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Other Non-Current Assets
6 Months Ended
Dec. 26, 2021
Other Assets Noncurrent Disclosure [Abstract]  
Other Non-Current Assets

9.  Other Non-Current Assets

Other non-current assets consist of the following:

 

 

December 26, 2021

 

 

June 27, 2021

 

Recovery of non-income taxes

 

$

6,485

 

 

$

8,063

 

Intangible assets, net

 

 

3,234

 

 

 

3,978

 

Investments in unconsolidated affiliates

 

 

2,351

 

 

 

2,159

 

Vendor deposits and other

 

 

477

 

 

 

425

 

Total other non-current assets

 

$

12,547

 

 

$

14,625

 

Recovery of Non-Income Taxes

As previously described in Note 7, “Other Current Assets,” UNIFI recorded a recovery of non-income taxes and reflected current and non-current assets accordingly.

Investments in Unconsolidated Affiliates

As of December 26, 2021, UNIFI maintained investments in two entities classified as unconsolidated affiliates: U.N.F. Industries, Ltd. (“UNF”); and UNF America LLC (“UNFA”) (collectively “UNFs”).

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 typically negotiated every six months, based on market rates.  As of December 26, 2021, UNIFI’s open purchase orders related to this supply agreement were $2,287.

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

 

 

 

For the Six Months Ended

 

 

 

December 26, 2021

 

 

December 27, 2020

 

UNFA

 

$

12,582

 

 

$

8,005

 

UNF

 

 

146

 

 

 

207

 

Total

 

$

12,728

 

 

$

8,212

 

 

As of December 26, 2021 and June 27, 2021, UNIFI had combined accounts payable due to UNF and UNFA of $3,912 and $2,955, 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 at each of UNIFI’s fiscal year ends; 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.

 

 

 

December 26, 2021

 

 

June 27, 2021

 

Current assets

 

$

10,071

 

 

$

7,931

 

Non-current assets

 

 

662

 

 

 

659

 

Current liabilities

 

 

6,363

 

 

 

3,967

 

Non-current liabilities

 

 

 

 

 

 

Shareholders’ equity and capital accounts

 

 

4,370

 

 

 

4,623

 

 

 

 

 

 

 

 

 

 

UNIFI’s portion of undistributed earnings

 

 

2,291

 

 

 

2,100

 

 

 

 

For the Three Months Ended

 

 

For the Six Months Ended

 

 

December 26, 2021

 

 

December 27, 2020

 

 

December 26, 2021

 

 

December 27, 2020

 

Net sales

$

7,336

 

 

$

4,651

 

 

$

13,486

 

 

$

7,864

 

Gross profit

 

28

 

 

 

1,092

 

 

 

572

 

 

 

1,533

 

(Loss) income from operations

 

(381

)

 

 

673

 

 

 

(254

)

 

 

719

 

Net (loss) income

 

(380

)

 

 

674

 

 

 

(253

)

 

 

723

 

Depreciation and amortization

 

31

 

 

 

42

 

 

 

64

 

 

 

78

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Distributions received