Unifi
Annual Report 2014

Plain-text annual report

UNITED STATESSECURITIES AND EXCHANGE COMMISSIONWashington, D.C. 20549 FORM 10-K [X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15 (d) OFTHE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended June 29, 2014 OR [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OFTHE SECURITIES EXCHANGE ACT OF 1934 For the transition period from _____to_____Commission file number 1-10542 UNIFI, INC.(Exact name of registrant as specified in its charter) New York 11-2165495 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 7201 West Friendly Avenue 27419-9109 Greensboro, NC (Zip Code) (Address of principal executive offices) Registrant’s telephone number, including area code:(336) 294-4410 Securities registered pursuant to Section 12(b) of the Act: Title of each class Name of each exchange on which registered Common StockNew York Stock Exchange Securities registered pursuant to Section 12(g) of the Act:None Indicate by checkmark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes [ ] No [X] Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Exchange Act. Yes [ ] No [X] Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filingrequirements for the past 90 days. Yes [X] No [ ] Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data Filerequired to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for suchshorter period that the registrant was required to submit and post such files). Yes [X] No [ ] Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§229.405 of this chapter) is not contained herein, andwill not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form10-K or any amendment to this Form 10-K. [ ] Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company. Seethe definitions of “large accelerated filer,” “accelerated filer,” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one): Large accelerated filer [ ] Accelerated filer [X] Non-accelerated filer [ ] Smaller reporting company [ ] (Do not check if a smaller reporting company) Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes [ ] No [ X ] As of December 29, 2013, the aggregate market value of the registrant’s voting common stock held by non-affiliates of the registrant was $441,335,143.The registrant has no non-voting stock. As of September 3, 2014, the number of shares of the registrant’s common stock outstanding was 18,313,959. DOCUMENTS INCORPORATED BY REFERENCE Portions of the Definitive Proxy Statement to be filed with the Securities and Exchange Commission (the “SEC”) in connection with the solicitation ofproxies for the Annual Meeting of Shareholders of Unifi, Inc., to be held on October 22, 2014, are incorporated by reference into Part III. (With theexception of those portions which are specifically incorporated by reference in this Form 10-K, the Proxy Statement is not deemed to be filed orincorporated by reference as part of this report.)  UNIFI, INC.ANNUAL REPORT ON FORM 10-KTABLE OF CONTENTS Page FORWARD-LOOKING STATEMENTS 3 Part I Item 1. Business 4Item 1A. Risk Factors 12Item 1B. Unresolved Staff Comments 15Item 1C. Executive Officers of the Registrant 15Item 2. Properties 16Item 3. Legal Proceedings 17Item 4. Mine Safety Disclosures 17 Part II Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities 18Item 6. Selected Financial Data 20Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations 21Item 7A. Quantitative and Qualitative Disclosure About Market Risk 40Item 8. Financial Statements and Supplementary Data 41Item 9. Changes in and Disagreements With Accountants on Accounting and Financial Disclosure 41Item 9A. Controls and Procedures 42Item 9B. Other Information 42 Part III Item 10. Directors, Executive Officers and Corporate Governance 43Item 11. Executive Compensation 43Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters 43Item 13. Certain Relationships and Related Transactions, and Director Independence 43Item 14. Principal Accountant Fees and Services 43 Part IV Item 15. Exhibits and Financial Statement Schedules 44 Signatures 49 Exhibit Index 50 2 FORWARD-LOOKING STATEMENTS This Annual Report on Form 10-K contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, andSection 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), that relate to our plans, objectives, estimates and goals.Statements expressing expectations regarding our future, or projections or estimates relating to products, sales, revenues, expenditures, costs or earnings,are typical of such statements and are made under the Private Securities Litigation Reform Act of 1995. Forward-looking statements are based onmanagement’s beliefs, assumptions and expectations about our future economic performance, considering the information currently available tomanagement. The words “believe,” “may,” “could,” “will,” “should,” “would,” “anticipate,” “estimate,” “expect,” “intend,” “objective,” “seek,” “strive,”and words of similar import, or the negative of such words, identify or signal the presence of forward-looking statements. These statements are notstatements of historical fact; they involve risks and uncertainties that may cause our actual results, performance or financial condition to differ materiallyfrom the expectations of future results, performance or financial condition that we express or imply in any forward-looking statement. Factors that couldcontribute to such differences include, but are not limited to: ●the competitive nature of the textile industry and the impact of worldwide competition; ●changes in the trade regulatory environment and governmental policies and legislation; ●the availability, sourcing and pricing of raw materials; ●general domestic and international economic and industry conditions in markets where the Company competes, such as recession and othereconomic and political factors over which the Company has no control; ●changes in consumer spending, customer preferences, fashion trends and end-uses for products; ●the financial condition of the Company’s customers; ●the loss of a significant customer; ●the success of the Company’s strategic business initiatives; ●the continuity of the Company’s leadership; ●volatility of financial and credit markets; ●the ability to service indebtedness and fund capital expenditures and strategic initiatives; ●availability of and access to credit on reasonable terms; ●changes in currency exchange, interest or inflation rates; ●the ability to reduce production costs; ●the ability to protect intellectual property; ●employee relations; ●the impact of environmental, health and safety regulations; ●the operating performance of joint ventures and other equity investments; ●the accurate financial reporting of information from equity method investees; and ●other factors discussed below in “Item 1A. Risk Factors” or the Company’s other periodic reports and information filed with the Securitiesand Exchange Commission (the “SEC”). All such factors are difficult to predict, and they contain uncertainties that may materially affect actual results and may be beyond our control. Newfactors emerge from time to time, and it is not possible for management to predict all such factors or to assess the impact of each such factor on theCompany. Any forward-looking statement speaks only as of the date on which such statement is made, and we do not undertake any obligation to updateany forward-looking statement to reflect events or circumstances after the date on which such statement is made, except as may be required by federalsecurities law. In light of all the above considerations, we reiterate that forward-looking statements are not guarantees of future performance, and we caution you not torely on them as such. 3 PART I Fiscal YearThe Company’s fiscal year ends on the last Sunday in June. The Company’s Brazilian, Colombian and Chinese subsidiaries’ fiscal years end on June30th. The Company’s fiscal years 2014, 2013 and 2012 ended on June 29, 2014, June 30, 2013 and June 24, 2012, respectively, and there were nosignificant transactions or events that occurred between the Company’s fiscal year ends and its subsidiaries’ fiscal year ends. The Company’s fiscal years2014, 2013 and 2012 consisted of 52 weeks, 53 weeks and 52 weeks, respectively. PresentationAll dollar and other currency amounts, as well as share amounts (except per share amounts), are presented in thousands (000s), except as otherwise noted. Item 1. BUSINESS Unifi, Inc., a New York corporation formed in 1969 (together with its subsidiaries, “we”, the “Company” or “Unifi”), is a multi-national manufacturingcompany that processes and sells high-volume commodity yarns, specialized yarns designed to meet certain customer specifications, and premier value-added (“PVA”) yarns with enhanced performance characteristics. The Company sells yarns made from polyester and nylon to other yarn manufacturersand knitters and weavers that produce fabric for the apparel, hosiery, home furnishings, automotive upholstery, industrial and other end-use markets. TheCompany’s polyester products include polyester polymer beads (“Chip”), partially oriented yarn (“POY”), textured, solution and package dyed, twisted,beamed and draw wound yarns; each is available in virgin or recycled varieties (the latter made from both pre-consumer yarn waste and post-consumerwaste, including plastic bottles). The Company’s nylon products include textured, solution dyed and covered spandex products. The Company maintains one of the textile industry’s most comprehensive yarn product offerings, and it has ten manufacturing operations in fourcountries and participates in joint ventures in Israel and the United States (“U.S.”). The Company’s principal geographic markets for its products arelocated in the U.S., Canada, Mexico, Central America and South America. In addition, the Company has a wholly-owned subsidiary in the People’sRepublic of China (“China”) focused on the sale and promotion of the Company’s PVA and other specialty products in the Asian textile market, primarilyin China, as well as in the European market. The Company has three operating segments, which are also its reportable segments. These segments derive revenues as follows: ●The Polyester Segment manufactures Chip, POY, textured, dyed, twisted, beamed and draw wound yarns, both virgin and recycled, with salesprimarily to other yarn manufacturers and knitters and weavers that produce yarn and/or fabric for the apparel, hosiery, automotive upholstery,home furnishings, industrial and other end-use markets. The Polyester Segment consists of sales and manufacturing operations in the U.S. and ElSalvador. ●The Nylon Segment manufactures textured nylon and covered spandex yarns, with sales to knitters and weavers that produce fabric primarily forthe apparel and hosiery markets. The Nylon Segment consists of sales and manufacturing operations in the U.S. and Colombia. ●The International Segment’s products primarily include textured polyester and various types of resale yarns and staple fiber. The InternationalSegment sells its yarns to knitters and weavers that produce fabric for the apparel, automotive upholstery, home furnishings, industrial and otherend-use markets primarily in the South American and Asian regions. This segment includes a manufacturing location and sales offices in Braziland a sales office in China. Other information for the Company’s reportable segments, including revenues, a measurement of profit or loss, and total assets by segment, is provided in“Note 26. Business Segment Information” to the Consolidated Financial Statements included in “Item 8. Financial Statements and Supplementary Data”of this Annual Report on Form 10-K. 4 Strategy and Significant Developments For the fifth consecutive fiscal year, the Company reported net income, which was $28,823 or $1.52 per basic share for fiscal year 2014, as our Polyesterand Nylon Segments improved significantly, driven by growth in PVA products as part of our continued mix enrichment strategy, and lower polyester rawmaterial costs. Our International Segment, which did not meet expectations but showed improvement as the year progressed, was impacted negatively bylower margins in Brazil due to price pressures from competing imported yarn and the devaluation of the Brazilian currency and lower sales volumes byour Chinese subsidiary due primarily to soft market conditions. Core Business Strategies The Company remains committed to making improvements to its core business, growing the market for its value-added products, and generating positivecash flow from operations to fund select strategic growth opportunities and share repurchases. The Company’s core strategies include: continuouslyimproving all operational and business processes; enriching our product mix by aggressively growing our PVA products and increasing our market shareof compliant yarns; deriving value from sustainability based initiatives, including polyester and nylon recycling; increasing sales in global growthmarkets, including Central America, Brazil, and China; and maintaining our beneficial joint venture relationships. The Company expects to continue tofocus on these strategies through investments in select product and geographic growth opportunities related to its core business. PVA Products and REPREVE® The Company remains committed to growing the business for its value-added products and believes its research and development work with brands andretailers continues to create new, world-wide sales opportunities. The Company believes it can continue to increase its PVA sales as a percentage of itsoverall sales volume and grow its global PVA sales, by approximately 10-12% per year, to create overall mix enrichment and margin gains. TheCompany’s PVA products now represent approximately 27% of its consolidated sales. The Company’s strategy of enriching its product mix through afocus on PVA products helps insulate it from the pressures of imports of low-priced commodity yarn and helps to establish the Company as an innovationleader in its core markets. REPREVE® is the flagship brand in the Company’s PVA portfolio, and continues to grow at a faster pace than other PVA products. As part of our effortsto expand consumer brand recognition of REPREVE®, the Company was again the official recycling partner of ESPN at the X Games Aspen 2014 inJanuary, and we have developed new branding partnerships with Marvel Universe and the National Football League’s Detroit Lions. The increasingsuccess and consumer awareness of our REPREVE® brand continues to provide new opportunities for growth, allowing us to expand into new end-usesand markets for REPREVE®, as well as continuing to grow the brand with current customers. REPREVE® yarns can now be found in many well-knownbrands and retailers, including Ford, Haggar’s Life Khaki, Polartec, The North Face, Patagonia, Quiksilver, Volcom, REI, Perry Ellis, Sears, Macy’s,Kohl’s, Greg Norman and Belk department stores. PVA Expansion and Capital Spending The Company’s recycling facility in Yadkinville, North Carolina, has allowed the Company (i) to expand the REPREVE® brand by increasing theamount and types of recyclable materials that can be used in the manufacturing process and (ii) to develop and commercialize PVA products that meet thesustainability demands for brands and retailers. During fiscal year 2014, we spent $19,091 on capital expenditures, which included completing theinstallation of our second recycling center expansion, adding 30 million pounds of annual capacity. The Company expects capital expenditures todouble for fiscal year 2015. We expect to increase our polyester yarn capacity by adding texturing machines to the Company’s locations in Yadkinville,North Carolina, Madison, North Carolina and El Salvador and to improve our manufacturing flexibility, including small production run capabilities.These initiatives are designed to support the Company’s mix enrichment strategies, while also improving our ability to better service customers andhandle an increasingly complex product mix. In addition, to further leverage the continued success and growth of REPREVE® and to secure our futuresupply of plastic bottles, the Company is also exploring potential backward integration opportunities into bottle washing. Developments in Principal Markets The Company believes apparel production is growing in the regions covered by the North American Free Trade Agreement (“NAFTA”) and the CentralAmerican Free Trade Agreement (“CAFTA”), which regions comprise the principal markets for the Company’s domestic operations. The share of apparelproduction for these regions as a percentage of U.S. retail has stabilized at approximately 18%, while retail consumption has grown – especially forapparel made with synthetic yarns. The CAFTA region, which continues to be a competitive alternative to Asian supply chains for textile products, hasmaintained its share of synthetic apparel supply to U.S. retailers. The share of synthetic apparel versus cotton apparel has increased and provided growthfor the consumption of synthetic yarns within the CAFTA region. The Company expects incremental growth into the foreseeable future, as retailers andbrands maintain regional sourcing as part of their overall sourcing plans, retail sales grow, and consumer preferences continue toward synthetic fromcotton apparel. Our Brazilian subsidiary was negatively impacted during fiscal year 2014 by price pressures from imported fiber, fabric and finished goods; the inflationrate in Brazil; and devaluation of the Brazilian Real. The Company continues to work on (i) aggressively pursuing mix enrichment by working withcustomers to develop programs using our differentiated products as well as our branded PVA yarns, including REPREVE®, and (ii) implementing processimprovements and manufacturing efficiency gains that will help lower per unit costs. Our Chinese operation remains an important part of the Company’s global PVA strategy as it allows us to service customers who have global operations.For fiscal year 2014, market conditions have been soft and capacity utilization rates have been low throughout the Chinese textile industry, which led tolower than expected sales volumes. However, interest and demand for the Company’s PVA products in the region are expected to increase, and we areencouraged by development projects underway with key brands and retailers. 5 Stock Repurchases In March 2014, the Company completed the $50,000 stock repurchase program approved by the Board of Directors (“Board”) in January 2013. In April2014, the Board approved a new stock repurchase program to acquire up to an additional $50,000 of the Company’s common stock. As of September 3,2014, the Company has repurchased a total of 2,592 shares, at an average price of $21.54, under these repurchase programs. The Company will continueto evaluate opportunities to use excess cash flow from operations or existing borrowings to repurchase additional stock under the new repurchaseprogram, while maintaining sufficient liquidity to support its operational needs and fund future strategic growth opportunities. Industry Overview The Company operates in the textile industry and, within it, the respective markets for yarns, fabrics, fibers and end-use products such as apparel andhosiery, automotive upholstery, industrial and home furnishings. The textile industry is global, although there are several distinctive regional or othergeographic markets that often shape the business strategies and operations of participants in the industry. Because of free trade agreements and other traderegulations by the U.S. government, the U.S. textile industry, which is otherwise a distinctive geographic market on its own, is often considered inconjunction with other geographic markets or regions in North, South and Central America, such as the regions covered by either or both of NAFTA andCAFTA. As discussed above and elsewhere, the Company’s principal markets for its domestic operations are in the regions covered by NAFTA andCAFTA, which together include the countries of Canada, Mexico, Costa Rica, Guatemala, Honduras, El Salvador, Nicaragua, the Dominican Republicand the U.S. According to data compiled by Petrochemical Consultants International, global demand for polyester yarns, which includes both filament and stapleyarns, has grown steadily since 1980, and in calendar year 2003, polyester replaced cotton as the fiber with the largest percentage of worldwide sales. Incalendar year 2013, global polyester consumption accounted for an estimated 54% of global fiber consumption, and demand is projected to increase byapproximately 4% annually through 2020. In calendar year 2013, global nylon consumption accounted for an estimated 5% of global fiber consumption,and demand is projected to increase by approximately 1-2% annually through 2020. The polyester and nylon fiber sectors together accounted forapproximately 60% of U.S. textile consumption during calendar year 2013. According to the National Council of Textile Organizations, the U.S. textile industry’s total shipments were $56.6 billion for calendar year 2013. Theindustrial and consumer-type products, floor covering, apparel, and home textiles markets account for 48%, 36%, 12% and 4% of total production,respectively. During calendar year 2013, the U.S. textile industry exported nearly $18 billion of textile products, and the industry has grown by 41%since 2009, an increase of over $5.2 billion. The U.S. textile industry remains a large manufacturing employer in the U.S. Trade Regulation and Rules of Origin The duty rate on imports into the U.S. of finished apparel categories that utilize polyester and nylon yarns generally range from 16% to 32%. Over the lastdecade, imports of fabric and finished goods into the U.S. have increased significantly from countries that do not participate in free trade agreements ortrade preference programs, despite duties charged on those imports. The primary drivers for that growth were lower overseas operating costs, foreigngovernment subsidization of textile industries, increased overseas sourcing by U.S. retailers, the entry of China into the World Trade Organization, andthe staged elimination of all textile and apparel quotas. Although global apparel imports represent a significant percentage of the U.S. market, RegionalFTAs (as described below), which follow general “yarn forward” rules of origin, allow duty free advantages for apparel made from regional fibers, yarnsand fabrics, allowing the Company opportunities to participate in this growing market. A significant number of the Company’s customers in the apparel market produce finished goods that meet the eligibility requirements for duty-freetreatment in the regions covered by NAFTA, CAFTA, and the Colombia and Peru free trade agreements (collectively, the “Regional FTAs”). TheseRegional FTAs contain rules of origin requirements in order for products covered by them to be eligible for duty-free treatment. In the case of textilessuch as fabric, yarn (such as POY), fibers (filament and staple) and certain garments made from them, the products are generally required to be fully formedwithin the respective regions. The Company is the largest filament yarn manufacturer, and one of the few producers of qualifying synthetic yarns, in theregions covered by these agreements. U.S. legislation commonly referred to as the “Berry Amendment” stipulates that certain textile and apparel articles purchased by the U.S. Department ofDefense must be manufactured in the U.S. and must consist of yarns and fibers produced in the U.S. The Company is the largest producer of such yarns forBerry Amendment compliant programs. 6 The Company refers to fibers sold with specific rules of origin requirements under the Regional FTAs, and fibers sold with rule of origin requirementsunder the Berry Amendment, as “Compliant Yarns”. On a consolidated basis, approximately 50% of the Company’s sales are sold as Compliant Yarnsunder the terms of the Regional FTAs or the Berry Amendment. In the last five years, the share of apparel production for the NAFTA and CAFTA regions as a percentage of U.S. retail has stabilized at approximately18%, while retail consumption has grown for apparel made with synthetic yarns. This trend supports the Company’s view that the remaining syntheticapparel production within these regional markets is more specialized and defensible, and, in some cases, apparel producers are bringing programs back tothe regions as part of a balanced sourcing strategy of some retailers and brands. The Company believes the requirements of the rules of origin and the associated duty-free cost advantages in the Regional FTAs, together with the BerryAmendment and the growing need for quick response and inventory turns, will ensure that a portion of the existing textile industry will remain based inthe Americas. The Company expects that the NAFTA and CAFTA regions will continue to maintain their share of apparel production as a percentage ofU.S. retail. Because the Company is the largest of only a few significant producers of Compliant Yarns under these Regional FTAs, one of the Company’sbusiness strategies is to continue to leverage its eligibility status for duty-free processing to increase its share of business with regional and domesticfabric producers who ship their products into these regions. Over the longer term, however, the textile industry in the U.S. and the NAFTA and CAFTA regions are likely to be impacted when and if negotiations areconcluded for the proposed TransPacific Partnership Free Trade Agreement (“TPP”). Countries currently participating in the TPP negotiations, whichhave been ongoing for several years, include Australia, Brunei, Canada, Chile, Malaysia, Mexico, Japan, New Zealand, Peru, Singapore, Vietnam and theU.S. The U.S. government has presented a yarn forward rule of origin for inclusion in the TPP, which (if accepted) would provide certain protections fortextile and apparel producers in the U.S. and NAFTA and CAFTA regions, but negotiations on that and other important market access issues for textilesand apparel have not been completed. Several participants, including Vietnam, are pressing for immediate duty-free market access to these regionalmarkets and a more liberal rule of origin, either of which would have significant adverse effects on the textile industry and apparel market in the U.S. andthe NAFTA and CAFTA regions. While the completion of negotiations for the TPP (and its implementation following possible completion) is notexpected to occur in the near term, numerous participants in the U.S. textile industry are actively engaged in initiatives to eliminate or reduce thelikelihood of such an adverse outcome, or at least to delay the full potential of its impact. The Company’s long-term business strategies are also focusedon ways to maintain the Company’s profitability when and if the TPP is concluded and implemented. Competition The industry in which the Company operates is global and highly competitive. The Company competes not only as a global yarn producer, but also aspart of a regional supply chain for certain textile products. For sales of Compliant Yarns, the Company competes with a limited number of foreign anddomestic producers of polyester and nylon yarns. For sales of non-Compliant Yarns, the Company competes with a larger number of foreign and domesticproducers of polyester and nylon yarns, who can meet the required customer specifications of quality, reliability and timeliness. The Company is affectedby the importation of textile, apparel and hosiery products, which adversely impacts demand for polyester and nylon yarns from the Company in certainof its markets. Several foreign competitors in the Company’s supply chain have significant competitive advantages, including lower wages, raw materialcosts and capital costs, and favorable currency exchange rates against the U.S. dollar, any of which could make the Company’s products, or the relatedsupply chains, less competitive. While competitors have traditionally focused on high volume commodity products, they are now increasingly focusedon specialty and value-added products for which the Company has been able to generate higher margins. The Company’s major competitors for polyester yarns are O’Mara, Inc. and NanYa Plastics Corp. of America (“NanYa”) in the U.S.; AKRA, S.A. de C.V. inthe NAFTA region; and C S Central America S.A. de C.V. in the U.S. and CAFTA region. The Company’s major competitors in Brazil are Avanti IndustriaComercio Importacao e Exportacao Ltda., Polyenka Ltda., and other imported yarns and fibers. The Company’s major competitors for nylon yarns areSapona Manufacturing Company, Inc. and McMichael Mills, Inc. in the U.S. In Brazil, Petrosuape-Companhia Petroquimica de Pernambuco (“Petrosuape”), a subsidiary of Petrobras Petroleo Brasileiro S.A., a public oil companycontrolled by the Brazilian government, has constructed a polyester manufacturing complex located in the northeast sector of the country. Petrosuape isexpected to produce PTA, polyethylene terephthalate (“PET”) resin, POY and textured polyester. Once fully operational, Petrosuape will most likely be asignificant competitor because its textured polyester operations are expected to have approximately twice the capacity of the Company’s subsidiary,Unifi do Brasil. Petrosuape’s textured polyester operation started limited production in July 2010 and is expected to be in full commercial production bythe middle of calendar year 2015. 7 Raw Materials, Suppliers and Sourcing The primary raw material supplier for the Polyester Segment is NanYa for Chip and POY. For the International Segment, Reliance Industries, Ltd(“Reliance”) is the main supplier for POY. The primary suppliers of POY to the Nylon Segment are HN Fibers, Ltd., U.N.F. Industries Ltd. (“UNF”), UNFAmerica, LLC (“UNF America”), Invista S.a.r.l. (“INVISTA”), Universal Premier Fibers, LLC, and Nilit US (“Nilit”). (Each of UNF and UNF America is a50/50 joint venture between the Company and Nilit.) Currently, there are numerous suppliers available to fulfill the Company’s sourcing requirements forits recycled products. The Company produces and buys certain of its raw material fibers for Compliant Yarns from a variety of sources in both the U.S. and Israel. The Companyproduces a portion of its Chip requirements in its recycling center and purchases the remainder of its requirements from external suppliers for use in itsspinning facility. In addition, the Company purchases nylon and polyester products for resale from various suppliers. Although the Company does notgenerally have difficulty in obtaining its raw material requirements, the Company has, in the past, experienced interruptions or limitations in the supplyof certain raw materials. Products and Related Markets The Company manufactures polyester yarn and related products in the U.S., El Salvador and Brazil, and nylon yarns in the U.S. and Colombia, for a widerange of end-uses. In addition, the Company purchases certain yarns for resale to its customers. The Company processes and sells POY, as well as high-volume commodity yarns, and PVA and other specialty yarns in both domestic and international markets, with PVA yarns making up approximately 27%of consolidated sales for fiscal year 2014. The Company provides products to a variety of end-use markets, the principal ones of which are the apparelmarket, the industrial market, the furnishings market and the automotive upholstery market. The apparel market, which includes hosiery, represents approximately 65% of the Company’s sales. Apparel retail sales, supply chain inventory levelsand strength of the regional supply base are vital to this market. Generally, synthetic apparel consumed in the U.S. grows 5% to 6% per year and, over thelast five years, the Regional FTAs share of supply of U.S. synthetic apparel has remained constant at approximately 18%. The industrial market represents approximately 15% of the Company’s sales. This market includes medical, belting, tapes, filtration, ropes, protectivefabrics and awnings. The furnishings market, which includes both contract and home furnishings, represents approximately 11% of the Company’s sales. Furnishings sales arelargely dependent upon the housing market, which in turn is influenced by consumer confidence and credit availability. The automotive upholstery market represents approximately 6% of the Company’s sales and has been less susceptible to import penetration because ofthe exacting specifications and quality requirements often imposed on manufacturers of automotive upholstery and the just-in-time deliveryrequirements. Effective customer service and prompt response to customer feedback are logistically more difficult for an importer to provide. The Company also adds value to the overall supply chain for textile products, and increases consumer demand for the Company’s own products, throughthe development and introduction of branded yarns that provide unique sustainability, performance, comfort and aesthetic advantages. The Company’sbranded portion of its yarn portfolio continues to provide product differentiation to brands, retailers and consumers, and it includes products such as: ●REPREVE®, a family of eco-friendly yarns made from recycled materials. Since its introduction in 2006, REPREVE® has been theCompany’s most successful branded product. The Company’s recycled performance fibers are manufactured to provide certain performanceand/or functional properties to various types of fabrics and end products. REPREVE® can be found in the products of well-known brandsand retailers, including Ford, Haggar’s Life Khaki, Polartec, The North Face, Patagonia, Quiksilver, Volcom, REI, Perry Ellis, Sears, Macy’s,Kohl’s, Greg Norman and Belk department stores. ●Sorbtek®, a permanent moisture management yarn primarily used in performance base layer applications, compression apparel, athletic bras,sports apparel, socks and other non-apparel related items. Sorbtek® can be found in many well-known apparel brands, including adidas andAsics, and is also used by MJ Soffe and New Balance for certain U.S. military products. ●Reflexx®, a family of stretch yarns that can be found in a wide array of end-use applications, from home furnishings to performance wearand from hosiery and socks to work wear and denim. 8 ●aio® all-in-one performance yarns combine multiple performance properties into a single yarn. ●A.M.Y. ®, a yarn with permanent antimicrobial properties for odor control. Customers The Company’s Polyester Segment has approximately 360 customers, its Nylon Segment has approximately 160 customers and its International Segmenthas approximately 570 customers in a variety of geographic markets. The Company’s products are manufactured based upon product specifications bythe respective customers and are shipped based upon customer order requirements. Customer payment terms are generally consistent across the segmentsand are based on prevailing industry practices for the sale of yarn domestically or internationally. The Company’s consolidated sales are not materially dependent on a single customer or a small group of customers; no single customer accounts for tenpercent or more of the Company’s consolidated sales. The Company’s top ten customers accounted for approximately 33% of consolidated sales for fiscalyear 2014 and approximately 33% of receivables as of June 29, 2014. The Company’s sales within its Nylon Segment are materially dependent uponsales to Hanesbrands, Inc., a domestic customer that accounted for approximately 32% of the Nylon Segment’s sales for fiscal year 2014. Geographic Data Geographic information reported in conformance with generally accepted accounting principles is included in “Note 26. Business Segment Information”to the Consolidated Financial Statements included in “Item 8. Financial Statements and Supplementary Data” of this Annual Report on Form 10-K. Sales and Marketing The Company employs an internal sales force of approximately 40 persons operating out of sales offices in the U.S., Brazil, China, El Salvador, Colombiaand Europe. The Company relies on independent sales agents for sales in several other countries. The Company seeks to create strong customerrelationships and ways to build and strengthen those relationships throughout the supply chain. Through frequent communications with customers,partnering with customers in product development and engaging key downstream brands and retailers, the Company has created significant pull-throughsales and brand recognition for its products. For example, the Company works with brands and retailers to educate and create demand for its value-addedproducts. The Company then works with key fabric mill partners to develop specific fabric for those brands and retailers utilizing its PVA products. Basedon the establishment of many commercial and branded programs, this strategy has been successful for the Company. Manufacturing Processes The Company uses advanced production processes to manufacture its high quality yarns cost-effectively. The Company believes that its flexibility andknow-how in producing specialty yarns provides important development and commercialization advantages. The Company produces polyester POY forits commodity, PVA and other specialty yarns in its polyester spinning facility located in Yadkinville, North Carolina. The POY can be sold externally orfurther processed internally. The Company produces recycled polyester Chip at the Repreve Recycling Center at its Yadkinville location. This facilityallows the Company to improve the availability of recycled raw materials and significantly increase product capabilities and competitiveness in thegrowing market for REPREVE®. Additional processing of the Company’s polyester yarn products includes texturing, package dyeing, twisting, beaming and draw winding. The texturingprocess, which is common to both polyester and nylon, involves the use of high-speed machines to draw, heat and false-twist POY to produce yarn withdifferent physical characteristics, depending on its ultimate end-use. Texturing gives the yarn greater bulk, strength, stretch, consistent dye-ability and asofter feel, thereby making it suitable for use in the knitting and weaving of fabric. Package dyeing allows for matching of customer-specific colorrequirements for yarns sold into the automotive, home furnishings and apparel markets. Twisting incorporates real twist into filament yarns, which can besold for a variety of uses, such as sewing thread, home furnishings and apparel. Beaming places both textured and covered yarns onto beams to be used bycustomers in warp knitting and weaving applications. The draw winding process utilizes heat and draws POY to produce mid-tenacity, flat yarns. The Company produces its textured nylon yarn products at its Madison, North Carolina location. Additional processing of the Company’s nylon yarnproducts primarily includes covering, which involves the wrapping or air entangling of filament or spun yarn around a core yarn. This process enhances afabric’s ability to stretch, recover its original shape and resist wrinkles while maintaining a softer feel. 9 Research and Development The Company employs approximately 80 persons who work closely with the Company’s customers and others to develop a variety of yarns andimprovements to the performance properties of existing yarns and fabrics. Among other things, the Company evaluates trends and uses the latesttechnology to create innovative specialty and PVA yarns that meet the needs of evolving consumer preferences. The Company also includes, as part of itsresearch and development initiatives, the use of continuous improvement methodologies to increase its manufacturing and other operational efficiencies,both to enhance product quality and to derive cost savings. For fiscal years 2014, 2013 and 2012, the Company incurred $7,921, $6,938 and $6,763,respectively, for research and development costs (including salaries and benefits of its personnel involved in those efforts) with respect to its productdevelopment or improvement initiatives. Intellectual Property The Company has numerous U.S. registered trademarks. Due to its current brand recognition and potential growth opportunities, the Company believesthat REPREVE® is its most significant trademark. Ownership rights in U.S. registered trademarks do not expire if the trademarks are continued in use andproperly protected. Repreve Renewables, LLC, in which the Company has a 60% membership interest, also has a global, exclusive license to theproprietary biomass variety, FREEDOM® Giant Miscanthus, developed by Mississippi State University. The Company licenses certain trademarks, including Dacron and Softec™, from INVISTA. Employees The Company has approximately 2,500 employees. The number of employees in the Polyester Segment, Nylon Segment, International Segment andcorporate office are approximately 1,300, 600, 500 and 100, respectively. While employees of the Company’s foreign operations are generally unionized,none of the domestic employees are currently covered by a collective bargaining agreement. Seasonality The Company is not significantly impacted by seasonality. Excluding the effects of fiscal years with 53 weeks rather than 52 weeks, the most significanteffects on the Company’s results of operations for particular periods during a year are due to planned manufacturing shutdowns by either the Company orits customers for certain holiday or traditional shutdown periods, which are not concentrated in any one particular season. Backlog The Company’s level of unfilled orders is affected by many factors, including the timing of specific orders and the delivery time for the specific products,as well as the customer’s ability or inability to cancel the related order. As such, the Company does not consider the amount of unfilled orders, or backlog,to be a meaningful indicator of expected levels of future sales or to be material to an understanding of the Company’s business as a whole. Inflation The Company expects costs to continue to rise for certain of the consumables that it uses to produce and ship its products, as well as for its utilities andcertain employee costs and benefits. While the Company attempts to mitigate the impacts of such rising costs through its operational efficiencies andincreased selling prices, inflation may become a factor that negatively impacts the Company’s profitability. Environmental Matters The Company is subject to various federal, state and local environmental laws and regulations limiting the use, storage, handling, release, discharge anddisposal of a variety of hazardous substances and wastes used in or resulting from its operations (and to potential remediation obligations thereunder).These laws include the Federal Water Pollution Control Act, the Clean Air Act, the Resource Conservation and Recovery Act (including provisionsrelating to underground storage tanks) and the Comprehensive Environmental Response, Compensation, and Liability Act, commonly referred to as“Superfund” or “CERCLA”, and various state counterparts. The Company’s operations are also governed by laws and regulations relating to workplacesafety and worker health, principally the Occupational Safety and Health Act and regulations thereunder, which, among other things, establish exposurestandards regarding hazardous materials and noise standards, and regulate the use of hazardous chemicals in the workplace. 10® The Company believes that it has obtained, and is in compliance in all material respects with, all significant permits required to be issued by federal, stateor local law in connection with the operation of its business. The Company also believes that the operation of its production facilities and the disposal ofwaste materials are substantially in compliance with applicable federal, state and local laws and regulations, and that there are no material ongoing oranticipated capital expenditures associated with environmental control facilities necessary to remain in compliance with such provisions. The Companyincurs normal operating costs associated with the discharge of materials into the environment, but does not believe that these costs are material orinconsistent with its domestic competitors. On September 30, 2004, the Company completed its acquisition of the polyester filament manufacturing assets located in Kinston, North Carolina fromINVISTA S.a.r.l (“Invista”). The land for the Kinston site was leased pursuant to a 99 year ground lease (“Ground Lease”) with E.I. DuPont de Nemours(“DuPont”). Since 1993, DuPont has been investigating and cleaning up the Kinston site under the supervision of the U.S. Environmental ProtectionAgency (“EPA”) and the North Carolina Department of Environment and Natural Resources (“DENR”) pursuant to the Resource Conservation andRecovery Act Corrective Action program. The Corrective Action program requires DuPont to identify all potential areas of environmental concern(“AOCs”), assess the extent of containment at the identified AOCs and to clean it up to comply with applicable regulatory standards. Effective March 20,2008, the Company entered into a Lease Termination Agreement associated with conveyance of certain assets at Kinston to DuPont. This agreementterminated the Ground Lease and relieved the Company of any future responsibility for environmental remediation, other than participation with DuPont,if so called upon, with regard to the Company’s period of operation of the Kinston site, which was from 2004 to 2008. However, the Company continuesto own a satellite service facility acquired in the INVISTA transaction that has contamination from DuPont’s operations and is monitored by DENR. Thissite has been remediated by DuPont, and DuPont has received authority from DENR to discontinue remediation, other than natural attenuation. DuPont’sduty to monitor and report to DENR will be transferred to the Company in the future, at which time DuPont must pay the Company for seven years ofmonitoring and reporting costs and the Company will assume responsibility for any future remediation and monitoring of the site. At this time, theCompany has no basis to determine if or when it will have any responsibility or obligation with respect to the AOCs or the extent of any potentialliability for the same. Repreve Renewables, LLC Repreve Renewables, LLC (“Renewables”), in which the Company has a 60% membership interest (and which is separate from and unrelated to theCompany’s REPREVE® yarn products), is focused on the development and commercialization of a proprietary suite of establishment technologies and apatented plant variety, FREEDOM® Giant Miscanthus (“FGM”). Using Renewables’ technologies, FGM can be grown on marginal and underutilizedland, providing feedstock for various markets, including animal bedding, biofuel, bio-power, pulp and paper, and other bio-based products. During fiscalyear 2014, Renewables made significant progress in securing commercial-scale trials with leading integrators within the poultry bedding industry.Renewables’ near-term focus will be on developing the poultry bedding market, and the Company intends to assist Renewables in meeting this objective.Other information regarding Renewables is provided in “Item 7. Management’s Discussion and Analysis of Financial Condition and Results ofOperations” and in “Note 21. Other Operating Expense, Net” to the Consolidated Financial Statements included in “Item 8. Financial Statements andSupplementary Data” of this Annual Report on Form 10-K. Unconsolidated Affiliates The Company participates in two joint ventures that are suppliers to the Company’s Nylon Segment, with one located in the U.S. and one in Israel. TheCompany also participates in Parkdale America, LLC (“PAL”), which is a joint venture between the Company and Parkdale Incorporated (“Parkdale”) thatis a domestic cotton and synthetic spun yarn manufacturer. As of June 29, 2014, the Company had $99,229 recorded for these investments inunconsolidated affiliates. For fiscal year 2014, $19,063 of the Company’s $47,881 of income before income taxes was generated from its investments inthese unconsolidated affiliates, of which $17,846 was attributable to PAL. Other information regarding the Company’s unconsolidated affiliates isprovided in “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations” and in “Note 23. Investments inUnconsolidated Affiliates and Variable Interest Entities” to the Consolidated Financial Statements included in “Item 8. Financial Statements andSupplementary Data” of this Annual Report on Form 10-K. Available Information The Company’s website is: www.unifi.com. The information on our website is available for informational purposes and convenience only, and is notincorporated by reference in this Annual Report on Form 10-K or any other filing we make with the SEC. We make available on our website certain reports and amendments to those reports, as applicable, that the Company files with or furnishes to the SECpursuant to the Exchange Act as soon as practicable after such material is electronically filed with or furnished to the SEC. These include our annualreports on Form 10-K, quarterly reports on Form 10-Q and current reports on Form 8-K. In addition, many of our corporate governance documents areavailable on our website, including our Corporate Governance and Nominating Committee Charter, our Compensation Committee Charter, our AuditCommittee Charter, our Corporate Governance Guidelines, our Code of Business Conduct and Ethics, and our Ethical Business Conduct PolicyStatement. Copies of such materials, as well as any of our SEC reports, may also be obtained without charge by writing to Unifi, Inc., 7201 West FriendlyAvenue, Greensboro, North Carolina 27419-9109, Attention: Office of the Secretary. 11 Item 1A. RISK FACTORS Our business, operations and financial condition, and the textile industry in which we operate, are subject to various risks. Some of these risks aredescribed below, but they do not constitute all of the risks that may be applicable to us, our business or our industry. New risks may emerge from time totime, and it is not possible for us to predict all potential risks or to assess with certainty the likely impact of all risks. The discussion below is intended asa summary only of certain material risk factors. More detailed information concerning certain of the risk factors described below is contained in othersections of this Annual Report on Form 10-K, including in “Item 7. Management’s Discussion and Analysis of Financial Condition and Results ofOperations.” You should consider all such risks in evaluating the Company or making any investment decision involving the Company. Risks Relating to Our Business The Company faces intense competition from a number of domestic and foreign yarn producers and importers of textile and apparel products. Becausethe Company and the supply chains in which the Company operates do not typically operate on the basis of long-term contracts with textile andapparel customers, these competitive factors could cause the Company’s customers to shift rapidly to other producers. The Company competes not only against domestic and foreign yarn producers, but also against importers of foreign-sourced fabric and apparel into theU.S. and other countries in which the Company does business (particularly in Brazil with respect to commodity yarn products). The primary competitivefactors in the textile industry include price, quality, product styling and differentiation, flexibility of production and finishing, delivery time andcustomer service. The needs of certain customers and the characteristics of particular products determine the relative importance of these various factors.A large number of the Company’s foreign competitors have significant competitive advantages, including lower labor and raw materials costs,government subsidies, and favorable currency exchange rates against the U.S. dollar. If any of these advantages increase, or if new and/or largercompetitors emerge in the future, the Company’s products could become less competitive, and its sales and profits may decrease as a result. Also, whilethese foreign competitors have traditionally focused on commodity production, they are now increasingly focused on value-added products, where theCompany has been able to generate higher margins. The Company may not be able to continue to compete effectively with imported foreign-made textileand apparel products, which would materially adversely affect its business, financial condition, results of operations or cash flows. In Brazil, Petrosuape’s textured polyester operations are expected to have approximately twice the capacity of the Company’s subsidiary, Unifi do Brasil,when Petrosuape reaches full commercial production of textured polyester, which is expected by the middle of calendar year 2015. Such capacityexpansion may negatively impact the synthetic textile filament market in Brazil, thereby negatively impacting the operating results of Unifi do Brasiland the Company on a consolidated basis. The significant price volatility of many of the Company’s raw materials and rising energy costs may result in increased production costs, which theCompany may not be able to pass on to its customers, or be able to pass on without a time lag that adversely affects the Company during one or moreperiods. A significant portion of the Company’s raw materials are derived from petroleum-based chemicals. The prices for petroleum and petroleum-relatedproducts (and energy costs) are volatile and dependent on global supply and demand dynamics, including geo-political risks. While the Company entersinto raw material supply agreements from time to time, these agreements typically provide index pricing based on quoted feedstock market prices.Therefore, supply agreements provide only limited protection against price volatility. While the Company has at times in the past been able to increasesales prices in response to increased raw material costs, the Company has not always been able to do so. The Company has lost in the past (and expectsthat it may lose in the future) customers to its competitors as a result of price increases. In addition, competitors may be able to obtain raw materials at alower cost due to market regulations that favor local producers in certain foreign locations where the Company operates, and certain other marketregulations that favor the Company over other producers may be amended or repealed. Additionally, inflation can have a long-term impact by increasingthe costs of materials, labor and/or energy, any of which costs may adversely impact the Company’s ability to maintain satisfactory margins. If theCompany is not able to fully pass on such cost increases to customers in a timely manner (or if it loses a large number of customers to competitors as aresult of price increases), the result could be material and adverse to its business, financial condition, results of operations or cash flows. The Company depends upon limited sources for certain of its raw materials, and interruptions in supply could increase its costs of production, causeproduction inefficiencies, or lead to a halt in production in an extreme case. The Company depends on a limited number of third parties for certain raw material supplies such as POY and Chip. Although alternative sources of rawmaterials exist, the Company may not be able to obtain adequate supplies of such materials on acceptable terms, or at all, from other sources. TheCompany is dependent on NAFTA and CAFTA qualified suppliers of raw material for the production of Compliant Yarns. These suppliers are also at riskwith their raw material supply chains. Any significant disruption or curtailment in the supply of any of its raw materials could cause the Company toreduce (or cease, in an extreme case) its production for an extended period, or require the Company to increase its pricing, which could have a materialadverse effect on its business, financial condition, and results of operations or cash flows. 12 The Company has significant foreign operations, and its consolidated results of operations may be adversely affected by the risks associated with doingbusiness in foreign locations, including the risk of fluctuations in foreign currency exchange rates. The Company has operations in Brazil, China, Colombia and El Salvador, and participates in a foreign joint venture located in Israel. The Companyserves customers in Canada, Mexico and various countries in Europe, Central America, South America and Asia. The Company’s foreign operations aresubject to certain political, tax, economic and other uncertainties not encountered by its domestic operations that can materially impact the Company’ssupply chains or other aspects of its foreign operations. The risks of international operations include trade barriers, duties, exchange controls, nationaland regional labor strikes, social and political unrest, general economic risks, compliance with a variety of foreign laws (including tax laws), the difficultyof enforcing agreements and collecting receivables through foreign legal systems, taxes on distributions or deemed distributions to the Company or anyof its U.S. subsidiaries, maintenance of minimum capital requirements, and import and export controls. The Company’s results of operations and businesscould be adversely affected as a result of a significant adverse development with respect to any of these matters. Through its foreign operations, the Company is also exposed to currency exchange rate fluctuations. Fluctuations in foreign exchange rates will impactperiod-to-period comparisons of the Company’s reported results. Additionally, the Company operates in countries with foreign exchange controls. Thesecontrols may limit the Company’s ability to repatriate funds from its international operations and joint venture or otherwise to convert local currenciesinto U.S. dollars. These limitations could adversely affect the Company’s ability to access cash from these operations. Unforeseen or recurring operational problems at any of the Company’s facilities may cause significant lost production. The Company’s manufacturing processes could be affected by operational problems that could impair its production capability. Disruptions at any of itsfacilities could be caused by maintenance outages; prolonged power failures or reductions; a breakdown, failure or substandard performance ofequipment; the effect of noncompliance with material environmental requirements or permits; disruptions in the transportation infrastructure, includingrailroads, bridges, tunnels or roads; fires, floods, earthquakes or other catastrophic disasters; labor difficulties; or other operational problems. Anyprolonged disruption in operations at any of its facilities could cause significant lost production, which would have a material adverse effect on theCompany’s business, financial condition, results of operations or cash flows. The Company is implementing various strategic business initiatives, and the success of the Company’s business will depend on its ability to effectivelydevelop and implement these initiatives. The Company is exploring, developing and implementing various strategic business initiatives to improve the Company’s competitive advantage andprofitability and enhance shareholder value. These initiatives include expanding branded PVA yarns, increasing the market penetration of REPREVE®product offerings, and expanding production capabilities for recycled yarn products more generally. These activities require significant financial andmanagement commitments, outside of day-to-day operations. If the Company is unable to implement an important initiative in a timely manner, or ifthose initiatives turn out to be ineffective or are executed improperly, the Company’s business, financial condition, results of operations or cash flowscould be adversely affected. The Company’s future success will depend in part on its ability to protect its intellectual property rights, and the Company’s inability to enforce theserights could cause it to lose sales and its competitive advantage. The Company’s success depends in part upon its ability to protect and preserve its rights in the trademarks and other intellectual property it owns orlicenses, including its proprietary know-how, methods and processes, and the intellectual property related to its REPREVE® brand. The Company relieson the trademark, copyright and trade secret laws of the U.S. and other countries, as well as nondisclosure and confidentiality agreements, to protect itsintellectual property rights. However, the Company may be unable to prevent third parties, employees or contractors from using its intellectual propertywithout authorization, breaching nondisclosure or confidentiality agreements with it, or independently developing technology that is similar to theCompany’s property. The use of the Company’s intellectual property by others without authorization may reduce any competitive advantage that it hasdeveloped, cause it to lose sales or otherwise harm its business. 13 The success of the Company depends on the ability of its senior management team, as well as the Company’s ability to attract and retain other keypersonnel. The Company’s success is highly dependent on the abilities of its management team. The management team must be able to work together effectively tosuccessfully conduct the Company’s current operations, as well as implement the Company’s important strategic initiatives. The Company does not haveemployment agreements with the members of its management team and cannot ensure investors that any of these individuals will remain with theCompany. The Company does not have key man life insurance policies on any of the members of the management team. The failure to retain keymanagers or key members of the Company’s design, product development, manufacturing, merchandising or marketing staff, or to hire additionalqualified personnel for its operations, could be detrimental to the Company’s operations and ability to execute its strategic business initiatives. The Economic Adjustment Assistance to Users of Upland Cotton may be discontinued, which could adversely affect PAL and thereby the Company’searnings and cash flows from that joint venture. PAL, which is one of the Company’s joint ventures, receives economic adjustment payments (“EAP”) from the Commodity Credit Corporation under theEconomic Adjustment Assistance to Users of Upland Cotton. The economic assistance received under this program must be used to acquire, construct,install, modernize, develop, convert or expand land, plant, buildings, equipment or machinery directly attributable to the purpose of manufacturingupland cotton into eligible cotton products in the U.S. Should PAL no longer meet the criteria to receive economic assistance under the program, orshould the program be discontinued, PAL’s business could be significantly impacted, which would adversely affect the Company. The Company has made (and may continue to make) investments in entities that it does not control, which subjects the Company to uncertainties abouttheir operating performance and their ability and willingness to make distributions of profits or cash flow to the Company, and to risks from relianceon their financial information. The Company has established joint ventures, and made minority interest investments, that the Company does not control. While these investments aredesigned to advance important business interests of the Company, the Company does not have majority voting control of these entities or the abilityotherwise to control their policies, management or affairs. The interests of persons who control these entities may differ from the Company’s, and thosepersons may cause an entity to take actions that are not in the Company’s best interest. Among other things, the Company’s inability to control theseentities may adversely affect its ability to receive distributions from them or to fully implement its business plan. The incurrence of debt or entry intoother agreements by any such entity may result in restrictions or prohibitions on that entity’s ability to pay dividends or make other distributions to theCompany. Even where such entities are not restricted by contract or by law from making distributions, the Company may not be able to influence theoccurrence or timing of such distributions. In addition, if any of the other investors in these entities fails to observe its commitments, that entity may notbe able to operate according to its business plan, or the Company may be required to increase its level of investment commitment. If any of these eventswere to occur, the Company’s business, results of operations, financial condition or cash flows could be adversely affected. The Company also relies on accurate financial reporting from these entities for preparation of the Company’s quarterly and annual financial statements.Errors in the financial information reported by these entities could be material to the Company and may require it to restate past financial statements. Anysuch restatements could have a material adverse effect on the Company or the market price of its common stock. The Company requires cash to service its indebtedness and fund capital expenditures and strategic initiatives, and its ability to generate sufficient cashfor those purposes depends on many factors beyond its control. The Company’s principal sources of liquidity are cash flows generated from operations and borrowings under its credit facility. The Company’s ability tomake payments on its indebtedness, to fund planned capital expenditures and to fund strategic initiatives will depend on its ability to generate futurecash flows from operations. This, to a certain extent, is subject to general economic, financial, competitive, legislative, regulatory and other factors thatare beyond the Company’s control. The business may not generate sufficient cash flows from operations, and future borrowings may not be available tothe Company in amounts sufficient, to enable the Company to pay its indebtedness and to fund its other liquidity needs. Any such development wouldhave a material adverse effect on the Company. Risks Relating to the Textile Industry A decline in general economic or political conditions, and changes in consumer spending, could cause a decline in demand for textile products. The Company’s products are used in the production of fabric primarily for the apparel, hosiery, home furnishings, automotive, industrial and other similarend-use markets. Demand for furniture and durable goods is often affected significantly by economic conditions that have global or regional industry-wide consequences. Demand for a number of categories of apparel also tends to be tied to economic cycles and customer preferences that affect the textileindustry generally. Demand for textile products, therefore, tends to vary with the business cycles of the U.S. and other economies, as well as changes inglobal trade flows, and economic and political conditions. 14 Changes in the trade regulatory environment could weaken the Company’s competitive position significantly and have a material adverse effect on itsbusiness. A number of markets within the textile industry in which the Company sells its products – particularly the apparel, hosiery and home furnishings markets– are subject to intense foreign competition. Other markets within the textile industry in which the Company sells its products may in the future becomesubject to more intense foreign competition. There are currently a number of trade regulations and duties in place to protect the U.S. textile industryagainst competition from low-priced foreign producers, such as those in China and Vietnam. Changes in such trade regulations or duties may make theprice of the Company’s products less attractive than the goods of its competitors or the finished apparel products of a competitor in the supply chain,which could have a material adverse effect on the Company’s business, financial condition, results of operations or cash flows. An increase of illegal transshipments of textile and apparel goods into the U.S. (or into the NAFTA or CAFTA regions) could have a material adverseeffect on the Company’s business. According to industry experts and trade associations, there has been a significant amount of illegal transshipments of apparel products into the U.S. andinto certain other countries in the NAFTA and CAFTA regions. Such illegal transshipments, at whatever level they reach, may negatively impact themarkets in which the Company competes. Illegal transshipment involves circumventing duties by falsely claiming that textiles and apparel are productsof a particular country of origin (or include yarn of a particular country of origin) to avoid paying higher duties or to receive benefits from regional freetrade agreements, such as NAFTA and CAFTA. If illegal transshipments are not monitored, and if enforcement is not effective to limit them, theseshipments could have a material adverse effect on the Company’s business, financial condition, results of operations or cash flows. The outcome of negotiations for a trade agreement among the TPP participating countries is unpredictable and could lead to provisions thatmaterially and adversely affect the U.S. textile industry and apparel market in future years. The U.S. government is engaged in negotiations that have been ongoing for several years relating to the TPP. Other countries participating in the TPPnegotiations include Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore and Vietnam. Several of these countries,including Vietnam, are seeking immediate duty-free treatment (or the lack of a yarn forward rule of origin) in the final TPP with respect to yarns, fabricsand most apparel. Such an outcome in the TPP, when and if the TPP is concluded and implemented, could materially and adversely affect the U.S. textileindustry and apparel market and Western Hemisphere supply chains in future years. Item 1B. UNRESOLVED STAFF COMMENTS None. Item 1C. EXECUTIVE OFFICERS OF THE REGISTRANT The following is a description of the name, age, position and offices held, and the period served in such position or offices, for each of the executiveofficers of the Company. Chairman of the Board and Chief Executive Officer WILLIAM L. JASPER — Age: 61 – Mr. Jasper has been Chairman of the Board since February 2011 and Chief Executive Officer since September 2007.From September 2007 to February 2011, he was also President of the Company. Mr. Jasper joined the Company in September 2004, was appointed as theGeneral Manager of the Polyester Division in June 2005, and in April 2006 was promoted to Vice President of Sales. Prior to joining the Company, he wasthe Director of INVISTA’s Dacron® polyester filament business. Before working at INVISTA, Mr. Jasper had held various management positions inoperations, technology, sales and business for DuPont since 1980. He has been a member of the Board since September 2007 and is Chair of the Board’sExecutive Committee. President and Chief Operating Officer R. ROGER BERRIER — Age: 45 – Mr. Berrier has been President and Chief Operating Officer since February 2011. Mr. Berrier had been the ExecutiveVice President of Sales, Marketing and Asian Operations of the Company from September 2007 until his promotion in 2011. Prior to 2007, Mr. Berrierhad been Vice President of Commercial Operations (since April 2006) and Commercial Operations Manager responsible for corporate productdevelopment, marketing and brand sales management (from April 2004 to April 2006). Mr. Berrier joined the Company in 1991 and had held variousother management positions within operations, including international operations, machinery technology, research and development and quality controlbefore assuming the above positions. He has been a member of the Board since September 2007 and is a member of the Board’s Executive Committee. 