10-Q

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 December 27, 2020

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	11-2165495
(State or other jurisdiction of	(I.R.S. Employer
incorporation or organization)	Identification No.)
7201 West Friendly Avenue
Greensboro, North Carolina	27410
(Address of principal executive offices)	(Zip Code)

(336) 294-4410

(Registrant’s telephone number, including area code)

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

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

Indicate by check mark whether the registrant (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 every Interactive Data File required to be submitted 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 such files).    Yes  ☒    No  ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company.  See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	☐	Accelerated filer	☒
Non-accelerated filer	☐	Smaller reporting company	☐
		Emerging growth company	☐

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

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 January 28, 2021, there were 18,480,750 shares of the registrant’s common stock, par value $0.10 per share, outstanding.

FORWARD-LOOKING STATEMENTS

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, strategies, initiatives 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 performance, considering the information currently available to management.  The words “believe,” “may,” “could,” “will,” “should,” “would,” “anticipate,” “plan,” “estimate,” “project,” “expect,” “intend,” “seek,” “strive” and words of similar import, or the negative of such words, identify or signal the presence of forward-looking statements.  These statements are not statements of historical fact; and they involve risks and uncertainties that may cause our actual results, performance or financial condition to differ materially from the expectations of future results, performance or financial condition that we express or imply in any forward-looking statement.  Factors that could contribute to such differences include, but are not limited to:

• the competitive nature of the textile industry and the impact of global competition;

• changes in the trade regulatory environment and governmental policies and legislation;

• the availability, sourcing and pricing of raw materials;

• general domestic and international economic and industry conditions in markets where the Company competes, including economic and political factors over which the Company has no control;

• changes in consumer spending, customer preferences, fashion trends and end uses for products;

• the financial condition of the Company’s customers;

• the loss of a significant customer or brand partner;

• natural disasters, industrial accidents, power or water shortages, extreme weather conditions and other disruptions at one of our facilities;

• the disruption of operations, global demand, or financial performance as a result of catastrophic or extraordinary events, including epidemics or pandemics such as the recent strain of coronavirus (“COVID-19”);

• the success of the Company’s strategic business initiatives;

• the volatility of financial and credit markets;

• the ability to service indebtedness and fund capital expenditures and strategic business initiatives;

• the availability of and access to credit on reasonable terms;

• changes in foreign currency exchange, interest and inflation rates;

• fluctuations in production costs;

• the ability to protect intellectual property;

• the strength and reputation of our brands;

• employee relations;

• the ability to attract, retain and motivate key employees;

• the impact of environmental, health and safety regulations;

• the impact of tax laws, the judicial or administrative interpretations of tax laws and/or changes in such laws or interpretations; and

• other factors discussed in “Item 1A. Risk Factors” in the Company’s Annual Report on Form 10-K for the fiscal year ended June 28, 2020 or in the Company’s other periodic reports and information filed with the Securities and Exchange Commission (“SEC”).

All such factors are difficult to predict, contain uncertainties that may materially affect actual results and may be beyond our control.  New factors emerge from time to time, and it is not possible for management to predict all such factors or to assess the impact of each such factor on the Company.  Any forward-looking statement speaks only as of the date on which such statement is made, and we do not undertake any obligation to update any forward-looking statement to reflect events or circumstances after the date on which such statement is made, except as may be required by federal securities laws.

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.

UNIFI, INC.

QUARTERLY REPORT ON FORM 10-Q

FOR THE THREE MONTHS AND SIX MONTHS ENDED DECEMBER 27, 2020

TABLE OF CONTENTS

PART I—FINANCIAL INFORMATION
		Page
Item 1.	Financial Statements	1
	Condensed Consolidated Balance Sheets as of December 27, 2020 and June 28, 2020	1
	Condensed Consolidated Statements of Income for the Three Months and Six Months Ended December 27, 2020 and December 29, 2019	2
	Condensed Consolidated Statements of Comprehensive Income for the Three Months and Six Months Ended December 27, 2020 and December 29, 2019	3
	Condensed Consolidated Statements of Shareholders’ Equity for the Three Months and Six Months Ended December 27, 2020 and December 29, 2019	4
	Condensed Consolidated Statements of Cash Flows for the Six Months Ended December 27, 2020 and December 29, 2019	5
	Notes to Condensed Consolidated Financial Statements	6
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	17
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	34
Item 4.	Controls and Procedures	35
PART II—OTHER INFORMATION
Item 1.	Legal Proceedings	36
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	36
Item 6.	Exhibits	36
	Signatures	37

PART I—FINANCIAL INFORMATION

Item 1. Financial Statements

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)

(In thousands, except share and per share amounts)

	December 27, 2020			June 28, 2020
ASSETS
Cash and cash equivalents	$	83,321		$	75,267
Receivables, net		83,124			53,726
Inventories		111,489			109,704
Income taxes receivable		9,283			4,033
Other current assets		10,282			11,763
Total current assets		297,499			254,493
Property, plant and equipment, net		199,884			204,246
Operating lease assets		8,082			8,940
Deferred income taxes		2,425			2,352
Other non-current assets		5,108			4,131
Total assets	$	512,998		$	474,162
LIABILITIES AND SHAREHOLDERS’ EQUITY
Accounts payable	$	38,786		$	25,610
Accrued expenses		20,331			13,689
Income taxes payable		6,467			349
Current operating lease liabilities		1,685			1,783
Current portion of long-term debt		13,683			13,563
Total current liabilities		80,952			54,994
Long-term debt		78,621			84,607
Non-current operating lease liabilities		6,538			7,251
Other long-term liabilities		11,010			8,606
Deferred income taxes		1,004			2,549
Total liabilities		178,125			158,007
Commitments and contingencies
Common stock, $0.10 par value (500,000,000 shares authorized; 18,480,750 and 18,446,436    shares issued and outstanding as of December 27, 2020 and June 28, 2020, respectively)		1,848			1,845
Capital in excess of par value		63,972			62,392
Retained earnings		326,620			315,724
Accumulated other comprehensive loss		(57,567	)		(63,806	)
Total shareholders’ equity		334,873			316,155
Total liabilities and shareholders’ equity	$	512,998		$	474,162

See accompanying notes to condensed consolidated financial statements.

1

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(Unaudited)

(In thousands, except per share amounts)

	For the Three Months Ended						For the Six Months Ended
	December 27, 2020			December 29, 2019			December 27, 2020			December 29, 2019
Net sales	$	162,776		$	169,511		$	304,281		$	349,460
Cost of sales		136,842			153,846			263,786			316,352
Gross profit		25,934			15,665			40,495			33,108
Selling, general and administrative   expenses		12,625			12,508			23,989			23,488
Benefit for bad debts		(259	)		(258	)		(1,146	)		(249	)
Other operating expense, net		476			854			1,654			962
Operating income		13,092			2,561			15,998			8,907
Interest income		(187	)		(212	)		(312	)		(422	)
Interest expense		833			1,101			1,704			2,358
Equity in (earnings) loss of   unconsolidated affiliates		(130	)		756			(223	)		1,622
Income before income taxes		12,576			916			14,829			5,349
Provision for income taxes		5,112			507			3,933			1,228
Net income	$	7,464		$	409		$	10,896		$	4,121
Net income per common share:
Basic	$	0.40		$	0.02		$	0.59		$	0.22
Diluted	$	0.40		$	0.02		$	0.58		$	0.22

See accompanying notes to condensed consolidated financial statements.

2

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(Unaudited)

(In thousands)

	For the Three Months Ended				For the Six Months Ended
	December 27, 2020		December 29, 2019		December 27, 2020		December 29, 2019
Net income	$	7,464	$	409	$	10,896	$	4,121
Other comprehensive income (loss):
Foreign currency translation adjustments		5,912		3,248		5,730		(3,080	)
Changes in interest rate swaps, net of tax of    $78, $0, $156 and $0, respectively		255		289		509		(39	)
Other comprehensive income (loss), net		6,167		3,537		6,239		(3,119	)
Comprehensive income	$	13,631	$	3,946	$	17,135	$	1,002

See accompanying notes to condensed consolidated financial statements.

3

CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY

(Unaudited)

(In thousands)

	Shares			Common Stock			Capital in Excess of Par Value			Retained Earnings		Accumulated Other Comprehensive Loss			Total Shareholders’ Equity
Balance at September 27, 2020		18,447		$	1,845		$	62,810		$	319,156	$	(63,734	)	$	320,077
Options exercised		1			—			—			—		—			—
Conversion of restricted stock units		36			4			(4	)		—		—			—
Stock-based compensation		—			—			1,223			—		—			1,223
Common stock withheld in satisfaction of tax   withholding obligations under net share settle   transactions		(3	)		(1	)		(57	)		—		—			(58	)
Other comprehensive income, net of tax		—			—			—			—		6,167			6,167
Net income		—			—			—			7,464		—			7,464
Balance at December 27, 2020		18,481		$	1,848		$	63,972		$	326,620	$	(57,567	)	$	334,873

	Shares			Common Stock			Capital in Excess of Par Value			Retained Earnings		Accumulated Other Comprehensive Loss			Total Shareholders’ Equity
Balance at June 28, 2020		18,446		$	1,845		$	62,392		$	315,724	$	(63,806	)	$	316,155
Options exercised		1			—			—			—		—			—
Conversion of restricted stock units		38			4			(4	)		—		—			—
Stock-based compensation		—			—			1,648			—		—			1,648
Common stock withheld in satisfaction of tax   withholding obligations under net share settle   transactions		(4	)		(1	)		(64	)		—		—			(65	)
Other comprehensive income, net of tax		—			—			—			—		6,239			6,239
Net income		—			—			—			10,896		—			10,896
Balance at December 27, 2020		18,481		$	1,848		$	63,972		$	326,620	$	(57,567	)	$	334,873

	Shares			Common Stock			Capital in Excess of Par Value			Retained Earnings		Accumulated Other Comprehensive Loss			Total Shareholders’ Equity
Balance at September 29, 2019		18,490		$	1,849		$	59,663		$	378,380	$	(49,885	)	$	390,007
Options exercised		—			—			—			—		—			—
Conversion of restricted stock units		16			2			(2	)		—		—			—
Stock-based compensation		4			1			1,581			—		—			1,582
Common stock withheld in satisfaction of tax   withholding obligations under net share settle   transactions		(5	)		(1	)		(55	)		—		—			(56	)
Other comprehensive income, net of tax		—			—			—			—		3,537			3,537
Net income		—			—			—			409		—			409
Balance at December 29, 2019		18,505		$	1,851		$	61,187		$	378,789	$	(46,348	)	$	395,479

	Shares			Common Stock			Capital in Excess of Par Value			Retained Earnings		Accumulated Other Comprehensive Loss			Total Shareholders’ Equity
Balance at June 30, 2019		18,462		$	1,846		$	59,560		$	374,668	$	(43,229	)	$	392,845
Options exercised		10			1			28			—		—			29
Conversion of restricted stock units		34			4			(4	)		—		—			—
Stock-based compensation		4			1			1,702			—		—			1,703
Common stock withheld in satisfaction of tax   withholding obligations under net share settle   transactions		(5	)		(1	)		(99	)		—		—			(100	)
Other comprehensive loss, net of tax		—			—			—			—		(3,119	)		(3,119	)
Net income		—			—			—			4,121		—			4,121
Balance at December 29, 2019		18,505		$	1,851		$	61,187		$	378,789	$	(46,348	)	$	395,479

See accompanying notes to condensed consolidated financial statements.

4

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

(In thousands)

	For the Six Months Ended
	December 27, 2020			December 29, 2019
Cash and cash equivalents at beginning of period	$	75,267		$	22,228
Operating activities:
Net income		10,896			4,121
Adjustments to reconcile net income to net cash    provided by operating activities:
Equity in (earnings) loss of unconsolidated affiliates		(223	)		1,622
Distributions received from unconsolidated affiliates		—			10,437
Depreciation and amortization expense		12,187			11,610
Non-cash compensation expense		1,816			1,837
Deferred income taxes		(1,700	)		(878	)
Other, net		(25	)		(64	)
Changes in assets and liabilities:
Receivables, net		(28,558	)		9,873
Inventories		311			(1,330	)
Other current assets		1,862			(2,159	)
Income taxes		890			(249	)
Accounts payable and accrued expenses		18,830			(6,298	)
Other, net		3,440			113
Net cash provided by operating activities		19,726			28,635
Investing activities:
Capital expenditures		(6,035	)		(8,335	)
Purchase of intangible asset		(1,088	)		—
Other, net		163			60
Net cash used by investing activities		(6,960	)		(8,275	)
Financing activities:
Proceeds from ABL Revolver		—			41,100
Payments on ABL Revolver		—			(38,000	)
Payments on ABL Term Loan		(5,000	)		(5,000	)
Payments on finance lease obligations		(1,725	)		(3,085	)
Other, net		(64	)		(70	)
Net cash used by financing activities		(6,789	)		(5,055	)
Effect of exchange rate changes on cash and cash equivalents		2,077			(323	)
Net increase in cash and cash equivalents		8,054			14,982
Cash and cash equivalents at end of period	$	83,321		$	37,210

See accompanying notes to condensed consolidated financial statements.

5

Unifi, Inc.

Notes to Condensed Consolidated Financial Statements

(Unaudited)

1.  Background

Unifi, Inc., a New York corporation formed in 1969 (together with its subsidiaries, “UNIFI,” the “Company,” “we,” “us” or “our”), is a multinational company that manufactures and sells innovative recycled and synthetic products, made from polyester and nylon, primarily to other yarn manufacturers and knitters and weavers (UNIFI’s direct customers) that produce yarn and/or fabric for the apparel, hosiery, home furnishings, automotive, industrial and other end-use markets (UNIFI’s indirect customers).  We refer to these indirect customers as “brand partners.” Polyester products include partially oriented yarn (“POY”), textured, solution and package dyed, twisted, beamed and draw wound yarns, and each is available in virgin or recycled varieties. Recycled solutions, made from both pre-consumer and post-consumer waste, include plastic bottle flake (“Flake”), polyester polymer beads (“Chip”) and staple fiber.  Nylon products include virgin or recycled textured, solution dyed and spandex covered yarns.

UNIFI maintains one of the textile industry’s most comprehensive product offerings that include a range of specialized, value-added and commodity solutions, with principal geographic markets in the Americas, Asia and Europe. UNIFI has direct manufacturing operations in four countries and participates in joint ventures with operations in Israel and the United States (“U.S.”).

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 U.S. (“GAAP”) for interim financial information. As contemplated by the instructions of 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 UNIFI’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 28, 2020 (the “2020 Form 10-K”).

The financial information included in this report has been prepared by UNIFI, 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 amounts, except per share amounts, are presented in thousands (000s), except as otherwise noted.

The fiscal quarter for each of Unifi, Inc., its primary domestic operating subsidiaries and its subsidiary in El Salvador ended on December 27, 2020. Unifi, Inc.’s remaining material operating subsidiaries’ fiscal quarter ended on December 31, 2020. There were no significant transactions or events that occurred between Unifi, Inc.’s fiscal quarter end and such wholly owned subsidiaries’ subsequent fiscal quarter end. The three-month periods ended December 27, 2020 and December 29, 2019 both consisted of 13 weeks. The six-month periods ended December 27, 2020 and December 29, 2019 both consisted of 26 weeks.  

3.  Recent Accounting Pronouncements

Recently Adopted

In June 2016, the Financial Accounting Standards Board (the “FASB”) issued Accounting Standards Update (“ASU”) No. 2016-13, Financial Instruments - Credit Losses, with an effective date consistent with UNIFI’s fiscal 2021. The new guidance requires a financial asset measured at amortized cost basis to be presented at the net amount expected to be collected and eliminates the probable initial recognition threshold to instead reflect an entity’s current estimate of all expected credit losses. UNIFI adopted the ASU in fiscal 2021 using the modified retrospective approach and the adoption did not have a material impact to UNIFI’s financial position or results of operations.

Based on UNIFI’s review of ASUs issued since the filing of the 2020 Form 10-K, there have been no other newly issued or newly applicable accounting pronouncements that have had, or are expected to have, a material impact on UNIFI’s consolidated financial statements.

4.  Revenue Recognition

The following tables present disaggregated revenues for UNIFI:

	For the Three Months Ended				For the Six Months Ended
	December 27, 2020		December 29, 2019		December 27, 2020		December 29, 2019
Third-party manufacturer	$	160,146	$	167,537	$	298,987	$	345,557
Service		2,630		1,974		5,294		3,903
Net sales	$	162,776	$	169,511	$	304,281	$	349,460

	For the Three Months Ended				For the Six Months Ended
	December 27, 2020		December 29, 2019		December 27, 2020		December 29, 2019
REPREVE® Fiber	$	60,660	$	56,893	$	110,518	$	113,378
Non-REPREVE® Fiber		102,116		112,618		193,763		236,082
Total	$	162,776	$	169,511	$	304,281	$	349,460

6

Unifi, Inc.

Notes to Condensed Consolidated Financial Statements (Continued)

(Unaudited)

Third-Party Manufacturer

Third-party manufacturer revenue is primarily generated through sales to direct customers. Such sales represent satisfaction of UNIFI’s performance obligations required by the associated revenue contracts. Each of UNIFI’s reportable segments derives revenue from sales to third-party manufacturers.

Service Revenue

Service revenue is primarily generated, as services are rendered, through fulfillment of toll manufacturing of textile products or transportation services governed by written agreements. Such toll manufacturing and transportation services represent satisfaction of UNIFI’s performance obligations required by the associated revenue contracts. The Polyester Segment derives service revenue for toll manufacturing and the All Other category derives service revenue for transportation services.

REPREVE^® Fiber

REPREVE^® Fiber represents UNIFI’s platform of recycled polyester and recycled nylon filament and staple fiber products in either base recycled form or with added technologies.

Variable Consideration

Volume-based incentives

Volume-based incentives involve rebates or refunds of cash that are redeemable if the customer satisfies certain order volume thresholds during a defined time period. Under these incentive programs, UNIFI estimates the anticipated rebate to be paid and allocates a portion of the estimated cost of the rebate to each underlying sales transaction with the customer.

Product claims

UNIFI generally offers customers claims support or remuneration for defective products. UNIFI estimates the amount of its product sales that may be claimed as defective by its customers and records this estimate as a reduction of revenue in the period the related product revenue is recognized.

For all variable consideration, where appropriate, UNIFI estimates the amount using the expected value method, which takes into consideration historical experience, current contractual requirements, specific known market events and forecasted customer buying and payment patterns. Overall, these reserves reflect UNIFI’s best estimates of the amount of consideration to which the customer is entitled based on the terms of the contracts.

5.  Receivables, Net

Receivables, net consists of the following:

	December 27, 2020			June 28, 2020
Customer receivables	$	69,796		$	53,307
Allowance for uncollectible accounts		(2,675	)		(3,796	)
Reserves for quality claims		(822	)		(928	)
Net customer receivables		66,299			48,583
Other receivables		16,825			5,143
Total receivables, net	$	83,124		$	53,726

Other receivables includes $14,532 of banker’s acceptance notes (“BANs”) as of December 27, 2020 in connection with the settlement of customer receivables generated from trade activity in the Asia Segment. The BANs are redeemable upon maturity from the drawing financial institutions, or earlier at a discount. BANs of $1,596 previously reflected in customer receivables as of June 28, 2020 have been reclassified to other receivables to conform to the current presentation.

6.  Inventories

Inventories consists of the following:

	December 27, 2020			June 28, 2020
Raw materials	$	42,636		$	42,758
Supplies		9,561			9,294
Work in process		6,432			6,267
Finished goods		57,061			55,609
Gross inventories		115,690			113,928
Net realizable value adjustment		(4,201	)		(4,224	)
Total inventories	$	111,489		$	109,704

7

Unifi, Inc.

Notes to Condensed Consolidated Financial Statements (Continued)

(Unaudited)

7.  Other Current Assets

Other current assets consists of the following:

	December 27, 2020		June 28, 2020
Vendor deposits	$	4,947	$	2,349
Prepaid expenses		2,392		1,857
Value-added taxes receivable		2,044		2,604
Contract assets		899		4,953
Total other current assets	$	10,282	$	11,763

8.  Property, Plant and Equipment, Net

Property, plant and equipment (“PP&E”), net consists of the following:

	December 27, 2020			June 28, 2020
Land	$	3,176		$	3,154
Land improvements		16,371			16,344
Buildings and improvements		159,458			158,025
Assets under finance leases		22,000			29,857
Machinery and equipment		611,024			602,867
Computers, software and office equipment		23,216			22,677
Transportation equipment		10,447			7,806
Construction in progress		8,216			7,582
Gross PP&E		853,908			848,312
Less: accumulated depreciation		(649,064	)		(636,221	)
Less: accumulated amortization – finance leases		(4,960	)		(7,845	)
Total PP&E, net	$	199,884		$	204,246

9.  Accrued Expenses

Accrued expenses consists of the following:

	December 27, 2020		June 28, 2020
Payroll and fringe benefits	$	6,157	$	7,259
Incentive compensation		6,125		777
Deferred revenue		3,413		1,279
Severance		879		1,083
Other		3,757		3,291
Total accrued expenses	$	20,331	$	13,689

10.  Long-Term Debt

Debt Obligations

The following table presents the total balances outstanding for UNIFI’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	December 27, 2020	December 27, 2020			June 28, 2020
ABL Revolver	December 2023	0.0%	$	—		$	—
ABL Term Loan (1)	December 2023	3.3%		82,500			87,500
Finance lease obligations	(2)	3.6%		10,396			11,381
Total debt				92,896			98,881
Current ABL Term Loan				(10,000	)		(10,000	)
Current portion of finance lease obligations				(3,683	)		(3,563	)
Unamortized debt issuance costs				(592	)		(711	)
Total long-term debt			$	78,621		$	84,607

(1) Includes the effects of interest rate swaps.

(2) Scheduled maturity dates for finance lease obligations range from May 2022 to November 2027.

On December 18, 2018, Unifi, Inc. and certain of its subsidiaries entered into a Third Amendment to Amended and Restated Credit Agreement and Second Amendment to Amended and Restated Guaranty and Security Agreement (the “2018 Amendment”).  The 2018 Amendment amended the

8

Unifi, Inc.

Notes to Condensed Consolidated Financial Statements (Continued)

(Unaudited)

Amended and Restated Credit Agreement, dated as of March 26, 2015, by and among Unifi, Inc. and a syndicate of lenders, as previously amended (together with all previous and subsequent amendments, the “Credit Agreement”).  The Credit Agreement provides for a $200,000 senior secured credit facility (the “ABL Facility”), including 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”). The ABL Facility has a maturity date of December 18, 2023.

ABL Facility borrowings bear interest at LIBOR plus an applicable margin of 1.25% to 1.75%, or the Base Rate (as defined in the Credit Agreement) plus an applicable margin of 0.25% to 0.75%, with interest currently being paid on a monthly basis. As of December 27, 2020 and June 28, 2020, ABL Facility borrowings carried interest at LIBOR plus 1.50%.

UNIFI currently maintains three interest rate swaps that fix LIBOR at approximately 1.9% on $75,000 of variable-rate debt. Such swaps are scheduled to terminate in May 2022.

Scheduled Debt Maturities

The following table presents the scheduled maturities of UNIFI’s outstanding debt obligations for the remainder of fiscal 2021, the following four fiscal years and thereafter:

	Fiscal 2021		Fiscal 2022		Fiscal 2023		Fiscal 2024		Fiscal 2025		Thereafter
ABL Revolver	$	—	$	—	$	—	$	—	$	—	$	—
ABL Term Loan		5,000		10,000		10,000		57,500		—		—
Finance lease obligations		1,921		3,545		1,257		1,301		1,195		1,177
Total	$	6,921	$	13,545	$	11,257	$	58,801	$	1,195	$	1,177

11.  Other Long-Term Liabilities

Other long-term liabilities consists of the following:

	December 27, 2020		June 28, 2020
Supplemental post-employment plan	$	3,022	$	3,019
Uncertain tax positions		2,778		1,112
Interest rate swaps		1,886		2,551
Other		3,324		1,924
Total other long-term liabilities	$	11,010	$	8,606

12.  Income Taxes

The provision for income taxes and effective tax rate were as follows:

	For the Three Months Ended						For the Six Months Ended
	December 27, 2020			December 29, 2019			December 27, 2020			December 29, 2019
Provision for income taxes	$	5,112		$	507		$	3,933		$	1,228
Effective tax rate		40.6	%		55.3	%		26.5	%		23.0	%

U.S. Tax Law Change

On July 20, 2020, the U.S. Treasury issued and enacted final regulations related to global intangible low-tax income (“GILTI”) that allow certain U.S. taxpayers to elect to exclude foreign income that is subject to a high effective tax rate from their GILTI inclusions. The GILTI high-tax exclusion is an annual election and is retroactively available for tax years beginning after December 31, 2017. The three-month and six-month periods ended December 27, 2020 include discrete tax benefits of $359 and $5,148, respectively, related to the retroactive election.

Valuation Allowance

UNIFI regularly assesses whether it is more-likely-than-not that some portion or all of its deferred tax assets will not be realized.  UNIFI considers the scheduled reversal of taxable temporary differences, taxable income in carryback years, projected future taxable income and tax planning strategies in making this assessment.  Since UNIFI operates in multiple jurisdictions, the assessment is made on a jurisdiction-by-jurisdiction basis, taking into account the effects of local tax law.

