UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 8-K

 

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the

Securities Exchange Act of 1934

 

Date of Report (Date of earliest event reported): August 2, 2018

 

UNIFI, INC.

(Exact name of registrant as specified in its charter)

 

 

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

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

 

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b‑2 of this chapter).  

 

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.  ☐

 

 

 

 

 

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Item 2.02.Results of Operations and Financial Condition.

 

On August 2, 2018, Unifi, Inc. (the “Company”) issued a press release announcing its operating results for its fiscal fourth quarter and fiscal year ended June 24, 2018, a copy of which is attached hereto as Exhibit 99.1.  

 

Item 7.01.Regulation FD Disclosure.

 

On August 2, 2018, the Company will host a conference call to discuss its operating results for its fiscal fourth quarter and fiscal year ended June 24, 2018.  A copy of the materials prepared for use by management during this conference call is attached hereto as Exhibit 99.2.  

 

Item 9.01.Financial Statements and Exhibits.

(d) Exhibits.

 

 

The information in this Current Report on Form 8-K, including the exhibits attached hereto, is being furnished and shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section, nor shall it be deemed to be incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in any such filing.

 

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

 

 

 

 

 

 

 

Exhibit 99.1

Unifi Announces Fourth Quarter and Fiscal 2018 Results

 

 

Global momentum of premium value-added offerings drives fifth consecutive quarter of revenue growth;

raw material cost pressures continue

 

 

GREENSBORO, N.C., August 2, 2018 – Unifi, Inc. (NYSE: UFI), one of the world’s leading innovators in recycled and synthetic yarns, today released operating results for the fourth quarter and fiscal year ended June 24, 2018.

 

 

Fourth Quarter 2018 Highlights

 

“Our teams across the globe delivered strong performance during the fourth quarter and finished fiscal 2018 with 5% top-line growth,” said Kevin Hall, Chairman and CEO of Unifi. “While navigating ongoing pressure from higher raw material costs, we capitalized on increased demand from brands and retailers for our innovative PVA offerings, including REPREVE^®. We also are encouraged that gross profit and operating income for the fourth quarter improved compared to the third quarter.”

Hall continued, “With our core strategy focused on innovation and sustainability, we are excited about the opportunities that remain ahead of us. Building strategic partnerships and deploying our resources efficiently for commercial expansion remain critical to achieving our long-term goals.”

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Fourth Quarter Fiscal 2018 Operational Review

 

Net sales were $181.3 million for the fourth quarter of fiscal 2018, compared to $171.3 million for the fourth quarter of fiscal 2017.  Revenue growth was driven by an overall increase in sales volume, led by worldwide PVA product sales.

 

Gross margin was 13.2% for the fourth quarter of fiscal 2018, compared to 16.0% for the fourth quarter of fiscal 2017. The decrease in gross margin was driven primarily by higher raw material costs and a less favorable sales mix, in combination with a highly competitive domestic environment. Gross margin increased more than 300 basis points from the third quarter of fiscal 2018, as raw material-related pricing adjustments continued to take hold in the fourth quarter.

 

Operating income declined to $9.3 million for the fourth quarter of fiscal 2018, from $13.0 million for the fourth quarter of fiscal 2017. The decline in operating income was primarily due to a reduction in gross profit.  SG&A expenses in the quarter increased $1.2 million from the fourth quarter of fiscal 2017 as a result of investments in the Company’s expanding international operations and domestic commercial capabilities.  Foreign currency gains in the quarter totaled $0.8 million, compared to losses of $0.2 million in the fourth quarter of fiscal 2017.  

 

Net income was $10.8 million for the fourth quarter of fiscal 2018, compared to $9.7 million for the fourth quarter of fiscal 2017. Net income for the fourth quarter of fiscal 2018 was adversely impacted by comparatively higher operating expenses, but benefited from a significantly lower effective tax rate. Diluted EPS was $0.58 for the fourth quarter of fiscal 2018 and $0.52 for the fourth quarter of fiscal 2017.

 

Adjusted Net Income was $7.4 million for the fourth quarter of fiscal 2018, compared to $9.7 million for the fourth quarter of fiscal 2017.  Adjusted EPS was $0.39 for the fourth quarter of fiscal 2018, due to the reversal of an uncertain tax position, and $0.52 for the fourth quarter of fiscal 2017.

