(Bloomberg) -- Apparel maker Gildan Activewear Inc. racked up US$77 million in costs in a battle with shareholders that led to the reinstatement of Chief Executive Officer Glenn Chamandy after a five-month absence.
The expenses included US$15.3 million in severance for Vince Tyra, who became CEO in January and departed in May when a pro-Chamandy group of shareholders won a vote and installed a new board. The itemized tally was included in Gildan’s second-quarter earnings statement released Thursday.
Arun Bajaj, a former senior executive who left alongside Tyra, received US$9.1 million in severance. The company also spent US$33.3 million in advisory and legal fees and incurred about US$9 million in compensation expenses for Chamandy.
Gildan reported net sales of US$862 million in the quarter, slightly better than analysts had forecast. The company earned 74 cents a share on an adjusted basis — which excludes the proxy-fight costs — beating the 72 cents expected by analysts in a Bloomberg survey.
Shares of the Montreal-based company briefly touched a record high of $58 on Thursday before paring those gains to trade at $56.55 as of 1:48 p.m. in Toronto. The stock is up about 16% since announcement on May 23 that the previous board and Tyra would leave and Chamandy would come back.
“With the proxy battle behind them and returning CEO Glenn Chamandy back in control, the business seems back on track. We expect shares to trade higher today,” Citigroup analyst Paul Lejuez said in a note to clients.
“Everything is intact,” Chamandy told investors on Thursday. The company had been “in breakout mode and firing on all cylinders” before his departure, and he found that nothing had changed when he returned. “All those opportunities are still here,” he said.
The company also issued a three-year outlook that sees annual growth of earnings per share “in the mid-teen range,” partly because it plans to borrow money to buy back shares. That’s in line with the plan presented by dissident shareholders and Chamandy during the proxy contest.
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