false000010072600001007262025-02-032025-02-03
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
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Date of Report (Date of earliest event reported): February 03, 2025 |
UNIFI, INC.
(Exact name of registrant as specified in its charter)
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New York |
1-10542 |
11-2165495 |
(State or other jurisdiction
of incorporation) |
(Commission File Number) |
(IRS Employer
Identification No.) |
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7201 West Friendly Avenue |
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Greensboro, North Carolina |
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27410 |
(Address of principal executive offices) |
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(Zip Code) |
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Registrant’s telephone number, including area code: (336) 294-4410 |
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
☐Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Securities registered pursuant to Section 12(b) of the Act:
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Title of each class
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Trading
Symbol(s) |
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Name of each exchange on which registered
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Common Stock, par value $0.10 per share |
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UFI |
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New York Stock Exchange |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§ 230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§ 240.12b-2 of this chapter).
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Item 2.02. Results of Operations and Financial Condition.
On February 5, 2025, the Company issued a press release announcing its operating results for the fiscal second quarter ended December 29, 2024, a copy of which is attached hereto as Exhibit 99.1.
Item 2.05. Costs Associated with Exit or Disposal Activities.
On February 3, 2025, Unifi, Inc. issued a news release announcing that its wholly-owned subsidiary, Unifi Manufacturing, Inc. (together referred to as “UNIFI” or the “Company”), will be closing its facility in Madison, North Carolina, and transitioning those manufacturing operations to other production facilities in North and Central America. The footprint reduction will improve efficiency and allow for a significant increase in utilization rates at the other production facilities.
The consolidation of the Company’s yarn manufacturing operations is expected to result in the elimination of up to 250 positions at the Madison facility. The property is currently being marketed for sale and it is anticipated that operations at the Madison facility will cease by the end of September 2025. UNIFI expects to incur restructuring charges of approximately $5.0 million to $7.5 million related to the facility’s closure. The estimated range of restructuring charges includes $2.0 million to $3.5 million for equipment relocation or disposal costs, $2.0 million to $3.0 million of costs for employee retention or separation, and up to $1.0 million for other closure-related costs including asset impairment. UNIFI expects that the restructuring charges, other than any asset impairment, will consist of cash payments, which are anticipated to begin in the third quarter of fiscal 2025 and continue through the end of this calendar year. Total net book value of fixed assets associated with the Madison facility was $9.0 million as of December 29, 2024.
The aforementioned restructuring amounts represent the Company’s best estimates as of the filing date and such estimates are subject to change during the facility closing process.
Item 7.01. Regulation FD Disclosure.
On February 6, 2025, the Company will host a conference call to discuss its operating results for the fiscal second quarter ended December 29, 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.
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: |
February 5, 2025 |
By: |
/s/ ANDREW J. EAKER |
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Andrew J. Eaker
Executive Vice President & Chief Financial Officer
Treasurer |
Exhibit 99.1
UNIFI®, Makers of REPREVE®, Announces Second Quarter Fiscal 2025 Results
Continued efficiency initiatives in Americas better position Company for long-term revenue and profit growth
GREENSBORO, N.C., February 5, 2025 – Unifi, Inc. (NYSE: UFI) (together with its consolidated subsidiaries, “UNIFI”), leading innovator in recycled and synthetic yarn, today released operating results for the second fiscal quarter ended December 29, 2024.
Second Quarter Fiscal 2025 Overview
•Net sales were $138.9 million, an increase of 1.4% from the second quarter of fiscal 2024, primarily driven by higher sales volumes.
•Revenues from REPREVE Fiber products were $43.3 million and represented 31% of net sales, compared to $45.7 million or 33% of net sales for the second quarter of fiscal 2024.
•Gross profit was $0.5 million and gross margin was 0.4%, compared to gross profit of $1.6 million and 1.2% for the second quarter of fiscal 2024.
•Net loss was $11.4 million, or $0.62 per share, compared to a net loss of $19.8 million, or $1.10 per share, for the second quarter of fiscal 2024. Adjusted Net Loss was $15.7 million, which excludes a $4.3 million gain on a warehouse sale, compared to Adjusted Net Loss of $14.7 million, which excluded $5.1 million of restructuring costs.
