Good morning. My name is Therese, and I will be your conference operator today. At this time, I would like to welcome everyone to the Unifi First Quarter Earnings Conference Call. [Operator Instructions] I will now turn the conference over to James Otterberg, Unifi's Chief Financial Officer. Go ahead, James.

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 unifi.com. The presentation can be accessed by clicking the Fourth 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, forecast or implied by these statements. I direct you to the disclosures filed with the SEC and 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 on 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 and raw materials trends. Roger?

Thanks, James, and good morning, everyone. I will start this morning with a few general comments regarding the retail market. Same-store sales during the back-to-school period were considered lackluster by many analysts, and came in below expectations for many retailers this year. Many analysts attribute the slow back-to-school sales to following consumer confidence in light of worries over the government shutdown and the fact that consumers continue to focus on bigger ticket items such as cars, housing and student loans versus traditional back-to-school purchases. Looking ahead, while projections for the critical holiday season prior to the government shutdown were generally optimistic, it remains to be seen what the real impact of the partial government shutdown will be on consumer spending. Heading into the holiday period, we are encouraged by the fact that inventories throughout the apparel and furnishing supply chain have remained stable over the past few quarters. Additionally, the region, which includes NAFTA and CAFTA, has held its sourcing share of synthetic apparel at a steady rate of 18% for the last 5 years. Coupled with a 5% to 7% average annual growth rate of square meters of synthetic apparel sourced from the region, this has increased demand for our products and will continue to create future demand based on sourcing from this region. Regional demand for our commodity, specialty and PVA products continue to create stability and growth opportunities for our core business. Looking at the automotive segment, which has remained robust for the last 3 consecutive years, projections are that it will continue to perform well this year with a annual growth rate of 8% for auto sales and an annual growth rate of 5% for auto production. In terms of polyester raw materials. We saw increased raw material prices in the September 2013 quarter compared to…

Thanks, 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. In the polyester segment, we had a strong September quarter with sales volume growing 1.5% compared to the September 2012 quarter and gross profit improving $2.2 million to $10.4 million. The increase in gross profit is primarily attributable to improve volumes and conversion margins, as well as lower depreciation expenses. In the nylon segment, gross profit improved $600,000 as volumes increased 3.3% and conversion margins were higher due to the success of new PVA programs discussed earlier by Roger. In the international segment, volumes decreased 5.8% in the September 2013 quarter compared to the September 2012 quarter, primarily due to lower sales volume in China and gross profit was lower for both Brazil and China. China's decline in gross profit was driven by lower sales volumes which were partially offset by improved margins. Brazil's gross profit was unfavorably impacted by a combination of higher per unit manufacturing costs due to lower capacity utilization, lower VAT tax incentive benefits and negative currency translation effects caused by a weakened Brazilian real versus the U.S. dollar, which were partially offset by slightly higher sales volumes and improving local currency conversion margins. Turning to the income statement highlights for the September quarter on Page 4. The company is reporting earnings per share of $0.46 on net sales of $168.7 million for the September 2013 quarter. On a consolidated basis, gross profit increased approximately $2 million and 140 basis points based on increased domestic sales volumes, higher conversion margins generated from the company's PVA sales growth and mix enrichment efforts and lower depreciation expenses. SG&A expenses declined $1 million due to lower cost for…

