Q4 2024 Unifi Inc Earnings Call

August 22, 2024

Okay.

Speaker Change: Good morning and thank you for attending UNIFI's fourth quarter Fiscal 2020 for Earnings conference call.

Speaker Change: Good morning, and thank you for attending unified fourth quarter fiscal 2024 earnings conference call.

Speaker Change: Today's conference is being recorded and all lines have been placed on mute to prevent, any background noise.

Speaker Change: Today's conference is being recorded and all lines have been placed on mute to prevent any background noise.

Speaker Change: After the speaker's remarks, there will be a question and answer session.

Thank you speakers remarks, there will be a question and answer session.

Speaker Change: Speakers for today's call include Okay Executive Chairman.

Speaker Change: Speakers for today's call include Al Carey, Executive Chairman, Eddie Ingle, Chief Executive, Officer, AJ Eaker, Chief Financial Officer.

Speaker Change: Eddie Ingle Chief Executive Officer.

Speaker Change: A G Edwards Chief Financial Officer.

Speaker Change: And during this call, management will be referencing a webcast presentation that can be found in, the Investor Relations section of unifi.com. Please familiarize yourself with page two of that slide deck for cautionary statements, and non-GAAT measures.

Speaker Change: During this call management will be referencing a webcast presentation that can be found in the investor Relations section of unify dot com.

Speaker Change: Please familiarize yourself with page two of the slide deck for our cautionary statements and non G. A a P measures.

Speaker Change: And now I will turn the call over to Al Carey.

Speaker Change: And now I will turn the call over to Al Carey all the floor is yours. Thank you.

Speaker Change: Al, the floor is yours.

Al Carey: Thank you.

Al Carey: Thank you, Kathleen.

Al Carey: Thank you Kathleen good.

Al Carey: Good morning, everybody.

Al Carey: Good morning, everybody and thank you very much for joining us on the call today I'm going to start with a brief but broad overview of our performance for Q4, a couple of insights that would come out of it for us.

Al Carey: And thank you very much for joining us on the call today.

Al Carey: I'm going to start with a brief but broad overview of our performance for Q4, a couple, of insights that come out for us.

Speaker Change: And then I'm going to turn it over immediately to Eddie and AJ, who will provide you with, the real details of the quarter.

Speaker Change: And then I'm going to turn it over immediately to Eddie and a J, who will provide you with the real details of the quarter.

Eddie Ingle: So the first insight was this broader textile and apparel industry sales are coming back, a lot slower than we expected, but they are improving.

Eddie Ingle: So the first insight was this.

Eddie Ingle: This broader textile and apparel industry sales are coming back a lot slower than we expected, but they are improving.

Speaker Change: And while the inventory to sales ratios at the retail level and for these brands are, now close to the norms and at pre-COVID levels, the customers are still very cautious about building back inventories and they're watching their cash and they're keeping an eye on what, I'd call a sluggish consumer trend.

Speaker Change: And while the inventory to sales ratios at the retail level and for these brands are now close to the norms and and at pre Covid levels.

Speaker Change: The customers are still very cautious about building back inventories and they're watching their cash and they are keeping an eye on are what I'd call a sluggish consumer trends.

But our retail sales for apparel and furnishing for the first half of the year were growing.

Speaker Change: But retail sales for apparel and furnishings for the first half of the year were growing, at about low single digits.

Speaker Change: Growing at about low single digits, and you know if you factor in inflation, they probably flat to slightly down versus a year ago, our sales for the quarter.

Speaker Change: And if you factor in inflation, they're probably flat to slightly down versus a year ago.

Speaker Change: Our sales for the quarter, for this fourth quarter, are better than the previous quarters, of 2024, and they're better than last year's Q4. Our EBITDA was $5.9 million, and it's substantially better than the last three quarters. And better performance is attributed mostly to the quarter two and quarter three cost, reductions that we told you about last time. So most of those cost reductions are now fully in place.

Speaker Change: For the fourth quarter of better than the previous quarters.

Speaker Change: 2024, and they're better than last year's Q4.

Speaker Change: Our EBITDA was $5 $9 million.

Speaker Change: And it is substantially better than the last three quarters and.

Speaker Change: Better performance is attributed mostly to the.

Quarter, two and quarter three cost reductions that we told you about last time. So most of those cost reductions are now fully in place.

Speaker Change: Now the second insight to the quarter was we are seeing improved market share in North, America despite the sluggish sales comeback.

Speaker Change: The second insight to the quarter was we are seeing improved market share in North America. Despite the sluggish sales come back.

Speaker Change: And we're very close to booking sales in the new categories that we've told you about before, which are the beyond apparel categories. Those categories include home, military, automotive, and industrial applications. And these sales will start to offset the low performance of apparel, and also they'll give, us improved mix as the margins on these products are a good bit better than the base apparel sales that we have.

Speaker Change: And we're very close to bookings sales and the new categories that we've told you about before which are they beyond apparel categories.

Speaker Change: And those categories include home military automotive and industrial applications.

Speaker Change: These sales will start to offset the low performance of apparel and also they'll give us.

Operator: Good morning, and thank you for attending Unifi's Fort Quarter fiscal 2024 earnings conference call.

Speaker Change: <unk> mix.

Speaker Change: The margins on these products are a good bit better than the base apparel sales that we have.

Operator: Today's conference is being recorded, and all lines have been placed on mute to prevent any background noise.

Operator: 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.

Speaker Change: And the third insight is that we've been working on innovation all through this period, and, we now have introduced to the marketplace just this week our textile take back introduction, our new revolutionary insulation products, and additional layering of our reprieve platform. And these products have been under development, for several quarters and they're gonna generate sales in calendar 2025.

Speaker Change: And the third inside is that we've been working on innovation all through this period and we now have introduced to the marketplace. Just this week, our textile takeback introduction.

Operator: Today'sconferenceisbeingrecordedandalllineshavebeenplacedonmutetopreventanybackgroundnoise.

AJ Eaker: It'sAJ.

AJ Eaker: It'sA.J.

Operator: After the speaker's remarks, there will be a question and answer session.

Operator: Afterthespeaker'sremarks,therewillbeaquestionandanswersession.

Operator: Speakers for today's call include Albert Carey Executive Chairman, Ed Ingle, Chief Executive Officer, AJ Eker, Chief Financial Officer, and during this call, management will be referencing a webcast presentation that can be found in the investor-relations section of unifi.com.

Operator: Speakers for today's call include Albert Carey Executive Chairman, Eddie Ingle, Chief Executive Officer, AJ Eker, Chief Financial Officer, and during this call, management will be referencing a webcast presentation that can be found in the investor-relations section of unifi.com. Please familiarize yourself with page 2 of that slide back for cautionary statements and non-GAAT measures.

Speaker Change: Our new revolutionary installation products and additional layering of our Repreve platform.

Operator: Speakersfortoday'scallincludeAlCarey,ExecutiveChairman,EddieIngle,ChiefExecutiveOfficer,AJEaker,ChiefFinancialOfficer. Andduringthiscall,managementwillbereferencingawebcastpresentationthatcanbefoundintheInvestorRelationssectionofunifi.com.

Speaker Change: And these products have been under development for several quarters, then theyre going to generate sales in calendar 2025, we won't see any of that in the next couple of months, but they will begin in 2025 and in 2026 and two of these products are very interesting in particular, the the ones that address the customer demand around.

Speaker Change: We won't see any of that in the next couple of months, but they will begin in 2025 and in 2026.

Operator: Please familiarize yourself with page two of that slide back for cautionary statements and non-GAAT measures, and now I will turn to call Albert Carey.

Speaker Change: And two of these products are very interesting, in particular the ones that address the customer demand around circularity and also around reducing carbon footprint.

Operator: Pleasefamiliarizeyourselfwithpagetwoofthatslidedeckforcautionarystatementsandnon-GAATmeasures.

Albert Carey: And now I will turn the call over to Albert Carey. Oh, that's so easy. Thank you. Thank you, Kathleen. Good morning, everybody, and thank you very much for joining us on the call today. I'm going to start with a brief but broad overview of our performance for Q4. See a couple of insights that come out of it for us.

Speaker Change: Circularity and also around reducing carbon footprint.

Albert Carey: AndnowIwillturnthecallovertoAlCarey.

Speaker Change: So if I had to say how we feel about the first half, of 2025, it will show improvement versus prior year, but it'll be a gradual, slower comeback.

So if I had to say, how we feel about the first half of 2025, it will show improvement.

Albert Carey: Al,thefloorisyours.

Operator: The floor is yours.

Albert Carey: Thankyou.

AJ Eaker: Thanksforthequestionsandthanksforjoiningthismorning.

Albert Carey: Thank you, Kathleen.

Albert Carey: Thankyou,Kathleen.

Speaker Change: Versus prior year, but it'll be a gradual slower comeback.

Albert Carey: Goodmorning,everybody.

AJ Eaker: Ingeneral,we'reseeingthatas,ingeneral,doublewhatweseefromourbasebusiness.

Speaker Change: Then the second half should show a more dramatic comeback.

Albert Carey: And then I'm going to turn it over immediately to Eddie and AJ who will provide you with the real details of the quarter. So the first insight was this broader textile and apparel industry sales are coming back a lot slower than we expected, but they are improving. And while the inventory to sales ratios at the retail level and for these brands are now close to the norms and at pre-COVID levels, the customers are still very cautious about building back inventories and they're watching their cash and they're keeping an eye on what I call a sluggish consumer trend.

Speaker Change: And I'd say we're feeling cautiously optimistic, as we look out over the new fiscal year. And we really believe that soon enough, these customers that we have are gonna have to start replenishing their inventories. They're also gonna have to start preparing, for the spring selling season. And I believe those inventories right now are quite low, and they're below pre-COVID levels.

And I'd say, we're feeling cautiously optimistic as we look out over the new fiscal year, and we really believe that soon enough. These customers that we have are going to have to start replenishing their inventories and we're also going to have to start preparing for the spring selling season and I believe those inventories right now are quite low and they are below pre COVID-19 levels.

Albert Carey: Andthankyouverymuchforjoiningusonthecalltoday.

Albert Carey: Good morning, everybody, and thank you very much for joining us on the call today.

Albert Carey: I'mgoingtostartwithabriefbutbroadoverviewofourperformanceforQ4,acoupleofinsightsthatcomeoutforus.

AJ Eaker: Certainlythebasebusinessisconstrained,especiallyintheAmericasrightnowwithfixedcostabsorptionandnotgettingthefullvolumesinthatwe'vebeenchasingforseveralmonthsnow.

AJ Eaker: Sothosemarginsarenaturallysuppressed,butyou'veseenthoseinthepastinthelowdoubledigits,somewherebetween8,12,15percentthatwe'vebeenabletoperforminthebetteryears.

Speaker Change: So we're gonna continue to manage costs very tightly, during this period. We're gonna preserve cash until all this opens back up.

Speaker Change: So we're going to continue to manage costs very tightly during this period, we're going to preserve cash until all of this opens back up and I think when it's all over will be a better company than we were before all this.

Speaker Change: And I think when it's all over, we'll be a better company than we were before all this.

Eddie Ingle: So let me turn it over right now to Eddie Engel, our CEO, and he'll take you through more the important details of the quarter.

Eddie Ingle: So let me turn it over right now to Eddie Ingle, our CEO and he'll take you through more the important details of the quarter Eddie.

Albert Carey: But retail sales for apparel and furnishings for the first half of the year were growing at about low single digits. And if you factor in inflation, they're probably flat to slightly down versus a year ago. Our sales for the quarter for this fourth quarter are better than the previous quarters of 2024 and are better than last year's Q4. Our EBIT was $5.9 million and it's substantially better than the last three quarters and better performances attributed mostly to the quarter two and quarter three cost reductions that we told you about last time. So most of those cost reductions are now fully in place.

Eddie Ingle: Eddie.

Eddie Ingle: Thanks Al.

Eddie Ingle: Thanks, Al.

Eddie Ingle: And as Al just highlighted, we do believe that in most aspects of our business, Unify has finally begun to turn a corner, and the operating environment is beginning to get closer to returning to more normal levels. And over the past year plus, we've been working hard to reposition our business so as to be able to respond quickly to an uptick in customer demand. And that the results of those efforts, have already become apparent in our financials this quarter as we saw solid year-over-year revenue and volume growth and a significant improvement in our margins.

Eddie Ingle: As al just highlighted we do believe that in most aspects of our business Unifi has finally begun to turn a corner and the operating environment.

Eddie Ingle: Beginning to get closer to returning to more normal levels.

Albert Carey: I'm going to start with a brief but broad overview of our performance for Q4C, a couple of insights that come out for us, and then I'm going to turn it over immediately to Eddie and AJ, who will provide you with the real details of the quarter.

Speaker Change: And over the past year, plus we've been working hard to reposition our business so to be able to respond quickly to.

Eddie Ingle: An uptick in customer demand.

Speaker Change: The results of those efforts have already become apparent in our financials. This quarter as we saw solid year over year revenue and volume growth and a significant improvement in our margins.

Speaker Change: And we are also continuing to see strong momentum, across our segments.

Speaker Change: We are also continuing to see strong momentum across our segments and we recently announced some exciting new product innovations, which I will touch on in greater detail shortly.

Speaker Change: And we recently announced, some exciting new product innovations, which I will touch on in greater detail shortly.

Albert Carey: So the first insight was this broader textile and apparel industry sales are coming back a lot slower than we expected, but they are improving.

Albert Carey: Now the second insight to the quarter was we are seeing improved market share in North America despite the sluggish sales come back. And we're very close to booking sales in the new categories that we've told you about before which are the beyond apparel categories. And those categories include home, military, automotives, and industrial applications. And these sales will offset the low performance of apparel and also they'll give us the improved mix as the margins on these products are a good bit better than the base apparel sales that we have.

Speaker Change: Turning now to slide four for an overview of the quarter during.

Speaker Change: Turning now to slide four for an overview of the quarter.

Speaker Change: During the fourth quarter of fiscal 2024, we reported $157.5 million in consolidated net sales, which was up 4% year-over-year and 6% sequentially compared to the third quarter. This improvement in net sales was largely driven, by our Brazil segment, which has been performing very well recently.

Speaker Change: During the fourth quarter of fiscal 2024, we reported $157 $5 million and consolidated net sales, which was up 4% year over year, and 6% sequentially compared to the third quarter.

Speaker Change: In addition, our operations in China, have also been continuing to build momentum and contributed to our strong performance during the quarter.

Speaker Change: This improvement in net sales was largely driven by our Brazil segment, which has been performing very well recently.

Speaker Change: Additionally, our operations in China have also been continuing to build momentum and contributed to our strong performance during the quarter.

Speaker Change: We are continuing to see the benefits of our Americas cost reset efforts.

Speaker Change: We are continuing to see the benefits, of America's cost reset efforts, which is evident by the significant improvement in our gross margin and subdued operating expenses. We expect to see these efforts continue, through the next few quarters as well. Although it's worth noting, that some of these savings will be slightly offset by inflation.

Speaker Change: Which is evidenced by the significant improvement in our gross margin and subdued operating expenses.

Albert Carey: And the third insight is that we've been working on innovation all through this period. And we now have introduced to the marketplace just this week our textile take back introduction, our new revolutionary insulation products, and additional layering of our reprieve platform, and these products have been underdeveloped for several quarters and they're going to generate sales in calendar 2025. We won't see any of that in the next couple of months, but they will begin in 2025 and in 2026. And two of these products are very interesting, in particular the ones that address the customer demand around circularity and also around reducing carbon footprint.

AJ Eaker: Sowiththesenewproducts,astheyhavesomeinnovationunderlyingthoseandwe'reabletoreallykeyinonwhatcustomersneedwiththenewproducts,we'reabletoseedoublethemarginthereinmanycases.

Speaker Change: Expect to see these efforts continue through the next few quarters as well.

Speaker Change: Although it's worth noting that some of these savings will be slightly offset by inflation.

Speaker Change: With that said, we still believe, we have driven sustainable efficiencies and cost discipline over the last year that our organization will continue to leverage into the future. Our sales transformation has also been progressing well, and we have continued to see the benefits of our transformation efforts with gross profit during the quarter, experiencing a $6 million improvement on a sequential basis.

Speaker Change: With that said, we still believe we have driven sustainable efficiencies and cost discipline over the last year.

Speaker Change: That our organization will continue to leverage into the future.

Anthony Lebiedzinski: Allright.

Speaker Change: Our sales transformation has also been progressing well and we have continued to see the benefits of our transformation efforts with gross profit during the quarter experiencing a $6 million improvement on a sequential basis.

Speaker Change: This gives us confidence that our operating profits, can continue to improve during fiscal 2025.

Speaker Change: This gives us confidence that our operating profit can continue to improve during fiscal 2025.

Speaker Change: I'll now provide a brief update on each of our business segments. In the Americas segments, while we are continuing to take market share, we did experience a bit of a slowdown due to some competitive shuffling and some customers pushing out orders for a few months.

Speaker Change: I'll now provide a brief update on each of our business segments.

Albert Carey: So if I had to say how we feel about the first half of 2025, it will show improvement versus prior year, but it'll be a gradual, slower comeback than the second half should show a more dramatic comeback. And I'd say we're feeling cautiously optimistic as we look out over the new fiscal year and we really believe that soon enough these customers that we have are going to have to start replenishing their inventories, and we're also going to have to start preparing for the spring selling season.

Speaker Change: In the Americas segments, while we are continuing to take market share we did experience a bit of a slowdown due to some competitive shuffling in some customers pushing out orders for a few months.

Albert Carey: And while the inventory to sales ratios at the retail level and for these brands are now close to the norms and at pre-COVID levels, the customers are still very cautious about building back inventories and they're watching their cash and they're keeping an eye on what I call a sluggish consumer trend.

Speaker Change: But we remain well positioned to take advantage of further improvement in the region, as our continued efforts on beyond apparel initiatives are helping to offset the weakness in apparel programs.

Speaker Change: But we remain well positioned to take advantage of further improvement in the region as our continued efforts on beyond apparel initiatives are helping to offset the weakness in our power programs.

Anthony Lebiedzinski: Allright,well,that'sgreattohear,andIlookforwardtoseeingtheprogressthatyouguyswillbemakingthisyear.

Anthony Lebiedzinski: Sothankyouverymuchandbestofluck.

Speaker Change: Our Brazil segment, as mentioned earlier, was our strongest performing segment during the fourth quarter. The strong performance was driven by our ability to take price in the region, operate at full utilization, and we have continued to benefit from the capture of additional market share following our main competitor who exited the region.

Anthony Lebiedzinski: Thankyou.

Our Brazil segment as mentioned earlier was our strongest performing segment during the fourth quarter.

Albert Carey: And I believe those inventories right now are quite low and they're below pre-COVID levels. So we're going to continue to manage costs very tightly during this period. We're going to preserve cash until all this opens back up. And I think when it's all over, we'll be a better company than we were before all this.

Operator: Excellent.

Speaker Change: The strong performance was driven by our ability to take price in the region operate at full utilization and we have continued to benefit from the capture of additional market share following our main competitor who exited the region.

Operator: Thankyou,Anthony.

Operator: Again,ifyouwouldliketoaskaquestion,pleasepressstar1tojointhequeue.

Eddie Engel: So let me turn it over right now to Eddie Engel, our CEO, and he'll take you through more important details of the corner, Eddie. Thanks, Al. And as Al just highlighted, we do believe that in most aspects of our business, Unify has finally begun to turn a corner and the operating environment is beginning to get closer to returning to more normal levels.

Speaker Change: In our Asia segment, we are continuing to see signs of recovery, and we believe that we'll see stronger performance in the region during fiscal 2025 despite a seasonally slower first quarter.

Speaker Change: In our Asia segment were continuing to see signs of recovery and we believe that we will see stronger performance in the region during fiscal 2025, despite seasonally slower first quarter.

Albert Carey: AndthenI'mgoingtoturnitoverimmediatelytoEddieandAJ,whowillprovideyouwiththerealdetailsofthequarter.

Operator: AndthatconcludesourQ&Asessionandtoday'scall.

Operator: Thankyou,everyone,forjoining.

Operator: Youmaynowdisconnect.

Albert Carey: Sothefirstinsightwasthisbroadertextileandapparelindustrysalesarecomingbackalotslowerthanweexpected,buttheyareimproving.

Anthony Lebiedzinski: Well,that'sgreattohear,andIlookforwardtoseeingtheprogressthatyouguyswillbemakingthisyear.

Speaker Change: Turning now to slide five for an update on reprieve.

Speaker Change: Turning now to slide five for an update on Repreve during.

Speaker Change: During the fourth quarter, reprieve represented 34% of sales, a meaningful increase when compared to the previous quarter. This improvement in sales was largely driven by the positive recovery trends, that have been seen in Central America as well as a moderate recovery in Asia.

Speaker Change: During the fourth quarter were pretty even represented 34% of sales and.

Albert Carey: But retail sales for apparel and furnishings for the first half of the year were growing at about low single digits, and if you factor in inflation, they probably flat the slightly down versus a year ago.

Eddie Engel: And over the past year plus, we've been working hard to reposition our business so it's be able to respond quickly to an uptickling customer demand and that the results of those efforts have already become apparent in our financial disquarter as we saw a solid year-over-year revenue and volume growth and a significant improvement in our margins. And we are also continuing to see strong momentum across our segments, and we recently announced some exciting new product innovations which I will touch on in greater details shortly.

Speaker Change: A meaningful increase when compared to the previous quarter. This improvement in sales was largely driven by the positive recovery trends that have been seen in Central America as well as a moderate recovery in Asia.

Albert Carey: Andwhiletheinventorytosalesratiosattheretaillevelandforthesebrandsarenowclosetothenormsandatpre-COVIDlevels,thecustomersarestillverycautiousaboutbuildingbackinventoriesandthey'rewatchingtheircashandthey'rekeepinganeyeonwhatI'dcallasluggishconsumertrend.

Anthony Lebiedzinski: Sothankyouverymuchandbestofluck.

Speaker Change: Looking ahead, we continue to believe that we will see additional improvements, in our reprieve fiber business as we progress through fiscal 2025. This part of our business will be aided by the revenues we expect to see, in calendar 2025 as we begin to see commercial activity due mainly to our recent innovation efforts from some new reprieve product launches.

Albert Carey: Butretailsalesforapparelandfurnishingsforthefirsthalfoftheyearweregrowingataboutlowsingledigits.

Anthony Lebiedzinski: Thankyou.

Speaker Change: Looking ahead.

Speaker Change: We continue to believe that we will see additional improvements in our repreve fiber business as we progress through fiscal 2025.

Speaker Change: This part of our business will be aided by the revenues, we expect to see in calendar 2025, as we begin to see commercial activity due mainly.

Operator: Excellent.

Operator: Thankyou,Anthony.

Speaker Change: Two our recent innovation efforts from some new product launches.

Eddie Engel: Turning now to slide four for an overview of the quarter. During the fourth quarter of fiscal 2024, we reported $157.5 million in consolidated net sales, which was up 4% year-over-year and 6% sequentially compared to the third quarter. This improvement in net sales was largely driven by our Brazil segment, which has been performing very well recently. In addition, our operations in China have also been continuing to build momentum and contributed to our strong performance during the quarter.

Operator: Again,ifyouwouldliketoaskaquestion,pleasepressstar1tojointhequeue.

Speaker Change: On the marketing front for reprieve, we also achieved several exciting co-branding places this quarter, notably with Dolce Vita Footwear, part of the Steve Madden Group, incorporated reprieve into its products.

Speaker Change: On the marketing front for Repreve. We also achieved several exciting co branding patients this quarter, notably with Dolce Vita footwear part of the Steve Madden group incorporated proven to its products.

Albert Carey: Our sales for the quarter for this fourth quarter are better than the previous quarters of 2024 and are better than last year's Q4.

Operator: AndthatconcludesourQ&Asessionandtoday'scall.

Speaker Change: Kate Spade featured reprieve in a pajama line for Costco Canada, and Teva launched an iconic version of their original universal sandal in a reloop version which contained reprieve powered by our own textile take-back program.

Speaker Change: Kate Spade features were pretty even if the Jamba line for Costco, Canada, and Teva launch and iconic version of their original Universal Sandal and our really version, which contained repreve powered by our own textile Takeback program.

Operator: Thankyou,everyone,forjoining.

Operator: Youmaynowdisconnect.

Speaker Change: Now, as many of you are aware, if you've been listening to our calls of the last few quarters, our textile take-back program aims to increase circularity in the production of textiles by transforming fabric waste into a recycled resin that in turn is converted into a reprieve fiber. Through this process, we are not only leading the transition for a more circular supply chain, but we are also helping our customers, such as the ones I mentioned earlier, meet their sustainability goals.

Albert Carey: Our EBIT was $5.9 million and it's substantially better than the last three quarters and better performances attributed mostly to the quarter two and quarter three cost reductions that we told you about last time. So most of those cost reductions are now fully in place.

Eddie Engel: We are continuing to see the benefits of our America's cost-reset efforts, which is evident by the significant improvement in our gross margin and subdued operating expenses. We expect to see these efforts continue through the next few quarters as well, although it's worth noting that some of these savings will be slightly offset by inflation. With that said, we still believe we had driven sustainable efficiencies and cost-discipline over the last year that our organization will continue to leverage into the future. Our sales transformation has also been progressing well and we have continued to see the benefits of our transformation efforts with gross profit during the quarter experiencing a $6 million improvement on a sequential basis.

Speaker Change: Now as many of you are aware.

Operator: AndrewEaker,CraigCreaturo,AnthonyLebiedzinski,EdmundIngle,AndrewEaker,UnifiIncUntertitelderAmara.org-CommunityMusicMusicMusicMusicMusicMusicMusicMusicMusicMusicMusicMusicMusicMusicMusicMusicMusicMusicMusicMusicAfterthespeaker'sremarks,therewillbeaquestionandanswersession.

Speaker Change: If you've been listening to our calls over the last few quarters, our textile Takeback program aims to increase circularity in the production of textiles by transforming fabric waste into our recycled resin that.

Speaker Change: That in turn is converted into a pre fiber.

Albert Carey: Andifyoufactorininflation,they'reprobablyflattoslightlydownversusayearago.

Operator: Pleasefamiliarizeyourselfwithpage2ofthatslidedeckforcautionarystatementsandnon-GAAPmeasures.

Speaker Change: Through this process, we're not only leading the transition for a more circular supply chain, but we're also helping our customers such as the ones I mentioned earlier meet their sustainability goals.

Eddie Engel: This gives us confidence that our operating profit can continue to improve during fiscal 2025.

Albert Carey: AndnowIwillturnthecallovertoAlCarey.

Speaker Change: Now, staying on the topic of textile take-back, I would like to spend some time reviewing some of the new innovative reprieve products that we just announced earlier this week that are harnessing our textile take-back program and already have the ability to be offered at scale.

Speaker Change: Now staying on the topic of textile takeback I'd like to spend some time on.

Albert Carey: Oursalesforthequarter,forthisfourthquarter,arebetterthanthepreviousquartersof2024,andthey'rebetterthanlastyear'sQ4. OurEBITDAwas$5.9million,andit'ssubstantiallybetterthanthelastthreequarters. Andbetterperformanceisattributedmostlytothequartertwoandquarterthreecostreductionsthatwetoldyouaboutlasttime. Somostofthosecostreductionsarenowfullyinplace.

Albert Carey: Al,thefloorisyours.

Reviewing some of the new innovative or pre products that we just announced earlier. This week that are harnessing our textile takeback program and are really already have the ability to be offered at scale.

Albert Carey: Thankyou.

Speaker Change: First, on slide six, you'll see some highlights of our new white reprieve filament yarn, powered by our textile take-back process that we will be showcasing at the Intertextile Shanghai Apparel Fabrics Convention next week. The new form of reprieve filament yarn is made of 50% textile take-back waste, and 50% recycled bottles, which is the world's first 50% textile waste filament yarn with a tracer and uTrust verification.

Speaker Change: First on slide six you'll see some highlights of our new white Repreve filament yarn powered by our textile takeback process that we will be showcasing at the inter textiles, Shanghai apparel fabrics Convention next week.

Albert Carey: Thankyou,Kathleen.

Albert Carey: Now the second insight to the quarter was we are seeing improved market share in North America despite the sluggish sales come back.

Albert Carey: NowthesecondinsighttothequarterwasweareseeingimprovedmarketshareinNorthAmericadespitethesluggishsalescomeback.

Albert Carey: Goodmorning,everybody,andthankyouverymuchforjoiningusonthecalltoday.

Speaker Change: The new form of a pre filament yarn is made of 50% textile takeback waste and 50% recycled bottles, which is the world's first 50% textile waste filament yarn, where the tracer and you Trust verification.

Eddie Engel: But we remain well positioned to take advantage of further improvement in the region as our continued efforts on beyond the power initiatives are helping to offset the weakness in the power of programs. Our Brazil segments, as mentioned earlier, was our strongest performing segment during the fourth quarter. The strong performance was driven by our ability to take price in the region, operate at full utilization and we have continued to benefit from the capture of additional market share following our main competitor who access the region.

Albert Carey: Andwe'reveryclosetobookingsalesinthenewcategoriesthatwe'vetoldyouaboutbefore,whicharethebeyondapparelcategories. Thosecategoriesincludehome,military,automotive,andindustrialapplications. Andthesesaleswillstarttooffsetthelowperformanceofapparel,andalsothey'llgiveusimprovedmixasthemarginsontheseproductsareagoodbitbetterthanthebaseapparelsalesthatwehave.

Albert Carey: I'mgoingtostartwithabriefbutbroadoverviewofourperformanceforQ4,seeacoupleofinsightsthatcomeoutforus,andthenI'mgoingtoturnitoverimmediatelytoEddieandAJ,whowillprovideyouwiththerealdetailsofthequarter. Sothefirstinsightwasthisbroadertextileandapparelindustrysalesarecomingbackalotslowerthanweexpected,buttheyareimproving. Andwhiletheinventory-to-salesratiosattheretaillevelandforthesebrandsarenowclosetothenormsandatpre-COVIDlevels,thecustomersarestillverycautiousaboutbuildingbackinventoriesandthey'rewatchingtheircashandthey'rekeepinganeyeonwhatI'dcallasluggishconsumertrend.

