Gildan Activewear Inc. (GIL: TSX and NYSE) today announced results
for the fourth quarter and year ended January 3, 2021.
“Our Back to Basics strategy put us on a sound footing going
into the pandemic and the additional actions we have taken during
2020 have enhanced our competitive positioning as we work towards a
stronger environment, growth, and achieving our long-term
profitability targets" said Glenn J. Chamandy, President and CEO of
Gildan. “Further, against the backdrop of the pandemic and the
headwind of back to back hurricanes in Central America our team
showed exceptional operational execution and delivered strong
results for the fourth quarter.”
In the fourth quarter, we reported GAAP diluted EPS of $0.34 and
adjusted diluted EPS of $0.45 before reflecting net charges of
approximately $23 million primarily related to our SKU
rationalization initiative. We generated $690 million in sales, a
strong recovery from the third quarter and up 5% compared to the
prior year. Adjusted gross margin1 of 25.8% in the quarter exceeded
prior year levels and reflected a 330 basis point improvement from
the third quarter this year. Selling, general and administrative
expenses (SG&A) were down 6% bringing SG&A as a percentage
of sales to 10.4%, a 120 basis point improvement over the prior
year. Consequently, we reported adjusted operating margin of 15.3%,
up from 14.1% a year ago. We reduced inventories over the prior
year and generated fourth quarter record free cash flow of $278
million bringing our full year total to $358 million. At the end of
the fourth quarter our available liquidity position was $1.56
billion with net debt1 totaling $577 million, down from $862
million a year ago.
Despite these strong results, the quarter had its challenges.
Starting early November, two back to back hurricanes hit Central
America and we suspended production temporarily at our Rio Nance
complex and at other locations in Honduras and Nicaragua. The
hurricanes caused equipment, inventory and other damages, and
facilities in certain locations were closed through November and
part of December before we started to reopen and ramp back
production. As we managed through this disruption, we continued to
service our customers during the fourth quarter from existing
inventories, production from other regions, and production earlier
in the quarter in Central America.
In the wake of the destruction caused by the hurricanes, we
immediately put our teams on the ground to help employees and
community members recover and rebuild, donating clothing,
protective masks, emergency kits, and assisting in finding shelter
for those displaced from their homes. “I am extremely proud of the
efforts of our manufacturing team who rose to meet additional
challenges in the midst of the ongoing pandemic, tending to
humanitarian needs to support these communities and restoring
production at our facilities,” said Glenn Chamandy. “While
responsibility and sustainability has always been at the core of
how we do business, 2020 has amplified the importance of strong
environmental, social, governance (ESG) practices as an integral
part of our strategy. To this end, we were pleased that for the
eighth year running we were included in the Dow Jones
Sustainability Index in 2020, we were recognized as a top performer
on CDP’s 2020 Climate Change Report and more recently, we received
the Silver Class distinction in The Sustainability Yearbook
2021.”
Fourth Quarter ResultsNet sales for the fourth
quarter ending January 3, 2021, of $690.2 million were up 4.8%
compared to the fourth quarter of 2019, consisting of activewear
sales of $537.9 million, up 11.3%, and sales of
$152.3 million in the hosiery and underwear category, down
13.0% compared to the prior year quarter. Increased activewear
sales reflected favourable imprintables product-mix, higher
imprintables volume growth in North America and higher unit sales
of activewear through retail channels, partly offset by lower
international shipments. Imprintables volume growth in North
America was primarily due to the benefit of the non-recurrence of
distributor de-stocking that occurred in the fourth quarter last
year, partly offset by a decline in POS due to the current
COVID-related demand environment which also affected international
markets. While imprintables POS in North America was down compared
to last year, we were pleased to see sequential improvement in
sell-through trends, with POS in the quarter down on average less
than 10% year-over-year, better than the 15% to 20% POS decline we
saw in the third quarter this year. The decline in hosiery and
underwear sales was driven entirely by lower sales of socks, a
category that has been more heavily impacted by the current
pandemic environment, particularly within national chains and
department stores, as well as sports specialty channels. Underwear
sales were up 20% in the quarter, significantly outpacing industry
demand and reflecting continued market share gains with our private
label men’s underwear program, as well as with our own branded
underwear products.
Our reported gross margin in the fourth quarter was 22.5%
compared to gross margin of 17.9% in the fourth quarter of 2019.
Before reflecting inventory charges largely in connection with our
SKU rationalization initiative in both years and a net insurance
gain recognized in the fourth quarter of 2020, adjusted gross
margin totaled 25.8%, up 20 basis points compared to adjusted gross
margin of 25.6% last year. The year-over-year increase was mainly
due to stronger imprintables product-mix, lower raw material costs,
and manufacturing efficiencies from our Back to Basics initiatives,
partly offset by lower net selling prices and COVID-related and
other period costs. On a sequential basis, adjusted gross margin
improved significantly, up 330 basis points compared to the third
quarter of 2020 largely due to stronger product-mix and lower
COVID-related period costs.
During the fourth quarter, as part of our Back to Basics
efforts, we conducted a comprehensive retail SKU rationalization
review and consequently incurred an inventory charge of
$26.0 million. We also recorded a charge of approximately
$6.2 million related to the discontinuance of personal
protective equipment (PPE) SKUs. Further, a net gain of $9.6
million in the quarter was recorded for insurance recoveries
accrued to date net of costs incurred due to the impact of the
hurricanes on our business operations. Overall, these net pre-tax
charges totaling $22.6 million were excluded from our adjusted
financial measures.
SG&A expenses for the fourth quarter of $71.9 million, or
10.4% of sales, were down $4.6 million, or 6% compared to $76.5
million, or 11.6% of sales, for the same quarter in 2019. The
year-over-year reduction primarily reflected benefits of our cost
containment efforts.
Operating income of $78.8 million in the fourth quarter was up
from $24.3 million last year. On an adjusted basis, we generated
adjusted operating income1 of $105.7 million, up from $95.3 million
last year. The increase was due to higher sales, higher adjusted
gross margin and lower SG&A expenses. Net financial expenses of
$13.1 million were up $3.6 million over the prior year quarter,
mainly due to fees incurred in connection with the amendments made
to our long-term debt facilities earlier this year and the impact
of foreign exchange. Consequently, we reported net earnings of
$67.4 million, or $0.34 per diluted share, for the fourth quarter
of 2020 and adjusted net earnings1 of $90.0 million, or $0.45 per
diluted share, compared to net earnings of $32.5 million, or $0.16
per diluted share, and adjusted net earnings of $83.4 million,
or $0.41 per diluted share, respectively, in the fourth quarter
last year.
We generated record free cash flow in the quarter totaling $278
million, up from $241 million last year. The improvement in free
cash flow was driven primarily by a significant reduction in our
inventories and lower capital expenditures. Inventories at the end
of the quarter totaled $728 million versus $939 million at the end
of the third quarter of 2020 and $1,052 million at the end of 2019.
The Company spent $13.4 million in capital expenditures in the
quarter, down from $21.3 million last year, primarily for
maintenance purposes. At the end of the fourth quarter, the Company
had net debt of $577 million, down from $862 million at the end of
2019, and available liquidity of $1.56 billion. The Company’s
reported net debt leverage ratio1 was 3.5 times adjusted EBITDA1.
