Unifi Inc. said its profits more than doubled in the first quarter ended September 26, as sales rose 38.5%. The producer of recycled and synthetic yarns raised its outlook for the year.
Overview of the first quarter of fiscal 2022
- Net sales were $ 196.0 million, an increase of 38.5% from the first quarter of fiscal 2021 and an increase of 6.3% from the fourth quarter of fiscal 2021 .
- Revenues from Repreve Fiber products represented 37% of net sales, an increase of $ 20.3 million from the first quarter of fiscal 2021.
- Gross margin was $ 26.1 million, compared to $ 14.6 million for the first quarter of fiscal 2021, while gross margin was 13.3% versus 10.3% for the first quarter of fiscal 2021. fiscal year 2021.
- Operating income was $ 13.3 million compared to $ 2.9 million for the first quarter of fiscal 2021.
- Net income was $ 8.7 million, or $ 0.46 of diluted earnings per share (“EPS”), compared to net income of $ 3.4 million, or $ 0.18 of EPS. diluted for the first quarter of fiscal 2021.
- Adjusted EBITDA more than doubled to $ 19.8 million from $ 9.1 million in the first quarter of fiscal 2021.
- Adjusted EBITDA for the 12 fiscal months ended September 26, 2021 was $ 75.4 million compared to $ 13.3 million for the 12 fiscal months ended September 27, 2020.
Eddie Ingle, CEO of Unifi, said: “Fiscal 2022 first quarter results exceeded our expectations as strong performance in each segment allowed us to achieve our highest quarterly net sales since the quarter. of June 2013. Our first quarter results demonstrate the team’s ability to expand our opportunities, grow our customer base and adapt to a rapidly changing macro environment for our industry. Strong performances in Brazil and Asia contributed to the favorable results, while the Polyester and Nylon segments continue to recover from the pandemic. The momentum for REPREVE® Fiber products in Asia, Central America and the United States continues to be strong, and we remain focused on growing our portfolio of innovative and sustainable products. While the global business environment is still dynamic, these strong results, along with the dedication of our employees and our diverse global strategy, provide us with a solid starting point to achieve our goals for fiscal 2022. ”
First quarter of fiscal 2022 compared to the first quarter of fiscal 2021
Net sales for the first quarter of fiscal 2022 were $ 196.0 million, compared to $ 141.5 million for the same period a year ago. The increase is mainly due to double-digit growth in all lines of business in the first quarter of fiscal 2022 compared to the first quarter of the previous fiscal year, which was affected by the pandemic. The Asia segment recorded a 36% increase in revenue due to volume growth, while the Brazil segment recorded a 49% increase in revenue year-on-year thanks to pricing and to the composition of sales. Polyester segment revenue increased 30% mainly due to price adjustments associated with increasing raw material costs despite moderate headwinds related to import competition and input availability . Repreve Fiber products continue to meet the ever increasing demand for sustainable textiles, driving the underlying dynamics of the portfolio.
Gross margin increased 79% to $ 26.1 million from $ 14.6 million in the first quarter of fiscal 2021. In addition to the resumption of the adverse effects of the pandemic in the first quarter of fiscal year he fiscal year 2021, the increase in gross margin is mainly due to an improved mix of sales and prices for the Polyester segment and the Brazil segment, as well as sales growth for the Asia segment.
Operating income increased substantially to $ 13.3 million compared to $ 2.9 million in the first quarter of fiscal 2021, mainly due to the increase in gross margin. Net income was $ 8.7 million, or diluted EPS of $ 0.46, compared to $ 3.4 million, or $ 0.18 per share. Adjusted EBITDA was $ 19.8 million compared to $ 9.1 million. The combination of an agile global business model and focused execution continues to provide strong opportunities to drive future growth in profitability and cash flow.
The principal amount of debt stood at $ 84.3 million on September 26, 2021, compared to $ 86.9 million on June 27, 2021. As part of the previously planned investments in the innovation of the texturing of new yarns and working capital to support future growth, cash and cash equivalents decreased to $ 49.5 million on September 26, 2021, from $ 78.3 million as of June 27, 2021. As a result, net debt1 was $ 34.8 million as of September 26, 2021 compared to $ 8.6 million as of June 27, 2021.
Here are the company’s expectations for the fiscal quarter ending December 2021 (Q2 2022) and for fiscal 2022, assuming there are no further major disruptions in global markets or disruption in global channels. global supply, no supplier issues in China due to power supply limitations, and no other negative impact from COVID-19.
- Net sales between $ 185.0 million and $ 190.0 million; and
- Adjusted EBITDA is between $ 14.0 million and $ 15.0 million.
Fiscal year 2022
- Repreve Fiber sales volume and sales growth bring net sales to $ 750 million or more, which would represent an increase of 12% or more from the level reached in fiscal 2021;
- EBITDA adjusted to range between $ 65.0 million and $ 67.0 million;
- An effective tax rate between 35% and 40%, assuming there are no significant changes in existing tax legislation; and
- Capital expenditures of approximately $ 40.0 million to $ 44.0 million as the company continues its plan to invest in new yarn texturing machines at its US facilities. These levels of capital spending will be funded from available cash and available funding arrangements and include approximately $ 10.0 million to $ 12.0 million of routine annual maintenance.
Ingle concluded, “I would like to thank all of our employees around the world for their continued dedication and strong execution, especially their proactive navigation through temporary supply chain disruptions, input shortages and cost volatility. , and the availability of labor. Given our regional focus and global business model, I remain confident that we will maintain a high level of performance to mitigate headwinds in the short term, especially as we continue to focus on sustainable growth for Unifi and on creating long-term value for our shareholders. “
Photo courtesy Unifi / Repreve