Speaker Change: The new offering is white, dyeable, and available at scale now.

Speaker Change: The new offering is white diebold and available at scale now.

Speaker Change: On slide 7, for our second new product announcement, you can see that we've launched a totally, new product offering but still based on polyester fiber called Thermaloop, which is an insulation solution that is designed for home goods, outdoor gear applications, things like sleeping bags and apparel such as winter jackets.

Speaker Change: On slide seven for our second new product announcements you can see that we've launched a totally new product offering, but still based on polyester fiber coal thermal loop.

Albert Carey: Butretailsalesforapparelandfurnishingsforthefirsthalfoftheyearweregrowingataboutlowsingledigits.

Speaker Change: Which is an installation solution that is designed for home goods.

Speaker Change: Drug ear applications things like our sleeping bags and apparel such as winter jackets.

Eddie Engel: In our Asia segment, we are continuing to see signs of recovery and we believe that we will see stronger performance in the region during fiscal 2025, despite a seasonally slower first quarter.

Albert Carey: And,youknow,ifyoufactorininflation,theyprobablyflappeditslightlydownversusayearago.

Speaker Change: What makes Thermaloop so unique is that 50% of the fibers used to make it are from textile, waste and we are launching this new product offering in black.

Speaker Change: What makes thermally so unique is that 50% of the fibers used to make it or from textile waste and we are launching this new product offering in black.

Eddie Engel: Turning now to slide five for an update on reprieve. During the fourth quarter, we are pre-ever represented 34% of sales, a meaningful increase when compared to the previous quarter. This improvement in sales was largely driven by the positive recovery trends that have been seen in Central America as well as in modern recovery in Asia. Looking ahead, we continue to believe that we will see additional improvements in our reprieve fiber business as we progress through fiscal 2025.

Speaker Change: The Thermaloop products were launched as 100% recycled content. What is even more exciting is that the Thermaloop padding product is the first of its kind to, have a reprieve recycled polyester low melt fiber, which allows our customers to provide a wider range of sustainable offerings.

Speaker Change: Thermal new products were launched at 100% recycled content.

Albert Carey: Oursalesforthequarter,forthisfourthquarter,arebetterthanthepreviousquartersof2024,andthey'rebetterthanlastyear'sQ4. OurEBITDAwas$5.9million,andit'ssubstantiallybetterthanthelastthreequarters. Andbetterperformanceisattributedmostlytothesequartertwoandquarterthreecostreductionsthatwetoldyouaboutlasttime. Somostofthosecostreductionsarenowfullyinplace.

Speaker Change: What is even more exciting is that the thermally padding product is the first of its kind to have our repreve recycled polyester low milk fiber, which allows our customers to provide a wider range of sustainable offerings.

Albert Carey: Now,thesecondinsighttothequarterwasweareseeingimprovedmarketshareinNorthAmericadespitethesluggishsalescomeback.

Speaker Change: Both thermal loop and our new form of pre filament yarn will be samples by our customers throughout fiscal 2025.

Speaker Change: Both Thermaloop and our new form of reprieve filament yarn will be sampled by our customers, throughout fiscal 2025.

Speaker Change: We believe we will begin to see some revenues and volume benefits from our new filament, yarn in the second half of fiscal 2025.

Speaker Change: We believe we will begin to see some revenues and volume benefits from our new filament yarn in the second half of fiscal 2025, and we will begin to see the growth benefits from December loop throughout fiscal 2026 supporting additional growth moving forward.

Eddie Engel: This part of our business will be aided by the revenues we expect to see in calendar 2025 as we begin to see commercial activity due mainly to our recent innovation efforts from some new reprieve product launches. On the marketing front pro reprieve, we also achieved several exciting co-branting faces this quarter, notably with Dolcevita footwear, part of the Steve Matting Group, incorporated preven to its products. Plate spade featured reprieve in a pajama line for Costco Canada and Teva launched an iconic version of their original universal sample in a re-loop version which contained reprieve powered by our own textile take-back program.

Speaker Change: And we'll begin to see the growth benefits from the Thermaloop throughout fiscal 2026, supporting additional growth moving forward.

Speaker Change: Before I wrap up I would also like to note that our beyond apparel innovations are continuing to grow and with conversations progressing with a number of customers in key end markets.

Speaker Change: Before I wrap up, I would also like to note that our beyond apparel innovations are continuing, to grow and with conversations progressing with a number of customers in key end markets and we are hopeful that we'll be able to further discuss these in the near future.

J: And we are hopeful that we'll be able to further discuss these in the new in the near future with that I will now like to pass the call over to a J to discuss our financial results for the quarter.

J: With that, I will now like to pass the call over to AJ to discuss our financial results, for the quarter.

J: Thank you, Eddie.

J: Thank you Eddie as both Al and Eddie noted, we've continued to make great strides towards improving our business and we are well positioned to pivot to growth and stronger profitability as we move forward. Our focus has remained on keeping our variable expenses across both production and administrative functions low and we've already begun to see a sustainable reduction in those expenses.

J: As both Al and Eddie noted, we've continued to make great strides towards improving our, business and we are well positioned to pivot to growth and stronger profitability as we move forward. Our focus has remained on keeping our variable expenses across both production and administrative, functions low and we've already begun to see a sustainable reduction in those expenses. As we've previously noted, we plan to reinvest these cost savings and increase profits in, the key areas of our business that will drive innovation and margin expansion, such as the two new reprieve fiber products that Eddie just discussed.

Eddie Engel: As many of you are aware, if you've been listening to our calls of the last few quarters, our textile take-back program aims to increase circularity in the production of textiles by transforming fabric waste into a recycled resin that in turn is converted into reprieve fiber. Through this process, we are not only leading the transition for a more circular supply chain, but we are also helping our customers, such as the ones I mentioned earlier, meet their sustainability goals.

Speaker Change: As we've previously noted we plan to reinvest these cost savings and increased profits in the key areas of our business that will drive innovation and margin expansion such as the two new repreve fiber products that Eddie just discuss.

Speaker Change: Moving now to our financial results, on slide 8, you'll see our consolidated financial highlights, for the quarter.

Speaker Change: Turning now to our financial results on slide eight you'll see our consolidated financial highlights for the quarter consolidated net sales for the quarter were $157 5 million.

Eddie Engel: Now, staying on the topic of textile take-back, I would like to spend some time rearing some of the new innovative reprieve products that we just announced earlier this week that our harnessing our textile take-back program and already have the ability to be offered at scale.

Albert Carey: Andthethirdinsightisthatwe'vebeenworkingoninnovationallthroughthisperiod,andwenowhaveintroducedtothemarketplacejustthisweekourtextiletakebackintroduction,ournewrevolutionaryinsulationproducts,andadditionallayeringofourreprieveplatform. Andtheseproductshavebeenunderdevelopmentforseveralquartersandthey'regonnageneratesalesincalendar2025.

Speaker Change: Consolidated net sales for the quarter were $157.5 million, up 6% sequentially versus, the third quarter or 4% year over year, driven by our beneficial pricing actions, continued market share gains and some demand normalization in conjunction with improvements from our profitability improvement plan continuing to materialize. This greater performance also led to our gross profit seeing an improvement of more, than 100% sequentially, marking our third consecutive quarter of gross profit improvement.

Speaker Change: Up 6% sequentially versus the third quarter or 4% year over year driven.

Speaker Change: Driven by our beneficial pricing actions continued market share gains and some demand normalization in conjunction with improvements from our profitability improvement plan continuing to materialize disc.

Eddie Engel: First, on slide six, you'll see some highlights of our new white reprieve filament yarn powered by our textile take-back process that we will be showcasing at the Inter-Textile Shanghai Apparel Fabrics Convention next week.

Albert Carey: Wewon'tseeanyofthatinthenextcoupleofmonths,buttheywillbeginin2025andin2026.

Speaker Change: This greater performance also led to our gross profit seeing an improvement of more than 100% sequentially, marking our third consecutive quarter of gross profit improvement.

Eddie Engel: The new form of reprieve filament yarn is made of 50% textile take-back waste and 50% recycled bottles which are the world's first 50% textile waste filament yarn with the The new offering is white, diabol and available at scale now.

Albert Carey: Andtwooftheseproductsareveryinteresting,inparticulartheonesthataddressthecustomerdemandaroundcircularityandalsoaroundreducingcarbonfootprint.

Speaker Change: Turning to slide 9, in the America segment, net sales were sequentially flat and down, 4% year over year, which as Eddie noted, was primarily driven by a slowdown in spending and customers pushing out a few orders.

Speaker Change: Turning to slide nine.

In the Americas segment, net sales were sequentially flat and down 4% year over year, which as Eddie noted was primarily driven by a slowdown in spending and customers pushing out a few orders. However, with that said the Americas segment did experience a significant gross profit improvement, which was driven by improved productivity in the <unk>.

Eddie Engel: On slide 7, for our second new product announcement, you can see that we've launched a totally new product offering but still based on polyester fiber called Thermaloop, which is an installation solution that is designed for home goods, outdoor gear applications, things like sleeping bags, and apparel such as winter jackets. What makes Thermaloop so unique is that 50% of the fiber is used to make it off from textile waste and we are launching this new product offering in black. The Thermaloop products were launched as a 100% recycled content.

Speaker Change: However, with that said, the America segment did experience a significant gross profit, improvement, which was driven by improved productivity in the region following holiday impacts in the third quarter of fiscal 24.

Speaker Change: Jim following holiday impacts in the third quarter of fiscal 'twenty four.

Speaker Change: Slide 10 displays our Brazil segment highlights, which experienced net sales growth of 9% during, the quarter on a sequential basis and almost 19% year-over-year. Our Brazil segment has continued to benefit from our ability to take price in the region, operate at full utilization, and the capture of additional market share.

Speaker Change: Slide 10 displays our Brazil segment highlights, which experienced net sales growth of 9% during the quarter on a sequential basis and almost 19% year over year. Our Brazil segment has continued to benefit from our ability to take price in the region operate at full utilization and the capture of additional market share.

Eddie Engel: What is even more exciting is that the Thermaloop padding product is the first of its kind to have a reprieve recycled polyester low melt fiber which allows our customers to provide a wider range of sustainable offerings. Both Thermaloop and our new form of reprieve filament yarn will be sampled by our customers throughout fiscal 2025. We believe we will begin to see some revenues and volume benefits from our new filament yarn in the second half of fiscal 2025. And we will begin to see the growth benefits from the Thermaloop throughout fiscal 2026 supporting additional growth moving forward.

Speaker Change: Sure.

Speaker Change: On slide 11, the Asia segment saw net sales growth of 21% sequentially and over 17% year-over-year, driven by higher sales volumes in the period and improved market conditions.

Speaker Change: On Slide 11, the Asia segment saw net sales growth of 21% sequentially and over 17% year over year, driven by higher sales volumes in the period and improved market conditions as Asia continues to recover we remain well positioned in the region and our portfolio expansion will help drive improve.

Speaker Change: As Asia continues to recover, we remain well-positioned in the region, and our portfolio expansion, will help drive improved performance for the segment in the future.

Speaker Change: Performance for the segment in the future.

Speaker Change: Before passing the call back to Eddie for some closing commentary I'll now briefly discuss our balance sheet on slide 12.

Speaker Change: Before passing the call back to Eddie for some closing commentary, I'll now briefly, discuss our balance sheet on slide 12.

Eddie Ingle: During the quarter, we continue to focus on working capital management and cost controls, allowing for a better free cash flow situation in the quarter and year-to-date periods, and positioning us to remain focused on debt repayment.

Eddie Ingle: During the quarter, we continued to focus on working capital management and cost controls, allowing for a better free cash flow situation in the quarter and year to date periods.

Eddie Engel: Before I wrap up, I would also like to note that our Beyond Apparel innovations are continuing to grow and with conversations progressing with a number of customers in key end markets. And we are hopeful that we'll be able to further discuss these in the near future.

Albert Carey: And we're very close to booking sales in the new categories that we've told you about before which are the beyond apparel categories.

Albert Carey: Andwe'reveryclosetobookingsalesinthenewcategoriesthatwe'vetoldyouaboutbefore,whicharethebeyondapparelcategories. Andthosecategoriesincludehome,military,automotive,andindustrialapplications. Thesesaleswillstarttooffsetthelowperformanceofapparel,andalsothey'llgiveusanimprovedmixasthemarginsontheseproductsareagoodbitbetterthanthebaseapparelsalesthatwehave.

Eddie Ingle: And positioning us to remain focused on debt repayment.

Eddie Ingle: CapEx spend continues to be focused on maintenance levels and remains significantly lower than, the prior two fiscal years, with fiscal 2024 coming in at $11 million, a multi-year low attributed to the diligence of our various teams and operations.

Eddie Ingle: Capex spend continues to be focused on maintenance levels and remained significantly lower than the prior two fiscal years with fiscal 2024 coming in at $11 million, a multiyear low attributed to the diligence of our various teams and operations.

Albert Carey: And those categories include home, military, automotives and industrial applications.

AJ Eaker: With that, I will now like to pass the call over to AJ to discuss our financial results for the quarter. Thank you, Eddie. As both Al and Eddie noted, we've continued to make great strides towards improving our business and we are well positioned to pivot to growth and stronger profitability as we move forward.

Albert Carey: Andthethirdinsightisthatwe'vebeenworkingoninnovationallthroughthisperiod,andwenowhaveintroducedtothemarketplacejustthisweekourtextiletake-backintroduction,ournewrevolutionaryinsulationproducts,andadditionallayeringofourreprieveplatform. Andtheseproductshavebeenunderdevelopmentforseveralquarters,andthey'regoingtogeneratesalesincalendar2025. Wewon'tseeanyofthatinthenextcoupleofmonths,buttheywillbeginin2025andin2026.

Albert Carey: And these sales will start offset the low performance of apparel and also they'll give us the improved mix as the margins on these products are a bit better than the base apparel sales that we have.

Albert Carey: Andtwooftheseproductsareveryinteresting.

Albert Carey: SoifIhadtosayhowwefeelaboutthefirsthalfof2025,itwillshowimprovementversusprioryear,butit'llbeagradual,slowercomeback.

Albert Carey: Inparticular,theonesthataddressthecustomerdemandaroundcircularityandalsoaroundreducingcarbonfootprint.

Eddie Ingle: With our improved financial performance and our focus on managing our balance sheet, we, remain confident that our business is well-positioned for realizing profitable growth opportunities in fiscal 25 and beyond.

Eddie Ingle: With our improved financial performance and our focus on managing our balance sheet. We remain confident that our business is well positioned for realizing profitable growth opportunities in fiscal 'twenty five and beyond I'll now pass the call back to Eddie to take us through the last few slides of the presentation and make some final comments.

Albert Carey: And the third insight is that we've been working on innovation all through this period and we now have introduced to the marketplace just this week our textile take back introduction, our new revolutionary insulation products and additional layering of our reprieve platform.

AJ Eaker: Our focus has remained on keeping our variable expenses across both production and administrative functions low, and we've already begun to see a sustainable reduction in those expenses. As we've previously noted, we plan to reinvest these cost savings and increase profits in the key areas of our business that will drive innovation and margin expansion, such as the two new reprieve fiber products that Eddie just discussed.

Albert Carey: Thenthesecondhalfshouldshowamoredramaticcomeback.

Albert Carey: And these products have been under development for several quarters and they're going to generate sales in calendar 2025.

Eddie Ingle: I'll now pass the call back to Eddie to take us through the last few slides of the presentation, and make some final comments.

Eddie Ingle: Thank you, A.J.

Eddie Ingle: Thank you Mary Jane, Let's now turn to slide 13 to discuss our forecast for the first quarter of fiscal 2025.

Eddie Ingle: Let's now turn to slide 13 to discuss our forecast for the first quarter of fiscal 2025.

AJ Eaker: Turning now to our financial results. On slide 8, you'll see our consolidated financial highlights for the quarter. Consolidated net sales for the quarter were 157.5 million, up 6% sequentially versus the third quarter, or 4% year over year. Driven by our beneficial pricing actions, continued market share gains and some demand normalization in conjunction with improvements from our profitability improvement plan, continuing to materialize. This greater performance also led to our growth profit seeing an improvement of more than 100% sequentially marking our third consecutive quarter of growth profit improvement.

Eddie Ingle: As we look forward, we're having more positive conversations with our customers about their, needs, and de-stocking is clearly behind us and most of the industry, which will help as we analyze some of the impacts of this unusual period.

As we look forward, we're having more positive conversations with our customers about their needs and Destocking is clearly behind us and most of the industry.

Speaker Change: Will help as we anniversary some of the impacts of this unusual period.

Speaker Change: In looking specifically at the first quarter, we expect to see our positive momentum push, forward as we begin our new fiscal year. More specifically for the first quarter, which as a reminder, is historically one of our, slower quarters from a sales perspective due to seasonality, we are expecting the following. Net sales between $147 million and $153 million, which at the midpoint would be roughly a 10% top-line growth year-over-year.

Speaker Change: And looking specifically at the first quarter, we expect to see our positive momentum and push forward as we begin our new fiscal year.

More specifically for the quarter, the first quarter, which as a reminder, is historically one of our slower quarters from a sales perspective due to seasonality we are expecting the following.

Net sales between $147 million and $153 million, which at the midpoint would be roughly a 10% topline growth year over year.

AJ Eaker: Turning to slide 9. In the America segment, net sales were sequentially flat and down 4% year over year, which as Eddie noted was primarily driven by slowdown and spending and customers pushing out a few orders.

Speaker Change: We expect adjusted EBIT to range between 1 million and $3 million a significant improvement over last years EBITDA loss and.

Speaker Change: We expect adjusted EBITDA to range between $1 million and $3 million, a significant improvement, over last year's EBITDA loss. We also expect to continue to keep a disciplined eye on capital expenditures and believe capex, for the quarter will come in between $3 million and $4 million.

Speaker Change: We also expect to continue to keep a disciplined eye on capital expenditures and believe capex for the quarter will come in between $3 million and $4 million.

AJ Eaker: However, with that said, the America segment did experience a significant growth profit improvement, which was driven by improved productivity in the region following holiday impacts in the third quarter of fiscal 24, flood 10 displays our Brazil segment highlights which experienced net sales growth of 9% during the quarter on a sequential basis and almost 19% year-over-year. Our Brazil segment has continued to benefit from our ability to take price in the region, operate at full utilization and the capture of additional market share.

Speaker Change: Then in terms of our fiscal 'twenty five outlook.

Speaker Change: In terms of our fiscal 2025 outlook, I'd like to provide a little more context on slide, 14.

Speaker Change: Like to provide a little more context on slide 14.

Speaker Change: Our underlying momentum is rebuilding so in fiscal 2025, we believe we'll see a return to more normal conditions, which will support topline growth in excess of 10% year over year.

Speaker Change: Our underlying momentum is rebuilding, so in fiscal 2025, we believe we'll see a return, to more normal conditions, which will support top-line growth in excess of 10% year-over-year. Further we believe the proactive decisions we have made to control our costs and streamline, our business will continue to show up in stronger profitability results next year. We expect EBITDA to be positive in every quarter of the fiscal year and see a path to a significant, increase in gross profit, gross margin, and adjusted EBITDA.

Speaker Change: Further we believe the proactive decisions, we've made to control our costs and streamline our business will continue to show up and stronger profitability results next year.

Speaker Change: We expect EBIT to be positive in every quarter of the fiscal year and see a path to a significant increase in gross profit gross margin and adjusted EBITDA.

AJ Eaker: On slide 11, the Asia segment solved net sales growth of 21% sequentially and over 17% year-over-year during by higher sales volumes in the period and improved market conditions. As Asia continues to recover, we remain well-positioned in the region and our portfolio expansion will help drive improved performance for the segment in the future.

Speaker Change: Lastly, we've budgeted to keep capital expenditures contained, and we are projecting that we'll, see capital expenditures range from $10 to $12 million for fiscal 2025.

Speaker Change: Lastly, we budgeted to keep capital expenditures contained and we are projecting that will see capital expenditures range from $10 million to $12 million for fiscal 2025.

Speaker Change: Moving onto slide 15, you can see that some of the key.

Speaker Change: Moving on to slide 15, you can see that some of the key strategic initiative items we're, focused on to maintain a momentum and expand our business.

AJ Eaker: Before passing the call back to Eddie for some closing commentary, I'll now briefly discuss our balance sheet on slide 12. During the quarter, we continue to focus on working capital management and cost controls, allowing for a better free cash flow situation in the quarter and year-to-date periods and positioning us to remain focused on debt repayment.

Speaker Change: Strategic initiative items, we're focused on to maintain momentum and expand our business.

Speaker Change: While we're excited about our opportunities in fiscal 2025, I want to be clear that we're, focused on pivoting to growth for the foreseeable future.

Speaker Change: We're excited about our opportunities in fiscal 2025, I want to be clear that we're focused on pivoting to growth for the foreseeable future. Despite.

Speaker Change: Despite the challenging conditions over the last year and a half, we've never stopped, investing in our business. We put new leaders in key areas to invigorate and position the business for sustainable, profitable growth.

Despite the challenging conditions over the last year and a half we've never stopped investing in our business.

Speaker Change: We put new leaders in key areas to invigorate and position the business for sustainable profitable growth. We also invested heavily in innovation as we talked about today is the engine that helps us grow our business globally.

AJ Eaker: CapEx spend continues to be focused on maintenance levels and remains significantly lower than the prior two fiscal years with fiscal 2024 coming in at 11 million, a multi-year low attributed to the diligence of our various teams and operations. With our improved financial performance and our focus on managing our balance sheet, we remain confident that our business is well-positioned for realizing profitable growth opportunities in fiscal 25 and beyond.

Speaker Change: We also invested heavily in innovation as we talked about today, as it's the engine, that helps us grow our business globally.

Speaker Change: It's our belief that we've only scratched the surface of our potential, and demand for, sustainable solutions continues to be desired by our customers' customers.

Speaker Change: It is our belief that we've only scratched the surface of our potential as demand for sustainable solutions continues to be desired by our customers customers.

Albert Carey: We won't see any of that in the next couple of months, but they will begin in 2025 and in 2026.

I'll repeat offerings continues to gain traction in terms of name recognition and Assortments and our beyond apparel initiatives will help us further diversify our product portfolio by offering new avenues for innovation and growth.

Speaker Change: Our reprieve offerings continue to gain traction in terms of name recognition and assortment, and our Beyond the Power initiatives will help us further diversify our product portfolio by offering new avenues for innovation and growth.

Eddie Engel: I'll now pass the call back to Eddie to take us through the last few slides of the presentation and make some final comments. Thank you, A.J.

Speaker Change: Finally, we have just started to leverage our textile take-back process at scale with, Thermaloop and our new reprieve filament yarns powered by Textile Take-Back. We have a pipeline of future textile take-back innovation opportunities that we will share, with you over the next several quarters and years.

Speaker Change: Finally, we have just started to leverage our textile takeback process at scale with thermal loop and our new repreve sediment yarns powered by textile takeback.

Eddie Engel: Let's now turn to slide 13 to discuss our forecast for the first quarter of fiscal 2025. As we look forward, we're having more positive conversations with our customers of other needs and de-stocking it's clearly behind us and most of the industry, which will help as we anniversary some of the impacts of this unusual period. In looking specifically at the first quarter, we expect to see our positive momentum push forward as we begin our new fiscal year.

Speaker Change: And we have a pipeline of future textile takeback innovation opportunities that we will share with you over the next several quarters and years.

Albert Carey: SoifIhadtosayhowwefeelaboutthefirsthalfof2025,itwillshowimprovementversusprioryear,butit'llbeagradual,slowercomeback.

Speaker Change: And before I end, our remarks I want to note intellectually.

Speaker Change: Before I end our remarks, I want to note, collectively, we've been through a lot over, the last two years, and this team, the global team, has risen to the challenge to not only help streamline our business, but also set it up for long-term success.

Albert Carey: AndI'dsaywe'refeelingcautiouslyoptimisticaswelookoutoverthenewfiscalyear. Andwereallybelievethatsoonenough,thesecustomersthatwehavearegonnahavetostartreplenishingtheirinventories. They'realsogonnahavetostartpreparingforthespringsellingseason. AndIbelievethoseinventoriesrightnowarequitelowandthey'rebelowpre-COVIDlevels. Sowe'regonnacontinuetomanagecostsverytightlyduringthisperiod.

Albert Carey: Thenthesecondhalfshouldshowamoredramaticcomeback. AndI'dsaywe'refeelingcautiouslyoptimisticaswelookoutoverthenewfiscalyear,andwereallybelievethatsoonenoughthesecustomersthatwehavearegoingtohavetostartreplenishingtheirinventoriesandarealsogoingtohavetostartpreparingforthespringsellingseason. AndIbelievethoseinventoriesrightnowarequitelow,andthey'rebelowpre-COVIDlevels.

Speaker Change: We've been through a lot over the last few years and this team. This team the global team has risen to the challenge to not only help streamline our business, but also set it up for long term success.

Albert Carey: We'regonnapreservecashuntilallthisopensbackup.

Speaker Change: And I want to personally thank the whole team again for all of their hard work.

Speaker Change: I want to personally thank the whole team again for all of their hard work.

Eddie Engel: More specifically for the quarter, the first quarter, which as a reminder isn't starkly one of our slower quarters from a sales perspective due to seasonality, we are expecting the following. Net sales between $147 million and $153 million, which at the midpoint would be roughly a 10% top-line growth year reader. We expect adjusted EBITR range between $1 million and $3 million, a significant improvement over last year's EBITR loss, and we also expect to continue to keep a disciplined eye on capital expenditures and believe CapEx for the quarter will come in between $3 million and $4 million.

Speaker Change: With that, we would now like to open the line for questions.

Speaker Change: With that we would now like to open the line for questions. Thank you operator.

Speaker Change: Thank you.

Speaker Change: Operator.

Speaker Change: Thank you.

Speaker Change: Thank you we will now begin the question and answer session. If you have dialed in and I would like to ask a question. Please press star one on your telephone keypad to raise your hand and joined the queue.

Speaker Change: We will now begin the question and answer session.

Speaker Change: If you have dialed in and would like to ask a question, please press star 1 on your telephone, keypad to raise your hand and join the queue.

Speaker Change: If you would like to withdraw your question, simply press the star 1 again.

Speaker Change: If you would like to withdraw your question simply press the star one again.

Speaker Change: And if you are called upon to ask your question and listening by a loudspeaker in your device, please pick up your handset and ensure that your phone is not on mute when asking your question.

Speaker Change: And if you are called upon to ask your question and listening via loud speaker in your device. Please speak up your handset and ensure that your phone is not on mute when asking your question.

Speaker Change: Again, please press star 1 to join the queue.

Speaker Change: Again, Please press star one to join the queue.

Eddie Engel: Then in terms of our fiscal 25 outlook, I'd like to provide a little more context on slide 14. Our underlying momentum is rebuilding. So in fiscal 2025, we believe we'll see a return to more normal conditions which will support top-line growth in excess of 10% year-to-year. Further, we believe the proactive decisions we have made to control our costs and streamline our business will continue to show up in stronger profitability results next. This year. We expect EBIT to be positive in every quarter of the fiscal year and see a path to a significant increase in growth profit, growth margin, and adjusted EBIT.

Speaker Change: And your first question comes from the line of Adam.

Speaker Change: And your first question comes from the line of Anthony Libitsinsky.

Neil: Neil <unk> your line is now open.

Neil: Your line is now open.

Adam Neil: Good morning, and thank you for taking the questions.

Adam Neil: So certainly nice to see the improvement in sales and profitability during the quarter. As you pointed out, Brazil showed the most improvement from a top and bottom line perspective.

Adam Neil: Certainly nice to see the improvement in sales and profitability during the quarter.

Speaker Change: As you pointed out the Brazil showed the most improvement from a top and bottom line perspective.

Albert Carey: Sowe'regoingtocontinuetomanagecostsverytightlyduringthisperiod. We'regoingtopreservecashuntilallthisopensbackup. AndIthinkwhenit'sallover,we'llbeabettercompanythanwewerebeforeallthis.

Adam Neil: Just wondering what is your confidence level as far as being able to sustain that type of improvement going forward.

Adam Neil: Just wondering, what is your confidence level as far as being able to sustain that type, of improvement going forward?

Eddie Ingle: SoletmeturnitoverrightnowtoEddieIngle,ourCEO,andhe'lltakeyouthroughmoreoftheimportantdetailsofthequarter.

Adam Neil: Specifically in Brazil, we actually feel very confident in the demand signals we're getting.

Now specifically in Brazil, we we actually feel very confident in the demand signals, we're getting we.

Eddie Engel: Lastly, we budgeted to keep capital expenditures contained and we are projecting that we'll see capital expenditures range from 10 to 12 million dollars for fiscal 2025.

Eddie Ingle: Eddie?

Speaker Change: We expect to run full throughout the fiscal year.

Speaker Change: Back to run full throughout the fiscal year, there will be some margin pressure.

Speaker Change: There will be some margin pressure as the raw materials inputs normalize and our margins, kind of catch up with the new higher input costs.

As the raw materials inputs are.

Eddie Engel: Moving on to slide 15, you can see that some of the key strategic initiative items were focused on to maintain a momentum and expand our business.

Speaker Change: Normalized and our.

Speaker Change: Catch you on margins go to catch up with the new higher input costs, but for the most part we do expect to remain strong and have a.

Eddie Engel: While we're excited about our opportunities in fiscal 2025, I want to be clear that we're focused on pivoting to growth for the future. Despite the challenging conditions over the last year and a half, we've never stopped investing in our business. We put new leaders in key areas to invigorate and position the business for sustainable profitable growth. We also invested heavily in innovation as we talked about today, as is the engine that helps us grow our business globally.

Speaker Change: But for the most part, we do expect to remain strong and have a decent year ahead, much better e-performance in Brazil this year versus last year.

Speaker Change: Much better EBIT performance in Brazil, this year versus last year.

