UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
☒ |
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the quarterly period ended September 25, 2016
OR
☐ |
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the transition period from to
Commission File Number: 1-10542
UNIFI, INC.
(Exact name of registrant as specified in its charter)
New York |
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11-2165495 |
(State or other jurisdiction of |
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(I.R.S. Employer |
incorporation or organization) |
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Identification No.) |
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7201 West Friendly Avenue |
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Greensboro, North Carolina 27410 |
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(Address of principal executive offices) (Zip Code) |
(336) 294-4410
(Registrant’s telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes ☒ No ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer,” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer |
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Accelerated filer |
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Non-accelerated filer |
☐ (Do not check if a smaller reporting company) |
Smaller reporting company |
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Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒
As of October 27, 2016, there were 18,046,043 shares of the registrant’s common stock, par value $0.10 per share, outstanding.
This Quarterly Report on Form 10-Q contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, that relate to our plans, objectives, estimates and goals. Statements expressing expectations regarding our future, or projections or estimates relating to products, sales, revenues, expenditures, costs or earnings, are typical of such statements and are made under the Private Securities Litigation Reform Act of 1995. Forward-looking statements are based on management’s beliefs, assumptions and expectations about our future economic performance, considering the information currently available to management. The words “believe,” “may,” “could,” “will,” “should,” “would,” “anticipate,” “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; 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:
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the competitive nature of the textile industry and the impact of global competition; |
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changes in the trade regulatory environment and governmental policies and legislation; |
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the availability, sourcing and pricing of raw materials; |
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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; |
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changes in consumer spending, customer preferences, fashion trends and end-uses for products; |
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the financial condition of the Company’s customers; |
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the loss of a significant customer; |
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the success of the Company’s strategic business initiatives; |
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volatility of financial and credit markets; |
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the ability to service indebtedness and fund capital expenditures and strategic initiatives; |
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availability of and access to credit on reasonable terms; |
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changes in currency exchange, interest and inflation rates; |
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fluctuations in production costs; |
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the ability to protect intellectual property; |
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employee relations; |
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the impact of environmental, health and safety regulations; |
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the operating performance of joint ventures and other equity investments; |
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the accurate financial reporting of information from equity method investees; and |
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other factors discussed in “Item 1A. Risk Factors” in the Company’s Annual Report on Form 10-K for the fiscal year ended June 26, 2016 or elsewhere in this report. |
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 law.
In light of all the above considerations, we reiterate that forward-looking statements are not guarantees of future performance, and we caution you not to rely on them as such.
FORM 10-Q
FOR THE THREE MONTHS ENDED SEPTEMBER 25, 2016
TABLE OF CONTENTS
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Page |
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Item 1. |
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1 |
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Condensed Consolidated Balance Sheets as of September 25, 2016 and June 26, 2016 |
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1 |
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2 |
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3 |
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4 |
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5 |
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Item 2. |
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Management’s Discussion and Analysis of Financial Condition and Results of Operations |
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19 |
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Item 3. |
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32 |
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Item 4. |
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33 |
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Item 1. |
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34 |
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Item 1A. |
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34 |
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Item 6. |
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35 |
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36 |
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37 |
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
(amounts in thousands, except share and per share amounts)
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September 25, 2016 |
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June 26, 2016 |
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ASSETS |
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Cash and cash equivalents |
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$ |
20,921 |
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$ |
16,646 |
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Receivables, net |
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82,912 |
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83,422 |
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Inventories |
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110,002 |
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103,532 |
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Income taxes receivable |
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6,312 |
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3,502 |
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Other current assets |
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5,632 |
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4,790 |
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Total current assets |
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225,779 |
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211,892 |
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Property, plant and equipment, net |
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194,261 |
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185,101 |
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Deferred income taxes |
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2,362 |
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2,387 |
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Intangible assets, net |
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3,385 |
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3,741 |
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Investments in unconsolidated affiliates |
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117,239 |
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117,412 |
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Other non-current assets |
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4,947 |
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4,909 |
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Total assets |
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$ |
547,973 |
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$ |
525,442 |
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LIABILITIES AND SHAREHOLDERS’ EQUITY |
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Accounts payable |
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$ |
44,177 |
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$ |
41,593 |
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Accrued expenses |
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17,250 |
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18,474 |
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Income taxes payable |
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2,032 |
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1,455 |
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Current portion of long-term debt |
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13,733 |
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13,786 |
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Total current liabilities |
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77,192 |
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75,308 |
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Long-term debt |
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115,821 |
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107,805 |
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Other long-term liabilities |
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10,515 |
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10,393 |
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Deferred income taxes |
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7,446 |
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4,991 |
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Total liabilities |
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210,974 |
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198,497 |
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Commitments and contingencies |
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Common stock, $0.10 par value (500,000,000 shares authorized; 18,018,445 and 17,847,416 shares outstanding as of September 25, 2016 and June 26, 2016, respectively) |
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1,802 |
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1,785 |
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Capital in excess of par value |
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47,630 |
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45,932 |
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Retained earnings |
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316,468 |
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307,065 |
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Accumulated other comprehensive loss |
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(30,554 |
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(29,751 |
) |
Total Unifi, Inc. shareholders’ equity |
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335,346 |
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325,031 |
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Non-controlling interest |
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1,653 |
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1,914 |
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Total shareholders’ equity |
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336,999 |
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326,945 |
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Total liabilities and shareholders’ equity |
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$ |
547,973 |
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$ |
525,442 |
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See accompanying notes to condensed consolidated financial statements.
1
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
(amounts in thousands, except per share amounts)
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For the Three Months Ended |
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September 25, 2016 |
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September 27, 2015 |
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Net sales |
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$ |
159,969 |
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$ |
162,165 |
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Cost of sales |
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136,422 |
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141,181 |
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Gross profit |
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23,547 |
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20,984 |
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Selling, general and administrative expenses |
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11,410 |
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10,830 |
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(Benefit) provision for bad debts |
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(367 |
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613 |
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Other operating income, net |
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(70 |
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(146 |
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Operating income |
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12,574 |
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9,687 |
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Interest income |
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(146 |
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(163 |
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Interest expense |
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692 |
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984 |
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Equity in earnings of unconsolidated affiliates |
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(840 |
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(2,860 |
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Income before income taxes |
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12,868 |
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11,726 |
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Provision for income taxes |
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3,726 |
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3,940 |
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Net income including non-controlling interest |
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9,142 |
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7,786 |
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Less: net loss attributable to non-controlling interest |
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(261 |
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(239 |
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Net income attributable to Unifi, Inc. |
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$ |
9,403 |
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$ |
8,025 |
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Net income attributable to Unifi, Inc. per common share: |
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Basic |
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$ |
0.52 |
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$ |
0.45 |
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Diluted |
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$ |
0.51 |
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$ |
0.43 |
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See accompanying notes to condensed consolidated financial statements.
2
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
(Unaudited)
(amounts in thousands)
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For the Three Months Ended |
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September 25, 2016 |
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September 27, 2015 |
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Net income including non-controlling interest |
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$ |
9,142 |
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$ |
7,786 |
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Other comprehensive loss: |
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Foreign currency translation adjustments |
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(579 |
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(11,038 |
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Foreign currency translation adjustments for an unconsolidated affiliate |
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(243 |
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(399 |
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Reclassification adjustments on interest rate swap |
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19 |
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19 |
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Other comprehensive loss, net |
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(803 |
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(11,418 |
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Comprehensive income (loss) including non-controlling interest |
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8,339 |
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(3,632 |
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Less: comprehensive loss attributable to non-controlling interest |
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(261 |
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(239 |
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Comprehensive income (loss) attributable to Unifi, Inc. |
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$ |
8,600 |
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$ |
(3,393 |
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See accompanying notes to condensed consolidated financial statements.
3
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(amounts in thousands)
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For the Three Months Ended |
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September 25, 2016 |
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September 27, 2015 |
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Cash and cash equivalents at beginning of year |
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$ |
16,646 |
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$ |
10,013 |
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Operating activities: |
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Net income including non-controlling interest |
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9,142 |
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7,786 |
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Adjustments to reconcile net income including non-controlling interest to net cash provided by operating activities: |
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Equity in earnings of unconsolidated affiliates |
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(840 |
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(2,860 |
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Distributions received from unconsolidated affiliates |
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750 |
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1,947 |
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Depreciation and amortization expense |
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4,737 |
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4,383 |
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Excess tax benefit on stock-based compensation plans |
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(447 |
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— |
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Deferred income taxes |
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2,471 |
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498 |
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Other, net |
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281 |
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381 |
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Changes in assets and liabilities: |
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Receivables, net |
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783 |
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(4,276 |
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Inventories |
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(6,720 |
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(6,298 |
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Other current assets and income taxes receivable |
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(3,267 |
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1,788 |
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Accounts payable and accrued expenses |
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509 |
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(3,474 |
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Income taxes payable |
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588 |
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839 |
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Other, net |
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162 |
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73 |
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Net cash provided by operating activities |
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8,149 |
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787 |
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Investing activities: |
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Capital expenditures |
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(10,135 |
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(15,875 |
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Proceeds from sale of assets |
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28 |
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2,088 |
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Other, net |
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(77 |
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(347 |
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Net cash used in investing activities |
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(10,184 |
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(14,134 |
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Financing activities: |
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Proceeds from ABL Revolver |
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40,200 |
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53,200 |
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Payments on ABL Revolver |
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(31,700 |
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(30,200 |
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Payments on ABL Term Loan |
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(2,375 |
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(2,250 |
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Payments on capital lease obligations |
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(1,073 |
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(924 |
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Common stock repurchased and retired under publicly announced programs |
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— |
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(5,439 |
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Proceeds from stock option exercises |
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1,200 |
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60 |
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Excess tax benefit on stock-based compensation plans |
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447 |
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— |
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Contributions from non-controlling interest |
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— |
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480 |
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Other |
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(341 |
) |
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(471 |
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Net cash provided by financing activities |
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6,358 |
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14,456 |
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Effect of exchange rate changes on cash and cash equivalents |
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(48 |
) |
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(1,168 |
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Net increase (decrease) in cash and cash equivalents |
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4,275 |
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(59 |
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Cash and cash equivalents at end of period |
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$ |
20,921 |
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$ |
9,954 |
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See accompanying notes to condensed consolidated financial statements.
4
Notes to Condensed Consolidated Financial Statements
1. Background
Unifi, Inc., a New York corporation formed in 1969 (together with its subsidiaries, “we,” the “Company” or “Unifi”), is a multi-national manufacturing company that processes and sells high-volume commodity yarns, specialized yarns designed to meet certain customer specifications, and premium value-added (“PVA”) yarns with enhanced performance characteristics. The Company sells yarns made from polyester and nylon to other yarn manufacturers and knitters and weavers that produce fabric for the apparel, hosiery, home furnishings, automotive upholstery, industrial and other end-use markets. The Company’s polyester products include plastic bottle flake, polyester polymer beads (“Chip”), partially oriented yarn (“POY”), and textured, solution and package dyed, twisted, beamed and draw wound yarns. Each yarn product is available in virgin or recycled varieties, where the recycled is made from both pre-consumer yarn waste and post-consumer waste, including plastic bottles. The Company’s nylon products include textured, solution dyed and spandex covered products.
The Company maintains one of the textile industry’s most comprehensive yarn product offerings, and has manufacturing operations in four countries and participates in joint ventures in Israel and the United States. The Company’s principal geographic markets for its products are in North America, Central America, South America and Asia.
In addition to the Company’s operations described above, the Company’s investments include, but are not limited to, (i) a 34% non-controlling partnership interest in Parkdale America, LLC (“PAL”), a producer of cotton and synthetic yarns for sale to the textile industry and apparel market, both foreign and domestic; and (ii) a 60% controlling membership interest in Repreve Renewables, LLC (“Renewables”), an agricultural company focused on the development, production and commercialization of dedicated miscanthus grass for use in the animal bedding, bio-energy and other bio-based product markets.
2. Basis of Presentation; Condensed Notes
The accompanying condensed consolidated financial statements are unaudited and have been prepared in accordance with generally accepted accounting principles in the United States (“GAAP”) for interim financial information. As contemplated by the instructions of the Securities and Exchange Commission (the “SEC”) to Form 10-Q, the following notes have been condensed and, therefore, do not contain all disclosures required in connection with annual financial statements. Reference should be made to the Company’s year-end audited consolidated financial statements and related notes thereto contained in its Annual Report on Form 10-K for the fiscal year ended June 26, 2016 (the “2016 Form 10-K”).
The financial information included in this report has been prepared by the Company, without audit. In the opinion of management, all adjustments, which consist of normal, recurring adjustments, considered necessary for a fair statement of the results for interim periods have been included. Nevertheless, the results shown for interim periods are not necessarily indicative of results to be expected for the full year. The preparation of financial statements in conformity with GAAP requires management to make use of estimates and assumptions that affect the amounts reported and certain financial statement disclosures. Actual results may vary from these estimates.
All dollar and other currency amounts and share amounts, except per share amounts, are presented in thousands (000s), except as otherwise noted.
The fiscal quarter for the Company and its Chinese subsidiary ended on September 25, 2016, the last Sunday in September. The fiscal quarter for the Company’s Brazilian and Colombian subsidiaries ended on September 30, 2016. There were no significant transactions or events that occurred between the Company’s fiscal quarter end and its subsidiaries’ fiscal quarter end. The three months ended September 25, 2016 and September 27, 2015 each consisted of thirteen fiscal weeks.
Reclassifications
Certain reclassifications of prior years’ data have been made to conform to the current year presentation.
As of the fourth quarter of fiscal 2016, the Company updated the composition of its Polyester and Nylon Segments, intending to better reflect downstream sales for the respective product lines. In connection with such update, for the three months ended September 27, 2015, the Company has reclassified net sales and cost of sales amounts for the respective segments, as reflected in Note 20, “Business Segment Information.”
5
Unifi, Inc.
Notes to Condensed Consolidated Financial Statements (Continued)
The Company adopted Accounting Standards Update (“ASU”) 2015-03, Interest—Imputation of Interest (Subtopic 835-30): Simplifying the Presentation of Debt Issuance Costs (“ASU 2015-03”) during the first quarter of fiscal 2017, along with the clarifying guidance in ASU 2015-15, Interest—Imputation of Interest (Subtopic 835-30): Presentation and Subsequent Measurement of Debt Issuance Costs Associated with Line-of-Credit Arrangements—Amendments to SEC Paragraphs Pursuant to Staff Announcement at June 18, 2015 EITF Meeting.
As shown in the table below, unamortized debt issuance costs associated with outstanding debt have been reclassified to conform to the new presentation requirements as of September 25, 2016 as follows:
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June 26, 2016 As Previously Reported |
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Adjustments Due to Adoption of ASU 2015-03 |
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June 26, 2016 As Adjusted |
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Debt issuance costs (within other non-current assets) |
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$ |
1,421 |
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$ |
(1,421 |
) |
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$ |
— |
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Total assets |
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526,863 |
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(1,421 |
) |
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525,442 |
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Long-term debt |
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109,226 |
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|
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(1,421 |
) |
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107,805 |
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Total liabilities |
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199,918 |
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|
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(1,421 |
) |
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198,497 |
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3. Recent Accounting Pronouncements
In August 2016, the Financial Accounting Standards Board issued ASU 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments, to reduce the diversity in practice arising from inconsistent presentation of certain components of the statement of cash flows. The guidance will be effective for the Company’s fiscal 2019.
The Company is evaluating the effect the new guidance will have on its consolidated financial statements and related disclosures.
In the first quarter of fiscal 2017, the Company adopted ASU 2015-16, Simplifying the Accounting for Measurement-Period Adjustments, that eliminates the requirement to restate prior period financial statements for measurement period adjustments. The new guidance requires that the cumulative impact of a measurement period adjustment (including the impact on prior periods) be recognized in the reporting period in which the adjustment is identified. The Company has no measurement period adjustments in the current or comparative periods.
There have been no other newly issued or newly applicable accounting pronouncements that have, or are expected to have, a significant impact on the Company’s financial statements.
4. Receivables, Net
Receivables, net consists of the following:
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September 25, 2016 |
|
|
June 26, 2016 |
|
||
Customer receivables |
|
$ |
84,757 |
|
|
$ |
86,361 |
|
Allowance for uncollectible accounts |
|
|
(2,124 |
) |
|
|
(2,839 |
) |
Reserves for yarn quality claims |
|
|
(982 |
) |
|
|
(795 |
) |
Net customer receivables |
|
|
81,651 |
|
|
|
82,727 |
|
Related party receivables |
|
|
5 |
|
|
|
7 |
|
Other receivables |
|
|
1,256 |
|
|
|
688 |
|
Total receivables, net |
|
$ |
82,912 |
|
|
$ |
83,422 |
|
6
Unifi, Inc.
Notes to Condensed Consolidated Financial Statements (Continued)
The changes in the Company’s allowance for uncollectible accounts are as follows:
|
|
Allowance for Uncollectible Accounts |
|
|
Balance at June 26, 2016 |
|
$ |
(2,839 |
) |
Benefit to costs and expenses |
|
|
367 |
|
Translation activity |
|
|
11 |
|
Deductions |
|
|
337 |
|
Balance at September 25, 2016 |
|
$ |
(2,124 |
) |
5. Inventories
Inventories consists of the following:
|
|
September 25, 2016 |
|
|
June 26, 2016 |
|
||
Raw materials |
|
$ |
39,538 |
|
|
$ |
37,162 |
|
Supplies |
|
|
6,004 |
|
|
|
5,387 |
|
Work in process |
|
|
7,217 |
|
|
|
6,595 |
|
Finished goods |
|
|
58,831 |
|
|
|
55,771 |
|
Gross inventories |
|
|
111,590 |
|
|
|
104,915 |
|
Inventory reserves |
|
|
(1,588 |
) |
|
|
(1,383 |
) |
Total inventories |
|
$ |
110,002 |
|
|
$ |
103,532 |
|
6. Property, Plant and Equipment, Net
Property, plant and equipment, net (“PP&E”) consists of the following:
|
|
September 25, 2016 |
|
|
June 26, 2016 |
|
||
Land |
|
$ |
3,148 |
|
|
$ |
3,154 |
|
Land improvements |
|
|
14,679 |
|
|
|
13,734 |
|
Buildings and improvements |
|
|
147,929 |
|
|
|
145,633 |
|
Assets under capital leases |
|
|
21,495 |
|
|
|
21,525 |
|
Machinery and equipment |
|
|
568,495 |
|
|
|
544,369 |
|
Computers, software and office equipment |
|
|
17,915 |
|
|
|
17,823 |
|
Transportation equipment |
|
|
4,742 |
|
|
|
4,713 |
|
Construction in progress |
|
|
23,322 |
|
|
|
39,695 |
|
Gross property, plant and equipment |
|
|
801,725 |
|
|
|
790,646 |
|
Less: accumulated depreciation |
|
|
(604,301 |
) |
|
|
(602,839 |
) |
Less: accumulated amortization – capital leases |
|
|
(3,163 |
) |
|
|
(2,706 |
) |
Total property, plant and equipment, net |
|
$ |
194,261 |
|
|
$ |
185,101 |
|
Assets under capital leases consists of the following:
|
|
September 25, 2016 |
|
|
June 26, 2016 |
|
||
Machinery and equipment |
|
$ |
14,745 |
|
|
$ |
14,745 |
|
Transportation equipment |
|
|
5,897 |
|
|
|
5,927 |
|
Building improvements |
|
|
853 |
|
|
|
853 |
|
Gross assets under capital leases |
|
$ |
21,495 |
|
|
$ |
21,525 |
|
7
Unifi, Inc.
Notes to Condensed Consolidated Financial Statements (Continued)
Depreciation expense and repairs and maintenance expenses were as follows:
|
|
For the Three Months Ended |
|
|||||
|
|
September 25, 2016 |
|
|
September 27, 2015 |
|
||
Depreciation expense |
|
$ |
4,214 |
|
|
$ |
3,842 |
|
Repairs and maintenance expenses |
|
|
4,240 |
|
|
|
4,496 |
|
7. Intangible Assets, Net
Intangible assets, net consists of the following:
|
|
September 25, 2016 |
|
|
June 26, 2016 |
|
||
Customer lists |
|
$ |
23,615 |
|
|
$ |
23,615 |
|
Non-compete agreements, license, trademarks and other |
|
|
5,189 |
|
|
|
5,184 |
|
Total intangible assets, gross |
|
|
28,804 |
|
|
|
28,799 |
|
Accumulated amortization – customer lists |
|
|
(20,920 |
) |
|
|
(20,665 |
) |
Accumulated amortization – non-compete agreements, license, trademarks and other |
|
|
(4,499 |
) |
|
|
(4,393 |
) |
Total accumulated amortization |
|
|
(25,419 |
) |
|
|
(25,058 |
) |
Total intangible assets, net |
|
$ |
3,385 |
|
|
$ |
3,741 |
|
Total amortization expense for intangible assets was as follows:
|
|
For the Three Months Ended |
|
|||||
|
|
September 25, 2016 |
|
|
September 27, 2015 |
|
||
Total amortization expense |
|
$ |
361 |
|
|
$ |
432 |
|
8. Accrued Expenses
Accrued expenses consists of the following:
|
|
September 25, 2016 |
|
|
June 26, 2016 |
|
||
Payroll and fringe benefits |
|
$ |
8,986 |
|
|
$ |
10,370 |
|
Other |
|
|
8,264 |
|
|
|
8,104 |
|
Total accrued expenses |
|
$ |
17,250 |
|
|
$ |
18,474 |
|
Other consists primarily of accruals for utilities, property taxes, employee-related claims and payments, interest, marketing expenses, freight expenses, rent, deferred incentives and other non-income related taxes.
8
Unifi, Inc.
