Unifi Inc (UFI) 2015 Q1 法說會逐字稿

Good day, ladies and gentlemen, and welcome to the Unifi first-quarter earnings conference call. (Operator Instructions). As a reminder, this conference call is being recorded.

I would now like to turn the conference over to James Otterberg. Sir, you may begin.

Thank you, Operator, and good morning, everyone. Joining me for the call today is Bill Jasper, our Chairman and Chief Executive Officer, and Roger Berrier, our President and Chief Operating Officer.

During this call, we will be referencing a webcast presentation that can be found at www.Unifi.com. The presentation can be accessed by clicking the first-quarter conference call link found on our homepage.

Before we begin, I need to first advise you that certain statements included on today's call will be forward-looking statements within the meaning of federal securities laws. Management cautions that these statements are based on current expectations, estimates, and/or projections about the markets in which the Company operates.

These statements are not guarantees of future performance and involve certain risks that are difficult to predict. Actual outcomes and results may differ materially from what is expressed, forecasted, or implied by these statements. I direct you to the disclosures filed with the SEC in our Form 10-Qs and Form 10-Ks regarding various factors that may impact these results.

Also, please be advised that certain non-GAAP financial measures, such as adjusted EBITDA, will be discussed in this call and a Non-GAAP reconciliation can be found in the schedules to the webcast presentation.

Before we get to the financial details for the quarter, I'd like to turn the call over to Roger, who will provide you with an overview of the Company's markets, raw material trends, and other business updates.

Thanks, James, and good morning, everyone.

I'll start this morning with a few brief comments regarding our outlook for our key retail market segments.

Earlier this month, the National Retail Federation said that it expects sales in November and December to increase 4.1%, which is a full percentage point ahead of last year's gain and above the 10-year average annual increase of 2.9%. This is a very encouraging sign for the brands and retailers that we work with, and should help maintain momentum for Unifi as we progress through our fiscal year.

We also expect to see incremental growth from the CAFTA region, as retailers and brands maintain regional sourcing as part of their overall sourcing plan. Apparel production continues to grow in the NAFTA and CAFTA regions, and the share of apparel production for these regions as a percentage of US retail has stabilized at approximately 18%.

In addition to these positive indicators, we have also completed during the quarter an updated long-term yarn supply agreement with Hanesbrands, which will be in effect through June 30, 2018.

The automotive segment will continue to present opportunities for the Company, particularly as we make inroads with our REPREVE recycled yarn, which is being used for seating fabrics. Low interest rates, moderating fuel prices, and new fuel-efficient models are helping to increase US auto sales, which are on a 16.4-million unit pace compared to 15.6 million last year.

We are pleased with the year-over-year improvement in our net sales revenue, which is attributable to improved volume in the Company's nylon and international segments, combined with mix enrichment's related improvements in our domestic polyester segment.

Prices for polyester raw materials increased by 4.4% in the September 2014 quarter compared to the June 2014 quarter. However, prices for polyester raw materials are decreasing in the December 2014 quarter based on the recent decline in crude oil. We will continue to offer our customers pricing stability throughout these shifts in raw materials, which is something that has become valuable to them, given the length of time that it takes for them to go from yarn to finished goods. We will continue to see pressure from imports on the lower end of our commodity business as the gap in polymer pricing between the US and Asia remains in the $0.13- to $0.14-per-pound range.

Based on the success of our domestic business, the strength of our future orders, and success of our mix enrichment strategies, the Company expects to increase capital expenditures in fiscal-year 2015 beyond the approximately $8 million to $10 million of annual maintenance capital expenditures that extend the useful life of existing assets. A few of these projects that are currently under consideration include the following.

We expect to increase our textured polyester yarn capacity by adding approximately 10 texturing machines to the Company's locations in Yadkinville, Madison, and El Salvador. This incremental capacity will allow us to better serve the growing demand for synthetic yarns in the CAFTA regions. The addition of these machines will also improve our manufacturing flexibility, including our small production-run capabilities, which will allow us to support the Company's mix enrichment strategies, while also improving our ability to better service customers and handle an increasingly complex product mix.

We are finalizing the engineering details to convert another one of our POY spinning machines into six smaller machines, which will provide enhanced capability to produce PVA products and smaller order sizes more efficiently, which matches up with our customer demands and expectations.

We will also look at expanding our air jet texturing capacity to take advantage of the opportunity to grow our market share in this product category.

