10-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K

☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended July 3, 2022

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 incorporation or organization)	(I.R.S. Employer Identification No.)

7201 West Friendly Avenue

Greensboro, North Carolina 27410

(Address of principal executive offices)(Zip Code)

Registrant’s telephone number, including area code: (336) 294-4410

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

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

None

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes   ☐   No   ☒

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes   ☐  No  ☒

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 has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report.  ☒

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes   ☐  No  ☒

As of December 26, 2021, the aggregate market value of the registrant’s voting common stock held by non-affiliates of the registrant was approximately $313,304,229.  The registrant has no non-voting stock.

As of August 29, 2022, the number of shares of the registrant’s common stock outstanding was 18,000,052.

DOCUMENTS INCORPORATED BY REFERENCE

Portions of the registrant’s definitive proxy statement to be filed with the Securities and Exchange Commission in connection with the registrant’s 2022 Annual Meeting of Shareholders are incorporated by reference in Part III of this Form 10-K to the extent described herein.

FORWARD-LOOKING STATEMENTS

This Annual Report on Form 10-K 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 the Company’s 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 the Company’s 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 strains 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 the Company’s brands;

• employee relations;

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

• the impact of climate change or 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 below in “Item 1A. Risk Factors” 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.

ANNUAL REPORT ON FORM 10-K

FOR THE FISCAL YEAR ENDED JULY 3, 2022

TABLE OF CONTENTS

		Page
PART I
Item 1.	Business	2
Item 1A.	Risk Factors	12
Item 1B.	Unresolved Staff Comments	17
Item 2.	Properties	17
Item 3.	Legal Proceedings	17
Item 4.	Mine Safety Disclosures	17
	Information about our Executive Officers	18
PART II
Item 5.	Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities	19
Item 6.	Reserved	20
Item 7.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	21
Item 7A.	Quantitative and Qualitative Disclosures About Market Risk	38
Item 8.	Financial Statements and Supplementary Data	40
Item 9.	Changes in and Disagreements With Accountants on Accounting and Financial Disclosure	40
Item 9A.	Controls and Procedures	40
Item 9B.	Other Information	40
PART III
Item 10.	Directors, Executive Officers and Corporate Governance	41
Item 11.	Executive Compensation	41
Item 12.	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	41
Item 13.	Certain Relationships and Related Transactions, and Director Independence	41
Item 14.	Principal Accountant Fees and Services	41
PART IV
Item 15.	Exhibits and Financial Statement Schedules	42
Item 16.	Form 10-K Summary	46
	Signatures	47
	Consolidated Financial Statements	F-i

Fiscal Year

The fiscal year for Unifi, Inc., its domestic subsidiaries and its subsidiary in El Salvador ends on the Sunday in June or July nearest June 30 of each year. Unifi, Inc.’s fiscal 2022, 2021, and 2020 ended on July 3, 2022, June 27, 2021 and June 28, 2020, respectively.

Unifi, Inc.’s remaining material operating subsidiaries’ fiscal years end on June 30. There were no significant transactions or events that occurred between Unifi, Inc.’s fiscal year end and such wholly owned subsidiaries’ fiscal year ends. Unifi, Inc.’s fiscal 2022 consisted of 53 weeks, while fiscal 2021 and 2020 each consisted of 52 weeks.

Presentation

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

1

PART I

Item 1.Business

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 sometimes 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.  Nylon products include virgin or recycled textured, solution dyed and spandex covered yarns. Recycled solutions, made from both pre-consumer and post-consumer waste, include plastic bottle flake (“Flake”) made from polyester, and polymer beads (“Chip”) and staple fiber made from polyester or nylon.

UNIFI maintains one of the textile industry’s most comprehensive product offerings that includes 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.”).

UNIFI has three reportable segments based on the primary geographies in which UNIFI distributes its products:

• The Americas Segment primarily sells recycled and synthetic products to yarn manufacturers, knitters and weavers that produce yarn and/or fabric for the apparel, hosiery, home furnishings, automotive, industrial, medical, and other end‑use markets principally in North and Central America.  The Americas Segment consists of sales and manufacturing operations in the U.S., El Salvador and Colombia that utilize the Dominican Republic—Central America Free Trade Agreement (“CAFTA-DR”) and the United States-Mexico-Canada Agreement (“USMCA”). Prior to the establishment of the USMCA, we benefited from a similar, historical agreement known as the North American Free Trade Agreement (“NAFTA”).

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

• The Asia Segment primarily sells recycled and synthetic products to other yarn manufacturers, knitters and weavers that produce fabric for the apparel, home furnishings, automotive, industrial, and other end-use markets principally in Asia and Europe. The Asia Segment has no manufacturing assets and includes sales offices in China, Turkey, and Hong Kong.

Other information for UNIFI’s reportable segments is provided in Note 24, “Business Segment Information,” to the accompanying consolidated financial statements.  

Strategic Overview and Operating Results

We believe UNIFI’s underlying performance during recent fiscal years reflects the strength of our global initiative to deliver differentiated solutions to customers and brand partners throughout the world. Our supply chain has been developed and enhanced in multiple regions around the globe, allowing us to deliver a diverse range of fibers and polymers to key customers in the markets we serve, especially apparel. These textile products are supported by quality assurance, product development, product and fabric certifications, hangtags, co-marketing along with technical and customer service teams across UNIFI’s operating subsidiaries. We have developed this successful operating platform by improving operational and business processes and deriving value from sustainability-based initiatives, including polyester and nylon recycling.

This platform has provided growth in our core operations during recent fiscal years and has been augmented by significant capital investments that support the production and delivery of sustainable and innovative solutions. In order to achieve further growth, UNIFI is committed to investing strategically and synergistically in:

• accelerating innovation and high-quality manufacturing processes;

• expanding the REPREVE^® brand;

• growing market share in our major textile regions; and

• penetrating new markets and end-uses.

We believe that further commercial expansion will require a continued stream of new technology and innovation that generates products with meaningful consumer benefits. Along with our recycled platform, UNIFI has significant yarn technologies that provide optimal performance characteristics for today’s marketplace, including moisture management, temperature moderation, stretch, ultra-violet protection, and fire retardation, among others. To achieve further growth, UNIFI remains focused on innovation, bringing to market the next wave of fibers and polymers for tomorrow’s applications. As we invest and grow, sustainability remains at our core. We believe that increasing the awareness for recycled solutions in applications across fibers and polymers and furthering sustainability-based initiatives with like-minded brand partners will be key to our future success. We also believe that our manufacturing processes and our technical knowledge and capabilities will allow us to grow market share and develop new textile programs with new and existing customers. Ultimately, combining leading edge innovation with our prominent, high-quality brand and agile regional business model will allow for underlying sales and profitability growth.

2

Our recent efforts to alleviate competitive pressures from imported yarn into the U.S. are intended to complement our strategic initiatives and to stabilize the market share decline we have experienced in the U.S., while improving facility utilization and cost absorption. These efforts are further discussed below under the heading “Trade Regulation and Rules of Origin.” Execution on both our strategic and trade initiatives is expected to increase revenue and profitability.

Consistent with our renewed focus on delivering recycled and synthetic fibers around the globe, we executed a strategic divestiture of our 34% minority ownership interest in Parkdale America, LLC (“PAL”) (the “PAL Investment”), a domestic cotton yarn supplier, in fiscal 2020. The PAL Investment was sold for $60,000 in cash to Parkdale, Incorporated (“Parkdale”), the existing majority partner. Cash proceeds from the divestiture provided additional flexibility and liquidity for both long-term opportunities and uncertainty associated with economic volatility.

Fiscal 2022 Financial Performance

In fiscal 2022, global economic recovery, domestic weather events, supply chain challenges, and general inflationary pressures led to higher input costs. In the U.S., rising input costs and a tighter labor pool placed meaningful pressure on our domestic gross profit performance during fiscal 2022.

In the past, selling price adjustments were primarily associated with changes in the price of polyester and nylon raw materials, but the current environment requires that selling price adjustments accommodate significant increases in all categories of input costs, including packaging, supplies, additives, and labor. For the majority of our portfolio, we were able to implement selling price adjustments to protect gross margins. However, some selling price adjustments in the U.S. and Central America were not realized rapidly enough to avoid temporary gross margin declines in certain portions of our portfolio. While we have navigated the dynamic cost environment better than in recent prior years, elevated levels of input costs and lower levels of labor productivity in our manufacturing operations adversely impacted our gross margin and remain headwinds to UNIFI’s profitability.

In order to address these input cost and labor headwinds during fiscal 2022, we (i) instituted responsive selling price adjustments at all locations and (ii) prioritized more focused training and retention initiatives within our domestic manufacturing workforce. We expect both actions to improve our profitability in future periods.

In addition to the recent escalation of input costs, UNIFI experienced inefficiencies in the global supply chain in connection with (i) freight costs and logistics slowdowns in foreign markets; (ii) a tighter labor pool in the U.S.; and (iii) suppressed productivity from our business partners resulting from pandemic-related lockdowns in certain regions, particularly Asia. Despite some stabilization of these events, we experienced global demand volatility and uncertainty in the fourth quarter of fiscal 2022 and at the start of fiscal 2023, as the threat of recession continues to create uncertainty for calendar 2022 and 2023. The existing challenges and future uncertainty, particularly for rising input costs, labor productivity, and global demand, could worsen and/or continue for prolonged periods, materially impacting our Americas and Asia Segments. The need for future selling price adjustments could impact our ability to retain current customer programs and compete successfully for new programs in certain regions.

In fiscal 2022, the Brazil Segment’s results normalized as compared to fiscal 2021.  The performance in fiscal 2021 was largely the result of outperformance by the Brazil Segment that included the temporary capture of market share from competitive imports and higher conversion margin due to the unfavorable dynamics facing competitors related to higher input and freight costs combined with longer delivery times.

The Asia Segment continued to perform well with both new and existing customer programs in fiscal 2022, despite recent disruptions due to COVID-19 lockdowns in China. The Asia Segment is better able to navigate volatility in product demand due to its asset light model and the lack of cost absorption that can be unfavorable in times of weaker demand for more asset intensive operations like our Americas and Brazil Segments.

Russia-Ukraine Conflict

We recognize the disruption to global markets and supply chains caused by Russia’s invasion of Ukraine. While volatility and uncertainty continue, we have no significant customers or supply chain partners in the conflicted region, and we have not been directly impacted by the conflict. Indirectly, we recognize that additional or prolonged impacts to the petroleum or other global markets could cause further inflationary pressures to our raw material costs or unforeseen adverse impacts.

COVID-19 Pandemic

Beginning in March 2020 with the World Health Organization’s declaration of the current COVID-19 outbreak as a global pandemic, the global economy has seen the negative effects of local, state and federal containment efforts.  These measures significantly reduced economic activity and demand for UNIFI’s products from March 2020 to December 2020.

In an effort to protect the health and safety of our employees, customers and communities, UNIFI took proactive, aggressive actions 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 were relaxed in fiscal 2022 and are evaluated regularly against local, state, and federal recommendations.

3

Throughout calendar 2020, the Asia Segment’s overall performance and profitability was moderately impacted by the COVID-19 pandemic, while our Americas and Brazil Segments’ operations were more adversely impacted, most notably in the June 2020 and September 2020 quarters during the most intense declines in global demand.

During fiscal 2021, the local government in Sao Paolo, Brazil issued lockdown orders during late March 2021 that continued into April 2021 in an effort to slow the spread of COVID-19 resulting in store closings and manufacturing shutdowns. The restrictions caused an immediate disruption of our Brazil Segment’s revenue during the quarantine period, although demand levels recovered at the end of fiscal 2021.

Beginning in March 2022, China implemented a strict COVID-19 zero-tolerance policy that included geographic markets near Suzhou, China, where our sales and administrative office is located.  Due to these severe lockdowns in China, the Asia Segment’s results were adversely impacted, primarily during the fourth quarter of fiscal 2022.  We also believe that if these lockdowns remain in place, this could adversely impact the results of our Asia Segment in the first half of fiscal 2023, along with the current global demand uncertainty.

UNIFI has been able to navigate the negative effects of the COVID-19 pandemic to minimize the overall impact to UNIFI for fiscal 2021 and 2022 as global demand and consumer spending were predominantly restored over fiscal 2021 and such economic levels did not decline within fiscal 2022. However, there is no certainty that such levels will continue or increase during the remainder of calendar 2022. Additionally, there is no clear indication that the recent demand and activity levels were the result of sustained economic restoration, as those levels could have been favorably impacted by pent up demand. UNIFI will continue to monitor the Russia-Ukraine conflict, the COVID-19 pandemic, and the potential recessionary pressures that have become pervasive in calendar 2022.

REPREVE^®

In the early 2000s, by recycling our own production waste into useful polyester fibers, we took the first steps toward building an important supply chain with a focus on sustainability and environmental responsibility. After nearly two decades, our REPREVE brand has become the quintessential recycled fiber of choice for brand, retail, and textile partners around the globe. REPREVE is most commonly offered in the following fiber forms: polyester staple fiber, polyester filament, nylon staple fiber, and nylon filament, comprising our REPREVE Fiber platform. We also sell REPREVE Chip, which is a polyester resin product. Beyond the high quality, versatility, and breadth of application that REPREVE offers, UNIFI combines transparency, traceability, and certification for REPREVE products to support our customers’ own sustainability narratives.

REPREVE is our flagship and fastest growing brand. As part of our efforts to expand consumer brand recognition of REPREVE, UNIFI has developed recycling-focused sponsorships with various brand partners and other entities that span across sporting, music, and outdoor events. The increasing success and awareness of the REPREVE brand continues to provide new opportunities for growth, allowing for expansion into new end uses and markets for REPREVE, as well as continued growth of the brand with current customers.  This has driven traction with global brands and retailers who obtain value and lasting consumer interest from the innovation and sustainability aspects that REPREVE provides.

We remain committed to sustainability. During fiscal 2022, we achieved a significant milestone by surpassing more than 30 billion recycled plastic bottles transformed since the inception of REPREVE.  In addition, in fiscal 2021, we received comparably favorable Higg Materials Sustainability Index scores for REPREVE produced in the U.S., demonstrating that the brand’s global warming potential is meaningfully better than conventional alternatives such as generic recycled yarn and virgin yarn. Our dedication continues as we pursue our next goal of reaching the 50 billion recycled plastic bottles mark by December 2025. We will continue growing the business for our REPREVE products and believe our engagement and research and development work with brands and retailers continues to create new, worldwide sales opportunities.

The primary metric for tracking growth of the REPREVE brand is REPREVE Fiber sales. REPREVE Fiber represents Unifi's collection of fiber products on its recycled platform, with or without added technologies. Of our consolidated sales in fiscal 2020, 2021, and 2022, REPREVE Fiber comprised 31%, 37%, and 36%, or $186,141, $245,832, and $293,080, respectively.

Capital Investments

In fiscal 2015, we began a significant, three-year capital investment plan to increase our manufacturing capabilities and capacity, expand our technological foundation and customize our asset base to improve our ability to deliver small-lot and high-value solutions. These investments were made primarily for the Americas Segment.

Most notably, we made significant investments in the production and supply chain for REPREVE, including backward integration by building a bottle processing plant and additional production lines in the REPREVE Recycling Center. Furthermore, UNIFI (i) installed bi-component spinning machinery to produce specialized, high-value yarns and (ii) made machinery modifications to meet the ever-changing demands of the market, all while (iii) investing in routine capital maintenance to ensure high-quality manufacturing.

Subsequent to the multi-year capital investment plan, our capital investments have ranged from approximately $15,000 to $25,000 each fiscal year, and most recently include (i) making further improvements in production capabilities and technology enhancements in the Americas and (ii) annual maintenance capital expenditures.

4

Fiscal 2022 capital investments increased to approximately $40,000 in connection with our plans to invest approximately $100,000 into the Americas and Brazil Segments for new eAFK Evo texturing machinery that has significant efficiency, productivity, and flexibility benefits over our legacy equipment.

In fiscal 2023, we expect to invest between $35,000 and $40,000 in capital projects, including: (i) the purchase and installation of additional eAFK Evo texturing machines, (ii) making further improvements in production capabilities and technology enhancements in the Americas, and (iii) approximately $10,000 to $12,000 of annual maintenance capital expenditures.  We are encouraged by the initial metrics surrounding the eAFK Evo texturing machines currently operating in our facilities, and we expect these upgrades to generate meaningful investment returns in the future.

Nonetheless, economic disruptions and other factors could adversely impact the speed at which we invest in capital projects, as we continue to prioritize liquidity, safety, and maintenance.

Share Repurchases

In addition to capital investments and debt retirement, UNIFI may utilize excess cash for strategic share repurchases. On October 31, 2018, UNIFI announced that the Board of Directors (“Board”) approved a 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.

As of July 3, 2022, UNIFI had repurchased 701 shares at an average price of $15.90, leaving $38,859 available for repurchase under the 2018 SRP. UNIFI will continue to evaluate opportunities to use excess cash flows from operations or existing borrowings to repurchase additional stock, while maintaining sufficient liquidity to support its operational needs and to fund future strategic growth opportunities.

Developments in Principal Markets

Americas

Since 2017, apparel production experienced multi-year growth in the North and Central America regions, which comprise the principal markets for UNIFI’s Americas Segment. The share of synthetic apparel production for these regions as a percentage of U.S. retail stabilized at approximately 18%, while retail consumption grew. The CAFTA-DR region, which continues to be a competitive alternative to Asian supply chains for textile products, maintained its share of synthetic apparel supply to U.S. retailers. The relative share of synthetic apparel versus cotton apparel as a proportion of the overall apparel market increased and provided growth for the consumption of synthetic yarns within the CAFTA-DR region.

During the last five fiscal years, several key drivers affected our financial results. During fiscal 2018 and 2019, our operations in the U.S. were unfavorably impacted by (i) rising raw material costs and (ii) a surge of imported polyester textured yarn that depressed our pricing, market share, and fixed cost absorption. During fiscal 2020, our financial results began to improve following more stable import and raw material cost environments. However, the COVID-19 pandemic had a significant unfavorable impact to product demand and our annual profitability suffered accordingly. Near the end of fiscal 2020, we divested a minority interest investment and significantly improved our liquidity position, supporting business preservation and the ability to better capture long-term growth opportunities. Throughout fiscal 2021, our businesses experienced sequential improvement alongside global demand and economic recovery, and we capitalized on profitable opportunities that fueled strong consolidated results. Throughout fiscal 2022, we experienced adverse pressure from rising input costs and weakening labor productivity primarily in our domestic operations. Looking ahead, our operations remain well positioned to capture long-term growth opportunities, and we are working to mitigate any potential recession impacts.

Brazil

UNIFI’s Brazilian operations play a key role in our strategy. This segment is primarily impacted by (i) price pressures from imported fiber, fabric, and finished goods (similar to our U.S. operations), (ii) the inflation rate in Brazil, and (iii) changes in the value of the Brazilian Real (“BRL”).  Competition and economic and political volatility remain challenging conditions in South America, despite our strong performance in fiscal 2021 and 2022, thus UNIFI continues to (i) aggressively pursue mix enrichment by working with customers to develop programs using our differentiated products, including REPREVE and (ii) implement process improvements and manufacturing efficiency plans to help lower per-unit costs.

Asia

UNIFI’s Asia operations remain an important part of our strategy due to the significant capacity and production that exists in Asia, which enhances our ability to service customers with global supply chains.  Competition in the Asia region remains high; however, interest and demand for UNIFI’s products in Asia have helped support strong sales volumes in recent years. We are encouraged by programs undertaken with key brands and retailers that benefit from the diversification and innovation of our global portfolio.

UNIFI’s operations in Asia and Brazil have been critical to global growth and expansion. Looking ahead, we expect to expand into additional markets in Europe, Africa, and the Middle East utilizing the asset-light supply chain and service model that has been successful for us in Asia.

5

As we expand our operations outside of the Americas, we will continue to evaluate the level of capital investment required to support the needs of our customers and we intend to allocate our resources accordingly.

Industry Overview

UNIFI operates in the textile industry and, within that broad category, the respective markets for yarns, fabrics, fibers, and end-use products, such as apparel and hosiery, automotive, industrial products, and home furnishings, among others.  Even though the textile industry is global, there are several distinctive regional or other geographic markets that often shape the business strategies and operations of participants in the industry.  Because of free trade agreements and other trade regulations entered into by the U.S. government, the U.S. textile industry, which is otherwise a distinctive geographic market on its own, is often considered in conjunction with other geographic markets or regions in North, South, and Central America.

According to data compiled by PCI WoodMackenzie, a global leader in research and analysis for the polyester and raw material markets, global demand for polyester yarns has grown steadily since 1980. In calendar 2003, polyester replaced cotton as the fiber with the largest percentage of worldwide fiber sales.  In calendar 2018, global polyester consumption accounted for an estimated 56% of global fiber consumption, and global demand was projected to increase by approximately 3.0% to 3.5% annually through calendar 2025.  In calendar 2018, global nylon consumption accounted for an estimated 5% of global fiber consumption.  Additionally, due to the higher cost of nylon, the industry may transition certain products from nylon to polyester. The polyester and nylon fiber sectors together accounted for approximately 61% of North American textile consumption during calendar 2018. We estimate that these calendar 2018 trends remained similar or identical throughout calendar 2019. COVID-19 adversely impacted the textile industry during calendar 2020, but we believe the share of polyester and nylon consumption has generally remained unchanged.

According to the National Council of Textile Organizations, the U.S. textile and apparel industry’s total shipments were approximately $65.2 billion for calendar 2021 as the U.S. textile and apparel industry exported nearly $28.4 billion of textile and apparel products.  The U.S. textile industry remains a large manufacturing employer.

Trade Regulation and Rules of Origin

The duty rate on imports into the U.S. of finished apparel categories that utilize polyester and nylon yarns generally range from 16% to 32%. For many years, imports of fabric and finished goods into the U.S. have increased significantly from countries that do not participate in free trade agreements or trade preference programs, despite duties charged on those imports. The primary drivers for that growth were lower overseas operating costs, foreign government subsidization of textile industries, increased overseas sourcing by U.S. retailers, the entry of China into the World Trade Organization, and the staged elimination of all textile and apparel quotas. Although global apparel imports represent a significant percentage of the U.S. market, Regional FTAs (as defined below), which follow general “yarn forward” rules of origin, provide duty free advantages for apparel made from regional fibers, yarns and fabrics, allowing UNIFI opportunities to participate in this growing market.

A significant number of UNIFI’s customers in the apparel market produce finished goods that meet the eligibility requirements for duty-free treatment in the regions covered by the Americas Segment and the Colombia and Peru free trade agreements (collectively, the “Regional FTAs”). These Regional FTAs contain rules of origin requirements in order for covered products to be eligible for duty-free treatment. In the case of textiles such as fabric, yarn (such as POY), fibers (filament and staple), and certain garments made from them, the products are generally required to be fully formed within the respective regions. UNIFI is the largest filament yarn manufacturer, and one of the few producers of qualifying synthetic yarns, in the regions covered by these Regional FTAs.

The U.S. adoption of the USMCA in calendar 2020, did not significantly impact textile and apparel trade in the region. The USMCA includes strong rules of origin and closed several loopholes in the NAFTA that allowed non-originating inputs, such as sewing thread, pocketing, and narrow elastic fabrics.  

U.S. legislation commonly referred to as the “Berry Amendment” stipulates that certain textile and apparel articles purchased by the U.S. Department of Defense must be manufactured in the U.S. and must consist of yarns and fibers produced in the U.S. UNIFI believes it is the largest producer of polyester and nylon filament yarns for Berry Amendment compliant purchasing programs.

UNIFI refers to fibers sold with specific rules of origin requirements under the Regional FTAs and the Berry Amendment, as “Compliant Yarns.”  Approximately two-thirds of UNIFI’s sales within the Americas Segment are sold as Compliant Yarns under the terms of the Regional FTAs or the Berry Amendment.

UNIFI believes the requirements of the rules of origin and the associated duty-free cost advantages in the Regional FTAs, together with the Berry Amendment and the growing demand for supplier responsiveness and improved inventory turns, will ensure that a portion of the existing textile industry will remain based in the Americas. UNIFI expects that the region covered by the Americas Segment will continue to maintain its share of apparel production as a percentage of U.S. retail. UNIFI believes the remaining synthetic apparel production within these NACA region markets is more specialized and defensible, and, in some cases, apparel producers are bringing programs back to the NACA region as part of a balanced sourcing strategy for certain brands and retailers.  Because UNIFI is the largest of only a few significant producers of Compliant Yarns under these Regional FTAs, one of UNIFI’s business strategies is to continue to leverage its eligibility status for duty-free processing to increase its share of business with regional and domestic fabric producers who ship their products into this region.

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Over the longer term, the textile industry in the NACA region is expected to continue to be impacted by Asian supply chains where costs are much lower and regulation is limited.

Imports of polyester textured yarn from China and India, which increased approximately 79% from calendar 2013 to 2017 and which continued to grow during calendar 2018, remained elevated during fiscal 2019 and created considerable pressure on our margins and competitiveness in the U.S.  Accordingly, in October 2018, UNIFI filed antidumping and countervailing duty cases with the U.S. Department of Commerce (the “Commerce Department”) and the U.S. International Trade Commission (the “ITC”) alleging that dumped and subsidized imports of polyester textured yarn from China and India were causing material injury to the domestic polyester textured yarn industry.

In response to antidumping and countervailing duty cases filed with the Commerce Department and the ITC in October 2018, the Commerce Department announced on April 29, 2019 affirmative preliminary countervailing duty determinations on unfairly subsidized imports of polyester textured yarn from (i) China at rates of 32% or more and (ii) India at rates of 7% or more. Subsequently, the Commerce Department and the ITC completed their investigations and began imposing associated final duties on imports. Pursuant to the conclusion of these investigations, subject imports from China and India are being assessed combined antidumping and countervailing duty rates of 97% and higher and 18% and higher, respectively, in addition to normal course duties in effect. The positive developments in our pursuit of relief from low-cost and subsidized imports are critical steps in our efforts to compete against imported yarns that have flooded the U.S. market in recent years.

Subsequent to the completion of the trade initiatives against China and India, imports from Indonesia, Malaysia, Thailand, and Vietnam (the “Subject Countries”) seemingly replaced the imports from China and India and surged into the U.S. market. Subject import volume from the Subject Countries 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 the Subject Countries undersold the domestic industry, taking sales from, and exerting considerable downward pricing pressure on, yarns produced by UNIFI. Accordingly, UNIFI was again a petitioner to the Commerce Department and the ITC alleging dumping of polyester textured yarn in the U.S. market from the Subject Countries.

In December 2020, the ITC made affirmative determinations in its preliminary phase of antidumping duty investigations concerning polyester textured yarn from the Subject Countries. In May 2021, the Commerce Department announced preliminary antidumping duty rates on imports from the Subject Countries. In November 2021, the ITC determined that the U.S. textile industry was materially injured by reason of imports of polyester textured yarn from the Subject Countries, and in December 2021, the Commerce Department issued unanimous final antidumping duty orders on such imports. The applicable rates for the applicable countries range as follows: Indonesia, 7% to 26%; Malaysia, 8%; Thailand, 14% to 56%; and Vietnam, 2% to 22%.

While the ultimate short-term and long-term impacts of these duties are not yet known, UNIFI expects these countervailing and antidumping duty rates to play a significant role in helping to normalize the competitive position of UNIFI’s yarns in the U.S. market against the respective imported yarns.

Competition

The industry in which UNIFI operates is global and highly competitive.  UNIFI competes not only as a global yarn producer, but also as part of a regional supply chain for certain textile products.  For sales of Compliant Yarns, UNIFI competes with a limited number of foreign and domestic producers of polyester and nylon yarns.  For sales of non-Compliant Yarns, UNIFI competes with a larger number of foreign and domestic producers of polyester and nylon yarns that can meet the required customer specifications of quality, reliability, and timeliness. UNIFI is affected by imported textile, apparel, and hosiery products, which adversely impact demand for UNIFI’s polyester and nylon products in certain of its markets.  Several foreign competitors have significant advantages, including lower wages, raw material costs and capital costs and favorable foreign currency exchange rates against the U.S. Dollar (“USD”), any of which could make UNIFI’s products, or the related supply chains, less competitive. While competitors have traditionally focused on high-volume commodity products, they are now increasingly focused on specialty products that UNIFI historically has been able to leverage to generate higher margins.

UNIFI’s major competitors in the Americas region for polyester yarns are Aquafil O'Mara; United Textiles of America S.de R.L. de C.V.; NanYa Plastics Corp. of America (“NanYa”); AKRA, S.A. de C.V.; and C S Central America S.A. de C.V.

UNIFI’s major competitor in Brazil is Petroquimica Suape (Companhia Petroquimica de Pernambuco or PQS), among other traders of imported yarns and fibers.

UNIFI’s operations in Asia face competition from multiple yarn manufacturers in that region and identification of them is not feasible. However, much of our portfolio in the Asia region is advantaged by specialty and recycled products and a global sourcing and support model that assists in differentiation.

UNIFI’s major competitors for nylon yarn sales in the U.S. are Sapona Manufacturing Company, Inc. and McMichael Mills, Inc.

Globally, competitors for our REPREVE products include recycled brands from Far Eastern New Century, Tiejin, Radici, and Polygenta.

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Raw Materials, Suppliers and Sourcing

The primary raw material supplier for the Americas Segment of virgin Chip and POY is NanYa.  For the Brazil Segment, Reliance Industries, Ltd. is the primary supplier of POY.  The primary suppliers of nylon raw materials for the Americas Segment are U.N.F. Industries Ltd. (“UNF”); UNF America, LLC (“UNFA”); The LYCRA Company; and Nilit.  Each of UNF and UNFA is a joint venture owned 50% by UNIFI.  Currently, there are multiple domestic and foreign suppliers available to fulfill UNIFI’s sourcing requirements for its recycled products. The majority of plastic bottles we utilize in the U.S. are obtained in open-market transactions from various entities throughout the U.S., while our Asian subsidiaries source recycled materials from various countries and entities throughout Asia.

For its operations in the U.S., UNIFI produces and buys certain of its raw material fibers for Compliant Yarns from a variety of sources in both the U.S. and Israel, and UNIFI produces a portion of its Chip requirements in its REPREVE Recycling Center and purchases the remainder of such requirements from external suppliers for use in its domestic spinning facility to produce POY.  In addition, UNIFI purchases nylon and polyester products for resale from various suppliers.  Although UNIFI does not generally have difficulty obtaining its raw material requirements, UNIFI has, in the past, experienced interruptions or limitations in the supply of certain raw materials.

UNIFI’s bottle processing facility in Reidsville, North Carolina provides a high-quality source of Flake for the REPREVE Recycling Center as well as for sale to external parties. Combined with recent technology advancements in recycling, we believe the Flake produced at the bottle processing facility enhances our ability to grow REPREVE into other markets, such as nonwovens, carpet fiber, and packaging.  

The prices of the principal raw materials used by UNIFI continuously fluctuate, and it is difficult or impossible to predict trends or upcoming developments.  During fiscal 2020 and 2021, UNIFI operated in a predominantly decreasing polyester raw material cost environment.  During fiscal 2022, UNIFI operated in a predominantly increasing polyester raw material cost environment.

We consider the raw material price decreases during most of fiscal 2020 and fiscal 2021 to be the result of a decline in global demand, while increasing raw material prices during the second half of fiscal 2021 and most of fiscal 2022 appeared to reflect global demand rebounds and inflationary pressures. The continuing volatility in global crude oil prices is likely to impact UNIFI’s polyester and nylon raw material costs, but it is not possible to predict the timing or amount of the impact or whether the movement in crude oil prices will stabilize, increase, or decrease. In any event, UNIFI monitors these dynamic factors closely and does not currently engage in hedges of polyester or nylon raw materials.  

Products, Technologies and Related Markets

Our virgin and recycled products sold across all geographies range from specialty, value-added to commodity. We provide products to a variety of end-use markets, principally apparel, industrial, furnishings, and automotive. We report our recycled portion of consolidated sales via our REPREVE Fiber metric, which comprised 31%, 37%, and 36%, or $186,141, $245,832 and $293,080 of consolidated sales for fiscal 2020, 2021, and 2022, respectively.

We estimate consolidated net sales for fiscal 2022 were distributed across our primary end markets as listed below.

• Apparel (including hosiery and footwear) represented approximately 70% of net sales.  Apparel retail sales, supply chain inventory levels, and the strength of the regional supply base are vital to this market.

• Industrial represented approximately 9% of net sales. This market includes medical, belting, tapes, filtration, ropes, protective fabrics, and awnings.

• Furnishings (including both contract and home furnishings) represented approximately 8% of net sales.  Furnishings sales are largely dependent upon the housing market, which, in turn, is influenced by consumer confidence and credit availability.

• Automotive represented approximately 5% of net sales and has traditionally been less susceptible to import penetration because of the exacting specifications and quality requirements often imposed on manufacturers of automotive fabrics, along with just-in-time delivery requirements.

• All other markets represented approximately 8% of our consolidated net sales.

UNIFI also adds value to the overall supply chain for textile products and increases consumer demand for UNIFI’s own products through the development and introduction of branded yarns and technologies that provide unique sustainability, performance, comfort and aesthetic advantages.  UNIFI’s branded portion of its yarn portfolio continues to provide product differentiation to brand partners, mills, and consumers. UNIFI’s branded yarns can be found in a variety of products of well-known international brands, retailers, and department stores.

In addition to the above brands and products, UNIFI combines its research and development efforts with the demands of customers and markets to develop innovative technologies that enhance yarn characteristics. Application of these technologies allows for various, separate benefits, including: water repellency, flame retardation, soil release, enhanced color-fastness achieved with less water use, and protection from ultra-violet rays, among other attributes.

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Customers

UNIFI’s Americas Segment, Brazil Segment and Asia Segment serve approximately 550, 400, and 800 customers, respectively, all in a variety of geographic markets. UNIFI’s products are manufactured according to customer specifications and are shipped based upon customer order requirements.  Customer payment terms are generally consistent with prevailing industry practices for the geographies in which we participate.

UNIFI’s consolidated net sales are not materially dependent on a single direct customer and no single direct customer accounts for 10% or more of UNIFI’s consolidated net sales. UNIFI’s top 10 direct customers accounted for approximately 24% of consolidated net sales for fiscal 2022 and approximately 34% of receivables as of July 3, 2022.  However, UNIFI’s consolidated net sales are dependent on demand from a relatively small number of brand partners.  

Sales and Marketing

UNIFI employs an internal sales force of approximately 50 persons operating out of sales offices primarily in the U.S., Brazil, China, El Salvador, Colombia, Turkey, and Europe.  UNIFI also relies on independent sales agents for sales in several other countries.  UNIFI seeks to create strong customer relationships and to build and strengthen those relationships throughout the supply chain.  Through frequent communications with customers, partnering in product development, and engaging key downstream brands and retailers, UNIFI has created significant pull-through sales and brand recognition for its products.  For example, UNIFI works with brands and retailers to educate and create demand for its products, including recent engagements involving REPREVE at multiple events and venues in the U.S.  UNIFI then works with key fabric mill partners to develop specific fabrics for those brands and retailers utilizing UNIFI products.  In many of these regards, UNIFI draws upon and integrates the resources of its research and development personnel.  In addition, UNIFI is enhancing co-branding activations with integrated point-of-sale and online marketing with popular brands and retailers to further enable consumers to find REPREVE and other performance technology products in multiple retail channels.  Based on the establishment of many commercial and branded programs, this strategy has been successful for UNIFI.

Product Customization and Manufacturing Processes

UNIFI uses advanced production processes to manufacture its high-quality products cost-effectively in North America, Central America, and Brazil and transfers relevant technical knowledge to its asset light operations in Asia for manufacture with trusted supply chain partners.  UNIFI believes that its flexibility and know-how in producing specialty recycled and synthetic products provide important development and commercialization advantages, in addition to the recent ability to vertically integrate with post-industrial and post-consumer materials.

UNIFI produces Flake, Chip, and POY using recycled materials. In addition to its yarns manufactured from virgin polyester and nylon, UNIFI sells its recycled products externally or further processes them internally to add value for customers seeking recycled components. The REPREVE Bottle Processing Center in Reidsville, North Carolina produces Flake that can be sold externally or further processed internally at our REPREVE Recycling Center in Yadkinville, North Carolina. Recycled polyester Chip output from the REPREVE Recycling Center can be sold externally or further processed internally into polyester POY.

Additional processing of UNIFI’s polyester POY includes texturing, dyeing, twisting, beaming, draw winding, and covering.  The texturing process, involves the use of high-speed machines to draw, heat, and false-twist POY to produce yarn with different physical characteristics, depending on its ultimate end use.  Texturing gives the yarn greater bulk, strength, stretch, consistent dye-ability, and a softer feel, thereby making it suitable for use in the knitting and weaving of fabric.  Solution dyeing and package dyeing allow for matching of customer-specific color requirements for yarns sold into various markets.  Twisting incorporates real twist into filament yarns, which can be sold for a variety of uses, such as sewing thread, home furnishings, and apparel.  Beaming places both textured and covered yarns onto beams to be used by customers in warp knitting and weaving applications.  The draw winding process utilizes heat and draws POY to produce mid-tenacity, flat yarns. Lastly, covering operations utilize a spandex core to produce yarns with more stretch, compression, or comfort.

UNIFI’s subsidiaries in Asia offer the same high-quality and innovative products and technologies through contract manufacturing arrangements with local manufacturers. This asset-light model allows for seamless integration of our products into the global supply chain of our customers. As we expand our Asian operations to meet the needs of our global customers, we will continue to leverage the asset-light model where the existing infrastructure can accommodate our highly technical processes, while continually evaluating the need for additional UNIFI assets in response to ever-changing market dynamics.

Research and Development

UNIFI employs approximately 140 persons, primarily in the U.S., who work closely with UNIFI’s customers, brand partners, and others to develop a variety of new yarns as well as improvements to the performance properties of existing yarns and fabrics. Among other things, UNIFI evaluates trends and uses the latest technology to create innovative yarns that meet the needs of evolving consumer preferences.  Most of UNIFI’s branded yarns, including its flagship REPREVE brand, were derived from its research and development initiatives.

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UNIFI also includes, as part of its research and development initiatives, the use of continuous improvement methodologies to increase its manufacturing and other operational efficiencies, both to enhance product quality and to derive cost savings.  

For fiscal 2022, 2021, and 2020, UNIFI incurred $12,103, $11,483, and $11,257, respectively, in costs for research and development (including salaries and benefits of the personnel involved in those efforts).

Intellectual Property

UNIFI has numerous trademarks registered in the U.S. and in other countries and jurisdictions around the world.  Due to its current brand recognition and potential growth opportunities, UNIFI believes that its portfolio of registered REPREVE trademarks is its most significant trademark asset.  Ownership rights in registered trademarks typically do not expire if the trademarks are continued in use and properly protected under applicable law.

UNIFI licenses certain trademarks, including Dacron^® and Softec™, from Invista S.a.r.l. (“INVISTA”).

UNIFI also employs its innovative manufacturing know-how, methods and processes to produce and deliver proprietary solutions to customers and brand partners.  UNIFI relies on the copyright and trade secret laws of the U.S. and other countries, as well as nondisclosure and confidentiality agreements, to protect these rights.

Human Capital (not presented in thousands)

As of July 3, 2022, UNIFI had approximately 3,100 employees, which includes approximately 300 individuals working under temporary labor contracts.  The number of employees in each of the Americas, Brazil, and Asia Segments and the corporate office were approximately 2,270, 630, 90, and 110, respectively, at July 3, 2022.  While employees of our Brazil Segment are unionized, none of the labor forces employed by UNIFI’s domestic or other foreign subsidiaries are currently covered by a collective bargaining agreement.  UNIFI believes the Company has a good relationship with its employees.

We believe in the importance of the retention, growth, and development of our employees. UNIFI endeavors to offer competitive compensation and benefits packages to our employees, as well as professional development opportunities to cultivate talent throughout the organization. We are focused on employee health and safety initiatives and have implemented protocols during the COVID-19 pandemic to enhance workplace safety. We also value people and ideas from varying backgrounds and are constantly striving to create a more diverse workforce and inclusive organization.

Geographic Data

Geographic information reported in conformance with U.S. generally accepted accounting principles (“GAAP”) is included in Note 24, “Business Segment Information,” to the accompanying consolidated financial statements.  Information regarding risks attendant to UNIFI’s foreign operations is included in “Item 1A. Risk Factors” in this Annual Report.

Seasonality

UNIFI is not significantly impacted by seasonality; however, UNIFI typically experiences its highest sales volumes in the fourth quarter of its fiscal years.  Excluding the effects of fiscal years with 53 weeks rather than 52 weeks, the most significant effects on UNIFI’s results of operations for particular periods during a year are due to planned manufacturing shutdowns by either UNIFI or its customers for certain holiday or traditional shutdown periods.

Backlog

UNIFI’s level of unfilled orders is affected by many factors, including the timing of specific orders and the delivery time for specific products, as well as a customer’s ability or inability to cancel the related order.  As such, UNIFI does not consider the amount of unfilled orders, or backlog, to be a meaningful indicator of expected levels of future sales or to be material to an understanding of UNIFI’s business as a whole.

Working Capital

UNIFI funds its working capital requirements through cash flows generated from operations, along with short-term borrowings, as needed.  For more detailed information, see “Liquidity and Capital Resources” in “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations” in this Annual Report.

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Inflation

Prior to fiscal 2021, UNIFI’s input costs had experienced steady and predictable increases. However, in calendar 2021 and 2022, UNIFI, along with many other textile manufacturers and a range of other industries, began to experience above-average inflationary pressures on a range of input costs, including but not limited to labor, freight, energy, and raw materials. Accordingly, we began implementing responsive selling price adjustments during both fiscal 2021 and 2022 to protect gross margins. While our selling price adjustments have thus far been successful at mitigating much of the inflationary pressure that has occurred, further significant fluctuations in input costs may not be immediately recoverable via selling price adjustments and our gross margins could suffer. However, we monitor our input costs closely, and we expect to maintain our ability to respond quickly to cost fluctuations to minimize any potential adverse impacts to earnings.

Beyond the current inflationary environment experienced in fiscal 2022, UNIFI expects that costs could continue to rise long term for certain consumables used to produce and ship its products, as well as for its utilities and labor. UNIFI expects to mitigate the impacts of such rising costs through increased operational efficiencies and increased selling prices, but rising inflation could be a factor that negatively impacts UNIFI’s profitability.

Environmental Matters

UNIFI is subject to various federal, state, and local environmental laws and regulations limiting the use, storage, handling, release, discharge, and disposal of a variety of hazardous substances and wastes used in or resulting from its operations (and to potential remediation obligations thereunder).  These laws include the Federal Water Pollution Control Act, the Clean Air Act, the Resource Conservation and Recovery Act (including provisions relating to underground storage tanks), the Comprehensive Environmental Response, Compensation, and Liability Act, commonly referred to as “Superfund” or “CERCLA” and various state counterparts to such laws.  UNIFI’s operations are also governed by laws and regulations relating to workplace safety and worker health, principally the Occupational Safety and Health Act and regulations issued thereunder, which, among other things, establish exposure standards regarding hazardous materials and noise standards and regulate the use of hazardous chemicals in the workplace.

UNIFI believes that it has obtained, and is in compliance in all material respects with, all significant permits required to be issued by federal, state, or local law in connection with the operation of its business.  UNIFI also believes that the operation of its production facilities and its disposal of waste materials are substantially in compliance with applicable federal, state, and local laws and regulations, and that there are no material ongoing or anticipated capital expenditures associated with environmental control facilities necessary to remain in compliance with such provisions.  UNIFI incurs normal operating costs associated with the discharge of materials into the environment but does not believe that these costs are material or inconsistent with those of its domestic competitors.

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 (“Kinston”) from 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. At this time, UNIFI does not expect any active site remediation will be required but expects that any costs associated with active site remediation, if ever required, would likely be immaterial.

Joint Ventures and Unconsolidated Affiliates

UNIFI participates in two joint ventures that supply raw materials to the Americas Segment, one located in the U.S. and one in Israel.  As of July 3, 2022, UNIFI had $2,072 recorded for these investments in unconsolidated affiliates. Other information regarding UNIFI’s unconsolidated affiliates is provided in “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations” and in Note 10, “Other Non-Current Assets” under the subheading “Investments in Unconsolidated Affiliates and Variable Interest Entities,” to the accompanying consolidated financial statements.

During fiscal 2020, UNIFI and Parkdale finalized negotiations to sell UNIFI’s PAL Investment to Parkdale for $60,000. The transaction closed on April 29, 2020, and UNIFI received $60,000 in cash.

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Available Information

UNIFI’s website is www.unifi.com.  Our Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and all amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), as well as proxy statements and other information we file with, or furnish to, the SEC are available free of charge on our website. We make these documents available as soon as reasonably practicable after we electronically transmit them to the SEC. Except as otherwise stated in these documents, the information on our website is not a part of this Annual Report and is not incorporated by reference in this Annual Report or any of our other filings with the SEC. In addition, many of our corporate governance documents are available on our website, including our: Audit Committee Charter, Compensation Committee Charter, Corporate Governance and Nominating Committee Charter, Corporate Governance Guidelines, Code of Business Conduct and Ethics, Ethical Business Conduct Policy Statement, and Code of Ethics for Senior Financial and Executive Officers.  Copies of such materials, as well as any of our SEC reports and all amendments thereto, may also be obtained without charge by writing to Unifi, Inc., 7201 West Friendly Avenue, Greensboro, North Carolina 27410, Attention: Corporate Secretary.

Item 1A. Risk Factors

Many of the factors that affect UNIFI’s business and operations involve risk and uncertainty. The factors described below are some of the risks that could materially negatively affect UNIFI’s business, financial condition, results of operations, and cash flows. You should consider all such risks in evaluating UNIFI or making any investment decision involving UNIFI.

Strategic Risks

UNIFI faces intense competition from a number of domestic and foreign yarn producers and importers of foreign-sourced fabric, apparel, and other textile products. Because UNIFI and the supply chains in which UNIFI conducts its business do not typically operate on the basis of long-term contracts with textile customers or brand partners, these competitive factors could cause UNIFI’s customers or brand partners to shift rapidly to other producers.

UNIFI competes not only against domestic and foreign yarn producers, but also against importers of foreign-sourced fabric, apparel, and other textile products into the U.S. and other countries in which UNIFI does business, particularly in Brazil with respect to commodity yarn products. The primary competitive factors in the textile industry include price, quality, product styling, performance attributes and differentiation, brand reputation, flexibility and location of production and finishing, delivery time, and customer service. The needs of certain customers and brand partners and the characteristics of particular products determine the relative importance of these various factors. A large number of UNIFI’s foreign competitors have significant competitive advantages that may include lower labor and raw material costs, production facilities in locations outside UNIFI’s existing supply chain, government subsidies, and favorable foreign currency exchange rates against the USD. If any of these advantages increase, if new and/or larger competitors emerge in the future, or if UNIFI’s brand reputation is detrimentally impacted, UNIFI’s products could become less competitive, and its sales and profits may decrease as a result. In particular, devaluation of the Chinese currency against the USD could result in UNIFI’s products becoming less competitive from a pricing standpoint and/or could result in the NACA region losing market share to Chinese imports, thereby adversely impacting UNIFI’s sales and profits.  While these foreign competitors have traditionally focused on commodity production, they are now increasingly focused on value-added products. UNIFI may not be able to continue to compete effectively with foreign-made textile and apparel products, which would materially adversely affect its business, financial condition, results of operations or cash flows.  Similarly, to maximize their own supply chain efficiency, customers and brand partners sometimes request that UNIFI’s products be produced and sourced from specific geographic locations that are in close proximity to the customer’s fabric mills or that have other desirable attributes from the customer’s perspective.  These locations are sometimes situated outside the footprint of UNIFI’s existing global supply chain. If UNIFI is unable to move production based on customer requests or other shifts in regional demand, we may lose sales and experience an adverse effect on our business, financial condition, results of operations, or cash flows.

A significant portion of our sales is dependent upon demand from a few large brand partners.

UNIFI’s strategy involves the sale of products and solutions to other yarn manufacturers and knitters and weavers (UNIFI’s direct customers) that produce yarn and/or fabric for brands and retailers in 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.”  Although we generally do not derive revenue directly from our brand partners, sales volumes to our direct customers are linked with demand from our brand partners because our direct sales generally form a part of our brand partners’ supply chains.  A significant portion of our overall sales is tied to ongoing programs for a limited number of brand partners.  Our future operating results depend on both the success of our largest brand partners and on our success in diversifying our products and our indirect customer base.  Because we typically do not operate on the basis of long-term contracts, our customers and brand partners can cease incorporating our products into their own with little notice to us and with little or no penalty.  The loss of a large brand partner, and the failure to add new customers to replace the corresponding lost sales, would have a material adverse effect on our business, financial condition, results of operations, and cash flows.  

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Significant price volatility of UNIFI’s raw materials and rising energy costs may result in increased production costs.  UNIFI attempts to pass such increases in production costs on to its customers through responsive price increases.  However, any such price increases are effective only after a time lag that may span one or more quarters, during which UNIFI and its margins are negatively affected.

Petroleum-based chemicals and recycled plastic bottles comprise a significant portion of UNIFI’s raw materials. The prices for these products and related energy costs are volatile and dependent on global supply and demand dynamics, including geo-political risks.  While UNIFI enters into raw material supply agreements from time to time, these agreements typically provide index pricing based on quoted market prices. Therefore, supply agreements provide only limited protection against price volatility. UNIFI attempts to pass on to its customers increases in raw material costs, but at times it cannot. When it can, there is typically a time lag that adversely affects UNIFI and its margins during one or more quarters.  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 certain raw materials in the prior quarter.  Pricing adjustments for other customers must be negotiated independently.  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.  UNIFI has lost in the past (and expects that it may lose in the future) customers to its competitors as a result of price increases. In addition, competitors may be able to obtain raw materials at a lower cost due to market regulations that favor local producers in certain foreign locations where UNIFI operates, and certain other market regulations that favor UNIFI over other producers may be amended or repealed. Additionally, inflation can have a long-term impact by increasing the costs of materials, labor and/or energy, any of which costs may adversely impact UNIFI’s ability to maintain satisfactory margins. If UNIFI is not able to pass on such cost increases to customers in a timely manner (or if it loses a large number of customers to competitors as a result of price increases), the result could be material and adverse to its business, financial condition, results of operations, or cash flows.

Depending on the price volatility of petroleum-based inputs, recycled bottles, and other raw materials, the price gap between virgin chip and recycled chip could make virgin raw materials more cost-effective than recycled raw materials, which could result in an adverse effect on UNIFI’s ability to sell its REPREVE brand recycled products profitably.

The success of UNIFI’s business is tied to the strength and reputation of its brands. If the reputation of one or more of our brands erodes significantly, it could have a material impact on our financial results.

UNIFI has invested heavily in branding and marketing initiatives, and certain of our brands, particularly our REPREVE brand, have widespread recognition.  Our financial success is directly dependent on the success of our brands.  The success of a brand can suffer if our marketing plans or product initiatives do not have the desired impact on a brand’s image or its ability to attract consumers.  Our financial results could also be negatively impacted if one of our brands suffers substantial harm to its reputation due to a product recall, product-related litigation, the sale of counterfeit products, or other circumstances that tarnish the qualities and values represented by our brands.  Part of our strategy also includes the license of our trademarks to brand partners, customers, independent contractors, and other third parties.  For example, we license our REPREVE trademarks to brand partners that feature this trademark on their marketing materials as part of a co-branded environmental sustainability product narrative.  Although we make concerted efforts to protect our brands through quality control mechanisms and contractual obligations imposed on our licensees, there is a risk that some licensees might not be in full compliance with those mechanisms and obligations.  If the reputation of one or more of our brands is significantly eroded, it could adversely affect our sales, results of operations, cash flows, and/or financial condition.

UNIFI’s future success will depend in part on its ability to protect and preserve its intellectual property rights, and UNIFI’s inability to enforce these rights could cause it to lose sales, reduce any competitive advantage it has developed or otherwise harm its business.

UNIFI’s future success depends in part on its ability to protect and preserve its rights in the trademarks and other intellectual property it owns or licenses, including its proprietary know-how, methods and processes. UNIFI relies on the trademark, copyright, and trade secret laws of the U.S. and other countries, as well as nondisclosure and confidentiality agreements, to protect its intellectual property rights. However, UNIFI may be unable to prevent third parties, employees, or contractors from using its intellectual property without authorization, breaching nondisclosure or confidentiality agreements, or independently developing technology that is similar to UNIFI’s. The use of UNIFI’s intellectual property by others without authorization may cause it to lose sales, reduce any competitive advantage UNIFI has developed, or otherwise harm its business.

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Financial Risks

UNIFI has significant foreign operations, and its consolidated results of operations and business may be adversely affected by the risks associated with doing business in foreign locations, including the risk of fluctuations in foreign currency exchange rates.

UNIFI has foreign operations in Brazil, China, Colombia, El Salvador, and Turkey and participates in joint ventures located in Israel.  In addition, to help service its customers, UNIFI from time to time engages with third-party independent contractors to provide sales and distribution, manufacturing, and other operational and administrative support services in locations around the world. UNIFI serves customers throughout the Americas and Asia, as well as various countries in Europe. UNIFI’s foreign operations are subject to certain political, tax, economic, and other uncertainties not encountered by its domestic operations that can materially impact UNIFI’s supply chains or other aspects of its foreign operations. The risks of international operations include trade barriers, duties, exchange controls, national and regional labor strikes, social and political unrest, general economic risks, compliance with a variety of foreign laws (including tax laws), the difficulty of enforcing agreements and collecting receivables through foreign legal systems, taxes on distributions or deemed distributions to UNIFI or any of its U.S. subsidiaries, maintenance of minimum capital requirements, and import and export controls. UNIFI’s consolidated results of operations and business could be adversely affected as a result of a significant adverse development with respect to any of these risks.

Through its foreign operations, UNIFI is also exposed to foreign currency exchange rate fluctuations. Fluctuations in foreign currency exchange rates will impact period-to-period comparisons of UNIFI’s reported results. Additionally, UNIFI operates in countries with foreign exchange controls. These controls may limit UNIFI’s ability to transfer funds from its international operations and joint ventures or otherwise to convert local currencies into USDs. These limitations could adversely affect UNIFI’s ability to access cash from its foreign operations.

In addition, due to its foreign operations, a risk exists that UNIFI’s employees, contractors, or agents could engage in business practices prohibited by U.S. laws and regulations applicable to the Company, such as the Foreign Corrupt Practices Act or the anti-bribery and corruption laws and regulations of other countries in which we do business.  UNIFI maintains policies prohibiting these practices but remains subject to the risk that one or more of its employees, contractors, or agents, specifically ones based in or from countries where such practices are customary, will engage in business practices in violation of these laws and regulations.  Any such violations, even if in breach of UNIFI’s policies, could adversely affect its business or financial performance.

UNIFI may be subject to greater tax liabilities.

UNIFI is subject to income tax and other taxes in the U.S. and in numerous foreign jurisdictions. UNIFI’s domestic and foreign income tax liabilities are dependent on the jurisdictions in which profits are determined to be earned and taxed. Additionally, the amount of taxes paid is subject to UNIFI’s interpretation of applicable tax laws in the jurisdictions in which we operate. Changes in tax laws including further regulatory developments arising from U.S. tax reform legislation, judicial interpretations in the jurisdictions in which we operate, and multi-jurisdictional changes enacted in response to the action items provided by the Organization for Economic Co-operation and Development could have an adverse effect on UNIFI’s business, financial condition, operating results, and cash flows. Significant judgment, knowledge, and experience are required in determining our worldwide provision for income taxes.

UNIFI requires cash to service its indebtedness and to fund capital expenditures and strategic initiatives, and its ability to generate sufficient cash for those purposes depends on many factors beyond its control.

UNIFI’s principal sources of liquidity are cash flows generated from operations and borrowings under its credit facility. UNIFI’s ability to make payments on its indebtedness and to fund planned capital expenditures and strategic initiatives will depend on its ability to generate future cash flows from operations. This ability, to a certain extent, is subject to general economic, financial, competitive, legislative, regulatory, and other factors that are beyond UNIFI’s control. The business may not generate sufficient cash flows from operations, and future borrowings may not be available to UNIFI in amounts sufficient to enable UNIFI to pay its indebtedness and to fund its other liquidity needs. Any such development would have a material adverse effect on UNIFI.

Operational Risks

UNIFI depends on limited sources for certain of its raw materials, and interruptions in supply could increase its costs of production, cause production inefficiencies, or lead to a halt in production.

UNIFI depends on a limited number of third parties for certain raw material supplies, such as POY, Chip, dyes, and chemicals. Although alternative sources of raw materials exist, UNIFI may not be able to obtain adequate supplies of such materials on acceptable terms, or at all, from other sources. UNIFI is dependent on USMCA/NAFTA, CAFTA-DR, and Berry Amendment qualified suppliers of raw materials for the production of Compliant Yarns. These suppliers are also at risk with their raw material supply chains. Any significant disruption or curtailment in the supply of any of its raw materials could cause UNIFI to reduce or cease its production for an extended period, or require UNIFI to increase its pricing, any of which could have a material adverse effect on its business, financial condition, results of operations, or cash flows.

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A disruption at one of our facilities could harm our business and result in significant losses, lead to a decline in sales, and increase our costs and expenses.

Our operations and business could be disrupted by natural disasters, industrial accidents, power or water shortages, extreme weather conditions, pandemics, and other man-made disasters or catastrophic events.  We carry commercial property damage and business interruption insurance against various risks, with limits we deem adequate, for reimbursement for damage to our fixed assets and resulting disruption of our operations.  However, the occurrence of any of these business disruptions could harm our business and result in significant losses, lead to a decline in sales and increase our costs and expenses.  Any disruptions from these events could require substantial expenditures and recovery time to resume operations and could also have a material adverse effect on our operations and financial results to the extent losses are uninsured or exceed insurance recoveries and to the extent that such disruptions adversely impact our relationships with our customers.

Our business and operations could suffer in the event of cybersecurity breaches.

Attempts to gain unauthorized access to our information technology systems have become increasingly more sophisticated over time. These attempts, which might be related to industrial or other espionage, include covertly introducing malware to our computers and networks and impersonating authorized users, among others. We seek to detect and investigate all security incidents and to prevent their recurrence, but in some cases we might be unaware of an incident or its magnitude and effects. We carry data protection liability insurance against cyber attacks, with limits we deem adequate for the reimbursement for damage to our computers, equipment, and networks and resulting disruption of our operations. Any disruption from a cyber attack could require substantial expenditures and recovery time in order to fully resume operations and could also have a material adverse effect on our operations and financial results to the extent losses are uninsured or exceed insurance recoveries and to the extent that such disruptions adversely impact our relationships with our customers. We have been a target of cybersecurity attacks in the past and, while such attacks have not resulted in a material impact on our operations, business, or customer relationships, such attacks could in the future.

The theft, unauthorized use or publication of our intellectual property and/or confidential business information could harm our competitive position, reduce the value of our investment in research and development and other strategic initiatives, or otherwise adversely affect our business. To the extent that any cybersecurity breach results in inappropriate disclosure of our customers’ or brand partners’ confidential information, we may incur a liability as a result. In addition, devoting additional resources to the security of our information technology systems in the future could significantly increase the cost of doing business or otherwise adversely impact our financial results.

A decline or change in general economic conditions, political conditions, and/or levels of consumer spending could cause a decline in demand for textile products, including UNIFI’s products.

UNIFI’s products are used in the production of fabric primarily for the apparel, hosiery, home furnishings, automotive, industrial, and other end-use markets. Demand for furniture and other durable goods is often affected significantly by economic conditions that have global or regional industry-wide consequences. Demand for a number of categories of apparel also tends to be tied to economic cycles and customer preferences that affect the textile industry in general. Demand for textile products, therefore, tends to vary with the business cycles of the U.S. and other economies, as well as changes in global trade flows, and economic and political conditions.  Additionally, prolonged economic downturns that negatively impact UNIFI’s results of operations and cash flows could result in future material impairment charges to write-down the carrying value of certain assets, including facilities and equipment, amortizable intangible assets, and equity affiliates.

Changes in consumer spending, customer preferences, fashion trends, and end uses for UNIFI’s products could weaken UNIFI’s competitive position and cause UNIFI’s products to become less competitive, and its sales and profits may decrease as a result.  Additionally, the end-consumer retail and apparel markets may continue to experience difficult conditions characterized by reduced retail traffic and growth in online sales channels, which may cause bankruptcies, store closures, and other transformations for traditional retail enterprises, which could have an adverse effect on UNIFI’s business and financial condition.

Historic trends indicate weakening performance in the nylon sector on a global basis. If further declines are significant in any one year or the cumulative decline over a number of years is significant, the impact could have a material adverse effect on UNIFI’s business, financial condition, results of operations, or cash flows.

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General Risks

Unfavorable changes in trade policies and/or violations of existing trade policies could weaken UNIFI’s competitive position significantly and have a material adverse effect on its business.

A number of markets within the textile industry in which UNIFI sells its products, particularly the apparel, hosiery, and home furnishings markets, are subject to intense foreign competition. Other markets within the textile industry in which UNIFI sells its products may in the future become subject to more intense foreign competition. There are currently a number of trade regulations and duties in place to protect the U.S. textile industry against competition from low-priced foreign producers, such as those in China, India, and Vietnam.  Political and policy-driven influences are subjecting international trade regulations to significant volatility. Future changes in such trade regulations or duties may make the price of UNIFI’s products less attractive than the goods of its competitors or the finished products of a competitor in the supply chain, which could have a material adverse effect on UNIFI’s business, financial condition, results of operations, or cash flows.  Such changes in U.S. import duties might also result in increased indirect costs on items imported to support UNIFI’s domestic operations and/or countervailing or responsive changes applicable to exports of our products outside the U.S.

According to industry experts and trade associations, there has been a significant amount of illegal transshipments of POY and apparel products into the U.S. and into certain other countries in the NACA region in which UNIFI competes. Illegal transshipment involves circumventing duties by falsely claiming that textiles and apparel are products of a particular country of origin (or include yarn of a particular country of origin) to avoid paying higher duties or to receive benefits from regional free trade agreements, such as USMCA/NAFTA and CAFTA-DR. If illegal transshipments are not monitored, and if enforcement is not effective to limit them, these shipments could have a material adverse effect on UNIFI’s business, financial condition, results of operations, or cash flows.

In order to compete effectively, we must attract, retain, and motivate key employees, and our failure to do so could harm our business and our results of operations.

In order to compete effectively, we must attract and retain qualified employees.  Our future operating results and success depend on retaining key personnel and management as well as expanding our technical, sales and marketing, innovation, and administrative support.  The competition for qualified personnel is intense, particularly as it relates to hourly personnel in the domestic communities in which our manufacturing facilities are located.  We cannot be sure that we will be able to attract and retain qualified personnel in the future, which could harm our business and results of operations.

Catastrophic or extraordinary events, including epidemics or pandemics such as the COVID-19 pandemic, could disrupt global economic activity and/or demand and negatively impact our financial performance and results of operations.

The COVID-19 pandemic has negatively impacted the global economy, disrupted consumer spending, and affecting global supply chains. The duration of the COVID-19 pandemic and its long-term impact on our businesses is currently unknown.  

Ongoing containment efforts such as travel bans and restrictions, quarantines, and business shutdowns continue to negatively impact the global economy. Specifically, containment efforts in China have impacted our supply chain, negatively impacting the results of our Asia Segment. The duration of these containment efforts and future impact on our business is difficult to predict.

UNIFI will continue to monitor the COVID-19 pandemic by prioritizing health and safety while delivering on customer demand. However, the COVID-19 pandemic could resurge or another epidemic or pandemic could arise, and, accordingly, we will remain diligent and responsive to ensure the vitality of the organization.

The risks associated with climate change, localized energy management initiatives, and other environmental impacts could negatively affect UNIFI’s business and operations.

UNIFI’s business is susceptible to risks associated with climate change, including, but not limited to, disruptions to our supply chain, which could potentially impact the production and distribution of our products and availability and pricing of raw materials. Increased frequency and intensity of weather events due to climate change could lead to supply chain disruption, energy and resource rationing, or an adverse event at one of our manufacturing facilities or the facilities of our manufacturing partners. Further, the recent energy management initiatives in China temporarily constrained global supply chains and reduced supplier and customer activity. UNIFI remains focused on diversifying our product portfolio and manufacturing footprint while utilizing fewer resources to help address the risks associated with climate change. Nonetheless, the associated risks could adversely impact our results of operations and cash flows.

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Item 1B. Unresolved Staff Comments

None.

Item 2. Properties

The following table contains information about the principal properties owned or leased by UNIFI as of July 3, 2022:

Location	Principal Use	Approx. Total Area (Sq. Ft.)		Owned or Leased
Administrative
Greensboro, North Carolina	Corporate headquarters		121,000	Owned
Americas Segment
Domestic
Yadkinville, North Carolina	Manufacturing facility		261,000	Owned
Yadkinville, North Carolina	Manufacturing facility		212,000	Owned
Yadkinville, North Carolina	Manufacturing facility		812,000	Owned
Yadkinville, North Carolina	Manufacturing facility		413,000	Owned
Yadkinville, North Carolina	Manufacturing facility		147,000	Owned
Yadkinville, North Carolina	Warehouse		400,000	Owned
Yadkinville, North Carolina	Warehouse		120,000	Owned
Yadkinville, North Carolina	Warehouse		217,000	Owned
Yadkinville, North Carolina	Warehouse		61,000	Leased
Yadkinville, North Carolina	Warehouse		82,000	Leased
Reidsville, North Carolina	Manufacturing facility		384,000	Owned
Reidsville, North Carolina	Manufacturing facility		160,000	Owned
Reidsville, North Carolina	Warehouse		80,000	Leased
Madison, North Carolina	Manufacturing facility		947,000	Owned
Madison, North Carolina	Warehouse		31,000	Owned
Ridgeway, Virginia	Warehouse		12,000	Leased
Foreign
Ciudad Arce, El Salvador	Manufacturing facility		132,000	Leased
Ciudad Arce, El Salvador	Warehouse		49,000	Leased
Bogota, Colombia	Manufacturing facility		31,000	Owned
Bogota, Colombia	Sales office		1,000	Leased
Brazil Segment
Foreign
Alfenas, Brazil	Manufacturing facility		355,000	Owned
Alfenas, Brazil	Warehouse		307,000	Owned
Sao Paulo, Brazil	Corporate office		12,000	Leased
Asia Segment
Foreign
Suzhou, China	Sales office		16,000	Leased
Suzhou, China	Warehouse		75,000	Leased
Suzhou, China	Warehouse		59,000	Leased

Management believes all of UNIFI’s operating properties are well maintained and in good condition.  In fiscal 2022, UNIFI’s manufacturing facilities in the Americas Segment operated below capacity for most of the year, in part due to the availability and productivity of labor.  Management does not perceive any capacity constraints in the foreseeable future.

Item 3. 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 4. Mine Safety Disclosures

Not applicable.

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INFORMATION ABOUT OUR EXECUTIVE OFFICERS

The following is a description of the names and ages of the executive officers of the Company, indicating all positions and offices with the Company held by each such person and each person’s principal occupation or employment during the past five years.  Each executive officer of UNIFI is elected by the Board and holds office from the date of election until thereafter removed by the Board.

Edmund M. Ingle – Age: 57 – Mr. Ingle has served as Chief Executive Officer of UNIFI and a member of UNIFI’s Board since June 2020.  From May 2019 to June 2020, he served as Chief Executive Officer of the Recycling group of Indorama Ventures, a world-class chemicals company and a global integrated leader in PET and fibers serving major customers in diversified end-use markets.  From May 2018 to May 2019, he was Chairperson and Chief Executive Officer of Indorama’s Wellman International division.  Prior to that, Mr. Ingle was with UNIFI for approximately 30 years, during which time he held various key leadership positions, including Vice President of Global Corporate Sustainability, Vice President of Supply Chain, General Manager of the Company’s Flake and Chip business, Vice President and General Manager of REPREVE^® Polymers, General Manager of the Company’s Nylon business, and Director of Global Procurement.  

Albert P. Carey – Age: 70 – Mr. Carey has served as Executive Chairman of the Board of UNIFI since April 2019.  Mr. Carey previously served as Non-Executive Chairman of the Board of the Company from January 2019 to March 2019.  In March 2019, Mr. Carey retired from PepsiCo, Inc., a consumer products company, after a 38-year career with the company in which he held a number of senior leadership roles, including Chief Executive Officer of PepsiCo North America from March 2016 to January 2019, Chief Executive Officer of PepsiCo North America Beverages from July 2015 to March 2016, Chief Executive Officer of PepsiCo Americas Beverages from September 2011 to July 2015, and President and Chief Executive Officer of Frito-Lay North America from June 2006 to September 2011.

Craig A. Creaturo – Age: 52 – Mr. Creaturo has served as Executive Vice President & Chief Financial Officer of UNIFI since September 2019.  Mr. Creaturo served as Chief Financial Officer & Vice President-Administration of Chromalox, Inc., an advanced thermal technologies manufacturing company, from February 2015 to March 2019.  Prior to that, he served as Chief Financial Officer of II-VI Incorporated (“II-VI”), a publicly traded global leader in engineered materials and optoelectronic components, from 2004 to 2014, Treasurer of II-VI from 2000 to 2014, and Corporate Controller of II-VI from 1998 to 2000.  From 1992 to 1998, he held a variety of audit roles at Arthur Andersen LLP.  Mr. Creaturo is a Certified Public Accountant in the Commonwealth of Pennsylvania.

Hongjun Ning – Age: 55 – Mr. Ning has served as an Executive Vice President of UNIFI since July 2020, President of Unifi Textiles (Suzhou) Co. Ltd. (“UTSC”) (UNIFI’s subsidiary in China) since March 2020 and President of Unifi Asia Pacific since June 2017.  Previously, he served as Vice President of UTSC from September 2013 to June 2017, Director of Sales & Marketing of UTSC from August 2008 to September 2013, and General Manager, Sales & Marketing of a former UNIFI joint venture in China from January 2006 to August 2008.

Gregory K. Sigmon – Age: 32 – Mr. Sigmon, has served as an Executive Officer of UNIFI since July 2022 and as General Counsel and Corporate Secretary of the Company since June 2020. Previously, Mr. Sigmon served as a Vice President of UNIFI from July 2020 to July 2022 and as Assistant General Counsel of the Company from September 2019 to June 2020. Before joining UNIFI, Mr. Sigmon served as an officer in the legal department of BB&T Corporation in Winston-Salem, North Carolina (“BB&T”), where he was a Vice President from April 2018 to August 2019, an Assistant Vice President from September 2015 to March 2018, and a graduate of BB&T’s Leadership Development Program. Mr. Sigmon is a member of the North Carolina State Bar.

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PART II

Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities

UNIFI’s common stock is listed for trading on the New York Stock Exchange (the “NYSE”) under the symbol “UFI.”  

As of August 26, 2022, there were 125 record holders of UNIFI’s common stock.  A significant number of the outstanding shares of common stock that are beneficially owned by individuals and entities are registered in the name of Cede & Co.  Cede & Co. is a nominee of The Depository Trust Company, a securities depository for banks and brokerage firms.  UNIFI estimates that there are approximately 5,900 beneficial owners of its common stock.

No dividends were paid in the past two fiscal years, and UNIFI does not intend to pay cash dividends in the foreseeable future.  UNIFI’s current debt obligations contain certain restricted payment and restricted investment provisions, including a restriction on the payment of dividends and share repurchases under certain circumstances.  Information regarding UNIFI’s debt obligations is provided in Note 12, “Long-Term Debt,” to the accompanying consolidated financial statements.