After reflecting debt covenant adjustments which exclude the impact
of the second quarter of 2020 the Company's net debt leverage ratio
was 1.3 times adjusted EBITDA.
Full Year ResultsNet sales for 2020 totaled
$1,981.3 million, down 29.8% from the prior year, reflecting
declines of 33.8% in activewear and 14.1% in the hosiery and
underwear category. The overall sales decline in 2020 was largely
volume-driven as a result of the significant adverse impact that
the global COVID-19 pandemic has had on economic activity
worldwide. The decrease in activewear sales where we generated
sales of $1,498.4 million was mainly attributable to lower
unit sales due to the demand downturn combined with the impact of
distributor inventory de-stocking in imprintables, unfavourable
product-mix, and the impact of more aggressive pricing action taken
in imprintables during the year primarily through promotional
discounting. The overall sales decline in the hosiery and underwear
category where we generated $482.9 million in sales in 2020
also reflected the COVID-related impact on demand in retail
channels of distribution, specifically lower demand in socks,
partly offset by a 27.7% increase in underwear sales primarily
driven by strong growth of private brands men’s underwear
products.
Gross profit totaled $249.1 million and adjusted gross profit1
was $305.7 million compared to $704.5 million and $759.5 million,
respectively, in 2019. The main factors driving the significant
year-over-year decline in adjusted gross profit, most of which were
triggered by the COVID-19 pandemic, were lower unit sales volumes,
unabsorbed fixed manufacturing costs while capacity was idle,
inventory provisions, as well as the impact of exiting excess
commodity derivative hedges and cotton commitments. The adjusted
gross profit decline also reflected unfavourable product-mix and
higher promotional discounting in the imprintables channel. These
factors were partly offset by lower raw material costs compared to
the prior year.
SG&A expenses of $272.3 million in 2020 were down $68.2
million compared to 2019 primarily as a result of lower
compensation and volume-driven distribution costs, as well as the
benefit of other cost containment efforts. Impairment of trade
accounts receivable of $15.5 million was down $12.2 million from
2019 due primarily to the non-recurrence of a loss related to a
distributor receivership in 2019, partly offset by an increase in
the estimate of expected credit losses due to the heightened credit
risk caused by the pandemic. Restructuring and acquisition-related
costs of $48.2 million in 2020 were incurred primarily in
connection with Back to Basics strategic initiatives, including the
consolidation of manufacturing operations and other manufacturing
optimization initiatives. This compared to restructuring and
acquisition-related costs of $47.3 million in 2019. An impairment
of goodwill and intangible assets acquired during previous sock and
hosiery business acquisitions of $94.0 million was recorded in the
first quarter of 2020 due to the adverse impacts of the COVID-19
pandemic on global economic activity and enterprise values of
companies worldwide, including its impact on the Company’s business
and share price.
After reflecting the above expenses and charges, we incurred an
operating loss of $180.8 million in 2020 compared to operating
income of $289.0 million in 2019. Excluding restructuring and
acquisition-related costs, charges related to rationalized product
SKUs, the net insurance gain in 2020, and the impairment for
goodwill and intangible assets, adjusted operating income in 2020
amounted to $18.0 million compared to adjusted operating income of
$391.3 million last year. The decrease reflected the lower sales
base and the significant operating margin decline which led to a
reported net loss in 2020 of $225.3 million, or $1.14 per share on
a diluted basis, and an adjusted loss1 of $36.3 million, or $0.18
per diluted share.
Current Market EnvironmentGiven the ongoing
impact of COVID-19, we are not providing financial guidance for
2021. Nonetheless, the following reflects what we are currently
seeing in the market and some of our expectations. Imprintables POS
is currently tracking slightly weaker than during the fourth
quarter, down 10% to 15% in the U.S. and international markets
compared to 2019 levels, due to the impact of renewed winter
lockdowns in many jurisdictions. In retail, we continue to see
year-over-year growth in our activewear and underwear sales,
however, sales in the sock category continue to be down
year-over-year. Consequently, while we expect higher overall sales
in 2021 compared to 2020, we remain cautious with our expectations
for 2021 given the evolution of the COVID-19 pandemic and ongoing
restrictions on social gatherings. Despite this
uncertainty, we continue to be pleased with the
progress we have made driving our Back to Basics strategy which we
believe will continue to strengthen our financial and operating
flexibility and support our margins as we continue to drive towards
our long-term targets.
The Company expects to resume investments in 2021 with projected
capital expenditures running in the range of 4% of sales, including
the continuation of our major capacity expansion project in
Bangladesh. Further, we are targeting to generate positive free
cash flow in 2021. While we are currently
well-positioned from a liquidity and free cash flow generating
perspective, before resuming capital return to shareholders through
the payment of dividends and share repurchase programs, the
Company's priority remains to position its external net debt
leverage ratio within its historical target range of one to two
times net debt to adjusted trailing twelve months EBITDA. As such,
once we achieve this level we expect that our Board will review
capital return policies. Finally, the Company continues to assess
the full impact of the hurricanes on its business operations and
expects to recognize additional insurance recoveries in fiscal
2021. All future insurance recoveries, net of related costs and
charges, will be excluded from the Company’s adjusted financial
measures.
Organizational AnnouncementsEarlier this
quarter, Mike Hoffman, President, Sales, Marketing and Distribution
announced that effective February 28, 2021, he will be
retiring from Gildan. Mike has played a significant role in
Gildan’s growth and success over the last 20 years developing and
growing our sales, marketing and distribution activities out of
Barbados as we built a global, industry leading market position in
imprintables. Mike also assumed responsibility for all similar
retail related activities with the initiation of our Back to Basics
strategy. “Mike has been a key member of the Gildan executive team
and I thank Mike for the many important contributions he has made
over the years. On behalf of everyone at Gildan, we wish Mike all
the best for the future” said Glenn Chamandy. With Mike Hoffman’s
retirement and in line with the succession plan the Company had in
place, effective March 1, 2021, Chuck Ward will assume the role of
President, Sales, Marketing and Distribution, based in Barbados.
“With significant experience across diverse apparel industry roles,
most recently leading our overall North American Sales, Marketing
and Distribution activities as SVP, North America, Chuck is well
positioned to assume this key leadership role” said Glenn Chamandy.
In parallel with these changes, Arun Bajaj has also been elevated
to Executive Vice President, Chief Human Resources Officer. Arun
has extensive global human resources experience and joined Gildan
16 months ago to support both Gildan’s Back to Basics focus and
long-term growth strategy.
Disclosure of Outstanding Share Data As at
February 19, 2021, there were 198,422,935 common shares issued
and outstanding along with 3,519,127 stock options and 38,540
dilutive restricted share units (Treasury RSUs) outstanding. Each
stock option entitles the holder to purchase one common share at
the end of the vesting period at a pre-determined option price.
Each Treasury RSU entitles the holder to receive one common share
from treasury at the end of the vesting period, without any
monetary consideration being paid to the Company.
Conference Call InformationGildan Activewear
Inc. will hold a conference call to discuss fourth quarter and full
year 2020 results and its business outlook today at 8:30 AM ET. A
live audio webcast of the conference call, as well as a replay,
will be available on Gildan's corporate website or on the following
link: http://www.gildancorp.com/events. The conference call can be
accessed by dialing toll-free (877) 282-2924 (Canada & U.S.) or
(470) 495-9480 (international) and entering passcode 5988977#. A
replay will be available for 7 days starting at 11:30 AM ET by
dialing toll-free (855) 859-2056 (Canada & U.S.) or (404)
537-3406 (international) and entering the same passcode.
