UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
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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:
Securities registered pursuant to Section 12(b) of the Act:
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Trading |
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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 May 8, 2024, the Company issued a press release announcing its operating results for the fiscal third quarter ended March 31, 2024, a copy of which is attached hereto as Exhibit 99.1.
Item 7.01. Regulation FD Disclosure.
On May 9, 2024, the Company will host a conference call to discuss its operating results for the fiscal third quarter ended March 31, 2024. 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. |
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Description |
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99.1 |
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99.2 |
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104 |
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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.
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UNIFI, INC. |
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Date: |
May 8, 2024 |
By: |
/s/ ANDREW J. EAKER |
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Andrew J. Eaker |
Exhibit 99.1
UNIFI®, Makers of REPREVE®, Announces Third Quarter Fiscal 2024 Results
Recently implemented Profitability Improvement Plan enhances financial performance during the third quarter
Business remains well positioned for apparel demand recovery
GREENSBORO, N.C., May 8, 2024 – Unifi, Inc. (NYSE: UFI) (together with its consolidated subsidiaries, “UNIFI”), makers of REPREVE and one of the world’s leading innovators in recycled and synthetic yarns, today released operating results for the third fiscal quarter ended March 31, 2024.
Third Quarter Fiscal 2024 Overview
Eddie Ingle, Chief Executive Officer of Unifi, Inc., stated, “Our top-line results exhibit substantial improvement over the previous quarter and we delivered our second consecutive quarter of sequential gross profit improvement, giving us confidence that the apparel inventory destocking period reached a bottom and demand is beginning to return to more normalized levels. To help sustain this momentum, we continue to execute our recently implemented Profitability Improvement Plan, which has helped lower our expenses and improve operational efficiencies. We are encouraged by the initial successes of our Plan, such as our ability to gain additional market share from our competitors in many of the key markets that we currently operate, which will help drive meaningful increases in volume for UNIFI over the next several quarters. We remain focused on diligently managing our operations, maintaining a healthy balance sheet, supporting future growth and the opportunity to expand our beyond apparel initiatives, and increasing our REPREVE Fiber business.”
Third Quarter Fiscal 2024 Compared to Third Quarter Fiscal 2023
Net sales decreased to $149.0 million from $156.7 million, primarily due to lower average selling prices associated with sales mix changes and lower raw material costs, particularly in the Americas Segment, which offset higher sales volumes for each segment. Competitive market share gains helped secure additional sales volumes in both the Americas Segment and the Brazil Segment.
Gross profit was $4.8 million compared to $9.7 million. Americas Segment profitability decreased by $6.7 million, primarily due to the timing and extent of comparable holiday shutdown periods. Brazil Segment gross profit improved by $1.5 million, primarily due to pricing and volume gains. Asia Segment gross profit improved slightly.
Operating loss was $6.9 million compared to $2.7 million, following the decrease in gross profit. Net loss was $10.3 million compared to $5.2 million. Adjusted EPS* was ($0.57) and Adjusted EBITDA* was ($0.8) million, compared to ($0.25) and $5.0 million, respectively.
Fourth Quarter Fiscal 2024 Outlook
UNIFI expects the following fourth quarter fiscal 2024 results:
Ingle concluded, “As the benefits from our cost reset and commercial improvements continue to materialize, we anticipate that we will see improved quarterly net sales and earnings results on a sequential basis. We remain confident in our position as the partner of choice to brands and customers across the globe. As we look ahead to the fourth quarter and fiscal 2025, we will continue to implement cost-saving measures and invest in areas of our business that we believe will not only drive growth for UNIFI, but also deliver value for our stakeholders.”
* Adjusted EBITDA, Adjusted Net Loss, and Adjusted EPS 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.
** Guidance provided is a non-GAAP figure presented on an adjusted basis. For further details, see the non-GAAP financial measures information presented in the schedules included in this press release.