•Adjusted EBITDA*, which also excludes a $4.3 million gain on a warehouse sale, was $(5.8) million, compared to $(5.5) million for the second quarter of fiscal 2024, which excluded $5.1 million of restructuring costs.
•Subsequent to quarter end, UNIFI announced the transition of certain manufacturing operations to enhance operating efficiency, lower fixed costs, improve profitability, and further strengthen the balance sheet.
Eddie Ingle, Chief Executive Officer of Unifi, Inc., stated, “While our results for the second quarter came in slightly below our expectations due to global and localized pressures, we’ve taken numerous proactive actions to position the business for more durable and profitable future growth. This is evident by the recent increase in customer orders and interest we are seeing for some of our Beyond Apparel initiatives and REPREVE Fiber products. Further, to help support this expected growth and make UNIFI a stronger operating company, we are taking steps to optimize our business by consolidating our U.S. manufacturing footprint, which will make us a leaner and more profitable
organization without having to sacrifice our ability to service the market. As a result, we believe we are in a better position to drive long-term shareholder value.”
Second Quarter Fiscal 2025 Compared to Second Quarter Fiscal 2024
Net sales increased to $138.9 million from $136.9 million, primarily due to higher sales volumes, partially offset by a weaker sales mix for the Asia Segment.
Gross profit decreased to $0.5 million from $1.6 million. Asia Segment gross profit decreased by $1.9 million, primarily due to a less favorable sales mix and pricing dynamics in the region. Americas Segment gross profit was flat, primarily as production and sales gains were offset by inflationary pressures. Brazil Segment gross profit improved by $0.6 million, primarily due to pricing and market share gains.
Operating loss improved to $7.6 million from $17.6 million. Fiscal 2025 included a gain on a warehouse sale and fiscal 2024 included restructuring costs, representing the primary change in operating loss. Net loss was $11.4 million compared to $19.8 million. Adjusted Net Loss was $15.7 million, which excluded $4.3 million for a gain on a warehouse sale, compared to Adjusted Net Loss of $14.7 million for the second quarter of fiscal 2025, which excluded $5.1 million of restructuring costs. Adjusted EBITDA* was $(5.8) million compared to $(5.5) million, and each excluded the same adjustments.
Fiscal 2025 Outlook
The below outlook assumes no meaningful changes in business activities resulting from the evolving tariff and trade negotiations.
Third Quarter Fiscal 2025
UNIFI expects the following third quarter fiscal 2025 results:
•Net sales and Adjusted EBITDA** improving sequentially from the second quarter of fiscal 2025, primarily driven by higher revenues for the Americas Segment.
•Capital expenditures between $5.0 million and $6.0 million, increasing sequentially for the transition of production out of one North Carolina facility.
•Continued volatility in the effective tax rate.
Full Year Fiscal 2025
UNIFI updated its full year outlook and now expects the following for fiscal 2025:
•Net sales approximately equal to fiscal 2024, with second half fiscal 2025 revenues improving sequentially from the first half of fiscal 2025.
•Gross profit, gross margin, and Adjusted EBITDA** expected to increase from fiscal 2024 to fiscal 2025, while second half fiscal 2025 underlying profit generation will be partially offset by U.S. manufacturing transition costs.
•Capital expenditures between $14.0 million and $16.0 million, which includes amounts related to U.S. manufacturing transition activities.
Ingle concluded, “We are excited about the future, and we are well-positioned to support our customers’ needs as the demand for sustainable and innovative solutions continues to grow. As we look ahead, our focus will continue to remain on optimizing our business, improving our profitability, and making strategic investments in innovation that will drive future growth and create value for all our stakeholders.”
* Adjusted Net Loss and Adjusted EBITDA 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.
