Item 1. Financial Statements
Item 1. Financial Statements
CONDENSED CONSOLIDATED BA LANCE SHEETS
(Unaudited)
(In thousands, except share and per share amounts)
March 29, 2026
June 29, 2025
ASSETS
Cash and cash equivalents
$
26,561
$
22,664
Receivables, net
73,629
75,383
Inventories
103,931
122,929
Income taxes receivable
947
5,429
Other current assets
7,337
9,222
Total current assets
212,405
235,627
Property, plant and equipment, net
162,709
172,923
Operating lease assets
7,119
7,879
Deferred income taxes
5,476
5,535
Other non-current assets
4,665
4,904
Total assets
$
392,374
$
426,868
LIABILITIES AND SHAREHOLDERS’ EQUITY
Accounts payable
$
36,211
$
37,468
Income taxes payable
661
49
Current operating lease liabilities
2,289
2,368
Current portion of long-term debt
12,614
12,159
Other current liabilities
16,308
18,899
Total current liabilities
68,083
70,943
Long-term debt
82,242
95,727
Non-current operating lease liabilities
4,878
5,614
Deferred income taxes
1,178
1,224
Other long-term liabilities
4,122
3,889
Total liabilities
160,503
177,397
Commitments and contingencies
Common stock, $ 0.10 par value ( 500,000,000 shares authorized; 18,587,254 and 18,360,663
shares issued and outstanding as of March 29, 2026 and June 29, 2025, respectively)
1,859
1,836
Capital in excess of par value
76,254
74,095
Retained earnings
215,680
239,049
Accumulated other comprehensive loss
( 61,922
)
( 65,509
)
Total shareholders’ equity
231,871
249,471
Total liabilities and shareholders’ equity
$
392,374
$
426,868
See accompanying notes to condensed consolidated financial statements.
1
CONDENSED CONSOLIDATED STATE MENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)
(Unaudited)
(In thousands, except per share amounts)
For the Three Months Ended
For the Nine Months Ended
March 29, 2026
March 30, 2025
March 29, 2026
March 30, 2025
Net sales
$
130,037
$
146,557
$
387,079
$
432,809
Cost of sales
120,920
147,002
370,964
423,262
Gross profit (loss)
9,117
( 445
)
16,115
9,547
Selling, general and administrative expenses
11,188
12,295
32,849
37,058
Benefit for bad debts
( 294
)
( 255
)
( 244
)
( 39
)
Restructuring costs, net
—
1,320
1,853
1,320
Gain on sale of assets
—
—
—
( 4,296
)
Other operating (income) expense, net
( 1,660
)
55
( 1,317
)
144
Operating loss
( 117
)
( 13,860
)
( 17,026
)
( 24,640
)
Interest income
( 446
)
( 198
)
( 1,294
)
( 632
)
Interest expense
1,559
2,417
5,364
7,322
Equity in loss of unconsolidated affiliate
240
216
289
467
Loss before income taxes
( 1,470
)
( 16,295
)
( 21,385
)
( 31,797
)
Provision for income taxes
836
499
1,984
4,021
Net loss
$
( 2,306
)
$
( 16,794
)
$
( 23,369
)
$
( 35,818
)
Net loss per common share:
Basic
$
( 0.12
)
$
( 0.92
)
$
( 1.27
)
$
( 1.96
)
Diluted
$
( 0.12
)
$
( 0.92
)
$
( 1.27
)
$
( 1.96
)
Comprehensive income (loss):
For the Three Months Ended
For the Nine Months Ended
March 29, 2026
March 30, 2025
March 29, 2026
March 30, 2025
Net loss
$
( 2,306
)
$
( 16,794
)
$
( 23,369
)
$
( 35,818
)
Other comprehensive income (loss):
Foreign currency translation adjustments
3,366
7,194
3,587
( 1,524
)
Other comprehensive income (loss)
3,366
7,194
3,587
( 1,524
)
Comprehensive income (loss)
$
1,060
$
( 9,600
)
$
( 19,782
)
$
( 37,342
)
See accompanying notes to condensed consolidated financial statements.
