Unifi, Inc. New · NYSE:UFI
Unifi, Inc. New — Unifi — Seventeenth Annual Emerging Growth Institutional Investor Forum 2013
37 slides from Unifi, Inc. New's conference presentation, Mar 19, 2013
Slide 1: Seventeenth Annual Emerging Growth Institutional Investor Forum
Seventeenth Annual Emerging GrowthInstitutional Investor ForumMarch 18-19, 2013
Slide 2: Cautionary Statement
Cautionary Statement Certain statements included herein contain forward-looking statements within the meaning of federal securities laws about the financial condition and results of operations of Unifi, Inc. (the “Company”) that are based on management’s current expectations, estimates and projectio
Slide 3: Company Overview
Company Overview Unifi, Inc. is a diversified producer and processor of multi-filament polyester and nylon yarns q The Company’s product offerings include specialty and premier value-added yarns with enhanced performance characteristics q The Company sells to other yarn manufacturers, knitters and w
Slide 4: Market and Company Overview
ONIFT. Market and Company Overview
Slide 5: Our Manufacturing Process
Our Manufacturing Process PET and rPET* Chip POY Manufacturing Yarn Texturing Value-Added Processes – Dyeing, Covering, Twisting, Beaming, Solution and Package Dyed *rPET chip is made from recycled bottle flakes
Slide 6: Global consumption of textile fibers grows based on population and affluence
Source: PCI Fibers Global consumption of textile fibers grows based on population and affluence Global Textile MarketsApproximately 180 billion pounds of textile fibers sold annually2% to 3% annual growth in global textile fibers projected from 2011 to 20203% to 4% annual growth in global polyester
Slide 7: Consolidated Sales by Segment / Location
Manufacturing & Office Sales Office Joint Venture Consolidated Sales by Segment / Location ($705 million FY 2012) Who We Are Our assets are well-positioned to leverage regional & global growth in synthetics
Slide 8: U.S. Customer & Channel Segmentation – FY 2012
U.S. Customer & Channel Segmentation – FY 2012 Estimates for combined Apparel and Hosiery segments U.S. Sales by Customer 8 Strong diversity of customer base and distribution channels Distribution Channel (1) Fiber/yarn demanded by wide variety of customersApproximately 420 polyester customers and a
Slide 9: Leading Market Position – FY 2012
Leading Market Position – FY 2012 Polyester market position includes Unifi sales of Polyester Textured Yarn, Draw Warp, and POY external sales to other US domestic DTY producersOther domestic competition sales exclude Polyester Textured Yarn and Draw Warp made with Unifi POY Source: Unifi Internal E
Slide 10: Regional Share of U.S. Retail Consumption
Regional Share of U.S. Retail Consumption 10 Our Region… an essential part of the retail supply base Finished Product share Source: Unifi Internal Estimates Hosiery Apparel Auto Furnishings
Slide 11: Regional Markets and Segments
Regional Markets and Segments 11 NAFTA countries: U.S., Mexico, Canada CAFTA countries: U.S., El Salvador, Honduras, Costa Rica, Guatemala, Nicaragua, Dominican RepublicATPA countries: U.S., Colombia, Bolivia, Ecuador, Peru Regional trade and diverse market segments provide competitive advantages
Slide 12: Regional Competitive Advantages
Regional Competitive Advantages 12 Competitive costDuty-free benefits of up to 32% on synthetic garmentsGreater labor productivity than most other yarn suppliersHigher inflation in China/Asia Faster supply and flexibilityShorter lead times of 6 to 7 weeks from “order” to “U.S. distribution” versus 1
Slide 13: CAFTA-DR: Many Apparel Categories
CAFTA-DR: Many Apparel Categories 13 This region boasts a broad-range of existing and emerging capabilities 2012 Estimates– U.S. Synthetic Apparel Supply from CAFTA- DR HosierySocksDressesSportswearAccessories T-ShirtsDress ShirtsSweatshirtsPullovers/FleeceVestsSweaters TrousersSlacksShortsSkirts Un
Slide 14: Operating Environment
ONIFT. Operating Environment 14
Slide 15: U.S. Synthetic Apparel Sourcing Trends
U.S. Synthetic Apparel Sourcing Trends Regional units 9% CAGR from 2009 to 2012 - Expected to grow 5% to 6% in 2013 Source: Internal Estimates, Federal Reserve, OTEXA, and Census Bureau Supply Share by Region Supply in Square Meter Equivalents 15
Slide 16: North America – Polyester Raw Material Trends
North America – Polyester Raw Material Trends 16 Source: PCI Fibers, Unifi internal estimates Continuing raw material volatility puts pressure on our business to review and adjust our pricing strategy on a regular basis
Slide 17: PX (Paraxylene): Global Supply/Demand = Tight
PX (Paraxylene): Global Supply/Demand = Tight 17 Source: PCI Fibers CY 2012 was one of the tightest supply periods for Paraxylene globally leading to an 88% operating rate - highest rate since 2007.Tight supply of Paraxylene is expected to continue during CY 2013 with supply relief expected from CY
