What changed in this filing

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Item 1A. Risk Factors

2025-08-26 compared with 2024-08-23 · 31 added, 23 removed, 224 unchanged (19% of the section changed)

13 unchanged sentences

While foreign competitors have traditionally focused on commodity production, entities are now increasingly focused on value-added products and unbranded recycled products.

Competition from unbranded recycled yarns has increased, and could drive market share losses for our flagship REPREVE brand.

Competition from unbranded recycled yarns has increased, and has resulted in market share losses for our flagship REPREVE brand.

UNIFI may not be able to continue to compete effectively with foreign-made textile and apparel products, which would materially adversely affect its business, financial condition, results of operations, or cash flows.

2 unchanged sentences

If UNIFI is unable to move production based on customer requests or other shifts in regional demand, we may lose sales and experience an adverse effect on our business, financial condition, results of operations, or cash flows.

Due to the uncertain economic and regulatory environment with regards to China, certain customers and brand partners have shifted their supply chains from China to other countries in the region.

If customers and brand partners continue to move their supply base from China, this would have a negative impact on UNIFI’s profitability in a geographic location where we have made a significant investment in people and the manufacturing partners that make up our supply chain.

A significant portion of our sales is dependent upon demand from a few large brand partners.

28 unchanged sentences

Our financial results could also be negatively impacted if one of our brands suffers substantial harm to its reputation due to a product recall, product-related litigation, the sale of counterfeit products, or other circumstances that tarnish the qualities and values represented by our brands.

Part of our strategy also includes the license of our trademarks to brand partners, customers, independent contractors, and other third parties.

For example, we license our REPREVE trademarks to brand partners that feature this trademark on their marketing materials as part of a co-branded environmental sustainability product narrative.

We license our trademarks to brands and customers through formal licensing agreements, allowing for co-branding usage and related marketing claims when our products or technologies are used.

All such usage must comply with the terms set forth in the licensing agreement as well as meet our requirements for certification and content usage.

Although we make concerted efforts to protect our brands through quality control mechanisms and contractual obligations imposed on our licensees, there is a risk that some licensees might not be in full compliance with those mechanisms and obligations.

8 unchanged sentences

UNIFI has significant foreign operations, and its consolidated results of operations and business may be adversely affected by the risks associated with doing business in foreign locations, including the risk of fluctuations in foreign currency exchange rates.

UNIFI has foreign operations in Brazil, China, Colombia, El Salvador, and Turkey and participates in a joint venture located in the U.S.

UNIFI has foreign operations in Brazil, China, Colombia, El Salvador, India, and Turkey.

In addition, to help service its customers, UNIFI from time to time engages with third-party independent contractors to provide sales and distribution, manufacturing, and other operational and administrative support services in locations around the world.

7 unchanged sentences

Additionally, UNIFI operates in countries with foreign exchange controls.

These controls may limit UNIFI’s ability to transfer funds from its international operations and joint venture or otherwise to convert local currencies into USDs.

These controls may limit UNIFI’s ability to transfer funds from its international operations or otherwise to convert local currencies into USDs.

These limitations could adversely affect UNIFI’s ability to access cash from its foreign operations.

17 unchanged sentences

Any such development would have a material adverse effect on UNIFI.

The Company is always engaged in efforts to reduce costs and rationalize assets (i.e.

improve liquidity).

In fiscal 2025, UNIFI identified under-utilized assets to sell at a premium price, which allowed for some deleveraging.

UNIFI currently holds the majority of its cash deposits with large foreign banks in our associated operating regions, and management believes that it has the ability to repatriate cash to the U.S.

10 unchanged sentences

These suppliers are also at risk with their raw material supply chains.

Any significant disruption or curtailment in the supply of any of its raw materials could cause UNIFI to reduce or cease its production for an extended period, or require UNIFI to increase its pricing, any of which could have a material adverse effect on its business, financial condition, results of operations, or cash flows.

Any significant disruption or curtailment in the supply of any of its raw materials could cause UNIFI to reduce or cease production for an extended period, or require UNIFI to increase its pricing, any of which could have a material adverse effect on its business, financial condition, results of operations, or cash flows.

A disruption at one of our facilities could harm our business and result in significant losses, lead to a decline in sales, and increase our costs and expenses.

27 unchanged sentences

General Risks

Unfavorable changes in trade policies and/or violations of existing trade policies could weaken UNIFI’s competitive position significantly and have a material adverse effect on its business.

Unfavorable changes in trade policies and tariffs and/or violations of existing trade policies could weaken UNIFI’s competitive position significantly and have a material adverse effect on its business.

A number of markets within the textile industry in which UNIFI sells its products, particularly the apparel, hosiery, and home furnishings markets, are subject to intense foreign competition.

Other markets within the textile industry in which UNIFI sells its products may in the future become subject to more intense foreign competition.

There are currently a number of trade regulations and duties in place to protect the U.S.

There are currently a number of trade regulations, duties, and tariffs in place to protect the U.S.

textile industry against competition from low-priced foreign producers, such as those in China, India, and Vietnam.

