Financial Data and Key Metrics Changes - Consolidated net sales for Q4 2025 were $138.5 million, down 12% year-over-year due to trade uncertainties and reduced sales volumes [10][80] - Gross profit was negatively impacted by softer sales and transition costs, totaling approximately $10.6 million during the period [25][80] - The Americas segment saw a 6.6% decline in net sales compared to the prior year, primarily due to lower sales volumes and productivity shortfalls [80] - The Asia segment experienced a 28% decline in net sales and a 340 basis points decrease in gross margin year-over-year [80] Business Line Data and Key Metrics Changes - The Reprieve fiber represented 30% of sales in Q4, down four percentage points from the previous year due to trade policy uncertainty [18][73] - The Brazil segment maintained stable demand and strong volumes but faced margin headwinds from unfavorable pricing dynamics and foreign currency translation impacts [71][80] - Transition costs in the Americas segment were attributed to the consolidation of U.S. yarn manufacturing operations [80] Market Data and Key Metrics Changes - In the Americas, many brands paused production growth in Central America due to tariff uncertainties, impacting order patterns [12][66] - In Asia, brands are reassessing their supply chains in light of tariff negotiations, particularly affecting India and China [13][67] - Brazil's sales are insulated from recent tariffs, but the market faces challenges from dumping activities and foreign exchange volatility [14][68] Company Strategy and Development Direction - The company has ceased operations at its Madison, North Carolina facility, which was a significant cause of profit misses, and has sold the facility for $45 million [4][27] - The transition to the Yatkinville facility has increased production capability by 40%, although it has caused some inefficiencies during the transition [5][59] - The company is focusing on sustainability and circularity innovations, such as the Reprieve Take Back and Thermal Insulation products, which are expected to drive future growth [6][74] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence that the impacts of tariffs are likely to be neutral to slightly positive in the long term as order patterns improve [6][11] - There is a belief in pent-up demand in the market, particularly as trade policies become clearer, which is expected to benefit the company in the near future [12][66] - The company anticipates improved performance in fiscal 2026, with cost savings and demand normalization expected to drive growth [30][31] Other Important Information - The sale of the Madison facility is expected to generate over $20 million in annual operating cost savings once transition efforts are complete [15][84] - The company is forecasting under $12 million in capital expenditures for fiscal 2026, focusing on critical investments [27][83] - Management highlighted ongoing efforts to optimize operations and drive greater efficiency across the business [68][79] Q&A Session Summary Question: Impact of transitory demand disruptions on sales - Management indicated a 20% disruption in Asia due to trade uncertainties, expecting demand to grow in Q1 and Q2 as tariff clarity improves [38][39] Question: Timing of pent-up demand orders - Increased orders are already being seen in August, with expectations for further growth in September [42] Question: Exciting new product launches - The Fortisyn nylon yarn is particularly promising, with expectations for significant demand in the second half of the fiscal year [43][44] Question: Competitive positioning improvements - Most improvements are seen in the Americas due to plant consolidation, with Brazil also benefiting from increased volumes [46][47] Question: Update on Beyond Apparel initiative - The Beyond Apparel initiative is focused on military, packaging, and automotive markets, with expectations for substantial revenue increases in the second half of the fiscal year [49][51]

Financial Performance - Q4 Fiscal 2025 - Consolidated revenue decreased to $138.5 million, a 12.0% decrease compared to Q4 Fiscal 2024[15] - Adjusted EPS was ($0.56), a 155% decrease compared to the prior year[15] - Adjusted EBITDA was ($4.1) million, a 169% decrease compared to the prior year[15] - REPREVE® Fiber sales accounted for 30% of net sales, a decrease of 400 bps[15] - Gross loss was ($1.1) million, a 110.5% decrease compared to the prior year, with a gross margin of (0.8)%, a decrease of 770 bps[29] Segment Performance - Q4 Fiscal 2025 - Americas net sales decreased by 6.6% to $85.0 million, with a gross loss of ($5.3) million and a gross margin of (6.3)%[33] - Brazil net sales decreased by 10.6% to $28.8 million, with a gross profit of $1.3 million and a gross margin of 4.6%[36] - Asia net sales decreased by 27.7% to $24.7 million, with a gross profit of $2.9 million and a gross margin of 11.7%[40] Capital Structure and Outlook - The company expects Q1 FY26 net sales and Adjusted EBITDA to improve sequentially from Q4 FY25[48] - Recent asset sale reduced debt principal by $43 million and is expected to drive future annual savings of $3 million for interest and $20 million for manufacturing costs[44]

Core Viewpoint - Unifi reported a quarterly loss of $0.56 per share, which was better than the Zacks Consensus Estimate of a loss of $0.80, representing an earnings surprise of +30.00% [1] Financial Performance - Unifi's revenues for the quarter ended June 2025 were $138.54 million, missing the Zacks Consensus Estimate by 3.46%, and down from $157.45 million year-over-year [2] - Over the last four quarters, Unifi has surpassed consensus EPS estimates two times and topped consensus revenue estimates two times [2] Stock Performance - Unifi shares have declined approximately 28.2% since the beginning of the year, contrasting with the S&P 500's gain of 9% [3] - The current Zacks Rank for Unifi is 4 (Sell), indicating expected underperformance in the near future [6] Earnings Outlook - The current consensus EPS estimate for the upcoming quarter is -$0.57 on revenues of $147.41 million, and -$0.11 on revenues of $636.18 million for the current fiscal year [7] - The trend of estimate revisions for Unifi was unfavorable prior to the earnings release, which may impact future stock movements [5][6] Industry Context - The Textile - Products industry, to which Unifi belongs, is currently ranked in the bottom 6% of over 250 Zacks industries, suggesting a challenging environment [8]

