Business Segment Information

6 Months Ended

Dec. 31, 2023

Segment Reporting [Abstract]

Business Segment Information

13. Business Segment Information

UNIFI defines operating segments as components of the organization for which discrete financial information is available and operating results are evaluated on a regular basis by UNIFI’s principal executive officer, who is the chief operating decision maker (the “CODM”), in order to assess performance and allocate resources. Characteristics of UNIFI which were relied upon in making the determination of reportable segments include the nature of the products sold, the internal organizational structure, the trade policies in the geographic regions in which UNIFI operates, and the information that is regularly reviewed by the CODM for the purpose of assessing performance and allocating resources.

UNIFI's three reportable segments are organized as follows:

•The operations within the Americas Segment exhibit similar long-term economic characteristics and primarily sell into an economic trading zone covered by the USMCA and CAFTA-DR to similar customers utilizing similar methods of distribution. These operations derive revenues primarily from manufacturing synthetic and recycled textile products with sales primarily to yarn manufacturers, knitters, and weavers that produce yarn and/or fabric for the apparel, hosiery, automotive, home furnishings, industrial, medical, and other end-use markets principally in North and Central America. The Americas Segment consists of sales and manufacturing operations in the U.S., El Salvador, and Colombia.

•The Brazil Segment primarily manufactures and sells polyester-based products to knitters and weavers that produce fabric for the apparel, automotive, home furnishings, industrial, and other end-use markets principally in Brazil. The Brazil Segment includes a manufacturing location and sales offices in Brazil.

•The operations within the Asia Segment exhibit similar long-term economic characteristics and sell to similar customers utilizing similar methods of distribution primarily in Asia and Europe. The Asia Segment primarily sources synthetic and recycled textile products from third-party suppliers and sells to yarn manufacturers, knitters, and weavers that produce fabric for the apparel, automotive, home furnishings, industrial, and other end-use markets principally in Asia. The Asia Segment includes sales offices in China, Turkey, and Hong Kong.

UNIFI evaluates the operating performance of its segments based upon Segment Profit, which represents segment gross profit (loss) plus segment depreciation expense. This measurement of segment profit or loss best aligns segment reporting with the current assessments and evaluations performed by, and information provided to, the CODM.

The accounting policies for the segments are consistent with UNIFI’s accounting policies. Intersegment sales are omitted from segment disclosures, as they are (i) insignificant to UNIFI’s segments and eliminated from consolidated reporting and (ii) excluded from segment evaluations performed by the CODM.

Selected financial information is presented below:

	For the Three Months Ended December 31, 2023
	Americas			Brazil		Asia		Total
Net sales	$	80,549		$	26,061	$	30,307	$	136,917
Cost of sales		87,287			22,922		25,072		135,281
Gross (loss) profit		(6,738	)		3,139		5,235		1,636
Segment depreciation expense		5,508			766		—		6,274
Segment (Loss) Profit	$	(1,230	)	$	3,905	$	5,235	$	7,910

	For the Three Months Ended January 1, 2023
	Americas			Brazil		Asia		Total
Net sales	$	85,242		$	25,687	$	25,283	$	136,212
Cost of sales		98,326			24,357		21,529		144,212
Gross (loss) profit		(13,084	)		1,330		3,754		(8,000	)
Segment depreciation expense		5,542			391		—		5,933
Segment (Loss) Profit	$	(7,542	)	$	1,721	$	3,754	$	(2,067	)

	For the Six Months Ended December 31, 2023
	Americas			Brazil		Asia		Total
Net sales	$	162,122		$	55,970	$	57,669	$	275,761
Cost of sales		176,240			50,664		47,796		274,700
Gross (loss) profit		(14,118	)		5,306		9,873		1,061
Segment depreciation expense		11,005			1,606		—		12,611
Segment (Loss) Profit	$	(3,113	)	$	6,912	$	9,873	$	13,672

	For the Six Months Ended January 1, 2023
	Americas			Brazil		Asia		Total
Net sales	$	192,886		$	64,566	$	58,279	$	315,731
Cost of sales		210,839			56,449		49,880		317,168
Gross (loss) profit		(17,953	)		8,117		8,399		(1,437	)
Segment depreciation expense		11,022			861		—		11,883
Segment (Loss) Profit	$	(6,931	)	$	8,978	$	8,399	$	10,446

The reconciliations of segment gross profit (loss) to consolidated loss before income taxes 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	$	(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
Segment 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	)

There have been no material changes in segment assets during fiscal 2024.