Unifi, Inc. (UFI) Earnings Call Transcript & Summary

Good morning. Thank you for attending Unifi's 2022 Investor Day event. We have a great schedule ahead of us today and some exciting materials presented by select members of the Unifi management team. We also have 3 brand partners who will spend time talking about their relationship with Unifi's flagship brand, REPREVE. Speaking of REPREVE, you'll note that each slide introducing your speaker from the management team will include a list of wardrobe items available at retail that include REPREVE. For me, that includes a knit upper, button-up shirt and knit shoes. We understand the need for a quality question-and-answer session today, and we've allocated plenty of time for that at the end of the session. So I'll ask you to please hold your questions until the end. Finally, please be advised at this event will contain forward-looking statements within the meaning of the federal securities laws as well as non-GAAP financial measures. You may review our cautionary language and the non-GAAP reconciliations within the slides of the presentation. Also, this event is webcast and recorded. So looking at the agenda for today. I'll provide an overview of our business and then our Executive Chairman, Al Carey, will provide some context around our future goals. Next, CEO, Eddie Ingle, will detail the components of our growth strategy, followed by a translation of our strategy into financial goals presented by our CFO, Craig Creaturo. Then our live audience will participate in a tour of our Yadkinville facility as we take a webcast break for approximately 1 hour. When we return, we'll hear from Jay Hertwig, our Senior Vice President of Commercialization, and 3 brand partners who utilize REPREVE: WM, L2 Brands and Haggar. This will be followed by a deep dive into our sustainability and our alignment with working today for the good of tomorrow from our Senior Vice President of Technology, Innovation and Sustainability, Meredith Boyd. After that, we'll close out the day with a Q&A session. Now I would like to begin with a foundational overview of Unifi that provides context for the rest of our presentation. This will be helpful for folks looking at Unifi for the first time and serve as reminders for those of you familiar with the story. On this overview, Slide 6. I'll highlight a few items. Unifi is one of the world's leading textile solutions providers, with a commitment and track record of manufacturing synthetic and recycled performance fibers. You're going to hear a lot about this commitment to sustainability today as it's truly driving our business and will for years to come. We have nearly 3,000 employees worldwide and have been in this business for over 5 decades. Our most recent estimate of fiscal '22 sales is $800 million, representing a meaningful increase from recent fiscal years. And our operations are truly global, with manufacturing and recycling facilities here in the U.S. and the Americas as well as an asset-light approach in Asia. On Slide 7. So where are we positioned in the supply chain? Our product flow generally spans from processing recycled components and petroleum derivatives into resin, yarn and value-added yarn. While we sell much of the components along this product flow, our predominant finished good is textured yarn, which is a significant input in the apparel market. That textured yarn is sold to knitters and weavers who produce fabric for cut and sew operations that end up as branded clothing. This slide further demonstrates the differences in our geographies. First, the U.S. We process and sell along the product flow shown here, and we do that entirely with our superior asset base and innovation teams. In Asia, we also process and sell along this product flow, but we do that entirely with idle capacity and trusted partners in the Asia region. We refer to this as our asset-light model. In Brazil and Central America, we primarily import base yarn and texture it on our assets for sale into the local market. The next slide demonstrates our REPREVE process of converting recycled plastic bottles into performance fibers found in everyday items. We purchased the bale bottles from recyclers, we then chop and wash them to a uniform consistency and melt them down into chip or resin. You'll hear those terms interchangeably a little bit throughout the day. That work of chopping the flake down is in -- is performed in our state-of-the-art REPREVE bottle processing center in Reidsville, North Carolina, one of the most advanced bottle recycling facilities in the U.S. Then the chip or resin is extruded into polyester fiber that fully resembles a virgin product derived from petroleum. That work is done at our Yadkinville facility, where we're standing here today. Again, the different forms of the REPREVE Fiber is sold to knitters, weavers and other textile manufacturers. Now let's take a couple look -- look at a couple of examples of REPREVE Fiber found today in staple and filament form. Polyester staple fiber resembles cotton and is the most widely form of -- widely used form of polyester and can be found in many applications. Then filament fiber requires a more complex process that maintains a continuous strand of fiber and is often found in higher-end applications like footwear uppers, performance apparel and automotive. As you're going to hear from our brand panel later today, today's leading brands across multiple industries know their customers want sustainable solutions, and we spent the last decade-plus positioning our REPREVE brand to meet our growing list of customer needs around the globe. We have a focused growth strategy to leverage this strong demand, and I think you're going to walk away highly excited about how we position the company for further value and growth. Now I would like to turn the presentation over to Al Carey to highlight our growing momentum and outline our growth targets.

Thank you, A.J. Good morning, everybody. Thanks for coming. We welcome you to Unifi and Yadkinville. We know this is not an easy place to get to, so we appreciate you going through the trouble of coming all the way down here and spending some time with us. We're going to provide the details of our strategy today for our 4-year period between 2022 and 2025, and my name is Al Carey. I've been in this role for almost 3 years. So it's been -- I'm the rookie of the presenters for sure, but by far, the oldest. When I joined the team in 2019, I've got to tell you that I was fascinated with what was going on at Unifi. I saw a company that was trying to reinvent itself from a very tough market, which is the textile business, into something where we were going to be selling sustainable products for the good of tomorrow. And they started in those days, early days, with brands like Patagonia and North Face, and I thought, what an interesting opportunity and business. So I was very excited to be here. I mean I told my 2 daughters who are millennials, this is what Unifi does and here's what I'm going to be working on. They thought it was the coolest company in the world. I mean 2 young in their 20s saying, "Dad, that is the coolest place you've ever worked." And I worked at PepsiCo before; they were not impressed. But for -- I'll tell you what, for about 10 years, this REPREVE brand and the sustainable product really just kind of creeped along, and we had Patagonia and North Face out there. My impression is that it was an idea that was ahead of its time. And then in 2017 or so, the REPREVE brand started to get some momentum, and it started to look like a brand that really had potential because most consumers were now starting to say, we have to do something about this environment issue that we all have to live with. And then there was another jolt forward, and I would say, it was right 6 months into COVID. And -- I don't need the slide up now. COVID, for whatever reason, people began realizing, we have to get more serious about the environment and particularly, young people, millennials were saying, we demand recycled products in apparel and some of our other goods that we buy. So we wanted to tell investors about this for a while. We weren't quite ready and COVID wasn't a good time to present, but we've been thinking about it. And we also wanted to make sure before we went with an Investor Day that we could say that this plan you're going to see is, what I'd call, 80% bankable. We're not doing a lot of blue sky today. I mean there's -- we could have a wonderful presentation with 10 years out what it might be, but we want to do this more of -- it's almost like an operating plan for 4 years. So we'll get started with that. Let me just show -- if you leave today, I'd like you to have 4 thoughts in your mind about our company, and I'll start with the first slide. And this is, our growth will be propelled by REPREVE. So our company will be able to achieve $1.1 billion in sales. We believe $1.1 billion in sales by the end of 2025. REPREVE is clearly propelling that growth as it moves -- look on the slide from 2017, it was 19% of our mix. Now it's looking to be greater than 50% by 2025. And if you do the calculation, REPREVE, between the $800 million and the $1.1 billion, 80% of that growth comes from REPREVE. So the headline on this one -- first one is, REPREVE drives growth. Second, we have 3 geographic regions that are all quite different, but they all have revenue momentum and they all fit together, even though they're quite a bit different in their strategies. They all ladder up to this one grandiose strategy we have. Now watch Asia. Asia is going to grow from a mix of 10% of our business in 2017 to 34% of our business in 2025. And don't forget, asset-light in Asia is the business model, and it makes it very positive, as the mix goes up on Asia, our profitability. Brazil and North America both will see solid growth and their revenues are going to be, thanks to REPREVE also, but they're also going to have this investment in EvoCooler, which will make them more competitive and more efficient in our plants. Number three. We are going to expand REPREVE -- we're actually already expanding REPREVE into several non-apparel segments such as footwear, automotive, PPE and nonwoven materials. Eddie will take you through quite a bit of detail on this. So apparel today is 70% of our total business, and it's still going to be a lot of apparel business done by Unifi. But I would tell you that this other area presents tremendous opportunities for us and at higher margins. In some cases, significantly higher margins than what we've got today. Much of the upside that comes from these categories, non-apparel is not baked into our plan because, frankly, its business, it's work in process. It's -- I don't have orders in hand, but I'm really optimistic about where we're heading, and it could be a nice upside for the future, but not yet bankable is the way I'd describe it. And the fourth idea is, during COVID, we did not back -- we cut cost, but we did not back off on innovation because we felt that when you come out of COVID, we didn't think it would take 2 years, but here we are. But if we come out of COVID, we want to have a competitive advantage, and most companies in the middle of COVID was not making -- were not making big investments in innovation. We did. And as a result, you're going to see some of these innovations hit in this calendar year, not have to wait for another year. So for example, new product functionality like our TruTemp365, big one, EvoCoolers, which is a new technology that we'll have exclusivity on and that will provide labor savings, energy savings and capacity for our North America, Central America and Brazil facilities. And maybe the biggest idea of all is circularity, and this is an idea that consumers absolutely want and our biggest brand customers want it. The Walmart, Targets of the world, the Nikes, Adidas, this idea is -- could start out as recycling scraps off the cutting room floor into new apparel and then, at a later date, actually collecting used apparel and turning it into new apparel. And that isn't a far-fetched, blue sky idea. It's something that we're going to begin working with in a test very soon, like this calendar year. So that's what I hope you think -- leave with is the importance of REPREVE, the 3 geographies each having an important role in our company and outside apparel, and then finally, innovation. So those are the 4 key ideas. So let's get started with the presentation. I'm going to turn it over to our CEO, Eddie Ingle, and before he comes up, let me just tell you one of the greatest things that happened in our company to finally get things moving is, Eddie was a 30-year veteran who left the company for 2 years. And we were so fortunate to get him back, and since he's been back, his knowledge of the business and his association with the people that have been here for a long time have really allowed us to start putting points on the board. So Eddie, take it away.

