Unifi, Inc. (NYSE:UFI) Q4 2023 Results Conference Call August 24, 2023 8:30 AM ET
Company Participants
Al Carey - Executive Chairman
Eddie Ingle - CEO
Craig Creaturo - CFO
A.J. Eaker - Treasurer
Conference Call Participants
Anthony Lebiedzinski - Sidoti & Company
Chris Reynolds - Neuberger Berman
Operator
Good morning, and thank you for attending Unifi's Fourth Quarter Fiscal 2023 Earnings Conference Call. Today's conference is being recorded. [Operator Instructions] Speakers for today's call include Al Carey, Executive Chairman; Eddie Ingle, Chief Executive Officer; Craig Creaturo, Chief Financial Officer; and A.J. Eaker, Treasurer.
During this call, management will be referencing a webcast presentation that can be found in the Investor Relations section of unifi.com. Please familiarize yourself with Page 2 of that slide deck for our cautionary statements and non-GAAP measures.
I will now turn the call over to Al Carey.
Al Carey
Thank you, and good morning, everybody, and thank you for dialing in to the Unifi’s fourth quarter earnings call. I'd like to take a couple of minutes telling you about the environment that we're operating in because, I have to say, it's one of the most unusual I've ever seen. And then when I'm done doing that, I'll turn it over to Eddie Ingle, our CEO.
So you've seen the sales and EBITDA numbers for Q4, and you can see that they look very similar to Q3. And that's because volume remains depressed in North America, which drives a low level of EBITDA because we're not getting the throughput we needed to leverage our fixed assets. Now most of you are probably saying, what is going on with your business? And I fully appreciate that because Q2, Q3 and Q4 have been weak. Let me cut to the answer, and then we'll work backwards into the details.
Inventories at retail have been massively high starting last fall on apparel. They're still high today. The retailers are working them down, but until they come down, ordering for yarn has been scarce. So you may ask, when will the inventory be done out? Probably the end of the calendar year. That's what we hear from our retail partners. When will orders begin flowing back into Unify? Probably around the October time frame. How big will the ordering be and how fast will it come back? I don't know. There's still a fair amount of uncertainty. But listening to retailers, I'd say, it will probably be conservative at first as they're going to be cautious when they start back ordering and especially, after they just came out of a troubled time of heavy inventories.