Gildan Activewear Inc.’s newly reconstituted Board of Directors approved the resumption of share repurchases and an amended normal course issuer bid (NCIB). The company planned on resuming share repurchases following its Annual General Meeting of shareholders, which occurred on May 28, 2024.

“Given our continued execution of the Gildan Sustainable Growth strategy, our expected strong free cash flow and the strength of our balance sheet, we are eager to resume our share repurchases as we move through 2024,” said Glenn Chamandy, president and CEO of Gildan Activewear, Inc.

Gildan received approval from the Toronto Stock Exchange (TSX) to amend its current NCIB, which commenced on August 9, 2023, to increase the maximum number of common shares that could be repurchased from 8,778,638, or 5 percent of its issued and outstanding common shares as at July 31, 2023 (the reference date for the NCIB), to 17,124,249 common shares, representing ten percent of the public float as at July 31, 2023.

All other terms of the NCIB have yet to be amended.

The NCIB, which began August 9, 2023, and will end no later than August 8, 2024, is conducted by open market transactions on the TSX and the New York Stock Exchange (NYSE) or alternative Canadian trading systems, if eligible, or by other means as permitted by securities regulatory authorities, including pre-arranged crosses, exempt offers, private agreements under an issuer bid exemption order issued by securities regulatory authorities and block purchases of common shares.

Under the NCIB, Gildan can purchase up to a maximum of 92,611 common shares daily through the facilities of the TSX, which represents 25 percent of the average daily trading volume on the TSX for the six months ended July 31, 2023, in addition to purchases made on other exchanges including the NYSE.

The price to be paid by Gildan for any common shares would be the market price at the time of the acquisition plus brokerage fees. Purchases made under an issuer bid exemption order would be at a discount to the prevailing market price by the order terms. The actual number of common shares purchased under the NCIB and the timing of the purchases would be at Gildan’s discretion and subject to the limitations set in the TSX Company Manual.

Other than to reflect the increase in the maximum number of common shares that could be repurchased under the NCIB, the automatic securities purchase plan (ASPP) entered into with a designated broker in relation to the NCIB on August 9, 2023, also remains unchanged. The ASPP allows for the purchase of common shares under the NCIB, subject to certain trading parameters, at times when Gildan ordinarily would not be permitted to purchase its common shares due to applicable regulatory restrictions or self-imposed trading black-out periods. Outside of the predetermined black-out periods, common shares may be purchased under the NCIB based on the discretion of the company’s management in compliance with TSX rules and applicable securities laws.

During the period from August 9, 2023, to May 29, 2024, Gildan purchased and canceled 8,611,018 common shares, representing 4.9 percent of its issued and outstanding common shares and 5.0 percent of the public float as of July 31, 2023, for a total cost of US$272.5 million. All shares purchased under the NCIB were canceled.

Gildan’s management and Board of Directors believe the repurchase of common shares represents an appropriate use of Gildan’s financial resources and that share repurchases under the NCIB would not preclude Gildan from continuing to pursue organic growth and complementary acquisitions.

Image courtesy Gildan Activewear, Inc.