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GREENSBORO — The news out of Unifi this week leaves a conflicted impression of whether the financially troubled textile maker has begun to unravel or is headed in a new direction.

On the surface, much of the news since Wednesday doesn't look good for the Greensboro-based yarn maker: a fired CEO; the resignation of six board members; huge financial losses; another plant closing; and 260 people laid off.

"This ain't pretty," said Sam McNeil, managing partner of River Capital Advisors, a Charlotte-based investment bank. "This is not pretty at all."

The Unifi developments began to unfold late Wednesday when the company announced that the board had terminated Brian R. Parke, effective immediately, as chairman, president and chief executive officer.

Reached by phone at his Greensboro home Thursday, Parke declined to comment.

He had been Unifi's president since 1999, CEO since 2000 and chairman since 2004. During that time, the company lost more than $350 million.
Parke agreed to continue to serve as vice chairman of the company's joint venture in China.

In Parke's place, the board appointed Stephen Wener as the company's new chairman and acting CEO. Wener has served as president and CEO since 1990 of Dillon Yarn Corp., which Unifi bought in January.

Unifi said a search for a permanent CEO would begin immediately.
Then came word that six board members — Parke, R. Wiley Bourne, Charles R. Carter, Sue W. Cole, J.B. Davis and Donald F. Orr — had resigned.

Unifi now has a five-member board dominated by new leadership; Wener, Anthony Loo and William M. Sams have all been appointed since April of this year.

The resulting board could be a smaller and perhaps more focused group.
Loo, for example, is an American who lives in China, where Unifi has a major joint venture.

Remaining board members include William J. Armfield IV, who has extensive board and textile experience and Kenneth G. Langone, a co-founder of The Home Depot and a board member since 1969.

The company gave no explanation for the resignations Wednesday or Thursday during a conference call to discuss its financial results.

But William M. Lowe Jr., Unifi's chief operating officer and chief financial officer, promised some answers in the next few days; the company has to lay out the situation in documents for the federal government.

"In that disclosure, there will be additional explanation," Lowe said. "I am not able to do that today."

Former board members Davis and Orr did not return phone calls seeking comment. Cole declined to comment. Efforts to locate Bourne and Carter were unsuccessful.

"From a distance ... I would say there are some real concerns about the running of the company," Peter Tourtellot, managing director of Anderson Bauman Tourtellot Voss & Co., a Greensboro-based turnaround management company, said of the resignations. "Five directors resigned en masse. That is pretty serious."

On Thursday, Unifi's financial situation got even more serious.
The company announced that it lost $72.3 million in the fourth quarter and $113.1 million for the fiscal year which ended June 24 .

"There is no doubt that this fiscal year has been a tough one," Lowe told analysts. "The company remains committed to being profitable and successful."

The losses announced Thursday far outpace any others since the company's financial slide began in 2001. Unifi has not turned a profit since 2000, when it made $38 million.

Also Thursday, Unifi announced the closing of its Kinston plant, which employs 260 people. The good news there is that the move will save the company $12 million a year.

But overall, the news of the past two days left observers troubled.

"Firing a CEO with what appears little or no advance warning is a really serious situation," McNeil said. "I think it causes unrest among investors, among employees, among customers, among suppliers. Then you couple that with the financial results. You put all that together and that is going to cause a lot of concern."

Unifi did get one piece of good news Thursday. The company's stock climbed 12 cents a share, or 5.9 percent, closing at $2.13.

Contact Donald W. Patterson at 373-7027 or donpatterson@news-record.com

Contact Richard M. Barron at 373-7371 or dbarron@news-record.com