures within the timelines prescribed by the Program.
The Company s investment in PAL at September 26, 2010 was $71.5 million and the underlying equity in the net assets of PAL at September 26, 2010 was $89.3 million. The difference between the carrying value of the Company s investment in PAL and the underlying equity in PAL is attributable to initial excess capital contributions by the Company of $53.4 million, the Company s share of the settlement cost of an anti-trust lawsuit against PAL in which the Company did not participate of $2.6 million, and the Company s share of other comprehensive income of $0.3 million offset by an impairment charge taken by the Company on its investment in PAL of $74.1 million.
UNF America. On October 8, 2009, the Company formed a 50/50 joint venture, UNF America, with Nilit for the purpose of producing nylon POY in Nilit s Ridgeway, Virginia plant. The Company s initial investment in UNF America was $50 thousand dollars. In addition, the Company loaned UNF America $0.5 million for working capital. The loan carries interest at London Interbank Offered Rate ("LIBOR") plus one and one-half percent and both principal and interest shall be paid from the future profits of UNF America at such time as deemed appropriate by its members. The loan is being treated as an additional investment by the Company for accounting purposes. The Company s investment in UNF America at September 26, 2010 was $1.3 million. In October 2010, UNF America repaid $250 thousand of the working capital loan plus interest back to the Company.
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