EXHIBIT (13a)
CONSOLIDATED BALANCE SHEETS
(Amounts in thousands)
June 29, 1997 June 30, 1996
ASSETS:
Current assets:
Cash and cash equivalents $ 9,514 $ 24,473
Receivables 224,233 199,361
Inventories 142,263 132,946
Other current assets 3,688 5,095
------------ -----------
Total current assets 379,698 361,875
------------ -----------
Property, plant and equipment:
Land 6,836 6,249
Buildings and air conditioning 216,441 212,581
Machinery and equipment 739,599 659,678
Other 184,272 148,620
------------ -----------
1,147,148 1,027,128
Less: accumulated depreciation 548,775 477,752
------------ -----------
598,373 549,376
Other noncurrent assets 40,632 39,833
------------ -----------
$1,018,703 $ 951,084
=========== ===========
LIABILITIES AND SHAREHOLDERS' EQUITY:
Current liabilities:
Accounts payable $ 119,623 $ 110,107
Accrued expenses 35,854 39,895
Income taxes 6,887 15,651
Current maturities of long-term debt 1,189 --
---------- ----------
Total current liabilities 163,553 165,653
---------- ----------
Long-term debt 255,799 170,000
---------- ----------
Deferred income taxes 50,820 32,225
---------- ----------
Shareholders' equity:
Common stock 6,121 6,483
Capital in excess of par value -- 62,255
Retained earnings 545,099 512,253
Cumulative translation adjustment (2,689) 2,215
----------- ----------
548,531 583,206
----------- ----------
$1,018,703 $ 951,084
=========== ==========
The accompanying notes are an integral part of the financial statements.
17
CONSOLIDATED STATEMENTS OF INCOME
(Amounts in thousands, except per share data) June 29,1997 JUNE 30, 1996 June 25, 1995
Net sales $ 1,704,926 $ 1,603,280 $ 1,554,557
-------------- -------------- --------------
Costs and expenses:
Cost of sales 1,473,667 1,407,608 1,330,410
Selling, general and administrative expense 46,229 45,084 43,116
Interest expense 11,749 14,593 15,452
Interest income (2,219) (6,757) (10,372)
Other income 1,218 (4,390) (9,659)
Non-recurring charge -- 23,826 --
-------------- ------------ -------------
1,530,644 1,479,964 1,368,947
-------------- ------------ -------------
Income before income taxes and extraordinary
item 174,282 123,316 185,610
Provision for income taxes 58,617 44,939 69,439
------------- ----------- ------------
Income before extraordinary item 115,665 78,377 116,171
------------- ---------- ------------
Extraordinary item (net of applicable income
taxes of $3,692) -- 5,898 --
------------- ---------- ------------
Net income $ 115,665 $ 72,479 $ 116,171
============= =========== ============
Per share data:
Primary earnings per share:
Income before extraordinary item $ 1.81 $ 1.18 $ 1.67
Extraordinary item -- .09 --
------------- ----------- ------------
Net income $ 1.81 $ 1.09 $ 1.67
============= =========== ============
Fully diluted net income per share $ 1.81 $ 1.09 $ 1.62
============= =========== ============
The accompanying notes are an integral part of the financial statements.
18
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY
Unrealized
Gains
(Losses)
Capital in Cumulative on
(Amounts in thousands, Shares Common Excess of Retained Translation Certain
except per share data) Outstanding Stock Par Value Earnings Adjustment Investments
Balance June 26, 1994 70,433 $ 7,043 $ 199,959 $385,472 $ (3,060) $ (892)
======= ======= ========= ======== =========== ==========
Purchase of stock (3,362) (336) (83,414) -- -- --
Options exercised 69 7 732 -- -- --
Cash dividends --
$.40 per share -- -- -- (27,681) -- --
Currency translation
adjustments -- -- -- -- 7,475 --
Change in unrealized gains
(losses) on certain
investments -- -- -- -- -- 2,026
Net income -- -- -- 116,171 -- --
------- ------ -------- -------- -------
Balance June 25, 1995 67,140 6,714 117,277 473,962 4,415 1,134
======= ====== ======== ======== ======= ======
Purchase of stock (2,347) (235) (55,315) -- -- --
Options exercised 36 4 242 -- -- --
Conversion of 6%
subordinated notes 2 -- 51 -- -- --
Cash dividends --
$.52 per share -- -- -- (34,188) -- --
Currency translation
adjustments -- -- -- -- (2,200) --
Change in unrealized gains
(losses) on certain
investments -- -- -- -- -- (1,134)
Net income -- -- -- 72,479 -- --
------- ------ ------- -------- -------- -------
Balance June 30, 1996 64,831 6,483 62,255 512,253 2,215 --
======= ====== ======= ======== ======== ========
Purchase of stock (3,901) (390) (64,786) (55,824) -- --
Options exercised 280 28 2,531 (1,404) -- --
Stock option tax benefit -- -- -- 2,307 -- --
Cash dividends --
$.44 per share -- -- -- (27,898) -- --
Currency translation
adjustments -- -- -- -- (4,904) --
Net income -- -- -- 115,665 -- --
------ ------ ------- -------- -------- -----
Balance June 29, 1997 61,210 $6,121 $ -- $545,099 $(2,689) $ --
====== ====== ======= ======== ======== =====
The accompanying notes are an integral part of the financial statements.