15 Vice President and Chief Financial Officer JAMES M. OTTERBERG — Age: 43 – Mr. Otterberg has been Vice President and Chief Financial Officer since October 23, 2013, having served as interimChief Financial Officer from August 12, 2013. Mr. Otterberg is also the Company’s principal accounting officer, a role he has held since October 2011.Mr. Otterberg was employed by the Company’s principal operating subsidiary, Unifi Manufacturing, Inc. (“UMI”), from June 2011 to October 2013 as itsVice President and Chief Accounting Officer, and previously from October 1999 to December 2003 as Director – Joint Ventures and Alliances andCorporate Financial Analyst. Mr. Otterberg also held various financial positions for Polymer Group, Inc. from 2004 to 2011, including Vice President –Finance U.S. from February 2008 through May 2011. Vice President of Manufacturing THOMAS H. CAUDLE, JR. — Age: 62 – Mr. Caudle has been the Company’s Vice President of Manufacturing since October 2006. Before that time, hewas Vice President of Global Operations of the Company (from April 2003 until October 2006), UMI’s Senior Vice President in charge of manufacturing(since July 2000) and Vice President of Manufacturing Services (since January 1999). Mr. Caudle has been an employee of the Company since 1982. Each of the executive officers was reelected (or elected, in the case of Mr. Otterberg) to his current position by the Board at its meeting on October 23,2013. Each executive officer serves in his position at the pleasure of the Board. No executive officer has a family relationship as close as first cousin withany other executive officer or director. Item 2. PROPERTIES The following table contains information about the principal properties owned or leased by the Company as of June 29, 2014: LocationDescriptionPolyester Segment Properties Domestic Yadkinville, NCFive plants and four warehouses (1)Reidsville, NCOne plant (1) Foreign Ciudad Arce, El SalvadorOne plant and one warehouse (2) Nylon Segment Properties Domestic Madison, NCOne plant and one warehouse (1) Foreign Bogota, ColombiaOne plant (1) International Segment Properties Foreign Alfenas, BrazilOne plant and one warehouse (1)Sao Paulo, BrazilOne corporate office (2) and two sales offices (2)Suzhou, ChinaOne sales office (2) and one warehouse (2)(1) Owned in fee simple (2) Leased facilities In addition to the above properties, the Company owns property located at 7201 West Friendly Avenue in Greensboro, North Carolina, which includes abuilding that serves as the Company’s corporate headquarters and administrative offices for all of its segments and a sales office. Such property consists ofa tract of land containing approximately nine acres, and the building contains approximately 100,000 square feet. As of June 29, 2014, the Company owned approximately 4.4 million square feet of manufacturing, warehouse and office space. In addition, RepreveRenewables, LLC leases approximately 1,500 acres of farm land located primarily in Georgia, North Carolina and Mississippi. 16 Management believes all of the Company’s operating properties are well maintained and in good condition. In fiscal year 2014, the Company’smanufacturing plants in the Polyester, Nylon and International Segments operated below capacity. Management does not perceive any capacityconstraints in the foreseeable future. Item 3. LEGAL PROCEEDINGS There are no pending legal proceedings, other than ordinary routine litigation incidental to the Company’s business, to which the Company is a party orto which any of its property is the subject. Item 4. MINE SAFETY DISCLOSURES Not applicable. 17 PART II Item 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITYSECURITIES The Company’s common stock is listed for trading on the New York Stock Exchange (“NYSE”) under the symbol “UFI.” The following table sets forththe closing, high and low sales prices of the common stock for the Company’s two most recent fiscal years. Close High Low Fiscal year 2014: First quarter ended September 29, 2013 $23.63 $24.26 $20.47 Second quarter ended December 29, 2013 27.40 27.97 22.24 Third quarter ended March 30, 2014 22.33 27.58 20.82 Fourth quarter ended June 29, 2014 27.52 28.52 20.76 Fiscal year 2013: First quarter ended September 23, 2012 $11.98 $12.36 $10.44 Second quarter ended December 23, 2012 13.48 14.13 11.90 Third quarter ended March 24, 2013 18.71 19.30 11.28 Fourth quarter ended June 30, 2013 20.67 22.53 17.18 As of September 3, 2014, there were 281 record holders of the Company’s common stock. A significant number of the outstanding shares of commonstock that are beneficially owned by individuals and entities are registered in the name of Cede & Co. Cede & Co. is a nominee of the Depository TrustCompany, a securities depository for banks and brokerage firms. The Company estimates that there are 3,973 beneficial owners of its common stock. No dividends were paid in the past two fiscal years, and the Company does not intend to pay cash dividends in the foreseeable future. The Company’scurrent debt obligations contain certain restricted payment and restricted investment provisions, including a restriction on the payment of dividends andshare repurchases should its borrowing capacity fall below certain thresholds. Information regarding the Company’s debt obligations is provided in “Note12. Long-Term Debt” to the Consolidated Financial Statements included in “Item 8. Financial Statements and Supplementary Data” of this AnnualReport on Form 10-K. Purchases of Equity Securities On January 22, 2013, the Board approved a stock repurchase program (the “2013 SRP”) to acquire up to $50,000 of the Company’s common stock. TheCompany completed its repurchase of shares under the 2013 SRP in March 2014. On April 23, 2014, the Board approved a new stock repurchase program (the “2014 SRP”) to acquire up to an additional $50,000 of the Company’scommon stock. Under the 2014 SRP (as was the case under the 2013 SRP), the Company has been authorized to repurchase shares at prevailing marketprices, through open market purchases or privately negotiated transactions at such times and prices and in such manner as determined by management,subject to market conditions, applicable legal requirements, contractual obligations and other factors. Repurchases are expected to be financed throughcash generated from operations and borrowings, and are subject to applicable limitations and restrictions as set forth in the credit agreement governingthe Company’s debt obligations. The 2014 SRP has no stated expiration or termination date, and there is no time limit or specific time frame otherwise forrepurchases. The Company may discontinue repurchases at any time that management determines additional purchases are not beneficial or advisable. Through September 3, 2014, the Company has repurchased 2,592 shares of common stock at a total cost of $55,866, including all associated commissioncosts, since the inception of the 2013 SRP and the 2014 SRP. The following table summarizes the Company’s purchases of its common stock during the fiscal quarter ended June 29, 2014, all of which were madeunder the 2014 SRP. Period Total Number ofShares Purchased Average Price Paidper Share Total Number ofSharesPurchased as Part ofPublicly AnnouncedPlans or Programs MaximumApproximateDollar Value ofSharesthat May Yet BePurchased Under thePlans or Programs 3/31/14 – 4/29/14 25 $21.82 25 $49,446 4/30/14 – 5/29/14 150 $22.71 150 46,032 5/30/14 – 6/29/14 76 $24.62 76 44,169 Total 251 $23.19 251 18 PERFORMANCE GRAPH - SHAREHOLDER RETURN ON COMMON STOCK Set forth below is a line graph comparing the cumulative total shareholder return on the Company’s common stock with (i) the New York Stock ExchangeComposite Index, a broad equity market index, and (ii) a peer group selected by the Company in good faith (the “Peer Group”), assuming in each case, theinvestment of $100 on June 28, 2009 and reinvestment of dividends. Including the Company, the Peer Group consists of eleven publicly traded textilecompanies, the other ten of which are: Albany International Corp., Culp, Inc., Dixie Group, Inc., The Hallwood Group, Inc., Hampshire Group, Limited,Interface, Inc., Joe’s Jeans Inc., JPS Industries, Inc., Lydall, Inc., and Mohawk Industries, Inc. All per share prices of the Company’s common stock have been retroactively adjusted to reflect the Company’s November 3, 2010 1-for-3 reverse stocksplit. June 28, 2009 June 27, 2010 June 26, 2011 June 24, 2012 June 30, 2013 June 29, 2014 Unifi, Inc. $ 100.00 $ 285.11 $ 286.76 $ 283.45 $ 488.65 $ 650.59 NYSE Composite 100.00 117.17 141.25 138.50 171.10 209.92 Peer Group 100.00 156.25 191.51 183.95 312.05 378.39 19 Item 6. SELECTED FINANCIAL DATA The following table presents selected historical consolidated financial data. The data should be read in conjunction with the Company’s historicalconsolidated financial statements for each of the periods presented, as well as “Management’s Discussion and Analysis of Financial Condition andResults of Operations” included elsewhere in this Annual Report on Form 10-K. For the Fiscal Years Ended June 29, 2014 June 30, 2013 June 24, 2012 June 26, 2011 June 27, 2010 Number of fiscal weeks 52 53 52 52 52 Operations Data: Net sales $687,902 $713,962 $705,086 $712,812 $622,618 Gross profit 83,262 73,104 54,396 74,652 73,251 Selling, general and administrative expenses 46,203 47,386 43,482 44,659 47,934 Operating income 31,483 22,463 8,632 28,692 25,388 Interest expense 4,329 4,489 16,073 19,190 21,889 Equity in earnings of unconsolidated affiliates (19,063) (11,444) (19,740) (24,352) (11,693)Income from continuing operations before income taxes 47,881 29,014 8,849 32,422 18,371 Provision (benefit) for income taxes (1) 20,161 13,344 (1,979) 7,333 7,686 Income from continuing operations, net of tax 27,720 15,670 10,828 25,089 10,685 Net income attributable to Unifi, Inc. (2) 28,823 16,635 11,491 25,089 10,685 Per common share: Net income from continuing operations attributable to Unifi,Inc. Basic (3) $1.52 $0.84 $0.57 $1.25 $0.53 Diluted (3) $1.47 $0.80 $0.56 $1.22 $0.52 Cash Flow Data: Net cash provided by operating activities $56,357 $50,509 $43,309 $11,880 $20,581 Depreciation and amortization expenses 17,896 24,584 27,135 25,977 27,416 Capital expenditures 19,091 8,809 6,354 20,539 13,112 Distributions received from unconsolidated affiliates 13,214 14,940 10,616 5,900 3,265 Share repurchases (4) 36,551 19,315 — — — Cash dividends declared per common share $— $— $— $— $— June 29, 2014 June 30, 2013 June 24, 2012 June 26, 2011 June 27, 2010 Balance Sheet Data: Cash and cash equivalents $15,907 $8,755 $10,886 $27,490 $42,691 Property, plant and equipment, net 123,802 115,164 127,090 151,027 151,499 Total assets 469,067 455,466 482,233 537,376 504,512 Total debt 99,488 97,753 121,552 168,664 179,390 Total shareholders’ equity 286,738 286,480 290,780 299,655 259,896 Working capital (5) 150,925 161,885 166,485 212,969 174,464 (1) For fiscal year 2012, the Company released previously recorded valuation allowances against certain of its domestic deferred tax assets, resulting in a$6,017 benefit recorded to income tax expense.(2) Amounts are net of non-controlling interest for the years presented.(3) All amounts per share have been retroactively adjusted to reflect the November 3, 2010 1-for-3 reverse stock split.(4) Share repurchases represent common stock repurchased and retired under publicly announced programs.(5) Working capital represents current assets less current liabilities. 20 Item 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Overview and Significant General Matters The Company processes and sells high-volume commodity yarns, specialized yarns designed to meet certain customer specifications, and PVA yarns withenhanced performance characteristics. The Company sells yarns made from polyester and nylon to other yarn manufacturers and knitters and weavers thatproduce fabric for the apparel, hosiery, home furnishings, automotive upholstery, industrial and other end-use markets. The Company’s polyesterproducts include Chip, POY, textured, solution and package dyed, twisted, beamed and draw wound yarns; each is available in virgin or recycledvarieties (the latter made from both pre-consumer yarn waste and post-consumer waste, including plastic bottles). The Company’s nylon products includetextured, solution dyed and covered spandex products. The Company maintains one of the textile industry’s most comprehensive yarn product offerings, and it has ten manufacturing operations in fourcountries and participates in joint ventures in Israel and the U.S. The Company’s principal geographic markets for its products are located in the U.S.,Canada, Mexico, Central America and South America. In addition, the Company has a wholly-owned subsidiary in China focused on the sale andpromotion of the Company’s PVA and other specialty products in the Asian textile market, primarily in China, as well as in the European market. TheCompany has three operating segments which are also its reportable segments: the Polyester Segment, the Nylon Segment and the International Segment. For the fifth consecutive fiscal year, the Company reported net income, which was $28,823 or $1.52 per basic share for fiscal year 2014, as our Polyesterand Nylon Segments improved significantly, driven by growth in PVA products as part of our continued mix enrichment strategy, and lower polyester rawmaterial costs. Our International Segment, which did not meet expectations but showed improvement as the year progressed, was impacted negatively bylower margins in Brazil due to price pressures from competing imported yarn and the devaluation of the Brazilian currency and lower sales volumes byour Chinese subsidiary due primarily to soft market conditions. Core Business Strategies The Company remains committed to making improvements to its core business, growing the market for its value-added products, and generating positivecash flow from operations to fund select strategic growth opportunities and share repurchases. The Company’s core strategies include: continuouslyimproving all operational and business processes; enriching our product mix by aggressively growing our PVA products and increasing our market shareof compliant yarns; deriving value from sustainability based initiatives, including polyester and nylon recycling; increasing sales in global growthmarkets, including Central America, Brazil, and China; and maintaining our beneficial joint venture relationships. The Company expects to continue tofocus on these strategies through investments in select product and geographic growth opportunities related to its core business. PVA Products and REPREVE® The Company remains committed to growing the business for its value-added products and believes its research and development work with brands andretailers continues to create new, world-wide sales opportunities. The Company believes it can continue to increase its PVA sales as a percentage of itsoverall sales volume and grow its global PVA sales, by approximately 10-12% per year, to create overall mix enrichment and margin gains. TheCompany’s PVA products represent approximately 27%, 25% and 24% of consolidated sales for fiscal years 2014, 2013 and 2012, respectively. TheCompany’s strategy of enriching its product mix through a focus on PVA products helps insulate it from the pressures of imports of low-pricedcommodity yarn and helps to establish the Company as an innovation leader in its core markets. REPREVE® is the flagship brand in the Company’s PVAportfolio, and continues to grow at a faster pace than other PVA products. The increasing success and consumer awareness of our REPREVE® brandcontinues to provide new opportunities for growth, allowing us to expand into new end-uses and markets for REPREVE®, as well as continuing to growthe brand with current customers. PVA Expansion and Capital Spending During fiscal year 2014, we spent $19,091 on capital expenditures, which included completing the installation of our second recycling center expansion,adding 30 million pounds of annual capacity. The Company expects capital expenditures to double for fiscal year 2015. We expect to increase ourpolyester yarn capacity by adding texturing machines at the Company’s locations in Yadkinville, North Carolina, Madison, North Carolina and ElSalvador and to improve our manufacturing flexibility, including small production run capabilities. These initiatives are designed to support theCompany’s mix enrichment strategies, while also improving our ability to better service customers and handle an increasingly complex product mix. Inaddition, to further leverage the continued success and growth of REPREVE® and to secure our future supply of plastic bottles, the Company is alsoexploring potential backward integration opportunities into bottle washing. 21 Stock Repurchases In March 2014, the Company completed the $50,000 stock repurchase program approved by the Board of Directors (“Board”) in January 2013. In April2014, the Board approved a new stock repurchase program to acquire up to an additional $50,000 of the Company’s common stock. During fiscal year2014, the Company repurchased a total of 1,524 shares, at an average price of $23.96, under these repurchase programs. (As of September 3, 2014, theCompany repurchased a total of 2,592 shares at an average price of $21.54.) The Company will continue to evaluate opportunities to use excess cash flowfrom operations or existing borrowings to repurchase additional stock under the new repurchase program, while maintaining sufficient liquidity tosupport its operational needs and fund future strategic growth opportunities. Key Performance Indicators and Non-GAAP Financial Measures The Company continuously reviews performance indicators to measure its success. The following are the indicators management uses to assessperformance of the Company’s business: ●sales volume for the Company and for each of its reportable segments; ●unit conversion margin, which represents unit net sales price less unit raw material costs, for the Company and for each of its reportablesegments; ●gross profit and gross margin for the Company and for each of its reportable segments; ●Earnings Before Interest, Taxes, Depreciation and Amortization (“EBITDA”), which represents net income or loss attributable to Unifi, Inc.before net interest expense, income tax expense and depreciation and amortization expense; ●Adjusted EBITDA Including Equity Affiliates, which represents EBITDA adjusted to exclude non-cash compensation expense, gains orlosses on extinguishment of debt, loss on previously held equity interest and certain other adjustments. Such other adjustments includeoperating expenses for Repreve Renewables, restructuring charges and start-up costs, gains or losses on sales or disposals of property, plantand equipment, currency and derivative gains or losses, and other operating or non-operating income or expense items necessary tounderstand and compare the underlying results of the Company; ●Adjusted EBITDA, which represents Adjusted EBITDA Including Equity Affiliates adjusted to exclude equity in earnings and losses ofunconsolidated affiliates (the Company may, from time to time, change the items included within Adjusted EBITDA); ●Segment Adjusted Profit, which equals segment gross profit, plus segment depreciation and amortization, less segment selling, general andadministrative expenses (“SG&A”), net of segment other adjustments; ●Adjusted Working Capital (receivables plus inventory, less accounts payable and certain accrued expenses), which is an indicator of theCompany’s production efficiency and ability to manage its inventory and receivables; and ●Working capital, which represents current assets less current liabilities. EBITDA, Adjusted EBITDA Including Equity Affiliates, Adjusted EBITDA, Segment Adjusted Profit and Adjusted Working Capital are financialmeasurements that management uses to facilitate its analysis and understanding of the Company’s business operations. Management believes they areuseful to investors because they provide a supplemental way to understand the underlying operating performance and debt service capacity of theCompany. The calculations of EBITDA, Adjusted EBITDA Including Equity Affiliates, Adjusted EBITDA, Segment Adjusted Profit and AdjustedWorking Capital are subjective measures based on management’s belief as to which items should be included or excluded in order to provide the mostreasonable view of the underlying operating performance of the business. EBITDA, Adjusted EBITDA Including Equity Affiliates, Adjusted EBITDA,Segment Adjusted Profit and Adjusted Working Capital are not determined in accordance with generally accepted accounting principles (“GAAP”) andshould not be considered a substitute for performance measures determined in accordance with GAAP. 22 Results of Operations Fiscal years 2014, 2013 and 2012 are comprised of 52 weeks, 53 weeks and 52 weeks, respectively. The following table presents a summary of net incomeattributable to Unifi, Inc.: For the Fiscal Years Ended June 29, 2014 June 30, 2013 June 24, 2012 Net sales $687,902 $713,962 $705,086 Cost of sales 604,640 640,858 650,690 Gross profit 83,262 73,104 54,396 Selling, general and administrative expenses 46,203 47,386 43,482 Provision (benefit) for bad debts 287 (154) 211 Other operating expense, net 5,289 3,409 2,071 Operating income 31,483 22,463 8,632 Interest expense, net 2,539 3,791 14,152 Loss on extinguishment of debt — 1,102 3,203 Loss on previously held equity interest — — 3,656 Other non-operating expense (income) 126 — (1,488)Equity in earnings of unconsolidated affiliates (19,063) (11,444) (19,740)Income before income taxes 47,881 29,014 8,849 Provision (benefit) for income taxes 20,161 13,344 (1,979)Net income including non-controlling interest 27,720 15,670 10,828 Less: net (loss) attributable to non-controlling interest (1,103) (965) (663)Net income attributable to Unifi, Inc. $28,823 $16,635 $11,491 The reconciliations of net income attributable to Unifi, Inc. to EBITDA, Adjusted EBITDA Including Equity Affiliates and Adjusted EBITDA are asfollows: For the Fiscal Years Ended June 29, 2014 June 30, 2013 June 24, 2012 Net income attributable to Unifi, Inc. $28,823 $16,635 $11,491 Provision (benefit) for income taxes 20,161 13,344 (1,979)Interest expense, net 2,539 3,791 14,152 Depreciation and amortization expense 17,334 23,860 26,225 EBITDA $68,857 $57,630 $49,889 Loss on extinguishment of debt — 1,102 3,203 Loss on previously held equity interest — — 3,656 Non-cash compensation expense 2,690 2,287 2,382 Operating expenses for Renewables 1,440 1,293 911 Restructuring charges, net 1,273 813 71 Foreign currency transaction losses (gains) 504 (132) 270 Net loss on sale or disposal of assets 475 243 369 Other, net 1,420 858 (1,211)Adjusted EBITDA Including Equity Affiliates $76,659 $64,094 $59,540 Equity in earnings of unconsolidated affiliates (19,063) (11,444) (19,740)Adjusted EBITDA $57,596 $52,650 $39,800 The reconciliations of Adjusted EBITDA to Segment Adjusted Profit are as follows: For the Fiscal Years Ended June 29, 2014 June 30, 2013 June 24, 2012 Adjusted EBITDA $57,596 $52,650 $39,800 Non-cash compensation expense (2,690) (2,287) (2,382)Provision (benefit) for bad debts 287 (154) 211 Bad debt recovery adjustment — 383 — Other, net (excluding depreciation) (135) (174) (292)Segment Adjusted Profit $55,058 $50,418 $37,337 Segment Adjusted Profit by reportable segment is as follows: For the Fiscal Years Ended June 29, 2014 June 30, 2013 June 24, 2012 Polyester $30,696 $23,900 $12,913 Nylon 12,801 11,437 11,227 International 11,561 15,081 13,197 Total Segment Adjusted Profit $55,058 $50,418 $37,337 23 Selected financial information for the Polyester, Nylon and International Segments is presented below: For the Fiscal Year Ended June 29, 2014 Polyester Nylon International Total Net sales $389,172 $163,824 $134,906 $687,902 Cost of sales 342,393 143,649 118,598 604,640 Gross profit 46,779 20,175 16,308 83,262 Selling, general and administrative expenses 28,422 9,531 8,250 46,203 Restructuring charges (recoveries) 356 (24) — 332 Other operating expense, net 82 — — 82 Segment operating profit $17,919 $10,668 $8,058 $36,645 For the Fiscal Year Ended June 30, 2013 Polyester Nylon International Total Net sales $398,707 $164,085 $151,170 $713,962 Cost of sales 363,545 146,033 131,280 640,858 Gross profit 35,162 18,052 19,890 73,104 Selling, general and administrative expenses 29,114 9,930 8,342 47,386 Restructuring recoveries — (135) — (135)Other operating expense, net — 42 — 42 Segment operating profit $6,048 $8,215 $11,548 $25,811 For the Fiscal Year Ended June 24, 2012 Polyester Nylon International Total Net sales $393,981 $163,103 $148,002 $705,086 Cost of sales 374,308 146,147 130,235 650,690 Gross profit 19,673 16,956 17,767 54,396 Selling, general and administrative expenses 25,668 8,851 8,963 43,482 Restructuring charges — 71 — 71 Segment operating (loss) profit $(5,995) $8,034 $8,804 $10,843 The reconciliations of segment depreciation and amortization expense to consolidated depreciation and amortization expense are as follows: For the Fiscal Years Ended June 29, 2014 June 30, 2013 June 24, 2012 Polyester $11,702 $17,234 $19,046 Nylon 2,276 3,070 3,089 International 3,151 3,418 4,011 Segment depreciation and amortization expense 17,129 23,722 26,146 Depreciation and amortization included in other operating expense, net 343 230 119 Amortization included in interest expense 424 632 870 Depreciation and amortization expense $17,896 $24,584 $27,135 Segment other adjustments for each of the reportable segments consist of the following: For the Fiscal Years Ended June 29, 2014 June 30, 2013 June 24, 2012 Polyester $637 $618 $(138)Nylon (119) 245 33 International 352 115 382 Segment other adjustments $870 $978 $277 Segment other adjustments include severance charges, restructuring charges and recoveries, start-up costs and other adjustments necessary to understandand compare the underlying results of the segment. 24 Review of Fiscal Year 2014 Results of Operations Compared to Fiscal Year 2013 Consolidated Overview The components of net income attributable to Unifi, Inc., each component as a percentage of net sales, and the percentage increase or decrease over theprior year amounts are presented in the table below. Fiscal year 2014 is comprised of 52 weeks, while fiscal year 2013 contained 53 weeks. For the Fiscal Years Ended June 29, 2014 June 30, 2013 % of NetSales % of NetSales % Change Net sales $687,902 100.0 $713,962 100.0 (3.7)Cost of sales 604,640 87.9 640,858 89.8 (5.7)Gross profit 83,262 12.1 73,104 10.2 13.9 Selling, general and administrative expenses 46,203 6.7 47,386 6.6 (2.5)Provision (benefit) for bad debts 287 — (154) — (286.4)Other operating expense, net 5,289 0.8 3,409 0.5 55.1 Operating income 31,483 4.6 22,463 3.1 40.2 Interest expense, net 2,539 0.4 3,791 0.5 (33.0)Loss on extinguishment of debt — — 1,102 0.1 (100.0)Other non-operating expense 126 — — — — Earnings from unconsolidated affiliates (19,063) (2.8) (11,444) (1.6) 66.6 Income before income taxes 47,881 7.0 29,014 4.1 65.0 Provision for income taxes 20,161 3.0 13,344 1.9 51.1 Net income including non-controlling interest 27,720 4.0 15,670 2.2 76.9 Less: net (loss) attributable to non-controlling interest (1,103) (0.2) (965) (0.1) 14.3 Net income attributable to Unifi, Inc. $28,823 4.2 $16,635 2.3 73.3 Consolidated Net Sales Net sales for fiscal year 2014 decreased by $26,060, or 3.7%, as compared to the prior fiscal year. The decrease was driven by (i) the impact of theadditional week of sales included in fiscal year 2013 for operations in the U.S. and El Salvador and (ii) a decline in the International Segment due tocompetition from low-priced Asian imports, weaker market conditions in China and unfavorable currency translation effects. The decrease was partiallyoffset by improvements in pricing and continued growth for the Company’s PVA products. Consolidated sales volume decreased by 3.7% due to lower sales volumes in all reportable segments. Polyester Segment volumes declined 4.0% due toone less week in fiscal 2014, a finer denier sales mix and a shift away from low-margin commodity yarns. Nylon Segment volumes declined only 1.6% asthe success of new PVA programs helped to offset the impact of one less sales week. International Segment volumes declined 3.7% due to soft marketconditions for the Asian market, driving lower volumes in China, and cheaper yarn imports creating competitive challenges in Brazil. Consolidated sales pricing was unchanged from the prior year due primarily to the success of PVA programs and higher-margin product sales, offset byunfavorable currency translation effects in the International Segment. Pricing improvements of 1.6% and 1.4% in the Polyester and Nylon Segments,respectively, were related to mix enrichment efforts and increased PVA product sales. International Segment pricing was primarily impacted byunfavorable currency translation effects as a result of the weakening of the Brazilian Real against the U.S. dollar. Consolidated Gross Profit Gross profit for fiscal year 2014 increased by $10,158, or 13.9%, as compared to the prior fiscal year. The overall changes in gross profit were due to thefluctuation in sales volumes and pricing described above, lower average polyester raw material costs and a decrease in domestic depreciation expense,partially offset by one less sales week for certain of the Company’s operations and the negative impact of currency translation in the InternationalSegment. 25 In the Polyester and Nylon Segments, depreciation expense decreased by a total of $6,401 as compared to the prior fiscal year due to the timing atwhich certain assets in each segment became fully depreciated. Unfavorable currency translation, primarily in the International Segment, negativelyimpacted gross profit by $1,605. Further details regarding the changes in net sales and gross profit from the prior fiscal year follow. Polyester Segment The components of segment gross profit, each component as a percentage of net sales, and the percentage increase or decrease over the prior year amountsfor the Polyester Segment are as follows: For the Fiscal Years Ended June 29, 2014 June 30, 2013 % of NetSales % of NetSales %Change Net sales $389,172 100.0 $398,707 100.0 (2.4)Cost of sales 342,393 88.0 363,545 91.2 (5.8)Gross profit $46,779 12.0 $35,162 8.8 33.0 A reconciliation of the changes in net sales from fiscal year 2013 to fiscal year 2014 for the Polyester Segment is as follows: Net sales for the fiscal year ended June 30, 2013 $398,707 Decrease in sales volumes (10,753)Decrease due to an additional week of sales in fiscal year 2013 (7,826)Improved pricing and mix 5,381 Acquisition of draw winding business 3,663 Net sales for the fiscal year ended June 29, 2014 $389,172 The overall decrease in net sales is primarily attributable to a decrease in volumes due to a shift away from commodity-based to value-added productofferings, a finer denier sales mix and 53 weeks of sales in fiscal year 2013 compared to 52 weeks in fiscal year 2014. These decreases were offset by (i)improved pricing and mix as a result of the shift to higher-margin value-added products and (ii) the acquisition of a draw winding business in December2013. The draw winding acquisition increases the Company’s polyester production capacity and has allowed the Company to expand its presence intargeted industrial, belting, hose and thread markets by increasing its product offerings to include mid-tenacity, flat yarns. A reconciliation of the changes in gross profit from fiscal year 2013 to fiscal year 2014 for the Polyester Segment is as follows: Gross profit for the fiscal year ended June 30, 2013 $35,162 Improvements in underlying operating margins 7,902 Decrease in depreciation expense 5,594 Decrease in sales volumes (942)Decrease due to an additional week of sales in fiscal year 2013 (937)Gross profit for the fiscal year ended June 29, 2014 $46,779 The increase in gross profit was primarily a result of a higher-margin sales mix driven by PVA programs with a shift away from commodity-basedproducts, lower average raw material costs and lower depreciation expense due to certain machinery and equipment within the Yadkinville, NorthCarolina spinning facility becoming fully depreciated (predominantly equipment placed in service in 1998 with a depreciable life of fifteen years). Thesefavorable changes were partially offset by lower sales volumes resulting from the Segment’s shift towards more value-added products, along with theimpact of one less sales week in fiscal year 2014 as compared to fiscal year 2013. Polyester Segment net sales and gross profit as a percentage of total consolidated amounts were 56.6% and 56.2% for fiscal year 2014, compared to 55.8%and 48.1% for fiscal year 2013, respectively. 26 Nylon Segment The components of segment gross profit, each component as a percentage of net sales, and the percentage increase or decrease over the prior year amountsfor the Nylon Segment are as follows: For the Fiscal Years Ended June 29, 2014 June 30, 2013 % of NetSales % of NetSales %Change Net sales $163,824 100.0 $164,085 100.0 (0.2)Cost of sales 143,649 87.7 146,033 89.0 (1.6)Gross profit $20,175 12.3 $18,052 11.0 11.8 A reconciliation of the changes in net sales from fiscal year 2013 to fiscal year 2014 for the Nylon Segment is as follows: Net sales for the fiscal year ended June 30, 2013 $164,085 Improved pricing and mix 2,617 Increase in sales volumes 784 Decrease due to an additional week of sales in fiscal year 2013 (3,279)Negative currency translation effects (383)Net sales for the fiscal year ended June 29, 2014 $163,824 The slight decrease in net sales is attributable to the impact of 53 weeks of sales in fiscal year 2013 compared to 52 weeks in fiscal year 2014 andnegative currency translation effects due to the weakening of the Colombian Peso against the U.S. Dollar, partially offset by an improved pricing andsales mix resulting from the benefits of new PVA products with higher sales pricing and an increase in sales volumes due to the success of PVA programs. A reconciliation of the changes in gross profit from fiscal year 2013 to fiscal year 2014 for the Nylon Segment is as follows: Gross profit for the fiscal year ended June 30, 2013 $18,052 Improvements in underlying operating margins 1,697 Decrease in depreciation expense 807 Increase in sales volumes 85 Decrease due to an additional week of sales in fiscal year 2013 (364)Negative currency translation effects (102)Gross profit for the fiscal year ended June 29, 2014 $20,175 The increase in gross profit was primarily due to improved margins associated with new PVA programs, a decrease in depreciation expense and anincrease in sales volumes when excluding the impact of the additional week of sales in fiscal year 2013. The decrease in depreciation expense is due tocertain assets within the Madison, North Carolina facility becoming fully depreciated. These favorable changes were partially offset by one less salesweek in fiscal year 2014 as compared to fiscal year 2013 and unfavorable currency translation effects. Nylon Segment net sales and gross profit as a percentage of total consolidated amounts were 23.8% and 24.2% for fiscal year 2014, compared to 23.0%and 24.7% for fiscal year 2013, respectively. International Segment The components of segment gross profit, each component as a percentage of net sales, and the percentage increase or decrease over the prior year amountsfor the International Segment are as follows: For the Fiscal Years Ended June 29, 2014 June 30, 2013 % of NetSales % of NetSales %Change Net sales $134,906 100.0 $151,170 100.0 (10.8)Cost of sales 118,598 87.9 131,280 86.8 (9.7)Gross profit $16,308 12.1 $19,890 13.2 (18.0) A reconciliation of the changes in net sales from fiscal year 2013 to fiscal year 2014 for the International Segment is as follows: Net sales for the fiscal year ended June 30, 2013 $151,170 Negative currency translation effects (12,799)Decrease in sales volumes (5,113)Improved pricing and mix 1,648 Net sales for the fiscal year ended June 29, 2014 $134,906 27 The overall decrease in net sales is primarily attributable to the unfavorable devaluation of the Brazilian Real versus the U.S. Dollar of approximately12% and a decrease in sales volumes for China, which were partially offset by an improvement in pricing in Brazil (excluding the effects of currencytranslation, net sales in Brazil increased by 2% on a local currency basis). Brazil operated under challenging conditions during fiscal year 2014, as excesscapacity of yarn manufacturers in Asia led to increased competition and pricing pressures from cheaper imported polyester textured yarns. Softer marketconditions led to the sales volume decline in China. A reconciliation of the changes in gross profit from fiscal year 2013 to fiscal year 2014 for the International Segment is as follows: Gross profit for the fiscal year ended June 30, 2013 $19,890 Negative currency translation effects (1,503)Declines in underlying operating margins (1,400)Decrease in sales volumes (679)Gross profit for the fiscal year ended June 29, 2014 $16,308 Lower gross profit results for the Company’s Brazilian subsidiary can be attributed to the weakened Brazilian Real versus the U.S. dollar, pricingpressures from low-priced yarn imports and the reduction of certain tax incentives for local producers. Competitive pricing pressures, low operating ratesand soft market conditions in China also drove a gross profit decline for the Company’s Chinese subsidiary. Although net sales increased $1,648 due toimproved sales pricing and mix, a corresponding increase in gross profit was not realized due to declines in underlying operating margins. International Segment net sales and gross profit as a percentage of total consolidated amounts were 19.6% and 19.6% for fiscal year 2014, compared to21.2% and 27.2% for fiscal year 2013, respectively. Consolidated Selling, General & Administrative Expenses A reconciliation of the changes in selling, general and administrative (“SG&A”) expenses from fiscal year 2013 to fiscal year 2014 is as follows: Selling, general and administrative expenses for the fiscal year ended June 30, 2013 $47,386 Decrease in one-time consumer marketing and branding expenses (771)Decrease due to one less week in fiscal year 2014 (680)Decrease due to currency translation effects (644)Decrease in sales commissions and service fees (360)Increase in employee costs 644 Increase in non-cash compensation 403 Increase in depreciation and amortization expenses 99 Other 126 Selling, general and administrative expenses for the fiscal year ended June 29, 2014 $46,203 Total SG&A expenses were slightly lower versus the prior year, with offsetting changes among various components, including (as quantified in the tableabove): (i) a decrease in various advertising and promotional expenses due to the timing of certain events, (ii) decreases due to currency translation effectsprimarily attributable to the weakening of the Brazilian Real against the U.S. Dollar, (iii) an additional week in fiscal year 2013, and (iv) a decrease insales commission and service fees primarily due to the termination of a sales service agreement with Dillon Yarn Corporation, which were partially offsetby (v) an increase in employee costs attributable to annual wage increases, higher variable compensation expenses and increasing fringe benefit costs and(vi) an increase in non-cash compensation primarily due to an increase in the fair value of awards granted in connection with the higher price of theCompany’s common stock on the respective grant dates. Consolidated Provision (Benefit) for Bad Debts The provision for bad debt expense was $287 for fiscal year 2014, as compared to a benefit of $154 for fiscal year 2013. In fiscal year 2013, the Companyreceived a $383 recovery of accounts previously written off. 28 Consolidated Other Operating Expense, Net Other operating expense, net increased $1,880 from $3,409 for fiscal year 2013 to $5,289 for fiscal year 2014. The increase is related to (i) a year-over-year increase of $636 for foreign currency transaction losses, primarily attributable to the devaluation of the Brazilian Real, (ii) increased operatingexpenses for Renewables of $353 due to the expansion of Miscanthus crop fields, bedding trials conducted at poultry houses and increased depreciationand amortization expense, (iii) $356 for the relocation and reinstallation of certain manufacturing equipment within the Polyester Segment and (iv) anincrease of $535 for other charges, including losses on the sale or disposal of assets and accretion expense applicable to a contingent considerationliability. The components of other operating expense are further detailed in “Note 21. Other Operating Expense, Net” to the Consolidated Financial Statementsincluded in “Item 8. Financial Statements and Supplementary Data” of this Annual Report on Form 10-K. Consolidated Interest Expense, Net Interest expense, net decreased from $3,791 for fiscal year 2013 to $2,539 for fiscal year 2014, and is comprised of interest expense and interest income.Interest expense, net consists of the following: For the Fiscal Years Ended June 29, 2014 June 30, 2013 Interest on ABL Facility $3,292 $3,673 Interest on Term B Loan — 722 Other 192 107 Subtotal 3,484 4,502 Amortization of debt financing fees 424 632 Mark-to-market adjustment for interest rate swap 39 (931)Reclassification adjustment for interest rate swap 554 322 Interest capitalized to property, plant and equipment, net (172) (36)Subtotal 845 (13)Total interest expense 4,329 4,489 Interest income (1,790) (698)Interest expense, net $2,539 $3,791 The decline in total interest expense was due to a lower average outstanding debt balance of $99,183 and a lower weighted average interest rate of 3.1%,offset primarily by an unfavorable year-over-year change in the mark-to-market adjustment for an interest rate swap of $970. The $9,678 decrease in theaverage outstanding debt balance was primarily a result of increased payments on the Company’s revolving credit facility, offset by the addition ofcapital lease obligations in fiscal year 2014. The weighted average interest rate for the Company’s outstanding debt obligations declined from 3.8% forfiscal year 2013 to 3.1% for fiscal year 2014 primarily as a result of the prepayment of the Term B Loan during fiscal year 2013. The increase in interest income in fiscal year 2014 relates primarily to $1,084 of interest received related to the settlement of a judicial claim involvingthe Company’s Brazilian subsidiary and $141 of interest received on the return of a deposit with a domestic utility company. Consolidated Earnings from Unconsolidated Affiliates For fiscal year 2014, the Company generated $47,881 of income before income taxes, of which $19,063 was generated from its investments inunconsolidated affiliates. For fiscal year 2013, the Company generated $29,014 of income before income taxes, of which $11,444 was generated from itsinvestments in unconsolidated affiliates. The Company’s 34% share of PAL’s earnings increased from $9,481 in fiscal year 2013 to $17,846 in fiscal year2014 primarily attributable to higher amounts of earnings recognized under the Farm Bill’s economic adjustment assistance program and improvedoperating income. The remaining change in earnings from unconsolidated affiliates relates to lower operating results for the Company’s two nylonextrusion joint ventures, which reflect decreased earnings driven by lower gross margins. Consolidated Income Taxes The components of income before income taxes consist of the following: For the Fiscal Years Ended June 29, 2014 June 30, 2013 United States $38,816 $16,900 Foreign 9,065 12,114 Income before income taxes $47,881 $29,014 29 The components of provision for income taxes consist of the following: For the Fiscal Years Ended June 29, 2014 June 30, 2013 Federal $14,646 $9,485 State 1,935 661 Foreign 3,580 3,198 Provision for income taxes $20,161 $13,344 The Company’s income tax provision for fiscal year 2014 and fiscal year 2013 resulted in tax expense of $20,161 and $13,344, with an effective tax rateof 42.1% and 46.0%, respectively. For both periods, the effective income tax rate is different than the U.S. statutory rate primarily due to foreigndividends taxed in the U.S. and the timing of the Company’s recognition of higher taxable versus book income for an unconsolidated affiliate for whichthe Company maintains a full valuation allowance. Consolidated Net Income Attributable to Unifi, Inc. Even though fiscal year 2014 had one less week, net income attributable to Unifi, Inc. for fiscal year 2014 was $28,823, or $1.52 per basic share,compared to $16,635, or $0.84 per basic share, for the prior fiscal year period. As discussed above, the Company’s increased profitability was primarilydue to higher gross profit in the Polyester and Nylon Segments, lower SG&A expenses, improved earnings from unconsolidated affiliates, and lower netinterest expense, partially offset by higher other operating expenses and increased income taxes. Consolidated Adjusted EBITDA Even though fiscal year 2014 had one less week, Adjusted EBITDA increased $4,946 to $57,596 versus $52,650 for the prior fiscal year. As discussedabove, the improvement in cash gross profit is the primary driver for the increase. Review of Fiscal Year 2013 Results of Operations Compared to Fiscal Year 2012 Consolidated Overview The components of net income attributable to Unifi, Inc., each component as a percentage of net sales, and the percentage increase or decrease over theprior year amounts are presented in the table below. Fiscal year 2013 was comprised of 53 weeks, while fiscal year 2012 contained 52 weeks. For the Fiscal Years Ended June 30, 2013 June 24, 2012 % to NetSales % to NetSales % Change Net sales $713,962 100.0 $705,086 100.0 1.3 Cost of sales 640,858 89.8 650,690 92.3 (1.5)Gross profit 73,104 10.2 54,396 7.7 34.4 Selling, general and administrative expenses 47,386 6.6 43,482 6.2 9.0 (Benefit) provision for bad debts (154) — 211 — (173.0)Other operating expense, net 3,409 0.5 2,071 0.3 64.6 Operating income 22,463 3.1 8,632 1.2 160.2 Interest expense, net 3,791 0.5 14,152 2.0 (73.2)Loss on extinguishment of debt 1,102 0.1 3,203 0.4 (65.6)Loss on previously held equity interest — — 3,656 0.5 (100.0)Other non-operating income — — (1,488) (0.1) (100.0)Earnings from unconsolidated affiliates (11,444) (1.6) (19,740) (2.8) (42.0)Income before income taxes 29,014 4.1 8,849 1.2 227.9 Provision (benefit) for income taxes 13,344 1.9 (1,979) (0.3) (774.3)Net income including non-controlling interest 15,670 2.2 10,828 1.5 44.7 Less: net loss attributable to non-controlling interest (965) (0.1) (663) (0.1) 45.6 Net income attributable to Unifi, Inc. $16,635 2.3 $11,491 1.6 44.8 30 Consolidated Net Sales Net sales for fiscal year 2013 increased by $8,876, or 1.3%, as compared to the prior fiscal year. Consolidated sales volume increased by 4.2%, withvolume improvements in all of the Company’s reportable segments. The increase in volumes reflects the additional week of sales included in the 53-weekfiscal year 2013 for operations in the U.S. and El Salvador, growth in the U.S. apparel market and improvements in the U.S. automotive and homefurnishings markets. Sales volume increased in Brazil despite continued pressure from low-priced imported textured yarn, and volume improved in Chinaas a result of increases in PVA product sales. The weighted average selling price decreased 2.9% primarily due to sales price adjustments related todeclines in the cost of raw materials in the Polyester Segment, a shift in mix towards products that carry a lower average selling price in the NylonSegment, and lower weighted average sales prices in Brazil on a U.S. dollar basis because of currency translation from the Brazilian Real, which weakenedagainst the U.S. dollar in fiscal year 2013 (on a local currency basis, the weighted average sales price in Brazil increased in fiscal year 2013 over the prioryear). Unfavorable currency translation decreased consolidated net sales by $14,936. Consolidated Gross Profit Gross profit for fiscal year 2013 increased by $18,708, or 34.4%, as compared to the prior fiscal year. Gross profit increased primarily due to the additionalweek of sales included in the 53-week fiscal year 2013, improved sales volumes in all reportable segments, mix enrichment as a result of increased PVAsales and increased unit conversion margin in the Polyester Segment. In addition, gross profit was favorably impacted by lower unit manufacturing costsin the domestic operations as a result of higher utilization rates, cost improvement programs and a decrease in depreciation expense of $2,234. Polyester Segment Gross Profit The components of segment gross profit, each component as a percentage of net sales, and the percentage increase or decrease over the prior year amountsfor the Polyester Segment are as follows: For the Fiscal Years Ended June 30, 2013 June 24, 2012 % to NetSales % to NetSales %Change Net sales $398,707 100.0 $393,981 100.0 1.2 Cost of sales 363,545 91.2 374,308 95.0 (2.9)Gross profit $35,162 8.8 $19,673 5.0 78.7 The increase in gross profit of $15,489 was primarily a result of increased sales volume, mix enrichment due to growth of PVA product sales, higher perunit conversion margin and lower unit manufacturing costs. Volumes increased 2.5% over the prior fiscal year primarily as a result of the additional weekof sales included in the 53-week fiscal year 2013 and increased demand in the U.S. apparel market, which were adversely impacted in the prior fiscal yearby weak demand due to inventory destocking in the apparel supply chain. The growth in PVA product sales was driven primarily by REPREVE®, whichhad several new programs adopted by leading brands and retailers. The segment experienced overall lower average raw material costs as compared withthe prior year, which allowed it to recover previously lost unit conversion margin. Unit manufacturing costs were lower as a result of decreaseddepreciation expense of $1,625 and efficiency gains accomplished through process improvements and higher utilization rates. Polyester Segment net sales and gross profit as a percentage of total consolidated amounts were 55.8% and 48.1% for fiscal year 2013, compared to 55.9%and 36.2% for fiscal year 2012, respectively. 31 Nylon Segment Gross Profit The components of segment gross profit, each component as a percentage of net sales, and the percentage increase or decrease over the prior year amountsfor the Nylon Segment are as follows: For the Fiscal Years Ended June 30, 2013 June 24, 2012 % to NetSales % to NetSales %Change Net sales $164,085 100.0 $163,103 100.0 0.6 Cost of sales 146,033 89.0 146,147 89.6 (0.1)Gross profit $18,052 11.0 $16,956 10.4 6.5 The increase in gross profit of $1,096 was due to increased volumes and lower unit manufacturing costs. Sales volumes increased 3.9% over the priorfiscal year primarily due to increased demand in the legwear market and the additional week of sales included in the 53-week fiscal year 2013. Averageunit conversion margin remained flat as compared with the prior year. Unit manufacturing costs were slightly lower as a result of higher utilization ratesand cost improvement initiatives. Nylon Segment net sales and gross profit, as a percentage of total consolidated amounts, were 23.0% and 24.7% for fiscal year 2013, compared to 23.1%and 31.2% for fiscal year 2012, respectively. International Segment Gross Profit The components of segment gross profit, each component as a percentage of net sales, and the percentage increase or decrease over the prior year amountsfor the International Segment are as follows: For the Fiscal Years Ended June 30, 2013 June 24, 2012 % to NetSales % to NetSales %Change Net sales $151,170 100.0 $148,002 100.0 2.1 Cost of sales 131,280 86.8 130,235 88.0 0.8 Gross profit $19,890 13.2 $17,767 12.0 11.9 Gross profit for the International Segment increased $2,123 from the prior year as a result of improvement in both the Brazilian and Chinese operations.Despite continued competition from low-priced yarn imports, the Brazilian operation increased its sales volumes 5.4% over the prior year. TheCompany’s focus on mix enrichment resulted in increased sales of PVA products for the Brazilian operation, which also favorably impacted margins. Theadverse impact of the loss of certain tax incentives for local producers during fiscal year 2013 was offset by POY duty reductions implemented by theBrazilian government (which reduce the subsidiary’s raw material cost) and price increases implemented to recover margins due to the negative effects ofthe changes in the local incentive programs. In local currency, gross profit for Brazil increased 18.7%; however, when translated to U.S. dollars, grossprofit increased only 5.2% as a result of the weakening of the Brazilian Real against the U.S. dollar. Gross profit improvement in the Chinese operation was driven by a 22.2% increase in sales volume and higher margins as a result of increased PVAproduct sales. International Segment net sales and gross profit as a percentage of total consolidated amounts were 21.2% and 27.2% for fiscal year 2013, compared to21.0% and 32.6% for fiscal year 2012, respectively. Consolidated Selling, General & Administrative Expenses SG&A expenses increased in total and as a percentage of net sales for fiscal year 2013 when compared to fiscal year 2012. The increase was primarily aresult of higher fringe benefit costs related to certain variable compensation plans; consumer marketing and branding initiatives; community relationsexpenses; and professional fees. These increases were partially offset by reductions in deferred compensation, insurance, amortization and otheradministrative expenses. Consolidated (Benefit) Provision for Bad Debts The benefit for bad debts was $154 for fiscal year 2013, as compared to a provision of $211 recorded for fiscal year 2012. The Company received a $383recovery of accounts previously written off, which is included in the fiscal year 2013 benefit. For fiscal year 2013, there were no significant changes inthe Company’s allowance for uncollectible accounts, as the aging of customer receivables and provisions for certain risk accounts remained relativelyunchanged from fiscal year 2012. 32 Consolidated Other Operating Expense, Net The components of other operating expense, net consist of the following: For the Fiscal Years Ended June 30, 2013 June 24, 2012 Operating expenses for Repreve Renewables $2,396 $1,633 Net loss on sale or disposal of assets 243 369 Foreign currency transaction (gains) losses (132) 270 Restructuring charges, net 813 71 Other, net 89 (272)Total other operating expense, net $3,409 $2,071 Other operating expense, net increased in fiscal year 2013 from the prior year primarily due to (i) increased operating expenses for Renewables inconnection with expanding crop fields and engaging potential markets, (ii) consolidating the results of Renewables for the full fiscal year 2013 and (iii)severance charges included in fiscal year 2013. Consolidated Interest Expense, Net Interest expense, net decreased from $14,152 for fiscal year 2012 to $3,791 for fiscal year 2013. This favorable decline was due to a lower averageoutstanding debt balance of $108,861, a lower weighted average interest rate and a favorable mark-to-market adjustment on an interest rate swap of $931.The decrease in the average outstanding debt was primarily a result of the Company’s repayment of all amounts outstanding under the Term B Loan (asdescribed below under “—Liquidity and Capital Resources”) and scheduled payments made on the ABL Term Loan. The weighted average interest rateof the Company’s outstanding debt obligations declined from 9.8% for fiscal year 2012 to 3.8% for fiscal year 2013 as a result of the significantly lowerborrowing rates realized from the debt refinancing in May 2012. Consolidated Other Non-Operating Income For fiscal year 2012, other non-operating income consisted of a $1,488 gain for the Company’s Brazilian subsidiary related to a refund of non-incomerelated taxes plus interest. Consolidated Earnings from Unconsolidated Affiliates For fiscal year 2013, the Company generated $29,014 of income before income taxes, of which $11,444 was generated from its investments inunconsolidated affiliates. For fiscal year 2012, the Company generated $8,849 of income before income taxes, of which $19,740 was generated from itsinvestments in unconsolidated affiliates. The Company’s 34% share of PAL’s earnings decreased from $19,360 in fiscal year 2012 to $9,481 in fiscal year2013 primarily caused by margin pressures related to the softness in the cotton apparel market during the first half of fiscal year 2013 and differencesrelated to the timing of earnings recognized under the Farm Bill’s economic adjustment payments program, as well as the rebate level dropping from fourcents per pound to three cents per pound in August 2012. The remaining change in earnings from unconsolidated affiliates relates primarily to theimproved operating results of UNF and UNF America, which was primarily driven by higher utilization rates. Consolidated Income Taxes The components of income before income taxes consist of the following: For the Fiscal Years Ended June 30, 2013 June 24, 2012 United States $16,900 $3,010 Foreign 12,114 5,839 Income before income taxes $29,014 $8,849 The components of the provision (benefit) for income taxes consist of the following: For the Fiscal Years Ended June 30, 2013 June 24, 2012 Federal $9,485 $(2,276)State 661 (3,216)Foreign 3,198 3,513 Provision (benefit) for income taxes $13,344 $(1,979) The Company’s income tax provision for fiscal year 2013 resulted in tax expense of $13,344, with an effective tax rate of 46.0%. The effective incometax rate for the period is different than the U.S. statutory rate primarily due to foreign dividends taxed in the U.S. and the timing of the Company’srecognition of higher taxable versus book income for an unconsolidated affiliate for which the Company maintains a full valuation allowance. 33 The Company’s income tax provision for fiscal year 2012 resulted in a tax benefit of $1,979, with an effective rate of (22.4%). The effective income taxrate for the period is different than the U.S. statutory rate primarily due to a reduction in the valuation allowance, utilization of federal and state netoperating loss carryforwards during the year, partially offset by repatriation of foreign earnings during the period as well as the tax effects of futurerepatriation plans. Consolidated Net Income Attributable to Unifi, Inc. Net income attributable to Unifi, Inc. for fiscal year 2013 was $16,635, or $0.84 per basic share, compared to $11,491, or $0.57 per basic share, for theprior fiscal year period. As discussed above, the Company’s increased profitability was primarily due to higher gross profit, including the effects of anadditional week in fiscal year 2013, and lower net interest expense, as partially offset by higher SG&A expenses, higher net other operating expense, areduction in other non-operating income, lower earnings of unconsolidated affiliates and an increase in the provision for income taxes. Consolidated Adjusted EBITDA Adjusted EBITDA for fiscal year 2013 increased $12,850 to $52,650 versus $39,800 for the prior fiscal year. As discussed above, the $18,708 increase incash gross profit is the primary reason for the improvement. Liquidity and Capital Resources The Company’s primary capital requirements are for working capital, capital expenditures, debt service and stock repurchases. The Company’s primarysources of capital are cash generated from operations and borrowings available under its ABL Revolver. For fiscal year 2014, cash generated fromoperations was $56,357, and at June 29, 2014, excess availability under the ABL Revolver was $61,103. As of June 29, 2014, all of the Company’s debt obligations, with the exception of a term loan from one of the Company’s unconsolidated affiliates, wereguaranteed by its domestic subsidiaries, while a substantial portion of the Company’s cash and cash equivalents were held by its foreign subsidiaries. Asdescribed below, cash and cash equivalents held by our foreign subsidiaries may not be presently available to fund the Company’s domestic capitalrequirements, including its domestic debt obligations, without potentially incurring incremental taxes due upon their repatriation. The Companyemploys a variety of tax planning and financing strategies to ensure that our worldwide cash is available in the locations where it is needed. For theCompany’s U.S., Brazilian and other foreign subsidiaries, the following table presents a summary of cash and cash equivalents, liquidity, working capitaland total debt obligations as of June 29, 2014: U.S. Brazil All Others Total Cash and cash equivalents $24 $8,548 $7,335 $15,907 Borrowings available under ABL Revolver 61,103 — — 61,103 Liquidity $61,127 $8,548 $7,335 $77,010 Working capital $76,766 $51,603 $22,556 $150,925 Total debt obligations $98,238 $— $1,250 $99,488 As of June 29, 2014, all cash and cash equivalents on-hand at the Company’s foreign operations were deemed to be permanently reinvested. TheCompany has plans to repatriate $21,827 of future cash flows generated from its operations in Brazil and has recorded a deferred tax liability of $7,639 toreflect the additional income tax that would be due as a result. The Company currently has no plans to repatriate other cash balances held outside theUnited States. However, if such other balances were to be repatriated, additional tax payments could result. As of June 29, 2014, $30,643 of undistributedearnings of the Company’s foreign subsidiaries was deemed to be permanently reinvested, and any applicable U.S. federal income taxes and foreignwithholding taxes have not been provided on these earnings. Computation of the potential tax liabilities associated with unremitted earningspermanently reinvested is not practicable. 34 Debt Obligations The following table presents a summary of the total balances outstanding for the Company’s debt obligations, their scheduled maturity dates and theweighted average interest rate for borrowings (including the effects of any interest rate swaps) as well as the applicable current portion of long-term debt: Weighted Average Scheduled Interest Rate as of Principal Amounts as of Maturity Date June 29, 2014 June 29, 2014 June 30, 2013 ABL Revolver March 2019 3.1% $26,000 $52,500 ABL Term Loan March 2019 2.9% 68,000 42,800 Term loan from unconsolidated affiliate August 2015 3.0% 1,250 1,250 Capital lease obligations (1) (2) 4,238 1,203 Total debt 99,488 97,753 Current portion of long-term debt (7,215) (65)Total long-term debt $92,273 $97,688 (1)Scheduled maturity dates for capital lease obligations range from January 2017 to November 2027. (2)Fixed interest rates for capital lease obligations range from 2.3% to 4.6%. On May 24, 2012, the Company entered into a credit agreement (the “Credit Agreement”) to establish a $150,000 senior secured credit facility (“ABLFacility”) with Wells Fargo Bank, N.A. and Bank of America, N.A. In addition, the Company entered into a $30,000 term loan (“Term B Loan”). Thepurpose of entering into the ABL Facility and the Term B Loan was to, among other things, refinance the Company’s then-existing indebtedness. Sincethat establishment, the Term B Loan has been repaid (on January 8, 2013), and the ABL Facility has been amended several times (most recently onAugust 25, 2014), such that, as of June 29, 2014, it had a maturity date of March 28, 2019, and consisted of a $100,000 revolving credit facility (“ABLRevolver”) and a $68,000 term loan (“ABL Term Loan”). As a result of the last amendment (which is described more specifically below under “—Subsequent Event – Fifth Amendment”), the ABL Term Loan increased to $90,000. The ABL Facility is secured by a first-priority security interest in substantially all property and assets of Unifi, Inc., Unifi Manufacturing, Inc. and certainsubsidiary guarantors (the “Loan Parties”) and includes representations and warranties made by the Loan Parties, affirmative and negative covenants andevents of default that are usual and customary for financings of this type. The Company’s ability to borrow under the ABL Revolver is limited to a borrowing base equal to specified percentages of eligible accounts receivableand inventory and is subject to certain conditions and limitations. As of June 29, 2014, ABL Revolver borrowings bore interest at LIBOR plus anapplicable margin of 1.75% to 2.25% or the Base Rate plus an applicable margin of 0.75% to 1.25% with interest payable on a monthly basis. As of June29, 2014, the ABL Term Loan bore interest at LIBOR plus an applicable margin of 2.25% or the Base Rate plus an applicable margin of 1.25%, withinterest payable on a monthly basis. Under the terms of the ABL Facility at June 29, 2014, the Company was required to hedge at least $50,000 ofvariable interest rate exposure so long as the outstanding principal of all indebtedness having variable rates of interest exceeds $75,000. Should excess availability under the ABL Revolver fall below the Trigger Level ($21,000 as of June 29, 2014), a financial covenant requiring the LoanParties to maintain a fixed charge coverage ratio on a monthly basis of at least 1.05 to 1.0 becomes effective. In addition, the ABL Facility containsrestrictions on certain payments and investments, including restrictions on the payment of dividends and share repurchases, unless excess availability isgreater than the Trigger Level for the thirty-day period prior to the making of such a distribution (as calculated on a pro forma basis as if the payment andany revolving loans made in connection therewith were made on the first day of such period). As of June 29, 2014, the Company was in compliance with all financial covenants; the excess availability under the ABL Revolver was $61,103; thefixed charge coverage ratio was 10.3 to 1.0; and the Company had $2,325 of standby letters of credit, none of which have been drawn upon. Subject to certain provisions, the ABL Term Loan may be prepaid at par, in whole or in part, at any time before the maturity date, at the Company’sdiscretion. Beginning October 1, 2014, the Company is required to make fixed quarterly principal payments on the ABL Term Loan. Scheduled Debt MaturitiesThe following table presents the scheduled maturities of the Company’s outstanding debt obligations as of June 29, 2014 for the following five fiscalyears and thereafter: Scheduled Maturities on a Fiscal Year Basis 2015 2016 2017 2018 2019 Thereafter ABL Revolver $— $— $— $— $26,000 $— ABL Term Loan 6,375 8,500 8,500 8,500 36,125 — Capital lease obligations 840 866 808 558 366 800 Term loan from unconsolidated affiliate — 1,250 — — — — Total $7,215 $10,616 $9,308 $9,058 $62,491 $800 35 Further discussion of the terms and conditions of the Company’s existing indebtedness is outlined in “Note 12. Long-Term Debt” to the ConsolidatedFinancial Statements included in “Item 8. Financial Statements and Supplementary Data” of this Annual Report on Form 10-K. Subsequent Event - Fifth AmendmentOn August 25, 2014, the Company entered into a Fifth Amendment to Credit Agreement (“Fifth Amendment”). The Fifth Amendment, among otherthings: (i) increased the ABL Term Loan by $22,000 to $90,000; (ii) increased the fixed quarterly payments on the ABL Term Loan from $2,125 to$2,812; (iii) modified the calculation of the fixed charge coverage ratio to exclude certain capital expenditures and permitted acquisitions, at the electionof the Company, through June 30, 2015, subject to a maximum exclusion of $40,000 for any consecutive twelve-month period and other limitations; (iv)increased the ABL Term Loan interest rate from LIBOR plus an applicable margin of 2.25%, or the Base Rate plus an applicable margin of 1.25%, toLIBOR plus an applicable margin of 2.50%, or the Base Rate plus an applicable margin of 1.50%; (v) modified the date on which the eligibility of certaincollateral is calculated as a date between July 19, 2015 and December 31, 2015, subject to satisfaction of certain additional conditions, such that the ABLTerm Loan amount can be increased up to $90,000; (vi) related to the making of restricted payments (consisting of dividends and share repurchases), inaddition to existing requirements, added a requirement to have a fixed charge coverage ratio of at least 1.0 to 1.0 during the same period, calculated on apro forma basis as if all such restricted payments made pursuant to the most recent compliance certificate date were made on the last day of the applicabletwelve-fiscal-month period; and (vii) removed the requirement to hedge interest rate exposure on funded indebtedness. Working Capital The following table presents the components of the Company’s Adjusted Working Capital and the reconciliation from Adjusted Working Capital toworking capital: June 29, 2014 June 30, 2013 June 24, 2012 Receivables, net $93,925 $98,392 $99,236 Inventories 113,370 110,667 112,750 Accounts payable (51,364) (45,544) (48,541)Accrued expenses (1) (18,487) (18,383) (14,004)Adjusted Working Capital 137,444 145,132 149,441 Cash and cash equivalents 15,907 8,755 10,886 Other current assets 8,025 9,016 15,125 Accrued interest (102) (102) (398)Other current liabilities (10,349) (916) (8,569)Working capital $150,925 $161,885 $166,485 (1)Excludes accrued interest Working capital decreased from $161,885 as of June 30, 2013 to $150,925 as of June 29, 2014. Adjusted Working Capital decreased due to higheraccounts payable and lower receivables, partially offset by an increase in inventories. The higher level of accounts payable is a result of increased capitalexpenditure activity near fiscal year end and the timing of vendor payments. The change in receivables is due to lower sales and the timing of collections.The change in inventories is primarily attributable to (i) increased quantities of Nylon Segment covered yarn located in the U.S. for certain PVA programsand (ii) increased quantities of raw materials for the Polyester Segment’s recycled chip facility. Working capital decreased primarily due to the change inAdjusted Working Capital, along with higher other current liabilities of $9,433, partially offset by an increase in cash and cash equivalents of $7,152.The increase in other current liabilities reflects (i) the short-term payments due under the ABL Facility and capital lease obligations and (ii) changes inincome taxes payable that are attributable to the timing of estimated tax payments related to the Company’s domestic operations. Capital Expenditures In addition to its normal working capital requirements, the Company requires cash to fund capital expenditures. During fiscal year 2014, the Companyspent $19,091 on capital expenditures. The Company expects capital expenditures to double for fiscal year 2015, which is inclusive of approximately$8,000 to $10,000 of annual maintenance capital expenditures (expenditures that extend the useful life of existing assets and/or increase the capabilitiesor production capacity of the assets). The current estimate for fiscal year 2015 reflects anticipated initiatives to expand existing business and pursue PVAgrowth opportunities, especially for REPREVE®, that would require additional capital expenditures to implement. 