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Investments in Unconsolidated Affiliates | 6 Months Ended
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Dec. 31, 2023
Equity Method Investments and Joint Ventures [Abstract] |
Investments in Unconsolidated Affiliates | 14. Investments in Unconsolidated Affiliates Included within Other non-current assets are UNIFI’s investments in unconsolidated affiliates: U.N.F. Industries, Ltd. (“UNF”) and UNF America LLC (“UNFA”). U.N.F. Industries, Ltd. In December 2023, UNIFI dissolved its interest in UNF under an agreement whereby UNIFI agreed to pay the former joint venture partner $2,750 and recorded it as an associated contract termination cost within Restructuring costs on the Condensed Consolidated Statements of Operations and Comprehensive Loss. UNIFI made a payment to the former joint venture partner of $1,200 in the second quarter of fiscal 2024 and the remaining $1,550 is included in Other current liabilities, expected to be paid in the third quarter of fiscal 2024. Accordingly, the balance sheet information presented below as of December 31, 2023 does not include any amounts related to UNF. 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 located in Ridgeway, Virginia. UNFA is treated as a partnership for its income tax reporting. 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 typically negotiated every six months, based on market rates. As of December 31, 2023, UNIFI’s open purchase orders related to this supply agreement, all with UNFA, were $571. UNIFI’s raw material purchases under this supply agreement consisted of the following:
|  | For the Three Months Ended |  |  | For the Six Months Ended |
|  | December 31, 2023 |  |  | January 1, 2023 |  |  | December 31, 2023 |  |  | January 1, 2023 |
UNFA |  | $ | 3,787 |  |  | $ | 5,390 |  |  | $ | 6,913 |  |  | $ | 12,791 |
UNF |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 37 |
Total |  | $ | 3,787 |  |  | $ | 5,390 |  |  | $ | 6,913 |  |  | $ | 12,828 |
As of December 31, 2023, UNIFI had accounts payable due to UNFA of $2,020, and as of July 2, 2023, UNIFI had combined accounts payable due to UNF and UNFA of $3,440. UNIFI previously determined that UNF and UNFA were variable interest entities and also determined that UNIFI is the primary beneficiary of these entities, based on the terms of the supply agreement. As a result, these entities should be consolidated with UNIFI’s financial results. As (i) UNIFI purchases substantially all of the output from these entities and all intercompany sales would be eliminated in consolidation, (ii) the entities’ balance sheets constitute 5% or less of UNIFI’s current assets and total assets, 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 and instead is accounting for these entities as equity investments. 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 UNFA. As of December 31, 2023, UNIFI’s investment in UNFA was $3,101. Condensed balance sheet and income statement information for UNIFI’s unconsolidated affiliates (including reciprocal balances) are presented in the tables below.
|  | December 31, 2023 |  |  | July 2, 2023 |
Current assets |  | $ | 9,363 |  |  | $ | 10,608 |
Non-current assets |  |  | 473 |  |  |  | 494 |
Current liabilities |  |  | 3,634 |  |  |  | 7,304 |
Non-current liabilities |  |  | — |  |  |  | — |
Shareholders’ equity and capital accounts |  |  | 6,202 |  |  |  | 3,798 |
UNIFI’s portion of undistributed earnings |  |  | 3,042 |  |  |  | 2,938 |
|  | For the Three Months Ended |  |  | For the Six Months Ended |
|  | December 31, 2023 |  |  | January 1, 2023 |  |  | December 31, 2023 |  |  | January 1, 2023 |
Net sales |  | $ | 4,368 |  |  | $ | 7,224 |  |  | $ | 9,109 |  |  | $ | 16,035 |
Gross profit |  |  | 9 |  |  |  | 444 |  |  |  | 647 |  |  |  | 933 |
(Loss) income from operations |  |  | (467 | ) |  |  | 26 |  |  |  | (271 | ) |  |  | 51 |
Net (loss) income |  |  | (483 | ) |  |  | 14 |  |  |  | (318 | ) |  |  | 29 |
Depreciation and amortization |  |  | 7 |  |  |  | 28 |  |  |  | 21 |  |  |  | 56 |
Distributions received |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |

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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 -Topic 323 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 3 -Subparagraph (a)(3) -Publisher FASB -URI https://asc.fasb.org//1943274/2147481687/323-10-50-3 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Topic 323 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 3 -Subparagraph (d) -Publisher FASB -URI https://asc.fasb.org//1943274/2147481687/323-10-50-3 Reference 3: http://www.xbrl.org/2003/role/recommendedDisclosureRef -Topic 323 -SubTopic 740 -Name Accounting Standards Codification -Section 50 -Paragraph 2 -Subparagraph (f) -Publisher FASB -URI https://asc.fasb.org//1943274/2147481543/323-740-50-2 Reference 4: http://www.xbrl.org/2003/role/disclosureRef -Name Accounting Standards Codification -Topic 323 -Publisher FASB -URI https://asc.fasb.org//323/tableOfContent + Details
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