8-K

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): December 31, 2023

UNIFI, INC.

(Exact name of Registrant as Specified in Its Charter)

New York	1-10542	11-2165495
(State or Other Jurisdiction of Incorporation)	(Commission File Number)	(IRS Employer Identification No.)
7201 West Friendly Avenue
Greensboro, North Carolina		27410
(Address of Principal Executive Offices)		(Zip Code)

Registrant’s Telephone Number, Including Area Code: 336 294-4410

(Former Name or Former Address, if Changed Since Last Report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

☐Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, par value $0.10 per share	UFI	New York Stock Exchange

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§ 230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§ 240.12b-2 of this chapter).

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Item 2.02. Results of Operations and Financial Condition.

On January 31, 2024, the Company issued a press release announcing its operating results for the fiscal second quarter ended December 31, 2023, a copy of which is attached hereto as Exhibit 99.1.

Item 5.02. Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.

On January 30, 2024, the Board of Directors of the Company appointed Andrew J. ("A.J.") Eaker as the Company's Executive Vice President, Chief Financial Officer (principal financial officer and principal accounting officer), and Treasurer, effective immediately. Mr. Eaker, age 38, previously served as Treasurer and Interim Chief Financial Officer (interim principal financial officer and interim principal accounting officer) of the Company since August 25, 2023, Treasurer of the Company since December 2022, and Vice President of Finance for the Company’s primary domestic operating subsidiary since June 2017. A copy of the press release regarding Mr. Eaker's appointment as Chief Financial Officer is filed herewith as Exhibit 99.3.

There are no arrangements or understandings between Mr. Eaker and any other persons pursuant to which he was selected as an officer. Mr. Eaker has no family relationships with any of the Company’s directors or executive officers. There are no transactions involving the Company and Mr. Eaker that the Company would be required to report pursuant to Item 404(a) of Regulation S-K.

Item 7.01. Regulation FD Disclosure.

On February 1, 2024, the Company will host a conference call to discuss its operating results for the fiscal second quarter ended December 31, 2023. A copy of the materials prepared for use by management during this conference call is attached hereto as Exhibit 99.2.

Item 9.01. Financial Statements and Exhibits.

(d) Exhibits.

Exhibit No.	Description
99.1	Press Release of Unifi, Inc., dated January 31, 2024.
99.2	Earnings Call Presentation Materials.
99.3	News Release of Unifi, Inc., dated January 31, 2024.
104	Cover Page Interactive Data File (embedded within the Inline XBRL document).

The information in this Current Report on Form 8-K, including the exhibits attached hereto, is being furnished and shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section, nor shall it be deemed to be incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in any such filing.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

			UNIFI, INC.
Date:	January 31, 2024	By:	/s/ GREGORY K. SIGMON
			Gregory K. Sigmon Executive Vice President General Counsel and Corporate Secretary

EX-99.1

 

Exhibit 99.1

UNIFI®, Makers of REPREVE®, Announces Second Quarter Fiscal 2024 Results

Expansion of cost containment efforts and renewed commercial initiatives provide optimism for calendar 2024

Business remains well positioned for apparel demand recovery in calendar 2024

GREENSBORO, N.C., January 31, 2024 – Unifi, Inc. (NYSE: UFI) (together with its consolidated subsidiaries, “UNIFI”), makers of REPREVE and one of the world’s leading innovators in recycled and synthetic yarns, today released operating results for the second fiscal quarter ended December 31, 2023.

Second Quarter Fiscal 2024 Overview

•Net sales were $136.9 million, an increase of 0.5% from the second quarter of fiscal 2023, driven by higher sales volumes that were muted by lower pricing in response to lower raw material costs.

•Revenues from REPREVE Fiber products were $45.7 million and represented 33% of net sales.

•Gross profit was $1.6 million and gross margin was 1.2%, representing sequential-quarter and year-over-year improvements through existing cost saving initiatives, successful execution of renewed commercial efforts, and stabilized input costs.

•Net loss was $19.8 million, or ($1.10) per share, compared to net loss of $18.0 million. Adjusted Net Loss was $14.7 million, which excludes $5.1 million of restructuring costs, compared to Adjusted Net Loss of $21.8 million for the second quarter of fiscal 2023, which excluded $3.8 million of income tax recoveries in Brazil.

•Adjusted EBITDA, which also excludes $5.1 million of restructuring costs, was ($5.5) million, compared to ($13.0) million for the second quarter of fiscal 2023.

•Company continued and expanded cost efficiency measures to streamline operations and reduce expenses across the business.

•Company recently announced the promotion of key executive leaders to complement the Company’s Profitability Improvement Plan implemented in December 2023, which is focused on streamlining operations and reducing costs.

Adjusted Net Loss, Adjusted EBITDA and Net Debt are non-GAAP financial measures. The schedules included in this press release reconcile each non-GAAP financial measure to its most directly comparable GAAP financial measure.

Eddie Ingle, Chief Executive Officer of Unifi, Inc., stated, “Our second quarter fiscal 2024 results were in line with our expectations and reflect sequential improvement in our underlying gross profit performance, despite the negative impact from the ongoing challenges in the apparel industry and its supply chains. The recent strategic actions aimed at further reducing ongoing costs, optimizing our operations, and enhancing profitability will strengthen our position for the anticipated recovery in apparel demand in calendar 2024.”

 

Ingle continued, “Our focus remains on maintaining a disciplined approach to cost management and leveraging operational efficiencies in the short-term environment, but we will continue to invest prudently to support long-term growth and innovation for greater revenues and accretive margins. We are excited about the opportunities across the globe that expand our beyond apparel initiatives and build on our REPREVE Fiber business.”

Second Quarter Fiscal 2024 Compared to Second Quarter Fiscal 2023

Net sales of $136.9 million were relatively unchanged compared to $136.2 million, primarily due to lower average selling prices resulting from lower raw material costs. The Americas Segment experienced modest volume improvement, although sales levels remain below historical averages as a result of weakened demand for fiber in the apparel sector. The Brazil Segment maintained its increased market share with strong sales volumes while facing ongoing pricing pressures from competitive imports. The Asia Segment continued to experience weak apparel demand levels but attained a diverse sales mix.