19
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Amounts in thousands) June 29, 1997 June 30, 1996 June 25, 1995
Cash and cash equivalents at beginning of year $ 24,473 $ 60,350 $ 80,653
Operating activities:
Net income 115,665 72,479 116,171
Adjustments to reconcile net income to net cash provided
by operating activities:
Extraordinary item (net of applicable income taxes) -- 5,898 --
Income tax effect of extraordinary item -- 3,692 --
Depreciation and amortization 87,899 81,889 75,805
Non-cash portion of non-recurring charge -- 23,826 --
Gain on sale of investments -- (4,476) (6,697)
Deferred income taxes 17,157 (4,795) 7,505
Other 314 4,263 (2,316)
Changes in assets and liabilities, excluding effects
of acquisition and foreign currency adjustments:
Receivables (26,441) 9,428 (11,665)
Inventories (10,032) 13,640 (42,751)
Other current assets (462) 987 27
Payables and accruals 9,260 (5,865) 19,804
Income taxes (9,524) 490 (542)
----------- ---------- ----------
Net -- operating activities 183,836 201,456 155,341
----------- ---------- ----------
Investing activities:
Capital expenditures (143,176) (133,967) (88,941)
Purchase of investments -- (60,474) (93,671)
Acquisition -- (48,444) --
Sale of capital assets 3,046 2,290 3,479
Sale of investments -- 149,015 94,379
Sale of subsidiary -- -- 13,798
Proceeds from notes receivable 768 11,444 5,311
Other (2,250) -- 3
----------- ---------- ---------
Net -- investing activities (141,612) (80,136) (65,642)
----------- ---------- ---------
Financing activities:
Borrowing of long-term debt 187,500 225,000 --
Repayments of long-term debt (100,513) (284,949) --
Premium paid on early retirement of debt -- (7,657) --
Issuance of Company stock 3,462 246 739
Stock option tax benefit 2,307 -- --
Purchase and retirement of Company stock (121,000) (55,550) (83,750)
Cash dividends paid (27,898) (34,188) (27,681)
----------- ---------- ----------
Net -- financing activities (56,142) (157,098) (110,692)
----------- ---------- ----------
Currency translation adjustment (1,041) (99) 690
----------- ---------- ----------
Net increase (decrease) in cash and cash equivalents (14,959) (35,877) (20,303)
----------- ---------- ---------
Cash and cash equivalents at end of year $ 9,514 $ 24,473 $ 60,350
=========== ========== ==========
Supplemental cash flow information:
Cash payments for:
Interest, net of amounts capitalized $ 12,064 $ 18,520 $ 14,777
Income taxes, net of refunds 45,726 38,427 61,495
Non-cash investing and financing activities:
Note receivable obtained from sale of an affiliate $ -- $ -- $ 10,436
Redemption of 6% convertible subordinated notes -- 1,983 --
The accompanying notes are an integral part of the financial statements.
20
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1 ACCOUNTING POLICIES AND FINANCIAL STATEMENT INFORMATION
PRINCIPLES OF CONSOLIDATION: The consolidated financial statements include
the accounts of the Company and all subsidiaries. The accounts of all foreign
subsidiaries have been included on the basis of fiscal periods ended three
months or less prior to the dates of the consolidated balance sheets. All
significant intercompany accounts and transactions have been eliminated.
FISCAL YEAR: The Company's fiscal year is the fifty-two or fifty-three
weeks ending the last Sunday in June. The current year ended June 29, 1997,
consisted of fifty-two weeks. The year ended June 30, 1996, consisted of
fifty-three weeks and the year ended June 25, 1995, consisted of fifty-two
weeks.
RECLASSIFICATION: The Company has reclassified the presentation of certain
prior year information to conform with the current presentation format.
REVENUE RECOGNITION: Substantially all revenue from sales is recognized at
the time shipments are made.
FOREIGN CURRENCY TRANSLATION: Assets and liabilities of foreign subsidiaries
are translated at year-end rates of exchange and revenues and expenses are
translated at the average rates of exchange for the year. Gains and losses
resulting from translation are accumulated in a separate component of
shareholders' equity. Gains and losses resulting from foreign currency
transactions (transactions denominated in a currency other than the subsidiary's
functional currency) are included in net income.
CASH AND CASH EQUIVALENTS: Cash equivalents are defined as short-term
investments having an original maturity of three months or less.
RECEIVABLES: Certain customer accounts receivable are factored without
recourse with respect to credit risk. An allowance for losses is provided
for known and potential losses rising from yarn quality claims and for
customers not factored based on a periodic review of these accounts. Reserve
for such losses was $5.5 million at June 29, 1997, and $6.6 million at June
30, 1996.
INVENTORIES: The Company utilizes the last-in, first-out (LIFO) method for
valuing certain inventories representing 61% of all inventories at June 29,
1997, and the first-in, first-out (FIFO) method for all other inventories.
Inventory values computed by the LIFO method are lower than current market
values. Inventories valued at current or replacement cost would have been
approximately $13.9 million and $13.1 million in excess of the LIFO valuation at
June 29, 1997, and June 30, 1996, respectively. Finished goods, work in process,
and raw materials and supplies at June 29, 1997, and June 30, 1996, amounted to
$72.0 million and $60.4 million; $11.8 million and $13.3 million; and $58.5
million and $59.2 million, respectively.
PROPERTY, PLANT AND EQUIPMENT: Property, plant and equipment are stated at
cost. Depreciation is computed for asset groups primarily utilizing the
straight-line method for financial reporting and accelerated methods for
tax reporting.
OTHER NONCURRENT ASSETS: Other noncurrent assets at June 29, 1997, and June
30, 1996, consist primarily of the cash surrender value of key executive life
insurance policies ($6.5 million and $6.0 million, respectively), and goodwill
related to acquisitions ($32.1 million and $32.5 million, respectively).
The goodwill is being amortized on a straight-line method over a fifteen year
period. Accumulated amortization at June 29, 1997, was $3.7 million.
LONG-LIVED ASSETS: Long-lived assets, including goodwill, are reviewed
for impairment whenever events or changes in circumstances indicate that the
carrying amount may not be recoverable. If the sum of the expected future
undiscounted cash flows is less than the carrying amount of the asset, a
loss is recognized for the difference between the fair value and carrying
value of the asset.
INCOME TAXES: The Company and its domestic subsidiaries file a consolidated
federal income tax return. Income tax expense is computed on the basis of
transactions entering into pretax operating results. Deferred income taxes
have been provided for the tax effect of temporary differences between
financial statement carrying amounts and the tax bases of existing assets and
liabilities. Income taxes have not been provided on the undistributed
earnings of certain foreign subsidiaries as such earnings are deemed to be
permanently invested.
EARNINGS PER SHARE: Earnings per common and common equivalent share are
computed on the basis of the weighted average number of common shares
outstanding plus, to the extent applicable, common stock equivalents. Average
common and common equivalent shares for primary earnings per share were
63,935,335, 66,211,344 and 69,542,155 for fiscal years 1997, 1996 and 1995,
respectively. Fully diluted earnings per share amounts are based on 64,008,751,
66,251,444 and 77,302,035 shares for 1997, 1996 and 1995, respectively. The
effect of the convertible subordinated notes, which were redeemed in the fourth
quarter of the prior year, was antidilutive for the fiscal year 1996.
Accordingly, fully diluted weighted average shares have been reported consistent
with the primary weighted average shares with respect to these notes.
STOCK-BASED COMPENSATION: In October 1995, the FASB issued Statement No. 123,
"Stock-Based Compensation," (SFAS 123). SFAS 123 was effective beginning with
the Company's first quarter of fiscal year 1997. With adoption of SFAS 123, the
Company continues to measure compensation expense for its stock-based employee
compensation plans using the intrinsic value method prescribed by APB Opinion
No. 25, "Accounting for Stock Issued to Employees." Had the fair value-based
method encouraged by SFAS 123 been applied in measuring compensation expense,
net income in fiscal 1997 and 1996 would have been $115.1 million, or $1.80 per
share, and $70.1 million, or $1.06 per share, respectively.
