Gildan Activewear Announces Second Quarter Results at Top End of
Prior Guidance Range and Reconfirms Full Year EPS Guidance
- EPS for Q2 of U.S. $0.64, up 8.5% from U.S. $0.59 in Q2 of
Fiscal 2013
- Full Year Sales Revenues Now Expected to be Approximately U.S.
$2.4 Billion, Versus Prior Guidance of Approximately U.S. $2.35
Billion
- Full Year Guidance for Adjusted EPS Reconfirmed at U.S.
$3.00-$3.10 as Increased Sales Projected to be Offset by
Transitional Manufacturing Costs to Support Sales Growth
- Planned New Textile Facility to be Located in Costa Rica
MONTREAL, QUEBEC--(Marketwired - May 2, 2014) - Gildan
Activewear Inc. (TSX:GIL)(NYSE:GIL) today announced its results for
its second fiscal quarter ended March 30, 2014. Net earnings of
U.S. $0.64 per share were a record for the second quarter of a
fiscal year and at the top end of the guidance range which the
Company had provided on February 5, 2014. The Company slightly
increased its guidance for full year sales revenues but reiterated
its prior guidance range for adjusted EPS for the full fiscal year,
to include the impact of additional transitional manufacturing
costs which are being incurred to support its projected sales
growth in 2014 and 2015.
Second Quarter Consolidated Results
Net sales in the second quarter amounted to U.S. $548.8 million,
up 4.9% from U.S. $523.0 million in the second quarter of fiscal
2013. The Company had projected net sales for the quarter in excess
of U.S. $550 million. Adjusted net earnings were U.S. $79.2 million
or U.S. $0.64 per share on a diluted basis for the second fiscal
quarter ended March 30, 2014, up 8.9% and 8.5% respectively
compared with adjusted net earnings of U.S. $72.7 million or U.S.
$0.59 per share for the second quarter of fiscal 2013.
The growth in sales and EPS in the second quarter compared to
last year was achieved in spite of the impact of colder weather
which negatively impacted demand for T-shirts and contributed to
soft retail market conditions. The Company's results reflected
strong growth in sales of underwear to U.S. retailers, increased
sales to global lifestyle brands and international printwear
markets and the non-recurrence of a distributor inventory
devaluation discount in the second quarter of fiscal 2013. These
positive factors were partially offset by higher cotton costs
compared to the second quarter of last year.
Consolidated gross margins in the second quarter were 27.9%
compared to 28.9% in the second quarter of last year, as the impact
of higher cotton costs compared to last year was only partially
passed through into higher net selling prices in Printwear and
selling prices for Branded Apparel were not increased. Gross
margins were also negatively impacted by inflationary cost
increases and transitional manufacturing inefficiencies which are
being incurred primarily in sock operations and the former Anvil
textile operations, to support new programs and the introduction of
new products, and which offset the favourable impact of other
manufacturing cost reduction projects.
SG&A expenses in the second quarter were U.S. $69.3 million,
compared with U.S. $73.6 million in the second quarter of last
year. The reduction in SG&A expenses was primarily due to lower
variable compensation expenses and the impact of the lower-valued
Canadian dollar on corporate head office expenses. As a percentage
of sales, SG&A expenses declined to 12.6% from 14.1% a year
ago.
During the second quarter of fiscal 2014, the Company utilized
U.S. $79.9 million of cash, primarily to finance seasonal working
capital increases and capital expenditures of U.S. $85.8 million.
The Company ended the second quarter with cash and cash equivalents
of U.S. $58.6 million and outstanding bank indebtedness of U.S.
$148.0 million.
Second Quarter Segmented Results
Net sales for the Printwear segment amounted to U.S. $378.5
million, up 2.9% from U.S. $368.0 million in the second quarter of
fiscal 2013. Unit sales volumes in Printwear were essentially flat
compared to last year, as higher sales volumes in international
markets were offset by lower shipments in the U.S. and Canada, due
to the impact of colder weather conditions on seasonal demand for
T-shirts. The impact of lower T-shirt demand was partially
mitigated by higher net selling prices and more favourable
product-mix, due to higher sales of fleece and long-sleeve
T-shirts. Distributor inventory levels at the end of the second
quarter continued to be in good balance relative to projected
industry demand.