NotesThis release should be read in conjunction
with the attached unaudited condensed financial statements as at
and for the three and twelve months ended January 3, 2021.
Gildan’s Management’s Discussion and Analysis and its audited
consolidated financial statements for the fiscal year ended
January 3, 2021 are expected to be filed by Gildan with the
Canadian securities regulatory authorities and with the U.S.
Securities and Exchange Commission on or before February 26, 2021,
and will also be provided on Gildan's website at that time.
Certain minor rounding variances may exist between the condensed
consolidated financial statements and the table summaries contained
in this press release.
Supplemental Financial Data |
|
|
|
|
|
|
|
CONSOLIDATED FINANCIAL DATA (UNAUDITED) |
|
|
|
|
|
|
|
|
Three months ended |
Twelve months ended |
(in $ millions, except per share amounts or otherwise
indicated) |
January 3, 2021 |
December 29,2019 |
Variation (%) |
January 3,2021 |
December 29,2019 |
Variation (%) |
Net sales |
690.2 |
658.7 |
4.8% |
1,981.3 |
2,823.9 |
(29.8)% |
Gross profit |
155.5 |
118.2 |
31.6% |
249.1 |
704.5 |
(64.6)% |
Adjusted gross profit(1) |
178.1 |
173.2 |
2.8% |
305.7 |
759.5 |
(59.7)% |
SG&A expenses |
71.9 |
76.5 |
(6.0)% |
272.3 |
340.5 |
(20.0)% |
Impairment of trade accounts
receivable |
0.5 |
1.4 |
(64.3)% |
15.5 |
27.7 |
(44.0)% |
Restructuring and
acquisition-related costs |
4.3 |
16.0 |
(73.1)% |
48.2 |
47.3 |
1.9% |
Impairment of goodwill and
intangible assets |
— |
— |
n.m. |
94.0 |
— |
n.m. |
Operating income (loss) |
78.8 |
24.3 |
n.m. |
(180.8) |
289.0 |
n.m. |
Adjusted operating
income(1) |
105.7 |
95.3 |
10.9% |
18.0 |
391.3 |
(95.4)% |
Adjusted EBITDA(1) |
145.3 |
128.2 |
13.3% |
165.1 |
548.1 |
(69.9)% |
Financial expenses |
13.1 |
9.5 |
37.9% |
48.5 |
39.2 |
23.7% |
Income tax recovery |
(1.7) |
(17.8) |
(90.4)% |
(4.1) |
(10.0) |
(59.0)% |
Net earnings (loss) |
67.4 |
32.5 |
n.m. |
(225.3) |
259.8 |
n.m. |
Adjusted net earnings (loss)(1) |
90.0 |
83.4 |
7.9% |
(36.3) |
339.6 |
n.m. |
Basic EPS |
0.34 |
0.16 |
n.m. |
(1.14) |
1.27 |
n.m. |
Diluted EPS |
0.34 |
0.16 |
n.m. |
(1.14) |
1.27 |
n.m. |
Adjusted diluted EPS(1) |
0.45 |
0.41 |
9.8% |
(0.18) |
1.66 |
n.m. |
Gross margin |
22.5 % |
17.9% |
4.6 pp |
12.6 % |
24.9% |
(12.3) pp |
Adjusted gross margin(1) |
25.8 % |
25.6% |
0.2 pp |
15.3 % |
26.7% |
(11.4) pp |
SG&A
expenses as a percentage of sales |
10.4 % |
11.6% |
(1.2) pp |
13.7 % |
12.1% |
1.6 pp |
Operating margin |
11.4 % |
3.7% |
7.7 pp |
(9.1)% |
10.2% |
(19.3) pp |
Adjusted operating margin(1) |
15.3 % |
14.1% |
1.2 pp |
0.9 % |
13.8% |
(12.9) pp |
Cash flows from operating activities |
291.6 |
262.4 |
11.1% |
415.0 |
361.0 |
15.0% |
Capital expenditures |
13.4 |
21.3 |
(37.1)% |
58.3 |
140.2 |
(58.4)% |
Free cash flow(1) |
278.2 |
241.0 |
15.4% |
357.5 |
226.5 |
57.8% |
Diluted
weighted average number of common shares outstanding (in
‘000s) |
198,403 |
201,593 |
n.m. |
198,361 |
204,609 |
n.m. |
|
|
|
|
|
|
|
As at (in $ millions, or otherwise indicated) |
|
|
|
|
January 3, 2021 |
December 29, 2019 |
Inventories |
|
|
|
|
728.0 |
1,052.1 |
Trade accounts receivable |
|
|
|
|
196.5 |
320.9 |
Net indebtedness(1) |
|
|
|
|
577.2 |
862.4 |
Net
debt leverage ratio(1) |
|
|
|
|
3.5 |
1.6 |
(1) Please refer
to "Non-GAAP Financial Measures" in this press release. |
n.m. = not
meaningful |
DISAGGREGATION OF REVENUE
Net sales by major product group were as follows:
(in $ millions, or otherwise indicated) |
Q4 2020 |
Q4 2019 |
Variation (%) |
YTD 2020 |
YTD 2019 |
Variation (%) |
Activewear |
537.9 |
483.5 |
11.3% |
1,498.4 |
2,261.9 |
(33.8)% |
Hosiery
and underwear |
152.3 |
175.1 |
(13.0)% |
482.9 |
562.0 |
(14.1)% |
|
690.2 |
658.6 |
4.8% |
1,981.3 |
2,823.9 |
(29.8)% |
|
|
|
|
|
|
|
Net sales were derived from customers located in the following
geographic areas:
(in $ millions, or otherwise indicated) |
Q4 2020 |
Q4 2019 |
Variation (%) |
YTD 2020 |
YTD 2019 |
Variation (%) |
United States |
604.7 |
552.0 |
9.5% |
1,696.9 |
2,399.2 |
(29.3)% |
Canada |
25.9 |
34.6 |
(25.1)% |
76.2 |
114.8 |
(33.6)% |
International |
59.6 |
72.0 |
(17.2)% |
208.2 |
309.9 |
(32.8)% |
|
690.2 |
658.6 |
4.8% |
1,981.3 |
2,823.9 |
(29.8)% |
Non-GAAP Financial MeasuresThis press release
includes references to certain non-GAAP financial measures as
described below. These non-GAAP measures do not have any
standardized meanings prescribed by International Financial
Reporting Standards (IFRS) and are therefore unlikely to be
comparable to similar measures presented by other companies.
Accordingly, they should not be considered in isolation. The terms
and definitions of the non-GAAP measures used in this press release
and a reconciliation of each non-GAAP measure to the most directly
comparable IFRS measure are provided below.
