100726--9/11/2009--UNIFI

related topics

{cost, regulation, environmental}

{debt, indebtedness, cash}

{condition, economic, financial}

{acquisition, growth, future}

{cost, operation, labor}

{customer, product, revenue}

{operation, international, foreign}

{stock, price, operating}

{personnel, key, retain}

{financial, litigation, operation}

{operation, natural, condition}

{product, market, service}

{competitive, industry, competition}

{property, intellectual, protect}

{tax, income, asset}

Global capital and credit market conditions, and resulting declines in consumer confidence and spending, could have a material adverse effect on the Company s business, operating results, and financial condition. The significant price volatility of many of the Company s raw materials and rising energy costs may result in increased production costs, which the Company may not be able to pass on to its customers, which could have a material adverse effect on its business, financial condition, results of operations or cash flows. The Company depends upon limited sources for raw materials, and interruptions in supply could increase its costs of production and cause its operations to suffer. The Company is currently implementing various strategic business initiatives, and the success of the Company s business will depend on its ability to effectively develop and implement these initiatives. The Company s substantial level of indebtedness could adversely affect its financial condition. Despite its current indebtedness levels, the Company may still be able to incur substantially more debt. This could further exacerbate the risks associated with its substantial leverage. The Company will require a significant amount of cash to service its indebtedness and fund capital expenditures, and its ability to generate cash depends on many factors beyond its control. The terms of the Company s outstanding indebtedness impose significant operating and financial restrictions, which may prevent the Company from pursuing certain business opportunities and taking certain actions. The Company faces intense competition from a number of domestic and foreign yarn producers and importers of textile and apparel products. The Company is dependent on a relatively small number of customers for a significant portion of its net sales. Changes in the trade regulatory environment could weaken the Company s competitive position dramatically and have a material adverse effect on its business, net sales and profitability. A decline in general economic or political conditions and changes in consumer spending could cause the Company s sales and profits to decline. Failure to successfully reduce the Company s production costs may adversely affect its financial results. Changes in customer preferences, fashion trends and end-uses could have a material adverse effect on the Company s business, net sales and profitability and cause inventory build-up if the Company is not able to adapt to such changes. The Company has significant foreign operations and its results of operations may be adversely affected by currency fluctuations. The success of the Company depends on the ability of its senior management team, as well as the Company s ability to attract and retain key personnel. The sale of a large number of shares held by members of the Company s Board of Directors could depress the market price of the Company s common stock. The Company is subject to periodic litigation and other regulatory proceedings, which could result in unexpected expense of time and resources. Execution of the Company s strategy will involve a further increase in international operations. Significant international operations involve special risks that could increase expenses, adversely affect operating results and require increased time and attention of the Company s management. The Company s business could be negatively impacted by the financial condition of its customers. Failure to implement future technological advances in the textile industry or fund capital expenditure requirements could have a material adverse effect on the Company s competitive position and net sales. Unforeseen or recurring operational problems at any of the Company s facilities may cause significant lost production, which could have a material adverse effect on its business, financial condition, results of operations and cash flows. The Company has made and may continue to make investments in entities that it does not control. The Company s acquisition strategy may not be successful, which could adversely affect its business. Increases of illegal transshipment of textile and apparel goods into the U.S. could have a material adverse effect on the Company s business. The Company is subject to many environmental and safety regulations that may result in significant unanticipated costs or liabilities or cause interruptions in its operations. Health and safety regulation costs could increase. The Company s business may be adversely affected by adverse employee relations. The Company s future financial results could be adversely impacted by asset impairments or other charges.

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100726--9/11/2009--UNIFI_INC