Thank you very much, Al, for that very nice introduction. As Al said, I've been the CEO since June of 2020, and I'm -- I started out actually in our Letterkenny, Ireland plant in 1986. So it's even hard for me to imagine that. But jumping to REPREVE, I was involved with REPREVE from day 1, and having the opportunity to lead this company, the most recognized sustainable brand in the textile industry, is a great honor. And just to set the stage, with further investment in people and technology and marketing, it is our intention to keep Unifi and REPREVE as the leader in sustainable textile markets. So welcome to Investor Day. It's a beautiful day here in North Carolina. And for those of you who are here in person, welcome to Yadkinville, and welcome to the birthplace of REPREVE. This is where sustainability in textured polyester yarn started, and we're developing the technology and the brand for over 2 decades. Today, I look forward to going over with you our exciting plans for REPREVE growth, the details of our new investment in the EvoCooler texturing equipment that Al mentioned, and our 3-year strategy. Unifi is leading the transformation of the textile industry to become more sustainable, and it's not a new space for us. It's been part of our way of life for many, many years. We were an ESG company well before we even heard of ESG. And as we like to say at Unifi, we are working today for the good of tomorrow. So I hope that by the time we finish this Investor Day, you will be just as excited as I am and the Unifi team is about the future of our companies. So REPREVE. This is the REPREVE timeline and a graphic representation of our REPREVE revenue growth, and I think it's a great visual for what has happened and is happening at our flagship brand. Our goal is to reach $550 million in revenue from our REPREVE sales in fiscal 2025, just 3 years from now. And in 2025, we have a target of recycling 50 billion plastic bottles back into fiber. Now while REPREVE has been a long time in the making, the recent growth has been explosive when we sit right at the very center of a huge new mega trend, and that is sustainability. In the chart, if you look at it, you're asking the question, are we going to be less reliant on virgin raw materials and more reliant on PET post-industrial waste and PET bottles as a feedstock? And yes, we are. But we also get asked the question about our PET bottle supply. The recent data from Wood Mackenzie shows that PET bottle collections globally and PET flake production is growing at twice the pace of the virgin polyester production, and it's actually been that way for several years. And this gives us comfort that as we expand REPREVE volumes, there will be plenty of bottles for us to recycle. So you might be wondering how this growth will impact our revenues and profitability. Well, as you can see from this slide, REPREVE -- and as Al mentioned before, REPREVE is the engine for our growth. In fact, 80% of our growth over the next 3 years we expect to come from REPREVE. And our fiscal 2025 target is to have 50% of our revenue come from REPREVE fiber sales, and this growth also comes with better margins. Today, our recycled products often have gross margins that are 200 to 300 basis points better than our virgin products, but this was not always the case for REPREVE. But today, brands are willing to pay more to meet their sustainability goals from a trusted partner like Unifi. And what are the drivers for the momentum and can it be sustained? Well, as this next chart suggests, many major brands and retailers have set out very ambitious goals, and each one of them is taking a different approach. And some have targets that are lower than others, but they all have a long way to go from where they are today, and we are ideally positioned to help them reach their targets. Target has a $3 billion owned apparel brand business, and they want to get to 100% of their polyester recycled by 2025. HBI, a local company here, a $7 billion to $8 billion in business, while they have a lot of cotton, they also have a lot of recycled polyester, and they're trying to get to 100% by 2025. If you take Kohl's, they have a $3 billion apparel market, sell of their own brands, and they're trying to get to 50% by 2025. So we are, like I said, ideally positioned to help them reach their targets. But the brands and retailers, they need to know what they're sourcing and the fear of greenwashing drives companies directly towards REPREVE. As you can see from this statement from someone at a large U.S. retailer, she told us, any claim of apparel being recycled needs to be transparent so we can't be greenwashed. So not only can the retailers and brands not afford to be caught making false claims, they actually want a secure supply chain that they can with confidence claim is made from recycled content. And our FiberPrint technology is just the security system that they need to allow them to be confident in their claims. And it's not often a company like Unifi has something that solves such a large problem for customers, but we do have the solution. The tracer technology that we have developed in our REPREVE fiber is an added tracer that we make that we add to the resin. So it's with the yarn, it's with the fiber and it's with the product every step of the way. And when you couple that with our U TRUST verification system, it's incredibly powerful. Our U TRUST verification system certifies fiber, fabrics, and as you'll hear from Meredith later on, it actually now can certify the product itself. And the increased demand for co-branding of REPREVE, along with our FiberPrint security system with the added benefit of our U TRUST certification process, gives us confidence in our defensibility of our growth strategy. And that leads me to our strategy. As part of our company's transformation, we will be implementing a road map designed to grow our revenues and our profits. And this long-term strategy comprises of 4 key pillars. First, grow market share by leveraging competitive advantages -- competitive regional advantages. Now in the Americas, we're going to do that by adding new state-of-the-art texturing capacity. In Asia, we'll get there by investing in our sales and marketing efforts and expanding our supply chain partnerships, and of course, acquisitions are on the table also. Second, expand REPREVE and build sustainable markets beyond apparel, and we're going to do this by introducing our sustainable offerings to new and nontraditional high-growth markets that we've not been focused on in the past. Third, accelerate innovation and develop circular capabilities by leveraging our internal expertise to expand our new value-added innovative offerings and position Unifi as the industry leader in a rapidly growing circular textile economy. Fourth, increased brand awareness of REPREVE by investing in the promotion of our flagship brand, REPREVE, and by enhancing our co-branding opportunities and B2B and B2C engagement. Now the first pillar of our strategy is to grow market share by leveraging competitive advantages. So I'm sure you're thinking, how can the market share -- how much market share can Unifi actually gain in the markets they operate in? How do we do this? How long will it take? And this is what we'll explore over the next few minutes. We operate in the U.S. We operate our businesses in the U.S. and Central America, what we call NACA, North America and Central America, as one business model. And as you can see from today's visit, it relies on having a lot of assets with many different types of processes, and included in NACA is our nylon business. Our plan is to grow our share of the textured polyester market from 29% to 40%, a market share that we had before the U.S. imports grew to such high levels. In Brazil, our model relies on bringing in the necessary raw materials from Asia to support the local Brazilian market, and yes, we also have a world-class manufacturing facility there in the location in Alfenas. The market has been growing in Brazil for 3% to 5% a year for the last 10 years, and this growth has been supplied by imports. But we expect to be able to take textured polyester share from the imports and grow to 18% of the market, the share actually that we had back in 2012. Lastly, our Asian business model is an asset-light model, one in which we utilize partners to make our products, and it's primarily a REPREVE-based business. We do not try and compete in the commodity yarn business in Asia. And what is also interesting about this model is that one of the drivers for growth, as you'll hear from Jay Hertwig later on, is the relationships that we have with the brands in the U.S. and Western Europe. While it's hard to estimate the size of the recycled polyester yarn market in Asia, we do expect to see our revenue to double in the next few years and reach an estimated 8% of that recycled market. In summary, we have decided to take the necessary steps to expand our market share and increase our penetration into these markets by increasing our capabilities, by investing in assets and technologies in the Americas, and building out our existing commercial teams in the U.S., Asia, and Europe. So let's talk Evo, the Evo texturing technology, because this is central to our Americas growth strategy. We recognize that we needed to install more capacity in the Americas to meet this increased growth. And over a 4-year period, we will invest $100 million in the Americas to replace older machines with the new Evo texturing technology, which in turn will add much-needed capacity in the regional Americas markets and increase our competitiveness at the same time. And importantly, as Al mentioned, we have exclusive rights in the Americas to buy this equipment for many years to come. So for several months now, we've been adding new texturing capacity in Yadkinville that you'll see today, and we have a much better understanding of the real benefits of this technology, and that is where the numerical estimates that I'm about to present to you come from. Energy. It uses less. Approximately 20% less power is required to make 1 pound of yarn produced, which is especially important in places like El Salvador, where energy rates are high. The Evo occupies almost the same footprint as the existing equipment but operates at faster speeds, which allows us to increase capacity per square foot by 30% to 35%. And this new technology is more ergonomic and requires fewer resources to operate. And actually, when you're out there walking today, you'll see the operators use this equipment, and they prefer it much more to the older equipment that we have. So in the U.S., when coupled with our newly-installed quality control systems and the packing automation that you see out there, it allows us to reduce our direct labor by 25% to 35%. When it comes to maintenance, of course, it's easier. We have lower maintenance costs because it's newer equipment, but also because the cleaning cycle is stretched out by 30%. And that's a significant advantage for us because it means we have longer run times. The bottom line is that this technology will positively impact our revenue and gross profit. In the U.S. and Brazil, we will see the impact as we move into Q4 and beyond, and in Central America, we can expect to reap the benefits as we move through fiscal 2023 and into 2024. This strategic capital investment, which started with a down payment in fiscal 2020, will be completed by the end of fiscal 2024. Now as the yarn markets that we sell into our growing, there are 2 main reasons for that for us: sustainability and the move to near-shoring and offshoring. Sustainability, in today's digital society, consumers are finding their voice and they're taking a stand on things that are important to them. They are directing their moneys towards more sustainable offerings, both in retail, stores and online. And from a near-shoring and offshoring point of view, our customers are looking for ways to efficiently navigate trade legislation and gain more efficient ways to produce their goods, and as we all know, the pandemic has highlighted just how fragile the global supply chains are. Like many other industries, the brands and retailers are taking a step back to determine what production should be moved back to the Americas, and Unifi is positioned to capitalize on this shift. And as an example, we are currently engaged with one of the largest retailers in the U.S. to help them increase the goods that they buy, both domestically and regionally. So what makes us confident that we can capture so much market share? Well, in Central America and the U.S., our position is more favorable than our competitors, and these are the reasons why. REPREVE, as I've said before, it's a driver to growth, especially in the U.S. and Central America. The installation of the EvoCooler texturing technology, it gives a manufacturing cost advantage and should allow us to gain market share from imports beyond what we've already communicated. And we have not had to add manufacturing floor space, and naturally, as we expand production levels, this will reduce our fixed cost per pound, adding to our competitiveness. And being a key supplier to the CAFTA-DR market is important, and that market is growing to the near-shoring I mentioned earlier. And we were one of the earlier promoters of CAFTA-DR, which ascribes to the yarn forward rule. This rule encourages investment in the region by eliminating tariffs on garments coming back to the U.S. if they have regional inputs. And just as a data point, synthetic garments coming back into the U.S. are 0 duty if they come from Central America. With U.S. components, they're 32% if they come from Asia or outside the region. And in the U.S. market, our multiple process capabilities combined with our REPREVE infrastructure far exceed those of anyone else. We have the technical acumen and extensive portfolio of yarn processes that enable us to solve our customers' challenges, and I'll talk more about this later on. And lastly, our foundation has proven to be beneficial. Our local foundation has proven to be beneficial. And during the pandemic, we have not experienced any significant disruption to our supply chains in the Americas. So with all that said, we expect to be able to grow our revenues in the U.S. and Central America by over 40%, reaching $550 million in sales by fiscal 2025. Now our competitive advantages in Brazil are similar to what I've described in the U.S., but it's a very different market. Lucas Rocha has been the President since we acquired the business in 1999 and has built a fantastic team that is very focused on meeting the needs of the market. In Brazil, we were previously starting off at a very small base but is expected to grow by high double digits for the next 2 to 3 years. The Evo texturing equipment allows us to compete against the imports, [ and like ] the U.S. and Central America, we did not have to add any manufacturing square footage to install this new technology. And we have a very diversified product mix. What the team in Brazil likes to call, they're a tailor-made business, which is in part why our margins have been much better than some of our other business segments. And lastly, in Brazil, because we are local and invest in raw materials, we have the ability to service the local mills very quickly. We can supply most of the largest mills in Brazil from our plant in Alfenas within 24 to 36 hours. And the target for the Brazilian market is to grow to $175 million in revenue or 80%. And as in the other 2 regions, sustainability is key to our growth in Asia, but secondly, we have been expanding our supply base beyond China. Brands and retailers that we work with have required us to quickly adapt to their current needs, and we are able to assist them to accelerate the launch of products with sustainable inputs directly as a result of our regional expansion into different countries in Asia beyond China, such as Pakistan and Turkey. So looking towards Asia, what makes us different there? Well, over the last 10-plus years, our focus has been building out a world-class marketing, sales and supply chain teams that are very connected to our U.S. and European commercial operations. Our Executive Vice President, Hongjun Ning, has done a wonderful job building a team with a Unifi culture and DNA embedded in the organization on the other side of the world. From a competitive position in Asia, REPREVE is still #1. Second is our asset-light model and leveraging the fact that we are a trusted and transparent partner with the brands and retailers. And our operations in Asia remain intently focused on helping these brands meet their sustainability targets, while at the same time, we're expanding our offerings to the increasing number of local brands, local Asian brands, who aspire to become more sustainable. And now in 2022, we also have far more product lines that include things like REPREVE Staple Fiber, REPREVE Nylon, REPREVE Our Ocean, REPREVE Resin, among many others. And a great example of a specific product, a specific REPREVE innovation product is REPREVE TruTemp365 climate control yarns that Al mentioned earlier, and it has had rapid adoption in Asia in the denim market over the last 2 years. Finally, we've been partnering with a company that has developed a textile recycling technology that now allows us to offer our brand partners the opportunity to have a truly traceable circular solution for the polyester waste generated on the cutting room floor. We're excited about this partnership and the competitive advantage it will provide Unifi, and the additional sustainable story our brand partners will be able to tell, and I'll go into this in a little more detail about this technology later on in my presentation. In summary, with all that said, in our Asia business segment, we expect to grow revenues by 100% to reach over $375 million in revenue in fiscal 2025, and that leads me into the second pillar of our strategy. We are expanding REPREVE ecosystem beyond our traditional apparel markets, and these nontraditional markets are where we expect 15% to 20% of our growth to come from over the next few years. We have identified many untapped opportunities for aggressive growth in automotive, medical and PPE, packaging and nonwovens, and footwear. So how are we going to do this? Well, we are expanding our downstream marketing teams, literally hiring more people in Asia and the U.S., and that will allow us to penetrate new and different market segments and connect us with a new set of companies so we can help them also deliver on their sustainability goals. These 4 markets I'm describing are just the beginning, and as sustainability becomes a larger priority across the globe, the potential market opportunities will only grow. Now in the beginning, and unlike the past, the first 3 markets that I highlighted, automotive, medical and PPE, packaging and nonwoven, they will be U.S. focused. Take, for example, the automotive industry, which is going through a major transformation and upheaval. This upheaval is caused by a simple catalyst and the demand by the consumer for a more sustainable alternative to the internal combustion engine. And one company that we are working with right now has been at the forefront of the shift to electric transportation. Their successful approach has forced all other car companies to rethink how they meet this new consumer demand. The shift away from a gasoline, diesel-powered engine doesn't stop with the engine, it includes a new sustainable inputs for the entire vehicle. With each car or truck, there is anywhere from 15 to 30 pounds of textiles in it, and we are working hard to get REPREVE integrated into these materials. For example, the synthetic leather that is found in most cars and trucks today has a polyester webbing. It's called a scrim fabric, and that is urethane coated. We are working with a major producer of this material to convert much of their polyester scrim fabric to REPREVE, and in turn, it makes their product more sustainable. And a fun fact, our REPREVE yarns have gone to space. We were in the seating of the Virgin Galactic spacecraft that just went to space last year. Now like most of us, we've all heard that the U.S. government wants to be more self-sufficient in medical and PPE, and we estimate the total addressable market is $800 million in the U.S. And we've already been supporting this effort, and we will continue to see a different -- additional opportunities that make this market buoyant in the coming years as the U.S. government builds a stockpile. One way we are responding to this demand is through our new product line, knitted cord. A knitted cord is used in the ear loop of protective face masks. Furthermore, the additional yarn requirements for made-in-America gowns and other medical fabrics continues to provide us with market opportunities, and many of these items can also be made with REPREVE, allowing these products to be more sustainable. Now traditionally, we have focused REPREVE marketing efforts on those customers who buy yarn. However, by utilizing our excess high-quality flake and REPREVE Resin, we have been successful in building a robust business for those companies who need sustainable inputs for their processes. A great example of this is a company that we're working with today who make specialty staple fiber yarns for nonwoven hygiene fabrics. Now we're not part of that fiber business today, but we are supplying the REPREVE chip so that they can make their products more sustainable. And lastly, we have footwear, an area that I'm particularly excited about. Unifi has the opportunity to take advantage of a very big change in the market. Look at the market size, it's over $2.5 billion now. I'm not sure how much of that we can capture, but I'm very excited about this because there's a change. Comfort at home has translated into comfort at work, and more and more consumers are dumping their leather shoe uppers for smart, comfortable lightweight fabric work shoes. And the fabric uppers of these shoes are made of polyester, which creates an opportunity for REPREVE. In fact, the Converse shoes that I'm wearing today are a great example of what I'm talking about. The uppers in these shoes are actually made from REPREVE. And while it's hard to estimate, I believe in the next 3 years, at least $50 million of new revenue will come from these markets. And more importantly, the products we sell into these new markets have higher margins than many of the existing products we sell today. The third pillar of our strategy is accelerating innovation and developing our circular capabilities, and I'll explain how both have been and will continue to be the growth of our revenues and profits. For those of you who have been following us for a while, you know that textile takeback, our take on the circular economy, has been important at Unifi for quite some time. And more and more consumers, the people who ultimately make the decision to buy what we produce, are becoming aware that they do have real buying power. And our customers and brands and retailers are also hearing the brands -- the voice of these consumers. So as you see from the diagram on the left, it's possible for us to make the textile economy circular. We have the textile takeback programs in the U.S. for many years, and in many cases, they could be considered very large production trials, but they have been very useful because we have figured out many of the technical challenges with these kind of programs. We are going to continue to put more resources in this endeavor and be a leader in the global challenge to make textile production and end of life of garments more sustainable. We are especially excited about the potential of our new capabilities, processes and product innovations that we have on the horizon. And I will now give you an example of each one of these. So I'm very pleased to let you know today that we have developed a new, innovative capability with one of our partners in China, a textile takeback solution that is new to us. With our new textile takeback capabilities, we're able to take the textile scrap waste and recycle it back into filament yarn through a new recycling process. We can now take waste, for example, from discarded garment scraps, utilize our new process to recycle the scraps and turn this waste into REPREVE Textile Takeback chip and, in turn, make filament and staple fiber REPREVE yarn. And this is a project that we've been working on literally since the beginning of the pandemic, and we are now beginning to have serious conversations with our brand partners about accelerating our textile takeback programs in Asia to a meaningful scale. Now the pandemic was simultaneously a global strain in our operations and an opportunity for us to expand our innovation and approach products in ways we never considered before. In an instance, we had a new opportunity on our hands. As you can imagine, disposable masks created tons of waste, and at Unifi, we saw the need to do our part as a company focused on sustainable innovation to tackle this dilemma ahead on. We ask ourselves, what if we could utilize REPREVE yarn to supply the newly-formed U.S. knitted cord manufacturers. Or better still, what if we made our own REPREVE knitted cord? Our Nylon business segment, with very little capital investment, developed a process that utilizes existing equipment in an efficient way to create knitted cord needed to make the ear loops for the masks. This new product line gives us the unique ability to offer a sustainable, wholly U.S. vertical supply chain to the market, and by the end of the current fiscal year, we will have the capacity to service a significant size of the U.S. domestic mask market. Now one of our latest innovations is a product we recently launch called ChillSense. This product is cool to the touch and was designed originally for the apparel market. We very quickly realized that it would also be suitable for the mattress ticking fabric market. And what's especially interesting about this product is that in the U.S., it replaces an Asian imported yarn that is no longer made in region, and another example of combining the power of local production with innovation. Now the last pillar of our strategy is bolstering the marketing and communication and support of REPREVE. To make REPREVE a household name, we must continue to drive awareness, consideration and loyalty for the brand and its purpose of creating a waste-free world. The good news is we have made significant headway already. As you can see, there have been significant growth in the number of hang tags we've shipped to our customers year-over-year, and this is a direct indicator of the success we've had in growing REPREVE's adoption and co-marketing. And who knows how many hang tags we will ship in fiscal 2025, but our expectations are that it will grow at the same pace as our business grows, or even faster. Our efforts of using hangtags has already paid dividends, making a lasting impact on consumers. In a recent study that we carried out in the U.S., 20% of respondents surveyed recalled our REPREVE bottle hangtag, and 22% of the people surveyed recalls seeing our REPREVE logo. And this is a great achievement, but we're not satisfied. We are accelerating our marketing of REPREVE to support our overall growth strategies and ensuring we are in lockstep with our brand and retail partners. Now as I've said before, our job is to help brands and retailers meet their sustainability goals, and effectively marketing REPREVE is an important part of that job. We're going to continue driving our position as a leading supplier of sustainable synthetic fibers, and we are uniquely positioned to do so, thanks to our investments in REPREVE. Now to achieve this, we are going to continue to expand our global and national media outreach. We're going to celebrate our key partner success stories, enabled by REPREVE, and we're going to enhance our corporate communications, putting us center stage as an ESG company. Driving awareness and consideration is still our priority for us, and one of the ways to increase awareness is through our partnership with major iconic brands that want to elevate their sustainability story. For instance, our sponsorship of the WM Phoenix Open, the world's largest zero waste sporting event, provides a relevant cross-category platform to showcase our sustainable story. You will hear more about that from our WM partner later on. But as an aside, I attended that event last week and I got an insight into how they actually make this event landfill free. And I can tell you, it dovetails so well into what we're doing here at Unifi. And we're also going to keep our foot on the pedal when it comes to co-marketing, and by offering both physical toolkits like hangtags and labels as well as digital tool kits to make it easy for our brand partners to communicate their use of REPREVE. Now I'm going to give you a few examples of what this co-branding looks like. We have partnered with Ralph Lauren to help them in their efforts to make the U.S. Olympic Games -- U.S. Olympic team's summer and winter games apparel as sustainable as possible. This allows Ralph Lauren to tell a wonderful story and shows their commitment to sustainability. And kudos to Ralph Lauren because all of these garments were actually made in the U.S. We have a -- we've been a sponsor of the U.S. Pac-12 collegiate sports conference for the last few years, and it's a great example of how our involvement, or really REPREVE involvements, can create excitement about recycling bottles in a university environment. We know that young college students today are going to be the ones driving our government to push recycling activity to the forefront here in the U.S., and certainly, we need that because today, we're at 26%, 27% recycling of bottles. Now a great example of our success co-branding is with Disney, one of the greatest storytellers in the world. They've been able to showcase their sustainability efforts in the retail stores by connecting the bottle collection system they put in place in their parks back to an actual garment and telling that story in their shops. Now driving apparel -- REPREVE beyond apparel. We are going to continue to drive REPREVE awareness and adoption among customers, both in our existing markets and the new growth markets I described earlier. We're going to do this in a few ways. We're going to build effective and efficient digital capabilities, and this encompasses modernizing our websites to build best-in-class B2B marketing and increasing our investment in digital ads to generate awareness and leads beyond apparel. We're going to ensure and expand the presence of our mobile tour, our trade shows, sales materials and B2B advertising in our new markets. And we will join new key influential industry associations to promote awareness of REPREVE and underpin this with industry-specific messaging, targeting decision-makers at key accounts. And lastly, as part of our efforts to celebrate the great work our partners are doing, we continue to promote their work through our Champions of Sustainability program. And we were very excited when one of our long-term retail partners, Walmart, recently reached the 1 billion bottle mark, and this is a great achievement for them that we were happy to recognize them for. So these are the pillars of our strategy. But before I close out, I would like to discuss one more important topic, and that is people. Like many companies in the U.S., we have been challenged by the labor tightness that has impacted our productivity and manufacturing efficiencies. As a result, we have made hiring and retention our priority. Our manufacturing and HR teams are collaborating and are transforming the way we recruit, hire and train our employees. People have been and will continue to be the single most important reason for our success. Investing in our people by giving them the resources and opportunities to grow and succeed in their professional and personal lives will make us a stronger, more effective company. In addition, we are committed to continuing to build a culture of inclusion at Unifi where everyone feels that they belong and are part of something special. Given the challenges the world is currently facing, it's more important than ever that we ensure our employees feel accepted and valued for their unique contributions. Creating a winning and diverse culture is vital to the success of our company, and that is what we are doing in every region we operate. So thank you for listening, and we're now going to turn it over to our CFO, Craig Creaturo.