Net sales for Branded Apparel were U.S. $170.3 million, up 9.9%
from U.S. $155.0 million in the second quarter of last year. The
growth in sales for the Branded Apparel segment was primarily due
to continuing strong consumer demand for Gildan® branded underwear
and increased shipments to global lifestyle brands. Sales of
Gildan® branded products increased by approximately 50% compared to
the second quarter of last year and continue to show very strong
positive momentum for the second half of the fiscal year and for
fiscal 2015, even though overall retail market conditions continue
to be weak.
In the second quarter, the Printwear segment reported operating
income of U.S. $92.2 million, up 5.6% from U.S. $87.3 million in
the second quarter of fiscal 2013. Operating margins for Printwear
were 24.3% compared with 23.7% in the second quarter of last year.
The higher margins for Printwear were due to the non-recurrence of
a distributor inventory devaluation discount in the second quarter
of last year and increased textile manufacturing efficiencies,
partially offset by higher cotton costs and other inflationary cost
increases. The Branded Apparel segment reported operating income of
U.S. $13.3 million, compared to U.S. $13.4 million in the second
quarter of fiscal 2013. Operating margins were 7.8% versus 8.6% a
year ago. The positive impact on operating margins for Branded
Apparel in the second quarter of increased sales volume leverage on
SG&A expenses was offset by the short-term manufacturing
inefficiencies, inflationary cost increases and higher cotton costs
compared to the second quarter of last year, which the Company has
not passed through into higher selling prices in order to drive
strong unit volume growth.
Year-to-date Sales and Earnings
Net sales revenue for the first six months of fiscal 2014
amounted to U.S. $1.0 billion, up 6.0% from U.S. $943.8 million in
the same period last year. The increase in consolidated net sales
was mainly due to higher unit sales volumes in both operating
segments and more favourable printwear product-mix.
Net earnings for the first six months of fiscal 2014 were U.S.
$120.9 million, or U.S. $0.98 per share on a diluted basis,
compared to U.S. $107.6 million, or U.S. $0.88 per share, up 12.4%
and 11.4% respectively compared to the first six months of fiscal
2013. Before reflecting after-tax restructuring and
acquisition-related costs in both years, adjusted net earnings were
U.S. $122.6 million or U.S. $1.00 per share in the first six months
of fiscal 2014, up 9.7% and 9.9% respectively compared to adjusted
net earnings of U.S. $111.8 million or U.S. $0.91 per share in the
same period last year. The increase in net earnings was mainly due
to the increased sales in Printwear and Branded Apparel and
manufacturing efficiencies from cost reduction projects, partially
offset by higher cotton costs and the transitional manufacturing
costs to upgrade the Company's manufacturing operations and support
future growth.
Outlook
The Company has increased its guidance for sales revenues for
the full fiscal year to approximately U.S. $2.4 billion, compared
to the company's prior guidance of approximately U.S. $2.35
billion. Sales revenues for Printwear are now projected to be
approximately U.S. $1.55 billion, compared with the Company's prior
guidance of in excess of U.S. $1.5 billion, and up approximately
5.5% compared with fiscal 2013. Sales revenues for Branded Apparel
are projected to be approximately U.S. $850 million, compared with
the Company's prior guidance of in excess of U.S. $825 million, and
up approximately 19% compared with fiscal 2013.
Adjusted EPS for the full year are still projected to be in the
range of U.S. $3.00-$3.10, up 11.5%-15.2% compared to fiscal 2013.
The earnings impact of slightly higher sales revenues is projected
to be offset by the impact of the transitional manufacturing
inefficiencies which will be higher than previously anticipated and
now include additional costs to train sewing operators and ramp up
sewing operations to support a planned further significant increase
in underwear sales and sales of higher-valued products in fiscal
2015.
The Company's guidance continues to assume no material
deterioration in overall economic conditions which would negatively
impact overall market demand.