2
CONDENSED CONSOLIDATED STATEM ENTS OF SHAREHOLDERS’ EQUITY
(Unaudited)
(In thousands)
Shares
Common Stock
Capital in Excess of Par Value
Retained Earnings
Accumulated Other Comprehensive Loss
Total Shareholders’ Equity
Balance at December 28, 2025
18,578
$
1,858
$
75,442
$
217,986
$
( 65,288
)
$
229,998
Conversion of equity units
13
2
( 2
)
—
—
—
Stock-based compensation
—
—
823
—
—
823
Common stock withheld in satisfaction of tax withholding obligations under net share settle transactions
( 4
)
( 1
)
( 9
)
—
—
( 10
)
Other comprehensive income, net of tax
—
—
—
—
3,366
3,366
Net loss
—
—
—
( 2,306
)
—
( 2,306
)
Balance at March 29, 2026
18,587
$
1,859
$
76,254
$
215,680
$
( 61,922
)
$
231,871
Shares
Common Stock
Capital in Excess of Par Value
Retained Earnings
Accumulated Other Comprehensive Loss
Total Shareholders’ Equity
Balance at June 29, 2025
18,361
$
1,836
$
74,095
$
239,049
$
( 65,509
)
$
249,471
Conversion of equity units
297
30
( 30
)
—
—
—
Stock-based compensation
—
—
2,431
—
—
2,431
Common stock withheld in satisfaction of tax withholding obligations under net share settle transactions
( 71
)
( 7
)
( 242
)
—
—
( 249
)
Other comprehensive income, net of tax
—
—
—
—
3,587
3,587
Net loss
—
—
—
( 23,369
)
—
( 23,369
)
Balance at March 29, 2026
18,587
$
1,859
$
76,254
$
215,680
$
( 61,922
)
$
231,871
Shares
Common Stock
Capital in Excess of Par Value
Retained Earnings
Accumulated Other Comprehensive Loss
Total Shareholders’ Equity
Balance at December 29, 2024
18,345
$
1,835
$
72,490
$
240,373
$
( 77,507
)
$
237,191
Options exercised
7
—
31
—
—
31
Conversion of equity units
11
2
( 2
)
—
—
—
Stock-based compensation
—
—
784
—
—
784
Common stock withheld in satisfaction of tax withholding obligations under net share settle transactions
( 3
)
( 1
)
( 19
)
—
—
( 20
)
Other comprehensive income, net of tax
—
—
—
—
7,194
7,194
Net loss
—
—
—
( 16,794
)
—
( 16,794
)
Balance at March 30, 2025
18,360
$
1,836
$
73,284
$
223,579
$
( 70,313
)
$
228,386
Shares
Common Stock
Capital in Excess of Par Value
Retained Earnings
Accumulated Other Comprehensive Loss
Total Shareholders’ Equity
Balance at June 30, 2024
18,252
$
1,825
$
70,952
$
259,397
$
( 68,789
)
$
263,385
Options exercised
12
1
66
—
—
67
Conversion of equity units
124
13
( 13
)
—
—
—
Stock-based compensation
—
—
2,442
—
—
2,442
Common stock withheld in satisfaction of tax withholding obligations under net share settle transactions
( 28
)
( 3
)
( 163
)
—
—
( 166
)
Other comprehensive loss, net of tax
—
—
—
—
( 1,524
)
( 1,524
)
Net loss
—
—
—
( 35,818
)
—
( 35,818
)
Balance at March 30, 2025
18,360
$
1,836
$
73,284
$
223,579
$
( 70,313
)
$
228,386
See accompanying notes to condensed consolidated financial statements.
3
CONDENSED CONSOLIDATED STATEME NTS OF CASH FLOWS
(Unaudited)
(In thousands)
For the Nine Months Ended
March 29, 2026
March 30, 2025
Cash and cash equivalents at beginning of period
$
22,664
$
26,805
Operating activities:
Net loss
( 23,369
)
( 35,818
)
Adjustments to reconcile net loss to net cash provided (used) by operating activities:
Equity in loss of unconsolidated affiliate
289
467
Depreciation and amortization expense
18,100
19,200
Non-cash compensation expense
2,431
2,442
Gain on foreign currency transaction, net
( 1,775
)
—
Gain on sale of assets
( 308
)
( 4,296
)
Deferred income taxes
231
563
Other, net
198
1,525
Changes in assets and liabilities:
Receivables, net
3,210
( 1,757
)
Inventories
21,185
( 753
)
Other current assets
2,089
( 1,966
)
Income taxes
5,409
( 7,106
)
Accounts payable and other current liabilities
( 3,359
)
2,020
Other, net
62
5,485
Net cash provided (used) by operating activities
24,393
( 19,994
)
Investing activities:
Capital expenditures
( 3,872
)
( 7,915
)
Proceeds from the sale of assets
501
8,094
Net cash (used) provided by investing activities
( 3,371
)
179
Financing activities:
Proceeds from ABL Revolver
81,500
167,150
Payments on ABL Revolver
( 89,300
)
( 148,150
)
Payments on ABL Term Loan
( 6,900
)
( 6,900
)
Payments on finance lease obligations
( 2,412
)
( 2,397
)
Other, net
( 249
)
( 428
)
Net cash (used) provided by financing activities
( 17,361
)
9,275
Effect of exchange rate changes on cash and cash equivalents
236
( 10
)
Net increase (decrease) in cash and cash equivalents
3,897
( 10,550
)
Cash and cash equivalents at end of period
$
26,561
$
16,255
See accompanying notes to condensed consolidated financial statements.
4
Unifi, Inc.
Notes to Condensed Consolidated Financial Statements
(Unaudited)
1. Background
Unifi, Inc., a New York corporation formed in 1969 (together with its subsidiaries, “UNIFI,” the “Company,” “we,” “us,” or “our”), is a multinational company that manufactures and sells innovative recycled and synthetic products, made from polyester and nylon, primarily to other yarn manufacturers and knitters and weavers (UNIFI’s “direct customers”) that produce yarn and/or fabric for the apparel, hosiery, home furnishings, automotive, industrial, medical, and other end-use markets (UNIFI’s “indirect customers”). We sometimes refer to these indirect customers as “brand partners.” Polyester products include partially oriented yarn (“POY”) and textured, solution and package dyed, twisted, beamed, and draw wound yarns, and each is available in virgin or recycled varieties. Recycled solutions, made from both pre-consumer and post-consumer waste, include plastic bottle flake (“Flake”), polyester polymer beads (“Chip”), and staple fiber. Nylon products include virgin or recycled textured, solution dyed, and spandex covered yarns.
