What changed in this filing

/stocks — the workspaceLOADING

Item 1. Business

2025-08-26 compared with 2024-08-23 · 47 added, 44 removed, 276 unchanged (25% of the section changed)

6 unchanged sentences

UNIFI has three reportable segments based on the primary geographies in which UNIFI distributes its products:

• The Americas Segment primarily manufactures and sells recycled and synthetic products to yarn manufacturers, knitters and weavers that produce yarn and/or fabric for the apparel, hosiery, home furnishings, automotive, industrial, medical, and other end‑use markets principally in North and Central America.

• The Americas Segment primarily manufactures and sells recycled and synthetic textile products to yarn manufacturers, knitters and weavers that produce yarn and/or fabric for the apparel, hosiery, home furnishings, automotive, 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 recycled and synthetic products to knitters and weavers that produce fabric for the apparel, home furnishings, automotive, industrial, and other end-use markets principally in Brazil.

• The Brazil Segment primarily manufactures and sells recycled and synthetic textile products to knitters and weavers that produce fabric for the apparel, home furnishings, automotive, industrial, and other end-use markets principally in Brazil.

The Brazil Segment includes a manufacturing location and sales offices in Brazil.

• The Asia Segment primarily sources recycled and synthetic products from third party suppliers and sells to yarn manufacturers, knitters, and weavers that produce fabric for the apparel, home furnishings, automotive, industrial, and other end-use markets principally in Asia and Europe.

The Asia Segment has no manufacturing assets and includes sales offices in China, Turkey, and Hong Kong.

• The Asia Segment primarily sources recycled and synthetic textile products from third party suppliers and sells to yarn manufacturers, knitters, and weavers principally in Asia and Europe that produce fabric for the apparel, automotive, home furnishings, industrial, and other end-use markets.

The Asia Segment has no manufacturing assets and includes sales offices in China, Turkey, Hong Kong, and India.

Other information for UNIFI’s reportable segments is provided in Note 24, “Business Segment Information,” to the accompanying consolidated financial statements.

16 unchanged sentences

Fiscal 2025 Financial Performance

In fiscal 2024, while sales volumes increased, lower sales prices in response to lower raw material input costs for the Americas Segment adversely impacted our ability to generate profits and cash flows.

We continued to experience a weak global demand environment which resulted in sales levels that were well below historical trends and continued pricing pressures and inflationary impacts that weighed on gross margins.

In response to weak operating results, we implemented a Profitability Improvement Plan in fiscal 2024, which consisted primarily of workforce reductions and sales transformation efforts intended to lower operating expenses and increase gross margin opportunities.

In fiscal 2025, despite recent improvements in sales volumes and ongoing growth in Central America, the Americas Segment continued to experience customer-demand headwinds, along with continued pricing pressures and lower than anticipated manufacturing utilization that weighed on gross margins.

Due to the continued unfavorable impact of low facility utilization and productivity levels in the Americas Segment, UNIFI adopted cost savings measures which included the consolidation of yarn manufacturing operations in the Americas Segment with the closure and sale of the Madison, North Carolina facility.

Despite the difficult operating environment, we have continued to focus on commercializing value-added products and creating differentiation through innovation and sustainability, while also expanding our sales channels beyond traditional apparel end-uses.

In fiscal 2024, the Brazil Segment's operating results improved sequentially throughout the year with normal pricing dynamics and market share gains following the exit of a domestic competitor overcoming early competitive import pricing pressures.

In fiscal 2024, the Asia Segment's results increased primarily due to (i) a strong sales mix and (ii) higher sales volumes compared to fiscal 2023 despite continued weak global demand.

The Asia Segment is better able to withstand volatility in product demand due to its asset-light model and the lack of fixed cost absorption that can be unfavorable in times of weaker demand for asset intensive operations like our Americas and Brazil Segments.

Beyond the specific demand challenges within the textile industry, our business was adversely impacted by:

(i) the impact of inflation on consumer spending and (ii) rising interest rates for consumers and customers, including the impact on the carrying costs of customer inventories.

The existing challenges and future uncertainty, particularly for global demand, labor productivity, and potential further inflation, could worsen and/or continue for prolonged periods, materially impacting our financial performance.

The need for future selling price adjustments could impact our ability to retain current customer programs and compete successfully for new programs in certain regions.

In fiscal 2025, the Brazil Segment's operating results continued to perform well with steady demand and market share gains, despite competitive import pricing pressures and unfavorable foreign currency impacts.

In fiscal 2025, the Asia Segment's results decreased primarily due to weak demand and a change in sales mix of REPREVE products.

The sales volumes in the Asia Segment, particularly for apparel, were unfavorably impacted by volatility from customer-demand headwinds and tariffs placed upon many countries outside of the United States in the second half of this fiscal year.