36 As a result of our increasing focus on REPREVE® and other PVA yarns as part of our mix enrichment strategy, we may incur additional capitalexpenditures beyond the amounts currently estimated in order to expand our manufacturing capabilities for these products, and we may be required toincrease the amount of our working capital. If our strategy is successful, we would expect higher gross profit as a result of the improved mix from thehigher-margin PVA yarns. In addition, the Company may incur additional capital expenditures as it pursues new, currently unanticipated, opportunitiesto expand its production capabilities, for strategic growth initiatives or to further streamline its manufacturing processes. Repayments of Debt Obligations In addition to payments in accordance with the scheduled maturities of debt required under its existing debt obligations, the Company may, from time totime, elect to repay additional amounts borrowed under the ABL Facility. Funds to make such repayments may come from the operating cash flows of thebusiness or other sources and will depend upon the Company’s strategy, prevailing market conditions, liquidity requirements, contractual restrictions andother factors. Stock Repurchase Program During fiscal year 2014, the Company completed its repurchase of shares under its $50,000 stock repurchase program that had been approved by theBoard on January 22, 2013 (the “2013 SRP”). On April 23, 2014, the Board approved a new stock repurchase program (the “2014 SRP”) to authorize theCompany to acquire up to an additional $50,000 of common stock. Under the 2014 SRP (as was the case under the 2013 SRP), the Company is authorizedto repurchase shares at prevailing market prices, through open market purchases or privately negotiated transactions at such times and prices and in suchmanner as determined by management, subject to market conditions, applicable legal requirements, contractual obligations and other factors.Repurchases are expected to be financed through cash generated from operations and borrowings under the Company’s ABL Revolver, and are subject toapplicable limitations and restrictions as set forth in the ABL Facility. The 2014 SRP has no stated expiration or termination date, and there is no timelimit or specific time frame otherwise for repurchases. The Company may discontinue repurchases at any time that management determines additionalpurchases are not beneficial or advisable. Liquidity Summary Historically, the Company has met its working capital, capital expenditures and debt service requirements from its cash flows from operations. TheCompany currently believes that its existing cash balances, cash provided by operating activities, and borrowings available under the ABL Revolver willenable the Company to comply with the terms of its indebtedness and meet its foreseeable liquidity requirements. Domestically, the Company’s cashbalances, cash provided by operating activities and borrowings available under the ABL Revolver continue to be sufficient to fund the Company’sdomestic operating activities as well as cash commitments for its investing and financing activities. For its foreign operations, the Company expects itsexisting cash balances and cash provided by operating activities will provide the needed liquidity to fund its foreign operating activities and any foreigninvesting activities, such as future capital expenditures. Cash Provided by Operating Activities Net cash provided by operating activities consists of the following: For the Fiscal Years Ended June 29, 2014 June 30, 2013 June 24, 2012 Cash receipts: Receipts from customers $692,200 $713,283 $700,379 Distributions received from unconsolidated affiliates 13,214 14,940 10,616 Other receipts 6,762 864 3,733 Cash payments: Payments to suppliers and other operating costs 517,188 552,685 541,298 Payments for salaries, wages, and benefits 116,735 112,268 109,444 Payments for taxes 12,569 8,100 3,988 Payments for interest 3,313 4,701 16,689 Payments for restructuring and severance 2,353 62 — Other 128 — — Adjusted net cash provided by operating activities 59,890 51,271 43,309 Adjustment for excess tax benefit on stock-based compensation plans (1) (3,533) (762) — Net cash provided by operating activities $56,357 $50,509 $43,309 (1)Adjustment for excess tax benefit on stock-based compensation plans represents the classification of the tax benefit realized from share-basedpayment awards within net cash used in financing activities with a corresponding offset to net cash provided by operating activities. 37 Fiscal Year 2014 compared to Fiscal Year 2013 The decline in receipts from customers is primarily due to one less week of sales in fiscal year 2014 and the negative effects of currency translation due tothe weakening of the Brazilian Real against the U.S. dollar, partially offset by sales mix improvements. Other receipts include the return of utility andvalue-added tax deposits of $4,805, plus associated interest of $1,225, and other interest and miscellaneous income. The decrease in payments tosuppliers and other operating costs is primarily a result of one less week of sales and production for operations in the U.S. and El Salvador and softermarket conditions for the International Segment. The increase in payments for salaries, wages and benefits is primarily due to higher variablecompensation, partially offset by lower executive compensation. Payments for restructuring and severance primarily relate to the relocation of certainmachinery in the U.S. and El Salvador and payments to two former executive officers. The decline in payments for interest was due to both a loweraverage outstanding debt balance and a lower weighted average interest rate. The Company’s payments for taxes increased primarily due to increaseddomestic profitability. Fiscal Year 2013 compared to Fiscal Year 2012 The increase in receipts from customers is primarily attributable to increased sales volume across all segments, including $11,854 from the effect of theadditional week in fiscal year 2013, and improved cash collections. Other receipts include interest income and other miscellaneous cash receipts. Theincrease in payments to suppliers and other operating costs is primarily driven by higher production volumes, including the effect of the additional weekin fiscal year 2013. The increase in payments for salaries, wages and benefits is primarily due to higher production volumes and inflationary increases.The decline in payments for interest was due to both a lower average outstanding debt balance and a lower weighted average interest rate. Taxes paid bythe Company increased primarily due to higher profitability for the U.S. operations. Cash Used in Investing Activities and Financing Activities The Company utilized $16,869 for net investing activities and $32,410 for net financing activities during fiscal year 2014. Significant investingactivities include $19,091 for capital expenditures, which primarily relate to improving the Company’s manufacturing flexibility and capability toproduce PVA products, adding to the capacity, flexibility and efficiency of the Company’s Yadkinville texturing facility and increasing the capacity ofthe recycling facility. Significant financing outflows include cash payments of $36,551 for the repurchase of Company stock made under both the 2013SRP and the 2014 SRP. The Company utilized $9,771 for net investing activities and utilized $41,933 for net financing activities during fiscal year 2013. Significantexpenditures for investing activities include $8,809 for capital expenditures. Significant financing activities include repurchases of Company stock of$19,315, and net cash utilized toward the reduction of long term debt of $25,580. During fiscal year 2013, the Company prepaid in full the Term B Loan,which included $20,515 in optional and mandatory prepayments and $615 of prepayment call premiums. In addition, the Company paid $7,200 inscheduled principal payments on the ABL Term Loan, received $1,500 in net borrowings from the ABL Revolver and received $1,250 in proceeds fromborrowings under a term loan from an unconsolidated affiliate. The Company utilized $6,858 for net investing activities and utilized $49,834 for net financing activities during fiscal year 2012. The Company spent$6,354 on capital expenditures and reduced its overall long-term debt by $47,112. In addition, the Company refinanced its debt at a cost of $3,127. Contractual Obligations As of June 29, 2014, the Company’s contractual obligations consist of the following: Cash Payments Due By Period Description of Commitment Total Less Than 1Year 1-3 years 3-5 years More than5 years ABL Revolver $26,000 $— $— $26,000 $— ABL Term Loan 68,000 6,375 17,000 44,625 — Capital lease obligations 4,238 840 1,674 924 800 Term loan from unconsolidated affiliate 1,250 — 1,250 — — Contingent consideration (1) 2,563 537 1,156 870 — Other long-term obligations (2) 4,148 449 86 65 3,548 Subtotal 106,199 8,201 21,166 72,484 4,348 Interest on long-term debt and other obligations (3) 13,825 3,181 6,041 4,437 166 Operating leases 5,564 2,118 2,553 893 — Purchase obligations (4) 41,794 17,057 17,743 6,994 — Total cash payments by period $167,382 $30,557 $47,503 $84,808 $4,514 (1)Contingent consideration payments are reflected at present value based on the expected future payments used in the underlying fair valuedetermination.(2)Other long-term obligations do not include an estimate of the timing of future tax payments related to uncertain tax positions; therefore, $1,101 hasbeen excluded from the table above.(3)Interest payments on variable-rate debt instruments are calculated for future periods using interest rates and terms in effect at June 29, 2014.(4)Purchase obligations primarily consist of utility, software and other service agreements. 38 For purposes of the above table, purchase obligations are defined as agreements that are enforceable and legally binding and that specify all significantterms, including fixed or minimum quantities to be purchased; fixed, minimum or variable price provisions; and the approximate timing of thetransaction. As of June 29, 2014, the Company’s open purchase orders totaled approximately $45,124 and are expected to be settled in fiscal year 2015. These openpurchase orders are in the ordinary course of business for the procurement of (i) raw materials used in production, (ii) certain consumables and outsourcedservices used in the Company’s manufacturing processes and (iii) selected finished goods for resale sourced from third-party suppliers. As of June 29, 2014, the Company had $2,325 of standby letters of credit, none of which have been drawn upon. Recent Accounting Pronouncements In May 2014, the Financial Accounting Standards Board issued new accounting guidance for the recognition of revenue from contracts with customers,which will replace most existing revenue recognition guidance in U.S. GAAP when it becomes effective. The new standard is effective for the Company’sfiscal year 2018, and early adoption is not permitted. The Company is evaluating the effect the new guidance will have on its consolidated financialstatements and related disclosures. The Company has not yet determined the effect of the standard on its ongoing financial reporting. There have been no other newly issued or newly applicable accounting pronouncements that have, or are expected to have, a significant impact on theCompany's financial statements. Off Balance Sheet Arrangements The Company is not a party to any off-balance sheet arrangements that have, or are reasonably likely to have, a current or future material effect on theCompany’s financial condition, results of operations, liquidity or capital expenditures. Critical Accounting Policies The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amountsreported in the financial statements and accompanying notes. The SEC has defined a company’s most critical accounting policies as those involvingaccounting estimates that require management to make assumptions about matters that are highly uncertain at the time and where different reasonableestimates or changes in the accounting estimate from quarter to quarter could materially impact the presentation of the financial statements. Thefollowing discussion provides further information about accounting policies critical to the Company and should be read in conjunction with “Note 2.Summary of Significant Accounting Policies” to the Consolidated Financial Statements included in “Item 8. Financial Statements and SupplementaryData” of this Annual Report on Form 10-K. Receivables Reserves An allowance for losses is provided for known and potential losses arising from yarn quality claims and for amounts owed by customers. Reserves for yarnquality claims are based on historical claim experience and known pending claims. The collectability of accounts receivable is based on a combination offactors including the aging of accounts, historical write off experience, present economic conditions such as customer bankruptcy filings and thefinancial health of specific customers and market sectors. Since losses depend to a large degree on future economic conditions, and the health of thetextile industry, a significant level of judgment is required to arrive at the allowance for uncollectible accounts, which is established based onpercentages applied to accounts aged for certain periods of time, supplemented by specific reserves for certain customer accounts where collection is nolonger certain. Establishing reserves for yarn claims and uncollectible accounts requires management judgment and estimates. The Company does notbelieve there is a reasonable likelihood that there will be a material change in the estimates and assumptions it uses to assess the allowance for losses.However, certain unexpected events such as a customer bankruptcy filing could have a material impact on the Company’s results of operations. TheCompany has not made any material changes to the methodology used in establishing its accounts receivable loss reserves during the past three fiscalyears. A plus or minus 10% change in its aged accounts receivable reserve percentages would not have been material to the Company’s financialstatements for the past three years. 39 Inventory Reserves Inventory reserves are established based on many factors including historical recovery rates, the aging of inventories on-hand, inventory movement andexpected net realizable value of specific products, and current economic conditions. Specific reserves are established based on a determination of theobsolescence of the inventory and whether the inventory value exceeds amounts to be recovered through expected sales prices, less selling costs.Estimating sales prices and evaluating the condition of the inventories require judgment and estimates, which may impact the ending inventory valuationand gross margins. The Company uses current and historical knowledge to record reasonable estimates of its markdown percentages and expected salesprices. The Company believes it is unlikely that differences in actual demand or selling prices from those projected by management would have amaterial impact on the Company’s financial condition or results of operations. The Company has not made any material changes to the methodologyused in establishing its inventory loss reserves during the past three fiscal years. A plus or minus 10% change in its aged inventory reserves would nothave been material to the Company’s financial statements for the past three fiscal years. Impairment of Long-Lived Assets Long-lived assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable.For assets held for sale, an impairment charge is recognized if the carrying value of the assets exceeds the fair value less costs to sell. Estimates arerequired to determine the fair value, the disposal costs and the time period to dispose of the assets. Such estimates are critical in determining whether anyimpairment charge should be recorded and the amount of such charge if an impairment loss is deemed to be necessary. For assets held and used,impairment may occur if projected undiscounted cash flows are not adequate to cover the carrying value of the assets. In such cases, additional analysis isconducted to determine the amount of loss to be recognized, and the impairment loss is determined as the amount the carrying value of the asset or assetgroup exceeds the estimated fair value, measured by future discounted cash flows. The analysis requires estimates of the amount and timing of projectedcash flows and, where applicable, judgment associated with, among other factors, the appropriate discount rate. Such estimates are critical in determiningwhether any impairment charge should be recorded and the amount of such charge if an impairment loss is deemed to be necessary. The Company’sjudgment regarding the existence of circumstances that indicate the potential impairment of an asset’s carrying value is based on several factors,including, but not limited to, changes in business environment, a decline in operating cash flows or a decision to close a manufacturing facility. Thevariability of these factors depends on a number of conditions, including uncertainty about future events and general economic conditions. Impairment of Investment in Unconsolidated Affiliates The Company evaluates its investments in unconsolidated affiliates whenever events or changes in circumstances indicate that the carrying amount maynot be recoverable. The Company evaluates the ability of an affiliate to generate sufficient earnings and cash flows to justify its carrying value.Reductions in an affiliate’s cash flows that are other than temporary and indicative of a loss of investment value are assessed for impairment purposes. Forfiscal year 2014, the Company determined there were no “other-than-temporary” impairments related to the carrying value of its investments inunconsolidated affiliates. Valuation Allowance for Deferred Tax Assets The Company currently has a valuation allowance against certain of its deferred tax assets in the U.S. and foreign subsidiaries due to negative evidenceconcerning the realization of those deferred tax assets. In assessing the realization of deferred tax assets, management considers whether it is more likelythan not that some portion or all of the deferred tax assets will be realized. The ultimate realization of deferred tax assets is dependent upon the generationof future taxable income during the periods in which those temporary differences reverse. Management considers the scheduled reversal of taxabletemporary differences, taxable income in carryback periods, projected future taxable income and tax planning strategies in making this assessment. TheCompany reviews its estimates of future taxable income on a quarterly basis to assess if the need for a valuation allowance exists. The Companycontinually evaluates both positive and negative evidence to determine whether and when the valuation allowance, or a portion thereof, should bereleased. A release of the valuation allowance could have a material effect on earnings in the period of release. The valuation allowance as of June 29,2014 was $18,615. Management and the Board’s Audit Committee discussed the development, selection and disclosure of all of the critical accounting estimates describedabove. Item 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK The Company is exposed to market risks associated with changes in interest rates, fluctuation in currency exchange rates and raw material and commodityrisks, which may adversely affect its financial position, results of operations or cash flows. The Company does not enter into derivative financialinstruments for trading purposes, nor is it a party to any leveraged financial instruments. 40  Interest Rate Risk The Company is exposed to interest rate risk through its borrowing activities. As of June 29, 2014, the Company had borrowings under its ABL Revolverand ABL Term Loan that totaled $94,000 and contain variable rates of interest; however, the Company hedges a significant portion of such interest ratevariability using an interest rate swap. As of June 29, 2014, after considering the variable rate debt obligations that have been hedged and the Company’soutstanding debt obligations with fixed rates of interest, the Company’s sensitivity analysis shows that a 50-basis point increase in LIBOR as of June 29,2014 would result in an increase of $145 in annual cash interest expense. Currency Exchange Rate Risk The Company conducts its business in various foreign countries and in various foreign currencies. Each of the Company’s subsidiaries may enter intotransactions (sales, purchases, fixed purchase commitments, etc.) that are denominated in currencies other than the subsidiary’s functional currency andthereby expose the Company to foreign currency exchange risk. The Company may enter into foreign currency forward contracts to hedge this exposure.For sales transactions, the Company typically hedges 50% to 75% of the sales value of these orders by using forward currency contracts. The maturitydates of the forward currency contracts are intended to match the anticipated collection dates of the receivables. The Company may also enter into foreigncurrency forward contracts to hedge its exposure for certain equipment or inventory purchase commitments. As of June 29, 2014, the latest maturity datefor outstanding forward currency contracts was in July 2014. As of June 29, 2014, the Company did not have a significant amount of exposure related toany foreign currency forward contracts. As of June 29, 2014, the Company’s subsidiaries outside the U.S., whose functional currency is other than the U.S. dollar, held approximately 18.4% ofthe Company’s consolidated total assets. The Company does not enter into foreign currency derivatives to hedge its net investment in its foreignoperations. As of June 29, 2014, $14,620, or 91.9%, of the Company’s cash and cash equivalents were held outside the U.S., of which approximately $1,797 wereheld in U.S. dollar equivalents. More information regarding the Company’s derivative financial instruments as of June 29, 2014 is provided in “Note 18. Fair Value of FinancialInstruments and Non-Financial Assets and Liabilities” to the Consolidated Financial Statements included in “Item 8. Financial Statements andSupplementary Data” of this Annual Report on Form 10-K. Raw Material and Commodity Risks A significant portion of the Company’s raw materials and energy costs are derived from petroleum-based chemicals. The prices for petroleum andpetroleum-related products and energy costs are volatile and dependent on global supply and demand dynamics, including certain geo-political risks. The Company does not use financial instruments to hedge its exposure to changes in these costs. The costs of the primary raw materials that theCompany uses throughout all of its operations are generally based on U.S. dollar pricing; and such materials are purchased at market or at fixed prices thatare established with individual vendors as part of the purchasing process for quantities expected to be consumed in the ordinary course of business. Other Risks The Company is also exposed to political risk, including changing laws and regulations governing international trade, such as quotas, tariffs and taxlaws. The degree of impact and the frequency of these events cannot be predicted. Item 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA The Company’s financial statements required by this item are included on pages F-1 through F-41 of this Annual Report on Form 10-K. See Item 15(a)(1)for a listing of financial statements provided. Item 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE None. 41 Item 9A. CONTROLS AND PROCEDURES (a) Evaluation of disclosure controls and procedures. As of June 29, 2014, an evaluation of the effectiveness of the Company's disclosure controls andprocedures (as defined in Rule 13a-15(e) and 15d-15(e) promulgated under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) wasperformed under the supervision and with the participation of the Company's management, including the Chief Executive Officer and Chief FinancialOfficer. Based on that evaluation, the Company’s Chief Executive Officer and Chief Financial Officer concluded that the Company’s disclosure controlsand procedures are effective to ensure that information required to be disclosed by the Company in its reports that it files or submits under the ExchangeAct is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission rules and forms, andthat information required to be disclosed by the Company in the reports the Company files or submits under the Exchange Act is accumulated andcommunicated to the Company’s management, including its principal executive officer and principal financial officer, as appropriate to allow timelydecisions regarding required disclosure. (b) Management’s annual report on internal control over financial reporting. Management of the Company is responsible for establishing andmaintaining adequate internal control over financial reporting (as defined in Rule 13a-15(f) and 15d-15(f) promulgated under the Exchange Act). TheCompany’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reportingand the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. The Company’s internalcontrol over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accuratelyand fairly reflect the transactions and dispositions of the assets of the Company; (ii) provide reasonable assurance that transactions are recorded asnecessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures ofthe Company are being made only in accordance with authorizations of management and directors of the Company; and (iii) provide reasonableassurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the Company’s assets that could have a materialeffect on the financial statements. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluationof effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree ofcompliance with the policies or procedures may deteriorate. Management, under the supervision and with the participation of the Chief Executive Officer and Chief Financial Officer, assessed the effectiveness of theCompany’s internal control over financial reporting as of June 29, 2014, based on the framework set forth by the Committee of Sponsoring Organizationsof the Treadway Commission (COSO) in Internal Control-Integrated Framework (1992). Based on that assessment, management concluded that, as ofJune 29, 2014, the Company’s internal control over financial reporting is effective based on the criteria established in Internal Control-IntegratedFramework (1992). (c) Attestation report of the registered public accounting firm. The effectiveness of the Company’s internal control over financial reporting as of June 29,2014 has been audited by KPMG LLP, an independent registered public accounting firm. Their report, which appears in “Item 8. Financial Statements andSupplementary Data” included herein, expresses an unqualified opinion on the effectiveness of the Company’s internal control over financial reporting asof June 29, 2014. (d) Changes in internal control over financial reporting. During the Company’s fourth quarter of fiscal year 2014, there has been no change in theCompany’s internal controls over financial reporting that has materially affected, or is reasonably likely to materially affect, the Company’s internalcontrols over financial reporting. Item 9B. OTHER INFORMATION None. 42 PART III Item 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE The information required by this Item with respect to executive officers is set forth above in Part I under “Item 1C. Executive Officers of the Registrant.”The other information required by this Item will be set forth in the Company’s definitive proxy statement for its 2014 Annual Meeting of Shareholders tobe filed within 120 days after the Company’s fiscal year end on June 29, 2014 (the “Proxy Statement”), including under the headings “Proposal 1:Election of Directors,” “Nominees for Election as Directors,” “Section 16(a) Beneficial Ownership Reporting Compliance,” “Beneficial Ownership ofCommon Stock by Directors and Executive Officers,” “Board of Directors Procedural Matters,” and “Corporate Governance Matters,” and is incorporatedherein by reference. Our non-employee directors and their respective principal occupation or employment, if any, are as follows: William J. Armfield, IV (President,Spotswood Capital, LLC); Archibald Cox, Jr. (Chairman, Sextant Group, Inc.); Kenneth G. Langone (President and Chief Executive Officer, InvemedAssociates LLC); George R. Perkins, Jr. (Retired Chairman of the Board and former Chief Executive Officer, Frontier Spinning Mills, Inc.); Suzanne M.Present (Co-Founder and Principal, Gladwyne Partners, LLC); G. Alfred Webster (Retired former Executive Vice President of the Company); and MitchelWeinberger (President and Chief Operating Officer, Dillon Yarn Corporation). Code of Business Conduct and Ethics; Ethical Business Conduct Policy Statement The Company has adopted a written Code of Business Conduct and Ethics that is applicable to members of the Board and executive officers, includingthe Chief Executive Officer, the Chief Financial Officer and the Chief Accounting Officer (the “Code of Ethics”). The Company has also adopted anEthical Business Conduct Policy Statement (the “Ethics Policy Statement”) that applies to all Company personnel. The Code of Ethics and the EthicsPolicy Statement are available on the Company’s website at www.unifi.com, under the “Investor Relations” section, and paper copies are availablewithout charge to any shareholder that requests a copy by contacting Unifi, Inc., 7201 West Friendly Avenue, Greensboro, North Carolina 27419-9109,Attention: Office of the Secretary. Any amendments to or waivers of the Code of Ethics applicable to the Company’s Chief Executive Officer, ChiefFinancial Officer or Chief Accounting Officer will be disclosed on the Company’s website promptly following the date of such amendment or waiver. Item 11. EXECUTIVE COMPENSATION The information required by this Item will be set forth in the Proxy Statement, including under the headings “Executive Compensation,” “Directors’Compensation,” “Compensation Committee Interlocks and Insider Participation in Compensation Decisions,” “Compensation Committee Report,” and“Compensation Discussion and Analysis,” and is incorporated herein by reference. Item 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS The information required by this Item will be set forth in the Proxy Statement, including under the headings “Equity Compensation Plan Information,”“Principal Holders of Common Stock” and “Beneficial Ownership of Common Stock by Directors and Executive Officers,” and is incorporated herein byreference. Item 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE The information required by this Item will be set forth in the Proxy Statement, including under the headings “Transactions with Related Parties andCertain Other Persons” and “Corporate Governance Matters – Director Independence,” and is incorporated herein by reference. Item 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES The information required by this Item will be set forth in the Proxy Statement under the heading “Proposal 3: Ratification of the Independent RegisteredPublic Accounting Firm” and is incorporated herein by reference. 43 PART IV Item 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES (a) 1. Financial Statements The financial statements and schedules listed in the accompanying Index to Consolidated Financial Statements on page F-1 are filed as part ofthis Report.2. Financial Statement SchedulesParkdale America, LLC (“PAL”) Financial Statements as of January 3, 2015 and December 28, 2013 and for the years ended January 3, 2015,December 28, 2013 and December 29, 2012 will be filed on or before April 3, 2015. PAL is an unconsolidated joint venture in which the Company holds a 34% equity ownership interest. PAL’s prior fiscal year end was December28, 2013, which is more than 90 days after the Company’s corresponding fiscal year, which ended June 30, 2013. Accordingly, pursuant to Rule3-09(b)(2) of Regulation S-X under the Exchange Act, the Company filed the required financial statements and related notes of PAL on March27, 2014 via an amendment to the Annual Report on Form 10-K for the fiscal year ended June 30, 2013. PAL’s current fiscal year end is January3, 2015, which is more than 90 days after the Company’s corresponding fiscal year, which ended June 29, 2014. Accordingly, pursuant to Rule3-09(b)(2) of Regulation S-X under the Exchange Act, the Company will file the required financial statements and related notes of PAL via anamendment to this Annual Report on Form 10-K on or before April 3, 2015. 3. Exhibits ExhibitNumberDescription 3.1(i)(a)Restated Certificate of Incorporation of Unifi, Inc., as amended (incorporated by reference to Exhibit 3a to the Company’s AnnualReport on Form 10-K for the fiscal year ended June 27, 2004 (Reg. No. 001-10542) filed on September 17, 2004). 3.1(i)(b)Certificate of Change to the Certificate of Incorporation of Unifi, Inc. (incorporated by reference to Exhibit 3.1 to the Company’sCurrent Report on Form 8-K (Reg. No. 001-10542) dated July 25, 2006). 3.1(i)(c)Certificate of Amendment to Restated Certificate of Incorporation of Unifi, Inc. (incorporated by reference to Exhibit 3.1 to theCompany’s Current Report on Form 8-K (Reg. No. 001-10542) dated November 3, 2010). 3.1(ii)Restated By-laws of Unifi, Inc. (last amended July 23, 2014) (incorporated by reference to Exhibit 3.1 to the Company’s CurrentReport on Form 8-K (Reg. No. 001-10542) filed on July 23, 2014). 4.1Registration Rights Agreement dated January 1, 2007 between Unifi, Inc. and Dillon Yarn Corporation (incorporated by referencefrom Exhibit 7.1 to the Schedule 13D dated January 2, 2007 filed by Dillon Yarn Corporation). 4.2Credit Agreement, by and among Wells Fargo Bank, N.A., as administrative agent, sole lead arranger, and sole book runner, thelenders that are parties thereto, as the lenders, and Unifi, Inc. and certain of its domestic subsidiaries, as borrowers, dated as of May 24,2012 (incorporated by reference to Exhibit 4.1 to the Company’s Current Report on Form 8-K (Reg. No. 001-10542) dated May 24,2012). 4.3Guaranty and Security Agreement, dated as of May 24, 2012, among the Grantors from time to time party thereto and Wells FargoBank, N.A., as administrative agent (incorporated by reference to Exhibit 4.2 to the Company’s Current Report on Form 8-K (Reg. No.001-10542) dated May 24, 2012). 4.4Trademark Security Agreement, dated as of May 24, 2012, among the Grantors from time to time party thereto and Wells Fargo Bank,N.A., as agent (incorporated by reference to Exhibit 4.3 to the Company’s Current Report on Form 8-K (Reg. No. 001-10542) datedMay 24, 2012). 4.5Patent Security Agreement, dated as of May 24, 2012, among the Grantors from time to time party thereto and Wells Fargo Bank,N.A., as agent (incorporated by reference to Exhibit 4.4 to the Company’s Current Report on Form 8-K (Reg. No. 001-10542) datedMay 24, 2012). 44 ExhibitNumberDescription 4.6Intercreditor Agreement, dated as of May 24, 2012, by and between Wells Fargo Bank, N.A., in its capacity as agent, and WilmingtonTrust, National Association, as administrative agent, as acknowledged by Unifi, Inc., Unifi Manufacturing, Inc., Unifi Sales &Distribution, Inc., Spanco International, Inc., and Unifi Equipment Leasing, LLC (incorporated by reference to Exhibit 4.5 to theCompany’s Current Report on Form 8-K (Reg. No. 001-10542) dated May 24, 2012). 4.7First Amendment to Credit Agreement, dated as of December 27, 2012, by and among Unifi, Inc. and Unifi Manufacturing, Inc., asborrowers, Wells Fargo Bank, N.A., as agent for the lenders, and certain lenders party thereto (incorporated by reference to Exhibit 4.1of the Company’s Current Report on Form 8-K (Reg. No. 001-10542) dated December 27, 2012). 4.8Second Amendment to Credit Agreement, dated as of June 25, 2013, by and among Unifi, Inc. and Unifi Manufacturing, Inc., asborrowers, Wells Fargo Bank, N.A., as agent for the lenders, and certain lenders party thereto (incorporated by reference to Exhibit 4.1of the Company’s Current Report on Form 8-K (Reg. No. 001-10542) dated June 25, 2013). 4.9First Amendment to Guaranty and Security Agreement, dated as of June 25, 2013, by and among the Grantors listed therein and WellsFargo Bank, N.A., as administrative agent (incorporated by reference to Exhibit 4.9 to the Company’s Annual Report on Form 10-Kfor the fiscal year ended June 30, 2013 (Reg. No. 001-10542) filed on September 10, 2013). 4.10Third Amendment to Credit Agreement, dated as of January 16, 2014, by and among the Company and Unifi Manufacturing, Inc., asborrowers, Wells Fargo Bank, N.A., as agent for the lenders, and certain lenders party thereto (incorporated by reference to Exhibit 4.1to the Company’s Current Report on Form 8-K (Reg. No. 001-10542) dated March 28, 2014). 4.11Fourth Amendment to Credit Agreement, dated as of March 28, 2014, by and among the Company and Unifi Manufacturing, Inc., asborrowers, Wells Fargo Bank, N.A., as agent for the lenders, and certain lenders party thereto (incorporated by reference to Exhibit 4.2to the Company’s Current Report on Form 8-K (Reg. No. 001-10542) dated March 28, 2014). 4.12Second Amendment to Guaranty and Security Agreement, dated as of March 28, 2014, by among the Grantors listed therein and WellsFargo Bank, N.A., as administrative agent (incorporated by reference to Exhibit 4.3 to the Company’s Current Report on Form 8-K(Reg. No. 001-10542) dated March 28, 2014). 4.13Fifth Amendment to Credit Agreement, dated as of August 25, 2014, by and among the Company and Unifi Manufacturing, Inc., asborrowers, Wells Fargo Bank, N.A., as agent for the lenders, and certain lenders party thereto (incorporated by reference to Exhibit 4.1to the Company’s Current Report on Form 8-K (Reg. No. 001-10542) dated August 25, 2014). 10.1*1999 Unifi, Inc. Long-Term Incentive Plan (incorporated by reference from Exhibit 99.1 to the Company’s Registration Statementon Form S-8 (Reg. No. 333-43158) filed on August 7, 2000). 10.2*Form of Option Agreement for Incentive Stock Options granted under the 1999 Unifi, Inc. Long-Term Incentive Plan (incorporatedby reference to Exhibit 10.5 to the Company’s Current Report on Form 8-K (Reg. No. 001-10542) dated July 25, 2006). 10.3*Unifi, Inc. Supplemental Key Employee Retirement Plan, effective July 26, 2006 (incorporated by reference to Exhibit 10.4 to theCompany’s Current Report on Form 8-K (Reg. No. 001-10542) dated July 25, 2006). 10.4*Change in Control Agreement between Unifi, Inc. and Thomas H. Caudle, Jr., effective August 14, 2009 (incorporated by referenceto Exhibit 10.3 to the Company’s Current Report on Form 8-K (Reg. No. 001-10542) dated August 14, 2009). 45 ExhibitNumberDescription 10.5*Change in Control Agreement between Unifi, Inc. and Ronald L. Smith, effective August 14, 2009 (incorporated by reference toExhibit 10.5 to the Company’s Current Report on Form 8-K (Reg. No. 001-10542) dated August 14, 2009). 10.6*Change in Control Agreement between Unifi, Inc. and R. Roger Berrier, Jr., effective August 14, 2009 (incorporated by reference toExhibit 10.2 to the Company’s Current Report on Form 8-K (Reg. No. 001-10542) dated August 14, 2009). 10.7*Change in Control Agreement between Unifi, Inc. and William L. Jasper, effective August 14, 2009 (incorporated by reference toExhibit 10.1 to the Company’s Current Report on Form 8-K (Reg. No. 001-10542) dated August 14, 2009). 10.8Sales and Services Agreement dated January 1, 2007 between Unifi, Inc. and Dillon Yarn Corporation (incorporated by reference toExhibit 99.1 to the Company’s Registration Statement on Form S-3 (Reg. No. 333-140580) filed on February 9, 2007). 10.9First Amendment to Sales and Service Agreement between Unifi Manufacturing, Inc. and Dillon Yarn Corporation, effective January1, 2009 (incorporated by reference to Exhibit 99.2 to the Company’s Current Report on Form 8-K (Reg. No. 001-10542) filed onDecember 3, 2008). 10.10*2008 Unifi, Inc. Long-Term Incentive Plan (incorporated by reference to Exhibit 99.1 to the Company’s Registration Statement onForm S-8 (Reg. No. 333-156090) filed on December 12, 2008). 10.11*Form of Option Agreement for Incentive Stock Options granted under the 2008 Unifi, Inc. Long-Term Incentive Plan (incorporatedby reference to Exhibit 10.3 to the Company’s quarterly report on Form 10-Q for the quarterly period ended December 28, 2008 (Reg.No. 001-10542) filed on February 6, 2009). 10.12*Amendment to the Unifi, Inc. Supplemental Key Employee Retirement Plan (incorporated by reference to Exhibit 10.1 to theCompany’s Current Report on Form 8-K (Reg. No. 001-10542) filed on December 31, 2008). 10.13Yarn Purchase Agreement between Unifi Manufacturing, Inc. and Hanesbrands, Inc. effective November 6, 2009 (incorporated byreference to Exhibit 10.1 to the Company’s quarterly report on Form 10-Q for the quarterly period ended December 27, 2009 (Reg.No. 001-10542) filed on February 5, 2010) (portions of the exhibit have been redacted and filed separately with the Securities andExchange Commission pursuant to a confidential treatment request). 10.14Second Amendment to Sales and Service Agreement between Unifi, Inc. and Dillon Yarn Corporation, effective January 1, 2010(incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K (Reg. No. 001-10542) dated December 11,2009). 10.15*Form of Restricted Stock Unit Agreement for restricted stock units granted under the 2008 Unifi, Inc. Long-Term Incentive Plan(incorporated by reference to Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q for the quarterly period ended December26, 2010 (Reg. No. 001-10542) filed on February 4, 2011). 10.16*Unifi, Inc. Director Deferred Compensation Plan, dated as of December 14, 2010 (incorporated by reference to Exhibit 10.2 to theCompany’s Quarterly Report on Form 10-Q for the quarterly period ended December 26, 2010 (Reg. No. 001-10542) filed onFebruary 4, 2011). 10.17Third Amendment to Sales and Service Agreement between Unifi Manufacturing, Inc. and Dillon Yarn Corporation, effective January1, 2011 (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K (Reg. No. 001-10542) datedDecember 20, 2010). 10.18*Form of Restricted Stock Unit Agreement for Employees for restricted stock units granted under the 2008 Unifi, Inc. Long-TermIncentive Plan (incorporated by reference to Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q for the quarterly periodended September 25, 2011 (Reg. No. 001-10542) filed on November 4, 2011). 46 ExhibitNumberDescription 10.19Fourth Amendment to Sales and Service Agreement between Unifi Manufacturing, Inc. and Dillon Yarn Corporation, effectiveJanuary 1, 2012 (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K (Reg. No. 001-10542)dated December 19, 2011). 10.20*Amendment No. 1 to the Change in Control Agreement for William L. Jasper effective December 31, 2011 (incorporated byreference to Exhibit 10.1 to the Company’s Current Report on Form 8-K (Reg. No. 001-10542) dated January 3, 2012). 10.21*Amendment No. 1 to the Change in Control Agreement for R. Roger Berrier, Jr., effective December 31, 2011 (incorporated byreference to Exhibit 10.2 to the Company’s Current Report on Form 8-K (Reg. No. 001-10542) dated January 3, 2012). 10.22*Amendment No. 1 to the Change in Control Agreement for Thomas H. Caudle, Jr. effective December 31, 2011 (incorporated byreference to Exhibit 10.3 to the Company’s Current Report on Form 8-K (Reg. No. 001-10542) dated January 3, 2012). 10.23*Amendment No. 1 to the Change in Control Agreement for Ronald L. Smith effective December 31, 2011 (incorporated by referenceto Exhibit 10.5 to the Company’s Current Report on Form 8-K (Reg. No. 001-10542) dated January 3, 2012). 10.24Deposit Account Control Agreement, dated as of May 24, 2012, among Unifi Manufacturing, Inc., Wells Fargo Bank, N.A., and Bankof America, N.A. (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K (Reg. No. 001-10542)dated May 24, 2012). 10.25First Amendment to Yarn Purchase Agreement between Unifi Manufacturing, Inc. and Hanesbrands, Inc. dated July 17, 2012(incorporated by reference to Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q for the quarterly period ended September23, 2012 (Reg. No. 001-10542) filed on November 2, 2012) (portions of the exhibit have been redacted and filed separately with theSecurities and Exchange Commission pursuant to a confidential treatment request). 10.26*Severance Agreement and Waiver of Claims between Ronald L. Smith and Unifi, Inc., effective August 23, 2013 (incorporated byreference to Exhibit 10.28 to the Company’s Annual Report on Form 10-K for the fiscal year ended June 30, 2013 (Reg. No. 001-10542) filed on September 10, 2013). 10.27*Unifi, Inc. 2013 Incentive Compensation Plan (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form8-K (Reg. No. 001-10542) dated October 23, 2013). 10.28Second Amendment to Yarn Purchase Agreement with Hanesbrands Inc., dated November 21, 2013 by and among UnifiManufacturing, Inc. and Hanesbrands Inc. (incorporated by reference to Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q for the quarterly period ended December 29, 2013 (Reg. No. 001-10542) filed on February 7, 2014). 10.29*Form of Restricted Stock Unit Agreement for Non-Employee Directors, for use in connection with Unifi, Inc. 2013 IncentiveCompensation Plan (incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K (Reg. No. 001-10542)dated October 23, 2013). 10.30*Form of Restricted Stock Unit Agreement for Employees, for use in connection with Unifi, Inc. 2013 Incentive Compensation Plan(incorporated by reference to Exhibit 10.3 to the Company’s Quarterly Report on Form 10-Q for the quarterly period ended December29, 2013 (Reg. No. 001-10542) filed on February 7, 2014). 10.31*Form of Incentive Stock Option Agreement (for Executives and Other Officer-Level Employees), for use in connection with Unifi,Inc. 2013 Incentive Compensation Plan (incorporated by reference to Exhibit 10.4 to the Company’s Quarterly Report on Form 10-Qfor the quarterly period ended December 29, 2013 (Reg. No. 001-10542) filed on February 7, 2014). 47 ExhibitNumberDescription 10.32Third Amendment to Yarn Purchase Agreement with Hanesbrands Inc., dated March 28, 2014 by and among Unifi Manufacturing,Inc. and Hanesbrands Inc. (incorporated by reference to Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q for thequarterly period ended March 30, 2014 (Reg. No. 001-10542) filed on May 9, 2014). 10.33Fourth Amendment to Yarn Purchase Agreement with Hanesbrands Inc., dated May 30, 2014 by and among Unifi Manufacturing, Inc.and Hanesbrands Inc. 10.34Fifth Amendment to Yarn Purchase Agreement with Hanesbrands Inc., dated June 25, 2014 by and among Unifi Manufacturing, Inc.and Hanesbrands Inc. (portions of the exhibit have been redacted and filed separately with the Securities and Exchange Commissionpursuant to a confidential treatment request). 10.35Yarn Purchase Agreement effective as of September 1, 2014 between Unifi Manufacturing, Inc. and Hanesbrands Inc. (portions of theexhibit have been redacted and filed separately with the Securities and Exchange Commission pursuant to a confidential treatmentrequest). 14.1Unifi, Inc. Ethical Business Conduct Policy Statement as amended July 23, 2014. 14.2Unifi, Inc. Code of Business Conduct and Ethics as amended July 23, 2014. 21.1List of Subsidiaries. 23.1Consent of KPMG LLP, Independent Registered Public Accounting Firm. 31.1Chief Executive Officer’s certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. 31.2Chief Financial Officer’s certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. 32.1Chief Executive Officer’s certification pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. 32.2Chief Financial Officer’s certification pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. 101The following materials from Unifi, Inc.’s Annual Report on Form 10-K for the annual period ended June 29, 2014, formatted ineXtensbile Business Reporting Language (“XBRL”): (i) Consolidated Balance Sheets, (ii) Consolidated Statements of Income, (iii)Consolidated Statements of Comprehensive Income (Loss), (iv) Consolidated Statements of Shareholders’ Equity, (v) ConsolidatedStatements of Cash Flows, and (vi) Notes to Consolidated Financial Statements. Filed herewith.*NOTE: These Exhibits are management contracts or compensatory plans or arrangements required to be filed as an exhibit to this Form 10-K pursuant toItem 15(b) of this report. 48+++++++++++++ SIGNATURES Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on itsbehalf by the undersigned, thereunto duly authorized. Unifi, Inc. Date: September 10, 2014 By:/s/ WILLIAM L. JASPER William L. Jasper Chairman of the Board and Chief Executive Officer Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of theregistrant and in the capacities and on the dates indicated: Signature Title Date /s/ WILLIAM L. JASPER Chairman of the Board and Chief Executive Officer September 10, 2014 William L. Jasper (Principal Executive Officer)and Director /s/ JAMES M. OTTERBERG Vice President and Chief Financial Officer September 10, 2014 James M. Otterberg (Principal Financial Officer andPrincipal Accounting Officer) /s/ R. ROGER BERRIER, JR. Director September 10, 2014 R. Roger Berrier, Jr. /s/ WILLIAM J. ARMFIELD, IV Director September 10, 2014 William J. Armfield, IV /s/ ARCHIBALD COX, JR. Director September 10, 2014 Archibald Cox, Jr. /s/ KENNETH G. LANGONE Director September 10, 2014 Kenneth G. Langone /s/ GEORGE R. PERKINS, JR. Director September 10, 2014 George R. Perkins, Jr. /s/ SUZANNE M. PRESENT Director September 10, 2014 Suzanne M. Present /s/ G. ALFRED WEBSTER Director September 10, 2014 G. Alfred Webster /s/ MITCHEL WEINBERGER Director September 10, 2014 Mitchel Weinberger 49 EXHIBIT INDEX ExhibitNumberDescription3.1(i)(a)Restated Certificate of Incorporation of Unifi, Inc., as amended (incorporated by reference to Exhibit 3a to the Company’s AnnualReport on Form 10-K for the fiscal year ended June 27, 2004 (Reg. No. 001-10542) filed on September 17, 2004). 3.1(i)(b)Certificate of Change to the Certificate of Incorporation of Unifi, Inc. (incorporated by reference to Exhibit 3.1 to the Company’sCurrent Report on Form 8-K (Reg. No. 001-10542) dated July 25, 2006). 3.1(i)(c)Certificate of Amendment to Restated Certificate of Incorporation of Unifi, Inc. (incorporated by reference to Exhibit 3.1 to theCompany’s Current Report on Form 8-K (Reg. No. 001-10542) dated November 3, 2010). 3.1(ii)Restated By-laws of Unifi, Inc. (last amended July 23, 2014) (incorporated by reference to Exhibit 3.1 to the Company’s CurrentReport on Form 8-K (Reg. No. 001-10542) filed on July 23, 2014). 4.1Registration Rights Agreement dated January 1, 2007 between Unifi, Inc. and Dillon Yarn Corporation (incorporated by referencefrom Exhibit 7.1 to the Schedule 13D dated January 2, 2007 filed by Dillon Yarn Corporation). 4.2Credit Agreement, by and among Wells Fargo Bank, N.A., as administrative agent, sole lead arranger, and sole book runner, thelenders that are parties thereto, as the lenders, and Unifi, Inc. and certain of its domestic subsidiaries, as borrowers, dated as of May24, 2012 (incorporated by reference to Exhibit 4.1 to the Company’s Current Report on Form 8-K (Reg. No. 001-10542) dated May24, 2012). 4.3Guaranty and Security Agreement, dated as of May 24, 2012, among the Grantors from time to time party thereto and Wells FargoBank, N.A., as administrative agent (incorporated by reference to Exhibit 4.2 to the Company’s Current Report on Form 8-K (Reg.No. 001-10542) dated May 24, 2012). 4.4Trademark Security Agreement, dated as of May 24, 2012, among the Grantors from time to time party thereto and Wells FargoBank, N.A., as agent (incorporated by reference to Exhibit 4.3 to the Company’s Current Report on Form 8-K (Reg. No. 001-10542)dated May 24, 2012). 4.5Patent Security Agreement, dated as of May 24, 2012, among the Grantors from time to time party thereto and Wells Fargo Bank,N.A., as agent (incorporated by reference to Exhibit 4.4 to the Company’s Current Report on Form 8-K (Reg. No. 001-10542) datedMay 24, 2012). 4.6Intercreditor Agreement, dated as of May 24, 2012, by and between Wells Fargo Bank, N.A., in its capacity as agent, andWilmington Trust, National Association, as administrative agent, as acknowledged by Unifi, Inc., Unifi Manufacturing, Inc., UnifiSales & Distribution, Inc., Spanco International, Inc., and Unifi Equipment Leasing, LLC (incorporated by reference to Exhibit 4.5to the Company’s Current Report on Form 8-K (Reg. No. 001-10542) dated May 24, 2012). 4.7First Amendment to Credit Agreement, dated as of December 27, 2012, by and among Unifi, Inc. and Unifi Manufacturing, Inc., asborrowers, Wells Fargo Bank, N.A., as agent for the lenders, and certain lenders party thereto (incorporated by reference to Exhibit4.1 of the Company’s Current Report on Form 8-K (Reg. No. 001-10542) dated December 27, 2012). 4.8Second Amendment to Credit Agreement, dated as of June 25, 2013, by and among Unifi, Inc. and Unifi Manufacturing, Inc., asborrowers, Wells Fargo Bank, N.A., as agent for the lenders, and certain lenders party thereto (incorporated by reference to Exhibit4.1 of the Company’s Current Report on Form 8-K (Reg. No. 001-10542) dated June 25, 2013). 4.9First Amendment to Guaranty and Security Agreement, dated as of June 25, 2013, by and among the Grantors listed therein andWells Fargo Bank, N.A., as administrative agent (incorporated by reference to Exhibit 4.9 to the Company’s Annual Report on Form10-K for the fiscal year ended June 30, 2013 (Reg. No. 001-10542) filed on September 10, 2013). 50 ExhibitNumberDescription4.10Third Amendment to Credit Agreement, dated as of January 16, 2014, by and among the Company and Unifi Manufacturing, Inc., asborrowers, Wells Fargo Bank, N.A., as agent for the lenders, and certain lenders party thereto (incorporated by reference to Exhibit4.1 to the Company’s Current Report on Form 8-K (Reg. No. 001-10542) dated March 28, 2014). 4.11Fourth Amendment to Credit Agreement, dated as of March 28, 2014, by and among the Company and Unifi Manufacturing, Inc., asborrowers, Wells Fargo Bank, N.A., as agent for the lenders, and certain lenders party thereto (incorporated by reference to Exhibit4.2 to the Company’s Current Report on Form 8-K (Reg. No. 001-10542) dated March 28, 2014). 4.12Second Amendment to Guaranty and Security Agreement, dated as of March 28, 2014, by among the Grantors listed therein andWells Fargo Bank, N.A., as administrative agent (incorporated by reference to Exhibit 4.3 to the Company’s Current Report on Form8-K (Reg. No. 001-10542) dated March 28, 2014). 4.13Fifth Amendment to Credit Agreement, dated as of August 25, 2014, by and among the Company and Unifi Manufacturing, Inc., asborrowers, Wells Fargo Bank, N.A., as agent for the lenders, and certain lenders party thereto (incorporated by reference to Exhibit4.1 to the Company’s Current Report on Form 8-K (Reg. No. 001-10542) dated August 25, 2014). 10.1*1999 Unifi, Inc. Long-Term Incentive Plan (incorporated by reference from Exhibit 99.1 to the Company’s Registration Statementon Form S-8 (Reg. No. 333-43158) filed on August 7, 2000). 10.2*Form of Option Agreement for Incentive Stock Options granted under the 1999 Unifi, Inc. Long-Term Incentive Plan (incorporatedby reference to Exhibit 10.5 to the Company’s Current Report on Form 8-K (Reg. No. 001-10542) dated July 25, 2006). 10.3*Unifi, Inc. Supplemental Key Employee Retirement Plan, effective July 26, 2006 (incorporated by reference to Exhibit 10.4 to theCompany’s Current Report on Form 8-K (Reg. No. 001-10542) dated July 25, 2006). 10.4*Change in Control Agreement between Unifi, Inc. and Thomas H. Caudle, Jr., effective August 14, 2009 (incorporated by referenceto Exhibit 10.3 to the Company’s Current Report on Form 8-K (Reg. No. 001-10542) dated August 14, 2009). 10.5*Change in Control Agreement between Unifi, Inc. and Ronald L. Smith, effective August 14, 2009 (incorporated by reference toExhibit 10.5 to the Company’s Current Report on Form 8-K (Reg. No. 001-10542) dated August 14, 2009). 10.6*Change in Control Agreement between Unifi, Inc. and R. Roger Berrier, Jr., effective August 14, 2009 (incorporated by reference toExhibit 10.2 to the Company’s Current Report on Form 8-K (Reg. No. 001-10542) dated August 14, 2009). 10.7*Change in Control Agreement between Unifi, Inc. and William L. Jasper, effective August 14, 2009 (incorporated by reference toExhibit 10.1 to the Company’s Current Report on Form 8-K (Reg. No. 001-10542) dated August 14, 2009). 10.8Sales and Services Agreement dated January 1, 2007 between Unifi, Inc. and Dillon Yarn Corporation (incorporated by reference toExhibit 99.1 to the Company’s Registration Statement on Form S-3 (Reg. No. 333-140580) filed on February 9, 2007). 10.9First Amendment to Sales and Service Agreement between Unifi Manufacturing, Inc. and Dillon Yarn Corporation, effective January1, 2009 (incorporated by reference to Exhibit 99.2 to the Company’s Current Report on Form 8-K (Reg. No. 001-10542) filed onDecember 3, 2008). 10.10*2008 Unifi, Inc. Long-Term Incentive Plan (incorporated by reference to Exhibit 99.1 to the Company’s Registration Statement onForm S-8 (Reg. No. 333-156090) filed on December 12, 2008). 51 ExhibitNumberDescription10.11*Form of Option Agreement for Incentive Stock Options granted under the 2008 Unifi, Inc. Long-Term Incentive Plan (incorporatedby reference to Exhibit 10.3 to the Company’s quarterly report on Form 10-Q for the quarterly period ended December 28, 2008(Reg. No. 001-10542) filed on February 6, 2009). 10.12*Amendment to the Unifi, Inc. Supplemental Key Employee Retirement Plan (incorporated by reference to Exhibit 10.1 to theCompany’s Current Report on Form 8-K (Reg. No. 001-10542) filed on December 31, 2008). 10.13Yarn Purchase Agreement between Unifi Manufacturing, Inc. and Hanesbrands, Inc. effective November 6, 2009 (incorporated byreference to Exhibit 10.1 to the Company’s quarterly report on Form 10-Q for the quarterly period ended December 27, 2009 (Reg.No. 001-10542) filed on February 5, 2010) (portions of the exhibit have been redacted and filed separately with the Securities andExchange Commission pursuant to a confidential treatment request). 10.14Second Amendment to Sales and Service Agreement between Unifi, Inc. and Dillon Yarn Corporation, effective January 1, 2010(incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K (Reg. No. 001-10542) dated December 11,2009). 10.15*Form of Restricted Stock Unit Agreement for restricted stock units granted under the 2008 Unifi, Inc. Long-Term Incentive Plan(incorporated by reference to Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q for the quarterly period endedDecember 26, 2010 (Reg. No. 001-10542) filed on February 4, 2011). 10.16*Unifi, Inc. Director Deferred Compensation Plan, dated as of December 14, 2010 (incorporated by reference to Exhibit 10.2 to theCompany’s Quarterly Report on Form 10-Q for the quarterly period ended December 26, 2010 (Reg. No. 001-10542) filed onFebruary 4, 2011). 10.17Third Amendment to Sales and Service Agreement between Unifi Manufacturing, Inc. and Dillon Yarn Corporation, effectiveJanuary 1, 2011 (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K (Reg. No. 001-10542)dated December 20, 2010). 10.18*Form of Restricted Stock Unit Agreement for Employees for restricted stock units granted under the 2008 Unifi, Inc. Long-TermIncentive Plan (incorporated by reference to Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q for the quarterly periodended September 25, 2011 (Reg. No. 001-10542) filed on November 4, 2011). 10.19Fourth Amendment to Sales and Service Agreement between Unifi Manufacturing, Inc. and Dillon Yarn Corporation, effectiveJanuary 1, 2012 (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K (Reg. No. 001-10542)dated December 19, 2011). 10.20*Amendment No. 1 to the Change in Control Agreement for William L. Jasper effective December 31, 2011 (incorporated byreference to Exhibit 10.1 to the Company’s Current Report on Form 8-K (Reg. No. 001-10542) dated January 3, 2012). 10.21*Amendment No. 1 to the Change in Control Agreement for R. Roger Berrier, Jr., effective December 31, 2011 (incorporated byreference to Exhibit 10.2 to the Company’s Current Report on Form 8-K (Reg. No. 001-10542) dated January 3, 2012). 10.22*Amendment No. 1 to the Change in Control Agreement for Thomas H. Caudle, Jr. effective December 31, 2011 (incorporated byreference to Exhibit 10.3 to the Company’s Current Report on Form 8-K (Reg. No. 001-10542) dated January 3, 2012). 10.23*Amendment No. 1 to the Change in Control Agreement for Ronald L. Smith effective December 31, 2011 (incorporated byreference to Exhibit 10.5 to the Company’s Current Report on Form 8-K (Reg. No. 001-10542) dated January 3, 2012). 52 ExhibitNumberDescription10.24Deposit Account Control Agreement, dated as of May 24, 2012, among Unifi Manufacturing, Inc., Wells Fargo Bank, N.A., andBank of America, N.A. (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K (Reg. No. 001-10542) dated May 24, 2012). 10.25First Amendment to Yarn Purchase Agreement between Unifi Manufacturing, Inc. and Hanesbrands, Inc. dated July 17, 2012(incorporated by reference to Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q for the quarterly period endedSeptember 23, 2012 (Reg. No. 001-10542) filed on November 2, 2012) (portions of the exhibit have been redacted and filedseparately with the Securities and Exchange Commission pursuant to a confidential treatment request). 10.26*Severance Agreement and Waiver of Claims between Ronald L. Smith and Unifi, Inc., effective August 23, 2013 (incorporated byreference to Exhibit 10.28 to the Company’s Annual Report on Form 10-K for the fiscal year ended June 30, 2013 (Reg. No. 001-10542) filed on September 10, 2013). 10.27*Unifi, Inc. 2013 Incentive Compensation Plan (incorporated by reference to Exhibit 10.1 to the Company’s Current Report onForm 8-K (Reg. No. 001-10542) dated October 23, 2013). 10.28Second Amendment to Yarn Purchase Agreement with Hanesbrands Inc., dated November 21, 2013 by and among UnifiManufacturing, Inc. and Hanesbrands Inc. (incorporated by reference to Exhibit 10.1 to the Company’s Quarterly Report on Form10-Q for the quarterly period ended December 29, 2013 (Reg. No. 001-10542) filed on February 7, 2014). 10.29*Form of Restricted Stock Unit Agreement for Non-Employee Directors, for use in connection with Unifi, Inc. 2013 IncentiveCompensation Plan (incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K (Reg. No. 001-10542)dated October 23, 2013). 10.30*Form of Restricted Stock Unit Agreement for Employees, for use in connection with Unifi, Inc. 2013 Incentive Compensation Plan(incorporated by reference to Exhibit 10.3 to the Company’s Quarterly Report on Form 10-Q for the quarterly period endedDecember 29, 2013 (Reg. No. 001-10542) filed on February 7, 2014). 10.31*Form of Incentive Stock Option Agreement (for Executives and Other Officer-Level Employees), for use in connection with Unifi,Inc. 2013 Incentive Compensation Plan (incorporated by reference to Exhibit 10.4 to the Company’s Quarterly Report on Form 10-Q for the quarterly period ended December 29, 2013 (Reg. No. 001-10542) filed on February 7, 2014). 10.32Third Amendment to Yarn Purchase Agreement with Hanesbrands Inc., dated March 28, 2014 by and among Unifi Manufacturing,Inc. and Hanesbrands Inc. (incorporated by reference to Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q for thequarterly period ended March 30, 2014 (Reg. No. 001-10542) filed on May 9, 2014). 10.33Fourth Amendment to Yarn Purchase Agreement with Hanesbrands Inc., dated May 30, 2014 by and among Unifi Manufacturing,Inc. and Hanesbrands Inc. 10.34Fifth Amendment to Yarn Purchase Agreement with Hanesbrands Inc., dated June 25, 2014 by and among Unifi Manufacturing, Inc.and Hanesbrands Inc. (portions of the exhibit have been redacted and filed separately with the Securities and Exchange Commissionpursuant to a confidential treatment request). 10.35Yarn Purchase Agreement effective as of September 1, 2014 between Unifi Manufacturing, Inc. and Hanesbrands Inc. (portions ofthe exhibit have been redacted and filed separately with the Securities and Exchange Commission pursuant to a confidentialtreatment request). 14.1Unifi, Inc. Ethical Business Conduct Policy Statement as amended July 23, 2014. 14.2Unifi, Inc. Code of Business Conduct and Ethics as amended July 23, 2014. 21.1List of Subsidiaries. 23.1Consent of KPMG LLP, Independent Registered Public Accounting Firm. 53+++++++ ExhibitNumberDescription31.1Chief Executive Officer’s certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. 31.2Chief Financial Officer’s certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. 32.1Chief Executive Officer’s certification pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. 32.2Chief Financial Officer’s certification pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. 101The following materials from Unifi, Inc.’s Annual Report on Form 10-K for the annual period ended June 29, 2014, formatted ineXtensbile Business Reporting Language (“XBRL”): (i) Consolidated Balance Sheets, (ii) Consolidated Statements of Income, (iii)Consolidated Statements of Comprehensive Income (Loss), (iv) Consolidated Statements of Shareholders’ Equity, (v) ConsolidatedStatements of Cash Flows, and (vi) Notes to Consolidated Financial Statements. Filed herewith.*NOTE: These Exhibits are management contracts or compensatory plans or arrangements required to be filed as an exhibit to this Form 10-K pursuant toItem 15(b) of this report. 