false 0000100726 0000100726 2021-08-04 2021-08-04

 

 

 

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 4, 2021

 

UNIFI, INC.

(Exact name of registrant as specified in its charter)

 

 

New York	1-10542	11-2165495
(State or other jurisdiction of incorporation)	(Commission File Number)	(IRS 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

 

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:

☐	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

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

 

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.  ☐

 

 

 

 

 

---

 

 

Item 2.02.Results of Operations and Financial Condition.

 

On August 4, 2021, the Company issued a press release announcing its operating results for the fiscal fourth quarter and fiscal year ended June 27, 2021, a copy of which is attached hereto as Exhibit 99.1.  

 

Item 7.01.Regulation FD Disclosure.

 

On August 5, 2021, the Company will host a conference call to discuss its operating results for the fiscal fourth quarter and fiscal year ended June 27, 2021.  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.

 

Exhibit No.		Description
99.1		Press Release of Unifi, Inc., dated August 4, 2021.
99.2		Earnings Call Presentation Materials.
104		Cover Page Interactive Data File (embedded within the Inline XBRL document).

 

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.

 

---

 

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.

 

		UNIFI, INC.
Date:  August 4, 2021		By:	/s/ CRAIG A. CREATURO
			Craig A. Creaturo
			Executive Vice President & Chief Financial Officer

 

 

 

Exhibit 99.1

Unifi Announces Robust Fourth Quarter and Fiscal 2021 Results

 

Continued business recovery drives fourth consecutive sequential increase in quarterly net sales,

and provides momentum for fiscal 2022

 

GREENSBORO, N.C., August 4, 2021 – Unifi, Inc. (NYSE: UFI), one of the world’s leading innovators in recycled and synthetic yarns, today released operating results for the fourth fiscal quarter and fiscal year ended June 27, 2021.

 

Fourth Quarter Fiscal 2021 Overview

 

 

Eddie Ingle, Chief Executive Officer of Unifi, said, “Our fourth quarter fiscal 2021 results demonstrated the resilience of our global business model and the value that our innovative solutions bring to our global customer base.  We delivered strong performance across all segments during the period, driven by our team’s commitment to meeting the needs of our customers in what remains a dynamic business environment.  I am proud of everything that we have collectively accomplished despite the challenges of the last several quarters.  The fourth quarter was underpinned by record sales performance in Asia and strong pricing by our Brazil Segment, which achieved a robust gross margin despite pandemic restrictions in April 2021.  The Polyester Segment also benefited from further demand recovery, and momentum for REPREVE^® Fiber products remains strong as our team continues growing

¹ Adjusted EPS, Adjusted EBITDA, and Net Debt are non-GAAP financial measures. The schedules included in this press release reconcile each non-GAAP financial measure to its most directly comparable GAAP financial measure.

 

---

our innovative and sustainable product portfolio.  These fourth quarter results, along with our initiatives in each region of our global model, will serve as a solid foundation to build continued momentum in fiscal 2022 and will help position us for future long-term profitable growth.”

 

Fourth Quarter Fiscal 2021 Compared to Fourth Quarter Fiscal 2020

 

Net sales in the fourth quarter of fiscal 2021 were $184.4 million, compared to $86.1 million in the same period last year.  The increase was primarily driven by robust sales performance in the fourth quarter of fiscal 2021 as compared to the prior year’s fourth quarter, which was adversely impacted by the COVID-19 pandemic.  The Asia Segment achieved its highest quarterly sales volume, the Brazil Segment maintained the strong pricing levels in place throughout much of fiscal 2021, and the Polyester Segment experienced recovery alongside U.S. product demand.  REPREVE^® Fiber products continued to meet the ever-growing demand for sustainable textiles, driving underlying portfolio momentum.

 

Gross profit increased to $27.4 million, from a loss of $9.5 million.   In addition to recovery from the significant adverse impacts of the COVID-19 pandemic on the fourth quarter of fiscal 2020, the increase in gross profit was mainly due to improved sales mix and pricing for the Polyester Segment and the exceptional performance of the Brazil Segment resulting from a better competitive position and higher pricing.

 

Operating income for the fourth quarter of fiscal 2021 was $14.0 million, compared to an operating loss of $20.9 million, primarily due to the increase in gross profit.  The Company’s regional strength and focused execution is further demonstrated when comparing these results to the $5.3 million of operating income in the fourth quarter of fiscal 2019.