 

Adjusted EBITDA was $15.3 million for the fourth quarter of fiscal 2018, compared to $18.8 million for the fourth quarter of fiscal 2017. The decrease in Adjusted EBITDA resulted primarily from lower gross profit and incremental SG&A expenses, but benefited from foreign exchange gains.

 

Adjusted Net Income, Adjusted EPS and Adjusted EBITDA are non-GAAP financial measures. The schedules included in this press release reconcile each non-GAAP financial measure to the most directly comparable GAAP financial measure.

 

 

 

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Net debt (debt principal less cash and cash equivalents) was $86.3 million at June 24, 2018, compared to $94.0 million at June 25, 2017, as cash and cash equivalents grew from $35.4 million at June 25, 2017 to $44.9 million at June 24, 2018.

 

Fiscal 2018 Operational Review

 

Net sales for fiscal 2018 increased 4.9% to $678.9 million, compared to $647.3 million for fiscal 2017, due primarily to increased global sales of PVA products. Gross margin for fiscal 2018 was 12.7%, compared to 14.5% for fiscal 2017, due primarily to higher raw material costs and a less favorable sales mix in a highly competitive domestic environment. Operating income for fiscal 2018 was $28.8 million, compared to $43.8 million for fiscal 2017. Operating income was adversely impacted primarily by a sustained rise in raw material costs throughout much of fiscal 2018, higher SG&A expenses and foreign currency losses.

 

Net income for fiscal 2018 was $31.7 million, compared to $32.9 million for fiscal 2017.  Net income for fiscal 2018 included $7.2 million of tax benefits due to the reversal of a valuation allowance on certain historical net operating losses and the reversal of an uncertain tax position stemming from fiscal 2015, offset by higher operating expenses and foreign currency losses. Net income for fiscal 2017 included a loss on sale of business of $1.7 million, higher research and development tax credits and foreign currency gains. For fiscal 2018, Diluted EPS and Adjusted EPS were $1.70 and $1.32, respectively. For fiscal 2017, Diluted EPS and Adjusted EPS were $1.78 and $1.87, respectively.  Adjusted EBITDA for fiscal 2018 was $52.3 million, compared to $65.6 million for fiscal 2017, driven primarily by higher raw material costs and other operating expenses.

 

Fiscal 2019 Outlook

 

Fiscal 2019 will contain 53 fiscal weeks, with the first quarter ending September 30, 2018 containing 14 fiscal weeks. For fiscal 2019, the Company anticipates:

 

 

“Fiscal 2018 marked a challenging, but promising year, as the strategic investments that we made across the business materialized into accelerated top-line performance, which we believe will be sustainable into fiscal 2019,” said Kevin Hall, Chairman and CEO of Unifi.  “While higher raw material costs significantly pressured our margins

 

 

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and profitability in fiscal 2018, we began to see a positive impact in the fourth quarter from recent pricing adjustments. As we look to fiscal 2019, we plan for improvement in all our major performance metrics and continued progress against our strategic initiatives and long-term profitability.”

 

Fourth Quarter Fiscal 2018 Earnings Conference Call

 

The Company will provide additional commentary regarding its fourth quarter and fiscal 2018 results and other developments during its earnings conference call on August 2, 2018, at 8:30 a.m. Eastern Time. The call can be accessed via a live audio webcast on the Company’s website at http://investor.unifi.com. Additional supporting materials and information related to the call will also be available on the Company’s website.

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About Unifi:

Unifi, Inc. (NYSE: UFI) is a global textile solutions provider and one of the world’s leading innovators in manufacturing synthetic and recycled performance fibers. The Company’s proprietary technologies offer increased performance, comfort and style advantages, enabling customers to develop products that perform, look and feel better. Through REPREVE^®, one of Unifi’s proprietary technologies and the global leader in branded recycled performance fibers, Unifi has transformed more than 12 billion plastic bottles into recycled fiber for new clothing, shoes, home goods and other consumer products. Unifi continually innovates to meet consumer needs in moisture management, thermal regulation, antimicrobial, UV protection, stretch, water repellency and enhanced softness. Unifi collaborates with many of the world’s most influential brands in the sports apparel, fashion, home, automotive and other industries. For more information about Unifi, visit www.Unifi.com.