Purchases of Equity Securities

On October 31, 2018, UNIFI announced that 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 may be made from time to time in the open market at prevailing market prices, through private transactions, or via 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 July 3, 2022, UNIFI has repurchased 701 shares at an average price of $15.90, leaving $38,859 available for repurchase under the 2018 SRP. UNIFI will continue to evaluate opportunities to use excess cash flows from operations or existing borrowings to repurchase additional stock, while maintaining sufficient liquidity to support its operational needs and to fund future strategic growth opportunities.

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PERFORMANCE GRAPH - SHAREHOLDER RETURN ON COMMON STOCK

The below graphic comparison assumes the investment of $100 in each of UNIFI common stock, the S&P SmallCap 600 Index (a benchmark index containing inclusion characteristics closely associated with UNIFI) and the NYSE Composite Index (a broad equity market index), all at June 23, 2017.  The resulting cumulative total return assumes that dividends, if any, were reinvested. Past performance is not indicative of future performance.

	June 23, 2017		June 22, 2018		June 28, 2019		June 26, 2020		June 25, 2021		July 1, 2022
Unifi, Inc.	$	100.00	$	108.99	$	62.83	$	40.35	$	85.58	$	48.48
S&P SmallCap 600		100.00		122.18		111.94		92.57		162.40		133.82
NYSE Composite		100.00		110.37		117.00		106.70		156.55		140.74

Item 6. Reserved

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Item 7. 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 consolidated financial statements. Management’s discussion and analysis should be read in conjunction with the remainder of this Annual Report, with the understanding that forward-looking statements may be present. A reference to a “note” refers to the accompanying notes to consolidated financial statements.

Strategic Priorities

We believe UNIFI’s underlying performance during recent fiscal years reflects the strength of our global initiative to deliver differentiated solutions to customers and brand partners throughout the world. Our supply chain has been developed and enhanced in multiple regions around the globe, allowing us to deliver a diverse range of fibers and polymers to key customers in the markets we serve, especially apparel. These textile products are supported by quality assurance, product development, product and fabric certifications, hangtags, co-marketing, and technical and customer service teams across UNIFI’s operating subsidiaries. We have developed this successful operating platform by improving operational and business processes and deriving value from sustainability-based initiatives, including polyester and nylon recycling.

We believe that further commercial expansion will require a continued stream of new technology and innovation that generates products with meaningful consumer benefits. Along with our recycled platform, UNIFI has significant yarn technologies that provide optimal performance characteristics for today’s marketplace, including moisture management, temperature moderation, stretch, ultra-violet protection and fire retardation, among others. To achieve further growth, UNIFI remains focused on innovation, bringing to market the next wave of fibers and polymers for tomorrow’s applications. As we invest and grow, sustainability remains at our core. We believe that increasing the awareness for recycled solutions in applications across fibers and polymers and furthering sustainability-based initiatives with like-minded brand partners will be key to our future success. We also believe that our manufacturing processes and our technical knowledge and capabilities will allow us to grow market share and develop new textile programs with new and existing customers. Ultimately, combining leading edge innovation with our prominent, high-quality brand and agile regional business model will allow for underlying sales and profitability growth.

Significant Developments and Trends

During the last five fiscal years, several key drivers affected our financial results. During fiscal 2018 and 2019, our operations in the U.S. were unfavorably impacted by (i) rising raw material costs and (ii) a surge of imported polyester textured yarn that depressed our pricing, market share, and fixed cost absorption. During fiscal 2020, our financial results began to improve following more stable import and raw material cost environments. However, the COVID-19 pandemic had a significant unfavorable impact to product demand and our annual profitability suffered accordingly. Near the end of fiscal 2020, we divested a minority interest investment and significantly improved our liquidity position, supporting business preservation and the ability to better capture long-term growth opportunities. Throughout fiscal 2021, our businesses experienced sequential improvement alongside global demand and economic recovery, and we capitalized on profitable opportunities that fueled strong consolidated results. Throughout fiscal 2022, we experienced adverse pressure from rising input costs and a weakening of labor productivity primarily in our domestic operations. Looking ahead, our operations remain well positioned to capture long-term growth opportunities and we are working to mitigate any potential recession impacts.

Once global economic pressures subside, we believe incremental revenue for the Americas Segment will be generated from both the polyester textured yarn trade petitions, along with continued demand for innovative and sustainable products. The Asia Segment continues to capture demand for recycled products and serves as a significant component of future growth. The Brazil Segment performed extraordinarily well in fiscal 2021 and 2022, and while pricing and margins normalized from near historical levels, the momentum captured in fiscal 2021 and 2022 could provide a new, elevated level of long-term performance for the segment.

The following positive developments and trends occurred or were occurring in fiscal 2022.

• Demand levels for the majority of our business lines experienced significant recovery since the onset of the COVID-19 pandemic.

• Our REPREVE family of products continued to gain momentum with brands, retailers, and mill partners who value sustainability and UNIFI’s ability to produce leading edge products with in-demand technologies.

• Although raw material costs rose throughout fiscal 2022, we have been able to implement cost-responsive selling price adjustments intended to protect our gross profit.

• Our Brazil Segment was able to opportunistically capture market share from competitors and secure favorable pricing levels during the economic recovery in Brazil.

• Our Asia Segment returned to sales growth, driven by demand for REPREVE, generating continued portfolio expansion.

Raw Material and Foreign Currency

Raw material costs represent a significant portion of UNIFI’s manufactured product costs. The prices for the principal raw materials used by UNIFI continually fluctuate, and it is difficult or impossible to predict trends or upcoming developments.

During much of fiscal 2020, the raw material cost environment shifted to be more favorable and reached significantly lower levels during the early weeks of the COVID-19 pandemic.

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The first half of fiscal 2021 included stable, low levels of raw material costs, while economic recovery, weather events, and supply chain challenges generated raw material cost increases during the second half of fiscal 2021 and the first half of fiscal 2022. For the majority of our portfolio, we were able to implement selling price adjustments throughout fiscal 2021 and 2022. However, recycled inputs in the U.S. experienced continued cost increases during fiscal 2022. Despite the selling price increases, we still experienced meaningful gross profit pressure during fiscal 2022, primarily from the U.S. labor shortage and speed at which input costs increased.

The continuing volatility in global crude oil prices is likely to impact UNIFI’s polyester and nylon raw material costs.  While it is not possible to predict the timing or amount of the impact or whether the recent fluctuations in crude oil prices will stabilize, increase or decrease, UNIFI monitors these dynamic factors closely. In addition, 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. 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 certain raw materials in the prior quarter.  Pricing adjustments for other customers must be negotiated independently.  In ordinary market conditions in which raw material cost increases have stabilized and sales volumes are consistent with traditional levels, UNIFI has historically been successful in implementing price adjustments within one or two fiscal quarters of the raw material price increase for all of its customers.

UNIFI is also impacted by significant fluctuations in the value of the Brazilian Real (“BRL”) and the Chinese Renminbi (“RMB”), the local currencies for our operations in Brazil and China, respectively. Appreciation of the BRL and the RMB improves our net sales and gross profit metrics when the results of our subsidiaries are translated into USDs at comparatively favorable rates. However, such strengthening may cause adverse impacts to the value of USDs held in these foreign jurisdictions. UNIFI expects continued volatility in the value of the BRL and the RMB to impact our key performance metrics and actual financial results, although the magnitude of the impact is dependent upon the significance of the volatility, and it is not possible to predict the timing or amount of the impact.

The BRL to USD weighted average exchange rate was 5.21, 5.38, and 4.29 for fiscal 2022, 2021 and 2020, respectively. The RMB to USD weighted average exchange rate was 6.45, 6.60, and 7.03 for fiscal 2022, 2021 and 2020, respectively.

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 (loss) and earnings per share;

• 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 (loss) 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 (Loss), which represents net income (loss) 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 (Loss) 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 other current liabilities; and

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

EBITDA, Adjusted EBITDA, Adjusted Net Income (Loss), 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.

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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 items (a) directly related to our asset base (primarily depreciation and amortization) and/or (b) 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 (Loss) 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.

See “Non-GAAP Reconciliations” below for reconciliations of non-GAAP metrics to the most directly comparable GAAP metric.

Review of Results of Operations for Fiscal 2022, 2021 and 2020

Fiscal 2022 contained 53 weeks and fiscal 2021 and 2020 were each comprised of 52 weeks. The additional week in fiscal 2022 included approximately $8,700 of net sales, an insignificant impact to gross profit, and approximately $400 of selling, general and administrative expenses.

Consolidated Overview

The below tables provide:

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

• a reconciliation from net income (loss) to EBITDA and Adjusted EBITDA, and

• a reconciliation from net income (loss) to Adjusted Net Income (Loss) and Adjusted EPS.

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

Net income (loss)

	Fiscal 2022			% Change			Fiscal 2021			% Change			Fiscal 2020
Net sales	$	815,758			22.2		$	667,592			10.1		$	606,509
Cost of sales		735,273			28.1			574,098			1.2			567,469
Gross profit		80,485			(13.9	)		93,494			139.5			39,040
SG&A expenses		52,489			2.2			51,334			17.2			43,814
(Benefit) provision for bad debts		(445	)		(66.2	)		(1,316	)		(175.7	)		1,739
Other operating (income) expense, net		(158	)		(103.2	)		4,865			110.8			2,308
Operating income (loss)		28,599			(25.9	)		38,611		nm				(8,821	)
Interest expense, net		1,561			(42.6	)		2,720			(33.0	)		4,057
(Earnings) loss from unconsolidated affiliates		(605	)		(18.1	)		(739	)	nm				477
Recovery of non-income taxes, net		815			(108.4	)		(9,717	)	nm				—
Gain on sale of investment in unconsolidated   affiliate		—			—			—		nm				(2,284	)
Impairment of investment in unconsolidated   affiliate		—			—			—		nm				45,194
Income (loss) before income taxes		26,828			(42.1	)		46,347			(182.4	)		(56,265	)
Provision for income taxes		11,657			(32.5	)		17,274		nm				972
Net income (loss)	$	15,171			(47.8	)	$	29,073			(150.8	)	$	(57,237	)

nm – not meaningful

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EBITDA and Adjusted EBITDA (Non-GAAP Measures)

	Fiscal 2022		Fiscal 2021			Fiscal 2020
Net income (loss)	$	15,171	$	29,073		$	(57,237	)
Interest expense, net		1,561		2,720			4,057
Provision for income taxes		11,657		17,274			972
Depreciation and amortization expense (1)		25,986		25,293			23,406
EBITDA		54,375		74,360			(28,802	)
Equity in loss of PAL		—		—			960
EBITDA excluding PAL		54,375		74,360			(27,842	)
Recovery of non-income taxes, net (2)		815		(9,717	)		—
Gain on sale of investment in unconsolidated affiliate (3)		—		—			(2,284	)
Impairment of investment in unconsolidated affiliate (3)		—		—			45,194
Severance (4)		—		—			1,485
Adjusted EBITDA	$	55,190	$	64,643		$	16,553

The reconciliations of the amounts reported under GAAP for Net Income (Loss) to EBITDA and Adjusted EBITDA are as follows. 

(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 fiscal 2021, UNIFI recorded a recovery of non-income taxes of $9,717 related to favorable litigation results for its Brazilian operations, generating overpayments that resulted from excess social program taxes paid in prior fiscal years. For fiscal 2022, UNIFI reduced the estimated benefit based on additional clarity and review of the recovery process during the months following the decision.

(3) In fiscal 2020, UNIFI recorded an impairment charge of $45,194 relating to the April 29, 2020 sale of its 34% interest in PAL. UNIFI’s 34% share of PAL’s loss subsequent to the date of the impairment charge (March 29, 2020) and through the date of transaction closing (April 29, 2020) was $2,284 and generated a gain on sale.

(4) In fiscal 2020, UNIFI incurred certain severance costs in connection with (i) overall cost reduction efforts in the U.S. and (ii) a wind-down plan for its operations in Sri Lanka.

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

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

	For the Fiscal Year Ended July 3, 2022
	Pre-tax Income			Tax Impact			Net Income			Diluted EPS
GAAP results	$	26,828		$	(11,657	)	$	15,171		$	0.80
Recovery of non-income taxes, net (1)		815			(257	)		558			0.03
Recovery of income taxes, net (2)		—			(1,446	)		(1,446	)		(0.07	)
Adjusted results	$	27,643		$	(13,360	)	$	14,283		$	0.76
Weighted average common shares outstanding											18,868
	For the Fiscal Year Ended June 27, 2021
	Pre-tax Income			Tax Impact			Net Income			Diluted EPS
GAAP results	$	46,347		$	(17,274	)	$	29,073		$	1.54
Recovery of non-income taxes, net (1)		(9,717	)		3,304			(6,413	)		(0.34	)
Adjusted results	$	36,630		$	(13,970	)	$	22,660		$	1.20
Weighted average common shares outstanding											18,856
	For the Fiscal Year Ended June 28, 2020
	Pre-tax Loss			Tax Impact			Net Loss			Diluted EPS
GAAP results	$	(56,265	)	$	(972	)	$	(57,237	)	$	(3.10	)
Impairment of investment in unconsolidated affiliate (3)		45,194			—			45,194			2.45
Severance (4)		1,485			(312	)		1,173			0.06
Adjusted results	$	(9,586	)	$	(1,284	)	$	(10,870	)	$	(0.59	)
Weighted average common shares outstanding											18,475

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(1) In fiscal 2021, UNIFI recorded a recovery of non-income taxes of $9,717 related to favorable litigation results for its Brazilian operations, generating overpayments that resulted from excess social program taxes paid in prior fiscal years. For fiscal 2022, UNIFI reduced the estimated benefit based on additional clarity and review of the recovery process during the months following the decision.

(2) In fiscal 2022, UNIFI recorded a recovery of income taxes following a Brazil Supreme Court decision regarding certain income taxes paid in prior fiscal years.

(3) In fiscal 2020, UNIFI recorded an impairment charge of $45,194 before tax, related to the April 2020 sale of its 34% interest in PAL.

(4) In fiscal 2020, UNIFI incurred certain severance costs in connection with (i) overall cost reduction efforts in the U.S. and (ii) a wind-down plan for its operations in Sri Lanka.  

Net Sales

Fiscal 2022 vs. Fiscal 2021

Consolidated net sales for fiscal 2022 increased by $148,166, or 22.2%, and consolidated sales volumes increased 2.7%, compared to fiscal 2021. The increases occurred primarily due to (i) higher selling prices in response to increasing raw material costs and (ii) underlying sales growth led by the Asia Segment and REPREVE products.

Consolidated weighted average sales prices increased 19.5%, primarily attributable to higher selling prices in response to increasing raw material costs.

REPREVE Fiber products for fiscal 2022 comprised 36%, or $293,080, of consolidated net sales, down from 37%, or $245,832, for fiscal 2021. The decrease was primarily due to the pandemic lockdowns in China during the fourth quarter of fiscal 2022, reducing recycled product sales for the Asia Segment.

Fiscal 2021 vs. Fiscal 2020

Consolidated net sales for fiscal 2021 increased by $61,083, or 10.1%, and consolidated sales volumes increased 13.5%, compared to fiscal 2020. The increases occurred primarily due to (i) a fiscal 2021 rebound in product demand following the adverse impact of the COVID-19 pandemic on sales volumes in late fiscal 2020, (ii) incremental sales growth for the Asia Segment led by REPREVE branded products, and (iii) opportunistically improved market share and pricing levels in Brazil during demand restoration in that region.

Consolidated average sales prices decreased 3.4%, primarily attributable to (i) a decline in higher-priced nylon product sales and (ii) unfavorable foreign currency translation.

Gross Profit

Fiscal 2022 vs. Fiscal 2021

Gross profit for fiscal 2022 decreased by $13,009, or 13.9%, compared to fiscal 2021. Although we experienced a significant increase in net sales, input cost and labor challenges muted our Americas gross profit, primarily in the last nine months of fiscal 2022.

• For the Americas Segment, gross profit decreased due to higher-than-expected input costs primarily for raw material, labor, packaging, and supplies, along with weaker labor productivity, offsetting the benefit from the restoration of U.S. demand following the negative impact the COVID-19 pandemic had on fiscal 2021.

• For the Brazil Segment, gross profit decreased primarily due to lower volumes and a more normalized market environment in fiscal 2022 following the exceptional performance of the Brazil Segment in fiscal 2021.

• For the Asia Segment, gross profit increased primarily due to higher sales volumes.

Fiscal 2021 vs. Fiscal 2020

Gross profit for fiscal 2021 increased by $54,454, or 139.5%, compared to fiscal 2020.

• For the Americas Segment, gross profit benefited from the restoration of U.S. demand following the worst months of the COVID-19 pandemic and a better sales mix.

• For the Asia Segment, gross profit increased from fiscal 2020 primarily due to (i) higher sales, (ii) supply chain efficiencies driving lower costs for certain products, and (iii) sales mix improvements.

• For the Brazil Segment, gross profit increased from fiscal 2020 primarily due to higher sales volumes and conversion margin due to temporary market share capture, partially offset by unfavorable foreign currency translation impacts.

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SG&A

The changes in SG&A were as follows:

SG&A expenses for fiscal 2020	$	43,814
Net increase in incentive and other compensation expenses		8,474
Other net decreases		(954	)
SG&A expenses for fiscal 2021	$	51,334
SG&A expenses for fiscal 2021	$	51,334
Net increase in marketing expenses		2,007
Other net increases		3,319
Net decrease in incentive and other compensation expenses		(4,171	)
SG&A expenses for fiscal 2022	$	52,489

Fiscal 2022 vs. Fiscal 2021

SG&A increased from fiscal 2021, primarily due to higher discretionary expenses, including marketing, advertising, and travel, partially offset by lower incentive compensation for fiscal 2022.

Fiscal 2021 vs. Fiscal 2020

SG&A increased from fiscal 2020, primarily due to higher incentive compensation in fiscal 2021 in connection with consolidated out-performance. The increase was partially offset by lower discretionary expenses in fiscal 2021 due to COVID-19 pandemic related restrictions and cost control.

(Benefit) Provision for Bad Debts

Fiscal 2022 vs. Fiscal 2021

The provision for bad debts decreased from a benefit of $1,316 in fiscal 2021 to a benefit of $445 in fiscal 2022.  The provision reflected no material activity in fiscal 2022.  Fiscal 2021 reflected lower-than-expected credit losses on outstanding receivables following the adverse effects of the COVID-19 pandemic on customer financial health.

Fiscal 2021 vs. Fiscal 2020

The provision for bad debts decreased from a provision of $1,739 in fiscal 2020 to a benefit of $1,316 in fiscal 2021.  The decrease primarily reflected lower-than-expected credit losses on outstanding receivables following the adverse effects of the COVID-19 pandemic on customer financial health.

Other Operating (Income) Expense, Net

Fiscal 2022 vs. Fiscal 2021

Other operating (income) expense, net was expense of $4,865 in fiscal 2021 and income of $158 in fiscal 2022, which primarily reflects (i) foreign currency transaction gains in fiscal 2022 and such transaction losses in fiscal 2021 and (ii) a predominantly non-cash loss on disposal of assets of $2,809 was recorded in fiscal 2021, primarily relating to the removal of existing texturing machinery to allow for the future installation of new eAFK Evo texturing machinery.

Fiscal 2021 vs. Fiscal 2020

Other operating expense, net was $2,308 in fiscal 2020 and $4,865 in fiscal 2021, which primarily reflects severance expenses and foreign currency transaction losses in both fiscal years, plus, in fiscal 2021, a predominantly non-cash loss on disposal of assets of $2,809 was recorded, primarily relating to the removal of existing texturing machinery to allow for the future installation of new eAFK Evo texturing machinery.

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Interest Expense, Net

Fiscal 2022 vs. Fiscal 2021

Interest expense, net decreased from fiscal 2021 to fiscal 2022. The decrease was attributable to greater interest income in fiscal 2022, primarily generated from foreign cash on deposit.

Fiscal 2021 vs. Fiscal 2020

Interest expense, net decreased from fiscal 2020 to fiscal 2021 primarily as a result of a lower average debt principal during fiscal 2021.

(Earnings) Loss from Unconsolidated Affiliates

The components of (earnings) loss from unconsolidated affiliates are as follows:

	Fiscal 2022			Fiscal 2021			Fiscal 2020
Loss from PAL	$	—		$	—		$	960
Earnings from nylon joint ventures		(605	)		(739	)		(483	)
Total equity in (earnings) loss of unconsolidated affiliates	$	(605	)	$	(739	)	$	477
As a percentage of consolidated income (loss) before income taxes		2.3	%		1.6	%		0.8	%

Fiscal 2022 vs. Fiscal 2021

There was no material activity for fiscal 2021 or fiscal 2022.

Fiscal 2021 vs. Fiscal 2020

On April 29, 2020, UNIFI sold its 34% non-controlling interest in PAL and, accordingly, no earnings from PAL were recorded in fiscal 2021. The earnings from the nylon joint ventures increased from fiscal 2020 to fiscal 2021, primarily due to higher sales and capacity utilization.

Recovery of Non-Income Taxes, Net

Brazilian companies are subject to various taxes on business operations, including turnover taxes used to fund social security and unemployment programs, commonly referred to as PIS/COFINS taxes.  UNIFI, along with numerous other companies in Brazil, challenged the constitutionality of certain state taxes historically included in the PIS/COFINS tax base.

On May 13, 2021, Brazil’s Supreme Federal Court (“SFC”) ruled in favor of taxpayers, and on July 7, 2021, the Brazilian Internal Revenue Service withdrew its existing appeal. Following the SFC decision, the federal government will not issue refunds for these taxes but will instead allow for the overpayments and associated interest to be applied as credits against future PIS/COFINS tax obligations.

There are no limitations or restrictions on UNIFI’s ability to recover the associated overpayment claims as future income is generated. Thus, during fiscal 2021, UNIFI recorded a $9,717 recovery of non-income taxes comprised of an estimate of prior fiscal year PIS/COFINS overpayments of $6,167 and associated interest of $3,550.

During fiscal 2022, UNIFI reduced the estimated recovery by $815 based on additional clarity and the review of the recovery process during the months following the associated SFC decision.

Impairment of Investment in Unconsolidated Affiliate and Gain on Divestiture

As of March 29, 2020, UNIFI owned a 34% interest in the PAL Investment and Parkdale owned the majority 66% interest. In April 2020, UNIFI and Parkdale finalized negotiations to sell the PAL Investment to Parkdale for $60,000 and UNIFI recorded an impairment charge of $45,194 to adjust the PAL Investment to fair value. The transaction closed on April 29, 2020 and UNIFI received $60,000 in cash.

UNIFI’s 34% share of PAL’s loss subsequent to the date of the impairment charge (March 29, 2020) and through the date of transaction closing (April 29, 2020) was $2,284 and generated a gain on divestiture.

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Provision for Income Taxes

The change in consolidated income taxes is as follows:

	Fiscal 2022			Fiscal 2021			Fiscal 2020
Income (loss) before income taxes	$	26,828		$	46,347		$	(56,265	)
Provision for income taxes		11,657			17,274			972
Effective tax rate		43.5	%		37.3	%		(1.7	)%

The effective tax rate is subject to variation due to several factors, including: variability in pre-tax and taxable income; 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.

Fiscal 2022 vs. Fiscal 2021

The increase in the effective tax rate from fiscal 2021 to fiscal 2022 is primarily attributable to (i) an increase in the valuation allowance in fiscal 2022 and (ii) a discrete benefit in fiscal 2021 for the retroactive GILTI high-tax exclusion.  These increases are partially offset by (i) lower U.S. tax on GILTI in in fiscal 2022 and (ii) a discrete benefit in fiscal 2022 related to a favorable Supreme Court ruling in Brazil.

Fiscal 2021 vs. Fiscal 2020

The increase in the effective tax rate from fiscal 2020 to fiscal 2021 is primarily attributable to (i) an impairment charge in fiscal 2020 for which UNIFI does not expect to realize a future benefit, (ii) an increase in foreign earnings taxed at higher rates in fiscal 2021, (iii) a higher rate impact of U.S. tax on GILTI in fiscal 2021, and (iv) the reversal of UNIFI’s permanent reinvestment assertion in fiscal 2021 with regards to certain unrepatriated foreign earnings. This increase is partially offset by a benefit in fiscal 2021 for the retroactive GILTI high-tax exclusion for prior periods.

Net Income (Loss)

Fiscal 2022 vs. Fiscal 2021

Net income for fiscal 2022 was $15,171, or $0.80 per diluted share, compared to net income of $29,073, or $1.54 per diluted share, for fiscal 2021. The decrease in net income was primarily attributable to (i) lower gross profit, (ii) a higher effective tax rate in fiscal 2022, and (iii) the favorable impact of the recovery of non-income taxes in fiscal 2021.

Fiscal 2021 vs. Fiscal 2020

Net income for fiscal 2021 was $29,073, or $1.54 per diluted share, compared to a net loss of $57,237, or $3.10 per diluted share, for fiscal 2020. The increase was primarily attributable to the impairment charge for the PAL Investment sale recorded in fiscal 2020.  Excluding the impairment charge, the increase was attributable to higher gross profit and a recovery of non-income taxes in Brazil in fiscal 2021, partially offset by the fiscal 2021 impacts of (i) higher SG&A, (ii) a higher effective tax rate, and (iii) the loss on the disposal of assets.

Adjusted EBITDA

Adjusted EBITDA decreased from $64,643 for fiscal 2021 to $55,190 for fiscal 2022, consistent with the decrease in gross profit.

Adjusted EBITDA increased from $16,553 for fiscal 2020 to $64,643 for fiscal 2021. The increase was primarily attributable to higher gross profit due to the recovery from the economic impacts of the COVID-19 pandemic, partially offset by the fiscal 2021 impacts of higher SG&A and the loss on the disposal of assets of $2,809.

Adjusted Net Income (Loss)

Adjusted Net Income decreased from $22,660 for fiscal 2021 to $14,283 for fiscal 2022, commensurate with lower gross profit and a higher effective tax rate.

Adjusted Net Income (Loss) increased from $(10,870) for fiscal 2020 to $22,660 for fiscal 2021, following the improvement in Adjusted EBITDA.

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Segment Overview

Following is a discussion and analysis of the revenue and profitability performance of UNIFI’s reportable segments for fiscal 2022, 2021 and 2020.

Americas 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 Americas Segment are as follows:

	Fiscal 2022			% Change			Fiscal 2021			% Change			Fiscal 2020
Net sales	$	483,085			24.9		$	386,779			1.7		$	380,138
Cost of sales		458,617			30.9			350,373			(5.0	)		368,976
Gross profit		24,468			(32.8	)		36,406			226.2			11,162
Depreciation expense		21,153			0.5			21,054			9.2			19,274
Segment Profit	$	45,621			(20.6	)	$	57,460			88.8		$	30,436
Gross margin		5.1	%					9.4	%					2.9	%
Segment margin		9.4	%					14.9	%					8.0	%
Segment net sales as a percentage   of consolidated amount		59.2	%					57.9	%					62.7	%
Segment Profit as a percentage   of consolidated amount		44.2	%					49.6	%					51.0	%

The changes in net sales for the Americas Segment are as follows:

Net sales for fiscal 2020	$	380,138
Increase in sales volumes		3,333
Net change in average selling price and sales mix		3,308
Net sales for fiscal 2021	$	386,779
Net sales for fiscal 2021	$	386,779
Net change in average selling price and sales mix		80,337
Increase due to an additional week of sales in fiscal 2022		8,703
Increase in sales volumes		7,266
Net sales for fiscal 2022	$	483,085

The increase in net sales for the Americas Segment from fiscal 2021 to fiscal 2022 was primarily attributable to (i) higher average selling prices in response to increasing input costs and (ii) an additional week of sales in fiscal 2022.

The increase in net sales for the Americas Segment from fiscal 2020 to fiscal 2021 was primarily attributable to the pandemic recovery that led to a better sales mix and higher sales volumes in fiscal 2021.

The changes in Segment Profit for the Americas Segment are as follows:

Segment Profit for fiscal 2020	$	30,436
Change in underlying margins and sales mix		26,757
Increase in sales volumes		267
Segment Profit for fiscal 2021	$	57,460
Segment Profit for fiscal 2021	$	57,460
Change in underlying margins and sales mix		(12,918	)
Increase in sales volumes		1,079
Segment Profit for fiscal 2022	$	45,621

The decrease in Segment Profit for the Americas Segment from fiscal 2021 to fiscal 2022 was primarily attributable to the adverse impacts of higher input costs outpacing selling price adjustments and weaker labor productivity.

The increase in Segment Profit for the Americas Segment from fiscal 2020 to fiscal 2021 was primarily attributable to the pandemic recovery that led to improved manufacturing productivity and conversion margin.

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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 are as follows:

	Fiscal 2022			% Change			Fiscal 2021			% Change			Fiscal 2020
Net sales	$	126,066			31.4		$	95,976			30.9		$	73,339
Cost of sales		98,925			53.9			64,281			3.4			62,144
Gross profit		27,141			(14.4	)		31,695			183.1			11,195
Depreciation expense		1,500			14.1			1,315			(5.1	)		1,385
Segment Profit	$	28,641			(13.2	)	$	33,010			162.4		$	12,580
Gross margin		21.5	%					33.0	%					15.3	%
Segment margin		22.7	%					34.4	%					17.2	%
Segment net sales as a percentage   of consolidated amount		15.5	%					14.4	%					12.1	%
Segment Profit as a percentage   of consolidated amount		27.8	%					28.5	%					21.1	%

The changes in net sales for the Brazil Segment are as follows:

Net sales for fiscal 2020	$	73,339
Increase in average selling price and change in sales mix		20,459
Increase in sales volumes		17,297
Unfavorable foreign currency translation effects		(15,119	)
Net sales for fiscal 2021	$	95,976
Net sales for fiscal 2021	$	95,976
Increase in average selling price and change in sales mix		26,343
Favorable foreign currency translation effects		2,757
Increase in sales volumes		990
Net sales for fiscal 2022	$	126,066

The increase in net sales for the Brazil Segment from fiscal 2021 to fiscal 2022 was primarily attributable to higher selling prices associated with higher input costs and favorable foreign currency translation effects.

The increase in net sales for the Brazil Segment from fiscal 2020 to fiscal 2021 was primarily attributable to the Brazil Segment’s ability to (i) capture market share from competitors during Brazil’s economic recovery following the most severe impacts of the COVID-19 pandemic and (ii) an increase in selling prices, partially offset by unfavorable foreign currency translation effects.

The changes in Segment Profit for the Brazil Segment are as follows:

Segment Profit for fiscal 2020	$	12,580
Increase in underlying margins		20,318
Increase in sales volumes		2,908
Unfavorable foreign currency translation effects		(2,796	)
Segment Profit for fiscal 2021	$	33,010
Segment Profit for fiscal 2021	$	33,010
Decrease in underlying margins		(5,773	)
Favorable foreign currency translation effects		1,063
Increase in sales volumes		341
Segment Profit for fiscal 2022	$	28,641

The decrease in Segment Profit for the Brazil Segment from fiscal 2021 to fiscal 2022 was primarily attributable to an overall decrease in gross margin following the normalization of the competitive environment in Brazil, which was exceptionally favorable for the Brazil Segment during the fiscal 2021 economic recovery.

The increase in Segment Profit for the Brazil Segment from fiscal 2020 to fiscal 2021 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.

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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 are as follows:

	Fiscal 2022			% Change		Fiscal 2021			% Change		Fiscal 2020
Net sales	$	206,607			11.8	$	184,837			20.8	$	153,032
Cost of sales		177,731			11.5		159,444			16.9		136,349
Gross profit		28,876			13.7		25,393			52.2		16,683
Depreciation expense		—			—		—			—		—
Segment Profit	$	28,876			13.7	$	25,393			52.2	$	16,683
Gross margin		14.0	%				13.7	%				10.9	%
Segment margin		14.0	%				13.7	%				10.9	%
Segment net sales as a percentage   of consolidated amount		25.3	%				27.7	%				25.2	%
Segment Profit as a percentage   of consolidated amount		28.0	%				21.9	%				27.9	%

The changes in net sales for the Asia Segment are as follows:

Net sales for fiscal 2020	$	153,032
Change in average selling price and sales mix		(16,074	)
Net increase in sales volumes		39,320
Favorable foreign currency translation effects		8,559
Net sales for fiscal 2021	$	184,837
Net sales for fiscal 2021	$	184,837
Change in average selling price and sales mix		9,686
Net increase in sales volumes		8,298
Favorable foreign currency translation effects		3,786
Net sales for fiscal 2022	$	206,607

The increase in net sales for the Asia Segment from fiscal 2021 to fiscal 2022 was primarily attributable to the continued momentum of REPREVE-branded products contributing to underlying sales growth, partially offset by supply chain and shipping challenges in Asia in connection with pandemic-related lockdowns during the fourth quarter of fiscal 2022.

The increase in net sales for the Asia Segment from fiscal 2020 to fiscal 2021 was primarily attributable to the continued momentum of REPREVE-branded products contributing to underlying sales growth, partially offset by (i) overall lower sales volumes during the first half of fiscal 2021, driven by the adverse impacts of the COVID-19 pandemic on global demand and (ii) a lower-priced sales mix.

The changes in Segment Profit for the Asia Segment are as follows:

Segment Profit for fiscal 2020	$	16,683
Change in underlying margins and sales mix		4,584
Increase in sales volumes		3,156
Favorable foreign currency translation effects		970
Segment Profit for fiscal 2021	$	25,393
Segment Profit for fiscal 2021	$	25,393
Change in underlying margins and sales mix		1,824
Increase in sales volumes		1,140
Favorable foreign currency translation effects		519
Segment Profit for fiscal 2022	$	28,876

The increase in Segment Profit for the Asia Segment from fiscal 2021 to fiscal 2022 was primarily attributable to higher sales volumes with a stronger sales mix in fiscal 2022.

The increase in Segment Profit for the Asia Segment from fiscal 2020 to fiscal 2021 was primarily attributable to raw material cost benefits achieved on certain product lines, an improved sales mix, and higher sales volumes.

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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 (as defined below) of its credit facility.  

As of July 3, 2022, all of UNIFI’s $114,290 of debt obligations were guaranteed by certain of its domestic operating subsidiaries, and 99% 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 July 3, 2022 for domestic operations compared to foreign operations:

	Domestic		Foreign		Total
Cash and cash equivalents	$	527	$	52,763	$	53,290
Borrowings available under financing arrangements		51,409		—		51,409
Liquidity	$	51,936	$	52,763	$	104,699
Working capital	$	90,963	$	152,511	$	243,474
Total debt obligations	$	114,290	$	—	$	114,290

For fiscal 2022, cash generated from operations was $380 and at July 3, 2022, excess availability under the ABL Revolver was $51,409. In fiscal 2022, demand recovery and inflation generated an increase in our working capital, and when combined with capital expenditures, debt service and routine tax payments, we had a net use of cash in fiscal 2022. However, our liquidity position (calculated in the table above) remains elevated and is expected to be adequate to allow UNIFI to manage through the current macro-economic environment and to quickly respond to demand recovery.

UNIFI considers $26,253 of its unremitted foreign earnings to be permanently reinvested to fund working capital requirements and operations abroad, and has therefore not recognized a deferred tax liability for the estimated future taxes that would be incurred upon repatriation. If these earnings were distributed in the form of dividends or otherwise, or if the shares of the relevant foreign subsidiaries were sold or otherwise transferred, UNIFI could be subject to additional tax liabilities of approximately $6,046.

Liquidity Considerations

Operationally, UNIFI navigated the impact on liquidity of the COVID-19 pandemic by diligently managing the balance sheet and operational spending, in addition to utilizing cash received from a minority interest divestiture in April 2020. Following the COVID-19 pandemic, global demand recovery allowed for strong results and cash generation in fiscal 2021. However, inflationary pressures and demand uncertainty throughout fiscal 2022 and entering into fiscal 2023 have created new risks to liquidity.

Currently, UNIFI’s cash and liquidity positions are sufficient to sustain its operations and meet its long-term financial targets. However, further degradation in the macro-economic environment could introduce additional liquidity risk and require UNIFI to limit cash outflows for capital expenditures and discretionary activities, while also utilizing available and additional forms of credit. Thus far we:

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

• do not currently expect our cost of or access to existing capital and funding sources to change materially; however, new capital and funding sources (if any) may carry higher costs than our current structure;

• 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; and

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

Although short-term global demand appears somewhat uncertain, we do not currently anticipate that any adverse events or circumstances will place critical pressure on (i) our liquidity position; (ii) our ability to fund our operations, capital expenditures, and expected business growth; or (iii) the financial targets we have set for fiscal 2025. Should global demand, economic activity, or input availability decline considerably for a prolonged period of time (for example, in connection with the Russia-Ukraine conflict or the macro-economic factors leading to inflation and a potential recession), UNIFI maintains the ability to (i) seek additional credit or financing arrangements or extensions of existing arrangements and/or (ii) re-implement cost reduction initiatives to preserve cash and secure the longevity of the business and operations.

Additionally, UNIFI considers opportunities to deploy existing cash to preserve or enhance liquidity. In August 2022, we repatriated approximately $14,000 from our operations in Asia to the U.S. via an existing intercompany note and, after remitting the appropriate withholding taxes, utilized the cash to reduce our outstanding revolver borrowings, thereby increasing the availability.

During fiscal 2023, we expect the majority of our capital will be deployed to (i) upgrade the machinery in our U.S., El Salvador and Brazil manufacturing facilities via capital expenditures and (ii) support further working capital needs associated with increased sales. Nonetheless, we understand the current global economic risks and we are prepared to act swiftly and diligently to ensure the vitality of the business.

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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	July 3, 2022	July 3, 2022			June 27, 2021
ABL Revolver	December 2023	3.2%	$	41,300		$	—
ABL Term Loan	December 2023	3.2%		65,000			77,500
Finance lease obligations	(1)	3.6%		7,261			8,475
Construction financing	(2)	1.9%		729			882
Total debt				114,290			86,857
Current ABL Term Loan				(10,000	)		(12,500	)
Current portion of finance lease obligations				(1,726	)		(3,545	)
Unamortized debt issuance costs				(255	)		(476	)
Total long-term debt			$	102,309		$	70,336

(1) Scheduled maturity dates for finance lease obligations range from March 2025 to November 2027, as further outlined in Note 4, “Leases.”

(2) Refer to the discussion below under the subheading “Construction Financing” for further information.

ABL Facility and Amendments

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.

The 2018 Amendment made the following changes to the Credit Agreement, among others: (i) extended the maturity date from March 26, 2020 to December 18, 2023 and (ii) decreased the Applicable Margin (as defined in the Credit Agreement) pricing structure for Base Rate Loans (as defined in the Credit Agreement) and LIBOR Rate Loans (as defined in the Credit Agreement) by 25 basis points.  

In connection and concurrent with the sale of UNIFI’s 34% interest in PAL on April 29, 2020, UNIFI entered into the Fourth Amendment to Amended and Restated Credit Agreement (the “Fourth Amendment”).  The Fourth Amendment, among other things, revised the: (i) definition of permitted dispositions within the Credit Agreement to include the sale by Unifi Manufacturing, Inc. of its equity interest in PAL so long as the aggregate net cash proceeds received equaled or exceeded $60,000 and such sale occurred on or before May 15, 2020; (ii) terms of the Credit Agreement to allow the net cash proceeds from the sale of PAL to be applied to the outstanding principal amount of the ABL Revolver until paid in full with the remaining net cash proceeds retained by UNIFI, so long as certain conditions were met; and (iii) terms of the Credit Agreement to allow the lenders to make changes to the benchmark interest rate without further amendment should LIBOR temporarily or permanently cease to exist and a transition to a new benchmark interest rate such as the Secured Overnight Financing Rate (“SOFR”) be required for future ABL Facility borrowings.

On February 5, 2021, UNIFI entered into the Fifth Amendment to Amended and Restated Credit Agreement (the “Fifth Amendment”). The Fifth Amendment generally allowed for share repurchases up to $5,000 to be conducted from cash on-hand through June 30, 2021.  

The ABL Facility is secured by a first-priority perfected security interest in substantially all owned property and assets (together with all proceeds and products) of Unifi, Inc., Unifi Manufacturing, Inc., and a certain subsidiary guarantor (collectively, the “Loan Parties”). It is also secured by a first-priority security interest in all (or 65% in the case of UNIFI’s first-tier controlled foreign subsidiary, as required by the lenders) of the stock of (or other ownership interests in) each of the Loan Parties (other than Unifi, Inc.) and certain subsidiaries of the Loan Parties, together with all proceeds and products thereof.

If excess availability under the ABL Revolver falls below the Trigger Level (as defined in the Credit Agreement), a financial covenant requiring the Loan Parties to maintain a fixed charge coverage ratio on a quarterly basis of at least 1.05 to 1.00 becomes effective. The Trigger Level as of July 3, 2022 was $20,625. In addition, the ABL Facility contains restrictions on particular payments and investments, including certain restrictions on the payment of dividends and share repurchases. Subject to specific provisions, the ABL Term Loan may be prepaid at par, in whole or in part, at any time before the maturity date, at UNIFI’s discretion.

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ABL Facility borrowings bear interest at LIBOR plus an applicable margin of 1.25% to 1.75%, or the Base Rate (as defined below) plus an applicable margin of 0.25% to 0.75%, with interest currently being paid on a monthly basis. The applicable margin is based on (i) the excess availability under the ABL Revolver and (ii) the consolidated leverage ratio, calculated as of the end of each fiscal quarter. The Base Rate means the greater of (i) the prime lending rate as publicly announced from time to time by Wells Fargo Bank, National Association, (ii) the Federal Funds Rate (as defined in the Credit Agreement) plus 0.5%, and (iii) LIBOR plus 1.0%. UNIFI’s ability to borrow under the ABL Revolver is limited to a borrowing base equal to specified percentages of eligible accounts receivable and inventories and is subject to certain conditions and limitations. There is also a monthly unused line fee under the ABL Revolver of 0.25%.

As of July 3, 2022: UNIFI was in compliance with all financial covenants in the Credit Agreement; excess availability under the ABL Revolver was $51,409; UNIFI had $0 of standby letters of credit; and the fixed charge coverage ratio was (0.24) to 1.00. Management maintains the capability to improve the fixed charge coverage ratio utilizing existing foreign cash and cash equivalents.

UNIFI had maintained three interest rate swaps that fix LIBOR at approximately 1.9% on $75,000 of variable-rate debt. Such swaps terminated in May 2022.

UNIFI currently utilizes variable-rate borrowings under the ABL Facility that are made with reference to USD LIBOR Rate Loans. Management will continue to monitor the potential termination of LIBOR and the potential impact on UNIFI’s operations. However, as a result of the Fourth Amendment, 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.

Finance Lease Obligations

During fiscal 2022, UNIFI entered into finance lease obligations totaling $2,493 for eAFK Evo texturing machines.  The maturity dates of these obligations occur during fiscal 2027 with interest rates between 3.0% and 4.4%.

During fiscal 2021, UNIFI entered into finance lease obligations totaling $740 for certain transportation equipment.  The maturity date of these obligations is June 2025 with an interest rate of 3.8%.

Construction Financing

In May 2021, UNIFI entered into an agreement with a third party lender that provides for construction-period financing for eAFK Evo texturing machines included in our capital allocation plans. UNIFI records project costs to construction in progress and the corresponding liability to construction financing (within long-term debt). The agreement provides for monthly, interest-only payments during the construction period, at a rate of SOFR plus 1.25%, and contains terms customary for a financing of this type.

Each borrowing under the agreement provides for 60 monthly payments, which will commence upon the completion of the construction period with an interest rate at fiscal year-end of approximately 4.4%. In connection with this construction financing arrangement, UNIFI has borrowed a total of $3,222 and transitioned $2,493 of completed asset costs to finance lease obligations as of July 3, 2022.

Scheduled Debt Maturities

The following table presents the scheduled maturities of UNIFI’s outstanding debt obligations for the following five fiscal years and thereafter.

	Fiscal 2023		Fiscal 2024		Fiscal 2025		Fiscal 2026		Fiscal 2027		Thereafter
ABL Revolver	$	—	$	41,300	$	—	$	—	$	—	$	—
ABL Term Loan		10,000		55,000		—		—		—		—
Finance lease obligations		1,726		1,787		1,699		1,255		732		62
Total (1)	$	11,726	$	98,087	$	1,699	$	1,255	$	732	$	62

(1) Total reported excludes $729 for construction financing, described above.

Further discussion of the terms and conditions of the Credit Agreement and the Company’s existing indebtedness is outlined in Note 12, “Long-Term Debt,” to the accompanying consolidated financial statements.

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Net Debt (Non-GAAP Financial Measure)

The reconciliations for Net Debt are as follows:

	July 3, 2022		June 27, 2021
Long-term debt	$	102,309	$	70,336
Current portion of long-term debt		11,726		16,045
Unamortized debt issuance costs		255		476
Debt principal		114,290		86,857
Less: cash and cash equivalents		53,290		78,253
Net Debt	$	61,000	$	8,604

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

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

	Fiscal 2022			Fiscal 2021
Cash and cash equivalents	$	53,290		$	78,253
Receivables, net		106,565			94,837
Inventories		173,295			141,221
Income taxes receivable		160			2,392
Other current assets		18,956			12,364
Accounts payable		(73,544	)		(54,259	)
Other current liabilities		(19,806	)		(31,638	)
Income taxes payable		(1,526	)		(1,625	)
Current operating lease liabilities		(2,190	)		(1,856	)
Current portion of long-term debt		(11,726	)		(16,045	)
Working capital	$	243,474		$	223,644
Less: Cash and cash equivalents		(53,290	)		(78,253	)
Less: Income taxes receivable		(160	)		(2,392	)
Less: Income taxes payable		1,526			1,625
Less: Current operating lease liabilities		2,190			1,856
Less: Current portion of long-term debt		11,726			16,045
Adjusted Working Capital	$	205,466		$	162,525

Working capital increased from $223,644 as of June 27, 2021 to $243,474 as of July 3, 2022, while Adjusted Working Capital increased from $162,525 to $205,466, both primarily in connection with business recovery and higher input costs. Working capital and Adjusted Working Capital are within the range of management’s expectations based on the composition of the underlying business and global structure.

The decrease in cash and cash equivalents was primarily driven by capital expenditures and scheduled debt service. The increase in receivables, net was due primarily to an increase in selling prices as a result of higher raw material costs in fiscal 2022, partially offset by a decrease in banker’s acceptance notes held by our Asia Segment.  The increase in inventories was primarily attributable to higher raw material costs in fiscal 2022. The increase in other current assets was primarily due to the reclassification of Brazil’s recovery of non-income taxes from long-term to current based on an accelerated recovery timeline. The increase in accounts payable was consistent with higher raw material costs in fiscal 2022. The decrease in other current liabilities was primarily attributable to less incentive compensation earned in fiscal 2022. Income taxes receivable and income taxes payable are immaterial to working capital and Adjusted Working Capital. The change in current operating lease liabilities was insignificant. The change in current portion of long-term debt primarily reflects the five quarterly principal payments occurring within the 53-week fiscal 2022 year reflected as current at the end of fiscal 2021.

Capital Projects

In fiscal 2022, UNIFI invested $39,631 in capital projects, primarily relating to (i) eAFK Evo texturing machinery, (ii) further improvements in production capabilities and technology enhancements in the Americas, 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.

In fiscal 2021, UNIFI invested $21,178 in capital projects, primarily relating to (i) further improvements in production capabilities and technology enhancements in the Americas, (ii) eAFK Evo texturing machines, 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.

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In fiscal 2020 and in response to the adverse liquidity impacts of COVID-19, we invested approximately $18,500 in capital projects that included (i) a priority on safety and maintenance capital expenditures to allow continued efficient production and (ii) making further improvements in production capabilities and technology enhancements in the Americas. We also added approximately $6,000 of transportation equipment under new finance leases.

In fiscal 2023, UNIFI expects to invest between $35,000 and $40,000 in capital projects, to include (i) making further improvements in production capabilities and technology enhancements in the Americas, including the continued purchase and installation of new eAFK Evo texturing machines, and (ii) annual maintenance capital expenditures.  UNIFI will seek to ensure maintenance capital expenditures are sufficient to allow continued production at high efficiencies.

The total amount ultimately invested for fiscal 2023 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 cash provided by operating activities and other borrowings.  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, UNIFI announced that 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, through private transactions, or via 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 July 3, 2022, UNIFI repurchased 701 shares at an average price of $15.90, leaving $38,859 available for repurchase under the 2018 SRP. UNIFI will continue to evaluate opportunities to use excess cash flows from operations or existing borrowings to repurchase additional stock, while maintaining sufficient liquidity to support its operational needs and to fund future strategic growth opportunities.

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 credit facility will enable UNIFI to 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, cash provided by operating activities and available foreign financing arrangements will provide the needed liquidity to fund the associated operating activities and investing activities, such as future capital expenditures.  UNIFI’s foreign operations in Asia and Brazil are in a position to obtain local country financing arrangements due to the strong operating results of each subsidiary.

Cash Provided by Operating Activities

The significant components of net cash provided by operating activities are summarized below. UNIFI analyzes net cash provided by operating activities utilizing the major components of the statements of cash flows prepared under the indirect method.

	Fiscal 2022			Fiscal 2021			Fiscal 2020
Net income (loss)	$	15,171		$	29,073		$	(57,237	)
Depreciation and amortization expense		26,207			25,528			23,653
Equity in (earnings) loss of unconsolidated affiliates		(605	)		(739	)		477
Recovery of non-income taxes, net		815			(9,717	)		—
Impairment of investment in unconsolidated affiliate		—			—			45,194
Gain on sale of investment in unconsolidated affiliate		—			—			(2,284	)
Non-cash compensation expense		3,555			3,462			3,999
Deferred income taxes		(3,119	)		5,087			(4,011	)
Subtotal		42,024			52,694			9,791
Distributions received from unconsolidated affiliates		750			750			10,437
Change in inventories		(34,749	)		(28,069	)		15,792
Other changes in assets and liabilities		(7,645	)		11,306			16,704
Net cash provided by operating activities	$	380		$	36,681		$	52,724

Fiscal 2022 Compared to Fiscal 2021

The decrease in net cash provided by operating activities from fiscal 2021 to fiscal 2022 was primarily due to an increase in working capital associated with (i) higher raw material costs and consolidated sales activity driving higher inventory and accounts receivable balances and (ii) lower other current liabilities resulting from the payment of incentive compensation earned in fiscal 2021.

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Fiscal 2021 Compared to Fiscal 2020

The decrease in net cash provided by operating activities from fiscal 2020 to fiscal 2021 was primarily due to (i) the impact on working capital created by the contrast in business activity at the end of each fiscal year and (ii) the $10,437 of distributions received from PAL in fiscal 2020. The decrease was partially offset by a significant increase in Adjusted EBITDA from fiscal 2020 to fiscal 2021.

Cash (Used) Provided by Investing Activities and Financing Activities

Fiscal 2022

UNIFI used $41,734 for investing activities and provided $17,965 for financing activities during fiscal 2022. Significant investing activities included $39,631 for capital expenditures, which primarily relate to ongoing maintenance capital expenditures along with production capabilities and technology enhancements in the Americas. Significant financing activities included $28,800 of net borrowings against the ABL Facility, along with $3,707 of payments on finance lease obligations and $9,151 for share repurchases during fiscal 2022.

Fiscal 2021

UNIFI used $24,621 for investing activities and used $12,875 for financing activities during fiscal 2021. Significant investing activities included (i) approximately $21,000 for capital expenditures that primarily relate to ongoing maintenance capital expenditures along with production capabilities and technology enhancements in the Americas and (ii) approximately $3,600 for intangible asset purchases in connection with two bolt-on asset acquisitions in an effort to expand our customer portfolios in the U.S.  Significant financing activities included $10,000 of net payments against the ABL Facility, along with $3,646 of payments on finance lease obligations.

Fiscal 2020

UNIFI generated $41,574 from net investing activities and utilized $37,922 for net financing activities during fiscal 2020. Significant investing activities included the $60,000 sale of the PAL Investment, partially offset by $18,509 for capital expenditures, which primarily relate to ongoing maintenance capital expenditures, along with production capabilities and technology enhancements in the Americas. Significant financing activities included $29,400 of net payments against the ABL Facility using approximately half of the PAL Investment sale proceeds, along with $6,035 of payments on finance lease obligations.

Contractual Obligations

In addition to management’s discussion and analysis surrounding our liquidity and capital resources, long-term debt, finance leases, operating leases, and the associated principal and interest components thereof, as of July 3, 2022, UNIFI’s contractual obligations consisted of the following additional concepts and considerations.

1. Capital purchase obligations relate to contracts with vendors for the construction or purchase of assets, primarily for the normal course operations in our manufacturing facilities. Such obligations are approximately $32,000 and $12,000 for fiscal years 2023 and 2024, respectively.

2. Purchase obligations are agreements that are enforceable and legally binding and that specify all significant terms, including fixed or minimum quantities to be purchased; fixed, minimum or variable price provisions; and the approximate timing of the transaction. Such obligations, predominantly related to ongoing operations and service contracts in support of normal course business, range from approximately $5,000 to $10,000 per annum and vary based on the renewal timing of specific commitments and the range of services received.

3. Non-capital purchase orders totaled approximately $75,000 at the end of fiscal 2022 and are expected to be settled in fiscal 2023.  Such open purchase orders are in the ordinary course of business for the procurement of (i) raw materials used in the production of inventory, (ii) certain consumables and outsourced services used in UNIFI’s manufacturing processes, and (iii) selected finished goods for resale sourced from third-party suppliers.

4. Other balance sheet items are detailed within the notes to the consolidated financial statements, including but not limited to annual incentive compensation, severance agreements, post-employment plan liabilities, unpaid invoice and contract amounts, interest rate swaps, and other balances and charges that primarily relate to normal course operations.

UNIFI does not engage in off-balance sheet arrangements and only enters into material contracts in the ordinary course of business and/or to hedge the associated risks (e.g. interest rate swaps).

Recent Accounting Pronouncements

Issued and Pending Adoption

Upon review of each Accounting Standards Update (“ASU”) issued by the Financial Accounting Standards Board (the “FASB”) through the date of this report, UNIFI identified no newly applicable accounting pronouncements that are expected to have a significant impact on UNIFI’s consolidated financial statements.

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Recently Adopted

In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments - Credit Losses, with an effective date consistent with UNIFI’s fiscal 2021. The new guidance requires an organization to measure all expected credit losses for financial assets held at the reporting date based on historical experience, current conditions and reasonable and supportable forecasts. Financial institutions and other organizations have begun to use forward-looking information to inform their credit loss estimates.  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.

There have been no other newly issued or newly applicable accounting pronouncements that have had, or are expected to have, a significant impact on UNIFI’s consolidated financial statements.

Off-Balance Sheet Arrangements

UNIFI is not a party to any off-balance sheet arrangements that have had, 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.  The following discussion provides further information about accounting policies critical to UNIFI and should be read in conjunction with Note 2, “Summary of Significant Accounting Policies,” to the accompanying consolidated financial statements.

Inventory Net Realizable Value Adjustment

The inventory net realizable value adjustment is established based on many factors, including: historical recovery rates, inventory age, expected net realizable value of specific products, and current economic conditions.  Specific reserves are established based on a determination of the obsolescence of the inventory and whether the inventory cost exceeds net realizable value.  Anticipating selling prices and evaluating the condition of the inventories require judgment and estimation, which may impact the resulting inventory valuation and gross margins.  UNIFI uses current and historical knowledge to record reasonable estimates of its markdown percentages and expected sales prices.  UNIFI believes it is unlikely that differences in actual demand or selling prices from those forecasted by management would have a material impact on UNIFI’s financial condition or results of operations.  UNIFI has not made any material changes to the methodology used in establishing its inventory net realizable value adjustment during the past three fiscal years.  A plus or minus 10% change in the inventory net realizable value adjustment would not have been material to UNIFI’s consolidated financial statements for the past three fiscal years.

	July 3, 2022			June 27, 2021			June 28, 2020
Net realizable value adjustment	$	(3,487	)	$	(2,407	)	$	(4,224	)

Item 7A. 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 July 3, 2022, UNIFI had borrowings under its ABL Term Facility totaling $106,300. After considering 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 July 3, 2022 would result in an increase in annual interest expense of less than $600.

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 July 3, 2022, UNIFI had no outstanding foreign currency forward contracts.

38

A significant portion of raw materials purchased by the Brazil Segment are denominated in USDs, requiring UNIFI to regularly exchange BRL. A significant portion of sales and asset balances for the Asia Segment are denominated in USDs. During recent fiscal years, UNIFI has been negatively impacted by fluctuations of the BRL and the RMB. Discussion and analysis surrounding the impact of fluctuations of the BRL and the RMB on UNIFI’s results of operations are included above in “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations.” UNIFI does not enter into foreign currency derivatives to hedge its net investment in its foreign operations.

As of July 3, 2022, foreign currency exchange rate risk concepts included the following:

	Approximate Amount or Percentage
Percentage of total consolidated assets held by UNIFI's subsidiaries outside the U.S. whose functional    currency is not the USD		30.2	%
Cash and cash equivalents held outside the U.S.:
Denominated in USD	$	10,372
Denominated in RMB		28,836
Denominated in BRL		12,115
Denominated in other foreign currencies		125
Total cash and cash equivalents held outside the U.S.	$	51,448
Percentage of total cash and cash equivalents held outside the U.S.		96.5	%
Cash and cash equivalents held inside the U.S. in USD by foreign subsidiaries	$	1,315

More information regarding UNIFI’s derivative financial instruments as of July 3, 2022 is provided in Note 18, “Fair Value of Financial Instruments and Non-Financial Assets and Liabilities,” to the accompanying consolidated financial statements.

Raw Material and Commodity Cost 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 as management has concluded that the overall cost of hedging petroleum exceeds the potential risk mitigation.  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 quickly pass on to its customers increases in raw material costs, but due to market conditions, this is not always possible. When price increases can be implemented, there is typically a time lag that adversely affects UNIFI’s 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 experienced a predominantly favorable, declining raw material cost environment, especially during calendar 2020 as the COVID-19 pandemic suppressed petroleum prices for several months.

During the second half of fiscal 2021, UNIFI experienced cost increases for raw materials, primarily related to (i) increases in petroleum prices and (ii) supply chain disruptions that occurred in Texas during February 2021 due to abnormally cold weather. 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.

As fiscal 2021 concluded, UNIFI experienced cost increases for raw materials, primarily related to (i) increases in petroleum prices and (ii) supply chain disruptions that occurred in Texas during February 2021 due to abnormally cold weather. Our raw material costs remained elevated in fiscal 2022.  We have been able to implement responsive selling price adjustments for the majority of our portfolio, however our underlying gross margin has been pressured somewhat during fiscal 2022. We expect the impact of recent selling price adjustments to improve margins in future periods. Nonetheless, such 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.

39

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 8. Financial Statements and Supplementary Data

Our consolidated financial statements and the related notes begin on page F-i herein.

Item 9. Changes in and Disagreements With Accountants on Accounting and Financial Disclosure

None.

Item 9A. Controls and Procedures

Evaluation of Disclosure Controls and Procedures

As of July 3, 2022, 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 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.

Management’s Annual Report on Internal Control Over Financial Reporting

Management of UNIFI is responsible for establishing and maintaining adequate internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) promulgated under the Exchange Act). UNIFI’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with GAAP. UNIFI’s internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of UNIFI; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with GAAP, and that receipts and expenditures of UNIFI are being made only in accordance with authorizations of management and directors of UNIFI; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of UNIFI’s assets that could have a material effect on the consolidated financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Management, under the supervision and with the participation of the principal executive officer and principal financial officer, assessed the effectiveness of UNIFI’s internal control over financial reporting as of July 3, 2022, based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on that assessment, management concluded that, as of July 3, 2022, UNIFI’s internal control over financial reporting was effective based on the criteria established in Internal Control – Integrated Framework (2013).

Attestation Report of the Independent Registered Public Accounting Firm

The effectiveness of UNIFI’s internal control over financial reporting as of July 3, 2022 has been audited by KPMG LLP (“KPMG”), an independent registered public accounting firm. KPMG’s report, which appears in “Item 8. Financial Statements and Supplementary Data,” expresses an unqualified opinion on the effectiveness of UNIFI’s internal control over financial reporting as of July 3, 2022.

Changes in Internal Control Over Financial Reporting

During UNIFI’s fourth quarter of fiscal 2022, there has been no change in UNIFI’s internal control over financial reporting that has materially affected, or is reasonably likely to materially affect, UNIFI’s internal control over financial reporting.

Item 9B. Other Information

None.

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PART III

Item 10. Directors, Executive Officers and Corporate Governance

UNIFI will file with the SEC a definitive proxy statement for the Company’s 2022 Annual Meeting of Shareholders (the “Proxy Statement”) no later than 120 days after the close of fiscal 2022. The information required with respect to our executive officers appears both in the Proxy Statement and in Part I of this Annual Report under the heading “Information about our Executive Officers.” The other information required by this item is furnished by incorporation by reference to the information under the headings “Election of Directors” and “Corporate Governance” in the Proxy Statement.

We have adopted a written Code of Ethics for Senior Financial and Executive Officers (the “Code of Ethics”), which is intended to qualify as a “code of ethics” within the meaning of Item 406 of Regulation S-K of the Exchange Act.  The Code of Ethics applies to our principal executive officer, principal financial officer, principal accounting officer and persons performing similar functions.  The Code of Ethics is available on our website at www.unifi.com.  A copy of the Code of Ethics may also be obtained without charge by any person, upon request, by writing to Unifi, Inc., 7201 West Friendly Avenue, Greensboro, North Carolina 27410, Attention: Corporate Secretary.

We will disclose information pertaining to any amendment to, or waiver from, the provisions of the Code of Ethics that apply to our principal executive officer, principal financial officer, principal accounting officer, or persons performing similar functions and that relate to any element of the Code of Ethics enumerated in the SEC rules and regulations by posting this information on our website at www.unifi.com.  The information on our website is not a part of this Annual Report and is not incorporated by reference in this Annual Report or any of our other filings with the SEC. Our non-employee directors and their respective principal occupation or employment are as follows: Emma S. Battle (President and CEO, MarketVigor, LLC, a consulting and strategy firm); Archibald Cox, Jr. (Chairman, Sextant Group, Inc., a financial advisory and private equity firm); Kenneth G. Langone (President and Chief Executive Officer, Invemed Associates LLC, a private investment portfolio firm); Suzanne M. Present (Principal, Gladwyne Partners, LLC, a private partnership fund manager); Rhonda L. Ramlo (Vice President & General Manager of Strategy, Acquisitions, and New Business Development, The Clorox Company, a manufacturer and marketer of consumer and professional products); and Eva T. Zlotnicka (Managing Partner, Inclusive Capital Partners, a fund manager focusing on responsible capitalism).

Item 11. Executive Compensation

The information required by this item is furnished by incorporation by reference to the information under the headings “Director Compensation,” “Compensation Discussion and Analysis,” “Executive Compensation Tables,” “Compensation Committee Interlocks and Insider Participation” and “Compensation Committee Report” in the Proxy Statement.

Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

The information required by this item is furnished by incorporation by reference to the information under the headings “Security Ownership of Certain Beneficial Owners and Management” and “Equity Compensation Plan Information” in the Proxy Statement.

Item 13. Certain Relationships and Related Transactions, and Director Independence

The information required by this item is furnished by incorporation by reference to the information under the headings “Corporate Governance—Director Independence,” “Corporate Governance—Policy for Review of Related Person Transactions” and “Corporate Governance—Related Person Transactions” in the Proxy Statement.

Item 14. Principal Accountant Fees and Services

The information required by this item is furnished by incorporation by reference to the information under the heading “Ratification of the Appointment of Independent Registered Public Accounting Firm” in the Proxy Statement.

41

PART IV

Item 15. Exhibits and Financial Statement Schedules

(a) 1. Financial Statements

The financial statements listed in the accompanying Index to Consolidated Financial Statements on page F-i are filed as part of this Annual Report.

Report of Independent Registered Public Accounting Firm (PCAOB ID: 185).

2. Financial Statement Schedules

Not applicable.

42

3. Exhibits

Exhibit Number	Description
3.1	Restated Certificate of Incorporation of Unifi, Inc. (incorporated by reference to Exhibit 3.1 to the Current Report on Form 8-K filed October 31, 2016 (File No. 001-10542)).
3.2	Amended and Restated By-laws of Unifi, Inc., as of October 26, 2016 (incorporated by reference to Exhibit 3.2 to the Current Report on Form 8-K filed October 31, 2016 (File No. 001-10542)).
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)).
4.1	Description of Unifi, Inc. Common Stock (incorporated by reference to Exhibit 4.1 to the Annual Report on Form 10‑K for the fiscal year ended June 30, 2019 (File No. 001-10542)).
4.2	Registration Rights Agreement, dated as of January 1, 2007, by and between Unifi, Inc. and Dillon Yarn Corporation (incorporated by reference to Exhibit 7.1 to the Schedule 13D filed January 16, 2007 by Dillon Yarn Corporation (File No. 005-30881)).
4.3	Amended and Restated Credit Agreement, dated as of March 26, 2015, by and among Unifi, Inc. and certain of its domestic subsidiaries, as borrowers, Wells Fargo Bank, National Association, as administrative agent, sole lead arranger and sole book runner, and the lenders party thereto (incorporated by reference to Exhibit 4.1 to the Current Report on Form 8-K filed March 31, 2015 (File No. 001-10542)).
4.4	First Amendment to Amended and Restated Credit Agreement, dated as of June 26, 2015, by and among Unifi, Inc. and Unifi Manufacturing, Inc., as borrowers, Wells Fargo Bank, National Association, as administrative agent, and the lenders party thereto (incorporated by reference to Exhibit 4.1 to the Current Report on Form 8-K filed June 30, 2015 (File No. 001-10542)).
4.5	Second Amendment to Amended and Restated Credit Agreement, dated as of November 19, 2015, by and among Unifi, Inc. and Unifi Manufacturing, Inc., as borrowers, Wells Fargo Bank, National Association, as administrative agent, and the lenders party thereto (incorporated by reference to Exhibit 4.1 to the Current Report on Form 8-K filed November 23, 2015 (File No. 001-10542)).
4.6	Third Amendment to Amended and Restated Credit Agreement and Second Amendment to Amended and Restated Guaranty and Security Agreement, dated as of December 18, 2018, by and among Unifi, Inc. and Unifi Manufacturing, Inc., as borrowers, Unifi Sales & Distribution, Inc. and See 4 Process Improvement Solutions, LLC, as guarantors, Wells Fargo Bank, National Association, as agent for the lenders party thereto, and the lenders party thereto (incorporated by reference to Exhibit 4.1 to the Current Report on Form 8-K filed December 20, 2018 (File No. 001-10542)).
4.7	Fourth Amendment to Amended and Restated Credit Agreement, dated as of April 29, 2020, by and among Unifi, Inc. and Unifi Manufacturing, Inc., as borrowers, Unifi Sales & Distribution, Inc. and See 4 Process Improvement Solutions, LLC, as guarantors, Wells Fargo Bank, National Association, as agent for the lenders party thereto, and the lenders party thereto (incorporated by reference to Exhibit 4.1 to the Current Report on Form 8-K filed April 30, 2020 (File No. 001-10542)).
4.8	Fifth Amendment to Amended and Restated Credit Agreement, dated as of February 5, 2021, by and among Unifi, Inc. and Unifi Manufacturing, Inc., as borrowers, Unifi Sales & Distribution, Inc., as guarantor, Wells Fargo Bank, National Association, as agent for the lenders party thereto, and the lenders party thereto (incorporated by reference to Exhibit 4.1 to the Current Report on Form 8-K filed February 11, 2021 (File No. 001-10542)).
4.9	Amended and Restated Guaranty and Security Agreement, dated as of March 26, 2015, by and among the grantors from time to time party thereto and Wells Fargo Bank, National Association, as administrative agent (incorporated by reference to Exhibit 4.2 to the Current Report on Form 8-K filed March 31, 2015 (File No. 001-10542)).
4.10	First Amendment to Amended and Restated Guaranty and Security Agreement, dated as of June 26, 2015, by and among the grantors from time to time party thereto and Wells Fargo Bank, National Association, as administrative agent (incorporated by reference to Exhibit 4.2 to the Current Report on Form 8-K filed June 30, 2015 (File No. 001-10542)).
4.11	Trademark Security Agreement, dated as of May 24, 2012, by and among the grantors party thereto and Wells Fargo Bank, N.A., as agent (incorporated by reference to Exhibit 4.3 to the Current Report on Form 8-K filed May 25, 2012 (File No. 001-10542)).
4.12	Patent Security Agreement, dated as of May 24, 2012, by and among the grantors party thereto and Wells Fargo Bank, N.A., as agent (incorporated by reference to Exhibit 4.4 to the Current Report on Form 8-K filed May 25, 2012 (File No. 001-10542)).

43

Exhibit Number	Description
10.1*	2008 Unifi, Inc. Long-Term Incentive Plan (incorporated by reference to Exhibit 99.1 to the Registration Statement on Form S-8 filed December 12, 2008 (File No. 333-156090)).
10.2*	Form of Incentive Stock Option Agreement for Employees for use in connection with the 2008 Unifi, Inc. Long-Term Incentive Plan (incorporated by reference to Exhibit 10.3 to the Quarterly Report on Form 10-Q for the quarter ended December 28, 2008 (File No. 001-10542)).
10.3*	Form of Restricted Stock Unit Agreement for Employees for use in connection with the 2008 Unifi, Inc. Long-Term Incentive Plan (incorporated by reference to Exhibit 10.1 to the Quarterly Report on Form 10-Q for the quarter ended September 25, 2011 (File No. 001-10542)).
10.4*	Form of Restricted Stock Unit Agreement for Non-Employee Directors for use in connection with the 2008 Unifi, Inc. Long-Term Incentive Plan (incorporated by reference to Exhibit 10.1 to the Quarterly Report on Form 10-Q for the quarter ended December 26, 2010 (File No. 001-10542)).
10.5*	Unifi, Inc. 2013 Incentive Compensation Plan (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K filed October 23, 2013 (File No. 001-10542)).
10.6*	Form of Restricted Stock Unit Agreement for Non-Employee Directors for use in connection with the Unifi, Inc. 2013 Incentive Compensation Plan (used for agreements entered into prior to October 25, 2017) (incorporated by reference to Exhibit 10.2 to the Current Report on Form 8-K filed October 23, 2013 (File No. 001-10542)).
10.7*	Form of Restricted Stock Unit Agreement for Non-Employee Directors for use in connection with the Unifi, Inc. 2013 Incentive Compensation Plan (used for agreements entered into on or after October 25, 2017) (incorporated by reference to Exhibit 10.9 to the Annual Report on Form 10-K for the fiscal year ended June 24, 2018 (File No. 001-10542)).
10.8*	Form of Restricted Stock Unit Agreement for Employees for use in connection with the Unifi, Inc. 2013 Incentive Compensation Plan (used for agreements entered into prior to February 21, 2017) (incorporated by reference to Exhibit 10.3 to the Quarterly Report on Form 10-Q for the quarter ended December 29, 2013 (File No. 001-10542)).
10.9*	Form of Restricted Stock Unit Agreement for Employees for use in connection with the Unifi, Inc. 2013 Incentive Compensation Plan (used for agreements entered into on or after February 21, 2017) (incorporated by reference to Exhibit 10.11 to the Annual Report on Form 10-K for the fiscal year ended June 24, 2018 (File No. 001-10542)).
10.10*	Form of Incentive Stock Option Agreement for Employees for use in connection with the Unifi, Inc. 2013 Incentive Compensation Plan (used for agreements entered into prior to March 26, 2017) (incorporated by reference to Exhibit 10.4 to the Quarterly Report on Form 10-Q for the quarter ended December 29, 2013 (File No. 001-10542)).
10.11*	Form of Incentive Stock Option Agreement for Employees for use in connection with the Unifi, Inc. 2013 Incentive Compensation Plan (used for agreements entered into on or after March 26, 2017) (incorporated by reference to Exhibit 10.1 to the Quarterly Report on Form 10-Q for the quarter ended March 26, 2017 (File No. 001-10542)).
10.12*	Unifi, Inc. Amended and Restated 2013 Incentive Compensation Plan (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K filed November 1, 2018 (File No. 001-10542)).
10.13*	Unifi, Inc. Second Amended and Restated 2013 Incentive Compensation Plan (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K filed November 2, 2020 (File No. 001-10542)).
10.14*	Form of Vested Share Unit Agreement for Non-Employee Directors for use in connection with the Unifi, Inc. Amended and Restated 2013 Incentive Compensation Plan and the Unifi, Inc. Second Amended and Restated 2013 Incentive Compensation Plan (incorporated by reference to Exhibit 10.2 to the Quarterly Report on Form 10-Q for the quarter ended September 30, 2018 (File No. 001-10542)).
10.15*	Form of Stock Option Agreement for Non-Employee Directors for use in connection with the Unifi, Inc. Amended and Restated 2013 Incentive Compensation Plan and the Unifi, Inc. Second Amended and Restated 2013 Incentive Compensation Plan (incorporated by reference to Exhibit 10.5 to the Quarterly Report on Form 10-Q for the quarter ended December 30, 2018 (File No. 001-10542)).
10.16*	Form of Restricted Stock Unit Agreement for Employees for use in connection with the Unifi, Inc. Amended and Restated 2013 Incentive Compensation Plan and the Unifi, Inc. Second Amended and Restated 2013 Incentive Compensation Plan (incorporated by reference to Exhibit 10.3 to the Quarterly Report on Form 10-Q for the quarter ended September 30, 2018 (File No. 001-10542)).
10.17*	Form of Cash-Settled Restricted Stock Unit Agreement for Employees for use in connection with the Unifi, Inc. Amended and Restated 2013 Incentive Compensation Plan and the Unifi, Inc. Second Amended and Restated 2013 Incentive Compensation Plan (incorporated by reference to Exhibit 10.6 to the Quarterly Report on Form 10-Q for the quarter ended December 30, 2018 (File No. 001-10542)).