 

Net income was $13.4 million, or EPS of $0.70, compared to a net loss of $20.2 million, or $1.10 per share.  Certain non-income tax cases in Brazil concluded favorably, resulting in a significant credit for overpayment of non-income taxes in multiple prior years. The Company recorded the credit and associated interest of $9.7 million in the fourth quarter of fiscal 2021.  Accordingly, on an adjusted basis, EPS was $0.37, compared to a loss of $1.05 per share.  Adjusted EBITDA was $20.4 million, compared to negative $14.0 million.

 

Fiscal 2021 Compared to Fiscal 2020

 

Net sales were $667.6 million for fiscal 2021, compared to $606.5 million, primarily due to the global recovery from the COVID-19 outbreak that stifled both global economic activity and sales growth momentum in late fiscal 2020.  Revenues from REPREVE^® Fiber products represented 37% of consolidated net sales, compared to 31%.  Gross margin was 14.0%, compared to 6.4%.  Operating income was $38.6 million, compared to a loss of $8.8

 

---

million.  Net income was $29.1 million, compared to a net loss of $57.2 million, which includes a $45.2 million impairment expense for the sale of a previously-held minority interest investment.

 

Debt principal was $86.9 million on June 27, 2021, compared to $98.9 million on June 28, 2020.  Cash and cash equivalents increased to $78.3 million on June 27, 2021, up from $75.3 million on June 28, 2020, resulting in Net Debt of $8.6 million versus $23.6 million, respectively.

 

Outlook

Looking forward, the Company expects demand levels and trends across the business to remain healthy during fiscal 2022.  The Company’s outlook for the September 2021 quarter includes the following expectations:

 

 

For fiscal 2022, a 53-week fiscal year ending on July 3, 2022, the Company expects to maintain much of the underlying business momentum that was captured and restored during fiscal 2021, while navigating the near-term inflationary pressures.  Though the Asia Segment and the Polyester Segment are expected to generate modest profitability growth over fiscal 2021, the exceptional performance of the Brazil Segment is not expected to continue at the levels achieved in fiscal 2021.  Accordingly, the Company expects the following:

 

Ingle concluded, “Following the pandemic, many customers began accelerating their commitment to recycled content products.  In fact, we have seen REPREVE^® hang tags with our co-branding partners increase 60% year-

 

---

over-year.  With consumer demand for sustainable product offerings more popular now than ever before, we continue to believe our innovative and sustainable solutions will be the growth engines that will allow us to meet the evolving needs of our customers.  As we celebrate Unifi’s 50-year anniversary, I am proud of what our team has accomplished and how we have positioned our businesses.  We remain confident in the growth potential of REPREVE^® and our innovative portfolio and expect to reach an even more diverse array of end markets, as we continue to pursue long-term value for our shareholders.”

 

 

Fourth Quarter Fiscal 2021 Earnings Conference Call

 

The Company will provide additional commentary regarding its fourth quarter and fiscal 2021 results and other developments during its earnings conference call on August 5, 2021, 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.

###

 

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. Through REPREVE^®, one of Unifi's proprietary technologies and the global leader in branded recycled performance fibers, Unifi has transformed more than 25 billion plastic bottles into recycled fiber for new apparel, footwear, home goods and other consumer products. The Company's proprietary PROFIBER™ technologies offer increased performance, comfort and style advantages, enabling customers to develop products that perform, look and feel better. Unifi continually innovates technologies to meet consumer needs in moisture management, thermal regulation, antimicrobial protection, UV protection, stretch, water resistance 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 of Reported Results to Adjusted Results to Follow

 

---

 

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

(In thousands, except per share amounts)

 

 

---

 

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)

(In thousands)

 

 

---

 

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

(In thousands)

 

 

 

---

 

BUSINESS SEGMENT INFORMATION

(Unaudited)

(In thousands)

 

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

 

 

 

Gross profit (loss) details for each reportable segment of the Company are as follows:

 

 

 

---

 

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 (loss) to EBITDA and Adjusted EBITDA are set forth below. In the prior fiscal year, the Company had owned a 34% equity interest in Parkdale America, LLC, referred to as “PAL.”