Notes to Condensed Consolidated Financial Statements (Continued)
Debt Obligations
The following table presents the total balances outstanding for the Company’s debt obligations, their scheduled maturity dates and the weighted average interest rates for borrowings as well as the applicable current portion of long-term debt:
|
|
|
|
Weighted Average |
|
|
|
|
||||||
|
|
Scheduled |
|
Interest Rate as of |
|
|
Principal Amounts as of |
|
||||||
|
|
Maturity Date |
|
September 25, 2016 |
|
|
September 25, 2016 |
|
|
June 26, 2016 |
|
|||
ABL Revolver |
|
March 2020 |
|
|
2.4% |
|
|
$ |
14,700 |
|
|
$ |
6,200 |
|
ABL Term Loan |
|
March 2020 |
|
2.3% (1) |
|
|
|
87,875 |
|
|
|
90,250 |
|
|
Capital lease obligations |
|
(2) |
|
(3) |
|
|
|
14,725 |
|
|
|
15,798 |
|
|
Construction financing |
|
(4) |
|
(4) |
|
|
|
9,464 |
|
|
|
6,629 |
|
|
Renewables’ term loan |
|
August 2022 |
|
|
3.8% |
|
|
|
4,000 |
|
|
|
4,000 |
|
Renewables’ promissory note |
|
September 2020 |
|
|
3.0% |
|
|
|
110 |
|
|
|
135 |
|
Total debt |
|
|
|
|
|
|
|
|
130,874 |
|
|
|
123,012 |
|
Current portion of capital lease obligations |
|
|
|
|
|
|
|
|
(4,207 |
) |
|
|
(4,261 |
) |
Current portion of other long-term debt |
|
|
|
|
|
|
|
|
(9,526 |
) |
|
|
(9,525 |
) |
Unamortized debt issuance costs |
|
|
|
|
|
|
|
|
(1,320 |
) |
|
|
(1,421 |
) |
Total long-term debt |
|
|
|
|
|
|
|
$ |
115,821 |
|
|
$ |
107,805 |
|
(1) |
The weighted average interest rate as of September 25, 2016 for the ABL Term Loan includes the effects of the interest rate swap with a notional balance of $50,000. |
(2) |
Scheduled maturity dates for capital lease obligations range from January 2017 to November 2027. |
(3) |
Interest rates for capital lease obligations range from 2.3% to 4.6%. |
(4) |
Refer to the discussion under the heading “—Construction Financing” below for further information. |
ABL Revolver and ABL Term Loan
On March 26, 2015, the Company and its subsidiary, Unifi Manufacturing, Inc., entered into an Amended and Restated Credit Agreement (as subsequently amended, the “Amended Credit Agreement”) for a $200,000 senior secured credit facility (the “ABL Facility”) with a syndicate of lenders. The ABL Facility consists of a $100,000 revolving credit facility (the “ABL Revolver”) and a term loan that can be reset up to a maximum amount of $100,000, once per fiscal year, if certain conditions are met (the “ABL Term Loan”). Such a principal increase occurred in fiscal 2016. The ABL Facility has a maturity date of March 26, 2020.
Construction Financing
In December 2015, the Company entered into an agreement with a third-party lender that provides for construction-period financing for certain build-to-suit assets. The Company will record project costs to construction in progress and the corresponding liability to construction financing (within long-term debt). The agreement provides for monthly, interest-only payments during the construction period, at a rate of 3.5%, and contains terms customary for a financing of this type. The principal balance of this construction financing arrangement reflects cash paid by the third-party lender for (i) construction in progress and (ii) advances to the Company.
The agreement provides for 60 monthly payments, which will commence at the earlier of the completion of the construction period or July 1, 2017, with an interest rate of 3.2%.
9
Unifi, Inc.
Notes to Condensed Consolidated Financial Statements (Continued)
The following table presents the scheduled maturities of the Company’s outstanding debt obligations for the remainder of fiscal 2017 and the fiscal years thereafter:
|
|
Scheduled Maturities on a Fiscal Year Basis |
|
|||||||||||||||||||||
|
|
2017 |
|
|
2018 |
|
|
2019 |
|
|
2020 |
|
|
2021 |
|
|
Thereafter |
|
||||||
ABL Revolver |
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
14,700 |
|
|
$ |
— |
|
|
$ |
— |
|
ABL Term Loan |
|
|
7,125 |
|
|
|
9,500 |
|
|
|
9,500 |
|
|
|
61,750 |
|
|
|
— |
|
|
|
— |
|
Renewables’ promissory note |
|
|
— |
|
|
|
26 |
|
|
|
27 |
|
|
|
28 |
|
|
|
29 |
|
|
|
— |
|
Renewables’ term loan |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
1,111 |
|
|
|
1,333 |
|
|
|
1,556 |
|
Capital lease obligations |
|
|
3,188 |
|
|
|
4,128 |
|
|
|
4,058 |
|
|
|
2,542 |
|
|
|
171 |
|
|
|
638 |
|
Total (1) |
|
$ |
10,313 |
|
|
$ |
13,654 |
|
|
$ |
13,585 |
|
|
$ |
80,131 |
|
|
$ |
1,533 |
|
|
$ |
2,194 |
|
(1) |
Total excludes $9,464 for the construction financing described above. |
10. Other Long-Term Liabilities
Other long-term liabilities consists of the following:
|
|
September 25, 2016 |
|
|
June 26, 2016 |
|
||
Uncertain tax positions |
|
$ |
4,603 |
|
|
$ |
4,463 |
|
Other |
|
|
5,912 |
|
|
|
5,930 |
|
Total other long-term liabilities |
|
$ |
10,515 |
|
|
$ |
10,393 |
|
Other primarily includes the Company’s unfunded supplemental post-employment plan, certain retiree and post-employment medical and disability liabilities, and deferred rent.
11. Income Taxes
The provision for income taxes was as follows:
|
|
For the Three Months Ended |
|
|||||
|
|
September 25, 2016 |
|
|
September 27, 2015 |
|
||
Provision for income taxes |
|
$ |
3,726 |
|
|
$ |
3,940 |
|
Effective tax rate |
|
|
29.0 |
% |
|
|
33.6 |
% |
The effective tax rates for the periods presented above are lower than the U.S. statutory rate of 35% primarily due to foreign income being taxed at lower rates and a decrease in the valuation allowance for the Company’s investment in PAL. These items were partially offset by losses in tax jurisdictions for which no tax benefit could be recognized and state and local income taxes net of federal benefits.
The Company regularly assesses the outcomes of both completed and ongoing examinations to ensure that the Company’s provision for income taxes is sufficient. Certain returns that remain open to examination have utilized carryforward tax attributes generated in prior tax years, including net operating losses, which could potentially be revised upon examination.
Components of the Company’s deferred tax valuation allowance are as follows:
|
|
September 25, 2016 |
|
|
June 26, 2016 |
|
||
Investment in a former domestic unconsolidated affiliate |
|
$ |
(6,320 |
) |
|
$ |
(6,418 |
) |
Equity-method investment in PAL |
|
|
(1,650 |
) |
|
|
(2,102 |
) |
Other (1) |
|
|
(5,030 |
) |
|
|
(5,030 |
) |
Total deferred tax valuation allowance |
|
$ |
(13,000 |
) |
|
$ |
(13,550 |
) |
(1) |
Other relates primarily to Renewables. |
10
Unifi, Inc.
Notes to Condensed Consolidated Financial Statements (Continued)
12. Shareholders’ Equity
There were no material changes to the composition of shareholders’ equity since June 26, 2016 that are not described in this report.
The following table summarizes the Company’s repurchases and retirements of its common stock under Board-approved stock repurchase programs for the fiscal periods noted.
|
|
Total Number of Shares Repurchased as Part of Publicly Announced Plans or Programs |
|
|
Average Price Paid per Share |
|
|
Maximum Approximate Dollar Value that May Yet Be Repurchased Under Publicly Announced Plans or Programs |
|
|||
Fiscal 2013 |
|
|
1,068 |
|
|
$ |
18.08 |
|
|
|
|
|
Fiscal 2014 |
|
|
1,524 |
|
|
$ |
23.96 |
|
|
|
|
|
Fiscal 2015 |
|
|
349 |
|
|
$ |
29.72 |
|
|
|
|
|
Fiscal 2016 |
|
|
206 |
|
|
$ |
30.13 |
|
|
|
|
|
Fiscal 2017 (through September 25, 2016) |
|
|
— |
|
|
$ |
— |
|
|
|
|
|
Total |
|
|
3,147 |
|
|
|
|
|
|
$ |
27,603 |
|
No dividends were paid during the three months ended September 25, 2016 or in the two most recently completed fiscal years.
13. Stock-Based Compensation
On October 23, 2013, the Company’s shareholders approved the Unifi, Inc. 2013 Incentive Compensation Plan (the “2013 Plan”). The 2013 Plan replaced the 2008 Unifi, Inc. Long-Term Incentive Plan (the “2008 LTIP”). No additional awards can be granted under the 2008 LTIP; however, prior awards outstanding under the 2008 LTIP remain subject to that plan’s provisions. The 2013 Plan authorized the issuance of 1,000 shares of common stock, subject to certain increases in the event outstanding awards under the 2008 LTIP expire, are forfeited or otherwise terminate unexercised.
The following table provides information as of September 25, 2016 with respect to the number of securities remaining available for future issuance under the 2013 Plan:
Authorized under the 2013 Plan |
|
|
1,000 |
|
Plus: Awards expired, forfeited or otherwise terminated unexercised from the 2008 LTIP or the 2013 Plan |
|
|
304 |
|
Less: Awards granted to employees |
|
|
(258 |
) |
Less: Awards granted to non-employee directors |
|
|
(70 |
) |
Available for issuance under the 2013 Plan |
|
|
976 |
|
Stock options
No stock options were granted by the Company during the three months ended September 25, 2016. During the three months ended September 27, 2015, the Company granted stock options to purchase 82 shares of common stock to certain key employees, utilizing terms, vesting provisions and valuation methods consistent with those described in Note 16, “Stock-Based Compensation,” to the consolidated financial statements in the 2016 Form 10-K.
During the three months ended September 25, 2016, 171 stock options were exercised.
Restricted stock units
The Company may issue, from time to time, restricted stock units (“RSUs”) to the Company’s non-employee directors or certain key employees. No RSUs were granted by the Company during the three months ended September 25, 2016 and September 27, 2015. See Note 16, “Stock-Based Compensation,” to the consolidated financial statements in the 2016 Form 10-K for further information regarding the Company’s RSUs.
11
Unifi, Inc.
Notes to Condensed Consolidated Financial Statements (Continued)
14. Fair Value of Financial Instruments and Non-Financial Assets and Liabilities
The Company may use derivative financial instruments such as foreign currency forward contracts or interest rate swaps to reduce its ongoing business exposures to fluctuations in foreign currency exchange rates or interest rates. The Company does not enter into derivative contracts for speculative purposes.
For the three months ended September 25, 2016 and September 27, 2015, there were no significant changes to the Company’s assets and liabilities measured at fair value, and there were no transfers into or out of the levels of the fair value hierarchy.
15. Accumulated Other Comprehensive Loss
The components and the changes in accumulated other comprehensive loss, net of tax, as applicable, consist of the following:
|
|
Foreign Currency Translation Adjustments |
|
|
Reclassification Adjustments on Interest Rate Swap |
|
|
Accumulated Other Comprehensive Loss |
|
|||
Balance at June 26, 2016 |
|
$ |
(29,681 |
) |
|
$ |
(70 |
) |
|
$ |
(29,751 |
) |
Other comprehensive (loss) income, net of tax |
|
|
(822 |
) |
|
|
19 |
|
|
|
(803 |
) |
Balance at September 25, 2016 |
|
$ |
(30,503 |
) |
|
$ |
(51 |
) |
|
$ |
(30,554 |
) |
A summary of the after-tax effects of the components of other comprehensive loss for the three months ended September 25, 2016 and September 27, 2015 is included in the accompanying condensed consolidated statements of comprehensive income (loss). The summary excludes pre-tax and tax amounts, as there are no tax components for the relevant activity.
16. Earnings Per Share
The components of the calculation of earnings per share (“EPS”) are as follows:
|
|
For the Three Months Ended |
|
|||||
|
|
September 25, 2016 |
|
|
September 27, 2015 |
|
||
Net income attributable to Unifi, Inc. |
|
$ |
9,403 |
|
|
$ |
8,025 |
|
Basic weighted average shares |
|
|
17,966 |
|
|
|
17,921 |
|
Net potential common share equivalents – stock options and RSUs |
|
|
387 |
|
|
|
629 |
|
Diluted weighted average shares |
|
|
18,353 |
|
|
|
18,550 |
|
Excluded from diluted weighted average shares: |
|
|
|
|
|
|
|
|
Anti-dilutive common share equivalents |
|
|
155 |
|
|
|
155 |
|
The calculation of EPS is based on the weighted average number of the Company’s common shares outstanding for the applicable period. The calculation of diluted earnings per common share presents the effect of all potential dilutive common shares that were outstanding during the respective period, unless the effect of doing so is anti-dilutive.
17. Investments in Unconsolidated Affiliates and Variable Interest Entities
The Company currently maintains investments in three entities classified as unconsolidated affiliates: PAL; U.N.F. Industries Ltd. (“UNF”); and UNF America LLC (“UNFA”). As of September 25, 2016, the Company’s investment in PAL was $113,538 and the Company’s combined investments in UNF and UNFA were $3,701, each of which is reflected within investments in unconsolidated affiliates in the accompanying condensed consolidated balance sheets.
Parkdale America, LLC
PAL is a limited liability company treated as a partnership for income tax reporting purposes. The Company accounts for its investment in PAL using the equity method of accounting. PAL is subject to price risk related to anticipated fixed-price yarn sales.
12
Unifi, Inc.
Notes to Condensed Consolidated Financial Statements (Continued)
To protect the gross margin of these sales, PAL may enter into cotton futures to manage changes in raw material prices. The derivative instruments used are listed and traded on an exchange and are thus valued using quoted prices classified within Level 1 of the fair value hierarchy. As of September 25, 2016, PAL had no futures contracts designated as cash flow hedges.
The reconciliation between the Company’s share of the underlying equity of PAL and its investment is as follows:
Underlying equity as of September 25, 2016 |
|
$ |
131,794 |
|
Initial excess capital contributions |
|
|
53,363 |
|
Impairment charge recorded by the Company in fiscal 2007 |
|
|
(74,106 |
) |
Anti-trust lawsuit against PAL in which the Company did not participate |
|
|
2,652 |
|
Cotton rebate program adjustments |
|
|
(165 |
) |
Investment as of September 25, 2016 |
|
$ |
113,538 |
|
U.N.F. Industries Ltd.
Raw material and production services for UNF are provided by the Company’s 50% joint venture partner 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.
UNF America LLC
Raw material and production services for UNFA are provided by the Company’s 50% joint venture partner under separate supply and services agreements. UNFA’s fiscal year end is December 31 and it is a limited liability company treated as a partnership for income tax reporting purposes located in Ridgeway, Virginia.
In conjunction with the formation of UNFA, the Company entered into a supply agreement with UNF and UNFA whereby the Company agreed to purchase all of its first quality nylon POY requirements for texturing (subject to certain exceptions) from either UNF or UNFA. The agreement has no stated minimum purchase quantities and pricing is negotiated every six months, based on market rates. As of September 25, 2016, the Company’s open purchase orders related to this agreement were $2,248.
The Company’s raw material purchases under this supply agreement consist of the following:
|
|
For the Three Months Ended |
|
|||||
|
|
September 25, 2016 |
|
|
September 27, 2015 |
|
||
UNF |
|
$ |
778 |
|
|
$ |
1,021 |
|
UNFA |
|
|
5,388 |
|
|
|
7,142 |
|
Total |
|
$ |
6,166 |
|
|
$ |
8,163 |
|
As of September 25, 2016 and June 26, 2016, the Company had combined accounts payable due to UNF and UNFA of $2,462 and $3,231, respectively.
The Company has determined that UNF and UNFA are variable interest entities and that the Company is the primary beneficiary of these entities, based on the terms of the supply agreement. As a result, these entities should be consolidated in the Company’s financial results. As the Company purchases substantially all of the output from UNF and UNFA, the two entities’ balance sheets constitute 3% or less of the Company’s total assets and total liabilities (when excluding reciprocal balances), and because such balances are not expected to comprise a larger portion in the future, the Company has not included the accounts of UNF and UNFA in its consolidated financial statements. The financial results of UNF and UNFA are included in the Company’s financial statements with a one-month lag, using the equity method of accounting and with intercompany profits eliminated in accordance with the Company’s accounting policy. Other than the supply agreement discussed above, the Company does not provide any other commitments or guarantees related to either UNF or UNFA.
13
Unifi, Inc.
Notes to Condensed Consolidated Financial Statements (Continued)
Condensed balance sheet and income statement information for the Company’s unconsolidated affiliates (including reciprocal balances) is presented in the following tables. PAL is defined as significant and its information is separately disclosed. PAL does not meet the criteria for segment reporting.
|
|
As of September 25, 2016 |
|
|||||||||
|
|
PAL |
|
|
Other |
|
|
Total |
|
|||
Current assets |
|
$ |
253,137 |
|
|
$ |
11,215 |
|
|
$ |
264,352 |
|
Noncurrent assets |
|
|
196,580 |
|
|
|
1,030 |
|
|
|
197,610 |
|
Current liabilities |
|
|
59,138 |
|
|
|
3,346 |
|
|
|
62,484 |
|
Noncurrent liabilities |
|
|
2,951 |
|
|
|
— |
|
|
|
2,951 |
|
Shareholders’ equity and capital accounts |
|
|
387,628 |
|
|
|
8,899 |
|
|
|
396,527 |
|
Unifi’s portion of undistributed earnings |
|
|
44,711 |
|
|
|
1,433 |
|
|
|
46,144 |
|
|
|
As of June 26, 2016 |
|
|||||||||
|
|
PAL |
|
|
Other |
|
|
Total |
|
|||
Current assets |
|
$ |
244,197 |
|
|
$ |
12,781 |
|
|
$ |
256,978 |
|
Noncurrent assets |
|
|
203,251 |
|
|
|
1,069 |
|
|
|
204,320 |
|
Current liabilities |
|
|
56,921 |
|
|
|
4,048 |
|
|
|
60,969 |
|
Noncurrent liabilities |
|
|
3,057 |
|
|
|
— |
|
|
|
3,057 |
|
Shareholders’ equity and capital accounts |
|
|
387,470 |
|
|
|
9,802 |
|
|
|
397,272 |
|
|
|
For the Three Months Ended September 25, 2016 |
|
|||||||||
|
|
PAL |
|
|
Other |
|
|
Total |
|
|||
Net sales |
|
$ |
205,900 |
|
|
$ |
6,002 |
|
|
$ |
211,902 |
|
Gross profit |
|
|
5,496 |
|
|
|
1,545 |
|
|
|
7,041 |
|
Income from operations |
|
|
861 |
|
|
|
1,085 |
|
|
|
1,946 |
|
Net income |
|
|
874 |
|
|
|
1,097 |
|
|
|
1,971 |
|
Depreciation and amortization |
|
|
10,442 |
|
|
|
39 |
|
|
|
10,481 |
|
Cash received by PAL under cotton rebate program |
|
|
4,127 |
|
|
|
— |
|
|
|
4,127 |
|
Earnings recognized by PAL for cotton rebate program |
|
|
3,889 |
|
|
|
— |
|
|
|
3,889 |
|
Distributions received |
|
|
— |
|
|
|
750 |
|
|
|
750 |
|
|
|
For the Three Months Ended September 27, 2015 |
|
|||||||||
|
|
PAL |
|
|
Other |
|
|
Total |
|
|||
Net sales |
|
$ |
224,065 |
|
|
$ |
9,349 |
|
|
$ |
233,414 |
|
Gross profit |
|
|
7,387 |
|
|
|
2,330 |
|
|
|
9,717 |
|
Income from operations |
|
|
3,561 |
|
|
|
1,849 |
|
|
|
5,410 |
|
Net income |
|
|
5,729 |
|
|
|
1,858 |
|
|
|
7,587 |
|
Depreciation and amortization |
|
|
9,694 |
|
|
|
37 |
|
|
|
9,731 |
|
Cash received by PAL under cotton rebate program |
|
|
3,184 |
|
|
|
— |
|
|
|
3,184 |
|
Earnings recognized by PAL for cotton rebate program |
|
|
4,354 |
|
|
|
— |
|
|
|
4,354 |
|
Distributions received |
|
|
947 |
|
|
|
1,000 |
|
|
|
1,947 |
|
18. Commitments and Contingencies
Collective Bargaining Agreements
While employees of the Company’s Brazilian operations are unionized, none of the labor force employed by the Company’s domestic or other foreign subsidiaries is currently covered by a collective bargaining agreement.
Environmental
On September 30, 2004, the Company completed its acquisition of polyester filament manufacturing assets located in Kinston, North Carolina from INVISTA S.a.r.l (“Invista”). The land for the Kinston site was leased pursuant to a 99-year ground lease (“Ground Lease”) with E.I. DuPont de Nemours (“DuPont”). Since 1993, DuPont has been investigating and cleaning up the Kinston site under the supervision of the U.S. Environmental Protection Agency (“EPA”) and the North Carolina Department of Environment and
14
Unifi, Inc.
Notes to Condensed Consolidated Financial Statements (Continued)
Natural Resources (“DENR”) pursuant to the Resource Conservation and Recovery Act Corrective Action program. The Corrective Action program requires DuPont to identify all potential areas of environmental concern (“AOCs”), assess the extent of containment at the identified AOCs and clean up the AOCs to comply with applicable regulatory standards. Effective March 20, 2008, the Company entered into a Lease Termination Agreement associated with conveyance of certain assets at the Kinston site to DuPont. This agreement terminated the Ground Lease and relieved the Company of any future responsibility for environmental remediation, other than participation with DuPont, if so called upon, with regard to the Company’s period of operation of the Kinston site which was from 2004 to 2008. However, the Company continues to own a satellite service facility acquired in the 2004 transaction with Invista that has contamination from DuPont’s operations and is monitored by DENR. This site has been remediated by DuPont, and DuPont has received authority from DENR to discontinue remediation, other than natural attenuation. DuPont’s duty to monitor and report to DENR will be transferred to the Company in the future, at which time DuPont must pay the Company for seven years of monitoring and reporting costs and the Company will assume responsibility for any future remediation and monitoring of the site. At this time, the Company has no basis to determine if or when it will have any responsibility or obligation with respect to the AOCs or the extent of any potential liability for the same.
