Unifi, Inc. — Fourth Quarter Fiscal 2026 Earnings Summary

Financial Performance

• Net sales for the fourth quarter of fiscal 2026 were $144.2 million, a 4.1% increase from $138.5 million in the fourth quarter of fiscal 2025.
• Gross profit was $14.3 million with a gross margin of 9.9%, compared to a gross loss of $1.1 million and a margin of (0.8)% in the prior year quarter.
• SG&A expenses were $11.8 million, a 1.0% decrease from the prior year quarter.
• Net loss was $1.2 million ($0.06 per share) for the fourth quarter, compared to net income of $15.5 million ($0.82 per share) in the prior year quarter, which included a $35.8 million gain on the sale of a manufacturing facility.
• Adjusted EBITDA was $8.2 million for the fourth quarter, an improvement from a loss of $4.1 million in the prior year quarter.
• Cash provided by operating activities was $2.1 million in the fourth quarter and $26.5 million for the full fiscal year 2026, compared to a use of $21.3 million in fiscal 2025.
• Debt principal was $92.4 million at June 28, 2026, down from $108.0 million at June 29, 2025.
• Net Debt was $67.4 million at June 28, 2026, compared to $85.3 million at June 29, 2025.
• Capital expenditures decreased to $5.0 million for fiscal 2026 from $10.5 million in fiscal 2025.
• For the full fiscal year 2026, net sales were $531.3 million compared to $571.3 million in fiscal 2025.
• Full-year fiscal 2026 gross margin improved to 5.7% from 1.5% in fiscal 2025.
• Full-year fiscal 2026 SG&A expenses decreased to $44.7 million from $49.0 million in fiscal 2025.

Guidance and Future Outlook

• For fiscal 2027, the Company expects sales and profitability to improve from fiscal 2026 as it realizes full-year benefits from portfolio management actions, cost containment initiatives, and improved operating execution.
• The Company plans to focus on leveraging its improved cost footprint while investing in innovation.
• Management intends to manage the balance sheet to remain better positioned to capitalize on improved business conditions and grow over time.
• First quarter fiscal 2027 outlook indicates Brazil Segment sales and profitability are expected to improve.
• The Asia Segment is expected to remain pressured due to regional softness and geopolitical volatility.
• The Americas Segment is expected to see increased profitability from cost savings and stable demand, with continued growth in margin-accretive revenues from value-added products and Beyond Apparel initiatives.

Business Segments and Product Lines

• REPREVE Fiber product revenues were $40.2 million in the fourth quarter, representing 28% of net sales.
• Americas Segment gross profit increased by $8.6 million in the fourth quarter, primarily due to multi-year cost reduction efforts.
• Brazil Segment gross profit increased by $6.4 million in the fourth quarter, primarily due to favorable pricing dynamics.
• Asia Segment gross profit increased by $0.5 million in the fourth quarter, primarily due to an improved sales mix.
• Americas Segment net sales were $84.4 million in the fourth quarter, down from $85.0 million in the prior year quarter.
• Brazil Segment net sales were $33.9 million in the fourth quarter, up from $28.8 million in the prior year quarter.
• Asia Segment net sales were $25.8 million in the fourth quarter, up from $24.7 million in the prior year quarter.
• Beyond Apparel continues to contribute to improving financial performance.

Market and Competitive Landscape

• Higher sales in the Brazil Segment were partially offset by tepid customer ordering patterns in the Americas and Asia Segments.
• Tepid ordering patterns in the Americas and Asia were attributed to geopolitical, trade, and tariff-related uncertainty.
• The Company cites advantageous supply chain dynamics in Brazil as a competitive position lever for future growth.

Risks and Challenges

• Geopolitical, trade, and tariff-related uncertainty continue to impact customer ordering patterns in the Americas and Asia.
• Regional softness and geopolitical volatility are expected to pressure the Asia Segment in the first quarter of fiscal 2027.
• The press release notes general risks including changes in the trade regulatory environment, raw material availability and pricing, economic conditions, and foreign currency exchange rates.

Management Commentary and Tone

• CEO Eddie Ingle stated the company closed fiscal 2026 with "clear momentum," highlighting meaningful improvement in profitability and cash generation.
• Management attributes results to disciplined execution of cost reduction, operational optimization, and portfolio management initiatives.
• Ingle noted the company is operating from a "healthier financial position" with a more focused cost structure and a balance sheet expected to strengthen further.
• Management expressed focus on positioning the business for long-term growth, driving disciplined capital allocation, and executing initiatives to create long-term shareholder value.

Other Key Points

• Following the fourth fiscal quarter, the Company entered into an agreement to sell certain non-strategic real estate assets within the Americas Segment for $60.0 million of gross proceeds.
• The planned real estate sale is expected to significantly enhance financial flexibility, support debt reduction, and strengthen the balance sheet with no expected impact on customer service or daily operations.
• The fourth quarter of fiscal 2025 included a $35.8 million gain on the sale of a manufacturing facility, which contributed to the prior year's net income.
• Fiscal 2026 included $1.1 million in transition costs related to the consolidation of yarn manufacturing operations.
• Fiscal 2025 included $10.6 million in transition costs.
• The Company operates vertically integrated facilities in the United States, Colombia, El Salvador, and Brazil.