 

 

 

 

 

 

 

 

 

 

 

 

---

 

RECONCILIATIONS OF REPORTED RESULTS TO ADJUSTED RESULTS (CONTINUED)

(Unaudited)

(In thousands, except per share amounts)

 

 

Adjusted Net Income (Loss) and Adjusted EPS

 

The tables below set forth reconciliations of (i) income (loss) before income taxes (“Pre-tax Income (Loss)”), provision (benefit) for income taxes (“Tax Impact”), and net income (loss) (“Net Income (Loss)”) to Adjusted Net Income (Loss) and (ii) Diluted Earnings Per Share (“Diluted EPS”) to Adjusted EPS.  Rounding may impact certain of the below calculations.

 

 

 

 

 

Net Debt

 

Reconciliations of Net Debt are as follows:

 

 

Cash and cash equivalents

At June 27, 2021 and June 28, 2020, the Company’s domestic operations held approximately 48% and 54% of consolidated cash and cash equivalents, respectively.

 

---

REPREVE^® Fiber

REPREVE^® Fiber represents the Company's collection of fiber products on its recycled platform, with or without added technologies. Beginning in the fourth quarter of fiscal 2021, as a result of its annual review of products meeting the REPREVE® Fiber definition, the Company began including certain product sales in the Asia Segment that were previously excluded from the REPREVE® Fiber sales metric. Quarters 1, 2, and 3 of fiscal 2021 have been adjusted to reflect such sales, which resulted in a change of not more than 1% for any quarter.

 

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 (Loss) Income, Adjusted EPS and Net Debt (together, 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.

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. 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 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.

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 investors 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. Investors should compensate for these limitations by relying primarily on our GAAP results and using these measures only as supplemental information.

 

---

 

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 disruption of operations, global demand, or financial performance as a result of catastrophic or extraordinary events, including epidemics or pandemics such as the recent strain of coronavirus; the success of Unifi’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 our brands; employee relations; the ability to attract, retain and motivate key employees; the impact of 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; the operating performance of joint ventures and other equity method 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 27, 2021 (Unaudited Results) August 4, 2021 Conference Call Presentation 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 disruption of operations, global demand, or financial performance as a result of catastrophic or extraordinary events, including epidemics or pandemics such as the recent strain of coronavirus; 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 our brands; employee relations; the ability to attract, retain and motivate key employees; the impact of 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; the operating performance of joint ventures and other equity method 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 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, Adjusted Working Capital and Net Debt (collectively, the “non-GAAP financial measures”). • EBITDA represents Net income (loss) before net interest expense, income tax expense, and depreciation and amortization expense. • Adjusted EBITDA represents EBITDA adjusted to exclude equity in loss 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 (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 which are 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 represents receivables plus inventory and other current assets, less accounts payable and other current liabilities, which is an indicator of the Company’s production efficiency and ability to manage its inventory and receivables. • Net Debt represents debt principal less cash and cash equivalents. 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. Equity in loss of PAL is excluded from Adjusted EBITDA because such results 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. Management uses Adjusted Working Capital as an indicator of the Company’s production efficiency and ability to manage inventory and receivables. In the first quarter of fiscal 2019, in connection with changes to balance sheet presentation required by the adoption of new revenue recognition guidance, the Company updated the definition of Adjusted Working Capital to include Other current assets for current and historical calculations of the non-GAAP financial measure. Other current assets includes amounts capitalized for future conversion into inventory or receivables (e.g., vendor deposits and contract assets), and management believes that its inclusion in the definition of Adjusted Working Capital improves the understanding of the Company’s capital that is supporting production and sales activity. 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. 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. 2

3 Q4 FISCAL 2021 CEO COMMENTARY Strength across all segments provides momentum for fiscal 2022 Revenue performance at the high end of expectations Gross profit performance exceeded expectations Supply chain, raw material, selling prices, and customer service remain in focus Recycled input costs have risen significantly in calendar 2021, and the recent cost increases will place pressure on gross profit in the September 2021 quarter Selling price adjustments are in process to offset rising raw material costs Balance sheet remains strong and provides a springboard for further profitable growth Positive progress on existing trade actions, as U.S. Department of Commerce recently announced preliminary duty rates against subject countries; investigations expected to conclude by January 2022 Momentum continues for new products, customer adoptions, and co-branding, as REPREVE® Fiber products comprised 38% of consolidated net sales, up from 28% in Q4 fiscal 2020 Net sales (millions)

