UFI 8-K
Unifi Inc (UFI)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
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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:
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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 November 1, 2023, the Company issued a press release announcing its operating results for the fiscal first quarter ended October 1, 2023, a copy of which is attached hereto as Exhibit 99.1.
Item 7.01. Regulation FD Disclosure.
On November 2, 2023, the Company will host a conference call to discuss its operating results for the fiscal first quarter ended October 1, 2023. 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.
Exhibit No. |
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Description |
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99.1 |
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99.2 |
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104 |
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Cover Page Interactive Data File (embedded within the Inline XBRL document). |
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: |
November 1, 2023 |
By: |
/s/ ANDREW J. EAKER |
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Andrew J. Eaker |
Exhibit 99.1
UNIFI®, Makers of REPREVE®, Announces First Quarter Fiscal 2024 Results
Disciplined cost control measures and reduced capital expenditures aided cash generation
Business remains well positioned for apparel demand recovery
GREENSBORO, N.C., November 1, 2023 – Unifi, Inc. (NYSE: UFI) (together with its consolidated subsidiaries, “UNIFI”), makers of REPREVE and one of the world’s leading innovators in recycled and synthetic yarns, today released operating results for the first fiscal quarter ended October 1, 2023.
First Quarter Fiscal 2024 Overview
Adjusted EBITDA and Net Debt 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.
Eddie Ingle, Chief Executive Officer of Unifi, Inc. said, “Our performance in the first quarter of fiscal 2024 reflects a continuation of the weak demand and depressed ordering patterns impacting the apparel industry and its supply chains. Given the current challenges facing the industry, our customers have continued to take a cautious approach to placing new orders as they work through existing inventory levels and monitor consumer activity. Such inventory appears to be approaching pre-pandemic levels, giving us confidence that we may soon experience improved order flow. Despite the difficult environment, our disciplined cost control measures enabled us to generate solid cash flows during the quarter and reduce net debt."
Ingle continued, "We are encouraged by several opportunities to further diversify the business beyond apparel and leverage the market share gains in North America that we expect to see in the next few quarters. We will
continue to manage our operations diligently and proactively maintain a healthy balance sheet so that our business is well-positioned to rebound quickly when the apparel demand environment normalizes.”
First Quarter Fiscal 2024 Compared to First Quarter Fiscal 2023
Net sales decreased to $138.8 million, from $179.5 million, primarily due to weak fiber demand for apparel driving a less favorable sales mix and lower average selling prices. The Company continues to experience sales volume declines as a result of inventory de-stocking and cautious ordering patterns by apparel brands and retailers. Such volume declines are accompanied by lower average selling prices, in part due to lower raw material costs.
Gross loss was $0.6 million compared to gross profit of $6.6 million. Americas Segment gross loss increased $2.5 million, primarily as a result of lower fiber sales volumes driving weaker productivity and cost absorption. Brazil Segment gross profit decreased $4.6 million due to selling price pressures from foreign imports, most of which are sourced from China where lower demand has led to lower pricing. The gross margin for the Asia Segment improved by 290 basis points due to a rich mix of REPREVE products, which led to comparatively flat gross profit for the Asia Segment.
Operating loss was $12.0 million compared to $4.7 million, following the decrease in gross profit. Net loss was $13.3 million compared to $7.8 million. EPS was ($0.73) and Adjusted EBITDA was ($4.8) million, compared to ($0.44) and $2.3 million, respectively.
Operating activities provided cash of $7.1 million compared to using ($5.9) million. Accordingly, diligent cost, working capital, and spend management allowed a reduction in Net Debt to $90.0 million on October 1, 2023 from $93.9 million on July 2, 2023.
Second Quarter Fiscal 2024 Outlook
UNIFI expects second quarter fiscal 2024 net sales, Adjusted EBITDA, and capital expenditures to be generally consistent with first quarter fiscal 2024 results, and the effective tax rate is expected to demonstrate continued volatility.
Ingle concluded, "While the pace of recovery across our business and the apparel industry has been slower than we anticipated, we are encouraged by the progress made with our beyond apparel strategic initiatives. The conversations we are having with customers are promising and we anticipate that calendar 2024 will bring an improved demand environment. As the leading global supplier of sustainable fibers, we remain optimistic about our long-term growth prospects, underscored by our team’s ability to drive innovation, grow the REPREVE brand, and increase market share."
