Unifi, Inc. New

Ladies and gentlemen, thank you for standing by and welcome to the Q4 2020 Unify, Inc. Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speaker presentation, there will be a question and answer session. To ask a question during the session, you will need to press star 1 on your telephone keypad. If you require any further assistance, please press star then 0. I would now like to hand the conference over to your speaker today, A.J. Ecker, Vice President of Finance. Thank you. Please go ahead.

Thank you, operator, and good morning, everyone. On the call today is Al Carey, Executive Chairman, Eddie Ingle, Chief Executive Officer, Tom Cottle, President and Chief Operating Officer, and Craig Creatore, Executive Vice President and Chief Financial Officer. During this call, management will be referencing a webcast presentation that can be found at Unify.com and by clicking the fourth quarter conference call link. Management advises you that certain statements included in today's call will be forward-looking statements within the meaning of the Federal Security's laws. Management cautions that these statements are based on current expectations, estimates, and or projections about the markets in which Unify operates. These statements are not guarantees of future performance and involve certain risks that are difficult to predict. Actual outcomes and results may differ materially from what is expressed, forecasted, or implied by these statements. You are directed to disclosures filed with the FCC on unifying forms 10Q and 10K regarding various factors that may impact these results. Also, please be advised that certain non-GAAP financial measures, such as adjusted EBITDA, adjusted net income, adjusted EPS, adjusted working capital, and net debt, may be discussed on this call. Lastly, please be advised that in consideration of COVID-19 safety measures, the speakers today are utilizing multiple telephone lines. Efficiency for this call may be impacted. I will now turn the call over to Al Carey.

Well, good morning, everyone, and thanks for joining us. From my remarks, I'm going to use slide three in the presentation as a bit of a backdrop for my comments. So I'll start by telling you a little bit about the first three quarters of fiscal 2020. We feel we're progressing extremely well prior to the economic shutdowns from COVID-19, which coincided at the beginning of our fourth quarter. and we made very good progress on the four big priorities that we identified last summer. Those were terrific growth in our Asian business which is that asset light model and we began to pick up market share and sales in North America due to the anti-dumping regulations that we spoke about quite a bit and finally began to materialize. Reprieve continued to have momentum from our customers since they were very focused on their ESG goals and we continued our cost reduction measures successfully. So that's the status going into Q4 and at that time was the beginning of the crisis, the pandemic and the parallel and automotive customers either shut down or were significantly curtailed operations at that time. And then we saw a corresponding significant drop off in sales and it negatively impacted our operating income as well. So with all that going on, our team decided let's control what we can control and our management team took on the task of protecting our liquidity and also prioritizing cash generation. And I think they did a very good job with both of those. The sale of our share of the Parkdale joint venture allowed us to pay down a significant part of our debt. We generated cash during a quarter of significantly low demand and we reduced our operating costs and we took down inventory levels. So all of these moves, I believe, are going to set us up for becoming a stronger company once the COVID ends. Now, while sales were hit hard, we have seen sequential improvement every single month since March. April was the low point. May improved from April. June better than May, and July was the best, and even the first two weeks of August have seen another improvement. But it's difficult to accurately forecast how fast things are going to come back as far as the top line goes because of the uncertainties of the pandemic. But we're very confident that we're going to be able to get the top line and profit momentum to return to the momentum that we had through the first three quarters of 2020. The last thing I'll say is I feel very good about the strong team that we've developed at Unify since last summer. Some of you may remember we went through quite a bit of change. In September, we had Craig Creatour joining us, and he's doing an excellent job in a short period of time. And Eddie Ingle has joined us on June 15th as our new CEO. And his return to Unifi has been applauded by all of our people. And it's not like we have a new CEO. He has a 30-year background at Unifi, which is really coming in handy already. And with all this going on, Tom Cottle is retiring. He's on the phone with us today and will be answering some questions. But he's retiring after an exemplary 40-year career at Unify. But we get a chance to hang on to Tom for some time to take advantage of his experience and wisdom for the next year. So I believe we're very well positioned for the future. And I'll turn it over now to our new CEO, Eddie Ingle, to take you through some of the materials.