UNIFI maintains one of the textile industry’s most comprehensive product offerings that includes a range of specialized, value-added, and commodity solutions, with principal geographic markets in North America, Central America, South America, Asia, and Europe. UNIFI has direct manufacturing operations in four countries and participates in a joint venture with operations in the United States (the “U.S.”).
2. Basis of Presentation; Condensed Notes
The accompanying condensed consolidated financial statements are unaudited and have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) for interim financial information. As contemplated by the instructions of the SEC to Form 10-Q, the following notes have been condensed and, therefore, do not contain all disclosures required in connection with annual financial statements. Reference should be made to UNIFI’s year-end audited consolidated financial statements and related notes thereto contained in its Annual Report on Form 10-K for the fiscal year ended June 29, 2025 (the “2025 Form 10-K”).
The financial information included in this report has been prepared by UNIFI, without audit. In the opinion of management, all adjustments, which consist of normal, recurring adjustments, considered necessary for a fair statement of the results for interim periods have been included. Nevertheless, the results shown for interim periods are not necessarily indicative of results to be expected for the full year. The preparation of financial statements in conformity with GAAP requires management to make use of estimates and assumptions that affect the amounts reported and certain financial statement disclosures. Actual results may vary from these estimates.
All amounts, except per share amounts, are presented in thousands (000s), except as otherwise noted.
The fiscal quarter for each of Unifi, Inc., its primary domestic operating subsidiaries and its subsidiary in El Salvador ended on March 29, 2026. Unifi, Inc.’s remaining material operating subsidiaries’ fiscal quarters ended on March 31, 2026. There were no significant transactions or events that occurred between Unifi, Inc.’s fiscal quarter end and such wholly owned subsidiaries’ fiscal quarters end. The three-month periods ended March 29, 2026 and March 30, 2025 both consisted of 13 weeks. The nine-month periods ended March 29, 2026 and March 30, 2025 both consisted of 39 weeks.
3. Recent Accounting Pronouncements
Issued and Pending Adoption
In November 2024, the FASB issued ASU 2024-03, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses . ASU No. 2024-03 does not change or remove existing expense disclosure requirements but requires disaggregated disclosures about certain expense categories and captions, including but not limited to, purchases of inventory, employee compensation, depreciation, amortization and selling expenses. This ASU will become effective for UNIFI's fiscal 2028 and in the first quarter of fiscal 2029 for interim reporting, with retrospective application permitted. UNIFI is currently evaluating the impact on the Company's disclosures on its consolidated financial statements.
In December 2023, the Financial Accounting Standards Board (the “FASB”) issued Accounting Standards Update (“ASU”) No. 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures . ASU No. 2023-09 modifies the rules on income tax disclosures to require entities to disclose (i) specific categories in the rate reconciliation, (ii) the income or loss from continuing operations before income tax expense or benefit (separated between domestic and foreign) and (iii) income tax expense or benefit from continuing operations (separated by federal, state, and foreign). The ASU also requires entities to disclose their income tax payments to international, federal, state, and local jurisdictions, among other changes. The ASU is effective for UNIFI's fiscal 2026, with early adoption permitted, and should be applied on a prospective basis, but retrospective application is permitted. UNIFI is currently evaluating the impact on the Company’s disclosures but does not expect this standard will have a material impact on its consolidated financial position, results of operations, or cash flows.
Based on UNIFI’s review of ASUs issued since the filing of the 2025 Form 10-K, there have been no other newly issued or newly applicable accounting pronouncements that have had, or are expected to have, a material impact on UNIFI’s consolidated financial statements.
5
Unifi, Inc.
Notes to Condensed Consolidated Financial Statements (Continued)
(Unaudited)
4. Revenue
The following tables present net sales disaggregated by (i) classification of customer type and (ii) REPREVE ® Fiber sales:
For the Three Months Ended
For the Nine Months Ended
March 29, 2026
March 30, 2025
March 29, 2026
March 30, 2025
Third-party manufacturer
$
129,237
$
145,519
$
384,554
$
429,611
Service
800
1,038
2,525
3,198
Net sales
$
130,037
$
146,557
$
387,079
$
432,809
For the Three Months Ended
For the Nine Months Ended
March 29, 2026
March 30, 2025
March 29, 2026
March 30, 2025
REPREVE ® Fiber
$
38,248
$
44,699
$
111,784
$
132,713
All other products and services
91,789
101,858
275,295
300,096
Net sales
$
130,037
$
146,557
$
387,079
$
432,809
Third-Party Manufacturer
Third-party manufacturer revenue is primarily generated through sales to direct customers. Such sales represent satisfaction of UNIFI’s performance obligations required by the associated revenue contracts. Each of UNIFI’s reportable segments derives revenue from sales to third-party manufacturers.
