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