4 REPREVE® FIBER SALES AS A % OF NET SALES REPREVE® Fiber represents our collection of fiber products on our recycled platform, with or without added technologies. Annual Quarterly * Beginning in the fourth quarter of fiscal 2021, as a result of its annual review of products meeting the REPREVE® Fiber definition, the Company began including certain product sales in the Asia Segment that were previously excluded from the REPREVE® Fiber sales metric. Quarters 1, 2, and 3 of fiscal 2021 have been adjusted to reflect such sales, which resulted in a change of not more than 1% for any quarter. * * *

NET SALES OVERVIEW Three-Month Comparison (Q4 FY20 vs. Q4 FY21) 1 Approximates the impact of foreign currency translation nm – Not meaningful Note: The “Prior Period” ended on June 28, 2020. The “Current Period” ended on June 27, 2021. The Prior Period and the Current Period each contained 13 fiscal weeks. 5 (dollars in thousands) 1

6 nm – Not meaningful Note: The “Prior Period” ended on June 28, 2020. The “Current Period” ended on June 27, 2021. The Prior Period and the Current Period each contained 13 fiscal weeks. Three-Month Comparison (Q4 FY20 vs. Q4 FY21) (dollars in thousands) GROSS PROFIT OVERVIEW

NET SALES OVERVIEW Twelve-Month Comparison (YTD FY20 vs. YTD FY21) 1 Approximates the impact of foreign currency translation nm – Not meaningful Note: The “Prior Period” ended on June 28, 2020. The “Current Period” ended on June 27, 2021. The Prior Period and the Current Period each contained 52 fiscal weeks. 7 (dollars in thousands) 1

8 nm – Not meaningful Note: The “Prior Period” ended on June 28, 2020. The “Current Period” ended on June 27, 2021. The Prior Period and the Current Period each contained 52 fiscal weeks. (dollars in thousands) GROSS PROFIT OVERVIEW Twelve-Month Comparison (YTD FY20 vs. YTD FY21)

NET SALES OVERVIEW Three-Month Comparison (Q4 FY19 vs. Q4 FY21) 1 Approximates the impact of foreign currency translation nm – Not meaningful Note: The “Prior Period” ended on June 30, 2019. The “Current Period” ended on June 27, 2021. The Prior Period and the Current Period each contained 13 fiscal weeks. 9 (dollars in thousands) 1

10 nm – Not meaningful Note: The “Prior Period” ended on June 30, 2019. The “Current Period” ended on June 27, 2021. The Prior Period and the Current Period each contained 13 fiscal weeks. Three-Month Comparison (Q4 FY19 vs. Q4 FY21) (dollars in thousands) GROSS PROFIT OVERVIEW

BALANCE SHEET HIGHLIGHTS (dollars in millions) Continued balance sheet diligence leads to highly opportunistic leverage position Capital allocation strategy remains balanced and focused on: Organic growth New texturing technology Acquisitions FY 2021: Two bolt-on acquisitions Share repurchases FY 2020: $2.0 million Debt reduction FY 2020 and FY 2021 11

Building Momentum For Long-Term Growth FOR THE GOOD OF TOMORROW 12 For fiscal 2022, a 53-week fiscal year ending on July 3, 2022, the Company expects to maintain much of the underlying business momentum that was captured and restored during fiscal 2021, while navigating the near-term inflationary pressures. Though the Asia Segment and the Polyester Segment are expected to generate modest profitability growth over fiscal 2021, the exceptional performance of the Brazil Segment is not expected to continue at the levels achieved in fiscal 2021. Accordingly, the Company expects the following: Sales volume and REPREVE® Fiber sales growth driving a net sales increase of 10% or more from the level achieved in fiscal 2021; Adjusted EBITDA to be broadly consistent with the fiscal 2021 level; An effective tax rate between 35% and 40%; and Capital expenditures of approximately $40.0 million to $45.0 million, as the Company continues its plan to invest in new yarn texturing machinery within its Americas facilities. Such capital expenditure levels will be funded by cash on-hand and available financing arrangements and are inclusive of approximately $10.0 million to $12.0 million of routine annual maintenance.

Thank You! 13