Service Revenue
Service revenue is primarily generated, as services are rendered, through fulfillment of toll manufacturing of textile products or transportation services governed by written agreements. Such toll manufacturing and transportation services represent satisfaction of UNIFI’s performance obligations required by the associated revenue contracts.
REPREVE ® Fiber
REPREVE ® Fiber represents UNIFI's collection of fiber products on our recycled platform, with or without added technologies.
5. Long-Term Debt
Debt Obligations
The following table and narrative presents the detail of UNIFI’s debt obl igations. Capitalized terms not otherwise defined within this Note shall have the meanings attributed to them in the Second Amended and Restated Credit Agreement, dated as of October 28, 2022 (the “2022 Credit Agreement”) as amended.
Weighted Average
Scheduled
Interest Rate as of
Principal Amounts as of
Maturity Date
March 29, 2026
March 29, 2026
June 29, 2025
ABL Revolver
October 2027
7.8
%
$
3,200
$
11,000
2024 Facility
October 2027
4.6
%
22,000
22,000
ABL Term Loan
October 2027
5.8
%
60,100
67,000
Finance lease obligations
(1)
4.9
%
9,639
8,008
Total debt
94,939
108,008
Current portion of ABL Term Loan
( 9,200
)
( 9,200
)
Current portion of finance lease obligations
( 3,414
)
( 2,959
)
Unamortized debt issuance costs
( 83
)
( 122
)
Total long-term debt
$
82,242
$
95,727
(1) Scheduled maturity dates for finance lease obligations range from November 2026 to October 2032 .
6
Unifi, Inc.
Notes to Condensed Consolidated Financial Statements (Continued)
(Unaudited)
ABL Facility and Amendments
On September 5, 2024, UNIFI, Inc. and certain of its subsidiaries entered into a First Amendment to the 2022 Credit Agreement (the “First Amendment”) with a syndicate of lenders. The First Amendment primarily (i) permits the sale of a Company-owned real estate asset (consisting of an industrial warehouse building and land acreage) located in Yadkinville, North Carolina with application of the net proceeds to reduce the outstanding ABL Revolver balance, in lieu of the prescribed mandatory prepayment to the ABL Term Loan; (ii) reduces the Maximum Revolver Amount from $ 115,000 to $ 80,000 ; (iii) modifies the definition of the Trigger Level as of any date of determination to the greater of (a) $ 16,500 and (b) 10 % of the sum of (i) the Maximum Revolver Amount plus (ii) the outstanding principal amount of the ABL Term Loan on such date of determination; (iv) increases the range of the Applicable Margin on (a) SOFR-based loans to a new range of 1.50 % to 2.00 % and (b) Base Rate-based loans to a new range of 0.50 % to 1.00 %, with such new ranges of Applicable Margin rates becoming immediately effective and continuing until the Company achieves a Fixed Charge Coverage Ratio of 1.05 to 1.00 or better; (v) for a Term Loan Reset, establishes an additional requirement to obtain lender approval; and (vi) modifies certain terms and conditions of the 2022 Credit Agreement including, but not limited to, Swing Loans, Letter of Credit sublimits, and costs related to normal course collateral valuations for the ABL Facility.
On October 25, 2024, UNIFI entered into a new credit agreement with Wells Fargo Bank, National Association for a $ 25,000 revolving credit facility (the “2024 Facility” ). The maturity date of the 2024 Facility is the earlier of (i) October 28, 2027 and (ii) the termination or refinancing of the 2022 Credit Agreement. The 2024 Facility is deemed unsecured financing for UNIFI, but is collateralized by certain assets pledged by related party Kenneth G. Langone, one of the members of UNIFI's Board of Directors. Borrowings under the 2024 Facility bear interest at a rate of SOFR plus 0.90 %. The 2024 Facility contains no additional financial covenants beyond those already in effect for the 2022 Credit Agreement and is subject to a monthly unused line fee of 0.25 % on available borrowing capacity. On January 2, 2025, UNIFI borrowed $ 22,000 against the 2024 Facility and used the proceeds to reduce the outstanding ABL Revolver balance. There was no impact to debt principal from these transactions.
On April 10, 2025, UNIFI entered into a Second Amendment to the 2022 Credit Agreement (the “Second Amendment”). The Second Amendment primarily (i) permits the Company to enter into the purchase agreement related to, and consummate the sale of, the Company's Madison, North Carolina property, (ii) permits the Company to allocate a portion of the net proceeds from the sale to repay outstanding revolving loans under the 2022 Credit Agreement, after the application of the greater of $ 25,000 or 50 % of such net proceeds toward outstanding term loans, and (iii) requires the consent of all lenders, rather than the Required Lenders (as defined in the 2022 Credit Agreement), in order to reset the maximum amount of the term loans available under the 2022 Credit Agreement.
6. Income Taxes
The provision for income taxes and effective tax rate were as follows:
For the Three Months Ended
For the Nine Months Ended
March 29, 2026
March 30, 2025
March 29, 2026
March 30, 2025
Provision for income taxes
$
836
$
499
$
1,984
$
4,021
Effective tax rate
( 56.9
)%
( 3.1
)%
( 9.3
)%
( 12.6
)%
Income Tax Expense
UNIFI’s provision for income taxes for the nine months ended March 29, 2026 and March 30, 2025 was calculated by applying the estimated annual effective tax rate to year-to-date pre-tax book income and adjusting for discrete items that occurred during the period.
