Unifi Inc. (UFI, Financial) filed Quarterly Report for the period ended 2009-09-27.
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 $186.2 million; its shares were traded at around $3 with and P/S ratio of 0.3.
Consolidated net sales from continuing operations decreased $26.2 million, or 15.5% for the first quarter of fiscal year 2010 compared to the prior year first quarter. Consolidated unit sales volumes decreased by 5.1% for the first quarter of fiscal year 2010 primarily due to the global downturn that began the second quarter of the prior fiscal year and impacted all supply chains and markets. Compared to the prior year quarter, polyester and nylon segment volumes decreased 2.5% and 22.4%, respectively. The weighted-average selling price on a consolidated basis decreased by 10.4% for the same period. Refer to the segment operations under the captions Polyester Operations and Nylon Operations for a further discussion of each segments operating results.
Consolidated gross profit from continuing operations increased by $6.0 million to $19.4 million for the first quarter of fiscal year 2010 as compared to the prior year first quarter. This increase in gross profit was primarily attributable to improved per unit manufacturing costs for the polyester segment. Manufacturing costs on a per unit basis decreased 17.8% for the polyester segment as the Company aligned operational costs with lower sales volumes and benefited from increased Brazilian incentives. The nylon segment also experienced an improvement in gross profit due to higher conversion margins of 13.4% on a per unit basis attributable to mix enrichment and the resulting higher average selling prices. Refer to the segment operations under the captions Polyester Operations and Nylon Operations for a further discussion of each segments operating results.
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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 $186.2 million; its shares were traded at around $3 with and P/S ratio of 0.3.
Highlight of Business Operations:
Although there have been modest month-over-month improvements in retail sales of apparel, year-over-year U.S. apparel retail sales are down 6% and home furnishing retail sales are down 12%. Brand name manufacturers and retailers are reluctant to anticipate 2009 consumer holiday spending and as a result, retailers are delaying new product development and are managing apparel inventories at lower levels by ordering conservatively. During the first quarter of fiscal year 2010, the Companys revenues declined 15% compared to the first quarter of fiscal year 2009, however the rate of decline was much slower than the rate the Company experienced in each of its previous three quarters. The Companys revenues declined by 31%, 30% and 26% for the second, third and fourth quarters of the prior fiscal year as compared to the same fiscal 2008 quarters as a result of the global economic downturn. However, as the third fiscal 2009 quarter progressed into the fourth fiscal 2009 quarter, the Company experienced sales volume improvements in certain segments as retail sales improved slightly and the effects of the apparel inventory de-stocking began to subside. During the first quarter of fiscal year 2010, the Companys consolidated sales volumes improved 2.9% over the trailing fourth fiscal 2009 quarter while sales into the apparel market trended at 7% to 10% below pre-recession levels. On-going sales in both the automotive and home furnishings segments remain well below historic levels, though both are showing recent signs of improvement. The Companys sales into the automotive segment were positively impacted by the U.S. governments Cash for Clunkers stimulus program. Nylon sales volumes declined 7.6% as compared to the fourth fiscal 2009 quarter due to reduced textured nylon demand in the socks and hosiery segments. The Company expects its overall North American sales to continue a slow recovery through the next several quarters as the U.S. economy gradually improves.Consolidated net sales from continuing operations decreased $26.2 million, or 15.5% for the first quarter of fiscal year 2010 compared to the prior year first quarter. Consolidated unit sales volumes decreased by 5.1% for the first quarter of fiscal year 2010 primarily due to the global downturn that began the second quarter of the prior fiscal year and impacted all supply chains and markets. Compared to the prior year quarter, polyester and nylon segment volumes decreased 2.5% and 22.4%, respectively. The weighted-average selling price on a consolidated basis decreased by 10.4% for the same period. Refer to the segment operations under the captions Polyester Operations and Nylon Operations for a further discussion of each segments operating results.
Consolidated gross profit from continuing operations increased by $6.0 million to $19.4 million for the first quarter of fiscal year 2010 as compared to the prior year first quarter. This increase in gross profit was primarily attributable to improved per unit manufacturing costs for the polyester segment. Manufacturing costs on a per unit basis decreased 17.8% for the polyester segment as the Company aligned operational costs with lower sales volumes and benefited from increased Brazilian incentives. The nylon segment also experienced an improvement in gross profit due to higher conversion margins of 13.4% on a per unit basis attributable to mix enrichment and the resulting higher average selling prices. Refer to the segment operations under the captions Polyester Operations and Nylon Operations for a further discussion of each segments operating results.
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