As a result of the newly enacted GILTI regulations, and their impact on prior tax periods, UNIFI does not expect to realize the full benefit of its U.S. federal net operating loss and research credit carryforwards. The three-month and six-month periods ended December 27, 2020 include discrete tax expense of $26 and $2,153, respectively, related to the change in valuation allowance.

9

Unifi, Inc.

Notes to Condensed Consolidated Financial Statements (Continued)

(Unaudited)

Income Tax Expense

UNIFI’s provision for income taxes for the six months ended December 27, 2020 and December 29, 2019 was calculated by applying an estimate of the annual effective tax rate for the full fiscal year to year-to-date income from ordinary activity.  Tax effects of significant and unusual, or infrequently occurring, items are excluded from the estimated annual effective tax rate calculation and recognized discretely in the interim period in which they occur.

The effective tax rate for the three months ended December 27, 2020 was higher than the U.S. federal statutory rate primarily due to current U.S. tax on GILTI. The effective tax rate for the six months ended December 27, 2020 was higher than the U.S. federal statutory rate primarily due to current U.S. tax on GILTI, the change in valuation allowance for deferred tax assets, and earnings taxed at higher rates in foreign jurisdictions. These rate impacts were partially offset by the retroactive GILTI high-tax exclusion for prior periods.

The effective tax rate for the three months ended December 29, 2019 was higher than the U.S. federal statutory rate primarily due to U.S. tax on GILTI, losses in tax jurisdictions for which no tax benefit could be recognized, foreign withholding taxes, and lower-than-expected income before income taxes. These rate impacts were partially offset by the use of foreign tax credits generated in both current and prior tax years. The effective tax rate for the six months ended December 29, 2019 was higher than the U.S. federal statutory rate primarily due to U.S. tax on GILTI, losses in tax jurisdictions for which no tax benefit could be recognized, and foreign withholding taxes. These rate impacts were partially offset by the use of foreign tax credits generated in both current and prior tax years.

Unrecognized Tax Benefits

The amount of unrecognized tax benefits for uncertain tax positions as of December 27, 2020 and June 28, 2020 was $2,855 and $1,218, respectively. Unrecognized benefits would generate a favorable impact of $1,893 on UNIFI’s effective tax rate when recognized. UNIFI does not expect material changes in unrecognized tax benefits within the next 12 months.

UNIFI regularly assesses the outcomes of both completed and ongoing examinations to ensure that its 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.

13.  Shareholders’ Equity

On October 31, 2018, UNIFI announced that its Board of Directors (the “Board”) approved a new share repurchase program (the “2018 SRP”) under which UNIFI is authorized to acquire up to $50,000 of its common stock. Under the 2018 SRP, purchases may be made from time to time in the open market at prevailing market prices, through private transactions or block trades. The timing and amount of repurchases will depend on market conditions, share price, applicable legal requirements and other factors. The share repurchase authorization is discretionary and has no expiration date. Repurchases, if any, are expected to be financed through cash generated from operations and borrowings under the ABL Revolver, and are subject to applicable limitations and restrictions as set forth in the ABL Facility. UNIFI may discontinue repurchases at any time that management determines additional purchases are not beneficial or advisable.

The following table summarizes UNIFI’s repurchases and retirements of its common stock under the 2018 SRP for the fiscal periods noted:

	Total Number of Shares Repurchased as Part of Publicly Announced Plans or Programs		Average Price Paid per Share		Approximate Dollar Value that May Yet Be Repurchased Under Publicly Announced Plans or Programs
Fiscal 2019		—	$	—
Fiscal 2020		84	$	23.72
Fiscal 2021 (through December 27, 2020)		—	$	—
Total		84	$	23.72	$	48,008

Repurchased shares are retired and have the status of authorized and unissued shares.  The cost of the repurchased shares is recorded as a reduction to common stock to the extent of the par value of the shares acquired and the remainder is allocated between capital in excess of par value and retained earnings, on a pro rata basis.

10

Unifi, Inc.

Notes to Condensed Consolidated Financial Statements (Continued)

(Unaudited)

14.  Stock-Based Compensation

On October 24, 2018, the Unifi, Inc. Amended and Restated 2013 Incentive Compensation Plan (the “2018 Plan”) became effective, upon approval by shareholders at UNIFI’s annual meeting of shareholders held on October 31, 2018.  The 2018 Plan set the number of shares available for future issuance pursuant to awards granted under the 2018 Plan to 1,250 and updated certain provisions for changes to Section 162(m) of the Internal Revenue Code of 1986, as amended.

On October 29, 2020, UNIFI’s shareholders approved the Unifi, Inc. Second Amended and Restated 2013 Incentive Compensation Plan (the “2020 Plan”). The 2020 Plan set the number of shares available for future issuance pursuant to awards granted under the 2020 Plan to 850.  No additional awards can be granted under the 2018 Plan or other prior plans; however, awards outstanding under a respective prior plan remain subject to that plan’s provisions.

The following table provides information as of December 27, 2020 with respect to the number of securities remaining available for future issuance under the 2020 Plan:

Authorized under the 2020 Plan	850
Plus: Awards expired, forfeited or otherwise terminated unexercised	—
Less: Awards granted to employees	(75	)
Less: Awards granted to non-employee directors	—
Available for issuance under the 2020 Plan	775

Stock-based compensation units granted or issued from the 2018 Plan and/or 2020 Plan were as follows:

	For the Six Months Ended
	December 27, 2020		December 29, 2019
Stock options		155		83
Restricted stock units		110		77
Vested share units		—		24
Common stock		—		4

15.  Fair Value of Financial Instruments and Non-Financial Assets and Liabilities

UNIFI uses 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.  UNIFI currently maintains three interest rate swaps that fix LIBOR at approximately 1.9% on $75,000 of variable-rate debt. UNIFI does not enter into derivative contracts for speculative purposes.

The following table presents details regarding UNIFI’s hedging activities:

	For the Three Months Ended						For the Six Months Ended
	December 27, 2020			December 29, 2019			December 27, 2020			December 29, 2019
Interest expense	$	833		$	1,101		$	1,704		$	2,358
(Increase) decrease in fair value of interest rate    swaps		(333	)		(289	)		(665	)		39
Impact of interest rate swaps to increase (decrease)    interest expense		335			15			664			(48	)

For the six months ended December 27, 2020 and December 29, 2019, there were no significant changes to UNIFI’s assets and liabilities measured at fair value, and there were no transfers into or out of the levels of the fair value hierarchy.

UNIFI believes that there have been no significant changes to its credit risk profile or the interest rates available to UNIFI for debt issuances with similar terms and average maturities, and UNIFI estimates that the fair values of its debt obligations approximate the carrying amounts.  Other financial instruments include cash and cash equivalents, receivables, accounts payable and accrued expenses.  The financial statement carrying amounts of these items approximate the fair values due to their short-term nature.

16.  Accumulated Other Comprehensive Loss

The components of and the changes in accumulated other comprehensive loss, net of tax, as applicable, consist of the following:

	Foreign Currency Translation Adjustments			Changes in Interest Rate Swaps			Accumulated Other Comprehensive Loss
Balance at June 28, 2020	$	(61,848	)	$	(1,958	)	$	(63,806	)
Other comprehensive income		5,730			509			6,239
Balance at December 27, 2020	$	(56,118	)	$	(1,449	)	$	(57,567	)

11

Unifi, Inc.

Notes to Condensed Consolidated Financial Statements (Continued)

(Unaudited)

A summary of the after-tax effects of the components of other comprehensive income (loss), net for the three-month and six-month periods ended December 27, 2020 and December 29, 2019 is included in the accompanying condensed consolidated statements of comprehensive income.

17.  Earnings Per Share

The components of the calculation of earnings per share (“EPS”) are as follows:

	For the Three Months Ended				For the Six Months Ended
	December 27, 2020		December 29, 2019		December 27, 2020		December 29, 2019
Net income	$	7,464	$	409	$	10,896	$	4,121
Basic weighted average shares		18,465		18,499		18,456		18,490
Net potential common share equivalents		267		273		273		255
Diluted weighted average shares		18,732		18,772		18,729		18,745
Excluded from the calculation of common share equivalents:
Anti-dilutive common share equivalents		706		362		747		373
Excluded from the calculation of diluted shares:
Unvested stock options that vest upon achievement   of certain market conditions		333		—		333		—

The calculation of EPS is based on the weighted average number of Unifi, Inc.’s common shares outstanding for the applicable period.  The calculation of diluted EPS 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.

18.  Investments in Unconsolidated Affiliates and Variable Interest Entities

As of December 27, 2020, UNIFI maintained investments in two entities classified as unconsolidated affiliates: U.N.F. Industries, Ltd. (“UNF”); and UNF America LLC (“UNFA”) (collectively known as “UNFs”). UNIFI’s combined investment in UNFs was $2,532, reflected within other non-current assets in the accompanying condensed consolidated balance sheets.

Parkdale America, LLC

Parkdale America, LLC (“PAL”) is a limited liability company treated as a partnership for income tax reporting purposes and in which UNIFI held a 34% ownership interest (the “PAL Investment”) until UNIFI sold the investment on April 29, 2020. UNIFI accounted for the PAL Investment using the equity method of accounting and, because PAL was deemed a significant subsidiary in certain prior fiscal years, comparative prior year data is presented separately below.

U.N.F. Industries, Ltd.

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

UNF America LLC

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

In conjunction with the formation of UNFA, UNIFI entered into a supply agreement with UNF and UNFA whereby UNIFI agreed to purchase all of its first quality nylon POY requirements for texturing (subject to certain exceptions) from either UNF or UNFA.  The supply agreement has no stated minimum purchase quantities and pricing is negotiated every six months, based on market rates.  As of December 27, 2020, UNIFI’s open purchase orders related to this supply agreement were $1,545.

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

	For the Six Months Ended
	December 27, 2020		December 29, 2019
UNFA	$	8,005	$	8,582
UNF		207		1,209
Total	$	8,212	$	9,791

As of December 27, 2020 and June 28, 2020, UNIFI had combined accounts payable due to UNF and UNFA of $3,123 and $1,166, respectively.

12

Unifi, Inc.

Notes to Condensed Consolidated Financial Statements (Continued)

(Unaudited)

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

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

	As of December 27, 2020						As of June 28, 2020
	PAL		UNFs		Total		PAL		UNFs		Total
Current assets	$	—	$	7,499	$	7,499	$	—	$	5,190	$	5,190
Non-current assets		—		731		731		—		561		561
Current liabilities		—		3,166		3,166		—		1,415		1,415
Non-current liabilities		—		—		—		—		—		—
Shareholders’ equity and capital    accounts		—		5,064		5,064		—		4,336		4,336
UNIFI’s portion of undistributed    earnings		—		2,041		2,041		—		1,424		1,424

	For the Three Months Ended December 27, 2020						For the Three Months Ended December 29, 2019
	PAL		UNFs		Total		PAL			UNFs		Total
Net sales	$	—	$	4,651	$	4,651	$	161,648		$	5,475	$	167,123
Gross profit (loss)		—		1,092		1,092		(186	)		812		626
Income (loss) from operations		—		673		673		(5,026	)		377		(4,649	)
Net income (loss)		—		674		674		(2,463	)		383		(2,080	)
Depreciation and amortization		—		42		42		11,393			43		11,436
Cash received by PAL under    cotton rebate program		—		—		—		3,463			—		3,463
Earnings recognized by PAL for    cotton rebate program		—		—		—		2,766			—		2,766
Distributions received		—		—		—		—			—		—

	For the Six Months Ended December 27, 2020						For the Six Months Ended December 29, 2019
	PAL		UNFs		Total		PAL			UNFs		Total
Net sales	$	—	$	7,864	$	7,864	$	360,815		$	10,136	$	370,951
Gross profit		—		1,533		1,533		885			1,353		2,238
Income (loss) from operations		—		719		719		(8,301	)		489		(7,812	)
Net income (loss)		—		723		723		(5,918	)		507		(5,411	)
Depreciation and amortization		—		78		78		22,024			90		22,114
Cash received by PAL under    cotton rebate program		—		—		—		7,156			—		7,156
Earnings recognized by PAL for    cotton rebate program		—		—		—		6,354			—		6,354
Distributions received		—		—		—		10,437			—		10,437

19.  Commitments and Contingencies

Collective Bargaining Agreements

While employees of UNIFI’s Brazilian operations are unionized, none of the labor force employed by UNIFI’s domestic or other foreign subsidiaries is currently covered by a collective bargaining agreement.

Environmental

On September 30, 2004, Unifi Kinston, LLC (“UK”), a subsidiary of Unifi, Inc., 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 (the “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 and the North Carolina Department of Environmental Quality (“DEQ”) pursuant to the Resource Conservation and Recovery Act Corrective Action program.  The program requires DuPont to identify all potential areas of environmental concern (“AOCs”), assess the extent of containment at the identified AOCs and remediate the AOCs to comply with applicable regulatory standards.  Effective

13

Unifi, Inc.

Notes to Condensed Consolidated Financial Statements (Continued)

(Unaudited)

March 20, 2008, UK 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 UK of any future responsibility for environmental remediation, other than participation with DuPont, if so called upon, with regard to UK’s period of operation of the Kinston site, which was from 2004 to 2008.  At this time, UNIFI 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.

UK continues to own property (the “Kentec site”) acquired in the 2004 transaction with INVISTA that has contamination from DuPont’s prior operations and is monitored by DEQ.  The Kentec site has been remediated by DuPont, and DuPont has received authority from DEQ to discontinue further remediation, other than natural attenuation.  Prior to transfer of responsibility to UK, DuPont and UK had a duty to monitor and report the environmental status of the Kentec site to DEQ.

Effective April 10, 2019, UK assumed sole remediator responsibility of the Kentec site pursuant to its contractual obligations with INVISTA and received $180 of net monitoring and reporting costs due from DuPont.  In connection with monitoring, UK expects to sample and report to DEQ annually. UNIFI expects minimal active site remediation may be required, but has no basis to determine any costs that may be associated with active remediation.

20.  Related Party Transactions

There were no related party receivables as of December 27, 2020 or June 28, 2020.

Related party payables for Salem Leasing Corporation consisted of the following:

	December 27, 2020		June 28, 2020
Accounts payable	$	672	$	616
Operating lease obligations		1,337		1,481
Finance lease obligations		6,835		6,509
Total related party payables	$	8,844	$	8,606

The following are the Company’s significant related party transactions:

		For the Three Months Ended				For the Six Months Ended
Affiliated Entity	Transaction Type	December 27, 2020		December 29, 2019		December 27, 2020		December 29, 2019
Salem Leasing Corporation	Payments for transportation equipment costs and finance lease debt service	$	924	$	1,108	$	1,863	$	2,116

21.  Business Segment Information

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

UNIFI’s operating segments are aggregated into four reportable segments (the Polyester Segment, the Asia Segment, the Brazil Segment and the Nylon Segment) based on similarities between the operating segments’ economic characteristics, nature of products sold, type of customer, methods of distribution and regulatory environment.

• The operations within the Polyester Segment exhibit similar long-term economic characteristics and primarily sell into an economic trading zone covered by the United States-Mexico-Canada Agreement (“USMCA”), North American Free Trade Agreement (“NAFTA”) and Dominican Republic—Central America Free Trade Agreement (“CAFTA-DR”) (collectively, the regions comprising these economic trading zones are referred to as “NACA”) to similar customers utilizing similar methods of distribution. These operations derive revenues primarily from manufacturing polyester-based products with sales primarily to other yarn manufacturers and knitters and weavers that produce yarn and/or fabric for the apparel, hosiery, automotive, home furnishings, automotive, industrial and other end-use markets. The Polyester Segment consists of sales and manufacturing operations in the U.S. and El Salvador.

• The operations within the Asia Segment exhibit similar long-term economic characteristics and sell to similar customers utilizing similar methods of distribution primarily in Asia and Europe, which are outside of the NACA region. The Asia Segment primarily sources polyester-based products from third-party suppliers and sells to knitters and weavers that produce fabric for the apparel, automotive, home furnishings, automotive, industrial and other end-use markets principally in Asia.  The Asia Segment includes a sales office in China.

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

• The operations within the Nylon Segment exhibit similar long-term economic characteristics and primarily sell into the NACA region to similar customers utilizing similar methods of distribution. These operations derive revenues primarily from manufacturing nylon-based products with sales to knitters and weavers that produce fabric primarily for the apparel, hosiery and medical markets.  The Nylon Segment includes an immaterial operating segment in Colombia that sells similar nylon-based textile products to similar customers in Colombia and

14

Unifi, Inc.

Notes to Condensed Consolidated Financial Statements (Continued)

(Unaudited)

Mexico utilizing similar methods of distribution.  The Nylon Segment consists of sales and manufacturing operations in the U.S. and Colombia.

In addition to UNIFI’s reportable segments, an All Other category is included in the tables below. All Other consists primarily of for-hire transportation services. For-hire transportation services revenue is derived from performing common carrier services utilizing UNIFI’s fleet of transportation equipment.

The operations within All Other (i) are not subject to review by the CODM at a level consistent with UNIFI’s other operations, (ii) are not regularly evaluated using the same metrics applied to UNIFI’s other operations and (iii) do not qualify for aggregation with an existing reportable segment. Therefore, such operations are excluded from reportable segments.

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

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

Selected financial information is presented below:

	For the Three Months Ended December 27, 2020
	Polyester		Asia		Brazil		Nylon		All Other		Total
Net sales	$	76,696	$	44,692	$	24,253	$	16,008	$	1,127	$	162,776
Cost of sales		65,801		38,164		16,276		15,613		988		136,842
Gross profit		10,895		6,528		7,977		395		139		25,934
Segment depreciation expense		4,470		—		321		438		164		5,393
Segment Profit	$	15,365	$	6,528	$	8,298	$	833	$	303	$	31,327

	For the Three Months Ended December 29, 2019
	Polyester		Asia		Brazil		Nylon		All Other		Total
Net sales	$	82,750	$	47,918	$	20,862	$	17,084	$	897	$	169,511
Cost of sales		76,090		42,401		17,432		17,038		885		153,846
Gross profit		6,660		5,517		3,430		46		12		15,665
Segment depreciation expense		4,183		—		357		503		124		5,167
Segment Profit	$	10,843	$	5,517	$	3,787	$	549	$	136	$	20,832

	For the Six Months Ended December 27, 2020
	Polyester		Asia		Brazil		Nylon		All Other		Total
Net sales	$	145,772	$	82,415	$	46,859	$	27,037	$	2,198	$	304,281
Cost of sales		130,245		71,309		34,269		25,977		1,986		263,786
Gross profit		15,527		11,106		12,590		1,060		212		40,495
Segment depreciation expense		8,873		—		751		880		328		10,832
Segment Profit	$	24,400	$	11,106	$	13,341	$	1,940	$	540	$	51,327

	For the Six Months Ended December 29, 2019
	Polyester		Asia		Brazil		Nylon		All Other		Total
Net sales	$	171,445	$	93,875	$	45,034	$	37,286	$	1,820	$	349,460
Cost of sales		156,990		84,076		37,445		36,062		1,779		316,352
Gross profit		14,455		9,799		7,589		1,224		41		33,108
Segment depreciation expense		8,224		—		732		994		163		10,113
Segment Profit	$	22,679	$	9,799	$	8,321	$	2,218	$	204	$	43,221

15

Unifi, Inc.

Notes to Condensed Consolidated Financial Statements (Continued)

(Unaudited)

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

	For the Three Months Ended						For the Six Months Ended
	December 27, 2020			December 29, 2019			December 27, 2020			December 29, 2019
Polyester	$	10,895		$	6,660		$	15,527		$	14,455
Asia		6,528			5,517			11,106			9,799
Brazil		7,977			3,430			12,590			7,589
Nylon		395			46			1,060			1,224
All Other		139			12			212			41
Segment gross profit		25,934			15,665			40,495			33,108
Selling, general and administrative expenses		12,625			12,508			23,989			23,488
Benefit for bad debts		(259	)		(258	)		(1,146	)		(249	)
Other operating expense, net		476			854			1,654			962
Operating income		13,092			2,561			15,998			8,907
Interest income		(187	)		(212	)		(312	)		(422	)
Interest expense		833			1,101			1,704			2,358
Equity in (earnings) loss of unconsolidated affiliates		(130	)		756			(223	)		1,622
Income before income taxes	$	12,576		$	916		$	14,829		$	5,349

The reconciliations of segment total assets to consolidated total assets are as follows:

	December 27, 2020		June 28, 2020
Polyester	$	261,769	$	263,496
Asia		54,661		41,452
Brazil		60,006		49,967
Nylon		39,682		42,020
Segment total assets		416,118		396,935
Other current assets		68,900		48,600
Other PP&E		22,687		23,676
Other operating lease assets		1,308		1,503
Other non-current assets		3,985		3,448
Total assets	$	512,998	$	474,162

22.  Supplemental Cash Flow Information

Cash payments for interest and taxes consist of the following: 

	For the Six Months Ended
	December 27, 2020		December 29, 2019
Interest, net of capitalized interest of $92 and $56, respectively	$	1,610	$	2,357
Income tax payments, net		3,923		3,429

Cash payments for taxes shown above consist primarily of income and withholding tax payments made by UNIFI in both U.S. and foreign jurisdictions, net of refunds.

Non-Cash Investing and Financing Activities

As of December 27, 2020 and June 28, 2020, $697 and $630, respectively, were included in accounts payable for unpaid capital expenditures. As of December 29, 2019 and June 30, 2019, $1,127 and $1,329, respectively, were included in accounts payable for unpaid capital expenditures.

During the six months ended December 27, 2020 and December 29, 2019, UNIFI recorded non-cash activity relating to finance leases of $740 and $6,301, respectively.

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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following is management’s discussion and analysis of certain significant factors that have affected UNIFI’s operations, along with material changes in financial condition, during the periods included in the accompanying condensed consolidated financial statements. 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 December 27, 2020, while a reference to the “prior period” refers to the three-month period ended December 29, 2019.  A reference to the “current six-month period” refers to the six-month period ended December 27, 2020, while a reference to the “prior six-month period” refers to the six-month period ended December 29, 2019. Such references may be accompanied by certain phrases for added clarity. The current period and the prior period each consisted of 13 weeks. The current six-month period and the prior six-month period each consisted of 26 weeks.

Our discussions in this Item 2 focus on our results during, or as of, the three months and six months ended December 27, 2020 and December 29, 2019, and, to the extent applicable, any material changes from the information discussed in the 2020 Form 10-K or other important intervening developments or information.  These discussions should be read in conjunction with the 2020 Form 10-K for more detailed and background information about our business, operations and financial condition. Discussion of foreign currency translation is primarily associated with the weakening of the Brazilian Real (“BRL”) and changes in the Chinese Renminbi (“RMB”) versus the U.S. Dollar (“USD”). In discussion of its operating results in this report, UNIFI refers to its operations in the “NACA” region, which is the region comprised of the trade zones covered by USMCA, NAFTA and CAFTA-DR.

All amounts, except per share amounts, are presented in thousands (000s), except as otherwise noted.

Overview and Significant General Matters

UNIFI focuses on delivering products and solutions to direct customers and brand partners throughout the world, leveraging our internal manufacturing capabilities and an enhanced global supply chain that delivers a diverse range of synthetic and recycled fibers and polymers. This strategic and synergistic focus includes three supporting pillars: (1) engaging in strategic relationships with like-minded entities, (2) growing our existing portfolio of technologies and capabilities, and (3) expanding our supply chain to best serve our direct and indirect customers. UNIFI remains committed to this strategy, which we believe will increase profitability and generate improved cash flows from operations.

UNIFI has four reportable segments for its operations – the Polyester Segment, the Asia Segment, the Brazil Segment and the Nylon Segment – as well as certain ancillary operations that include for-hire transportation services, which comprise an All Other category. The ancillary operations classified within All Other are insignificant for all periods presented; therefore, UNIFI’s discussion and analysis of those activities is generally limited to their impact on consolidated results, where appropriate.

Significant general matters for the current period and the current six-month period, which include certain sales pressures from the ongoing COVID-19 pandemic, are summarized below:

• net sales for the current period decreased $6,735, or 4.0%, to $162,776, compared to $169,511 for the prior period;

• net sales for the current six-month period decreased $45,179, or 12.9%, to $304,281, compared to $349,460 for the prior six-month period;

• revenues from REPREVE^® Fiber products for the current period represented 37% of consolidated net sales, compared to 34% for the prior period, 36% for the current six-month period, and 32% for the prior six-month period;

• gross margin was 15.9% for the current period, compared to 9.2% for the prior period, and was 13.3% for the current six-month period, compared to 9.5% for the prior six-month period;

• operating income was $13,092 for the current period, compared to $2,561 for the prior period, and was $15,998 for the current six-month period, compared to $8,907 for the prior six-month period; and

• diluted EPS was $0.40 for the current period, compared to $0.02 for the prior period, and was $0.58 for the current six-month period, compared to $0.22 for the prior six-month period.