21
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
The fair value amounts utilized in the previous paragraph were determined
using the Black Scholes option-pricing model which values options based on
the stock price at the grant date, the expected life of the option, the
estimated volatility of the stock, expected dividend payments, and the
risk-free interest rate over the expected life of the option. The maximum term
of the option (10 years) was used as the expected life of the option. The
expected volatility was estimated based on stock prices for the twenty-six
quarters preceding the grant date. The dividend yield was calculated by
averaging the historical dividend yield over the prior four fiscal
years. The risk-free interest rate was the rate available on zero coupon
U.S. government issues with a term equal to the remaining term for each grant.
The effects of applying SFAS 123 on the proforma disclosure of net income and
earnings per share are not likely representative of the effects on future years
due to the vesting schedule associated with certain grants which span over
several fiscal years.
RECENT ACCOUNTING PRONOUNCEMENTS: In June 1996, the FASB issued Statement of
Financial Accounting Standards No. 125, "Accounting for Transfers and Servicing
of Financial Assets and Extinguishments of Liabilities," (SFAS 125). SFAS 125
became effective for transfers and servicing of financial assets and
extinguishments of liabilities beginning with the Company's third quarter of
fiscal 1997. The adoption of this Standard did not and is not expected to impact
the Company's consolidated results of operations, financial position or cash
flows.
In February 1997, the FASB issued Statement of Financial Accounting Standards
No. 128, "Earnings per Share," (SFAS 128) which is required to be adopted in the
December 1997 fiscal quarter. At that time, the Company will be required to
change the method currently used to compute earnings per share and to restate
all prior periods. Under the new requirements for calculating basic earnings per
share, the dilutive effect of stock options will be excluded. The Company has
determined that the impact of SFAS 128 will not have a significant effect on the
calculation of basic and diluted earnings per share.
USE OF ESTIMATES: The preparation of financial statements in conformity with
generally accepted accounting principles requires management to make estimates
and assumptions that affect the amounts reported in the financial statements and
accompanying notes. Actual results could differ from those estimates.
NOTE 2 ACQUISITION
The acquisition of the Norlina Division of Glen Raven Mills, Inc. was
consummated on November 17, 1995. The acquisition, which is not deemed
significant to the Company's consolidated net assets or the results of
operations, has been accounted for as a purchase and accordingly, the net
assets and operations have been included in the Company's consolidated financial
statements beginning on the date the acquisition was consummated. The purchase
price of $48.4 million was allocated to the net assets acquired with the excess
of cost over fair value of the net assets acquired being approximately $35.7
million after giving effect to all purchase adjustments. The excess of cost over
fair value of net assets acquired is being amortized on a straight-line basis
over 15 years.
NOTE 3 NON-RECURRING CHARGE
During the fiscal 1996 first quarter, the Company recognized a non-recurring
charge to earnings of $23.8 million ($14.9 million after-tax or $0.23 per share)
related to restructuring plans to further reduce the Company's cost structure
and improve productivity through the consolidation of certain manufacturing
operations and the disposition of under-utilized assets. The restructuring plan
focused on the consolidation of production facilities acquired via mergers
during the preceding four years. As part of the restructuring action, the
Company closed its spun cotton manufacturing facilities in Edenton and Mount
Pleasant, North Carolina with the majority of the manufacturing production being
transferred to other facilities. The significant components of the non-recurring
charge include $2.4 million of severance and other employee-related costs from
the termination of employees and a $21.4 million write-down to estimated fair
value less the cost of disposal of under-utilized assets and consolidated
facilities to be disposed. Costs associated with the relocation of equipment or
personnel are being expensed as incurred.
22
In connection with the plan of restructuring and corporate consolidation, the
Company has incurred as of June 29, 1997, severance and other employee-related
costs of $2.0 million associated with the termination of 574 employees. All
aspects of the consolidation plan associated with the termination of employees
has been accomplished. The remaining reserve of $0.4 million associated with
severance and other employee related costs has been reclassified to the reserve
for estimated losses from the disposal of assets and consolidated facilities.
Through June 29, 1997, the Company has charged $16.9 million against the reserve
established for anticipated losses from the disposal of under-utilized assets
and consolidated facilities. The remaining reserve at June 29, 1997, amounts to
$4.9 million. The Company has completed the majority of these restructuring
efforts and anticipates no material differences in actual charges compared to
its original estimates.
NOTE 4 EXTRAORDINARY CHARGE
During the fiscal 1996 fourth quarter, the Company recognized an
extraordinary after-tax charge of $5.9 million or $0.09 per share as a result of
the redemption of the $230 million in 6% convertible subordinated notes due
2002. In accordance with the debt agreement, the note holders had an option to
convert their notes at a conversion rate of 33.7 shares of common stock for each
$1,000 principal amount of notes. Notes aggregating $51,000 were converted into
1,718 shares of common stock in accordance with this provision. The remaining
notes, totaling $229.9 million, were redeemed at 103.33% of principal amount,
with accrued interest to the date of redemption.
NOTE 5 LONG-TERM DEBT
A summary of long-term debt follows:
June 29, June 30,
(Amounts in thousands) 1997 1996
- ----------------------------------------------------------
Revolving credit facility $230,000 $170,000
Sale-leaseback obligation 26,988 --
-------- --------
Total debt 256,988 170,000
Current maturities 1,189 --
-------- --------
Total long-term debt $255,799 $170,000
======== ========
The Company entered a $400 million revolving credit facility dated April 15,
1996, with a group of financial institutions that extends through April 15,
2001. The rate of interest charged is adjusted quarterly based on a pricing grid
which is a function of the ratio of the Company's debt to earnings before
income taxes, depreciation, amortization and other non-cash charges. The credit
facility provides the Company the option of borrowing at a spread over the base
rate (as defined) for base rate loans or the Adjusted London Interbank Offered
Rate (LIBOR) for Eurodollar loans. The weighted average interest rates for the
fiscal year 1997 and the period from inception of the revolving credit facility
to June 30, 1996, were 5.75% and 5.63%, respectively. Interest capitalized
during fiscal 1997 was $0.9 million. The Company pays a quarterly facility fee
ranging from 0.090%-0.150%, in accordance with the pricing grid, of the total
amount available under the revolving credit facility. At June 29, 1997, the
interest rate on the $230.0 million of debt outstanding was 5.87%.
The revolving credit facility also provides the Company the option to
borrow funds competitively from the individual lenders, at their discretion,
provided that the sum of the competitive bid loans and the aggregate funds
committed under the revolving credit facility do not exceed the total
committed amount. The revolving credit facility allows the Company to reduce
the outstanding commitment in whole or in part upon satisfactory notice up to
an amount no less than the sum of the aggregate competitive bid loans and the
total committed loans. Any such partial terminations are permanent. The
Company may also elect to prepay loans in whole or in part. Amounts paid in
accordance with this provision may be reborrowed.