Gross profit of $1.6 million improved significantly compared to ($8.0) million. Americas Segment gross profit increased $6.3 million, primarily driven by variable cost management efforts and more stable raw material costs. Brazil Segment gross profit improved $1.8 million from higher sales volumes, which were partially offset by unfavorable import pricing dynamics. The Asia Segment continued to demonstrate portfolio strength with a rich mix of REPREVE products, achieving a gross profit increase of $1.5 million and 250 basis points of incremental gross margin.

Operating loss was $17.6 million compared to $19.8 million, aligning with the improvement in gross profit, partially offset by $5.1 million of restructuring costs and $1.3 million of bad debt expense. Net loss was $19.8 million compared to $18.0 million. Adjusted EPS was ($0.81) and Adjusted EBITDA was ($5.5) million, which exclude the $5.1 million of restructuring costs, comprised of $2.7 million related to the dissolution of an unprofitable joint venture and $2.4 million of severance costs.

Fiscal 2024 Outlook

UNIFI expects the following third quarter fiscal 2024 results:

•Net sales between $149.0 million and $154.0 million;

•Adjusted EBITDA between ($2.0) million and $1.0 million;

•Capital expenditures between $4.0 million and $5.0 million; and

•Continued volatility in the effective tax rate.

Additionally, UNIFI expects sequential improvement from the third quarter to the fourth quarter of fiscal 2024.

 

Ingle concluded, “While the apparel industry recession has persisted longer than we anticipated, we believe we will see an improved competitive environment moving forward. As one of the strongest textile solutions providers in the world, we stand to expand our global market share and accelerate our financial performance as our industry returns to growth. Further, our recently announced cost reset and commercial improvements should amplify quarterly revenue and earnings on a sequential basis. Our potential in Asia and Brazil continues to shine, demonstrating the strength of our dynamic global business model. As the demand in the Americas normalizes and the industry stabilizes, the results of our recent efforts to strengthen the business will become even more evident as we close our fiscal 2024.”

Second Quarter Fiscal 2024 Earnings Conference Call

UNIFI will provide additional commentary regarding its second quarter 2024 results and other developments during its earnings conference call on February 1, 2024, at 8:30 a.m., Eastern Time. The call can be accessed via a live audio webcast on UNIFI’s website at http://investor.unifi.com. Additional supporting materials and information related to the call will also be available on UNIFI’s website.

###

About UNIFI

Unifi, Inc. (NYSE: UFI) is a global textile solutions provider and one of the world's leading innovators in manufacturing synthetic and recycled performance fibers. Through REPREVE, one of UNIFI's proprietary technologies and the global leader in branded recycled performance fibers, UNIFI has transformed more than 40 billion plastic bottles into recycled fiber for new apparel, footwear, home goods, and other consumer products. UNIFI continually innovates technologies to meet consumer needs in moisture management, thermal regulation, antimicrobial protection, UV protection, stretch, water resistance, and enhanced softness. UNIFI collaborates with many of the world's most influential brands in the sports apparel, fashion, home, automotive, and other industries. For more information about UNIFI, visit www.unifi.com.

Contact information:

Davis Snyder or Darren Yeun

Alpha IR Group

312-445-2870

UFI@alpha-ir.com

Financial Statements, Business Segment Information and Reconciliations of Reported Results to Adjusted Results to Follow

 

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

(In thousands, except per share amounts)

	For the Three Months Ended						For the Six Months Ended
	December 31, 2023			January 1, 2023			December 31, 2023			January 1, 2023
Net sales	$	136,917		$	136,212		$	275,761		$	315,731
Cost of sales		135,281			144,212			274,700			317,168
Gross profit (loss)		1,636			(8,000	)		1,061			(1,437	)
Selling, general and administrative expenses		12,408			11,748			24,017			23,521
Provision (benefit) for bad debts		1,289			(156	)		1,080			18
Restructuring costs		5,101			—			5,101			—
Other operating expense (income), net		481			226			535			(463	)
Operating loss		(17,643	)		(19,818	)		(29,672	)		(24,513	)
Interest income		(697	)		(514	)		(1,278	)		(1,061	)
Interest expense		2,613			1,889			5,098			3,136
Equity in earnings of unconsolidated affiliates		(93	)		(86	)		(293	)		(381	)
Loss before income taxes		(19,466	)		(21,107	)		(33,199	)		(26,207	)
Provision (benefit) for income taxes		380			(3,070	)		(83	)		(336	)
Net loss	$	(19,846	)	$	(18,037	)	$	(33,116	)	$	(25,871	)
Net loss per common share:
Basic	$	(1.10	)	$	(1.00	)	$	(1.83	)	$	(1.44	)
Diluted	$	(1.10	)	$	(1.00	)	$	(1.83	)	$	(1.44	)
Weighted average common shares outstanding:
Basic		18,110			18,034			18,097			18,017
Diluted		18,110			18,034			18,097			18,017

 

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)

(In thousands)

	December 31, 2023			July 2, 2023
ASSETS
Cash and cash equivalents	$	35,979		$	46,960
Receivables, net		69,583			83,725
Inventories		135,676			150,810
Income taxes receivable		2,421			238
Other current assets		12,290			12,327
Total current assets		255,949			294,060
Property, plant and equipment, net		209,435			218,521
Operating lease assets		7,094			7,791
Deferred income taxes		4,812			3,939
Other non-current assets		14,839			14,508
Total assets	$	492,129		$	538,819
LIABILITIES AND SHAREHOLDERS’ EQUITY
Accounts payable	$	34,709		$	44,455
Income taxes payable		2,263			789
Current operating lease liabilities		1,733			1,813
Current portion of long-term debt		12,357			12,006
Other current liabilities		17,409			12,932
Total current liabilities		68,471			71,995
Long-term debt		120,144			128,604
Non-current operating lease liabilities		5,515			6,146
Deferred income taxes		2,526			3,364
Other long-term liabilities		4,133			5,100
Total liabilities		200,789			215,209
Commitments and contingencies
Common stock		1,815			1,808
Capital in excess of par value		70,254			68,901
Retained earnings		273,676			306,792
Accumulated other comprehensive loss		(54,405	)		(53,891	)
Total shareholders’ equity		291,340			323,610
Total liabilities and shareholders’ equity	$	492,129		$	538,819

