Unifi, Inc. New · NYSE:UFI
Unifi, Inc. New — Unifi — Investor Day (December 2015)
58 slides from Unifi, Inc. New's investor day presentation, Dec 14, 2015
Slide 1: Annual Investor Update Meeting December 14, 2015
Annual Investor Update Meeting December 14, 2015 1
Slide 2: Cautionary Statement
2 Cautionary Statement For use in the US - Unifi and REPREVE® are registered trademarks of Unifi, Inc. For International use - Unifi and REPREVE® are registered trademarks of Unifi, Inc. in the US and certain other countries Certain statements included herein contain forward-looking statements withi
Slide 3: Overview
3 Diversified Manufacturer of Polyester and Nylon Textile Filament Yarns –Founded in 1971 –Sales Revenue $687 million (FY2015) –Over 3,000 Employees Globally Overview
Slide 4: Global Network
4 Global Network North/Central America 80% Other 5% Sales By Region Polyester 55% Nylon 24% International 20% Sales by Segment FY 2015: US$ 687 MM Source: Unifi FY 2015 Form 10-K and Unifi Internal Estimates Manufacturing / Office Sales / Marketing Office Joint Venture / Equity Affiliate USA El Salv
Slide 5: Operations
5 Operations *rPET Chip: Recycled Polyester Chip
Slide 6: Business Strategy
6 Business Strategy •Control costs through rigorous and disciplined improvement process •Rigorous price management •Grow REPREVE® sales •Corporate-wide commitment to sustainability •Backward integration into plastic bottle processing •Repreve Renewables, LLC •Increase yarn sales in growing regional
Slide 7: Stock Performance
7 Stock Performance $39.3 $53.4 $57.4 $64.3 $9.8 $14.8 $24.0 $30.6 0 5 10 15 20 25 30 35 $0.0 $10.0 $20.0 $30.0 $40.0 $50.0 $60.0 $70.0 FY 2012 FY 2013 FY 2014 FY 2015 $ / Share Adjusted EBITDA (In US$ MM) Adjusted EBITDA Average stock price during the FY $0.54/sh. $1.02/sh. $1.65/sh. Adjusted EPS f
Slide 8: Diverse and Growing Markets
8 Diverse and Growing Markets
Slide 9: Diverse Market Segments
9 Diverse Market Segments Source: Unifi Internal Estimates Apparel 47% Hosiery 18% Other 4% Automotive 7% Furnishings 9% Industrial 15%
Slide 10: Global Textile Fibers Market
10 Global Textile Fibers Market - 50 100 150 200 1990 2000 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015e 2016e 2017e 2018e 2019e 2020e Billion Pounds Cotton Polyester Nylon All Other 47% 22% 9% 22% 37% 41% 6% 16% 33% 49% 5% 13% 28% 54% 5% 13% 57% 26% 5% 1% AAGR 4% AAGR 2% AAGR 1% AAGR 3% A
Slide 11: US Synthetic Apparel Supply
11 US Synthetic Apparel Supply - 2 4 6 8 10 12 14 16 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 F Billion SME (Square Meters) US Synthetic Apparel Consumption REGION CHINA VIETNAM REST OF THE WORLD 56% 54% 48% 43% 38% 34% 30% 24% 22% 18% 18% 18% 18% 18% 18% 18% 1