Adjusted net earnings and adjusted diluted
EPSAdjusted net earnings are calculated as net earnings before
restructuring and acquisition-related costs, income taxes relating
to restructuring and acquisition-related actions, income taxes
related to the re-assessment of the probability of realization of
previously recognized or de-recognized deferred income tax assets,
and income taxes relating to the revaluation of deferred income tax
assets and liabilities as a result of statutory income tax rate
changes in the countries in which we operate. Adjusted net earnings
also excludes impairment of goodwill and intangible assets, net
insurance gains related to the two hurricanes which impacted the
Company’s operations in Central America, the discontinuance of PPE
SKUs, the impact of the Company's strategic initiative to
significantly reduce its retail product line SKU count which the
Company began implementing in the fourth quarter of fiscal 2020,
and the impact of adjustments related to the Company’s decision in
the fourth quarter of fiscal 2019 to implement a strategic
initiative to significantly reduce its imprintables product line
SKU count, by exiting all ship to-the-piece activities and
discontinuing overlapping and less productive styles and SKUs
between brands. These product line initiatives are aimed at
simplifying the Company's product portfolio and reducing complexity
in its manufacturing and warehouse distribution activities. The
impact of the strategic initiatives includes inventory write-downs
and a sales return allowance for anticipated product returns
related to discontinued SKUs. Adjusted diluted EPS is calculated as
adjusted net earnings divided by the diluted weighted average
number of common shares outstanding. The Company uses adjusted net
earnings and adjusted diluted EPS to measure its performance from
one period to the next, without the variation caused by the impacts
of the items described above. The Company excludes these items
because they affect the comparability of its financial results and
could potentially distort the analysis of trends in its business
performance. Excluding these items does not imply they are
necessarily non-recurring.
|
Three months ended |
Twelve months ended |
(in
$ millions, except per share amounts) |
January 3, 2021 |
December 29, 2019 |
January 3, 2021 |
December 29, 2019 |
|
|
|
|
|
|
|
|
|
Net earnings (loss) |
67.4 |
|
32.5 |
|
(225.3 |
) |
259.8 |
|
Adjustments for: |
|
|
|
|
|
|
|
|
Restructuring and acquisition-related costs |
4.3 |
|
16.0 |
|
48.2 |
|
47.3 |
|
Impairment of goodwill and intangible assets |
— |
|
— |
|
94.0 |
|
— |
|
Impact of strategic product line initiatives(1) |
26.0 |
|
55.0 |
|
60.0 |
|
55.0 |
|
Discontinuance of PPE SKUs(2) |
6.2 |
|
— |
|
6.2 |
|
— |
|
Net insurance gains(3) |
(9.6 |
) |
— |
|
(9.6 |
) |
— |
|
Income tax expense (recovery) relating to the above-noted
adjustments |
0.9 |
|
(0.9 |
) |
(4.6 |
) |
(3.3 |
) |
Income tax recovery related to the revaluation of deferred income
tax assets and liabilities(4) |
(5.2 |
) |
(19.2 |
) |
(5.2 |
) |
(19.2 |
) |
Adjusted net earnings (loss) |
90.0 |
|
83.4 |
|
(36.3 |
) |
339.6 |
|
Basic EPS |
0.34 |
|
0.16 |
|
(1.14 |
) |
1.27 |
|
Diluted EPS |
0.34 |
|
0.16 |
|
(1.14 |
) |
1.27 |
|
Adjusted diluted EPS |
0.45 |
|
0.41 |
|
(0.18 |
) |
1.66 |
|
(1) Includes $29.2 million (2019 - $47.6
million) of inventory write-downs included in cost of sales and the
$4.8 million (2019 - $7.4 million) gross profit impact of a sales
return allowance for anticipated product returns, related to
imprintables discontinued SKUs which reduced net sales by $11.2
million and cost of sales by $6.4 million (2019 - reduced net sales
by $19.0 million and cost of sales by $11.6 million), and $26.0
million of inventory write-downs included in cost of sales related
to retail discontinued SKUs, as part of the Company's strategic
product line initiatives.(2) During fiscal 2020, in collaboration
with various government and customer efforts to help address
shortages due to the COVID-19 pandemic, the Company temporarily
leveraged its manufacturing capabilities to produce PPE products.
This charge (included in cost of sales) reflects the discontinuance
of these PPE SKUs given that they are not in the Company’s normal
product line and that these shortages have now been addressed.(3)
Net insurance gains are related to the two hurricanes which
impacted the Company’s operations in Central America in November
2020, consisting of the following costs which were more than offset
by related accrued insurance recoveries to date: losses on disposal
of unrepairable equipment and damaged inventory equal to their net
book value, salary and benefits continuation for idle employees
while production was interrupted, equipment repair and clean-up
costs, and unabsorbed salary, benefits, and overhead costs, that
resulted from the related production interruptions.(4) Includes an
income tax recovery of $5.2 million (2019 - $19.2 million) pursuant
to the recognition of previously de-recognized (in fiscal 2018 and
fiscal 2017 pursuant to the organizational realignment plan)
deferred income tax assets as a result of a re-assessment of the
probability of realization of such deferred income tax assets.
Adjusted gross profit and adjusted gross
marginAdjusted gross profit is calculated as gross profit excluding
the impact of net insurance gains related to the two hurricanes
which impacted the Company’s operations in Central America, the
discontinuance of PPE SKUs, the impact of the Company's strategic
initiative to significantly reduce its retail product line SKU
count which the Company began implementing in the fourth quarter of
fiscal 2020, and the impact of adjustments related to the Company’s
decision in the fourth quarter of fiscal 2019 to implement a
strategic initiative to significantly reduce its imprintables
product line SKU count, by exiting all ship to-the-piece activities
and discontinuing overlapping and less productive styles and SKUs
between brands. These product line initiatives are aimed at
simplifying the Company's product portfolio and reducing complexity
in its manufacturing and warehouse distribution activities. The
impact of the strategic initiatives includes inventory write-downs
and a sales return allowance for anticipated product returns
related to discontinued SKUs. Adjusted gross margin is calculated
as adjusted gross profit divided by net sales excluding the sales
return allowance for anticipated product
returns related to discontinued SKUs. The Company uses
adjusted gross profit and adjusted gross margin to measure its
performance from one period to the next, without the variation
caused by the impacts of the items described above. The Company
excludes these items because they affect the comparability of its
financial results and could potentially distort the analysis of
trends in its business performance. Excluding these items does not
imply they are necessarily non-recurring.
|
Three months ended |
Twelve months ended |
(in $
millions, or otherwise indicated) |
January 3, 2021 |
December 29, 2019 |
January 3, 2021 |
December 29, 2019 |
|
|
|
|
|
|
|
|
|
Gross profit |
155.5 |
|
118.2 |
|
249.1 |
|
704.5 |
|
Adjustment for: |
|
|
|
|
|
|
|
|
Impact of strategic product line initiatives(1) |
26.0 |
|
55.0 |
|
60.0 |
|
55.0 |
|
Discontinuance of PPE SKUs(1) |
6.2 |
|
— |
|
6.2 |
|
— |
|
Net insurance gains(1) |
(9.6 |
) |
— |
|
(9.6 |
) |
— |
|
Adjusted gross profit |
178.1 |
|
173.2 |
|
305.7 |
|
759.5 |
|
|
|
|
|
|
|
|
|
|
Gross margin |
22.5 |
% |
17.9 |
% |
12.6 |
% |
24.9 |
% |
Adjusted gross margin(2) |
25.8 |
% |
25.6 |
% |
15.3 |
% |
26.7 |
% |
(1) See footnotes to table "Adjusted net
earnings and adjusted diluted EPS" in this press release.(2)
Calculated as adjusted gross profit divided by net sales excluding
the sales return allowance for anticipated product returns related
to discontinued SKUs.