Third Quarter Fiscal 2024 Earnings Conference Call
UNIFI will provide additional commentary regarding its third quarter fiscal 2024 results and other developments during its earnings conference call on May 9, 2024, at 9:00 a.m., Eastern Time. The call can be accessed via a live audio webcast on UNIFI’s website at http://investor.unifi.com. Additional supporting materials and information related to the call will also be available on UNIFI’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. Through REPREVE, one of UNIFI's proprietary technologies and the global leader in branded recycled performance fibers, UNIFI has transformed more than 40 billion plastic bottles into recycled fiber for new apparel, footwear, home goods, and other consumer products. 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:
Josh Carroll or Darren Yeun
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)
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For the Three Months Ended |
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For the Nine Months Ended |
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March 31, 2024 |
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April 2, 2023 |
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March 31, 2024 |
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April 2, 2023 |
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Net sales |
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$ |
148,996 |
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$ |
156,738 |
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$ |
424,757 |
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$ |
472,469 |
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Cost of sales |
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144,232 |
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147,085 |
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418,932 |
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464,253 |
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Gross profit |
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4,764 |
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9,653 |
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5,825 |
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8,216 |
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Selling, general and administrative expenses |
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11,372 |
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12,063 |
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35,389 |
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35,584 |
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Provision (benefit) for bad debts |
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179 |
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(56 |
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1,259 |
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(38 |
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Restructuring costs |
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— |
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— |
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5,101 |
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— |
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Other operating expense (income), net |
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139 |
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324 |
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674 |
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(139 |
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Operating loss |
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(6,926 |
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(2,678 |
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(36,598 |
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(27,191 |
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Interest income |
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(432 |
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(554 |
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(1,710 |
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(1,615 |
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Interest expense |
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2,407 |
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2,073 |
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7,505 |
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5,209 |
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Equity in loss (earnings) of unconsolidated affiliates |
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604 |
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(158 |
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311 |
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(539 |
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Loss before income taxes |
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(9,505 |
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(4,039 |
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(42,704 |
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(30,246 |
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Provision for income taxes |
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790 |
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1,145 |
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707 |
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|
809 |
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Net loss |
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$ |
(10,295 |
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$ |
(5,184 |
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$ |
(43,411 |
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$ |
(31,055 |
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Net loss per common share: |
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Basic |
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$ |
(0.57 |
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$ |
(0.29 |
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$ |
(2.40 |
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$ |
(1.72 |
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Diluted |
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$ |
(0.57 |
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$ |
(0.29 |
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$ |
(2.40 |
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$ |
(1.72 |
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Weighted average common shares outstanding: |
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Basic |
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18,169 |
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18,052 |
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18,121 |
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18,029 |
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Diluted |
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18,169 |
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18,052 |
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18,121 |
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18,029 |
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CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
(In thousands)
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March 31, 2024 |
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July 2, 2023 |
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ASSETS |
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Cash and cash equivalents |
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$ |
27,662 |
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$ |
46,960 |
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Receivables, net |
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78,931 |
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83,725 |
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Inventories |
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134,125 |
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150,810 |
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Income taxes receivable |
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2,002 |
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238 |
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Other current assets |
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9,460 |
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12,327 |
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Total current assets |
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252,180 |
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294,060 |
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Property, plant and equipment, net |
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204,795 |
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218,521 |
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Operating lease assets |
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7,500 |
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7,791 |
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Deferred income taxes |
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4,741 |
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3,939 |
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Other non-current assets |
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13,402 |
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14,508 |
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Total assets |
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$ |
482,618 |
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$ |
538,819 |
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LIABILITIES AND SHAREHOLDERS’ EQUITY |
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Accounts payable |
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$ |
42,343 |
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$ |
44,455 |
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Income taxes payable |
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1,883 |
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|
789 |
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Current operating lease liabilities |
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1,956 |
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1,813 |
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Current portion of long-term debt |
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12,368 |
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12,006 |
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Other current liabilities |
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19,173 |
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12,932 |
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Total current liabilities |
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77,723 |
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71,995 |
