Unifi, Inc. New

day and thank you for standing by welcome to the unifies fourth quarter fiscal 2021 conference call at this time all participants are in a listen only mode after the speaker's 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 please be advised that today's conference is being recorded if you require any further assistance please press star zero. I would now like to hand the conference over to your speaker today, A.J. Egger. Please go ahead.

Thank you, Dawn, and good morning, everyone. On the call today is Al Carey, Executive Chairman, Eddie Engel, Chief Executive Officer, and Craig Creatore, Chief Financial Officer. During this call, management will be referencing a webcast presentation that can be found at unified.com and by clicking the 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 securities 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 the disclosures filed with the SEC on Unified's 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 EPS, adjusted working capital, and net debt may be discussed on this call. I will now turn it over to Al Carey.

Thank you, AJ, and good morning, everyone, and thanks for joining our call this morning. Our performance for Q4 of 2021 was very good. It was a good finish to fiscal 2021 for our team at Unify, and it gives us optimism about our fiscal 2022. Revenues continued the growth momentum that we had at the end of Q3. And when you take a look at Q3 and Q4 combined, we're confident that we have the momentum to give us a strong revenue performance for 2022. And Eddie and Craig will take you through the details on that in a few minutes. EBITDA was strong again in Q4, and we ended the fiscal year of 2021 at almost $65 million, which is quite a bit better than we forecasted for Q4 and for the full year. Interestingly, our debt, cash, inventory levels, and our overall balance sheet is probably as good a shape as any time in recent history. So overall, we feel like we're entering the new fiscal year in a very good position. I'd like to provide you with three important trends that are emerging for our business for 2022. The first one is environmental sustainability will be a driving force in our business. Our reprieve sales were up 30% for the quarter. Now, that's a bit of a funny comparison with the pandemic, but it's up 16% versus 2019 quarter. And product hang tags are up 60%. And we continue to see our customers taking aggressive actions that are going to allow them to achieve their 2025 sustainability goals for apparel. And this bodes very well for Reprieve. The second thing that's an emerging trend is that our regional focus is working. Our three regional businesses, North America, Asia, and Brazil, are quite different. And we have tactics and strategies that are different in each of those. And they're beginning to show promise. North America profitability is very definitely improving. and this is going to continue to be a big priority for us going forward. Asia had an all-time record revenue performance in Q4, and they show signs of full recovery from the pandemic, and we're forecasting a strong growth for Asia in 2022. And then finally, Brazil had an excellent year. They over-delivered Q4, and they also started selling reprieve. And while the sales are minimal at this point, We believe that the consumer in Brazil has an appetite for sustainable apparel, and this could be a very big positive for the future of our Brazil business. Now, the final item I wanted to mention is that we're increasing our capital investment over the next three years so that we can outfit our plants with the first new yarn texturing innovation since the mid-'90s. We've mentioned it before, but the equipment is called EvoCooler, a texturing machine from our supplier Orlikon, which has really great potential. We're going to be able to see significant efficiencies in productivity and energy consumption and operator safety. And Eddie's going to tell you more about it in a few minutes. However, this investment will make us more profitable and give us more plant capacity. And it's going to allow us to be more competitive against import prices in our business. So all in all, a very good quarter. I'm proud of the organization as they've managed through the pandemic. I believe they've shown resiliency and also agility. And I'd say that we're a better organization than we were pre-pandemic. So that gives us some optimism as we enter 2022. So now let me turn the meeting over to Eddie Engel, our CEO, and he'll take you through the highlights of the quarter. Thank you.