Thank you, Eddie, and good morning to everybody. Thanks to A.J. and Al for their comments as well. We are, again, excited to have all of you here in person and also those of you listening via the webcast as well. So thank you for joining us. I would be remiss to say thank you to -- not to say thank you to everybody who helped put this day together. So thank you very much for that. Today's presentation and the Investor Day is really about looking forward, but we are going to look a little bit about some of our historical financials on the next couple of slides. On this slide, we are focused mostly on income statement data points from the last 4 fiscal years on this Slide 60. Suffice it to say that we, like every other manufacturing company across the world, were impacted by the pandemic. We felt that impact the greatest at the end of our FY '20, so that June quarter of 2020. Since that time, we have rebounded and recovered and grown the business very, very nicely. In fact, we just completed our sixth consecutive quarter of revenue growth since that low point of the pandemic. On the next slide, we're showing on Slide 61, showing some historical financials. And suffice it to say that the financial position of Unifi is very, very strong. It's really the strongest it's been in a decade or more. One of the things that we're proud of is the very strong cash generation that we have, but also combined with that is our net debt position, which at the end of our last fiscal year, June of 2021, was less than $10 million. So I'm now the fourth person that's going to tell you, REPREVE is an important part of our growth strategy. So I'm also going to give you a spoiler alert to tell you, you're going to hear that again. You're going to hear that again from our brand partners. You're going to hear that again as a very deep embedded component in our sustainability presentation as well. So we feel that the REPREVE metric really is a metric that resonates with our investors. So again, just to calibrate, when we say REPREVE Fiber, that REPREVE Fiber is basically our recycled content product that's in a fiber form, and we are showing those percentages of that. If you look on this chart, if you go all the way to the left, back to FY '18, we had about 24% of our sales were from REPREVE Fiber. That's just a little bit more than $160 million. In the most recent fiscal year that we completed, FY '21, 37%, that had grown up to about $250 million. And our projection for this current fiscal year, for FY '22, we're expecting that to grow to 38%. Now you say, maybe that doesn't seem like an impressive growth rate. Let me remind you of something. We -- overall, Unifi is going to grow 20% overall. That means we are growing even faster than that in the REPREVE Fiber content. In fact, that will add an additional $50 million of revenue that is REPREVE content to us in just this fiscal year. And as we've mentioned before, our target is to get up to 50% of REPREVE content for overall Unifi. That would put us up to about $550 million in revenue. For -- one of the questions that we get asked from investors, from people that know portions of our business is, give us a little bit of insight about the recycled content around your reporting segments. So on this slide, we're considering anything that's virgin in one color, and anything that's recycled in the other color. As you can see, our strongest and largest portion of recycled content comes from Asia. Right now, over 80% of what we do in Asia is recycled content, and that's really the niche that we play. We have taken the approach that, that is really what we want to do, and we want to do it well. And as Eddie and Al both mentioned and we'll show also here in just a moment, the growth trajectory that Asia has been and will be on is an important part of our growth strategy and one of the reasons that we'll continue to see that REPREVE content of the overall Unifi business continue to grow. If you look at our Brazil business, right now, today, only about 5% of it is recycled content. That's really a big opportunity for us as recycling has not picked up as much momentum in that portion of the world as other places. It is happening, though. It is happening, and we're starting to see more and more recycled content as well. And also on that slide, we showed that we have good content in both our Polyester and our Nylon business as well, both 2 business segments that have good content in recycled products. So in addition to the revenue goals that we've talked about already, we're also taking this opportunity to give some financial -- more specific financial goals for that FY '25 period. And on these slides, for FY '22, the information that we're showing here, this is really just repeating the guidance that we gave for FY '22 that was in our January 2022 earnings release. So for FY '22, we expect we'll do about 11% gross margin by FY 2025. We expect that margin to increase up to between 14% and 15%. One of the drivers for that growth will be to see the revenue change. So the revenue change will also help with the gross margin as well. So we do expect the biggest portion of that growth from, again, FY '22 out to FY '25, will come from our Asia business, as we noted before. And then also from an adjusted EBITDA perspective, we see that we will have several big areas that will help drive that EBITDA growth. Right now, our current projection for this fiscal year, FY '22, is to do between $60 million to $62 million in adjusted EBITDA. We believe that will achieve or exceed $110 million by the time we get to FY '25. If you look at where we are at today, our adjusted EBITDA as a percentage of sales is about 7.5%, and by the time we get out to FY '25, that will increase to about 10%. The biggest drivers of that growth are depicted in this chart. Really, volume growth is key, and that really is volume growth from all sorts. That's from REPREVE, that's from virgin products, that's from things that we do today that we expect continued volume growth from. We also see a significant pull from our Evo installations. And again, we're taking this forum as an opportunity to unwrap the details of that, not just being something that's here today in Yadkinville, North Carolina, but also being installed in El Salvador and also in Brazil as well. The other 2 items on here, REPREVE mix. REPREVE mix, as we noted before, we have better profitability profile from our recycled content products. So that will help the EBITDA, and then really just throughout that innovation is also the other thing that will help as well. So a few additional financial expectations for FY '25. We do expect our depreciation and amortization to be, by that time, somewhere around $35 million to $40 million will be on the other side of some of those capital investments that Eddie and Al mentioned. Effective tax rate between 35% to 40%, and we should get back to a more normal level of CapEx for Unifi, which would be in the $20 million to $25 million range by FY '25. From our capital allocation priorities, our financial position gives us a lot of options. It's giving us levers that we can pull and utilize, and we're very fortunate to be able to have many choices to choose from. If you look at this chart, you go from left to right, investing in ourselves, driving that organic growth, that's like Evo. That's like innovation. That's like some of the things we've already mentioned today already. We also have the opportunity to do share repurchases. We have an open share repurchase program that, as of the end of last -- this past quarter, we had about $46 million of availability on it. In the quarter we just completed, in the December quarter, we did go into that. We took an opportunistic approach to that, and we bought back a little bit more than 50,000 of our shares for $1.2 million. We also have really a balanced leverage approach. Right now, our leverage ratio is about 1.1. That historically for Unifi has been 2 something or 3 something in our past. So again, that's giving us some opportunities to do things differently than we have. And then also acquisitions. We were fortunate in FY '21 to do acquisitions of 2 businesses, 2 businesses that we were able to tuck into 2 different of our North Carolina manufacturing sites and integrate them very, very quickly. Businesses that helped us a bit in FY '21, we will get a full year of benefit from them here in FY '22. So on acquisitions, on this Slide 69. We just wanted to paint the picture of businesses that are of interest to us and what would make sense. So if you start on this chart and -- at 12 o'clock and go around, some of the larger textile companies and material science companies, that would be something of interest to us as well. We definitely would put ourselves in that bucket. We are a larger textile company, material science company. There used to be a lot of those around. There are not many larger-scale companies like that around, but they do come up for sale or are available for sale and something that we are interested in. In the bottom corner of that pie chart would be smaller textile companies. Those would be the companies, like I just mentioned, that we did 2 acquisitions in FY '21. And we feel like there's many more of those that are available, again, where we can be a destination point for not only their products but their manufacturing processes and integrate them quickly into our business. Many times when we do those types of acquisitions, we can bring other products and offerings to that company that the smaller company was not able to bring. One thing that's continuing to get our attention is sustainability and recycling companies. We're continuing to be more of a sustainability and recycling company, and so we're starting to bump into companies that are peers or tangential companies similar to us. That's something that's out there as well. And then obviously, any transformational acquisitions are always out there as well. I should take the time to note on this slide that all the information that we projected out for FY '25, none of that includes any acquisitions. So any acquisitions that we would do would be additive to that. So we -- one thing I just want to recap quickly is the growth strategies. So as Eddie said and as we rolled out, the pillars of that growth strategy, that would be: growing the REPREVE market share in all of the markets that we currently serve geographically; that would be expanding REPREVE going beyond apparel, adding to what's a very healthy mix of apparel, but also getting out into some more attractive areas; that would be continuing to accelerate our innovation and develop additional capabilities, including Textile Takeback; and that would also be investing in and building out our brand awareness of REPREVE, something that we feel like is a continued investment that we will make in the future. So that brings us to the end of this first session. For those of you online, we will, here in Yadkinville, take a break. Not really a break, we're going to take a cool tour. We're going to see what we do here in Yadkinville. We will allow the webcast to continue, but we will pick that up at 12:00 Eastern Time. At that time, we will be introducing and talking and hearing from not only our own folks in the commercialization and marketing area, but actually 3 brand partners that we mentioned before. So we'll be hearing from a representative of each of Waste Management, L2 Brands and Haggar brands. So we were going to pause the webcast now, and then I'll give you instructions. So just hang with me for one moment. [ Break ]