The Company now expects that capital expenditures will be at the
high end of its previous range of U.S. $300-$350 million. The
fiscal 2014 capital expenditure program is primarily for the
Company's strategy to invest in vertically-integrated yarn
manufacturing, as well as expenditures for more underwear knitting
equipment at Rio Nance I to support the Company's planned growth in
underwear, the initial investment in the new textile manufacturing
facility, the reconfiguration and upgrading of the equipment at the
former Anvil manufacturing facility in Honduras, new sock
manufacturing equipment, a new sewing facility in the Dominican
Republic, further investments in energy saving projects, and the
new distribution centre in Honduras. The Company has announced that
its new textile facility which it previously announced will be
located at a site in the province of Guanacaste in north-western
Costa Rica, which is strategically located for duty-free,
quota-free access to the Company's major markets in the U.S. In
addition, the site is close to the Company's sewing plants in
Nicaragua and accessible to ports on both the eastern and western
coasts of the country.
The Company is continuing to assess its capacity requirements
due to the introduction of new higher-valued products and projected
further sales growth from new retail programs and increased shelf
space. The Company expects to provide a further update on its
manufacturing plans and the ramp-up of its manufacturing facilities
to support its planned sales growth, when it reports its third
quarter results.
As a result of the higher capital expenditures, the Company
expects to be at the lower end of its prior guidance for free cash
flow for fiscal 2014 of U.S. $50-$100 million. The Company expects
to generate free cash flow of approximately U.S. $200 million in
the second half of the fiscal year.
The Company is projecting that adjusted EPS in the third fiscal
quarter will be essentially unchanged compared to the third quarter
of last year, when it reported adjusted EPS of U.S. $0.95. Net
sales revenues in the third quarter of fiscal 2014 are projected to
be close to U.S. $700 million, up approximately 14% compared with
U.S. $614.3 million in the third quarter of last year. Cotton costs
in the third quarter of fiscal 2014 will be slightly reduced from
the second quarter but higher than the third quarter of fiscal
2013. Gross margins in the third quarter will also be negatively
impacted by the transitional costs being incurred to further
improve the efficiency and product capabilities of certain
manufacturing operations, and by inflationary cost increases.
Results for the fourth quarter compared to the third quarter are
projected to reflect the benefit of higher-value retail programs
and the initial benefit of manufacturing cost reductions from the
Company's capital investment projects. Although results for the
fourth quarter of the fiscal year will continue to be impacted by
inflationary cost increases, which will partially offset the
benefit of manufacturing cost reductions in the quarter from the
Company's capital investment projects, the Company expects to end
the fiscal year with very strong momentum in sales and earnings in
the fourth quarter, which will provide a strong base for growth in
fiscal 2015.
CFO Succession Plan
The Company has announced that Laurence G. Sellyn will remain
with the Company until the end of calendar 2014 before retiring,
having reached the age of 65 and having served as the Company's CFO
for more than 15 years. The Company is confident that this will
ensure that it has sufficient time to finalize its succession plan
and ensure an orderly transition in its finance and other corporate
head office functions.
Declaration of Quarterly Dividend
The Board of Directors has declared a cash dividend of U.S.
$0.108 per share, payable on June 9, 2014 to shareholders of record
on May 15, 2014. This dividend is an "eligible dividend" for the
purposes of the Income Tax Act (Canada) and any other applicable
provincial legislation pertaining to eligible dividends.
Disclosure of Outstanding Share Data
As of April 30, 2014, there were 122,261,774 common shares
issued and outstanding along with 1,133,739 stock options and
493,703 dilutive restricted share units (Treasury RSUs)
outstanding. Each stock option entitles the holder to purchase one
common share at the end of the vesting period at a pre-determined
option price. Each Treasury RSU entitles the holder to receive one
common share from treasury at the end of the vesting period,
without any monetary consideration being paid to the Company.
However, the vesting of at least 50% of each Treasury RSU grant is
contingent on the achievement of performance conditions that are
primarily based on the Company's average return on assets
performance for the period as compared to the S&P/TSX Capped
Consumer Discretionary Index, excluding income trusts, or as
determined by the Board of Directors.