Speaker Change: That's great to hear and just a follow up as far as the raw material costs.

Speaker Change: That's great to hear.

Eddie Ingle: Thanks,Al. AndasAljusthighlighted,wedobelievethatinmostaspectsofourbusiness,Unifyhasfinallybeguntoturnacornerandtheoperatingenvironmentisbeginningtogetclosertoreturningtomorenormallevels. Andoverthepastyearplus,we'vebeenworkinghardtorepositionourbusinesssoastobeabletorespondquicklytoanuptickincustomerdemandandthattheresultsofthoseeffortshavealreadybecomeapparentinourfinancialsthisquarteraswesawsolidyear-over-yearrevenueandvolumegrowthandasignificantimprovementinourmargins.

Speaker Change: And just to follow up as far as the raw material costs, are you seeing that in all regions or is this specifically to Brazil that you referenced to? It's specifically in Brazil due to the supply chain that we have.

Speaker Change: Are you seeing that in all regions or is this specifically to Brazil that you referenced.

Eddie Ingle: Now,wearealsocontinuingtoseestrongmomentumacrossoursegmentsandwerecentlyannouncedsomeexcitingnewproductinnovationswhichIwilltouchoningreaterdetailshortly.

It's specifically in Brazil due to the.

Albert Carey: And two of these products are very interesting in particular, the ones that address the customer demand around circularity and also around reducing carbon footprint.

Eddie Engel: This is our belief that we have only scratched the surface of our potential and demand for sustainable solutions continues to be desired by our customers customers. Our reprieve offerings continues to gain traction in terms of name recognition and assortment and our beyond a power initiative will help us further diversify our product portfolio by offering new avenues for innovation and growth. Finally, we have just started to leverage our text on take back process at scale with thermal loop and our new reprieve filament yarns powered by text on take back. And we have applied kind of future text on take back innovation opportunities that we will share with you over the next several quarters of years.

The supply chain that we have most of the inputs come from Asia, and the freight costs Internet International.

Speaker Change: Most of the inputs come from Asia and the freight costs, the international container costs have risen significantly, which has given us a pricing opportunity.

Eddie Ingle: Turningnowtoslidefourforanoverviewofthequarter,duringthefourthquarteroffiscal2024,wereported$157.5millioninconsolidatednetsales,whichwasup4%year-over-yearand6%sequentiallycomparedtothethirdquarter. ThisimprovementinnetsaleswaslargelydrivenbyourBrazilsegmentwhichhasbeenperformingverywellrecently. Inaddition,ouroperationsinChinahavealsobeencontinuingtobuildmomentumandcontributedtoourstrongperformanceduringthequarter.

Speaker Change: Understood.

Speaker Change: Okay.

Speaker Change: Container costs have risen significantly, which is giving us a pricing opportunity.

Eddie Ingle: WearecontinuingtoseethebenefitsofAmerica'scostresetefforts,whichisevidentbythesignificantimprovementinourgrossmarginandsubduedoperatingexpenses. Weexpecttoseetheseeffortscontinuethroughthenextfewquartersaswell,althoughit'sworthnotingthatsomeofthesesavingswillbeslightlyoffsetbyinflation.

Speaker Change: Understood, Okay, and then as far as the other regions. What are you seeing from a cost perspective for raw materials.

Speaker Change: And then as far as in other regions, what are you seeing from a cost perspective for raw materials?

Speaker Change: Raw materials have been predominantly, for the most part, flat.

Speaker Change: Raw materials have been predominantly for the most part flat.

Speaker Change: Got it I'm concerned about that.

Speaker Change: Got it.

Speaker Change: Gotcha.

Speaker Change: Okay.

Speaker Change: Good to hear Okay, and then so in your conversations with your top customers in the Americas.

Speaker Change: Got you.

Speaker Change: That's good to hear.

Eddie Engel: And before I end our remarks, I want to note collectively, we've been through a lot over the last few years. And this team, this team, the global team has risen to the challenge to not only help stream on our business, but also set it up for long term success. And I want to personally thank the whole team again for all of their hard work.

Speaker Change: Okay.

Speaker Change: Obviously your largest region.

Albert Carey: AndIthinkwhenit'sallover,we'llbeabettercompanythanwewerebeforeallthis.

Eddie Ingle: Withthatsaid,westillbelievewehavedrivensustainableefficienciesandcostdisciplineoverthelastyearthatourorganizationwillcontinuetoleverageintothefuture. Oursalestransformationhasalsobeenprogressingwellandwehavecontinuedtoseethebenefitsofourtransformationeffortsandgrossprofitduringthequarterexperiencinga$6millionimprovementonasequentialbasis.

Speaker Change: What are you hearing from them as far as when we could see improved results.

Speaker Change: And then, you know, so in your conversations, with your top customers in the Americas, obviously your largest region, what are you hearing from them as far as when we could see improved results?

Speaker Change: So when we look across.

Speaker Change: When we look across our top customers in all regions, actually, not just the apparel segment, they are telegraphing to us that our fiscal Q1, you know, the July through September period is going to be a little slower than they had expected, but they are, I think almost all of them are expecting an uptick in October.

Speaker Change: Our top customers in all reasons actually not just the apparel segments. They are.

Eddie Ingle: SoletmeturnitoverrightnowtoEddieEngel,ourCEO,andhe'lltakeyouthroughmoretheimportantdetailsofthequarter.

Speaker Change: Telegraphing to us.

Operator: With that, we would now like to open the line for questions. Thank you, operator. Thank you.

Speaker Change: Our fiscal Q1 the July through September period is going to be a little a little slower than they had expected but.

Eddie Ingle: Eddie.

Operator: We will now begin the question and answer session. If you have dialed it and would like to ask a question, please press star one on your telephone keypad to raise your hand and join the queue. If you would like to withdraw your question, simply press the star one again.

Speaker Change: They are.

Speaker Change: I think almost two.

Speaker Change: All of them are expecting an uptick in October we have seen a significant improvement already in Central America, our business down there.

Speaker Change: We have seen a significant improvement, already in Central America, our business down there, and maybe they're a leading indicator, but we do expect to see that business improve as we move through the next few months.

Speaker Change: And maybe their lead.

Operator: And if you are called upon to ask your question and listening by loudspeaker in your device, please speak up your handset and ensure that your phone is not on mute when asking your question. Again, please press star one to join the queue.

Speaker Change: Leading indicator, but we do expect to see that business improve actually as we move the next through the next few months in the U S. Specifically there are some markets that we sell into that.

Speaker Change: In the US, specifically, there are some markets that we sell into, that, you know, traditionally they are slower in the summer, and as we move into the late September, early October period, things will get back to a more normalized, higher run rate.

Speaker Change: Traditionally they are slower in the summer and as we move into the late September early October period things will get back to a more normalized higher run rates.

Anthony Lebiedzinski: And your first question comes from the line of Anthony libitsinski. Your line is now open. Good morning and thank you for taking the questions. So certainly nice to see the improvement and sales and profitability during the quarter. As you pointed out, the Brazil show the most improvement that from a top and bottom line perspective, just wondering, you know, what is your confidence level as far as being able to sustain that the type of improvement going forward?

Speaker Change: But they're, generally speaking, positive.

Speaker Change: But they are generally speaking positive it's very different from what it was this time last year.

Speaker Change: It's very different from what it was this time last year.

Albert Carey: So if I had to say how we feel about the first half of 2025, it will show improvement versus prior year, but it'll be a gradual slower comeback than the second half should show a more dramatic comeback.

Speaker Change: Gotcha, okay, so it sounds just like normal seasonality, as far as what's impacting that, okay.

Speaker Change: Got you okay. So it sounds just like normal seasonality as far as what's impacting that okay.

Eddie Ingle: Andthattheresultsofthoseeffortshavealreadybecomeapparentinourfinancialsthisquarteraswesawsolidyear-over-yearrevenueandvolumegrowthandasignificantimprovementinourmargins.

Eddie Ingle: Thisgivesusconfidencethatouroperatingprofitcancontinuetoimproveduringfiscal2025.

Speaker Change: Okay, and then in terms of the new product offerings that you announced earlier this week with the white viable filament yarn and drove a loop.

Speaker Change: Okay, and then, you know, in terms of the new product offerings, that you announced earlier this week, you know, with the white dyeable filament yarn and Therbaloop, just wondering, like, you know, how meaningful could these new products be?

Eddie Ingle: Andwearealsocontinuingtoseestrongmomentumacrossoursegments.

Eddie Ingle: Andwerecentlyannouncedsomeexcitingnewproductinnovations,whichIwilltouchoningreaterdetailshortly.

Speaker Change: Just wondering like.

Speaker Change: How meaningful could these new products be.

Anthony Lebiedzinski: That's specifically in Brazil. We actually feel very confident in the band signals we are getting. We expect to run full fiscal year. There will be some margin pressure as the raw materials inputs normalize and are catching our margins could have catch up with the new hiring but costs. But for the most part, we do expect to remain strong and have a, and much better either form in Brazil this year versus last year.

Speaker Change: You know, I know you talked about really, you know, calendar 25 as far as seeing a benefit, but just wondering if you could, you know, if there's any way you could put a number or just give more details as to, you know, like, what's the opportunity for those new products?

Speaker Change: I know you talked about really calendar 'twenty five as far as seeing a benefit because the system. There just wondering if you could if there is any way you could put a number or just give more details as to.

What's the opportunity for those new products.

Speaker Change: Well, I, personally, I'm incredibly excited, about what we've been able to bring to the markets.

Well I personally I'm incredibly excited about what we've been able to bring to the markets. We've been we've been asked for several <unk>.

Speaker Change: You know, we've been asked for several years now, how do we make this supply chain more circular?

Speaker Change: Several years now how do we make the supply chain more circular.

Anthony Lebiedzinski: That's great to hear, and just to follow up as far as the raw material costs, are you seeing that in all regions or is this specifically to Brazil that you reference to? It's specifically in Brazil due to the supply chain that we have, most of the inputs come from Asia and the freight costs internationally, container costs have risen significantly, which has given us a pricing opportunity. Understood. And then as far as in other regions, what are you seeing from a cost perspective for raw materials?

Speaker Change: And on top of that, there's pending legislation in the EU, that will require inputs to recycle input content to be not just from bottles, but also from textiles.

And on top of that there is pending legislation in the EU that will require inputs to recycled inputs content to be not just from from bottles, but also from from textile. So we believe we've hit the right notes with a 50%.

Speaker Change: So we believe we've hit the right note, with a 50% content of textile tape back, but 100% recycles.

Speaker Change: Content of textile takeback, but 100% recycled we believe based on the messaging we've been getting from.

Speaker Change: We believe, based on the messaging we've been getting from, the brands that we are right on the sweet spots for them to be able to communicate.

Speaker Change: The brands that we are right on.

Speaker Change: Sweet spots for them to be able to communicate I've actually spent time personally talking to brands in Europe and in the U S and from based on their reaction.

Speaker Change: I've actually spent time personally talking to brands in Europe and in the U.S. and based on, their reaction, and the reaction is different depending on the brand, but based on some reactions of all these brands and retailers, we think we've hit on a nice balance of circularity and sustainability.

Speaker Change: And the reaction is different depending on the brand but based on.

Anthony Lebiedzinski: Raw materials have been predominantly for the most part flat. Got it. Okay. That's good to hear. Okay. And then, you know, so in your conversations with your top customers in the Americas, obviously your largest region, what are you hearing from them as far as when we could see improved results? Now, when we look across our top customers in all regions, actually not just the apparel segment, they are telegraphing to us that our fiscal Q1, you know, the July through September period.

Speaker Change: Some reactions of all these brands and retailers.

Speaker Change: We think we've.

Speaker Change: We've hit on have a nice balance of circularity and sustainability because some customers are based on our focus on carbon reduction some customers are based on fossil fuel consumption depletion.

Albert Carey: And I'd say we're feeling cautiously optimistic as we look out over the new fiscal year and we really believe that soon enough these customers that we have are going to have to start replenishing their inventories.

Speaker Change: Because some customers are focused on carbon reduction, some customers are based on fossil fuel consumption depletion, and this provides the answers to both.

Eddie Ingle: I'llnowprovideabriefupdateoneachofourbusinesssegments. IntheAmericassegments,whilewearecontinuingtotakemarketshare,wedidexperienceabitofaslowdownduetosomecompetitiveshufflingandsomecustomerspushingoutordersforafewmonths.

Speaker Change: And this provides the answers to both so and I think what's really exciting Anthony.

Speaker Change: And I think what's really exciting, Anthony, is the fact that one of these products is a, new product line for us, insulation, and it allows us to call directly on the brands and we can get spec'd in as a solution for providing a restocking content product.

Albert Carey: And we're also going to have to start preparing for the spring selling season and I believe those inventories right now are quite low and they're below pre-COVID levels.

Eddie Ingle: Turningnowtoslidefourforanoverviewofthequarter.

Anthony: The fact that one of these products is a new product line for us installation and it allows us to call directly.

Anthony: On the brands and we can get specced in.

Anthony: As a solution for providing a recycled content product.

Anthony Lebiedzinski: It's going to be a little slower than they had expected, but they are, I think almost to all of them are expecting an uptick in October. We have seen a significant improvement already in Central America, our business down there. And maybe they're a leading indicator, but we do expect to see that business improve actually to move through the next few months. In the US, specifically, there are some markets that we sell into that, you know, traditionally they are slower in the summer, and as you move into the late September, early October period, things will get back to an or a more normalized higher run rate. But they're generally speaking positive, it's very different from what it was this time last year. Gotcha. Okay. So it sounds just like normal seasonality as far as what's impacting that, okay. Okay.

Albert Carey: So we're going to continue to manage costs very tightly during this period.

Anthony: Gotcha, yeah, that sounds very good.

Anthony: Gotcha, Yeah that sounds very good so as far as I know.

Speaker Change: So it's hard to say for sure probably as far as the timing of this pending legislation, but I mean as far as what you know what.

Speaker Change: So as far as, I know it's hard to say for sure, probably as far as the timing of this pending legislation, but I mean, as far as what you know, what's the earliest that you think that you could actually see that going through?

Albert Carey: We're going to preserve cash until all this opens back up and I think when it's all over, we'll be a better company than we were before all this.

Eddie Ingle: Duringthefourthquarteroffiscal2024,wereported$157.5millioninconsolidatednetsales,whichwasup4%year-over-yearand6%sequentiallycomparedtothethirdquarter. ThisimprovementinnetsaleswaslargelydrivenbyourBrazilsegment,whichhasbeenperformingverywellrecently. Inaddition,ouroperationsinChinahavealsobeencontinuingtobuildmomentumandcontributedtoourstrongperformanceduringthequarter.

Speaker Change: What's the earliest you.

Ed Ingle: So let me turn it over right now to Eddie Engel, our CEO and he'll take you through more important details of the quarter.

Speaker Change: Think you could actually see that.

Speaker Change: Because I think that could be meaningful to you guys.

Speaker Change: Going through.

Ed Ingle: Eddie.

I think that that could be meaningful to you guys.

Eddie Ingle: WearecontinuingtoseethebenefitsofAmerica'scostresetefforts,whichisevidentbythesignificantimprovementinourgrossmarginandsubduedoperatingexpenses.

Speaker Change: I think we'll, in the second half of this fiscal year, the January through July period, we'll start, to see, we'll be sampling now, but we'll start to see meaningful production orders.

Speaker Change: I think we will.

Speaker Change: In the second half of this fiscal year. The January through July period, we will start to see we'll be sampling now, but we'll start to see meaningful.

Speaker Change: Production orders and really at the beginning of our fiscal 'twenty six.

Ed Ingle: Thanks, Al.

Speaker Change: And really, at the beginning of our fiscal 26, 12 months from now, 10 months from now, it'll be in our budget and it'll be visible from a revenue perspective and margin perspective.

Ed Ingle: And as Al just highlighted, we do believe that in most aspects of our business, Unify has finally begun to turn a corner and the operating environment is beginning to get closer to returning to more normal levels.

Eddie Ingle: Weexpecttoseetheseeffortscontinuethroughthenextfewquartersaswell. Althoughit'sworthnotingthatsomeofthesesavingswillbeslightlyoffsetbyinflation.

Speaker Change: 12 months 10 months from now.

Eddie Ingle: Withthatsaid,westillbelievewehavedrivensustainableefficienciesandcostdisciplineoverthelastyearthatourorganizationwillcontinuetoleverageintothefuture. Oursalestransformationhasalsobeenprogressingwell,andwehavecontinuedtoseethebenefitsofourtransformationeffortswithgrossprofitduringthequarter,experiencinga$6millionimprovementonasequentialbasis. Thisgivesusconfidencethatouroperatingprofitscancontinuetoimproveduringfiscal2025.

Speaker Change: It'll be in our budgets.

Speaker Change: It'll be visible from a revenue perspective and margin perspective.

Anthony Lebiedzinski: And then, you know, in terms of the new product offerings that you announced earlier this week, you know, with the white, diable filament yarn and throw of a loop, just wondering like, you know, if these new products be, you know, I know you talked about really, you know, calendar 25 as far as seeing a benefit, but it's just just wondering if you could, you know, if there's any way you could put a number or just give more details as to, you know, like what's the opportunity for those new products? Well, personally, I'm incredibly excited about what we've been able to bring to the market.

But we are we are planning for the next six months to fulfill the sampling needs of all the customers. So they can figure out how and when to put it into their into their programs.

Speaker Change: But we are planning for the next six months to fulfill the sampling needs of all the customers so they can figure out how and when to put it into their programs.

Speaker Change: Gotcha, good.

Speaker Change: Gotcha, Okay, and then as far as the beyond apparel initiative I know, that's something you guys have talked about.

Speaker Change: Okay, and then as far as the beyond the peril initiative, I know that's something you guys have talked about certainly in the past.

Speaker Change: Certainly in the past as far as you know.

Speaker Change: As far as thinking about this going forward here, are you actually gaining some new customers?

Speaker Change: Thinking about this going forward here.

Speaker Change: Are you actually.

Speaker Change: Gaining some new customers.

Speaker Change: Are you actually seeing more purchase orders come in?

Speaker Change: Are you actually seeing more purchase orders come in.

Speaker Change: Maybe if you could just provide a little bit more detail on the beyond apparel initiatives that will be helpful.

Speaker Change: And maybe if you could just provide a little bit more detail on the beyond the peril initiative, that'd be helpful.

Anthony Lebiedzinski: You know, we've been asked for several, several years now, how do we make this supply chain more circular? And on top of that, there's pending legislation in the EU that will require inputs to recycle inputs, content to be not just from models, but also from textiles. So we believe we've hit the right note with a 50 percent content of textile tape back, but 100 percent recycles, we believe based on the messaging we've been getting from The brands that we are right on the sweet spots for them to be able to communicate.

Speaker Change: Yeah, we have talked about beyond the peril a lot in our calls really the last 12 to 18 months.

Speaker Change: Yeah.

Speaker Change: We have talked about a lot in our calls.

Speaker Change: We are seeing traction, we are seeing commercial orders, and I believe in the next call, we'll be able to outline some of the revenue impacts that we're going to see from these initiatives.

Speaker Change: Really the last 12 to 18 months, we are seeing traction, we're seeing commercial orders and I'm I believe by the.

Speaker Change: And the next call, we'll be able to outline some of the revenue impacts that we're going to see from these initiatives right now I cant give specific details but.

Speaker Change: Right now, I can't give specific details, but I'm very confident that in the October call, we'll be able to outline the progress we've made and what that means to our business.

Speaker Change: But I am very confident that by the October call, we'll be able to outline.

Speaker Change: But we are well on our way to making it part of our business.

Speaker Change: The progress we've made and what that means for our business but.

Anthony Lebiedzinski: I've actually spent time personally talking to brands in Europe and in the US and from based on their reaction and their reaction is different depending on the brand but based on the some reactions of all these brands and retailers. We think we've hit on a nice balance of circularity and sustainability. Because some customers are based on carbon reduction, some customers are based on fossil fuel consumption depletion and this provides the answers to both.

Speaker Change: We are.

Speaker Change: We are well on our way.

Speaker Change: Thanks.

Making it part of our business. Thanks.

Speaker Change: Thanks.

Speaker Change: This is al I, just wanted to add something to the insurance I would say that I'd say that.

Speaker Change: Anthony, this is Al.

Speaker Change: In fiscal 2026, we'll see an impact and probably a little bit in the end of this fiscal year, but the thing that's exciting is.

Speaker Change: I just wanted to add something to Eddie's comments.

Speaker Change: The products that he's talking about the new ones with textile takeback in the installation they have stronger significantly stronger margins in our base business and then if you go to the beyond apparel I know, we've been talking about it for a long time, but one of the new pieces of information as to get qualified for some of these customers that bought it takes a long time.

Anthony Lebiedzinski: So I think what's really exciting, Anthony, is the fact that one of these products is a new product line for us insulation and it allows us to call directly on the brands and we can get spec'd in as a solution for providing it a reshacking content product. That sounds very good. So as far as I know it's hard to say for sure, probably as far as the timing of this pending legislation but I mean as far as what you know what the earliest that you think that you could actually see that going through.

Speaker Change: For qualifying the quality of your product the timing and to get contracts signed but those are happening and that's another one that has a significantly better gross profit margins than the base business that we're into today. So I think going forward will be less dependent we're still going to sell apparel.

Speaker Change: In the apparel business, but it will be less dependent on it.

Speaker Change: This new textile takeback is a real boost.

Speaker Change: In the environmental sustainability story, so I wish these we're going to show up this quarter, they won't but they will be probably by the end of the fiscal year.

Anthony Lebiedzinski: I think that could be meaningful to you guys. I think we'll in the second half of this fiscal year the January through July period will start to see we'll be sampling now but we'll start to see meaningful production orders and really at the beginning of our fiscal 26 12 months and now 10 months and now it will be in our budget and it'll be visible from a revenue perspective and margin perspective.

Speaker Change: I'd say that in fiscal 2026, we'll see an impact, and probably a little bit in the end of this fiscal year.

Speaker Change: Okay.

Speaker Change: Great to hear and I appreciate the comprehensive answer so I guess my my last question just a follow up as far as the margin differential anyway, you guys could quantify or give some more additional color as far as what the margin difference, though you think will be for the new products versus the <unk>.

Speaker Change: But the thing that's exciting is the products that Eddie's talking about, the new ones with textile take back and the insulation, they have significantly stronger margins in our base business.

Anthony Lebiedzinski: But we are we are planning for the next six months to fulfill the sampling need of all the customers so they can figure out how and when to put it into their into their programs. Gotcha good and then as far as the beyond the parallel initiative I know that's something you guys have talked about the certainly in the past as far as you know thinking about this you know going forward here are you actually gaining so some new customers are you actually seeing more purchase orders to come in and you know maybe if you could just provide a little bit more detail on the beyond the parallel initiative that will be helpful.

Speaker Change: Our legacy products.

Speaker Change: Sure Anthony it's a J thanks for the questions and thanks for joining this morning.

Speaker Change: In general we're seeing that as.

Speaker Change: In general double what we see from our base business.

Eddie Ingle: Butweremainwellpositionedtotakeadvantageoffurtherimprovementintheregionasourcontinuedeffortsonbeyondapparelinitiativesarehelpingtooffsettheweaknessinapparelprograms.

Speaker Change: Certainly the base business is constrained, especially in the Americas right now with fixed cost absorption.

Speaker Change: And and not getting the full volumes and that we've been chasing for several months now so that those margins are naturally suppressed, but you've seen those in the past in the low double digits somewhere between eight and 12, 15% that we've been able to perform in the better years.

Eddie Ingle: OurBrazilsegment,asmentionedearlier,wasourstrongestperformingsegmentduringthefourthquarter. Thestrongperformancewasdrivenbyourabilitytotakepriceintheregion,operateatfullutilization,andwehavecontinuedtobenefitfromthecaptureofadditionalmarketsharefollowingourmaincompetitorwhoexitedtheregion.

Eddie Ingle: OurBrazilsegment,asmentionedearlier,wasourstrongestperformingsegmentduringthefourthquarter. Thestrongperformancewasdrivenbyourabilitytotakepriceintheregion,operateatfullutilizationandwehavecontinuedtobenefitfromthecaptureofadditionalmarketsharefollowingourmaincompetitorwhoexitedtheregion.

Speaker Change: So with these new products as they have some innovation underlying those and we're able to really key in on what customer customers need with the new products, we're able to see double double the margin there in many cases.

Anthony Lebiedzinski: Yeah we have talked about beyond a lot in our calls really last 12 to 18 months we are seeing traction. We are seeing commercial orders and I believe by the in the next call we'll be able to outline some of the revenue impacts that we're going to see from the initiatives. Right now I can't give specific details but I'm very confident that by in the October call we'll be able to outline the progress we've made and what that means to our business.

Ed Ingle: And over the past year plus we've been working hard to reposition our business, so it's be able to respond quickly to an uptickling customer demand and that the results of those efforts have already become apparent in our financial disorder as we saw a solid year over year revenue and volume growth and a significant improvement in our margins.

Eddie Ingle: InourAsiasegment,wearecontinuingtoseesignsofrecoveryandwebelievethatwe'llseestrongerperformanceintheregionduringfiscal2025despiteaseasonallyslowerfirstquarter.

Eddie Ingle: InourAsiasegment,wearecontinuingtoseesignsofrecoveryandwebelievethatyouwillseestrongerperformanceintheregionduringfiscal2025despiteaseasonallyslowerfirstquarter.

Ed Ingle: And now we are also continuing to see strong momentum across our segments and we recently announced some exciting new product innovations which I'll touch on in greater detail shortly.

Speaker Change: Alright, well, that's great to hear and look forward to seeing the progress that you guys will be making this year. So thank you very much and best of luck.

Speaker Change: Thank you excellent. Thank you Anthony Thank you Anthony.

Ed Ingle: Turning now to slide four for an overview of the quarter.

Speaker Change: Again, if you would like to ask a question. Please press star one to join the queue.

Eddie Ingle: Turningnowtoslidefiveforanupdateonreprieve. Duringthefourthquarter,reprieverepresented34%ofsales,ameaningfulincreasewhencomparedtothepreviousquarter. ThisimprovementinsaleswaslargelydrivenbythepositiverecoverytrendsthathavebeenseeninCentralAmericaaswellasamoderaterecoveryinAsia.

Eddie Ingle: Turningnowtoslide5foranupdateonreprieve. Duringthefourthquarter,reprieverepresented34%ofsales,ameaningfulincreasewhencomparedtothepreviousquarter. ThisimprovementinsaleswaslargelydrivenbythepositiverecoverytrendsthathavebeenseeninCentralAmericaaswellasamoderaterecoveryinAsia.

Speaker Change: Yeah.

Anthony Lebiedzinski: But we are we are well on our way to making it part of our business. Thanks. I just wanted to add something to the at least sure I'd say that I'd say that in fiscal 2026 we'll see an impact and probably a little bit in the you know the end of this fiscal year but the thing that's exciting is the products that Eddie's talking about the new ones with textile take back in the insulation.

Speaker Change: And that concludes our Q&A session and today's call.

Eddie Ingle: Lookingahead,wecontinuetobelievethatwewillseeadditionalimprovementsinourreprievefiberbusinessasweprogressthroughfiscal2025. Thispartofourbusinesswillbeaidedbytherevenuesweexpecttoseeincalendar2025aswebegintoseecommercialactivityduemainlytoourrecentinnovationeffortsfromsomenewreprieveproductlaunches.

Eddie Ingle: Lookingahead,wecontinuetobelievethatwewillseeanadditionalimprovementinourreprievefiberbusinessasweprogressthroughfiscal2025. Thispartofourbusinesswillbeaidedbytherevenuesweexpecttoseeincalendar2025aswebegintoseecommercialactivityduemainlytoourrecentinnovationeffortsfromsomenewreprieveproductlaunches.

Speaker Change: Thank you everyone for joining you may now disconnect.

Ed Ingle: During the fourth quarter of fiscal 2024, we reported $157.5 million in consolidated net sales, which was up 4% year over year and 6% sequentially compared to the third quarter. This improvement in net sales was largely driven by our Brazil segment, which has been performing very well recently.

Ed Ingle: In addition, our operations in China have also been continued to build momentum and contributed to our strong performance during the quarter.

Speaker Change: Okay.

Speaker Change: [music].

Eddie Ingle: Onthemarketingfrontforreprieve,wealsoachievedseveralexcitingco-brandingplacesthisquarter,notablywithDolceVitaFootwear,partoftheSteveMaddenGroup,incorporatedreprieveintoitsproducts. KateSpadefeaturedreprieveinapajamalineforCostcoCanadaandTevalaunchedaniconicversionoftheiroriginaluniversalsandalinareloopversionwhichcontainedreprievepoweredbyourowntextiletake-backprogram.

Eddie Ingle: Inthemarketingfrontforreprieve,wealsoachievedseveralexcitingco-brandingplacementsthisquarter,notablywithDolceVitaFootwear,partoftheSteveMaddenGroup,incorporatedreprieveintoitsproducts.

Anthony Lebiedzinski: They have stronger significantly stronger margins in our base business and then if you go to the beyond the parallel I know we've been talking about it for a long time. But one of the new pieces of information is to get qualified for some of these customers it boy it takes a long time for qualifying the quality of your product the timing and to get contract signed but those are happening. And that's another one that has significantly better gross profit margins than the base business that we're into today so I think going forward, will be less dependent.

Ed Ingle: We are continuing to see the benefits of our America's cost reset efforts, which is evident by the significant improvement in our gross margin and subdued operating expenses. We expect to see these efforts continue through the next few quarters as well, although it's worth noting that some of these savings will be slightly offset by inflation.

Ed Ingle: With that said, we still believe we had driven sustainable efficiencies and cost discipline over the last year that our organization will continue to leverage into the future. Our sales transformation has also been progressing well, and we have continued to see the benefits of our transformation efforts with gross profit during the quarter experiencing a $6 million improvement on a sequential basis. This gives us confidence that our operating profit can continue to improve during fiscal 2025.

