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Business Segment Information | 12 Months Ended
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Jun. 24, 2018
Segment Reporting [Abstract] |
Business Segment Information | 25. 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 (“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 primarily 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 primarily 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 primarily 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 primarily 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 NAFTA and CAFTA-DR economic trading zone. 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 Renewables (up through December 23, 2016, the date of the sale by UNIFI of its 60% equity ownership interest in Renewables) and for-hire transportation services. 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. For-hire transportation services revenue is derived from performing common carrier services utilizing UNIFI’s fleet of transportation equipment. 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 Fiscal Year Ended June 24, 2018 |
|  | Polyester |  |  | Nylon |  |  | International |  |  | All Other |  |  | Total |
Net sales |  | $ | 364,169 |  |  | $ | 102,639 |  |  | $ | 207,884 |  |  | $ | 4,220 |  |  | $ | 678,912 |
Cost of sales |  |  | 333,078 |  |  |  | 92,155 |  |  |  | 163,300 |  |  |  | 3,951 |  |  |  | 592,484 |
Gross profit |  |  | 31,091 |  |  |  | 10,484 |  |  |  | 44,584 |  |  |  | 269 |  |  |  | 86,428 |
Segment depreciation expense |  |  | 15,893 |  |  |  | 2,197 |  |  |  | 1,648 |  |  |  | 256 |  |  |  | 19,994 |
Segment Profit |  | $ | 46,984 |  |  | $ | 12,681 |  |  | $ | 46,232 |  |  | $ | 525 |  |  | $ | 106,422 |
|  | For the Fiscal Year Ended June 25, 2017 |
|  | Polyester |  |  | Nylon |  |  | International |  |  | All Other |  |  | Total |
Net sales |  | $ | 355,740 |  |  | $ | 112,704 |  |  | $ | 173,686 |  |  | $ | 5,140 |  |  | $ | 647,270 |
Cost of sales |  |  | 315,655 |  |  |  | 100,633 |  |  |  | 131,087 |  |  |  | 5,731 |  |  |  | 553,106 |
Gross profit (loss) |  |  | 40,085 |  |  |  | 12,071 |  |  |  | 42,599 |  |  |  | (591 | ) |  |  | 94,164 |
Segment depreciation expense |  |  | 13,921 |  |  |  | 2,125 |  |  |  | 1,119 |  |  |  | 638 |  |  |  | 17,803 |
Segment Profit |  | $ | 54,006 |  |  | $ | 14,196 |  |  | $ | 43,718 |  |  | $ | 47 |  |  | $ | 111,967 |
|  | For the Fiscal Year Ended June 26, 2016 |
|  | Polyester |  |  | Nylon |  |  | International |  |  | All Other |  |  | Total |
Net sales |  | $ | 383,167 |  |  | $ | 131,715 |  |  | $ | 122,554 |  |  | $ | 6,201 |  |  | $ | 643,637 |
Cost of sales |  |  | 333,638 |  |  |  | 113,906 |  |  |  | 95,666 |  |  |  | 6,795 |  |  |  | 550,005 |
Gross profit (loss) |  |  | 49,529 |  |  |  | 17,809 |  |  |  | 26,888 |  |  |  | (594 | ) |  |  | 93,632 |
Segment depreciation expense |  |  | 11,188 |  |  |  | 1,899 |  |  |  | 885 |  |  |  | 820 |  |  |  | 14,792 |
Segment Profit |  | $ | 60,717 |  |  | $ | 19,708 |  |  | $ | 27,773 |  |  | $ | 226 |  |  | $ | 108,424 |
The reconciliations of segment gross profit (loss) to consolidated income before income taxes are as follows:
|  | For the Fiscal Year Ended |
|  | June 24, 2018 |  |  | June 25, 2017 |  |  | June 26, 2016 |
Polyester |  | $ | 31,091 |  |  | $ | 40,085 |  |  | $ | 49,529 |
Nylon |  |  | 10,484 |  |  |  | 12,071 |  |  |  | 17,809 |
International |  |  | 44,584 |  |  |  | 42,599 |  |  |  | 26,888 |
All Other |  |  | 269 |  |  |  | (591 | ) |  |  | (594 | )
Segment gross profit |  |  | 86,428 |  |  |  | 94,164 |  |  |  | 93,632 |
SG&A expenses |  |  | 56,077 |  |  |  | 50,829 |  |  |  | 47,502 |
(Benefit) provision for bad debts |  |  | (38 | ) |  |  | (123 | ) |  |  | 1,684 |
Other operating expense (income), net |  |  | 1,590 |  |  |  | (310 | ) |  |  | 2,248 |
Operating income |  |  | 28,799 |  |  |  | 43,768 |  |  |  | 42,198 |
Interest income |  |  | (560 | ) |  |  | (517 | ) |  |  | (610 | )
Interest expense |  |  | 4,935 |  |  |  | 3,578 |  |  |  | 3,528 |
Loss on sale of business |  |  | — |  |  |  | 1,662 |  |  |  | — |
Equity in earnings of unconsolidated affiliates |  |  | (5,787 | ) |  |  | (4,230 | ) |  |  | (8,963 | )
Income before income taxes |  | $ | 30,211 |  |  | $ | 43,275 |  |  | $ | 48,243 |
The reconciliations of segment depreciation and amortization expense to consolidated depreciation and amortization expense are as follows:
|  | For the Fiscal Year Ended |
|  | June 24, 2018 |  |  | June 25, 2017 |  |  | June 26, 2016 |
Polyester |  | $ | 15,893 |  |  | $ | 13,921 |  |  | $ | 11,188 |
Nylon |  |  | 2,197 |  |  |  | 2,125 |  |  |  | 1,899 |
International |  |  | 1,648 |  |  |  | 1,119 |  |  |  | 885 |
