Unifi (UFI) investor relations material

Executive summary

• Q4 net sales declined 12% year-over-year to $138.5M, mainly due to trade-related uncertainty and demand volatility, with customers pausing orders in North America and Asia.

• Gross loss of $1.1M and negative gross margin of (0.8)% compared to a gross profit of $10.8M and 6.9% margin last year.

• Sale of the Madison, NC facility generated $45M, used to pay down debt and eliminate a major source of past profit misses.

• Transitioned Madison's volume to Yadkinville, NC (40% capacity increase) and El Salvador, requiring new hires and equipment, with some short-term inefficiencies.

• REPREVE fiber represented 30% of Q4 sales, down 4pp year-over-year due to trade uncertainty.

Financial highlights

• Q4 consolidated net sales were $138.5M, down from $157.5M in Q4 FY24, with gross loss of ($1.1)M and gross margin of (0.8)%.

• Americas, Asia, and Brazil segments all saw lower sales and gross profit due to weaker sales mix, lower volumes, and unfavorable currency effects.

• Adjusted EBITDA for the quarter was $(4.1)M, down from $5.9M last year.

• For the fiscal year, net sales were $571.3M, down from $582.2M; net loss was $20.3M, improved from a $47.4M loss last year.

• REPREVE fiber sales for FY25 totaled $175M, with quarterly share of net sales at 30%.

Outlook and guidance

• Q1 FY26 net sales and adjusted EBITDA expected to improve sequentially, driven by cost savings and demand normalization.

• Full-year 2026 to benefit from higher utilization, lower costs, and anticipated clarity in global trade, supporting profitability and positive cash flow.

• Manufacturing transition charges of $1M–$2M expected in 2026, with over $20M in annualized cost savings once complete.

• Management expects long-term benefits from a leaner manufacturing footprint and ongoing demand for sustainable products.