The Asia Segment is better able to withstand volatility in product demand due to its asset-light model.

We remain committed to restoring and increasing profitability across our global businesses, while enhancing and delivering upon the demand for value-added innovative and sustainable products.

Global Conflicts

While we recognize the disruption to global markets and supply chains caused by the conflicts in Ukraine and the Middle East, we have not been directly impacted.

Indirectly, we recognize that additional or prolonged impacts to the petroleum or other global markets could cause further inflationary pressures to our global raw material costs or unforeseen adverse impacts.

Beyond the specific demand challenges within the textile industry, our business was adversely impacted by:

(i) the impact of inflation on consumer spending, (ii) elevated interest rates for consumers and customers, including the impact on the carrying costs of customer inventories, and (iii) the volatility resulting from trade and regulatory matters (including tariffs).

A tariff structure that disproportionately impacts one country or region over another may result in a shift in manufacturing or flow of goods particularly as it relates to textile production across Asia and Central America.

Fortunately, UNIFI has been expanding its supply chain and business model across multiple geographies over the last several years.

Particularly, (i) our feedstock supply spans multiple markets, (ii) our commercial position in the Central American market remains key to servicing compliant business for USMCA and CAFTA-DR programs, and (iii) we have expanded our asset light model beyond China, most recently with the addition of Unifi Textiles India in October 2024.

Each of these concepts affords us diversity in this dynamic trade environment and greater flexibility in servicing our customer base.

Specific to other ongoing geopolitical tensions, we recognize the disruption to global markets and supply chains caused by the conflicts in Ukraine and the Middle East, however we have not been directly impacted.

In the early 2000s, by recycling our own production waste into useful polyester fibers, we took the first steps toward building an important supply chain with a focus on sustainability and environmental responsibility.

12 unchanged sentences

Of our consolidated net sales in fiscal 2025, 2024, and 2023, REPREVE Fiber sales comprised 31%, 32%, and 30%, or $174,855, $188,517, and $186,161, respectively.

The lower REPREVE Fiber sales for fiscal 2023 and 2024 were driven primarily by weak global demand for both years.

Capital Investments

1 unchanged sentence

We are encouraged by the performance metrics surrounding the eAFK Evo texturing machines currently operating in our facilities, and we expect these upgrades to generate meaningful investment returns in the future when product demand recovers.

Due to the weak demand environment in fiscal 2023 and continued weakness expected in fiscal 2024, UNIFI negotiated two contract modifications with the equipment vendor.

Due to the weak demand environment in fiscal 2023 and 2024, UNIFI negotiated two contract modifications with the equipment vendor.

At that time, approximately 75% of the project had been completed in the Americas and 100% had been completed in Brazil.

The contract modifications allowed UNIFI to delay the remaining equipment purchases and installation activities until September 2025.

This action allows for improved short- and mid-term liquidity in light of the current subdued levels of sales and facility utilization and allows for a better matching of future capital expenditures with expected higher levels of future business activity.

In fiscal 2025, we expect to invest between $10,000 and $12,000 in capital projects, including making further improvements in production capabilities and technological enhancements in the Americas and annual maintenance capital expenditures.

In the fourth quarter of fiscal 2025, UNIFI terminated the overall contract in exchange for the forfeiture of $1,448 in deposits which is included in Restructuring costs within the Consolidated Statements of Operations.

These actions allow for (i) improved short- and mid-term liquidity in light of the current subdued levels of sales and facility utilization and (ii) a better matching of future capital expenditures with the consolidation of UNIFI's yarn manufacturing operations.

In fiscal 2026, we expect to invest between $8,000 and $12,000 in capital projects, primarily relating to routine annual maintenance capital expenditures.

Share Repurchases

8 unchanged sentences

Our operations in the U.S., El Salvador, and Colombia operate under the Dominican Republic—Central America Free Trade Agreement (“CAFTA-DR”) and the United States-Mexico-Canada Agreement (“USMCA”).

Prior to the establishment of the USMCA, we benefited from a similar, historical agreement known as the North American Free Trade Agreement (“NAFTA”).

Throughout fiscal 2022 and 2023, we experienced adverse pressure from rising input costs, competitive headwinds, and weakening manufacturing productivity.

Prior to the establishment of the USMCA, we benefited from a similar agreement known as the North American Free Trade Agreement (“NAFTA”).

Throughout fiscal 2023, we experienced adverse pressure from rising input costs, competitive headwinds, and weakening manufacturing productivity.

In addition, in fiscal 2023, 2024, and 2025, the Americas Segment experienced lower volumes as a result of lower global demand in connection with the inventory destocking efforts of major brands and retailers.

12 unchanged sentences

We are encouraged by programs undertaken with key brands and retailers that benefit from the diversification and innovation of our global portfolio.