 

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

(In thousands)

	For the Six Months Ended
	December 31, 2023			January 1, 2023
Cash and cash equivalents at beginning of period	$	46,960		$	53,290
Operating activities:
Net loss		(33,116	)		(25,871	)
Adjustments to reconcile net loss to net cash provided by operating activities:
Equity in earnings of unconsolidated affiliates		(293	)		(381	)
Depreciation and amortization expense		13,988			13,478
Non-cash compensation expense		1,387			1,976
Restructuring costs		5,101			—
Recovery of income taxes		—			(3,799	)
Deferred income taxes		(1,714	)		(304	)
Other, net		(120	)		289
Changes in assets and liabilities		17,284			21,884
Net cash provided by operating activities		2,517			7,272
Investing activities:
Capital expenditures		(5,982	)		(23,950	)
Other, net		488			(576	)
Net cash used by investing activities		(5,494	)		(24,526	)
Financing activities:
Proceeds from long-term debt		80,600			101,700
Payments on long-term debt		(88,740	)		(85,599	)
Other, net		(27	)		(705	)
Net cash (used) provided by financing activities		(8,167	)		15,396
Effect of exchange rate changes on cash and cash equivalents		163			(651	)
Net decrease in cash and cash equivalents		(10,981	)		(2,509	)
Cash and cash equivalents at end of period	$	35,979		$	50,781

 

BUSINESS SEGMENT INFORMATION

(Unaudited)

(In thousands)

Net sales and gross profit (loss) details for each reportable segment of UNIFI are as follows:

	For the Three Months Ended				For the Six Months Ended
	December 31, 2023		January 1, 2023		December 31, 2023		January 1, 2023
Americas	$	80,549	$	85,242	$	162,122	$	192,886
Brazil		26,061		25,687		55,970		64,566
Asia		30,307		25,283		57,669		58,279
Consolidated net sales	$	136,917	$	136,212	$	275,761	$	315,731

	For the Three Months Ended						For the Six Months Ended
	December 31, 2023			January 1, 2023			December 31, 2023			January 1, 2023
Americas	$	(6,738	)	$	(13,084	)	$	(14,118	)	$	(17,953	)
Brazil		3,139			1,330			5,306			8,117
Asia		5,235			3,754			9,873			8,399
Consolidated gross profit (loss)	$	1,636		$	(8,000	)	$	1,061		$	(1,437	)

RECONCILIATIONS OF REPORTED RESULTS TO ADJUSTED RESULTS

(Unaudited)

(In thousands)

EBITDA and Adjusted EBITDA (Non-GAAP Financial Measures)

The reconciliations of the amounts reported under U.S. generally accepted accounting principles (“GAAP”) for Net loss to EBITDA and Adjusted EBITDA are set forth below.

	For the Three Months Ended						For the Six Months Ended
	December 31, 2023			January 1, 2023			December 31, 2023			January 1, 2023
Net loss	$	(19,846	)	$	(18,037	)	$	(33,116	)	$	(25,871	)
Interest expense, net		1,916			1,375			3,820			2,075
Provision (benefit) for income taxes		380			(3,070	)		(83	)		(336	)
Depreciation and amortization expense (1)		6,922			6,693			13,910			13,390
EBITDA		(10,628	)		(13,039	)		(15,469	)		(10,742	)
Loss on joint venture dissolution (2)		2,750			—			2,750			—
Severance (3)		2,351			—			2,351			—
Adjusted EBITDA	$	(5,527	)	$	(13,039	)	$	(10,368	)	$	(10,742	)

(1)Within this reconciliation, depreciation and amortization expense excludes the amortization of debt issuance costs, which are reflected in interest expense, net. Within the condensed consolidated statements of cash flows, amortization of debt issuance costs is reflected in depreciation and amortization expense.

(2)In the second quarter of fiscal 2024, UNIFI recorded a loss of $2,750 related to the dissolution of a joint venture.

(3)In the second quarter of fiscal 2024, UNIFI incurred certain severance costs in connection with overall cost reduction efforts in the U.S.

 

Adjusted Net Loss and Adjusted EPS (Non-GAAP Financial Measures)

The tables below set forth reconciliations of (i) loss before income taxes (“Pre-tax Loss”), provision (benefit) for income taxes (“Tax Impact”), and net loss (“Net Loss”) to Adjusted Net Loss and (ii) Diluted Earnings Per Share (“Diluted EPS”) to Adjusted EPS. Rounding may impact certain of the below calculations.

	For the Three Months Ended December 31, 2023												For the Three Months Ended January 1, 2023
	Pre-tax Loss			Tax Impact			Net Loss			Diluted EPS			Pre-tax Loss			Tax Impact			Net Loss			Diluted EPS
GAAP results	$	(19,466	)	$	(380	)	$	(19,846	)	$	(1.10	)	$	(21,107	)	$	3,070		$	(18,037	)	$	(1.00	)
Loss on joint venture dissolution (1)		2,750			—			2,750			0.15			—			—			—			—
Severance (2)		2,351			—			2,351			0.14			—			—			—			—
Recovery of income taxes (3)		—			—			—			—			—			(3,799	)		(3,799	)		(0.21	)
Adjusted results	$	(14,365	)	$	(380	)	$	(14,745	)	$	(0.81	)	$	(21,107	)	$	(729	)	$	(21,836	)	$	(1.21	)
Weighted average common shares outstanding											18,110												18,034
	For the Six Months Ended December 31, 2023												For the Six Months Ended January 1, 2023
	Pre-tax Loss			Tax Impact			Net Loss			Diluted EPS			Pre-tax Loss			Tax Impact			Net Loss			Diluted EPS
GAAP results	$	(33,199	)	$	83		$	(33,116	)	$	(1.83	)	$	(26,207	)	$	336		$	(25,871	)	$	(1.44	)
Loss on joint venture dissolution (1)		2,750			—			2,750			0.15			—			—			—			—
Severance (2)		2,351			—			2,351			0.13			—			—			—			—
Recovery of income taxes (3)		—			—			—			—			—			(3,799	)		(3,799	)		(0.21	)
Adjusted results	$	(28,098	)	$	83		$	(28,015	)	$	(1.55	)	$	(26,207	)	$	(3,463	)	$	(29,670	)	$	(1.65	)
Weighted average common shares outstanding											18,097												18,017

(1)In the second quarter of fiscal 2024, UNIFI recorded a loss of $2,750 related to the dissolution of a joint venture.

