Unifi Names New Chairman, Reports Q4 Losses, Announces Plant Closing
A shake-up has begun to take place at
Unifi Inc., as the Greensboro, N.C.-based textured yarn manufacturer has reported yet another loss
in its financial report for the fourth quarter (Q4) and fiscal year (FY) ending June 24, 2007, and
announced plans to close its Kinston, N.C., partially oriented yarn (POY) production facility by
the end of December.
At a meeting of Unifi’s Board of Directors the day before the report was released, the company terminated Chairman, President and CEO Brian R. Parke and named Stephen Wener as the new chairman and acting CEO. Parke, who has served as Unifi’s president since 1999, CEO since 2000 and chairman since 2004, will continue to serve as vice chairman of Yihua Unifi Fibre Industry Co. Ltd., Unifi’s joint venture in China. Wener has served as president and CEO of Dillon Yarn Corp. — whose polyester and nylon texturing operations were acquired by Unifi in January 2007 — and was named to Unifi’s Board of Directors in May 2007.
After the board meeting, six of the company’s directors including Parke, R. Wiley Bourne, Charles R. Carter, Sue W. Cole, J.B. Davis and Donald F. Orr resigned from the board. Five directors remain including Wener, William J. Armfield IV, Anthony Loo, Kenneth G. Langone and William M. Sams.
Unifi’s latest financial report revealed continued operating losses, as the company has reported quarterly losses every quarter since Q4 2003 and continuous annual losses since FY 2001. The Q4 and FY 2007 results included a Q4 net loss of $72.3 million and a FY 2007 net loss of $113.1 million. The reported losses included an $84.7 million pre-tax impairment charge related to the value of Unifi’s share in Parkdale America LLC and $4.3 million in bad debt charges related to receivables owed by upholstery fabrics manufacturers Joan Fabrics Corp. and Quaker Fabrics Corp., which have liquidated or are preparing to liquidate their assets (See “Joan Fabrics Completes Sale Of Assets,” www. TextileWorld.com , July 31, 2007; and “Quaker Fabric Begins Liquidation Process,” www. TextileWorld.com, July 24, 2007).
“Fiscal 2007 presented many challenges for us, primarily in the area of ever increasing and fluctuating raw material prices,” said William Lowe, COO and CFO. “Nevertheless, we successfully integrated our most recent acquisition in Dillon, S.C., consummated several asset sales, and have positioned the company to make its next step toward creating shareholder value by closing our Kinston facility ….”
In announcing the Kinston closure, the company cited offshore competition and the need to evolve to meet that competition and add value to the business. The Kinston facility produces POY for internal use and third-party sales. In the future, the company will turn to external suppliers to purchase commodity POY to convert to textured yarn. The closure, which will affect approximately 260 employees, is expected to result in annual savings of $12 million, provide flexibility in the company’s texturing operations, and allow it to reduce inventory and cut $11 million to $13 million from its working capital.
August 7, 2007
At a meeting of Unifi’s Board of Directors the day before the report was released, the company terminated Chairman, President and CEO Brian R. Parke and named Stephen Wener as the new chairman and acting CEO. Parke, who has served as Unifi’s president since 1999, CEO since 2000 and chairman since 2004, will continue to serve as vice chairman of Yihua Unifi Fibre Industry Co. Ltd., Unifi’s joint venture in China. Wener has served as president and CEO of Dillon Yarn Corp. — whose polyester and nylon texturing operations were acquired by Unifi in January 2007 — and was named to Unifi’s Board of Directors in May 2007.
After the board meeting, six of the company’s directors including Parke, R. Wiley Bourne, Charles R. Carter, Sue W. Cole, J.B. Davis and Donald F. Orr resigned from the board. Five directors remain including Wener, William J. Armfield IV, Anthony Loo, Kenneth G. Langone and William M. Sams.
Unifi’s latest financial report revealed continued operating losses, as the company has reported quarterly losses every quarter since Q4 2003 and continuous annual losses since FY 2001. The Q4 and FY 2007 results included a Q4 net loss of $72.3 million and a FY 2007 net loss of $113.1 million. The reported losses included an $84.7 million pre-tax impairment charge related to the value of Unifi’s share in Parkdale America LLC and $4.3 million in bad debt charges related to receivables owed by upholstery fabrics manufacturers Joan Fabrics Corp. and Quaker Fabrics Corp., which have liquidated or are preparing to liquidate their assets (See “Joan Fabrics Completes Sale Of Assets,” www. TextileWorld.com , July 31, 2007; and “Quaker Fabric Begins Liquidation Process,” www. TextileWorld.com, July 24, 2007).
“Fiscal 2007 presented many challenges for us, primarily in the area of ever increasing and fluctuating raw material prices,” said William Lowe, COO and CFO. “Nevertheless, we successfully integrated our most recent acquisition in Dillon, S.C., consummated several asset sales, and have positioned the company to make its next step toward creating shareholder value by closing our Kinston facility ….”
In announcing the Kinston closure, the company cited offshore competition and the need to evolve to meet that competition and add value to the business. The Kinston facility produces POY for internal use and third-party sales. In the future, the company will turn to external suppliers to purchase commodity POY to convert to textured yarn. The closure, which will affect approximately 260 employees, is expected to result in annual savings of $12 million, provide flexibility in the company’s texturing operations, and allow it to reduce inventory and cut $11 million to $13 million from its working capital.
August 7, 2007
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