44

Exhibit Number	Description
10.18*	Form of Incentive Stock Option Agreement for Employees for use in connection with the Unifi, Inc. Amended and Restated 2013 Incentive Compensation Plan and the Unifi, Inc. Second Amended and Restated 2013 Incentive Compensation Plan (incorporated by reference to Exhibit 10.4 to the Quarterly Report on Form 10-Q for the quarter ended September 30, 2018 (File No. 001-10542)).
10.19*	Form of Unifi, Inc. Performance Share Unit Agreement for Employees for use in connection with the Unifi, Inc. Second Amended and Restated 2013 Incentive Compensation Plan (incorporated by reference to Exhibit 10.2 to the Quarterly Report on Form 10-Q for the quarter ended September 26, 2021 (File No. 001-10542)).
10.20+ *	Unifi, Inc. Deferred Compensation Plan (formerly known as the Unifi, Inc. Supplemental Key Employee Retirement Plan).
10.21*	Unifi, Inc. Director Deferred Compensation Plan (incorporated by reference to Exhibit 10.2 to the Quarterly Report on Form 10-Q for the quarter ended December 26, 2010 (File No. 001-10542)).
10.22*	Unifi, Inc. Director Compensation Policy (incorporated by reference to Exhibit 10.1 to the Quarterly Report on Form 10-Q for the quarter ended December 29, 2019 (File No. 001-10542)).
10.23*	Letter Agreement by and between Unifi, Inc. and Albert P. Carey, effective as of June 29, 2020 (incorporated by reference to Exhibit 10.2 to the Current Report on Form 8-K filed November 2, 2020 (File No. 001-10542)).
10.24*	Letter Agreement by and between Unifi, Inc. and Albert P. Carey, effective as of October 27, 2021 (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K filed October 28, 2021 (File No. 001-10542)).
10.25*	Employment Agreement by and between Unifi, Inc. and Craig A. Creaturo, effective as of August 28, 2019 (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K filed September 3, 2019 (File No. 001-10542)).
10.26*	Employment Agreement by and between Unifi, Inc. and Edmund M. Ingle, effective as of April 16, 2020 (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K filed April 21, 2020 (File No. 001-10542)).
10.27*	First Amendment to Employment Agreement by and between Unifi, Inc. and Edmund M. Ingle, effective as of June 9, 2020 (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K/A filed June 15, 2020 (File No. 001-10542)).
10.28*	Employment Agreement by and between Unifi, Inc. and Hongjun Ning, effective as of July 1, 2020 (incorporated by reference to Exhibit 10.3 to the Current Report on Form 8-K filed November 2, 2020 (File No. 001-10542)).
10.29*	Employment Agreement by and between Unifi, Inc. and Lucas de Carvalho Rocha, effective as of July 1, 2020 (incorporated by reference to Exhibit 10.4 to the Current Report on Form 8-K filed November 2, 2020 (File No. 001-10542)).
10.30+ *	Employment Agreement by and between Unifi, Inc. and Gregory K. Sigmon, effective as of July 4, 2022.
10.31	Sales and Services Agreement, dated as of January 1, 2007, by and between Unifi Manufacturing, Inc. and Dillon Yarn Corporation (incorporated by reference to Exhibit 99.1 to the Registration Statement on Form S-3 filed February 9, 2007 (File No. 333-140580)).
10.32	First Amendment to Sales and Services Agreement, effective as of January 1, 2009, by and between Unifi Manufacturing, Inc. and Dillon Yarn Corporation (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K filed December 3, 2008 (File No. 001-10542)).
10.33	Second Amendment to Sales and Services Agreement, effective as of January 1, 2010, by and between Unifi Manufacturing, Inc. and Dillon Yarn Corporation (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K filed December 11, 2009 (File No. 001-10542)).
10.34	Third Amendment to Sales and Services Agreement, effective as of January 1, 2011, by and between Unifi Manufacturing, Inc. and Dillon Yarn Corporation (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K filed December 22, 2010 (File No. 001-10542)).
10.35	Fourth Amendment to Sales and Services Agreement, effective as of January 1, 2012, by and between Unifi Manufacturing, Inc. and Dillon Yarn Corporation (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K filed December 20, 2011 (File No. 001-10542)).
10.36	Deposit Account Control Agreement, dated as of May 24, 2012, by and among Unifi Manufacturing, Inc., Wells Fargo Bank, N.A. and Bank of America, N.A. (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K filed May 25, 2012 (File No. 001-10542)).

45

Exhibit Number	Description
21+	Subsidiaries of Unifi, Inc.
23+	Consent of KPMG LLP.
31.1+	Certification of Principal Executive Officer pursuant to Rule 13a-14(a)/15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2+	Certification of Principal Financial Officer pursuant to Rule 13a-14(a)/15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1++	Certification of Principal Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2++	Certification of Principal Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101+	The following financial information from Unifi, Inc.’s Annual Report on Form 10-K for the fiscal year ended July 3, 2022, filed August 31, 2022, formatted in Inline XBRL: (i) the Consolidated Balance Sheets, (ii) the Consolidated Statements of Operations, (iii) the Consolidated Statements of Comprehensive Income (Loss), (iv) the Consolidated Statements of Shareholders’ Equity, (v) the Consolidated Statements of Cash Flows and (vi) the Notes to Consolidated Financial Statements.
104+	The cover page from Unifi, Inc.’s Annual Report on Form 10-K for the fiscal year ended July 3, 2022, filed August 31, 2022, formatted in Inline XBRL (included in Exhibit 101).

+ Filed herewith.

++ Furnished herewith.

* Indicates a management contract or compensatory plan or arrangement.

Item 16. Form 10-K Summary

None.

46

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) 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.
Date: August 31, 2022	By:	/s/ EDMUND M. INGLE
		Edmund M. Ingle
		Chief Executive Officer

POWER OF ATTORNEY

KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints Edmund M. Ingle and Craig A. Creaturo, or either of them, his or her attorney-in-fact, with full power of substitution and resubstitution for such person in any and all capacities, to sign any amendments to this report and to file the same, with exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission, hereby ratifying and confirming all that either of said attorney-in-fact, or substitute or substitutes, may do or cause to be done by virtue hereof.

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the date indicated:

Signature	Title
/s/ EDMUND M. INGLE	Chief Executive Officer and Director
Edmund M. Ingle	(Principal Executive Officer)
/s/ CRAIG A. CREATURO	Executive Vice President & Chief Financial Officer
Craig A. Creaturo	(Principal Financial Officer and Principal Accounting Officer)
/s/ EMMA S. BATTLE	Director
Emma S. Battle
/s/ ALBERT P. CAREY	Executive Chairman
Albert P. Carey
/s/ ARCHIBALD COX, JR.	Lead Independent Director
Archibald Cox, Jr.
/s/ KENNETH G. LANGONE	Director
Kenneth G. Langone
/s/ SUZANNE M. PRESENT	Director
Suzanne M. Present
/s/ RHONDA L. RAMLO	Director
Rhonda L. Ramlo
/s/ EVA T. ZLOTNICKA	Director
Eva T. Zlotnicka
Date: August 31, 2022

47

UNIFI, INC.

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

Reports of Independent Registered Public Accounting Firm	F-1
Consolidated Balance Sheets as of July 3, 2022 and June 27, 2021	F-4
Consolidated Statements of Operations for the fiscal years ended July 3, 2022, June 27, 2021, and June 28, 2020	F-5
Consolidated Statements of Comprehensive Income (Loss) for the fiscal years ended July 3, 2022, June 27, 2021, and June 28, 2020	F-6
Consolidated Statements of Shareholders’ Equity for the fiscal years ended July 3, 2022, June 27, 2021, and June 28, 2020	F-7
Consolidated Statements of Cash Flows for the fiscal years ended July 3, 2022, June 27, 2021, and June 28, 2020	F-8
Notes to Consolidated Financial Statements	F-9

F-i

Report of Independent Registered Public Accounting Firm

To the Shareholders and Board of Directors

Unifi, Inc.:

Opinion on the Consolidated Financial Statements

We have audited the accompanying consolidated balance sheets of Unifi, Inc. and subsidiaries (the Company) as of July 3, 2022 and June 27, 2021, the related consolidated statements of operations, comprehensive income (loss), shareholders’ equity, and cash flows for each of the years in the three-year period ended July 3, 2022, and the related notes (collectively, the consolidated financial statements). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of July 3, 2022 and June 27, 2021, and the results of its operations and its cash flows for each of the years in the three-year period ended July 3, 2022, in conformity with U.S. generally accepted accounting principles.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company’s internal control over financial reporting as of July 3, 2022, based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission, and our report dated August 31, 2022 expressed an unqualified opinion on the effectiveness of the Company’s internal control over financial reporting.

Basis for Opinion

These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these consolidated financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audits provide a reasonable basis for our opinion.

Critical Audit Matter

The critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements that was communicated or required to be communicated to the audit committee and that: (1) relates to accounts or disclosures that are material to the consolidated financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of a critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

Evaluation of the net realizable value of raw material and finished goods inventories

As discussed in Note 7 to the consolidated financial statements, the Company’s consolidated raw material and finished goods inventories balance as of July 3, 2022 was $154,471 thousand. The Company records adjustments to the cost basis of raw material and finished goods inventories when the expected net realizable value of the inventories is below its cost basis. The Company’s model estimates the net realizable value of its raw material and finished goods inventories based upon factors including historical recovery rates, inventory age, and current economic conditions.

We identified the evaluation of the net realizable value of raw material and finished goods inventories held in the United States as a critical audit matter. Complex auditor judgment was required to evaluate the recovery rates used in the determination of the net realizable value of raw material and finished goods inventories, including the relevance of historical experience.

F-1

The following are the primary procedures we performed to address this critical audit matter. We evaluated the design and tested the operating effectiveness of certain internal controls related to the evaluation of the net realizable value of raw material and finished goods inventories. This included controls related to the determination of expected recovery rates used in the assessment and whether historical rates are indicative of expected losses on current raw material and finished goods inventories. We assessed whether historical recovery rates are indicative of expected losses by (1) comparing the prior period loss estimate to actual loss experience, and (2) evaluating industry and analyst reports for trends and conditions that may impact the estimate of net realizable value. We also performed sensitivity analyses over management’s historical recovery rates to assess the impact of changes in recovery rates on management’s determination of net realizable value of raw material and finished goods inventories.

/s/ KPMG LLP

We have served as the Company’s auditor since 2011.

Greensboro, North Carolina

August 31, 2022

F-2

Report of Independent Registered Public Accounting Firm

To the Shareholders and Board of Directors

Unifi, Inc.:

Opinion on Internal Control Over Financial Reporting

We have audited Unifi, Inc. and subsidiaries’ (the Company) internal control over financial reporting as of July 3, 2022, based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission. In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of July 3, 2022, based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission.  

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheets of the Company as of July 3, 2022 and June 27, 2021, the related consolidated statements of operations, comprehensive income (loss), shareholders’ equity, and cash flows for each of the years in the three-year period ended July 3, 2022, and the related notes (collectively, the consolidated financial statements), and our report dated August 31, 2022 expressed an unqualified opinion on those consolidated financial statements.

Basis for Opinion

The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management’s Annual Report on Internal Control Over Financial Reporting. Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audit also included performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.

Definition and Limitations of Internal Control Over Financial Reporting

A company’s internal control over financial reporting is a process designed 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. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

/s/ KPMG LLP

Greensboro, North Carolina

August 31, 2022

F-3

CONSOLIDATED BALANCE SHEETS

(In thousands, except share and per share amounts)

	July 3, 2022			June 27, 2021
ASSETS
Cash and cash equivalents	$	53,290		$	78,253
Receivables, net		106,565			94,837
Inventories		173,295			141,221
Income taxes receivable		160			2,392
Other current assets		18,956			12,364
Total current assets		352,266			329,067
Property, plant and equipment, net		216,338			201,696
Operating lease assets		8,829			8,772
Deferred income taxes		2,497			1,208
Other non-current assets		8,788			14,625
Total assets	$	588,718		$	555,368
LIABILITIES AND SHAREHOLDERS’ EQUITY
Accounts payable	$	73,544		$	54,259
Income taxes payable		1,526			1,625
Current operating lease liabilities		2,190			1,856
Current portion of long-term debt		11,726			16,045
Other current liabilities		19,806			31,638
Total current liabilities		108,792			105,423
Long-term debt		102,309			70,336
Non-current operating lease liabilities		6,736			7,032
Deferred income taxes		4,983			6,686
Other long-term liabilities		4,449			7,472
Total liabilities		227,269			196,949
Commitments and contingencies
Common stock, $0.10 par value (500,000,000 shares authorized; 17,979,362 and    18,490,338 shares issued and outstanding as of July 3, 2022 and June 27, 2021,    respectively)		1,798			1,849
Capital in excess of par value		66,120			65,205
Retained earnings		353,136			344,797
Accumulated other comprehensive loss		(59,605	)		(53,432	)
Total shareholders’ equity		361,449			358,419
Total liabilities and shareholders’ equity	$	588,718		$	555,368

See accompanying notes to consolidated financial statements.

F-4

CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except per share amounts)

	For the Fiscal Year Ended
	July 3, 2022			June 27, 2021			June 28, 2020
Net sales	$	815,758		$	667,592		$	606,509
Cost of sales		735,273			574,098			567,469
Gross profit		80,485			93,494			39,040
Selling, general and administrative expenses		52,489			51,334			43,814
(Benefit) provision for bad debts		(445	)		(1,316	)		1,739
Other operating (income) expense, net		(158	)		4,865			2,308
Operating income (loss)		28,599			38,611			(8,821	)
Interest income		(1,524	)		(603	)		(722	)
Interest expense		3,085			3,323			4,779
Equity in (earnings) loss of unconsolidated affiliates		(605	)		(739	)		477
Recovery of non-income taxes, net		815			(9,717	)		—
Gain on sale of investment in unconsolidated affiliate		—			—			(2,284	)
Impairment of investment in unconsolidated affiliate		—			—			45,194
Income (loss) before income taxes		26,828			46,347			(56,265	)
Provision for income taxes		11,657			17,274			972
Net income (loss)	$	15,171		$	29,073		$	(57,237	)
Net income (loss) per common share:
Basic	$	0.82		$	1.57		$	(3.10	)
Diluted	$	0.80		$	1.54		$	(3.10	)

See accompanying notes to consolidated financial statements.

F-5

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

(In thousands)

	For the Fiscal Year Ended
	July 3, 2022			June 27, 2021		June 28, 2020
Net income (loss)	$	15,171		$	29,073	$	(57,237	)
Other comprehensive (loss) income:
Foreign currency translation adjustments		(7,125	)		9,368		(21,027	)
Foreign currency translation adjustments for an unconsolidated    affiliate		—			—		1,908
Changes in interest rate swaps, net of tax of $282, $310 and $446,    respectively		952			1,006		(1,458	)
Other comprehensive (loss) income, net		(6,173	)		10,374		(20,577	)
Comprehensive income (loss)	$	8,998		$	39,447	$	(77,814	)

See accompanying notes to consolidated financial statements.

F-6

CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY

(In thousands)

	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
Stock-based compensation		4			1			3,610			—			—			3,611
Conversion of equity units		76			8			(8	)		—			—			—
Common stock repurchased and retired under    publicly announced programs		(84	)		(8	)		(279	)		(1,707	)		—			(1,994	)
Common stock withheld in satisfaction of tax    withholding obligations under net share settle    transactions		(22	)		(3	)		(519	)		—			—			(522	)
Other comprehensive loss, net of tax		—			—			—			—			(20,577	)		(20,577	)
Net loss		—			—			—			(57,237	)		—			(57,237	)
Balance at June 28, 2020		18,446		$	1,845		$	62,392		$	315,724		$	(63,806	)	$	316,155
Options exercised		1			—			—			—			—			—
Stock-based compensation		4			1			3,137			—			—			3,138
Conversion of equity units		45			4			(4	)		—			—			—
Common stock withheld in satisfaction of tax    withholding obligations under net share settle    transactions		(6	)		(1	)		(320	)		—			—			(321	)
Other comprehensive income, net of tax		—			—			—			—			10,374			10,374
Net income		—			—			—			29,073			—			29,073
Balance at June 27, 2021		18,490		$	1,849		$	65,205		$	344,797		$	(53,432	)	$	358,419
Options exercised		16			1			27			—			—			28
Stock-based compensation		5			1			3,290			—			—			3,291
Conversion of equity units		107			11			(11	)		—			—			—
Common stock repurchased and retired under    publicly announced programs		(617	)		(62	)		(2,257	)		(6,832	)		—			(9,151	)
Common stock withheld in satisfaction of tax    withholding obligations under net share settle    transactions		(22	)		(2	)		(134	)		—			—			(136	)
Other comprehensive loss, net of tax		—			—			—			—			(6,173	)		(6,173	)
Net income		—			—			—			15,171			—			15,171
Balance at July 3, 2022		17,979		$	1,798		$	66,120		$	353,136		$	(59,605	)	$	361,449

See accompanying notes to consolidated financial statements.

F-7

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

	For the Fiscal Year Ended
	July 3, 2022			June 27, 2021			June 28, 2020
Cash and cash equivalents at beginning of year	$	78,253		$	75,267		$	22,228
Operating activities:
Net income (loss)		15,171			29,073			(57,237	)
Adjustments to reconcile net income to    net cash provided by operating activities:
Equity in (earnings) loss of unconsolidated affiliates		(605	)		(739	)		477
Distributions received from unconsolidated affiliates		750			750			10,437
Depreciation and amortization expense		26,207			25,528			23,653
Non-cash compensation expense		3,555			3,462			3,999
Deferred income taxes		(3,119	)		5,087			(4,011	)
Loss on disposal of assets		48			2,809			160
Recovery of non-income taxes, net		815			(9,717	)		—
Impairment of investment in unconsolidated affiliate		—			—			45,194
Gain on sale of investment in unconsolidated affiliate		—			—			(2,284	)
Other, net		(99	)		(495	)		(444	)
Changes in assets and liabilities:
Receivables, net		(13,533	)		(40,059	)		29,964
Inventories		(34,749	)		(28,069	)		15,792
Other current assets		(2,860	)		2,409			3,625
Income taxes		2,193			2,978			(113	)
Accounts payable and other current liabilities		8,937			40,909			(17,328	)
Other non-current assets		360			139			46
Other non-current liabilities		(2,691	)		2,616			794
Net cash provided by operating activities		380			36,681			52,724
Investing activities:
Capital expenditures		(39,631	)		(21,178	)		(18,509	)
Purchases of intangible assets		—			(3,605	)		—
Proceeds from sale of investment in unconsolidated affiliate		—			—			60,000
Other, net		(2,103	)		162			83
Net cash (used) provided by investing activities		(41,734	)		(24,621	)		41,574
Financing activities:
Proceeds from ABL Revolver		158,000			—			122,200
Payments on ABL Revolver		(116,700	)		—			(141,600	)
Payments on ABL Term Loan		(12,500	)		(10,000	)		(10,000	)
Proceeds from construction financing		2,340			882			—
Payments on finance lease obligations		(3,707	)		(3,646	)		(6,035	)
Common stock repurchased and retired under publicly announced program		(9,151	)		—			(1,994	)
Common stock withheld in satisfaction of tax withholding obligations under    net share settle transactions		(345	)		(111	)		(522	)
Other		28			—			29
Net cash provided (used) by financing activities		17,965			(12,875	)		(37,922	)
Effect of exchange rate changes on cash and cash equivalents		(1,574	)		3,801			(3,337	)
Net (decrease) increase in cash and cash equivalents		(24,963	)		2,986			53,039
Cash and cash equivalents at end of year	$	53,290		$	78,253		$	75,267

See accompanying notes to consolidated financial statements.

F-8

Unifi, Inc.

Notes to Consolidated Financial Statements

1. Background

Overview

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 sometimes 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 North America, Central America, South America, 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.”).

Fiscal Year

The fiscal year for Unifi, Inc., its domestic subsidiaries and its subsidiary in El Salvador ends on the Sunday in June or July nearest to June 30 of each year. Unifi, Inc.’s fiscal 2022, 2021, and 2020 ended on July 3, 2022, June 27, 2021, and June 28, 2020, respectively.

Unifi, Inc.’s remaining material operating subsidiaries’ fiscal years end on June 30. There have been no significant transactions or events that occurred between Unifi, Inc.’s fiscal year end and such wholly owned subsidiaries’ fiscal year ends.

Unifi, Inc.’s fiscal 2022 consisted of 53 weeks, while fiscal 2021 and 2020 each consisted of 52 weeks.

Current Economic Environment

UNIFI evaluated GAAP requirements for the consideration of forecasted financial information, including, but not limited to, the carrying value of long-lived assets in context with the information reasonably available to UNIFI and the unknown future impacts of the economic environment as of July 3, 2022 and through the date of this filing. As a result of these evaluations, there were no impairments or material changes to asset balances that impacted UNIFI's consolidated financial statements as of and for the period ended July 3, 2022.

2. Summary of Significant Accounting Policies

UNIFI follows U.S. generally accepted accounting principles (“GAAP”).  The significant accounting policies described below, together with the other notes to the accompanying consolidated financial statements that follow, are an integral part of the consolidated financial statements.

Principles of Consolidation

The accompanying consolidated financial statements include the accounts of Unifi, Inc. and its subsidiaries in which it maintains a controlling financial interest.  All account balances and transactions between Unifi, Inc. and the subsidiaries which it controls have been eliminated.  For transactions with entities accounted for under the equity method, any intercompany profits on amounts still remaining are eliminated.  Amounts originating from any deferral of intercompany profits are recorded within the account balance to which the transaction specifically relates (e.g., inventory).  Only upon settlement of the intercompany transaction with a third party is the deferral of the intercompany profit recognized by UNIFI.

Use of Estimates

The preparation of financial statements in conformity with GAAP requires management to make use of estimates and assumptions that affect the reported amounts of assets and liabilities, certain financial statement disclosures at the date of the financial statements, and the reported amounts of revenues and expenses during the period.  UNIFI’s consolidated financial statements include amounts that are based on management’s best estimates and judgments.  Actual results may vary from these estimates.

Cash and Cash Equivalents

Cash equivalents are defined as highly liquid, short-term investments having an original maturity of three months or less. Book overdrafts, for which the bank has not advanced cash, if any, are reclassified to accounts payable and reflected as an offset thereto within the accompanying consolidated statements of cash flows.

F-9

Unifi, Inc.

Notes to Consolidated Financial Statements – (Continued)

Receivables

Receivables are stated net of expected lifetime credit losses.  Allowances are provided for known and potential losses arising from quality claims and for amounts owed by customers.  Reserves for quality claims have not been material and are based on historical claim experience and known pending claims and are recorded as a reduction of net sales.  The allowance for uncollectible accounts is recorded against operating income and reflects UNIFI’s best estimate of probable losses inherent in its accounts receivable portfolio determined on the basis of historical write off experience, aging of trade receivables, specific allowances for known troubled accounts, and other currently available information.  Customer accounts are written off against the allowance for uncollectible accounts when they are no longer deemed to be collectible.

Inventories

UNIFI’s inventories are valued at the lower of cost or net realizable value, with the cost for the majority of its inventory determined using the first-in, first-out method.  Certain foreign inventories and limited categories of supplies are valued using the average cost method.  UNIFI’s estimates for net realizable value related to obsolete, slow-moving, or excess inventories are based upon many factors, including historical recovery rates, inventory age, the expected net realizable value of specific products, and current economic conditions.

Debt Issuance Costs

Debt issuance costs for revolving credit arrangements are immaterial.  All other debt issuance costs are recorded against long-term debt and amortized as additional interest expense using the effective interest method.  In the event of any prepayment of its debt obligations, UNIFI accelerates the recognition of a pro-rata amount of issuance costs.  

Property, Plant and Equipment

Property, plant, and equipment (“PP&E”) are stated at historical cost less accumulated depreciation.  Plant and equipment under finance leases are stated at the present value of minimum lease payments less accumulated amortization. Additions or improvements that substantially extend the useful life of a particular asset are capitalized.  Depreciation is calculated primarily utilizing the straight-line method over the following useful lives:

Asset categories	Useful lives in years
Land improvements	5 to 20
Buildings and improvements	10 to 40
Machinery and equipment	2 to 25
Computer, software and office equipment	3 to 7
Internal software development costs	3
Transportation equipment	3 to 15

Leasehold improvements are depreciated over the lesser of their estimated useful lives or the remaining term of the lease.

Assets under finance leases are amortized in a manner consistent with UNIFI’s normal depreciation policy if ownership is transferred by the end of the lease or if there is a bargain purchase option. If such ownership criteria are not met, amortization occurs over the shorter of the lease term or the asset’s useful life.

UNIFI capitalizes its costs of developing internal software when the software is used as an integral part of its manufacturing or business processes and the technological feasibility has been established.  Internal software costs are amortized over a period of three years and, in accordance with the nature of the project, charged to cost of sales or selling, general, and administrative expenses (“SG&A”).

Fully depreciated assets are retained in cost and accumulated depreciation accounts until they are disposed.  In the case of disposals, asset costs and related accumulated depreciation amounts are removed from the accounts, and the net amounts, less proceeds from disposal, are included in the determination of net income (loss) and presented within other operating (income) expense, net.

Repair and maintenance costs related to PP&E, which do not significantly increase the useful life of an existing asset or do not significantly alter, modify or change the capabilities or production capacity of an existing asset, are expensed as incurred.

Interest is capitalized for capital projects requiring a construction period.

PP&E and other long-lived assets are tested for impairment whenever events or changes in circumstances indicate that the carrying amount of the asset group may not be recoverable.  Long-lived assets to be disposed of by sale within one year are classified as held for sale and are reported at the lower of their carrying amount or fair value less cost to sell.  Depreciation ceases for all assets classified as held for sale.  Long-lived assets to be disposed of other than by sale are classified as held for use until they are disposed of and these assets are reported at the lower of their carrying amount or estimated fair value.

F-10

Unifi, Inc.

Notes to Consolidated Financial Statements – (Continued)

Intangible Assets

Finite-lived intangible assets, such as customer lists, non-compete agreements, and trademarks are amortized over their estimated useful lives.  UNIFI periodically evaluates the reasonableness of the useful lives of these assets.  Once these assets are fully amortized, they are removed from the accounts.  These assets (asset groups) are reviewed for impairment or obsolescence whenever events or changes in circumstances indicate that the carrying amount may not be recoverable.  If impaired, intangible assets are written down to fair value based on discounted cash flows or other valuation techniques.  UNIFI has no intangible assets with indefinite lives.

Investments in Unconsolidated Affiliates

UNIFI evaluates its investments in unconsolidated affiliates for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable.  

During fiscal 2020, UNIFI owned a 34% interest in PAL (the “PAL Investment”) and Parkdale, Incorporated (“Parkdale”) owned the majority 66% interest. During March 2020, UNIFI commenced negotiations to sell the PAL Investment to Parkdale. Such negotiations indicated that the fair value of the PAL Investment was less than UNIFI’s carrying value and UNIFI no longer intended to hold the PAL Investment to allow recovery of the carrying value. UNIFI recorded an other-than-temporary impairment of $45,194 to adjust the PAL Investment to fair value. In April 2020, UNIFI and Parkdale finalized negotiations to sell UNIFI’s PAL Investment to Parkdale for $60,000. The transaction closed on April 29, 2020, and UNIFI received $60,000 in cash.

Derivative Instruments

All derivatives are carried on the balance sheet at fair value and are classified according to their asset or liability position and the expected timing of settlement.  For cash flow hedges, the effective portion of gains and losses are recorded in accumulated other comprehensive loss until the underlying transactions are recognized in income.  When the hedged item is realized, gains or losses are reclassified from accumulated other comprehensive loss to current period earnings on the same line item as the underlying transaction.

Derivatives that are not designated for hedge accounting are marked to market at the end of each period with the changes in fair value recognized in current period earnings.  Settlements of any cash flow derivative contracts are classified as cash flows from operating activities. There were no outstanding derivative instruments as of July 3, 2022.

Fair Value Measurements

The accounting guidance for fair value measurements and disclosures establishes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value.  Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants in the principal market, or, if none exists, the most advantageous market, for the specific asset or liability at the measurement date (the exit price).  Fair value is based on assumptions that market participants would use when pricing the asset or liability.  The hierarchy gives the highest priority to unadjusted quoted prices in active markets and the lowest priority to unobservable inputs.  UNIFI uses the following to measure fair value for its assets and liabilities.

• Level 1 – Observable inputs that reflect quoted prices for identical assets or liabilities in active markets.

• Level 2 – Inputs other than quoted prices included in Level 1 that are observable for the asset or liability either indirectly or directly.

• Level 3 – Unobservable inputs reflecting management’s own assumptions about the inputs used in pricing the asset or liability.

The classification of assets and liabilities within the valuation hierarchy is based upon the lowest level of input that is significant to the fair value measurement in its entirety.

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.

There were no transfers into or out of the levels of the fair value hierarchy for any years presented.

F-11

Unifi, Inc.

Notes to Consolidated Financial Statements – (Continued)

Income Taxes

Income taxes are accounted for under the asset and liability method. Deferred tax assets and liabilities are recorded to recognize the expected future tax benefits or costs of events that have been, or will be, reported in different tax years for financial statement purposes than for tax purposes.  Deferred tax assets and liabilities are determined based on the difference between the financial statement and tax bases of assets and liabilities using enacted tax rates in effect for the year in which these items are expected to reverse.  UNIFI reviews deferred tax assets to determine if it is more-likely-than-not they will be realized.  If UNIFI determines it is not more-likely-than-not that a deferred tax asset will be realized, it records a valuation allowance to reverse the previously recognized benefit.  Provision is made for taxes on undistributed earnings of foreign subsidiaries and related companies to the extent that such earnings are not deemed to be permanently invested.

UNIFI recognizes tax benefits related to uncertain tax positions if it believes it is more-likely-than-not of being sustained.  Recognized income tax positions are measured at the largest amount that is greater than 50% likely of being realized.  UNIFI accrues for other tax contingencies when it is probable that a liability to a taxing authority has been incurred and the amount of the contingency can be reasonably estimated.  Penalties and interest related to income tax expense, if incurred, are included in provision for income taxes.

Stock-Based Compensation

Compensation expense for stock awards is based on the grant date fair value and expensed over the applicable vesting period.  UNIFI has a policy of issuing new shares to satisfy award exercises and conversions.  For awards with a service condition and a graded vesting schedule, UNIFI has elected an accounting policy of recognizing compensation cost on a straight-line basis over the requisite service period for each separate vesting portion of the award as if the award was, in-substance, multiple awards.

Foreign Currency Translation

Assets and liabilities of foreign subsidiaries whose functional currency is other than the U.S. Dollar (“USD”) are translated at exchange rates existing at the respective balance sheet dates.  Translation gains and losses are not included in determining net income (loss) but are presented in a separate component of accumulated other comprehensive loss.  UNIFI translates the results of its foreign operations at the average exchange rates during the respective periods. Transaction gains and losses are included within other operating (income) expense, net.

Revenue Recognition

Revenue is recognized when performance obligations under the terms of a contract with a customer are satisfied, which primarily occurs at a point in time, upon either shipment or delivery to the customer. Revenue is recognized over time for contracts in which the associated inventory produced has no alternative use and for which an enforceable right to payment exists or the associated services have been rendered. Revenue is measured as the amount of consideration UNIFI expects to receive in exchange for completing its performance obligations (i.e., transferring goods or providing services), which includes estimates for variable consideration. Variable consideration includes volume-based incentives and product claims, which are offered within certain contracts between UNIFI and its customers and is not material.  Sales taxes and value added taxes assessed by governmental entities are excluded from the measurement of consideration expected to be received. Shipping and handling costs incurred after a customer has taken control of our goods are treated as a fulfillment cost and are not considered a separate performance obligation.

Cost of Sales

The major components of cost of sales are: (i) materials and supplies, (ii) labor and fringe benefits, (iii) utility and overhead costs associated with manufactured products, (iv) shipping, handling and warehousing costs, (v) depreciation expense, and (vi) all other costs related to production or service activities.

Shipping, Handling, and Warehousing Costs

Shipping, handling, and warehousing costs include costs to store goods prior to shipment, prepare goods for shipment and physically move goods to customers.

Research and Development Costs

Research and development costs include employee costs, production costs related to customer samples, operating supplies, consulting fees and other miscellaneous costs.  The cost of research and development is charged to expense as incurred.  Research and development costs were as follows:

	For the Fiscal Year Ended
	July 3, 2022		June 27, 2021		June 28, 2020
Research and development costs	$	12,103	$	11,483	$	11,257

F-12

Unifi, Inc.

Notes to Consolidated Financial Statements – (Continued)

Selling, General, and Administrative Expenses

The major components of SG&A expenses are: (i) costs of UNIFI’s sales organization, marketing and advertising efforts, and external commissions; (ii) costs of maintaining UNIFI’s general and administrative support functions including executive management, information technology, human resources, legal, and finance; (iii) amortization of intangible assets, and (iv) all other costs required to be classified as SG&A expenses.

Advertising Costs

Advertising costs are expensed as incurred and included in SG&A expenses.  UNIFI’s advertising costs include spending for items such as consumer marketing and branding initiatives, promotional items, trade shows, sponsorships, and other programs.  Advertising costs were as follows:

	For the Fiscal Year Ended
	July 3, 2022		June 27, 2021		June 28, 2020
Advertising costs	$	4,673	$	2,919	$	2,044

Self-Insurance

UNIFI self-insures certain risks such as employee healthcare claims and maintains stop-loss coverage.  Reserves for incurred but not reported healthcare claims are estimated using historical data, the timeliness of claims processing, medical trends, inflation, and any changes, if applicable, in the nature or type of the plan.

Contingencies

At any point in time, UNIFI may be a party to various pending legal proceedings, claims or environmental actions.  Accruals for estimated losses are recorded at the time information becomes available indicating that losses are probable and estimable.  Any amounts accrued are not discounted.  Legal costs such as outside counsel fees and expenses are charged to expense as incurred.

3. Recent Accounting Pronouncements

Issued and Pending Adoption

There have been no newly issued accounting pronouncements that are expected to have a significant impact on UNIFI’s consolidated financial statements.

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 an organization to measure all expected credit losses for financial assets held at the reporting date based on historical experience, current conditions and reasonable and supportable forecasts. Financial institutions and other organizations have begun to use forward-looking information to inform their credit loss estimates. 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.

4. Leases

In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842).  UNIFI adopted the new lease guidance utilizing the modified retrospective transition method, applied at the date of adoption, recording existing leases as of the effective date, July 1, 2019. Under this method, no adjustment to comparative prior periods is required and, accordingly, financial statement information and disclosures required under Topic 842 will not be provided for dates and periods prior to July 1, 2019.  UNIFI made no adjustment to the July 1, 2019 opening retained earnings balance for fiscal 2020.

UNIFI adopted the following practical expedients and elected the following accounting policies related to this standard update:

• carry forward of historical lease classifications and accounting treatment for existing land easements;

• not to reassess whether any expired or existing contracts are or contain leases;

• not to reassess initial direct costs for any existing leases;

• the use of hindsight;

• short-term lease accounting policy election allowing lessees to not recognize right-of-use assets and liabilities for leases with a term of 12 months or less and to recognize lease payments on a straight-line basis over the lease term and variable payments in the period the obligation is incurred; and

• the option not to separate lease and non-lease components for the transportation equipment asset class.

F-13

Unifi, Inc.

Notes to Consolidated Financial Statements – (Continued)

UNIFI routinely leases sales and administrative office space, warehousing and distribution centers, manufacturing space, transportation equipment, manufacturing equipment, and other information technology and office equipment from third parties.  The lease terms range from 1 to 15 years with various options for renewal. There are no residual value guarantees, restrictions, covenants, or sub-leases related to these leases.  Variable lease payments are determined as the amounts included in the lease payment that are based on the change in index or usage. UNIFI’s accounting for finance leases remained substantially unchanged. Disclosures related to the amount, timing and uncertainty of cash flows arising from leases are included below.

The following table sets forth the balance sheet location and values of the Company’s lease assets and lease liabilities:

Classification	Balance Sheet Location	July 3, 2022		June 27, 2021
Lease Assets
Operating lease assets	Operating lease assets	$	8,829	$	8,772
Finance lease assets	Property, plant & equipment, net		7,017		16,037
Total lease assets		$	15,846	$	24,809
Lease Liabilities
Current operating lease liabilities	Current operating lease liabilities	$	2,190	$	1,856
Current finance lease liabilities	Current portion of long-term debt		1,726		3,545
Total current lease liabilities		$	3,916	$	5,401
Non-current operating lease liabilities	Non-current operating lease liabilities	$	6,736	$	7,032
Non-current finance lease liabilities	Long-term debt		5,535		4,930
Total non-current lease liabilities		$	12,271	$	11,962
Total lease liabilities		$	16,187	$	17,363

The following table sets forth the components of UNIFI’s total lease cost for fiscal 2022 and 2021:

	For The Fiscal Year		For The Fiscal Year
Lease Cost	July 3, 2022		June 27, 2021
Operating lease cost	$	2,766	$	2,465
Variable lease cost		502		503
Finance lease cost:
Amortization of lease assets		1,981		1,998
Interest on lease liabilities		258		365
Short-term lease cost		967		1,007
Total lease cost	$	6,474	$	6,338

As of July 3, 2022 and June 27, 2021, Unifi had not received any COVID-19 rent concessions.

The following table presents supplemental information related to leases:

	For The Fiscal Year		For The Fiscal Year
Other Information	July 3, 2022		June 27, 2021
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows used by operating leases	$	2,766	$	2,465
Financing cash flows used by finance leases	$	3,707	$	3,646
Non-cash activities:
Leased assets obtained in exchange for new operating lease liabilities	$	1,662	$	2,606
Leased assets obtained in exchange for new finance lease liabilities	$	2,493	$	740

UNIFI calculates its operating lease liabilities and finance lease liabilities entered into after the adoption of the new lease standard based upon UNIFI’s incremental borrowing rate (the “IBR”). When determining the IBR, we consider our centralized treasury function and our current credit profile. UNIFI makes adjustments to this rate for securitization, the length of the lease term (tenure), and leases denominated in foreign currencies. Generally, the IBR for each jurisdiction approximates the specific risk-free rate for the respective jurisdiction incremented for UNIFI’s corporate credit risk and adjusted for tenure.

F-14

Unifi, Inc.

Notes to Consolidated Financial Statements – (Continued)

The following table sets forth UNIFI's weighted average remaining lease term in years and discount rate percentage used in the calculation of its outstanding lease liabilities:

Weighted Average Remaining Lease Term and Discount Rate	July 3, 2022			June 27, 2021
Weighted average remaining lease term (years):
Operating leases		4.1			5.9
Finance leases		4.2			3.8
Weighted average discount rate (percentage):
Operating leases		5.0	%		5.1	%
Finance leases		3.6	%		3.6	%

Lease Maturity Analysis

Future minimum finance lease payments and future minimum payments under non-cancelable operating leases with initial lease terms in excess of one year under Topic 842 as of July 3, 2022 by fiscal year were:

Maturity of Lease Liabilities	Finance Leases			Operating Leases
Fiscal 2023	$	2,032		$	2,595
Fiscal 2024		2,032			2,004
Fiscal 2025		1,880			1,498
Fiscal 2026		1,385			1,201
Fiscal 2027		821			971
Fiscal years thereafter		100			1,788
Total minimum lease payments	$	8,250		$	10,057
Less estimated executory costs		(413	)		—
Less imputed interest		(576	)		(1,131	)
Present value of net minimum lease payments		7,261			8,926
Less current portion of lease obligations		(1,726	)		(2,190	)
Long-term portion of lease obligations	$	5,535		$	6,736

5.  Revenue Recognition

The following tables present net sales disaggregated by (i) classification of customer type and (ii) REPREVE Fiber sales:

	For the Fiscal Year Ended
	July 3, 2022		June 27, 2021		June 28, 2020
Third-party manufacturer	$	808,655	$	656,763	$	598,510
Service		7,103		10,829		7,999
Net sales	$	815,758	$	667,592	$	606,509

	For the Fiscal Year Ended
	July 3, 2022		June 27, 2021		June 28, 2020
REPREVE® Fiber	$	293,080	$	245,832	$	186,141
All other products and services		522,678		421,760		420,368
Net sales	$	815,758	$	667,592	$	606,509

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.

REPREVE Fiber

REPREVE Fiber represents our collection of fiber products on our recycled platform, with or without added technologies.

F-15

Unifi, Inc.

Notes to Consolidated Financial Statements – (Continued)

Variable Consideration

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. Variable consideration has been immaterial to UNIFI’s financial statements for all years presented.

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.

6. Receivables, Net

Receivables, net consists of the following:

	July 3, 2022			June 27, 2021
Customer receivables	$	99,963		$	81,921
Allowance for uncollectible accounts		(1,498	)		(2,525	)
Reserves for quality claims		(860	)		(703	)
Net customer receivables		97,605			78,693
Other receivables		8,960			16,144
Total receivables, net	$	106,565		$	94,837

Other receivables includes $7,849 and $13,391 of banker’s acceptance notes (“BANs”) as of July 3, 2022 and June 27, 2021, respectively, in connection with the settlement of certain 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.

The changes in UNIFI’s allowance for uncollectible accounts and reserves for quality claims were as follows:

	Allowance for Uncollectible Accounts			Reserves for Quality Claims
Balance at June 30, 2019	$	(2,338	)	$	(961	)
Charged to costs and expenses		(1,739	)		(1,251	)
Translation activity		186			10
Deductions		95			1,274
Balance at June 28, 2020	$	(3,796	)	$	(928	)
Credited (charged) to costs and expenses		1,316			(1,085	)
Translation activity		(89	)		(36	)
Deductions		44			1,346
Balance at June 27, 2021	$	(2,525	)	$	(703	)
Credited (charged) to costs and expenses		445			(1,065	)
Translation activity		40			12
Deductions		542			896
Balance at July 3, 2022	$	(1,498	)	$	(860	)

Amounts credited (charged) to costs and expenses for the allowance for uncollectible accounts are reflected in the (benefit) provision for bad debts and deductions represent amounts written off which were deemed to not be collectible, net of any recoveries.  Amounts charged to costs and expenses for the reserves for quality claims are primarily reflected as a reduction of net sales and deductions represent adjustments to either increase or decrease claims based on negotiated amounts or actual versus estimated claim differences.  

F-16

Unifi, Inc.

Notes to Consolidated Financial Statements – (Continued)

7.  Inventories

Inventories consists of the following:

	July 3, 2022			June 27, 2021
Raw materials	$	69,994		$	54,895
Supplies		11,953			10,692
Work in process		10,358			7,516
Finished goods		84,477			70,525
Gross inventories		176,782			143,628
Net realizable value adjustment		(3,487	)		(2,407	)
Total inventories	$	173,295		$	141,221

The cost for the majority of UNIFI’s inventories is determined using the first-in, first-out method.  Certain foreign inventories and limited categories of supplies of $53,793 and $58,468 as of July 3, 2022 and June 27, 2021, respectively, were valued under the average cost method.

8. Other Current Assets

Other current assets consists of the following:

	July 3, 2022		June 27, 2021
Vendor deposits	$	6,910	$	3,341
Recovery of non-income taxes, net		6,770		3,456
Prepaid expenses and other		3,004		2,753
Value-added taxes receivable		1,987		2,484
Contract assets		285		330
Total other current assets	$	18,956	$	12,364

Vendor deposits primarily relates to down payments made toward the purchase of inventory. Recovery of non-income taxes, net relates to favorable litigation results for UNIFI’s Brazilian operations in fiscal 2021, generating overpayments that resulted from excess social program taxes paid in prior fiscal years, as further described below. Prepaid expenses consists of advance payments for routine operating expenses. Value-added taxes receivable relates to recoverable taxes associated with the sales and purchase activities of UNIFI’s foreign operations. Contract assets represents the estimated revenue attributable to UNIFI in connection with completed performance obligations under contracts with customers for which revenue is recognized over time. The contract assets are classified to receivables when the right to payment becomes unconditional.

Recovery of Non-Income Taxes, Net

Brazilian companies are subject to various taxes on business operations, including turnover taxes used to fund social security and unemployment programs, commonly referred to as PIS/COFINS taxes.  UNIFI, along with numerous other companies in Brazil, challenged the constitutionality of certain state taxes historically included in the PIS/COFINS tax base.

On May 13, 2021, Brazil’s Supreme Federal Court (“SFC”) ruled in favor of taxpayers, and on July 7, 2021, the Brazilian Internal Revenue Service withdrew its existing appeal. Following the SFC decision, the federal government will not issue refunds for these taxes but will instead allow for the overpayments and associated interest to be applied as credits against future PIS/COFINS tax obligations.

There are no limitations or restrictions on UNIFI’s ability to recover the associated overpayment claims as future income is generated. In fiscal 2021, UNIFI recorded $11,519 to reflect the current and non-current recovery of PIS/COFINS taxes and associated interest, with $942 of recoveries relating to fiscal 2021 included within net sales and $10,577 of recoveries relating to fiscal years prior to 2021, which is reduced by fees related to the recovery efforts to comprise $9,717 for recovery of non-income taxes. During fiscal 2022, UNIFI (i) reduced the estimated recovery by $815, based on additional clarity and review of the recovery process during the months following the associated SFC decision and (ii) updated the expected duration of claim recovery to the 12-month period following March 27, 2022. The remaining recovery amount was reclassed to current assets accordingly, with no amounts reflected in other non-current assets at July 3, 2022.

F-17

Unifi, Inc.

Notes to Consolidated Financial Statements – (Continued)

9.  Property, Plant and Equipment, Net

PP&E, net consists of the following:

	July 3, 2022			June 27, 2021
Land	$	3,160		$	3,184
Land improvements		16,443			16,372
Buildings and improvements		164,252			160,122
Assets under finance leases		10,921			22,000
Machinery and equipment		635,699			609,414
Computers, software and office equipment		25,348			24,848
Transportation equipment		10,591			10,461
Construction in progress		20,397			17,834
Gross PP&E		886,811			864,235
Less: accumulated depreciation		(666,569	)		(656,576	)
Less: accumulated amortization – finance leases		(3,904	)		(5,963	)
Total PP&E, net	$	216,338		$	201,696

Assets under finance leases consists of the following:

	July 3, 2022		June 27, 2021
Transportation equipment	$	8,276	$	8,276
Machinery and equipment		2,645		9,897
Building improvements		—		3,827
Gross assets under finance leases	$	10,921	$	22,000

Depreciation and amortization expense and repair and maintenance expenses were as follows:

	For the Fiscal Year Ended
	July 3, 2022		June 27, 2021		June 28, 2020
Depreciation and amortization expense	$	24,509	$	24,215	$	22,551
Repair and maintenance expenses		20,076		18,118		18,093

10. Other Non-Current Assets

Other non-current assets consists of the following:

	July 3, 2022		June 27, 2021
Intangible assets, net	$	2,500	$	3,978
Grantor trust		2,196		—
Investments in unconsolidated affiliates		2,072		2,159
Recovery of non-income taxes, net		—		8,063
Other		2,020		425
Total other non-current assets	$	8,788	$	14,625

Grantor Trust

During fiscal 2022, UNIFI established a grantor (or “rabbi”) trust to facilitate the payment of obligations under the Unifi, Inc. Deferred Compensation Plan (the “DCP”), which was also established in fiscal 2022. In addition to providing certain key employees with the ability to defer earned cash incentive compensation into the DCP, participants can generally choose the form and timing of deferred amounts. The DCP assumed the participants, obligations, and major terms of the Unifi, Inc. Supplemental Key Employee Retirement Plan (together with amendments, the “SERP”), an unfunded plan established in 2006 for purposes of generating supplemental retirement income for key employees of UNIFI. The amounts credited to participant accounts are reflected in selling, general, and administrative expenses. The assets of the trust are subject to the claims of UNIFI’s creditors in the event of insolvency.  Investments held for the DCP consist of mutual funds and are recorded based on market values.  A change in the value of the trust assets would substantially be offset by a change in the liability to the participants, resulting in an immaterial net impact on our consolidated financial statements.

The fair value of the investment assets held by the trust were approximately $2,196 and $0 as of July 3, 2022 and June 27, 2021, respectively, and are classified as trading securities within Other non-current assets.  Trading gains and losses associated with these investments are recorded to Other operating expense, net.  The associated DCP liability is recorded within Other current liabilities and Other long-term liabilities based on expected payment timing, and any increase or decrease in the liability is reflected as compensation in Selling, general and administrative expenses.  During fiscal 2022, we recorded losses on investments held by the trust of $48.

F-18

Unifi, Inc.

Notes to Consolidated Financial Statements – (Continued)

Recovery of Non-Income Taxes, Net

As previously described in Note 8, “Other Current Assets,” UNIFI recorded a recovery of non-income taxes and reflected current and non-current assets accordingly.

Intangible Assets

Intangible assets, net consists of the following:

	July 3, 2022			June 27, 2021
Customer lists	$	5,220		$	5,220
Non-compete agreement		1,875			1,875
Trademarks		104			411
Total intangible assets, gross		7,199			7,506
Accumulated amortization – customer lists		(3,056	)		(2,049	)
Accumulated amortization – non-compete agreement		(1,563	)		(1,188	)
Accumulated amortization – trademarks		(80	)		(291	)
Total accumulated amortization		(4,699	)		(3,528	)
Total intangible assets, net	$	2,500		$	3,978

UNIFI capitalizes costs incurred to register trademarks primarily for REPREVE in various countries. UNIFI has determined that these trademarks have varying useful lives of up to three years and are being amortized using the straight-line method.

Amortization expense for intangible assets consists of the following:

	For the Fiscal Year Ended
	July 3, 2022		June 27, 2021		June 28, 2020
Customer lists	$	1,007	$	556	$	326
Non-compete agreement		375		375		375
Trademarks		96		147		154
Total amortization expense	$	1,478	$	1,078	$	855

The following table presents the expected intangible asset amortization for the next five fiscal years:

	Fiscal 2023		Fiscal 2024		Fiscal 2025		Fiscal 2026		Fiscal 2027		Thereafter
Expected amortization	$	1,291	$	528	$	108	$	108	$	108	$	357

Investments in Unconsolidated Affiliates

U.N.F. Industries, Ltd.

In September 2000, UNIFI and Nilit Ltd. (“Nilit”) formed a 50/50 joint venture, U.N.F. Industries Ltd. (“UNF”), for the purpose of operating nylon extrusion assets to manufacture nylon POY.  Raw material and production services for UNF are provided by Nilit 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

In October 2009, UNIFI and Nilit America Inc. (“Nilit America”) formed a 50/50 joint venture, UNF America LLC (“UNFA”), for the purpose of operating a nylon extrusion facility which manufactures nylon POY.  Raw material and production services for UNFA are provided by Nilit America under separate supply and services agreements.  UNFA’s fiscal year end is December 31 and it is a limited liability company located in Ridgeway, Virginia.  UNFA is treated as a partnership for its income tax reporting.

In conjunction with the formation of UNFA, UNIFI entered into a supply agreement with UNF and UNFA (collectively, “UNFs”) 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 agreement has no stated minimum purchase quantities, and pricing is negotiated every six months based on market rates.  As of July 3, 2022, UNIFI’s open purchase orders related to this agreement were $896.

F-19

Unifi, Inc.

Notes to Consolidated Financial Statements – (Continued)

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

	For the Fiscal Year Ended
	July 3, 2022		June 27, 2021		June 28, 2020
UNFA	$	29,637	$	18,932	$	14,583
UNF		1,175		548		1,450
Total	$	30,812	$	19,480	$	16,033

As of July 3, 2022 and June 27, 2021, UNIFI had combined accounts payable due to UNF and UNFA of $5,565 and $2,955, respectively.

UNIFI has determined that UNF and UNFA are variable interest entities and has also determined that UNIFI is the primary beneficiary of these entities, based on the terms of the supply agreement.  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 so all intercompany sales would be eliminated in consolidation, (ii) the two entities’ balance sheets constitute 3% or less of UNIFI’s current assets and total assets, 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 and instead is accounting for these entities as equity investments.  As of July 3, 2022, UNIFI’s combined investments in UNF and UNFA were $2,072.  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.

Parkdale America, LLC

In June 1997, UNIFI and Parkdale Mills, Inc. (“Mills”) entered into a Contribution Agreement that set forth the terms and conditions by which the two companies contributed all of the assets of their spun cotton yarn operations utilizing open-end and air-jet spinning technologies to create PAL, a producer of yarns for sale to the global textile industry and apparel market.  In exchange for its contribution, UNIFI received a 34% equity ownership interest in the PAL Investment, accounted for using the equity method of accounting.  Effective January 1, 2012, Mills’ interest in PAL was assigned to Parkdale.

During March 2020, UNIFI commenced negotiations to sell the PAL Investment to Parkdale. Such negotiations indicated that the fair value of the PAL Investment was less than UNIFI’s carrying value, and UNIFI no longer intended to hold the PAL Investment to allow recovery of the carrying value. UNIFI recorded an other-than-temporary impairment of $45,194 to adjust the PAL Investment to fair value. In April 2020, UNIFI and Parkdale finalized negotiations to sell UNIFI’s PAL Investment to Parkdale for $60,000. The transaction closed on April 29, 2020, and UNIFI received $60,000 in cash.

During UNIFI’s period of ownership, PAL was a limited liability company treated as a partnership for income tax reporting purposes.  Per PAL’s fiscal 2020 unaudited financial statements, PAL had 10 manufacturing facilities located primarily in the southeast region of the U.S. and in Mexico, and PAL’s five largest customers accounted for approximately 69% of total revenues and 68% of total gross accounts receivable outstanding.

Condensed balance sheet and income statement information for UNFs (including reciprocal balances) is presented in the following tables. Fiscal 2020 PAL Investment income statement activity is reported for the ten months of fiscal 2020 ownership ending April 29, 2020.

	July 3, 2022		June 27, 2021
Current assets	$	10,705	$	7,931
Non-current assets		605		659
Current liabilities		8,056		3,967
Non-current liabilities		—		—
Shareholders’ equity and capital accounts		3,254		4,623
UNIFI’s portion of undistributed earnings		2,013		2,100

	July 3, 2022		June 27, 2021
Net sales	$	31,745	$	19,649
Gross profit		1,928		3,423
Income from operations		148		1,777
Net income		127		1,782
Depreciation and amortization		121		151
Distributions received		750		750

F-20

Unifi, Inc.

Notes to Consolidated Financial Statements – (Continued)

	For the Fiscal Year Ended June 28, 2020
	PAL			UNFs		Total
Net sales	$	544,006		$	17,068	$	561,074
Gross profit		7,592			2,056		9,648
(Loss) income from operations		(7,484	)		410		(7,074	)
Net (loss) income		(2,823	)		497		(2,326	)
Depreciation and amortization		33,455			135		33,590
Cash received by PAL under cotton rebate program		11,186			—		11,186
Earnings recognized by PAL for cotton rebate program		9,697			—		9,697
Distributions received		10,437			—		10,437

11. Other Current Liabilities

Other current liabilities consists of the following:

	July 3, 2022		June 27, 2021
Payroll and fringe benefits	$	9,414	$	10,204
Incentive compensation		3,916		12,356
Utilities		2,287		2,347
Deferred revenue		1,694		2,691
Interest rate swaps		—		1,234
Property taxes and other		2,495		2,806
Total other current liabilities	$	19,806	$	31,638

12. 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	July 3, 2022	July 3, 2022			June 27, 2021
ABL Revolver	December 2023	3.2%	$	41,300		$	—
ABL Term Loan	December 2023	3.2%		65,000			77,500
Finance lease obligations	(1)	3.6%		7,261			8,475
Construction financing	(2)	1.9%		729			882
Total debt				114,290			86,857
Current ABL Term Loan				(10,000	)		(12,500	)
Current portion of finance lease obligations				(1,726	)		(3,545	)
Unamortized debt issuance costs				(255	)		(476	)
Total long-term debt			$	102,309		$	70,336

(1) Scheduled maturity dates for finance lease obligations range from March 2025 to November 2027.

(2) Refer to the discussion below under the subheading “Construction Financing” for further information.  

ABL Facility

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.

F-21

Unifi, Inc.

Notes to Consolidated Financial Statements – (Continued)

The 2018 Amendment made the following changes to the Credit Agreement, among others: (i) extended the maturity date from March 26, 2020 to December 18, 2023 and (ii) decreased the Applicable Margin (as defined in the Credit Agreement) pricing structure for Base Rate Loans (as defined in the Credit Agreement) and LIBOR Rate Loans (as defined in the Credit Agreement) by 25 basis points.

In connection and concurrent with the sale of UNIFI’s 34% interest in PAL on April 29, 2020, UNIFI entered into the Fourth Amendment to Amended and Restated Credit Agreement (“Fourth Amendment”).  The Fourth Amendment, among other things, revised the:  (i) definition of permitted dispositions within the Credit Agreement to include the sale by Unifi Manufacturing, Inc. of its equity interest in PAL so long as the aggregate net cash proceeds received equaled or exceeded $60,000 and such sale occurred on or before May 15, 2020;  (ii) terms of the Credit Agreement to allow the net cash proceeds from the sale of PAL to be applied to the outstanding principal amount of the ABL Revolver until paid in full with the remaining net cash proceeds retained by UNIFI, so long as certain conditions were met; and (iii) terms of the Credit Agreement to allow the lenders to make changes to the benchmark interest rate without further amendment should LIBOR temporarily or permanently cease to exist and a transition to a new benchmark interest rate such as the Secured Overnight Financing Rate (“SOFR”) be required for future ABL Facility borrowings. The Fourth Amendment generated no change in cash flows for the Credit Agreement and, accordingly, followed debt modification accounting.

On February 5, 2021, UNIFI entered into the Fifth Amendment to Amended and Restated Agreement (“Fifth Amendment”).  The Fifth Amendment primarily allowed for share repurchases of up to $5,000 to be completed from available domestic cash, through June 30, 2021. No such share repurchases were made.

The ABL Facility is secured by a first-priority perfected security interest in substantially all owned property and assets (together with all proceeds and products) of Unifi, Inc., Unifi Manufacturing, Inc., and a certain subsidiary guarantor (collectively, the “Loan Parties”). It is also secured by a first-priority security interest in all (or 65% in the case of UNIFI’s first-tier controlled foreign subsidiary, as required by the lenders) of the stock of (or other ownership interests in) each of the Loan Parties (other than Unifi, Inc.) and certain subsidiaries of the Loan Parties, together with all proceeds and products thereof.

If excess availability under the ABL Revolver falls below the Trigger Level (as defined in the Credit Agreement), a financial covenant requiring the Loan Parties to maintain a fixed charge coverage ratio on a quarterly basis of at least 1.05 to 1.00 becomes effective. The Trigger Level as of July 3, 2022 was $20,625. In addition, the ABL Facility contains restrictions on particular payments and investments, including certain restrictions on the payment of dividends and share repurchases. Subject to specific provisions, the ABL Term Loan may be prepaid at par, in whole or in part, at any time before the maturity date, at UNIFI’s discretion.

ABL Facility borrowings bear interest at LIBOR plus an applicable margin of 1.25% to 1.75%, or the Base Rate (as defined below) plus an applicable margin of 0.25% to 0.75%, with interest currently being paid on a monthly basis. The applicable margin is based on (i) the excess availability under the ABL Revolver and (ii) the consolidated leverage ratio, calculated as of the end of each fiscal quarter. The Base Rate means the greater of (i) the prime lending rate as publicly announced from time to time by Wells Fargo Bank, National Association, (ii) the Federal Funds Rate (as defined in the Credit Agreement) plus 0.5%, and (iii) LIBOR plus 1.0%. UNIFI’s ability to borrow under the ABL Revolver is limited to a borrowing base equal to specified percentages of eligible accounts receivable and inventories and is subject to certain conditions and limitations. There is also a monthly unused line fee under the ABL Revolver of 0.25%.

In 2017, UNIFI entered into three interest rate swaps with Wells Fargo Bank, N.A., with notional amounts of $20,000 (“Swap A”), $30,000 (“Swap B”) and $25,000 (“Swap C”), respectively. The combined designated hedges fixed LIBOR at approximately 1.9% for $75,000 of variable rate borrowings through May 24, 2022.  Such swaps terminated in May 2022 and there were no material fair value or hedging impacts.

As of July 3, 2022: UNIFI had $0 of standby letters of credit; excess availability under the ABL Revolver was $51,409; and the fixed charge coverage ratio was (0.24) to 1.00.

Finance Lease Obligations

During fiscal 2022, UNIFI entered into finance lease obligations totaling $2,493 for eAFK Evo texturing machines.  The maturity dates of these obligations occur during fiscal 2027 with interest rates between 3.0% and 4.4%.

During fiscal 2021, UNIFI entered into finance lease obligations totaling $740 for certain transportation equipment.  The maturity date of these obligations is June 2025 with an interest rate of 3.8%.

During fiscal 2020, UNIFI entered into finance lease obligations totaling $6,301 for certain transportation equipment.  The maturity date of these obligations range from March 2025 to November 2026 with interest rates ranging from 3.1% to 3.5%.  

F-22

Unifi, Inc.

Notes to Consolidated Financial Statements – (Continued)

Construction Financing

In May 2021, UNIFI entered into an agreement with a third party lender that provides for construction-period financing for certain texturing machinery included in our capital allocation plans. UNIFI records project costs to construction in progress and the corresponding liability to construction financing (within long-term debt). The agreement provides for monthly, interest-only payments during the construction period, at a rate of SOFR plus 1.25%, and contains terms customary for a financing of this type.

Each borrowing under the agreement provides for 60 monthly payments, which will commence upon the completion of the construction period with an interest rate of approximately 4.4%. In connection with this construction financing arrangement, UNIFI has borrowed a total of $3,222 and transitioned $2,493 of completed asset costs to finance lease obligations as of July 3, 2022.

Scheduled Debt Maturities

The following table presents the scheduled maturities of UNIFI’s outstanding debt obligations for the following five fiscal years and thereafter.

	Fiscal 2023		Fiscal 2024		Fiscal 2025		Fiscal 2026		Fiscal 2027		Thereafter
ABL Revolver	$	—	$	41,300	$	—	$	—	$	—	$	—
ABL Term Loan		10,000		55,000		—		—		—		—
Finance lease obligations		1,726		1,787		1,699		1,255		732		62
Total (1)	$	11,726	$	98,087	$	1,699	$	1,255	$	732	$	62

(1) Total reported excludes $729 for construction financing, described above.

13. Other Long-Term Liabilities

Other long-term liabilities consists of the following:

	July 3, 2022		June 27, 2021
Nonqualified deferred compensation plan obligation	$	1,982	$	2,090
Uncertain tax positions		1,575		3,045
Other		892		2,337
Total other long-term liabilities	$	4,449	$	7,472

As further described in Note 10, “Other Non-Current Assets,” UNIFI maintains a nonqualified deferred compensation plan for certain key employees and reflects a long-term obligation for amounts due beyond twelve months.

Other primarily includes certain retiree and post-employment medical and disability liabilities.

14. Income Taxes

Components of Income (Loss) Before Income Taxes

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

	For the Fiscal Year Ended
	July 3, 2022			June 27, 2021			June 28, 2020
U.S.	$	(18,364	)	$	(12,463	)	$	(74,905	)
Foreign		45,192			58,810			18,640
Income (loss) before income taxes	$	26,828		$	46,347		$	(56,265	)

F-23

Unifi, Inc.

Notes to Consolidated Financial Statements – (Continued)

Components of Provision for Income Taxes

Provision for income taxes consists of the following:

	For the Fiscal Year Ended
	July 3, 2022			June 27, 2021			June 28, 2020
Current:
Federal	$	(1,163	)	$	(577	)	$	282
State		2			25			(118	)
Foreign		15,935			12,739			4,819
Total current tax expense		14,774			12,187			4,983
Deferred:
Federal		(630	)		(1,564	)		(3,783	)
State		33			131			116
Foreign		(2,520	)		6,520			(344	)
Total deferred tax expense		(3,117	)		5,087			(4,011	)
Provision for income taxes	$	11,657		$	17,274		$	972

On December 22, 2017, the U.S. government enacted comprehensive tax legislation H.R. 1, formerly known as the Tax Cuts and Jobs Act.  The Global Intangible Low-Taxed Income (“GILTI”) provisions included in H.R. 1 require that certain income earned by foreign subsidiaries must be currently included in the gross income of the U.S. shareholder.  UNIFI has elected to recognize GILTI as a current-period expense. Under this policy, UNIFI has not provided deferred taxes related to temporary differences that, upon their reversal, will affect the amount of income subject to GILTI in the period.

On July 20, 2020, the U.S. Treasury issued and enacted final regulations related to 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. Fiscal 2021 includes a tax benefit of $4,816 related to the retroactive election.

Utilization of Net Operating Loss Carryforwards

Domestic deferred tax expense includes the utilization of federal net operating loss (“NOL”) carryforwards of $110, $5,312 and $89 for fiscal 2022, 2021, and 2020, respectively. Foreign deferred tax expense includes the utilization of NOL carryforwards of $32, $441, and $702 for fiscal 2022, 2021, and 2020, respectively. State deferred tax expense includes the utilization of NOL carryforwards of $25, $167, and $20 for fiscal 2022, 2021, and 2020, respectively.

Effective Tax Rate

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

	For the Fiscal Year Ended
	July 3, 2022			June 27, 2021			June 28, 2020
Federal statutory tax rate		21.0	%		21.0	%		21.0	%
Change in valuation allowance		12.6			5.0			0.6
Foreign income taxed at different rates		10.7			9.0			(1.2	)
Tax expense on unremitted foreign earnings		5.5			7.0			(0.9	)
Repatriation of foreign earnings and withholding taxes		3.9			1.8			(2.0	)
Change in uncertain tax positions		2.4			0.5			(0.3	)
Nondeductible compensation		2.1			1.4			(0.8	)
U.S. tax on GILTI		0.2			3.9			(5.0	)
Nontaxable income		(10.2	)		(2.4	)		1.1
Research and other business credits		(4.0	)		(3.7	)		2.0
State income taxes, net of federal tax benefit		(1.3	)		(0.2	)		2.6
Foreign tax credits		(0.5	)		(5.4	)		0.9
Deemed repatriation of foreign earnings under Subpart F		—			1.5			—
Domestic production activities deduction		—			0.6			—
Rate benefit of U.S. federal NOL carryback		—			(2.8	)		—
Valuation allowance related to loss on sale of investment in PAL		—			—			(19.3	)
Nondeductible expenses and other		1.1			0.1			(0.4	)
Effective tax rate		43.5	%		37.3	%		(1.7	)%

F-24

Unifi, Inc.

Notes to Consolidated Financial Statements – (Continued)

Deferred Income Taxes

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

	July 3, 2022			June 27, 2021
Deferred tax assets:
Capital loss carryforwards	$	16,318		$	17,429
Tax credits		12,079			18,711
Research and development costs		7,409			6,934
NOL carryforwards		6,603			3,043
Accrued compensation		2,106			4,056
Other items		4,877			4,815
Total gross deferred tax assets		49,392			54,988
Valuation allowance		(31,667	)		(36,980	)
Net deferred tax assets		17,725			18,008
Deferred tax liabilities:
PP&E		(14,952	)		(16,045	)
Unremitted earnings		(5,253	)		(3,769	)
Recovery of non-income taxes		132			(3,664	)
Other		(138	)		(8	)
Total deferred tax liabilities		(20,211	)		(23,486	)
Net deferred tax liabilities	$	(2,486	)	$	(5,478	)

Deferred Income Taxes – Valuation Allowance

In assessing its ability to realize deferred tax assets, UNIFI considers whether it is more-likely-than-not that some portion or all of the deferred tax assets will not be realized.  The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible.  UNIFI considers the scheduled reversal of taxable temporary differences, taxable income in carryback years, cumulative losses in recent 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. Based on consideration of these items, management has determined that enough uncertainty exists relative to the realization of its deferred income tax asset balances to warrant the application of a full valuation allowance against the deferred tax assets of its U.S. consolidated group and certain foreign subsidiaries as of July 3, 2022.

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

	For the Fiscal Year Ended
	July 3, 2022			June 27, 2021			June 28, 2020
Capital loss carryforwards	$	(16,318	)	$	(17,429	)	$	(13,791	)
Tax credits		(10,779	)		(17,215	)		(17,111	)
NOL carryforwards		(4,570	)		(2,336	)		(2,542	)
Investments, including unconsolidated affiliates		—			—			(3,995	)
Total deferred tax valuation allowance	$	(31,667	)	$	(36,980	)	$	(37,439	)

During fiscal 2022, UNIFI’s valuation allowance decreased by $5,313. The decrease was primarily driven by a decrease in the valuation allowance on foreign tax credits and capital loss carryforwards, offset by an increase in the valuation allowance on federal net operating loss and research credits carryforwards.

During fiscal 2021, UNIFI’s valuation allowance decreased by $459. The decrease was primarily driven by a decrease in the valuation allowance on investments in unconsolidated affiliates and foreign tax credits, offset by an increase in the valuation allowance on research credits and capital loss carryforwards.