Second Quarter Fiscal 2025 Earnings Conference Call
UNIFI will provide additional commentary regarding its second quarter fiscal 2025 results and other developments during its earnings conference call on February 6, 2025, at 8:00 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 leader in fiber science and sustainable synthetic textiles. Using proprietary recycling technology, UNIFI is a pioneer in scaling the transformation of post-industrial and post-consumer waste into sustainable products. Through REPREVE, the world’s leading brand of traceable, recycled fiber and resin, UNIFI is changing the way industries think about the materials they use – and reuse. A vertically-integrated manufacturer, the company has direct operations in the United States, Colombia, El Salvador, and Brazil, and sales offices all over the world. UNIFI envisions a future where circular and sustainable solutions are the only choice. For more information about UNIFI, visit www.unifi.com.
Contact information:
Josh Carroll or Blaine McNulty
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 Six Months Ended |
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December 29, 2024 |
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December 31, 2023 |
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December 29, 2024 |
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December 31, 2023 |
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Net sales |
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$ |
138,880 |
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$ |
136,917 |
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$ |
286,252 |
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$ |
275,761 |
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Cost of sales |
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138,346 |
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135,281 |
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276,260 |
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274,700 |
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Gross profit |
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534 |
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1,636 |
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9,992 |
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1,061 |
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Selling, general and administrative expenses |
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12,921 |
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12,408 |
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24,763 |
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24,017 |
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(Benefit) provision for bad debts |
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(96 |
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1,289 |
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216 |
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1,080 |
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Gain on sale of assets |
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(4,296 |
) |
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— |
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(4,296 |
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— |
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Restructuring costs |
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— |
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5,101 |
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— |
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5,101 |
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Other operating (income) expense, net |
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(431 |
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481 |
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89 |
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535 |
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Operating loss |
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(7,564 |
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(17,643 |
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(10,780 |
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(29,672 |
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Interest income |
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(177 |
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(697 |
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(434 |
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(1,278 |
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Interest expense |
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2,398 |
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2,613 |
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4,905 |
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5,098 |
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Equity in loss (earnings) of unconsolidated affiliates |
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262 |
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(93 |
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251 |
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(293 |
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Loss before income taxes |
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(10,047 |
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(19,466 |
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(15,502 |
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(33,199 |
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Provision (benefit) for income taxes |
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1,345 |
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380 |
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3,522 |
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(83 |
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Net loss |
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$ |
(11,392 |
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$ |
(19,846 |
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$ |
(19,024 |
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$ |
(33,116 |
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Net loss per common share: |
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Basic |
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$ |
(0.62 |
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$ |
(1.10 |
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$ |
(1.04 |
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$ |
(1.83 |
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Diluted |
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$ |
(0.62 |
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$ |
(1.10 |
) |
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$ |
(1.04 |
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$ |
(1.83 |
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Weighted average common shares outstanding: |