During fiscal 2025, customer-demand headwinds resulted in depressed volumes in Asia and in the second half of the fiscal year, tariffs placed upon many foreign countries resulted in additional demand volatility due to the recent actions taken by the U.S.

during trade-related negotiations.

Looking ahead, we expect to expand into additional markets in India, Europe, Africa, and the Middle East utilizing the asset-light supply chain and service model that has been successful for us in Asia.

50 unchanged sentences

market against the respective imported yarns.

Furthermore, we expect continued governmental support on these efforts as both presidential candidates have concerns regarding the impacts of Chinese imports.

The industry in which UNIFI operates is global and highly competitive.

12 unchanged sentences

In fiscal 2024, a major competitor, AKRA, S.A.

de C.V., closed its polyester manufacturing facility in Monterrey, Mexico providing us an opportunity to gain additional market share.

UNIFI’s major competitors in Brazil are traders of imported yarns and fibers.

In fiscal 2024, our largest domestic competitor, Petroquimica Suape (Companhia Petroquimica de Pernambuco), halted textured yarn production providing us an opportunity to gain additional market share in the region.

UNIFI’s operations in Asia face competition from multiple yarn manufacturers in that region and identification of them is not feasible.

However, much of our portfolio in the Asia region is advantaged by specialty and recycled products and a global sourcing and support model that assists in differentiation.

de C.V., closed its polyester manufacturing facility in Monterrey, Mexico.

UNIFI’s major competitors for nylon yarn sales in the U.S.

1 unchanged sentence

and McMichael Mills, Inc.

As UNIFI is the only domestic producer of textured polyester in Brazil, our major competitors in Brazil are traders of imported yarns and fibers.

UNIFI’s operations in Asia face competition from multiple yarn manufacturers in that region and identification of them is not feasible.

However, much of our portfolio in the Asia region is advantaged by specialty and recycled products and a global sourcing and support model that assists in differentiation.

Globally, competitors for our REPREVE products include recycled brands from Far Eastern New Century, Tiejin, Radici, and Polygenta.

3 unchanged sentences

is the primary supplier of POY.

The primary supplier of nylon raw materials for the Americas Segment are UNF America, LLC (“UNFA”);

The LYCRA Company;

and Nilit Ltd.

The primary suppliers of nylon raw materials for the Americas Segment are UNF America, LLC (“UNFA”);

and The LYCRA Company.

UNFA is a joint venture owned 50% by UNIFI.

1 unchanged sentence

The majority of plastic bottles we utilize in the U.S.

are obtained in open-market transactions from various entities throughout the U.S., while our Asian subsidiaries source recycled materials from various countries and entities throughout Asia.

For its operations in the U.S., UNIFI produces and buys certain of its raw material fibers for Compliant Yarns from a variety of sources in the U.S., UNIFI produces a portion of its Chip requirements in its REPREVE Recycling Center and purchases the remainder of such requirements primarily from external suppliers for use in its domestic spinning facility to produce POY.

are obtained in open-market transactions from recycling companies and municipalities throughout the U.S., while our Asian subsidiaries source recycled materials from various countries and entities throughout Asia.

For its operations in the U.S., UNIFI produces and buys certain of its raw material fibers for Compliant Yarns from a variety of sources in the U.S., UNIFI produces a portion of its Chip requirements in its REPREVE Recycling Center and purchases the remainder of such requirements from external suppliers for use in its domestic spinning facility to produce POY.

In addition, UNIFI purchases nylon and polyester products for resale from various suppliers.

Although UNIFI does not generally have difficulty obtaining its raw material requirements, UNIFI has, in the past, experienced interruptions or limitations in the supply of certain raw materials.

Although UNIFI does not generally have difficulty meeting its raw material requirements, UNIFI has, in the past, experienced interruptions or limitations in the supply of certain raw materials.

UNIFI’s bottle processing facility in Reidsville, North Carolina provides a high-quality source of Flake for the REPREVE Recycling Center as well as for sale to external parties.

12 unchanged sentences

In addition to the above, UNIFI combines its research and development efforts with the demands of customers and markets to develop innovative technologies that enhance yarn characteristics.

Application of these technologies allows for various, separate benefits, including:

Application of these technologies allows for a diversity of benefits, including:

water repellency, flame retardation, soil release, enhanced color-fastness achieved with less water use, and protection from ultra-violet rays, among other attributes.

5 unchanged sentences

UNIFI’s consolidated net sales are not materially dependent on a single direct customer and no single direct customer accounts for 10% or more of UNIFI’s consolidated net sales.

In fiscal 2024, OIA Global comprised 13% of the Asia Segment's sales and Milliken & Company comprised 10% of the Americas Segment's sales.