Anthony Lebiedzinski: We're still going to sell the power. I want to be in the apparel business, but we'll be less dependent on it. And this new textile take back is a real boost in the environmental sustainability story. So I wish these were going to show up this quarter. They won't, but they will be probably the end of the fiscal year. Okay, that's great to hear and I appreciate the comprehensive answer. So I guess my last question, just to follow up, but as far as the margin differential, any way you guys could quantify or give some more additional color as far as what the margin difference you think will be for the new products versus the legacy products.

Speaker Change: Yes.

Eddie Ingle: Now,asmanyofyouareaware,ifyou'vebeenlisteningtoourcallsofthelastfewquarters,ourtextiletake-backprogramaimstoincreasecircularityintheproductionoftextilesbytransformingfabricwasteintoarecycledresinthatinturnisconvertedintoareprievefiber. Throughthisprocess,wearenotonlyleadingthetransitionforamorecircularsupplychain,butwearealsohelpingourcustomers,suchastheonesImentionedearlier,meettheirsustainabilitygoals.

Eddie Ingle: KateSpadefeaturedreprieveinapajamalineforCostcoCanadaandTevalaunchedaniconicversionoftheiroriginaluniversalsandalinareloopversionwhichcontainedreprievepoweredbyourowntextiletake-backprogram. Asmanyofyouareaware,ifyou'vebeenlisteningtoourcallsofthelastfewquarters,ourtextiletake-backprogramaimstoincreasecircularityintheproductionoftextilesbytransformingfabricwasteintoarecycledresinthatinturnisconvertedintoareprievefiber.

[music].

Speaker Change: Okay.

Eddie Ingle: Now,stayingonthetopicoftextiletake-back,Iwouldliketospendsometimereviewingsomeofthenewinnovativereprieveproductsthatwejustannouncedearlierthisweekthatareharnessingourtextiletake-backprogramandalreadyhavetheabilitytobeofferedatscale.

Eddie Ingle: Throughthisprocess,wearenotonlyleadingthetransitionforamorecircularsupplychainbutwearealsohelpingourcustomerssuchastheonesImentionedearliermeettheirsustainabilitygoals.

Speaker Change: Yes.

Speaker Change: [music].

Eddie Ingle: First,onslidesix,you'llseesomehighlightsofournewwhitereprievefilamentyarnpoweredbyourtextiletake-backprocessthatwewillbeshowcasingattheIntertextileShanghaiApparelFabricsConventionnextweek. Thenewformofreprievefilamentyarnismadeof50%textiletake-backwasteand50%recycledbottles,whichistheworld'sfirst50%textilewastefilamentyarnwithatraceranduTrustverification.

Speaker Change: Okay.

Anthony Lebiedzinski: Sure, Anthony. It's a thanks for the questions and thanks for joining this morning. It in general, we're seeing that as in general double, what we see from our base business, certainly the base business is constrained especially in the Americas right now with fixed cost absorption and not getting the full volumes in that we've been chasing for several months now. So those margins are naturally suppressed, but you've seen those in the past in the low double digits somewhere between 8, 12, 15% that we've been able to perform in the better years.

Eddie Ingle: First,onslidesix,you'llseesomehighlightsofournewwhitereprievefilamentyarnpoweredbyourtextiletake-backprocessthatwewillbeshowcasingattheIntertextileShanghaiApparelFabricsConventionnextweek. Thenewformofreprievefilamentyarnismadeof50%textiletake-backwasteand50%recycledbottleswhichistheworld'sfirst50%textilewastefilamentyarnwithatracerandU-Trustverification.

Speaker Change: Okay.

Eddie Ingle: Thenewofferingiswhite,dyeable,andavailableatscalenow.

Eddie Ingle: Onslideseven,foroursecondnewproductannouncement,youcanseethatwe'velaunchedatotallynewproductofferingbutstillbasedonpolyesterfibercalledThermaloopwhichisaninstallationsolutionthatisdesignedforhomegoods,outdoorgearapplications,thingslikesleepingbagsandapparelsuchaswinterjackets. WhatmakesThermaloupsouniqueisthat50%ofthefibersusedtomakeitarefromtextilewaste,andwearelaunchingthisnewproductofferinginblack. TheThermaloupproductswerelaunchedas100%recycledcontent.

Speaker Change: [music].

Ed Ingle: On that provide a brief update on each of our business segments. In the Americas segments, while we are continuing to take market share, we did experience a bit of a slowdown due to some competitive shuffling and some customers pushing out orders for a few months.

Speaker Change: Okay.

Anthony Lebiedzinski: So with these new products as they have some innovation underlying those and we're able to really key in on what customer customers need with the new products, we're able to see double the margin there in many cases. All right, well, that's great to hear and look forward to seeing the progress that you guys will be making this year. So thank you very much and best of luck. Thank you. Excellent. Thank you, Anthony.

Eddie Ingle: Thenewofferingiswhite,dyeable,andavailableatscalenow.

Anthony Lebiedzinski: Again, if you would like to ask a question, please press star one to join the queue. And that concludes our Q&A session and today's call. Thank you everyone for joining. You may now disconnect. Eaker, Anthony Lebiedzinski, Edmund Ingle[inaudible] Anthony Lebiedz Ingle, Anthony Lebiedzinski, Edmund Ingle, Anthony Lebiedz Ingle, Anthony Lebiedz Ingle, Anthony Lebiedzinski, Edmund Ingle, Anthony Lebiedz[inaudible] Ingle, Anthony Ingle, Anthony Ingle, Anthony . . [inaudible] . . Ingle, Andrew Eaker, Anthony Lebiedzinski, Edmund Ingle[inaudible] Ingle, Andrew Eaker, Anthony Lebiedzinski, Edmund Ingle, Andrew Eaker, Anthony Lebiedzinski, Edmund Ingle, Andrew Eaker, Anthony Lebiedzinski, Edmund Ingle, Andrew Eaker, Anthony Lebiedzinski, Edmund Ingle, Andrew Eaker, Anthony Lebiedzinski, Edmund Ingle, Andrew Eaker, Anthony Lebiedzinski, Edmund Ingle, Andrew Eaker, Anthony Lebiedzinski, Edmund Ingle, Andrew Eaker, Anthony Lebiedzinski, Edmund Ingle, Andrew Eaker, Anthony Lebiedzinski, Edmund Ingle, Andrew Eaker,[inaudible] Ingle, Andrew[inaudible] As to the Speakers in March, there will be a question and answer session.

Speaker Change: [music].

Good morning, and thank you for attending unified fourth quarter fiscal 2024 earnings conference call.

Speaker Change: Today's conference is being recorded and all lines have been placed on mute to prevent any background noise.

Speaker Change: And then if you go to the beyond the peril, I know we've been talking about it for a long time, but one of the new pieces of information is to get qualified for some of these customers, boy, it takes a long time for qualifying the quality of your product, the timing, and to get contracts signed.

Speaker Change: After the Speakers' remarks, there will be a question and answer session.

Speaker Change: Speakers for today's call include Okay Executive Chairman.

Speaker Change: Engle Chief Executive Officer.

Speaker Change: A G Edwards Chief Financial Officer.

Speaker Change: During this call management will be referencing a webcast presentation that can be found in the investor Relations section of unify dot com.

Speaker Change: Please familiarize yourself with page two of the slide deck for our cautionary statements and non G. A a P measures.

Speaker Change: But those are happening.

Speaker Change: And now I will turn the call over to Al Carey Oh, the floor is yours. Thank you. Thank you Kathleen good.

Al Carey: And that's another one that has significantly better gross profit margins than the base business that we're into today.

Al Carey: Morning, everybody and thank you very much for joining us on the call today I'm going to start with a brief but broad overview of our performance for Q4 see a couple of insights that come out of it for us.

Al Carey: So I think going forward, will be less dependent.

Speaker Change: And then I'm going to turn it over immediately to Eddie and a J, who will provide you with the real details of the quarter.

Speaker Change: We're still going to sell apparel.

Speaker Change: So the first insight was.

This broader textile and apparel industry sales are coming back a lot slower than we expected, but they are improving.

Speaker Change: And while the inventory to sales ratios at the retail level and for these brands are now close to the norms and and at pre Covid levels. The.

Speaker Change: The customers are still very cautious about building back inventories and they're watching their cash and they are keeping an eye on what I'd call a sluggish consumer trend.

Speaker Change: But our retail sales for apparel and furnishing for the first half of the year were growing.

Speaker Change: Growing at about low single digits, and you know if you factor in inflation, they probably flat to slightly down versus a year ago, our sales for the quarter.

Speaker Change: For the fourth quarter of better than the previous quarters.

Speaker Change: Of 2024, and they're better than last year's Q4.

Speaker Change: Our EBITDA was $5 $9 million.

Speaker Change: And it's substantially better than the last three quarters and a better performance is attributed mostly to the.

Speaker Change: Quarter, two and quarter three cost reductions that we told you about last time. So most of those cost reductions are now fully in place now.

Speaker Change: The second insight to the quarter was we are seeing improved market share in North America. Despite the sluggish sales come back.

Speaker Change: We want to be in the apparel business, but we'll be less dependent on it.

Speaker Change: And we're very close to booking sales in the new categories that we've told you about before which are that beyond apparel categories.

Speaker Change: And those categories include home military automotive and industrial applications and are these sales will start to offset the low performance of apparel and also they'll give us.

Speaker Change: Mix is the margins on these products are a good bit better than the base apparel sales that we have.

Speaker Change: And this new text I'll take back is a real boost in the environmental sustainability story.

Speaker Change: And the third inside is that we've been working on innovation all through this period.

Speaker Change: So I wish these were going to show up this quarter.

We now have introduced to the marketplace I'm just this week, our textile takeback introduction.

Operator: Speakers for the days call include Al Carey Executive Chairman, Ed Ingle, Chief Executive Officer, AJ Eker, Chief Financial Officer. And 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 back for cautionary statements and non-GAAAP measures.

Speaker Change: Our new revolutionary installation products and additional layering of our Repreve platform.

Speaker Change: And these products had been under development for several quarters than they are they're going to generate sales in calendar 2025, we won't see any of that in the next couple of months, but they will begin in 2025 and in 2026 and two of these products are very interesting in particular, the the ones that address the customer demand around.

Speaker Change: They won't, but they will be probably by the end of the fiscal year.

Ed Ingle: But we remain well positioned to take advantage of further improvement in the region as our continued efforts on beyond the power of initiatives are helping to offset the weakness in the power of programs.

Albert Carey: And now I will turn the call over to Al Carey.

Speaker Change: Circularity and also around reducing carbon footprint.

Albert Carey: Al, the floor is yours. Thank you. Thank you, Kathleen. Good morning, everybody. And thank you very much for joining us on the call today. I'm going to start with a brief but broad overview of our performance for Q4. See a couple of insights that come out for us.

Speaker Change: Okay.

Speaker Change: So if I had to say, how we feel about the first half of 2025, it will show improvement.

Speaker Change: That's great to hear, and I appreciate the comprehensive answer.

Eddie Ingle: Onslide7,foroursecondnewproductannouncement,youcanseethatwe'velaunchedatotallynewproductofferingbutstillbasedonpolyesterfibercalledThermaloop,whichisaninsulationsolutionthatisdesignedforhomegoods,outdoorgearapplications,thingslikesleepingbagsandapparelsuchaswinterjackets. WhatmakesThermaloopsouniqueisthat50%ofthefibersusedtomakeitarefromtextilewasteandwearelaunchingthisnewproductofferinginblack.

Eddie Ingle: WhatisevenmoreexcitingisthattheThermalouppaddingproductisthefirstofitskindtohaveareprieverecycledpolyesterlowmeltfiber,whichallowsourcustomerstoprovideawiderrangeofsustainableofferings.

Ed Ingle: Our Brazil segments, as I mentioned earlier, was our strongest performing segment during the fourth quarter. The strong performance was driven by our ability to take price in the region, operate at full utilization, and we have continued to benefit from the capture of additional market share following our main competitor to exit the region.

Speaker Change: Versus prior year, but it'll be a gradual slower comeback.

Speaker Change: Than the second half should show a more dramatic comeback.

Albert Carey: And then I'm going to turn it over immediately to Eddie and AJ who will provide you with the real details of the quarter. So the first insight was this broader textile and apparel industry sales are coming back a lot slower than we expected, but they are improving. And while the inventory to sales ratios at the retail level and for these brands and out close to the norms and at pre-COVID levels, the customers are still very cautious about building back inventories and they're watching their cash and they're keeping an eye on what I call a sluggish consumer trend.

Speaker Change: And I'd say, we're feeling cautiously optimistic as we look out over the new fiscal year, and we really believe that soon enough for these customers that we have are gonna have to start replenishing their inventories and they're also gonna have to start preparing for the spring selling season and I believe those inventories right now are quite low and they are below pre COVID-19 levels.

Speaker Change: So we're going to continue to manage costs very tightly during this period, we're going to preserve cash until all of this opens back up and I think when it's all over it will be a better company than we were before all this.

Eddie Ingle: So I guess my last, question, just to follow up as far as the margin differential, any way you guys could quantify or give some more additional color as far as what the margin difference you think will be for the new products versus the legacy products?

Eddie Ingle: So let me turn it over right now to Eddie Ingle, our CEO and he'll take you through more the important details of the quarter Eddie.

Albert Carey: But retail sales for apparel and furnishings for the first half of the year were growing at about low single digits. And if you factor in inflation, they're probably flat that slightly down versus a year ago. Our sales for the quarter for this fourth quarter are better than the previous quarters of 2024 and are better than last year's Q4. Our EBIT was $5.9 million and it's substantially better than the last three quarters and better performances attributed mostly to the quarter two and quarter three cost reductions that we told you about last time.

Eddie Ingle: Sure, Anthony.

Eddie Ingle: It's AJ.

Eddie Ingle: Thanks Al.

Eddie Ingle: Thanks for the questions and thanks for joining this morning.

Eddie Ingle: As al just highlighted we do believe that in most aspects of our business Unifi has finally begun to turn a corner and the operating environment.

Eddie Ingle: In general, we're seeing that as, in general, double what we see from our base business.

Eddie Ingle: Certainly the base business is constrained, especially in the Americas right now with fixed cost absorption and not getting the full volumes in that we've, been chasing for several months now.

Speaker Change: Beginning to get closer to returning to more normal levels.

Speaker Change: And over the past year, plus we've been working hard to reposition our business so as to be able to respond quickly to an uptick in customer demand.

Speaker Change: And that the results of those efforts have already become apparent in our financials. This quarter as we saw solid year over year revenue and volume growth and a significant improvement in our margins.

Speaker Change: So those margins are naturally suppressed, but you've seen those in the past in the low double digits, somewhere between 8, 12, 15 percent that we've been able to perform in the better years.

Speaker Change: We are also continuing to see strong momentum across our segments and we recently announced some exciting new product innovations, which I will touch on in greater detail shortly.

Speaker Change: So with these new products, as they have some innovation underlying those and we're able to really key in on what customers need with the new products, we're able to see double the margin there in many cases.

Albert Carey: So most of those cost reductions are now fully in place. Now the second insight to the quarter was we are seeing improved market share in North America, despite the sluggish sales come back. And we're very close to booking sales in the new categories that we've told you about before, which are the beyond apparel categories. And those categories include home, military, automotives and industrial applications and these sales will start offset the low performance of apparel and also they'll give us the improved mix as the margins on each product are good bit better than the base apparel sales that we have.

Speaker Change: All right.

Speaker Change: Turning now to slide four for an overview of the quarter during.

Speaker Change: Well, that's great to hear, and I look forward to seeing the progress that you guys will be making this year.

During the fourth quarter of fiscal 2024, we reported $157 $5 million and consolidated net sales, which was up 4% year over year, and 6% sequentially compared to the third quarter.

Speaker Change: So thank you very much and best of luck.

Speaker Change: Thank you.

Speaker Change: Excellent.

Speaker Change: Thank you, Anthony.

Speaker Change: This improvement in net sales was largely driven by our Brazil segment.

Speaker Change: Thank you, Anthony.

Speaker Change: It's been performing very well recently.

Speaker Change: Again, if you would like to ask a question, please press star 1 to join the queue.

Speaker Change: In addition, our operations in China have also been continuing to build momentum and contributed to our strong performance during the quarter.

Speaker Change: We're continuing to see the benefits of our Americas cost reset efforts.

Albert Carey: And the third insight is that we've been working on innovation all through this period. And we now have introduced to the marketplace just this week our textile take back introduction, our new revolutionary insulation products and additional layering of our reprieve platform. And these products have been under development for several quarters and they they're going to generate sales in calendar 2025 we won't see any of that in the next couple of months but they will begin in 2025 and in 2026. And two of these products are very interesting in particular the ones that address the customer demand around circularity and also around reducing carbon foot.

Speaker Change: Which is evidenced by the significant improvement in our gross margin and subdued operating expenses.

Eddie Ingle: TheThermaloopproductswerelaunchedas100%recycledcontent.

Eddie Ingle: BothThermaloupandournewformofreprievefilamentyarnwillbesampledbyourcustomersthroughoutfiscal2025.

Speaker Change: Expect to see these efforts continue through the next few quarters as well, although it's worth noting that some of these savings will be slightly offset by inflation.

Speaker Change: With that said, we still believe we have driven sustainable efficiencies and cost discipline over the last year.

Eddie Ingle: WhatisevenmoreexcitingisthattheThermalooppaddingproductisthefirstofitskindtohaveareprieverecycledpolyesterlowmeltfiber,whichallowsourcustomerstoprovideawiderrangeofsustainableofferings. BothThermaloopandournewformofreprievefilamentyarnwillbesampledbyourcustomersthroughoutfiscal2025.

Eddie Ingle: Webelievewewillbegintoseesomerevenuesandvolumebenefitsfromournewfilamentyarninthesecondhalfoffiscal2025,andwe'llbegintoseethegrowthbenefitsfromtheThermaloupthroughoutfiscal2026,supportingadditionalgrowthmovingforward.

Speaker Change: That our organization will continue to leverage into the future.

Speaker Change: This gives us confidence that our operating profit continued to improve during fiscal 2025.

Speaker Change: And that concludes our Q&A session and today's call.

Albert Carey: Apprent. So if I had to say how we feel about the first half of 2025, it will show improvement versus prior year but it will be a gradual slower comeback than the second half should show a more dramatic comeback. And I'd say we're feeling cautiously optimistic as we look out over the new fiscal year and we really believe that soon enough these customers that we have are going to have to start replenishing their inventory and we're also going to have to start preparing for the spring selling season and I believe those inventories right now are quite low and they're below pre-COVID levels.

Speaker Change: I'll now provide a brief update on each of our business segments.

Ed Ingle: In our Asia segment, we are continuing to see signs of recovery, and we believe that we will see stronger performance in the region during fiscal 2025, despite a seasonally slower first quarter.

Speaker Change: Thank you, everyone, for joining.

Speaker Change: In the Americas segment, while we are continuing to take market share we did experience a bit of a slowdown due to some competitive shuffling in some customers pushing out orders for a few months.

Ed Ingle: Turning now to slide five for an update on reprieve.

Speaker Change: But we remain well positioned to take advantage of further improvement in the region.

Speaker Change: As our continued efforts on beyond apparel initiatives.

Speaker Change: Helping to offset the weakness in our power programs.

Speaker Change: Our Brazil segment as mentioned earlier.

Speaker Change: Our strongest performing segment during the fourth quarter.

Albert Carey: So we're going to continue to manage costs very tightly during this period. We're going to preserve cash until all this opens back up and I think when it's all over we'll be a better company than we were before all this.

Speaker Change: This strong performance was driven by our ability to take price in the region operate at full utilization and we have continued to benefit from the capture of additional market share following our main competitor to exit the region.

Eddie Engel: So let me turn it over right now to Eddie Engel, our CEO and he'll take you through more the important details of the corner, Eddie. Thanks, Al. And as Al just highlighted, we do believe that in most aspects of our business, Unifi has finally begun to turn a corner and the operating environment is beginning to get closer to returning to more normal levels.

Speaker Change: In our Asia segment were continuing to see signs of recovery and we believe that we will see stronger performance in the region during fiscal 2025, despite the seasonally slower first quarter.

Eddie Ingle: Webelievewewillbegintoseesomerevenuesandvolumebenefitsfromournewfilamentyarninthesecondhalfoffiscal2025.

Eddie Ingle: BeforeIwrapup,Iwouldalsoliketonotethatourbeyondapparelinnovationsarecontinuingtogrow,andwithconversationsprogressingwithanumberofcustomersinkeyendmarkets,andwearehopefulthatwe'llbeabletofurtherdiscusstheseinthenearfuture.

Speaker Change: You may now disconnect.

Speaker Change: Turning now to slide five for an update on Repreve.

Speaker Change: Andrew Eaker, Craig Creaturo, Anthony Lebiedzinski, Edmund Ingle, Andrew Eaker, Unifi Inc, მ განს ბი ველენი რომ შენი ნსი ცს სანბი შენი სიცანეოი უოირი სინოი მანოი შანენი შის ხეოი რემე� შღენ ხეროერი რერი შთოერი ყკეჟერი შირი მანერი წვერი წერერი რანერი სანსი მანთესნი ხერი ტშ� რენი ხერი სანერი ხანერი აყუშერრერი რერი რერი ხანერი შსო ყ჌ბერერᰕნი თერი ხანი ანრკერი ქანე� საერი სანერაყი ყოიცანი რადერერაშერგერერამ taste რღენთ ლანდისრერინიხ ოოერისოერერიწ აგრერერერიჯანინერერერერერერერბღ ღერერერიყიული � [inaudible] A, After the speaker's remarks, there will be a question and answer session.

Speaker Change: During the fourth quarter were pre represented 34% of sales.

Eddie Engel: And over the past year plus we've been working hard to reposition our business so it's be able to respond quickly to an uptickling customer demand and that the results of those efforts have already become apparent in our financial disorder as we saw a solid year-over-year revenue and volume growth and a significant improvement in our margins. Now we are also continuing to see strong momentum across our segments and we recently announced some exciting new product innovations which I will touch on in greater detail shortly.

Eddie Ingle: Andwe'llbegintoseethegrowthbenefitsfromtheThermaloopthroughoutfiscal2026,supportingadditionalgrowthmovingforward.

AJ Eaker: Withthat,IwouldnowliketopassthecallovertoAJtodiscussourfinancialresultsforthequarter.

Speaker Change: Looking ahead.

Speaker Change: We continue to believe that we will see additional improvements in our repreve fiber business as we progress through fiscal 2025.

Eddie Ingle: BeforeIwrapup,Iwouldalsoliketonotethatourbeyondapparelinnovationsarecontinuingtogrowandwithconversationsprogressingwithanumberofcustomersinkeyendmarketsandwearehopefulthatwe'llbeabletofurtherdiscusstheseinthenearfuture.

AJ Eaker: Thankyou,Eddie.

Speaker Change: This part of our business will be aided by the revenues, we expect to see in calendar 2025, as we begin to see commercial activity due mainly.

Speaker Change: Through our recent innovation efforts from some new product launches.

Eddie Engel: Turning now to slide four for an overview of the quarter. During the fourth quarter of fiscal 2024, we reported $157.5 million in consolidated net sales which was up 4% year-over-year and 6% sequentially compared to the third quarter. This improvement in net sales was largely driven by our Brazil segment which has been performing very well recently. In addition, our operations in China have also been continuing to build momentum and contributed to our strong performance during the quarter.

AJ Eaker: Withthat,IwillnowliketopassthecallovertoAJtodiscussourfinancialresultsforthequarter.

AJ Eaker: AsbothAlandEddienoted,we'vecontinuedtomakegreatstridestowardsimprovingourbusiness,andwearewellpositionedtopivottogrowthandstrongerprofitabilityaswemoveforward. Ourfocushasremainedonkeepingourvariableexpensesacrossbothproductionandadministrativefunctionslow,andwe'vealreadybeguntoseeasustainablereductioninthoseexpenses. Aswe'vepreviouslynoted,weplantoreinvestthesecostsavingsandincreaseprofitsinthekeyareasofourbusinessthatwilldriveinnovationandmarginexpansion,suchasthetwonewreprievefiberproductsthatEddiejustdiscussed.

Ed Ingle: During the fourth quarter, we are pre-ever-represented, 34% of sales, a meaningful increase when compared to the previous quarter.

AJ Eaker: Thankyou,Eddie.

AJ Eaker: Turningnowtoourfinancialresults,onslide8,you'llseeourconsolidatedfinancialhighlightsforthequarter. Consolidatednetsalesforthequarterwere$157.5million,up6%sequentiallyversusthethirdquarter,or4%yearoveryear,drivenbyourbeneficialpricingactions,continuedmarketsharegains,andsomedemandnormalizationinconjunctionwithimprovementsfromourprofitabilityimprovementplancontinuingtomaterialize.

AJ Eaker: AsbothAlandEddienoted,we'vecontinuedtomakegreatstridestowardsimprovingourbusinessandwearewellpositionedtopivottogrowthandstrongerprofitabilityaswemoveforward. Ourfocushasremainedonkeepingourvariableexpensesacrossbothproductionandadministrativefunctionslowandwe'vealreadybeguntoseeasustainablereductioninthoseexpenses.

Eddie Engel: We are continuing to see the benefits of our America's cost reset efforts which is evident by the significant improvement in our gross margin and subdued operating expenses. We expect to see these efforts continue through the next few quarters as well although it's worth noting that some of these savings will be slightly offset by inflation. With that said, we still believe we have driven sustainable efficiencies and cost discipline over the last year that our organization will continue to leverage into the future. Our sales transformation has also been progressing well and we have continued to see the benefits of our transformation efforts with gross profit during the quarter experiencing a $6 million improvement on a sequential basis.

Speaker Change: Speakers for today's call include Al Carey, Executive Chairman, Eddie Ingle, Chief Executive Officer, AJ Eaker, Chief Financial Officer. And during this call, management will be referencing a webcast presentation, that can be found in the Investor Relations section of unifi.com.

Speaker Change: Now as many of you are aware.

AJ Eaker: Thisgreaterperformancealsoledtoourgrossprofitseeinganimprovementofmorethan100%sequentially,markingourthirdconsecutivequarterofgrossprofitimprovement.

Speaker Change: If you've been listening to our calls over the last few quarters, our textile Takeback program aims to increase circularity and the production of textiles by transforming fabric waste into our recycled resin that.

Speaker Change: That in turn is converted into a pre fiber.

Eddie Engel: This gives us confidence that our operating profits can continue to improve during fiscal 2025.

Speaker Change: Now staying on the topic of textile takeback I'd like to spend some time on.

Speaker Change: Reviewing some of the new innovative or pre products that we just announced earlier. This week that are harnessing our textile takeback program and are really already have the ability to be offered at scale.

Eddie Engel: Now provide a brief update on each of our business segments. In the Americas segments, while we are continuing to take market share, we did experience a bit of a slowdown due to some competitive shuffling and some customers pushing out orders for a few months. But we remain well positioned to take advantage of further improvement in the region as our continued efforts on beyond the power initiatives are helping to offset the weakness in the power program.

AJ Eaker: Turningtoslide9,intheAmericassegment,netsalesweresequentiallyflatanddown4%yearoveryear,which,asEddienoted,wasprimarilydrivenbyaslowdowninspendingandcustomerspushingoutafeworders. However,withthatsaid,theAmericassegmentdidexperienceasignificantgrossprofitimprovement,whichwasdrivenbyimprovedproductivityintheregionfollowingholidayimpactsinthethirdquarteroffiscal24.

Speaker Change: The new form of a pre filament yarn is made of 50% textile takeback waste and 50% recycled bottles, which is the world's first 50% textile waste filament yarn with a tracer and you trust verification.

AJ Eaker: Slide10displaysourBrazilsegmenthighlights,whichexperiencednetsalesgrowthof9%duringthequarteronasequentialbasisandalmost19%yearoveryear. OurBrazilsegmenthascontinuedtobenefitfromourabilitytotakepriceintheregion,operateatfullutilization,andthecaptureofadditionalmarketshare.

Speaker Change: The new offering is white deibel and available at scale now.

Eddie Engel: Our Brazil segments, as I mentioned earlier, was our strongest performing segment during the fourth quarter. The strong performance was driven by our ability to take price in the region, operate at full utilization, and we have continued to benefit from the capture of additional market share following our main competitor to exit the region.

On slide seven for our second new product announcements you can see that we've launched a totally new product offering, but still based on polyester fiber coal thermal loop.

Speaker Change: Which is an installation solution that is designed for home goods.

Speaker Change: Joke here applications things like our sleeping bags and apparel such as winter jackets.

Eddie Engel: In our Asia segment, we are continuing to see signs of recovery, and we believe that we'll see stronger performance in the region during fiscal 2025, despite a seasonally slower first quarter.

AJ Eaker: Onslide11,theAsiasegmentsawnetsalesgrowthof21%sequentiallyandover17%yearoveryear,drivenbyhighersalesvolumesintheperiodandimprovedmarketshare. AsAsiacontinuestorecover,weremainwell-positionedintheregion,andourportfolioexpansionwillhelpdriveimprovedperformanceforthesegmentinthefuture.

Speaker Change: What makes thermally so unique is that 50% of the fibers used to make it all from textile waste and we are launching this new product offering in black.

Eddie Engel: Turning now to slide five for an update on reprieve. During the fourth quarter, reprieve represented 34% of sales, a meaningful increase when compared to the previous quarter. This improvement in sales was largely driven by the positive recovery trends that have been seen in Central America, as well as a moderate recovery in Asia.

Speaker Change: Thermal products for launch as 100% recycled content.

AJ Eaker: Aswe'vepreviouslynoted,weplantoreinvestthesecostsavingsandincreaseprofitsinthekeyareasofourbusinessthatwilldriveinnovationandmarginexpansion,suchasthetwonewreprievefiberproductsthatEddiejustdiscussed.

Ed Ingle: This improvement in sales was largely driven by the positive recovery trends that have been seen in Central America, as well as in modern recovery in Asia.

Speaker Change: Both thermal loop and our new form of Repreve filament yarn will be samples by our customers throughout fiscal 2025.