Operating Leases
The Company routinely leases sales and administrative office space, warehousing and distribution centers, manufacturing space, transportation equipment, manufacturing equipment, and other information technology and office equipment from third parties. In addition, Renewables leases farm land for use in growing giant miscanthus.
Other Commitments
The Company has assumed various financial obligations and commitments in the normal course of its operating and financing activities. Financial obligations are considered to represent known future cash payments that the Company is required to make under existing contractual arrangements.
In the course of facilitating the construction of assets (i) in connection with the construction financing arrangement described in Note 9, “Long-Term Debt” and (ii) related to the expansion of the REPREVE® Recycling Center, the Company will incur commitments to equipment vendors and contractors. As of September 25, 2016, such commitments totaled approximately $5,600.
19. Related Party Transactions
For details regarding the nature of certain related party relationships, see Note 25, “Related Party Transactions,” to the consolidated financial statements in the 2016 Form 10-K.
Related party receivables consists of the following:
|
|
September 25, 2016 |
|
|
June 26, 2016 |
|
||
Salem Global Logistics, Inc. |
|
$ |
5 |
|
|
$ |
7 |
|
Total related party receivables (included within receivables, net) |
|
$ |
5 |
|
|
$ |
7 |
|
Related party payables consists of the following:
|
|
September 25, 2016 |
|
|
June 26, 2016 |
|
||
Salem Leasing Corporation |
|
$ |
262 |
|
|
$ |
250 |
|
Total related party payables (included within accounts payable) |
|
$ |
262 |
|
|
$ |
250 |
|
Related party transactions in excess of $120 for the current or prior fiscal year consist of the matters below:
|
|
|
|
For the Three Months Ended |
|
|||||
Affiliated Entity |
|
Transaction Type |
|
September 25, 2016 |
|
|
September 27, 2015 |
|
||
Salem Leasing Corporation |
|
Transportation equipment costs |
|
$ |
978 |
|
|
$ |
945 |
|
Salem Global Logistics, Inc. |
|
Freight service income |
|
|
21 |
|
|
|
62 |
|
15
Unifi, Inc.
Notes to Condensed Consolidated Financial Statements (Continued)
The balance of a capital lease obligation with Salem Leasing Corporation as of September 25, 2016 and June 26, 2016 was $999 and $1,015, respectively.
Mr. William J. Armfield, IV, a member of the Board of Directors (the “Board”) of Unifi until his passing in July 2016, was a director and the Non-Executive Chairman of, and held an indirect minority equity interest in Cupron, Inc. (“Cupron”). There was no significant activity between Cupron and the Company in July 2016, and therefore, any such transactions or balances in the current and comparative prior periods are omitted from current disclosures.
During the first quarter of fiscal 2017, the Company paid $126 to Mr. William L. Jasper, the Company’s former Chairman and Chief Executive Officer, for consulting fees. As of September 25, 2016, $500 of consulting fees were payable to Mr. Jasper subject to his continued compliance with his consulting agreement with the Company.
20. Business Segment Information
The Company has three reportable segments. Operations and revenues for each segment are described below:
|
• |
The Polyester Segment manufactures plastic bottle flake, Chip and POY, along with textured, solution and package dyed, twisted, beamed and draw wound yarns (both virgin and recycled), with sales primarily to other yarn manufacturers and knitters and weavers that produce yarn and/or fabric for the apparel, hosiery, automotive upholstery, home furnishings, industrial and other end‑use markets. The Polyester Segment consists of sales and manufacturing operations in the United States and El Salvador. |
|
• |
The Nylon Segment manufactures textured nylon yarns and spandex covered yarns, with sales to knitters and weavers that produce fabric primarily for the apparel and hosiery markets. The Nylon Segment consists of sales and manufacturing operations in the United States and Colombia. |
|
• |
The International Segment’s products primarily include textured polyester and various types of resale yarns and staple fiber (both virgin and recycled). The International Segment sells its yarns and staple fiber to knitters and weavers that produce fabric for the apparel, automotive upholstery, home furnishings, industrial and other end-use markets primarily in the South American and Asian regions. The International Segment includes a manufacturing location and sales offices in Brazil and a sales office in China. |
In addition to the Company’s reportable segments, the selected financial information presented below includes an All Other category. All Other consists primarily of Renewables (an operating segment that does not meet quantitative thresholds for reporting) and for-hire transportation services. Revenue for Renewables is primarily derived from (i) facilitating the use of miscanthus grass as bio-fuel through service agreements and (ii) delivering harvested miscanthus grass to poultry producers for animal bedding. For-hire transportation services revenue is derived from performing common carrier services utilizing the Company’s fleet of transportation equipment.
The operations within All Other (i) are not subject to review by the chief operating decision maker at a level consistent with the Company’s other operations, (ii) are not regularly evaluated using the same metrics applied to the Company’s other operations and (iii) do not qualify for aggregation with an existing reportable segment. Therefore, such operations are excluded from reportable segments.
The Company 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 chief operating decision maker.
The accounting policies for the segments are consistent with the Company’s accounting policies. Intersegment sales are omitted from the below financial information, as they are (i) insignificant to the Company’s segments and consolidated operations and (ii) excluded from segment evaluations performed by the chief operating decision maker.
16
Unifi, Inc.
Notes to Condensed Consolidated Financial Statements (Continued)
Selected financial information is presented below. As described in Note 2, “Basis of Presentation; Condensed Notes,” certain amounts previously reported for the Polyester and Nylon Segments for the three months ended September 27, 2015 have been revised to match the current presentation.
|
|
For the Three Months Ended September 25, 2016 |
|
|||||||||||||||||
|
|
Polyester |
|
|
Nylon |
|
|
International |
|
|
All Other |
|
|
Total |
|
|||||
Net sales |
|
$ |
84,685 |
|
|
$ |
28,495 |
|
|
$ |
45,344 |
|
|
$ |
1,445 |
|
|
$ |
159,969 |
|
Cost of sales |
|
|
76,235 |
|
|
|
25,358 |
|
|
|
33,074 |
|
|
|
1,755 |
|
|
|
136,422 |
|
Gross profit (loss) |
|
|
8,450 |
|
|
|
3,137 |
|
|
|
12,270 |
|
|
|
(310 |
) |
|
|
23,547 |
|
Segment depreciation expense |
|
|
3,108 |
|
|
|
510 |
|
|
|
246 |
|
|
|
252 |
|
|
|
4,116 |
|
Segment Profit (Loss) |
|
$ |
11,558 |
|
|
$ |
3,647 |
|
|
$ |
12,516 |
|
|
$ |
(58 |
) |
|
$ |
27,663 |
|
|
|
For the Three Months Ended September 27, 2015 |
|
|||||||||||||||||
|
|
Polyester |
|
|
Nylon |
|
|
International |
|
|
All Other |
|
|
Total |
|
|||||
Net sales |
|
$ |
94,606 |
|
|
$ |
36,638 |
|
|
$ |
29,371 |
|
|
$ |
1,550 |
|
|
$ |
162,165 |
|
Cost of sales |
|
|
85,008 |
|
|
|
30,765 |
|
|
|
23,780 |
|
|
|
1,628 |
|
|
|
141,181 |
|
Gross profit (loss) |
|
|
9,598 |
|
|
|
5,873 |
|
|
|
5,591 |
|
|
|
(78 |
) |
|
|
20,984 |
|
Segment depreciation expense |
|
|
2,851 |
|
|
|
478 |
|
|
|
221 |
|
|
|
152 |
|
|
|
3,702 |
|
Segment Profit |
|
$ |
12,449 |
|
|
$ |
6,351 |
|
|
$ |
5,812 |
|
|
$ |
74 |
|
|
$ |
24,686 |
|
The reconciliations of segment gross profit to consolidated income before income taxes are as follows:
|
|
For the Three Months Ended |
|
|||||
|
|
September 25, 2016 |
|
|
September 27, 2015 |
|
||
Polyester |
|
$ |
8,450 |
|
|
$ |
9,598 |
|
Nylon |
|
|
3,137 |
|
|
|
5,873 |
|
International |
|
|
12,270 |
|
|
|
5,591 |
|
All Other |
|
|
(310 |
) |
|
|
(78 |
) |
Segment gross profit |
|
|
23,547 |
|
|
|
20,984 |
|
Selling, general and administrative expenses |
|
|
11,410 |
|
|
|
10,830 |
|
(Benefit) provision for bad debts |
|
|
(367 |
) |
|
|
613 |
|
Other operating income, net |
|
|
(70 |
) |
|
|
(146 |
) |
Operating income |
|
|
12,574 |
|
|
|
9,687 |
|
Interest income |
|
|
(146 |
) |
|
|
(163 |
) |
Interest expense |
|
|
692 |
|
|
|
984 |
|
Equity in earnings of unconsolidated affiliates |
|
|
(840 |
) |
|
|
(2,860 |
) |
Income before income taxes |
|
$ |
12,868 |
|
|
$ |
11,726 |
|
The reconciliations of segment capital expenditures to consolidated capital expenditures are as follows:
|
|
For the Three Months Ended |
|
|||||
|
|
September 25, 2016 |
|
|
September 27, 2015 |
|
||
Polyester |
|
$ |
7,875 |
|
|
$ |
13,973 |
|
Nylon |
|
|
242 |
|
|
|
563 |
|
International |
|
|
1,937 |
|
|
|
512 |
|
Segment capital expenditures |
|
|
10,054 |
|
|
|
15,048 |
|
Other capital expenditures |
|
|
81 |
|
|
|
827 |
|
Capital expenditures |
|
$ |
10,135 |
|
|
$ |
15,875 |
|
17
Unifi, Inc.
Notes to Condensed Consolidated Financial Statements (Continued)
The reconciliations of segment total assets to consolidated total assets are as follows:
|
|
September 25, 2016 |
|
|
June 26, 2016 |
|
||
Polyester |
|
$ |
256,130 |
|
|
$ |
243,105 |
|
Nylon |
|
|
62,358 |
|
|
|
63,141 |
|
International |
|
|
81,309 |
|
|
|
73,650 |
|
Segment total assets |
|
|
399,797 |
|
|
|
379,896 |
|
Other current assets |
|
|
9,874 |
|
|
|
6,674 |
|
Other PP&E |
|
|
16,245 |
|
|
|
16,597 |
|
Other non-current assets |
|
|
4,818 |
|
|
|
4,863 |
|
Investments in unconsolidated affiliates |
|
|
117,239 |
|
|
|
117,412 |
|
Total assets |
|
$ |
547,973 |
|
|
$ |
525,442 |
|
21. Supplemental Cash Flow Information
Cash payments for interest and taxes consist of the following:
|
|
For the Three Months Ended |
|
|||||
|
|
September 25, 2016 |
|
|
September 27, 2015 |
|
||
Interest, net of capitalized interest of $223 and $76, respectively |
|
$ |
641 |
|
|
$ |
762 |
|
Income taxes, net of refunds |
|
|
2,909 |
|
|
|
1,250 |
|
Cash payments for taxes shown above consist primarily of income and withholding tax payments made by the Company in both U.S. and foreign jurisdictions.
Non-Cash Investing and Financing Activities
As of September 25, 2016 and June 26, 2016, $4,841 and $4,197, respectively, were included in accounts payable for unpaid capital expenditures. As of September 27, 2015 and June 28, 2015, $895 and $1,726, respectively, were included in accounts payable for unpaid capital expenditures.
During the three months ended September 25, 2016, the Company recorded $2,835 to construction in progress and long-term debt, in connection with the construction financing arrangement described under the heading “—Construction Financing” in Note 9, “Long-Term Debt.”
During August 2015, the Company utilized $1,390 of funds held by a qualified intermediary to purchase certain land and building assets.
During the three months ended September 27, 2015, the Company entered into capital leases with an aggregate present value of $4,154.
18
The following is management’s discussion and analysis of certain significant factors that have affected the Company’s operations, and material changes in financial condition, during the periods included in the accompanying condensed consolidated financial statements included in this report. A reference to a “note” in this section refers to the accompanying notes to condensed consolidated financial statements. A reference to the “current period” refers to the three-month period ended September 25, 2016, while a reference to the “prior period” refers to the three-month period ended September 27, 2015; and such references may be accompanied with certain phrases for added clarity.
Our discussions in this Item 2 are based upon the more detailed discussions about our business, operations and financial condition included in the 2016 Form 10-K. These discussions focus on our results during, or as of, the first quarter of fiscal 2017, and the comparable period of fiscal 2016, and, to the extent applicable, any material changes from the information discussed in the 2016 Form 10-K or other important intervening developments or information. These discussions should be read in conjunction with the 2016 Form 10-K for more detailed and background information.
Overview and Significant General Matters
The Company’s recent successful performance reflects its core strategic focus: producing the highest-quality innovative and sustainable products for customers around the world. This strategic focus includes a number of supporting pillars, which include: continuously improving all operational and business processes; enriching the product mix by growing sales of higher-margin PVA products through all market opportunities; and deriving value from sustainability-based initiatives, including polyester and nylon recycling. The Company remains committed to these strategic initiatives, which it believes will increase profitability and generate improved cash flows from operations.
The Company has three reportable segments for its operations – the Polyester Segment, the Nylon Segment and the International Segment – as well as certain ancillary operations that include Renewables, for-hire transportation services and consulting services, which comprise an All Other category. The ancillary operations classified within All Other are insignificant for all periods presented; therefore, the Company’s discussion and analysis of those activities is generally limited to their impact on consolidated results, where appropriate.
Significant highlights for the current period include the following items, each of which is outlined in more detail below:
|
• |
The Company’s global strategy and focus on PVA products drove favorable operating results compared to the prior period: |
|
o |
Gross profit grew more than $2,500, or 12%; |
|
o |
Gross margin increased to 14.7% compared to 12.9%; |
|
o |
Operating income increased approximately $2,900, or 30%; and |
|
o |
Net income increased approximately $1,400, or 17%, despite lower earnings from PAL. |
|
• |
Opened state-of-the-art REPREVE® Bottle Processing Center at the Company’s existing facility in Reidsville, North Carolina. |
Key Performance Indicators and Non-GAAP Financial Measures
The Company continuously reviews performance indicators to measure its success. The following are the key indicators management uses to assess performance of the Company’s business, including certain GAAP and non-GAAP financial measures:
|
• |
sales volume for the Company and for each of its reportable segments; |
|
• |
unit conversion margin, which represents unit net sales price less unit raw material costs, for the Company and for each of its reportable segments; |
|
• |
gross profit and gross margin for the Company and for each of its reportable segments; |
|
• |
net income and EPS for the Company; |
|
• |
Segment Profit (Loss), which represents segment gross profit (loss) plus segment depreciation expense; |
|
• |
working capital, which represents current assets less current liabilities; |
19
|
• |
Adjusted EBITDA, which represents EBITDA adjusted to exclude equity in earnings of PAL and certain other adjustments necessary to understand and compare the underlying results of the Company; |
|
• |
Adjusted Net Income, which excludes certain amounts which management believes do not reflect the ongoing operations and performance of the Company. Adjusted net income represents net income attributable to Unifi, Inc. calculated under GAAP, adjusted to exclude the approximate after-tax impact of certain income or expense items (as well as specific impacts to the provision for income taxes) necessary to understand and compare the underlying results of the Company; |
|
• |
Adjusted EPS, which represents Adjusted Net Income divided by the Company’s basic weighted average common shares outstanding; and |
|
• |
Adjusted Working Capital represents receivables plus inventory, less accounts payable and accrued expenses, which is an indicator of the Company’s production efficiency and ability to manage its inventory and receivables. |
EBITDA, Adjusted EBITDA, Adjusted Net Income, Adjusted EPS and Adjusted Working Capital (collectively, 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. When applicable, management’s discussion and analysis includes specific consideration for items that comprise the reconciliations of 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.
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 cash expenditures on interest are, by definition, available to pay interest, and tax expense is inversely correlated to interest expense, because tax expense decreases as deductible interest expense increases; and depreciation and amortization are non-cash charges. Equity in earnings of PAL is excluded from Adjusted EBITDA because such earnings do not reflect our operating performance.
Management uses Adjusted Net 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.
Additionally, EBITDA, Adjusted EBITDA, Adjusted Net Income and Adjusted EPS aim to exclude the impact of the non-controlling interest in Renewables, while the consolidated amounts for Renewables are required to be included in the Company’s financial amounts reported under GAAP.
20
EBITDA and Adjusted EBITDA
The reconciliations of the amounts reported under GAAP for net income attributable to Unifi, Inc. to EBITDA and Adjusted EBITDA are as follows. Certain line items below are not reflective of consolidated amounts due to the impact of the non-controlling interest in Renewables, and any such differences are insignificant.
|
|
For the Three Months Ended |
|
|||||
|
|
September 25, 2016 |
|
|
September 27, 2015 |
|
||
Net income attributable to Unifi, Inc. |
|
$ |
9,403 |
|
|
$ |
8,025 |
|
Interest expense, net |
|
|
530 |
|
|
|
821 |
|
Provision for income taxes |
|
|
3,726 |
|
|
|
3,940 |
|
Depreciation and amortization expense |
|
|
4,566 |
|
|
|
4,241 |
|
EBITDA |
|
|
18,225 |
|
|
|
17,027 |
|
|
|
|
|
|
|
|
|
|
Equity in earnings of Parkdale America, LLC |
|
|
(314 |
) |
|
|
(1,965 |
) |
EBITDA excluding Parkdale America, LLC |
|
|
17,911 |
|
|
|
15,062 |
|
|
|
|
|
|
|
|
|
|
Other adjustments |
|
|
— |
|
|
|
— |
|
Adjusted EBITDA |
|
$ |
17,911 |
|
|
$ |
15,062 |
|
For the periods presented, there are no other adjustments necessary to reconcile Adjusted EBITDA. However, such adjustments may be presented in future periods when applicable.
Adjusted Net Income
For the current period and the prior period, there are no adjustments necessary to reconcile net income attributable to Unifi, Inc. to Adjusted Net Income. However, such adjustments may be presented in future periods when applicable.
Working Capital and Adjusted Working Capital
See the discussion under the heading “Working Capital” within “Liquidity and Capital Resources” below.
21
First Quarter of Fiscal 2017 Compared to First Quarter of Fiscal 2016
Consolidated Overview
The components of net income attributable to Unifi, Inc., each component as a percentage of net sales, and the percentage increase or decrease over the prior period amounts are presented in the table below.
|
|
For the Three Months Ended |
|
|
|
|
|
|||||||||||||
|
|
September 25, 2016 |
|
|
September 27, 2015 |
|
|
|
|
|
||||||||||
|
|
|
|
|
|
% of Net Sales |
|
|
|
|
|
|
% of Net Sales |
|
|
% Change |
|
|||
Net sales |
|
$ |
159,969 |
|
|
|
100.0 |
|
|
$ |
162,165 |
|
|
|
100.0 |
|
|
|
(1.4 |
) |
Cost of sales |
|
|
136,422 |
|
|
|
85.3 |
|
|
|
141,181 |
|
|
|
87.1 |
|
|
|
(3.4 |
) |
Gross profit |
|
|
23,547 |
|
|
|
14.7 |
|
|
|
20,984 |
|
|
|
12.9 |
|
|
|
12.2 |
|
Selling, general and administrative expenses |
|
|
11,410 |
|
|
|
7.1 |
|
|
|
10,830 |
|
|
|
6.7 |
|
|
|
5.4 |
|
(Benefit) provision for bad debts |
|
|
(367 |
) |
|
|
(0.2 |
) |
|
|
613 |
|
|
|
0.3 |
|
|
|
(159.9 |
) |
Other operating income, net |
|
|
(70 |
) |
|
|
— |
|
|
|
(146 |
) |
|
|
(0.1 |
) |
|
|
(52.1 |
) |
Operating income |
|
|
12,574 |
|
|
|
7.8 |
|
|
|
9,687 |
|
|
|
6.0 |
|
|
|
29.8 |
|
Interest expense, net |
|
|
546 |
|
|
|
0.3 |
|
|
|
821 |
|
|
|
0.5 |
|
|
|
(33.5 |
) |
Equity in earnings of unconsolidated affiliates |
|
|
(840 |
) |
|
|
(0.5 |
) |
|
|
(2,860 |
) |
|
|
(1.7 |
) |
|
|
(70.6 |
) |
Income before income taxes |
|
|
12,868 |
|
|
|
8.0 |
|
|
|
11,726 |
|
|
|
7.2 |
|
|
|
9.7 |
|
Provision for income taxes |
|
|
3,726 |
|
|
|
2.3 |
|
|
|
3,940 |
|
|
|
2.4 |
|
|
|
(5.4 |
) |
Net income including non-controlling interest |
|
|
9,142 |
|
|
|
5.7 |
|
|
|
7,786 |
|
|
|
4.8 |
|
|
|
17.4 |
|
Less: net loss attributable to non-controlling interest |
|
|
(261 |
) |
|
|
(0.2 |
) |
|
|
(239 |
) |
|
|
(0.1 |
) |
|
|
9.2 |
|
Net income attributable to Unifi, Inc. |
|
$ |
9,403 |
|
|
|
5.9 |
|
|
$ |
8,025 |
|
|
|
4.9 |
|
|
|
17.2 |
|
Consolidated Net Sales
Consolidated net sales for the current period decreased by $2,196, or 1.4%, as compared to the prior period, primarily due to the impact of lower raw material costs (of approximately 15% for virgin polyester raw materials), partially offset by strong PVA sales from our international operations.
