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v3.23.2

Income Taxes (Tables) | 12 Months Ended
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Jul. 02, 2023
Income Tax Disclosure [Abstract] |
Components of (Loss) Income before Income Taxes | The components of (loss) income before income taxes consist of the following:
|  | Fiscal 2023 |  |  | Fiscal 2022 |  |  | Fiscal 2021 |
U.S. |  | $ | (63,773 | ) |  | $ | (18,364 | ) |  | $ | (12,463 | )
Foreign |  |  | 18,330 |  |  |  | 45,192 |  |  |  | 58,810 |
(Loss) income before income taxes |  | $ | (45,443 | ) |  | $ | 26,828 |  |  | $ | 46,347 |
Schedule of Provision for Income Taxes | Provision for income taxes consists of the following:
|  | Fiscal 2023 |  |  | Fiscal 2022 |  |  | Fiscal 2021 |
Current: |  |  |  |  |  |  |  |  |
Federal |  | $ | 309 |  |  | $ | (1,163 | ) |  | $ | (577 | )
State |  |  | (7 | ) |  |  | 2 |  |  |  | 25 |
Foreign |  |  | 3,385 |  |  |  | 15,935 |  |  |  | 12,739 |
Total current tax expense |  |  | 3,687 |  |  |  | 14,774 |  |  |  | 12,187 |
Deferred: |  |  |  |  |  |  |  |  |
Federal |  |  | 41 |  |  |  | (630 | ) |  |  | (1,564 | )
State |  |  | 71 |  |  |  | 33 |  |  |  | 131 |
Foreign |  |  | (2,898 | ) |  |  | (2,520 | ) |  |  | 6,520 |
Total deferred tax expense |  |  | (2,786 | ) |  |  | (3,117 | ) |  |  | 5,087 |
Provision for income taxes |  | $ | 901 |  |  | $ | 11,657 |  |  | $ | 17,274 |
Reconciliation from Federal Statutory Tax Rate to Effective Tax Rate | Reconciliation from the federal statutory tax rate to the effective tax rate is as follows:
|  | Fiscal 2023 |  |  | Fiscal 2022 |  |  | Fiscal 2021 |
Federal statutory tax rate |  |  | 21.0 | % |  |  | 21.0 | % |  |  | 21.0 | %
Change in valuation allowance |  |  | (30.8 | ) |  |  | 12.6 |  |  |  | 5.0 |
Repatriation of foreign earnings and withholding taxes |  |  | (7.4 | ) |  |  | 3.9 |  |  |  | 1.8 |
Change in uncertain tax positions |  |  | (4.1 | ) |  |  | 2.4 |  |  |  | 0.5 |
Foreign income taxed at different rates |  |  | (1.9 | ) |  |  | 10.7 |  |  |  | 9.0 |
U.S. tax on GILTI |  |  | (1.5 | ) |  |  | 0.2 |  |  |  | 3.9 |
Nondeductible compensation |  |  | (0.8 | ) |  |  | 2.1 |  |  |  | 1.4 |
Recovery of income taxes in Brazil |  |  | 9.2 |  |  |  | — |  |  |  | — |
Research and other business credits |  |  | 3.6 |  |  |  | (4.0 | ) |  |  | (3.7 | )
State income taxes, net of federal tax benefit |  |  | 3.2 |  |  |  | (1.3 | ) |  |  | (0.2 | )
Tax expense on unremitted foreign earnings |  |  | 3.0 |  |  |  | 5.5 |  |  |  | 7.0 |
Nontaxable income |  |  | 2.5 |  |  |  | (10.2 | ) |  |  | (2.4 | )
Foreign tax credits |  |  | 2.3 |  |  |  | (0.5 | ) |  |  | (5.4 | )
Deemed repatriation of foreign earnings under Subpart F |  |  | — |  |  |  | — |  |  |  | 1.5 |
Domestic production activities deduction |  |  | — |  |  |  | — |  |  |  | 0.6 |
Rate benefit of U.S. federal NOL carryback |  |  | — |  |  |  | — |  |  |  | (2.8 | )
Nondeductible expenses and other |  |  | (0.3 | ) |  |  | 1.1 |  |  |  | 0.1 |
Effective tax rate |  |  | (2.0 | )% |  |  | 43.5 | % |  |  | 37.3 | %
Deferred Tax Assets and Liabilities | The significant components of UNIFI’s deferred tax assets and liabilities consist of the following:
|  | July 2, 2023 |  |  | July 3, 2022 |
Deferred tax assets: |  |  |  |  |  |
Capital loss carryforwards |  | $ | 16,390 |  |  | $ | 16,318 |
NOL carryforwards |  |  | 16,235 |  |  |  | 6,603 |
Tax credits |  |  | 11,634 |  |  |  | 12,079 |
Research and development costs |  |  | 9,137 |  |  |  | 7,409 |
Accrued compensation |  |  | 1,396 |  |  |  | 2,106 |
Other items |  |  | 5,614 |  |  |  | 4,877 |
Total gross deferred tax assets |  |  | 60,406 |  |  |  | 49,392 |
Valuation allowance |  |  | (43,910 | ) |  |  | (31,667 | )
Total deferred tax assets |  |  | 16,496 |  |  |  | 17,725 |
Deferred tax liabilities: |  |  |  |  |  |
PP&E |  |  | (11,901 | ) |  |  | (14,952 | )
Unremitted earnings |  |  | (3,872 | ) |  |  | (5,253 | )
Recovery of non-income taxes |  |  | — |  |  |  | 132 |
Other |  |  | (148 | ) |  |  | (138 | )
Total deferred tax liabilities |  |  | (15,921 | ) |  |  | (20,211 | )
Net deferred tax assets (liabilities) |  | $ | 575 |  |  | $ | (2,486 | )
Schedule of Components of Deferred Tax Valuation Allowance | Components of UNIFI’s deferred tax valuation allowance are as follows:
|  | Fiscal 2023 |  |  | Fiscal 2022 |  |  | Fiscal 2021 |
Capital loss carryforwards |  | $ | (16,390 | ) |  | $ | (16,318 | ) |  | $ | (17,429 | )
NOL carryforwards |  |  | (16,235 | ) |  |  | (4,570 | ) |  |  | (2,336 | )
Tax credits |  |  | (10,800 | ) |  |  | (10,779 | ) |  |  | (17,215 | )
Other deferred tax assets |  |  | (485 | ) |  |  | — |  |  |  | — |
Total deferred tax valuation allowance |  | $ | (43,910 | ) |  | $ | (31,667 | ) |  | $ | (36,980 | )
Reconciliation of Beginning and Ending Gross Amounts of Unrecognized Tax Benefits | A reconciliation of beginning and ending gross amounts of unrecognized tax benefits is as follows:
|  | Fiscal 2023 |  |  | Fiscal 2022 |  |  | Fiscal 2021 |
Balance at beginning of year |  | $ | 2,909 |  |  | $ | 2,590 |  |  | $ | 1,218 |
Gross increases (decreases) related to tax positions in prior periods |  |  | 1,436 |  |  |  | (89 | ) |  |  | 1,396 |
Gross increases (decreases) related to current period tax positions |  |  | 8 |  |  |  | 408 |  |  |  | (24 | )
Gross decreases related to settlements with tax authorities |  |  | — |  |  |  | — |  |  |  | — |
Gross decreases related to lapse of applicable statute of limitations |  |  | — |  |  |  | — |  |  |  | — |
Balance at end of year |  | $ | 4,353 |  |  | $ | 2,909 |  |  | $ | 2,590 |

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