UNIFI INC

Previous wording

The following is management’s discussion and analysis of certain significant factors that have affected UNIFI’s operations, along with material changes in financial condition, during the periods included in the accompanying condensed consolidated financial statements. A reference to a “note” in this section refers to the accompanying notes to condensed consolidated financial statements. A reference to the “current period” refers to the three-month period ended March 29, 2026, while a reference to the “prior period” refers to the three-month period ended March 30, 2025. A reference to the “current nine-month period” refers to the nine-month period ended March 29, 2026, while a reference to the “prior nine-month period” refers to the nine-month period ended March 30, 2025. Such references may be accompanied by certain phrases for added clarity. The current period and the prior period each consisted of 13 weeks. The current nine-month period and the prior nine-month period each consisted of 39 weeks.

Current wording

The following is management’s discussion and analysis of certain significant factors that have affected UNIFI’s operations, along with material changes in financial condition, during the periods included in the accompanying condensed consolidated financial statements. A reference to a “note” in this section refers to the accompanying notes to condensed consolidated financial statements. A reference to the “current period” refers to the three-month period ended September 27, 2026, while a reference to the “prior period” refers to the three-month period ended September 28, 2025. Such references may be accompanied by certain phrases for added clarity. The current period and the prior period each consisted of 13 weeks.

Previous wording

Beyond the specific demand challenges within the textile industry as described in the Form 10-K, our business has been adversely impacted by: (i) the impact of inflation, including tariffs, on consumer spending, (ii) elevated interest rates for consumers and customers, including the impact on the carrying costs of customer inventories, and (iii) the volatility in customer order patterns resulting from trade and regulatory matters (including tariffs). This volatility in demand resulted from customers buying ahead of tariffs becoming effective for certain countries and difficulty in predicting final tariff assessments. A tariff structure that disproportionately impacts one country or region over another may result in a shift in manufacturing or flow of goods particularly as it relates to textile production across Asia and Central America. Such lower tariff countries or regions may be situated outside of UNIFI’s existing global supply chain. If UNIFI is unable to move production based on these shifts in regional demand, we may lose sales and experience an adverse effect on our financial condition, results of operations, or cash flows. UNIFI will continue to monitor these and other aspects of the current environment, leverage our global business model as necessary, and work closely with stakeholders to ensure business continuity and liquidity.

Current wording

Our business continues to be adversely impacted by: (i) the effects of inflation, including tariffs, on consumer spending, (ii) elevated interest rates for consumers and customers, including the impact on the carrying costs of customer inventories, (iii) the volatility in customer order patterns, and (iv) freight disruptions or delays in the Eastern Hemisphere. UNIFI will continue to monitor these and other aspects of the current environment, leverage our global business model as necessary, and work closely with stakeholders to ensure business continuity and liquidity.

Previous wording

Specific to other ongoing geopolitical tensions, we recognize the disruption to global markets and supply chains caused by the conflicts in Ukraine and the Middle East, particularly in Iran. Escalating geopolitical tensions involving Iran have contributed to volatility in petroleum markets. In early March 2026, disruptions to certain supply routes associated with this conflict resulted in a sharp increase in crude oil and related feedstock prices. As a result of higher raw material costs stemming from disruptions in the Middle East, the Company implemented responsive price increases and surcharges that began in April 2026 and are expected to continue while petrochemical-related inflation remains elevated. We recognize that additional or prolonged impacts to the petroleum or other global markets could cause further inflationary pressures to our global raw material costs or additional unforeseen adverse impacts.

Current wording

As discussed in the 2026 Form 10-K, escalating geopolitical tensions involving the Middle East, particularly Iran, continue to contribute to volatility in petroleum markets impacting freight and raw material costs. The Company implemented responsive price increases and surcharges that began in April 2026 and are expected to continue while petrochemical-related inflation remains elevated and volatile. We recognize that additional or prolonged impacts to the petroleum or other global markets could cause further inflationary pressures to our global raw material costs, inconsistent customer ordering patterns or additional unforeseen adverse impacts.

Previous wording

Despite a marginally more stable labor pool recently, global demand volatility and uncertainty continues. The threat of an economic slowdown and global tensions continue to create uncertainty, more specifically the conflict in Iran contributed to rising freight and raw material costs beginning in March 2026. Such existing challenges and future uncertainty, particularly for rising input costs, labor productivity, and global demand, could worsen and/or continue for prolonged periods, materially impacting our consolidated sales, gross profit, and operating cash flows. Also, the need for future selling price adjustments in connection with inflationary costs could impact our ability to retain current customer programs and compete successfully for new programs in certain regions.