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Basic |
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18,288 |
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18,110 |
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18,272 |
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18,097 |
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Diluted |
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18,288 |
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18,110 |
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18,272 |
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18,097 |
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CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
(In thousands)
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December 29, 2024 |
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June 30, 2024 |
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ASSETS |
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Cash and cash equivalents |
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$ |
18,669 |
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$ |
26,805 |
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Receivables, net |
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68,934 |
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79,165 |
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Inventories |
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132,910 |
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131,181 |
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Income taxes receivable |
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1,179 |
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164 |
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Other current assets |
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9,457 |
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11,618 |
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Total current assets |
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231,149 |
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248,933 |
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Property, plant and equipment, net |
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183,344 |
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193,723 |
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Operating lease assets |
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8,900 |
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8,245 |
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Deferred income taxes |
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4,437 |
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5,392 |
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Other non-current assets |
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11,829 |
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12,951 |
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Total assets |
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$ |
439,659 |
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$ |
469,244 |
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LIABILITIES AND SHAREHOLDERS’ EQUITY |
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Accounts payable |
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$ |
35,795 |
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$ |
43,622 |
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Income taxes payable |
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921 |
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754 |
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Current operating lease liabilities |
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2,415 |
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2,251 |
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Current portion of long-term debt |
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12,025 |
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12,277 |
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Other current liabilities |
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16,054 |
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17,662 |
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Total current liabilities |
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67,210 |
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76,566 |
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Long-term debt |
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122,979 |
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117,793 |
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Non-current operating lease liabilities |
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6,597 |
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6,124 |
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Deferred income taxes |
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1,869 |
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1,869 |
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Other long-term liabilities |
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3,813 |
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3,507 |
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Total liabilities |
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202,468 |
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205,859 |
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Commitments and contingencies |
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Common stock |
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1,835 |
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1,825 |
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Capital in excess of par value |
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72,490 |
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70,952 |
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Retained earnings |
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240,373 |
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259,397 |
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Accumulated other comprehensive loss |
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(77,507 |
) |
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(68,789 |
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Total shareholders’ equity |
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237,191 |
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263,385 |
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Total liabilities and shareholders’ equity |
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$ |
439,659 |
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$ |
469,244 |
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CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(In thousands)
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For the Six Months Ended |
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December 29, 2024 |