The effective tax rate for the three and nine months ended March 29, 2026 and March 30, 2025 varied from the U.S. federal statutory rate primarily due to the U.S. generated losses for which UNIFI does not expect to realize a future tax benefit.
On July 4, 2025, the U.S. government enacted The One Big Beautiful Bill Act of 2025 (the “Act”), making significant changes to the U.S. corporate income tax system. Based on current analysis of the Act, UNIFI does not expect these tax law changes to have a material impact on its financial statements given the current valuation allowance; however, UNIFI will continue to evaluate their impact as further information becomes available. UNIFI has reflected the impact of the enacted provisions in the three and nine months ended March 29, 2026.
Unrecognized Tax Benefits
UNIFI regularly assesses the outcomes of both completed and ongoing examinations to ensure that its provision for income taxes is sufficient. Certain returns that remain open to examination have utilized carryforward tax attributes generated in prior tax years, including net operating losses, which could potentially be revised upon examination.
7. Shareholders’ Equity
On October 31, 2018, UNIFI announced that the Company's Board of Directors approved a share repurchase program (the “2018 SRP”) under which UNIFI is authorized to acquire up to $ 50,000 of its common stock. The share repurchase authorization is discretionary and has no expiration date. No shares have been repurchased in fiscal 2025 and 2026 and $ 38,859 remains available for repurchase.
7
Unifi, Inc.
Notes to Condensed Consolidated Financial Statements (Continued)
(Unaudited)
8. Stock-Based Compensation
On October 28, 2025 , UNIFI's shareholders approved a Second Amendment (the “Second Amendment” ) to the Unifi, Inc. Second Amended and Restated 2013 Incentive Compensation Plan (the “2020 Plan”). The 2020 Plan set the initial number of shares available for future issuance (the “share reserve”) pursuant to awards granted under the 2020 Plan to 850 . In October 2023, the 2020 Plan was amended to increase the share reserve by 1,100 shares and the Second Amendment added an additional 1,240 shares to the share reserve. No additional awards can be granted under prior plans; however, awards outstanding under a respective prior plan remain subject to that plan’s provisions.
9. Earnings Per Share
The components of the calculation of earnings per share (“EPS”) are as follows:
For the Three Months Ended
For the Nine Months Ended
March 29, 2026
March 30, 2025
March 29, 2026
March 30, 2025
Net loss
$
( 2,306
)
$
( 16,794
)
$
( 23,369
)
$
( 35,818
)
Basic weighted average shares
18,584
18,352
18,455
18,299
Net potential common share equivalents
—
—
—
—
Diluted weighted average shares
18,584
18,352
18,455
18,299
Excluded from the calculation of common share equivalents:
Anti-dilutive common share equivalents
457
909
643
909
Excluded from the calculation of diluted shares:
Unvested stock options that vest upon achievement of certain market conditions
—
333
—
333
The calculation of EPS is based on the weighted average number of Unifi, Inc.’s common shares outstanding for the applicable period. The calculation of diluted EPS presents the effect of all potential dilutive common shares that were outstanding during the respective period, unless the effect of doing so is anti-dilutive.
10. Commitments and Contingencies
Collective Bargaining Agreements
While employees of UNIFI’s Brazilian operations are unionized, none of the labor force employed by UNIFI’s domestic or other foreign subsidiaries is currently covered by a collective bargaining agreement.
11. Related Party Transactions
Related party balances and transactions are not material to the condensed consolidated financial statements and, accordingly, are not presented separately from other financial statement captions.
There were no related party receivables as of March 29, 2026 and June 29, 2025.
Related party payables for Salem Leasing Corporation consisted of the following:
March 29, 2026
June 29, 2025
Accounts payable
$
369
$
293
Operating lease obligations
—
113
Finance lease obligations
5,659
2,665
Total related party payables
$
6,028
$
3,071
The following were the Company’s significant related party transactions:
For the Three Months Ended
For the Nine Months Ended
Affiliated Entity
Transaction Type
March 29, 2026
March 30, 2025
March 29, 2026
March 30, 2025
Salem Leasing Corporation
Payments for transportation equipment costs and finance lease debt service
$
1,033
$
1,028
$
3,297
$
3,307
As discussed in Note 5, “Long-Term Debt” , UNIFI entered into the 2024 Facility in October 2024 which was collateralized by personal assets of a board member. On January 2, 2025, UNIFI borrowed $ 22,000 on the 2024 Facility and used the proceeds to reduce the outstanding ABL Revolver balance.
8
Unifi, Inc.
Notes to Condensed Consolidated Financial Statements (Continued)
(Unaudited)
12. Business Segment Information
UNIFI defines operating segments as components of the organization for which discrete financial information is available and operating results are evaluated on a regular basis by UNIFI’s chief executive officer , who is the chief operating decision maker (the “CODM”), in order to assess performance and allocate resources. Characteristics of UNIFI which were relied upon in making the determination of reportable segments include the nature of the products sold, the internal organizational structure, the trade policies in the geographic regions in which UNIFI operates, and the information that is regularly reviewed by the CODM for the purpose of assessing performance and allocating resources.
