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Unifi CEO and President Step Down Suddenly

Unifi, Inc.’s CEO and president have both stepped down, effective immediately.

In an SEC filing Wednesday, the Greensboro, North Carolina-based fiber producer said company chairman and CEO William L. Jasper retired from his position, effective that day. Jasper will remain with Unifi as a board member and will consult for the company for one year following his retirement. He will be paid his current $750,000 base salary in 12 monthly installments for his services but will not receive any bonuses.

On the same day, Unifi President and COO R. Roger Berrier, Jr. also resigned from the company, effective right away. As part of a departing agreement, Berrier will hand over his stock options to be terminated, and in exchange for his cooperation during the transition of his duties, he will receive four quarterly payments from the company totaling $540,000.

Unifi’s board of directors appointed Thomas H. Caudle, Jr., who has been the company’s vice president of manufacturing since October 2006, as president of the company, also effective Wednesday. Caudle has been with the company, serving in various roles, since 1982.

A new CEO has not been named. No chairman was named either, but Unifi’s recently appointed director James D. Mead was named non-executive chairman of the board.

Unifi produces textured and other processed yarns, with key brands including Repreve, a line of eco-friendly yarns made from recycled materials, and Sorbtek, which provides permanent moisture management.

In a transcript of its latest earnings call last week, Jasper painted a fairly positive picture of Unifi for the third quarter of 2015 and through the rest of the year.

“In looking at the apparel segment, demand for the company’s products continues to be driven by the fact that the production of synthetic apparel in North and Central America has increased in each of the last six consecutive years, and we expect this trend to continue into the foreseeable future,” Jasper said, adding, “We are pleased with this quarter’s results, notably our gross margin, which improved 170 basis points. These results highlight the success of our strategy to enrich our product mix and grow our premier value-added offerings to enhance returns. We were particularly excited to see our International Segment benefit from strong market share gains in Brazil and from our growing portfolio in China.”

Net sales for the third quarter were down 6.3% to $161.3 million, owed largely to the real devaluation in Brazil and lower sales pricing associated with raw material costs.

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Gross profit was up slightly to $23.4 million from $22 million the prior year quarter. Net income was down slightly to $9.7 million from $10 million in the same period last year. Total debt was $106.5 million as of March 27, 2016 compared to $94.1 million on June 28, 2015.

“Despite foreign exchange rate pressure, our year-to-date results remain in line with our expectations at the beginning of the year,” Jasper said. “And we are reaffirming our previous outlook that adjusted EBITDA be within the high $60 million range for the 2016 fiscal year.”

Wednesday’s filing did not disclose the reasons for the executive-level changes and Unifi did not release any statements addressing the shifts.