[Company Announcement & Business Highlights](index=1&type=section&id=Company%20Announcement%20%26%20Business%20Highlights) Unifi's Q4 FY2025 results were below expectations due to weak customer order patterns, but the company made progress through asset sales and new product launches [Fourth Quarter Fiscal 2025 Overview](index=1&type=section&id=Fourth%20Quarter%20Fiscal%202025%20Overview) Unifi's Q4 FY2025 performance was below expectations, impacted by tariffs and trade uncertainty, despite strategic asset sales and new product introduction [Key Financial and Operational Highlights](index=1&type=section&id=Key%20Financial%20and%20Operational%20Highlights) Q4 FY2025 saw a **12.0%** net sales decrease to **$138.5 million**, a **$15.5 million** net profit driven by asset sale gains, and the launch of Fortisyn™ Key Financial Data for Q4 FY2025 | Metric | Q4 FY2025 (Million USD) | Q4 FY2024 (Million USD) | Change (%) | | :--- | :--- | :--- | :--- | | Net Sales | 138.5 | 157.5 | -12.0% | | REPREVE® Product Sales | 42.1 | 53.6 | -21.4% | | REPREVE® as % of Net Sales | 30% | 34% | -4.0pp | | Gross Profit (Loss) | (1.1) | 10.8 | -110.2% | | Gross Margin | (0.8)% | 6.9% | -7.7pp | | Net Income (Loss) | 15.5 | (4.0) | 487.5% | | Diluted EPS | 0.82 | (0.22) | 472.7% | | Adjusted Net Loss | 10.6 | 4.0 | 165.0% | | Adjusted EBITDA | (4.1) | 5.9 | -169.5% | - Company completed the sale of its Madison (North Carolina) manufacturing facility, receiving **$45 million**, with **$25 million** used to reduce the term loan and **$18.3 million** for revolving loan reduction[3](index=3&type=chunk) - Company launched Fortisyn™, an abrasion-resistant yarn specifically designed for military and tactical gear[3](index=3&type=chunk) [Q4 FY2025 vs. Q4 FY2024 Performance Comparison](index=2&type=section&id=Q4%20FY2025%20vs.%20Q4%20FY2024%20Performance%20Comparison) Net sales declined due to weaker Asian and Brazilian markets, while operating profit increased significantly due to a manufacturing facility sale - Net sales decreased from **$157.5 million** to **$138.5 million**, primarily due to weaker sales mix and volume in the Asia segment, unfavorable foreign exchange impact in Brazil, and lower volume in the Americas segment[5](index=5&type=chunk) - Gross profit decreased from **$10.8 million** to **($1.1 million)**, with the Americas segment down **$5.3 million** (inflationary pressures and transition costs), Asia segment down **$2.3 million** (volume, sales mix, and pricing), and Brazil segment down **$4.3 million** (unfavorable foreign exchange translation effect)[6](index=6&type=chunk) - Operating profit increased from **($0.8 million)** to **$15.1 million**, primarily driven by the gain on the sale of a manufacturing facility, partially offset by transition costs[7](index=7&type=chunk) [Manufacturing Transition Update](index=2&type=section&id=Manufacturing%20Transition%20Update) Unifi completed the sale of its Madison facility in May 2025, expecting approximately **$20 million** in annual cost savings from manufacturing footprint reduction - Company completed the real estate sale of its Madison (North Carolina) manufacturing facility on May 20, 2025[8](index=8&type=chunk) - Manufacturing transition and restructuring costs are expected to continue into the first quarter of fiscal 2026[8](index=8&type=chunk) - Annual cost savings of approximately **$20 million** are anticipated from the reduced manufacturing footprint, primarily from headcount reductions and operational synergies[8](index=8&type=chunk) [First Quarter Fiscal 2026 Outlook](index=3&type=section&id=First%20Quarter%20Fiscal%202026%20Outlook) Unifi anticipates sequential improvement in Q1 FY2026 net sales and Adjusted EBITDA, driven by Americas segment cost savings, with ongoing restructuring costs - Net sales and Adjusted EBITDA for the first quarter of fiscal 2026 are expected to improve sequentially from the fourth quarter of fiscal 2025, primarily driven by cost savings in the Americas segment[12](index=12&type=chunk) - Restructuring and transition costs of **$1 million** to **$2 million** are expected to continue[12](index=12&type=chunk) - Company believes its proactive decisions have enhanced its competitive position, improved cash generation, and strengthened profitability, which will contribute to better future performance[9](index=9&type=chunk) [Fourth Quarter Fiscal 2025 Earnings Conference Call](index=3&type=section&id=Fourth%20Quarter%20Fiscal%202025%20Earnings%20Conference%20Call) Unifi will host an earnings conference call on August 21, 2025, to discuss Q4 and full-year FY2025 results and other developments - The earnings conference call will be held on August 21, 2025, at 9:00 AM ET[11](index=11&type=chunk) - Webcast access is available via Unifi's website at http://investor.unifi.com[11](index=11&type=chunk) [Company and Product Information](index=4&type=section&id=Company%20and%20Product%20Information) This section provides an overview of UNIFI, Inc. as a global leader in sustainable synthetic textiles and its flagship REPREVE® brand [About UNIFI](index=4&type=section&id=About%20UNIFI) UNIFI is a global leader in fiber science and sustainable synthetic textiles, transforming waste into products with operations across multiple countries - UNIFI is a global leader in fiber science and sustainable synthetic textiles[13](index=13&type=chunk) - The company utilizes proprietary recycling technologies to transform industrial and post-consumer waste into sustainable products[13](index=13&type=chunk) - UNIFI has direct operations in the U.S., Colombia, El Salvador, and Brazil, with sales offices worldwide[13](index=13&type=chunk) [About REPREVE®](index=4&type=section&id=About%20REPREVE%C2%AE) REPREVE® is a leading brand of recycled performance fibers, converting over **40 billion** plastic bottles into fibers with advanced traceability - REPREVE® is the world's leading brand of recycled performance fibers and resins[14](index=14&type=chunk) - Utilizing proprietary recycling technologies, REPREVE® uses various waste sources including single-use