Consolidated sales volumes increased 11%, attributable to continued growth in sales of PVA products in the International Segment. In Brazil, we have benefited from year-over-year growth in the synthetic yarn market coupled with a favorable tariff and exchange rate environment for domestically produced yarn. In Asia, the business has grown as global brands have looked to us to provide consistent PVA products to support their global supply chain. The increase in International Segment sales volumes was partially offset by softness in the retail markets covered by the North American Free Trade Agreement (“NAFTA”) and the Dominican Republic—Central America Free Trade Agreement (“CAFTA—DR”), adversely impacting the Polyester and Nylon Segments.
Consolidated sales pricing decreased 12%, primarily attributable to (i) lower pricing in the Polyester Segment driven by lower raw material costs and (ii) a change in the sales mix, partially offset by (a) net favorable foreign currency translation of approximately $1,200 and (b) improved pricing in connection with increased PVA product sales. PVA products at the end of fiscal 2016 comprised 35% of net sales and the Company is on pace to achieve the goal of 10% to 15% PVA growth in fiscal 2017.
Consolidated Gross Profit
Gross profit for the current period increased by $2,563, or 12.2%, as compared to the prior period, primarily due to (i) the increase in PVA product sales volumes in the International Segment, (ii) an improvement in per-unit costs for our subsidiary in Brazil due to increased volumes for its manufactured products and (iii) net favorable foreign currency translation. These benefits were partially offset as gross profit for the Polyester and Nylon Segments decreased due to lower sales volumes and start-up costs associated with the new REPREVE® Bottle Processing Center in Reidsville, North Carolina.
22
Further details regarding the changes in net sales and gross profit, by reportable segment, follow.
Polyester Segment
The components of Segment Profit, each component as a percentage of net sales, and the percentage increase or decrease over the prior period amounts for the Polyester Segment are as follows:
|
|
For the Three Months Ended |
|
|
|
|
|
|||||||||||||
|
|
September 25, 2016 |
|
|
September 27, 2015 |
|
|
|
|
|
||||||||||
|
|
|
|
|
|
% of Net Sales |
|
|
|
|
|
|
% of Net Sales |
|
|
% Change |
|
|||
Net sales |
|
$ |
84,685 |
|
|
|
100.0 |
|
|
$ |
94,606 |
|
|
|
100.0 |
|
|
|
(10.5 |
) |
Cost of sales |
|
|
76,235 |
|
|
|
90.0 |
|
|
|
85,008 |
|
|
|
89.9 |
|
|
|
(10.3 |
) |
Gross profit |
|
|
8,450 |
|
|
|
10.0 |
|
|
|
9,598 |
|
|
|
10.1 |
|
|
|
(12.0 |
) |
Depreciation expense |
|
|
3,108 |
|
|
|
3.7 |
|
|
|
2,851 |
|
|
|
3.0 |
|
|
|
9.0 |
|
Segment Profit |
|
$ |
11,558 |
|
|
|
13.7 |
|
|
$ |
12,449 |
|
|
|
13.1 |
|
|
|
(7.2 |
) |
The change in net sales for the Polyester Segment is as follows:
Net sales for the prior period |
|
$ |
94,606 |
|
Decrease in average selling price and change in sales mix |
|
|
(6,102 |
) |
Decrease in sales volumes |
|
|
(3,819 |
) |
Net sales for the current period |
|
$ |
84,685 |
|
The decrease in net sales for the Polyester Segment was attributable to lower sales prices as a result of (i) lower raw material costs (approximately 15% for virgin polyester raw materials), and (ii) an unfavorable change in sales mix due to lower sales volumes of higher-priced textured, dyed, and beamed yarns and higher sales volumes of lower-priced POY and Chip. Decreased sales volumes were primarily attributable to softness in certain sectors of the retail market, characterized by excess inventory in the supply chain due to (a) a warmer 2015/2016 winter season and (b) a shift in inventory holding patterns from retailers to brands.
The change in Segment Profit for the Polyester Segment is as follows:
Segment Profit for the prior period |
|
$ |
12,449 |
|
Decrease in sales volumes |
|
|
(501 |
) |
Net decrease in underlying margins |
|
|
(390 |
) |
Segment Profit for the current period |
|
$ |
11,558 |
|
The decrease in Segment Profit for the Polyester Segment was attributable to (i) lower sales volumes and (ii) higher manufacturing costs primarily associated with start-up costs for the new REPREVE® Bottle Processing Center in Reidsville, North Carolina.
Polyester Segment net sales and Segment Profit, as a percentage of total consolidated amounts, were 52.9% and 41.8%, respectively, for the current period, compared to 58.3% and 50.4%, respectively, for the prior period.
Nylon Segment
The components of Segment Profit, each component as a percentage of net sales, and the percentage increase or decrease over the prior period amounts for the Nylon Segment are as follows:
|
|
For the Three Months Ended |
|
|
|
|
|
|||||||||||||
|
|
September 25, 2016 |
|
|
September 27, 2015 |
|
|
|
|
|
||||||||||
|
|
|
|
|
|
% of Net Sales |
|
|
|
|
|
|
% of Net Sales |
|
|
% Change |
|
|||
Net sales |
|
$ |
28,495 |
|
|
|
100.0 |
|
|
$ |
36,638 |
|
|
|
100.0 |
|
|
|
(22.2 |
) |
Cost of sales |
|
|
25,358 |
|
|
|
89.0 |
|
|
|
30,765 |
|
|
|
84.0 |
|
|
|
(17.6 |
) |
Gross profit |
|
|
3,137 |
|
|
|
11.0 |
|
|
|
5,873 |
|
|
|
16.0 |
|
|
|
(46.6 |
) |
Depreciation expense |
|
|
510 |
|
|
|
1.8 |
|
|
|
478 |
|
|
|
1.3 |
|
|
|
6.7 |
|
Segment Profit |
|
$ |
3,647 |
|
|
|
12.8 |
|
|
$ |
6,351 |
|
|
|
17.3 |
|
|
|
(42.6 |
) |
23
The change in net sales for the Nylon Segment is as follows:
Net sales for the prior period |
|
$ |
36,638 |
|
Decrease in sales volumes |
|
|
(6,982 |
) |
Decrease in average selling price and change in sales mix |
|
|
(1,161 |
) |
Net sales for the current period |
|
$ |
28,495 |
|
The decrease in net sales for the Nylon Segment was attributable to (i) lower sales volumes as a result of retail sales weakness and inventory adjustments at a major customer, along with softness in the retail markets supported by NAFTA and CAFTA—DR and (ii) the transition of certain PVA programs from the Nylon Segment to the International Segment, in accordance with our global strategy. The shift of PVA sales also adversely impacted the average selling price and sales mix.
The change in Segment Profit for the Nylon Segment is as follows:
Segment Profit for the prior period |
|
$ |
6,351 |
|
Decrease in underlying margins |
|
|
(1,494 |
) |
Decrease in sales volumes |
|
|
(1,210 |
) |
Segment Profit for the current period |
|
$ |
3,647 |
|
The decrease in Segment Profit for the Nylon Segment was attributable to (i) the shift of higher-margin PVA sales to the International Segment, (ii) lower sales volumes and (iii) higher unit manufacturing costs due to decreased production activity.
Nylon Segment net sales and Segment Profit, as a percentage of total consolidated amounts, were 17.8% and 13.2%, respectively, for the current period, compared to 22.6% and 25.7%, respectively, for the prior period.
International Segment
The components of Segment Profit, each component as a percentage of net sales, and the percentage increase or decrease over the prior period amounts for the International Segment are as follows:
|
|
For the Three Months Ended |
|
|
|
|
|
|||||||||||||
|
|
September 25, 2016 |
|
|
September 27, 2015 |
|
|
|
|
|
||||||||||
|
|
|
|
|
|
% of Net Sales |
|
|
|
|
|
|
% of Net Sales |
|
|
% Change |
|
|||
Net sales |
|
$ |
45,344 |
|
|
|
100.0 |
|
|
$ |
29,371 |
|
|
|
100.0 |
|
|
|
54.4 |
|
Cost of sales |
|
|
33,074 |
|
|
|
72.9 |
|
|
|
23,780 |
|
|
|
81.0 |
|
|
|
39.1 |
|
Gross profit |
|
|
12,270 |
|
|
|
27.1 |
|
|
|
5,591 |
|
|
|
19.0 |
|
|
|
119.5 |
|
Depreciation expense |
|
|
246 |
|
|
|
0.5 |
|
|
|
221 |
|
|
|
0.8 |
|
|
|
11.3 |
|
Segment Profit |
|
$ |
12,516 |
|
|
|
27.6 |
|
|
$ |
5,812 |
|
|
|
19.8 |
|
|
|
115.3 |
|
The change in net sales for the International Segment is as follows:
Net sales for the prior period |
|
$ |
29,371 |
|
Increase in sales volumes |
|
|
16,491 |
|
Net favorable foreign currency translation effects (Brazilian Real and Chinese Renminbi) |
|
|
1,217 |
|
Decrease in average selling price and change in sales mix |
|
|
(1,735 |
) |
Net sales for the current period |
|
$ |
45,344 |
|
The increase in net sales for the International Segment was attributable to (i) higher sales volumes of manufactured product at our Brazilian subsidiary due to increased demand for synthetic yarns, particularly air-covered PVA products for use in applications such as stretch denim, (ii) higher sales volumes at our Chinese subsidiary, which benefited from growth of PVA sales and the transition of certain programs from the Nylon Segment, and (iii) approximately $1,750 of favorable foreign currency translation due to the strengthening of the Brazilian Real (using a weighted average exchange rate of 3.24 Real/U.S. Dollar and 3.52 Real/U.S. Dollar for the current period and the prior period, respectively). These benefits were partially offset by (a) a decrease in the average selling price in China due to a greater mix of lower-priced staple filament sales to several spinners in support of a large apparel program and (b) unfavorable foreign currency translation due to the Chinese Renminbi.
24
The change in Segment Profit for the International Segment is as follows:
Segment Profit for the prior period |
|
$ |
5,812 |
|
Improvements in underlying margins |
|
|
3,257 |
|
Increase in sales volumes |
|
|
3,250 |
|
Net favorable foreign currency translation effects (Brazilian Real and Chinese Renminbi) |
|
|
197 |
|
Segment Profit for the current period |
|
$ |
12,516 |
|
The increase in Segment Profit for the International Segment was attributable to (i) improved margins in Brazil based on a greater mix of higher-margin manufactured products (including PVA products) and improved cost efficiency associated with increased production volumes, (ii) improved margins in Asia due to the growth of PVA programs in Asia, and (iii) net favorable foreign currency translation effects due to the strengthening of the Brazilian Real versus the U.S. Dollar.
International Segment net sales and Segment Profit, as a percentage of total consolidated amounts, were 28.3% and 45.2%, respectively, for the current period, compared to 18.1% and 23.5%, respectively, for the prior period.
Consolidated Selling, General and Administrative Expenses
The change in selling, general and administrative (“SG&A”) expenses is as follows:
SG&A expenses for the prior period |
|
$ |
10,830 |
|
Increase in supplemental retirement plan expenses |
|
|
506 |
|
Increase in professional fees |
|
|
343 |
|
Increase in incentive compensation expenses |
|
|
273 |
|
Increase due to foreign currency translation, and other net activity |
|
|
137 |
|
Decrease in consumer marketing and branding expenses |
|
|
(679 |
) |
SG&A expenses for the current period |
|
$ |
11,410 |
|
Total SG&A expenses were higher for the current period compared to the prior period, primarily as a result of (i) an increase in supplemental retirement plan expenses due to the comparatively improved performance of the equity index tracked by the plan, (ii) an increase in professional fees for legal, audit and tax services, (iii) a net increase in incentive compensation expenses due to (a) the Company’s performance against established targets for the comparable periods, partially offset by (b) a decline in equity awards granted and (iv) an increase due to foreign currency translation for the Brazilian Real. These increases were partially offset by a decrease in consumer marketing and branding expenses due to the timing of such expenses for advertising and sponsorship agreements, primarily for REPREVE®.
Consolidated (Benefit) Provision for Bad Debts
The benefit to the current period reflects a decrease in the reserve against specifically identified customer balances in the Polyester and International Segments.
Consolidated Interest Expense, Net
Interest expense, net decreased $275, and reflected the following components:
|
|
For the Three Months Ended |
|
|||||
|
|
September 25, 2016 |
|
|
September 27, 2015 |
|
||
Interest and fees on the ABL Facility |
|
$ |
641 |
|
|
$ |
613 |
|
Other interest |
|
|
262 |
|
|
|
212 |
|
Subtotal of interest on debt obligations |
|
|
903 |
|
|
|
825 |
|
Other components of interest expense |
|
|
(211 |
) |
|
|
159 |
|
Total interest expense |
|
|
692 |
|
|
|
984 |
|
Interest income |
|
|
(146 |
) |
|
|
(163 |
) |
Interest expense, net |
|
$ |
546 |
|
|
$ |
821 |
|
Interest on debt obligations increased in the current period compared to the prior period in connection with an increase in the average debt balance from $121,806 to $126,785, as well as an increase in the weighted average interest rate from 2.5% to 2.8%.
25
The change in other components of interest expense from the prior period is primarily attributable to (i) an increase in capitalized interest, driven by increased capital expenditures, as discussed under “—Capital Projects” below, and (ii) a favorable change in the mark-to-market adjustment for the interest rate swap.
Interest income in each period includes earnings recognized on cash equivalents held globally.
Consolidated Earnings from Unconsolidated Affiliates
The components of earnings from unconsolidated affiliates are as follows:
|
|
For the Three Months Ended |
|
|||||
|
|
September 25, 2016 |
|
|
September 27, 2015 |
|
||
Earnings from PAL |
|
$ |
(314 |
) |
|
$ |
(1,965 |
) |
Earnings from nylon joint ventures |
|
|
(526 |
) |
|
|
(895 |
) |
Total equity in earnings of unconsolidated affiliates |
|
$ |
(840 |
) |
|
$ |
(2,860 |
) |
As a percentage of consolidated income before income taxes |
|
|
6.5 |
% |
|
|
24.4 |
% |
The Company’s 34% share of PAL’s earnings decreased in the current period versus the prior period, which was primarily attributable to (i) lower volumes and operating margins, mostly as a result of a challenging domestic cotton market and (ii) higher depreciation expenses in connection with recent capital investments. The earnings from the nylon joint ventures experienced a decrease primarily due to softness in the nylon market, consistent with the results of the Nylon Segment.
Consolidated Income Taxes
The change in consolidated income taxes is as follows:
|
|
For the Three Months Ended |
|
|||||
|
|
September 25, 2016 |
|
|
September 27, 2015 |
|
||
Provision for income taxes |
|
$ |
3,726 |
|
|
$ |
3,940 |
|
Effective tax rate |
|
|
29.0 |
% |
|
|
33.6 |
% |
The effective tax rates for the periods presented above are lower than the U.S. statutory rate of 35% primarily due to foreign income being taxed at lower rates and a decrease in the valuation allowance for the Company’s investment in PAL. These items were partially offset by losses in tax jurisdictions for which no tax benefit could be recognized and state and local income taxes net of federal benefits.
Consolidated Net Income Attributable to Unifi, Inc.
Net income attributable to Unifi, Inc. for the current period was $9,403, or $0.52 per basic share, compared to $8,025, or $0.45 per basic share, for the prior period. The increase was primarily attributable to (i) improved gross profit, (ii) a decrease in the provision for bad debts and (iii) a lower effective tax rate, partially offset by (a) lower earnings from PAL and (b) an increase in SG&A expenses.
Liquidity and Capital Resources
The Company’s primary capital requirements are for working capital, capital expenditures, debt service and stock repurchases. The Company’s primary sources of capital are cash generated from operations and borrowings available under the ABL Revolver, as described below. For the current period, cash generated from operations was $8,149, and at September 25, 2016, excess availability under the ABL Revolver was $59,897.
26
As of September 25, 2016, $126,764 of the Company’s $130,874 of debt obligations were guaranteed by certain of its domestic operating subsidiaries, while nearly all of the Company’s cash and cash equivalents were held by its foreign subsidiaries. Cash and cash equivalents held by such other subsidiaries may not be presently available to fund the Company’s domestic capital requirements, including its domestic debt obligations. The Company employs a variety of tax planning and financing strategies to ensure that its worldwide cash is available in the locations where it is needed. The following table presents a summary of cash and cash equivalents, borrowings available under financing arrangements, liquidity, working capital and total debt obligations as of September 25, 2016:
|
|
United States |
|
|
Brazil |
|
|
Renewables(1) |
|
|
Others |
|
|
Total |
|
|||||
Cash and cash equivalents |
|
$ |
14 |
|
|
$ |
6,280 |
|
|
$ |
824 |
|
|
$ |
13,803 |
|
|
$ |
20,921 |
|
Borrowings available under financing arrangements (2) |
|
|
59,897 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
59,897 |
|
Liquidity |
|
$ |
59,911 |
|
|
$ |
6,280 |
|
|
$ |
824 |
|
|
$ |
13,803 |
|
|
$ |
80,818 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Working capital |
|
$ |
76,322 |
|
|
$ |
39,780 |
|
|
$ |
1,040 |
|
|
$ |
31,445 |
|
|
$ |
148,587 |
|
Total debt obligations |
|
$ |
126,764 |
|
|
$ |
— |
|
|
$ |
4,110 |
|
|
$ |
— |
|
|
$ |
130,874 |
|
(1) |
Although Renewables operates in the United States, presenting its liquidity measures separate from U.S. operations provides a more accurate depiction of the Company’s domestic liquidity. |
(2) |
Excludes consideration for amounts available under a construction financing arrangement as such borrowings are specific to a capital project. For additional information, see “―Construction Financing” within “Debt Obligations” below. |
Debt Obligations
ABL Facility
On March 26, 2015, the Company and its subsidiary, Unifi Manufacturing, Inc., entered into an Amended and Restated Credit Agreement (as subsequently amended, the “Amended Credit Agreement”) for a $200,000 senior secured credit facility (the “ABL Facility”) with a syndicate of lenders. The ABL Facility consists of a $100,000 revolving credit facility (the “ABL Revolver”) and a term loan that can be reset up to a maximum amount of $100,000, once per fiscal year, if certain conditions are met (the “ABL Term Loan”). Such a principal increase occurred in fiscal 2016. The ABL Facility has a maturity date of March 26, 2020.
The Amended Credit Agreement includes representations and warranties made by the loan parties, affirmative and negative covenants and events of default that are usual and customary for financings of this type. In addition, the ABL Facility contains restrictions on certain payments and investments, including restrictions on the payment of dividends and share repurchases. Subject to certain provisions, the ABL Term Loan may be prepaid at par, in whole or in part, at any time before the maturity date, at the Company’s discretion.
ABL Facility borrowings bear interest at variable rates based on a margin applied to a benchmark rate. There is also a monthly unused line fee under the ABL Revolver of 0.25%.
The ABL Facility is secured by a first-priority perfected security interest in substantially all owned property and assets (together with proceeds and products) of Unifi, Inc., Unifi Manufacturing, Inc. and certain subsidiary guarantors (the “Loan Parties”). It is also secured by a first-priority security interest in all (or 65% in the case of certain first-tier controlled foreign corporations, as required by the lenders) of the stock of (or other ownership interests in) each of the Loan Parties (other than the Company) and certain subsidiaries of the Loan Parties, together with all proceeds and products thereof.
If excess availability under the ABL Revolver falls below the Trigger Level (as defined in the Amended Credit Agreement), a financial covenant requiring the Loan Parties to maintain a fixed charge coverage ratio on a monthly basis of at least 1.05 to 1.0 becomes effective. The Trigger Level as of September 25, 2016 was $23,484.
As of September 25, 2016, the Company was in compliance with all financial covenants and the excess availability under the ABL Revolver was $59,897. At September 25, 2016, the fixed charge coverage ratio was 1.53 to 1.0 and the Company had $200 of standby letters of credit, none of which have been drawn upon.
27
In December 2015, the Company entered into an agreement with a third-party lender that provides for construction-period financing for certain build-to-suit assets. The Company will record project costs to construction in progress and the corresponding liability to construction financing (within long-term debt). The agreement provides for monthly, interest-only payments during the construction period, at a rate of 3.5%, and contains terms customary for a financing of this type.
The agreement provides for 60 monthly payments, which will commence at the earlier of the completion of the construction period or July 1, 2017, with an interest rate of 3.2%.
Renewables
In September 2015, Renewables entered into a secured debt financing arrangement, consisting of a master loan agreement and corresponding term loan supplement having a borrowing capacity of $4,000, with CoBank, ACB and Carolina Farm Credit, ACA. The financing arrangement includes representations and warranties made by Renewables, financial covenants, affirmative and negative covenants and events of default that are usual and customary for financings of this type. In connection with this arrangement, a subsidiary of the Company is subject to joint and several liability in the event of recourse by the lenders.
In October 2015, Renewables borrowed $4,000 against the above arrangement, bearing interest at LIBOR plus an applicable margin of 3.25%, payable monthly in arrears. Principal payments of $111 per month begin in September 2019 and are payable through July 2022, followed by a final payment equal to the remaining unpaid principal balance in August 2022.
