Unifi (UFI) Q4 2024 earnings summary

Executive summary

• Q4 FY24 saw sequential and year-over-year improvements in sales, profitability, and margins, with EBITDA reaching $5.9M and gross profit at $10.8M, driven by cost reductions, operational efficiencies, and market share gains in North America, Brazil, and Asia.

• REPREVE Fiber products contributed 34% of Q4 sales, up from the prior quarter, and new products like Textile Takeback and ThermaLoop insulation were launched to drive future growth.

• Profitability Improvement Plan and innovation initiatives are supporting margin recovery and positioning the business for growth in FY25 and FY26.

• Inventory levels at retail and brand customers are near pre-pandemic norms, but restocking remains cautious amid sluggish consumer trends.

• Net loss narrowed to $4.0M ($0.22/share) in Q4, with Adjusted EBITDA up from $1.7M in the prior year.

Financial highlights

• Q4 FY24 consolidated net sales were $157.5M, up 6% sequentially and 4% year-over-year, with gross profit at $10.8M and gross margin at 6.9%.

• Adjusted EBITDA reached $5.9M, a 100% increase from Q3 FY24, and Adjusted EPS improved to ($0.22), up 61.3% sequentially.

• Brazil segment net sales grew 9% sequentially and nearly 19% year-over-year; Asia segment net sales rose 21% sequentially and over 17% year-over-year.

• FY24 net sales were $582.2M, down from $623.5M in FY23, but gross profit improved to $16.6M from $14.2M.

• Net debt at Q4 FY24 was $103.5M, up from $93.9M year-over-year; cash and cash equivalents at year-end were $26.8M.

Outlook and guidance

• FY25 net sales are expected to grow over 10% from FY24, with significant improvements in gross profit, margin, and Adjusted EBITDA.

• Q1 FY25 net sales guidance is $147M–$153M, with Adjusted EBITDA of $1M–$3M.

• FY25 capex is forecasted at $10M–$12M.

• Positive EBITDA is expected in every quarter of FY25.

• Continued volatility in effective tax rate is anticipated.