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Note 31 - Condensed Consolidating Financial Statements

9 Months Ended

Mar. 25, 2012

Condensed Consolidating Financial Statements [Text Block]

31. Condensed Consolidating Financial Statements

In accordance with the Indenture governing the Company’s 2014 notes, certain of the Company’s subsidiaries have guaranteed the notes, jointly and severally, on a senior secured basis.

The following presents the condensed consolidating financial statements separately for:

●

Parent company, the issuer of the guaranteed obligations;

●

Guarantor subsidiaries, on a combined basis, as specified in the Indenture;

●

Non-guarantor subsidiaries, on a combined basis;

●

Consolidating entries and eliminations representing adjustments to (a) eliminate intercompany transactions, (b) eliminate intercompany profit in inventory, (c) eliminate investments in its subsidiaries and (d) record consolidating entries; and

●

Parent company, on a consolidated basis.

Each subsidiary guarantor is 100% owned by Unifi, Inc. or its wholly-owned subsidiary, Unifi Manufacturing, Inc. and all guarantees are full and unconditional. The non-guarantor subsidiaries predominantly represent the foreign subsidiaries which do not guarantee the 2014 notes. Each entity in the consolidating financial information follows the same accounting policies as described in the consolidated financial statements. Supplemental financial information for the Company and its guarantor subsidiaries and non-guarantor subsidiaries for the 2014 notes is presented below.

Balance Sheet Information as of March 25, 2012:

	Parent		Guarantor Subsidiaries			Non-Guarantor Subsidiaries		Eliminations			Consolidated
ASSETS
Cash and cash equivalents	$	17,093	$	(5,037	)	$	23,764	$	—		$	35,820
Receivables, net		—		74,334			26,379		—			100,713
Intercompany accounts receivable		328,812		(319,583	)		2,779		(12,008	)		—
Inventories		—		74,785			37,632		—			112,417
Income taxes receivable		—		—			122		—			122
Deferred income taxes		2,841		—			1,220		—			4,061
Other current assets		116		994			5,266		—			6,376
Total current assets		348,862		(174,507	)		97,162		(12,008	)		259,509

Property, plant and equipment, net		8,689		101,253			24,581		—			134,523
Deferred income taxes		—		—			627		—			627
Intangible assets, net		—		9,871			493		—			10,364
Investments in unconsolidated affiliates		—		94,174			3,568		141			97,883
Investments in consolidated subsidiaries		438,841		—			—		(438,841	)		—
Intercompany notes receivable		—		—			20,098		(20,098	)		—
Other non-current assets		2,953		3,089			3,964		—			10,006
Total assets	$	799,345	$	33,880		$	150,493	$	(470,806	)	$	512,912

LIABILITIES AND SHAREHOLDERS’ EQUITY
Accounts payable	$	60	$	35,531		$	6,998	$	—		$	42,589
Intercompany accounts payable		343,983		(339,277	)		7,302		(12,008	)		—
Accrued expenses		5,713		7,142			2,596		—			15,451
Income taxes payable		18		—			1,236		—			1,254
Current portion of long-term debt		—		37			—		—			37
Total current liabilities		349,774		(296,567	)		18,132		(12,008	)		59,331

Long-term debt		158,722		—			—		—			158,722
Intercompany notes payable		—		—			20,098		(20,098	)		—
Other long-term liabilities		353		2,909			999		—			4,261
Deferred income taxes		2,841		—			102		—			2,943
Total liabilities		511,690		(293,658	)		39,331		(32,106	)		225,257
Total Unifi, Inc. shareholders’ equity		286,769		327,538			111,162		(438,700	)		286,769
Non-controlling interest		886		—			—		—			886
Total shareholders’ equity		287,655		327,538			111,162		(438,700	)		287,655
Total liabilities and shareholders’ equity	$	799,345	$	33,880		$	150,493	$	(470,806	)	$	512,912

Balance Sheet Information as of June 26, 2011:

	Parent		Guarantor Subsidiaries		Non-Guarantor Subsidiaries		Eliminations			Consolidated
ASSETS
Cash and cash equivalents	$	1,656	$	323	$	25,511	$	—		$	27,490
Receivables, net		—		69,800		30,015		—			99,815
Intercompany accounts receivable		3		6,755		500		(7,258	)		—
Inventories		—		84,193		50,690		—			134,883
Income taxes receivable		419		—		159		—			578
Deferred income taxes		3,482		—		2,230		—			5,712
Other current assets		122		588		4,881		—			5,591
Total current assets		5,682		161,659		113,986		(7,258	)		274,069

Property, plant and equipment, net		8,889		114,510		27,628		—			151,027
Intangible assets, net		—		11,612		—		—			11,612
Investments in unconsolidated affiliates		—		82,955		8,303		—			91,258
Investments in consolidated subsidiaries		456,288		—		—		(456,288	)		—
Intercompany notes receivable		—		—		16,545		(16,545	)		—
Other non-current assets		3,619		3,048		2,743		—			9,410
Total assets	$	474,478	$	373,784	$	169,205	$	(480,091	)	$	537,376

LIABILITIES AND SHAREHOLDERS’ EQUITY
Accounts payable	$	164	$	35,207	$	7,471	$	—		$	42,842
Intercompany accounts payable		409		—		6,849		(7,258	)		—
Accrued expenses		2,037		11,717		3,741		—			17,495
Income taxes payable		—		—		421		—			421
Current portion of long-term debt		—		342		—		—			342
Total current liabilities		2,610		47,266		18,482		(7,258	)		61,100

Long-term debt		168,322		—		—		—			168,322
Intercompany notes payable		—		—		16,545		(16,545	)		—
Other long-term liabilities		409		2,562		1,036		—			4,007
Deferred income taxes		3,482		—		810		—			4,292
Total liabilities		174,823		49,828		36,873		(23,803	)		237,721
Shareholders’ equity		299,655		323,956		132,332		(456,288	)		299,655
Total liabilities and shareholders’ equity	$	474,478	$	373,784	$	169,205	$	(480,091	)	$	537,376

Statement of Operations Information for the Three Months Ended March 25, 2012:

	Parent			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations			Consolidated
Net sales	$	—		$	130,734		$	48,748		$	(445	)	$	179,037
Cost of sales		—			121,472			44,643			(668	)		165,447
Gross profit		—			9,262			4,105			223			13,590
Equity in subsidiaries		(7,346	)		—			—			7,346			—
Selling, general and administrative expenses		—			8,468			2,680			—			11,148
Benefit for bad debts		—			(67	)		(77	)		—			(144	)
Other operating expenses, net		(4,301	)		4,389			575			6			669
Operating income (loss)		11,647			(3,528	)		927			(7,129	)		1,917
Interest income		—			(79	)		(693	)		201			(571	)
Interest expense		4,184			5			201			(201	)		4,189
Other non-operating income		—			—			(9	)		—			(9	)
Equity in (earnings) losses of unconsolidated affiliates		—			(9,719	)		(326	)		182			(9,863	)
Income (loss) before income taxes		7,463			6,265			1,754			(7,311	)		8,171
Provision for income taxes		153			—			708			—			861
Net income (loss) including non-controlling interest	$	7,310		$	6,265		$	1,046		$	(7,311	)	$	7,310
Less: net (loss) attributable to non-controlling interest		(225	)		—			(225	)		225			(225	)
Net income (loss) attributable to Unifi, Inc.	$	7,535		$	6,265		$	1,271		$	(7,536	)	$	7,535

Statement of Comprehensive Income (Loss) Information for the Three Months Ended March 25, 2012:

	Parent			Guarantor Subsidiaries		Non-Guarantor Subsidiaries			Eliminations			Consolidated
Net income (loss) including non-controlling interest	$	7,310		$	6,265	$	1,046		$	(7,311	)	$	7,310