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December 31, 2023 |
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Cash and cash equivalents at beginning of period |
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$ |
26,805 |
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$ |
46,960 |
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Operating activities: |
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Net loss |
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(19,024 |
) |
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(33,116 |
) |
Adjustments to reconcile net loss to net cash (used) provided by operating activities: |
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Equity in loss (earnings) of unconsolidated affiliates |
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251 |
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(293 |
) |
Depreciation and amortization expense |
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12,881 |
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13,988 |
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Non-cash compensation expense |
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1,658 |
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1,387 |
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Gain on sale of assets |
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(4,296 |
) |
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— |
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Deferred income taxes |
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628 |
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(1,714 |
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Other, net |
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216 |
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(120 |
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Changes in assets and liabilities |
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(7,318 |
) |
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22,385 |
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Net cash (used) provided by operating activities |
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(15,004 |
) |
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2,517 |
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Investing activities: |
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Capital expenditures |
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(4,944 |
) |
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(5,982 |
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Proceeds from the sale of assets |
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8,094 |
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|
488 |
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Net cash provided (used) by investing activities |
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3,150 |
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(5,494 |
) |
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Financing activities: |
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Proceeds from long-term debt |
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101,451 |
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80,600 |
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Payments on long-term debt |
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(96,547 |
) |
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(88,740 |
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Other, net |
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(306 |
) |
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(27 |
) |
Net cash provided (used) by financing activities |
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4,598 |
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(8,167 |
) |
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Effect of exchange rate changes on cash and cash equivalents |
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(880 |
) |
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|
163 |
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Net decrease in cash and cash equivalents |
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(8,136 |
) |
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(10,981 |
) |
Cash and cash equivalents at end of period |
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$ |
18,669 |
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$ |
35,979 |
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BUSINESS SEGMENT INFORMATION
(Unaudited)
(In thousands)
Net sales and gross profit (loss) 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 Six Months Ended |
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December 29, 2024 |
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December 31, 2023 |
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December 29, 2024 |
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December 31, 2023 |
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Americas |
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$ |
83,095 |
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$ |
80,549 |
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$ |
169,378 |
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$ |
162,122 |
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Brazil |
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27,482 |
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26,061 |
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61,792 |
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|
55,970 |
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Asia |
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28,303 |
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30,307 |
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55,082 |
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|
|
57,669 |
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Consolidated net sales |
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$ |
138,880 |
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$ |
136,917 |
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$ |
286,252 |
|
|
$ |
275,761 |
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For the Three Months Ended |
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For the Six Months Ended |
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|
December 29, 2024 |
|
|
December 31, 2023 |
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December 29, 2024 |
|
|
December 31, 2023 |
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Americas |
|
$ |
(6,540 |
) |
|
$ |
(6,738 |
) |
|
$ |
(7,918 |
) |
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$ |
(14,118 |
) |
Brazil |
|
|
3,786 |
|
|
|
3,139 |
|
|
|
11,723 |
|
|
|
5,306 |
|
Asia |
|
|
3,288 |
|
|
|
5,235 |
|
|
|
6,187 |
|
|
|
9,873 |
|
Consolidated gross profit |
|
$ |
534 |
|
|
$ |
1,636 |
|
|
$ |
9,992 |
|
|
$ |
1,061 |
