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Investments in Unconsolidated Affiliates and Variable Interest Entities | 9 Months Ended
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Mar. 28, 2021
Equity Method Investments And Joint Ventures [Abstract] |
Investments in Unconsolidated Affiliates and Variable Interest Entities | 18. Investments in Unconsolidated Affiliates and Variable Interest Entities As of March 28, 2021, UNIFI maintained investments in two entities classified as unconsolidated affiliates: U.N.F. Industries, Ltd. (“UNF”); and UNF America LLC (“UNFA”) (collectively known as “UNFs”). UNIFI’s combined investment in UNFs was $2,847, reflected within other non-current assets in the accompanying condensed consolidated balance sheets. U.N.F. Industries, Ltd. Raw material and production services for UNF are provided by Nilit Ltd. 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 Raw material and production services for UNFA are provided by Nilit America Inc. under separate supply and services agreements. UNFA’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 UNFA, UNIFI entered into a supply agreement with UNF and UNFA whereby UNIFI agreed to purchase all of its first quality nylon POY requirements for texturing (subject to certain exceptions) from either UNF or UNFA. The supply agreement has no stated minimum purchase quantities and pricing is negotiated every six months, based on market rates. As of March 28, 2021, UNIFI’s open purchase orders related to this supply agreement were $10,111. UNIFI’s raw material purchases under this supply agreement consisted of the following:
|  | For the Nine Months Ended |
|  | March 28, 2021 |  |  | March 29, 2020 |
UNFA |  | $ | 13,677 |  |  | $ | 13,219 |
UNF |  |  | 548 |  |  |  | 1,343 |
Total |  | $ | 14,225 |  |  | $ | 14,562 |
As of March 28, 2021 and June 28, 2020, UNIFI had combined accounts payable due to UNF and UNFA of $3,294 and $1,166, respectively. UNIFI has determined that UNF and UNFA are variable interest entities and that UNIFI is the primary beneficiary of these entities, based on the terms of the supply agreement discussed above. As a result, these entities should be consolidated with UNIFI’s financial results. As (i) UNIFI purchases substantially all of the output from the two entities, (ii) the two entities’ balance sheets constitute 3% or less of UNIFI’s current assets, total assets and total liabilities, and (iii) such balances are not expected to comprise a larger portion in the future, UNIFI has not included the accounts of UNF and UNFA in its consolidated financial statements. The financial results of UNF and UNFA are included in UNIFI’s consolidated financial statements with a one-month lag, using the equity method of accounting and with intercompany profits eliminated in accordance with UNIFI’s accounting policy. Other than the supply agreement discussed above, UNIFI does not provide any other commitments or guarantees related to either UNF or UNFA. Parkdale America, LLC Parkdale America, LLC (“PAL”) is a limited liability company treated as a partnership for income tax reporting purposes and in which UNIFI held a 34% ownership interest (the “PAL Investment”) until UNIFI sold the investment on April 29, 2020. UNIFI accounted for the PAL Investment using the equity method of accounting and, because PAL was deemed a significant subsidiary in certain prior fiscal years, comparative prior year data is presented separately below. Condensed balance sheet and income statement information for UNIFI’s unconsolidated affiliates (including reciprocal balances) are presented in the tables below.
|  | As of March 28, 2021 |  |  | As of June 28, 2020 |
|  | PAL |  |  | UNFs |  |  | Total |  |  | PAL |  |  | UNFs |  |  | Total |
Current assets |  | $ | — |  |  | $ | 8,473 |  |  | $ | 8,473 |  |  | $ | — |  |  | $ | 5,190 |  |  | $ | 5,190 |
Non-current assets |  |  | — |  |  |  | 693 |  |  |  | 693 |  |  |  | — |  |  |  | 561 |  |  |  | 561 |
Current liabilities |  |  | — |  |  |  | 3,472 |  |  |  | 3,472 |  |  |  | — |  |  |  | 1,415 |  |  |  | 1,415 |
Non-current liabilities |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |
Shareholders’ equity and capital accounts |  |  | — |  |  |  | 5,694 |  |  |  | 5,694 |  |  |  | — |  |  |  | 4,336 |  |  |  | 4,336 |
UNIFI’s portion of undistributed earnings |  |  | — |  |  |  | 2,486 |  |  |  | 2,486 |  |  |  | — |  |  |  | 1,424 |  |  |  | 1,424 |
|  | For the Three Months Ended March 28, 2021 |  |  | For the Three Months Ended March 29, 2020 |
|  | PAL |  |  | UNFs |  |  | Total |  |  | PAL |  |  | UNFs |  |  | Total |
Net sales |  | $ | — |  |  | $ | 5,983 |  |  | $ | 5,983 |  |  | $ | 170,854 |  |  | $ | 4,076 |  |  | $ | 174,930 |
Gross profit |  |  | — |  |  |  | 1,047 |  |  |  | 1,047 |  |  |  | 12,182 |  |  |  | 392 |  |  |  | 12,574 |
Income from operations |  |  | — |  |  |  | 629 |  |  |  | 629 |  |  |  | 7,747 |  |  |  | 8 |  |  |  | 7,755 |
Net income |  |  | — |  |  |  | 630 |  |  |  | 630 |  |  |  | 9,811 |  |  |  | 74 |  |  |  | 9,885 |
Depreciation and amortization |  |  | — |  |  |  | 38 |  |  |  | 38 |  |  |  | 8,647 |  |  |  | 23 |  |  |  | 8,670 |
Cash received by PAL under cotton rebate program |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 3,210 |  |  |  | — |  |  |  | 3,210 |
Earnings recognized by PAL for cotton rebate program |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 3,215 |  |  |  | — |  |  |  | 3,215 |
Distributions received |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |
|  | For the Nine Months Ended March 28, 2021 |  |  | For the Nine Months Ended March 29, 2020 |
|  | PAL |  |  | UNFs |  |  | Total |  |  | PAL |  |  | UNFs |  |  | Total |
Net sales |  | $ | — |  |  | $ | 13,847 |  |  | $ | 13,847 |  |  | $ | 531,669 |  |  | $ | 14,212 |  |  | $ | 545,881 |
Gross profit |  |  | — |  |  |  | 2,580 |  |  |  | 2,580 |  |  |  | 13,067 |  |  |  | 1,745 |  |  |  | 14,812 |
Income (loss) from operations |  |  | — |  |  |  | 1,348 |  |  |  | 1,348 |  |  |  | (554 | ) |  |  | 497 |  |  |  | (57 | )
Net income |  |  | — |  |  |  | 1,353 |  |  |  | 1,353 |  |  |  | 3,893 |  |  |  | 581 |  |  |  | 4,474 |
Depreciation and amortization |  |  | — |  |  |  | 116 |  |  |  | 116 |  |  |  | 30,671 |  |  |  | 113 |  |  |  | 30,784 |
Cash received by PAL under cotton rebate program |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 10,366 |  |  |  | — |  |  |  | 10,366 |
Earnings recognized by PAL for cotton rebate program |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 9,569 |  |  |  | — |  |  |  | 9,569 |
Distributions received |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 10,437 |  |  |  | — |  |  |  | 10,437 |

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- 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/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 323 -URI http://asc.fasb.org/topic&trid=2196965 + Details
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