COVID-19 Pandemic in Calendar 2020

In March 2020, the World Health Organization declared the current COVID-19 outbreak a global pandemic. Efforts to contain the spread of COVID-19 intensified during March and April 2020. Several states, including North Carolina, where UNIFI’s primary manufacturing and administrative operations are located, declared states of emergency. A number of foreign and local governments also enacted temporary business closures, issued quarantine orders and took other restrictive measures in response to the COVID-19 pandemic. The local and global measures significantly reduced economic activity and demand, thereby reducing overall demand for UNIFI’s products.

In an effort to protect the health and safety of our employees, customers and communities, UNIFI took proactive, aggressive actions from the earliest signs of the outbreak that included social distancing and travel restriction policies for all locations, along with reducing costs in both manufacturing and selling, general and administrative expenses (“SG&A”) without impacting our ability to service customers. These measures remain in effect and are evaluated regularly against local, state and federal recommendations.

Global measures taken to reduce the spread of the COVID-19 pandemic generated a significant decline in global business activity that may have a lasting impact on the global economy and consumer demand. The duration of the COVID-19 pandemic and its related impact on our business is currently unknown. Through March 2020, the COVID-19 pandemic had no significant adverse impact on UNIFI’s business, although sales growth for our Asia Segment was temporarily slowed by the extensive government shutdown in China. Throughout calendar 2020, the Asia Segment’s overall performance and profitability was moderately impacted by the COVID-19 pandemic, while our U.S., Brazil and El Salvador operations were more adversely impacted by the COVID-19 pandemic, most notably in the June 2020 quarter during the most intense declines in global demand. UNIFI anticipates that the global disruption caused by the COVID-19 pandemic has negatively impacted, and will continue to negatively impact, overall global demand and business activity, including textiles in both the Americas and Asia.

While our operating results for the current six-month period indicate a robust recovery of the textile supply chain and increased activity from the considerably low levels of demand and production experienced in the June 2020 quarter, significant restoration of consumer spending and retail activity

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will be critical to our end-markets to enable a full and sustained economic rebound. UNIFI anticipates a recovery in global economic activity when the COVID-19 pandemic is sufficiently contained.  The economic rebound will depend on the pace and effectiveness of the containment efforts deployed by various international, national, state, and local governments, along with the speed and effectiveness with which potential treatment and vaccine methods are deployed. However, the anticipated economic rebound would be jeopardized by a significant degradation in local and global healthcare systems’ abilities to treat infections, mutations of the virus that generate further difficulty in containment efforts, or shelter-in-place orders in UNIFI’s primary geographic markets.

Textile demand and business activity levels in the second half of calendar 2020 exceeded our expectations set when we began the fiscal year, however there is no certainty that such levels will continue or increase during calendar 2021. Additionally, there is no clear indication that the demand and activity levels experienced in the second half of calendar 2020 were the result of economic restoration, as those levels could have been favorably impacted by pent up demand. UNIFI will continue to monitor the COVID-19 pandemic, prioritizing the health and safety of our employees, while delivering on customer demand. Although our year-to-date fiscal 2021 results have exceeded our expectations and we have experienced several improvements across certain financial metrics, our underlying sales volumes in certain core markets have not fully recovered. Therefore, we are unsure of the impact on our operational and financial results through at least fiscal 2021, based on present factors and conditions, along with the uncertainty surrounding global demand.

Update on Recent Trade Initiatives

UNIFI remains committed to pursuing relief from the elevated levels of low-cost and subsidized polyester textured yarn entering the U.S. market from foreign countries. Efforts to slow low-cost and subsidized polyester textured yarn from China and India were successful during calendar 2019, which led to a temporary improvement in our U.S. polyester textured yarn sales prior to the onset of the COVID-19 pandemic in March 2020.

Subsequent to the completion of the trade initiatives against China and India, imports from Indonesia, Malaysia, Thailand, and Vietnam seemingly replaced the imports from China and India and surged into the U.S. market. Subject import volume from Indonesia, Malaysia, Thailand, and Vietnam increased from calendar 2017 to calendar 2019 by over 80%. Similar to the adverse impacts of imports from China and India in previous years, the subject imports from Indonesia, Malaysia, Thailand, and Vietnam undersold the domestic industry, taking sales from and exerting considerable downward pricing pressure on yarns produced by UNIFI. Accordingly, UNIFI is a petitioner to the United States Department of Commerce and the United States International Trade Commission (the "USITC") alleging dumping of polyester textured yarn in the U.S. market from Indonesia, Malaysia, Thailand, and Vietnam.

In December 2020, the USITC made affirmative determinations in its preliminary phase of antidumping duty investigations concerning polyester textured yarn from Indonesia, Malaysia, Thailand, and Vietnam. The entire investigative process will take approximately one year, with final determinations of dumping and injury likely occurring by the end of calendar 2021.

Current Six-Month Period Performance

Prior to the COVID-19 pandemic, our operations were achieving incremental sales volume growth from both (i) continued demand for sustainable products with our REPREVE^® platform and (ii) U.S. market share recapture from our trade initiatives that were finalized in January 2020. Additionally, we have recently benefited from a more favorable polyester raw material cost environment.

In the current six-month period, our Polyester and Nylon Segments were adversely impacted by the COVID-19 pandemic, as manufacturing activity in the U.S. has recovered less rapidly than in Asia and Brazil, while production activity in Central America surged following the June 2020 quarter. In Asia, although productivity remains pressured by lower global demand, our Asia Segment continues to perform well with both new and existing customer programs. The Brazil Segment was able to navigate its domestic recovery more favorably than competitive importers, resulting in sales volume and market share growth compared to recent quarters. We believe the outperformance by the Brazil Segment includes temporary capture of market share from competitive imports and higher conversion margin due to the unfavorable dynamics facing competitors surrounding input and freight costs combined with weaker delivery speed. Competition and pricing are expected to normalize over the mid- to long-term.

Although sales volumes in the NACA region were pressured in the current six-month period, our operations benefited from raw material and selling price stability and sales mix improvements. Accordingly, we were able to achieve better-than-expected operating results in the current six-month period.

While sales and gross profit pressures from the COVID-19 pandemic have weighed on our financial results, we have remained diligent in managing our operations as efficiently and effectively as possible while delivering on customer demand. Accordingly, we generated operating cash flows in the current six-month period and continued to reduce our debt principal. Our performance in the first half of fiscal 2021 further strengthened our balance sheet and solidified the foundation for further growth subsequent to the negative impacts of the COVID-19 pandemic.

We believe that several facets of our business will remain drivers for growth once the COVID-19 pandemic subsides, including: (i) continued sales and portfolio growth for our Asia Segment, (ii) U.S. market share recapture from our recent trade initiatives, (iii) continued commitments in sustainability by corporations, governments and other entities leading to further demand for our REPREVE^® platform, (iv) leading-edge innovation and commercialization efforts that deliver meaningful consumer products, and (v) continued expansion of our portfolio with additional markets, applications, and brand partners.

Key Performance Indicators and Non-GAAP Financial Measures

UNIFI continuously reviews performance indicators to measure its success.  These performance indicators form the basis of management’s discussion and analysis included below:

• sales volume and revenue for UNIFI and for each reportable segment;

• gross profit and gross margin for UNIFI and for each reportable segment;

• net income and diluted EPS;

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• Segment Profit, which equals segment gross profit plus segment depreciation expense;

• unit conversion margin, which represents unit net sales price less unit raw material costs, for UNIFI and for each reportable segment;

• working capital, which represents current assets less current liabilities;

• Earnings Before Interest, Taxes, Depreciation and Amortization (“EBITDA”), which represents Net income before net interest expense, income tax expense and depreciation and amortization expense;

• Adjusted EBITDA, which represents EBITDA adjusted to exclude equity in loss of PAL, and, from time to time, certain other adjustments necessary to understand and compare the underlying results of UNIFI;

• Adjusted Net Income, which represents net income calculated under GAAP, adjusted to exclude certain amounts which management believes do not reflect the ongoing operations and performance of UNIFI and/or for which exclusion may be necessary to understand and compare the underlying results of UNIFI;

• Adjusted EPS, which represents Adjusted Net Income divided by UNIFI’s weighted average common shares outstanding;

• Adjusted Working Capital, which equals receivables plus inventories and other current assets, less accounts payable and accrued expenses; and

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

EBITDA, Adjusted EBITDA, Adjusted Net Income, Adjusted EPS, Adjusted Working Capital and Net Debt (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. We may, from time to time, modify the amounts used to determine our 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 UNIFI’s underlying operations and performance and that their use, as operating performance measures, provides investors and analysts with a measure of operating results unaffected by differences in capital structures, capital investment cycles and ages of related assets, among otherwise comparable companies.

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

Management uses Adjusted Working Capital as an indicator of UNIFI’s production efficiency and ability to manage inventories and receivables.

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

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Review of Results of Operations

Three Months Ended December 27, 2020 Compared to Three Months Ended December 29, 2019

Consolidated Overview

The below tables provide:

• the components of net income and the percentage increase or decrease over the prior fiscal year amounts,

• a reconciliation from net income to EBITDA and Adjusted EBITDA, and

• a reconciliation from net income to Adjusted Net Income and Adjusted EPS.

Following the tables is a discussion and analysis of the significant components of net income.

Net income

	For the Three Months Ended
	December 27, 2020						December 29, 2019
				% of Net Sales						% of Net Sales			% Change
Net sales	$	162,776			100.0		$	169,511			100.0			(4.0	)
Cost of sales		136,842			84.1			153,846			90.8			(11.1	)
Gross profit		25,934			15.9			15,665			9.2			65.6
SG&A		12,625			7.8			12,508			7.4			0.9
Benefit for bad debts		(259	)		(0.2	)		(258	)		(0.2	)		0.4
Other operating expense, net		476			0.3			854			0.5			(44.3	)
Operating income		13,092			8.0			2,561			1.5		nm
Interest expense, net		646			0.4			889			0.5			(27.3	)
Equity in (earnings) loss of unconsolidated affiliates		(130	)		(0.1	)		756			0.5			(117.2	)
Income before income taxes		12,576			7.7			916			0.5		nm
Provision for income taxes		5,112			3.1			507			0.3		nm
Net income	$	7,464			4.6		$	409			0.2		nm

nm – Not meaningful

EBITDA and Adjusted EBITDA (Non-GAAP Financial Measures)

The reconciliations of the amounts reported under GAAP for Net income to EBITDA and Adjusted EBITDA were as follows:

	For the Three Months Ended
	December 27, 2020		December 29, 2019
Net income	$	7,464	$	409
Interest expense, net		646		889
Provision for income taxes		5,112		507
Depreciation and amortization expense (1)		6,016		5,863
EBITDA		19,238		7,668
Equity in loss of PAL		—		837
EBITDA excluding PAL		19,238		8,505
Severance (2)		—		383
Adjusted EBITDA	$	19,238	$	8,888

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

(2) In the second quarter of fiscal 2020, UNIFI commenced a wind-down plan for its operations in Sri Lanka. The adjustment primarily reflects accrued severance and exit costs.

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Adjusted Net Income and Adjusted EPS (Non-GAAP Measures)

The tables below set forth reconciliations of (i) Income before income taxes (“Pre-tax Income”), Provision for income taxes (“Tax Impact”) and Net Income to Adjusted Net Income and (ii) Diluted EPS to Adjusted EPS.

	For the Three Months Ended December 27, 2020									For the Three Months Ended December 29, 2019
	Pre-tax Income		Tax Impact			Net Income		Diluted EPS		Pre-tax Income		Tax Impact			Net Income		Diluted EPS
GAAP results	$	12,576	$	(5,112	)	$	7,464	$	0.40	$	916	$	(507	)	$	409	$	0.02
Severance (1)		—		—			—		—		383		(80	)		303		0.02
Adjusted results	$	12,576	$	(5,112	)	$	7,464	$	0.40	$	1,299	$	(587	)	$	712	$	0.04
Weighted average common shares outstanding									18,732									18,772

(1) In the second quarter of fiscal 2020, UNIFI commenced a wind-down plan for its operations in Sri Lanka. The adjustment primarily reflects accrued severance and exit costs.  

Net Sales

Consolidated net sales decreased $6,735, or 4.0%, for the current period in comparison to the prior period primarily attributable to (i) the COVID-19 pandemic, (ii) lower average selling prices, and (iii) unfavorable foreign currency translation.

Consolidated sales volumes increased 1.0%, primarily attributable to the Brazil Segment, which was agile and responsive to COVID-19 pandemic-related demand fluctuations in the current period, and generated volume growth by capturing market share from competitors.  The increase was partially offset by the adverse impact of the COVID-19 pandemic on U.S. product demand, as our Americas and Asia markets have experienced significant, but not full recovery, since the June 2020 quarter.

Once the COVID-19 pandemic subsides, we believe incremental revenue for the Polyester Segment will be generated from our polyester textured yarn trade petitions (i) completed in early calendar 2020 and (ii) recently filed. However, our Nylon Segment results continue to reflect the current global trend of declining demand for nylon socks, ladies’ hosiery and intimate apparel.

Consolidated average sales prices decreased 5.0%, primarily attributable to (i) sales price declines associated with polyester raw material cost changes, and (ii) unfavorable foreign currency translation.

REPREVE^® Fiber products for the current period comprised 37% of consolidated net sales, up from 34% for the prior period and 31% for fiscal 2020.

Gross Profit

Gross profit for the current period increased by $10,269, or 65.6%, as compared to the prior period. Although the COVID-19 pandemic adversely impacted sales volumes in our Polyester Segment and Asia Segment, favorable raw material costs and manufacturing efficiencies helped drive gross profit improvement. Further, the Brazil Segment has outperformed in the current period, primarily due to a temporarily improved competitive position.

• For the Polyester Segment, gross profit benefited from manufacturing efficiencies, an improved conversion margin and an improved sales mix.

• For the Asia Segment, gross profit benefited from cost and sales mix improvements, partially offset by lower demand levels driven by the COVID-19 pandemic.

• For the Brazil Segment, gross profit benefited from higher sales volumes and stronger local pricing due to temporary market share capture.

• For the Nylon Segment, gross profit increased due to improved cost management on low sales volumes.

SG&A

SG&A increased from the prior period, primarily due to higher accrued incentive compensation, partially offset by lower professional fees and travel and entertainment expenses in the current period.

Benefit for Bad Debts

The current period benefit for bad debts reflects general improvement in customer payment frequency following the adverse effects of the COVID-19 pandemic on customer health.

Other Operating Expense, Net

The current period and prior period both reflect foreign currency transaction losses of $324 in the current period and $486 in the prior period along with severance charges in the prior period.

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Interest Expense, Net

Interest expense, net decreased from the prior period to the current period, primarily attributable to a lower average debt principal. The components of consolidated interest expense, net were as follows:

	For the Three Months Ended
	December 27, 2020			December 29, 2019
Interest and fees on the ABL Facility	$	743		$	937
Other interest		78			127
Subtotal of interest on debt obligations		821			1,064
Other components of interest expense		12			37
Total interest expense		833			1,101
Interest income		(187	)		(212	)
Interest expense, net	$	646		$	889

Equity in (Earnings) Loss of Unconsolidated Affiliates

The components of equity in (earnings) loss of unconsolidated affiliates were as follows:

	For the Three Months Ended
	December 27, 2020			December 29, 2019
Loss from PAL	$	—		$	837
Earnings from nylon joint ventures		(130	)		(81	)
Total equity in (earnings) loss of unconsolidated affiliates	$	(130	)	$	756
As a percentage of consolidated income before income taxes		1.0	%		(82.5	)%

On April 29, 2020, UNIFI sold its 34% non-controlling partnership interest in PAL. The comparative decrease in loss from PAL reflects a loss recorded in the prior period with no results recorded in the current period.

Income Taxes

Provision for income taxes and the effective tax rate were as follows:

	For the Three Months Ended
	December 27, 2020			December 29, 2019
Provision for income taxes	$	5,112		$	507
Effective tax rate		40.6	%		55.3	%

The effective tax rate is subject to variation due to numerous factors, including variability in the amount of income before income taxes, the mix of income by jurisdiction, changes in deferred tax valuation allowances and changes in statutes, regulations and case law.  Additionally, the impacts of discrete and other rate impacting items are greater when income before income taxes is lower.

The decrease in the effective tax rate from the prior period to the current period is primarily attributable to higher earnings in the current period, which lessens the impact of rate reconciling items including (i) current U.S. tax on GILTI, (ii) losses in tax jurisdictions for which no benefit can be recognized, and (iii) foreign withholding taxes.  The comparative decrease is partially offset by certain foreign tax credits favorably impacting the prior period.

Net Income

Net income for the current period was $7,464, or $0.40 per share, compared to net income of $409 or $0.02 per share, for the prior period.  The change in net income was primarily due to (i) higher gross profit in the current period and (ii) the loss from PAL in the prior period.

Adjusted EBITDA (Non-GAAP Financial Measure)

Adjusted EBITDA increased from the prior period to the current period, commensurate with higher gross profit.

Segment Overview

Following is a discussion and analysis of the revenue and profitability performance of UNIFI’s reportable segments for the current period.

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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, were as follows:

	For the Three Months Ended
	December 27, 2020					December 29, 2019
				% of Net Sales					% of Net Sales		% Change
Net sales	$	76,696			100.0	$	82,750			100.0		(7.3	)
Cost of sales		65,801			85.8		76,090			92.0		(13.5	)
Gross profit		10,895			14.2		6,660			8.0		63.6
Depreciation expense		4,470			5.8		4,183			5.1		6.9
Segment Profit	$	15,365			20.0	$	10,843			13.1		41.7
Segment net sales as a percentage of    consolidated amounts		47.1	%				48.8	%
Segment Profit as a percentage of    consolidated amounts		49.0	%				52.0	%

The change in net sales for the Polyester Segment was as follows:

Net sales for the prior period	$	82,750
Net change in average selling price and sales mix		(5,128	)
Decrease in sales volumes		(926	)
Net sales for the current period	$	76,696

The decrease in net sales for the Polyester Segment from the prior period to the current period was primarily attributable to lower average selling prices associated with lower polyester raw material costs.

The change in Segment Profit for the Polyester Segment was as follows:

Segment Profit for the prior period	$	10,843
Net increase in underlying margins		4,643
Decrease in sales volumes		(121	)
Segment Profit for the current period	$	15,365

The increase in Segment Profit for the Polyester Segment from the prior period to the current period was primarily attributable to improved conversion margin, manufacturing efficiencies, and a better sales mix.

Asia 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 Asia Segment, were as follows:

	For the Three Months Ended
	December 27, 2020					December 29, 2019
				% of Net Sales					% of Net Sales		% Change
Net sales	$	44,692			100.0	$	47,918			100.0		(6.7	)
Cost of sales		38,164			85.4		42,401			88.5		(10.0	)
Gross profit		6,528			14.6		5,517			11.5		18.3
Depreciation expense		—			—		—			—		—
Segment Profit	$	6,528			14.6	$	5,517			11.5		18.3
Segment net sales as a percentage of    consolidated amounts		27.5	%				28.3	%
Segment Profit as a percentage of    consolidated amounts		20.8	%				26.5	%

The change in net sales for the Asia Segment was as follows:

Net sales for the prior period	$	47,918
Decrease in sales volumes of Chip and staple fiber		(5,090	)
Change in average selling price and sales mix		(4,180	)
Net increase in sales volumes of certain other products		3,034
Favorable foreign currency translation effects		3,010
Net sales for the current period	$	44,692

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The decrease in net sales for the Asia Segment from the prior period to the current period was primarily attributable to overall lower sales volumes and average selling prices driven by the adverse impacts of the COVID-19 pandemic, partially offset by the continued momentum of REPREVE^®-branded products and favorable foreign currency translation effects.

The RMB weighted average exchange rate was 6.62 RMB/USD and 7.04 RMB/USD for the current period and the prior period, respectively.  

The change in Segment Profit for the Asia Segment was as follows:

Segment Profit for the prior period	$	5,517
Change in underlying margins and sales mix		1,177
Favorable foreign currency translation effects		343
Decrease in sales volumes		(509	)
Segment Profit for the current period	$	6,528

Segment Profit for the Asia Segment increased from the prior period to the current period as raw material cost benefits achieved on certain product lines and sales mix improvements were partially offset by the decrease in sales volumes described in the net sales analysis above.

Brazil 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 Brazil Segment, were as follows:

	For the Three Months Ended
	December 27, 2020					December 29, 2019
				% of Net Sales					% of Net Sales		% Change
Net sales	$	24,253			100.0	$	20,862			100.0		16.3
Cost of sales		16,276			67.1		17,432			83.6		(6.6	)
Gross profit		7,977			32.9		3,430			16.4		132.6
Depreciation expense		321			1.3		357			1.8		(10.1	)
Segment Profit	$	8,298			34.2	$	3,787			18.2		119.1
Segment net sales as a percentage of    consolidated amounts		14.9	%				12.3	%
Segment Profit as a percentage of    consolidated amounts		26.5	%				18.2	%

The change in net sales for the Brazil Segment was as follows:

Net sales for the prior period	$	20,862
Increase in sales volumes		4,514
Increase in average selling price		3,943
Unfavorable foreign currency translation effects		(5,066	)
Net sales for the current period	$	24,253

The increase in net sales for the Brazil Segment from the prior period to the current period was primarily attributable to an improvement in sales volumes due to the Brazil Segment’s ability to capture market share from competitors and maintain pricing levels, partially offset by unfavorable foreign currency translation effects.

The BRL weighted average exchange rate was 5.41 BRL/USD and 4.12 BRL/USD for the current period and the prior period, respectively.  

The change in Segment Profit for the Brazil Segment was as follows:

Segment Profit for the prior period	$	3,787
Increase in underlying margins		4,624
Increase in sales volumes		816
Unfavorable foreign currency translation effects		(929	)
Segment Profit for the current period	$	8,298

The increase in Segment Profit for the Brazil Segment from the prior period to the current period was primarily attributable to the segment’s ability to achieve favorable pricing and utilization levels under a temporarily strengthened competitive position.

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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, were as follows:

	For the Three Months Ended
	December 27, 2020					December 29, 2019
				% of Net Sales					% of Net Sales		% Change
Net sales	$	16,008			100.0	$	17,084			100.0		(6.3	)
Cost of sales		15,613			97.5		17,038			99.7		(8.4	)
Gross profit		395			2.5		46			0.3		758.7
Depreciation expense		438			2.7		503			2.9		(12.9	)
Segment Profit	$	833			5.2	$	549			3.2		51.7
Segment net sales as a percentage of    consolidated amounts		9.8	%				10.1	%
Segment Profit as a percentage of    consolidated amounts		2.7	%				2.6	%

The change in net sales for the Nylon Segment was as follows:

Net sales for the prior period	$	17,084
Net change in average selling price and sales mix		(957	)
Decrease in sales volumes		(119	)
Net sales for the current period	$	16,008

The decrease in net sales for the Nylon Segment from the prior period to the current period was primarily attributable to a shift in sales mix following declines in hosiery demand.

The change in Segment Profit for the Nylon Segment was as follows:

Segment Profit for the prior period	$	549
Net increase in underlying margins		288
Decrease in sales volumes		(4	)
Segment Profit for the current period	$	833

Segment Profit for the Nylon Segment in the current period was comparably stronger primarily due to manufacturing efficiencies.

Review of Results of Operations

Six Months Ended December 27, 2020 Compared to Six Months Ended December 29, 2019

Consolidated Overview

The below tables provide:

• the components of net income and the percentage increase or decrease over the prior fiscal year amounts,

• a reconciliation from net income to EBITDA and Adjusted EBITDA, and

• a reconciliation from net income to Adjusted Net Income and Adjusted EPS.

Following the tables is a discussion and analysis of the significant components of net income.

Net income

	For the Six Months Ended
	December 27, 2020						December 29, 2019
				% of Net Sales						% of Net Sales			% Change
Net sales	$	304,281			100.0		$	349,460			100.0			(12.9	)
Cost of sales		263,786			86.7			316,352			90.5			(16.6	)
Gross profit		40,495			13.3			33,108			9.5			22.3
SG&A		23,989			7.9			23,488			6.7			2.1
Benefit for bad debts		(1,146	)		(0.4	)		(249	)		(0.1	)	nm
Other operating expense, net		1,654			0.5			962			0.3			71.9
Operating income		15,998			5.3			8,907			2.6			79.6
Interest expense, net		1,392			0.5			1,936			0.6			(28.1	)
Equity in (earnings) loss of unconsolidated affiliates		(223	)		(0.1	)		1,622			0.5			(113.7	)
Income before income taxes		14,829			4.9			5,349			1.5			177.2
Provision for income taxes		3,933			1.3			1,228			0.3		nm
Net income	$	10,896			3.6		$	4,121			1.2			164.4

nm – Not meaningful

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EBITDA and Adjusted EBITDA (Non-GAAP Financial Measures)

The reconciliations of the amounts reported under GAAP for Net income to EBITDA and Adjusted EBITDA were as follows:

	For the Six Months Ended
	December 27, 2020		December 29, 2019
Net income	$	10,896	$	4,121
Interest expense, net		1,392		1,936
Provision for income taxes		3,933		1,228
Depreciation and amortization expense (1)		12,068		11,485
EBITDA		28,289		18,770
Equity in loss of PAL		—		2,012
EBITDA excluding PAL		28,289		20,782
Severance (2)		—		383
Adjusted EBITDA	$	28,289	$	21,165

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

(2) In the second quarter of fiscal 2020, UNIFI commenced a wind-down plan for its operations in Sri Lanka. The adjustment primarily reflects accrued severance and exit costs.