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Long-term debt |
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116,058 |
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128,604 |
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Non-current operating lease liabilities |
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5,683 |
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6,146 |
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Deferred income taxes |
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1,906 |
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3,364 |
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Other long-term liabilities |
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3,439 |
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5,100 |
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Total liabilities |
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204,809 |
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215,209 |
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Commitments and contingencies |
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Common stock |
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1,825 |
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1,808 |
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Capital in excess of par value |
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70,675 |
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68,901 |
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Retained earnings |
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263,381 |
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306,792 |
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Accumulated other comprehensive loss |
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(58,072 |
) |
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(53,891 |
) |
Total shareholders’ equity |
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277,809 |
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|
323,610 |
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Total liabilities and shareholders’ equity |
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$ |
482,618 |
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$ |
538,819 |
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CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(In thousands)
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For the Nine Months Ended |
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March 31, 2024 |
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April 2, 2023 |
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Cash and cash equivalents at beginning of period |
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$ |
46,960 |
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$ |
53,290 |
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Operating activities: |
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Net loss |
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(43,411 |
) |
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(31,055 |
) |
Adjustments to reconcile net loss to net cash provided by operating activities: |
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Equity in loss (earnings) of unconsolidated affiliates |
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311 |
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(539 |
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Distribution received from unconsolidated affiliate |
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1,000 |
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— |
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Depreciation and amortization expense |
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20,780 |
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|
20,388 |
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Non-cash compensation expense |
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1,798 |
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|
2,791 |
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Recovery of income taxes |
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— |
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(3,799 |
) |
Deferred income taxes |
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(2,403 |
) |
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|
(1,199 |
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Other, net |
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(93 |
) |
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|
252 |
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Changes in assets and liabilities |
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23,178 |
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|
21,510 |
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Net cash provided by operating activities |
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1,160 |
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8,349 |
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Investing activities: |
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Capital expenditures |
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(8,566 |
) |
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(32,461 |
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Other, net |
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490 |
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(193 |
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Net cash used by investing activities |
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(8,076 |
) |
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(32,654 |
) |
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Financing activities: |
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Proceeds from long-term debt |
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109,700 |
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148,933 |
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Payments on long-term debt |
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(121,930 |
) |
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(127,213 |
) |
Other, net |
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(6 |
) |
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(683 |
) |
Net cash (used) provided by financing activities |
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(12,236 |
) |
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21,037 |
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Effect of exchange rate changes on cash and cash equivalents |
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(146 |
) |
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(316 |
) |
Net decrease in cash and cash equivalents |
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(19,298 |
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(3,584 |
) |
Cash and cash equivalents at end of period |
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$ |
27,662 |
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$ |
49,706 |
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BUSINESS SEGMENT INFORMATION
(Unaudited)
(In thousands)
Net sales and gross profit details for each reportable segment of UNIFI are as follows:
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For the Three Months Ended |
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For the Nine Months Ended |
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March 31, 2024 |
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April 2, 2023 |
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March 31, 2024 |
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April 2, 2023 |
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Americas |
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$ |
91,130 |
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$ |
101,946 |
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$ |
253,252 |
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$ |
294,832 |
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Brazil |
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29,573 |
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27,380 |
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|
85,543 |
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|
91,946 |
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Asia |
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28,293 |
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27,412 |
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|
85,962 |
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|
85,691 |
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Consolidated net sales |
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$ |
148,996 |
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$ |
156,738 |
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$ |
424,757 |
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$ |
472,469 |
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|
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For the Three Months Ended |
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For the Nine Months Ended |
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March 31, 2024 |
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April 2, 2023 |
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March 31, 2024 |
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April 2, 2023 |
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Americas |
|
$ |
(3,514 |
) |
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$ |
3,158 |
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$ |
(17,632 |
) |
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$ |
(14,795 |
) |
Brazil |
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|
3,837 |
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|
|
2,382 |
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|
|
9,143 |
|
|
|
10,499 |
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Asia |
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4,441 |
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|
|
4,113 |
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|
14,314 |
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|
12,512 |
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Consolidated gross profit |
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$ |
4,764 |
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$ |
9,653 |
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$ |
5,825 |
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$ |
8,216 |
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RECONCILIATIONS OF REPORTED RESULTS TO ADJUSTED RESULTS
(Unaudited)
(In thousands)
EBITDA and Adjusted EBITDA (Non-GAAP Financial Measures)
The reconciliations of the amounts reported under U.S. generally accepted accounting principles (“GAAP”) for Net loss to EBITDA and Adjusted EBITDA are set forth below.