(2)In the second quarter of fiscal 2024, UNIFI incurred certain severance costs in connection with overall cost reduction efforts in the U.S.

(3)In the second quarter of fiscal 2023, UNIFI recorded a recovery of income taxes in connection with filing amended tax returns in Brazil relating to certain income taxes paid in prior fiscal years.

Net Debt (Non-GAAP Financial Measure)

Reconciliations of Net Debt are as follows:

	December 31, 2023		July 2, 2023
Long-term debt	$	120,144	$	128,604
Current portion of long-term debt		12,357		12,006
Unamortized debt issuance costs		259		289
Debt principal		132,760		140,899
Less: cash and cash equivalents		35,979		46,960
Net Debt	$	96,781	$	93,939

Cash and cash equivalents

At December 31, 2023 and July 2, 2023, UNIFI’s foreign operations held nearly all consolidated cash and cash equivalents.

REPREVE Fiber

REPREVE Fiber represents UNIFI’s collection of fiber products on its recycled platform, with or without added technologies.

 

Non-GAAP Financial Measures

Certain non-GAAP financial measures included herein are designed to complement the financial information presented in accordance with GAAP. These non-GAAP financial measures include Earnings Before Interest, Taxes, Depreciation and Amortization (“EBITDA”), Adjusted EBITDA, Adjusted Net (Loss) Income, Adjusted EPS, and Net Debt (together, the “non-GAAP financial measures”).

•EBITDA represents Net (loss) income before net interest expense, income tax expense, and depreciation and amortization expense.

•Adjusted EBITDA represents EBITDA adjusted to exclude, from time to time, certain adjustments necessary to understand and compare the underlying results of UNIFI.

•Adjusted Net (Loss) Income represents Net (loss) income calculated under GAAP adjusted to exclude certain amounts. Management believes the excluded amounts do not reflect the ongoing operations and performance of UNIFI and/or exclusion may be necessary to understand and compare the underlying results of UNIFI.

•Adjusted EPS represents Adjusted Net (Loss) Income divided by UNIFI’s weighted average common shares outstanding.

•Net Debt represents debt principal less cash and cash equivalents.

The non-GAAP financial measures are not determined in accordance with GAAP and should not be considered a substitute for performance measures determined in accordance with GAAP. The calculations of the non-GAAP financial measures are subjective, based on management’s belief as to which items should be included or excluded in order to provide the most reasonable and comparable view of the underlying operating performance of the business. We may, from time to time, modify the amounts used to determine our non-GAAP financial measures.

We believe that these non-GAAP financial measures better reflect UNIFI’s underlying operations and performance and that their use, as operating performance measures, provides investors and analysts with a measure of operating results unaffected by differences in capital structures, capital investment cycles, and ages of related assets, among otherwise comparable companies.

Management uses Adjusted EBITDA (i) as a measurement of operating performance because it assists us in comparing our operating performance on a consistent basis, as it removes the impact of (a) items directly related to our asset base (primarily depreciation and amortization) and (b) items that we would not expect to occur as a part of our normal business on a regular basis; (ii) for planning purposes, including the preparation of our annual operating budget; (iii) as a valuation measure for evaluating our operating performance and our capacity to incur and service debt, fund capital expenditures, and expand our business; and (iv) as one measure in determining the value of other acquisitions and dispositions. Adjusted EBITDA is a key performance metric utilized in the determination of variable compensation. We also believe Adjusted EBITDA is an appropriate supplemental measure of debt service capacity, because it serves as a high-level proxy for cash generated from operations.

Management uses Adjusted Net (Loss) Income and Adjusted EPS (i) as measurements of net operating performance because they assist us in comparing such performance on a consistent basis, as they remove the impact of (a) items that we would not expect to occur as a part of our normal business on a regular basis and (b) components of the provision for income taxes that we would not expect to occur as a part of our underlying taxable operations; (ii) for planning purposes, including the preparation of our annual operating budget; and (iii) as measures in determining the value of other acquisitions and dispositions.

Management uses Net Debt as a liquidity and leverage metric to determine how much debt would remain if all cash and cash equivalents were used to pay down debt principal.

In evaluating non-GAAP financial measures, investors should be aware that, in the future, we may incur expenses similar to the adjustments included herein. Our presentation of non-GAAP financial measures should not be construed as indicating that our future results will be unaffected by unusual or non-recurring items. Each of our non-GAAP financial measures has limitations as an analytical tool, and investors should not consider it in isolation or as a substitute for analysis of our results or liquidity measures as reported under GAAP. Some of these limitations are (i) it is not adjusted for all non-cash income or expense items that are reflected in our statements of cash flows; (ii) it does not reflect the impact of earnings or charges resulting from matters we consider not indicative of our ongoing operations; (iii) it does not reflect changes in, or cash requirements for, our working capital needs; (iv) it does not reflect the cash requirements necessary to make payments on our debt; (v) it does not reflect our future requirements for capital expenditures or contractual commitments; (vi) it does not reflect limitations on or costs related to transferring earnings from our subsidiaries to us; and (vii) other companies in our industry may calculate this measure differently than we do, limiting its usefulness as a comparative measure.

