Page 1

● ● GILDAN Gildan Activewear Reports First Quarter 2021 Results and Reinstates Quarterly Dividend " Back to Basics " drives strong performance in quarter Sales of $ 590 million , up 28 % over prior year GAAP diluted EPS of $ 0.50 and adjusted diluted EPS¹ of $ 0.48 , including $ 0.09 one - time benefit from USDA's Pandemic Assistance for Cotton Users ( PACU ) program Operating margin of 19.3 % , adjusted operating margin¹ of 18.7 % , including 300 bps impact of PACU benefit Reinstatement of quarterly dividend of $ 0.154 per share , in - line with dividend level prior to suspension ● PRESS RELEASE ( all amounts are in U.S. dollars except where otherwise indicated ) ( 1 ) Please refer to " Definition and reconciliation of non - GAAP financial measures " in this press release Montreal , Wednesday , May 5 , 2021 - Gildan Activewear Inc. ( GIL : TSX and NYSE ) today announced its results for the first quarter ended April 4 , 2021 . " Our first quarter results reflected a strong start to 2021 as continued benefits from our Back to Basics strategy supported sell - through across all channels and drove strong operating margin performance , allowing us to deliver net earnings significantly above prior year and first quarter 2019 levels " said Gildan President and CEO , Glenn J. Chamandy . " While large events have not yet restarted , we continue to be encouraged by the strength of our imprintables business and on the retail side we were pleased with strong double - digit growth in underwear and activewear sales compared to the first quarters of 2020 and 2019. " Overall , the Company generated $ 590 million in sales , up 28 % over last year and down approximately 5 % from the first quarter of 2019. Gross margin in the quarter of 32.0 % and adjusted gross margin¹ of 31.1 % were up 880 bps and 650 bps , respectively , over the same quarter last year . Compared to the first quarter of 2019 , gross margin was up 620 bps and 530 bps on an adjusted basis . Margin performance in the quarter was enhanced by the positive impact of an approximate $ 18 million ( 300 bps ) accrual of a one - time payment from the USDA related to its Pandemic Assistance for Cotton Users ( PACU ) program . Further , despite higher sales in the quarter , we kept our selling , general and administrative ( SG & A ) expenses flat compared to last year , which translated to SG & A as a percentage of sales of 12.4 % in the quarter , a strong improvement over the same quarters in 2020 and 2019. Consequently , we delivered GAAP diluted EPS of $ 0.50 and adjusted diluted EPS of $ 0.48 , including the $ 0.09 per share PACU benefit . Before reflecting the PACU accrual , adjusted diluted EPS of $ 0.39 in the quarter significantly exceeded adjusted diluted EPS of $ 0.06 and $ 0.16 in the first quarters of 2020 and 2019 , respectively . 1 During the first quarter , we generated strong free cash flow of $ 38 million and our available liquidity position at the end of the quarter remained at $ 1.6 billion . Net debt¹ totaled $ 541.6 million and our net debt to adjusted EBITDA¹ ratio decreased to 2.1 from 3.5 at the end of 2020 for external reporting purposes . After reflecting debt covenant adjustments , which exclude the impact of the second quarter of 2020 , the Company's net debt leverage ratio ¹ was 1.1 . Effective April 5 , 2021 , the Company is no longer required to comply with the restrictions and provisions established in June of 2020 when the Company amended its loan agreements to obtain temporary COVID - related covenant relief . Furthermore , subsequent to the quarter - end , the Company repaid its $ 400 million unsecured two - year term loan which was due on April 6 , 2022. Lastly , today we announced that our Board of Directors has approved the reinstatement of the Company's quarterly dividend of $ 0.154 per share , in line with Gildan's previous cash dividend rate prior to suspending these payments after the first quarter of 2020. The Board's action to reinstate dividend payments reflects increased confidence from the strong recovery so far , the Company's solid foundation for future cash flow generation , and the improvement in the Company's reported net debt leverage ratio which has come down near the high end of the Company's historical target range of one to two times net debt to adjusted EBITDA for the trailing twelve month Page 1