All right. Welcome back. I hope you enjoyed the tour and got a really up close, upfront view of everything that you've heard today so far, especially in regards to the investment in Evo Technology. My name is Jay Hertwig. I'm the SVP of Commercialization. And at Unifi, the commercial group consists of direct sales, brand sales and marketing. Our direct sales team focuses on day-to-day activities with our direct customers, fabric producers, while our brand sales team focuses on connecting with brands and retailers to promote innovation and sustainability. Both sales teams are supported by marketing to enhance the customer experience, relationships and provide marketing assets such as images, logos, hangtags and sustainability information. Over the years, we have experienced success by adopting the push-pull principle. The direct sales pushes products and solutions upstream. While the brand sales works directly with our customers' customer, the brands and retailers, to pull them upstream and through the supply chain. In 2007, we started with 2 apparel brands, Polartec and Patagonia, to develop fleece made from recycled materials. Since then, we have grown our apparel brand relationships and program placements with hundreds of brands globally: major retailers such as Target, Walmart, JCPenney and Costco; outdoor brands, including The North Face, Columbia and Obermeyer; socks and hosiery brands like Hanes, Gildan, DeFeet and Kirkland Signature; luxury brands highlighting Kate Spade, Tory Burch, Ralph Lauren and Hugo Boss; uniform and workwear companies like Aramark, Cintas, WM, Chick-fil-A, and the Girl Scouts of America; and swimwear brands such as Quicksilver, Roxy, Vissla and Volcom. Our brand growth and success has not been limited to apparel. We've experienced successful program adoptions in nonapparel markets such as home and commercial furnishings, footwear, accessories and transportation. Some of these brands include, in the home and office space: Designtex, HON, La-Z-Boy, Sealy, Serta, Williams-Sonoma; in footwear, brands like Nike, New Balance, Tom's and Rothy's; in headwear, New Era and Legacy; in accessories, RePatriot Flags and Igloo coolers; and in transportation, Ford and GM automotive interiors, and as Eddie mentioned earlier, Virgin Galactic spacecraft seating. Over the years, we've established great relationships throughout our supply chains. We've met many people that saw Unifi and REPREVE as a valuable solution provider. Today, we have 3 great partners to share their experience with you: WM's Brent Bell, L2 Brands' Pete Waldron and Haggar's Tony Anzovino. I'd like to welcome Brent Bell to the podium.

Thanks, everybody. Thanks for having me. This is truly an honor to represent WM and share the story that we've had with Unifi and with REPREVE on the great partnership we've had over the last decade plus. So my name is Brent Bell. I'm the Vice President of Recycling for Waste Management, which I guess last week, we officially changed our name to just WM now because we do a lot more stuff than just manage waste today. I've been with the company for 25 years. So I've seen a lot of ups and downs in the recycling business. And I guess from my perspective, you can kind of share some of the circularity stories and what makes them strong and last decades to come. If we can hit the next slide, I'll kind of just give you a brief overview of WM. The recycling division that I'm in charge of, we have about -- it's the largest one in North America. We've moved more tons than anyone else, about 15 million tons a year of recycling materials diverted from the landfill, made into other great products such as what REPREVE does with theirs. We've got 145 locations throughout North America. And then if you look at the asset base we have, we also have a large group that handles retailers, commercial, residential customers. So we literally have tens of millions of customers throughout North America. And one of the things those customers are very concerned about is what happens with my products once they're placing a curbside bin or in their commercial bin, what that may be. And so that's one of the reasons why this partnership with Unifi with REPREVE is such a great story to share with everyone. I'll go back a little bit on our investments. So Waste Management has done a lot of investments in the recycling infrastructure here in the U.S. The last few years, we've invested nearly $500 million over the last 2 or 3 years in just recycling alone. In the next few years, we just announced on our earnings call that we get plans to invest another $800 million over the next few years to help out with recycling infrastructure, help out with underserved markets and to help provide more bottles to our friends down here at Unifi. Some of that investment makes cleaner material. So if you guys saw the tour today, hopefully, you saw some of our PET bales that came in from our facilities. We're looking at making cleaner materials so that we can have the end markets to be able to utilize those in a better fashion. I hit the -- maybe the next slide. One of the things that I want to talk about today is with Waste Management, there's a couple of things that's important to us. Movement is important, meaning moving our materials. Sustainability is very important, finding a long-term sustainable partner. And in the circularity story, all of our customers love the circularity story that we have, and there's no better place than with REPREVE to share that story. I'll give you a quick anecdote. Last week, we had the WM Phoenix Open golf tournament. And for those of you who don't know, it's the largest zero waste event on the planet. There's nearly 1 million people that attend from that Monday all the way through Sunday, with the big day being on Saturday. It's a crazy event Saturday. There's over 200,000 people attend that event. And you guys haven't heard, it's a little bit like a spring break party mixed with the Golf Channel. It's very chaotic. And on the 16th hole specifically, there's about 20,000 people together around that hole. If you are a golfer and you miss the green, you're going to get heckled with boos and yelled at. But if you happen to make the green or even to make a hole in one, like Sam Ryder did on Saturday, then people throw thousands of bottles and cans on the course, and it's a huge display of celebration, if you will. But this shows our partnership. We had the Unifi folks out there. And while we were on the course picking up the bottles and cans, I think I saw Eddie led by his team picking up some of those bottles to make sure that they get them back here. All kidding aside, though, those bottles that are collected at the Waste Management Phoenix Open will be -- and they are actually on the way here probably this week, will be delivered to this facility. And so it's going to be a great circularity story. We'll be able to tell that the bottles that actually came from that tournament on the 16th hole will be made into clothes that could be worn at the next year's tournament. If you look at the -- the other criteria I said is movement. Movement is a big issue to us. So before we had the relationship with Unifi, we were selling materials, specifically plastic bottles to folks that would kind of go back and forth from virgin to recycled materials. And so we made the commitment saying, hey, with our business model, it's not like a General Motors stops getting orders for cars, right? They're going to stop buying tires and wheels to accommodate that demand. The recycling business is unique in that we could say, hey, there's no one to buy cardboard boxes or bottles of plastics tomorrow, but we still get thousands of people are going to put that material in their curbside program that we have to find good sustainable homes for. So that's when we found Unifi. The relationship worked very well because they were able to take this recycled material. It's in their brand with REPREVE. So they're not going to go back and use virgin plastic because of the price change. They're committed to this recycling sustainable brand. And that's one of the reasons why we find this a great partnership with REPREVE out there. As a matter of fact, one of the biggest things our customers ask us for is what happens with my materials once I place it into these curbside bins. And so to my knowledge, Waste Management's -- WM's first-ever commercial around recycling featured Unifi REPREVE brand. So if you haven't seen that commercial, it started airing probably a year, 2 years ago. It's been on CNBC. It's been on the Golf Channel, on NBC Sports. And it's a great commercial that really shows those customers what happens when we take their material from the curbside all the way through our recycling facilities, all the way to this facility here and then back into a shirt or a pair of shoes, whatever they may be, that our -- that the customers will create out of that. So it's a really great story. That commercial has gone over really well and the customers really understand, hey, here's where our material goes to and where it ends up at. Plastics, as you all know, has a lot of focus on it. While it's less than 5% of the material that's in the stream, it creates a lot of conversation because of the ocean pollution problem, because of the low recycling rate. And so we're happy to unlock more of that supply and support the demand like a company like Unifi has with that kind of material of the future. One of the things that WM has done is helping trying to unlock more supply. So there's times where I'll meet with the EPA a few times a year. The EPA has a target to divert 50% of the material by the year 2030. And so how we do that is really creating demand for material. If you look at the U.S. government, that's a great example, they're very good at spending money. So when I talk to the EPA, I say, hey, in your procurement practices, whatever you're buying, make sure that you're buying and your vendors are using recycled content. That's what's really going to help out. So if you imagine all the uniforms that the government wears, the military uniforms, USPS uniforms, if all those are made out of REPREVE branded products, they're using recycled content. It's going to increase this demand, which will help out the whole recycling industry. And so we give them those examples. But then we also look at the companies that are in the room, too, that represent each other and say, as a company, if you want to do more for the recycling industry, there's 2 steps to recycling. There's one thing to put the right item in the recycling bin. But the second item is to make sure you purchase, you support those companies that are using these recycled items because if we're not doing that, then it's no sense in putting it in the bin in the first place. So one of the things that we like to tell our customers to do is make sure that you're using recycled material products packaging as much as you can. Same thing with individual consumers. You guys are a large buying arm. As you're going out shopping with your families, make sure you're supporting those brands are using recycled sustainable packaging as well and let them know that, hey, you value that in your consumer purchases. One of the things that WM has done, maybe the next slide, is we have recently made our carts out of recycled material. So the carts that are picking up recyclable and trash are now made from recycled plastics. But the best story that I love to tell is what we've done with our frontline employees and the WM uniforms. Even our Board of Directors has REPREVE shirts now. So you can even say it from the board level all the way down to the frontline employees, we're using and supporting Unifi and REPREVE branded items. Here, you can see, and I think there's a uniform in the back, of all of our frontline employees have now switched over to using shirts that are actually made out of the REPREVE fabric. So we definitely appreciate that partnership. And it's just such a great story if you think about these drivers and helpers. We're actually sorting, collecting plastic bottles that now become the uniforms they're wearing today. So it's a really great story that we'd love to talk about. If you look at the -- let's see, the EPA side of things, they have this goal to hit 50% diversion. There's a lot of demand coming for recycled plastics. There's minimum content. There's EPR legislation that's approaching as well. And so what we like to do is work with partners like REPREVE to get out in front of those legislation requirements and make sure that we can help accommodate the demands that they may have in the future with the materials that are out there today. So if you look at -- I think maybe one more slide. If you look at our partnership that we have together, it's 10-plus years old. It's one of the greatest circularity stories that we have in terms of us collecting this material, bringing it to domestically, that's very important to us. We have a policy not to export any residential plastics. So that's another check the box that REPREVE and Unifi does for us. They allow us to move our customers' materials and stay domestic. For those further processing into REPREVE yarns, they can sometimes become the uniforms that our drivers are wearing today. This is a great partnership that we've had. And I think it's one of the best circularity stories. That's why we feature it on our commercials. It's one of the prominent brands out there, when you look at the next speakers that are lined up as well. And I try to wear whenever I talk about Unifi REPREVE, wear their gear. But I think if I look at my closet now, it's nearly every outfit I have is made from REPREVE now. So I appreciate all of the support that you guys have given me in my wardrobe. And it's just -- it's a great, fantastic partnership. I think we've got decades to come on it, and we're really just getting started with this. So thank you all.

