Unifi (UFI) risk factors, FY2025 10-K

Strategic Risks

1. 01A significant portion of our sales is dependent upon demand from a few large brand partners
2. 02The success of UNIFI’s business is tied to the strength and reputation of its brands. If the reputation of one or more of our brands erodes significantly, it could have a material impact on our financial results
3. 03UNIFI’s future success will depend in part on its ability to protect and preserve its intellectual property rights, and UNIFI’s inability to enforce these rights could cause it to lose sales, reduce any competitive advantage it has developed, or otherwise harm its business

Financial Risks

1. 04UNIFI has significant foreign operations, and its consolidated results of operations and business may be adversely affected by the risks associated with doing business in foreign locations, including the risk of fluctuations in foreign currency exchange rates
2. 05UNIFI may be subject to greater tax liabilities
3. 06UNIFI requires cash to service its indebtedness and to fund capital expenditures and strategic initiatives, and its ability to generate sufficient cash for those purposes depends on many factors beyond its control

Operational Risks

1. 07UNIFI depends on limited sources for certain of its raw materials, and interruptions in supply could increase its costs of production, cause production inefficiencies, or lead to a halt in production
2. 08A disruption at one of our facilities could harm our business and result in significant losses, lead to a decline in sales, and increase our costs and expenses
3. 09Our business and operations could suffer in the event of cybersecurity breaches
4. 10A decline or change in general economic conditions, political conditions, and/or levels of consumer spending could cause a decline in demand for textile products, including UNIFI’s products

General Risks

1. 11Unfavorable changes in trade policies and tariffs and/or violations of existing trade policies could weaken UNIFI’s competitive position significantly and have a material adverse effect on its business
2. 12In order to compete effectively, we must attract and retain qualified employees, and our failure to do so could harm our business and our results of operations
3. 13Catastrophic or extraordinary events, including epidemics or pandemics such as the COVID-19 pandemic, could disrupt global economic activity and/or demand and negatively impact our financial performance and results of operations
4. 14The risks associated with climate change, localized energy management initiatives, other environmental impacts and compliance with new reporting regulations could negatively affect UNIFI’s business and operations