Consolidated Financial Data - unaudited |
(in U.S.$ millions, except per share amounts or otherwise
indicated) |
Q2 2014 |
|
Q2 2013 |
|
YTD 2014 |
|
YTD 2013 |
|
Net
sales |
548.8 |
|
523.0 |
|
1,000.2 |
|
943.8 |
|
Gross
profit |
153.2 |
|
151.2 |
|
272.4 |
|
263.8 |
|
SG&A expenses |
69.3 |
|
73.6 |
|
142.1 |
|
143.0 |
|
Operating income |
83.9 |
|
76.9 |
|
128.3 |
|
114.7 |
|
Adjusted EBITDA(1) |
108.1 |
|
101.8 |
|
176.0 |
|
163.7 |
|
Net
earnings |
79.2 |
|
72.3 |
|
120.9 |
|
107.6 |
|
Adjusted net earnings(1) |
79.2 |
|
72.7 |
|
122.6 |
|
111.8 |
|
|
|
|
|
|
|
|
|
|
Diluted EPS |
0.64 |
|
0.59 |
|
0.98 |
|
0.88 |
|
Adjusted diluted EPS(1) |
0.64 |
|
0.59 |
|
1.00 |
|
0.91 |
|
|
|
|
|
|
|
|
|
|
Gross
margin |
27.9 |
% |
28.9 |
% |
27.2 |
% |
28.0 |
% |
SG&A expenses as a percentage of sales |
12.6 |
% |
14.1 |
% |
14.2 |
% |
15.2 |
% |
Operating margin |
15.3 |
% |
14.7 |
% |
12.8 |
% |
12.2 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash
flows from (used in) operations |
5.6 |
|
24.9 |
|
(5.7 |
) |
70.3 |
|
Free
cash flow(1) |
(79.9 |
) |
(19.6 |
) |
(148.4 |
) |
1.7 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
March 30, |
|
September 29, |
|
As at |
|
|
|
|
2014 |
|
2013 |
|
Inventories |
|
|
|
|
723.4 |
|
595.8 |
|
Trade
accounts receivable |
|
|
|
|
295.7 |
|
255.0 |
|
Net indebtedness (cash in excess of total indebtedness)(1) |
|
|
|
|
89.4 |
|
(97.4 |
) |
(1) Please refer to "Non-GAAP Financial Measures" in this press
release. |
Certain minor rounding variances exist between the condensed
interim consolidated financial statements and this
summary. |
Segmented Financial Data - unaudited |
(in U.S.$ millions) |
Q2 2014 |
|
Q2 2013 |
|
YTD 2014 |
|
YTD 2013 |
|
|
|
|
|
|
|
|
|
|
Segmented net sales: |
|
|
|
|
|
|
|
|
|
Printwear |
378.5 |
|
368.0 |
|
640.4 |
|
611.7 |
|
|
Branded Apparel |
170.3 |
|
155.0 |
|
359.8 |
|
332.1 |
|
Total net sales |
548.8 |
|
523.0 |
|
1,000.2 |
|
943.8 |
|
|
|
|
|
|
|
|
|
|
Segment operating income: |
|
|
|
|
|
|
|
|
|
Printwear |
92.2 |
|
87.3 |
|
140.4 |
|
133.2 |
|
|
Branded Apparel |
13.3 |
|
13.4 |
|
35.2 |
|
33.1 |
|
Total segment operating income |
105.5 |
|
100.7 |
|
175.6 |
|
166.3 |
|
Corporate and other(1) |
(21.6 |
) |
(23.8 |
) |
(47.3 |
) |
(51.6 |
) |
Total operating income |
83.9 |
|
76.9 |
|
128.3 |
|
114.7 |
|
(1) Includes corporate head office expenses, restructuring and
acquisition-related costs, and amortization of intangible assets,
excluding software. |
Certain minor rounding variances exist between the condensed
interim consolidated financial statements and this
summary. |
Information for Shareholders
Gildan Activewear Inc. will hold a conference call to discuss these
results and business outlook today at 8:30 AM ET. The conference
call can be accessed by dialing (800) 447-0521 (Canada & U.S.)
or (847) 413-3238 (international) and entering passcode 37014076,
or by live sound webcast on Gildan's website ("Investor Relations"
section) at the following address:
http://www1.gildan.com/corporate/IR/webcastPresentations.cfm. If
you are unable to participate in the conference call, a replay will
be available starting today at 11:00 AM ET by dialing (888)
843-7419 (Canada & U.S.) or (630) 652-3042 (international) and
entering passcode 37014076#, until Sunday, June 1, 2014 at
midnight, or by sound webcast on Gildan's corporate website for 30
days following the live webcast.