Contact information:

Alpha IR Group

312-445-2870

UFI@alpha-ir.com

Financial Statements, Business Segment Information and Reconciliations to Adjusted Results to Follow

 

 

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CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)

(In thousands)

 

 

 

 

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CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(Unaudited)

(In thousands, except per share amounts)

 

 

 

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CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

(In thousands)

 

 

 

 

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BUSINESS SEGMENT INFORMATION

(Unaudited)

(Dollars in thousands)

 

Net sales details for each reportable segment of the Company are as follows:

 

 

 

 

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RECONCILIATIONS OF REPORTED RESULTS TO ADJUSTED RESULTS

(Unaudited)

(In thousands)

 

EBITDA and Adjusted EBITDA

 

The reconciliations of the amounts reported under U.S. generally accepted accounting principles (“GAAP”) for Net income attributable to Unifi, Inc. to EBITDA and Adjusted EBITDA are as follows:

 

 

 

Note: Amounts presented in the reconciliations above may not be consistent with amounts included in the Company’s condensed consolidated financial statements. Any such inconsistencies are insignificant and are integral to the reconciliations.

 

 

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RECONCILIATIONS OF REPORTED RESULTS TO ADJUSTED RESULTS (CONTINUED)

(Unaudited)

(In thousands, except per share amounts)

 

Adjusted Net Income and Adjusted EPS

 

In fiscal 2018, the Company discontinued calculating current period and historical Adjusted EPS using basic weighted average common shares outstanding and began calculating Adjusted EPS using diluted weighted average common shares outstanding.

 

The tables below set forth reconciliations of (i) Income before income taxes (“Pre-tax Income”), (Benefit) provision for income taxes (“Tax Impact”) and Net income attributable to Unifi, Inc. (“Net Income”) to Adjusted Net Income and (ii) Diluted Earnings Per Share (“Diluted EPS”) to Adjusted EPS.

 

 

 

 

 

 

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Non-GAAP Financial Measures

Certain non-GAAP financial measures included herein are designed to complement the financial information presented in accordance with GAAP. These non-GAAP financial measures include Earnings Before Interest, Taxes, Depreciation and Amortization (“EBITDA”), Adjusted EBITDA, Adjusted Net Income and Adjusted EPS (collectively, the “non-GAAP financial measures”).

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.

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 (a) items directly related to our asset base (primarily depreciation and amortization) and (b) items 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 earnings of PAL is excluded from Adjusted EBITDA because such earnings do not reflect our operating performance.

Management uses Adjusted Net Income 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.

Historically, the non-GAAP financial measures aimed to exclude the impact of the non-controlling interest in Repreve Renewables, LLC, while the consolidated amounts for such entity were required to be included in UNIFI’s financial amounts reported under GAAP.

In evaluating non-GAAP financial measures, investors should be aware that, in the future, we may incur expenses similar to the adjustments included herein. Our presentation of non-GAAP financial measures should not be construed as indicating that our future results will be unaffected by unusual or non-recurring items. Each of our non-GAAP financial measures has limitations as an analytical tool, and you should not consider it in isolation or as a substitute for analysis of our results or liquidity measures as reported under GAAP. Some of these limitations are (i) it is not adjusted for all non-cash income or expense items that are reflected in our statements of cash flows; (ii) it does not reflect the impact of earnings or charges resulting from matters we consider not indicative of our ongoing operations; (iii) it does not reflect changes in, or cash requirements for, our working capital needs; (iv) it does not reflect the cash requirements necessary to make payments on our debt; (v) it does not reflect our future requirements for capital expenditures or contractual commitments; (vi) it does not reflect limitations on or costs related to transferring earnings from our subsidiaries to us; and (vii) other companies in our industry may calculate this measure differently than we do, limiting its usefulness as a comparative measure.

Because of these limitations, these non-GAAP financial measures should not be considered as a measure of discretionary cash available to us to invest in the growth of our business or as a measure of cash that will be available to us to meet our obligations, including those under our outstanding debt obligations. You should compensate for these limitations by relying primarily on our GAAP results and using these measures only as supplemental information.

 

 

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Cautionary Statement on Forward-Looking Statements

Certain statements included herein contain forward-looking statements within the meaning of federal securities laws about the financial condition and results of operations of UNIFI that are based on management’s beliefs, assumptions and expectations about our future economic performance, considering the information currently available to management.  An example of such forward-looking statements include, among others, guidance pertaining to our financial outlook. 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 UNIFI competes, including economic and political factors over which UNIFI has no control; changes in consumer spending, customer preferences, fashion trends and end-uses for products; the financial condition of UNIFI’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 our facilities; the success of UNIFI’s strategic business initiatives; volatility of financial and credit markets; the ability to service indebtedness and fund capital expenditures and strategic business initiatives; 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 our brands; employee relations; the ability to attract, retain and motivate employees; the impact of environmental, health and safety regulations; the operating performance of joint ventures and other equity investments; and the accurate financial reporting of information from equity method investees.