Slide 12: Regional Market
12 Regional Market Regionally compliant yarn required in free trade agreements such as NAFTA, CAFTA, Colombia FTA, Peru FTA, and Berry Amendment Source: Unifi Internal Estimates Trade Compliant 62% Non-Compliant 38% FY 2015 - Domestic Sales by Trade Compliant and Non-Compliant
Slide 13: Regional Growth = DTY Investment
13 Regional Growth = DTY Investment Polyester textured yarn (DTY) and Air Jet Texturing (AJT) capacity expansion to support the growth in specialty products
Slide 14: Develop New PVA Products and Technologies
14 Develop New PVA Products and Technologies
Slide 15: Global PVA Growth
15 Global PVA Growth 16% 20% 24% 24% 25% 27% 30% 33% 0% 5% 10% 15% 20% 25% 30% 35% FY 2009 FY 2010 FY 2011 FY 2012 FY 2013 FY 2014 FY 2015 FY 2016e PVA Products Sales as a Percentage of Consolidated Annual Net Sales Source: Unifi Internal Estimates
Slide 16: PVA Brands and Technologies
16 PVA Brands and Technologies Performance + Sustainability Moisture Management Cotton-Like, Natural Touch Stretch Other Technologies ? Effects: ? Cationic / Disperse ? Heathers ? X-Section Modification ? Water Repellency Solution Dyed
Slide 17: Investment For Mix Enrichment
17 Investment For Mix Enrichment Small lot POY spinning capacity to support PVA yarn growth… Specialty Yarns ? Water Repellant ? Cationic Disperse ? Thermal Regulation ? Odor Control ? Flame Retardant
Slide 18: Capital Projects
18 Capital Projects $4.2 $6.9 $8.7 $14.5 $17.6 $10.0 $1.9 $2.4 $3.2 $32.3 $4.5 $6.3 $6.9 $3.9 $5.3 $3.0 $21.7 $2.2 $4.1 $12.0 $0.0 $10.0 $20.0 $30.0 $40.0 $50.0 $60.0 $70.0 FY 2012 FY 2013 FY 2014 FY 2015 FY 2016e FY 2017e In US$ MM Maintenance & Infrastructure REPREVE Equipment for New Contract Mix
Slide 19: Recycling and Sustainability
19 Recycling and Sustainability
Slide 20: Remember to Toss Your Plastic Bottles in the Recycling Bin
Remember to Toss your plastic bts im he racy bn NOT the ash EPREVE ‘cyl bots am cane ‘Chdeped. melted ond tarred nto Me plate ches Chips to Sipe mre tata hn
Slide 21: Recycling Plastic Bottles
RECYCLING PLASTIC BOTTLES UONIFI.
Slide 22: REPREVE: Growth of a Brand
RE PQ@EVE GROWTH OF A BRAND #TURNITGREEN
Slide 23: 23
23
Slide 24: Denali Textile Takeback
NORGE NORTE Denali Textile Takeback
Slide 25: REPREVE Recycling Center
25 REPREVE ® Recycling Center 42 MILLION POUNDS/YEAR 72 MILLION POUNDS/YEAR 100 MILLION POUNDS/YEAR Future Investment Estimated Fall of 2016
Slide 26: REPREVE Backward Integration
26 REPREVE® Backward Integration Plastic bottle processing facility under construction in Reidsville, NC. Opening June 2016
Slide 27: Marketing Partnerships
Marketing Partnerships PROUD RECYCLING PARTNER
Slide 28: UONIFI.
UONIFI.