In fiscal 2025, OIA Global comprised 10% of the Asia Segment's sales.

UNIFI’s top 10 direct customers accounted for approximately 24% of consolidated net sales for fiscal 2025 and approximately 26% of receivables as of June 29, 2025.

1 unchanged sentence

Sales and Marketing

UNIFI employs an internal sales force operating out of sales offices primarily in the U.S., Brazil, China, El Salvador, Colombia, Turkey, and Europe.

UNIFI employs an internal sales force operating out of sales offices primarily in the U.S., Brazil, China, El Salvador, Colombia, Turkey, India, and Europe.

UNIFI also relies on independent sales agents for sales in several other countries.

UNIFI seeks to create strong customer relationships and to build and strengthen those relationships throughout the supply chain.

Through having frequent communications with customers, partnering in product development, and engaging key downstream brands and retailers, UNIFI has created significant pull-through sales and brand recognition for its products.

Through frequent communications with customers, partnering in product development, and engaging key downstream brands and retailers, UNIFI has created significant pull-through sales and brand recognition for its products.

For example, UNIFI works with brands and retailers to educate and create demand for its products, including recent engagements involving REPREVE, and other performance technology products at multiple events and venues in the U.S.

3 unchanged sentences

In addition, UNIFI is enhancing co-branding activations with integrated point-of-sale and online marketing with popular brands and retailers to enable consumers to find REPREVE and other performance technology products in multiple retail channels.

Our sales and marketing strategy leverages a multi-channel digital approach, including targeted social media collaborations and campaigns, dynamic website engagement, and strategic media outreach, to enhance brand visibility, drive customer acquisition, and support product conversion across key markets.

Based on the establishment of many commercial and branded programs, this strategy has been successful for UNIFI.

30 unchanged sentences

The number of employees in each of the Americas, Brazil, and Asia Segments and the corporate office were approximately 1,700, 800, 100, and 100, respectively, at June 29, 2025.

In fiscal 2025, UNIFI reduced its headcount due to the transition of the Madison, North Carolina manufacturing operations to other production facilities in North and Central America.

While employees of our Brazil Segment are unionized, none of the labor forces employed by UNIFI’s domestic or other foreign subsidiaries are currently covered by a collective bargaining agreement.

10 unchanged sentences

UNIFI is not significantly impacted by seasonality;

however, UNIFI typically experiences its highest sales volumes in the fourth quarter of its fiscal years.

however, UNIFI typically experiences its highest sales volumes in the fourth quarter of its fiscal year.

Excluding the effects of fiscal years with 53 weeks rather than 52 weeks, the most significant effects on UNIFI’s results of operations for particular periods during a year are due to planned manufacturing shutdowns by either UNIFI or its customers for certain holiday or traditional shutdown periods.

11 unchanged sentences

However, we monitor our input costs closely, and we expect to maintain our ability to respond quickly to cost fluctuations to minimize any potential adverse impacts to earnings.

Beyond the current inflationary environment experienced in fiscal 2022, 2023, and 2024, UNIFI expects that costs could continue to rise long term for certain consumables used to produce and ship its products, as well as for its utilities and labor.

Beyond the inflationary environment experienced during fiscal 2023 through 2025, UNIFI expects that costs could continue to rise long-term for certain consumables used to produce and ship its products, as well as for its utilities and labor.

UNIFI expects to mitigate the impacts of such rising costs through increased operational efficiencies and increased selling prices, but rising inflation could be a factor that negatively impacts UNIFI’s profitability.

In the past, selling price adjustments were primarily associated with changes in the price of polyester and nylon raw materials, but the current economic environment requires that selling price adjustments accommodate significant increases in all categories of input costs, including packaging, supplies, additives, and labor.

For the majority of our portfolio, we were able to implement selling price adjustments to protect gross margins in fiscal 2022.

For the majority of our portfolio, we have been able to implement selling price adjustments to protect gross margins.

However, some selling price adjustments in the U.S.

and Central America were not realized rapidly enough in fiscal 2022 to avoid temporary gross margin declines in certain portions of our portfolio.

While we navigated the dynamic cost environment during fiscal 2022 through 2024 better than in earlier prior years, fixed cost absorption and manufacturing productivity have adversely impacted our gross margin and remain current headwinds to UNIFI’s profitability, most notably in the Americas Segment.

and Central America were not realized rapidly enough to avoid temporary gross margin declines in certain portions of our portfolio.

While we navigated the dynamic cost environment during fiscal 2023 through 2025 better than in earlier prior years, low manufacturing utilization and manufacturing productivity have adversely impacted our gross margin and remain current headwinds to UNIFI’s profitability, most notably in the Americas Segment.

Environmental Matters

34 unchanged sentences

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1. Business