Slide 18: Business Strategy
ONIFT. Business Strategy 18
Slide 19: Our Business Strategy
Our Business Strategy 19 Drive financial improvement to our core business through a rigorous and disciplined improvement processEnrich our product mix by aggressively growing our Premier Value- Added products and our market share of compliant yarns Enhance our existing business through strategic inv
Slide 20: Our PVA Brands
Our PVA Brands ° BS - ORE PMEVE ° Gevva> oSorbtek- —-° SATU? Gguatd 2 AMY - » Guise - Ore ie x x’ 0 eclypse ° mynx . ° Slaw o fnhibit ° softec a © DACRON 20
Slide 21: Global PVA Sales Revenue by Fiscal Year
Global PVA Sales Revenue by Fiscal Year PVA portfolio represented approximately 18% of consolidated sales in fiscal 2012Products utilized in apparel, contract, home furnishings, military, socks and hospitality end usesSteady investment in R&D and commercialization of PVA products remains a strategic
Slide 22: Corporate Sustainability
Corporate Sustainability Long history of sustainabilityOn-site environmental team constantly reviews every aspect of manufacturing to see how we can reduce, reuse and conserveUse of returnable packagingAll U.S. operations landfill free Sustainable textile solutions and REPREVE 22
Slide 23: Commitment to Innovation
RE P@EVE RECYCLING CENTER Commitment to Innovation 23
Slide 24: REPREVE recycled fiber features
Made from recycled materials; including post-consumer plastic bottles & post-industrial fiber wasteProduct Transparency & AuthenticitySCS Certified for recycled content claims; Oeko-Tex certified Program provides transparency throughout the supply chain with Unifi’s unique & proprietary Fiberprint™
Slide 25: REPREVE. It's what's in it.
REPREVE. IT’S WHAT’S IN IT. USED BY THE WORLD'S MOST RESPECTED BRANDS. patagonia ZED XO Sobek 7) a, No MOHAWK = @yocade: SAVANE &TNOCYS nNoRRaNAG” MARKS& ECO SWIM [| SPENCER i JCPenney vitamin A. IZOD a ar ETHAN ALLEN 4M Allsteel” oskuauccarecows Walmart >< 25
Slide 26: REPREVE recycling campaign
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Slide 27: Financial Overview
ONIFT. Financial Overview 27
Slide 28: Debt and Liquidity Trends
Debt and Liquidity Trends 28 Portions of LIBOR debt hedged through May 2017 at approximately 3.3%$85 mm hedged through August 2013; reduced by $5 mm/quarter through February 2015$50 mm hedged from February 2015 to May 2017 (1) Forecast based on management’s internal estimates for the remainder of th
Slide 29: Long-Term Capital Structure - $150 mm ABL Facility
Revolving Credit Facility - Matures May 2017Interest based on LIBOR + 175 bps to 225 bpsBorrowing availability based on eligible working capitalNo on-going maintenance covenants, as long as availability exceeds 15% of RevolverNo restricted payment limitations, as long asAvailability exceeds $20 mm,
Slide 30: Capital Allocation Strategy
Capital Allocation Strategy 30 Achieve and maintain targeted net debt levelAppropriately fund our business strategyWorking capital and capital expenditure requirements to support current mix enrichment and PVA growth strategiesSelected growth opportunities related to our core businessEvaluate growth
Slide 31: Pro Forma Cash Generation Example
Pro Forma Cash Generation Example 31 Pro Forma calculation based on management’s estimates of future annual capital expenditures (as disclosed in Company’s Form 10-K for the fiscal year ended June 24, 2012); cash interest payments based on a weighted average interest rate of 3.35% and target debt of
Slide 32: Questions
ONIFT. Questions
Slide 33: Appendix Slides
ONIFT. Appendix Slides 33
Slide 34: Adjusted EBITDA Reconciliation
Unifi, Inc. - Adjusted EBITDA Reconciliation (Dollars in thousands) FY 2010 FY 2011 FY 2012 Net income attributable to Unifi $ 10,685 $ 25,089 $ 11,491 Provision (benefit) for income taxes 7,686 7,333 (1,979) Interest expense, net 18,764 16,679 14,152 Depreciation and amortization expense 26,312 25,
Slide 35: Non-GAAP Financial Measures
Non-GAAP Financial Measures 35 Included in this presentation are certain non-GAAP financial measures designed to complement the financial information presented in accordance with generally accepted accounting principles in the United States of America ("GAAP") because management believes such measur
Slide 36: Continued Non-GAAP Financial Measures
Continued Non-GAAP Financial Measures 36 Each of our EBITDA, Adjusted EBITDA including equity affiliates, Adjusted EBITDA, EBITDA cash generation and Total cash generation measures has limitations as an analytical tool, and you should not consider it in isolation or as a substitute for analysis of o
Slide 37: ONIFT.
ONIFT.
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