Ed Ingle: Looking ahead, we continue to believe that we will see additional improvements in our reprieve fiber business as we progress through fiscal 2025. This part of our business will be aided by the revenues we expect to see in calendar 2025, as we begin to see commercial activity due mainly to our recent innovation efforts from some new reprieve product launches.

Eddie Engel: Looking ahead, we continue to believe that we will see additional improvements in our reprieve fiber business as we progress through fiscal 2025. This part of our business will be aided by the revenues we expect to see in calendar 2025, as we begin to see commercial activity due mainly to our recent innovation efforts from some new reprieve product launches. On the marketing firm for reprieve, we also achieved several exciting co-branting faces this quarter, notably with Dolcevita Footwear, part of the Steve Matten Group, incorporated preven to its products.

Ed Ingle: On the marketing front pro reprieve, we also achieved several exciting co-branting faces this quarter, notably with Dolcevita Footwear, part of the Steve Madden Group, incorporated preven to its products.

Ed Ingle: Plate spade featured reprieve in a pajama line for Costco Canada, and Teva launched an iconic version of their original universal sample in a re-loop version which contained reprieve powered by our own textile take-back program. As many of you are aware, if you've been listening to our calls of the last few quarters, our textile take-back program aims to increase circularity in the production of textiles by transforming fabric waste into a recycled resin that in turn is converted into reprieve fiber. Through this process, we are not only leading the transition for a more circular supply chain, but we are also helping our customers, such as the ones I mentioned earlier, meet their sustainability goals.

Eddie Engel: Kate Spade featured reprieve in a pajama line for Costco Canada and Teva launched an iconic version of their original universal sample in a re-loop version which contained reprieve powered by our own textile take-back program. As many of you are aware, if you have listened to our calls of the last few quarters, our textile take-back program aims to increase circularity in the production of textiles by transforming fabric waste into a recycled resin that in turn is converted into a prefiber. Through this process, we are not only leading the transition for a more circular supply chain, but we are also helping our customers, such as the ones I mentioned earlier, meet their sustainability goals.

J: Please familiarize yourself with page 2 of that slide deck for cautionary statements, and non-GAAP measures.

A J: And now I will turn the call over to Al Carey.

A J: Al, the floor is yours.

A J: Thank you Eddie as both Al and Eddie noted, we've continued to make great strides towards improving our business and we are well positioned to pivot to growth and stronger profitability as we move forward. Our focus has remained on keeping our variable expenses across both production and administrative functions low and we've already begun to see a sustainable reduction in those expenses.

A J: As we've previously noted we plan to reinvest these cost savings and increased profits in the key areas of our business that will drive innovation and margin expansion such as the two new repreve fiber products that Eddie just discussed.

Speaker Change: Thank you.

Speaker Change: Turning now to our financial results on slide eight you'll see our consolidated financial highlights for the quarter consolidated net sales for the quarter were $157 5 million.

Ed Ingle: Now, saying on the topic of textile take-back, I would like to spend some time rearing some of the new innovative reprieve products that we just announced earlier this week that our harnessing our textile take-back program and already have the ability to be offered at scale.

Eddie Engel: Now, staying on the topic of textile take-back, I would like to spend some time reviewing some of the new innovative reprieve products that we just announced earlier this week that our harnessing our textile take-back program and already have the ability to be offered at scale.

Speaker Change: Thank you, Kathleen.

Speaker Change: Up 6% sequentially versus the third quarter or 4% year over year driven.

Speaker Change: Good morning, everybody, and thank you very much for joining us on the call today.

Speaker Change: I'm going to start with a brief but broad overview of our performance for Q4, see a couple of insights that come out for us, and then I'm going to turn it over immediately to Eddie and AJ, who will provide you with the real details of the quarter.

Eddie Engel: First, on slide six, you will see some highlights of our new white reprieve filament yarn powered by our textile take-back process that we will be showcasing at the Inter-Textile Shanghai Apparel Fabrics Convention next week.

Ed Ingle: First, on slide six, you'll see some highlights of our new white reprieve filament yarn powered by our textile take-back process that we will be showcasing at the Inter-Textile Shanghai Apparel Fabrics Convention next week.

Speaker Change: So the first insight was this broader textile and apparel industry sales are coming back, a lot slower than we expected, but they are improving.

Speaker Change: This greater performance also led to our gross profit seeing an improvement of more than 100% sequentially, marking our third consecutive quarter of gross profit improvement.

Ed Ingle: The new form of reprieve filament yarn is made of 50% textile take-back waste and 50% recycled bottles, which are the world's first 50% textile waste filament yarn with the pracer and eutrust verification.

Eddie Engel: The new form of reprieve filament yarn is made of 50% textile take-back waste and 50% recycled bottles which are the world's first 50% textile waste filament yarn with the tracer and uterus verification. The new offering is white, valuable and available at scale now.

Speaker Change: And while the inventory-to-sales ratios at the retail level and for these brands, are now close to the norms and at pre-COVID levels, the customers are still very cautious about building back inventories and they're watching their cash and they're keeping an eye on what I'd call a sluggish consumer trend.

Speaker Change: Turning to slide nine.

Speaker Change: In the Americas segment, net sales were sequentially flat and down 4% year over year, which as Eddie noted was primarily driven by a slowdown in spending and customers pushing out a few orders. However, with that said the Americas segment did experience a significant gross profit improvement, which was driven by improved productivity in the <unk>.

Ed Ingle: The new offering is white, diabol and available at scale now.

Ed Ingle: On slide 7, for our second new product announcement, you can see that we've launched a totally new product offering but still based on polyester fiber called thermal loop, which is an insulation solution that is designed for home goods, outdoor gear applications, things like sleeping bags and a powerl such as winter jackets. What makes thermal loop so unique is that 50% of the fibers used to make it are from textile waste and we are launching this new product offering in black.

Eddie Engel: On slide seven, for our second new product announcement, you can see that we have launched a totally new product offering but still based on polyester fiber called thermal loop which is an installation solution that is designed for home goods, outdoor gear applications, things like sleeping bags and apparel such as winter jacks. What makes Thermaloop so unique is that 50% of the fiber is used to make it off from textile waste and we are launching this new product offering in black. The Thermaloop products were launched as a 100% recycled content.

Speaker Change: Jim following holiday impacts in the third quarter of fiscal 'twenty four.

Ed Ingle: The thermal loop products were launched as a 100% recycled content.

Ed Ingle: What is even more exciting is that the thermal loop padding product is the first of its kind to have a reprieve recycled polyester low melt fiber, which allows our customers to provide a wider range of sustainable offerings.

Eddie Engel: What is even more exciting is that the Thermaloop Padding product is the first of its kind to have a reprieve recycled polyester low melt fiber which allows our customers to provide a wider range of sustainable offerings. Both Thermaloop and our new form of reprieve filament yarn will be sampled by our customers throughout fiscal 2025. We believe we will begin to see some revenues and volume benefits from our new filament yarn in the second half of fiscal 2025. And we will begin to see the growth benefits from the Thermaloop throughout fiscal 2026 supporting additional growth moving forward.

Speaker Change: Sure.

Ed Ingle: Both thermal loop and our new form of reprieve filament yarn will be sampled by our customers throughout fiscal 2025.

Ed Ingle: We believe we will begin to see some revenues and volume benefits from our new filament yarn in the second half of fiscal 2025 and we will begin to see the growth benefits from the thermal loop throughout fiscal 2026 supporting additional growth moving forward.

Speaker Change: Performance for the segment in the future.

Speaker Change: But retail sales for apparel and furnishings for the first half of the year, were growing at about low single digits.

Speaker Change: Before passing the call back to Eddie for some closing commentary I'll now briefly discuss our balance sheet on slide 12.

Speaker Change: And, you know, if you factor in inflation, they probably flapped it slightly down versus a year ago.

Speaker Change: During the quarter, we continued to focus on working capital management and cost controls, allowing for a better free cash flow situation in the quarter and year to date periods.

Eddie Engel: Before I wrap up, I would also like to note that our beyond-of-parallel innovations are continuing to grow with conversations progressing with a number of customers in key end markets and we are hopeful that we'll be able to further discuss these in the near future.

Ed Ingle: Before I wrap up, I would also like to note that our beyond-a-parallel innovations are continuing to grow and with conversations progressing with a number of customers in key end markets and we are hopeful that we'll be able to further discuss these in the near future.

Eddie Ingle: And positioning us to remain focused on debt repayment.

AJ Eaker: With that, I will now like to pass the call over to AJ to discuss our financial results for the quarter.

AJ Eaker: With that, I will now like to pass the call over to AJ to discuss our financial results for the quarter. Thank you, Eddie. As both Alan and Eddie noted, we've continued to make great strides towards improving our business and we are well positioned to pivot to growth and stronger profitability as we move forward. Our focus has remained on keeping our variable expenses across both production and administrative functions low and we've already begun to see a sustainable reduction in those expenses.

AJ Eaker: BeforepassingthecallbacktoEddieforsomeclosingcommentary,I'llnowbrieflydiscussourbalancesheetonslide12. Duringthequarter,wecontinuetofocusonworkingcapitalmanagementandcostcontrols,allowingforabetterfreecashflowsituationinthequarterandyear-to-dateperiods. Andpositioningustoremainfocusedondebtrepayment. CapExspendcontinuestobefocusedonmaintenancelevelsandremainssignificantlylowerthanthepriortwofiscalyears,withfiscal2024cominginat$11million,amulti-yearlowattributedtothediligenceofourvariousteamsandoperations.

AJ Eaker: Thank you, Eddie.

AJ Eaker: As both Alan and Eddie noted, we've continued to make great strides towards improving our business and we are well positioned to pivot to growth and stronger profitability as we move forward. Our focus has remained on keeping our variable expenses across both production and administrative functions low and we've already begun to see a sustainable reduction in those expenses. As we've previously noted, we plan to reinvest these cost savings and increase profits in the key areas of our business that will drive innovation and margin expansion such as the two new reprie fiber products that Eddie just discussed.

AJ Eaker: As we previously noted, we plan to reinvest these call savings and increase profits in the key areas of our business that will drive innovation and margin expansion such as the two new reprieved fiber products that Eddie just discussed.

Thank you Mary Jane, Let's now turn to slide 13 to discuss our forecast for the first quarter of fiscal 2025.

AJ Eaker: Turning now to our financial results.

Eddie Ingle: Our sales for the quarter, for this fourth quarter, are better than the previous quarters of 2024, and they're better than last year's Q4. Our EBITDA was $5.9 million, and it's substantially better than the last three quarters. And better performance is attributed mostly to these quarter two, and quarter three cost reductions that we told you about last time. So most of those cost reductions are now fully in place.

Eddie Ingle: As we look forward, we're having more positive conversations with our customers about their needs and destocking, it's clearly behind us and most of the industry.

AJ Eaker: On slide 8, you'll see our consolidated financial highlights for the quarter.

AJ Eaker: Movingnowtoourfinancialresults,onslide8,you'llseeourconsolidatedfinancialhighlightsforthequarter. Consolidatednetsalesforthequarterwere$157.5million,up6%sequentiallyversusthethirdquarteror4%yearoveryear,drivenbyourbeneficialpricingactions,continuedmarketsharegainsandsomedemandnormalizationinconjunctionwithimprovementsfromourprofitabilityimprovementplancontinuingtomaterialize. Thisgreaterperformancealsoledtoourgrossprofitseeinganimprovementofmorethan100%sequentially,markingourthirdconsecutivequarterofgrossprofitimprovement.

AJ Eaker: Consolidated net sales for the quarter were 157.5 million, up 6% sequentially versus the third quarter, or 4% year over year. Driven by our beneficial pricing actions, continued market share gains, and some demand normalization in conjunction with improvements from our profitability improvement plan continuing to materialize. This greater performance also led to our growth profit seeing an improvement of more than 100% sequentially marking our third consecutive quarter of growth profit improvement.

Speaker Change: Will help as we anniversary some of the impacts of this unusual period.

Speaker Change: And looking specifically at the first quarter, we expect to see our positive momentum and push forward as we begin our new fiscal year.

AJ Eaker: Driven by our beneficial pricing actions, continued market share gains and some demand normalization in conjunction with improvements from our profitability improvement plan continuing to materialize. This greater performance also led to our growth profit seeing an improvement of more than 100% sequentially marking our third consecutive quarter of growth profit improvement.

Speaker Change: Now, the second insight to the quarter, was we are seeing improved market share in North America despite the sluggish sales comeback.

Speaker Change: More specifically for the quarter, the first quarter, which as a reminder, is historically one of our slower quarters from a sales perspective due to seasonality we are expecting the following.

Speaker Change: And we're very close to booking sales in the new categories, that we've told you about before, which are the beyond apparel categories. And those categories include home, military, automotive, and industrial applications. These sales will start to offset the low performance of apparel, and also they'll give us an improved mix as the margins on these products are a good bit better than the base apparel sales that we have.

Speaker Change: Net sales between $147 million and $153 million, which at the midpoint would be roughly a 10% topline growth year over year.

AJ Eaker: Turning to slide 9. In the America segment, net sales were sequentially flat and down 4% year over year, which is Eddie noted was primarily driven by a slowdown in spending and customers pushing out a few orders. However, with that said, the America segment did experience a significant gross profit improvement, which was driven by improved productivity in the region following holiday impacts in the third quarter of fiscal 24.

AJ Eaker: Turning to slide 9.

AJ Eaker: Turningtoslide9,intheAmericasegment,netsalesweresequentiallyflatanddown4%yearoveryear,whichasEddienoted,wasprimarilydrivenbyaslowdowninspendingandcustomerspushingoutafeworders. However,withthatsaid,theAmericasegmentdidexperienceasignificantgrossprofitimprovement,whichwasdrivenbyimprovedproductivityintheregionfollowingholidayimpactsinthethirdquarteroffiscal24.

AJ Eaker: In the America segment, net sales were sequentially flat and down 4% year over year, which as Eddie noted was primarily driven by slowdown and spending and customers pushing out a few orders. However, with that said, the America segment did experience a significant gross profit improvement which was driven by improved productivity in the region following holiday impacts in the third quarter of fiscal 24.

Speaker Change: We expect.

Speaker Change: Adjusted EBIT to range between 1 million and $3 million a significant improvement over last years EBITDA loss.

And we also expect to continue to keep a disciplined eye on capital expenditures and believe capex for the quarter will come in between $3 million and $4 million.

Speaker Change: Then in terms of our fiscal 'twenty five outlook.

Speaker Change: I'd like to provide a little more context on slide 14.

AJ Eaker: Flood 10 displays our Brazil segment highlights, which experienced net sales growth of 9% during the quarter on a sequential basis and almost 19% year-over-year. Our Brazil segment has continued to benefit from our ability to take price in the region, operate at full utilization and the capture of additional market share.

AJ Eaker: Slide 10 displays our Brazil segment highlights, which experienced net sales growth of 9% during the quarter on a sequential basis and almost 19% year over year. Our Brazil segment has continued to benefit from our ability to take price in the region, operate at full utilization and the capture of additional market share.

Speaker Change: Our underlying momentum is rebuilding.

AJ Eaker: Slide10displaysourBrazilsegmenthighlights,whichexperiencednetsalesgrowthof9%duringthequarteronasequentialbasisandalmost19%year-over-year. OurBrazilsegmenthascontinuedtobenefitfromourabilitytotakepriceintheregion,operateatfullutilization,andthecaptureofadditionalmarketshare.

Speaker Change: In fiscal 2025, we believe we'll see a return to more normal conditions, which will support topline growth in excess of 10% year over year.

Further we believe the proactive decisions, we've made to control our costs and streamline our business will continue to show up and stronger profitability results next year.

Speaker Change: We expect EBIT to be positive in every quarter of the fiscal year and see a path to a significant increase in gross profit gross margin and adjusted EBITDA.

AJ Eaker: On slide 11, the Asia segment solved net sales growth of 21% sequentially and over 17% year over year during by higher sales volumes in the period and improved market. Conditions As Asia continues to recover, we remain well positioned in the region and our portfolio expansion will help thrive and prove performance for the segment in the future.

AJ Eaker: On slide 11, the Asia segment saw net sales growth of 21% sequentially and over 17% year-over-year, driven by higher sales volumes in the period and improved market conditions.

AJ Eaker: Onslide11,theAsiasegmentsawnetsalesgrowthof21%sequentiallyandover17%year-over-year,drivenbyhighersalesvolumesintheperiodandimprovedmarketconditions. AsAsiacontinuestorecover,weremainwell-positionedintheregion,andourportfolioexpansionwillhelpdriveimprovedperformanceforthesegmentinthefuture.

Lastly, we budgeted to keep capital expenditures contained and we are projecting that will see capital expenditures range from $10 million to $12 million for fiscal 2025.

AJ Eaker: As Asia continues to recover, we remain well-positioned in the region and our portfolio expansion will help drive improved performance for the segment in the future.

Speaker Change: Moving onto slide 15, you can see that some of the key strategic initiative items, we're focused on to maintain momentum and expand our business.

AJ Eaker: Before passing the call back to Eddie for some closing commentary, I'll now briefly discuss our balance sheet on slide 12. During the quarter, we continue to focus on working capital management and cost controls allowing for a better free cash flow situation in the quarter and year-to-date periods. And positioning us to remain focused on debt repayment.

AJ Eaker: Before passing the call back to Eddie for some closing commentary, I'll now briefly discuss our balance sheet on slide 12.

AJ Eaker: BeforepassingthecallbacktoEddieforsomeclosingcommentary,I'llnowbrieflydiscussourbalancesheetonslide12. Duringthequarter,wecontinuetofocusonworkingcapitalmanagementandcostcontrols,allowingforabetterfreecashflowsituationinthequarterandyear-to-dateperiods,andpositioningustoremainfocusedondebtrepayment. CapExspendcontinuestobefocusedonmaintenancelevelsandremainssignificantlylowerthanthepriortwofiscalyears,withfiscal2024cominginat$11million,amulti-yearlowattributedtothediligenceofourvariousteamsandoperations.

Speaker Change: We're excited about our opportunities in fiscal 2025, I want to be clear that we're focused on pivoting to growth for the foreseeable future. Despite.

AJ Eaker: During the quarter, we continue to focus on working capital management and cost controls, allowing for a better free cash flow situation in the quarter and year-to-date periods and positioning us to remain focused on debt repayment.

Speaker Change: Despite the challenging conditions over the last year and a half we've never stopped investing in our business.

Speaker Change: And the third insight is that we've been working on innovation, all through this period, and we now have introduced to the marketplace just this week our textile take-back introduction, our new revolutionary insulation products, and additional layering of our reprieve platform. And these products have been under development for several quarters, and they're going to generate sales in calendar 2025.

Speaker Change: We won't see any of that in the next couple of months, but they will begin in 2025 and in 2026.

Speaker Change: And two of these products are very interesting. In particular, the ones that address the customer demand around circularity, and also around reducing carbon footprint.

Speaker Change: We put new leaders in key areas to invigorate and position the business for sustainable profitable growth. We also invested heavily in innovation as we talked about today. This is the engine that helps us grow our business globally.

AJ Eaker: CapExSpin continues to be focused on maintenance levels and remains significantly lower than the prior two fiscal years, with fiscal 2024 coming in at 11 million, a multi-year low attributed to the diligence of our various teams and operations.

AJ Eaker: CapExPin continues to be focused on maintenance levels and remains significantly lower than the prior two fiscal years, with fiscal 2024 coming in at 11 million, a multi-year low attributed to the diligence of our various teams and operations. With our improved financial performance and our focus on managing our balance sheet, we remain confident that our business is well positioned for realizing profitable growth opportunities in fiscal 25 and beyond.

Speaker Change: It is our belief that we've only scratched the surface of our potential as demand for sustainable solutions continues to be desired by our customers customers.

AJ Eaker: With our improved financial performance and our focus on managing our balance sheet, we remain confident that our business is well-positioned for realizing profitable growth opportunities in fiscal 25 and beyond.

Speaker Change: Our <unk> offerings continues to gain traction in terms of name recognition in Assortments and our beyond apparel initiatives will help us further diversify our product portfolio by offering new avenues for innovation and growth.

AJ Eaker: Withourimprovedfinancialperformanceandourfocusonmanagingourbalancesheet,weremainconfidentthatourbusinessiswell-positionedforrealizingprofitablegrowthopportunitiesinfiscal25andbeyond.

Eddie Engel: I'll now pass the call back to Eddie to take us through the last few slides of the presentation and make some final comments. Thank you, A.J.

AJ Eaker: I'll now pass the call back to Eddie to take us through the last few slides of the presentation and make some final comments.

Speaker Change: Finally, we have just started to leverage our textile takeback process at scale with thermal loop and our new repeat filament yarn powered by textile takeback.

AJ Eaker: I'llnowpassthecallbacktoEddietotakeusthroughthelastfewslidesofthepresentationandmakesomefinalcomments.

Ed Ingle: Thank you, A.J.

Ed Ingle: Let's now turn to slide 13 to discuss our forecast for the first quarter of fiscal 2025.

Eddie Engel: Let's now turn to slide 13 to discuss our forecast for the first quarter of fiscal 2025. As we look forward, we're having more positive conversations with our customers of other needs and destocking it clearly behind us and most of the industry, which will help as we anniversary some of the impacts of this unusual period. We look to you specifically at the first quarter. We expect to see our positive momentum push forward as we begin our new fiscal year.

Eddie Ingle: Thankyou,A.J.

Eddie Ingle: Thankyou,AJ.

Eddie Ingle: Let'snowturntoslide13todiscussourforecastforthefirstquarteroffiscal2025.

Speaker Change: And we have a pipeline of future textile takeback innovation opportunities that we will share with you over the next several quarters and years.

Ed Ingle: As we look forward, we're having more positive conversations with our customers of our needs and de-stocking it's clearly behind us and most of the industry, which will help as we anniversary some of the impacts of this unusual period.

Eddie Ingle: Aswelookforward,we'rehavingmorepositiveconversationswithourcustomersabouttheirneeds,andde-stockingisclearlybehindusandmostoftheindustry,whichwillhelpasweanalyzesomeoftheimpactsofthisunusualperiod.

Speaker Change: So if I had to say how we feel about the first half of 2025, it will show improvement versus prior year, but it'll be a gradual, slower comeback.

Speaker Change: And before I end, our remarks I want to note selectively.

Speaker Change: Then the second half should show a more dramatic comeback.

Ed Ingle: In looking specifically at the first quarter, we expect to see our positive momentum push forward as we begin our new fiscal year. More specifically for the quarter, the first quarter, which as a reminder is a starkly one of our slower quarters from a sales perspective due to seasonality, we are expecting the following. Net sales between $147 million and $153 million, which at the midpoint would be roughly a 10% top-line growth year reader.

Eddie Ingle: Inlookingspecificallyatthefirstquarter,weexpecttoseeourpositivemomentumpushforwardaswebeginournewfiscalyear.

Eddie Ingle: Lookingspecificallyatthefirstquarter,weexpecttoseeourpositivemomentumpushforwardaswebeginournewfiscalyear. Morespecificallyforthefirstquarter,which,asareminder,ishistoricallyoneofourslowerquartersfromasalesperspectiveduetoseasonality,weareexpectingthefollowing. Netsalesbetween$147millionand$153million,whichatthemidpointwouldberoughlya10%top-linegrowthyear-over-year.

Speaker Change: I want to personally thank the whole team again for all of their hard work.

Eddie Engel: More specifically for the quarter, the first quarter, which as a reminder is the starkly one of our slower quarters from a sales perspective, due to seasonality, we are expecting the following. Net sales between $147 million and $153 million, which at the midpoint would be roughly a 10% top-line growth year or year. We expect adjusted evidences range between $1 million and $3 million, a significant improvement over the last year is able to loss. And we also expect to continue to keep a disciplined eye on capital expenditures and bleed catpex for the quarter will come in between $3 million and $4 million.

Eddie Ingle: Morespecificallyforthefirstquarter,whichasareminder,ishistoricallyoneofourslowerquartersfromasalesperspectiveduetoseasonality,weareexpectingthefollowing. Netsalesbetween$147millionand$153million,whichatthemidpointwouldberoughlya10%top-linegrowthyear-over-year.

Speaker Change: With that we would now like to open the line for questions. Thank you operator.

Speaker Change: And I'd say we're feeling cautiously optimistic, as we look out over the new fiscal year, and we really believe that soon enough these customers that we have are going to have to start replenishing their inventories and are also going to have to start preparing for the spring selling season. And I believe those inventories right now are quite low, and they're below pre-COVID levels.

Ed Ingle: We expect adjusted EBITR range between $1 million and $3 million, a significant improvement over last year's EBITR loss, and we also expect to continue to keep a disciplined eye on capital expenditures and believe CapEx for the quarter will come in between $3 million and $4 million.

Speaker Change: If you would like to withdraw your question simply press the star one again.

Eddie Ingle: WeexpectadjustedEBITDAtorangebetween$1millionand$3million,asignificantimprovementoverlastyear'sEBITDAloss.

Eddie Ingle: WeexpectadjustedEBITDAtorangebetween$1millionand$3million,asignificantimprovementoverlastyear'sEBITDAloss. Andwealsoexpecttocontinuetokeepadisciplinedeyeoncapitalexpendituresandbelievecapexforthequarterwillcomeinbetween$3millionand$4million.

Eddie Ingle: Wealsoexpecttocontinuetokeepadisciplinedeyeoncapitalexpendituresandbelievecapexforthequarterwillcomeinbetween$3millionand$4million.

Again, Please press star one to join the queue.

Eddie Engel: Then in terms of our fiscal 25 outlook, I'd like to provide a little more context on slide 14. Our underlying momentum is rebuilding.

Ed Ingle: Then in terms of our fiscal 25 outlook, I'd like to provide a little more context on slide 14.

Eddie Ingle: Intermsofourfiscal2025outlook,I'dliketoprovidealittlemorecontextonslide14. Ourunderlyingmomentumisrebuilding,soinfiscal2025,webelievewe'llseeareturntomorenormalconditions,whichwillsupporttop-linegrowthinexcessof10%year-over-year.

Eddie Ingle: Thenintermsofourfiscal25outlook,I'dliketoprovidealittlemorecontextonslide14.

Speaker Change: And your first question comes from the line of Anthony lipid since Keith Your line is now open.

Ed Ingle: Our underlying momentum is rebuilding.

Eddie Ingle: Ourunderlyingmomentumisrebuilding. Soinfiscal2025,webelievewe'llseeareturntomorenormalconditions,whichwillsupporttop-linegrowthinexcessof10%year-over-year. Further,webelievetheproactivedecisionswehavemadetocontrolourcostsandstreamlineourbusinesswillcontinuetoshowupinstrongerprofitabilityresultsnextyear.

Speaker Change: So we're going to continue to manage costs very tightly during this period. We're going to preserve cash until all this opens back up.

Ed Ingle: So in fiscal 2025, we believe we'll see a return to more normal conditions which will support top-line growth and excess of 10% year-to-year.

Eddie Engel: So in fiscal 2025, we believe we'll see a return to more normal conditions which will support top-line growth and excess of 10% year-to-year. Further, we believe the proactive decisions we have made to control our costs and streamline our business will continue to show up in stronger profitability results next year. We expect EBIT to be positive in every quarter of the fiscal year and see a path to a significant increase in growth profit, growth margin and adjusted EBIT.

Speaker Change: Hey, good morning, guys. Thank you for taking the questions.

Speaker Change: And I think when it's all over, we'll be a better company than we were before all this.

Speaker Change: Certainly nice to see the improvement in sales and profitability during the quarter.

Speaker Change: So let me turn it over right now to Eddie Ingle, our CEO, and he'll take you through more of the important details of the quarter.

Eddie Engel: Lastly, we've budgeted to keep capital expenditures contained and we are projecting that we'll see capital expenditures range from $10 to $12 million for fiscal 2025.

Ed Ingle: Further, we believe the proactive decisions we have made to control our costs and streamline our business will continue to show up in stronger profitability results next, this year.

Speaker Change: As you pointed out the Brazil showed the most improvement from a top and bottom line perspective.

Eddie Ingle: Furtherwebelievetheproactivedecisionswehavemadetocontrolourcostsandstreamlineourbusinesswillcontinuetoshowupinstrongerprofitabilityresultsnextyear.

Speaker Change: Eddie?

Speaker Change: Just wondering what is your confidence level as far as being able to sustain that type of improvement going forward.

Ed Ingle: We expect EBITZ to be positive in every quarter of the fifth of the year and see a path to a significant increase in growth profit, growth margin and adjusted EBITZ.

Eddie Ingle: WeexpectEBITDAtobepositiveineveryquarterofthefiscalyearandseeapathtoasignificantincreaseingrossprofit,grossmargin,andadjustedEBITDA. Lastly,we'vebudgetedtokeepcapitalexpenditurescontained,andweareprojectingthatwe'llseecapitalexpendituresrangefrom$10to$12millionforfiscal2025.

Speaker Change: Thanks, Al.

Speaker Change: And specifically in Brazil.

Ed Ingle: Lastly, we budgeted to keep capital expenditures contained, and we are projecting that we'll see capital expenditures range from 10 to 12 million dollars for fiscal 2025.

Speaker Change #100: We actually feel very confident.

Speaker Change #101: Demand signals, we're getting we.

Speaker Change #102: <unk> run full throughout the fiscal year, there will be some margin pressure.

Speaker Change #102: As the raw materials inputs.

Eddie Engel: Moving on to slide 15, you can see that some of the key strategic initiative items were focused on to maintain a more momentum and expand our business.

Ed Ingle: Moving on to slide 15, you can see that some of the key strategic initiative items were focused on to maintain a momentum and expand our business.

Eddie Ingle: Movingontoslide15,youcanseethatsomeofthekeystrategicinitiativeitemswe'refocusedontomaintainamomentumandexpandourbusiness.

Eddie Ingle: Movingontoslide15,youcanseethatsomeofthekeystrategicinitiativeitemswe'refocusedontomaintainourmomentumandexpandourbusiness.

Speaker Change #102: Normalized and our.

Speaker Change #102: Catch you on margins kind of catch up with the new higher input costs, but for the most part we do expect to remain strong and have a.