First Quarter Fiscal 2024 Earnings Conference Call
UNIFI will provide additional commentary regarding its first quarter 2024 results and other developments during its earnings conference call on November 2, 2023, at 9:00 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 textile solutions provider and one of the world's leading innovators in manufacturing synthetic and recycled performance fibers. Through REPREVE, one of UNIFI's proprietary technologies and the global leader in branded recycled performance fibers, UNIFI has transformed more than 35 billion plastic bottles into recycled fiber for new apparel, footwear, home goods, and other consumer products. UNIFI continually innovates technologies to meet consumer needs in moisture management, thermal regulation, antimicrobial protection, UV protection, stretch, water resistance, and enhanced softness. UNIFI collaborates with many of the world's most influential brands in the sports apparel, fashion, home, automotive, and other industries. For more information about UNIFI, visit www.unifi.com.
Contact information:
Davis Snyder
Alpha IR Group
312-445-2870
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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October 1, 2023 |
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October 2, 2022 |
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Net sales |
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$ |
138,844 |
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$ |
179,519 |
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Cost of sales |
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139,419 |
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172,956 |
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Gross (loss) profit |
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(575 |
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6,563 |
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Selling, general and administrative expenses |
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11,609 |
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11,773 |
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(Benefit) provision for bad debts |
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(209 |
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174 |
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Other operating expense (income), net |
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54 |
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(689 |
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Operating loss |
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(12,029 |
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(4,695 |
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Interest income |
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(581 |
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(547 |
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Interest expense |
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2,485 |
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1,247 |
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Equity in earnings of unconsolidated affiliates |
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(200 |
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(295 |
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Loss before income taxes |
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(13,733 |
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(5,100 |
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(Benefit) provision for income taxes |
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(463 |
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2,734 |
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Net loss |
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$ |
(13,270 |
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$ |
(7,834 |
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Net loss per common share: |
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Basic |
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$ |
(0.73 |
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$ |
(0.44 |
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Diluted |
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$ |
(0.73 |
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$ |
(0.44 |
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Weighted average common shares outstanding: |
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Basic |
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18,084 |
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18,001 |
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Diluted |
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18,084 |
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18,001 |
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CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
(In thousands)
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October 1, 2023 |
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July 2, 2023 |
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ASSETS |
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Cash and cash equivalents |
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$ |
51,515 |
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$ |
46,960 |
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Receivables, net |
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78,706 |
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83,725 |
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Inventories |
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136,092 |
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150,810 |
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Income taxes receivable |
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1,592 |
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238 |
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Other current assets |
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9,419 |
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12,327 |
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Total current assets |
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277,324 |
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294,060 |
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Property, plant and equipment, net |
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212,634 |
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218,521 |
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Operating lease assets |
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7,576 |
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7,791 |
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Deferred income taxes |
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4,094 |
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3,939 |
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Other non-current assets |
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14,633 |
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14,508 |
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Total assets |
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$ |
516,261 |
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$ |
538,819 |
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LIABILITIES AND SHAREHOLDERS’ EQUITY |
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Accounts payable |
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$ |
37,064 |
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$ |
44,455 |
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Income taxes payable |
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996 |
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789 |
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Current operating lease liabilities |
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1,885 |
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1,813 |
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Current portion of long-term debt |
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12,323 |
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12,006 |
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Other current liabilities |
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16,443 |
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12,932 |
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Total current liabilities |
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68,711 |
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71,995 |
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Long-term debt |
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128,890 |
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128,604 |
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Non-current operating lease liabilities |
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5,842 |
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6,146 |
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Deferred income taxes |
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2,999 |
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3,364 |
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Other long-term liabilities |
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4,790 |
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5,100 |
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Total liabilities |
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211,232 |
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215,209 |
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Commitments and contingencies |
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Common stock |
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1,808 |
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1,808 |
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Capital in excess of par value |
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69,130 |
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68,901 |
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Retained earnings |
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293,522 |
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306,792 |
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Accumulated other comprehensive loss |
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(59,431 |
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(53,891 |
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Total shareholders’ equity |
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305,029 |
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323,610 |
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Total liabilities and shareholders’ equity |
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$ |
516,261 |
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$ |
538,819 |
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CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(In thousands)
