Unifi(UFI) - 2025 Q1 - Quarterly Report

Sales Performance - Consolidated net sales increased by $8,528K (6.1$44,742K) of consolidated net sales in the current period, down from 31% ($42,461K) in the prior period[76] - Sales volumes increased by 7.7$86,283, driven by higher sales volumes but offset by a lower-priced sales mix[83] - Brazil Segment net sales grew by 14.7% to $34,310, driven by higher average selling prices and increased sales volumes[85][86] - Asia Segment net sales decreased by 2.1$26,779, impacted by changes in sales mix despite higher sales volumes and favorable currency effects[88] Profitability - Gross profit improved to $9,458K from a gross loss of$(575)K in the prior period, primarily due to increased sales volumes, cost-saving initiatives, and higher conversion margins[77] - Net loss decreased by 42.5% to $(7,632)K in the current period from$(13,270)K in the prior period, with a significant improvement in operating loss from $(12,029)K to$(3,216)K[71] - EBITDA improved to $3,299K in the current period from$(4,841)K in the prior period, reflecting better operational performance[72] - The Americas Segment gross loss improved by 81.3%, from $7,380 to$1,378, due to better variable cost management[83] - Brazil Segment Profit surged by 188.6% to $8,678, primarily due to higher conversion margins and increased sales volumes[85][87] - Asia Segment Profit declined by 37.1$2,916, mainly due to a lower gross margin rate from changes in sales mix[88][89] Financial Position and Liquidity - Cash used by operations for the current three-month period was $12,834, and availability under the ABL Revolver was$38,645 as of September 29, 2024[91] - UNIFI's total debt obligations as of September 29, 2024, were $131,691, with$119,324 in long-term debt and $12,153 in the current portion of long-term debt[100] - Net Debt increased to$117,988 as of September 29, 2024, from $103,494 on June 30, 2024, primarily due to increased inventories and capital expenditures[100] - Adjusted Working Capital increased by$15,305 to $175,985 as of September 29, 2024, driven by an increase in inventories[101] - UNIFI's cash and cash equivalents totaled$13,703 as of September 29, 2024, with $13,224 held by foreign subsidiaries[93] - UNIFI entered into a new$25,000 revolving credit facility (2024 Facility) with Wells Fargo Bank, National Association, bearing interest at SOFR plus 0.90%[97] - UNIFI's liquidity position as of September 29, 2024, was $52,348, with$39,124 from domestic operations and $13,224 from foreign operations[93] - UNIFI's sensitivity analysis indicates that a 50-basis point interest rate increase would result in an additional annual interest expense of approximately$700[112] - Foreign subsidiaries held 91.3% of UNIFI's total cash and cash equivalents outside the U.S., with 12,514 denominated in various foreign currencies[114] Expenses and Costs - SG&A expenses remained stable with no significant changes from the prior period[78] - Foreign currency transaction losses were 489 in the current period, compared to gains of $33 in the prior period[79] - Net interest expense increased due to lower global cash balances and reduced interest income[79] - Effective tax rate decreased to -39.9$2,018, primarily for machinery and equipment, expected to benefit future profitability[104] Exchange Rates - Weighted average exchange rates for BRL to USD were 5.55 in the current period compared to 4.89 in the prior period, and RMB to USD were 7.17 compared to 7.25[58]