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For the Three Months Ended |
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For the Nine Months Ended |
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March 31, 2024 |
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April 2, 2023 |
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March 31, 2024 |
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April 2, 2023 |
|
||||
Net loss |
|
$ |
(10,295 |
) |
|
$ |
(5,184 |
) |
|
$ |
(43,411 |
) |
|
$ |
(31,055 |
) |
Interest expense, net |
|
|
1,975 |
|
|
|
1,519 |
|
|
|
5,795 |
|
|
|
3,594 |
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Provision for income taxes |
|
|
790 |
|
|
|
1,145 |
|
|
|
707 |
|
|
|
809 |
|
Depreciation and amortization expense (1) |
|
|
6,753 |
|
|
|
6,871 |
|
|
|
20,663 |
|
|
|
20,261 |
|
EBITDA |
|
|
(777 |
) |
|
|
4,351 |
|
|
|
(16,246 |
) |
|
|
(6,391 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Loss on joint venture dissolution (2) |
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|
— |
|
|
|
— |
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|
2,750 |
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|
|
— |
|
Severance (3) |
|
|
— |
|
|
|
— |
|
|
|
2,351 |
|
|
|
— |
|
Contract modification costs (4) |
|
|
— |
|
|
|
623 |
|
|
|
— |
|
|
|
623 |
|
Adjusted EBITDA |
|
$ |
(777 |
) |
|
$ |
4,974 |
|
|
$ |
(11,145 |
) |
|
$ |
(5,768 |
) |
Adjusted Net Loss and Adjusted EPS (Non-GAAP Financial Measures)
The tables below set forth reconciliations of (i) loss before income taxes (“Pre-tax Loss”), provision for income taxes (“Tax Impact”), and net loss (“Net Loss”) to Adjusted Net Loss and (ii) Diluted Earnings Per Share (“Diluted EPS”) to Adjusted EPS. Rounding may impact certain of the below calculations.
|
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For the Three Months Ended March 31, 2024 |
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For the Three Months Ended April 2, 2023 |
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||||||||||||||||||||||||||
|
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Pre-tax Loss |
|
|
Tax Impact |
|
|
Net Loss |
|
|
Diluted EPS |
|
|
Pre-tax Loss |
|
|
Tax Impact |
|
|
Net Loss |
|
|
Diluted EPS |
|
||||||||
GAAP results |
|
$ |
(9,505 |
) |
|
$ |
(790 |
) |
|
$ |
(10,295 |
) |
|
$ |
(0.57 |
) |
|
$ |
(4,039 |
) |
|
$ |
(1,145 |
) |
|
$ |
(5,184 |
) |
|
$ |
(0.29 |
) |
Contract modification costs (1) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
623 |
|
|
|
— |
|
|
|
623 |
|
|
|
0.04 |
|
Adjusted results |
|
$ |
(9,505 |
) |
|
$ |
(790 |
) |
|
$ |
(10,295 |
) |
|
$ |
(0.57 |
) |
|
$ |
(3,416 |
) |
|
$ |
(1,145 |
) |
|
$ |
(4,561 |
) |
|
$ |
(0.25 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Weighted average common shares outstanding |
|
|
|
18,169 |
|
|
|
|
|
|
|
|
|
|
|
|
18,052 |
|
||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
|
|
For the Nine Months Ended March 31, 2024 |
|
|
For the Nine Months Ended April 2, 2023 |
|
||||||||||||||||||||||||||
|
|
Pre-tax Loss |
|
|
Tax Impact |
|
|
Net Loss |
|
|
Diluted EPS |
|
|
Pre-tax Loss |
|
|
Tax Impact |
|
|
Net Loss |
|
|
Diluted EPS |
|
||||||||
GAAP results |
|
$ |
(42,704 |
) |
|
$ |
(707 |
) |
|
$ |
(43,411 |
) |
|
$ |
(2.40 |
) |
|
$ |
(30,246 |
) |
|
$ |
(809 |
) |
|
$ |
(31,055 |
) |
|
$ |
(1.72 |
) |
Loss on joint venture dissolution (2) |
|
|
2,750 |
|
|
|
— |
|
|
|
2,750 |
|
|
|
0.16 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Severance (3) |
|
|
2,351 |
|
|
|
— |
|
|
|
2,351 |
|
|
|
0.13 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Contract modification costs (1) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
623 |
|
|
|
— |
|
|
|
623 |
|
|
|
0.03 |
|
Recovery of income taxes (4) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(3,799 |
) |
|
|
(3,799 |
) |
|
|
(0.21 |
) |
Adjusted results |
|
$ |
(37,603 |
) |
|
$ |
(707 |
) |
|
$ |
(38,310 |
) |
|
$ |
(2.11 |
) |
|
$ |
(29,623 |
) |
|
$ |
(4,608 |
) |
|
$ |
(34,231 |
) |
|
$ |
(1.90 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Weighted average common shares outstanding |
|
|
|
18,121 |
|
|
|
|
|
|
|
|
|
|
|
|
18,029 |
|
||||||||||||||
Net Debt (Non-GAAP Financial Measure)
Reconciliations of Net Debt are as follows:
|
|
March 31, 2024 |
|
|
July 2, 2023 |
|
||
Long-term debt |
|
$ |
116,058 |
|
|
$ |
128,604 |
|
Current portion of long-term debt |
|
|
12,368 |
|
|
|
12,006 |
|
Unamortized debt issuance costs |
|
|
244 |
|
|
|
289 |
|
Debt principal |
|
|
128,670 |
|
|
|
140,899 |
|
Less: cash and cash equivalents |
|
|
27,662 |
|
|
|
46,960 |
|
Net Debt |
|
$ |
101,008 |
|
|
$ |
93,939 |
|
Cash and cash equivalents
At March 31, 2024 and July 2, 2023, UNIFI’s foreign operations held nearly all consolidated cash and cash equivalents.
REPREVE Fiber
REPREVE Fiber represents UNIFI’s collection of fiber products on its recycled platform, with or without added technologies.
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.
This press release also includes certain forward-looking information that is not presented in accordance with GAAP. Management believes that a quantitative reconciliation of such forward-looking information to the most directly comparable financial measure calculated and presented in accordance with GAAP cannot be made available without unreasonable efforts because a reconciliation of these non-GAAP financial measures would require UNIFI to predict the timing and likelihood of potential future events such as restructurings, M&A activity, contract modifications, and other infrequent or unusual gains and losses. Neither the timing or likelihood of these events, nor their probable significance, can be quantified with a reasonable degree of accuracy. Accordingly, a reconciliation of such forward-looking information to the most directly comparable GAAP financial measure is not provided.
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.
Management uses Adjusted Net (Loss) 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 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 UNIFI's 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, but not limited to, epidemics or pandemics; the success of UNIFI’s strategic business initiatives; the volatility of financial and credit markets, including the impacts of counterparty risk (e.g., deposit concentration and recent depositor sentiment and activity); 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 climate change or environmental, health, and safety regulations; and the impact of tax laws, the judicial or administrative interpretations of tax laws, and/or changes in such laws or interpretations.
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-
Conference Call Presentation Third Quarter Ended March 31, 2024 (Unaudited Results) (Amounts and dollars in millions, unless otherwise noted) Exhibit 99.2
Cautionary Statements 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 UNIFI’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 our facilities; the disruption of operations, global demand, or financial performance as a result of catastrophic or extraordinary events, including, but not limited to, epidemics or pandemics; the success of the Company’s strategic business initiatives; the volatility of financial and credit markets, including the impacts of counterparty risk (e.g., deposit concentration and recent depositor sentiment and activity); 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 climate change or environmental, health, and safety regulations; and the impact of tax laws, the judicial or administrative interpretations of tax laws, and/or changes in such laws or interpretations. 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 (Loss) Income, Adjusted EPS, Adjusted Working Capital, and Net Debt (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. 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. 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 Today’s Speakers Al Carey Executive Chairman Eddie Ingle CEO and Director A.J. Eaker EVP, CFO, and Treasurer
Consolidated Revenue $149.0M (+8.8%) Adjusted EPS1 ($0.57) (+29.6%) Adjusted EBITDA1 ($0.8M) (+85.9%) REPREVE Fiber % of Sales 31% (-200 bps) Q3 Fiscal 2024 Overview Note: REPREVE Fiber represents UNIFI’s collection of fiber products on its recycled platform, with or without added technologies. 1 Adjusted EPS and Adjusted EBITDA are non-GAAP financial measures described on Slide 2 and reconciled within the Earnings Release dated May 8, 2024. Sequential performance improvement, specifically in Americas Revenue stabilizing; continue to expect calendar 2024 demand increase Profitability Improvement Plan remains key driver to improved operating profile in calendar 2024 (compared to Q2 Fiscal 2024)
As a % of Net Sales REPREVE® Fiber Sales Note: REPREVE Fiber represents UNIFI’s collection of fiber products on its recycled platform, with or without added technologies. $180 $186 $246 $293 $186
SUSTAINABILITY unifi.com/sustainability
7 REPREVE, Peter Millar & WM Collaboration Unifi collaborated with Peter Millar and WM for the 2024 WM Phoenix Open, which is known for being one of the largest sustainable sporting events in the world. Bottles were collected at the previous year’s event, and REPREVE was showcased in a special edition apparel collection made from recycled bottles and sold exclusively at the tournament. UNIFI highlights how a circular economy can work, taking what might be a waste product and turning it into something useful.