Thanks, Brent. Tough act to follow. Everybody knows who WM is. They probably don't know who L2 is, right? So I'm going to spend a little time telling you about who we are. And then a little more time on our partnership with Unifi and REPREVE and then a little bit about the future and where we see this going. So a little bit about L2 Brands. We are basically 2 brands that you may know or may not know, League and Legacy. League was started in 1991, Legacy in 1992, both in Pennsylvania, both very entrepreneurial, hardworking, rooted in the college business. So in any college store in America, you'll probably see League or Legacy. We sell to about 800 of them. We merged both companies in 2018. Dominus Capital came in and bought League in 2016. I came in with the purchase. We immediately tried to look for a synergistic acquisition so that we could grow our presence, not only in the college market but to continue to expand in the resort market. So we service really 2 -- 3 end-use channels, college first. It's about 55% of our business, resort 35% and growing and 10% corporate, which we kind of stumbled into the corporate business. We have a lot of customers who want our product, particularly our headwear, Legacy headwear. So that's just a little bit about what we do. Quick stats. You can see we're forecasted to do about $125 million this year. The surging demand for our products, it has sort of blown us away. It continues. Last year, the first 2 months were a little dark, a lot of uncertainty. And then sort of an avalanche of business started to come, and it hasn't stopped. We've got about 60% of our number in for '22 already. In most years, because we're more of a JIT on-demand model, most years, that's around 20%. So the demand is surging. And it's tough for us to keep up with that, particularly in the face of so many supply chain problems. But things look very good for this year. We sell to about 10,000 active customers. If you look at our list and go all the way down to the bottom, it really tells the story of who we are. We are a very customized JIT manufacturer. Our average order size is somewhere around 64 units or $800. We sell over 8.5 million units a year. So it's a highly customized business. Therefore, we command a higher price for it. I can show you some product in a little bit, but what we do is elevated basics. On the League apparel side, it's mostly T-shirts and sweatshirts but they're elevated. We sit somewhere between Champion and the athletic brands and some of the premium brands like Peter Millar, Johnnie O, Southern Tide. And on the headwear, we're slightly above our competition, too. I would say we're somewhere between 47 Brand and New Era. Both those guys have great relationships with professional leagues. So that's a little bit about who we are. The next slide shows really where we do our business. That is changing. We used to do a lot in South Asia and China. That no longer is the case. We can't afford to do business over there. Containers, which used to cost in 2019 about $4,500 are now $30,000. Mills that we've worked with for years, for decades, will now take a year to produce our product. And it's created a lot of issues for us. So we purchased a factory in 2009 in El Salvador. And now we're leaning into that facility in near-shoring and moving all of our production, our apparel production down into Central America. And this sort of map shows what we're doing. But it's 7 days to Miami. We can go from Miami, where we have a logistics company called Interport, out to our customer. So it's a speed game. We've got to increase our speed, our speed to market, our speed to customer, and that's what we're in the process of doing. We also have the benefit of a great workforce in El Salvador. We're gearing up from 400 employees to almost 600. We've moved a lot of equipment down there. Most of our CapEx is being spent in that part of the world, not domestically. So we're really changing the game here a little. We're not giving up on our Pennsylvania facility. We have a state-of-the-art facility, as you see in that first picture, 200,000 feet. But that's where we do most of our decoration. So it comes in as a blank manufactured in Central America, we decorate and ship. And then we have a small facility where we do a lot of design outside of Philadelphia and Plymouth Meeting. So that's sort of our facilities and how we're building this speed model going forward. Next slide. All right. So what do we make with REPREVE? We started in 2017. We set out on a journey. I tasked our product development team to do something more sustainable. We saw a lot of recycled or rPET in the market. We started to investigate it, and we quickly learned that wait a second, Unifi REPREVE has got something going on here. And it was by circumstance that they have an office in Americas Park (sic) [ American Park ] in El Salvador, literally down the street from where we were located. So we just paid a visit out of the blue. Let's go talk to them. There wasn't a lot of English-speaking people in that facility. So it was a little bit of a challenge. But we -- within 2 weeks, we were here in North Carolina meeting with the team to see what we could do. Sustainability is very near and dear to my heart. I worked for 6 years for a pioneer in the industry, Ray Anderson at Interface. I don't know if any of you know who he is. He wrote the book on sustainability. He wrote a book called Mid-Course Correction. After his spear in the chest moment, which was reading Paul Hawken's book, The Ecology of Commerce, and it stuck with me. Ray was a mentor, and I wanted to do something in this area. As I said, it's near and dear. I carry this around with me to every appointment I go to. And I'm not lying. My team makes fun of me, but we wanted to do something. So we align with REPREVE in 2018. We started slow. We had the hustle to meet the demands of a couple of customers who wanted us. Once we told them we were doing it, they're like, "All right, you need to get me something at Arizona State right away? I need something out of Colorado. It sort of took off. And I'll pass some of these products around. But let's go to the next slide first. So you can see what's been happening. As I said, we started in '18. We quickly grew in '19, even in '20, in a COVID year, we were able to grow our business with REPREVE. Every other category was down, every category. But our business with our REPREVE styles was up. So it's a really strong testament to the consumer demand for this product. In terms of our demographic profiling, I mean it's probably pretty obvious to you that we target younger demographics. It's really 21 to 34. I would say our sweet spot, our target, is someone in college. It's a 20-year old. And it's important to them. They are demanding more sustainable products. And I think we're just -- I think we'll get up over 1 million units in '23. We'll certainly surpass 500,000 units in '22. But it's a great story. We now have 9 SKUs -- check that, 11. We just added 2 headwear SKUs, and I'll show you some of the product. But this product here, which is our T-shirt, pretty basic, we do long sleeve, short sleeve. This short-sleeve item is now our #4 best seller, which we've never seen happen, a product take off that quickly. We have some products in our line that have been around for 20 years. And as you can see, resort is orange here. It's really taken off in our resort channels. So it's not just our college customers. We do a lot of business with national parks. We do a lot of business with ski resorts, a lot of sort of surf shops on both coasts. Their customer is demanding for this product as well. So I can pass this around. One of the things that defines League apparel is that it's soft, right, and comfortable to wear. And no different with what we do for REPREVE. It's super soft, super comfortable. That's sort of our mantra. We're also known, as I said, being a little bit better. Other products that we do, pass these around, headwear. This REMPA style we just launched -- take these off -- is -- was our #1 prebooked style. That's 100% REPREVE. This product here, this is Sundial. It's a lightweight hoodie. We've seen a trend in hoodies going from traditional fleece to sort of lightweight rPETs or polys. This is 100% REPREVE. We had product at the Waste Management -- or WM Phoenix Open. This product sold out before the tournament even started. It sold out there in the practice rounds. So there is strong demand for these products. Certainly, we like to put sort of the L2 twist or League twist on them in the apparel side. But we're having great success. Some of the other things we do, this is just -- this does not have the perforated back panels on that. It's a little -- that's structured hat we're passing around. This is slightly unstructured. This is a newer style for us as well. So just a representation of our product, and you can see the growth we're having with REPREVE. We love the partnership we have with REPREVE because Al and I were talking about this early. We're small. We're a $125 million company. We're not in the billions. We can't afford sort of the marketing assets that a REPREVE can provide to us. So we provide early adopters and influencers. They provide a lot of marketing assets. So it's been a great partnership. From Eddie to Jay to Chad, Catherine and team, we love working with the REPREVE folks. And I think it's an intrinsic partnership because of what we can bring to the table and what they bring to us as well. The last thing I want to show you is some of the activations or some of those marketing and partnerships that we've done. You can -- thanks. So top left is what we were at Notre Dame this past fall. Getting on Notre Dame campus for any kind of activation is very difficult, but they're committed to the sustainability story. And usually, they'll charge for us to get this real estate, which is right near the Hammes Bookstore. I don't know if anyone's ever been in the Notre Dame, but it's pretty busy on a Saturday and a Friday. They're usually charging $50,000. They gave it to us because they're so committed to the story. We also were at Maryland just a few weeks after that, thanks to Al. It was a great activation there, too. Eddie was there. The whole team was there. That worked out pretty nicely. And then you can see some of the things we do in store. We have partnerships with Barnes & Noble and Follett, who manage about half of the campus stores in America. There's about 4,300, they've got 2,100 and something of them. And we're the #2 provider to both of those guys and have been for a number of years, but they're slowly converting over to more REPREVE styles. You'll see this is obviously at Colorado. We did this back in '18. This was part of our launch. And this was Cornell just last year. They wanted the story sort of our today, their tomorrow, which is something that we sort of use now, too. Because what we're doing here is not really, as you guys know, for our children or grandchildren, it's for their children and their grandchildren. Sustainability in general is about that. It's a high mountain to climb. We're just starting this journey. But we like what we're doing. We're going to continue to grow sort of what we do with REPREVE. There's something we're launching. We're actually getting our marketing together with something called L2 Blue that REPREVE will be a part of because there's other things we do. I'm not here to tell you about that today. It's really about our partnership with REPREVE. It's been an excellent one, and we're looking forward to continuing that partnership. So thank you.

Good afternoon, everyone. Great to be here, very honored to be here today. My name is Tony Anzovino. I'm the Chief Sourcing and Merchandising Officer for Haggar Clothing Company. Haggar is not a start-up company. We've been around since 1926, produced product, mostly men suit, men pants, men suit, suit separates, some lightweight outerwear, getting into the knit tops business. But been around since 1926, servicing over 13,000 retail doors in the U.S., Canada and Mexico. Proud to be representing my company. Again, honored to be here today because our relationship with Unifi, starting in 2009, is extremely strong. It is our closest, by far, supply chain partner. Any time in this business you're having conversations with your supply chain partners and it's not issues or problems on a regular basis throughout the week, there's something good going on. The importance of that partnership has really been shown through the pandemic, where we're talking about supply chain issues. We're talking about lead time issues, product quality issues. This relationship has been the cornerstone of what we're doing. And during my presentation, I'll illustrate that to you. We've done this through not only communication, not only the partnership but proper planning, quality of product. So standing here today to say that I have no lead time or delivery issues from Unifi is a very strong statement. Do I have delivery issues? Of course, I have logistics issues. But from a supply chain partnership standpoint, to make that statement is huge, it's strong. And the other part that works into that is the technical support that the Unifi team has supplied us to build 70% of my line using some kind of Unifi fiber, possibly not just REPREVE TruTemp365, is a major statement. It's a big deal. So yes, excellent. Great. So just showing some of the product lines that we have, we heard the number of SKUs since 2018 from L2, very impressive number. These are major programs. I'm going to hand some of these out. The product -- start here, put these at the other end, and they can come off the hanger. So the product that's underlying our products that we're handing out, premium comfort dress pant, and the numbers I'm showing there are sell-through numbers. So in the men's bottoms market, 3%, 4% is usually pretty good. These are massive numbers from a sell-through standpoint when you think about the turn at retail for the product we're having. And of course, the one on the bottom, the Smart Wash REPREVE suit, I think some of the guys -- see a quick show of hands of us who are wearing this today. Okay. Thank you, Al. More than welcome to [ counter ] with me. For that suit to turn at 9% at retail is massive. And we're talking about a suit that is made from REPREVE that is completely machine washable. So putting something out at retail that is as innovative as that, and I'm not talking -- even talking price points right now, but at the Haggar price point, which is a big deal, that's a massive statement.

9% means it's sold through with the...

9% of the inventory held at the store is selling through. And when you think -- it didn't go back real quick. If you think about what some of these numbers mean, in the women's apparel market, if it's a women's top, to have something that turns at 25%, 30%, that's turning really quickly. That's kind of what you want as a fashion piece. We're not really making fashion product. We're making office uniform, if you will, man's suit, a man's dress pant, the product a guy needs every day. These are big numbers that we're very pleased with. And when you look at that line, that's a kind of who's who of Haggar product. H26 represents products that we have exclusively in Target. That's our brand in Target, essentially featuring everything we have in Target almost featuring REPREVE product and 13.6% on an item in Target. That's very good. That's really good. So kind of recap, what are some of these products? Well, Cool 18 Pro was a 4-way stretch product we launched a couple of years ago, done really well, 20 million yards. The eCLo premium comfort dress pant, 31-plus million yards, just kind of flowing through. And when you think about the yardage it takes and those sell-through numbers, these are very big numbers in the men's bottoms business and the men's suiting business, and again, could not be made possible without the relationship we have with Unifi. And of course, honored to receive the 2017 Champions of Sustainability Award. I'm not sure what the current number is, Jay. I think at the time, it was 160 million water bottles. Jay has given me a quota to hit. So I need to keep moving on that. So to illustrate why all of this is important to this relationship, to the Haggar - Unifi relationship, just looking at the sell-through numbers, well, what does that really mean? And if you look at this next slide, total men's -- sorry, yes, total men's market, which means every retailer, you kind of read on the bottom all the retailers this encompasses, we're #1. And we're #1 on -- not on the back of Unifi, but in partnership with Unifi, putting all of those fibers to work, all of the tech to work, the marketing work. Sorry, I was going to grab my green bottle tag but messed with my microphone. To have 908 basis -- an increase of 908 basis points in this market is something we're extremely proud of. And again, very happy to be sharing this with you today and with the Unifi team. To grow in that way with the competition we've had at retail speaks to not just our level of service, but the level of quality of product that we've had. Here's the big win slide. We have -- and I say we, because these are Unifi products. We have 3 of the top 4 best-selling dress pants, dress or suit pants in America. And as the numbers show, the basis point gains show, moving away from the competition. And we're doing that again through the pandemic, through supply chain issues, delivering product that is really needed by the U.S. consumer, by our guy. Putting this slide in here to show because we're making a lot of noise on the suit pant -- in the suit pant business or suit separates business and we're wearing the Smart Wash. This is our fastest-selling suit for a couple of reasons. One, it's price right. Two, it tells a sustainability story. Three, it's machine washable. And how many of us guys have always wanted a machine-washable suit. And when we looked at how many guys are really taking -- the average guy, how often does your suit go to the dry cleaner? This is something you could throw in the wash machine, follow the care instructions, pull it out of the dryer, hang it up, you're good to go. This suit has been washed a couple of times. Like we've gone through extensive testing. So to gain this kind of market share with the names that are on the board, again, something we're extremely proud of. So what's coming? What else are we building? And additional Smart Wash, additional swatches in that, continuing to grow what we're doing with REPREVE, not only in Smart Wash but in the men's suit pants business. OurOcean, so we have a couple of new products that we're developing into using OurOcean because that continues to be something that we just want to do. And the statement that [ Tim ] made with L2, it's important to us as a team. I have a very young design team. And the thing that they're constantly thinking about is what else can we do in terms of trims, recycled content. Chad gave me this hat at OR. So I can tell you, as of right now, with the exception of my shoes, my tie and my belt, I think, yes, I'm head to toe REPREVE product. That's all I'm going to say, okay? Relaunching -- looking to relaunch Life Khaki, and that's a cotton with REPREVE blended products. So moving the REPREVE story into the cotton chino market and then continuing on with our Active Series. And then probably the most exciting thing to talk about is a pant that we have called Pete, and I'll pass this guy around. This has been certified by REPREVE to be completely recyclable. So I don't know if I gave this over to WM to recycle it. This is a story. This is complete circularity with the product. Now if I put this in my recycling bin, they won't take it, will they? Not yet. Not yet. But to build a product that is completely recyclable, diffusible, the pocketing, the buttons...

[indiscernible]

No sir. Recycled -- that is using recycled content already, but the pant itself can be completely recycled. And then as [ Broki ] and I have been discussing, what do we call the pant that -- what do we call Pete that's been completely recycled?

RePete.

RePete. You guys are smart. You guys are smart. Anyway, to sum it up, again, honored to be here today. This is probably the most exciting part of my job, to deal with the Unifi team, technical part of things, the fashion part of things. Just looking at the product with L2, the U.S. consumer doesn't realize a lot of their product now is recycled. Sustainability, as we all know, is not going away. I have a daughter in this business, the only thing she's ever talking about. She gave a 32-minute talk to Utah State University students. I shared it with Jay. Kid talked about sustainability for 32 minutes and could have gone on and on. Building into product using sustainable materials is actually easier than we think. It's just the commitment to doing it. And we are committed with Unifi as partners are doing that. Thank you.

I wanted to thank -- a special thanks to Brent, to Pete and to -- thank you, Tony, and to Tony for their participation today. As you can see, our brand partnerships are very important to us. And these are the types of partnerships that we will continue to develop throughout the supply chain. And then we're definitely looking forward to developing new relationships and new partnerships in some of the new markets that you heard us speak about earlier today that we'll continue to invest in and we'll continue to pursue as we grow this brand, REPREVE. So at this time, I'm going to welcome Meredith Boyd to the podium.