This release should be read in conjunction with Gildan's 2014
Second Quarter Management's Discussion and Analysis dated May 1,
2014 and its unaudited condensed interim consolidated financial
statements for the three months and six months ended March 30, 2014
(available at
http://www1.gildan.com/corporate/IR/quarterlyReports.cfm) which is
incorporated by reference in this release, and which will be filed
by Gildan with the Canadian securities regulatory authorities and
with the U.S. Securities and Exchange Commission.
About Gildan
Gildan is a leading supplier of quality branded basic family
apparel, including T-shirts, fleece, sport shirts, socks and
underwear. The Company sells its products under a diversified
portfolio of company-owned brands, including the Gildan®, Gold Toe®
and Anvil® brands and brand extensions, as well as under licensing
arrangements for the Under Armour®, Mossy Oak® and New Balance®
brands. The Company distributes its products in printwear markets
in the U.S. and Canada, where Gildan® is the industry-leading
brand, and the Company is increasing its penetration in
international printwear markets. The Company is also one of the
largest suppliers of branded athletic, casual and dress socks for a
broad spectrum of retailers in the U.S. The Company is also
developing Gildan® as a consumer brand for underwear and
activewear.
Gildan owns and operates vertically-integrated, large-scale
manufacturing facilities which are primarily located in Central
America and the Caribbean Basin to efficiently service the
replenishment needs of its customers in the printwear and retail
markets. Gildan has over 37,000 employees worldwide and is
committed to industry-leading labour and environmental practices in
all of its facilities. More information about the Company and its
corporate citizenship practices and initiatives can be found at its
corporate websites www.gildan.com and www.genuinegildan.com,
respectively.
Forward-Looking Statements
Certain 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, unit volume growth, net selling prices, product-mix, cotton
costs, manufacturing efficiencies, capital expenditures,
manufacturing cost savings from capital investments, selling,
general and administrative expenses, operating margins, income tax
rate, earnings per share, free cash flow, the economic environment,
inflation and retail market conditions. 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 the 2013 Annual MD&A 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 this document.
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:
- our ability to implement our growth strategies and plans,
including achieving market share gains, obtaining and successfully
introducing new sales programs, increasing capacity, implementing
cost reduction initiatives and completing and successfully
integrating acquisitions;
- the intensity of competitive activity and our ability to
compete effectively;
- adverse changes in general economic and financial
conditions globally or in one or more of the markets we
serve;
- our reliance on a small number of significant
customers;
- the fact that our customers do not commit contractually to
minimum quantity purchases;
- our ability to anticipate 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 dependence 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
in the countries in which we operate 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, bad weather, natural disasters, pandemics and
other unforeseen adverse events;
- changes to international trade legislation 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;
- compliance with applicable environmental, tax, trade,
employment, health and safety, anti-corruption, privacy and other
laws and regulations in the jurisdictions in which we
operate;
- our significant reliance on computerized information
systems for our business operations, including our JD Edwards
Enterprise Resource Planning (ERP) system which is currently being
upgraded to the latest system release, Enterprise One;
- 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 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;
- our dependence on key management and our ability to attract
and/or retain key personnel;
- changes to and failure to comply with consumer product
safety laws and regulations;
- adverse changes in third party licensing arrangements and
licensed brands;
- our ability to protect our intellectual property
rights;
- changes in accounting policies and estimates;
- exposure to risks arising from financial instruments,
including credit risk, liquidity risk, foreign currency risk and
interest rate risk, as well as risks arising from commodity prices;
and
- the adverse impact of any current or future legal and
regulatory actions.
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 necessarily 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.
Non-GAAP Financial Measures
This press release includes references to certain non-GAAP
financial measures such as adjusted EBITDA, adjusted net earnings,
adjusted diluted EPS, free cash flow, total indebtedness, and net
indebtedness (cash in excess of total indebtedness). 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 EBITDA
Adjusted EBITDA is calculated as earnings before financial
expenses, income taxes and depreciation and amortization and
excludes the impact of restructuring and acquisition-related costs.
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 such as historical
cost. Excluding these items does not imply they are necessarily
non-recurring.