Slide 29: Interactive Displays and Mobile Tour
29 •Interactive Display •Interactive Gaming •Digital Display & Videos •iPhoto Displays •iPad Kiosks with social sharing •Product Displays Mobile Tour
Slide 30: Consumer Marketing Tags and Labels
30 Neck Tag 2” x 2” Leg Sticker 2”x3.5” Hang tag 3”x1.875” Hang Tag Staff Uniforms Bottom Weights Outerwear Consumer Marketing - POS Heat Transfer Slingers Boardshorts Denali Jackets M/W/K
Slide 31: Commitment to Sustainability
31 Commitment to Sustainability •Actively engaged in eliminating waste and reducing consumption across all our facilities –Energy –Labor –Packaging –Transportation •It has become part of our culture –All our US operations are landfill-free •Committed to recycling Post-Consumer and Post-Industrial ma
Slide 32: International: Brazil and China Dynamics
32 ?Focus on PVA product growth ?European and U.S. retail/brand focused ?Successful transition of a major REPREVE® program to China from the US ?Expand global availability of REPREVE ® through license agreements and distribution networks: ?Turkey ?Taiwan ?Vietnam ?Sri Lanka International Unifi Brazi
Slide 33: Joint Ventures and Equity Affiliates
33 Joint Ventures and Equity Affiliates
Slide 34: Unifi Nilit Fibers (UNF)
34 Unifi Nilit Fibers (UNF) UNF provides a stable, quality supply of type 6.6 POY, which is the raw yarn for Unifi to produce nylon textured and covered yarns Martinsville, VA Migdal HaEmek, Israel
Slide 35: Parkdale America LLC
35 Parkdale America LLC ?34% investment in Parkdale America LLC (“PAL”) held by Unifi ?US$ 800 million cotton yarn spinning company $59.4 $60.7 $64.1 $49.0 $53.3 $0 $10 $20 $30 $40 $50 $60 $70 CY 2011 CY 2012 CY 2013 CY 2014 CY 2015e PAL EBITDA(1) (In US$ MM) $30.4 $52.7 $11.4 $10.0 $0.0 $0.0 $20.0
Slide 36: Repreve Renewables, LLC
36 Repreve Renewables, LLC •An agricultural company (60% owned by Unifi) producing and selling dedicated renewable biomass feedstock with application for: –Poultry Bedding –Bio energy (University of Iowa contract) •Developed and acquired IP and proprietary assets: –Miscanthus genetics and parental l
Slide 37: Strong Foundation for Growth
37 Strong Foundation for Growth •Sales demand –Commercial sales with poultry integrators representing over 60% of the U.S. market –Strong sales pipeline of commercial trials to start with new poultry integrators representing another ~20% of the U.S. market –Secured a multi-year contract with one of
Slide 38: Key Financial Trends
Key Financial Trends wei “ee
Slide 39: Profitability Trends
39 Profitability Trends $8.8 $29.0 $47.9 $53.8 $0 $10 $20 $30 $40 $50 $60 FY 2012 FY 2013 FY 2014 FY 2015 Pre-Tax Income In US$ MM -$10.9 $17.6 $28.8 $34.3 -$15 -$10 -$5 $0 $5 $10 $15 $20 $25 $30 $35 $40 FY 2012 FY 2013 FY 2014 FY 2015 Pre-Tax Income (In US$ MM) (Excluding Equity in Earnings from Un
Slide 40: Profitability By Segment
40 Profitability By Segment $19.7 $35.2 $46.8 $48.7 5.0% 8.8% 12.0% 12.9% 0.00% 2.00% 4.00% 6.00% 8.00% 10.00% 12.00% 14.00% $0 $10 $20 $30 $40 $50 $60 FY 2012 FY 2013 FY 2014 FY 2015 Gross Profit – Polyester Segment In US$ MM and as % of Net Sales $17.0 $18.1 $20.2 $21.0 10.4% 11.0% 12.3% 12.5% 0.0
Slide 41: Cash Flow, Balance Sheet Highlights
41 Cash Flow, Balance Sheet Highlights $43.3 $50.5 $56.4 $38.9 $0 $10 $20 $30 $40 $50 $60 FY 2012 FY 2013 FY 2014 FY 2015 Cash Flow from Operating Activities (In US$ MM) $121.6 $97.8 $99.5 $104.1 4.2% 3.2% 3.0% 3.1% 0.00% 0.50% 1.00% 1.50% 2.00% 2.50% 3.00% 3.50% 4.00% 4.50% $0 $20 $40 $60 $80 $100
Slide 42: Operational Excellence and Future Focus
42 Operational Excellence and Future Focus
Slide 43: Operational Excellence
43 Culture of process improvement success leading to measurable annualized cost savings Lean Manufacturing Statistical Process Control Continuous Process Improvement Operational Excellence
Slide 44: Future Focus
44 Future Focus
Slide 45: FY2018 Forecast
45 FY 2015 FY 2018 $34 $138 FY 2012 - FY 2014 Actual FY 2015 - FY 2017 Forecast $0.0 $50.0 $100.0 $150.0 $200.0 $250.0 Capital Projects In US$ MM $687 $735 0 0.2 0.4 0.6 0.8 1 1.2 $200 $300 $400 $500 $600 $700 $800 FY 2015 FY 2018 Forecast Consolidated Net Sales In US$ MM $104 $126 0 0.2 0.4 0.6 0.8
Slide 46: Thank You! Questions...