Well, good afternoon. Well, if you turn on the TV, you read the newspaper, browse the Internet or check out any social media, you're exposed to the challenges that our planet is facing, both from a social standpoint and an environmental one. And it's not just a concern for social activists and environmentalists. It's for every person, every industry and the majority of governments around the world. And one of the most historically negatively impactful industries globally has been the textile industry. From environmental contamination to human rights tragedies in developing countries, our industry has a lot of work to do. In recent years, we have seen more attention on legislation, particularly in developing countries, and manufacturers across industries here in the U.S. have already made strides to decrease their contribution to pollution, but nevertheless, in order to change the trajectory that this earth is on to ensure that we're doing more to improve the environment and the lives of people, it has to be beyond compliance. The benefits of sustainability are not at odds with the imperative of profit. And making choices that positively impact our environment that empower our people, this is synergistic to the benefits that we bring to our business and our profitability. In fact, it's essential. In order to make the investments that we need to make, the investments to further our REPREVE production and product offering, expand the intellectual property we have created and generate partnerships, we have to be a profitable, growing company. And to be a profitable, growing company, we must put environmental and social impact in the forefront. Our history of actions and success has prepared us to catalyze growth through future opportunities. And we're learning from our experiences, but we are taking calculated risks. Empowered governance, engaged stakeholders, both internal and external, metric-driven progress, and trust and transparency are the core facets of our growth as a sustainable company. It's actually at this site that we're sitting at today where we first took that introspective look and asked ourselves, how can we be better stewards of this environment? We follow the waste hierarchy principles. So you start with trying to prevent or reduce, reuse, recycle, recovery of energy and, if no other options, disposal. And since the early years of this company, we were very focused on those first 2. How could we implement better manufacturing practices to reduce the amount of waste that we were creating. One example of this is the implementation of automated, in-line quality measurement systems. This allows us to decrease our off-quality production by identifying any potential issues as the yarn is running instead of when it's in that finished final form of the bobbin. Our goal with that is making less waste. And we've invested in small lot production. That's for our spinning plan, which allows us to produce less waste when we're running those highest margin, highly specialized products, making less waste. The development of reusable packaging for both our internal and many of our external customers has allowed us to use less corrugated cardboard, reusing materials wherever possible. Even with all of these key measures, we still recognize that there is waste created when we manufacture yarn. And that's how the idea for REPREVE was born in the early 2000s. That's when we pivoted to the recycled part of the waste hierarchy, finally offsetting those waste products from our production that had previously been down-cycled or disposed of. And as we developed and commercialized REPREVE, we approached the recycled polyester market a little bit differently from our predecessors. We weren't the first to have a recycled polyester offering. That had come about in the 1990s, but those products had a lot of downsides, a limited product offering, a more yellow color, a weaker yarn, small lot sizes and variation. In fact, in China, recycled products that were desirable was particularly novel. Customers have long associated recycled products with poor quality, and they didn't seek them out. We knew that in order to bring a product to the market that would be accepted and grow within our industry, we had to meet the same performance expectations, both within our manufacturing facilities and those of our direct and downstream customers. So we created a drop-in replacement for virgin yarn and the evolution of the REPREVE platform took off. We backward integrated into the production of all steps of the REPREVE polyester process, and we've expanded the platform to include other value-added products like REPREVE Nylon, REPREVE Cationic Dyeable, which allows you to do color blocking or create heather and multicolor effects, and REPREVE flame retardant yarns. We are growing this platform of products to address and anticipate the needs of our customers, and the adoption has been exponential. You heard from Eddie that it is the brands and retailers that are driving every industry, from apparel to automotive to industrial applications. Brands and retailers are making consumer-facing commitments. They want to use more recycled materials, including recycled polyester and recycled nylon. Companies like Target have an engaged guest demographic. Not only are they publicly committing to sourcing lower impact materials, but they're talking about it in their stores, on hangtags, on garment labeling and on their e-commerce platforms. Although polyester is the world's most widely used fiber and its usage is growing, only around 12% of global production for fiber and yarn is currently from recycled materials. In order to meet the goals that you see here and the emergent needs for growth in recycled fibers, investment will be required all around the world and at every point in the value chain. Recycling rates need to improve. Collection, sorting, processing of bottles and other polyester-based materials must increase. For other polymers like nylon, the collection infrastructure is much less mature, but we are growing our REPREVE nylon products, both in the Americas and in Asia. Yarn manufacturing technology of many producers will have to be modified to support recycled feedstock. A great transformation is underway, and we are on the leading edge. Encouragingly, we are also seeing the offset of other conventionally used textile materials like cotton and acrylic as brands consider how can they improve their product performance and lessen their impact with REPREVE polyester and nylon. Raw material plays into a significant portion of the impact that a final consumer good carries. In fact, for a finished good like a shirt or a shoe, the raw material and consumer use spaces represent the highest impact segments of the entire environmental footprint of that product. Along with these raw material commitments, many brands, including market leader VF, are emerging with science-based target initiatives. Science-based targets are carbon emission goals that align with the Paris Agreement to keep global warming below 1.5 degree Celsius. Other key goals and initiatives that address critical areas include water usage and waste management. We are a pivotal player in helping these brands be successful in reducing their own environmental impacts responsibly and in a scalable fashion. These external goals and commitments create a healthy accountability, and it is driving investment, including our investments. So we're taking our own strides to augment our data collection to hold ourselves accountable and to empower our customers in making good sourcing decisions. And one way that we've done that is with the publication of our data into the Higg Material Standards Index, or MSI. The Higg MSI resulted from work between the sustainable apparel coalition and Higg Co, and it is the most comprehensive tool in the apparel, footwear and home textile industries for sustainability analysts, designers and material developers. It's a way for these designers and developers to make conscientious choices and see objective and third-party validated environmental data. Here, you see an example of our U.S.-produced REPREVE polyester filament compared to a conventional virgin polyester and to a generic recycled polyester. You can see that there is a significant decrease in the global warming potential as related to virgin polyester, but also a significant decrease related to generic recycled polyester, differentiating us from our competition. Organizations need a pathway to reduce their environmental impact. And through the use of REPREVE, our customers have a transparent verified pathway in pursuit of their goals. REPREVE cannot be their only solution, but it is a necessary component of any pathway towards carbon reduction. We've had an increasing number of reach-outs from brands who are seeking guidance in regards to their own sustainability programs, how to quantify their impact and to work towards gold setting. And with polyester being the most widely used fiber in the world, the opportunity impact is substantial. The Higg serves as a public scorecard for sharing information about a product's environmental impact and is empowering mindful purchasing decisions amongst mills and brands. In line with our Higg release, data collection and empowering our story analytically will be a key facet of our journey. In November of last year, we achieved the milestone of transforming 30 billion bottles into REPREVE. By producing this much REPREVE as opposed to virgin polyester, we have reduced emissions, we have saved energy, we have saved water, and we have offset our usage of nonrenewable resources. I also invite you to please explore our 2021 Sustainability Report for more extensive impact coverage and to look forward to our upcoming sustainability update later this calendar year. You'll see that we're enhancing and aligning our disclosures with cross-industry frameworks, specifically, the Global Reporting Initiative and the Sustainability Accounting Standards Board. Disclosure is a key facet of transparency, and this gives us an opportunity for our stakeholders to see the impacts that we're making and the opportunities on the journey ahead. In addition to our environmental strides, we're also highlighting the progress we've made around diversity, both in our workforce, our management, our board, and we were very pleased to be recognized as the 2021 Director Diversity Initiative Honoree. It was also in our 2021 Sustainability Report that we made our first public disclosure around greenhouse gas emissions. The first step in any data-driven journey is to calculate where we are today. This allows us to set goals and prioritize resources in the future. So we're starting with our greenhouse gas emissions Scope 1 and Scope 2 calculations. Scope 1 is direct emissions from sources that we own or control. Scope 2 is indirect emissions from energy that we are purchasing from the grid. Our greatest opportunity to affect Scope 1 in the future will be around strategic measures that we make to reduce the impact of the fuels we combust on our sites, like boilers, and make improvements where we generate emissions. Scope 2 will benefit from advancements that decrease the energies that we require from the grid and efforts that are underway with our regional energy providers. Duke Energy, our provider here in North Carolina, has a goal across all of their market areas to cut their own carbon dioxide equivalent emissions by 50% by 2030. We'll see some portion of that benefit. We'll also expand on our disclosures in the future and explore reporting opportunities with additional ESG frameworks, including the task force on climate-related financial disclosures and the Carbon Disclosure Project. These offer us not only an opportunity to showcase our progress but prioritize future areas for improvement. And water is a precious resource, and it's actually one that we don't use in great measure throughout most of our processes, and where we do use it, such as in our dye house, and in cleaning and maintenance for other sites, we do our best to be resourceful. We operate our own water treatment plant in on-site in Reidsville, North Carolina, to ensure that the water that we do utilize is properly treated for discharge. So resources such as energy and water go in, emissions and effluent go out. And quantifying our resource requirements and impact on a product and process level is done through a life cycle inventory and subsequent life cycle analysis, or LCA. This is the foundational data that fuels our own disclosure data and the science-based target initiatives that we discussed. We undertook our first LCA in 2014, and we're underway with a larger scope of study now. We expect our ISO-compliant comparative LCA to be complete later this calendar year. A robust LCA will be at the core of our data-driven approach to sustainability. And our efforts will expand beyond the analysis that's now underway. The data will populate our insights into how we can better improve our performance in our efficiency gains and lower our environmental impact. We have a responsibility globally to lessen our impact, and our operations and global entities give us that opportunity to effect change. And where we operate our own manufacturing assets, we have a special opportunity to ensure that we're developing the best practices and the intellectual property in order to transfer that globally. Our vertical production and development here in North Carolina affords the best proving ground. Now several of you saw the start of our process this morning on your tour in Reidsville. That's where we have our bottle-to-flake production at the REPREVE Bottle Processing Center. Building this plant was part of our full backward integration into the production of REPREVE and the materials for this region. The bottles are sourced from regional material recovery facilities, or MRFs, and brought to our REPREVE Bottle Processing Center. The bottles go through a highly automated washing, grinding and sorting process before emerging as REPREVE flake. Now all of you saw the next steps of the process on your tour earlier today. The REPREVE bottle flake is transformed into resin in the REPREVE Recycling Center here in Yadkinville, and converted to partially-oriented yarn in the spinning plant. The texturizing plants in Yadkinville and also in Madison, North Carolina, convert that dental floss-like partially-oriented yarn into a soft and bulked-up textile yarn. And we're doing it all here, leveraging best practices and highly automated ones. All of the waste generated in any of our resin or yarn manufacturing plants is recycled. These sites are landfill-free. Our REPREVE production processes employ proprietary technologies. Our REPREVE bottle processing and recycling plants have been designed to minimize energy usage and responsibly utilize water. Our site here in Yadkinville is also employing solar energy to offset some of our usage from the conventional grid. Our purposeful process design around REPREVE production and the plants that serve these processes is another way that we are reducing our environmental impact versus past decades. And the IP that we've developed here for the production of REPREVE for functional products and our technologies has allowed us to transfer those values to our global entities. It has allowed Unifi to become the leader that we are for REPREVE in Asia, Europe and throughout the Americas. And another way that we're lowering our energy and emissions contribution is with the investment that you've heard a lot about today, the eAFK EvoCooler texturing technology, Evo. You heard about this investment, and you all are some of the first visitors to ever see this investment in action. Eddie mentioned energy savings as a key benefit. The design of Evo allows us to lower our carbon emissions by way of energy reduction approximately 20% versus conventional texturizing equipment. And this is achieved by the design of new hardware components, the ability to stop and start individual sections, an electronically driven take-up system, it's lighter with fewer parts and significantly higher efficiencies. We've installed energy, electricity and air consumption monitors on all of our Evos to validate our energy savings in real time. And we also have monitors on our old equipment so that we can confirm the data in a comparative fashion. Additionally, the thread path of the yarn on Evo follows a novel and optimized design that puts less stress on the yarn itself, affording fewer process breaks and creating less waste, which means we're running more efficiently versus conventional equipment. Cleaning and maintenance cycles are on a less frequent cadence. This is a benefit because it's reducing the labor that we have allocated to the machine and decreases downtime. And perhaps most importantly, the environment for our production associates is safer and more comfortable, wider aisles, brighter lighting, quieter and without the frequent ladder-climbing of our older equipment. Energy reducing faster, better for the employee. This triple play isn't just going to impact U.S. operations because as you've heard today, this investment is expanding, both here in Yadkinville and new equipment in Central America and Brazil. Our forthcoming investments into lower impact innovations will not just stop with our texturizing technology. We know we have a chief role to play as we evolve the infrastructure for closed and open-loop circularity such as through our REPREVE Textile Takeback programs. Textile materials will play a more significant role in the future as the demand for bottles increases. Eddie shared with you the role that we are already playing in the U.S. and in China. And we're actively working with customers to educate on designing for recyclability, expanding on the textile takeback programs that we have already begun, and we have active exploration and formalized agreements into advanced recycling technologies, including chemical recycling. Designing products and processes with textile waste will further magnify our role in combating greenhouse gas emissions and global warming. We're active in industry organizations in this space, including accelerating circularity and industry group. Several of our brand partners are already speaking about their engagement with Unifi in this space, and we know that this list will grow. Collaboration at multiple points in the value chain from collection, to sortation, processing and application is required to maximize the benefits of Textile Takeback and grow our efforts in this space. Outdoor products leader The North Face and contract furniture brand Steelcase, along with fabric designer Designtex, are partners who have focused on taking accountability for pre-consumer textile waste from cut and sew production. Both of these partners worked with Unifi not only to collect waste from their suppliers but also design consumer-facing stories and products around their use of the REPREVE Textile Takeback materials. The ReGirlfriend collection of Girlfriend Collective focuses on designing for circularity and post-consumer reclamation. Another opportunity, not only for brands but also the consumer, to get involved with Unifi and take accountability for this waste that is created as part of our collective value chain. And another REPREVE extension that you heard about just a few minutes ago is REPREVE OurOcean, which is one of our newer REPREVE offerings, and it empowers an impactful new supply infrastructure. When we originally launched this product, we were incorporating 33% of ocean-bound materials into the product. This was a good start, but we've recently relaunched with 100% ocean-bound material. The content and offsetting potential harm for vulnerable aquatic environment isn't the only benefit here because we're creating demand in countries that are without a formal recycling infrastructure. We're creating jobs that help fuel that demand, collection in those countries. And creating those jobs empowers a new workforce. Creating jobs in developing economies is bringing specific benefit to families in these communities. And to ensure that, that workforce and the supply chain are being ethically managed, we've employed a third-party certification called OceanCycle to validate this unique pathway from bottle to resin and to yarn products. We've had success with REPREVE OurOcean for both packaging applications as well as textile products in the Americas and in Asia. And we had a recent launch of an H&M collection which highlights REPREVE OurOcean. H&M has a large fashion following. So this gives a great opportunity to magnify the benefits of programs like this. H&M's key demographic is 17- to 25-year-old women, 18- to 30-year old men, a cross-section of Generation Z and millennials who are driving decisions about what they buy based on social and environmental factors. And in celebrity fashion news, Jennifer Lopez was photographed in this pink puffer just 2 weeks ago. So this is a powerful platform for REPREVE OurOcean. And another recently launched technology, it's actually only launched a couple of weeks ago at the Outdoor Retailer Snow Show, is REPREVE SmartDye. We created a REPREVE polyester yarn that is modified to dye at a lower temperature versus traditional polyester. This technology can be applied to filament or fiber. The reduction in energy consumption due to the lower dyeing temperature of about 30% decreases the associated emissions of greenhouse gases. And when paired with REPREVE, these impacts are amplified further, leveraging the benefit of the base polymer versus the virgin equivalent. So polyester is traditionally dyed under high temperature and high pressure. This product is dyeing without either of those, which in some cases, can afford the opportunity for mills to dye polyester or combinations with polyester that they might have not been able to dye before. Additionally, stretch can be maintained because that's typically lost to some degree at traditional polyester processing temperatures. And another benefit we see is a decrease to cycle times, which means our customers or our own package dye house can actually process more yards of fabric or more pounds of yarn on the same equipment they have now, so a capacity increase without capital. The product launched globally in January, so we're looking forward to seeing this impact. Now we know the value of REPREVE is its contribution to comprehensive sustainability, both for us and for our customers, and that goes beyond the global availability, the performance, the functionalized offerings. It goes to the core of ensuring that our customers can feel confident in the products that they're sourcing. And as you heard from Eddie this morning, customers need confidence that the claims that they are making about their product are substantiated and defensible. Third-party certifications or proprietary U TRUST certification, our tracer technology, FiberPrint, and our attention to global restricted substances lists and chemical certifications ensure that our product offering is carrying a value proposition that promotes what we are doing from a product and process standpoint globally. Our third-party certifications such as the Global Recycled Standard validate our REPREVE supply chain for products that are produced globally in our facilities and those of our suppliers, both for recycled content and social best practices. We're striving to ensure that our products are being produced with the lowest environmental impact while promoting the livelihoods of the communities where we are producing, where we source and where we sell. Transparency of supply chain is becoming more and more important as the world encounters challenges of production in many countries. And the textile industry is not immune to these challenges. In fact, it is one of the most challenging industries. You heard from Eddie about our commitment to be -- to transparency with our U TRUST certification. And in January, we launched an expansion program to U TRUST that promotes visibility to the end brand and retailer and integrates nicely with e-commerce platforms. It's our U TRUST product certification program. So we originally launched U TRUST with a focus on fabric, and we have found that brands and retailers seek confirmation and validation of REPREVE content and supply chain visibility all the way to the finished article. So as an example, a jacket might actually have 5 or 6 different fabric components. Think about the face fabric, aligning the cuffs. So those fabric components could each be produced at 3 different mills. That's 15 fabrics and 15 U TRUST fabric certifications. Those 15 certificates can now be linked and verified to confirm that, that single product, the jacket, is U TRUST product certified. This brings an efficiency and a confidence to the brand or retailer who's selling the article even with a complex value chain. So with this new program, we can confirm and map REPREVE content and associated component certification, affording both upstream transparency for our brand and retailer customers and greater downstream visibility for Unifi. And it's all empowered and possible because of our proprietary tracer technology, FiberPrint. Now it's the global offering, the products, the validation through data and certification that is making up the full value proposition of the REPREVE story. And as you heard earlier today, there is a quantifiable margin benefit when we sell REPREVE versus virgin products. Wherever we can couple multiple facets, REPREVE with a specialty function like SmartDye, a special feedstock like REPREVE OurOcean or even a suite of complementary quantified values, we differentiate our product platform even more from our competitors. The differentiation is allowing us to achieve higher margins on multifaceted products and protects our placement with brands or retailers as they find that these REPREVE-plus products are empowering for merchandising to communicate the function or story all the way to the end consumer. Developing new functional products that offer multiple benefits for our customers are key to our future development efforts. More facets, greater penetration in product placement and expanded margin are key to our P&L. In 50 years, we've transformed from a North Carolina commodity textile producer into the global leading choice for environmental conscientiousness in our industry. It is a holistic process, how we produce our products, the hardware and technology to lessen our environmental impact and create a better life for our employees and the communities that we serve and impact. It is the people in our plants, in our offices around the world who are creating and commercializing these novel products and processes so that we can be very proud to be the industry leader that we are. And it's the synergy of empowering people, driving a quality customer experience, and constantly and powerfully innovating and developing technology that we can ensure that we are fueling what is right for our business and what is right for our planet and the people who inhabit it. This will allow us to compound on the success that we've already started. There is much more work to be done and more investments to make. We're using the preparations that we have made to seize on future opportunities. Sustainability is at the core of everything we are doing at Unifi. It is integral to the success of our company. REPREVE as the flagship brand for our sustainability journey has a strong future, and we are on an incredible trajectory. And as you've heard at the start of the day today from Eddie, I'll remind you of our next goal for our REPREVE journey to recycle 50 billion bottles. And we expect to achieve this goal by December of 2025. This achievement also represents a pivotal milestone of achieving more than 50% of our total revenue from our REPREVE product platform. And that achievement will compound on the further savings of energy usage, emissions reduction and water savings versus virgin equivalent production. We couldn't achieve this without the people across our facilities and the customers who are driving demand for our products because ultimately, it is collaboration, both internally and externally, that will afford our success, both for the REPREVE brand and for the continuing transformation of this company to weave positive impacts for people, planet and product. And it is the fact that we are focused on these positive impacts that differentiates Unifi and solidifies our strategy. Our journey to 50 billion bottles, to innovation and technology empowered by sustainability, to globally competitive and mindful production, this is our journey to socially and environmentally conscious growth to being a $1.1 billion revenue company and beyond. Thanks.