54++++++ INDEX TO CONSOLIDATED FINANCIAL STATEMENTS UNIFI, INC. Consolidated Financial Statements: Reports of Independent Registered Public Accounting FirmF-2 Consolidated Balance Sheets as of June 29, 2014 and June 30, 2013F-4 Consolidated Statements of Income for the fiscal years ended June 29, 2014, June 30, 2013 and June 24, 2012F-5 Consolidated Statements of Comprehensive Income (Loss) for the fiscal years ended June 29, 2014, June 30, 2013 and June 24, 2012F-6 Consolidated Statements of Shareholders’ Equity for the fiscal years ended June 29, 2014, June 30, 2013 and June 24, 2012F-7 Consolidated Statements of Cash Flows for the fiscal years ended June 29, 2014, June 30, 2013 and June 24, 2012F-8 Notes to Consolidated Financial StatementsF-9 F-1 Report of Independent Registered Public Accounting Firm The Board of Directors and ShareholdersUnifi, Inc.: We have audited the accompanying consolidated balance sheets of Unifi, Inc. and subsidiaries as of June 29, 2014 and June 30, 2013, and the relatedconsolidated statements of income, comprehensive income (loss), shareholders’ equity, and cash flows for each of the years in the three-year period endedJune 29, 2014. These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinionon these consolidated financial statements based on our audits. We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards requirethat we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An auditincludes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing theaccounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believethat our audits provide a reasonable basis for our opinion. In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of Unifi, Inc. andsubsidiaries as of June 29, 2014 and June 30, 2013, and the results of their operations and their cash flows for each of the years in the three-year periodended June 29, 2014, in conformity with U.S. generally accepted accounting principles. We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), Unifi Inc. and subsidiaries’internal control over financial reporting as of June 29, 2014, based on criteria established in Internal Control – Integrated Framework (1992) issued bythe Committee of Sponsoring Organizations of the Treadway Commission (COSO), and our report dated September 10, 2014 expressed an unqualifiedopinion on the effectiveness of the Company’s internal control over financial reporting. /s/ KPMG LLP Greensboro, North CarolinaSeptember 10, 2014 F-2 Report of Independent Registered Public Accounting Firm The Board of Directors and ShareholdersUnifi, Inc.: We have audited Unifi, Inc. and subsidiaries’ internal control over financial reporting as of June 29, 2014, based on criteria established in InternalControl – Integrated Framework (1992) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Unifi, Inc.’smanagement is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal controlover financial reporting, included in the accompanying Management’s Annual Report on Internal Control over Financial Reporting. Our responsibility isto express an opinion on the Company’s internal control over financial reporting based on our audit. We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards requirethat we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in allmaterial respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weaknessexists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audit also included performingsuch other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion. A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reportingand the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internalcontrol over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accuratelyand fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded asnecessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures ofthe company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assuranceregarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on thefinancial statements. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluationof effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree ofcompliance with the policies or procedures may deteriorate. In our opinion, Unifi, Inc. and subsidiaries maintained, in all material respects, effective internal control over financial reporting as of June 29, 2014,based on criteria established in Internal Control – Integrated Framework (1992) issued by the Committee of Sponsoring Organizations of the TreadwayCommission (COSO). We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the consolidated balancesheets of Unifi, Inc. and subsidiaries as of June 29, 2014 and June 30, 2013, and the related consolidated statements of income, comprehensive income(loss), shareholders’ equity, and cash flows for each of the years in the three-year period ended June 29, 2014, and our report dated September 10, 2014expressed an unqualified opinion on those consolidated financial statements. /s/ KPMG LLP Greensboro, North CarolinaSeptember 10, 2014 F-3 CONSOLIDATED BALANCE SHEETS(amounts in thousands, except share and per share amounts) June 29, 2014 June 30, 2013 ASSETS Cash and cash equivalents $15,907 $8,755 Receivables, net 93,925 98,392 Inventories 113,370 110,667 Income taxes receivable 179 1,388 Deferred income taxes 1,794 1,715 Other current assets 6,052 5,913 Total current assets 231,227 226,830 Property, plant and equipment, net 123,802 115,164 Deferred income taxes 2,329 2,196 Intangible assets, net 7,394 7,772 Investments in unconsolidated affiliates 99,229 93,261 Other non-current assets 5,086 10,243 Total assets $469,067 $455,466 LIABILITIES AND SHAREHOLDERS’ EQUITY Accounts payable $51,364 $45,544 Accrued expenses 18,589 18,485 Income taxes payable 3,134 851 Current portion of long-term debt 7,215 65 Total current liabilities 80,302 64,945 Long-term debt 92,273 97,688 Other long-term liabilities 7,549 5,053 Deferred income taxes 2,205 1,300 Total liabilities 182,329 168,986 Commitments and contingencies Common stock, $0.10 par (500,000,000 shares authorized, 18,313,959 and 19,205,209 shares outstanding) 1,831 1,921 Capital in excess of par value 42,130 36,375 Retained earnings 245,673 252,112 Accumulated other comprehensive loss (4,619) (5,500)Total Unifi, Inc. shareholders’ equity 285,015 284,908 Non-controlling interest 1,723 1,572 Total shareholders’ equity 286,738 286,480 Total liabilities and shareholders’ equity $469,067 $455,466 See accompanying Notes to Consolidated Financial Statements F-4 CONSOLIDATED STATEMENTS OF INCOME(amounts in thousands, except per share amounts) For the Fiscal Years Ended June 29, 2014 June 30, 2013 June 24, 2012 Net sales $687,902 $713,962 $705,086 Cost of sales 604,640 640,858 650,690 Gross profit 83,262 73,104 54,396 Selling, general and administrative expenses 46,203 47,386 43,482 Provision (benefit) for bad debts 287 (154) 211 Other operating expense, net 5,289 3,409 2,071 Operating income 31,483 22,463 8,632 Interest income (1,790) (698) (1,921)Interest expense 4,329 4,489 16,073 Loss on extinguishment of debt — 1,102 3,203 Loss on previously held equity interest — — 3,656 Other non-operating expense (income) 126 — (1,488)Equity in earnings of unconsolidated affiliates (19,063) (11,444) (19,740)Income before income taxes 47,881 29,014 8,849 Provision (benefit) for income taxes 20,161 13,344 (1,979)Net income including non-controlling interest $27,720 $15,670 $10,828 Less: net (loss) attributable to non-controlling interest (1,103) (965) (663)Net income attributable to Unifi, Inc. $28,823 $16,635 $11,491 Net income attributable to Unifi, Inc. per common share: Basic $1.52 $0.84 $0.57 Diluted $1.47 $0.80 $0.56 See accompanying Notes to Consolidated Financial Statements F-5 CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)(amounts in thousands) For the Fiscal Years Ended June 29, 2014 June 30, 2013 June 24, 2012 Net income including non-controlling interest $27,720 $15,670 $10,828 Other comprehensive income (loss): Foreign currency translation adjustments 327 (6,585) (22,813)Gain (loss) on cash flow hedges for an unconsolidated affiliate — 1,214 (568)Gain (loss) on cash flow hedges, net of reclassification adjustments 554 82 (606)Other comprehensive income (loss) before income taxes 881 (5,289) (23,987)Income tax (provision) benefit on cash flow hedges — (239) 239 Other comprehensive income (loss), net 881 (5,528) (23,748)Comprehensive income (loss) including non-controlling interest 28,601 10,142 (12,920)Less: comprehensive (loss) attributable to non-controlling interest (1,103) (965) (663)Comprehensive income (loss) attributable to Unifi, Inc. $29,704 $11,107 $(12,257) See accompanying Notes to Consolidated Financial Statements F-6 CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY(amounts in thousands) Shares CommonStock Capital inExcess ofPar Value RetainedEarnings AccumulatedOtherComprehensiveIncome (Loss) TotalUnifi, Inc.Shareholders’Equity Non-controllingInterest TotalShareholders’Equity Balance at June 26, 2011 20,080 $2,008 $32,599 $241,272 $23,776 $299,655 $— $299,655 Options exercised 10 1 70 — — 71 — 71 Stock-basedcompensation — — 2,054 — — 2,054 — 2,054 Other comprehensive loss,net of tax — — — — (23,748) (23,748) — (23,748)Acquisition, cost — — — — — — 1,000 1,000 Contributions from non-controlling interest — — — — — — 920 920 Net income (loss) — — — 11,491 — 11,491 (663) 10,828 Balance at June 24, 2012 20,090 $2,009 $34,723 $252,763 $28 $289,523 $1,257 $290,780 Options exercised 174 18 1,280 — — 1,298 — 1,298 Stock-basedcompensation — — 1,533 — — 1,533 — 1,533 Conversion of restrictedstock units 9 1 (1) — — — — — Common stockrepurchased and retiredunder publicly announcedprogram (1,068) (107) (1,922) (17,286) — (19,315) — (19,315)Excess tax benefit onstock-based compensationplans — — 762 — — 762 — 762 Other comprehensive loss,net of tax — — — — (5,528) (5,528) — (5,528)Contributions from non-controlling interest — — — — — — 1,280 1,280 Net income (loss) — — — 16,635 — 16,635 (965) 15,670 Balance at June 30, 2013 19,205 $1,921 $36,375 $252,112 $(5,500) $284,908 $1,572 $286,480 Options exercised 798 79 6,640 — — 6,719 — 6,719 Stock-basedcompensation — — 1,939 — — 1,939 — 1,939 Conversion of restrictedstock units 31 3 (3) — — — — — Common stockrepurchased and retiredunder publicly announcedprograms (1,524) (152) (2,814) (33,585) — (36,551) — (36,551)Common stock tenderedto the Company for theexercise of stock optionsand retired (134) (14) (3,540) (29) — (3,583) — (3,583)Common stock tenderedto the Company forwithholding taxobligations and retired (62) (6) — (1,648) — (1,654) — (1,654)Excess tax benefit onstock-based compensationplans — — 3,533 — — 3,533 — 3,533 Other comprehensiveincome, net of tax — — — — 881 881 — 881 Contributions from non-controlling interest — — — — — — 1,254 1,254 Net income (loss) — — — 28,823 — 28,823 (1,103) 27,720 Balance at June 29, 2014 18,314 $1,831 $42,130 $245,673 $(4,619) $285,015 $1,723 $286,738 See accompanying Notes to Consolidated Financial Statements F-7 CONSOLIDATED STATEMENTS OF CASH FLOWS(amounts in thousands) For the Fiscal Years Ended June 29, 2014 June 30, 2013 June 24, 2012 Cash and cash equivalents at beginning of year $8,755 $10,886 $27,490 Operating activities: Net income including non-controlling interest 27,720 15,670 10,828 Adjustments to reconcile net income including non-controlling interest to net cashprovided by operating activities: Equity in earnings of unconsolidated affiliates (19,063) (11,444) (19,740)Distributions received from unconsolidated affiliates 13,214 14,940 10,616 Depreciation and amortization expense 17,896 24,584 27,135 Loss on extinguishment of debt — 1,102 3,203 Loss on previously held equity interest — — 3,656 Non-cash compensation expense, net 2,690 2,287 2,382 Excess tax benefit on stock-based compensation plans (3,533) (762) — Deferred income taxes 726 6,010 (6,933)Other 1,649 764 460 Changes in assets and liabilities: Receivables, net 4,514 (858) (4,496)Inventories (2,677) (394) 13,140 Other current assets and income taxes receivable 1,141 (410) (1,601)Accounts payable and accruals 1,083 (498) 3,698 Income taxes payable 5,824 (366) 947 Other non-current assets 5,173 (116) 14 Net cash provided by operating activities 56,357 50,509 43,309 Investing activities: Capital expenditures (19,091) (8,809) (6,354)Proceeds from sale of assets 2,719 430 507 Proceeds from other investments 447 694 — Other investments — (1,743) — Investments in unconsolidated affiliates — — (360)Acquisition, net of cash acquired — — (356)Other (944) (343) (295)Net cash used in investing activities (16,869) (9,771) (6,858)Financing activities: Payments on notes payable — — (134,010)Proceeds from revolving credit facilities 149,300 116,700 160,600 Payments on revolving credit facilities (175,800) (115,200) (144,200)Proceeds from term loans 25,200 — 80,000 Payments on term loans — (28,330) (9,769)Proceeds from related party term loan — 1,250 — Payments of debt financing fees (400) (309) (3,127)Payments on capital lease obligations (319) (69) (319)Common stock repurchased and retired under publicly announced programs (36,551) (19,315) — Common stock tendered to the Company for withholding tax obligations and retired (1,654) — — Proceeds from stock option exercises 3,136 1,298 71 Excess tax benefit on stock-based compensation plans 3,533 762 — Contributions from non-controlling interest 1,254 1,280 920 Other (109) — — Net cash used in financing activities (32,410) (41,933) (49,834) Effect of exchange rate changes on cash and cash equivalents 74 (936) (3,221)Net increase (decrease) in cash and cash equivalents 7,152 (2,131) (16,604)Cash and cash equivalents at end of year $15,907 $8,755 $10,886 See accompanying Notes to Consolidated Financial Statements F-8 Unifi, Inc.Notes to Consolidated Financial Statements 1. Background OverviewUnifi, Inc., a New York corporation formed in 1969 (together with its subsidiaries, “we”, the “Company” or “Unifi”), is a multi-national manufacturingcompany that processes and sells high-volume commodity yarns, specialized yarns designed to meet certain customer specifications, and premier value-added (“PVA”) yarns with enhanced performance characteristics. The Company sells yarns made from polyester and nylon to other yarn manufacturersand knitters and weavers that produce fabric for the apparel, hosiery, home furnishings, automotive upholstery, industrial and other end-use markets. TheCompany’s polyester products include polyester polymer beads (“Chip”), partially oriented yarn (“POY”), textured, solution and package dyed, twisted,beamed and draw wound yarns; each is available in virgin or recycled varieties (the latter made from both pre-consumer yarn waste and post-consumerwaste, including plastic bottles). The Company’s nylon products include textured, solution dyed and covered spandex products. The Company maintains one of the textile industry’s most comprehensive yarn product offerings, and it has ten manufacturing operations in fourcountries and participates in joint ventures in Israel and the United States (“U.S.”). The Company’s principal geographic markets for its products arelocated in the U.S., Canada, Mexico, Central America and South America. In addition, the Company has a wholly-owned subsidiary in the People’sRepublic of China (“China”) focused on the sale and promotion of the Company’s PVA and other specialty products in the Asian textile market, primarilyin China, as well as in the European market. Fiscal YearThe Company’s fiscal year ends on the last Sunday in June. The Company’s Brazilian, Colombian and Chinese subsidiaries’ fiscal years end on June30th. The Company’s fiscal years 2014, 2013 and 2012 ended on June 29, 2014, June 30, 2013 and June 24, 2012, respectively, and there were nosignificant transactions or events that occurred between the Company’s fiscal year ends and its subsidiaries’ fiscal year ends. The Company’s fiscal years2014, 2013 and 2012 consisted of 52 weeks, 53 weeks and 52 weeks, respectively. ReclassificationsCertain reclassifications of prior years’ data have been made to conform to the current year presentation. All dollar and other currency amounts and share amounts, except per share amounts, are presented in thousands (000s), except as otherwise noted. 2. Summary of Significant Accounting Policies The Company follows U.S. generally accepted accounting principles (“U.S. GAAP” or “GAAP”). The significant accounting policies described below,together with the other notes that follow, are an integral part of the consolidated financial statements. Principles of ConsolidationThe consolidated financial statements include the accounts of the Company and its subsidiaries in which it maintains a controlling financial interest. Allaccount balances and transactions between the Company and the subsidiaries which it controls have been eliminated. Investments in entities where theCompany is able to exercise significant influence, but not control, are accounted for by the equity method. For transactions with entities accounted forunder the equity method, any intercompany profits on amounts still remaining are eliminated. Amounts originating from any deferral of intercompanyprofits are recorded within either the Company’s investment account or the account balance to which the transaction specifically relates (e.g., inventory).Only upon settlement of the intercompany transaction with a third party is the deferral of the intercompany profit recognized by the Company. Use of EstimatesThe preparation of financial statements in conformity with U.S. GAAP requires management to make use of estimates and assumptions that affect thereported amounts of assets and liabilities, certain financial statement disclosures at the date of the financial statements, and the reported amounts ofrevenues and expenses during the period. The Company’s consolidated financial statements include amounts that are based on management’s bestestimates and judgments. Actual results may vary from these estimates. These estimates are reviewed periodically to determine if a change is required. Cash and Cash EquivalentsCash equivalents are defined as highly liquid, short-term investments having an original maturity of three months or less. Book overdrafts, for which thebank has not advanced cash, if any, are reclassified to accounts payable. F-9 Unifi, Inc.Notes to Consolidated Financial Statements – (Continued) ReceivablesReceivables are stated at their net realizable value. Allowances are provided for known and potential losses arising from yarn quality claims and foramounts owed by customers. Reserves for yarn quality claims are based on historical experience and known pending claims and are recorded as areduction of net sales. The allowance for uncollectible accounts is shown as a reduction of operating income and reflects the Company’s best estimate ofprobable losses inherent in its accounts receivable portfolio determined on the basis of historical experience, aging of trade receivables, specificallowances for known troubled accounts and other currently available information. Customer accounts are written off against the allowance foruncollectible accounts when they are no longer deemed to be collectible. InventoriesThe Company’s inventories are valued at the lower of cost or market with the cost for the majority of its inventory determined using the first-in, first-outmethod. Certain foreign inventories and limited categories of supplies inventories are valued using the average cost method. The Company’s estimatesfor inventory reserves for obsolete, slow-moving or excess inventories are based upon many factors including historical recovery rates, the aging ofinventories on-hand, inventory movement and expected net realizable value of specific products, and current economic conditions. Debt Financing FeesThe Company capitalizes costs associated with the financing of its debt obligations. These costs are amortized as additional interest expense followingeither the effective interest method or the straight-line method. In the event of any prepayment of its debt obligations, the Company accelerates therecognition of a pro-rata amount of issuance costs and records an extinguishment of debt. Property, Plant and EquipmentProperty, plant and equipment (“PP&E”) are stated at historical cost less accumulated depreciation. Plant and equipment under capital leases are stated atthe present value of minimum lease payments less accumulated amortization. Additions and any improvements that substantially extend the useful life ofa particular asset are capitalized. Depreciation is calculated primarily utilizing the straight-line method over the following useful lives: Asset categoriesUseful lives in yearsLand improvementsTwentyBuildings and improvementsFifteen to FortyMachinery and equipmentFive to FifteenComputer, software and office equipmentThree to SevenInternal software development costsThreeTransportation equipmentThree to Five Leasehold improvements are depreciated over the lesser of their estimated useful lives or the remaining term of the lease. Assets under capital leases areamortized on a straight-line basis over the estimated economic life of the properties, the lesser of their estimated useful lives or the lease term. The Company capitalizes its costs of developing internal software when the software is used as an integral part of its manufacturing or business processesand the technological feasibility has been established. Internal software costs are amortized over a period of three years and, in accordance with theproject type, charged to cost of sales or selling, general and administrative (“SG&A”) expenses. Fully depreciated assets are retained in cost and accumulated depreciation accounts until they are removed from service. In the case of disposals, assetcosts and related accumulated depreciation amounts are removed from the accounts, and the net amounts, less proceeds from disposal, are included in thedetermination of net income and presented within other operating expense, net. Repair and maintenance costs related to PP&E which do not significantly increase the useful life of an existing asset or do not significantly alter, modifyor change the capabilities or production capacity of an existing asset are expensed as incurred. Interest is capitalized for capital projects requiring a construction period. PP&E and other long-lived assets are tested for impairment whenever events or changes in circumstances indicate that the respective carrying amountmay not be recoverable. Long-lived assets to be disposed of by sale within one year are classified as held for sale and are reported at the lower of carryingamount or fair value less cost to sell. Depreciation ceases for all assets classified as held for sale. Long-lived assets to be disposed of other than by sale areclassified as held for use until they are disposed of and these assets are reported at the lower of their carrying amount or estimated fair value. Intangible AssetsFinite-lived intangible assets, such as customer lists, non-compete agreements, licenses, trademarks and patents are amortized over their estimated usefullives. The Company periodically evaluates the reasonableness of the useful lives of these assets. Once these assets are fully amortized, they are removedfrom the accounts. These assets are reviewed for impairment or obsolescence when events or changes in circumstances indicate that the carrying amountmay not be recoverable. If impaired, intangible assets are written down to fair value based on discounted cash flows or other valuation techniques. TheCompany has no intangibles with indefinite lives. F-10 Unifi, Inc.Notes to Consolidated Financial Statements – (Continued) Biomass foundation and feedstockBiomass foundation and feedstock are stated at historical cost and subject to depreciation at the time that production in commercial quantities begins.Cost includes expenditures associated with land and planting bed preparation, plants and overhead. Cultural care costs are capitalized during the firsttwelve months of the development period and are subsequently expensed as incurred. Depreciation is calculated utilizing the straight-line method overthe estimated productive life of the plantings, generally fifteen years. Investments in Unconsolidated AffiliatesThe Company evaluates its investments in unconsolidated affiliates for impairment whenever events or changes in circumstances indicate that thecarrying amount may not be recoverable. The Company evaluates whether or not the affiliate is able to generate and sustain sufficient earnings and cashflows to justify its carrying value. Asset Retirement ObligationsThe Company records asset retirement obligations at fair value at the time the liability is incurred and an estimate of the obligation can be made. Theassociated asset retirement obligations are capitalized as part of the carrying amount of the long-lived asset and depreciated over the estimated remaininguseful life of the asset. A gain or loss on settlement is recognized if the obligation is settled for other than the carrying amount of the liability. Derivative InstrumentsAll derivatives are carried on the balance sheet at fair value and are classified according to their asset or liability position and the expected timing ofsettlement. On the date the derivative contract is entered into, the Company may designate the derivative into one of the following categories: ●Fair value hedge – a hedge of the fair value of a recognized asset, liability or a firm commitment. Changes in the fair value of derivativesdesignated and qualifying as fair-value hedges, as well as the offsetting gains and losses on the hedged items, are reported in income in the sameperiod. ●Cash flow hedge – a hedge of a forecasted transaction or of the variability of cash flows to be received or paid related to a recognized asset orliability. The effective portion of gains and losses on cash flow hedges are recorded in accumulated other comprehensive loss, until theunderlying transactions are recognized in income. When the hedged item is realized, gains or losses are reclassified from accumulated othercomprehensive loss to current period earnings on the same line item as the underlying transaction. ●Net investment hedge – if a derivative is used as a foreign currency hedge of a net investment in a foreign operation, its changes in fair value, tothe extent effective as a hedge, are recorded in foreign currency translation adjustments in accumulated other comprehensive loss. Any ineffective portion of a designated hedge is immediately recognized in current period earnings. Derivatives that are not designated for hedgeaccounting are marked to market at the end of each period with the changes in fair value recognized in current period earnings. Settlements of any fairvalue or cash flow derivative contracts are classified as cash flows from operating activities. Fair Value MeasurementsThe accounting guidance for fair value measurements and disclosures establishes a fair value hierarchy that prioritizes the inputs to valuation techniquesused to measure fair value. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transactionbetween market participants in the principal market, or if none exists, the most advantageous market, for the specific asset or liability at the measurementdate (the exit price). Fair value is based on assumptions that market participants would use when pricing the asset or liability. The hierarchy gives thehighest priority to unadjusted quoted prices in active markets and the lowest priority to unobservable inputs. The Company uses the following to measurefair value for its assets and liabilities: ●Level 1 – Observable inputs that reflect quoted prices for identical assets or liabilities in active markets ●Level 2 – Inputs other than quoted prices included in Level 1 that are observable for the asset or liability either indirectly or directly F-11 Unifi, Inc.Notes to Consolidated Financial Statements – (Continued) ●Level 3 – Unobservable inputs reflecting management’s own assumptions about the inputs used in pricing the asset or liability The classification of assets and liabilities within the valuation hierarchy is based upon the lowest level of input that is significant to the fair valuemeasurement in its entirety. Income TaxesIncome taxes are accounted for under the asset and liability method. Deferred tax assets and liabilities are recorded to recognize the expected future taxbenefits or costs of events that have been, or will be, reported in different tax years for financial statement purposes than for tax purposes. Deferred taxassets and liabilities are determined based on the difference between the financial statement and tax bases of assets and liabilities using enacted tax ratesin effect for the year in which these items are expected to reverse. The Company recognizes tax benefits related to uncertain tax positions if it believes itis more-likely-than-not the benefit will be realized. The Company reviews deferred tax assets to determine if it is more-likely-than-not they will berealized. If the Company determines it is not more-likely-than-not that a deferred tax asset will be realized, it records a valuation allowance to reverse thepreviously recognized benefit. Provision is made for taxes on undistributed earnings of foreign subsidiaries and related companies to the extent that suchearnings are not deemed to be permanently invested. The Company accrues for other tax contingencies when it is probable that a liability to a taxingauthority has been incurred and the amount of the contingency can be reasonably estimated. Income tax expense related to penalties and interest, ifincurred, is included in the provision (benefit) for income taxes. Stock-Based CompensationCompensation expense for stock awards is based on the grant date fair value and expensed over the applicable vesting period. The Company has a policyof issuing new shares to satisfy share option exercises. For awards with a service condition and a graded vesting schedule, the Company has elected anaccounting policy of recognizing compensation cost on a straight-line basis over the requisite service period for each separate vesting portion of theaward as if the award was, in-substance, multiple awards. Foreign Currency TranslationAssets and liabilities of foreign subsidiaries whose functional currency is other than the U.S. dollar are translated at exchange rates existing at therespective balance sheet dates. Translation gains and losses are not included in determining net income, but are presented in a separate component ofaccumulated other comprehensive loss. The Company translates the results of operations of its foreign operations at the average exchange rates during therespective periods. Transaction gains and losses are included in determining net income and are presented within other operating expense, net. Revenue RecognitionThe Company recognizes revenue when (a) there is persuasive evidence of an arrangement, (b) the sales price is fixed or determinable, (c) title and therisks of ownership have been transferred to the customer, and (d) collection of the receivable is reasonably assured. Revenue recognition occurs primarilyupon shipment. Revenue includes amounts for duties and import taxes, interest billed to customers, and shipping and handling costs billed to customers.Revenue excludes value-added taxes or other sales taxes and includes any applicable deductions for returns and allowances, yarn claims, and discounts. Cost of SalesThe major components of cost of sales are: (a) materials and supplies, (b) labor, utility and overhead costs associated with manufactured products, (c) costof products purchased for resale, (d) charges or credits associated with inventory reserves, (e) shipping, handling and warehousing costs, (f) research anddevelopment costs, and (g) all other costs related to production activities. Shipping, Handling and Warehousing CostsShipping, handling and warehousing costs include costs to store goods prior to shipment, prepare goods for shipment and physically move goods tocustomers. Research and Development CostsResearch and development costs include employee costs, production costs related to customer samples, operating supplies, consulting fees and othermiscellaneous costs. The cost of research and development is charged to expense as incurred. Research and development costs were as follows: For the Fiscal Years Ended June 29, 2014 June 30, 2013 June 24, 2012 Research and development costs $7,921 $6,938 $6,763 Selling, General and Administrative ExpensesThe major components of SG&A expenses are: (a) cost of the Company’s sales force, marketing and advertising efforts, as well as commissions and creditinsurance, (b) costs of maintaining the Company’s general and administrative support functions including executive management, informationtechnology, human resources, legal, and finance, (c) amortization of intangible assets, and (d) all other costs required to be classified as SG&A expenses. F-12 Unifi, Inc.Notes to Consolidated Financial Statements – (Continued) Advertising CostsAdvertising costs are expensed as incurred and included in SG&A expenses. The Company’s advertising costs include spending for items such asconsumer marketing and branding initiatives, promotional items, trade shows and other programs. Advertising costs were as follows: For the Fiscal Years Ended June 29, 2014 June 30, 2013 June 24, 2012 Advertising costs $2,953 $3,777 $1,811 Restructuring ChargesRestructuring charges for the relocation of equipment, disposal costs, severance and other exit costs are expensed as incurred. Self InsuranceThe Company self-insures certain risks such as employee healthcare claims. Reserves for incurred but not reported healthcare claims are estimated usinghistorical data, the timeliness of claims processing, medical trends, inflation and any changes, if applicable, in the nature or type of the plan. ContingenciesAt any point in time, the Company may be a party to various pending legal proceedings, claims or environmental actions. Accruals for estimated lossesare recorded at the time information becomes available indicating that losses are probable and that the amount of loss can be reasonably estimated. Anyamounts accrued are not discounted. Legal costs such as outside counsel fees and expenses are charged to expense as incurred. 3. Recent Accounting Pronouncements In May 2014, the Financial Accounting Standards Board issued new accounting guidance for the recognition of revenue from contracts with customers,which will replace most existing revenue recognition guidance in U.S. GAAP when it becomes effective. The new standard is effective for the Company’sfiscal year 2018, and early adoption is not permitted. The Company is evaluating the effect the new guidance will have on its consolidated financialstatements and related disclosures. The Company has not yet determined the effect of the standard on its ongoing financial reporting. There have been no other newly issued or newly applicable accounting pronouncements that have, or are expected to have, a significant impact on theCompany's financial statements. 4. Acquisitions Acquisition of Draw Winding Business from Dillon Yarn CorporationOn December 2, 2013, the Company acquired certain draw winding assets and the associated business from American Drawtech Company, Inc. (“ADC”), adivision of Dillon Yarn Corporation (“Dillon”), pursuant to the exercise of an option granted to the Company under the terms of a commissioningagreement with Dillon, for $2,934, which included accounts payable and an accrued contingent liability. The assets acquired include Dillon’s drawwinding inventory and production machinery and equipment. This acquisition increased the Company’s polyester production capacity and has allowedthe Company to expand its presence in targeted industrial, belting, hose and thread markets by increasing its product offerings to include mid-tenacityflat yarns. Mr. Mitchel Weinberger, a member of the Company’s Board of Directors (the “Board”), is also Dillon’s president and chief operating officerand an executive vice president and a director of ADC. Since the acquisition date, the business has generated $3,663 in net sales for the Company’sPolyester Segment. The acquisition has been accounted for as a business combination, which requires assets acquired and liabilities assumed to be recognized at their fairvalues as of the acquisition date. The Company concluded that the acquisition did not represent a material business combination. The fair value of theassets acquired, liabilities assumed and consideration transferred are as follows: Assets: Inventory $434 Machinery and equipment 835 Customer list 1,615 Non-compete agreement 50 Total assets $2,934 F-13 Unifi, Inc.Notes to Consolidated Financial Statements – (Continued) Liabilities: Accounts payable $434 Contingent consideration 2,500 Total liabilities $2,934 The contingent consideration liability represents the present value of the expected future payments due to Dillon over the five-year period following theacquisition date. The payments due are equal to one-half of the operating profit of the draw winding business, as calculated using an agreed upondefinition. The assumptions used in estimating the contingent consideration liability were based on inputs not observable in the market and representLevel 3 fair value measurements. These estimates are reviewed each quarter and any adjustment is recorded through operating income. See “Note 9. Intangible Assets, Net” for further discussion of the customer list and non-compete agreement. See “Note 18. Fair Value of Financial Instruments and Non-Financial Assets and Liabilities” for further discussion of the recurring measurement of thecontingent consideration. Acquisition of Controlling Interest in Repreve Renewables, LLCIn April 2010, the Company entered into an agreement with two other unaffiliated entities to form Repreve Renewables, LLC (“Renewables”) andreceived a 40% membership interest for its $4,000 contribution. Renewables is a development stage enterprise formed to cultivate, grow and selldedicated energy crops, including biomass intended for use as a feedstock in the production of energy as well as to provide value-added processes forcultivating, harvesting or using biomass crops. Renewables has the exclusive license to commercialize FREEDOM® Giant Miscanthus (“FGM”). FGM isa miscanthus grass strain, which is a C4 plant that was developed by Mississippi State University to be a dedicated energy crop with high biomass yieldfrom minimal input requirements. Recently, Renewables has been conducting trials and exploring potential applications for poultry bedding.Renewables’ success will depend on its ability to commercialize FGM, license individual growers of FGM, sell feedstock to biomass conversion facilitiesand capitalize on other opportunities, including poultry bedding. The Company’s investment in Renewables is anticipated to provide a unique revenuestream and support its strategy to grow the REPREVE® brand and related sustainability initiatives. On October 6, 2011, the Company and one other existing Renewables member each acquired an additional 20% membership interest from the thirdRenewables member for $500. The additional membership interest purchased by the Company was paid for with available cash. Using the amounts paidper membership unit in the October 6, 2011 transaction as a basis (a Level 1 input), the Company determined that the acquisition date fair value ofRenewables was $2,500. This resulted in the Company’s previously held 40% equity interest being valued at $1,000. As a result of remeasuring itsexisting 40% interest to this estimated fair value, the Company recorded a non-operating loss of $3,656 during the fiscal quarter ended December 25,2011. Reconciliation of the non-operating loss is as follows: Fair value of consideration transferred $500 Fair value of the previously held equity interest 1,000 1,500 Fair value of the non-controlling interest 1,000 Total fair value of Renewables $2,500 Fair value of the previously held equity interest $1,000 Less: Investment in Renewables (4,656)Loss on previously held equity interest in Renewables $(3,656) The total fair value of Renewables at that time was allocated to the tangible assets, liabilities and intangible assets acquired as follows: Cash $144 Inventories 45 Other current assets 197 Biomass foundation and feedstock 1,611 Property, plant and equipment 114 Intangible assets 536 Total assets 2,647 Current liabilities (147)Total net assets acquired $2,500 F-14 Unifi, Inc.Notes to Consolidated Financial Statements – (Continued) The intangible assets acquired and the estimated average remaining useful lives over which each asset will be amortized on a straight-line basis are asfollows: AmortizationPeriod (years) EstimatedValue Non-compete agreement 5 $243 License to grow FGM 8 261 Sub-licenses 4 32 Total $536 The acquisition of the additional 20% membership interest has given the Company a 60% membership interest in Renewables. Prior to the acquisition,the Company’s share of Renewables’ losses were recorded as equity in earnings of unconsolidated affiliates. Beginning with the second quarter of fiscalyear 2012, the Company’s consolidated financial statements include the financial position and results of operations of Renewables. As Renewables is adevelopment stage enterprise with limited operating activities, the results of Renewables’ operations since the acquisition are presented within otheroperating expense, net. Renewables’ operating expenses are funded through contributions from its members. Since October 6, 2011, contributions from the non-controllinginterest have totaled $3,454. 5. Receivables, Net Receivables, net consist of the following: June 29, 2014 June 30, 2013 Customer receivables $95,282 $99,324 Allowance for uncollectible accounts (1,035) (972)Reserves for yarn quality claims (618) (893)Net customer receivables 93,629 97,459 Related party receivables 5 204 Other receivables 291 729 Total receivables, net $93,925 $98,392 Other receivables consist primarily of receivables for duty drawback, interest, value-added tax and refunds from vendors. The changes in the Company’s allowance for uncollectible accounts and reserves for yarn quality claims were as follows: Allowance forUncollectibleAccounts Reserves for YarnQuality Claims Balance at June 26, 2011 $(1,147) $(1,101)Charged to costs and expenses (211) (1,390)Charged to other accounts 117 23 Deductions 123 1,529 Balance at June 24, 2012 $(1,118) $(939)Charged to costs and expenses 154 (1,881)Charged to other accounts 30 8 Deductions (38) 1,919 Balance at June 30, 2013 $(972) $(893)Charged to costs and expenses (287) (1,726)Charged to other accounts (20) 2 Deductions 244 1,999 Balance at June 29, 2014 $(1,035) $(618) Amounts charged to costs and expenses for the allowance for uncollectible accounts are reflected in the provision (benefit) for bad debts and deductionsrepresent amounts written off which were deemed to not be collectible, net of any recoveries. Amounts charged to costs and expenses for the reserves foryarn quality claims are primarily reflected as a reduction of net sales and deductions represent adjustments to either increase or decrease claims based onnegotiated amounts or actual versus estimated claim differences. Amounts charged to other accounts primarily include the impact of translating theactivity of the Company’s foreign affiliates from their respective local currencies to the U.S. dollar. F-15 Unifi, Inc.Notes to Consolidated Financial Statements – (Continued) 6. Inventories Inventories consist of the following: June 29, 2014 June 30, 2013 Raw materials $42,244 $42,001 Supplies 5,345 5,286 Work in process 7,404 6,237 Finished goods 59,716 58,179 Gross inventories 114,709 111,703 Inventory reserves (1,339) (1,036)Total inventories $113,370 $110,667 The cost for the majority of the Company’s inventories is determined using the first-in, first-out method. Certain foreign inventories and limitedcategories of supplies of $32,822 and $31,877 as of June 29, 2014 and June 30, 2013, respectively, were valued under the average cost method. 7. Other Current Assets Other current assets consist of the following: June 29, 2014 June 30, 2013 Vendor deposits $2,369 $2,633 Value added taxes receivable 1,197 1,729 Prepaid expenses 1,876 1,376 Other investments 234 166 Other 376 9 Total other current assets $6,052 $5,913 Vendor deposits primarily relate to down payments made toward the purchase of raw materials by the Company’s U.S., Brazilian and Chinese operations.Value added taxes receivable are recoverable taxes associated with the sales and purchase activities of the Company’s foreign operations. Prepaidexpenses consist of advance payments for insurance, professional fees, membership dues, subscriptions, non-income related tax payments, marketing andinformation technology services. Other investments relate to cash held by the Company’s Colombian subsidiary within an investment fund of a financial institution located in Colombiathat is currently being liquidated. Since December 2012, the fund administrator, in accordance with Colombian regulations, has issued five notificationsof reductions in the portfolio value resulting in the Company recording impairment charges of $386 in other operating expense, net. To date, theCompany has received payments in accordance with the court mandated schedule of $1,141 plus interest. The carrying value of $234 at June 29, 2014 isexpected to be received within the next twelve months. As of June 29, 2014, other consists primarily of premiums on a split dollar life insurance policy that represents the value of the Company’s right of returnon premiums paid for a retiree-owned insurance contract that matures in 2015. 8. Property, Plant and Equipment, Net Property, plant and equipment, net consists of the following: June 29, 2014 June 30, 2013 Land $2,957 $2,949 Land improvements 11,676 11,676 Buildings and improvements 145,458 144,833 Assets under capital leases 4,587 1,234 Machinery and equipment 532,650 526,910 Computers, software and office equipment 17,404 16,647 Transportation equipment 4,901 4,866 Construction in progress 6,896 5,691 Gross property, plant and equipment 726,529 714,806 Less: accumulated depreciation (602,436) (599,592)Less: accumulated amortization – capital leases (291) (50)Total property, plant and equipment, net $123,802 $115,164 F-16 Unifi, Inc.Notes to Consolidated Financial Statements – (Continued) During fiscal year 2014, the Company entered into four capital leases with an aggregate present value of $3,353 for certain machinery and transportationequipment. Internal software development costs within PP&E consist of the following: June 29, 2014 June 30, 2013 Internal software development costs $2,318 $2,166 Accumulated amortization (2,075) (1,932)Net internal software development costs $243 $234 Depreciation expense, including the amortization of assets under capital leases, internal software development costs amortization, repairs andmaintenance expenses, and capitalized interest were as follows: For the Fiscal Years Ended June 29, 2014 June 30, 2013 June 24, 2012 Depreciation expense $15,031 $21,597 $23,650 Internal software development costs amortization 143 128 236 Repair and maintenance expenses 18,319 18,649 16,270 Capitalized interest 172 36 — 9. Intangible Assets, Net Intangible assets, net consist of the following: June 29, 2014 June 30, 2013 Customer lists $23,615 $22,000 Non-compete agreements 4,293 4,243 Licenses 265 265 Trademarks 339 246 Patents 162 — Total intangible assets, gross 28,674 26,754 Accumulated amortization - customer lists (17,838) (15,993)Accumulated amortization - non-compete agreements (3,214) (2,895)Accumulated amortization - licenses (86) (55)Accumulated amortization - trademarks (141) (39)Accumulated amortization - patents (1) — Total accumulated amortization (21,280) (18,982)Total intangible assets, net $7,394 $7,772 In fiscal year 2007, the Company purchased the texturing operations of Dillon, which are included in the Company’s Polyester Segment. The valuation ofthe customer list acquired was determined by estimating the discounted net earnings attributable to the customer relationships that were purchased afterconsidering items such as possible customer attrition. Based on the length and trend of the projected cash flows, an estimated useful life of thirteen yearswas determined. The customer list is amortized in a manner which reflects the expected economic benefit that will be received over its thirteen-year life.The non-compete agreement is amortized using the straight line method over the period currently covered by the agreement. The amortization expense isincluded within the Polyester Segment’s depreciation and amortization expense. On December 2, 2013, the Company acquired certain draw winding assets and the associated business from Dillon, as described in “Note 4. Acquisitions.”A customer list and a non-compete agreement were recorded in connection with the business combination, utilizing similar valuation methods asdescribed above for the fiscal year 2007 transaction. The customer list is amortized over a nine-year estimated useful life based on the expected economicbenefit. The non-compete agreement is amortized using the straight line method over the five-year term of the agreement. The amortization expense isincluded within the Polyester Segment’s depreciation and amortization expense. F-17 Unifi, Inc.Notes to Consolidated Financial Statements – (Continued) During fiscal year 2012, the Company acquired a controlling interest in Renewables, as described in “Note 4. Acquisitions.” The non-compete agreementacquired is amortized using the straight line method over the five-year term of the agreement. The licenses acquired are amortized using the straight linemethod over their estimated useful lives of four to eight years. The Company capitalizes expenses incurred to register trademarks for REPREVE® and other PVA products in various countries. The Company hasdetermined that these trademarks have varying useful lives of up to three years and are being amortized using the straight line method. Amortization expense for intangible assets consists of the following: For the Fiscal Years Ended June 29, 2014 June 30, 2013 June 24, 2012 Customer lists $1,845 $1,837 $2,022 Non-compete agreements 319 313 327 Licenses 31 38 28 Trademarks 102 39 — Patents 1 — — Total amortization expense $2,298 $2,227 $2,377 The following table presents the expected intangible asset amortization for the next five fiscal years: 2015 2016 2017 2018 2019 Expected amortization $2,070 $1,671 $1,356 $1,024 $693 10. Other Non-Current Assets Other non-current assets consist of the following: June 29, 2014 June 30, 2013 Biomass foundation and feedstock $2,683 $1,852 Debt financing fees 2,093 2,117 Long-term deposits 295 5,050 Other investments — 674 Other 15 550 Total other non-current assets $5,086 $10,243 Biomass foundation and feedstock are currently being developed and propagated by Renewables for potential markets in the poultry bedding andbioenergy industries. Long-term deposits consist primarily of vendor deposits subsequent to the refunds of a domestic utility company deposit and avalue-added tax deposit received in fiscal year 2014. See “Note 7. Other Current Assets” for further discussion of other investments and other, relating toamounts classified as current at June 29, 2014. 11. Accrued Expenses Accrued expenses consist of the following: June 29, 2014 June 30, 2013 Payroll and fringe benefits $12,406 $11,676 Utilities 2,876 3,058 Property taxes 821 798 Contingent consideration 537 — Severance 374 1,049 Interest 102 102 Retiree medical liability 62 106 Other 1,411 1,696 Total accrued expenses $18,589 $18,485 F-18 Unifi, Inc.Notes to Consolidated Financial Statements – (Continued) Accrued severance is comprised of the current portion of amounts due under severance agreements between the Company and two of its former executiveofficers and certain other employees. See “Note 21. Other Operating Expense, Net” for further discussion of severance costs. Other consists primarily ofworkers compensation and other employee-related claims, marketing expenses, freight expenses, rent and other non-income related taxes. 12. Long-Term Debt Debt ObligationsThe following table presents a summary of the total balances outstanding for the Company’s debt obligations, their scheduled maturity dates and theweighted average interest rate for borrowings (including the effects of any interest rate swaps) as well as the applicable current portion of long-term debt: Weighted Average Principal Amounts as of ScheduledMaturity Date Interest Rate as ofJune 29, 2014 June 29, 2014 June 30, 2013 ABL Revolver March 2019 3.1% $26,000 $52,500 ABL Term Loan March 2019 2.9% 68,000 42,800 Term loan from unconsolidated affiliate August 2015 3.0% 1,250 1,250 Capital lease obligations (1) (2) 4,238 1,203 Total debt 99,488 97,753 Current portion of long-term debt (7,215) (65)Total long-term debt $92,273 $97,688 (1)Scheduled maturity dates for capital lease obligations range from January 2017 to November 2027. (2)Fixed interest rates for capital lease obligations range from 2.3% to 4.6%. On May 24, 2012, the Company entered into a credit agreement (the “Credit Agreement”) to establish a $150,000 senior secured credit facility (“ABLFacility”) with Wells Fargo Bank, N.A. and Bank of America, N.A. In addition, the Company entered into a $30,000 term loan (“Term B Loan”). Thepurpose of entering into the ABL Facility and the Term B Loan was to, among other things, refinance the Company’s then-existing indebtedness. Sincethat establishment, the Term B Loan has been repaid (on January 8, 2013), and the ABL Facility has been amended several times (most recently onAugust 25, 2014), such that, as of June 29, 2014, it had a maturity date of March 28, 2019, and consisted of a $100,000 revolving credit facility (“ABLRevolver”) and a $68,000 term loan (“ABL Term Loan”). As a result of the last amendment entered into after the end of fiscal year 2014 (which isdescribed more specifically below under “—Subsequent Event – Fifth Amendment”), the ABL Term Loan increased to $90,000. ABL FacilityThe ABL Facility is secured by a first-priority security interest in substantially all owned property and assets (together with proceeds and products) ofUnifi, Inc., Unifi Manufacturing, Inc. and certain subsidiary guarantors (the “Loan Parties”). It is also secured by a first-priority security interest in all (or65% in the case of first tier controlled foreign corporations) of the stock of (or other ownership interests in) each of the Loan Parties (other than theCompany) and certain subsidiaries of the Loan Parties, together with all proceeds and products thereof. The ABL Facility is further secured by a first-priority lien on the Company’s limited liability company membership interest in Parkdale America, LLC (“PAL”). The Credit Agreement, as amended, includes representations and warranties made by the Loan Parties, affirmative and negative covenants and events ofdefault that are usual and customary for financings of this type. Should excess availability under the ABL Revolver fall below the defined Trigger Level,a financial covenant requiring the Loan Parties to maintain a fixed charge coverage ratio on a monthly basis of at least 1.05 to 1.0 becomes effective. TheTrigger Level as of June 29, 2014 was $21,000. In addition, the ABL Facility contains restrictions on certain payments and investments, includingrestrictions on the payment of dividends and share repurchases, unless excess availability is greater than the Trigger Level for the thirty-day period priorto the making of such a distribution (as calculated on a pro forma basis as if the payment and any revolving loans made in connection therewith weremade on the first day of such period). The Company’s ability to borrow under the ABL Revolver is limited to a borrowing base equal to specified percentages of eligible accounts receivableand inventory and is subject to certain conditions and limitations. ABL Revolver borrowings bear interest at the London Interbank Offer Rate (“LIBOR”)plus an applicable margin of 1.75% to 2.25%, or the Base Rate plus an applicable margin of 0.75% to 1.25%, with interest payable on a monthly basis.The applicable margin is based on the average quarterly excess availability under the ABL Revolver. The Base Rate means the greater of (i) the primelending rate as publicly announced from time to time by Wells Fargo, (ii) the Federal Funds Rate plus 0.5%, and (iii) LIBOR plus 1.0%. There is also amonthly unused line fee under the ABL Revolver of 0.25% to 0.375% of the unused line amount. F-19 Unifi, Inc.Notes to Consolidated Financial Statements – (Continued) As of June 29, 2014, the ABL Term Loan bore interest at LIBOR plus an applicable margin of 2.25%, or the Base Rate plus an applicable margin of1.25%, with interest payable on a monthly basis. Subject to certain provisions, the ABL Term Loan may be prepaid at par, in whole or in part, at any timebefore the maturity date, at the Company’s discretion. As of June 29, 2014, under the terms of the ABL Facility, the Company was required to hedge at least $50,000 of variable interest rate exposure, so longas the outstanding principal of all indebtedness having variable rates of interest exceeds $75,000. First AmendmentOn December 27, 2012, the Company entered into a First Amendment to Credit Agreement (“First Amendment”) to amend certain terms of the ABLFacility in connection with the Company’s then-anticipated January 8, 2013 repayment of all amounts outstanding under the Term B Loan. The FirstAmendment revised the definition of fixed charges within the Credit Agreement for the ABL Facility and within the Company’s fixed charge coverageratio calculation to exclude any mandatory or optional prepayments of the Term B Loan made after December 25, 2012 and prior to February 4, 2013, inan amount not to exceed $13,800, subject to the satisfaction of certain specified conditions (which were met by the Company). An amendment fee of $50was paid to the participating lenders during the quarter ended March 24, 2013. Second AmendmentOn June 25, 2013, the Company entered into a Second Amendment to Credit Agreement (“Second Amendment”). The Second Amendment, among otherthings: (i) extended the maturity date of the ABL Facility from May 24, 2017 to May 24, 2018; (ii) authorized the ABL Term Loan amount to beincreased from its then existing balance of $42,800 to $50,000; (iii) replaced the $1,800 quarterly ABL Term Loan principal payments with payments (ifany) based on the amount that the outstanding balance of the ABL Term Loan exceeds a calculation of eligible collateral; (iv) reduced the ABL TermLoan interest rate from LIBOR plus an applicable margin of 2.25% to 2.75%, or the Base Rate plus an applicable margin of 1.25% to 1.75%, to LIBORplus an applicable margin of 2.25%, or the Base Rate plus an applicable margin of 1.25%; (v) revised the definition of fixed charges for purposes of theCompany’s fixed charge coverage ratio calculation to exclude ABL Term Loan voluntary principal prepayments and all principal prepayments of theTerm B Loan; (vi) revised the definition of fixed charge coverage ratio to exclude share repurchases permitted under the Credit Agreement; (vii) increasedthe trigger level for the financial covenant which requires the Company to maintain a fixed charge coverage ratio on a monthly basis of at least 1.05 to1.0 when excess availability under the ABL Revolver falls below the greater of $10,000 or 20% of the maximum revolver amount (from the previoustrigger level of the greater of $10,000 or 15% of the maximum revolver amount); (viii) required excess availability to not be less than $20,000 at any timeduring the thirty day period prior to the making of restricted payments consisting of dividends and share repurchases; (ix) after July 19, 2015, allowed theCompany to reset the calculation of eligible machinery and equipment and eligible real property collateral specific to the ABL Term Loan (the“Collateral Reset”), such that the ABL Term Loan amount could be increased to $50,000 (the “ABL Term Loan Reload”), upon satisfaction of certainadditional conditions at the time of the reload; and (x) reduced the letter of credit sublimit to $10,000. Some of the foregoing items were subject tosatisfaction of certain conditions, including updated real estate appraisals, which conditions were subsequently satisfied on July 19, 2013. An amendmentfee of $125 was paid to the participating lenders during the quarter ended June 30, 2013. Third AmendmentOn January 16, 2014, the Company entered into a Third Amendment to Credit Agreement (“Third Amendment”). The Third Amendment, among otherthings: (i) revised the definition of permitted indebtedness to allow the Company to enter into permitted sales and leaseback transactions of equipment inan aggregate amount not to exceed $4,000 per fiscal year; (ii) revised the definition of permitted dispositions to increase the amount of certain asset salesor dispositions from $500 to $4,000 per fiscal year; and (iii) revised the mandatory prepayment provision to increase the amount of net proceeds receivedfrom certain permitted dispositions that would be required to prepay the outstanding ABL Facility debt from $500 to $4,000 per fiscal year. Noamendment fee was required. Fourth AmendmentOn March 28, 2014, the Company entered into a Fourth Amendment to Credit Agreement (“Fourth Amendment”). The Fourth Amendment, among otherthings: (i) increased the ABL Term Loan by $18,000 to $68,000; (ii) beginning October 1, 2014, requires $2,125 of fixed quarterly payments on the ABLTerm Loan; (iii) extended the maturity date of the ABL Facility from May 24, 2018 to March 28, 2019; (iv) modified the calculation of the fixed chargecoverage ratio to exclude certain capital expenditures, at the election of the Company, through June 30, 2015, subject to a maximum exclusion of$18,000 for any consecutive twelve month period and other limitations; (v) modified the definition of the trigger level, such that it is reached whenexcess availability under the ABL Revolver falls below the greater of $10,000, 20% of the maximum revolver amount or 12.5% of the sum of themaximum revolver amount plus the outstanding principal amount of the ABL Term Loan; and (vi) increased the ABL Term Loan Reload amount from$50,000 to $68,000. An amendment fee of $150 was paid to the participating lenders during the quarter ended June 29, 2014. F-20 Unifi, Inc.Notes to Consolidated Financial Statements – (Continued) Subsequent Event - Fifth AmendmentOn August 25, 2014, the Company entered into a Fifth Amendment to Credit Agreement (“Fifth Amendment”). The Fifth Amendment, among otherthings: (i) increased the ABL Term Loan by $22,000 to $90,000; (ii) increased the fixed quarterly payments on the ABL Term Loan from $2,125 to$2,812; (iii) modified the calculation of the fixed charge coverage ratio to exclude certain capital expenditures and permitted acquisitions, at the electionof the Company, through June 30, 2015, subject to a maximum exclusion of $40,000 for any consecutive twelve-month period and other limitations; (iv)increased the ABL Term Loan interest rate from LIBOR plus an applicable margin of 2.25%, or the Base Rate plus an applicable margin of 1.25%, toLIBOR plus an applicable margin of 2.50%, or the Base Rate plus an applicable margin of 1.50%; (v) modified the date on which the eligibility of certaincollateral is calculated as a date between July 19, 2015 and December 31, 2015, subject to satisfaction of certain additional conditions, such that the ABLTerm Loan amount can be increased up to $90,000; (vi) related to the making of restricted payments (consisting of dividends and share repurchases), inaddition to existing requirements, added a requirement to have a fixed charge coverage ratio of at least 1.0 to 1.0 during the same period, calculated on apro forma basis as if all such restricted payments made pursuant to the most recent compliance certificate date were made on the last day of the applicabletwelve-fiscal-month period; and (vii) removed the requirement to hedge interest rate exposure on funded indebtedness. An amendment fee of $95 waspaid to the participating lenders during the quarter ending September 28, 2014. As of June 29, 2014, the Company was in compliance with all financial covenants; the excess availability under the ABL Revolver was $61,103; thefixed charge coverage ratio was 10.3 to 1.0; and the Company had $2,325 of standby letters of credit, none of which have been drawn upon. Term Loan from Unconsolidated AffiliateOn August 30, 2012, a foreign subsidiary of the Company entered into an unsecured loan agreement under which it borrowed $1,250 from the Company’sunconsolidated affiliate, U.N.F. Industries Ltd. The loan bears interest at 3% with interest payable semi-annually and does not amortize. During fiscal year2014, the maturity date was extended from August 30, 2014 to August 30, 2015, at which time the entire principal balance is due. Capital Lease ObligationsOn November 19, 2012, the Company entered into a capital lease with Salem Leasing Corporation for certain transportation equipment. The present valueof the fifteen-year lease was $1,234 and payments are made monthly. The implicit annual interest rate under the lease is approximately 4.6%. During fiscal year 2014, the Company entered into four capital leases with an unrelated third party for certain machinery and equipment, with anaggregate present value of $3,353. Scheduled Debt MaturitiesThe following table presents the scheduled maturities of the Company’s outstanding debt obligations for the following five fiscal years and thereafter: Scheduled Maturities on a Fiscal Year Basis 2015 2016 2017 2018 2019 Thereafter ABL Revolver $— $— $— $— $26,000 $— ABL Term Loan 6,375 8,500 8,500 8,500 36,125 — Capital lease obligations 840 866 808 558 366 800 Term loan from unconsolidated affiliate — 1,250 — — — — Total $7,215 $10,616 $9,308 $9,058 $62,491 $800 Debt Financing FeesDebt financing fees are classified within other non-current assets and consist of the following: June 29, 2014 June 30, 2013 Balance at beginning of year $2,117 $2,870 Amounts paid related to debt refinancing — 113 Amounts paid related to debt modification 400 197 Amortization charged to interest expense (424) (632)Amounts charged to extinguishment of debt due to prepayments — (431)Balance at end of year $2,093 $2,117 F-21 Unifi, Inc.Notes to Consolidated Financial Statements – (Continued) Interest ExpenseInterest expense consists of the following: For the Fiscal Years Ended June 29, 2014 June 30, 2013 June 24, 2012 Interest on ABL Facility $3,292 $3,673 $1,920 Interest on Term B Loan — 722 198 Interest on 11.5% Senior Secured Notes — — 13,045 Other 192 107 40 Subtotal 3,484 4,502 15,203 Reclassification adjustment for interest rate swap 554 322 — Amortization of debt financing fees 424 632 870 Mark-to-market adjustment for interest rate swap 39 (931) — Interest capitalized to property, plant and equipment, net (172) (36) — Subtotal 845 (13) 870 Total interest expense $4,329 $4,489 $16,073 Loss on Extinguishment of DebtThe components of loss on extinguishment of debt consist of the following: For the Fiscal Years Ended June 29, 2014 June 30, 2013 June 24, 2012 Prepayment call premium for 11.5% Senior Secured Notes $— $— $288 Prepayment call premium and other costs for Term B Loan — 671 284 Non-cash charges due to write-off of debt financing fees — 431 2,631 Loss on extinguishment of debt $— $1,102 $3,203 13. Other Long-Term Liabilities Other long-term liabilities consist of the following: June 29, 2014 June 30, 2013 Supplemental post-employment plan $3,173 $2,665 Contingent consideration 2,026 — Uncertain tax positions 1,101 1,275 Interest rate swap 363 324 Other 886 789 Total other long-term liabilities $7,549 $5,053 The Company maintains an unfunded supplemental post-employment plan for certain management employees. Each employee’s account is creditedannually based upon a percentage of the participant’s base salary, with each participant’s balance adjusted quarterly to reflect returns based upon a stockmarket index. Amounts are paid to participants only after termination of employment. Amounts charged to SG&A expenses for the fiscal years ended June29, 2014, June 30, 2013 and June 24, 2012 were $780, $775 and $394, respectively. Contingent consideration represents the present value of the long-term portion of contingent payments associated with the Company’s December 2013acquisition of Dillon’s draw winding business. See “Note 18. Fair Value of Financial Instruments and Non-Financial Assets and Liabilities” for furtherdiscussion. Other primarily includes certain retiree and post-employment medical and disability liabilities and deferred energy incentive credits. 