During fiscal 2020, UNIFI’s valuation allowance increased by $11,419. The increase was primarily driven by an increase in the valuation allowance on a capital loss generated by the sale of UNIFI’s interest in PAL.  

F-25

Unifi, Inc.

Notes to Consolidated Financial Statements – (Continued)

Unrecognized Tax Benefits

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

	For the Fiscal Year Ended
	July 3, 2022			June 27, 2021			June 28, 2020
Balance at beginning of year	$	2,590		$	1,218		$	1,083
Gross increases (decreases) related to current period tax positions		408			(24	)		98
Gross (decreases) increases related to tax positions in prior periods		(89	)		1,396			37
Gross decreases related to settlements with tax authorities		—			—			—
Gross decreases related to lapse of applicable statute of limitations		—			—			—
Balance at end of year	$	2,909		$	2,590		$	1,218

Unrecognized tax benefits would generate a favorable impact of $4,746 on UNIFI’s effective tax rate when recognized. UNIFI does not expect material changes in uncertain tax positions within the next 12 months.  Expense for interest and penalties recognized by UNIFI within the provision for income taxes was $287, $141, and $69 for fiscal 2022, 2021, and 2020, respectively.  UNIFI had $559, and $273 accrued for interest and/or penalties related to uncertain tax positions as of July 3, 2022 and June 27, 2021, respectively.

Expiration of Net Operating Loss Carryforwards and Tax Credit Carryforwards

As of July 3, 2022, UNIFI had U.S. federal capital loss carryforwards of $71,105, U.S. federal NOL carryforwards of $16,731, U.S. state NOL carryforwards of $70,601 and foreign NOL carryforwards of $395. The NOL carryforwards begin expiring in varying amounts in fiscal 2023.  As of July 3, 2022, UNIFI had the following carryforward attributes held outside of the U.S. consolidated tax filing group: U.S. federal NOL carryforwards of $2,340 and U.S. state NOL carryforwards of $14,421. The NOL carryforwards held outside of the U.S. consolidated tax filing group begin expiring in fiscal 2023. As of July 3, 2022, UNIFI had U.S. federal foreign tax credit carryforwards of $3,075 and foreign tax credit carryforwards in foreign jurisdictions of $3,170. The foreign tax credit carryforwards begin expiring in varying amounts in fiscal 2023. As of July 3, 2022, UNIFI had U.S. federal research tax credit carryforwards of $5,284, which begin expiring in fiscal 2039.

Tax Years Subject to Examination

Unifi, Inc. and its domestic subsidiaries file a consolidated federal income tax return, as well as income tax returns in multiple state and foreign jurisdictions.  The tax years subject to examination vary by jurisdiction.  UNIFI regularly assesses the outcomes of both completed and ongoing examinations to ensure that UNIFI’s provision for income taxes is sufficient.

In fiscal 2019, the Internal Revenue Service (“IRS”) initiated an audit of UNIFI’s domestic operations for fiscal years 2016 and 2017.  In fiscal 2020, the IRS expanded the audit to include fiscal 2018.  In fiscal 2021, the IRS expanded the audit to include fiscal 2019.  Fiscal years 2009 through 2014 remain open for certain foreign tax credit amendments and net operating loss and general business credit carrybacks.

Statutes related to material foreign jurisdictions are open from January 1, 2017 and material state jurisdictions from June 30, 2019.  Certain carryforward tax attributes generated in years prior remain subject to examination and could change in subsequent tax years.

Indefinite Reinvestment Assertion

UNIFI considers $26,253 of its unremitted foreign earnings to be permanently reinvested to fund working capital requirements and operations abroad and has therefore not recognized a deferred tax liability for the estimated future taxes that would be incurred upon repatriation. If these earnings were distributed in the form of dividends or otherwise, or if the shares of the relevant foreign subsidiaries were sold or otherwise transferred, UNIFI could be subject to additional tax liabilities of approximately $6,046.

F-26

Unifi, Inc.

Notes to Consolidated Financial Statements – (Continued)

15. Shareholders’ Equity

On October 31, 2018, UNIFI announced that 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 via 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		—	$	—	$	50,000
Fiscal 2020		84	$	23.72	$	48,008
Fiscal 2021		—	$	—	$	48,008
Fiscal 2022		617	$	14.84	$	38,859
Total		701	$	15.90	$	38,859

As of July 3, 2022, $38,859 remained available for repurchase under the 2018 SRP.

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.

No dividends were paid in the three most recent fiscal years.

16. Stock-Based Compensation

On October 23, 2013, UNIFI’s shareholders approved the Unifi, Inc. 2013 Incentive Compensation Plan (the “2013 Plan”). The 2013 Plan replaced the 2008 Unifi, Inc. Long-Term Incentive Plan (the “2008 LTIP”). No additional awards can be granted under the 2008 LTIP; however, prior awards outstanding under the 2008 LTIP remain subject to that plan’s provisions. The 2013 Plan authorized the issuance of 1,000 shares of common stock, subject to certain increases in the event outstanding awards under the 2008 LTIP expired, were forfeited or otherwise terminated unexercised.

The 2013 Plan expired in accordance with its terms on October 24, 2018, and the Unifi, Inc. Amended and Restated 2013 Incentive Compensation Plan (the “Amended 2013 Plan”) became effective on that same day, upon approval by shareholders at UNIFI’s annual meeting of shareholders held on October 31, 2018.  The Amended 2013 Plan increased the number of shares available for future issuance pursuant to awards granted under the Amended 2013 Plan to 1,250 and removed provisions no longer applicable due to the recent changes to Section 162(m) of the Internal Revenue Code of 1986, as amended. The material terms and provisions of the Amended 2013 Plan are otherwise similar to those of the 2013 Plan.

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 prior plans; however, awards outstanding under a respective prior plan remain subject to that plan’s provisions.

The following table provides information as of July 3, 2022 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	1
Less: Awards granted to employees	(209	)
Less: Awards granted to non-employee directors	(41	)
Available for issuance under the 2020 Plan	601

F-27

Unifi, Inc.

Notes to Consolidated Financial Statements – (Continued)

Stock Options

A summary of UNIFI’s stock options granted to key employees and valued under the Black-Scholes model is as follows:

	For the Fiscal Year Ended
	July 3, 2022		June 27, 2021		June 28, 2020
Quantity		—		155		143
Service Period (years)		—		3.0		3.0
Weighted Average Exercise Price	$	—	$	15.64	$	19.95
Weighted Average Grant Date Fair Value	$	—	$	6.75	$	7.33

On May 1, 2020, excluded from the fiscal 2020 table above, UNIFI granted stock options to purchase 533 shares of its common stock to a key employee with an exercise price of $11.74 and 10-year contractual terms, as follows:

• 100 vested immediately and had a grant date fair value of $4.83 using the Black-Scholes model;

• 100 cliff-vest after three years of service and had a grant date fair value of $4.83 using the Black-Scholes model;

• 100 vest following a common stock price attainment of $40 for ten consecutive trading days and four years of service or a common stock price attainment of $50 for ten consecutive trading days after four years of service and before five years of service and had a grant date fair value of $2.70 under a Monte Carlo simulation; and

• 233 vest following a common stock price attainment of $50 for ten consecutive trading days and five years of service and had a grant date fair value of $2.33 under a Monte Carlo simulation.

The Black-Scholes model used the following weighted average assumptions for the above awards:

	For the Fiscal Year Ended
	July 3, 2022		June 27, 2021			June 28, 2020
Expected term (years)		—		5.5			5.5
Risk-free interest rate		—		0.4	%		0.7	%
Volatility		—		49.0	%		43.2	%
Dividend yield		—		—			—

UNIFI uses historical data to estimate the expected term and volatility.  The risk-free interest rate is based on the U.S. Treasury yield curve in effect at the time of the grant for periods corresponding with the expected term of the stock options.

A summary of stock option activity for fiscal 2022 is as follows:

	Stock Options			Weighted Average Exercise Price		Weighted Average Remaining Contractual Life (Years)		Aggregate Intrinsic Value
Outstanding at June 27, 2021		1,114		$	16.82
Granted		—		$	—
Exercised		(10	)	$	11.09
Cancelled or forfeited		(122	)	$	25.45
Expired		—		$	—
Outstanding at July 3, 2022		982		$	15.81		7.2	$	1,296
Vested and expected to vest as of July 3, 2022		982		$	15.81		7.2	$	1,296
Exercisable at July 3, 2022		380		$	20.15		6.1	$	285

At July 3, 2022, the remaining unrecognized compensation cost related to the unvested stock options was $904, which is expected to be recognized over a weighted average period of 1.7 years.

For fiscal 2022, 2021, and 2020, the total intrinsic value of stock options exercised was $60, $85, and $147, respectively.  The amount of cash received from the exercise of stock options was $28, $0 and $29 for fiscal 2022, 2021, and 2020, respectively.  The tax benefit realized from stock options exercised was $8, $11, and $20 for fiscal 2022, 2021, and 2020, respectively.

F-28

Unifi, Inc.

Notes to Consolidated Financial Statements – (Continued)

Stock Units and Share Units

During fiscal 2022, 2021, and 2020, UNIFI granted 80, 73, and 127 restricted stock units (“RSUs”), respectively, to certain key employees.  The employee RSUs are subject to a vesting restriction and convey no rights of ownership in shares of Company common stock until such employee RSUs have vested and been distributed to the grantee in the form of Company common stock.  The employee RSUs vest over a three-year period and will be converted into an equivalent number of shares of Company common stock (for distribution to the grantee) on each vesting date, unless the grantee has elected to defer the receipt of the shares of stock until separation from service.  UNIFI estimated the weighted average fair value of each employee RSU granted during fiscal 2022, 2021, and 2020 to be $23.45, $15.65, and $19.74 respectively.

During fiscal 2022, 2021, and 2020, UNIFI granted 32 vested share units (“VSUs”), 37 RSUs, and 24 VSUs (collectively, the “units”), respectively, to UNIFI’s non-employee directors.  The units became fully vested on the grant date but convey no rights of ownership in shares of Company common stock until such units have been distributed to the grantee in the form of Company common stock.  If a grantee defers his or her distribution, the units are converted into an equivalent number of shares of Company common stock and distributed to the grantee following the grantee’s termination of service as a member of the Board.  UNIFI estimated the fair value of each unit granted during fiscal 2022, 2021, and 2020 to be $22.03 $15.91, and $27.15, respectively. 

During fiscal 2022, UNIFI granted 53 performance share units (“PSUs”) to certain key employees. The employee PSUs are subject to a performance-based vesting restriction and convey no rights of ownership in shares of Company common stock until such employee PSUs have vested and been distributed to the grantee in the form of Company common stock. Consistent with the vesting provisions of each PSU, between 50% and 200% of the PSUs become vested, if at all, on the date that the associated performance metric is achieved, and will be converted into shares of stock (for distribution to the grantee) on each vesting date, unless the grantee has elected to defer the receipt of the shares of stock until separation from service. The percentage of PSUs that vest is based on the metric achieved on the vesting date compared to the targeted metric defined in the award agreement. UNIFI estimated the weighted average fair value of each unit granted during fiscal 2022 to be $23.27. As of July 3, 2022, the 53 PSUs granted in fiscal 2022 are not expected to vest.

UNIFI estimates the fair value of RSUs, VSUs and PSUs based on the market price of UNIFI’s common stock at the award grant date.

A summary of RSU, VSU and PSU activity for fiscal 2022 is as follows:

	Non-vested			Weighted Average Grant Date Fair Value		Vested			Total			Weighted Average Grant Date Fair Value
Outstanding at June 27, 2021		162		$	16.75		241			403		$	20.82
Granted		166		$	23.12		—			166		$	23.12
Vested		(92	)	$	18.78		92			—		$	18.78
Converted		—		$	—		(88	)		(88	)	$	19.80
Cancelled or forfeited		(2	)	$	20.39		—			(2	)	$	20.39
Outstanding at July 3, 2022		234		$	20.38		245			479		$	21.80

At July 3, 2022, the number of RSUs, VSUs and PSUs vested and expected to vest was 426, with an aggregate intrinsic value of $5,972.  The aggregate intrinsic value of the 245 vested RSUs, VSUs, and PSUs at July 3, 2022 was $3,434.

The unrecognized compensation cost related to the unvested RSUs and PSUs at July 3, 2022 was $1,634, which is expected to be recognized over a weighted average period of 1.6 years.

For fiscal 2022, 2021, and 2020, the total intrinsic value of RSUs, VSUs, and PSUs converted was $1,715, $1,216, and $1,708, respectively.  The tax benefit realized from the conversion of RSUs was $260, $159, and $206 for fiscal 2022, 2021, and 2020, respectively.

Summary

The total cost charged against income related to all stock-based compensation arrangements was as follows:

	For the Fiscal Year Ended
	July 3, 2022		June 27, 2021		June 28, 2020
Stock options	$	928	$	1,047	$	1,265
RSUs and VSUs		2,253		2,015		2,245
Total compensation cost	$	3,181	$	3,062	$	3,510

In each of fiscal 2022, 2021, and fiscal 2020, UNIFI issued 5, 4, and 4 shares of common stock for $110, $75, and $100 of expense, respectively, in connection with Board compensation.

F-29

Unifi, Inc.

Notes to Consolidated Financial Statements – (Continued)

The total income tax benefit recognized for stock-based compensation was $386, $297, and $178 for fiscal 2022, 2021, and 2020, respectively.

As of July 3, 2022, total unrecognized compensation costs related to all unvested stock-based compensation arrangements were $2,538.  The weighted average period over which these costs are expected to be recognized is 1.6 years.

17. Defined Contribution Plans

401(k) Plan

UNIFI matches employee contributions made to the Unifi, Inc. Retirement Savings Plan (the “401(k) Plan”), a 401(k) defined contribution plan, which covers eligible U.S. salary and hourly employees. Under the terms of the 401(k) Plan, UNIFI matches 100% of the first 3% of eligible employee contributions and 50% of the next 2% of eligible contributions.

The following table presents the employer matching contribution expense related to the 401(k) Plan:

	For the Fiscal Year Ended
	July 3, 2022		June 27, 2021		June 28, 2020
Matching contribution expense	$	3,215	$	2,578	$	2,491

Non-qualified Deferred Compensation Plan

The UNIFI, Inc. Deferred Compensation Plan (the “DCP”), established in fiscal 2022, is an unfunded non-qualified deferred compensation plan in which certain key employees are eligible to participate.  Under the DCP, participants may elect to defer all or a portion of their annual cash incentive compensation to their account. The deferred amounts are paid in accordance with each participant’s elections.  In addition to elective deferrals, the DCP assumed the obligations of the Unifi, Inc. Supplemental Key Employee Retirement Plan (the “SERP”), which includes amounts credited to eligible employees’ accounts based on a percentage of their annual base compensation.  Amounts due within the next operating cycle are reflected in Other current liabilities and the remaining DCP obligation is reflected in Other long-term liabilities.

The total DCP obligation as of July 3, 2022 and the predecessor SERP, as of June 27, 2021, was $2,359, and $3,177, respectively.

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

Financial Instruments

Grantor Trust

The fair value of the investment assets held by the grantor trust established in connection with the DCP (as previously described in the preceding Notes) were approximately $2,196 and $0 as of July 3, 2022 and June 27, 2021, respectively, and are classified as trading securities within Other non-current assets.  The grantor trust assets have readily-available market values and are classified as Level 1 trading securities in the fair value hierarchy. Trading gains and losses associated with these investments are recorded to Other operating expense, net. The associated DCP liability is recorded within Other long-term liabilities, and any increase or decrease in the liability is also recorded in Other operating expense, net.  During fiscal 2022, we recorded losses on investments held by the trust of $48.

Derivative Instruments

UNIFI uses derivative financial instruments such as interest rate swaps to reduce its ongoing business exposures to fluctuations in interest rates.  UNIFI does not enter into derivative contracts for speculative purposes.

Interest Rate Swaps

UNIFI’s primary debt obligations utilize variable-rate LIBOR, exposing the Company to variability in interest payments due to changes in interest rates. Management enters into LIBOR-based interest rate swap agreements to manage fluctuations in cash flows resulting from changes in the benchmark LIBOR. Under the terms of the interest rate swaps, UNIFI effectively received LIBOR-based variable interest rate payments and made fixed interest rate payments, thereby fixing the variable rate cash flows on the notional amount of debt obligations.

In 2017, UNIFI entered into Swaps A, B, and C. The combined designated hedges fixed LIBOR at approximately 1.9% for $75,000 of variable rate borrowings through May 24, 2022. In accordance with hedge accounting, each swap is reflected on the accompanying consolidated balance sheets at fair value with a corresponding balance in accumulated other comprehensive loss, and impacts earnings commensurate with the forecasted transaction.  The swaps terminated in May 2022 and the related impacts were insignificant.

F-30

Unifi, Inc.

Notes to Consolidated Financial Statements – (Continued)

The below table presents the fair value attributes for the historical swaps as of June 27, 2021.

As of June 27, 2021	Notional Amount			Balance Sheet Location	Fair Value Hierarchy	Fair Value
Swap A	USD	$	20,000	Other current liabilities	Level 2	$	334
Swap B	USD	$	30,000	Other current liabilities	Level 2	$	500
Swap C	USD	$	25,000	Other current liabilities	Level 2	$	400

Estimates for the fair value of UNIFI’s derivative contracts are obtained from month-end market quotes for contracts with similar terms.

Swaps A, B, and C, designated hedges, increased interest expense for fiscal 2022, 2021 and 2020 by $1,190, $1,347 and $270.

By entering into derivative contracts, UNIFI exposes itself to counterparty credit risk.  UNIFI attempts to minimize this risk by selecting counterparties with investment grade credit ratings and regularly monitoring those ratings.  UNIFI’s derivative instruments do not contain any credit-risk-related contingent features.

Non-Financial Assets and Liabilities

UNIFI did not have any non-financial assets or liabilities that were required to be measured at fair value on a recurring or non-recurring basis.

19. 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 30, 2019	$	(42,729	)	$	(500	)	$	(43,229	)
Other comprehensive loss, net of tax		(19,119	)		(1,458	)		(20,577	)
Balance at June 28, 2020	$	(61,848	)	$	(1,958	)	$	(63,806	)
Other comprehensive income, net of tax		9,368			1,006			10,374
Balance at June 27, 2021	$	(52,480	)	$	(952	)	$	(53,432	)
Other comprehensive (loss) income, net of tax		(7,125	)		952			(6,173	)
Balance at July 3, 2022	$	(59,605	)	$	—		$	(59,605	)

A summary of other comprehensive (loss) income for fiscal 2022, 2021, and 2020 is provided as follows:

	Fiscal 2022									Fiscal 2021							Fiscal 2020
	Pre-tax			Tax			After-tax			Pre-tax		Tax			After-tax		Pre-tax			Tax		After-tax
Other comprehensive (loss) income:
Foreign currency translation   adjustments	$	(7,125	)	$	—		$	(7,125	)	$	9,368	$	—		$	9,368	$	(21,027	)	$	—	$	(21,027	)
Foreign currency translation   adjustments for an unconsolidated   affiliate		—			—			—			—		—			—		1,908			—		1,908
Changes in interest rate swaps, net of    reclassification adjustments		1,234			(282	)		952			1,316		(310	)		1,006		(1,904	)		446		(1,458	)
Other comprehensive (loss) income, net	$	(5,891	)	$	(282	)	$	(6,173	)	$	10,684	$	(310	)	$	10,374	$	(21,023	)	$	446	$	(20,577	)

F-31

Unifi, Inc.

Notes to Consolidated Financial Statements – (Continued)

20. Computation of Earnings Per Share

The computation of basic and diluted earnings per share (“EPS”) is as follows:

	For the Fiscal Year Ended
	July 3, 2022		June 27, 2021		June 28, 2020
Basic EPS
Net income (loss)	$	15,171	$	29,073	$	(57,237	)
Weighted average common shares outstanding		18,429		18,472		18,475
Basic EPS	$	0.82	$	1.57	$	(3.10	)
Diluted EPS
Net income (loss)	$	15,171	$	29,073	$	(57,237	)
Weighted average common shares outstanding		18,429		18,472		18,475
Net potential common share equivalents		439		384		—
Adjusted weighted average common shares outstanding		18,868		18,856		18,475
Diluted EPS	$	0.80	$	1.54	$	(3.10	)
Excluded from the calculation of common share equivalents:
Anti-dilutive common share equivalents		225		497		401
Excluded from the calculation of diluted shares:
Unvested stock options that vest upon achievement of certain    market conditions		333		333		333

The calculation of earnings per common share is based on the weighted average number of UNIFI’s common shares outstanding for the applicable period.  The calculation of diluted earnings per common share presents the effect of all potential dilutive common shares that were outstanding during the respective period, unless the effect of doing so is anti-dilutive.

21. Other Operating (Income) Expense, Net

Other operating (income) expense, net primarily consists of (i) gains on foreign currency transactions for fiscal 2022 and losses on foreign currency transactions for fiscal 2021, (ii) severance expenses related to former employees in fiscal 2020 and 2021, and (iii) losses from the sale or disposal of assets in fiscal 2021.

22. 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 (“Kinston”) 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. At this time, UNIFI does not expect any active site remediation will be required but expects that any costs associated with active site remediation, if ever required, would likely be immaterial.

Unconditional Obligations

UNIFI is a party to unconditional obligations for certain utility and other purchase or service commitments.  These commitments are non-cancelable, have remaining terms in excess of one year and qualify as normal purchases. 

F-32

Unifi, Inc.

Notes to Consolidated Financial Statements – (Continued)

On a fiscal year basis, the minimum payments expected to be made as part of such commitments are as follows:

	Fiscal 2023		Fiscal 2024		Fiscal 2025		Fiscal 2026		Fiscal 2027		Thereafter
Unconditional purchase obligations	$	6,359	$	5,238	$	5,067	$	2,445	$	2,445	$	—
Unconditional service obligations		1,911		278		269		269		307		194
Total unconditional obligations	$	8,270	$	5,516	$	5,336	$	2,714	$	2,752	$	194

For fiscal 2022, 2021 and 2020, total costs incurred under these commitments consisted of the following:

	For the Fiscal Year Ended
	July 3, 2022		June 27, 2021		June 28, 2020
Costs for unconditional purchase obligations	$	24,236	$	22,689	$	21,483
Costs for unconditional service obligations		912		967		2,082
Total	$	25,148	$	23,656	$	23,565

23. Related Party Transactions

There were no related party receivables as of July 3, 2022 and June 27, 2021.

Mr. Kenneth G. Langone, a member of the Board, is a director, shareholder and non-executive Chairman of the Board of Salem Holding Company.  UNIFI leases tractors and trailers from Salem Leasing Corporation, a wholly owned subsidiary of Salem Holding Company.  In addition to the monthly lease payments, UNIFI also incurs expenses for routine repair and maintenance, fuel, and other expenses.  These leases do not contain renewal options, purchase options or escalation clauses with respect to the minimum lease charges.

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

	July 3, 2022		June 27, 2021
Accounts payable	$	432	$	469
Operating lease obligations		811		1,133
Finance lease obligations		4,933		6,149
Total related party payables	$	6,176	$	7,751

The following are the Company’s significant related party transactions for the current and prior two fiscal years and consist of the matters in the table below:

		For the Fiscal Year Ended
Affiliated Entity	Transaction Type	July 3, 2022		June 27, 2021		June 28, 2020
Salem Leasing Corporation	Payments for transportation    equipment costs and finance    lease debt service	$	4,343	$	4,122	$	3,798

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.

In the fourth quarter of fiscal 2022, UNIFI realigned its operating and reportable segments to correspond with changes to its operating model, management structure, and organizational responsibilities, reflecting the manner in which business performance is evaluated, resources are allocated, and financial statement users can best understand the results of operations. Accordingly, UNIFI is now reporting the Americas Segment, Brazil Segment, and Asia Segment. The Americas Segment represents the combination of the previously reported Polyester Segment, Nylon Segment, and All Other category. There are no changes to the composition of the historical Brazil Segment and Asia Segment. Comparative prior period disclosures have been updated to conform to the new presentation.

F-33

Unifi, Inc.

Notes to Consolidated Financial Statements – (Continued)

UNIFI has three reportable segments.

• The operations within the Americas Segment exhibit similar long-term economic characteristics and primarily sell into an economic trading zone covered by the USMCA and CAFTA-DR to similar customers utilizing similar methods of distribution. These operations derive revenues primarily from manufacturing synthetic and recycled textile products with sales primarily to yarn manufacturers, knitters and weavers that produce yarn and/or fabric for the apparel, hosiery, automotive, home furnishings, industrial, medical, and other end-use markets principally in North and Central America. The Americas Segment consists of sales and manufacturing operations in the U.S., El Salvador, and Colombia.

• 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 Brazil.  The Brazil Segment includes a manufacturing location and sales offices in Brazil.

• 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. The Asia Segment primarily sources synthetic and recycled textile products from third-party suppliers and sells to other yarn manufacturers, knitters, and weavers that produce fabric for the apparel, automotive, home furnishings, industrial, and other end-use markets principally in Asia.  The Asia Segment includes sales offices in China, Turkey, and Hong Kong.

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 Americas 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 July 3, 2022
	Americas		Brazil		Asia		Total
Net sales	$	483,085	$	126,066	$	206,607	$	815,758
Cost of sales		458,617		98,925		177,731		735,273
Gross profit		24,468		27,141		28,876		80,485
Segment depreciation expense		21,153		1,500		—		22,653
Segment Profit	$	45,621	$	28,641	$	28,876	$	103,138

	For the Fiscal Year Ended June 27, 2021
	Americas		Brazil		Asia		Total
Net sales	$	386,779	$	95,976	$	184,837	$	667,592
Cost of sales		350,373		64,281		159,444		574,098
Gross profit		36,406		31,695		25,393		93,494
Segment depreciation expense		21,054		1,315		—		22,369
Segment Profit	$	57,460	$	33,010	$	25,393	$	115,863

	For the Fiscal Year Ended June 28, 2020
	Americas		Brazil		Asia		Total
Net sales	$	380,138	$	73,339	$	153,032	$	606,509
Cost of sales		368,976		62,144		136,349		567,469
Gross profit		11,162		11,195		16,683		39,040
Segment depreciation expense		19,274		1,385		—		20,659
Segment Profit	$	30,436	$	12,580	$	16,683	$	59,699

F-34

Unifi, Inc.

Notes to Consolidated Financial Statements – (Continued)

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

	For the Fiscal Year Ended
	July 3, 2022			June 27, 2021			June 28, 2020
Americas	$	24,468		$	36,406		$	11,162
Brazil		27,141			31,695			11,195
Asia		28,876			25,393			16,683
Segment gross profit		80,485			93,494			39,040
SG&A expenses		52,489			51,334			43,814
(Benefit) provision for bad debts		(445	)		(1,316	)		1,739
Other operating (income) expense, net		(158	)		4,865			2,308
Operating income (loss)		28,599			38,611			(8,821	)
Interest income		(1,524	)		(603	)		(722	)
Interest expense		3,085			3,323			4,779
Equity in (earnings) loss of unconsolidated affiliates		(605	)		(739	)		477
Recovery of non-income taxes, net		815			(9,717	)		—
Gain on sale of investment in unconsolidated affiliate		—			—			(2,284	)
Impairment of investment in unconsolidated affiliate		—			—			45,194
Income (loss) before income taxes	$	26,828		$	46,347		$	(56,265	)

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

	For the Fiscal Year Ended
	July 3, 2022		June 27, 2021		June 28, 2020
Americas	$	21,153	$	21,054	$	19,274
Brazil		1,500		1,315		1,385
Asia		—		—		—
Segment depreciation expense		22,653		22,369		20,659
Other depreciation and amortization expense		3,554		3,159		2,994
Depreciation and amortization expense	$	26,207	$	25,528	$	23,653

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

	For the Fiscal Year Ended
	July 3, 2022		June 27, 2021		June 28, 2020
Americas	$	29,841	$	16,053	$	15,087
Brazil		9,253		3,461		2,332
Asia		236		666		60
Segment capital expenditures		39,330		20,180		17,479
Other capital expenditures		301		998		1,030
Capital expenditures	$	39,631	$	21,178	$	18,509

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

	July 3, 2022		June 27, 2021
Americas	$	379,898	$	327,445
Brazil		98,731		85,950
Asia		81,322		68,034
Segment total assets		559,951		481,429
Other current assets		5,145		48,587
Other PP&E		17,809		21,175
Other operating lease assets		756		1,116
Other non-current assets		2,985		902
Investments in unconsolidated affiliates		2,072		2,159
Total assets	$	588,718	$	555,368

F-35

Unifi, Inc.

Notes to Consolidated Financial Statements – (Continued)

Geographic Data

	For the Fiscal Year Ended
Net Sales	July 3, 2022		June 27, 2021		June 28, 2020
U.S.	$	430,381	$	341,897	$	342,350
China		185,558		171,261		148,923
Brazil		126,066		95,976		73,339
Remaining Foreign Countries		73,753		58,458		41,897
Total	$	815,758	$	667,592	$	606,509
Export sales from UNIFI’s U.S. operations to external customers	$	74,589	$	59,055	$	64,305

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

Long-Lived Assets	July 3, 2022		June 27, 2021		June 28, 2020
U.S.	$	196,885	$	191,733	$	195,874
Brazil		21,927		21,733		10,805
China		2,211		1,919		779
Remaining Foreign Countries		12,932		9,708		9,859
Total	$	233,955	$	225,093	$	217,317

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

We have revised amounts reported in previously issued financial statements as of June 27, 2021 presented in this Annual Report on Form 10-K to correct an immaterial error. The error relates to the transposition of the disclosure of reportable segment assets for the Asia segment and the previously-reported Nylon segment. We evaluated the effect of the error to our previously issued financial statements in accordance with SEC Staff Accounting Bulletins No. 99 and No. 108 and, based upon quantitative and qualitative factors, determined that the error was not material to the previously issued financial statements and disclosure included in our Annual Reports on Form 10-K for the year ended June 27, 2021, or for comparative period amount (i.e. the amounts as of June 27, 2021) reflected in our quarterly report for the quarterly period ended September 30, 2021.

25. Quarterly Results (Unaudited)

Quarterly financial data and selected highlights are as follows:

	For the Fiscal Quarter Ended
	September 26, 2021		December 26, 2021		March 27, 2022		July 3,  2022
Net sales (1)	$	195,992	$	201,410	$	200,780	$	217,576
Gross profit (2)		26,097		16,890		19,144		18,354
Net income (3)		8,680		929		2,066		3,496
Net income per common share:
Basic (4)	$	0.47	$	0.05	$	0.11	$	0.19
Diluted (4)	$	0.46	$	0.05	$	0.11	$	0.19

	For the Fiscal Quarter Ended
	September 27, 2020		December 27, 2020		March 28, 2021		June 27,  2021
Net sales (5)	$	141,505	$	162,776	$	178,866	$	184,445
Gross profit (6)		14,561		25,934		25,595		27,404
Net income (7)		3,432		7,464		4,758		13,419
Net income per common share:
Basic (4)	$	0.19	$	0.40	$	0.26	$	0.73
Diluted (4)	$	0.18	$	0.40	$	0.25	$	0.70

(1) The fiscal quarter ending July 3, 2022 included an additional week of sales of approximately $8,700.

(2) Gross profit for our domestic operations for all fiscal quarters of fiscal 2022 includes adverse pressures from (i) higher raw material costs, (ii) rising input costs, and (iii) the weakening of labor productivity.

(3) Net income for our domestic operations for all fiscal quarters of fiscal 2022 includes the adverse pressures on gross profit.

F-36

Unifi, Inc.

Notes to Consolidated Financial Statements – (Continued)

(4) Income per share is computed independently for each of the periods presented.  The sum of the income per share amounts for the fiscal quarters may not equal the total for the fiscal year.

(5) Net sales for the fiscal quarters ended September 27, 2020 and December 27, 2020 includes adverse demand pressures from the COVID-19 pandemic.

(6) Gross profit for the fiscal quarter ended September 27, 2020 includes adverse demand pressures from the COVID-19 pandemic.  Gross profit for the fiscal quarters ended December 27, 2020, March 28, 2021, and June 27, 2021 includes the benefit of exceptional performance by the Brazil Segment primarily due to higher conversion margin and market share capture due to agility and responsiveness during demand recovery in Brazil.

(7) Net income for the fiscal quarter ended September 27, 2020 includes adverse demand pressures from the COVID-19 pandemic. Net income for the fiscal quarter ended June 27, 2021 includes a recovery of non-income taxes in Brazil due to the favorable conclusion of litigation related to excess social program taxes for multiple prior years.

26. Supplemental Cash Flow Information

Cash payments for interest and taxes consist of the following:

	For the Fiscal Year Ended
	July 3, 2022		June 27, 2021		June 28, 2020
Interest, net of capitalized interest of $396, $229 and $126, respectively	$	2,921	$	3,158	$	4,682
Income taxes, net of refunds		13,045		8,239		6,131

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. Fiscal 2022 includes an income tax payment of $3,749 related to the recovery of non-income taxes described in Note 8, “Other Current Assets.”

Non-Cash Investing and Financing Activities

As of July 3, 2022, June 27, 2021, and June 28, 2020, $2,456, $2,080, and $630, respectively, were included in accounts payable for unpaid capital expenditures.

During fiscal years ended July 3, 2022, June 27, 2021, and June 28, 2020, UNIFI recorded non-cash activity relating to finance leases of $2,493, $740, and $6,301, respectively.

F-37

EX-10.20

Exhibit 10.20

UNIFI, Inc.

Deferred Compensation Plan

Effective Date

November 1, 2021

Content Copyright ©2021 Newport Group, Inc. All Rights Reserved.

UNIFI, Inc. Deferred Compensation Plan

Article I
Establishment and Purpose	1
Article II
Definitions	1
Article III
Eligibility and Participation	8
Article IV
Deferrals	8
Article V
Company Credits	11
Article VI
Payments from Accounts	13
Article VII
Valuation of Account Balances; Investments	16
Article VIII
Administration	17
Article IX
Amendment and Termination	18
Article X
Informal Funding	19
Article XI
Claims	20
Article XII
General Provisions	26

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UNIFI, Inc. Deferred Compensation Plan

Article I

Establishment and Purpose

UNIFI, Inc. (the “Company”) has adopted this UNIFI, Inc. Deferred Compensation Plan, applicable to Incentive Compensation deferred under Compensation Deferral Agreements submitted on and after the Effective Date and Company Credits credited on or after the Effective Date; provided, however, that Articles VII through XII shall apply to amounts previously credited to a Participant under the terms of the Unifi, Inc. Supplemental Key Employee Retirement Plan (“Prior Plan”), and hereby supersede any inconsistent provisions in the Prior Plan.

The purpose of the Plan is to attract and retain key employees by providing them with an opportunity to defer receipt of a portion of their specified compensation. The Plan is not intended to meet the qualification requirements of Code Section 401(a), but is intended to meet the requirements of Code Section 409A, and shall be operated and interpreted consistent with that intent.

This Plan document includes a restatement of the UNIFI, Inc. Supplemental Key Employee Retirement Plan, established effective July 26, 2006, and amended through January 23, 2018.

The Plan constitutes an unsecured promise by a Participating Employer to pay benefits in the future. Participants in the Plan shall have the status of general unsecured creditors of the Company or the Participating Employer, as applicable. Each Participating Employer shall be solely responsible for payment of the benefits attributable to services performed for it. The Plan is unfunded for Federal tax purposes and is intended to be an unfunded arrangement for eligible employees who are part of a select group of management or highly compensated employees of the Employer within the meaning of Sections 201(2), 301(a)(3) and 401(a)(1) of ERISA. Any amounts set aside to defray the liabilities assumed by the Company or a Participating Employer will remain the general assets of the Company or the Participating Employer and shall remain subject to the claims of the Company’s or the Participating Employer's creditors until such amounts are distributed to the Participants.

Article II

Definitions

2.1 Account. Account means a bookkeeping account maintained by the Committee to record the payment obligation of a Participating Employer to a Participant as determined under the terms of the Plan. The Committee may maintain an Account to record the total obligation to a Participant and component Accounts to reflect amounts payable at different times and in different forms. Reference to an Account means any such Account established by the Committee, as the context requires. Accounts are intended to constitute unfunded obligations within the meaning of Sections 201(2), 301(a)(3) and 401(a)(1) of ERISA.

2.2 Account Balance. Account Balance means, with respect to any Account, the total payment obligation owed to a Participant from such Account as of the most recent Valuation Date.

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UNIFI, Inc. Deferred Compensation Plan

2.3 Affiliate. Affiliate means a corporation, trade or business that, together with the Company, is treated as a single employer under Code Section 414(b) or (c).

2.4 Base Compensation. Base Compensation means the annual base cash remuneration earned by an Eligible Employee for employment with the Participating Employers, prior to any reduction in said cash remuneration under Section 125 or 401(k) of the Code or under any non-qualified plan of deferred compensation sponsored by a Participating Employer (including this Plan). Base Compensation shall not include any Incentive Compensation, including, but not limited to, any annual cash bonuses or cash bonuses paid under any long-term incentive compensation plan sponsored by a Participating Employer, any expense allowances or reimbursements, any car allowances, any amounts realized from the grant or exercise of any stock option, phantom stock, stock appreciation right or similar award or any benefit payments from any non-qualified plan of deferred compensation sponsored by a Participating Employer.

2.5 Beneficiary. Beneficiary means a natural person, estate, or trust designated by a Participant in accordance with Section 6.5 hereof to receive payments to which a Beneficiary is entitled in accordance with provisions of the Plan.

2.6 Board of Directors. Board of Directors means, for a Participating Employer organized as a corporation, its board of directors and for a Participating Employer organized as a limited liability company, its board of managers.

2.7 Business Day. Business Day means each day on which the New York Stock Exchange is open for business.

2.8 Change of Control. Change of Control and Change in Control means the occurrence of any of the following events:

(i) any Person is or becomes the Beneficial Owner, directly or indirectly, of more than 50% of either (A) the combined fair market value of the then outstanding stock of the Company (the “Total Fair Market Value”) or (B) the combined voting power of the then outstanding securities entitled to vote generally in the election of directors of the Company (the “Total Voting Power”); excluding, however, the following: (1) any acquisition by the Company or any of its Controlled Affiliates, (2) any acquisition by any employee benefit plan (or related trust) sponsored or maintained by the Company or any of its Controlled Affiliates, (3) any Person who becomes such a Beneficial Owner in connection with a transaction described in the exclusion within subsection (iv) below and (4) any acquisition of additional stock or securities by a Person who owns more than 50% of the Total Fair Market Value or Total Voting Power of the Company immediately prior to such acquisition; or

(ii) any Person is or becomes the Beneficial Owner, directly or Indirectly, of securities of the Company that, together with any securities acquired directly or indirectly by such Person within the immediately preceding twelve-consecutive month period, represent

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UNIFI, Inc. Deferred Compensation Plan

30% or more of the Total Voting Power of the Company; excluding, however, any acquisition described in subclauses (1) through (4) of subsection (i) above; or

(iii) a change in the composition of the Board such that the individuals who, as of the Effective Date, constitute the Board (such individuals shall be hereinafter referred to as the “Incumbent Directors”) cease for any reason to constitute at least a majority of the Board; provided, however, for purposes of this definition, that any individual who becomes a director subsequent to the Effective Date, whose election, or nomination for election by the Company’s shareholders, was made or approved by a vote of at least a majority of the Incumbent Directors (or directors whose election or nomination for election was previously so approved) shall be considered an Incumbent Director; but, provided, further, that any such individual whose initial assumption of office occurs as a result of either an actual or threatened election contest (as such terms are used in Rule 14a-11 promulgated under the Act) or other actual or threatened solicitation of proxies or consents by or on behalf of a person or legal entity other than the Board shall not be considered an Incumbent Director; provided finally, however, that, as of any time, any member of the Board who has been a director for at least twelve (12) consecutive months immediately prior to such time shall be considered an Incumbent Director for purposes of this definition, other than for the purpose of the first proviso of this definition; or

(iv) there is consummated a merger or consolidation of the Company or any direct or indirect subsidiary of the Company or a sale or other disposition of the assets of the Company that have a total gross fair market value equal to or greater than 40% of the total gross fair market value of the assets of the Company immediately prior to such acquisition (“Corporate Transaction”); excluding, however, such a Corporate Transaction pursuant to which all or substantially all of the individuals and entities who are the Beneficial Owners, respectively, of the outstanding Company Stock and Total Voting Power immediately prior to such Corporate Transaction will Beneficially Own, directly or indirectly, more than 50%, respectively, of the outstanding Company Stock and the combined voting power of the then outstanding Company Stock and the combined voting power of the then outstanding securities entitled to vote generally in the election of directors of the company resulting from such Corporate Transaction (including, without limitation, a company that, as a result of such transaction, owns the Company or all or substantially all of the Company’s assets either directly or through one or more subsidiaries) in substantially the same proportions as their ownership immediately prior to such Corporate Transaction of the outstanding Company Stock and Total Voting Power, as the case may be.

Notwithstanding anything in this definition to the contrary, an event that does not constitute a change in the ownership of the Company, a change in the effective control of the Company, or a change in the ownership of a substantial portion of the assets of the Company, each as defined in Section 1.409A-3(i)(5) of the Treasury Regulations, shall not constitute a Change of Control for purposes of this Plan.

2.9 Claimant. Claimant means a Participant or Beneficiary filing a claim under Article XI of this Plan.

2.10 Code. Code means the Internal Revenue Code of 1986, as amended from time to time.

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UNIFI, Inc. Deferred Compensation Plan

2.11 Code Section 409A. Code Section 409A means section 409A of the Code, and regulations and other guidance issued by the Treasury Department and Internal Revenue Service thereunder.

2.12 Committee. Committee means the Company or a committee appointed by the Company to administer the Plan.

2.13 Company. Company means UNIFI, Inc.

2.14 Company Credit. Company Credit means a credit by a Participating Employer to a Participant’s Retirement Account or SERP Account(s) in accordance with the provisions of Article V of the Plan. Unless the context clearly indicates otherwise, a reference to Company Credit shall include Earnings attributable to such contribution.

2.15 Compensation Deferral Agreement. Compensation Deferral Agreement means an agreement between a Participant and a Participating Employer that specifies: (i) the amount of each component of Incentive Compensation that the Participant has elected to defer to the Plan in accordance with the provisions of Article IV, (ii) the Payment Schedule applicable to one or more Accounts established under such Compensation Deferral Agreement and (iii) the allocation of Deferrals among any of such Accounts.

2.16 Deferral. Deferral means a credit to a Participant’s Account(s) that records that portion of the Participant’s Incentive Compensation that the Participant has elected to defer to the Plan in accordance with the provisions of Article IV. Unless the context of the Plan clearly indicates otherwise, a reference to Deferrals includes Earnings attributable to such Deferrals.

2.17 Earnings. Earnings means an adjustment to the value of an Account in accordance with Article VII.

2.18 Effective Date. Effective Date means November 1, 2021.

2.19 Eligible Employee. Eligible Employee means an Employee who is a member of a select group of management or highly compensated employees who has been notified during an applicable enrollment of his or her status as an Eligible Employee. The Committee has the discretion to determine which Employees are Eligible Employees for each enrollment.

2.20 Employee. Employee means a common-law employee of an Employer.

2.21 Employer. Employer means the Company and each Affiliate.

2.22 ERISA. ERISA means the Employee Retirement Income Security Act of 1974, as amended from time to time.

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UNIFI, Inc. Deferred Compensation Plan

2.23 Fiscal Year Compensation. Fiscal Year Compensation means Incentive Compensation earned during one or more consecutive fiscal years of a Participating Employer, all of which is paid after the last day of such fiscal year or years.

2.2 Flex Account. Flex Account means a Separation Account or Specified Date Account established under the terms of a Participant’s Compensation Deferral Agreement. Unless the Committee specifies otherwise, a Participant may maintain no more than five (5) Flex Accounts at any one time.

2.25 Incentive Compensation. Incentive Compensation means a Participant’s cash bonus, commissions, incentive awards, equity-based compensation or such other compensation (other than Base Compensation) approved by the Committee as Incentive Compensation that may be deferred under Section 4.2 of this Plan, excluding any Incentive Compensation that has been previously deferred under this Plan or any other arrangement subject to Code Section 409A and excluding any compensation that is not U.S. source income.

2.26 Participant. Participant means an individual described in Article III.

2.27 Participating Employer. Participating Employer means the Company and each Affiliate who has adopted the Plan with the consent of the Company.  Each Participating Employer shall be identified on Schedule A attached hereto.

2.28 Payment Schedule. Payment Schedule means the date as of which payment of an Account will commence and the form in which payment of such Account will be made under the terms of a payment election in effect for such Account under the terms of this Plan.

2.29 Performance-Based Compensation. Performance-Based Compensation means Incentive Compensation where the amount of, or entitlement to, the Incentive Compensation is contingent on the satisfaction of pre-established organizational or individual performance criteria relating to a performance period of at least 12 consecutive months or 52 consecutive weeks. Organizational or individual performance criteria are considered pre-established if established in writing by not later than 90 days after the commencement of the period of service to which the criteria relate, provided that the outcome is substantially uncertain at the time the criteria are established. Performance-Based Compensation shall not include any Incentive Compensation payable upon the Participant’s death or disability (as defined in Treas. Section 1.409A-1(e)) without regard to the satisfaction of the performance criteria.

2.30 Plan. Plan means “UNIFI, Inc. Deferred Compensation Plan” as documented herein and as may be amended from time to time hereafter. However, to the extent permitted or required under Code Section 409A, the term Plan may in the appropriate context also means a portion of the Plan that is treated as a single plan under Treas. Reg. Section 1.409A-1(c), or the Plan or portion of the Plan and any other nonqualified deferred compensation plan or portion thereof that is treated as a single plan under such section.

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UNIFI, Inc. Deferred Compensation Plan

2.31 Plan Year. Plan Year means January 1 through December 31.

2.32 Retirement Account.  Retirement Account means an Account established by the Committee to record Company Credits (other than SERP Credits) and Deferrals allocated to the Retirement Account pursuant to a Participant’s Compensation Deferral Agreement. The Retirement Account is payable to a Participant upon Separation from Service in accordance with Section 6.3.

2.33 Separation Account. Separation Account means an Account established by the Committee in accordance with a Participant’s Compensation Deferral Agreement to record Deferrals allocated to such Account by the Participant and which are payable upon the Participant’s Separation from Service as set forth in Section 6.3.

2.34 Separation from Service. Separation from Service means an Employee’s termination of employment with the Employer and all Affiliates.

Except in the case of an Employee on a bona fide leave of absence as provided below, an Employee is deemed to have incurred a Separation from Service if the Employer and the Employee reasonably anticipated that the level of services to be performed by the Employee after a date certain would be reduced to 20% or less of the average services rendered by the Employee during the immediately preceding 36-month period (or the total period of employment, if less than 36 months), disregarding periods during which the Employee was on a bona fide leave of absence.

An Employee who is absent from work due to military leave, sick leave, or other bona fide leave of absence shall incur a Separation from Service on the first date immediately following the later of: (i) the six month anniversary of the commencement of the leave, or (ii) the expiration of the Employee’s right, if any, to reemployment under statute or contract.

If a Participant ceases to provide services as an Employee and begins providing services as an independent contractor for the Employer, a Separation from Service shall occur only if the parties anticipate that the level of services to be provided as an independent contractor are such that a Separation from Service would have occurred if the Employee had continued to provide services at that level as an Employee.  If, in accordance with the preceding sentence, no Separation from Service occurs as of the date the individual’s employment status changes, a Separation from Service shall occur thereafter only upon the 12-month anniversary of the date all contracts with the Employer have expired, provided the Participant does not perform services for the Employer during that time.     

For purposes of determining whether a Separation from Service has occurred, the Employer means the Employer as defined in Section 2.21 of the Plan, except that in applying Code sections 1563(a)(1), (2) and (3) for purposes of determining whether another organization is an Affiliate of the Company under Code Section 414(b), and in applying Treasury Regulation Section 1.414(c)-2 for purposes of determining whether another organization is an Affiliate of the Company under Code Section 414(c), “at least

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UNIFI, Inc. Deferred Compensation Plan

50 percent” shall be used instead of “at least 80 percent” each place it appears in those sections.

The Committee specifically reserves the right to determine whether a sale or other disposition of substantial assets to an unrelated party constitutes a Separation from Service with respect to a Participant providing services to the seller immediately prior to the transaction and providing services to the buyer after the transaction.

2.35 Specified Date Account. Specified Date Account means an Account established by the Committee to record the amounts payable in a future year as specified in the Participant’s Compensation Deferral Agreement.

2.36 SERP Account. SERP Account means the Account established to record annual SERP Credits and Earnings thereon. A Participant may have up to two SERP Accounts including:

(a) The SERP Account established under the terms of the UNIFI, Inc. Supplemental Key Employee Retirement Plan, as established effective July 26, 2006, as amended through January 23, 2018, which records SERP Credits with respect to Base Compensation earned through December 31, 2021 and Earnings thereon; and

(b) The SERP Account established under the terms of this Plan, which records SERP credits with respect to Base Compensation earned on and after January 1, 2022.

2.37 SERP Credit. SERP Credit means an annual credit under Section 5.1 to a Participant’s SERP Account described in Section 2.36(b).

2.38 Substantial Risk of Forfeiture. Substantial Risk of Forfeiture has the meaning specified in Treas. Reg. Section 1.409A-1(d).

2.39 Unforeseeable Emergency. Unforeseeable Emergency means a severe financial hardship to the Participant resulting from an illness or accident of the Participant, the Participant’s spouse, the Participant’s dependent (as defined in Code section 152, without regard to section 152(b)(1), (b)(2), and (d)(1)(B)), or a Beneficiary; loss of the Participant’s property due to casualty (including the need to rebuild a home following damage to a home not otherwise covered by insurance, for example,  as a result of a natural disaster); or other similar extraordinary and unforeseeable circumstances arising as a result of events beyond the control of the Participant. The types of events which may qualify as an Unforeseeable Emergency may be limited by the Committee.

2.40 Valuation Date. Valuation Date means each Business Day.

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UNIFI, Inc. Deferred Compensation Plan

Article III

Eligibility and Participation

3.1 Eligibility and Participation. All Eligible Employees may enroll in the Plan. Eligible Employees become Participants on the first to occur of (i) the date on which the first Compensation Deferral Agreement becomes irrevocable under Article IV, or (ii) the date Company Credits (including SERP Credits) are credited to an Account on behalf of such Eligible Employee.

3.2 Duration. Only Eligible Employees may submit Compensation Deferral Agreements during an enrollment and receive Company Credits (including SERP Credits) during the Plan Year. A Participant who is no longer an Eligible Employee but has not incurred a Separation from Service will not be allowed to submit Compensation Deferral Agreements but may otherwise exercise all of the rights of a Participant under the Plan with respect to his or her Account(s). On and after a Separation from Service, a Participant shall remain a Participant as long as his or her Account Balance is greater than zero (0).  All Participants, regardless of employment status, will continue to be credited with Earnings and during such time may continue to make allocation elections as provided in Section 7.4. An individual shall cease being a Participant in the Plan when his Account has been reduced to zero (0).

3.3 Rehires.  An Eligible Employee who Separates from Service and who subsequently resumes performing services for an Employer in the same calendar year (regardless of eligibility) will have his or her Compensation Deferral Agreement for such year, if any, reinstated, but his or her eligibility to participate in the Plan in years subsequent to the year of rehire shall be governed by the provisions of Section 3.1.

Article IV

Deferrals

4.1 Deferral Elections, Generally.

(a) An Eligible Employee may make an initial election to defer Incentive Compensation by submitting a Compensation Deferral Agreement during the enrollment periods established by the Committee and in the manner specified by the Committee, but in any event, in accordance with Section 4.2. Unless an earlier date is specified in the Compensation Deferral Agreement, deferral elections with respect to an Incentive Compensation source (such as bonus, commissions or other Incentive Compensation) become irrevocable on the latest date applicable to such Incentive Compensation source under Section 4.2.

(b) A Compensation Deferral Agreement that is not timely filed with respect to a service period or component of Incentive Compensation, or that is submitted by a Participant who Separates from Service prior to the latest date such agreement would become irrevocable under Section 409A, shall be considered null and void and shall not take effect with respect to such item of Incentive Compensation. The

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UNIFI, Inc. Deferred Compensation Plan

Committee may modify or revoke any Compensation Deferral Agreement prior to the date the election becomes irrevocable under the rules of Section 4.2.

(c) The Committee may permit different deferral amounts for each component of Incentive Compensation and may establish a minimum or maximum deferral amount for each such component. Unless otherwise specified by the Committee in the Compensation Deferral Agreement, Participants may defer a minimum of 5% and a maximum of 100% of their Incentive Compensation earned during the applicable performance period.

(d) Deferrals of cash Incentive Compensation shall be calculated with respect to the gross cash Incentive Compensation payable to the Participant prior to any deductions or withholdings, but shall be reduced by the Committee as necessary so as not to exceed 100% of the cash Incentive Compensation of the Participant remaining after deduction of all required income and employment taxes, required employee benefit deductions, deferrals to 401(k) plans and other deductions required by law. Changes to payroll withholdings that affect the amount of Incentive Compensation being deferred to the Plan shall be allowed only to the extent permissible under Code Section 409A.

(e) The Eligible Employee shall specify on his or her Compensation Deferral Agreement the amount of Deferrals and whether to allocate Deferrals to the Retirement Account or to one or more Flex Accounts. If no designation is made, Deferrals shall be allocated to the Retirement Account.  SERP Credits are always allocated 100% to the Participant’s SERP Account.

4.2Timing Requirements for Compensation Deferral Agreements.

(a) Initial Eligibility. The Committee may permit an Eligible Employee to defer Incentive Compensation earned in the first year of eligibility.  The Committee may also permit a Participant to make a Payment Schedule election for his or her SERP Account described in Section 2.36(b). The Compensation Deferral Agreement must be filed within 30 days after attaining Eligible Employee status and becomes irrevocable not later than the 30^th day.

A Compensation Deferral Agreement filed under this paragraph applies to Incentive Compensation and SERP Credits earned after the date that the Compensation Deferral Agreement becomes irrevocable.  No portion of a SERP Credit may be attributed to Base Compensation earned prior to the date the Compensation Deferral Agreement becomes irrevocable.

(b) Prior Year Election. Except as otherwise provided in this Section 4.2, the Committee may permit an Eligible Employee to defer Incentive Compensation and/or make the Participant’s initial Payment Schedule election for his or her SERP Account described in Section 2.36(b) by filing a Compensation Deferral Agreement no later than December 15 of the year prior to the calendar year in

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which theIncentive Compensationto be deferred or Base Compensation used to determine the SERP Credit is earned. A Compensation Deferral Agreementfiled under this paragraph shall become irrevocable with respect to such Incentive Compensationand SERP credit not later thanthe December 15filing deadline.

(c) Performance-Based Compensation. The Committee may permit an Eligible Employee to defer Incentive Compensation which qualifies as Performance-Based Compensation by filing a Compensation Deferral Agreement no later than the date that is six months before the end of the applicable performance period, provided that:

(i) the Participant performs services continuously from the later of the beginning of the performance period or the date the performance criteria are established through the date the Compensation Deferral Agreement is submitted; and

(ii) the Incentive Compensation is not readily ascertainable as of the date the Compensation Deferral Agreement is filed.

Any election to defer Performance-Based Compensation that is made in accordance with this paragraph and that becomes payable as a result of the Participant’s death or disability (as defined in Treas. Reg. Section 1.409A-1(e)) or upon a Change of Control prior to the satisfaction of the performance criteria, will be void unless it would be considered timely under another rule described in this Section.

(d) Fiscal Year Compensation. The Committee may permit an Eligible Employee to defer Incentive Compensation that is Fiscal Year Compensation by filing a Compensation Deferral Agreement prior to the first day of the fiscal year or years in which such Fiscal Year Compensation is earned. A Compensation Deferral Agreement submitted in accordance with this paragraph becomes irrevocable on the last day of the fiscal year immediately preceding the fiscal year to which the Compensation Deferral Agreement applies.

(e) “Evergreen” Deferral Elections. The Committee, in its discretion, may provide that Compensation Deferral Agreements will continue in effect for subsequent years or performance periods by communicating that intention to Participants in writing prior to the date Compensation Deferral Agreements become irrevocable under this Section 4.2. An evergreen Compensation Deferral Agreement may be revoked or modified in writing prospectively by the Participant or the Committee with respect to Incentive Compensation for which such election remains revocable under this Section 4.2.

A Compensation Deferral Agreement is deemed to be revoked for subsequent years if the Participant is not an Eligible Employee as of the last permissible date

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for making elections under this Section 4.2 or if theCompensation Deferral Agreement is cancelled in accordance with Section 4.6.

4.3 Allocation of Deferrals. A Compensation Deferral Agreement may allocate Deferrals to the Retirement Account or to one or more Flex Accounts. The Committee may, in its discretion, establish in a written communication during enrollment a minimum deferral period for the establishment of a Specified Date Account (for example, the second Plan Year following the year Incentive Compensation is first allocated to such Accounts). In the event a Participant’s Compensation Deferral Agreement allocates a component of Incentive Compensation to a Specified Date Account that commences payment in the year such Incentive Compensation is earned, the Compensation Deferral Agreement shall be deemed to allocate the Deferral to the Participant’s Specified Date Account having the next earliest payment year. If the Participant has no other Specified Date Accounts, the Committee will allocate the Deferral to the Retirement Account.

4.4 Deductions from Pay. The Committee has the authority to determine the payroll practices under which any component of Incentive Compensation subject to a Compensation Deferral Agreement will be deducted from a Participant’s Incentive Compensation.

4.5 Vesting. Participant Deferrals of cash Incentive Compensation shall be 100% vested at all times.  Deferrals of vesting awards of Incentive Compensation shall become vested in accordance with the provisions of the underlying award.

4.6 Cancellation of Deferrals. The Committee may cancel a Participant’s Deferrals: (i) for the balance of the Plan Year in which an Unforeseeable Emergency occurs, and (ii) during periods in which the Participant is unable to perform the duties of his or her position or any substantially similar position due to a mental or physical impairment that can be expected to result in death or last for a continuous period of at least six months, provided cancellation occurs by the later of the end of the taxable year of the Participant or the 15^th day of the third month following the date the Participant incurs the disability (as defined in this paragraph (ii)).

Article V

Company Credits

5.1 SERP Credit. Following the close of each calendar year and as soon as administratively practicable, the Company will credit Eligible Employees’ SERP Account described in Section 2.36(b) with a SERP Credit in the following amount:

(a) to an Eligible Employee who is not an executive officer of a Participating Employer, 5 and 1/2% of Base Compensation earned during the immediately preceding calendar year subject to pro-rate at the discretion of the Committee; and

(b) to an Eligible Employee who is an executive officer of a Participating Employer, 8 and 1/2% of Base Compensation earned during the immediately preceding calendar year subject to pro-rate at the discretion of the Committee.

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The Committee determines an Eligible Employee’s status as an executive officer in its sole discretion.

5.2 Discretionary Company Credits. A Participating Employer may, from time to time in its sole and absolute discretion, credit discretionary Company Credits in the form of matching, profit sharing or other contributions to any Participant in any amount determined by the Participating Employer. Company Credits are credited to the Participant’s Retirement Account.

Make-Up Matching Contribution. Company Credits may take the form of “make-up” matching contributions, at the same matching contribution rate provided under the Company 401(k) plan with respect to Deferrals that reduce 401(k) plan compensation below the limitation set forth in Code Section 401(a)(17).

Supplemental Matching Contribution. Company Credits may take the form of “supplemental” matching contributions, at the same contribution rate provided under the Company 401(k) plan with respect to compensation deferred above the compensation limit set forth in Code Section 401(a)(17).

Discretionary Company Credit. In addition to matching credits, a Participating Employer may, from time to time in its sole discretion, credit discretionary Company Credits to any Participant’s Retirement Account in any amount.  

The fact that a discretionary Company Credit is credited in one year shall not obligate the Participating Employer to continue to make such Company Credits in subsequent years.

5.3 Vesting.

SERP Accounts are 100% vested at all times.

Make-up and supplemental matching contributions vest at the same rate as matching contributions under the Company 401(k) plan.

Discretionary Company Credits other than matching credits vest according to the schedule specified by the Committee on or before the time the contributions are made.  If no such schedule is specified, Discretionary Company Credits are 100% vested.

All Company Credits hereunder become 100% vested, if while employed by an Employer, a Participant dies, becomes disabled, his or her Employer experiences a Change in Control or the Participant attains age 65.

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Article VI

Payments from Accounts

6.1 General Rules. A Participant’s Accounts become payable upon the first to occur of the payment events applicable to such Account under (i) Sections 6.2 or 6.3 (as elected) and (ii) Sections 6.4 through 6.6.

Payment events and Payment Schedules elected by the Participant shall be set forth in a valid Compensation Deferral Agreement that establishes the Account to which such elections apply in accordance with Article IV or in a valid modification election applicable to such Account as described in Section 6.9.

Payment amounts are based on Account Balances as of the last Valuation Date of the month preceding the month actual payment is made.

6.2 Specified Date Accounts.

Commencement. Payment is made or begins in the calendar year designated by the Participant.

Form of Payment. Payment will be made in a lump sum, unless the Participant elected to receive a designated number of annual installments up to 10 years.

The time and form of payment of Specified Date Accounts is unaffected by an earlier Separation from Service described in Section 6.3.

6.3 Separation from Service. Upon a Participant’s Separation from Service other than death, the Participant is entitled to receive his or her vested Retirement Account, Separation Accounts and SERP Accounts.

Commencement. A Participant’s Retirement Account, Separation Accounts and SERP Account described in Section 2.36(b) commence payment on the later of

(a) the calendar year next following the calendar year in which Separation from Service occurs, (unless the Participant elected to receive an Account in a later calendar year) and

(b) six months and one day following the Participant’s Separation from Service.  

A Participant’s SERP Account described in Section 2.36(a) commences payment six months and one day following his or her Separation from Service.

Form of Payment. The Retirement Account, Separation Accounts and SERP Account described in Section 2.36(b) will be paid in a single lump sum unless the Participant

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elected with respect to an Account to receive a designated number of annual installments up to 10 years.

A Participant’s SERP Account described in Section 2.36(a) will be paid in a lump sum.

6.4 Death.  Notwithstanding anything to the contrary in this Article VI, upon the death of the Participant (regardless of whether such Participant is an Employee at the time of death), all remaining vested Account Balances shall be paid to his or her Beneficiary in a single lump sum no later than December 31 of the calendar year following the year of the Participant’s death.

(a) Designation of Beneficiary in General.  The Participant shall designate a Beneficiary in the manner and on such terms and conditions as the Committee may prescribe.  No such designation shall become effective unless filed with the Committee during the Participant’s lifetime.  Any designation shall remain in effect until a new designation is filed with the Committee; provided, however, that in the event a Participant designates his or her spouse as a Beneficiary, such designation shall be automatically revoked upon the dissolution of the marriage unless, following such dissolution, the Participant submits a new designation naming the former spouse as a Beneficiary.  A Participant may from time to time change his or her designated Beneficiary without the consent of a previously-designated Beneficiary by filing a new designation with the Committee.

(b) No Beneficiary.  If a designated Beneficiary does not survive the Participant, or if there is no valid Beneficiary designation, amounts payable under the Plan upon the death of the Participant shall be paid to the Participant’s spouse, or if there is no surviving spouse, then to the duly appointed and currently acting personal representative of the Participant’s estate.  

6.5 Unforeseeable Emergency.  A Participant who experiences an Unforeseeable Emergency may submit a written request to the Committee to receive payment of all or any portion of his or her vested Retirement and Flex Accounts. If the emergency need cannot be relieved by cessation of Deferrals to the Plan, the Committee may approve an emergency payment therefrom not to exceed the amount reasonably necessary to satisfy the need, taking into account the additional compensation that is available to the Participant as the result of cancellation of deferrals to the Plan, including amounts necessary to pay any taxes or penalties that the Participant reasonably anticipates will result from the payment. The amount of the emergency payment shall be subtracted from the Retirement Account, then Separation Accounts and then from the Specified Date Accounts, starting with the Account having the latest commencement date until fully distributed, then continuing in this manner with the next latest Account until the full amount of the distribution is made. Emergency payments shall be paid in a single lump sum within the 90-day period following the date the payment is approved by the Committee.  The Committee may specify that Deferrals will be distributed before any Company Credits.  In no event will the SERP Accounts become payable due to an Unforeseeable Emergency.

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6.6 Administrative Cash-Out of Small Balances.  Notwithstanding anything to the contrary in this Article VI, the Committee may at any time and without regard to whether a payment event has occurred, direct in writing an immediate lump sum payment of the Participant’s Accounts if the balance of such Accounts, combined with any other amounts required to be treated as deferred under a single plan pursuant to Code Section 409A, does not exceed the applicable dollar amount under Code Section 402(g)(1)(B), provided any other such aggregated amounts are also distributed in a lump sum at the same time.

The foregoing rule may be applied separately to (a) a Participant’s vested Company Credits and Earnings thereon, and (b) a Participant’s Deferrals and Earnings thereon, if recorded separately on the Company’s books and records.

6.7 Acceleration of or Delay in Payments. Notwithstanding anything to the contrary in this Article VI, the Committee, in its sole and absolute discretion, may elect to accelerate the time or form of payment of an Account, provided such acceleration is permitted under Treas. Reg. Section 1.409A-3(j)(4). The Committee may also, in its sole and absolute discretion, delay the time for payment of an Account, to the extent permitted under Treas. Reg. Section 1.409A-2(b)(7).

6.8 Rules Applicable to Installment Payments.  If a Payment Schedule specifies installment payments, payments will be made beginning as of the payment commencement date for such installments and shall continue to be made in each subsequent payment period until the number of installment payments specified in the Payment Schedule has been paid. The amount of each installment payment shall be determined by dividing (a) by (b), where (a) equals the Account Balance as of the last Valuation Date in the month preceding the month of payment and (b) equals the remaining number of installment payments.  For purposes of Section 6.9, installment payments will be treated as a single payment. If an Account is payable in installments, the Account will continue to be credited with Earnings in accordance with Article VII hereof until the Account is completely distributed.

6.9 Modifications to Payment Schedules.  A Participant may modify the Payment Schedule with respect to an Account, consistent with the permissible Payment Schedules available under the Plan for the applicable payment event, provided such modification complies with the requirements of this Section 6.9. A Participant may modify his or her SERP Account described in Section 2.36(a) to pay in any form of payment available to the SERP Account described in Section 2.36(b).

(a) Time of Election. The modification election must be submitted to the Committee not less than 12 months prior to the date payments would have commenced under the Payment Schedule in effect prior to modification (the “Prior Election”).

(b) Date of Payment under Modified Payment Schedule. The date payments are to commence under the modified Payment Schedule must be no earlier than five years after the date payment would have commenced under the Prior Election. Under no circumstances may a modification election result in an acceleration of

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payments in violation of Code Section 409A.  If the Participant modifies only the form, and not the commencement date for payment, payments shall commence on the fifth anniversary of the date payment would have commenced under the Prior Election.

(c) Irrevocability; Effective Date. A modification election is irrevocable when filed and becomes effective 12 months after the filing date.

(d) Effect on Accounts. An election to modify a Payment Schedule is specific to the Account or payment event to which it applies, and shall not be construed to affect the Payment Schedules or payment events of any other Accounts.

Article VII

Valuation of Account Balances; Investments

7.1 Valuation. Deferrals shall be credited to appropriate Accounts on the date such Incentive Compensation would have been paid to the Participant absent the Compensation Deferral Agreement. Valuation of Accounts shall be performed under procedures approved by the Committee.

7.2 Earnings Credit. Each Account will be credited with Earnings on each Business Day, based upon the Participant’s investment allocation among a menu of investment options selected in advance by the Committee, in accordance with the provisions of this Article VII (“investment allocation”).

7.3 Investment Options. Investment options will be determined by the Committee. The Committee, in its sole discretion, shall be permitted to add or remove investment options from the Plan menu from time to time, provided that any such additions or removals of investment options shall not be effective with respect to any period prior to the effective date of such change.

7.4 Investment Allocations. A Participant’s investment allocation constitutes a deemed, not actual, investment among the investment options comprising the investment menu. At no time shall a Participant have any real or beneficial ownership in any investment option included in the investment menu, nor shall the Participating Employer or any trustee acting on its behalf have any obligation to purchase actual securities as a result of a Participant’s investment allocation. A Participant’s investment allocation shall be used solely for purposes of adjusting the value of a Participant’s Account Balances.

A Participant shall specify an investment allocation for each of his Accounts in accordance with procedures established by the Committee. Allocation among the investment options must be designated in increments of 1%. The Participant’s investment allocation will become effective the next Business Day.

A Participant may change an investment allocation on any Business Day, both with respect to future credits to the Plan and with respect to existing Account Balances, in

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accordance with procedures adopted by the Committee. Changes shall become effective on the next Business Day, and shall be applied prospectively.

7.5 Unallocated Deferrals and Accounts. If the Participant fails to make an investment allocation with respect to an Account, such Account shall be invested in an investment option, the primary objective of which is the preservation of capital, as determined by the Committee.

7.6 Valuations Final After 180 Days. The Participant shall have 180 days following the Valuation Date on which the Participant failed to receive the full amount of Earnings and to file a claim under Article XI for the correction of such error.

Article VIII

Administration

8.1 Plan Administration. This Plan shall be administered by the Committee which shall have discretionary authority to make, amend, interpret and enforce all appropriate rules and regulations for the administration of this Plan and to utilize its discretion to decide or resolve any and all questions, including but not limited to eligibility for benefits and interpretations of this Plan and its terms, as may arise in connection with the Plan. Claims for benefits shall be filed with the Committee and resolved in accordance with the claims procedures in Article XI.

8.2 Administration Upon Change in Control. Upon a change in control affecting the Company, the Committee, as constituted immediately prior to such change in control, shall continue to act as the Committee. The Committee, by a vote of a majority of its members, shall have the authority (but shall not be obligated) to appoint an independent third party to act as the Committee. For purposes of this Section 8.2, a “change in control” means a change in control within the meaning of the rabbi trust agreement associated with the Plan or if no such definition is provided, the term shall have the meaning under Code Section 409A.

Upon such change in control, the Company may not remove the Committee or its members, unless a majority of Participants and Beneficiaries with Account Balances consent to the removal and replacement of the Committee. Notwithstanding the foregoing, the Committee shall not have authority to direct investment of trust assets under any rabbi trust described in Section 10.2.

The Participating Employers shall, with respect to the Committee identified under this Section: (i) pay all reasonable expenses and fees of the Committee, (ii) indemnify the Committee (including individuals serving as Committee members) against any costs, expenses and liabilities including, without limitation, attorneys’ fees and expenses arising in connection with the performance of the Committee’s duties hereunder, except with respect to matters resulting from the Committee’s gross negligence or willful misconduct, and (iii) supply full and timely information to the Committee on all matters related to the

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Plan, any rabbi trust, Participants, Beneficiaries and Accounts as the Committee may reasonably require.

8.3 Withholding. The Participating Employer shall have the right to withhold from any payment due under the Plan (or with respect to any amounts credited to the Plan) any taxes required by law to be withheld in respect of such payment (or credit). Withholdings with respect to amounts credited to the Plan shall be deducted from compensation that has not been deferred to the Plan.

