• Q1 net income reaches US$8m
  • Gross margin widens to 12.9%
  • Net sales drop to $162.2m

US yarn manufacturer Unifi said it is continuing to see improvements in the performance of its premier value-added products as it revealed an increase in first-quarter earnings.

Net income in the three months ended 27 September reached US$8m from earnings of $7.1m a year earlier, boosted by an improved performance for the company's consolidated operations, along with a lower effective tax rate. This was despite lower earnings from its investment in Parkdale America and the effects from the devaluation of the Brazilian real.

Gross margin widened to 12.9% of net sales, from 11.6% in the comparable quarter last year.

Net sales, however, dropped to $162.2m, compared to $175.5m for the prior year quarter, primarily due to the significant devaluation of the Brazilian real and pricing declines due to lower raw material costs.

Nonetheless, CEO Roger Berrier, said: “We continue to see improvements in the areas of our business that we are supporting through strategic capital expenditures. The company is supporting the growth of its premier value-added products with several capital investments, including the expansion of our existing Repreve Recycling Center and the construction of a plastic bottle processing plant scheduled to start-up in May 2016.

“We will also explore opportunities to meet increased demand in the NAFTA and CAFTA regions over the next 18 months. The region continues to grow at an average annual rate of approximately five percent and presents opportunities for us to grow our texturing operations.”