Adjusted operating income and adjusted operating marginAdjusted
operating income is calculated as operating income before
restructuring and acquisition-related costs. Adjusted operating
income also excludes impairment of goodwill and intangible assets,
net insurance gains related to the two hurricanes which impacted
the Company’s operations in Central America, the discontinuance of
PPE SKUs, the impact of the Company's strategic initiative to
significantly reduce its retail product line SKU count which the
Company began implementing in the fourth quarter of fiscal 2020,
and the impact of adjustments related to the Company’s decision in
the fourth quarter of fiscal 2019 to implement a strategic
initiative to significantly reduce its imprintables product line
SKU count, by exiting all ship to-the-piece activities and
discontinuing overlapping and less productive styles and SKUs
between brands. These product line initiatives are aimed at
simplifying the Company's product portfolio and reducing complexity
in its manufacturing and warehouse distribution activities. The
impact of the strategic initiatives includes inventory write-downs
and a sales return allowance for anticipated product returns
related to discontinued SKUs. Adjusted operating margin is
calculated as adjusted operating income divided by net sales
excluding the sales return allowance for
anticipated product returns related to discontinued
SKUs. Management uses adjusted operating income and adjusted
operating margin to measure its performance from one period to the
next, without the variation caused by the impacts of the items
described above. The Company excludes these items because they
affect the comparability of its financial results and could
potentially distort the analysis of trends in its business
performance. Excluding these items does not imply they are
necessarily non-recurring.
|
Three months ended |
Twelve months ended |
(in $
millions, or otherwise indicated) |
January 3, 2021 |
December 29, 2019 |
January 3, 2021 |
December 29, 2019 |
|
|
|
|
|
|
|
|
|
Operating income (loss) |
78.8 |
|
24.3 |
|
(180.8 |
) |
289.0 |
|
Adjustment for: |
|
|
|
|
|
|
|
|
Restructuring and acquisition-related costs |
4.3 |
|
16.0 |
|
48.2 |
|
47.3 |
|
Impairment of goodwill and intangible assets |
— |
|
— |
|
94.0 |
|
— |
|
Impact of strategic product line initiatives(1) |
26.0 |
|
55.0 |
|
60.0 |
|
55.0 |
|
Discontinuance of PPE SKUs(1) |
6.2 |
|
— |
|
6.2 |
|
— |
|
Net insurance gains(1) |
(9.6 |
) |
— |
|
(9.6 |
) |
— |
|
Adjusted operating income |
105.7 |
|
95.3 |
|
18.0 |
|
391.3 |
|
|
|
|
|
|
|
|
|
|
Operating margin |
11.4 |
% |
3.7 |
% |
(9.1 |
)% |
10.2 |
% |
Adjusted operating margin(2) |
15.3 |
% |
14.1 |
% |
0.9 |
% |
13.8 |
% |
(1) See footnotes to table "Adjusted net
earnings and adjusted diluted EPS" in this press release.(2)
Calculated as adjusted operating income divided by net sales
excluding the sales return allowance for
anticipated product returns related to discontinued
SKUs.
Adjusted EBITDAAdjusted EBITDA is calculated as
earnings before financial expenses, income taxes, and depreciation
and amortization, and excludes the impact of restructuring and
acquisition-related costs. Adjusted EBITDA also excludes impairment
of goodwill and intangible assets, net insurance gains related to
the two hurricanes which impacted the Company’s operations in
Central America, the discontinuance of PPE SKUs, the impact of the
Company's strategic initiative to significantly reduce its retail
product line SKU count which the Company began implementing in the
fourth quarter of fiscal 2020, and the impact of adjustments
related to the Company’s decision in the fourth quarter of fiscal
2019 to implement a strategic initiative to significantly reduce
its imprintables product line SKU count, by exiting all ship
to-the-piece activities and discontinuing overlapping and less
productive styles and SKUs between brands. These product line
initiatives are aimed at simplifying the Company's product
portfolio and reducing complexity in its manufacturing and
warehouse distribution activities. The impact of the strategic
initiatives includes inventory write-downs and a sales return
allowance for anticipated product returns related to discontinued
SKUs. The Company uses adjusted EBITDA, among other measures,
to assess the operating performance of its business. The Company
also believes this measure is commonly used by investors and
analysts to measure a company’s ability to service debt and to meet
other payment obligations, or as a common valuation measurement.
The Company excludes depreciation and amortization expenses, which
are non-cash in nature and can vary significantly depending upon
accounting methods or non-operating factors. Excluding these items
does not imply they are necessarily non-recurring.
|
Three months ended |
Twelve months ended |
(in $
millions) |
January 3, 2021 |
December 29, 2019 |
January 3, 2021 |
December 29, 2019 |
|
|
|
|
|
|
|
|
|
Net earnings (loss) |
67.4 |
|
32.5 |
|
(225.3 |
) |
259.8 |
|
Restructuring and
acquisition-related costs |
4.3 |
|
16.0 |
|
48.2 |
|
47.3 |
|
Impairment of goodwill and
intangible assets |
— |
|
— |
|
94.0 |
|
— |
|
Impact of strategic product
line initiative(1) |
26.0 |
|
55.0 |
|
60.0 |
|
55.0 |
|
Discontinuance of PPE
SKUs(1) |
6.2 |
|
— |
|
6.2 |
|
— |
|
Net insurance gains(1) |
(9.6 |
) |
— |
|
(9.6 |
) |
— |
|
Depreciation and
amortization |
39.6 |
|
33.0 |
|
147.2 |
|
156.8 |
|
Financial expenses, net |
13.1 |
|
9.5 |
|
48.5 |
|
39.2 |
|
Income
tax recovery |
(1.7 |
) |
(17.8 |
) |
(4.1 |
) |
(10.0 |
) |
Adjusted EBITDA |
145.3 |
|
128.2 |
|
165.1 |
|
548.1 |
|
(1) See footnotes to table "Adjusted net
earnings and adjusted diluted EPS" in this press release.
Free cash flow Free cash flow is defined as cash
from operating activities, less cash flow used in investing
activities excluding business acquisitions. The Company considers
free cash flow to be an important indicator of the financial
strength and liquidity of its business, and it is a key metric
which indicates how much cash is available after capital
expenditures to repay debt, to pursue business acquisitions, and/or
to redistribute to its shareholders. The Company believes this
measure is commonly used by investors and analysts when valuing a
business and its underlying assets.
|
Three months ended |
Twelve months ended |
(in
$ millions) |
January 3, 2021 |
December 29, 2019 |
January 3, 2021 |
December 29, 2019 |
|
|
|
|
|
|
|
|
|
Cash flows from operating
activities |
291.6 |
|
262.4 |
|
415.0 |
|
361.0 |
|
Cash flows used in investing
activities |
(13.4 |
) |
(21.4 |
) |
(57.5 |
) |
(135.8 |
) |
Adjustment for: |
|
|
|
|
|
|
|
|
Business acquisitions |
— |
|
— |
|
— |
|
1.3 |
|
Free
cash flow |
278.2 |
|
241.0 |
|
357.5 |
|
226.5 |
|
Total indebtedness and net indebtednessTotal
indebtedness is defined as the total bank indebtedness, long-term
debt (including any current portion), and lease obligations
(including any current portion), and net indebtedness is calculated
as total indebtedness net of cash and cash equivalents. The Company
considers total indebtedness and net indebtedness to be important
indicators of the financial leverage of the Company.
