June 20, 2006
Gildan Activewear Nicaragua Sewing Facility Destroyed by Fire
Montréal, Tuesday, June 20, 2006 – Gildan Activewear Inc. (GIL; TSX and NYSE) today announced that one of its sewing facilities, located at San Marcos, Nicaragua, has been destroyed this morning by a fire. No Gildan employees were injured, and at this stage the Company’s assessment is that the economic impact to Gildan is expected to be negligible. Gildan is immediately implementing contingency plans to replace the production from this facility, which has annual production of approximately 3.5 million dozens, by increased production from external contractors and other Gildan sewing plants, including a second Gildan sewing facility located nearby in Nicaragua. Gildan’s objective is to restart operations in the San Marcos area, and the Company expects to be operating at full production and full efficiency at this location in the first quarter of fiscal 2007. Replacement of production equipment, inventory and any other assets, as well as transitional operating costs, are covered by Gildan’s insurance policies. The Company is taking steps to alleviate any impact on its San Marcos employees during the transitional period.
Gildan is a vertically-integrated marketer and manufacturer of quality branded basic apparel. The Company manufactures premium quality basic T-shirts, sport shirts and sweatshirts for sale in the wholesale imprinted sportswear market of the U.S., Canadian, European and other international markets. The Company sells its products in large quantities to wholesale distributors as undecorated “blanks”, which are subsequently decorated by screenprinters with designs and logos. Consumers ultimately purchase the Company’s products, with the Gildan label, in venues such as sports, entertainment and corporate events, and travel and tourism destinations. Other end-uses include work uniforms and similar applications to convey individual, group and team identity. As part of its growth strategy, the Company recently announced plans to sell its products into the mass-market retail channel, in addition to the screenprint market. In conjunction with these plans, Gildan is expanding its product-line to include underwear and athletic socks.
Certain statements included in this press release are “forward-looking statements” within the meaning of the U.S. Private Securities Litigation Reform Act of 1995 and Canadian securities legislation and regulations. Such forward-looking statements involve assumptions and known and unknown risks, uncertainties and other factors which could cause actual results to differ materially from future results expressed or implied by such forward-looking statements. You should not place undue reliance on these forward-looking statements, which are made only as of the date of this press release. We refer you to the Company’s filings with the U.S. Securities and Exchange Commission and Canadian securities regulatory authorities for a discussion of other factors that may affect the Company’s future results.
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