Unifi Inc. (UFI, Financial) filed Quarterly Report for the period ended 2009-03-29.
Unifi Inc. is one of the world's largest producers of textured polyester and nylon both natural and package dyed covered elastomeric yarns and twisted yarns. They are engaged in the business of processing yarns by: texturizing of synthetic filament polyester and nylon fiber; and spinning of cotton and cotton blend fibers. Unifi Inc. has a market cap of $106.2 million; its shares were traded at around $1.71 with and P/S ratio of 0.1.
On June 10, 2005, the Company and Sinopec Yizheng Chemical Fiber Co., Ltd, (YCFC) entered into an Equity Joint Venture Contract (the JV Contract), to form YUFI to manufacture, process and market polyester filament yarn in YCFCs facilities in China. Under the terms of the JV Contract, each company owned a 50% equity interest in YUFI. The joint venture transaction closed on August 3, 2005, and accordingly, the Company contributed to YUFI its initial capital contribution of $15.0 million in cash on August 4, 2005. On October 12, 2005, the Company transferred an additional $15.0 million to YUFI to complete the capitalization of the joint venture.
In December 2008, the Company renegotiated the proposed agreement to sell its interest in YUFI to YCFC for $9.0 million, pending final approval by the appropriate authorities and execution of definitive agreements and recorded an additional impairment charge of $1.5 million. See Footnote 12-Impairment Charges.
For the quarter and year-to-date period ended March 23, 2008, the Company recognized equity losses net of technology and license fee income of $2.0 million and $3.7 million, respectively. In addition, the Company recognized $0.3 million and $1.6 million in operating expenses for the quarter and year-to-date periods ended March 23, 2008, respectively, which was directly related to providing technological support in accordance with the Companys joint venture contract.
In June 1997, the Company and Parkdale Mills, Inc. entered into a contribution agreement whereby both companies contributed all of the assets of their spun cotton yarn operations utilizing open-end and air jet spinning technologies to create PAL. In exchange for its contributions, the Company received a 34% ownership interest in the joint venture. PAL is a producer of cotton and synthetic yarns for sale to the textile and apparel industries primarily within North America. PAL has 12 manufacturing facilities primarily located in central and western North Carolina and in South Carolina. For the quarter and year-to-date periods ended March 29, 2009, the Company recognized net equity earnings of $1.3 million and $5.4 million, respectively, compared to equity earnings of $3.0 million and $4.5 million for the respective corresponding periods in the prior year. The Company received accumulated distributions from PAL of $2.9 million and $1.2 million for the year-to-date periods of fiscal years 2009 and 2008, respectively. As of April 4, 2009, PAL had $33.0 million cash-on-hand and no outstanding debt.
In September 2000, the Company and Nilit Ltd (Nilit) formed UNF; a 50/50 joint venture to produce nylon POY at Nilits manufacturing facility in Migdal Ha-Emek, Israel which is the Companys primary source of nylon POY for its texturing operations. For the quarter and year-to-date periods ended March 29, 2009, the Company recognized net equity losses of $0.5 million and $0.9 million, respectively, compared to net equity losses of $0.2 million and net equity earnings of $0.1 million for the respective corresponding periods in the prior year.
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Unifi Inc. is one of the world's largest producers of textured polyester and nylon both natural and package dyed covered elastomeric yarns and twisted yarns. They are engaged in the business of processing yarns by: texturizing of synthetic filament polyester and nylon fiber; and spinning of cotton and cotton blend fibers. Unifi Inc. has a market cap of $106.2 million; its shares were traded at around $1.71 with and P/S ratio of 0.1.
Highlight of Business Operations:
In the first quarter of fiscal year 2008, the Company recorded $1.5 million for restructuring charges related to unfavorable Kinston contracts for obligations which extended beyond the date of the facilitys closing. These charges were reduced by $0.5 million in the fourth quarter of fiscal year 2008 as a result of favorable contract negotiations and settlements. See the Severance discussion above for further details related to Kinston.On June 10, 2005, the Company and Sinopec Yizheng Chemical Fiber Co., Ltd, (YCFC) entered into an Equity Joint Venture Contract (the JV Contract), to form YUFI to manufacture, process and market polyester filament yarn in YCFCs facilities in China. Under the terms of the JV Contract, each company owned a 50% equity interest in YUFI. The joint venture transaction closed on August 3, 2005, and accordingly, the Company contributed to YUFI its initial capital contribution of $15.0 million in cash on August 4, 2005. On October 12, 2005, the Company transferred an additional $15.0 million to YUFI to complete the capitalization of the joint venture.
In December 2008, the Company renegotiated the proposed agreement to sell its interest in YUFI to YCFC for $9.0 million, pending final approval by the appropriate authorities and execution of definitive agreements and recorded an additional impairment charge of $1.5 million. See Footnote 12-Impairment Charges.
For the quarter and year-to-date period ended March 23, 2008, the Company recognized equity losses net of technology and license fee income of $2.0 million and $3.7 million, respectively. In addition, the Company recognized $0.3 million and $1.6 million in operating expenses for the quarter and year-to-date periods ended March 23, 2008, respectively, which was directly related to providing technological support in accordance with the Companys joint venture contract.
In June 1997, the Company and Parkdale Mills, Inc. entered into a contribution agreement whereby both companies contributed all of the assets of their spun cotton yarn operations utilizing open-end and air jet spinning technologies to create PAL. In exchange for its contributions, the Company received a 34% ownership interest in the joint venture. PAL is a producer of cotton and synthetic yarns for sale to the textile and apparel industries primarily within North America. PAL has 12 manufacturing facilities primarily located in central and western North Carolina and in South Carolina. For the quarter and year-to-date periods ended March 29, 2009, the Company recognized net equity earnings of $1.3 million and $5.4 million, respectively, compared to equity earnings of $3.0 million and $4.5 million for the respective corresponding periods in the prior year. The Company received accumulated distributions from PAL of $2.9 million and $1.2 million for the year-to-date periods of fiscal years 2009 and 2008, respectively. As of April 4, 2009, PAL had $33.0 million cash-on-hand and no outstanding debt.
In September 2000, the Company and Nilit Ltd (Nilit) formed UNF; a 50/50 joint venture to produce nylon POY at Nilits manufacturing facility in Migdal Ha-Emek, Israel which is the Companys primary source of nylon POY for its texturing operations. For the quarter and year-to-date periods ended March 29, 2009, the Company recognized net equity losses of $0.5 million and $0.9 million, respectively, compared to net equity losses of $0.2 million and net equity earnings of $0.1 million for the respective corresponding periods in the prior year.
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