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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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|
|
|
|
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|
|
|
For the Three Months Ended |
|
|
For the Six Months Ended |
|
|
|
December 29, 2024 |
|
|
December 31, 2023 |
|
|
December 29, 2024 |
|
|
December 31, 2023 |
|
Net loss |
|
$ |
(11,392 |
) |
|
$ |
(19,846 |
) |
|
$ |
(19,024 |
) |
|
$ |
(33,116 |
) |
Interest expense, net |
|
|
2,221 |
|
|
|
1,916 |
|
|
|
4,471 |
|
|
|
3,820 |
|
Provision (benefit) for income taxes |
|
|
1,345 |
|
|
|
380 |
|
|
|
3,522 |
|
|
|
(83 |
) |
Depreciation and amortization expense (1) |
|
|
6,283 |
|
|
|
6,922 |
|
|
|
12,787 |
|
|
|
13,910 |
|
EBITDA |
|
|
(1,543 |
) |
|
|
(10,628 |
) |
|
|
1,756 |
|
|
|
(15,469 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Gain on sale of assets (2) |
|
|
(4,296 |
) |
|
|
— |
|
|
|
(4,296 |
) |
|
|
— |
|
Loss on joint venture dissolution (3) |
|
|
— |
|
|
|
2,750 |
|
|
|
— |
|
|
|
2,750 |
|
Severance (4) |
|
|
— |
|
|
|
2,351 |
|
|
|
— |
|
|
|
2,351 |
|
Adjusted EBITDA |
|
$ |
(5,839 |
) |
|
$ |
(5,527 |
) |
|
$ |
(2,540 |
) |
|
$ |
(10,368 |
) |
(1)Within this reconciliation, depreciation and amortization expense excludes the amortization of debt issuance costs, which are reflected in interest expense, net. However, within the accompanying Condensed Consolidated Statements of Cash Flows, amortization of debt issuance costs is reflected in depreciation and amortization expense.
(2)In the second quarter of fiscal 2025, UNIFI recorded a gain of $4,296 related to the sale of a warehouse located in Yadkinville, North Carolina.
(3)In the second quarter of fiscal 2024, UNIFI recorded a loss of $2,750 related to the dissolution of a nylon joint venture.
(4)In the second quarter of fiscal 2024, UNIFI incurred severance costs in connection with the Profitability Improvement Plan in the U.S.
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”), (ii) Provision (benefit) for income taxes (“Tax Impact”), (iii) Net loss (“Net Loss”) to Adjusted Net Loss, and (iv) Diluted Earnings Per Share (“Diluted EPS”) to Adjusted EPS. Rounding may impact certain of the below calculations.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Three Months Ended December 29, 2024 |
|
|
For the Three Months Ended December 31, 2023 |
|
|
|
Pre-tax Loss |
|
|
Tax Impact |
|
|
Net Loss |
|
|
Diluted EPS |
|
|
Pre-tax Loss |
|
|
Tax Impact |
|
|
Net Loss |
|
|
Diluted EPS |
|
GAAP results |
|
$ |
(10,047 |
) |
|
$ |
(1,345 |
) |
|
$ |
(11,392 |
) |
|
$ |
(0.62 |
) |
|
$ |
(19,466 |
) |
|
$ |
(380 |
) |
|
$ |
(19,846 |
) |
|
$ |
(1.10 |
) |
Gain on sale of assets (1) |
|
|
(4,296 |
) |
|
|
— |
|
|
|
(4,296 |
) |
|
|
(0.24 |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Loss on joint venture dissolution (2) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
2,750 |
|
|
|
— |
|
|
|
2,750 |
|
|
|
0.15 |
|
Severance (3) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
2,351 |
|
|
|
— |
|
|
|
2,351 |
|
|
|
0.14 |
|
Adjusted results |
|
$ |
(14,343 |
) |
|
$ |
(1,345 |
) |
|
$ |
(15,688 |
) |
|
$ |
(0.86 |
) |
|
$ |
(14,365 |
) |
|
$ |
(380 |
) |
|
$ |
(14,745 |
) |
|
$ |
(0.81 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average common shares outstanding |
|
|
|
18,288 |
|
|
|
|
|
|
|
|
|
|
|
|
18,110 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Six Months Ended December 29, 2024 |
|
|
For the Six Months Ended December 31, 2023 |
|
|
|
Pre-tax Loss |
|
|
Tax Impact |
|
|
Net Loss |
|
|
Diluted EPS |
|
|
Pre-tax Loss |
|
|
Tax Impact |
|
|
Net Loss |
|
|
Diluted EPS |
|
GAAP results |
|
$ |
(15,502 |
) |
|
$ |
(3,522 |
) |
|
$ |
(19,024 |
) |
|
$ |
(1.04 |
) |
|
$ |
(33,199 |
) |
|
$ |
83 |
|
|
$ |
(33,116 |
) |
|
$ |
(1.83 |
) |
Gain on sale of assets (1) |
|
|
(4,296 |
) |
|
|
— |
|
|
|
(4,296 |
) |
|
|
(0.24 |
) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Loss on joint venture dissolution (2) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
2,750 |
|
|
|
— |
|
|
|
2,750 |
|
|
|
0.15 |
|
Severance (3) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
2,351 |
|
|
|
— |
|
|
|
2,351 |
|
|
|
0.13 |
|
Adjusted results |
|
$ |
(19,798 |
) |
|
$ |
(3,522 |
) |
|
$ |
(23,320 |
) |
|
$ |
(1.28 |
) |
|
$ |
(28,098 |
) |
|
$ |
83 |
|
|
$ |
(28,015 |
) |
|
$ |
(1.55 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average common shares outstanding |
|
|
|
18,272 |
|
|
|
|
|
|
|
|
|
|
|
|
18,097 |
|
(1)In the second quarter of fiscal 2025, UNIFI recorded a gain of $4,296 related to the sale of a warehouse located in Yadkinville, North Carolina. The associated tax impact was estimated to be $0 due to a valuation allowance against net operating losses and capital losses in the U.S.
(2)In the second quarter of fiscal 2024, UNIFI recorded a loss of $2,750 related to the dissolution of a nylon joint venture.
(3)In the second quarter of fiscal 2024, UNIFI incurred severance costs in connection with the Profitability Improvement Plan in the U.S.
Net Debt (Non-GAAP Financial Measure)
Reconciliations of Net Debt are as follows:
|
|
|
|
|
|
|
|
|
|
|
December 29, 2024 |
|
|
June 30, 2024 |
|
Long-term debt |
|
$ |
122,979 |
|
|
$ |
117,793 |
|
Current portion of long-term debt |
|
|
12,025 |
|
|
|
12,277 |
|
Unamortized debt issuance costs |
|
|
199 |
|
|
|
229 |
|
Debt principal |
|
|
135,203 |
|
|
|
130,299 |
|
Less: cash and cash equivalents |
|
|
18,669 |
|
|
|
26,805 |
|
Net Debt |
|
$ |
116,534 |
|
|
$ |
103,494 |
|
Cash and cash equivalents
At December 29, 2024 and June 30, 2024, 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”).
•EBITDA represents Net (loss) income before net interest expense, income tax expense, and depreciation and amortization expense.
•Adjusted EBITDA represents EBITDA adjusted to exclude, from time to time, certain adjustments necessary to understand and compare the underlying results of UNIFI.
•Adjusted Net (Loss) Income represents Net (loss) income calculated under GAAP adjusted to exclude certain amounts. Management believes the excluded amounts do not reflect the ongoing operations and performance of UNIFI and/or exclusion may be necessary to understand and compare the underlying results of UNIFI.
•Adjusted EPS represents Adjusted Net (Loss) Income divided by UNIFI’s weighted average common shares outstanding.
•Net Debt represents debt principal less cash and cash equivalents.
The non-GAAP financial measures are not determined in accordance with GAAP and should not be considered a substitute for performance measures determined in accordance with GAAP. The calculations of the non-GAAP financial measures are subjective, based on management’s belief as to which items should be included or excluded in order to provide the most reasonable and comparable view of the underlying operating performance of the business. 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 nor 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-
Second Quarter Fiscal 2025 Earnings Conference Call Exhibit 99.2 December 29, 2024 (Unaudited results) (Amounts and dollars in millions, unless otherwise noted) UNIFI, INC.
