Business Segment Information

12 Months Ended

Jun. 27, 2021

Segment Reporting [Abstract]

Business Segment Information

24. 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 has four reportable segments.

• The operations within the Polyester Segment exhibit similar long-term economic characteristics and primarily sell into an economic trading zone covered by the USMCA, NAFTA and CAFTA (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 sales offices 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. However, an intersegment technologies expense charged from the Polyester Segment to the Asia Segment is not eliminated from segment results. The technologies expense (i) reflects the sharing of certain manufacturing know-how, processes and product technical information and design and (ii) is included in the segment evaluations performed by the CODM.

Selected financial information is presented below:

	For the Fiscal Year Ended June 27, 2021
	Polyester		Asia		Brazil		Nylon		All Other		Total
Net sales	$	316,235	$	184,837	$	95,976	$	65,869	$	4,675	$	667,592
Cost of sales		282,791		159,444		64,281		63,502		4,080		574,098
Gross profit		33,444		25,393		31,695		2,367		595		93,494
Segment depreciation expense		18,637		—		1,315		1,769		648		22,369
Segment Profit	$	52,081	$	25,393	$	33,010	$	4,136	$	1,243	$	115,863

	For the Fiscal Year Ended June 28, 2020
	Polyester		Asia		Brazil		Nylon			All Other		Total
Net sales	$	309,184	$	153,032	$	73,339	$	67,381		$	3,573	$	606,509
Cost of sales		297,096		136,349		62,144		68,359			3,521		567,469
Gross profit (loss)		12,088		16,683		11,195		(978	)		52		39,040
Segment depreciation expense		16,904		—		1,385		1,917			453		20,659
Segment Profit	$	28,992	$	16,683	$	12,580	$	939		$	505	$	59,699

	For the Fiscal Year Ended June 30, 2019
	Polyester		Asia		Brazil		Nylon		All Other		Total
Net sales	$	370,770	$	132,866	$	102,877	$	98,127	$	4,164	$	708,804
Cost of sales		346,951		117,166		84,298		90,231		3,850		642,496
Gross profit		23,819		15,700		18,579		7,896		314		66,308
Segment depreciation expense		16,068		—		1,537		2,083		229		19,917
Segment Profit	$	39,887	$	15,700	$	20,116	$	9,979	$	543	$	86,225

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

	For the Fiscal Year Ended
	June 27, 2021			June 28, 2020			June 30, 2019
Polyester	$	33,444		$	12,088		$	23,819
Asia		25,393			16,683			15,700
Brazil		31,695			11,195			18,579
Nylon		2,367			(978	)		7,896
All Other		595			52			314
Segment gross profit		93,494			39,040			66,308
SG&A expenses		51,334			43,814			52,690
(Benefit) provision for bad debts		(1,316	)		1,739			308
Other operating expense, net		4,865			2,308			2,350
Operating income (loss)		38,611			(8,821	)		10,960
Interest income		(603	)		(722	)		(628	)
Interest expense		3,323			4,779			5,414
Equity in (earnings) loss of unconsolidated affiliates		(739	)		477			(3,968	)
Recovery of non-income taxes		(9,717	)		—			—
Gain on sale of investment in unconsolidated affiliate		—			(2,284	)		—
Impairment of investment in unconsolidated affiliate		—			45,194			—
Loss on extinguishment of debt		—			—			131
Income (loss) before income taxes	$	46,347		$	(56,265	)	$	10,011

The reconciliations of segment depreciation and amortization expense to consolidated depreciation and amortization expense are as follows:

	For the Fiscal Year Ended
	June 27, 2021		June 28, 2020		June 30, 2019
Polyester	$	18,637	$	16,904	$	16,068
Asia		—		—		—
Brazil		1,315		1,385		1,537
Nylon		1,769		1,917		2,083
All Other		648		453		229
Segment depreciation expense		22,369		20,659		19,917
Other depreciation and amortization expense		3,159		2,994		3,086
Depreciation and amortization expense	$	25,528	$	23,653	$	23,003

The reconciliations of segment capital expenditures to consolidated capital expenditures are as follows:

	For the Fiscal Year Ended
	June 27, 2021		June 28, 2020		June 30, 2019
Polyester	$	15,325	$	13,714	$	17,291
Asia		666		60		32
Brazil		3,461		2,332		2,574
Nylon		728		249		624
Segment capital expenditures		20,180		16,355		20,521
Other capital expenditures		998		2,154		4,350
Capital expenditures	$	21,178	$	18,509	$	24,871

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

	June 27, 2021		June 28, 2020
Polyester	$	285,939	$	263,496
Asia		41,121		41,452
Brazil		85,950		49,967
Nylon		68,034		42,020
Segment total assets		481,044		396,935
Other current assets		48,972		48,600
Other PP&E		21,175		23,676
Other operating lease assets		1,116		1,503
Other non-current assets		902		1,277
Investments in unconsolidated affiliates		2,159		2,171
Total assets	$	555,368	$	474,162

Geographic Data

	For the Fiscal Year Ended
Net Sales	June 27, 2021		June 28, 2020		June 30, 2019
U.S.	$	341,897	$	342,350	$	426,725
China		171,261		148,923		125,667
Brazil		95,976		73,339		102,877
Remaining Foreign Countries		58,458		41,897		53,535
Total	$	667,592	$	606,509	$	708,804
Export sales from UNIFI’s U.S. operations to external customers	$	59,055	$	64,305	$	84,707

The net sales amounts are based on the operating locations from where the items were produced or distributed.

Long-Lived Assets	June 27, 2021		June 28, 2020		June 30, 2019
U.S.	$	191,733	$	195,874	$	305,483
Brazil		21,733		10,805		13,218
China		1,919		779		78
Remaining Foreign Countries		9,708		9,859		5,169
Total	$	225,093	$	217,317	$	323,948

Long-lived assets are comprised of PP&E, net; operating lease assets; intangible assets, net; investments in unconsolidated affiliates; and other non-current assets.

Total Assets	June 27, 2021		June 28, 2020		June 30, 2019
U.S.	$	362,502	$	352,869	$	457,571
Brazil		85,950		49,967		67,490
China		63,239		39,238		30,982
Remaining Foreign Countries		43,677		32,088		36,108
Total	$	555,368	$	474,162	$	592,151