• Q1 net income swings to $2.5m
  • Q1 revenues increased 2.2%
  • 570 basis point improvement in gross margin

Yarn maker Unifi exceeded its operating targets in the first quarter, and said inventory de-stocking across its supply chains seems to have abated.

The company has reported net income of $2.5m for the first quarter of the 2010, compared to a net loss of $6.3m in the previous quarter and a of $676,000 in the first quarter of last year.

Results were helped by a 570 basis point improvement in gross margin year-on-year, and continued volume growth in its polyester business.

The company also reported market share gains in certain product categories in the US and Brazil.

Revenues for the first quarter increased 2.2% over the previous quarter to $143m, although they still remained $26m below the level of $169m recorded in the first quarter of last year.

"We are pleased the operating results for the quarter exceeded targets and the company was able to achieve its highest quarterly net income in seven years despite the effects of a severe global recession," said Bill Jasper, president and CEO of Unifi.

"Now that the negative impact of the inventory de-stocking across our supply chains seems to have abated, we are seeing the benefits of our unwavering focus on our core strategies.

"These include our continuous improvement efforts to enhance margins, quality, and operating efficiencies, resulting in significantly improved operating performance, in spite of a 15% decline in year-over-year revenue."