Thanks, James, good morning, everyone. I'm pleased with our results for the first quarter. Despite weakness in our international businesses, we increased revenues domestically and maintained strong margins in both polyester POY and DTY, had strong results in our dyed yarn, beam yarn and nylon businesses and saw continued strong shipments into the CAFTA region. In addition, I am confident in our PVA strategies and expect sustained growth through this fiscal year as several new programs come online, as Roger mentioned, adding to our sales in this important segment of our business. I have been disappointed in the results of our Brazil business which has suffered from a sluggish local economy, high inflation, the loss of a VAT benefit we previously enjoyed and a weakened currency. We are, however, seeing improvement in our results there, which we expect to continue as we take advantage of lower duties on imported POY to increase the sales of our higher margin manufactured products, increase sales of PVA products and aggressively manage price to overcome inflationary cost increases. In the longer term, we are taking action to assure we are out well positioned to profitably grow as the economy improves and the textile consumption increases in the years ahead. I remain confident in our China business model and am encouraged by the many new PVA sales opportunities in the pipeline, as well as increased activity and opportunity in Europe that Roger mentioned. Turning to our balance sheet, we have seen a temporary increase in working capital related to timing in our accounts payable, as well as an increase in inventories. Some of this inventory increase is driven by one-time preproduction purchases related to a new high-value PVA business. In addition, we reacted slowly to the loss of some low-end commodity business and produced beyond…

[Operator Instructions] Our first question comes from Chris McGinnis with Sidoti & Company. Christopher McGinnis - Sidoti & Company, LLC: I guess, just quickly. Roger, you talked about maybe some positives in the domestic region, but you also talked about maybe a little bit of consumer demand, maybe starting to slow here. Can you maybe just walk through the -- is it the newer programs on the REPREVE side that give you the confidence for the outlook of the year?

Yes, I think, when we talk to our customers and also the brands and retailers, I mean, they're very cautious about the upcoming holiday season. And they're very nervous about providing us any long-term forecasts for volumes and making any commitments to those volumes. But again, they see some stability and we're certainly feeling the stability in our production volumes. But it just makes us hard to forecast out that volumes will increase over the next 6 months. So we are -- as Bill mentioned, I think for the second quarter, our forecast, we're looking at more stability in volumes. We're cautiously optimistic about the holiday season. And one thing that we pay attention to is the inventories in the supply chain and we see them being relatively flat for the last few quarters. So any pick up at retail, we should immediately feel the impact. For, as you mentioned and we discussed on the call here, our PVA strategy continues to be very positive for us. We continue to get more and more placement for REPREVE and SORBTEK and our other PVA products. So we projected out that we were going to double our PVA from our 2010 baseline that we would achieve that by the end of this fiscal year. And we're on track to do that, so it's very encouraging. We announced various CapEx plans to support our PVA strategy, and we're in the middle of making those purchases. And we'll be installing additional equipment in the third and fourth quarter this year. So that plan remains on track. Christopher McGinnis - Sidoti & Company, LLC: And then just quickly on the international division in China. Was the weakness attributable -- was it 1 customer? I remember, in the past that there was 1 large customer that could weigh on the volumes there, and is that kind of reflective of the weakness?

Well, in previous calls, specifically in China, when we talk about our international segment, we did have one major customer in China that was off. They're still moderately off. They did come back into the market, but they're not back to where their historical norms would be. They serviced heavily into the European market and that European market just hasn't rebounded fully to where the U.S. market has recovered somewhat. So we're still missing some volume at that 1 customer. But we've replaced some of that volume with some new programs. And we've secured a couple of new programs in China that we've not started shipping against yet. We'll start shipping against those, the programs in the third and fourth quarter. And I think Bill mentioned that we anticipate our international operations to start rebounding in the third and fourth quarter to provide better financial results. So that lead us to that comment. Christopher McGinnis - Sidoti & Company, LLC: And then just lastly on Brazil. What inning are you in, if you -- if I -- if you could put it that way maybe, with the REPREVE rollout or the PVA roll out? I know it's -- seemingly it's becoming more important to roll that out, just the timing of it.