Adjusted Net Income and Adjusted EPS (Non-GAAP Measures)

The tables below set forth reconciliations of (i) Income before income taxes (“Pre-tax Income”), Provision for income taxes (“Tax Impact”) and Net Income to Adjusted Net Income and (ii) Diluted EPS to Adjusted EPS.

	For the Six Months Ended December 27, 2020									For the Six Months Ended December 29, 2019
	Pre-tax Income		Tax Impact			Net Income		Diluted EPS		Pre-tax Income		Tax Impact			Net Income		Diluted EPS
GAAP results	$	14,829	$	(3,933	)	$	10,896	$	0.58	$	5,349	$	(1,228	)	$	4,121	$	0.22
Severance (1)		—		—			—		—		383		(80	)		303		0.02
Adjusted results	$	14,829	$	(3,933	)	$	10,896	$	0.58	$	5,732	$	(1,308	)	$	4,424	$	0.24
Weighted average common shares outstanding									18,729									18,745

(1) In the second quarter of fiscal 2020, UNIFI commenced a wind-down plan for its operations in Sri Lanka. The adjustment primarily reflects accrued severance and exit costs.  

Net Sales

Consolidated net sales decreased $45,179, or 12.9%, for the current six-month period in comparison to the prior six-month period primarily attributable to (i) the COVID-19 pandemic, (ii) lower nylon sales volumes, (iii) lower average selling prices, and (iv) unfavorable foreign currency translation.

Consolidated sales volumes decreased 4.1%, primarily attributable to (i) the adverse impact of the COVID-19 pandemic on product demand and (ii) lower sales in the Nylon Segment. However, the overall volume decrease was partially offset by the Brazil Segment, which was agile and responsive to COVID-19 pandemic-related demand fluctuations in the current six-month period and generated volume growth by capturing market share from competitors.

Once the COVID-19 pandemic subsides, we believe incremental revenue for the Polyester Segment will be generated from our polyester textured yarn trade petitions (i) completed in early calendar 2020 and (ii) recently filed. However, our Nylon Segment results continue to reflect the adverse impacts of (i) customers shifting certain programs to overseas garment production and (ii) the current global trend of declining demand for nylon socks, ladies’ hosiery and intimate apparel.

Consolidated average sales prices decreased 8.8%, primarily attributable to (i) a decline in higher-priced nylon product sales, (ii) sales price declines associated with polyester raw material cost changes, and (iii) unfavorable foreign currency translation.

REPREVE^® Fiber products for the current six-month period comprised 36% of consolidated net sales, up from 32% for the prior six-month period and 31% for fiscal 2020.

Gross Profit

Gross profit for the current six-month period increased by $7,387, or 22.3%, as compared to the prior six-month period. The COVID-19 pandemic adversely impacted sales and production volumes in our Polyester and Nylon Segments, driving comparably lower profitability in the U.S. during the September 2020 quarter. However, the Brazil Segment outperformed the prior six-month period by capturing market share and maintaining strong conversion margin.  The COVID-19 pandemic also adversely impacted sales volumes in the Asia Segment.

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• For the Polyester Segment, gross profit benefited from a better sales mix, higher conversion margin and manufacturing cost improvements, but was adversely impacted by lower fixed cost absorption due to lower demand in the September 2020 quarter.

• For the Asia Segment, gross profit increased from the prior six-month period primarily due to supply chain efficiencies driving lower costs for certain products and sales mix improvements, partially offset by lower demand levels driven by the COVID-19 pandemic.

• For the Brazil Segment, gross profit increased from the prior six-month period primarily due to higher sales volumes and conversion margin due to temporary market share capture, partially offset by unfavorable foreign currency translation impacts.

• For the Nylon Segment, gross profit decreased primarily due to lower demand levels driven by the COVID-19 pandemic.

SG&A

SG&A increased from the prior six-month period, primarily due to higher accrued incentive compensation, partially offset by lower professional fees and travel and entertainment expenses in the current six-month period.

Benefit for Bad Debts

The current six-month period benefit for bad debts reflects general improvement in customer payment frequency following the adverse effects of the COVID-19 pandemic on customer health.

Other Operating Expense, Net

The current six-month period and the prior six-month period both reflect severance charges, along with foreign currency transaction losses of $606 and $30 in the current six-month period and in the prior six-month period, respectively.

Interest Expense, Net

Interest expense, net decreased from the prior six-month period to the current six-month period, primarily attributable to a lower average debt principal. The components of consolidated interest expense, net were as follows:

	For the Six Months Ended
	December 27, 2020			December 29, 2019
Interest and fees on the ABL Facility	$	1,497		$	2,049
Other interest		180			240
Subtotal of interest on debt obligations		1,677			2,289
Other components of interest expense		27			69
Total interest expense		1,704			2,358
Interest income		(312	)		(422	)
Interest expense, net	$	1,392		$	1,936

Equity in (Earnings) Loss of Unconsolidated Affiliates

The components of equity in (earnings) loss of unconsolidated affiliates were as follows:

	For the Six Months Ended
	December 27, 2020			December 29, 2019
Loss from PAL	$	—		$	2,012
Earnings from nylon joint ventures		(223	)		(390	)
Total equity in (earnings) loss of unconsolidated affiliates	$	(223	)	$	1,622
As a percentage of consolidated income before income taxes		1.5	%		(30.3	)%

On April 29, 2020, UNIFI sold its 34% non-controlling partnership interest in PAL. The comparative decrease in loss from PAL reflects a loss recorded in the prior six-month period with no results recorded in the current six-month period.

Income Taxes

Provision for income taxes and the effective tax rate were as follows:

	For the Six Months Ended
	December 27, 2020			December 29, 2019
Provision for income taxes	$	3,933		$	1,228
Effective tax rate		26.5	%		23.0	%

The effective tax rate is subject to variation due to numerous factors, including variability in the amount of income before income taxes, the mix of income by jurisdiction, changes in deferred tax valuation allowances and changes in statutes, regulations and case law.  Additionally, the impacts of discrete and other rate impacting items are greater when income before income taxes is lower.

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The increase in the effective tax rate from the prior six-month period to the current six-month period is primarily attributable to (i) an expense recorded in the current six-month period to increase the valuation allowance for deferred tax assets, (ii) a higher rate impact of U.S. tax on GILTI in the current six-month period, and (iii) a benefit for foreign tax credits in the prior six-month period. This increase is partially offset by a discrete benefit in the current six-month period for the retroactive GILTI high-tax exclusion for prior periods.

Net Income

Net income for the current six-month period was $10,896, or $0.58 per share, compared to net income of $4,121 or $0.22 per share, for the prior six-month period. The change in net income was primarily attributable to higher gross profit in the Brazil and Asia Segments in the current six-month period and a loss from PAL in the prior six-month period, partially offset by unfavorable foreign currency impacts.

Adjusted EBITDA (Non-GAAP Financial Measure)

Adjusted EBITDA increased from the prior six-month period to the current six-month period, primarily attributable to higher gross profit.

Segment Overview

Following is a discussion and analysis of the revenue and profitability performance of UNIFI’s reportable segments for the current six-month period.

Polyester Segment

The components of Segment Profit, each component as a percentage of net sales and the percentage increase or decrease over the prior six-month period amounts for the Polyester Segment, were as follows:

	For the Six Months Ended
	December 27, 2020					December 29, 2019
				% of Net Sales					% of Net Sales		% Change
Net sales	$	145,772			100.0	$	171,445			100.0		(15.0	)
Cost of sales		130,245			89.4		156,990			91.6		(17.0	)
Gross profit		15,527			10.6		14,455			8.4		7.4
Depreciation expense		8,873			6.1		8,224			4.8		7.9
Segment Profit	$	24,400			16.7	$	22,679			13.2		7.6
Segment net sales as a percentage of   consolidated amounts		47.9	%				49.1	%
Segment Profit as a percentage of   consolidated amounts		47.5	%				52.5	%

The change in net sales for the Polyester Segment was as follows:

Net sales for the prior six-month period	$	171,445
Net change in average selling price and sales mix		(13,377	)
Decrease in sales volumes		(12,296	)
Net sales for the current six-month period	$	145,772

The decrease in net sales for the Polyester Segment from the prior six-month period to the current six-month period was primarily attributable to (i) the adverse impact of COVID-19 pandemic on market demand, (ii) lower average selling prices associated with lower polyester raw material costs, and (iii) a higher proportion of Flake sales, which carry lower sales prices than other products.

The change in Segment Profit for the Polyester Segment was as follows:

Segment Profit for the prior six-month period	$	22,679
Change in underlying margins and sales mix		3,347
Decrease in sales volumes		(1,626	)
Segment Profit for the current six-month period	$	24,400

The increase in Segment Profit for the Polyester Segment from the prior six-month period to the current six-month period was primarily attributable to a better sales mix, stable conversion margin and manufacturing cost improvements, partially offset by lower sales volumes experienced in the September 2020 quarter in connection with the COVID-19 pandemic.

Asia Segment

The components of Segment Profit, each component as a percentage of net sales and the percentage increase or decrease over the prior six-month period amounts for the Asia Segment, were as follows:

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	For the Six Months Ended
	December 27, 2020					December 29, 2019
				% of Net Sales					% of Net Sales		% Change
Net sales	$	82,415			100.0	$	93,875			100.0		(12.2	)
Cost of sales		71,309			86.5		84,076			89.6		(15.2	)
Gross profit		11,106			13.5		9,799			10.4		13.3
Depreciation expense		—			—		—			—		—
Segment Profit	$	11,106			13.5	$	9,799			10.4		13.3
Segment net sales as a percentage of   consolidated amounts		27.1	%				26.9	%
Segment Profit as a percentage of   consolidated amounts		21.6	%				22.7	%

The change in net sales for the Asia Segment was as follows:

Net sales for the prior six-month period	$	93,875
Decrease in sales volumes of Chip and staple fiber		(12,332	)
Change in average selling price and sales mix		(6,900	)
Net increase in sales volumes of certain other products		4,083
Favorable foreign currency translation effects		3,689
Net sales for the current six-month period	$	82,415

The decrease in net sales for the Asia Segment from the prior six-month period to the current six-month period was primarily attributable to overall lower sales volumes and average selling prices driven by the adverse impacts of the COVID-19 pandemic, partially offset by the continued momentum of REPREVE^®-branded products.

The RMB weighted average exchange rate was 6.75 RMB/USD and 7.03 RMB/USD for the current six-month period and the prior six-month period, respectively.  

The change in Segment Profit for the Asia Segment was as follows:

Segment Profit for the prior six-month period	$	9,799
Change in underlying margins and sales mix		1,840
Favorable foreign currency translation effects		406
Decrease in sales volumes		(939	)
Segment Profit for the current six-month period	$	11,106

The increase in Segment Profit for the Asia Segment from the prior six-month period to the current six-month period was primarily attributable to raw material cost benefits achieved on certain product lines and sales mix improvements, partially offset by the decrease in sales volumes described in the net sales analysis above.

Brazil Segment

The components of Segment Profit, each component as a percentage of net sales and the percentage increase or decrease over the prior six-month period amounts for the Brazil Segment, were as follows:

	For the Six Months Ended
	December 27, 2020					December 29, 2019
				% of Net Sales					% of Net Sales		% Change
Net sales	$	46,859			100.0	$	45,034			100.0		4.1
Cost of sales		34,269			73.1		37,445			83.1		(8.5	)
Gross profit		12,590			26.9		7,589			16.9		65.9
Depreciation expense		751			1.6		732			1.6		2.6
Segment Profit	$	13,341			28.5	$	8,321			18.5		60.3
Segment net sales as a percentage of   consolidated amounts		15.4	%				12.9	%
Segment Profit as a percentage of   consolidated amounts		26.0	%				19.3	%

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The change in net sales for the Brazil Segment was as follows:

Net sales for the prior six-month period	$	45,034
Increase in sales volumes		9,129
Increase in average selling price and change in sales mix		4,052
Unfavorable foreign currency translation effects		(11,356	)
Net sales for the current six-month period	$	46,859

The increase in net sales for the Brazil Segment from the prior six-month period to the current six-month period was primarily attributable to an improvement in sales volumes due to the Brazil Segment’s ability to capture market share from competitors during the first six months of fiscal 2021, partially offset by unfavorable foreign currency translation effects.

The BRL weighted average exchange rate was 5.40 BRL/USD and 4.04 BRL/USD for the current six-month period and the prior six-month period, respectively.  

The change in Segment Profit for the Brazil Segment was as follows:

Segment Profit for the prior six-month period	$	8,321
Increase in underlying margins		5,437
Increase in sales volumes		1,685
Unfavorable foreign currency translation effects		(2,102	)
Segment Profit for the current six-month period	$	13,341

The increase in Segment Profit for the Brazil Segment from the prior six-month period to the current six-month period was primarily attributable to an improved sales mix and conversion margin combined with higher sales volumes stemming from a temporarily improved competitive position in Brazil, partially offset by unfavorable foreign currency translation effects.

Nylon Segment

The components of Segment Profit, each component as a percentage of net sales and the percentage increase or decrease over the prior six-month period amounts for the Nylon Segment, were as follows:

	For the Six Months Ended
	December 27, 2020					December 29, 2019
				% of Net Sales					% of Net Sales		% Change
Net sales	$	27,037			100.0	$	37,286			100.0		(27.5	)
Cost of sales		25,977			96.1		36,062			96.7		(28.0	)
Gross profit		1,060			3.9		1,224			3.3		(13.4	)
Depreciation expense		880			3.3		994			2.7		(11.5	)
Segment Profit	$	1,940			7.2	$	2,218			6.0		(12.5	)
Segment net sales as a percentage of   consolidated amounts		8.9	%				10.7	%
Segment Profit as a percentage of   consolidated amounts		3.8	%				5.1	%

The change in net sales for the Nylon Segment was as follows:

Net sales for the prior six-month period	$	37,286
Decrease in sales volumes		(7,982	)
Net change in average selling price and sales mix		(2,267	)
Net sales for the current six-month period	$	27,037

The decrease in net sales for the Nylon Segment from the prior six-month period to the current six-month period was primarily attributable to (i) demand declines in connection with the COVID-19 pandemic and (ii) a customer shifting certain programs to overseas garment production subsequent to the prior six-month period, contributing to (iii) a weaker sales mix following declines in hosiery demand.

The change in Segment Profit for the Nylon Segment was as follows:

Segment Profit for the prior six-month period	$	2,218
Decrease in sales volumes		(475	)
Net increase in underlying margins		197
Segment Profit for the current six-month period	$	1,940

The decrease in Segment Profit for the Nylon Segment from the prior six-month period to the current six-month period was primarily attributable to lower sales, as described in the net sales analysis above.

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Liquidity and Capital Resources

UNIFI’s primary capital requirements are for working capital, capital expenditures, debt service and share repurchases.  UNIFI’s primary sources of capital are cash generated from operations and borrowings available under the ABL Revolver of its credit facility.  For the current six-month period, cash generated from operations was $19,726, and, at December 27, 2020, excess availability under the ABL Revolver was $56,039.

As of December 27, 2020, all of UNIFI’s $92,896 of debt obligations were guaranteed by certain of its domestic operating subsidiaries, while 40% of UNIFI’s cash and cash equivalents were held by its foreign subsidiaries. Cash and cash equivalents held by foreign subsidiaries may not be presently available to fund UNIFI’s domestic capital requirements, including its domestic debt obligations. UNIFI employs a variety of 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 December 27, 2020 for domestic operations compared to foreign operations:  

	Domestic		Foreign		Total
Cash and cash equivalents	$	50,180	$	33,141	$	83,321
Borrowings available under financing arrangements		56,039		—		56,039
Liquidity	$	106,219	$	33,141	$	139,360
Working capital	$	105,791	$	110,756	$	216,547
Total debt obligations	$	92,896	$	—	$	92,896

COVID-19 Pandemic Liquidity Considerations

Because global economic activity slowed within a short period of time, the COVID-19 pandemic introduced liquidity risk that was not present prior to calendar 2020. UNIFI believes that aggressive and prudent actions are necessary to preserve liquidity in the current economic environment, which is pressured by global demand declines that began in March 2020. Accordingly, to minimize the disruption to operations that could result from outbreaks among UNIFI employees, UNIFI has prioritized health and safety measures that include restricting travel and group meetings, enforcing social distancing and healthy habits, increased sanitation and disinfection and increased wellness monitoring. Additionally, the following aid in reducing risk and ensuring adequate cash is available to fund ongoing operations and obligations:

• Managing working capital levels and ensuring higher inventory turns.

• Participating in the supply chain for personal protective equipment and new customer programs.

• Lowering discretionary expenses that focus on long-term returns, such as marketing, event and other commercial expenses.

• Maintaining significant cash reserves from the proceeds from the PAL Investment sale in April 2020.

While we currently expect our significant cash balances and available borrowings to provide adequate liquidity during the on-going COVID-19 pandemic, should global demand and economic activity remain subdued beyond the short-term, UNIFI maintains the ability to (i) pursue aid and lending programs from governmental entities, (ii) seek additional credit or financing arrangements or extensions of existing arrangements, and (iii) implement further cost reduction initiatives to preserve cash and secure the longevity of the business and operations.

The following further describe the current strength of UNIFI’s liquidity position and access to capital resources:

• We have not accessed public or private capital markets for recent liquidity needs.

• We do not currently expect our cost of or access to existing capital and funding sources to materially change as a result of the COVID-19 pandemic; however, new capital and funding sources (if any) may carry higher costs than our current structure.

• We have not taken advantage of rent, lease or debt deferrals, forbearance periods or other concessions, nor have we modified any material agreements to provide concessions.

• We have not relied on supply chain financing, structured trade payables or vendor financing.

• We are not at material risk of not meeting our financial covenants.

• We continue to maintain significant borrowing availability on our existing credit facility.

Lastly, the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”) allowed UNIFI to defer certain employer payroll tax payments to future periods, extend utilization of a net operating loss carryback, and attain certain employee retention credits, all of which are not material to our short- and long-term liquidity position. We have not applied for or obtained any other material federal or state assistance.

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Debt Obligations

The following table presents the total balances outstanding for UNIFI’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	December 27, 2020	December 27, 2020			June 28, 2020
ABL Revolver	December 2023	0.0%	$	—		$	—
ABL Term Loan (1)	December 2023	3.3%		82,500			87,500
Finance lease obligations	(2)	3.6%		10,396			11,381
Total debt				92,896			98,881
Current ABL Term Loan				(10,000	)		(10,000	)
Current portion of finance lease obligations				(3,683	)		(3,563	)
Unamortized debt issuance costs				(592	)		(711	)
Total long-term debt			$	78,621		$	84,607

(1)     Includes the effects of interest rate swaps.

(2)     Scheduled maturity dates for finance lease obligations range from May 2022 to November 2027.

As of December 27, 2020:

• UNIFI was in compliance with all financial covenants in the Credit Agreement,

• excess availability under the ABL Revolver was $56,039,

• the Trigger Level (as defined in the Credit Agreement) was $22,813, and

• $0 of standby letters of credit were outstanding.

UNIFI currently maintains three interest rate swaps that fix LIBOR at approximately 1.9% on $75,000 of variable-rate debt. Such swaps are scheduled to terminate in May 2022. Management will continue to monitor the potential termination of LIBOR and the potential impact on UNIFI’s operations. However, management does not expect (i) significant efforts are necessary to accommodate a termination of LIBOR or (ii) a significant impact to UNIFI’s operations upon a termination of LIBOR.

In addition to making payments in accordance with the scheduled maturities of debt required under its existing debt obligations, UNIFI 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 UNIFI’s strategy, prevailing market conditions, liquidity requirements, contractual restrictions and other factors.

Scheduled Debt Maturities

The following table presents the scheduled maturities of UNIFI’s outstanding debt obligations for the remainder of fiscal 2021, the following four fiscal years and thereafter:

	Fiscal 2021		Fiscal 2022		Fiscal 2023		Fiscal 2024		Fiscal 2025		Thereafter
ABL Revolver	$	—	$	—	$	—	$	—	$	—	$	—
ABL Term Loan		5,000		10,000		10,000		57,500		—		—
Finance lease obligations		1,921		3,545		1,257		1,301		1,195		1,177
Total	$	6,921	$	13,545	$	11,257	$	58,801	$	1,195	$	1,177

Net Debt (Non-GAAP Financial Measure)

The reconciliations for Net Debt are as follows:

	December 27, 2020		June 28, 2020
Long-term debt	$	78,621	$	84,607
Current portion of long-term debt		13,683		13,563
Unamortized debt issuance costs		592		711
Debt principal		92,896		98,881
Less: cash and cash equivalents		83,321		75,267
Net Debt	$	9,575	$	23,614

32

Working Capital and Adjusted Working Capital (Non-GAAP Financial Measures)

The following table presents the components of working capital and the reconciliation of working capital to Adjusted Working Capital:

	December 27, 2020			June 28, 2020
Cash and cash equivalents	$	83,321		$	75,267
Receivables, net		83,124			53,726
Inventories		111,489			109,704
Income taxes receivable		9,283			4,033
Other current assets		10,282			11,763
Accounts payable		(38,786	)		(25,610	)
Accrued expenses		(20,331	)		(13,689	)
Other current liabilities		(21,835	)		(15,695	)
Working capital	$	216,547		$	199,499
Less: Cash and cash equivalents		(83,321	)		(75,267	)
Less: Income taxes receivable		(9,283	)		(4,033	)
Less: Other current liabilities		21,835			15,695
Adjusted Working Capital	$	145,778		$	135,894

Working capital increased from $199,499 as of June 28, 2020 to $216,547 as of December 27, 2020, while Adjusted Working Capital increased from $135,894 to $145,778.

The increase in cash and cash equivalents was driven by the operating cash flows generated by our global operations. The increase in receivables, net was primarily attributable to increased sales in the current six-month period following low sales activity in the June 2020 quarter due to significantly suppressed demand levels caused by the COVID-19 pandemic. The increase in inventories was insignificant. The decrease in other current assets was primarily due to the amount and timing of contract assets revenue recognition. The increase in accounts payable was consistent with the increase in sales and production activity. The increase in accrued expenses was primarily attributable to an increase in deferred revenue for increased sales activity in the Asia Segment and higher incentive compensation accruals in the current six-month period.

Capital Projects

During the current six-month period, UNIFI invested $6,035 in capital projects, primarily relating to (i) further improvements in production capabilities and technology enhancements in the Americas, (ii) eAFK Evo texturing machinery, and (iii) routine annual maintenance capital expenditures.  Maintenance capital expenditures are necessary to support UNIFI’s current operations, capacities and capabilities and exclude expenses relating to repairs and costs that do not extend an asset’s useful life.

For the remainder of fiscal 2021, we expect to invest approximately $18,000 in capital projects for an aggregate annual estimate of approximately $24,000, to include (i) making further improvements in production capabilities and technology enhancements in the Americas, (ii) continuing the purchase and installation of new eAFK Evo texturing machines, and (iii) annual maintenance capital expenditures.

The total amount ultimately invested for fiscal 2021 could be more or less than the currently estimated amount depending on the timing and scale of contemplated initiatives and is expected to be funded primarily by existing cash and cash equivalents.  UNIFI expects recent and future capital projects to provide benefits to future profitability. The additional assets from these capital projects consist primarily of machinery and equipment.

Share Repurchase Program

On October 31, 2018, the Board approved the 2018 SRP under which UNIFI is authorized to acquire up to $50,000 of its common stock. Under the 2018 SRP, purchases will be made from time to time in the open market at prevailing market prices or through private transactions or block trades. The timing and amount of repurchases will depend on market conditions, share price, applicable legal requirements and other factors. The share repurchase authorization is discretionary and has no expiration date.

As of December 27, 2020, UNIFI repurchased a total of 84 shares, at an average price of $23.72 (for a total of $1,994 inclusive of commission costs) pursuant to the 2018 SRP.  $48,008 remains available under the 2018 SRP as of December 27, 2020.

Liquidity Summary

UNIFI 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.  UNIFI believes that its existing cash balances, cash provided by operating activities and borrowings available under the ABL Revolver will enable UNIFI to comply with the terms of its indebtedness and meet its foreseeable liquidity requirements.  Domestically, UNIFI’s cash balances, cash provided by operating activities and borrowings available under the ABL Revolver continue to be sufficient to fund UNIFI’s domestic operating activities as well as cash commitments for its investing and financing activities.  For its foreign operations, UNIFI expects its existing cash balances and cash provided by operating activities will provide the needed liquidity to fund its foreign operating activities and any foreign investing activities, such as future capital expenditures. However, expansion of our foreign operations may require cash sourced from our domestic subsidiaries.

33

Operating Cash Flows

The significant components of net cash provided by operating activities are summarized below.

	For the Six Months Ended
	December 27, 2020			December 29, 2019
Net income	$	10,896		$	4,121
Equity in (earnings) loss of unconsolidated affiliates		(223	)		1,622
Depreciation and amortization expense		12,187			11,610
Non-cash compensation expense		1,816			1,837
Deferred income taxes		(1,700	)		(878	)
Subtotal		22,976			18,312
Distributions received from unconsolidated affiliates		—			10,437
Other changes		(3,250	)		(114	)
Net cash provided by operating activities	$	19,726		$	28,635

The decrease in net cash provided by operating activities from the prior six-month period was primarily due to $10,437 of distributions received from PAL in September 2019, while higher Adjusted EBITDA was partially offset by an increase in Adjusted Working Capital in the current six-month period, both commensurate with business recovery since June 2020.