Because of these limitations, these non-GAAP financial measures should not be considered as a measure of discretionary cash available to us to invest in the growth of our business or as a measure of cash that will be available to us to meet our obligations, including those under our outstanding debt obligations. Investors should compensate for these limitations by relying primarily on our GAAP results and using these measures only as supplemental information.

 

Cautionary Statement on Forward-Looking Statements

Certain statements included herein contain “forward-looking statements” within the meaning of federal securities laws about the financial condition and results of operations of UNIFI that are based on management’s beliefs, assumptions and expectations about our future economic performance, considering the information currently available to management. An example of such forward-looking statements include, among others, guidance pertaining to our financial outlook. The words “believe,” “may,” “could,” “will,” “should,” “would,” “anticipate,” “plan,” “estimate,” “project,” “expect,” “intend,” “seek,” “strive” and words of similar import, or the negative of such words, identify or signal the presence of forward-looking statements. These statements are not statements of historical fact, and they involve risks and uncertainties that may cause our actual results, performance or financial condition to differ materially from the expectations of future results, performance or financial condition that we express or imply in any forward-looking statement.

Factors that could contribute to such differences include, but are not limited to: the competitive nature of the textile industry and the impact of global competition; changes in the trade regulatory environment and governmental policies and legislation; the availability, sourcing and pricing of raw materials; general domestic and international economic and industry conditions in markets where UNIFI competes, including economic and political factors over which UNIFI has no control; changes in consumer spending, customer preferences, fashion trends and end uses for products; the financial condition of UNIFI’s customers; the loss of a significant customer or brand partner; natural disasters, industrial accidents, power or water shortages, extreme weather conditions and other disruptions at one of our facilities; the disruption of operations, global demand, or financial performance as a result of catastrophic or extraordinary events, including epidemics or pandemics such as the recent strain of coronavirus; the success of UNIFI’s strategic business initiatives; the volatility of financial and credit markets; the ability to service indebtedness and fund capital expenditures and strategic business initiatives; the availability of and access to credit on reasonable terms; changes in foreign currency exchange, interest and inflation rates; fluctuations in production costs; the ability to protect intellectual property; the strength and reputation of our brands; employee relations; the ability to attract, retain and motivate key employees; the impact of climate change or environmental, health and safety regulations; and the impact of tax laws, the judicial or administrative interpretations of tax laws and/or changes in such laws or interpretations.

All such factors are difficult to predict, contain uncertainties that may materially affect actual results and may be beyond our control. New factors emerge from time to time, and it is not possible for management to predict all such factors or to assess the impact of each such factor on UNIFI. Any forward-looking statement speaks only as of the date on which such statement is made, and we do not undertake any obligation to update any forward-looking statement to reflect events or circumstances after the date on which such statement is made, except as may be required by federal securities laws. The above and other risks and uncertainties are described in UNIFI’s most recent Annual Report on Form 10-K, and additional risks or uncertainties may be described from time to time in other reports filed by UNIFI with the Securities and Exchange Commission pursuant to the Securities Exchange Act of 1934, as amended.

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EX-99.2

CONFERENCE CALL PRESENTATION Second Quarter Ended December 31, 2023 (Unaudited Results) Exhibit 99.2

CAUTIONARY STATEMENTS Forward-Looking Statements Certain statements included herein contain “forward-looking statements” within the meaning of federal securities laws about the financial condition and results of operations of the Company that are based on management’s beliefs, assumptions, and expectations about our future economic performance, considering the information currently available to management. An example of such forward-looking statements include, among others, guidance pertaining to our financial outlook. The words “believe,” “may,” “could,” “will,” “should,” “would,” “anticipate,” “plan,” “estimate,” “project,” “expect,” “intend,” “seek,” “strive,” and words of similar import, or the negative of such words, identify or signal the presence of forward-looking statements. These statements are not statements of historical fact, and they involve risks and uncertainties that may cause our actual results, performance, or financial condition to differ materially from the expectations of future results, performance, or financial condition that we express or imply in any forward-looking statement. Factors that could contribute to such differences include, but are not limited to: the competitive nature of the textile industry and the impact of global competition; changes in the trade regulatory environment and governmental policies and legislation; the availability, sourcing and pricing of raw materials; general domestic and international economic and industry conditions in markets where the Company competes, including economic and political factors over which the Company has no control; changes in consumer spending, customer preferences, fashion trends, and end uses for products; the financial condition of the Company’s customers; the loss of a significant customer or brand partner; natural disasters, industrial accidents, power, or water shortages; extreme weather conditions and other disruptions at one of our facilities; the disruption of operations, global demand, or financial performance as a result of catastrophic or extraordinary events, including epidemics or pandemics such as the recent strain of coronavirus; the success of the Company’s strategic business initiatives; the volatility of financial and credit markets; the ability to service indebtedness and fund capital expenditures and strategic business initiatives; the availability of and access to credit on reasonable terms; changes in foreign currency exchange, interest, and inflation rates; fluctuations in production costs; the ability to protect intellectual property; the strength and reputation of our brands; employee relations; the ability to attract, retain, and motivate key employees; the impact of climate change or environmental, health, and safety regulations; and the impact of tax laws, the judicial or administrative interpretations of tax laws, and/or changes in such laws or interpretations. All such factors are difficult to predict, contain uncertainties that may materially affect actual results, and may be beyond our control. New factors emerge from time to time, and it is not possible for management to predict all such factors or to assess the impact of each such factor on the Company. Any forward-looking statement speaks only as of the date on which such statement is made, and we do not undertake any obligation to update any forward-looking statement to reflect events or circumstances after the date on which such statement is made, except as may be required by federal securities laws. The above and other risks and uncertainties are described in the Company’s most recent Annual Report on Form 10-K, and additional risks or uncertainties may be described from time to time in other reports filed by the Company with the Securities and Exchange Commission pursuant to the Securities Exchange Act of 1934, as amended. Non-GAAP Financial Measures Certain non-GAAP financial measures are designed to complement the financial information presented in accordance with GAAP. These non-GAAP financial measures include Earnings Before Interest, Taxes, Depreciation, and Amortization (“EBITDA”), Adjusted EBITDA, Adjusted Net Income, Adjusted EPS, Adjusted Working Capital, and Net Debt (collectively, the “non-GAAP financial measures”). The non-GAAP financial measures are not determined in accordance with GAAP and should not be considered a substitute for performance measures determined in accordance with GAAP. The calculations of the non-GAAP financial measures are subjective, based on management’s belief as to which items should be included or excluded in order to provide the most reasonable and comparable view of the underlying operating performance of the business. The Company may, from time to time, modify the amounts used to determine its non-GAAP financial measures. We believe that these non-GAAP financial measures better reflect the Company’s underlying operations and performance and that their use, as operating performance measures, provides investors and analysts with a measure of operating results unaffected by differences in capital structures, capital investment cycles, and ages of related assets, among otherwise comparable companies. In evaluating non-GAAP financial measures, investors should be aware that, in the future, we may incur expenses similar to the adjustments included herein. Our presentation of non-GAAP financial measures should not be construed as indicating that our future results will be unaffected by unusual or non-recurring items. Each of our non-GAAP financial measures has limitations as an analytical tool, and you should not consider it in isolation or as a substitute for analysis of our results or liquidity measures as reported under GAAP. Some of these limitations are (i) it is not adjusted for all non-cash income or expense items that are reflected in our statements of cash flows; (ii) it does not reflect the impact of earnings or charges resulting from matters we consider not indicative of our ongoing operations; (iii) it does not reflect changes in, or cash requirements for, our working capital needs; (iv) it does not reflect the cash requirements necessary to make payments on our debt; (v) it does not reflect our future requirements for capital expenditures or contractual commitments; (vi) it does not reflect limitations on or costs related to transferring earnings from our subsidiaries to us; and (vii) other companies in our industry may calculate this measure differently than we do, limiting its usefulness as a comparative measure. Because of these limitations, these non-GAAP financial measures should not be considered as a measure of discretionary cash available to us to invest in the growth of our business or as a measure of cash that will be available to us to meet our obligations, including those under our outstanding debt obligations. You should compensate for these limitations by relying primarily on our GAAP results and using these measures only as supplemental information.