plastic bottles, ocean plastic, textile waste, and recycled yarn[14](index=14&type=chunk) - REPREVE® has transformed over **40 billion** plastic bottles into recycled fibers, with traceability enabled by FiberPrint® technology and U-Trust® certification[14](index=14&type=chunk) [Consolidated Financial Statements](index=5&type=section&id=Consolidated%20Financial%20Statements) This section presents Unifi's unaudited condensed consolidated statements of operations, balance sheets, and cash flows [CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS](index=5&type=section&id=CONDENSED%20CONSOLIDATED%20STATEMENTS%20OF%20OPERATIONS) This section provides Unifi's unaudited condensed consolidated statements of operations for the three months and fiscal years ended June 29, 2025, and June 30, 2024 Condensed Consolidated Statements of Operations (Unaudited, in thousands of USD, except per share amounts) | Metric | June 29, 2025 (Three Months) | June 30, 2024 (Three Months) | June 29, 2025 (Fiscal Year) | June 30, 2024 (Fiscal Year) | | :--- | :--- | :--- | :--- | :--- | | Net Sales | $138,535 | $157,452 | $571,344 | $582,209 | | Cost of Sales | 139,664 | 146,661 | 562,926 | 565,593 | | Gross Profit (Loss) | (1,129) | 10,791 | 8,418 | 16,616 | | Selling, General and Administrative Expenses | 11,947 | 11,243 | 49,005 | 46,632 | | Operating Profit (Loss) | 15,120 | (823) | (9,520) | (37,421) | | Net Income (Loss) | $15,470 | $(3,984) | $(20,348) | $(47,395) | | Diluted Earnings Per Share | $0.82 | $(0.22) | $(1.11) | $(2.61) | [CONDENSED CONSOLIDATED BALANCE SHEETS](index=6&type=section&id=CONDENSED%20CONSOLIDATED%20BALANCE%20SHEETS) This section presents Unifi's unaudited condensed consolidated balance sheets, detailing assets, liabilities, and equity as of June 29, 2025, and June 30, 2024 Condensed Consolidated Balance Sheets (Unaudited, in thousands of USD) | Metric | June 29, 2025 | June 30, 2024 | | :--- | :--- | :--- | | **Assets** | | | | Cash and Cash Equivalents | $22,664 | $26,805 | | Total Current Assets | 235,627 | 248,933 | | Property, Plant and Equipment, Net | 172,923 | 193,723 | | Total Assets | $426,868 | $469,244 | | **Liabilities and Stockholders' Equity** | | | | Total Current Liabilities | $70,943 | $76,566 | | Long-Term Debt | 95,727 | 117,793 | | Total Liabilities | 177,397 | 205,859 | | Total Stockholders' Equity | 249,471 | 263,385 | | Total Liabilities and Stockholders' Equity | $426,868 | $469,244 | [CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS](index=7&type=section&id=CONDENSED%20CONSOLIDATED%20STATEMENTS%20OF%20CASH%20FLOWS) This section provides Unifi's unaudited condensed consolidated statements of cash flows for the fiscal years ended June 29, 2025, and June 30, 2024 Condensed Consolidated Statements of Cash Flows (Unaudited, in thousands of USD) | Metric | June 29, 2025 (Fiscal Year) | June 30, 2024 (Fiscal Year) | | :--- | :--- | :--- | | Cash and Cash Equivalents at Beginning of Year | $26,805 | $46,960 | | Net Cash Provided by (Used in) Operating Activities | (21,311) | 2,092 | | Net Cash Provided by (Used in) Investing Activities | 41,065 | (10,670) | | Net Cash Provided by (Used in) Financing Activities | (24,421) | (10,607) | | Effect of Exchange Rate Changes | 526 | (970) | | Net Decrease in Cash and Cash Equivalents | (4,141) | (20,155) | | Cash and Cash Equivalents at End of Year | $22,664 | $26,805 | [Business Segment Information](index=8&type=section&id=Business%20Segment%20Information) This section details Unifi's net sales and gross profit (loss) across its Americas, Brazil, and Asia reporting segments [Business Segment Information](index=8&type=section&id=Business%20Segment%20Information) This section provides detailed net sales and gross profit (loss) for Unifi's Americas, Brazil, and Asia segments for the three months and fiscal years presented Net Sales by Business Segment (Unaudited, in thousands of USD) | Segment | June 29, 2025 (Three Months) | June 30, 2024 (Three Months) | June 29, 2025 (Fiscal Year) | June 30, 2024 (Fiscal Year) | | :--- | :--- | :--- | :--- | :--- | | Americas | $85,009 | $91,004 | $347,931 | $344,256 | | Brazil | 28,810 | 32,240 | 118,726 | 117,783 | | Asia | 24,716 | 34,208 | 104,687 | 120,170 | | **Consolidated Net Sales** | **$138,535** | **$157,452** | **$571,344** | **$582,209** | Gross Profit (Loss) by Business Segment (Unaudited, in thousands of USD) | Segment | June 29, 2025 (Three Months) | June 30, 2024 (Three Months) | June 29, 2025 (Fiscal Year) | June 30, 2024 (Fiscal Year) | | :--- | :--- | :--- | :--- | :--- | | Americas | $(5,342) | $2 | $(20,217) | $(17,630) | | Brazil | 1,316 | 5,612 | 16,027 | 14,755 | | Asia | 2,897 | 5,177 | 12,608 | 19,491 | | **Consolidated Gross Profit (Loss)** | **$(1,129)** | **$10,791** | **$8,418** | **$16,616** | [Non-GAAP Financial Measures](index=8&type=section&id=Non-GAAP%20Financial%20Measures) This section reconciles Unifi's GAAP financial metrics to non-GAAP adjusted measures and explains their definitions and limitations [Reconciliations of Reported Results to Adjusted Results](index=8&type=section&id=Reconciliations%20of%20Reported%20Results%20to%20Adjusted%20Results) This section provides detailed reconciliations of Unifi's GAAP financial metrics to non-GAAP adjusted measures, including EBITDA, net loss, and net debt [EBITDA and Adjusted EBITDA](index=8&type=section&id=EBITDA%20and%20Adjusted%20EBITDA) This section reconciles GAAP net income (loss) to EBITDA and Adjusted EBITDA, detailing adjustments for transition costs and asset sale gains Reconciliation of EBITDA and Adjusted EBITDA (Unaudited, in thousands of USD) | Metric | June 29, 2025 (Three Months) | June 30, 2024 (Three Months) | June 29, 2025 (Fiscal Year) | June 30, 2024 (Fiscal Year) | | :--- | :--- | :--- | :--- | :--- | | Net Income (Loss) | $15,470 | $(3,984) | $(20,348) | $(47,395) | | Interest Expense, Net | 1,942 | 1,931 | 8,632 | 7,726 | | Income Tax (Benefit) Provision | (2,302) | 1,151 | 1,719 | 1,858 | | Depreciation and Amortization Expense | 6,018 | 6,850 | 25,064 | 27,513 | | **EBITDA** | **21,128** | **5,948** | **15,067** | **(10,298)** | | Transition Costs | 10,585 | — | 13,485 | — | | Gain on Sale of Assets | (35,807) | — | (40,103) | — | | Restructuring Costs | — | — | — | 5,101 | | **Adjusted