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Income Taxes (Tables)

12 Months Ended

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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