Yes, I think, in Brazil, we've talked to several customers down there about REPREVE and some opportunities around recycling, and I think PVA and REPREVE is in the early stages in Brazil. Brazil market is very commodity-oriented. We're really in the very beginning stages of introducing their mix enrichment strategy there as far as REPREVE and SORBTEK and some other higher value products. So that is an initiative that we keep referring to that we're aggressively pursuing there with different customers, getting involved in different brands and retailers in Brazil. So in your question about what inning we're in, we're probably in the early innings in Brazil. But when you look at sort of the U.S. market CAFTA-NAFTA, and in China, certainly we're in the middle of innings, and we see a lot of growth opportunities continuing with our PVA. We referenced Europe. We just put a full-time salesperson in that's dedicated to call on brands and retailers in Europe. With the steps that we've had with REPREVE, with brands and retails -- retailers here in the U.S., we're starting to cross over now and get recognition in Europe and they're asking questions about how they can incorporate REPREVE in some of their products. So we felt it necessary to have a constant face in that market with dialogue with those brands and retailers. And that's what we've implemented for the last 12 months and we're starting to see some dividends from that investment. Christopher McGinnis - Sidoti & Company, LLC: James, just a couple of questions on the income statement. One on the SG&A is, is that a consistent number, that kind of think of throughout the year? Or is that going to be volatile due to the sales performance?

I think the underlying spend is consistent. I think you highlight a perfect scenario where volume increases internationally overseas as we expect some SG&A will increase. And then as Roger and his group continue to identify the marketing programs to help us in initiatives and X Games and other things to help us with the PVA goals, that some of that SG&A spending will obviously pick up. Most of the spend for that is expected to happen in the second half of our fiscal year. So yes, you can see an increase in the future, but a lot of it will be tied to volume and a lot of it will be tied to those unique initiatives such as the X Games. Christopher McGinnis - Sidoti & Company, LLC: Okay, great. And then just one last question on renewables -- REPREVE renewables. At the Analyst Day, you talked about the bedding opportunity and that you should be able to, by end of the year, hopefully, maybe see some traction or at least understand your traction in that market. The question I have is just, do you have the ability to provide the Miscanthus? Do you have enough -- I guess, enough acreage at this point to supply that already?

Well, we certainly have enough acreage of rye zones that we can harvest and plant to easily meet the needs of any contracts we're anticipating next year. We've not planted any acres for that business yet today, but we would anticipate to plant anywhere from 700 to 82,000 acres in the spring planting season this coming spring and have more than enough rye zones to do that.

Your next question comes from Allen Zwickler with First Manhattan.

2 very quick questions. One is just to CapEx. Obviously, you bought those textile machines, but could you just update if there is such an update on what your CapEx is going to be for the year please?

Yes, sir. Allen, this is James. Yes, I would anticipate that our CapEx for fiscal year '14 will be between $17 million and $18 million. $7 million of the normal CapEx, $7 million being the amounts that we talked about in our Analyst Day of the new expansions in PVA programs, and then the additional $3 million is the 9 textile machines that we've referenced earlier in the speech. So $17 million for the year fiscal '14.

Okay. And if one were to look at the following year, I know it's very early, but that's higher than normal, correct? I mean, that's not a number that you would expect to be?

It's slightly higher than normal. Your memory is very good. In the Analyst Day, we talked about fiscal '15 being $7 million of normal ongoing CapEx and then the following $7 million to complete the recycle center capacity expansion in PVA programs that we outlined. So for a total of $14 million for fiscal year 2015.

Okay, so the new expansion is 2 parts. This year and next year, is that correct?

Correct.

Just to be clear.

The projects will straddle the fiscal years. You're exactly right.

Okay. And that's particularly for PVA, correct?

Correct.

PVA, and as Bill referenced, those non-machines are going to increase our capacity some and also provide us flexibility around the product diversification, which also feeds our PVA strategy.

Okay, that's what I was going -- my second question was, do those machines have the capability of running that yarn? Or I mean, I'm not going to -- I've only known polyester business for 50 years, but the machines you're buying, are they capable of running any kind of yarn? Or, I know you're buying them from older company, so -- or it does it matter?

No. I mean, the machines that we purchased, those 9 machines, it adds to our flexibility. They were a little more flexible machines than some of the machines that we have. So we saw that as an opportunity to take those 9 machines, bring them into Yadkinville, we're in the middle of installing them now. And that's going to add to our ability to service that PVA growth and provide that flexibility that our customers are demanding from us.

