Good morning, everyone. On the call today is Tom Caudle, President; and Sean Goodman, Vice President and Chief Financial Officer. During this call, management will be referencing a webcast presentation that can be found at unifi.com. The presentation can be accessed by clicking the second quarter conference call link found on Unifi homepage. Management advises you that certain statements included in today’s call will be forward-looking statements, within the meaning of the federal security laws. Management cautions that these statements are based on current expectations, estimates and/or projections about the markets in which the company operates. These statements are not guarantees of future performance and involve certain risks that are difficult to predict. Actual outcomes and results may differ materially from what is expressed, forecasted or implied by these statements. You are directed to the disclosures filed with the SEC on the company’s Form 10-Qs and Form 10-Ks regarding various factors that may impact these results. Also, please be advised that certain non-GAAP financial measures such as adjusted EBITDA, adjusted working capital, adjusted net income and adjusted EPS will be discussed on this call and non-GAAP reconciliations can be found in the schedules to the webcast presentation. I will now turn the call over to Tom Caudle.

Thanks, operator, and good morning, everyone. Thank you for joining us today. I will start today’s call with an operational and strategic overview before turning the call over to Sean who will take us through the financial details for the second quarter and first-half of fiscal 2017. Our financial results reflect continued success and strong execution against our global strategy to provide high-quality, innovative and sustainable products for our customers around the world. In particular, we have significantly improved year-over-year results across our international operations in both Asia and Brazil, which has helped to offset some persistent soft market conditions in our domestic business. Let’s start with Asia. Volume and margin growth remained very strong in the region during the second quarter. Our PVA portfolio continues to grow in China and we foresee exciting opportunities in Sri Lanka and Vietnam. In both filament yarn and staple fiber, we continue working with key brand and retail partners to develop long-term PVA programs that would drive value throughout the supply chain. In Brazil, our results reflect the continuation of strong performance achieved throughout calendar 2016. Our team in Brazil has been able to successfully capitalize on expansion of the synthetic fiber market under a favorable tariff environment for imported raw materials, shutdown of a competitor, plus a volatile economic and political operating environment. So let’s spend a few moments on our U.S. regional business. Looking at the apparel industry, calendar year 2016 marked the lowest growth in overall apparel sales for the last five years. As a result, our domestic yarn sales have declined accordingly. After 2016 warm winter, weak retail season and associated inventory accumulation, retailers and brands were very cautious with orders during the December quarter, especially as the apparel industry showed flat year-over-year performance, leading up to the holiday…

Thank you, Tom, and good morning. Looking at our presentation on Slide 3, we see a high-level overview of the second quarter net income. For Q2, we are reporting net income of $4.6 million and basic earnings per share of $0.25. This is $1.9 million, or a $0.11 per share lower than the prior fiscal year period. However, when comparing net income in Q2 of fiscal 2017 to Q2 of fiscal 2016, we need to consider a number of specific guidance. First, net income for the second quarter of fiscal 2016 included $400,000 associated with key employee transition costs. In Q2 of fiscal 2017, we had a $1.7 million loss associated with the sale of Repreve Renewables, comparatively weaker performance from Parkdale America of approximately $300,000, and approximately $300,000 of after-tax start-up costs from the bottle processing facility. When one adjust for these unique items, net income for Q2 of fiscal 2017 would be in line with the prior fiscal year second quarter. Slide 4 of the presentation shows a high-level overview of the year-to-date results. For the first-half of fiscal 2017, we are reporting net income of $14 million and basic earnings per share of $0.78. Adjusting for the same items that we discussed in the previous slide being key employee transition costs incurred in fiscal 2016, loss on the sale of Repreve Renewables, Parkdale America’s performance, and start-up costs associated with a bottle processing facility, net income would have increased by approximately $3 million, or 20% in the first-half of fiscal 2017, compared to the prior fiscal year six-month period. Turning to Slide 5, you can see the sales and gross profit highlights for the second quarter. The discussion here focuses on our core segments, which exclude ancillary operations. Refer to Slide 12 for the consolidated metrics. Overall,…

Thanks, Sean. While we’re pleased with our fiscal 2017 results to-date, the domestic market remains challenging. We again see the current weak domestic market conditions, as temporary, and we expect to be very well-positioned to benefit when the environment improves, as it inevitably will. For now, we’re focused on optimizing our high-performing assets, executing on the completion of our multi-year capital expenditure plan, product and process innovations and downstream business development to drive long-term growth in shareholder value creation. We continue to like our competitive position and we remain excited about our prospects. I will now turn the call back over to the operator for questions.