EBITDA** | **$(4,094)** | **$5,948** | **$(11,551)** | **$(5,197)** | - In FY2025, the company incurred **$10.585 million** (Q4) and **$13.485 million** (FY) in transition costs for integrating yarn manufacturing operations, including facility closure, equipment relocation, inventory write-downs, excess fixed manufacturing overhead, and employee severance/retention costs[26](index=26&type=chunk)[30](index=30&type=chunk) - In Q4 FY2025, the company recorded a **$35.807 million** gain from the sale of its Madison (North Carolina) manufacturing facility, totaling **$40.103 million** in asset sale gains for the fiscal year[26](index=26&type=chunk)[33](index=33&type=chunk) [Adjusted Net Loss and Adjusted EPS](index=9&type=section&id=Adjusted%20Net%20Loss%20and%20Adjusted%20EPS) This section reconciles GAAP net income (loss) and diluted EPS to adjusted net loss and adjusted EPS, including adjustments for specific items Reconciliation of Adjusted Net Loss and Adjusted EPS (Unaudited, in thousands of USD, except per share amounts) | Metric | June 29, 2025 (Three Months) | June 30, 2024 (Three Months) | June 29, 2025 (Fiscal Year) | June 30, 2024 (Fiscal Year) | | :--- | :--- | :--- | :--- | :--- | | GAAP Net Income (Loss) | $15,470 | $(3,984) | $(20,348) | $(47,395) | | Transition Costs | 10,585 | — | 13,485 | — | | Gain on Sale of Assets | (35,807) | — | (40,103) | — | | Income Tax Recovery | (893) | — | (893) | — | | Restructuring Costs | — | — | — | 5,101 | | **Adjusted Net Loss** | **$(10,645)** | **$(3,984)** | **$(47,859)** | **$(42,294)** | | GAAP Diluted EPS | $0.82 | $(0.22) | $(1.11) | $(2.61) | | Adjusted EPS | $(0.56) | $(0.22) | $(2.61) | $(2.33) | - In FY2025, the company recorded an income tax recovery following a favorable preliminary court injunction regarding ICMS deductibility in Brazil federal income tax filings[33](index=33&type=chunk) [Net Debt](index=9&type=section&id=Net%20Debt) This section provides a reconciliation of net debt, showing principal debt reduced by cash and cash equivalents as of the reporting dates Reconciliation of Net Debt (Unaudited, in thousands of USD) | Metric | June 29, 2025 | June 30, 2024 | | :--- | :--- | :--- | | Long-Term Debt | $95,727 | $117,793 | | Current Portion of Long-Term Debt | 12,159 | 12,277 | | Unamortized Debt Issuance Costs | 122 | 229 | | **Principal Debt** | **108,008** | **130,299** | | Less: Cash and Cash Equivalents | 22,664 | 26,805 | | **Net Debt** | **$85,344** | **$103,494** | - As of June 29, 2025, and June 30, 2024, Unifi's foreign operations held almost all consolidated cash and cash equivalents[32](index=32&type=chunk) [Explanation of Non-GAAP Financial Measures](index=10&type=section&id=Explanation%20of%20Non-GAAP%20Financial%20Measures) This section defines Unifi's non-GAAP financial measures, explains management's rationale for their use, and highlights their inherent limitations - Non-GAAP financial measures include EBITDA, Adjusted EBITDA, Adjusted Net Income (Loss), Adjusted EPS, and Net Debt[34](index=34&type=chunk) - Management uses these non-GAAP metrics to better reflect the company's underlying operations and performance, and as tools for comparing operating performance, planning, valuation, and assessing debt service capacity[36](index=36&type=chunk)[38](index=38&type=chunk)[39](index=39&type=chunk)[40](index=40&type=chunk) - Non-GAAP financial measures are not determined under GAAP, should not be considered substitutes for GAAP performance measures, have limitations, and investors should primarily rely on GAAP results as supplementary information[35](index=35&type=chunk)[41](index=41&type=chunk)[42](index=42&type=chunk) [Forward-Looking Statements](index=11&type=section&id=Forward-Looking%20Statements) This section contains cautionary statements regarding forward-looking information, outlining risks and uncertainties that could impact actual financial results [Cautionary Statement on Forward-Looking Statements](index=11&type=section&id=Cautionary%20Statement%20on%20Forward-Looking%20Statements) This section warns that forward-looking statements involve risks and uncertainties that may cause actual results to differ materially from expectations - Forward-looking statements involve risks and uncertainties that could cause actual results, performance, or financial condition to differ materially from expectations[44](index=44&type=chunk) - Factors that could cause differences include competition in the textile industry, changes in the trade regulatory environment, raw material supply and pricing, macroeconomic and industry conditions, changes in consumer spending, natural disasters, operational disruptions, the success of strategic business initiatives, financial market volatility, currency and interest rate fluctuations, production cost fluctuations, intellectual property protection, employee relations, and tax law impacts[45](index=45&type=chunk) - The company undertakes no obligation to update any forward-looking statements unless required by federal securities laws[46](index=46&type=chunk)

PART I—FINANCIAL INFORMATION [Financial Statements](index=4&type=section&id=Item%201.%20Financial%20Statements) Unifi reported a net loss of $35.8 million on $432.8 million net sales for the nine months ended March 30, 2025, reflecting asset decrease and liability increase [Condensed Consolidated Balance Sheets](index=4&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) As of March 30, 2025, total assets decreased to $446.5 million, total liabilities increased to $218.2 million, and shareholders' equity declined to $228.4 million Condensed Consolidated Balance Sheet Highlights (in thousands) | Account | March 30, 2025 | June 30, 2024 | | :--- | :--- | :--- | | **Total current assets** | $245,530 | $248,933 | | **Total assets** | **$446,540** | **$469,244** | | **Total current liabilities** | $78,605 | $76,566 | | **Long-term debt** | $127,894 | $117,793 | | **Total liabilities** | **$218,154** | **$205,859** | | **Total shareholders' equity** | **$228,386** | **$263,385** | [Condensed Consolidated Statements of Operations and Comprehensive Loss](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations%20and%20Comprehensive%20Loss) Q3 FY25 net sales decreased to $146.6 million with a $0.4 million gross loss and $16.8 million net