(in U.S.$ millions) |
Q2 2014 |
Q2 2013 |
YTD 2014 |
YTD 2013 |
Net earnings |
79.2 |
72.3 |
120.9 |
107.6 |
Restructuring and acquisition-related costs |
- |
0.8 |
2.1 |
6.1 |
Depreciation and amortization |
24.1 |
24.1 |
45.7 |
42.8 |
Financial expenses, net |
0.1 |
1.6 |
0.5 |
3.9 |
Income tax expense |
4.7 |
3.0 |
6.8 |
3.3 |
Adjusted EBITDA |
108.1 |
101.8 |
176.0 |
163.7 |
Certain minor rounding variances exist between the condensed
interim consolidated financial statements and this
summary. |
Adjusted net earnings and adjusted diluted EPS
Adjusted net earnings is calculated as net earnings before
restructuring and acquisition-related costs, net of related income
tax recoveries. 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.
(in U.S.$ millions, except per share
amounts) |
Q2 2014 |
Q2 2013 |
|
YTD 2014 |
|
YTD 2013 |
|
Net earnings |
79.2 |
72.3 |
|
120.9 |
|
107.6 |
|
Adjustments for: |
|
|
|
|
|
|
|
|
Restructuring and acquisition-related costs |
- |
0.8 |
|
2.1 |
|
6.1 |
|
|
Income tax recovery on restructuring and acquisition-related
costs |
- |
(0.4 |
) |
(0.4 |
) |
(1.9 |
) |
Adjusted net earnings |
79.2 |
72.7 |
|
122.6 |
|
111.8 |
|
Basic EPS |
0.65 |
0.60 |
|
0.99 |
|
0.89 |
|
Diluted EPS |
0.64 |
0.59 |
|
0.98 |
|
0.88 |
|
Adjusted diluted EPS |
0.64 |
0.59 |
|
1.00 |
|
0.91 |
|
Certain minor rounding variances exist between the condensed
interim consolidated financial statements and this
summary. |
Free cash flow
Free cash flow is defined as cash from operating activities
including net changes in non-cash working capital balances, 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 performance of
its business, because it shows how much cash is available after
capital expenditures to repay debt and to reinvest in its business,
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.
(in U.S.$ millions) |
Q2 2014 |
|
Q2 2013 |
|
YTD 2014 |
|
YTD 2013 |
|
Cash flows from (used in) operating activities |
5.6 |
|
24.9 |
|
(5.7 |
) |
70.3 |
|
Cash flows used in investing activities |
(85.5 |
) |
(44.5 |
) |
(142.7 |
) |
(71.1 |
) |
Adjustment for: |
|
|
|
|
|
|
|
|
|
Business acquisition |
- |
|
- |
|
- |
|
2.5 |
|
Free cash flow |
(79.9 |
) |
(19.6 |
) |
(148.4 |
) |
1.7 |
|
Certain minor rounding variances exist between the condensed
interim consolidated financial statements and this
summary. |
Total indebtedness and Net indebtedness / (Cash in excess of total
indebtedness)
Total indebtedness is defined as the total bank indebtedness
and long-term debt (including any current portion), and net
indebtedness (cash in excess of total indebtedness) is
calculated as total indebtedness net of cash and cash equivalents.
The Company considers total indebtedness and net indebtedness (cash
in excess of total indebtedness) to be important indicators of the
financial leverage of the Company.
|
March 30, |
|
September 29, |
|
(in U.S.$ millions) |
2014 |
|
2013 |
|
Long-term debt and total indebtedness |
148.0 |
|
- |
|
Cash and cash equivalents |
(58.6 |
) |
(97.4 |
) |
Net indebtedness (cash in excess of total indebtedness) |
89.4 |
|
(97.4 |
) |
Certain minor rounding variances exist between the condensed
interim consolidated financial statements and this
summary. |
Investor RelationsLaurence G. Sellyn,Executive
Vice-President,Chief Financial and Administrative Officer(514)
343-8805lsellyn@gildan.comSophie Argiriou,Vice-President,Investor
Communications(514) 343-8815sargiriou@gildan.comMedia RelationsAnik
Trudel,Vice-President,Corporate Communications(514)
340-8919atrudel@gildan.com
Gildan Activewear (TSX:GIL)
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