The terms of the revolving credit facility contain, among other provisions,
requirements for maintaining certain net worth and other financial ratios and
specific limits or restrictions on additional indebtedness, liens and merger
activity. Provisions under this agreement are not considered restrictive to
normal operations or anticipated stockholder dividends.
On May 20, 1997, the Company entered into a sales-leaseback agreement with a
financial institution whereby land, buildings and associated real and personal
property improvements of certain manufacturing facilities were sold to the
financial institution and will be leased by the Company over a sixteen year
period. Sales proceeds aggregated $27.5 million. The terms of the agreement
provide for an
23
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
early purchase option at the end of year nine. If the agreement has not been
terminated before the end of the lease term, by exercising the early purchase
option or otherwise, the Company is required to purchase the leased properties
at the end of the lease term for an amount equal to the fair market value as
defined in the agreement. This transaction has been recorded as a direct
financing arrangement. Payments are due semi-annually and are in varying
amounts in accordance with the agreement. Principal payments required in
years one through five following the fiscal year end June 29, 1997, are $1.2
million in 1998, $0.7 million in 1999, $0.7 million in 2000, $0.8 million in
2001 and $0.8 million in 2002. The interest rate implicit in the agreement is
7.84%.
The fair value of the Company's long-term debt at June 29, 1997, approximates
its carrying value.
NOTE 6 INCOME TAXES
The provision for income taxes before extraordinary items consisted of
the following:
June June June
29, 30, 25,
(Amounts in thousands) 1997 1996 1995
- --------------------------------------------------------------
Currently payable:
Federal $34,235 $42,289 $51,597
State 6,074 6,953 9,501
Foreign 1,151 492 836
------- ------- -------
Total current 41,460 49,734 61,934
-------- -------- --------
Deferred:
Federal 18,929 (4,080) 6,643
State (1,994) (604) 983
Foreign 222 (111) (121)
-------- -------- --------
Total deferred 17,157 (4,795) 7,505
-------- -------- --------
Income taxes before
extraordinary item $58,617 $44,939 $69,439
======== ======== =======
Income taxes were 33.6%, 36.4% and 37.4% of pretax earnings in fiscal 1997,
1996 and 1995, respectively. A reconciliation of the provision for income taxes
before extraordinary items with the amounts obtained by applying the federal
statutory tax rate is as follows:
June 29, June 30, June 25,
1997 1996 1995
Federal statutory tax rate 35.0 % 35.0 % 35.0 %
State income taxes net of
federal tax benefit 3.2 3.3 3.1
State tax credits net of
federal
tax benefit (1.7) -- --
Foreign taxes less than
domestic rate (1.8) (0.8) (0.7)
Foreign Sales Corporation tax
benefit (0.5) (0.9) (0.6)
Research and experimentation
credit -- (0.6) --
Nondeductible expenses
and other (0.6) 0.4 0.6
------- ------- ------
Effective tax rate 33.6 % 36.4 % 37.4 %
======= ======= ======
The deferred income taxes reflect the net tax effects of temporary
differences between the bases of assets and liabilities for financial reporting
purposes and their bases for income tax purposes. Significant components of the
Company's deferred tax liabilities and assets as of June 29, 1997, and June 30,
1996, were as follows:
June 29, June 30,
(Amounts in thousands) 1997 1996
- ------------------------------------------------------------
Deferred tax liabilities:
Property, plant and equipment $62,899 $43,172
Other items -- 324
------- -------
Total deferred tax liabilities 62,899 43,496
------- -------
Deferred tax assets:
Accrued liabilities and valuation
reserves 4,421 6,683
State tax credits 2,963 --
Other items 4,695 4,588
------- -------
Total deferred tax assets 12,079 11,271
------- -------
Net deferred tax liabilities $50,820 $32,225
======= =======
24
NOTE 7 COMMON STOCK
Shares authorized were 500 million in 1997 and 1996. Common shares
outstanding at June 29, 1997, and June 30, 1996, were 61,209,588 and 64,831,366,
respectively.
The Company has Incentive Stock Option Plans with 2,446,591 shares reserved
at June 29, 1997. There remain 1,000,000 options available for grant at year
end. The transactions for 1997, 1996 and 1995 were as follows:
1997 1996 1995
- -------------------------------------------------------------------
Shares under
option -- beginning
of year 1,793,378 1,739,968 1,122,694
Granted -- 165,500 773,317
Exercised (1997 --
$9.79) (346,787) (55,500) (68,110)
Canceled (from
$10.19 to $24.38) -- (56,590) (87,933)
------------- ------------ -------------
Shares under
option -- end of
year 1,446,591 1,793,378 1,739,968
============= ============= =============
Options
exercisable -- end
of year 1,446,591 1,687,018 1,328,900
============= ============= =============
Option price range $4.80-$25.38 $3.80-$25.38 $3.80-$25.25
============= ============= =============
Option price range
for options
exercised $3.80-$25.38 $10.19-$24.67 $10.19-$23.88
============= ============== ==============
The Company also has a Non-Qualified Stock Option Plan with 1,693,519 shares
reserved at June 29, 1997. There remain 534,500 options available for grant at
year end. Transactions for 1997, 1996 and 1995 were as follows:
1997 1996 1995
- -------------------------------------------------------------------
Shares under
option --
beginning of year 693,519 738,519 331,033
Granted (1997 --
$28.64) 465,500 -- 408,519
Exercised -- -- (1,033)
Canceled ($25.83) -- (45,000) --
------------- ------------ -------------
Shares under
option --
end of year 1,159,019 693,519 738,519
============== ============= =============
Options
exercisable -- end
of year 888,519 693,519 338,519
============== ============= =============
Option price range $23.88-$31.00 $23.88-$25.83 $10.57-$25.83
============== ============= =============
Option price range for
options exercised $10.57
==============
All options granted vest on the date of issuance except for 270,500
non-qualified options awarded in fiscal 1997 which have a two-year vesting
schedule. The first one-third are exercisable as of October 17, 1997. The
remaining two-thirds are exercisable one-third on April 17, 1998, and one-third
on April 17, 1999.
The per-share weighted average fair value of options granted during the 1997
fiscal year was $13.32. The weighted average exercise price of options
outstanding at June 29, 1997, was $23.50 per share. The weighted average
remaining contractual life for options outstanding at June 29, 1997, was 6.6
years.
NOTE 8 RETIREMENT PLANS
The Company has a qualified profit-sharing plan, which provides benefits for
eligible salaried and hourly employees. The annual contribution to the plan,
which is at the discretion of the Board of Directors, amounted to $17.0 million
in each of 1997, 1996 and 1995. The Company leases its corporate office building
from its profit-sharing plan through an independent trustee.