14. Income Taxes Components of income before income taxesThe components of income before income taxes consist of the following: For the Fiscal Years Ended June 29, 2014 June 30, 2013 June 24, 2012 United States $38,816 $16,900 $3,010 Foreign 9,065 12,114 5,839 Income before income taxes $47,881 $29,014 $8,849 F-22 Unifi, Inc.Notes to Consolidated Financial Statements – (Continued) Components of provision (benefit) for income taxesThe components of provision (benefit) for income taxes consist of the following: For the Fiscal Years Ended June 29, 2014 June 30, 2013 June 24, 2012 Current: Federal $14,463 $2,399 $457 State 1,035 119 69 Foreign 4,092 5,210 4,549 19,590 7,728 5,075 Deferred: Federal 183 7,086 (2,733)State 900 542 (3,285)Foreign (512) (2,012) (1,036) 571 5,616 (7,054)Provision (benefit) for income taxes $20,161 $13,344 $(1,979) Federal deferred tax expense includes the utilization of net operating loss carryforwards of $7,904 and $8,930 for fiscal years June 30, 2013 and June 24,2012, respectively. State deferred tax expense includes the utilization of net operating loss carryforwards of $499, $825 and $307 for fiscal years June 29,2014, June 30, 2013 and June 24, 2012, respectively. Foreign deferred tax expense includes the utilization of net operating loss carryforwards of $216,$258 and $601 for fiscal years June 29, 2014, June 30, 2013 and June 24, 2012, respectively. Effective income tax rateThe provision (benefit) for income taxes computed by applying the federal statutory tax rate as reconciled to the effective tax rate is as follows: For the Fiscal Years Ended June 29, 2014 June 30, 2013 June 24, 2012 Federal statutory tax rate 35.0% 35.0% 35.0%State income taxes, net of federal tax benefit 2.8 2.1 0.5 Foreign income taxed at different rates (0.7) (0.1) (7.3)Repatriation of foreign earnings 0.4 1.1 71.6 Unremitted foreign earnings, net of foreign tax credit 0.5 1.0 54.2 Change in valuation allowance 4.5 10.3 (180.2)Domestic production activities deduction (2.3) (1.2) — Research and other credits (0.3) (3.5) — Nondeductible expenses and other 2.2 1.3 3.8 Effective tax rate 42.1% 46.0% (22.4%) The Company’s effective tax rate for the year ended June 29, 2014 was significantly impacted by the increase in the valuation allowance primarily relatedto equity investments, partially offset by the domestic production activities deduction, research and development credits and other credits. Deferred income taxesThe significant components of the Company’s deferred tax assets and liabilities consist of the following: June 29, 2014 June 30, 2013 Deferred tax assets: Investments, including unconsolidated affiliates $13,682 $12,318 State tax credits 85 314 Accrued liabilities and valuation reserves 4,187 4,189 Net operating loss carryforwards 1,635 1,980 Intangible assets 5,259 6,220 Foreign tax credits 2,588 2,588 Incentive compensation plans 2,896 3,070 Other items 5,167 3,577 Total gross deferred tax assets 35,499 34,256 Valuation allowance (18,615) (16,690)Net deferred tax assets 16,884 17,566 Deferred tax liabilities: Property, plant and equipment (6,709) (6,770)Unremitted foreign earnings (7,639) (7,390)Other (618) (795)Total deferred tax liabilities (14,966) (14,955)Net deferred tax asset $1,918 $2,611  F-23 Unifi, Inc.Notes to Consolidated Financial Statements – (Continued) Deferred income taxes - valuation allowanceIn assessing the realizability of deferred tax assets, the Company considers whether it is more-likely-than-not that some portion or all of the deferred taxassets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods inwhich those temporary differences become deductible. The Company considers the scheduled reversal of taxable temporary differences, taxable incomein carryback years, projected future taxable income and tax planning strategies in making this assessment. Since the Company operates in multiplejurisdictions, the assessment is made on a jurisdiction-by-jurisdiction basis, taking into account the effects of local tax law. The balances and activity for the Company’s deferred tax valuation allowance are as follows: For the Fiscal Years Ended June 29, 2014 June 30, 2013 June 24, 2012 Balance at beginning of the year $(16,690) $(13,911) $(30,164)Charged to costs and expenses (1,925) (3,243) 15,847 Charged to other accounts — 464 239 Deductions — — 167 Balance at end of year $(18,615) $(16,690) $(13,911) Based on the assessment at June 29, 2014, the Company has recorded a valuation allowance of $18,615, of which $15,459 related to reserves againstcertain domestic deferred tax assets primarily related to equity investments and foreign tax credits as well as $3,156 related to reserves against certaindeferred tax assets of the Company’s foreign subsidiaries primarily related to net operating loss carryforwards and equity investments. During fiscal year 2014, the Company’s valuation allowance increased by $1,925. This increase consists of $1,368 related to certain domestic equityinvestments and $557 related to equity investments and net operating loss carryforwards of the Company’s foreign subsidiaries. At June 30, 2013, the Company had recorded a valuation allowance of $16,690, of which $14,091 related to reserves against certain domestic deferred taxassets primarily related to equity investments and foreign tax credits as well as $2,599 related to reserves against certain deferred tax assets of theCompany’s foreign subsidiaries primarily related to net operating loss carryforwards and equity investments. During fiscal year 2013, the Company’s valuation allowance increased by $2,779. This increase consisted of $3,428 related to certain foreign anddomestic equity investments partially offset by a decrease of $649 related to certain foreign net operating loss carryforwards and temporary items.Deferred tax expense was reduced by $424. At June 24, 2012, the Company had recorded a valuation allowance of $13,911, of which $11,194 related to reserves against certain domestic deferred taxassets primarily related to equity investments and foreign tax credits as well as $2,717 related to equity investments and net operating loss carryforwardsof the Company’s foreign subsidiaries. During fiscal year 2012, the Company’s valuation allowance decreased $16,253. This decrease consisted of $17,498 primarily due to the utilization ofdomestic federal and state net operating loss carryforwards during the year and the reversal of the valuation allowance for various deferred tax assetsbased on projected future taxable income, partially offset by $1,245 related to certain foreign equity investments. Deferred tax expense was reduced by$6,017 and $239 was recorded to accumulated other comprehensive loss. F-24 Unifi, Inc.Notes to Consolidated Financial Statements – (Continued) Unrecognized tax benefitsA reconciliation of beginning and ending gross amounts of unrecognized tax benefits is as follows: For the Fiscal Years Ended June 29, 2014 June 30, 2013 June 24, 2012 Balance at beginning of the year $964 $ 1,154 $775 Gross increases related to current period tax positions 78 250 6 Gross increases related to tax positions in prior periods 68 — 400 Gross decreases related to settlements with tax authorities (2) — — Gross decreases related to lapse of applicable statute of limitations (125) (440) (27)Balance at end of year $983 $ 964 $1,154 Unrecognized tax benefits would generate a favorable impact of $935 on the Company’s effective tax rate when recognized. The Company expectsuncertain tax positions to decrease by $107 within the next twelve months due to statute expirations on certain positions. Interest and penaltiesrecognized by the Company within provision (benefit) for income taxes were $(193), $(250) and $9 for the fiscal years ended June 29, 2014, June 30,2013 and June 24, 2012, respectively. The Company has $118, $311 and $561 accrued for interest and/or penalties related to uncertain tax positions as ofJune 29, 2014, June 30, 2013 and June 24, 2012, respectively. Expiration of net operating loss carryforwards and foreign tax creditsAs of June 29, 2014, the Company has $8,876 of state net operating loss carryforwards, for which no valuation allowance is established, that may be usedto offset future taxable income. In addition, the Company has $2,588 of foreign tax credit carryforwards of which $1,680 are offset by valuationallowances. These carryforwards, if unused, will expire as follows: State net operating loss carryforwards2015 through 2033Foreign tax credit carryforwards2021 Tax years subject to examinationThe Company and its domestic subsidiaries file a consolidated federal income tax return, as well as income tax returns in multiple state and foreignjurisdictions. The tax years subject to examination vary by jurisdiction. The Company regularly assesses the outcomes of both completed and ongoingexaminations to ensure that the Company’s provision for income taxes is sufficient. During the third quarter of fiscal year 2013, the Internal RevenueService completed an audit of the Company’s 2010 tax year, with no changes being made to the tax return reported. The Company remains subject toincome tax examinations for U.S. federal income taxes for tax years 2011 through 2013, for foreign income taxes for tax years 2008 through 2013, and forstate and local income taxes for tax years 2009 through 2013. The U.S. federal returns and certain state tax returns filed for the 2011 through 2013 taxyears have utilized carryforward tax attributes generated in prior tax years, including net operating losses that could potentially be revised uponexamination. Indefinite reinvestment assertionDuring fiscal year 2014, the Company increased the amount of foreign earnings expected to be repatriated by $713. The Company has plans to repatriate$21,827 of future cash flows generated from its operations in Brazil and has a deferred tax liability of $7,639 to reflect the additional income tax thatwould be due as a result of these plans. As of June 29, 2014, $30,643 of undistributed earnings of the Company’s foreign subsidiaries was deemed to bepermanently reinvested, and any applicable U.S. federal income taxes and foreign withholding taxes have not been provided on these earnings.Computation of the potential tax liabilities associated with unremitted earnings permanently reinvested is not practicable. 15. Shareholders’ Equity During fiscal year 2014, the Company completed its repurchase of shares under its $50,000 stock repurchase program that had been approved by theBoard on January 22, 2013 (the “2013 SRP”). On April 23, 2014, the Board approved a new stock repurchase program (“2014 SRP”) to acquire up to anadditional $50,000 of the Company’s common stock. Under the 2014 SRP (as was the case under the 2013 SRP), the Company has been authorized torepurchase shares at prevailing market prices, through open market purchases or privately negotiated transactions at such times and prices and in suchmanner as determined by management, subject to market conditions, applicable legal requirements, contractual obligations and other factors.Repurchases are expected to be financed through cash generated from operations and borrowings under the Company’s ABL Revolver, and are subject toapplicable limitations and restrictions as set forth in the ABL Facility. The 2014 SRP has no stated expiration or termination date, and there is no timelimit or specific time frame otherwise for repurchases. The Company may discontinue repurchases at any time that management determines additionalpurchases are not beneficial or advisable. F-25 Unifi, Inc.Notes to Consolidated Financial Statements – (Continued) The following table summarizes the Company’s repurchases and retirements of its common stock under the 2013 SRP and the 2014 SRP. Total Number of SharesRepurchased as Part ofPublicly Announced Plansor Programs Average Price Paidper Share Maximum ApproximateDollar Value that MayYet Be RepurchasedUnder the 2014 SRP Fiscal year 2013 1,068 $18.08 Fiscal year 2014 1,524 $23.96 Total 2,592 $21.54 $44,169 All repurchased shares have been retired and have the status of authorized and unissued shares. The cost of the repurchased shares is recorded as areduction to common stock to the extent of the par value of the shares acquired and the remainder is allocated between capital in excess of par value andretained earnings. The portion of the remainder that is allocated to capital in excess of par value is limited to a pro rata portion of capital in excess of parvalue. No dividends were paid in the last three fiscal years. 16. Stock Based Compensation On October 23, 2013, the Company’s shareholders approved the Unifi, Inc. 2013 Incentive Compensation Plan (the “2013 Plan”). The 2013 Plan replacedthe 2008 Unifi, Inc. Long-Term Incentive Plan (“2008 LTIP”). No additional awards will be granted under the 2008 LTIP; however, prior awardsoutstanding under the 2008 LTIP remain subject to that plan’s provisions. The 2013 Plan authorized the issuance of 1,000 shares of common stock,subject to certain increases in the event outstanding awards under the 2008 LTIP expire, are forfeited or otherwise terminate unexercised. Stock optionsDuring fiscal years 2014, 2013 and 2012, the Company granted stock options to purchase 97, 138 and 127 shares of stock, respectively, to certain keyemployees. The stock options vest ratably over the required three-year service period and have ten-year contractual terms. For the fiscal years ended June29, 2014, June 30, 2013 and June 24, 2012, the weighted average exercise price of the options granted was $22.31, $11.15 and $12.47 per share,respectively. The Company used the Black-Scholes model to estimate the weighted average grant date fair value of $14.66, $7.28 and $7.88 per share,respectively. For options granted, the valuation models used the following assumptions: For the Fiscal Years Ended June 29, 2014 June 30, 2013 June 24, 2012 Expected term (years) 7.4 7.5 6.3 Risk-free interest rate 2.1% 1.0% 2.0% Volatility 65.9% 66.9% 68.2% Dividend yield — — — The Company uses historical data to estimate the expected term and volatility. The risk-free interest rate is based on the U.S. Treasury yield curve in effectat the time of the grant for periods corresponding with the expected term of the options. A summary of stock option activity for the fiscal year ended June 29, 2014 is as follows: Stock Options WeightedAverageExercise Price WeightedAverageRemainingContractualLife(Years) AggregateIntrinsicValue Outstanding at June 30, 2013 1,541 $8.41 Granted 97 $22.31 Exercised (798) $8.41 Forfeited (33) $13.69 Expired (7) $20.55 Outstanding at June 29, 2014 800 $9.77 5.9 $14,123 Vested and expected to vest as of June 29, 2014 795 $9.73 5.9 $14,080 Exercisable at June 29, 2014 588 $7.55 5.1 $11,688 At June 29, 2014, 13 non-vested options are subject to a market condition that vests the options on the date that the closing price of the Company’scommon stock on the New York Stock Exchange has been at least $30 per share for thirty consecutive trading days. During fiscal year 2014, 14 optionssubject to a similar market condition at a threshold of $24 per share vested and were outstanding as of June 29, 2014. The weighted average exercise priceof such 27 options subject to a market condition is $8.16.  F-26 Unifi, Inc.Notes to Consolidated Financial Statements – (Continued) At June 29, 2014, the remaining unrecognized compensation cost related to the unvested stock options was $706, which is expected to be recognizedover a weighted average period of 1.9 years. For the fiscal years ended June 29, 2014, June 30, 2013 and June 24, 2012, the total intrinsic value of options exercised was $12,963, $1,937 and $40,respectively. The amount of cash received from the exercise of options was $3,136, $1,298 and $71 for the fiscal years ended June 29, 2014, June 30,2013 and June 24, 2012, respectively. The tax benefit realized from stock options exercised was $4,934, $680 and $1 for the fiscal years ended June 29,2014, June 30, 2013 and June 24, 2012, respectively. Restricted stock unitsDuring fiscal years 2014, 2013 and 2012, the Company granted 22, 32 and 64 restricted stock units (“RSUs”), respectively, to certain key employees. TheRSUs are subject to a vesting restriction and convey no rights of ownership in shares of Company stock until such RSUs have vested and been distributedto the grantee in the form of Company stock. The RSUs vest over a three-year period, and will be converted into an equivalent number of shares of stock(for distribution to the grantee) on each vesting date, unless the grantee has elected to defer the receipt of the shares of stock until separation from service.If, after the first anniversary of the grant date and prior to the final vesting date, the grantee has a separation from service without cause for any reasonother than the employee’s resignation, the remaining unvested RSUs will become fully vested and will be converted to an equivalent number of shares ofstock and issued to the grantee. The Company estimated the fair value of the RSUs granted during fiscal years 2014, 2013 and 2012 to be $22.08, $11.23,and $12.47 per RSU, respectively. During fiscal years 2014, 2013 and 2012, the Company granted 25, 30 and 49 RSUs, respectively, to the Company’s non-employee directors. The RSUsbecame fully vested on the grant date. The RSUs convey no rights of ownership in shares of Company stock until such RSUs have been distributed to thegrantee in the form of Company stock. The vested RSUs will be converted into an equivalent number of shares of Company common stock anddistributed to the grantee following the grantee’s termination of service as a member of the Board. The grantee may elect to defer receipt of the shares ofstock in accordance with the deferral options provided under the Unifi, Inc. Director Deferred Compensation Plan. The Company estimated the fair valueof the RSUs granted during fiscal years 2014, 2013 and 2012 to be $23.23, $13.57 and $9.10 per RSU, respectively. The Company estimates the fair value of RSUs based on the market price of the Company’s common stock at the award grant date. A summary of the RSU activity for the fiscal year ended June 29, 2014 is as follows: Non-vested WeightedAverageGrant DateFair Value Vested Total WeightedAverageGrant DateFair Value Outstanding at June 30, 2013 75 $11.94 112 187 $11.78 Granted 47 $22.68 — 47 $22.68 Vested (71) $15.96 71 — $15.96 Converted — $— (31) (31) $12.06 Forfeited (2) $22.08 — (2) $22.08 Outstanding at June 29, 2014 49 $16.11 152 201 $14.19 At June 29, 2014, the number of RSUs vested and expected to vest was 201, with an aggregate intrinsic value of $5,522. The aggregate intrinsic value ofthe 152 vested RSUs at June 29, 2014 was $4,172. The remaining unrecognized compensation cost related to the unvested RSUs at June 29, 2014 is $237, which is expected to be recognized over aweighted average period of 1.9 years. For the fiscal years ended June 29, 2014 and June 30, 2013, the total intrinsic value of RSUs converted was $696 and $114, respectively. The tax benefitrealized from the conversion of RSUs was $275 and $45 for the fiscal years ended June 29, 2014 and June 30, 2013. SummaryThe total cost charged against income related to all stock based compensation arrangements was as follows: For the Fiscal Years Ended June 29, 2014 June 30, 2013 June 24, 2012 Stock options $1,001 $847 $774 RSUs 938 686 1,280 Total compensation cost $1,939 $1,533 $2,054 F-27 Unifi, Inc.Notes to Consolidated Financial Statements – (Continued) The total income tax benefit recognized for stock based compensation was $513, $381 and $642 for fiscal years 2014, 2013 and 2012, respectively. As of June 29, 2014, total unrecognized compensation costs related to all unvested stock based compensation arrangements was $943. The weightedaverage period over which these costs are expected to be recognized is 1.9 years. As of June 29, 2014, a summary of the number of securities remaining available for future issuance under equity compensation plans is as follows: Authorized under the 2013 Plan 1,000 Plus: Awards expired, forfeited or otherwise terminated unexercised from the 2008 LTIP — Less: Service condition options granted (5)Less: RSUs granted to non-employee directors (25)Available for issuance under the 2013 Plan 970 17. Defined Contribution Plan The Company matches employee contributions made to the Unifi, Inc. Retirement Savings Plan (the “DC Plan”), a 401(k) defined contribution plan,which covers eligible domestic salary and hourly employees. Under the terms of the DC Plan, the Company matches 100% of the first three percent ofeligible employee contributions and 50% of the next two percent of eligible contributions. The following table presents the employer contribution expense related to the DC Plan incurred each year: For the Fiscal Years Ended June 29, 2014 June 30, 2013 June 24, 2012 Matching contribution expense $2,006 $2,015 $2,012 18. Fair Value of Financial Instruments and Non-Financial Assets and Liabilities Financial InstrumentsThe Company may use derivative financial instruments such as foreign currency forward contracts or interest rate swaps to reduce its ongoing businessexposures to fluctuations in foreign currency exchange rates or interest rates. The Company does not enter into derivative contracts for speculativepurposes. Foreign currency forward contractsThe Company may enter into foreign currency forward contracts as economic hedges for exposures related to certain sales, inventory purchases andequipment purchases which are denominated in currencies that are not its functional currency. As of June 29, 2014, the latest maturity date for alloutstanding foreign currency forward contracts was during July 2014. These items are not designated as hedges by the Company and are marked tomarket each period and offset by the foreign exchange (gains) losses included in other operating expense, net resulting from the underlying exposures ofthe foreign currency denominated assets and liabilities. Interest rate swapOn May 18, 2012, the Company entered into a five year, $50,000 interest rate swap with Wells Fargo to provide a hedge against the variability of cashflows related to additional LIBOR-based variable rate borrowings under the Company’s ABL Revolver and ABL Term Loan. It increased to $85,000 inMay 2013 (when certain other interest rate swaps terminated) and decreases $5,000 per quarter beginning in August 2013 until the balance again reaches$50,000 in February 2015, where it will remain through the life of the instrument. This interest rate swap allows the Company to fix LIBOR at 1.06% andterminates on May 24, 2017. At June 29, 2014, the notional amount of the interest rate swap was $65,000. On November 26, 2012, the Company de-designated the interest rate swap as a cash flow hedge. For the fiscal years ended June 29, 2014 and June 30,2013, the Company reclassified pre-tax unrealized losses of $554 and $322 from accumulated other comprehensive loss to interest expense, respectively.The Company expects to reclassify additional losses of $327 during the next twelve months. Since the de-designation of this interest rate swap, theCompany has recognized a pre-tax unrealized marked to market loss of $39 and a gain of $931 within interest expense for the fiscal years ended June 29,2014 and June 30, 2013, respectively. See “Note 19. Accumulated Other Comprehensive Loss” for further discussion of the reclassifications of unrealizedlosses from accumulated other comprehensive loss. F-28 Unifi, Inc.Notes to Consolidated Financial Statements – (Continued) Contingent considerationOn December 2, 2013, the Company acquired certain assets in a business combination with Dillon and recorded a contingent consideration liability, asdescribed in “Note 4. Acquisitions.” The fair value of the contingent consideration is measured at each reporting period using a discounted cash flowmethodology based on inputs not observable in the market (Level 3 classification in the fair value hierarchy). The inputs to the discounted cash flowmodel include the estimated payments through the term of the agreement based on an agreed-upon definition and schedule, adjusted to risk-neutralestimates using a market price of risk factor which considers relevant metrics of comparable entities, discounted using an observable cost of debt over theterm of the estimated payments. Any change in the fair value from either the passage of time or events occurring after the acquisition date is recorded inother operating expense, net. As of June 29, 2014, the inputs and assumptions used to develop the fair value measurement have not changed since theacquisition date. A reconciliation of the changes in the fair value follows: Contingent consideration as of December 2, 2013 $2,500 Changes in fair value 172 Payments (109)Contingent consideration as of June 29, 2014 $2,563 Based on the present value of the expected future payments, $537 is reflected in accrued expenses and $2,026 is reflected in other long-term liabilities. The Company’s financial assets and liabilities accounted for at fair value on a recurring basis and the level within the fair value hierarchy used to measurethese items are as follows: As of June 29, 2014 Notional Amount USDEquivalent Balance SheetLocation Fair ValueHierarchy FairValue Foreign currency contracts EUR 495 $668 Other current assets Level 2 $7 Interest rate swap USD$65,000 $65,000 Other long-term liabilities Level 2 $(363)Contingent consideration — — Accrued expenses andother long-term liabilities Level 3 $(2,563) As of June 30, 2013 Notional Amount USDEquivalent Balance SheetLocation Fair ValueHierarchy FairValue Foreign currency contracts MXN 3,800 $295 Other current assets Level 2 $3 Interest rate swap USD $85,000 $85,000 Other long-term liabilities Level 2 $(324) (EUR represents the Euro; MXN represents the Mexican Peso) Estimates for the fair value of the Company’s foreign currency forward contracts and interest rate swaps are obtained from month-end market quotes forcontracts with similar terms. The effects of marked to market hedging derivative instruments are as follows: For the Fiscal Years Ended Derivatives not designated as hedges:Classification: June 29, 2014 June 30, 2013 June 24, 2012 Foreign currency contracts – EUR/USDOther operating expense, net $ (10) $ — $ — Foreign currency contracts – MXN/USDOther operating expense, net (3) 46 (45)Foreign currency contracts – USD/$ROther operating expense, net — — (2)Interest rate swapInterest expense 39 (931) — Total loss (gain) recognized in income $26 $(885) $(47) (EUR represents the Euro; MXN represents the Mexican Peso; $R represents the Brazilian Real) F-29 Unifi, Inc.Notes to Consolidated Financial Statements – (Continued) By entering into derivative instrument contracts, the Company exposes itself to counterparty credit risk. The Company attempts to minimize this risk byselecting counterparties with investment grade credit ratings, limiting the amount of exposure to any single counterparty and regularly monitoring itsmarket position with each counterparty. The Company’s derivative instruments do not contain any credit-risk-related contingent features. The Company believes that there have been no significant changes to its credit risk profile or the interest rates available to the Company for debtissuances with similar terms and average maturities and the Company estimates that the fair values of its debt obligations approximate the carryingamounts. Other financial instruments include cash and cash equivalents, receivables, accounts payable and accrued expenses. The financial statementcarrying amounts of these items approximate the fair value due to their short-term nature. There were no transfers into or out of the levels of the fair value hierarchy for the fiscal years ended June 29, 2014 and June 30, 2013. Non-Financial Assets and LiabilitiesThe Company did not have any non-financial assets or liabilities that were required to be measured at fair value on a recurring basis. 19. Accumulated Other Comprehensive Loss The components of and the changes in accumulated other comprehensive loss, net of tax, as applicable, consist of the following: Derivative Financial Instruments ForeignCurrencyTranslationAdjustments Unrealized(loss) gain oninterest rateswaps Unrealized(loss) gain oncash flowhedges AccumulatedOtherComprehensiveIncome (Loss) Balance at June 26, 2011 $24,830 $(408) $(646) $23,776 Other comprehensive loss, net of tax (22,813) (367) (568) (23,748)Balance at June 24, 2012 2,017 (775) (1,214) 28 Other comprehensive (loss) income, net of tax (6,585) (157) 1,214 (5,528)Balance at June 30, 2013 $(4,568) $(932) $— $(5,500) Other comprehensive income, net of tax 327 554 — 881 Balance at June 29, 2014 $(4,241) $(378) $— $(4,619)Unrealized (loss) gain on cash flow hedges related to an unconsolidated affiliate A summary of the pre-tax, tax and after-tax effects of the components of other comprehensive income (loss) for the fiscal years ended June 29, 2014, June30, 2013 and June 24, 2012 is provided as follows: Fiscal Year 2014 Fiscal Year 2013 Fiscal Year 2012 Pre-tax Tax After-tax Pre-tax Tax After-tax Pre-tax Tax After-tax Other comprehensive income(loss): Foreign currency translationadjustments $327 $— $327 $(6,585) $— $(6,585) $(22,813) $— $(22,813) Unrealized (loss) gain oninterest rate swaps — — — (240) (239) (479) (606) 239 (367) Unrealized gain (loss) oncash flow hedges for anunconsolidated affiliate — — — 1,214 — 1,214 (568) — (568) Reclassification adjustmentfor interest rate swapincluded in net income 554 — 554 322 — 322 — — — Other comprehensive income(loss) $881 $— $881 $(5,289) $(239) $(5,528) $(23,987) $239 $(23,748) F-30(1)(1) Unifi, Inc.Notes to Consolidated Financial Statements – (Continued) 20. Computation of Earnings Per Share The computation of basic and diluted earnings per share (“EPS”) is as follows: For the Fiscal Years Ended June 29, 2014 June 30, 2013 June 24, 2012 Basic EPS Net income attributable to Unifi, Inc. $28,823 $16,635 $11,491 Weighted average common shares outstanding 18,919 19,909 20,088 Basic EPS $1.52 $0.84 $0.57 Diluted EPS Net income attributable to Unifi, Inc. $28,823 $16,635 $11,491 Weighted average common shares outstanding 18,919 19,909 20,088 Net potential common share equivalents – stock options and RSUs and RSU’s 702 796 306 Adjusted weighted average common shares outstanding 19,621 20,705 20,394 Diluted EPS $1.47 $0.80 $0.56 Excluded from the calculation of common share equivalents: Anti-dilutive common share equivalents 91 210 184 Excluded from the calculation of diluted shares: Unvested options that vest upon achievement of certain market conditions 13 27 567 The calculation of earnings per common share is based on the weighted average number of the Company’s common shares outstanding for the applicableperiod. The calculation of diluted earnings per common share presents the effect of all potential dilutive common shares that were outstanding during therespective period, unless the effect of doing so is anti-dilutive. Common share equivalents where the exercise price is above the average market price areexcluded in the calculation of diluted earnings per common share. 21. Other Operating Expense, Net The components of other operating expense, net consist of the following: For the Fiscal Years Ended June 29, 2014 June 30, 2013 June 24, 2012 Operating expenses for Renewables $2,749 $2,396 $1,633 Restructuring charges, net 1,273 813 71 Foreign currency transaction losses (gains) 504 (132) 270 Net loss on sale or disposal of assets 475 243 369 Other, net 288 89 (272)Other operating expense, net $5,289 $3,409 $2,071 Operating expenses for Renewables include amounts incurred for employee costs, land and equipment rental costs, operating supplies, product testingand administrative costs. Operating expenses for Renewables also include $343, $230 and $97 of depreciation and amortization expense for the fiscalyears ended June 29, 2014, June 30, 2013 and June 24, 2012, respectively. The components of restructuring charges, net consist of the following: For the Fiscal Years Ended June 29, 2014 June 30, 2013 June 24, 2012 Severance $941 $948 $— Equipment relocation and reinstallation costs 356 — — Other (24) (135) 71 Restructuring charges, net $1,273 $813 $71 F-31 Unifi, Inc.Notes to Consolidated Financial Statements – (Continued) SeveranceOn May 14, 2013, the Company and one of its executive officers entered into a severance agreement that provides severance and certain other benefitsthrough November 2014. On August 12, 2013, the Company and another of its executive officers entered into a severance agreement that providesseverance payments through November 2014 and certain other benefits through the earlier of his new employment, gainful self-employment orDecember 2014. The table below presents changes to the severance reserves for the fiscal year ended June 29, 2014: BalanceJune 30, 2013 Charged toexpense Charged toother accounts Payments Adjustments BalanceJune 29, 2014 Accrued severance $1,186 941 244 (1,997) — $374 Equipment Relocation and Reinstallation CostsDuring fiscal year 2014, the Company dismantled and relocated certain polyester draw warping equipment from Monroe, North Carolina to a Burlington,North Carolina facility. The Company also dismantled and relocated certain polyester texturing and twisting equipment between locations in NorthCarolina and El Salvador. The costs incurred for the relocation of equipment were charged to restructuring expense within the Polyester Segment asincurred. 22. Other Non-Operating Expense (Income) During the fourth quarter of fiscal year 2014, the Company recorded an impairment charge of $126 relating to an investment, accounted for under the costmethod, for which there are no expected future cash inflows. During fiscal year 2012, the Company’s Brazilian subsidiary, Unifi do Brasil (“UDB”), recorded a gain of $1,488 from a refund of non-income relatedtaxes plus interest. During the 2000-2004 tax years, UDB paid a tax based on gross revenue to the Brazilian federal government, which included a tax oninterest income. The interest income portion of the tax was successfully challenged in the Brazilian courts. 23. Investments in Unconsolidated Affiliates and Variable Interest Entities Parkdale America, LLCIn June 1997, the Company and Parkdale Mills, Inc. (“Mills”) entered into a Contribution Agreement that set forth the terms and conditions by which thetwo companies contributed all of the assets of their spun cotton yarn operations utilizing open-end and air-jet spinning technologies to create ParkdaleAmerica, LLC (“PAL”). In exchange for its contribution, the Company received a 34% ownership interest in PAL, which is accounted for using the equitymethod of accounting. Effective January 1, 2012, Mills’ interest in PAL was assigned to Parkdale Incorporated. PAL is a limited liability company treatedas a partnership for income tax reporting purposes. PAL is a producer of cotton and synthetic yarns for sale to the textile industry and apparel market, bothforeign and domestic. PAL has 13 manufacturing facilities located primarily in the southeast region of the U.S. According to its most recently issuedaudited financial statements, PAL’s five largest customers accounted for approximately 74% of total revenues and 78% of total gross accounts receivableoutstanding. As PAL’s fiscal year end is the Saturday nearest to December 31 and its results are considered significant, the Company files an amendmentto each Annual Report on Form 10-K on or before 90 days subsequent to PAL’s fiscal year end to provide PAL’s audited financial statements for PAL’smost recent fiscal year. The Company filed an amendment to its Annual Report on Form 10-K for the fiscal year ended June 30, 2013 on March 27, 2014to provide PAL’s audited financial statements for PAL’s fiscal year ended December 28, 2013. During August 2008, a federal government program commenced providing economic adjustment assistance to domestic users of upland cotton (the “EAPprogram”). The EAP program offers a subsidy for cotton consumed in domestic production, and the subsidy is paid the month after the eligible cotton isconsumed. The subsidy must be used within eighteen months after the marketing year in which it is earned to purchase qualifying capital expenditures inthe U.S. for production of goods from upland cotton. The marketing year is from August 1 to July 31. The program provided a subsidy of four cents perpound through July 31, 2012 and thereafter provides a subsidy of up to three cents per pound. In February 2014, the federal government extended theEAP program for five years. The cotton subsidy will remain at three cents per pound for the life of the program. PAL recognizes its share of income for thecotton subsidy when the cotton has been consumed and the qualifying assets have been acquired, with an appropriate allocation methodologyconsidering the dual criteria of the subsidy. PAL is subject to price risk related to anticipated fixed-price yarn sales. To protect the gross margin of these sales, PAL may enter into cotton futures tomanage changes in raw material prices in order to protect the gross margin of fixed-priced yarn sales. The derivative instruments used are listed and tradedon an exchange and are thus valued using quoted prices classified within Level 1 of the fair value hierarchy. As of June 2014, PAL had no futurescontracts designated as cash flow hedges. F-32 Unifi, Inc.Notes to Consolidated Financial Statements – (Continued) As of June 29, 2014, the Company’s investment in PAL was $95,918 and reflected within investments in unconsolidated affiliates in the ConsolidatedBalance Sheets. The reconciliation between the Company’s share of the underlying equity of PAL and its investment is as follows: Underlying equity as of June 29, 2014 $114,323 Initial excess capital contributions 53,363 Impairment charge recorded by the Company in 2007 (74,106)Anti-trust lawsuit against PAL in which the Company did not participate 2,652 EAP adjustments (314)Investment as of June 29, 2014 $95,918 U.N.F. Industries, Ltd.In September 2000, the Company and Nilit Ltd. (“Nilit”) formed a 50/50 joint venture, U.N.F. Industries Ltd. (“UNF”), for the purpose of operating nylonextrusion assets to manufacture nylon POY. All raw material and production services for UNF are provided by Nilit under separate supply and servicesagreements. UNF’s fiscal year end is December 31 and it is a registered Israeli private company located in Migdal Ha-Emek, Israel. UNF America, LLCIn October 2009, the Company and Nilit America Inc. (“Nilit America”) formed a 50/50 joint venture, UNF America LLC (“UNF America”), for thepurpose of operating a nylon extrusion facility which manufactures nylon POY. All raw material and production services for UNF America are providedby Nilit America under separate supply and services agreements. UNF America’s fiscal year end is December 31 and it is a limited liability companytreated as a partnership for income tax reporting purposes located in Ridgeway, Virginia. In conjunction with the formation of UNF America, the Company entered into a supply agreement with UNF and UNF America whereby the Companyagreed to purchase all of its first quality nylon POY requirements for texturing (subject to certain exceptions) from either UNF or UNF America. Theagreement has no stated minimum purchase quantities and pricing is negotiated every six months, based on market rates. As of June 29, 2014, theCompany’s open purchase orders related to this agreement were $2,373. The Company’s raw material purchases under this supply agreement consist of the following: For the Fiscal Years Ended June 29, 2014 June 30, 2013 June 24, 2012 UNF $9,582 $11,752 $12,875 UNF America 24,223 22,601 17,956 Total $33,805 $34,353 $30,831 As of June 29, 2014 and June 30, 2013, the Company had combined accounts payable due to UNF and UNF America of $3,966 and $2,890, respectively. The Company has determined that UNF and UNF America are variable interest entities (“VIEs”) and has also determined that the Company is the primarybeneficiary of these entities, based on the terms of the supply agreement. As a result, these entities should be consolidated in the Company’s financialresults. As the Company purchases substantially all of the output from the two entities, the two entities’ balance sheets constitute 3% or less of theCompany’s current assets, total assets and total liabilities, and such balances are not expected to comprise a larger portion in the future, the Company hasnot included the accounts of UNF and UNF America in its consolidated financial statements. As of June 29, 2014, the Company’s combined investmentsin UNF and UNF America were $3,311 and are shown within investments in unconsolidated affiliates in the Consolidated Balance Sheets. The financialresults of UNF and UNF America are included in the Company’s financial statements with a one month lag, using the equity method of accounting andwith intercompany profits eliminated in accordance with the Company’s accounting policy. Other than the supply agreement discussed above, theCompany does not provide any other commitments or guarantees related to either UNF or UNF America. Condensed balance sheet and income statement information for the Company’s unconsolidated affiliates is presented in the following tables. As PAL isdefined as significant, its information is separately disclosed. The operating results of Renewables are included through the end of the Company’s firstquarter of fiscal year 2012, and thereafter Renewables’ results have been consolidated. As of June 29, 2014 PAL Other Total Current assets $248,651 $9,187 $257,838 Noncurrent assets 143,720 3,065 146,785 Current liabilities 50,696 5,437 56,133 Noncurrent liabilities 5,432 — 5,432 Shareholders’ equity and capital accounts 336,243 6,815 343,058 The Company’s portion of undistributed earnings 25,269 616 25,885 F-33 Unifi, Inc.Notes to Consolidated Financial Statements – (Continued) As of June 30, 2013 PAL Other Total Current assets $266,300 $11,343 $277,643 Noncurrent assets 111,061 3,163 114,224 Current liabilities 44,517 4,910 49,427 Noncurrent liabilities 15,609 — 15,609 Shareholders’ equity and capital accounts 317,235 9,596 326,831 For the Fiscal Year Ended June 29, 2014 PAL Other Total Net sales $841,542 $34,717 $876,259 Gross profit 63,645 3,921 67,566 Income from operations 48,857 2,259 51,116 Net income 52,283 2,529 54,812 Depreciation and amortization 26,222 101 26,323 Cash received by PAL under EAP program 16,909 — 16,909 Earnings recognized by PAL for EAP program 23,509 — 23,509 Distributions received 11,314 1,900 13,214 For the Fiscal Year Ended June 30, 2013 PAL Other Total Net sales $785,351 $35,190 $820,541 Gross profit 46,918 4,997 51,915 Income from operations 25,809 3,283 29,092 Net income 27,575 3,330 30,905 Depreciation and amortization 29,500 101 29,601 Cash received by PAL under EAP program 17,369 — 17,369 Earnings recognized by PAL for EAP program 8,744 — 8,744 Distributions received 13,440 1,500 14,940 For the Fiscal Year Ended June 24, 2012 PAL Other Total Net sales $1,063,126 $31,958 $1,095,084 Gross profit 66,266 3,589 69,855 Income from operations 57,203 1,414 58,617 Net income 56,069 1,461 57,530 Depreciation and amortization 33,549 131 33,680 Cash received by PAL under EAP program 22,090 — 22,090 Earnings recognized by PAL for EAP program 21,769 — 21,769 Distributions received 9,616 1,000 10,616 As of the end of PAL’s fiscal June 2014, fiscal June 2013 and fiscal June 2012 periods, PAL’s amounts of deferred revenues related to the EAP programwere $0, $8,791 and $166, respectively. F-34 Unifi, Inc.Notes to Consolidated Financial Statements – (Continued) 24. Commitments and Contingencies Collective Bargaining AgreementsWhile employees of the Company’s foreign operations are generally unionized, none of the Company’s domestic labor force is currently covered by acollective bargaining agreement. EnvironmentalOn September 30, 2004, the Company completed its acquisition of the polyester filament manufacturing assets located in Kinston, North Carolina fromINVISTA S.a.r.l (“Invista”). The land for the Kinston site was leased pursuant to a 99 year ground lease (“Ground Lease”) with E.I. DuPont de Nemours(“DuPont”). Since 1993, DuPont has been investigating and cleaning up the Kinston site under the supervision of the U.S. Environmental ProtectionAgency (“EPA”) and the North Carolina Department of Environment and Natural Resources (“DENR”) pursuant to the Resource Conservation andRecovery Act Corrective Action program. The Corrective Action program requires DuPont to identify all potential areas of environmental concern(“AOCs”), assess the extent of containment at the identified AOCs and to clean it up to comply with applicable regulatory standards. Effective March 20,2008, the Company entered into a Lease Termination Agreement associated with conveyance of certain assets at Kinston to DuPont. This agreementterminated the Ground Lease and relieved the Company of any future responsibility for environmental remediation, other than participation with DuPont,if so called upon, with regard to the Company’s period of operation of the Kinston site which was from 2004 to 2008. However, the Company continuesto own a satellite service facility acquired in the INVISTA transaction that has contamination from DuPont’s operations and is monitored by DENR. Thissite has been remediated by DuPont, and DuPont has received authority from DENR to discontinue remediation, other than natural attenuation. DuPont’sduty to monitor and report to DENR will be transferred to the Company in the future, at which time DuPont must pay the Company for seven years ofmonitoring and reporting costs and the Company will assume responsibility for any future remediation and monitoring of the site. At this time, theCompany has no basis to determine if or when it will have any responsibility or obligation with respect to the AOCs or the extent of any potentialliability for the same. Operating LeasesThe Company routinely leases sales and administrative office space, warehousing and distribution centers, manufacturing space, transportationequipment, manufacturing equipment, and other information technology and office equipment from third parties. In addition, Renewables leases farmland for use in growing FGM. Currently, the Company does not sub-lease any of its leased property. The following table presents, as of June 29, 2014, future minimum lease payments on a fiscal year basis for non-cancelable operating leases with initialterms in excess of one year: 2015 2016 2017 2018 2019 Thereafter Minimum lease payments $2,118 $1,395 $1,158 $802 $91 $— Rental expenses incurred under operating leases and included in operating income consist of the following: For the Fiscal Years Ended June 29, 2014 June 30, 2013 June 24, 2012 Rental expenses $3,621 $3,412 $3,146 Unconditional ObligationsThe Company is a party to unconditional obligations for certain utility, equipment purchase and other purchase or service commitments. Thesecommitments are non-cancelable, have remaining terms in excess of one year and qualify as normal purchases. On a fiscal year basis, the payments expected to be made as part of these commitments are as follows: 2015 2016 2017 2018 2019 Thereafter Unconditional purchase obligations $12,567 $8,188 $8,199 $5,191 $1,803 $— Unconditional service obligations 2,614 1,344 12 — — — Total unconditional obligations $15,181 $9,532 $8,211 $5,191 $1,803 $— F-35 Unifi, Inc.Notes to Consolidated Financial Statements – (Continued) For fiscal years 2014, 2013 and 2012, costs incurred under these commitments consisted of the following: For the Fiscal Years Ended June 29, 2014 June 30, 2013 June 24, 2012 Costs for unconditional purchase obligations $31,386 $31,953 $31,272 Costs for unconditional service obligations 5,932 5,679 5,598 Total $37,318 $37,632 $36,870 25. Related Party Transactions Related party receivables consist of the following: June 29, 2014 June 30, 2013 Dillon Yarn Corporation $4 $198 Cupron, Inc. 1 6 Total related party receivables (included within receivables, net) $5 $204 Related party payables consist of the following: June 29, 2014 June 30, 2013 Cupron, Inc. $525 $218 Salem Leasing Corporation 272 267 Dillon Yarn Corporation 131 135 American Drawtech Company, Inc. — 17 Total related party payables (included within accounts payable) $928 $637 Related party transactions consist of the matters in the table below and the following paragraphs: For the Fiscal Years Ended Affiliated EntityTransaction Type June 29, 2014 June 30, 2013 June 24, 2012 Dillon Yarn CorporationYarn purchases $3,042 $ 2,523 $2,333 Dillon Yarn CorporationSales service agreement costs — 349 845 Dillon Yarn CorporationSales 1,237 182 134 Dillon Yarn CorporationReimbursement of equipment relocationcosts — 75 — American Drawtech Company, Inc.Sales — 884 2,876 American Drawtech Company, Inc.Yarn purchases — 56 147 Salem Leasing CorporationTransportation equipment costs 3,607 3,077 3,096 Cupron, Inc.Sales 486 236 116 Cupron, Inc.Raw material purchases 8 — — Mr. Mitchel Weinberger, a member of the Board, is president and chief operating officer of Dillon Yarn Corporation (“Dillon”). In fiscal year 2007, theCompany purchased the polyester and nylon texturing operations of Dillon and entered into an agreement under which the Company agreed to payDillon for certain sales and services to be provided by Dillon's sales staff and executive management. That agreement expired pursuant to its terms onDecember 31, 2012. In addition, the Company recorded sales to and commission income from Dillon and has purchased products from Dillon. On April 8, 2013, the Company entered a commissioning agreement with Dillon. Under the terms of the agreement, the Company agreed to move Dillon’sdraw winding equipment from Dillon’s facility in Dillon, South Carolina and install it in the Company’s polyester texturing facility in Yadkinville, NorthCarolina. Pursuant to the exercise of an option granted to the Company under the terms of the commissioning agreement, the Company acquired the drawwinding equipment and associated business from Dillon on December 2, 2013, as described in “Note 4. Acquisitions.” On March 22, 2013, the Company entered into a Stock Purchase Agreement with Dillon. Pursuant to the Stock Purchase Agreement, the Companyrepurchased 500 shares of the Company’s common stock from Dillon for an aggregate amount of $8,500. The Company and Dillon negotiated the $17.00per share price based on an approximately 10% discount to the closing price of the stock on March 20, 2013. On November 1, 2013, the Companyentered into another Stock Purchase Agreement with Dillon, pursuant to which the Company purchased 150 shares of the Company’s common stock fromDillon, at a negotiated price of $23.00 per share, for $3,450. The purchase price was equal to an approximately 6% discount to the closing price of thecommon stock on October 31, 2013. The Board approved these transactions in accordance with its related persons transactions policy. Mr. Weinbergerwas not involved in any decisions by the Board, or any committee thereof, with respect to these stock repurchase transactions. F-36 Unifi, Inc.Notes to Consolidated Financial Statements – (Continued) Mr. Weinberger is an Executive Vice President and a director of American Drawtech Company, Inc. (“ADC”). During fiscal years 2013 and 2012, theCompany had sales to and yarn purchases from ADC. Mr. Kenneth G. Langone, a member of the Board, is a director, stockholder and non-executive Chairman of the Board of Salem Holding Company. TheCompany leases tractors and trailers from Salem Leasing Corporation, a wholly-owned subsidiary of Salem Holding Company. In addition to the monthlyoperating lease payments, the Company also incurs expenses for routine repair and maintenance, fuel and other expenses. These leases do not containrenewal, purchase options or escalation clauses with respect to the minimum lease charges. On November 19, 2012, the Company entered into a capital lease with Salem Leasing Corporation for certain transportation equipment. The present valueof the fifteen-year lease was $1,234 and payments are made monthly. The implicit annual interest rate under the lease is approximately 4.6%. The balanceof the capital lease obligation as of June 29, 2014 was $1,144. Mr. William J. Armfield, IV, a member of the Board, holds an indirect minority equity interest in Cupron, Inc. (“Cupron”) and is also a director. Duringfiscal years 2014, 2013 and 2012, the Company had sales to Cupron and during fiscal year 2014, the Company purchased raw material from Cupron. Mr. Langone is also the President and Chief Executive Officer of Invemed Associates LLC (“Invemed”). During fiscal years 2014 and 2013, Invemedprovided brokerage services to the Company for the Company’s repurchase of 1,149 and 568 shares of its common stock, respectively, through openmarket transactions. The Company paid a commission of $.02 per share to Invemed. On December 3, 2013, certain of the Company’s executive officers exercised options to purchase shares of the Company’s common stock underpreviously granted option awards. Pursuant to authorization from the Company’s Board, and as part of the 2013 SRP, the Company repurchased 225shares of common stock issued in those option exercises at a negotiated price of $25.59 per share (which was equal to the average of the closing tradeprices of the Company’s common stock for the 30 days ending December 2, 2013 and represented a 7.1% discount to the $27.56 closing price of thecommon stock on December 2, 2013). On August 30, 2012, a foreign subsidiary of the Company entered into an unsecured loan agreement with its unconsolidated affiliate, UNF, and borrowed$1,250. The loan bears interest at 3% with interest payable semi-annually. The loan does not amortize and, during fiscal year 2014, the maturity date wasextended from August 30, 2014 to August 30, 2015, at which time the entire principal balance is due. 26. Business Segment Information The Company has three operating segments, which are also its reportable segments. These segments derive revenues as follows: ●The Polyester Segment manufactures Chip, POY, textured, dyed, twisted, beamed and draw wound yarns, both virgin and recycled, with salesprimarily to other yarn manufacturers and knitters and weavers that produce yarn and/or fabric for the apparel, hosiery, automotive upholstery,home furnishings, industrial and other end-use markets. The Polyester Segment consists of sales and manufacturing operations in the U.S. and ElSalvador. ●The Nylon Segment manufactures textured nylon and covered spandex yarns, with sales to knitters and weavers that produce fabric primarily forthe apparel and hosiery markets. The Nylon Segment consists of sales and manufacturing operations in the U.S. and Colombia. ●The International Segment’s products primarily include textured polyester and various types of resale yarns and staple fiber. The InternationalSegment sells its yarns to knitters and weavers that produce fabric for the apparel, automotive upholstery, home furnishings, industrial and otherend-use markets primarily in the South American and Asian regions. This segment includes a manufacturing location and sales offices in Braziland a sales office in China. The Company evaluates the operating performance of its segments based upon Segment Adjusted Profit, which is defined as segment gross profit plussegment depreciation and amortization less segment SG&A expenses and plus segment other adjustments. Segment operating profit represents segmentnet sales less cost of sales, restructuring and other charges and SG&A expenses. The accounting policies for the segments are consistent with theCompany’s accounting policies. Intersegment sales are accounted for at current market prices. For the Polyester Segment, fiscal year 2013 contained one additional fiscal week. For the Nylon Segment's operations in the United States, fiscal year2013 contained one additional fiscal week. F-37 Unifi, Inc.Notes to Consolidated Financial Statements – (Continued) Selected financial information for the Polyester, Nylon and International Segments is presented below: For the Fiscal Year Ended June 29, 2014 Polyester Nylon International Total Net sales $389,172 $163,824 $134,906 $687,902 Cost of sales 342,393 143,649 118,598 604,640 Gross profit 46,779 20,175 16,308 83,262 Selling, general and administrative expenses 28,422 9,531 8,250 46,203 Restructuring charges (recoveries) 356 (24) — 332 Other operating expense, net 82 — — 82 Segment operating profit $17,919 $10,668 $8,058 $36,645 For the Fiscal Year Ended June 30, 2013 Polyester Nylon International Total Net sales $398,707 $164,085 $151,170 $713,962 Cost of sales 363,545 146,033 131,280 640,858 Gross profit 35,162 18,052 19,890 73,104 Selling, general and administrative expenses 29,114 9,930 8,342 47,386 Restructuring recoveries — (135) — (135)Other operating expense, net — 42 — 42 Segment operating profit $6,048 $8,215 $11,548 $25,811 For the Fiscal Year Ended June 24, 2012 Polyester Nylon International Total Net sales $393,981 $163,103 $148,002 $705,086 Cost of sales 374,308 146,147 130,235 650,690 Gross profit 19,673 16,956 17,767 54,396 Selling, general and administrative expenses 25,668 8,851 8,963 43,482 Restructuring charges — 71 — 71 Segment operating (loss) profit $(5,995) $8,034 $8,804 $10,843 The reconciliations of segment operating profit to consolidated income before income taxes are as follows: For the Fiscal Years Ended June 29, 2014 June 30, 2013 June 24, 2012 Polyester $17,919 $6,048 $(5,995)Nylon 10,668 8,215 8,034 International 8,058 11,548 8,804 Segment operating profit 36,645 25,811 10,843 Provision (benefit) for bad debts 287 (154) 211 Other operating expense, net 4,875 3,502 2,000 Operating income 31,483 22,463 8,632 Interest income (1,790) (698) (1,921)Interest expense 4,329 4,489 16,073 Loss on extinguishment of debt — 1,102 3,203 Loss on previously held equity interest — — 3,656 Other non-operating expense (income) 126 — (1,488)Equity in earnings of unconsolidated affiliates (19,063) (11,444) (19,740)Income before income taxes $47,881 $29,014 $8,849 F-38 Unifi, Inc.Notes to Consolidated Financial Statements – (Continued) The reconciliations of segment depreciation and amortization expense to consolidated depreciation and amortization expense are as follows: For the Fiscal Years Ended June 29, 2014 June 30, 2013 June 24, 2012 Polyester $11,702 $17,234 $19,046 Nylon 2,276 3,070 3,089 International 3,151 3,418 4,011 Segment depreciation and amortization expense 17,129 23,722 26,146 Depreciation and amortization included in other operating expense, net 343 230 119 Amortization included in interest expense 424 632 870 Depreciation and amortization expense $17,896 $24,584 $27,135 Segment other adjustments for each of the reportable segments consist of the following: For the Fiscal Years Ended June 29, 2014 June 30, 2013 June 24, 2012 Polyester $637 $618 $(138)Nylon (119) 245 33 International 352 115 382 Segment other adjustments $870 $978 $277 Segment other adjustments include severance charges, restructuring charges and recoveries and other adjustments necessary to understand and comparethe underlying results of the segment. Segment Adjusted Profit for each of the reportable segments consists of the following: For the Fiscal Years Ended June 29, 2014 June 30, 2013 June 24, 2012 Polyester $30,696 $23,900 $12,913 Nylon 12,801 11,437 11,227 International 11,561 15,081 13,197 Segment Adjusted Profit $55,058 $50,418 $37,337 Intersegment sales for each of the reportable segments consist of the following: For the Fiscal Years Ended June 29, 2014 June 30, 2013 June 24, 2012 Polyester $651 $1,296 $2,179 Nylon 295 773 314 International 1,474 772 1,351 Intersegment sales $2,420 $2,841 $3,844 The reconciliations of segment capital expenditures to consolidated capital expenditures are as follows: For the Fiscal Years Ended June 29, 2014 June 30, 2013 June 24, 2012 Polyester $14,701 $5,730 $3,246 Nylon 2,284 482 487 International 1,637 1,336 1,610 Segment capital expenditures 18,622 7,548 5,343 Unallocated corporate capital expenditures 469 1,261 1,011 Capital expenditures $19,091 $8,809 $6,354 The reconciliations of segment total assets to consolidated total assets are as follows: June 29, 2014 June 30, 2013 June 24, 2012 Polyester $192,697 $185,190 $198,321 Nylon 75,397 72,599 74,569 International 81,604 84,151 88,040 Segment total assets 349,698 341,940 360,930 All other current assets 2,549 3,342 9,424 Unallocated corporate PP&E 12,250 11,983 10,404 All other non-current assets 5,341 4,940 5,712 Investments in unconsolidated affiliates 99,229 93,261 95,763 Total assets $469,067 $455,466 $482,233 F-39 Unifi, Inc.Notes to Consolidated Financial Statements – (Continued) Geographic Data:Geographic information for net sales is as follows: For the Fiscal Years Ended June 29, 2014 June 30, 2013 June 24, 2012 U.S. $512,496 $519,148 $515,522 Brazil 113,448 124,455 125,737 All Other Foreign 61,958 70,359 63,827 Total $687,902 $713,962 $705,086 The information for net sales is based on the operating locations from where the items were produced or distributed. Export sales from the Company’s U.S.operations to external customers were $100,546, $93,128 and $84,558 for the fiscal years ended June 29, 2014, June 30, 2013 and June 24, 2012,respectively. Geographic information for long-lived assets is as follows: June 29, 2014 June 30, 2013 June 24, 2012 U.S. $215,910 $200,958 $215,890 Brazil 12,188 16,150 19,121 All Other Foreign 7,413 8,658 7,935 Total $235,511 $225,766 $242,946 Long-lived assets are comprised of property, plant and equipment, net, intangible assets, net, investments in unconsolidated affiliates and other non-current assets. Geographic information for total assets is as follows: June 29, 2014 June 30, 2013 June 24, 2012 U.S. $362,510 $346,651 $370,572 Brazil 70,581 72,735 77,788 All Other Foreign 35,976 36,080 33,873 Total $469,067 $455,466 $482,233 27. Quarterly Results (Unaudited) Quarterly financial data and selected highlights are as follows: For the Fiscal Quarters Ended September 29,2013 December 29,2013 March 30,2014 June 29,2014 Net sales $168,669 $160,617 $176,864 $181,752 Gross profit 19,985 18,497 19,759 25,021 Net income including non-controlling interest 8,619 6,211 4,454 8,436 Less: net (loss) attributable to non-controlling interest (251) (232) (289) (331)Net income attributable to Unifi, Inc. $8,870 $6,443 $4,743 $8,767 Net income attributable to Unifi, Inc. per common share: Basic (1) $0.46 $0.34 $0.25 $0.48 Diluted (1) $0.44 $0.32 $0.24 $0.46 F-40 Unifi, Inc.Notes to Consolidated Financial Statements – (Continued) For the Fiscal Quarters Ended September 23,2012 December 23,2012 March 24,2013 June 30,2013 (2) Net sales $172,900 $172,071 $168,249 $200,742 Gross profit 18,020 16,691 12,681 25,712 Net income including non-controlling interest 2,058 2,217 1,164 10,231 Less: net (loss) attributable to non-controlling interest (236) (209) (235) (285)Net income attributable to Unifi, Inc. $2,294 $2,426 $1,399 $10,516 Net income attributable to Unifi, Inc. per common share: Basic (1) $0.11 $0.12 $0.07 $0.54 Diluted (1) $0.11 $0.12 $0.07 $0.52 (1)Income per share is computed independently for each of the periods presented. The sum of the income per share amounts for the quarters may notequal the total for the year. (2)The fiscal quarter ended June 30, 2013 contained 14 fiscal weeks whereas the previous quarters of 2013 each contained 13 fiscal weeks. 28. Supplemental Cash Flow Information Cash payments for interest and taxes consist of the following: For the Fiscal Years Ended June 29, 2014 June 30, 2013 June 24, 2012 Interest, net of capitalized interest $3,313 $4,701 $16,689 Income taxes, net of refunds 12,569 8,100 3,988 Cash payments for taxes shown above consist primarily of income and withholding tax payments made by the Company in both U.S. and foreignjurisdictions. Non-Cash Investing and Financing ActivitiesDuring fiscal year 2014, the Company entered into four capital leases with an aggregate present value of $3,353. As of June 29, 2014 and June 30, 2013, $5,023 and $1,586, respectively, were included in accounts payable for unpaid capital expenditures. On December 3, 2013, the Company received and retired 134 shares of its common stock, with a fair value of $3,583, tendered in lieu of cash for theexercise of 421 employee stock options. The total fair value of the long-lived assets acquired in the December 2013 purchase of Dillon’s draw winding business was $2,500, and the contingentconsideration liability established at the acquisition date was $2,500. During fiscal year 2013, the Company entered into a capital lease with a present value of $1,234 for certain transportation equipment. F-41Exhibit 10.33 FOURTH AMENDMENT TO YARN PURCHASE AGREEMENT THIS FOURTH AMENDMENT TO YARN PURCHASE AGREEMENT (this “Fourth Amendment”) is made and entered into as of the 30day of May, 2014 by and between Hanesbrands Inc., a Maryland corporation, with a principal place of business located at 1000 East Hanes Mill Road,Winston Salem, NC 27105 (“Buyer” or “HBI”), and Unifi Manufacturing, Inc., a North Carolina corporation, with a principal place of business located at7201 West Friendly Avenue, Greensboro, NC 27410 (“Supplier” or “UMI”). RECITALS A. Buyer and Supplier previously entered into a Yarn Purchase Agreement dated November 6, 2009 (as amended, the “Agreement”). B. Buyer and Supplier entered into a First Amendment to the Agreement dated July 17, 2012, a Second Amendment to the Agreement datedNovember 21, 2013, and a Third Amendment to the Agreement dated March 28, 2014. B. Buyer and Supplier desire to amend the terms of the Agreement as more particularly set forth herein. NOW, THEREFORE, in consideration of the foregoing premises and the mutual covenants and agreements contained herein, the parties heretoagree as follows: 1. Amendments. 1.1 The Agreement is hereby amended by deleting Section 8.1 thereof in itsentirety and replacing it with the following Section 8.1: “8.1 Term. The term of this Agreement shall commence on the Effective Date hereof and shall expire on June 30, 2014 (the “InitialTerm”), unless terminated as provided herein.” 2. Certain Terms. All capitalized terms not defined herein shall have the same meaning as set forth in the Agreement. Any conflict betweenterms of this Third Amendment and the Agreement will be resolved in favor of this Third Amendment. 3. No Other Amendments. Except as amended hereby, all the terms and provisions of the Agreement shall remain in full force and effect. Anyreferences in the Agreement to the Agreement shall hereinafter be deemed to refer to the Agreement as amended by this Third Amendment. 4. Counterparts. This Third Amendment may be executed in any number of counterparts, each of which shall constitute an original, and allsuch counterparts shall together constitute one instrument. [signature page follows] th IN WITNESS WHEREOF, the parties hereto have caused their duly authorized representatives to execute this Third Amendment, in the mannerappropriate to each, as of the day and year first above written. HANESBRANDS INC. /S/ MIKE FAIRCLOTHName: Mike FairclothTitle: President, Supply ChainUNIFI MANUFACTURING, INC. /S/ R. ROGER BERRIER, JR.Name: R. Roger Berrier, Jr.Title: President and COO 2 *Confidential treatment has been requested for the redacted portions of this agreement pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, asamended. The confidential, redacted portions have been provided separately to the U.S. Securities and Exchange Commission Exhibit 10.34 FIFTH AMENDMENT TO YARN PURCHASE AGREEMENT THIS FIFTH AMENDMENT TO YARN PURCHASE AGREEMENT (this “Fifth Amendment”) is made and entered into as of the 25 day ofJune, 2014 by and between Hanesbrands Inc., a Maryland corporation, with a principal place of business located at 1000 East Hanes Mill Road, WinstonSalem, NC 27105 (“Buyer” or “HBI”), and Unifi Manufacturing, Inc., a North Carolina corporation, with a principal place of business located at 7201West Friendly Avenue, Greensboro, NC 27410 (“Supplier” or “UMI”). RECITALS A. Buyer and Supplier previously entered into a Yarn Purchase Agreement dated November 6, 2009 (as amended, the “Agreement”). B. Buyer and Supplier entered into a First Amendment to the Agreement dated July 17, 2012, a Second Amendment to the Agreement datedNovember 21, 2013, a Third Amendment to the Agreement dated March 28, 2014 and a Fourth Amendment dated May 30, 2014. B. Buyer and Supplier desire to amend the terms of the Agreement as more particularly set forth herein. NOW, THEREFORE, in consideration of the foregoing premises and the mutual covenants and agreements contained herein, the parties heretoagree as follows: 1. Amendments. 1.1 The Agreement is hereby amended by deleting Section 8.1 thereof in its entirety and replacing it with the following Section 8.1: “8.1 Term. The term of this Agreement shall commence on the Effective Date hereof and shall expire on August 31, 2014 (the “InitialTerm”), unless terminated as provided herein.” 1.2 The Agreement is hereby amended by deleting Appendices A-1 through A-3 and replacing them with revised Appendices A-1 through A-6,attached hereto. This amendment 1.2 to the Agreement is effective as of July 1, 2014. 1.3 The Agreement is hereby amended by the deletion of Section 4 of Exhibit A-4 in its entirety and replacing it with the following Section 4: “4. Spandex- until the expiration of the Term of the Agreement, Supplier shall select the supply source of all spandex items utilized ascomponents or otherwise used or incorporated into Yarn products. The Supplier shall provide [Confidential]* to the Buyer in the followingamounts for the following spandex deniers: th *Confidential treatment has been requested for the redacted portions of this agreement pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, asamended. The confidential, redacted portions have been provided separately to the U.S. Securities and Exchange Commission i. 15 denier = [Confidential]*ii. 20 denier = [Confidential]*iii. 30 denier = [Confidential]* andiv. 140 denier = [Confidential]* Any and all specialty spandex products are excluded from [Confidential]*. This amendment 1.3 to the Agreement is effective as of July 1,2014. 2. Certain Terms. All capitalized terms not defined herein shall have the same meaning as set forth in the Agreement. Any conflict betweenterms of this Fifth Amendment and the Agreement will be resolved in favor of this Third Amendment. 3. No Other Amendments. Except as amended hereby, all the terms and provisions of the Agreement shall remain in full force and effect. Anyreferences in the Agreement to the Agreement shall hereinafter be deemed to refer to the Agreement as amended by this Fifth Amendment. 