(in $ millions) |
January 3, 2021 |
December 29, 2019 |
|
|
|
Long-term debt and total bank indebtedness |
1,000.0 |
|
845.0 |
|
Lease
obligations |
82.5 |
|
81.5 |
|
Total indebtedness |
1,082.5 |
|
926.5 |
|
Cash
and cash equivalents |
(505.3 |
) |
(64.1 |
) |
Net
indebtedness |
577.2 |
|
862.4 |
|
Net debt leverage ratioThe net debt leverage ratio
is defined as the ratio of net indebtedness to pro-forma adjusted
EBITDA for the trailing twelve months. The pro-forma adjusted
EBITDA for the trailing twelve months reflects business
acquisitions made during the period, as if they had occurred at the
beginning of the trailing twelve month period. The Company has set
a fiscal year-end net debt leverage target ratio of one to two
times pro-forma adjusted EBITDA for the trailing twelve months. Due
to the current economic environment, the Company is above its
target range at the end of fiscal 2020. The Company uses and
believes that certain investors and analysts use the net debt
leverage ratio to measure the financial leverage of the
Company.
(in $ millions, or otherwise indicated) |
January 3, 2021 |
December 29, 2019 |
Adjusted EBITDA for the trailing twelve months |
165.1 |
|
548.1 |
|
Adjustment for: |
|
|
Business acquisitions |
— |
|
— |
|
Pro-forma adjusted EBITDA for the trailing twelve months |
165.1 |
|
548.1 |
|
|
|
|
Net indebtedness |
577.2 |
|
862.4 |
|
Net
debt leverage ratio(1) |
3.5 |
|
1.6 |
|
(1) The Company's net debt to EBITDA ratio for purposes of its
loan and note agreements was 1.3 at January 3, 2021.
Return on net assetsReturn on net assets (RONA) is
defined as the ratio of adjusted net earnings, excluding net
financial expenses and the amortization of intangible assets
(excluding software) net of income tax recoveries related thereto,
to average net assets for the last five quarters. Net assets are
defined as the sum of total assets, excluding cash and cash
equivalents, net deferred income taxes, and the accumulated
amortization of intangible assets (excluding software), less total
current liabilities excluding the current portion of lease
obligations. The Company uses RONA as a performance indicator to
measure the efficiency of its invested capital.
(in $ millions) |
January 3, 2021 |
December 29, 2019 |
Average total assets |
3,226.9 |
|
3,254.1 |
|
Average cash and cash
equivalents |
(354.7 |
) |
(59.6 |
) |
Average net deferred income
taxes |
(13.1 |
) |
(2.0 |
) |
Average accumulated amortization
of intangible assets, excluding software |
233.2 |
|
159.4 |
|
Average total current liabilities, excluding the current portion of
lease obligations |
(364.5 |
) |
(364.0 |
) |
Average net assets |
2,727.8 |
|
2,987.9 |
|
|
|
|
|
|
|
Twelve months ended |
(in $
millions, or otherwise indicated) |
January 3, 2021 |
December 29, 2019 |
Adjusted net earnings (loss) |
(36.3 |
) |
339.6 |
|
Financial expenses, net (nil
income taxes in both years) |
48.5 |
|
39.2 |
|
Amortization of intangible assets, excluding software (net of nil
income taxes in both years) |
14.3 |
|
17.3 |
|
Return |
26.5 |
|
396.1 |
|
RONA |
1.0 |
% |
13.3 |
% |
Caution Concerning Forward-Looking
StatementsCertain statements included in this press
release constitute “forward-looking statements” within the meaning
of the U.S. Private Securities Litigation Reform Act of 1995 and
Canadian securities legislation and regulations and are subject to
important risks, uncertainties, and assumptions. This
forward-looking information includes, amongst others, information
with respect to our objectives and the strategies to achieve these
objectives, as well as information with respect to our beliefs,
plans, expectations, anticipations, estimates, and intentions,
including, without limitation, our expectation with regards to net
sales, gross margin, SG&A expenses, restructuring and
acquisition-related costs, operating margin, adjusted operating
margin, adjusted EBITDA, diluted earnings per share, adjusted
diluted earnings per share, income tax rate, free cash flow, and
capital expenditures. Forward-looking statements generally can be
identified by the use of conditional or forward-looking terminology
such as “may”, “will”, “expect”, “intend”, “estimate”, “project”,
“assume”, “anticipate”, “plan”, “foresee”, “believe”, or
“continue”, or the negatives of these terms or variations of them
or similar terminology. We refer you to the Company’s filings with
the Canadian securities regulatory authorities and the U.S.
Securities and Exchange Commission, as well as the risks described
under the “Financial risk management”, “Critical accounting
estimates and judgments”, and “Risks and uncertainties” sections of
our most recent Management’s Discussion and Analysis for a
discussion of the various factors that may affect the Company’s
future results. Material factors and assumptions that were applied
in drawing a conclusion or making a forecast or projection are also
set out throughout such document and this press release.
Forward-looking information is inherently uncertain and the
results or events predicted in such forward-looking information may
differ materially from actual results or events. Material factors,
which could cause actual results or events to differ materially
from a conclusion, forecast, or projection in such forward-looking
information, include, but are not limited to:
- the magnitude and length of economic disruption as a result of
the worldwide coronavirus (COVID-19) pandemic, including the scope
and duration of government mandated general, partial, or targeted
private sector shutdowns, travel restrictions, and social
distancing measures;
- changes in general economic and financial conditions globally
or in one or more of the markets we serve, including the severity
and duration of the economic slowdown and recessions following the
COVID-19 pandemic;
- our ability to implement our growth strategies and plans;
- our ability to successfully integrate acquisitions and realize
expected benefits and synergies;
- the intensity of competitive activity and our ability to
compete effectively;
- our reliance on a small number of significant customers;
- the fact that our customers do not commit to minimum quantity
purchases;
- our ability to anticipate, identify, or react to changes in
consumer preferences and trends;
- our ability to manage production and inventory levels
effectively in relation to changes in customer demand;
- fluctuations and volatility in the price of raw materials used
to manufacture our products, such as cotton, polyester fibres, dyes
and other chemicals;
- our reliance on key suppliers and our ability to maintain an
uninterrupted supply of raw materials and finished goods;
- the impact of climate, political, social, and economic risks,
natural disasters, epidemics, pandemics and endemics, such as the
COVID-19 pandemic, in the countries in which we operate or sell to,
or from which we source production;
- disruption to manufacturing and distribution activities due to
such factors as operational issues, disruptions in transportation
logistic functions, labour disruptions, political or social
instability, weather-related events, natural disasters, epidemics
and pandemics, such as the COVID-19 pandemic, and other unforeseen
adverse events;
- the impacts of the COVID-19 pandemic on our business and
financial performance and consequently on our ability to comply
with the financial covenants under our debt agreements;
- compliance with applicable trade, competition, taxation,
environmental, health and safety, product liability, employment,
patent and trademark, corporate and securities, licensing and
permits, data privacy, bankruptcy, anti-corruption, and other laws
and regulations in the jurisdictions in which we operate;
- the imposition of trade remedies, or changes to duties and
tariffs, international trade legislation, bilateral and
multilateral trade agreements and trade preference programs that
the Company is currently relying on in conducting its manufacturing
operations or the application of safeguards thereunder;
- factors or circumstances that could increase our effective
income tax rate, including the outcome of any tax audits or changes
to applicable tax laws or treaties;
- changes to and failure to comply with consumer product safety
laws and regulations;
- changes in our relationship with our employees or changes to
domestic and foreign employment laws and regulations;
- negative publicity as a result of actual, alleged, or perceived
violations of human rights, labour and environmental laws or
international labour standards, or unethical labour or other
business practices by the Company or one of its third-party
contractors;
- changes in third-party licensing arrangements and licensed
brands;
- our ability to protect our intellectual property rights;
- operational problems with our information systems as a result
of system failures, viruses, security and cyber security breaches,
disasters, and disruptions due to system upgrades or the
integration of systems;
- an actual or perceived breach of data security;
- our reliance on key management and our ability to attract
and/or retain key personnel;
- changes in accounting policies and estimates; and
- exposure to risks arising from financial instruments, including
credit risk on trade accounts receivables and other financial
instruments, liquidity risk, foreign currency risk, and interest
rate risk, as well as risks arising from commodity prices.
