S&P downgrades Unifi

Standard & Poor's said it lowered its corporate credit and senior unsecured debt ratings on Unifi Inc. to B- from B+. In addition, the ratings on Unifi have been removed from CreditWatch where they were placed April 14.

S&P said the downgrade follows the company's very weak operating results, which reflect the continued difficult operating environment. Excess industry capacity has led to negative unit volume and pricing trends.

The outlook is negative.

Financial measures for the 12 months ended March 28 weakened significantly. EBITDA to interest coverage declined to 2.8x from 4.7x the previous year, while the EBITDA margin declined to 7.2% from almost 12% a year ago. S&P said it believes Unifi will be challenged to maintain sales levels given the current industry conditions.

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