4. Counterparts. This Fifth Amendment may be executed in any number of counterparts, each of which shall constitute an original, and allsuch counterparts shall together constitute one instrument. [signature page follows] 2  *Confidential treatment has been requested for the redacted portions of this agreement pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, asamended. The confidential, redacted portions have been provided separately to the U.S. Securities and Exchange Commission IN WITNESS WHEREOF, the parties hereto have caused their duly authorized representatives to execute this Fifth Amendment, in the mannerappropriate to each, as of the day and year first above written. HANESBRANDS INC. /s/ MIKE FAIRCLOTHName: Mike FairclothTitle: PresidentChief Global Operations OfficerUNIFI MANUFACTURING, INC. /s/ BYRON SHARRONName: Byron SharronTitle: Vice President of Sales 3  *Confidential treatment has been requested for the redacted portions of this agreement pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended. The confidential, redacted portions have been providedseparately to the U.S. Securities and Exchange Commission Appendix A-1 [*] Seamless Puerto RicoLa LibertadMt. AiryBonaventureHonduras [*]HosierySAP #Intimates/SeamlessSAP #SockSAP #Reference ItemDescriptionPlyDenFilTwistLusterPOYSupplier[*][*]ProductPriceFreightWarehouse[*]TotalPriceFreightTotalPriceFreightTotalPriceFreightTotalPriceFreightTotalPriceNotes[*]2107413 E71351S.0.01|11|5|1115STWISTSEMIDULL[*][*][*][*][*][*][*][*][*][*][*][*] [*]2107414 E71351Z.0.01|11|5|1115ZTWISTSEMIDULL[*][*][*][*][*][*][*][*][*][*][*][*] [*] N3090060.B01.501/14/10 11410STWISTSEMIDULL[*][*][*][*][*][*][*][*][*][*][*][*] [*] N3090061.B01.501/14/10 11410ZTWISTSEMIDULL[*][*][*][*][*][*][*][*][*][*][*][*] [*]2000023 N3091130.T01.501/15/7 1157STWISTSEMIDULL[*][*][*][*][*][*][*][*][*][*][*][*] [*]2000024 N3091131.T01.501/15/7 1157ZTWISTSEMIDULL[*][*][*][*][*][*][*][*][*][*][*][*] [*]2000008YN002IXNC0000000 N30S4710.T21.501|20|7 1207STWISTSEMIDULL[*][*][*][*][*][*][*][*][*][*][*][*] [*]2000009YN002JXNC0000000 N30S4711.T22.501|20|7 1207ZTWISTSEMIDULL[*][*][*][*][*][*][*][*][*][*][*][*] [*]2146956YN008XNC0000000 N3090070.B10.501/23/28 12328STWISTSEMIDULL[*][*][*][*][*][*][*][*][*][*][*][*] [*]2147047YN009XNC0000000 N3090071.B10.501/23/28 12328ZTWISTSEMIDULL[*][*][*][*][*][*][*][*][*][*][*][*] [*] N3090901.Q2S.501|30|10 13010ZTWISTSEMIDULL[*][*][*][*][*][*][*][*][*][*][*][*] [*] N3091260.T2D.571/30/34 13034STWISTSEMIDULL[*][*][*][*][*][*][*][*][*][*][*][*] [*] N3091261.T2D.571/30/34 13034ZTWISTSEMIDULL[*][*][*][*][*][*][*][*][*][*][*][*] [*]2000013YN004IXNC0000000 N30S6810.T2D.501/40/13 14013STWISTSEMIDULL[*][*][*][*][*][*][*][*][*][*][*][*] [*]2000014YN004JXNC0000000 N30S6721.T2D.501/40/13 14013ZTWISTSEMIDULL[*][*][*][*][*][*][*][*][*][*][*][*] [*] N3090832.T2B.501/40/13 Sol dyeblack 14013ZTWISTSEMIDULL[*][*][*][*][*][*][*][*][*][*][*][*] [*]2000033YN004CXNC0000000 N30S6790.T22.501/40/34 14034STWISTSEMIDULL[*][*][*][*][*][*][*][*][*][*][*][*] [*]2000034YN004DXNC0000000 N30S6791.T22.501/40/34 14034ZTWISTSEMIDULL[*][*][*][*][*][*][*][*][*][*][*][*] [*] YN004CXNC0000000 N3022150.Q2D.501/40/34 14034STWISTSEMIDULL[*][*][*][*][*][*][*][*][*][*][*][*] [*] YN004DXNC0000000 N3022151.Q2D.501/40/34 14034ZTWISTSEMIDULL[*][*][*][*][*][*][*][*][*][*][*][*] [*]2101635YN0064XNC0000000 N30S6762.62C.502/40/34 240342 PLYSEMIDULL[*][*][*][*][*][*][*][*][*][*][*][*] [*]2163978YN002AXNC0000000 N3090762.R2C.502/40/34 Arafelle 240342 PlySEMIDULL[*][*][*][*][*][*][*][*][*][*][*][*] [*]2165528YN007EXNC0000000 N3090402.62R.502|40|34|CationicPastelle 240342 PLYSEMIDULL[*][*][*][*][*][*][*][*][*][*][*][*] [*]2165529YN003UXNC0000000 N3091162.R2R.502|40|34| DeepDye 240342 PLYDEEPDYE[*][*][*][*][*][*][*][*][*][*][*][*] [*] N3038932.B21.502/40/34 240342 PLYSEMIDULL[*][*][*][*][*][*][*][*][*][*][*][*] [*]2182740YN0011XNC0000000 N30S4670.T1B.501/50/92 15092STWISTSEMIDULL[*][*][*][*][*][*][*][*][*][*][*][*] [*]2182741YN0013XNC0000000 N30S4671.T1B.501/50/92 15092ZTWISTSEMIDULL[*][*][*][*][*][*][*][*][*][*][*][*] [*]2180736YN0021XNC0000000 N30S8772.E2B.502/50/92 250922 PLYSEMIDULL[*][*][*][*][*][*][*][*][*][*][*][*] [*]2000037YN002VXNC0000000 N30S8670.62C.501/68/68 16868STWISTSEMIDULL[*][*][*][*][*][*][*][*][*][*][*][*] [*]2000038YN002WXNC0000000 N30S8671.62C.501/68/68 16868ZTWISTSEMIDULL[*][*][*][*][*][*][*][*][*][*][*][*] [*]2117111YN0075XNC0000000 N30S8682.62C.502/68/68 268682 PLYSEMIDULL[*][*][*][*][*][*][*][*][*][*][*][*] [*]2000019 N30S7000.T2D.501/70/34 17034STWISTSEMIDULL[*][*][*][*][*][*][*][*][*][*][*][*] [*]2000020 N30S7001.T2D.501/70/34 17034ZTWISTSEMIDULL[*][*][*][*][*][*][*][*][*][*][*][*] [*] YN0854WHT000S000 N30S6830.629.501/70/34 17034ZTWISTSEMIDULL[*][*][*][*][*][*][*][*][*][*][*][*] [*] YN00856WHT000Z000 N30S6831.629.501/70/34 17034STWISTSEMIDULL[*][*][*][*][*][*][*][*][*][*][*][*] [*] 19395N3021221.621.501|70|34| 17034ZTWISTSEMIDULL[*][*][*][*][*][*][*][*][*][*][*][*] [*]2000258 N30S7022.T2B.502/70/34 270342 PLYSEMIDULL[*][*][*][*][*][*][*][*][*][*][*][*][*][*] [*] 19594N3020992.T2B.502/70/34 FF Oil 270342 PLYSEMIDULL[*][*][*][*][*][*][*][*][*][*][*][*] [*] YN007QXNC0000000 N3057050.B2C.501|70|46 Novva 17046STWISTBRIGHT[*][*][*][*][*][*][*][*][*][*][*][*] [*] YN007RXNC0000000 N3057051.B2C.501|70|46 Novva 17046ZTWISTBRIGHT[*][*][*][*][*][*][*][*][*][*][*][*] [*] YN007SXNC0000000 N3021502.62B.502|70|46|BRIGHT 270462 PLYBRIGHT[*][*][*][*][*][*][*][*][*][*][*][*] [*] 19595N3021062.D21.502/70/68 FullDull 270682PLYFULLDULL[*][*][*][*][*][*][*][*][*][*][*][*] [*] YN4029XNC0000000 N3021782.Q21.502/70/68 SD 270682 PLYSEMIDULL[*][*][*][*][*][*][*][*][*][*][*][*] [*]  * Confidential treatment has been requested for the redacted portions of this agreement pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended. The confidential, redacted portions have been provided separately to the U.S. Securities and ExchangeCommission. Appendix - A2 [*] Seamless Puerto RicoLa LibertadMt. AiryBonaventureHonduras [*]HosierySAP #Intimates/SeamlessSAP #Reference ItemDescriptionCoreSpandexDenierCoverDTYDenCoverDTYFilCoverFlatDenCoverFlatFilTPICoreSupplierCoverSupplierCore%Cover%NominalCoreSpandexPriceCoverDTYPriceCoverFlatPrice[*][*]ProductPriceFreightWarehouse[*]TotalPriceFreightTotalPriceFreightTotalPriceFreightTotalPriceFreightTotalPriceNotes[*]2000300 C3ES155M.001.4010|1|7|5 Flat10 75[*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*] [*]2000301 C3ES155M.002.4010|1|7|5 Flat10 75[*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*] [*]2181694 C3NS215M.171.4010|1|7|5Fusible/Flat10 75[*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*] SeafreightPrice[*]2181694 C3NS215M.172.4010|1|7|5Fusible/Flat10 75[*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*] AirfreightPrice[*]2181695 C3NS215M.172.4010|1|7|5Fusible/Flat10 75[*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*] SeafreightPrice[*]2181695 C3NS215M.172.4010|1|7|5Fusible/Flat10 75[*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*] AirfreightPrice[*]2188257 C3NS267M.W61.4010|1|15|7 brtoval10 157[*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*] [*]2188258 C3NS267M.W62.4010|1|15|7 brtoval10 157[*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*] [*]2000067 C3ES232M.171.4010|1|23|28102328 [*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*] [*]2000068 C3ES232M.172.4010|1|23|28102328 [*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*] [*]2165530 C3ES241M.W71.4010|2|40|34104034 [*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*] [*]2165531 C3ES241M.W72.4010|2|40|34104034 [*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*] [*]2159244 C3YS195R.171.4015|1|7|5 Flat15 75[*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*] [*]2159245 C3YS195R.172.4015|1|7|5 Flat15 75[*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*] [*]2000171 C3ES261M.W51.4015|1|14|10151410 [*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*] [*]2000172 C3ES261M.W52.4015|1|14|10151410 [*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*] [*]2163747 C3ES279M.W71.4015|1|30|34153034 [*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*] [*]2163748 C3ES279M.W72.4015|1|30|34153034 [*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*] [*]2189837 C3ES275M.W61.4015|1|50|92dyeablespandex155092 [*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*] [*]2189838 C3ES275M.W62.4015|1|50|92dyeablespandex155092 [*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*] [*]2129687 C3AS254M.W71.4020|1|7|5 Flat20 75[*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*] [*]2129688 C3AS254M.W72.4020|1|7|5 Flat20 75[*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*] [*]2131540 C3MS144R.088.4020|1|10|7Flat/DoubleCov20 107[*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*] [*]2177767 C3NS225M.171.4020|1|10|7Fusible/Flat20 107[*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*] SeafreightPrice[*]2177767 C3NS225M.171.4020|1|10|7Fusible/Flat20 107[*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*] Airfreightprice[*]2177768 C3NS225M.172.4020|1|10|7Fusible/Flat20 107[*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*] SeafreightPrice[*]2177768 C3NS225M.172.4020|1|10|7Fusible/Flat20 107[*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*] Airfreightprice[*]2000204 C3ZS265M.W61.4020|1|10|7Flat20 107[*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*] [*]2000205 C3ZS265M.W62.4020|1|10|7Flat20 107[*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*] [*]2129689YN004GXNC0000000C3AS249M.W71.4020|1|15|720157 [*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*] [*]2129690YN004HXNC0000000C3AS249M.W72.4020|1|15|720157 [*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*] [*] YN0023XNC0000000C3YS278M.W61.4020|1|20|12202012 [*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*] [*] YN0024XNC0000000C3YS278M.W62.4020|1|20|12202012 [*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*] [*]2189067 C3AS270M.W71.4020|1|23|28202328 [*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*] [*]2189068 C3AS270M.W72.4020|1|23|28202328 [*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*] [*] YN0085XNC0000000C3AS280.W61.4020|1|30|34203034 [*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*] [*] YN0086XNC0000000C3AS280.W62.4020|1|30|34203034 [*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*] [*]2150087 C3E2398M.171.4020|1|40|13204013 [*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*] [*]2150088 C3E2398M.172.4020|1|40|13204013 [*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*] [*]2000114YN002LXNC000000C3AS253M.171.4020|1|40|34|204034 [*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*] [*]2000115YN002MXNC000000C3AS253M.172.4020|1|40|34|204034 [*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*] [*]2000114YN002LXNC000000C3ZS264M.W71.4020|1|40|34|204034 [*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*] [*]2000115YN002MXNC000000C3ZS264M.W72.4020|1|40|34|204034 [*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*] [*]2177887 C3AS255M.W71.4020|1|50|92205092 [*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*] [*]2177888 C3AS255M.W72.4020|1|50|92205092 [*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*] [*]2000109 C3AS250M.W71.4020|1|70|34207034 [*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*] [*]2000110 C3AS250M.W72.4020|1|70|34207034 [*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*] [*]2179301 C3ES271M.W61.4030|1|15|730157 [*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*] [*]2179302 C3ES271M.W62.4030|1|15|730157 [*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*] [*]2151953 C3AS274R.W7B.4040|1|10|7Flat/DoubleCov40 107[*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*] [*]2184679 C3LS238M.171.4040|1|10|7T902C/Flat40 107[*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*] [*]2184680 C3LS238M.172.4040|1|10|7T902C/Flat40 107[*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*] [*]2100000YN001SXNC0000000C3AS272M.W61.4040|1|20|740207 [*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*] [*]2100001YN001TXNC0000000C3AS272M.W62.4040|1|20|740207 [*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*] [*]2169501 C3AS259M.W71.4040|1|40|34404034 [*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*] [*]2169502 C3AS259M.W72.4040|1|40|34404034 [*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*] [*] YN002ZXNC0000000C3L2212M.171.4040|1|40|34404034 [*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*] [*] YN003AXNC0000000C3L2212M.172.4040|1|40|34404034 [*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*] [*]2184217 C3AS269M.W71.4040|1|68|68406868 [*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*] [*]2184218 C3MS269M.W72.4040|1|68|68406868 [*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*] [*]2180607 C3NS200M.171.4050|1|10|7Fusible/Flat50 107[*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*] SeafreightPrice[*]2180607 C3NS200M.171.4050|1|10|7Fusible/Flat50 107[*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*] SeafreightPrice[*]2180608 C3NS200M.172.4050|1|10|7Fusible/Flat50 107[*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*] AirfreightPrice[*]2180608 C3NS200M.172.4050|1|10|7Fusible/Flat50 107[*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*] AirfreightPrice[*]2000151 C3YS273M.W71.4070|1|20|770207 [*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*] [*]2000152 C3YS273M.W72.4070|1|20|770207 [*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*] [*]2000178YN005UXNC0000000C3A2489M.W71.4070|1|20|770207 [*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*] [*]2000179YN005VXNC0000000C3A2489M.W72.4070|1|20|770207 [*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*] [*]2176963YN009CXNC0000000C3ES162M.001.4070|1|26|20Flat70 2620[*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*] [*]2176964YN009DXNC0000000C3ES162M.002.4070|1|26|20Flat70 2620[*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*] [*]2000087 C3AS276M.W71.4070|1|40|13704013 [*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*] [*]2000088 C3AS276M.W72.4070|1|40|13704013 [*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*] [*]2116274YN003MXNC0000000C3AS248M.W71.4070|1|40|34|704034 [*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*] [*]2116275YN003NXNC0000000C3AS248M.W72.4070|1|40|34704034 [*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*] [*]2000093 C3AS247M.W71.4070|1|70|34707034 [*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*] [*]2000094 C3AS247M.W72.4070|1|70|34707034 [*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*] [*]2187917 C3ES251M.W71.40120|1|50|92T902C1205092 [*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*] [*]2187918 C3ES251M.W72.40120|1|50|92T902C1205092 [*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*] [*]2000196YN004AXNC0000000C3AS258M.W71.40140|1|40|341404034 [*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*] [*]2000197YN004BXNC0000000C3AS258M.W72.40140|1|40|341404034 [*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*] [*] YN003VXNC0000000C3ES243M.W72.40210|1|40|132104013 [*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*] [*] YN002KXNC0000000C3ES239M.W72.40210|1|70|342107034 [*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*] [*]  * Confidential treatment has been requested for the redacted portions of this agreement pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended. The confidential, redacted portions have been provided separately to the U.S. Secuerities and ExchangeCommission. Appendix A-3 [*]Seamless Puerto RicoLa LibertadMt. AiryBonaventureHonduras[*]HosierySAP #Intimates/SeamlessSAP #SockSAP#Reference ItemDescriptionCoreSpandexDenierCover1DTYDenCover2DTYFilCover2DTYDenCover2DTYFilTwistCoreSupplierCoverSupplierCore%Cover1 %Cover2 %NominalCoreSpandexPriceCover1DTYPriceCover2DTYPrice[*][*]ProductPriceFreightWarehouse[*]TotalPriceFreightTotalPriceFreightTotalPriceFreightTotalPriceFreightTotalPrice[*]2000085 C3ES345J.W71.5010 AC1|40|34|10 4034STWIST[*][*][*] [*][*] [*][*][*][*][*][*][*][*][*][*][*][*] [*]2000086 C3ES345J.W72.5010 AC1|40|34|10 4034ZTWIST[*][*][*] [*][*] [*][*][*][*][*][*][*][*][*][*][*][*] [*] YN008QXNC0000000 C3MS344K.181.5020 AC1/20/720 207STWIST[*][*][*] [*][*] [*][*][*][*][*][*][*][*][*][*][*][*] [*] YN008RXNC0000000 C3MS344K.182.5020 AC1/20/720 207ZTWIST[*][*][*] [*][*] [*][*][*][*][*][*][*][*][*][*][*][*] [*]2174180YN003FXNC0000000 C3E4002K.181.5020 AC1|40|3420 4034STWIST[*][*][*] [*][*] [*][*][*][*][*][*][*][*][*][*][*][*] [*]2174181YN003GXNC0000000 C3E4002K.182.5020 AC1|40|3420 4034ZTWIST[*][*][*] [*][*] [*][*][*][*][*][*][*][*][*][*][*][*] [*]2000116 C3ES343J.W71.5020 AC1/70/3420 7034STWIST[*][*][*] [*][*] [*][*][*][*][*][*][*][*][*][*][*][*] [*]2000117 C3ES343J.W72.5020 AC1/70/3420 7034ZTWIST[*][*][*] [*][*] [*][*][*][*][*][*][*][*][*][*][*][*] [*] YN009NXNC0000000 C3NS339J.17P.502/50/92 aircoveredversion 509250922 PLY[*][*] [*][*] [*][*][*][*][*][*][*][*][*][*][*][*][*] [*]  * Confidential treatment has been requested for the redacted portions of this agreement pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended. The confidential, redacted portions have been provided separately to the U.S. Securities and ExchangeCommission. Appendix A-4 Seamless Puerto RicoLa LibertadMt. AiryBonaventureHonduras[*]HosierySAP #Intimates/SeamlessSAP #SockSAP#DescriptionReference ItemCoreSpanexDenierCover1 DTYDenierCover1DTYFilCover2 DTYDenierCover2DTYFilCoreSupplierCoverSupplierCore%Cover1 %Cover2 %NominalCoreSpandexPriceCover1DTYPriceCover2DTYPrice[*][*]ProductPriceFreightWarehouse[*]TotalPriceFreightTotalPriceFreightTotalPriceFreightTotalPriceFreightTotalPrice[*] 229120 AC1/150/34BlackC3E9834K.182.5020 15034[*][*][*] [*][*] [*][*][*][*] [*][*][*][*] [*] 226220 AC1/150/72OBC3E4338K.W82.5020 15072[*][*][*] [*][*] [*][*][*][*] [*][*][*][*] [*] YN0059XNC0000000 1/40/34Nylon &1/50/36 PolyX1N6240J 40345036[*][*] [*][*] [*][*][*][*][*][*][*][*][*] [*] YN009NXNC0000000 1/68/68Nylon &1/70/72 PolyC3NS340J.H7P.50 68687072[*][*] [*][*] [*][*][*][*][*][*][*][*][*] [*]  * Confidential treatment has been requested for the redacted portions of this agreement pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended. The confidential, redacted portions have beenprovided separately to the U.S. Securities and Exchange Commission. Appendix A-5 [*]Seamless Puerto RicoLa LibertadMt. AiryBonaventureHonduras[*]HosierySAP #Intimates/SeamlessSAP #SockSAP#DescriptionReference ItemPlyDenFilPOYSupplier[*][*]ProductPriceFreightWarehouse[*]TotalPriceFreightTotalPriceFreightTotalPriceFreightTotalPriceFreightTotalPrice[*] 1/50/36 Textured Polyn/a15036[*][*][*][*][*][*][*][*][*][*][*][*] [*] YN009MXNC0000000 1/70/34 Cool Grey Poly - Logo -IntimatesH3061500.62R.5017034[*][*][*][*][*][*][*][*][*][*][*][*] [*]2000062 1/70/34 optical whiteD041901U.BD.2817034[*][*][*][*][*][*][*][*][*][*][*][*] [*] 9921|70|36|56T|NATURAL|SET|NONTS|POLYESTERP60273A.21.2317036[*][*][*][*][*][*][*][*][*][*][*][*] [*][*][*] YN007MXNC0000000210591/70/34 Blk PolyH3061931.G2C.5017036[*][*][*][*][*][*][*][*][*][*][*][*] [*] 210701|70|36|56T|NATURAL|STRETCH(El Salvador & Mt. Airy)P60272A.629.23,H3062141.629.5017036[*][*][*][*][*][*][*][*][*][*][*][*] [*] YN008EXNC0000000 1|70|68|Z TWIST|CATIONICPOLYESTER|SEMIDULL|STRETCH|ROUND|TS| | -S twistH3062270.62C.5017068[*][*][*][*][*][*][*][*][*][*][*][*] [*] YN008FXNC0000000 1|70|68|Z TWIST|CATIONICPOLYESTER|SEMIDULL|STRETCH|ROUND|TS| | -Z twistH3062271.62C.5017068[*][*][*][*][*][*][*][*][*][*][*][*] [*] YN008GXNC0000000 2|70|68|92T|NAT|STR|TS|POLYP59646A.23C.2327068[*][*][*][*][*][*][*][*][*][*][*][*] [*] YN3682XNC0000000 2/70/68 - Warp KnitP59464A.631.2327068[*][*][*][*][*][*][*][*][*][*][*][*] [*] YN3236XNC0000000 1/70/72 SD - circular knitWoolwine Asia onlyP59098A.631.2317072[*][*][*][*][*][*][*][*][*][*][*][*] [*] 1/70/72 SDn/a17072[*][*][*][*][*][*][*][*][*][*][*][*] [*] YN3234XNC0000000 2/70/68 - Circular Knit WoolineAsia onlyP5T352A.631.2327072[*][*][*][*][*][*][*][*][*][*][*][*] [*] YN3231XNC0000000 1/100/96 Warp KnitP5T260A.61R.23110096[*][*][*][*][*][*][*][*][*][*][*][*] [*] 210771/150/34 Sorbtek BLACK PolyH3061421.G21.50115034[*][*][*][*][*][*][*][*][*][*][*][*] [*] 210901/150/34 solution dyed black polyP53842A.G2C.23115034[*][*][*][*][*][*][*][*][*][*][*][*] [*] 2031/150/48 SDP59321K.621.26115048[*][*][*][*][*][*][*][*][*][*][*][*] [*] 210731/150/68 OB (Domestic)H3062351.62E.G9115068[*][*][*][*][*][*][*][*][*][*][*][*] [*] 210731/150/68 OB (El Salvador)P60153A.62E.23115068[*][*][*][*][*][*][*][*][*][*][*][*] [*] 210861/150/68 OB SORBTEKH3061361.T2B.50115068[*][*][*][*][*][*][*][*][*][*][*][*] [*] 210882/150/68 Flame Red Poly - SocksLogoP56512A.G2V.23215068[*][*][*][*][*][*][*][*][*][*][*][*] [*] 220003/150/68 Flame Red Poly - SocksLogoP56513A.G2V.23315068[*][*][*][*][*][*][*][*][*][*][*][*] [*] 210882/150/68 Quicksilver - Poly -Socks LogoP56520A.G2V.23215068[*][*][*][*][*][*][*][*][*][*][*][*] [*] 220003/150/68 Quicksilver - Poly -Socks LogoP56521A.G2V.23315068[*][*][*][*][*][*][*][*][*][*][*][*] [*] 210882/150/68 Power Pink - Poly -Socks LogoP59701A.G2V.23215068[*][*][*][*][*][*][*][*][*][*][*][*] [*] 220003/150/68 Power Pink - Poly -Socks LogoP59913A.G2V.23315068[*][*][*][*][*][*][*][*][*][*][*][*] [*] 210882/150/68 Black - Poly - SocksLogo (Not commodity)P59452A.G2V.23215068[*][*][*][*][*][*][*][*][*][*][*][*] [*] 220003/150/68 Black - Poly - SocksLogo (Not commodity)P59158A.G2V.23315068[*][*][*][*][*][*][*][*][*][*][*][*] [*] 210882/150/68 Royal - Poly - SocksLogoP56526A.G2V.23215068[*][*][*][*][*][*][*][*][*][*][*][*] [*] 220003/150/68 Royal - Poly - SocksLogoP56527A.G2V.23315068[*][*][*][*][*][*][*][*][*][*][*][*] [*] 210882/150/68 Lavendar - Poly - SocksLogoP56585A.G2V.23215068[*][*][*][*][*][*][*][*][*][*][*][*] [*] 220003/150/68 Lavendar - Poly - SocksLogoP56586A.G2V.23315068[*][*][*][*][*][*][*][*][*][*][*][*] [*] 210882/150/68 Begonia Pink - Poly -Socks LogoP56785A.G2V.23215068[*][*][*][*][*][*][*][*][*][*][*][*] [*] 220003/150/68 Begonia Pink - Poly -Socks LogoP59554A.G2V.23315068[*][*][*][*][*][*][*][*][*][*][*][*] [*] 210882/150/68 Pink 14 - Poly - SocksLogoP56636A.G2V.23215068[*][*][*][*][*][*][*][*][*][*][*][*] [*] 220003/150/68 Pink 14 - Poly - SocksLogoP56637A.G2V.23315068[*][*][*][*][*][*][*][*][*][*][*][*] [*] 210882/150/68 Melon - Poly - SocksLogoP56522A.G2V.23215068[*][*][*][*][*][*][*][*][*][*][*][*] [*] 220003/150/68 Melon - Poly - SocksLogoP56523A.G2V.23315068[*][*][*][*][*][*][*][*][*][*][*][*] [*] 210882/150/68 Merrimack - Poly - SocksLogoP56518A.G2V.23215068[*][*][*][*][*][*][*][*][*][*][*][*] [*] 220003/150/68 Merrimack - Poly - SocksLogoP56519A.G2V.23315068[*][*][*][*][*][*][*][*][*][*][*][*] [*] 210882/150/68 Plum RebelliousP59082A.G2V.23215068[*][*][*][*][*][*][*][*][*][*][*][*] [*] 220003/150/68 Plum Rebelliousn/a315068[*][*][*][*][*][*][*][*][*][*][*][*] [*] 210882/150/68 OB - Poly - Socks LogoP56892A.62V.23215068[*][*][*][*][*][*][*][*][*][*][*][*] [*] 220003/150/68 OB - Poly - Socks LogoP59371A.62V.23315068[*][*][*][*][*][*][*][*][*][*][*][*] [*] 210882/150/68 Diablo Rust - Poly -Socks LogoP56528A.G2V.23215068[*][*][*][*][*][*][*][*][*][*][*][*] [*] 220003/150/68 Diablo Rust - Poly -Socks LogoP56529A.G2V.23315068[*][*][*][*][*][*][*][*][*][*][*][*] [*] 210882/150/68 Sphere - Poly - SocksLogoP56538A.G2V.23215068[*][*][*][*][*][*][*][*][*][*][*][*] [*] 220003/150/68 Sphere - Poly - SocksLogoP56539A.G2V.23315068[*][*][*][*][*][*][*][*][*][*][*][*] [*] 210882/150/68 Grass GreenP50897A.G2V.23215068[*][*][*][*][*][*][*][*][*][*][*][*] [*]   * Confidential treatment has been requested for the redacted portions of this agreement pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended, The confidential,redacted portions have been provided separately to the U.S. Securities and Exchange Commission. Appendix A-6 [*]Seamless Puerto RicoLa LibertadMt. AiryBonaventureHonduras[*]HosierySAP #Intimates/SeamlessSAP #SockSAP #DescriptionReferenceItemTextDenierTextFilRawSupplier[*][*]ProductPriceFreightWarehouse[*]TotalPriceFreightTotalPriceFreightTotalPriceFreightTotalPriceFreightTotalPrice[*] 19130-0000002/30/10SewingYarn -NaturalT1Z014i3010[*][*][*][*][*][*][*][*][*][*][*][*] [*] 19430-01135P2/40/13SewingYarn -BlackT1Z020i4013[*][*][*][*][*][*][*][*][*][*][*][*] [*]  * Confidential treatment has been requested for the redacted portions of this agreement pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, asamended. The confidential, redacted portions have been provided separately to the U.S. Securities and Exchange Commission. Exhibit 10.35 YARN PURCHASE AGREEMENT by and between Hanesbrands Inc. and Unifi Manufacturing, Inc.  YARN PURCHASE AGREEMENT This Yarn Purchase Agreement (this “Agreement”) is made and entered into as of the 1st day of September, 2014 (the “Effective Date”), by and betweenHanesbrands Inc., a Maryland Corporation with a principal place of business located at 1000 E. Hanes Mill Rd., Winston-Salem, N.C. (“Buyer” or“HBI”), and Unifi Manufacturing, Inc., North Carolina corporation with a principal place of business located at 7201 West Friendly Avenue,Greensboro, North Carolina 27410 (“Supplier” or “UMI”). ARTICLE I RECITALSA. Supplier produces the high quality textured nylon and polyester yarns and various covered yarns referenced within Exhibits A-1, A-2, A-3, A-4, A-5 and A-6 attached hereto and incorporated herein by this reference, as well as various other textile products. Throughout this Agreement the term“Yarns” shall be defined so as to include all such yarns set forth on Exhibits A-1, A-2, A-3, A-3, A-4, A-5 and A-6, (all hereinafter collectively referred toas “Yarns”); B. Buyer and its affiliates, (which may include certain business operations or entities controlled or owned via the shareholdings of Buyer such as itssubsidiaries, branches, joint ventures, holding companies and similarly situated operating units), use the Yarns in the manufacture of apparel productsand historically have purchased certain of such Yarns from Supplier; and, C. Buyer and Supplier have negotiated mutually beneficial arrangements for Supplier to manufacture for Buyer, and for Buyer to procure fromSupplier, certain of Buyer’s requirements of Yarns as set forth hereafter. NOW, THEREFORE, for and in consideration of the premises and the mutual covenants and agreements contained herein, and other good and valuableconsideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows: ARTICLE II PURCHASES 2.1 Purchases. Supplier agrees that, during the Term as defined in Article VIII below, it will provide Yarns to Buyer for its direct manufacturingneeds in accordance with the terms and conditions of this Agreement and Buyer’s Purchase Orders (as provided for in Section 4.2) for the production ofYarns in accordance with HBI specifications and in the quantities specified herein and as contained in Buyer’s Purchase Orders.  * Confidential treatment has been requested for the redacted portions of this agreement pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, asamended. The confidential, redacted portions have been provided separately to the U.S. Securities and Exchange Commission. 2.2 Buyer’s Minimum Commitment. Buyer shall purchase from Supplier [Confidential]* of Yarns that Supplier is capable of supplying pursuant tothe terms of this Agreement. Supplier has first right of refusal to supply any new [Confidential]* of Buyer, but Buyer shall be under no obligation toaward the new business to Supplier and has the right to award new business based on cost, quality and trade law implications in Buyer’s sole discretion. Inthe event Supplier is approved by Buyer to supply any new yarns and Buyer initiates purchases of such yarns, then any such yarns will be subject to[Confidential]*. Buyer’s [Confidential]* shall be communicated to Supplier periodically from Buyer during the Term of this Agreement. Additionally,Supplier agrees to use commercially reasonable efforts to ensure that Buyer receives a consistent supply of Yarns in the volume amounts that Buyerrequests and as may be mutually agreed upon with Supplier, in accordance with the terms of this Agreement For the avoidance of doubt, Buyer shall berelieved of the minimum volume commitment set forth in this Section 2.2 on any yarn volume that (a) Supplier does not have the capacity to meetBuyer’s requested orders, (b) Supplier otherwise cannot meet Buyer’s orders in a timely manner, or (c) Supplier is not qualified by Buyer to supply. 2.3 Designated Representatives. In order to facilitate the orderly and informed performance by the parties of their respective obligationshereunder, which include the timely provision of certain notices and other information from time to time, each of Buyer and Supplier has designatedcertain of its personnel as the person or persons to receive such information or to perform certain actions under this Agreement on its behalf. Thesepersonnel are referred to herein as “Designated Representatives” of such parties. A list of each of Buyer’s and Supplier’s respective DesignatedRepresentatives is set forth on Exhibit B attached hereto (each, a “Designated Representative”). Either party may make changes to its list by providingwritten notice thereof to the other party pursuant to Article 10.4. Moreover, each party may delegate certain routine or other communications duties tosubordinates who shall be authorized to communicate on behalf of the party with the other party, until notice of rescission of such authority is given tothe other party. ARTICLE III PRICES; TERMS OF PAYMENT 3.1 Purchase Price. For Yarns sold and delivered by Supplier hereunder, and subject to the terms and conditions of this Agreement, Buyer will payto Supplier a purchase price determined in accordance with Exhibits A-1, A-2, A-3, A-4, A-5 and A-6 attached hereto and incorporated herein by thisreference (the “Purchase Price”).  * Confidential treatment has been requested for the redacted portions of this agreement pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, asamended. The confidential, redacted portions have been provided separately to the U.S. Securities and Exchange Commission. (a) In accordance with Exhibits A-1, A-2, A-3, A-4, A-5 and A-6 the Purchase Price for the Yarns shall be [Confidential]* shown on ExhibitsA-1, A-2, A-3, A-4, A-5 and A-6 for all Yarns. For covered yarn Yarns that incorporate textured yarn, the Purchase Price shall equal [Confidential]* forsuch covered yarn Yarns. (b) Buyer shall pay any and all sales and use taxes levied in connection with the sale and delivery of the Contract Products hereunder, andnone of such taxes are included in the Purchase Price. Supplier will produce certain Yarns in El Salvador as well as in the United States. At the presenttime there are no known customs, duties or similar costs assessed by El Salvador and consequently, no such amounts are included in the Purchase Priceof Yarns set forth on Exhibits A-1, A-2, A-3, A-4, A-5 and A-6. In the event that governmental changes impose such costs at either location, then thePurchase Price of all affected Yarns shall be adjusted accordingly. Supplier will maintain warehouse space for finished goods in Puerto Rico to supplyBuyer’s needs there for the term of this Agreement. (c) As set forth on Exhibit A-7 hereto, Raw Material Price for the Yarns shall be adjusted from time to time, upon not less than then (10) dayswritten notice by Supplier to the Designated Representative of Buyer, based upon actual changes in the price of the raw materials in accordance withExhibit A-7; provided, however, that Supplier shall notify Buyer as soon as reasonably possible of any change in a Raw Material Price of which itbecomes aware. The Raw Material Price will be determined on a “first in, first out” basis of the raw materials purchased by Supplier for production ofYarns and the timing of the resultant Yarns Price adjustment will be made so that neither party is materially advantaged or disadvantaged. (d) The [Confidential]* set forth on Exhibit A-1, A-2, A-3, A-4, A-5 and A-6 shall continue in effect until adjusted in accordance with theparameters contained within Exhibit A-7. 3.2 Raw Materials (a) HBI may, from time to time at HBI’s option, direct Supplier to certain vendors in connection with the purchase of any raw materials otherthan spandex for production of the Yarns. In such event, Supplier will purchase such raw materials for the production of the Yarns from the suppliersspecified by HBI. To the extent possible and commercially reasonable, Supplier and Buyer shall arrange for Supplier to purchase such raw materials onterms that provide that the seller of such raw materials will bear all costs and risks involved in delivering those raw materials to Supplier’s facility,including, where applicable, any customs, duties, taxes and other  * Confidential treatment has been requested for the redacted portions of this agreement pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, asamended. The confidential, redacted portions have been provided separately to the U.S. Securities and Exchange Commission. charges. Buyer shall be entitled to any Buyer-negotiated rebates issued by such supplier with respect to such raw materials, and Supplier agrees toprovide such documentations with respect to purchases of such raw materials as Buyer may reasonably request in order to enable Buyer to calculate andapply for (and/or collect) such rebates, including, but not limited to, a monthly report detailing the supplier, product and fiber content information forall purchases hereunder. (b) From time to time, Supplier may inform Buyer of alternative sources of raw materials that could result in a reduction to the then-currentRaw Material Price. Supplier shall provide such information to Buyer about proposed alternative sources as Buyer may request, which may include,such samples of the proposed raw materials available from such source as the parties may agree. 3.3Payment Terms. Yarns sold to Buyer under this Agreement shall be sold on [Confidential]* Buyer’s manufacturing or distribution facility asmay be applicable, subject however to the following conditions: (a)Buyer shall pay all invoices in a timely manner; (b)Buyer maintains a corporate credit rating of B1 (Moody’s) and/or S&P B+; (c)no default occurs under any material term of Buyer’s debt agreements, including, but not limited to, its quarterly financial covenants; (d)there are no disclosures in Buyer’s SEC filings that Buyer likely will be in violation of any debt covenants; (e)Buyer pays all invoices via ACH; and (f)[Confidential]* If Buyer fails to meet any one or more of the foregoing conditions at any time during the continuation of this Agreement, then, a[Confidential]* will commence allowing both parties an opportunity to discuss any of the foregoing conditions. If Supplier is not satisfiedfollowing this review period, then, until such condition has been met by Buyer, payment terms shall be [Confidential]*. ARTICLE IV SUPPLIER MANAGED INVENTORY (“SMI”) 4.1 SMI Program. As mutually agreed between Buyer and Supplier regarding specific Yarns, Supplier shall manage its inventory of Yarnsavailable for purchase by Buyer in accordance with the terms and conditions of the Supplier Managed Inventory (“SMI”) Agreement, hereafter “SMI”(as may be modified by the Parties from time to time), the agreed upon form of which is attached hereto as designated Exhibit C and incorporated hereinby this reference.  * Confidential treatment has been requested for the redacted portions of this agreement pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, asamended. The confidential, redacted portions have been provided separately to the U.S. Securities and Exchange Commission. 4.2 Purchase Orders. Purchase Orders (which shall be considered as firm commitments) will be placed periodically by Buyer for its Yarns requirementsin a form substantially similar to the sample Purchase Order attached hereto as Exhibit E and incorporated herein by this reference. Each purchase orderwill include all Yarns that shall be purchased by Buyer during the applicable week. All Purchase Orders which meet the terms and conditions of thisAgreement shall be accepted by Supplier. 4.3 Resolution of Conflict with This Agreement. In case of a conflict between (a) on the one hand, any of the terms or conditions contained in anyPurchase Order, or in any acknowledgment by Supplier of any such Purchase Order, or in any standard term and/or condition of purchase or sale, or anyother form used by Supplier or Buyer, and (b) on the other hand, any of the terms or conditions set forth in this Agreement; then in any such instance theterms and conditions of this Agreement shall control. No additional terms or conditions of sale other than those contained in this Agreement shall beeffective to the purchase of Yarns unless approved in writing by a Designated Representative of both Supplier and Buyer. 4.4 Termination. The SMI shall terminate at such time as this Agreement terminates, subject to the SMI end of contract provisions and any otherobligations of either party that shall survive termination of the SMI or this Agreement. ARTICLE V DELIVERY 5.1 Shipping, Title and Risk of Loss. All Yarns manufactured hereunder shall be delivered to Buyer at Buyer’s shipping dock, unless othertransportation arrangements have been made by Buyer and Supplier. Title and risk of loss to all Yarns sold hereunder shall pass from Supplier to Buyer,free and clear of all claims, liens, charges, security interests, community property interests and encumbrances (collectively, “Liens”), upon such deliveryat Buyer’s shipping dock. 5.2 Loading and Handling. This provision deleted as shipping is [Confidential]*. 5.3 Modifications. Buyer may request modification or amendment of the shipping instructions at any time, with respect to any Yarns covered therebybut not yet shipped, by written notice to a Designated Representative of Supplier. Supplier shall use commercially reasonable efforts to comply withsuch request. ARTICLE VI REPRESENTATIONS AND WARRANTIES; COMPLIANCE WITH LAWS 6.1 Representations, Warranties and Agreements of Supplier. Supplier represents and warrants to and agrees with Buyer that:  (a) Supplier is a corporation duly organized, validly subsisting or existing and in good standing under the laws of the State of North Carolina.Supplier is duly qualified or licensed to conduct business and is in good standing under the laws of each jurisdiction where such qualification isrequired. Supplier has the full right, power and authority to enter into and perform its obligations under this Agreement and to conduct its business asnow conducted and hereafter contemplated to be conducted and is in compliance with its Articles of Incorporation and Bylaws; (b) Supplier has all necessary experience, qualifications, expertise, authority, licenses, permits and governmental approvals to enter into thisAgreement and to perform its obligations under this Agreement; (c) This Agreement has been duly executed and delivered by Supplier and constitutes a legal, valid and binding obligation of Supplier,enforceable against Supplier in accordance with its terms; (d) The execution, delivery and performance of this Agreement and all instruments and documents to be delivered by Supplier are withinSupplier’s corporate power and have been duly authorized by all necessary or proper action, including the consent of its Board of Directors, if required;do not and will not contravene any provisions of the Supplier’s Articles of Incorporation or Bylaws; (e) Supplier agrees that neither it nor its employees, contractors and/or subcontractors are in a dual or joint employment relationship withBuyer, regardless of the fact that manufacturing services are performed for, and Yarns produced from such services are provided to, Buyer under thisAgreement; (f) Supplier is and, at the time of each delivery of Yarns, will be solvent; (g) Supplier has and will continue to comply with the Gifts, Favors and Entertainment provision of the Guidelines (as defined in Section10.5, hereafter) unless otherwise approved by the consent of a Buyer Designated Representative; (h) Supplier is and shall continue to be in compliance with all known and applicable laws and standards governing Supplier’s conduct underthis Agreement; (i) Supplier is not under any obligation of a contractual or other nature to any Person that is inconsistent or in conflict with this Agreementor which would prevent, limit or impair in any way the performance by Supplier of its obligations hereunder; (j) Supplier will have the right to use for its own purposes, any ideas, methods, techniques, materials and information, including anyintellectual property rights therein, provided to or otherwise obtained by Supplier as a result of this  Agreement, without restriction, liability or obligation; (k) No Person other than Supplier or Supplier’s affiliates will manufacture Yarns or otherwise perform any material obligations affectingproduct performance under this Agreement without the express written consent of Buyer. 6.2 Representations, Warranties and Agreements Regarding the Yarns. Supplier represents and warrants to, and agrees with, Buyer that: (a) The Yarns shall conform to mutually agreed upon standards (the “Specifications”) as incorporated herein and attached hereto as ExhibitF. Supplier shall not modify or alter in any respect the mutually agreed upon Specifications, components or raw materials to be incorporated within theYarns without the prior authorization of Buyer. If Supplier and Buyer fail to reach mutually agreeable Specifications after meaningful discussion of theDesignated Representatives, either party may exercise its termination right pursuant to Article 8.3 below; (b) Subject only to the express terms of any consent or approval of Buyer’s Designated Representative, the Yarns shall be merchantable, ofgood material and workmanship, of first quality, compliant in all material respects with all applicable Buyer Specifications and free from faults anddefects; (c) All Yarns will be produced by Supplier or its affiliates at facilities owned by (or leased and operated by) Supplier or its affiliates asidentified in the attached Exhibit D unless otherwise agreed by Buyer in writing. Further, Supplier shall endeavor, in the best interest of delivering highquality yarn product to Buyer, to minimize, to the greatest extent possible, merge changes within the respective facilities in connection with theproduction of Yarns; (d) Supplier shall promptly furnish to Buyer all information and copies of documents (including, but not limited to, complaints, inquiries,test or inspection results and warnings) that Supplier receives from any governmental agency of any jurisdiction, and employee or agent of Supplierother than legal counsel; or any other Person or source that establishes that any of the Yarns may not conform to the requirements of the Specificationsor this Article VI; (e) Supplier and each of its suppliers and logistics providers has and follows, and will continue to have and follow, commercially reasonablequality and security procedures in order that the Yarns will comply with the foregoing warranties, representations and agreements; and, (f) Supplier is an independent expert with respect to the manufacturing services it performs, and Buyer is relying upon Supplier’s skill andjudgment to produce Yarns meeting Buyer’s specifications. Upon Buyer’s request, Supplier shall give Buyer certificates of compliance with applicablelaws, standards and orders as may be reasonably requested. The representations and warranties set forth in this Section will survive the Term of thisAgreement for a period of three (3)  years. Supplier’s warranties apply to any replacement Yarns that Supplier furnishes under this Agreement. 6.3 Notice of and Remedies for Non-Conforming Yarns. (a) All claims of non-conformity of Yarns to Buyer’s specifications shall be handled pursuant to the Supplier’s applicable fabric claims andyarn return policies governing such matters heretofore, copies of which are attached hereto and designated as Exhibits 6.3.1, Fabric ClaimPolicy and, 6.3.2, Yarn Return Policy (hereafter “policies”). Buyer acknowledges that it has a duty to inspect Yarns and packaging. However,all warranties, representations and conditions, statutory or otherwise and whether express or implied, shall survive inspection, acceptance andpayment by Buyer, in accordance with such policies. Supplier will provide Buyer with any updated or amended versions of the policies duringthe Term of this Agreement, provided that Buyer shall have no liability for any failure to comply with any amendment to the policies untilBuyer has had a reasonable opportunity to adjust its practices to conform to such amendments and provided further that all such amendmentsshall be commercially reasonable. (b) In the event that Buyer contends that the Yarns delivered do not conform to the requirements of this Agreement, Supplier will be entitledto inspect the allegedly non-conforming Yarns. Pursuant to the applicable Yarn Claims Policy, the parties will agree upon an acceptable solution to thematter, which may include a credit and/or a mutually acceptable return remedy for non-conforming Yarns. Buyer will not return Yarns to Supplierexcept with a return authorization, but any non-conforming Yarns returned pursuant to a return authorization will be returned at Supplier’s expense. Ifthe parties fail to reach a mutually agreeable solution, then the matter will be referred for dispute resolution in accordance with Section 10.22, hereafter. ARTICLEVII CONFIDENTIALITY 7.1 Confidentiality. (a) In addition to, and not in lieu of, any confidentiality agreements that the parties have executed during the term of Supplier’s relationshipwith Buyer (each a “Prior Confidentiality Agreement”), during the term of this Agreement, and for a period of three (3) years thereafter, the parties willmaintain all Confidential Information and Trade Secrets in strict confidence, and will not, except as otherwise permitted herein or expressly directed inwriting by the nondisclosing party, use, copy or disclose (or permit any unauthorized Person access to), any Trade Secrets or Confidential Information,whether learned or disclosed before or after the Effective Date and irrespective of the form of communication. In the event of any inconsistency betweenthis Agreement and any Prior Confidentiality Agreement, the terms of this  Agreement shall control with respect to all Confidential Information and Trade Secrets disclosed after the Effective Date or otherwise under thisAgreement. For purposes of this Agreement, “Confidential Information and Trade Secrets” shall mean any confidential and proprietary information ortrade secrets of either party that is disclosed pursuant to or to carry out the purposes of this Agreement including but not limited to software, computerdisks, technical information, data records, files, memoranda, reports, price lists, customer lists, drawings, plans, sketches, notes, documents and the like;provided that such information and trade secrets shall not be considered Confidential Information and Trade Secrets unless the disclosing party, at thetime such information or trade secrets are furnished to the nondisclosing party, designates the same in writing in a conspicuous fashion as “ConfidentialInformation” and/or “Trade Secrets.” (b) Notwithstanding the provisions of this Article VII, either party may disclose Confidential Information or Trade Secrets to the extent thatConfidential Information or Trade Secrets are required to be disclosed pursuant to a requirement of a governmental agency or law, provided that: (i) Thenondisclosing party has given the disclosing party prior written notice of such disclosure prior thereto and takes commercially reasonable steps tomaintain the confidentiality of the information disclosed (which steps do not include legal proceedings); and (ii) the disclosing party has been affordeda reasonable opportunity to contest the necessity, scope and conditions of such disclosure, unless the nondisclosing party does not have the reasonableability to afford such to the disclosing party before disclosure is required. (c) All software, computer disks, technical information, data records, files, memoranda, reports, price lists and customer lists, drawings, plans,sketches, notes, documents and the like (together with all copies and all computer files stored in any medium thereof) relating to the business of eitherparty, but excluding documents, reports and other data developed by Supplier, and all materials provided by Buyer in any form, format or medium(including computer files stored in any medium), which Supplier receives, has access to or comes in contact with in the course of, or as a result of, thisAgreement (collectively, the “Materials”) will, as between the parties hereto, remain the sole property of the applicable party. Upon termination of thisAgreement and thereafter upon demand of the disclosing party , the nondisclosing party will immediately return all such property of disclosing partyand delete or destroy any and all computer files and any other copies of the Materials in any form or format; provided that the nondisclosing party maymaintain a single copy of such Materials for legal purposes so long as such copy is not generally available to or accessible by anyone other than theexecutive officers of the nondisclosing party and/or their counsel. (d) Each party acknowledges and agrees that, in the event of a breach or threatened breach of any of the foregoing provisions, the parties willhave no adequate remedy in damages and, accordingly, will be entitled to injunctive relief against such breach or threatened breach in addition to anyother remedies available at law or in equity.  (e) The parties acknowledge that certain documents and other communications involving and/or by the parties herein may be subject toone or more claims of privilege (e.g., the attorney-client privilege, the US Internal Revenue Code §7525 tax advisory privilege, etc.). Each party shallbe solely responsible for managing the recognition, establishment and maintenance of these possible protections, and each party shall cooperate withreasonable written instructions regarding same, unless and to the extent such privilege is asserted in any manner adverse to the opposite party. (f) The parties shall, upon the termination of this Agreement and request thereafter by the disclosing party, return or destroy all writtenand/or tangible Confidential Information and Trade Secrets (including documents, drawings, records, specifications, copies and/or extracts thereof, andany Confidential Information or Trade Secrets maintained in any computer memory, storage media, electronic or similar form). Any such destructionshall be certified in writing to the nondisclosing party by an authorized officer supervising the same. Notwithstanding the above, either party maymaintain a single copy of such Confidential Information or Trade Secrets for legal purposes so long as such copy is maintained and protected to thesame degree as the confidential information and trade secrets of such party (but in any case no less than a commercially reasonable level of protection). (g) Buyer acknowledges that Supplier is a subsidiary of a publicly traded company and as such is bound by certain public disclosure rulesand regulations. Supplier has determined that this Agreement is a material contract and Supplier is required to file it with the Securities and ExchangeCommission. Supplier shall work cooperatively with Buyer in connection with any public filing requirements associated with this Agreement, providedhowever Supplier shall retain, in its sole discretion, the determination of the appropriate materials to be filed. ARTICLE VIII TERM; TERMINATION 8.1 Term. The term of this Agreement shall commence on the Effective Date hereof and continue for a period of three (3) years and ten (10) monthsthereafter, expiring on June 30, 2018, unless terminated as provided herein. 8.2 This provision intentionally deleted. 8.3 Termination for Cause. (a) Notwithstanding anything to the contrary herein and in addition to any other rights of termination set forth in this Agreement, Buyershall have the immediate right to terminate this Agreement, without any liability of Buyer to Supplier  for such termination, upon the occurrence of any one or more of the following events: (i) failure by Supplier to comply with Buyer’s quality control standards or the Specifications and customary textile industryquality control standards (after written notice from Buyer and reasonable opportunity to cure, not to exceed thirty (30) days from the date ofwritten notice from Buyer); (ii) Supplier’s failure to manufacture or deliver in conformity with all applicable warranties set forth in Article VI hereof the Yarnsordered by Buyer for manufacture or delivery pursuant to the production schedule and Purchase Orders issued in accordance with Article IVhereof (after written notice from Buyer and reasonable opportunity to cure, not to exceed forty five (45) days from the date of written noticefrom Buyer); (iii) an election by Buyer to terminate pursuant to a Force Majeure Event (as defined in Section 10.9), if said Force Majeure Eventcontinues for more than one hundred twenty (120) days; (iv) the repudiation of or threatened repudiation of the pricing terms set forth in this Agreement by Supplier, whether in writing orby practice by any Designated Representative of Supplier (after written notice from Buyer and reasonable opportunity to cure, not to exceedsixty (60) days from the date of written notice from Buyer; (v) the breach by Supplier of any material term of this Agreement, provided that, if any such breach can reasonably be cured withinsixty (60) days, Buyer shall have given written notice of such breach to Supplier pursuant to Section 10.4 of this Agreement, and Supplier shallhave failed to cure such breach within sixty (60) days after such notice; (vi) dishonesty, malfeasance, fraud or misconduct in the performance of Supplier’s obligations under this Agreement; (vii) noncompliance with any terms or provisions of the Guidelines, as defined in Section 10.5 below, during the Term. Buyer willprovide Supplier with any updated or amended versions of the Guidelines during the Term. Supplier shall not be deemed to have breached theGuidelines for any failure to comply with any reasonable amendment to the Guidelines until Supplier has had reasonable time (not to exceedninety (90) days from the date of notice regarding the amended Guidelines) to adjust its practices to conform to such amendments, providedthat if Supplier cannot comply with any modifications to the Guidelines or if such modification is unreasonable in Supplier’s businessjudgment, then the matter shall be referred for dispute resolution under the procedure set forth in Section 10.22 hereafter;  * Confidential treatment has been requested for the redacted portions of this agreement pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, asamended. The confidential, redacted portions have been provided separately to the U.S. Securities and Exchange Commission. (viii) the insolvency of Supplier or if Supplier avails itself of the laws of any jurisdiction for the protection of debtors, including,without limitation, the appointment of a receiver or the like, a moratorium on payment of debt, a petition, voluntary or involuntary, inbankruptcy or the like filed by or against Supplier that is not dismissed within forty five (45) days of filing, or an assignment of all or anyportion of the assets of Supplier for the benefit of its creditors. Further, in the event of Supplier insolvency, Supplier affirmatively agrees to useits commercially reasonable efforts to work cooperatively with its lenders and other creditors as necessary in order to secure on behalf of Buyera right of first refusal in connection with the sale, liquidation or other disposition of assets; and, (ix) except as permitted herein, any attempt by Supplier to assign or otherwise transfer to any third party all or any part ofSupplier’s rights under this Agreement, or to delegate or subcontract all or any part of Supplier’s obligations under this Agreement, without theprior written consent of Buyer, other than assignment or other delegation of such portion of this Agreement to a Central American affiliate, ascontemplated by the parties. (b) Notwithstanding any other provision to the contrary in this Agreement, Supplier shall have the right to immediately terminate thisAgreement upon the occurrence of any one or more of the following events: (i) Nonpayment by Buyer of undisputed amounts due to Supplier pursuant to Article III Section 3.1 of this Agreement (after writtennotice from Supplier and reasonable opportunity to cure, not to exceed [Confidential]* from the date of written notice from Supplier); (ii) the breach by Buyer of any material term of this Agreement, provided that Supplier shall have given written notice of suchbreach to Buyer pursuant to Article X Section 10.4 of this Agreement, and Buyer shall have failed to cure such breach within sixty (60) daysafter such notice; and, (iii) the insolvency of Buyer or if Buyer avails itself of the laws of any jurisdiction for the protection of debtors, including, withoutlimitation, the appointment of a receiver or the like, a moratorium on payment of debt, a petition, voluntary or involuntary, in bankruptcy orthe like filed by or against Supplier that is not dismissed within forty five (45) days of filing, or an assignment of all or any portion of the assetsof Buyer for the benefit of its creditors. 8.4 Effect. Except as expressly provided herein, notwithstanding termination of this Agreement, the right of termination provided in Article VIIISection 8.3 is not exclusive of any remedies to which either party may otherwise be entitled at law or in  equity in the event of a breach of this Agreement. Each party shall remain liable to the other party for any indebtedness or other liability or obligationtheretofore arising under this Agreement. The terms and conditions of this Agreement shall apply to any Purchase Orders, that is consistent with pastpractice and compliant with the terms of this Agreement, issued before any such expiration or termination. The terms of this Agreement that would, bytheir nature, survive termination, including, without limitation, the provisions of Articles VI, VII and IX and the covenants, indemnities, representationsand warranties made by the parties therein, shall survive the expiration or termination of this Agreement for any reason whatsoever and shall remain infull force and effect for a period of three (3) years thereafter, except as otherwise expressly provided herein or therein. ARTICLE IX INDEMNIFICATION 9.1 Indemnification by Supplier. With acknowledgment that terms and conditions of this Section 9.1 have been expressly bargained for and are anessential part of this Agreement and any Purchase Order submitted by Buyer for Yarns, and in consideration of any and all purchases hereunder, hereinand hereafter made by Buyer from Supplier or from any Affiliates of Supplier, and by accepting a Purchase Order, Supplier agrees that it shallindemnify, hold harmless and defend (or in Buyer’s sole discretion, fund the cost of defending) Buyer as well as Buyer’s directors, officers, employees,agents and shareholders (collectively called “Buyer Indemnitees”) from and against any and all compensatory liabilities, damages, losses, claims,lawsuits, proceedings, appeals, assessments, fines, actions, causes of action, decrees, judgments, settlements, court orders, investigations, civil penaltiesand/or demands of any kind, costs (including attorneys’ fees and associated expenses), whether compensatory, exemplary, punitive, special,consequential and/or incidental (collectively, “Claims”, and each, a “Claim”), brought against or incurred by any Buyer Indemnitee because of (i) anydeath, injury or damage to any Person or property (including Buyer Indemnities’ property and employees) caused by Supplier or (ii) any claim that anyof the Yarns infringe or misappropriate any patent, trademark, copyright or other intellectual property right, anywhere in the world, except to the extentthat the Yarns infringe because the infringement or misappropriation is a direct result of the Specifications or instructions provided by Buyer toSupplier. Provided however, excepting fraud, gross negligence or willful misconduct attributable to Supplier, Supplier’s duty of indemnity shall belimited to the maximum sum of $2,000,000.00. Each Buyer Indemnitee shall have the right to participate with Supplier in the defense of any Claim,which participation shall be at the Buyer Indemnities’ expense, except that if Supplier shall have failed, upon the Buyer Indemnities’ request, to assumethe defense or to engage counsel reasonably satisfactory to the Buyer Indemnitee, then Supplier shall reimburse the Buyer Indemnitee, on a monthlybasis, for all reasonable costs and expenses, including reasonable attorneys’ fees, that the Buyer Indemnitee incurs in connection with the defense.Supplier shall not be required to indemnify any Buyer  Indemnitee against or hold any Supplier Indemnitee harmless from Buyer’s gross negligence or willful misconduct. 9.2 Indemnification by Buyer. With acknowledgment that terms and conditions of this Section 9.2 have been expressly bargained for and are anessential part of this Agreement and any performance thereunder, any acceptance or provision of goods under any Purchase Order submitted by Buyerfor Yarns, and in consideration of any and all sales hereunder, herein and hereafter made to Buyer by Supplier or any Affiliates of Supplier, and byaccepting any and all such goods, Buyer shall indemnify, hold harmless and defend (or in Supplier’s sole discretion, fund the cost of defending)Supplier as well as Supplier’s directors, officers, employees, agents and shareholders (collectively, with Supplier, called “Supplier Indemnitees”) fromand against any Claims brought against or incurred by any Supplier Indemnitee because of (i) any death, injury or damage to any Person or property(including Supplier Indemnities’ property and employees) caused by Buyer; or (ii) any claim that any of the Yarns infringe or misappropriate anypatent, trademark, copyright or other intellectual property right, anywhere in the world because the infringement or misappropriation is a direct result ofthe Specifications or instructions provided by Buyer to Supplier. Provided however, excepting fraud, gross negligence or willful misconductattributable to Buyer, Buyer’s duty of indemnity shall be limited to the maximum sum of $2,000,000.00. Each Supplier Indemnitee shall have the rightto participate with Buyer in the defense of any Claim, which participation shall be at Supplier Indemnities’ expense, except that if Buyer shall havefailed, upon the Supplier Indemnities’ request, to assume the defense or to engage counsel reasonably satisfactory to Supplier Indemnitee, then Buyershall reimburse Supplier Indemnitee, on a monthly basis, for all reasonable costs and expenses, including reasonable attorneys’ fees, that the SupplierIndemnitee incurs in connection with the defense. Buyer shall not be required to indemnify any Supplier Indemnitee against or hold any SupplierIndemnitee harmless from Supplier’s gross negligence or willful misconduct. ARTICLE X GENERAL 10.1 Merger Clause. This Agreement, together with any other agreement, document or instrument executed and delivered in connection with thisAgreement that makes specific reference to this Agreement, contains the final, complete and exclusive statement of the agreement between the partieswith respect to the transactions contemplated herein, and all prior or contemporaneous written or oral agreements with respect to the subject matterhereof are merged herein. 10.2 Amendments and Modifications. No change, amendment, qualification or cancellation hereof shall be effective unless in writing that expresslyreferences this Agreement and such purpose and is executed by both parties to the same instrument. 10.3 Benefits and Binding Effect; Permitted Assigns. Buyer may assign any of  its rights or delegate any of its obligations under this Agreement, whether by operation of law or otherwise, without the prior consent of Supplier,provided Buyer shall remain liable for all Buyer obligations under this Agreement. Supplier shall not assign any of its rights, nor delegate any of itsduties, under this Agreement to a competitor of Buyer without the prior written consent of Buyer, which consent may be granted or withheld in Buyer’ssole and absolute discretion Provided however, nothing in this Agreement shall prevent Supplier from assigning or factoring any invoices issuedhereunder to factors or from pledging any receivables hereunder to lenders of Supplier. Any attempted prohibited transfer, assignment or sublicense ofthis Agreement by Supplier without Buyer’s prior written consent shall be a breach of this Agreement and shall entitle the Buyer to terminate thisAgreement under Section 8.3(a) or (b), as applicable. This Agreement will be binding upon and will inure to the benefit of Supplier, Buyer and theirrespective successors and permitted assigns. Furthermore, in the event that Supplier is involved in a Change of Control (as defined below), such anevent shall be considered an assignment of this Agreement subject to the written consent of Buyer. “Change of Control” means a stock sale,reorganization, merger, consolidation or other form of corporate transaction or series of transactions, in each case, with respect to which Persons whowere the shareholders of Supplier immediately prior to such stock sale, reorganization, merger or consolidation or other transaction do not, immediatelythereafter, own more than fifty percent (50%) of the combined voting power entitled to vote generally in the election of directors of the sold,reorganized, merged or consolidated company’s then outstanding voting securities, in substantially the same proportions as their ownershipimmediately prior to such stock sale, reorganization, merger, consolidation or other transaction. 10.4 Notices. All notices and demands hereunder ,but excluding communications in the ordinary course of business between the parties’ DesignatedRepresentatives, must be in writing and shall be deemed to have been duly given (a) when personally delivered, (b) two (2) Business Days after beingsent to the recipient by reputable overnight courier service (charges prepaid), (c) when sent via facsimile transmission with telephone confirmation, ifsent during the hours of 9:00 A.M. and 5:00 P.M. Eastern Time on a Business Day or, if sent at any other time, at 9:00 A.M. on the next Business Daythereafter, (d) when sent via electronic mail with telephone confirmation, if sent during the hours of 9:00 A.M. and 5:00 P.M. on a Business Day or, ifsent at any other time, at 9:00 A.M. on the next Business Day thereafter, or (e) on the date of delivery shown on the return receipt when placed in theUnited States Mail and forwarded by Registered or Certified Mail, return receipt requested, postage prepaid, addressed to the party to whom such noticeis being given at the following addresses: If to Buyer: Hanesbrands Inc.1000 East Hanes Mill RoadWinston-Salem, North Carolina 27105Attn: Gerald EvansTelephone: (336) 519-4780  Telecopy: (336) 519-0769Electronic Mail: gerald.evans@hanes.com With a convenience copy (which shall not constitute or invalidate notice to Buyer) to: Hanesbrands Inc. – Legal Department1000 East Hanes Mill RoadWinston-Salem, North Carolina 27105Attn: Joia M. JohnsonTelecopy: (336) 519-6447Electronic Mail: joia.jonhson@hanes.com If to Supplier: Unifi Manufacturing, Inc.7201 West Friendly AvenueGreensboro, North Carolina 27410Attn: Roger BerrierTelephone: 336-316-5672Telecopy: 336-316-5527Electronic Mail: rberrier@unifi.com With a convenience copy (which shall not constitute or invalidate notice to Supplier) to: Unifi Manufacturing, Inc.–Legal Department7201 West Friendly AvenueGreensboro, North Carolina 27410Attn: Ben Sirmons, Assistant General CounselTelecopy: (336) 856-4364Electronic Mail: bsirmons@unifi.com Notwithstanding the foregoing, in any case where this Agreement requires notice to a Designated Representative of Buyer or Supplier, such notice shallbe sufficient when and only if given to such Designated Representative at the address set forth above. Any party may change the address(es) to whichnotices to it are to be sent by giving notice of such change to the other parties in accordance with this Section. 10.5 Hanesbrands Global Standards For Suppliers. Buyer shall provide Supplier with a copy of Hanesbrands Global Standards for Suppliers (the“Guidelines”) for its use as well as review and use by its vendors or manufacturers. Buyer shall also provide Supplier with a sufficient number of copiesof the Guidelines in the local language(s) of all applicable management and employees producing the Yarns. Supplier hereby represents warrants andcovenants that it (a) has reviewed and understands the Guidelines provided to Supplier by Buyer and designated “Copyright 2006, and (b) Supplier ispresently in compliance and will remain in compliance with all terms and provisions of the Guidelines during the Term of this Agreement. Buyer will  provide Supplier with any updated or amended versions of the Guidelines during the Term of this Agreement, provided that Supplier shall have noliability for any failure to comply with any amendment to the Guidelines until Supplier has had a reasonable opportunity to adjust its practices toconform to such .amendments, provided that if Supplier cannot comply with any modifications to the Guidelines or if such modification isunreasonable in Supplier’s business judgment, then the matter shall be referred for dispute resolution under the procedure set forth in Section 10.22hereafter;. 10.6 Labor Obligations of Supplier to Supplier’s Personnel. Both parties acknowledge and agree that the labor responsibility of the employees,agents and subcontractors of each party belong to such party, who shall absorb all the liability, rights and obligations, being labor, civil and criminalthat are an outcome of the operation of the party, if any. The parties agree that if any of one party’s personnel is physically injured, that party will havethe exclusive responsibility of covering the expenses of its personnel unless such injury is caused by the other party or is subject to indemnificationunder Article IX. Abiding by the general policies of Buyer, Supplier commits not to hire any person of less than 18 years of age, to carry out anyservices of this Agreement. 10.7 Waiver. No failure on the part of any party hereto to exercise, and no delay in exercising, any right, power or remedy hereunder shall operate asa waiver thereof nor shall any single or partial exercise of any right, power or remedy by any such party preclude any other or further exercise thereof orthe exercise of any other right, power or remedy. No express waiver or assent by any party hereto to any breach of or default in any term or condition ofthis Agreement shall constitute a waiver of or an assent to any succeeding breach of or default in the same or any other term or condition hereof. 