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Business Segment Information
 12 Months Ended
Jul. 02, 2023
Segment Reporting [Abstract]  
Business Segment Information

24. 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 principal executive officer, who is the chief operating decision maker (the “CODM”), in order to assess performance and allocate resources. Characteristics of UNIFI which were relied upon in making the determination of reportable segments include the nature of the products sold, the internal organizational 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.

In the fourth quarter of fiscal 2022, UNIFI realigned its operating and reportable segments to correspond with changes to its operating model, management structure, and organizational responsibilities, reflecting the manner in which business performance is evaluated, resources are allocated, and financial statement users can best understand the results of operations. Accordingly, UNIFI reports the Americas Segment, Brazil Segment, and Asia Segment. The Americas Segment represents the combination of the previously reported Polyester Segment, Nylon Segment, and All Other category. There are no changes to the composition of the historical Brazil Segment and Asia Segment. Comparative prior period disclosures have been updated to conform to the new presentation.

UNIFI's three reportable segments are organized as follows:

•
The operations within the Americas Segment exhibit similar long-term economic characteristics and primarily sell into an economic trading zone covered by the USMCA and CAFTA-DR to similar customers utilizing similar methods of distribution. These operations derive revenues primarily from manufacturing synthetic and recycled textile products with sales primarily to yarn manufacturers, knitters, and weavers that produce yarn and/or fabric for the apparel, hosiery, automotive, home furnishings, industrial, medical, and other end-use markets principally in North and Central America. The Americas Segment consists of sales and manufacturing operations in the U.S., El Salvador, and Colombia.
•
The Brazil Segment primarily manufactures and sells polyester-based products to knitters and weavers that produce fabric for the apparel, automotive, home furnishings, industrial, and other end-use markets principally in Brazil. The Brazil Segment includes a manufacturing location and sales offices in Brazil.
•
The operations within the Asia Segment exhibit similar long-term economic characteristics and sell to similar customers utilizing similar methods of distribution primarily in Asia and Europe. The Asia Segment primarily sources synthetic and recycled textile products from third-party suppliers and sells to yarn manufacturers, knitters, and weavers that produce fabric for the apparel, automotive, home furnishings, industrial, and other end-use markets principally in Asia. The Asia Segment includes sales offices in China, Turkey, and Hong Kong.

UNIFI evaluates the operating performance of its segments based upon Segment Profit, 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 segment disclosures, as they are (i) insignificant to UNIFI’s segments and eliminated from consolidated reporting and (ii) excluded from segment evaluations performed by the CODM. However, an intersegment technologies expense charged from the Americas Segment to the Asia Segment is not eliminated from segment results. The technologies expense (i) reflects the sharing of certain manufacturing know-how, processes, and product technical information and design and (ii) is included in the segment evaluations performed by the CODM.

Selected financial information is presented below:

 

 

Fiscal 2023

 

 

 

Americas

 

 

Brazil

 

 

Asia

 

 

Total

 

Net sales

 

$

389,662

 

 

$

119,062

 

 

$

114,803

 

 

$

623,527

 

Cost of sales

 

 

404,321

 

 

 

106,900

 

 

 

98,065

 

 

 

609,286

 

Gross (loss) profit

 

 

(14,659

)

 

 

12,162

 

 

 

16,738

 

 

 

14,241

 

Segment depreciation expense

 

 

22,044

 

 

 

2,035

 

 

 

—

 

 

 

24,079

 

Segment Profit

 

$

7,385

 

 

$

14,197

 

 

$

16,738

 

 

$

38,320

 

 

 

Fiscal 2022

 

 

 

Americas

 

 

Brazil

 

 

Asia

 

 

Total

 

Net sales

 

$

483,085

 

 

$

126,066

 

 

$

206,607

 

 

$

815,758

 

Cost of sales

 

 

458,617

 

 

 

98,925

 

 

 

177,731

 

 

 

735,273

 

Gross profit

 

 

24,468

 

 

 

27,141

 

 

 

28,876

 

 

 

80,485

 

Segment depreciation expense

 

 

21,153

 

 

 

1,500

 

 

 

—

 

 

 

22,653

 

Segment Profit

 

$

45,621

 

 

$

28,641

 

 

$

28,876

 

 

$

103,138

 

 

 

Fiscal 2021

 

 

 

Americas

 

 

Brazil

 

 

Asia

 

 

Total

 

Net sales

 

$

386,779

 

 

$

95,976

 

 

$

184,837

 

 

$

667,592

 

Cost of sales

 

 

350,373

 

 

 

64,281

 

 

 

159,444

 

 

 

574,098

 

Gross profit

 

 

36,406

 

 

 

31,695

 

 

 

25,393

 

 

 

93,494

 

Segment depreciation expense

 

 

21,054

 

 

 

1,315

 

 

 

—

 

 

 

22,369

 

Segment Profit

 

$

57,460

 

 

$

33,010

 

 

$

25,393

 

 

$

115,863

 

The reconciliations of segment gross profit to consolidated (loss) income before income taxes are as follows:

 

 

Fiscal 2023

 

 

Fiscal 2022

 

 

Fiscal 2021

 

Americas

 

$

(14,659

)

 

$

24,468

 

 

$

36,406

 

Brazil

 

 

12,162

 

 

 

27,141

 

 

 

31,695

 

Asia

 

 

16,738

 

 

 

28,876

 

 

 

25,393

 

Segment gross profit

 

 

14,241

 

 

 

80,485

 

 

 

93,494

 

SG&A

 

 

47,345

 

 

 

52,489

 

 

 

51,334

 

Benefit for bad debts

 

 

(89

)

 

 

(445

)

 

 

(1,316

)

Other operating expenses (income), net

 

 

7,856

 

 

 

(158

)

 

 

4,865

 

Operating (loss) income

 

 

(40,871

)

 

 

28,599

 

 

 

38,611

 

Interest income

 

 

(2,109

)

 

 

(1,524

)

 

 

(603

)

Interest expense

 

 

7,577

 

 

 

3,085

 

 

 

3,323

 

Equity in earnings of unconsolidated affiliates

 

 

(896

)

 

 

(605

)

 

 

(739

)

Recovery of non-income taxes, net

 

 

—

 

 

 

815

 

 

 

(9,717

)

(Loss) income before income taxes

 

$

(45,443

)

 

$

26,828

 

 

$

46,347

 

The reconciliations of segment depreciation and amortization expense to consolidated depreciation and amortization expense are as follows:

 

 

Fiscal 2023

 

 

Fiscal 2022

 

 

Fiscal 2021

 

Americas

 

$

22,044

 

 

$

21,153

 

 

$

21,054

 

Brazil

 

 

2,035

 

 

 

1,500

 

 

 

1,315

 

Asia

 

 

—

 

 

 

—

 

 

 

—

 

Segment depreciation expense

 

 

24,079

 

 

 

22,653

 

 

 

22,369

 

Other depreciation and amortization expense

 

 

3,107

 

 

 

3,554

 

 

 

3,159

 

Depreciation and amortization expense

 

$

27,186

 

 

$

26,207

 

 

$

25,528

 

The reconciliations of segment capital expenditures to consolidated capital expenditures are as follows:

 

 

Fiscal 2023

 

 

Fiscal 2022

 

 

Fiscal 2021

 

Americas

 

$

25,943

 

 

$

29,841

 

 

$

16,053

 

Brazil

 

 

10,244

 

 

 

9,253

 

 

 

3,461

 

Asia

 

 

41

 

 

 

236

 

 

 

666

 

Segment capital expenditures

 

 

36,228

 

 

 

39,330

 

 

 

20,180

 

Other capital expenditures

 

 

206

 

 

 

301

 

 

 

998

 

Capital expenditures

 

$

36,434

 

 

$

39,631

 

 

$

21,178

 

 

The reconciliations of segment total assets to consolidated total assets are as follows:

 

 

July 2, 2023

 

 

July 3, 2022

 

Americas

 

$

334,303

 

 

$

379,898

 

Brazil

 

 

115,676

 

 

 

98,731

 

Asia

 

 

60,752

 

 

 

81,322

 

Segment total assets

 

 

510,731

 

 

 

559,951

 

Other current assets

 

 

5,179

 

 

 

5,145

 

Other PP&E

 

 

15,034

 

 

 

17,809

 

Other operating lease assets

 

 

504

 

 

 

756

 

Other non-current assets

 

 

4,374

 

 

 

2,985

 

Investments in unconsolidated affiliates

 

 

2,997

 

 

 

2,072

 

Total assets

 

$

538,819

 

 

$

588,718

 

Geographic Data

 

Net Sales

 

Fiscal 2023

 

 

Fiscal 2022

 

 

Fiscal 2021

 

U.S.

 

$

355,197

 

 

$

430,381

 

 

$

341,897

 

China

 

 

100,183

 

 

 

185,558

 

 

 

171,261

 

Brazil

 

 

119,061

 

 

 

126,066

 

 

 

95,976

 

Remaining Foreign Countries

 

 

49,086

 

 

 

73,753

 

 

 

58,458

 

Total

 

$

623,527

 

 

$

815,758

 

 

$

667,592

 

 

 

 

 

 

 

 

 

 

 

Export sales from UNIFI’s U.S. operations to external customers

 

$

52,051

 

 

$

74,589

 

 

$

59,055

 

 

The net sales amounts are based on the operating locations from where the items were produced or distributed.

 

Long-Lived Assets

 

July 2, 2023

 

 

July 3, 2022

 

U.S.

 

$

184,249

 

 

$

196,885

 

Brazil

 

 

36,945

 

 

 

21,927

 

China

 

 

968

 

 

 

2,211

 

Remaining Foreign Countries

 

 

18,658

 

 

 

12,932

 

Total

 

$

240,820

 

 

$

233,955

 

Long-lived assets are comprised of PP&E, net; operating lease assets; intangible assets, net; investments in unconsolidated affiliates; and other non-current assets.