Q2 FISCAL 2024 OVERVIEW (compared to Q2 Fiscal 2023) Revenue $136.9M vs. $136.2M Adjusted EPS(1) ($0.81) vs. ($1.21) Adjusted EBITDA(1) $(5.5M) vs. $(13.0M) REPREVE Fiber % of Sales 33% vs. 31% (1) Adjusted EPS and Adjusted EBITDA are non-GAAP measures described on Slide 2 and reconciled within the Earnings Release dated January 31, 2024. REPREVE Fiber represents UNIFI’s collection of fiber products on its recycled platform, with or without added technologies. Revenue stabilizing with expected calendar 2024 demand recovery Inventory destocking nearing end; expect normalization to start in CY2024 Momentum continues across new products, customer adoptions, and co-branding REPREVE® Fiber products comprised 33% ($45.7M) of net sales vs. 31% ($42.9M) Profitability Improvement Plan and leadership promotions support more robust operating profile in calendar 2024 Cost reset and headcount reductions expected to lower expenses by $10 million to $15 million annually Sales transformation initiatives focused on improving efficiencies and processes expected to bolster operating margins by at least $6 million annually Savings will be utilized to further strengthen the Company’s financial profile and invest in margin accretive growth opportunities

as a % of Net Sales and Millions of $s REPREVE® FIBER SALES QUARTERLY NOTE ANNUAL REPREVE Fiber represents UNIFI’s collection of fiber products on its recycled platform, with or without added technologies. Fiscal Year FY 2022 FY 2023 FY 2024 $180 $186 $246 $293 $186 $71.9 $81.5 $71.9 $67.7 $49.2 $42.9 $49.6 $44.5 $42.5 $45.7

Year-Over-Year, $s in Millions NET SALES OVERVIEW CONSOLIDATED Volume 13.1% Price/Mix (13.6%) FX1 1.0% ↑0.5% AMERICAS BRAZIL ASIA Volume 8.8% Price/Mix (14.5%) FX1 0.2% ↓5.5% ↑1.5% Volume 14.7% Price/Mix (19.2%) FX1 6.0% ↑19.9% Volume 19.0% Price/Mix 2.4% FX1 (1.5%) 5 1 Approximates the impact of foreign currency translation. Note: Q2 FY23 ended on January 1, 2023; Q2 FY24 ended on December 31, 2023; and each contained 13 weeks.

Year-Over-Year, $s in Millions GROSS PROFIT OVERVIEW CONSOLIDATED AMERICAS BRAZIL ASIA Gross Profit $ Gross Margin % 6 Q2 FY23 Q2 FY24 Q2 FY23 Q2 FY24 Q2 FY23 Q2 FY24 Q2 FY23 Q2 FY24 Note: Q2 FY23 ended on January 1, 2023; Q2 FY24 ended on December 31, 2023; and each contained 13 weeks.

Quarter-Over-Quarter, $s in Millions NET SALES OVERVIEW CONSOLIDATED Volume (0.4%) Price/Mix (0.8%) FX1 (0.2%) ↓1.4% AMERICAS BRAZIL ASIA Volume 3.2% Price/Mix (4.5%) FX1 0.0% ↓1.3% ↓12.9% Volume (11.8%) Price/Mix 0.2% FX1 (1.3%) ↑10.8% Volume 6.4% Price/Mix 4.0% FX1 0.4% 7 1 Approximates the impact of foreign currency translation. Note: Q1 FY24 ended on October 1, 2023; Q2 FY24 ended on December 31, 2023; and each contained 13 weeks.

Quarter-Over-Quarter, $s in Millions GROSS PROFIT OVERVIEW CONSOLIDATED AMERICAS BRAZIL ASIA Gross Profit $ Gross Margin % 8 Q1 FY24 Q2 FY24 Q1 FY24 Q2 FY24 Q1 FY24 Q2 FY24 Q1 FY24 Q2 FY24 Note: Q1 FY24 ended on October 1, 2023; Q2 FY24 ended on December 31, 2023; and each contained 13 weeks.