[Operator Instructions] Our first question comes from Marco Rodriguez with Stonegate Capital.

Good morning, guys. Thank you for taking my questions.

Good morning, Marco.

I was wondering if maybe you could provide a little bit more background detail on the tariffs there in Brazil? Just kind of walk through, if you could, the rationale or the reason for the tariffs coming up and then your confidence about the one that comes to the Q4 2017 reversal of that, if you will?

Hi, Marco, it’s Sean. So we had a favorable tariff situation for our raw materials in Brazil during calendar 2016, at least, during most of calendar 2016. What that means is that, the import tariffs on the POI material that we import into Brazil had a tariff rate of 2%. That tariff rate has increased. Now it was a temporary reduction in tariffs that we have on the Brazilian government. Bu the tariff – that temporary reduction has now been lifted and the tariff rate is currently 18%, so significantly higher than the 2% number that we had during most of calendar 2016. We do expect the indications from the Brazilian [ph] parties is that, the other tariff rates will be implemented during calendar 2017. It’s something that needs to be approved through the [indiscernible] organization in South America, and there’s a meeting scaled to approve that during our calendar Q3, and we expect that to be approved and therefore go into place in our Q4 fiscal year, sorry, Q4 of this fiscal year.

I’m sorry, that needs to be approved by [indiscernible] again?

[indiscernible] the South American [indiscernible] organization.

Gotcha. And so there’s supposed to be a 350 basis point impact on your margins there in Q3, and the expectation is, you go to a more normalized level that you were kind of running at before, is that how I should understand that?

Yes, assuming the tariff rates yet reviewed to the lower level at the end of fiscal third quarter, which should expect to go to more normal level in the fourth quarter.

Gotcha. And then if you could just talk a little bit more on the poly side, just what – first off, where is your PVA as far as a percentage of revenues? And then in terms of the Poly segment if you can just kind of talk a little bit more about the mix inside there, where you have more of your PVA stuff, which I would think would be showing stronger growth, you’re talking about the 10% to 15% versus your non-PVA and kind of give us some sort of additional color on the backbone, where your sales are concerned, would be helpful?

Overall, PVA sales growth during the quarter and during the first-half were in line with the 10% to 15% growth expectations that we have for that segment. We – we’re seeing the most significant PVA growth in the International segment, but we will continue to see PVA growth in the Domestic segment as well. Our PVA and into your question of PVA as a percentage of sales, we’re very much on track to have PVA roughly to around 40% of sales for this fiscal year.

And so, do you know what the differences in the growth rates on PVA versus international versus domestic?

The growth rates on PVA international versus – the growth rates on PVA in international are higher than the growth rates on PVA domestically. And a large reason for this is, as I mentioned in my prepared remarks, quite significant volume going from the Nylon segment to the International segment this quarter. So what that means is, that will really help the PVA growth rates in the International segment and adversely impact PVA growth rates in the Domestic segments, when you got a large amount of PVA moving from internationals to domestic. So that’s why we – we’re all going to see this higher growth in the international side than the domestic side that is influenced by this move. And that that move is really to customer specific supply chain requirement.

Okay, got it. And last question, I’ll jump back in the queue. On your Nylon segment, it sounds like continues to see some pretty significant headwinds there, and obviously, consumer preferences are changing. I’m just kind of wondering what your guys’ thoughts are on that particular business long-term, kind of sounds like that that business is a real flattish to maybe down for the next few years?