Other comprehensive income (loss) (net of tax):
Foreign currency translation adjustments		2,793			—		2,793			(2,793	)		2,793
Gain (loss) on cash flow hedges		713			725		—			(725	)		713
Other comprehensive income (loss)		3,506			725		2,793			(3,518	)		3,506
Comprehensive income (loss) including non-controlling interest	$	10,816		$	6,990	$	3,839		$	(10,829	)	$	10,816
Less: comprehensive (loss) attributable to non-controlling interest		(225	)		—		(225	)		225			(225	)
Comprehensive income (loss) attributable to Unifi, Inc.	$	11,041		$	6,990	$	4,064		$	(11,054	)	$	11,041

Statement of Operations Information for the Three Months Ended March 27, 2011:

	Parent			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations			Consolidated
Net sales	$	—		$	126,831		$	53,122		$	(563	)	$	179,390
Cost of sales		—			119,657			45,008			(876	)		163,789
Gross profit		—			7,174			8,114			313			15,601
Equity in subsidiaries		6,292			—			—			(6,292	)		—
Selling, general and administrative expenses		—			7,709			3,089			—			10,798
(Benefit) provision for bad debts		—			(357	)		398			—			41
Restructuring charges		—			9			—			—			9
Other operating (income) expenses, net		(7,244	)		7,322			100			(20	)		158
Operating income (loss)		952			(7,509	)		4,527			6,625			4,595
Interest income		—			(63	)		(670	)		149			(584	)
Interest expense		4,873			9			283			(149	)		5,016
Loss on early extinguishment of debt		2,193			—			—			—			2,193
Other non-operating expenses		78			—			—			—			78
Equity in losses (earnings) of unconsolidated affiliates		—			2,450			(419	)		72			2,103
(Loss) income before income taxes		(6,192	)		(9,905	)		5,333			6,553			(4,211	)
(Benefit) provision for income taxes		(2,147	)		—			1,981			—			(166	)
Net (loss) income including non-controlling interest	$	(4,045	)	$	(9,905	)	$	3,352		$	6,553		$	(4,045	)
Less: net (loss) attributable to non-controlling interest		—			—			—			—			—
Net (loss) income attributable to Unifi, Inc.	$	(4,045	)	$	(9,905	)	$	3,352		$	6,553		$	(4,045	)

Statement of Comprehensive (Loss) Income Information for the Three Months Ended March 27, 2011:

	Parent			Guarantor Subsidiaries			Non-Guarantor Subsidiaries		Eliminations			Consolidated
Net (loss) income including non-controlling interest	$	(4,045	)	$	(9,905	)	$	3,352	$	6,553		$	(4,045	)

Other comprehensive income (loss) (net of tax):
Foreign currency translation adjustments		2,277			—			2,277		(2,277	)		2,277
Gain on cash flow hedges		1,146			1,403			—		(1,403	)		1,146
Other comprehensive income (loss)		3,423			1,403			2,277		(3,680	)		3,423
Comprehensive (loss) income including non-controlling interest	$	(622	)	$	(8,502	)	$	5,629	$	2,873		$	(622	)
Less: comprehensive (loss) attributable to non-controlling interest		—			—			—		—			—
Comprehensive (loss) income attributable to Unifi, Inc.	$	(622	)	$	(8,502	)	$	5,629	$	2,873		$	(622	)

Statement of Operations Information for the Nine Months Ended March 25, 2012:

	Parent			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations			Consolidated
Net sales	$	—		$	377,704		$	140,533		$	(1,077	)	$	517,160
Cost of sales		—			354,006			128,521			(1,669	)		480,858
Gross profit		—			23,698			12,012			592			36,302
Equity in subsidiaries		(775	)		—			—			775			—
Selling, general and administrative expenses		—			24,658			7,847			—			32,505
Provision (benefit) for bad debts		—			548			(130	)		—			418
Other operating (income) expenses, net		(13,568	)		13,581			1,097			8			1,118
Operating income (loss)		14,343			(15,089	)		3,198			(191	)		2,261
Interest income		—			(203	)		(2,062	)		552			(1,713	)
Interest expense		12,758			33			552			(552	)		12,791
Loss on extinguishment of debt		462			—			—			—			462
Other non-operating income		—			—			(1,488	)		—			(1,488	)
Equity in (earnings) losses of unconsolidated affiliates		—			(14,213	)		(203	)		250			(14,166	)
Loss on previously held equity interest		—			—			3,656			—			3,656
Income (loss) before income taxes		1,123			(706	)		2,743			(441	)		2,719
Provision for income taxes		1,344			—			1,596			—			2,940
Net income (loss) including non-controlling interest	$	(221	)	$	(706	)	$	1,147		$	(441	)	$	(221	)
Less: net (loss) attributable to non-controlling interest		(434	)		—			(434	)		434			(434	)
Net income (loss) attributable to Unifi, Inc.	$	213		$	(706	)	$	1,581		$	(875	)	$	213