UNIFI's three reportable segments are organized as follows:
• The operations within the Americas Segment exhibit similar long-term economic characteristics and primarily sell into an economic trading zone covered by the United States-Mexico-Canada Agreement and the Dominican Republic-Central America Free Trade Agreement to similar customers utilizing similar methods of distribution. These operations derive revenues primarily from manufacturing synthetic and recycled textile products with sales primarily to yarn manufacturers, knitters, and weavers that produce yarn and/or fabric for the apparel, hosiery, automotive, home furnishings, industrial, medical, and other end-use markets principally in North and Central America. The Americas Segment consists of sales and manufacturing operations in the U.S., El Salvador, and Colombia.
• The Brazil Segment primarily manufactures and sells polyester-based products to knitters and weavers that produce fabric for the apparel, automotive, home furnishings, industrial, and other end-use markets principally in Brazil. The Brazil Segment includes a manufacturing location and sales offices in Brazil.
• The operations within the Asia Segment exhibit similar long-term economic characteristics and sell to similar customers utilizing similar methods of distribution primarily in Asia and Europe. The Asia Segment primarily sources synthetic and recycled textile products from third-party suppliers and sells to yarn manufacturers, knitters, and weavers that produce fabric for the apparel, automotive, home furnishings, industrial, and other end-use markets principally in Asia and Europe. The Asia Segment includes sales offices in China, Turkey, Hong Kong, and India.
UNIFI evaluates the operating performance of its segments based upon Segment (Loss) Profit, which represents segment gross (loss) profit plus segment depreciation expense. This measurement of segment profit or loss best aligns segment reporting with the current assessments and evaluations performed by, and information provided to, the CODM.
The accounting policies for the segments are consistent with UNIFI’s accounting policies. Intersegment sales are omitted from segment disclosures, as they are (i) insignificant to UNIFI’s segments and eliminated from consolidated reporting and (ii) excluded from segment evaluations performed by the CODM.
Selected financial information is presented below:
For the Three Months Ended March 29, 2026
Americas
Brazil
Asia
Total
Net sales
$
78,343
$
29,112
$
22,582
$
130,037
Cost of sales
74,720
26,361
19,839
120,920
Gross profit
3,623
2,751
2,743
9,117
Segment depreciation expense
4,942
929
15
5,886
Segment Profit
$
8,565
$
3,680
$
2,758
$
15,003
For the Three Months Ended March 30, 2025
Americas
Brazil
Asia
Total
Net sales
$
93,544
$
28,124
$
24,889
$
146,557
Cost of sales
100,501
25,136
21,365
147,002
Gross (loss) profit
( 6,957
)
2,988
3,524
( 445
)
Segment depreciation expense
5,251
701
13
5,965
Segment (Loss) Profit
$
( 1,706
)
$
3,689
$
3,537
$
5,520
For the Nine Months Ended March 29, 2026
Americas
Brazil
Asia
Total
Net sales
$
240,772
$
81,201
$
65,106
$
387,079
Cost of sales
239,260
74,733
56,971
370,964
Gross profit
1,512
6,468
8,135
16,115
Segment depreciation expense
14,764
2,412
42
17,218
Segment Profit
$
16,276
$
8,880
$
8,177
$
33,333
For the Nine Months Ended March 30, 2025
Americas
Brazil
Asia
Total
Net sales
$
262,922
$
89,916
$
79,971
$
432,809
Cost of sales
277,797
75,205
70,260
423,262
Gross (loss) profit
( 14,875
)
14,711
9,711
9,547
Segment depreciation expense
15,995
2,044
44
18,083
Segment Profit
$
1,120
$
16,755
$
9,755
$
27,630
9
Unifi, Inc.
