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Business Segment Information | 3 Months Ended
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Sep. 24, 2017
Segment Reporting [Abstract] |
Business Segment Information | 19. Business Segment Information UNIFI defines operating segments as components of the organization for which discrete financial information is available and operating results are evaluated on a regular basis by UNIFI’s Chief Executive Officer, who is the chief operating decision maker (the “CODM”), in order to assess performance and allocate resources. Characteristics of the organization which were relied upon in making the determination of reportable segments include the nature of the products sold, the organization’s internal structure, the trade policies in the geographic regions in which UNIFI operates and the information that is regularly reviewed by the CODM for the purpose of assessing performance and allocating resources. UNIFI’s operating segments are aggregated into three reportable segments based on similarities between the operating segments’ economic characteristics, nature of products sold, type of customer, methods of distribution, and regulatory environment.
| • | The operations within the Polyester Segment exhibit similar long-term economic characteristics and sell into an economic trading zone covered by the North American Free Trade Agreement (“NAFTA”) and the Dominican Republic—Central America Free Trade Agreement (“CAFTA-DR”) to similar customers utilizing similar methods of distribution. These operations derive revenues from polyester-based products with sales primarily to other yarn manufacturers and knitters and weavers that produce yarn and/or fabric for the apparel, hosiery, automotive, home furnishings, industrial and other end-use markets. The Polyester Segment consists of sales and manufacturing operations in the United States and El Salvador.
| • | The operations within the Nylon Segment exhibit similar long-term economic characteristics and sell into an economic trading zone covered by NAFTA and CAFTA-DR to similar customers utilizing similar methods of distribution. The Nylon Segment includes an immaterial operating segment in Colombia that sells similar nylon-based textile products to similar customers in Colombia and Mexico utilizing similar methods of distribution. These operations derive revenues from nylon-based products with sales to knitters and weavers that produce fabric primarily for the apparel and hosiery markets. The Nylon Segment consists of sales and manufacturing operations in the United States and Colombia.
| • | The operations within the International Segment exhibit similar long-term economic characteristics and sell to similar customers utilizing similar methods of distribution in geographic regions that are outside of the economic trading zone covered by NAFTA and CAFTA-DR. The International Segment primarily sells polyester-based products to knitters and weavers that produce fabric for the apparel, automotive, home furnishings, industrial and other end-use markets primarily in the South American and Asian regions. The International Segment includes a manufacturing location in Brazil and sales offices in Brazil, China and Sri Lanka.
In addition to UNIFI’s reportable segments, the selected financial information presented below includes an All Other category. All Other consists primarily of for-hire transportation services and Repreve Renewables, LLC (“Renewables”) (up through December 23, 2016, the date of the sale by UNIFI of its 60% equity ownership interest in Renewables). For-hire transportation services revenue is derived from performing common carrier services utilizing UNIFI’s fleet of transportation equipment. Revenue for Renewables was primarily derived from (i) facilitating the use of miscanthus grass as bio-fuel through service agreements and (ii) delivering harvested miscanthus grass to poultry producers for animal bedding. The operations within All Other (i) are not subject to review by the CODM at a level consistent with UNIFI’s other operations, (ii) are not regularly evaluated using the same metrics applied to UNIFI’s other operations and (iii) do not qualify for aggregation with an existing reportable segment. Therefore, such operations are excluded from reportable segments. UNIFI evaluates the operating performance of its segments based upon Segment Profit (Loss), which represents segment gross profit (loss) plus segment depreciation expense. This measurement of segment profit or loss best aligns segment reporting with the current assessments and evaluations performed by, and information provided to, the CODM. The accounting policies for the segments are consistent with UNIFI’s accounting policies. Intersegment sales are omitted from the below financial information, as they are (i) insignificant to UNIFI’s segments and eliminated from consolidated reporting and (ii) excluded from segment evaluations performed by the CODM. Selected financial information is presented below.