Eddie Engel: While we're excited about our opportunities in fiscal 2025, I want to be clear that we're focused on pivoting to growth for the future, in our future. Despite the challenging conditions over the last year and a half, we've never stopped investing in our business. We've put new leaders in key areas to invigorate and position the business for sustainable, profitable growth. We also invested heavily in innovation as we talked about today as it's the engine that helps us grow our business globally.

Ed Ingle: While we're excited about our opportunities in fiscal 2025, I want to be clear that we're focused on pivoting to growth for the future.

Eddie Ingle: Whilewe'reexcitedaboutouropportunitiesinfiscal2025,Iwanttobeclearthatwe'refocusedonpivotingtogrowthfortheforeseeablefuture. Despitethechallengingconditionsoverthelastyearandahalf,we'veneverstoppedinvestinginourbusiness. Weputnewleadersinkeyareastoinvigorateandpositionthebusinessforsustainableprofitablegrowth.

Speaker Change #102: Much better EBIT performance in Brazil, this year versus last year.

Ed Ingle: Despite the challenging conditions over the last year and a half, we've never stopped investing in our business.

Speaker Change #102: And as Al just highlighted, we do believe that in most aspects of our business, Unify has finally begun to turn a corner, and the operating environment is beginning to get closer to returning to more normal levels.

Speaker Change #103: And over the past year plus, we've been working hard to reposition our business so as to be able to respond quickly to an uptick in customer demand and that the results of those efforts have already become apparent in our financials this quarter as we saw solid year-over-year revenue and volume growth and a significant improvement in our margins.

Speaker Change #103: Now, we are also continuing to see strong momentum across our segments, and we recently announced some exciting new product innovations which I will touch on in greater detail shortly.

Speaker Change #103: That's great to hear and just a follow up as far as the raw material costs.

Speaker Change #103: Turning now to slide four for an overview of the quarter, during the fourth quarter of fiscal 2024, we reported $157.5 million in consolidated net sales, which was up 4% year-over-year and 6% sequentially compared to the third quarter. This improvement in net sales was largely driven by our Brazil segment, which has been performing very well recently.

Speaker Change #103: In addition, our operations in China, have also been continuing to build momentum and contributed to our strong performance during the quarter.

Speaker Change #103: We are continuing to see the benefits of America's cost reset efforts, which is evident by the significant improvement in our gross margin and subdued operating expenses. We expect to see these efforts continue, through the next few quarters as well, although it's worth noting that some of these savings will be slightly offset by inflation. With that said, we still believe we have driven sustainable efficiencies, and cost discipline over the last year that our organization will continue to leverage into the future. Our sales transformation has also been progressing well, and we have continued to see the benefits of our transformation efforts and gross profit during the quarter experiencing a $6 million improvement on a sequential basis.

Ed Ingle: We put new leaders in key areas to emigrate and position the business for sustainable profitable growth. We also invested heavily in innovation as we talked about today as it's the engine that helps us grow our business globally.

Speaker Change #103: This gives us confidence that our operating profit, can continue to improve during fiscal 2025.

Eddie Ingle: We'vegotnewleadersinkeyareastoinvigorateandpositionthebusinessforsustainable,profitablegrowth.

Speaker Change #104: Are you seeing that in all regions or is this specifically to Brazil that you referenced.

Eddie Ingle: Wealsoinvestedheavilyininnovationaswetalkedabouttoday,asit'stheenginethathelpsusgrowourbusinessglobally.

Eddie Ingle: Wealsoinvestedheavilyininnovation,aswetalkedabouttoday,asit'stheenginethathelpsusgrowourbusinessglobally.

Speaker Change #105: It's specifically in Brazil due to the.

Ed Ingle: This is our belief that we have only scratched the surface of our potential and demand for sustainable solutions continues to be desired by our customers customers.

Eddie Engel: Is our belief that we have only scratched the surface of our potential and demand for sustainable solutions continues to be desired by our customers' customers. Our reprieve offerings continues to gain traction in terms of name recognition and assortment, and our Beyond a Power Initiative will help us further diversify our product portfolio by offering new avenues for innovation and growth. Finally, we have just started to leverage our checks on take-back process at scale with thermal loop and our new reprieve filament yarns powered by text on take-back. And we have applied to find a future text on take-back innovation opportunities that we will share with you over the next several quarters of years.

Speaker Change #106: The supply chain that we have most of the inputs come from Asia, and the freight costs Internet International.

Eddie Ingle: It'sourbeliefthatwe'veonlyscratchedthesurfaceofourpotential,anddemandforsustainablesolutionscontinuestobedesiredbyourcustomers'customers.

Eddie Ingle: Itisourbeliefthatwehaveonlyscratchedthesurfaceofourpotentialasdemandforsustainablesolutionscontinuestobedesiredbyourcustomers'customers.

Ed Ingle: Our reprieve offerings continues to gain traction in terms of name recognition and assortment, and our beyond a power initiative will help us further diversify our product portfolio by offering new avenues for innovation and growth.

Speaker Change #107: Container costs have risen significantly, which is giving us a pricing opportunity.

Eddie Ingle: Ourreprieveofferingscontinuetogaintractionintermsofnamerecognitionandassortment,andourBeyondthePowerinitiativeswillhelpusfurtherdiversifyourproductportfoliobyofferingnewavenuesforinnovationandgrowth.

Eddie Ingle: Ourreprieveofferingscontinuetogaintractionintermsofnamerecognitionandassortment.

Speaker Change #108: Understood, Okay, and then as far as the other.

Eddie Ingle: AndourBeyondthePowerinitiativeswillhelpusfurtherdiversifyourproductportfoliobyofferingnewavenuesforinnovationandgrowth.

The regions what are you seeing from a cost perspective for raw materials.

Ed Ingle: Finally, we have just started to leverage our checks on take-back process at scale with thermal loop and our new reprieve filament yarns powered by texts on take-back.

Speaker Change #108: Raw materials have been predominantly for the most part flat.

Eddie Ingle: Finally,wehavejuststartedtoleverageourtextiletake-backprocessatscalewithThermaloopandournewreprievefilamentyarnspoweredbyTextileTake-Back.

Eddie Ingle: Finally,wehavejuststartedtoleverageourtextiletake-backprocessatscalewithThermaloopandournewreprievefilamentyarnspoweredbytextiletake-back.

Speaker Change #109: So I'm not concerned about that.

Ed Ingle: We have applied kind of future checks on take-back innovation opportunities that we will share with you over the next several quarters of years.

Speaker Change #109: Gotcha.

Eddie Ingle: Wehaveapipelineoffuturetextiletake-backinnovationopportunitiesthatwewillsharewithyouoverthenextseveralquartersandyears. BeforeIendourremarks,Iwanttonote,collectively,we'vebeenthroughalotoverthelasttwoyears,andthisteam,theglobalteam,hasrisentothechallengetonotonlyhelpstreamlineourbusiness,butalsosetitupforlong-termsuccess.

Eddie Ingle: Andwehaveapipelineoffuturetextiletake-backinnovationopportunitiesthatwewillsharewithyouoverthenextseveralquartersofyears.

Speaker Change #109: Good to hear Okay, and then so in your conversations with your top customers in the Americas.

Speaker Change #109: I'll now provide a brief update on each of our business segments. In the Americas segments, while we are continuing to take market share, we did experience a bit of a slowdown due to some competitive shuffling and some customers pushing out orders for a few months.

Ed Ingle: Before I end our remarks, I want to note, collectively, we've been through a lot over the last few years, and this team, the global team has risen to the challenge to not only help stream on our business, but also set it up for long-term success.

Eddie Engel: And before I end our remarks, I want to note, collectively, we've been through a lot over the last few years. And this team, this team, the global team has risen to the challenge to not only help stream on our business, but also set it up for long-term success. And I want to personally thank the whole team again for all of their hard work.

Speaker Change #109: But we remain well positioned to take advantage, of further improvement in the region as our continued efforts on beyond apparel initiatives are helping to offset the weakness in apparel programs.

Speaker Change #109: Obviously your largest region.

Eddie Ingle: AndbeforeIendourremarks,Iwanttonote,collectively,we'vebeenthroughalotoverthelasttwoyears.

Speaker Change #109: Our Brazil segment, as mentioned earlier, was our strongest performing segment during, the fourth quarter. The strong performance was driven by our ability to take price in the region, operate at full, utilization and we have continued to benefit from the capture of additional market share following our main competitor who exited the region.

Speaker Change #110: What are you hearing from them as far as when we could see improved results.

Speaker Change #110: In our Asia segment, we are continuing to see signs of recovery and we believe that, you will see stronger performance in the region during fiscal 2025 despite a seasonally slower first quarter.

Eddie Ingle: Andthisteam,theglobalteam,hasrisentothechallengetonotonlyhelpstreamlineourbusiness,butalsosetitupforlong-termsuccess. AndIwanttopersonallythankthewholeteamagainforalloftheirhardwork.

Speaker Change #110: Turning now to slide 5 for an update on reprieve.

Speaker Change #111: Yes, when we look across.

Speaker Change #111: Our top customers in all reasons actually not just the apparel segments. They are.

Ed Ingle: I want to personally thank the whole team again for all of their hard work.

Eddie Ingle: AndIwanttopersonallythankthewholeteamagainforalloftheirhardwork.

Speaker Change #111: Telegraphing to us.

Operator: With that, we would now like to open the line for questions. Thank you. Operator. Thank you.

Operator: With that, we would now like to open the line for questions.

Speaker Change #111: Our fiscal Q1 the July through September period is going to be a little.

Operator: Withthat,wewouldnowliketoopenthelineforquestions.

Operator: Thank you, operator.

Operator: Thank you.

Operator: Thankyou.

Speaker Change #111: A little slower than they had expected but.

Operator: We will now begin the question and answer session.

Operator: Operator.

Operator: Operator?

Operator: Thankyou.

Operator: Wewillnowbeginthequestionandanswersession.

Speaker Change #111: They are.

Operator: If you have dialed it and would like to ask a question, please press star one on your telephone keypad to raise your hand and join the queue. If you would like to withdraw your question, simply press the star one again.

Speaker Change #112: I think almost two of them.

Operator: Ifyouhavedialedinandwouldliketoaskaquestion,pleasepressstar1onyourtelephonekeypadtoraiseyourhandandjointhequeue. Ifyouwouldliketowithdrawyourquestion,simplypressthestar1again.

Speaker Change #113: So all of them are expecting an uptick in October we have seen a significant improvement already in Central America, our business down there.

Speaker Change #113: During the fourth quarter, reprieve represented 34% of sales, a meaningful increase when compared, to the previous quarter. This improvement in sales was largely driven by the positive recovery trends that have, been seen in Central America as well as a moderate recovery in Asia.

Speaker Change #113: And maybe there.

Speaker Change #113: Leading indicator, but we do expect to see that business improve actually as we move the next through the next few months.

Operator: Andifyouarecalledupontoaskyourquestionandlisteningbyaloudspeakerinyourdevice,pleasepickupyourhandsetandensurethatyourphoneisnotonmutewhenaskingyourquestion.

Operator: Andifyouarecalledupontoaskyourquestionandlisteningvialoudspeakerinyourdevice,pleasepickupyourhandsetandensurethatyourphoneisnotonmutewhenaskingyourquestion.

Speaker Change #113: In the U S. Specifically there are some markets that we sell into that.

Operator: Again, please press star one to join the queue.

Operator: Again,pleasepressstar1tojointhequeue.

Speaker Change #113: Yeah.

Speaker Change #113: Traditionally they are slower in the summer and as we move into the late September early October period things will get back to.

Anthony Lebiedzinski: And your first question comes from the line of Anthony Libetsinsky. Your line is now open. Good morning and thank you for taking the questions. So certainly nice to see the improvement in sales and profitability during the quarter. As you pointed out, Brazil showed the most improvement from a top and bottom line perspective. Just wondering, what is your confidence level as far as being able to sustain that the type of improvement going forward?

Anthony Lebiedzinski: And your first question comes from the line of Anthony Lipitsinsky.

Anthony Lebiedzinski: AndyourfirstquestioncomesfromthelineofAnthonyLibitsinsky.

Speaker Change #113: More normalized higher run rates.

Anthony Lebiedzinski: Your line is now open.

Anthony Lebiedzinski: Yourlineisnowopen.

Anthony Lebiedzinski: Good morning and thank you for taking the questions.

Speaker Change #113: Generally speaking positive it's very different from what it was this time last year.

Anthony Lebiedzinski: Goodmorning,andthankyoufortakingthequestions.

Anthony Lebiedzinski: So certainly nice to see the improvement in sales and profitability during the quarter.

Got you okay. So it sounds just like normal seasonality as far as what's impacting that okay.

Anthony Lebiedzinski: Socertainlynicetoseetheimprovementinsalesandprofitabilityduringthequarter. Asyoupointedout,Brazilshowedthemostimprovementfromatopandbottomlineperspective.

Anthony Lebiedzinski: So,certainlynicetoseetheimprovementinsalesandprofitabilityduringthequarter.

Anthony Lebiedzinski: As you pointed out, Brazil showed the most improvement that from a top and bottom line perspective.

Eddie Ingle: Asyoupointedout,Brazilshowedthemostimprovementfromatopandbottomlineperspective.

Speaker Change #113: Okay, and then in terms of the new product offerings that you announced earlier this week with the lifestyle bowls filament yarn in Zorba loop.

Anthony Lebiedzinski: Just wondering, what is your confidence level as far as being able to sustain that the type of improvement going forward?

Eddie Ingle: Justwondering,whatisyourconfidencelevelasfarasbeingabletosustainthattypeofimprovementgoingforward?

Speaker Change #114: Just wondering like how.

Speaker Change #115: How meaningful could these new products be.

Anthony Lebiedzinski: That's significant Brazil. We actually feel very confident in the demand signals we're getting. We expected one full fiscal year. There will be some margin pressure as the role materials inputs normalize and are catching our margins going to catch up with a new higher input costs. But for the most part, we do expect to remain strong and have a much better either performance in Brazil this year versus last year. That's great to hear.

Anthony Lebiedzinski: That's a significant difference there.

Speaker Change #115: Looking ahead, we continue to believe that we will see an additional improvement in our, reprieve fiber business as we progress through fiscal 2025. This part of our business will be aided by the revenues we expect to see in calendar, 2025 as we begin to see commercial activity due mainly to our recent innovation efforts from some new reprieve product launches.

Ed Ingle: We actually feel very confident in the band signals we're getting.

Speaker Change #116: I know you talked about really calendar 'twenty five as far as seeing a benefit because of the system.

Eddie Ingle: SpecificallyinBrazil,weactuallyfeelveryconfidentinthedemandsignalswe'regetting.

Ed Ingle: We expect to run full fiscal year.

Speaker Change #117: Just wondering if you could.

Eddie Ingle: Weexpecttorunfullthroughoutthefiscalyear. Therewillbesomemarginpressureastherawmaterialsinputsnormalizeandourmarginskindofcatchupwiththenewhigherinputcosts.

Eddie Ingle: Weexpecttorunfullthroughoutthefiscalyear. Therewillbesomemarginpressureastherawmaterialsinputsnormalizeandourmarginscouldcatchupwiththenewhigherinputcosts.

Ed Ingle: There will be some margin pressure as the raw materials, inputs, normalize and are catching on margins, going to catch up with a new, higher input cost.

Speaker Change #118: If there's any way you could put a number or just give more details as to you know.

Speaker Change #119: What's the opportunity for those new products.

Speaker Change #120: In the marketing front for reprieve, we also achieved several exciting co-branding placements, this quarter, notably with Dolce Vita Footwear, part of the Steve Madden Group, incorporated reprieve into its products.

Speaker Change #120: Kate Spade featured reprieve in a pajama line for Costco Canada and Teva launched an iconic, version of their original universal sandal in a reloop version which contained reprieve powered by our own textile take-back program.

Speaker Change #120: Well I personally I'm incredibly excited about.

Ed Ingle: But for the most part, we do expect to remain strong and have a.., and much better either form in Brazil this year versus last year.

Speaker Change #121: What we've been able to bring to the markets. We've been we've been asked for several <unk>.

Eddie Ingle: Butforthemostpart,wedoexpecttoremainstrongandhaveadecentyearahead, muchbettere-performanceinBrazilthisyearversuslastyear.

Eddie Ingle: Butforthemostpart,wedoexpecttoremainstrongandhaveamuchbetterE-performanceinBrazilthisyearversuslastyear.

Speaker Change #121: As many of you are aware, if you've been listening to our calls of the last few quarters, our textile take-back program aims to increase circularity in the production of textiles by transforming fabric waste into a recycled resin that in turn is converted into a reprieve fiber. Through this process, we are not only leading the transition for a more circular supply, chain but we are also helping our customers such as the ones I mentioned earlier meet their sustainability goals.

Speaker Change #121: Several years now how do we make the supply chain more circular.

Speaker Change #121: Now, staying on the topic of textile take-back, I would like to spend some time reviewing, some of the new innovative reprieve products that we just announced earlier this week that are harnessing our textile take-back program and already have the ability to be offered at scale.

Anthony Lebiedzinski: That's great to hear.

Speaker Change #121: And on top of that there is <unk>.

Anthony Lebiedzinski: That'sgreattohear.

Anthony Lebiedzinski: And just to follow up as far as the role material costs, are you seeing that in all regions or is this specifically to Brazil that you reference to? It's specifically in Brazil due to the The supply chain that we have, most of the inputs come from Asia and the freight costs international container costs have risen significantly, which has given us a pricing opportunity. Understood. Okay. And then as far as in other regions, what are you seeing from a cost perspective for raw materials?

Ed Ingle: And just to follow up as far as the raw material costs, are you seeing that in all regions or is this specifically to Brazil that you reference to? It's specifically in Brazil due to the supply chain that we have.

Speaker Change #121: Pending legislation in the EU that will require inputs to recycled inputs content to be not just from from bottles, but also from from textiles. So we believe we have.

Eddie Ingle: Andjusttofollowupasfarastherawmaterialcosts,areyouseeingthatinallregionsoristhisspecificallytoBrazilthatyoureferencedto? It'sspecificallyinBrazilduetothesupplychainthatwehave.

Eddie Ingle: Andjusttofollowupasfarastherawmaterialcosts,areyouseeingthatinallregions,oristhisspecificallytoBrazilthatyoureferencedto? It'sspecificallyinBrazilduetothe...

Speaker Change #122: We've hit the right notes with a 50% comp.

Ed Ingle: Most of the inputs come from Asia and the freight costs, the international container costs have risen significantly, which has given us a pricing opportunity.

Speaker Change #123: Content of textile takeback, but 100% recycled we believe based on the messaging we've been getting from the.

Eddie Ingle: MostoftheinputscomefromAsiaandthefreightcosts,theinternationalcontainercostshaverisensignificantly,whichhasgivenusapricingopportunity.

Eddie Ingle: Thesupplychainthatwehave,mostoftheinputscomefromAsiaandthefreightcosts,theinternationalcontainercostshaverisensignificantly,whichhasgivenusapricingopportunity.

Speaker Change #123: The brands that we are right on.

Speaker Change #123: Sweet spots for them to be able to communicate I've actually spent time personally talking to brands in Europe and in the U S and from based on their reaction.

Anthony Lebiedzinski: Understood.

Anthony Lebiedzinski: Okay.

Anthony Lebiedzinski: Andthenasfarasinotherregions,whatareyouseeingfromacostperspectiveforrawmaterials?

Anthony Lebiedzinski: Andthenasfaras,youknow,inotherregions,whatareyouseeingfromacostperspectiveforrawmaterials?

Ed Ingle: And then as far as in other regions, what are you seeing from a cost perspective for raw materials?

Anthony Lebiedzinski: Raw materials have been predominantly for the most part flat. Got it. Got you. Let's get to here. Okay. And then, you know, so in your conversations with your top customers in the Americas, obviously your largest region, what are you hearing from them as far as when we could see improved results? Well, when we look across our top customers in all of these is actually not just the apparel segment. They are telegraphing to us that our fiscal Q1, the July through September period is going to be a little slower than they had expected, but they are, I think, almost to all of them are expecting an uptick in October.

Speaker Change #123: And the reaction is different depending on the brand but based on.

Eddie Ingle: Rawmaterialshavebeenpredominantly,forthemostpart,flat.

Speaker Change #123: The some reactions of all of these brands and retailers.

Ed Ingle: Raw materials have been predominantly for the most part flat.

Anthony Lebiedzinski: Got it.

Anthony Lebiedzinski: Gotit.

Speaker Change #123: We think we've.

Anthony Lebiedzinski: Okay.

Anthony Lebiedzinski: I'mnotconcernedaboutthatarea.

Speaker Change #124: He doesn't have a nice balance of circularity and sustainability because some customers are based on our focus on carbon reduction and some customers are based on fossil fuel consumption depletion.

Anthony Lebiedzinski: That's good to hear.

Anthony Lebiedzinski: Gotyou.

Anthony Lebiedzinski: Gotcha.

Anthony Lebiedzinski: That'sgoodtohear.

Anthony Lebiedzinski: Okay.

Anthony Lebiedzinski: Andthen,youknow,soinyourconversationswithyourtopcustomersintheAmericas,obviouslyyourlargestregion,whatareyouhearingfromthemasfaraswhenwecouldseeimprovedresults?

Eddie Ingle: Andthen,youknow,soinyourconversationswithyourtopcustomersintheAmericas,obviouslyyourlargestregion,youknow,whatareyouhearingfromthemasfaraswhenwecouldseeimprovedresults?

Speaker Change #124: And this provides the answers to both.

Anthony Lebiedzinski: Okay.

Speaker Change #124: And I think what's really exciting Anthony.

Eddie Ingle: Whenwelookacrossourtopcustomersinallregions,actually,notjusttheapparelsegment,theyaretelegraphingtousthatourfiscalQ1,youknow,theJulythroughSeptemberperiodisgoingtobealittleslowerthantheyhadexpected,buttheyare,IthinkalmostallofthemareexpectinganuptickinOctober.

Eddie Ingle: Sowhenwelookacrossourtopcustomersinallregions,actually,notjusttheapparelsegment,theyaretelegraphingtousthatourfiscalQ1,youknow,theJulythroughSeptemberperiodisgoingtobealittleslowerthantheyhadexpected,buttheyare,Ithinkalmosttoa,allofthemareexpectinganuptickinOctober.

Speaker Change #125: The fact that one of these products is a new product line for us installation and it allows us to call directly.

Anthony: On the brands and we can get specced in.

Speaker Change #126: As a solution for providing a recycled content product.

Speaker Change #127: Gotcha, Yeah that sounds very good so as far as.

Speaker Change #128: I know, it's hard to say for sure probably as far as the timing of this pending legislation, but I mean as far as what you know what.

Anthony Lebiedzinski: And then you know, so in your conversations with your top customers in the Americas, obviously your largest region, what are you hearing from them as far as when we could see improved results?

Anthony Lebiedzinski: We have seen a significant improvement already in Central America, our business down there, and maybe they're a leading indicator. But we do expect to see that business improve actually as we move through the next few months. In the U.S., specifically, there are some markets that we sell into that, you know, traditionally they are slower in the summer and as we move into the late September early October period, things will get back to an or more normalized higher run rate.

Eddie Ingle: WehaveseenasignificantimprovementalreadyinCentralAmerica,ourbusinessdownthere,andmaybethey'realeadingindicator,butwedoexpecttoseethatbusinessimproveaswemovethroughthenextfewmonths.

Eddie Ingle: WehaveseenasignificantimprovementalreadyinCentralAmerica,ourbusinessdownthere,andmaybethey'realeadingindicator,butwedoexpecttoseethatbusinessimproveactuallyaswemovethroughthenextfewmonths.

What's the earliest you.

Anthony Lebiedzinski: But they're generally speaking positive. It's very different from what it was this time last year. Gotcha. Okay. So it sounds just like normal seasonality as far as what's impacting that. Okay. And then, you know, in terms of the new product offerings that you announced earlier this week, you know, with the white, the high above filament yarn and throw up a loop, just wondering how meaningful could these new products be? You know, I know you talked about really, you know, calendar 25 as far as seeing a benefit.

Speaker Change #129: Think you could actually see that.

Speaker Change #129: Going through.

Ed Ingle: When we look across our top customers in all regions, actually not just the apparel segment, they are telegraphing to us that our fiscal Q1, the July through September period.

Speaker Change #129: I think that that could be meaningful for you guys.

Eddie Ingle: IntheUS,specifically,therearesomemarketsthatwesellintothat,youknow,traditionallytheyareslowerinthesummer,andaswemoveintothelateSeptember,earlyOctoberperiod,thingswillgetbacktoamorenormalized,higherrunrate. Butthey're,generallyspeaking,positive.

Eddie Ingle: IntheU.S, specifically,therearesomemarketsthatwesellintothat,youknow,traditionallytheyareslowerinthesummer,andaswemoveintothelateSeptember,earlyOctoberperiod,thingswillgetbacktoamorenormalized,higherrunrate,butthey'regenerallyspeakingpositive.

Speaker Change #130: I think we will.

In the second half of this fiscal year. The January through July period, we will start to see we'll be sampling now, but we'll start to see meaningful.

Speaker Change #130: Production orders and really at the beginning of our fiscal 'twenty six.

Speaker Change #130: 12 months 10 months from now.

Anthony Lebiedzinski: It'sverydifferentfromwhatitwasthistimelastyear.

Speaker Change #130: It'll be in our budget.

Anthony Lebiedzinski: Gotcha,okay,soitsoundsjustlikenormalseasonalityasfaraswhat'simpactingthat,okay.

Anthony Lebiedzinski: Gotcha.

Anthony Lebiedzinski: Okay.

Speaker Change #130: It'll be visible from a revenue perspective and margin perspective.

Anthony Lebiedzinski: Soitsoundsjustlikenormalseasonalityasfaraswhat'simpactingthat.

Anthony Lebiedzinski: But it's just just wondering if you could, you know, if there was any way you could put a number or just give more details as to, you know, what's the opportunity for those new products? Well, personally, I'm incredibly excited about what we've been able to bring to the market. You know, we've been asked for several years now how do we make this supply chain more circular? And on top of that, there's pending legislation in the EU that will require inputs to recycle inputs, content to be not just from bottles, but also from textiles.

Anthony Lebiedzinski: Okay.

Speaker Change #130: But we are we are planning for the next six months to fulfill the sampling needs of all the customers. So they can figure out how and when to put it into their into their programs.

Anthony Lebiedzinski: Okay,andthen,youknow,intermsofthenewproductofferingsthatyouannouncedearlierthisweek,youknow,withthewhitedyeablefilamentyarnandTherbaloop,justwondering,like,youknow,howmeaningfulcouldthesenewproductsbe?

Anthony Lebiedzinski: Andthen,youknow,intermsofthenewproductofferingsthatyouannouncedearlierthisweek,youknow,withthewhitedyeablefilamentyarnandTherbaloop,justwondering,youknow,howmeaningfulcouldthesenewproductsbe?

Speaker Change #131: Gotcha, Okay, and then as far as the beyond the apparel initiative I know that's something you guys have talked about.

Eddie Ingle: Youknow,Iknowyoutalkedaboutreally,youknow,calendar25asfarasseeingabenefit,butjustwonderingifyoucould,youknow,ifthere'sanywayyoucouldputanumberorjustgivemoredetailsasto,youknow,like,what'stheopportunityforthosenewproducts?

Speaker Change #131: Certainly in the past as far as you know.

Speaker Change #131: Thinking about this going forward here.

Speaker Change #132: Are you actually.

Speaker Change #133: Gaining some new customers.

Eddie Ingle: Well,I,personally,I'mincrediblyexcitedaboutwhatwe'vebeenabletobringtothemarkets.

Speaker Change #134: We're actually seeing more purchase orders come in.

Speaker Change #135: Just maybe if you could just provide a little bit more detail on the beyond apparel initiatives that'll be helpful.

Eddie Ingle: Youknow,we'vebeenaskedforseveralyearsnow,howdowemakethissupplychainmorecircular? Andontopofthat,there'spendinglegislationintheEUthatwillrequireinputstorecycleinputcontenttobenotjustfrombottles,butalsofromtextiles.

Speaker Change #135: Yeah.

Speaker Change #135: We have talked about a lot in our calls.

Speaker Change #136: The last.

Speaker Change #136: 12 to 18 months, we are seeing traction, we're seeing commercial orders and I'm.

Anthony Lebiedzinski: So we believe we've hit the right note with a 50% content of textile tape back, but 100% recycled. We believe, based on the messaging we've been getting from the brands that we are right on the sweet spots for them to be able to communicate. I've actually spent time personally talking to brands in the US and from based on their reaction, and their reaction is different depending on the brand, but based on the The summary actions of all these brands and retailers, we think we've hit on a nice balance of circularity and sustainability.

Speaker Change #136: I believe by the.

Eddie Ingle: Sowebelievewe'vehittherightnotewitha50%contentoftextiletapeback,but100%recycles.

Eddie Ingle: Sowebelievewe'vehittherightnotewitha50%contentoftextiletakeback,but100%recycles.

Speaker Change #136: And the next call, we'll be able to outline some of the revenue impacts that we're going to see from these initiatives right now I cant give specific details.

Eddie Ingle: Webelieve,basedonthemessagingwe'vebeengettingfromthebrandsthatwearerightonthesweetspotsforthemtobeabletocommunicate.

Eddie Ingle: Webelievebasedonthemessagingwe'vebeengettingfromthebrandsthatwearerightonthesweetspotsforthemtobeabletocommunicate.

But I am very confident that by the October call, we'll be able to outline.

Speaker Change #136: The progress we've made and what that means to our business.

Eddie Ingle: I'veactuallyspenttimepersonallytalkingtobrandsinEuropeandintheU.S, andbasedontheirreaction,andthereactionisdifferentdependingonthebrand,butbasedonsomereactionsofallthesebrandsandretailers,wethinkwe'vehitonanicebalanceofcircularityandsustainability.

Eddie Ingle: I'veactuallyspenttimepersonallytalkingtobrandsinEuropeandintheU.S, andfrombasedontheirreactionandthereactionisdifferentdependingonthebrand,butbasedonthe.

