Unifi, Inc. (UFI) Tops Q3 EPS by 9c, Revenues Beat

Unifi, Inc. (NYSE: UFI) reported Q3 EPS of $0.25, $0.09 better than the analyst estimate of $0.16. Revenue for the quarter came in at $178.9 million versus the consensus estimate of $166.97 million.

Third Quarter Fiscal 2021 Overview

• Net sales were $178.9 million, an increase of 4.6% year-over-year, and an increase of 9.9% sequentially from the second quarter of fiscal 2021.
• Revenues from REPREVE® Fiber products represented 33% of consolidated net sales, compared to 29% for the third quarter of fiscal 2020.
• Gross profit was $25.6 million, a 66% increase year-over-year, while gross margin was 14.3%, an increase of 530 basis points year-over-year, primarily due to improvements in the Brazil and Asia Segments.
• Net income was $4.8 million, or $0.25 of diluted earnings per share ("EPS"), up from net loss of $41.1 million, or $2.23 per share, year-over-year. The prior year results included a $45.2 million impairment charge in connection with the Company's sale of its 34% interest in Parkdale America, LLC ("PAL").
• Adjusted Net Income1 of $4.8 million and Adjusted EPS1 of $0.25, compared to $4.1 million and $0.22, respectively, for the third quarter of fiscal 2020, which excluded the impairment charge for PAL.
• Adjusted EBITDA1 was up 70.1% to $15.9 million, compared to $9.3 million in the third quarter of fiscal 2020.
• On March 28, 2021, debt principal was $89.4 million while cash and cash equivalents were $75.6 million, resulting in Net Debt1 of $13.8 million, a reduction of 86.2% since March 29, 2020.

Eddie Ingle, Chief Executive Officer of Unifi, said, "Third quarter fiscal 2021 results reflected our team's ability to leverage effectively the strength of our global business model during the continued economic recovery. We have remained focused on positioning the business to take advantage of building economic momentum around the world as we return to a more normalized demand environment. Our Brazil segment outperformed expectations again, achieving exceptional profitability with a record 41.2% gross margin driven by strong pricing levels. Our Asia segment also benefited from an improving business climate and recaptured pre-pandemic momentum, allowing the segment to return to top-line growth. We remain confident that the momentum we have generated throughout the recovery will allow us to further improve our long-term profitability. We expect that continued strong results from each of our high-performing businesses, coupled with continued interest in our REPREVE-branded products, will fuel long-term growth."

Outlook

The Company expects demand levels and trends across the business to remain strong and anticipates current inflationary pressures from raw material fluctuations to be mostly offset by selling price adjustments. The Company's outlook for the June 2021 quarter includes the following expectations:

• Sales volumes to increase, with net sales improving sequentially from the March 2021 quarter by approximately 1.0% to 3.0%;
• Adjusted EBITDA to range from approximately $12.0 million to $14.0 million. This range includes consideration for continued underlying business momentum in spite of pandemic uncertainty in addition to an expected reduction from the recent exceptional performance of the Brazil Segment, recent global raw material cost increases that will adversely impact gross profit due to the inherent lag in responsive selling price adjustments, partially offset by a lack of incentive compensation expense due to full recognition during the first nine months of fiscal 2021;
• An effective tax rate between 45% and 55%; and
• Capital expenditures of approximately $10.0 million to $12.0 million.

For earnings history and earnings-related data on Unifi, Inc. (UFI) click here.

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