We are also in the final stages of securing permits for a solar farm at our Yadkinville facility, which we expect to bring online in May 2015. The solar farm will fit on five to six acres and have a 1-megawatt capacity, which is enough to power about 10% of the recycling activity that takes place at the REPREVE recycling center. As leaders in sustainability, we believe that the solar farm will help demonstrate our commitment to doing what's right for the environment and will help set us apart in the marketplace.

We are also looking at acquiring additional warehouse space in Yadkinville to support the growth of REPREVE.

And to further leverage the continued success and growth of REPREVE, and to secure a future supply of plastic bottles, we are continuing to explore potential backward-integration opportunities into bottle washing, which may include either acquisition or greenfield opportunities.

Looking at our REPREVE capacity utilization, based on current forecasts we expect to be at our maximum capacity for REPREVE within the recently expanded REPREVE recycling center by the end of calendar-year 2015. Accordingly, in addition to exploring backward integration, we will likely look to increase capacity for REPREVE in calendar-year 2016 through a further expansion of the REPREVE recycling center building in Yadkinville to add a fourth recycling line.

Turning to our international businesses, the conditions in Brazil continue to be challenging. Economic growth has stagnated and all eyes will be on the results of the runoff election on Sunday. With our commodity business still under attack from lower-priced imported DTY, we continue to focus our efforts on mix enrichment and we are seeing more interest in our differentiated products. While we continue to anticipate that our volume in Brazil for the 2015 fiscal year will be relatively flat compared to last year, we expect improvements to our margins in the range of $2 million to $2.5 million, based on the POY duty reduction that was re-enacted by the Brazilian government and progress in our mix enrichment efforts.

Our results in China remain slightly behind previously targeted goals, but our operations there continue to be profitable. We have started to pick up REPREVE and SORBTEK programs that we have been working on for some time and we anticipate improved earnings during the next 12 months as these programs continue to come on-line.

Turning to our PVA products, we continue to drive demand for REPREVE through highly visible partnerships and consumer-based activations.

In early December, we will launch the first-ever Turn It Green Week, where the brand will drive awareness and education by using green-colored REPREVE-based products in various event activations. During this one week of events, the brand will recycle more than 300,000 plastic bottles into REPREVE-based items, ranging from rally towels to T-shirts to hats and other cool stuff. A kickoff event will take place on December 3 with UNC Chapel Hill, when REPREVE will turn the Dean Smith Center from blue to green during an ESPN nationally televised basketball game between the UNC Tar Heels and the Iowa Hawkeyes. As a partner of UNC athletics, UNC will help drive REPREVE awareness in recycling among UNC students, faculty, fans, and alumni through a number of events, including a campus-wide recycling challenge that will tie into the 2015 graduation ceremony, as each graduating student will be wearing a REPREVE-based graduation gowns.

On Sunday, December 7, REPREVE will once again be turning Ford Field green with NFL team the Detroit Lions. Each of the 65,000 fans attending the game will get a REPREVE green rally towel, made with three plastic bottles, which will help highlight the season-long recycling campaign. Additionally, REPREVE recently launched this Make The Smart Throw campaign with NFL quarterback Matthew Stafford. Stafford is challenging fans to demonstrate how they make the smart throw, by encouraging consumers to submit trick-shot videos that show them throwing plastic bottles into recycling bins. To kick off this national campaign, Stafford was on air promoting a chance to compete against him in a head-to-head bottle recycling contest, which was picked up and aired on various channels, including ESPN SportsCenter, ESPN NFL Live, ESPN Radio, SportsIllustrated.com, Yahoo Sports, and many others.

In addition to these programs, Marvel Universe Live! will be integrating REPREVE into various products. Through an 85-city tour, REPREVE will be in the pants, jackets, socks, and base-layer T-shirts worn by the cast and crew, through the help of our partner brands such as Hager, Patagonia, Asia Fleur, Swiftwick, and drirelease. Merchandise items and concourse banners will also be made with REPREVE recycled fiber.

As we continue to build our REPREVE brand at the consumer level, we are excited that these nationally recognized brands have chosen to join our REPREVE #TurnItGreen movement in an effort to raise awareness around the importance of recycling. Our marketing efforts have attracted the attention of many brands and retailers and have led to the development and adoption of new programs featuring REPREVE or our other PVA products. Some examples of our new programs that will be available soon include:

North Face Reaxion T-shirts and Surgent hoodie, both which are made of REPREVE;

A pant program at Target under the Murano label will be made from a blend of cotton and REPREVE;

A new shoe made with REPREVE will be available from DC Shoes, a Quicksilver company;

A Greg Norman polo shirt program made with SORBTEK;

CrossFit pants, T-shirts, shorts, socks made from a blend of three of our PVA products.

