Gildan Activewear Provides Update Related to COVID-19 - Seite 2

Given the unprecedented nature of the COVID-19 situation which is changing rapidly, the Company will continue to monitor and adjust its plans for its business as the situation evolves.  At the end of the fourth quarter of 2019 Gildan had a net debt to adjusted EBITDA leverage ratio¹ of 1.6 times.  As a precautionary measure on March 17, we elected to draw down on the remaining available portion of our revolving long-term bank credit facility, positioning us with close to $600 million of liquidity.  Accordingly, we have a high degree of financial flexibility as we move forward to deal with COVID-19 challenges given our fixed cost structure and focus on expense, capex and working capital management, as well as our balance sheet and access to liquidity.  

The Company issued its first quarter and full year 2020 guidance on February 20, 2020, which did not include the impact of COVID-19 disruptions. Due to the heightened uncertainty relating to the impacts of COVID-19, the Company is withdrawing its first quarter and full year 2020 financial guidance. The Company expects to provide a further update when it releases its first quarter 2020 earnings results.

Gildan is working diligently across all areas of our business to safeguard our people and the continuity of our business, while maintaining support to all our customers. We have been able to successfully navigate through difficult times over the years and adapt to changing environments, which gives us confidence that our strong business model, financial position and resilience will continue to position us well for long-term success as we emerge from the COVID-19 crisis.

Non-GAAP Financial Measures
This 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 are provided below.

Net debt leverage ratio
The 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. The Company uses and believes that certain investors and analysts use the net debt leverage ratio to measure the financial leverage of the Company. Please refer to “Definition and reconciliation of non-GAAP financial measures” in the Company’s 2019 Management’s Discussion and Analysis for the reconciliation of net debt leverage ratio to its most directly comparable IFRS measure.