Speaker Change #136: We are.

Speaker Change #136: We are well on our way.

Speaker Change #136: Making it part of our business. Thanks.

Speaker Change #136: Thanks.

Speaker Change #137: This is al I, just wanted to add something to the insurance I'd say that I'd say that.

Eddie Ingle: There'ssomereactionsofallthesebrandsandretailers.

Speaker Change #138: In fiscal 2026, we'll see an impact and probably a little bit in the you know the end of this fiscal year, but the thing thats exciting as well.

Eddie Ingle: Wethinkwe'vehitonanicebalanceofcircularityandsustainability.

Anthony Lebiedzinski: Because some customers are focused on carbon reduction, some customers are based on fossil fuel consumption depletion and this provides the answers to both. So I think what's really exciting, Anthony, is the fact that one of these products is a new product line for us, insulation, and it allows us to call directly on the brands and we can get spec'd in as a solution for providing a resharking content product. Gotcha, yeah, that sounds very good.

Speaker Change #138: First, on slide six, you'll see some highlights of our new white reprieve filament yarn powered, by our textile take-back process that we will be showcasing at the Intertextile Shanghai, Apparel Fabrics Convention next week.

Speaker Change #138: The new form of reprieve filament yarn is made of 50% textile take-back waste and 50% recycled bottles which is the world's first 50% textile waste filament yarn with a tracer and U-Trust verification. The new offering is white, dyeable, and available at scale now.

Eddie Ingle: Becausesomecustomersarefocusedoncarbonreduction,somecustomersarebasedonfossilfuelconsumptiondepletion,andthisprovidestheanswerstoboth.

Speaker Change #139: On slide seven, for our second new product announcement, you can see that we've launched, a totally new product offering but still based on polyester fiber called Thermaloop which is an installation solution that is designed for home goods, outdoor gear applications, things like sleeping bags and apparel such as winter jackets.

Speaker Change #139: What makes Thermaloup so unique is that 50% of the fibers used to make it are from textile waste, and we are launching this new product offering in black.

Speaker Change #139: But products that he's talking about the new ones with textile takeback in the installation they have stronger significantly stronger margins in our base business and then if you go to the beyond apparel I know you've been talking about it for a long time, but one of the new pieces of information as to get qualified for some of these customers that boy. It takes a long time.

Speaker Change #139: The Thermaloup products were launched as 100% recycled content.

Speaker Change #139: We believe we will begin to see some revenues and volume benefits, from our new filament yarn in the second half of fiscal 2025, and we'll begin to see the growth benefits from the Thermaloup throughout fiscal 2026, supporting additional growth moving forward.

Speaker Change #139: What is even more exciting is that the Thermaloup padding product is the first of its kind, to have a reprieve recycled polyester low melt fiber, which allows our customers to provide a wider range of sustainable offerings.

Speaker Change #139: Both Thermaloup and our new form of reprieve filament yarn, will be sampled by our customers throughout fiscal 2025.

Speaker Change #139: Before I wrap up, I would also like to note that our beyond apparel innovations are continuing to grow, and with conversations progressing with a number of customers in key end markets, and we are hopeful that we'll be able to further discuss these in the near future.

Eddie Ingle: AndIthinkwhat'sreallyexciting,Anthony,isthefactthatoneoftheseproductsisanewproductlineforus,insulation,anditallowsustocalldirectlyonthebrandsandwecangetspec'dinasasolutionforprovidingarestockingcontentproduct.

Eddie Ingle: Ithinkwhat'sreallyexciting,Anthony,isthefactthatoneoftheseproductsisanewproductlineforus,insulation,anditallowsustocalldirectlyonthebrandsandwecangetspec'dinasasolutionforprovidingarecyclingcontentproduct.

Speaker Change #139: For qualifying the quality of your product the timing and to get contracts signed but those are happening and that's another one that has a significantly better gross profit margins than the base business that we're into today. So I think going forward will be less dependent we're still going to sell apparel.

Anthony Lebiedzinski: Gotcha,yeah,thatsoundsverygood.

Anthony Lebiedzinski: Gotcha.

Anthony Lebiedzinski: So as far as I know it's hard to say for sure, probably as far as the timing of this pending legislation, but I mean as far as what you know, what's the earliest that you think that you could actually see that going through, I think that could be meaningful to you guys. I think we'll, in the second half of this fiscal year, the January through July period, we'll start to see, we'll be sampling now, but we'll start to see meaningful production orders and really at the beginning of our fiscal 26, 12 months and now, 10 months and now, it'll be in our budget and it'll be visible from a revenue perspective and margin perspective.

Anthony Lebiedzinski: Yeah,thatsoundsverygood.

Anthony Lebiedzinski: Soasfaras,Iknowit'shardtosayforsure,probablyasfarasthetimingofthispendinglegislation,butImean,asfaraswhatyouknow,what'stheearliestthatyouthinkthatyoucouldactuallyseethatgoingthrough?

Speaker Change #139: In the apparel business, but it will be less dependent on it.

This new textile takeback is a real boost.

Speaker Change #139: In the environmental sustainability story, so I wish these we're going to show up this quarter, they won't but they will be probably by the end of the fiscal year.

Anthony Lebiedzinski: But we are planning for the next six months to fulfill the sampling needs of all the customers so they can figure out how and when to put it into their programs. Gotcha, good. Okay, and then as far as the beyond the parallel initiative, I know that's something you guys have talked about, certainly in the past, as far as, thinking about this going forward here, are you actually gaining some new customers? Are you actually seeing more purchase orders to come in?

Eddie Ingle: BecauseIthinkthatcouldbemeaningfultoyouguys.

Eddie Ingle: Ithinkinthesecondhalfofthisfiscalyear,theJanuarythroughJulyperiod,we'llstarttosee,we'llbesamplingnow,butwe'llstarttoseemeaningfulproductionordersandreallyatthebeginningofourfiscal26,12monthsfromnow,10monthsfromnow,it'llbeinourbudgetandit'llbevisiblefromarevenueperspectiveandmarginperspective.

Speaker Change #139: Okay.

Speaker Change #140: Great to hear and I appreciate the comprehensive answer so I guess my my last question just a follow up as far as the margin differential anyway, you guys could quantify or give some more additional color as far as what the margin difference do you think will be for the new products versus the <unk>.

Speaker Change #140: With that, I would now like to pass the call over to AJ to discuss our financial results for the quarter.

Speaker Change #141: Our legacy products.

Eddie Ingle: Ithinkwe'll,inthesecondhalfofthisfiscalyear,theJanuarythroughJulyperiod,we'llstarttosee,we'llbesamplingnow,butwe'llstarttoseemeaningfulproductionorders.

Eddie Ingle: Butweareplanningforthenextsixmonthstofulfillthesamplingneedsofallthecustomerssotheycanfigureouthowandwhentoputitintotheirprograms.

J: Sure Anthony it's a J thanks for the questions and thanks for joining us this morning.

J: Thank you, Eddie.

J: As both Al and Eddie noted, we've continued to make great strides towards improving our business, and we are well positioned to pivot to growth and stronger profitability as we move forward. Our focus has remained on keeping our variable expenses across both production, and administrative functions low, and we've already begun to see a sustainable reduction in those expenses. As we've previously noted, we plan to reinvest these cost savings, and increase profits in the key areas of our business that will drive innovation and margin expansion, such as the two new reprieve fiber products that Eddie just discussed.

Speaker Change #142: In general we're seeing that as.

Speaker Change #143: In general double what we see from our base business.

Anthony Lebiedzinski: Maybe if you could just provide a little bit more detail on the beyond the parallel initiative, that'll be helpful. Yeah, we had talked about beyond the parallel a lot in our calls, really last 12 to 18 months. We are seeing traction, we are seeing commercial orders, and I believe by the, in the next call, we'll be able to outline some of the revenue impacts that we're going to see from these initiatives.

Speaker Change #143: Turning now to our financial results, on slide 8, you'll see our consolidated financial highlights for the quarter. Consolidated net sales for the quarter were $157.5 million, up 6% sequentially versus the third quarter, or 4% year over year, driven by our beneficial pricing actions, continued market share gains, and some demand normalization in conjunction with improvements from our profitability improvement plan continuing to materialize.

Anthony Lebiedzinski: Gotcha.

Speaker Change #143: This greater performance also led to our gross profit seeing an improvement of more than 100% sequentially, marking our third consecutive quarter of gross profit improvement.

Anthony Lebiedzinski: Good.

Anthony Lebiedzinski: Okay.

Speaker Change #144: Certainly the base business is constrained, especially in the Americas right now with fixed cost absorption.

Speaker Change #144: Turning to slide 9, in the Americas segment, net sales were sequentially flat and down 4% year over year, which, as Eddie noted, was primarily driven by a slowdown in spending and customers pushing out a few orders. However, with that said, the Americas segment did experience a significant gross profit improvement, which was driven by improved productivity in the region following holiday impacts in the third quarter of fiscal 24.

Speaker Change #144: Slide 10 displays our Brazil segment highlights, which experienced net sales growth of 9% during the quarter, on a sequential basis and almost 19% year over year. Our Brazil segment has continued to benefit from our ability to take price in the region, operate at full utilization, and the capture of additional market share.

Speaker Change #144: On slide 11, the Asia segment saw net sales growth of 21% sequentially and over 17% year over year, driven by higher sales volumes in the period and improved market share.

Speaker Change #144: As Asia continues to recover, we remain well-positioned in the region, and our portfolio expansion will help drive improved performance for the segment in the future.

Speaker Change #144: Before passing the call back to Eddie for some closing commentary, I'll now briefly discuss our balance sheet on slide 12.

Speaker Change #144: During the quarter, we continue to focus on working capital management and cost controls, allowing for a better free cash flow situation in the quarter and year-to-date periods. And positioning us to remain focused on debt repayment. CapEx spend continues to be focused on maintenance levels and remains significantly lower than the prior two fiscal years, with fiscal 2024 coming in at $11 million, a multi-year low attributed to the diligence of our various teams and operations.

Speaker Change #144: And not getting the full volumes and that we've been chasing for several months now so those margins are naturally suppressed, but you've seen those in the past in the low double digits somewhere between eight and 12, 15% that we've been able to perform and to better years.

Speaker Change #144: With our improved financial performance and our focus on managing our balance sheet, we remain confident that our business is well-positioned for realizing profitable growth opportunities in fiscal 25 and beyond.

Anthony Lebiedzinski: AndasfarastheBeyondtheParallelinitiative,Iknowthat'ssomethingyouguyshavetalkedaboutcertainlyinthepast.

Speaker Change #144: So with these new products as they have some innovation underlying those and we're able to really key in on what customer customers need with the new products, we're able to see double double the margin there in many cases.

Eddie Ingle: Asfarasthinkingaboutthisgoingforwardhere,areyouactuallygainingsomenewcustomers?

Eddie Ingle: Areyouactuallyseeingmorepurchaseorderscomein?

Speaker Change #145: Alright, well, that's great to hear and look forward to seeing the progress that you guys will be making this year. So thank you very much and best of luck.

Speaker Change #145: I'll now pass the call back to Eddie to take us through the last few slides of the presentation and make some final comments.

Speaker Change #145: Thank you, AJ.

Speaker Change #145: Let's now turn to slide 13 to discuss our forecast for the first quarter of fiscal 2025.

Speaker Change #145: As we look forward, we're having more positive conversations with our customers about their needs, and de-stocking is clearly behind us and most of the industry, which will help as we analyze some of the impacts of this unusual period.

Speaker Change #145: Looking specifically at the first quarter, we expect to see our positive momentum push forward as we begin our new fiscal year. More specifically for the first quarter, which, as a reminder, is historically one of our slower quarters from a sales perspective due to seasonality, we are expecting the following. Net sales between $147 million and $153 million, which at the midpoint would be roughly a 10% top-line growth year-over-year.

Speaker Change #145: We expect adjusted EBITDA to range between $1 million and $3 million, a significant improvement over last year's EBITDA loss. And we also expect to continue to keep a disciplined eye on capital expenditures and believe capex for the quarter will come in between $3 million and $4 million.

Speaker Change #146: Then in terms of our fiscal 25 outlook, I'd like to provide a little more context on slide 14.

Speaker Change #146: Our underlying momentum is rebuilding.

Speaker Change #146: Excellent. Thank you Anthony Thank you Anthony.

Speaker Change #146: So in fiscal 2025, we believe we'll see a return to more normal conditions, which will support top-line growth in excess of 10% year-over-year.

Speaker Change #146: Further, we believe the proactive decisions we have made to control our costs and streamline our business will continue to show up in stronger profitability results next year.

Ed Ingle: It's going to be a little slower than they had expected, but they are I think almost to all of them are expecting an uptick in October.

Anthony Lebiedzinski: Right now, I can't give specific details, but I'm very confident that by, in the October call, we'll be able to outline the progress we've made and what that means to our business. But we are well on our way to making it part of our business. Thanks. Definitely, this is now. I just wanted to add something to the at least insurance. I'd say that in fiscal 2026, we'll see an impact. And probably a little bit in the end of this fiscal year, but the thing that's exciting is the products that Eddie's talking about, the new ones with textile take-pack and the insulation, they have significantly stronger margins in our base business.

Speaker Change #147: We expect EBITDA to be positive in every quarter of the fiscal year and see a path to a significant increase in gross profit, gross margin, and adjusted EBITDA. Lastly, we've budgeted to keep capital expenditures contained, and we are projecting that we'll see capital expenditures range from $10 million to $12 million for fiscal 2025.

Speaker Change #147: Moving on to slide 15, you can see that some of the key strategic initiative items we're focused on to maintain our momentum and expand our business.

Speaker Change #147: With that, we would now like to open the line for questions.

Speaker Change #147: Again, if you would like to ask a question. Please press star one to join the queue.

Speaker Change #147: While we're excited about our opportunities in fiscal 2025, I want to be clear that we're focused on pivoting to growth for the foreseeable future. Despite the challenging conditions over the last year and a half, we've never stopped investing in our business. We've got new leaders in key areas, to invigorate and position the business for sustainable, profitable growth.

Speaker Change #147: Thank you.

Speaker Change #147: We also invested heavily in innovation, as we talked about today, as it's the engine that helps us grow our business globally.

Speaker Change #147: Operator?

Speaker Change #147: It is our belief that we have only scratched the surface of our potential, as demand for sustainable solutions continues to be desired by our customers' customers.

Speaker Change #147: Thank you.

Speaker Change #147: Our reprieve offerings continue to gain traction, in terms of name recognition and assortment.

Speaker Change #147: We will now begin the question and answer session.

Speaker Change #147: And our Beyond the Power initiatives will help us further diversify our product portfolio, by offering new avenues for innovation and growth.

Speaker Change #147: If you have dialed in and would like to ask a question, please press star 1 on your telephone keypad to raise your hand and join the queue.

Speaker Change #147: Finally, we have just started to leverage our textile take-back process at scale, with Thermaloop and our new reprieve filament yarns powered by textile take-back.

Speaker Change #147: If you would like to withdraw your question, simply press the star 1 again.

Speaker Change #147: And we have a pipeline of future textile take-back innovation opportunities, that we will share with you over the next several quarters of years.

Speaker Change #147: And if you are called upon to ask your question and listening via loudspeaker in your device, please pick up your handset and ensure that your phone is not on mute when asking your question.

Speaker Change #147: Okay.

Speaker Change #147: And before I end our remarks, I want to note, collectively, we've been through a lot over the last two years.

Speaker Change #147: Again, please press star 1 to join the queue.

Speaker Change #147: And this team, the global team, has risen to the challenge, to not only help streamline our business, but also set it up for long-term success.

Speaker Change #147: And your first question comes from the line of Anthony Libitsinsky.

Speaker Change #147: Certainly the base business is constrained, especially in the Americas right now with fixed cost absorption and not getting the full volumes in that we've, been chasing for several months now.

Ed Ingle: We have seen a significant improvement already in Central America, our business down there, and maybe they're a leading indicator. But we do expect to see that business improve actually as we move through the next few months.

Speaker Change #147: And I want to personally thank the whole team again for all of their hard work.

Speaker Change #147: Your line is now open.

And that concludes our Q&A session and today's call.

Speaker Change #147: So those margins are naturally suppressed, but you've seen those in the past in the low double digits, somewhere between 8, 12, 15 percent that we've been able to perform in the better years.

Speaker Change #147: Good morning, and thank you for taking the questions.

Speaker Change #147: So with these new products, as they have some innovation underlying those and we're able to really key in on what customers need with the new products, we're able to see double the margin there in many cases.

Speaker Change #147: So, certainly nice to see the improvement in sales and profitability during the quarter.

Speaker Change #147: All right, well, that's great to hear, and I look forward to seeing the progress that you guys will be making this year.

Speaker Change #148: As you pointed out, Brazil showed the most improvement from a top and bottom line perspective.

Speaker Change #148: Thank you, everyone, for joining.

Speaker Change #148: So thank you very much and best of luck.

Speaker Change #148: Just wondering, what is your confidence level as far as being able to sustain that type of improvement going forward?

Speaker Change #148: You may now disconnect.

Speaker Change #148: Thank you.

Speaker Change #148: Thank you everyone for joining you may now disconnect.

Speaker Change #148: Specifically in Brazil, we actually feel very confident in the demand signals we're getting.

Speaker Change #148: Excellent.

Speaker Change #148: We expect to run full throughout the fiscal year.

Speaker Change #148: Thank you, Anthony.

Speaker Change #148: There will be some margin pressure as the raw materials inputs normalize, and our margins could catch up with the new higher input costs.

Speaker Change #148: Thank you, Anthony.

Ed Ingle: In the US, specifically, there are some markets that we sell into that traditionally they are slower in the summer and as you move into the late September, early October period, things will get back to an or a more normalized higher run rate.

Speaker Change #148: But for the most part, we do expect to remain strong and have a much better E-performance in Brazil this year versus last year.

Speaker Change #148: Again, if you would like to ask a question, please press star 1 to join the queue.

Speaker Change #148: That's great to hear.

Speaker Change #148: And that concludes our Q&A session and today's call.

Speaker Change #148: And just to follow up as far as the raw material costs, are you seeing that in all regions, or is this specifically to Brazil that you referenced to? It's specifically in Brazil due to the...

Speaker Change #148: The supply chain that we have, most of the inputs come from Asia and the freight costs, the international container costs have risen significantly, which has given us a pricing opportunity.

Speaker Change #148: Understood.

Speaker Change #148: Okay.

Speaker Change #148: And then as far as, you know, in other regions, what are you seeing from a cost perspective, for raw materials?

Eddie Ingle: Andreally,atthebeginningofourfiscal26,12monthsfromnow,10monthsfromnow,it'llbeinourbudgetandit'llbevisiblefromarevenueperspectiveandmarginperspective.

Speaker Change #148: Raw materials have been predominantly, for the most part, flat.

Speaker Change #148: Got it.

Speaker Change #148: I'm not concerned about that area.

Speaker Change #148: Gotcha.

Speaker Change #148: That's good to hear.

Speaker Change #148: Okay.

Speaker Change #148: And then, you know, so in your conversations with your top customers in the Americas, obviously, your largest region, you know, what are you hearing from them as far as when we could see improved results?

Ed Ingle: But they're generally speaking positive.

Speaker Change #148: So when we look across our top customers in all regions, actually, not just the apparel, segment, they are telegraphing to us that our fiscal Q1, you know, the July through September period is going to be a little slower than they had expected, but they are, I think, almost to a, all of them are expecting an uptick in October.

Speaker Change #148: We have seen a significant improvement already in Central America, our business down there, and maybe they're a leading indicator, but we do expect to see that business improve actually as we move through the next few months.

Speaker Change #148: In the U.S. specifically, there are some markets that we sell into that, you know, traditionally, they are slower in the summer, and as we move into the late September, early October period, things will get back to a more normalized, higher run rate, but they're generally speaking positive.

Eddie Ingle: Butweareplanningforthenextsixmonthstofulfillthesamplingneedsofallthecustomerssotheycanfigureouthowandwhentoputitintotheirprograms.

Speaker Change #148: It's very different from what it was this time last year.

Speaker Change #148: Gotcha.

Speaker Change #148: Okay.

Speaker Change #148: So it sounds just like normal seasonality as far as what's impacting that.

Speaker Change #148: Okay.

Speaker Change #148: And then, you know, in terms of the new product offerings that you announced earlier this, week, you know, with the white dyeable filament yarn and Therbaloop, just wondering, you know, how meaningful could these new products be?

Speaker Change #148: You know, I know you talked about really, you know, calendar 25 as far as seeing a benefit, but just wondering if you could, you know, if there's any way you could put a number or just give more details as to, you know, like, what's the opportunity for those new products?

Speaker Change #148: Well, I, personally, I'm incredibly excited about what we've been able to bring to the, markets.

Ed Ingle: It's very different from what it was this time last year.

Anthony Lebiedzinski: And then if you go to the beyond the parallel, I know we've been talking about it for a long time, but one of the new pieces of information is to get qualified for some of these customers. Boy, it takes a long time for qualifying the quality of your product, the timing, and to get contract signed, but those are happening. And that's another one that has significantly better growth profit margins than the base business that we're into today.

Speaker Change #148: You know, we've been asked for several years now, how do we make this supply chain more, circular?

Speaker Change #148: And on top of that, there's pending legislation in the EU that will require inputs to recycle, inputs content to be not just from bottles, but also from textiles.

Speaker Change #148: So we believe we've hit the right note with a 50% content of textile take back, but 100% recycles.

Anthony Lebiedzinski: Gotcha,good.

Eddie Ingle: MaybeifyoucouldjustprovidealittlebitmoredetailontheBeyondtheParallelinitiative,thatwouldbehelpful.

Speaker Change #148: We believe based on the messaging we've been getting from the brands that we are right, on the sweet spots for them to be able to communicate.

Speaker Change #148: I've actually spent time personally talking to brands in Europe and in the U.S. and from, based on their reaction and the reaction is different depending on the brand, but based on the.

Speaker Change #148: There's some reactions of all these brands and retailers.

Speaker Change #148: We think we've hit on a nice balance of circularity and sustainability.

Speaker Change #148: Because some customers are focused on carbon reduction, some customers are based on fossil, fuel consumption depletion, and this provides the answers to both.

Anthony Lebiedzinski: Okay,andthenasfarasthebeyondtheperilinitiative,Iknowthat'ssomethingyouguyshavetalkedaboutcertainlyinthepast.

Eddie Ingle: Yeah.

Speaker Change #148: I think what's really exciting, Anthony, is the fact that one of these products is a new, product line for us, insulation, and it allows us to call directly on the brands and we can get spec'd in as a solution for providing a recycling content product.

Speaker Change #148: Gotcha.

Anthony Lebiedzinski: Gotcha.

Speaker Change #148: Yeah, that sounds very good.

Speaker Change #148: So as far as, I know it's hard to say for sure, probably as far as the timing of this, pending legislation, but I mean, as far as what you know, what's the earliest that you think that you could actually see that going through, because I think that could be meaningful to you guys.

Speaker Change #148: I think in the second half of this fiscal year, the January through July period, we'll, start to see, we'll be sampling now, but we'll start to see meaningful production orders and really at the beginning of our fiscal 26, 12 months from now, 10 months from now, it'll be in our budget and it'll be visible from a revenue perspective and margin perspective.

Speaker Change #148: But we are planning for the next six months to fulfill the sampling needs of all the customers, so they can figure out how and when to put it into their programs.

Speaker Change #148: Gotcha.

Speaker Change #148: Good.

Speaker Change #148: Okay.

Speaker Change #148: And as far as the Beyond the Parallel initiative, I know that's something you guys have talked, about certainly in the past.

Speaker Change #148: As far as thinking about this going forward here, are you actually gaining some new customers?

Anthony Lebiedzinski: Okay.

Speaker Change #148: Are you actually seeing more purchase orders come in?

Eddie Ingle: WehavetalkedaboutBeyondtheParallelalotinourcalls,reallythelast12to18months. Weareseeingtraction. Weareseeingcommercialorders. AndIbelieveinthenextcall,we'llbeabletooutlinesomeoftherevenueimpactsthatwe'regoingtoseefromtheseinitiatives.

Speaker Change #148: Maybe if you could just provide a little bit more detail on the Beyond the Parallel initiative, that would be helpful.

Eddie Ingle: Rightnow,Ican'tgivespecificdetails,butI'mveryconfidentthatintheOctobercall,we'llbeabletooutlinetheprogresswe'vemadeandwhatthatmeanstoourbusiness.

Speaker Change #148: Yeah.

Speaker Change #148: We have talked about Beyond the Parallel a lot in our calls, really the last 12 to 18 months.

Speaker Change #148: We are seeing traction.

Speaker Change #148: We are seeing commercial orders.

Anthony Lebiedzinski: So it sounds just like normal seasonality as far as what's impacting that.

Anthony Lebiedzinski: So I think going forward. We'll be less dependent. We're still going to sell the power. I want to want to be in the apparel business, but we'll be less dependent on it. And this new text I'll take back as a real boost in the environmental sustainability story. So I wish these were going to show up this quarter. They won't, but they will be probably the end of the fiscal year. Okay, that's great to hear and I appreciate the comprehensive answers.

Speaker Change #148: And I believe in the next call, we'll be able to outline some of the revenue impacts that, we're going to see from these initiatives.

Speaker Change #148: Right now, I can't give specific details, but I'm very confident that in the October, call, we'll be able to outline the progress we've made and what that means to our business.

Anthony Lebiedzinski: Okay.

Speaker Change #148: But we are well on our way to making it part of our business.

Anthony Lebiedzinski: Asfarasthinkingaboutthisgoingforwardhere,areyouactuallygainingsomenewcustomers?

Eddie Ingle: Butwearewellonourwaytomakingitpartofourbusiness.

Speaker Change #148: Thanks.

Speaker Change #148: Anthony, this is Al.

Anthony Lebiedzinski: Areyouactuallyseeingmorepurchaseorderscomein?

Anthony Lebiedzinski: Thanks.

Speaker Change #148: I just wanted to add something to Eddie's comments.

Eddie Ingle: Andmaybeifyoucouldjustprovidealittlebitmoredetailonthebeyondtheperilinitiative,that'dbehelpful.

Albert Carey: Anthony,thisisAl.

Speaker Change #148: I'd say that in fiscal 2026, we'll see an impact, and probably a little bit in the end, of this fiscal year.

Eddie Ingle: Yeah,wehavetalkedaboutbeyondtheperilalotinourcallsreallythelast12to18months.

Speaker Change #148: But the thing that's exciting is the products that Eddie's talking about, the new ones with, textile take back and the insulation, they have significantly stronger margins than our base business.

Speaker Change #148: And then if you go to the Beyond the Parallel, I know we've been talking about it for a long, time.

Anthony Lebiedzinski: And then in terms of the new product offerings that you announced earlier this week, you know, with the white, diable, filament yarn and throw of a loop, just wondering how meaningful could these new products be.

Speaker Change #148: But one of the new pieces of information is to get qualified for some of these customers, boy, it takes a long time for qualifying the quality of your product, the timing, and to get contracts signed.

Speaker Change #148: But those are happening.

Speaker Change #148: And that's another one that has significantly better gross profit margins than the base, business that we're into today.

Eddie Ingle: Weareseeingtraction,weareseeingcommercialorders,andIbelieveinthenextcall,we'llbeabletooutlinesomeoftherevenueimpactsthatwe'regoingtoseefromtheseinitiatives.

Speaker Change #148: So I think going forward.., will be less dependent.

Speaker Change #148: We're still going to sell apparel.

Speaker Change #148: We want to be in the apparel business, but we'll be less dependent on it.

Speaker Change #148: And this new text I'll take back is a real boost in the environmental sustainability story.

Speaker Change #148: So I wish these were going to show up this quarter.

Eddie Ingle: Rightnow,Ican'tgivespecificdetails,butI'mveryconfidentthatintheOctobercall,we'llbeabletooutlinetheprogresswe'vemadeandwhatthatmeanstoourbusiness.

Speaker Change #148: They won't, but they will be probably by the end of the fiscal year.

Speaker Change #148: Okay, that's great to hear, and I appreciate the comprehensive answer.

Speaker Change #148: So I guess my last, question, just to follow up as far as the margin differential, any way you guys could quantify or give some more additional color as far as what the margin difference you think will be for the new products versus the legacy products?

Speaker Change #148: Sure, Anthony.

Eddie Ingle: Butwearewellonourwaytomakingitpartofourbusiness.

Speaker Change #148: It's A.J.

Speaker Change #148: Thanks for the questions and thanks for joining this morning.

Speaker Change #148: In general, we're seeing that as, in general, double what we see from our base business.

Albert Carey: Thanks.

Albert Carey: IjustwantedtoaddsomethingtoEddie'scomments.

Anthony Lebiedzinski: So I guess my last question just to follow up. But as far as the margin differential, anyway, you guys could quantify or give some more additional color as far as what the margin difference you think will be for the new products versus the legacy products. Sure, Anthony. It's a thanks for the questions and thanks for joining this morning. [inaudible]

Albert Carey: Anthony,thisisAl.

Albert Carey: I'dsaythatinfiscal2026,we'llseeanimpact,andprobablyalittlebitintheendofthisfiscalyear.

Anthony Lebiedzinski: I know you talked about really calendar 25 as far as seeing a benefit, but just wondering if you could, you know, if there's any way you could put a number or just give more details as to, you know, what's the opportunity for those new products?

Albert Carey: IjustwantedtoaddsomethingtoEddie'scomments.

Albert Carey: I'dsaythatinfiscal2026,we'llseeanimpact,andprobablyalittlebitintheendofthisfiscalyear.

Albert Carey: Butthethingthat'sexcitingistheproductsthatEddie'stalkingabout,thenewoneswithtextiletakebackandtheinsulation,theyhavesignificantlystrongermarginsinourbasebusiness.

Albert Carey: Butthethingthat'sexcitingistheproductsthatEddie'stalkingabout,thenewoneswithtextiletakebackandtheinsulation,theyhavesignificantlystrongermarginsthanourbasebusiness.