NOTE 9 LEASES AND COMMITMENTS
In addition to the direct financing sales-leaseback obligation described in
note 5 above, the Company is obligated under operating leases consisting
primarily of real estate and equipment. Future obligations for minimum rentals
under the leases during fiscal years after June 29, 1997, are $5.0 million in
1998, $4.1 million in 1999, $4.0 million in 2000, $4.1 million in 2001 and $0.6
million in 2002. Rental expense was $5.0 million, $4.4 million and $3.7 million
for the fiscal years 1997, 1996 and 1995, respectively. The Company had
committed approximately $220.0 million for the purchase of equipment and
facilities at June 29, 1997.
25
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 10 BUSINESS SEGMENTS, FOREIGN OPERATIONS AND CONCENTRATIONS OF
CREDIT RISK
The Company and its subsidiaries are engaged predominantly in the processing
of yarns by: texturing of synthetic filament polyester and nylon fiber, and
spinning of cotton and cotton blend fibers with sales domestically and
internationally, mostly to knitters and weavers for the apparel, industrial,
hosiery, home furnishing, automotive upholstery and other end-use markets.
The Company's domestic operations serve customers principally located in the
southeastern United States as well as international customers located primarily
in North America, western Europe, and South America. During fiscal 1997 the
Company did not have sales to any one customer in excess of 10% of consolidated
revenues. The Company had sales to one customer of approximately 12% in 1996 and
11% in 1995. Export sales, excluding those to its international operations in
Ireland, aggregated $203.8 million in 1997, $173.1 million in 1996 and $138.3
million in 1995. Net sales, pre-tax income from operations and identifiable
assets for the Company's domestic operations for 1997, 1996 and 1995 totaled
$1,564.8 billion, $1,474.0 billion and $1,466.1 billion; $161.6 million, $119.3
million and $179.7 million; and $906.5 million, $833.5 million and $948.4
million, respectively.
The Company's foreign operations are comprised primarily of its manufacturing
facility in Ireland and had net sales of $140.1 million, $129.3 million and
$88.5 million; pretax income of $12.7 million, $4.0 million and $5.9 million;
and identifiable assets of $112.2 million, $117.6 million and $92.5 million in
1997, 1996 and 1995, respectively.
The concentration of credit risk for the Company with respect to trade
receivables is mitigated due to the large number of customers, dispersion
across different industries and geographic regions and its factoring
arrangements.
NOTE 11 DERIVATIVE FINANCIAL INSTRUMENTS AND FAIR VALUE OF FINANCIAL
INSTRUMENTS
The Company enters into commodity futures contracts as considered appropriate
to reduce the risk of future price increases in connection with the purchase of
cotton for projected manufacturing requirements. These forward contracts are
accounted for as hedges and, accordingly, gains and losses are deferred and
recognized in cost of sales as a component of the product cost. At June 29,
1997, and June 30, 1996, there were no significant futures contracts
outstanding.
The Company conducts its business in various foreign currencies. As a result,
it is subject to the transaction exposure that arises from foreign exchange rate
movements between the dates that foreign currency transactions are recorded
(export sales and purchases) and the dates they are consummated (cash receipts
and cash disbursements in foreign currencies). The Company utilizes some natural
hedging to mitigate these transaction exposures. The Company also enters into
currency forward contracts to hedge currency exposures. These contracts are
principally entered into for the purchase of inventory and equipment and the
sale of Company products into export markets. Counter-parties for these
instruments are major financial institutions.
Currency forward contracts are entered to hedge exposure for sales in foreign
currencies based on specific sales orders with customers or by estimated sales
activity for a future time period. Generally, 60-80% of the sales value of these
orders are covered by forward contracts. Maturity dates of the forward contracts
attempt to match anticipated receivable collections. The Company marks the
outstanding accounts receivable and forward contracts to market at month end and
any realized and unrealized gains or losses are recorded as other income and
expenses. At June 29, 1997, the fair market value of the forward contracts
exceeded contract value by approximately $171 thousand.
The Company also enters currency forward contracts for committed equipment
and inventory purchases. Generally 50-75% of the asset cost is covered by
forward contracts. Forward contracts are matched with the anticipated date of
delivery of the assets and gains and losses are recorded as a component of the
asset cost. At June 29, 1997, there were approximately $2.4 million in
unrecognized gains on such forward contracts. At June 29, 1997, and June 30,
1996, the U.S. dollar equivalent of the contract value of these forward currency
exchange agreements was $64.4 million and $21.6 million, respectively. The
agreements at June 29, 1997, mature through June 1999.
The following methods were used by the Company in estimating its fair
value disclosures for financial instruments:
Cash and cash equivalents, trade receivables and trade payables -- The
carrying amounts approximate fair value because of the short maturity of
these instruments.
26
Long-term debt -- The fair value of the Company's borrowings is estimated
based on the quoted market prices for the same or similar issues or on the
current rates offered to the Company for debt of the same remaining maturities.
Foreign currency contracts -- The fair value is based on quotes obtained from
brokers or reference to publicly available market information.
Commodity futures contracts -- The fair value is based on quotes obtained
from brokers.
NOTE 12 SUBSEQUENT EVENTS
On June 30, 1997, the Company entered into a Contribution Agreement (the
"Agreement") with Parkdale Mills, Inc. ("Parkdale") that set forth the terms and
conditions by which Parkdale and the Company contributed all of the assets of
their spun cotton yarn operations utilizing open-end and air jet spinning
technologies to a newly created limited liability company named Parkdale
America, LLC (the "LLC"). In accordance with the Agreement, each entity's
inventory, owned real and tangible personal property and improvements thereon
and the Company's leased real property associated with these operations were
contributed to the LLC. Additionally, the Company contributed $32.9 million in
cash to the LLC on June 30, 1997, and is required to contribute $10.0 million on
June 30, 1998, and $10.0 million on June 30, 1999, whereas Parkdale contributed
cash of $51.6 million on June 30, 1997. The LLC assumed certain long-term debt
obligations of Unifi and Parkdale in the amounts of $23.5 million and $46.0
million, respectively. In exchange for the assets contributed to the LLC and the
liabilities assumed by the LLC, Unifi received a 34% ownership interest in the
LLC and Parkdale received a 66% ownership in the LLC.