Summary of Debt Obligations
The following table presents the total balances outstanding for the Company’s debt obligations, their scheduled maturity dates and the weighted average interest rates for borrowings as well as the applicable current portion of long-term debt:
|
|
|
|
Weighted Average |
|
|
|
|
||||||
|
|
Scheduled |
|
Interest Rate as of |
|
|
Principal Amounts as of |
|
||||||
|
|
Maturity Date |
|
September 25, 2016 |
|
|
September 25, 2016 |
|
|
June 26, 2016 |
|
|||
ABL Revolver |
|
March 2020 |
|
|
2.4% |
|
|
$ |
14,700 |
|
|
$ |
6,200 |
|
ABL Term Loan |
|
March 2020 |
|
2.3% (1) |
|
|
|
87,875 |
|
|
|
90,250 |
|
|
Capital lease obligations |
|
(2) |
|
(3) |
|
|
|
14,725 |
|
|
|
15,798 |
|
|
Construction financing |
|
(4) |
|
(4) |
|
|
|
9,464 |
|
|
|
6,629 |
|
|
Renewables’ term loan |
|
August 2022 |
|
|
3.8% |
|
|
|
4,000 |
|
|
|
4,000 |
|
Renewables’ promissory note |
|
September 2020 |
|
|
3.0% |
|
|
|
110 |
|
|
|
135 |
|
Total debt |
|
|
|
|
|
|
|
|
130,874 |
|
|
|
123,012 |
|
Current portion of capital lease obligations |
|
|
|
|
|
|
|
|
(4,207 |
) |
|
|
(4,261 |
) |
Current portion of other long-term debt |
|
|
|
|
|
|
|
|
(9,526 |
) |
|
|
(9,525 |
) |
Unamortized debt issuance costs |
|
|
|
|
|
|
|
|
(1,320 |
) |
|
|
(1,421 |
) |
Total long-term debt |
|
|
|
|
|
|
|
$ |
115,821 |
|
|
$ |
107,805 |
|
(1) |
The weighted average interest rate as of September 25, 2016 for the ABL Term Loan includes the effects of the interest rate swap with a notional balance of $50,000. |
(2) |
Scheduled maturity dates for capital lease obligations range from January 2017 to November 2027. |
(3) |
Interest rates for capital lease obligations range from 2.3% to 4.6%. |
(4) |
Refer to the discussion under the heading “—Construction Financing” above for further information. |
In addition to making payments in accordance with the scheduled maturities of debt required under its existing debt obligations, the Company may, from time to time, elect to repay additional amounts borrowed under the ABL Facility. Funds to make such repayments may come from the operating cash flows of the business or other sources and will depend upon the Company’s strategy, prevailing market conditions, liquidity requirements, contractual restrictions and other factors.
28
The following table presents the scheduled maturities of the Company’s outstanding debt obligations for the remainder of fiscal 2017 and the fiscal years thereafter:
|
|
Scheduled Maturities on a Fiscal Year Basis |
|
|||||||||||||||||||||
|
|
2017 |
|
|
2018 |
|
|
2019 |
|
|
2020 |
|
|
2021 |
|
|
Thereafter |
|
||||||
ABL Revolver |
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
14,700 |
|
|
$ |
— |
|
|
$ |
— |
|
ABL Term Loan |
|
|
7,125 |
|
|
|
9,500 |
|
|
|
9,500 |
|
|
|
61,750 |
|
|
|
— |
|
|
|
— |
|
Renewables’ promissory note |
|
|
— |
|
|
|
26 |
|
|
|
27 |
|
|
|
28 |
|
|
|
29 |
|
|
|
— |
|
Renewables’ term loan |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
1,111 |
|
|
|
1,333 |
|
|
|
1,556 |
|
Capital lease obligations |
|
|
3,188 |
|
|
|
4,128 |
|
|
|
4,058 |
|
|
|
2,542 |
|
|
|
171 |
|
|
|
638 |
|
Total (1) |
|
$ |
10,313 |
|
|
$ |
13,654 |
|
|
$ |
13,585 |
|
|
$ |
80,131 |
|
|
$ |
1,533 |
|
|
$ |
2,194 |
|
(1) |
Total excludes $9,464 for the construction financing described above. |
Further discussion of the terms and conditions of the Amended Credit Agreement and the Company’s existing indebtedness is included in Note 9, “Long-Term Debt.”
Working Capital
The following table presents the components of working capital and the reconciliation of working capital to Adjusted Working Capital:
|
|
September 25, 2016 |
|
|
June 26, 2016 |
|
||
Cash and cash equivalents |
|
$ |
20,921 |
|
|
$ |
16,646 |
|
Receivables, net |
|
|
82,912 |
|
|
|
83,422 |
|
Inventories |
|
|
110,002 |
|
|
|
103,532 |
|
Other current assets |
|
|
11,944 |
|
|
|
8,292 |
|
Accounts payable |
|
|
(44,177 |
) |
|
|
(41,593 |
) |
Accrued expenses |
|
|
(17,250 |
) |
|
|
(18,474 |
) |
Other current liabilities |
|
|
(15,765 |
) |
|
|
(15,241 |
) |
Working capital |
|
|
148,587 |
|
|
|
136,584 |
|
|
|
|
|
|
|
|
|
|
Less: Cash and cash equivalents |
|
|
(20,921 |
) |
|
|
(16,646 |
) |
Less: Other current assets |
|
|
(11,944 |
) |
|
|
(8,292 |
) |
Less: Other current liabilities |
|
|
15,765 |
|
|
|
15,241 |
|
Adjusted working capital |
|
$ |
131,487 |
|
|
$ |
126,887 |
|
The increase in cash and cash equivalents reflects the strong performance of our international subsidiaries. The decrease in receivables, net is insignificant. The increase in inventories is attributable to higher inventory units during the start-up phase of our REPREVE® Bottle Processing Center and sales growth from our international operations. The increase in other current assets is primarily attributable to an increase in income taxes receivable primarily due to the favorable depreciation provisions of the Protecting Americans from Tax Hikes Act of 2015. The increase in accounts payable reflects the timing of vendor payments and a lower June 26, 2016 balance due to seasonal shutdowns for the Company and its customers. The decrease in accrued expenses is primarily attributable to the payment of amounts due for variable compensation earned in fiscal 2016. The change in other current liabilities is insignificant. Both working capital and Adjusted Working Capital are within the ranges anticipated by management.
Capital Projects
During the current period, the Company invested approximately $13,000 in capital projects (including amounts funded by a construction financing arrangement). The most significant investment was the completion of our REPREVE® Bottle Processing Center at the Company’s existing facility in Reidsville, North Carolina within our Polyester Segment. This bottle processing plant is expected to process 75 million pounds of plastic bottle flake annually, in support of our growing focus on recycling and sustainability, especially with the REPREVE® brand and its expanding portfolio.
29
Through the remainder of fiscal 2017, the Company expects to invest approximately an additional $27,000 in capital projects (for an anticipated total of $40,000 for the fiscal year), which includes (i) completing the fourth REPREVE® Recycling Center production line, (ii) additional machinery modifications to meet the ever-changing demands of the market and (iii) investments in Asia to support growth as prominent brand and retail partners continue to respond well to our strategy to provide PVA products globally. These investments will be spread across the Polyester and International Segments.
The Company will seek to ensure maintenance capital expenditures are sufficient to allow continued production at high efficiencies. As the REPREVE® Bottle Processing Center reaches full production, our goal is to continue support for REPREVE® by securing a stream of high-quality raw materials (in the form of plastic bottle flake). This, combined with technology advancements in recycling that will be incorporated into the fiscal 2017 recycling expansion, will enhance our ability to grow REPREVE® into other markets such as nonwovens, carpet fiber and packaging.
The total amount ultimately invested for fiscal 2017 could be more or less depending on the timing and scale of contemplated initiatives and is expected to be funded by a combination of cash from operations, borrowings under the ABL Revolver, new capital lease obligations and a construction financing arrangement. The Company expects the capital projects undertaken during fiscal 2015, 2016 and 2017 to provide benefits to future profitability. The additional assets from these capital projects consist primarily of machinery and equipment.
As a result of our continued focus on REPREVE® and other PVA yarns as part of our mix enrichment strategy, we may incur additional expenditures for capital projects, beyond the currently estimated amount, as we pursue new, currently unanticipated opportunities in order to expand our manufacturing capabilities for these products, for other strategic growth initiatives or to further streamline our manufacturing process, in which case we may be required to increase the amount of our working capital and long-term borrowings. If our strategy is successful, we would expect higher gross profit as a result of the combination of potentially higher sales volumes and an improved mix from higher-margin yarns.
Stock Repurchase Program
The Company made no repurchases of its shares of common stock during the current period. As of September 25, 2016, the Company had repurchased a total of 3,147 shares, at an average price of $23.01 (for a total of $72,438, inclusive of commission costs), since January 2013, pursuant to its two Board-approved stock repurchase programs. As of September 25, 2016, approximately $27,600 remained available for repurchases under the current Board-approved stock repurchase program.
Liquidity Summary
The Company has met its historical liquidity requirements for working capital, capital expenditures, debt service requirements and other operating needs from its cash flows from operations and available borrowings. The Company believes that its existing cash balances, cash provided by operating activities and borrowings available under the ABL Revolver will enable the Company to comply with the terms of its indebtedness and meet its foreseeable liquidity requirements. Domestically, the Company’s cash balances, cash provided by operating activities and borrowings available under the ABL Revolver continue to be sufficient to fund the Company’s domestic operating activities as well as cash commitments for its investing and financing activities. For its current foreign operations, the Company expects its existing cash balances and cash provided by operating activities to provide the needed liquidity to fund its foreign operating and investing activities. However, if the Company expands its foreign asset base, it may require cash from its domestic sources.
30
Cash Provided by Operating Activities
Net cash provided by operating activities increased from $787 for the prior period to $8,149 for the current period. The significant components of cash provided by operating activities are summarized below.
|
|
For the Three Months Ended |
|
|||||
|
|
September 25, 2016 |
|
|
September 27, 2015 |
|
||
Net income including non-controlling interest |
|
$ |
9,142 |
|
|
$ |
7,786 |
|
Equity in earnings of unconsolidated affiliates |
|
|
(840 |
) |
|
|
(2,860 |
) |
Subtotal |
|
|
8,302 |
|
|
|
4,926 |
|
|
|
|
|
|
|
|
|
|
Distributions received from unconsolidated affiliates |
|
|
750 |
|
|
|
1,947 |
|
Deferred income taxes |
|
|
2,471 |
|
|
|
498 |
|
Other changes |
|
|
(3,374 |
) |
|
|
(6,584 |
) |
Net cash provided by operating activities |
|
$ |
8,149 |
|
|
$ |
787 |
|
The increase in net cash provided by operating activities is primarily due to (i) significantly higher net income attributable to the Company of $8,302 in the current period versus $4,926 in the prior period (as indicated in the Subtotal above which normalizes for changes in non-cash earnings of unconsolidated affiliates), (ii) less cash used in working capital and (iii) increased generation of deferred income taxes, partially offset by lower distributions from unconsolidated affiliates. Higher net income is attributable to increased sales volume and gross profit performance, as discussed above. Lower working capital spend is primarily due to a comparative increase in customer receipts. Higher deferred income taxes are primarily due to the favorable depreciation provisions of the Protecting Americans from Tax Hikes Act of 2015, which was enacted in December 2015. Lastly, as PAL’s performance is comparatively weaker, routine tax distributions received by the Company have declined accordingly.
Cash Used in Investing Activities and Cash Provided by Financing Activities
The Company utilized $10,184 (net) for investing activities and received $6,358 (net) from financing activities during the current period.
Significant investing activities include $10,135 for capital expenditures, which primarily relate to the addition of machinery, equipment and infrastructure for the Company’s new plastic bottle processing plant at our existing location in Reidsville, North Carolina, as described above under the heading “—Capital Projects.”
Significant financing activities include $6,125 for net borrowings against the ABL Facility. These borrowings helped fund the investing activities described above.
Contractual Obligations
The Company has incurred various financial obligations and commitments in the normal course of its operating and financing activities. Financial obligations are considered to represent known future cash payments that the Company is required to make under existing contractual arrangements, such as debt and lease agreements.
Changes to the Company’s obligations via various debt and financing arrangements during the current period have been outlined in Note 9, “Long-Term Debt” and Note 18, “Commitments and Contingencies,” with supplemental discussions above in this Item 2.
There have been no further material changes in the scheduled maturities of the Company’s contractual obligations as disclosed in the table under the heading “Contractual Obligations” in “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations” in the 2016 Form 10-K.
Off-Balance Sheet Arrangements
The Company is not a party to any off-balance sheet arrangements that have, or are reasonably likely to have, a current or future material effect on the Company’s financial condition, results of operations, liquidity or capital expenditures.
31
The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. The SEC has defined a company’s most critical accounting policies as those involving accounting estimates that require management to make assumptions about matters that are highly uncertain at the time and where different reasonable estimates or changes in the accounting estimates from quarter to quarter could materially impact the presentation of the financial statements. The Company’s critical accounting policies are discussed in the 2016 Form 10-K. There have been no material changes to these policies during the current period.
The Company is exposed to market risks associated with changes in interest rates, fluctuations in foreign currency exchange rates, and changes in raw material and commodity costs, which may adversely affect its financial position, results of operations or cash flows. The Company does not enter into derivative financial instruments for trading purposes, nor is it a party to any leveraged financial instruments.
Interest Rate Risk
The Company is exposed to interest rate risk through its borrowing activities. As of September 25, 2016, the Company had borrowings under its ABL Revolver and ABL Term Loan that totaled $102,575 and contained variable rates of interest; however, the Company hedges a portion of such interest rate variability using an interest rate swap. After considering the variable rate debt obligations that have been hedged and the Company’s outstanding debt obligations with fixed rates of interest, the Company’s sensitivity analysis shows that a 50-basis point increase in LIBOR as of September 25, 2016 would result in an increase of $283 in annual interest expense.
Foreign Currency Exchange Rate Risk
The Company conducts its business in various foreign countries and in various foreign currencies. Each of the Company’s subsidiaries may enter into transactions (sales, purchases, fixed purchase commitments, etc.) that are denominated in currencies other than the subsidiary’s functional currency and thereby expose the Company to foreign currency exchange rate risk. The Company may enter into foreign currency forward contracts to hedge this exposure. The Company may also enter into foreign currency forward contracts to hedge its exposure for certain equipment or inventory purchase commitments. As of September 25, 2016, the Company had no outstanding foreign forward currency contracts.
A significant portion of raw materials purchased by the Company’s Brazilian subsidiary is denominated in U.S. Dollars, requiring the Company to regularly exchange Brazilian Real. During recent fiscal years, and most notably in fiscal 2015, the Company was negatively impacted by a devaluation of the Brazilian Real. However, in recent months, the Brazilian Real has been stable in relation to the U.S. Dollar. Predicting fluctuations in the Brazilian Real is impracticable.
As of September 25, 2016, the Company’s subsidiaries outside the United States, whose functional currency is other than the U.S. Dollar, held approximately 14% of the Company’s consolidated total assets. The Company does not enter into foreign currency derivatives to hedge its net investment in its foreign operations.
As of September 25, 2016, $15,394, or 74%, of the Company’s cash and cash equivalents were held outside the United States, of which approximately $8,800 were held in U.S. Dollar equivalents.
Raw Material and Commodity Risks
A significant portion of the Company’s raw materials and energy costs is derived from petroleum-based chemicals. The prices for petroleum and petroleum-related products and energy costs are volatile and dependent on global supply and demand dynamics, including certain geo-political risks. The Company does not use financial instruments to hedge its exposure to changes in these costs. The costs of the primary raw materials that the Company uses throughout all of its operations are generally based on U.S. Dollar pricing; and such materials are purchased at market or at fixed prices that are established with individual vendors as part of the purchasing process for quantities expected to be consumed in the ordinary course of business.
Other Risks
The Company is also exposed to political risk, including changing laws and regulations governing international trade, such as quotas, tariffs and tax laws. The degree of impact and the frequency of these events cannot be predicted.
32
As of September 25, 2016, an evaluation of the effectiveness of the Company’s disclosure controls and procedures (as defined in Rule 13a-15(e) and 15d-15(e) promulgated under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) was performed under the supervision and with the participation of the Company’s management, including its principal executive officer and principal financial officer. Based on that evaluation, the Company’s principal executive officer and principal financial officer concluded that the Company’s disclosure controls and procedures are effective to ensure that information required to be disclosed by the Company in its reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC rules and forms, and that information required to be disclosed by the Company in the reports the Company files or submits under the Exchange Act is accumulated and communicated to the Company’s management, including its principal executive officer and principal financial officer, as appropriate to allow timely decisions regarding required disclosure.
There were no changes in the Company’s internal control over financial reporting during the quarter ended September 25, 2016, that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.
33
Unifi is from time to time a party to various lawsuits, claims and other legal proceedings that arise in the ordinary course of business. With respect to all such lawsuits, claims and proceedings, we record reserves when it is probable a liability has been incurred and the amount of loss can be reasonably estimated. We do not believe that any of these proceedings, individually or in the aggregate, would be expected to have a material adverse effect on our results of operations, financial position or cash flows.
There have been no material changes in the Company’s risk factors from those disclosed in “Item 1A. Risk Factors” in the 2016 Form 10-K.
34
Exhibit Number |
|
Description |
|
|
|
3.1 |
|
Restated Certificate of Incorporation of Unifi, Inc. (incorporated by reference to Exhibit 3.1 to the Current Report on Form 8-K filed October 31, 2016 (File No. 001-10542)). |
|
|
|
3.2 |
|
Amended and Restated By-laws of Unifi, Inc., as of October 26, 2016 (incorporated by reference to Exhibit 3.2 to the Current Report on Form 8-K filed October 31, 2016 (File No. 001-10542)). |
|
|
|
31.1+ |
|
Certification of Principal Executive Officer pursuant to Rule 13a-14(a)/15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. |
|
|
|
31.2+ |
|
Certification of Principal Financial Officer pursuant to Rule 13a-14(a)/15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. |
|
|
|
32.1++ |
|
Certification of Principal Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. |
|
|
|
32.2++ |
|
Certification of Principal Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. |
|
|
|
101+ |
|
The following financial information (unaudited) from Unifi, Inc.’s Quarterly Report on Form 10-Q for the quarterly period ended September 25, 2016, filed on November 3, 2016, formatted in eXtensible Business Reporting Language: (i) the Condensed Consolidated Balance Sheets, (ii) the Condensed Consolidated Statements of Income, (iii) the Condensed Consolidated Statements of Comprehensive Income (Loss), (iv) the Condensed Consolidated Statements of Cash Flows, and (v) the Notes to Condensed Consolidated Financial Statements. |
+ |
Filed herewith. |
++ |
Furnished herewith. |
35
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 thereunto duly authorized.