Notes to Condensed Consolidated Financial Statements (Continued)
(Unaudited)
The reconciliations of segment gross profit to consolidated loss before income taxes are as follows:
For the Three Months Ended
For the Nine Months Ended
March 29, 2026
March 30, 2025
March 29, 2026
March 30, 2025
Americas
$
3,623
$
( 6,957
)
$
1,512
$
( 14,875
)
Brazil
2,751
2,988
6,468
14,711
Asia
2,743
3,524
8,135
9,711
Segment gross profit (loss)
9,117
( 445
)
16,115
9,547
Selling, general and administrative expenses
11,188
12,295
32,849
37,058
Benefit for bad debts
( 294
)
( 255
)
( 244
)
( 39
)
Restructuring costs, net
—
1,320
1,853
1,320
Gain on sale of assets
—
—
—
( 4,296
)
Other operating (income) expense, net
( 1,660
)
55
( 1,317
)
144
Operating loss
( 117
)
( 13,860
)
( 17,026
)
( 24,640
)
Interest income
( 446
)
( 198
)
( 1,294
)
( 632
)
Interest expense
1,559
2,417
5,364
7,322
Equity in loss of unconsolidated affiliate
240
216
289
467
Loss before income taxes
$
( 1,470
)
$
( 16,295
)
$
( 21,385
)
$
( 31,797
)
The reconciliations of segment depreciation and amortization expense to consolidated depreciation and amortization expense are as follows:
For the Three Months Ended
For the Nine Months Ended
March 29, 2026
March 30, 2025
March 29, 2026
March 30, 2025
Americas
$
4,942
$
5,251
$
14,764
$
15,995
Brazil
929
701
2,412
2,044
Asia
15
13
42
44
Segment depreciation expense
5,886
5,965
17,218
18,083
Other depreciation and amortization expense
289
354
882
1,117
Depreciation and amortization expense
$
6,175
$
6,319
$
18,100
$
19,200
The reconciliations of segment capital expenditures to consolidated capital expenditures are as follows:
For the Three Months Ended
For the Nine Months Ended
March 29, 2026
March 30, 2025
March 29, 2026
March 30, 2025
Americas
$
283
$
2,527
$
2,251
$
6,715
Brazil
503
383
1,584
959
Asia
2
3
14
62
Segment capital expenditures
788
2,913
3,849
7,736
Other capital expenditures
—
58
23
179
Capital expenditures
$
788
$
2,971
$
3,872
$
7,915
The reconciliations of segment total assets to consolidated total assets are as follows:
March 29, 2026
June 29, 2025
Americas
$
241,937
$
271,230
Brazil
94,397
99,477
Asia
35,820
35,413
Segment total assets
372,154
406,120
Other current assets
2,095
2,911
Other PP&E
13,356
11,887
Other operating lease assets
351
937
Other non-current assets
3,516
3,862
Investment in unconsolidated affiliate
902
1,151
Total assets
$
392,374
$
426,868
10
Unifi, Inc.
Notes to Condensed Consolidated Financial Statements (Continued)
(Unaudited)
Geographic Data
For the Three Months Ended
For the Nine Months Ended
Net Sales
March 29, 2026
March 30, 2025
March 29, 2026
March 30, 2025
U.S.
$
68,110
$
82,902
$
212,717
$
235,476
Brazil
29,112
28,124
81,201
89,916
China
22,382
22,965
64,611
76,183
Remaining Foreign Countries
10,433
12,566
28,550
31,234
Total
$
130,037
$
146,557
$
387,079
$
432,809
Export sales from UNIFI’s U.S. operations to external customers
$
11,451
$
19,444
$
34,611
$
55,189
The net sales amounts are based on the operating locations from where the items were produced or distributed.
Long-Lived Assets
March 29, 2026
June 29, 2025
U.S.
$
136,061
$
146,017
Brazil
24,611
24,305
China
1,103
1,458
Remaining Foreign Countries
12,718
13,926
Total
$
174,493
$
185,706
Long-lived assets are comprised of PP&E, net; operating lease assets; intangible assets, net; investments in unconsolidated affiliates; and other non-current assets.
13. Investment in Unconsolidated Affiliate
Included within Other non-current assets is UNIFI’s investment in unconsolidated affiliate: UNF America LLC (“UNFA”).
UNIFI’s raw material purchases under its supply agreement with UNFA consisted of the following:
For the Three Months Ended
For the Nine Months Ended
March 29, 2026
March 30, 2025
March 29, 2026
March 30, 2025
UNFA
$
3,658
$
4,572
$
11,057
$
11,614
As of March 29, 2026, UNIFI’s open purchase orders related to this supply agreement we re $ 2,100 . As o f March 29, 2026 and June 29, 2025, UNIFI had accounts payable due to UNFA of $ 1,578 and $ 1,368 , respectively.
Other than the supply agreement discussed above, UNIFI does not provide any other commitments or guarantees related to UNFA. As of March 29, 2026 and June 29, 2025, UNIFI’s investment in UNFA was $ 902 and $ 1,151 , respectively. There have been no significant changes in the condensed balance sheet and income statement information for UNFA as previously disclosed in the 2025 Form 10-K.
14. Supplemental Cash Flow Information
Cash payments for interest and taxes consist of the following:
For the Nine Months Ended
March 29, 2026
March 30, 2025
Interest, net of capitalized interest of $ 10 and $ 115 , respectively
$
5,292
$
7,062
Income tax (refunds) payments, net
( 848
)
5,191
Cash payments for taxes shown above consist primarily of income and withholding tax payments made by UNIFI in both U.S. and foreign jurisdictions, net of refunds.
Non-Cash Investing and Financing Activities
As of March 29, 2026 and June 29, 2025, $ 72 and $ 676 , respectively, were included in accounts payable for unpaid capital expenditures. As of March 30, 2025 and June 30, 2024, $ 524 and $ 879 , respectively, were included in accounts payable for unpaid capital expenditures.
During the nine-months ended March 29, 2026 and March 30, 2025, UNIFI recorded non-cash activity relating to finance leases of $ 4,048 a nd $ 0 , respectively.
11
Unifi, Inc.