These factors may cause the Company’s actual performance and
financial results in future periods to differ materially from any
estimates or projections of future performance or results expressed
or implied by such forward-looking statements. Forward-looking
statements do not take into account the effect that transactions or
non-recurring or other special items announced or occurring after
the statements are made may have on the Company’s business. For
example, they do not include the effect of business dispositions,
acquisitions, other business transactions, asset write-downs, asset
impairment losses, or other charges announced or occurring after
forward-looking statements are made. The financial impact of such
transactions and non-recurring and other special items can be
complex and depends on the facts particular to each of them.
There can be no assurance that the expectations represented by
our forward-looking statements will prove to be correct. The
purpose of the forward-looking statements is to provide the reader
with a description of management’s expectations regarding the
Company’s future financial performance and may not be appropriate
for other purposes. Furthermore, unless otherwise stated, the
forward-looking statements contained in this press release are made
as of the date of this press release, and we do not undertake any
obligation to update publicly or to revise any of the included
forward-looking statements, whether as a result of new information,
future events, or otherwise unless required by applicable
legislation or regulation. The forward-looking statements contained
in this press release are expressly qualified by this cautionary
statement.
About GildanGildan is a leading manufacturer of
everyday basic apparel which markets its products in North America,
Europe, Asia-Pacific, and Latin America, under a diversified
portfolio of Company-owned brands, including Gildan®, American
Apparel®, Comfort Colors®, Gildan® Hammer™, Prim + Preux®,
GoldToe®, Anvil® by Gildan®, Alstyle®, Secret®, Silks®, Kushyfoot®,
Secret Silky®, Therapy Plus®, Peds® and MediPeds®, and under the
Under Armour® brand through a sock licensing agreement providing
exclusive distribution rights in the United States and Canada. Our
product offering includes activewear, underwear, socks, hosiery,
and legwear products sold to a broad range of customers, including
wholesale distributors, screenprinters or embellishers, as well as
to retailers that sell to consumers through their physical stores
and/or e-commerce platforms, and to global lifestyle brand
companies.
Gildan owns and operates vertically-integrated, large-scale
manufacturing facilities which are primarily located in Central
America, the Caribbean Basin, North America, and Bangladesh. With
approximately 44,000 employees worldwide, Gildan operates with a
strong commitment to industry-leading labour and environmental
practices throughout its supply chain in accordance with its
comprehensive Genuine Responsibility® program embedded in the
Company's long-term business strategy. More information about the
Company and its corporate citizenship practices and initiatives can
be found at www.gildancorp.com and
www.genuineresponsibility.com, respectively.
Investor inquiries:Sophie ArgiriouVice
President, Investor Communications(514)
343-8815sargiriou@gildan.com
Media inquiries:Genevieve GosselinDirector,
Corporate Communications and Marketing(514)
343-8814ggosselin@gildan.com
GILDAN ACTIVEWEAR
INC.CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL
POSITION(in thousands of U.S. dollars) -
unaudited
|
January 3, 2021 |
|
December 29, 2019 |
Current assets: |
|
|
|
Cash and cash equivalents |
$ |
505,264 |
|
|
$ |
64,126 |
|
Trade accounts receivable |
196,480 |
|
|
320,931 |
|
Income taxes receivable |
4,632 |
|
|
— |
|
Inventories |
727,992 |
|
|
1,052,052 |
|
Prepaid expenses, deposits, and other current assets |
110,105 |
|
|
77,064 |
|
Total current assets |
1,544,473 |
|
|
1,514,173 |
|
Non-current assets: |
|
|
|
Property, plant and equipment |
896,800 |
|
|
994,980 |
|
Right-of-use assets |
59,445 |
|
|
73,539 |
|
Intangible assets |
289,901 |
|
|
383,864 |
|
Goodwill |
206,636 |
|
|
227,865 |
|
Deferred income taxes |
17,689 |
|
|
9,917 |
|
Other non-current assets |
6,004 |
|
|
6,732 |
|
Total
non-current assets |
1,476,475 |
|
|
1,696,897 |
|
Total
assets |
$ |
3,020,948 |
|
|
$ |
3,211,070 |
|
Current liabilities: |
|
|
|
Accounts payable and accrued liabilities |
$ |
343,722 |
|
|
$ |
406,631 |
|
Income taxes payable |
— |
|
|
1,255 |
|
Current portion of lease obligations |
15,884 |
|
|
14,518 |
|
Total
current liabilities |
359,606 |
|
|
422,404 |
|
Non-current liabilities: |
|
|
|
Long-term debt |
1,000,000 |
|
|
845,000 |
|
Lease obligations |
66,580 |
|
|
66,982 |
|
Other non-current liabilities |
35,865 |
|
|
42,190 |
|
Total
non-current liabilities |
1,102,445 |
|
|
954,172 |
|
Total
liabilities |
1,462,051 |
|
|
1,376,576 |
|
Equity: |
|
|
|
Share capital |
183,938 |
|
|
174,218 |
|
Contributed surplus |
24,936 |
|
|
32,769 |
|
Retained earnings |
1,359,061 |
|
|
1,628,042 |
|
Accumulated other comprehensive income |
(9,038 |
) |
|
(535 |
) |
Total
equity attributable to shareholders of the Company |
1,558,897 |
|
|
1,834,494 |
|
Total
liabilities and equity |
$ |
3,020,948 |
|
|
$ |
3,211,070 |
|
|
|
|
|
|
|
|
|
GILDAN ACTIVEWEAR
INC.CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS
AND COMPREHENSIVE INCOME(in thousands of U.S.