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 UNIFI.  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. The above and other risks and uncertainties are described in UNIFI’s most recent annual report on Form 10-K, and additional risks or uncertainties may be described from time to time in other reports filed by UNIFI with the Securities and Exchange Commission pursuant to the Securities Exchange Act of 1934, as amended.

-end-

 

 

 

Fourth Quarter and Fiscal Year Ended June 24, 2018 (Unaudited Results) Conference Call Presentation August 2, 2018 Exhibit 99.2

  Cautionary Statement on Forward-Looking Statements Certain statements included herein contain forward-looking statements within the meaning of federal securities laws about the financial condition and results of operations of the Company that are based on management’s beliefs, assumptions and expectations about our future economic performance, considering the information currently available to management. An example of such forward-looking statements include, among others, guidance pertaining to our financial outlook. 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 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 our facilities; the success of the Company’s strategic business initiatives; volatility of financial and credit markets; the ability to service indebtedness and fund capital expenditures and strategic business initiatives; 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 our brands; employee relations; the ability to attract, retain and motivate employees; the impact of environmental, health and safety regulations; the operating performance of joint ventures and other equity investments; and the accurate financial reporting of information from equity method investees. 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. The above and other risks and uncertainties are described in the Company’s most recent annual report on Form 10-K, and additional risks or uncertainties may be described from time to time in other reports filed by the Company with the Securities and Exchange Commission pursuant to the Securities Exchange Act of 1934, as amended. Non-GAAP Financial Measures Certain non-GAAP financial measures included herein are designed to complement the financial information presented in accordance with GAAP. These non-GAAP financial measures include Earnings Before Interest, Taxes, Depreciation and Amortization (“EBITDA”), Adjusted EBITDA, Adjusted Net Income, Adjusted EPS and Adjusted Working Capital (collectively, the “non-GAAP financial measures”). • EBITDA represents Net income attributable to Unifi, Inc. before net interest expense, income tax expense, and depreciation and amortization expense. • Adjusted EBITDA represents EBITDA adjusted to exclude equity in earnings of Parkdale America, LLC (“PAL”) and, from time to time, certain other adjustments necessary to understand and compare the underlying results of the Company. • Adjusted Net Income represents Net income attributable to Unifi, Inc. calculated under GAAP, adjusted to exclude the approximate after-tax impact of certain income or expense items (as well as specific impacts to the provision for income taxes) necessary to understand and compare the underlying results of the Company. Adjusted Net Income excludes certain amounts which management believes do not reflect the ongoing operations and performance of the Company. • Adjusted EPS represents Adjusted Net Income divided by the Company’s diluted weighted average common shares outstanding. • Adjusted Working Capital represents receivables plus inventory, less accounts payable and accrued expenses, which is an indicator of the Company’s production efficiency and ability to manage its inventory and receivables. 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. The Company may, from time to time, modify the amounts used to determine its non-GAAP financial measures. We believe that these non-GAAP financial measures better reflect the Company’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 (a) items directly related to our asset base (primarily depreciation and amortization) and (b) items 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 earnings of PAL is excluded from Adjusted EBITDA because such earnings do not reflect our operating performance. Management uses Adjusted Net Income 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. Historically, the non-GAAP financial measures aimed to exclude the impact of the non-controlling interest in Repreve Renewables, LLC, while the consolidated amounts for such entity were required to be included in the Company’s financial amounts reported under GAAP. In evaluating non-GAAP financial measures, investors should be aware that, in the future, we may incur expenses similar to the adjustments included herein. Our presentation of non-GAAP financial measures should not be construed as indicating that our future results will be unaffected by unusual or non-recurring items. Each of our non-GAAP financial measures has limitations as an analytical tool, and you should not consider it in isolation or as a substitute for analysis of our results or liquidity measures as reported under GAAP. Some of these limitations are (i) it is not adjusted for all non-cash income or expense items that are reflected in our statements of cash flows; (ii) it does not reflect the impact of earnings or charges resulting from matters we consider not indicative of our ongoing operations; (iii) it does not reflect changes in, or cash requirements for, our working capital needs; (iv) it does not reflect the cash requirements necessary to make payments on our debt; (v) it does not reflect our future requirements for capital expenditures or contractual commitments; (vi) it does not reflect limitations on or costs related to transferring earnings from our subsidiaries to us; and (vii) other companies in our industry may calculate this measure differently than we do, limiting its usefulness as a comparative measure. Because of these limitations, these non-GAAP financial measures should not be considered as a measure of discretionary cash available to us to invest in the growth of our business or as a measure of cash that will be available to us to meet our obligations, including those under our outstanding debt obligations. You should compensate for these limitations by relying primarily on our GAAP results and using these measures only as supplemental information. Non-GAAP reconciliations are included in the Appendix of this presentation, except for the reconciliations of Working Capital and Adjusted Working Capital which are set forth on slide 6.