10.8 Relationship of Parties. (a) Supplier is and shall remain an independent contractor, and this Agreement is neither intended, nor shall it be construed, to establish therelationship of employer and employee between Supplier and Buyer. Neither party assumes any obligation or responsibility of any kind ornature whatsoever toward the other, and neither party has any expectation of, or understanding with, the other party except as expressly setforth herein. Neither party shall have the authority to bind the other in any manner whatsoever without the express prior written approval ofsuch party. Neither party shall have any other rights, power, and/or duties except as provided herein. Any action by a party made without suchprior approval is at the sole risk and liability of such party and it shall, in such cases, be individually responsible for the payment of any andall sums attributed or charged to the other party on account of any action by a party not earlier authorized in writing by the other party. Eachparty shall be responsible for (i) complying with all worker's compensation, employer's liability, and other federal, state, county and municipallaws, ordinances, rules and regulations required of an employer performing the obligations as herein contemplated, and (ii) shall make allreports and remit all  withholdings or other deductions from the compensation paid to its personnel, if any, as may be required by any federal, state, county andmunicipal laws, ordinances, rules and regulations. (b) Neither party shall, without first obtaining the written consent of the other party, in any manner advertise, publicize, publish or otherwisedraw attention to the fact that Supplier has furnished or contracted to furnish the Buyer services, or disclose any of the details connected withthis Agreement to any third party, except as required for procurement of products and services for use in the performance of this Agreement,and then only after the substance of this prohibition is inserted in its orders and made binding upon any third party. The terms of this Section10.8 shall survive the termination or expiration of this Agreement for a period of three (3) years. Notwithstanding the above, either party: (i)may disclose this Agreement and the terms hereof to its accountants and attorneys; (ii) may make any disclosure that it in good faith believes isrequired by law, regulation, court order or subpoena, provided that prior to making such disclosure, such party will provide the other partynotice of the required disclosure so that such party can, at its sole expense, seek a protective order to protect the confidentiality of thisAgreement or a ruling or determination that such disclosure is not required; and (iv) may disclose this Agreement and terms hereof to anyparent or subsidiary of the party, to any lender or potential lender of the party or its parents or subsidiaries, or to any potential purchaser of thestock or assets of such party or any parent of the party; provided that in the case of disclosure under this clause (iii), the party to whomdisclosure is made is advised of the restrictions on disclosure contained in this Section and agrees to abide by such restrictions. 10.9 Force Majeure Event. Neither Supplier nor Buyer shall be liable to the other for failure or delay in performing its obligations hereunder to theextent that such failure or delay is due to war, fire, flood, earthquake, strike, shortages of raw materials, riot, condemnation act of a court of competentjurisdiction, trade restraint act by governmental authority, act of God, act of terrorism, or other contingencies (a) that are beyond the reasonable controland not arising out of the fault of the affected party, and (b) with respect to which the affected party has been unable to overcome the impact thereof bythe exercise of due diligence and reasonable efforts, skill and care, including through expenditure of reasonable sums of money (each, a “Force MajeureEvent”). The cause of any such failure or delay shall be remedied by the affected party to the extent reasonably possible without undue delay, andperformance shall be resumed at the earliest practical time after cessation of such failure or delay; provided, however, that neither Supplier nor Buyershall be required to settle a labor dispute against its own best judgment. Immediately upon notice of a Force Majeure Event affecting Supplier, Buyershall have the right to procure Yarn from alternative suppliers until such Force Majeure Event has abated and Supplier gives notice to Buyer that it isagain able to supply Yarn to Buyer in accordance with the terms of this Agreement. 10.10 This provision intentionally deleted.  10.11 Further Documents and Actions. The parties hereby agree to take such further actions, and to execute and deliver each to the other such furtherdocuments, as may be necessary or convenient from time to time to more effectively carry out the intent and purposes of this Agreement and to establishand protect the rights and remedies created or intended to be created hereunder. 10.12 No Strict Construction. The parties hereto have participated jointly in the negotiation and drafting of this Agreement. If an ambiguity orquestion of intent or interpretation arises, this Agreement shall be construed as if drafted jointly by the parties hereto, and no presumption or burden ofproof shall arise favoring or disfavoring any party by virtue of the authorship of any of the provisions of this Agreement. 10.13 This provision intentionally deleted. 10.14 Captions. The captions are for convenience of reference only and shall not be construed as a part of this Agreement. 10.15 Governing Law. This Agreement, including its validity, interpretation and performance, shall be governed by the laws of the State of NorthCarolina without respect to the conflict of law principles thereof, and the parties acknowledge and consent to the exclusive personal jurisdiction offederal and state courts sitting in the State of North Carolina for the adjudication of any dispute arising hereunder. Service regarding any dispute arisingout of this Agreement may be by certified mail return receipt requested or by personal service or in such other manner as may be permissible under therules of the applicable court, provided a reasonable time for appearance is allowed. 10.16 Exhibits. All the Exhibits to this Agreement are incorporated herein by reference and shall be deemed to be a part of this Agreement for allpurposes. 10.17 Severability. The invalidity or unenforceability of any one or more phrases, clauses, sentences, or provisions of this Agreement shall not affectthe validity or enforceability of the remaining portions of this Agreement or any part thereof, unless the effect thereof would constitute a failure ofconsideration for a substantial benefit for which the party adversely affected thereby has bargained herein. 10.18 Insurance. Supplier will maintain the insurance coverages and comply with all requirements set forth in Exhibit 10.18, attached hereto andincorporated herein by reference. Such policies shall name “Hanesbrands Inc. and any and all subsidiaries” as additional insureds with respect tocommercial general liability insurance and automobile liability insurance. A waiver of subrogation shall be provided to Buyer and any of itssubsidiaries, with respect to any commercial general liability and automobile liability coverages. Supplier will submit proof of the insurance set forth inExhibit 10.18 to Buyer upon request.  10.19 Publicity. Unless otherwise required by law, neither party shall, without first obtaining the written consent of the other party, in any manneradvertise, publicize, publish or otherwise draw attention to the fact that the parties have entered into this Agreement, the terms of the Agreement or thatpursuant to this Agreement Supplier shall furnish to Buyer the Yarns. Additionally, neither party shall discuss the other party’s business with any newsreporter (newspaper, magazine, internet, television or radio) either on or off the record, or in speaking at any public occasion or before any audiencedisclose or refer to the parties’ relationship. 10.20 Counterparts. This Agreement may be executed in any number of counterparts, each of which shall constitute an original but all of which shallconstitute one and the same instrument. 10.21 Time is of the Essence. The parties agree that time is of the essence in the performance of this Agreement. Supplier represents that it hassufficient resources so that the work can be performed within commercially reasonable the time frames (which may vary, depending upon the nature ofthe matter) or as otherwise agreed by the parties. 10.22 Dispute Resolution. The parties agree to attempt to resolve all disputes by consultation between the Designated Representatives. If any disputeis not resolved in this manner within thirty (30) days of notice thereof by one Representative to the other, then either party may request the matter beresolved by binding arbitration in the City of Winston Salem, North Carolina under the Rules of the General Arbitration Counsel of the Textile andApparel Industries. Judgment upon the award rendered may be entered by any Court having jurisdiction thereof. 10.23 Buyer’s Standard Terms Of Purchase. The Buyer’s Standard Terms Of Purchase shall not apply to this Agreement, the purchase and/or sale ofYarns or any other transactions arising out of or as a consequence of this Agreement. Balance of page intentionally blank  IN WITNESS WHEREOF, the parties have caused this Agreement to be executed by their respective duly authorized representatives, as ofthe day and year first written above. Hanesbrands Inc.Unifi Manufacturing, Inc. /s/ GERALD EVANS/s/ R. ROGER BERRIERBy: Gerald EvansBy: Roger BerrierTitle: Chief Operating OfficerTitle: President and Chief Operating Officer  * Confidential treatment has been requested for the redacted portions of this agreement pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, asamended. The confidential, redacted portions have been provided separately to the U.S. Securities and Exchange Commission. EXHIBIT A-7 Price Adjustment Methodology 1. Current prices are set forth on Exhibit A-1, A-2, A-3, A-4, A-5 and A-6. Adjustments to pricing shall occur as follows: In [Confidential]* asshown on Exhibits A-1, A-2, A-3, A-4, A-5, A-6 ; [Confidential]* – Supplier’s [Confidential]* shall be [Confidential]* Buyer with[Confidential]*. [Confidential]*. The [Confidential]* for each item listed on Exhibits A-1, A-2, A-3, A-4, A-5, A-6 shall be [Confidential]* thatSupplier’s [Confidential]* to every product listed in Exhibits A-1, A-2, A-3, A-4, A-5, A-6. [Confidential]* – [Confidential]*. Buyer may requesta third party to review and validate Supplier’s actual increases in [Confidential]* for [Confidential]*. If prices change, Buyer must notify Supplier as soon as possible. Supplier will then recalculate pricing on Exhibits A-1 through A-6, accordingto the Price Adjustment Methodology provided in Exhibit A-8. Buyer is entitled to [Confidential]* it may [Confidential]* for itself [Confidential]*. Supplier shall provide monthly reports for suchcalculations. If raw material designations change from those specified on Exhibit A-1, A-2, A-3, A-4, A-5 and/or A-6 and raw material prices change, Supplierwill pass through those changes to Buyer. 2.Textured Poly Yarns or Yarns containing polyester a.Price Adjustment Data for textured polyester products and other items containing polyester - The [Confidential]* will be used in determining polymer cost, using the following formula: 86.5% PTA (purified terathalic acid) and 35%MEG (mono ethylene glycol), the base ingredients of polyester polymer. ■The MEG price shall be the lowest [Confidential]* contract price for the given month. ■The PTA Price shall be the [Confidential]* price for such month. b. Exhibit A-8 shall be used to calculate the polyester price adjustments. c.Initial contract prices will be [Confidential]* and at that time, the [Confidential]* methodology described in Exhibit A-8 will be putinto effect comparing the [Confidential]* with [Confidential]*  * Confidential treatment has been requested for the redacted portions of this agreement pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, asamended. The confidential, redacted portions have been provided separately to the U.S. Securities and Exchange Commission. polymer price. The [Confidential]* methodology will be followed for [Confidential]* and throughout the [Confidential]*. 3.Textured Nylon Yarns or Yarns containing Nylon– Pass through providing support from Supplier upon request. a.All price adjustments will be passed through [Confidential]*. An updated price list will be supplied by Supplier to Buyer when theprices are updated. b.For items using [Confidential]*, any adjustments will be passed through to Buyer. c.For items not containing [Confidential]*, Supplier will be the benchmark on nylon fiber market price and will provide pass throughbased upon market price. Buyer may accept Supplier’s price, provide an alternate sourcing strategy or provide data for Supplier tonegotiate pricing. 4. Flat Nylon – Pass through providing support from Supplier’s and a third party upon request. a.All price adjustments will be passed through [Confidential]*. An updated price list will be supplied by Supplier to Buyer when theprices are updated. b.For items with flat yarns, Supplier will pass through any price adjustments to Buyer. Supplier will provide documentation in the form ofthird party verification, upon request, supporting the amount of the adjustment. 5. Spandex – Pass through providing support from Supplier’s and a third party upon request. a.All price adjustments will be passed through [Confidential]*. An updated price list will be supplied by Seller to Buyer when the pricesare updated. b.For item with spandex, Supplier will pass through any price adjustments to Buyer. Supplier will provide documentation in the form ofthird party verification, upon request, supporting the amount of the adjustment. c.Initial contract prices for [Confidential]* will be held until [Confidential]*. Beginning [Confidential]* prices will adjust to[Confidential]* and the pass through methodology will be followed throughout the remainder of the Agreement. d.The Supplier will retain the rights to select the supply source of all spandex items for the length of the contract. The Supplier willprovide [Confidential]* to the buyer in the following amounts for the specified spandex deniers below. The exclusion from[Confidential]* will be any specialty spandex products.  * Confidential treatment has been requested for the redacted portions of this agreement pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, asamended. The confidential, redacted portions have been provided separately to the U.S. Securities and Exchange Commission. i.15 denier = [Confidential]* ii.20 denier = [Confidential]* iii.30 denier = [Confidential]* iv.140 denier = [Confidential]* 6. Freight a.Freight price will be added to quoted prices on Appendix A-1 through A-6 based upon current freight quotes. b.El Salvador – Socks – Every quarter, Unifi will provide an average monthly [Confidential]* freight cost from the previous 3 monthsbased on (i) actual invoices of freight from Supplier’s United States distribution facilities to Supplier’s El Salvador warehouse facilityplus (ii) a freight fee of [Confidential]* from Unifi’s El Salvador warehouse facility to Buyer’s manufacturing facility. This average costwill become the new [Confidential]* freight cost for the next quarter. c.Mt. Airy – [Confidential]* d.Woolwine – [Confidential]* e.Clarksville – [Confidential]* f.Puerto Rico – Every quarter, Supplier will provide an average monthly [Confidential]* freight cost from the previous three (3) monthsbased upon: (i) actual invoices of freight from Supplier’s United States distribution facilities to the Supplier’s Puerto Rico warehouse facility; plus (ii) actual invoices from Supplier’s Puerto Rico warehouse facility including warehousing costs and freight costs to Buyer’smanufacturing facilities; plus (iii) [Confidential]* This average [Confidential]* from the [Confidential]* will be divided by the pounds of products shipped out of the Supplier’s PuertoRican warehouse to the Buyer’s manufacturing facilities on a monthly basis. This average cost will become the new [Confidential]*cost, which shall be added to the freight cost and warehousing cost for the next quarter. g.Winston Salem - [Confidential]* h.Bonaventure (La Libertad) – will be charged the same freight rate that (6b) El Salvador Socks is charged [Confidential]*. i.Honduras – Shipments to the country of Honduras will be charged the same freight rate that (6b) El Salvador Socks is charged[Confidential]*. j.All freight is based upon full truckloads. k.Samples - will add freight price to product price.  * Confidential treatment has been requested for the redacted portions of this agreement pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, asamended. The confidential, redacted portions have been provided separately to the U.S. Securities and Exchange Commission. l.LTL shipments – price will be adjusted based upon supplied quote. m. Air freight – new orders to meet Buyer’s deadlines or increase in demand will be the responsibility of the Buyer. n. With respect to 6(b) and 6(f) above, freight prices will adjust based upon supplied quotes. Passed through either way, if adjusted price =[Confidential]*.  * Confidential treatment has been requested for the redacted portions of this agreement pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, asamended. The confidential, redacted portions have been provided separately to the U.S. Securities and Exchange Commission. EXHIBIT A-8 Textured Polyester or yarns containing polyester 1.POLYESTER PRICING 1.1The price list shown in pricing Appendix A-4, A-5 attached shows initial prices charged to Buyer. As prices are adjusted the list in Appendix A-4and A-5 will be updated by the Supplier. The [Confidential]* agreement shown in Exhibit A below will determine price adjustments as required. 1.2Prices shall be treated as confidential by Buyer and Supplier. POLYESTER ITEMS ONLY 1.List Price – Supplier will provide a list of current prices paid by Buyer to Supplier. 2.[Confidential]* between Buyer and Supplier will be reviewed at the end of [Confidential]*. An updated price list will be supplied by Supplier toBuyer [Confidential]* when the prices are updated. 3.[Confidential]* a.[Confidential]* is the polymer price established as of [Confidential]*. b.[Confidential]* is as follows and [Confidential]* i.[PTA monthly average x 0.865] + [MEG monthly average x 0.35] = [Confidential]* = [Confidential]* ii.example [Confidential]* average [Confidential]* [Confidential]* c.Current [Confidential]* ([Confidential]* average) [Confidential]* price calculated from b. above (in [Confidential]* only) is comparedto the [Confidential]* average to determine if all items prices are adjusted up or down.  * Confidential treatment has been requested for the redacted portions of this agreement pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, asamended. The confidential, redacted portions have been provided separately to the U.S. Securities and Exchange Commission. i.example [Confidential]* adjustment (from b. above) [Confidential]* minus [Confidential]* All prices will be increased [Confidential]*. d.Price updates are effective on the first [Confidential]* following [Confidential]* end [Confidential]*. i.Example [Confidential]* price adjustment (from b. and c. above) All prices increased [Confidential]*, effective [Confidential]*. e.Raw materials increases caused by extreme circumstances such as hurricanes, market crashes, earthquakes, etc., will incur immediateadjustments outside of the [Confidential]* agreement. f.Total Price = [Confidential]* + [Confidential]*.  EXHIBIT B Designated Representatives Hanesbrands, Inc. Gerald EvansChief Operating Officer1000 East Hanes Mill RoadWinston-Salem, North Carolina 27105Telephone: (336) 519-4780Telecopy: (336) 519-0769Electronic Mail: gerald.evans@hanes.com Unifi Manufacturing, Inc. Roger Berrier President and Chief Operating Officer7201 West Friendly AvenueGreensboro, NC 27410Telephone: (336) 316-5672Telecopy: (336) 316-5527Electronic Mail: rberrier@unifi.com  EXHIBIT C SUPPLIER MANAGED INVENTORY (“SMI”) AGREEMENT Supplier Managed Inventory Agreement This Supplier Managed Inventory Agreement (this “Agreement”) is made and entered into as of the 1st day of September, 2014 (the “Effective Date”),by and between Hanesbrands Inc., a Maryland corporation with a principal place of business located at 1000 E. Hanes Mill Rd., Winston-Salem, N.C.(“HBI” or “Buyer”), and Unifi Manufacturing, Inc., a North Carolina corporation with a principal place of business located at 7201 West FriendlyAvenue, Greensboro, North Carolina 27410 (“Supplier” or “UMI”). RECITALS A. HBI and Supplier have negotiated mutually beneficial arrangements for Supplier to manufacture for HBI, and for HBI to procure from Supplier,certain of HBI’s requirements for the yarns used by HBI and certain of its affiliates(which may include certain business operations or entities controlled orowned via the shareholdings of Buyer such as its subsidiaries, branches, joint ventures, holding companies and similarly situated operating units), in suchquantities as set out in that certain Yarn Purchase Agreement, dated as of September 1, 2014 (the “Supply Agreement”). B. HBI and certain of its affiliates, (which may include certain business operations or entities controlled or owned via the shareholdings of Buyer suchas its subsidiaries, branches, joint ventures, holding companies and similarly situated operating units), use the Yarns in the manufacture of apparelproducts and historically have purchased certain of such Yarns from Supplier. C. The Supplier Managed Inventory (“SMI”) program is an initiative that HBI is implementing that will allow UMI as an HBI supplier to partner withHBI such that UMI will manage some components of HBI’s raw material supply chain inventory. NOW, THEREFORE, for and in consideration of the premises and the mutual covenants and agreements contained herein, and other good and valuableconsideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows: 1. Supplier hereby acknowledges and will use commercially reasonable efforts to comply with the following as the primary objectives of the SMIprogram: (a) The provision by Supplier of one hundred percent (100%) service levels to HBI and its businesses in connection with the manufacture anddelivery of the yarns or products subject to the Supply Agreement (the “Products”); (b) The provision of the Products to any designated HBImanufacturing facility (each, a “Facility”) by Supplier only as required to meet production demands, resulting in minimal on-site storage by HBI; and(c) the optimization of Supplier planning and production functions to meet Facility consumption rates and maximize its production runs.  * Confidential treatment has been requested for the redacted portions of this agreement pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, asamended. The confidential, redacted portions have been provided separately to the U.S. Securities and Exchange Commission. 2. The SMI program will include only the Products that are agreed upon between the parties to be Replenishment Items. “Replenishment Items” arethose Products that are used on a routine basis throughout HBI’s normal course of fabric and garment production. Supplier will keep Replenishment Itemson hand within Supplier’s SMI Inventory or Warehouse location (the “SMI Warehouse(s)”), for a maximum of [Confidential]* from the date Suppliercompletes the packaging of such inventory (the “Pack date”), in order to facilitate deliveries to the designated Facilities as agreed upon by Supplier andBuyer and in compliance with the freight terms of the Supply Agreement. The [Confidential]* maximum is hereafter referred to as the “maximuminventory Pack date”. 3. The SMI program may also, but will not ordinarily, include Commitment Items. “Commitment Items” are Products used by HBI outside of the normalcourse of operation, typically: (a) in small volumes for short periods of times; (b) for one-time promotional programs; or (c) on an infrequent basis. Itemsused on a seasonal basis may also be deemed Commitment Items, as determined by HBI in its sole discretion, and thereby excluded from the Supplier SMIprogram requirements. In the event that HBI and Supplier determine to include any one or more Commitment Items in the Supplier SMI program, HBI andSupplier will agree upon the volume of Commitment Items to be provided by Supplier. Notwithstanding the foregoing, Supplier will keep CommitmentItems on-hand for a maximum of [Confidential]* from the Pack date, and will deliver such Commitment Items to the designated Facility, as requested byHBI pursuant to the same process observed with respect to Replenishment Items. 4. Supplier and Buyer will designate specific and agreed upon raw material items as “Raw Material Commitment Items”. Raw Material CommitmentItems are Products used by HBI outside of the normal course of operation, typically; (a) in small volumes for short periods of times; (b) for one-timepromotional programs; (c) on an infrequent basis; or (d) imported products that require long in transit or lead times. Items used on a seasonal basis mayalso be deemed Raw Material Commitment Items, as determined by HBI in its sole discretion, and thereby excluded from the Supplier SMI programrequirements. Supplier will keep Raw Material Commitment Items on hand for a maximum of [Confidential]* from the Pack Date, except for items agreedupon by the parties. At the [Confidential]* mark, Supplier will begin processing the raw materials into finished goods at a mutually agreed uponspecification and rate. The raw materials typically include; (a) spandex; (b) flat or raw nylon and polyester; (c) nylon and polyester POY; and (d) anyother agreed upon products. The Supplier and Buyer will meet monthly, in person or by conference call, (the “Aged Inventory Meeting”). The Aged Inventory Meeting will be attended by the appropriate personnel from both parties. The objective of the Aged Inventory Meeting will be toprovide the Buyer with available information as it relates to the “maximum inventory Pack date”. 5. The Supplier will provide a weekly report (the “Replenishment Inventory Report”), in a mutually agreeable format for Replenishment Items only. Ata minimum, the Report will include: (a) minimum inventory level; (b) maximum inventory level; (c) 4 week shipping average; (d) 13 week shippingaverage; and (e) Supplier’s current-on  * Confidential treatment has been requested for the redacted portions of this agreement pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, asamended. The confidential, redacted portions have been provided separately to the U.S. Securities and Exchange Commission. hand-inventory amounts, by product, as well as include Buyer’s monthly forecast figures. The Supplier and Buyer will determine what items should beincluded on this report periodically, as well as whether a Target Inventory Level (“TIL”) is necessary. If determined necessary, the TIL must be mutuallyagreed upon by the parties. The Supplier will manage Commitment Items by either (a) scheduling to order; or (b) scheduling to forecast; or (c) producing to stock levels that aremutually agreed upon in the monthly Aged Inventory Meeting. The Supplier will manage Replenishment Item and Commitment Item finished goods inventory levels based upon the Supplier’s Finished GoodsInventory/Service Level Process rules, set forth in Exhibit C-1. 6. Reserved. 7. Reserved 8. The Buyer and Supplier will meet weekly, in person or by conference call, (the “Weekly Meetings”). The Weekly Meetings will be attended by theappropriate personnel from both parties. The objective of the Weekly Meetings will be to provide Supplier with available information to guide theSupplier’s production schedule to meet the Buyer’s consumption, including; (a) production schedules; (b) changes in demand; (c) the occurrence of anypromotional activity; (d) any obsolescence event; and (e) historical consumption data by vendor SKU. The Buyer will provide monthly forecasts for theHBI Seamless and Hosiery business units for all items that the Supplier is responsible for supplying. 9. HBI will ensure that each Facility that is serviced by Supplier’s SMI Warehouse, provides prompt and timely orders and information to Supplier inorder to schedule routine deliveries of needed Replenishment Items. The frequency of these deliveries shall be agreed upon, mutually. 10. Each designated Facility shall issue purchase orders to Supplier in order to direct the release of the Replenishment Items. 11. Reserved. 12. Supplier will be notified in the Weekly Meetings of an “end of life” event for any Replenishment Item. The Weekly Inventory Report will bereviewed to determine the amount of WIP and finished goods inventory for Replenishment and Commitment Items existing as of the date of such WeeklyInventory Report. HBI and Supplier shall work collaboratively to ensure consumption of Supplier’s inventory of Replenishment and Commitment Itemswithin a determined Product “end of life” time frame, not to exceed [Confidential]* from the Pack Date. If the entirety of such Replenishment Iteminventory is not consumed within the agreed upon Product “end of life” time frame, HBI may make  * Confidential treatment has been requested for the redacted portions of this agreement pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, asamended. The confidential, redacted portions have been provided separately to the U.S. Securities and Exchange Commission. other reasonable arrangements to utilize Supplier’s remaining inventory of the Replenishment or Commitment Items. The Buyer will be responsible fornotifying Supplier of any discontinued items and the remaining inventory, provided however with regard to specific products and quantities asdetermined and agreed upon by the parties, the same shall be purchased by the Buyer, including [Confidential]*. 13. Reserved. 14. For all items that have reached the maximum inventory Pack date, Supplier shall invoice HBI and HBI will provide a Purchase Order and shipmentlocation for Supplier to ship such product. 15. The Term of this Supplier Managed Inventory Agreement shall coincide with the Term of the Supply Agreement, provided however suchtermination shall not affect Buyer’s obligations to consume or purchase Supplier’s products as hereinbefore set forth (end of life, obsolescence,Commitment Items, Raw Commitment Items or otherwise). 16. A Target Inventory Level (TIL) can be added to Exhibit C-2, if Supplier and Buyer agree that it is needed. IN WITNESS WHEREOF, the parties have caused this Agreement to be executed by their respective duly authorized representatives, as of theday and year first written above. “Supplier” Unifi Manufacturing, Inc. By: /s/ R. ROGER BERRIER Roger Berrier, President and Chief Operating Officer “HBI” HANESBRANDS INC. By: /s/ GERALD EVANS Gerald Evans, President, Chief Operating Officer  * Confidential treatment has been requested for the redacted portions of this agreement pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, asamended. The confidential, redacted portions have been provided separately to the U.S. Securities and Exchange Commission. EXHIBIT C-1 UMI Finished Goods Inventory/Service Level Process UMI uses the Demand Segmentation process for establishing inventory levels to carry. Historic weekly shipment averages are analyzed to determine which items have stable demand. For stable demand items, history is a better indicator of future orders than forecasting. Stability of demand is determined by calculating the Coefficient of Variation (COV). COV = (Standard Deviation of Weekly Demand/Average Weekly Demand) Typically a COV of [Confidential]* is used to determine if the item's demand is stable enough to hold inventory (for Covering, [Confidential]* is used). For stable demand items, minimum and maximum inventory levels are established to hold. Minimum inventory levels vary by product line: For texturing, the minimum equals [Confidential]* of average demand + the equivalent number of days of demand for the transit time to the customer. Forexample, if going to Puerto Rico, the minimum is [Confidential]* days of average demand. For covering, the minimum is [Confidential]* of average demand if the item is continuously in production. If the average volume is not enough toproduce continuously, the minimum is [Confidential]* of average demand + the lead time to produce a doff. Build quantities are established based on logical production increments and added to the minimums to establish the maximums. Planners make adjustments to min max levels as required due to significant continued increases or decreases in shipments (with Sales input). For items that do not exhibit stable demand, production is scheduled to order. If the production lead times are not acceptable to the customer, such unstable demand items can be made to forecast or made to agreed upon stock levels,but the customer must agree to take any remaining inventory within 6 months of production.  EXHIBIT D Supplier Facilities 1.Yadkinville, North Carolina Polyester and Spinning Plants 2.Madison, North Carolina Nylon Texturing & Covering Plant 3.Reidsville, North Carolina Dye House 4.Finished Goods Warehouse, Compton, California 5.Warp Development Company Warp Draw facility, Monroe, North Carolina 6.Finished Goods Warehouse located in Puerto Rico 7.Warehouse/Production Facility located in El Salvador 8.Alfenas, Brazil manufacturing and warehouse facility.  EXHIBIT E Sample Purchase Order  EXHIBIT F Specifications Denier> 100 +/- 1.5< 100 +/- 1Shrinkage> 50%+/- 4%< 25% +/- 2%Tacs/m+/- 10 Retention+/-5% Oil %-.25%+.50%Density+/-.02  * Confidential treatment has been requested for the redacted portions of this agreement pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, asamended. The confidential, redacted portions have been provided separately to the U.S. Securities and Exchange Commission. EXHIBIT 6.3.1 Fabric Claim Policy ●In making claim settlements, UMI pays only the actual out-of pocket loss incurred for off-quality fabric based on direct cost figures; i.e. yarn,knitting, dyeing and finishing charges. Indirect costs such as freight, overhead, etc. are not allowed in the claims process. UMI reserves the rightto be consulted prior to any fabric being sold off as to the salvage value obtainable. The right to have documented proof (invoices) to verify thesalvage value obtained is also reserved. ●UMI reserves the right to examine and sample all claimed fabric fallout. No payment will be made for fabric not made available. ●UMI will not pay claims on fabric that has not been finished in a reasonable length of time. The question of “reasonable time” is difficult. Fabricthat has been knitted and held in inventory in excess of 6 months would certainly be considered to be at the end of a “reasonable time”. ●UMI will not pay claims on fabrics made with yarns that are out of date or mixed with current yarns. Yarns that are older than 6 months from shipdate would be considered out of date. All complaints or claims filed should include the texturing time period of the yarn that was used to processthe fabric. ●Liability for a claim is determined by fabric analysis of representative swatches. Percentage of liability is determined by the actual results of arepresentative sampling (ex. Texturing, knitting, or dyeing and finishing). ●UMI does not honor claims for “machine down time” or lost production. These costs are considered part of doing business and will not beallowed for claims processing. ●Stitch length variations (knit extension in excess of [Confidential]* or shadow barre’) are the knitter’s responsibility. Weave extensions are theresponsibility of the weaver. ●Fabrics that level under mock dyeing are the dyer’s responsibility. ●UMI reserves the right to require a cost breakdown on all claimed styles. This breakdown and appropriate salvage should accompany each claim.  EXHIBIT 6.3.2 Yarn Return Policy It is the intention of UMI to supply our customers with superior quality products as free of defects as possible. Yarn returns are expensive to both parties.It is by this statement of policy that these yarn returns will, hopefully, be made simpler and less costly to you, our valued customer, and to UMI. ●UMI request that our yarns be given a fair trial before being removed from your processing equipment. Unless an obvious defect is found, werequest that the package be allowed three (3) attempts before removal. It has been found that approximately 75% of the yarn returned to UMIcontains no UMI related defects. We expect a package that can be cleaned (cleaning to include removal of wound-in-waste, knots, etc.), in areasonable length of time, to be cleaned and given a second and third change before removal and return to UMI. ●UMI requests that yarns be returned in a condition “similar” to that in which the original yarns was received. UMI will not issue credit for yarndamaged by the customer (e.g. grease, dirt, water, improper handling, etc.). UMI will not issue credit on any yarn containing ink marks. ●Unless there is a documented core problem, (i.e., bad paper tube, core winding problem, etc.) UMI will not issue credit for the return of very smallpackages (i.e., skinners) as the shipping cost of transporting paper is an unnecessary expense. ●We will not issue credit for packages in a return with no visible defects unless there is a stocking, garment, “reason for removal card,” etc.,identifying the yarn problem with the returned package. This does not include returns for customer accommodations, unsuitability of the yarn forthe intended end use etc. ●UMI requests that yarns be returned in a reasonable length of time. We will not issue credit for out-of-date yarn. The question of “reasonabletime” is sometimes difficult to resolve, but yarn held in the customer’s inventory in excess of 6 months from our date of shipment wouldcertainly be considered to be at the end of “a reasonable time.” The 6 month age limitation applies to textured yarns and covered yarns. ●No returns will be accepted without a proper return authorization number. This number must be on all paperwork to insure that the proper creditis issued to your account. ●An issued return authorization number will be canceled if the return is not received within 30 days from receipt of the number. After 30 days anew number will need to be obtained from UMI.  ●UMI re-weighs all returns and issues credit based on our weights, less customer damaged goods, skinner, no visible defect yarn, out-of-date yarn,etc. ●In most cases, UMI lot changes are the result of changes in our feeder yarns over which we have no control. We need to work together to balancethe twists to minimize the loss of value and returns. Credit will not be issued for leftover yarn as a result of not working to minimize the cost ofthe changeover. ●Notification of the non-issuance of return credit along with the reason for the non-issuance will be sent to your Account Manager. Your AccountManager will communicate this information to you. UMI will dispose of this non-credit yarn or return it to the customer (freight collect),whichever the customer desires. ●Yarn returned for creating a defective garment should have the defective garment tied around the package. This procedure will help us identifypackages that are defective for reasons other than runnability problems (i.e., lean ends, missing components, etc.) ●UMI requests that different lots and twists be kept separate. ●UMI reserves the right to examine the yarn return prior to issuing the authorization to return the product. ●All yarn returned for customer accommodation will be credited at the purchase price, less a TBD charge per pound for handling plus shippingcharges.  EXHIBIT 10.18 Insurance Requirements I.Commercial General Liability (A)Limits: $5,000,000.00 minimum limits per Occurrence/ $10,000,000.00 general aggregate (can include umbrella liability limits)$5,000,000.00 Products/Completed Operations Aggregate with such coverage to be maintained for a period of three (3) years followingcompletion date II.Automobile Liability (A)Any Auto (B)Limits: $2,000,000.00 minimum Combined Single Limit (can include umbrella liability limits) III.Workers’ Compensation and Employers Liability (A)Statutory Workers’ Compensation Coverage (B)All States Endorsement (C)Employers Liability Limit:$1,000,000.00 each accident IV.Other (A)Commercial Blanket Bond/Crime/Employee Dishonesty with limits of $2,000,000.00 per occurrence, including an endorsement for “client’sproperty” V.General Requirements (A) Additional Insured Language must be as follows: “Hanesbrands Inc. and any and all subsidiaries” are named as an additional insured as respect to General Liability and AutomobileLiability. (B)A waiver of subrogation shall be provided to Hanesbrands and any subsidiary as respect to the General Liability. (C)Policy must be written on an occurrence form.  (D)General Liability shall be endorsed to state coverage is primary over any other available insurance coverages. (E)30 Business Days written notice of cancellation, notice of non-renewal or material changes in coverage. (F)Insurance must be written by an insurance company with a minimum rating of Best’s A-, VIII or its equivalent, satisfactory to Hanesbrandsand duly incorporated in the United States of America. (G)Most current ISO (Insurance Services Office, Inc.) form for all coverages. (H)Original Certificate of Insurance (ACORD form) to be delivered to Hanesbrands prior to commencement of any work and/or service. (I)It is the responsibility of Supplier to ensure that Hanesbrands always has a current Certificate of Insurance for all lines of coverage.  *Confidential Treatment has been requested for the redacted portions of this agreement pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, asamended. The confidential, redacted portions have been provided separately to the U.S. Securities and Exchange Commission. Appendix A-1 [*]Seamless Puerto RicoLa LibertadMt. AiryBonaventureHonduras [*]HosierySAP #Intimates/SeamlessSAP #SockSAP #Reference ItemDescriptionPlyDenFilTwistLusterPOYSupplier[*][*]ProductPriceFreightWarehouse[*]TotalPriceFreightTotalPriceFreightTotalPriceFreightTotalPriceFreightTotalPriceNotes[*]2107413 E71351S.0.01|11|5|1115STWISTSEMIDULL[*][*][*][*][*][*][*][*][*][*][*][*] [*]2107414 E71351Z.0.01|11|5|1115ZTWISTSEMIDULL[*][*][*][*][*][*][*][*][*][*][*][*] [*] N3090060.B01.501/14/10 11410STWISTSEMIDULL[*][*][*][*][*][*][*][*][*][*][*][*] [*] N3090061.B01.501/14/10 11410ZTWISTSEMIDULL[*][*][*][*][*][*][*][*][*][*][*][*] [*]2000023 N3091130.T01.501/15/7 1157STWISTSEMIDULL[*][*][*][*][*][*][*][*][*][*][*][*] [*]2000024 N3091131.T01.501/15/7 1157ZTWISTSEMIDULL[*][*][*][*][*][*][*][*][*][*][*][*] [*]2000008YN002IXNC0000000 N30S4710.T21.501|20|7 1207STWISTSEMIDULL[*][*][*][*][*][*][*][*][*][*][*][*] [*]2000009YN002JXNC0000000 N30S4711.T22.501|20|7 1207ZTWISTSEMIDULL[*][*][*][*][*][*][*][*][*][*][*][*] [*]2146956YN008XNC0000000 N3090070.B10.501/23/28 12328STWISTSEMIDULL[*][*][*][*][*][*][*][*][*][*][*][*] [*]2147047YN009XNC0000000 N3090071.B10.501/23/28 12328ZTWISTSEMIDULL[*][*][*][*][*][*][*][*][*][*][*][*] [*] N3090901.Q2S.501|30|10 13010ZTWISTSEMIDULL[*][*][*][*][*][*][*][*][*][*][*][*] [*] N3091260.T2D.571/30/34 13034STWISTSEMIDULL[*][*][*][*][*][*][*][*][*][*][*][*] [*] N3091261.T2D.571/30/34 13034ZTWISTSEMIDULL[*][*][*][*][*][*][*][*][*][*][*][*] [*]2000013YN004IXNC0000000 N30S6810.T2D.501/40/13 14013STWISTSEMIDULL[*][*][*][*][*][*][*][*][*][*][*][*] [*]2000014YN004JXNC0000000 N30S6721.T2D.501/40/13 14013ZTWISTSEMIDULL[*][*][*][*][*][*][*][*][*][*][*][*] [*] N3090832.T2B.501/40/13 Sol dyeblack 14013ZTWISTSEMIDULL[*][*][*][*][*][*][*][*][*][*][*][*] [*]2000033YN004CXNC0000000 N30S6790.T22.501/40/34 14034STWISTSEMIDULL[*][*][*][*][*][*][*][*][*][*][*][*] [*]2000034YN004DXNC0000000 N30S6791.T22.501/40/34 14034ZTWISTSEMIDULL[*][*][*][*][*][*][*][*][*][*][*][*] [*] YN004CXNC0000000 N3022150.Q2D.501/40/34 14034STWISTSEMIDULL[*][*][*][*][*][*][*][*][*][*][*][*] [*] YN004DXNC0000000 N3022151.Q2D.501/40/34 14034ZTWISTSEMIDULL[*][*][*][*][*][*][*][*][*][*][*][*] [*]2101635YN0064XNC0000000 N30S6762.62C.502/40/34 240342 PLYSEMIDULL[*][*][*][*][*][*][*][*][*][*][*][*] [*]2163978YN002AXNC0000000 N3090762.R2C.502/40/34 Arafelle 240342 PlySEMIDULL[*][*][*][*][*][*][*][*][*][*][*][*] [*]2165528YN007EXNC0000000 N3090402.62R.502|40|34|CationicPastelle 240342 PLYSEMIDULL[*][*][*][*][*][*][*][*][*][*][*][*] [*]2165529YN003UXNC0000000 N3091162.R2R.502|40|34| DeepDye 240342 PLYDEEPDYE[*][*][*][*][*][*][*][*][*][*][*][*] [*] N3038932.B21.502/40/34 240342 PLYSEMIDULL[*][*][*][*][*][*][*][*][*][*][*][*] [*]2182740YN0011XNC0000000 N30S4670.T1B.501/50/92 15092STWISTSEMIDULL[*][*][*][*][*][*][*][*][*][*][*][*] [*]2182741YN0013XNC0000000 N30S4671.T1B.501/50/92 15092ZTWISTSEMIDULL[*][*][*][*][*][*][*][*][*][*][*][*] [*]2180736YN0021XNC0000000 N30S8772.E2B.502/50/92 250922 PLYSEMIDULL[*][*][*][*][*][*][*][*][*][*][*][*] [*]2000037YN002VXNC0000000 N30S8670.62C.501/68/68 16868STWISTSEMIDULL[*][*][*][*][*][*][*][*][*][*][*][*] [*]2000038YN002WXNC0000000 N30S8671.62C.501/68/68 16868ZTWISTSEMIDULL[*][*][*][*][*][*][*][*][*][*][*][*] [*]2117111YN0075XNC0000000 N30S8682.62C.502/68/68 268682 PLYSEMIDULL[*][*][*][*][*][*][*][*][*][*][*][*] [*]2000019 N30S7000.T2D.501/70/34 17034STWISTSEMIDULL[*][*][*][*][*][*][*][*][*][*][*][*] [*]2000020 N30S7001.T2D.501/70/34 17034ZTWISTSEMIDULL[*][*][*][*][*][*][*][*][*][*][*][*] [*] YN0854WHT000S000 N30S6830.629.501/70/34 17034ZTWISTSEMIDULL[*][*][*][*][*][*][*][*][*][*][*][*] [*] YN00856WHT000Z000 N30S6831.629.501/70/34 17034STWISTSEMIDULL[*][*][*][*][*][*][*][*][*][*][*][*] [*] 19395N3021221.621.501|70|34| 17034ZTWISTSEMIDULL[*][*][*][*][*][*][*][*][*][*][*][*] [*]2000258 N30S7022.T2B.502/70/34 270342 PLYSEMIDULL[*][*][*][*][*][*][*][*][*][*][*][*][*][*] [*] 19594N3020992.T2B.502/70/34 FF Oil 270342 PLYSEMIDULL[*][*][*][*][*][*][*][*][*][*][*][*] [*] YN007QXNC0000000 N3057050.B2C.501|70|46 Novva 17046STWISTBRIGHT[*][*][*][*][*][*][*][*][*][*][*][*] [*] YN007RXNC0000000 N3057051.B2C.501|70|46 Novva 17046ZTWISTBRIGHT[*][*][*][*][*][*][*][*][*][*][*][*] [*] YN007SXNC0000000 N3021502.62B.502|70|46|BRIGHT 270462 PLYBRIGHT[*][*][*][*][*][*][*][*][*][*][*][*] [*] 19595N3021062.D21.502/70/68 FullDull 270682PLYFULLDULL[*][*][*][*][*][*][*][*][*][*][*][*] [*] YN4029XNC0000000 N3021782.Q21.502/70/68 SD 270682 PLYSEMIDULL[*][*][*][*][*][*][*][*][*][*][*][*] [*]  *Confidential Treatment has been requested for the redacted portions of this agreement pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, asamended. The confidential, redacted portions have been provided separately to the U.S. Securities and Exchange Commission. Appendix - A2 [*]Seamless Puerto RicoLa LibertadMt. AiryBonaventureHonduras [*]HosierySAP #Intimates/SeamlessSAP #Reference ItemDescriptionCoreSpandexDenierCoverDTYDenCoverDTYFilCoverFlatDenCoverFlatFilTPICoreSupplierCoverSupplierCore%Cover%NominalCoreSpandexPriceCoverDTYPriceCoverFlatPrice[*][*]ProductPriceFreightWarehouse[*]TotalPriceFreightTotalPriceFreightTotalPriceFreightTotalPriceFreightTotalPriceNotes[*]2000300 C3ES155M.001.4010|1|7|5Flat10 75[*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*] [*]2000301 C3ES155M.002.4010|1|7|5Flat10 75[*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*] [*]2181694 C3NS215M.171.4010|1|7|5Fusible/Flat10 75[*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*] SeafreightPrice[*]2181694 C3NS215M.172.4010|1|7|5Fusible/Flat10 75[*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*] AirfreightPrice[*]2181695 C3NS215M.172.4010|1|7|5Fusible/Flat10 75[*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*] SeafreightPrice[*]2181695 C3NS215M.172.4010|1|7|5Fusible/Flat10 75[*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*] AirfreightPrice[*]2188257 C3NS267M.W61.4010|1|15|7brt oval10 157[*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*] [*]2188258 C3NS267M.W62.4010|1|15|7brt oval10 157[*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*] [*]2000067 C3ES232M.171.4010|1|23|28102328 [*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*] [*]2000068 C3ES232M.172.4010|1|23|28102328 [*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*] [*]2165530 C3ES241M.W71.4010|2|40|34104034 [*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*] [*]2165531 C3ES241M.W72.4010|2|40|34104034 [*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*] [*]2159244 C3YS195R.171.4015|1|7|5Flat15 75[*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*] [*]2159245 C3YS195R.172.4015|1|7|5Flat15 75[*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*] [*]2000171 C3ES261M.W51.4015|1|14|10151410 [*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*] [*]2000172 C3ES261M.W52.4015|1|14|10151410 [*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*] [*]2163747 C3ES279M.W71.4015|1|30|34153034 [*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*] [*]2163748 C3ES279M.W72.4015|1|30|34153034 [*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*] [*]2189837 C3ES275M.W61.4015|1|50|92dyeablespandex155092 [*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*] [*]2189838 C3ES275M.W62.4015|1|50|92dyeablespandex155092 [*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*] [*]2129687 C3AS254M.W71.4020|1|7|5Flat20 75[*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*] [*]2129688 C3AS254M.W72.4020|1|7|5Flat20 75[*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*] [*]2131540 C3MS144R.088.4020|1|10|7Flat/DoubleCov20 107[*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*] [*]2177767 C3NS225M.171.4020|1|10|7Fusible/Flat20 107[*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*] SeafreightPrice[*]2177767 C3NS225M.171.4020|1|10|7Fusible/Flat20 107[*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*] Airfreightprice[*]2177768 C3NS225M.172.4020|1|10|7Fusible/Flat20 107[*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*] SeafreightPrice[*]2177768 C3NS225M.172.4020|1|10|7Fusible/Flat20 107[*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*] Airfreightprice[*]2000204 C3ZS265M.W61.4020|1|10|7Flat20 107[*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*] [*]2000205 C3ZS265M.W62.4020|1|10|7Flat20 107[*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*] [*]2129689YN004GXNC0000000C3AS249M.W71.4020|1|15|720157 [*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*] [*]2129690YN004HXNC0000000C3AS249M.W72.4020|1|15|720157 [*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*] [*] YN0023XNC0000000C3YS278M.W61.4020|1|20|12202012 [*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*] [*] YN0024XNC0000000C3YS278M.W62.4020|1|20|12202012 [*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*] [*]2189067 C3AS270M.W71.4020|1|23|28202328 [*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*] [*]2189068 C3AS270M.W72.4020|1|23|28202328 [*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*] [*] YN0085XNC0000000C3AS280.W61.4020|1|30|34203034 [*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*] [*] YN0086XNC0000000C3AS280.W62.4020|1|30|34203034 [*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*] [*]2150087 C3E2398M.171.4020|1|40|13204013 [*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*] [*]2150088 C3E2398M.172.4020|1|40|13204013 [*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*] [*]2000114YN002LXNC000000C3AS253M.171.4020|1|40|34|204034 [*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*] [*]2000115YN002MXNC000000C3AS253M.172.4020|1|40|34|204034 [*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*] [*]2000114YN002LXNC000000C3ZS264M.W71.4020|1|40|34|204034 [*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*] [*]2000115YN002MXNC000000C3ZS264M.W72.4020|1|40|34|204034 [*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*] [*]2177887 C3AS255M.W71.4020|1|50|92205092 [*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*] [*]2177888 C3AS255M.W72.4020|1|50|92205092 [*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*] [*]2000109 C3AS250M.W71.4020|1|70|34207034 [*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*] [*]2000110 C3AS250M.W72.4020|1|70|34207034 [*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*] [*]2179301 C3ES271M.W61.4030|1|15|730157 [*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*] [*]2179302 C3ES271M.W62.4030|1|15|730157 [*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*] [*]2151953 C3AS274R.W7B.4040|1|10|7Flat/DoubleCov40 107[*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*] [*]2184679 C3LS238M.171.4040|1|10|7T902C/Flat40 107[*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*] [*]2184680 C3LS238M.172.4040|1|10|7T902C/Flat40 107[*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*] [*]2100000YN001SXNC0000000C3AS272M.W61.4040|1|20|740207 [*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*] [*]2100001YN001TXNC0000000C3AS272M.W62.4040|1|20|740207 [*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*] [*]2169501 C3AS259M.W71.4040|1|40|34404034 [*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*] [*]2169502 C3AS259M.W72.4040|1|40|34404034 [*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*] [*] YN002ZXNC0000000C3L2212M.171.4040|1|40|34404034 [*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*] [*] YN003AXNC0000000C3L2212M.172.4040|1|40|34404034 [*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*] [*]2184217 C3AS269M.W71.4040|1|68|68406868 [*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*] [*]2184218 C3MS269M.W72.4040|1|68|68406868 [*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*] [*]2180607 C3NS200M.171.4050|1|10|7Fusible/Flat50 107[*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*] SeafreightPrice[*]2180607 C3NS200M.171.4050|1|10|7Fusible/Flat50 107[*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*] SeafreightPrice[*]2180608 C3NS200M.172.4050|1|10|7Fusible/Flat50 107[*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*] AirfreightPrice[*]2180608 C3NS200M.172.4050|1|10|7Fusible/Flat50 107[*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*] AirfreightPrice[*]2000151 C3YS273M.W71.4070|1|20|770207 [*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*] [*]2000152 C3YS273M.W72.4070|1|20|770207 [*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*] [*]2000178YN005UXNC0000000C3A2489M.W71.4070|1|20|770207 [*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*] [*]2000179YN005VXNC0000000C3A2489M.W72.4070|1|20|770207 [*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*] [*]2176963YN009CXNC0000000C3ES162M.001.4070|1|26|20Flat70 2620[*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*] [*]2176964YN009DXNC0000000C3ES162M.002.4070|1|26|20Flat70 2620[*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*] [*]2000087 C3AS276M.W71.4070|1|40|13704013 [*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*] [*]2000088 C3AS276M.W72.4070|1|40|13704013 [*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*] [*]2116274YN003MXNC0000000C3AS248M.W71.4070|1|40|34|704034 [*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*] [*]2116275YN003NXNC0000000C3AS248M.W72.4070|1|40|34704034 [*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*] [*]2000093 C3AS247M.W71.4070|1|70|34707034 [*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*] [*]2000094 C3AS247M.W72.4070|1|70|34707034 [*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*] [*]2187917 C3ES251M.W71.40120|1|50|92T902C1205092 [*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*] [*]2187918 C3ES251M.W72.40120|1|50|92T902C1205092 [*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*] [*]2000196YN004AXNC0000000C3AS258M.W71.40140|1|40|341404034 [*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*] [*]2000197YN004BXNC0000000C3AS258M.W72.40140|1|40|341404034 [*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*] [*] YN003VXNC0000000C3ES243M.W72.40210|1|40|132104013 [*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*] [*] YN002KXNC0000000C3ES239M.W72.40210|1|70|342107034 [*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*][*] [*]  *Confidential Treatment has been requested for the redacted portions of this agreement pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, asamended. The confidential, redacted portions have been provided separately to the U.S. Securities and Exchange Commission. Appendix A-3 [*]Seamless Puerto RicoLa LibertadMt. AiryBonaventureHonduras[*]HosierySAP #Intimates/SeamlessSAP #SockSAP#Reference ItemDescriptionCoreSpandexDenierCover1DTYDenCover2DTYFilCover2DTYDenCover2DTYFilTwistCoreSupplierCoverSupplierCore%Cover1 %Cover2 %NominalCoreSpandexPriceCover1DTYPriceCover2DTYPrice[*][*]ProductPriceFreightWarehouse[*]TotalPriceFreightTotalPriceFreightTotalPriceFreightTotalPriceFreightTotalPrice[*]2000085 C3ES345J.W71.5010 AC1|40|34|10 4034STWIST[*][*][*] [*][*] [*][*][*][*][*][*][*][*][*][*][*][*] [*]2000086 C3ES345J.W72.5010 AC1|40|34|10 4034ZTWIST[*][*][*] [*][*] [*][*][*][*][*][*][*][*][*][*][*][*] [*] YN008QXNC0000000 C3MS344K.181.5020 AC1/20/720 207STWIST[*][*][*] [*][*] [*][*][*][*][*][*][*][*][*][*][*][*] [*] YN008RXNC0000000 C3MS344K.182.5020 AC1/20/720 207ZTWIST[*][*][*] [*][*] [*][*][*][*][*][*][*][*][*][*][*][*] [*]2174180YN003FXNC0000000 C3E4002K.181.5020 AC1|40|3420 4034STWIST[*][*][*] [*][*] [*][*][*][*][*][*][*][*][*][*][*][*] [*]2174181YN003GXNC0000000 C3E4002K.182.5020 AC1|40|3420 4034ZTWIST[*][*][*] [*][*] [*][*][*][*][*][*][*][*][*][*][*][*] [*]2000116 C3ES343J.W71.5020 AC1/70/3420 7034STWIST[*][*][*] [*][*] [*][*][*][*][*][*][*][*][*][*][*][*] [*]2000117 C3ES343J.W72.5020 AC1/70/3420 7034ZTWIST[*][*][*] [*][*] [*][*][*][*][*][*][*][*][*][*][*][*] [*] YN009NXNC0000000 C3NS339J.17P.502/50/92 aircoveredversion 509250922 PLY[*][*] [*][*] [*][*][*][*][*][*][*][*][*][*][*][*][*] [*]  *Confidential Treatment has been requested for the redacted portions of this agreement pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, asamended. The confidential, redacted portions have been provided separately to the U.S. Securities and Exchange Commission. Appendix A-4 Seamless Puerto RicoLa LibertadMt. AiryBonaventureHonduras[*]HosierySAP #Intimates/SeamlessSAP #SockSAP#DescriptionReference ItemCoreSpanexDenierCover1 DTYDenierCover1DTYFilCover2 DTYDenierCover2DTYFilCoreSupplierCoverSupplierCore%Cover1 %Cover2 %NominalCoreSpandexPriceCover1DTYPriceCover2DTYPrice[*][*]ProductPriceFreightWarehouse[*]TotalPriceFreightTotalPriceFreightTotalPriceFreightTotalPriceFreightTotalPrice[*] 229120 AC1/150/34BlackC3E9834K.182.5020 15034[*][*][*] [*][*] [*][*][*][*] [*][*][*][*] [*] 226220 AC1/150/72OBC3E4338K.W82.5020 15072[*][*][*] [*][*] [*][*][*][*] [*][*][*][*] [*] YN0059XNC0000000 1/40/34Nylon &1/50/36PolyX1N6240J 40345036[*][*] [*][*] [*][*][*][*][*][*][*][*][*] [*] YN009NXNC0000000 1/68/68Nylon &1/70/72PolyC3NS340J.H7P.50 68687072[*][*] [*][*] [*][*][*][*][*][*][*][*][*] [*]  *Confidential Treatment has been requested for the redacted portions of this agreement pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, asamended. The confidential, redacted portions have been provided separately to the U.S. Securities and Exchange Commission. Appendix A-5 [*]Seamless Puerto RicoLa LibertadMt. AiryBonaventureHonduras[*]HosierySAP #Intimates/SeamlessSAP #SockSAP #DescriptionReference ItemPlyDenFilPOYSupplier[*][*]ProductPriceFreightWarehouse[*]TotalPriceFreightTotalPriceFreightTotalPriceFreightTotalPriceFreightTotalPrice[*] 1/50/36 Textured Polyn/a15036[*][*][*][*][*][*][*][*][*][*][*][*] [*] YN009MXNC0000000 1/70/34 Cool Grey Poly - Logo -IntimatesH3061500.62R.5017034[*][*][*][*][*][*][*][*][*][*][*][*] [*]2000062 1/70/34 optical whiteD041901U.BD.2817034[*][*][*][*][*][*][*][*][*][*][*][*] [*] 9921|70|36|56T|NATURAL|SET|NONTS|POLYESTERP60273A.21.2317036[*][*][*][*][*][*][*][*][*][*][*][*] [*][*][*] YN007MXNC0000000210591/70/34 Blk PolyH3061931.G2C.5017036[*][*][*][*][*][*][*][*][*][*][*][*] [*] 210701|70|36|56T|NATURAL|STRETCH(El Salvador & Mt. Airy)P60272A.629.23,H3062141.629.5017036[*][*][*][*][*][*][*][*][*][*][*][*] [*] YN008EXNC0000000 1|70|68|Z TWIST|CATIONICPOLYESTER|SEMIDULL|STRETCH|ROUND|TS| | - StwistH3062270.62C.5017068[*][*][*][*][*][*][*][*][*][*][*][*] [*] YN008FXNC0000000 1|70|68|Z TWIST|CATIONICPOLYESTER|SEMIDULL|STRETCH|ROUND|TS| | - ZtwistH3062271.62C.5017068[*][*][*][*][*][*][*][*][*][*][*][*] [*] YN008GXNC0000000 2|70|68|92T|NAT|STR|TS|POLYP59646A.23C.2327068[*][*][*][*][*][*][*][*][*][*][*][*] [*] YN3682XNC0000000 2/70/68 - Warp KnitP59464A.631.2327068[*][*][*][*][*][*][*][*][*][*][*][*] [*] YN3236XNC0000000 1/70/72 SD - circular knitWoolwine Asia onlyP59098A.631.2317072[*][*][*][*][*][*][*][*][*][*][*][*] [*] 1/70/72 SDn/a17072[*][*][*][*][*][*][*][*][*][*][*][*] [*] YN3234XNC0000000 2/70/68 - Circular Knit WoolineAsia onlyP5T352A.631.2327072[*][*][*][*][*][*][*][*][*][*][*][*] [*] YN3231XNC0000000 1/100/96 Warp KnitP5T260A.61R.23110096[*][*][*][*][*][*][*][*][*][*][*][*] [*] 210771/150/34 Sorbtek BLACK PolyH3061421.G21.50115034[*][*][*][*][*][*][*][*][*][*][*][*] [*] 210901/150/34 solution dyed black polyP53842A.G2C.23115034[*][*][*][*][*][*][*][*][*][*][*][*] [*] 2031/150/48 SDP59321K.621.26115048[*][*][*][*][*][*][*][*][*][*][*][*] [*] 210731/150/68 OB (Domestic)H3062351.62E.G9115068[*][*][*][*][*][*][*][*][*][*][*][*] [*] 210731/150/68 OB (El Salvador)P60153A.62E.23115068[*][*][*][*][*][*][*][*][*][*][*][*] [*] 210861/150/68 OB SORBTEKH3061361.T2B.50115068[*][*][*][*][*][*][*][*][*][*][*][*] [*] 210882/150/68 Flame Red Poly - SocksLogoP56512A.G2V.23215068[*][*][*][*][*][*][*][*][*][*][*][*] [*] 220003/150/68 Flame Red Poly - SocksLogoP56513A.G2V.23315068[*][*][*][*][*][*][*][*][*][*][*][*] [*] 210882/150/68 Quicksilver - Poly - SocksLogoP56520A.G2V.23215068[*][*][*][*][*][*][*][*][*][*][*][*] [*] 220003/150/68 Quicksilver - Poly - SocksLogoP56521A.G2V.23315068[*][*][*][*][*][*][*][*][*][*][*][*] [*] 210882/150/68 Power Pink - Poly - SocksLogoP59701A.G2V.23215068[*][*][*][*][*][*][*][*][*][*][*][*] [*] 220003/150/68 Power Pink - Poly - SocksLogoP59913A.G2V.23315068[*][*][*][*][*][*][*][*][*][*][*][*] [*] 210882/150/68 Black - Poly - Socks Logo(Not commodity)P59452A.G2V.23215068[*][*][*][*][*][*][*][*][*][*][*][*] [*] 220003/150/68 Black - Poly - Socks Logo(Not commodity)P59158A.G2V.23315068[*][*][*][*][*][*][*][*][*][*][*][*] [*] 210882/150/68 Royal - Poly - Socks LogoP56526A.G2V.23215068[*][*][*][*][*][*][*][*][*][*][*][*] [*] 220003/150/68 Royal - Poly - Socks LogoP56527A.G2V.23315068[*][*][*][*][*][*][*][*][*][*][*][*] [*] 210882/150/68 Lavendar - Poly - SocksLogoP56585A.G2V.23215068[*][*][*][*][*][*][*][*][*][*][*][*] [*] 220003/150/68 Lavendar - Poly - SocksLogoP56586A.G2V.23315068[*][*][*][*][*][*][*][*][*][*][*][*] [*] 210882/150/68 Begonia Pink - Poly -Socks LogoP56785A.G2V.23215068[*][*][*][*][*][*][*][*][*][*][*][*] [*] 220003/150/68 Begonia Pink - Poly -Socks LogoP59554A.G2V.23315068[*][*][*][*][*][*][*][*][*][*][*][*] [*] 210882/150/68 Pink 14 - Poly - SocksLogoP56636A.G2V.23215068[*][*][*][*][*][*][*][*][*][*][*][*] [*] 220003/150/68 Pink 14 - Poly - SocksLogoP56637A.G2V.23315068[*][*][*][*][*][*][*][*][*][*][*][*] [*] 210882/150/68 Melon - Poly - SocksLogoP56522A.G2V.23215068[*][*][*][*][*][*][*][*][*][*][*][*] [*] 220003/150/68 Melon - Poly - SocksLogoP56523A.G2V.23315068[*][*][*][*][*][*][*][*][*][*][*][*] [*] 210882/150/68 Merrimack - Poly - SocksLogoP56518A.G2V.23215068[*][*][*][*][*][*][*][*][*][*][*][*] [*] 220003/150/68 Merrimack - Poly - SocksLogoP56519A.G2V.23315068[*][*][*][*][*][*][*][*][*][*][*][*] [*] 210882/150/68 Plum RebelliousP59082A.G2V.23215068[*][*][*][*][*][*][*][*][*][*][*][*] [*] 220003/150/68 Plum Rebelliousn/a315068[*][*][*][*][*][*][*][*][*][*][*][*] [*] 210882/150/68 OB - Poly - Socks LogoP56892A.62V.23215068[*][*][*][*][*][*][*][*][*][*][*][*] [*] 220003/150/68 OB - Poly - Socks LogoP59371A.62V.23315068[*][*][*][*][*][*][*][*][*][*][*][*] [*] 210882/150/68 Diablo Rust - Poly -Socks LogoP56528A.G2V.23215068[*][*][*][*][*][*][*][*][*][*][*][*] [*] 220003/150/68 Diablo Rust - Poly -Socks LogoP56529A.G2V.23315068[*][*][*][*][*][*][*][*][*][*][*][*] [*] 210882/150/68 Sphere - Poly - SocksLogoP56538A.G2V.23215068[*][*][*][*][*][*][*][*][*][*][*][*] [*] 220003/150/68 Sphere - Poly - SocksLogoP56539A.G2V.23315068[*][*][*][*][*][*][*][*][*][*][*][*] [*] 210882/150/68 Grass GreenP50897A.G2V.23215068[*][*][*][*][*][*][*][*][*][*][*][*] [*]  *Confidential Treatment has been requested for the redacted portions of this agreement pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, asamended. The confidential, redacted portions have been provided separately to the U.S. Securities and Exchange Commission. Appendix A-6 [*]Seamless Puerto RicoLa LibertadMt. AiryBonaventureHonduras[*]HosierySAP #Intimates/SeamlessSAP #SockSAP #DescriptionReferenceItemTextDenierTextFilRawSupplier[*][*]ProductPriceFreightWarehouse[*]TotalPriceFreightTotalPriceFreightTotalPriceFreightTotalPriceFreightTotalPrice[*] 19130-0000002/30/10SewingYarn -NaturalT1Z014i3010[*][*][*][*][*][*][*][*][*][*][*][*] [*] 19430-01135P2/40/13SewingYarn -BlackT1Z020i4013[*][*][*][*][*][*][*][*][*][*][*][*] [*] Exhibit 14.1 UNIFI, INC. ETHICAL BUSINESS CONDUCT POLICY STATEMENT(As Revised July 23, 2014) Table of Contents 1.Legal Compliance and Ethical Standards Generally12.Conflicts of Interests23.Protection and Use of Company Property34.Insider Trading45.Record-Keeping, Accounting and Related Matters56.Relationships With Customers, Suppliers and Other Companies67.Workplace Environment and Behavior108.Payments to Government Personnel119.Government Investigations1210.Some Special International Matters1311.Marketing and Media; Investor Relations1412.Use of Networks, Email and Other Internet Services1513.Political Activities1514.Reporting Suspected Violations1615.Violations, Interpretations, Waivers and Other Administrative1716.Disclaimer of Employment Contract18  ETHICAL BUSINESS CONDUCT POLICY STATEMENT Unifi, Inc. ("Unifi" or the "Company") is committed to the highest standards of ethical business conduct, based on fundamental principles ofintegrity and fair play as well as compliance with applicable laws, rules and regulations. Such conduct is required of Unifi personnel in the performance oftheir jobs or other Company responsibilities, whether such responsibilities relate to internal Company matters or to relationships with customers,suppliers, competitors or other members of the communities in which the Company operates. For purposes of this Ethical Business Conduct PolicyStatement (the “Ethics Policy Statement”), the term “Unifi personnel” or “Company personnel” includes members of the Company’s Board of Directors(the “Board”) as well as the Company’s employees. This Ethics Policy Statement has been adopted by the Board, and it is part of the Company’s broader program to promote among all personnelthe Company’s commitment to ethical business conduct and to assist them in resolving questions and in reporting suspected violations without fear ofretaliation or other reprisal. The Office of Corporate Compliance has been established to provide guidance and implement procedures to assist Companypersonnel in complying with this Ethics Policy Statement. All executive officers, Vice Presidents and others who supervise subordinate personnel areresponsible for supporting such implementation and assisting with monitoring compliance. All Unifi personnel have the responsibility to ask questions, seek guidance, promptly report suspected violations, and express any concernsregarding compliance with this Ethics Policy Statement. (Section 14 describes how concerns can be reported, including by using the confidentialCorporate Hotline that Unifi maintains.) All Company personnel, regardless of office or position, shall be held accountable for compliance with thisEthics Policy Statement. A failure to comply will warrant appropriate discipline, which may include termination of employment or one’s otherrelationship with the Company, and may require notification of law enforcement authorities if criminal conduct is also involved. As discussed in Section 15, this Ethics Policy Statement has been adopted to support compliance with the Company’s various policies that focuson specific matters, by highlighting the ethical behavior aspects. It does not replace or supersede any such policy, each which continues to apply andmust be understood and followed by all Company personnel to whom they relate. 1.Legal Compliance and Ethical Standards Generally Complying with the law, both in spirit and letter, is the threshold standard for the Company’s commitment to ethical business conduct. Severalof the more frequently implicated laws or regulations are addressed specifically in this Ethics Policy Statement. But, this threshold standard applies to allapplicable laws, rules and regulations and all Company personnel, regardless of where they are based or may travel to conduct Company business. The principles of integrity and fair play comprise the foundation of the Company’s commitment. They underlie the other values that are reflectedin this Ethics Policy Statement, and they include, as integral components, the principles of honesty and doing the right thing in all business dealings. Theremaining sections of this Ethics Policy Statement are built upon these general principles and standards. 