We have also been contacted by numerous professional sports teams, which we are vetting to determine the best opportunities to reach our target audience and build even more awareness for the REPREVE brand.

With that as a backdrop, I will turn the call back over to James.

Thank you, Roger.

I will begin the review of our preliminary financial results for the September quarter on page 3 of the presentation, with Net Sales and Gross Profit Highlights by Segment.

Net sales increased $5.5 million, or 3.3%, to $174 million for the September 2014 quarter, compared to net sales of $169 million for the prior-year quarter. The year-over-year improvement in net sales is attributable to improved volume in the Company's nylon and international segments, along with mix enrichment improvements in the Company's polyester segment.

Consolidated sales volume is essentially unchanged from the prior-year quarter, as volume increases in our nylon and international segments were offset by a decline in the polyester segment. The 4.2% decline in sales volume for our polyester segment was primarily due to lower chip sales and a lower average [tenure].

International-segment sales volume was 4.7% higher than the prior-year quarter, due to higher volumes in China as a result of improved market conditions in several sales programs beginning to start up, while volumes in Brazil remained relatively flat.

Increases in pricing in the polyester and nylon segments are attributable to PVA and mix enrichment efforts, while the change in pricing for the international segment versus the prior-year quarter reflects the difficult market conditions in Brazil.

When reviewing our current-quarter gross profit results against the year-ago quarter, the Company is reporting higher consolidated gross profits, as well as higher gross profits for each of our three reportable segments. For Q1 of this fiscal year, gross profit improved to $20.9 million and 12.0% of net sales.

Turning to slide number four, I will now review our income-statement highlights for the first quarter.

For the three months ended September 28, 2014, the Company is reporting preliminary pretax income of $10.8 million on $174 million of net sales.

Pretax income is $3.6 million lower than the $14.4 million of pretax income generated during the prior-year quarter. This reduction in our quarterly pretax income is primarily attributable to:

lower earnings from our equity affiliates, which we will discuss some on the next slide;

approximately $600,000 in manufacturing variances for our domestic operations, stemming from the timing of our summer shutdown schedules;

higher amounts of net interest expense, due to $1.1 million of interest income received by our Brazilian subsidiary during the first quarter of the prior year, which was related to a settlement of a judicial claim;

$600,000 increase in our provision for bad debts, which was primarily related to a one-time event in Brazil caused by a customer bankruptcy filing.

Our mix enrichment activities and other improvements in our underlying margins partially offset these items.

In addition, current-quarter SG&A expenses were higher than the year-ago quarter due to the timing associated with various marketing expenses and professional fees, along with higher amounts of non-cash compensation expenses.

For the current quarter, we are reporting preliminary basic EPS of $0.39 against $0.46 for the prior-year quarter. The decline in average basic shares outstanding to 18.3 million shares from the prior-year quarter's 19.3 million shares was due to the Company's previously announced stock repurchase programs.

Based on the success of our mix enrichment initiatives, indications of a declining raw material environment, and the absence of the manufacturing variances experienced during the first quarter, we expect to see continued increases in our gross profits and our gross margin percentages for the upcoming quarter.

Beginning on slide number five, we can review our equity affiliates highlights.

As of September 28, 2014, the Company has approximately $103 million reported for investments in unconsolidated affiliates. These investments consist of our 34% ownership in Parkdale America and our 50% interest of two joint ventures that supply raw materials to our domestic nylon operations.

For the current quarter, these equity affiliates accounted for $3.7 million of the Company's pretax earnings, which is a decline of $2.4 million versus the prior year's fiscal quarter.

Lower earnings for Parkdale America can primarily be attributed to lower amounts of income recognized under the EAP rebate program.

During the quarter, we received no distributions from either Parkdale America or our two nylon joint ventures. We are, however, excited about several value-adding capital projects currently ongoing at Parkdale and are forecasting distributions to be limited to the routine tax distributions from the JV to its members for the remainder of this fiscal year.

Turning to slide number six, the Company's adjusted EBITDA results are presented.

For the first quarter of the current fiscal year, the Company is reporting adjusted EBITDA of $14.2 million, with an EBITDA margin of 8.1%, in comparison to $14.5 million and a margin of 8.6% for the prior-year quarter.