Investing Cash Flows

Investing activities include $6,035 for capital expenditures, which primarily relate to ongoing maintenance capital expenditures along with production capabilities and technology enhancements in the Americas.

Financing Cash Flows

Financing activities include payments against the ABL Term Loan and finance leases during fiscal 2021.

Contractual Obligations

UNIFI has incurred various financial obligations and commitments in its normal course of business.  Financial obligations are considered to represent known future cash payments that UNIFI is required to make under existing contractual arrangements, such as debt and lease agreements.

There have been no material changes in the scheduled maturities of UNIFI’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 2020 Form 10-K.

Off-Balance Sheet Arrangements

UNIFI 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 UNIFI’s financial condition, results of operations, liquidity or capital expenditures.

Critical Accounting Policies

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 estimate from quarter to quarter could materially impact the presentation of the financial statements.  UNIFI’s critical accounting policies are discussed in the 2020 Form 10-K.  There were no material changes to these policies during the current six-month period.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

UNIFI is exposed to market risks associated with changes in interest rates, fluctuations in foreign currency exchange rates, and raw material and commodity costs, which may adversely affect its financial position, results of operations or cash flows.  UNIFI does not enter into derivative financial instruments for trading purposes, nor is it a party to any leveraged financial instruments.

Interest Rate Risk

UNIFI is exposed to interest rate risk through its borrowing activities.  As of December 27, 2020, UNIFI had borrowings under its ABL Revolver and ABL Term Loan that totaled $82,500 and contain variable rates of interest; however, UNIFI hedges a significant portion of such interest rate variability using interest rate swaps.  After considering the variable rate debt obligations that have been hedged and UNIFI’s outstanding debt obligations with fixed rates of interest, UNIFI’s sensitivity analysis indicates that a 50-basis point increase in LIBOR as of December 27, 2020 would result in an increase in annual interest expense of less than $100.

34

Foreign Currency Exchange Rate Risk

UNIFI conducts its business in various foreign countries and in various foreign currencies.  Each of UNIFI’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 UNIFI to foreign currency exchange rate risk.  UNIFI may enter into foreign currency forward contracts to hedge this exposure.  UNIFI may also enter into foreign currency forward contracts to hedge its exposure for certain equipment or inventory purchase commitments.  As of December 27, 2020, UNIFI had no outstanding foreign currency forward contracts.

A significant portion of raw materials purchased by UNIFI’s Brazilian subsidiary are denominated in USDs, requiring UNIFI to regularly exchange BRL. A significant portion of sales and asset balances for our Asian subsidiaries are denominated in USDs. During recent fiscal years, UNIFI was negatively impacted by a devaluation of the BRL.  Also, the RMB experienced fluctuations in value at times during fiscal 2021, 2020 and 2019, which generated foreign currency translation losses in certain fiscal quarters. Discussion and analysis surrounding the impact of the devaluation of the BRL and fluctuations in the value of the RMB on UNIFI’s results of operations are included above in “Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.”

As of December 27, 2020, UNIFI’s subsidiaries outside the U.S., whose functional currency is other than the USD, held approximately 22.4% of UNIFI’s consolidated total assets. UNIFI does not enter into foreign currency derivatives to hedge its net investment in its foreign operations.

As of December 27, 2020, $29,268, or 35.1%, of UNIFI’s cash and cash equivalents were held outside the U.S., of which $12,866 was held in USDs, $6,245 was held in RMB and $9,730 was held in BRL. Approximately $3,700 of USD were held inside the U.S. by a foreign subsidiary.

Raw Material and Commodity Risks

A significant portion of UNIFI’s raw material and energy costs are derived from petroleum-based chemicals.  The prices for petroleum and petroleum-related products and related energy costs are volatile and dependent on global supply and demand dynamics, including certain geo-political risks.  A sudden rise in the price of petroleum and petroleum-based products could have a material impact on UNIFI’s profitability.  UNIFI does not use financial instruments to hedge its exposure to changes in these costs.  The costs of the primary raw materials that UNIFI uses throughout all of its operations are generally based on USD 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.  UNIFI manages fluctuations in the cost of raw materials primarily by making corresponding adjustments to the prices charged to its customers.  Certain customers are subject to an index-based pricing model in which UNIFI’s prices are adjusted based on the change in the cost of raw materials in the prior quarter.  Pricing adjustments for other customers must be negotiated independently.  UNIFI attempts to pass on to its customers increases in raw material costs but due to market pressures, this is not always possible. When price increases can be implemented, there is typically a time lag that adversely affects UNIFI and its margins during one or more quarters.  In ordinary market conditions in which raw material price increases have stabilized and sales volumes are consistent with traditional levels, UNIFI has historically been successful in implementing price adjustments within one to two fiscal quarters of the raw material price increase for its index priced customers and within two fiscal quarters of the raw material price increase for its non-index priced customers.

During fiscal 2019 and 2018, UNIFI operated in a predominantly increasing raw material cost environment. UNIFI believes those higher costs were primarily a result of volatility in the crude oil markets, along with periods of supply and demand constraints for certain polyester feedstock.

During fiscal 2020 and the first six months of fiscal 2021, UNIFI has experienced a predominantly favorable, declining raw material cost environment. However, our raw material costs remain subject to the volatility described above and, should raw material costs increase unexpectedly, UNIFI’s results of operations and cash flows are likely to be adversely impacted.

Other Risks

UNIFI 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.

Item 4. Controls and Procedures

As of December 27, 2020, an evaluation of the effectiveness of UNIFI’s disclosure controls and procedures (as defined in Rules 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 UNIFI’s management, including the principal executive officer and principal financial officer. Based on that evaluation, UNIFI’s principal executive officer and principal financial officer concluded that UNIFI’s disclosure controls and procedures are effective to ensure that information required to be disclosed by UNIFI 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 UNIFI in the reports UNIFI files or submits under the Exchange Act is accumulated and communicated to UNIFI’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 UNIFI’s internal control over financial reporting during the three months ended December 27, 2020 that have materially affected, or are reasonably likely to materially affect, UNIFI’s internal control over financial reporting.

35

PART II—OTHER INFORMATION

Item 1. Legal Proceedings

We are 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. We maintain liability insurance for certain risks that is subject to certain self-insurance limits.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

Not applicable.

Item 6. Exhibits

Exhibit No.	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)).
3.3	Declaration of Amendment to the Amended and Restated By-laws of Unifi, Inc. effective April 30, 2019 (incorporated by reference to Exhibit 3.1 to the Current Report on Form 8-K filed May 1, 2019 (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.INS	Inline XBRL Instance Document – the instance document does not appear in the Interactive Data File because XBRL tags are embedded within the Inline XBRL document.
101.SCH	Inline XBRL Taxonomy Extension Schema Document
101.CAL	Inline XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF	Inline XBRL Taxonomy Extension Definition Linkbase Document
101.LAB	Inline XBRL Taxonomy Extension Label Linkbase Document
101.PRE	Inline XBRL Taxonomy Extension Presentation Linkbase Document
104	Cover Page Interactive Data File (embedded within the Inline XBRL document)

+ Filed herewith.

++ Furnished herewith.

36

SIGNATURES

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

	UNIFI, INC.
	(Registrant)
Date: February 3, 2021	By:	/s/ CRAIG A. CREATURO
		Craig A. Creaturo
		Executive Vice President & Chief Financial Officer
		(Principal Financial Officer and Principal Accounting Officer)

37

EX-31.1

Exhibit 31.1

CERTIFICATION

I, Edmund M. Ingle, 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:	February 3, 2021	/s/ EDMUND M. INGLE
		Edmund M. Ingle
		Chief Executive Officer
		(Principal Executive Officer)

EX-31.2

Exhibit 31.2

CERTIFICATION

I, Craig A. Creaturo, 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:	February 3, 2021	/s/ CRAIG A. CREATURO
		Craig A. Creaturo
		Executive Vice President & Chief Financial Officer
		(Principal Financial Officer)

EX-32.1

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 December 27, 2020, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Edmund M. Ingle, Chief Executive 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:

(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:	February 3, 2021	/s/ EDMUND M. INGLE
		Edmund M. Ingle
		Chief Executive Officer
		(Principal Executive Officer)

EX-32.2

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 December 27, 2020, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Craig A. Creaturo, Executive Vice President & 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:

(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:	February 3, 2021	/s/ CRAIG A. CREATURO
		Craig A. Creaturo
		Executive Vice President & Chief Financial Officer
		(Principal Financial Officer)

XML

Document And Entity Information - shares	6 Months Ended
	Dec. 27, 2020	Jan. 28, 2021
Cover [Abstract]
Entity Registrant Name	UNIFI, INC.
Entity Central Index Key	0000100726
Entity File Number	1-10542
Entity Tax Identification Number	11-2165495
Trading Symbol	UFI
Entity Incorporation, State or Country Code	NY
Current Fiscal Year End Date	--12-27
Entity Filer Category	Accelerated Filer
Entity Common Stock, Shares Outstanding (in shares)		18,480,750
Document Type	10-Q
Document Period End Date	Dec. 27, 2020
Document Fiscal Year Focus	2021
Document Fiscal Period Focus	Q2
Amendment Flag	false
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Small Business	false
Entity Emerging Growth Company	false
Entity Shell Company	false
Title of 12(b) Security	Common Stock, par value $0.10 per share
Security Exchange Name	NYSE
Entity Address, Address Line One	7201 West Friendly Avenue
Entity Address, City or Town	Greensboro
Entity Address, State or Province	NC
Entity Address, Postal Zip Code	27410
City Area Code	336
Local Phone Number	294-4410
Document Quarterly Report	true
Document Transition Report	false

XML

Condensed Consolidated Balance Sheets (Unaudited) - USD ($) $ in Thousands	Dec. 27, 2020	Jun. 28, 2020
ASSETS
Cash and cash equivalents	$ 83,321	$ 75,267
Receivables, net	83,124	53,726
Inventories	111,489	109,704
Income taxes receivable	9,283	4,033
Other current assets	10,282	11,763
Total current assets	297,499	254,493
Property, plant and equipment, net	199,884	204,246
Operating lease assets	8,082	8,940
Deferred income taxes	2,425	2,352
Other non-current assets	5,108	4,131
Total assets	512,998	474,162
LIABILITIES AND SHAREHOLDERS’ EQUITY
Accounts payable	38,786	25,610
Accrued expenses	20,331	13,689
Income taxes payable	6,467	349
Current operating lease liabilities	1,685	1,783
Current portion of long-term debt	13,683	13,563
Total current liabilities	80,952	54,994
Long-term debt	78,621	84,607
Non-current operating lease liabilities	6,538	7,251
Other long-term liabilities	11,010	8,606
Deferred income taxes	1,004	2,549
Total liabilities	178,125	158,007
Commitments and contingencies
Common stock, $0.10 par value (500,000,000 shares authorized; 18,480,750 and 18,446,436 shares issued and outstanding as of December 27, 2020 and June 28, 2020, respectively)	1,848	1,845
Capital in excess of par value	63,972	62,392
Retained earnings	326,620	315,724
Accumulated other comprehensive loss	(57,567)	(63,806)
Total shareholders’ equity	334,873	316,155
Total liabilities and shareholders’ equity	$ 512,998	$ 474,162

XML

Condensed Consolidated Balance Sheets (Unaudited) (Parenthetical) - $ / shares	Dec. 27, 2020	Jun. 28, 2020
Statement Of Financial Position [Abstract]
Common stock, par value (in dollars per share)	$ 0.10	$ 0.10
Common stock, shares authorized (in shares)	500,000,000	500,000,000
Common stock, shares issued (in shares)	18,480,750	18,446,436
Common stock, shares outstanding (in shares)	18,480,750	18,446,436

XML

Condensed Consolidated Statements of Income (Unaudited) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Dec. 27, 2020	Dec. 29, 2019	Dec. 27, 2020	Dec. 29, 2019
Income Statement [Abstract]
Net sales	$ 162,776	$ 169,511	$ 304,281	$ 349,460
Cost of sales	136,842	153,846	263,786	316,352
Gross profit	25,934	15,665	40,495	33,108
Selling, general and administrative expenses	12,625	12,508	23,989	23,488
Benefit for bad debts	(259)	(258)	(1,146)	(249)
Other operating expense, net	476	854	1,654	962
Operating income	13,092	2,561	15,998	8,907
Interest income	(187)	(212)	(312)	(422)
Interest expense	833	1,101	1,704	2,358
Equity in (earnings) loss of unconsolidated affiliates	(130)	756	(223)	1,622
Income before income taxes	12,576	916	14,829	5,349
Provision for income taxes	5,112	507	3,933	1,228
Net income	$ 7,464	$ 409	$ 10,896	$ 4,121
Net income per common share:
Basic	$ 0.40	$ 0.02	$ 0.59	$ 0.22
Diluted	$ 0.40	$ 0.02	$ 0.58	$ 0.22

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Condensed Consolidated Statements of Comprehensive Income (Unaudited) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Dec. 27, 2020	Dec. 29, 2019	Dec. 27, 2020	Dec. 29, 2019
Statement Of Income And Comprehensive Income [Abstract]
Net income	$ 7,464	$ 409	$ 10,896	$ 4,121
Other comprehensive income (loss):
Foreign currency translation adjustments	5,912	3,248	5,730	(3,080)
Changes in interest rate swaps, net of tax of $78, $0, $156 and $0, respectively	255	289	509	(39)
Other comprehensive income (loss), net	6,167	3,537	6,239	(3,119)
Comprehensive income	$ 13,631	$ 3,946	$ 17,135	$ 1,002

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Condensed Consolidated Statements of Comprehensive Income (Unaudited) (Parenthetical) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Dec. 27, 2020	Dec. 29, 2019	Dec. 27, 2020	Dec. 29, 2019
Statement Of Income And Comprehensive Income [Abstract]
Changes in interest rate swaps, tax	$ 78	$ 0	$ 156	$ 0

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Condensed Consolidated Statements of Shareholders' Equity (Unaudited) - USD ($) $ in Thousands	Total	Common Stock [Member]	Capital in Excess of Par Value [Member]	Retained Earnings [Member]	Accumulated Other Comprehensive Loss [Member]
Balance at Jun. 30, 2019	$ 392,845	$ 1,846	$ 59,560	$ 374,668	$ (43,229)
Balance (in shares) at Jun. 30, 2019		18,462,000
Options exercised	29	$ 1	28
Options exercised (in shares)		10,000
Conversion of restricted stock units		$ 4	(4)
Conversion of restricted stock units (in shares)		34,000
Stock-based compensation	1,703	$ 1	1,702
Stock-based compensation (in shares)		4,000
Common stock withheld in satisfaction of tax withholding obligations under net share settle transactions	(100)	$ (1)	(99)
Common stock withheld in satisfaction of tax withholding obligations under net share settle transactions (in shares)		(5,000)
Other comprehensive income, net of tax	(3,119)				(3,119)
Net income (loss)	4,121			4,121
Balance at Dec. 29, 2019	395,479	$ 1,851	61,187	378,789	(46,348)
Balance (in shares) at Dec. 29, 2019		18,505,000
Balance at Sep. 29, 2019	390,007	$ 1,849	59,663	378,380	(49,885)
Balance (in shares) at Sep. 29, 2019		18,490,000
Conversion of restricted stock units		$ 2	(2)
Conversion of restricted stock units (in shares)		16,000
Stock-based compensation	1,582	$ 1	1,581
Stock-based compensation (in shares)		4,000
Common stock withheld in satisfaction of tax withholding obligations under net share settle transactions	(56)	$ (1)	(55)
Common stock withheld in satisfaction of tax withholding obligations under net share settle transactions (in shares)		(5,000)
Other comprehensive income, net of tax	3,537				3,537
Net income (loss)	409			409
Balance at Dec. 29, 2019	395,479	$ 1,851	61,187	378,789	(46,348)
Balance (in shares) at Dec. 29, 2019		18,505,000
Balance at Jun. 28, 2020	$ 316,155	$ 1,845	62,392	315,724	(63,806)
Balance (in shares) at Jun. 28, 2020	18,446,436	18,446,000
Options exercised (in shares)		1,000
Conversion of restricted stock units		$ 4	(4)
Conversion of restricted stock units (in shares)		38,000
Stock-based compensation	$ 1,648		1,648
Common stock withheld in satisfaction of tax withholding obligations under net share settle transactions	(65)	$ (1)	(64)
Common stock withheld in satisfaction of tax withholding obligations under net share settle transactions (in shares)		(4,000)
Other comprehensive income, net of tax	6,239				6,239
Net income (loss)	10,896			10,896
Balance at Dec. 27, 2020	$ 334,873	$ 1,848	63,972	326,620	(57,567)
Balance (in shares) at Dec. 27, 2020	18,480,750	18,481,000
Balance at Sep. 27, 2020	$ 320,077	$ 1,845	62,810	319,156	(63,734)
Balance (in shares) at Sep. 27, 2020		18,447,000
Options exercised (in shares)		1,000
Conversion of restricted stock units		$ 4	(4)
Conversion of restricted stock units (in shares)		36,000
Stock-based compensation	1,223		1,223
Common stock withheld in satisfaction of tax withholding obligations under net share settle transactions	(58)	$ (1)	(57)
Common stock withheld in satisfaction of tax withholding obligations under net share settle transactions (in shares)		(3,000)
Other comprehensive income, net of tax	6,167				6,167
Net income (loss)	7,464			7,464
Balance at Dec. 27, 2020	$ 334,873	$ 1,848	$ 63,972	$ 326,620	$ (57,567)
Balance (in shares) at Dec. 27, 2020	18,480,750	18,481,000

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Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands	6 Months Ended
	Dec. 27, 2020	Dec. 29, 2019
Statement Of Cash Flows [Abstract]
Cash and cash equivalents at beginning of period	$ 75,267	$ 22,228
Operating activities:
Net income	10,896	4,121
Adjustments to reconcile net income to net cash provided by operating activities:
Equity in (earnings) loss of unconsolidated affiliates	(223)	1,622
Distributions received from unconsolidated affiliates		10,437
Depreciation and amortization expense	12,187	11,610
Non-cash compensation expense	1,816	1,837
Deferred income taxes	(1,700)	(878)
Other, net	(25)	(64)
Changes in assets and liabilities:
Receivables, net	(28,558)	9,873
Inventories	311	(1,330)
Other current assets	1,862	(2,159)
Income taxes	890	(249)
Accounts payable and accrued expenses	18,830	(6,298)
Other, net	3,440	113
Net cash provided by operating activities	19,726	28,635
Investing activities:
Capital expenditures	(6,035)	(8,335)
Purchase of intangible asset	(1,088)
Other, net	163	60
Net cash used by investing activities	(6,960)	(8,275)
Financing activities:
Proceeds from ABL Revolver		41,100
Payments on ABL Revolver		(38,000)
Payments on ABL Term Loan	(5,000)	(5,000)
Payments on finance lease obligations	(1,725)	(3,085)
Other, net	(64)	(70)
Net cash used by financing activities	(6,789)	(5,055)
Effect of exchange rate changes on cash and cash equivalents	2,077	(323)
Net increase in cash and cash equivalents	8,054	14,982
Cash and cash equivalents at end of period	$ 83,321	$ 37,210

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Background

6 Months Ended

Dec. 27, 2020

Organization Consolidation And Presentation Of Financial Statements [Abstract]

Background

1.  Background

Unifi, Inc., a New York corporation formed in 1969 (together with its subsidiaries, “UNIFI,” the “Company,” “we,” “us” or “our”), is a multinational company that manufactures and sells innovative recycled and synthetic products, made from polyester and nylon, primarily to other yarn manufacturers and knitters and weavers (UNIFI’s direct customers) that produce yarn and/or fabric for the apparel, hosiery, home furnishings, automotive, industrial and other end-use markets (UNIFI’s indirect customers).  We refer to these indirect customers as “brand partners.” Polyester products include partially oriented yarn (“POY”), textured, solution and package dyed, twisted, beamed and draw wound yarns, and each is available in virgin or recycled varieties. Recycled solutions, made from both pre-consumer and post-consumer waste, include plastic bottle flake (“Flake”), polyester polymer beads (“Chip”) and staple fiber.  Nylon products include virgin or recycled textured, solution dyed and spandex covered yarns.

UNIFI maintains one of the textile industry’s most comprehensive product offerings that include a range of specialized, value-added and commodity solutions, with principal geographic markets in the Americas, Asia and Europe. UNIFI has direct manufacturing operations in four countries and participates in joint ventures with operations in Israel and the United States (“U.S.”).

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Basis of Presentation; Condensed Notes

6 Months Ended

Dec. 27, 2020

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 U.S. (“GAAP”) for interim financial information. As contemplated by the instructions of 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 UNIFI’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 28, 2020 (the “2020 Form 10-K”).

The financial information included in this report has been prepared by UNIFI, 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 amounts, except per share amounts, are presented in thousands (000s), except as otherwise noted.

The fiscal quarter for each of Unifi, Inc., its primary domestic operating subsidiaries and its subsidiary in El Salvador ended on December 27, 2020. Unifi, Inc.’s remaining material operating subsidiaries’ fiscal quarter ended on December 31, 2020. There were no significant transactions or events that occurred between Unifi, Inc.’s fiscal quarter end and such wholly owned subsidiaries’ subsequent fiscal quarter end. The three-month periods ended December 27, 2020 and December 29, 2019 both consisted of 13 weeks. The six-month periods ended December 27, 2020 and December 29, 2019 both consisted of 26 weeks.  

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Recent Accounting Pronouncements

6 Months Ended

Dec. 27, 2020

New Accounting Pronouncements And Changes In Accounting Principles [Abstract]

Recent Accounting Pronouncements

3.  Recent Accounting Pronouncements

Recently Adopted

In June 2016, the Financial Accounting Standards Board (the “FASB”) issued Accounting Standards Update (“ASU”) No. 2016-13, Financial Instruments - Credit Losses, with an effective date consistent with UNIFI’s fiscal 2021. The new guidance requires a financial asset measured at amortized cost basis to be presented at the net amount expected to be collected and eliminates the probable initial recognition threshold to instead reflect an entity’s current estimate of all expected credit losses. UNIFI adopted the ASU in fiscal 2021 using the modified retrospective approach and the adoption did not have a material impact to UNIFI’s financial position or results of operations.

Based on UNIFI’s review of ASUs issued since the filing of the 2020 Form 10-K, there have been no other newly issued or newly applicable accounting pronouncements that have had, or are expected to have, a material impact on UNIFI’s consolidated financial statements.

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Revenue Recognition

6 Months Ended

Dec. 27, 2020

Revenue From Contract With Customer [Abstract]

Revenue Recognition

4.  Revenue Recognition

The following tables present disaggregated revenues for UNIFI:

	For the Three Months Ended				For the Six Months Ended
	December 27, 2020		December 29, 2019		December 27, 2020		December 29, 2019
Third-party manufacturer	$	160,146	$	167,537	$	298,987	$	345,557
Service		2,630		1,974		5,294		3,903
Net sales	$	162,776	$	169,511	$	304,281	$	349,460

	For the Three Months Ended				For the Six Months Ended
	December 27, 2020		December 29, 2019		December 27, 2020		December 29, 2019
REPREVE® Fiber	$	60,660	$	56,893	$	110,518	$	113,378
Non-REPREVE® Fiber		102,116		112,618		193,763		236,082
Total	$	162,776	$	169,511	$	304,281	$	349,460

Third-Party Manufacturer

Third-party manufacturer revenue is primarily generated through sales to direct customers. Such sales represent satisfaction of UNIFI’s performance obligations required by the associated revenue contracts. Each of UNIFI’s reportable segments derives revenue from sales to third-party manufacturers.

Service Revenue

Service revenue is primarily generated, as services are rendered, through fulfillment of toll manufacturing of textile products or transportation services governed by written agreements. Such toll manufacturing and transportation services represent satisfaction of UNIFI’s performance obligations required by the associated revenue contracts. The Polyester Segment derives service revenue for toll manufacturing and the All Other category derives service revenue for transportation services.

REPREVE^® Fiber

REPREVE^® Fiber represents UNIFI’s platform of recycled polyester and recycled nylon filament and staple fiber products in either base recycled form or with added technologies.

Variable Consideration

Volume-based incentives

Volume-based incentives involve rebates or refunds of cash that are redeemable if the customer satisfies certain order volume thresholds during a defined time period. Under these incentive programs, UNIFI estimates the anticipated rebate to be paid and allocates a portion of the estimated cost of the rebate to each underlying sales transaction with the customer.

Product claims

UNIFI generally offers customers claims support or remuneration for defective products. UNIFI estimates the amount of its product sales that may be claimed as defective by its customers and records this estimate as a reduction of revenue in the period the related product revenue is recognized.

For all variable consideration, where appropriate, UNIFI estimates the amount using the expected value method, which takes into consideration historical experience, current contractual requirements, specific known market events and forecasted customer buying and payment patterns. Overall, these reserves reflect UNIFI’s best estimates of the amount of consideration to which the customer is entitled based on the terms of the contracts.