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
Today’s Speakers Al Carey Executive Chairman Eddie Ingle CEO and Director A.J. Eaker EVP, CFO, and Treasurer 3
Consolidated Revenue $138.9M (+1.4%) Adjusted EPS1 ($0.86) (-6.2%) Adjusted EBITDA1 $(5.8)M (-5.6%) REPREVE® Fiber % of Sales 31% (-200 bps) Q2 Fiscal 2025 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 February 5, 2025. (compared to Q2 Fiscal 2024) 4 Continued strong performance in Brazil segment REPREVE Fiber and Beyond Apparel initiatives continue to gain traction, positioning UNIFI for future growth Subsequent to quarter end, implemented manufacturing consolidation efforts to improve cost structure and operational performance, with intent to maintain production and service levels
As a % of Net 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 $186 $246 $293 $186 $189 5 $186 $293 $186 $189 REPREVE® Fiber Sales
6 REPREVE® & Textile Takeback™
7 Award-Winning ThermaLoopTM
Consolidated Highlights Q2 FY25 Q2 FY24 YoY Change Net Sales $138.9 $136.9 1.4% Gross Profit $0.5 $1.6 (67.4)% Gross Margin 0.4% 1.2% (80) bps Highlights/Drivers Net sales and gross profit performance were generally consistent with the prior year due to continued improvement efforts for the Americas Segment and consistently robust sales volumes in Brazil, however unfavorably impacted by softer sales and profitability in Asia. Note: Q2 FY25 ended on December 29, 2024; Q2 FY24 ended on December 31, 2023; and each contained 13 weeks. 8
Q2 FY25 Q2 FY24 YoY Change Net Sales $83.1 $80.5 3.2% Gross Loss ($6.5) ($6.7) 2.9% Gross Margin (7.9)% (8.4)% 50 bps Highlights/Drivers Net sales increased vs. prior year, primarily due to higher sales volumes, while gross profit was flat due to year-over-year inflationary pressures. 9 Note: Q2 FY25 ended on December 29, 2024; Q2 FY24 ended on December 31, 2023; and each contained 13 weeks. Americas Highlights
10 Q2 FY25 Q2 FY24 YoY Change Net Sales $27.5 $26.1 5.5% Gross Profit $3.8 $3.1 20.6% Gross Margin 13.8% 12.1% 170 bps Highlights/Drivers Net sales and gross profit increased vs. prior year, primarily due to higher volumes from market share gains, together with favorable pricing and cost dynamics, partially offset by unfavorable foreign currency effects. 10 Note: Q2 FY25 ended on December 29, 2024; Q2 FY24 ended on December 31, 2023; and each contained 13 weeks. Brazil Highlights
Q2 FY25 Q2 FY24 YoY Change Net Sales $28.3 $30.3 (6.6)% Gross Profit $3.3 $5.2 (37.2)% Gross Margin 11.6% 17.3% (570) bps Highlights/Drivers Net sales and gross profit decreased vs. prior year, primarily due to a less favorable sales mix and pricing dynamics in China. 11 Note: Q2 FY25 ended on December 29, 2024; Q2 FY24 ended on December 31, 2023; and each contained 13 weeks. Asia Highlights
FCF CapEx Net Debt1 Working Capital 1 Net Debt is a non-GAAP financial measure described on Slide 2 and reconciled within the Earnings Release dated February 5, 2025. 12 Balance Sheet
Continued Focused on Long-Term Growth 1 Adjusted EBITDA is a non-GAAP financial measure described on Slide 2 and reconciled within the Earnings Release dated February 5, 2025. 13 Q3 2025 Financial Outlook Net sales and Adjusted EBITDA1 improving sequentially from the second quarter of fiscal 2025, primarily driven by higher revenues for the Americas Segment. Capital expenditures between $5.0 million and $6.0 million, increasing sequentially for the transition of production out of one North Carolina facility. Continued volatility in the effective tax rate.
