GILDAN ACTIVEWEAR AIMING FOR $44.5 MILLION FROM IPO

Byline: Thomas J. Ryan

NEW YORK — Gildan Activewear Inc., a Montreal-based screenprinter, plans to raise about $44.5 million in an initial public offering.
The company expects to sell 3.85 million shares at between $12 and $14 each. The stock will trade in both U.S. and Canada equity markets.
Gildan was founded in 1984 as a producer of finished fabric, but in 1994 shifted to focus exclusively on the manufacturing of activewear for the wholesale distribution market in the U.S. and Canada.
In the fiscal years 1993 to 1997, EBITDA (earnings before interest, taxes, depreciation and amortization) rose to $9.8 million from $1.9 million, while sales grew to $82.6 million from $21.2 million. Sales in the latest year ended Oct. 5 were up 50.1 percent against 1996, while net earnings climbed to $3.9 million from $347,000 a year earlier.
Dollar figures are U.S., converted from the Canadian dollar at current exchange.
Gildan said it has benefited from selling exclusively to wholesale channels, noting that its major competitors, such as Hanes and Fruit of the Loom, focus primarily on sales to retailers.
Gildan said it has benefited from competitive pricing and low-cost operations. Its average price per dozen last year in T-shirts was $23.93, and in sweatshirts, $76.05.
Going forward, Gildan plans to grow by expanding sales to new and existing wholesale distributors; expanding production capacity and through acquisitions.
The company also plans to broaden its product line to feature henleys, golf shirts and more sweatshirts. Last year, T-shirts accounted for 85 percent of sales, and sweatshirts, 15 percent.
Gildan said it expects sales this year will grow “significantly” because of high backlogs. As of May 3, backlogs on orders due in the next 75 days was $41.9 million.
In the six months ended April 5, earnings rose 7.7 percent to $1.35 million from $1.26 million. Sales surged 48 percent to $51.4 million from $34.7 million. Sales to Broder Bros., a sportswear wholesaler in Plymouth, Minn., and Gildan’s largest account in the period, increased 64.2 percent to $13.5 million.
Sales gains were partly offset by a reduction in gross margins to 19.8 percent of sales from 21.8 percent due to higher training costs associated with recent equipment purchases, rebates given to customers in the first quarter due to industrywide price reductions, an ice storm in January that struck Quebec and northern New York State, where its textile mills and distribution facilities are located, and a lower proportion of fleece sales.
In addition to stock being sold by the company, 650,000 shares will be sold by members of the Chamandy family. H. Gregg Chamandy is chairman and chief executive officer, and his brother, Glenn J. Chamandy, is president and chief operating officer.
The Chamandy family will own 15.6 percent of the outstanding stock and 59.6 percent of the voting power after the offering.

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