Included within Other non-current assets are UNIFI’s investments in unconsolidated affiliates: U.N.F. Industries, Ltd. (“UNF”) and UNF America LLC (“UNFA”) (collectively “UNFs”).

Raw material and production services for UNF are provided by Nilit Ltd. under separate supply and services agreements. UNF’s fiscal year end is December 31, and it is a registered Israeli private company located in Migdal Ha-Emek, Israel.

Raw material and production services for UNFA are provided by Nilit America Inc. under separate supply and services agreements. UNFA’s fiscal year end is December 31, and it is a limited liability company located in Ridgeway, Virginia. UNFA is treated as a partnership for its income tax reporting.

In conjunction with the formation of UNFA, UNIFI entered into a supply agreement with UNF and UNFA whereby UNIFI agreed to purchase all of its first quality nylon POY requirements for texturing (subject to certain exceptions) from either UNF or UNFA. The supply agreement has no stated minimum purchase quantities and pricing is typically negotiated every six months, based on market rates. As of April 2, 2023, UNIFI’s open purchase orders related to this supply agreement were $5,044.

UNIFI’s raw material purchases under this supply agreement consisted of the following:


	For the Three Months Ended				For the Nine Months Ended
	April 2, 2023		March 27, 2022		April 2, 2023		March 27, 2022
UNFA	$	6,604	$	8,267	$	19,395	$	20,849
UNF		—		93		37		239
Total	$	6,604	$	8,360	$	19,432	$	21,088

As of April 2, 2023 and July 3, 2022, UNIFI had combined accounts payable due to UNF and UNFA of $4,621 and $5,565, respectively.

UNIFI has determined that UNF and UNFA are variable interest entities and that UNIFI is the primary beneficiary of these entities, based on the terms of the supply agreement discussed above. As a result, these entities should be consolidated with UNIFI’s financial results. As (i) UNIFI purchases substantially all of the output from the two entities, (ii) the two entities’ balance sheets constitute 3% or less of UNIFI’s current assets and total assets, and (iii) such balances are not expected to comprise a larger portion in the future, UNIFI has not included the accounts of UNF and UNFA in its consolidated financial statements and instead is accounting for these entities as equity investments. As of April 2, 2023, UNIFI’s combined investments in UNF and UNFA were $2,504. The financial results of UNF and UNFA are included in UNIFI’s consolidated financial statements with a one-month lag, using the equity method of accounting and with intercompany profits eliminated in accordance with UNIFI’s accounting policy. Other than the supply agreement discussed above, UNIFI does not provide any other commitments or guarantees related to either UNF or UNFA.

Condensed balance sheet and income statement information for UNIFI’s unconsolidated affiliates (including reciprocal balances) are presented in the tables below.


	April 2, 2023		July 3, 2022
Current assets	$	9,150	$	10,705
Non-current assets		521		605
Current liabilities		6,542		8,056
Non-current liabilities		—		—
Shareholders’ equity and capital accounts		3,129		3,254

UNIFI’s portion of undistributed earnings		2,445		2,013


	For the Three Months Ended					For the Nine Months Ended
	April 2, 2023			March 27, 2022		April 2, 2023			March 27, 2022
Net sales	$	5,041		$	8,816	$	21,076		$	22,301
Gross profit		282			487		1,215			1,059
(Loss) income from operations		(138	)		60		(87	)		(194	)
Net (loss) income		(154	)		54		(125	)		(199	)
Depreciation and amortization		27			29		83			93

Distributions received		—			750		—			750