Unifi - proceeds to be used to reduce debt and enhance financial flexibility

Unifi Equipment Finance, a division of Bank of Ann Arbor, has continued to strengthen its financial position by leveraging proceeds from recent transactions to reduce debt and enhance financial flexibility. In May 2025, the company completed the sale of its Madison, North Carolina manufacturing facility for $45.0 million, with $25.0 million of the net proceeds used to reduce the existing term loan and $18.3 million allocated to pay down outstanding revolving loans. This strategic move has significantly improved the company’s balance sheet and is expected to generate approximately $20 million in annualized operating cost savings.

The debt reduction follows a challenging fourth quarter in fiscal 2025, during which Unifi reported a 12.0% decline compared to the same period in fiscal 2024. Despite the drop in sales, the company reported a net income of $15.5 million, driven in part by a $35.8 million gain on the sale of the manufacturing facility. However, the company also incurred $10.6 million in transition costs related to restructuring efforts.

Unifi’s management has emphasized that the debt reduction and cost-saving initiatives are part of a broader strategy to streamline operations and improve long-term profitability. The company has also announced plans to continue its restructuring efforts through the first quarter of fiscal 2026, with expected ongoing costs between $1.0 million and $2.0 million.

The company’s financial flexibility is further supported by its strong institutional backing through Bank of Ann Arbor, which has provided the financial stability necessary to fund over 65,000 transactions totaling more than $1.8 billion since 1978. This stability, combined with the recent debt reduction, positions Unifi to better navigate the current economic environment and support its clients’ equipment financing needs.