Yes, a couple of things on the Nylon business. There is the impact on the PVA move – of the PVA move to International that I did talk about. We do expect and as we look into the second-half of the year, we expect the significant declines that we’ve seen in nylon in the first-half to moderate. And we should not expect to see the 20% or declines that we saw in the first-half that should moderate in the second-half of the year. The Nylon segment continues to be a profitable segment for us that operates of a relatively small asset base, but we get a nice return from the Nylon segment. We are addressing the demand weakness on two fronts. One, we are focusing on managing our assets and cost control there. And two, continuing to work with our partners to develop specialty end uses for nylon. We’re working on that to try and support the Nylon business going forward.

Gotcha. Appreciate it. Thank you, guys.

Thank you.

Sure.

Our next question comes from Chris McGinnis with Sidoti & Company.

Good morning. Thanks for taking my questions and nice quarter.

Thank you, Chris.

Could we just, I guess, start with maybe the international operations and the growth there, and if you look at that, almost 57% growth, can you maybe help us out with what – how much was Brazil of that and how much was China?

Yes, hi, Chris. Chris, actually when we look at the growth for the International segment. We are seeing during the first-half of the year both Brazil and China growing at very similar growth rates. So you could expect just in China separate between the two variable some of the growth rates in those two areas during the first-half of the year.

All right. And I remember reading during the quarter, you talked about Vietnam, I think, even in your prepared remarks, a new relationship there. You’ve – I think, you’ve over the last few years expanded internationally the same way you went with China. Can you maybe just talk about some of the developments on that side of the business? How – can you maybe just give an update on Sri Lanka, the prospects for Vietnam, and just how quickly you think that they can ramp up here, I guess?

Chris, this is Tom. We continue to be excited about our International segments. Sri Lanka, we’re beginning to produce product there. We have a licensee in Vietnam now producing REPREVE product for us. We are evaluating our opportunities in that market, and we’re going sometime in the near future to decide exactly what the future holds for Unifi there. But in general terms, we can – we continue to be committed to the region and to our partners there in the region.

Okay. And just because obviously, there’s a lot of talk about trade agreements and stuff. Any worries just with the change in presidency that maybe impacts on the business model, or your thoughts, at least, what could happen going forward?

Well, I think in general anything that encourages domestic manufacturing is – and principal good for us. TPP although, we have negotiated the best deal that we thought we could negotiate for us. It will still going to have a negative impact long-term on our business, so but did give us a longer somewhat of a runway to make whatever adjustments we need to make to be able to compete more favorably in the global market. But in general, we think it has potential to be quite positive for us.

And then, yes, I guess just going off of that, have you seen any customers either talk more about bringing sales to you via the region, as it changed the conversation with the customer base at all?

Chris, I think, in general, I think people began talking about even before the current administration took office because of maybe some of the saber rattling beforehand. But it’s early to know exactly what the full benefit or facts are going to be. But we don’t see any short-term significant change happening.

Okay. And then adding just my last question just on the, the Board has been in place for a while now and pretty strong. And I just wonder, can you maybe just talk about the benefits of having such strong Board, and maybe the ideas for the company going forward in terms of maybe branding some of the REPREVE brand possibly, or maybe thoughts around that?

Well, obviously, we have a more diverse Board and more attuned to brands and consumer products and we’ve ever had before. I think everybody is getting your – getting very grounded now. And as we go forward, I think, we’ll see more positive effects around those areas. So it’s probably early to make any major statements. But we continue to discuss and they’re very supportive of everything we’re doing today in our business.

Great. Well, thank you and a nice quarter and good luck in Q3, which seems to be a little bit tougher.

Thank you, Chris.

Thanks, Chris.

Appreciate it.

And I might actually showing any further questions at this time. I would like to turn the call back over to our host.

Well, thanks, everyone, for joining us today, and we’ll talk to you later.

Ladies and gentlemen, this does conclude today’s presentation. You may now disconnect, and have a wonderful day.