loss, while nine-month net sales increased to $432.8 million with a narrowed $35.8 million net loss Key Operational Results (in thousands, except per share amounts) | Metric | Q3 FY2025 | Q3 FY2024 | Nine Months FY2025 | Nine Months FY2024 | | :--- | :--- | :--- | :--- | :--- | | **Net sales** | $146,557 | $148,996 | $432,809 | $424,757 | | **Gross (loss) profit** | $(445) | $4,764 | $9,547 | $5,825 | | **Operating loss** | $(13,860) | $(6,926) | $(24,640) | $(36,598) | | **Net loss** | $(16,794) | $(10,295) | $(35,818) | $(43,411) | | **Diluted net loss per share** | $(0.92) | $(0.57) | $(1.96) | $(2.40) | [Condensed Consolidated Statements of Cash Flows](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Net cash used in operations was $20.0 million for the nine months ended March 30, 2025, with investing activities providing $0.2 million and financing activities providing $9.3 million, leading to a $10.6 million cash decrease Cash Flow Summary (in thousands) | Activity | Nine Months Ended March 30, 2025 | Nine Months Ended March 31, 2024 | | :--- | :--- | :--- | | **Net cash (used) provided by operating activities** | $(19,994) | $1,160 | | **Net cash provided (used) by investing activities** | $179 | $(8,076) | | **Net cash provided (used) by financing activities** | $9,275 | $(12,236) | | **Net decrease in cash and cash equivalents** | $(10,550) | $(19,298) | [Notes to Condensed Consolidated Financial Statements](index=8&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) Notes detail accounting policies, REPREVE® Fiber sales, increased debt, segment performance, and the Madison facility closure with associated costs and a $53.2 million sale agreement REPREVE® Fiber Net Sales (in thousands) | Period | REPREVE® Fiber Sales | % of Total Net Sales | | :--- | :--- | :--- | | **Three Months Ended March 30, 2025** | $44,699 | 30.5% | | **Three Months Ended March 31, 2024** | $46,754 | 31.4% | | **Nine Months Ended March 30, 2025** | $132,713 | 30.7% | | **Nine Months Ended March 31, 2024** | $134,940 | 31.8% | - On October 25, 2024, UNIFI entered into a new **$25,000** revolving credit facility, collateralized by personal assets of board member Kenneth G. Langone. In January 2025, UNIFI borrowed **$22,000** against this facility[46](index=46&type=chunk)[47](index=47&type=chunk) - On February 3, 2025, UNIFI announced the pending closure of its Madison, North Carolina facility. This resulted in **$1.32 million** of restructuring costs in Q3 FY25. The company estimates an additional **$6 to $8 million** in related costs[77](index=77&type=chunk)[78](index=78&type=chunk) - Subsequent to the quarter-end, on April 10, 2025, UNIFI entered an agreement to sell the Madison, NC facility and related equipment for a cash price of **$53,200**, with proceeds intended to repay debt[79](index=79&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=18&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses performance in a challenging textile market, noting Q3 FY25 sales decrease and Adjusted EBITDA loss, while nine-month sales rose with improved Adjusted EBITDA, supported by strategic initiatives and liquidity management - The company faces adverse impacts from a challenging environment for textile production and demand, including inflation, elevated interest rates, and volatility in trade and regulatory matters[87](index=87&type=chunk) - Strategic initiatives include growing market share, expanding REPREVE® products into non-apparel markets, commercializing innovative solutions, and increasing brand awareness[86](index=86&type=chunk) [Results of Operations - Three Months Ended March 30, 2025](index=20&type=section&id=Results%20of%20Operations%20-%20Three%20Months%20Ended%20March%2030%2C%202025) Q3 FY25 consolidated net sales decreased 1.6% to $146.6 million, resulting in a $0.4 million gross loss and a widened $16.8 million net loss, with Adjusted EBITDA at a $4.9 million loss Reconciliation of Net Loss to Adjusted EBITDA (in thousands) | Description | Q3 FY2025 | Q3 FY2024 | | :--- | :--- | :--- | | **Net loss** | **$(16,794)** | **$(10,295)** | | Interest expense, net | $2,219 | $1,975 | | Provision for income taxes | $499 | $790 | | Depreciation and amortization expense | $6,259 | $6,753 | | **EBITDA** | **$(7,817)** | **$(777)** | | Transition costs | $2,900 | — | | **Adjusted EBITDA** | **$(4,917)** | **$(777)** | - Gross profit decreased by **$5.2 million**, primarily due to lower conversion margins in the Americas, softer sales in Asia, and **$1.58 million** in transition costs related to the consolidation of yarn manufacturing operations[106](index=106&type=chunk) - The company incurred **$1.32 million** in restructuring costs related to the closure of its Madison, North Carolina facility[109](index=109&type=chunk) [Results of Operations - Nine Months Ended March 30, 2025](index=25&type=section&id=Results%20of%20Operations%20-%20Nine%20Months%20Ended%20March%2030%2C%202025) Nine-month net sales increased 1.9% to $432.8 million, gross profit grew to $9.5 million, and net loss narrowed to $35.8 million, with Adjusted EBITDA improving to a $7.5 million loss Reconciliation of Net Loss to Adjusted EBITDA (in thousands) | Description | Nine Months FY2025 | Nine Months FY2024 | | :--- | :--- | :--- | | **Net loss** | **$(35,818)** | **$(43,411)** | | Interest expense, net | $6,690 | $5,795 | | Provision for income taxes | $4,021 | $707 | | Depreciation and amortization expense | $19,046 | $20,663 | | **EBITDA** | **$(6,061)** | **$(16,246)** | | Transition costs | $2,900 | — | | Gain on sale of assets | $(4,296) | — | | Restructuring costs | — | $5,101 | | **Adjusted EBITDA** | **$(7,457)** | **$(11,145)** | - Gross profit increased due to higher sales volumes, cost-saving initiatives, and improved productivity, though it was unfavorably impacted by weak fixed cost absorption in the Americas segment[138](index=138&type=chunk) - A gain of **$4.3 million** was recorded from the sale of a warehouse in Yadkinville, North Carolina[143](index=143&type=chunk) [Segment Overview](index=22&type=section&id=Segment%20Overview) For the nine-month period, Americas segment returned to profitability with $1.1 million profit, Brazil segment profit increased 44.6% to $16.8 million, and Asia segment profit declined 31.8% to $9.8 