The following proforma condensed balance sheet reflects the Company's
investment in Parkdale America, LLC as if the transaction was consummated as of
June 29, 1997:
(Amounts in thousands)
Assets:
Current assets $ 348,963
Property, plant and equipment, net 464,473
Investment in affiliate 181,119
Other noncurrent assets 40,632
----------
$1,035,187
==========
Liabilities and Shareholders' Equity:
Current liabilities $ 163,804
Due to LLC 20,000
Long-term debt 255,732
Deferred income taxes 47,120
Shareholders' equity 548,531
----------
$1,035,187
==========
On June 30, 1997, the excess of the Company's investment over the Company's
equity in the underlying net assets of the LLC is estimated to be approximately
$60 million, which we anticipate amortizing on a straight-line basis over 30
years. Fiscal year 1997 sales from the Company's spun cotton operations
contributed to the LLC amounted to $304.3 million.
27
MANAGEMENT'S REVIEW AND ANALYSIS OF OPERATIONS AN FINANCIAL POSITION
FISCAL 1997
Consolidated net sales increased 6.3% from $1.603 billion in 1996 to $1.705
billion in 1997. The current fiscal year included fifty-two weeks compared to
the previous year's fifty-three weeks. Growth in net sales was achieved by a
7.2% increase in unit volume offset slightly by a modest decline in per unit
average sales prices.
Domestically, unit volumes increased 6.3% while average per unit sales prices
remained stable. Increased unit volumes were experienced across all of our
sales-yarn operations. Fiscal 1997 unit sales growth benefited from phased-in
production of our new polyester texturing facility in Yadkinville, North
Carolina, which was substantially completed at year end, and from realizing a
full year's sales activity after purchasing the texturing operations of Glen
Raven Mills, Inc.'s Norlina Division in November 1995. In addition, growth in
export sales was experienced year-over-year contributing to the increase in unit
volume.
Internationally, increased unit growth was offset by lower per unit average
sales prices resulting in a net 8.3% increase in sales. Sales from foreign
operations are denominated in local currencies and are hedged in part by the
purchases of raw materials and services in those same currencies. As described
in Note 11 to the consolidated financial statements, currency exchange rate risk
is mitigated by the utilization of foreign currency forward contracts.
Additionally, the net asset exposure is hedged by borrowings in local currencies
which minimize the risk of currency fluctuations. We do not enter into
derivative financial instruments for trading purposes.
Gross margin increased from 12.2% last year to 13.6% this year. The increased
gross margin of 1.4% reflects lower operating costs due to improved efficiency
and volume increases and raw material cost reductions based on product mix, as a
percentage of net sales.
Selling, general and administrative expense as a percentage of net sales
decreased from 2.8% last year to 2.7% this year. On a dollar-basis, selling,
general and administrative expense increased $1.1 million to $46.2 million, or
2.5%. Increased selling, general and administrative expenses are primarily
attributable to higher information systems' costs and professional fees
associated with various technology and corporate reengineering improvement
efforts.
Interest expense declined $2.8 million or 19.5%, from $14.6 million in 1996
to $11.7 million in 1997. In the fourth quarter of the prior year, $230 million
of 6% convertible subordinated notes were redeemed utilizing the proceeds from a
$400 million, five year, revolving credit facility. The effective interest rate
of the revolving credit facility has remained below the convertible debt
interest rate and the average debt level outstanding throughout fiscal 1997 has
also been lower than the prior year resulting in reduced interest expense.
Interest income declined from $6.8 million in 1996 to $2.2 million in 1997. This
change reflects lower levels of invested funds which were primarily used for
capital expenditures and the purchase and retirement of Company common stock.
Net other income and expense changed unfavorably by $5.6 million from $4.4
million of income in 1996 to $1.2 million of expense in 1997. In the prior year,
gains were recorded from the sale of capital assets and investments.
In the first quarter of fiscal 1996, the Company announced restructuring
plans to further reduce the Company's cost structure and improve productivity
through the consolidation of certain manufacturing operations and the
disposition of under-utilized assets. The estimated cost of restructuring
resulted in a non-recurring charge to earnings of $23.8 million or an after-tax
charge to earnings of $14.9 million ($.23 per share). The Company has completed
the majority of these restructuring efforts and anticipates no material
differences in actual charges compared to its original estimates.
The effective tax rate decreased from 36.4% in 1996 to 33.6% in 1997. The
improvement in the effective tax rate is primarily due to the realization of
state tax credits during the current year and the improved operating results of
foreign subsidiaries which are taxed at rates below those of U.S. operations.
As a result of the above, the Company realized during the current year net
income of $115.7 million, or $1.81 per share, compared to $72.5 million, or
$1.09 per share, for the corresponding prior fiscal year. Before the effects of
the non-recurring and the extraordinary charges recognized in the prior year,
earnings would have been $93.3 million or $1.41 per share.
As described in Note 12 to the consolidated financial statements, on June 30,
1997, the Company entered into a Contribution Agreement (the "Agreement") with
Parkdale Mills, Inc. ("Parkdale") that set forth the terms and conditions by
which Parkdale and the Company contributed all of the assets of their spun
cotton yarn operations utilizing open-end and air jet spinning technologies to a
newly created limited liability company named Parkdale America, LLC (the "LLC").
The Agreement specified that each entity's inventory, owned real and tangible
personal property and improvements thereon and the Company's leased real
property associated with these operations were to be contributed to the LLC.
Additionally, the Company contributed cash to the LLC of $32.9 million on June
30, 1997, and is committed to contribute cash of $10.0 million on June 30, 1998,
and $10.0 million on June 30, 1999, whereas Parkdale contributed cash of $51.6
million on June 30, 1997. The LLC assumed certain long-term debt obligations of
the Company and Parkdale in the amounts of $23.5 million and $46.0 million,
respectively. In exchange for the assets contributed to the LLC and the
liabilities assumed by the LLC, the Company received a 34% ownership interest in
the LLC and Parkdale received a 66% ownership interest in the LLC.
Spun cotton operations contributed to the LLC had net sales of $304.4 million
during fiscal year 1997. Management expects that the consolidation of spun
cotton operations in the LLC will provide operating efficiencies and economies
of scale that should translate to improved operating results for this business
which had operating income of $4.7 million in fiscal 1997.
28
On August 11, 1997, the Company announced that it had signed a letter of
intent to purchase Spanco Yarns, a manufacturer of covered yarns. The purchase
is subject to certain conditions and approvals. The acquisition, if consummated,
will not be material to the Company's consolidated financial position or results
of operations.
In June 1996, the FASB issued Statement of Financial Accounting Standards No.
125, "Accounting for Transfers and Servicing of Financial Assets and
Extinguishments of Liabilities," (SFAS 125). SFAS 125 became effective for
transfers and servicing of financial assets and extinguishments of liabilities
beginning with the Company's third quarter of fiscal 1997. The adoption of this
Standard did not and is not expected to impact the Company's consolidated
results of operations, financial position or cash flows.