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UNIFI, INC. |
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(Registrant) |
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Date: November 3, 2016 |
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By: |
/s/ SEAN D. GOODMAN |
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Sean D. Goodman |
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Vice President and Chief Financial Officer |
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|
(Principal Financial Officer and Principal Accounting Officer) |
36
Exhibit Number |
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Description |
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3.1 |
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Restated Certificate of Incorporation of Unifi, Inc. (incorporated by reference to Exhibit 3.1 to the Current Report on Form 8-K filed October 31, 2016 (File No. 001-10542)). |
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3.2 |
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Amended and Restated By-laws of Unifi, Inc., as of October 26, 2016 (incorporated by reference to Exhibit 3.2 to the Current Report on Form 8-K filed October 31, 2016 (File No. 001-10542)). |
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31.1+ |
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Certification of Principal Executive Officer pursuant to Rule 13a-14(a)/15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. |
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31.2+ |
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Certification of Principal Financial Officer pursuant to Rule 13a-14(a)/15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. |
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32.1++ |
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Certification of Principal Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. |
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32.2++ |
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Certification of Principal Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. |
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101+ |
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The following financial information (unaudited) from Unifi, Inc.’s Quarterly Report on Form 10-Q for the quarterly period ended September 25, 2016, filed on November 3, 2016, formatted in eXtensible Business Reporting Language: (i) the Condensed Consolidated Balance Sheets, (ii) the Condensed Consolidated Statements of Income, (iii) the Condensed Consolidated Statements of Comprehensive Income (Loss), (iv) the Condensed Consolidated Statements of Cash Flows, and (v) the Notes to Condensed Consolidated Financial Statements. |
+ |
Filed herewith. |
++ |
Furnished herewith. |
37
Exhibit 31.1
CERTIFICATION
I, Thomas H. Caudle, Jr., certify that:
1. I have reviewed this Quarterly Report on Form 10-Q of Unifi, Inc.;
2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
Date: |
November 3, 2016 |
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/s/ THOMAS H. CAUDLE, JR. |
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Thomas H. Caudle, Jr. |
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President |
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(Principal Executive Officer) |
Exhibit 31.2
CERTIFICATION
I, Sean D. Goodman, certify that:
1. I have reviewed this Quarterly Report on Form 10-Q of Unifi, Inc.;
2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
Date: |
November 3, 2016 |
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/s/ SEAN D. GOODMAN |
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Sean D. Goodman |
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Vice President and Chief Financial Officer |
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(Principal Financial Officer) |
Exhibit 32.1
CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Quarterly Report on Form 10-Q of Unifi, Inc. (the “Company”) for the period ended September 25, 2016 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Thomas H. Caudle, Jr., President of the Company, certify pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:
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(1) |
The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and |
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(2) |
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
Date: |
November 3, 2016 |
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/s/ THOMAS H. CAUDLE, JR. |
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Thomas H. Caudle, Jr. |
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President |
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(Principal Executive Officer) |
Exhibit 32.2
CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Quarterly Report on Form 10-Q of Unifi, Inc. (the “Company”) for the period ended September 25, 2016 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Sean D. Goodman, Vice President and Chief Financial Officer of the Company, certify pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:
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(1) |
The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and |
|
(2) |
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
Date: |
November 3, 2016 |
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/s/ SEAN D. GOODMAN |
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Sean D. Goodman |
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Vice President and Chief Financial Officer |
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(Principal Financial Officer) |
Document And Entity Information - shares |
3 Months Ended | |
---|---|---|
Sep. 25, 2016 |
Oct. 27, 2016 |
|
Document And Entity Information [Abstract] | ||
Entity Registrant Name | UNIFI INC | |
Entity Central Index Key | 0000100726 | |
Trading Symbol | ufi | |
Current Fiscal Year End Date | --06-25 | |
Entity Filer Category | Accelerated Filer | |
Entity Common Stock, Shares Outstanding (in shares) | 18,046,043 | |
Document Type | 10-Q | |
Document Period End Date | Sep. 25, 2016 | |
Document Fiscal Year Focus | 2017 | |
Document Fiscal Period Focus | Q1 | |
Amendment Flag | false |
Condensed Consolidated Balance Sheets (Unaudited) (Parentheticals) - $ / shares |
Sep. 25, 2016 |
Jun. 26, 2016 |
---|---|---|
Statement Of Financial Position [Abstract] | ||
Common stock, par (in dollars per share) | $ 0.10 | $ 0.10 |
Common stock, shares authorized (in shares) | 500,000,000 | 500,000,000 |
Common stock, shares outstanding (in shares) | 18,018,445 | 17,847,416 |
Condensed Consolidated Statements of Income (Unaudited) - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Sep. 25, 2016 |
Sep. 27, 2015 |
|
Income Statement [Abstract] | ||
Net sales | $ 159,969 | $ 162,165 |
Cost of sales | 136,422 | 141,181 |
Gross profit | 23,547 | 20,984 |
Selling, general and administrative expenses | 11,410 | 10,830 |
(Benefit) provision for bad debts | (367) | 613 |
Other operating income, net | (70) | (146) |
Operating income | 12,574 | 9,687 |
Interest income | (146) | (163) |
Interest expense | 692 | 984 |
Equity in earnings of unconsolidated affiliates | (840) | (2,860) |
Income before income taxes | 12,868 | 11,726 |
Provision for income taxes | 3,726 | 3,940 |
Net income including non-controlling interest | 9,142 | 7,786 |
Less: net loss attributable to non-controlling interest | (261) | (239) |
Net income attributable to Unifi, Inc. | $ 9,403 | $ 8,025 |
Net income attributable to Unifi, Inc. per common share: | ||
Basic (in dollars per share) | $ 0.52 | $ 0.45 |
Diluted (in dollars per share) | $ 0.51 | $ 0.43 |
Condensed Consolidated Statements of Comprehensive Income (Loss) (Unaudited) - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Sep. 25, 2016 |
Sep. 27, 2015 |
|
Net income including non-controlling interest | $ 9,142 | $ 7,786 |
Foreign currency translation adjustments, pre-tax | (579) | (11,038) |
Reclassification adjustments on interest rate swap | 19 | 19 |
Other comprehensive loss, after tax | (803) | (11,418) |
Comprehensive income (loss) including non-controlling interest | 8,339 | (3,632) |
Less: comprehensive loss attributable to non-controlling interest | (261) | (239) |
Comprehensive income (loss) attributable to Unifi, Inc. | 8,600 | (3,393) |
Unconsolidated Affiliates [Member] | ||
Foreign currency translation adjustments, pre-tax | $ (243) | $ (399) |
Background |
3 Months Ended |
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Sep. 25, 2016 | |
Organization Consolidation And Presentation Of Financial Statements [Abstract] | |
Background | 1. Background Unifi, Inc., a New York corporation formed in 1969 (together with its subsidiaries, “we,” the “Company” or “Unifi”), is a multi-national manufacturing company that processes and sells high-volume commodity yarns, specialized yarns designed to meet certain customer specifications, and premium value-added (“PVA”) yarns with enhanced performance characteristics. The Company sells yarns made from polyester and nylon to other yarn manufacturers and knitters and weavers that produce fabric for the apparel, hosiery, home furnishings, automotive upholstery, industrial and other end-use markets. The Company’s polyester products include plastic bottle flake, polyester polymer beads (“Chip”), partially oriented yarn (“POY”), and textured, solution and package dyed, twisted, beamed and draw wound yarns. Each yarn product is available in virgin or recycled varieties, where the recycled is made from both pre-consumer yarn waste and post-consumer waste, including plastic bottles. The Company’s nylon products include textured, solution dyed and spandex covered products. The Company maintains one of the textile industry’s most comprehensive yarn product offerings, and has manufacturing operations in four countries and participates in joint ventures in Israel and the United States. The Company’s principal geographic markets for its products are in North America, Central America, South America and Asia. In addition to the Company’s operations described above, the Company’s investments include, but are not limited to, (i) a 34% non-controlling partnership interest in Parkdale America, LLC (“PAL”), a producer of cotton and synthetic yarns for sale to the textile industry and apparel market, both foreign and domestic; and (ii) a 60% controlling membership interest in Repreve Renewables, LLC (“Renewables”), an agricultural company focused on the development, production and commercialization of dedicated miscanthus grass for use in the animal bedding, bio-energy and other bio-based product markets. |
Basis of Presentation; Condensed Notes |
3 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 25, 2016 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Organization Consolidation And Presentation Of Financial Statements [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Basis of Presentation; Condensed Notes | 2. Basis of Presentation; Condensed Notes The accompanying condensed consolidated financial statements are unaudited and have been prepared in accordance with generally accepted accounting principles in the United States (“GAAP”) for interim financial information. As contemplated by the instructions of the Securities and Exchange Commission (the “SEC”) to Form 10-Q, the following notes have been condensed and, therefore, do not contain all disclosures required in connection with annual financial statements. Reference should be made to the Company’s year-end audited consolidated financial statements and related notes thereto contained in its Annual Report on Form 10-K for the fiscal year ended June 26, 2016 (the “2016 Form 10-K”). The financial information included in this report has been prepared by the Company, without audit. In the opinion of management, all adjustments, which consist of normal, recurring adjustments, considered necessary for a fair statement of the results for interim periods have been included. Nevertheless, the results shown for interim periods are not necessarily indicative of results to be expected for the full year. The preparation of financial statements in conformity with GAAP requires management to make use of estimates and assumptions that affect the amounts reported and certain financial statement disclosures. Actual results may vary from these estimates. All dollar and other currency amounts and share amounts, except per share amounts, are presented in thousands (000s), except as otherwise noted. The fiscal quarter for the Company and its Chinese subsidiary ended on September 25, 2016, the last Sunday in September. The fiscal quarter for the Company’s Brazilian and Colombian subsidiaries ended on September 30, 2016. There were no significant transactions or events that occurred between the Company’s fiscal quarter end and its subsidiaries’ fiscal quarter end. The three months ended September 25, 2016 and September 27, 2015 each consisted of thirteen fiscal weeks. Reclassifications Certain reclassifications of prior years’ data have been made to conform to the current year presentation. As of the fourth quarter of fiscal 2016, the Company updated the composition of its Polyester and Nylon Segments, intending to better reflect downstream sales for the respective product lines. In connection with such update, for the three months ended September 27, 2015, the Company has reclassified net sales and cost of sales amounts for the respective segments, as reflected in Note 20, “Business Segment Information.”
The Company adopted Accounting Standards Update (“ASU”) 2015-03, Interest—Imputation of Interest (Subtopic 835-30): Simplifying the Presentation of Debt Issuance Costs (“ASU 2015-03”) during the first quarter of fiscal 2017, along with the clarifying guidance in ASU 2015-15, Interest—Imputation of Interest (Subtopic 835-30): Presentation and Subsequent Measurement of Debt Issuance Costs Associated with Line-of-Credit Arrangements—Amendments to SEC Paragraphs Pursuant to Staff Announcement at June 18, 2015 EITF Meeting. As shown in the table below, unamortized debt issuance costs associated with outstanding debt have been reclassified to conform to the new presentation requirements as of September 25, 2016 as follows:
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Recent Accounting Pronouncements |
3 Months Ended |
---|---|
Sep. 25, 2016 | |
New Accounting Pronouncements And Changes In Accounting Principles [Abstract] | |
Recent Accounting Pronouncements | 3. Recent Accounting Pronouncements In August 2016, the Financial Accounting Standards Board issued ASU 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments, to reduce the diversity in practice arising from inconsistent presentation of certain components of the statement of cash flows. The guidance will be effective for the Company’s fiscal 2019. The Company is evaluating the effect the new guidance will have on its consolidated financial statements and related disclosures. In the first quarter of fiscal 2017, the Company adopted ASU 2015-16, Simplifying the Accounting for Measurement-Period Adjustments, that eliminates the requirement to restate prior period financial statements for measurement period adjustments. The new guidance requires that the cumulative impact of a measurement period adjustment (including the impact on prior periods) be recognized in the reporting period in which the adjustment is identified. The Company has no measurement period adjustments in the current or comparative periods. There have been no other newly issued or newly applicable accounting pronouncements that have, or are expected to have, a significant impact on the Company’s financial statements.
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Receivables, Net |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 25, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Receivables [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Receivables, Net | 4. Receivables, Net Receivables, net consists of the following:
The changes in the Company’s allowance for uncollectible accounts are as follows:
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Inventories |
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Inventory Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Inventories | 5. Inventories Inventories consists of the following:
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Property, Plant and Equipment, Net |
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Property, Plant and Equipment, Net | 6. Property, Plant and Equipment, Net Property, plant and equipment, net (“PP&E”) consists of the following:
Assets under capital leases consists of the following:
Depreciation expense and repairs and maintenance expenses were as follows:
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Intangible Assets, Net |
3 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Goodwill And Intangible Assets Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Intangible Assets, Net | 7. Intangible Assets, Net Intangible assets, net consists of the following:
Total amortization expense for intangible assets was as follows:
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Accrued Expenses |
3 Months Ended | ||||||||||||||||||||||||||||||||||||
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Sep. 25, 2016 | |||||||||||||||||||||||||||||||||||||
Payables And Accruals [Abstract] | |||||||||||||||||||||||||||||||||||||
Accrued Expenses | 8. Accrued Expenses Accrued expenses consists of the following:
Other consists primarily of accruals for utilities, property taxes, employee-related claims and payments, interest, marketing expenses, freight expenses, rent, deferred incentives and other non-income related taxes. |
Long-Term Debt |
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Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Long-Term Debt | 9. Long-Term Debt Debt Obligations The following table presents the total balances outstanding for the Company’s debt obligations, their scheduled maturity dates and the weighted average interest rates for borrowings as well as the applicable current portion of long-term debt:
ABL Revolver and ABL Term Loan On March 26, 2015, the Company and its subsidiary, Unifi Manufacturing, Inc., entered into an Amended and Restated Credit Agreement (as subsequently amended, the “Amended Credit Agreement”) for a $200,000 senior secured credit facility (the “ABL Facility”) with a syndicate of lenders. The ABL Facility consists of a $100,000 revolving credit facility (the “ABL Revolver”) and a term loan that can be reset up to a maximum amount of $100,000, once per fiscal year, if certain conditions are met (the “ABL Term Loan”). Such a principal increase occurred in fiscal 2016. The ABL Facility has a maturity date of March 26, 2020. Construction Financing In December 2015, the Company entered into an agreement with a third-party lender that provides for construction-period financing for certain build-to-suit assets. The Company will record project costs to construction in progress and the corresponding liability to construction financing (within long-term debt). The agreement provides for monthly, interest-only payments during the construction period, at a rate of 3.5%, and contains terms customary for a financing of this type. The principal balance of this construction financing arrangement reflects cash paid by the third-party lender for (i) construction in progress and (ii) advances to the Company. The agreement provides for 60 monthly payments, which will commence at the earlier of the completion of the construction period or July 1, 2017, with an interest rate of 3.2%. Scheduled Debt Maturities The following table presents the scheduled maturities of the Company’s outstanding debt obligations for the remainder of fiscal 2017 and the fiscal years thereafter:
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Other Long-Term Liabilities |
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Other Long-Term Liabilities | 10. Other Long-Term Liabilities Other long-term liabilities consists of the following:
Other primarily includes the Company’s unfunded supplemental post-employment plan, certain retiree and post-employment medical and disability liabilities, and deferred rent. |
Income Taxes |
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Income Taxes | 11. Income Taxes The provision for income taxes was as follows:
The effective tax rates for the periods presented above are lower than the U.S. statutory rate of 35% primarily due to foreign income being taxed at lower rates and a decrease in the valuation allowance for the Company’s investment in PAL. These items were partially offset by losses in tax jurisdictions for which no tax benefit could be recognized and state and local income taxes net of federal benefits. The Company regularly assesses the outcomes of both completed and ongoing examinations to ensure that the Company’s provision for income taxes is sufficient. Certain returns that remain open to examination have utilized carryforward tax attributes generated in prior tax years, including net operating losses, which could potentially be revised upon examination. Components of the Company’s deferred tax valuation allowance are as follows:
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Shareholders' Equity |
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Shareholders’ Equity | 12. Shareholders’ Equity There were no material changes to the composition of shareholders’ equity since June 26, 2016 that are not described in this report. The following table summarizes the Company’s repurchases and retirements of its common stock under Board-approved stock repurchase programs for the fiscal periods noted.
No dividends were paid during the three months ended September 25, 2016 or in the two most recently completed fiscal years.
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Stock-Based Compensation |
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Disclosure Of Compensation Related Costs Sharebased Payments Abstract | ||||||||||||||||||||||||||
Stock-Based Compensation | 13. Stock-Based Compensation On October 23, 2013, the Company’s shareholders approved the Unifi, Inc. 2013 Incentive Compensation Plan (the “2013 Plan”). The 2013 Plan replaced the 2008 Unifi, Inc. Long-Term Incentive Plan (the “2008 LTIP”). No additional awards can be granted under the 2008 LTIP; however, prior awards outstanding under the 2008 LTIP remain subject to that plan’s provisions. The 2013 Plan authorized the issuance of 1,000 shares of common stock, subject to certain increases in the event outstanding awards under the 2008 LTIP expire, are forfeited or otherwise terminate unexercised. The following table provides information as of September 25, 2016 with respect to the number of securities remaining available for future issuance under the 2013 Plan:
Stock options No stock options were granted by the Company during the three months ended September 25, 2016. During the three months ended September 27, 2015, the Company granted stock options to purchase 82 shares of common stock to certain key employees, utilizing terms, vesting provisions and valuation methods consistent with those described in Note 16, “Stock-Based Compensation,” to the consolidated financial statements in the 2016 Form 10-K. During the three months ended September 25, 2016, 171 stock options were exercised. Restricted stock units The Company may issue, from time to time, restricted stock units (“RSUs”) to the Company’s non-employee directors or certain key employees. No RSUs were granted by the Company during the three months ended September 25, 2016 and September 27, 2015. See Note 16, “Stock-Based Compensation,” to the consolidated financial statements in the 2016 Form 10-K for further information regarding the Company’s RSUs. |
Fair Value of Financial Instruments and Non-financial Assets and Liabilities |
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Sep. 25, 2016 | |
Fair Value Disclosures [Abstract] | |
Fair Value of Financial Instruments and Non-financial Assets and Liabilities | 14. Fair Value of Financial Instruments and Non-Financial Assets and Liabilities The Company may use derivative financial instruments such as foreign currency forward contracts or interest rate swaps to reduce its ongoing business exposures to fluctuations in foreign currency exchange rates or interest rates. The Company does not enter into derivative contracts for speculative purposes.
For the three months ended September 25, 2016 and September 27, 2015, there were no significant changes to the Company’s assets and liabilities measured at fair value, and there were no transfers into or out of the levels of the fair value hierarchy. |
Accumulated Other Comprehensive Loss |
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Accumulated Other Comprehensive Loss | 15. Accumulated Other Comprehensive Loss The components and the changes in accumulated other comprehensive loss, net of tax, as applicable, consist of the following:
A summary of the after-tax effects of the components of other comprehensive loss for the three months ended September 25, 2016 and September 27, 2015 is included in the accompanying condensed consolidated statements of comprehensive income (loss). The summary excludes pre-tax and tax amounts, as there are no tax components for the relevant activity. |
Earnings Per Share |
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Earnings Per Share | 16. Earnings Per Share The components of the calculation of earnings per share (“EPS”) are as follows:
The calculation of EPS is based on the weighted average number of the Company’s common shares outstanding for the applicable period. The calculation of diluted earnings per common share presents the effect of all potential dilutive common shares that were outstanding during the respective period, unless the effect of doing so is anti-dilutive. |
Investments in Unconsolidated Affiliates and Variable Interest Entities |
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Equity Method Investments And Joint Ventures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Investments in Unconsolidated Affiliates and Variable Interest Entities | 17. Investments in Unconsolidated Affiliates and Variable Interest Entities The Company currently maintains investments in three entities classified as unconsolidated affiliates: PAL; U.N.F. Industries Ltd. (“UNF”); and UNF America LLC (“UNFA”). As of September 25, 2016, the Company’s investment in PAL was $113,538 and the Company’s combined investments in UNF and UNFA were $3,701, each of which is reflected within investments in unconsolidated affiliates in the accompanying condensed consolidated balance sheets. Parkdale America, LLC PAL is a limited liability company treated as a partnership for income tax reporting purposes. The Company accounts for its investment in PAL using the equity method of accounting. PAL is subject to price risk related to anticipated fixed-price yarn sales. To protect the gross margin of these sales, PAL may enter into cotton futures to manage changes in raw material prices. The derivative instruments used are listed and traded on an exchange and are thus valued using quoted prices classified within Level 1 of the fair value hierarchy. As of September 25, 2016, PAL had no futures contracts designated as cash flow hedges. The reconciliation between the Company’s share of the underlying equity of PAL and its investment is as follows:
U.N.F. Industries Ltd. Raw material and production services for UNF are provided by the Company’s 50% joint venture partner 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. UNF America LLC Raw material and production services for UNFA are provided by the Company’s 50% joint venture partner under separate supply and services agreements. UNFA’s fiscal year end is December 31 and it is a limited liability company treated as a partnership for income tax reporting purposes located in Ridgeway, Virginia. In conjunction with the formation of UNFA, the Company entered into a supply agreement with UNF and UNFA whereby the Company agreed to purchase all of its first quality nylon POY requirements for texturing (subject to certain exceptions) from either UNF or UNFA. The agreement has no stated minimum purchase quantities and pricing is negotiated every six months, based on market rates. As of September 25, 2016, the Company’s open purchase orders related to this agreement were $2,248. The Company’s raw material purchases under this supply agreement consist of the following:
As of September 25, 2016 and June 26, 2016, the Company had combined accounts payable due to UNF and UNFA of $2,462 and $3,231, respectively. The Company has determined that UNF and UNFA are variable interest entities and that the Company is the primary beneficiary of these entities, based on the terms of the supply agreement. As a result, these entities should be consolidated in the Company’s financial results. As the Company purchases substantially all of the output from UNF and UNFA, the two entities’ balance sheets constitute 3% or less of the Company’s total assets and total liabilities (when excluding reciprocal balances), and because such balances are not expected to comprise a larger portion in the future, the Company has not included the accounts of UNF and UNFA in its consolidated financial statements. The financial results of UNF and UNFA are included in the Company’s financial statements with a one-month lag, using the equity method of accounting and with intercompany profits eliminated in accordance with the Company’s accounting policy. Other than the supply agreement discussed above, the Company does not provide any other commitments or guarantees related to either UNF or UNFA. Condensed balance sheet and income statement information for the Company’s unconsolidated affiliates (including reciprocal balances) is presented in the following tables. PAL is defined as significant and its information is separately disclosed. PAL does not meet the criteria for segment reporting.
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Commitments and Contingencies |
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Sep. 25, 2016 | |
Commitments And Contingencies Disclosure [Abstract] | |
Commitments and Contingencies Disclosure | 18. Commitments and Contingencies Collective Bargaining Agreements While employees of the Company’s Brazilian operations are unionized, none of the labor force employed by the Company’s domestic or other foreign subsidiaries is currently covered by a collective bargaining agreement. Environmental On September 30, 2004, the Company completed its acquisition of polyester filament manufacturing assets located in Kinston, North Carolina from INVISTA S.a.r.l (“Invista”). The land for the Kinston site was leased pursuant to a 99-year ground lease (“Ground Lease”) with E.I. DuPont de Nemours (“DuPont”). Since 1993, DuPont has been investigating and cleaning up the Kinston site under the supervision of the U.S. Environmental Protection Agency (“EPA”) and the North Carolina Department of Environment and Natural Resources (“DENR”) pursuant to the Resource Conservation and Recovery Act Corrective Action program. The Corrective Action program requires DuPont to identify all potential areas of environmental concern (“AOCs”), assess the extent of containment at the identified AOCs and clean up the AOCs to comply with applicable regulatory standards. Effective March 20, 2008, the Company entered into a Lease Termination Agreement associated with conveyance of certain assets at the Kinston site to DuPont. This agreement terminated the Ground Lease and relieved the Company of any future responsibility for environmental remediation, other than participation with DuPont, if so called upon, with regard to the Company’s period of operation of the Kinston site which was from 2004 to 2008. However, the Company continues to own a satellite service facility acquired in the 2004 transaction with Invista that has contamination from DuPont’s operations and is monitored by DENR. This site has been remediated by DuPont, and DuPont has received authority from DENR to discontinue remediation, other than natural attenuation. DuPont’s duty to monitor and report to DENR will be transferred to the Company in the future, at which time DuPont must pay the Company for seven years of monitoring and reporting costs and the Company will assume responsibility for any future remediation and monitoring of the site. At this time, the Company has no basis to determine if or when it will have any responsibility or obligation with respect to the AOCs or the extent of any potential liability for the same. Operating Leases The Company routinely leases sales and administrative office space, warehousing and distribution centers, manufacturing space, transportation equipment, manufacturing equipment, and other information technology and office equipment from third parties. In addition, Renewables leases farm land for use in growing giant miscanthus. Other Commitments The Company has assumed various financial obligations and commitments in the normal course of its operating and financing activities. Financial obligations are considered to represent known future cash payments that the Company is required to make under existing contractual arrangements. In the course of facilitating the construction of assets (i) in connection with the construction financing arrangement described in Note 9, “Long-Term Debt” and (ii) related to the expansion of the REPREVE® Recycling Center, the Company will incur commitments to equipment vendors and contractors. As of September 25, 2016, such commitments totaled approximately $5,600. |
Related Party Transactions |
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Related Party Transactions [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Related Party Transactions | 19. Related Party Transactions For details regarding the nature of certain related party relationships, see Note 25, “Related Party Transactions,” to the consolidated financial statements in the 2016 Form 10-K. Related party receivables consists of the following:
Related party payables consists of the following:
Related party transactions in excess of $120 for the current or prior fiscal year consist of the matters below:
The balance of a capital lease obligation with Salem Leasing Corporation as of September 25, 2016 and June 26, 2016 was $999 and $1,015, respectively.
Mr. William J. Armfield, IV, a member of the Board of Directors (the “Board”) of Unifi until his passing in July 2016, was a director and the Non-Executive Chairman of, and held an indirect minority equity interest in Cupron, Inc. (“Cupron”). There was no significant activity between Cupron and the Company in July 2016, and therefore, any such transactions or balances in the current and comparative prior periods are omitted from current disclosures.