All Other |  |  | 256 |  |  |  | 638 |  |  |  | 820 |
Segment depreciation expense |  |  | 19,994 |  |  |  | 17,803 |  |  |  | 14,792 |
Other depreciation and amortization expense |  |  | 2,591 |  |  |  | 2,565 |  |  |  | 2,736 |
Depreciation and amortization expense |  | $ | 22,585 |  |  | $ | 20,368 |  |  | $ | 17,528 |
The reconciliations of segment capital expenditures to consolidated capital expenditures are as follows:
|  | For the Fiscal Year Ended |
|  | June 24, 2018 |  |  | June 25, 2017 |  |  | June 26, 2016 |
Polyester |  | $ | 16,605 |  |  | $ | 25,442 |  |  | $ | 44,517 |
Nylon |  |  | 1,366 |  |  |  | 1,247 |  |  |  | 2,548 |
International |  |  | 3,099 |  |  |  | 4,734 |  |  |  | 2,755 |
Segment capital expenditures |  |  | 21,070 |  |  |  | 31,423 |  |  |  | 49,820 |
Other capital expenditures |  |  | 3,959 |  |  |  | 1,767 |  |  |  | 2,517 |
Capital expenditures |  | $ | 25,029 |  |  | $ | 33,190 |  |  | $ | 52,337 |
In addition to the capital expenditures noted above, Polyester assets were added in fiscal 2017 via a construction financing arrangement. During fiscal 2017, UNIFI changed the segmentation of cash and cash equivalents to better reflect its ability to expand operations in multiple regions. Thus, in the reconciliations below, cash and cash equivalents have been reclassified out of individual segments and into other current assets for the fiscal years presented. The reconciliations of segment total assets to consolidated total assets are as follows:
|  | June 24, 2018 |  |  | June 25, 2017 |  |  | June 26, 2016 |
Polyester |  | $ | 284,261 |  |  | $ | 270,819 |  |  | $ | 243,093 |
Nylon |  |  | 57,378 |  |  |  | 57,789 |  |  |  | 63,141 |
International |  |  | 95,006 |  |  |  | 80,824 |  |  |  | 66,998 |
Segment total assets |  |  | 436,645 |  |  |  | 409,432 |  |  |  | 373,232 |
Other current assets |  |  | 30,945 |  |  |  | 27,375 |  |  |  | 13,337 |
Other PP&E |  |  | 17,373 |  |  |  | 14,904 |  |  |  | 16,597 |
Other non-current assets |  |  | 4,205 |  |  |  | 279 |  |  |  | 4,864 |
Investments in unconsolidated affiliates |  |  | 112,639 |  |  |  | 119,513 |  |  |  | 117,412 |
Total assets |  | $ | 601,807 |  |  | $ | 571,503 |  |  | $ | 525,442 |
Product sales (excluding the All Other category) are as follows:
|  | For the Fiscal Year Ended |
|  | June 24, 2018 |  |  | June 25, 2017 |  |  | June 26, 2016 |
Polyester |  | $ | 572,053 |  |  | $ | 529,426 |  |  | $ | 505,721 |
Nylon |  |  | 102,639 |  |  |  | 112,704 |  |  |  | 131,715 |
Total |  | $ | 674,692 |  |  | $ | 642,130 |  |  | $ | 637,436 |
Geographic Data Geographic information is set forth below, beginning with net sales. Brazil and China are reported separately from other foreign countries when corresponding net sales for a fiscal year exceed 10% of consolidated net sales.
|  | For the Fiscal Year Ended |
|  | June 24, 2018 |  |  | June 25, 2017 |  |  | June 26, 2016 |
United States |  | $ | 420,920 |  |  | $ | 424,490 |  |  | $ | 472,287 |
Brazil |  |  | 110,587 |  |  |  | 109,079 |  |  |  | 83,087 |
China |  |  | 90,998 |  |  | nm |  |  | nm |
Remaining Foreign Countries |  |  | 56,407 |  |  |  | 113,701 |  |  |  | 88,263 |
Total |  | $ | 678,912 |  |  | $ | 647,270 |  |  | $ | 643,637 |
Export sales from UNIFI’s U.S. operations to external customers |  | $ | 94,205 |  |  | $ | 104,229 |  |  | $ | 113,725 |
nm – Respective amount does not meet UNIFI’s 10% threshold for disclosure. The information for net sales is based on the operating locations from where the items were produced or distributed. Geographic information for long-lived assets is as follows:
|  | June 24, 2018 |  |  | June 25, 2017 |  |  | June 26, 2016 |
United States |  | $ | 305,229 |  |  | $ | 304,696 |  |  | $ | 292,854 |
Brazil |  |  | 12,679 |  |  |  | 12,616 |  |  |  | 9,714 |
Remaining Foreign Countries |  |  | 6,317 |  |  |  | 8,360 |  |  |  | 8,595 |
Total |  | $ | 324,225 |  |  | $ | 325,672 |  |  | $ | 311,163 |
Long-lived assets are comprised of PP&E, net; intangible assets, net; investments in unconsolidated affiliates; and other non-current assets. Geographic information for total assets is as follows:
|  | June 24, 2018 |  |  | June 25, 2017 |  |  | June 26, 2016 |
United States |  | $ | 455,963 |  |  | $ | 445,947 |  |  | $ | 427,679 |
Brazil |  |  | 59,657 |  |  |  | 58,598 |  |  |  | 53,993 |
Remaining Foreign Countries |  |  | 86,187 |  |  |  | 66,958 |  |  |  | 43,770 |
Total |  | $ | 601,807 |  |  | $ | 571,503 |  |  | $ | 525,442 |

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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://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -URI http://asc.fasb.org/topic&trid=2134510 + Details
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