REPREVE Champions of Sustainability
9 Consolidated Highlights Q3 FY24 Q2 FY24 QoQ Change Q3 FY23 YoY Change Net Sales $149.0 $136.9 8.8% $156.7 (4.9)% Gross Profit $4.8 $1.6 191.2% $9.7 (50.6)% Gross Margin 3.2% 1.2% 200 bps 6.2% (300) bps Highlights/Drivers Net sales and gross profit increased sequentially, primarily due to continued market share gains and the initial results of sales transformation initiatives that are focused on improving efficiencies and processes. Note: Q3 FY24 ended on March 31, 2024; Q2 FY24 ended on December 31, 2023; Q3 FY23 ended on April 2, 2023; and each contained 13 weeks.
10 Americas Highlights Q3 FY24 Q2 FY24 QoQ Change Q3 FY23 YoY Change Net Sales $91.1 $80.5 13.1% $101.9 (10.6)% Gross (Loss) Profit ($3.5) ($6.7) 47.8% $3.2 (211.3)% Gross Margin (3.9%) (8.4%) 450 bps 3.1% (700) bps Note: Q3 FY24 ended on March 31, 2024; Q2 FY24 ended on December 31, 2023; Q3 FY23 ended on April 2, 2023; and each contained 13 weeks. Highlights/Drivers Net sales and gross profit increased sequentially and seasonally, primarily due to increased sales volumes and cost saving initiatives.
11 Brazil Highlights Note: Q3 FY24 ended on March 31, 2024; Q2 FY24 ended on December 31, 2023; Q3 FY23 ended on April 2, 2023; and each contained 13 weeks. Q3 FY24 Q2 FY24 QoQ Change Q3 FY23 YoY Change Net Sales $29.6 $26.1 13.5% $27.4 8.0% Gross Profit $3.8 $3.1 22.2% $2.4 61.1% Gross Margin 13.0% 12.1% 90 bps 8.7% 430 bps 11 Highlights/Drivers Net sales and gross profit increased sequentially and seasonally, primarily due to increased sales volumes and improved pricing dynamics.
12 Asia Highlights Note: Q3 FY24 ended on March 31, 2024; Q2 FY24 ended on December 31, 2023; Q3 FY23 ended on April 2, 2023; and each contained 13 weeks. Q3 FY24 Q2 FY24 QoQ Change Q3 FY23 YoY Change Net Sales $28.3 $30.3 (6.6)% $27.4 3.2% Gross Profit $4.4 $5.2 (15.2)% $4.1 8.0% Gross Margin 15.7% 17.3% (160) bps 15.0% 70 bps Highlights/Drivers Net sales and gross profit decreased sequentially and seasonally, primarily due to lower sales volumes in connection with the Chinese New Year.
FCF CapEx Net Debt1 Working Capital Balance Sheet Cost control and working capital measures drive improvement in free cash flows. 1 Net Debt is a non-GAAP financial measure described on Slide 2 and reconciled within the Earnings Release dated May 8, 2024.
Q4 Fiscal 2024 Financial Outlook Continued Focused on Long-Term Growth Q3 FY24 Results Q4 FY24 Outlook Net Sales $149.0 $160.0 to $165.0 Adjusted EBITDA1 ($0.8) $4.0 to $6.0 Effective Tax Rate (8.3%) Continued Volatility Capital Expenditures $2.6 $4.0 to $5.0 1 Adjusted EBITDA is a non-GAAP financial measure described on Slide 2 and reconciled within the Earnings Release dated May 8, 2024.
15 Fiscal 2024 & 2025 Priorities Prepared to Pivot to Growth 1. Increasing customer engagement in all business segments to grow our global market share of the demand for sustainable inputs. 2. Scrutinizing working capital expenditures to reduce interest expense and improve cash flows. 3. Leveraging the realignment of resources and key talent across the organization to drive growth and innovation. 4. Transforming the sales process, including pricing, to streamline operational efficiencies and drive margin improvement. 5. Pursuing new yarn sales opportunities to grow the REPREVE Fiber business, expand our value-added innovative product offerings, and build on our Beyond Apparel initiatives.
Contact Investor Relations: UFI@alpha-ir.com