Statement of Comprehensive (Loss) Income Information for the Nine Months Ended March 25, 2012:

	Parent			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations			Consolidated
Net (loss) income including non-controlling interest	$	(221	)	$	(706	)	$	1,147		$	(441	)	$	(221	)

Other comprehensive (loss) income (net of tax):
Foreign currency translation adjustments		(15,539	)		—			(15,539	)		15,539			(15,539	)
Gain (loss) on cash flow hedges		710			655			—			(655	)		710
Other comprehensive (loss) income		(14,829	)		655			(15,539	)		14,884			(14,829	)
Comprehensive (loss) income including non-controlling interest	$	(15,050	)	$	(51	)	$	(14,392	)	$	14,443		$	(15,050	)
Less: comprehensive (loss) attributable to non-controlling interest		(434	)		—			(434	)		434			(434	)
Comprehensive (loss) income attributable to Unifi, Inc.	$	(14,616	)	$	(51	)	$	(13,958	)	$	14,009		$	(14,616	)

Statement of Operations Information for the Nine Months Ended March 27, 2011:

	Parent			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations			Consolidated
Net sales	$	—		$	363,271		$	154,703		$	(1,353	)	$	516,621
Cost of sales		—			328,842			133,103			(1,961	)		459,984
Gross profit		—			34,429			21,600			608			56,637
Equity in subsidiaries		(10,711	)		—			—			10,711			—
Selling, general and administrative expenses		—			23,998			9,471			—			33,469
(Benefit) provision for bad debts		—			(559	)		645			—			86
Restructuring charges		—			1,555			—			—			1,555
Other operating (income) expenses, net		(19,311	)		17,238			660			1,830			417
Operating income (loss)		30,022			(7,803	)		10,824			(11,933	)		21,110
Interest income		—			(193	)		(2,154	)		352			(1,995	)
Interest expense		15,147			43			509			(352	)		15,347
Loss on extinguishment of debt		3,337			—			—			—			3,337
Other non-operating expenses		528			—			—			—			528
Equity in (earnings) losses of unconsolidated affiliates		—			(10,607	)		(1,614	)		334			(11,887	)
Income (loss) before income taxes		11,010			2,954			14,083			(12,267	)		15,780
(Benefit) provision for income taxes		(565	)		—			4,770			—			4,205
Net income (loss) including non-controlling interest	$	11,575		$	2,954		$	9,313		$	(12,267	)	$	11,575
Less: net (loss) attributable to non-controlling interest		—			—			—			—			—
Net income (loss) attributable to Unifi, Inc.	$	11,575		$	2,954		$	9,313		$	(12,267	)	$	11,575

Statement of Comprehensive Income (Loss) Information for the Nine Months Ended March 27, 2011:

	Parent		Guarantor Subsidiaries		Non-Guarantor Subsidiaries		Eliminations			Consolidated
Net income (loss) including non-controlling interest	$	11,575	$	2,954	$	9,313	$	(12,267	)	$	11,575

Other comprehensive income (loss) (net of tax):
Foreign currency translation adjustments		10,430		—		10,430		(10,430	)		10,430
Gain (loss) on cash flow hedges		7,873		8,129		—		(8,129	)		7,873
Other comprehensive income (loss)		18,303		8,129		10,430		(18,559	)		18,303
Comprehensive income (loss) including non-controlling interest	$	29,878	$	11,083	$	19,743	$	(30,826	)	$	29,878
Less: comprehensive (loss) attributable to non-controlling interest		—		—		—		—			—
Comprehensive income (loss) attributable to Unifi, Inc.	$	29,878	$	11,083	$	19,743	$	(30,826	)	$	29,878