million Segment (Loss) Profit (in thousands) | Segment | Nine Months FY2025 | Nine Months FY2024 | % Change | | :--- | :--- | :--- | :--- | | **Americas** | $1,120 | $(1,154) | 197.1% | | **Brazil** | $16,755 | $11,590 | 44.6% | | **Asia** | $9,755 | $14,314 | (31.8)% | - The Americas segment's profit improvement was driven by higher margins from better variable cost management, despite weak fixed cost absorption and transition costs from facility consolidation[154](index=154&type=chunk) - The Brazil segment's profit growth was attributable to higher conversion margins and increased sales volumes from market share gains, partially offset by unfavorable foreign currency effects[157](index=157&type=chunk) - The Asia segment's profit decline was caused by a lower gross margin rate associated with a change in the sales mix of REPREVE products[159](index=159&type=chunk) [Liquidity and Capital Resources](index=31&type=section&id=Liquidity%20and%20Capital%20Resources) The company's liquidity is supported by credit facilities, with available liquidity of $44.5 million as of March 30, 2025, and net debt increasing to $123.7 million, partially offset by a new credit facility and a subsequent asset sale agreement Net Debt Reconciliation (in thousands) | Description | March 30, 2025 | June 30, 2024 | | :--- | :--- | :--- | | Debt principal | $140,002 | $130,299 | | Less: cash and cash equivalents | $16,255 | $26,805 | | **Net Debt** | **$123,747** | **$103,494** | - As of March 30, 2025, the company had **$45.1 million** in availability under its ABL Revolver and **$0.6 million** under its 2024 Facility[162](index=162&type=chunk) - Subsequent to quarter-end, UNIFI agreed to sell its Madison, NC facility for **$53.2 million**, with net proceeds to be used for debt repayment[165](index=165&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=35&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) Unifi faces market risks from interest rate fluctuations, foreign currency exchange rates, and raw material costs, with a 50-basis point rate increase potentially raising annual interest expense by $0.7 million - A **50-basis point** increase in interest rates would result in an approximate **$700,000** increase in annual interest expense on the company's **$133.0 million** of ABL Facility borrowings[187](index=187&type=chunk) - As of March 30, 2025, **29.6%** of total consolidated assets were held by subsidiaries outside the U.S. with a functional currency other than the USD, indicating significant foreign currency exposure[188](index=188&type=chunk) [Controls and Procedures](index=35&type=section&id=Item%204.%20Controls%20and%20Procedures) As of March 30, 2025, Unifi's disclosure controls and procedures were deemed effective, with no material changes to internal control over financial reporting during the quarter - Management, including the CEO and CFO, concluded that the company's disclosure controls and procedures were effective as of March 30, 2025[191](index=191&type=chunk) - No changes occurred during the quarter ended March 30, 2025, that have materially affected, or are reasonably likely to materially affect, the company's internal control over financial reporting[192](index=192&type=chunk) PART II—OTHER INFORMATION [Legal Proceedings](index=36&type=section&id=Item%201.%20Legal%20Proceedings) The company is involved in ordinary course legal proceedings, none of which are expected to have a material adverse effect on its financial position, results, or cash flows - The company does not believe that any ongoing legal proceedings would be expected to have a material adverse effect on its results of operations, financial position, or cash flows[194](index=194&type=chunk) [Risk Factors](index=36&type=section&id=Item%201A.%20Risk%20Factors) No material changes to the company's risk factors have occurred since the Annual Report on Form 10-K for the fiscal year ended June 30, 2024 - No material changes in UNIFI's risk factors have occurred since the filing of the 2024 Form 10-K[195](index=195&type=chunk) [Other Information](index=36&type=section&id=Item%205.%20Other%20Information) No directors or officers adopted, modified, or terminated Rule 10b5-1 or non-Rule 10b5-1 trading arrangements during the quarter ended March 30, 2025 - No directors or officers adopted, modified, or terminated a Rule 10b5-1 trading arrangement or a non-Rule 10b5-1 trading arrangement during the third fiscal quarter[196](index=196&type=chunk) [Exhibits](index=37&type=section&id=Item%206.%20Exhibits) This section lists exhibits filed with the Form 10-Q, including credit agreement amendments, CEO and CFO certifications, and XBRL data files

Financial Data and Key Metrics Changes - Consolidated net sales for Q3 2025 were $146.6 million, down 2% year-over-year, primarily due to lower sales volumes in the Asia segment and unfavorable foreign currency impacts [17][25] - Gross margin in the Americas segment declined by 350 basis points, driven by inflationary pressures and transition costs related to the manufacturing footprint reduction [25][26] - The company anticipates significant savings of $20 million from the consolidation of manufacturing activities across North and Central America, expected to fully materialize in calendar 2026 [27][30] Business Line Data and Key Metrics Changes - In the Americas segment, net sales increased by 3% compared to the prior year, driven by sales growth initiatives and improved market conditions [25][26] - The Asia segment experienced a 12% decline in net sales, attributed to macroeconomic pressures and a less favorable sales mix [26][27] - REPREVE represented 31% of sales during the quarter, remaining stable compared to the previous year despite macroeconomic challenges in China [18][19] Market Data and Key Metrics Changes - Demand in North America is improving, particularly in Central America, where over 50% of business has been reprieved, indicating positive future prospects [6][7] - The Brazil segment continues to perform well due to a stable market for textured polyester, despite pricing pressures from imports [17][26] - The company is monitoring the tariff environment closely, with expectations of a potential 10% to 15% revenue decline in Asia if current tariffs remain in place [42][45] Company Strategy and