Notes to Condensed Consolidated Financial Statements (Continued)
(Unaudited)
15. Restructuring Costs, Net
On February 3, 2025, UNIFI announced the pending closure of its manufacturing facility in Madison, North Carolina, and a plan to transition the associated manufacturing operations to other production facilities in North and Central America. In the fourth quarter of fiscal 2025, UNIFI sold the Madison, North Carolina facility, as well as certain machinery and equipment located thereon, for a cash purchase price of $ 45,000 (the "Madison Sale"). The net proceeds of the Madison Sale were used to repay a portion of the principal balance of the term loan and revolving credit facility outstanding under the 2022 Credit Agreement.
As part of the Madison Sale, the Company entered into an amendment to the purchase agreement for the potential payment of deferred compensation to UNIFI in the amount of (i) $ 8,000 , if certain energy supply conditions are met within two years of closing, (ii) $ 5,000 , if the same conditions are not met within two years of closing but are met within three years of closing, and (iii) up to $ 5,000 , if certain additional energy conditions beyond those referred to in (i) and (ii) are met within four years of closing. The maximum potential future payments to UNIFI are $ 13,000 . No amounts related to such future payments have been recorded in the Consolidated Financial Statements as of March 29, 2026.
Beginning in the prior year quarter ending March 30, 2025 through the second quarter of this fiscal year, UNIFI incurred transition costs related to the consolidation of Americas yarn manufacturing operations discussed above for facility closure and equipment relocation costs including asset impairments and disposals net of any salvage proceeds and employee separation costs that were recorded within Restructuring costs, net in the Consolidated Statements of Operations.
The restructuring expenses (benefits) incurred in all periods primarily impacted the Americas Segment.
A summary of the restructuring activities (benefits) consists of the following:
For the Three Months Ended
For the Nine Months Ended
March 29, 2026
March 30, 2025
March 29, 2026
March 30, 2025
Facility closure and equipment relocation costs
$
—
$
1,088
$
713
$
1,088
Employee separation costs
—
232
1,140
232
Restructuring costs, net
—
1,320
1,853
1,320
Beginning Liability
283
—
289
—
Restructuring costs, net
—
1,320
1,853
1,320
Gain on disposals of assets
—
—
125
—
Cash payments
( 267
)
( 1,094
)
( 2,251
)
( 1,094
)
Ending Liability
16
226
16
226
During October 2025, UNIFI implemented additional cost-saving initiatives that included reducing variable manufacturing costs across labor, spend, and support functions, while also eliminating salaried positions in the U.S. (the "Fiscal 2026 Profit Improvement Plan" ). During the nine months ended March 29, 2026, UNIFI incurred employee separation costs of $ 1,093 related to the Fiscal 2026 Profit Improvement Plan.
12
Unifi, Inc.
Notes to Condensed Consolidated Financial Statements (Continued)
(Unaudited)
16. Other Financial Data
Select balance sheet information is presented in the following table.
March 29, 2026
June 29, 2025
Receivables, net:
Customer receivables
$
73,181
$
76,594
Allowance for uncollectible accounts
( 1,671
)
( 2,451
)
Reserves for quality claims
( 761
)
( 912
)
Net customer receivables
70,749
73,231
Banker's acceptance notes
1,215
1,334
Other receivables
1,665
818
Total receivables, net
$
73,629
$
75,383
Inventories:
Raw materials
$
40,898
$
48,752
Supplies
12,458
11,779
Work in process
4,378
5,246
Finished goods
50,131
61,116
Gross inventories
107,865
126,893
Net realizable value adjustment
( 3,934
)
( 3,964
)
Total inventories
$
103,931
$
122,929
Other current assets:
Prepaid expenses and other
$
2,980
$
3,475
Value-added taxes receivable
2,059
2,365
Vendor deposits
1,913
2,775
Contract assets
385
607
Total other current assets
$
7,337
$
9,222
Property, plant and equipment, net:
Land
$
1,061
$
1,039
Land improvements
10,425
10,425
Buildings and improvements
127,091
126,720
Assets under finance leases
20,555
19,756
Machinery and equipment
588,598
593,771
Computers, software and office equipment
25,260
25,400
Transportation equipment
10,589
10,789
Construction in progress
562
2,153
Gross property, plant and equipment
784,141
790,053
Less: accumulated depreciation
( 614,171
)
( 608,133
)
Less: accumulated amortization – finance leases
( 7,261
)
( 8,997
)
Total property, plant and equipment, net
$
162,709
$
172,923
Other non-current assets:
Grantor trust
$
2,635
$
2,310
Investment in unconsolidated affiliate
902
1,151
Intangible assets, net
492
573
Other
636
870
Total other non-current assets
$
4,665
$
4,904
Other current liabilities:
Payroll and fringe benefits
$
7,084
$
6,815
Incentive compensation
3,637
5,652
Utilities
1,808
2,236
Deferred revenue
1,735
1,236
Property taxes, interest and other
2,044
2,960
Total other current liabilities
$
16,308
$
18,899
Other long-term liabilities:
Nonqualified deferred compensation plan obligation
$
2,568
$
2,402
Uncertain tax positions
1,327
1,227
Other
227
260
Total other long-term liabilities
$
4,122
$
3,889
13
Text extracted from the filing as submitted to EDGAR. Formatting, tables and exhibits are simplified for reading; the original document is authoritative for anything you rely on.