Thank You! Questions...
Slide 47: About Unifi
47 About Unifi: Unifi, Inc. (NYSE: UFI) is a multi-national manufacturing company that produces and sells textured and other processed yarns designed to meet customer specifications, and premier value-added (“PVA”) yarns with enhanced performance characteristics. Unifi maintains one of the textile i
Slide 48: Appendix
48 Appendix
Slide 49: Trans-Pacific Partnership
Australia Brunei © Canada.=ss(Chhile. «= Japan ait lien ¢ S THE. TRANS-PAGIFIC PARTERNSHIP anh
Slide 50: Unifi Supply Chain
Unifi Supply Chain Crude Oil PX (Para - Xylene) Natural Gas PTA (Pure Terephthalic Acid Ethylene MEG (Mono-Ethylene Glycol) rPET Bottles Virgin PET Polymer Recycled PET Polymer Polyester Yarns Textiles Furnishings Apparel Hosiery Industrial Automotive Nylon Yarns Nylon Type 66 Polymer Crude Oil Natu
Slide 51: Introducing THRIVEZ Poultry Bedding
51 Repreve Renewables, the makers of THRIVEZTM, created a purpose-designed bedding product for the poultry industry. THRIVEZTM is setting a new standard. It is a high quality, custom produced poultry bedding product made from the company’s patented giant miscanthus varieties. Growers and integrators
Slide 52: Reconciliations of Adjusted EBITDA
52 RECONCILIATIONS OF ADJUSTED EBITDA FY 2015FY 2014FY 2013FY 2012Net income attributable to Unifi, Inc.42,151$ 28,823$ 16,635$ 11,491$ Interest expense, net3,109 2,539 3,791 14,152 Provision (benefit) for income taxes13,346 20,161 13,344 (1,979) Depreciation and amortization17,367 17,334 23,860 26,
Slide 53: Reconciliations of Adjusted Working Capital
53 The following table presents the components of the Company’s Adjusted Working Capital and the reconciliation from Adjusted Working Capital to working capital: June 28, 2015 June 29, 2014 June 30, 2013 June 24, 2012 Receivables, net $ 83,863 $ 93,925 $ 98,392 $ 99,236 Inventories 111,615 113,370 1
Slide 54: Reconciliations of Adjusted Net Income and Adjusted EPS
54 RECONCILIATIONS OF ADJUSTED NET INCOME AND ADJUSTED EPS Fiscal Year 2015 Income Before Income Taxes Net Income Basic EPS GAAP results $ 53,812 $ 42,151 $ 2.32 Change in tax valuation allowances — (3,009) (0.17) Change in deferred tax liability for indefinite reinvestment assertion — (7,639) (0.42
Slide 55: Reconciliations of Adjusted Net Income and Adjusted EPS (Continued)
55 RECONCILIATIONS OF ADJUSTED NET INCOME AND ADJUSTED EPS (Continued) Fiscal Year 2012 Income Before Income Taxes Net Income Basic EPS GAAP results $ 8,849 $ 11,491 $ 0.57 Change in tax valuation allowances — (15,847) (0.79) Unremitted foreign earnings assertion, net of foreign tax credit — 4,793 0
Slide 56: Non GAAP Financial Measures
56 NON GAAP FINANCIAL MEASURES Certain non-GAAP financial measures included herein are 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 measures are useful
Slide 57: Non GAAP Financial Measures
57 NON GAAP FINANCIAL MEASURES We also believe Adjusted EBITDA is an appropriate supplemental measure of debt service capacity, because cash expenditures on interest are, by definition, available to pay interest, and tax expense is inversely correlated to interest expense because tax expense decreas
Slide 58: Makers of REPREVE
® MAKERS OF REPREVE*