Political and policy-driven influences are subjecting international trade regulations to significant volatility.

Future changes in such trade regulations or duties may make the price of UNIFI’s products less attractive than the goods of its competitors or the finished products of a competitor in the supply chain, which could have a material adverse effect on UNIFI’s business, financial condition, results of operations, or cash flows.

Such changes in import duties in the U.S.

Future changes in such trade regulations, duties, or tariffs may make the price of UNIFI’s products less attractive than the goods of its competitors or the finished products of a competitor in the supply chain, which could have a material adverse effect on UNIFI’s business, financial condition, results of operations, or cash flows.

Such changes in import duties and tariffs in the U.S.

and other countries in which we operate might also result in increased direct and indirect costs on items imported to support UNIFI’s operations and/or countervailing or responsive changes applicable to exports of our products outside the U.S.

1 unchanged sentence

and into certain other countries in the Americas region in which UNIFI competes.

Illegal transshipment involves circumventing duties by falsely claiming that textiles and apparel are products of a particular country of origin (or include yarn of a particular country of origin) to avoid paying higher duties or to receive benefits from regional free trade agreements, such as USMCA/NAFTA and CAFTA-DR.

Illegal transshipment involves circumventing duties by falsely claiming that textiles and apparel are products of a particular country of origin (or include yarn of a particular country of origin) to avoid paying higher duties and tariffs or to receive benefits from regional free trade agreements, such as USMCA/NAFTA and CAFTA-DR.

If illegal transshipments are not monitored, and if enforcement is not effective to limit them, these shipments could have a material adverse effect on UNIFI’s business, financial condition, results of operations, or cash flows.

12 unchanged sentences

Additionally, weaknesses in energy infrastructure could result in supply disruptions that could indirectly affect our operations and could adversely impact our results of operations and cash flows.

In March 2024, the SEC issued a final rule that requires registrants to provide climate disclosures in their annual reports and registration statements.

The disclosure requirements of the new rule, as they stand currently, become effective for UNIFI beginning in fiscal 2027 and continue through fiscal 2032.

A legal challenge to the new rule has been filed in the U.S.

Court of Appeals and the SEC has announced that it would voluntarily stay its final climate disclosure rule pending judicial review.

As such, the final disclosure requirements and reporting timeline are currently unknown, as is the cost of compliance with the new disclosure requirements in their final form.

In March 2024, the SEC issued a final rule that required registrants to provide climate disclosures in their annual reports and registration statements.

The disclosure requirements of the new rule would have become effective for UNIFI beginning in fiscal 2027 and continued through fiscal 2032.

A legal challenge to the new rule was filed in the U.S.

Court of Appeals shortly after the SEC’s adoption and the SEC issued a voluntarily stay of the climate rule pending judicial review.

In March 2025, the SEC announced that it had voted to end its defense of the final rule.

As such, the final disclosure requirements, if any, and reporting timeline are currently unknown.

While UNIFI may not be required to make climate disclosures under the SEC’s rules, the Company may need to make disclosure under state or international climate-related rules in the regions in which we do business.

Unresolv ed Staff Comments

16 unchanged sentences

We have experienced targeted and non-targeted cybersecurity attacks and incidents in the past, and we could in the future experience similar attacks.

For the years presented, we did not identify any risks from cybersecurity threats, including as a result of any previous cybersecurity incidents, that had, or were reasonably likely to have, a material affect on the Company, including our business strategy, results of operations, or financial condition.

For the years presented, we did not identify any risks from cybersecurity threats , including as a result of any previous cybersecurity incidents, that had, or were reasonably likely to have, a material effect on the Company, including our business strategy, results of operations, or financial condition.

For additional information regarding the risks from cybersecurity threats we face, see “ Operational Risks - Our business and operations could suffer in the event of cybersecurity breaches," in "Item 1A.

34 unchanged sentences

Yadkinville, North Carolina

Reidsville, North Carolina

4 unchanged sentences

Madison, North Carolina

Manufacturing facility

Madison, North Carolina

Ciudad Arce, El Salvador

1 unchanged sentence

Ciudad Arce, El Salvador

Bogota, Colombia

Bogota (Soacha), Colombia

Manufacturing facility

9 unchanged sentences

Suzhou, China

Management believes all of UNIFI’s operating properties are well maintained and in good condition.

In fiscal 2024, UNIFI’s manufacturing facilities in the Americas Segment operated below capacity for most of the year, primarily due to a decline in demand throughout the apparel supply chains.

Management does not perceive any capacity constraints in the foreseeable future.

UNIFI sold two properties within the Americas Segment during fiscal 2025;

a warehouse located in Yadkinville, North Carolina and manufacturing facility located in Madison, North Carolina.

Management does not anticipate any capacity constraints in the foreseeable future.

Vacant Properties

In addition to the above sites, the Company owns approximately 184 acres in the Americas Segment, split approximately equally between Rockingham and Yadkin Counties and approximately 26 acres in the Brazil Segment as of June 29, 2025.

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 1A. Risk Factors