Thank you, Meredith, and a great presentation of how ESG is part of our DNA. For those of you on the webcast, we're taking just a couple of minutes to reset the room to prepare for Q&A. So we will be back live for Q&A in just a couple of minutes. Thank you.

And welcome back. We will now begin the Q&A session. Our first question is from Dan Moore of CJS Securities.

First one is around EvoCoolers. In the slide deck, it looks like plus or minus kind of a $20 million EBITDA uplift in your fiscal '25 projections. Can you talk maybe with more specificity -- that's my number, it's not yours, but more specifically around IRR, ROIC, payback period, et cetera, for those investments?

It's a good question. So for Evo, we were able to take the wraps off today, talk about that we're going beyond just this U.S. installation, doing that in El Salvador, also doing it in Brazil as well. The justifications that were done and presented to the Board, as you saw today, we're only into a few of those machines actually being installed, but they were compelling cases. They're compelling cases for increased throughput, for cost savings, for efficiencies. And in some of those locations, including El Salvador, where the price of energy is much higher than it is, say, here in North Carolina, those -- that definitely helps the internal rate of return for that location. So I would say -- I would suffice it to say, and I'll maybe let Eddie or Al add on to this answer, that the Board was very satisfied with the projections of the investment that was being made -- will be made. And so far, we've seen nothing that's deterred from what we presented to the Board. In fact, I'll build off a little bit what Meredith talked about, it's actually even, maybe in certain areas, better than we projected. So I'd say we really felt like it was a worthwhile investment, something that the Board was very supportive of us doing. So Eddie, you want to add to that?

Yes. I think that exciting is you make a big investment like that, which we made a decision several years ago to start on the journey, when you actually put a machine in place and you see it run and it actually runs the way it's supposed to, we're even more encouraged. I think we're -- the number you've highlighted may be a bit higher than that, but we won't know until we actually hit 2024, at the end of '24 with all the installation in. But we're very pleased about what it's actually delivering. And we know that now because like you said, you saw today, we have quite a big number of machines running.

So we kind of keep hanging on to that number on IRR until we see a little bit more performance out of these things, but they're positive, very positive. And I would also say that if we don't do these things, in about -- within 7 years or so, you've got to start replacing these others with the same old equipment without the benefits. So some recapitalization, and it's better equipment that's going in for the future. But we'll keep you posted on the performance. After only 8 machines, I don't think we want to lay out a number yet.

And our next question is from Scott Blumenthal of Emerald.

Keeping with the EvoCooler theme, I know that there was a $100 million total investment that you all intended in total. Can you talk about how much of that is completed? What's yet to be deployed? And what do you think the cadence is going to be from here on out?

Sure. Good question. Some of that $100 million has already been spent, specifically for many of the -- a lot of the equipment that was scheduled to come into the U.S. The initial deposits, initial payments also in El Salvador and Brazil have been made as well, too. We really think that capital spending will be a part of our spending for FY '22, also into FY '23 and then into FY '24. The numbers that we gave for CapEx projections for FY '25 really project us to be on the other side or completed of all the Evo upgrades. So it's really this fiscal year FY '22, plus 2 more fiscal years, where that capital spending will be elevated. That will be the bulk of where that $100 million will come from.

[Technical Difficulty] Is that okay?

Sorry. One second, Scott, let's restate the question for the webcast. Thank you.

And you expect that capital -- remaining capital to be spread equally across the next few years?

It will be pretty equally spread across those 3 fiscal years, '22, '23, '24. That is correct. Yes.

And just a reminder, we already had spent money in the previous 2 fiscal years.

And our next question is from Marco Rodriguez of Stonegate Capital.

I wanted to kind of ask a little bit about the gross margin projections you guys have for 2025. The 14% to 15% range, I mean obviously, historically, you've only been there a few times in the last 10 years. Just kind of trying to get a gauge as far as your confidence levels on maintaining that margin past 2025, just given the variabilities that you've normally seen in your gross margin line?

Yes. We've been seen, as you know, as a sort of a cyclical business. And I think there's a few things going on. The Evo is definitely going to make a huge difference in what we're doing. The growth in REPREVE, it's huge, because we're getting the growth in the volumes, and that volume growth, a huge part of it is in Asia, as you know. And if you look at the Asia gross margins, they've been historically quite stable and actually higher than what they have been in the U.S. So we expect to elevate the margins in the U.S. because of the Evo. And because we're growing REPREVE, we expect to grow our Evo -- our total gross profits and maintain our gross margins in Asia, which have traditionally been around that 14%, 15%. And then in Brazil, we have had that nice uplift over the last 18 months that we have said it's going to come back to normal. But with the increased volumes we're going to get with the new capacity we're putting in onstream in there, we still expect to get in the region of 15% to 17% -- 14% to 17% gross margin. So bottom line is, yes, we do expect, once we make this capital investment as we grow REPREVE, to have that stability in gross margin, that -- especially with a company like us, who was really reaching that 50% volumes of REPREVE, that's going to sustain us and sustain that margin percentage.

Marco, our insurance policy would be those upsides for outside apparel. And I don't know we have something in our hand today yet until we start seeing that go, but that's where you'd hope you beat it or offset any kind of negatives that we might have.

Our next question is from Chris McGinnis of Sidoti & Company.

Just around the Brazil forecast longer term. There's always been issues around foreign currency and then the imports. Just how do you offset that going forward and get that to drive that 80% increase that you're talking about sustainably, I guess?

Yes. Like 75% of the yarns we have sold in Brazil are imports. And as I said on the -- earlier on, we used to have an 18% market share, and it got down to 12%. But that -- as that market kept on growing and growing and growing because of the population growth, and more recently, because of the impact of the foreign currency, and now even on top of that, the difficulty with logistics, supply chains, that market is continuing to grow and if we don't invest down there and grow our capacity, somebody else probably will. And so by having the best technology out there and having exclusivity for several years to come, we'll be ahead of anybody who wants to put some additional capacity down there.

[Technical Difficulty] I guess just as the investment in the EvoCooler, does that give you that benefit? Where do you sit versus the import coming in, in terms of pricing?

Yes. So traditionally, why -- part of the reason we haven't had those volumes is because we've been very focused on the specialty business down there. We have -- we sell a lot into the package dyed market down there, which needs lightweight packages, custom size. We sell a lot into denim, and that's a very particular product we sell down there. So with this new initiative into adding these Evos, we know that we're not going to get the 25%, 30% margins of similar products. But we feel very confident that because our costs are going to be so low, we'll be able to get that 15%, 17% margins and compete with the imports because what everybody knows today is the supply chains are wrecked. And we have been able to, because of our position, to be able to service so many other customers, like I said, overnight been able to capture that market share. And we're -- the market knows we're going to be putting in these machineries and we've been telegraphing that. And that's why in Q4, as we put in our first machines down there, and they'll be up and running by then, we'll start to capture that market share. So I just wanted to introduce the team. We've -- you always hear from myself and Al and Craig, but these are the people who make it work. We have Mark Sidden, who is our CIO, and now we've actually -- he's the head of our Transformation and Digitalization team. So you're going to hear more about that in the future. Brad Nations, he's the guy on the front line with all of the manufacturing headaches that are going on, but he's celebrating that. You've heard from Jay. Craig is our CFO; Al, our Executive Chairman. Meredith, she's over our innovation and technology and sustainability. And you know, she can talk about that for a long time. Along with Brad, we have our Head of HR. So the 2 of them are partnering up with these challenges. So Alison has been with us for a long -- actually, everybody has been with us for quite some time, and they have Sohan Mangaldas over all of our sourcing and strategic information and our head of legal counsel, Greg. Greg basically keeps us all out of trouble, so -- so thank you. Any more questions?

Our next question is from David Silver of CL King. Thank you, David.

I have kind of a odd ball question, I think, and it's about culture and how that jives with your marketing strategies. So I don't want to go too far afield, but in the United States, people, for their suits, let's say, they prefer natural fibers, wool, let's say, or cotton for the dress shirts. To me, it's the exact opposite when you look at Asia. In other words, polyester, synthetic fibers have been preferred there for decades over natural fibers, for various reasons. So you had a very -- in the very early part of your presentation, you had a very aggressive growth trajectory for Asia relative to the other regions. Are there any important distinctions maybe with how you approach those markets just related on the cultural acceptance or preference for natural versus synthetic fibers beyond the recycled element?

