Unifi(UFI) - 2026 Q2 - Quarterly Results

Financial Performance - Net sales for Q2 Fiscal 2026 were $121.4 million, a decrease of 12.6% from $138.9 million in Q2 Fiscal 2025, primarily due to trade and tariff-related uncertainty [3]. - Gross profit increased to $3.6 million with a gross margin of 3.0%, compared to $0.5 million and 0.4% in Q2 Fiscal 2025 [3]. - Net loss for Q2 Fiscal 2026 was $9.7 million, or $0.53 per diluted share, compared to a net loss of $11.4 million, or $0.62 per share, in Q2 Fiscal 2025 [3]. - Adjusted Net Loss for Q2 Fiscal 2026 was $8.9 million, significantly improved from $15.7 million in the prior year period [3]. - Consolidated net sales for the three months ended December 28, 2025, were $121.368 million, a decrease of 12.6% from $138.880 million for the same period in 2024 [20]. - Consolidated gross profit for the three months ended December 28, 2025, was $(399) thousand, compared to $(6,540) thousand for the same period in 2024 [20]. - Net loss for the three months ended December 28, 2025, was $(9,706) thousand, an improvement from $(11,392) thousand for the same period in 2024 [23]. - Adjusted EBITDA for the three months ended December 28, 2025, was $(749) thousand, compared to $(5,839) thousand for the same period in 2024 [23]. Cash Flow and Debt Management - Cash provided by operating activities was $25.3 million in Q2 Fiscal 2026, up from $16.4 million for the six months ended December 28, 2025 [3]. - Debt principal decreased to $105.4 million and Net Debt was $75.2 million as of December 28, 2025, down from $108.0 million and $85.3 million, respectively, at June 29, 2025 [3]. - Net Debt as of December 28, 2025, was $75.213 million, down from $85.344 million as of June 29, 2025 [31]. Cost Management - SG&A expenses decreased by 25% to $9.7 million from $12.9 million in Q2 Fiscal 2025, driven by cost alignment efforts [3]. - The company implemented additional cost savings initiatives in October 2025, focusing on reducing variable manufacturing costs and optimizing commercial execution [7]. - UNIFI recorded employee separation costs of $1,093 thousand in connection with the Fiscal 2026 Profit Improvement Plan [24]. - The company incurred transition costs totaling $1,068 thousand related to the consolidation of its yarn manufacturing operations [30]. Future Outlook - Management expects to generate positive operating cash flow in the upcoming quarters as market conditions normalize and customer engagements improve [8]. - The company anticipates modest increases in working capital levels in support of increased sales as customers rebuild inventory in calendar 2026 [8]. Risks and Uncertainties - Forward-looking statements include guidance pertaining to financial outlook and involve risks and uncertainties that may cause actual results to differ materially [44]. - Factors affecting performance include global competition, changes in trade regulations, and consumer spending trends [45]. - The company acknowledges the unpredictability of new factors that may emerge and impact actual results [46]. - UNIFI does not undertake any obligation to update forward-looking statements except as required by federal securities laws [46]. - Risks and uncertainties are detailed in UNIFI's most recent Annual Report on Form 10-K and other reports filed with the SEC [46].