In February 1997, the FASB issued Statement of Financial Accounting Standards
No. 128, "Earnings per Share," (SFAS 128) which is required to be adopted in the
December 1997 fiscal quarter. At that time, the Company will be required to
change the method currently used to compute earnings per share and to restate
all prior periods. Under the new requirements for calculating basic earnings per
share, the dilutive effect of stock options will be excluded. The Company has
determined that the impact of SFAS 128 will not have a significant effect on the
calculation of basic and diluted earnings per share.
FISCAL 1996
Consolidated net sales increased 3.1% from $1.555 billion in 1995 to $1.603
billion in 1996. The growth in net sales was accomplished by a 6.4% increase in
per unit average sales price slightly offset by a decline in unit volume of
3.1%. The decline in unit volume corresponds with the general softness
experienced by the retail sector during the current year.
Our domestic operations experienced an overall decline in unit volume of 6.2%
in 1996. Average per unit sales price for these operations increased
approximately 7.5% during this period reflecting a change in product mix to
lower-volume, higher-priced products and in response to increased raw material
costs. Domestic polyester texturing capacity will increase through the 1997
fiscal year as the Company's construction of a new texturing plant in
Yadkinville, North Carolina comes on line. Sales growth of 45.4% in our
international operations reflects increased capacity due to expansion and higher
average unit sales prices.
Cost of goods sold as a percentage of net sales increased from 85.6% last
year to 87.8% this year. On a per unit basis, increases in raw material,
packaging and manufacturing costs and depreciation expense together with reduced
unit volume offset the effect of higher average sales prices.
Selling, general and administrative expenses as a percentage of net sales in
1996 remained consistent with the prior year at 2.8%. On a dollar basis,
selling, general and administrative expenses increased 4.6% from $43.1 million
in 1995 to $45.1 million in 1996. This increase primarily reflects our on going
efforts to enhance our information systems to improve the operating performance
throughout the Company and the level of service to our customers.
Interest expense declined $0.9 million or 5.6%, from $15.5 million in 1995 to
$14.6 million in 1996. In the fourth quarter of the current year the $230
million of 6% convertible subordinated notes were redeemed. The redemption was
funded by the proceeds from a $400 million, five-year revolving credit facility,
which resulted in a lower effective interest rate than the convertible notes.
The decrease in the interest rate in combination with the reduction in the debt
level to $170 million at June 30, 1996, contributed to the decline in interest
expense. Interest income declined from $10.4 million in 1995 to $6.8 million in
1996. This change reflects lower levels of invested funds which were used for
capital expenditures, acquisitions, long-term debt extinguishment and the
purchase and retirement of Company common stock. Other income declined $5.3
million from $9.7 million in 1995 to $4.4 million in 1996. In the prior year,
gains were recognized from the sale of equity affiliates and capital assets in
excess of current year gains from the sale of short-term investments and capital
assets.
In the first quarter of the current year, the Company recorded a
non-recurring charge of $23.8 million, or an after-tax charge to earnings of
$14.9 million ($0.23 per share). The significant components of the non-recurring
charge included $2.4 million of severance and other employee-related costs ($1.7
million incurred through June 30, 1996, associated with the termination of 275
employees) and a $21.4 million write-down to estimated fair value less the cost
of disposal of under-utilized or consolidated assets ($7.4 million realized as
of June 30, 1996). The charge resulted from the plan to restructure and further
reduce the Company's cost structure and improve productivity through the
consolidation of certain manufacturing facilities and the disposition of
under-utilized assets. As part of the restructuring plan, the Company has
closed, effective November 17, 1995, the spun yarn manufacturing facilities in
Edenton and Mount Pleasant, North Carolina.
The effective tax rate has decreased from 37.4% in 1995 to 36.4% in 1996. The
decline in the effective tax rate is attributed to the increase in earnings of
foreign subsidiaries taxed at rates below the domestic rate and increased
federal tax benefits of the Company's Foreign Sales Corporation and research and
experimentation tax credits.
During the fourth quarter of the current year, the Company recognized an
extraordinary after-tax charge of $5.9 million or $0.09 per share as a result of
the premium paid for the early retirement of the $230 million of 6% convertible
subordinated notes due 2002.
As a result of the above, the Company realized during the current year net
income of $72.5 million, or $1.09 per share compared to corresponding totals in
the prior year of $116.2 million or $1.67 per share. Before the effects of the
non-recurring and the extraordinary charges recognized in the current year, the
Company had net earnings of $93.3 million, or $1.41 per share.
LIQUIDITY AND CAPITAL RESOURCES
Cash provided by operations continues to be the Company's primary source of
funds to finance operating needs and capital expenditures. Cash generated from
operations
29
MANAGEMENT'S REVIEW AND ANALYSIS OF OPERATIONS AN FINANCIAL POSITION
was $183.8 million for fiscal 1997 compared to $201.5 million for fiscal 1996.
Increases in working capital reduced cash flow from operating activities by
$37.2 million for fiscal 1997. The primary components of the working capital
increase, excluding the effects of currency translation, were increases in
accounts receivable of $26.4 million, and inventories of $10.0 million and a
decrease in income taxes payable of $9.5 million. These amounts were partially
offset by an increase in payables and accruals of $9.3 million. The increase in
accounts receivable since the fiscal year ended June 30, 1996, is attributable
to higher sales volume and, specifically, export sales which comprised a higher
percentage of total sales throughout this period. Export sales typically have a
longer collection cycle than domestic sales. Non-cash items increased cash
provided by operations by $105.4 million of which depreciation and amortization
of $87.9 million and the provision for deferred income taxes of $17.2 million
were the primary components.
Working capital levels are more than adequate to meet the operating
requirements of the Company. We ended the current year with working capital of
$216.1 million which included cash and cash equivalents of $9.5 million. The
Company utilized $141.6 million and $56.1 million for net investing and
financing activities, respectively, during fiscal 1997. Significant expenditures
during fiscal 1997 included $143.2 million of capital expenditures for capacity
expansions and upgrading of facilities, $27.9 million for the payment of the
Company's cash dividends and $121.0 million for the purchase and retirement of
Company common stock. The Company utilized proceeds from net borrowings under
its long-term debt agreements of $87.0 million and $7.3 million from other
sources to partially offset these cash expenditures.
On October 21, 1993, the Board of Directors authorized Management to
repurchase up to 15 million shares of Unifi's common stock from time to time at
such prices as Management feels advisable and in the best interest of the
Company. Through June 29, 1997, 9.7 million shares have been repurchased at a
total cost of $262.2 million including 3.9 million shares repurchased in fiscal
1997 pursuant to this Board authorization.