8.4 Indemnification. The Participating Employers shall indemnify and hold harmless each employee, officer, director, agent or organization, to whom or to which are delegated duties, responsibilities, and authority under the Plan or otherwise with respect to administration of the Plan, including, without limitation, the Committee, its delegees and its agents, against all claims, liabilities, fines and penalties, and all expenses reasonably incurred by or imposed upon him or it (including but not limited to reasonable attorney fees) which arise as a result of his or its actions or failure to act in connection with the operation and administration of the Plan to the extent lawfully allowable and to the extent that such claim, liability, fine, penalty, or expense is not paid for by liability insurance purchased or paid for by the Participating Employer. Notwithstanding the foregoing, the Participating Employer shall not indemnify any person or organization if his or its actions or failure to act are due to gross negligence or willful misconduct or for any such amount incurred through any settlement or compromise of any action unless the Participating Employer consents in writing to such settlement or compromise.

8.5 Delegation of Authority. In the administration of this Plan, the Committee may, from time to time, employ agents and delegate to them such administrative duties as it sees fit, and may from time to time consult with legal counsel who shall be legal counsel to the Company.

8.6 Binding Decisions or Actions. The decision or action of the Committee in respect of any question arising out of or in connection with the administration, interpretation and application of the Plan and the rules and regulations thereunder shall be final and conclusive and binding upon all persons having any interest in the Plan.

Article IX

Amendment and Termination

9.1 Amendment and Termination. The Company may at any time and from time to time amend the Plan or may terminate the Plan as provided in this Article IX. Each Participating Employer may also terminate its participation in the Plan.

9.2 Amendments. The Company, by action taken by its Board of Directors, may amend the Plan at any time and for any reason, provided that any such amendment shall not reduce the vested Account Balances of any Participant accrued as of the date of any such amendment or restatement (as if the Participant had incurred a voluntary Separation from Service on such date). The Board of Directors of the Company may delegate to the

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Committee the authority to amend the Plan without the consent of the Board of Directors for the purpose of: (i) conforming the Plan to the requirements of law; (ii) facilitating the administration of the Plan; (iii) clarifying provisions based on the Committee’s interpretation of the Plan documents; and (iv) making such other amendments as the Board of Directors may authorize.  No amendment is needed to revise the list of Participating Employers set forth on Schedule A attached hereto.

9.3 Termination. The Company, by action taken by its Board of Directors, may terminate the Plan and pay Participants and Beneficiaries their Account Balances in a single lump sum at any time, to the extent and in accordance with Treas. Reg. Section 1.409A-3(j)(4)(ix).

9.4 Accounts Taxable Under Code Section 409A. The Plan is intended to constitute a plan of deferred compensation that meets the requirements for deferral of income taxation under Code Section 409A. The Committee, pursuant to its authority to interpret the Plan, may sever from the Plan or any Compensation Deferral Agreement any provision or exercise of a right that otherwise would result in a violation of Code Section 409A.

Article X

Informal Funding

10.1 General Assets. Obligations established under the terms of the Plan may be satisfied from the general funds of the Participating Employers, or a trust described in this Article X. No Participant, spouse or Beneficiary shall have any right, title or interest whatever in assets of the Participating Employers. Nothing contained in this Plan, and no action taken pursuant to its provisions, shall create or be construed to create a trust of any kind, or a fiduciary relationship, between the Participating Employers and any Employee, spouse, or Beneficiary. To the extent that any person acquires a right to receive payments hereunder, such rights are no greater than the right of an unsecured general creditor of the Participating Employer.

10.2 Rabbi Trust. A Participating Employer may, in its sole discretion, establish a grantor trust, commonly known as a rabbi trust, as a vehicle for accumulating assets to pay benefits under the Plan. Payments under the Plan may be paid from the general assets of the Participating Employer or from the assets of any such rabbi trust. Payment from any such source shall reduce the obligation owed to the Participant or Beneficiary under the Plan.

If a rabbi trust is in existence upon the occurrence of a “change in control”, as defined in such trust, the Participating Employer shall, upon such change in control, and on each anniversary of the change in control, contribute in cash or liquid securities such amounts as are necessary so that the value of assets after making the contributions exceed 125% of the total value of all Account Balances.

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Article XI

Claims

11.1 Filing a Claim. Any controversy or claim arising out of or relating to the Plan shall be filed in writing with the Committee which shall make all determinations concerning such claim. Any claim filed with the Committee and any decision by the Committee denying such claim shall be in writing and shall be delivered to the Participant or Beneficiary filing the claim (the “Claimant”).  Notice of a claim for payments shall be delivered to the Committee within 90 days of the latest date upon which the payment could have been timely made in accordance with the terms of the Plan and Code Section 409A, and if not paid, the Participant or Beneficiary must file a claim under this Article XI not later than 180 days after such latest date. If the Participant or Beneficiary fails to file a timely claim, the Participant forfeits any amounts to which he or she may have been entitled to receive under the claim.

(a) In General. Notice of a denial of benefits (other than claims based on disability) will be provided within 90 days of the Committee’s receipt of the Claimant's claim for benefits. If the Committee determines that it needs additional time to review the claim, the Committee will provide the Claimant with a notice of the extension before the end of the initial 90-day period. The extension will not be more than 90 days from the end of the initial 90-day period and the notice of extension will explain the special circumstances that require the extension and the date by which the Committee expects to make a decision.

(b) Disability Benefits. Notice of denial of claims based on disability will be provided within forty-five (45) days of the Committee’s receipt of the Claimant’s claim for disability benefits. If the Committee determines that it needs additional time to review the disability claim, the Committee will provide the Claimant with a notice of the extension before the end of the initial 45-day period. If the Committee determines that a decision cannot be made within the first extension period due to matters beyond the control of the Committee, the time period for making a determination may be further extended for an additional 30 days. If such an additional extension is necessary, the Committee shall notify the Claimant prior to the expiration of the initial 30-day extension. Any notice of extension shall indicate the circumstances necessitating the extension of time, the date by which the Committee expects to furnish a notice of decision, the specific standards on which such entitlement to a benefit is based, the unresolved issues that prevent a decision on the claim and any additional information needed to resolve those issues. A Claimant will be provided a minimum of 45 days to submit any necessary additional information to the Committee. In the event that a 30-day extension is necessary due to a Claimant’s failure to submit information necessary to decide a claim, the period for furnishing a notice of decision shall be tolled from the date on which the notice of the extension is sent to the Claimant until the earlier of the date the Claimant responds to the request for additional information or the response deadline.

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(c) Contents of Notice. If a claim for benefits is completely or partially denied, notice of such denial shall be in writing. Any electronic notification shall comply with the standards imposed by Department of Labor Regulation 29 CFR 2520.104b-1(c)(1)(i), (iii), and (iv). The notice of denial shall set forth the specific reasons for denial in plain language. The notice shall: (i) cite the pertinent provisions of the Plan document, and (ii) explain, where appropriate, how the Claimant can perfect the claim, including a description of any additional material or information necessary to complete the claim and why such material or information is necessary. The claim denial also shall include an explanation of the claims review procedures and the time limits applicable to such procedures, including the right to appeal the decision, the deadline by which such appeal must be filed and a statement of the Claimant’s right to bring a civil action under Section 502(a) of ERISA following an adverse decision on appeal and the specific date by which such a civil action must commence under Section 11.4.

In the case of a complete or partial denial of a disability benefit claim, the notice shall provide such information and shall be communicated in the manner required under applicable Department of Labor regulations.

11.2 Appeal of Denied Claims. A Claimant whose claim has been completely or partially denied shall be entitled to appeal the claim denial by filing a written appeal with a committee designated to hear such appeals (the “Appeals Committee”). A Claimant who timely requests a review of the denied claim (or his or her authorized representative) may review, upon request and free of charge, copies of all documents, records and other information relevant to the denial and may submit written comments, documents, records and other information relating to the claim to the Appeals Committee. All written comments, documents, records, and other information shall be considered “relevant” if the information: (i) was relied upon in making a benefits determination, (ii) was submitted, considered or generated in the course of making a benefits decision regardless of whether it was relied upon to make the decision, or (iii) demonstrates compliance with administrative processes and safeguards established for making benefit decisions. The review shall take into account all comments, documents, records, and other information submitted by the Claimant relating to the claim, without regard to whether such information was submitted or considered in the initial benefit determination. The Appeals Committee may, in its sole discretion and if it deems appropriate or necessary, decide to hold a hearing with respect to the claim appeal.

(a) In General. Appeal of a denied benefits claim (other than a disability benefits claim) must be filed in writing with the Appeals Committee no later than 60 days after receipt of the written notification of such claim denial. The Appeals Committee shall make its decision regarding the merits of the denied claim within 60 days following receipt of the appeal (or within 120 days after such receipt, in a case where there are special circumstances requiring extension of time for reviewing the appealed claim). If an extension of time for reviewing the appeal is required because of special circumstances, written notice of the extension shall be furnished to the Claimant prior to the commencement of the extension. The notice

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will indicate the special circumstances requiring the extension of time and the date by which the Appeals Committee expects to render the determination on review. The review will take into account comments, documents, records and other information submitted by the Claimant relating to the claim without regard to whether such information was submitted or considered in the initial benefit determination.

(b) Disability Benefits. Appeal of a denied disability benefits claim must be filed in writing with the Appeals Committee no later than 180 days after receipt of the written notification of such claim denial. The review shall be conducted in accordance with applicable Department of Labor regulations.

The Appeals Committee shall make its decision regarding the merits of the denied claim within 45 days following receipt of the appeal (or within 90 days after such receipt, in a case where there are special circumstances requiring extension of time for reviewing the appealed claim). If an extension of time for reviewing the appeal is required because of special circumstances, written notice of the extension shall be furnished to the Claimant prior to the commencement of the extension. The notice will indicate the special circumstances requiring the extension of time and the date by which the Appeals Committee expects to render the determination on review. Following its review of any additional information submitted by the Claimant, the Appeals Committee shall render a decision on its review of the denied claim.

(c) Contents of Notice. If a benefits claim is completely or partially denied on review, notice of such denial shall be in writing. Any electronic notification shall comply with the standards imposed by Department of Labor Regulation 29 CFR 2520.104b-1(c)(1)(i), (iii), and (iv). Such notice shall set forth the reasons for denial in plain language.

The decision on review shall set forth: (i) the specific reason or reasons for the denial, (ii) specific references to the pertinent Plan provisions on which the denial is based, (iii) a statement that the Claimant is entitled to receive, upon request and free of charge, reasonable access to and copies of all documents, records, or other information relevant (as defined above) to the Claimant’s claim, and (iv) a statement of the Claimant’s right to bring an action under Section 502(a) of ERISA, following an adverse decision on review and the specific date by which such a civil action must commence under Section 11.4.

For the denial of a disability benefit, the notice will also include such additional information and be communicated in the manner required under applicable Department of Labor regulations.

11.3 Claims Appeals Upon Change in Control. Upon a change in control, the Appeals Committee, as constituted immediately prior to such change in control, shall continue to act as the Appeals Committee. The Company may not remove any member of the

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Appeals Committee, but may replace resigning members if 2/3rds of the members of the Board of Directors of the Company and a majority of Participants and Beneficiaries with Account Balances consent to the replacement. For purposes of this Section 11.3, a “change in control” means a change in control within the meaning of the rabbi trust agreement associated with the Plan or if no such definition is provided, the term shall have the meaning under Code Section 409A.

The Appeals Committee shall have the exclusive authority at the appeals stage to interpret the terms of the Plan and resolve appeals under the Claims Procedure.

Each Participating Employer shall, with respect to the Committee identified under this Section: (i) pay its proportionate share of all reasonable expenses and fees of the Appeals Committee, (ii) indemnify the Appeals Committee (including individual committee members) against any costs, expenses and liabilities including, without limitation, attorneys’ fees and expenses arising in connection with the performance of the Appeals Committee hereunder, except with respect to matters resulting from the Appeals Committee’s gross negligence or willful misconduct, and (iii) supply full and timely information to the Appeals Committee on all matters related to the Plan, any rabbi trust, Participants, Beneficiaries and Accounts as the Appeals Committee may reasonably require.

11.4 Legal Action. A Claimant may not bring any legal action, including commencement of any arbitration, relating to a claim for benefits under the Plan unless and until the Claimant has followed the claims procedures under the Plan and exhausted his or administrative remedies under Sections 11.1 and 11.2. No such legal action may be brought more than twelve (12) months following the notice of denial of benefits under Section 11.2, or if no appeal is filed by the applicable appeals deadline, twelve (12) months following the appeals deadline.

If a Participant or Beneficiary prevails in a legal proceeding brought under the Plan to enforce the rights of such Participant or any other similarly situated Participant or Beneficiary, in whole or in part, the Participating Employer shall reimburse such Participant or Beneficiary for all legal costs, expenses, attorneys’ fees and such other liabilities incurred as a result of such proceedings. If the legal proceeding is brought in connection with a change in control as defined in Section 11.3, the Participant or Beneficiary may file a claim directly with the trustee for reimbursement of such costs, expenses and fees. For purposes of the preceding sentence, the amount of the claim shall be treated as if it were an addition to the Participant’s or Beneficiary’s Account Balance and will be included in determining the Participating Employer’s trust funding obligation under Section 10.2.

11.5 Discretion of Appeals Committee. All interpretations, determinations and decisions of the Appeals Committee with respect to any claim shall be made in its sole discretion, and shall be final and conclusive.

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11.6 Arbitration.

(a) Prior to Change in Control. If, prior to a change in control as defined in Section 11.3, any claim or controversy between a Participating Employer and a Participant or Beneficiary is not resolved through the claims procedure set forth in Article XI, such claim shall be submitted to and resolved exclusively by expedited binding arbitration by a single arbitrator.  Arbitration shall be conducted in accordance with the following procedures:

The complaining party shall promptly send written notice to the other party identifying the matter in dispute and the proposed remedy. Following the giving of such notice, the parties shall meet and attempt in good faith to resolve the matter. In the event the parties are unable to resolve the matter within 21 days, the parties shall meet and attempt in good faith to select a single arbitrator acceptable to both parties. If a single arbitrator is not selected by mutual consent within ten Business Days following the giving of the written notice of dispute, an arbitrator shall be selected from a list of nine persons each of whom shall be an attorney who is either engaged in the active practice of law or recognized arbitrator and who, in either event, is experienced in serving as an arbitrator in disputes between employers and employees, which list shall be provided by the main office of either JAMS, the American Arbitration Association (“AAA”) or the Federal Mediation and Conciliation Service. If, within three Business Days of the parties’ receipt of such list, the parties are unable to agree on an arbitrator from the list, then the parties shall each strike names alternatively from the list, with the first to strike being determined by the flip of a coin. After each party has had four strikes, the remaining name on the list shall be the arbitrator. If such person is unable to serve for any reason, the parties shall repeat this process until an arbitrator is selected.

Unless the parties agree otherwise, within 60 days of the selection of the arbitrator, a hearing shall be conducted before such arbitrator at a time and a place agreed upon by the parties. In the event the parties are unable to agree upon the time or place of the arbitration, the time and place shall be designated by the arbitrator after consultation with the parties. Within 30 days of the conclusion of the arbitration hearing, the arbitrator shall issue an award, accompanied by a written decision explaining the basis for the arbitrator’s award.

In any arbitration hereunder, the Participating Employer shall pay all administrative fees of the arbitration and all fees of the arbitrator, except that the Participant or Beneficiary may, if he/she/it wishes, pay up to one-half of those amounts. Each party shall pay its own attorneys’ fees, costs, and expenses, unless the arbitrator orders otherwise. The prevailing party in such arbitration, as determined by the arbitrator, and in any enforcement or other court proceedings, shall be entitled, to the extent permitted by law, to reimbursement from the other party for all of the prevailing party’s costs (including but not limited to the arbitrator’s compensation), expenses, and attorneys’ fees. The arbitrator shall

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have no authority to add to or to modify this Plan, shall apply all applicable law, and shall have no lesser and no greater remedial authority than would a court of law resolving the same claim or controversy. The arbitrator shall, upon an appropriate motion, dismiss any claim without an evidentiary hearing if the party bringing the motion establishes that it would be entitled to summary judgment if the matter had been pursued in court litigation.

The parties shall be entitled to discovery as follows: Each party may take no more than three depositions. The Participating Employer may depose the Participant or Beneficiary plus two other witnesses, and the Participant or Beneficiary may depose the Participating Employer, pursuant to Rule 30(b)(6) of the Federal Rules of Civil Procedure, plus two other witnesses. Each party may make such reasonable document discovery requests as are allowed in the discretion of the arbitrator.

The decision of the arbitrator shall be final, binding, and non-appealable, and may be enforced as a final judgment in any court of competent jurisdiction.

This arbitration provision of the Plan shall extend to claims against any parent, subsidiary, or affiliate of each party, and, when acting within such capacity, any officer, director, shareholder, Participant, Beneficiary, or agent of any party, or of any of the above, and shall apply as well to claims arising out of state and federal statutes and local ordinances as well as to claims arising under the common law or under this Plan.

Notwithstanding the foregoing, and unless otherwise agreed between the parties, either party may apply to a court for provisional relief, including a temporary restraining order or preliminary injunction, on the ground that the arbitration award to which the applicant may be entitled may be rendered ineffectual without provisional relief.

Any arbitration hereunder shall be conducted in accordance with the Federal Arbitration Act: provided, however, that, in the event of any inconsistency between the rules and procedures of the Act and the terms of this Plan, the terms of this Plan shall prevail.

If any of the provisions of this Section 11.6(a) are determined to be unlawful or otherwise unenforceable, in the whole part, such determination shall not affect the validity of the remainder of this section and this section shall be reformed to the extent necessary to carry out its provisions to the greatest extent possible and to insure that the resolution of all conflicts between the parties, including those arising out of statutory claims, shall be resolved by neutral, binding arbitration. If a court should find that the provisions of this Section 11.6(a) are not absolutely binding, then the parties intend any arbitration decision and award to be fully admissible in evidence in any subsequent action, given great weight by any finder of fact and treated as determinative to the maximum extent permitted by law.

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The parties do not agree to arbitrate any putative class action or any other representative action. The parties agree to arbitrate only the claims(s) of a single Participant or Beneficiary.

(b) Upon Change in Control. Upon a change in control as defined in Section 11.3, Section 11.6(a) shall not apply and any legal action initiated by a Participant or Beneficiary to enforce his or her rights under the Plan may be brought in any court of competent jurisdiction. Notwithstanding the Appeals Committee’s discretion under Sections 11.3 and 11.5, the court shall apply a de novo standard of review to any prior claims decision under Sections 11.1 through 11.3 or any other determination made by the Company, its Board of Directors, a Participating Employer, the Committee, or the Appeals Committee.

Article XII

General Provisions

12.1 Assignment. No interest of any Participant, spouse or Beneficiary under this Plan and no benefit payable hereunder shall be assigned as security for a loan, and any such purported assignment shall be null, void and of no effect, nor shall any such interest or any such benefit be subject in any manner, either voluntarily or involuntarily, to anticipation, sale, transfer, assignment or encumbrance by or through any Participant, spouse or Beneficiary. Notwithstanding anything to the contrary herein, however, the Committee has the discretion to make payments to an alternate payee in accordance with the terms of a domestic relations order (as defined in Code Section 414(p)(1)(B)).

The Company may assign any or all of its liabilities under this Plan in connection with any restructuring, recapitalization, sale of assets or other similar transactions affecting a Participating Employer without the consent of the Participant.

12.2 No Legal or Equitable Rights or Interest. No Participant or other person shall have any legal or equitable rights or interest in this Plan that are not expressly granted in this Plan. Participation in this Plan does not give any person any right to be retained in the service of the Participating Employer. The right and power of a Participating Employer to dismiss or discharge an Employee is expressly reserved. The Participating Employers make no representations or warranties as to the tax consequences to a Participant or a Participant’s beneficiaries resulting from a deferral of income pursuant to the Plan.

12.3 No Employment Contract. Nothing contained herein shall be construed to constitute a contract of employment between an Employee and a Participating Employer.

12.4 Notice. Any notice or filing required or permitted to be delivered to the Committee under this Plan shall be delivered in writing, in person, or through such electronic means as is established by the Committee. Notice shall be deemed given as of the date of delivery or, if delivery is made by mail, as of the date shown on the postmark on the receipt for registration or certification. Written transmission shall be sent by certified mail to:

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UNIFI, Inc.

7201 West Friendly avenue

greensboro, north carolina 27410

attn: human resources

Any notice or filing required or permitted to be given to a Participant under this Plan shall be sufficient if in writing or hand-delivered, or sent by mail to the last known address of  the Participant.

12.5 Headings. The headings of Sections are included solely for convenience of reference, and if there is any conflict between such headings and the text of this Plan, the text shall control.

12.6 Invalid or Unenforceable Provisions. If any provision of this Plan shall be held invalid or unenforceable, such invalidity or unenforceability shall not affect any other provisions hereof and the Committee may elect in its sole discretion to construe such invalid or unenforceable provisions in a manner that conforms to applicable law or as if such provisions, to the extent invalid or unenforceable, had not been included.

12.7 Lost Participants or Beneficiaries. Any Participant or Beneficiary who is entitled to a benefit from the Plan has the duty to keep the Committee advised of his or her current mailing address. If benefit payments are returned to the Plan or are not presented for payment after a reasonable amount of time, the Committee shall presume that the payee is missing. The Committee, after making such efforts as in its discretion it deems reasonable and appropriate to locate the payee, shall stop payment on any uncashed checks and may discontinue making future payments until contact with the payee is restored. If the Committee is unable to locate the Participant or Beneficiary after five years of the date payment is scheduled to be made the Participant’s Account will be forfeited, provided that a Participant’s Account shall not be credited with Earnings following the first anniversary of such date on which payment is to be made and further provided, however, that such benefit shall be reinstated, without further adjustment for interest, if a valid claim is made by or on behalf of the Participant or Beneficiary for all or part of the forfeited benefit.

12.8 Facility of Payment to a Minor.  If a distribution is to be made to a minor, or to a person who is otherwise incompetent, then the Committee may, in its discretion, make such distribution: (i) to the legal guardian, or if none, to a parent of a minor payee with whom the payee maintains his or her residence, or (ii) to the conservator or committee or, if none, to the person having custody of an incompetent payee. Any such distribution shall fully discharge the Committee, the Company, and the Plan from further liability on account thereof.

12.9 Governing Law. To the extent not preempted by ERISA, the laws of the State of North Carolina shall govern the construction and administration of the Plan.

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12.10 Compliance With Code Section 409A; No Guarantee.  This Plan is intended to be administered in compliance with Code Section 409A and each provision of the Plan shall be interpreted consistent with Code Section 409A.  Although intended to comply with Code Section 409A, this Plan shall not constitute a guarantee to any Participant or Beneficiary that the Plan in form or in operation will result in the deferral of federal or state income tax liabilities or that the Participant or Beneficiary will not be subject to the additional taxes imposed under Section 409A. No Employer shall have any legal obligation to a Participant with respect to taxes imposed under Code Section 409A.

IN WITNESS WHEREOF, the undersigned executed this Plan as of the 1st day of November, 2021, to be effective as of the Effective Date.

UNIFI, INC.

By:	Craig A. Creaturo   (Print Name)
Its:	Chief Financial Officer (Title)
	/s/ CRAIG A. CREATURO  (Signature)

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UNIFI, Inc. Deferred Compensation Plan

Schedule A

Participating Employers

UNIFI, Inc.

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EX-10.30

Exhibit 10.30

EMPLOYMENT AGREEMENT

THIS EMPLOYMENT AGREEMENT (“Agreement”), effective this 4^th day of July 2022 (the “Effective Date”), is entered into by and between Gregory K. Sigmon (“Executive”) and Unifi, Inc. (the “Employer” and, collectively with its successors, subsidiaries and affiliated companies, the “Company”).

WHEREAS, the Employer desires to continue to retain the services of Executive on the terms and subject to the conditions set forth in this Agreement;

NOW, THEREFORE, in consideration of the mutual representations, warranties, covenants and agreements set forth herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto, intending to be legally bound, agree as follows:

1.Employment.  The Employer hereby agrees to continue to employ Executive, and the Executive hereby agrees to continue employment with the Company, upon the terms and subject to the conditions of this Agreement, all as of the Effective Date set forth herein.

2.Position.  During the period of his employment hereunder, Executive agrees to serve the Company, and the Employer shall employ Executive, as General Counsel and Corporate Secretary. If appointed or elected, Executive also shall serve as an officer, director and/or manager of one or more of the Employer’s subsidiaries and affiliated companies in such capacity or capacities as may be determined from time to time.

3. At-Will Employment and Duties.

(a)At-Will Employment.  Executive and the Employer agree that Executive’s employment by the Employer hereunder will be at-will (as defined under applicable law), and may be terminated at any time, for any reason, at the option of either party, subject to the provisions of this Agreement.

(b)Duties.  During the period of his employment hereunder and except for illness, reasonable vacation periods, and reasonable leaves of absence, Executive shall in good faith devote all of his business time, attention, skill and efforts to the business and affairs of the Company.  Executive’s duties shall be performed under the supervision of the Board.  The foregoing shall not be construed as prohibiting Executive from serving on corporate, civic or charitable boards or committees or making personal investments, so long as such activities do not materially interfere with the performance of Executive’s obligations to the Company as set forth herein.

4. Salary; Bonus; Reimbursement of Expenses; Other Benefits.

(a)Salary.  In consideration of the services to be rendered by Executive pursuant to this Agreement, the Employer shall pay, or cause to be paid, to Executive a base salary (the “Base Salary”) as established by or pursuant to authority granted by the Employer’s board of directors (the “Board”).  Executive’s initial Base Salary shall be $246,000 per annum.  The Base Salary shall be reviewed annually by or pursuant to authority granted by the Board in connection with its annual review of executive compensation to determine if such Base Salary should be increased for the following year in recognition of services to the Company.  The Base Salary shall be payable at such intervals in conformity with the Employer’s prevailing practice as such practice shall be established or modified from time to time.

Exhibit 10.30

(b)Bonuses; Additional Compensation.  Executive will be eligible to receive bonuses and to participate in compensation plans of the Employer in accordance with any plan or decision that the Board, or any committee or other person authorized by the Board, may in its sole discretion determine from time to time.

(c)Reimbursement of Expenses.  Executive shall be paid or reimbursed by the Employer, in accordance with and subject to the Employer’s general expense reimbursement policies and practices, for all reasonable travel and other business expenses incurred by Executive in performing his obligations under this Agreement.

(d)Other Benefits.  During the period of employment hereunder, Executive shall be entitled to participate in all other benefits of employment generally available to other executives of the Employer and those benefits for which such persons are or shall become eligible, when and as he becomes eligible therefore.  All outstanding unvested equity awards issued to Executive by the Employer shall vest in full upon a “Change of Control” (as such term is defined in the Unifi, Inc. Second Amended and Restated 2013 Incentive Compensation Plan).

5. Termination of Employment.

(a)Termination as a Result of Executive’s Death or Disability.  Executive’s employment hereunder shall terminate automatically upon Executive’s death and may be terminated by the Employer upon Executive’s “Disability” (as hereinafter defined).  If Executive’s employment hereunder is terminated by reason of Executive’s death or Disability, Executive’s (or Executive’s estate’s) right to benefits under this Agreement will terminate as of the date of such termination and all of the Employer’s obligations hereunder shall immediately cease and terminate, except that (i) Executive or Executive’s estate, as the case may be, will be entitled to receive accrued Base Salary and benefits through the date of termination, (ii) all outstanding unvested equity awards issued to Executive by the Employer shall vest in full upon such termination of employment, and (iii) if this Section 5(a) is applicable in the first twelve calendar months of Executive’s employment under this Agreement, Employer will pay to Executive a pro rata bonus based on Executive’s days of employment, on a per diem basis, payable at Employer’s target level.  As used herein, Executive’s “Disability” shall have the meaning set forth in any long-term disability plan in which Executive participates, and in the absence thereof shall mean the determination in good faith by the Board that, due to physical or mental illness, Executive shall have failed to perform his duties on a full-time basis hereunder for one hundred eighty (180) consecutive days and shall not have returned to the performance of his duties hereunder on a full-time basis before the end of such period.  If Disability has occurred, termination of Executive’s employment hereunder shall occur within thirty (30) days after written notice of such termination is given (which notice may be given before the end of the one hundred eighty (180) day period described above so as to cause termination of employment to occur as early as the last day of such period).

(b)Termination by Executive for Good Reason or by the Employer other than as a Result of Executive’s Death or Disability or for Cause.

(i)Executive may terminate Executive’s employment hereunder for “Good Reason” (as hereinafter defined), if Good Reason exists, upon at least five (5) days prior written notice to the Employer, and the Employer may terminate Executive’s employment hereunder for any reason or for no reason, other than as a result of Executive’s death or Disability or for Cause (as hereinafter defined), in each case with the consequences set forth in this Section 5(b).

(ii)If Executive’s employment hereunder is terminated by Executive for Good Reason or by the Employer other than by reason of Executive’s death or Disability and other than

for Cause, then, subject to Executive entering into and not revoking a release of claims in favor of the Employer and the Company pursuant to Section 5(e) below, and Executive fully complying with the covenants set forth in Section 6, Executive shall be entitled to the following benefits:

(1)Cash severance payments equal in the aggregate to twelve (12) months of Executive’s annual Base Salary at the time of termination, payable in twelve (12) equal monthly installments beginning at the end of the first full month following termination of employment.

(2)In the event Executive elects COBRA continuation coverage for the level of medical coverage he had in force at the time of his termination, the Employer shall reimburse Executive for the monthly cost of such continuation coverage until the earlier of (A) the date Executive ceases to maintain such continuation coverage in effect or (B) twelve (12) months from the termination of Executive’s employment.  

(iii)For purposes of this Agreement, “Good Reason” shall mean: (1) a material reduction (without Executive’s express written consent) in Executive’s title, duties, authority, or responsibilities; (2) the requirement that Executive relocate to an employment location that is more than fifty (50) miles from his employment location on the Start Date; (3) the Employer’s material breach (without Executive’s express written consent) of Sections 2 or 4 of this Agreement; or (4) following a Change of Control, Executive not being an officer of the ultimate surviving parent business entity resulting from such Change of Control transaction, in a substantially similar role to that performed by Executive for the Employer prior to such Change of Control, for a period of at least twelve (12) months thereafter; provided, that with respect to the foregoing clauses (1), (2) and (3), Executive has provided the Employer written notice of the event or circumstance purporting to constitute Good Reason within thirty (30) days of the event or circumstance occurring and the Employer has not cured such event or circumstance within fifteen (15) days following the date Executive provides such notice.  If the Employer thereafter intentionally repeats the breach it previously cured, such breach shall no longer be deemed curable.

(c)Termination by Executive other than for Good Reason.  Executive may terminate his employment with the Employer other than for Good Reason upon thirty (30) days prior written notice to the Employer, after which the Employer shall have no further obligation hereunder to Executive, except for payment of accrued Base Salary and benefits through the termination date.  If Executive so notifies the Employer of such termination, the Employer shall have the right to accelerate the effective date of such termination to any date after the Employer’s receipt of such notice, but such acceleration will not be deemed to constitute a termination of Executive’s employment by the Employer without Cause, and the consequences of such termination will continue to be governed by this subsection.

(d)Termination by the Employer for Cause.  The Employer may terminate Executive’s employment under this Agreement at any time for “Cause” (as hereinafter defined) whereupon the Employer shall have no further obligation hereunder to Executive, except for payment of amounts of Base Salary and benefits accrued through the termination date.  For purposes of this Agreement, “Cause” shall mean: (i) the continued willful failure by Executive to substantially perform his duties to the Company, (ii) the willful engaging by Executive in gross misconduct materially and demonstrably injurious to the Company or (iii) Executive’s material breach of Sections 3, 6 or 7 of this Agreement; provided, that with respect to any breach that is curable by Executive, as determined by the Board in good faith, the Employer has provided Executive written notice of the material breach and Executive has not cured such breach, as

3

determined by the Board in good faith, within fifteen (15) days following the date the Employer provides such notice.

(e)Waiver and Release.  In consideration for and as a condition to the payments and benefits provided and to be provided under Section 5(b)(ii) of this Agreement other than those provided under Section 9 (indemnification), Executive agrees that Executive will, within thirty (30) days after the termination of Executive’s employment hereunder, deliver to the Employer a fully executed release agreement then currently used by the Employer. The waiver and release shall fully and irrevocably release and discharge the Company, its directors, officers, and employees from any and all claims, charges, complaints, liabilities of any kind, known or unknown, owed to Executive, other than any rights Executive may have under the terms of this Agreement that survive such termination of employment and other than any vested rights of Executive under any of the Company’s employee benefit plans or programs that, by their terms, survive or are unaffected by such termination of employment.  Unless consented to by Executive, the waiver and release will not modify the Executive’s obligations pursuant to the Section 6, Certain Covenants by Executive.

6. Certain Covenants by Executive.

(a)Confidential Information.  Executive acknowledges that in his employment hereunder he will occupy a position of trust and confidence.  Executive shall not, except in the course of the good faith performance of his duties hereunder or as required by applicable law, without limitation in time or until such information shall have become public other than by Executive’s unauthorized disclosure, disclose to others or use, whether directly or indirectly, any Confidential Information (as hereinafter defined) regarding the Company.  For purposes of this Agreement, “Confidential Information” shall mean information about the Company or its clients or customers that was learned by Executive in the course of his employment by the Employer, including (without limitation) any proprietary knowledge, trade secrets, data, formulae, information and client and customer lists and all papers, resumes, and records (including computer records) of the documents containing such Confidential Information, but excludes information (i) which is in the public domain through no unauthorized act or omission of Executive; or (ii) which becomes available to Executive on a non-confidential basis from a source other than the Company without breach of such source’s confidentiality or non-disclosure obligations to the Company.  Executive agrees to deliver or return to the Employer, at the Employer’s request at any time or upon termination or expiration of his employment or as soon thereafter as possible, (i) all documents, computer tapes and disks, records, lists, data, drawings, prints, notes and written information (and all copies thereof) furnished by the Company or prepared by Executive during the term of his employment by the Employer and (ii) all notebooks and other data relating to research or experiments or other work conducted by Executive in the scope of such employment.  Upon the date of termination of Executive’s employment hereunder, Executive shall, as soon as possible but no later than two (2) days after the date of termination, surrender to the Employer all Confidential Information in Executive’s possession and return to the Employer all Company property in Executive’s possession or control, including but not limited to, all paper records and documents, computer disks and access cards and keys to any Company facilities.

(b)Non-Competition.  During the period of Executive’s employment hereunder and for a period of twelve (12) months after the date of termination of his employment, Executive shall not, directly or indirectly, in the “Restricted Territory” (as hereinafter defined), without the prior written consent of the Employer, provide consultative services or otherwise provide services to (whether as an employee or a consultant, with or without pay) or, own, manage, operate, join, control, participate in, or be connected with (as a shareholder, partner, or otherwise), any business, individual, partner, firm, corporation, or other entity that is then a competitor of the Company (each such competitor a “Competitor of the Company”); provided, however, that the “beneficial ownership” by Executive, either individually or as a member of a “group,” as such terms are used in Rule 13d of the General Rules and Regulations under the Securities

4

Exchange Act of 1934, as amended (the “Exchange Act”), of not more than five percent (5%) of the voting stock of any publicly held corporation shall not alone constitute a violation of this Agreement.  For purposes of this Agreement, “Restricted Territory” shall mean: (i) the State of North Carolina, (ii) the other contiguous states of the United States of America, and (iii) any other jurisdiction in which the Company is doing or does business during Executive’s employment hereunder.  Executive and the Employer acknowledge and agree that the business of the Company extends throughout the contiguous states of the United States of America and internationally.

(c)Non-Solicitation of Customers and Suppliers.  During the period of Executive’s employment hereunder and for a period of twelve (12) months after the date of termination of Executive’s employment hereunder, Executive shall not, directly or indirectly, influence or attempt to influence customers or suppliers of the Company to divert any of their business to any Competitor of the Company.

(d)Non-Solicitation of Employees.  Executive recognizes that he possesses and will possess Confidential Information about other employees of the Company relating to their education, experience, skills, abilities, compensation and benefits, and inter-personal relationships with customers of the Company.  Executive recognizes that the information he possesses and will possess about these other employees is not generally known, is of substantial value to the Company in developing its business and in securing and retaining customers, and has been and will be acquired by him because of his business position with the Company.  Executive agrees that, during the period of Executive’s employment hereunder and for a period of twelve (12) months thereafter, he will not, directly or indirectly, solicit, recruit, induce or encourage or attempt to solicit, recruit, induce, or encourage any employee of the Company (i) for the purpose of being employed by him or by any Competitor of the Company on whose behalf he is acting as an agent, representative or employee or (ii) to terminate his or her employment or any other relationship with the Company.  Executive also agrees that Executive will not convey any Confidential Information or trade secrets about other employees of the Company to any other person.

(e)Post-Termination Covenants by Executive.

(i)Upon the termination of Executive’s employment hereunder, regardless of (A) the date, cause, or manner of the Termination of Employment, (B) whether the Termination of Employment is with or without Cause or is a result of Executive’s resignation, or (C) whether the Employer provides severance benefits to Executive under this Agreement (the “Termination of Employment”), Executive shall resign and does resign (1) as a member of the Board if serving on the Board at that time and (2) from all positions as an officer, director or manager of the Company and from any other positions with the Company, with all such resignations to be effective upon the date of the Termination of Employment.

(ii)From and after the Termination of Employment, Executive agrees to reasonably cooperate with and provide assistance to the Company and its legal counsel in connection with any litigation (including arbitration or administrative hearings) or investigation affecting the Company, in which, in the reasonable judgment of the Company’s counsel, Executive’s assistance or cooperation is needed.  Executive shall, when requested by the Company, provide testimony or other assistance and shall travel at the Company’s request in order to fulfill this obligation.  In connection with such litigation or investigation, the Company shall attempt to accommodate Executive’s schedule, shall reimburse Executive (unless prohibited by law) for any actual loss of wages in connection therewith, shall provide Executive with reasonable notice in advance of the times in which Executive’s cooperation or assistance is needed, and shall reimburse Executive for any reasonable expenses incurred in connection with such matters.

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(f)Injunctive Relief.  It is expressly agreed that the Employer will or would suffer irreparable injury, for which a remedy in monetary damages alone would be inadequate, if Executive were to violate any of the provisions of this Section 6 and that the Employer would by reason of such violation be entitled to injunctive relief in a court of appropriate jurisdiction, and Executive further consents and stipulates to the entry of such injunctive relief in such a court prohibiting Executive from so violating Section 6 of this Agreement, in addition to any and all damages or other remedies to which the Employer would be entitled at law or in equity.Nothing herein shall be construed as prohibiting the Employer from pursuing any other equitable or legal remedies for such breach or threatened breach, including the recovery of monetary damages from Executive.

(g)Executive’s Acknowledgement.  Executive acknowledges and agrees that (i) the restrictive covenants in this Section 6 are reasonable in time, territory and scope, and in all other respects and (ii) should any part or provision of any covenant herein be held invalid, void or unenforceable in any court of competent jurisdiction, such invalidity, voidness, or unenforceability shall not render invalid, void or unenforceable any other part or provision of this Agreement.  The restrictive covenants contained herein shall be construed as agreements independent of any other provision in this Agreement and the existence of any claim or cause of action of Executive against the Employer, whether predicated on this Agreement or otherwise, shall not constitute a defense to the enforcement by the Employer of these covenants.

(h)Protected Disclosures.  Pursuant to the Defend Trade Secrets Act of 2016 (8 U.S.C. § 1833(b)), Executive will not be held criminally or civilly liable under any federal or state trade secret law for the disclosure of a trade secret of the Company that (i) is made (A) in confidence to a federal, state, or local government official, either directly or indirectly, or to an attorney and (B) solely for the purpose of reporting or investigating a suspected violation of law; or (ii) is made in a complaint or other document that is filed under seal in a lawsuit or other proceeding.  If Executive files a lawsuit for retaliation by the Company for reporting a suspected violation of law, Executive may disclose the trade secret to Executive’s attorney and use the trade secret information in the court proceeding, if Executive (i) files any document containing the trade secret under seal, and (ii) does not disclose the trade secret, except pursuant to court order.  Nothing in this Agreement, is intended to conflict with 18 U.S.C. § 1833(b) or create liability for disclosures of trade secrets that are expressly allowed by such section.  Notwithstanding any provision in any agreement between Executive and the Company, Executive may disclose any confidential or non-public information (i) to report possible violations of federal law or regulation to any governmental agency or entity, including but not limited to the Department of Justice, the Securities and Exchange Commission, the United States Congress and any agency Inspector General, or make other disclosures that are protected under the whistleblower provisions of federal law or regulation or (ii) as required by law or order by a court; provided, however, Executive agrees to notify the Company in advance if Executive is required to provide information or testimony in connection with any action brought by a non-governmental or non-regulatory person or entity.

(i)Survival of Provisions.  The obligations contained in this Section 6 shall survive the termination or expiration of Executive’s employment hereunder and shall be fully enforceable thereafter.

7. Non-Disparagement.  

(a)From and after the Termination of Employment, Executive agrees not to make any statements to the Company’s employees, customers, vendors, or suppliers or to any public or media source, whether written or oral, regarding Executive’s employment hereunder or termination from the Employer’s employment, except as may be approved in writing by an executive officer of the Employer in advance.  Executive further agrees not to make any statement (including to any media source, or to the

6

Company’s suppliers, customers or employees) or take any action that would disrupt, impair, embarrass, harm or affect adversely the Company or any of the employees, officers, directors, or customers of the Company or place the Company or such individuals in any negative light.

(b)(b)From and after the Termination of Employment, Employer shall not, and shall instruct the members of its Board, and its Senior Executives, Managers, and Directors not to, make any statements to the Company’s employees, customers, vendors, or suppliers or to any public or media source, whether written or oral, regarding Executive’s employment hereunder or termination from the Employer’s employment, except as may be approved in writing by Executive in advance.  Employers’ Board, Senior Executives, Managers, and Directors further agree not to make any statement (including to any media source, or to the Company’s suppliers, customers or employees) or take any action that would disrupt, impair, embarrass, harm or affect adversely the Executive or place the Executive in a negative light.

8.No Conflict.  Executive represents and warrants that Executive is not subject to any agreement, instrument, order, judgment or decree of any kind, or any other restrictive agreement of any character, which would prevent Executive from entering into this Agreement or would conflict with the performance of Executive’s duties pursuant to this Agreement.  Executive represents and warrants that Executive will not engage in any activity, which would conflict with the performance of Executive’s duties pursuant to this Agreement.

9.Notices.  Any notice, requests, demands and other communications to be given to a party in connection with this Agreement shall be in writing addressed to such party at such party’s “Notice Address,” which shall initially be as set forth below:

If to the Company:Unifi, Inc.

7201 West Friendly Avenue

Greensboro, North Carolina 27410

Attn:  Corporate Secretary

If to Executive:Gregory K. Sigmon

Most recent address reflected on

the Company’s payroll records

A party’s Notice Address may be changed or supplemented from time to time by such party by notice thereof to the other party as herein provided.  Any such notice shall be deemed effectively given to and received by a party on the first to occur of (a) the date on which such notice is actually delivered (whether by mail, courier, hand delivery, electronic, or facsimile transmission or otherwise) to such party’s Notice Address and addressed to such party, if such delivery occurs on a business day, or if such delivery occurs on a day which is not a business day, then on the next business day after the date of such delivery, or (b) the date on which such notice is actually received by such party (or, in the case of a party that is not an individual, actually received by the individual designated in the Notice Address of such party).  For purposes of the preceding sentence, a “business day” is any day other than a Saturday, Sunday or U.S. federal public legal holiday.

10. Indemnification.

(a)General.  Subject to the limitations set forth in this Section 9, the Employer shall indemnify and hold harmless, to the fullest extent permitted by applicable law as it presently exists or may hereafter be amended, Executive if Executive was or is made or is threatened to be made a party to or is otherwise involved in any pending, threatened or completed action, suit, arbitration, alternative dispute resolution proceeding, investigation, administrative hearing, or other proceeding, whether by or in the right

7

of the Employer, any other Company, or any other person or entity, whether civil, criminal, administrative or investigative (a “Proceeding”) by reason of the fact that Executive is or was a director, officer, employee or agent of the Employer or is or was serving at the request of the Employer as a director, officer, member, employee or agent of any other Company or other enterprise, including service with respect to employee benefit plans, against all cost, expense, liability and loss (including without limitation, attorneys’ fees, judgments, fines, ERISA excise taxes or penalties and amounts paid or to be paid in settlement) reasonably incurred or suffered by Executive or on Executive’s behalf in connection with any Proceeding and any appeal therefrom.Executive’s rights under this Section 9 shall continue after Executive has ceased acting as a director, officer, member, employee or agent of a Company and shall inure to the benefit of the heirs, executors and administrators of Executive.  The Employer’s obligation to provide the indemnification set forth in this Section 9(a) shall be subject to Executive having acted in good faith and in a manner Executive reasonably believed to be in or not opposed to the best interests of any Company, and, with respect to any criminal action or proceeding, having had no reasonable cause to believe Executive’s conduct was unlawful.The termination of any Proceeding by judgment, order, settlement, conviction, or upon a plea of nolo contendere or its equivalent, shall not, of itself, create a presumption that Executive did not act in good faith and in a manner which Executive reasonably believed to be in or not opposed to the best interests of the Company, and, with respect to any criminal action or proceeding, had reasonable cause to believe that Executive’s conduct was unlawful.

(b)Advancement of Expenses.  Subject to the limitations set forth in this Section 9, the Employer shall pay the reasonable expenses (including reasonable attorneys’ fees) incurred by Executive in defending any Proceeding in advance of its final disposition; provided, however, that such advancement of expenses shall be made only upon receipt of an undertaking by Executive, in a form approved by the Employer, to repay all amounts advanced if it shall ultimately be determined that Executive is not entitled to be indemnified therefor.  Executive agrees to reimburse the Employer for all expenses advanced under this Section 9 in the event and only to the extent it shall ultimately be determined by a final adjudication that Executive is not entitled to be indemnified by the Employer for such expenses.

(c)Claims for Indemnification or Advancement; Determination of Eligibility.

(i)Any claim by Executive for indemnification or advancement of expenses under this Agreement shall be made in a writing delivered to the Employer, setting forth in reasonable detail the basis for such indemnification or advancement and the amount requested, and accompanied by appropriate documentation to support the amount so requested (or, in the case of advancement of expenses to be incurred, the basis on which such amount is to be determined).  A claim for advancement may include future expenses reasonably expected to be incurred, provided they are generally described in the claim, and provided that the Employer shall not be required to advance particular expenses covered by the claim until it has received appropriate substantiation that those expenses have been incurred and are appropriately included within the advances approved by the Employer pursuant to this Section 9(c).

(ii)Promptly upon its receipt of a written claim for advancement of expenses to which Executive is entitled hereunder, and within sixty (60) days after its receipt of a written claim for indemnity to which Executive is entitled hereunder, the Employer shall pay such advancement (and any future related submissions for advancement of expenses as they are incurred) or such claim for indemnity in full to or as directed by Executive.  If and to the extent it is required by law that the Employer make any particular determination as to Executive’s eligibility to receive such advancements or indemnity, or whether Executive has met the standards set forth in Section 9(a) hereof, the Employer shall make such determination as promptly as practicable in good faith and in accordance with such requirements of law, and in any event within sixty (60) days after its receipt of the claim from Executive.  In the event that the Employer fails to make such

8

determination as to Executive’s eligibility, or makes a determination that Executive is ineligible for indemnification or advancement of expenses hereunder, within such sixty (60)-day period, then Executive may seek such determination from a court of competent jurisdiction.  In any such proceeding, the Employer shall have the burden of proving that Executive was not entitled to the requested indemnification or advancement of expenses, and any prior determination by the Employer to the contrary shall be to no effect and shall not be given any weight by the court, it being the intention of the parties that any determination by the court as to Executive’s eligibility for and entitlement to indemnification or advancement of expenses hereunder shall be made de novo based upon the terms of this Agreement and the evidence presented to such court.

(d)Limitations on Claims.  In addition to the limitations on indemnification set forth in Section 9(a) above, the Employer shall not be obligated pursuant to this Agreement:

(i)To indemnify or advance expenses to Executive with respect to a Proceeding initiated by Executive, except (i) for Proceedings authorized or consented to by the Board; or (ii) in the event a claim for indemnification or payment of expenses (including attorneys’ fees) made under this Agreement is not paid in full within sixty (60) days after a written claim therefor has been received by the Employer, Executive may file suit to recover the unpaid amount of such claim and, if successful in whole or in part, shall be entitled to be paid the expense ofprosecuting such claim, including attorneys’ fees.  In any such action, the Employer shall have the burden of proving that Executive was not entitled to the requested indemnification or payment of expenses under applicable law or this Agreement.

(ii)To indemnify Executive for any expenses incurred by Executive with respect to any Proceeding instituted by Executive to enforce or interpret this Agreement, unless Executive is successful in establishing Executive’s right to indemnification in such Proceeding, in whole or in part; provided, however, that nothing in this Section 9(d)(ii) is intended to limit the Employer’s obligation with respect to the advancement of expenses to Executive in connection with any Proceeding instituted by Executive to enforce or interpret this Agreement, as provided in Section 9(c) above.

(iii)To indemnify Executive in connection with proceedings or claims involving the enforcement of the provisions of this Agreement (other than as otherwise specifically provided for in this Section 9) or any other employment, severance or compensation plan or agreement that Executive may be a party to, or beneficiary of, with the Employer or any other Company.

(iv)To indemnify Executive on account of any proceeding with respect to which final judgment is rendered against Executive for payment or an accounting of profits arising from the purchase or sale by Executive of securities in violation of Section 16(b) of the Securities Exchange Act of 1934, as amended, any similar successor statute, or similar provisions of state statutory law or common law.

(e)Non-Exclusivity of Rights.  The right conferred on Executive by this Section 9 shall not be exclusive of any other rights which Executive may have or hereafter acquire under any statute, provision of the Employer’s articles of incorporation or bylaws, agreement, vote of shareholders or disinterested directors or otherwise, or under any insurance maintained by the Employer; but such rights in the aggregate shall not entitle Executive to duplicative multiple recoveries.  No amendment or alteration of the Employer’s articles of incorporation or bylaws or any other agreement shall adversely affect the rights provided to Executive under this Section 9.

9

(f)Savings Clause.  If any provision or provisions of this Agreement shall be invalidated on any ground by any court of competent jurisdiction, then the Employer shall nevertheless indemnify Executive as to costs, charges and expenses (including attorneys’ fees), judgments, fines and amounts paid in settlement with respect to any action, suit or proceeding, whether civil, criminal, administrative or investigative, including an action by or in the right of the Employer, to the full extent permitted by any applicable portion of this Agreement that shall not have been invalidated and to the full extent permitted by applicable law.

11.Dispute Resolution.

(a)Any dispute between Executive and the Employer arising out of this Agreement or the performance or nonperformance hereof (except with respect to Section 9), shall, upon the demand of either Executive or the Employer, be settled by binding arbitration in accordance with the Employment Arbitration Rules and Mediation Procedures of the American Arbitration Association as in effect at the time the arbitration is commenced and the provisions of this subsection:

(i)The arbitration shall be conducted in Greensboro, North Carolina by a panel of three impartial arbitrators selected in accordance with such rules, unless the parties shall hereafter mutually agree in writing to have the arbitration conducted by a single arbitrator.

(ii)In conducting the arbitration and rendering their award, the arbitrators shall give effect to the terms of this Agreement, including the choice of applicable law, shall give effect to any other agreement of the parties relating to the conduct of the arbitration, and shall give effect to applicable statutes of limitations.

(iii)The costs of the arbitration, including the fees and expenses of the arbitrators and of the American Arbitration Association, shall be paid by the Employer, unless as part of their decision the arbitrators determine that Executive proceeded in bad faith.  If the arbitrators determine that Executive proceeded in bad faith, the arbitrators may allocate fees and expenses to such parties as, and in such proportions as, the arbitrators shall determine to be just and equitable, which determination shall be set forth in the award.

(iv)Judgment upon the award of the arbitrators may be entered by any court of competent jurisdiction.

(b)Nothing in this Section 10 shall preclude any party from applying to a court of competent jurisdiction for, and obtaining if warranted, preliminary or ancillary relief pending the conduct of such arbitration, or an order to compel the arbitration provided for herein.

(c)Any claim arising out of Section 9, including a claim by Executive for indemnification or advancement of expenses thereunder, shall be brought before the state courts of the State of North Carolina pursuant to Section 12.

12.Assignment; Successors.  This Agreement is personal in its nature and neither of the parties hereto shall, without the consent of the other, assign or transfer this Agreement or any rights or obligations hereunder; provided that, this Agreement shall be binding upon and, subject to the provisions hereof, inure to the benefit of any successor of the Employer and such successor shall be deemed substituted for the Employer under the terms of this Agreement; but any such substitution shall not relieve the Employer of any of its obligations under this Agreement.  As used in this Agreement, the term “successor” shall include any person, firm, corporation, or like business entity which at any time, whether by merger, purchase or

10

otherwise, acquires all or a controlling interest in the assets or business of the Employer.  This Agreement shall inure to the benefit of Executive’s estate, administrators, and personal representatives.

13.Governing Law.  The validity, interpretation, construction and performance of this Agreement shall be governed by, and construed and enforced in accordance with, the substantive laws of the State of North Carolina, without giving effect to its principles of conflict of laws.  Executive and the Employer each hereby irrevocably consent that both parties are subject to the jurisdiction of the state courts of the State of North Carolina for all purposes in connection with any action or proceeding that arises out of or relates to this Agreement, and further agree that the sole and exclusive venue for any such dispute shall be the General Court of Justice, Superior Court Division, in Guilford County, North Carolina.

14.Withholding.  The Employer shall make such deductions and withhold such amounts from each payment made to Executive hereunder as may be required from time to time by law, governmental regulation or order.

15.Headings.  Section headings in this Agreement are included herein for convenience of reference only and shall not constitute a part of this Agreement for any other purpose.

16.Waiver; Modification.  Failure to insist upon strict compliance with any of the terms, covenants, or conditions hereof shall not be deemed a waiver of such term, covenant, or condition, nor shall any waiver or relinquishment of, or failure to insist upon strict compliance with, any right or power hereunder at any one or more times be deemed a waiver or relinquishment of such right or power at any other time or times.  This Agreement shall not be modified in any respect except by a writing executed by each party hereto.

17.Severability.  The parties have entered into this Agreement for the purposes herein expressed, with the intention that this Agreement be given full effect to carry out such purposes.  Therefore, consistent with the effectuation of the purposes hereof, the invalidity or unenforceability of any provision hereof or part thereof shall not affect the validity or enforceability of any other provision hereof or any other part of such provision.

18.Entire Agreement.  This Agreement constitutes the entire agreement between the parties with respect to the subject matter hereof and supersedes any prior agreements between them with respect to the subject matter hereof.  Without limiting the generality of the foregoing, the obligations under this Agreement with respect to any termination of employment of Executive, for whatever reason, supersede any severance or related obligations of the Company in any policy, plan or practice of the Company or any agreement between Executive and the Company.

19.Counterparts.  This Agreement may be executed by the parties hereto in multiple counterparts and shall be effective as of the Effective Date when each party shall have executed and delivered a counterpart hereof, whether or not the same counterpart is executed and delivered by each party.  When so executed and delivered, each such counterpart shall be deemed an original and all such counterparts shall be deemed one and the same document.  Transmission of images of signed signature pages by facsimile, e-mail or other electronic means shall have the same effect as the delivery in person of manually signed documents.

20.Compliance with Section 409A.  This Agreement is intended to comply with Section 409A of the Internal Revenue Code of 1986, as amended (“Section 409A”), to the extent applicable.  Notwithstanding any provision herein to the contrary, this Agreement shall be interpreted, operated and administered consistent with this intent.  Each separate installment under this Agreement shall be treated as a separate payment for purposes of determining whether such payment is subject to or exempt

11

from compliance with the requirements of Section 409A.  In addition, in the event that Executive is a “specified employee” within the meaning of Section 409A (as determined in accordance with the methodology established by the Employer as in effect on the date of termination of Executive’s employment hereunder), any payment or benefits hereunder that are nonqualified deferred compensation subject to the requirements of Section 409A shall be provided to Executive no earlier than six (6) months after the date of Executive’s “separation from service” within the meaning of Section 409A.

[Signatures follow on next page]

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IN WITNESS WHEREOF, the Employer has caused this Agreement to be executed by its duly authorized officer, and Executive has hereunto signed this Agreement, as of the Effective Date.

“Employer”:
Unifi, Inc.
By:	/s/ EDMUND M. INGLE
Name:	Edmund M. Ingle
Title:	Chief Executive Officer
“Executive”:
	/s/ GREGORY K. SIGMON
Name:	Gregory K. Sigmon

[signature page to employment agreement]

EX-21

Exhibit 21

UNIFI, INC.

SUBSIDIARIES

Name	State or Other Jurisdiction of Incorporation or Organization	Unifi Percentage of Voting Securities Owned
Unifi Asia Pacific (Hong Kong) Company, Limited (“UAP”)	Hong Kong	100% - USG
Unifi Vietnam Company Limited	Vietnam	100% - UAP
Unifi Switzerland GmbH (“USG”)	Switzerland	100% - UHA
Unifi Holding 1, BV (“UH1”)	Netherlands	100% - USG
Unifi Holding 2, BV (“UH2”)	Netherlands	100% - UH1
Unifi Textiles Holding, SRL (“UTH”)	Barbados	100% - UAP
Unifi do Brasil, Ltda.	Brazil	>99.99% - UH1   <0.01% - UMI
Unifi Manufacturing, Inc. (“UMI”)	North Carolina	100% - Unifi, Inc.
Unifi Textured Polyester, LLC	North Carolina	100% - UMI
Unifi Kinston, LLC	North Carolina	100% - UMI
Unifi Sales & Distribution, Inc.	North Carolina	100% - Unifi, Inc.
Unifi Latin America, S.A.S.	Colombia	100% - USG
Unifi Textiles (Suzhou) Co. Ltd.	P.R. China	100% - UTH
Unifi Central America, Ltda. de CV	El Salvador	>99.99% - UH1   <0.01% - UH2
Unifi Textiles Colombo (Private) Limited	Sri Lanka	100% - USG
Unifi Holding Asia, B.V. (“UHA”)	Netherlands	100% - Unifi, Inc.
Unifi Vietnam Company Limited	Vietnam	100% - UAP
Unifi Turkey Textile Commerce Joint Stock Company	Turkey	100% - UAP

EX-23

Exhibit 23

CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

We consent to the incorporation by reference in the registration statements (Nos. 333-156090, 333-191870, 333-229533, 333-251549, and 333-263974) on Form S-8 and (No. 333-140580) on Form S-3 of our reports dated August 31, 2022, with respect to the consolidated financial statements of Unifi, Inc. and the effectiveness of internal control over financial reporting.

/s/ KPMG LLP

Greensboro, North Carolina

August 31, 2022

EX-31.1

Exhibit 31.1

CERTIFICATION

I, Edmund M. Ingle, certify that:

1. I have reviewed this Annual Report on Form 10-K 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:	August 31, 2022	/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 Annual Report on Form 10-K 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:	August 31, 2022	/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 Annual Report on Form 10-K of Unifi, Inc. (the “Company”) for the fiscal year ended July 3, 2022, 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:	August 31, 2022	/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 Annual Report on Form 10-K of Unifi, Inc. (the “Company”) for the fiscal year ended July 3, 2022, 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:	August 31, 2022	/s/ CRAIG A. CREATURO
		Craig A. Creaturo Executive Vice President & Chief Financial Officer (Principal Financial Officer)

XML

Document And Entity Information - USD ($)	12 Months Ended
	Jul. 03, 2022	Aug. 29, 2022	Dec. 26, 2021
Cover [Abstract]
Entity Registrant Name	UNIFI, INC.
Entity Central Index Key	0000100726
Trading Symbol	UFI
Current Fiscal Year End Date	--07-03
Entity Filer Category	Accelerated Filer
Entity Current Reporting Status	Yes
Entity Voluntary Filers	No
Entity Well-known Seasoned Issuer	No
Entity Interactive Data Current	Yes
Title of 12(b) Security	Common Stock, par value $0.10 per share
Security Exchange Name	NYSE
Entity Common Stock, Shares Outstanding (in shares)		18,000,052
Entity Public Float			$ 313,304,229
ICFR Auditor Attestation Flag	true
Document Type	10-K
Document Period End Date	Jul. 03, 2022
Document Fiscal Year Focus	2022
Document Fiscal Period Focus	FY
Amendment Flag	false
Entity Shell Company	false
Entity Small Business	false
Entity Emerging Growth Company	false
Entity File Number	1-10542
Entity Tax Identification Number	11-2165495
Entity Incorporation, State or Country Code	NY
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 Annual Report	true
Document Transition Report	false
Documents Incorporated by Reference	Portions of the registrant’s definitive proxy statement to be filed with the Securities and Exchange Commission in connection with the registrant’s 2022 Annual Meeting of Shareholders are incorporated by reference in Part III of this Form 10-K to the extent described herein.
Auditor Firm ID	185
Auditor Name	KPMG LLP
Auditor Location	Greensboro, North Carolina

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Consolidated Balance Sheets - USD ($) $ in Thousands	Jul. 03, 2022	Jun. 27, 2021
ASSETS
Cash and cash equivalents	$ 53,290	$ 78,253
Receivables, net	106,565	94,837
Inventories	173,295	141,221
Income taxes receivable	160	2,392
Other current assets	18,956	12,364
Total current assets	352,266	329,067
Property, plant and equipment, net	216,338	201,696
Operating lease assets	8,829	8,772
Deferred income taxes	2,497	1,208
Other non-current assets	8,788	14,625
Total assets	588,718	555,368
LIABILITIES AND SHAREHOLDERS’ EQUITY
Accounts payable	73,544	54,259
Income taxes payable	1,526	1,625
Current operating lease liabilities	2,190	1,856
Current portion of long-term debt	11,726	16,045
Other current liabilities	19,806	31,638
Total current liabilities	108,792	105,423
Long-term debt	102,309	70,336
Non-current operating lease liabilities	6,736	7,032
Deferred income taxes	4,983	6,686
Other long-term liabilities	4,449	7,472
Total liabilities	227,269	196,949
Commitments and contingencies
Common stock, $0.10 par value (500,000,000 shares authorized; 17,979,362 and 18,490,338 shares issued and outstanding as of July 3, 2022 and June 27, 2021, respectively)	1,798	1,849
Capital in excess of par value	66,120	65,205
Retained earnings	353,136	344,797
Accumulated other comprehensive loss	(59,605)	(53,432)
Total shareholders’ equity	361,449	358,419
Total liabilities and shareholders’ equity	$ 588,718	$ 555,368

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Consolidated Balance Sheets (Parenthetical) - $ / shares	Jul. 03, 2022	Jun. 27, 2021
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)	17,979,362	18,490,338
Common stock, shares outstanding (in shares)	17,979,362	18,490,338

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Consolidated Statements of Operations - USD ($) $ in Thousands	3 Months Ended																12 Months Ended
	Jul. 03, 2022		Mar. 27, 2022		Dec. 26, 2021		Sep. 26, 2021		Jun. 27, 2021		Mar. 28, 2021		Dec. 27, 2020		Sep. 27, 2020		Jul. 03, 2022	Jun. 27, 2021	Jun. 28, 2020
Income Statement [Abstract]
Net sales	$ 217,576	[1]	$ 200,780	[1]	$ 201,410	[1]	$ 195,992	[1]	$ 184,445	[2]	$ 178,866	[2]	$ 162,776	[2]	$ 141,505	[2]	$ 815,758	$ 667,592	$ 606,509
Cost of sales																	735,273	574,098	567,469
Gross profit	18,354	[3]	19,144	[3]	16,890	[3]	26,097	[3]	27,404	[4]	25,595	[4]	25,934	[4]	14,561	[4]	80,485	93,494	39,040
Selling, general and administrative expenses																	52,489	51,334	43,814
(Benefit) provision for bad debts																	(445)	(1,316)	1,739
Other operating (income) expense, net																	(158)	4,865	2,308
Operating income (loss)																	28,599	38,611	(8,821)
Interest income																	(1,524)	(603)	(722)
Interest expense																	3,085	3,323	4,779
Equity in (earnings) loss of unconsolidated affiliates																	(605)	(739)	477
Recovery of non-income taxes, net																	815	(9,717)
Gain on sale of investment in unconsolidated affiliate																			(2,284)
Impairment of investment in unconsolidated affiliate																			45,194
Income (loss) before income taxes																	26,828	46,347	(56,265)
Provision for income taxes																	11,657	17,274	972
Net income (loss)	$ 3,496	[5]	$ 2,066	[5]	$ 929	[5]	$ 8,680	[5]	$ 13,419	[6]	$ 4,758	[6]	$ 7,464	[6]	$ 3,432	[6]	$ 15,171	$ 29,073	$ (57,237)
Net income (loss) per common share:
Basic	$ 0.19	[7]	$ 0.11	[7]	$ 0.05	[7]	$ 0.47	[7]	$ 0.73	[7]	$ 0.26	[7]	$ 0.40	[7]	$ 0.19	[7]	$ 0.82	$ 1.57	$ (3.10)
Diluted	$ 0.19	[7]	$ 0.11	[7]	$ 0.05	[7]	$ 0.46	[7]	$ 0.70	[7]	$ 0.25	[7]	$ 0.40	[7]	$ 0.18	[7]	$ 0.80	$ 1.54	$ (3.10)

[1] The fiscal quarter ending July 3, 2022 included an additional week of sales of approximately $8,700.

[2] Net sales for the fiscal quarters ended September 27, 2020 and December 27, 2020 includes adverse demand pressures from the COVID-19 pandemic.

[3] Gross profit for our domestic operations for all fiscal quarters of fiscal 2022 includes adverse pressures from (i) higher raw material costs, (ii) rising input costs, and (iii) the weakening of labor productivity.

[4] Gross profit for the fiscal quarter ended September 27, 2020 includes adverse demand pressures from the COVID-19 pandemic.  Gross profit for the fiscal quarters ended December 27, 2020, March 28, 2021, and June 27, 2021 includes the benefit of exceptional performance by the Brazil Segment primarily due to higher conversion margin and market share capture due to agility and responsiveness during demand recovery in Brazil.

[5] Net income for our domestic operations for all fiscal quarters of fiscal 2022 includes the adverse pressures on gross profit.

[6] Net income for the fiscal quarter ended September 27, 2020 includes adverse demand pressures from the COVID-19 pandemic. Net income for the fiscal quarter ended June 27, 2021 includes a recovery of non-income taxes in Brazil due to the favorable conclusion of litigation related to excess social program taxes for multiple prior years.

[7] Income per share is computed independently for each of the periods presented.  The sum of the income per share amounts for the fiscal quarters may not equal the total for the fiscal year.

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Consolidated Statements of Comprehensive Income (Loss) - USD ($) $ in Thousands	12 Months Ended
	Jul. 03, 2022	Jun. 27, 2021	Jun. 28, 2020
Net income (loss)	$ 15,171	$ 29,073	$ (57,237)
Other comprehensive (loss) income:
Foreign currency translation adjustments	(7,125)	9,368	(21,027)
Changes in interest rate swaps, net of tax of $282, $310 and $446, respectively	952	1,006	(1,458)
Other comprehensive (loss) income, net	(6,173)	10,374	(20,577)
Comprehensive income (loss)	$ 8,998	$ 39,447	(77,814)
Unconsolidated Affiliates [Member]
Other comprehensive (loss) income:
Foreign currency translation adjustments			$ 1,908

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Consolidated Statements of Comprehensive Income (Loss) (Parenthetical) - USD ($) $ in Thousands	12 Months Ended
	Jul. 03, 2022	Jun. 27, 2021	Jun. 28, 2020
Statement Of Income And Comprehensive Income [Abstract]
Changes in interest rate swaps, tax	$ 282	$ 310	$ (446)

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Consolidated Statements of Shareholders' Equity - 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
Stock-based compensation	3,611	$ 1	3,610
Stock-based compensation (in shares)		4,000
Conversion of equity units		$ 8	(8)
Conversion of equity units (in shares)		76,000
Common stock repurchased and retired under publicly announced programs	(1,994)	$ (8)	(279)	(1,707)
Common stock repurchased and retired under publicly announced program (in shares)		(84,000)
Common stock withheld in satisfaction of tax withholding obligations under net share settle transactions	(522)	$ (3)	(519)
Common stock withheld in satisfaction of tax withholding obligations under net share settle transactions (in shares)		(22,000)
Other comprehensive income (loss), net of tax	(20,577)				(20,577)
Net income (loss)	(57,237)			(57,237)
Balance at Jun. 28, 2020	316,155	$ 1,845	62,392	315,724	(63,806)
Balance (in shares) at Jun. 28, 2020		18,446,000
Options exercised (in shares)		1,000
Stock-based compensation	3,138	$ 1	3,137
Stock-based compensation (in shares)		4,000
Conversion of equity units		$ 4	(4)
Conversion of equity units (in shares)		45,000
Common stock withheld in satisfaction of tax withholding obligations under net share settle transactions	(321)	$ (1)	(320)
Common stock withheld in satisfaction of tax withholding obligations under net share settle transactions (in shares)		(6,000)
Other comprehensive income (loss), net of tax	10,374				10,374
Net income (loss)	29,073			29,073
Balance at Jun. 27, 2021	$ 358,419	$ 1,849	65,205	344,797	(53,432)
Balance (in shares) at Jun. 27, 2021	18,490,338	18,490,000
Options exercised	$ 28	$ 1	27
Options exercised (in shares)	10,000	16,000
Stock-based compensation	$ 3,291	$ 1	3,290
Stock-based compensation (in shares)		5,000
Conversion of equity units		$ 11	(11)
Conversion of equity units (in shares)		107,000
Common stock repurchased and retired under publicly announced programs	$ (9,151)	$ (62)	(2,257)	(6,832)
Common stock repurchased and retired under publicly announced program (in shares)	(701)	(617,000)
Common stock withheld in satisfaction of tax withholding obligations under net share settle transactions	$ (136)	$ (2)	(134)
Common stock withheld in satisfaction of tax withholding obligations under net share settle transactions (in shares)		(22,000)
Other comprehensive income (loss), net of tax	(6,173)				(6,173)
Net income (loss)	15,171			15,171
Balance at Jul. 03, 2022	$ 361,449	$ 1,798	$ 66,120	$ 353,136	$ (59,605)
Balance (in shares) at Jul. 03, 2022	17,979,362	17,979,000

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Consolidated Statements of Cash Flows - USD ($) $ in Thousands	12 Months Ended
	Jul. 03, 2022	Jun. 27, 2021	Jun. 28, 2020
Statement Of Cash Flows [Abstract]
Cash and cash equivalents at beginning of year	$ 78,253	$ 75,267	$ 22,228
Operating activities:
Net income (loss)	15,171	29,073	(57,237)
Adjustments to reconcile net income to net cash provided by operating activities:
Equity in (earnings) loss of unconsolidated affiliates	(605)	(739)	477
Distributions received from unconsolidated affiliates	750	750	10,437
Depreciation and amortization expense	26,207	25,528	23,653
Non-cash compensation expense	3,555	3,462	3,999
Deferred income taxes	(3,119)	5,087	(4,011)
Loss on disposal of assets	48	2,809	160
Recovery of non-income taxes, net	815	(9,717)
Impairment of investment in unconsolidated affiliate			45,194
Gain on sale of investment in unconsolidated affiliate			(2,284)
Other, net	(99)	(495)	(444)
Changes in assets and liabilities:
Receivables, net	(13,533)	(40,059)	29,964
Inventories	(34,749)	(28,069)	15,792
Other current assets	(2,860)	2,409	3,625
Income taxes	2,193	2,978	(113)
Accounts payable and other current liabilities	8,937	40,909	(17,328)
Other non-current assets	360	139	46
Other non-current liabilities	(2,691)	2,616	794
Net cash provided by operating activities	380	36,681	52,724
Investing activities:
Capital expenditures	(39,631)	(21,178)	(18,509)
Purchases of intangible assets		(3,605)
Proceeds from sale of investment in unconsolidated affiliate			60,000
Other, net	(2,103)	162	83
Net cash (used) provided by investing activities	(41,734)	(24,621)	41,574
Financing activities:
Proceeds from ABL Revolver	158,000		122,200
Payments on ABL Revolver	(116,700)		(141,600)
Payments on ABL Term Loan	(12,500)	(10,000)	(10,000)
Proceeds from construction financing	2,340	882
Payments on finance lease obligations	(3,707)	(3,646)	(6,035)
Common stock repurchased and retired under publicly announced program	(9,151)		(1,994)
Common stock withheld in satisfaction of tax withholding obligations under net share settle transactions	(345)	(111)	(522)
Other	28		29
Net cash provided (used) by financing activities	17,965	(12,875)	(37,922)
Effect of exchange rate changes on cash and cash equivalents	(1,574)	3,801	(3,337)
Net (decrease) increase in cash and cash equivalents	(24,963)	2,986	53,039
Cash and cash equivalents at end of year	$ 53,290	$ 78,253	$ 75,267

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Background

12 Months Ended

Jul. 03, 2022

Organization Consolidation And Presentation Of Financial Statements [Abstract]

Background

1. Background

Overview

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 sometimes 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 North America, Central America, South America, 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.”).