Development Direction - The company is focused on rationalizing assets and improving profitability, including the closure of the Madison facility and the sale of the facility for $53.2 million to enhance the balance sheet [13][14] - Innovation remains a key focus, with traction in military wear and carpet products expected to drive revenue growth in the new fiscal year [9][10] - The company aims to leverage its asset-light model in Asia while exploring opportunities in markets beyond apparel, such as automotive and packaging [50][81] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about returning to growth and solid economics in the new fiscal year, driven by ongoing initiatives and improved capacity utilization [11][14] - The global tariff situation remains fluid, but management believes it could lead to a net neutral to positive impact on the business over the next few years [17][42] - The company expects to generate positive free cash flow and improve investment opportunities as restructuring efforts yield results [30][32] Other Important Information - The company received several accolades for its sustainability efforts, including recognition from Fast Company and Newsweek, highlighting its commitment to innovation and circularity [21][22] - The Madison facility's closure is expected to be completed by mid-June, with no anticipated loss in revenues or disruptions in customer service [14][27] Q&A Session Summary Question: FX impact in Brazil - The foreign exchange headwind for the Brazil segment was approximately $4 million for the quarter and $11 million for the nine months [46] Question: Margins in Beyond Apparel markets - Margins for military wear and carpet products are at least twice as good as the base business [37][39] Question: Impact of de minimis rule exemption - The overall impact of de minimis and tariffs could lead to a downturn in business in Asia by 10% to 15% [42][45] Question: Cost savings from facility consolidation - Some cost savings are expected to materialize in the first quarter of fiscal 2026, but full run rate savings will not be realized until later in the calendar year [47][48] Question: Profitability disclosure for REPREVE - REPREVE is a material component of the Asia segment, accounting for over 80% of overall Asia segment sales [64][66] Question: Future asset sales - Currently, there are no other assets slated for sale, but the company continues to evaluate its balance sheet for additional opportunities [81]

Financial Data and Key Metrics Changes - Consolidated net sales for Q3 2025 were $146.6 million, down 2% year-over-year, primarily due to lower sales volumes in the Asia segment and unfavorable foreign currency impacts [18][26][48] - Gross margin in the Americas segment declined by 350 basis points, driven by inflationary pressures and transition costs related to the manufacturing footprint reduction [26][27] - The sale of the Madison facility for $53.2 million is expected to significantly improve the balance sheet and reduce outstanding debt [13][28] Business Line Data and Key Metrics Changes - In the Americas segment, net sales increased by 3% compared to the prior year, driven by sales growth initiatives and improved market conditions [18][26] - The Asia segment experienced a 12% decline in net sales, attributed to macroeconomic pressures and a less favorable sales mix [19][27] - REPREVE represented 31% of sales during the quarter, remaining stable compared to the previous year despite macroeconomic challenges in China [19][20] Market Data and Key Metrics Changes - Demand in North America is improving, particularly in Central America, where over 50% of business has been reprieved recently [6][7] - The Brazil segment continues to perform well due to a stable market for textured polyester, despite pricing pressures from imports [18][26] - The tariff situation remains fluid, with potential benefits for the Americas segment if tariffs on China remain in place [15][16] Company Strategy and Development Direction - The company is focused on optimizing its business and improving profitability through asset rationalization and cost savings initiatives [3][14] - Innovation efforts are being emphasized, particularly in military wear and carpet, which are expected to yield better margins than the base business [8][12] - The company aims to leverage its asset-light model in Asia while exploring opportunities in new markets beyond apparel, such as automotive and packaging [51][52] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about returning to growth and solid economics in the new fiscal year, driven by ongoing initiatives and improved capacity utilization [11][30] - The company is closely monitoring the tariff environment and expects it to have a net neutral to positive impact over the next few years [18][32] - Management anticipates significant savings from the consolidation of manufacturing activities, with a projected $20 million reduction in cost of sales [28][31] Other Important Information - The company has received several accolades for its sustainability efforts, including recognition from Fast Company and Newsweek [22] - The Madison facility is set to close in mid-June, with the transition expected to enhance liquidity and margin performance [14][28] Q&A Session Summary Question: FX impact in Brazil - The foreign exchange headwind for the Brazil segment was approximately $4 million for the quarter and $11 million for the nine months [47] Question: Margins in Beyond Apparel - Margins for military wear and carpet are at least twice as good as the base business [37] Question: Impact of de minimis rule exemption - The overall impact of de minimis and tariffs could lead to a downturn in Asia business by 10% to 15% [43][46] Question: Cost savings realization timeline - Some cost savings from facility consolidation are expected to materialize in the first quarter of fiscal 2026, but full run rate savings will not be realized until later in the calendar year [48][49] Question: Profitability disclosure for REPREVE - REPREVE constitutes over 80% of overall Asia segment sales, but detailed profitability metrics will not be disclosed at this time [66][68]