Fiscal 2025 Outlook Net sales approximately equal to fiscal 2024, with second half fiscal 2025 revenues improving sequentially from the first half of fiscal 2025. Gross profit, gross margin, and Adjusted EBITDA1 expected to increase from fiscal 2024 to fiscal 2025, while second half fiscal 2025 underlying profit generation will be partially offset by U.S. manufacturing transition costs. Capital expenditures between $14.0 million and $16.0 million, which includes amounts related to U.S. manufacturing transition activities. Well Positioned to Realize Long-Term Profitable Growth Opportunities 14 1 Adjusted EBITDA is a non-GAAP financial measure described on Slide 2 and reconciled within the Earnings Release dated February 5, 2025.
Prepared to Pivot to Growth 1. Optimizing operations and footprint to improve financial profile. 2. Investing in innovation, REPREVE platform, and Beyond Apparel products for richer product mix. 3. Increasing customer engagement in all business segments to grow our global market share. 4. Positioning each business segment to pivot to growth in fiscal 2026. 15 Fiscal 2025 Priorities
Contact Investor Relations: UFI@alpha-ir.com 16
Exhibit 99.3
UNIFI®, Makers of REPREVE®, Announces U.S. Manufacturing Transition
Strategic decision to enhance operating efficiency, lower fixed costs, improve profitability and further strengthen balance sheet
GREENSBORO, N.C., February 3, 2025 – Unifi, Inc. (NYSE: UFI) (together with its consolidated subsidiaries, “UNIFI”), leading innovator in recycled and synthetic yarn, today announced it will be transitioning yarn production out of its manufacturing facility in Madison, North Carolina, and placing the property for sale in calendar 2025. Production activities currently occurring at the Madison, North Carolina facility will be consolidated into UNIFI facilities in North and Central America.
Key Highlights:
•The footprint reduction will improve efficiency and strengthen operations to better support customers’ needs without sacrificing sales volume or creating disruptions in production capacity.
•The transition will allow for a significant increase in utilization rates at the remaining facilities across North and Central America, improving fixed cost absorption and supporting an enhanced long-term profitability profile.
•To maintain business continuity and customer service levels, certain equipment will be relocated to meet the current and growing needs of the market.
•Proceeds from the future sale of the property will be prioritized against paying down existing debt.
Eddie Ingle, Chief Executive Officer of UNIFI, Inc., stated, “We are very grateful for the hard work, contributions, and support from everyone involved with the Madison facility, including the community and employees, past and present. We will work closely with our employees and community to ensure the smoothest transition possible, and we are offering existing employees available opportunities at our other facilities in North Carolina.”
Ingle continued, “The closure of this facility enables us to better align UNIFI’s manufacturing footprint with our growing customer base across North and Central America. This move, which involves relocating some machinery to other manufacturing locations, will enhance our cost structure and strengthen our balance sheet. Importantly, this transition will not impact our ability to meet the demands of the market or our strategic initiatives focused on innovation, the REPREVE® portfolio, and continuous financial improvement. We look forward to transitioning to a more robust operating profile, revitalizing our Americas businesses, and creating a more sustainable future for all our stakeholders.”
Additional details on the strategic transition will be provided during the Company’s upcoming second quarter fiscal 2025 earnings conference call that will take place on February 6, 2025, at 8:00 a.m. Eastern Time.
About UNIFI
UNIFI, Inc. (NYSE: UFI) is a global leader in fiber science and sustainable synthetic textiles. Using proprietary recycling technology, UNIFI is a pioneer in scaling the transformation of post-industrial and post-consumer waste into sustainable products. Through REPREVE, the world’s leading brand of traceable, recycled fiber and resin, UNIFI is changing the way industries think about the materials they use – and reuse. A vertically-integrated manufacturer, the company has direct operations in the United States, Colombia, El Salvador, and Brazil, and sales offices all over the world. UNIFI envisions a future where circular and sustainable solutions are the only choice. For more information about UNIFI, visit www.unifi.com.
Media inquiries:
Melissa Henkle
Director of Marketing & Communications
336-316-5473
mhenkle@unifi.com
Investor inquiries:
Josh Carroll or Blaine McNulty
Alpha IR Group
312-445-2870
UFI@alpha-ir.com
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