Statements of Cash Flows Information for Nine Months Ended March 25, 2012:

	Parent			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations			Consolidated
Operating activities:
Net cash provided by (used in) operating activities	$	17,199		$	(3,733	)	$	13,788		$	—		$	27,254

Investing activities:
Capital expenditures		(56	)		(1,421	)		(3,860	)		8			(5,329	)
Investments in unconsolidated affiliates		—			—			(360	)		—			(360	)
Acquisition, net of cash acquired		—			—			(356	)		—			(356	)
Proceeds from sale of assets		—			113			119			(8	)		224
Proceeds from return of split dollar life insurance premiums		14			—			—			—			14
Net cash used in investing activities		(42	)		(1,308	)		(4,457	)		—			(5,807	)

Financing activities:
Payments of notes payable		(10,288	)		—			—			—			(10,288	)
Payments on revolving credit facility		(95,200	)		—			—			—			(95,200	)
Proceeds from borrowings on revolving credit facility		95,600			—			—			—			95,600
Debt financing fees		(194	)		—			—			—			(194	)
Proceeds from stock option exercises		71			—			—			—			71
Contributions from non-controlling interest		—			—			320			—			320
Dividends paid		8,291			—			(8,291	)		—			—
Other		—			(319	)		—			—			(319	)
Net cash used in financing activities		(1,720	)		(319	)		(7,971	)		—			(10,010	)

Effect of exchange rate changes on cash and cash equivalents		—			—			(3,107	)		—			(3,107	)

Net increase (decrease) in cash and cash equivalents		15,437			(5,360	)		(1,747	)		—			8,330
Cash and cash equivalents at beginning of the year		1,656			323			25,511			—			27,490
Cash and cash equivalents at end of the period	$	17,093		$	(5,037	)	$	23,764		$	—		$	35,820

Statements of Cash Flows Information for Nine Months Ended March 27, 2011:

	Parent			Guarantor Subsidiaries			Non-Guarantor Subsidiaries			Eliminations			Consolidated
Operating activities:
Net cash (used in) provided by operating activities	$	(2,556	)	$	4,709		$	(3,678	)	$	112		$	(1,413	)

Investing activities:
Capital expenditures		—			(11,935	)		(5,399	)		—			(17,334	)
Investments in unconsolidated affiliates		—			—			(707	)		—			(707	)
Return of capital from unconsolidated affiliate		—			—			500			—			500
Proceeds from sale of assets		—			9			180			—			189
Proceeds from return of split dollar life insurance premiums		3,241			—			—			—			3,241
Net cash (used in) provided by investing activities		3,241			(11,926	)		(5,426	)		—			(14,111	)

Financing activities:
Payments of notes payable		(47,588	)		—			—			—			(47,588	)
Payments on revolving credit facility		(105,325	)		—			—			—			(105,325	)
Proceeds from borrowings on revolving credit facility		143,125			—			—			—			143,125
Proceeds from stock option exercises		118			—			—			—			118
Dividends paid		—			5,909			(5,909	)		—			—
Purchase and retirement of Company stock		(2	)		—			—			—			(2	)
Debt financing fees		(825	)		—			—			—			(825	)
Other		—			(364	)		—			—			(364	)
Net cash (used in) provided by financing activities		(10,497	)		5,545			(5,909	)		—			(10,861	)

Effect of exchange rate changes on cash and cash equivalents		—			—			2,948			(112	)		2,836

Net decrease in cash and cash equivalents		(9,812	)		(1,672	)		(12,065	)		—			(23,549	)
Cash and cash equivalents at beginning of the year		9,938			1,832			30,921			—			42,691
Cash and cash equivalents at end of the period	$	126		$	160		$	18,856		$	—		$	19,142