The timing associated with the manufacturing variances related to the Company's July 4 shutdown and the higher provision for bad debts are the primary reasons for the lower adjusted EBITDA versus the year-ago quarter.

On slide number seven, we can review the Company's working capital highlights.

The Company's balance of $146 million in adjusted working capital -- defined as AR plus inventory, less AP and accrued expenses -- was approximately 21% of annualized net sales.

The increase in the Company's adjusted working capital dollars versus the beginning of the fiscal year was primarily due to lower amounts for accounts payable and accrued expenses, due to CapEx payments made during the quarter, and payments under variable compensation programs. There were no significant changes in the balances for accounts receivable or inventory.

Total working capital at the end of September was $151 million and this balance is relatively flat versus the beginning of the year.

The increase in Other Current Liabilities is primarily driven by an increase in the current portion of debt due under our ABL facility and an increase in income taxes payable.

Turning to slide number eight, details for the Company's capital structure are presented.

The Company ended the quarter with $111.6 million of total debt and net debt of $95.8 million, and net debt has increased approximately $12.2 million from the beginning of the fiscal year.

During the quarter, we completed the fifth amendment to our credit agreement, which, among other things, increased our borrowing capacity by $22 million.

As of September 28, the Company's weighted average interest rate for its outstanding indebtedness was approximately 3.1% and our total revolver availability and liquidity were $72.5 million and $88.3 million, respectively.

In addition, the Company was able to repurchase 149,000 shares of its common stock at a total cost of $4.2 million under a previously announced stock repurchase program. As of quarter-end, there were 18,165,000 shares outstanding.

The various capital-spending opportunities outlined earlier by Roger are primarily related to our core regional polyester and recycling businesses. The total amount is expected to be approximately $50 million, with the expectation for growth in our PVA and higher-value product lines. And a portion of these projects are expected to be funded with the borrowings available under our ABL revolver.

And to conclude with slide number nine,

We have provided details for the Company's upcoming 10-Q filing and our annual investor meeting to be held on November 6 at the New York Stock Exchange.

With that, I would like to now turn the call over to Bill.

Thanks, James. Good morning, everyone.

I'd like to begin by saying that I'm pleased with the start of our 2015 fiscal year, especially as it relates to our sale volume. The $174 million in net sales was our highest first-quarter revenue since September 2010 quarter. We are particularly encouraged by the year-over-year increase in sales volume in China and Brazil, which reflects the positive effects of our mix enrichment strategy and the pickup of some programs that have been in development for quite some time, especially in China. Although local conditions in Brazil and China remain challenging, we are confident that we will see continued success with our differentiated products and that sales and profitability will continue to improve in these markets.

Apparel production continues to grow in the NAFTA/CAFTA region, and increases in US retail spending, as well as re-shoring of synthetic apparel programs, are fueling increases in the consumption of synthetic yarns within the CAFTA region. Our sales volume and unit conversion margin improvement in Central America in the September 2014 quarter, compared to a year-ago quarter, and our plans to increase our texturing capacity in Yadkinville, Madison, and El Salvador will help us meet the growing supply needs and better service the needs of our customers -- sourcing from the region.

In terms of trade legislation, progress on the Trans-Pacific Partnership remains stalled, primarily due to issues with Japan that are focused on agriculture and autos. While there have been constructive working-level discussions recently between the US and Japan, both sides have been unable to make further progress on key outstanding issues. The National Council of Textile Organizations, an association representing the entire spectrum of the textile sector, has been engaged with both Congress and the USTR to ensure the interests of the industry are heard and considered during these negotiations, which interests includes a strong yarn forward rule of origin, fair terms for market access, duty phaseouts, and strong customs enforcement rules and implementation. In any event, we do not expect the legislation to be completed this calendar year.

While our REPREVE renewables joint venture remains a long-term development business, we have had success with trials of our product in the poultry bedding market. The trials to date have been generally positive, and we have entered into a contract with a large poultry producer to provide bedding on an ongoing basis for many of its poultry houses. We anticipate additional producers will come on board and will consider expanding our farming operations for this market over the next year or two. I will point out, however, that while these opportunities can provide very high returns, the majority of those returns, and hence the positive impact on REPREVE renewables' financial results, are concentrated at years three through 10, which is when maturing fields provide greater harvest yields.

