Unifi, Inc. New · NYSE:UFI
Unifi, Inc. New — Unifi — Investor Presentation (November 2011)
34 slides from Unifi, Inc. New's investor presentation, November 2011
Slide 1: Investor Presentation November 2011
Investor Presentation November 2011
Slide 2: Presenters
Presenters Bill Jasper Chairman and Chief Executive Officer Roger Berrier President and Chief Operating Officer Ron Smith Vice President and Chief Financial Officer 2
Slide 3: Cautionary Statement
Cautionaryy Statement Certain statements included herein contain forward-looking statements within the meaning of federal securities laws about Unifi, Inc.’s (the “Company”) financial condition and results of operations that are based on management’s current expectations, estimates and projections a
Slide 4: Unifi Overview
Unifi Overview Company overview Well-established downstream partners Unifi, Inc. is a diversified producer and processor of multi-filament polyester and nylon yarns The Company’s product offerings include specialty and premier value added yarns value-added with enhanced performance characteristics
Slide 5: Market and Company Overview
Market and Company Overview 5
Slide 6: Growing Global Textile Fibers Market
Growing Global Textile Fibers Market Global consumption of textile fibers grows based on population and affluence Global Textile Markets Approximately 170 billion pounds of textile fibers sold annually 3%+ annual growth in global textile fibers projected from 2011 to 2015 4%+ annual growth i
Slide 7: U.S. Textile & Apparel Industry
U S Textile U.S. T til & Apparel A l Industry I d t Remains a large and important component of the U.S. economy Approximately a $51 billion industry in 2010 Investment of $15 billion in PP&E from 2001 to 2009 3rd largest exporter of textile products - $15 billion Much of the exports utiliz
Slide 8: U.S. Source of Synthetic Apparel Supply
U.S. Source of Synthetic Apparel Supply SME 09 10 11 (Billion) Est Region 1.6 1.8 2.0 +16 +10 % % Regional market share has stabilized and is expected to remain flat or slightly increase in 2011 Regional break-out break out of 18% share consists of 3 3.5% 5% U U.S. S Domestic Domestic, 10% CAFTA
Slide 9: Comparative Labor Cost Forecast
Comparative Labor Cost Forecast By 2015, Chinese labor wages are forecasted to be roughly equal to Mexico and higher than CAFTA Indian I di labor l b wages also l following f ll i similar i il trends d ___________________________ 9 Source: The Economist Intelligence Unit, O’Rourke Group Partners
Slide 10: Comparative Lead Time
Comparative Lead Time ___________________________ 10 Source: O’Rourke Group Partners
Slide 11: Importance of Regional Trade – Synthetic Apparel
Importance of Regional Trade – Synthetic Apparel Regional Trade (NAFTA / CAFTA / ATPA) Synthetic Apparel Imports from Central America U.S. and regional trading partners provide competitive advantages High-quality High quality for critical end-uses end uses Product innovation Compressed suppl
Slide 12: U.S. Market Segmentation – FY 2011
U.S. Market Segmentation – FY 2011 Diverse products and regional requirements U.S. Sales by Segment U.S. Direct Sales by Region U.S. Sales by Origin Requirement Other Oth CAFTA 2% Auto Other 9% 5% 3% NAFTA / Industrial ATPA 12% 8% Non- Compliant Compliant Apparel 41% Furnishings (1) 15% 48% 59% U.S.