$s in Millions BALANCE SHEET & LIQUIDITY NET DEBT (1) FREE CASH FLOW $0 CAPEX WORKING CAPITAL Highlights Reset capital expenditures levels to align with economic circumstances for improved free cash flow Additional twelve-month delay of EvoCooler texturing equipment Implemented cost control and working capital measures to improve underlying cash flow (1) Net Debt is a non-GAAP measure described on Slide 2 and reconciled within the Earnings Release dated January 31, 2024.

FISCAL 2024 SECOND HALF PRIORITIES Matching production levels to meet expected rebound of demand in the U.S. and continued capture of market share Scrutinizing working capital expenditures to reduce interest expense and improve cash flows Leveraging the realignment of resources and key talent across the organization to drive growth and innovation Transforming the pricing and execution components of the sales process to streamline operational efficiencies and drive margin improvement Pursuing new yarn sales opportunities beyond traditional performance apparel markets Increasing customer engagement in all business segments to increase global market share 10 Prepared to Pivot to Growth

$s in Millions Q3 FISCAL 2024 FINANCIAL OUTLOOK Key Financial Metrics Q2 FY24 Results Q3 FY24 Outlook Net Sales $136.9 $149.0 to $154.0 Adjusted EBITDA(1) ($5.5) ($2.0) to $1.0 Capital Expenditures $3.0 $4.0 to $5.0 Remain Focused on Long-Term Growth For The Good of Tomorrow Effective Tax Rate -2.0% Continued Volatility (1) Adjusted EBITDA is a non-GAAP measure described on Slide 2 and reconciled within the Earnings Release dated January 31, 2024.

EX-99.3

 

Exhibit 99.3

UNIFI®, Makers of REPREVE®, Announces Profitability Improvement Plan and Leadership Promotions

Company to streamline operations and reset costs to enhance margin and profitability

Board promotes multiple leaders to drive critical strategic initiatives through appointments of Chief Financial Officer, Chief Product Officer, President of Unifi Manufacturing, Inc., and Expanded General Counsel Role

GREENSBORO, N.C. – UNIFI, Inc. (NYSE: UFI) (together with its consolidated subsidiaries, “UNIFI”), makers of REPREVE and one of the world’s leading innovators in recycled and synthetic yarns, today announced that it has begun the implementation of a new Profitability Improvement Plan, focused on further reducing the Company’s costs, streamlining operations, and investing in innovation. The Company also announced new executive officer appointments to critical roles.

Highlights:

•Profitability Improvement Plan includes:

oCost reset and headcount reductions that are expected to lower expenses by $10 million to $15 million annually

oSales transformation initiatives focused on improving efficiencies and processes expected to bolster operating margins by $6 million annually

•Savings are expected to be invested into margin accretive opportunities and product innovation for REPREVE and will be used to strengthen the Company’s financial profile beyond actions taken to date

•A.J. Eaker promoted to Executive Vice President and Chief Financial Officer

•Meredith S. Boyd promoted to Executive Vice President and Chief Product Officer

•Brian D. Moore promoted to Executive Vice President and President of Unifi Manufacturing, Inc.

•Gregory K. Sigmon promoted to Executive Vice President, General Counsel and Corporate Secretary, with expanded leadership responsibilities over Sustainability and Government Affairs functions.

“In recognition of the current operating environment, we recently implemented an extensive Profitability Improvement Plan to optimize our resources,” said Eddie Ingle, CEO of Unifi, Inc. “While this

 

Plan came with difficult decisions, these measures will significantly improve profitability, helping to ensure UNIFI has a robust foundation to foster growth and innovation, core tenets of the Company’s strategy. Additionally, the transformation of our sales processes will serve as a direct catalyst to improve gross margins and operational efficiencies. Savings from these initiatives will be reinvested in the business, first in areas that should help us accelerate growth as demand levels reach the expected rebound across our industry in calendar 2024, and then to bolster the our balance sheet and already strong financial profile.”

Ingle continued, “We have streamlined our organization and realigned our Leadership Team to support a more efficient and responsive go-to-market structure. Collectively these actions will better prepare the business to deliver stronger results as our industry pivots to growth in calendar 2024. Over the last decade we have focused on leadership development within our organization, and we are therefore very proud to announce promotions of talented leaders like A.J., Meredith, Brian, and Greg. Each has extensive experience and proven track records at UNIFI that have been invaluable to the organization and our customers. The Board and I are thrilled to complete the leadership appointments and promotions, as they will make strong impacts on their respective teams and help drive the future growth of our Company.”

Profitability Improvement Plan

UNIFI began the implementation of an extensive Profitability Improvement Plan in December 2023. The first part of this strategy realigned resources, reduced headcount and further reset costs, which lowers the Company’s variable operating expenses in both production and administrative activities in the United States. These actions have been completed and are expected to reduce expenses by $2.5 million per quarter at the start of fiscal 2025. The Company recorded a severance charge of $2.4 million during the December 31, 2023 quarter as a result.

The second part of the Profitability Improvement Plan is focused on gross margin expansion initiatives through a transformation of the Company’s sales process. This transformation includes actions designed to streamline processes, improve inventory management, and realign resources to maximize efficiencies in the current and future operating environment.

 

The total reduction in costs and anticipated profitability improvement as a result of the execution of this Plan is expected to reach $20 million on an annual run-rate basis at the start of fiscal 2025. The Company plans to reinvest these savings into areas of the business that will create additional revenue and margin accretive opportunities beyond the traditional apparel market it serves today.

Leadership Appointments

A.J. Eaker has been appointed Executive Vice President and Chief Financial Officer. Mr. Eaker served as Interim Chief Financial Officer of UNIFI since August 2023, as Treasurer since December 2022, and as Vice President of UNIFI's primary domestic operating subsidiary since June 2017. Mr. Eaker has held various positions with increasing leadership and functional responsibilities since joining the Company in March 2014, including Vice President of Finance, Corporate Finance Manager, and Assistant Controller, following more than five years in public accounting.