Our adjusted EBITDA in the September 2014 quarter was comparable to the year-ago quarter, falling only slightly short of the $15 million adjusted EBITDA goal for this quarter. Absent the provision for Brazilian bad debt, adjusted EBITDA for the quarter would have been as anticipated. Our first quarter over the previous-year first-quarter adjusted EBITDA was essentially unchanged. While the impact of the bad debt and roughly $600,000 in manufacturing variances stemming from the timing of the July 4 shutdown are removed, our underlying business improved by approximately $1 million in the quarter versus the previous-year quarter.

As Roger mentioned earlier, we have identified several opportunities for profitable growth and are increasing capital spending to pursue the most attractive of these opportunities, which our continuing ability to generate excess cash permits us to do. We will evaluate each opportunity for consistency with our corporate-level strategies, return on investment, probability of success, and ultimate impact on shareholder value. Examples currently underway, as Roger mentioned, or under consideration, include our texturing-capacity increase in the region; further improving asset flexibility, especially in polyester yarn spinning; and continuing to explore the potential backward integration opportunities for our REPREVE operation into bottle washing. As James mentioned, we expect to spend up to $50 million in fiscal 2015 in capital. This assumes, of course, that all proposed projects have appropriate returns, once completely vetted. The majority of these strategic growth opportunities are expected to be funded with cash flows from operations, and any remaining portion will be funded by our additional borrowing capacity. We will provide quarterly updates on our progress and expect to begin seeing positive results from these projects as early as the end of this fiscal year.

As we look ahead, we are encouraged by many positive indicators for our business, including:

continued growth in demand for our broad portfolio of compliant yarns, based on the increased consumption of synthetic yarns within the CAFTA region;

The completion of a new long-term supply agreement with Hanesbrands, which extends this important relationship through June 30, 2018.

The continued success of our mix enrichment strategy, particularly as the awareness created by our marketing programs with the Detroit Lions, UNC Chapel Hill, and Marvel Universe Live! help increase demand for our REPREVE products among brand and retailers.

Continued increases in sales and profitability in Brazil and China.

And our continued success in driving financial improvement to our core business through lean manufacturing, statistical process control, a rigorous and disciplined improvement process, and market-share gain initiatives.

With that as a foundation, we expect adjusted EBITDA to be about $15 million to $16 million in the December quarter, and our guidance for adjusted EBITDA for the 2015 fiscal year remains as before -- as stated before, in the low to mid $60 million range.

And with that, I will turn the call over to the operator for any questions.

(Operator Instructions). Chris McGinnis, Sidoti & Company.

Just on the size of the CapEx, do you mind walking through some of the -- maybe just the -- which initiatives and maybe how much they are, or what are the bigger initiatives and the price points around that? Just a little more detail on that, if you don't mind.

Yes, Chris, just to give you a rough breakdown, first of all, about $10 million of the $50 million is going to be for regular maintenance, and that's really a little more than we have spent -- or we have spent in the past, because we delayed some maintenance programs. But I would say $10 million to $12 million of that would be for just maintaining our equipment, keeping it in good running order.

I think in addition to that, roughly $10 million to $15 million of it will be REPREVE recycle center related, and whether that be further expansion in the recycle center, or at least laying the groundwork for that, or backward integration into bottle washing, should we choose to do that.

And really the rest are going to be primarily PVA-related programs, like flexibility in spinning, adding to our air jet texturing in our texturing facility, other projects to provide additional capacity or flexibility to grow our PVA products. And then, of course, we've got the solar farm and the warehousing Roger mentioned, which make up the rest.

But again, we have several programs that are in the pipeline right now. We're vetting them all and we probably wouldn't want to go more in detail on that until we had more information, but certainly on succeeding calls, we will be discussing these projects as we begin to initiate them.

Sure. One point on Roger's -- I may have missed it, the REPREVE. You expect in calendar 2015 that the REPREVE, I guess the new capacity, you'll be fully utilized, and that's when the expansion would happen? I was a little unclear what Roger said, so if you could just walk me through that, if you don't mind.

Yes, yes, let me just sort of go through that again.

You know, we talked about, as Bill mentioned, the project that we are vetting out for this fiscal year, fiscal-year 2015. We just recently expanded the REPREVE recycling center and we expanded the capacity up to 72 million pounds.

We also get the question, when do we expect to fully utilize that capacity, based on the growth projections that we have? We have enough capacity in the current REPREVE recycling center to carry us through this fiscal year, but we do anticipate by the end of next calendar year, so by the end of calendar-year 2015, we will have to start expanding that again.