Financial Data and Key Metrics Changes - Consolidated net sales for Q3 2025 were $146.6 million, down 2% year-over-year, primarily due to lower sales volumes in the Asia segment and unfavorable foreign currency impacts [16][24]. - Gross margin in the Americas segment declined by 350 basis points, driven by inflationary pressures and transition costs related to the manufacturing footprint reduction [25]. - The sale of the Madison facility for $53.2 million is expected to significantly improve the balance sheet and reduce outstanding debt [12][27]. Business Line Data and Key Metrics Changes - In the Americas segment, net sales increased by 3% compared to the prior year, driven by the Beyond Apparel initiatives and positive momentum in Central America [24][17]. - The Asia segment experienced a 12% decline in net sales, attributed to macroeconomic pressures and a weaker sales mix [26][18]. - REPREVE represented 31% of sales during the quarter, remaining stable compared to the previous year despite macroeconomic challenges in China [18]. Market Data and Key Metrics Changes - Demand in North America is improving, particularly in Central America, where over 50% of business has been REPREVE [6][7]. - The Brazil segment continues to perform well due to a stable market for textured polyester, despite pricing pressures from imports [17]. - The impact of tariffs remains uncertain, but the company anticipates potential benefits in the Americas segment if tariffs on imports remain in place [14]. Company Strategy and Development Direction - The company is focused on rationalizing assets and improving profitability, including the closure of the Madison facility and consolidation of operations [3][4]. - Innovation efforts are being prioritized, particularly in military wear and carpet, which are expected to yield better margins than the base business [8][10]. - The company aims to leverage its asset-light model in Asia while exploring opportunities in new markets such as automotive and packaging [49][78]. Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about returning to growth and solid economics in the new fiscal year, driven by ongoing initiatives and improved capacity utilization [10][30]. - The company is closely monitoring the tariff situation and believes it could lead to a net neutral to positive impact over the next few years [16][14]. - Management expects to see significant savings from the consolidation of manufacturing activities, with a projected $20 million reduction in cost of sales [27]. Other Important Information - The company has received several accolades for its sustainability efforts, including recognition from Fast Company and Newsweek [21]. - The Madison facility's sale is anticipated to close on May 15, with no significant contingencies expected [56]. Q&A Session Summary Question: What was the FX impact in Brazil? - The FX impact in Brazil was approximately $4 million for the quarter and $11 million for the nine months [44]. Question: What are the margins for the carpet and military markets? - Margins for these markets are at least twice as good as the base business [36]. Question: How will the de minimis rule exemption impact the business? - The overall impact could lead to a downturn in the Asia business by 10% to 15% [40][43]. Question: When will cost savings from facility consolidation be realized? - Some cost savings are expected in the first quarter of fiscal 2026, but full realization will take longer [45]. Question: What percentage of Asia revenue comes from China? - The company does not disclose the specific percentage of Asia revenue from China [72]. Question: Will there be additional disclosures on the profitability of REPREVE? - Current reporting structure will remain for the foreseeable future, but the Asia segment's margin is influenced significantly by REPREVE [62][63].

Core Viewpoint - Unifi (UFI) reported a quarterly loss of $0.76 per share, which was better than the Zacks Consensus Estimate of a loss of $0.83, but worse than the loss of $0.57 per share from the previous year, indicating a mixed performance in earnings [1] Financial Performance - The company posted revenues of $146.56 million for the quarter ended March 2025, surpassing the Zacks Consensus Estimate by 1%, but down from $149 million in the same quarter last year [2] - Over the last four quarters, Unifi has surpassed consensus EPS estimates two times and topped consensus revenue estimates three times [2] Stock Performance - Unifi shares have declined approximately 17.1% since the beginning of the year, while the S&P 500 has decreased by 5.5% [3] - The current Zacks Rank for Unifi is 4 (Sell), indicating expectations of underperformance in the near future [6] Earnings Outlook - The current consensus EPS estimate for the upcoming quarter is -$0.56 on revenues of $149.56 million, and for the current fiscal year, it is -$2.67 on revenues of $580.92 million [7] - The trend for estimate revisions ahead of the earnings release has been unfavorable, which may impact future stock performance [6] Industry Context - The Textile - Products industry, to which Unifi belongs, is currently ranked in the bottom 5% of over 250 Zacks industries, suggesting a challenging environment for the company [8]

Financial Performance - Q3 Fiscal 2025 - Consolidated revenue was $146.6 million, a decrease of 1.6% compared to Q3 Fiscal 2024[15] - Adjusted EPS was ($0.76), a decrease of 33.5% compared to Q3 Fiscal 2024[15] - Adjusted EBITDA was ($4.9) million, a decrease of 533% compared to Q3 Fiscal 2024[15] - REPREVE Fiber accounted for 31% of sales, consistent with Q3 Fiscal 2024[15] - Gross loss was ($0.4) million, a decrease of 109.3% compared to Q3 Fiscal 2024[34] Segment Performance - Americas net sales increased by 2.6% to $93.5 million, but experienced a gross loss of ($7.0) million[38] - Brazil net sales decreased by 4.9% to $28.1 million, with a gross profit of $3.0 million[41] - Asia net sales decreased by 12.0% to $24.9 million, with a gross profit of $3.5 million[44] Capital Structure and Outlook - The company anticipates reducing debt by $50 million through a pending asset sale[48] - The asset sale is expected to drive future annual savings of $3 million in interest and $20 million in manufacturing costs[48] - The company expects net sales and Adjusted EBITDA to improve sequentially from Q3 2025, driven by recovery in the Americas segment[52]