Unifi(UFI) - 2025 Q4 - Annual Results

Company Announcement & Business Highlights 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 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 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] - Company launched Fortisyn™, an abrasion-resistant yarn specifically designed for military and tactical gear[3] Q4 FY2025 vs. Q4 FY2024 Performance Comparison 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] - 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] - 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] Manufacturing Transition Update 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] - Manufacturing transition and restructuring costs are expected to continue into the first quarter of fiscal 2026[8] - Annual cost savings of approximately $20 million are anticipated from the reduced manufacturing footprint, primarily from headcount reductions and operational synergies[8] First Quarter Fiscal 2026 Outlook 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] - Restructuring and transition costs of $1 million to $2 million are expected to continue[12] - Company believes its proactive decisions have enhanced its competitive position, improved cash generation, and strengthened profitability, which will contribute to better future performance[9] Fourth Quarter Fiscal 2025 Earnings Conference Call 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] - Webcast access is available via Unifi's website at http://investor.unifi.com[11](index=11&type=chunk) Company and Product Information This section provides an overview of UNIFI, Inc. as a global leader in sustainable synthetic textiles and its flagship REPREVE® brand About UNIFI 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] - The company utilizes proprietary recycling technologies to transform industrial and post-consumer waste into sustainable products[13] - UNIFI has direct operations in the U.S., Colombia, El Salvador, and Brazil, with sales offices worldwide[13] About REPREVE® 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] - Utilizing proprietary recycling technologies, REPREVE® uses various waste sources including single-use plastic bottles, ocean plastic, textile waste, and recycled yarn[14] - REPREVE® has transformed over 40 billion plastic bottles into recycled fibers, with traceability enabled by FiberPrint® technology and U-Trust® certification[14] Consolidated Financial Statements This section presents Unifi's unaudited condensed consolidated statements of operations, balance sheets, and cash flows CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS 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 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 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 This section details Unifi's net sales and gross profit (loss) across its Americas, Brazil, and Asia reporting segments Business Segment Information 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 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 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 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][30] - 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][33] Adjusted Net Loss and Adjusted EPS 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] Net Debt 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] Explanation of Non-GAAP Financial Measures 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] - 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][38][39][40] - 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][41][42] Forward-Looking Statements 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 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] - 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] - The company undertakes no obligation to update any forward-looking statements unless required by federal securities laws[46]