Unifi, Inc. New

call, management will be referencing a webcast presentation that can be found in the investor relations section of Unify.com. Please familiarize yourself with page two of the slide deck for cautionary statements and non-GAAP measures. I will now turn the call over to Al Carey. Please go ahead.

Thank you very much. Thanks for joining everyone for our call today on the second quarter of fiscal 2025. I'm going to provide a few of the key headlines regarding our quarter and our second half of fiscal year outlook. And then as usual, Eddie Engel and AJ Ecker will provide the actual performance in more detail and talk about the actions that we're taking at Unify. So let me start by telling you that the Q2 revenues were very similar to the previous few quarters and a little less than we had projected. And this continuation of sluggish sales has been with us and the entire textile industry for some time in both North America and in Asia. But I will tell you that we are finally seeing some green shoots. Beginning in January, I'd say for the last six weeks, we have seen an improvement in our revenue trends and our customers are more optimistic about demand and improved inventories coming out of the holiday season. I think they would describe the holiday season as solid. This should allow us to show up with a stronger half two performance in our overall numbers versus half one, which is what we had talked about a while back. During this quarter, we made a decision, a very important decision, to close one of our three plants in the U.S. However, we will lose no sales. The production will transition to other facilities that we have that have capacity in North America. Now, this move is going to improve our fixed cost utilization, which has been a challenge, and it's also going to improve our profitability for North America. We will then sell the plant and allow us to reduce our debt. Now, we're encouraged with the momentum on two top-line revenue ideas, one we've talked about for quite some time, which is the beyond apparel efforts that we've been after for about a year. those efforts are beginning to pay off as we're starting to enter two new areas for Unify with sales of carpet and a military segment. And both of these sales are being made possible by, I call it our, in quotes, made in America approach. These sales are beginning right now in this month. And another positive is our circularity and our textile take back innovation that we talked about on the last two calls. are now beginning to gain some traction with our customers. We are likely to see some sales in Q4 of this fiscal and more of a thrust in 2026 fiscal. We're going to be very busy over the next five to six months with closing a plant, moving equipment, getting our whole organization focused, and these activities will show up as a stronger performance in half two and then into the next fiscal year. So with that overview, let me now turn it over to Eddie Engel, our CEO, to give you the big details of what's going on in the quarter and in the future. Eddie?

Thanks, Al. And as Al just mentioned, our results for the quarter were slightly below our outlook due to a lower than expected sales that impacted our business in both the Americas and Asia. Despite this short-term setback, we continue to remain optimistic about the remainder of calendar year 2025 and beyond, as we already are beginning to see an increase in customer orders and interest for some of our recently announced Beyond the Power initiatives and reprieve fiber products, which I'm going to touch on in greater detail shortly. Before I go into the details of our results for the quarter, I would first like to discuss our recent efforts to optimize our America's business. As many of you are aware, we announced earlier this week that we have taken steps to consolidate our manufacturing operations with the closing and future sale of our Madison, North Carolina manufacturing facility. The closing of the Madison facility is an important strategic decision that will allow Unified to become stronger and a more efficient company as we exit the current calendar year. By consolidating this facility, we will be able to improve our cost structure and operational performance without any customer disruption or loss of current production capacity. AJ will provide greater details on the financial implications of the sale of the facility later on in the call, but this proactive step will optimize our business and make Unify a leaner and more profitable organization that will ultimately enable us to better serve our customers. This decision to close Madison was a particularly difficult decision for me personally, as it was a place where I gained a lot of valuable experience as a general manager early on in my career. And I'd like to acknowledge the work that the employees put into making this facility a valuable contributor to the profitability of unified business over the years, and I thank them for their contribution. Before I go over the results of the business segments, I'd like to briefly discuss the recent tariff announcements that were put in place last weekend on Canada, Mexico, and China. Given that the situation is still very fluid and that Mexico and Canada have already delayed the tariffs by 30 days and opened a dialogue with the US government, the impact of these tariffs on our business remains uncertain as our customers are still assessing how it may affect their businesses. We'll continue to keep you updated in the coming quarters on the situation as the potential impact of the tariffs becomes more clear. Transitioning now to an overview of the quarter on slide four, during the second quarter of fiscal 2025, we reported $138.9 million in consolidated net sales, which was slightly up compared to the prior year due to an improvement in the Americas business and the consistently robust sales volumes in Brazil. Now to dive a little bit deeper into each of the business segments. In the America segment, we did see a slight increase in net sales during the quarter compared to the previous year due to the increased activity in Central America. However, our financial results were impacted by the two September hurricanes in the southeast US, which dampened some demand and continued inflationary pressures. With that said, we do anticipate that we will see an improvement in our America segment during the second half of the fiscal year as a result of the traction we are seeing for our Beyond the Power initiatives in the carpet market and military applications. In addition, we are continuing to see growth in our business in Central America, which is very encouraging. Even with the normal slowdown from the Christmas holiday, our Brazil segment continues to perform well thanks to the increased demand for textured polyester and favorable pricing dynamics. Brazil has been our best performing segment for the past year now, and we expect that this trend will continue for the remainder of the fiscal year. In our Asia segment, we've continued to experience headwinds due to the unfavorable economic conditions and pricing pressures in China. Given the seasonal impact from the Chinese New Year, we do anticipate that we'll see similar results in our third quarter for the region, but these should improve as we move into the fourth quarter of fiscal 2025. Turning now to slide five for an update on reprieve. During the second quarter, reprieve represented 31% of sales a slight decrease when compared to the previous year. This decrease in reprieve sales was largely driven by the macroeconomic pressures in China. But with that said, we do anticipate that we will begin to see an improvement in our reprieve fiber business during the second half of the year and in fiscal 2026, as our recently announced reprieve take-back filament yarn and thermal loop products begin to gain traction with our customers. Moving now to slide six to highlight some of our recent marketing efforts. We witnessed the versatility of Reprieve through exciting co-branding initiatives this quarter. For example, Malibu Sea, a hair care brand using Reprieve regimen in its eco-blue bottle, received a prestigious 2024 Global Green Beauty Award. Savita Mastress and Teva, which is footwear, also continued to promote their use of Reprieve on product pages, and Costco highlighted Reprieve branding in-store across several brands, including Puma and Kenneth Cole in both the U.S. and Canada. Additionally, during the quarter, we forged key partnerships with Guess Europe, the North Face, and New Balance. Guess Europe featured our marketing and communications director in their Guess Eco video series, showcasing their long-standing commitment to using reprieve. The North Face launched their A68A collection with an event in London emphasizing its end-of-life recyclability through unified textile take-back process. And finally, New Balance partnered with us to recycle unused race shirts, to reprieve recycled polyester, which was used to produce this year's New Year's City's TCS Marathon T-shirts. You could say that was circularity in motion. And on slide seven, as a highlight of our leadership in product innovation, Unifi was recently announced the winner of the 2024 JustStyle Excellence Award for product launches in the area of circularity. Unifi received this award in recognition for the successful launch of Thermaloop, one of our latest innovative reprieve products that provides customers with an insulation material made from textile waste using our proprietary textile take-back process. And before I wrap up, I'd like to provide some additional updates on the Beyond Apparel initiatives for both carpet market and military and protective apparel applications that we discussed during our first quarter call. Both initiatives have been performing well, and we have already begun to see the initial sales revenue from these two programs, and we will see additional revenue benefits from these two initiatives beyond apparel during the second half of this fiscal year. We look forward to providing additional updates on these growing segments of our business over the coming quarters. With that, I'd like to pass the call over to AJ to discuss our financial results for the quarter.