Yes. I think a perfect example would be the golf industry. If you think about 20 years ago, nobody wore a golf shirt made of polyester. They all made -- wore cotton. And today, nobody wears a cotton, practically speaking, golf shirt. So even in the U.S., where cotton in corporate has done a great job marketing cotton. And cotton is a huge -- U.S. is a huge producer of cotton here. So it's natural they would be using a natural resource that's close to home. But if you're talking about performance products like if you're out exercising, polyester is the preferred fabric and yarn of choice. It is 70% of the world's fiber that's out there. So maybe the Asians were ahead of us because they didn't have cotton or maybe they just were more enlightened. But if you think about the amount of space that this whole site takes up, it's so much less than any space that cotton required to make the same amount of production. So I think the U.S. is becoming more enlightened. And also the -- a lot of times, customers -- consumers, they're product takers, not product makers. And I think sometimes brands are delayed in getting the product out there that the customer wants. But today, you see anybody who wants performance, anybody who wants -- like I talk about these shoe uppers, we're not -- we're abandoning our other shoes. We want to have more comfortable, fun and more environmentally-friendly products. As we move towards more polyester in this country, we'll also then move towards sustainability, and we'll be able to give customers what they actually want, sustainable and performance. So I think the journey -- the train has left the station already on that one, I think, David.

Our next question is from Jake Patterson of Talanta Investments.

Kind of just a quick one on margins again. I remember in some of the more recent earnings calls, you talked about some of the antidumping duties that were starting to show up for, I think it was like 7 countries or so that you mentioned. And I was just curious if there's any update on that? And if any of the margin guidance for 2025 was considering any further impacts from that?

Yes. So we're really excited about -- it was actually 6 countries. First of all, it was India and China, and then Malaysia, Indonesia, Thailand, Vietnam. As we close out the year, the government made a ruling and we are starting to field a lot of questions around that. Now it takes about 6 months for supply chains to be -- used to be 3 months, but it takes about 6 months on average for supply chains to be reversed. We are expecting to get -- the original analysis we had was about $20 million of revenue to uptick. And we expect by 2023 to have much more than that, especially because we've got this new competitive manufacturing assets, the EvoCoolers. So we do think, along with the fact that the freight lines are still constrained and expensive and the fact that we have quick turn ability with new capacity, we will be increasing our margins. I mean ultimately, we have to increase, and we are increasing the margins of our U.S. operations, and part of that will be grabbing this market share of this commodity business that's coming in from Asia.

Our next question is from Marco Rodriguez of Stonegate Capital.

I was wondering if you could talk a little bit about the volume growth you guys are expecting in your plan? And how important the technology of traceability plays into that in driving that volume growth? And if you can also maybe talk about what your competitors are doing to also try and help or at least market their abilities to consumer brands that they're not being greenwashed?

Well, I'm going to take the initial question. I'm going to hand it over then to Meredith. But I think it's actually really, really important. The more we talk to the brands, the more they're telegraphing they're scared about greenwashing. Similar to what happened years ago with child labor, that's not an issue anymore. Anyway, practically speaking, not an issue anymore anyway in garment production. But now they have this other issue to deal with, and that is when they're making a claim about sustainability, they better make sure they're doing it. Social media has changed everything. When any corporation speaks, they have to be speaking the truth. And so that fact that we have our FiberPrint technology that's within the yarn, it's in the fabric and now it's in the product, we have confidence that we can tell the person, yes, it's made for REPREVE, and if it was made from REPREVE, it was made from recycled content. So it's a really exciting time for us. Maybe Meredith could talk a bit about this latest U TRUST verification system, which is the product side of it.

Yes. Terrific. Thank you, Eddie. Yes, I think there's a few different facets here. So with the product certification piece, that's really telling us that our end customer really values that traceability all the way to what they are selling to their consumer. I mean it is the brand retailer who have the accountability of saying, this is an eco-friendly product, this product is made with recycled product, or our hope, it's made with REPREVE. And I think that puts them in a position where they do need that defensibility. And with our new system, this U TRUST product certification, we are giving full visibility from the point of a bottle being pulled back all the way to finished article in a retail environment or pulled from a consumer's closet in 20 years from now. So the fact that we are having such positive reception to the U TRUST product certification tells us that we've always been ahead of the game in regards to traceability, but this goes a step further. And to another of your questions about what's our competition doing, Marco, we see a lot of emphasis on third-party certifications. And as you know, we also use third-party certifications around recycled content and social aspects of our production. But we are the original to have had a physical taggant that can be traced throughout the product. And it's in there for the lifetime of the article. And this isn't limited to a jacket or a shoe. I mean this can be a seat in a car vehicle. And so the fact that we're really using complementary ways of making sure that the product has that transparency to the final customer, that's where I feel that we're really differentiating ourselves as opposed to relying on one. They rely on chain of custody standards. And so that would mean that if I'm selling a product and Al is my customer, then I'm writing on a piece of paper that, Al, I sold you 1,000 pounds of REPREVE product, and therefore, you can make 2,000 pairs of pants. And then he would continue to pass that down the chain. The challenge there is you are dependent on systems. And in many cases today, you're still dependent on physical people who are actually having to do all of these little calculations along the way. So it introduces some more opportunities for accidents, we'll call them, to enter into that value chain. With the tracer, with the complementary U TRUST certifications, you've got that additional defensibility ultimately to the customer even beyond a chain of custody standard.

And do we see any -- I think your question about what's coming at us on competition in this space? Is there anybody who's doing anything that we would be concerned about?

Well, one of the things about FiberPrint is this is a technology that we evolve. We evolve and we don't talk about it because we want it to remain a proprietary and confidential sort of feature of our products. But while we talk about FiberPrint in kind of general terms, it's not a one-size-fits-all and it's not something that is static. So it allows us to continue to evolve behind the scenes so that we are protecting the integrity of our product. Al, a lot of the other products that are out there, even where we've seen some conversations of dabbling into tracers as well, we don't see anything that has the security that we've been able to uphold with the dynamic nature of FiberPrint.

Our next question is from Chris McGinnis of Sidoti.

Just to touch a little bit more on the 4 parts I think you mentioned that are newer markets for you to go into, I think 3 were in the U.S. or North America. Can you just talk about when would you expect to get some traction on that? Is that next year or the year after?

On the Knit Cord PPE, that's -- when the government, the U.S. government releases all that fund, we expect that to happen very quickly. So Q4, our fiscal Q4, we expect to see some results. And that side, the automotive side, it's, as you know, a very slow process. You have to get adoption and adoption and pass all these testing. So we have been working on that for over a year now, but we do expect in fiscal '23 to see the benefit of that. The shoe uppers, like I said, is in Asia. But on the packaging and the nonwovens, that's happening now. And we're starting to see some significant volumes in this quarter actually pull through on that on the resin side and the flake side.

Our next question is from Dan Moore of CJS.

Chris stole part of it, but I'll add on to it by asking, did I hear $50 million? Is that an annual number by '25?

Yes. That's sort of the rolled up estimated -- it's really hard to forecast that, but we've just some -- we've done an estimate of about $50 million as part of that $300 million growth.

And what is it inherently that drives that -- those 4 end markets as being a higher margin relative to [indiscernible].

Two things, it's REPREVE, and we're making a specialty product for that end market. So we're sort of REPREVE plus, as it were.

All right, one more. Just thinking about the evolution here, a couple of years ago, you had an agreement with the Pac-12. And listening to the presentation from L2, it strikes me that rather than having an agreement with one conference, now you have someone that attacks the entire country in terms of universities, colleges, et cetera. Are there more middlemen in other end markets that you can and are thinking about going after to really accelerate [indiscernible]?

I'm going to let Jay jump into that because he was the originator of the L2.

Yes, absolutely. That's part of the process, part of the strategy. We have -- the brands really take us to the consumer. And so we've been very fortunate to partner with Pete and L2 brands to really take us across the collegiate market. But then from a strategic standpoint, we partnered with the Pac-12 because of the Pac-12 green team, just like we -- it was a great fit for us just like WM is also a great fit for us. So I would definitely expect to see more partnerships like that in some of these new markets that we enter over the next 2 or 3 years.

Our next question is from Scott Blumenthal of Emerald.

Yes. I guess this is a follow-up to Dan's question. You talked about co-branding, larger social media presence, digital, industry associations, all of that industry-specific marketing. Have you talked about a budget or what you think this -- it's going to cost in order to attack these kind of differentiated nontraditional type markets?

It's a good question. So during the COVID, we really ramped down our expenditure on marketing. We have a mobile tour, which is fantastic, but we couldn't bring it anywhere. And we stopped investing in some of these digital spaces, but we are in the process of hiring. It's really about people at the end. We're hiring some expertise, and we're not going to spend huge dollars on it, but we'll spend enough money to where we're going to get noticed out there. We have traditionally not -- still [ on top of the mountain ] accelerated what we're doing here from a sustainability point of view. We're not always seen as the ESG company. So this focus on not just selling REPREVE out there in the marketplace, but talking about Unifi out there as being an ESG company, we need to do that. And we're going to invest some money. But I'm not talking about $3 million, $4 million, $5 million to do that. It will be maybe $1 million or $2 million.

I think we've been a manufacturing company more than a marketing company. I don't think we'll ever be a Gatorade or something along those lines. But I do think we'll add resources in the area of comms and marketing. But the best way for us to deal with marketing dollars and getting the word out is to hitch a ride on a Haggar slack or on a Nike or on a brand that really has big money to spend on their brands. So that's probably what we're doing, right, Jay, I mean kind of the approach. Always open to new ideas, though. And this Waste Management investment that we made is very good, it's really paid off. There's lots of advertising on TV that we got for a deal. Brent left, I wanted to make sure he's hearing me say that.

It is important for us to tell our story. And we haven't -- we are a humble company with humble people actually, and humble leaders. So we're going to unveil what we have really out there and spend some money celebrating what we're doing. So...

And our next question is from Marco Rodriguez of Stonegate.

Another bit of a follow-up here in regard to the non-apparel brands, the movement towards that. Can you maybe talk a little bit about the differences from a marketing perspective, if there are any, and then what the differences are in the sales cycle?

Yes. So a lot of this is going to be focused on industrial or spaces like automotive where a part of something is part of something is part of something. What we're doing is actually hiring industry-specific experts who know a certain industry. And so we're not trying to take years to understand this. We've got other consultant or direct hires out there helping us find those markets. So that's really -- that's where the expenditure is for us. And it does take -- automotive, it takes 2 years really to -- before you get something. But when I talked about that scrim fabric, we've been working on that for 1.5 years. But we're getting really close to getting some volume for that. So -- but it's about hiring industry experts so we're not having to learn something from scratch.

I'd say that, just to add to that, footwear and knitted cord, some real volume on the earlier side. And the automobile takes a while. It's actually pretty frustrating on how long it takes, but you hang with it because the pay day could be very good.

Yes, that's exactly right.

Another question from Dan Moore of CJS.

Last one for me, and I appreciate all the time today. Capital allocation, you gave the slide obviously, very balanced, but it doesn't necessarily rank order it, obviously, beyond -- we know what capital investments will look like. Talk about buybacks, particularly given where the stock is today relative to -- this is the first time we've heard more about M&A. So relative timing and where you would focus your extra dollars at least today, given where the stock is?

I think the improved balance sheet position, the lower debt, the lower net debt really gives us flexibility. It's something quite honestly, we haven't had for a long time. So where we were focused mostly on debt repayment or focused on capital expenditures, those were the only 2 choices we had. As at the end of December, we had nothing borrowed on our revolving credit facility. So we had our term debt and a little bit of capital leases. So basically, that gives us lots of flexibility. We did go back into the open share repurchase program. It is something the Board evaluates on a very regular basis. And I think that will continue to play a part in what we do as far as capital dollars. And acquisitions, we got back into that in FY '21. We're not going to do them if they don't fit. But when there are very good fits like the 2 we did, they got integrated into 2 different facilities here within 90 days, and they continue on to be just very strategic and very accretive. Really, for what we paid for them and what the value that they're bringing to the business, we'll continue to do those. So I really think it comes back to just continuing to be opportunistic, look for the levers that we want to pull. And I think we put ourselves in a position where we've got more options than we have had in the past.

And we have one question from the webcast. Can you elaborate on how you will source feedstock? Where is it coming from today and what additional channels may be needed to source feedstock as it relates to the 50 billion bottle goal?

So I'm going to quickly answer that a bit of it and then give to Sohan. We are not worried about feedstock, and I'm going to let our expert explain why. Sohan Mangaldas?

Yes. So in fact, if we look at North and Central America, most of our feedstock is from local supply chains. Like if you look at bale bottle, it's all sourced within the 50 states in the U.S. And if you look at Central America and the like, we do send filament yarn from the U.S. into Central America. If you look at Brazil, like feedstocks are like pretty much virgin and it's all from Asia. And if you look at the feedstock up in Asia, it is all continuously coming from the supply chain partners up in China, Taiwan, Malaysia and actually Thailand. So again, I do feel pretty good about it in like in the terms of sourcing fibers and yarns. And I think going forward, I don't see an issue with that.

Yes. And just to put it in perspective, there's 25 billion pounds of bottles collected around the world, and it's expected to go to 35 billion bottles collected by 2025. So the challenge is probably the U.S., but who do we have here speaking today? WM, our biggest -- the biggest collector and sorter of bottles in the U.S. So we have great partnerships here that we'll leverage to make sure we're safe on the supply side here in the U.S. Thank you.

And this does conclude our Q&A session for the day. I will now pass it back to Eddie Ingle for closing remarks. And after that, for those of us here with us physically, we will have the management team in the room for a few more moments immediately after the event. And we will conclude the webcast after Eddie's closing remarks. Thank you.

Thank you for your time today. It's really a great honor and pleasure to have so many of you here today. And for those of you listening in, I hope you -- I hope it's beneficial for you also. So in conclusion, really, the future is bright for Unifi and we are really excited to take on this transformative journey with you. As you heard, we have the innovation, we have the technology, and more importantly, we have the people to drive the growth strategy that is going to position our company as a leader in sustainability and innovation. But also as -- going back to the -- what was earlier, we're going to get back to solid gross margins on a consistent basis. In our work here, it's not only important just to our customers and our people but also our end consumers. It's also, as we know, it's important for our planet and our future. And we take our role as this leadership role really seriously. And we're going to continue to work towards building a brighter future so we can deliver on our promise to make everyday life better for the good of tomorrow, as you can see here. Our focus on sustainability, innovation and our regional business model that we have is what gives us confidence in us reaching our goal. And just lastly, if your investment thesis is to invest in sustainability, we are, simply put, the real ESG company, and we have the sales of REPREVE to prove it. Thank you. Thank you for your time.