At June 29, 1997, the Company has committed approximately $220.0 million for
the purchase, construction and upgrade of equipment and facilities, which is
scheduled to be incurred during fiscal years 1998 and 1999. Estimated costs
associated with the construction of our previously announced polyester fiber
production facility are included in the $220.0 million commitment. In addition,
the Company has begun construction of a new nylon texturing and covering
facility in Madison, North Carolina. This plant will replace existing capacity
and allow for additional expansion. Certain construction and auxiliary machinery
components of these projects are still being negotiated.
The contribution of the spun yarn operations to Parkdale America, LLC (the
"LLC") for a 34% interest in the LLC subsequent to year end has the potential of
decreasing future cash flows from operations unless distributions of net
earnings are made by the LLC. It is anticipated that distributions sufficient to
satisfy tax obligations will be made; however, there can be no assurances that
such distributions will be made in fiscal 1998. The cash flow from operations of
the spun cotton operations amounted to $29.2 million in fiscal 1997.
Management believes the current financial position of the Company in
connection with its operations and its access to debt and equity markets is
sufficient to meet anticipated capital expenditure, strategic acquisition,
working capital, Company common stock repurchases and other financial needs.
FORWARD-LOOKING STATEMENTS
This Management's Discussion and Analysis of Financial Condition and Results
of Operations and other sections of this Annual Report contain forward-looking
statements about the Company's financial condition and results of operations
that are based on current expectations, estimates and projections about the
markets in which the Company operates, Management's beliefs and assumptions made
by Management. Words such as "expects," "anticipates," "believes," "estimates,"
variations of such words and other similar expressions are intended to identify
such forward-looking statements. These statements are not guarantees of future
performance and involve certain risks, uncertainties and assumptions which are
difficult to predict. Therefore, actual outcomes and results may differ
materially from what is expressed or forecasted in such forward-looking
statements. Readers are cautioned not to place undue reliance on these
forward-looking statements, which reflect Management's judgment only as of the
date hereof. The Company undertakes no obligation to update publicly any of
these forward-looking statements to reflect new information, future events or
otherwise.
Factors that may cause actual outcome and results to differ materially from
these forward-looking statements include availability, sourcing and pricing of
raw materials, pressures on sales prices due to competition and economic
conditions, reliance on and financial viability of significant customers,
technological advancements, changes in construction spending and capital
equipment expenditures (including those related to unforeseen acquisition
opportunities), continued availability of financial resources through financing
arrangements and operations, negotiation of new or modifications of existing
contracts for asset management and for property and equipment construction and
acquisition, regulations governing tax laws, other governmental and
authoritative bodies' policies and legislation, the continuation and magnitude
of the Company's common stock repurchase program and proceeds received from the
sale of assets held for disposal. In addition to these representative factors,
forward-looking statements could be impacted by general domestic and
international economic and industry conditions including fluctuations in
currency exchange, interest and inflation rates.
30
SUMMARY OF SELECTED FINANCIAL DATA
(Amounts in thousands,
except per share data) June 29, June 30, June 25, June 26, June 27,
1997 1996 1995 1994 1993
Summary of Earnings:
Net sales $1,704,926 $1,603,280 $1,554,557 $1,384,797 $1,405,651
Cost of sales 1,473,667 1,407,608 1,330,410 1,185,386 1,141,126
Gross profit 231,259 195,672 224,147 199,411 264,525
Selling, general and
administrative expense 46,229 45,084 43,116 40,429 38,484
Interest expense 11,749 14,593 15,452 18,241 25,785
Interest income (2,219) (6,757) (10,372) (8,290) (13,537)
Other income 1,218 (4,390) (9,659) (1,238) (5,775)
Non-recurring charge -- 23,826 -- 13,433 --
Income before income taxes
and extraordinary item 174,282 123,316 185,610 136,836 219,568
Provision for income
taxes 58,617 44,939 69,439 60,344 82,924
Income before
extraordinary item 115,665 78,377 116,171 76,492 136,644
Extraordinary item -- 5,898 -- -- --
Net income 115,665 72,479 116,171 76,492 136,644
Per Share of Common Stock:
Income before
extraordinary item $ 1.81 $ 1.18 $ 1.67 $ 1.08 $ 1.93
Extraordinary item -- .09 -- -- --
Net income 1.81 1.09 1.67 1.08 1.93
Cash dividends paid .44 .52 .40 .56 .42
Financial Data:
Working capital $ 216,145 $ 196,222 $ 333,357 $ 304,274 $ 320,215
Gross property, plant and
equipment 1,147,148 1,027,128 910,383 848,637 750,552
Total assets 1,018,703 951,084 1,040,902 1,003,252 1,017,449
Long-term debt 255,799 170,000 230,000 230,000 250,241
Shareholders' equity 548,531 583,206 603,502 588,522 545,553
Quarterly RESULTS (Unaudited)
Quarterly financial data for the years ended June 29,1997, and June 30,
1996, is presented below:
(Amounts in thousands,
except per share data) First Second Third Fourth
Quarter Quarter Quarter Quarter
1996:
Net sales $387,369 $401,437 $375,509 $438,965
Gross profit 44,929 49,255 45,544 55,944
Income before extraordinary item 6,767 24,118 20,747 26,745
Extraordinary item -- -- -- 5,898
Net income 6,767 24,118 20,747 20,847
Income before extraordinary item per
share .10 .36 .32 .40
Earnings per share .10 .36 .32 .32
1997:
Net sales $414,715 $419,345 $438,252 $432,614
Gross profit 49,945 58,858 61,808 60,648
Net income 23,955 28,790 31,467 31,453
Earnings per share .37 .44 .50 .51
31
MARKET AND DIVIDEND INFORMATION (UNAUDITED)
The Company's common stock is listed for trading on the New York Stock
Exchange. The following table sets forth the range of high and low sales
prices of the Unifi Common Stock as reported on the NYSE Composite Tape and
the regular cash dividends per share declared by Unifi during the periods
indicated.
High Low Dividends
Fiscal year 1995:
First quarter ended September 25, 1994 $25.50 $23.38 $.10
Second quarter ended December 25, 1994 $26.63 $23.88 $.10
Third quarter ended March 26, 1995 $29.13 $25.00 $.10
Fourth quarter ended June 25, 1995 $27.75 $22.63 $.10
Fiscal year 1996:
First quarter ended September 24, 1995 $26.63 $23.50 $.13
Second quarter ended December 24, 1995 $25.00 $21.88 $.13
Third quarter ended March 24, 1996 $25.75 $21.25 $.13
Fourth quarter ended June 30, 1996 $28.50 $23.00 $.13
Fiscal year 1997:
First quarter ended September 29, 1996 $28.88 $26.00 $.11
Second quarter ended December 29, 1996 $33.13 $26.63 $.11
Third quarter ended March 30, 1997 $33.88 $30.13 $.11
Fourth quarter ended June 29, 1997 $36.88 $29.63 $.11
32