Unifi Announces Developments In DuPont Arbitration

Unifi, Inc. today (October 7, 2002) announced that following the close of business on Friday,
October 4, 2002, in response to a Pre-Hearing Order of the Arbitration Panel, the Company received
information from E.I. DuPont De Nemours and Company (“DuPont”) concerning the damages alleged in
connection with the previously disclosed arbitration proceeding relating to their POY Manufacturing
Alliance (the “Alliance”). DuPont has now alleged damages from its previous breach of contract
claims and certain previously unasserted claims during the course of the Alliance from June 1, 2000
through September 30, 2002 of approximately $85 million.Of these damages, approximately $71 million
relate to DuPont’s contention that after creation of the Alliance, until and unless the Alliance
assets are running at full capacity, Unifi should buy all of its external POY needs from DuPont,
thus, taking business away from Unifi’s other third party POY suppliers. Unifi does not agree that
it was or is obligated to purchase these volumes of POY from DuPont. Had Unifi purchased these
volumes of POY from DuPont, the Company believes that the prices it would have paid DuPont for such
POY purchases would have been at or below the prices it actually paid to its other third party POY
suppliers.The remaining damages asserted by DuPont relate to an alleged approximately $8 million
issue regarding capacity utilization in the Alliance manufacturing facilities and approximately $6
million in interest.The Company continues to deny DuPont’s allegations concerning its arbitration
claims. Further, Unifi does not agree with DuPont’s asserted damage calculations applicable in the
event the Arbitration Panel were to find in DuPont’s favor in the arbitration. However, the Company
believes it appropriate to publicly disclose DuPont’s asserted damages as the same are materially
greater than the potential claims previously disclosed by the Company in its Form 10-K for the
fiscal year ended June 30, 2002, that was filed with the Securities and Exchange Commission
onSeptember 23, 2002. In its Form 10-K, the Company noted that based on DuPont’s claims made to the
date of filing the Form 10-K, DuPont’s claims could amount to approximately $23 million.The Company
continues to deny DuPont’s allegations and intends to vigorously defend against DuPont’s claims and
pursue its counterclaims. However, the outcomes of these claims and counterclaims are uncertain at
this time and any damages awarded to DuPont could be materially more or less than the amount
asserted. The arbitration hearing in this matter is currently scheduled to begin November 1, 2002.
The ultimate resolution of these matters could be material to Unifi’s financial position, results
of operations and cash flows.Copyright PR Newswire 2002