Current wording

Such existing challenges and future uncertainty, including labor productivity and global demand, could worsen and/or continue for prolonged periods, materially impacting our consolidated sales, gross profit, and operating cash flows. Also, the need for future selling price adjustments in connection with inflationary costs could impact our ability to retain current customer programs and compete successfully for new programs in certain regions.

Previous wording

UNIFI has been expanding its supply chain and business model across multiple geographies over the last several years. Particularly, (i) our feedstock supply spans multiple domestic and foreign markets, (ii) our commercial position in the Central American market remains key to servicing compliant business for USMCA and CAFTA-DR programs, and (iii) we have expanded our asset light model beyond China with the addition of Unifi Textiles India in October 2024. Each of these initiatives affords us diversity in this dynamic trade environment and greater flexibility in servicing our customer base.

Current wording

UNIFI has been expanding its supply chain and business model across multiple geographies over the last several years. Particularly, (i) our feedstock supply spans multiple domestic and foreign markets, (ii) our commercial position in the Central American market remains key to servicing compliant business for USMCA and CAFTA-DR programs, and (iii) we expanded our asset-light model beyond China with the addition of Unifi Textiles India. Each of these initiatives affords us diversity in this dynamic trade environment and greater flexibility in servicing our customer base.

Previous wording

During October 2025, UNIFI implemented additional cost-saving initiatives that included reducing variable manufacturing costs across labor, spend, and support functions, while also eliminating salaried positions in the U.S. ("Fiscal 2026 Profit Improvement Plan"). Accordingly, in the second quarter of fiscal 2026, UNIFI recorded employee separation costs of $1,093 in connection with the Fiscal 2026 Profit Improvement Plan and a $308 gain from disposals of assets from the consolidation of Americas yarn manufacturing operations.

Current wording

During October 2025, UNIFI implemented additional cost-saving initiatives that included reducing variable manufacturing costs across labor, spend, and support functions, while also eliminating salaried positions in the U.S. (the “Fiscal 2026 Profit Improvement Plan”). Accordingly, in the second quarter of fiscal 2026, UNIFI recorded employee separation costs of $1,093 in connection with the Fiscal 2026 Profit Improvement Plan and a $308 gain from disposals of assets from the consolidation of Americas yarn manufacturing operations.

Previous wording

In the first quarter of fiscal 2026, UNIFI incurred various transition costs totaling $1,068 in connection with the consolidation of its yarn manufacturing operations including (i) facility closure and equipment relocation costs (including asset impairments and disposals) of $1,021, and (ii) employee separation costs of $47. The facility closure, equipment relocation, and employee separation costs were all recorded within Restructuring costs, net in the Condensed Consolidated Statements of Operations. In the third quarter of fiscal 2025, UNIFI incurred various transition costs totaling $2,900 in connection with the consolidation of its yarn manufacturing operations including (i) facility closure and equipment relocation costs of $1,088, (ii) inventory write-downs of $1,000, (iii) excess manufacturing costs of $580, and (iv) employee separation or retention costs of $232. The facility closure, equipment relocation, employee separation and retention costs were all recorded within Restructuring costs and the inventory write-downs and excess manufacturing costs were recorded within Cost of sales in the Condensed Consolidated Statements of Operations.

Current wording

In the first quarter of fiscal 2026, UNIFI incurred various restructuring costs totaling $1,068 in connection with the consolidation of its yarn manufacturing operations including (i) facility closure and equipment relocation costs (including asset impairments and disposals) of $1,021, and (ii) employee separation costs of $47. The facility closure, equipment relocation, and employee separation costs were all recorded within Restructuring costs, net in the Condensed Consolidated Statements of Operations.

Previous wording

In the third quarter of fiscal 2026, UNIFI recorded a foreign currency gain of $1,775. In December 2025, Brazil declared dividends against the majority of its retained earnings in connection with certain tax law changes related to future dividends. Foreign currency transaction gains (losses) are recorded to reflect changes in the exchange rate of the Brazilian Real to the U.S. Dollar while the dividend payable is outstanding. The associated tax impact was estimated to be $272, based on the estimated annual tax rate for the period.