|  | For the Three Months Ended September 24, 2017 |
|  | Polyester |  |  | Nylon |  |  | International |  |  | All Other |  |  | Total |
Net sales |  | $ | 87,738 |  |  | $ | 26,827 |  |  | $ | 48,659 |  |  | $ | 1,018 |  |  | $ | 164,242 |
Cost of sales |  |  | 78,825 |  |  |  | 23,513 |  |  |  | 37,661 |  |  |  | 951 |  |  |  | 140,950 |
Gross profit |  |  | 8,913 |  |  |  | 3,314 |  |  |  | 10,998 |  |  |  | 67 |  |  |  | 23,292 |
Segment depreciation expense |  |  | 3,867 |  |  |  | 537 |  |  |  | 416 |  |  |  | 65 |  |  |  | 4,885 |
Segment Profit |  | $ | 12,780 |  |  | $ | 3,851 |  |  | $ | 11,414 |  |  | $ | 132 |  |  | $ | 28,177 |
|  | For the Three Months Ended September 25, 2016 |
|  | Polyester |  |  | Nylon |  |  | International |  |  | All Other |  |  | Total |
Net sales |  | $ | 84,685 |  |  | $ | 28,495 |  |  | $ | 45,344 |  |  | $ | 1,445 |  |  | $ | 159,969 |
Cost of sales |  |  | 76,235 |  |  |  | 25,358 |  |  |  | 33,074 |  |  |  | 1,755 |  |  |  | 136,422 |
Gross profit (loss) |  |  | 8,450 |  |  |  | 3,137 |  |  |  | 12,270 |  |  |  | (310 | ) |  |  | 23,547 |
Segment depreciation expense |  |  | 3,108 |  |  |  | 510 |  |  |  | 246 |  |  |  | 252 |  |  |  | 4,116 |
Segment Profit (Loss) |  | $ | 11,558 |  |  | $ | 3,647 |  |  | $ | 12,516 |  |  | $ | (58 | ) |  | $ | 27,663 |
The reconciliations of segment gross profit to consolidated income before income taxes are as follows:
|  | For the Three Months Ended |
|  | September 24, 2017 |  |  | September 25, 2016 |
Polyester |  | $ | 8,913 |  |  | $ | 8,450 |
Nylon |  |  | 3,314 |  |  |  | 3,137 |
International |  |  | 10,998 |  |  |  | 12,270 |
All Other |  |  | 67 |  |  |  | (310 | )
Segment gross profit |  |  | 23,292 |  |  |  | 23,547 |
Selling, general and administrative expenses |  |  | 12,863 |  |  |  | 11,410 |
Benefit for bad debts |  |  | (59 | ) |  |  | (367 | )
Other operating expense (income), net |  |  | 315 |  |  |  | (70 | )
Operating income |  |  | 10,173 |  |  |  | 12,574 |
Interest income |  |  | (81 | ) |  |  | (146 | )
Interest expense |  |  | 1,185 |  |  |  | 692 |
Equity in earnings of unconsolidated affiliates |  |  | (3,087 | ) |  |  | (840 | )
Income before income taxes |  | $ | 12,156 |  |  | $ | 12,868 |
The reconciliations of segment total assets to consolidated total assets are as follows:
|  | September 24, 2017 |  |  | June 25, 2017 |
Polyester |  | $ | 266,795 |  |  | $ | 270,819 |
Nylon |  |  | 59,875 |  |  |  | 57,789 |
International |  |  | 91,267 |  |  |  | 80,824 |
Segment total assets |  |  | 417,937 |  |  |  | 409,432 |
Other current assets |  |  | 32,503 |  |  |  | 27,375 |
Other PP&E |  |  | 15,067 |  |  |  | 14,904 |
Other non-current assets |  |  | 170 |  |  |  | 279 |
Investments in unconsolidated affiliates |  |  | 115,427 |  |  |  | 119,513 |
Total assets |  | $ | 581,104 |  |  | $ | 571,503 |

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- Definition The entire disclosure for reporting segments including data and tables. Reportable segments include those that meet any of the following quantitative thresholds a) it's reported revenue, including sales to external customers and intersegment sales or transfers is 10 percent or more of the combined revenue, internal and external, of all operating segments b) the absolute amount of its reported profit or loss is 10 percent or more of the greater, in absolute amount of 1) the combined reported profit of all operating segments that did not report a loss or 2) the combined reported loss of all operating segments that did report a loss c) its assets are 10 percent or more of the combined assets of all operating segments. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -URI http://asc.fasb.org/topic&trid=2134510 + Details
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