Fiscal Year

The fiscal year for Unifi, Inc., its domestic subsidiaries and its subsidiary in El Salvador ends on the Sunday in June or July nearest to June 30 of each year. Unifi, Inc.’s fiscal 2022, 2021, and 2020 ended on July 3, 2022, June 27, 2021, and June 28, 2020, respectively.

Unifi, Inc.’s remaining material operating subsidiaries’ fiscal years end on June 30. There have been no significant transactions or events that occurred between Unifi, Inc.’s fiscal year end and such wholly owned subsidiaries’ fiscal year ends.

Unifi, Inc.’s fiscal 2022 consisted of 53 weeks, while fiscal 2021 and 2020 each consisted of 52 weeks.

Current Economic Environment

UNIFI evaluated GAAP requirements for the consideration of forecasted financial information, including, but not limited to, the carrying value of long-lived assets in context with the information reasonably available to UNIFI and the unknown future impacts of the economic environment as of July 3, 2022 and through the date of this filing. As a result of these evaluations, there were no impairments or material changes to asset balances that impacted UNIFI's consolidated financial statements as of and for the period ended July 3, 2022.

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Summary of Significant Accounting Policies

12 Months Ended

Jul. 03, 2022

Notes To Financial Statements [Abstract]

Summary of Significant Accounting Policies

2. Summary of Significant Accounting Policies

UNIFI follows U.S. generally accepted accounting principles (“GAAP”).  The significant accounting policies described below, together with the other notes to the accompanying consolidated financial statements that follow, are an integral part of the consolidated financial statements.

Principles of Consolidation

The accompanying consolidated financial statements include the accounts of Unifi, Inc. and its subsidiaries in which it maintains a controlling financial interest.  All account balances and transactions between Unifi, Inc. and the subsidiaries which it controls have been eliminated.  For transactions with entities accounted for under the equity method, any intercompany profits on amounts still remaining are eliminated.  Amounts originating from any deferral of intercompany profits are recorded within the account balance to which the transaction specifically relates (e.g., inventory).  Only upon settlement of the intercompany transaction with a third party is the deferral of the intercompany profit recognized by UNIFI.

Use of Estimates

The preparation of financial statements in conformity with GAAP requires management to make use of estimates and assumptions that affect the reported amounts of assets and liabilities, certain financial statement disclosures at the date of the financial statements, and the reported amounts of revenues and expenses during the period.  UNIFI’s consolidated financial statements include amounts that are based on management’s best estimates and judgments.  Actual results may vary from these estimates.

Cash and Cash Equivalents

Cash equivalents are defined as highly liquid, short-term investments having an original maturity of three months or less. Book overdrafts, for which the bank has not advanced cash, if any, are reclassified to accounts payable and reflected as an offset thereto within the accompanying consolidated statements of cash flows.

Receivables

Receivables are stated net of expected lifetime credit losses.  Allowances are provided for known and potential losses arising from quality claims and for amounts owed by customers.  Reserves for quality claims have not been material and are based on historical claim experience and known pending claims and are recorded as a reduction of net sales.  The allowance for uncollectible accounts is recorded against operating income and reflects UNIFI’s best estimate of probable losses inherent in its accounts receivable portfolio determined on the basis of historical write off experience, aging of trade receivables, specific allowances for known troubled accounts, and other currently available information.  Customer accounts are written off against the allowance for uncollectible accounts when they are no longer deemed to be collectible.

Inventories

UNIFI’s inventories are valued at the lower of cost or net realizable value, with the cost for the majority of its inventory determined using the first-in, first-out method.  Certain foreign inventories and limited categories of supplies are valued using the average cost method.  UNIFI’s estimates for net realizable value related to obsolete, slow-moving, or excess inventories are based upon many factors, including historical recovery rates, inventory age, the expected net realizable value of specific products, and current economic conditions.

Debt Issuance Costs

Debt issuance costs for revolving credit arrangements are immaterial.  All other debt issuance costs are recorded against long-term debt and amortized as additional interest expense using the effective interest method.  In the event of any prepayment of its debt obligations, UNIFI accelerates the recognition of a pro-rata amount of issuance costs.  

Property, Plant and Equipment

Property, plant, and equipment (“PP&E”) are stated at historical cost less accumulated depreciation.  Plant and equipment under finance leases are stated at the present value of minimum lease payments less accumulated amortization. Additions or improvements that substantially extend the useful life of a particular asset are capitalized.  Depreciation is calculated primarily utilizing the straight-line method over the following useful lives:

Asset categories	Useful lives in years
Land improvements	5 to 20
Buildings and improvements	10 to 40
Machinery and equipment	2 to 25
Computer, software and office equipment	3 to 7
Internal software development costs	3
Transportation equipment	3 to 15

Leasehold improvements are depreciated over the lesser of their estimated useful lives or the remaining term of the lease.

Assets under finance leases are amortized in a manner consistent with UNIFI’s normal depreciation policy if ownership is transferred by the end of the lease or if there is a bargain purchase option. If such ownership criteria are not met, amortization occurs over the shorter of the lease term or the asset’s useful life.

UNIFI capitalizes its costs of developing internal software when the software is used as an integral part of its manufacturing or business processes and the technological feasibility has been established.  Internal software costs are amortized over a period of three years and, in accordance with the nature of the project, charged to cost of sales or selling, general, and administrative expenses (“SG&A”).

Fully depreciated assets are retained in cost and accumulated depreciation accounts until they are disposed.  In the case of disposals, asset costs and related accumulated depreciation amounts are removed from the accounts, and the net amounts, less proceeds from disposal, are included in the determination of net income (loss) and presented within other operating (income) expense, net.

Repair and maintenance costs related to PP&E, which do not significantly increase the useful life of an existing asset or do not significantly alter, modify or change the capabilities or production capacity of an existing asset, are expensed as incurred.

Interest is capitalized for capital projects requiring a construction period.

PP&E and other long-lived assets are tested for impairment whenever events or changes in circumstances indicate that the carrying amount of the asset group may not be recoverable.  Long-lived assets to be disposed of by sale within one year are classified as held for sale and are reported at the lower of their carrying amount or fair value less cost to sell.  Depreciation ceases for all assets classified as held for sale.  Long-lived assets to be disposed of other than by sale are classified as held for use until they are disposed of and these assets are reported at the lower of their carrying amount or estimated fair value.

Intangible Assets

Finite-lived intangible assets, such as customer lists, non-compete agreements, and trademarks are amortized over their estimated useful lives.  UNIFI periodically evaluates the reasonableness of the useful lives of these assets.  Once these assets are fully amortized, they are removed from the accounts.  These assets (asset groups) are reviewed for impairment or obsolescence whenever events or changes in circumstances indicate that the carrying amount may not be recoverable.  If impaired, intangible assets are written down to fair value based on discounted cash flows or other valuation techniques.  UNIFI has no intangible assets with indefinite lives.

Investments in Unconsolidated Affiliates

UNIFI evaluates its investments in unconsolidated affiliates for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable.  

During fiscal 2020, UNIFI owned a 34% interest in PAL (the “PAL Investment”) and Parkdale, Incorporated (“Parkdale”) owned the majority 66% interest. During March 2020, UNIFI commenced negotiations to sell the PAL Investment to Parkdale. Such negotiations indicated that the fair value of the PAL Investment was less than UNIFI’s carrying value and UNIFI no longer intended to hold the PAL Investment to allow recovery of the carrying value. UNIFI recorded an other-than-temporary impairment of $45,194 to adjust the PAL Investment to fair value. In April 2020, UNIFI and Parkdale finalized negotiations to sell UNIFI’s PAL Investment to Parkdale for $60,000. The transaction closed on April 29, 2020, and UNIFI received $60,000 in cash.

Derivative Instruments

All derivatives are carried on the balance sheet at fair value and are classified according to their asset or liability position and the expected timing of settlement.  For cash flow hedges, the effective portion of gains and losses are recorded in accumulated other comprehensive loss until the underlying transactions are recognized in income.  When the hedged item is realized, gains or losses are reclassified from accumulated other comprehensive loss to current period earnings on the same line item as the underlying transaction.

Derivatives that are not designated for hedge accounting are marked to market at the end of each period with the changes in fair value recognized in current period earnings.  Settlements of any cash flow derivative contracts are classified as cash flows from operating activities. There were no outstanding derivative instruments as of July 3, 2022.

Fair Value Measurements

The accounting guidance for fair value measurements and disclosures establishes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value.  Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants in the principal market, or, if none exists, the most advantageous market, for the specific asset or liability at the measurement date (the exit price).  Fair value is based on assumptions that market participants would use when pricing the asset or liability.  The hierarchy gives the highest priority to unadjusted quoted prices in active markets and the lowest priority to unobservable inputs.  UNIFI uses the following to measure fair value for its assets and liabilities.

• Level 1 – Observable inputs that reflect quoted prices for identical assets or liabilities in active markets.

• Level 2 – Inputs other than quoted prices included in Level 1 that are observable for the asset or liability either indirectly or directly.

• Level 3 – Unobservable inputs reflecting management’s own assumptions about the inputs used in pricing the asset or liability.

The classification of assets and liabilities within the valuation hierarchy is based upon the lowest level of input that is significant to the fair value measurement in its entirety.

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.

There were no transfers into or out of the levels of the fair value hierarchy for any years presented.

Income Taxes

Income taxes are accounted for under the asset and liability method. Deferred tax assets and liabilities are recorded to recognize the expected future tax benefits or costs of events that have been, or will be, reported in different tax years for financial statement purposes than for tax purposes.  Deferred tax assets and liabilities are determined based on the difference between the financial statement and tax bases of assets and liabilities using enacted tax rates in effect for the year in which these items are expected to reverse.  UNIFI reviews deferred tax assets to determine if it is more-likely-than-not they will be realized.  If UNIFI determines it is not more-likely-than-not that a deferred tax asset will be realized, it records a valuation allowance to reverse the previously recognized benefit.  Provision is made for taxes on undistributed earnings of foreign subsidiaries and related companies to the extent that such earnings are not deemed to be permanently invested.

UNIFI recognizes tax benefits related to uncertain tax positions if it believes it is more-likely-than-not of being sustained.  Recognized income tax positions are measured at the largest amount that is greater than 50% likely of being realized.  UNIFI accrues for other tax contingencies when it is probable that a liability to a taxing authority has been incurred and the amount of the contingency can be reasonably estimated.  Penalties and interest related to income tax expense, if incurred, are included in provision for income taxes.

Stock-Based Compensation

Compensation expense for stock awards is based on the grant date fair value and expensed over the applicable vesting period.  UNIFI has a policy of issuing new shares to satisfy award exercises and conversions.  For awards with a service condition and a graded vesting schedule, UNIFI has elected an accounting policy of recognizing compensation cost on a straight-line basis over the requisite service period for each separate vesting portion of the award as if the award was, in-substance, multiple awards.

Foreign Currency Translation

Assets and liabilities of foreign subsidiaries whose functional currency is other than the U.S. Dollar (“USD”) are translated at exchange rates existing at the respective balance sheet dates.  Translation gains and losses are not included in determining net income (loss) but are presented in a separate component of accumulated other comprehensive loss.  UNIFI translates the results of its foreign operations at the average exchange rates during the respective periods. Transaction gains and losses are included within other operating (income) expense, net.

Revenue Recognition

Revenue is recognized when performance obligations under the terms of a contract with a customer are satisfied, which primarily occurs at a point in time, upon either shipment or delivery to the customer. Revenue is recognized over time for contracts in which the associated inventory produced has no alternative use and for which an enforceable right to payment exists or the associated services have been rendered. Revenue is measured as the amount of consideration UNIFI expects to receive in exchange for completing its performance obligations (i.e., transferring goods or providing services), which includes estimates for variable consideration. Variable consideration includes volume-based incentives and product claims, which are offered within certain contracts between UNIFI and its customers and is not material.  Sales taxes and value added taxes assessed by governmental entities are excluded from the measurement of consideration expected to be received. Shipping and handling costs incurred after a customer has taken control of our goods are treated as a fulfillment cost and are not considered a separate performance obligation.

Cost of Sales

The major components of cost of sales are: (i) materials and supplies, (ii) labor and fringe benefits, (iii) utility and overhead costs associated with manufactured products, (iv) shipping, handling and warehousing costs, (v) depreciation expense, and (vi) all other costs related to production or service activities.

Shipping, Handling, and Warehousing Costs

Shipping, handling, and warehousing costs include costs to store goods prior to shipment, prepare goods for shipment and physically move goods to customers.

Research and Development Costs

Research and development costs include employee costs, production costs related to customer samples, operating supplies, consulting fees and other miscellaneous costs.  The cost of research and development is charged to expense as incurred.  Research and development costs were as follows:

	For the Fiscal Year Ended
	July 3, 2022		June 27, 2021		June 28, 2020
Research and development costs	$	12,103	$	11,483	$	11,257

Selling, General, and Administrative Expenses

The major components of SG&A expenses are: (i) costs of UNIFI’s sales organization, marketing and advertising efforts, and external commissions; (ii) costs of maintaining UNIFI’s general and administrative support functions including executive management, information technology, human resources, legal, and finance; (iii) amortization of intangible assets, and (iv) all other costs required to be classified as SG&A expenses.

Advertising Costs

Advertising costs are expensed as incurred and included in SG&A expenses.  UNIFI’s advertising costs include spending for items such as consumer marketing and branding initiatives, promotional items, trade shows, sponsorships, and other programs.  Advertising costs were as follows:

	For the Fiscal Year Ended
	July 3, 2022		June 27, 2021		June 28, 2020
Advertising costs	$	4,673	$	2,919	$	2,044

Self-Insurance

UNIFI self-insures certain risks such as employee healthcare claims and maintains stop-loss coverage.  Reserves for incurred but not reported healthcare claims are estimated using historical data, the timeliness of claims processing, medical trends, inflation, and any changes, if applicable, in the nature or type of the plan.

Contingencies

At any point in time, UNIFI may be a party to various pending legal proceedings, claims or environmental actions.  Accruals for estimated losses are recorded at the time information becomes available indicating that losses are probable and estimable.  Any amounts accrued are not discounted.  Legal costs such as outside counsel fees and expenses are charged to expense as incurred.

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Recent Accounting Pronouncements

12 Months Ended

Jul. 03, 2022

New Accounting Pronouncements And Changes In Accounting Principles [Abstract]

Recent Accounting Pronouncements

3. Recent Accounting Pronouncements

Issued and Pending Adoption

There have been no newly issued accounting pronouncements that are expected to have a significant impact on UNIFI’s consolidated financial statements.

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 an organization to measure all expected credit losses for financial assets held at the reporting date based on historical experience, current conditions and reasonable and supportable forecasts. Financial institutions and other organizations have begun to use forward-looking information to inform their credit loss estimates. 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.

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Leases

12 Months Ended

Jul. 03, 2022

Leases [Abstract]

Leases

4. Leases

In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842).  UNIFI adopted the new lease guidance utilizing the modified retrospective transition method, applied at the date of adoption, recording existing leases as of the effective date, July 1, 2019. Under this method, no adjustment to comparative prior periods is required and, accordingly, financial statement information and disclosures required under Topic 842 will not be provided for dates and periods prior to July 1, 2019.  UNIFI made no adjustment to the July 1, 2019 opening retained earnings balance for fiscal 2020.

UNIFI adopted the following practical expedients and elected the following accounting policies related to this standard update:

• carry forward of historical lease classifications and accounting treatment for existing land easements;

• not to reassess whether any expired or existing contracts are or contain leases;

• not to reassess initial direct costs for any existing leases;

• the use of hindsight;

• short-term lease accounting policy election allowing lessees to not recognize right-of-use assets and liabilities for leases with a term of 12 months or less and to recognize lease payments on a straight-line basis over the lease term and variable payments in the period the obligation is incurred; and

• the option not to separate lease and non-lease components for the transportation equipment asset class.

UNIFI routinely leases sales and administrative office space, warehousing and distribution centers, manufacturing space, transportation equipment, manufacturing equipment, and other information technology and office equipment from third parties.  The lease terms range from 1 to 15 years with various options for renewal. There are no residual value guarantees, restrictions, covenants, or sub-leases related to these leases.  Variable lease payments are determined as the amounts included in the lease payment that are based on the change in index or usage. UNIFI’s accounting for finance leases remained substantially unchanged. Disclosures related to the amount, timing and uncertainty of cash flows arising from leases are included below.

The following table sets forth the balance sheet location and values of the Company’s lease assets and lease liabilities:

Classification	Balance Sheet Location	July 3, 2022		June 27, 2021
Lease Assets
Operating lease assets	Operating lease assets	$	8,829	$	8,772
Finance lease assets	Property, plant & equipment, net		7,017		16,037
Total lease assets		$	15,846	$	24,809
Lease Liabilities
Current operating lease liabilities	Current operating lease liabilities	$	2,190	$	1,856
Current finance lease liabilities	Current portion of long-term debt		1,726		3,545
Total current lease liabilities		$	3,916	$	5,401
Non-current operating lease liabilities	Non-current operating lease liabilities	$	6,736	$	7,032
Non-current finance lease liabilities	Long-term debt		5,535		4,930
Total non-current lease liabilities		$	12,271	$	11,962
Total lease liabilities		$	16,187	$	17,363

The following table sets forth the components of UNIFI’s total lease cost for fiscal 2022 and 2021:

	For The Fiscal Year		For The Fiscal Year
Lease Cost	July 3, 2022		June 27, 2021
Operating lease cost	$	2,766	$	2,465
Variable lease cost		502		503
Finance lease cost:
Amortization of lease assets		1,981		1,998
Interest on lease liabilities		258		365
Short-term lease cost		967		1,007
Total lease cost	$	6,474	$	6,338

As of July 3, 2022 and June 27, 2021, Unifi had not received any COVID-19 rent concessions.

The following table presents supplemental information related to leases:

	For The Fiscal Year		For The Fiscal Year
Other Information	July 3, 2022		June 27, 2021
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows used by operating leases	$	2,766	$	2,465
Financing cash flows used by finance leases	$	3,707	$	3,646
Non-cash activities:
Leased assets obtained in exchange for new operating lease liabilities	$	1,662	$	2,606
Leased assets obtained in exchange for new finance lease liabilities	$	2,493	$	740

UNIFI calculates its operating lease liabilities and finance lease liabilities entered into after the adoption of the new lease standard based upon UNIFI’s incremental borrowing rate (the “IBR”). When determining the IBR, we consider our centralized treasury function and our current credit profile. UNIFI makes adjustments to this rate for securitization, the length of the lease term (tenure), and leases denominated in foreign currencies. Generally, the IBR for each jurisdiction approximates the specific risk-free rate for the respective jurisdiction incremented for UNIFI’s corporate credit risk and adjusted for tenure.

The following table sets forth UNIFI's weighted average remaining lease term in years and discount rate percentage used in the calculation of its outstanding lease liabilities:

Weighted Average Remaining Lease Term and Discount Rate	July 3, 2022			June 27, 2021
Weighted average remaining lease term (years):
Operating leases		4.1			5.9
Finance leases		4.2			3.8
Weighted average discount rate (percentage):
Operating leases		5.0	%		5.1	%
Finance leases		3.6	%		3.6	%

Lease Maturity Analysis

Future minimum finance lease payments and future minimum payments under non-cancelable operating leases with initial lease terms in excess of one year under Topic 842 as of July 3, 2022 by fiscal year were:

Maturity of Lease Liabilities	Finance Leases			Operating Leases
Fiscal 2023	$	2,032		$	2,595
Fiscal 2024		2,032			2,004
Fiscal 2025		1,880			1,498
Fiscal 2026		1,385			1,201
Fiscal 2027		821			971
Fiscal years thereafter		100			1,788
Total minimum lease payments	$	8,250		$	10,057
Less estimated executory costs		(413	)		—
Less imputed interest		(576	)		(1,131	)
Present value of net minimum lease payments		7,261			8,926
Less current portion of lease obligations		(1,726	)		(2,190	)
Long-term portion of lease obligations	$	5,535		$	6,736

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Revenue Recognition

12 Months Ended

Jul. 03, 2022

Revenue From Contract With Customer [Abstract]

Revenue Recognition

5.  Revenue Recognition

The following tables present net sales disaggregated by (i) classification of customer type and (ii) REPREVE Fiber sales:

	For the Fiscal Year Ended
	July 3, 2022		June 27, 2021		June 28, 2020
Third-party manufacturer	$	808,655	$	656,763	$	598,510
Service		7,103		10,829		7,999
Net sales	$	815,758	$	667,592	$	606,509

	For the Fiscal Year Ended
	July 3, 2022		June 27, 2021		June 28, 2020
REPREVE® Fiber	$	293,080	$	245,832	$	186,141
All other products and services		522,678		421,760		420,368
Net sales	$	815,758	$	667,592	$	606,509

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.

REPREVE Fiber

REPREVE Fiber represents our collection of fiber products on our recycled platform, with or without added technologies.

Variable Consideration

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. Variable consideration has been immaterial to UNIFI’s financial statements for all years presented.

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.

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Receivables, Net

12 Months Ended

Jul. 03, 2022

Receivables [Abstract]

Receivables, Net

6. Receivables, Net

Receivables, net consists of the following:

	July 3, 2022			June 27, 2021
Customer receivables	$	99,963		$	81,921
Allowance for uncollectible accounts		(1,498	)		(2,525	)
Reserves for quality claims		(860	)		(703	)
Net customer receivables		97,605			78,693
Other receivables		8,960			16,144
Total receivables, net	$	106,565		$	94,837

Other receivables includes $7,849 and $13,391 of banker’s acceptance notes (“BANs”) as of July 3, 2022 and June 27, 2021, respectively, in connection with the settlement of certain 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.

The changes in UNIFI’s allowance for uncollectible accounts and reserves for quality claims were as follows:

	Allowance for Uncollectible Accounts			Reserves for Quality Claims
Balance at June 30, 2019	$	(2,338	)	$	(961	)
Charged to costs and expenses		(1,739	)		(1,251	)
Translation activity		186			10
Deductions		95			1,274
Balance at June 28, 2020	$	(3,796	)	$	(928	)
Credited (charged) to costs and expenses		1,316			(1,085	)
Translation activity		(89	)		(36	)
Deductions		44			1,346
Balance at June 27, 2021	$	(2,525	)	$	(703	)
Credited (charged) to costs and expenses		445			(1,065	)
Translation activity		40			12
Deductions		542			896
Balance at July 3, 2022	$	(1,498	)	$	(860	)

Amounts credited (charged) to costs and expenses for the allowance for uncollectible accounts are reflected in the (benefit) provision for bad debts and deductions represent amounts written off which were deemed to not be collectible, net of any recoveries.  Amounts charged to costs and expenses for the reserves for quality claims are primarily reflected as a reduction of net sales and deductions represent adjustments to either increase or decrease claims based on negotiated amounts or actual versus estimated claim differences.  

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Inventories

12 Months Ended

Jul. 03, 2022

Inventory Disclosure [Abstract]

Inventories

7.  Inventories

Inventories consists of the following:

	July 3, 2022			June 27, 2021
Raw materials	$	69,994		$	54,895
Supplies		11,953			10,692
Work in process		10,358			7,516
Finished goods		84,477			70,525
Gross inventories		176,782			143,628
Net realizable value adjustment		(3,487	)		(2,407	)
Total inventories	$	173,295		$	141,221

The cost for the majority of UNIFI’s inventories is determined using the first-in, first-out method.  Certain foreign inventories and limited categories of supplies of $53,793 and $58,468 as of July 3, 2022 and June 27, 2021, respectively, were valued under the average cost method.

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Other Current Assets

12 Months Ended

Jul. 03, 2022

Other Assets Current [Abstract]

Other Current Assets

8. Other Current Assets

Other current assets consists of the following:

	July 3, 2022		June 27, 2021
Vendor deposits	$	6,910	$	3,341
Recovery of non-income taxes, net		6,770		3,456
Prepaid expenses and other		3,004		2,753
Value-added taxes receivable		1,987		2,484
Contract assets		285		330
Total other current assets	$	18,956	$	12,364

Vendor deposits primarily relates to down payments made toward the purchase of inventory. Recovery of non-income taxes, net relates to favorable litigation results for UNIFI’s Brazilian operations in fiscal 2021, generating overpayments that resulted from excess social program taxes paid in prior fiscal years, as further described below. Prepaid expenses consists of advance payments for routine operating expenses. Value-added taxes receivable relates to recoverable taxes associated with the sales and purchase activities of UNIFI’s foreign operations. Contract assets represents the estimated revenue attributable to UNIFI in connection with completed performance obligations under contracts with customers for which revenue is recognized over time. The contract assets are classified to receivables when the right to payment becomes unconditional.

Recovery of Non-Income Taxes, Net

Brazilian companies are subject to various taxes on business operations, including turnover taxes used to fund social security and unemployment programs, commonly referred to as PIS/COFINS taxes.  UNIFI, along with numerous other companies in Brazil, challenged the constitutionality of certain state taxes historically included in the PIS/COFINS tax base.

On May 13, 2021, Brazil’s Supreme Federal Court (“SFC”) ruled in favor of taxpayers, and on July 7, 2021, the Brazilian Internal Revenue Service withdrew its existing appeal. Following the SFC decision, the federal government will not issue refunds for these taxes but will instead allow for the overpayments and associated interest to be applied as credits against future PIS/COFINS tax obligations.

There are no limitations or restrictions on UNIFI’s ability to recover the associated overpayment claims as future income is generated. In fiscal 2021, UNIFI recorded $11,519 to reflect the current and non-current recovery of PIS/COFINS taxes and associated interest, with $942 of recoveries relating to fiscal 2021 included within net sales and $10,577 of recoveries relating to fiscal years prior to 2021, which is reduced by fees related to the recovery efforts to comprise $9,717 for recovery of non-income taxes. During fiscal 2022, UNIFI (i) reduced the estimated recovery by $815, based on additional clarity and review of the recovery process during the months following the associated SFC decision and (ii) updated the expected duration of claim recovery to the 12-month period following March 27, 2022. The remaining recovery amount was reclassed to current assets accordingly, with no amounts reflected in other non-current assets at July 3, 2022.

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Property, Plant and Equipment, Net

12 Months Ended

Jul. 03, 2022

Property Plant And Equipment [Abstract]

Property, Plant and Equipment, Net

9.  Property, Plant and Equipment, Net

PP&E, net consists of the following:

	July 3, 2022			June 27, 2021
Land	$	3,160		$	3,184
Land improvements		16,443			16,372
Buildings and improvements		164,252			160,122
Assets under finance leases		10,921			22,000
Machinery and equipment		635,699			609,414
Computers, software and office equipment		25,348			24,848
Transportation equipment		10,591			10,461
Construction in progress		20,397			17,834
Gross PP&E		886,811			864,235
Less: accumulated depreciation		(666,569	)		(656,576	)
Less: accumulated amortization – finance leases		(3,904	)		(5,963	)
Total PP&E, net	$	216,338		$	201,696

Assets under finance leases consists of the following:

	July 3, 2022		June 27, 2021
Transportation equipment	$	8,276	$	8,276
Machinery and equipment		2,645		9,897
Building improvements		—		3,827
Gross assets under finance leases	$	10,921	$	22,000

Depreciation and amortization expense and repair and maintenance expenses were as follows:

	For the Fiscal Year Ended
	July 3, 2022		June 27, 2021		June 28, 2020
Depreciation and amortization expense	$	24,509	$	24,215	$	22,551
Repair and maintenance expenses		20,076		18,118		18,093

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Other Non-Current Assets

12 Months Ended

Jul. 03, 2022

Other Assets Noncurrent Disclosure [Abstract]

Other Non-Current Assets

10. Other Non-Current Assets

Other non-current assets consists of the following:

	July 3, 2022		June 27, 2021
Intangible assets, net	$	2,500	$	3,978
Grantor trust		2,196		—
Investments in unconsolidated affiliates		2,072		2,159
Recovery of non-income taxes, net		—		8,063
Other		2,020		425
Total other non-current assets	$	8,788	$	14,625

Grantor Trust

During fiscal 2022, UNIFI established a grantor (or “rabbi”) trust to facilitate the payment of obligations under the Unifi, Inc. Deferred Compensation Plan (the “DCP”), which was also established in fiscal 2022. In addition to providing certain key employees with the ability to defer earned cash incentive compensation into the DCP, participants can generally choose the form and timing of deferred amounts. The DCP assumed the participants, obligations, and major terms of the Unifi, Inc. Supplemental Key Employee Retirement Plan (together with amendments, the “SERP”), an unfunded plan established in 2006 for purposes of generating supplemental retirement income for key employees of UNIFI. The amounts credited to participant accounts are reflected in selling, general, and administrative expenses. The assets of the trust are subject to the claims of UNIFI’s creditors in the event of insolvency.  Investments held for the DCP consist of mutual funds and are recorded based on market values.  A change in the value of the trust assets would substantially be offset by a change in the liability to the participants, resulting in an immaterial net impact on our consolidated financial statements.

The fair value of the investment assets held by the trust were approximately $2,196 and $0 as of July 3, 2022 and June 27, 2021, respectively, and are classified as trading securities within Other non-current assets.  Trading gains and losses associated with these investments are recorded to Other operating expense, net.  The associated DCP liability is recorded within Other current liabilities and Other long-term liabilities based on expected payment timing, and any increase or decrease in the liability is reflected as compensation in Selling, general and administrative expenses.  During fiscal 2022, we recorded losses on investments held by the trust of $48.

Recovery of Non-Income Taxes, Net

As previously described in Note 8, “Other Current Assets,” UNIFI recorded a recovery of non-income taxes and reflected current and non-current assets accordingly.

Intangible Assets

Intangible assets, net consists of the following:

	July 3, 2022			June 27, 2021
Customer lists	$	5,220		$	5,220
Non-compete agreement		1,875			1,875
Trademarks		104			411
Total intangible assets, gross		7,199			7,506
Accumulated amortization – customer lists		(3,056	)		(2,049	)
Accumulated amortization – non-compete agreement		(1,563	)		(1,188	)
Accumulated amortization – trademarks		(80	)		(291	)
Total accumulated amortization		(4,699	)		(3,528	)
Total intangible assets, net	$	2,500		$	3,978

UNIFI capitalizes costs incurred to register trademarks primarily for REPREVE in various countries. UNIFI has determined that these trademarks have varying useful lives of up to three years and are being amortized using the straight-line method.

Amortization expense for intangible assets consists of the following:

	For the Fiscal Year Ended
	July 3, 2022		June 27, 2021		June 28, 2020
Customer lists	$	1,007	$	556	$	326
Non-compete agreement		375		375		375
Trademarks		96		147		154
Total amortization expense	$	1,478	$	1,078	$	855

The following table presents the expected intangible asset amortization for the next five fiscal years:

	Fiscal 2023		Fiscal 2024		Fiscal 2025		Fiscal 2026		Fiscal 2027		Thereafter
Expected amortization	$	1,291	$	528	$	108	$	108	$	108	$	357

Investments in Unconsolidated Affiliates

U.N.F. Industries, Ltd.

In September 2000, UNIFI and Nilit Ltd. (“Nilit”) formed a 50/50 joint venture, U.N.F. Industries Ltd. (“UNF”), for the purpose of operating nylon extrusion assets to manufacture nylon POY.  Raw material and production services for UNF are provided by Nilit 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

In October 2009, UNIFI and Nilit America Inc. (“Nilit America”) formed a 50/50 joint venture, UNF America LLC (“UNFA”), for the purpose of operating a nylon extrusion facility which manufactures nylon POY.  Raw material and production services for UNFA are provided by Nilit America under separate supply and services agreements.  UNFA’s fiscal year end is December 31 and it is a limited liability company located in Ridgeway, Virginia.  UNFA is treated as a partnership for its income tax reporting.

In conjunction with the formation of UNFA, UNIFI entered into a supply agreement with UNF and UNFA (collectively, “UNFs”) 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 agreement has no stated minimum purchase quantities, and pricing is negotiated every six months based on market rates.  As of July 3, 2022, UNIFI’s open purchase orders related to this agreement were $896.

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

	For the Fiscal Year Ended
	July 3, 2022		June 27, 2021		June 28, 2020
UNFA	$	29,637	$	18,932	$	14,583
UNF		1,175		548		1,450
Total	$	30,812	$	19,480	$	16,033

As of July 3, 2022 and June 27, 2021, UNIFI had combined accounts payable due to UNF and UNFA of $5,565 and $2,955, respectively.

UNIFI has determined that UNF and UNFA are variable interest entities and has also determined that UNIFI is the primary beneficiary of these entities, based on the terms of the supply agreement.  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 so all intercompany sales would be eliminated in consolidation, (ii) the two entities’ balance sheets constitute 3% or less of UNIFI’s current assets and total assets, 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 and instead is accounting for these entities as equity investments.  As of July 3, 2022, UNIFI’s combined investments in UNF and UNFA were $2,072.  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.

Parkdale America, LLC

In June 1997, UNIFI and Parkdale Mills, Inc. (“Mills”) entered into a Contribution Agreement that set forth the terms and conditions by which the two companies contributed all of the assets of their spun cotton yarn operations utilizing open-end and air-jet spinning technologies to create PAL, a producer of yarns for sale to the global textile industry and apparel market.  In exchange for its contribution, UNIFI received a 34% equity ownership interest in the PAL Investment, accounted for using the equity method of accounting.  Effective January 1, 2012, Mills’ interest in PAL was assigned to Parkdale.

During March 2020, UNIFI commenced negotiations to sell the PAL Investment to Parkdale. Such negotiations indicated that the fair value of the PAL Investment was less than UNIFI’s carrying value, and UNIFI no longer intended to hold the PAL Investment to allow recovery of the carrying value. UNIFI recorded an other-than-temporary impairment of $45,194 to adjust the PAL Investment to fair value. In April 2020, UNIFI and Parkdale finalized negotiations to sell UNIFI’s PAL Investment to Parkdale for $60,000. The transaction closed on April 29, 2020, and UNIFI received $60,000 in cash.

During UNIFI’s period of ownership, PAL was a limited liability company treated as a partnership for income tax reporting purposes.  Per PAL’s fiscal 2020 unaudited financial statements, PAL had 10 manufacturing facilities located primarily in the southeast region of the U.S. and in Mexico, and PAL’s five largest customers accounted for approximately 69% of total revenues and 68% of total gross accounts receivable outstanding.

Condensed balance sheet and income statement information for UNFs (including reciprocal balances) is presented in the following tables. Fiscal 2020 PAL Investment income statement activity is reported for the ten months of fiscal 2020 ownership ending April 29, 2020.

	July 3, 2022		June 27, 2021
Current assets	$	10,705	$	7,931
Non-current assets		605		659
Current liabilities		8,056		3,967
Non-current liabilities		—		—
Shareholders’ equity and capital accounts		3,254		4,623
UNIFI’s portion of undistributed earnings		2,013		2,100

	July 3, 2022		June 27, 2021
Net sales	$	31,745	$	19,649
Gross profit		1,928		3,423
Income from operations		148		1,777
Net income		127		1,782
Depreciation and amortization		121		151
Distributions received		750		750

	For the Fiscal Year Ended June 28, 2020
	PAL			UNFs		Total
Net sales	$	544,006		$	17,068	$	561,074
Gross profit		7,592			2,056		9,648
(Loss) income from operations		(7,484	)		410		(7,074	)
Net (loss) income		(2,823	)		497		(2,326	)
Depreciation and amortization		33,455			135		33,590
Cash received by PAL under cotton rebate program		11,186			—		11,186
Earnings recognized by PAL for cotton rebate program		9,697			—		9,697
Distributions received		10,437			—		10,437

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Other Current Liabilities

12 Months Ended

Jul. 03, 2022

Other Liabilities Current [Abstract]

Other Current Liabilities

11. Other Current Liabilities

Other current liabilities consists of the following:

	July 3, 2022		June 27, 2021
Payroll and fringe benefits	$	9,414	$	10,204
Incentive compensation		3,916		12,356
Utilities		2,287		2,347
Deferred revenue		1,694		2,691
Interest rate swaps		—		1,234
Property taxes and other		2,495		2,806
Total other current liabilities	$	19,806	$	31,638

13. Other Long-Term Liabilities

Other long-term liabilities consists of the following:

	July 3, 2022		June 27, 2021
Nonqualified deferred compensation plan obligation	$	1,982	$	2,090
Uncertain tax positions		1,575		3,045
Other		892		2,337
Total other long-term liabilities	$	4,449	$	7,472

As further described in Note 10, “Other Non-Current Assets,” UNIFI maintains a nonqualified deferred compensation plan for certain key employees and reflects a long-term obligation for amounts due beyond twelve months.

Other primarily includes certain retiree and post-employment medical and disability liabilities.

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Long-Term Debt

12 Months Ended

Jul. 03, 2022

Debt Disclosure [Abstract]

Long-Term Debt

12. 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	July 3, 2022	July 3, 2022			June 27, 2021
ABL Revolver	December 2023	3.2%	$	41,300		$	—
ABL Term Loan	December 2023	3.2%		65,000			77,500
Finance lease obligations	(1)	3.6%		7,261			8,475
Construction financing	(2)	1.9%		729			882
Total debt				114,290			86,857
Current ABL Term Loan				(10,000	)		(12,500	)
Current portion of finance lease obligations				(1,726	)		(3,545	)
Unamortized debt issuance costs				(255	)		(476	)
Total long-term debt			$	102,309		$	70,336

(1) Scheduled maturity dates for finance lease obligations range from March 2025 to November 2027.

(2) Refer to the discussion below under the subheading “Construction Financing” for further information.  

ABL Facility

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.

The 2018 Amendment made the following changes to the Credit Agreement, among others: (i) extended the maturity date from March 26, 2020 to December 18, 2023 and (ii) decreased the Applicable Margin (as defined in the Credit Agreement) pricing structure for Base Rate Loans (as defined in the Credit Agreement) and LIBOR Rate Loans (as defined in the Credit Agreement) by 25 basis points.

In connection and concurrent with the sale of UNIFI’s 34% interest in PAL on April 29, 2020, UNIFI entered into the Fourth Amendment to Amended and Restated Credit Agreement (“Fourth Amendment”).  The Fourth Amendment, among other things, revised the:  (i) definition of permitted dispositions within the Credit Agreement to include the sale by Unifi Manufacturing, Inc. of its equity interest in PAL so long as the aggregate net cash proceeds received equaled or exceeded $60,000 and such sale occurred on or before May 15, 2020;  (ii) terms of the Credit Agreement to allow the net cash proceeds from the sale of PAL to be applied to the outstanding principal amount of the ABL Revolver until paid in full with the remaining net cash proceeds retained by UNIFI, so long as certain conditions were met; and (iii) terms of the Credit Agreement to allow the lenders to make changes to the benchmark interest rate without further amendment should LIBOR temporarily or permanently cease to exist and a transition to a new benchmark interest rate such as the Secured Overnight Financing Rate (“SOFR”) be required for future ABL Facility borrowings. The Fourth Amendment generated no change in cash flows for the Credit Agreement and, accordingly, followed debt modification accounting.

On February 5, 2021, UNIFI entered into the Fifth Amendment to Amended and Restated Agreement (“Fifth Amendment”).  The Fifth Amendment primarily allowed for share repurchases of up to $5,000 to be completed from available domestic cash, through June 30, 2021. No such share repurchases were made.

The ABL Facility is secured by a first-priority perfected security interest in substantially all owned property and assets (together with all proceeds and products) of Unifi, Inc., Unifi Manufacturing, Inc., and a certain subsidiary guarantor (collectively, the “Loan Parties”). It is also secured by a first-priority security interest in all (or 65% in the case of UNIFI’s first-tier controlled foreign subsidiary, as required by the lenders) of the stock of (or other ownership interests in) each of the Loan Parties (other than Unifi, Inc.) and certain subsidiaries of the Loan Parties, together with all proceeds and products thereof.

If excess availability under the ABL Revolver falls below the Trigger Level (as defined in the Credit Agreement), a financial covenant requiring the Loan Parties to maintain a fixed charge coverage ratio on a quarterly basis of at least 1.05 to 1.00 becomes effective. The Trigger Level as of July 3, 2022 was $20,625. In addition, the ABL Facility contains restrictions on particular payments and investments, including certain restrictions on the payment of dividends and share repurchases. Subject to specific provisions, the ABL Term Loan may be prepaid at par, in whole or in part, at any time before the maturity date, at UNIFI’s discretion.

ABL Facility borrowings bear interest at LIBOR plus an applicable margin of 1.25% to 1.75%, or the Base Rate (as defined below) plus an applicable margin of 0.25% to 0.75%, with interest currently being paid on a monthly basis. The applicable margin is based on (i) the excess availability under the ABL Revolver and (ii) the consolidated leverage ratio, calculated as of the end of each fiscal quarter. The Base Rate means the greater of (i) the prime lending rate as publicly announced from time to time by Wells Fargo Bank, National Association, (ii) the Federal Funds Rate (as defined in the Credit Agreement) plus 0.5%, and (iii) LIBOR plus 1.0%. UNIFI’s ability to borrow under the ABL Revolver is limited to a borrowing base equal to specified percentages of eligible accounts receivable and inventories and is subject to certain conditions and limitations. There is also a monthly unused line fee under the ABL Revolver of 0.25%.

In 2017, UNIFI entered into three interest rate swaps with Wells Fargo Bank, N.A., with notional amounts of $20,000 (“Swap A”), $30,000 (“Swap B”) and $25,000 (“Swap C”), respectively. The combined designated hedges fixed LIBOR at approximately 1.9% for $75,000 of variable rate borrowings through May 24, 2022.  Such swaps terminated in May 2022 and there were no material fair value or hedging impacts.

As of July 3, 2022: UNIFI had $0 of standby letters of credit; excess availability under the ABL Revolver was $51,409; and the fixed charge coverage ratio was (0.24) to 1.00.

Finance Lease Obligations

During fiscal 2022, UNIFI entered into finance lease obligations totaling $2,493 for eAFK Evo texturing machines.  The maturity dates of these obligations occur during fiscal 2027 with interest rates between 3.0% and 4.4%.

During fiscal 2021, UNIFI entered into finance lease obligations totaling $740 for certain transportation equipment.  The maturity date of these obligations is June 2025 with an interest rate of 3.8%.

During fiscal 2020, UNIFI entered into finance lease obligations totaling $6,301 for certain transportation equipment.  The maturity date of these obligations range from March 2025 to November 2026 with interest rates ranging from 3.1% to 3.5%.  

Construction Financing

In May 2021, UNIFI entered into an agreement with a third party lender that provides for construction-period financing for certain texturing machinery included in our capital allocation plans. UNIFI records project costs to construction in progress and the corresponding liability to construction financing (within long-term debt). The agreement provides for monthly, interest-only payments during the construction period, at a rate of SOFR plus 1.25%, and contains terms customary for a financing of this type.

Each borrowing under the agreement provides for 60 monthly payments, which will commence upon the completion of the construction period with an interest rate of approximately 4.4%. In connection with this construction financing arrangement, UNIFI has borrowed a total of $3,222 and transitioned $2,493 of completed asset costs to finance lease obligations as of July 3, 2022.

Scheduled Debt Maturities

The following table presents the scheduled maturities of UNIFI’s outstanding debt obligations for the following five fiscal years and thereafter.

	Fiscal 2023		Fiscal 2024		Fiscal 2025		Fiscal 2026		Fiscal 2027		Thereafter
ABL Revolver	$	—	$	41,300	$	—	$	—	$	—	$	—
ABL Term Loan		10,000		55,000		—		—		—		—
Finance lease obligations		1,726		1,787		1,699		1,255		732		62
Total (1)	$	11,726	$	98,087	$	1,699	$	1,255	$	732	$	62

(1) Total reported excludes $729 for construction financing, described above.

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Other Long-Term Liabilities

12 Months Ended

Jul. 03, 2022

Other Liabilities Disclosure [Abstract]

Other Current Liabilities

11. Other Current Liabilities

Other current liabilities consists of the following:

	July 3, 2022		June 27, 2021
Payroll and fringe benefits	$	9,414	$	10,204
Incentive compensation		3,916		12,356
Utilities		2,287		2,347
Deferred revenue		1,694		2,691
Interest rate swaps		—		1,234
Property taxes and other		2,495		2,806
Total other current liabilities	$	19,806	$	31,638

13. Other Long-Term Liabilities

Other long-term liabilities consists of the following:

	July 3, 2022		June 27, 2021
Nonqualified deferred compensation plan obligation	$	1,982	$	2,090
Uncertain tax positions		1,575		3,045
Other		892		2,337
Total other long-term liabilities	$	4,449	$	7,472

As further described in Note 10, “Other Non-Current Assets,” UNIFI maintains a nonqualified deferred compensation plan for certain key employees and reflects a long-term obligation for amounts due beyond twelve months.

Other primarily includes certain retiree and post-employment medical and disability liabilities.

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Income Taxes

12 Months Ended

Jul. 03, 2022

Income Tax Disclosure [Abstract]

Income Taxes

14. Income Taxes

Components of Income (Loss) Before Income Taxes

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

	For the Fiscal Year Ended
	July 3, 2022			June 27, 2021			June 28, 2020
U.S.	$	(18,364	)	$	(12,463	)	$	(74,905	)
Foreign		45,192			58,810			18,640
Income (loss) before income taxes	$	26,828		$	46,347		$	(56,265	)

Components of Provision for Income Taxes

Provision for income taxes consists of the following:

	For the Fiscal Year Ended
	July 3, 2022			June 27, 2021			June 28, 2020
Current:
Federal	$	(1,163	)	$	(577	)	$	282
State		2			25			(118	)
Foreign		15,935			12,739			4,819
Total current tax expense		14,774			12,187			4,983
Deferred:
Federal		(630	)		(1,564	)		(3,783	)
State		33			131			116
Foreign		(2,520	)		6,520			(344	)
Total deferred tax expense		(3,117	)		5,087			(4,011	)
Provision for income taxes	$	11,657		$	17,274		$	972

On December 22, 2017, the U.S. government enacted comprehensive tax legislation H.R. 1, formerly known as the Tax Cuts and Jobs Act.  The Global Intangible Low-Taxed Income (“GILTI”) provisions included in H.R. 1 require that certain income earned by foreign subsidiaries must be currently included in the gross income of the U.S. shareholder.  UNIFI has elected to recognize GILTI as a current-period expense. Under this policy, UNIFI has not provided deferred taxes related to temporary differences that, upon their reversal, will affect the amount of income subject to GILTI in the period.

On July 20, 2020, the U.S. Treasury issued and enacted final regulations related to 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. Fiscal 2021 includes a tax benefit of $4,816 related to the retroactive election.

Utilization of Net Operating Loss Carryforwards

Domestic deferred tax expense includes the utilization of federal net operating loss (“NOL”) carryforwards of $110, $5,312 and $89 for fiscal 2022, 2021, and 2020, respectively. Foreign deferred tax expense includes the utilization of NOL carryforwards of $32, $441, and $702 for fiscal 2022, 2021, and 2020, respectively. State deferred tax expense includes the utilization of NOL carryforwards of $25, $167, and $20 for fiscal 2022, 2021, and 2020, respectively.

Effective Tax Rate

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

	For the Fiscal Year Ended
	July 3, 2022			June 27, 2021			June 28, 2020
Federal statutory tax rate		21.0	%		21.0	%		21.0	%
Change in valuation allowance		12.6			5.0			0.6
Foreign income taxed at different rates		10.7			9.0			(1.2	)
Tax expense on unremitted foreign earnings		5.5			7.0			(0.9	)
Repatriation of foreign earnings and withholding taxes		3.9			1.8			(2.0	)
Change in uncertain tax positions		2.4			0.5			(0.3	)
Nondeductible compensation		2.1			1.4			(0.8	)
U.S. tax on GILTI		0.2			3.9			(5.0	)
Nontaxable income		(10.2	)		(2.4	)		1.1
Research and other business credits		(4.0	)		(3.7	)		2.0
State income taxes, net of federal tax benefit		(1.3	)		(0.2	)		2.6
Foreign tax credits		(0.5	)		(5.4	)		0.9
Deemed repatriation of foreign earnings under Subpart F		—			1.5			—
Domestic production activities deduction		—			0.6			—
Rate benefit of U.S. federal NOL carryback		—			(2.8	)		—
Valuation allowance related to loss on sale of investment in PAL		—			—			(19.3	)
Nondeductible expenses and other		1.1			0.1			(0.4	)
Effective tax rate		43.5	%		37.3	%		(1.7	)%

Deferred Income Taxes

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

	July 3, 2022			June 27, 2021
Deferred tax assets:
Capital loss carryforwards	$	16,318		$	17,429
Tax credits		12,079			18,711
Research and development costs		7,409			6,934
NOL carryforwards		6,603			3,043
Accrued compensation		2,106			4,056
Other items		4,877			4,815
Total gross deferred tax assets		49,392			54,988
Valuation allowance		(31,667	)		(36,980	)
Net deferred tax assets		17,725			18,008
Deferred tax liabilities:
PP&E		(14,952	)		(16,045	)
Unremitted earnings		(5,253	)		(3,769	)
Recovery of non-income taxes		132			(3,664	)
Other		(138	)		(8	)
Total deferred tax liabilities		(20,211	)		(23,486	)
Net deferred tax liabilities	$	(2,486	)	$	(5,478	)

Deferred Income Taxes – Valuation Allowance

In assessing its ability to realize deferred tax assets, UNIFI considers whether it is more-likely-than-not that some portion or all of the deferred tax assets will not be realized.  The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible.  UNIFI considers the scheduled reversal of taxable temporary differences, taxable income in carryback years, cumulative losses in recent 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. Based on consideration of these items, management has determined that enough uncertainty exists relative to the realization of its deferred income tax asset balances to warrant the application of a full valuation allowance against the deferred tax assets of its U.S. consolidated group and certain foreign subsidiaries as of July 3, 2022.

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

	For the Fiscal Year Ended
	July 3, 2022			June 27, 2021			June 28, 2020
Capital loss carryforwards	$	(16,318	)	$	(17,429	)	$	(13,791	)
Tax credits		(10,779	)		(17,215	)		(17,111	)
NOL carryforwards		(4,570	)		(2,336	)		(2,542	)
Investments, including unconsolidated affiliates		—			—			(3,995	)
Total deferred tax valuation allowance	$	(31,667	)	$	(36,980	)	$	(37,439	)

During fiscal 2022, UNIFI’s valuation allowance decreased by $5,313. The decrease was primarily driven by a decrease in the valuation allowance on foreign tax credits and capital loss carryforwards, offset by an increase in the valuation allowance on federal net operating loss and research credits carryforwards.

During fiscal 2021, UNIFI’s valuation allowance decreased by $459. The decrease was primarily driven by a decrease in the valuation allowance on investments in unconsolidated affiliates and foreign tax credits, offset by an increase in the valuation allowance on research credits and capital loss carryforwards.

During fiscal 2020, UNIFI’s valuation allowance increased by $11,419. The increase was primarily driven by an increase in the valuation allowance on a capital loss generated by the sale of UNIFI’s interest in PAL.  

Unrecognized Tax Benefits

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

	For the Fiscal Year Ended
	July 3, 2022			June 27, 2021			June 28, 2020
Balance at beginning of year	$	2,590		$	1,218		$	1,083
Gross increases (decreases) related to current period tax positions		408			(24	)		98
Gross (decreases) increases related to tax positions in prior periods		(89	)		1,396			37
Gross decreases related to settlements with tax authorities		—			—			—
Gross decreases related to lapse of applicable statute of limitations		—			—			—
Balance at end of year	$	2,909		$	2,590		$	1,218

Unrecognized tax benefits would generate a favorable impact of $4,746 on UNIFI’s effective tax rate when recognized. UNIFI does not expect material changes in uncertain tax positions within the next 12 months.  Expense for interest and penalties recognized by UNIFI within the provision for income taxes was $287, $141, and $69 for fiscal 2022, 2021, and 2020, respectively.  UNIFI had $559, and $273 accrued for interest and/or penalties related to uncertain tax positions as of July 3, 2022 and June 27, 2021, respectively.

Expiration of Net Operating Loss Carryforwards and Tax Credit Carryforwards

As of July 3, 2022, UNIFI had U.S. federal capital loss carryforwards of $71,105, U.S. federal NOL carryforwards of $16,731, U.S. state NOL carryforwards of $70,601 and foreign NOL carryforwards of $395. The NOL carryforwards begin expiring in varying amounts in fiscal 2023.  As of July 3, 2022, UNIFI had the following carryforward attributes held outside of the U.S. consolidated tax filing group: U.S. federal NOL carryforwards of $2,340 and U.S. state NOL carryforwards of $14,421. The NOL carryforwards held outside of the U.S. consolidated tax filing group begin expiring in fiscal 2023. As of July 3, 2022, UNIFI had U.S. federal foreign tax credit carryforwards of $3,075 and foreign tax credit carryforwards in foreign jurisdictions of $3,170. The foreign tax credit carryforwards begin expiring in varying amounts in fiscal 2023. As of July 3, 2022, UNIFI had U.S. federal research tax credit carryforwards of $5,284, which begin expiring in fiscal 2039.

Tax Years Subject to Examination

Unifi, Inc. and its domestic subsidiaries file a consolidated federal income tax return, as well as income tax returns in multiple state and foreign jurisdictions.  The tax years subject to examination vary by jurisdiction.  UNIFI regularly assesses the outcomes of both completed and ongoing examinations to ensure that UNIFI’s provision for income taxes is sufficient.

In fiscal 2019, the Internal Revenue Service (“IRS”) initiated an audit of UNIFI’s domestic operations for fiscal years 2016 and 2017.  In fiscal 2020, the IRS expanded the audit to include fiscal 2018.  In fiscal 2021, the IRS expanded the audit to include fiscal 2019.  Fiscal years 2009 through 2014 remain open for certain foreign tax credit amendments and net operating loss and general business credit carrybacks.

Statutes related to material foreign jurisdictions are open from January 1, 2017 and material state jurisdictions from June 30, 2019.  Certain carryforward tax attributes generated in years prior remain subject to examination and could change in subsequent tax years.

Indefinite Reinvestment Assertion

UNIFI considers $26,253 of its unremitted foreign earnings to be permanently reinvested to fund working capital requirements and operations abroad and has therefore not recognized a deferred tax liability for the estimated future taxes that would be incurred upon repatriation. If these earnings were distributed in the form of dividends or otherwise, or if the shares of the relevant foreign subsidiaries were sold or otherwise transferred, UNIFI could be subject to additional tax liabilities of approximately $6,046.

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Shareholders' Equity

12 Months Ended

Jul. 03, 2022

Stockholders Equity Note [Abstract]

Shareholders' Equity

15. Shareholders’ Equity

On October 31, 2018, UNIFI announced that 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 via 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		—	$	—	$	50,000
Fiscal 2020		84	$	23.72	$	48,008
Fiscal 2021		—	$	—	$	48,008
Fiscal 2022		617	$	14.84	$	38,859
Total		701	$	15.90	$	38,859

As of July 3, 2022, $38,859 remained available for repurchase under the 2018 SRP.

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.

No dividends were paid in the three most recent fiscal years.

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Stock-Based Compensation

12 Months Ended

Jul. 03, 2022

Disclosure Of Compensation Related Costs Sharebased Payments [Abstract]

Stock-Based Compensation

16. Stock-Based Compensation

On October 23, 2013, UNIFI’s shareholders approved the Unifi, Inc. 2013 Incentive Compensation Plan (the “2013 Plan”). The 2013 Plan replaced the 2008 Unifi, Inc. Long-Term Incentive Plan (the “2008 LTIP”). No additional awards can be granted under the 2008 LTIP; however, prior awards outstanding under the 2008 LTIP remain subject to that plan’s provisions. The 2013 Plan authorized the issuance of 1,000 shares of common stock, subject to certain increases in the event outstanding awards under the 2008 LTIP expired, were forfeited or otherwise terminated unexercised.

The 2013 Plan expired in accordance with its terms on October 24, 2018, and the Unifi, Inc. Amended and Restated 2013 Incentive Compensation Plan (the “Amended 2013 Plan”) became effective on that same day, upon approval by shareholders at UNIFI’s annual meeting of shareholders held on October 31, 2018.  The Amended 2013 Plan increased the number of shares available for future issuance pursuant to awards granted under the Amended 2013 Plan to 1,250 and removed provisions no longer applicable due to the recent changes to Section 162(m) of the Internal Revenue Code of 1986, as amended. The material terms and provisions of the Amended 2013 Plan are otherwise similar to those of the 2013 Plan.

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 prior plans; however, awards outstanding under a respective prior plan remain subject to that plan’s provisions.

The following table provides information as of July 3, 2022 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	1
Less: Awards granted to employees	(209	)
Less: Awards granted to non-employee directors	(41	)
Available for issuance under the 2020 Plan	601

Stock Options

A summary of UNIFI’s stock options granted to key employees and valued under the Black-Scholes model is as follows:

	For the Fiscal Year Ended
	July 3, 2022		June 27, 2021		June 28, 2020
Quantity		—		155		143
Service Period (years)		—		3.0		3.0
Weighted Average Exercise Price	$	—	$	15.64	$	19.95
Weighted Average Grant Date Fair Value	$	—	$	6.75	$	7.33

On May 1, 2020, excluded from the fiscal 2020 table above, UNIFI granted stock options to purchase 533 shares of its common stock to a key employee with an exercise price of $11.74 and 10-year contractual terms, as follows:

• 100 vested immediately and had a grant date fair value of $4.83 using the Black-Scholes model;

• 100 cliff-vest after three years of service and had a grant date fair value of $4.83 using the Black-Scholes model;

• 100 vest following a common stock price attainment of $40 for ten consecutive trading days and four years of service or a common stock price attainment of $50 for ten consecutive trading days after four years of service and before five years of service and had a grant date fair value of $2.70 under a Monte Carlo simulation; and

• 233 vest following a common stock price attainment of $50 for ten consecutive trading days and five years of service and had a grant date fair value of $2.33 under a Monte Carlo simulation.

The Black-Scholes model used the following weighted average assumptions for the above awards:

	For the Fiscal Year Ended
	July 3, 2022		June 27, 2021			June 28, 2020
Expected term (years)		—		5.5			5.5
Risk-free interest rate		—		0.4	%		0.7	%
Volatility		—		49.0	%		43.2	%
Dividend yield		—		—			—

UNIFI uses historical data to estimate the expected term and volatility.  The risk-free interest rate is based on the U.S. Treasury yield curve in effect at the time of the grant for periods corresponding with the expected term of the stock options.

A summary of stock option activity for fiscal 2022 is as follows:

	Stock Options			Weighted Average Exercise Price		Weighted Average Remaining Contractual Life (Years)		Aggregate Intrinsic Value
Outstanding at June 27, 2021		1,114		$	16.82
Granted		—		$	—
Exercised		(10	)	$	11.09
Cancelled or forfeited		(122	)	$	25.45
Expired		—		$	—
Outstanding at July 3, 2022		982		$	15.81		7.2	$	1,296
Vested and expected to vest as of July 3, 2022		982		$	15.81		7.2	$	1,296
Exercisable at July 3, 2022		380		$	20.15		6.1	$	285

At July 3, 2022, the remaining unrecognized compensation cost related to the unvested stock options was $904, which is expected to be recognized over a weighted average period of 1.7 years.

For fiscal 2022, 2021, and 2020, the total intrinsic value of stock options exercised was $60, $85, and $147, respectively.  The amount of cash received from the exercise of stock options was $28, $0 and $29 for fiscal 2022, 2021, and 2020, respectively.  The tax benefit realized from stock options exercised was $8, $11, and $20 for fiscal 2022, 2021, and 2020, respectively.

Stock Units and Share Units

During fiscal 2022, 2021, and 2020, UNIFI granted 80, 73, and 127 restricted stock units (“RSUs”), respectively, to certain key employees.  The employee RSUs are subject to a vesting restriction and convey no rights of ownership in shares of Company common stock until such employee RSUs have vested and been distributed to the grantee in the form of Company common stock.  The employee RSUs vest over a three-year period and will be converted into an equivalent number of shares of Company common stock (for distribution to the grantee) on each vesting date, unless the grantee has elected to defer the receipt of the shares of stock until separation from service.  UNIFI estimated the weighted average fair value of each employee RSU granted during fiscal 2022, 2021, and 2020 to be $23.45, $15.65, and $19.74 respectively.

During fiscal 2022, 2021, and 2020, UNIFI granted 32 vested share units (“VSUs”), 37 RSUs, and 24 VSUs (collectively, the “units”), respectively, to UNIFI’s non-employee directors.  The units became fully vested on the grant date but convey no rights of ownership in shares of Company common stock until such units have been distributed to the grantee in the form of Company common stock.  If a grantee defers his or her distribution, the units are converted into an equivalent number of shares of Company common stock and distributed to the grantee following the grantee’s termination of service as a member of the Board.  UNIFI estimated the fair value of each unit granted during fiscal 2022, 2021, and 2020 to be $22.03 $15.91, and $27.15, respectively. 

During fiscal 2022, UNIFI granted 53 performance share units (“PSUs”) to certain key employees. The employee PSUs are subject to a performance-based vesting restriction and convey no rights of ownership in shares of Company common stock until such employee PSUs have vested and been distributed to the grantee in the form of Company common stock. Consistent with the vesting provisions of each PSU, between 50% and 200% of the PSUs become vested, if at all, on the date that the associated performance metric is achieved, and will be converted into shares of stock (for distribution to the grantee) on each vesting date, unless the grantee has elected to defer the receipt of the shares of stock until separation from service. The percentage of PSUs that vest is based on the metric achieved on the vesting date compared to the targeted metric defined in the award agreement. UNIFI estimated the weighted average fair value of each unit granted during fiscal 2022 to be $23.27. As of July 3, 2022, the 53 PSUs granted in fiscal 2022 are not expected to vest.

UNIFI estimates the fair value of RSUs, VSUs and PSUs based on the market price of UNIFI’s common stock at the award grant date.

A summary of RSU, VSU and PSU activity for fiscal 2022 is as follows:

	Non-vested			Weighted Average Grant Date Fair Value		Vested			Total			Weighted Average Grant Date Fair Value
Outstanding at June 27, 2021		162		$	16.75		241			403		$	20.82
Granted		166		$	23.12		—			166		$	23.12
Vested		(92	)	$	18.78		92			—		$	18.78
Converted		—		$	—		(88	)		(88	)	$	19.80
Cancelled or forfeited		(2	)	$	20.39		—			(2	)	$	20.39
Outstanding at July 3, 2022		234		$	20.38		245			479		$	21.80

At July 3, 2022, the number of RSUs, VSUs and PSUs vested and expected to vest was 426, with an aggregate intrinsic value of $5,972.  The aggregate intrinsic value of the 245 vested RSUs, VSUs, and PSUs at July 3, 2022 was $3,434.

The unrecognized compensation cost related to the unvested RSUs and PSUs at July 3, 2022 was $1,634, which is expected to be recognized over a weighted average period of 1.6 years.

For fiscal 2022, 2021, and 2020, the total intrinsic value of RSUs, VSUs, and PSUs converted was $1,715, $1,216, and $1,708, respectively.  The tax benefit realized from the conversion of RSUs was $260, $159, and $206 for fiscal 2022, 2021, and 2020, respectively.

Summary

The total cost charged against income related to all stock-based compensation arrangements was as follows:

	For the Fiscal Year Ended
	July 3, 2022		June 27, 2021		June 28, 2020
Stock options	$	928	$	1,047	$	1,265
RSUs and VSUs		2,253		2,015		2,245
Total compensation cost	$	3,181	$	3,062	$	3,510

In each of fiscal 2022, 2021, and fiscal 2020, UNIFI issued 5, 4, and 4 shares of common stock for $110, $75, and $100 of expense, respectively, in connection with Board compensation.

The total income tax benefit recognized for stock-based compensation was $386, $297, and $178 for fiscal 2022, 2021, and 2020, respectively.

As of July 3, 2022, total unrecognized compensation costs related to all unvested stock-based compensation arrangements were $2,538.  The weighted average period over which these costs are expected to be recognized is 1.6 years.

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Defined Contribution Plans

12 Months Ended

Jul. 03, 2022

Compensation And Retirement Disclosure [Abstract]

Defined Contribution Plans

17. Defined Contribution Plans

401(k) Plan

UNIFI matches employee contributions made to the Unifi, Inc. Retirement Savings Plan (the “401(k) Plan”), a 401(k) defined contribution plan, which covers eligible U.S. salary and hourly employees. Under the terms of the 401(k) Plan, UNIFI matches 100% of the first 3% of eligible employee contributions and 50% of the next 2% of eligible contributions.

The following table presents the employer matching contribution expense related to the 401(k) Plan:

	For the Fiscal Year Ended
	July 3, 2022		June 27, 2021		June 28, 2020
Matching contribution expense	$	3,215	$	2,578	$	2,491

Non-qualified Deferred Compensation Plan

The UNIFI, Inc. Deferred Compensation Plan (the “DCP”), established in fiscal 2022, is an unfunded non-qualified deferred compensation plan in which certain key employees are eligible to participate.  Under the DCP, participants may elect to defer all or a portion of their annual cash incentive compensation to their account. The deferred amounts are paid in accordance with each participant’s elections.  In addition to elective deferrals, the DCP assumed the obligations of the Unifi, Inc. Supplemental Key Employee Retirement Plan (the “SERP”), which includes amounts credited to eligible employees’ accounts based on a percentage of their annual base compensation.  Amounts due within the next operating cycle are reflected in Other current liabilities and the remaining DCP obligation is reflected in Other long-term liabilities.

The total DCP obligation as of July 3, 2022 and the predecessor SERP, as of June 27, 2021, was $2,359, and $3,177, respectively.

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

12 Months Ended

Jul. 03, 2022

Fair Value Disclosures [Abstract]

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

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

Financial Instruments

Grantor Trust

The fair value of the investment assets held by the grantor trust established in connection with the DCP (as previously described in the preceding Notes) were approximately $2,196 and $0 as of July 3, 2022 and June 27, 2021, respectively, and are classified as trading securities within Other non-current assets.  The grantor trust assets have readily-available market values and are classified as Level 1 trading securities in the fair value hierarchy. Trading gains and losses associated with these investments are recorded to Other operating expense, net. The associated DCP liability is recorded within Other long-term liabilities, and any increase or decrease in the liability is also recorded in Other operating expense, net.  During fiscal 2022, we recorded losses on investments held by the trust of $48.

Derivative Instruments

UNIFI uses derivative financial instruments such as interest rate swaps to reduce its ongoing business exposures to fluctuations in interest rates.  UNIFI does not enter into derivative contracts for speculative purposes.

Interest Rate Swaps

UNIFI’s primary debt obligations utilize variable-rate LIBOR, exposing the Company to variability in interest payments due to changes in interest rates. Management enters into LIBOR-based interest rate swap agreements to manage fluctuations in cash flows resulting from changes in the benchmark LIBOR. Under the terms of the interest rate swaps, UNIFI effectively received LIBOR-based variable interest rate payments and made fixed interest rate payments, thereby fixing the variable rate cash flows on the notional amount of debt obligations.

In 2017, UNIFI entered into Swaps A, B, and C. The combined designated hedges fixed LIBOR at approximately 1.9% for $75,000 of variable rate borrowings through May 24, 2022. In accordance with hedge accounting, each swap is reflected on the accompanying consolidated balance sheets at fair value with a corresponding balance in accumulated other comprehensive loss, and impacts earnings commensurate with the forecasted transaction.  The swaps terminated in May 2022 and the related impacts were insignificant.

The below table presents the fair value attributes for the historical swaps as of June 27, 2021.

As of June 27, 2021	Notional Amount			Balance Sheet Location	Fair Value Hierarchy	Fair Value
Swap A	USD	$	20,000	Other current liabilities	Level 2	$	334
Swap B	USD	$	30,000	Other current liabilities	Level 2	$	500
Swap C	USD	$	25,000	Other current liabilities	Level 2	$	400

Estimates for the fair value of UNIFI’s derivative contracts are obtained from month-end market quotes for contracts with similar terms.

Swaps A, B, and C, designated hedges, increased interest expense for fiscal 2022, 2021 and 2020 by $1,190, $1,347 and $270.

By entering into derivative contracts, UNIFI exposes itself to counterparty credit risk.  UNIFI attempts to minimize this risk by selecting counterparties with investment grade credit ratings and regularly monitoring those ratings.  UNIFI’s derivative instruments do not contain any credit-risk-related contingent features.

Non-Financial Assets and Liabilities

UNIFI did not have any non-financial assets or liabilities that were required to be measured at fair value on a recurring or non-recurring basis.

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Accumulated Other Comprehensive Loss

12 Months Ended

Jul. 03, 2022

Accumulated Other Comprehensive Income Loss Net Of Tax [Abstract]

Accumulated Other Comprehensive Loss

19. 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 30, 2019	$	(42,729	)	$	(500	)	$	(43,229	)
Other comprehensive loss, net of tax		(19,119	)		(1,458	)		(20,577	)
Balance at June 28, 2020	$	(61,848	)	$	(1,958	)	$	(63,806	)
Other comprehensive income, net of tax		9,368			1,006			10,374
Balance at June 27, 2021	$	(52,480	)	$	(952	)	$	(53,432	)
Other comprehensive (loss) income, net of tax		(7,125	)		952			(6,173	)
Balance at July 3, 2022	$	(59,605	)	$	—		$	(59,605	)

A summary of other comprehensive (loss) income for fiscal 2022, 2021, and 2020 is provided as follows:

	Fiscal 2022									Fiscal 2021							Fiscal 2020
	Pre-tax			Tax			After-tax			Pre-tax		Tax			After-tax		Pre-tax			Tax		After-tax
Other comprehensive (loss) income:
Foreign currency translation   adjustments	$	(7,125	)	$	—		$	(7,125	)	$	9,368	$	—		$	9,368	$	(21,027	)	$	—	$	(21,027	)
Foreign currency translation   adjustments for an unconsolidated   affiliate		—			—			—			—		—			—		1,908			—		1,908
Changes in interest rate swaps, net of    reclassification adjustments		1,234			(282	)		952			1,316		(310	)		1,006		(1,904	)		446		(1,458	)
Other comprehensive (loss) income, net	$	(5,891	)	$	(282	)	$	(6,173	)	$	10,684	$	(310	)	$	10,374	$	(21,023	)	$	446	$	(20,577	)

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Computation of Earnings Per Share

12 Months Ended

Jul. 03, 2022

Earnings Per Share [Abstract]

Computation of Earnings Per Share

20. Computation of Earnings Per Share

The computation of basic and diluted earnings per share (“EPS”) is as follows:

	For the Fiscal Year Ended
	July 3, 2022		June 27, 2021		June 28, 2020
Basic EPS
Net income (loss)	$	15,171	$	29,073	$	(57,237	)
Weighted average common shares outstanding		18,429		18,472		18,475
Basic EPS	$	0.82	$	1.57	$	(3.10	)
Diluted EPS
Net income (loss)	$	15,171	$	29,073	$	(57,237	)
Weighted average common shares outstanding		18,429		18,472		18,475
Net potential common share equivalents		439		384		—
Adjusted weighted average common shares outstanding		18,868		18,856		18,475
Diluted EPS	$	0.80	$	1.54	$	(3.10	)
Excluded from the calculation of common share equivalents:
Anti-dilutive common share equivalents		225		497		401
Excluded from the calculation of diluted shares:
Unvested stock options that vest upon achievement of certain    market conditions		333		333		333

The calculation of earnings per common share is based on the weighted average number of UNIFI’s common shares outstanding for the applicable period.  The calculation of diluted earnings per common share presents the effect of all potential dilutive common shares that were outstanding during the respective period, unless the effect of doing so is anti-dilutive.

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Other Operating (Income) Expense, Net

12 Months Ended

Jul. 03, 2022

Other Income And Expenses [Abstract]

Other Operating (Income) Expense, Net

21. Other Operating (Income) Expense, Net

Other operating (income) expense, net primarily consists of (i) gains on foreign currency transactions for fiscal 2022 and losses on foreign currency transactions for fiscal 2021, (ii) severance expenses related to former employees in fiscal 2020 and 2021, and (iii) losses from the sale or disposal of assets in fiscal 2021.

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Commitments and Contingencies

12 Months Ended

Jul. 03, 2022

Commitments And Contingencies Disclosure [Abstract]

Commitments and Contingencies

22. 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 (“Kinston”) 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. At this time, UNIFI does not expect any active site remediation will be required but expects that any costs associated with active site remediation, if ever required, would likely be immaterial.

Unconditional Obligations

UNIFI is a party to unconditional obligations for certain utility and other purchase or service commitments.  These commitments are non-cancelable, have remaining terms in excess of one year and qualify as normal purchases. 

On a fiscal year basis, the minimum payments expected to be made as part of such commitments are as follows:

	Fiscal 2023		Fiscal 2024		Fiscal 2025		Fiscal 2026		Fiscal 2027		Thereafter
Unconditional purchase obligations	$	6,359	$	5,238	$	5,067	$	2,445	$	2,445	$	—
Unconditional service obligations		1,911		278		269		269		307		194
Total unconditional obligations	$	8,270	$	5,516	$	5,336	$	2,714	$	2,752	$	194

For fiscal 2022, 2021 and 2020, total costs incurred under these commitments consisted of the following:

	For the Fiscal Year Ended
	July 3, 2022		June 27, 2021		June 28, 2020
Costs for unconditional purchase obligations	$	24,236	$	22,689	$	21,483
Costs for unconditional service obligations		912		967		2,082
Total	$	25,148	$	23,656	$	23,565

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Related Party Transactions

12 Months Ended

Jul. 03, 2022

Related Party Transactions [Abstract]

Related Party Transactions

23. Related Party Transactions

There were no related party receivables as of July 3, 2022 and June 27, 2021.

Mr. Kenneth G. Langone, a member of the Board, is a director, shareholder and non-executive Chairman of the Board of Salem Holding Company.  UNIFI leases tractors and trailers from Salem Leasing Corporation, a wholly owned subsidiary of Salem Holding Company.  In addition to the monthly lease payments, UNIFI also incurs expenses for routine repair and maintenance, fuel, and other expenses.  These leases do not contain renewal options, purchase options or escalation clauses with respect to the minimum lease charges.

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

	July 3, 2022		June 27, 2021
Accounts payable	$	432	$	469
Operating lease obligations		811		1,133
Finance lease obligations		4,933		6,149
Total related party payables	$	6,176	$	7,751

The following are the Company’s significant related party transactions for the current and prior two fiscal years and consist of the matters in the table below:

		For the Fiscal Year Ended
Affiliated Entity	Transaction Type	July 3, 2022		June 27, 2021		June 28, 2020
Salem Leasing Corporation	Payments for transportation    equipment costs and finance    lease debt service	$	4,343	$	4,122	$	3,798

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Business Segment Information

12 Months Ended

Jul. 03, 2022

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.

In the fourth quarter of fiscal 2022, UNIFI realigned its operating and reportable segments to correspond with changes to its operating model, management structure, and organizational responsibilities, reflecting the manner in which business performance is evaluated, resources are allocated, and financial statement users can best understand the results of operations. Accordingly, UNIFI is now reporting the Americas Segment, Brazil Segment, and Asia Segment. The Americas Segment represents the combination of the previously reported Polyester Segment, Nylon Segment, and All Other category. There are no changes to the composition of the historical Brazil Segment and Asia Segment. Comparative prior period disclosures have been updated to conform to the new presentation.

UNIFI has three reportable segments.

• The operations within the Americas Segment exhibit similar long-term economic characteristics and primarily sell into an economic trading zone covered by the USMCA and CAFTA-DR to similar customers utilizing similar methods of distribution. These operations derive revenues primarily from manufacturing synthetic and recycled textile products with sales primarily to yarn manufacturers, knitters and weavers that produce yarn and/or fabric for the apparel, hosiery, automotive, home furnishings, industrial, medical, and other end-use markets principally in North and Central America. The Americas Segment consists of sales and manufacturing operations in the U.S., El Salvador, and Colombia.

• 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 Brazil.  The Brazil Segment includes a manufacturing location and sales offices in Brazil.

• 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. The Asia Segment primarily sources synthetic and recycled textile products from third-party suppliers and sells to other yarn manufacturers, knitters, and weavers that produce fabric for the apparel, automotive, home furnishings, industrial, and other end-use markets principally in Asia.  The Asia Segment includes sales offices in China, Turkey, and Hong Kong.

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 Americas 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 July 3, 2022
	Americas		Brazil		Asia		Total
Net sales	$	483,085	$	126,066	$	206,607	$	815,758
Cost of sales		458,617		98,925		177,731		735,273
Gross profit		24,468		27,141		28,876		80,485
Segment depreciation expense		21,153		1,500		—		22,653
Segment Profit	$	45,621	$	28,641	$	28,876	$	103,138

	For the Fiscal Year Ended June 27, 2021
	Americas		Brazil		Asia		Total
Net sales	$	386,779	$	95,976	$	184,837	$	667,592
Cost of sales		350,373		64,281		159,444		574,098
Gross profit		36,406		31,695		25,393		93,494
Segment depreciation expense		21,054		1,315		—		22,369
Segment Profit	$	57,460	$	33,010	$	25,393	$	115,863

	For the Fiscal Year Ended June 28, 2020
	Americas		Brazil		Asia		Total
Net sales	$	380,138	$	73,339	$	153,032	$	606,509
Cost of sales		368,976		62,144		136,349		567,469
Gross profit		11,162		11,195		16,683		39,040
Segment depreciation expense		19,274		1,385		—		20,659
Segment Profit	$	30,436	$	12,580	$	16,683	$	59,699

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

	For the Fiscal Year Ended
	July 3, 2022			June 27, 2021			June 28, 2020
Americas	$	24,468		$	36,406		$	11,162
Brazil		27,141			31,695			11,195
Asia		28,876			25,393			16,683
Segment gross profit		80,485			93,494			39,040
SG&A expenses		52,489			51,334			43,814
(Benefit) provision for bad debts		(445	)		(1,316	)		1,739
Other operating (income) expense, net		(158	)		4,865			2,308
Operating income (loss)		28,599			38,611			(8,821	)
Interest income		(1,524	)		(603	)		(722	)
Interest expense		3,085			3,323			4,779
Equity in (earnings) loss of unconsolidated affiliates		(605	)		(739	)		477
Recovery of non-income taxes, net		815			(9,717	)		—
Gain on sale of investment in unconsolidated affiliate		—			—			(2,284	)
Impairment of investment in unconsolidated affiliate		—			—			45,194
Income (loss) before income taxes	$	26,828		$	46,347		$	(56,265	)

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

	For the Fiscal Year Ended
	July 3, 2022		June 27, 2021		June 28, 2020
Americas	$	21,153	$	21,054	$	19,274
Brazil		1,500		1,315		1,385
Asia		—		—		—
Segment depreciation expense		22,653		22,369		20,659
Other depreciation and amortization expense		3,554		3,159		2,994
Depreciation and amortization expense	$	26,207	$	25,528	$	23,653

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

	For the Fiscal Year Ended
	July 3, 2022		June 27, 2021		June 28, 2020
Americas	$	29,841	$	16,053	$	15,087
Brazil		9,253		3,461		2,332
Asia		236		666		60
Segment capital expenditures		39,330		20,180		17,479
Other capital expenditures		301		998		1,030
Capital expenditures	$	39,631	$	21,178	$	18,509

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

	July 3, 2022		June 27, 2021
Americas	$	379,898	$	327,445
Brazil		98,731		85,950
Asia		81,322		68,034
Segment total assets		559,951		481,429
Other current assets		5,145		48,587
Other PP&E		17,809		21,175
Other operating lease assets		756		1,116
Other non-current assets		2,985		902
Investments in unconsolidated affiliates		2,072		2,159
Total assets	$	588,718	$	555,368

Geographic Data

	For the Fiscal Year Ended
Net Sales	July 3, 2022		June 27, 2021		June 28, 2020
U.S.	$	430,381	$	341,897	$	342,350
China		185,558		171,261		148,923
Brazil		126,066		95,976		73,339
Remaining Foreign Countries		73,753		58,458		41,897
Total	$	815,758	$	667,592	$	606,509
Export sales from UNIFI’s U.S. operations to external customers	$	74,589	$	59,055	$	64,305

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

Long-Lived Assets	July 3, 2022		June 27, 2021		June 28, 2020
U.S.	$	196,885	$	191,733	$	195,874
Brazil		21,927		21,733		10,805
China		2,211		1,919		779
Remaining Foreign Countries		12,932		9,708		9,859
Total	$	233,955	$	225,093	$	217,317

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

We have revised amounts reported in previously issued financial statements as of June 27, 2021 presented in this Annual Report on Form 10-K to correct an immaterial error. The error relates to the transposition of the disclosure of reportable segment assets for the Asia segment and the previously-reported Nylon segment. We evaluated the effect of the error to our previously issued financial statements in accordance with SEC Staff Accounting Bulletins No. 99 and No. 108 and, based upon quantitative and qualitative factors, determined that the error was not material to the previously issued financial statements and disclosure included in our Annual Reports on Form 10-K for the year ended June 27, 2021, or for comparative period amount (i.e. the amounts as of June 27, 2021) reflected in our quarterly report for the quarterly period ended September 30, 2021.

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Quarterly Results (Unaudited)

12 Months Ended

Jul. 03, 2022

Quarterly Financial Data [Abstract]

Quarterly Results (Unaudited)

25. Quarterly Results (Unaudited)

Quarterly financial data and selected highlights are as follows:

	For the Fiscal Quarter Ended
	September 26, 2021		December 26, 2021		March 27, 2022		July 3,  2022
Net sales (1)	$	195,992	$	201,410	$	200,780	$	217,576
Gross profit (2)		26,097		16,890		19,144		18,354
Net income (3)		8,680		929		2,066		3,496
Net income per common share:
Basic (4)	$	0.47	$	0.05	$	0.11	$	0.19
Diluted (4)	$	0.46	$	0.05	$	0.11	$	0.19

	For the Fiscal Quarter Ended
	September 27, 2020		December 27, 2020		March 28, 2021		June 27,  2021
Net sales (5)	$	141,505	$	162,776	$	178,866	$	184,445
Gross profit (6)		14,561		25,934		25,595		27,404
Net income (7)		3,432		7,464		4,758		13,419
Net income per common share:
Basic (4)	$	0.19	$	0.40	$	0.26	$	0.73
Diluted (4)	$	0.18	$	0.40	$	0.25	$	0.70

(1) The fiscal quarter ending July 3, 2022 included an additional week of sales of approximately $8,700.

(2) Gross profit for our domestic operations for all fiscal quarters of fiscal 2022 includes adverse pressures from (i) higher raw material costs, (ii) rising input costs, and (iii) the weakening of labor productivity.

(3) Net income for our domestic operations for all fiscal quarters of fiscal 2022 includes the adverse pressures on gross profit.

(4) Income per share is computed independently for each of the periods presented.  The sum of the income per share amounts for the fiscal quarters may not equal the total for the fiscal year.

(5) Net sales for the fiscal quarters ended September 27, 2020 and December 27, 2020 includes adverse demand pressures from the COVID-19 pandemic.

(6) Gross profit for the fiscal quarter ended September 27, 2020 includes adverse demand pressures from the COVID-19 pandemic.  Gross profit for the fiscal quarters ended December 27, 2020, March 28, 2021, and June 27, 2021 includes the benefit of exceptional performance by the Brazil Segment primarily due to higher conversion margin and market share capture due to agility and responsiveness during demand recovery in Brazil.

(7) Net income for the fiscal quarter ended September 27, 2020 includes adverse demand pressures from the COVID-19 pandemic. Net income for the fiscal quarter ended June 27, 2021 includes a recovery of non-income taxes in Brazil due to the favorable conclusion of litigation related to excess social program taxes for multiple prior years.

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Supplemental Cash Flow Information

12 Months Ended

Jul. 03, 2022

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

Supplemental Cash Flow Information

26. Supplemental Cash Flow Information

Cash payments for interest and taxes consist of the following:

	For the Fiscal Year Ended
	July 3, 2022		June 27, 2021		June 28, 2020
Interest, net of capitalized interest of $396, $229 and $126, respectively	$	2,921	$	3,158	$	4,682
Income taxes, net of refunds		13,045		8,239		6,131

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. Fiscal 2022 includes an income tax payment of $3,749 related to the recovery of non-income taxes described in Note 8, “Other Current Assets.”

Non-Cash Investing and Financing Activities

As of July 3, 2022, June 27, 2021, and June 28, 2020, $2,456, $2,080, and $630, respectively, were included in accounts payable for unpaid capital expenditures.

During fiscal years ended July 3, 2022, June 27, 2021, and June 28, 2020, UNIFI recorded non-cash activity relating to finance leases of $2,493, $740, and $6,301, respectively.

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Significant Accounting Policies (Policies)

12 Months Ended

Jul. 03, 2022

Accounting Policies [Abstract]

Fiscal Year

Fiscal Year

The fiscal year for Unifi, Inc., its domestic subsidiaries and its subsidiary in El Salvador ends on the Sunday in June or July nearest to June 30 of each year. Unifi, Inc.’s fiscal 2022, 2021, and 2020 ended on July 3, 2022, June 27, 2021, and June 28, 2020, respectively.

Unifi, Inc.’s remaining material operating subsidiaries’ fiscal years end on June 30. There have been no significant transactions or events that occurred between Unifi, Inc.’s fiscal year end and such wholly owned subsidiaries’ fiscal year ends.

Unifi, Inc.’s fiscal 2022 consisted of 53 weeks, while fiscal 2021 and 2020 each consisted of 52 weeks.

Current Economic Environment

Current Economic Environment

UNIFI evaluated GAAP requirements for the consideration of forecasted financial information, including, but not limited to, the carrying value of long-lived assets in context with the information reasonably available to UNIFI and the unknown future impacts of the economic environment as of July 3, 2022 and through the date of this filing. As a result of these evaluations, there were no impairments or material changes to asset balances that impacted UNIFI's consolidated financial statements as of and for the period ended July 3, 2022.

Principles of Consolidation

Principles of Consolidation

The accompanying consolidated financial statements include the accounts of Unifi, Inc. and its subsidiaries in which it maintains a controlling financial interest.  All account balances and transactions between Unifi, Inc. and the subsidiaries which it controls have been eliminated.  For transactions with entities accounted for under the equity method, any intercompany profits on amounts still remaining are eliminated.  Amounts originating from any deferral of intercompany profits are recorded within the account balance to which the transaction specifically relates (e.g., inventory).  Only upon settlement of the intercompany transaction with a third party is the deferral of the intercompany profit recognized by UNIFI.

Use of Estimates

Use of Estimates

The preparation of financial statements in conformity with GAAP requires management to make use of estimates and assumptions that affect the reported amounts of assets and liabilities, certain financial statement disclosures at the date of the financial statements, and the reported amounts of revenues and expenses during the period.  UNIFI’s consolidated financial statements include amounts that are based on management’s best estimates and judgments.  Actual results may vary from these estimates.

Cash and Cash Equivalents

Cash and Cash Equivalents

Cash equivalents are defined as highly liquid, short-term investments having an original maturity of three months or less. Book overdrafts, for which the bank has not advanced cash, if any, are reclassified to accounts payable and reflected as an offset thereto within the accompanying consolidated statements of cash flows.

Receivables

Receivables

Receivables are stated net of expected lifetime credit losses.  Allowances are provided for known and potential losses arising from quality claims and for amounts owed by customers.  Reserves for quality claims have not been material and are based on historical claim experience and known pending claims and are recorded as a reduction of net sales.  The allowance for uncollectible accounts is recorded against operating income and reflects UNIFI’s best estimate of probable losses inherent in its accounts receivable portfolio determined on the basis of historical write off experience, aging of trade receivables, specific allowances for known troubled accounts, and other currently available information.  Customer accounts are written off against the allowance for uncollectible accounts when they are no longer deemed to be collectible.

Inventories

Inventories

UNIFI’s inventories are valued at the lower of cost or net realizable value, with the cost for the majority of its inventory determined using the first-in, first-out method.  Certain foreign inventories and limited categories of supplies are valued using the average cost method.  UNIFI’s estimates for net realizable value related to obsolete, slow-moving, or excess inventories are based upon many factors, including historical recovery rates, inventory age, the expected net realizable value of specific products, and current economic conditions.

Debt Issuance Costs

Debt Issuance Costs

Debt issuance costs for revolving credit arrangements are immaterial.  All other debt issuance costs are recorded against long-term debt and amortized as additional interest expense using the effective interest method.  In the event of any prepayment of its debt obligations, UNIFI accelerates the recognition of a pro-rata amount of issuance costs.  

Property, Plant and Equipment

Property, Plant and Equipment

Property, plant, and equipment (“PP&E”) are stated at historical cost less accumulated depreciation.  Plant and equipment under finance leases are stated at the present value of minimum lease payments less accumulated amortization. Additions or improvements that substantially extend the useful life of a particular asset are capitalized.  Depreciation is calculated primarily utilizing the straight-line method over the following useful lives:

Asset categories	Useful lives in years
Land improvements	5 to 20
Buildings and improvements	10 to 40
Machinery and equipment	2 to 25
Computer, software and office equipment	3 to 7
Internal software development costs	3
Transportation equipment	3 to 15

Leasehold improvements are depreciated over the lesser of their estimated useful lives or the remaining term of the lease.

Assets under finance leases are amortized in a manner consistent with UNIFI’s normal depreciation policy if ownership is transferred by the end of the lease or if there is a bargain purchase option. If such ownership criteria are not met, amortization occurs over the shorter of the lease term or the asset’s useful life.

UNIFI capitalizes its costs of developing internal software when the software is used as an integral part of its manufacturing or business processes and the technological feasibility has been established.  Internal software costs are amortized over a period of three years and, in accordance with the nature of the project, charged to cost of sales or selling, general, and administrative expenses (“SG&A”).

Fully depreciated assets are retained in cost and accumulated depreciation accounts until they are disposed.  In the case of disposals, asset costs and related accumulated depreciation amounts are removed from the accounts, and the net amounts, less proceeds from disposal, are included in the determination of net income (loss) and presented within other operating (income) expense, net.

Repair and maintenance costs related to PP&E, which do not significantly increase the useful life of an existing asset or do not significantly alter, modify or change the capabilities or production capacity of an existing asset, are expensed as incurred.

Interest is capitalized for capital projects requiring a construction period.

PP&E and other long-lived assets are tested for impairment whenever events or changes in circumstances indicate that the carrying amount of the asset group may not be recoverable.  Long-lived assets to be disposed of by sale within one year are classified as held for sale and are reported at the lower of their carrying amount or fair value less cost to sell.  Depreciation ceases for all assets classified as held for sale.  Long-lived assets to be disposed of other than by sale are classified as held for use until they are disposed of and these assets are reported at the lower of their carrying amount or estimated fair value.

Intangible Assets

Intangible Assets

Finite-lived intangible assets, such as customer lists, non-compete agreements, and trademarks are amortized over their estimated useful lives.  UNIFI periodically evaluates the reasonableness of the useful lives of these assets.  Once these assets are fully amortized, they are removed from the accounts.  These assets (asset groups) are reviewed for impairment or obsolescence whenever events or changes in circumstances indicate that the carrying amount may not be recoverable.  If impaired, intangible assets are written down to fair value based on discounted cash flows or other valuation techniques.  UNIFI has no intangible assets with indefinite lives.

Investments in Unconsolidated Affiliates

Investments in Unconsolidated Affiliates

UNIFI evaluates its investments in unconsolidated affiliates for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable.  

During fiscal 2020, UNIFI owned a 34% interest in PAL (the “PAL Investment”) and Parkdale, Incorporated (“Parkdale”) owned the majority 66% interest. During March 2020, UNIFI commenced negotiations to sell the PAL Investment to Parkdale. Such negotiations indicated that the fair value of the PAL Investment was less than UNIFI’s carrying value and UNIFI no longer intended to hold the PAL Investment to allow recovery of the carrying value. UNIFI recorded an other-than-temporary impairment of $45,194 to adjust the PAL Investment to fair value. In April 2020, UNIFI and Parkdale finalized negotiations to sell UNIFI’s PAL Investment to Parkdale for $60,000. The transaction closed on April 29, 2020, and UNIFI received $60,000 in cash.

Derivative Instruments

Derivative Instruments

All derivatives are carried on the balance sheet at fair value and are classified according to their asset or liability position and the expected timing of settlement.  For cash flow hedges, the effective portion of gains and losses are recorded in accumulated other comprehensive loss until the underlying transactions are recognized in income.  When the hedged item is realized, gains or losses are reclassified from accumulated other comprehensive loss to current period earnings on the same line item as the underlying transaction.

Derivatives that are not designated for hedge accounting are marked to market at the end of each period with the changes in fair value recognized in current period earnings.  Settlements of any cash flow derivative contracts are classified as cash flows from operating activities. There were no outstanding derivative instruments as of July 3, 2022.

Fair Value Measurements

Fair Value Measurements

The accounting guidance for fair value measurements and disclosures establishes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value.  Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants in the principal market, or, if none exists, the most advantageous market, for the specific asset or liability at the measurement date (the exit price).  Fair value is based on assumptions that market participants would use when pricing the asset or liability.  The hierarchy gives the highest priority to unadjusted quoted prices in active markets and the lowest priority to unobservable inputs.  UNIFI uses the following to measure fair value for its assets and liabilities.

• Level 1 – Observable inputs that reflect quoted prices for identical assets or liabilities in active markets.

• Level 2 – Inputs other than quoted prices included in Level 1 that are observable for the asset or liability either indirectly or directly.

• Level 3 – Unobservable inputs reflecting management’s own assumptions about the inputs used in pricing the asset or liability.

The classification of assets and liabilities within the valuation hierarchy is based upon the lowest level of input that is significant to the fair value measurement in its entirety.

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.

There were no transfers into or out of the levels of the fair value hierarchy for any years presented.

Income Taxes

Income Taxes

Income taxes are accounted for under the asset and liability method. Deferred tax assets and liabilities are recorded to recognize the expected future tax benefits or costs of events that have been, or will be, reported in different tax years for financial statement purposes than for tax purposes.  Deferred tax assets and liabilities are determined based on the difference between the financial statement and tax bases of assets and liabilities using enacted tax rates in effect for the year in which these items are expected to reverse.  UNIFI reviews deferred tax assets to determine if it is more-likely-than-not they will be realized.  If UNIFI determines it is not more-likely-than-not that a deferred tax asset will be realized, it records a valuation allowance to reverse the previously recognized benefit.  Provision is made for taxes on undistributed earnings of foreign subsidiaries and related companies to the extent that such earnings are not deemed to be permanently invested.

UNIFI recognizes tax benefits related to uncertain tax positions if it believes it is more-likely-than-not of being sustained.  Recognized income tax positions are measured at the largest amount that is greater than 50% likely of being realized.  UNIFI accrues for other tax contingencies when it is probable that a liability to a taxing authority has been incurred and the amount of the contingency can be reasonably estimated.  Penalties and interest related to income tax expense, if incurred, are included in provision for income taxes.

Stock-Based Compensation

Stock-Based Compensation

Compensation expense for stock awards is based on the grant date fair value and expensed over the applicable vesting period.  UNIFI has a policy of issuing new shares to satisfy award exercises and conversions.  For awards with a service condition and a graded vesting schedule, UNIFI has elected an accounting policy of recognizing compensation cost on a straight-line basis over the requisite service period for each separate vesting portion of the award as if the award was, in-substance, multiple awards.

Foreign Currency Translation

Foreign Currency Translation

Assets and liabilities of foreign subsidiaries whose functional currency is other than the U.S. Dollar (“USD”) are translated at exchange rates existing at the respective balance sheet dates.  Translation gains and losses are not included in determining net income (loss) but are presented in a separate component of accumulated other comprehensive loss.  UNIFI translates the results of its foreign operations at the average exchange rates during the respective periods. Transaction gains and losses are included within other operating (income) expense, net.

Revenue Recognition

Revenue Recognition

Revenue is recognized when performance obligations under the terms of a contract with a customer are satisfied, which primarily occurs at a point in time, upon either shipment or delivery to the customer. Revenue is recognized over time for contracts in which the associated inventory produced has no alternative use and for which an enforceable right to payment exists or the associated services have been rendered. Revenue is measured as the amount of consideration UNIFI expects to receive in exchange for completing its performance obligations (i.e., transferring goods or providing services), which includes estimates for variable consideration. Variable consideration includes volume-based incentives and product claims, which are offered within certain contracts between UNIFI and its customers and is not material.  Sales taxes and value added taxes assessed by governmental entities are excluded from the measurement of consideration expected to be received. Shipping and handling costs incurred after a customer has taken control of our goods are treated as a fulfillment cost and are not considered a separate performance obligation.

Cost of Sales

Cost of Sales

The major components of cost of sales are: (i) materials and supplies, (ii) labor and fringe benefits, (iii) utility and overhead costs associated with manufactured products, (iv) shipping, handling and warehousing costs, (v) depreciation expense, and (vi) all other costs related to production or service activities.

Shipping, Handling and Warehousing Costs

Shipping, Handling, and Warehousing Costs

Shipping, handling, and warehousing costs include costs to store goods prior to shipment, prepare goods for shipment and physically move goods to customers.

Research and Development Costs

Research and Development Costs

Research and development costs include employee costs, production costs related to customer samples, operating supplies, consulting fees and other miscellaneous costs.  The cost of research and development is charged to expense as incurred.  Research and development costs were as follows:

	For the Fiscal Year Ended
	July 3, 2022		June 27, 2021		June 28, 2020
Research and development costs	$	12,103	$	11,483	$	11,257

Selling, General and Administrative Expenses

Selling, General, and Administrative Expenses

The major components of SG&A expenses are: (i) costs of UNIFI’s sales organization, marketing and advertising efforts, and external commissions; (ii) costs of maintaining UNIFI’s general and administrative support functions including executive management, information technology, human resources, legal, and finance; (iii) amortization of intangible assets, and (iv) all other costs required to be classified as SG&A expenses.

Advertising Costs

Advertising Costs

Advertising costs are expensed as incurred and included in SG&A expenses.  UNIFI’s advertising costs include spending for items such as consumer marketing and branding initiatives, promotional items, trade shows, sponsorships, and other programs.  Advertising costs were as follows:

	For the Fiscal Year Ended
	July 3, 2022		June 27, 2021		June 28, 2020
Advertising costs	$	4,673	$	2,919	$	2,044

Self Insurance

Self-Insurance

UNIFI self-insures certain risks such as employee healthcare claims and maintains stop-loss coverage.  Reserves for incurred but not reported healthcare claims are estimated using historical data, the timeliness of claims processing, medical trends, inflation, and any changes, if applicable, in the nature or type of the plan.

Contingencies

Contingencies

At any point in time, UNIFI may be a party to various pending legal proceedings, claims or environmental actions.  Accruals for estimated losses are recorded at the time information becomes available indicating that losses are probable and estimable.  Any amounts accrued are not discounted.  Legal costs such as outside counsel fees and expenses are charged to expense as incurred.

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Summary of Significant Accounting Policies (Tables)

12 Months Ended

Jul. 03, 2022

Accounting Policies [Abstract]

Useful Lives of Property Plant and Equipment

Depreciation is calculated primarily utilizing the straight-line method over the following useful lives:

Asset categories	Useful lives in years
Land improvements	5 to 20
Buildings and improvements	10 to 40
Machinery and equipment	2 to 25
Computer, software and office equipment	3 to 7
Internal software development costs	3
Transportation equipment	3 to 15

Schedule of Research and Development Costs

Research and development costs were as follows

	For the Fiscal Year Ended
	July 3, 2022		June 27, 2021		June 28, 2020
Research and development costs	$	12,103	$	11,483	$	11,257

Schedule of Advertising Costs

Advertising costs were as follows

	For the Fiscal Year Ended
	July 3, 2022		June 27, 2021		June 28, 2020
Advertising costs	$	4,673	$	2,919	$	2,044

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Leases (Tables)

12 Months Ended

Jul. 03, 2022

Leases [Abstract]

Schedule of Balance Sheet Location and Values of Company's Lease Assets and Lease Liabilities

The following table sets forth the balance sheet location and values of the Company’s lease assets and lease liabilities:

Classification	Balance Sheet Location	July 3, 2022		June 27, 2021
Lease Assets
Operating lease assets	Operating lease assets	$	8,829	$	8,772
Finance lease assets	Property, plant & equipment, net		7,017		16,037
Total lease assets		$	15,846	$	24,809
Lease Liabilities
Current operating lease liabilities	Current operating lease liabilities	$	2,190	$	1,856
Current finance lease liabilities	Current portion of long-term debt		1,726		3,545
Total current lease liabilities		$	3,916	$	5,401
Non-current operating lease liabilities	Non-current operating lease liabilities	$	6,736	$	7,032
Non-current finance lease liabilities	Long-term debt		5,535		4,930
Total non-current lease liabilities		$	12,271	$	11,962
Total lease liabilities		$	16,187	$	17,363

Schedule of Components of Lease Cost

The following table sets forth the components of UNIFI’s total lease cost for fiscal 2022 and 2021:

	For The Fiscal Year		For The Fiscal Year
Lease Cost	July 3, 2022		June 27, 2021
Operating lease cost	$	2,766	$	2,465
Variable lease cost		502		503
Finance lease cost:
Amortization of lease assets		1,981		1,998
Interest on lease liabilities		258		365
Short-term lease cost		967		1,007
Total lease cost	$	6,474	$	6,338

Schedule of Supplemental Cash Flow Information and Non-Cash Activity Related to Operating Leases

The following table presents supplemental information related to leases:

	For The Fiscal Year		For The Fiscal Year
Other Information	July 3, 2022		June 27, 2021
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows used by operating leases	$	2,766	$	2,465
Financing cash flows used by finance leases	$	3,707	$	3,646
Non-cash activities:
Leased assets obtained in exchange for new operating lease liabilities	$	1,662	$	2,606
Leased assets obtained in exchange for new finance lease liabilities	$	2,493	$	740

Schedule of Weighted-Average Remaining Lease Term and Discount Rate for Operating Leases and Finance Leases

The following table sets forth UNIFI's weighted average remaining lease term in years and discount rate percentage used in the calculation of its outstanding lease liabilities:

Weighted Average Remaining Lease Term and Discount Rate	July 3, 2022			June 27, 2021
Weighted average remaining lease term (years):
Operating leases		4.1			5.9
Finance leases		4.2			3.8
Weighted average discount rate (percentage):
Operating leases		5.0	%		5.1	%
Finance leases		3.6	%		3.6	%

Schedule of Future Minimum Lease Payments for Finance Leases and Operating Leases

Future minimum finance lease payments and future minimum payments under non-cancelable operating leases with initial lease terms in excess of one year under Topic 842 as of July 3, 2022 by fiscal year were:

Maturity of Lease Liabilities	Finance Leases			Operating Leases
Fiscal 2023	$	2,032		$	2,595
Fiscal 2024		2,032			2,004
Fiscal 2025		1,880			1,498
Fiscal 2026		1,385			1,201
Fiscal 2027		821			971
Fiscal years thereafter		100			1,788
Total minimum lease payments	$	8,250		$	10,057
Less estimated executory costs		(413	)		—
Less imputed interest		(576	)		(1,131	)
Present value of net minimum lease payments		7,261			8,926
Less current portion of lease obligations		(1,726	)		(2,190	)
Long-term portion of lease obligations	$	5,535		$	6,736

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Revenue Recognition (Tables)

12 Months Ended

Jul. 03, 2022

Revenue From Contract With Customer [Abstract]

Disaggregated Revenues and Product Sales for UNIFI

The following tables present net sales disaggregated by (i) classification of customer type and (ii) REPREVE Fiber sales:

	For the Fiscal Year Ended
	July 3, 2022		June 27, 2021		June 28, 2020
Third-party manufacturer	$	808,655	$	656,763	$	598,510
Service		7,103		10,829		7,999
Net sales	$	815,758	$	667,592	$	606,509

	For the Fiscal Year Ended
	July 3, 2022		June 27, 2021		June 28, 2020
REPREVE® Fiber	$	293,080	$	245,832	$	186,141
All other products and services		522,678		421,760		420,368
Net sales	$	815,758	$	667,592	$	606,509

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Receivables, Net (Tables)

12 Months Ended

Jul. 03, 2022

Receivables [Abstract]

Schedule of Accounts, Notes, Loans and Financing Receivable

Receivables, net consists of the following:

	July 3, 2022			June 27, 2021
Customer receivables	$	99,963		$	81,921
Allowance for uncollectible accounts		(1,498	)		(2,525	)
Reserves for quality claims		(860	)		(703	)
Net customer receivables		97,605			78,693
Other receivables		8,960			16,144
Total receivables, net	$	106,565		$	94,837

Allowance for Credit Losses on Financing Receivables

The changes in UNIFI’s allowance for uncollectible accounts and reserves for quality claims were as follows:

	Allowance for Uncollectible Accounts			Reserves for Quality Claims
Balance at June 30, 2019	$	(2,338	)	$	(961	)
Charged to costs and expenses		(1,739	)		(1,251	)
Translation activity		186			10
Deductions		95			1,274
Balance at June 28, 2020	$	(3,796	)	$	(928	)
Credited (charged) to costs and expenses		1,316			(1,085	)
Translation activity		(89	)		(36	)
Deductions		44			1,346
Balance at June 27, 2021	$	(2,525	)	$	(703	)
Credited (charged) to costs and expenses		445			(1,065	)
Translation activity		40			12
Deductions		542			896
Balance at July 3, 2022	$	(1,498	)	$	(860	)

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Inventories (Tables)

12 Months Ended

Jul. 03, 2022

Inventory Disclosure [Abstract]

Inventories Components

Inventories consists of the following:

	July 3, 2022			June 27, 2021
Raw materials	$	69,994		$	54,895
Supplies		11,953			10,692
Work in process		10,358			7,516
Finished goods		84,477			70,525
Gross inventories		176,782			143,628
Net realizable value adjustment		(3,487	)		(2,407	)
Total inventories	$	173,295		$	141,221

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Other Current Assets (Tables)

12 Months Ended

Jul. 03, 2022

Other Assets Current [Abstract]

Schedule of Other Current Assets

Other current assets consists of the following:

	July 3, 2022		June 27, 2021
Vendor deposits	$	6,910	$	3,341
Recovery of non-income taxes, net		6,770		3,456
Prepaid expenses and other		3,004		2,753
Value-added taxes receivable		1,987		2,484
Contract assets		285		330
Total other current assets	$	18,956	$	12,364

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Property, Plant and Equipment, Net (Tables)

12 Months Ended

Jul. 03, 2022

Property Plant And Equipment [Abstract]

PP&E Net Components

PP&E, net consists of the following:

	July 3, 2022			June 27, 2021
Land	$	3,160		$	3,184
Land improvements		16,443			16,372
Buildings and improvements		164,252			160,122
Assets under finance leases		10,921			22,000
Machinery and equipment		635,699			609,414
Computers, software and office equipment		25,348			24,848
Transportation equipment		10,591			10,461
Construction in progress		20,397			17,834
Gross PP&E		886,811			864,235
Less: accumulated depreciation		(666,569	)		(656,576	)
Less: accumulated amortization – finance leases		(3,904	)		(5,963	)
Total PP&E, net	$	216,338		$	201,696

Schedule of Capital Leased Assets

Assets under finance leases consists of the following:

	July 3, 2022		June 27, 2021
Transportation equipment	$	8,276	$	8,276
Machinery and equipment		2,645		9,897
Building improvements		—		3,827
Gross assets under finance leases	$	10,921	$	22,000

Schedule of Depreciation Expense and Repair and Maintenance Expense

Depreciation and amortization expense and repair and maintenance expenses were as follows:

	For the Fiscal Year Ended
	July 3, 2022		June 27, 2021		June 28, 2020
Depreciation and amortization expense	$	24,509	$	24,215	$	22,551
Repair and maintenance expenses		20,076		18,118		18,093

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Other Non-Current Assets (Tables)

12 Months Ended

Jul. 03, 2022

Schedule of Other Non-Current Assets

Other non-current assets consists of the following:

	July 3, 2022		June 27, 2021
Intangible assets, net	$	2,500	$	3,978
Grantor trust		2,196		—
Investments in unconsolidated affiliates		2,072		2,159
Recovery of non-income taxes, net		—		8,063
Other		2,020		425
Total other non-current assets	$	8,788	$	14,625

Components of Intangible Assets, Net

Intangible assets, net consists of the following:

	July 3, 2022			June 27, 2021
Customer lists	$	5,220		$	5,220
Non-compete agreement		1,875			1,875
Trademarks		104			411
Total intangible assets, gross		7,199			7,506
Accumulated amortization – customer lists		(3,056	)		(2,049	)
Accumulated amortization – non-compete agreement		(1,563	)		(1,188	)
Accumulated amortization – trademarks		(80	)		(291	)
Total accumulated amortization		(4,699	)		(3,528	)
Total intangible assets, net	$	2,500		$	3,978

Amortization Expense for Intangible Assets

Amortization expense for intangible assets consists of the following:

	For the Fiscal Year Ended
	July 3, 2022		June 27, 2021		June 28, 2020
Customer lists	$	1,007	$	556	$	326
Non-compete agreement		375		375		375
Trademarks		96		147		154
Total amortization expense	$	1,478	$	1,078	$	855

Expected Intangible Asset Amortization

The following table presents the expected intangible asset amortization for the next five fiscal years:

	Fiscal 2023		Fiscal 2024		Fiscal 2025		Fiscal 2026		Fiscal 2027		Thereafter
Expected amortization	$	1,291	$	528	$	108	$	108	$	108	$	357

Schedule of Raw Material Purchases under Supply Agreement

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

	For the Fiscal Year Ended
	July 3, 2022		June 27, 2021		June 28, 2020
UNFA	$	29,637	$	18,932	$	14,583
UNF		1,175		548		1,450
Total	$	30,812	$	19,480	$	16,033

Schedule of Unaudited, Condensed Balance Sheet Information for Unconsolidated Affiliates

Condensed balance sheet and income statement information for UNFs (including reciprocal balances) is presented in the following tables. Fiscal 2020 PAL Investment income statement activity is reported for the ten months of fiscal 2020 ownership ending April 29, 2020.

	July 3, 2022		June 27, 2021
Current assets	$	10,705	$	7,931
Non-current assets		605		659
Current liabilities		8,056		3,967
Non-current liabilities		—		—
Shareholders’ equity and capital accounts		3,254		4,623
UNIFI’s portion of undistributed earnings		2,013		2,100

Income Statement Information [Member]

Schedule of Unaudited, Condensed Income Statement Information for Unconsolidated Affiliates

	July 3, 2022		June 27, 2021
Net sales	$	31,745	$	19,649
Gross profit		1,928		3,423
Income from operations		148		1,777
Net income		127		1,782
Depreciation and amortization		121		151
Distributions received		750		750

	For the Fiscal Year Ended June 28, 2020
	PAL			UNFs		Total
Net sales	$	544,006		$	17,068	$	561,074
Gross profit		7,592			2,056		9,648
(Loss) income from operations		(7,484	)		410		(7,074	)
Net (loss) income		(2,823	)		497		(2,326	)
Depreciation and amortization		33,455			135		33,590
Cash received by PAL under cotton rebate program		11,186			—		11,186
Earnings recognized by PAL for cotton rebate program		9,697			—		9,697
Distributions received		10,437			—		10,437

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Other Current Liabilities (Tables)

12 Months Ended

Jul. 03, 2022

Other Liabilities Current [Abstract]

Schedule of Other Current Liabilities

Other current liabilities consists of the following:

	July 3, 2022		June 27, 2021
Payroll and fringe benefits	$	9,414	$	10,204
Incentive compensation		3,916		12,356
Utilities		2,287		2,347
Deferred revenue		1,694		2,691
Interest rate swaps		—		1,234
Property taxes and other		2,495		2,806
Total other current liabilities	$	19,806	$	31,638

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Long-Term Debt (Tables)

12 Months Ended

Jul. 03, 2022

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	July 3, 2022	July 3, 2022			June 27, 2021
ABL Revolver	December 2023	3.2%	$	41,300		$	—
ABL Term Loan	December 2023	3.2%		65,000			77,500
Finance lease obligations	(1)	3.6%		7,261			8,475
Construction financing	(2)	1.9%		729			882
Total debt				114,290			86,857
Current ABL Term Loan				(10,000	)		(12,500	)
Current portion of finance lease obligations				(1,726	)		(3,545	)
Unamortized debt issuance costs				(255	)		(476	)
Total long-term debt			$	102,309		$	70,336

(1) Scheduled maturity dates for finance lease obligations range from March 2025 to November 2027.

(2) Refer to the discussion below under the subheading “Construction Financing” for further information.  

Scheduled Maturities of Outstanding Debt Obligations

The following table presents the scheduled maturities of UNIFI’s outstanding debt obligations for the following five fiscal years and thereafter.

	Fiscal 2023		Fiscal 2024		Fiscal 2025		Fiscal 2026		Fiscal 2027		Thereafter
ABL Revolver	$	—	$	41,300	$	—	$	—	$	—	$	—
ABL Term Loan		10,000		55,000		—		—		—		—
Finance lease obligations		1,726		1,787		1,699		1,255		732		62
Total (1)	$	11,726	$	98,087	$	1,699	$	1,255	$	732	$	62

(1) Total reported excludes $729 for construction financing, described above.

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Other Long-Term Liabilities (Tables)

12 Months Ended

Jul. 03, 2022

Other Liabilities Disclosure [Abstract]

Other Long-Term Liabilities Components

Other long-term liabilities consists of the following:

	July 3, 2022		June 27, 2021
Nonqualified deferred compensation plan obligation	$	1,982	$	2,090
Uncertain tax positions		1,575		3,045
Other		892		2,337
Total other long-term liabilities	$	4,449	$	7,472

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Income Taxes (Tables)

12 Months Ended

Jul. 03, 2022

Income Tax Disclosure [Abstract]

Components of Income (loss) before Income Taxes

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

	For the Fiscal Year Ended
	July 3, 2022			June 27, 2021			June 28, 2020
U.S.	$	(18,364	)	$	(12,463	)	$	(74,905	)
Foreign		45,192			58,810			18,640
Income (loss) before income taxes	$	26,828		$	46,347		$	(56,265	)

Schedule of Provision for Income Taxes

Provision for income taxes consists of the following:

	For the Fiscal Year Ended
	July 3, 2022			June 27, 2021			June 28, 2020
Current:
Federal	$	(1,163	)	$	(577	)	$	282
State		2			25			(118	)
Foreign		15,935			12,739			4,819
Total current tax expense		14,774			12,187			4,983
Deferred:
Federal		(630	)		(1,564	)		(3,783	)
State		33			131			116
Foreign		(2,520	)		6,520			(344	)
Total deferred tax expense		(3,117	)		5,087			(4,011	)
Provision for income taxes	$	11,657		$	17,274		$	972

Reconciliation from Federal Statutory Tax Rate to Effective Tax Rate

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

	For the Fiscal Year Ended
	July 3, 2022			June 27, 2021			June 28, 2020
Federal statutory tax rate		21.0	%		21.0	%		21.0	%
Change in valuation allowance		12.6			5.0			0.6
Foreign income taxed at different rates		10.7			9.0			(1.2	)
Tax expense on unremitted foreign earnings		5.5			7.0			(0.9	)
Repatriation of foreign earnings and withholding taxes		3.9			1.8			(2.0	)
Change in uncertain tax positions		2.4			0.5			(0.3	)
Nondeductible compensation		2.1			1.4			(0.8	)
U.S. tax on GILTI		0.2			3.9			(5.0	)
Nontaxable income		(10.2	)		(2.4	)		1.1
Research and other business credits		(4.0	)		(3.7	)		2.0
State income taxes, net of federal tax benefit		(1.3	)		(0.2	)		2.6
Foreign tax credits		(0.5	)		(5.4	)		0.9
Deemed repatriation of foreign earnings under Subpart F		—			1.5			—
Domestic production activities deduction		—			0.6			—
Rate benefit of U.S. federal NOL carryback		—			(2.8	)		—
Valuation allowance related to loss on sale of investment in PAL		—			—			(19.3	)
Nondeductible expenses and other		1.1			0.1			(0.4	)
Effective tax rate		43.5	%		37.3	%		(1.7	)%

Deferred Tax Assets and Liabilities

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

	July 3, 2022			June 27, 2021
Deferred tax assets:
Capital loss carryforwards	$	16,318		$	17,429
Tax credits		12,079			18,711
Research and development costs		7,409			6,934
NOL carryforwards		6,603			3,043
Accrued compensation		2,106			4,056
Other items		4,877			4,815
Total gross deferred tax assets		49,392			54,988
Valuation allowance		(31,667	)		(36,980	)
Net deferred tax assets		17,725			18,008
Deferred tax liabilities:
PP&E		(14,952	)		(16,045	)
Unremitted earnings		(5,253	)		(3,769	)
Recovery of non-income taxes		132			(3,664	)
Other		(138	)		(8	)
Total deferred tax liabilities		(20,211	)		(23,486	)
Net deferred tax liabilities	$	(2,486	)	$	(5,478	)

Schedule of Components of Deferred Tax Valuation Allowance

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

	For the Fiscal Year Ended
	July 3, 2022			June 27, 2021			June 28, 2020
Capital loss carryforwards	$	(16,318	)	$	(17,429	)	$	(13,791	)
Tax credits		(10,779	)		(17,215	)		(17,111	)
NOL carryforwards		(4,570	)		(2,336	)		(2,542	)
Investments, including unconsolidated affiliates		—			—			(3,995	)
Total deferred tax valuation allowance	$	(31,667	)	$	(36,980	)	$	(37,439	)

Reconciliation of Beginning and Ending Gross Amounts of Unrecognized Tax Benefits

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

	For the Fiscal Year Ended
	July 3, 2022			June 27, 2021			June 28, 2020
Balance at beginning of year	$	2,590		$	1,218		$	1,083
Gross increases (decreases) related to current period tax positions		408			(24	)		98
Gross (decreases) increases related to tax positions in prior periods		(89	)		1,396			37
Gross decreases related to settlements with tax authorities		—			—			—
Gross decreases related to lapse of applicable statute of limitations		—			—			—
Balance at end of year	$	2,909		$	2,590		$	1,218

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Shareholders' Equity (Tables)

12 Months Ended

Jul. 03, 2022

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		—	$	—	$	50,000
Fiscal 2020		84	$	23.72	$	48,008
Fiscal 2021		—	$	—	$	48,008
Fiscal 2022		617	$	14.84	$	38,859
Total		701	$	15.90	$	38,859

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Stock-Based Compensation (Tables)

12 Months Ended

Jul. 03, 2022

Summary of Number of Securities Remaining Available for Future Issuance

The following table provides information as of July 3, 2022 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	1
Less: Awards granted to employees	(209	)
Less: Awards granted to non-employee directors	(41	)
Available for issuance under the 2020 Plan	601

Stock Option Valuation Assumptions

The Black-Scholes model used the following weighted average assumptions for the above awards:

	For the Fiscal Year Ended
	July 3, 2022		June 27, 2021			June 28, 2020
Expected term (years)		—		5.5			5.5
Risk-free interest rate		—		0.4	%		0.7	%
Volatility		—		49.0	%		43.2	%
Dividend yield		—		—			—

Summary of Stock Option Activity

A summary of stock option activity for fiscal 2022 is as follows:

	Stock Options			Weighted Average Exercise Price		Weighted Average Remaining Contractual Life (Years)		Aggregate Intrinsic Value
Outstanding at June 27, 2021		1,114		$	16.82
Granted		—		$	—
Exercised		(10	)	$	11.09
Cancelled or forfeited		(122	)	$	25.45
Expired		—		$	—
Outstanding at July 3, 2022		982		$	15.81		7.2	$	1,296
Vested and expected to vest as of July 3, 2022		982		$	15.81		7.2	$	1,296
Exercisable at July 3, 2022		380		$	20.15		6.1	$	285

Summary of RSU, VSU and PSU Activity

A summary of RSU, VSU and PSU activity for fiscal 2022 is as follows:

	Non-vested			Weighted Average Grant Date Fair Value		Vested			Total			Weighted Average Grant Date Fair Value
Outstanding at June 27, 2021		162		$	16.75		241			403		$	20.82
Granted		166		$	23.12		—			166		$	23.12
Vested		(92	)	$	18.78		92			—		$	18.78
Converted		—		$	—		(88	)		(88	)	$	19.80
Cancelled or forfeited		(2	)	$	20.39		—			(2	)	$	20.39
Outstanding at July 3, 2022		234		$	20.38		245			479		$	21.80

Stock Based Compensation Total Cost Charged Against Income

The total cost charged against income related to all stock-based compensation arrangements was as follows:

	For the Fiscal Year Ended
	July 3, 2022		June 27, 2021		June 28, 2020
Stock options	$	928	$	1,047	$	1,265
RSUs and VSUs		2,253		2,015		2,245
Total compensation cost	$	3,181	$	3,062	$	3,510

Black Scholes Model

Stock Option Valuation Assumptions

A summary of UNIFI’s stock options granted to key employees and valued under the Black-Scholes model is as follows:

	For the Fiscal Year Ended
	July 3, 2022		June 27, 2021		June 28, 2020
Quantity		—		155		143
Service Period (years)		—		3.0		3.0
Weighted Average Exercise Price	$	—	$	15.64	$	19.95
Weighted Average Grant Date Fair Value	$	—	$	6.75	$	7.33

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Defined Contribution Plans (Tables)

12 Months Ended

Jul. 03, 2022

Compensation And Retirement Disclosure [Abstract]

Schedule of Employer Matching Contribution Expense Related to 401(k) Plan

The following table presents the employer matching contribution expense related to the 401(k) Plan:

	For the Fiscal Year Ended
	July 3, 2022		June 27, 2021		June 28, 2020
Matching contribution expense	$	3,215	$	2,578	$	2,491

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

12 Months Ended

Jul. 03, 2022

Fair Value Disclosures [Abstract]

Schedule of Fair Value Attributes for the Historical Swaps

The below table presents the fair value attributes for the historical swaps as of June 27, 2021.

As of June 27, 2021	Notional Amount			Balance Sheet Location	Fair Value Hierarchy	Fair Value
Swap A	USD	$	20,000	Other current liabilities	Level 2	$	334
Swap B	USD	$	30,000	Other current liabilities	Level 2	$	500
Swap C	USD	$	25,000	Other current liabilities	Level 2	$	400

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Accumulated Other Comprehensive Loss (Tables)

12 Months Ended

Jul. 03, 2022

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 30, 2019	$	(42,729	)	$	(500	)	$	(43,229	)
Other comprehensive loss, net of tax		(19,119	)		(1,458	)		(20,577	)
Balance at June 28, 2020	$	(61,848	)	$	(1,958	)	$	(63,806	)
Other comprehensive income, net of tax		9,368			1,006			10,374
Balance at June 27, 2021	$	(52,480	)	$	(952	)	$	(53,432	)
Other comprehensive (loss) income, net of tax		(7,125	)		952			(6,173	)
Balance at July 3, 2022	$	(59,605	)	$	—		$	(59,605	)

Summary of Other Comprehensive Income (Loss)

A summary of other comprehensive (loss) income for fiscal 2022, 2021, and 2020 is provided as follows:

	Fiscal 2022									Fiscal 2021							Fiscal 2020
	Pre-tax			Tax			After-tax			Pre-tax		Tax			After-tax		Pre-tax			Tax		After-tax
Other comprehensive (loss) income:
Foreign currency translation   adjustments	$	(7,125	)	$	—		$	(7,125	)	$	9,368	$	—		$	9,368	$	(21,027	)	$	—	$	(21,027	)
Foreign currency translation   adjustments for an unconsolidated   affiliate		—			—			—			—		—			—		1,908			—		1,908
Changes in interest rate swaps, net of    reclassification adjustments		1,234			(282	)		952			1,316		(310	)		1,006		(1,904	)		446		(1,458	)
Other comprehensive (loss) income, net	$	(5,891	)	$	(282	)	$	(6,173	)	$	10,684	$	(310	)	$	10,374	$	(21,023	)	$	446	$	(20,577	)

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Computation of Earnings Per Share (Tables)

12 Months Ended

Jul. 03, 2022

Earnings Per Share [Abstract]

Computation of Basic and Diluted Earnings (Loss) Per Share

The computation of basic and diluted earnings per share (“EPS”) is as follows:

	For the Fiscal Year Ended
	July 3, 2022		June 27, 2021		June 28, 2020
Basic EPS
Net income (loss)	$	15,171	$	29,073	$	(57,237	)
Weighted average common shares outstanding		18,429		18,472		18,475
Basic EPS	$	0.82	$	1.57	$	(3.10	)
Diluted EPS
Net income (loss)	$	15,171	$	29,073	$	(57,237	)
Weighted average common shares outstanding		18,429		18,472		18,475
Net potential common share equivalents		439		384		—
Adjusted weighted average common shares outstanding		18,868		18,856		18,475
Diluted EPS	$	0.80	$	1.54	$	(3.10	)
Excluded from the calculation of common share equivalents:
Anti-dilutive common share equivalents		225		497		401
Excluded from the calculation of diluted shares:
Unvested stock options that vest upon achievement of certain    market conditions		333		333		333

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Commitments and Contingencies (Tables)

12 Months Ended

Jul. 03, 2022

Commitments And Contingencies Disclosure [Abstract]

Schedule of Unconditional Purchase Obligations

On a fiscal year basis, the minimum payments expected to be made as part of such commitments are as follows:

	Fiscal 2023		Fiscal 2024		Fiscal 2025		Fiscal 2026		Fiscal 2027		Thereafter
Unconditional purchase obligations	$	6,359	$	5,238	$	5,067	$	2,445	$	2,445	$	—
Unconditional service obligations		1,911		278		269		269		307		194
Total unconditional obligations	$	8,270	$	5,516	$	5,336	$	2,714	$	2,752	$	194

Schedule of Costs Incurred Under Purchases and Services Obligations

For fiscal 2022, 2021 and 2020, total costs incurred under these commitments consisted of the following:

	For the Fiscal Year Ended
	July 3, 2022		June 27, 2021		June 28, 2020
Costs for unconditional purchase obligations	$	24,236	$	22,689	$	21,483
Costs for unconditional service obligations		912		967		2,082
Total	$	25,148	$	23,656	$	23,565

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Related Party Transactions (Tables)

12 Months Ended

Jul. 03, 2022

Related Party Transactions [Abstract]

Related Party Payables

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

	July 3, 2022		June 27, 2021
Accounts payable	$	432	$	469
Operating lease obligations		811		1,133
Finance lease obligations		4,933		6,149
Total related party payables	$	6,176	$	7,751

Schedule of Related Party Transactions

The following are the Company’s significant related party transactions for the current and prior two fiscal years and consist of the matters in the table below:

		For the Fiscal Year Ended
Affiliated Entity	Transaction Type	July 3, 2022		June 27, 2021		June 28, 2020
Salem Leasing Corporation	Payments for transportation    equipment costs and finance    lease debt service	$	4,343	$	4,122	$	3,798

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Business Segment Information (Tables)

12 Months Ended

Jul. 03, 2022

Segment Reporting [Abstract]

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

Selected financial information is presented below:

	For the Fiscal Year Ended July 3, 2022
	Americas		Brazil		Asia		Total
Net sales	$	483,085	$	126,066	$	206,607	$	815,758
Cost of sales		458,617		98,925		177,731		735,273
Gross profit		24,468		27,141		28,876		80,485
Segment depreciation expense		21,153		1,500		—		22,653
Segment Profit	$	45,621	$	28,641	$	28,876	$	103,138

	For the Fiscal Year Ended June 27, 2021
	Americas		Brazil		Asia		Total
Net sales	$	386,779	$	95,976	$	184,837	$	667,592
Cost of sales		350,373		64,281		159,444		574,098
Gross profit		36,406		31,695		25,393		93,494
Segment depreciation expense		21,054		1,315		—		22,369
Segment Profit	$	57,460	$	33,010	$	25,393	$	115,863

	For the Fiscal Year Ended June 28, 2020
	Americas		Brazil		Asia		Total
Net sales	$	380,138	$	73,339	$	153,032	$	606,509
Cost of sales		368,976		62,144		136,349		567,469
Gross profit		11,162		11,195		16,683		39,040
Segment depreciation expense		19,274		1,385		—		20,659
Segment Profit	$	30,436	$	12,580	$	16,683	$	59,699

Reconciliations of Segment Gross Profit to Consolidated Income (loss) Before Income Taxes

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

	For the Fiscal Year Ended
	July 3, 2022			June 27, 2021			June 28, 2020
Americas	$	24,468		$	36,406		$	11,162
Brazil		27,141			31,695			11,195
Asia		28,876			25,393			16,683
Segment gross profit		80,485			93,494			39,040
SG&A expenses		52,489			51,334			43,814
(Benefit) provision for bad debts		(445	)		(1,316	)		1,739
Other operating (income) expense, net		(158	)		4,865			2,308
Operating income (loss)		28,599			38,611			(8,821	)
Interest income		(1,524	)		(603	)		(722	)
Interest expense		3,085			3,323			4,779
Equity in (earnings) loss of unconsolidated affiliates		(605	)		(739	)		477
Recovery of non-income taxes, net		815			(9,717	)		—
Gain on sale of investment in unconsolidated affiliate		—			—			(2,284	)
Impairment of investment in unconsolidated affiliate		—			—			45,194
Income (loss) before income taxes	$	26,828		$	46,347		$	(56,265	)

Reconciliation of Segment Depreciation and Amortization Expense to Consolidated Depreciation and Amortization Expense

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

	For the Fiscal Year Ended
	July 3, 2022		June 27, 2021		June 28, 2020
Americas	$	21,153	$	21,054	$	19,274
Brazil		1,500		1,315		1,385
Asia		—		—		—
Segment depreciation expense		22,653		22,369		20,659
Other depreciation and amortization expense		3,554		3,159		2,994
Depreciation and amortization expense	$	26,207	$	25,528	$	23,653

Reconciliation of Segment Capital Expenditures to Consolidated Capital Expenditures

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

	For the Fiscal Year Ended
	July 3, 2022		June 27, 2021		June 28, 2020
Americas	$	29,841	$	16,053	$	15,087
Brazil		9,253		3,461		2,332
Asia		236		666		60
Segment capital expenditures		39,330		20,180		17,479
Other capital expenditures		301		998		1,030
Capital expenditures	$	39,631	$	21,178	$	18,509

Reconciliation of Segment Total Assets to Consolidated Total Assets

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

	July 3, 2022		June 27, 2021
Americas	$	379,898	$	327,445
Brazil		98,731		85,950
Asia		81,322		68,034
Segment total assets		559,951		481,429
Other current assets		5,145		48,587
Other PP&E		17,809		21,175
Other operating lease assets		756		1,116
Other non-current assets		2,985		902
Investments in unconsolidated affiliates		2,072		2,159
Total assets	$	588,718	$	555,368

Geographic Information for Net Sales

	For the Fiscal Year Ended
Net Sales	July 3, 2022		June 27, 2021		June 28, 2020
U.S.	$	430,381	$	341,897	$	342,350
China		185,558		171,261		148,923
Brazil		126,066		95,976		73,339
Remaining Foreign Countries		73,753		58,458		41,897
Total	$	815,758	$	667,592	$	606,509
Export sales from UNIFI’s U.S. operations to external customers	$	74,589	$	59,055	$	64,305

Geographic Information for Long-lived Assets

Long-Lived Assets	July 3, 2022		June 27, 2021		June 28, 2020
U.S.	$	196,885	$	191,733	$	195,874
Brazil		21,927		21,733		10,805
China		2,211		1,919		779
Remaining Foreign Countries		12,932		9,708		9,859
Total	$	233,955	$	225,093	$	217,317

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Quarterly Results (Unaudited) (Tables)

12 Months Ended

Jul. 03, 2022

Quarterly Financial Data [Abstract]

Schedule of Quarterly Financial Data

Quarterly financial data and selected highlights are as follows:

	For the Fiscal Quarter Ended
	September 26, 2021		December 26, 2021		March 27, 2022		July 3,  2022
Net sales (1)	$	195,992	$	201,410	$	200,780	$	217,576
Gross profit (2)		26,097		16,890		19,144		18,354
Net income (3)		8,680		929		2,066		3,496
Net income per common share:
Basic (4)	$	0.47	$	0.05	$	0.11	$	0.19
Diluted (4)	$	0.46	$	0.05	$	0.11	$	0.19

	For the Fiscal Quarter Ended
	September 27, 2020		December 27, 2020		March 28, 2021		June 27,  2021
Net sales (5)	$	141,505	$	162,776	$	178,866	$	184,445
Gross profit (6)		14,561		25,934		25,595		27,404
Net income (7)		3,432		7,464		4,758		13,419
Net income per common share:
Basic (4)	$	0.19	$	0.40	$	0.26	$	0.73
Diluted (4)	$	0.18	$	0.40	$	0.25	$	0.70

(1) The fiscal quarter ending July 3, 2022 included an additional week of sales of approximately $8,700.

(2) Gross profit for our domestic operations for all fiscal quarters of fiscal 2022 includes adverse pressures from (i) higher raw material costs, (ii) rising input costs, and (iii) the weakening of labor productivity.

(3) Net income for our domestic operations for all fiscal quarters of fiscal 2022 includes the adverse pressures on gross profit.

(4) Income per share is computed independently for each of the periods presented.  The sum of the income per share amounts for the fiscal quarters may not equal the total for the fiscal year.

(5) Net sales for the fiscal quarters ended September 27, 2020 and December 27, 2020 includes adverse demand pressures from the COVID-19 pandemic.

(6) Gross profit for the fiscal quarter ended September 27, 2020 includes adverse demand pressures from the COVID-19 pandemic.  Gross profit for the fiscal quarters ended December 27, 2020, March 28, 2021, and June 27, 2021 includes the benefit of exceptional performance by the Brazil Segment primarily due to higher conversion margin and market share capture due to agility and responsiveness during demand recovery in Brazil.

(7) Net income for the fiscal quarter ended September 27, 2020 includes adverse demand pressures from the COVID-19 pandemic. Net income for the fiscal quarter ended June 27, 2021 includes a recovery of non-income taxes in Brazil due to the favorable conclusion of litigation related to excess social program taxes for multiple prior years.

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Supplemental Cash Flow Information (Tables)

12 Months Ended

Jul. 03, 2022

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 Fiscal Year Ended
	July 3, 2022		June 27, 2021		June 28, 2020
Interest, net of capitalized interest of $396, $229 and $126, respectively	$	2,921	$	3,158	$	4,682
Income taxes, net of refunds		13,045		8,239		6,131

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Background - Additional Information (Details)	Jul. 03, 2022 Entity
Organization Consolidation And Presentation Of Financial Statements [Abstract]
Number of countries in which entity operates	4

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Summary of Significant Accounting Policies - Useful Lives of Property, Plant and Equipment (Details)	12 Months Ended
	Jul. 03, 2022
Land Improvements [Member] | Minimum [Member]
Property Plant And Equipment [Line Items]
Property, plant and equipment, Useful life	5 years
Land Improvements [Member] | Maximum [Member]
Property Plant And Equipment [Line Items]
Property, plant and equipment, Useful life	20 years
Building and Improvements [Member] | Minimum [Member]
Property Plant And Equipment [Line Items]
Property, plant and equipment, Useful life	10 years
Building and Improvements [Member] | Maximum [Member]
Property Plant And Equipment [Line Items]
Property, plant and equipment, Useful life	40 years
Machinery and Equipment [Member] | Minimum [Member]
Property Plant And Equipment [Line Items]
Property, plant and equipment, Useful life	2 years
Machinery and Equipment [Member] | Maximum [Member]
Property Plant And Equipment [Line Items]
Property, plant and equipment, Useful life	25 years
Computers, Software and Office Equipment [Member] | Minimum [Member]
Property Plant And Equipment [Line Items]
Property, plant and equipment, Useful life	3 years
Computers, Software and Office Equipment [Member] | Maximum [Member]
Property Plant And Equipment [Line Items]
Property, plant and equipment, Useful life	7 years
Internal Software Development Costs [Member]
Property Plant And Equipment [Line Items]
Property, plant and equipment, Useful life	3 years
Transportation Equipment [Member] | Minimum [Member]
Property Plant And Equipment [Line Items]
Property, plant and equipment, Useful life	3 years
Transportation Equipment [Member] | Maximum [Member]
Property Plant And Equipment [Line Items]
Property, plant and equipment, Useful life	15 years

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Summary of Significant Accounting Policies - Additional Information (Details) - USD ($)		9 Months Ended	12 Months Ended
	Apr. 29, 2020	Mar. 29, 2020	Jul. 03, 2022	Jun. 27, 2021	Jun. 28, 2020
Accounting Policies [Line Items]
Indefinite-Lived intangible assets			$ 0
Derivative instruments outstanding			0
Fair value assets and liabilities amount transfers into or out of the levels			$ 0	$ 0	$ 0
Parkdale, Incorporated [Member]
Accounting Policies [Line Items]
Equity method investment, ownership percentage					66.00%
Parkdale America LLC [Member]
Accounting Policies [Line Items]
Equity method investment, ownership percentage			34.00%		34.00%
Equity method investment, other than temporary impairment		$ 45,194,000			$ 45,194,000
Proceeds from sale of equity method investments	$ 60,000,000
Internal Software Development Costs [Member]
Accounting Policies [Line Items]
Property, plant and equipment, useful life			3 years

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Summary of Significant Accounting Policies - Schedule of Research and Development Costs (Details) - USD ($) $ in Thousands	12 Months Ended
	Jul. 03, 2022	Jun. 27, 2021	Jun. 28, 2020
Research And Development Expense [Abstract]
Research and development costs	$ 12,103	$ 11,483	$ 11,257

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Summary of Significant Accounting Policies - Schedule of Advertising Costs (Details) - USD ($) $ in Thousands	12 Months Ended
	Jul. 03, 2022	Jun. 27, 2021	Jun. 28, 2020
Accounting Policies [Abstract]
Advertising costs	$ 4,673	$ 2,919	$ 2,044

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Leases - Additional Information (Details)	12 Months Ended
	Jul. 03, 2022
Minimum [Member]
Lessee Lease Description [Line Items]
Lessee operating and finance lease term of contract	1 year
Maximum [Member]
Lessee Lease Description [Line Items]
Lessee operating and finance lease term of contract	15 years

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Leases - Schedule of Balance Sheet Location and Values of Company's Lease Assets and Lease Liabilities (Details) - USD ($) $ in Thousands	Jul. 03, 2022	Jun. 27, 2021
Lessee Lease Description [Line Items]
Operating lease assets	$ 8,829	$ 8,772
Total lease assets	15,846	24,809
Current operating lease liabilities	2,190	1,856
Current finance lease liabilities	1,726
Total current lease liabilities	3,916	5,401
Non-current operating lease liabilities	6,736	7,032
Non-current finance lease liabilities	5,535
Total non-current lease liabilities	12,271	11,962
Total lease liabilities	16,187	17,363
Property, Plant and Equipment
Lessee Lease Description [Line Items]
Finance lease assets	7,017	16,037
Current Portion Of Long Term Debt
Lessee Lease Description [Line Items]
Current finance lease liabilities	1,726	3,545
Long-term Debt
Lessee Lease Description [Line Items]
Non-current finance lease liabilities	$ 5,535	$ 4,930

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Leases - Schedule of Components of Lease Cost (Details) - USD ($) $ in Thousands	12 Months Ended
	Jul. 03, 2022	Jun. 27, 2021
Leases [Abstract]
Operating lease cost	$ 2,766	$ 2,465
Variable lease cost	502	503
Finance lease cost:
Amortization of lease assets	1,981	1,998
Interest on lease liabilities	258	365
Short-term lease cost	967	1,007
Total lease cost	$ 6,474	$ 6,338

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Leases - Schedule of Supplemental Cash Flow Information and Non-Cash Activity Related to Operating Leases (Details) - USD ($) $ in Thousands	12 Months Ended
	Jul. 03, 2022	Jun. 27, 2021	Jun. 28, 2020
Leases [Abstract]
Operating cash flows used by operating leases	$ 2,766	$ 2,465
Financing cash flows used by finance leases	3,707	3,646	$ 6,035
Non-cash activities:
Leased assets obtained in exchange for new operating lease liabilities	1,662	2,606
Leased assets obtained in exchange for new finance lease liabilities	$ 2,493	$ 740	$ 6,301

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Leases - Schedule of Weighted-Average Remaining Lease Term and Discount Rate for Operating Leases and Finance Leases (Details)	Jul. 03, 2022	Jun. 27, 2021
Leases [Abstract]
Operating leases	4 years 1 month 6 days	5 years 10 months 24 days
Finance leases	4 years 2 months 12 days	3 years 9 months 18 days
Operating leases	5.00%	5.10%
Finance leases	3.60%	3.60%

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Leases - Schedule of Future Minimum Lease Payments for Finance Leases and Operating Leases (Details) - USD ($) $ in Thousands		Jul. 03, 2022	Jun. 27, 2021
Finance Leases
Fiscal 2023		$ 2,032
Fiscal 2024		2,032
Fiscal 2025		1,880
Fiscal 2026		1,385
Fiscal 2027		821
Fiscal years thereafter		100
Total minimum lease payments		8,250
Less estimated executory costs		(413)
Less imputed interest		(576)
Present value of net minimum lease payments	[1]	7,261	$ 8,475
Less current portion of lease obligations		(1,726)
Non-current finance lease liabilities		5,535
Operating Leases
Fiscal 2023		2,595
Fiscal 2024		2,004
Fiscal 2025		1,498
Fiscal 2026		1,201
Fiscal 2027		971
Fiscal years thereafter		1,788
Total minimum lease payments		10,057
Less imputed interest		(1,131)
Present value of net minimum lease payments		8,926
Less current portion of lease obligations		(2,190)	(1,856)
Non-current operating lease liabilities		$ 6,736	$ 7,032

[1] Scheduled maturity dates for finance lease obligations range from March 2025 to November 2027

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Revenue Recognition - Disaggregated Revenues and Product Sales for UNIFI (Details) - USD ($) $ in Thousands	3 Months Ended																12 Months Ended
	Jul. 03, 2022	[1]	Mar. 27, 2022	[1]	Dec. 26, 2021	[1]	Sep. 26, 2021	[1]	Jun. 27, 2021	[2]	Mar. 28, 2021	[2]	Dec. 27, 2020	[2]	Sep. 27, 2020	[2]	Jul. 03, 2022	Jun. 27, 2021	Jun. 28, 2020
Disaggregation Of Revenue [Line Items]
Net sales	$ 217,576		$ 200,780		$ 201,410		$ 195,992		$ 184,445		$ 178,866		$ 162,776		$ 141,505		$ 815,758	$ 667,592	$ 606,509
Third-Party Manufacturer [Member]
Disaggregation Of Revenue [Line Items]
Net sales																	808,655	656,763	598,510
Service [Member]
Disaggregation Of Revenue [Line Items]
Net sales																	7,103	10,829	7,999
REPREVE Fiber [Member]
Disaggregation Of Revenue [Line Items]
Net sales																	293,080	245,832	186,141
All Other Products and Services [Member]
Disaggregation Of Revenue [Line Items]
Net sales																	$ 522,678	$ 421,760	$ 420,368

[1] The fiscal quarter ending July 3, 2022 included an additional week of sales of approximately $8,700.

