XML 56 R28.htm IDEA: XBRL DOCUMENT
v2.4.0.8

Note 21 - Investments in Unconsolidated Affiliates and Variable Interest Entities | 6 Months Ended
--- | ---
Dec. 29, 2013
Equity Method Investments and Joint Ventures [Abstract] |
Equity Method Investments and Joint Ventures Disclosure [Text Block] | 21. Investments in Unconsolidated Affiliates and Variable Interest Entities Parkdale America, LLC In June 1997, the Company and Parkdale Mills, Inc. (“Mills”) entered into a Contribution Agreement that set forth the terms and conditions by which the two companies contributed all of the assets of their spun cotton yarn operations utilizing open-end and air-jet spinning technologies to create Parkdale America, LLC (“PAL”). In exchange for its contribution, the Company received a 34% ownership interest in PAL, which is accounted for using the equity method of accounting. Effective January 1, 2012, Mills’ interest in PAL was assigned to Parkdale Incorporated. PAL is a limited liability company treated as a partnership for income tax reporting purposes, and PAL’s fiscal year end is the Saturday nearest to December 31. PAL is a producer of cotton and synthetic yarns for sale to the textile industry and apparel market, both foreign and domestic. PAL has 13 manufacturing facilities located primarily in the southeast region of the U.S. According to its most recently issued audited financial statements, PAL’s five largest customers accounted for approximately 82% of total revenues and 77% of total gross accounts receivable outstanding, with the largest customer accounting for approximately 38% of revenues and 35% of accounts receivable. During August 2008, a federal government program commenced providing economic adjustment assistance to domestic users of upland cotton (the “EAP program”). The program offers a subsidy for cotton consumed in domestic production, and the subsidy is paid the month after the eligible cotton is consumed. The subsidy must be used within eighteen months after the marketing year in which it is earned to purchase qualifying capital expenditures in the U.S. for production of goods from upland cotton. The marketing year is from August 1 to July 31. The program provided a subsidy of four cents per pound through July 31, 2012 and thereafter provides a subsidy of three cents per pound. The Company recognizes its share of PAL’s income for the cotton subsidy when the cotton has been consumed and the qualifying assets have been acquired, with an appropriate allocation methodology considering the dual criteria of the subsidy. As of December 29, 2013, the Company’s investment in PAL was $97,544 and shown within investments in unconsolidated affiliates in the Condensed Consolidated Balance Sheets. The reconciliation between the Company’s share of the underlying equity of PAL and its investment is as follows:
Underlying equity as of December 2013 |  | $ | 115,982 |
Initial excess capital contributions |  |  | 53,363 |
Impairment charge recorded by the Company in 2007 |  |  | (74,106 | )
Antitrust lawsuit against PAL in which the Company did not participate |  |  | 2,652 |
EAP adjustments |  |  | (347 | )
Investment balance as of December 2013 |  | $ | 97,544 |
U.N.F. Industries, Ltd. In September 2000, the Company and Nilit Ltd. (“Nilit”) formed a 50/50 joint venture, U.N.F. Industries Ltd. (“UNF”), for the purpose of operating nylon extrusion assets to manufacture nylon POY. All raw material and production services for UNF are provided by Nilit under separate supply and services agreements. UNF’s fiscal year end is December 31 and it is a registered Israeli private company located in Migdal Ha-Emek, Israel. UNF America, LLC In October 2009, the Company and Nilit America Inc. (“Nilit America”) formed a 50/50 joint venture, UNF America LLC (“UNF America”), for the purpose of operating a nylon extrusion facility which manufactures nylon POY. All raw material and production services for UNF America are provided by Nilit America under separate supply and services agreements. UNF America’s fiscal year end is December 31 and it is a limited liability company treated as a partnership for income tax reporting purposes located in Ridgeway, Virginia. In conjunction with the formation of UNF America, the Company entered into a supply agreement with UNF and UNF America whereby the Company agreed to purchase all of its first quality nylon POY requirements for texturing (subject to certain exceptions) from either UNF or UNF America. The agreement has no stated minimum purchase quantities and pricing is negotiated every six months, based on market rates. As of December 29, 2013, the Company’s open purchase orders related to this agreement were $4,453. The Company’s raw material purchases under this supply agreement consist of the following:
|  | For the Six Months Ended |
|  | December 29, 2013 |  |  | December 23, 2012 |
UNF |  | $ | 6,243 |  |  | $ | 6,326 |
UNF America |  |  | 11,776 |  |  |  | 11,311 |
Total |  | $ | 18,019 |  |  | $ | 17,637 |
As of December 29, 2013 and June 30, 2013, the Company had combined accounts payable due to UNF and UNF America of $3,688 and $2,890, respectively. The Company has determined that UNF and UNF America are variable interest entities (“VIEs”) and has also determined that the Company is the primary beneficiary of these entities, based on the terms of the supply agreement. As a result, these entities should be consolidated in the Company’s financial results. As the Company purchases substantially all of the output from the two entities, and, as the two entities’ balance sheets constitute 3% or less of the Company’s current assets, total assets and total liabilities, the Company has not included the accounts of UNF and UNF America in its consolidated financial statements. As of December 29, 2013, the Company’s combined investments in UNF and UNF America were $4,018 and are shown within investments in unconsolidated affiliates in the Condensed Consolidated Balance Sheets. The financial results of UNF and UNF America are included in the Company’s financial statements with a one month lag, using the equity method of accounting and with intercompany profits eliminated in accordance with the Company’s accounting policy. Other than the supply agreement discussed above, the Company does not provide any other commitments or guarantees related to either UNF or UNF America. Unaudited, condensed balance sheet and income statement information for the Company’s unconsolidated affiliates is presented in the following tables. As PAL is defined as significant, its information is separately disclosed.
|  | As of December 29, 2013 (Unaudited) |
|  | PAL |  |  | Other |  |  | Total |
Current assets |  | $ | 272,832 |  |  | $ | 9,396 |  |  | $ | 282,228 |
Noncurrent assets |  |  | 119,993 |  |  |  | 3,112 |  |  |  | 123,105 |
Current liabilities |  |  | 45,960 |  |  |  | 5,483 |  |  |  | 51,443 |
Noncurrent liabilities |  |  | 5,741 |  |  |  | — |  |  |  | 5,741 |
Shareholders’ equity and capital accounts |  |  | 341,124 |  |  |  | 7,025 |  |  |  | 348,149 |
The Company’s portion of undistributed earnings |  |  | 26,929 |  |  |  | 1,053 |  |  |  | 27,982 |
|  | As of June 30, 2013 (Unaudited) |
|  | PAL |  |  | Other |  |  | Total |
Current assets |  | $ | 266,300 |  |  | $ | 11,343 |  |  | $ | 277,643 |
Noncurrent assets |  |  | 111,061 |  |  |  | 3,163 |  |  |  | 114,224 |
Current liabilities |  |  | 44,517 |  |  |  | 4,910 |  |  |  | 49,427 |
Noncurrent liabilities |  |  | 15,609 |  |  |  | — |  |  |  | 15,609 |
Shareholders’ equity and capital accounts |  |  | 317,235 |  |  |  | 9,596 |  |  |  | 326,831 |
|  | For the Three Months Ended December 29, 2013 (Unaudited) |
|  | PAL |  |  | Other |  |  | Total |
Net sales |  | $ | 190,629 |  |  | $ | 9,371 |  |  | $ | 200,000 |
Gross profit |  |  | 16,665 |  |  |  | 1,199 |  |  |  | 17,864 |
Income from operations |  |  | 13,348 |  |  |  | 761 |  |  |  | 14,109 |
Income to members |  |  | 14,076 |  |  |  | 801 |  |  |  | 14,877 |
Depreciation and amortization |  |  | 7,204 |  |  |  | 25 |  |  |  | 7,229 |
Cash received by PAL under EAP program |  |  | 3,439 |  |  |  | — |  |  |  | 3,439 |
Earnings recognized by PAL for EAP program |  |  | 7,205 |  |  |  | — |  |  |  | 7,205 |
Dividends and cash distributions received |  |  | — |  |  |  | 500 |  |  |  | 500 |
As of the end of PAL’s fiscal December 2013 period, PAL’s amount of deferred revenues related to the EAP program was $0.