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For the Three Months Ended |
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October 1, 2023 |
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October 2, 2022 |
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Cash and cash equivalents at beginning of period |
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$ |
46,960 |
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$ |
53,290 |
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Operating activities: |
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Net loss |
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(13,270 |
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(7,834 |
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Adjustments to reconcile net loss to net cash provided (used) by operating activities: |
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Equity in earnings of unconsolidated affiliates |
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(200 |
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(295 |
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Depreciation and amortization expense |
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7,026 |
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6,740 |
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Non-cash compensation expense |
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212 |
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633 |
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Deferred income taxes |
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(679 |
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(373 |
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Other, net |
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(62 |
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324 |
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Changes in assets and liabilities |
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14,092 |
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(5,087 |
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Net cash provided (used) by operating activities |
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7,119 |
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(5,892 |
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Investing activities: |
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Capital expenditures |
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(2,937 |
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(11,198 |
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Other, net |
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457 |
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(222 |
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Net cash used by investing activities |
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(2,480 |
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(11,420 |
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Financing activities: |
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Proceeds from long-term debt |
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31,100 |
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67,949 |
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Payments on long-term debt |
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(30,513 |
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(55,236 |
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Other, net |
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17 |
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— |
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Net cash provided by financing activities |
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604 |
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12,713 |
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Effect of exchange rate changes on cash and cash equivalents |
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(688 |
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(1,491 |
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Net increase (decrease) in cash and cash equivalents |
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4,555 |
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(6,090 |
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Cash and cash equivalents at end of period |
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$ |
51,515 |
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$ |
47,200 |
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BUSINESS SEGMENT INFORMATION
(Unaudited)
(In thousands)
Net sales and gross (loss) profit details for each reportable segment of UNIFI are as follows:
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For the Three Months Ended |
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October 1, 2023 |
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October 2, 2022 |
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Americas |
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$ |
81,573 |
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$ |
107,644 |
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Brazil |
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29,909 |
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38,879 |
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Asia |
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27,362 |
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32,996 |
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Consolidated net sales |
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$ |
138,844 |
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$ |
179,519 |
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For the Three Months Ended |
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October 1, 2023 |
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October 2, 2022 |
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Americas |
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$ |
(7,380 |
) |
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$ |
(4,869 |
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Brazil |
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2,167 |
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6,787 |
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Asia |
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4,638 |
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4,645 |
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Consolidated gross (loss) profit |
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$ |
(575 |
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$ |
6,563 |
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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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For the Three Months Ended |
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October 1, 2023 |
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October 2, 2022 |
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Net loss |
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$ |
(13,270 |
) |
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$ |
(7,834 |
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Interest expense, net |
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1,904 |
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700 |
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(Benefit) provision for income taxes |
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(463 |
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2,734 |
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Depreciation and amortization expense (1) |
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6,988 |
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6,697 |
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EBITDA |
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(4,841 |
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2,297 |
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Other adjustments (2) |
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— |
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— |
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Adjusted EBITDA |
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$ |
(4,841 |
) |
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$ |
2,297 |
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Net Debt (Non-GAAP Financial Measure)
Reconciliations of Net Debt are as follows:
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October 1, 2023 |
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July 2, 2023 |
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Long-term debt |
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$ |
128,890 |
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$ |
128,604 |
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Current portion of long-term debt |
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12,323 |
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12,006 |
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Unamortized debt issuance costs |
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274 |
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289 |
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Debt principal |
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141,487 |
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140,899 |
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Less: cash and cash equivalents |
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51,515 |
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46,960 |
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Net Debt |
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$ |
89,972 |
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$ |
93,939 |
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Cash and cash equivalents
At October 1, 2023 and July 2, 2023, 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”).
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.
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 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 epidemics or pandemics such as the recent strain of coronavirus; the success of UNIFI’s strategic business initiatives; the volatility of financial and credit markets; 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.
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CONFERENCE CALL PRESENTATION First Quarter Ended October 1, 2023 (Unaudited Results) Exhibit 99.2
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 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 epidemics or pandemics such as the recent strain of coronavirus; the success of the Company’s strategic business initiatives; the volatility of financial and credit markets; 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 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.