Current wording

In the first quarter of fiscal 2027, UNIFI recorded a foreign currency loss of $91. In December 2025, Brazil declared dividends against the majority of its retained earnings in connection with certain tax law changes related to future dividends. Foreign currency transaction gains (losses) are recorded to reflect changes in the exchange rate of the Brazilian Real to the U.S. Dollar while the dividend payable is outstanding. The associated tax impact was estimated to be $16, based on the estimated annual tax rate for the period.

Previous wording

In the second quarter of fiscal 2025, UNIFI recorded a gain of $4,296 related to the sale of a warehouse located in Yadkinville, North Carolina. The associated tax impact was estimated to be $0 due to a valuation allowance against net operating losses and capital losses in the U.S.

Current wording

In the first quarter of fiscal 2027, UNIFI recorded various transition costs totaling $265 in Other operating expense, net in connection with the purchase agreement entered into on August 16, 2026 for the sale of two non-strategic real estate assets in Yadkinville, North Carolina. The associated tax impact was estimated to be $0 due to a valuation allowance against net operating losses in the U.S.

Previous wording

In the third quarter of fiscal 2025, UNIFI incurred various transition costs totaling $2,900 in connection with the consolidation of its yarn manufacturing operations including (i) facility closure and equipment relocation costs of $1,088, (ii) inventory write-downs of $1,000, (iii) excess manufacturing costs of $580, and (iv) employee separation or retention costs of $232. The facility closure, equipment relocation, employee separation and retention costs were all recorded within Restructuring costs and the inventory write-downs and excess manufacturing costs were recorded within Cost of sales in the Condensed Consolidated Statements of Operations. The associated tax impact was estimated to be $0 due to a valuation allowance against net operating losses in the U.S.

Current wording

In the first quarter of fiscal 2026, UNIFI incurred various restructuring costs totaling $1,068 in connection with the consolidation of its yarn manufacturing operations including (i) facility closure and equipment relocation costs (including asset impairments and disposals) of $1,021, and (ii) employee separation costs of $47. The facility closure, equipment relocation, and employee separation costs were all recorded within Restructuring costs in the Condensed Consolidated Statements of Operations. The associated tax impact was estimated to be $0 due to a valuation allowance against net operating losses in the U.S.

Previous wording

Consolidated net sales for the current nine-month period decreased by $45,730, or 10.6%, and consolidated sales volumes decreased 7.5%, compared to the prior nine-month period. Net sales in the current nine-month period were lower primarily due to (i) lower sales volumes in the Asia Segment, (ii) lower sales volumes and lower-priced sales mix in the Americas Segment, and (iii) lower sales volumes and prices in the Brazil Segment. Overall sales remain depressed, particularly in the Americas and Asia Segments as a result of continued volatility from uncertainty over ongoing geopolitical events, global trade policies, and competition from lower-priced products.

Current wording

Consolidated net sales for the current period decreased by $7,754, or 5.7%, and consolidated sales volumes decreased 12.0%, compared to the prior period. Net sales in the current period were lower primarily due to (i) lower sales volumes in the Asia Segment and (ii) lower sales volumes and lower-priced sales mix due to a higher proportion of Flake and Chip sales in the Americas Segment, although mitigated through responsive price increases and surcharges, partially offset by higher sales in the Brazil Segment due to favorable pricing dynamics and improved sales mix. Overall sales remain depressed, particularly in the Americas and Asia Segments as a result of continued volatility from uncertainty over ongoing geopolitical events, global trade policies, and competition from lower-priced products.

Previous wording

Consolidated weighted average sales prices decreased 3.6%. The decrease in sales prices was primarily attributable to sales mix and lower average selling prices in the Americas and Brazil Segments.

Current wording

Consolidated weighted average sales prices increased 6.3%. The increase in sales prices was primarily attributable to sales mix and higher average selling prices in the Brazil and Asia Segments.

Previous wording

REPREVE® Fiber products for the current period comprised 29%, or $38,249, of consolidated net sales, compared to 31%, or $44,699, for the prior period.

Current wording

REPREVE® Fiber products for the current period comprised 29%, or $36,448, of consolidated net sales, compared to 29%, or $39,272, for the prior period.

Previous wording

Gross profit for the current nine-month period increased to $16,115 from $9,547 in the prior nine-month period. Gross profit increased primarily due to (i) variable cost-saving initiatives and (ii) improved utilization in certain manufacturing areas. This increase was partially offset by (a) lower sales volumes, (b) lower overall conversion margins and (c) production volatility from an inability to forecast demand due to the uncertainty caused by geopolitical events and tariffs impacting the Americas Segment. Gross profit continues to be unfavorably impacted by demand volatility in the Americas Segment and import pricing pressures in the Brazil Segment.

Current wording

Gross profit for the current period increased to $12,481 from $3,387 in the prior period. Gross profit increased primarily due to (i) variable cost-saving initiatives, (ii) higher overall conversion margins, and (iii) improved utilization in certain manufacturing areas. This increase was partially offset by (a) lower sales volumes and (b) production volatility from an inability to forecast demand due to the uncertainty caused by geopolitical events and tariffs impacting the Americas Segment. Gross profit continues to be unfavorably impacted by demand volatility in the Americas Segment and import pricing pressures in the Brazil Segment.

Previous wording

SG&A decreased from the prior nine-month period to the current nine-month period, primarily due to the actions from the Fiscal 2026 Profit Improvement Plan.

Current wording

SG&A decreased from the prior period to the current period, primarily due to the actions from the Fiscal 2026 Profit Improvement Plan.

Previous wording

On February 3, 2025, UNIFI announced the closing of its Madison, North Carolina facility and the transition of those manufacturing operations to other UNIFI production facilities in North and Central America. As a result, UNIFI incurred restructuring costs of $1,320 in the prior period which consisted of (i) equipment relocation and facility closure costs of $1,088 and (ii) employee separation or retention costs of $232.

Current wording

On February 3, 2025, UNIFI announced the closing of its Madison, North Carolina facility and the transition of those manufacturing operations to other UNIFI production facilities in North and Central America. As a result, UNIFI incurred transition costs of $1,068 in the prior period which consisted of (i) equipment relocation and facility closure costs (including asset impairments and disposals) of $1,021 and (ii) employee separation costs of $47. There were no Restructuring costs in the current period.

Previous wording

Other operating (income) expense, net for the current period and the prior period included foreign currency transaction gains of $1,704 and $50, respectively, with no other meaningful activity. In December 2025, Brazil declared dividends against the majority of its retained earnings in connection with certain tax law changes related to future dividends. Foreign currency transaction gains (losses) are recorded to reflect changes in the exchange rate of the Brazilian Real to the U.S. Dollar while the dividend payable is outstanding.

Current wording

Other operating expense, net for the current period and the prior period primarily include foreign currency transaction losses of $337 and $50, respectively, and $265 of transition costs in the current period in connection with the purchase agreement entered into on August 16, 2026 for the sale of two non-strategic real estate assets in Yadkinville, North Carolina. In December 2025, Brazil declared dividends against the majority of its retained earnings in connection with certain tax law changes related to future dividends. Foreign currency transaction gains (losses) are recorded to reflect changes in the exchange rate of the Brazilian Real to the U.S. Dollar while the dividend payable is outstanding.

Previous wording

The decrease in the effective tax rate from the prior period to the current period is primarily attributable to higher foreign earnings in the current period.

Current wording

The decrease in the effective tax rate from the prior period to the current period is primarily attributable to (i) U.S. tax on Net CFC Tested Income (“NCTI”) and (ii) taxes associated with the repatriation of foreign earnings, including withholding taxes. Furthermore, the impact of these items on the effective tax rate was amplified by UNIFI's relatively low level of consolidated pre-tax loss during the current period.

Previous wording

The decrease in net loss was primarily attributable to (i) increased gross profit and (ii) lower SG&A expenses, (iii) lower interest expense, net, and (iv) lower income tax expense, partially offset by a gain on sale of assets in the prior nine-month period.

Current wording

The improvement in net loss was primarily attributable to (i) increased gross profit and (ii) lower SG&A expenses due to overall cost-saving initiatives, including reductions in manufacturing costs from the consolidation of Americas yarn manufacturing operations and the Fiscal 2026 Profit Improvement Plan, together with (iii) lower interest expense, net, and (iv) restructuring costs in the prior period, partially offset by higher income tax expense.

Previous wording

Adjusted EBITDA increased primarily due to (i) higher gross profit and (ii) lower SG&A expenses. Adjusted EPS improved primarily due to (i) higher gross profit, (ii) lower SG&A, (iii) lower interest expense and (iv) income tax expense.

Current wording

Adjusted EBITDA increased primarily due to (i) higher gross profit and (ii) lower SG&A expenses. Adjusted EPS improved primarily due to (i) higher gross profit, (ii) lower SG&A, and (iii) lower interest expense, partially offset by higher income tax expense.

Previous wording

The components of Segment Profit (Loss), each component as a percentage of net sales, and the percentage increase or decrease over the prior period amounts for the Americas Segment, were as follows:

Current wording

The components of Segment Profit, each component as a percentage of net sales, and the percentage increase or decrease over the prior period amounts for the Americas Segment, were as follows:

Previous wording

The increase in Segment Profit for the Americas Segment from the prior nine-month period to the current nine-month period was primarily attributable to overall cost-saving initiatives, including reductions in manufacturing costs from the consolidation of Americas yarn manufacturing operations and the Fiscal 2026 Profit Improvement Plan.

Current wording

The increase in Segment Profit for the Americas Segment from the prior period to the current period was primarily attributable to overall cost-saving initiatives, including reductions in manufacturing costs from the consolidation of Americas yarn manufacturing operations and the Fiscal 2026 Profit Improvement Plan.

Previous wording

The decrease in Segment Profit for the Brazil Segment from the prior nine-month period to the current nine-month period was primarily attributable to (i) lower conversion margins primarily due to sales mix and import pricing pressures and (ii) a decrease in sales volumes discussed above, partially offset by favorable foreign currency translation effects from the strengthening of the BRL versus the USD. We continue to prioritize innovation and differentiation to improve our portfolio and competitive position in Brazil.

Current wording

The increase in Segment Profit for the Brazil Segment from the prior period to the current period was primarily attributable to (i) higher conversion margins primarily due to sales mix despite import pricing pressures and (ii) favorable foreign currency translation effects from the strengthening of the BRL versus the USD, partially offset by a decrease in sales volumes discussed above. We continue to prioritize innovation and differentiation to improve our portfolio and competitive position in Brazil.

Previous wording

The decrease in net sales for the Asia Segment from the prior nine-month period to current nine-month period was primarily attributable to (i) an overall decrease in sales volumes due to competitive pricing pressures and the continued volatility stemming from geopolitical events and tariffs and (ii) a change in sales mix of REPREVE products, partially offset by favorable foreign currency translation effects from the strengthening of the RMB versus the USD.

Current wording

The decrease in net sales for the Asia Segment from the prior period to the current period was primarily attributable to an overall decrease in sales volumes due to competitive pricing pressures and the continued volatility stemming from geopolitical events and tariffs, partially offset by (a) a change in sales mix of REPREVE products and (b) favorable foreign currency translation effects from the strengthening of the RMB versus the USD.

Previous wording

The decrease in Segment Profit for the Asia Segment from the prior nine-month period to the current nine-month period was primarily attributable to a decline in sales volumes as discussed above.

Current wording

The increase in Segment Profit for the Asia Segment from the prior period to the current period was primarily attributable to improved margins due to a change in sales mix of REPREVE products, mainly offset by a decline in sales volumes as discussed above.

Previous wording

On October 25, 2024, UNIFI entered into a new credit agreement with Wells Fargo Bank, National Association for a $25,000 revolving credit facility (the “2024 Facility”). The maturity date of the 2024 Facility is the earlier of (i) October 28, 2027 and (ii) the termination or refinancing of the 2022 Credit Agreement. The 2024 Facility is deemed unsecured financing for UNIFI, but is collateralized by certain assets pledged by related party Kenneth G. Langone, one of the members of UNIFI's Board of Directors. Borrowings under the 2024 Facility bear interest at a rate of SOFR plus 0.90%. The 2024 Facility contains no additional financial covenants beyond those already in effect for the 2022 Credit Agreement and is subject to a monthly unused line fee of 0.25% on available borrowing capacity. In the third quarter of fiscal 2025, UNIFI borrowed $22,000 against the 2024 Facility and used the proceeds to reduce the outstanding ABL Revolver balance. There was no impact to debt principal from these transactions.

Current wording

On October 25, 2024, UNIFI entered into a new credit agreement with Wells Fargo Bank, National Association for a $25,000 revolving credit facility (the “2024 Facility”). The maturity date of the 2024 Facility is the earlier of (i) October 28, 2027 and (ii) the termination or refinancing of the 2022 Credit Agreement. The 2024 Facility is deemed unsecured financing for UNIFI, but is collateralized by certain assets pledged by related party Kenneth G. Langone, one of the members of UNIFI's Board of Directors. Borrowings under the 2024 Facility bear interest at a rate of SOFR plus 0.90%. The 2024 Facility contains no additional financial covenants beyond those already in effect for the 2022 Credit Agreement and is subject to a monthly unused line fee of 0.25% on available borrowing capacity. As of September 27, 2026, $22,000 was outstanding on the 2024 Facility.

Previous wording

UNIFI’s primary capital requirements are for working capital, capital expenditures, and debt service. UNIFI’s primary sources of capital are cash generated from operations and borrowings available under the 2022 Credit Agreement and the 2024 Facility. For the current nine-month period, cash provided by operations was $24,393 and, at March 29, 2026, availability under the ABL Revolver and 2024 Facility was $44,921 and $949, respectively.

Current wording

UNIFI’s primary capital requirements are for working capital, capital expenditures, and debt service. UNIFI’s primary sources of capital are cash generated from operations and borrowings available under the 2022 Credit Agreement and the 2024 Facility. For the current period, cash provided by operations was $3,677 and, at September 27, 2026, availability under the ABL Revolver and 2024 Facility was $42,086 and $525, respectively.

Previous wording

As of March 29, 2026, all of UNIFI’s $94,939 of debt obligations were guaranteed by certain of its domestic operating subsidiaries, while nearly all of UNIFI’s cash and cash equivalents were held by its foreign subsidiaries. Cash and cash equivalents held by foreign subsidiaries may not be presently available to fund UNIFI’s domestic capital requirements, including its domestic debt obligations. UNIFI employs a variety of strategies to ensure that its worldwide cash is available in the locations where it is needed.

Current wording

As of September 27, 2026, all of UNIFI’s $90,900 of debt obligations were guaranteed by certain of its domestic operating subsidiaries, while nearly all of UNIFI’s cash and cash equivalents were held by its foreign subsidiaries. Cash and cash equivalents held by foreign subsidiaries may not be presently available to fund UNIFI’s domestic capital requirements, including its domestic debt obligations. UNIFI employs a variety of strategies to ensure that its worldwide cash is available in the locations where it is needed.

Previous wording

We feel that our current liquidity position, particularly following the two quarters ended December 28, 2025 and March 29, 2026 in which we generated cash from operating activities, is sufficient to fund our operations and expected business growth. Should global demand, economic activity, or input availability decline considerably for an even longer period of time, UNIFI maintains the ability to (i) seek additional credit or financing arrangements and/or (ii) re-implement cost reduction initiatives to preserve cash and secure the longevity of the business and operations. Management continues to (i) explore cost savings opportunities and (ii) prioritize repayment of debt in the current operating environment.

Current wording

We believe that our current liquidity position, particularly following the last three quarters in fiscal 2026 and the first quarter in fiscal 2027 in which we generated cash from operating activities, is sufficient to fund our operations and expected business growth. Should global demand or economic activity weaken further, or input availability become more constrained for an extended period, UNIFI maintains the ability to (i) seek additional credit or financing arrangements and/or (ii) re-implement cost reduction initiatives to preserve cash and secure the longevity of the business and operations. Management continues to (i) explore cost savings opportunities and (ii) prioritize repayment of debt in the current operating environment.

Previous wording

availability under the 2024 Facility was $949 as of March 29, 2026;

Current wording

availability under the 2024 Facility was $525 as of September 27, 2026;

Previous wording

availability exceeding the Trigger Level (as defined in the 2022 Credit Agreement) under the ABL Revolver was $28,421;

Current wording

availability exceeding the Trigger Level (as defined in the 2022 Credit Agreement) under the ABL Revolver was $25,586;

Previous wording

In addition to making payments in accordance with the scheduled maturities of debt required under its existing debt obligations, UNIFI may, from time to time, elect to repay additional amounts borrowed under the ABL Facility. Funds to make such repayments may come from the operating cash flows of the business or other sources and will depend upon UNIFI’s strategy, prevailing market conditions, liquidity requirements, contractual restrictions within the 2022 Credit Agreement, and other factors.

Current wording

In addition to making payments in accordance with the scheduled maturities of debt required under its existing debt obligations, UNIFI may, from time to time, elect to repay additional amounts borrowed under the ABL Facility. Funds to make such repayments may come from the operating cash flows of the business or other sources and will depend upon UNIFI’s strategy, prevailing market conditions, liquidity requirements, contractual restrictions within the 2022 Credit Agreement, and other factors. The net proceeds from the completion of the non-strategic real estate sale on October 28, 2026 were used to repay all of the ABL Term Loan outstanding under the 2022 Credit Agreement.

Previous wording

UNIFI has met its historical liquidity requirements for working capital, capital expenditures, debt service requirements, and other operating needs from its cash flows from operations and available borrowings. UNIFI believes that its existing cash balances, expected cash provided by operating activities, and credit facilities will enable UNIFI to meet its foreseeable liquidity requirements. For its foreign operations, UNIFI expects its existing cash balances, cash provided by operating activities, and available financing arrangements will provide the needed liquidity to fund the associated operating activities and investing activities, such as future capital expenditures. UNIFI believes its operations in Asia and Brazil are in a position to obtain local country financing arrangements due to the operating results of each subsidiary.

Current wording

UNIFI has met its historical liquidity requirements for working capital, capital expenditures, debt service requirements, and other operating needs from its cash flows from operations and available borrowings. UNIFI believes that its existing cash balances, expected cash provided by operating activities, and credit facilities will enable UNIFI to meet its foreseeable liquidity requirements. For its foreign operations, UNIFI expects its existing cash balances, cash provided by operating activities, and available financing arrangements will provide the needed liquidity to fund the associated operating activities and investing activities, such as future capital expenditures. UNIFI believes its operations in Brazil are in a position to obtain local country financing arrangements due to its operating results.

Previous wording

The decrease in Net Debt primarily reflects the generation of operating cash flows during fiscal 2026, aided by reduced levels of working capital and capital expenditures.

Current wording

The decrease in Net Debt primarily reflects the generation of operating cash flows during fiscal 2027, aided by reduced levels of capital expenditures.

Previous wording

Adjusted Working Capital decreased $18,789 from June 29, 2025 to March 29, 2026.

Current wording

Adjusted Working Capital increased $2,095 from June 28, 2026 to September 27, 2026.

Previous wording

The decrease in Adjusted Working Capital was primarily attributable to the decreases in (i) inventories due to lower units on hand, (ii) receivables, net due to lower sales and the timing of cash receipts, and (iii) other current assets primarily due to lower vendor deposits and value-added taxes receivable. These were partially offset by reductions in (a) accounts payable primarily due to lower production activity to match customer demand and variable cost-saving initiatives and (b) other current liabilities due primarily to the payment of incentive compensation earned in fiscal 2025.

Current wording

The increase in Adjusted Working Capital was primarily attributable to the increases in (i) inventories due to higher units on hand and (ii) other current assets primarily due to higher vendor deposits, together with a decrease in other current liabilities due primarily to the payment of incentive compensation earned in fiscal 2026. These were partially offset by reductions in receivables, net due to lower sales and the timing of cash receipts and increases in accounts payable primarily due to higher inventory purchases.

Previous wording

The change in operating cash flows was primarily due to the an improvement in gross profit and reduction of working capital balances during the current nine-month period compared to the prior nine-month period.

Current wording

The change in operating cash flows was primarily due to the improvement in gross profit and, to a lesser extent, changes in working capital balances during the current period compared to the prior period.

Previous wording

For the prior nine-month period, the increases in accounts receivable and inventories were largely driven by the improvement in sales and timing of cash receipts. The increase in accounts payable and other current liabilities was largely due to increased accruals for employee compensation.

Current wording

For the prior period, the increase in accounts receivable was largely driven by the timing of cash receipts. The decrease in accounts payable and other current liabilities was largely due to lower production activity, variable cost savings initiatives, and satisfaction of incentive compensation liabilities. The increase in inventories was not meaningful. Other changes comprise mostly jurisdictional tax liabilities.

Previous wording

Investing activities primarily include $3,872 for capital expenditures. UNIFI expects future capital projects to primarily include routine maintenance requirements related to its existing machinery and equipment.

Current wording

Investing activities primarily include $1,198 for capital expenditures. UNIFI expects future capital projects to primarily include routine maintenance requirements related to its existing machinery and equipment.

Previous wording

Financing activities primarily include principal payments on the ABL Term Loan and finance leases.

Current wording

Financing activities primarily include principal payments on the ABL Term Loan and finance leases and proceeds from the ABL Revolver.