Meredith S. Boyd has been appointed Executive Vice President and Chief Product Officer. Ms. Boyd previously served as Senior Vice President of Sustainability, Technology & Innovation for the last three years and joined UNIFI in 2007. She has been instrumental in driving international growth and product differentiation, particularly in sustainable practices. Her expertise spans multiple roles, including Global Business Development and Brand Sales, and she has been a prominent figure in industry conferences and publications.

Brian D. Moore has been appointed Executive Vice President and President of Unifi Manufacturing, Inc., the Company’s primary operating subsidiary in the United States. Mr. Moore previously served as Senior Vice President of Direct Sales & Operations, leading various aspects of the United States sales team for the past year, after serving as Vice President of Global Brand Sales from 2020 to 2023. Mr. Moore first joined UNIFI in 1993, eventually leading UNIFI’s Asian market and gaining extensive experience in various sectors of the textile industry through transforming sales and operations for global fashion and apparel companies before returning to UNIFI in 2020. His leadership and experience underscores his capability to steer the manufacturing division effectively.

 

Second Quarter Fiscal 2024 Earnings Conference Call

UNIFI will provide additional commentary regarding these initiatives during its second quarter fiscal 2024 earnings conference call on February 1, 2024, at 8:30 a.m., Eastern Time. The call can be accessed via a live audio webcast on UNIFI’s website at http://investor.UNIFI.com. Additional supporting materials and information related to the call will also be available on UNIFI’s website.

About UNIFI

Unifi, Inc. (NYSE: UFI) is a global textile solutions provider and one of the world's leading innovators in manufacturing synthetic and recycled performance fibers. Through REPREVE, one of UNIFI's proprietary technologies and the global leader in branded recycled performance fibers, UNIFI has transformed more than 40 billion plastic bottles into recycled fiber for new apparel, footwear, home goods, and other consumer products. UNIFI continually innovates technologies to meet consumer needs in moisture management, thermal regulation, antimicrobial protection, UV protection, stretch, water resistance, and enhanced softness. UNIFI collaborates with many of the world's most influential brands in the sports apparel, fashion, home, automotive, and other industries. For more information about UNIFI, visit www.unifi.com.

Cautionary Statement on Forward-Looking Statements

Certain statements included herein contain “forward-looking statements” within the meaning of federal securities laws about the financial condition and results of operations of UNIFI that are based on management’s beliefs, assumptions and expectations about our future economic performance, considering the information currently available to management. An example of such forward-looking statements include, among others, guidance pertaining to our financial outlook. The words “believe,” “may,” “could,” “will,” “should,” “would,” “anticipate,” “plan,” “estimate,” “project,” “expect,” “intend,” “seek,” “strive” and words of similar import, or the negative of such words, identify or signal the presence of forward-looking statements. These statements are not statements of historical fact, and they involve risks and uncertainties that may cause our actual results, performance or financial condition to differ materially from the expectations of future results, performance or financial condition that we express or imply in any forward-looking statement.

 

Factors that could contribute to such differences include, but are not limited to: the competitive nature of the textile industry and the impact of global competition; changes in the trade regulatory environment and governmental policies and legislation; the availability, sourcing and pricing of raw materials; general domestic and international economic and industry conditions in markets where UNIFI competes, including economic and political factors over which UNIFI has no control; changes in consumer spending, customer preferences, fashion trends and end uses for products; the financial condition of UNIFI’s customers; the loss of a significant customer or brand partner; natural disasters, industrial accidents, power or water shortages, extreme weather conditions and other disruptions at one of our facilities; the disruption of operations, global demand, or financial performance as a result of catastrophic or extraordinary events, including epidemics or pandemics such as the recent strain of coronavirus; the success of UNIFI’s strategic business initiatives; the volatility of financial and credit markets; the ability to service indebtedness and fund capital expenditures and strategic business initiatives; the availability of and access to credit on reasonable terms; changes in foreign currency exchange, interest and inflation rates; fluctuations in production costs; the ability to protect intellectual property; the strength and reputation of our brands; employee relations; the ability to attract, retain and motivate key employees; the impact of climate change or environmental, health and safety regulations; and the impact of tax laws, the judicial or administrative interpretations of tax laws and/or changes in such laws or interpretations.

All such factors are difficult to predict, contain uncertainties that may materially affect actual results and may be beyond our control. New factors emerge from time to time, and it is not possible for management to predict all such factors or to assess the impact of each such factor on UNIFI. Any forward-looking statement speaks only as of the date on which such statement is made, and we do not undertake any obligation to update any forward-looking statement to reflect events or circumstances after the date on which such statement is made, except as may be required by federal securities laws. The above and other risks and uncertainties are described in UNIFI’s most recent Annual Report on Form 10-K, and additional risks or uncertainties may be described from time to time in other reports filed by UNIFI with the Securities and Exchange Commission pursuant to the Securities Exchange Act of 1934, as amended.

 

Contact information:

Davis Snyder or Darren Yeun

Alpha IR Group

312-445-2870

UFI@alpha-ir.com

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XML

Document And Entity Information	Dec. 31, 2023
Cover [Abstract]
Document Type	8-K
Amendment Flag	false
Document Period End Date	Dec. 31, 2023
Entity Registrant Name	UNIFI, INC.
Entity Central Index Key	0000100726
Entity Emerging Growth Company	false
Entity File Number	1-10542
Entity Incorporation, State or Country Code	NY
Entity Tax Identification Number	11-2165495
Entity Address, Address Line One	7201 West Friendly Avenue
Entity Address, City or Town	Greensboro
Entity Address, State or Province	NC
Entity Address, Postal Zip Code	27410
City Area Code	336
Local Phone Number	294-4410
Written Communications	false
Soliciting Material	false
Pre-commencement Tender Offer	false
Pre-commencement Issuer Tender Offer	false
Title of 12(b) Security	Common Stock, par value $0.10 per share
Trading Symbol	UFI
Security Exchange Name	NYSE