|  | For the Three Months Ended December 23, 2012 (Unaudited) |
|  | PAL |  |  | Other |  |  | Total |
Net sales |  | $ | 169,222 |  |  | $ | 9,343 |  |  | $ | 178,565 |
Gross profit |  |  | 6,541 |  |  |  | 1,725 |  |  |  | 8,266 |
Income from operations |  |  | 1,340 |  |  |  | 1,282 |  |  |  | 2,622 |
Income to members |  |  | 1,847 |  |  |  | 1,296 |  |  |  | 3,143 |
Depreciation and amortization |  |  | 8,209 |  |  |  | 25 |  |  |  | 8,234 |
Cash received by PAL under EAP program |  |  | 3,842 |  |  |  | — |  |  |  | 3,842 |
Earnings recognized by PAL for EAP program |  |  | 1,549 |  |  |  | — |  |  |  | 1,549 |
Dividends and cash distributions received |  |  | — |  |  |  | 500 |  |  |  | 500 |
|  | For the Six Months Ended December 29, 2013 (Unaudited) |
|  | PAL |  |  | Other |  |  | Total |
Net sales |  | $ | 413,166 |  |  | $ | 17,911 |  |  | $ | 431,077 |
Gross profit |  |  | 36,755 |  |  |  | 2,125 |  |  |  | 38,880 |
Income from operations |  |  | 29,920 |  |  |  | 1,249 |  |  |  | 31,169 |
Income to members |  |  | 31,416 |  |  |  | 1,329 |  |  |  | 32,745 |
Depreciation and amortization |  |  | 14,286 |  |  |  | 50 |  |  |  | 14,336 |
Cash received by PAL under EAP program |  |  | 7,493 |  |  |  | — |  |  |  | 7,493 |
Earnings recognized by PAL for EAP program |  |  | 16,284 |  |  |  | — |  |  |  | 16,284 |
Dividends and cash distributions received |  |  | 2,559 |  |  |  | 500 |  |  |  | 3,059 |
|  | For the Six Months Ended December 23, 2012 (Unaudited) |
|  | PAL |  |  | Other |  |  | Total |
Net sales |  | $ | 370,612 |  |  | $ | 18,185 |  |  | $ | 388,797 |
Gross profit |  |  | 9,489 |  |  |  | 3,378 |  |  |  | 12,867 |
Income from operations |  |  | 770 |  |  |  | 2,504 |  |  |  | 3,274 |
Income to members |  |  | 1,885 |  |  |  | 2,496 |  |  |  | 4,381 |
Depreciation and amortization |  |  | 16,000 |  |  |  | 50 |  |  |  | 16,050 |
Cash received by PAL under EAP program |  |  | 8,768 |  |  |  | — |  |  |  | 8,768 |
Earnings recognized by PAL for EAP program |  |  | 3,868 |  |  |  | — |  |  |  | 3,868 |
Dividends and cash distributions received |  |  | 2,224 |  |  |  | 500 |  |  |  | 2,724 |

X
- Details
Name: | us-gaap_EquityMethodInvestmentsAndJointVenturesAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration

X
- Definition The entire disclosure for equity method investments and joint ventures. Equity method investments are investments that give the investor the ability to exercise significant influence over the operating and financial policies of an investee. Joint ventures are entities owned and operated by a small group of businesses as a separate and specific business or project for the mutual benefit of the members of the group. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 210 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SX 210.5-02.12) -URI http://asc.fasb.org/extlink&oid=6877327&loc=d3e13212-122682 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 323 -SubTopic 10 -Section 50 -Paragraph 3 -URI http://asc.fasb.org/extlink&oid=6382943&loc=d3e33918-111571 Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 323 -SubTopic 10 -Section 35 -Paragraph 35 -URI http://asc.fasb.org/extlink&oid=7658923&loc=d3e32847-111569 Reference 4: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 323 -SubTopic 10 -Section 35 -Paragraph 32 -URI http://asc.fasb.org/extlink&oid=7658923&loc=d3e32787-111569 + Details
Name: | us-gaap_EquityMethodInvestmentsDisclosureTextBlock
Namespace Prefix: | us-gaap_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration