Unifi, Inc. New

During this 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-gap measures. Today's conference is being recorded and all lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. Our speakers are listed on page three of today's presentation and include Al Carey, Executive Chairman, Eddie Ingle, Chief Executive Officer, A.G. Ecker, Chief Financial Officer. I will now turn the call over to Al Carey. Please turn to page four of the presentation. You may begin.

Thank you. Well, good morning everyone and thanks for joining our call this morning. I'm happy to report that we're beginning to see results in our business that are coming from a major effort that began one year ago, which is essentially resetting our cost base in North America business. The closing of the Madison facility and the reduction of costs across the board have created clear operating improvements that are going to allow us to make healthy profits on a much smaller sales level. Now a couple of highlights and AJ will go into more details on these later on. We're pleased to see improved profit margins, improved free cash flow. We have dramatically improved our inventory turns and it's probably best we've seen in recent history. We have 25% fewer people in North America and our plant efficiencies have come way up from the summertime. now that all the changes are behind us in our Yadkinville facility and also the closing of the Madison facility. AJ will take you through the details of these business results in a moment, but we finally have actions behind us now after a year of hard work and some difficult decisions. So that was a necessary step one for us to build our profitable business back here at Unify. Now step two is building a strong revenue growth. And it's clear from the results of Q1 and Q2, those revenue levels need to improve dramatically. But don't forget, Q1 and Q2 of this fiscal year were largely impacted by the tariff complexity that started in about April. We've seen improvements in orders. from many customers in early January, and we're cautiously optimistic about the recent order trends that we're seeing into February. You may recall back in about April, May timeframe last year, our revenues dropped precipitously, and that's when the tariff, the reciprocal tariffs were placed in order. That created turmoil in apparel and textile supply chains, and most of the customers that we deal with placed large orders before the tariffs went into place, understandably, but it led to record inventory levels and it slowed orders across the board in the industry for the entire balance of the calendar year, which was seven full months. But here's what we're seeing in January, February. First of all, The holiday sales for apparel were what we would describe as solid, plus 4%. I wouldn't say they were great, but they weren't bad, and most of the retails were satisfied with what they saw. Second, recently we have seen customers come back and order to replace their inventories, especially those whose fiscal years ended on 1231. Third, Central America demand has picked up, which is very important for us. It really does look like in the near future that this will be a good nearshoring opportunity for retailers and brands in North America. More on that later. And then finally, our innovations of textile take-back and on Thermaloop are now gaining some traction. It's taken a long time to get there, but we're optimistic about what we're seeing and probably more to come in the summer. So in summary, we expect the sales to improve, and when you combine that with our lower cost base right now, it gives us quite a bit of optimism for what our profitability and our cash flow can be going forward. So to take a deeper look at all this, let me turn it over to Eddie Engel, our CEO.

Thanks, Al. And as Al just noted, our results for the second quarter were in line with our expectations, actually with some of the metrics showing up better than expected. Now, while we are only a few weeks into the third quarter of our fiscal 2026, we are also starting to see some initial signs of an improved operating environment driven by increased customer engagement, and many of them are beginning the post-holiday restocking. Importantly, the strategic initiatives that we have put into place to realign our cost structure and operations have put us in a much stronger position to take advantage of these positive trends as we move forward. I'm going to walk you through this in more detail in a few minutes, but first we're going to change things up a little bit slightly this quarter. I'm going to turn the call over to AJ now to walk us through the numbers for the quarter, and then I'm going to come back in to discuss our near-term strategic priorities and what lies ahead. With that, I'll turn it over to AJ now to review our financial results. AJ?