1 2.Conflicts of Interests Unifi respects the rights of its personnel to manage their personal affairs, and Unifi does not wish to intrude upon such personal matters. At thesame time, Unifi requires that a person’s outside activities and personal interests not hinder, distract or otherwise adversely affect the performance of his orher job or other responsibility to the Company. All Unifi personnel must perform their responsibilities in the best interest of Unifi, and they must avoidsituations that present an actual or potential conflict between their personal interests and the interest of Unifi. As a result, conflicts of interests are generally prohibited as a matter of Unifi policy. Exceptions may only be made in accordance with thefollowing procedures. For an employee who is not an executive officer, all potential conflicts of interests must be reported to (and approved in writing by)an executive officer or by a Vice President in the reporting chain of the employee’s primary work department or area. Certain situations, as discussedelsewhere herein, may require express approval of an executive officer or the Corporate Compliance Officer. For directors and executive officers, allpotential conflicts of interests must be reported to (and approved by) the Board or by a committee of the Board to which such approval authority mayhave been delegated, such as the Corporate Governance and Nominating Committee (the “Governance Committee”) or the Audit Committee. A “conflict of interests” exists when someone’s personal interest conflicts in any way with an interest of Unifi, such that it threatens the person’sproper performance of his or her duty to Unifi. A conflict of interests can arise in a wide variety of situations, including when a person, or members of hisor her family, receives an improper personal benefit as a result of his or her position with Unifi. Set forth below are examples of how a conflict of interestscan arise. However, this Ethics Policy Statement cannot specifically address every potential situation. Company personnel are expected to evaluateclosely the appropriateness of any activity or relationship that might give rise to a conflict of interests and to seek guidance if they have any questions. Non-Unifi Employment - Unifi does not wish to interfere unreasonably with an employee’s activities outside the hours required to work for theCompany. However, Unifi personnel may not work for Unifi’s customers or suppliers, for consultants related to Unifi’s field of interest, or for competitorsof Unifi, without prior written approval of an executive officer. Otherwise, Unifi personnel may engage in other business activities, provided that: ●Unifi’s relationship with its customers or suppliers is not adversely affected; ●Unifi property is not involved without appropriate approval; ●job performance and attendance are not adversely affected; and ●Unifi work time is not used to conduct the outside business activity. 2 Gifts and Entertainment - The legitimate purpose of business entertainment and gifts is to help create good will and sound workingrelationships; it is not to gain unfair advantages for Unifi or personal benefits for any Unifi personnel. Yet, the receipt or giving of gifts or favors may beseen as an improper inducement to some concession or reciprocal benefit. Unifi wants its customers, suppliers and other vendors to understand that theirbusiness relationship with Unifi is based on their respective competitive abilities to meet Unifi’s business needs. Accordingly, it is Unifi’s policy that nogift or entertainment should ever be offered, provided or accepted by any Unifi personnel, or any of their family members, unless it satisfies theexceptions or limitations contained in Section 6 of this Ethics Policy Statement. Significant Financial Interest In Certain Others - Unifi personnel and members of their household should not have a significant investment orother significant financial interest in the business of a customer, a supplier, a competitor, or an actual or potential participant in a transaction or any otherbusiness venture involving Unifi. Relatively small investments in the securities of publicly owned companies would not normally be consideredsignificant, and thus would not be a violation of this guideline. The amount that would be considered significant will undoubtedly vary among Companypersonnel, depending on their respective personal circumstances. The Corporate Compliance Officer can (and should) be consulted for guidance aboutthe implications of a person’s specific circumstances. 3.Protection and Use of Company Property All personnel have the responsibility to protect Company property and other resources from loss, theft or misuse and not to use Companyproperty for non-Unifi activities without appropriate authorization. Information is one of Unifi’s most valuable assets. The protection of Companyinformation, along with the Company’s tangible property, from unauthorized use, disclosure or destruction is the responsibility of every Unifi employee.Some examples are highlighted here. Protection of Company Information - Company information is available to employees only on a need-to-know basis and must be used only forapproved Company purposes. All personnel should maintain the confidentiality of information entrusted to them by the Company or its customers orsuppliers, except when such disclosure is authorized by an executive officer or by a Vice President in the reporting chain of the employee’s primary workdepartment or area, or such disclosure is legally mandated. Use of Company Information for Personal Gain - As with the Company’s tangible property, no Company personnel may use Companyinformation for personal financial profit or other personal advantage. More generally, Unifi personnel should not take for themselves any businessopportunity that is discovered through the use of Company information or other property, or of which they become aware because of their position withthe Company. Any such opportunity is a “corporate opportunity” that belongs to the Company. This restriction does not prevent any employee frompursuing or taking a job with someone else. Intellectual Property Rights - Copyrights protect original works of authorship (such as technical papers, news articles, software, videos andartistic works) that are in a fixed form. Patents protect new and non-obvious products, processes, equipment and compositions. “Trade secrets” can cover avariety of sensitive information or know-how and have a special definition in the law, but where that definition is met, the information is protected.Copyrights, patents, “trade secrets” and other rights to know-how and intellectual property are valuable assets of the persons to whom they belong. 3 Unifi’s policy is to honor the valid intellectual property rights of others, and Unifi expects others to honor such rights of Unifi. Consistent withthis policy, Unifi expects and requires all Company personnel to observe the following: ●Unifi personnel may not copy, reproduce otherwise or distribute (including electronically) any copyrighted work without the permission ofthe copyright owner or its authorized agent, or unless an exception is otherwise recognized for limited use. ●With regard to computer software, Unifi personnel may copy and use software that is owned by others only in accordance with theapplicable licensing agreement. ●Prior to commercialization, all new products and processes must be cleared by the Company’s Legal Department to ensure theircommercialization will not infringe any valid patent or other intellectual property right of another person. A finding of infringement couldresult in Unifi losing its right to make the infringing product and may require payment of damages based upon the sales of the infringingproduct. Inventions as Company Property - Unifi’s future growth and competitiveness depend in part upon the success of its research and developmentefforts. Any invention or other intellectual property that is conceived by Unifi personnel while employed by Unifi, and that relates to Unifi’s existing orcontemplated business, shall be the exclusive property of Unifi, unless an express written agreement otherwise has been executed by an executive officer. 4.Insider Trading No Company personnel may buy or sell stock or other securities of Unifi (or any other company) while in possession of “material nonpublicinformation”. Such conduct is not only unethical and a violation of Unifi policy, it is also illegal. In the United States, the federal securities laws prohibit the purchase or sale of securities by a person, in breach of a fiduciary duty or otherrelationship of trust or confidence, while he or she is in possession of material non-public information relating to those securities. (Such information issometimes referred to as “inside information”.) The federal securities laws also prohibit persons from disclosing material non-public information to anyother person (called “tipping”)who might trade in the relevant securities while in possession of the inside information. These laws apply to all levels ofUnifi personnel and their families, not just Unifi’s directors and officers. Information is “non-public” if it is not generally available to the public. The term “securities” not only includes Unifi’s common stock, it alsoincludes stock options, restricted stock and restricted stock units, and other financial instruments that relate to or derive their value from Unifi’s securities(whether or not issued by Unifi). 4 Information is “material” if its disclosure would affect a reasonable investor’s decision to purchase or sell the securities. Information concerningUnifi’s sales, earnings, business prospects, significant acquisitions or mergers (or plans therefor), and major litigation developments are typical examplesof material information. Other examples of information that may be considered material include: ●news of major changes in senior management ●loss of important contracts or customers ●potential dividends or other planned action regarding Unifi stock ●significant product developments or discontinuations ●a major financing transaction or anticipated major expenditure These are not, however, the only types of information that could be material. Violations of the securities laws are taken very seriously, and government agencies regularly monitor trading activities. Violations can beprosecuted even when the amount involved is small or when a “tipper” made no profit at all. Violations can result in serious criminal and civil penaltiesagainst the individuals involved. To avoid even the appearance of impropriety and to facilitate compliance with federal securities laws, Unifi policy also prohibits Unifi personnelfrom buying or selling “put” or “call” options, or making “short sales” of Unifi stock, whether or not in possession of inside information. In addition tothe above, other restrictions apply to Unifi’s officers and directors. 5.Record-Keeping, Accounting and Related Matters Unifi requires honest and accurate recording and reporting of information in order to make responsible business decisions and to provide anaccurate account of its performance in public disclosures. Unifi is committed to full compliance with all requirements applicable to its public disclosures,and especially with respect to accounting and related matters that can affect Unifi’s financial statements or reports that are covered by rules andregulations of the U.S. Securities and Exchange Commission (the “SEC”) or any stock market on which Unifi’s securities are traded. The accurate andtimely reporting of Unifi’s financial results and financial condition requires that all financial information be recorded promptly and accurately, and thatthe Company’s systems for recording and reporting that information function properly and be subject to regular and thorough evaluations. All of Unifi’s books, records and other accounts must be maintained in reasonable detail, must appropriately reflect Unifi’s transactions and mustconform both to applicable legal and accounting requirements and to Unifi’s system of internal controls. Unrecorded or “off the books” accounts, funds orassets should not be maintained under any circumstances. No one may alter, knowingly make misleading entries or falsify Company records. Intentionalaccounting misclassifications and improper acceleration or deferral of expenses or revenues are examples of unacceptable reporting practices and seriousviolations of Company policy. Each Unifi employee is responsible for the integrity, completeness and accuracy of the Company records that he or sheprepares or maintains. Many employees regularly incur business expenses that are reimbursed by Unifi; these must be documented and recordedaccurately in accordance with Unifi’s employee reimbursement policy. Such reimbursement matters are a part of the record-keeping requirements of thisEthics Policy Statement. 5 It is also a violation of law as well as Unifi policy for any Unifi employee to attempt to improperly influence or mislead any accountant engagedin preparing Unifi’s audit. All personnel are responsible for reporting to Unifi any questionable accounting, internal accounting controls or auditingmatters that may come to their attention. They may report concerns regarding these matters, without fear of retaliation or other reprisal of any kind, on aconfidential and/or anonymous basis, by following the procedures as set forth in Section 14 for reporting suspected violations of this Ethics PolicyStatement. These procedures include the Company’s Corporate Hotline described in Section 14. All Company records, whether in physical or electronic form, must be retained in accordance with any Unifi records management and retentionguidelines that have (or may be) established, and, in any event, in accordance with applicable legal requirements. Without limiting the foregoing, in theevent of litigation or a governmental investigation, Company personnel must consult with the Office of the General Counsel before destroying anyrecords that might relate in any way to such a matter, unless express approval has already been obtained for the proposed action from an executive officeror from a Vice President in the reporting chain of the employee’s primary work department or area. 6.Relationships With Customers, Suppliers and Other Companies Unifi sells and purchases superior products and services on the merits of competitive pricing, quality of work and materials, and timelyperformance. Unifi does not want to conduct business on any other basis. In all relationships, including with its competitors, Unifi adheres to itsfundamental principles of integrity and fair play. That means, among other things, that Unifi and all of its personnel must strive to treat other parties fairlyand honestly, by doing what is right in accordance with those principles, as well as what is legal. These principles lead to several important policyguidelines for behavior by Unifi personnel, including the following: Contacts with Competitors - In all contacts with competitors or potential competitors, Unifi must avoid any conduct that suggests an express orimplied understanding or agreement exists with respect to prices or other terms of sale or production, or the allocation of customers, markets or territories.Such agreements or understandings can serve as the basis for criminal liability under the antitrust laws of the United States or the comparable“competition” laws of other countries. Such violations could expose an employee to imprisonment and the Company to massive monetary penalties andsignificant civil damage claims. Therefore, Unifi policy prohibits any discussion or communication with any representative of a competitor or a potentialcompetitor concerning, among other things, the following: ●Prices, pricing policies and bidding information 6 ●Discounts, royalties or promotions ●Credit or shipment terms, or other conditions of sale ●Strategies for selection or development of customers ●Strategies for development or rationalization of territorial markets ●Strategies for products to be manufactured and/or sold ●Production quantities or quotas ●Employee compensation practices Moreover, Unifi personnel should not ask someone else to determine what competitors will do in response to a proposed business action, whereobtaining an answer would likely or reasonably involve the person contacting a Unifi competitor about a prohibited matter. Unifi personnel cannot doanything indirectly that would be a violation of law or Unifi policy if done directly. Supplying Goods and Services - No Unifi employee may benefit, or seek to benefit, personally from a relationship that Unifi has with a customeror supplier. All employees must be free from the influence of personal considerations when representing the Company in transactions with outside parties;when making recommendations related to such transactions; or when making decisions about such transactions. As discussed in Section 2 of this EthicsPolicy Statement, all personnel should avoid situations that could lead to divided loyalties or present the appearance of a conflict of interests. Giving/Receiving Gifts or Favors - Unifi personnel and members of their household should not offer, solicit or accept any items of value to orfrom any person or organization that does or seeks to do business with, or is a competitor of, the Company, if doing so may be construed as an attempt toinfluence or induce business in an inappropriate manner. If a gift or other benefit is offered to an employee that is not normally associated with customaryand approved Unifi business practices, an executive officer or Vice President (or his or her designee for such matters) must approve its acceptance. The offer or acceptance of cash, cash equivalents or securities is not appropriate under any circumstances. An employee or a member of his or herhousehold may accept promotional premiums or discounts on personal purchases of a supplier’s or customer’s product if such premiums or discounts areavailable to the public generally or, in most cases, if such items are offered generally to all other Company employees. The unsolicited giving or receiving of meals, refreshment, travel arrangements, lodging or accommodations, entertainment, tickets, small gifts orgratuities, and other incidental benefits may be allowed, under the following guidelines, if the purpose is to hold bona fide business discussions or tofoster legitimate business relations: 7 ●they are consistent with lawful and acceptable business customs and practices in the particular location; ●they are not in violation of the ethical guidelines of the other person’s company; ●they are of reasonable value and (if given by the Unifi employee) would be paid by the Company’s normal expense reimbursementprocedures; ●they cannot reasonably be construed as a bribe, pay-off or kickback; ●they will not cause, and would not reasonably be perceived to cause, the recipient to alter normal business judgment concerning anytransaction with the Company or otherwise impair the individual’s loyalty to his or her employer; and ●they would not be an embarrassment to the Company if publicly disclosed. Under no circumstances should any gift, entertainment, meal, transportation, lodging or other thing of value be given to an employee of any U.S. stateand federal agency, unless specific confirmation has been obtained from the Office of the General Counsel that it is lawful to do so in the particularcircumstances or context. In some countries outside the United States, local customs may encourage the giving or exchange of gifts in a business context on specialoccasions. In these countries, such customary giving of gifts may be allowed by Unifi, provided that the practice is lawful in the location and the gifts areof nominal value; the action cannot be construed as seeking special favor; and prior approval has been obtained from an executive officer or from a VicePresident in the reporting chain of the employee’s primary work department or area. Where Company guidelines would not normally permit an employeeto accept a specific gift, but a local custom would make refusal of the gift awkward or insulting, the gift can be accepted, if it is lawful to do so in suchcountry. The employee should immediately consult with his or her supervisor or manager, who in turn shall immediately consult with an executive officeror a Vice President in the reporting chain of the employee’s primary work department or area, concerning the appropriate disposition of the gift. Inaddition, the Office of Corporate Compliance should be informed about the matter. Any employee who is asked to make a questionable payment by a third party, or who is offered something of value in the course of his or her jobduties that does not clearly fit within the above limited categories of exceptions, should immediately contact an executive officer or a Vice President inthe reporting chain of the employee’s primary work department or area for guidance. The Office of the General Counsel should also be promptly notifiedabout the matter. Receiving Confidential Information from Other Companies - Unifi’s policy is not to accept information from other companies that could bedeemed confidential, restricted or limited in its disclosure or use, unless a written agreement specifying the rights and obligations of all parties has beenapproved by Unifi’s Legal Department and signed by an authorized representative of each party. A properly approved and executed agreement isnecessary to help assure that Unifi’s business, research and development, and technical services activities are not compromised, and that an unwantedconfidential relationship is not claimed by another party. An appropriate agreement can also help to avoid the improper receipt of information under theEconomic Espionage Act of 1996. 8 As a general matter, until such an agreement is in place, Unifi employees should refuse to discuss or accept the confidential information ofothers. Examples of such confidential information could include, but is not limited to, unsolicited disclosures by outside inventors; drawings andmanuals that bear markings asserting confidentiality; proprietary designs, processes, methods, systems, procedures or formulas; or confidential financialinformation or business planning documents. An executive officer or a Vice President, acting with appropriate guidance from the Office of the GeneralCounsel, may use lawful and ethical means to obtain non-public information about others. Unifi employees visiting the offices or plants of customers, suppliers or competitors should not sign visitor registration pads or passes thatcontain secrecy agreements or confidentiality clauses. Where a secrecy or confidentiality agreement is necessary for such a visit, an appropriately draftedagreement should be approved by the Unifi Legal Department (and executed by the parties) prior to the visit. Information about Other Companies - Unifi uses confidential information about other companies in an appropriate business context and limitsthe availability of such information to those who reasonably need it to conduct Unifi’s business. Unifi will not use any illegal or improper act to obtainanother company’s trade secrets or other confidential business information. The use of industrial espionage, trespassing, burglary, wiretapping or anyother such unlawful or unethical tactic to obtain such information, or for any other purpose, is prohibited. Unifi also will not hire a competitor’s employees to obtain confidential information, or improperly solicit confidential data from employees ofany party. A Unifi employee must not disclose or discuss confidential information from a previous employer with any Unifi employee. Any Unifiemployee who is obligated under any written agreement of confidentiality with a former employer must comply with the terms of any such agreement. Benchmarking And Information Exchanges - Benchmarking is a structured approach for exchanging and analyzing information between oramong companies. Any exchanges of information with, or benchmarking of, competitors, whether directly or through a third party or consultant, must becarefully examined to determine whether they raise concerns under antitrust or competition laws. Any such benchmarking or exchanges of informationshould be approved in advance by the Office of the General Counsel. Trade Associations and Industry Groups - Trade associations and industry groups typically involve meetings of competitors. In order to assurecompliance with antitrust and competition laws and regulations, membership in such an organization, whether of competitors or customers or suppliers,require the advance approval of the Office of the General Counsel. At such meetings, Unifi personnel should not engage in formal or informal discussionof pricing or other similar matters with competitors. 9 7.Workplace Environment and Behavior Unifi’s policies and procedures for its workplace are designed to ensure that all employees are treated fairly and with respect; that employeestreat others with the same respect; and that the physical spaces where Unifi employees work reflect Unifi’s commitment to health and safety andsustainability of the environment. These policies and procedures cover a broad range of legal requirements and standards as well as the Company’sfundamental principles for ethical business conduct. While the following matters are highlighted here for special attention, all such policies andprocedures are subject to this Ethics Policy Statement. Discrimination and Harassment - At the core of Unifi’s workplace behavior protocols and practices is Unifi’s prohibition of discrimination onthe basis of race, color, religion, sex, sexual orientation, age, national origins, disability, veteran status, marital status or any other factor prohibited bylaw (each an “Anti-Discrimination Factor”). This policy applies to all personnel actions, including recruiting, hiring, promotions, compensation andbenefits, transfers, layoffs and terminations. Unifi is committed to providing a workplace that is free from all forms of discrimination and conduct that can be considered harassing, hostile orunlawfully coercive. Unifi’s policy prohibits any form of harassment of employees by managers, supervisors or co-workers, both in the workplace and off-premises, including at social activities conducted or sponsored by Unifi. Similarly, Unifi will not tolerate harassment by its employees of non-employeeswith whom Unifi employees have a business relationship. If an employee believes that he or she has been subjected to discrimination or harassment of any type, the employee is encouraged to promptlynotify the Human Resources Department or Unifi’s Legal Department, and the employee may also notify an executive officer or a Vice President. Anysuch person who is provided such notice (and any supervisor or manager who becomes aware of possible discrimination or harassment against asubordinate whom he or she supervises) must immediately inform the Office of the General Counsel. In lieu of providing notice personally to any suchperson, however, an employee may use the Company’s Corporate Hotline (as described in Section 14) to make a confidential and/or anonymous report ofthe behavior. All reports of discrimination or harassment will be investigated promptly and, to the extent possible, confidentially. Broad Scope of Harassment - Harassment can take a variety of forms. Words and comments (including would-be “jokes”), signs, pictures,posters, emails or other electronic communications, as well as physical acts of violence or intimidation, or unwelcome contact or gestures, that are basedon an Anti-Discrimination Factor may constitute harassment. Harassment may include conduct that is not directed at a particular individual, but thatoccurs in his or her presence. Any conduct that constitutes sexual harassment is particularly pernicious. Such harassment can include unwelcome sexualadvances, explicit or implicit promises of favorable treatment in return for sexual favors, comments of a sexual nature, or the display of sexually explicitmaterials in the workplace. In any event, harassment in any form is prohibited and will not be tolerated by Unifi. 10 Alcohol and Drugs - All Unifi employees must be free of impairment due to alcohol or drugs upon reporting to work and during all work time.The illegal or unauthorized possession or use of alcohol or drugs on Company property is prohibited. The use of alcohol or drugs off-premises while onCompany business is also prohibited, if such use results in either the impairment of the employee’s business judgment or job performance or placing thesafety of the employee or others at risk. Appropriate levels of alcohol consumption at events that are principally social (including business networkingevents) are not prohibited by this guideline, although all Company personnel should be mindful that their behavior (in any situation) could potentiallyreflect upon Unifi. As a condition of continued employment, employees must notify their immediate supervisor or manager, or Unifi’s Human ResourcesDepartment, in writing of any criminal drug statute conviction within five (5) days after such a conviction. To achieve and maintain a drug-free workplace, each site within the Company will have discretion to adopt, in coordination with the HumanResources Department and the Office of the General Counsel, a lawful program of random, non-discriminatory, drug testing for all employees at that site. Restriction on Firearms - The possession of firearms on any Company property is prohibited, unless specifically authorized by site procedures;as may be necessary for an employee’s job (such as a security guard); or express approval has been obtained from an executive officer and the Office ofCorporate Compliance has been informed. Possession not only includes carrying a firearm on one’s person, it also includes having a firearm in a locker, ina Company vehicle at any time or in a private vehicle on Company property. Employee Personal Relationships - Personal relationships (including sexual or other intimate relationships) between employees on theirpersonal time and away from Company property are, as a general matter, outside the Company’s area of concern. However, the Company will becomeinvolved, and take appropriate action, if problems resulting from such a relationship manifest themselves on the job, or if a supervisor or manager engagesin such a relationship with a subordinate who is under his or her supervision. Among other things, the latter situation could constitute (or create theappearance of) a conflict of interests that is prohibited by this Ethics Policy Statement. 8.Payments to Government Personnel The U.S. Foreign Corrupt Practices Act (the “FCPA”) prohibits giving anything of value, directly or indirectly, to officials of foreigngovernments, foreign political candidates and certain others covered by the FCPA (an “FCPA Covered Official”) in order to obtain or retain business orother competitive advantage, in any jurisdiction. In addition, the United States government has a number of laws and regulations regarding businessgratuities that may be accepted by United States government personnel. The promise, offer or delivery to an official or employee of the United Statesgovernment of a gift, favor or other gratuity in violation of these rules not only violates Unifi policy, but could also be a criminal offense. State and localgovernments, as well as foreign governments, may have similar rules. In addition, as discussed in Section 10, some foreign countries have laws and ruleson similar matters that may apply to certain of the Company’s operations. 11 Unifi’s policy is to comply with all applicable laws and regulations regarding payments (or providing things of value) to both United States andforeign government officials and employees, whether or not an FCPA Covered Official. Unifi will not offer, authorize or make any illegal payments, orprovide anything of value, directly or indirectly, to a foreign or U.S. government official, political party or candidate for political office in order to causeor influence the person to use his or her influence to obtain or retain business or other competitive advantage for the Company. Both the offer and actualpayment of anything of value for such purpose is illegal. Payments to third parties are also prohibited if a person knows or should know that the thirdparty will use such funds to make such an illegal payment. In certain foreign jurisdictions, but not in all of them, it is lawful to make so-called facilitating or expediting payments in order to receive securetimely performance of “routine governmental actions” that the Company is entitled to receive under local law. In certain situations, making suchpayments is not prohibited by this Ethics Policy Statement, if appropriate procedures are followed. “Routine governmental actions” in those jurisdictionsinclude matters such as obtaining permits and licenses, processing visas and work permits, mail pickup and delivery, and providing telephone and waterservice and supply. “Routine governmental action” does not include any governmental decision whether, or on what terms, to award business or othercompetitive advantage to the Company. Where payments for routine governmental actions are required and lawful in a particular jurisdiction, they can bemade, subject to the following conditions: prior approval has been obtained from Company legal counsel; the payments are limited to customary andnominal amounts; and the payments are made only to facilitate the proper performance of a routine governmental action. Facilitating and expediting payments must be recorded as a business expense in the Company’s books and records. All payments of this typemade by employees in the course of Company travel must be properly noted and labeled on their expense statements. Employees should exercise extremecaution in the making of such payments. 9.Government Investigations It is the Company’s policy to cooperate with any government investigation. A condition of such cooperation, however, is that the Company beadequately represented in such investigations by its own legal counsel. Accordingly, if any Company employee obtains information that would lead areasonable person to believe that a government investigation or inquiry is underway (or about to commence), this information should be communicatedimmediately to the Office of the General Counsel. Appropriate handling of government investigations is very important for the Company, for management, and for all employees. Virtually all ofthe federal laws regulating the conduct of the Company's business, including antitrust, securities, OSHA, environmental, government procurement, taxand financial reporting laws, contain civil and criminal penalties. The criminal penalties can apply to the Company as well as to Company personnel whotook an action that violated the law or who failed to take action that resulted in a violation of the law. 12 Company personnel should never, under any circumstances, destroy any Company documents in anticipation of a request for those documentsfrom any government agency or a court; alter any Company documents or records; lie or make any misleading statements to any government investigator;or attempt to cause any other Company employee, or any other person, to fail to provide information to any government investigator or to provide anyfalse or misleading information. 10.Some Special International Matters Unifi conducts its international business activities in strict compliance with all U.S. laws, including laws governing matters such as antitrust,customs, duties, anti-boycott, export control and foreign corrupt practices. The Company also obeys applicable laws of the foreign countries in which itdoes business. Because some foreign laws may vary widely from those in the United States, and from country to country, care must be taken to identifyand accommodate such differences. Where comparable laws do not exist in a foreign country ─ or where the laws, customs or business practices in aparticular country are less demanding than the Company’s policies and guidelines ─ Unifi will use its higher standards to guide the actions of theCompany and its personnel. Other sections of this Ethics Policy Statement address the Company’s general requirements in this regard (e.g., Sections 1, 5,7 and 8). Some special situations are covered here, but they do not limit the applicability of the broader requirements. Anti-Bribery and Corruption - The United Kingdom Bribery Act and Brazil’s anti-corruption law (BL12.846/13) are examples of foreigncountry laws that prohibit or restrict certain types of business behavior. It is Unifi’s policy to comply with such laws to the extent they are applicable toUnifi’s activities or operations. As discussed in Section 8, the FCPA’s scope is broad and extends expressly to actions outside the United States, and Unifipersonnel must comply with the FCPA at all times. In addition, where a foreign country has more restrictive requirements, Unifi personnel must alsocomply with those requirements whenever and wherever they are applicable. Anti-Boycott - Unifi will not participate in or support economic boycotts that are not sanctioned by the U.S. government. Under the current U.S.anti-boycott laws, Unifi cannot do things such as refuse to do business with an illegally boycotted country; furnish or agree to furnish information aboutbusiness relationships with illegally boycotted countries, or pay, honor, issue, confirm or negotiate a letter of credit requiring Unifi to participate in anillegal boycott. Boycott related requests are often received orally or in the form of a contract bid, purchase order, insurance verification, letter of credit, shippingdocument, or joint venture or alliance negotiations. Any request for Unifi to participate in or support an illegal economic boycott must be reported to theU.S. government, and the failure to do so is a violation of U.S. law. These laws apply to Unifi’s operations outside as well as inside the United States. AnyUnifi employee who receives a boycott request must immediately contact the Office of the General Counsel. Export Control - The United States and many other governments have laws and regulations that govern, and in some cases prohibit, the exportor other release of certain products and technical data from one country to another. Unifi’s policy is to comply with export regulations worldwide. Exportlaws and regulations are complex and change frequently. Employees involved in export activities should remain vigilant about legal requirements andconsult with the Company’s export law legal counsel (or the Office of the General Counsel) regularly to ensure they are current on recent developments. 13 According to U.S. regulations, no controlled technical data or products may be shipped out of the United States without a license from the U.S.government. The re-export of products or technical data from the original destination to yet another country may require a re-export license prior toshipment to the re-export destination. “Technical data” means any information that can be used or adapted for use in the design, production, manufacture,utilization or reconstruction of articles or materials. Acts of exportation of technical data cover a broad range of activities that might not be readilyapparent, because they include disclosing technical information to an employee of a Unifi foreign subsidiary; disclosing technical information to a non-U.S. citizen, including Unifi employees or consultants who do not have a green card; and providing information to non-U.S. companies or individuals. Asa result, any disclosure of technical data to a non-U.S. person or entity must be reviewed, prior to export, in order to ensure compliance. 11.Marketing and Media; Investor Relations In marketing its products, Unifi must comply with any antitrust or competition law requirements, alluded to elsewhere in this Ethics PolicyStatement. There are some additional or special legal or ethical principles that also govern Unifi’s conduct with respect to advertising and relatedmarketing matters. Unifi’s policy is that all advertising should be truthful. If Unifi makes specific claims about products, it should have supporting evidence. TheCompany should not label or market its products in any way that might cause confusion with the products of others. If Unifi engages in productscomparisons, such comparisons should be fair. Comparative advertising is subject to special legal regulation and should, therefore, be cleared in advancewith the Company's Legal Department. All use of the Company's trademarks and trade names in advertising should be in accordance with applicable lawand Company policies. Advertising and promotional allowances are subject to very detailed and technical regulation under the Robinson-Patman Actand, therefore, should only be offered after approval from the Company's Legal Department. More generally, Unifi values its relationships with those in the investment community and the media generally, and the Company shouldendeavor to provide full and prompt disclosure of material developments or events. As a general matter, all communications with the media (or others in the public) relating to the Company’s public disclosures that are covered bySEC or stock market rules (or relating to financial matters otherwise) should be handled by or through the Company’s Chief Executive Officer or ChiefFinancial Officer, or his or her designee for such matters. All statements to the media (or responses to inquiries from the media) relating to operatingactivities or events should either be handled by or through the Company’s Chief Executive Officer or Chief Operating Officer, or his or her designee forsuch matters. If a particular media inquiry relates to a pending or threatened legal matter, all communications should also be coordinated with the Officeof the General Counsel or the Company's legal counsel who is handling the particular matter. Any other employee asked for a statement from a member ofthe media should respond by explaining this policy. 14 Any communication from a Company shareholder requesting information relating to the Company or its business should be forwarded to theCompany's Chief Executive Officer or Chief Financial Officer, or his or her designee, for proper handling. 12.Use of Networks, Email and Other Internet Services Unifi respects the individual privacy of its personnel, but these privacy rights do not supersede Unifi’s policies for work-related conduct orrestrictions on the use of Company property. The Company's computer networks, voice mail and e-mail systems, and Internet service systems are theproperty of the Company and are expected to be used primarily for job-related purposes. Unifi provides its employees access to such systems and servicesto help them do their work for Unifi. Incidental and occasional personal use is permitted, so long as such use does not interfere with Unifi’s needs andoperations; is not for personal gain or for any other improper purpose; and does not otherwise violate this Ethics Policy Statement. Unifi may, at any timeand without notice, inspect and monitor the use of any and all such electronic resources. Without limiting the foregoing, Unifi personnel are strictly forbidden from using the Company's computer and other electronic systems for thetransmission of messages or other materials that may constitute harassment of another person. Examples include sexually explicit messages, cartoons,jokes, unwelcome propositions or love letters; ethnic or racial slurs; or anything else that could be construed as harassment that is prohibited by thisEthics Policy Statement. All information that is created or stored on, or has passed through, Unifi’s computer system or other equipment becomes property of Unifi.Although an employee may have an individual password to access Unifi’s computer system and related equipment, the contents of e-mailcommunications and Internet activities are accessible by the Company at all times for any business purpose. While the Company permits incidental andoccasional personal use, such messages and activity are treated the same as Company messages and activity. The encryption, labeling of an e-mail ordocument as private, deletion of an e-mail or document, or any other such action does not diminish Unifi’s rights. Employees should never use any Unifiequipment to transmit a message or conduct activities that they would not want to be monitored by the Company. Unifi personnel have no right orexpectation of privacy with regard to their use of Unifi’s electronic resources. 13.Political Activities Participation in the political process is a basic right and civic responsibility, which Unifi encourages its personnel to exercise. However, it isimportant to make a distinction between individual and Company political activities, in order to assure compliance with applicable laws and regulations. Individual Political Activities - As an individual, a Unifi employee’s participation in the political process includes activities such as serving inpublic office, voting, making financial contributions, working in support of candidates and political organizations, and the like. An employee’sinvolvement in such activities should be completely voluntary. 15 Employees considering seeking public office should be aware of applicable Company personnel policies and should discuss the matter withtheir supervisor or manager and with the Company’s Human Resources Department representative who has responsibility for the particular office location,and ultimate approval must be obtained from an executive officer or from a Vice President in the reporting chain of the employee’s primary workdepartment or area. To prevent a possible conflict of interests situation, and to help ensure compliance with applicable law, at no time should Unifi’sname, information, property, time or other resources be used for an individual’s political activities that are not specifically sponsored or approved by theCompany. Company Political Activities – As a general matter, federal law restricts Unifi engagement in many corporate-level political activities,expenditures or contributions. Unifi’s policy is to comply with such legal requirements at all times. In any event, Unifi should not engage in corporate-level political activities unless the subject activity has been approved or authorized by the Board. However, the Company may maintain a “separate segregated fund” (commonly referred to as a political action committee or “PAC”) from whichit may make political contributions using funds solicited from certain employees. Unifi has a PAC, and the PAC is required, as a part of this Ethics PolicyStatement, to conduct its activities in strict compliance with applicable laws and regulations. 14.Reporting Suspected Violations All Unifi personnel should promote ethical business conduct in accordance with this Ethics Policy Statement. In addition to encouraging otherCompany personnel to behave appropriately, and asking for guidance if they have a question or concern about their own proper conduct in a particularsituation, all Company personnel are required to report any violation or suspected violation of this Ethics Policy Statement. An employee may report any such matter to his or her supervisor or manager, an officer of the Company or the Corporate Compliance Officer.Any supervisor, manager or officer who receives such a report must promptly report it up-the-ladder to the Corporate Compliance Officer. A suspectedviolation report involving an executive officer or a director must be reported up-the-ladder to the Governance Committee of the Board. Any suspectedviolation report involving an accounting or financial records matter must also be reported up-the-ladder to the Audit Committee of the Board. TheCorporate Compliance Officer shall ensure that the up-the-ladder reports are made promptly; and, if the Corporate Compliance Officer is not also theCompany’s General Counsel at the particular time, then he or she shall also promptly notify the General Counsel about any such suspected violationreport. As a general matter, Unifi would prefer that an employee identify himself or herself in making a suspected violation report, because that mightfacilitate Unifi’s investigation of the matter being reported. However, any employee may choose to remain anonymous, and Unifi respects any suchdecision. Unifi shall use reasonable efforts to protect the identity of any person who makes a report; any retaliation or other reprisal for a report that ismade in good faith will not be tolerated. Any Unifi personnel who engage in such retaliation or reprisal are subject to discipline themselves, up to andincluding termination; and, in appropriate cases, the person may also be subject to civil and/or criminal liability. Unifi shall also use reasonable efforts toprotect the identity of the person about whom a suspected violation report is made, unless and until it is determined that a violation has occurred. 16 To facilitate reporting by personnel who want to remain anonymous, Unifi shall continue to maintain a Compliance Hotline that is available toall Unifi personnel around the world, 24 hours a day, seven days a week, and is equipped to handle the primary local language in the countries whereUnifi operates. The Compliance Hotline shall continue to be staffed by an independent firm that is not affiliated with Unifi, and, to the extent consistentwith applicable legal requirements, callers shall not be required to give their names. In all cases, employee privacy shall continue to be respected to thefullest extent possible under the law. The operator shall relay the information to the designee of the Office of Corporate Compliance, and shall providethe employee with a case number and callback date if desired. The current Compliance Hotline is 1-800-514-5265 (for domestic calls in the U.S.). For calls from one of the Company’s current internationallocations, it is: LocationAccess Code (dial first)Phone Number Brazil0800-890-0288 or 0800-888-8288800-514-5265El Salvador800-1785800-514-5265Colombia01-800-911-0011800-514-5265China108-11 or 108-10 (Mandarin)800-514-5265 Any use of these reporting procedures in bad faith or in a false or frivolous manner will be considered a violation of this Ethics Policy Statement.No person should use the Compliance Hotline for personal grievances that do not involve this Ethics Policy Statement. 15.Violations, Interpretations, Waivers and Other Administrative Any person violating this Ethics Policy Statement shall be subject to discipline, which may include termination of any employee. In somecircumstances, the Company may also have an obligation to notify appropriate law enforcement authorities, because some violations of this Ethics PolicyStatement are also violations of law. Interpretations - The Corporate Compliance Officer is responsible for interpreting and applying this Ethics Policy Statement to specificsituations in which questions may arise. The Office of Corporate Compliance will maintain a record of interpretations issued under this Ethics PolicyStatement, so that such interpretations can be consistent throughout the Company. 17 Requests for Waivers or Exceptions - If an exception is permitted to the application of a provision of this Ethics Policy Statement, any employee(other than an executive officer, who should follow the procedures below) who believes that an exception is appropriate in his or her situation should firstcontact his or her immediate supervisor or manager. If the immediate supervisor or manager agrees that an exception is appropriate, the approval of anexecutive officer, a Vice President in the reporting chain of the employee’s primary work department or area, or the Corporate Compliance Officer mustthen be obtained. If the immediate supervisor or manager does not agree, the employee may nonetheless choose to seek an interpretation from anexecutive officer or such a Vice President or from the Corporate Compliance Officer. In any situation where the Corporate Compliance Officer is notinvolved in making the decision about a request for an exception, the Office of Corporate Compliance must nonetheless be informed about the requestand its disposition. The Office of Corporate Compliance shall maintain a record of all requests (and the disposition thereof) for an exception to anyprovision of this Ethics Policy Statement. Procedure for Executive Officers - Any violation of this Ethics Policy Statement by an executive officer shall be reported to the AuditCommittee or the Governance Committee of the Board, depending upon which such committee the Board has delegated responsibility to handle suchmatters. Any request for a waiver of or exception from any provision of this Ethics Policy Statement by an executive officer shall be handled by the AuditCommittee or the Governance Committee, as the case may be. A waiver for the benefit of an executive officer must be promptly disclosed in accordancewith applicable law or stock exchange rules. Distribution and Acknowledgement - All Company personnel shall be given a copy of this Ethics Policy Statement and shall be asked to sign astatement acknowledging that they have received and read it. (Every new employee must be given a copy of this Ethics Policy Statement, and asked toacknowledge receipt of it, not later than one week after being hired.) Changes or amendments to this Ethics Policy Statement must be provided to allCompany personnel expeditiously. If there are interpretations of this Ethics Policy Statement that have broad application, they must also be distributedexpeditiously to all Company personnel in an appropriate manner. (In all cases, the Company shall obtain a translation into other languages as necessaryto ensure that all Company personnel are able to read the contents.) Non-Exclusitivity of Important Policies - The policies stated or reflected in this Ethics Policy Statement are not all of the relevant policiesapplicable to Unifi personnel, and this Ethics Policy Statement is not a complete explanation of the various Company policies, or the laws andregulations, that are applicable to the Company and its personnel. All Company personnel have a continuing obligation to familiarize themselves withapplicable laws, regulations and Company policies that relate to their jobs or other responsibilities to Unifi. 16.Disclaimer of Employment Contract Unless there is a written employment agreement between the Company and the employee (signed by a duly authorized executive officer), anyemployee is free to leave the employment of the Company, and the Company may terminate the employment of the employee, at any time and for anylawful reason. The Company's policy is to be an employment-at-will employer. Nothing contained in this Ethics Policy Statement (or in otherpublications of the Company) is intended to be, nor shall it be construed as, an employment agreement with any person. 18Exhibit 14.2 UNIFI, INC. Code of Business Conduct and Ethics(As Revised July 23, 2014) 1.Scope of Coverage The Board of Directors (the “Board”) of Unifi, Inc. (the “Company”) has adopted this Code of Business Conduct and Ethics (the “Code ofEthics”) for the members of the Board and the executive officers of the Company (as defined in applicable regulations of the Securities and ExchangeCommission, which includes the principal executive officer, principal financial officer and principal accounting officer of the Company). Each directorand executive officer, and such other officers or key personnel as the Board may designate from time to time (each a “Covered Person” and, collectively,the “Covered Persons”), shall comply with this Code of Ethics. Compliance with this Code of Ethics shall be in addition to, and not in lieu or in limitation of, the responsibility of all Company personnel(including Covered Persons) to comply with applicable policies of the Company, including those set forth in the Unifi, Inc. Ethical Business ConductPolicy Statement. This Code of Ethics extends to conduct by a Covered Person with respect to the operations and affairs of any subsidiary of theCompany. For purposes of the latter, references herein to the Company shall be read to include subsidiaries of the Company, unless the context clearlyindicates otherwise in light of the intent of the preceding sentence. 2.General Responsibilities and Reporting If any Covered Person believes that a prohibited act under this Code of Ethics has occurred, then he or she shall promptly report such belief tothe Chair of the Audit Committee and the Company’s Corporate Compliance Officer. (If the Corporate Compliance Officer is not the Company’s GeneralCounsel, then any requirement under this Code of Ethics for communication to the Corporate Compliance Officer shall also require such communicationto be made to the General Counsel.) While the above is the required and preferred reporting procedure, any director or executive officer should feel freeto also report any such occurrence to the Chairman of the Board, the Board’s Lead Independent Director, or the Chair of the Corporate Governance andNominating Committee (the “Governance Committee”). On behalf of the Board, the Ethics Review Committee (as defined below) shall review and investigate any reported occurrence of a violation ofthis Code of Ethics, without the participation of any director who may be a subject of such report. (The Ethics Review Committee shall be the AuditCommittee or, in the discretion of the independent members of the Board, the Governance Committee or such other appropriate committee as may bedesignated by the independent members of the Board.) If the Ethics Review Committee determines that any such occurrence represents a violation of thisCode of Ethics, the Ethics Review Committee shall also determine whether (and if so, what) remedial or disciplinary action should be taken to addressthe situation appropriately. The Company shall disclose any such violation, and any remedial or disciplinary action taken, to the fullest extent requiredby federal securities or other applicable laws.  If the Ethics Review Committee determines that any such occurrence represents a violation under this Code of Ethics, but does not believe thatany remedial or disciplinary action is necessary or advisable to address the situation appropriately (or if the Ethics Review Committee or the Boardagrees to waive compliance with a provision of the Code of Ethics by any director or executive officer), the Company shall nonetheless promptlydisclose the violation or waiver, as the case may be, along with the rationale for the above decision. All Covered Persons are expected and required to provide full assistance and disclosure to the Board, the Ethics Review Committee, theCompany and any authorized advisors of the Company in connection with any review of compliance with this Code of Ethics. 3.Conflicts of Interests Every Covered Person has a duty to avoid business, financial or other direct or indirect interests or relationships that conflict with the interestsof the Company or that divide or compromise his or her loyalty to the Company. A conflict (or the appearance of a conflict) of interests may arise inmany ways. All Covered Persons must be vigilant and conscientious in all dealings in which they are involved (or have a personal interest otherwise) thatcould have an adverse effect on the Company or otherwise constitute a conflict of interests. Each Covered Person should disclose to the Chair of the Audit Committee and the Corporate Compliance Officer any conflict (or appearance ofa conflict) of interests on his or her part. Any activity or situation that presents (or even appears to present) a conflict of interests, or other division orcompromise of loyalty to the Company, should be avoided or terminated unless, after such required disclosure, it is determined by the Ethics ReviewCommittee or the Board that the activity is not harmful to the Company or otherwise improper. Even though the process of disclosure and considerationby the Company may lead to a determination that the subject relationship or transaction, despite its appearances, is not harmful to the Company and willbe permitted, it is imperative to comply with the disclosure process. 4.Conduct of Business and Fair Dealing Without limitation of any other provision of this Code of Ethics, no Covered Person shall engage in any of the following activities: •compete with the Company by providing service to a competitor as an employee, officer or director or in a similar capacity; •profit, or assist others to profit, from confidential information that is obtained in connection with the Covered Person’s service to theCompany; 2 •take personally any opportunity that is discovered through the use of Company property, information or position without first offeringsuch opportunity to the Company; •improperly influence or attempt to influence any business transaction between the Company and another entity in which the CoveredPerson has a direct or indirect financial interest or for which the Covered Person acts as an employee, officer or director or in a similarcapacity; or •take unfair advantage of any customer, supplier, competitor or other person doing business with the Company through manipulation,concealment, abuse of privileged information, misrepresentation of material facts or other unfair-dealing practice. 5.Compliance with Laws and Regulations Consistent with the Company’s business philosophy, it is the Company’s policy to comply with the laws of each country in which it or any ofits subsidiaries does business. Each Covered Person shall comply with applicable laws, rules and regulations of any such country, and shall use allreasonable efforts to oversee compliance by other Company personnel, including other Covered Persons, with such applicable laws, rules andregulations. 6.Use of Non-Public Information and Disclosure A Covered Person who knows information about the Company that is material and that has not been disclosed to the public must keep suchinformation confidential. Among other things, it is a violation of United States law to purchase or sell the Company’s securities on the basis of such non-public information. Covered Persons may not do so, and they may not provide such information to others for that or any other purpose. A Covered Person also may not buy or sell securities of any other company using material non-public information about that other companythat is obtained in the performance of his or her duties on behalf of the Company, and he or she may not provide any such information to others. A Covered Person shall maintain the confidentiality of any non-public information about the Company that is learned in the performance of hisor her duties on behalf of the Company, except when disclosure is legally authorized or mandated. Any question about the legal authority or requirementin the latter situation should be discussed with the General Counsel prior to disclosing such information. 7.Use of Company Funds, Assets and Information Each Covered Person shall protect the Company's funds, assets and information, and shall not use the Company funds, assets or information topursue personal opportunities or gain. 3 No Company funds, assets or information shall be used for any unlawful purpose. 8.Record-Keeping The Company’s policy is to make full, fair, accurate, timely and understandable disclosures in reports and documents that it releases to thepublic or files with regulatory authorities. To facilitate compliance with that policy, and to comply with applicable laws, rules and regulations relating tosuch matters, all transactions by the Company should be accurately reflected in the Company’s books and records. All books and records and bank accounts or other repositories of assets of the Company shall be subject to all normal accounting and auditingcontrols, and the falsification of any of the Company’s books and records, or the maintenance of any secret bank accounts or repositories, is strictlyprohibited. No Covered Person shall engage in any arrangement that results in any such prohibited act. 4Exhibit 21.1 UNIFI, INC. SUBSIDIARIES Unifi PercentageOf Voting NameAddress or LocationIncorporationSecurities Owned Unifi Holding 1, BV (“UH1”)Amsterdam, NetherlandsNetherlands100% - Unifi, Inc. Unifi Holding 2, BV (“UH2”)Amsterdam, NetherlandsNetherlands100% - UH1 Unifi Holding 3, BV (“UH3”)Amsterdam, NetherlandsNetherlands100% - UH2 Unifi Central America Holding, SRL (“UCAH”)St. Michael, BarbadosBarbados100% - UH2 Unifi Textiles Holding, SRL (“UTH”)St. Michael, BarbadosBarbados100% - UH2 Unifi do Brasil, LtdaSao Paulo, BrazilBrazil99.99% - Unifi, Inc. .01% - UMI Unifi Manufacturing, Inc. (“UMI”)Greensboro, NCNorth Carolina100% - Unifi, Inc. Unifi Textured Polyester, LLCGreensboro, NCNorth Carolina100% - UMI Unifi Kinston, LLCGreensboro, NCNorth Carolina100% - UMI Unifi Sales & Distribution, Inc.Greensboro, NCNorth Carolina100% - Unifi, Inc. Unimatrix Americas, LLCGreensboro, NCNorth Carolina100% - UMI Spanco International, Inc. (“SII”)Greensboro, NCNorth Carolina100% - UMI Unifi Latin America, S.A.Bogota, ColombiaColombia84% - SII 16% - UMI Unifi Equipment Leasing, LLCGreensboro, NCNorth Carolina100% - UMI Unifi Textiles (Suzhou) Co. Ltd.Suzhou, Jiangsu ProvinceP.R. China100% - UTH Unifi Central America, Ltda. de CVCiudad Arce, El SalvadorEl Salvador99% - UCAH 1% - UH2 UnifiYarns Mexico, S de RL de CVMexico City, MexicoMexico99.99% - Unifi, Inc. .01% - UMI Unifi Europe LimitedLondon, U.K.England and Wales100% - UH2 Repreve Renewables, LLCGreensboro, NCDelaware60% - UH3 Exhibit 23.1 Consent of Independent Registered Public Accounting Firm The Board of DirectorsUnifi, Inc.: We consent to the incorporation by reference in the registration statements No. 33-23201, No. 33-53799, No. 333-35001, No. 333-43158, No. 333-156090, and No. 333-191870 on Forms S-8 and No. 333-140580 on Form S-3 of Unifi, Inc. and subsidiaries of our reports dated September 10, 2014, withrespect to the consolidated balance sheets of Unifi, Inc. and subsidiaries as of June 29, 2014 and June 30, 2013, and the related consolidated statements ofincome, comprehensive income (loss), shareholders’ equity, and cash flows for each of the years in the three-year period ended June 29, 2014, and theeffectiveness of internal control over financial reporting as of June 29, 2014, which reports appear in the June 29, 2014 annual report on Form 10-K ofUnifi, Inc. /s/ KPMG LLP Greensboro, North CarolinaSeptember 10, 2014 Exhibit 31.1 Certification of Chief Executive OfficerPursuant to Section 302 of the Sarbanes-Oxley Act of 2002 I, William L. Jasper, certify that: 1. I have reviewed this Annual Report on Form 10-K of Unifi, Inc.; 2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make thestatements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; 3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects thefinancial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; 4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined inExchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) forthe registrant and have: a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision,to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within thoseentities, particularly during the period in which this report is being prepared; b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under oursupervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for externalpurposes in accordance with generally accepted accounting principles; c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about theeffectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s mostrecent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely tomaterially affect, the registrant’s internal control over financial reporting; and 5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to theregistrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which arereasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internalcontrol over financial reporting. Date: September 10, 2014 /s/ WILLIAM L. JASPER William L. Jasper Chairman of the Board and Chief Executive Officer (Principal Executive Officer) Exhibit 31.2 Certification of Chief Financial OfficerPursuant to Section 302 of the Sarbanes-Oxley Act of 2002 I, James M. Otterberg, certify that: 1. I have reviewed this Annual Report on Form 10-K of Unifi, Inc.; 2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make thestatements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; 3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects thefinancial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; 4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined inExchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) forthe registrant and have: a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision,to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within thoseentities, particularly during the period in which this report is being prepared; b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under oursupervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for externalpurposes in accordance with generally accepted accounting principles; c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about theeffectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s mostrecent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely tomaterially affect, the registrant’s internal control over financial reporting; and 5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to theregistrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which arereasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internalcontrol over financial reporting. Date: September 10, 2014 /s/ JAMES M. OTTERBERG James M. Otterberg Vice President and Chief Financial Officer (Principal Financial Officer) Exhibit 32.1 CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350,AS ADOPTED PURSUANT TOSECTION 906 OF THE SARBANES-OXLEY ACT OF 2002 In connection with the Unifi, Inc. (the “Company”) Annual Report on Form 10-K for the period ended June 29, 2014 as filed with the Securities andExchange Commission on the date hereof (the “Report”), I, William L. Jasper, Chairman of the Board and Chief Executive Officer of the Company, certifypursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that: (1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and (2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of theCompany. Date: September 10, 2014 /s/ WILLIAM L. JASPER William L. Jasper Chairman of the Board and Chief Executive Officer (Principal Executive Officer) Exhibit 32.2 CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350,AS ADOPTED PURSUANT TOSECTION 906 OF THE SARBANES-OXLEY ACT OF 2002 In connection with the Unifi, Inc. (the “Company”) Annual Report on Form 10-K for the period ended June 29, 2014 as filed with the Securities andExchange Commission on the date hereof (the “Report”), I, James M. Otterberg, Vice President and Chief Financial Officer of the Company, certifypursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that: (1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and (2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of theCompany. Date: September 10, 2014 /s/ JAMES M. OTTERBERG James M. Otterberg Vice President and Chief Financial Officer (Principal Financial Officer) 

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