dollars, except per share data) - unaudited
|
Three months ended |
|
Twelve months ended |
|
January 3, 2021 |
|
December 29, 2019 |
|
January 3, 2021 |
|
December 29, 2019 |
Net sales |
$ |
690,155 |
|
|
$ |
658,673 |
|
|
$ |
1,981,276 |
|
|
$ |
2,823,901 |
|
Cost of
sales |
534,648 |
|
|
540,458 |
|
|
1,732,217 |
|
|
2,119,440 |
|
Gross profit |
155,507 |
|
|
118,215 |
|
|
249,059 |
|
|
704,461 |
|
Selling, general and
administrative expenses |
71,934 |
|
|
76,496 |
|
|
272,306 |
|
|
340,487 |
|
Impairment of trade accounts
receivable |
484 |
|
|
1,376 |
|
|
15,453 |
|
|
27,652 |
|
Restructuring and
acquisition-related costs |
4,257 |
|
|
16,049 |
|
|
48,154 |
|
|
47,329 |
|
Impairment of goodwill and intangible assets |
— |
|
|
— |
|
|
93,989 |
|
|
— |
|
Operating income (loss) |
78,832 |
|
|
24,294 |
|
|
(180,843 |
) |
|
288,993 |
|
Financial expenses, net |
13,138 |
|
|
9,542 |
|
|
48,530 |
|
|
39,168 |
|
Earnings (loss) before income
taxes |
65,694 |
|
|
14,752 |
|
|
(229,373 |
) |
|
249,825 |
|
Income
tax recovery |
(1,658 |
) |
|
(17,760 |
) |
|
(4,091 |
) |
|
(9,984 |
) |
Net earnings (loss) |
67,352 |
|
|
32,512 |
|
|
(225,282 |
) |
|
259,809 |
|
|
|
|
|
|
|
|
|
Other comprehensive income
(loss), net of related income taxes: |
|
|
|
|
|
|
|
Cash flow hedges |
3,080 |
|
|
10,981 |
|
|
(8,503 |
) |
|
(3,917 |
) |
Actuarial gain (loss) on employee benefit obligations |
12,142 |
|
|
(1,296 |
) |
|
12,142 |
|
|
(1,296 |
) |
|
15,222 |
|
|
9,685 |
|
|
3,639 |
|
|
(5,213 |
) |
Comprehensive income (loss) |
$ |
82,574 |
|
|
$ |
42,197 |
|
|
$ |
(221,643 |
) |
|
$ |
254,596 |
|
Earnings (loss) per
share: |
|
|
|
|
|
|
|
Basic |
$ |
0.34 |
|
|
$ |
0.16 |
|
|
$ |
(1.14 |
) |
|
$ |
1.27 |
|
Diluted |
$ |
0.34 |
|
|
$ |
0.16 |
|
|
$ |
(1.14 |
) |
|
$ |
1.27 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GILDAN ACTIVEWEAR
INC.CONDENSED CONSOLIDATED STATEMENTS OF CASH
FLOWS(in thousands of U.S. dollars) -
unaudited
|
Three months ended |
|
Twelve months ended |
|
January 3, 2021 |
|
December 29, 2019 |
|
January 3, 2021 |
|
December 29, 2019 |
Cash flows from (used in)
operating activities: |
|
|
|
|
|
|
|
Net earnings |
$ |
67,352 |
|
|
$ |
32,512 |
|
|
$ |
(225,282 |
) |
|
$ |
259,809 |
|
Adjustments to reconcile net earnings to cash flows from (used in)
operating activities: |
|
|
|
|
|
|
|
Depreciation and amortization |
39,561 |
|
|
32,977 |
|
|
147,190 |
|
|
156,794 |
|
Other |
18,827 |
|
|
(17,261 |
) |
|
150,612 |
|
|
18,754 |
|
|
125,740 |
|
|
48,228 |
|
|
72,520 |
|
|
435,357 |
|
Changes in non-cash working capital balances: |
|
|
|
|
|
|
|
Trade accounts receivable |
15,541 |
|
|
207,970 |
|
|
125,150 |
|
|
(3,515 |
) |
Income taxes |
(168 |
) |
|
3,590 |
|
|
(5,747 |
) |
|
2,969 |
|
Inventories |
205,982 |
|
|
(1,854 |
) |
|
320,384 |
|
|
(115,082 |
) |
Prepaid expenses, deposits and other current assets |
(60,802 |
) |
|
(4,779 |
) |
|
(34,801 |
) |
|
(8,320 |
) |
Accounts payable and accrued liabilities |
5,355 |
|
|
9,274 |
|
|
(62,476 |
) |
|
49,621 |
|
Cash flows from operating
activities |
291,648 |
|
|
262,429 |
|
|
415,030 |
|
|
361,030 |
|
|
|
|
|
|
|
|
|
Cash flows from (used in)
investing activities: |
|
|
|
|
|
|
|
Purchase of property, plant and equipment |
(13,062 |
) |
|
(18,385 |
) |
|
(50,670 |
) |
|
(128,676 |
) |
Purchase of intangible assets |
(351 |
) |
|
(2,914 |
) |
|
(7,670 |
) |
|
(11,558 |
) |
Business acquisitions |
— |
|
|
— |
|
|
— |
|
|
(1,300 |
) |
Proceeds on disposal of property, plant and equipment |
51 |
|
|
(88 |
) |
|
830 |
|
|
5,783 |
|
Cash flows used in investing
activities |
(13,362 |
) |
|
(21,387 |
) |
|
(57,510 |
) |
|
(135,751 |
) |
|
|
|
|
|
|
|
|
Cash flows from (used in)
financing activities: |
|
|
|
|
|
|
|
(Decrease) increase in amounts drawn under long-term bank credit
facilities |
— |
|
|
(62,000 |
) |
|
(245,000 |
) |
|
176,000 |
|
Proceeds from term loan |
— |
|
|
— |
|
|
400,000 |
|
|
— |
|
Payment of lease obligations |
(4,188 |
) |
|
(3,445 |
) |
|
(15,418 |
) |
|
(13,534 |
) |
Dividends paid |
— |
|
|
(27,195 |
) |
|
(30,553 |
) |
|
(110,346 |
) |
Proceeds from the issuance of shares |
1,914 |
|
|
1,303 |
|
|
2,854 |
|
|
10,318 |
|
Repurchase and cancellation of shares |
— |
|
|
(128,792 |
) |
|
(23,216 |
) |
|
(257,233 |
) |
Share repurchases for settlement of non-Treasury RSUs |
(2,531 |
) |
|
(7,008 |
) |
|
(2,558 |
) |
|
(7,008 |
) |
Withholding taxes paid pursuant to the settlement of non-Treasury
RSUs |
(2,438 |
) |
|
(6,001 |
) |
|
(2,571 |
) |
|
(6,001 |
) |
Cash flows (used in) from
financing activities |
(7,243 |
) |
|
(233,138 |
) |
|
83,538 |
|
|
(207,804 |
) |
Effect of exchange rate changes on cash and cash equivalents
denominated in foreign currencies |
1,305 |
|
|
431 |
|
|
80 |
|
|
(6 |
) |
Net increase
in cash and cash equivalents during the period |
272,348 |
|
|
8,335 |
|
|
441,138 |
|
|
17,469 |
|
Cash
and cash equivalents, beginning of period |
232,916 |
|
|
55,791 |
|
|
64,126 |
|
|
46,657 |
|
Cash
and cash equivalents, end of period |
$ |
505,264 |
|
|
$ |
64,126 |
|
|
$ |
505,264 |
|
|
$ |
64,126 |
|
Gildan Activewear (NYSE:GIL)
Historical Stock Chart
From Mar 2024 to Apr 2024
Gildan Activewear (NYSE:GIL)
Historical Stock Chart
From Apr 2023 to Apr 2024