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Receivables, Net

6 Months Ended

Dec. 27, 2020

Receivables [Abstract]

Receivables, Net

5.  Receivables, Net

Receivables, net consists of the following:

	December 27, 2020			June 28, 2020
Customer receivables	$	69,796		$	53,307
Allowance for uncollectible accounts		(2,675	)		(3,796	)
Reserves for quality claims		(822	)		(928	)
Net customer receivables		66,299			48,583
Other receivables		16,825			5,143
Total receivables, net	$	83,124		$	53,726

Other receivables includes $14,532 of banker’s acceptance notes (“BANs”) as of December 27, 2020 in connection with the settlement of customer receivables generated from trade activity in the Asia Segment. The BANs are redeemable upon maturity from the drawing financial institutions, or earlier at a discount. BANs of $1,596 previously reflected in customer receivables as of June 28, 2020 have been reclassified to other receivables to conform to the current presentation.

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Inventories

6 Months Ended

Dec. 27, 2020

Inventory Disclosure [Abstract]

Inventories

6.  Inventories

Inventories consists of the following:

	December 27, 2020			June 28, 2020
Raw materials	$	42,636		$	42,758
Supplies		9,561			9,294
Work in process		6,432			6,267
Finished goods		57,061			55,609
Gross inventories		115,690			113,928
Net realizable value adjustment		(4,201	)		(4,224	)
Total inventories	$	111,489		$	109,704

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Other Current Assets

6 Months Ended

Dec. 27, 2020

Other Assets Current [Abstract]

Other Current Assets

7.  Other Current Assets

Other current assets consists of the following:

	December 27, 2020		June 28, 2020
Vendor deposits	$	4,947	$	2,349
Prepaid expenses		2,392		1,857
Value-added taxes receivable		2,044		2,604
Contract assets		899		4,953
Total other current assets	$	10,282	$	11,763

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Property, Plant and Equipment, Net

6 Months Ended

Dec. 27, 2020

Property Plant And Equipment [Abstract]

Property, Plant and Equipment, Net

8.  Property, Plant and Equipment, Net

Property, plant and equipment (“PP&E”), net consists of the following:

	December 27, 2020			June 28, 2020
Land	$	3,176		$	3,154
Land improvements		16,371			16,344
Buildings and improvements		159,458			158,025
Assets under finance leases		22,000			29,857
Machinery and equipment		611,024			602,867
Computers, software and office equipment		23,216			22,677
Transportation equipment		10,447			7,806
Construction in progress		8,216			7,582
Gross PP&E		853,908			848,312
Less: accumulated depreciation		(649,064	)		(636,221	)
Less: accumulated amortization – finance leases		(4,960	)		(7,845	)
Total PP&E, net	$	199,884		$	204,246

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Accrued Expenses

6 Months Ended

Dec. 27, 2020

Payables And Accruals [Abstract]

Accrued Expenses

9.  Accrued Expenses

Accrued expenses consists of the following:

	December 27, 2020		June 28, 2020
Payroll and fringe benefits	$	6,157	$	7,259
Incentive compensation		6,125		777
Deferred revenue		3,413		1,279
Severance		879		1,083
Other		3,757		3,291
Total accrued expenses	$	20,331	$	13,689

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Long-Term Debt

6 Months Ended

Dec. 27, 2020

Debt Disclosure [Abstract]

Long-Term Debt

10.  Long-Term Debt

Debt Obligations

The following table presents the total balances outstanding for UNIFI’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	December 27, 2020	December 27, 2020			June 28, 2020
ABL Revolver	December 2023	0.0%	$	—		$	—
ABL Term Loan (1)	December 2023	3.3%		82,500			87,500
Finance lease obligations	(2)	3.6%		10,396			11,381
Total debt				92,896			98,881
Current ABL Term Loan				(10,000	)		(10,000	)
Current portion of finance lease obligations				(3,683	)		(3,563	)
Unamortized debt issuance costs				(592	)		(711	)
Total long-term debt			$	78,621		$	84,607

(1) Includes the effects of interest rate swaps.

(2) Scheduled maturity dates for finance lease obligations range from May 2022 to November 2027.

On December 18, 2018, Unifi, Inc. and certain of its subsidiaries entered into a Third Amendment to Amended and Restated Credit Agreement and Second Amendment to Amended and Restated Guaranty and Security Agreement (the “2018 Amendment”).  The 2018 Amendment amended the

Amended and Restated Credit Agreement, dated as of March 26, 2015, by and among Unifi, Inc. and a syndicate of lenders, as previously amended (together with all previous and subsequent amendments, the “Credit Agreement”).  The Credit Agreement provides for a $200,000 senior secured credit facility (the “ABL Facility”), including 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”). The ABL Facility has a maturity date of December 18, 2023.

ABL Facility borrowings bear interest at LIBOR plus an applicable margin of 1.25% to 1.75%, or the Base Rate (as defined in the Credit Agreement) plus an applicable margin of 0.25% to 0.75%, with interest currently being paid on a monthly basis. As of December 27, 2020 and June 28, 2020, ABL Facility borrowings carried interest at LIBOR plus 1.50%.

UNIFI currently maintains three interest rate swaps that fix LIBOR at approximately 1.9% on $75,000 of variable-rate debt. Such swaps are scheduled to terminate in May 2022.

Scheduled Debt Maturities

The following table presents the scheduled maturities of UNIFI’s outstanding debt obligations for the remainder of fiscal 2021, the following four fiscal years and thereafter:

	Fiscal 2021		Fiscal 2022		Fiscal 2023		Fiscal 2024		Fiscal 2025		Thereafter
ABL Revolver	$	—	$	—	$	—	$	—	$	—	$	—
ABL Term Loan		5,000		10,000		10,000		57,500		—		—
Finance lease obligations		1,921		3,545		1,257		1,301		1,195		1,177
Total	$	6,921	$	13,545	$	11,257	$	58,801	$	1,195	$	1,177

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Other Long-Term Liabilities

6 Months Ended

Dec. 27, 2020

Other Liabilities Disclosure [Abstract]

Other Long-Term Liabilities

11.  Other Long-Term Liabilities

Other long-term liabilities consists of the following:

	December 27, 2020		June 28, 2020
Supplemental post-employment plan	$	3,022	$	3,019
Uncertain tax positions		2,778		1,112
Interest rate swaps		1,886		2,551
Other		3,324		1,924
Total other long-term liabilities	$	11,010	$	8,606

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Income Taxes

6 Months Ended

Dec. 27, 2020

Income Tax Disclosure [Abstract]

Income Taxes

12.  Income Taxes

The provision for income taxes and effective tax rate were as follows:

	For the Three Months Ended						For the Six Months Ended
	December 27, 2020			December 29, 2019			December 27, 2020			December 29, 2019
Provision for income taxes	$	5,112		$	507		$	3,933		$	1,228
Effective tax rate		40.6	%		55.3	%		26.5	%		23.0	%

U.S. Tax Law Change

On July 20, 2020, the U.S. Treasury issued and enacted final regulations related to global intangible low-tax income (“GILTI”) that allow certain U.S. taxpayers to elect to exclude foreign income that is subject to a high effective tax rate from their GILTI inclusions. The GILTI high-tax exclusion is an annual election and is retroactively available for tax years beginning after December 31, 2017. The three-month and six-month periods ended December 27, 2020 include discrete tax benefits of $359 and $5,148, respectively, related to the retroactive election.

Valuation Allowance

UNIFI regularly assesses whether it is more-likely-than-not that some portion or all of its deferred tax assets will not be realized.  UNIFI considers the scheduled reversal of taxable temporary differences, taxable income in carryback years, projected future taxable income and tax planning strategies in making this assessment.  Since UNIFI operates in multiple jurisdictions, the assessment is made on a jurisdiction-by-jurisdiction basis, taking into account the effects of local tax law.

As a result of the newly enacted GILTI regulations, and their impact on prior tax periods, UNIFI does not expect to realize the full benefit of its U.S. federal net operating loss and research credit carryforwards. The three-month and six-month periods ended December 27, 2020 include discrete tax expense of $26 and $2,153, respectively, related to the change in valuation allowance.

Income Tax Expense

UNIFI’s provision for income taxes for the six months ended December 27, 2020 and December 29, 2019 was calculated by applying an estimate of the annual effective tax rate for the full fiscal year to year-to-date income from ordinary activity.  Tax effects of significant and unusual, or infrequently occurring, items are excluded from the estimated annual effective tax rate calculation and recognized discretely in the interim period in which they occur.

The effective tax rate for the three months ended December 27, 2020 was higher than the U.S. federal statutory rate primarily due to current U.S. tax on GILTI. The effective tax rate for the six months ended December 27, 2020 was higher than the U.S. federal statutory rate primarily due to current U.S. tax on GILTI, the change in valuation allowance for deferred tax assets, and earnings taxed at higher rates in foreign jurisdictions. These rate impacts were partially offset by the retroactive GILTI high-tax exclusion for prior periods.

The effective tax rate for the three months ended December 29, 2019 was higher than the U.S. federal statutory rate primarily due to U.S. tax on GILTI, losses in tax jurisdictions for which no tax benefit could be recognized, foreign withholding taxes, and lower-than-expected income before income taxes. These rate impacts were partially offset by the use of foreign tax credits generated in both current and prior tax years. The effective tax rate for the six months ended December 29, 2019 was higher than the U.S. federal statutory rate primarily due to U.S. tax on GILTI, losses in tax jurisdictions for which no tax benefit could be recognized, and foreign withholding taxes. These rate impacts were partially offset by the use of foreign tax credits generated in both current and prior tax years.

Unrecognized Tax Benefits

The amount of unrecognized tax benefits for uncertain tax positions as of December 27, 2020 and June 28, 2020 was $2,855 and $1,218, respectively. Unrecognized benefits would generate a favorable impact of $1,893 on UNIFI’s effective tax rate when recognized. UNIFI does not expect material changes in unrecognized tax benefits within the next 12 months.

UNIFI regularly assesses the outcomes of both completed and ongoing examinations to ensure that its 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.

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Shareholders' Equity

6 Months Ended

Dec. 27, 2020

Stockholders Equity Note [Abstract]

Shareholders' Equity

13.  Shareholders’ Equity

On October 31, 2018, UNIFI announced that its Board of Directors (the “Board”) approved a new share repurchase program (the “2018 SRP”) under which UNIFI is authorized to acquire up to $50,000 of its common stock. Under the 2018 SRP, purchases may be made from time to time in the open market at prevailing market prices, through private transactions or block trades. The timing and amount of repurchases will depend on market conditions, share price, applicable legal requirements and other factors. The share repurchase authorization is discretionary and has no expiration date. Repurchases, if any, are expected to be financed through cash generated from operations and borrowings under the ABL Revolver, and are subject to applicable limitations and restrictions as set forth in the ABL Facility. UNIFI may discontinue repurchases at any time that management determines additional purchases are not beneficial or advisable.

The following table summarizes UNIFI’s repurchases and retirements of its common stock under the 2018 SRP for the fiscal periods noted:

	Total Number of Shares Repurchased as Part of Publicly Announced Plans or Programs		Average Price Paid per Share		Approximate Dollar Value that May Yet Be Repurchased Under Publicly Announced Plans or Programs
Fiscal 2019		—	$	—
Fiscal 2020		84	$	23.72
Fiscal 2021 (through December 27, 2020)		—	$	—
Total		84	$	23.72	$	48,008

Repurchased shares are retired and have the status of authorized and unissued shares.  The cost of the repurchased shares is recorded as a reduction to common stock to the extent of the par value of the shares acquired and the remainder is allocated between capital in excess of par value and retained earnings, on a pro rata basis.

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Stock-Based Compensation

6 Months Ended

Dec. 27, 2020

Disclosure Of Compensation Related Costs Sharebased Payments [Abstract]

Stock-Based Compensation

14.  Stock-Based Compensation

On October 24, 2018, the Unifi, Inc. Amended and Restated 2013 Incentive Compensation Plan (the “2018 Plan”) became effective, upon approval by shareholders at UNIFI’s annual meeting of shareholders held on October 31, 2018.  The 2018 Plan set the number of shares available for future issuance pursuant to awards granted under the 2018 Plan to 1,250 and updated certain provisions for changes to Section 162(m) of the Internal Revenue Code of 1986, as amended.

On October 29, 2020, UNIFI’s shareholders approved the Unifi, Inc. Second Amended and Restated 2013 Incentive Compensation Plan (the “2020 Plan”). The 2020 Plan set the number of shares available for future issuance pursuant to awards granted under the 2020 Plan to 850.  No additional awards can be granted under the 2018 Plan or other prior plans; however, awards outstanding under a respective prior plan remain subject to that plan’s provisions.

The following table provides information as of December 27, 2020 with respect to the number of securities remaining available for future issuance under the 2020 Plan:

Authorized under the 2020 Plan	850
Plus: Awards expired, forfeited or otherwise terminated unexercised	—
Less: Awards granted to employees	(75	)
Less: Awards granted to non-employee directors	—
Available for issuance under the 2020 Plan	775

Stock-based compensation units granted or issued from the 2018 Plan and/or 2020 Plan were as follows:

	For the Six Months Ended
	December 27, 2020		December 29, 2019
Stock options		155		83
Restricted stock units		110		77
Vested share units		—		24
Common stock		—		4

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Fair Value of Financial Instruments and Non-Financial Assets and Liabilities

6 Months Ended

Dec. 27, 2020

Fair Value Disclosures [Abstract]

Fair Value of Financial Instruments and Non-Financial Assets and Liabilities

15.  Fair Value of Financial Instruments and Non-Financial Assets and Liabilities

UNIFI uses 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.  UNIFI currently maintains three interest rate swaps that fix LIBOR at approximately 1.9% on $75,000 of variable-rate debt. UNIFI does not enter into derivative contracts for speculative purposes.

The following table presents details regarding UNIFI’s hedging activities:

	For the Three Months Ended						For the Six Months Ended
	December 27, 2020			December 29, 2019			December 27, 2020			December 29, 2019
Interest expense	$	833		$	1,101		$	1,704		$	2,358
(Increase) decrease in fair value of interest rate    swaps		(333	)		(289	)		(665	)		39
Impact of interest rate swaps to increase (decrease)    interest expense		335			15			664			(48	)

For the six months ended December 27, 2020 and December 29, 2019, there were no significant changes to UNIFI’s assets and liabilities measured at fair value, and there were no transfers into or out of the levels of the fair value hierarchy.

UNIFI believes that there have been no significant changes to its credit risk profile or the interest rates available to UNIFI for debt issuances with similar terms and average maturities, and UNIFI estimates that the fair values of its debt obligations approximate the carrying amounts.  Other financial instruments include cash and cash equivalents, receivables, accounts payable and accrued expenses.  The financial statement carrying amounts of these items approximate the fair values due to their short-term nature.

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Accumulated Other Comprehensive Loss

6 Months Ended

Dec. 27, 2020

Accumulated Other Comprehensive Income Loss Net Of Tax [Abstract]

Accumulated Other Comprehensive Loss

16.  Accumulated Other Comprehensive Loss

The components of and the changes in accumulated other comprehensive loss, net of tax, as applicable, consist of the following:

	Foreign Currency Translation Adjustments			Changes in Interest Rate Swaps			Accumulated Other Comprehensive Loss
Balance at June 28, 2020	$	(61,848	)	$	(1,958	)	$	(63,806	)
Other comprehensive income		5,730			509			6,239
Balance at December 27, 2020	$	(56,118	)	$	(1,449	)	$	(57,567	)

A summary of the after-tax effects of the components of other comprehensive income (loss), net for the three-month and six-month periods ended December 27, 2020 and December 29, 2019 is included in the accompanying condensed consolidated statements of comprehensive income.

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Earnings Per Share

6 Months Ended

Dec. 27, 2020

Earnings Per Share [Abstract]

Earnings Per Share

17.  Earnings Per Share

The components of the calculation of earnings per share (“EPS”) are as follows:

	For the Three Months Ended				For the Six Months Ended
	December 27, 2020		December 29, 2019		December 27, 2020		December 29, 2019
Net income	$	7,464	$	409	$	10,896	$	4,121
Basic weighted average shares		18,465		18,499		18,456		18,490
Net potential common share equivalents		267		273		273		255
Diluted weighted average shares		18,732		18,772		18,729		18,745
Excluded from the calculation of common share equivalents:
Anti-dilutive common share equivalents		706		362		747		373
Excluded from the calculation of diluted shares:
Unvested stock options that vest upon achievement   of certain market conditions		333		—		333		—

The calculation of EPS is based on the weighted average number of Unifi, Inc.’s common shares outstanding for the applicable period.  The calculation of diluted EPS 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.

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Investments in Unconsolidated Affiliates and Variable Interest Entities

6 Months Ended

Dec. 27, 2020

Equity Method Investments And Joint Ventures [Abstract]

Investments in Unconsolidated Affiliates and Variable Interest Entities

18.  Investments in Unconsolidated Affiliates and Variable Interest Entities

As of December 27, 2020, UNIFI maintained investments in two entities classified as unconsolidated affiliates: U.N.F. Industries, Ltd. (“UNF”); and UNF America LLC (“UNFA”) (collectively known as “UNFs”). UNIFI’s combined investment in UNFs was $2,532, reflected within other non-current assets in the accompanying condensed consolidated balance sheets.

Parkdale America, LLC

Parkdale America, LLC (“PAL”) is a limited liability company treated as a partnership for income tax reporting purposes and in which UNIFI held a 34% ownership interest (the “PAL Investment”) until UNIFI sold the investment on April 29, 2020. UNIFI accounted for the PAL Investment using the equity method of accounting and, because PAL was deemed a significant subsidiary in certain prior fiscal years, comparative prior year data is presented separately below.

U.N.F. Industries, Ltd.

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

UNF America LLC

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

In conjunction with the formation of UNFA, UNIFI entered into a supply agreement with UNF and UNFA whereby UNIFI agreed to purchase all of its first quality nylon POY requirements for texturing (subject to certain exceptions) from either UNF or UNFA.  The supply agreement has no stated minimum purchase quantities and pricing is negotiated every six months, based on market rates.  As of December 27, 2020, UNIFI’s open purchase orders related to this supply agreement were $1,545.

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

	For the Six Months Ended
	December 27, 2020		December 29, 2019
UNFA	$	8,005	$	8,582
UNF		207		1,209
Total	$	8,212	$	9,791

As of December 27, 2020 and June 28, 2020, UNIFI had combined accounts payable due to UNF and UNFA of $3,123 and $1,166, respectively.

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

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

	As of December 27, 2020						As of June 28, 2020
	PAL		UNFs		Total		PAL		UNFs		Total
Current assets	$	—	$	7,499	$	7,499	$	—	$	5,190	$	5,190
Non-current assets		—		731		731		—		561		561
Current liabilities		—		3,166		3,166		—		1,415		1,415
Non-current liabilities		—		—		—		—		—		—
Shareholders’ equity and capital    accounts		—		5,064		5,064		—		4,336		4,336
UNIFI’s portion of undistributed    earnings		—		2,041		2,041		—		1,424		1,424

	For the Three Months Ended December 27, 2020						For the Three Months Ended December 29, 2019
	PAL		UNFs		Total		PAL			UNFs		Total
Net sales	$	—	$	4,651	$	4,651	$	161,648		$	5,475	$	167,123
Gross profit (loss)		—		1,092		1,092		(186	)		812		626
Income (loss) from operations		—		673		673		(5,026	)		377		(4,649	)
Net income (loss)		—		674		674		(2,463	)		383		(2,080	)
Depreciation and amortization		—		42		42		11,393			43		11,436
Cash received by PAL under    cotton rebate program		—		—		—		3,463			—		3,463
Earnings recognized by PAL for    cotton rebate program		—		—		—		2,766			—		2,766
Distributions received		—		—		—		—			—		—

	For the Six Months Ended December 27, 2020						For the Six Months Ended December 29, 2019
	PAL		UNFs		Total		PAL			UNFs		Total
Net sales	$	—	$	7,864	$	7,864	$	360,815		$	10,136	$	370,951
Gross profit		—		1,533		1,533		885			1,353		2,238
Income (loss) from operations		—		719		719		(8,301	)		489		(7,812	)
Net income (loss)		—		723		723		(5,918	)		507		(5,411	)
Depreciation and amortization		—		78		78		22,024			90		22,114
Cash received by PAL under    cotton rebate program		—		—		—		7,156			—		7,156
Earnings recognized by PAL for    cotton rebate program		—		—		—		6,354			—		6,354
Distributions received		—		—		—		10,437			—		10,437

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Commitments and Contingencies

6 Months Ended

Dec. 27, 2020

Commitments And Contingencies Disclosure [Abstract]

Commitments and Contingencies

19.  Commitments and Contingencies

Collective Bargaining Agreements

While employees of UNIFI’s Brazilian operations are unionized, none of the labor force employed by UNIFI’s domestic or other foreign subsidiaries is currently covered by a collective bargaining agreement.

Environmental

On September 30, 2004, Unifi Kinston, LLC (“UK”), a subsidiary of Unifi, Inc., 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 (the “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 and the North Carolina Department of Environmental Quality (“DEQ”) pursuant to the Resource Conservation and Recovery Act Corrective Action program.  The program requires DuPont to identify all potential areas of environmental concern (“AOCs”), assess the extent of containment at the identified AOCs and remediate the AOCs to comply with applicable regulatory standards.  Effective

March 20, 2008, UK 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 UK of any future responsibility for environmental remediation, other than participation with DuPont, if so called upon, with regard to UK’s period of operation of the Kinston site, which was from 2004 to 2008.  At this time, UNIFI 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.

UK continues to own property (the “Kentec site”) acquired in the 2004 transaction with INVISTA that has contamination from DuPont’s prior operations and is monitored by DEQ.  The Kentec site has been remediated by DuPont, and DuPont has received authority from DEQ to discontinue further remediation, other than natural attenuation.  Prior to transfer of responsibility to UK, DuPont and UK had a duty to monitor and report the environmental status of the Kentec site to DEQ.

Effective April 10, 2019, UK assumed sole remediator responsibility of the Kentec site pursuant to its contractual obligations with INVISTA and received $180 of net monitoring and reporting costs due from DuPont.  In connection with monitoring, UK expects to sample and report to DEQ annually. UNIFI expects minimal active site remediation may be required, but has no basis to determine any costs that may be associated with active remediation.

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Related Party Transactions

6 Months Ended

Dec. 27, 2020

Related Party Transactions [Abstract]

Related Party Transactions

20.  Related Party Transactions

There were no related party receivables as of December 27, 2020 or June 28, 2020.

Related party payables for Salem Leasing Corporation consisted of the following:

	December 27, 2020		June 28, 2020
Accounts payable	$	672	$	616
Operating lease obligations		1,337		1,481
Finance lease obligations		6,835		6,509
Total related party payables	$	8,844	$	8,606

The following are the Company’s significant related party transactions:

		For the Three Months Ended				For the Six Months Ended
Affiliated Entity	Transaction Type	December 27, 2020		December 29, 2019		December 27, 2020		December 29, 2019
Salem Leasing Corporation	Payments for transportation equipment costs and finance lease debt service	$	924	$	1,108	$	1,863	$	2,116

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Business Segment Information

6 Months Ended

Dec. 27, 2020

Segment Reporting [Abstract]

Business Segment Information

21.  Business Segment Information

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

UNIFI’s operating segments are aggregated into four reportable segments (the Polyester Segment, the Asia Segment, the Brazil Segment and the Nylon Segment) based on similarities between the operating segments’ economic characteristics, nature of products sold, type of customer, methods of distribution and regulatory environment.

• The operations within the Polyester Segment exhibit similar long-term economic characteristics and primarily sell into an economic trading zone covered by the United States-Mexico-Canada Agreement (“USMCA”), North American Free Trade Agreement (“NAFTA”) and Dominican Republic—Central America Free Trade Agreement (“CAFTA-DR”) (collectively, the regions comprising these economic trading zones are referred to as “NACA”) to similar customers utilizing similar methods of distribution. These operations derive revenues primarily from manufacturing polyester-based products with sales primarily to other yarn manufacturers and knitters and weavers that produce yarn and/or fabric for the apparel, hosiery, automotive, home furnishings, automotive, industrial and other end-use markets. The Polyester Segment consists of sales and manufacturing operations in the U.S. and El Salvador.

• The operations within the Asia Segment exhibit similar long-term economic characteristics and sell to similar customers utilizing similar methods of distribution primarily in Asia and Europe, which are outside of the NACA region. The Asia Segment primarily sources polyester-based products from third-party suppliers and sells to knitters and weavers that produce fabric for the apparel, automotive, home furnishings, automotive, industrial and other end-use markets principally in Asia.  The Asia Segment includes a sales office in China.

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

• The operations within the Nylon Segment exhibit similar long-term economic characteristics and primarily sell into the NACA region to similar customers utilizing similar methods of distribution. These operations derive revenues primarily from manufacturing nylon-based products with sales to knitters and weavers that produce fabric primarily for the apparel, hosiery and medical markets.  The Nylon Segment includes an immaterial operating segment in Colombia that sells similar nylon-based textile products to similar customers in Colombia and

Mexico utilizing similar methods of distribution.  The Nylon Segment consists of sales and manufacturing operations in the U.S. and Colombia.

