Watch List: Unifi, Inc. (NYSE: UFI)

On Monday, Shares of Unifi, Inc. (NYSE: UFI) lost -0.68% to $35.18. The stock opened its trade at $35.49 and after floating in a price range of $34.85 to $35.49; the stock grabbed the investor’s attention and traded 8,567 shares as compared to its average daily volume of 54.06K shares. The stock’s institutional ownership stands at 81.80%.

Unifi, Inc. (UFI), one of the world’s leading innovators in synthetic and recycled yarns, recently released operating results for the second quarter ended December 24, 2017.

Second Quarter Fiscal 2018 Operational Review

Net sales were $167.50M for the second quarter of fiscal 2018, contrast to $155.20M for the second quarter of fiscal 2017.  Revenue growth was driven by an overall increase in sales volume, led by recycled product sales in Asia and North America, together with continued momentum and strong performance in Brazil. Gross margin was 13.5% for the second quarter of fiscal 2018, contrast to 14.3% for the second quarter of fiscal 2017, reflecting a lower-priced sales mix and cost pressures, mainly regarding raw materials.

Operating income was $7.80M for the second quarter of fiscal 2018, contrast to $9.00M for the second quarter of fiscal 2017, as second quarter fiscal 2018 operating income reflected higher compensation and marketing expenses for expanded commercial efforts.

Net income was $11.80M for the second quarter of fiscal 2018, contrast to $4.60Mfor the second quarter of fiscal 2017.  Net income for the second quarter of fiscal 2018 benefited from a lower effective tax rate, but was unfavorably influenced by higher administrative expenses. Net income for the second quarter of fiscal 2018 included a $3.80M tax benefit because of the reversal of a valuation allowance on certain historical net operating losses, while net income for the second quarter of fiscal 2017 included a loss on sale of business of $1.70M. For the second quarter of fiscal 2018, Diluted EPS and Adjusted EPS were $0.63 and $0.43, respectively. For the second quarter of fiscal 2017, Diluted EPS and Adjusted EPS were $0.25 and $0.34, respectively. Adjusted EPS does not include separate consideration for the impact of the federal tax reform legislation signed into law in December 2017.

Adjusted EBITDA was $13.90M for the second quarter of fiscal 2018, contrast to $14.50M for the second quarter of fiscal 2017.  The decrease in Adjusted EBITDA resulted mainly from higher operating expenses in the second quarter of fiscal 2018. Adjusted EPS and Adjusted EBITDA are non-GAAP financial measures. The plans included in this press release reconcile Adjusted EPS and Adjusted EBITDA to the most directly comparable GAAP financial measures.

Net debt (debt principal less cash and cash equivalents) was $84.90M at December 24, 2017, contrasts to $94.00M at June 25, 2017, as cash and cash equivalents grew from $35.40M at June 25, 2017 to $48.60M at December 24, 2017.

First Six Months of Fiscal 2018 Operational Review

Net sales were $331.70M for the first six months of fiscal 2018, contrast to $315.10M for the first six months of fiscal 2017. Gross margin was 13.9% for the first six months of fiscal 2018, contrast to 14.5% for the first six months of fiscal 2017. Operating income was $17.90M for the first six months of fiscal 2018, contrast to $21.60M for the first six months of fiscal 2017. Net income was $20.80M for the first six months of fiscal 2018, contrast to $14.00M for the first six months of fiscal 2017.  Net income for the first six months of fiscal 2018 included a $3.80M tax benefit because of the reversal of a valuation allowance on certain historical net operating losses, while net income for the first six months of fiscal 2017 included a loss on sale of business of $1.70M. For the first six months of fiscal 2018, Diluted EPS and Adjusted EPS were $1.12and $0.91, respectively. For the first six months of fiscal 2017, Diluted EPS and Adjusted EPS were $0.76 and $0.85, respectively. Adjusted EBITDA was $29.70M for the first six months of fiscal 2018, contrast to $32.40M for the first six months of fiscal 2017.

UFI has a market value of $641.81M while its EPS was booked as $1.99 in the last 12 months. The stock has 18.12M shares outstanding. In the profitability analysis, the company has gross profit margin of 14.20% while net profit margin was 6.00%. Beta value of the company was 0.78; beta is used to measure riskiness of the security. Analyst recommendation for this stock stands at 1.50.

 I am Wayne Parsons and I have over 16 years experience in the financial services industry giving me a vast understanding of how news affects the financial markets. I am an active day trader spending the majority of my time analyzing earnings reports and watching commodities and derivatives. I have a Masters Degree in Economics from Westminster University with previous roles counting Investment Banking.

Email: wayne.parsons@nasdaqexpress.com

Wayne Parsons

 I am Wayne Parsons and I have over 16 years experience in the financial services industry giving me a vast understanding of how news affects the financial markets. I am an active day trader spending the majority of my time analyzing earnings reports and watching commodities and derivatives. I have a Masters Degree in Economics from Westminster University with previous roles counting Investment Banking.Email: wayne.parsons@nasdaqexpress.com