Q1 FISCAL 2024 OVERVIEW (compared to Q4 Fiscal 2023) Revenue $138.8M vs. $151.1M Adjusted EPS(1) ($0.73) vs. ($0.39) Adjusted EBITDA(1) $(4.8M) vs. $1.7M REPREVE Fiber % of Sales 31% vs. 29% (1) Adjusted EPS and Adjusted EBITDA are non-GAAP measures described on Slide 2 and reconciled within the Earnings Release dated November 1, 2023. REPREVE Fiber represents UNIFI’s collection of fiber products on its recycled platform, with or without added technologies. Continued demand weakness driven by inventory destocking impacting revenue and profitability in near-term Inventory destocking nearing end; expect normalization to start in CY2024 Diligence around operating costs and capital allocation supports healthy balance sheet Significantly lower capital spend supports positive free cash flows and liquidity preservation Closely aligning labor and manufacturing resources with current demand environment to maximize efficiency while maintaining operational flexibility Momentum continues across new products, customer adoptions, and co-branding REPREVE® Fiber products comprised 31% ($42.5M) of net sales vs. 29% ($44.5M) 12.0 million REPREVE® hangtags sent to brand customers during Q1 fiscal 2024
as a % of Net Sales and Millions of $s REPREVE® FIBER SALES QUARTERLY NOTE ANNUAL REPREVE Fiber represents UNIFI’s collection of fiber products on its recycled platform, with or without added technologies. Fiscal Year FY 2022 FY 2023 FY 2024 $180 $186 $246 $293 $186 $71.9 $81.5 $71.9 $67.7 $49.2 $42.9 $49.6 $44.5 $42.5
Year-Over-Year, $s in Millions NET SALES OVERVIEW CONSOLIDATED Volume (5.2%) Price/Mix (18.2%) FX1 0.7% ↓22.7% AMERICAS BRAZIL ASIA Volume (2.9%) Price/Mix (21.4%) FX1 0.1% ↓24.2% ↓23.1% Volume (4.0%) Price/Mix (26.5%) FX1 7.4% ↓17.1% Volume (9.5%) Price/Mix (2.6%) FX1 (5.0%) 5 1 Approximates the impact of foreign currency translation. Note: Q1 FY23 ended on October 2, 2022; Q1 FY24 ended on October 1, 2023; and each contained 13 weeks.
Year-Over-Year, $s in Millions GROSS PROFIT OVERVIEW CONSOLIDATED AMERICAS BRAZIL ASIA Gross Profit $ Gross Margin % 6 Q1 FY23 Q1 FY24 Q1 FY23 Q1 FY24 Q1 FY23 Q1 FY24 Q1 FY23 Q1 FY24 Note: Q1 FY23 ended on October 2, 2022; Q1 FY24 ended on October 1, 2023; and each contained 13 weeks.
Quarter-Over-Quarter, $s in Millions NET SALES OVERVIEW CONSOLIDATED Volume (0.4%) Price/Mix (7.4%) FX1 (0.3%) ↓8.1% AMERICAS BRAZIL ASIA Volume (10.2%) Price/Mix (3.9%) FX1 0.1% ↓14.0% ↑10.3% Volume 15.0% Price/Mix (5.9%) FX1 1.2% ↓6.0% Volume 2.4% Price/Mix (5.7%) FX1 (2.7%) 7 1 Approximates the impact of foreign currency translation. Note: Q4 FY23 ended on July 2, 2023; Q1 FY24 ended on October 1, 2023; and each contained 13 weeks.
Quarter-Over-Quarter, $s in Millions GROSS PROFIT OVERVIEW CONSOLIDATED AMERICAS BRAZIL ASIA Gross Profit $ Gross Margin % 8 Q4 FY23 Q1 FY24 Q4 FY23 Q1 FY24 Q4 FY23 Q1 FY24 Q4 FY23 Q1 FY24 Note: Q4 FY23 ended on July 2, 2023; Q1 FY24 ended on October 1, 2023; and each contained 13 weeks.
$s in Millions BALANCE SHEET & LIQUIDITY NET DEBT FREE CASH FLOW CAPEX WORKING CAPITAL Highlights Reset capital expenditures levels to align with economic circumstances for improved free cash flow Implemented cost control and working capital measures to improve underlying cash flow Reduced Net Debt in Q1 FY24
FISCAL 2024 INITIATIVES OPERATIONAL COMMERCIAL Diversifying Americas Segment portfolio with Flake and Chip revenue Transforming the pricing and execution components of the sales process Aggressively pursuing new yarn sales opportunities beyond our traditional performance apparel markets Increasing customer engagement in all business segments Increasing leverage of eAFK Evo machines and automation Reducing employee headcount through attrition while maintaining safety, quality, and customer service levels Matching production levels to demand in the U.S. Scrutinizing working capital to reduce interest expense and improve cash flows 10
$s in Millions Q2 FISCAL 2024 FINANCIAL OUTLOOK Key Financial Metrics Q1 FY24 Results Q2 FY24 Outlook Net Sales $138.8 Generally consistent Adjusted EBITDA(1) ($4.8) Generally consistent Capital Expenditures $2.9 Generally consistent Remain Focused on Long-Term Growth For The Good of Tomorrow Effective Tax Rate 3.4% Continued Volatility (1) Adjusted EBITDA is a non-GAAP measure described on Slide 2 and reconciled within the Earnings Release dated November 1, 2023.