In addition to UNIFI’s reportable segments, an All Other category is included in the tables below. All Other consists primarily of for-hire transportation services. For-hire transportation services revenue is derived from performing common carrier services utilizing UNIFI’s fleet of transportation equipment.

The operations within All Other (i) are not subject to review by the CODM at a level consistent with UNIFI’s other operations, (ii) are not regularly evaluated using the same metrics applied to UNIFI’s other operations and (iii) do not qualify for aggregation with an existing reportable segment. Therefore, such operations are excluded from reportable segments.

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

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

Selected financial information is presented below:

	For the Three Months Ended December 27, 2020
	Polyester		Asia		Brazil		Nylon		All Other		Total
Net sales	$	76,696	$	44,692	$	24,253	$	16,008	$	1,127	$	162,776
Cost of sales		65,801		38,164		16,276		15,613		988		136,842
Gross profit		10,895		6,528		7,977		395		139		25,934
Segment depreciation expense		4,470		—		321		438		164		5,393
Segment Profit	$	15,365	$	6,528	$	8,298	$	833	$	303	$	31,327

	For the Three Months Ended December 29, 2019
	Polyester		Asia		Brazil		Nylon		All Other		Total
Net sales	$	82,750	$	47,918	$	20,862	$	17,084	$	897	$	169,511
Cost of sales		76,090		42,401		17,432		17,038		885		153,846
Gross profit		6,660		5,517		3,430		46		12		15,665
Segment depreciation expense		4,183		—		357		503		124		5,167
Segment Profit	$	10,843	$	5,517	$	3,787	$	549	$	136	$	20,832

	For the Six Months Ended December 27, 2020
	Polyester		Asia		Brazil		Nylon		All Other		Total
Net sales	$	145,772	$	82,415	$	46,859	$	27,037	$	2,198	$	304,281
Cost of sales		130,245		71,309		34,269		25,977		1,986		263,786
Gross profit		15,527		11,106		12,590		1,060		212		40,495
Segment depreciation expense		8,873		—		751		880		328		10,832
Segment Profit	$	24,400	$	11,106	$	13,341	$	1,940	$	540	$	51,327

	For the Six Months Ended December 29, 2019
	Polyester		Asia		Brazil		Nylon		All Other		Total
Net sales	$	171,445	$	93,875	$	45,034	$	37,286	$	1,820	$	349,460
Cost of sales		156,990		84,076		37,445		36,062		1,779		316,352
Gross profit		14,455		9,799		7,589		1,224		41		33,108
Segment depreciation expense		8,224		—		732		994		163		10,113
Segment Profit	$	22,679	$	9,799	$	8,321	$	2,218	$	204	$	43,221

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

	For the Three Months Ended						For the Six Months Ended
	December 27, 2020			December 29, 2019			December 27, 2020			December 29, 2019
Polyester	$	10,895		$	6,660		$	15,527		$	14,455
Asia		6,528			5,517			11,106			9,799
Brazil		7,977			3,430			12,590			7,589
Nylon		395			46			1,060			1,224
All Other		139			12			212			41
Segment gross profit		25,934			15,665			40,495			33,108
Selling, general and administrative expenses		12,625			12,508			23,989			23,488
Benefit for bad debts		(259	)		(258	)		(1,146	)		(249	)
Other operating expense, net		476			854			1,654			962
Operating income		13,092			2,561			15,998			8,907
Interest income		(187	)		(212	)		(312	)		(422	)
Interest expense		833			1,101			1,704			2,358
Equity in (earnings) loss of unconsolidated affiliates		(130	)		756			(223	)		1,622
Income before income taxes	$	12,576		$	916		$	14,829		$	5,349

The reconciliations of segment total assets to consolidated total assets are as follows:

	December 27, 2020		June 28, 2020
Polyester	$	261,769	$	263,496
Asia		54,661		41,452
Brazil		60,006		49,967
Nylon		39,682		42,020
Segment total assets		416,118		396,935
Other current assets		68,900		48,600
Other PP&E		22,687		23,676
Other operating lease assets		1,308		1,503
Other non-current assets		3,985		3,448
Total assets	$	512,998	$	474,162

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Supplemental Cash Flow Information

6 Months Ended

Dec. 27, 2020

Additional Cash Flow Elements And Supplemental Cash Flow Information [Abstract]

Supplemental Cash Flow Information

22.  Supplemental Cash Flow Information

Cash payments for interest and taxes consist of the following: 

	For the Six Months Ended
	December 27, 2020		December 29, 2019
Interest, net of capitalized interest of $92 and $56, respectively	$	1,610	$	2,357
Income tax payments, net		3,923		3,429

Cash payments for taxes shown above consist primarily of income and withholding tax payments made by UNIFI in both U.S. and foreign jurisdictions, net of refunds.

Non-Cash Investing and Financing Activities

As of December 27, 2020 and June 28, 2020, $697 and $630, respectively, were included in accounts payable for unpaid capital expenditures. As of December 29, 2019 and June 30, 2019, $1,127 and $1,329, respectively, were included in accounts payable for unpaid capital expenditures.

During the six months ended December 27, 2020 and December 29, 2019, UNIFI recorded non-cash activity relating to finance leases of $740 and $6,301, respectively.

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Basis of Presentation; Condensed Notes (Policies)	6 Months Ended
	Dec. 27, 2020
Accounting Policies [Abstract]
Fiscal Period	The fiscal quarter for each of Unifi, Inc., its primary domestic operating subsidiaries and its subsidiary in El Salvador ended on December 27, 2020. Unifi, Inc.’s remaining material operating subsidiaries’ fiscal quarter ended on December 31, 2020. There were no significant transactions or events that occurred between Unifi, Inc.’s fiscal quarter end and such wholly owned subsidiaries’ subsequent fiscal quarter end. The three-month periods ended December 27, 2020 and December 29, 2019 both consisted of 13 weeks. The six-month periods ended December 27, 2020 and December 29, 2019 both consisted of 26 weeks.

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Revenue Recognition (Tables)

6 Months Ended

Dec. 27, 2020

Revenue From Contract With Customer [Abstract]

Disaggregated Revenues for UNIFI

The following tables present disaggregated revenues for UNIFI:

	For the Three Months Ended				For the Six Months Ended
	December 27, 2020		December 29, 2019		December 27, 2020		December 29, 2019
Third-party manufacturer	$	160,146	$	167,537	$	298,987	$	345,557
Service		2,630		1,974		5,294		3,903
Net sales	$	162,776	$	169,511	$	304,281	$	349,460

	For the Three Months Ended				For the Six Months Ended
	December 27, 2020		December 29, 2019		December 27, 2020		December 29, 2019
REPREVE® Fiber	$	60,660	$	56,893	$	110,518	$	113,378
Non-REPREVE® Fiber		102,116		112,618		193,763		236,082
Total	$	162,776	$	169,511	$	304,281	$	349,460

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Receivables, Net (Tables)

6 Months Ended

Dec. 27, 2020

Receivables [Abstract]

Schedule of Accounts, Notes, Loans and Financing Receivable

Receivables, net consists of the following:

	December 27, 2020			June 28, 2020
Customer receivables	$	69,796		$	53,307
Allowance for uncollectible accounts		(2,675	)		(3,796	)
Reserves for quality claims		(822	)		(928	)
Net customer receivables		66,299			48,583
Other receivables		16,825			5,143
Total receivables, net	$	83,124		$	53,726

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Inventories (Tables)

6 Months Ended

Dec. 27, 2020

Inventory Disclosure [Abstract]

Inventories Components

Inventories consists of the following:

	December 27, 2020			June 28, 2020
Raw materials	$	42,636		$	42,758
Supplies		9,561			9,294
Work in process		6,432			6,267
Finished goods		57,061			55,609
Gross inventories		115,690			113,928
Net realizable value adjustment		(4,201	)		(4,224	)
Total inventories	$	111,489		$	109,704

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Other Current Assets (Tables)

6 Months Ended

Dec. 27, 2020

Other Assets Current [Abstract]

Schedule of Other Current Assets

Other current assets consists of the following:

	December 27, 2020		June 28, 2020
Vendor deposits	$	4,947	$	2,349
Prepaid expenses		2,392		1,857
Value-added taxes receivable		2,044		2,604
Contract assets		899		4,953
Total other current assets	$	10,282	$	11,763

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Property, Plant and Equipment, Net (Tables)

6 Months Ended

Dec. 27, 2020

Property Plant And Equipment [Abstract]

Property, Plant and Equipment Components

Property, plant and equipment (“PP&E”), net consists of the following:

	December 27, 2020			June 28, 2020
Land	$	3,176		$	3,154
Land improvements		16,371			16,344
Buildings and improvements		159,458			158,025
Assets under finance leases		22,000			29,857
Machinery and equipment		611,024			602,867
Computers, software and office equipment		23,216			22,677
Transportation equipment		10,447			7,806
Construction in progress		8,216			7,582
Gross PP&E		853,908			848,312
Less: accumulated depreciation		(649,064	)		(636,221	)
Less: accumulated amortization – finance leases		(4,960	)		(7,845	)
Total PP&E, net	$	199,884		$	204,246

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Accrued Expenses (Tables)

6 Months Ended

Dec. 27, 2020

Payables And Accruals [Abstract]

Schedule of Accrued Liabilities

Accrued expenses consists of the following:

	December 27, 2020		June 28, 2020
Payroll and fringe benefits	$	6,157	$	7,259
Incentive compensation		6,125		777
Deferred revenue		3,413		1,279
Severance		879		1,083
Other		3,757		3,291
Total accrued expenses	$	20,331	$	13,689

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Long-Term Debt (Tables)

6 Months Ended

Dec. 27, 2020

Debt Disclosure [Abstract]

Long-Term Debt Components

The following table presents the total balances outstanding for UNIFI’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	December 27, 2020	December 27, 2020			June 28, 2020
ABL Revolver	December 2023	0.0%	$	—		$	—
ABL Term Loan (1)	December 2023	3.3%		82,500			87,500
Finance lease obligations	(2)	3.6%		10,396			11,381
Total debt				92,896			98,881
Current ABL Term Loan				(10,000	)		(10,000	)
Current portion of finance lease obligations				(3,683	)		(3,563	)
Unamortized debt issuance costs				(592	)		(711	)
Total long-term debt			$	78,621		$	84,607

(1) Includes the effects of interest rate swaps.

(2) Scheduled maturity dates for finance lease obligations range from May 2022 to November 2027.

Scheduled Maturities of Outstanding Debt Obligations

The following table presents the scheduled maturities of UNIFI’s outstanding debt obligations for the remainder of fiscal 2021, the following four fiscal years and thereafter:

	Fiscal 2021		Fiscal 2022		Fiscal 2023		Fiscal 2024		Fiscal 2025		Thereafter
ABL Revolver	$	—	$	—	$	—	$	—	$	—	$	—
ABL Term Loan		5,000		10,000		10,000		57,500		—		—
Finance lease obligations		1,921		3,545		1,257		1,301		1,195		1,177
Total	$	6,921	$	13,545	$	11,257	$	58,801	$	1,195	$	1,177

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Other Long-Term Liabilities (Tables)

6 Months Ended

Dec. 27, 2020

Other Liabilities Disclosure [Abstract]

Other Long-Term Liabilities Components

Other long-term liabilities consists of the following:

	December 27, 2020		June 28, 2020
Supplemental post-employment plan	$	3,022	$	3,019
Uncertain tax positions		2,778		1,112
Interest rate swaps		1,886		2,551
Other		3,324		1,924
Total other long-term liabilities	$	11,010	$	8,606

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Income Taxes (Tables)

6 Months Ended

Dec. 27, 2020

Income Tax Disclosure [Abstract]

Schedule of Provision for Income Taxes and Effective Tax Rate

The provision for income taxes and effective tax rate were as follows:

	For the Three Months Ended						For the Six Months Ended
	December 27, 2020			December 29, 2019			December 27, 2020			December 29, 2019
Provision for income taxes	$	5,112		$	507		$	3,933		$	1,228
Effective tax rate		40.6	%		55.3	%		26.5	%		23.0	%

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Shareholders' Equity (Tables)

6 Months Ended

Dec. 27, 2020

Stockholders Equity Note [Abstract]

Repurchases and Retirements of Common Stock

The following table summarizes UNIFI’s repurchases and retirements of its common stock under the 2018 SRP for the fiscal periods noted:

	Total Number of Shares Repurchased as Part of Publicly Announced Plans or Programs		Average Price Paid per Share		Approximate Dollar Value that May Yet Be Repurchased Under Publicly Announced Plans or Programs
Fiscal 2019		—	$	—
Fiscal 2020		84	$	23.72
Fiscal 2021 (through December 27, 2020)		—	$	—
Total		84	$	23.72	$	48,008

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Stock-Based Compensation (Tables)

6 Months Ended

Dec. 27, 2020

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 December 27, 2020 with respect to the number of securities remaining available for future issuance under the 2020 Plan:

Authorized under the 2020 Plan	850
Plus: Awards expired, forfeited or otherwise terminated unexercised	—
Less: Awards granted to employees	(75	)
Less: Awards granted to non-employee directors	—
Available for issuance under the 2020 Plan	775

Summary of Stock-based Compensation Granted or Issued

Stock-based compensation units granted or issued from the 2018 Plan and/or 2020 Plan were as follows:

	For the Six Months Ended
	December 27, 2020		December 29, 2019
Stock options		155		83
Restricted stock units		110		77
Vested share units		—		24
Common stock		—		4

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Fair Value of Financial Instruments and Non-Financial Assets and Liabilities (Tables)

6 Months Ended

Dec. 27, 2020

Fair Value Disclosures [Abstract]

Schedule of Hedging Activities

The following table presents details regarding UNIFI’s hedging activities:

	For the Three Months Ended						For the Six Months Ended
	December 27, 2020			December 29, 2019			December 27, 2020			December 29, 2019
Interest expense	$	833		$	1,101		$	1,704		$	2,358
(Increase) decrease in fair value of interest rate    swaps		(333	)		(289	)		(665	)		39
Impact of interest rate swaps to increase (decrease)    interest expense		335			15			664			(48	)

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Accumulated Other Comprehensive Loss (Tables)

6 Months Ended

Dec. 27, 2020

Accumulated Other Comprehensive Income Loss Net Of Tax [Abstract]

Schedule of Changes in Accumulated Other Comprehensive Loss, Net of Tax

The components of and the changes in accumulated other comprehensive loss, net of tax, as applicable, consist of the following:

	Foreign Currency Translation Adjustments			Changes in Interest Rate Swaps			Accumulated Other Comprehensive Loss
Balance at June 28, 2020	$	(61,848	)	$	(1,958	)	$	(63,806	)
Other comprehensive income		5,730			509			6,239
Balance at December 27, 2020	$	(56,118	)	$	(1,449	)	$	(57,567	)

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Earnings Per Share (Tables)

6 Months Ended

Dec. 27, 2020

Earnings Per Share [Abstract]

Computation of Basic and Diluted Earnings (Loss) Per Share

The components of the calculation of earnings per share (“EPS”) are as follows:

	For the Three Months Ended				For the Six Months Ended
	December 27, 2020		December 29, 2019		December 27, 2020		December 29, 2019
Net income	$	7,464	$	409	$	10,896	$	4,121
Basic weighted average shares		18,465		18,499		18,456		18,490
Net potential common share equivalents		267		273		273		255
Diluted weighted average shares		18,732		18,772		18,729		18,745
Excluded from the calculation of common share equivalents:
Anti-dilutive common share equivalents		706		362		747		373
Excluded from the calculation of diluted shares:
Unvested stock options that vest upon achievement   of certain market conditions		333		—		333		—

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Investments in Unconsolidated Affiliates and Variable Interest Entities (Tables)

6 Months Ended

Dec. 27, 2020

Schedule Of Equity Method Investments [Line Items]

Schedule of Raw Material Purchases under Supply Agreement

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

	For the Six Months Ended
	December 27, 2020		December 29, 2019
UNFA	$	8,005	$	8,582
UNF		207		1,209
Total	$	8,212	$	9,791

Schedule of Unaudited, Condensed Balance Sheet Information for Unconsolidated Affiliates

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

	As of December 27, 2020						As of June 28, 2020
	PAL		UNFs		Total		PAL		UNFs		Total
Current assets	$	—	$	7,499	$	7,499	$	—	$	5,190	$	5,190
Non-current assets		—		731		731		—		561		561
Current liabilities		—		3,166		3,166		—		1,415		1,415
Non-current liabilities		—		—		—		—		—		—
Shareholders’ equity and capital    accounts		—		5,064		5,064		—		4,336		4,336
UNIFI’s portion of undistributed    earnings		—		2,041		2,041		—		1,424		1,424

Income Statement Information [Member]

Schedule Of Equity Method Investments [Line Items]

Schedule of Unaudited, Condensed Income Statement Information for Unconsolidated Affiliates

	For the Three Months Ended December 27, 2020						For the Three Months Ended December 29, 2019
	PAL		UNFs		Total		PAL			UNFs		Total
Net sales	$	—	$	4,651	$	4,651	$	161,648		$	5,475	$	167,123
Gross profit (loss)		—		1,092		1,092		(186	)		812		626
Income (loss) from operations		—		673		673		(5,026	)		377		(4,649	)
Net income (loss)		—		674		674		(2,463	)		383		(2,080	)
Depreciation and amortization		—		42		42		11,393			43		11,436
Cash received by PAL under    cotton rebate program		—		—		—		3,463			—		3,463
Earnings recognized by PAL for    cotton rebate program		—		—		—		2,766			—		2,766
Distributions received		—		—		—		—			—		—

	For the Six Months Ended December 27, 2020						For the Six Months Ended December 29, 2019
	PAL		UNFs		Total		PAL			UNFs		Total
Net sales	$	—	$	7,864	$	7,864	$	360,815		$	10,136	$	370,951
Gross profit		—		1,533		1,533		885			1,353		2,238
Income (loss) from operations		—		719		719		(8,301	)		489		(7,812	)
Net income (loss)		—		723		723		(5,918	)		507		(5,411	)
Depreciation and amortization		—		78		78		22,024			90		22,114
Cash received by PAL under    cotton rebate program		—		—		—		7,156			—		7,156
Earnings recognized by PAL for    cotton rebate program		—		—		—		6,354			—		6,354
Distributions received		—		—		—		10,437			—		10,437

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Related Party Transactions (Tables)

6 Months Ended

Dec. 27, 2020

Related Party Transactions [Abstract]

Related Party Payables

Related party payables for Salem Leasing Corporation consisted of the following:

	December 27, 2020		June 28, 2020
Accounts payable	$	672	$	616
Operating lease obligations		1,337		1,481
Finance lease obligations		6,835		6,509
Total related party payables	$	8,844	$	8,606

Schedule of Related Party Transactions

The following are the Company’s significant related party transactions:

		For the Three Months Ended				For the Six Months Ended
Affiliated Entity	Transaction Type	December 27, 2020		December 29, 2019		December 27, 2020		December 29, 2019
Salem Leasing Corporation	Payments for transportation equipment costs and finance lease debt service	$	924	$	1,108	$	1,863	$	2,116

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Business Segment Information (Tables)

6 Months Ended

Dec. 27, 2020

Segment Reporting [Abstract]

Selected Financial Information for Polyester, Nylon, International and Other Segments

Selected financial information is presented below:

	For the Three Months Ended December 27, 2020
	Polyester		Asia		Brazil		Nylon		All Other		Total
Net sales	$	76,696	$	44,692	$	24,253	$	16,008	$	1,127	$	162,776
Cost of sales		65,801		38,164		16,276		15,613		988		136,842
Gross profit		10,895		6,528		7,977		395		139		25,934
Segment depreciation expense		4,470		—		321		438		164		5,393
Segment Profit	$	15,365	$	6,528	$	8,298	$	833	$	303	$	31,327

	For the Three Months Ended December 29, 2019
	Polyester		Asia		Brazil		Nylon		All Other		Total
Net sales	$	82,750	$	47,918	$	20,862	$	17,084	$	897	$	169,511
Cost of sales		76,090		42,401		17,432		17,038		885		153,846
Gross profit		6,660		5,517		3,430		46		12		15,665
Segment depreciation expense		4,183		—		357		503		124		5,167
Segment Profit	$	10,843	$	5,517	$	3,787	$	549	$	136	$	20,832

	For the Six Months Ended December 27, 2020
	Polyester		Asia		Brazil		Nylon		All Other		Total
Net sales	$	145,772	$	82,415	$	46,859	$	27,037	$	2,198	$	304,281
Cost of sales		130,245		71,309		34,269		25,977		1,986		263,786
Gross profit		15,527		11,106		12,590		1,060		212		40,495
Segment depreciation expense		8,873		—		751		880		328		10,832
Segment Profit	$	24,400	$	11,106	$	13,341	$	1,940	$	540	$	51,327

	For the Six Months Ended December 29, 2019
	Polyester		Asia		Brazil		Nylon		All Other		Total
Net sales	$	171,445	$	93,875	$	45,034	$	37,286	$	1,820	$	349,460
Cost of sales		156,990		84,076		37,445		36,062		1,779		316,352
Gross profit		14,455		9,799		7,589		1,224		41		33,108
Segment depreciation expense		8,224		—		732		994		163		10,113
Segment Profit	$	22,679	$	9,799	$	8,321	$	2,218	$	204	$	43,221

Reconciliations of Segment Gross Profit to Consolidated Income Before Income Taxes

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

	For the Three Months Ended						For the Six Months Ended
	December 27, 2020			December 29, 2019			December 27, 2020			December 29, 2019
Polyester	$	10,895		$	6,660		$	15,527		$	14,455
Asia		6,528			5,517			11,106			9,799
Brazil		7,977			3,430			12,590			7,589
Nylon		395			46			1,060			1,224
All Other		139			12			212			41
Segment gross profit		25,934			15,665			40,495			33,108
Selling, general and administrative expenses		12,625			12,508			23,989			23,488
Benefit for bad debts		(259	)		(258	)		(1,146	)		(249	)
Other operating expense, net		476			854			1,654			962
Operating income		13,092			2,561			15,998			8,907
Interest income		(187	)		(212	)		(312	)		(422	)
Interest expense		833			1,101			1,704			2,358
Equity in (earnings) loss of unconsolidated affiliates		(130	)		756			(223	)		1,622
Income before income taxes	$	12,576		$	916		$	14,829		$	5,349

Reconciliation of Segment Total Assets to Consolidated Total Assets

The reconciliations of segment total assets to consolidated total assets are as follows:

	December 27, 2020		June 28, 2020
Polyester	$	261,769	$	263,496
Asia		54,661		41,452
Brazil		60,006		49,967
Nylon		39,682		42,020
Segment total assets		416,118		396,935
Other current assets		68,900		48,600
Other PP&E		22,687		23,676
Other operating lease assets		1,308		1,503
Other non-current assets		3,985		3,448
Total assets	$	512,998	$	474,162

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Supplemental Cash Flow Information (Tables)

6 Months Ended

Dec. 27, 2020

Supplemental Cash Flow Information [Abstract]

Schedule of Cash Payments for Interest and Taxes

Cash payments for interest and taxes consist of the following: 

	For the Six Months Ended
	December 27, 2020		December 29, 2019
Interest, net of capitalized interest of $92 and $56, respectively	$	1,610	$	2,357
Income tax payments, net		3,923		3,429

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Background - Additional Information (Details)	Dec. 27, 2020 Entity
Organization Consolidation And Presentation Of Financial Statements [Abstract]
Number of countries in which entity operates	4

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Revenue Recognition - Disaggregated Revenues for UNIFI (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Dec. 27, 2020	Dec. 29, 2019	Dec. 27, 2020	Dec. 29, 2019
Disaggregation Of Revenue [Line Items]
Net sales	$ 162,776	$ 169,511	$ 304,281	$ 349,460
Third-Party Manufacturer [Member]
Disaggregation Of Revenue [Line Items]
Net sales	160,146	167,537	298,987	345,557
Service [Member]
Disaggregation Of Revenue [Line Items]
Net sales	2,630	1,974	5,294	3,903
REPREVE Fiber [Member]
Disaggregation Of Revenue [Line Items]
Net sales	60,660	56,893	110,518	113,378
Non-REPREVE Fiber [Member]
Disaggregation Of Revenue [Line Items]
Net sales	$ 102,116	$ 112,618	$ 193,763	$ 236,082

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Receivables, Net - Schedule of Accounts, Notes, Loans and Financing Receivable (Details) - USD ($) $ in Thousands	Dec. 27, 2020	Jun. 28, 2020
Receivables [Abstract]
Customer receivables	$ 69,796	$ 53,307
Allowance for uncollectible accounts	(2,675)	(3,796)
Reserves for quality claims	(822)	(928)
Net customer receivables	66,299	48,583
Other receivables	16,825	5,143
Total receivables, net	$ 83,124	$ 53,726

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Receivables, Net - Additional Information (Details) - USD ($) $ in Thousands	Dec. 27, 2020	Jun. 28, 2020
Accounts Notes And Loans Receivable [Line Items]
Other receivables	$ 16,825	$ 5,143
Asia [Member] | Banker?s Acceptance Notes [Member]
Accounts Notes And Loans Receivable [Line Items]
Other receivables	$ 14,532	$ 1,596

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Inventories - Inventories Components (Details) - USD ($) $ in Thousands	Dec. 27, 2020	Jun. 28, 2020
Inventory Disclosure [Abstract]
Raw materials	$ 42,636	$ 42,758
Supplies	9,561	9,294
Work in process	6,432	6,267
Finished goods	57,061	55,609
Gross inventories	115,690	113,928
Net realizable value adjustment	(4,201)	(4,224)
Total inventories	$ 111,489	$ 109,704

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Other Current Assets - Schedule of Other Current Assets (Details) - USD ($) $ in Thousands	Dec. 27, 2020	Jun. 28, 2020
Other Assets Current [Abstract]
Vendor deposits	$ 4,947	$ 2,349
Prepaid expenses	2,392	1,857
Value-added taxes receivable	2,044	2,604
Contract assets	899	4,953
Total other current assets	$ 10,282	$ 11,763

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Property, Plant and Equipment, Net - Property, Plant and Equipment Components (Details) - USD ($) $ in Thousands	Dec. 27, 2020	Jun. 28, 2020
Property Plant And Equipment [Line Items]
Gross PP&E	$ 853,908	$ 848,312
Less: accumulated depreciation	(649,064)	(636,221)
Less: accumulated amortization – finance leases	(4,960)	(7,845)
Total PP&E, net	199,884	204,246
Land [Member]
Property Plant And Equipment [Line Items]
Gross PP&E	3,176	3,154
Land Improvements [Member]
Property Plant And Equipment [Line Items]
Gross PP&E	16,371	16,344
Buildings and Improvements [Member]
Property Plant And Equipment [Line Items]
Gross PP&E	159,458	158,025
Assets under Finance Leases [Member]
Property Plant And Equipment [Line Items]
Gross PP&E	22,000	29,857
Machinery and Equipment [Member]
Property Plant And Equipment [Line Items]
Gross PP&E	611,024	602,867
Computers, Software and Office Equipment [Member]
Property Plant And Equipment [Line Items]
Gross PP&E	23,216	22,677
Transportation Equipment [Member]
Property Plant And Equipment [Line Items]
Gross PP&E	10,447	7,806
Construction in Progress [Member]
Property Plant And Equipment [Line Items]
Gross PP&E	$ 8,216	$ 7,582

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Accrued Expenses - Schedule of Accrued Liabilities (Details) - USD ($) $ in Thousands	Dec. 27, 2020	Jun. 28, 2020
Payables And Accruals [Abstract]
Payroll and fringe benefits	$ 6,157	$ 7,259
Incentive compensation	6,125	777
Deferred revenue	3,413	1,279
Severance	879	1,083
Other	3,757	3,291
Total accrued expenses	$ 20,331	$ 13,689

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Long-Term Debt - Long-Term Debt Components (Details) - USD ($) $ in Thousands		6 Months Ended
		Dec. 27, 2020	Jun. 28, 2020
Debt Instrument [Line Items]
Finance lease obligations		$ 10,396	$ 11,381
Total debt		92,896	98,881
Current portion of finance lease obligations		(3,683)	(3,563)
Unamortized debt issuance costs		(592)	(711)
Total long-term debt		$ 78,621	84,607
Finance Lease Obligations [Member]
Debt Instrument [Line Items]
Debt Instrument, Interest Rate, Effective Percentage		3.60%
ABL Revolver [Member]
Debt Instrument [Line Items]
Debt Instrument, Maturity Date		2023-12
Debt Instrument, Interest Rate, Effective Percentage		0.00%
ABL Term Loan [Member]
Debt Instrument [Line Items]
Debt Instrument, Maturity Date	[1]	2023-12
Weighted average interest rate	[1]	3.30%
Outstanding balances of term loan	[1]	$ 82,500	87,500
Current ABL Term Loan		$ (10,000)	$ (10,000)

[1] Includes the effects of interest rate swaps.