During the first quarter of fiscal 2017, the Company paid $126 to Mr. William L. Jasper, the Company’s former Chairman and Chief Executive Officer, for consulting fees. As of September 25, 2016, $500 of consulting fees were payable to Mr. Jasper subject to his continued compliance with his consulting agreement with the Company.
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Business Segment Information |
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Sep. 25, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Reporting | 20. Business Segment Information The Company has three reportable segments. Operations and revenues for each segment are described below:
In addition to the Company’s reportable segments, the selected financial information presented below includes an All Other category. All Other consists primarily of Renewables (an operating segment that does not meet quantitative thresholds for reporting) and for-hire transportation services. Revenue for Renewables is primarily derived from (i) facilitating the use of miscanthus grass as bio-fuel through service agreements and (ii) delivering harvested miscanthus grass to poultry producers for animal bedding. For-hire transportation services revenue is derived from performing common carrier services utilizing the Company’s fleet of transportation equipment. The operations within All Other (i) are not subject to review by the chief operating decision maker at a level consistent with the Company’s other operations, (ii) are not regularly evaluated using the same metrics applied to the Company’s other operations and (iii) do not qualify for aggregation with an existing reportable segment. Therefore, such operations are excluded from reportable segments. The Company 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 chief operating decision maker. The accounting policies for the segments are consistent with the Company’s accounting policies. Intersegment sales are omitted from the below financial information, as they are (i) insignificant to the Company’s segments and consolidated operations and (ii) excluded from segment evaluations performed by the chief operating decision maker. Selected financial information is presented below. As described in Note 2, “Basis of Presentation; Condensed Notes,” certain amounts previously reported for the Polyester and Nylon Segments for the three months ended September 27, 2015 have been revised to match the current presentation.
The reconciliations of segment gross profit to consolidated income before income taxes are as follows:
The reconciliations of segment capital expenditures to consolidated capital expenditures are as follows:
The reconciliations of segment total assets to consolidated total assets are as follows:
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Supplemental Cash Flow Information |
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Sep. 25, 2016 | |||||||||||||||||||||||||||||||||||||
Additional Cash Flow Elements And Supplemental Cash Flow Information [Abstract] | |||||||||||||||||||||||||||||||||||||
Supplemental Cash Flow Information | 21. Supplemental Cash Flow Information Cash payments for interest and taxes consist of the following:
Cash payments for taxes shown above consist primarily of income and withholding tax payments made by the Company in both U.S. and foreign jurisdictions. Non-Cash Investing and Financing Activities As of September 25, 2016 and June 26, 2016, $4,841 and $4,197, respectively, were included in accounts payable for unpaid capital expenditures. As of September 27, 2015 and June 28, 2015, $895 and $1,726, respectively, were included in accounts payable for unpaid capital expenditures. During the three months ended September 25, 2016, the Company recorded $2,835 to construction in progress and long-term debt, in connection with the construction financing arrangement described under the heading “—Construction Financing” in Note 9, “Long-Term Debt.” During August 2015, the Company utilized $1,390 of funds held by a qualified intermediary to purchase certain land and building assets. During the three months ended September 27, 2015, the Company entered into capital leases with an aggregate present value of $4,154. |
Significant Accounting Policies (Policies) |
3 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 25, 2016 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accounting Policies [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fiscal Period | The fiscal quarter for the Company and its Chinese subsidiary ended on September 25, 2016, the last Sunday in September. The fiscal quarter for the Company’s Brazilian and Colombian subsidiaries ended on September 30, 2016. There were no significant transactions or events that occurred between the Company’s fiscal quarter end and its subsidiaries’ fiscal quarter end. The three months ended September 25, 2016 and September 27, 2015 each consisted of thirteen fiscal weeks. |
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Reclassification | Reclassifications Certain reclassifications of prior years’ data have been made to conform to the current year presentation. As of the fourth quarter of fiscal 2016, the Company updated the composition of its Polyester and Nylon Segments, intending to better reflect downstream sales for the respective product lines. In connection with such update, for the three months ended September 27, 2015, the Company has reclassified net sales and cost of sales amounts for the respective segments, as reflected in Note 20, “Business Segment Information.”
The Company adopted Accounting Standards Update (“ASU”) 2015-03, Interest—Imputation of Interest (Subtopic 835-30): Simplifying the Presentation of Debt Issuance Costs (“ASU 2015-03”) during the first quarter of fiscal 2017, along with the clarifying guidance in ASU 2015-15, Interest—Imputation of Interest (Subtopic 835-30): Presentation and Subsequent Measurement of Debt Issuance Costs Associated with Line-of-Credit Arrangements—Amendments to SEC Paragraphs Pursuant to Staff Announcement at June 18, 2015 EITF Meeting. As shown in the table below, unamortized debt issuance costs associated with outstanding debt have been reclassified to conform to the new presentation requirements as of September 25, 2016 as follows:
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Basis of Presentation; Condensed Notes (Tables) |
3 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 25, 2016 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Organization Consolidation And Presentation Of Financial Statements [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Unamortized Debt Issuance Costs with Outstanding Debt | As shown in the table below, unamortized debt issuance costs associated with outstanding debt have been reclassified to conform to the new presentation requirements as of September 25, 2016 as follows:
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Receivables, Net (Tables) |
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Sep. 25, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Receivables [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Accounts, Notes, Loans and Financing Receivable | Receivables, net consists of the following:
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Allowance for Credit Losses on Financing Receivables |
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Inventories (Tables) |
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Sep. 25, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Inventory Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Inventories Components | Inventories consists of the following:
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Property, Plant and Equipment, Net (Tables) |
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Sep. 25, 2016 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Property Plant And Equipment [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Property, Plant and Equipment Components | Property, plant and equipment, net (“PP&E”) consists of the following:
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Schedule of Capital Leased Assets | Assets under capital leases consists of the following:
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Schedule of Depreciation Expense and Repairs and Maintenance Expense |
Depreciation expense and repairs and maintenance expenses were as follows:
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Intangible Assets, Net (Tables) |
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Sep. 25, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Goodwill And Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Components of Intangible Assets, Net | Intangible assets, net consists of the following:
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Amortization Expense for Intangible Assets | Total amortization expense for intangible assets was as follows:
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Accrued Expenses (Tables) |
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Sep. 25, 2016 | |||||||||||||||||||||||||||||||||||||
Payables And Accruals [Abstract] | |||||||||||||||||||||||||||||||||||||
Schedule of Accrued Liabilities | Accrued expenses consists of the following:
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Long-Term Debt (Tables) |
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Sep. 25, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Long-Term Debt Components | The following table presents the total balances outstanding for the Company’s debt obligations, their scheduled maturity dates and the weighted average interest rates for borrowings as well as the applicable current portion of long-term debt:
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Scheduled Maturities of Outstanding Debt Obligations | The following table presents the scheduled maturities of the Company’s outstanding debt obligations for the remainder of fiscal 2017 and the fiscal years thereafter:
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Other Long-Term Liabilities (Tables) |
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Sep. 25, 2016 | |||||||||||||||||||||||||||||||||||||
Other Liabilities Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||
Other Long-Term Liabilities Components | Other long-term liabilities consists of the following:
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Income Taxes (Tables) |
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Sep. 25, 2016 | ||||||||||||||||||||||||||||||||||||||||||||||||
Income Tax Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Provision for Income Taxes | The provision for income taxes was as follows:
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Schedule of Components of the Company's Deferred Tax Valuation Allowance | Components of the Company’s deferred tax valuation allowance are as follows:
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Shareholders' Equity (Tables) |
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Sep. 25, 2016 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stockholders Equity Note [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Repurchases and Retirements of Common Stock | The following table summarizes the Company’s repurchases and retirements of its common stock under Board-approved stock repurchase programs for the fiscal periods noted.
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Stock-Based Compensation (Tables) |
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Sep. 25, 2016 | ||||||||||||||||||||||||||
Disclosure Of Compensation Related Costs Sharebased Payments Abstract | ||||||||||||||||||||||||||
Summary of Number of Securities Remaining Available for Future Issuance | The following table provides information as of September 25, 2016 with respect to the number of securities remaining available for future issuance under the 2013 Plan:
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Accumulated Other Comprehensive Loss (Tables) |
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Sep. 25, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Accumulated Other Comprehensive Income Loss Net Of Tax [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Changes in Accumulated Other Comprehensive Loss, Net of Tax | The components and the changes in accumulated other comprehensive loss, net of tax, as applicable, consist of the following:
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Earnings Per Share (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 25, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Computation of Basic and Diluted Earnings Per Share | The components of the calculation of earnings per share (“EPS”) are as follows:
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Investments in Unconsolidated Affiliates and Variable Interest Entities (Tables) |
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Sep. 25, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule Of Equity Method Investments [Line Items] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Unaudited, Condensed Balance Sheet Information for Unconsolidated Affiliates | Condensed balance sheet and income statement information for the Company’s unconsolidated affiliates (including reciprocal balances) is presented in the following tables. PAL is defined as significant and its information is separately disclosed. PAL does not meet the criteria for segment reporting.
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Income Statement Information [Member] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule Of Equity Method Investments [Line Items] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Unaudited, Condensed Income Statement Information for Unconsolidated Affiliates | Condensed balance sheet and income statement information for the Company’s unconsolidated affiliates (including reciprocal balances) is presented in the following tables. PAL is defined as significant and its information is separately disclosed. PAL does not meet the criteria for segment reporting.
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Balance Sheet Information | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule Of Equity Method Investments [Line Items] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Raw Material Purchases under Supply Agreement | The Company’s raw material purchases under this supply agreement consist of the following:
|
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Parkdale America LLC [Member] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule Of Equity Method Investments [Line Items] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Reconciliation Between Share of Underlying Equity | The reconciliation between the Company’s share of the underlying equity of PAL and its investment is as follows:
|
Related Party Transactions (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Sep. 25, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Related Party Transactions [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Related Party Receivables and Payables | Related party receivables consists of the following:
Related party payables consists of the following:
|
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Schedule of Related Party Transactions | Related party transactions in excess of $120 for the current or prior fiscal year consist of the matters below:
|
Business Segment Information (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 25, 2016 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Selected Financial Information for Polyester, Nylon, International and Other Segments | Selected financial information is presented below. As described in Note 2, “Basis of Presentation; Condensed Notes,” certain amounts previously reported for the Polyester and Nylon Segments for the three months ended September 27, 2015 have been revised to match the current presentation.
|
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Reconciliations of Segment Gross Profit (Loss) to Consolidated Income Before Income Taxes | The reconciliations of segment gross profit to consolidated income before income taxes are as follows:
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Reconciliation of Segment Capital Expenditures to Consolidated Capital Expenditures |
The reconciliations of segment capital expenditures to consolidated capital expenditures are as follows:
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Reconciliation of Segment Total Assets to Consolidated Total Assets | The reconciliations of segment total assets to consolidated total assets are as follows:
|
Supplemental Cash Flow Information (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Sep. 25, 2016 | |||||||||||||||||||||||||||||||||||||
Supplemental Cash Flow Information [Abstract] | |||||||||||||||||||||||||||||||||||||
Schedule of Cash Payments for Interest and Taxes | Cash payments for interest and taxes consist of the following:
|
Basis of Presentation; Condensed Notes - Schedule of Unamortized Debt Issuance Costs with Outstanding Debt (Details) - USD ($) $ in Thousands |
Sep. 25, 2016 |
Jun. 26, 2016 |
Sep. 25, 2015 |
---|---|---|---|
New Accounting Pronouncements Or Change In Accounting Principle [Line Items] | |||
Debt issuance costs (within other non-current assets) | $ 1,320 | $ 1,421 | |
Total assets | 547,973 | 525,442 | |
Long-term debt | 115,821 | 107,805 | |
Total liabilities | $ 210,974 | 198,497 | |
Adjustments Due to Adoption of ASU 2015-03 [Member] | |||
New Accounting Pronouncements Or Change In Accounting Principle [Line Items] | |||
Debt issuance costs (within other non-current assets) | $ (1,421) | ||
Total assets | (1,421) | ||
Long-term debt | (1,421) | ||
Total liabilities | $ (1,421) | ||
As Previously Reported [Member] | |||
New Accounting Pronouncements Or Change In Accounting Principle [Line Items] | |||
Debt issuance costs (within other non-current assets) | 1,421 | ||
Total assets | 526,863 | ||
Long-term debt | 109,226 | ||
Total liabilities | $ 199,918 |
Receivables, Net - Schedule of Accounts, Notes, Loans and Financing Receivable (Details) - USD ($) $ in Thousands |
Sep. 25, 2016 |
Jun. 26, 2016 |
---|---|---|
Receivables [Abstract] | ||
Customer receivables | $ 84,757 | $ 86,361 |
Allowance for uncollectible accounts | (2,124) | (2,839) |
Reserves for yarn quality claims | (982) | (795) |
Net customer receivables | 81,651 | 82,727 |
Related party receivables | 5 | 7 |
Other receivables | 1,256 | 688 |
Total receivables, net | $ 82,912 | $ 83,422 |
Receivables, Net - Allowance for Credit Losses on Financing Receivables (Details) - Allowance for Doubtful Accounts [Member] $ in Thousands |
3 Months Ended |
---|---|
Sep. 25, 2016
USD ($)
| |
Valuation And Qualifying Accounts Disclosure [Line Items] | |
Balance at June 26, 2016 | $ (2,839) |
Benefit to costs and expenses | 367 |
Translation activity | 11 |
Deductions | 337 |
Balance at September 25, 2016 | $ (2,124) |
Inventories - Inventories Components (Details) - USD ($) $ in Thousands |
Sep. 25, 2016 |
Jun. 26, 2016 |
---|---|---|
Inventory Disclosure [Abstract] | ||
Raw materials | $ 39,538 | $ 37,162 |
Supplies | 6,004 | 5,387 |
Work in process | 7,217 | 6,595 |
Finished goods | 58,831 | 55,771 |
Gross inventories | 111,590 | 104,915 |
Inventory reserves | (1,588) | (1,383) |
Total inventories | $ 110,002 | $ 103,532 |
Property, Plant and Equipment, Net - Schedule of Capital Leased Assets (Details) - USD ($) $ in Thousands |
Sep. 25, 2016 |
Jun. 26, 2016 |
---|---|---|
Property Plant And Equipment [Line Items] | ||
Gross assets under capital leases | $ 21,495 | $ 21,525 |
Machinery and Equipment [Member] | ||
Property Plant And Equipment [Line Items] | ||
Gross assets under capital leases | 14,745 | 14,745 |
Transportation Equipment [Member] | ||
Property Plant And Equipment [Line Items] | ||
Gross assets under capital leases | 5,897 | 5,927 |
Building Improvements [Member] | ||
Property Plant And Equipment [Line Items] | ||
Gross assets under capital leases | $ 853 | $ 853 |
Property, Plant and Equipment, Net - Schedule of Depreciation Expense and Repairs and Maintenance Expense (Details) - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Sep. 25, 2016 |
Sep. 27, 2015 |
|
Property Plant And Equipment [Abstract] | ||
Depreciation expense | $ 4,214 | $ 3,842 |
Repairs and maintenance expenses | $ 4,240 | $ 4,496 |
Intangible Assets, Net - Components of Intangible Assets, Net (Details) - USD ($) $ in Thousands |
Sep. 25, 2016 |
Jun. 26, 2016 |
---|---|---|
Finite Lived Intangible Assets [Line Items] | ||
Intangible assets, gross | $ 28,804 | $ 28,799 |
Intangible assets, accumulated amortization | (25,419) | (25,058) |
Total intangible assets, net | 3,385 | 3,741 |
Customer Lists [Member] | ||
Finite Lived Intangible Assets [Line Items] | ||
Intangible assets, gross | 23,615 | 23,615 |
Intangible assets, accumulated amortization | (20,920) | (20,665) |
Non-Compete Agreements, License, Trademarks and Other [Member] | ||
Finite Lived Intangible Assets [Line Items] | ||
Intangible assets, gross | 5,189 | 5,184 |
Intangible assets, accumulated amortization | $ (4,499) | $ (4,393) |
Intangible Assets, Net - Amortization Expense for Intangible Assets (Details) - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Sep. 25, 2016 |
Sep. 27, 2015 |
|
Goodwill And Intangible Assets Disclosure [Abstract] | ||
Amortization expense | $ 361 | $ 432 |
Accrued Expenses - Schedule of Accrued Liabilities (Details) - USD ($) $ in Thousands |
Sep. 25, 2016 |
Jun. 26, 2016 |
---|---|---|
Payables And Accruals [Abstract] | ||
Payroll and fringe benefits | $ 8,986 | $ 10,370 |
Other | 8,264 | 8,104 |
Total accrued expenses | $ 17,250 | $ 18,474 |
Long-Term Debt - Long-Term Debt Components (Details) (Parenthetical) $ in Thousands |
3 Months Ended |
---|---|
Sep. 25, 2016
USD ($)
| |
Debt Instrument [Line Items] | |
Capital lease obligations, scheduled maturity start date | 2017-01 |
Capital lease obligations, scheduled maturity end date | 2027-11 |
Interest Rate Swap [Member] | |
Debt Instrument [Line Items] | |
Derivative, Notional Amount | $ 50,000 |
Capital Lease Obligations [Member] | Minimum [Member] | |
Debt Instrument [Line Items] | |
Debt Instrument, Interest Rate, Effective Percentage | 2.30% |
Capital Lease Obligations [Member] | Maximum [Member] | |
Debt Instrument [Line Items] | |
Debt Instrument, Interest Rate, Effective Percentage | 4.60% |
Long-Term Debt - Additional Information (Details) $ in Thousands |
3 Months Ended | |
---|---|---|
Sep. 25, 2016 |
Mar. 26, 2015
USD ($)
|
|
Construction Loans [Member] | ||
Debt Instrument [Line Items] | ||
Debt Instrument, Monthly Payments, Number | 60 | |
Construction Loans [Member] | During the Construction Period [Member] | ||
Debt Instrument [Line Items] | ||
Debt Instrument, Interest Rate, Stated Percentage | 3.50% | |
Construction Loans [Member] | After the Construction Period [Member] | ||
Debt Instrument [Line Items] | ||
Debt Instrument, Interest Rate, Stated Percentage | 3.20% | |