Okay, and then secondly, on the share repurchase, is that more of just an ongoing that you're buying a certain amount every month? How should one view you buying in shares? Is it some days you're in there, some days you're not? I mean, I'm just not clear as to what the strategy is. And lastly, if you don't mind, on Parkdale, are they just doing better? Or is it just timing?

This is Bill. I'll answer both those questions. But before I do, let me go back to your first question, just to clarify one thing. Even though we're showing $7 million of spending in our 2015 fiscal year, I want to make it clear. Our recycle center capacity expansion will be completed in this fiscal year. What we're seeing is a little bit of payables spillover into the next year, as well as some of our flexibility capital which is going to be spent next fiscal year. But the recycle center, our expansion will be completed late this fiscal year. And we expect to have that running probably in the May timeframe. Going onto share repurchases, I think through the first quarter, we've pretty consistently bought throughout our entire open window every day. And we will probably -- I mean, as we're generating a lot of cash, we will probably continue to do that once our window opens again. Now certainly we're looking for other strategic expansion opportunities to use our capital force, so that could certainly change what we're doing. But right now, I would foresee us buying a small amount every day after our window opens on a pretty consistent basis as we are generating a lot of cash. As far as Parkdale, I think what you're seeing there is a little bit of a pickup in business for them as well as some margin improvement as carton prices have moderated, as well as some of the EAP pick up that they typically have -- not typically, but actually atypically have. It's not something that's consistent. They recognize those revenues as they spend capital. So I think what you saw there was a fairly large chunk of EAP benefit being recognized as they spend some capital in the quarter. But overall, their business is doing quite well.

Your next question comes from Eric Pisauro with Regency Group.

Are you giving any financial guidance for this fiscal year, adjusted EBITDA or otherwise?

Yes. I'm giving guidance for adjusted EBITDA the of mid- to high-50 range.

That's, I guess, fairly similar to last year and the previous year. It's sort of persistent. Is that accurate?

It's a little better than last year.

[Operator Instructions] And we have a question coming from Mike (sic) [Chris] McGinnis, Sidoti & Company. Christopher McGinnis - Sidoti & Company, LLC: It's Chris. Just a quick question, to follow-up on the -- I guess the last question here. With the improvement in the mix, if you think about this year say, mid-50s, what do you think the potential is for the company now in terms of EBITDA range? Is it above 60 once you complete the 25% mix, and can you maybe talk a bit about that?

Yes, I can do that. I think what you're seeing is certainly, we have very good results domestically, probably better than we have for the last 4, 5 years because our margins have gotten better as we've improved our mix, as we've gotten better at strategically pricing across all of our product lines. What we're seeing today is a little bit of weakness internationally, which we expect to correct itself. So, I think the expectation, at least in my mind is, as we continue our mix enrichment, as we continue to see recovery, we ought to be at a rate that's somewhat better than the mid- to high-50s the second half of this year. And certainly, if we continue to grow our PVA business, I would have expectations that our EBITDA will continue to get better in succeeding fiscal years.

And at this time, there are no further question. I would like to turn it over to Bill Jasper for closing remarks.

Okay. Well, I want to thank Chris for the lead in to my closing remarks, actually. Honestly, we're very, very encouraged with our results so far and with our future over the next several years. We're encouraged with stability in this region and actually growth in this region. We're encouraged with improvement we're seeing internationally, growth in our PVA business, which is beginning to accelerate, and really, the positive cash and earnings effects we are seeing as a result of our successful deleveraging strategy. So we feel our balance sheet is very, very strong right now, we figure our prospects for growth in PVA and mix enrichment are good. And overall, looking forward to building on momentum we started for this fiscal year. And with that, I thank you, all, for your interest, and have a good day.

Ladies and gentlemen, thank you for joining today's conference. That concludes the conference, you may now disconnect.