Slide 13: U.S. Customer & Channel Segmentation – FY 2011
U.S. Customer & Channel Segmentation g – FY 2011 Strong diversity of customer base, distribution channels and products U.S. Sales by Customer(1) Distribution Channel(2) Global PVA Sales (3) HBI, 9% Other, 20% 18% 15% 15% Other, Next 4, 15% 13% 34% Mass 16% Department 41% 10% 18% Next 10, 5% 17% 0% N
Slide 14: Inventory in the Apparel Supply Chain
Inventory in the Apparel Supply Chain ___________________________ 14 Source: US Census Bureau and Unifi internal estimates
Slide 15: Company Strategy
UNIFIL. UNIri Company Strategy
Slide 16: Our Operating Environment
Our Operating Environment Continued strength of retail apparel, with opportunities for further improvement Opportunity for growth in North/Central America region from new investments across supply chain and realignment of sourcing patterns Incremental growth in global yarn markets Raw materi
Slide 17: Operating Strategies
Operating p g Strategies g Focus on continuous improvement, conversion margin integrity and mix enrichment – with the goal of reducing cyclicality Maximize growth opportunities developing in North/Central American regional market Aggressively grow our Premier Value Added (PVA) products, doubli
Slide 18: Brazil Market Dynamics
Brazil Market Dynamics Polyester Textile Filament Market Trends Skilled and experienced local management team Market currently serviced by domestic production and imports Proven market leader in local market Flexible business model from production to sourcing Strengthening currency impacts
Slide 19: China Polyester Filament Market Dynamics
China Polyester Filament Market Dynamics Chinese Polyester Market Chinese polyester production represents 65% of global market in 2009/2010 Textile filament market projected growth rates for 2010 to 2015 is estimated at 5% Specialty and PVA yarn segment accounts for around 5% of the total ma
Slide 20: Investing in the Region
Investing in the Region November 2010 May 2011 New 120 120,000 000 square feet facility $8 million investment 8 draw texturing & 27 twisting machines New 50,000 square feet facility Additional 4 draw texturing machines being 42 million pounds/year capacity installed 25 new jobs in
Slide 21: Branded / PVA Product Success
Branded / PVA Product Success Premier Value Added products are key for future growth PVA portfolio represents approximately 12% of U.S. sales and 18% of consolidated sales in fiscal 2011 Products utilized in apparel, contract, home furnishings, military, socks and hospitality Steady investment
Slide 22: Our PVA Downstream Partners
Our PVA Downstream Partners 22
Slide 23: Financial Overview
UNIri Financial Overview UNIFIL. 23
Slide 24: Consolidated Operating Results Overview
Consolidated Operating p g Results Overview Summary of Selected Financial Data ($ in millions) Net Sales Adjusted EBITDA margin (1) $1,000 10.0% 8.9% 9.0% Projection (2) 8.5% ($ in millions) FY12 $800 8.0% $713 Adj t d EBITDA Adjusted $45 7.0% $623 $600 $558 $174 6.0% Capital Expenditures (8) $149 $
Slide 25: Parkdale America, LLC
Parkdale America, LLC ( 1) ($ in millions) FY 2008 FY 2009 FY 2010 FY 2011 Net Sales $460.5 $408.8 $599.9 $1,110.2 % change h 4 6% 4.6% (11 2%) (11.2%) 46 7% 46.7% Income from Operations $10.4 $14.1 $37.4 $70.1 Depreciation and Amortization $17.8 $18.8 $21.2 $31.9 (2) PAL Adjusted EBITDA $28.2 $32.9
Slide 26: Long-term Capital Structure
Long-term Capital Structure U ifi has Unifi h a stable bl capital i l structure with i h covenant-lite li debt d b instruments i and d no near-term maturities i i $124 mm 2014 Senior Secured Notes – 11.5% First Amended Revolving Credit Agreement No on-going maintenance covenants $100mm facility,
Slide 27: Capital Strategy = Optimizing Cost of Capital
Capital p Strategy gy = Optimizing p g Cost of Capital p Focus on cash generation, across all business process including inventory management Fund growth working capital and capital expenditure requirements required to develop incremental growth opportunities Utilize cash flow generated from o
Slide 28: Summary and Review
Summaryy and Review Some inflationary pressures, but generally a stable operating environment Various incremental growth opportunities through increased retail volumes and re-balancing of sourcing towards North/Central America region Focus on continuous improvement, margin integrity and mix en
Slide 29: Questions
UNIri Questions UNIFIL. 29
Slide 30: Appendix Slides
UNIFIL. UNIri Appendix Slides
Slide 31: Adjusted EBITDA Reconciliation
Adjusted j EBITDA Reconciliation (Dollars in thousands) FY 2 0 0 9 F Y 2 0 10 F Y 2 0 11 Net income (loss) $ (48,996) $ 10,685 $ 25,089 Provision (benefit) for income taxes 4,301 7,686 7,333 Interest expense, net 20,219 18,764 16,679 Depreciation and amortization expense 31,326 26,312 25,562 EBTIDA
Slide 32: Non-GAAP Financial Measures
Non-GAAP Financial Measures 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 measures
Slide 33: Non-GAAP Financial Measures (Continued)
Non-GAAP Financial Measures Continued Our Adjusted EBITDA measure has limitations as an analytical tool, and you should not consider it in isolation or as a substitute for analysis of our results as reported under GAAP. Some of these limitations are: • it does not reflect our cash expenditures, futu
Slide 34: UNITI
UNITI