Consolidated Net Income and Diluted EPS - Q4 FY17 to Q4 FY18 When comparing Net income attributable to Unifi, Inc. and Diluted EPS from Q4 FY17 to Q4 FY18 using the Q4 FY17 effective tax rate of 31.3%: 1 Approximates the change in consolidated revenues utilizing the prior year gross margin rate. 2 Approximates the change in consolidated gross margin rate. 3 Approximates the change in consolidated operating expenses. (a) Approximates the increase in consolidated selling, general and administrative expenses. (b) Approximates the impact of a foreign currency gain recorded in Q4 FY17 and a foreign currency loss recorded in Q4 FY18. (c) Indicates the impact of other insignificant offsetting operating expense items. 4 Approximates the change in the Company’s share of earnings from unconsolidated affiliates. 5 Approximates the impact of a reversal of a specific uncertain tax position related to foreign exchange income recognized in fiscal 2015. 6 Approximates the impact of a lower effective tax rate, partially offset by an increase in interest expense. (A) Approximates the Diluted EPS impact of the noted item. Note: The above graphic is intended to depict the approximate impact on Net income attributable to Unifi, Inc. and Diluted EPS of certain items identified by management. This representation is not intended to depict amounts calculated under GAAP. (dollars in millions, except per share amounts) SG&A($0.8) FX $0.6 Other $0.0 Total($0.2) (A) $0.52 +$0.06 ($0.19) ($0.01) ($0.01) +$0.19 +$0.02 $0.58 (A) 1 2 4 5 3 6

Net Sales and Gross Profit Highlights1 1 Excluding the “All Other” category; see reconciliations on slide 11. 2 Approximates the impact of foreign currency translation. Note: The “Prior Period” ended on June 25, 2017. The “Current Period” ended on June 24, 2018. (dollars in thousands) Three-Month Comparison (Q4 FY2017 vs. Q4 FY2018) * The Polyester Segment includes operations in the United States and El Salvador. The Nylon Segment includes operations in the United States and Colombia. The International Segment includes operations in Asia and Brazil.

Equity Affiliates Highlights (dollars in thousands) 1 Equity affiliate distributions are accounted for in the balance sheet, as a reduction of the investment balance in the corresponding equity affiliate, and such distributions are not impactful to the consolidated statement of income.

Balance Sheet Highlights Net Debt and Total Liquidity (dollars in thousands) Working Capital and Adjusted Working Capital

Fiscal 2019 Guidance For fiscal 2019(1), the Company anticipates: Metric Guidance Net sales Mid-single-digit percentage growth from fiscal 2018 Operating income Mid- to high-single-digit percentage growth from fiscal 2018 Adjusted EBITDA Mid- to high-single-digit percentage growth from fiscal 2018 Capital expenditures $25 million Effective tax rate(2) Low 30% range Fiscal 2019 will contain 53 fiscal weeks, with the additional week occurring in the first quarter ending September 30, 2018. Effective tax rate guidance is subject to adjustment in light of pending interpretations of the December 2017 federal tax reform legislation.

APPENDIX

Non-GAAP Reconciliations (dollars in thousands) EBITDA and Adjusted EBITDA

Non-GAAP Reconciliations (Continued) (dollars in thousands) Adjusted Net Income and Adjusted EPS

Other Reconciliations (dollars in thousands) Consolidated Net Sales Consolidated Gross Profit 1 As presented on slide 4.

Thank You!