Browning West Cautions Shareholders Regarding Gildan Activewear’s Risky Path Forward Under CEO Vince Tyra - Seite 2

Why is Mr. Tyra Proposing to Spend Shareholder Funds on Speculative Investments Like Branding and International Expansion?

Mr. Tyra’s plan contemplates speculative investments in brand building and international expansion. We are alarmed to hear Mr. Tyra referring to ‘brand’ 39 times across his presentation materials and statements. Sadly, Mr. Tyra appears to be introducing to Gildan the same failed branding strategies that doomed his prior employer, Fruit of the Loom. Mr. Tyra’s plan also includes a vague strategy to invest in Gildan’s international business, an area where Mr. Tyra has no previous experience. In contrast, the Browning West slate’s plan calls for a disciplined focus on the few key initiatives that will deliver outsized returns for shareholders with minimal risk.

Why are the Board and Mr. Tyra Persisting with Their Vague and Timid Capital Allocation Policy?

We believe that in recent years the Board’s vague and timid capital allocation policy has degraded Gildan’s earnings per share growth and valuation multiple. Mr. Tyra’s plan continues this policy as it does not call for any increased levels of share repurchases despite the Company’s current low valuation and low leverage. It also alludes to potential acquisitions with no framework for what would qualify as an acquisition target. We remind shareholders of the dangers of allowing Mr. Tyra to undertake any acquisitions given that he destroyed tremendous value at Broder Bros. with an acquisition-based strategy. In contrast to the current Board’s weak capital allocation policy, the Browning West slate’s plan is specific and clear, calling for leverage and buyback targets that would supercharge returns by reducing outstanding shares by 36% over five years while also growing the dividend at a 9% annual rate.

Why do the Board and Mr. Tyra Fail to Outline Specific Long-Term EPS and Stock Price Targets?

Mr. Tyra fails to outline any specific medium- or long-term earnings per share and stock price targets. In fact, Mr. Tyra’s plan includes lower sales growth, lower operating margins, higher capital intensity, and weaker capital allocation relative to the Browning West slate’s plan. This obviously suggests far lower long-term potential returns than our plan. We believe that Mr. Tyra is avoiding any specific long-term targets because he lacks relevant experience in low-cost manufacturing and vertical integration, and he does not want to be held accountable by shareholders. In contrast, the Browning West slate’s plan provides a clear pathway to at least a $60 USD share price by the end of 2025 and a $100 USD share price over the next five years.”

Shareholders are encouraged to visit www.SuperchargeGildan.com to download a copy of the slate’s operating plan, learn how to vote for Browning West’s slate of highly qualified director candidates, and sign up for important campaign updates. Visit SEDAR+ (www.sedarplus.ca) to review a copy of Browning West’s information circular and other relevant materials.