ABL Facility [Member] | ||
Debt Instrument [Line Items] | ||
Debt Agreement Maximum Borrowing Capacity | $ 200,000 | |
Term Loan Maximum Borrowing Capacity | 100,000 | |
Debt instrument maturity date | Mar. 26, 2020 | |
ABL Facility [Member] | Revolving Credit Facility [Member] | ||
Debt Instrument [Line Items] | ||
Line of Credit Facility, Maximum Borrowing Capacity | $ 100,000 |
Long-Term Debt - Scheduled Maturities of Outstanding Debt Obligations (Details) $ in Thousands |
Sep. 25, 2016
USD ($)
|
|||
---|---|---|---|---|
Debt Instrument Redemption [Line Items] | ||||
2017 | $ 10,313 | [1] | ||
2018 | 13,654 | [1] | ||
2019 | 13,585 | [1] | ||
2020 | 80,131 | [1] | ||
2021 | 1,533 | [1] | ||
Thereafter | 2,194 | [1] | ||
ABL Revolver [Member] | ||||
Debt Instrument Redemption [Line Items] | ||||
2020 | 14,700 | |||
ABL Term Loan [Member] | ||||
Debt Instrument Redemption [Line Items] | ||||
2017 | 7,125 | |||
2018 | 9,500 | |||
2019 | 9,500 | |||
2020 | 61,750 | |||
Renewables Promissory Note [Member] | ||||
Debt Instrument Redemption [Line Items] | ||||
2018 | 26 | |||
2019 | 27 | |||
2020 | 28 | |||
2021 | 29 | |||
Renewables Term Loan [Member] | ||||
Debt Instrument Redemption [Line Items] | ||||
2020 | 1,111 | |||
2021 | 1,333 | |||
Thereafter | 1,556 | |||
Capital Lease Obligations [Member] | ||||
Debt Instrument Redemption [Line Items] | ||||
2017 | 3,188 | |||
2018 | 4,128 | |||
2019 | 4,058 | |||
2020 | 2,542 | |||
2021 | 171 | |||
Thereafter | $ 638 | |||
|
Long-Term Debt - Scheduled Maturities of Outstanding Debt Obligations (Details) (Parenthetical) $ in Thousands |
Sep. 25, 2016
USD ($)
|
---|---|
Debt Disclosure [Abstract] | |
Long-term Construction Loan | $ 9,464 |
Other Long-Term Liabilities - Other Long-Term Liabilities Components (Details) - USD ($) $ in Thousands |
Sep. 25, 2016 |
Jun. 26, 2016 |
---|---|---|
Other Liabilities Disclosure [Abstract] | ||
Uncertain tax positions | $ 4,603 | $ 4,463 |
Other | 5,912 | 5,930 |
Total other long-term liabilities | $ 10,515 | $ 10,393 |
Income Taxes - Schedule of Provision for Income Taxes (Details) - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Sep. 25, 2016 |
Sep. 27, 2015 |
|
Income Tax Disclosure [Abstract] | ||
Provision for income taxes | $ 3,726 | $ 3,940 |
Effective tax rate | 29.00% | 33.60% |
Income Taxes - Additional Information (Details) |
3 Months Ended |
---|---|
Sep. 25, 2016 | |
Income Tax Disclosure [Abstract] | |
Federal statutory tax rate | 35.00% |
Income Taxes - Schedule of Components of the Company's Deferred Tax Valuation Allowance (Details) - USD ($) $ in Thousands |
Sep. 25, 2016 |
Jun. 26, 2016 |
||
---|---|---|---|---|
Valuation Allowance [Line Items] | ||||
Deferred tax valuation allowance | $ (13,000) | $ (13,550) | ||
Investment in Former Domestic Unconsolidated Affiliate [Member] | ||||
Valuation Allowance [Line Items] | ||||
Deferred tax valuation allowance | (6,320) | (6,418) | ||
Equity-method Investment in Parkdale America LLC [Member] | ||||
Valuation Allowance [Line Items] | ||||
Deferred tax valuation allowance | (1,650) | (2,102) | ||
Other [Member] | ||||
Valuation Allowance [Line Items] | ||||
Deferred tax valuation allowance | [1] | $ (5,030) | $ (5,030) | |
|
Shareholders' Equity - Repurchases and Retirements of Common Stock (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands |
12 Months Ended | 51 Months Ended | |||
---|---|---|---|---|---|
Jun. 26, 2016 |
Jun. 28, 2015 |
Jun. 29, 2014 |
Jun. 30, 2013 |
Sep. 25, 2016 |
|
Stockholders Equity Note [Abstract] | |||||
Stock Repurchased and Retired During Period, Shares | 206 | 349 | 1,524 | 1,068 | 3,147 |
Average price paid per share (in dollars per share) | $ 30.13 | $ 29.72 | $ 23.96 | $ 18.08 | |
Maximum approximate dollar value | $ 27,603 |
Shareholders' Equity - Additional Information (Details) - USD ($) |
3 Months Ended | 12 Months Ended | |
---|---|---|---|
Sep. 25, 2016 |
Jun. 26, 2016 |
Jun. 28, 2015 |
|
Stockholders Equity Note [Abstract] | |||
Payments of Dividends | $ 0 | $ 0 | $ 0 |
Stock-Based Compensation - Additional Information (Details) - shares |
3 Months Ended | ||
---|---|---|---|
Sep. 25, 2016 |
Sep. 27, 2015 |
Oct. 23, 2013 |
|
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercises in Period | 171,000 | ||
RSUs Issued to Non-Employee Directors [Member] | |||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Gross | 0 | 82,000 | |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period | 0 | 0 | |
The 2013 Incentive Compensation Plan [Member] | |||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Authorized | 1,000,000 | 1,000,000 | |
The 2013 Incentive Compensation Plan [Member] | RSUs Issued to Non-Employee Directors [Member] | |||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period | 70,000 |
Stock-Based Compensation - Summary of Number of Securities Remaining Available for Future Issuance (Details) - shares |
3 Months Ended | ||
---|---|---|---|
Sep. 25, 2016 |
Sep. 27, 2015 |
Oct. 23, 2013 |
|
RSUs Issued to Non-Employee Directors [Member] | |||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||
Less: Awards granted to employees | 0 | (82,000) | |
Less: Awards granted to non-employee directors | 0 | 0 | |
The 2013 Incentive Compensation Plan [Member] | |||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||
Authorized under the 2013 Plan | 1,000,000 | 1,000,000 | |
Available for issuance under the 2013 Plan | 976,000 | ||
The 2013 Incentive Compensation Plan [Member] | Awards Expired, Forfeited or Otherwise Terminated Unexercised From the 2008 LTIP or 2013 Plan [Member] | |||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||
Plus: Awards expired, forfeited or otherwise terminated unexercised from the 2008 LTIP or 2013 Plan | 304,000 | ||
The 2013 Incentive Compensation Plan [Member] | Employee Stock Option [Member] | |||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||
Less: Awards granted to employees | (258,000) | ||
The 2013 Incentive Compensation Plan [Member] | RSUs Issued to Non-Employee Directors [Member] | |||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||
Less: Awards granted to non-employee directors | (70,000) |
Accumulated Other Comprehensive Loss - Schedule of Changes in Accumulated Other Comprehensive Loss, Net of Tax (Details) - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Sep. 25, 2016 |
Sep. 27, 2015 |
|
Accumulated Other Comprehensive Income Loss [Line Items] | ||
Balance at June 26, 2016 | $ (29,751) | |
Other comprehensive (loss) income, net of tax | (803) | $ (11,418) |
Balance at September 25, 2016 | (30,554) | |
Foreign Currency Translation Adjustments [Member] | ||
Accumulated Other Comprehensive Income Loss [Line Items] | ||
Balance at June 26, 2016 | (29,681) | |
Other comprehensive (loss) income, net of tax | (822) | |
Balance at September 25, 2016 | (30,503) | |
Reclassification Adjustments on Interest Rate Swap [Member] | ||
Accumulated Other Comprehensive Income Loss [Line Items] | ||
Balance at June 26, 2016 | (70) | |
Other comprehensive (loss) income, net of tax | 19 | |
Balance at September 25, 2016 | $ (51) |
Earnings Per Share - Computation of Basic and Diluted Earnings Per Share (Details) - USD ($) shares in Thousands, $ in Thousands |
3 Months Ended | |
---|---|---|
Sep. 25, 2016 |
Sep. 27, 2015 |
|
Earnings Per Share [Abstract] | ||
Net income attributable to Unifi, Inc. | $ 9,403 | $ 8,025 |
Basic weighted average shares (in shares) | 17,966 | 17,921 |
Net potential common share equivalents – stock options and RSUs (in shares) | 387 | 629 |
Diluted weighted average shares (in shares) | 18,353 | 18,550 |
Excluded from diluted weighted average shares: | ||
Anti-dilutive common share equivalents (in shares) | 155 | 155 |
Investments in Unconsolidated Affiliates and Variable Interest Entities - Additional Information (Details) $ in Thousands |
3 Months Ended | |
---|---|---|
Sep. 25, 2016
USD ($)
Entity
FuturesContract
|
Jun. 26, 2016
USD ($)
|
|
Schedule Of Equity Method Investments [Line Items] | ||
Unconsolidated Entities, Number | Entity | 3 | |
Equity Method Investments | $ 117,239 | $ 117,412 |
Accounts Payable, Related Parties | 262 | 250 |
UNF and UNF America [Member] | ||
Schedule Of Equity Method Investments [Line Items] | ||
Accounts Payable, Related Parties | $ 2,462 | $ 3,231 |
Percentage of Current and Total Assets and Total Liabilities Accounted for by Equity Method Investments | 3.00% | |
Parkdale America LLC [Member] | ||
Schedule Of Equity Method Investments [Line Items] | ||
Equity Method Investments | $ 113,538 | |
Number of Futures Contracts Designated as Cash Flow Hedges | FuturesContract | 0 | |
Equity Method Investment, Ownership Percentage | 34.00% | |
UNF and UNF America [Member] | ||
Schedule Of Equity Method Investments [Line Items] | ||
Equity Method Investments | $ 3,701 | |
Purchase Commitment, Remaining Minimum Amount Committed | $ 2,248 | |
UNF [Member] | ||
Schedule Of Equity Method Investments [Line Items] | ||
Equity Method Investment, Ownership Percentage | 50.00% | |
UNF America [Member] | ||
Schedule Of Equity Method Investments [Line Items] | ||
Equity Method Investment, Ownership Percentage | 50.00% |
Investments in Unconsolidated Affiliates and Variable Interest Entities - Schedule of Reconciliation Between Share of Underlying Equity (Details) - USD ($) $ in Thousands |
Sep. 25, 2016 |
Jun. 26, 2016 |
---|---|---|
Schedule Of Equity Method Investments [Line Items] | ||
Equity Method Investments | $ 117,239 | $ 117,412 |
Parkdale America LLC [Member] | ||
Schedule Of Equity Method Investments [Line Items] | ||
Underlying equity as of September 25, 2016 | 131,794 | |
Equity Method Investments | 113,538 | |
Parkdale America LLC [Member] | Initial Excess Capital Contributions [Member] | ||
Schedule Of Equity Method Investments [Line Items] | ||
Equity method investment difference between carrying amount and underlying equity | 53,363 | |
Parkdale America LLC [Member] | Impairment Charge Recorded in 2007 [Member] | ||
Schedule Of Equity Method Investments [Line Items] | ||
Equity method investment difference between carrying amount and underlying equity | (74,106) | |
Parkdale America LLC [Member] | Antitrust Lawsuit Against PAL [Member] | ||
Schedule Of Equity Method Investments [Line Items] | ||
Equity method investment difference between carrying amount and underlying equity | 2,652 | |
Parkdale America LLC [Member] | EAP Adjustments [Member] | ||
Schedule Of Equity Method Investments [Line Items] | ||
Equity method investment difference between carrying amount and underlying equity | $ (165) |
Investments in Unconsolidated Affiliates and Variable Interest Entities - Schedule of Raw Material Purchases under Supply Agreement (Details) - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Sep. 25, 2016 |
Sep. 27, 2015 |
|
UNF [Member] | ||
Schedule Of Equity Method Investments [Line Items] | ||
Raw material purchases under supply agreement | $ 778 | $ 1,021 |
UNF America [Member] | ||
Schedule Of Equity Method Investments [Line Items] | ||
Raw material purchases under supply agreement | 5,388 | 7,142 |
UNF and UNF America [Member] | ||
Schedule Of Equity Method Investments [Line Items] | ||
Raw material purchases under supply agreement | $ 6,166 | $ 8,163 |
Investments in Unconsolidated Affiliates and Variable Interest Entities - Schedule of Unaudited, Condensed Balance Sheet Information for Unconsolidated Affiliates (Details) - USD ($) $ in Thousands |
Sep. 25, 2016 |
Jun. 26, 2016 |
---|---|---|
Schedule Of Equity Method Investments [Line Items] | ||
Current assets | $ 264,352 | $ 256,978 |
Noncurrent assets | 197,610 | 204,320 |
Current liabilities | 62,484 | 60,969 |
Noncurrent liabilities | 2,951 | 3,057 |
Shareholders’ equity and capital accounts | 396,527 | 397,272 |
Unifi’s portion of undistributed earnings | 46,144 | |
Parkdale America LLC [Member] | ||
Schedule Of Equity Method Investments [Line Items] | ||
Current assets | 253,137 | 244,197 |
Noncurrent assets | 196,580 | 203,251 |
Current liabilities | 59,138 | 56,921 |
Noncurrent liabilities | 2,951 | 3,057 |
Shareholders’ equity and capital accounts | 387,628 | 387,470 |
Unifi’s portion of undistributed earnings | 44,711 | |
UNF and UNF America [Member] | ||
Schedule Of Equity Method Investments [Line Items] | ||
Current assets | 11,215 | 12,781 |
Noncurrent assets | 1,030 | 1,069 |
Current liabilities | 3,346 | 4,048 |
Shareholders’ equity and capital accounts | 8,899 | $ 9,802 |
Unifi’s portion of undistributed earnings | $ 1,433 |
Investments in Unconsolidated Affiliates and Variable Interest Entities - Schedule of Unaudited, Condensed Income Statement Information for Unconsolidated Affiliates (Details) - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Sep. 25, 2016 |
Sep. 27, 2015 |
|
Schedule Of Equity Method Investments [Line Items] | ||
Net sales | $ 211,902 | $ 233,414 |
Gross profit | 7,041 | 9,717 |
Income from operations | 1,946 | 5,410 |
Net income | 1,971 | 7,587 |
Depreciation and amortization | 10,481 | 9,731 |
Cash received by PAL under cotton rebate program | 4,127 | 3,184 |
Earnings recognized by PAL for cotton rebate program | 3,889 | 4,354 |
Distributions received | 750 | 1,947 |
Parkdale America LLC [Member] | ||
Schedule Of Equity Method Investments [Line Items] | ||
Net sales | 205,900 | 224,065 |
Gross profit | 5,496 | 7,387 |
Income from operations | 861 | 3,561 |
Net income | 874 | 5,729 |
Depreciation and amortization | 10,442 | 9,694 |
Cash received by PAL under cotton rebate program | 4,127 | 3,184 |
Earnings recognized by PAL for cotton rebate program | 3,889 | 4,354 |
Distributions received | 947 | |
UNF and UNF America [Member] | ||
Schedule Of Equity Method Investments [Line Items] | ||
Net sales | 6,002 | 9,349 |
Gross profit | 1,545 | 2,330 |
Income from operations | 1,085 | 1,849 |
Net income | 1,097 | 1,858 |
Depreciation and amortization | 39 | 37 |
Distributions received | $ 750 | $ 1,000 |
Commitments and Contingencies - Additional Information (Details) - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Sep. 30, 2004 |
Sep. 25, 2016 |
|
Commitments And Contingencies Disclosure [Abstract] | ||
The Term of a Former Ground Lease | 99 years | |
Number of Years of Monitoring and Reporting Costs of an Individual Site | 7 years | |
Expansion of Recycling Center [Member] | ||
Long Term Purchase Commitment [Line Items] | ||
Purchase Obligation | $ 5,600 |
Related Party Transactions - Related Party Receivables and Payables (Details) - USD ($) $ in Thousands |
Sep. 25, 2016 |
Jun. 26, 2016 |
---|---|---|
Related Party Transaction [Line Items] | ||
Related party receivables | $ 5 | $ 7 |
Related party payables | 262 | 250 |
Salem Global Logistics Inc [Member] | ||
Related Party Transaction [Line Items] | ||
Related party receivables | 5 | 7 |
Salem Leasing Corporation [Member] | ||
Related Party Transaction [Line Items] | ||
Related party payables | $ 262 | $ 250 |
Related Party Transactions - Additional Information (Details) - USD ($) $ in Thousands |
3 Months Ended | ||
---|---|---|---|
Sep. 25, 2016 |
Sep. 27, 2015 |
Jun. 26, 2016 |
|
Certain Executive Officers [Member] | |||
Related Party Transaction, Threshold for Individual Disclosure | $ 120 | ||
Salem Leasing Corporation [Member] | |||
Capital Lease Obligations | 999 | $ 1,015 | |
Related Party Transaction, Expenses from Transactions with Related Party | 978 | $ 945 | |
Mr. William L. Jasper [Member] | |||
Related Party Transaction, Expenses from Transactions with Related Party | 126 | ||
Accrual for Consulting and Transition Fees | $ 500 |
Related Party Transactions - Schedule of Related Party Transactions (Details) - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Sep. 25, 2016 |
Sep. 27, 2015 |
|
Salem Leasing Corporation [Member] | ||
Related Party Transaction [Line Items] | ||
Expenses with related party | $ 978 | $ 945 |
Salem Global Logistics Inc [Member] | ||
Related Party Transaction [Line Items] | ||
Revenues from related parties | $ 21 | $ 62 |
Business Segment Information - Additional Information (Details) |
3 Months Ended |
---|---|
Sep. 25, 2016
Segment
| |
Segment Reporting [Abstract] | |
Number of Reportable Segments | 3 |
Business Segment Information - Selected Financial Information for Polyester, Nylon, International and Other Segments (Details) - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Sep. 25, 2016 |
Sep. 27, 2015 |
|
Segment Reporting Information [Line Items] | ||
Net sales | $ 159,969 | $ 162,165 |
Cost of sales | 136,422 | 141,181 |
Gross profit | 23,547 | 20,984 |
Segment depreciation expense | 4,116 | 3,702 |
Segment Profit (Loss) | 27,663 | 24,686 |
Polyester [Member] | ||
Segment Reporting Information [Line Items] | ||
Net sales | 84,685 | 94,606 |
Cost of sales | 76,235 | 85,008 |
Gross profit | 8,450 | 9,598 |
Segment depreciation expense | 3,108 | 2,851 |
Segment Profit (Loss) | 11,558 | 12,449 |
Nylon [Member] | ||
Segment Reporting Information [Line Items] | ||
Net sales | 28,495 | 36,638 |
Cost of sales | 25,358 | 30,765 |
Gross profit | 3,137 | 5,873 |
Segment depreciation expense | 510 | 478 |
Segment Profit (Loss) | 3,647 | 6,351 |
International [Member] | ||
Segment Reporting Information [Line Items] | ||
Net sales | 45,344 | 29,371 |
Cost of sales | 33,074 | 23,780 |
Gross profit | 12,270 | 5,591 |
Segment depreciation expense | 246 | 221 |
Segment Profit (Loss) | 12,516 | 5,812 |
Other Segments [Member] | ||
Segment Reporting Information [Line Items] | ||
Net sales | 1,445 | 1,550 |
Cost of sales | 1,755 | 1,628 |
Gross profit | (310) | (78) |
Segment depreciation expense | 252 | 152 |
Segment Profit (Loss) | $ (58) | $ 74 |
Business Segment Information - Reconciliations of Segment Gross Profit (Loss) to Consolidated Income Before Income Taxes (Details) - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Sep. 25, 2016 |
Sep. 27, 2015 |
|
Segment Reporting Reconciling Item For Operating Profit Loss From Segment To Consolidated [Line Items] | ||
Gross profit (loss) | $ 23,547 | $ 20,984 |
Selling, general and administrative expenses | 11,410 | 10,830 |
(Benefit) provision for bad debts | (367) | 613 |
Other operating income, net | (70) | (146) |
Operating income | 12,574 | 9,687 |
Interest income | (146) | (163) |
Interest expense | 692 | 984 |
Equity in earnings of unconsolidated affiliates | (840) | (2,860) |
Income before income taxes | 12,868 | 11,726 |
Polyester [Member] | ||
Segment Reporting Reconciling Item For Operating Profit Loss From Segment To Consolidated [Line Items] | ||
Gross profit (loss) | 8,450 | 9,598 |
Nylon [Member] | ||
Segment Reporting Reconciling Item For Operating Profit Loss From Segment To Consolidated [Line Items] | ||
Gross profit (loss) | 3,137 | 5,873 |
International [Member] | ||
Segment Reporting Reconciling Item For Operating Profit Loss From Segment To Consolidated [Line Items] | ||
Gross profit (loss) | 12,270 | 5,591 |
Other Segments [Member] | ||
Segment Reporting Reconciling Item For Operating Profit Loss From Segment To Consolidated [Line Items] | ||
Gross profit (loss) | $ (310) | $ (78) |
Business Segment Information - Reconciliation of Segment Capital Expenditures to Consolidated Capital Expenditures (Details) - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Sep. 25, 2016 |
Sep. 27, 2015 |
|
Segment Reporting Other Significant Reconciling Item [Line Items] | ||
Capital expenditures | $ 10,135 | $ 15,875 |
Operating Segments [Member] | ||
Segment Reporting Other Significant Reconciling Item [Line Items] | ||
Capital expenditures | 10,054 | 15,048 |
Operating Segments [Member] | Polyester [Member] | ||
Segment Reporting Other Significant Reconciling Item [Line Items] | ||
Capital expenditures | 7,875 | 13,973 |
Operating Segments [Member] | Nylon [Member] | ||
Segment Reporting Other Significant Reconciling Item [Line Items] | ||
Capital expenditures | 242 | 563 |
Operating Segments [Member] | International [Member] | ||
Segment Reporting Other Significant Reconciling Item [Line Items] | ||
Capital expenditures | 1,937 | 512 |
Corporate, Non-Segment [Member] | ||
Segment Reporting Other Significant Reconciling Item [Line Items] | ||
Capital expenditures | $ 81 | $ 827 |
Business Segment Information - Reconciliation of Segment Total Assets to Consolidated Total Assets (Details) - USD ($) $ in Thousands |
Sep. 25, 2016 |
Jun. 26, 2016 |
---|---|---|
Segment Reporting Asset Reconciling Item [Line Items] | ||
Total assets | $ 547,973 | $ 525,442 |
Other current assets | 5,632 | 4,790 |
Property, plant and equipment, net | 194,261 | 185,101 |
Other non-current assets | 4,947 | 4,909 |
Investments in unconsolidated affiliates | 117,239 | 117,412 |
Operating Segments [Member] | ||
Segment Reporting Asset Reconciling Item [Line Items] | ||
Total assets | 399,797 | 379,896 |
Operating Segments [Member] | Polyester [Member] | ||
Segment Reporting Asset Reconciling Item [Line Items] | ||
Total assets | 256,130 | 243,105 |
Operating Segments [Member] | Nylon [Member] | ||
Segment Reporting Asset Reconciling Item [Line Items] | ||
Total assets | 62,358 | 63,141 |
Operating Segments [Member] | International [Member] | ||
Segment Reporting Asset Reconciling Item [Line Items] | ||
Total assets | 81,309 | 73,650 |
Corporate, Non-Segment [Member] | ||
Segment Reporting Asset Reconciling Item [Line Items] | ||
Other current assets | 9,874 | 6,674 |
Property, plant and equipment, net | 16,245 | 16,597 |
Other non-current assets | 4,818 | 4,863 |
Investments in unconsolidated affiliates | $ 117,239 | $ 117,412 |
Supplemental Cash Flow Information - Schedule of Cash Payments for Interest and Taxes (Details) - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Sep. 25, 2016 |
Sep. 27, 2015 |
|
Supplemental Cash Flow Elements [Abstract] | ||
Interest, net of capitalized interest of $223 and $76, respectively | $ 641 | $ 762 |
Income taxes, net of refunds | $ 2,909 | $ 1,250 |
Supplemental Cash Flow Information - Schedule of Cash Payments for Interest and Taxes (Details) (Parenthetical) - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Sep. 25, 2016 |
Sep. 27, 2015 |
|
Supplemental Cash Flow Elements [Abstract] | ||
Interest capitalized | $ 223 | $ 76 |
Supplemental Cash Flow Information - Additional Information (Details) - USD ($) $ in Thousands |
1 Months Ended | 3 Months Ended | 12 Months Ended | ||
---|---|---|---|---|---|
Aug. 31, 2015 |
Sep. 25, 2016 |
Sep. 27, 2015 |
Jun. 26, 2016 |
Jun. 28, 2015 |
|
Building and Machinery [Member] | Construction Loans [Member] | |||||
Supplemental Cash Flow Information [Line Items] | |||||
Construction in Progress Expenditures Incurred but Not yet Paid | $ 2,835 | ||||
Machinery and Equipment [Member] | |||||
Supplemental Cash Flow Information [Line Items] | |||||
Noncash or Part Noncash Acquisition, Other Assets Acquired | $ 1,390 | ||||
Capital Lease Obligations Incurred | $ 4,154 | ||||
Accounts Payable and Accrued Liabilities [Member] | |||||
Supplemental Cash Flow Information [Line Items] | |||||
Capital Expenditures Incurred but Not yet Paid | $ 4,841 | $ 895 | $ 4,197 | $ 1,726 |
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