Ed Ingle: Well, I personally am incredibly excited about what we've been able to bring to the markets.

Ed Ingle: You know, we've been asked for several years now how do we make this supply chain more circular.

Albert Carey: Andthenifyougotothebeyondtheperil,Iknowwe'vebeentalkingaboutitforalongtime,butoneofthenewpiecesofinformationistogetqualifiedforsomeofthesecustomers,boy,ittakesalongtimeforqualifyingthequalityofyourproduct,thetiming,andtogetcontractssigned.

Albert Carey: AndthenifyougototheBeyondtheParallel,Iknowwe'vebeentalkingaboutitforalongtime.

Ed Ingle: And on top of that, there's pending legislation in the EU that will require inputs to recycle inputs, that's content to be not just from models, but also from textiles.

Albert Carey: Butthosearehappening.

Albert Carey: Butoneofthenewpiecesofinformationistogetqualifiedforsomeofthesecustomers,boy,ittakesalongtimeforqualifyingthequalityofyourproduct,thetiming,andtogetcontractssigned.

Ed Ingle: So we believe we've hit the right note with a 50% content of textile tape back, but 100% recycles.

Albert Carey: Andthat'sanotheronethathassignificantlybettergrossprofitmarginsthanthebasebusinessthatwe'reintotoday.

Albert Carey: Butthosearehappening.

Ed Ingle: We believe based on the messaging we've been getting from The brands that we are right on the sweet spots for them to be able to communicate, I've actually spent time personally talking to brands in Europe and in the US and from based on their reaction and the reaction is different depending on the brand, but based on the some reactions of all these brands and retailers we think we've hit on a nice balance of circularity and sustainability.

Albert Carey: SoIthinkgoingforward,willbelessdependent.

Albert Carey: Andthat'sanotheronethathassignificantlybettergrossprofitmarginsthanthebasebusinessthatwe'reintotoday.

Ed Ingle: Because some customers are based on carbon reduction, some customers are based on fossil fuel consumption depletion and this provides the answers to both.

Albert Carey: We'restillgoingtosellapparel.

Albert Carey: SoIthinkgoingforward.., willbelessdependent.

Ed Ingle: So I think what's really exciting Anthony is the fact that one of these products is a new product line for us insulation and it allows us to call directly on the brands and we can get spec'd in as a solution for providing the brand.

Albert Carey: Wewanttobeintheapparelbusiness,butwe'llbelessdependentonit.

Albert Carey: AndthisnewtextI'lltakebackisarealboostintheenvironmentalsustainabilitystory.

Ed Ingle: I think we're seeing it a reshacking content province.

Albert Carey: SoIwishtheseweregoingtoshowupthisquarter.

Albert Carey: Theywon't,buttheywillbeprobablybytheendofthefiscalyear.

Albert Carey: We'restillgoingtosellapparel.

Anthony Lebiedzinski: That sounds very good.

Anthony Lebiedzinski: So as far as I know it's hard to say for sure, probably as far as the timing of this pending legislation, but I mean as far as what you know, what the earliest that you think that you could actually see that going through, I think that could be meaningful to you guys.

Ed Ingle: I think we'll in the second half of this fiscal year, the January through July period, we'll start to see, we'll be sampling now, but we'll start to see meaningful production orders and really at the beginning of our fiscal 26, 12 months and now, 10 months and now.

Anthony Lebiedzinski: Okay.

Albert Carey: Wewanttobeintheapparelbusiness,butwe'llbelessdependentonit.

Ed Ingle: It will be in our budget and it'll be visible from a revenue perspective and margin perspective, but we are we are planning for the next six months to fulfill the sampling needs of all the customers so they can figure out how and when to put it into their into their programs.

Anthony Lebiedzinski: That'sgreattohear,andIappreciatethecomprehensiveanswer.

Albert Carey: AndthisnewtextI'lltakebackisarealboostintheenvironmentalsustainabilitystory.

Anthony Lebiedzinski: Gotcha good.

Anthony Lebiedzinski: SoIguessmylastquestion,justtofollowupasfarasthemargindifferential,anywayyouguyscouldquantifyorgivesomemoreadditionalcolorasfaraswhatthemargindifferenceyouthinkwillbeforthenewproductsversusthelegacyproducts?

Albert Carey: SoIwishtheseweregoingtoshowupthisquarter.

Anthony Lebiedzinski: And then as far as the beyond the parallel initiative, I know that's something you guys have talked about the certainly in the past as far as, you know, thinking about this, you know, going forward here, are you actually gaining some new customers, are you actually seeing more purchase orders come in and maybe if you could just provide a little bit more detail on the beyond the parallel initiative, that would be helpful.

AJ Eaker: Sure,Anthony.

Albert Carey: Theywon't,buttheywillbeprobablybytheendofthefiscalyear.

Ed Ingle: Yeah, we have talked about beyond a lot in our calls really last 12 to 18 months, we are seeing traction, we are seeing commercial orders.

Anthony Lebiedzinski: Okay,that'sgreattohear,andIappreciatethecomprehensiveanswer.

Ed Ingle: And I believe by the in the next call, we'll be able to outline some of the revenue impacts that we're going to see from these initiatives.

Ed Ingle: Right now, I can't give specific details, but I'm very confident that by in the October call, we'll be able to outline the progress we've made and what that means to our business, but we are we are well on our way to making it part of our business.

AJ Eaker: Sure,Anthony.

Ed Ingle: Thanks.

Anthony Lebiedzinski: I just wanted to add something to the Eddie sure I'd say that I'd say that in in fiscal 2026, we'll see an impact and probably a little bit in the, you know, the end of this fiscal year, but the thing that's exciting is the products that Eddie's talking about the new ones with textile take back in the insulation, they have stronger significantly stronger margins in our base business.

Ed Ingle: And then if you go to the beyond the parallel, I know we've been talking about it for a long time, but one of the new pieces of information is to get qualified for some of these customers.

Ed Ingle: Boy, it takes a long time for qualifying the quality of your product, the timing and to get contract signed, but those are happening.

Ed Ingle: And that's another one that has significantly better growth profit margins than the base business that we're into today.

Ed Ingle: So I think going forward, will be less dependent.

Ed Ingle: We're still going to sell a power, want to be in the apparel business, but we'll be less dependent on it.

Ed Ingle: And this new text I'll take back as a real boost in the environmental sustainability story.

Ed Ingle: So I wish these were going to show up this quarter.

Ed Ingle: They won't, but they will be probably the end of the fiscal year.

Anthony Lebiedzinski: Okay.

Anthony Lebiedzinski: That's great to hear and I appreciate the comprehensive answer.

Anthony Lebiedzinski: So I guess my last question just to follow up.

Anthony Lebiedzinski: But as far as the margin differential, anyway, you guys could quantify or give some more additional color as far as what the margin difference.

Anthony Lebiedzinski: You think we'll be for the new product versus the legacy products.

Anthony Lebiedzinski: Sure.

Anthony Lebiedzinski: Anthony, it's a thanks for the questions and thanks for joining this morning.

Anthony Lebiedzinski: In general, we're seeing that as in general, double what we see from our base business.

AJ Eaker: Certainly the base business is constrained, especially in the Americas right now with fixed cost absorption and not getting the full volumes in that we've been chasing for several months now.

AJ Eaker: So those margins are naturally suppressed, but you've seen those in the past in the low double digits somewhere between eight to eight.

AJ Eaker: Well, 15% that we've been able to perform in the better years.

AJ Eaker: So with these new products as they have some innovation underlying those, and we're able to really key in on what customer customers need with the new products, we're able to see double double the margin there in many cases.

Anthony Lebiedzinski: All right.

Anthony Lebiedzinski: Well, that's great to hear and look forward to seeing the progress that you guys will be making this year.

Anthony Lebiedzinski: So thank you very much and best of luck.

Anthony Lebiedzinski: Thank you.

Operator: Excellent.

Operator: Thank you, Anthony.

Operator: Again, if you would like to ask a question, please press star one to join the queue.

Operator: And that concludes our Q&A session and today's call.

Operator: Thank you everyone for joining.

Operator: You may now disconnect.

Operator: Edmund Ingle, Craig Creaturo, Anthony Lebiedzinski Edmund Ingle, Craig Creaturo, Anthony Lebiedzinski, Edmund Edmund Ingle, Craig Creaturo, Anthony Lebiedzinski, Edmund Ingle, Craig[inaudible] Ingle, Craig Creaturo, Anthony Lebiedzinski, Edmund Ingle, Craig Edmund Ingle, Craig Edmund Ingle, Craig Edmund Ingle, Craig Ingle, Craig Ingle, Craig Ingle, Craig Ingle, Craig Ingle, Craig Ingle, Craig Ingle, Craig Ingle, Craig .

Operator: Ingle, Craig Creaturo, Anthony Lebiedzinski, Edmund Ingle[inaudible] Ingle, Craig Creaturo, Anthony Lebiedzinski, Edmund Ingle, Craig Ingle, Craig Ingle, Craig Ingle, Craig Ingle, Craig Creaturo, Anthony Lebiedzinski, Edmund Ingle, Craig As to the Speakers in March, there will be a question and answer session.

Operator: Please familiarize yourself with page two of that slide back for cautionary statements and non-GAAP measures.

Albert Carey: And now I will turn the call over to Al Carey.

Albert Carey: Al, the floor is yours.

Albert Carey: Thank you.

Albert Carey: Thank you, Kathleen.

Albert Carey: Good morning, everybody.

Albert Carey: And thank you very much for joining us on the call today.

Albert Carey: I'm going to start with a brief but broad overview of our performance for Q4.

Albert Carey: See a couple of insights that come out for us.

Albert Carey: And then I'm going to turn it over immediately to Eddie and AJ who will provide you with the real details of the quarter.

Albert Carey: So the first insight was this broader textile and apparel industry sales are coming back a lot slower than we expected, but they are improving.

Albert Carey: But retail sales for apparel and furnishings for the first half of the year were growing at about low single digits.

Albert Carey: And if you factor in inflation, they're probably flat to slightly down versus a year ago.

Albert Carey: Our sales for the quarter for this fourth quarter are better than the previous quarters of 2024 and are better than last year's Q4.

Albert Carey: Now the second insight to the quarter was we are seeing improved market share in North America despite the sluggish sales come back.

Albert Carey: And we're very close to booking sales in the new categories that we've told you about before which are the beyond apparel categories. And those categories include home, military, automotive and industrial applications and these sales will start offset the low performance of apparel and also they'll give us improved mix as the margins on each product are good bit better than the base apparel sales that we have.

Albert Carey: And the third insight is that we've been working on innovation all through this period.

Albert Carey: And we now have introduced to the marketplace just this week our textile take back introduction, our new revolutionary insulation products and additional layering of our reprieve platform.

Albert Carey: And these products have been under development for several quarters and they they're going to generate sales in calendar 2025 we won't see any of that in the next couple of months but they will begin in 2025 and in 2026.

Albert Carey: And two of these products are very interesting in particular the ones that address the customer demand around circularity and also around reducing carbon foot.

Albert Carey: Print.

Albert Carey: And I'd say we're feeling cautiously optimistic as we look out over the new fiscal year, and we really believe that soon enough, these customers that we have are going to have to start replenishing their inventory, and we're also going to have to start preparing for the spring-selling season. And I believe those inventories right now are quite low, and they're below pre-COVID levels.

Albert Carey: So we're going to continue to manage costs very tightly during this period. We're going to preserve cash until all this opens back up, and I think when it's all over, we'll be a better company than we were before all this.

Ed Ingle: So let me turn it over right now to Eddie Engel, our CEO, and he'll take you through more important details of the corner.

Ed Ingle: Eddie.

Ed Ingle: Thanks, Al.

Ed Ingle: And as Al just highlighted, we do believe that in most aspects of our business, Unify has finally begun to turn a corner, and the operating environment is beginning to get closer to returning to more normal levels.

Ed Ingle: And over the past year plus, we've been working hard to reposition our business. So it's be able to respond quickly to an uptickling customer demand, and that the results of those efforts have already become apparent in our financial disquarter as we saw solid year-over-year revenue and volume growth, and the significant improvement in our margins.

Ed Ingle: And we are also continuing to see strong momentum across our segments, and we recently announced some exciting new product innovations, which I'll touch on in greater detail shortly.

Ed Ingle: Turning now to slide four for an overview of the quarter.

Ed Ingle: During the fourth quarter of fiscal 2024, we reported $157.5 million in consolidated net sales, which was up 4% year-over-year and 6% sequentially compared to the third quarter. This improvement in net sales was largely driven by our Brazil segment, which has been performing very well recently.

Ed Ingle: In addition, our operations in China have also been continued to build momentum and contributed to our strong performance during the quarter.

Ed Ingle: We are continuing to see the benefits of our America's cost-reset efforts, which is evident by the significant improvement in our gross margin and subdued operating expenses. We expect to see these efforts continue through the next few quarters as well, although it's worth noting that some of these savings will be slightly offset by inflation.

Ed Ingle: With that said, we still believe we have driven sustainable efficiencies and cost discipline over the last year that our organization will continue to leverage into the future. Our sales transformation has also been progressing well, and we have continued to see the benefits of our transformation efforts with gross profit during the quarter experiencing a $6 million improvement on a sequential basis. This gives us confidence that our operating profits can continue to improve during fiscal 2025.

Ed Ingle: I'll now provide a brief update on each of our business segments. In the America's segments, while we are continuing to take market share, we did experience a bit of a slowdown due to some competitive shuffling and some customers pushing out orders for a few months. But we remain well positioned to take advantage of further improvement in the region, as our continued efforts on beyond the power initiatives are helping to offset the weakness in the power program.

Ed Ingle: In our Asia segment, we are continuing to see signs of recovery, and we believe that we'll see stronger performance in the region during fiscal 2025, despite a seasonally slower first quarter.

Ed Ingle: Turning now to slide five for an update on reprieve.

Ed Ingle: During the fourth quarter, reprieve were represented 34% of sales, a meaningful increase when compared to the previous quarter.

Ed Ingle: This improvement in sales was largely driven by the positive recovery trends that have been seen in Central America, as well as a moderate recovery in Asia.

Ed Ingle: On the marketing front for reprieve, we also achieved several exciting co-branting faces this quarter, notably with Dolce Vita footwear, part of the Steve Matting Group, incorporated reprieve into its products.

Ed Ingle: Kate Spade featured reprieve in a pajama line for Costco Canada and Teva launched an iconic version of their original universal sample in a re-loop version which contained reprieve powered by our own textile take back program.

Ed Ingle: Now, as many of you are aware, if you've been listening to our calls of the last few quarters, our textile take back program aims to increase circularity in the production of textiles by transforming fabric waste into a recycled resin that in turn is converted into reprieve fiber. Through this process, we are not only leading the transition for a more circular supply chain, but we are also helping our customers, such as the ones I mentioned earlier, meet their sustainability goals.

Ed Ingle: Now, staying on the topic of textile take back, I would like to spend some time reviewing some of the new innovative reprieve products that we just announced earlier this week that are harnessing our textile take back program and already have the ability to be offered at scale.

Ed Ingle: First, on slide six, you'll see some highlights of our new white reprieve filament yarn powered by our textile take back process, that we will be showcasing at the Intertext out Shanghai Apparel Fabrics Convention next week.

Ed Ingle: The new form of reprieve filament yarn is made of 50% textile take back waste and 50% recycled bottles, which is the world's first 50% textile waste filament yarn with the tracer and uterus verification.

Ed Ingle: The new offering is white, diabol and available at scale now.

Ed Ingle: On slide seven, for our second new product announcement, you can see that we've launched a totally new product offering but still based on polyester fiber called thermal loop, which is an insulation solution that is designed for home goods, outdoor gear applications, things like sleeping bags, and apparel switches, winter jacks.

Ed Ingle: What makes Thermaloop so unique is that big percentage of the fiber is used to make it often text downwaste, and we are launching this new product offering in black.

Ed Ingle: The Thermaloop products were launched as a 100% recycled content. What is even more exciting is that the Thermaloop Padding product is the first of its kind to have a reprieve recycled polyester low melt fiber, which allows our customers to provide a wider range of sustainable offerings.

Ed Ingle: Both Thermaloop and our new form of reprieve filament yarn will be sampled by our customers throughout fiscal 2025.

Ed Ingle: We believe we will begin to see some revenues and volume benefits from our new filament yarn in the second half of fiscal 2025.

Ed Ingle: And we will begin to see the growth benefits from the Thermaloop throughout fiscal 2026 supporting additional growth moving forward.

Ed Ingle: Before I wrap up, I would also like to note that our beyond-of-parallel innovations are continuing to grow, and with conversations progressing with a number of customers in key end markets, and we are hopeful that we'll be able to further discuss these in the near future.

AJ Eaker: With that, I will now like to pass the call over to AJ to discuss our financial results for the quarter.

AJ Eaker: Thank you, Eddie.

AJ Eaker: As both Alan and Eddie noted, we've continued to make great strides towards improving our business, and we are well positioned to pivot to growth and stronger profitability as we move forward. Our focus has remained on keeping our variable expenses across both production and administrative functions low, and we've already begun to see a sustainable reduction in those expenses.

AJ Eaker: As we previously noted, we plan to reinvest these cost savings and increase profits in the key areas of our business that will drive innovation and margin expansion, such as the two new reprieved fiber products that Eddie just discussed.

AJ Eaker: Turning now to our financial results.

AJ Eaker: On slide 8, you'll see our consolidated financial highlights for the quarter.

AJ Eaker: This greater performance also led to our growth profit seeing an improvement of more than 100% sequentially, marking our third consecutive quarter of growth profit improvement.

AJ Eaker: Turning to slide 9.

AJ Eaker: In the America segment, net sales were sequentially flat, and down 4% year over year, which is Eddie noted was primarily driven by a slowdown in spending and customers pushing out a few orders.

AJ Eaker: Flood 10 displays our Brazil segment highlights, which experienced net sales growth of 9% during the quarter on a sequential basis, and almost 19% year over year. Our Brazil segment has continued to benefit from our ability to take price in the region, operate it full utilization, and the capture of additional market share.

AJ Eaker: On slide 11, the Asia segment solved net sales growth of 21% sequentially, and over 17% year over year, during by higher sales volumes in the period and improved market share.

AJ Eaker: Conditions.

AJ Eaker: As Asia continues to recover, we remain well positioned in the region, and our portfolio expansion will help drive improved performance for the segment in the future.

AJ Eaker: Before passing the call back to Eddie for some closing commentary, I'll now briefly discuss our balance sheet on slide 12.

AJ Eaker: During the quarter, we continue to focus on working capital management and cost controls, allowing for a better free cash flow situation in the quarter and year-to-date periods, and positioning us to remain focused on debt repayment.

AJ Eaker: With our improved financial performance and our focus on managing our balance sheet, we remain confident that our business is well positioned for realizing profitable growth opportunities in fiscal 25 and beyond.

AJ Eaker: I'll now pass the call back to Eddie to take us through the last few slides of the presentation and make some final comments.

Ed Ingle: Thank you, A.J.

Ed Ingle: Let's now turn to slide 13 to discuss our forecast for the first quarter of fiscal 2025.

Ed Ingle: As we look forward, we're having more positive conversations with our customers of other needs and destocking it's clearly behind us and most of the industry, which will help, as we anniversary, some of the impacts of this unusual period.

Ed Ingle: We look to specifically at the first quarter, we expect to see our positive momentum push forward as we begin our new fiscal year. More specifically for the quarter, the first quarter, which as a reminder, is starkly one of our slower quarters from a sales perspective due to seasonality, we are expecting the following. Net sales between $147 million and $153 million, which at the midpoint would be roughly a 10% top-line growth year-reheater.

Ed Ingle: We expect adjusted even at range between $1 million and $3 million, a significant improvement over last year's able to loss.

Ed Ingle: And we also expect to continue to keep a disciplined eye on capital expenditures and bleed catpex for the quarter will come in between $3 million and $4 million.

Ed Ingle: Then in terms of our fiscal 25 outlook, I'd like to provide a little more context on slide 14.

Ed Ingle: Our underlying momentum is rebuilding.

Ed Ingle: So in fiscal 2025, we believe we'll see a return to more normal conditions, which will support top-line growth and excess of 10% year-to-year year.

Ed Ingle: Further, we believe the proactive decisions we have made to control our costs and stream on our business will continue to show up in stronger profitability results next year.

Ed Ingle: We expect EBIT to be positive in every quarter of the fiscal year and see a path to a significant increase in growth profit, growth margin, and adjusted EBIT.

Ed Ingle: Lastly, we've budgeted to keep capital expenditures contained and we are projecting that we'll see capital expenditures range from $10 to $12 million for fiscal 2025.

Ed Ingle: Moving on to slide 15, you can see that some of the key strategic and initiative items we're focused on to maintain our momentum and expand our business.

Ed Ingle: While we're excited about our opportunities in fiscal 2025, I want to be clear that we're focused on pivoting to growth for the future of future.

Ed Ingle: Director. Despite the challenging conditions over the last year and a half, we've never stopped investing in our business. We've put new leaders in key areas to invigorate and position the business for sustainable, profitable growth. We also invested heavily in innovation as we talked about today, as is the engine that helps us grow our business globally.

Ed Ingle: This is our belief that we have only scratched the surface of our potential, and demand for sustainable solutions continues to be desired by our customers' customers.

Ed Ingle: Our reprieve offerings continues to gain traction in terms of name recognition and assortment, and our Beyond a Power Initiative will help us further diversify our product portfolio by offering new avenues for innovation and growth.

Ed Ingle: Finally, we have just started to leverage our checks on take-back process at scale with thermal loop and our new reprieve filament yarns powered by texts on take-back.

Ed Ingle: We have applied to find a future text on take-back innovation opportunities that we will share with you over the next several quarters of years.

Ed Ingle: Before I end our remarks, I want to note, collectively we've been through a lot over the last few years, and this team, the global team has risen to the challenge to not only help stream on our business, but also set it up for long-term success.

Ed Ingle: I want to personally thank the whole team again for all of their hard work.

Operator: With that, we would now like to open the line for questions.

Operator: Thank you.

Operator: Operator.

Operator: Thank you.

Operator: We will now begin the question and answer session.

Operator: Again, please press star one to join the queue.

Anthony Lebiedzinski: And your first question comes from the line of Anthony Lipitsinsky.

Anthony Lebiedzinski: Your line is now open.

Anthony Lebiedzinski: Good morning and thank you for taking the questions.

Anthony Lebiedzinski: So certainly nice to see the improvement in sales and profitability during the quarter. As you pointed out, Brazil showed the most improvement from a top and bottom line perspective.

Ed Ingle: Just wondering, you know, what is your confidence level as far as being able to sustain that the type of improvement going forward?

Ed Ingle: That's it for me, Brazil.

Ed Ingle: We actually feel very confident in the demand signals we're getting.

Ed Ingle: We expected one full fiscal year.

Ed Ingle: There will be some margin pressure as the role materials inputs normalize and are catching on margins, going to catch up with the new higher input costs.

Ed Ingle: But for the most part, we do expect to remain strong and have a much better either form in Brazil this year versus last year.

Anthony Lebiedzinski: That's great to hear.

Ed Ingle: The supply chain that we have, most of the inputs come from Asia and the freight costs international container costs have risen significantly, which has given us a pricing opportunity.

Ed Ingle: Understood, and then as far as you know in other regions, what do you see from a cost perspective for raw materials?

Ed Ingle: Raw materials have been predominantly for the most part flat.

Ed Ingle: Got it.

Anthony Lebiedzinski: Okay, let's get to here.

Anthony Lebiedzinski: Okay, and then, you know, so in your conversations with your top customers in the Americas, obviously your largest region, you know, what are you hearing from them as far as when we could see improved results?

Ed Ingle: Yeah, when we look across our top customers in all the reasons, actually not just the apparel segments, they are telegraphing to us that our fiscal Q1, you know, the July 3 September period, it's going to be a little slower than they had expected, but they are I think almost to all of them are expecting an uptick in October.

Ed Ingle: We have seen a significant improvement already in Central America, our business down there, and maybe they're a leading indicator, but we do expect to see that business improve actually as we move through the next few months.

Ed Ingle: In the US, specifically, there are some markets that we sell into that, you know, traditionally they are slower in the summer, and as we move into the late September early October period, things will get back to an or more normalized higher run rate, but they're generally speaking positive, it's very different from what it was this time last year.

Ed Ingle: Gotcha.

Anthony Lebiedzinski: Okay, so it sounds just like normal seasonality as far as what's impacting that, okay.

Anthony Lebiedzinski: Okay, and then, you know, in terms of the new product offerings that you announced earlier this week, you know, with the white, diable, filament yarn, and throw up a loop, just wondering, you know, how meaningful could these new products be?

Anthony Lebiedzinski: I know you talked about really, you know, calendar 25 as far as seeing a benefit, but it's just just wondering if you could, you know, if there was any way you could put a number or just give more details as to, you know, like what's the opportunity for those new products?

Ed Ingle: Well, I personally, I'm incredibly excited about what we've been able to bring to the markets.

Ed Ingle: You know, we've been asked for several years now, how do we make this supply chain more circular?

Ed Ingle: And on top of that, there's pending legislation in the EU that will require inputs to recycle inputs, content to be not just from models, but also from textiles.

Ed Ingle: So we believe we've hit the right note with a 50% content of textile tapeback, but 100% recycles.

Ed Ingle: We believe based on the messaging we've been getting from the brands that we are right on sweet spots for them to be able to communicate.

Ed Ingle: I've actually spent time personally talking to brands in Europe and in the US and from based on their reaction, and their reaction is different depending on the brand, but based on the with some reactions of all these brands and retailers, we think we've hit on a nice balance of circularity and sustainability because some customers are focused on carbon reduction.

Ed Ingle: Some customers are based on fossil fuel consumption depletion and this provides the answers to both.

Ed Ingle: So, I think what's really exciting, Anthony, is the fact that one of these products is a new product line for us, insulation, and it allows us to call directly on the brands and we can get spec'd in as a solution for providing a re-sacking content product.

Anthony Lebiedzinski: Gotcha, yeah, that sounds very good.

Ed Ingle: I think we'll, in the second half of this fiscal year, the January through July period, we'll start to see, we'll be sampling now, but we'll start to see meaningful production orders and really at the beginning of our fiscal 26, 12 months and now, 10 months and now, it'll be in our budget and it'll be visible from a revenue perspective and margin perspective.

Ed Ingle: But we are planning for the next six months to fulfill the sampling needs of all the customers so they can figure out how and when to put it into their programs.

Anthony Lebiedzinski: Gotcha, good.

Anthony Lebiedzinski: Okay, and then as far as the beyond the peril initiative, I know that's something you guys have talked about the certainly in the past, as far as you know, thinking about this going forward here, are you actually, you know, gaining so some new customers, are you actually seeing more purchase orders to come in and, you know, maybe if you could just provide a little bit more detail on the beyond the peril initiative, that'll be helpful.

Ed Ingle: Yeah, we had talked about the on the panel a lot in our calls really last 12 to 18 months.

Ed Ingle: We are seeing traction, we are seeing commercial orders and I believe by the, in the next call, we'll be able to outline some of the revenue impacts that we're going to see from these initiatives.

Ed Ingle: Right now, I can't give specific details, but I'm very contented that by, in the October call, we'll be able to outline the progress we've made and what that means to our business.

Ed Ingle: But we are, we are well on our way to making it part of our business.

Anthony Lebiedzinski: Thanks.

Anthony Lebiedzinski: Definitely.

AJ Eaker: This is now, I just wanted to add something to the, at least sure, I'd say that in fiscal 2026, we'll see an impact and probably a little bit in the, you know, the end of this fiscal year.

AJ Eaker: But the thing that's exciting is the products that Eddie's talking about, the new ones with textile take back and the insulation, they have stronger, significantly stronger margins in our base business.

AJ Eaker: And then if you go to the beyond the peril, I know we've been talking about it for a long time, but one of the new pieces of information is to get qualified for some of these customers.

AJ Eaker: It, boy, it takes a long time for qualifying the quality of your product, the timing, and to get contract signed, but those are happening.

AJ Eaker: And that's another one that has significantly better growth profit margins than the base business that we're into today.

AJ Eaker: So I think going forward.

AJ Eaker: We'll be less dependent.

AJ Eaker: We're still going to sell the power.

AJ Eaker: I want to want to be in the apparel business, but we'll be less dependent on it.

AJ Eaker: And this new text I'll take back as a real boost in the environmental sustainability story.

AJ Eaker: So I wish these were going to show up this quarter.

AJ Eaker: They won't, but they will be probably the end of the fiscal year.

Anthony Lebiedzinski: Okay.

Anthony Lebiedzinski: That's great to hear and I appreciate the comprehensive answers.

Anthony Lebiedzinski: So I guess my last question, just to follow up.

Anthony Lebiedzinski: But as far as the margin differential, anyway, you guys could quantify or give some more additional color as far as what the margin difference you think will be for the new products versus the legacy products.

Anthony Lebiedzinski: Sure.

AJ Eaker: The general double what we see from our base business, certainly the base business is constrained, especially in the Americas right now with fixed cost absorption and not getting the full volumes in that we've been chasing for several months now.

AJ Eaker: So those margins are naturally suppressed, but you've seen those in the past in the low double digits somewhere between eight, 12, 15% that we've been able to perform in the better years.

AJ Eaker: So with these new products as they have some innovation underlying those and we're able to really key in on what customer customers need with the new products were able to see double double the margin there in many cases.

Anthony Lebiedzinski: All right, well, that's great to hear and look forward to seeing the progress that you guys will be making this year.

Anthony Lebiedzinski: So thank you very much and best of luck.

Anthony Lebiedzinski: Thank you.

Anthony Lebiedzinski: Excellent.

Anthony Lebiedzinski: Thank you, Anthony.

Anthony Lebiedzinski: Again, if you would like to ask a question, please press star one to join the queue.

Operator: And that concludes our Q&A session and today's call.

Operator: Thank you everyone for joining.

Operator: You may now disconnect.

Q4 2024 Unifi Inc Earnings Call

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