[2] Net sales for the fiscal quarters ended September 27, 2020 and December 27, 2020 includes adverse demand pressures from the COVID-19 pandemic.

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Receivables, Net - Schedule of Accounts, Notes, Loans and Financing Receivable (Details) - USD ($) $ in Thousands	Jul. 03, 2022	Jun. 27, 2021
Receivables [Abstract]
Customer receivables	$ 99,963	$ 81,921
Allowance for uncollectible accounts	(1,498)	(2,525)
Reserves for quality claims	(860)	(703)
Net customer receivables	97,605	78,693
Other receivables	8,960	16,144
Total receivables, net	$ 106,565	$ 94,837

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Receivables, Net - Additional Information (Details) - USD ($) $ in Thousands	Jul. 03, 2022	Jun. 27, 2021
Other receivables	$ 8,960	$ 16,144
Banker's Acceptance Notes [Member] | Asia [Member]
Other receivables	$ 7,849	$ 13,391

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Receivables, Net - Allowance for Credit Losses on Financing Receivables (Details) - USD ($) $ in Thousands	12 Months Ended
	Jul. 03, 2022	Jun. 27, 2021	Jun. 28, 2020
Allowance for Doubtful Accounts [Member]
Balance at beginning of period	$ (2,525)	$ (3,796)	$ (2,338)
Credited (charged) to costs and expenses	445	1,316	(1,739)
Translation activity	40	(89)	186
Deductions	542	44	95
Balance at end of period	(1,498)	(2,525)	(3,796)
Reserve For Quality Claims [Member]
Balance at beginning of period	(703)	(928)	(961)
Credited (charged) to costs and expenses	(1,065)	(1,085)	(1,251)
Translation activity	12	(36)	10
Deductions	896	1,346	1,274
Balance at end of period	$ (860)	$ (703)	$ (928)

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Inventories - Inventories Components (Details) - USD ($) $ in Thousands	Jul. 03, 2022	Jun. 27, 2021
Inventory Disclosure [Abstract]
Raw materials	$ 69,994	$ 54,895
Supplies	11,953	10,692
Work in process	10,358	7,516
Finished goods	84,477	70,525
Gross inventories	176,782	143,628
Net realizable value adjustment	(3,487)	(2,407)
Total inventories	$ 173,295	$ 141,221

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Inventories - Additional Information (Details) - USD ($) $ in Thousands	Jul. 03, 2022	Jun. 27, 2021
Inventory Disclosure [Abstract]
Foreign inventory valued at average cost	$ 53,793	$ 58,468

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Other Current Assets - Schedule of Other Current Assets (Details) - USD ($) $ in Thousands	Jul. 03, 2022	Jun. 27, 2021
Other Assets Current [Abstract]
Vendor deposits	$ 6,910	$ 3,341
Recovery of non-income taxes, net	6,770	3,456
Prepaid expenses and other	3,004	2,753
Value-added taxes receivable	1,987	2,484
Contract assets	285	330
Total other current assets	$ 18,956	$ 12,364

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Other Current Assets - Additional Information (Details) - UNIFI [Member] - USD ($) $ in Thousands	12 Months Ended
	Jul. 03, 2022	Jun. 27, 2021
Recovery related to current and non-current assets		$ 11,519
Recovery related to net sales		10,577
Recovery related to non-income taxes	$ 815	9,717
Recovery related to taxes and interests		$ 942
Claim recovery period	12 months

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Property, Plant and Equipment, Net - PP&E Net Components (Details) - USD ($) $ in Thousands	Jul. 03, 2022	Jun. 27, 2021
Property Plant And Equipment [Line Items]
Gross PP&E	$ 886,811	$ 864,235
Less: accumulated depreciation	(666,569)	(656,576)
Less: accumulated amortization – finance leases	(3,904)	(5,963)
Total PP&E, net	216,338	201,696
Land [Member]
Property Plant And Equipment [Line Items]
Gross PP&E	3,160	3,184
Land Improvements [Member]
Property Plant And Equipment [Line Items]
Gross PP&E	16,443	16,372
Buildings and Improvements [Member]
Property Plant And Equipment [Line Items]
Gross PP&E	164,252	160,122
Assets under Finance Leases [Member]
Property Plant And Equipment [Line Items]
Gross PP&E	10,921	22,000
Machinery and Equipment [Member]
Property Plant And Equipment [Line Items]
Gross PP&E	635,699	609,414
Computers, Software and Office Equipment [Member]
Property Plant And Equipment [Line Items]
Gross PP&E	25,348	24,848
Transportation Equipment [Member]
Property Plant And Equipment [Line Items]
Gross PP&E	10,591	10,461
Construction in Progress [Member]
Property Plant And Equipment [Line Items]
Gross PP&E	$ 20,397	$ 17,834

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Property, Plant and Equipment, Net - Schedule of Capital Leased Assets (Details) - USD ($) $ in Thousands	Jul. 03, 2022	Jun. 27, 2021
Property Plant And Equipment [Line Items]
Gross assets under finance leases	$ 10,921	$ 22,000
Transportation Equipment [Member]
Property Plant And Equipment [Line Items]
Gross assets under finance leases	8,276	8,276
Machinery and Equipment [Member]
Property Plant And Equipment [Line Items]
Gross assets under finance leases	$ 2,645	9,897
Building Improvements [Member]
Property Plant And Equipment [Line Items]
Gross assets under finance leases		$ 3,827

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Property, Plant and Equipment, Net - Schedule of Depreciation Expense and Repair and Maintenance Expense (Details) - USD ($) $ in Thousands	12 Months Ended
	Jul. 03, 2022	Jun. 27, 2021	Jun. 28, 2020
Property Plant And Equipment [Abstract]
Depreciation and amortization expense	$ 24,509	$ 24,215	$ 22,551
Repair and maintenance expenses	$ 20,076	$ 18,118	$ 18,093

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Other Non Current Assets - Schedule of Other Non-Current Assets (Details) - USD ($) $ in Thousands	Jul. 03, 2022	Jun. 27, 2021
Other Assets Non Current [Abstract]
Intangible assets, net	$ 2,500	$ 3,978
Grantor trust	2,196	0
Investments in unconsolidated affiliates	2,072	2,159
Recovery of non-income taxes, net		8,063
Other	2,020	425
Total other non-current assets	$ 8,788	$ 14,625

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Other Non-Current Assets - Additional Information (Details) - USD ($) $ in Thousands	12 Months Ended
	Jul. 03, 2022	Jun. 27, 2021
Finite Lived Intangible Assets [Line Items]
Investment assets held by the trust	$ 2,196	$ 0
Losses on investments held by the trust	$ 48
Trademarks [Member]
Finite Lived Intangible Assets [Line Items]
Finite-lived intangible asset, useful life	3 years
UNIFI [Member]
Finite Lived Intangible Assets [Line Items]
Recovery related to non-income taxes	$ 815	$ 9,717

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Other Non-Current Assets - Components of Intangible Assets, Net (Details) - USD ($) $ in Thousands	Jul. 03, 2022	Jun. 27, 2021
Finite Lived Intangible Assets [Line Items]
Intangible assets, gross	$ 7,199	$ 7,506
Intangible assets, accumulated amortization	(4,699)	(3,528)
Total intangible assets, net	2,500	3,978
Customer Lists [Member]
Finite Lived Intangible Assets [Line Items]
Intangible assets, gross	5,220	5,220
Intangible assets, accumulated amortization	(3,056)	(2,049)
Non-compete Agreements [Member]
Finite Lived Intangible Assets [Line Items]
Intangible assets, gross	1,875	1,875
Intangible assets, accumulated amortization	(1,563)	(1,188)
Trademarks [Member]
Finite Lived Intangible Assets [Line Items]
Intangible assets, gross	104	411
Intangible assets, accumulated amortization	$ (80)	$ (291)

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Other Non-Current Assets - Amortization Expense for Intangible Assets (Details) - USD ($) $ in Thousands	12 Months Ended
	Jul. 03, 2022	Jun. 27, 2021	Jun. 28, 2020
Finite Lived Intangible Assets [Line Items]
Amortization expense	$ 1,478	$ 1,078	$ 855
Customer Lists [Member]
Finite Lived Intangible Assets [Line Items]
Amortization expense	1,007	556	326
Non-compete Agreements [Member]
Finite Lived Intangible Assets [Line Items]
Amortization expense	375	375	375
Trademarks [Member]
Finite Lived Intangible Assets [Line Items]
Amortization expense	$ 96	$ 147	$ 154

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Other Non-Current Assets - Expected Intangible Asset Amortization (Details) $ in Thousands	Jul. 03, 2022 USD ($)
Goodwill And Intangible Assets Disclosure [Abstract]
Fiscal 2023	$ 1,291
Fiscal 2024	528
Fiscal 2025	108
Fiscal 2026	108
Fiscal 2027	108
Thereafter	$ 357

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Other Non-Current Assets - Investments in Unconsolidated Affiliates (Details) $ in Thousands		9 Months Ended	12 Months Ended
	Apr. 29, 2020 USD ($)	Mar. 29, 2020 USD ($)	Jun. 28, 2020 USD ($)	Jul. 03, 2022 USD ($)	Jun. 27, 2021 USD ($)	Oct. 31, 2009	Sep. 30, 2000
Schedule Of Equity Method Investments [Line Items]
Equity method investments				$ 2,072	$ 2,159
UNF [Member]
Schedule Of Equity Method Investments [Line Items]
Equity method investment, ownership percentage							50.00%
UNF America [Member]
Schedule Of Equity Method Investments [Line Items]
Equity method investment, ownership percentage						50.00%
UNF and UNF America [Member]
Schedule Of Equity Method Investments [Line Items]
Purchase commitment, remaining minimum amount committed				896
Accounts payable, related parties				$ 5,565	$ 2,955
Percentage of current and total assets and total liabilities counted for by equity method investments				3.00%
Equity method investments				$ 2,072
Parkdale America LLC [Member]
Schedule Of Equity Method Investments [Line Items]
Equity method investment, ownership percentage			34.00%	34.00%
Equity method investment, other than temporary impairment		$ 45,194	$ 45,194
Proceeds from sale of equity method investments	$ 60,000
Number of manufacturing facilities			10
Parkdale America LLC [Member] | Sales Revenue, Goods, Net [Member] | Customer Concentration Risk [Member]
Schedule Of Equity Method Investments [Line Items]
Number of major customers			5
Parkdale America LLC [Member] | Sales Revenue, Goods, Net [Member] | Customer Concentration Risk [Member] | Five Largest Customers [Member]
Schedule Of Equity Method Investments [Line Items]
Concentration risk, percentage			69.00%
Parkdale America LLC [Member] | Accounts Receivable [Member] | Customer Concentration Risk [Member] | Five Largest Customers [Member]
Schedule Of Equity Method Investments [Line Items]
Concentration risk, percentage			68.00%

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Other Non-Current Assets - Schedule of Raw Material Purchases under Supply Agreement (Details) - USD ($) $ in Thousands	12 Months Ended
	Jul. 03, 2022	Jun. 27, 2021	Jun. 28, 2020
UNF [Member]
Schedule Of Equity Method Investments [Line Items]
Raw material purchases under supply agreement	$ 1,175	$ 548	$ 1,450
UNF America [Member]
Schedule Of Equity Method Investments [Line Items]
Raw material purchases under supply agreement	29,637	18,932	14,583
UNF and UNF America [Member]
Schedule Of Equity Method Investments [Line Items]
Raw material purchases under supply agreement	$ 30,812	$ 19,480	$ 16,033

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Other Non-Current Assets - Schedule of Unaudited, Condensed Balance Sheet Information for Unconsolidated Affiliates (Details) - USD ($) $ in Thousands	Jul. 03, 2022	Jun. 27, 2021	Jun. 28, 2020	Jun. 30, 2019
Schedule Of Equity Method Investments [Line Items]
Current assets	$ 352,266	$ 329,067
Current liabilities	108,792	105,423
Shareholders’ equity and capital accounts	361,449	358,419	$ 316,155	$ 392,845
Equity Method Investment, Nonconsolidated Investee or Group of Investees [Member]
Schedule Of Equity Method Investments [Line Items]
Current assets	10,705	7,931
Non-current assets	605	659
Current liabilities	8,056	3,967
Shareholders’ equity and capital accounts	3,254	4,623
UNIFI’s portion of undistributed earnings	$ 2,013	$ 2,100

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Other Non-Current Assets - Schedule of Unaudited, Condensed Income Statement Information for Unconsolidated Affiliates (Details) - USD ($) $ in Thousands	3 Months Ended																12 Months Ended
	Jul. 03, 2022	[1]	Mar. 27, 2022	[1]	Dec. 26, 2021	[1]	Sep. 26, 2021	[1]	Jun. 27, 2021	[2]	Mar. 28, 2021	[2]	Dec. 27, 2020	[2]	Sep. 27, 2020	[2]	Jul. 03, 2022	Jun. 27, 2021	Jun. 28, 2020	Jun. 28, 2020
Schedule Of Equity Method Investments [Line Items]
Net sales																	$ 815,758	$ 667,592	$ 606,509
Gross profit	$ 18,354		$ 19,144		$ 16,890		$ 26,097		$ 27,404		$ 25,595		$ 25,934		$ 14,561		80,485	93,494		$ 39,040
Net income (loss)																	15,171	29,073		(57,237)
Distributions received																	750	750		10,437
Equity Method Investment, Nonconsolidated Investee or Group of Investees [Member]
Schedule Of Equity Method Investments [Line Items]
Net sales																	31,745	19,649		561,074
Gross profit																	1,928	3,423		9,648
(Loss) income from operations																	148	1,777		(7,074)
Net income (loss)																	127	1,782		(2,326)
Depreciation and amortization																	121	151		33,590
Cash received by PAL under cotton rebate program																				11,186
Earnings recognized by PAL for cotton rebate program																				9,697
Distributions received																	$ 750	$ 750		10,437
Equity Method Investment, Nonconsolidated Investee or Group of Investees [Member] | Parkdale America LLC [Member]
Schedule Of Equity Method Investments [Line Items]
Net sales																				544,006
Gross profit																				7,592
(Loss) income from operations																				(7,484)
Net income (loss)																				(2,823)
Depreciation and amortization																				33,455
Cash received by PAL under cotton rebate program																				11,186
Earnings recognized by PAL for cotton rebate program																				9,697
Distributions received																				10,437
Equity Method Investment, Nonconsolidated Investee or Group of Investees [Member] | UNF and UNF America [Member]
Schedule Of Equity Method Investments [Line Items]
Net sales																				17,068
Gross profit																				2,056
(Loss) income from operations																				410
Net income (loss)																				497
Depreciation and amortization																				$ 135

[1] Gross profit for our domestic operations for all fiscal quarters of fiscal 2022 includes adverse pressures from (i) higher raw material costs, (ii) rising input costs, and (iii) the weakening of labor productivity.

[2] Gross profit for the fiscal quarter ended September 27, 2020 includes adverse demand pressures from the COVID-19 pandemic.  Gross profit for the fiscal quarters ended December 27, 2020, March 28, 2021, and June 27, 2021 includes the benefit of exceptional performance by the Brazil Segment primarily due to higher conversion margin and market share capture due to agility and responsiveness during demand recovery in Brazil.

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Other Current Liabilities - Schedule of Other Current Liabilities (Details) - USD ($) $ in Thousands	Jul. 03, 2022	Jun. 27, 2021
Other Liabilities Current [Abstract]
Payroll and fringe benefits	$ 9,414	$ 10,204
Incentive compensation	3,916	12,356
Utilities	2,287	2,347
Deferred revenue	1,694	2,691
Interest rate swaps		1,234
Property taxes and other	2,495	2,806
Total other current liabilities	$ 19,806	$ 31,638

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Long-Term Debt - Long-Term Debt Components (Details) - USD ($) $ in Thousands		12 Months Ended
		Jul. 03, 2022	Jun. 27, 2021
Debt Instrument [Line Items]
Finance lease obligations	[1]	$ 7,261	$ 8,475
Construction financing	[2]	729	882
Total debt		114,290	86,857
Current portion of finance lease obligations		(1,726)	(3,545)
Unamortized debt issuance costs		(255)	(476)
Total long-term debt		$ 102,309	70,336
Finance Lease Obligations [Member]
Debt Instrument [Line Items]
Weighted Average	[1]	3.60%
Construction Financing [Member]
Debt Instrument [Line Items]
Weighted Average	[2]	1.90%
Construction financing		$ 729
ABL Revolver [Member]
Debt Instrument [Line Items]
Debt Instrument, Maturity Date		2023-12
Weighted Average		3.20%
Long-term Debt		$ 41,300
ABL Term Loan [Member]
Debt Instrument [Line Items]
Debt Instrument, Maturity Date		2023-12
Current ABL Term Loan		$ (10,000)	(12,500)
Weighted Average		3.20%
Outstanding balances of term loan		$ 65,000	$ 77,500

[1] Scheduled maturity dates for finance lease obligations range from March 2025 to November 2027

[2] Refer to the discussion below under the subheading “Construction Financing” for further information.

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Long-Term Debt - Long-Term Debt Components (Details) (Parenthetical)	12 Months Ended
	Jul. 03, 2022
Debt Disclosure [Abstract]
Finance lease obligations, scheduled maturity start date	2025-03
Finance lease obligations, scheduled maturity end date	2027-11

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Long-Term Debt - Additional Information (Details)							1 Months Ended	12 Months Ended
		Feb. 05, 2021 USD ($)	May 15, 2020 USD ($)	Apr. 29, 2020 USD ($)	Dec. 18, 2018 USD ($)	Dec. 17, 2018	May 31, 2021 Payment	Jul. 03, 2022 USD ($)	Jun. 27, 2021 USD ($)	Jun. 28, 2020 USD ($)
Debt Instrument [Line Items]
Variable rate borrowings amount								$ 75,000,000
Finance lease obligations								2,493,000	$ 740,000	$ 6,301,000
Lease expiration date									Jun. 30, 2025
Lease expiration range end date										Mar. 31, 2025
Lease expiration range end date										Nov. 30, 2026
Finance lease discount rate									3.80%
Construction financing	[1]							729,000	$ 882,000
Construction Financing [Member]
Debt Instrument [Line Items]
Monthly payment | Payment							60
Interest rate during period							4.40%
Construction financing								729,000
Long term debt including transitioned amount								3,222,000
Completed asset cost transferred to finance lease obligation								2,493,000
Swap A [Member]
Debt Instrument [Line Items]
Derivative notional amount								20,000,000
Swap B [Member]
Debt Instrument [Line Items]
Derivative notional amount								30,000,000
Swap C [Member]
Debt Instrument [Line Items]
Derivative notional amount								$ 25,000,000
Minimum [Member]
Debt Instrument [Line Items]
Line of credit facility, unused capacity, commitment fee percentage								0.25%
Finance lease obligations								$ 3,000.0
Finance lease discount rate										3.10%
Maximum [Member]
Debt Instrument [Line Items]
Finance lease obligations								$ 4,400
Finance lease discount rate										3.50%
Parkdale America LLC [Member]
Debt Instrument [Line Items]
Equity method investment, ownership percentage								34.00%		34.00%
Proceeds from sale of equity method investments				$ 60,000,000
LIBOR [Member]
Debt Instrument [Line Items]
Derivative, average fixed interest rate								1.90%
SOFR [Member] | Construction Financing [Member]
Debt Instrument [Line Items]
Debt instrument, basis spread on variable rate							1.25%
ABL Facility [Member]
Debt Instrument [Line Items]
Foreign capital stock, maximum voting stock of first tier foreign subsidiaries								65.00%
Fixed charge coverage ratio								(0.24)
ABL Facility [Member] | Parkdale America LLC [Member]
Debt Instrument [Line Items]
Equity method investment, ownership percentage				34.00%
Proceeds from sale of equity method investments			$ 60,000,000
ABL Revolver [Member] | Base Rate [Member] | Minimum [Member]
Debt Instrument [Line Items]
Debt instrument, basis spread on variable rate								0.25%
ABL Revolver [Member] | Base Rate [Member] | Maximum [Member]
Debt Instrument [Line Items]
Debt instrument, basis spread on variable rate								0.75%
ABL Revolver [Member] | LIBOR [Member] | Minimum [Member]
Debt Instrument [Line Items]
Debt instrument, basis spread on variable rate								1.25%
ABL Revolver [Member] | LIBOR [Member] | Maximum [Member]
Debt Instrument [Line Items]
Debt instrument, basis spread on variable rate								1.75%
Revolving Credit Facility [Member] | ABL Facility [Member]
Debt Instrument [Line Items]
Line of credit facility, remaining borrowing capacity								$ 51,409,000
Standby Letters of Credit [Member]
Debt Instrument [Line Items]
Line of credit facility, current borrowing capacity								$ 0
Credit Agreement [Member]
Debt Instrument [Line Items]
Debt agreement maximum borrowing capacity					$ 200,000,000
Outstanding balances of term loan					$ 100,000,000
Debt instrument maturity date					Dec. 18, 2023
Principal amount of term loan					$ 100,000,000
Annual interest rate added to federal funds rate								0.50%
Annual interest rate added to LIBOR rate								1.00%
Credit Agreement [Member] | ABL Facility [Member]
Debt Instrument [Line Items]
Debt instrument maturity date					Dec. 18, 2023	Mar. 26, 2020
Minimum monthly fixed charge coverage ratio covenant								1.05
Credit Agreement [Member] | ABL Facility [Member] | Base Rate [Member]
Debt Instrument [Line Items]
Decrease in the applicable margin rate percentage					0.25%
Credit Agreement [Member] | Revolving Credit Facility [Member]
Debt Instrument [Line Items]
Line of credit facility, maximum borrowing capacity					$ 100,000,000
Credit Agreement [Member] | Revolving Credit Facility [Member] | ABL Facility [Member] | Trigger Level [Member]
Debt Instrument [Line Items]
Line of credit facility, remaining borrowing capacity								$ 20,625,000
Fifth Amendment [Member]
Debt Instrument [Line Items]
Payments for repurchase stock		$ 5,000,000

[1] Refer to the discussion below under the subheading “Construction Financing” for further information.

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Long-Term Debt - Scheduled Maturities of Outstanding Debt Obligations (Details) $ in Thousands	Jul. 03, 2022 USD ($)
Debt Instrument Redemption [Line Items]
Fiscal 2023	$ 11,726	[1]
Fiscal 2024	98,087	[1]
Fiscal 2025	1,699	[1]
Fiscal 2026	1,255	[1]
Fiscal 2027	732	[1]
Thereafter	62	[1]
Finance Lease Obligations [Member]
Debt Instrument Redemption [Line Items]
Fiscal 2023	1,726
Fiscal 2024	1,787
Fiscal 2025	1,699
Fiscal 2026	1,255
Fiscal 2027	732
Thereafter	62
ABL Revolver [Member]
Debt Instrument Redemption [Line Items]
Fiscal 2024	41,300
ABL Term Loan [Member]
Debt Instrument Redemption [Line Items]
Fiscal 2023	10,000
Fiscal 2024	$ 55,000

[1] Total reported excludes $729 for construction financing, described above.

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Long-Term Debt - Scheduled Maturities of Outstanding Debt Obligations (Details) (Parenthetical) - USD ($) $ in Thousands		Jul. 03, 2022	Jun. 27, 2021
Debt Instrument Redemption [Line Items]
Construction financing	[1]	$ 729	$ 882
Construction Financing [Member]
Debt Instrument Redemption [Line Items]
Construction financing		$ 729

[1] Refer to the discussion below under the subheading “Construction Financing” for further information.

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Other Long-Term Liabilities - Other Long-Term Liabilities Components (Details) - USD ($) $ in Thousands	Jul. 03, 2022	Jun. 27, 2021
Other Liabilities Disclosure [Abstract]
Nonqualified deferred compensation plan obligation	$ 1,982	$ 2,090
Uncertain tax positions	1,575	3,045
Other	892	2,337
Total other long-term liabilities	$ 4,449	$ 7,472

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Income Taxes - Components of Income (loss) before Income Taxes (Details) - USD ($) $ in Thousands	12 Months Ended
	Jul. 03, 2022	Jun. 27, 2021	Jun. 28, 2020
Income Tax Disclosure [Abstract]
U.S.	$ (18,364)	$ (12,463)	$ (74,905)
Foreign	45,192	58,810	18,640
Income (loss) before income taxes	$ 26,828	$ 46,347	$ (56,265)

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Income Taxes - Schedule of Provision for Income Taxes (Details) - USD ($) $ in Thousands	12 Months Ended
	Jul. 03, 2022	Jun. 27, 2021	Jun. 28, 2020
Current:
Federal	$ (1,163)	$ (577)	$ 282
State	2	25	(118)
Foreign	15,935	12,739	4,819
Total current tax expense	14,774	12,187	4,983
Deferred:
Federal	(630)	(1,564)	(3,783)
State	33	131	116
Foreign	(2,520)	6,520	(344)
Total deferred tax expense	(3,117)	5,087	(4,011)
Provision for income taxes	$ 11,657	$ 17,274	$ 972

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Income Taxes - Additional Information (Details) - USD ($) $ in Thousands	12 Months Ended
	Jul. 03, 2022	Jun. 27, 2021	Jun. 28, 2020
Income Taxes [Line Items]
Tax benefit		$ 4,816
Capital loss carryforwards	$ 16,318	17,429
Net operating loss carryforwards beginning expiration year	2023
U.S federal research tax credit carryforwards	$ 5,284
U.S. federal research tax credit carryforwards expiration year	2039
Amount of Unrecognized Deferred Tax Liability	$ 6,046
Capital Loss Carryforward
Income Taxes [Line Items]
Capital loss carryforwards	71,105
U.S. Federal NOL [Member]
Income Taxes [Line Items]
U.S federal net operating loss carryforwards	$ 16,731
U.S. Federal Foreign Tax Credits [Member]
Income Taxes [Line Items]
Net operating loss carryforwards beginning expiration year	2023
U.S federal net operating loss carry a full valuation allowance	$ 3,075
Foreign Tax Credits [Member]
Income Taxes [Line Items]
U.S federal net operating loss carry a full valuation allowance	3,170
Earliest Tax Year [Member]
Income Taxes [Line Items]
State deferred tax expense component, utilization of net operating loss carryforwards	25	167	$ 20
Foreign deferred tax expense component, utilization of net operating loss carryforwards	32	441	702
Valuation allowance, deferred tax asset, increase (decrease), amount	(5,313)	(459)	11,419
Unrecognized tax benefits that would impact effective tax rate	4,746
Unrecognized tax benefits, income tax penalties and interest expense	287	141	69
Unrecognized tax benefits, income tax penalties and interest accrued	559	273
Unremitted foreign earnings	26,253
U.S. Federal [Member]
Income Taxes [Line Items]
Net operating loss	110	$ 5,312	$ 89
U.S. Federal [Member] | Earliest Tax Year [Member]
Income Taxes [Line Items]
Open tax year			2017
Net Operating Loss Held Outside U.S Consolidated Tax Filing Group [Member]
Income Taxes [Line Items]
U.S state net operating loss carryforwards	$ 14,421
Net operating loss carryforwards beginning expiration year	2023
Net Operating Loss Held Outside U.S Consolidated Tax Filing Group [Member] | U.S. Federal NOL [Member]
Income Taxes [Line Items]
U.S federal net operating loss carryforwards	$ 2,340
Foreign Net Operating Loss Carry Forwards [Member]
Income Taxes [Line Items]
U.S federal net operating loss carry a full valuation allowance	$ 395
State and Local Jurisdiction [Member] | Earliest Tax Year [Member] | North Carolina Department of Revenue [Member]
Income Taxes [Line Items]
Open tax year			2017
State and Local Jurisdiction [Member] | Latest Tax Year [Member] | North Carolina Department of Revenue [Member]
Income Taxes [Line Items]
Open tax year			2019

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Income Taxes - Reconciliation from Federal Statutory Tax Rate to Effective Tax Rate (Details)	12 Months Ended
	Jul. 03, 2022	Jun. 27, 2021	Jun. 28, 2020
Effective Income Tax Rate Continuing Operations Tax Rate Reconciliation [Abstract]
Federal statutory tax rate	21.00%	21.00%	21.00%
Change in valuation allowance	12.60%	5.00%	0.60%
Foreign income taxed at different rates	10.70%	9.00%	(1.20%)
Tax expense on unremitted foreign earnings	5.50%	7.00%	(0.90%)
Repatriation of foreign earnings and withholding taxes	3.90%	1.80%	(2.00%)
Change in uncertain tax positions	2.40%	0.50%	(0.30%)
Nondeductible compensation	2.10%	1.40%	(0.80%)
U.S. tax on GILTI	0.20%	3.90%	(5.00%)
Nontaxable income	(10.20%)	(2.40%)	1.10%
Research and other business credits	(4.00%)	(3.70%)	2.00%
State income taxes, net of federal tax benefit	(1.30%)	(0.20%)	2.60%
Foreign tax credits	(0.50%)	(5.40%)	0.90%
Deemed repatriation of foreign earnings under Subpart F		1.50%
Domestic production activities deduction		0.60%
Rate benefit of U.S. federal NOL carryback		(2.80%)
Valuation allowance related to loss on sale of investment in PAL			(19.30%)
Nondeductible expenses and other	1.10%	0.10%	(0.40%)
Effective tax rate	43.50%	37.30%	(1.70%)

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Income Taxes - Deferred Tax Assets and Liabilities (Details) - USD ($) $ in Thousands	Jul. 03, 2022	Jun. 27, 2021	Jun. 28, 2020
Components Of Deferred Tax Assets And Liabilities [Abstract]
Capital loss carryforwards	$ 16,318	$ 17,429
Tax credits	12,079	18,711
Research and development costs	7,409	6,934
NOL carryforwards	6,603	3,043
Accrued compensation	2,106	4,056
Other items	4,877	4,815
Total gross deferred tax assets	49,392	54,988
Valuation allowance	(31,667)	(36,980)	$ (37,439)
Net deferred tax assets	17,725	18,008
PP&E	(14,952)	(16,045)
Unremitted earnings	(5,253)	(3,769)
Recovery of non-income taxes	132	(3,664)
Other	(138)	(8)
Total deferred tax liabilities	(20,211)	(23,486)
Net deferred tax liabilities	$ (2,486)	$ (5,478)

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Income Taxes - Schedule of Components of Deferred Tax Valuation Allowance (Details) - USD ($) $ in Thousands	Jul. 03, 2022	Jun. 27, 2021	Jun. 28, 2020
Valuation Allowance [Line Items]
Deferred tax valuation allowance	$ (31,667)	$ (36,980)	$ (37,439)
Capital Loss Carryforward
Valuation Allowance [Line Items]
Deferred tax valuation allowance	(16,318)	(17,429)	(13,791)
Tax Credit [Member]
Valuation Allowance [Line Items]
Deferred tax valuation allowance	(10,779)	(17,215)	(17,111)
NOL Carryforwards [Member]
Valuation Allowance [Line Items]
Deferred tax valuation allowance	$ (4,570)	$ (2,336)	(2,542)
Investments, Including Unconsolidated Affiliates [Member]
Valuation Allowance [Line Items]
Deferred tax valuation allowance			$ (3,995)

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Income Taxes - Reconciliation of Beginning and Ending Gross Amounts of Unrecognized Tax Benefits (Details) - USD ($) $ in Thousands	12 Months Ended
	Jul. 03, 2022	Jun. 27, 2021	Jun. 28, 2020
Income Tax Uncertainties [Abstract]
Balance at beginning of year	$ 2,590	$ 1,218	$ 1,083
Gross increases (decreases) related to current period tax positions	408	(24)	98
Gross (decreases) increases related to tax positions in prior periods	(89)	1,396	37
Balance at end of year	$ 2,909	$ 2,590	$ 1,218

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Shareholders' Equity - Additional Information (Details) - USD ($)	12 Months Ended
	Jul. 03, 2022	Jun. 27, 2021	Jun. 28, 2020	Oct. 31, 2018
Equity Class Of Treasury Stock [Line Items]
Payments of Dividends	$ 0	$ 0	$ 0
2018 Share Repurchase Program [Member]
Equity Class Of Treasury Stock [Line Items]
Share Repurchase Program, Authorized Amount				$ 50,000,000
Share Repurchase Program, Remaining Authorized Repurchase Amount	$ 38,859,000

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Shareholders' Equity - Repurchases and Retirements of Common Stock (Details) $ / shares in Units, $ in Thousands	12 Months Ended
	Jul. 03, 2022 USD ($) $ / shares shares
Stockholders Equity [Line Items]
Total Number of Shares Repurchased as Part of Publicly Announced Plans or Programs | shares	701
Average Price Paid per Share | $ / shares	$ 15.90
Approximate Dollar Value that May Yet Be Repurchased Under Publicly Announced Plans or Programs	$ 38,859
Fiscal 2019 [Member]
Stockholders Equity [Line Items]
Approximate Dollar Value that May Yet Be Repurchased Under Publicly Announced Plans or Programs	$ 50,000
Fiscal 2020 [Member]
Stockholders Equity [Line Items]
Total Number of Shares Repurchased as Part of Publicly Announced Plans or Programs | 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 2021 [Member]
Stockholders Equity [Line Items]
Approximate Dollar Value that May Yet Be Repurchased Under Publicly Announced Plans or Programs	$ 48,008
Fiscal 2022 [Member]
Stockholders Equity [Line Items]
Total Number of Shares Repurchased as Part of Publicly Announced Plans or Programs | shares	617
Average Price Paid per Share | $ / shares	$ 14.84
Approximate Dollar Value that May Yet Be Repurchased Under Publicly Announced Plans or Programs	$ 38,859

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Stock-Based Compensation - Additional Information (Details) $ / shares in Units, $ in Thousands		12 Months Ended
	May 01, 2020 USD ($) d $ / shares shares	Jul. 03, 2022 USD ($) $ / shares shares	Jun. 27, 2021 USD ($) $ / shares shares	Jun. 28, 2020 USD ($) $ / shares shares	Oct. 24, 2018 shares	Oct. 23, 2013 shares
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Employee service share-based compensation, non vested awards, compensation cost not yet recognized | $		$ 2,538
Employee service share-based compensation, non vested awards, compensation cost not yet recognized, period for recognition		1 year 7 months 6 days
Employee service share-based compensation, tax benefit realized from exercise of stock options | $		$ 386	$ 297	$ 178
Share-based compensation arrangement by share-based payment award, options, grants in period, gross		5,000	4,000	4,000
Share-based compensation arrangement by share-based payment award, compensation expense | $		$ 110	$ 75	$ 100
Common Stock [Member]
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Price attainment for consecutive trading days for vesting | d	10
Stock Options [Member]
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Share-based compensation arrangement by share-based payment award, expiration period	10 years
Share-based compensation arrangements by share-based payment award, options, grants in period, weighted average exercise price | $ / shares	$ 11.74
Stock Options [Member] | Share Based Compensation Award Vested One
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Share based compensation arrangement by share-based payment award, options, vested, number of shares	100
Grant date fair value | $ / shares	$ 4.83
Stock Options [Member] | Share Based Compensation Award Vested Two
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Share-based compensation arrangement by share-based payment award, expiration period	3 years
Share based compensation arrangement by share-based payment award, options, vested, number of shares	100
Grant date fair value | $ / shares	$ 4.83
Stock Options [Member] | Common Stock [Member]
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Share-based compensation arrangement by share-based payment award, options, grants in period, gross	533,000
Stock Options [Member] | Common Stock [Member] | Share Based Compensation Award Vested One
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Share based compensation arrangement by share-based payment award, options, vested, number of shares	100
Grant date fair value | $ / shares	$ 2.70
Stock Options [Member] | Common Stock [Member] | Share Based Compensation Award Vested One | Minimum [Member]
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Share-based compensation arrangement by share-based payment award, expiration period	4 years
Share based compensation arrangement by share based payment award options vested price attainment | $	$ 40
Stock Options [Member] | Common Stock [Member] | Share Based Compensation Award Vested One | Maximum [Member]
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Share-based compensation arrangement by share-based payment award, expiration period	5 years
Share based compensation arrangement by share based payment award options vested price attainment | $	$ 50
Stock Options [Member] | Common Stock [Member] | Share Based Compensation Award Vested Two
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Share-based compensation arrangement by share-based payment award, expiration period	5 years
Share based compensation arrangement by share-based payment award, options, vested, number of shares	233
Grant date fair value | $ / shares	$ 2.33
Share based compensation arrangement by share based payment award options vested price attainment | $	$ 50
Stock Options [Member]
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Employee service share-based compensation, non vested awards, compensation cost not yet recognized | $		$ 904
Employee service share-based compensation, non vested awards, compensation cost not yet recognized, period for recognition		1 year 8 months 12 days
Share-based compensation arrangement by share-based payment award, options, exercises in period, intrinsic value | $		$ 60	85	147
Proceeds from stock options exercised | $		28	0	29
Employee service share-based compensation, tax benefit realized from exercise of stock options | $		$ 8	$ 11	$ 20
RSUs Issued to Key Employees [Member]
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Share-based compensation arrangement by share-based payment award, equity instruments other than options, grants in period		80,000	73,000	127,000
Service Period (years)		3 years
Share-based compensation arrangement by share-based payment award, equity instruments other than options, grants in period, weighted average grant date fair value | $ / shares		$ 23.45	$ 15.65	$ 19.74
VSUs Issued to Non-Employee Directors [Member]
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Share-based compensation arrangement by share-based payment award, equity instruments other than options, grants in period		32,000	37,000	24,000
Share-based compensation arrangement by share-based payment award, equity instruments other than options, grants in period, weighted average grant date fair value | $ / shares		$ 22.03	$ 15.91	$ 27.15
PSUs Issued to Key Employees [Member]
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Share-based compensation arrangement by share-based payment award, equity instruments other than options, grants in period		53,000
Share-based compensation arrangement by share-based payment award, equity instruments other than options, grants in period, weighted average grant date fair value | $ / shares		$ 23.27
Share-based compensation arrangement by share-based payment award, equity instruments other than options, grants in period not expected to vest		53,000
PSUs Issued to Key Employees [Member] | Minimum [Member]
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Share-based compensation arrangement by share-based payment award, vesting percentage		50.00%
PSUs Issued to Key Employees [Member] | Maximum [Member]
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Share-based compensation arrangement by share-based payment award, vesting percentage		200.00%
Restricted Stock Units R S U Vested Share Units V S U And Performance Share Units P S U
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Share-based compensation arrangement by share-based payment award, equity instruments other than options, vested and expected to vest, number		426,000
Share-based compensation arrangement by share-based payment award, equity instruments other than options, aggregate intrinsic value, outstanding | $		$ 5,972
Share-based compensation arrangement by share-based payment award, equity instruments other than options, vested, number		245,000
Share-based compensation arrangement by share-based payment award, equity instruments other than options, aggregate intrinsic value, vested | $		$ 3,434
Share-based compensation arrangement by share-based payment award, equity instruments other than options, converted in period, aggregate intrinsic value | $		1,715	$ 1,216	$ 1,708
Employee service share-based compensation, tax benefit realized from exercise of stock options | $		260	$ 159	$ 206
Restricted Stock Units (RSUs) and Performance Share Units (PSUs) [Member]
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Employee service share-based compensation, non vested awards, compensation cost not yet recognized | $		$ 1,634
Employee service share-based compensation, non vested awards, compensation cost not yet recognized, period for recognition		1 year 7 months 6 days
The 2013 Incentive Compensation Plan [Member]
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Share-based compensation arrangement by share-based payment award, Number of shares authorized						1,000,000
Expiration 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					1,250,000
2020 Plan [Member]
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Share-based compensation arrangement by share-based payment award, Number of shares authorized		850,000
Number of shares available for future issuance		601,000
Inception date		Oct. 29, 2020

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Stock-Based Compensation - Summary of Number of Securities Remaining Available for Future Issuance (Details) - shares shares in Thousands	12 Months Ended
	Jul. 03, 2022	Jun. 27, 2021	Jun. 28, 2020
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Less: Awards granted to employees	(5)	(4)	(4)
2020 Plan [Member]
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Authorized under the 2020 Plan	850
Available for issuance under the 2020 Plan	601
2020 Plan [Member] | Awards Expired, Forfeited or Otherwise Terminated Unexercised [Member]
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Plus: Awards expired, forfeited or otherwise terminated unexercised	1
2020 Plan [Member] | Awards Granted to Employees [Member]
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Less: Awards granted to employees	(209)
2020 Plan [Member] | Awards Granted to Non-Employee Directors [Member]
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Less: Awards granted to non-employee directors	(41)

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Stock-Based Compensation - Stock Option Valuation Assumptions (Details) - $ / shares	12 Months Ended
	Jul. 03, 2022	Jun. 27, 2021	Jun. 28, 2020
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Expected term (years)		5 years 6 months	5 years 6 months
Risk-free interest rate		0.40%	0.70%
Volatility		49.00%	43.20%
Dividend yield	0.00%	0.00%	0.00%
Black Scholes Model
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Quantity		155	143
Service Period (years)		3 years	3 years
Weighted Average Exercise Price		$ 15.64	$ 19.95
Weighted Average Grant Date Fair Value		$ 6.75	$ 7.33

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Stock-Based Compensation - Summary of Stock Option Activity (Details) $ / shares in Units, shares in Thousands, $ in Thousands	12 Months Ended
	Jul. 03, 2022 USD ($) $ / shares shares
Employee Service Share Based Compensation Aggregate Disclosures [Abstract]
Stock Options, Outstanding at June 27, 2021 | shares	1,114
Stock Options, Exercised | shares	(10)
Stock Options, Cancelled or forfeited | shares	(122)
Stock Options, Outstanding at July 3, 2022 | shares	982
Stock Options, Vested and expected to vest as of July 3, 2022 | shares	982
Stock Options, Exercisable at July 3, 2022 | shares	380
Weighted Average Exercise Price, Outstanding at June 27, 2021 | $ / shares	$ 16.82
Weighted Average Exercise Price, Exercised | $ / shares	11.09
Weighted Average Exercise Price, Cancelled or forfeited | $ / shares	25.45
Weighted Average Exercise Price, Outstanding at July 3, 2022 | $ / shares	15.81
Weighted Average Exercise Price, Vested and expected to vest as of July 3, 2022 | $ / shares	15.81
Weighted Average Exercise Price, Exercisable at July 3, 2022 | $ / shares	$ 20.15
Weighted Average Remaining Contractual Life (Years), Outstanding at July 3, 2022	7 years 2 months 12 days
Weighted Average Remaining Contractual Life (Years), Vested and expected to vest as of July 3, 2022	7 years 2 months 12 days
Weighted Average Remaining Contractual Life (Years), Exercisable at July 3, 2022	6 years 1 month 6 days
Aggregate Intrinsic Value, Outstanding at July 3, 2022 | $	$ 1,296
Aggregate Intrinsic Value, Vested and expected to vest as of July 3, 2022 | $	1,296
Aggregate Intrinsic Value, Exercisable at July 3, 2022 | $	$ 285

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Stock-Based Compensation - Summary of RSU, VSU and PSU Activity (Details) - Restricted Stock Units R S U Vested Share Units V S U And Performance Share Units P S U shares in Thousands	12 Months Ended
	Jul. 03, 2022 $ / shares shares
Nonvested [Member]
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Outstanding (in shares)	162
Granted (in shares)	166
Vested (in shares)	(92)
Cancelled or forfeited (in shares)	(2)
Outstanding (in shares)	234
Outstanding (in dollars per share) | $ / shares	$ 16.75
Granted (in dollars per share) | $ / shares	23.12
Vested (in dollars per share) | $ / shares	18.78
Cancelled or forfeited (in dollars per share) | $ / shares	20.39
Outstanding (in dollars per share) | $ / shares	$ 20.38
Vested [Member]
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Outstanding (in shares)	241
Vested (in shares)	92
Converted (in shares)	(88)
Outstanding (in shares)	245
Total Nonvested and Vested [Member]
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Outstanding (in shares)	403
Granted (in shares)	166
Converted (in shares)	(88)
Cancelled or forfeited (in shares)	(2)
Outstanding (in shares)	479
Outstanding (in dollars per share) | $ / shares	$ 20.82
Granted (in dollars per share) | $ / shares	23.12
Vested (in dollars per share) | $ / shares	18.78
Converted (in dollars per share) | $ / shares	19.80
Cancelled or forfeited (in dollars per share) | $ / shares	20.39
Outstanding (in dollars per share) | $ / shares	$ 21.80

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Stock-Based Compensation - Stock Based Compensation Total Cost Charged Against Income (Details) - USD ($) $ in Thousands	12 Months Ended
	Jul. 03, 2022	Jun. 27, 2021	Jun. 28, 2020
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Compensation cost	$ 3,181	$ 3,062	$ 3,510
Stock options [Member]
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Compensation cost	928	1,047	1,265
RSUs and VSUs [Member]
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Compensation cost	$ 2,253	$ 2,015	$ 2,245

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Defined Contribution Plans - Additional Information (Details) - USD ($) $ in Thousands	12 Months Ended
	Jul. 03, 2022	Jun. 27, 2021
Defined Contribution Plan Disclosure [Line Items]
Total DCP obligation	$ 2,359
Predecessor SERP		$ 3,177
Contribution for the First 3% [Member] | Retirement Savings Plan [Member]
Defined Contribution Plan Disclosure [Line Items]
Defined contribution plan, employer matching contribution percentage	100.00%
Defined contribution plan, employer matching contribution, percent of employees' gross pay	3.00%
Contribution for the Next 2% [Member] | Retirement Savings Plan [Member]
Defined Contribution Plan Disclosure [Line Items]
Defined contribution plan, employer matching contribution percentage	50.00%
Defined contribution plan, employer matching contribution, percent of employees' gross pay	2.00%

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Defined Contribution Plans - Schedule of Employer Matching Contribution Expense Related to 401(k) Plan (Details) - USD ($) $ in Thousands	12 Months Ended
	Jul. 03, 2022	Jun. 27, 2021	Jun. 28, 2020
Compensation And Retirement Disclosure [Abstract]
Matching contribution expense	$ 3,215	$ 2,578	$ 2,491

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Fair Value of Financial Instruments and Non-Financial Assets and Liabilities - Additional Information (Details) - USD ($)	12 Months Ended
	Jul. 03, 2022	Jun. 27, 2021	Jun. 28, 2020
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Investment assets held by the trust	$ 2,196,000	$ 0
Losses on investments held by the trust	48,000
Non-financial assets or liabilities of fair value recurring or non-recurring basis	$ 0
LIBOR [Member]
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Derivative, average fixed interest rate	1.90%
Swaps A, B and C [Member] | Designated Hedges [Member]
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Derivative notional amount	$ 75,000,000
Increase (decrease) in interest expense	$ 1,190,000	$ 1,347,000	$ 270,000
Swaps A, B and C [Member] | Designated Hedges [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 Fair Value Attributes for the Historical Swaps (Details) - Other Long-term Liabilities [Member] - Fair Value, Inputs, Level 2 $ in Thousands	Jun. 27, 2021 USD ($)
Interest Rate Swap A
Fair Value Liabilities Measured On Recurring Basis Unobservable Input Reconciliation [Line Items]
Notional Amount	$ 20,000
Fair Value	334
Interest Rate Swap B
Fair Value Liabilities Measured On Recurring Basis Unobservable Input Reconciliation [Line Items]
Notional Amount	30,000
Fair Value	500
Interest Rate Swap C
Fair Value Liabilities Measured On Recurring Basis Unobservable Input Reconciliation [Line Items]
Notional Amount	25,000
Fair Value	$ 400

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Accumulated Other Comprehensive Loss - Schedule of Changes in Accumulated Other Comprehensive Loss, Net of Tax (Details) - USD ($) $ in Thousands	12 Months Ended
	Jul. 03, 2022	Jun. 27, 2021	Jun. 28, 2020
Accumulated Other Comprehensive Income Loss [Line Items]
Beginning balance	$ (53,432)	$ (63,806)	$ (43,229)
Other comprehensive (loss) income, net of tax	(6,173)	10,374	(20,577)
Ending balance	(59,605)	(53,432)	(63,806)
Foreign Currency Translation Adjustments [Member]
Accumulated Other Comprehensive Income Loss [Line Items]
Beginning balance	(52,480)	(61,848)	(42,729)
Other comprehensive (loss) income, net of tax	(7,125)	9,368	(19,119)
Ending balance	(59,605)	(52,480)	(61,848)
Changes in Interest Rate Swaps [Member]
Accumulated Other Comprehensive Income Loss [Line Items]
Beginning balance	(952)	(1,958)	(500)
Other comprehensive (loss) income, net of tax	$ 952	1,006	(1,458)
Ending balance		$ (952)	$ (1,958)

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Accumulated Other Comprehensive Loss - Summary of Other Comprehensive Income (Loss) (Details) - USD ($) $ in Thousands	12 Months Ended
	Jul. 03, 2022	Jun. 27, 2021	Jun. 28, 2020
Other comprehensive (loss) income:
Foreign currency translation adjustments, Pre-tax	$ (7,125)	$ 9,368	$ (21,027)
Changes in interest rate swaps, net of reclassification adjustments, Pre-tax	1,234	1,316	(1,904)
Other comprehensive (loss) income, net	(5,891)	10,684	(21,023)
Changes in interest rate swaps, net of reclassification adjustments, Tax	(282)	(310)	446
Other comprehensive (loss) income, net	(282)	(310)	446
Foreign currency translation adjustments	(7,125)	9,368	(21,027)
Changes in interest rate swaps, net of reclassification adjustments, After-tax	952	1,006	(1,458)
Other comprehensive (loss) income, net	$ (6,173)	$ 10,374	(20,577)
Unconsolidated Affiliates [Member]
Other comprehensive (loss) income:
Foreign currency translation adjustments, Pre-tax			1,908
Foreign currency translation adjustments			$ 1,908

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Computation of Earnings Per Share - Computation of Basic and Diluted Earnings (Loss) Per Share (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended																12 Months Ended
	Jul. 03, 2022		Mar. 27, 2022		Dec. 26, 2021		Sep. 26, 2021		Jun. 27, 2021		Mar. 28, 2021		Dec. 27, 2020		Sep. 27, 2020		Jul. 03, 2022	Jun. 27, 2021	Jun. 28, 2020
Earnings Per Share [Abstract]
Net income (loss)	$ 3,496	[1]	$ 2,066	[1]	$ 929	[1]	$ 8,680	[1]	$ 13,419	[2]	$ 4,758	[2]	$ 7,464	[2]	$ 3,432	[2]	$ 15,171	$ 29,073	$ (57,237)
Weighted average common shares outstanding (in shares)																	18,429,000	18,472,000	18,475,000
Basic	$ 0.19	[3]	$ 0.11	[3]	$ 0.05	[3]	$ 0.47	[3]	$ 0.73	[3]	$ 0.26	[3]	$ 0.40	[3]	$ 0.19	[3]	$ 0.82	$ 1.57	$ (3.10)
Net potential common share equivalents																	439,000	384,000
Adjusted weighted average common shares outstanding (in shares)																	18,868,000	18,856,000	18,475,000
Diluted	$ 0.19	[3]	$ 0.11	[3]	$ 0.05	[3]	$ 0.46	[3]	$ 0.70	[3]	$ 0.25	[3]	$ 0.40	[3]	$ 0.18	[3]	$ 0.80	$ 1.54	$ (3.10)
Excluded from the calculation of common share equivalents:
Anti-dilutive common share equivalents (in shares)																	225,000	497,000	401,000
Unvested stock options that vest upon achievement of certain market conditions (in shares)																	333,000	333,000	333,000

[1] Net income for our domestic operations for all fiscal quarters of fiscal 2022 includes the adverse pressures on gross profit.

[2] Net income for the fiscal quarter ended September 27, 2020 includes adverse demand pressures from the COVID-19 pandemic. Net income for the fiscal quarter ended June 27, 2021 includes a recovery of non-income taxes in Brazil due to the favorable conclusion of litigation related to excess social program taxes for multiple prior years.

[3] Income per share is computed independently for each of the periods presented.  The sum of the income per share amounts for the fiscal quarters may not equal the total for the fiscal year.

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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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Commitments and Contingencies - Schedule of Unconditional Purchase Obligations (Details) $ in Thousands	Jul. 03, 2022 USD ($)
Unrecorded Unconditional Purchase Obligation [Line Items]
Fiscal 2023	$ 8,270
Fiscal 2024	5,516
Fiscal 2025	5,336
Fiscal 2026	2,714
Fiscal 2027	2,752
Thereafter	194
Purchase Obligations [Member]
Unrecorded Unconditional Purchase Obligation [Line Items]
Fiscal 2023	6,359
Fiscal 2024	5,238
Fiscal 2025	5,067
Fiscal 2026	2,445
Fiscal 2027	2,445
Service Obligations [Member]
Unrecorded Unconditional Purchase Obligation [Line Items]
Fiscal 2023	1,911
Fiscal 2024	278
Fiscal 2025	269
Fiscal 2026	269
Fiscal 2027	307
Thereafter	$ 194

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Commitments and Contingencies - Schedule of Costs Incurred Under Purchases and Services Obligations (Details) - USD ($) $ in Thousands	12 Months Ended
	Jul. 03, 2022	Jun. 27, 2021	Jun. 28, 2020
Commitments And Contingencies Disclosure [Abstract]
Costs for unconditional purchase obligations	$ 24,236	$ 22,689	$ 21,483
Costs for unconditional service obligations	912	967	2,082
Total	$ 25,148	$ 23,656	$ 23,565

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Related Party Transactions - Additional Information (Details) - USD ($)	Jul. 03, 2022	Jun. 27, 2021
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		Jul. 03, 2022	Jun. 27, 2021
Related Party Transaction [Line Items]
Operating lease obligations		$ 8,926
Finance lease obligations	[1]	7,261	$ 8,475
Salem Leasing Corporation
Related Party Transaction [Line Items]
Accounts payable, related parties		432	469
Operating lease obligations		811	1,133
Finance lease obligations		4,933	6,149
Total related party payables		$ 6,176	$ 7,751

[1] Scheduled maturity dates for finance lease obligations range from March 2025 to November 2027

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Related Party Transactions - Schedule of Related Party Transactions (Details) - USD ($) $ in Thousands	12 Months Ended
	Jul. 03, 2022	Jun. 27, 2021	Jun. 28, 2020
Salem Leasing Corporation
Related Party Transaction [Line Items]
Expenses with related party	$ 4,343	$ 4,122	$ 3,798

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Business Segment Information - Additional Information (Details)	12 Months Ended
	Jul. 03, 2022 Segment
Segment Reporting [Abstract]
Number of Reportable Segments	3

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Business Segment Information - Selected Financial Information for Polyester, Nylon, Brazil, Asia and Other Segments (Details) - USD ($) $ in Thousands	3 Months Ended																12 Months Ended
	Jul. 03, 2022		Mar. 27, 2022		Dec. 26, 2021		Sep. 26, 2021		Jun. 27, 2021		Mar. 28, 2021		Dec. 27, 2020		Sep. 27, 2020		Jul. 03, 2022	Jun. 27, 2021	Jun. 28, 2020
Segment Reporting Information [Line Items]
Net sales	$ 217,576	[1]	$ 200,780	[1]	$ 201,410	[1]	$ 195,992	[1]	$ 184,445	[2]	$ 178,866	[2]	$ 162,776	[2]	$ 141,505	[2]	$ 815,758	$ 667,592	$ 606,509
Cost of sales																	735,273	574,098	567,469
Gross profit	$ 18,354	[3]	$ 19,144	[3]	$ 16,890	[3]	$ 26,097	[3]	$ 27,404	[4]	$ 25,595	[4]	$ 25,934	[4]	$ 14,561	[4]	80,485	93,494	39,040
Segment depreciation expense																	22,653	22,369	20,659
Segment Profit																	103,138	115,863	59,699
Americas [Member]
Segment Reporting Information [Line Items]
Net sales																	483,085	386,779	380,138
Cost of sales																	458,617	350,373	368,976
Gross profit																	24,468	36,406	11,162
Segment depreciation expense																	21,153	21,054	19,274
Segment Profit																	45,621	57,460	30,436
Brazil [Member]
Segment Reporting Information [Line Items]
Net sales																	126,066	95,976	73,339
Cost of sales																	98,925	64,281	62,144
Gross profit																	27,141	31,695	11,195
Segment depreciation expense																	1,500	1,315	1,385
Segment Profit																	28,641	33,010	12,580
Asia [Member]
Segment Reporting Information [Line Items]
Net sales																	206,607	184,837	153,032
Cost of sales																	177,731	159,444	136,349
Gross profit																	28,876	25,393	16,683
Segment Profit																	$ 28,876	$ 25,393	$ 16,683

[1] The fiscal quarter ending July 3, 2022 included an additional week of sales of approximately $8,700.

[2] Net sales for the fiscal quarters ended September 27, 2020 and December 27, 2020 includes adverse demand pressures from the COVID-19 pandemic.

[3] Gross profit for our domestic operations for all fiscal quarters of fiscal 2022 includes adverse pressures from (i) higher raw material costs, (ii) rising input costs, and (iii) the weakening of labor productivity.

[4] Gross profit for the fiscal quarter ended September 27, 2020 includes adverse demand pressures from the COVID-19 pandemic.  Gross profit for the fiscal quarters ended December 27, 2020, March 28, 2021, and June 27, 2021 includes the benefit of exceptional performance by the Brazil Segment primarily due to higher conversion margin and market share capture due to agility and responsiveness during demand recovery in Brazil.

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Business Segment Information - Reconciliations of Segment Gross Profit to Consolidated Income (loss) Before Income Taxes (Details) - USD ($) $ in Thousands	3 Months Ended																12 Months Ended
	Jul. 03, 2022	[1]	Mar. 27, 2022	[1]	Dec. 26, 2021	[1]	Sep. 26, 2021	[1]	Jun. 27, 2021	[2]	Mar. 28, 2021	[2]	Dec. 27, 2020	[2]	Sep. 27, 2020	[2]	Jul. 03, 2022	Jun. 27, 2021	Jun. 28, 2020
Segment Reporting Reconciling Item For Operating Profit Loss From Segment To Consolidated [Line Items]
Gross profit	$ 18,354		$ 19,144		$ 16,890		$ 26,097		$ 27,404		$ 25,595		$ 25,934		$ 14,561		$ 80,485	$ 93,494	$ 39,040
Selling, general and administrative expenses																	52,489	51,334	43,814
(Benefit) provision for bad debts																	(445)	(1,316)	1,739
Other operating (income) expense, net																	(158)	4,865	2,308
Operating income (loss)																	28,599	38,611	(8,821)
Interest income																	(1,524)	(603)	(722)
Interest expense																	3,085	3,323	4,779
Equity in (earnings) loss of unconsolidated affiliates																	(605)	(739)	477
Recovery of non-income taxes, net																	815	(9,717)
Gain on sale of investment in unconsolidated affiliate																			(2,284)
Impairment of investment in unconsolidated affiliate																			45,194
Income (loss) before income taxes																	26,828	46,347	(56,265)
Americas [Member]
Segment Reporting Reconciling Item For Operating Profit Loss From Segment To Consolidated [Line Items]
Gross profit																	24,468	36,406	11,162
Brazil [Member]
Segment Reporting Reconciling Item For Operating Profit Loss From Segment To Consolidated [Line Items]
Gross profit																	27,141	31,695	11,195
Asia [Member]
Segment Reporting Reconciling Item For Operating Profit Loss From Segment To Consolidated [Line Items]
Gross profit																	$ 28,876	$ 25,393	$ 16,683

[1] Gross profit for our domestic operations for all fiscal quarters of fiscal 2022 includes adverse pressures from (i) higher raw material costs, (ii) rising input costs, and (iii) the weakening of labor productivity.

[2] Gross profit for the fiscal quarter ended September 27, 2020 includes adverse demand pressures from the COVID-19 pandemic.  Gross profit for the fiscal quarters ended December 27, 2020, March 28, 2021, and June 27, 2021 includes the benefit of exceptional performance by the Brazil Segment primarily due to higher conversion margin and market share capture due to agility and responsiveness during demand recovery in Brazil.

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Business Segment Information - Reconciliation of Segment Depreciation and Amortization Expense to Consolidated Depreciation and Amortization Expense (Details) - USD ($) $ in Thousands	12 Months Ended
	Jul. 03, 2022	Jun. 27, 2021	Jun. 28, 2020
Segment Reporting Other Significant Reconciling Item [Line Items]
Depreciation and amortization expense	$ 26,207	$ 25,528	$ 23,653
Operating Segments [Member]
Segment Reporting Other Significant Reconciling Item [Line Items]
Depreciation and amortization expense	22,653	22,369	20,659
Operating Segments [Member] | Americas [Member]
Segment Reporting Other Significant Reconciling Item [Line Items]
Depreciation and amortization expense	21,153	21,054	19,274
Operating Segments [Member] | Brazil [Member]
Segment Reporting Other Significant Reconciling Item [Line Items]
Depreciation and amortization expense	1,500	1,315	1,385
Other Depreciation and Amortization Expense [Member]
Segment Reporting Other Significant Reconciling Item [Line Items]
Depreciation and amortization expense	$ 3,554	$ 3,159	$ 2,994

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Business Segment Information - Reconciliation of Segment Capital Expenditures to Consolidated Capital Expenditures (Details) - USD ($) $ in Thousands	12 Months Ended
	Jul. 03, 2022	Jun. 27, 2021	Jun. 28, 2020
Segment Reporting Other Significant Reconciling Item [Line Items]
Capital expenditures	$ 39,631	$ 21,178	$ 18,509
Operating Segments [Member]
Segment Reporting Other Significant Reconciling Item [Line Items]
Capital expenditures	39,330	20,180	17,479
Operating Segments [Member] | Americas [Member]
Segment Reporting Other Significant Reconciling Item [Line Items]
Capital expenditures	29,841	16,053	15,087
Operating Segments [Member] | Brazil [Member]
Segment Reporting Other Significant Reconciling Item [Line Items]
Capital expenditures	9,253	3,461	2,332
Operating Segments [Member] | Asia [Member]
Segment Reporting Other Significant Reconciling Item [Line Items]
Capital expenditures	236	666	60
Corporate, Non-Segment [Member]
Segment Reporting Other Significant Reconciling Item [Line Items]
Capital expenditures	$ 301	$ 998	$ 1,030

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Business Segment Information - Reconciliation of Segment Total Assets to Consolidated Total Assets (Details) - USD ($) $ in Thousands	Jul. 03, 2022	Jun. 27, 2021
Segment Reporting Asset Reconciling Item [Line Items]
Total assets	$ 588,718	$ 555,368
Other current assets	18,956	12,364
Property, plant and equipment, net	216,338	201,696
Other operating lease assets	756	1,116
Other non-current assets	8,788	14,625
Investments in unconsolidated affiliates	2,072	2,159
Operating Segments [Member]
Segment Reporting Asset Reconciling Item [Line Items]
Total assets	559,951	481,429
Operating Segments [Member] | Americas [Member]
Segment Reporting Asset Reconciling Item [Line Items]
Total assets	379,898	327,445
Operating Segments [Member] | Brazil [Member]
Segment Reporting Asset Reconciling Item [Line Items]
Total assets	98,731	85,950
Operating Segments [Member] | Asia [Member]
Segment Reporting Asset Reconciling Item [Line Items]
Total assets	81,322	68,034
Corporate, Non-Segment [Member]
Segment Reporting Asset Reconciling Item [Line Items]
Other current assets	5,145	48,587
Property, plant and equipment, net	17,809	21,175
Other non-current assets	2,985	902
Investments in unconsolidated affiliates	$ 2,072	$ 2,159

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Business Segment Information - Geographic Information for Net Sales (Details) - USD ($) $ in Thousands	12 Months Ended
	Jul. 03, 2022	Jun. 27, 2021	Jun. 28, 2020
Revenues From External Customers And Long Lived Assets [Line Items]
Geographic net sales	$ 815,758	$ 667,592	$ 606,509
U.S. [Member]
Revenues From External Customers And Long Lived Assets [Line Items]
Geographic net sales	430,381	341,897	342,350
BRAZIL [Member]
Revenues From External Customers And Long Lived Assets [Line Items]
Geographic net sales	126,066	95,976	73,339
CHINA
Revenues From External Customers And Long Lived Assets [Line Items]
Geographic net sales	185,558	171,261	148,923
All Other Foreign Countries [Member]
Revenues From External Customers And Long Lived Assets [Line Items]
Geographic net sales	73,753	58,458	41,897
Export Sales from US Operations [Member] | U.S. [Member]
Revenues From External Customers And Long Lived Assets [Line Items]
Geographic net sales	$ 74,589	$ 59,055	$ 64,305

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Business Segment Information - Geographic Information for Long-lived Assets (Details) - USD ($) $ in Thousands	Jul. 03, 2022	Jun. 27, 2021	Jun. 28, 2020
Revenues From External Customers And Long Lived Assets [Line Items]
Long-lived assets	$ 233,955	$ 225,093	$ 217,317
U.S. [Member]
Revenues From External Customers And Long Lived Assets [Line Items]
Long-lived assets	196,885	191,733	195,874
BRAZIL [Member]
Revenues From External Customers And Long Lived Assets [Line Items]
Long-lived assets	21,927	21,733	10,805
CHINA
Revenues From External Customers And Long Lived Assets [Line Items]
Long-lived assets	2,211	1,919	779
All Other Foreign Countries [Member]
Revenues From External Customers And Long Lived Assets [Line Items]
Long-lived assets	$ 12,932	$ 9,708	$ 9,859

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Quarterly Results (Unaudited) - Schedule of Quarterly Financial Data (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended																12 Months Ended
	Jul. 03, 2022		Mar. 27, 2022		Dec. 26, 2021		Sep. 26, 2021		Jun. 27, 2021		Mar. 28, 2021		Dec. 27, 2020		Sep. 27, 2020		Jul. 03, 2022	Jun. 27, 2021	Jun. 28, 2020
Quarterly Financial Data [Abstract]
Net sales	$ 217,576	[1]	$ 200,780	[1]	$ 201,410	[1]	$ 195,992	[1]	$ 184,445	[2]	$ 178,866	[2]	$ 162,776	[2]	$ 141,505	[2]	$ 815,758	$ 667,592	$ 606,509
Gross profit	18,354	[3]	19,144	[3]	16,890	[3]	26,097	[3]	27,404	[4]	25,595	[4]	25,934	[4]	14,561	[4]	80,485	93,494	39,040
Net income (loss)	$ 3,496	[5]	$ 2,066	[5]	$ 929	[5]	$ 8,680	[5]	$ 13,419	[6]	$ 4,758	[6]	$ 7,464	[6]	$ 3,432	[6]	$ 15,171	$ 29,073	$ (57,237)
Basic	$ 0.19	[7]	$ 0.11	[7]	$ 0.05	[7]	$ 0.47	[7]	$ 0.73	[7]	$ 0.26	[7]	$ 0.40	[7]	$ 0.19	[7]	$ 0.82	$ 1.57	$ (3.10)
Diluted	$ 0.19	[7]	$ 0.11	[7]	$ 0.05	[7]	$ 0.46	[7]	$ 0.70	[7]	$ 0.25	[7]	$ 0.40	[7]	$ 0.18	[7]	$ 0.80	$ 1.54	$ (3.10)

[1] The fiscal quarter ending July 3, 2022 included an additional week of sales of approximately $8,700.

[2] Net sales for the fiscal quarters ended September 27, 2020 and December 27, 2020 includes adverse demand pressures from the COVID-19 pandemic.

[3] Gross profit for our domestic operations for all fiscal quarters of fiscal 2022 includes adverse pressures from (i) higher raw material costs, (ii) rising input costs, and (iii) the weakening of labor productivity.

[4] Gross profit for the fiscal quarter ended September 27, 2020 includes adverse demand pressures from the COVID-19 pandemic.  Gross profit for the fiscal quarters ended December 27, 2020, March 28, 2021, and June 27, 2021 includes the benefit of exceptional performance by the Brazil Segment primarily due to higher conversion margin and market share capture due to agility and responsiveness during demand recovery in Brazil.

[5] Net income for our domestic operations for all fiscal quarters of fiscal 2022 includes the adverse pressures on gross profit.

[6] Net income for the fiscal quarter ended September 27, 2020 includes adverse demand pressures from the COVID-19 pandemic. Net income for the fiscal quarter ended June 27, 2021 includes a recovery of non-income taxes in Brazil due to the favorable conclusion of litigation related to excess social program taxes for multiple prior years.

[7] Income per share is computed independently for each of the periods presented.  The sum of the income per share amounts for the fiscal quarters may not equal the total for the fiscal year.

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Quarterly Results (Unaudited) - Schedule of Quarterly Financial Data (Details) (Parenthetical)	12 Months Ended
	Jul. 03, 2022 USD ($)
Quarterly Financial Data [Abstract]
Additional week of sales	$ 8,700

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Supplemental Cash Flow Information - Schedule of Cash Payments for Interest and Taxes (Details) - USD ($) $ in Thousands	12 Months Ended
	Jul. 03, 2022	Jun. 27, 2021	Jun. 28, 2020
Supplemental Cash Flow Elements [Abstract]
Interest, net of capitalized interest of $396, $229 and $126, respectively	$ 2,921	$ 3,158	$ 4,682
Income taxes, net of refunds	$ 13,045	$ 8,239	$ 6,131

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Supplemental Cash Flow Information - Schedule of Cash Payments for Interest and Taxes (Details) (Parenthetical) - USD ($) $ in Thousands	12 Months Ended
	Jul. 03, 2022	Jun. 27, 2021	Jun. 28, 2020
Supplemental Cash Flow Elements [Abstract]
Interest capitalized	$ 396	$ 229	$ 126

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Supplemental Cash Flow Information - Additional Information (Details) - USD ($) $ in Thousands	12 Months Ended
	Jul. 03, 2022	Jun. 27, 2021	Jun. 28, 2020
Supplemental Cash Flow Information [Abstract]
Income tax payment related to recovery of non-income taxes	$ 3,749
Capital expenditures incurred but not yet paid	2,456	$ 2,080	$ 630
Non cash activity relating to finance leases	$ 2,493	$ 740	$ 6,301