Unifi, Inc. New

Good morning and thank you for attending Unify's first quarter fiscal 2027 earnings conference call. 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 that 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, and A.J. Ecker, Chief Financial Officer. I will now turn the call over to Al Carey. Please turn to page four of the presentation.

Thank you, and good morning, everyone. Thanks for joining our call today. You may remember About 18 months ago, we determined that we needed to take on a body of work to make Unify a company that could grow profitably in the future. And when we discussed that, we talked about three major thrusts. The first thrust was that we needed to take out significant costs and make our manufacturing footprint more efficient. In addition to that, we reduced costs in almost every area of the company. So that work is now complete. I believe we have the necessary disciplines in place to keep our costs low, and I would say that we're very happy with those results. Now, the second thrust was to reduce our long-term debt, manage capital efficiency, and strengthen our balance sheet. I'm happy to say that yesterday we closed a deal on a non-strategic asset that's going to allow us to check the box on thrust two. Our debt is now lower than any time in recent history. Our balance sheet will be strong, and we have greater financial flexibility. So you're going to hear plenty about that in the next few minutes. The third thrust was to drive revenue with our biggest customers and provide a pipeline of innovative products. Through the last 18 months, I would tell you we've reduced costs on everything except on innovation. We would have hoped these efforts would have created greater revenues by now, but the macroeconomic pressure on raw material prices has slowed down the whole industry's top-line revenue performance. But we are seeing some very recent improvements in Central America revenues, indicating that near-shoring opportunities for brands and retailers may now be starting to strengthen, and we see greater demand shaping up for Q3 and Q4. Once we see these revenues strengthen, we've now entered a new stage for Unifi, which is greater revenue, which flows through to better profits and positive cash generation for the future. I have to tell you the last 18 months is quite a bit of hard work has been completed by our people. Our team has done a great job and I want to thank them right now for all the hard work and the major effort they've put forth. Now I'd like to turn this over to our CEO, Eddie Ingle.

Let's turn to slide four where you can see that our first quarter results continue to demonstrate the benefits of the strategic actions we've taken over the past several quarters to improve the efficiency of our business and to strengthen margins. This was most evident in the $9.1 million or nearly 270% increase in gross profit and the continued improvement in cash generation that we experienced during the quarter. These financial results further highlight the earnings potential of our business and our ability to drive profitable growth, but we do have more to do. We recognize that. During the quarter, we continued to react to the escalating raw material environment caused by the rise in crude oil and implemented the appropriate pricing adjustments to offset much of these cost increases. Additionally, as Al touched on, we recently made a great stride towards improving our balance sheet and with the recently completed sale of two non-strategic real estate assets across our operating base here in Yadkin County, North Carolina. AJ will touch more on the financial details of this sale shortly, but the finalizing of this deal marks a key milestone in our efforts to pay down our debt and improve the financial flexibility of our business. And as I said on the last earnings call, this asset sale does not reduce our production capacity, nor will it impact our ability to service our North American customers. Lastly, while geopolitical and macro uncertainty weighed on our top line this quarter, we saw this turmoil as an opportunity to accelerate some of the innovations we've been working on. We launched a number of innovative products extensions during this period and announced our leadership and participation in a new industry consortium focused on strengthening the regional trade compliance and supply chain integrity in North and Central America. We call that Yarn Proof and you'll be hearing more about the details of that in a few minutes. But now I'm going to turn the call over to AJ to walk you through the financial details of the quarter.