Business Segment Information

9 Months Ended

Mar. 31, 2024

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 United States-Mexico-Canada Agreement and the Dominican Republic—Central America Free Trade Agreement 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 (Loss), 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 March 31, 2024
	Americas			Brazil		Asia		Total
Net sales	$	91,130		$	29,573	$	28,293	$	148,996
Cost of sales		94,644			25,736		23,852		144,232
Gross (loss) profit		(3,514	)		3,837		4,441		4,764
Segment depreciation expense		5,473			841		—		6,314
Segment Profit	$	1,959		$	4,678	$	4,441	$	11,078

	For the Three Months Ended April 2, 2023
	Americas		Brazil		Asia		Total
Net sales	$	101,946	$	27,380	$	27,412	$	156,738
Cost of sales		98,788		24,998		23,299		147,085
Gross profit		3,158		2,382		4,113		9,653
Segment depreciation expense		5,574		549		—		6,123
Segment Profit	$	8,732	$	2,931	$	4,113	$	15,776

	For the Nine Months Ended March 31, 2024
	Americas			Brazil		Asia		Total
Net sales	$	253,252		$	85,543	$	85,962	$	424,757
Cost of sales		270,884			76,400		71,648		418,932
Gross (loss) profit		(17,632	)		9,143		14,314		5,825
Segment depreciation expense		16,478			2,447		—		18,925
Segment (Loss) Profit	$	(1,154	)	$	11,590	$	14,314	$	24,750

	For the Nine Months Ended April 2, 2023
	Americas			Brazil		Asia		Total
Net sales	$	294,832		$	91,946	$	85,691	$	472,469
Cost of sales		309,627			81,447		73,179		464,253
Gross (loss) profit		(14,795	)		10,499		12,512		8,216
Segment depreciation expense		16,596			1,410		—		18,006
Segment Profit	$	1,801		$	11,909	$	12,512	$	26,222

The reconciliations of segment gross profit to consolidated loss before income taxes are as follows:

	For the Three Months Ended						For the Nine Months Ended
	March 31, 2024			April 2, 2023			March 31, 2024			April 2, 2023
Americas	$	(3,514	)	$	3,158		$	(17,632	)	$	(14,795	)
Brazil		3,837			2,382			9,143			10,499
Asia		4,441			4,113			14,314			12,512
Segment gross profit		4,764			9,653			5,825			8,216
Selling, general and administrative expenses		11,372			12,063			35,389			35,584
Provision (benefit) for bad debts		179			(56	)		1,259			(38	)
Restructuring costs		—			—			5,101			—
Other operating expense (income), net		139			324			674			(139	)
Operating loss		(6,926	)		(2,678	)		(36,598	)		(27,191	)
Interest income		(432	)		(554	)		(1,710	)		(1,615	)
Interest expense		2,407			2,073			7,505			5,209
Equity in loss (earnings) of unconsolidated affiliates		604			(158	)		311			(539	)
Loss before income taxes	$	(9,505	)	$	(4,039	)	$	(42,704	)	$	(30,246	)

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