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Long-Term Debt - Long-Term Debt Components (Details) (Parenthetical)	6 Months Ended
	Dec. 27, 2020
Debt Disclosure [Abstract]
Finance lease obligations, scheduled maturity start date	2022-05
Finance lease obligations, scheduled maturity end date	2027-11

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Long-Term Debt - Additional Information (Details)		6 Months Ended	12 Months Ended
	Dec. 18, 2018 USD ($)	Dec. 27, 2020 USD ($) Swap	Jun. 28, 2020
Debt Instrument [Line Items]
Number of interest rate swaps | Swap		3
Interest Rate Swap [Member]
Debt Instrument [Line Items]
Derivative, notional amount		$ 75,000,000
Interest rate swaps termination period		2022-05
LIBOR [Member] | Interest Rate Swap [Member]
Debt Instrument [Line Items]
Derivative, average fixed interest rate		1.90%
ABL Facility [Member] | Credit Agreement [Member]
Debt Instrument [Line Items]
Debt agreement maximum borrowing capacity	$ 200,000,000
Principal amount of term loan	$ 100,000,000
Debt instrument maturity date	Dec. 18, 2023
ABL Facility [Member] | Credit Agreement [Member] | Revolving Credit Facility [Member]
Debt Instrument [Line Items]
Line of credit facility, maximum borrowing capacity	$ 100,000,000
ABL Revolver [Member]
Debt Instrument [Line Items]
Debt instrument, basis spread on variable rate			1.50%
ABL Revolver [Member] | Maximum [Member] | LIBOR [Member]
Debt Instrument [Line Items]
Debt instrument, basis spread on variable rate		1.75%
ABL Revolver [Member] | Maximum [Member] | Base Rate [Member]
Debt Instrument [Line Items]
Debt instrument, basis spread on variable rate		0.75%
ABL Revolver [Member] | Minimum [Member] | LIBOR [Member]
Debt Instrument [Line Items]
Debt instrument, basis spread on variable rate		1.25%
ABL Revolver [Member] | Minimum [Member] | Base Rate [Member]
Debt Instrument [Line Items]
Debt instrument, basis spread on variable rate		0.25%

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Long-Term Debt - Scheduled Maturities of Outstanding Debt Obligations (Details) $ in Thousands	Dec. 27, 2020 USD ($)
Debt Instrument Redemption [Line Items]
Fiscal 2021	$ 6,921
Fiscal 2022	13,545
Fiscal 2023	11,257
Fiscal 2024	58,801
Fiscal 2025	1,195
Thereafter	1,177
Finance Lease Obligations [Member]
Debt Instrument Redemption [Line Items]
Fiscal 2021	1,921
Fiscal 2022	3,545
Fiscal 2023	1,257
Fiscal 2024	1,301
Fiscal 2025	1,195
Thereafter	1,177
ABL Term Loan [Member]
Debt Instrument Redemption [Line Items]
Fiscal 2021	5,000
Fiscal 2022	10,000
Fiscal 2023	10,000
Fiscal 2024	$ 57,500

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Other Long-Term Liabilities - Other Long-Term Liabilities Components (Details) - USD ($) $ in Thousands	Dec. 27, 2020	Jun. 28, 2020
Other Liabilities Disclosure [Abstract]
Supplemental post-employment plan	$ 3,022	$ 3,019
Uncertain tax positions	2,778	1,112
Interest rate swaps	1,886	2,551
Other	3,324	1,924
Total other long-term liabilities	$ 11,010	$ 8,606

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Income Taxes - Schedule of Provision for Income Taxes and Effective Tax Rate (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Dec. 27, 2020	Dec. 29, 2019	Dec. 27, 2020	Dec. 29, 2019
Income Tax Disclosure [Abstract]
Provision for income taxes	$ 5,112	$ 507	$ 3,933	$ 1,228
Effective tax rate	40.60%	55.30%	26.50%	23.00%

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Income Taxes - Additional Information (Details) - USD ($) $ in Thousands	3 Months Ended	6 Months Ended
	Dec. 27, 2020	Dec. 27, 2020	Jun. 28, 2020
Income Tax Disclosure [Abstract]
Discrete tax benefit	$ 359	$ 5,148
Discrete tax expense	26	2,153
Unrecognized tax benefits for uncertain tax positions	2,855	2,855	$ 1,218
Unrecognized tax benefits that would impact effective tax rate	$ 1,893	$ 1,893

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Shareholders' Equity - Additional Information (Details)	Oct. 31, 2018 USD ($)
2018 Share Repurchase Program [Member]
Equity Class Of Treasury Stock [Line Items]
Share Repurchase Program, Authorized Amount	$ 50,000,000

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Shareholders' Equity - Repurchases and Retirements of Common Stock (Details) $ / shares in Units, $ in Thousands	6 Months Ended
	Dec. 27, 2020 USD ($) $ / shares shares
Stockholders Equity [Line Items]
Common stock repurchased and retired under publicly announced program (in shares) | shares	84
Average Price Paid per Share | $ / shares	$ 23.72
Approximate Dollar Value that May Yet Be Repurchased Under Publicly Announced Plans or Programs | $	$ 48,008
Fiscal 2020 [Member]
Stockholders Equity [Line Items]
Common stock repurchased and retired under publicly announced program (in shares) | shares	84
Average Price Paid per Share | $ / shares	$ 23.72

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Stock-Based Compensation - Additional Information (Details) - shares shares in Thousands	6 Months Ended
	Dec. 27, 2020	Oct. 29, 2020	Oct. 24, 2018
The 2013 Incentive Compensation Plan [Member]
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Effective date	Oct. 24, 2018
The Amended and Restated 2013 Incentive Compensation Plan [Member]
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Number of shares available for future issuance			1,250
Two Thousand Twenty Plan
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Effective date	Oct. 29, 2020
Number of shares available for future issuance	775	850

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Stock-Based Compensation - Summary of Number of Securities Remaining Available for Future Issuance (Details) - shares	6 Months Ended
	Dec. 27, 2020	Dec. 29, 2019	Oct. 29, 2020	Jun. 28, 2020
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Less: Awards granted to non-employee directors		(24,000)
2020 Plan [Member]
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Authorized under the 2020 Plan				850,000
Available for issuance under the 2020 Plan	775,000		850,000
2020 Plan [Member] | Awards Granted to Employees [Member]
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Less: Awards granted to employees	(75,000)

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Stock-Based Compensation - Summary of Stock-based Compensation Granted or Issued (Details) - shares shares in Thousands	6 Months Ended
	Dec. 27, 2020	Dec. 29, 2019
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Restricted/Vested stock units		24
Restricted Stock Units (RSUs) [Member]
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Restricted/Vested stock units	110	77
Common Stock [Member]
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Common stock		4
Common Stock [Member] | Stock Options [Member]
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Stock options	155	83

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Fair Value of Financial Instruments and Non-Financial Assets and Liabilities - Additional Information (Details)	6 Months Ended
	Dec. 27, 2020 USD ($) Swap	Dec. 29, 2019 USD ($)
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Number of interest rate swaps | Swap	3
Fair value assets and liabilities amount transfers into or out of the levels	$ 0	$ 0
Interest Rate Swap [Member]
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Derivative, notional amount	$ 75,000,000
Interest Rate Swap [Member] | LIBOR [Member]
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Derivative, average fixed interest rate	1.90%

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Fair Value of Financial Instruments and Non-Financial Assets and Liabilities - Schedule of Hedging Activities (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Dec. 27, 2020	Dec. 29, 2019	Dec. 27, 2020	Dec. 29, 2019
Fair Value Disclosures [Abstract]
Interest expense	$ 833	$ 1,101	$ 1,704	$ 2,358
(Increase) decrease in fair value of interest rate swaps	(333)	(289)	(665)	39
Impact of interest rate swaps to increase (decrease) interest expense	$ 335	$ 15	$ 664	$ (48)

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Accumulated Other Comprehensive Loss - Schedule of Changes in Accumulated Other Comprehensive Loss, Net of Tax (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Dec. 27, 2020	Dec. 29, 2019	Dec. 27, 2020	Dec. 29, 2019
Accumulated Other Comprehensive Income Loss [Line Items]
Beginning balance			$ (63,806)
Other comprehensive income	$ 6,167	$ 3,537	6,239	$ (3,119)
Ending balance	(57,567)		(57,567)
Foreign Currency Translation Adjustments [Member]
Accumulated Other Comprehensive Income Loss [Line Items]
Beginning balance			(61,848)
Other comprehensive income			5,730
Ending balance	(56,118)		(56,118)
Changes in Interest Rate Swaps [Member]
Accumulated Other Comprehensive Income Loss [Line Items]
Beginning balance			(1,958)
Other comprehensive income			509
Ending balance	$ (1,449)		$ (1,449)

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Earnings Per Share - Computation of Basic and Diluted Earnings (Loss) Per Share (Details) - USD ($) shares in Thousands, $ in Thousands	3 Months Ended		6 Months Ended
	Dec. 27, 2020	Dec. 29, 2019	Dec. 27, 2020	Dec. 29, 2019
Earnings Per Share [Abstract]
Net income	$ 7,464	$ 409	$ 10,896	$ 4,121
Basic weighted average shares	18,465	18,499	18,456	18,490
Net potential common share equivalents	267	273	273	255
Diluted weighted average shares	18,732	18,772	18,729	18,745
Excluded from the calculation of common share equivalents:
Anti-dilutive common share equivalents (in shares)	706	362	747	373
Unvested stock options that vest upon achievement of certain market conditions (in shares)	333		333

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Investments in Unconsolidated Affiliates and Variable Interest Entities - Additional Information (Details) $ in Thousands	6 Months Ended
	Dec. 27, 2020 USD ($) Entity	Jun. 28, 2020 USD ($)	Apr. 29, 2020
Schedule Of Equity Method Investments [Line Items]
Unconsolidated Entities, Number | Entity	2
UNF and UNF America [Member]
Schedule Of Equity Method Investments [Line Items]
Equity method investments	$ 2,532
Purchase commitment, remaining minimum amount committed	1,545
Accounts payable, related parties	$ 3,123	$ 1,166
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 investment, ownership percentage			34.00%

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Investments in Unconsolidated Affiliates and Variable Interest Entities - Schedule of Raw Material Purchases under Supply Agreement (Details) - USD ($) $ in Thousands	6 Months Ended
	Dec. 27, 2020	Dec. 29, 2019
UNF America [Member]
Schedule Of Equity Method Investments [Line Items]
Raw material purchases under supply agreement	$ 8,005	$ 8,582
UNF [Member]
Schedule Of Equity Method Investments [Line Items]
Raw material purchases under supply agreement	207	1,209
UNF and UNF America [Member]
Schedule Of Equity Method Investments [Line Items]
Raw material purchases under supply agreement	$ 8,212	$ 9,791

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Investments in Unconsolidated Affiliates and Variable Interest Entities - Schedule of Unaudited, Condensed Balance Sheet Information for Unconsolidated Affiliates (Details) - USD ($) $ in Thousands	Dec. 27, 2020	Sep. 27, 2020	Jun. 28, 2020	Dec. 29, 2019	Sep. 29, 2019	Jun. 30, 2019
Schedule Of Equity Method Investments [Line Items]
Current assets	$ 297,499		$ 254,493
Current liabilities	80,952		54,994
Shareholders’ equity and capital accounts	334,873	$ 320,077	316,155	$ 395,479	$ 390,007	$ 392,845
Equity Method Investment, Nonconsolidated Investee or Group of Investees
Schedule Of Equity Method Investments [Line Items]
Current assets	7,499		5,190
Non-current assets	731		561
Current liabilities	3,166		1,415
Shareholders’ equity and capital accounts	5,064		4,336
UNIFI’s portion of undistributed earnings	2,041		1,424
Equity Method Investment, Nonconsolidated Investee or Group of Investees | UNF and UNF America [Member]
Schedule Of Equity Method Investments [Line Items]
Current assets	7,499		5,190
Non-current assets	731		561
Current liabilities	3,166		1,415
Shareholders’ equity and capital accounts	5,064		4,336
UNIFI’s portion of undistributed earnings	$ 2,041		$ 1,424

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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		6 Months Ended
	Dec. 27, 2020	Dec. 29, 2019	Dec. 27, 2020	Dec. 29, 2019
Schedule Of Equity Method Investments [Line Items]
Gross profit (loss)	$ 25,934	$ 15,665	$ 40,495	$ 33,108
Net income	7,464	409	10,896	4,121
Distributions received				10,437
Equity Method Investment, Nonconsolidated Investee or Group of Investees
Schedule Of Equity Method Investments [Line Items]
Net sales	4,651	167,123	7,864	370,951
Gross profit (loss)	1,092	626	1,533	2,238
Income (loss) from operations	673	(4,649)	719	(7,812)
Net income	674	(2,080)	723	(5,411)
Depreciation and amortization	42	11,436	78	22,114
Cash received by PAL under cotton rebate program		3,463		7,156
Earnings recognized by PAL for cotton rebate program		2,766		6,354
Distributions received				10,437
Equity Method Investment, Nonconsolidated Investee or Group of Investees | Parkdale America LLC [Member]
Schedule Of Equity Method Investments [Line Items]
Net sales		161,648		360,815
Gross profit (loss)		(186)		885
Income (loss) from operations		(5,026)		(8,301)
Net income		(2,463)		(5,918)
Depreciation and amortization		11,393		22,024
Cash received by PAL under cotton rebate program		3,463		7,156
Earnings recognized by PAL for cotton rebate program		2,766		6,354
Distributions received				10,437
Equity Method Investment, Nonconsolidated Investee or Group of Investees | UNF and UNF America [Member]
Schedule Of Equity Method Investments [Line Items]
Net sales	4,651	5,475	7,864	10,136
Gross profit (loss)	1,092	812	1,533	1,353
Income (loss) from operations	673	377	719	489
Net income	674	383	723	507
Depreciation and amortization	$ 42	$ 43	$ 78	$ 90

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Commitments and Contingencies - Additional Information (Details) - USD ($) $ in Thousands	Apr. 10, 2019	Sep. 30, 2004
Commitments And Contingencies Disclosure [Abstract]
The term of a former ground lease		99 years
Net monitoring and reporting costs received	$ 180

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Related Party Transactions - Additional Information (Details) - USD ($)	Dec. 27, 2020	Jun. 28, 2020
Related Party Transactions [Abstract]
Related party receivables	$ 0	$ 0

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Related Party Transactions - Related Party Receivables and Payables (Details) - USD ($) $ in Thousands	Dec. 27, 2020	Jun. 28, 2020
Related Party Transaction [Line Items]
Finance lease obligations	$ 10,396	$ 11,381
Salem Leasing Corporation
Related Party Transaction [Line Items]
Accounts payable, related parties	672	616
Operating lease obligations	1,337	1,481
Finance lease obligations	6,835	6,509
Total related party payables	$ 8,844	$ 8,606

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Related Party Transactions - Schedule of Related Party Transactions (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Dec. 27, 2020	Dec. 29, 2019	Dec. 27, 2020	Dec. 29, 2019
Salem Leasing Corporation
Related Party Transaction [Line Items]
Expenses with related party	$ 924	$ 1,108	$ 1,863	$ 2,116

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Business Segment Information - Additional Information (Details)	6 Months Ended
	Dec. 27, 2020 Segment
Segment Reporting [Abstract]
Number of Reportable Segments	4

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Business Segment Information - Selected Financial Information for Polyester, Nylon, International and Other Segments (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Dec. 27, 2020	Dec. 29, 2019	Dec. 27, 2020	Dec. 29, 2019
Segment Reporting Information [Line Items]
Net sales	$ 162,776	$ 169,511	$ 304,281	$ 349,460
Cost of sales	136,842	153,846	263,786	316,352
Gross profit	25,934	15,665	40,495	33,108
Segment depreciation expense	5,393	5,167	10,832	10,113
Segment Profit	31,327	20,832	51,327	43,221
Polyester [Member]
Segment Reporting Information [Line Items]
Net sales	76,696	82,750	145,772	171,445
Cost of sales	65,801	76,090	130,245	156,990
Gross profit	10,895	6,660	15,527	14,455
Segment depreciation expense	4,470	4,183	8,873	8,224
Segment Profit	15,365	10,843	24,400	22,679
Asia [Member]
Segment Reporting Information [Line Items]
Net sales	44,692	47,918	82,415	93,875
Cost of sales	38,164	42,401	71,309	84,076
Gross profit	6,528	5,517	11,106	9,799
Segment Profit	6,528	5,517	11,106	9,799
Brazil [Member]
Segment Reporting Information [Line Items]
Net sales	24,253	20,862	46,859	45,034
Cost of sales	16,276	17,432	34,269	37,445
Gross profit	7,977	3,430	12,590	7,589
Segment depreciation expense	321	357	751	732
Segment Profit	8,298	3,787	13,341	8,321
Nylon [Member]
Segment Reporting Information [Line Items]
Net sales	16,008	17,084	27,037	37,286
Cost of sales	15,613	17,038	25,977	36,062
Gross profit	395	46	1,060	1,224
Segment depreciation expense	438	503	880	994
Segment Profit	833	549	1,940	2,218
Other Segments [Member]
Segment Reporting Information [Line Items]
Net sales	1,127	897	2,198	1,820
Cost of sales	988	885	1,986	1,779
Gross profit	139	12	212	41
Segment depreciation expense	164	124	328	163
Segment Profit	$ 303	$ 136	$ 540	$ 204

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Business Segment Information - Reconciliations of Segment Gross Profit to Consolidated Income Before Income Taxes (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Dec. 27, 2020	Dec. 29, 2019	Dec. 27, 2020	Dec. 29, 2019
Segment Reporting Reconciling Item For Operating Profit Loss From Segment To Consolidated [Line Items]
Gross profit	$ 25,934	$ 15,665	$ 40,495	$ 33,108
Selling, general and administrative expenses	12,625	12,508	23,989	23,488
Benefit for bad debts	(259)	(258)	(1,146)	(249)
Other operating expense, net	476	854	1,654	962
Operating income	13,092	2,561	15,998	8,907
Interest income	(187)	(212)	(312)	(422)
Interest expense	833	1,101	1,704	2,358
Equity in (earnings) loss of unconsolidated affiliates	(130)	756	(223)	1,622
Income before income taxes	12,576	916	14,829	5,349
Polyester [Member]
Segment Reporting Reconciling Item For Operating Profit Loss From Segment To Consolidated [Line Items]
Gross profit	10,895	6,660	15,527	14,455
Nylon [Member]
Segment Reporting Reconciling Item For Operating Profit Loss From Segment To Consolidated [Line Items]
Gross profit	395	46	1,060	1,224
Brazil [Member]
Segment Reporting Reconciling Item For Operating Profit Loss From Segment To Consolidated [Line Items]
Gross profit	7,977	3,430	12,590	7,589
Asia [Member]
Segment Reporting Reconciling Item For Operating Profit Loss From Segment To Consolidated [Line Items]
Gross profit	6,528	5,517	11,106	9,799
Other Segments [Member]
Segment Reporting Reconciling Item For Operating Profit Loss From Segment To Consolidated [Line Items]
Gross profit	$ 139	$ 12	$ 212	$ 41

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Business Segment Information - Reconciliation of Segment Total Assets to Consolidated Total Assets (Details) - USD ($) $ in Thousands	Dec. 27, 2020	Jun. 28, 2020
Segment Reporting Asset Reconciling Item [Line Items]
Total assets	$ 512,998	$ 474,162
Other current assets	10,282	11,763
Other operating lease assets	1,308	1,503
Other non-current assets	5,108	4,131
Operating Segments [Member]
Segment Reporting Asset Reconciling Item [Line Items]
Total assets	416,118	396,935
Operating Segments [Member] | Polyester [Member]
Segment Reporting Asset Reconciling Item [Line Items]
Total assets	261,769	263,496
Operating Segments [Member] | Nylon [Member]
Segment Reporting Asset Reconciling Item [Line Items]
Total assets	39,682	42,020
Operating Segments [Member] | Brazil [Member]
Segment Reporting Asset Reconciling Item [Line Items]
Total assets	60,006	49,967
Operating Segments [Member] | Asia [Member]
Segment Reporting Asset Reconciling Item [Line Items]
Total assets	54,661	41,452
Corporate, Non-Segment [Member]
Segment Reporting Asset Reconciling Item [Line Items]
Other current assets	68,900	48,600
Other PP&E	22,687	23,676
Other non-current assets	$ 3,985	$ 3,448

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Supplemental Cash Flow Information - Schedule of Cash Payments for Interest and Taxes (Details) - USD ($) $ in Thousands	6 Months Ended
	Dec. 27, 2020	Dec. 29, 2019
Supplemental Cash Flow Elements [Abstract]
Interest, net of capitalized interest of $92 and $56, respectively	$ 1,610	$ 2,357
Income tax payments, net	$ 3,923	$ 3,429

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Supplemental Cash Flow Information - Schedule of Cash Payments for Interest and Taxes (Details) (Parenthetical) - USD ($) $ in Thousands	6 Months Ended
	Dec. 27, 2020	Dec. 29, 2019
Supplemental Cash Flow Elements [Abstract]
Interest capitalized	$ 92	$ 56

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Supplemental Cash Flow Information - Additional Information (Details) - USD ($) $ in Thousands	6 Months Ended		12 Months Ended
	Dec. 27, 2020	Dec. 29, 2019	Jun. 28, 2020	Jun. 30, 2019
Supplemental Cash Flow Information [Abstract]
Capital expenditures incurred but not yet paid	$ 697	$ 1,127	$ 630	$ 1,329
Non cash activity relating to finance leases	$ 740	$ 6,301