Income Taxes (Tables)

12 Months Ended

Jun. 27, 2021

The components of income (loss) before income taxes consist of the following:

	For the Fiscal Year Ended
	June 27, 2021			June 28, 2020			June 30, 2019
U.S.	$	(12,463	)	$	(74,905	)	$	(13,326	)
Foreign		58,810			18,640			23,337
Income (loss) before income taxes	$	46,347		$	(56,265	)	$	10,011

Provision for income taxes consists of the following:

Reconciliation from the federal statutory tax rate to the effective tax rate is as follows:

	For the Fiscal Year Ended
	June 27, 2021			June 28, 2020			June 30, 2019
Federal statutory tax rate		21.0	%		21.0	%		21.0	%
Foreign income taxed at different rates		9.0			(1.2	)		16.1
Repatriation of foreign earnings and withholding taxes		1.8			(2.0	)		20.3
U.S. tax on GILTI		3.9			(5.0	)		32.5
Change in valuation allowance		5.0			0.6			(1.5	)
Foreign tax credits		(5.4	)		0.9			(11.9	)
Domestic production activities deduction		0.6			—			(5.6	)
Research and other business credits		(3.7	)		2.0			(7.7	)
State income taxes, net of federal tax benefit		(0.2	)		2.6			(0.6	)
Change in uncertain tax positions		0.5			(0.3	)		8.2
Nondeductible compensation		1.4			(0.8	)		5.1
Nontaxable income		(2.4	)		1.1			(4.2	)
Valuation allowance related to loss on sale of investment in PAL		—			(19.3	)		—
Tax expense on unremitted foreign earnings		7.0			(0.9	)		—
Toll charge		—			—			0.7
Revaluation of U.S. deferred balances due to U.S. tax reform		—			—			3.1
Rate benefit of U.S. federal NOL carryback		(2.8	)		—			—
Deemed repatriation of foreign earnings under Subpart F		1.5			—			—
Nondeductible expenses and other		0.1			(0.4	)		—
Effective tax rate		37.3	%		(1.7	)%		75.5	%

The significant components of UNIFI’s deferred tax assets and liabilities consist of the following:

	June 27, 2021			June 28, 2020
Deferred tax assets:
Investments, including unconsolidated affiliates	$	—		$	3,995
Tax credits		18,711			19,457
Capital loss carryforwards		17,429			13,791
Accrued compensation		4,056			1,777
NOL carryforwards		3,043			3,907
Research and development costs		6,934			6,073
Other items		4,815			6,652
Total gross deferred tax assets		54,988			55,652
Valuation allowance		(36,980	)		(37,439	)
Net deferred tax assets		18,008			18,213
Deferred tax liabilities:
PP&E		(16,045	)		(17,733	)
Unremitted earnings		(3,769	)		(510	)
Recovery of non-income taxes		(3,664	)		—
Other		(8	)		(167	)
Total deferred tax liabilities		(23,486	)		(18,410	)
Net deferred tax liabilities	$	(5,478	)	$	(197	)

The balances and activity for UNIFI’s deferred tax valuation allowance are as follows:

	For the Fiscal Year Ended
	June 27, 2021			June 28, 2020			June 30, 2019
Balance at beginning of year	$	(37,439	)	$	(26,020	)	$	(15,143	)
Decrease (increase) in valuation allowance		459			(11,419	)		(10,877	)
Balance at end of year	$	(36,980	)	$	(37,439	)	$	(26,020	)

Components of UNIFI’s deferred tax valuation allowance are as follows:

	For the Fiscal Year Ended
	June 27, 2021			June 28, 2020			June 30, 2019
Investments, including unconsolidated affiliates	$	—		$	(3,995	)	$	(5,696	)
NOL carryforwards		(2,336	)		(2,542	)		(2,943	)
Capital loss carryforwards		(17,429	)		(13,791	)		(1,105	)
Tax credits		(17,215	)		(17,111	)		(16,276	)
Total deferred tax valuation allowance	$	(36,980	)	$	(37,439	)	$	(26,020	)

A reconciliation of beginning and ending gross amounts of unrecognized tax benefits is as follows:

	For the Fiscal Year Ended
	June 27, 2021			June 28, 2020		June 30, 2019
Balance at beginning of year	$	1,218		$	1,083	$	166
Gross (decreases) increases related to current period tax positions		(24	)		98		26
Gross increases related to tax positions in prior periods		1,396			37		980
Gross decreases related to settlements with tax authorities		—			—		—
Gross decreases related to lapse of applicable statute of limitations		—			—		(89	)
Balance at end of year	$	2,590		$	1,218	$	1,083