So when we look out and we start projecting out a two-year forecast for CapEx, you know, we do see more CapEx coming in the following fiscal year around expanding that REPREVE recycling center.

Great, thank you for that. I appreciate that.

The strengthening margin profile in the international, it's nice to see that come back. What's changed? If the market remains somewhat difficult, is it -- you know, it was also surprising to see volume growth in there. Can you maybe just walk me through what regions played the best, the most support? I thought Brazil was heavily weighted there and it seems that that's still difficult. So, could you maybe just walk me through the profit profile change, and then also the volume pickup in the international market?

Yes, Chris, again, I think as we did mention in China, we've been working on some programs for quite some time. You know, we spoke on earlier calls that we've been a little disappointed in, I guess, the rate of these programs coming online in China, but during the last quarter, these programs have finally become reality and we're starting to see the volume return to China that we've anticipated.

And we see that trend continuing as these programs do further come online. So as we've talked before, we're really encouraged about the future of China and how much contribution China can make to Unifi from a PVA standpoint.

When we look at Brazil, you know the volume in Brazil is relatively flat, speaking, but we've really focused in Brazil on mix enrichment efforts and we're starting to see some of these mix enrichment efforts pay off in Brazil.

So it's a combination of those two factors that we are able to report a little improved profitability in our international segment.

Great. I think, James, this would probably be for you, but just on the SG&A level, was there something special in that? You may have commented, but I may have missed it. You know, just a big increase from the prior year; just wondering if you could dig into that a little bit.

Hey, Chris, thanks. It's primarily three things. It's just timing associated with marketing expenses tied into the initiatives that Roger outlined, other timing for professional fees, and then the stock price has risen over the last 12 months. The charges for non-cash compensation equity awards is higher in the current year than the prior year. So those are the three big items.

Great. And just quickly, one last question. How much is left on the current authorization?

Approximately $40 million.

$40 million, all right. I'll jump back in the queue. Thank you, guys.

Eric Pisauro, Regency Group.

Good morning, gentlemen. You mentioned the Parkdale America results were affected significantly by the EAP rebate program. Could you please explain that point further, specifically whether it's a timing difference or it's a permanent impact?

Good morning, Eric. How are you? This is James. I'll answer that one for you.

Thanks, James.

The cash receipts that Parkdale America and other cotton spinners receive happens every day at approximately $0.03 a pound for every pound that's opened. The income statement and our share of the earnings that we referenced is impacted by the timing of when the CapEx that is put in place that is a condition to that rebate agreement.

So in prior periods, Parkdale had received more cash than machinery and equipment they had put in place or capitalized, so there was a large catch-up or timing event in the prior-year period. The current-year period is a normal amount and is unimpacted by timing. So the prior-year comp was unusually high.

That's great. Thank you.

(Operator Instructions). We have a follow-up question from Chris McGinnis of Sidoti & Company. Your line is open.

Thanks. Just to follow up on that, James, did you say that the distribution -- could you just walk through what you expect for the distribution this year on a dollar amount? I guess that's to UFI itself?

Thanks, Chris. That's a good question.

As we talked about earlier, Parkdale is also going through some current capital projects, and due to the timing associated with those, our expectation is to receive the routine quarterly tax distribution. And the amount of the routine and quarterly tax distributions has historically been about $4 million to $5 million a year, with the remainder that we've seen being special distributions from excess cash flow.

So no special distribution this year, you don't believe?

We don't believe -- that's a fair statement.

All right. And their balance sheet's still very solid, and --

Yes, tremendous. Their core business is great, their balance sheet is pristine. You know, those themes certainly continue.

Great. All right, thank you very much.

Thank you. There are no further questions in queue at this time. I'll turn the call back over for closing remarks.

Okay, this is Bill, just a few closing remarks.

First and foremost, I want to tell you just how excited and optimistic we are about our markets and our business right now. I think just as importantly is we've got the cash to execute on some growth opportunities, and the fact we have these growth opportunities obviously makes us very excited. So we do believe that our results are going to continue to improve.

I think on one down note, I do want to just mention that night before last that Duke Kimbrell, who's the Chairman of Parkdale Mills, passed away. And he was really one of the true giants of the industry and one of the finest men I've ever known. He's going to be missed by me and by the entire industry. All of us at Unifi send our heartfelt condolences to Andy and Pam Warlick and the entire Parkdale family.

And with that, we will sign off. Thanks.

Thank you. Ladies and gentlemen, this concludes today's conference. You may now disconnect. Good day.